Document:

Exhibit 10.1

 

EXECUTION VERSION

 

 

 

AMENDED AND RESTATED
 SENIOR SECURED TERM LOAN
 CREDIT AGREEMENT

 

Dated as of September 24, 2012

 

among

 

AVENTINE RENEWABLE ENERGY HOLDINGS, INC., 
 as Borrower,

 

THE LENDERS FROM TIME TO TIME PARTY THERETO,

 

and

 

CITIBANK, N.A.

as Collateral Agent and Administrative Agent

 

 

 

AVENTINE RENEWABLE ENERGY HOLDINGS, INC.
 AMENDED AND RESTATED SENIOR SECURED TERM LOAN CREDIT AGREEMENT

 

 

Table of Contents

 

	
Section
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE I
    
	
 
    
	
DEFINITIONS AND ACCOUNTING TERMS
    
	
 
    	
 
    	
 
    
	
SECTION 1.01
    	
Defined Terms
    	
2
    
	
SECTION 1.02
    	
Other   Interpretive Provisions
    	
43
    
	
SECTION 1.03
    	
Accounting   Terms
    	
44
    
	
SECTION 1.04
    	
Times   of Day
    	
44
    
	
 
    	
 
    	
 
    
	
ARTICLE II
    
	
 
    
	
THE LOANS
    
	
 
    	
 
    	
 
    
	
SECTION 2.01
    	
The Term Loans
    	
44
    
	
SECTION 2.02
    	
Borrowing   of Loans
    	
45
    
	
SECTION 2.03
    	
Prepayments
    	
46
    
	
SECTION 2.04
    	
Repayment   of the Term Loans
    	
48
    
	
SECTION 2.05
    	
Interest   and Fees
    	
48
    
	
SECTION 2.06
    	
Computation   of Interest and Fees
    	
50
    
	
SECTION 2.07
    	
Evidence   of Debt
    	
50
    
	
SECTION 2.08
    	
Payments   Generally; Administrative Agent’s Clawback
    	
50
    
	
SECTION 2.09
    	
Sharing   of Payments by Lenders
    	
52
    
	
SECTION 2.10
    	
Incremental   Facilities
    	
53
    
	
SECTION 2.11
    	
Extensions   of Term Loans
    	
55
    
	
SECTION 2.12
    	
Defaulting   Lenders
    	
56
    
	
 
    	
 
    	
 
    
	
ARTICLE III
    
	
 
    
	
TAXES, YIELD PROTECTION AND ILLEGALITY
    
	
 
    	
 
    	
 
    
	
SECTION 3.01
    	
Taxes
    	
58
    
	
SECTION 3.02
    	
[Intentionally   omitted]
    	
61
    
	
SECTION 3.03
    	
[Intentionally   omitted]
    	
61
    
	
SECTION 3.04
    	
Increased   Costs
    	
61
    
	
SECTION 3.05
    	
[Intentionally   omitted]
    	
62
    
	
SECTION 3.06
    	
Mitigation   Obligations; Replacement of Lenders
    	
62
    
	
SECTION 3.07
    	
Survival
    	
62
    
	
 
    	
 
    	
 
    
	
ARTICLE IV
    
	
 
    
	
CONDITIONS PRECEDENT TO BORROWING
    
	
 
    	
 
    	
 
    
	
SECTION 4.01
    	
Conditions of Borrowing
    	
62
    

 

 

	
ARTICLE V
    
	
 
    
	
REPRESENTATIONS AND WARRANTIES
    
	
 
    	
 
    	
 
    
	
SECTION 5.01
    	
Formation and Qualification
    	
67
    
	
SECTION 5.02
    	
Authority
    	
67
    
	
SECTION 5.03
    	
Entity   Names
    	
68
    
	
SECTION 5.04
    	
Financial   Statements
    	
68
    
	
SECTION 5.05
    	
Solvency;   No Litigation, Violation, Indebtedness or Default; ERISA Compliance
    	
68
    
	
SECTION 5.06
    	
Licenses   and Permits
    	
70
    
	
SECTION 5.07
    	
Default   of Indebtedness
    	
70
    
	
SECTION 5.08
    	
No   Default
    	
70
    
	
SECTION 5.09
    	
Tax   Returns
    	
70
    
	
SECTION 5.10
    	
Disclosure
    	
70
    
	
SECTION 5.11
    	
Margin   Regulations
    	
71
    
	
SECTION 5.12
    	
No   Burdensome Restrictions
    	
71
    
	
SECTION 5.13
    	
Investment   Company Act
    	
71
    
	
SECTION 5.14
    	
Insurance
    	
71
    
	
SECTION 5.15
    	
No   Labor Disputes
    	
71
    
	
SECTION 5.16
    	
O.S.H.A.   and Environmental Compliance
    	
71
    
	
SECTION 5.17
    	
Ownership   of Property; Liens; Investments, Etc.
    	
72
    
	
SECTION 5.18
    	
Patents,   Trademarks, Copyrights and Licenses
    	
73
    
	
SECTION 5.19
    	
Priority
    	
73
    
	
SECTION 5.20
    	
Anti-Terrorism   Laws
    	
73
    
	
SECTION 5.21
    	
Trading   with the Enemy
    	
74
    
	
SECTION 5.22
    	
Use   of Proceeds
    	
74
    
	
SECTION 5.23
    	
Swaps
    	
74
    
	
SECTION 5.24
    	
Capital   Stock
    	
74
    
	
SECTION 5.25
    	
Equity   Transactions
    	
75
    
	
 
    	
 
    	
 
    
	
ARTICLE VI
    
	
 
    
	
AFFIRMATIVE   COVENANTS
    
	
 
    	
 
    	
 
    
	
SECTION 6.01
    	
Financial Statements
    	
75
    
	
SECTION 6.02
    	
Certificates;   Other Information
    	
76
    
	
SECTION 6.03
    	
Notices
    	
79
    
	
SECTION 6.04
    	
Payment   of Indebtedness
    	
80
    
	
SECTION 6.05
    	
Corporate   Existence
    	
80
    
	
SECTION 6.06
    	
Maintenance   of Properties
    	
80
    
	
SECTION 6.07
    	
Payment   of Taxes and Other Claims
    	
81
    
	
SECTION 6.08
    	
Maintenance   of Insurance
    	
81
    
	
SECTION 6.09
    	
Compliance   with Laws
    	
82
    
	
SECTION 6.10
    	
Books   and Records
    	
82
    
	
SECTION 6.11
    	
Inspection   Rights
    	
82
    

 

ii

 

	
SECTION 6.12
    	
Use   of Proceeds
    	
82
    
	
SECTION 6.13
    	
Covenant   to Guarantee Obligations and Give Security
    	
82
    
	
SECTION 6.14
    	
Compliance   with ERISA
    	
84
    
	
SECTION 6.15
    	
Compliance   with Environmental Laws
    	
85
    
	
SECTION 6.16
    	
Post-Closing   Obligations
    	
85
    
	
SECTION 6.17
    	
Events   of Loss
    	
87
    
	
SECTION 6.18
    	
Further   Assurances
    	
88
    
	
 
    	
 
    	
 
    
	
ARTICLE VII
    
	
 
    
	
NEGATIVE COVENANTS
    
	
 
    	
 
    	
 
    
	
SECTION 7.01
    	
Liens
    	
89
    
	
SECTION 7.02
    	
Indebtedness
    	
89
    
	
SECTION 7.03
    	
Fundamental   Changes
    	
92
    
	
SECTION 7.04
    	
Limitations   on Asset Sales
    	
93
    
	
SECTION 7.05
    	
Restricted   Payments
    	
96
    
	
SECTION 7.06
    	
Change   in Nature of Business
    	
98
    
	
SECTION 7.07
    	
Transactions   with Affiliates
    	
99
    
	
SECTION 7.08
    	
Financial   Covenants
    	
100
    
	
SECTION 7.09
    	
[Reserved]
    	
100
    
	
SECTION 7.10
    	
Accounting   Changes
    	
100
    
	
SECTION 7.11
    	
Limitation   on Dividend and Other Payment Restrictions Affecting Subsidiaries
    	
100
    
	
SECTION 7.12
    	
Limitation   on the Issuance and Sale of Capital Stock of Subsidiaries
    	
102
    
	
SECTION 7.13
    	
Limitation   on Sale and Leaseback Transactions
    	
102
    
	
SECTION 7.14
    	
Investments
    	
103
    
	
SECTION 7.15
    	
Hedging   Agreements
    	
103
    
	
SECTION 7.16
    	
Amendments   of Certain Documents
    	
103
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII
    
	
 
    
	
EVENTS OF DEFAULT AND REMEDIES
    
	
 
    	
 
    	
 
    
	
SECTION 8.01
    	
Events of Default
    	
103
    
	
SECTION 8.02
    	
Remedies   Upon Event of Default
    	
106
    
	
SECTION 8.03
    	
Application   of Funds
    	
106
    
	
 
    	
 
    	
 
    
	
ARTICLE IX
    
	
 
    
	
AGENTS
    
	
 
    	
 
    	
 
    
	
SECTION 9.01
    	
Appointment and Authority
    	
107
    
	
SECTION 9.02
    	
Rights   as a Lender
    	
108
    
	
SECTION 9.03
    	
Exculpatory   Provisions
    	
109
    
	
SECTION 9.04
    	
Reliance   by Administrative Agent and Collateral Agent
    	
110
    
	
SECTION 9.05
    	
Delegation   of Duties
    	
111
    

 

iii

 

	
SECTION 9.06
    	
Resignation   of Administrative Agent and Collateral Agent
    	
111
    
	
SECTION 9.07
    	
Non-Reliance   on Agents and Other Lenders
    	
112
    
	
SECTION 9.08
    	
[Intentionally   Omitted]
    	
112
    
	
SECTION 9.09
    	
Administrative   Agent May File Proofs of Claim
    	
112
    
	
SECTION 9.10
    	
Collateral   and Guarantee Matters
    	
113
    
	
SECTION 9.11
    	
Indemnification
    	
113
    
	
 
    	
 
    	
 
    
	
ARTICLE X
    
	
 
    
	
MISCELLANEOUS
    
	
 
    	
 
    	
 
    
	
SECTION 10.01
    	
Amendments, Etc.
    	
114
    
	
SECTION 10.02
    	
Notices;   Effectiveness; Electronic Communications
    	
115
    
	
SECTION 10.03
    	
No   Waiver; Cumulative Remedies
    	
117
    
	
SECTION 10.04
    	
Expenses;   Indemnity; Damage Waiver
    	
117
    
	
SECTION 10.05
    	
Payments   Set Aside
    	
120
    
	
SECTION 10.06
    	
Successors   and Assigns
    	
120
    
	
SECTION 10.07
    	
Treatment   of Certain Information; Confidentiality
    	
124
    
	
SECTION 10.08
    	
Right   of Setoff
    	
126
    
	
SECTION 10.09
    	
Interest   Rate Limitation
    	
127
    
	
SECTION 10.10
    	
Counterparts;   Integration; Effectiveness
    	
127
    
	
SECTION 10.11
    	
Survival   of Representations and Warranties
    	
127
    
	
SECTION 10.12
    	
Severability
    	
128
    
	
SECTION 10.13
    	
Replacement   of Lenders
    	
128
    
	
SECTION 10.14
    	
Governing   Law; Jurisdiction; Etc.
    	
129
    
	
SECTION 10.15
    	
WAIVER   OF JURY TRIAL
    	
130
    
	
SECTION 10.16
    	
No   Advisory or Fiduciary Responsibility
    	
130
    
	
SECTION 10.17
    	
USA   PATRIOT Act Notice
    	
130
    
	
SECTION 10.18
    	
Time   of the Essence
    	
131
    
	
SECTION 10.19
    	
Intercreditor   Legend
    	
131
    
	
SECTION 10.20
    	
No   Novation
    	
131
    
	
SECTION 10.21
    	
Release   and Covenant Not to Sue
    	
132
    

 

iv

 

	
SCHEDULES
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
IA
    	
 
    	
Term A   Lenders and Term A Lenders’ Commitments
    
	
IB
    	
 
    	
Term B   Lenders and Term B Lenders’ Commitments
    
	
1.01(a)
    	
 
    	
Subsidiary   Guarantors
    
	
4.01(e)
    	
 
    	
Disclosed   Litigation
    
	
5.01(a)
    	
 
    	
Jurisdictions   of Formation and Qualification
    
	
5.01(b)
    	
 
    	
Subsidiaries
    
	
5.02
    	
 
    	
Approvals,   Consents, Authorizations
    
	
5.03
    	
 
    	
Entity   Names
    
	
5.05(d)
    	
 
    	
ERISA   Plans
    
	
5.05(d)(ix)
    	
 
    	
Contributions   to Health, Accident or Life Insurance Benefits
    
	
5.06
    	
 
    	
Licenses   and Permits
    
	
5.09
    	
 
    	
Tax   Identification Numbers
    
	
5.15
    	
 
    	
Labor   Disputes
    
	
5.16
    	
 
    	
O.S.H.A.   and Environmental Compliance
    
	
5.17(b)(i)
    	
 
    	
Material   Owned Real Property
    
	
5.17(b)(ii)
    	
 
    	
Material   Leased Real Property (Loan Parties as lessee)
    
	
5.17(b)(iii)
    	
 
    	
Material   Leased Real Property (Loan Parties as lessor)
    
	
5.18
    	
 
    	
Patents,   Trademarks, Copyrights and Licenses
    
	
5.24
    	
 
    	
Capital   Stock
    
	
7.01
    	
 
    	
Existing   Liens
    
	
7.02
    	
 
    	
Existing   Indebtedness
    
	
7.07(g)
    	
 
    	
Transactions   with Affiliates
    
	
7.14
    	
 
    	
Existing   Investments
    
	
10.02
    	
 
    	
Administrative   Agent’s Office; Addresses for Notices
    
	
 
    	
 
    	
 
    
	
EXHIBITS
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Form of
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
A
    	
 
    	
Borrowing   Notice
    
	
B
    	
 
    	
Perfection   Certificate
    
	
C-1
    	
 
    	
Term   Loan A Note
    
	
C-2
    	
 
    	
Term   Loan B Note
    
	
D
    	
 
    	
Compliance   Certificate
    
	
E-1
    	
 
    	
Assignment   and Assumption (Non Loan Party)
    
	
E-2
    	
 
    	
Assignment   and Assumption (Loan Party)
    
	
F
    	
 
    	
Mortgage
    

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

This AMENDED AND RESTATED CREDIT AGREEMENT (“this Agreement”) is entered into as of September 24, 2012, among AVENTINE RENEWABLE ENERGY HOLDINGS, INC., a Delaware corporation (the “Borrower”), each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), CITIBANK, N.A., in its capacity as administrative agent for the Lenders (in such capacity, together with any successor in interest or assignee pursuant to Article IX, the “Administrative Agent”), and CITIBANK, N.A., in its capacity as collateral agent for the Secured Parties (in such capacity, together with any successor in interest or assignee pursuant to Article IX, the “Collateral Agent”).

 

PRELIMINARY STATEMENTS:

 

WHEREAS, the Borrower, the Lenders, the Administrative Agent and Collateral Agent are parties to that certain Senior Secured Term Loan Credit Agreement, dated as of December 22, 2010 (as amended, restated, supplemented, or otherwise modified from time to time prior to the date hereof, the “Original Credit Agreement”);

 

WHEREAS, as a result of certain events of default expected to occur under the Original Credit Agreement, the Borrower, the Lenders, the Administrative Agent and the Collateral Agent entered into the Forbearance Agreement (as defined herein);

 

WHEREAS, following execution and delivery of the Forbearance Agreement, the Borrower, the Lenders, the Subsidiary Guarantors and a majority of the holders of the Borrower’s issued and outstanding common stock as of the date thereof entered into the Restructuring Agreement (as defined herein);

 

WHEREAS, in accordance with the Restructuring Agreement, the Borrower has requested that the Lenders, the Administrative Agent and the Collateral Agent amend and restate the Original Credit Agreement in order to, among other things, (a) provide for a new term loan A of $30,000,000 by certain of the Lenders, as set forth herein (such loan, as further defined herein, the “Term Loan A” and the Lenders providing the Term Loan A, as further defined herein, the “Term Loan A Lenders”), (b) amend, restate, convert and continue $100,000,000 in principal amount of the Existing Term Loan (as defined herein) extended under the Original Credit Agreement as a term loan B hereunder (as further defined herein, the “Term Loan B”), and (c) cancel and extinguish the remainder of the Existing Term Loan;

 

WHEREAS, in furtherance of the Restructuring Agreement, on the date hereof, the Borrower will issue new shares of its common stock to the Lenders (or their designees), with 50% of such shares being issued to the Term Loan A Lenders (or their designees) in consideration of the Term Loan A Lenders’ agreement to make the Term Loan A and 50% of such shares being issued to all of the Lenders existing as of the Closing Date (or their designees) in consideration of the Lenders’ agreement to cancel and extinguish that portion of the Existing Term Loan in excess of the Term Loan B;

 

 

WHEREAS, the Lenders have indicated their willingness to amend and restate the Original Credit Agreement but only on the terms and conditions of this Agreement, including the continuation of all security interests in the Collateral pursuant to the Collateral Documents and the continuation of the guarantees pursuant to the Subsidiary Guaranty (each as defined herein).

 

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

 

ARTICLE I

 

DEFINITIONS AND ACCOUNTING TERMS

 

SECTION 1.01                                      Defined Terms.  As used in this Agreement, the following terms shall have the meanings set forth below:

 

“ABL Cap” means $58,000,000.

 

“ABL First Priority Liens” has the meaning set forth in the Intercreditor Agreement.

 

“ABL Obligations” has the meaning specified in Section 7.02(a)(ii)(A).

 

“ABL Primary Collateral” has the meaning set forth in the Intercreditor Agreement.

 

“ABL Second Priority Liens” has the meaning set forth in the Intercreditor Agreement.

 

“Accounting Change” means changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants or, if applicable, the Securities and Exchange Commission.

 

“Activities” has the meaning specified in Section 9.02(b).

 

“Additional Term Commitments” has the meaning set forth in Section 2.10(a).

 

“Additional Commitment Effective Date” has the meaning specified in Section 2.10(d).

 

“Adjusted Consolidated Net Income” means, for any period, the aggregate net income (or loss) of the Borrower and its Subsidiaries for such period determined in conformity with GAAP; provided that the following items shall be excluded in computing Adjusted Consolidated Net Income (without duplication):

 

(a)                                 the net income (or loss) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with the Borrower or any of its

 

2

 

Subsidiaries or all or substantially all of the property and assets of such Person are acquired by the Borrower or any of its Subsidiaries;

 

(b)                                 the net income of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary of such net income is not at the time permitted by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Subsidiary (other than any restriction permitted by clause (f), (g)  or (h) of Section 7.11) but excluding any amount of cash actually distributed by such Subsidiary to the Borrower or another Subsidiary during such period;

 

(c)                                  any gains or losses (on an after-tax basis) attributable to sales of assets outside the ordinary course of business of the Borrower and its Subsidiaries;

 

(d)                                 [Intentionally Omitted];

 

(e)                                  all extraordinary gains or losses;

 

(f)                                   income or loss attributable to discontinued operations (including, without limitation, operations disposed of during such period whether or not such operations were classified as discontinued);

 

(g)                                  any non-cash compensation expense realized from grants of stock appreciation or similar rights, stock options or other rights to officers, directors or employees of the Borrower or any of its Subsidiaries;

 

(h)                                 the cumulative effect of a change in accounting principles;

 

(i)                                     any expense with respect to which, and to the extent that, the Borrower is indemnified by a third party (but only if and to the extent that the related indemnification payment from such third party is not included in the calculation of the net income of the Borrower);

 

(j)                                    any non-cash asset impairment charges resulting from application of the FASB Accounting Standards Codification No. 350 and No. 360 and the amortization of intangibles pursuant to the FASB Accounting Standards Codification No. 805;

 

(k)                                 any increase in amortization or depreciation of existing assets or any one-time non-cash charges resulting from purchase accounting in connection with acquisitions; and

 

(l)                                     any non-cash gain or loss attributable to any Hedging Agreement until such time as it is settled, at which time the net gain or loss shall be included.

 

“Administrative Agent” has the meaning specified in the introductory paragraph of this Agreement.

 

3

 

“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02, or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

 

“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.  Notwithstanding the foregoing, solely for the purpose of (x) the definitions of “Required Term Loan A Lenders”, “Required Term Loan B Lenders” and “Required Lenders” and (y) Sections 10.06(d) and 10.06(h), no Lender shall be deemed to Control the Borrower solely because such Lender (or an Affiliate of an Approved Fund of such Lender), in its capacity as a New Equity Holder:  (i) has the right to, or otherwise participates in, the selection of the initial Board of Directors of the Borrower on the Closing Date; (ii) has the right to, or otherwise participates in, the selection of any observer to the Board of Directors of the Borrower from time to time; (iii) is the owner of common stock of the Borrower so long as such Lender, together with its Affiliates and Approved Funds, owns less than 40% of the common stock of the Borrower on a Fully-Diluted Basis; or (iv) may be deemed to be acting together with other New Equity Holders as a group (within the meaning of Section 13(d) of the Exchange Act).

 

“Affiliated Lender” has the meaning specified in Section 10.06(h).

 

“Agents” means, collectively, the Administrative Agent, the Collateral Agent and any co-agent or sub-agent appointed from time to time pursuant to Section 9.05.

 

“Agent’s Group” has the meaning specified in Section 9.02(b).

 

“Agent Parties” has the meaning specified in Section 10.02(c).

 

“Aggregate Commitments” means the Commitments of all the Lenders.

 

“Aggregate Principal Amount” has the meaning specified for such term in the Intercreditor Agreement.

 

“Agreement” has the meaning specified in the introductory paragraph of this Agreement.

 

“Agreement Among Lenders” means that certain Agreement Among Lenders, by and among the Term Loan A Lenders and the Term Loan B Lenders, dated as of September 24, 2012, as the same may be further amended, restated, supplemented or otherwise modified from time to time.

 

“Anti-Terrorism Laws” means any Applicable Law relating to terrorism or money laundering, including Executive Order No. 13224, the USA PATRIOT Act, any Applicable Law comprising or implementing the Bank Secrecy Act, and any Applicable Law administered by the

 

4

 

United States Treasury Department’s Office of Foreign Asset Control (as any of the foregoing Applicable Laws may from time to time be amended, renewed, extended, or replaced).

 

“Applicable Discount” has the meaning set forth in the definition of “Dutch Auction”.

 

“Applicable Law” means, all laws, rules and regulations applicable to the Person, conduct, transaction, covenant, Contractual Obligation or contract in question, including all common law and equitable principles; all provisions of all international, foreign, federal, state and local statutes, treaties, rules, regulations, ordinances, codes, and determinations and orders of arbitrators or courts or other Governmental Authorities, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

“Applicable Percentage” means, with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of the Term Loan A, Term Loan B, or New Term Loan represented by such Lender’s Commitment (if any) or outstanding principal amount of such Term Loan or New Term Loan (as applicable) at such time.  The initial Applicable Percentage of each Lender in respect of the Term Loans is set forth on Schedule IA and Schedule IB hereto or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

 

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

 

“Asset Sale” means:

 

(a)                                 the sale, lease, conveyance or other disposition (including by way of merger or consolidation) in one transaction or a series of related transactions of any assets of the Borrower or any of its Subsidiaries to any Person other than the Borrower and its Subsidiary Guarantors; or

 

(b)                                 the issuance of Capital Stock in any of the Borrower’s Subsidiaries (other than directors’ qualifying shares) or the sale or other disposition of Capital Stock in any of the Borrower’s Subsidiaries to any Person other than the Borrower and its Subsidiary Guarantors;

 

in each case, that is not governed by Section 7.03; provided that “Asset Sale” shall not include:

 

(i)                                     sales or other dispositions of accounts, inventory, products, services, receivables and other Consolidated Current Assets in the ordinary course of business;

 

(ii)                                  sales, transfers or other dispositions of assets constituting a Permitted Investment or Restricted Payment permitted to be made under Section 7.05 or Section 7.14, as applicable;

 

(iii)                               [Intentionally omitted];

 

5

 

(iv)                              any sale, transfer, assignment or other disposition in the ordinary course of business of any property or equipment that has become damaged, worn out, obsolete or otherwise unsuitable for use in connection with the business of the Borrower or its Subsidiaries;

 

(v)                                 sales or grants of licenses to use the Borrower’s or any of its Subsidiaries’ patents, trade secrets, know-how and technology to the extent that such license does not prohibit the licensor from using the patent, trade secret, know-how or technology;

 

(vi)                              foreclosures on assets;

 

(vii)                           any sale or other disposition in the ordinary course of business of intellectual property or other assets (other than Specified Collateral) which are obsolete, surplus, worn out or no longer commercially viable to operate and maintain or desirable in the conduct of the business of the Borrower and its Subsidiaries;

 

(viii)                        the lease or sublease of other property or assets (other than Specified Collateral) in the ordinary course of business not involving any purchase option which does not materially interfere with the business of the Borrower and its Subsidiaries, taken as a whole (subject, in the case of any Collateral, to the Lien securing the Obligations);

 

(ix)                              to the extent allowable under Section 1031 of the Code (or comparable or successor provision), any exchange of property (other than Specified Collateral) for like property for use in any Permitted Business;

 

(x)                                 any Lien (or foreclosure thereon) securing Indebtedness to the extent such Lien is permitted by Section 7.01; or

 

(xi)                              an Event of Loss.

 

“Assignee Group” means (a) two or more Eligible Assignees that are Affiliates of one another or (b) two or more Approved Funds managed by the same investment advisor.

 

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.06(a)), and accepted by the Administrative Agent, in substantially the form of Exhibit E-1 or E-2 (as applicable) or any other form approved by the Administrative Agent.

 

“Attributable Debt” in respect of a Sale and Leaseback Transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction, including any period for which such lease has been extended or may, at the option of the lessor, be extended.  Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP.

 

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“Auction” has the meaning set forth in the definition of “Dutch Auction”.

 

“Auction Amount” has the meaning set forth in the definition of “Dutch Auction”.

 

“Auction Notice” has the meaning set forth in the definition of “Dutch Auction”.

 

“Audited Financial Statements” means the audited consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal year ended December 31, 2011, and the related consolidated statements of income or operations, changes in shareholders’ equity and cash flows for such fiscal year of the Borrower and its Subsidiaries, including the notes thereto.

 

“Average Life” means, at any date of determination with respect to any debt security, the quotient obtained by dividing (a) the sum of the products of (i) the number of years from such date of determination to the dates of each successive scheduled principal payment of such debt security and (ii) the amount of such principal payment by (b) the sum of all such principal payments.

 

“Bank Product Agreement” has the meaning assigned to such term in the Existing ABL Facility as in effect on the date hereof.

 

“Bankruptcy Code” means title 11 of the United States Code, as amended from time to time.

 

“Blocked Person” has the meaning specified in Section 5.20(b).

 

“Board of Directors” means,

 

(a)                                 with respect to a corporation, the board of directors of such corporation or any committee thereof duly authorized to act on behalf of such board;

 

(b)                                 with respect to a partnership, the board of directors or other governing body of the general partner of the partnership;

 

(c)                                  with respect to a limited liability company, the board of directors or other governing body, and in the absence of same, the manager or board of managers or the managing member or members or any controlling committee of managing members thereof; and

 

(d)                                 with respect to any other Person, the board or committee of such Person or other individual or entity serving a similar function.

 

Unless otherwise indicated, the “Board of Directors” refers to the Board of Directors of the Borrower.

 

“Board Resolution” means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Administrative Agent.  Unless otherwise indicated, a Board Resolution refers to a Board Resolution of the Borrower.

 

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“Borrower” has the meaning specified in the introductory paragraph hereto.

 

“Borrower Materials” has the meaning specified in Section 6.02.

 

“Borrowing” means (a) a borrowing consisting of simultaneous term loans constituting the Term Loan A made by each of the Term Loan A Lenders pursuant to Section 2.01(a) or (b) a borrowing consisting of simultaneous term loans constituting a New Term Loan made by Lenders or New Lenders having commitments in respect thereof pursuant to Section 2.10.

 

“Borrowing Notice” means a notice of a Borrowing pursuant to Section 2.02 or 2.10 which shall be substantially in the form of Exhibit A.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Applicable Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located.

 

“Capital Expenditures” means expenditures made or liabilities incurred for the acquisition of any fixed assets or improvements, replacements, substitutions or additions thereto which have a useful life of more than one year, including the total principal portion of Capitalized Lease Obligations, which, in accordance with GAAP, would be classified as capital expenditures.

 

“Capital Stock” means (a) in the case of a corporation, corporate stock (including all classes of common stock and preferred stock); (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (c) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and (d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

 

“Capitalized Lease” means, as applied to any Person, any lease of any property (whether real, personal or mixed) which, in conformity with GAAP, is required to be capitalized (or otherwise reflected as a liability) on the balance sheet of such Person; provided “Capitalized Leases” shall not include any former operating leases which are treated as capital leases as a result of any change in lease accounting resulting from or similar in effect to the Exposure Draft, Leases, issued by the International Accounting Standards Board (IASB) and the U.S. Financial Accounting Standards Board (FASB) on August 17, 2010.

 

“Capitalized Lease Obligations” means with respect to any Person, the obligations of such Person to pay rents or other amounts under any Capital Lease and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP.

 

“Cash Collateral Account” means a blocked, interest bearing deposit account of one or more of the Loan Parties at Citibank, N.A. in the name of the Collateral Agent and under the sole dominion and control of the Collateral Agent, and otherwise established in a manner reasonably satisfactory to the Collateral Agent.

 

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“Cash Equivalents” means any of the following:

 

(a)                                 direct obligations of the United States of America or any agency thereof or obligations fully and unconditionally guaranteed by the United States of America or any agency thereof, in each case, maturing within one year;

 

(b)                                 time deposit accounts, certificates of deposit and money market deposits maturing within one year of the date of acquisition thereof issued by a bank or trust company which is organized under the laws of the United States of America, any state thereof or any foreign country recognized by the United States of America, and which bank or trust company has capital, surplus and undivided profits aggregating in excess of $100,000,000 (or the foreign currency equivalent thereof) and has outstanding debt which is rated “A” (or such similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act) or any money market fund sponsored by a registered broker dealer or mutual fund distributor;

 

(c)                                  repurchase obligations with a term of not more than one year for underlying securities of the types described in clause (a) above entered into with a bank or trust company meeting the qualifications described in clause (b) above;

 

(d)                                 commercial paper, maturing not more than one year after the date of acquisition, issued by a corporation (other than an Affiliate of the Borrower) organized and in existence under the laws of the United States of America, any state thereof or any foreign country recognized by the United States of America with a rating at the time as of which any investment therein is made of “A-1” (or such similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act);

 

(e)                                  securities with maturities of six (6) months or less from the date of acquisition issued or fully and unconditionally guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least “A” by S&P or Moody’s;

 

(f)                                   any mutual fund that has at least 95% of its assets continuously invested in investments of the types described in clauses (a) through (e) above; and

 

(g)                                  overnight deposits and demand deposit accounts (in the respective local currencies) maintained in the ordinary course of business.

 

“Cash Management Agreement” means any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements.

 

“Cash Management Bank” means any Person that, at the time it enters into a Cash Management Agreement, is a Lender or an Affiliate of a Lender, in its capacity as a party to such Cash Management Agreement.

 

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“Cash Rate” has the meaning specified in Section 2.05(a)(ii).

 

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §§9601 et seq.

 

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following:  (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request or directive (whether or not having the force of law) by any Governmental Authority required to be complied with by any Lender.

 

“Change of Control” means such time as:

 

(a)                                 the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Borrower and its Subsidiaries, taken as a whole, to any “person” (within the meaning of Section 13(d) of the Exchange Act) other than the Borrower or any of its Subsidiaries;

 

(b)                                 the Borrower’s stockholders approve a plan for the liquidation or dissolution of the Borrower;

 

(c)                                  any Person or Persons acting together that would constitute a group (for purposes of Section 13(d) of the Exchange Act) (a “group”), together with any Affiliates or related Persons thereof, is or becomes the “Beneficial Owner,” directly or indirectly, of more than 50% of the voting power of the Voting Stock of the Borrower, provided that none of the New Equity Holders shall be deemed to be acting together as a group for this purpose; provided, further, that in no event shall the sale of the Borrower’s common stock to an underwriter or group of underwriters in privity of contract with the Borrower (or any other Person in privity of contract with such underwriters) be deemed to be a Change of Control unless such common stock is held in an investment account, in which case the investment account would be treated without giving effect to the foregoing part of this proviso; or

 

(d)                                 individuals who on the Closing Date constituted the Board of Directors (together with any new directors appointed pursuant to the terms of the Stockholders Agreement or whose election by the Board of Directors or whose nomination by the Board of Directors for election by the Borrower’s stockholders was approved by a vote of at least a majority of the Board of Directors then in office who either were members of the Board of Directors on the Closing Date or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the members of the Board of Directors then in office.

 

“Closing Date” means the first date that all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 10.01.

 

“Closing Fee” has the meaning set forth in Section 2.05(d).

 

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“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder and rulings issued thereunder.

 

“Collateral” means all of the “Collateral” and “Mortgaged Property” referred to in the Collateral Documents and all of the other property that is under the terms of the Collateral Documents, subject to Liens in favor of the Collateral Agent for the benefit of the Secured Parties as security for the Obligations.

 

“Collateral Account” means an account of the Borrower established at Citibank, N.A. and pledged as Collateral to the Collateral Agent for the benefit of the Secured Parties subject to the Intercreditor Agreement and into which, among other things, the Net Cash Proceeds (a) from an Event of Loss and (b) corresponding to the Term Loan Primary Collateral sold in a Primary Collateral Asset Sale are deposited in accordance with the provisions of Sections 6.17 and 7.04, respectively.

 

“Collateral Agent” has the meaning specified in the introductory paragraph to this Agreement.

 

“Collateral Documents” means, collectively, the Security Agreement, the Intercreditor Agreement, the Intellectual Property Security Agreements, the Mortgages, the Perfection Certificate, each of the mortgages, collateral assignments, security agreements, pledge agreements or other similar agreements delivered to the Agents pursuant to Section 4.01 or Section 6.13, and each of the other agreements, instruments or documents that creates or purports to create a Lien in favor of the Collateral Agent for the benefit of the Secured Parties as security for the Obligations.

 

“Commitment” means a Term Loan A Commitment or a commitment in respect of a New Term Loan.

 

“Compliance Certificate” means a certificate substantially in the form of Exhibit D.

 

“Consolidated Current Assets” means all assets of the Borrower and its Subsidiaries that would, in accordance with GAAP, be classified as consolidated current assets.

 

“Consolidated Current Liabilities” means, as of any date of determination, all liabilities of the Borrower and its Subsidiaries at such date which should, in conformity with GAAP, be classified as current liabilities on a consolidated balance sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP, but excluding (a) the principal amount of the current portion of long-term Indebtedness and (b) (without duplication of clause (a) above) the then outstanding principal amount of the Loans.

 

“Consolidated Indebtedness” means, as of any date of determination, for the Borrower and its Subsidiaries on a consolidated basis, the sum of (without duplication) (a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed money (including Obligations hereunder) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments and Obligations in respect of Disqualified Stock, (b) all direct obligations arising under standby letters of credit (other than letters of credit

 

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backed by cash collateral) and similar instruments, (c) all obligations in respect of the deferred purchase price of property or services (other than Trade Payables), (d) Attributable Debt in respect of Sale and Leaseback Transactions, (e) Capitalized Lease Obligations, (f) Indebtedness of other Persons secured by a Lien on the assets of any Borrower or Subsidiary not exceeding the lesser of (i) the amount of such Indebtedness and (ii) the Fair Market Value of such assets, (g) without duplication, all Guarantees with respect to outstanding Indebtedness of the types specified in clauses (a) through (f) above of Persons other than the Borrower or any of its Subsidiaries, and (h) the Hedge Termination Value that is due and payable by the Borrower and its Subsidiaries under any Hedging Agreement that has been closed out.

 

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

 

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

 

“Controlled Group” shall mean, at any time, the Borrower and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control and all other entities which are treated as a single employer under Section 414 of the Code.

 

“Credit Facilities” means, with respect to the Borrower and its Subsidiaries, one or more debt facilities, commercial paper facilities, or indentures providing for revolving credit loans, term loans, notes, or other financing or letters of credit, or other credit facilities (including, without limitation, the Existing ABL Facility), in each case, as amended, modified, renewed, refunded, replaced or refinanced from time to time.

 

“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

 

“Default Rate” means (a) as to any Loan. an interest rate equal to the rate of interest otherwise in effect for such Loan plus 2% per  annum or (b) in any other case or if no rate of interest is in effect for such Loan, a rate of interest equal to 14% per  annum.

 

“Defaulting Lender” means any Lender that (a) has failed to fund any portion of the Term Loans required to be funded by it hereunder within one Business Day of the date required to be funded by it hereunder, (b) has otherwise failed to pay over to any Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of

 

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the date when due, unless the subject of a good faith dispute, (c) has notified the Borrower or the Administrative Agent that it does not intend to comply with the its funding obligations or has made a public statement to that effect with respect to its funding obligations hereunder or under other agreements in which it commits to extend credit, or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a bankruptcy or insolvency proceeding, (ii) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditor or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it, of (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment; provided, that, a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Capital Stock in that Lender or any direct or indirect parent company thereof by a Governmental Authority.

 

“Disclosed Litigation” has the meaning set forth in Section 4.01(e).

 

“Discount Range” has the meaning set forth in the definition of “Dutch Auction”

 

“Disqualified Stock” means any class or series of Capital Stock of any Person which, by its terms (or by the terms of any security or other Capital Stock into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (except as a result of a Change of Control or Asset Sale so long as any rights of the holders thereof upon the occurrence of a Change of Control or Asset Sale event shall be subject to the prior repayment in full of the Term Loans and all other Obligations that are accrued and payable and the termination of the Commitments), (b) is redeemable at the option of the holder thereof, in whole or in part, (c) provides for the scheduled payments of dividends in cash, or (d) is or becomes convertible into or exchangeable for Indebtedness or any other Capital Stock that would constitute Disqualified Stock, in each case, prior to the date that is ninety-one (91) days after the Maturity Date.

 

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

 

“Domestic Subsidiary” means any Subsidiary of the Borrower that is organized under the laws of any political subdivision of the United States or the District of Columbia.

 

“Dutch Auction” means an auction (an “Auction”) conducted by the Borrower or one of its Subsidiaries in order to purchase Loans, in accordance with the following procedures:

 

(a)                                 Notice Procedures.  In connection with an Auction, the Borrower will provide notification to the Administrative Agent (for distribution to the applicable Lenders) of the Loans that will be the subject of the Auction (an “Auction Notice”); provided that any Auction Notice must apply to (i) with respect to the Term Loan A, all Term Loan A Lenders and with respect to the Term Loan B, all Term Loan B Lenders, (ii) only the Term Loan A Lenders and any New Term Loan Lenders so long as any portion of the Term Loan A or any New Term Loan remains outstanding, and (iii) with respect to any New Term Loans, all Lenders of New Term Loans with a like Maturity Date, in each case on the same terms to such Lenders.  Each Auction Notice shall be in a form reasonably acceptable to the Administrative Agent and shall contain (A) the total cash value of the bid, in a minimum amount of $5,000,000 with minimum

 

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increments of $1,000,000 (the “Auction Amount”), and (B) the discount to par, which shall be a range, (the “Discount Range”) of percentages of the par principal amount of the applicable Loans at issue that represents the range of purchase prices that could be paid in the Auction; provided that the minimum discount to par in the Discount Range shall not be less than 5%.

 

(b)                                 Reply Procedures.  In connection with any Auction, each applicable Lender may, in its sole discretion, participate in such Auction and may provide the Administrative Agent with a notice of participation (the “Return Bid”) which shall be in a form reasonably acceptable to the Administrative Agent and shall specify (i) a discount to par that must be expressed as a price (the “Reply Discount”), which must be within the Discount Range and (ii) the principal amount of the applicable Loans purchased (the “Reply Amount”).  Lenders may only submit one Return Bid per Auction.  In addition to the Return Bid, the participating Lender must execute and deliver, to be held in escrow by the Administrative Agent, a form of assignment and acceptance (the “Form of Assignment and Acceptance”) in a form reasonably acceptable to the Administrative Agent.

 

(c)                                  Acceptance Procedures.  Based on the Reply Discounts and Reply Amounts received by the Administrative Agent, the Administrative Agent, in consultation with the Borrower, will determine the applicable discount (the “Applicable Discount”) for the Auction, which will be the highest Reply Discount for which the Borrower or its Subsidiary, as applicable, can complete the Auction at the Auction Amount; provided that, in the event that the Reply Amounts are insufficient to allow the Borrower or its Subsidiary, as applicable, to complete a purchase of the entire Auction Amount (any such Auction, a “Failed Auction”), the Borrower or its Subsidiary shall either, at its election, (i) withdraw the Auction or (ii) complete the Auction at an Applicable Discount equal to the lowest Reply Discount.  The Borrower or its Subsidiary, as applicable, shall purchase the applicable Loans (or the respective portions thereof) from each applicable Lender that submitted a Reply Discount that is equal to or greater than the Applicable Discount (“Qualifying Bids”) at the Applicable Discount; provided that if the aggregate proceeds required to purchase all applicable Loans subject to Qualifying Bids would exceed the Auction Amount for such Auction, the Borrower or its Subsidiary, as applicable, shall purchase such Loans at the Applicable Discount ratably based on the principal amounts of such Qualifying Bids (subject to rounding requirements specified by the Administrative Agent).  Each participating Lender will receive notice of a Qualifying Bid as soon as reasonably practicable but in no case later than five (5) Business Days following the date the Return Bid was due.

 

“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; (d) an Affiliated Lender subject to the terms of Section 10.06(h);  (e) any other Person (other than a natural person) approved by (i) the Administrative Agent and (ii)  unless an Event of Default has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed; and (f) to the extent set forth in Section 10.06(b)(vi), the Borrower or any of its Subsidiaries.

 

“Environment” means ambient and indoor air, surface water and groundwater (including potable water, navigable water and wetlands), land surface or subsurface strata or sediment, natural resources such as flora or fauna or as otherwise defined in any Environmental Law.

 

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“Environmental Laws” means all federal, state and local environmental, land use, zoning, health, chemical use, safety and sanitation laws, statutes, ordinances and codes relating to the protection of the Environment and/or governing the use, storage, treatment, generation, transportation, processing, handling, production or disposal of Hazardous Materials and the rules, regulations, policies, guidelines, interpretations, decisions, orders and directives of federal, state and local governmental agencies and authorities with respect thereto.

 

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any of its Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the Environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

“Environmental Permits” means any and all permits, licenses, registrations, certifications, notifications, exemptions and any other authorization required under any applicable Environmental Law.

 

“Equity Documents” means, collectively, the Subscription Agreement, the Stockholders Agreement, the Registration Rights Agreement, the Warrant Agreements, the Warrants, the Amended and Restated Certificate of Incorporation and Amended and Restated By-Laws of the Borrower, and each of the other documents and agreements entered into by all or some of the Borrower, the New Equity Holders, the Original Equity Holders and/or other parties in connection with the Equity Transactions,  in each case, as in effect on the Closing Date and as amended, supplemented or otherwise modified from time to time.

 

“Equity Interest” means with respect to any Person, all Capital Stock and all Stock Equivalents of such Person.

 

“Equity Transactions” means the transactions to occur on or prior to the Closing Date pursuant to the Equity Documents,  pursuant to which (a) the beneficial owners of all of the Borrower’s Capital Stock will consist of the Original Equity Holders and the New Equity Holders, (b) the Original Equity Holders will own 7.5% of the issued and outstanding common stock of the Borrower, on a Fully-Diluted Basis, immediately after giving effect to the New Equity Issuance (without giving effect to the Warrants), which common stock shall be subject to dilution from time to time as a result of the Permitted Adjustments, (c) the New Equity Holders will own newly issued common stock of the Borrower equal to 92.5% of the issued and outstanding common stock of the Borrower, on a Fully-Diluted Basis, which common stock shall be subject to dilution from time to time as a result of the Permitted Adjustments, (d) 50% of such newly issued common stock will be issued to the Term Loan A Lenders (or their designees) in consideration of the Term Loan A Lenders’ agreement to make the Term Loan A and (e) 50% of such newly issued common stock will be issued to all of the Lenders existing as of the Closing Date (or their designees) in exchange for the cancellation of the outstanding balance of the Existing Term Loan other than the portion thereof continued and reconstituted as the Term Loan B.

 

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

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

 

“Eurocurrency Liabilities” has the meaning specified in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

 

“Event of Default” has the meaning specified in Section 8.01.

 

“Event of Loss” means, with respect to any property or asset (tangible or intangible, real or personal) that constitutes Term Loan Primary Collateral (including any of the Facilities), any of the following:

 

(a)                                 any loss or destruction of, or damage to, such property or asset;

 

(b)                                 any institution of any proceedings for the condemnation or seizure of, or for the exercise of any right of eminent domain with respect to, such property or asset;

 

(c)                                  any actual condemnation, seizure or taking by exercise of the power of eminent domain or otherwise of such property or asset, or confiscation of such property or asset or the requisition of the use of such property or asset; or

 

(d)                                 any settlement in lieu of clauses (b)  or (c) above.

 

“Excepted Leased Real Property” means (a) the Sublease Agreement, dated as of September 23, 2010, between the Borrower and Skywire Software, LLC, and (b) each of the lease agreements described in Schedule 5.17(b)(iii).

 

“Excess Cash Flow” means, for any period,

 

(a)                                 the sum of:

 

(i)                                     Adjusted Consolidated Net Income for such period, plus

 

(ii)                                  the aggregate amount of all non cash charges deducted in arriving at such Adjusted Consolidated Net Income, plus

 

(iii)                               if there was a net increase in Consolidated Current Liabilities during such period, the amount of such net increase, plus

 

(iv)                              if there was a net decrease in Consolidated Current Assets (excluding cash and Cash Equivalents) during such period, the amount of such net decrease (expressed as a positive number), less

 

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(b)                                 the sum of:

 

(i)                                     the aggregate amount of all non cash credits included in arriving at such Adjusted Consolidated Net Income, plus

 

(ii)                                  if there was a net decrease in Consolidated Current Liabilities during such period, the amount of such net decrease, plus

 

(iii)                               if there was a net increase in Consolidated Current Assets (excluding cash and Cash Equivalents) during such period, the amount of such net increase, plus

 

(iv)                              the aggregate amount of Capital Expenditures of the Borrower and its Subsidiaries paid in cash during such period solely to the extent permitted by this Agreement, plus

 

(v)                                 the aggregate amount of all regularly scheduled principal payments of Consolidated Indebtedness made during such period, plus

 

(vi)                              the aggregate amount of scheduled payments of principal made during such period on Capital Lease Obligations, plus

 

(vii)                           the aggregate amount of mandatory principal payments of Consolidated Indebtedness (including in respect of the Existing ABL Facility) made during such period provided (A) such prepayments are otherwise permitted hereunder and (B) if such Consolidated Indebtedness is revolving in nature, either (1) the commitments under such Consolidated Indebtedness are permanently reduced by the amount of such prepayment or (2) in the case of the Existing ABL Facility, such prepayment is required to be made pursuant to Sections 2.5 and 2.7 of the Existing ABL Facility existing on the date hereof, plus

 

(viii)                        the aggregate principal amount of all optional prepayments under the Term Loans and the Existing ABL Facility (to the extent accompanied by a permanent reduction in the commitment thereunder).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Excluded General Intangibles” has the meaning set forth in the Security Agreement.

 

“Excluded Trademark Applications” has the meaning set forth in the Security Agreement.

 

“Excluded Taxes” means, with respect to any Agent, Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) taxes that are imposed on or measured by its overall net income (including branch profits taxes) by the United States and taxes that are imposed on or measured by its overall net income (and franchise taxes imposed in lieu of net income taxes) by the state or foreign

 

17

 

jurisdiction under the laws of which such Agent or Lender (or other such recipient) is organized or any political subdivision thereof and (b) taxes that are imposed on or measured by its overall net income (and franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction of such Lender’s applicable Lending Office or any political subdivision thereof.

 

“Existing ABL Facility” means that certain Second Amended and Restated Credit Agreement, dated as of the Closing Date, among the Borrower, Aventine Renewable Energy — Aurora West, LLC, Aventine Renewable Energy — Mt Vernon, LLC, Aventine Renewable Energy — Canton, LLC, Aventine Power, LLC and Nebraska Energy, L.L.C., as borrowers, and Wells Fargo Capital Finance, LLC, as lender and agent, as may be amended, restated, supplemented or otherwise modified from time to time.

 

“Existing ABL Facility Collateral” means all property or assets of the Borrower or any of its Subsidiaries subject to a first priority Lien in favor of the agent under the Existing ABL Facility.

 

“Existing ABL Forbearance Agreement” means that certain forbearance agreement by and among the Borrower, the Subsidiary Guarantors and the lender and agent under the Existing ABL Facility, dated as of July 27, 2012, as amended on September 5, 2012.

 

“Existing ABL Incremental Facility”  means an incremental facility under the Existing ABL Facility, uncommitted as of the Closing Date, permitting the incurrence of up to an additional $20,000,000 of Indebtedness under the Existing ABL Facility subject to the terms of the Intercreditor Agreement.

 

“Existing Term Loan” means the term loans under the Original Credit Agreement, including all capitalized interest and fees added to the principal amount of such term loans pursuant to the Forbearance Agreement, plus all accrued interest, fees and other amounts added to the principal amount of such term loans on the Closing Date pursuant to Section 2.01.

 

“Existing Warrants” has the meaning set forth in Section 5.24.

 

“Exit Fee” has the meaning set forth in Section 2.05(e).

 

“Exit Fee Payment Date” means the earlier of (i) the Maturity Date of the Term Loan A and (ii) the date of the prepayment in full of the Term Loan A.

 

“Extended Term Loans” has the meaning set forth in Section 2.11.

 

“Extending Term Lender” has the meaning set forth in Section 2.11.

 

“Extension” has the meaning set forth in Section 2.11.

 

“Extension Request” has the meaning set forth in Section 2.11.

 

“Facilities” means the Borrower’s and each of its Subsidiaries’ ethanol production facilities and, in each case, all improvements thereto.

 

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“Failed Auction” has the meaning set forth in the definition of “Dutch Auction”.

 

“Fair Market Value” means the price that would be paid in an arm’s length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy, as determined in good faith by the Board of Directors, whose determination shall be conclusive if evidenced by a resolution of the Board of Directors.

 

“FACTA” has the meaning set forth in Section 3.01(e).

 

“FACTA Documentation” has the meaning set forth in Section 3.01(e).

 

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided, that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Citibank, N.A. on such day on such transactions as determined by the Administrative Agent.

 

“Fee Letter” means the agency fee letter, dated as of December 22, 2010, between the Borrower and Citibank, N.A.

 

“Financial Officer” means with respect to any Person, the chief financial officer, chief accounting officer, vice president of finance, treasurer, assistant treasurer or controller of such Person.

 

“Flood Hazard Property” has the meaning specified in Section 6.16(a)(vi).

 

“Forbearance Agreement” means that certain forbearance agreement by and among the Borrower, the Subsidiary Guarantors, the Lenders and the Agents, dated as of July 27, 2012, entered into under the Original Credit Agreement, as modified by the Restructuring Agreement.

 

“Foreign Lender” means, with respect to the Borrower, any Lender that is organized under the laws of a jurisdiction other than the United States, any state thereof or the District of Columbia.

 

“Foreign Subsidiary” means a Subsidiary that is organized under the laws of a jurisdiction other than the United States or any state thereof or the District of Columbia and any Subsidiary thereof.

 

“Form of Assignment and Acceptance” has the meaning set forth in the definition of “Dutch Auction”.

 

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“Fully-Diluted Basis” means the number of shares of common stock of the Borrower that would be outstanding, as of the date of computation, if all issued and outstanding Stock Equivalents had been converted, exercised or exchanged into common stock of the Borrower.

 

“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

 

“GAAP” means generally accepted accounting principles in the United States set forth 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, that are applicable to the circumstances as of the date of determination.

 

“Governmental Authority” means the government of the United States or any other nation, or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

 

“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services (unless such purchase arrangements are on arm’s length terms and are entered into in the ordinary course of business), to take-or-pay, or to maintain financial statement conditions or otherwise) or (b) entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business.  The term “Guarantee” used as a verb has a corresponding meaning.

 

“Hazardous Discharge” means any release or threat of release of a reportable quantity of any Hazardous Materials at the Material Owned Real Property or Material Leased Real Property under CERCLA or of a release of a Hazardous Materials that could have a Material Adverse Effect on any Lender.

 

“Hazardous Materials” means (a) any explosive or radioactive substances or wastes and (b) any hazardous or toxic substances, materials or wastes, defined or regulated as such in or under, or that could reasonably be expected to give rise to liability under, any applicable Environmental Law, including, without limitation, asbestos, polychlorinated biphenyls, urea-formaldehyde insulation, gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products or any coal ash, coal combustion by-products or waste, boiler slag, scrubber residue or flue desulphurization residue.

 

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“Hedge Bank” means any Person that, at the time it enters into a Secured Hedge Agreement, is (i) a Lender or an Affiliate of a Lender, in its capacity as a party to such Secured Hedge Agreement, (ii) Wells Fargo Capital Finance, LLC or any of its Affiliates or (iii) any other entity which customarily enters into secured hedging agreements in the ordinary course of its business.

 

“Hedge Termination Value” means, in respect of any one or more Hedging Agreements, after taking into account the effect of any valid netting agreement relating to such Hedging Agreements, for any date on or after the date such Hedging Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s).

 

“Hedge Termination Value” means, as of any date of determination, in respect of any one or more Hedging Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such agreements, (a) for any date on or after the date such Hedging Agreements have been closed out and termination value(s) determined in accordance therewith, the sum of (i) the aggregate outstanding amount of ordinary course settlement payments then due and payable by the Loan Parties under such Hedging Agreement plus (ii) the termination amount then due and payable by the Loan Parties under such Hedging Agreement as determined in accordance with its terms and (b) for any date prior to the date referenced in clause (a), the sum of (i) the aggregate outstanding amount of ordinary course settlement payments then due and payable by the Loan Parties under such Hedging Agreement plus (ii) the amount(s) determined as the mark-to-market value(s) for such Hedging Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedging Agreements or otherwise determined in accordance with the terms of such Hedging Agreement.

 

“Hedging Agreement” means any and all agreements with respect to carbon credits, renewable identification numbers and other similar rights issued by the United States Environmental Protection Agency or any other Governmental Authority, rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, cross product hedges, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, carbon credits, renewable identification numbers under the Renewable Fuel Standard program under the Energy Policy Act of 2005 and other similar rights, or any other similar transactions or any combination of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement.

 

“Increase Effective Date” has the meaning specified in Section 2.10(d).

 

“Incremental Amendment” has the meaning specified in Section 2.10(e).

 

“Indebtedness” means, with respect to any Person at any date of determination (without duplication):

 

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(a)                                 all indebtedness of such Person for borrowed money;

 

(b)                                 all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

 

(c)                                  all obligations of such Person in respect of letters of credit or other similar instruments (including reimbursement obligations with respect thereto, but excluding obligations with respect to trade letters of credit securing obligations (other than obligations described in clause (a) or (b) above or (e), (f) or (g) below) entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if drawn upon, to the extent such drawing is reimbursed no later than the third Business Day following receipt by such Person of a demand for reimbursement);

 

(d)                                 all obligations of such Person to pay the deferred and unpaid purchase price of any property or services, which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto or the completion of such services, except Trade Payables;

 

(e)                                  all Capitalized Lease Obligations and Attributable Debt;

 

(f)                                   all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided that the amount of such Indebtedness shall be the lesser of (i) the Fair Market Value of such asset at such date of determination and (ii) the amount of such Indebtedness;

 

(g)                                  all Indebtedness of other Persons Guaranteed by such Person to the extent such Indebtedness is Guaranteed by such Person;

 

(h)                                 to the extent not otherwise included in this definition, obligations under Hedging Agreements (including Interest Rate Agreements); and

 

(i)                                     all Disqualified Stock issued by such Person with the amount of Indebtedness represented by such Disqualified Stock being equal to the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price, but excluding accrued dividends, if any.

 

The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and, with respect to contingent obligations, the maximum liability upon the occurrence of the contingency giving rise to the obligation; provided that:

 

(i)                                     the amount outstanding at any time of any Indebtedness issued with original issue discount is the face amount of such Indebtedness less the remaining unamortized portion of the original issue discount of such Indebtedness at such time as determined in conformity with GAAP;

 

(ii)                                  money borrowed and set aside at the time of the incurrence of any Indebtedness in order to prefund the payment of the interest on such Indebtedness

 

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shall not be deemed to be “Indebtedness” so long as such money is held to secure the payment of such interest; and

 

(iii)                               Indebtedness shall not include:

 

(A)                               any liability for federal, state, local or other taxes;

 

(B)                               performance, surety or appeal bonds provided in the ordinary course of business; or

 

(C)                               agreements providing for indemnification, adjustment of purchase price or similar obligations, or Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Borrower or any of its Subsidiaries pursuant to such agreements, in any case, incurred in connection with the disposition of any business, assets or a Subsidiary (other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition), so long as the principal amount does not exceed the gross proceeds actually received by the Borrower or any Subsidiary in connection with such disposition.

 

“Indemnified Parties” has the meaning specified in Section 10.04(b).

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Indiana Port Lease Agreement” means the Lease Agreement, dated as of October 31, 2006, between the Indiana Port Lessor and the Indiana Port Lessee, as amended as of the Closing Date and as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time after the date hereof in accordance with its terms and the terms of the Loan Documents.

 

“Indiana Port Lease Collateral” means any inventory, equipment or fixtures of the Indiana Port Lessee that are (a) now or hereafter located on the Indiana Port Leased Premises or (b) at any time used in connection with the business of the Indiana Port Lessee carried out on the Indiana Port Leased Premises.

 

“Indiana Port Leased Premises” means the real property leasehold interest leased by the Indiana Port Lessee from the Indiana Port Lessor pursuant to the Indiana Port Lease Agreement on which the Mt. Vernon Facility is located.

 

“Indiana Port Lessee” means Aventine Renewable Energy — Mt Vernon, LLC, a Delaware limited liability company.

 

“Indiana Port Lessor” means the Indiana Port Commission, a body corporate and politic existing under the laws of the State of Indiana, and its successors and assigns.

 

“Information” has the meaning specified in Section 10.07.

 

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“Intellectual Property Security Agreement” has the meaning specified in the Security Agreement.

 

“Intercreditor Agreement” means that certain Second Amended and Restated Intercreditor Agreement dated as of the Closing Date among the Administrative Agent, the Collateral Agent and the agent under the Existing ABL Facility, as the same may be further amended, restated, supplemented or otherwise modified from time to time, which agreement amends and restates the Original Intercreditor Agreement.

 

“Interest Payment Date” means the last Business Day of each March, June, September and December and the Maturity Date (or, if sooner, the date on which the Obligations become due and payable pursuant to Section 8.02).

 

“Interest Rate Agreement” means any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement, option or future contract or other similar agreement or arrangement.

 

“Investment” in any Person means any direct or indirect advance, loan or other extension of credit (including, without limitation, by way of Guarantee or similar arrangement; but excluding (a) payroll, commission, travel and similar advances to officers and employees in the ordinary course of business and (b) advances to customers or suppliers in the ordinary course of business that are, in conformity with GAAP, recorded as accounts receivable, prepaid expenses or deposits on the balance sheet of the Borrower or its Subsidiaries and endorsements for collection or deposit arising in the ordinary course of business) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, bonds, notes, debentures or other similar instruments issued by, such Person and shall include the retention of the Capital Stock (or any other Investment) by the Borrower or any of its Subsidiaries of (or in) any Person that has ceased to be a Subsidiary, including without limitation, by reason of any transaction permitted by clause (c) or (d) of Section 7.12.

 

“IRS” means the United States Internal Revenue Service.

 

“Lender” has the meaning specified in the introductory paragraph hereto and includes any Lender that may become a party hereto pursuant to an Assumption and Acceptance, and any New Lender.

 

“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent.

 

“Liquidity” means, as of any date of determination, for the Borrower and its Subsidiaries on a consolidated basis, the sum of (a) Unrestricted Cash and (b) the aggregate amount available to be drawn on under any Credit Facility, including the Existing ABL Facility, as such of date of determination (after giving effect to any borrowing base restrictions).

 

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“Lien” means any mortgage, deed of trust, pledge, security interest, encumbrance, lien or charge of any kind (including, without limitation, any conditional sale or other title retention agreement or lease in the nature thereof or any agreement to give any security interest).

 

“Loan” means a Term Loan (including a New Term Loan).

 

“Loan Documents” means, collectively, (a) this Agreement, (b) the Notes, (c) the Subsidiary Guaranty, (d) the Collateral Documents, (e) each Secured Hedge Agreement, (f) each Secured Cash Management Agreement, (g) the Fee Letter and (h) each other document that is deemed in writing by the Borrower and the Administrative Agent to constitute a Loan Document.

 

“Loan Parties” means, collectively, the Borrower and each of its Subsidiaries.

 

“Loss Cap” has the meaning set forth in Section 2.03(b)(iv).

 

“Loan Transactions” means the making or reinstating of the Loans pursuant to the Loan Documents, the granting or confirming the grant of Liens pursuant to the Collateral Documents and the making or confirming the guarantees pursuant to the Subsidiary Guaranty.

 

“Management Incentive Plan” means the “Management Incentive Plan” of the Borrower, as the same may be adopted after the Closing Date by the Board of Directors of the Borrower, and as the same may thereafter be amended, modified, renewed, restated or replaced, in whole or in part, from time to time by the Board of Directors of the Borrower or in accordance with its terms.

 

“Material Adverse Effect” means a material adverse effect upon (a) the business, assets, operations, property, condition (financial or otherwise) or material agreements of the Borrower and its Subsidiaries, taken as a whole, (b) the ability of the Borrower or any of the Subsidiaries to perform their respective obligations under the Loan Documents or (c) the validity or enforceability of this or any of the other Loan Documents, or, as of the Closing Date and thereafter, so long as Lenders (or their Affiliates or Approved Funds) having an aggregate Applicable Percentage of the outstanding principal amount of the Term Loans in excess of 50.01% continue to beneficially own, directly or indirectly, a majority of the common stock of the Borrower, any of the Equity Documents to which the New Equity Holders are a party; the rights or remedies of the Agents or the Lenders hereunder or under the other Loan Documents, or, as of the Closing Date and thereafter, so long as Lenders (or their Affiliates or Approved Funds) having an aggregate Applicable Percentage of the outstanding principal amount of the Term Loans in excess of 50.01% continue to beneficially own, directly or indirectly, a majority of the common stock of the Borrower, the rights or remedies of the New Equity Holders under the Equity Documents.

 

“Material Contractual Obligation” means any agreement to which any Loan Party is a party that is of the type either referred to as a “material definitive agreement” in Form 8-K or required to be attached as an exhibit to a filing in accordance with Item 601 of Regulation S-K, as promulgated by the SEC.

 

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“Material Leased Real Property” means (a) the real properties leased by any Loan Party listed on Schedule 5.17(b)(ii), and (b) any other real property leased by any Loan Party having a Fair Market Value reasonably estimated by the Borrower to be in excess of $500,000; provided that the leased real property located at 5400 LBJ Freeway, Suite 450, Dallas, Texas 75234 shall not constitute “Material Leased Real Property”.

 

“Material Owned Real Property” means (a) the real properties owned by any Loan Party listed on Schedule 5.17(b)(i), and (b) any other real property owned by any Loan Party having a Fair Market Value reasonably estimated by the Borrower to be in excess of $500,000.

 

“Maturity Date” means, (a) with respect to the Term Loan A, the date which is the fourth anniversary of the Closing Date, (b) with respect to the Term Loan B, the date which is the fifth anniversary of the Closing Date, and (c) with respect to any New Term Loan, the date specified in the applicable Incremental Amendment for such New Term Loan, in each case subject to extension thereof in accordance with Section 2.11; provided, however, that if such date is not a Business Day, the Maturity Date shall be the immediately preceding Business Day.

 

“Maximum Rate” has the meaning set forth in Section 10.09.

 

“Minimum Extension Condition” has the meaning set forth in Section 2.11(b).

 

“Mt. Vernon Facility” means that certain ethanol production facility of the Borrower located in Mt. Vernon, Indiana.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

“Mortgage” means the deeds of trust, trust deeds, deeds to secure debt, mortgages, leasehold mortgages and leasehold deeds of trust substantially in the form of Exhibit F (with such changes as may be reasonably satisfactory to the Collateral Agent and its counsel to account for local law matters) and otherwise in form and substance reasonably satisfactory to the Collateral Agent, delivered pursuant to the Original Credit Agreement (and each other Mortgage delivered pursuant to Section 6.13 from time to time), in each case as amended, restated, supplemented or otherwise modified from time to time.

 

“Mortgage Endorsements” has the meaning set forth in Section 6.16(a)(ii).

 

“Mortgage Effective Date” has the meaning set forth in Section 6.16.

 

“Multiple Employer Plan” shall mean a Plan which has two or more contributing sponsors (including the Borrower or any member of the Controlled Group) at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.

 

“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

 

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“NDA Signatories” means such prospective Lenders or purchasers of Equity Interests of the Borrower that have executed a customary non-disclosure agreement for the benefit of the Borrower and its Subsidiaries.

 

“Net Cash Proceeds” means:

 

(a)                                 with respect to any Asset Sale, the aggregate cash proceeds received by the Borrower or any of its Subsidiaries in respect of any Asset Sale (including any cash received (x) upon the sale or other disposition of any non-cash consideration received in any Asset Sale and (y) in respect of deferred payment obligations (to the extent corresponding to the principal, but not the interest, component thereof)), net of

 

(i)                                     the direct costs relating to such Asset Sale, including legal, accounting and investment banking, broker or finder fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale;

 

(ii)                                  any taxes paid or payable (within one (1) year) as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements;

 

(iii)                               amounts required to be applied to the repayment of Indebtedness, secured by a Lien on the asset or assets that were the subject of such Asset Sale;

 

(iv)                              any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP or amount placed in an escrow account for purposes of such an adjustment; and

 

(v)                                 escrowed amounts and amounts taken by the Borrower or any of its Subsidiaries as a reserve against liabilities associated with such Asset Sale, including pension and other post-employment benefit liabilities, Environmental Liabilities and liabilities under any indemnification obligations associated with such Asset Sale, all as determined in accordance with GAAP, provided that such amounts constituting Term Loan Primary Collateral are deposited into the Collateral Account and such amounts constituting ABL Primary Collateral are deposited into blocked accounts established pursuant to the Existing ABL Facility;

 

provided that (A) excess amounts set aside for payment of taxes pursuant to clause (ii) above remaining after such taxes have been paid in full or the statute of limitations therefor has expired and (B) amounts escrowed or initially held in reserve pursuant to clauses (iv) and (v) no longer so held, will, in the case of each of subclauses (A) and (B), at that time become Net Cash Proceeds.

 

(b)                                 with respect to the incurrence or issuance or any Indebtedness by the Borrower or any of its Subsidiaries, the proceeds of such issuance or sale in the form of cash or Cash Equivalents, including payments in respect of deferred payment obligations (to the extent corresponding to the principal, but not interest, component thereof) when received in the form of cash or Cash Equivalents and proceeds from the conversion of other property received when converted to cash or Cash Equivalents, net of attorney’s fees, accountants’ fees, underwriters’ or

 

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placement agents’ fees, discounts or commissions and brokerage, consultant and other fees incurred in connection with such issuance or sale and net of taxes paid or payable (within one year) as a result thereof.

 

(c)                                  with respect to any Event of Loss, the aggregate cash proceeds received by the Borrower or any of its Subsidiaries in respect of such Event of Loss, including insurance proceeds, condemnation awards or damages awarded by any judgment, net of

 

(i)                                     the direct costs in recovery of such Net Cash Proceeds (including reasonable legal, accounting, appraisal and insurance adjuster fees and any relocation expenses incurred as a result thereof);

 

(ii)                                  amounts required to be applied to the repayment of Indebtedness, other than ABL Obligations, secured by a Lien on the asset or assets that were the subject of such Event of Loss;

 

(iii)                               any taxes paid or payable (within one year) as a result thereof; and

 

(iv)                              amounts taken by the Borrower or any of its Subsidiaries, as the case may be, as a reserve against any liabilities associated with such Event of Loss and retained by the Borrower or any of its Subsidiaries, as the case may be, after such Event of Loss, including liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Event of Loss, all as determined in accordance with GAAP; provided that such amounts are deposited into the Collateral Account.

 

“New Equity Holders” means the lenders party to the Original Credit Agreement immediately prior to the Closing Date (or any such lender’s designee under the Subscription Agreement).

 

“New Equity Issuance” means the issuance of new shares of common stock of the Borrower on the Closing Date pursuant to the Amended and Restated Certificate of Incorporation of the Borrower, with 50% of such new shares being issued to the Term Loan A Lenders existing as of the Closing Date (or their designees) and 50% of such new shares being issued to all of the Lenders (or their designees), as further set forth in the definition of “Equity Transactions”.

 

“New Lenders” has the meaning specified in Section 2.10(d).

 

“New Term Loan” has the meaning specified in Section 2.10(a).

 

“New Term Loan Commitment” has the meaning specified in Section 2.10(e).

 

“New Term Loan Effective Date” has the meaning specified in Section 2.10(d).

 

“New Term Loan Facility” has the meaning specified in Section 2.10(a).

 

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“No Undisclosed Information Representation” by a Person means a representation that such Person is not in possession of any material non-public information that has not been disclosed to investors or has not otherwise been disseminated in a manner making it available to investors generally, in each case within the meaning of Regulation FD, prior to such time, with respect to the Borrower or its Subsidiaries, or the respective securities of any of the foregoing.

 

“Nonconsenting Lender” has the meaning set forth in Section 10.13.

 

“Note” means a promissory note made by the Borrower in favor of a Lender evidencing Term Loans, as the case may be, made by such Lender, substantially in the form of Exhibit C-1 or Exhibit C-2.

 

“Obligations” means, with respect to any Person, any payment, performance or other obligation of such Person of any kind, including, without limitation, any liability of such Person on any claim, whether or not the right of any creditor to payment in respect of such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed, legal, equitable, secured or unsecured, and whether or not such claim is discharged, stayed or otherwise affected by any proceeding under Debtor Relief Laws.  Without limiting the generality of the foregoing, the Obligations of any Loan Party under the Loan Documents include (a) the obligation to pay principal, interest, letter of credit commissions, participation fees, charges, expenses, fees, attorneys’ fees and disbursements, indemnities and other amounts payable by such Loan Party under any Loan Document and (b) the obligation of such Loan Party to reimburse any amount in respect of any of the foregoing that any Lender, in its sole discretion, may elect to pay or advance on behalf of such Loan Party.

 

“Officer’s Certificate” means, with respect to any Person, a certificate signed by two Responsible Officers of such Person.  Unless otherwise indicated, an Officer’s Certificate refers to an Officer’s Certificate of the Borrower.

 

“OID” has the meaning set forth in Section 2.10(b).

 

“Omnibus Amendment” means the Omnibus Amendment, dated as of the Closing Date, by and among the Borrower, the Subsidiary Guarantors, the Collateral Agent and the Administrative Agent, amending and ratifying (as so amended) the Security Agreement and the Subsidiary Guaranty.

 

“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

 

“Original Credit Agreement” has the meaning specified in the recitals.

 

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“Original Equity Holders” means the beneficial owners of the Borrower’s common stock immediately prior to the Closing Date.

 

“Original Intercreditor Agreement” means the Amended and Restated Intercreditor Agreement, dated as of July 20, 2011, between the Agents and the agent under the Existing ABL Facility, as the same may have been amended, supplemented or otherwise modified as of the Closing Date.

 

“Other Taxes” means any and all present or future stamp or documentary taxes or any other excise, intangible, mortgage recording or property taxes, charges or similar levies (and interest, fines, penalties and additions related thereto) arising from any payment made by the Borrower hereunder or under any other Loan Document or from the execution, delivery, registration or enforcement of, performance under, or otherwise with respect to, this Agreement or any other Loan Document.

 

“Overnight Rate” means, for any day, the greater of (a) the Federal Funds Rate and (b) an overnight rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

 

“Participant” has the meaning specified in Section 10.06(d).

 

“PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56, signed into law October 26, 2001, as amended.

 

“Perfection Certificate” means, with respect to any Loan Party, a certificate substantially in the form of Exhibit B hereto, completed and supplemented with the schedules and attachments contemplated thereby to the reasonable satisfaction of the Collateral Agent and duly executed by a Responsible Officer of such Loan Party.

 

“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA, or any successor thereto.

 

“Pension Benefit Plan” shall mean at any time any employee pension benefit plan (including a Multiple Employer Plan, but not a Multiemployer Plan) which is covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code and either (i) is maintained or to which contributions are required by any member of the Controlled Group for employees of any member of the Controlled Group; or (ii) has at any time within the preceding five years been maintained or to which contributions have been required by any entity which was at such time a member of the Controlled Group for employees of any entity which was at such time a member of the Controlled Group.

 

“Perfection Certificate” has the meaning specified in Section 4.01(a)(xi).

 

“Permitted Adjustment” means any of the following from time to time (a) the issuance of shares of common stock of the Borrower as a result of the exercise of the Warrants, and (b) the issuance of shares of common stock of the Borrower or options to purchase common stock of the Borrower pursuant to the Management Incentive Plan.

 

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“Permitted Business” means the business of the Borrower and its Subsidiaries engaged in on the Closing Date and any other activities that are related, ancillary or complementary to such business.

 

“Permitted Change of Control” means a Change of Control (other than under clause (b) thereof) so long as, after giving effect thereto, the Borrower remains obligated for the Obligations hereunder, the Subsidiary Guarantors remain obligated for the Guaranteed Obligations as such term is defined under the Subsidiary Guaranty and all such obligations remain secured by the Collateral pursuant to the Collateral Documents, in each case to the same extent as was the case immediately prior to such Change of Control.

 

“Permitted Debt” has the meaning set forth in Section 7.02.

 

“Permitted Investment” means:

 

(a)                                 (i) any Investment by the Borrower or a Subsidiary Guarantor in any Subsidiary Guarantor or (ii) any Investment in the Borrower, a Subsidiary Guarantor or any other Person which will, upon the making of such Investment become a Subsidiary Guarantor or be merged or consolidated with or into, or transfer or convey all or substantially of its assets to the Borrower or any Subsidiary Guarantor;

 

(b)                                 cash or Cash Equivalents;

 

(c)                                  stock, obligations or securities received in satisfaction of judgments;

 

(d)                                 Hedging Agreements (including Interest Rate Agreements) to the extent permitted to be entered into pursuant to Sections 7.02 and Section 7.15;

 

(e)                                  loans and advances to employees and officers of the Borrower and its Subsidiaries made in the ordinary course of business for bona fide business purposes not to exceed $500,000 in the aggregate at any one time outstanding;

 

(f)                                   any Investments received in compromise or resolution of (i) obligations of any Person or customer that were incurred in the ordinary course of business of the Borrower or any of its Subsidiaries, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such Person; or (ii) litigation, arbitration or other disputes with Persons who are not Affiliates;

 

(g)                                  Investments made by the Borrower or its Subsidiaries consisting of consideration received in connection with an Asset Sale made in compliance with Section 7.04;

 

(h)                                 Investments of a Person or any of its Subsidiaries existing at the time such Person becomes a Subsidiary of the Borrower or at the time such Person merges or consolidates with the Borrower or any of its Subsidiaries, in either case, in compliance with this Agreement; provided that such Investments were not made by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Subsidiary of the Borrower or such merger or consolidation;

 

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(i)                                     [Intentionally omitted];

 

(j)                                    any acquisition of assets or Capital Stock (including pursuant to any merger or consolidation of the Borrower in accordance with Section 7.03) solely in exchange for the issuance of Capital Stock (other than Disqualified Stock) of the Borrower;

 

(k)                                 Investments in existence on the Closing Date and listed on Schedule 7.14;

 

(l)                                     Investments represented by Guarantees that are otherwise permitted under this Agreement;

 

(m)                             endorsements for collection or deposit in the ordinary course of business by any Person of bank drafts and similar negotiable instruments of any other Person received as payment for ordinary course of business trade receivables;

 

(n)                                 cash or Cash Equivalents or other investment property deposited in the ordinary course of business to secure (or to secure letters of credit securing) the performance of statutory obligations (including obligations under worker’s compensation, unemployment insurance or similar legislation), surety or appeal bonds, leases, agreements or other obligations under arrangements with utilities, insurance agreements, construction agreements, performance bonds or other obligations of a like nature incurred in the ordinary course of business, in each case if (but only if) such obligations are not for borrowed money (“ordinary course deposits”); provided that the aggregate amount of such Investments outstanding at any time pursuant to this clause (n), when added to the aggregate outstanding amount of Investments constituting ordinary course deposits in existence on the Closing Date and permitted under clause (k) above, does not exceed $5,000,000 in the aggregate at any time outstanding;

 

(o)                                 receivables (including pursuant to extensions of trade credit) and prepaid expenses, in each case arising in the ordinary course of business; provided, however, that such receivables or prepaid expenses would be recorded as current assets of such Person in accordance with GAAP;

 

(p)                                 [Intentionally omitted];

 

(q)                                 additional Investments (including Investments in joint ventures) not to exceed $1,000,000 at any one time outstanding; provided that, in the event of an Investment in any Person that is not a Subsidiary of the Borrower, such Person shall not use the proceeds of such Investment to purchase, redeem, retire or otherwise acquire for value any shares of the Capital Stock of the Borrower; and

 

(r)                                    Investments acquired as a capital contribution to, or in exchange for, or out of the proceeds of a substantially concurrent offering of, Capital Stock (other than Disqualified Stock) of the Borrower;

 

provided, however, that the Investments described above shall only be “Permitted Investments” to the extent that the Borrower or Subsidiary making such Investment is in compliance with Section 6.13 in respect of any assets, property or Capital Stock acquired in connection with such Investment (to the extent applicable); provided  further that with respect to any Investment, the

 

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Borrower may, in its sole discretion, allocate all or any portion of such Investment to one or more of the above clauses (a) through (r) (and with respect to clause (k), so long as such Investment is listed on Schedule 7.14) so that all or a portion of such Investment would be a Permitted Investment.

 

“Permitted Liens” means:

 

(a)                                 Liens created for the benefit of (or to secure) the Obligations of the Borrower and the Subsidiary Guarantors outstanding under this Agreement and the other Loan Documents from time to time (including, without limitation, in respect of the Term Loan A, the Term Loan B, any New Term Loan, under any Secured Cash Management Agreement or under any Secured Hedge Agreement); provided that the Aggregate Principal Amount for all Secured Hedging Agreements shall not at any time exceed the amount permitted to be outstanding pursuant to Section 7.02(a)(ii);

 

(b)                                 (i) with respect to ABL Primary Collateral, ABL First Priority Liens and (ii) with respect to any other Collateral, ABL Second Priority Liens, in each case for so long as such Liens are subject at all times to the Intercreditor Agreement; provided that the Aggregate Principal Amount of such Indebtedness secured by such Liens shall not exceed the ABL Cap (unless the ABL Cap is exceeded solely as a result of an increase in the Hedge Termination Value of a Hedging Agreement that is a Bank Product Agreement after the date such Hedging Agreement (or a particular transaction under such Hedging Agreement) becomes effective);

 

(c)                                  Liens in favor of the Borrower or the Subsidiary Guarantors (not securing ABL Obligations);

 

(d)                                 Liens on property of a Person existing at the time such Person is merged with or into or consolidated with the Borrower or any Subsidiary of the Borrower; provided that such Liens were in existence prior to, and not incurred in contemplation of, such merger or consolidation and do not extend to any property other than that property of the Person merged into or consolidated with the Borrower or such Subsidiary that were so subject to such Liens (plus improvements and accessions to such property);

 

(e)                                  Liens on property (including Capital Stock) existing at the time of acquisition of the property, including by way of merger, consolidation or otherwise, by the Borrower or any Subsidiary of the Borrower; provided that such Liens were in existence prior to, and not incurred in contemplation of, such acquisition and do not extend to any other property owned by the Company or any Restricted Subsidiary (plus improvements and accessions to such property);

 

(f)                                   Liens on cash or Cash Equivalents or other investment property deposited to secure (or to secure letters of credit securing) the performance of statutory obligations (including obligations under worker’s compensation, unemployment insurance or similar legislation), surety or appeal bonds, leases, agreements or other obligations under arrangements with utilities, insurance agreements, construction agreements, performance bonds or other obligations of a like nature incurred in the ordinary course of business, in each case if (but only if) such obligations are not for borrowed money;

 

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(g)                                  Liens existing on the Closing Date and set forth on Schedule 7.01 (other than pursuant to the Indiana Port Lease Agreement or clause (b) or (c) of this definition) and any replacement, extension or renewal of any such Lien upon or in the same property theretofore subject thereto in connection with any replacement, extension or renewal (but without any increase in the amount or change in any direct or contingent obligor) of any Obligations secured thereby);

 

(h)                                 the Lien in favor of the Indiana Port Lessor pursuant to the Indiana Port Lease Agreement on any Indiana Port Lease Collateral securing the obligations of the Indiana Port Lessee under the Indiana Port Lease Agreement;

 

(i)                                     Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;

 

(j)                                    Liens imposed by law (such as carriers’, warehousemen’s and mechanics’ Liens), Liens imposed by law in favor of sellers of farm products and Liens of landlords imposed by law securing obligations to pay lease amounts, in each case, that are not due and payable or in default or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded, in each case, incurred in the ordinary course of business;

 

(k)                                 survey exceptions, encumbrances, restrictions, easements, ordinances, subdivisions approvals, leases, statements of claim or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property that, in each case, were not incurred in connection with Indebtedness and that do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

 

(l)                                     Liens to secure any Permitted Refinancing Indebtedness permitted to be incurred under this Agreement; provided, however, that: (i) the new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the Indebtedness being exchanged, refunded, refinanced, replaced, defeased or discharged (plus improvements and accessions to such property or proceeds or distributions thereof); and (ii) the Indebtedness secured by the new Lien is not increased to any amount greater than the sum of (A) the outstanding principal amount (or accreted value, if applicable) or, if greater, the committed amount of the Indebtedness being exchanged, refunded, refinanced, replaced, defeased or discharged and (B) an amount necessary to pay all accrued interest on such Indebtedness and any fees and expenses, including premiums and tender and defeasance costs, related to such exchange, refunding, refinancing, replacement, defeasance or discharge;

 

(m)                             Liens arising pursuant to an order of attachment, condemnation, eminent domain, distraint or similar legal process arising in connection with legal proceedings and any Liens that are required to protect or enforce rights in any administrative, arbitration or other court

 

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proceedings in the ordinary course of business, in each case, not giving rise to an Event of Default;

 

(n)                                 any Lien on property (real or personal), plant or equipment, all or any part of the purchase price or cost of design, development, construction, installation or improvement of which was financed by Indebtedness permitted to be incurred pursuant to Section 7.02(a)(vii) solely to the extent securing such Indebtedness;

 

(o)                                 leases or subleases granted to others that do not materially interfere with the ordinary course of business of the Borrower and its Subsidiaries, taken as a whole, so long as the aggregate Fair Market Value of all Specified Collateral subject to such Liens pursuant to this clause (o) does not exceed $500,000 at any one time outstanding;

 

(p)                                 bankers’ Liens, rights of setoff and similar Liens with respect to cash and Cash Equivalents on deposit in one or more bank accounts in the ordinary course of business;

 

(q)                                 Liens securing reimbursement obligations with respect to letters of credit that encumber documents and other property relating to such letters of credit and the products and proceeds thereof, so long as the aggregate amount of obligations secured by Liens incurred pursuant to this clause (q) does not exceed $1.0 million at any one time outstanding;

 

(r)                                    Liens on goods imported by the Borrower or any of its Subsidiaries in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of such goods;

 

(s)                                   Liens consisting of conditional sale, title retention, consignment or similar arrangements for the sale of goods acquired by the Borrower or any of its Subsidiaries in the ordinary course of business in accordance with the past practices of the Borrower and its Subsidiaries prior to the Closing Date so long as the aggregate Fair Market Value of all Specified Collateral subject to such Liens pursuant to this clause (s) does not exceed $500,000 at any one time outstanding;

 

(t)                                    Liens securing insurance premium financing arrangements, provided that such Lien is limited to the applicable insurance contracts;

 

(u)                                 Liens arising from filing UCC financing statements regarding operating leases;

 

(v)                                 any interest or title of a lessor, licensor or sublicensor in property leased, licensed or sublicensed to the Borrower or any of its Subsidiaries pursuant to any lease, license or sublicense not constituting a Capital Lease Obligation or other Indebtedness;

 

(w)                               Liens in favor of any title company arising from the posting of any bond, or any escrow funds or other expenditures or posting of monies or any indemnification required by such title company, in connection with work performed at, for or relating to the operation of any of the Loan Parties’ properties;

 

(x)                                 [Intentionally omitted]; and

 

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(y)                                 Liens incurred in the ordinary course of business of the Borrower or any of its Subsidiaries with respect to obligations not exceeding $2,500,000 at any one time outstanding that (i) are not incurred in connection with borrowing of money and (ii) do not materially detract from the value of the property or materially impair its use.

 

“Permitted Refinancing Indebtedness” means any Indebtedness of the Borrower or any of its Subsidiaries issued in exchange for, or the net proceeds of which are used to refund, refinance, replace, defease or discharge, other Indebtedness of the Borrower or any of its Subsidiaries; provided that:

 

(a)                                 the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness exchanged, refunded, refinanced, replaced, defeased or discharged (plus all accrued interest on such Indebtedness and the amount of all fees and expenses, including premiums and tender and defeasance costs, incurred in connection therewith);

 

(b)                                 such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has an Average Life equal to or greater than the Average Life of, the Indebtedness being exchanged, refunded, refinanced, replaced, defeased or discharged (or, if shorter, has a final maturity date later than the final maturity date of, and has an Average Life equal to or greater than the Average Life of, the Loans);

 

(c)                                  if the Indebtedness being exchanged, refunded, refinanced, replaced, defeased or discharged is subordinated in right of payment to the Obligations of the Borrower and each of its Subsidiaries under the Loan Documents, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the Obligations of the Borrower and each of its Subsidiaries under the Loan Documents, as the case may be, on terms at least as favorable to the Secured Parties as those contained in the documentation governing the Indebtedness being exchanged, refunded, refinanced, replaced, defeased or discharged; and

 

(d)                                 such Indebtedness has the Borrower or any of its Subsidiaries as an obligor (whether as borrower, guarantor or otherwise) only if the Borrower or such Subsidiary is an obligor (in any capacity) on the Indebtedness being exchanged, refunded, refinanced, replaced, defeased or discharged.

 

“Person” means any individual, sole proprietorship, partnership, corporation, business trust, joint stock company, trust, unincorporated organization, association, limited liability company, limited liability partnership, institution, public benefit corporation, joint venture, entity or Governmental Authority (whether federal, state, county, city, municipal or otherwise, including any instrumentality, division, agency, body or department thereof).

 

“PIK Interest Amount” has the meaning specified in Section 2.05(a)(ii).

 

“PIK Rate” has the meaning specified in Section 2.05(a)(ii).

 

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“Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by the Borrower or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, by any ERISA Affiliate.

 

“Plant-Level Financial Statements” means, for each Facility and for any specified period, statements of income and operations (including appropriate operating metrics) of such Facility for such period and for the portion of the Borrower’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding period of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail.

 

“Platform” has the meaning specified in Section 6.02.

 

“Preferred Stock” means, with respect to any Person, Capital Stock issued by such Person that are entitled to a preference or priority over any other Capital Stock issued by such Person upon any distribution of such Person’s property and assets, whether by dividend or upon liquidation.

 

“Primary Collateral Asset Sale” means an Asset Sale consisting of the disposition of assets constituting Term Loan Primary Collateral (including the disposition of Capital Stock of a Subsidiary which results in the disposition of assets constituting Term Loan Primary Collateral); provided that if an Asset Sale results in the disposition of assets constituting Term Loan Primary Collateral and ABL Primary Collateral, the term “Primary Collateral Asset Sale” shall be limited to the portion of the Collateral so disposed of that constitutes Term Loan Primary Collateral.

 

“Public Filer” means, with respect to the Borrower (x) that the Borrower has filed a registration statement with the SEC for its common stock and such registration statement has been declared to be, and remains, effective, or (y) that the Borrower is otherwise making its quarterly unaudited consolidated financial statements and annual audited financial statements publicly available (through its corporate web-site or otherwise).

 

“Public Lender” has the meaning specified in Section 6.02.

 

“Qualified Proceeds” means any of the following or any combination of the following:

 

(a)                                 Net Cash Proceeds;

 

(b)                                 the Fair Market Value of any assets (other than Investments) that are used or useful in a Permitted Business; and

 

(c)                                  the Fair Market Value of any Capital Stock of any Person engaged in a Permitted Business if:

 

(i)                                     such Person is or in connection with the receipt by the Borrower or any of its Subsidiaries of that Capital Stock becomes a Subsidiary Guarantor; or

 

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(ii)                                  that Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Borrower or any of its Subsidiaries.

 

“Qualifying Bids” has the meaning set forth in the definition of “Dutch Auction”.

 

“RCRA” shall mean the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., as same may be amended from time to time.

 

“Register” has the meaning specified in Section 10.06(c).

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

 

“Replacement Assets” means any property or assets (other than Indebtedness, Capital Stock, Excluded General Intangibles and Excluded Trademark Applications and other than any assets classified as current assets under GAAP) used or useful in one of the Borrower’s existing Facilities.

 

“Reply Amount” has the meaning set forth in the definition of “Dutch Auction”.

 

“Reply Discount” has the meaning set forth in the definition of “Dutch Auction”.

 

“Reportable Event” shall mean a reportable event described in Section 4043(c) of ERISA or the regulations promulgated thereunder.

 

“Required Lenders” means the Required Term Loan A Lenders and the Required Term Loan B Lenders.

 

“Required Term Loan A Lenders” means, as of any date of determination, Lenders holding more than 50% of the sum of (a) prior to the making of the Term Loan A, the Term Loan A Commitments and (b) after the making of the Term Loan A, the outstanding principal amount of the Term Loan A and any New Term Loan.  For purposes of the definition of “Required Term Loan A Lenders”, (i) the Loans held by any Defaulting Lender and (ii) the Loans held by the Borrower or any of its Affiliates or Subsidiaries, shall, in each case, be excluded for purposes of making a determination of Required Term Loan A Lenders.

 

“Required Term Loan B Lenders” means, as of any date of determination, Lenders holding more than 50% of the the outstanding principal amount of the Term Loan B (inclusive of all PIK Interest Amounts).  For purposes of the definition of “Required Term Loan B Lenders”, (i) the Loans held by any Defaulting Lender and (ii) the Loans held by the Borrower or any of its Affiliates or Subsidiaries shall, in each case, be excluded for purposes of making a determination of Required Term Loan B Lenders.

 

“Responsible Officer” means, with respect to any Person, the chief executive officer, president, any executive officer, any Financial Officer, or any vice president of such Person or, with respect to financial matters, the Financial Officer of such Person.  Unless

 

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otherwise specified, all references herein to “Responsible Officer” shall refer to a Responsible Officer of the Borrower.

 

“Restricted Payment” has the meaning set forth in Section 7.05.

 

“Restricting Information” has the meaning set forth in Section 10.07(b).

 

“Restructuring Agreement” means the Restructuring Agreement, including the Restructuring Term Sheet attached thereto, dated as of August 17, 2012, by and among the Borrower, the Subsidiary Guarantors, the Lenders, and a majority of the beneficial owners of the Borrower’s common stock as of the date thereof.

 

“Return Bid” has the meaning set forth in the definition of “Dutch Auction”.

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto.

 

“Sale and Leaseback Transaction” means a transaction whereby a Person sells or otherwise transfers assets or properties and then or thereafter leases such assets or properties or any part thereof or any other assets or properties which such Person intends to use for substantially the same purpose or purposes as the assets or properties sold or otherwise transferred.

 

“Sale Cap” has the meaning set forth in Section 2.03(b)(ii).

 

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

 

“Secured Cash Management Agreement” means any Cash Management Agreement that is entered into by and between the Borrower and any Cash Management Bank.

 

“Secured Hedge Agreement” means any Hedging Agreement permitted to be entered into pursuant to Section 7.02(a)(x)(A) to the extent such Hedging Agreement is entered into by and between any Loan Party and any Hedge Bank.

 

“Secured Parties” means, collectively, the Agents, the Lenders, the Hedge Banks, the Cash Management Banks, and each co-agent or sub-agent appointed by any Agent from time to time pursuant to Section 9.05.

 

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

 

“Security Agreement” means that certain Security Agreement, dated as of December 22, 2010, by and among Citibank, N.A., as collateral agent, and each of the Grantors (as defined therein) party thereto, together with each other pledge and security agreement and pledge and security agreement supplement delivered pursuant to Section 6.13, in each case as amended by the Omnibus Amendment and as further amended, restated, supplemented or otherwise modified from time to time.

 

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“Solvent” and “Solvency” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities that are probable and estimatable, of such Person; (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured taking into account the possibility of refinancing such obligations and selling assets; (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature taking into account the possibility of refinancing such obligations and selling assets; (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital and (e) such Person is able to pay its debts and liabilities, contingent obligations that are probable and estimatable and other commitments as they mature in the ordinary course of business taking into account the possibility of refinancing such obligations and selling assets.  The amount of contingent liabilities at any time shall be computed taking into account all facts and circumstances existing at such time.

 

“Specified Assets” shall mean any real property (including any real property leasehold interest) or equipment.

 

“Specified Plan” has the meaning set forth in Section 5.24.

 

“Specified Collateral” shall mean any Collateral comprising Specified Assets.

 

“Stated Maturity” means (a) with respect to any debt security, the date specified in such debt security as the fixed date on which the final installment of principal of such debt security is due and payable and (b) with respect to any scheduled installment of principal of or interest on any debt security, the date specified in such debt security as the fixed date on which such installment is due and payable.

 

“Stock Equivalents” means any (a) warrants, options or other right to subscribe for, purchase or otherwise acquire any shares of common stock of Borrower or any other class or series of Capital Stock of the Borrower or (b) any securities convertible into or exchangeable for shares of common stock of the Borrower or any other class or series of Capital Stock of the Borrower.

 

“Stockholders Agreement” means that certain Stockholders Agreement, dated as of the Closing Date, by and among Borrower, the New Equity Holders and each of the other parties identified on the signature pages thereto as “Other Stockholders”.

 

“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, directly, or indirectly through one or more intermediaries, or both, by such Person.  Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

 

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“Subsidiary Guarantors” means, collectively, the subsidiaries of the Borrower listed on Schedule 1.01(a), and each other Subsidiary of the Borrower that guarantees the Obligations pursuant to Section 6.13.

 

“Subsidiary Guaranty” means the certain Guarantee dated as of December 22, 2010, made by the Subsidiary Guarantors in favor of the Secured Parties, together with each other guaranty and guaranty supplement delivered pursuant to Section 6.13, in each case as amended by the Omnibus Amendment and as further amended, restated, supplemented or otherwise modified from time to time.

 

“Surviving Person” has the meaning set forth in Section 7.03(i).

 

“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges, and all liabilities with respect thereto imposed by any Governmental Authority, including any interest, additions to tax, expenses and penalties applicable thereto.

 

“Term Loan A” means, collectively, the loans made by the Term Loan A Lenders to the Borrower on the Closing Date pursuant to Section 2.01(a), in the aggregate principal amount of $30,000,000.  Upon the funding of the Term Loan A and thereafter, unless otherwise specified or the context otherwise requires, the Term Loan A shall include the Closing Fee added to the principal amount thereof pursuant to Section 2.05(d).

 

“Term Loan A Commitment” means, with respect to each Term Loan A Lender, the commitment of such Lender to make a portion of the Term Loan A to the Borrower in the amount set forth in Schedule 1A hereto, as the same may be terminated or reduced from time to time in accordance with the terms of this Agreement.

 

“Term Loan A Lender” means a Lender with a Term Loan A Commitment or following the funding of the Term Loan A, holding any portion of the Term Loan A.

 

“Term Loan A Obligations” means any Obligations with respect to the Term Loan A (including without limitation, the principal thereof, all interest thereon, and the fees and expenses specifically related thereto, including the Closing Fee and the Exit Fee).

 

“Term Loan B” means, collectively, the loans set forth on Schedule 1B hereto constituting, in the aggregate, $100,000,000 of the principal amount of the Existing Term Loan, which loans are amended, restated, converted and continued as the Term Loan B hereunder pursuant to Section 2.01(b).  After the Closing Date, unless the context otherwise requires, the Term Loan B shall include all PIK Interest Amounts.

 

“Term Loan B Lender” means a lender holding any portion of the Term Loan B.

 

“Term Loan B Obligations” means any Obligations with respect to the Term Loan B (including without limitation, the principal thereof (including all PIK Interest Amounts), the interest thereon, and the fees and expenses specifically related thereto).

 

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“Term Loan Lenders” means the Term Loan A Lenders and the Term Loan B Lenders.

 

“Term Loan Obligations” means the Term Loan A Obligations and the Term Loan B Obligations.

 

“Term Loan Primary Collateral” has the meaning specified in the Intercreditor Agreement.

 

“Term Loans” means the Term Loan A, the Term Loan B and any New Term Loan.

 

“Termination Event” shall mean:  (i) a Reportable Event with respect to any Pension Benefit Plan; (ii) the withdrawal of the Borrower or any member of the Controlled Group from a Pension Benefit Plan during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA; (iii) the providing of notice of intent to terminate a Pension Benefit Plan in a distress termination described in Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to terminate a Pension Benefit Plan; (v) any event or condition (a) which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Benefit Plan, or (b) that may result in termination of a Multiemployer Plan pursuant to Section 4041A of ERISA; or (vi) the partial or complete withdrawal within the meaning of Section 4203 or 4205 of ERISA, of the Borrower or any member of the Controlled Group from a Multiemployer Plan.

 

“Trade Payables” means, with respect to any Person, any accounts payable or any other indebtedness or monetary obligation to trade creditors created, assumed or Guaranteed by such Person or any of its Subsidiaries arising in the ordinary course of business in connection with the acquisition of goods or services and not past due for more than ninety (90) days.

 

“Transaction Date” means, with respect to the incurrence of any Indebtedness, the date such Indebtedness is to be incurred and, with respect to any Restricted Payment, the date such Restricted Payment is to be made.

 

“Transaction Documents” means the Loan Documents and, as of the Closing Date and thereafter, so long as Lenders (or their Affiliates or Approved Funds) having an aggregate Applicable Percentage of the outstanding principal amount of the Term Loans in excess of 50.01% continue to beneficially own, directly or indirectly, a majority of the common stock of the Borrower, the Equity Documents.

 

“Transactions” means the Loan Transactions and, as of the Closing Date and thereafter, so long as Lenders (or their Affiliates or Approved Funds) having an aggregate Applicable Percentage of the outstanding principal amount of the Term Loans in excess of 50.01% continue to beneficially own, directly or indirectly, a majority of the common stock of the Borrower, the Equity Transactions.

 

“UCC” means the Uniform Commercial Code as in effect in the State of New York; provided, that if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect

 

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in a jurisdiction other than the State of New York, “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

 

“United States” and “U.S.” mean the United States of America.

 

“Unrestricted Cash” means cash or Cash Equivalents of the Borrower or any of its Subsidiaries that would not appear as “restricted” on a consolidated balance sheet of the Borrower and its Subsidiaries.

 

“Voting Stock” means with respect to any Person, Capital Stock of any class or kind ordinarily having the power to vote for the election of directors, managers or other voting members of the governing body of such Person.

 

“Warrant Agreement” means that certain Warrant Agreement, dated as of the Closing Date, between the Borrower and American Stock Transfer & Trust Company, LLC, as warrant agent.

 

“Warrants” means the five-year warrants, issued by the Borrower to the Original Equity Holders pursuant to the Warrant Agreement, to purchase 787,855 shares of the Borrower’s common stock at an exercise price of $61.75 per share.

 

“Wholly Owned” means, with respect to any Subsidiary of any Person, the ownership of all of the outstanding Capital Stock of such Subsidiary (other than any director’s qualifying shares or Investments by foreign nationals mandated by Applicable Law) by such Person or one or more Wholly Owned Subsidiaries of such Person.

 

SECTION 1.02                                      Other Interpretive Provisions.  With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

 

(a)                                 The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Preliminary Statements, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Preliminary Statements, Exhibits and Schedules to, the Loan Document in which such references

 

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appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

(b)                                 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.”

 

(c)                                  Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

 

SECTION 1.03                                      Accounting Terms.  (a)  Generally.  All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.

 

(b)                                 Changes in GAAP.  If at any time any Accounting Change or any other change as permitted by Section 7.10 would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such Accounting Change as if such Accounting Change has not been made (subject to the approval of the Required Lenders); provided, that until so amended, all financial covenants, standards, and terms in this Agreement shall continue to be calculated or construed as if such Accounting Change had not occurred.

 

SECTION 1.04                                      Times of Day.  Unless otherwise specified, all references herein to times of day shall be references to New York City time (daylight or standard, as applicable).

 

ARTICLE II

 

THE LOANS

 

SECTION 2.01                                      The Term Loans.

 

The Loan Parties hereby acknowledge, confirm and agree that immediately prior to the Closing Date, the aggregate outstanding principal amount of the Existing Term Loans held by the Lenders, inclusive of all fees and interest capitalized in accordance with the Forbearance Agreement, is $227,900,907.99 and such amount is owing to the Lenders without any defense, right of setoff, counterclaim or otherwise, all of which are hereby expressly waived.  The Loan

 

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Parties further agree that (x) the aggregate amount of accrued and unpaid interest on such principal amount not heretofore capitalized is $4,352,274.29, (y) the aggregate amount of all other fees, expenses and other amounts not representing principal or otherwise being paid in cash on the Closing Date is $0, and (z) all such amounts are owing to the Lenders without any defense, right of setoff, counterclaim or otherwise, all of which are hereby expressly waived.

 

Subject to the terms and conditions set forth herein, the Lenders hereby agree to capitalize all such amounts set forth in clauses (x) and (y) above immediately prior to giving effect to Sections 2.01(b) and (c) below, and all such amounts shall be deemed to constitute outstanding principal under the Existing Term Loan on the Closing Date.

 

Subject to the terms and conditions set forth herein:

 

(a)                                 each Term Loan A Lender severally agrees to make its Applicable Percentage of the Term Loan A to the Borrower on the Closing Date, in an aggregate principal amount not to exceed the amount of such Lender’s Term Loan A Commitment;

 

(b)                                 each Term Loan B Lender severally agrees that on the Closing Date, an amount equal to its Applicable Percentage, as set forth in Schedule IB hereto, of $100,000,000 of the Existing Term Loan in the aggregate shall be amended, restated, converted and continued as its Applicable Percentage of the Term Loan B hereunder;

 

(c)                                  the Lenders agree that, other than the portion of the Existing Term Loan which is amended, restated, converted and continued as the Term Loan B hereunder pursuant to Section 2.01(b), the Existing Term Loan shall be cancelled and extinguished; and

 

(d)                                 the Lenders agree that all of the Prospective Defaults, as such term is defined in the Forbearance Agreement, existing immediately prior to the Closing Date under the Original Credit Agreement are hereby permanently waived effective as of the Closing Date, and the parties confirm and agree that all of the other agreements and obligations of the parties under the Forbearance Agreement are hereby terminated effective as of the Closing Date other than those agreements and obligations set forth in Sections 12, 13.04, 13.08, the first sentence of 13.09, and 13.11 thereof.

 

Any portion of the Term Loans repaid or prepaid may not be reborrowed.

 

The Borrower agrees to effect the New Equity Issuance in accordance with the Equity Documents and further agrees that, in consideration of the commitments of the Term Loan A Lenders as set forth in Section 2.01(a), 50% of the shares issued pursuant to the New Equity Issuance shall be issued to the Term Loan A Lenders (or their designees), and in consideration of the cancellation and extinguishment of that portion of the Existing Term Loan in excess of the Term Loan B as set forth in Section 2.01(c), and 50% of the shares issued pursuant to the New Equity Issuance shall be issued to all of the Lenders existing as of the Closing Date (or their designees).

 

SECTION 2.02                                      Borrowing of Loans.  (a) The Borrowing of the Term Loan A or any New Term Loan shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may be given by telephone.  Each such notice must be received by

 

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the Administrative Agent not later than 11:00 a.m. (New York City time) one (1) Business Day prior to the requested date of any Borrowing, whereupon the Administrative Agent shall give prompt notice to the Lenders of such request.  Each telephonic notice by the Borrower pursuant to this  Section must be confirmed promptly by delivery to the Administrative Agent of a written Borrowing Notice, appropriately completed and signed by a Responsible Officer of the Borrower.  Each Borrowing Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a Borrowing of the Term Loan A pursuant to Section 2.01(a) or a New Term Loan pursuant to Section 2.10, (ii) the requested date of the Borrowing (which shall be a Business Day), and (iii) the principal amount to be borrowed.

 

(b)                                 Following receipt of a Borrowing Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage of such Term Loan.  Each Lender with a Commitment in respect of such requested Term Loan shall make the amount of its Term Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 1:00 p.m. on the Business Day specified in the applicable Borrowing Notice.  Upon satisfaction of the applicable conditions set forth in Section 4.01 with respect to the Borrowing of the Term Loan A on the Closing Date or the conditions set forth in Section 2.10(f) with respect to the Borrowing of a New Term Loan, the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of Citibank, N.A. with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower.

 

SECTION 2.03                                      Prepayments.  (a)  Optional.  The Borrower, may, upon at least one (1) Business Day’s notice to the Administrative Agent stating the proposed date and aggregate principal amount of the prepayment, and if such notice is given, the Borrower shall, prepay the outstanding aggregate principal amount of the Term Loans in whole or ratably in part, together with accrued interest to the date of such prepayment on the aggregate principal amount prepaid; provided, however, that (x) no portion of the Term Loan B may be prepaid so long as any of the Term Loan A Obligations or Obligations in respect of any New Term Loan remain outstanding and (y) each partial prepayment shall be in an aggregate principal amount of $1,000,000 or an integral multiple of $500,000 in excess thereof.  Each prepayment of any of the Term Loans pursuant to this Section 2.03 shall, subject to the preceding sentence, be applied ratably to the Term Loans owed to each Term Lender in accordance with the provisions specified in Section 2.03(c).

 

(b)                                 Mandatory.  (i)  The Borrower shall, on the ninetieth (90th) day following the end of each of its fiscal years commencing with the fiscal year ending December 31, 2013, prepay an aggregate principal amount of the Term Loans in an amount equal to 50% of the amount of Excess Cash Flow for such fiscal year.

 

(ii)                                  If the Borrower or any of its Subsidiaries consummates any Asset Sale, then the Borrower (x) may retain the Net Cash Proceeds of such Asset Sale in an aggregate amount for the term of this Agreement not to exceed $10,000,000, so long as such retained Net Cash Proceeds are used for general working capital purposes, and (y) except as provided in the preceding clause (x), shall prepay, within three (3) Business

 

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Days (or deposit into the Collateral Account pending prepayment, which shall occur within five (5) Business Days) of the date of such Asset Sale, an aggregate principal amount of the Term Loans equal to 100% of all Net Cash Proceeds received therefrom on or prior to such date; provided, however, that, at the option of the Borrower, and as an alternative to the prepayment requirement set forth in this Section 2.03(b)(ii), the Borrower or such Subsidiary may use up to 50% of such Net Cash Proceeds (A) to reinvest in Replacement Assets for one of the Borrower’s or its Subsidiaries’ existing Facilities or (B) for other Capital Expenditures for one of the Borrower’s or its Subsidiaries’ existing Facilities, in each case, in accordance with Section 7.04(b)(i); provided  further, however, that to the extent that Net Cash Proceeds from all Asset Sales exceed $50,000,000 in the aggregate for the term of this Agreement (the “Sale Cap”), then the Borrower shall no longer be entitled to use Net Cash Proceeds of Asset Sales to reinvest in Replacement Assets or for Capital Expenditures and must instead apply all Net Cash Proceeds of Asset Sales exceeding the Sale Cap as a mandatory prepayment in accordance with this Section 2.03(b)(ii).  For the avoidance of doubt, to the extent any Net Cash Proceeds constitute ABL Primary Collateral, such Term Loans shall not be required to be prepaid to the extent such Net Cash Proceeds are applied to the repayment of the ABL Obligations (other than Excess ABL Obligations (as defined in the Intercreditor Agreement)) and until the ABL Obligations (other than Excess ABL Obligations) are paid in full (in accordance with Section 1.4 of the Existing ABL Credit Facility (excluding clause (f) thereof) as in effect on the date hereof, provided that nothing in this clause (ii) shall require a permanent reduction of revolving commitments under the ABL Credit Facility).

 

(iii)                               The Borrower shall, on the date of receipt of any Net Cash Proceeds by the Borrower or any of its Subsidiaries in connection with the incurrence or issuance of any Indebtedness (other than Indebtedness permitted to be incurred under Section 7.02) prepay an aggregate principal amount of the Term Loans equal to 100% of all Net Cash Proceeds received therefrom.

 

(iv)                              If the Borrower or any of its Subsidiaries receive Net Cash Proceeds from any Event of Loss, then the Borrower (x) may retain the Net Cash Proceeds of such Event of Loss in an aggregate amount for the term of this Agreement not to exceed $10,000,000, so long as such retained Net Cash Proceeds are used for general working capital purposes, and (y) except as provided in the preceding clause (x), shall prepay, within three (3) Business Days (or deposit into the Collateral Account pending prepayment, which shall occur within five (5) Business Days) of the date of receipt of such Net Cash Proceeds, an aggregate principal amount of the Term Loans equal to 100% of all Net Cash Proceeds received therefrom on or prior to such date; provided, however, that, at the option of the Borrower, and as an alternative to the prepayment requirement set forth in this Section 2.03(b)(iv), the Borrower or such Subsidiary may use up to 50% of such Net Cash Proceeds (A) to reinvest in Replacement Assets for one of the Borrower’s or its Subsidiaries’ existing Facilities or (B) for other Capital Expenditures for one of the Borrower’s or its Subsidiaries’ existing Facilities, in each case, in accordance with Section 6.17(a); provided  further, however, that to the extent that Net Cash Proceeds from all Events of Loss exceed $50,000,000 in the aggregate for the term of this Agreement (the “Loss Cap”), then the Borrower shall no

 

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longer be entitled to use Net Cash Proceeds of Asset Sales to reinvest in Replacement Assets or for Capital Expenditures and must instead apply all Net Cash Proceeds of Asset Sales exceeding the Loss Cap as a mandatory prepayment in accordance with this Section 2.03(b)(iv).

 

(c)                                  Application of Prepayments.  (i)  All voluntary prepayments pursuant to Section 2.03(a) and mandatory prepayments pursuant to Section 2.03(b) shall be applied first ratably to the outstanding principal of the Term Loan A and all New Term Loans (or as otherwise specified in clause (ii) below), second ratably to pay the Exit Fee to the Term Loan A Lenders, and third ratably to the outstanding principal of the Term Loan B (with application first to PIK Interest Amounts and second to all other principal) (or as otherwise specified in clause (ii) below), provided that prior to any application under clause “third”, the Borrower shall pay (from funds other than Net Cash Proceeds or Excess Cash Flow subject to prepayment under Section 2.03(b)) all accrued and unpaid interest on the Term Loan A and any New Term Loans and all other Term Loan A Obligations and Obligations in respect of New Term Loans.

 

(ii)                                  In the event that at any time there is more than one Maturity Date applicable to the Term Loans (pursuant to either of Section 2.10 or Section 2.11), then each group of Term Loans shall be treated as a separate “Tranche” of Term Loans and all prepayments under this Section 2.03 (other than mandatory prepayment pursuant to Section 2.03(b)(ii) and Section 2.03(b)(iv)) shall, within the order of priority specified in clause (i) above, be applied, at the Borrower’s option, either (A) ratably to each Tranche of Term Loans or (B) to the Tranche (or Tranches) with the earliest Maturity Date; provided that any mandatory prepayment pursuant to Section 2.03(b)(ii) or Section 2.03(b)(iv) shall at all times be applied, within the order of priority specified in clause (i) above, pro rata to each Tranche of Term Loans.

 

SECTION 2.04                                      Repayment of the Term Loans.  The Borrower shall repay to the Administrative Agent for the ratable account of the Lenders the aggregate outstanding principal amount of the Term Loans and all other Obligations on the Maturity Date (or, if sooner, the date on which such principal becomes due and payable pursuant to Section 8.02); provided, further that the aggregate principal amount of any Term Loans which become Extended Term Loans in accordance with Section 2.11 shall become due and payable in accordance with their applicable Extension Request.

 

SECTION 2.05                                      Interest and Fees.  (a)  (i) Term Loan A Interest.  Subject to the provisions of Section 2.05(b), the principal amount of the Term Loan A, inclusive of the Closing Fee added to the funded amount of the Term Loan A pursuant to Section 2.05(d), shall bear interest on the amount thereof from time to time outstanding at a rate per annum equal to twelve percent (12%), which interest shall be payable in cash on each Interest Payment Date.

 

(ii)                                  Term Loan B Interest.  Subject to the provisions of Section 2.05(b), the principal amount of the Term Loan B, inclusive of all PIK Interest Amounts, shall bear interest on the amount thereof from time to time outstanding at a rate per annum equal to, at the Borrower’s option, (x) fifteen percent (15%) (the “PIK Rate”), which interest shall be capitalized and paid in kind on each Interest Payment Date (the amount thereof as of each Interest Payment Date being referred to as the “PIK Interest

 

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Amount”), by adding such PIK Interest Amount to the then outstanding principal amount of Term Loan B, or (y) ten and one-half percent (10.5)% (the “Cash Rate”), which interest shall be payable in cash on each Interest Payment Date.

 

(iii)                               Payment Type Election for Term Loan B.  Until such time as the Borrower notifies the Administrative Agent in writing that it is electing the Cash Rate, the Borrower will be deemed to have elected the PIK Rate for the Term Loan B.  The Borrower shall provide written notice to the Administrative Agent at least ten (10) Business Days prior to the first Interest Payment Date as to which it desires to pay interest on the Term Loan B at the Cash Rate.  Subject to Section 2.05(b), once elected, the Cash Rate shall apply to the Term Loan B beginning on the first date of the applicable interest period during which notice of such election is delivered to the Administrative Agent and continuing for each subsequent interest period until the Borrower delivers written notice to the Administrative Agent, provided at least ten (10) Business Days prior to the next succeeding Interest Payment Date, that it desires to pay interest on the Term Loan B at the PIK Rate (and if so elected, the PIK Rate shall apply to the Term Loan B beginning on the first date of the applicable interest period during which notice of such election is delivered to the Administrative Agent).  An “interest period” means the period from and including an Interest Payment Date (or initially, from and including the Closing Date) until but not including the next Interest Payment Date (or if earlier, the Maturity Date).

 

(b)                                 Default Rate.

 

(i)                                     If any amount of principal or interest of any Term Loan (or any other Obligations) is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by Applicable Law.

 

(ii)                                  Upon the request of the Required Lenders, while any Event of Default exists, the Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by Applicable Law.

 

(iii)                               Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

 

(c)                                  Payment.  Interest on each Term Loan shall be due and payable in arrears (in cash or, in the case of the Term Loan B, in cash or in kind as elected pursuant to Section 2.05(a)(iii)) on each Interest Payment Date applicable thereto and at such other times as may be specified herein.  Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

 

(d)                                 Term Loan A Closing Fee.  On the Closing Date, each Term Loan A Lender shall have fully earned a nonrefundable fee equal to three percent (3%) of such Term

 

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Loan A Lender’s Applicable Percentage of the Term A Loan (as set forth in Schedule IA hereto), which fee shall be capitalized and paid in kind by being added to the principal amount of the Term A Loan funded by such Term Loan A Lender (the “Closing Fee”).

 

(e)                                  Term Loan A Exit Fee.  On the Closing Date, each Term Loan A Lender shall have fully earned a nonrefundable fee equal to three percent (3%) of such Term Loan A Lender’s Applicable Percentage of the Term A Loan (as set forth in Schedule IA hereto), which fee shall be shall be due and payable solely to the holder of such portion of the Term Loan A on the Exit Fee Payment Date (the “Exit Fee”).

 

SECTION 2.06                                      Computation of Interest and Fees.  All computations of interest and fees shall be made on the basis of a 360-day year and actual days elapsed.  Interest shall accrue on each Term Loan for the day on which the Term Loan is made, and shall not accrue on a Term Loan, or any portion thereof, for the day on which the Term Loan or such portion is paid, provided, that any Term Loan that is repaid on the same day on which it is made shall, subject to Section 2.08(a) bear interest for one day.  Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.  Notwithstanding anything herein to the contrary, no interest shall accrue on the Exit Fee at any time other than interest at the Default Rate if applicable in accordance with Section 2.05(b).

 

SECTION 2.07                                      Evidence of Debt.  Term Loans made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business.  The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Term Loans made by the Lenders to the Borrower and the interest and payments thereon.  Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations.  In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.  Upon the request of any Lender to the Borrower made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Term Loans to the Borrower in addition to such accounts or records.  Each Lender may attach schedules to a Note and endorse thereon the date, amount and maturity of its Term Loans and payments with respect thereto.

 

SECTION 2.08                                      Payments Generally; Administrative Agent’s Clawback.  (a)  General.  All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff.  Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein.  The Administrative Agent will promptly distribute to each Lender its Applicable Percentage in respect of the Term Loans of such payment in like funds as received by wire transfer to such Lender’s Lending Office.  All payments received by the Administrative Agent after 2:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.  If any payment to be

 

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made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.

 

(b)                                 (i)  Funding by Lenders; Presumption by Administrative Agent.  Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of the Term Loan A or any New Term Loan that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the Overnight Rate, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to the applicable Term Loan.  If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period.  If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing.  Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

 

(ii)                                  Payments by Borrower; Presumptions by Administrative Agent.  Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due.  In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the Overnight Rate.

 

A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this Section 2.08(b) shall be conclusive, absent manifest error.

 

(c)                                  Failure to Satisfy Conditions Precedent.  If any Lender makes available to the Administrative Agent funds for any Term Loan to be made by such Lender to the Borrower as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the Borrowing set forth in Article IV (or in the case of a New Term Loan, Section 2.10(f)) are not satisfied or waived in

 

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accordance with the terms hereof, the Administrative Agent shall promptly return such funds (in like funds as received from such Lender) to such Lender, without interest.

 

(d)                                 Obligations of Lenders Several.  The obligations of the Lenders hereunder to make Term Loans and to make payments pursuant to Section 10.04 are several and not joint.  The failure of any Lender to make any Term Loan or to make any payment under Section 10.04 on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Term Loan, to purchase its participation or to make its payment under Section 10.04.

 

(e)                                  Funding Source.  Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Term Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Term Loan in any particular place or manner.

 

SECTION 2.09                                      Sharing of Payments by Lenders.  If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of (a) Obligations due and payable to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations due and payable to such Lender at such time to (ii) the aggregate amount of the Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time obtained by all the Lenders at such time or (b) Obligations owing (but not due and payable) to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations owing (but not due and payable) to such Lender at such time to (ii) the aggregate amount of the Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Parties at such time) of payment on account of the Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time obtained by all of the Lenders at such time then the Lender receiving such greater proportion shall (A) notify the Administrative Agent of such fact, and (B) purchase (for cash at face value) participations in the Term Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of Obligations then due and payable to the Lenders or owing (but not due and payable) to the Lenders, as the case may be, provided, that:

 

(a)                                 if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered (including pursuant to Section 10.05), such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

 

(b)                                 the provisions of this Section shall not be construed to apply to (i) any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement, (ii) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Term Loans to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the

 

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provisions of this Section shall apply), (iii) any payments pursuant to the Fee Letters, or (iv) any payments made pursuant to Article III or Section 10.13; (iv) any payment obtained by a Lender as consideration for the assignment of any of its Term Loans to the Borrower or any of its Subsidiaries pursuant to Section 10.06(b)(vi); or (v) any payment made to or obtained by a Term Loan A Lender or New Lender that is not shared with the Term Loan B Lenders in accordance with the priorities specified herein or the terms of the Agreement Among Lenders.

 

The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under Applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

 

SECTION 2.10                                      Incremental Facilities.  (a)  Provided there exists no Default or Event of Default, and subject to the conditions set forth in clause (f) below, the Borrower may at any time or from time to time after the Closing Date, by notice to the Administrative Agent (whereupon the Administrative Agent shall promptly deliver a copy to each of the Lenders), request (i) one or more tranches of new term loans (“New Term Loans”) under one or more new term facilities (each a “New Term Loan Facility”) or (ii) one or more increases in the total amount of the Commitments (each an “Additional Term Commitment”) and any Loans advanced pursuant to such Additional Term Commitments being Term Loans for all purposes of this Agreement, up to an aggregate total amount with respect to all New Term Loans or Term Loans made as a result of any Additional Term Commitments not to exceed $20,000,000 or a lesser amount in integral multiples of $5,000,000.

 

(b)                                 (i) Each New Term Loan Facility (A) shall rank pari  passu in right of payment with the Term Loan A, shall rank senior in right of payment to the Term Loan B, and shall rank pari  passu in right of security and rights under the Subsidiary Guarantees and in and to the Collateral with the other Term Loans and (B) shall not mature prior to the latest Maturity Date applicable to the Term Loan A, shall not have an Average Life shorter than the Average Life of the Term Loan A and shall not be subject to amortization, (ii) the New Term Loans in respect to such New Term Loan Facility shall be entitled to share in all prepayments pursuant to Section 2.03 as specified in Section 2.03(c), (iii) each New Term Loan shall bear interest at a fixed rate per annum, provided that, in the event that such interest rate exceeds the interest rate relating to the Term Loan A immediately prior to the effectiveness of the applicable New Term Loan Facility, the interest rate for the Term Loan A shall be adjusted to be at least equal to the interest rate relating to such New Term Loan Facility, provided  further, that in determining the interest rate for the New Term Loan Facility solely for the purpose of this Section, (A) original issue discount (“OID”) or upfront fees (which shall be deemed to constitute like amounts of OID) payable to the New Lenders providing New Term Loan Commitments in the initial primary syndication thereof shall be included and equated to interest (with OID or upfront fees being equated to interest based on an assumed four-year life to maturity), and (B) customary arrangement, underwriting, structuring or commitment fees payable to one or more arrangers (or their affiliates) of the New Term Loan Facility shall be excluded, and provided  further, that, in the event that the New Lenders are paid or earn any fees in excess of the Closing Fee and Exit Fee payable on the Term Loan A or on better terms, an amount equal to such incremental fees

 

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shall be paid to, or such better terms shall be offered to, the Term Loan A Lenders, and (iv) all other terms of such New Term Loans, if not consistent with the terms of the Term Loans, (A) will be as agreed between the Borrower and the New Lenders providing such New Term Loans and (B) shall not be more restrictive than the terms of the existing Term Loans unless the Lenders under the Term Loans also receive the benefit of the more restrictive terms (without any consent being required); provided that the terms of the New Term Facility may include pro rata mandatory prepayment requirements for asset sales and other mandatory prepayment events so long as such mandatory prepayment events shall also apply to Term Loans.

 

(c)                                  Any Term Loans made in connection with or pursuant to any Additional Term Commitments shall have the same terms and conditions as the Term Loans applicable thereto.

 

(d)                                 Each notice from the Borrower pursuant to this Section 2.10 shall set forth (i) with respect to any Additional Term Commitments, the requested amount of such Additional Term Commitments, the proposed effective date for the making of Term Loans pursuant to such Additional Commitments (the “Additional Commitment Effective Date”) and the amount of OID or upfront fees payable in connection with such Additional Term Commitments and (ii) with respect to any New Term Loan Facility, the requested amount of New Term Loans, the proposed terms of the relevant New Term Loan Facility and the proposed effective date for the making of such New Term Loan Facility (the “New Term Loan Effective Date” and together with any Additional Commitment Effective Date, the “Increase Effective Date”).  New Term Loans or Additional Term Commitments may be made or provided by any existing Lender (it being understood that no existing Lender will have an obligation to make a portion of any New Term Loan or provide any Additional Term Commitment) or by any other bank or other financial institution (any such other bank or other financial institution being called a “New Lender”); provided any such New Lenders shall be reasonably acceptable to the Administrative Agent and the Borrower.

 

(e)                                  Commitments in respect of New Term Loans (“New Term Loan Commitments”) and Additional Term Commitments shall become Commitments under this Agreement pursuant to an amendment (an “Incremental Amendment”) to this Agreement and, as appropriate, the other Loan Documents, executed by the Borrower, each New Lender, any other Lender providing a New Term Loan or Additional Term Commitment and the Administrative Agent.  The Incremental Amendment may, without the consent of any other Lender, effect such amendments to this Agreement (including amendments to Schedule IA or IB) and the other Loan Documents as may be necessary, in the reasonable opinion of the Administrative Agent and the Borrower, to effect the provisions of this Section 2.10.  The Administrative Agent may take any and all action as may be reasonably necessary to ensure that any Term Loans made pursuant to any Additional Term Commitment, when originally made, are included in each Borrowing of outstanding Term Loans on a pro  rata basis.

 

(f)                                   Conditions to Effectiveness of Increase.  As a condition precedent to any Incremental Amendment, the Borrower shall deliver to the Administrative Agent (i) a certificate of each Loan Party dated as of the Increase Effective Date signed by a Responsible Officer of such Loan Party (A) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such increase, and (B) in the case of the Borrower, certifying that,

 

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before and after giving effect to such increase, (1) the representations and warranties contained in Article V and the other Loan Documents are true and correct in all material respects on and as of the Increase Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and (2) no Default or Event of Default exists; and (ii) executed legal opinions of counsel to the Loan Parties, addressed to the Administrative Agent and the Lenders, in form and substance reasonably satisfactory to the Administrative Agent and the Required Lenders.

 

(g)                                  Conflicting Provisions.  This Section shall supersede any conflicting provisions in Section 10.01.

 

SECTION 2.11                                      Extensions of Term Loans.  (a)  Notwithstanding anything to the contrary in this Agreement, not less than forty-five (45) days prior to the then-effective Maturity Date, the Borrower may, at its option, by means of a letter (an “Extension Request”) addressed to the Administrative Agent (who shall promptly deliver such Extension Request to each Lender), request that all the Lenders of all or a portion of Loans with a like Maturity Date and on the same terms to each such Lender extend their scheduled Maturity Dates and otherwise modify the terms of such Loans pursuant to the terms of the relevant Extension Request (including, without limitation, by increasing the interest rate or fees payable in respect of such Loans) (each, an “Extension”, and each group of Loans as so extended, as well as the original Loans (not so extended), being a “tranche”; any Extended Term Loans shall constitute a separate tranche of Loans from the tranche of Loans from which they were converted), so long as the following terms are satisfied: (i) except as to interest rates, fees, final maturity date, premium, required prepayment dates and participation in prepayments (which shall, subject to immediately succeeding clauses (ii), (iii), (iv) and (v), be determined by the Borrower and set forth in the relevant Extension Request), the Term Loans of any Term Lender (an “Extending Term Lender”) extended pursuant to any Extension (“Extended Term Loans”) shall have the same terms as the tranche of Term Loans subject to such Extension Request, (ii) the final maturity date of any Extended Term Loans shall be no earlier than the Maturity Date applicable to the Loans extended thereby (prior to giving effect to any such Extension), (iii) the Average Life of any Extended Term Loans shall be no shorter than the remaining Average Life of the Loans extended thereby, (iv) any Extended Term Loans may participate on a pro rata basis or a less than pro rata basis (but not greater than a pro rata basis) in any voluntary or mandatory repayments or prepayments hereunder, in each case as specified in the respective Extension Request, (v) the interest rate for any Extending Term Loan shall not be greater than the interest rate for the Term Loans made on the Closing Date, provided, that in determining the interest rate for the Extended Term Loans solely for the purpose of this Section, (A) OID or upfront fees (which shall be deemed to constitute like amounts of OID) payable to the Extending Term Lenders and the Lenders in the initial primary syndication thereof shall be included and equated to interest (with OID or upfront fees being equated to interest based on an assumed four-year life to maturity), and (B) customary arrangement, underwriting, structuring or commitment fees payable to one or more arrangers (or their affiliates) in connection with the Extended Term Loans and the Term Loans made on the Closing Date shall be excluded, (vi) all documentation in respect of such Extension shall be consistent with the foregoing; (vii) no more than four (4) Maturity Dates shall apply to the outstanding Loans after giving effect to any Extension proposed in such Extension Request and (viii) any applicable Minimum Extension Condition shall be satisfied unless waived by the Borrower.  Each Lender electing (in its sole discretion) to extend its scheduled Maturity 

 

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Date shall execute and deliver not later than the date set by the Borrower and the Administrative Agent in the applicable Extension Request counterparts of such Extension Request to the Administrative Agent, who shall notify the Borrower, in writing, of the Lenders’ decisions as soon as possible thereafter, whereupon such Lender’s scheduled Maturity Date shall be extended, effective only as of the date that is such Lender’s then-current scheduled Maturity Date, for the period as agreed in the Extension Request.  Any Lender that declines or fails to respond to an Extension Request shall be deemed to have not extended its scheduled Maturity Date

 

(b)                                 With respect to all Extensions consummated by the Borrower pursuant to this Section 2.11, no Extension Request is required to be in any minimum amount or any minimum increment; provided, that the Borrower may at its election specify as a condition (a “Minimum Extension Condition”) to consummating any such Extension that a minimum amount (to be determined and specified in the relevant Extension Request in the Borrower’s sole discretion and may be waived by the Borrower) of Term Loans of any or all applicable tranches be tendered.  The Administrative Agent and the Lenders hereby consent to the Extensions and the other transactions contemplated by this Section 2.11 (including, for the avoidance of doubt, payment of any interest, fees or premium in respect of any Extended Term Loans on such terms as may be set forth in the relevant Extension Request) and hereby waive the requirements of any provision of this Agreement or any other Loan Document that may otherwise prohibit any such Extension or any other transaction contemplated by this Section 2.11.

 

(c)                                  The Lenders hereby irrevocably authorize the Administrative Agent and Collateral Agent to enter into amendments to this Agreement and the other Loan Documents with the Borrower as may be necessary in order to establish new tranches or sub-tranches in respect of Term Loans so extended and such technical amendments as may be necessary or appropriate in the reasonable opinion of the Administrative Agent and the Borrower in connection with the establishment of such new tranches or sub-tranches, in each case on terms consistent with this Section 2.11.  All such amendments entered into with the Borrower by the Administrative Agent or the Collateral Agent hereunder shall be binding and conclusive on the Lenders.

 

SECTION 2.12                                      Defaulting Lenders.  (a)  Adjustments.  Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by Applicable Law:

 

(i)                                     Waivers and Amendments.  That Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in Section 10.01.

 

(ii)                                  Reallocation of Payments.  Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of that Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise, and including any amounts made available to the Administrative Agent by that Defaulting Lender pursuant to Section 10.08), shall be applied at such time or times as may be determined by the Administrative Agent as follows:  first, to the payment of any amounts owing by that Defaulting Lender to the Administrative Agent hereunder; second, 

 

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as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Term Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; third, if so determined by the Administrative Agent and the Borrower, to be held in a non-interest bearing deposit account and released in order to satisfy obligations of that Defaulting Lender to fund Term Loans under this Agreement; fourth, to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; fifth, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; and sixth, to that Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided, that, if (A) such payment is a payment of the principal amount of any Term Loans in respect of which that Defaulting Lender has not fully funded its appropriate share and (B) such Term Loans were made at a time when the conditions set forth in Section 4.01 were satisfied or waived, such payment shall be applied solely to pay the Term Loans of all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Term Loans owed to that Defaulting Lender.  Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.12(a)(ii) shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents hereto.

 

(b)                                 No Commitment of any Lender shall be increased or otherwise affected, and, except as otherwise expressly provided in this Section 2.12, performance by the Borrower of its obligations hereunder shall not be excused or otherwise modified as a result of the operation of this Section 2.12.  The rights and remedies against a Defaulting Lender under this Section 2.12 are in addition to any other rights and remedies which the Borrower, the Administrative Agent, or any Lender may have against such Defaulting Lender.

 

(c)                                  Defaulting Lender Cure.  If the Borrower and the Administrative Agent agree in writing in their sole discretion that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase that portion of outstanding Term Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Term Loans to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages, whereupon that Lender will cease to be a Defaulting Lender; provided, that, no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.  The Borrower shall pay to any applicable Lender any costs of the type referred to in Section 3.05 in connection with the foregoing.

 

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ARTICLE III

 

TAXES, YIELD PROTECTION AND ILLEGALITY

 

SECTION 3.01                                      Taxes.  (a)  Payments Free of Taxes.  Any and all payments by or on account of any Obligation of any Loan Party under any Loan Documents shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes, provided, that if the an applicable withholding agent shall be required by Applicable Law to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable by the applicable Loan Party shall be increased as necessary so that after making all required deductions have been made including deductions applicable to additional sums payable under this Section 3.01(a) (after payment of all Indemnified Taxes and Other Taxes) the Administrative Agent or any Lender, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) the applicable withholding agent shall make such deductions and (iii) the applicable withholding agent shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with Applicable Law.

 

(b)                                 Payment of Other Taxes by the Borrower.  Without limiting the provisions of Section 3.01(a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with Applicable Law.

 

(c)                                  Indemnification by the Borrower.  The Borrower shall indemnify the Administrative Agent and each Lender, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including the full amount of taxes of any kind imposed or asserted by any jurisdiction on or attributable to amounts payable under this Section) paid by the Administrative Agent or each Lender or any of their respective Affiliates, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority, except to the extent any such liability (including additions to tax, penalties, interest and expense) arises from the gross negligence or willful misconduct of the Administrative Agent or such Lender or its Affiliate.  A certificate as to the amount of such payment or liability delivered to a Loan Party by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

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

 

(e)                                  Status of Lenders.  Each Lender that is a “United States Person” as defined in section 7701(a)(30) of the Code that may be treated as an exempt recipient (as defined in section 6049(b)(4) of the Code and the treasury regulations thereunder) shall deliver to the Borrower and Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement and, in the case where a U.S. Lender changes its applicable Lending Office by designating a new Lending Office, the date upon which such Lender 

 

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designates the new Lending Office, two duly completed and executed copies of Internal Revenue Service Form W-9 or successor form, certifying that such Lender is on the date of delivery thereof entitled to an exemption from U.S. backup withholding tax.

 

Any Foreign Lender shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement and, in the case where a Foreign Lender changes its applicable Lending Office by designating a new Lending Office, the date upon which such Foreign Lender designates the new Lending Office (but only so long thereafter as such Foreign Lender remains lawfully able to do so), two copies of whichever of the following is applicable or any subsequent version thereof or successor thereto:

 

(i)                                     duly completed and executed copies of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party,

 

(ii)                                  duly completed and executed copies of Internal Revenue Service Form W-8ECI relating to all payments to be received by such Foreign Lender hereunder or under any other Loan Document, or

 

(iii)                               in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 871(h) or section 881(c) of the Code, (A) a certificate to the effect that such Foreign Lender is not (1) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of the Code, or (3) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (B) duly completed and executed copies of Internal Revenue Service Form W-8BEN.

 

In addition to documents delivered pursuant to one of clauses (i) through (iii) above, if a payment made to a Foreign Lender under this Agreement would be subject to U.S. withholding tax imposed by section 1471 through 1474 of the Code and any regulations thereunder or official governmental interpretations thereof (“FATCA”), such Foreign Lender shall deliver to the Borrower and the Administrative Agent such other documentation as reasonably required to permit the Borrower or the Administrative Agent to comply with applicable FATCA reporting requirements (the “FATCA Documentation”).

 

In the event that, pursuant to Section 10.06(d), a Participant is claiming the benefits of this Section 3.01, such Participant shall provide the forms required above to the Lender from which the related participation was purchased, and if such Lender is a Foreign Lender, such Lender shall, promptly upon receipt thereof (but in no event later than the next scheduled payment under this Agreement) forward such documentation to the Borrower and the Administrative Agent, together with such additional forms as are required by law.  If, at the effective date of the Assignment and Assumption pursuant to which a Lender becomes a party to this Agreement, such Lender assignor was entitled to payments under subsection (a) of this Section 3.01 in respect of United States withholding tax with respect to interest paid at such date, then, to such extent, the term Indemnified Taxes shall include (in addition to withholding taxes that may be imposed in the future or other amounts otherwise includable in Indemnified Taxes) 

 

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United States withholding tax, if any, applicable with respect to such Lender assignee on such date.

 

Without limiting the obligations of the Lenders set forth above regarding delivery of certain forms and documents to establish each Lender’s status for U.S. withholding tax purposes, each Lender agrees promptly to deliver to the Administrative Agent or the Borrower, as the Administrative Agent or the Borrower shall reasonably request in writing, on or prior to the Closing Date, and in a timely fashion thereafter (including upon any change in circumstances that makes any information required to be on such form previously delivered by such Lender incorrect), such other documents and forms as would reduce or avoid any Indemnified Taxes in respect of all payments to be made to such Lender outside of the United States by the Borrower pursuant to this Agreement or otherwise to establish such Lender’s status for withholding tax purposes in such other jurisdiction; provided, that if any form or document referred to in this subsection (e) requires the disclosure of information, other than information necessary to compute the tax payable and information required by the Internal Revenue Service Form W 8BEN or W-8ECI (or successor form), that the applicable Lender reasonably considers to be confidential, such Lender shall give notice thereof to the Borrower and the Administrative Agent and shall not be obligated to include in such form or document such confidential information.  Each Lender shall promptly notify the Administrative Agent of any change in circumstances which would modify or render invalid any such claimed exemption or reduction.  Notwithstanding any other provision of this Section 3.01(e), a Lender shall not be required to deliver any form, document or other information pursuant to this Section 3.01(e) that such Lender is not lawfully able to deliver.

 

For any period with respect to which a Lender has failed to provide the Borrower and the Administrative Agent with the appropriate form, certificate or other document described in this subsection (e) (unless the Lender is no longer lawfully able to provide such form, certificate or other document due to a change in law, or in the interpretation or application thereof, occurring after the date on which a form, certificate or other document originally was required to be provided or if such form, certificate or other document otherwise is not required under this subsection (e)), such Lender shall not be entitled to the additional sums or indemnification under subsection (a) or (c) of this Section 3.01 with respect to Indemnified Taxes imposed by the United States by reason of such failure; provided, however, that should a Lender become subject to Indemnified Taxes because of its failure to deliver a form, certificate or other document required hereunder, the Borrower shall take steps as such Lender shall reasonably request to assist such Lender to recover such Indemnified Taxes.  If, on the date that a Foreign Lender is required to deliver the FATCA Documentation, such Foreign Lender was not in compliance with the applicable FATCA reporting requirements (unless such Foreign Lender is no longer lawfully able to be so compliant due to a change in law, or in the interpretation or application thereof, occurring after the date on which such FATCA Documentation originally was required to be provided), then such Foreign Lender shall not be entitled to the additional sums or indemnification under subsection (a) or (c) of this Section 3.01 with respect to FATCA Taxes imposed by reason of such failure.

 

(f)                                   Treatment of Certain Refunds.  If the Administrative Agent or any Lender determines, in its sole discretion, that it has received a refund with respect to Indemnified Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the 

 

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Borrower has paid additional sums pursuant to subsection (a) of this Section 3.01, it shall promptly pay such refund (but only to the extent of indemnity payments made or additional sums paid by the Borrower with respect to the Indemnified Taxes or Other Taxes giving rise to such refund) to the Borrower, net of all out-of-pocket expenses of such Administrative Agent or the Lender incurred in obtaining such refund (including any net increase in Taxes imposed with respect to such refund) and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, however, that the Borrower agrees to promptly return such amount (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the applicable Administrative Agent or Lender, as the case may be, if it receives notice from the applicable Administrative Agent or Lender that such Administrative Agent or the Lender is required to repay such refund to such Governmental Authority.  This subsection shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.

 

SECTION 3.02                                      [Intentionally omitted].

 

SECTION 3.03                                      [Intentionally omitted].

 

SECTION 3.04                                      Increased Costs.  (a)  Increased Costs Generally.  If any Change in Law shall:

 

(i)                                     impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender; or

 

(ii)                                  impose on any Lender any other condition, cost or expense affecting this Agreement;

 

and the result of any of the foregoing shall be to reduce the amount of any sum received or receivable by such Lender (whether of principal, interest or any other amount) then, upon written request of such Lender, the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

 

(b)                                 Capital Requirements.  If any Lender determines that any Change in Law affecting such Lender or any Lending Office of such Lender or such Lender’s holding company, if any, regarding capital requirements has the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Term Loans made by, such Lender, to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time, after submission to the Borrower (with a copy to the Administrative Agent) of a written request therefor, the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

 

(c)                                  Certificates for Reimbursement.  A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case 

 

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may be, as specified in subsection (a) or (b) of this Section, describing the basis therefore and showing the calculation thereof in reasonable detail, and delivered to the Borrower shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate within thirty (30) days after receipt thereof.

 

(d)                                 Delay in Requests.  Failure or delay on the part of any Lender to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lender’s right to demand such compensation, provided, that the Borrower shall not be required to compensate a Lender pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than ninety (90) days prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 90-day period referred to above shall be extended to include the period of retroactive effect thereof).

 

SECTION 3.05                                      [Intentionally omitted].

 

SECTION 3.06                                      Mitigation Obligations; Replacement of Lenders.  (a)  Designation of a Different Lending Office.  If any Lender requests compensation under Section 3.04, or the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, then such Lender shall use reasonable efforts (consistent with its internal policies and requirements of the Applicable Law) to designate a different Lending Office for funding or booking its Term Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the reasonable judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

 

(b)                                 Replacement of Lenders.  If any Lender requests compensation under Section 3.04, if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any Lender is at such time a Defaulting Lender, then the Borrower may replace such Lender in accordance with Section 10.13.

 

SECTION 3.07                                      Survival.  All of the Borrower’s obligations under this Article III shall survive termination of the Aggregate Commitments and repayment of all other Obligations hereunder.

 

ARTICLE IV

 

CONDITIONS PRECEDENT TO BORROWING

 

SECTION 4.01                                      Conditions of Borrowing.  The effectiveness of this Agreement, the obligations of the Term Loan A Lenders to provide the Term Loan A 

 

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Commitments, and the other agreements of the Lenders under Section 2.01 are subject to satisfaction of the following conditions precedent:

 

(a)                                 The Administrative Agent’s receipt of the following, each of which shall be originals or telecopies (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance reasonably satisfactory to the Administrative Agent:

 

(i)                                     executed counterparts of this Agreement;

 

(ii)                                  Notes executed by the Borrower in favor of each Lender requesting Notes;

 

(iii)                               certified copies of (A) the resolutions of the Board of Directors or equivalent governing body of each Loan Party approving the Transactions and the Transaction Documents to which it is or is to be a party and (B) all documents evidencing other necessary corporate action and governmental and other third party approvals and consents, if any, with respect to the Transactions and each Transaction Document to which it is a party;

 

(iv)                              a copy of the certificate of the Secretary of State of the jurisdiction of incorporation or formation, as the case may be, of each Loan Party, dated reasonably near the Closing Date, certifying (A) as to a true and correct copy of the charter, article of formation, or such other constitutive document on file in such Secretary’s office and (B) that (1) such amendments are the only amendments to such Loan Party’s constitutive documents on file in such Secretary’s office, (2) such Loan Party has paid all franchise taxes to the date of such certificate and (3) such Loan Party is duly incorporated or formed and in good standing or presently subsisting under the laws of the State of the jurisdiction of incorporation or formation;

 

(v)                                 a certificate of each Loan Party signed on behalf of such Loan Party by a Responsible Officer, dated the Closing Date (the statements made in which certificate shall be true on and as of the Closing Date), certifying as to (A) the absence of any amendments to the charter or applicable constitutive documents of such Loan Party since the date of the Secretary of State’s certificate referred to in Section 4.01(a)(iv), (B) a true and correct copy of the bylaws, limited liability company agreement, or partnership agreement of such Loan Party as in effect on the date on which the resolutions referred to in Section 4.01(a)(iii) were adopted and on the Closing Date and (C) the due incorporation or formation and good standing or valid existence of such Loan Party as a corporation, limited liability company or partnership organized or formed under the laws of the jurisdiction of its incorporation or formation and the absence of any proceeding for the dissolution or liquidation of such Loan Party;

 

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(vi)                              a certificate of the Secretary or an Assistant Secretary of each Loan Party certifying the names and true signatures of the officers of such Loan Party authorized to sign each Loan Document to which it is or is to be a party and the other documents to be delivered hereunder and thereunder;

 

(vii)                           a certificate of a duly authorized officer of each Loan Party stating that all consents, licenses and approvals required in connection with the consummation of such Loan Party of the Transactions have been received and are in full force and effect;

 

(viii)                        a certificate signed by a Responsible Officer of the Borrower certifying (A) that the representations and warranties of the Borrower and the other Loan Parties contained in Article V are true and correct in all material respects immediately prior to, and shall be true and correct in all material respects after giving effect to, the Borrowing, (B) that the representations and warranties contained in the other Loan Documents are true and correct in all material respects as though made on and as of the Closing Date (except for representations and warranties made as of a specific date, which shall be true and correct as of such specific date), (C) the absence of any event occurring and continuing, or resulting from the Borrowing, that constitutes a Default or Event of Default, (D) absence of any litigation (other than Disclosed Litigation) that could reasonably likely be expected to result in a Material Adverse Effect, (E) compliance with all Applicable Laws and regulations (including ERISA and Environmental Laws), and (F) the absence of any Material Adverse Effect since August 17, 2012;

 

(ix)                              a certificate attesting to the Solvency of the Borrower and its Subsidiaries on a consolidated basis before and after giving effect to the Transactions, from the Borrower’s chief financial officer;

 

(x)                                 the executed opinion of (A) Akin Gump Strauss Hauer & Feld LLP, special New York counsel to the Loan Parties, addressed to the Administrative Agent and each Lender and (B) local Kansas counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, in each case, in form and substance reasonably satisfactory to the Administrative Agent;

 

(xi)                              a certificate as to the identity, location and other characteristics of the Collateral in form and substance reasonably satisfactory to the Administrative Agent, duly executed by each Loan Party (the “Perfection Certificate”);

 

(xii)                           evidence that all insurance required to be maintained pursuant to Section 6.08 has been obtained and is in effect, together with the certificates of insurance, naming the Collateral Agent, on behalf of the Lenders, as an additional insured or loss payee, as the case may be, under all insurance policies maintained with respect to the assets and properties of the Loan Parties that constitutes Collateral;

 

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(xiii)                        each of the Equity Documents (excluding the Warrants) and copies of the Warrant certificates attached to the Warrant Agreement, certified as true and correct copies thereof by a Responsible Officer of the Borrower;

 

(xiv)                       the Intercreditor Agreement, in form and substance reasonably satisfactory to the Administrative Agent, duly executed by each party thereto;

 

(xv)                          [Intentionally omitted];

 

(xvi)                       the Omnibus Amendment with respect to the Security Agreement and the Subsidiary Guarantee, duly executed by each Loan Party, together with:

 

(A)                               confirmation from the Collateral Agent that all certificates representing the Initial Pledged Equity referred to therein (to the extent not constituting ABL Primary Collateral) accompanied by undated stock powers executed in blank and instruments evidencing the Initial Pledged Debt referred to therein, accompanied by note transfer powers indorsed in blank, are in the possession of the Collateral Agent;

 

(B)                               copies of all UCC financing statements filed pursuant to the Original Credit Agreement, each of which shall remain on file and of record in the appropriate jurisdictions, and any additional UCC financing statements or UCC financing statement amendments reasonably requested by the Collateral Agent in suitable form for filing;

 

(C)                               completed requests for information and lien search results, dated on or before the Closing Date, showing the UCC financing statements filed pursuant to the Original Credit Agreement and all other effective financing statements filed in the jurisdictions referred to in clause (B) above that name any Loan Party as debtor, together with copies of such other financing statements;

 

(D)                               evidence of the completion of all other recordings and filings of or with respect to the Security Agreement that the Collateral Agent may reasonably deem necessary or desirable in order to perfect and protect the security interest created thereunder; and

 

(E)                                evidence that all other action that the Administrative Agent may reasonably deem necessary or desirable in order to perfect and protect the first priority liens and security interests created under the Security Agreement has been taken.

 

(b)                                 The representations and warranties of (i) the Borrower contained in Article V and (ii) each Loan Party contained in each other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct in all material respects on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an 

 

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earlier date, in which case they shall be true and correct in all material respects as of such earlier date.

 

(c)                                  No Default or Event of Default shall have occurred and be continuing, or would result from the execution of this Agreement or the proposed Borrowing or from the application of the proceeds thereof.

 

(d)                                 There shall not have occurred, since August 17, 2012, a Material Adverse Effect.

 

(e)                                  There shall exist no action, suit, investigation, litigation or proceeding affecting the Borrower or any of its Subsidiaries pending or threatened before any court, governmental agency or arbitrator that (i) could be reasonably likely to have a Material Adverse Effect other than the matters described on Schedule 4.01(e) hereto (the “Disclosed Litigation”) or (ii) purports to affect the legality, validity or enforceability of this Agreement or any other Loan Document or the consummation of the transactions contemplated hereby.

 

(f)                                   Any fees, costs and expenses required to be paid on or before the Closing Date to any Agent or the Lenders pursuant to the Fee Letter, the Forbearance Agreement, the Restructuring Agreement or any of the Loan Documents for which invoices have been received at least one Business Day prior to the Closing Date shall have been paid.

 

(g)                                  Unless waived by the Administrative Agent, the Borrower shall have paid all reasonable fees, charges and disbursements of counsel to the Agents (directly to such counsel if requested by the Agents) and Schulte Roth & Zabel LLP as counsel to the Lenders, to the extent invoiced at least one Business Day prior to the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing and customary post-closing proceedings included in such invoices (provided, that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Agents).

 

(h)                                 The Existing ABL Facility shall have been amended as of the Closing Date consistent with the Restructuring Agreement and otherwise in a manner reasonably satisfactory to the Required Lenders.

 

(i)                                     All of the Lenders shall have entered into the Agreement Among Lenders.

 

(j)                                    All of the Equity Transactions contemplated to occur on or prior to the Closing Date pursuant to the Equity Documents shall have occurred in a manner consistent with the Restructuring Agreement and otherwise in a manner reasonably satisfactory to the Required Lenders.

 

Without limiting the generality of the provisions of the last paragraph of Section 9.03, for purposes of determining compliance with the conditions specified in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder 

 

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to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Administrative Agent and the Lenders that:

 

SECTION 5.01                                      Formation and Qualification.  (a)  The Borrower and each of its Subsidiaries are duly incorporated or formed, as applicable, and in good standing under the laws of the state listed on Schedule 5.01(a) and are qualified to do business and are in good standing in the states listed on Schedule 5.01(a) which constitute all states in which qualification and good standing are necessary for the Borrower or such Subsidiary to conduct its business and own its property and where the failure to so qualify could reasonably be expected to have a Material Adverse Effect.  Each of the Borrower and its Subsidiaries has delivered to the Administrative Agent true and complete copies of its certificate of incorporation and by-laws or certificate of formation and operating agreement, as applicable, and will promptly notify the Administrative Agent of any amendment or changes thereto.

 

(b)                                 The only Subsidiaries of the Borrower are listed on Schedule 5.01(b).

 

SECTION 5.02                                      Authority.  The Borrower and each of its Subsidiaries has full power, authority and legal right to enter into this Agreement and the other Transaction Documents and to perform all its respective Obligations hereunder and thereunder.  This Agreement and the other Transaction Documents have been duly executed and delivered by the Borrower and each of its Subsidiaries, and this Agreement and the other Transaction Documents constitute the legal, valid and binding obligation of the Borrower and such Subsidiaries, enforceable in accordance with their terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered at a proceeding in equity or at law.  The execution, delivery and performance of this Agreement and of the other Transaction Documents (a) are within the Borrower’s and such Subsidiary’s corporate or limited liability company powers, as applicable, have been duly authorized by all necessary corporate or company action, as applicable, are not in contravention of law or the terms of the Borrower’s or such Subsidiary’s by-laws, certificate of incorporation, operating agreement or certificate of formation, as applicable, or other applicable documents relating to the Borrower’s or such Subsidiary’s formation or to the conduct of the Borrower’s or such Subsidiary’s business or of any material agreement or undertaking to which the Borrower or such Subsidiary is a party or by which the Borrower or such Subsidiary is bound, including the Existing ABL Facility, (b) will not conflict with or violate any law or regulation, or any judgment, order or decree of any Governmental Authority, (c) will not require the consent of any Governmental Authority or any other Person, except those consents set forth on Schedule 5.02 hereto, all of which will have been duly obtained, made or compiled prior to the Closing Date and which are in full force and effect and (d) will not conflict with, nor result in any breach in 

 

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any of the provisions of or constitute a default under or result in the creation of any Lien except Permitted Liens upon any asset of the Borrower or such Subsidiary under the provisions of any Contractual Obligation to which the Borrower or such Subsidiary is a party or by which it or its property is a party or by which it may be bound.

 

SECTION 5.03                                      Entity Names.  Except as set forth on Schedule 5.03, the Borrower and each of its Subsidiary have not been known by any other corporate name in the past five (5) years and do not do business under any other name, nor has the Borrower or any of its Subsidiaries been the surviving corporation or company of a merger or consolidation or acquired all or substantially all of the assets of any Person during the preceding five (5) years.

 

SECTION 5.04                                      Financial Statements.  (a)  The financial statements furnished to the Lenders prior to the Closing Date are accurate, complete and correct and fairly reflect the financial condition of the Borrower and its Subsidiaries on a consolidated basis as of the Closing Date, and have been prepared in accordance with GAAP, consistently applied.  All financial statements referred to in this Section 5.04, including the related schedules and notes thereto, have been prepared, in accordance with GAAP, except as may be disclosed in such financial statements.

 

(b)                                 Any financial projections of the Borrower and its Subsidiaries furnished to the Lenders are based on underlying assumptions which provide a reasonable basis for the projections contained therein and reflect the Borrower’s judgment based on present circumstances of the most likely set of conditions and course of action for the projected period.

 

(c)                                  The consolidated and consolidating balance sheets of the Borrower and its Subsidiaries and such other Persons described therein (including the accounts of all Subsidiaries for the respective periods during which a subsidiary relationship existed) as of December 31, 2011, and the related statements of income, changes in stockholder’s equity, and changes in cash flow for the period ended on such date, all accompanied by reports thereon containing opinions without qualification by independent certified public accountants, copies of which have been delivered to Administrative Agent, have been prepared in accordance with GAAP, consistently applied (except for changes in application in which such accountants concur) and present fairly the financial position of the Borrower and its Subsidiaries at such date and the results of their operations for such period.  Since August 17, 2012, there has been no change in the condition, financial or otherwise, of the Borrower or its Subsidiaries as shown on the consolidated balance sheet as of such date and no change in the aggregate value of machinery, equipment and real property owned by the Borrower and its Subsidiaries, except changes in the ordinary course of business, none of which individually or in the aggregate has had a Material Adverse Effect.

 

SECTION 5.05                                      Solvency; No Litigation, Violation, Indebtedness or Default; ERISA Compliance.  (a)  The Borrower and its Subsidiaries on a consolidated basis are, and after giving effect to the Transactions, will be Solvent.

 

(b)                                 Other than those listed on Schedule 4.01(e), there are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Borrower, threatened, at law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or any of its Subsidiaries or against any of their properties or revenues that (i) purport to affect or 

 

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pertain to this Agreement, any other Transaction Document or the consummation of the Transactions, or (ii) as to which there is a reasonable possibility of an adverse determination and that could reasonably be expected to result in a Material Adverse Effect.

 

(c)                                  Neither the Borrower nor any of its Subsidiaries is in violation of any applicable statute, law, rule, regulation, ordinance or Contractual Obligation in any respect which could reasonably be expected to have a Material Adverse Effect, nor is the Borrower or any of its Subsidiaries in violation of any order of any court, Governmental Authority or arbitration board or tribunal in any respect which could reasonably be expected to have a Material Adverse Effect.

 

(d)                                 None of the Borrower, its Subsidiaries or any member of the Controlled Group maintains or is required to contribute to any Pension Benefit Plan or Multiemployer Plan other than those listed on Schedule 5.05(d) hereto.  (i) The Borrower, its Subsidiaries and each member of the Controlled Group have met all applicable minimum funding requirements under Section 302 of ERISA and Section 412 of the Code in respect of each Plan, and each Plan is in compliance with Sections 412, 430 and 436 of the Code and Sections 206(g), 302 and 303 of ERISA, taking into account waivers, variances and extensions of amortization periods; (ii) each Plan which is intended to be a qualified plan under Section 401(a) of the Code as currently in effect has been determined by the IRS to be qualified under Section 401(a) of the Code and the trust related thereto has been determined to be exempt from federal income tax under Section 501(a) of the Code; (iii) none of the Borrower, its Subsidiaries or any member of the Controlled Group have incurred any liability to the PBGC which remains outstanding other than for the payment of premiums, and there are no premium payments which have become due which are unpaid; (iv) no Plan subject to Title IV of ERISA has been terminated by the plan administrator thereof nor by the PBGC, and there is no occurrence which would cause the PBGC to institute proceedings under Title IV of ERISA to terminate any such Plan; (v) none of the Borrower, its Subsidiaries or any member of the Controlled Group has breached any of the material responsibilities, obligations or duties imposed on it by ERISA with respect to any Plan; (vi) none of the Borrower, its Subsidiaries or any member of the Controlled Group nor any fiduciary of any Plan, has engaged in a “prohibited transaction” described in Section 406 of ERISA or Section 4975 of the Code nor taken any action which would constitute or result in a Termination Event with respect to any such Plan which is subject to ERISA; (vii) the Borrower, its Subsidiaries and each member of the Controlled Group has made all contributions required to be made with respect to each Pension Benefit Plan and Multiemployer Plan; (viii) there exists no event described in Section 4043(b) of ERISA, for which the thirty (30) day notice period has not been waived or which could reasonably be expected to result in material liability to the Borrower, its Subsidiaries or any member of the Controlled Group; (ix) except as set forth on Schedule 5.05(d)(ix), none of the Borrower, its Subsidiaries or any member of the Controlled Group maintains or is required to contribute to any Plan which provides health, accident or life insurance benefits to former employees, their spouses or dependents, other than in accordance with Section 4980B of the Code; (x) none of the Borrower, its Subsidiaries or any member of the Controlled Group has an outstanding liability in respect of a complete or partial withdrawal, within the meaning of Section 4203 or 4205 of ERISA, from any Multiemployer Plan and there exists no fact which would reasonably be expected to result in any such liability; and (xi) to the knowledge of the Borrower, no Plan fiduciary (as defined in Section 3(21) of ERISA) has any liability for breach of fiduciary duty or for any failure in connection with the administration or investment of the assets of a Plan.

 

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SECTION 5.06                                      Licenses and Permits.  Except as set forth in Schedule 5.06, or Schedule 5.16 with respect to Environmental Permits, each of the Borrower and its Subsidiaries (a) is in compliance with and (b) has procured and is now in possession of, all licenses or permits required by any applicable federal, state, provincial or local law, rule or regulation for the operation of its business in each jurisdiction wherein it is now conducting or proposes to conduct business and where the failure to procure such licenses or permits could reasonably be expected to have a Material Adverse Effect.

 

SECTION 5.07                                      Default of Indebtedness.  Neither the Borrower nor any of its Subsidiaries is in default in the payment of the principal of or interest on any material Indebtedness for borrowed money or under any instrument or agreement under or subject to which any such Indebtedness has been issued and no event has occurred under the provisions of any such instrument or agreement which with or without the lapse of time or the giving of notice, or both, constitutes or would constitute an event of default thereunder.

 

SECTION 5.08                                      No Default.  Neither the Borrower nor any of its Subsidiaries is in default in the payment or performance of any of its material Contractual Obligations.  No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.

 

SECTION 5.09                                      Tax Returns.  The Borrower and each of its Subsidiaries’ federal tax identification number is set forth on Schedule 5.09.  The Borrower and each of its Subsidiaries have timely filed all federal, state and local tax returns and all other tax returns required to be filed and have paid or provided for the payment of all federal, state and local income and franchises Taxes, and other material Taxes due on such returns or pursuant to any assessment received by them, except for Taxes contested in good faith as to which adequate provisions have been made in accordance with GAAP.  Federal income tax returns of the Borrower and each of its Subsidiaries have been examined and reported upon by the appropriate taxing authority or closed by applicable statute and satisfied for all fiscal years prior to and including the fiscal year ending December 31, 2010 and state and local income tax returns of each Borrower and each of its Subsidiaries have been examined and reported upon by the appropriate taxing authority or closed by applicable statute and satisfied for all fiscal years prior to and including the fiscal year ending December 31, 2010.  The provision for Taxes on the books of the Borrower and each of its Subsidiaries is adequate for all years not closed by applicable statutes, and for its current fiscal year, and the Borrower has no knowledge of any deficiency or additional assessment in connection therewith not provided for on its books.

 

SECTION 5.10                                      Disclosure.  None of the written information furnished by or on behalf of the Borrower or any of its Subsidiaries to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement, the Forbearance Agreement or the Restructuring Agreement or delivered hereunder or under any other Transaction Document (as modified or supplemented by other information so furnished), taken as a whole with any other information furnished or publicly available (including all of the foregoing as updated, restated or otherwise modified in writing prior to the Closing Date), contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading as of the date when made or delivered; provided, that with respect to any 

 

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forecast, projection or other statement regarding future performance, future financial results or other future developments, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time such information was prepared (it being understood that any such information is subject to significant uncertainties and contingencies, many of which are beyond the Borrower’s control, and that no assurance can be given that the future developments addressed in such information can be realized); provided, no representation or warranty is made with respect to information for which the source is separately identified as a third party source or other person or entity not affiliated with or acting as agent or representative of the Borrower or any of its Subsidiaries.

 

SECTION 5.11                                      Margin Regulations.  None of the Borrower or its Subsidiaries are engaged, nor will any of them engage, principally or as one of its important activities, in the business of extending credit for the purpose of “purchasing” or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect.  No part of the proceeds of the Borrowing will be used for “purchasing” or “carrying” “margin stock” as defined in Regulation U of such Board of Governors.

 

SECTION 5.12                                      No Burdensome Restrictions.  None of the Borrower or its Subsidiaries are party to any material Contractual Obligation the performance of which could reasonably be expected to have a Material Adverse Effect.  None of the Borrower or its Subsidiaries has agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien which is not a Permitted Lien.

 

SECTION 5.13                                      Investment Company Act.  None of the Borrower or its Subsidiaries is an “investment company” registered or required to be registered under the Investment Company Act of 1940, as amended, nor is it controlled by such a company.

 

SECTION 5.14                                      Insurance.  The properties of the Borrower and its Subsidiaries are insured with responsible carriers against such risks and in such amounts, and with such deductibles, retentions, self-insured amounts and co-insurance provisions, as are, in the reasonable judgment, customarily carried by similar businesses of similar size, including property and casualty loss, workers’ compensation and interruption of business insurance.

 

SECTION 5.15                                      No Labor Disputes.  None of the Borrower or its Subsidiaries is involved in any labor dispute; there are no strikes or walkouts or union organization of any of the Borrower’s or its Subsidiaries’ employees in existence, or, to the knowledge of the Borrower, threatened, and no collective bargaining agreement is scheduled to expire prior to the Maturity Date other than as set forth on Schedule 5.15 hereto.

 

SECTION 5.16                                      O.S.H.A. and Environmental Compliance.  Except as could not reasonably be expected to have a Material Adverse Effect and except as set forth in Schedule 5.16,

 

(a)                                 each of the Borrower and its Subsidiaries have duly complied, and their facilities, business, assets, property, leaseholds, real property and equipment are in compliance 

 

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with, the provisions of the Federal Occupational Safety and Health Act and applicable Environmental Laws; and there have been no outstanding citations, notices or orders of non-compliance issued to the Borrower or any of its Subsidiaries or relating to any of their business, assets, property, leaseholds or equipment under any such laws, rules or regulations.

 

(b)                                 each of the Borrower and its Subsidiaries have been issued all Environmental Permits necessary to operate the business.

 

(c)                                  (i) there has not been any Hazardous Discharge on any Material Owned Property or Material Leased Property; (ii) there are no underground storage tanks or electrical equipment containing polychlorinated biphenyls on any Material Owned Property or Material Leased Property; (iii) the Material Owned Property or Material Leases Property has never been used as a treatment, storage or disposal facility of Hazardous Materials permitted under RCRA; and (iv) no Hazardous Materials are present on Material Owned Property or Material Leases Property excepting such quantities as are handled in accordance with all applicable manufacturer’s instructions and governmental regulations and in proper storage containers and as are appropriate for the operation of the commercial business of the Borrower, its Subsidiaries or any of their tenants.

 

SECTION 5.17                                      Ownership of Property; Liens; Investments, Etc.  (a)  As of the Closing Date, each of the Borrower and its Subsidiaries has good, marketable and insurable fee simple title to the properties owned by such party free and clear of all Liens, other than Permitted Liens.  Each of the Borrower and its Subsidiaries owns and has on the date hereof good and marketable title or subsisting leasehold interest (subject only to Permitted Liens) to, and enjoys on the date hereof peaceful and undisturbed possession of, all such properties that are necessary for the operation and conduct of its business, except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  There are no Liens of any nature whatsoever on any assets of the Borrower or any of its Subsidiaries other than Permitted Liens.

 

(b)                                 (i) Schedule 5.17(b)(i) sets forth a complete and accurate list as of the Closing Date of the locations all real property owned by the Borrower or any of its Subsidiaries showing the street address, county or other relevant jurisdiction, state and record owner, (ii)  Schedule 5.17(b)(ii) sets forth a complete and accurate list as of the Closing Date of all leases of real property under which any Loan Party is the lessee, showing the street address, county or other relevant jurisdiction, state, lessor, lessee, expiration date and annual rental cost thereof and each such lease is the legal, valid and binding obligation of the lessee thereof, enforceable in accordance with its terms, no such leases have been amended or modified except as set forth on Schedule 5.17(b)(ii), and complete and accurate copies thereof have been provided to the Collateral Agent, and (iii) Schedule 5.17(b)(iii) sets forth a complete and accurate list as of the Closing Date of all leases of real property under which any Loan Party is the lessor, showing the street address, county or other relevant jurisdiction, state, lessor, lessee, expiration date and annual rental cost thereof.

 

(c)                                  To the best knowledge of the Borrower after due inquiry and investigation, the legal description attached as Exhibit A to each Mortgage accurately and completely describes the Mortgaged Property intended to be covered thereby.

 

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SECTION 5.18                                      Patents, Trademarks, Copyrights and Licenses.  All patents, patent applications, trademarks, trademark applications, service marks, service mark applications, copyrights, copyright applications, design rights, tradenames, assumed names, trade secrets and licenses owned or utilized by the Borrower or any of its Subsidiaries are set forth on Schedule 5.18, are valid and have been duly registered or filed with all appropriate Governmental Authority and constitute all of the intellectual property rights which are necessary for the operation of its business; there is no objection to or pending challenge to the validity of any such patent, trademark, copyright, design rights, tradename, trade secret or license and the Borrower is not aware of any grounds for any challenge, except as set forth in Schedule 5.18 hereto.  Each patent, patent application, patent license, trademark, trademark application, trademark license, service mark, service mark application, service mark license, design rights, copyright, copyright application and copyright license owned or held by the Borrower or any of its Subsidiaries and all trade secrets used by the Borrower or any of its Subsidiaries consist of original material or property developed by the Borrower or such Subsidiary or was lawfully acquired by the Borrower or such Subsidiary from the proper and lawful owner thereof.  Each of such items has been maintained so as to preserve the value thereof from the date of creation or acquisition thereof.

 

SECTION 5.19                                      Priority.  (a)  The provisions of the Collateral Documents are effective to create in favor of the Collateral Agent for the benefit of the Secured Parties, and the execution, delivery and performance of this Agreement does not adversely affect the effectiveness of: (i) a legal, valid and enforceable first priority Lien on all right, title and interest of the Loan Parties in the Term Loan Primary Collateral, subject only to Permitted Liens; and (ii) a legal, valid and enforceable second priority Lien on all right, title and interest of the Loan Parties in the ABL Primary Collateral, subject only to Permitted Liens.

 

(b)                                 Except for filings contemplated hereby and by the Collateral Documents, no filing or other action (other than the taking of possession or control by the Collateral Agent of the Collateral with respect to which a security interest may be perfected only by possession or control) will be necessary to perfect such Liens.

 

SECTION 5.20                                      Anti-Terrorism Laws.  (a)  General.  Neither the Borrower nor any of its Affiliates is in violation of any Anti-Terrorism Law or engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.

 

(b)                                 Executive Order No. 13224.  Neither the Borrower nor any of its Affiliates or their respective agents acting or benefiting in any capacity in connection with the Borrowing or other Transactions hereunder, is any of the following (each a “Blocked Person”):

 

(i)                                     a Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224;

 

(ii)                                  a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224;

 

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(iii)                               a Person or entity with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;

 

(iv)                              a Person or entity that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order No. 13224;

 

(v)                                 a Person or entity that is named as a “specially designated national” on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control at its official website or any replacement website or other replacement official publication of such list; or

 

(vi)                              a Person or entity who is affiliated or associated with a Person or entity listed above.

 

Neither the Borrower or its Subsidiaries, nor to the knowledge of the Borrower, any of its agents acting in any capacity in connection with the Borrowing or other Transactions hereunder (a) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (b) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order No. 13224.

 

SECTION 5.21                                      Trading with the Enemy.  None of the Borrower or its Subsidiaries has engaged, nor does it intend to engage, in any business or activity prohibited by the Trading with the Enemy Act of 1917 (12 U.S.C. § 95a et seq.).

 

SECTION 5.22                                      Use of Proceeds.  The Borrower will use the proceeds of the Term Loan A, each New Term Loan and any Additional Term Commitments solely as provided for in Section 6.12.

 

SECTION 5.23                                      Swaps.  Neither the Borrower or any of its Subsidiaries is a party to, nor will it be a party to, any swap agreement whereby such Borrower or Subsidiary has agreed or will agree to swap interest rates or currencies unless same provides that damages upon termination following an event of default thereunder are payable on an unlimited “two-way basis” without regard to fault on the part of either party.

 

SECTION 5.24                                      Capital Stock.  After giving effect to the transactions under the Equity Documents, the authorized and outstanding Capital Stock of the Borrower and its Subsidiaries is as set forth on Schedule 5.24 hereto.  All of the Capital Stock of the Borrower and its Subsidiaries has been duly and validly authorized and issued and is fully paid (to the extent required by such Person’s Organization Documents in the case of a limited liability company) and non-assessable (except as provided under Applicable Law in the case of a limited liability company) and has been sold and delivered to the holders thereof in compliance with, or under valid exemption from, all federal and state laws and the rules and regulations of each Governmental Authority governing the sale and delivery of securities, assuming the truth and accuracy of the New Equity Holder’s representations and warranties in the Equity Documents.  Except for the rights and obligations set forth on Schedule 5.24, as provided for in the Equity Documents, those warrants issued pursuant to that certain Warrant Agreement, dated as of March 15, 2010, between the Borrower and American Stock Transfer & Trust Company, LLC (the

 

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“Existing Warrants”), or in the First Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code dated January 13, 2010, as modified prior to the date hereof (together with all related documents, the “Specified Plan”), there are no subscriptions, warrants, options, calls, commitments, rights or agreement by which any of the Borrower or its Subsidiaries or any of the shareholders of the Borrower or its Subsidiaries is bound relating to the issuance, transfer, voting or redemption of shares of its Capital Stock or any pre-emptive rights held by any Person with respect to the Capital Stock of the Borrower or its Subsidiaries.  Except as set forth on Schedule 5.24, as provided for in the Equity Documents, the Existing Warrants or the Specified Plan, none of the Borrower or its Subsidiaries have issued any securities convertible into or exchangeable for shares of its Capital Stock or any options, warrants or other rights to acquire such shares or securities convertible into or exchangeable for such shares.

 

SECTION 5.25                                      Equity Transactions.  All of the Equity Transactions have been fully consummated on the Closing Date pursuant to the Equity Documents in accordance with all Requirements of Law.

 

ARTICLE VI

 

AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied (other than in respect of contingent obligations, indemnities and expenses related thereto not then payable or in existence as of the Maturity Date), the Borrower shall, and shall cause each Subsidiary to:

 

SECTION 6.01                                      Financial Statements.  Deliver to the Administrative Agent (and the Administrative Agent shall promptly deliver copies thereof to the Lenders, provided that, if the Borrower has become and continues to be a Public Filer, then only the financial statements described in subsections (a) and (b) below, excluding Plant-Level Financial Statements, will be delivered to Public Lenders):

 

(a)                                 as soon as available, but in any event within ninety (90) days after the end of each fiscal year of the Borrower (commencing with the fiscal year ended December 31, 2012), (i) a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations, changes in shareholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, such consolidated statements to be audited and accompanied by a report and opinion of an independent certified public accountant of nationally recognized standing, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit, and (ii) Plant-Level Financial Statements for such fiscal year (such Plant-Level Financial Statements to be certified by a Responsible Officer of the Borrower as fairly presenting in all material respects the financial condition and results of operations of the applicable Facility in accordance with GAAP);

 

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(b)                                 as soon as available, but in any event within forty-five (45) days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower (commencing with the fiscal quarter ended September 30, 2012), (i) a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income or operations, changes in shareholders’ equity and cash flows for such fiscal quarter and for the portion of the Borrower’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail, and (ii) Plant-Level Financial Statements for such fiscal quarter, in each case, certified by a Responsible Officer of the Borrower as fairly presenting in all material respects the financial condition and results of operations of the Borrower and its Subsidiaries or applicable Facility in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes;

 

(c)                                  as soon as available, but in any event within thirty (30) days after the end of each fiscal month of each fiscal year of the Borrower (commencing with the fiscal month ended October 31, 2012), (i) a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal month, and the related consolidated statements of income or operations for such fiscal month and for the portion of the Borrower’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal month of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail, and (ii) Plant-Level Financial Statements for such fiscal month, in each case, certified by a Responsible Officer of the Borrower as fairly presenting in all material respects the financial condition and results of operations of the Borrower and its Subsidiaries or applicable Facility in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes; and

 

(d)                                 as soon as available and in any event within sixty (60) days after the end of each fiscal year, forecasts prepared by management of the Borrower, in form reasonably satisfactory to the Administrative Agent, of balance sheets, income statements and cash flow statements on a quarterly basis for the fiscal year following such fiscal year and on an annual basis for each fiscal year thereafter until the Maturity Date together with a budget for the each fiscal quarter and fiscal year, in form reasonably satisfactory to the Administrative Agent.

 

SECTION 6.02                                      Certificates; Other Information.  Deliver to the Administrative Agent, in form and detail reasonably satisfactory to the Administrative Agent:

 

(a)                                 concurrently with the delivery of the financial statements referred to in Section 6.01(a), a certificate of its independent certified public accountants reporting on such financial statements and stating that in performing their audit nothing came to their attention that caused them to believe the Borrower failed to comply with the financial covenants set forth in Section 7.08, except as specified in such certificate (which certificate may be limited to the extent required by accounting rules or guidelines and such accounting firm’s internal policies and procedures);

 

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(b)                                 (i) concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and (b) (commencing with the delivery of the financial statements for the fiscal quarter ended September 30, 2012), a duly completed Compliance Certificate signed by a Responsible Officer of the Borrower, which shall include detailed computations of the financial covenants, and (ii) following delivery of the financial statements referred to in Section 6.01(a) and (b), the Borrower shall hold a conference call with all Lenders, Equity Holders and prospective Equity Holders who are subject to the confidentiality provisions under this Agreement or the Stockholders Agreement, or are NDA Signatories, to be scheduled no later than 45 days following the end of each fiscal quarter;

 

(c)                                  promptly after any request by the Administrative Agent, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of any Loan Party by independent accountants in connection with the accounts or books of the Borrower or any of its Subsidiaries, or any audit of any of them;

 

(d)                                 promptly after the sending or filing thereof, copies of all proxy statements, financial statements and reports that any Loan Party or any of its Subsidiaries sends to its stockholders, and copies of all regular, periodic and special reports, and all registration statements, that any Loan Party or any of its Subsidiaries files with the SEC or any Governmental Authority that may be substituted therefor, or with any national securities exchange.

 

(e)                                  unless otherwise required to be delivered to the Lenders hereunder, promptly after the furnishing thereof, copies of any statement or report furnished to any holder of debt securities of any Loan Party or of any of its Subsidiaries pursuant to the terms of any indenture or similar agreement and not otherwise required to be furnished to the Lenders pursuant to Section 6.01 or any other clause of this Section 6.02;

 

(f)                                   as soon as available, but in any event prior to the date audited financial statements are required to be delivered, a report summarizing the insurance coverage (specifying type, amount and carrier) in effect for the Borrower and its Subsidiaries and containing such additional information as the Administrative Agent, or any Lender through the Administrative Agent, may reasonably request;

 

(g)                                  promptly, and in any event within five (5) Business Days after receipt thereof by the Borrower or any Subsidiary, copies of each material notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any material investigation or possible material investigation or other material inquiry by such agency regarding financial or other operational results of the Borrower or any Subsidiary;

 

(h)                                 as soon as available, but in any event within the time period in which the Borrower must deliver its annual audited financials under Section 6.01(a), (i) a report supplementing Section 5.17(b)(i), Section 5.17(b)(ii) and Section 5.17(b)(iii), identifying all Material Owned Real Property and Material Leased Real Property acquired or

 

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disposed of by any Loan Party during such fiscal year and (ii) updated or supplemental schedules to any Loan Document or Collateral Document updating any information contained therein that must be so updated or supplemented in order to make such information accurate and complete;

 

(i)                                     promptly, such additional information regarding the business, financial, legal or corporate affairs of the Borrower or any Subsidiary, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may from time to time reasonably request;

 

(j)                                    not later than ninety (90) days after the end of each fiscal year of the Borrower, a copy of summary projections by the Borrower of the operating budget and cash flow budget of the Borrower and its Subsidiaries for the succeeding fiscal year, such projections to be accompanied by a certificate of a Responsible Officer to the effect that such projections have been prepared based on assumptions believed by the Borrower to be reasonable; and

 

(k)                                 within five (5) Business Days after the last day of the fiscal quarter of the Borrower or any Subsidiary, such information as is required under Sections 3.10(h) and 4.09(g) of the Security Agreement, if applicable to the Borrower or such Subsidiary during such fiscal quarter.

 

Documents required to be delivered pursuant to Section 6.01(a), (b), or (c) or Section 6.02 may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (a) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website address listed on Schedule 10.02; (b) such information is filed on EDGAR or the equivalent thereof with the SEC or (c) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided, that if the Administrative Agent or any Lender so requests, the Borrower shall provide the Administrative Agent or Lender, as applicable, by electronic mail electronic versions (i.e., soft copies) of the documents required to be delivered pursuant to Section 6.01(a) or (b) or Section 6.02.  The Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

 

The Borrower hereby acknowledges that (a) the Administrative Agent will make available to the Lenders materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) in the event that the Borrower becomes a Public Filer, certain of the Lenders may choose to be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to any Loan Party or their securities) (each, a “Public Lender”).  The Borrower hereby agrees that (i) Borrower Materials that are to be made available on the Platform to Public Lenders shall be clearly and conspicuously marked “PUBLIC,” which, at a minimum, shall mean that the word

 

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“PUBLIC” shall appear prominently on the first page thereof, (ii) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent and the Lenders and the Lenders to treat such Borrower Materials as either publicly available information or not material information (although it may contain sensitive business information and remains subject to the confidentiality undertakings of Section 10.07) with respect to the Borrower or any other Loan Party or its securities for purposes of United States Federal and state securities laws, (iii) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Side Information,” and (iv) the Administrative Agent shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side Information.”  In connection with the foregoing, each party hereto acknowledges and agrees that the foregoing provisions are not in derogation of their confidentiality obligations under Section 10.07.

 

SECTION 6.03                                      Notices.  Notify the Administrative Agent:

 

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

 

(b)                                 promptly, of any event which could reasonably be expected to have a Material Adverse Effect;

 

(c)                                  promptly, of any event that (i) the Borrower or any member of the Controlled Group knows or has reason to know that a Termination Event has occurred, together with a written statement describing such Termination Event and the action, if any, which such Borrower or any member of the Controlled Group has taken, is taking, or proposes to take with respect thereto and, when known, any action taken or threatened by the Internal Revenue Service, Department of Labor or PBGC with respect thereto, (ii) the Borrower or any member of the Controlled Group knows or has reason to know that a prohibited transaction (as defined in Sections 406 of ERISA and 4975 of the Code) has occurred together with a written statement describing such transaction and the action which such Borrower or any member of the Controlled Group has taken, is taking or proposes to take with respect thereto, (iii) a funding waiver request has been filed with respect to any Plan together with all communications received by the Borrower or any member of the Controlled Group with respect to such request, (iv) any increase in the benefits of any existing Plan or the establishment of any new Plan or the commencement of contributions to any Plan to which the Borrower or any member of the Controlled Group was not previously contributing shall occur, (v) the Borrower or any member of the Controlled Group shall receive from the PBGC a notice of intention to terminate a Plan or to have a trustee appointed to administer a Plan, together with copies of each such notice, (vi) the Borrower or any member of the Controlled Group shall receive any favorable or unfavorable determination letter from the Internal Revenue Service regarding the qualification of a Plan under Section 401(a) of the Code, together with copies of each such letter; (vii) the Borrower or any member of the Controlled Group shall receive a notice regarding the imposition of withdrawal liability, together with copies of each such notice; (viii) the Borrower or any member of the Controlled Group shall fail to make a required installment or any other required payment under Section 412 of the Code on or before the due date for such installment or payment; or (ix) the

 

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Borrower or any member of the Controlled Group knows that (A) a Multiemployer Plan has been terminated, (B) the administrator or plan sponsor of a Multiemployer Plan intends to terminate a Multiemployer Plan, or (C) the PBGC has instituted or will institute proceedings under Section 4042 of ERISA to terminate a Multiemployer Plan;

 

(d)                                 promptly after receipt of notice or knowledge of the Borrower thereof, of any action, suit, proceeding or claim alleging any Environmental Liability against or by the Borrower or any of its Subsidiaries that could reasonably be expected to have a Material Adverse Effect;

 

(e)                                  promptly after the commencement thereof, notice of all actions, suits, investigations, litigation and proceedings before any Governmental Authority affecting any Loan Party or any of its Subsidiaries of the type described in Section 5.05(b), Section 5.05(d) and Section 5.09 that relates to the Transactions or the Transaction Documents or that could reasonably be expected to have a Material Adverse Effect; and

 

(f)                                   the occurrence of any event triggering any requirement under Section 6.13 with respect to any additional Subsidiary Guarantor or any additional Collateral.

 

Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto.

 

SECTION 6.04                                      Payment of Indebtedness.  Pay, discharge or otherwise satisfy at or before maturity (subject, where applicable, to specified grace periods and, in the case of the trade payables, to normal payment practices) all its obligations and liabilities of whatever nature, except when the failure to do so could not reasonably be expected to have a Material Adverse Effect or when the amount or validity thereof is currently being properly contested and for which appropriate provisions have been made, subject at all times to any applicable subordination arrangement in favor of the Lenders.

 

SECTION 6.05                                      Corporate Existence.  Cause to be done all things necessary to preserve and keep in full force and effect its corporate, partnership or other existence (except as otherwise permitted under Section 7.03 and 7.04) in accordance with the respective organizational documents of each such Person and the rights (charter and statutory) and material franchises of the Borrower and each of its Subsidiaries; provided, however, that neither the Borrower nor any of its Subsidiaries shall be required to preserve any such right or franchise or in the case of any foreign Subsidiary, its existence, if (in each case) the Board of Directors of the Borrower shall determine that the loss thereof is not, and shall not, result in a Material Adverse Effect.

 

SECTION 6.06                                      Maintenance of Properties.  Cause all Material Owned Properties and Material Leased Properties used or useful to the conduct of its respective business, taken as a whole, to be maintained and kept in normal condition, repair and working order and supplied with all necessary equipment (ordinary wear and tear excepted and other than as caused by casualty events) and shall cause to be made all repairs, renewals, replacements, and betterments thereof, all as in its judgment may be necessary, so that the business carried on in

 

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connection therewith may be properly conducted at all times, except where the failure to do so could not reasonably be expected to adversely affect the use of the corresponding Material Owned Property or Material Leased Property (as applicable) for its intended purpose; provided, however, that, nothing in this Section 6.06 shall prevent the Borrower or any of its Subsidiaries from (a) idling such property in connection with maintenance or to the extent the operation of such property is not at such time commercially viable or (b) discontinuing the use, operation or maintenance of any of such properties, or disposing of any of them, if such property is obsolete, surplus or worn out property or is no longer commercially viable to operate and maintain or desirable in the conduct of the business of the Borrower or any such Subsidiary; provided, further, that nothing in this Section 6.06 shall prevent the Borrower or any of its Subsidiaries from discontinuing or disposing of any properties to the extent otherwise permitted by this Agreement.

 

SECTION 6.07                                      Payment of Taxes and Other Claims.  Timely pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (a) all material taxes, assessments and governmental charges levied or imposed upon it or upon the income, profits or property of it and (b) all lawful claims which, in each case, if unpaid, might by law become a material liability or Lien upon the property of the Borrower or any of its Subsidiaries; provided, however, that no Loan Party shall be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, (i) the applicability or validity is being contested in good faith by appropriate proceedings and for which appropriate provision has been made or (ii) where the failure to effect such payment or discharge is not adverse in any material respect to the Lenders.

 

SECTION 6.08                                      Maintenance of Insurance.  Maintain, and shall cause its Subsidiaries to maintain insurance with responsible carriers against such risks and in such amounts, and with such deductibles, retentions, self-insured amounts and co-insurance provisions, as are, in the Administrative Agent’s reasonable judgment, customarily carried by similar businesses of similar size, including property and casualty loss, workers’ compensation and interruption of business insurance.  The Borrower shall, and shall cause each Subsidiary to, use commercially reasonable efforts to cause each such insurance policy to (a) name the Collateral Agent as loss payee with respect to property insurance and additional insured with respect to general liability insurance (without any representation or warranty by or obligation upon the Collateral Agent); (b) contain the agreement by the insurer that any loss thereunder shall be payable to the Collateral Agent notwithstanding any action, inaction or breach of representation or warranty by the Borrower or its Subsidiaries, subject to applicable insurance industry standards; (c) provide that there shall be no recourse against the Collateral Agent for payment of premiums or other amounts with respect thereto; (d) provide that the insurer shall endeavor to give at least ten (10) days’ prior written notice of cancellation or of lapse shall be given to the Collateral Agent by the insurer; and (e) allow the Collateral Agent to settle any claims under insurance policies required to be maintained under this Section 6.08 following an Event of Default.  The Borrower and its Subsidiaries will, if so requested by the Collateral Agent, duly execute and deliver instruments of assignment of such insurance policies to comply with the requirements of this Section 6.08 and cause the insurers to acknowledge notice of such assignment.

 

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SECTION 6.09                                      Compliance with Laws.  Comply with the requirements of all Applicable Law and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Applicable Law or order, writ, injunction or decree is being contested in good faith by the Borrower or any of its Subsidiaries by appropriate proceedings diligently conducted or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

 

SECTION 6.10                                      Books and Records.  (a) Maintain proper books of record and account, in which in all material respects full, true and correct entries in conformity with GAAP consistently applied shall be made of all material financial transactions and matters involving the assets and business of the Borrower or such Subsidiary, as the case may be; and (b) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Borrower or such Subsidiary, as the case may be.

 

SECTION 6.11                                      Inspection Rights.  Upon reasonable notice, permit representatives and independent contractors of each Agent and Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom and to discuss the business, finances and accounts with its officers and independent public accountants at such reasonable times during normal business hours and as often as may be reasonably desired, provided, that such Agent or Lender shall give Borrower reasonable advance notice prior to any contact with such accountants and give the Borrower the opportunity to participate in such discussions, provided further that unless an Event of Default has occurred, the Borrower shall only be responsible for each Agent’s and Lenders’ expenses in connection with any such inspection once per fiscal year.

 

SECTION 6.12                                      Use of Proceeds.  Use the proceeds of any Borrowing solely for for transaction costs, fees and expenses related to the Transaction Documents or the Transactions and for general corporate purposes.

 

SECTION 6.13                                      Covenant to Guarantee Obligations and Give Security.  Upon (a) the request of the Collateral Agent following the occurrence and during the continuance of a Default; (b) the formation or acquisition of any new direct or indirect Subsidiaries by any Loan Party; or (c) the acquisition of any material property by any Loan Party, and such property, in the reasonable judgment of the Collateral Agent, shall not already be subject to a perfected first priority security interest in favor of the Collateral Agent for the benefit of the Lenders (subject only to Permitted Liens), then in each case at the Borrower’s expense:

 

(i)                                     in connection with the formation or acquisition of a Subsidiary, within thirty (30) days after such formation or acquisition, cause each such Subsidiary, and cause each direct and indirect parent of such Subsidiary (if it has not already done so), to duly execute and deliver to the Collateral Agent a Subsidiary Guaranty, guaranteeing the other Loan Parties’ obligations under the Loan Documents;

 

(ii)                                  (A) within ten (10) days after such request, furnish to the Collateral Agent a description of the real and personal properties of the Loan Parties and their respective Subsidiaries in detail reasonably satisfactory to the Collateral Agent and

 

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(B) within thirty (30) days after such formation or acquisition, furnish to the Collateral Agent a description of the real and personal properties of such Subsidiary or the real and personal properties so acquired, in each case in detail reasonably satisfactory to the Collateral Agent;

 

(iii)                               (A) within fifteen (15) days after such request or within sixty (60) days after acquisition of such material property by any Loan Party, duly execute and deliver, and cause each Loan Party to duly execute and deliver, to the Collateral Agent such additional Mortgages (together with all the items set forth in Section 6.16), pledges, assignments, supplements to the Security Agreement, supplements to the Intellectual Property Security Agreements and other security and pledge agreements as specified by, and in form and substance reasonably satisfactory to the Collateral Agent, securing payment of all the Obligations of such Loan Party under the Loan Documents and constituting Liens on (1) with respect to real property, all Material Owned Real Property and Material Owned Leased Property and (2) with respect to all personal property, all such personal property and (B) within sixty (60) days after such formation or acquisition of any new Subsidiary, duly execute and deliver and cause such Subsidiary and each Loan Party acquiring Capital Stock in such Subsidiary to duly execute and deliver to the Collateral Agent Mortgages (together with all the items set forth in Section 6.16), pledges, assignments, supplements to the Security Agreement, supplements to the Intellectual Property Security Agreements and other security and pledge agreements as specified by, and in form and substance reasonably satisfactory to, the Collateral Agent, securing payment of all of the Obligations of such Subsidiary or Loan Party, respectively, under the Loan Documents and constituting Liens on (x) with respect to real property, all Material Owned Real Property and Material Owned Leased Property owned or held by such Subsidiary and (y) with respect to all personal property, all personal property owned or held by such Subsidiary;

 

(iv)                              within sixty (60) days after such request, formation or acquisition, take, and cause each Loan Party and each newly acquired or newly formed Subsidiary to take, whatever action (including, without limitation, the recording of mortgages and the satisfaction of the other items set forth in Section 6.16(a), the filing of UCC financing statements, the giving of notices and the endorsement of notices on title documents) may be necessary or advisable in the opinion of the Collateral Agent to vest in the Collateral Agent (or in any representative of the Collateral Agent designated by it) valid and subsisting Liens on the properties purported to be subject to the Mortgages, pledges, assignments, supplements to the Security Agreement, supplements to the Intellectual Property Security Agreements and security and pledge agreements delivered pursuant to this Section 6.13, enforceable against all third parties in accordance with their terms (subject only to Permitted Liens);

 

(v)                                 within sixty (60) days after such request, formation or acquisition, deliver to the Collateral Agent, upon the request of the Collateral Agent in its sole discretion, a signed copy of a favorable opinion (subject to customary assumptions, qualifications, exceptions and limitations), addressed to the Collateral Agent and the other Lenders, of counsel for the Loan Parties reasonably acceptable to the Collateral Agent as to (A) such Guarantees, supplements to Guarantees, Mortgages, including,

 

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without limitation, the opinions set forth in Section 6.16(b), pledges, assignments, supplements to the Security Agreement, supplements to the Intellectual Property Security Agreements and security and pledge agreements being legal, valid and binding obligations of each Loan Party party thereto enforceable in accordance with their terms; (B) such recordings, filings, notices, endorsements and other actions being sufficient to create valid perfected Liens on such properties; and (C) such other matters as the Collateral Agent may reasonably request;

 

(vi)                              as promptly as practicable after such request, formation or acquisition, deliver, upon the request of the Collateral Agent in its reasonable discretion, to the Collateral Agent with respect to each parcel of Material Owned Real Property and Material Owned Leased Property owned or held by each Loan Party or newly acquired or newly formed Subsidiary title reports and the other items set forth in Section 6.16(a), surveys and engineering, soils and other reports, and environmental assessment reports, each in scope, form and substance reasonably satisfactory to the Collateral Agent; and

 

(vii)                           at any time and from time to time, promptly execute and deliver, and cause each Loan Party and each newly acquired or newly formed Subsidiary to execute and deliver, any and all further instruments and documents and take, and cause each Loan Party and each newly acquired or newly formed Subsidiary to take, all such other action as the Collateral Agent may reasonably deem necessary or desirable in obtaining the full benefits of, or in perfecting and preserving the Liens of, such guaranties, Mortgages, pledges, assignments, supplements to the Security Agreement, supplements to the Intellectual Property Security Agreements and other security and pledge agreements.

 

The foregoing requirements of Section 6.13 shall not apply to (a) those assets over which the granting of security interests in such assets would be prohibited by contract, Applicable Law or regulation not overridden by the UCC or with respect to the assets of any non-wholly owned subsidiary, the organizational documents of such non-wholly owned subsidiary; provided that, at the request of the Collateral Agent, the Borrower shall use its commercially reasonable efforts to obtain the applicable consents to such pledge and security interest, (b) payroll, tax and other trust accounts, (c) motor vehicles and other assets subject to certificates of title, (d) with respect to any interests or assets in respect of a CFC, liens or pledges in excess of 65% of the voting capital stock of any “first-tier” Subsidiary that is not a Domestic Subsidiary and (e) those assets as to which the Administrative Agent and the Borrower reasonably determine that the cost of obtaining such security interest or perfection thereof are excessive in relation to the benefit to the Lenders of the security to be afforded thereby.

 

SECTION 6.14                                      Compliance with ERISA.  (a) (i) Maintain, or permit any member of the Controlled Group to maintain, or (ii) become obligated to contribute, or permit any member of the Controlled Group to become obligated to contribute, to any Pension Benefit Plan, other than those Pension Benefit Plans disclosed on Schedule 5.05(d); (b) engage, or permit any member of the Controlled Group to engage, in any non-exempt “prohibited transaction”, as that term is defined in Section 406 of ERISA or Section 4975 of the Code that could reasonably be expected to have a Material Adverse Effect; (c) terminate, or permit any member of the Controlled Group to terminate, any Pension Benefit Plan where such event could result in any

 

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liability in excess of $1,000,000 of the Borrower or any member of the Controlled Group or the imposition of a lien securing obligations in excess of $1,000,000 on the property of the Borrower or any member of the Controlled Group pursuant to Section 4068 of ERISA.

 

SECTION 6.15                                      Compliance with Environmental Laws.  (a) Comply, and use reasonable efforts to cause all lessees and other Persons operating or occupying its properties to comply with all applicable Environmental Laws and Environmental Permits and obtain, to the extent necessary based on its current operations, and renew all Environmental Permits for its operations and properties, except in such instances in which (i) the requirement of an Environmental Permit is being contested in good faith by the Borrower or any of its Subsidiaries by appropriate proceedings diligently conducted or (ii) the failure to so comply, obtain or renew could not reasonably be expected to have a Material Adverse Effect, and (b) undertake and perform any cleanup, removal, remedial or other action necessary to remove and clean up all Hazardous Materials from any of its properties, in accordance with the requirements of all Environmental Laws, except in such instances in which (i) the requirement to undertake or perform is being contested in good faith by the Borrower or any of its Subsidiaries by appropriate proceedings diligently conducted or (ii) the failure to so undertake or perform could not reasonably be expected to have a Material Adverse Effect.

 

SECTION 6.16                                      Post-Closing Obligations.  Cause the following to be delivered to the Administrative Agent, properly executed by a Responsible Officer of the signing Loan Party, each in form and substance reasonably satisfactory to the Administrative Agent, within 60 days after the Closing Date (as such time period may be extended for a period up to 30 days in the Administrative Agent’s reasonable discretion) (“Mortgage Effective Date”):

 

(a)                                 Amendments to the existing Mortgages, in form and substance satisfactory to the Collateral Agent with respect to each Material Owned Real Property and Material Leased Real Property (other than the Excepted Leased Real Property), in each case duly executed by the appropriate Loan Party, together with:

 

(i)                                     evidence that counterparts of such Mortgages and such amendments to the existing Mortgages have been duly executed, acknowledged and delivered in form suitable for filing or recording on or before the Mortgage Effective Date, in all filing or recording offices that the Collateral Agent may reasonably deem necessary or desirable in order to create or continue a valid first and subsisting Lien on the property described therein in favor of the Collateral Agent for the benefit of the Secured Parties and that all filing and recording taxes and fees have been paid;

 

(ii)                                  fully paid American Land Title Association Lender’s Extended Coverage title insurance Endorsements (the “Mortgage Endorsements”) to the following loan policies of title insurance issued by Commonwealth Land Title Insurance Company: (A) policy number 20105167-A dated March 29, 2011, (B) policy number 20105168-A dated March 29, 2011, (C) policy number M-10-005480 dated March 25, 2011, (D) policy number 1401-A00199761-CLT dated April 1, 2011, and (E) policy number 8839008 dated March 29, 2011, in form and substance, reasonably acceptable to the Administrative Agent, issued, coinsured and reinsured by title insurers reasonably acceptable to the Collateral Agent, insuring such Mortgages, as amended or

 

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supplemented to date, to be valid first and subsisting Liens on the property described therein, free and clear of all defects (including, but not limited to, mechanics’ and materialmen’s Liens) and encumbrances, excepting only Permitted Liens, and providing for such other affirmative insurance (including endorsements for future advances under the Loan Documents and for mechanics’ and materialmen’s Liens) and such coinsurance and direct access reinsurance as the Collateral Agent may reasonably deem necessary or desirable and with respect to any property in a state in which a zoning endorsement is not available, a zoning compliance letter from the applicable municipality or a zoning report from Planning and Zoning Resources Corporation, in each case reasonably satisfactory to the Collateral Agent;

 

(iii)                               certified updates to the following surveys: (A) in connection with 1300 S. Second Street, Pekin, Tazewell County, Illinois, the ALTA/ACSM Land Title Survey by Austin Engineering Co., Inc. dated February 16, 2011 as Project No. 42-11-011, (B) in connection with 23133 E County Hwy 6, Canton, Fulton County, Illinois, the ALTA/ACSM Land Title Survey dated January 27, 2011 by Maurer & Stutz, Inc. as Project No. 23211001.00, (C) in connection with 7201 Port Road, Mt. Vernon, Posey County, Indiana, the ALTA/ACSM Land Title Survey by Morley & Associates, Inc. dated February 2, 2011 as Project No. 6928, (D) in connection with 2103 Harvest Drive, Aurora, Hamilton County, Nebraska, the ALTA/ACSM Title Survey dated February 3, 2011 by Olsson Associates as Project No. 20110079, and (E) in connection with 1205 S. “O” Road, Aurora, Hamilton County, Nebraska, the ALTA/ACSM Title Survey dated January 17, 2011 by Olsson Associates as Project No. 2011-0079, for which all necessary fees (where applicable) have been paid, and dated no more than thirty (30) days before the Mortgage Effective Date, certified to the Collateral Agent and the issuer of the Mortgage Endorsements in a manner reasonably satisfactory to the Collateral Agent by a land surveyor duly registered and licensed in the States in which the property described in such surveys is located and reasonably acceptable to the Administrative Agent, indicating any material changes to the existing surveys with respect to all buildings and other improvements, any off-site improvements, the location of any easements, parking spaces, rights of way, building set back lines and other dimensional regulations and the absence of encroachments, either by such improvements or on to such property, and other defects, other than encroachments and other defects reasonably acceptable to the Collateral Agent;

 

(iv)                              evidence of the insurance required by the terms of such Mortgages, including where applicable, flood zone insurance;

 

(v)                                 certified copy of the Indiana Port Lease Agreement and all amendments thereto;

 

(vi)                              confirmation that the amendment to that certain First Lien Leasehold Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Filing (Indiana), dated as of March 22, 2011 and recorded on March 25th, 2011 as Instrument Number 201101239 in the office of the Posey County Recorder, State of Indiana was delivered to the Indiana Port Lessor;

 

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(vii)                           tenant estoppel certificate from the Indiana Port Lessee, for the benefit of the Administrative Agent and Fidelity National Title Insurance Company, in form and substance reasonably satisfactory to the Administrative Agent;

 

(viii)                        such other consents, agreements and confirmations of lessors and third parties as the Collateral Agent may reasonably deem necessary or desirable and evidence that all other actions that the Collateral Agent may reasonably deem necessary or desirable in order to create valid first and subsisting Liens on the property described in such Mortgages has been taken;

 

(ix)                              such other assurances, certificates and documents as the Collateral Agent reasonably may require; and

 

(x)                                 a Memorandum of Intercreditor Agreement with respect to each Material Owned Real Property and Material Leased Real Property (other than Excepted Leased Real Property), in form and substance reasonably satisfactory to the Collateral Agent, in each case duly executed by the appropriate Loan Party.

 

(b)                                 The executed opinions of (i) Akin Gump Strauss Hauer & Feld LLP, special New York counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, in form and substance acceptable to the Administrative Agent and (ii) local counsel to the Loan Parties in states in which the Material Leased Properties and the Material Owned Properties are located, with respect to the enforceability of the Mortgages delivered pursuant to clause (a) and any related fixture filing, addressed to the Administrative Agent and each Lender, in form and substance acceptable to the Administrative Agent.

 

SECTION 6.17                                      Events of Loss.  (a) Within twelve (12) months after the date the Borrower or any of its Subsidiaries actually receives any Net Cash Proceeds with respect to an Event of Loss (except for any Net Cash Proceeds (i) applied for general working capital purposes as and to the extent permitted pursuant to Section 2.03(b)(iv)(x) or (ii) required to be applied to prepayment of Term Loans pursuant to Section 2.03(b)(iv)(y)), apply such Net Cash Proceeds, at its option, to:

 

(i)                                     the rebuilding, repair, replacement or construction of improvements to the assets subject to such Event of Loss so long as the rebuilt, repaired or improved property or replacement property constitutes Replacement Assets (provided that (x) such Replacement Assets shall be limited to only Replacement Assets that no later than the completion of such rebuilding, repair or improvement or the acquisition of such replacement have become Term Loan Primary Collateral; (y) to the extent the assets subject to such Event of Loss constitute Specified Collateral, such Replacement Assets shall be limited to only Replacement Assets constituting Specified Assets that have become Specified Collateral; and (z) the provisions of Section 6.13 have otherwise been complied with respect to such Replacement Assets no later than the completion of such rebuilding, repair or improvement or the acquisition of such replacement);

 

(ii)                                  (A) acquire Replacement Assets or (B) enter into a binding commitment to acquire Replacement Assets and such Net Cash Proceeds have actually

 

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been applied to the purchase of such Replacement Assets within six (6) months of the date on which such binding commitment was entered into (provided that (w) such Replacement Assets shall be used only in an existing Facility of the Borrower or its Subsidiaries, (x) such Replacement Assets shall be limited to only Replacement Assets that simultaneously with the acquisition thereof become Term Loan Primary Collateral; (y) to the extent the assets subject to such Event of Loss constitute Specified Collateral, such Replacement Assets shall be limited to only Replacement Assets constituting Specified Assets that simultaneously with the acquisition thereof become Specified Collateral; and (z) such Replacement Assets are not acquired until and unless the provisions of Section 6.13 have otherwise been complied with respect to such Replacement Assets);

 

(iii)                               for Capital Expenditures for existing Facilities of the Borrower and its Subsidiaries; or

 

(iv)                              a combination of the actions set forth in the foregoing clauses (i),  (ii) and (iii) above.

 

(b)                                 With respect to any property or asset subject to an Event of Loss pursuant to clause (d) of the definition of “Event of Loss” that has a Fair Market Value (or replacement cost, if greater) in excess of $1,000,000, the Borrower (or the affected Subsidiary, as the case may be), shall be required to receive consideration (i) at least equal to the Fair Market Value (as evidenced by a Board Resolution) of the assets subject to the Event of Loss and (ii) at least 75% of which is in the form of cash or Cash Equivalents.

 

(c)                                  Unless and until any Net Cash Proceeds from an Event of Loss (other than any Net Cash Proceeds applied for general working capital purposes as and to the extent permitted pursuant to Section 2.03(b)(iv)(x)) are finally applied as specified in clause (a) or in accordance with Section 2.03(b)(iv), the Borrower shall cause such Net Cash Proceeds to be held by the Collateral Agent as cash of Cash Equivalents in the Collateral Account.

 

SECTION 6.18                                      Further Assurances.  Promptly upon request by any Agent, or any Lender through the Administrative Agent, (a) correct any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and reregister any and all such further acts, deeds, certificates, assurances and other instruments as such Agent or Lender may reasonably require from time to time in order to (i) carry out more effectively the purposes of the Transaction Documents, (ii) to the fullest extent permitted by Applicable Law and Contractual Obligations, subject the Borrower’s or any of its Subsidiaries’ properties, assets, rights or interests to the Liens now or hereafter intended to be covered by any of the Collateral Documents, and (iii) perfect and maintain the validity, effectiveness and (subject only to Permitted Liens) priority of any of the Collateral Documents and any of the Liens intended to be created thereunder.

 

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ARTICLE VII

 

NEGATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied (other than in respect of contingent obligations, indemnities and costs and expenses related thereto not then payable or in existence as of the Maturity Date), the Borrower shall not, nor shall it permit any Subsidiary to, directly or indirectly:

 

SECTION 7.01                                      Liens.  Create, incur, assume or suffer to exist any Lien upon, or exception to title to, any of its property, assets or revenues (including any shares of Capital Stock or Indebtedness of any Subsidiary), whether now owned or hereafter acquired, or sign or file under the UCC of any jurisdiction a financing statement that names the Borrower or any of its Subsidiaries as debtor, or assign any accounts or other right to receive income, other than Permitted Liens.

 

SECTION 7.02                                      Indebtedness.  (a)  Create, incur, assume or suffer to exist (for purposes of this Section 7.02, collectively, “incur”) any Indebtedness or issue any Preferred Stock.  Notwithstanding the foregoing, the Borrower and any Subsidiary (except as specified below) may incur, and the foregoing clause (a) will not prohibit the incurrence of, each and all of the following (clauses (i) through (xviii) comprising the “Permitted Debt” of the Borrower and any Subsidiary):

 

(i)                                     Indebtedness outstanding on the date hereof and listed on Schedule 7.02 (provided that any Indebtedness incurred under the Existing ABL Facility shall be deemed to be incurred pursuant to Section 7.02(a)(ii) and not this Section 7.02(a)(i));

 

(ii)                                  (A) Obligations arising in connection with the Credit Facilities (but excluding Obligations owed under this Agreement or any other Loan Documents) and Bank Product Agreements (collectively, the “ABL Obligations”); provided that the Aggregate Principal Amount of the ABL Obligations at any one time outstanding under this clause (ii) shall not exceed the ABL Cap, and (B) Obligations of the Loan Parties under the Loan Documents; provided that (1) any Hedging Agreement or Secured Hedge Agreement shall otherwise be permitted pursuant to Section 7.15; (2) the Aggregate Principal Amount of any such Obligations arising under any Hedging Agreement or Secured Hedge Agreement entitled to the benefit of the Liens under the Collateral Documents or the Existing ABL Facility shall not exceed $25,000,000 at any time; and (3) Secured Hedge Agreements shall be limited to those incurred for the purpose of hedging commodity prices;

 

(iii)                               Indebtedness owed to the Borrower or any of its Subsidiaries evidenced by an unsubordinated promissory note; provided that if the Borrower or any of its Subsidiaries is the obligor on such Indebtedness, such Indebtedness must be expressly subordinated in right of payment to the Term Loans, in the case of the Borrower, or the Subsidiary Guaranty, in the case of a Subsidiary;

 

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(iv)                              Guarantees of the Term Loans and Guarantees of Indebtedness of the Borrower or any Subsidiary by the Borrower or any Subsidiary; provided that such Indebtedness is permitted by and made in accordance with this Section 7.02;

 

(v)                                 Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five (5) Business Days of incurrence;

 

(vi)                              Indebtedness in respect of performance bonds, bankers’ acceptances, workers’ compensation claims, surety or appeal bonds, payment obligations in connection with self-insurance or similar obligations, and bank overdrafts (and letters of credit in respect thereof) incurred in the ordinary course of business;

 

(vii)                           Indebtedness (including Indebtedness represented by Capitalized Lease Obligations, mortgage financings or purchase money obligations) incurred or Preferred Stock issued to finance the cost (including the cost of improvement or construction) to acquire real or personal property, plant or equipment (including acquisitions of the Capital Stock of a Person that becomes a Subsidiary, to the extent of the Fair Market Value of the real or personal property so acquired, plus goodwill associated therewith) by the Borrower or any of its Subsidiaries after the Closing Date; provided, however, that the aggregate principal amount of such Indebtedness and/or the liquidation preference of such Preferred Stock outstanding at any time may not exceed $5,000,000;

 

(viii)                        [Intentionally Omitted]

 

(ix)                              Indebtedness consisting of (A) the financing of insurance premiums in the ordinary course of business or (B) take-or-pay obligations contained in supply arrangements entered into in the ordinary course of business;

 

(x)                                 (A) Indebtedness comprised of secured Obligations in respect of Hedging Agreements or Secured Hedge Agreements to the extent permitted to be entered into pursuant to the last proviso in Section 7.02(a)(ii); and (B) Indebtedness comprised of unsecured Obligations in respect of Hedging Agreements, in each case to the extent permitted pursuant to Section 7.15;

 

(xi)                              endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business;

 

(xii)                           the issuance by any of the Borrower’s Subsidiaries to the Borrower or to any other Subsidiaries of shares of Disqualified Stock or Preferred Stock;

 

(xiii)                        the incurrence of Indebtedness arising from agreements of the Borrower or a Subsidiary providing indemnification, adjustment of purchase price, earn outs or similar obligations, in each case, incurred in connection with the disposition or acquisition of any business, assets or a Subsidiary expressly permitted under the terms of

 

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this Agreement, other than Indebtedness or guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition, in an aggregate principal amount at any time outstanding not to exceed $5,000,000; provided, however, in the case of any disposition, the maximum principal amount of such Indebtedness does not exceed the gross cash proceeds actually received by the Borrower or a Subsidiary in connection with such disposition;

 

(xiv)                       guarantees in the ordinary course of business of the obligations not constituting Indebtedness of suppliers, customers, distributors, franchisers and licensees;

 

(xv)                          the incurrence by the Borrower or any of its Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend, renew, refund, refinance, replace, defease or discharge, Indebtedness that was permitted by this Agreement to be incurred under clause (i);

 

(xvi)                       [Intentionally omitted];

 

(xvii)                    to the extent constituting Indebtedness, indemnification obligations and other similar obligations (including advancement of expenses) of the Borrower or any of its Subsidiaries in favor of directors, officers, employees, consultants or agents of the Borrower or any of its Subsidiaries extended in the ordinary course of business in an aggregate principal amount not to exceed $1,000,000 at any time outstanding; and

 

(xviii)                 additional Indebtedness of the Borrower or Indebtedness of or Preferred Stock issued by any Subsidiary (in addition to Indebtedness permitted under clauses (i) through (xvii) above) in an aggregate principal amount and/or liquidation preference of such Preferred Stock outstanding at any time not to exceed $5,000,000.

 

(b)                                 Notwithstanding any other provision of this Section 7.02, the maximum amount of Indebtedness that may be incurred pursuant to this Section 7.02 shall not be deemed to be exceeded, with respect to any outstanding Indebtedness due solely to the result of fluctuations in exchange rates or currency values.

 

(c)                                  For purposes of determining any particular amount of Indebtedness under this Section 7.02, Guarantees, Liens or obligations with respect to letters of credit supporting Indebtedness otherwise included in the determination of such particular amount shall not be included.  For purposes of determining compliance with this Section 7.02, in the event that an item of Indebtedness, Preferred Stock, or Disqualified Stock meets the criteria of more than one of the types of Indebtedness described in clause (a) of this Section 7.02 (including the first paragraph of such clause (a)), the Borrower, in its sole discretion, may classify, and from time to time may reclassify, such item of Indebtedness, Preferred Stock, or Disqualified Stock or any portion thereof on the date of its incurrence or issuance, and will only be required to include the amount and type of such Indebtedness, Preferred Stock, or Disqualified Stock in one of the above clauses, although the Company may divide and classify an item of Indebtedness, Preferred Stock, or Disqualified Stock in one or more of the categories of Indebtedness, Preferred Stock, or Disqualified Stock described in such clauses.  The accrual of interest or dividends, the accretion

 

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of accreted value or amortization of original issue discount, and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms will not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.02.

 

(d)                                 Neither the Borrower or any of its Subsidiaries shall incur any Indebtedness if such Indebtedness is subordinate in right of payment to any other Indebtedness unless such Indebtedness is also subordinate in right of payment to the Loans (in the case of the Borrower) or the Subsidiary Guaranty (in the case of any Subsidiary Guarantor), in each case, to the same extent.

 

SECTION 7.03                                      Fundamental Changes.  (a)  Solely with respect to the Borrower, consolidate with or merge with or into any Person or permit any Person to merge with or into it, or sell, convey, transfer, lease or otherwise dispose of all or substantially all of its property and assets (as an entirety or substantially an entirety in one transaction or a series of related transactions) to any Person unless:

 

(i)                                     it shall be the continuing Person, or the Person (if other than it) formed by such consolidation or into which it is merged or that acquired or leased such property and assets (the “Surviving Person”) shall be organized and validly existing under the laws of the United States of America or any jurisdiction thereof and shall expressly assume all of the obligations of the Borrower under this Agreement and the other Loan Documents;

 

(ii)                                  each of the conditions specified in subsection (c) below is satisfied;

 

(iii)                               each Subsidiary Guarantor, unless such Subsidiary Guarantor is the Person with which the Borrower has entered into a transaction under this Section 7.03(a), shall have by amendment to the Subsidiary Guaranty confirmed that its guarantee under the Subsidiary Guaranty shall apply to the obligations of the Borrower or the Surviving Person in accordance with this Agreement and Loan Documents; and

 

(iv)                              the Liens in favor of the Collateral Agent on the Collateral remain in full force and effect following the consummation of such transaction and are expressly confirmed and ratified by the parties to such transaction.

 

(b)                                 Solely with respect to each Subsidiary of the Borrower, consolidate with or merge with or into any Person or permit any Person to merge with or into it, or sell, convey, transfer, lease or otherwise dispose of all or substantially all of its property and assets (as an entirety or substantially as an entirety in one transaction or a series of related transactions) to any Person, unless:

 

(i)                                     it shall be the continuing Person, or the Person (if other than it) formed by such consolidation or into which it is merged or that acquired or leased such property and assets shall expressly assume all of such Subsidiary Guarantor obligations under the Subsidiary Guaranty and confirm that such guarantee shall apply to the obligations of the Borrower in accordance with this Agreement and the Loan Documents;

 

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(ii)                                  each of the applicable conditions specified in paragraph (c) below is satisfied; and

 

(iii)                               the Liens in favor of the Collateral Agent on the Collateral remain in full force and effect following the consummation of such transaction and are expressly confirmed and ratified by the parties to such transaction.

 

The foregoing requirements of this subsection (b) shall not apply to (x) a consolidation or merger of any Subsidiary with and into the Borrower or any Subsidiary Guarantor, so long as the Borrower or such Subsidiary survives such consolidation or merger or (y) a sale or other disposition of all of the assets of a Subsidiary, by way of merger, consolidation or otherwise, if (x) the Borrower or any of its Subsidiaries applies the Net Cash Proceeds of that sale or other disposition in accordance with Section 2.03 or (y) to the Borrower or a Subsidiary (but in the case of the assets of a Subsidiary Guarantor, only to the Borrower or another Subsidiary Guarantor).

 

(c)                                  The following additional conditions shall apply to each transaction described in subsection (a) or (b) above:

 

(i)                                     immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

 

(ii)                                  the Borrower shall have delivered to the Administrative Agent an Officers’ Certificate and an opinion of counsel, each stating that such transaction and that all conditions precedent in this Agreement and the Loan Documents relating to such transaction have been satisfied; and

 

(iii)                               the Borrower shall have taken whatever additional action (including the recording of mortgages, the filing of UCC financing statements, the giving of notices and the endorsement of notices on title documents, execution of account control agreements or such other control agreements in form and substance reasonably satisfactory to the Collateral Agent) and obtained any necessary consents to assignments on assigned agreements) as may be necessary in the reasonable opinion of the Collateral Agent to vest in the Collateral Agent (or in any representative of the Collateral Agent designated by it) valid and subsisting Liens on the properties purported to be subject to the deeds of trust, trust deeds, deeds to secure debt and/or mortgages, leasehold mortgages or leasehold deeds of trust, supplements to the Security Agreement, supplements to the Intellectual Property Security Agreements and security and pledge agreements delivered pursuant to the Loan Documents, enforceable against all third parties (subject only to Permitted Liens), in all such cases to the same extent that such action was required to have been taken by such Subsidiary on the Closing Date.

 

SECTION 7.04                                      Limitations on Asset Sales.  (a)  Consummate an Asset Sale unless:

 

(i)                                     the Borrower or any of its Subsidiary, as the case may be, receives consideration at the time of the Asset Sale at least equal to the Fair Market Value of the assets or Capital Stock issued or sold or otherwise disposed of;

 

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(ii)                                  at least 50% of the consideration received in the Asset Sale by the Borrower or such Subsidiary is in the form of cash or Cash Equivalents; provided, however, that (x) the portion of such consideration that is not in the form of cash or Cash Equivalents shall be evidenced by promissory notes that are delivered to the Collateral Agent, together with instruments of transfer executed in blank to hold as Collateral and (y) for purposes of this Section 7.04, the Fair Market Value of each of the following will be deemed to be cash:

 

(A)                               solely in the case of any Asset Sale of assets other than Specified Collateral, any liabilities of the Borrower or any of its Subsidiaries that would otherwise be required to be included on the Borrower’s consolidated balance sheet (other than contingent liabilities and liabilities that are by their terms subordinated in right of payment of the Obligations of each Loan Party under the Loan Documents) that are assumed by the transferee of any such assets pursuant to a customary novation or assignment and assumption agreement that releases the Borrower or such Subsidiary from further liability;

 

(B)                               solely in the case of any Asset Sale of assets other than Specified Collateral, any securities, notes or other obligations received by the Borrower or any such Subsidiary from such transferee that are converted by the Borrower or such Subsidiary into cash or Cash Equivalents within 180 days of the receipt thereof, to the extent of the cash or Cash Equivalents received in that conversion; and

 

(C)                               any Replacement Assets (provided, that (x) if such Asset Sale constitutes a Primary Collateral Asset Sale, (A) to the extent the assets disposed of constitute Term Loan Primary Collateral, this clause (c) shall be limited to only Replacement Assets that simultaneously with the acquisition thereof will become Term Loan Primary Collateral or (B) to the extent the assets disposed of constitute Specified Collateral, this clause (c) shall be limited to only Replacement Assets constituting Specified Assets that simultaneously with the acquisition thereof will become Specified Collateral and (y) to the extent such Asset Sale includes any Collateral, such Asset Sale does not occur unless such Replacement Assets become Collateral prior to or simultaneously with the acquisition thereof and until and unless the provisions of Section 6.13 have otherwise been complied with respect to the Replacement Assets being received as consideration for the Asset Sale of such Collateral);

 

provided  further, however, that the 50% requirement referred to in this clause (ii) will not apply to any Asset Sale that is not a Primary Collateral Asset Sale if the cash or Cash Equivalents portion of the consideration received therefrom, determined in accordance with subclauses (A), (B) and (C) above, is equal to or greater than what the after-tax proceeds would have been had that Asset Sale complied with the aforementioned 50% limitation;

 

(iii)                               if such Asset Sale involves the disposition of ABL Primary Collateral, the proceeds are applied in accordance with the Intercreditor Agreement to the extent required therein;

 

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(iv)          in the event of a Primary Collateral Asset Sale, the Net Cash Proceeds corresponding to the Term Loan Primary Collateral sold shall be paid directly to the Collateral Agent for deposit into the Collateral Account which shall become part of the Term Loan Primary Collateral and be subject to the Term Loan First-Priority Lien in favor of the Secured Parties;

 

(v)           if such Asset Sale includes any issuance, sale or other disposition of any Capital Stock of any of the Borrower’s Subsidiaries, (A) such Asset Sale is of all Capital Stock of such Subsidiary and (B) any Investment by the Borrower or any of its Subsidiaries in such Person existing immediately after giving effect to such Asset Sale would have been permitted to be made pursuant to Sections 7.05 or 7.14 if made at such time; and

 

(vi)          if such Asset Sale is of the Facility located in Pekin, Illinois, obtain the approval of the Required Lenders, such consent not to be unreasonably withheld or delayed;

 

provided, however, that, in the case of any Asset Sale (other than a Primary Collateral Asset Sale), clauses (i) and (ii) above need not be satisfied (I) to the extent the Collateral to be released consists solely of ABL Primary Collateral with respect to which the required lenders under the Existing ABL Facility have given their consent and authorized the release of same or to the extent the ABL Primary Collateral to be released is disposed of by such agent on behalf of the lenders in connection with the exercise of rights or remedies under the Existing ABL Facility, in each case so long as (x) the Collateral Agent is required to release its lien thereon pursuant to the terms of the Intercreditor Agreement and (y) the proceeds therefrom are applied in accordance with the Intercreditor Agreement or (II) to the extent such Asset Sale results from the loss, destruction, damage, condemnation, confiscation, requisition, seizure, forfeiture or taking of title to or use of ABL Primary Collateral.

 

(b)           Within twelve (12) months after the date the Borrower or any of its Subsidiaries actually receives any Net Cash Proceeds from an Asset Sale (except for any Net Cash Proceeds (i) applied for general working capital purposes as and to the extent permitted pursuant to Section 2.03(b)(ii)(x) or (ii) required to be applied to prepayment of Term Loans pursuant to Section 2.03(b)(ii)(y)), the Borrower may, or may cause such Subsidiary to, apply those Net Cash Proceeds, at its option:

 

(i)            to (A) acquire Replacement Assets for existing Facilities, (B) enter into a binding commitment to acquire Replacement Assets for existing Facilities and such Net Cash Proceeds have actually been applied to the purchase of such Replacement Assets for existing Facilities within six (6) months of the date on which such binding commitment was entered into (provided that (x) if such Asset Sale constitutes a Primary Collateral Asset Sale, (1) to the extent the assets disposed of constitute Term Loan Primary Collateral, such Replacement Assets shall be limited to only Replacement Assets that simultaneously with the acquisition thereof become Term Loan Primary Collateral or (2) to the extent the assets disposed of constitute Specified Collateral, such Replacement Assets shall be limited to only Replacement Assets constituting Specified Assets that simultaneously with the acquisition thereof become Specified Collateral and (y) to the 

 

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extent the assets that were the subject of such Asset Sale includes any Collateral, such Replacement Assets are not acquired unless such Replacement Assets become Collateral prior to or simultaneously with the acquisition thereof and until and unless the provisions of Section 6.13 have otherwise been complied with respect to such Replacement Assets) or (C) make Capital Expenditures for existing Facilities (or a combination of the foregoing);

 

(ii)           solely in the case of Net Cash Proceeds from any Asset Sale other than a Primary Collateral Asset Sale, to satisfy all mandatory repayment obligations under any Credit Facilities secured by the assets disposed of that arise by reason of such Asset Sale; or

 

(iii)          solely in the case of Net Cash Proceeds from any Asset Sale other than a Primary Collateral Asset Sale, to any combination of the actions set forth in the foregoing clauses (i) and (ii).

 

(c)           Unless and until any Net Cash Proceeds from a Primary Collateral Asset Sale (other than any Net Cash Proceeds applied for general working capital purposes as and to the extent permitted pursuant to Section 2.03(b)(ii)(x)) are finally applied as specified in the preceding paragraph or in accordance with Section 2.03(b)(ii), the Borrower shall cause such Net Cash Proceeds to be held by the Collateral Agent as cash or Cash Equivalents in the Collateral Account.

 

SECTION 7.05             Restricted Payments.  (a) Declare or pay any dividend or make any distribution on or with respect to its Capital Stock (other than (i) dividends or distributions payable solely in shares of its Capital Stock (other than Disqualified Stock) or in options, warrants or other rights to acquire shares of such Capital Stock and (ii) pro rata dividends or distributions on common stock of Subsidiaries held by minority stockholders) held by Persons other than the Borrower or any of its Subsidiaries, (b) purchase, call for redemption or redeem, retire or otherwise acquire for value any shares of Capital Stock of (A) the Borrower (including options, warrants or other rights to acquire such shares of Capital Stock) held by any Person or (B) any Subsidiary (other than any Wholly-Owned Subsidiary) (including options, warrants or other rights to acquire such shares of Capital Stock) or (c) make any voluntary or optional principal payment, or voluntary or optional redemption, repurchase, defeasance, or other acquisition or retirement for value, of Indebtedness of the Borrower that is subordinated in right of payment to the Term Loans or any Indebtedness of a Subsidiary that is subordinated in right of payment to such Subsidiary Guarantor’s Guarantee under the Collateral Documents (other than any intercompany Indebtedness owed to the Borrower or any of its Subsidiaries) (such payments or any other actions described in clauses (a) through (c) above being collectively “Restricted Payments”), except as provided in the next paragraph.

 

The foregoing shall not be violated by reason of:

 

(A)          payment in cash to holders of the Borrower’s common stock in lieu of fractional shares in connection with the reverse stock split contemplated in the Equity Documents;

 

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(B)          [intentionally omitted];

 

(C)          the making of any principal payment or the repurchase, redemption, retirement, defeasance or other acquisition or retirement for value of Indebtedness that is subordinated in right of payment to the Term Loans and the Subsidiary Guaranty including premium, if any, and accrued interest, with the proceeds of, or in exchange for, Indebtedness incurred under Section 7.02(a)(xv);

 

(D)          the repurchase, redemption or other acquisition of Capital Stock of the Borrower or any Subsidiary (or options, warrants or other rights to acquire such Capital Stock) in exchange for, or out of the proceeds of a capital contribution or a substantially concurrent offering of, shares of Capital Stock (other than Disqualified Stock) of the Borrower (or options, warrants or other rights to acquire such Capital Stock); provided that such options, warrants or other rights are not redeemable at the option of the holder, or required to be redeemed, prior to the Maturity Date of the Term Loans;

 

(E)           the making of any principal payment or the repurchase, redemption, retirement, defeasance or other acquisition or retirement for value of Indebtedness (including premium, if any, and accrued interest) which is subordinated in right of payment to the Term Loans or any Subsidiary Guaranty in exchange for, or out of the proceeds of a capital contribution or a substantially concurrent offering of, shares of the Capital Stock (other than Disqualified Stock) of the Borrower (or options, warrants or other rights to acquire such Capital Stock); provided that such options, warrants or other rights are not redeemable at the option of the holder, or required to be redeemed, prior to the Maturity Date of the Term Loans;

 

(F)           payments or distributions, to dissenting stockholders pursuant to Applicable Law, pursuant to or in connection with a consolidation, merger or transfer of assets of the Borrower that complies with the provisions of Section 7.03;

 

(G)          the repurchase of Capital Stock deemed to occur upon the exercise of options or warrants if such Capital Stock represents all or a portion of the exercise price thereof;

 

(H)          the repurchase or other acquisition of Capital Stock of the Borrower or any of its Subsidiaries from employees, former employees, directors or former directors of the Borrower or any of its Subsidiaries (or permitted transferees of such employees, former employees, directors or former directors), pursuant to the terms of the agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Directors under which such individuals purchase or sell, or are granted the option to purchase or sell, such Capital Stock; provided, however, that the aggregate amount of such repurchases and other acquisitions shall not exceed the sum of (1) $1,500,000 in 

 

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any calendar year and (2) an additional $1,500,000 during the period between the Closing Date and the final Maturity Date;

 

(I)            dividends paid in respect of Disqualified Stock or Preferred Stock of the Borrower or any Subsidiary of the Borrower which is permitted to be issued pursuant to Section 7.02; provided, however, that the aggregate amount of dividends paid in respect of Preferred Stock of the Borrower (other than Disqualified Stock of the Borrower) pursuant to this clause (I) shall not exceed the amount of Net Cash Proceeds from the issuance of such Preferred Stock;

 

(J)            the withholding pursuant to the Management Incentive Plan of amounts of common stock from the vested portion of restricted stock awards in an amount equal to withholding obligations; and

 

(K)          change of control payments calculated in accordance with the Warrant Agreement paid to the holders of the Warrants to the extent such Warrants could be exercised at such time, provided that (x) no Change of Control, other than a Permitted Change of Control, has occurred hereunder unless all Obligations are paid in full prior to such payments and (y) any such payments made prior to payment in full of the Obligations shall be made solely from the proceeds of the issuance of new Equity Interests (other than Preferred Stock) or other equity contributions to the Borrower and shall not be made with the proceeds of any Collateral;

 

provided that, except in the case of clause  (D), no Default or Event of Default shall have occurred and be continuing or occur as a consequence of the actions or payments set forth therein.

 

For purposes of determining compliance with this Section 7.05, (x) the amount, if other than in cash, of any Restricted Payment shall be determined in good faith by the Board of Directors, whose determination shall be conclusive and evidenced by a Board Resolution and (y) in the event that a Restricted Payment meets the criteria of more than one of the types of Restricted Payments described in the above clauses, including the first paragraph of this Section 7.05, the Borrower, in its sole discretion, may order and classify, and from time to time may reclassify, all or any portion of such Restricted Payment if it would have been permitted at the time such Restricted Payment was made and at the time of such reclassification.

 

Not later than the date of making any Restricted Payment, the Borrower shall deliver to the Administrative Agent an Officers’ Certificate stating that such Restricted Payment complies with this Agreement and setting forth in reasonable detail the basis upon which the required calculations were computed, which calculations may be based upon the Borrower’s latest available internal quarterly financial statements.

 

SECTION 7.06             Change in Nature of Business.  (i) Engage in any business other than a Permitted Business, except to such extent as would not be material to the Borrower and its Subsidiaries taken as a whole, (ii) acquire any new Facility or (iii) acquire all or substantially all of the assets or the Capital Stock of another Person other than a Subsidiary.

 

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SECTION 7.07             Transactions with Affiliates.  Enter into, renew or extend any transaction (including, without limitation, the purchase, sale, lease or exchange of property or assets, or the rendering of any service) with any holder (or any Affiliate of such holder) of 10% or more of any class of Capital Stock of the Borrower or with any Affiliate of the Borrower, except upon fair and reasonable terms no less favorable to the Borrower or such Subsidiary than could be obtained, at the time of such transaction or, if such transaction is pursuant to a written agreement, at the time of the execution of the agreement providing therefor, in a comparable arm’s length transaction with a Person that is not such a holder or an Affiliate.  The foregoing restrictions shall not apply to the following:

 

(a)           transactions (i) approved by a majority of the disinterested members of the Board of Directors or (ii) for which the Borrower or a Subsidiary delivers to the Administrative Agent a written opinion of a nationally recognized investment banking, accounting, valuation or appraisal firm stating that the transaction is fair to the Borrower or such Subsidiary from a financial point of view;

 

(b)           any transaction solely between the Borrower and any of its Subsidiaries or solely among Subsidiaries;

 

(c)           the payment of compensation (including awards or grants in cash, securities or other payments) for the personal services of, and expense reimbursement and indemnity provided on behalf of, officers, directors (including the payment of, or an agreement providing for the payment of, reasonable directors’ fees), consultants and employees of the Borrower or any of its Subsidiaries, in each case in the ordinary course of business;

 

(d)           any payments or other transactions pursuant to any tax-sharing agreement between the Borrower and any other Person with which the Borrower files a consolidated tax return or with which the Borrower is part of a consolidated group for tax purposes;

 

(e)           any sale of shares of Capital Stock (other than Disqualified Stock) of the Borrower;

 

(f)            any Investments or any Restricted Payments not prohibited by Section 7.05;

 

(g)           the Transactions in accordance with the Transaction Documents and other agreements set forth on Schedule 7.07(g) as in effect as of the Closing Date or any amendment thereto or any transaction contemplated thereby (including pursuant to any amendment thereto) in any replacement agreement thereto so long as any such amendment or replacement agreement is not more disadvantageous to the Lenders in any material respect than the original agreement as in effect on the Closing Date;

 

(h)           the issuance of securities or other payments, awards or grants in cash, securities or otherwise pursuant to or the funding of, employment arrangements, stock options and stock ownership plans or similar employee benefit plans approved by the Board of Directors in good faith and loans to employees of the Borrower and its Subsidiaries which are approved by the Board of Directors in good faith;

 

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(i)            transactions with customers, clients, suppliers, or purchasers or sellers of goods or services, in each case on ordinary business terms and otherwise in compliance with the terms of this Agreement, which are fair to the Borrower or its Subsidiaries, in the reasonable determination of the Board of Directors of the Borrower or the senior management thereof, or are on terms at least as favorable as could reasonably have been obtained at such time from an unaffiliated party;

 

(j)            any transaction with a joint venture or similar entity which would be subject to this covenant solely because the Borrower or a Subsidiary of the Borrower owns an equity interest in or otherwise controls such joint venture or similar entity; or

 

(k)           payments and transactions in connection with any Credit Facilities (including commitment, syndication and arrangement fees payable thereunder) and this Agreement (including upfront, syndicate and arrangement fees payable in connection therewith), and the application of the proceeds of each, and the payment of fees and expenses with respect thereto.

 

Notwithstanding the foregoing, any transaction or series of related transactions covered by the first paragraph of this Section 7.07 and not covered by clauses (b) through (l), (A) the aggregate amount of which exceeds $5,000,000 in value, must be approved or determined to be fair in the manner provided for in clause (a)(i) or (a)(ii) above and (B) the aggregate amount of which exceeds $15,000,000 in value must be determined to be fair in the manner provided for in clause (a)(ii) above.

 

SECTION 7.08             Financial Covenants.  (a)  Minimum Liquidity.  Permit Liquidity to be less than $5,000,000 on the Closing Date and for a period of five (5) consecutive Business Days thereafter at any time.

 

SECTION 7.09             [Reserved].

 

SECTION 7.10             Accounting Changes.  Make any change in (a) its accounting policies or reporting practices, except as required or permitted by GAAP, or (b) its fiscal year.

 

SECTION 7.11             Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries.  Create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Subsidiary to (a) pay dividends or make any other distributions permitted by Applicable Law on any Capital Stock of such Subsidiary owned by the Borrower or any other Subsidiary, (b) pay any Indebtedness owed to the Borrower or any other Subsidiary, (c) make loans or advances to the Borrower or any other Subsidiary or (d) transfer any of its property or assets to the Borrower or any other Subsidiary; provided, however, that the foregoing clause shall not apply to encumbrances and restrictions:

 

(a)           existing on the Closing Date (including pursuant to the Existing ABL Facility and the Equity Documents), and any extensions, refinancings, renewals or replacements thereof; provided that the encumbrances and restrictions in any such extensions, refinancings, renewals or replacements taken as a whole are, in the good faith judgment of the Board of Directors, no less favorable in any material respect to the 

 

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Lenders than those encumbrances or restrictions that are then in effect and that are being extended, refinanced, renewed or replaced;

 

(b)           existing under or by reason of Applicable Law;

 

(c)           existing with respect to any Person or the property or assets of such Person acquired by the Borrower or any Subsidiary, existing at the time of such acquisition and not incurred in contemplation thereof, which encumbrances or restrictions are not applicable to any Person or the property or assets of any Person other than such Person or the property or assets of such Person so acquired and any extensions, refinancings, renewals or replacements thereof; provided that the encumbrances and restrictions in any such extensions, refinancings, renewals or replacements taken as a whole are, in the good faith judgment of the Board of Directors, no less favorable in any material respect to the Lenders than those encumbrances or restrictions that are then in effect and that are being extended, refinanced, renewed or replaced;

 

(d)           in the case of clause (d) of the first paragraph of this Section 7.11:

 

(i)            that restrict in a customary manner the subletting, assignment or transfer of any property or asset that is a lease, license, conveyance or contract or similar property or asset,

 

(ii)           existing by virtue of any transfer of, agreement to transfer, option or right with respect to, or Lien on, any property or assets of the Borrower or any Subsidiary not otherwise prohibited by this Agreement,

 

(iii)          arising or agreed to in the ordinary course of business, not relating to any Indebtedness, and that do not, individually or in the aggregate, detract from the value of property or assets of the Borrower or any Subsidiary in any manner material to the Borrower or any Subsidiary, or

 

(iv)          arising under purchase money obligations for property acquired in the ordinary course of business or Capitalized Lease Obligations;

 

(e)           with respect to a Subsidiary and imposed pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock of, or property and assets of, such Subsidiary;

 

(f)            arising from customary provisions in joint venture agreements, asset sale agreements, limited liability company organizational documents, sale-leaseback agreements, stock sale agreements, stockholder agreements and other similar agreements entered into in the ordinary course of business;

 

(g)           on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

 

(h)           arising in connection with any Indebtedness, Disqualified Stock or Preferred Stock of the Borrower or any Subsidiary of the Borrower permitted to be 

 

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incurred subsequent to the date of the Closing Date pursuant to the provisions of Section 7.02; and

 

(i)            restrictions on cash or other deposits or net worth imposed by suppliers, landlords or customers or required by insurance, surety or bonding companies, in each case under contracts entered into in the ordinary course of business.

 

Nothing contained in this Section 7.11 shall prevent the Borrower or any Subsidiary from (a) creating, incurring, assuming or suffering to exist any Liens otherwise permitted under Section 7.01 or (b) restricting the sale or other disposition of property or assets of the Borrower or any of its Subsidiaries that secure Indebtedness of the Borrower or any of its Subsidiaries.

 

SECTION 7.12             Limitation on the Issuance and Sale of Capital Stock of Subsidiaries.  Issue or sell, directly or indirectly, any shares of Capital Stock of a Subsidiary (including options, warrants or other rights to purchase shares of such Capital Stock) except:

 

(a)           to the Borrower or a Wholly Owned Subsidiary;

 

(b)           issuances of director’s qualifying shares or sales to foreign nationals of shares of Capital Stock of foreign Subsidiaries, to the extent required by Applicable Law;

 

(c)           except in the case of a Subsidiary Guarantor, if, immediately after giving effect to such issuance or sale, such Subsidiary would no longer constitute a Subsidiary and any Investment in such Person remaining after giving effect to such issuance or sale would have been permitted to be made under Section 7.05 if made on the date of such issuance or sale;

 

(d)           sales of common stock (including options, warrants or other rights to purchase shares of such common stock) of a Subsidiary by the Borrower or a Subsidiary, provided that the Borrower or such Subsidiary applies the Net Cash Proceeds of any such sale in accordance with Sections 2.03(b)(ii) and 7.04(b); and

 

(e)           the New Equity Issuance, the issuance of the Warrants and shares of common stock upon exercise of the Warrants, the issuance of Stock Equivalents pursuant to the Management Incentive Plan and the issuance of common stock pursuant to such Stock Equivalents.

 

SECTION 7.13             Limitation on Sale and Leaseback Transactions.  Enter into any Sale and Leaseback Transaction involving any of its assets or properties whether now owned or hereafter acquired; provided, however, that the Borrower or any Subsidiary may enter into a Sale and Leaseback Transaction if:

 

(a)           the consideration received in such Sale and Leaseback Transaction is at least equal to the Fair Market Value of the property so sold or otherwise transferred, as determined by a resolution of the Board of Directors;

 

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(b)           the Borrower or such Subsidiary, as applicable, would be permitted to grant a Lien to secure Indebtedness under Section 7.01 in the amount of the Attributable Debt in respect of such Sale and Leaseback Transaction;

 

(c)           prior to and after giving effect to the Attributable Debt in respect of such Sale and Leaseback Transaction, the Borrower and such Subsidiary comply with Section 7.02; and

 

(d)           the Borrower or such Subsidiary applies an amount not less than the net proceeds received from such sale in accordance with Section 2.03.

 

SECTION 7.14             Investments.  Make any Investment, other (i) than a Permitted Investment, in any Person and (ii) Investments made with sums which, if distributed, would constitute permitted Restricted Payments under Section 7.05.

 

SECTION 7.15             Hedging Agreements.  Enter into any Hedging Agreements other than in the ordinary course of business, directly or indirectly, to hedge commodity prices (including both inputs and outputs), currency or interest rate risks and other business risks, in each case, solely to the extent permitted under Sections 7.01 (to the extent such Hedging Agreement is secured) and 7.02 and reasonably related to the Borrower’s and its Subsidiaries’ projected activities and consistent with prudent industry practices.

 

SECTION 7.16             Amendments of Certain Documents.  The Borrower shall not (and shall cause each of its Subsidiaries to not), directly or indirectly, without the prior written consent of the Required Lender, (x) amend, modify, or change any of the terms or provisions of the Existing ABL Facility or any “Loan Document” (as defined therein) in any manner that is not permitted by the terms of the Intercreditor Agreement or (y) amend, waive or otherwise modify, or surrender any rights, or increase the obligations, of the Borrower or such Subsidiary, respectively, under the Indiana Port Lease Agreement (or any agreements entered into in accordance therewith), unless the terms of the Indiana Port Lease Agreement (or any such agreements entered into in accordance therewith), as so amended, waived or modified, or the rights and obligations of the Borrower and its Subsidiaries established thereunder after giving effect to such surrender or increase, as applicable, are not materially less favorable to the Secured Parties as those contained in the Indiana Port Lease Agreement (or any such agreements entered into in accordance therewith), immediately before such amendment, waiver, modification or as those rights and obligations established thereunder immediately before such surrender or increase.

 

ARTICLE VIII

 

EVENTS OF DEFAULT AND REMEDIES

 

SECTION 8.01             Events of Default.  Any of the following shall constitute an Event of Default:

 

(a)           Non-Payment.  The Borrower fails to pay (i) when and as required to be paid herein, any amount of principal of any Term Loan or (ii) within five (5) days after 

 

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the same becomes due, any interest on any Loan, any fee due hereunder or any other amount payable hereunder or under any other Loan Document; or

 

(b)           Specific Covenants.  (i) The Borrower fails to perform or observe any term, covenant or agreement contained in any of Section 6.03(a), Section 6.03(b),  Section 6.03(f), Section 6.05 (with respect to the Borrower’s existence), Section 6.11, Section 6.12, Section 6.13, Section 6.16, Section 6.17 or Article VII, (ii) any of the Subsidiary Guarantors fails to perform or observe any term, covenant or agreement contained in Section 8  of the Subsidiary Guaranty (but only to the extent it relates to a default under one of the covenants listed in clause (i) above) or (iii) any of the Loan Parties fails to perform or observe any term, covenant or agreement contained in Article IV of the Security Agreement; or

 

(c)           Other Defaults.  Any Loan Party fails to perform or observe any other covenant or agreement (not specified in Section 8.01(a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for thirty (30) days; or

 

(d)           Representations and Warranties.  Any representation or warranty made or deemed made by the Borrower or any of its Subsidiaries in this Agreement, any other Loan Document or any related agreement or in any certificate, document or financial or other statement furnished at any time in connection herewith or therewith shall prove to have been misleading in any material respect on the date when made or deemed to have been made; or

 

(e)           Cross-Default.  There occurs with respect to any Indebtedness of the Borrower or any of its Subsidiaries, whether such Indebtedness now exists or shall hereafter be created, (i) an event of default that has caused the lender or holder thereof to declare, or permitted the lender or holder thereof to declare, such Indebtedness to be due and payable prior to its Stated Maturity and such event of default has not been cured or waived within thirty (30) days or such Indebtedness has been accelerated (ii) except as provided in clause (iii) below, the failure to make a principal payment (after giving effect to any applicable grace period provided in such Indebtedness) and such defaulted payment shall not have been made, waived or extended within thirty (30) days of such payment default or (iii) the failure to make a principal payment at the final (but not any interim) fixed maturity; provided that the foregoing shall only apply to the extent such event of default or failure to pay related to (a) Indebtedness outstanding in an aggregate principal amount of $10,000,000 or more or (b) any Contractual Obligations evidencing Indebtedness (whether funded or unfunded), which, if fully funded, would be equal or exceed $10,000,000; or

 

(f)            Insolvency Proceedings, Etc.  A court having jurisdiction in the premises enters a decree or order for (i) relief in respect of the Borrower or any of its Subsidiaries in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, (ii) appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Borrower or any of its Subsidiaries or for all or substantially all of the property and assets of the Borrower or any of its Subsidiaries or

 

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(iii) the winding up or liquidation of the affairs of the Borrower or any of its Subsidiaries and, in each case, such decree or order shall remain unstayed and in effect for a period of thirty (30) consecutive days; or

 

(g)                                  Inability to Pay Debts; Attachment.  The Borrower or any of its Subsidiaries (i) commences a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law, (ii) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Borrower or any of its Subsidiaries or for all or substantially all of the property and assets of the Borrower or any of its Subsidiaries or (iii) effects any general assignment for the benefit of creditors; or

 

(h)                                 Judgments.  Any final judgment or order (not covered by insurance as to which the insurance carrier has acknowledged coverage in writing) for the payment of money in excess of $10,000,000 in the aggregate for all such final judgments or orders against all such Persons (treating any deductibles, self-insurance or retention as not so covered) shall be rendered against the Borrower or any of its Subsidiaries and shall not be paid or discharged, and there shall be any period of thirty (30) consecutive days following entry of the final judgment or order that causes the aggregate amount for all such final judgments or orders outstanding and not paid or discharged against all such Persons to exceed $10,000,000 during which a stay of enforcement of such final judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

 

(i)                                     ERISA.  An event or condition specified in Section 6.03(c) or Section 6.14 hereof shall occur or exist with respect to any Plan and, as a result of such event or condition, together with all other such events or conditions, the Borrower, any of its Subsidiaries or any member of the Controlled Group shall incur, or in the opinion of Administrative Agent be reasonably likely to incur, a liability to a Plan or the PBGC (or both) which could reasonably be expected to have a Material Adverse Effect; or

 

(j)                                    Invalidity of Loan Documents.  Any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder (or as waived by the Lenders in accordance with Section 10.01) or satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan Party or any other Person contests in any manner the validity or enforceability of any Loan Document; or any Loan Party denies that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any Loan Document; or

 

(k)                                 Change of Control.  There occurs any Change of Control other than a Permitted Change of Control; or

 

(l)                                     Collateral Documents.  Any Collateral Document after delivery thereof pursuant to Section 4.01 or 6.13 shall for any reason (other than pursuant to the terms hereof or thereof, including as a result of a transaction permitted by Section 7.03 cease to create a valid and perfected Lien, with the priority required hereby or thereby (subject to Liens permitted by Section 7.01), on the Collateral purported to be covered thereby,

 

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except to the extent that any such loss of perfection or priority results from the failure of the Collateral Agent to maintain possession of certificates actually delivered to it representing securities pledged under the Collateral Documents or to file UCC continuation statements and except as to Collateral consisting of real property to the extent that such losses are covered by a lender’s title insurance policy and such insurer has not denied or failed to acknowledge coverage.

 

SECTION 8.02                                      Remedies Upon Event of Default.  If any Event of Default occurs and is continuing, the Administrative Agent may, and at the request of the Required Lenders shall, take any or all of the following actions:

 

(a)                                 declare the commitment of each Lender to make Term Loans to be terminated, whereupon such commitments and obligation shall be terminated; and

 

(b)                                 declare the unpaid principal amount of all outstanding Term Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower;

 

provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Debtor Relief Laws of the United States, the obligation of each Lender to make Loans shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, in each case without further act of the Administrative Agent or any Lender.

 

SECTION 8.03                                      Application of Funds.  After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order:

 

First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Agents and amounts payable under Article III) payable to each of the Agents in their capacities as such;

 

Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Term Loan A Lenders and New Lenders (including the Exit Fee and fees, charges and disbursements of counsel to the respective Term Loan A Lenders and New Lenders (including fees for attorneys who may be employees of any Term Loan A Lender or New Lender)) and amounts payable under Article III, ratably among them in proportion to the respective amounts described in this clause Second payable to them;

 

Third, to payment of that portion of the Obligations constituting accrued and unpaid interest on (x) the Term Loan A (including interest accrued on the Closing Fee) and (y) all New Term Loans, and other Term Loan A Obligations and Obligations in respect of New Term Loans (other than principal), ratably among the Term Loan A

 

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Lenders and New Lenders, in proportion to the respective amounts described in this clause Third payable to them;

 

Fourth, to payment of that portion of the principal of the Term Loan A constituting the Closing Fee, ratably among the Term Loan A Lenders in proportion to the respective amounts described in this clause Fourth held by them;

 

Fifth, to payment of that portion of the Obligations constituting the remaining unpaid principal of the Term Loan A, all New Term Loans, Obligations under Secured Cash Management Agreements and Obligations under Secured Hedge Agreements, ratably among the Term Loan A Lenders, the New Lenders, the Cash Management Banks and the Hedge Banks, in proportion to the respective amounts described in this clause Fifth held by them;

 

Sixth, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Term Loan B Lenders (including fees, charges and disbursements of counsel to the respective Term Loan B Lenders (including fees for attorneys who may be employees of any Term Loan B Lender) and amounts payable under Article III, ratably among them in proportion to the respective amounts described in this clause Sixth payable to them;

 

Seventh, to payment of that portion of the Obligations constituting accrued and unpaid and uncapitalized interest on the Term Loan B (including uncapitalized interest on the PIK Interest Amounts) and other Obligations (other than principal), ratably among the Term Loan B Lenders, in proportion to the respective amounts described in this clause Seventh payable to them;

 

Eighth, to payment of that portion of the principal of the Term Loan B constituting PIK Interest Amounts, ratably among the Term Loan B Lenders in proportion to the respective amounts described in this clause Eighth held by them;

 

Ninth, to payment of that portion of the Obligations constituting the remaining unpaid principal of the Term Loan B, ratably among the Term Loan B Lenders in proportion to the respective amounts described in this clause Ninth held by them; and

 

Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Applicable Law.

 

ARTICLE IX

 

AGENTS

 

SECTION 9.01                                      Appointment and Authority.  (a)  Each of the Lenders hereby irrevocably appoints Citibank, N.A. to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its and the other Secured Parties’ behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.  The provisions of this Article are solely for the

 

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benefit of the Administrative Agent and the other Secured Parties, and neither the Borrower nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions.

 

(b)                                 The Administrative Agent shall also act as the Collateral Agent under the Loan Documents, and each of the Lenders (in its capacities as a Lender and potential Cash Management Bank) hereby irrevocably appoints and authorizes Citibank, N.A. to act as the collateral agent of such Lender for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto.  In this connection, the Collateral Agent and any co-agents, sub-agents and attorneys-in-fact appointed by the Collateral Agent pursuant to Section 9.05 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent), shall be entitled to the benefits of all provisions of this Article IX and Article X (including Section 10.04(c), as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.

 

SECTION 9.02                                      Rights as a Lender.  (a)  The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity.  Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

 

(b)                                 Each Lender understands that the Person serving as Administrative Agent, acting in its individual capacity, and its Affiliates (collectively, the “Agent’s Group”) are engaged in a wide range of financial services and businesses (including investment management, financing, securities trading, corporate and investment banking and research) (such services and businesses are collectively referred to in this Section 9.02(b) as “Activities”) and may engage in the Activities with or on behalf of one or more of the Loan Parties or their respective Affiliates.  Furthermore, the Agent’s Group may, in undertaking the Activities, engage in trading in financial products or undertake other investment businesses for its own account or on behalf of others (including the Loan Parties and their Affiliates and including holding, for its own account or on behalf of others, equity, debt and similar positions in the Borrower, another Loan Party or their respective Affiliates), including trading in or holding long, short or derivative positions in securities, loans or other financial products of one or more of the Loan Parties or their Affiliates.  Each Lender understands and agrees that in engaging in the Activities, the Agent’s Group may receive or otherwise obtain information concerning the Loan Parties or their Affiliates (including information concerning the ability of the Loan Parties to perform their respective Obligations hereunder and under the other Loan Documents) which information may not be available to any of the Lenders that are not members of the Agent’s Group.  None of the Administrative Agent nor any member of the Agent’s Group shall have any duty to disclose to any Lender or use on behalf of the Lender, and shall not be liable for the failure to so disclose or use, any information

 

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whatsoever about or derived from the Activities or otherwise (including any information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any Loan Party or any Affiliate of any Loan Party) or to account for any revenue or profits obtained in connection with the Activities, except that the Administrative Agent shall deliver or otherwise make available to each Lender such documents as are expressly required by any Loan Document to be transmitted by the Administrative Agent to the Lenders.

 

(c)                                  Each Lender further understands that there may be situations where members of the Agent’s Group or their respective customers (including the Loan Parties and their Affiliates) either now have or may in the future have interests or take actions that may conflict with the interests of any one or more of the Lenders (including the interests of the Lenders hereunder and under the other Loan Documents).  Each Lender agrees that no member of the Agent’s Group is or shall be required to restrict its activities as a result of the Person serving as Administrative Agent being a member of the Agent’s Group, and that each member of the Agent’s Group may undertake any Activities without further consultation with or notification to any Lender.  None of (i) this Agreement nor any other Loan Document, (ii) the receipt by the Agent’s Group of information (including Information) concerning the Loan Parties or their Affiliates (including information concerning the ability of the Loan Parties to perform their respective Obligations hereunder and under the other Loan Documents) nor (iii) any other matter shall give rise to any fiduciary, equitable or contractual duties (including without limitation any duty of trust or confidence) owing by the Administrative Agent or any member of the Agent’s Group to any Lender including any such duty that would prevent or restrict the Agent’s Group from acting on behalf of customers (including the Loan Parties or their Affiliates) or for its own account.

 

SECTION 9.03                                      Exculpatory Provisions.  The duties of the Agents hereunder and under the other Loan Documents are solely ministerial and administrative in nature and no Agent shall have any duties or obligations except those expressly set forth herein and in the other Loan Documents.  Without limiting the generality of the foregoing, no Agent:

 

(a)                                 shall be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

 

(b)                                 shall have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that such Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided, that no Agent shall be required to take any action that, in its opinion or the opinion of its counsel, may expose such Agent to liability or that is contrary to any Loan Document or Applicable Law; and

 

(c)                                  shall, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and no Agent shall be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent, Collateral Agent or any of their respective Affiliates in any capacity.

 

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No Agent shall be liable for any action taken or not taken by it (a) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as such Agent shall believe in good faith shall be necessary, under the circumstances as provided in Section 10.01 and Section 8.02) or (b) in the absence of its own gross negligence or willful misconduct.  Each of the Administrative Agent and the Collateral Agent shall be deemed not to have knowledge of any Default or the event or events that give or may give rise to any Default unless and until notice describing such Default is given to such Agent by the Borrower or a Lender.

 

No Agent shall be responsible for or have any duty to ascertain or inquire into (a) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (b) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith or the adequacy, accuracy and/or completeness of the information contained therein, (c) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (d) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (e) the value or the sufficiency of any Collateral, or (f) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than (but subject to the foregoing clause (b)) to confirm receipt of items expressly required to be delivered to such Agent.

 

Nothing in this Agreement or any other Loan Document shall require the Administrative Agent or any of its Related Parties to carry out any “know your customer” or other checks in relation to any person on behalf of any Lender and each Lender confirms to the Administrative Agent that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Administrative Agent or any of its Related Parties.

 

Notwithstanding any provision contained in this Agreement or any other Loan Document providing for any action by any Agent in its reasonable discretion or approval of any action or matter in such Agent’s reasonable satisfaction, such Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that such Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided, that, no Agent shall be required to take any action that, in its opinion or the opinion of its counsel, may expose such Agent to liability or that is contrary to any Loan Document or Applicable Law.  The Administrative Agent shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower, any other Loan Party or any of their respective Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent, Collateral Agent or any other Agent in any capacity.

 

SECTION 9.04                                      Reliance by Administrative Agent and Collateral Agent.  Each of the Administrative Agent and the Collateral Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement,

 

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instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person.  Each of the Administrative Agent and Collateral Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon.  In determining compliance with any condition hereunder to the making of a Term Loan that by its terms must be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Term Loan.  The Agents may consult with legal counsel, independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by such Agent in accordance with the advice of any such counsel, accountants or experts.

 

SECTION 9.05                                      Delegation of Duties.  Each Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by such Agent.  The Administrative Agent, Collateral Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties.  The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and Collateral Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent or the Collateral Agent.

 

SECTION 9.06                                      Resignation of Administrative Agent and Collateral Agent.  Each Agent may at any time give notice of its resignation to the Lenders and the Borrower.  Upon receipt of any such notice of resignation, the Required Lenders shall have the right, with the approval of the Borrower (such approval not to be unreasonably withheld), to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States.  If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Agent gives notice of its resignation, then the retiring Agent may on behalf of the Lenders appoint a successor Agent meeting the qualifications set forth above; provided, that if the Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by such Agent on behalf of the Lenders under any of the Loan Documents, the retiring Agent shall continue to hold such collateral security until such time as a successor Agent is appointed) and (b) all payments, communications and determinations provided to be made by, to or through the Agent shall instead be made by or to each Lender directly, until such time as the Required Lenders appoint a successor Agent as provided for above in this Section.  Upon the acceptance of a successor’s appointment as Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Agent, and the retiring Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section).  The fees payable by the Borrower to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor.

 

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After the retiring Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Agent was acting as Agent.

 

SECTION 9.07                                      Non-Reliance on Agents and Other Lenders.  Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent, the Collateral Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent, the Collateral Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

 

SECTION 9.08                                      [Intentionally Omitted].

 

SECTION 9.09                                      Administrative Agent May File Proofs of Claim.  In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Term Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:

 

(a)                                 to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Term Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Sections 2.08 and Section 10.04) allowed in such judicial proceeding; and

 

(b)                                 to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.08 and Section 10.04.

 

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Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender to authorize the Administrative Agent to vote in respect of the claim of any Lender or in any such proceeding.

 

SECTION 9.10                                      Collateral and Guarantee Matters.  The Lenders irrevocably authorize the Administrative Agent, at its option and in its discretion,

 

(a)                                 to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (i) upon termination of the Aggregate Commitments and payment in full of all Obligations (other than contingent indemnification obligations), (ii) that is sold or to be sold as part of or in connection with any sale permitted hereunder or under any other Loan Document, or (iii) if approved, authorized or ratified in writing in accordance with Section 10.01; and

 

(b)                                 to release any Subsidiary Guarantor from its obligations under the Subsidiary Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder.

 

Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release any Lien or subordinate its interest in particular types or items of property, or to release any Subsidiary Guarantor from its obligations under the Subsidiary Guaranty pursuant to this Section 9.10.  In each case as specified in this Section 9.10, the Administrative Agent will, at the Borrower’s expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents or to subordinate its interest in such item, or to release such Subsidiary Guarantor from its obligations under the Guarantee, in each case in accordance with the terms of the Loan Documents and this Section 9.10.

 

SECTION 9.11                                      Indemnification.  If the IRS or any other Governmental Authority of the United States or other jurisdiction asserts a claim that the Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender due to a failure on the part of such Lender (because the appropriate form was not delivered, was not properly executed, or because such Lender failed to notify the Administrative Agent of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason), such Lender shall indemnify and hold the Administrative Agent harmless for all amounts paid, directly or indirectly, by the Administrative Agent, as tax or otherwise, including penalties and interest, and including any taxes imposed by any jurisdiction on the amounts payable to the Administrative Agent under this Section 9.11, together with all costs and expenses (including attorneys fees and expenses).  The obligation of the Lenders under this subsection shall survive the payment of all Obligations hereunder and the resignation or replacement of the Administrative Agent.

 

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ARTICLE X

 

MISCELLANEOUS

 

SECTION 10.01                               Amendments, Etc.  No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrower or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:

 

(a)                                 extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02) without the written consent of each Lender (other than pursuant to Section 2.10 or 2.11);

 

(b)                                 postpone any date fixed by this Agreement or any other Loan Document for any payment or mandatory prepayment of principal, interest, fees or other amounts due to the Lenders (or any of them) or any mandatory reduction of the Aggregate Commitments hereunder without the written consent of each Lender directly adversely affected thereby;

 

(c)                                  reduce the principal of, or the stated rate of interest specified herein on, any Term Loan, any fees or other amounts payable hereunder (including pursuant to Section 2.03(a)) without the written consent of each Lender entitled to such amount; provided, however, that only the consent of the Required Lenders shall be necessary (i) to amend the definition of “Default Rate” or to waive any obligation of the Borrower to pay interest at the Default Rate or (ii) to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Term Loan or to reduce any fee payable hereunder;

 

(d)                                 change Section 2.03, Section 2.09 or Section 8.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender;

 

(e)                                  change any provision of this Section 10.01 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder without the written consent of each Lender;

 

(f)                                   other than as permitted by Section 9.10, release all or substantially all of the Collateral in any transaction or series of related transactions, without the written consent of each Lender; or

 

(g)                                  release any Subsidiary Guarantor, without the written consent of each Lender, except to the extent the release of any Subsidiary Guarantor is permitted pursuant to Section 9.10 (in which case such release may be made by the Administrative Agent acting alone);

 

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and provided, further, that (a) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; and (b) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto.  Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder and the Commitment of and Loans owed to such Defaulting Lender shall not be counted for purposes of determining whether the Required Lenders have approved any amendment, waiver or consent hereunder (including for purposes of determining the aggregate amount of the Commitments or Loans outstanding for purposes of any such calculation or determination), except that (i) the Commitment of such Defaulting Lender may not be increased or extended without the consent of such Defaulting Lender and (ii) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of such Defaulting Lender.

 

Notwithstanding the foregoing, the consent of the Required Lenders shall not be required to make any changes necessary to be made in connection with any borrowing of New Term Loans thereunder in accordance with Section 2.10 or in connection with any Extension in accordance with Section 2.11.

 

Notwithstanding the foregoing, any contrary voting provisions set forth in the Agreement Among Lenders shall be controlling as among the Lenders.

 

If any Lender does not consent to a proposed amendment, waiver, consent or release with respect to any Loan Document that requires the consent of each Lender and that has been approved by the Required Lenders, the Borrower may replace each non-consenting Lender in accordance with Section 10.13; provided, that such amendment, waiver, consent or release can be effected as a result of all such assignments.

 

Any waiver, consent, amendment, release or modification pursuant to this Section 10.01 shall apply equally to each of the Lenders and shall be binding upon the Borrower, the Lenders, the Administrative Agent and all future holders of the Term Loans.  In the case of any waiver, the Borrower, the Lenders and the Administrative Agent shall be restored to their former positions and rights hereunder and under the other Loan Documents, and any Default or Event of Default that is waived pursuant to this Section 10.01 shall be deemed to be cured and not continuing during the period of such waiver.

 

SECTION 10.02          Notices; Effectiveness; Electronic Communications.  (a)  Notices Generally.  Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in Section 6.02 and subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

 

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(i)            if to the Borrower or the Administrative Agent, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 10.02; and

 

(ii)           if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire.

 

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient).  Notices delivered through electronic communications to the extent provided in subsection (b) below shall be effective as provided in such subsection (b).

 

(b)           Electronic Communications.  Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided, that the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication.  The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided, that approval of such procedures may be limited to particular notices or communications.

 

Unless the Administrative Agent otherwise prescribes, (a) notices and other communications sent to the Lenders to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided, that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (b) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

 

(c)           The Platform.  THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY, ADEQUACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM.  In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower, any Lender or any other Person for losses, claims, damages, liabilities or expenses of

 

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any kind (whether in tort, contract or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to the Borrower, any Lender or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

 

(d)           Change of Address, Etc.  Each of the Borrower and the Administrative Agent may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto.  Each other Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Borrower and the Administrative Agent.  In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender.

 

(e)           Reliance by Administrative Agent and Lenders.  The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic Borrowing Notices) purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof.  All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

 

SECTION 10.03          No Waiver; Cumulative Remedies.  No failure by any Lender or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

SECTION 10.04          Expenses; Indemnity; Damage Waiver.  (a)  Reimbursement by the Borrower.  The Borrower shall pay, or reimburse (x) the Administrative Agent (and any sub-agent thereof) for, all of the Administrative Agent’s (or such sub-agent’s) internal and external audit, legal, appraisal, valuation, filing, document duplication and reproduction and investigation expenses and for all other reasonable out-of-pocket costs and expenses of every type and nature (including the reasonable fees, expenses and disbursements of the Administrative Agent’s counsel, Shearman & Sterling LLP, local legal counsel, auditors, accountants, appraisers, printers, insurance and environmental advisors, and other consultants and agents) incurred by the Administrative Agent (or such sub-agent), and (y) for all costs incurred on or prior to the Closing Date and for related post-closing matters and in connection with any enforcement action, work-out or restructuring, the Lenders and their counsel, Schulte Roth & Zabel LLP, in connection with any of the following:  (i) the extension of the Term Loans provided for herein, the

 

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preparation, negotiation, execution, delivery, interpretation and administration of this Agreement and the other Loan Documents and Equity Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) the creation, perfection or protection of the Liens under any Loan Document (including any reasonable fees, disbursements and expenses for local counsel in various jurisdictions), (iii) the commencement, defense or intervention in any court proceeding relating in any way to the Obligations hereunder, any Loan Party, this Agreement or any other Loan Document or any of the transactions contemplated hereby or thereby, (iv) the response to, and preparation for, any subpoena or request for document production with which the Administrative Agent (or any sub-agent thereof) is served or deposition or other proceeding in which the Administrative Agent (or any sub-agent thereof) is called to testify, in each case, relating in any way to the Obligations, any Loan Party, this Agreement or any other Loan Document or any of the transactions contemplated hereby or thereby and (v) all costs and expenses incurred by the Administrative Agent (or any sub-agent thereof) or the Lenders (including the fees, charges and disbursements of any counsel), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Term Loans made hereunder, including all such costs and expenses incurred during any workout, restructuring or negotiations in respect of such Term Loans whether in any action, suit or litigation, or any bankruptcy, insolvency or other similar proceeding affecting creditors’ rights generally.  The Borrower further agrees to pay or reimburse the Administrative Agent (and any sub-agent thereof) and each Lender for all out-of-pocket costs and expenses, including reasonable attorneys’ fees (including costs of settlement), incurred by the Administrative Agent (or such sub-agent) or such Lender in connection with any of the following:  (1) in enforcing any Loan Document or Obligation or any security therefor or exercising or enforcing any other right or remedy available by reason of an Event of Default, including all such costs and expenses incurred during any workout, restructuring or negotiations in respect of such Term Loans whether in any action, suit or litigation, or any bankruptcy, insolvency or other similar proceeding affected creditors’ rights generally, (2) in defending or intervening in any litigation or in filing a petition, complaint, answer, motion or other pleadings in any legal proceeding relating to the Obligations or any Loan Party and related to or arising out of the transactions contemplated hereby or by any other Loan Document or (3) in taking any other action in or with respect to any suit or proceeding (bankruptcy or otherwise) described in any of the foregoing clauses (i), (ii) and (iii).

 

(b)           Indemnification by the Borrower.  The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnified Party”) against, and hold each Indemnified Party harmless from, any and all losses, claims, damages, liabilities, obligations, penalties, actions, judgments, suits, costs, disbursements and expenses, joint or several, of any kind or nature (including the fees, charges and disbursements of any advisor or counsel for any Indemnified Party), incurred by any Indemnified Party, asserted against any Indemnified Party by the Borrower, any other Loan Party or any other Person or awarded against any Indemnified Party, in each case, arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions

 

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contemplated hereby or thereby, (ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or Release of Hazardous Materials on or from any property owned or operated by any Loan Party or any of its Subsidiaries, or any Environmental Liability related in any way to any Loan Party or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by an Indemnified Party, a third party or by the Borrower or any other Loan Party or any of the Borrower’s or such Loan Party’s directors, shareholders or creditors, and regardless of whether any Indemnified Party is a party thereto and whether or not any of the transactions contemplated hereby are consummated; provided that such indemnity shall not, as to any Indemnified Party, be available to the extent that such losses, claims, damages, liabilities, obligations, penalties, actions, judgments, suits, costs, disbursements and expenses (A) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnified Party or (B) result from a claim brought by the Borrower or any other Loan Party against such Indemnified Party for breach in bad faith of such Indemnified Party’s obligations hereunder or under any other Loan Document, if the Borrower or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.

 

(c)           Reimbursement by Lenders.  Each Lender severally agrees to indemnify the Administrative Agent and each sub-agent thereof (in each case, to the extent not promptly reimbursed by the Borrower) from and against such Lender’s Applicable Percentage of any and all losses, claims, damages, liabilities, obligations, penalties, actions, judgments, suits, costs, disbursements and expenses, joint or several, of any kind or nature (including the fees, charges and disbursements of any advisor or counsel for such Person that may be imposed on, incurred by, or asserted against the Administrative Agent or any such sub-agent, as the case may be, in any way relating to or arising out of the Loan Documents or any action taken or omitted by the Administrative Agent or any such sub-agent under the Loan Documents; provided, however, that no Lender shall be liable for any portion of such losses, claims, damages, liabilities, obligations, penalties, actions, judgments, suits, costs, disbursements or expenses resulting from the Administrative Agent’s or such sub-agent’s gross negligence or willful misconduct as found in a final, non-appealable judgment by a court of competent jurisdiction.  Without limitation of the foregoing, each Lender agrees to reimburse the Administrative Agent and each sub-agent thereof for its Applicable Percentage of any costs and expenses (including, without limitation, fees and expenses of counsel) payable by the Borrower under Section 10.04(a), to the extent that the Administrative Agent or such sub-agent is not promptly reimbursed for such costs and expenses by the Borrower.

 

(d)           Waiver of Consequential Damages, Etc.  The Borrower agrees that no Indemnified Party shall have any liability (whether in contract, tort or otherwise) to the Borrower or any other Loan Party or any of their respective Subsidiaries or any of their respective equity holders or creditors for or in connection with the transactions contemplated hereby and in the other Loan Documents, except to the extent such liability is determined in a final non-appealable judgment by a court of competent jurisdiction to have resulted primarily from such Indemnified Party’s gross negligence or willful misconduct.  In no event, however, shall any Indemnified Party be liable to any Person on any theory of liability for any special, indirect, consequential or punitive damages (including, without limitation, any loss of profits, business or and each such

 

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Loan Party’s respective anticipated savings).  The Borrower hereby waives, releases and agrees (each for itself and on behalf of each other Loan Party) not to sue upon any such claim for any special, indirect, consequential or punitive damages, whether or not accrued and whether or not known or suspected to exist in its favor.

 

(e)           Payments.  All amounts due under this Section shall be payable promptly upon demand therefor.

 

(f)            Survival.  The agreements in this Section shall survive the resignation of the Administrative Agent, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.

 

SECTION 10.05          Payments Set Aside.  To the extent that any payment by or on behalf of the Borrower is made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation 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 setoff had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Overnight Rate from time to time in effect.  The obligations of the Lenders under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.

 

SECTION 10.06          Successors and Assigns.  (a)  Successors and Assigns Generally.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that no Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of Section 10.06(b), (ii) by way of participation in accordance with the provisions of Section 10.06(d), or (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 10.06(f).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

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(b)           Assignments by Lenders.  Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Term Loans at the time owing to it); provided, that:

 

(i)            except in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Term Loans at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate amount of the Commitment (which for this purpose includes Term Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Term Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000 and in increments of $1,000,000 in excess thereof, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed and not required in connection with an assignment by a Lender to another Lender or to an Affiliate or Approved Fund of a Lender); provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met;

 

(ii)           each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Term Loans or the Commitment assigned;

 

(iii)          any assignment of a Commitment must be approved by the Administrative Agent unless the Person that is the proposed assignee is itself a Lender (whether or not the proposed assignee would otherwise qualify as an Eligible Assignee);

 

(iv)          the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $3,500; provided, however, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment.  The Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

 

(v)           In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Term Loans previously requested but not funded

 

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by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (A) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent or any Lender hereunder (and interest accrued thereon) and (B) acquire (and fund as appropriate) its full pro rata share of all Term Loans in accordance with its Applicable Percentage.  Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under Applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

 

(vi)          Notwithstanding anything to the contrary contained herein, any Lender may assign all or any portion of its Loans hereunder to the Borrower or any of its Subsidiaries; provided that the aggregate principal amount of the Term Loans assigned to the Borrower or any of its Subsidiaries pursuant to this Section 10.06(b)(vi) shall not exceed 33% of the original principal amount of the Term Loans and any New Term Loans in the aggregate, but only if:

 

(A)          such assignment is made pursuant to a Dutch Auction open to all Lenders on a pro rata basis;

 

(B)          immediately prior to and after giving effect to such assignment, no Default or Event of Default has occurred or is continuing or would result therefrom;

 

(C)          the Borrower or its Subsidiary, as applicable, shall at the time of such assignment affirm the No Undisclosed Information Representation;

 

(D)          the Borrower shall, at the time of such assignment and upon giving effect thereto, be in pro forma compliance with the financial covenants set forth in Section 7.08; and

 

(E)           any such Loans shall be automatically and permanently cancelled immediately upon acquisition thereof by the Borrower or any of its Subsidiaries;

 

Notwithstanding anything to the contrary contained herein, neither the Borrower or any of its Subsidiaries shall have any right to (1) attend (including by telephone) any meeting or discussions (or portion thereof) among the Administrative Agent or any Lender to which representatives of the Borrower are not then present or (2) receive any information or material prepared by the Administrative Agent or any Lender or any communication by or among Administrative Agent and one or more Lenders, except to the extent such information or materials have been made available to the Borrower or its representatives.

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the

 

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extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.01, Section 3.04, and Section 10.04 with respect to facts and circumstances occurring prior to the effective date of such assignment.  Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender.  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 10.06(d).

 

(c)           Register.  The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Term Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower at any reasonable time and from time to time upon reasonable prior notice.

 

(d)           Participations.  Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Term Loans owing to it); provided, that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided, that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in clauses (a), through (f) of the first proviso to Section 10.01 that directly affects such Participant.  Subject to subsection (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, and Section 3.04 to the same extent as if it were a Lender and had acquired its interest by assignment; provided, that in the case of Section 3.01, such Participant shall have complied with the requirements of such section.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.09 as though it were a Lender.

 

(e)           Limitations upon Participant Rights.  A Participant shall not be entitled to receive any greater payment under Section 3.01 or Section 3.04 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant,

 

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unless the sale of the participation to such Participant is made with the Borrower’s prior written consent.  A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 3.01(d) as though it were a Lender.

 

(f)            Certain Pledges.  Notwithstanding any other provision set forth in this Agreement, any Lender may at any time create a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including, without limitation, any pledge or assignment to secure obligations to a Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System, and this Section shall not apply to any such pledge or assignment of a security interest; provided, that, no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender party hereto.

 

(g)           Electronic Execution of Assignments.  The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any Applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state Applicable Laws based on the Uniform Electronic Transactions Act.

 

(h)           Affiliate Assignments.  Notwithstanding anything to the contrary contained herein, the Term Loans may be assigned to Affiliates of the Borrower (such Affiliate, an “Affiliated Lender”); provided that such Affiliate shall have no right whatsoever so long as such Person is an Affiliate of the Borrower (i) to consent to any amendment, modification, waiver, consent or other such action with respect to any of the terms of this Agreement or any other Loan Document, (ii) to require any Agent or other Lender to undertake any action (or refrain from taking any action) with respect to this Agreement or any other Loan Document, (iii) otherwise vote on any matter related to this Agreement or any other Loan Document, (iv) to attend (or receive any notice of) any meeting, conference call or correspondence with any Agent or Lender or receive any information from any Agent or Lender, (v) to have access to the Platform (including, without limitation, that portion of the Platform that has been designated for “private-side” Lenders) or (vi) to make or bring any claim, in its capacity as Lender, against the Agent or any Lender with respect to the duties and obligations of such Persons under the Loan Documents; and provided  further that the aggregate principal amount of the Term Loans assigned to Affiliated Lenders pursuant to this Section 10.06(h) shall not exceed 33% of the original principal amount of the Term Loans and any New Term Loans in the aggregate.

 

SECTION 10.07          Treatment of Certain Information; Confidentiality.  (a)  Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of Information, except that Information may be disclosed (i) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors and other representatives with a need to know such Information (it being understood that the Persons to whom such

 

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disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (ii) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners); provided, the Administrative Agent or applicable Lender shall provide the Borrower with prompt notice prior to such disclosure to the extent permitted by law to do so, (iii) to the extent required by Applicable Law or regulations or by any subpoena or similar legal process, (iv) to any other party hereto, (v) in connection with the exercise of any remedies hereunder or under any other Loan Document, any action or proceeding relating to this Agreement or any other Loan Document, the enforcement of rights hereunder or thereunder or any litigation or proceeding to which the Administrative Agent or any Lender or any of its Affiliates may be a party, (vi) to (A) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement, (B) any actual or prospective counterparty, surety, reinsurer, guarantor or credit liquidity enhancer (or their advisors) to or in connection with any swap, derivative or other protective transaction relating to the Obligations or to the Borrower and its obligations, (C) to any rating agency when required by it or (D) the CUSIP Service Bureau or any similar organization, in each case, which is informed of the confidential nature of such information, (vii) with the consent of the Borrower or (viii) to the extent such Information (1) becomes publicly available other than as a result of a breach of this Section or (2) becomes available to the Administrative Agent, any Lender or any of their respective Affiliates on a nonconfidential basis from a source (other than a Loan Party) not known by the Administrative Agent or applicable Lender to be bound by a confidentiality duty or obligation.

 

For purposes of this Section, “Information” means all information received from the Borrower or any Subsidiary relating to the Borrower or any Subsidiary or any of their respective businesses, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrower or any Subsidiary, provided, that in the case of information received from the Borrower or any such Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised reasonable care to protect such Information, and in no event less than the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

 

(b)           EACH LENDER ACKNOWLEDGES THAT UNITED STATES FEDERAL AND STATE SECURITIES LAWS PROHIBIT ANY PERSON WITH MATERIAL, NON-PUBLIC INFORMATION ABOUT AN ISSUER FROM PURCHASING OR SELLING SECURITIES OF SUCH ISSUER OR, SUBJECT TO CERTAIN LIMITED EXCEPTIONS, FROM COMMUNICATING SUCH INFORMATION TO ANY OTHER PERSON.  EACH LENDER AGREES TO COMPLY WITH APPLICABLE LAW AND ITS RESPECTIVE CONTRACTUAL OBLIGATIONS WITH RESPECT TO CONFIDENTIAL AND MATERIAL NON-PUBLIC INFORMATION.  Each Lender that is not a Public Lender confirms to the Administrative Agent that such Lender has adopted and will maintain internal policies and procedures reasonably designed to permit such Lender to take delivery of Restricting Information (as defined below) and maintain its compliance with Applicable Law and its respective contractual obligations with respect to confidential and material non-public

 

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information.  A Public Lender may elect not to receive Borrower Materials and Information that contains material non-public information with respect to the Loan Parties or their securities (such Borrower Materials and Information, collectively, “Restricting Information”), in which case it will identify itself to the Administrative Agent as a Public Lender.  Such Public Lender shall not take delivery of Restricting Information and shall not participate in conversations or other interactions with the Agents, any Lender or any Loan Party concerning the Term Loans in which Restricting Information is likely to be discussed.  No Agent, however, shall by making any Borrower Materials and Information (including Restricting Information) available to a Lender (including any Public Lender), by participating in any conversations or other interactions with a Lender (including any Public Lender) or otherwise, be responsible or liable in any way for any decision a Lender (including any Public Lender) may make to limit or to not limit its access to Borrower Materials and Information.  In particular, no Agent shall have, and the Administrative Agent, on behalf of each Agent, hereby disclaims, any duty to ascertain or inquire as to whether or not a Lender (including any Public Lender) has elected to receive Restricting Information, such Lender’s policies or procedures regarding the safeguarding of material nonpublic information or such Lender’s compliance with Applicable Law related thereto.  Each Public Lender acknowledges that circumstances may arise that requires it to refer to Borrower Materials and Information that might contain Restricting Information.  Accordingly, each Public Lender agrees that it will nominate at least one designee to receive Borrower Materials and Information (including Restricting Information) on its behalf and identify such designee (including such designee’s contact information) on such Public Lender’s Administrative Questionnaire.  Each Public Lender agrees to notify the Administrative Agent in writing (including by electronic communication) from time to time of such Public Lender’s designee’s e-mail address to which notice of the availability of Restricting Information may be sent by electronic transmission.  Each Public Lender confirms to the Administrative Agent and the Lenders that are not Public Lenders that such Public Lender understands and agrees that the Administrative Agent and such other Lenders may have access to Restricting Information that is not available to such Public Lender and that such Public Lender has elected to make its decision to enter into this Agreement and to take or not take action under or based upon this Agreement, any other Loan Document or related agreement knowing that, so long as such Person remains a Public Lender, it does not and will not be provided access to such Restricting Information.  Nothing in this Section 10.07(b) shall modify or limit a Lender’s (including any Public Lender) obligations under Section 10.07 with regard to Borrower Materials and Information and the maintenance of the confidentiality of or other treatment of Borrower Materials or Information.

 

(c)           This Section 10.07 terminates and supersedes any and all prior agreements and understandings (whether written or oral) between the parties with respect to the confidentiality obligations other than as set forth in the Stockholders Agreement.  For the avoidance of doubt, any obligation of the Borrower or its Subsidiaries to make a “Cleansing Disclosure” or otherwise publicly disclose material non-public information pursuant to the terms of any prior confidentiality agreement is hereby waived by the Lenders.

 

SECTION 10.08          Right of Setoff.  Upon any amount becoming due and payable hereunder (whether at stated maturity, by acceleration or otherwise), each Lender and its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever

 

126

 

currency) at any time owing by such Lender or any such Affiliate to or for the credit or the account of the Borrower or any other Loan Party against any and all of the obligations of the Borrower or such Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement or any other Loan Document or are owed to a branch or office of such Lender different from the branch or office holding such deposit or obligated on such indebtedness.  The rights of each Lender and its Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender or its Affiliates may have.  Each Lender agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application, provided, that the failure to give such notice shall not affect the validity of such setoff and application.

 

SECTION 10.09          Interest Rate Limitation.  Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by Applicable Law (the “Maximum Rate”).  If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower.  In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by Applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

 

SECTION 10.10          Counterparts; Integration; Effectiveness.  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.  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 as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.

 

SECTION 10.11          Survival of Representations and Warranties.  All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time the Borrowing, and shall continue in full force and effect as long as any Term Loan or any other Obligation hereunder shall remain unpaid or unsatisfied.

 

127

 

SECTION 10.12          Severability.  If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

SECTION 10.13          Replacement of Lenders.  If (a) any Lender requests compensation under Section 3.04, (b) the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, (c) any Lender is at such time a Defaulting Lender or has given notice pursuant to Section 3.02 or (d) any Lender becomes a “Nonconsenting Lender” (hereinafter defined), then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to (and such Lender shall) assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.06), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee selected by the Borrower that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided, that:

 

(a)           the Administrative Agent shall have received the assignment fee specified in Section 10.06(b);

 

(b)           such replacement shall be deemed a voluntary prepayment of such Lender’s Loans and such Lender shall have received payment of an amount equal to the outstanding principal of its Term Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 2.03) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

 

(c)           in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter;

 

(d)           such assignment does not conflict with Applicable Law; and

 

(e)           neither the Administrative Agent nor any Lender shall be obligated to be or to find the assignee.

 

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.  In the event that (a) the Borrower or the Administrative Agent has requested the Lenders to consent to a departure or

 

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waiver of any provisions of the Loan Documents or to agree to any amendment thereto that in each case requires the consent of all of the Lenders or all affected Lenders and (b) the Required Lenders have agreed to such consent, waiver or amendment, then any Lender who does not agree to such consent, waiver or amendment shall be deemed a “Nonconsenting Lender.”  Any such replacement shall not be deemed a waiver of any rights that the Borrower shall have against the replaced Lender.

 

SECTION 10.14          Governing Law; Jurisdiction; Etc.  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

(a)           SUBMISSION TO JURISDICTION.  THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(b)           WAIVER OF VENUE.  THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(c)           SERVICE OF PROCESS.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN Section 10.02.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY

 

129

 

PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

SECTION 10.15          WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

SECTION 10.16          No Advisory or Fiduciary Responsibility.  In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees that:  (a) (i) the arranging and other services regarding this Agreement provided by the Administrative Agent are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Administrative Agent, on the other hand, (ii) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (iii) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (b) (i) the Administrative Agent is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person and (ii)  the Administrative Agent has no obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent and its Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and the Administrative Agent has no obligation to disclose any of such interests to the Borrower or its Affiliates.  To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against the Administrative Agent with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

 

SECTION 10.17          USA PATRIOT Act Notice.  Each Lender that is subject to the PATRIOT Act and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the PATRIOT Act it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of each Loan Party and other information that will allow such Lender or the Administrative Agent, as applicable, to identify each Loan Party in accordance with the PATRIOT Act.

 

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SECTION 10.18          Time of the Essence.  Time is of the essence of the Loan Documents.

 

SECTION 10.19          Intercreditor Legend.  The Collateral Agent, for itself and on behalf of the Secured Parties, (a) acknowledges that it has received a copy of the Intercreditor Agreement, (b) consents to the subordination of Liens on the ABL Primary Collateral as defined, and provided for, in the Intercreditor Agreement, (c) agrees that it will be bound by and will take no actions contrary to the provisions of the Intercreditor Agreement and (d) solely with respect to each Secured Party, authorizes and instructs the Collateral Agent to enter into the Intercreditor Agreement as agent for and representative of such Secured Party.  The foregoing provisions are intended as an inducement to the ABL Secured Parties under the ABL Loan Documents (each such terms as defined in the Intercreditor Agreement) to extend credit to the Borrowers and such ABL Secured Parties are intended third party beneficiaries of such provisions.

 

SECTION 10.20          No Novation. This Agreement does not extinguish the obligations for the payment of money outstanding under the Original Credit Agreement or discharge or release the Obligations under, and as defined in, the Original Credit Agreement or the creation, perfection or priority of any mortgage, pledge, security agreement or any other security therefor except as expressly provided herein or in instruments executed concurrently herewith or after the execution of the Original Credit Agreement and prior to the Closing Date.  Nothing herein contained shall be construed as a substitution or novation of the Obligations outstanding under, and as defined in, the Original Credit Agreement or instruments securing the same, which shall remain in full force and effect, except as modified hereby or by instruments executed concurrently herewith or after the execution of the Original Credit Agreement and prior to the Closing Date.  All interest and fees and expenses, if any, owing or accruing under or in respect of the Original Credit Agreement through the Closing Date shall be calculated as of the Closing Date (prorated in the case of any fractional periods), and shall be capitalized and thereupon amended, restated, converted and continued or cancelled, as applicable, pursuant to Section 2.01.  Nothing expressed or implied in this Agreement shall be construed as a release or other discharge of any Loan Party under the Original Credit Agreement from any of its obligations and liabilities as a “Borrower” or “Guarantor” thereunder except as expressly provided in Section 2.01 hereof or elsewhere herein or in instruments executed concurrently herewith or after the execution of the Original Credit Agreement and prior to the Closing Date.  Each Loan Party hereby (i) confirms and agrees that except as expressly provided in Section 2.01 hereof or elsewhere herein or in instruments executed concurrently herewith or after the execution of the Original Credit Agreement and prior to the Closing Date, each Loan Document to which it is a party is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects except that on and after the Closing Date all references in any such Loan Document to “the Agreement,” “thereto,” “thereof,” “thereunder” or words of like import referring to the Original Credit Agreement shall mean the Original Credit Agreement as amended and restated by this Agreement and (ii) confirms and agrees that to the extent that any such Loan Document purports to assign or pledge to the Agent a security interest in or Lien on any collateral as security for the obligations of the Borrowers or the Guarantors from time to time existing in respect of the Original Credit Agreement and the Loan Documents, such pledge, assignment and/or grant of the security interest or lien is hereby ratified and confirmed in all respects except as otherwise expressly provided herein.  The Lenders hereby authorize the execution, delivery and performance of the Omnibus Amendment by the Borrower, the

 

131

 

Subsidiary Guarantors and the Collateral Agent, and the amendments made to the Security Agreement and the Subsidiary Guaranty pursuant thereto are hereby consented to by the Lenders.

 

SECTION 10.21          Release and Covenant Not to Sue.

 

(a)           The Borrower and each other Loan Party hereby absolutely and unconditionally release and forever discharge the Agents, the Lenders, and any and all of their respective participants, parent corporations, subsidiary corporations, affiliated corporations, insurers, indemnitors, successors and assigns thereof, together with all of the present and former directors, officers, agents and employees of any of the foregoing (each a “Released Party”), from any and all claims, demands or causes of action of any kind, nature or description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which the Borrower or any other Loan Party, has had, now has or has made claim to have against any such person for or by reason of any act, omission, matter, cause or thing whatsoever arising at any time on or prior to and including the date of this Agreement, whether such claims, demands and causes of action are matured or unmatured or known or unknown, and in each case, arising for or on account of, in relation to, or in any way in connection with, any of this Agreement, any other Loan Document, the Forbearance Agreement, the Restructuring Agreement, the Equity Documents and/or the transactions thereunder or related thereto, other than any claims, demands or causes of action resulting from fraud of a Released Party, as determined by the final, non-appealable judgment of a court of competent jurisdiction.  It is the intention of the Borrower and each other Loan Party in providing this release that the same shall be effective as a bar to each and every claim, demand and cause of action specified, and in furtherance of this intention it waives and relinquishes all rights and benefits under any applicable law, which provides that:

 

“A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him might have materially affected his settlement with the debtor.”

 

(b)           The Borrower and each other Loan Party acknowledge that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such claims, demands, or causes of action and agrees that this instrument shall be and remain effective in all respects notwithstanding any such differences or additional facts.  The Borrower and each other Loan Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

 

(c)           The Borrower and each other Loan Party, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Released Party above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Released Party on the basis of any claim released, remised and discharged by the Borrower or any other Loan Party pursuant to the above release.  If any Borrower, any

 

132

 

Subsidiary Guarantor or any of their respective successors, assigns, or officers, directors, employees, agents or attorneys, or any Person acting for or on behalf of, or claiming through it violate the foregoing covenant, such Person, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Released Party may sustain as a result of such violation, all attorneys’ fees and costs incurred by such Released Party as a result of such violation.

 

133

 

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

 

	
 
    	
AVENTINE   RENEWABLE ENERGY HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Calvin Stewart
    
	
 
    	
 
    	
Name:   Calvin Stewart
    
	
 
    	
 
    	
Title:   Chief Financial Officer
    

 

[Signature Page]

 

 

	
 
    	
CITIBANK,   N.A., as
    
	
 
    	
Administrative   Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Kirkwood Roland
    
	
 
    	
 
    	
Name:   Kirkwood Roland
    
	
 
    	
 
    	
Title:   Director & Vice President
    

 

[Signature Page]

 

 

	
 
    	
CITIBANK,   N.A., as
    
	
 
    	
Collateral   Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Kirkwood Roland
    
	
 
    	
 
    	
Name:   Kirkwood Roland
    
	
 
    	
 
    	
Title:   Director & Vice President
    

 

[Signature Page]

 

 

	
LJR   Capital L.P.,
    	
 
    
	
as a   Term Loan A Lender
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    
	
 
    	
/s/   Lawrence B. Gill
    	
 
    
	
 
    	
Name:   Lawrence B. Gill
    	
 
    
	
 
    	
Title:   Authorized Signatory
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
ALJ Capital I, L.P.,  

as a Term Loan A Lender
    	
 
    
	
 
    	
 
    
	
By:  
    	
 
    	
 
    
	
 
    	
/s/ Lawrence B. Gill
    	
 
    
	
 
    	
Name:   Lawrence B. Gill  
    Title:   Authorized Signatory
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
ALJ   Capital II, L.P.,
    	
 
    
	
as a   Term Loan A Lender
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    
	
 
    	
/s/   Lawrence B. Gill
    	
 
    
	
 
    	
Name:   Lawrence B. Gill
    	
 
    
	
 
    	
Title:   Authorized Signatory
    	
 
    

 

[Signature Page]

 

 

	
ALLIANCEBERNSTEIN   STRATEGIC OPPORTUNITIES FUND, L.P.
    	
 
    
	
as a   Term Loan A Lender
    	
 
    
	
 
    	
 
    
	
By:
    	
AllianceBernstein,   L.P.,
    	
 
    
	
 
    	
as   Investment Adviser
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Jack Kelley
    	
 
    
	
 
    	
Name: Jack   Kelley
    	
 
    
	
 
    	
Title:   SVP
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
ALLIANCEBERNSTEIN   EVENT DRIVEN OPPORTUNITIES FUND (DELAWARE), L.P.
    	
 
    
	
as a Term Loan A Lender
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
AllianceBernstein,   L.P.,
    	
 
    
	
 
    	
as   Investment Adviser
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Jack Kelley
    	
 
    
	
 
    	
Name: Jack   Kelley
    	
 
    
	
 
    	
Title:   SVP
    	
 
    

 

[Signature Page]

 

 

	
ALTAI CAPITAL MASTER   FUND, LTD.
    	
 
    
	
as a Term Loan A Lender
    	
 
    
	
 
    	
 
    
	
By:  
    	
Altai Capital Management, L.P.,
    	
 
    
	
 
    	
as Investment Adviser
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Toby E. Symonds
    	
 
    
	
 
    	
Name:
    	
Toby E. Symonds
    	
 
    
	
 
    	
Title:
    	
Managing   Principal of the Investment Adviser to Altai Capital Master Fund, Ltd.
    	
 
    

 

[Signature Page]

 

 

	
APOLLO INVESTMENT CORPORATION,
    	
 
    
	
as a Term Loan A Lender
    	
 
    
	
 
    	
 
    
	
By:
    	
Apollo Investment Management, L.P., as Advisor
    	
 
    
	
By:
    	
ACC Management, LLC, as its General Partner
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Ted   J. Goldthorpe
    	
 
    
	
 
    	
Name:
    	
Ted J. Goldthorpe
    	
 
    
	
 
    	
Title:
    	
Chief Investment Officer
    	
 
    

 

[Signature Page]

 

 

	
CREDIT SUISSE LOAN FUNDING LLC,
    	
 
    
	
as a Term Loan A Lender
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Robert Healey
    	
 
    
	
 
    	
Name:   Robert Healey
    	
 
    
	
 
    	
Title:   Authorized Signatory
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Michael Wotanowski
    	
 
    
	
 
    	
Name:  Michael Wotanowski
    	
 
    
	
 
    	
Title:  Authorized Signatory
    	
 
    

 

[Signature Page]

 

 

	
MIDTOWN   ACQUISITIONS L.P.,
    	
 
    
	
as a   Term Loan A Lender
    	
 
    
	
 
    	
 
    
	
By:   Midtown Acquisitions GP LLC, its general partner
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Avram Z. Friedman
    	
 
    
	
 
    	
Name:
    	
Avram   Z. Friedman
    	
 
    
	
 
    	
Title:
    	
Manager
    	
 
    

 

[Signature Page]

 

 

	
MACQUARIE BANK LIMITED,
    	
 
    
	
as a Term Loan A Lender
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    
	
 
    	
/s/ Nathan Booker
    	
 
    
	
 
    	
Name: 
    	
Nathan Booker
    	
 
    
	
 
    	
Title: 
    	
Associate Director
    	
 
    
	
 
    	
 
    	
Legal Risk Management
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
/s/ Alan D. Cameron
    	
 
    
	
 
    	
Name: 
    	
Alan D. Cameron
    	
 
    
	
 
    	
Title: 
    	
Executive Director
    	
 
    
	
 
    	
 
    	
Fixed Income & Currencies
    	
 
    

 

[Signature Page]

 

 

	
REDWOOD   MASTER FUND, LTD.,
    	
 
    
	
as a   Term Loan A Lender
    	
 
    
	
 
    	
 
    
	
By:
    	
REDWOOD   CAPITAL MANAGEMENT, LLC,
    	
 
    
	
 
    	
its   Investment Advisor
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Jed   Nussbaum
    	
 
    
	
 
    	
Name:  Jed Nussbaum
    	
 
    
	
 
    	
Title:  Authorized Signatory
    	
 
    

 

[Signature Page]

 

 

	
SENATOR   GLOBAL OPPORTUNITY MASTER FUND L.P.,
    as   a Term Loan A Lender
    	
 
    
	
 
    	
 
    
	
By:
    	
Senator   Master GP LLC,  
    its   general partner  
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Evan Gartenlaub
    	
 
    
	
 
    	
Name:  Evan Gartenlaub
    	
 
    
	
 
    	
Title: General   Counsel
    	
 
    

 

[Signature Page]

 

 

	
TCS   II Debt Solutions II (Offshore), LLC,
    	
 
    
	
as a   Term Loan A Lender
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Julie K. Braun
    	
 
    
	
 
    	
Name:  Julie K. Braun
    	
 
    
	
 
    	
Title:  Vice President
    	
 
    

 

 

	
TCS   II Opportunities Debt Solutions II (Offshore), LLC,
    	
 
    
	
as a   Term Loan A Lender
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Julie K. Braun
    	
 
    
	
 
    	
Name:  Julie K. Braun
    	
 
    
	
 
    	
Title:  Vice President
    	
 
    

 

[Signature Page]

 

 

	
LJR   Capital L.P.,
    	
 
    
	
as a   Term Loan B Lender
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    
	
 
    	
/s/   Lawrence B. Gill
    	
 
    
	
 
    	
Name:   Lawrence B. Gill
    	
 
    
	
 
    	
Title:   Authorized Signatory
    	
 
    

 

 

	
ALJ   Capital I, L.P.,
    	
 
    
	
as a   Term Loan B Lender
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    
	
 
    	
/s/   Lawrence B. Gill
    	
 
    
	
 
    	
Name:   Lawrence B. Gill
    	
 
    
	
 
    	
Title:   Authorized Signatory
    	
 
    

 

 

	
ALJ   Capital II, L.P.,
    	
 
    
	
as a   Term Loan B Lender
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    
	
 
    	
/s/   Lawrence B. Gill
    	
 
    
	
 
    	
Name:   Lawrence B. Gill
    	
 
    
	
 
    	
Title:   Authorized Signatory
    	
 
    

 

[Signature Page]

 

 

	
ALLIANCEBERNSTEIN   STRATEGIC OPPORTUNITIES FUND, L.P.
    	
 
    
	
as a   Term Loan B Lender
    	
 
    
	
 
    	
 
    
	
By:
    	
AllianceBernstein,   L.P.,
    	
 
    
	
 
    	
as   Investment Adviser
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Jack Kelley
    	
 
    
	
 
    	
Name: Jack   Kelley
    	
 
    
	
 
    	
Title:   SVP
    	
 
    

 

 

	
ALLIANCEBERNSTEIN   EVENT DRIVEN OPPORTUNITIES FUND (DELAWARE), L.P.
    	
 
    
	
as a   Term Loan B Lender
    	
 
    
	
 
    	
 
    
	
By:
    	
AllianceBernstein,   L.P.,
    	
 
    
	
 
    	
as   Investment Adviser
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Jack Kelley
    	
 
    
	
 
    	
Name: Jack   Kelley
    	
 
    
	
 
    	
Title:   SVP
    	
 
    

 

[Signature Page]

 

 

	
ALTAI   CAPITAL MASTER FUND, LTD.
    	
 
    
	
as a   Term Loan B Lender
    	
 
    
	
 
    	
 
    
	
By:
    	
Altai   Capital Management, L.P.,
    	
 
    
	
 
    	
as   Investment Adviser
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Toby E. Symonds
    	
 
    
	
 
    	
Name: 
    	
Toby E.   Symonds
    	
 
    
	
 
    	
Title: 
    	
Managing   Principal of the Investment Adviser to Altai Capital Master Fund, Ltd.
    	
 
    

 

[Signature Page]

 

 

	
APOLLO   INVESTMENT CORPORATION,
    	
 
    
	
as a   Term Loan B Lender
    	
 
    
	
 
    	
 
    
	
By:
    	
Apollo   Investment Management, L.P., as Advisor
    	
 
    
	
By:
    	
ACC   Management, LLC, as its General Partner
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Ted   J. Goldthorpe
    	
 
    
	
 
    	
Name: 
    	
Ted J.   Goldthorpe
    	
 
    
	
 
    	
Title:
    	
Chief   Investment Officer
    	
 
    

 

[Signature Page]

 

 

	
CREDIT   SUISSE LOAN FUNDING LLC,
    	
 
    
	
as a   Term Loan B Lender
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Robert Healey
    	
 
    
	
 
    	
Name:   Robert Healey
    	
 
    
	
 
    	
Title:   Authorized Signatory
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Michael Wotanowski
    	
 
    
	
 
    	
Name:   Michael Wotanowski
    	
 
    
	
 
    	
Title:   Authorized Signatory
    	
 
    

 

[Signature Page]

 

 

	
MIDTOWN   ACQUISITIONS L.P., 
    	
 
    
	
as a   Term Loan B Lender
    	
 
    
	
 
    	
 
    
	
By:
    	
Midtown   Acquisitions GP LLC, its general partner
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Avram Z. Friedman
    	
 
    
	
 
    	
Name: 
    	
Avram   Z. Friedman  
    	
 
    
	
 
    	
Title: 
    	
Manager
    	
 
    
					

 

[Signature Page]

 

 

	
MACQUARIE   BANK LIMITED,
   as a Term Loan B Lender
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
/s/   Nathan Booker
    	
 
    
	
 
    	
Name:
    	
Nathan   Booker  
    	
 
    
	
 
    	
Title: 
    	
Associate   Director
    	
 
    
	
 
    	
 
    	
Legal   Risk Management
    	
 
    

 

 

	
By:
    	
 
    	
 
    
	
 
    	
/s/   Alan D. Cameron
    	
 
    
	
 
    	
Name:
    	
Alan D.   Cameron  
    	
 
    
	
 
    	
Title: 
    	
Executive   Director
    	
 
    
	
 
    	
 
    	
Fixed   Income & Currencies
    	
 
    

 

[Signature Page]

 

 

	
REDWOOD MASTER FUND, LTD.,
    	
 
    
	
as a Term Loan B Lender
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
REDWOOD   CAPITAL MANAGEMENT, LLC,
    	
 
    
	
 
    	
its   Investment Advisor
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Jed   Nussbaum
    	
 
    
	
 
    	
Name:   Jed Nussbaum
    	
 
    
	
 
    	
Title:   Authorized Signatory
    	
 
    

 

[Signature Page]

 

 

	
ROCHDALE   FIXED INCOME PORTFOLIOS, 
   as a Term Loan B Lender
    
	
 
    
	
By:
    	
Seix   Investment Advisors LLC,  
    in   its capacity as Sub-Adviser  
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   George Goudelias
    	
 
    
	
 
    	
Name:  George Goudelias
    	
 
    
	
 
    	
Title:   Managing Director
    	
 
    

 

 

	
RIDGEWORTH   SEIX FLOATING RATE HIGH INCOME FUND,
   as a Term Loan B Lender
    
	
 
    
	
By:
    	
Seix   Investment Advisors LLC,

in its   capacity as Sub-Adviser
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   George Goudelias
    	
 
    
	
 
    	
Name:  George Goudelias

Title:   Managing Director
    	
 
    

 

 

	
RIDGEWORTH   HIGH INCOME FUND,
   as a Term Loan B Lender
    
	
 
    
	
By:
    	
Seix   Investment Advisors LLC,

in its   capacity as Sub-Adviser
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   George Goudelias
    	
 
    
	
 
    	
Name:  George Goudelias

Title:   Managing Director
    	
 
    

 

 

	
SEIX   MULTI-SECTOR ABSOLUTE RETURN FUND LP,
   as a Term Loan B Lender
    
	
 
    
	
By:
    	
Seix   Investment Advisors LLC,

in its   capacity as Investment Manager
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   George Goudelias
    	
 
    
	
 
    	
Name:  George Goudelias

Title:   Managing Director
    	
 
    

 

[Signature Page]

 

 

	
UNIVERSITY   OF ROCHESTER,
   as a Term Loan B Lender
    
	
 
    
	
By:
    	
Seix   Investment Advisors LLC,

in its   capacity as Investment Manager
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   George Goudelias
    	
 
    
	
 
    	
Name:  George Goudelias

Title:   Managing Director
    	
 
    

 

[Signature Page]

 

 

	
SENATOR   GLOBAL OPPORTUNITY MASTER FUND L.P.,
   as a Term Loan B Lender
    
	
 
    
	
By:
    	
Senator   Master GP LLC,

its   general partner
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Evan Gartenlaub
    	
 
    
	
 
    	
Name:  Evan Gartenlaub

Title:   General Counsel
    	
 
    

 

[Signature Page]

 

 

	
TPG   CREDIT OPPORTUNITIES INVESTORS, L.P.,
   as a Term Loan B Lender
    
	
 
    
	
By:
    	
TPG   Credit Opportunities Fund GP, L.P.

Its   General Partner
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Julie K. Braun
    	
 
    
	
 
    	
Name:  Julie K. Braun

Title:  Vice President
    	
 
    

 

 

	
TPG   CREDIT STRATEGIES FUND, L.P., 
   as a Term Loan B Lender
    
	
 
    
	
By:
    	
TPG   Credit Strategies GP, L.P.

Its   General Partner
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Julie K. Braun
    	
 
    
	
 
    	
Name:  Julie K. Braun

Title:  Vice President
    	
 
    

 

 

	
TPG Credit Strategies Fund II, L.P.,

as a   Term Loan B Lender
    
	
 
    
	
By:
    	
TPG   Credit Strategies II GP., L.P.

Its   General Partner
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Julie K. Braun
    	
 
    
	
 
    	
Name:  Julie K. Braun

Title:  Vice President
    	
 
    

 

 

	
TCS   II Opportunities, L.P.,
   as a Term Loan B Lender
    
	
 
    
	
By:
    	
TPG   Credit Strategies II GP, L.P.

Its   General Partner
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Julie K. Braun
    	
 
    
	
 
    	
Name:  Julie K. Braun

Title:  Vice President
    	
 
    

 

[Signature Page]

 

 

	
TPG   CREDIT OPPORTUNITIES FUND L.P.,
   as a Term Loan B Lender
    
	
 
    
	
By:
    	
TPG   Credit Opportunities Fund GP, LP

Its   General Partner
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Julie   K. Braun
    	
 
    
	
 
    	
Name:  Julie K. Braun

Title:  Vice President
    	
 
    

 

[Signature Page]

 

 

SCHEDULE IA

 

TERM A LENDERS AND TERM A LENDERS’ COMMITMENTS

 

	
Lender Name
    	
 
    	
Commitment
    	
 
    	
Applicable
   Percentage
    	
 
    
	
ALJ Capital
    	
 
    	
$
    	
1,550,000
    	
 
    	
5.1667
    	
%
    
	
ALJ CAPITAL I, L.P. 
    	
 
    	
$
    	
134,500
    	
 
    	
0.4483
    	
%
    
	
ALJ CAPITAL II, L.P. 
    	
 
    	
$
    	
713,500
    	
 
    	
2.3783
    	
%
    
	
LJR CAPITAL L.P. 
    	
 
    	
$
    	
702,000
    	
 
    	
2.34
    	
%
    
	
Alliance Capital
    	
 
    	
$
    	
550,000
    	
 
    	
1.8333
    	
%
    
	
ALLIANCEBERNSTEIN EVENT   DRIVEN OPPORTUNITIES FUND (DELAWARE), L.P.
    	
 
    	
$
    	
157,849.29
    	
 
    	
0.5262
    	
%
    
	
ALLIANCEBERNSTEIN   STRATEGIC OPPORTUNITIES FUND, L.P.
    	
 
    	
$
    	
392,150.71
    	
 
    	
1.3071
    	
%
    
	
Altai Capital Management
    	
 
    	
$
    	
1,050,000
    	
 
    	
3.5
    	
%
    
	
ALTAI CAPITAL MASTER   FUND, LTD. 
    	
 
    	
$
    	
1,050,000
    	
 
    	
3.5
    	
%
    
	
Apollo / Stone Tower
    	
 
    	
$
    	
3,850,000
    	
 
    	
12.8333
    	
%
    
	
APOLLO INVESTMENT   CORPORATION 
    	
 
    	
$
    	
3,850,000
    	
 
    	
12.8333
    	
%
    
	
Credit Suisse
    	
 
    	
$
    	
150,000
    	
 
    	
0.5
    	
%
    
	
CREDIT SUISSE LOAN FUNDING   LLC 
    	
 
    	
$
    	
150,000
    	
 
    	
0.5
    	
%
    
	
DK Partners
    	
 
    	
$
    	
9,150,000
    	
 
    	
30.5
    	
%
    
	
MIDTOWN ACQUISITIONS L.P. 
    	
 
    	
$
    	
9,150,000
    	
 
    	
30.5
    	
%
    
	
Macquarie Group
    	
 
    	
$
    	
2,200,000
    	
 
    	
7.3333
    	
%
    
	
MACQUARIE BANK LIMITED
    	
 
    	
$
    	
2,200,000
    	
 
    	
7.3333
    	
%
    
	
Redwood Capital Management
    	
 
    	
$
    	
3,650,000
    	
 
    	
12.1667
    	
%
    
	
REDWOOD MASTER   FUND, LTD. 
    	
 
    	
$
    	
3,650,000
    	
 
    	
12.1667
    	
%
    
	
Senator Investment Group
    	
 
    	
$
    	
1,200,000
    	
 
    	
4
    	
%
    
	
SENATOR GLOBAL OPPORTUNITY   MASTER FUND L.P.
    	
 
    	
$
    	
1,200,000
    	
 
    	
4
    	
%
    
	
TPG
    	
 
    	
$
    	
6,650,000
    	
 
    	
22.1667
    	
%
    
	
TCS II DEBT SOLUTIONS II   (OFFSHORE), LLC 
    	
 
    	
$
    	
6,317,500
    	
 
    	
21.06
    	
%
    
	
TCS II OPPORTUNITIES DEBT   SOLUTIONS II (OFFSHORE), LLC
    	
 
    	
$
    	
332,500.00
    	
 
    	
1.11
    	
%
    
	
Total:
    	
 
    	
$
    	
30,000,000
    	
 
    	
100.00
    	
%
    

 

 

SCHEDULE IB

 

TERM B LENDERS AND TERM B LENDERS’ LOANS

 

	
Lender Name
    	
 
    	
Loan Amount
    	
 
    	
Applicable
   Percentage
    	
 
    
	
ALJ Capital
    	
 
    	
$
    	
4,510,853.25
    	
 
    	
4.51
    	
%
    
	
ALJ CAPITAL I, L.P. 
    	
 
    	
$
    	
392,453.25
    	
 
    	
0.392
    	
%
    
	
ALJ CAPITAL II, L.P. 
    	
 
    	
$
    	
2,076,000.00
    	
 
    	
2.076
    	
%
    
	
LJR CAPITAL L.P. 
    	
 
    	
$
    	
2,042,400.00
    	
 
    	
2.042
    	
%
    
	
Alliance Capital
    	
 
    	
$
    	
1,561,828.51
    	
 
    	
1.56
    	
%
    
	
ALLIANCEBERNSTEIN EVENT   DRIVEN OPPORTUNITIES FUND (DELAWARE), L.P.
    	
 
    	
$
    	
448,242.76
    	
 
    	
0.45
    	
%
    
	
ALLIANCEBERNSTEIN STRATEGIC   OPPORTUNITIES FUND, L.P.
    	
 
    	
$
    	
1,113,585.75
    	
 
    	
1.11
    	
%
    
	
Altai Capital Management
    	
 
    	
$
    	
3,110,244.99
    	
 
    	
3.11
    	
%
    
	
ALTAI CAPITAL MASTER   FUND, LTD. 
    	
 
    	
$
    	
3,110,244.99
    	
 
    	
3.11
    	
%
    
	
Apollo / Stone Tower
    	
 
    	
$
    	
11,220,196.35
    	
 
    	
11.22
    	
%
    
	
APOLLO INVESTMENT   CORPORATION 
    	
 
    	
$
    	
11,220,196.35
    	
 
    	
11.22
    	
%
    
	
Credit Suisse
    	
 
    	
$
    	
444,320.71
    	
 
    	
0.44
    	
%
    
	
CREDIT SUISSE LOAN FUNDING   LLC 
    	
 
    	
$
    	
444,320.71
    	
 
    	
0.44
    	
%
    
	
DK Partners
    	
 
    	
$
    	
26,889,755.01
    	
 
    	
26.89
    	
%
    
	
MIDTOWN ACQUISITIONS L.P.
    	
 
    	
$
    	
26,889,755.01
    	
 
    	
26.89
    	
%
    
	
Macquarie Group
    	
 
    	
$
    	
6,456,570.16
    	
 
    	
6.46
    	
%
    
	
MACQUARIE BANK LIMITED
    	
 
    	
$
    	
6,456,570.16
    	
 
    	
6.46
    	
%
    
	
Redwood Capital Management
    	
 
    	
$
    	
10,692,353.30
    	
 
    	
10.69
    	
%
    
	
REDWOOD MASTER   FUND, LTD. 
    	
 
    	
$
    	
10,692,353.30
    	
 
    	
10.69
    	
%
    
	
Seix Advisors
    	
 
    	
$
    	
12,002,227.17
    	
 
    	
12.00
    	
%
    
	
RIDGEWORTH HIGH INCOME   FUND 
    	
 
    	
$
    	
4,846,436.53
    	
 
    	
4.48
    	
%
    
	
RIDGEWORTH SEIX FLOATING RATE   HIGH INCOME FUND 
    	
 
    	
$
    	
6,316,024.50
    	
 
    	
5.84
    	
%
    
	
ROCHDALE FIXED INCOME   PORTFOLIOS
    	
 
    	
$
    	
351,013.36
    	
 
    	
0.32
    	
%
    
	
SEIX MULTI-SECTOR ABSOLUTE   RETURN FUND LP 
    	
 
    	
$
    	
444,320.71
    	
 
    	
0.41
    	
%
    
	
UNIVERSITY OF ROCHESTER 
    	
 
    	
$
    	
44,432.07
    	
 
    	
0.04
    	
%
    
	
Senator Investment Group
    	
 
    	
$
    	
3,554,565.70
    	
 
    	
3.55
    	
%
    
	
SENATOR GLOBAL OPPORTUNITY   MASTER FUND L.P.
    	
 
    	
$
    	
3,554,565.70
    	
 
    	
3.55
    	
%
    
	
TPG
    	
 
    	
$
    	
19,557,084.84
    	
 
    	
19.56
    	
%
    
	
TCS II OPPORTUNITIES, L.P.   
    	
 
    	
$
    	
840,771.06
    	
 
    	
0.84
    	
%
    
	
TPG CREDIT OPPORTUNITIES   FUND L.P. 
    	
 
    	
$
    	
1,989,668.15
    	
 
    	
1.99
    	
%
    

 

 

	
Lender Name
    	
 
    	
Loan Amount
    	
 
    	
Applicable
   Percentage
    	
 
    
	
TPG CREDIT OPPORTUNITIES   INVESTORS, L.P.
    	
 
    	
$
    	
2,221,603.56
    	
 
    	
2.22
    	
%
    
	
TPG CREDIT STRATEGIES FUND   II, L.P. 
    	
 
    	
$
    	
13,172,079.93
    	
 
    	
13.17
    	
%
    
	
TPG CREDIT STRATEGIES   FUND, L.P. 
    	
 
    	
$
    	
1,332,962.14
    	
 
    	
1.33
    	
%
    
	
Total:
    	
 
    	
$
    	
100,000,000
    	
 
    	
100.00
    	
%
    

 

 

SCHEDULE 1.01(a)

 

SUBSIDIARY GUARANTORS

 

Aventine Renewable Energy, Inc.

 

Aventine Renewable Energy — Aurora West, LLC

 

Aventine Renewable Energy — Mt Vernon, LLC

 

Aventine Power, LLC

 

Nebraska Energy, L.L.C.

 

Aventine Renewable Energy — Canton, LLC

 

 

SCHEDULE 4.01(e)

 

DISCLOSED LITIGATION

 

1.                                       On May 31, 2012, the Borrower served Aurora Cooperative Elevator Company (“Aurora”) with a petition for declaratory relief filed in the District Court of Dallas County, Texas, 160th Judicial District.  The petition alleges, among other things, that Aurora has improperly threatened — in direct contravention of the agreement between the Borrower and Aurora — to invoke a contractual option to repurchase the land on which the Borrower’s Aurora West ethanol plant (the “Plant”) is located.  Aurora’s stated position is that Aurora has the right to invoke the option if the Plant has not been producing ethanol for thirty days, at a daily rate equivalent to an annualized production rate of 90 million gallons, by July 31, 2012.

 

The petition alleges that the contract setting forth the option does not require thirty days of production in order to prevent Aurora’s exercise of the contractual option.  Rather the Borrower asserts the contract only requires that the Borrower “diligently pursue construction” of the Plant “to completion by July 1, 2012,” where “diligently pursue construction . . . to completion” does not mean “operation” or “production.” The Borrower is seeking a declaratory judgment that the Borrower was not required to operate the plant or produce ethanol at the Plant at the rates or amounts asserted by Aurora before July 31, 2012 and the Borrower need not operate the Plant or meet the production requirements to avoid the exercise of the contractual option.  On June 22, 2012, Aurora removed the action to the United States District Court for the Northern District of Texas.  The Borrower intends to pursue any and all rights available to it with respect to the foregoing.

 

On June 21, 2012, Aurora initiated a separate counter-action against the Borrower in the District Court of Hamilton County, Nebraska.  The petition alleges that the Borrower has repudiated its agreement with Aurora—the same agreement at issue in the litigation in Texas—and seeks specific performance under its terms.  Aurora’s position is that the Borrower did not “diligently pursue construction . . . to completion” because it did not operate the Plant to demonstrate that it was complete.  Aurora has asked for a judgment requiring the Borrower to sell the land on which the Plant is located.  On July 3, 2012, the Borrower removed the action to the United States District Court for the District of Nebraska.  The Borrower intends to defend all of its rights with respect to the agreement and its Plant.

 

2.                                       On Monday, September 16, 2012, Aurora provided the Borrower with a courtesy copy of a letter of complaint initiating an arbitration before the National Grain and Feed Association (the “NGFA Arbitration”). The letter of complaint claims that the Borrower is liable to Aurora for approximately $1.8 million for losses allegedly sustained by Aurora in connection with certain quantities of corn that Aurora claims it purchased for the Borrower under the Aventine Grain Supply Agreement, which governs certain corn purchases for the Borrower’s Aurora West ethanol facility.  The Borrower disputes liability.

 

 

On the same date, the Borrower sent to Aurora a letter noting that Aurora is past due on certain payments required to be made under that same Grain Supply Agreement and under the Aventine Marketing Agreement, and therefore terminating both agreements.  On Thursday, September 19, 2012, Aurora provided the Borrower with a courtesy copy of a complaint filed by Aurora in federal court in Nebraska (the “Termination Litigation”), in which Aurora principally seeks a declaration that the Grain Supply Agreement and Marketing Agreement were not terminable on the grounds asserted by the Borrower, and that these agreements remain in effect.  The Borrower contends that these agreements were terminable and have been terminated, and intends to vigorously defend its rights in connection with both the NGFA Arbitration and the Termination Litigation.

 

 

SCHEDULE 5.01(a)

 

JURISDICTIONS OF FORMATION AND QUALIFICATION

 

	
Loan Party
    	
 
    	
State of Formation
    
	
Borrower
    	
 
    	
Delaware
    
	
Aventine   Renewable Energy, Inc.
    	
 
    	
Delaware
    
	
Aventine   Renewable Energy — Aurora West, LLC
    	
 
    	
Delaware
    
	
Aventine   Renewable Energy — Mt Vernon, LLC
    	
 
    	
Delaware
    
	
Aventine   Power, LLC
    	
 
    	
Delaware
    
	
Nebraska Energy, L.L.C.
    	
 
    	
Kansas
    
	
Aventine   Renewable Energy — Canton, LLC
    	
 
    	
Delaware
    

 

	
Loan Party
    	
 
    	
State of Qualification
    
	
Borrower
    	
 
    	
N/A
    	
 
    	
 
    
	
Aventine   Renewable Energy, Inc.
    	
 
    	
Alabama
    	
 
    	
Montana
    
	
 
    	
 
    	
Arkansas
    	
 
    	
Nebraska
    
	
 
    	
 
    	
California
    	
 
    	
Nevada
    
	
 
    	
 
    	
Colorado
    	
 
    	
New Jersey
    
	
 
    	
 
    	
Connecticut
    	
 
    	
New York
    
	
 
    	
 
    	
Florida
    	
 
    	
North Carolina
    
	
 
    	
 
    	
Hawaii
    	
 
    	
North Dakota
    
	
 
    	
 
    	
Illinois
    	
 
    	
Ohio
    
	
 
    	
 
    	
Indiana
    	
 
    	
Oklahoma
    
	
 
    	
 
    	
Iowa
    	
 
    	
Oregon
    
	
 
    	
 
    	
Kansas
    	
 
    	
Pennsylvania
    
	
 
    	
 
    	
Kentucky
    	
 
    	
South Dakota
    
	
 
    	
 
    	
Louisiana
    	
 
    	
Tennessee
    
	
 
    	
 
    	
Michigan
    	
 
    	
Texas
    
	
 
    	
 
    	
Mississippi
    	
 
    	
Virginia
    
	
 
    	
 
    	
Missouri
    	
 
    	
Washington
    
	
 
    	
 
    	
 
    	
 
    	
Wisconsin
    
	
Nebraska Energy, L.L.C.
    	
 
    	
Nebraska
    	
 
    	
 
    
	
Aventine   Renewable Energy — Aurora West, LLC
    	
 
    	
Nebraska
    	
 
    	
 
    
	
Aventine   Renewable Energy — Mt Vernon, LLC
    	
 
    	
Indiana
    	
 
    	
 
    
	
Aventine   Power, LLC
    	
 
    	
Illinois
    	
 
    	
 
    
	
Aventine   Renewable Energy — Canton, LLC
    	
 
    	
Illinois
    	
 
    	
 
    

 

 

SCHEDULE 5.01(b)

 

SUBSIDIARIES

 

	
Loan Party
    	
 
    	
Subsidiary
    
	
Borrower
    	
 
    	
Aventine   Renewable Energy, Inc.
    
	
 
    	
 
    	
Aventine   Renewable Energy — Aurora West, LLC
    
	
 
    	
 
    	
Aventine   Renewable Energy — Mt Vernon, LLC
    
	
 
    	
 
    	
Aventine   Power, LLC
    
	
 
    	
 
    	
Nebraska Energy, L.L.C.‡
    
	
 
    	
 
    	
Aventine Renewable Energy — Canton, LLC
    

 

‡  78.414% of membership interest held by Borrower; 21.586% of membership interest held by Aventine Renewable Energy, Inc.

 

 

SCHEDULE 5.02

 

APPROVALS, CONSENTS, AUTHORIZATIONS

 

None.

 

 

SCHEDULE 5.03

 

ENTITY NAMES

 

Aventine Renewable Energy — Mt Vernon, LLC has also been known as Aventine Renewable Energy — Mt. Vernon, LLC.

 

On October 13, 2008, Aventine Renewable Energy Holdings, Inc. (“Holdings”) completed its purchase of a 21.586% interest in Nebraska Energy, L.L.C. (“NELLC”) that it did not already own from Nebraska Energy Cooperative, Inc.  Holdings then assigned its ownership interest in NELLC to Aventine Renewable Energy, Inc. (“AREI”).  As part of the emergence from bankruptcy, Holdings acquired all interests of Aventine Renewable Energy, LLC (“LLC”) held  in NELLC pursuant to a merger agreement dated March 15, 2010 between LLC and Holdings.  NELLC’s current ownership structure is 78.414% owned by Holdings and 21.586% owned by AREI.

 

On August 6, 2010, Aventine Renewable Energy Holdings, Inc. purchased substantially all of the assets of New CIE Energy Opco, LLC d/b/a/ Riverland Biofuels which comprise its ethanol production facility located at 23133 E County Hwy 6, Canton, IL 61520 (the “Canton Assets”). On December 22, 2010, Aventine Renewable Energy Holdings, Inc. transferred by quitclaim deed the Canton Assets to a newly formed subsidiary, ARE-Canton.

 

 

SCHEDULE 5.05(d)

 

ERISA PLANS

 

Aventine Renewable Energy, Inc. maintains Aventine Renewable Energy, Inc. Hourly Pension Plan, a defined benefit pension plan, for the benefit of certain eligible unionized employees employed at the Pekin, Illinois facility.

 

 

SCHEDULE 5.05(d)(ix)

 

CONTRIBUTIONS TO HEALTH, ACCIDENT OR LIFE INSURANCE BENEFITS

 

Aventine Renewable Energy, Inc. sponsors a healthcare plan that provides postretirement medical benefits to certain “grandfathered” unionized employees.  The plan is contributory, with contributions required at the same rate as contributions paid by active employees.  Benefit eligibility under the plan terminates at age 65.

 

 

SCHEDULE 5.06

 

LICENSES AND PERMITS

 

None.

 

 

SCHEDULE 5.09

 

TAX IDENTIFICATION NUMBERS

 

	
Loan Party
    	
 
    	
FEIN
    
	
Borrower
    	
 
    	
05-0569368
    
	
Aventine   Renewable Energy, Inc.
    	
 
    	
75-3108352
    
	
Aventine   Renewable Energy — Aurora West, LLC
    	
 
    	
20-5359285
    
	
Aventine   Renewable Energy — Mt Vernon, LLC
    	
 
    	
20-5838144
    
	
Aventine   Power, LLC
    	
 
    	
20-5359343
    
	
Nebraska Energy, L.L.C.
    	
 
    	
47-0771872
    
	
Aventine   Renewable Energy — Canton, LLC
    	
 
    	
27-3127915
    

 

 

SCHEDULE 5.15

 

LABOR DISPUTES

 

Approximately 55% of our current full-time employees are represented by a union.  The unionized employees are covered by a collective bargaining agreement between Aventine Renewable Energy, Inc. and the United Steelworkers International Union, Local 7-662.  Our contract with the Union is scheduled to expire on October 31, 2012.

 

 

SCHEDULE 5.16

 

O.S.H.A. AND ENVIRONMENTAL COMPLIANCE

 

None.

 

 

SCHEDULE 5.17(b)(i)

 

MATERIAL OWNED REAL PROPERTY

 

	
Loan Party
    	
 
    	
Property Address
    	
 
    	
County
    
	
Aventine Renewable Energy, Inc.
    	
 
    	
1300 S. Second Street
   Pekin, Illinois 61554
    	
 
    	
Tazewell
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Nebraska Energy,   L.L.C.
    	
 
    	
1205 S. “O” Road
   Aurora, Nebraska 68818
    	
 
    	
Hamilton
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Aventine Renewable Energy — Aurora West, LLC
    	
 
    	
2103 Harvest Drive
   Aurora, Nebraska 68818
    	
 
    	
Hamilton
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Aventine Renewable Energy — Canton, LLC
    	
 
    	
23133 E County Hwy 6
   Canton, IL 61520
    	
 
    	
Fulton
    

 

 

SCHEDULE 5.17(b)(ii)

 

MATERIAL LEASED REAL PROPERTY (LOAN PARTIES AS LESSEE)

 

	
Loan Party
    	
 
    	
Property Address
    	
 
    	
County
    	
 
    	
Lessor
    	
 
    	
Lease Expiration
   and Annual Rent
   Payable
    
	
Aventine Renewable Energy, Inc.
    	
 
    	
5400 LBJ Freeway, Suite 450

Dallas, Texas 75240
    	
 
    	
Dallas
    	
 
    	
Leased*.   Sublessor is:

 

Skywire   Software, LLC

 

6801   Gaylord Parkway, Suite 100

 

Frisco,   TX 75034

 

 
    	
 
    	
May 31,   2015 (4 years and eight months)

 

$11,283.33/month   from October 1, 2010 — September 30, 2011

 

$11,734.67/month   from October 1, 2011 — September 30, 2012
    
	    

    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
*Original   Lessor is:

 

Teachers   Insurance and Annuity Association of America, A New York Corporation
    	
 
    	
$12,186.00/month   from October 1, 2012 — September 30, 2013

 

$12,637.33/month   from October 1, 2013 — September 30, 2014

 

$13,088.67/month   from October 1, 2014 — May 31, 2015
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Aventine Renewable Energy — Mt Vernon, LLC
    	
 
    	
7201 Port Road
   Mt. Vernon, Indiana 47620
    	
 
    	
Posey
    	
 
    	
Ports   of Indiana 150 W. Market Street Suite 100 Indianapolis, IN 46204
    	
 
    	
October 31,   2026 (Six consecutive 5 year terms)

 

$371,200   until fifth anniversary of commencement date. Thereafter use Adjusted Ground   Rent.
    

 

 

SCHEDULE 5.17(b)(iii)

 

MATERIAL LEASED REAL PROPERTY (LOAN PARTIES AS LESSOR)

 

	
Loan Party
    	
 
    	
Lessee
    	
 
    	
Property Address
    	
 
    	
County
    	
 
    	
Lease
   Expiration and
   Annual Rent
   Payable
    
	
Aventine Renewable Energy, Inc.
    	
 
    	
Continental   Carbonic Products, Inc., an Illinois corporation
    	
 
    	
1300 S. Second Street

Pekin, Illinois 61554
    	
 
    	
Tazewell
    	
 
    	
Term and renewal commence with Supply Agreement

 

$1.00 annual rent
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Aventine Renewable Energy, Inc.
    	
 
    	
Linde, Inc., a Delaware corporation
    	
 
    	
1300 S. Second Street

Pekin, Illinois 61554
    	
 
    	
Tazewell
    	
 
    	
Term and renewal commence with CO2 Agreement.

 

$1.00 total consideration
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Aventine Renewable Energy, Inc.
    	
 
    	
Turner Grain Services, Inc., an Illinois   corporation
    	
 
    	
1300 S. Second Street

Pekin, Illinois 61554
    	
 
    	
Tazewell
    	
 
    	
Year to year (from August 1 through   July 31) so long as the Annual Purchase Order between the parties,   relating to Turner’s grain services, is in effect.

 

$1.00 total consideration
    

 

 

SCHEDULE 5.18

 

PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES

 

	
Loan Party
    	
 
    	
Patent/Trademark
    	
 
    	
Registration #
    	
 
    
	
Borrower
    	
 
    	
Trademark   application for “Aventine Renewable Energy and design”
    	
 
    	
3,857,196
    	
 
    
	
Aventine   Renewable Inc.
    	
 
    	
Trademark   for “Aventine Renewable Energy, Inc. and design”
    	
 
    	
2,954,378
    	
 
    
	
Aventine   Renewable Inc.
    	
 
    	
Trademark   for “Aventine”
    	
 
    	
2,928,195
    	
 
    
	
Aventine   Renewable Inc.
    	
 
    	
Trademark   for “Aventine and design”
    	
 
    	
2,937,415
    	
 
    
	
Aventine   Renewable Inc.
    	
 
    	
Trademark   for “Providing clean, renewable energy for the world”
    	
 
    	
3,428,803
    	
 
    
	
Aventine   Renewable Inc.
    	
 
    	
U.S.   Patent “Heat Recovery from a Biomass Heat Source”
    	
 
    	
7,566,383
    	
 
    
	
Borrower
    	
 
    	
Trademark   for Riverland Biofuels
    	
 
    	
Unregistered
    	
 
    
	
Borrower
    	
 
    	
Trademark   for Riverland Biofuels logo
    	
 
    	
Unregistered
    	
 
    

 

 

SCHEDULE 5.24

 

CAPITAL STOCK

 

	
Loan Party
    	
 
    	
Issuer
    	
 
    	
Ownership Interest
    
	
Borrower —

 

After giving   effect to the transactions contemplated by the Equity Documents, including   the reverse stock split
    	
 
    	
Borrower   (issued and outstanding, excluding treasury stock)
    	
 
    	
Approximately 2,353,444
    	
 
    	
Shares   of common stock
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Borrower —

 

After giving   effect to the transactions contemplated by the Equity Documents, including   the reverse stock split
    	
 
    	
Borrower   (underlying securities of outstanding stock awards, including 2,903 shares   underlying stock options and 2,197 shares underlying RSUs)
    	
 
    	
Approximately 13,843
    	
 
    	
Shares   of common stock
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Borrower —

 

After giving   effect to the transactions contemplated by the Equity Documents, including   the reverse stock split
    	
 
    	
Borrower   (equity holders are unsecured claims stock pool)
    	
 
    	
Approximately 7,658
    	
 
    	
Shares   of common stock
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Borrower —

 

After giving   effect to the transactions contemplated by the Equity Documents, including   the 
    	
 
    	
Borrower   (equity holders are holders of warrants)
    	
 
    	
Approximately 8,991†
    	
 
    	
Unexercised   warrants to purchase shares of common stock
    

 

†  The unexercised warrants will expire shortly after the Closing in accordance with their terms. Otherwise, the unexercised warrants may be subject to further adjustment as a result of the warrant issuance under Section 4.1(d) or (f) of the related warrant agreement.

 

 

	
reverse stock   split
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Borrower
    	
 
    	
Aventine   Renewable Energy, Inc.
    	
 
    	
1,000
    	
 
    	
Shares   of common stock (100%)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Borrower
    	
 
    	
Aventine   Renewable Energy — Aurora West, LLC
    	
 
    	
100%
    	
 
    	
Membership   interests
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Borrower
    	
 
    	
Aventine   Renewable Energy — Mt Vernon, LLC
    	
 
    	
100%
    	
 
    	
Membership   interests
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Borrower
    	
 
    	
Aventine   Power, LLC
    	
 
    	
100%
    	
 
    	
Membership   interests
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Borrower
    	
 
    	
Nebraska Energy, L.L.C.
    	
 
    	
78.414%
    	
 
    	
Membership   interests
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Aventine   Renewable Energy, Inc.
    	
 
    	
Nebraska Energy, L.L.C.
    	
 
    	
21.586%
    	
 
    	
Membership interests
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Borrower
    	
 
    	
Aventine   Renewable Energy — Canton, LLC
    	
 
    	
100%
    	
 
    	
Membership interests
    

 

 

SCHEDULE 7.01

 

EXISTING LIENS

 

	
Name of
   Debtor
    	
 
    	
Name of
   Current
   Secured
   Party
    	
 
    	
Jurisdiction
    	
 
    	
Filing Date
    	
 
    	
File Number
    	
 
    	
Type of Lien
    
	
Aventine   Renewable Energy Holdings, Inc.
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Delaware
    	
 
    	
03/15/2010
    	
 
    	
2010   0883375
    	
 
    	
UCC-1   securing goods, accounts, etc. under the Existing Revolving Facility
    
	
Aventine   Renewable Energy Holdings, Inc.
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Delaware
    	
 
    	
07/20/2011
    	
 
    	
2011
   2805284
    	
 
    	
UCC-1   securing all personal property
    
	
Aventine   Renewable Energy Holdings, Inc.
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Delaware
    	
 
    	
07/20/2011
    	
 
    	
2011
   2805292
    	
 
    	
UCC-1   securing all personal property
    
	
Aventine   Renewable Energy Holdings, Inc.
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Delaware
    	
 
    	
07/20/2011
    	
 
    	
2011
   2805300
    	
 
    	
UCC-1   securing all personal property
    
	
Aventine   Renewable Energy Holdings, Inc.
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Delaware
    	
 
    	
07/20/2011
    	
 
    	
2011
   2805656
    	
 
    	
UCC-1   securing all personal property
    
	
Aventine   Renewable Energy Holdings, Inc.
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Delaware
    	
 
    	
07/20/2011
    	
 
    	
2011
   2805706
    	
 
    	
UCC-1   securing all personal property
    
	
Aventine   Renewable Energy, Inc.
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Delaware
    	
 
    	
03/15/2010
    	
 
    	
2010   0883417
    	
 
    	
UCC-1   securing goods, accounts, etc. under the Existing Revolving Facility
    

 

 

	
Name of
   Debtor
    	
 
    	
Name of
   Current
   Secured
   Party
    	
 
    	
Jurisdiction
    	
 
    	
Filing Date
    	
 
    	
File Number
    	
 
    	
Type of Lien
    
	
Aventine   Renewable Energy, Inc.
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Delaware
    	
 
    	
07/20/2011
    	
 
    	
2011

2805888
    	
 
    	
UCC-1   securing all personal property
    
	
Aventine   Renewable Energy, Inc.
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Delaware
    	
 
    	
07/20/2011
    	
 
    	
2011

2814484
    	
 
    	
UCC-1   securing all personal property, including the commercial tort claim against   Agri-Energy, LLC and its affiliates
    
	
Aventine   Renewable Energy, Inc.
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Delaware
    	
 
    	
07/20/2011
    	
 
    	
2011

2814500
    	
 
    	
UCC-1   securing all personal property, including the commercial tort claim against   e-Biofuels, LLC and Imperial Petroleum, Inc. and their affiliates
    
	
Aventine   Renewable Energy, Inc.
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Delaware
    	
 
    	
07/20/2011
    	
 
    	
2011

2814575
    	
 
    	
UCC-1   securing all personal property, including the commercial tort claim against J   Double R, L.L.C. and its affiliates
    
	
Aventine   Renewable Energy, Inc.
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Delaware
    	
 
    	
07/20/2011
    	
 
    	
2011

2814633
    	
 
    	
UCC-1   securing all personal property, including the commercial tort claim against   JP 
    

 

 

	
Name of
   Debtor
    	
 
    	
Name of
   Current
   Secured
   Party
    	
 
    	
Jurisdiction
    	
 
    	
Filing Date
    	
 
    	
File Number
    	
 
    	
Type of Lien
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Morgan   Securities, Inc. and JP Morgan Chase Bank, N.A. and their affiliates
    
	
Aventine   Renewable Energy — Aurora West, LLC
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Delaware
    	
 
    	
03/15/2010
    	
 
    	
2010   0883243
    	
 
    	
UCC-1   securing goods, accounts, etc. under the Existing Revolving Facility
    
	
Aventine   Renewable Energy — Aurora West, LLC

 
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Delaware
    	
 
    	
07/20/2011
    	
 
    	
2011

2806035
    	
 
    	
UCC-1   securing all personal property
    
	
Aventine   Renewable Energy — Aurora West, LLC

 
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Delaware
    	
 
    	
07/20/2011
    	
 
    	
2011

2806068
    	
 
    	
UCC-1   securing all personal property
    
	
Aventine   Renewable Energy — Mt Vernon, LLC
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Delaware
    	
 
    	
03/15/2010
    	
 
    	
2010   0883276
    	
 
    	
UCC-1   securing goods, accounts, etc. under the Existing Revolving Facility
    
	
Aventine   Renewable Energy — Mt Vernon, LLC
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Delaware
    	
 
    	
07/20/2011
    	
 
    	
2011

2806324
    	
 
    	
UCC-1   securing all personal property
    
	
Aventine   Renewable Energy — Mt Vernon, LLC
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent

 
    	
 
    	
Delaware
    	
 
    	
07/20/2011
    	
 
    	
2011

2806415
    	
 
    	
UCC-1   securing all personal property
    

 

 

	
Name of
   Debtor
    	
 
    	
Name of
   Current
   Secured
   Party
    	
 
    	
Jurisdiction
    	
 
    	
Filing Date
    	
 
    	
File Number
    	
 
    	
Type of Lien
    
	
Aventine   Renewable Energy — Mt Vernon, LLC

 
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Delaware
    	
 
    	
07/20/2011
    	
 
    	
2011

2806431
    	
 
    	
UCC-1   securing all personal property
    
	
Aventine   Renewable Energy — Mt Vernon, LLC

 
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Delaware
    	
 
    	
07/20/2011
    	
 
    	
2011

2806480

 
    	
 
    	
UCC-1   securing all personal property
    
	
Nebraska Energy, L.L.C.
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Kansas
    	
 
    	
03/16/2010
    	
 
    	
6680268
    	
 
    	
UCC-1   securing goods, accounts, etc. under the Existing Revolving Facility
    
	
Nebraska Energy, L.L.C.
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Kansas
    	
 
    	
07/20/2011
    	
 
    	
6818181

 
    	
 
    	
UCC-1   securing all personal property
    
	
Nebraska Energy, L.L.C.
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Kansas
    	
 
    	
07/20/2011
    	
 
    	
6818199

 
    	
 
    	
UCC-1   securing all personal property
    
	
Nebraska Energy, L.L.C.
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Kansas
    	
 
    	
07/20/2011
    	
 
    	
6818207

 
    	
 
    	
UCC-1   securing all personal property
    
	
Aventine   Power, LLC
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Delaware
    	
 
    	
03/15/2010
    	
 
    	
2010   08833110
    	
 
    	
UCC-1   securing goods, accounts, etc. under the Existing Revolving Facility
    
	
Aventine   Power, 
    	
 
    	
Wells   Fargo Capital 

 
    	
 
    	
Delaware
    	
 
    	
07/20/2011
    	
 
    	
2011

2814245
    	
 
    	
UCC-1   securing all personal 
    

 

 

	
Name of
   Debtor
    	
 
    	
Name of
   Current
   Secured
   Party
    	
 
    	
Jurisdiction
    	
 
    	
Filing Date
    	
 
    	
File Number
    	
 
    	
Type of Lien
    
	
LLC
    	
 
    	
Finance,   LLC, as Agent
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
property
    
	
Aventine   Power, LLC
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent

 
    	
 
    	
Delaware
    	
 
    	
07/20/2011
    	
 
    	
2011

2814385
    	
 
    	
UCC-1   securing all personal property
    
	
Aventine   Renewable Energy — Canton, LLC

 
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Delaware
    	
 
    	
12/23/2010
    	
 
    	
2010

4582510
    	
 
    	
UCC-1   securing goods, accounts, etc.
    
	
Aventine   Renewable Energy — Canton, LLC

 
    	
 
    	
Wells   Fargo Capital Finance, LLC, as Agent
    	
 
    	
Delaware
    	
 
    	
07/20/2011
    	
 
    	
2011

2806506
    	
 
    	
UCC-1   securing all personal property
    
	
Aventine   Renewable Energy Holdings, Inc.
    	
 
    	
Aurora   Cooperative Elevator Company
    	
 
    	
Hamilton   County, NE
    	
 
    	
08/06/2007
    	
 
    	
Memorandum   of Real Estate Option by and between Aventine Renewable Energy   Holdings, Inc. and Aurora Cooperative Elevator Company dated   July 24, 2007, recorded August 6, 2007, as Book 46, Page 235,   as affected by the Memorandum of Amended Real Estate Option dated   March 15, 2010, recorded April 1, 2010, as Book 48, Page 77,   by and between Aventine Renewable Energy Holdings, Inc. and Aurora   Cooperative Elevator Company
    
	
Aventine   Renewable Energy Holdings, Inc
    	
 
    	
Spoon   River Electric Cooperative
    	
 
    	
Fulton   County, IL
    	
 
    	
09/06/2006
    	
 
    	
Mortgage   made by Central Illinois Energy Cooperative to Spoon River Electric   Cooperative dated September 6, 2006, recorded September 7, 2006, as   Document 
    

 

 

	
Name of
   Debtor
    	
 
    	
Name of
   Current
   Secured
   Party
    	
 
    	
Jurisdiction
    	
 
    	
Filing Date
    	
 
    	
File Number
    	
 
    	
Type of Lien
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0607109,   as affected by Assignment and Assumption of Mortgage dated August 6,   2010, recorded August 19, 2010, as Document 1035196, from New CIE Energy   Opco, LLC, to Aventine Renewable Energy Holdings, Inc. (the “Spoon River Mortgage”)
    
	
Aventine   Renewable Energy, Inc.
    	
 
    	
PNC   Bank, National Association, as Agent (assigned   to Wells Fargo Capital Finance, LLC, as Agent)
    	
 
    	
Tazewell   County, Illinois
    	
 
    	
04/18/2011
    	
 
    	
201100006947
    	
 
    	
Mortgage   recorded to secure repayment indebtedness of $30,000,000 to PNC Bank,   National Association, as Agent (assigned to Wells Fargo Capital Finance, LLC,   as Agent)
    
	
Aventine   Renewable Energy — Aurora West, LLC
    	
 
    	
Chicago   Title Insurance Company, as Trustee, for the benefit of PNC Bank, National   Association, as Agent (assigned to   Wells Fargo Capital Finance, LLC, as Agent)
    	
 
    	
Hamilton   County, Nebraska
    	
 
    	
03/29/2011
    	
 
    	
Book   267, Page 80
    	
 
    	
Deed   of Trust recorded to secure repayment indebtedness of $30,000,000 to PNC   Bank, National Association, as Agent (assigned to Wells Fargo Capital   Finance, LLC, as Agent)
    
	
Aventine   Renewable Energy — Mt Vernon, LLC
    	
 
    	
PNC   Bank, National Association, as Agent (assigned   to Wells Fargo 
    	
 
    	
Posey   County, Indiana
    	
 
    	
04/14/2011
    	
 
    	
201101532
    	
 
    	
Deed   of Trust recorded to secure repayment indebtedness of $30,000,000 to PNC   Bank, 
    

 

 

	
Name of
   Debtor
    	
 
    	
Name of
   Current
   Secured
   Party
    	
 
    	
Jurisdiction
    	
 
    	
Filing Date
    	
 
    	
File Number
    	
 
    	
Type of Lien
    
	
 
    	
 
    	
Capital Finance, LLC, as Agent)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
National   Association, as Agent (assigned to Wells Fargo Capital Finance, LLC, as   Agent)
    
	
Aventine   Renewable Energy — Canton, LLC
    	
 
    	
PNC   Bank, National Association, as Agent (assigned   to Wells Fargo Capital Finance, LLC, as Agent)
    	
 
    	
Fulton   County, Illinois
    	
 
    	
04/01/2011
    	
 
    	
1139256
    	
 
    	
Mortgage   recorded to secure repayment indebtedness of $30,000,000 to PNC Bank,   National Association, as Agent (assigned to Wells Fargo Capital Finance, LLC,   as Agent)
    
	
Aventine   Renewable Energy — Canton, LLC
    	
 
    	
N/A
    	
 
    	
Fulton   County, IL
    	
 
    	
10/01/2009
    	
 
    	
Document   0929775
    	
 
    	
Development   Agreement by and between the County of Fulton, Illinois and Riverland   Biofuels, LLC.
    
	
Aventine   Renewable Energy, Inc.
    	
 
    	
N/A
    	
 
    	
Tazewell   County, IL
    	
 
    	
05/06/1968
    	
 
    	
Vol.   792, Pg. 455
    	
 
    	
Mineral   rights reserved by Peoria Terminal Company in Warranty Deed to Corn Products   Company dated April 26, 1968.
    
	
Aventine   Renewable Energy — Mt Vernon, LLC
    	
 
    	
N/A
    	
 
    	
Posey   County, IN
    	
 
    	
12/08/1942
    	
 
    	
Deed   Record 56, Pg. 343
    	
 
    	
Mineral   reservation contained in Warranty Deed from Alonzo Allyn and Olive B. Allyn,   his wife, 
    

 

 

	
Name of
   Debtor
    	
 
    	
Name of
   Current
   Secured
   Party
    	
 
    	
Jurisdiction
    	
 
    	
Filing Date
    	
 
    	
File Number
    	
 
    	
Type of Lien
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
to   Casper Graulich and Julia Graulich, husband and wife, dated November 19,   1942.
    
	
Nebraska   Energy, L.L.C.
    	
 
    	
Wilmington   Trust, FSB, as Collateral Agent
    	
 
    	
Hamilton   County, NE
    	
 
    	
03/19/2010
    	
 
    	
Book   259, Page 172
    	
 
    	
UCC-1   securing all right, title and interest to real property described in   Exhibit A thereto and all improvements, fixture property, security   property, leases, rents, agreements, and awards related thereto.(3)
    
	
Aventine   Renewable Energy Holdings, Inc.
    	
 
    	
Wilmington   Trust, FSB, as Collateral Agent
    	
 
    	
Hamilton   County, NE
    	
 
    	
05/21/2010
    	
 
    	
Book   261, Page 37
    	
 
    	
UCC-1   securing all right, title and interest to real property described in   Exhibit A thereto and all improvements, fixture property, security   property, leases, rents, agreements, and awards related thereto. (3)
    

 

(3)  The release of the liens will be delivered to the title company.

 

 

SCHEDULE 7.02

 

EXISTING INDEBTEDNESS

 

1.               Equipment Lease Contract, dated June 30, 2006, as amended, by and between New CIE Energy Opco, LLC and Wabash Power Equipment Co., (New CIE Opco, LLC’s rights, title and interest assigned to Aventine Renewable Energy Holdings, Inc. on July 16, 2010), representing aggregate obligations in the amount of approximately $120,840.46.

 

2.               Agreement, dated October 27, 2009, as amended, by and between New CIE Energy Opco, LLC DBA Riverland Biofuels and U.S. Water Services (New CIE Opco, LLC’s rights, title and interest assigned to Aventine Renewable Energy Holdings, Inc. on July 16, 2010), representing aggregate obligations in the amount of approximately $229,575.

 

3.               The Spoon River Mortgage (as defined in Schedule 7.01) securing indebtedness in the amount of approximately $211,000.

 

 

SCHEDULE 7.07(g)

 

TRANSACTIONS WITH AFFILIATES

 

None.

 

 

SCHEDULE 7.14

 

EXISTING INVESTMENTS

 

Investments by Aventine Renewable Energy, Inc. in membership interests in the following entities: Imperial Petroleum, Inc., Advanced Bio-Energy LLC,  Northeast Iowa Ethanol*, TriStates Ethanol Company LLC* and Fluid Technologies n/k/a Micap Plc*.

 

* Advanced Bio-Energy LLC, Northeast Iowa Ethanol and TriStates Ethanol Company LLC own, maintain and/or operate facilities producing ethanol and other biofuels.  Fluid Technologies n/k/a Micap Plc is a bio-science company servicing the food, pharmaceutical, and agro-chemicals industries. These investments are unlikely to be recoverable and have been written down to $0 on Aventine Renewable Energy, Inc.’s general ledger and financial records.

 

 

SCHEDULE 10.02

 

ADMINISTRATIVE AGENT’S OFFICE; ADDRESSES FOR NOTICES

 

Administrative Agent’s Office

 

Citibank, N.A.

1615 Brett Road, Building No. 3

New Castle, DE  19720

Attention:  Thomas Schmitt

Phone: 302-894-6088

Fax:  212-994-0961

Email:  thomas.schmitt@citi.com

 

Borrower’s Address for Notices

 

Aventine Renewable Energy Holdings, Inc.

5400 LBJ Freeway, Suite 450

Dallas, Texas 75240

Attn: Chief Financial Officer and Corporate Counsel

Telephone: 214-451-6766

Facsimile: 309-347-8451

Email: calvin.stewart@aventinerei.com

 

 

EXHIBIT A

 

FORM OF BORROWING NOTICE

 

Date:                        ,   

 

To:  Citibank, N.A., as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Amended and Restated Senior Secured Term Loan Credit Agreement, dated as of September 24, 2012 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Aventine Renewable Energy Holdings, Inc., a Delaware corporation (the “Borrower”), the Lenders from time to time party thereto, and Citibank, N.A., as Administrative Agent and Collateral Agent.

 

The undersigned hereby requests (select one):

 

o  A Borrowing of the Term Loan A pursuant to Section 2.01(a) of the Agreement

 

o  A Borrowing of a New Loan pursuant to Section 2.10 of the Agreement

 

1.               On                                     .

 

2.               In the amount of $                                              .

 

 

	
 
    	
AVENTINE   RENEWABLE ENERGY HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Form of Borrowing Notice

 

A-1

 

EXHIBIT B

 

PERFECTION CERTIFICATE

 

[See separately attached document]

 

Form of Perfection Certificate

 

B-1

 

EXHIBIT C-1

 

THIS NOTE MAY BE ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX PURPOSES.  FOR INFORMATION ON THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND COMPARABLE YIELD FOR THIS NOTE, PLEASE CONTACT AVENTINE RENEWABLE ENERGY HOLDINGS, INC., 5400 LBJ FREEWAY, SUITE 450, DALLAS, TX 75340, ATTENTION: CORPORATE CONTROLLER.

 

FORM OF TERM LOAN A NOTE

 

                 ,   

 

FOR VALUE RECEIVED, the undersigned (the “Borrower”), hereby promises to pay to [INSERT LENDER NAME] or registered assigns (the “Lender”), in accordance with the provisions of the Credit Agreement referred to herein, (i) the principal amount of the portion of the Term Loan A (as defined in the Credit Agreement) (the “Loan”) made or held by the Lender to the Borrower under that certain Amended and Restated Senior Secured Term Loan Credit Agreement, dated as of September 24, 2012 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Credit Agreement;” the terms defined therein being used herein as therein defined), among Aventine Renewable Energy Holdings, Inc., a Delaware corporation (the “Borrower”), the Lenders from time to time party thereto, and Citibank, N.A., as Administrative Agent and Collateral Agent, and (ii) the Closing Fee added to such principal amount, all in accordance with the terms of the Credit Agreement.

 

The Borrower promises to pay interest on (x) the unpaid principal amount of the Loan made or held by the Lender from the date thereof, and (y) the Closing Fee earned by the Lender on such date and added to such principal amount, in each case, until such principal amount is paid in full, at such interest rates and at such times as provided in the Credit Agreement.  The Borrower promises to pay the Exit Fee earned by the Lender pursuant to the Credit Agreement on the date the principal amount of the Loan is required to be paid in full or the principal amount of the Loan is otherwise paid in full.  All payments of principal, interest and fees shall be made to the Administrative Agent for the account of the Lender in Dollars in immediately available funds at the Administrative Agent’s Office.  If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand in cash, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Credit Agreement.

 

This Note is one of the Notes referred to in the Credit Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein.  This Note is also entitled to the benefits of the Subsidiary Guaranty and is secured by the Collateral.  Upon the occurrence and continuation of one or more of the Events of Default specified in the Credit Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Credit Agreement.  The Loan made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business; provided, however, that the

 

Form of Note

 

C-1

 

failure of the Lender to make any such recordation or endorsement shall not affect the Obligations of the Borrower under this Note.  The Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of its Loan and payments with respect thereto.

 

 

Except as permitted by Section 10.06 of the Credit Agreement, this Note may not be assigned by the Lender to any Person.

 

The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Note.

 

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

	
 
    	
AVENTINE   RENEWABLE ENERGY HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

C-2

 

LOAN AND PAYMENTS WITH RESPECT THERETO

 

	
Date
    	
 
    	
Type of
   Loan Made
    	
 
    	
Amount of
   Loan Made
    	
 
    	
Fees
    	
 
    	
Amount of
   Principal or
   Interest
   Paid This
   Date
    	
 
    	
Outstanding
   Principal
   Balance
   This Date
    	
 
    	
Notation
   Made By
    	
 
    
	
September [    ], 2012
    	
 
    	
Term Loan A
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
																

 

C-3

 

EXHIBIT C-2

 

THIS NOTE MAY BE ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX PURPOSES.  FOR INFORMATION ON THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND COMPARABLE YIELD FOR THIS NOTE, PLEASE CONTACT AVENTINE RENEWABLE ENERGY HOLDINGS, INC., 5400 LBJ FREEWAY, SUITE 450, DALLAS, TX 75340, ATTENTION: CORPORATE CONTROLLER.

 

FORM OF TERM LOAN B NOTE

 

                      ,   

 

FOR VALUE RECEIVED, the undersigned (the “Borrower”), hereby promises to pay to [INSERT LENDER NAME] or registered assigns (the “Lender”), in accordance with the provisions of the Credit Agreement referred to herein, (i) the principal amount of the portion of the Term Loan B (as defined in the Credit Agreement) (the “Loan”) made or held by the Lender to the Borrower under that certain Amended and Restated Senior Secured Term Loan Credit Agreement, dated as of September 24, 2012 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Credit Agreement;” the terms defined therein being used herein as therein defined), among Aventine Renewable Energy Holdings, Inc., a Delaware corporation (the “Borrower”), the Lenders from time to time party thereto, and Citibank, N.A., as Administrative Agent and Collateral Agent, and (ii) all PIK Interest Amounts added to such principal amount, all in accordance with the terms of the Credit Agreement.

 

The Borrower promises to pay interest on (x) the unpaid principal amount of the Loan made or held by the Lender from the date thereof until such principal amount is paid in full, and (y) all PIK Interest Amounts added to such principal amount, in each case, at such interest rates and at such times as provided in the Credit Agreement (such interest to be paid in cash or in kind in accordance with the terms of the Credit Agreement).  All payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in Dollars in immediately available funds (other than interest paid in kind pursuant to the terms of the Credit Agreement) at the Administrative Agent’s Office.  If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand in cash, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Credit Agreement.

 

This Note is one of the Notes referred to in the Credit Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein.  This Note is also entitled to the benefits of the Subsidiary Guaranty and is secured by the Collateral.  Upon the occurrence and continuation of one or more of the Events of Default specified in the Credit Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Credit Agreement.  The Loan made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business; provided, however, that the failure of the Lender to make any such recordation or endorsement shall not affect the 

 

C-1

 

Obligations of the Borrower under this Note.  The Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of its Loan and payments with respect thereto.

 

Except as permitted by Section 10.06 of the Credit Agreement, this Note may not be assigned by the Lender to any Person.

 

The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Note.

 

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

The Term Loan B represents a portion of the Existing Term Loans of the Lender and as to such portion, shall not constitute a novation or release thereof, as further set forth in the Credit Agreement.

 

 

	
 
    	
AVENTINE   RENEWABLE ENERGY HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

C-2

 

LOAN AND PAYMENTS WITH RESPECT THERETO

 

	
Date
    	
 
    	
Type of
   Loan Made
    	
 
    	
Amount of
   Loan Made
    	
 
    	
PIK
   Interest
   Amounts
    	
 
    	
Amount of
   Principal or
   Interest
   Paid This
   Date
    	
 
    	
Outstanding
   Principal
   Balance
   This Date
    	
 
    	
Notation
   Made By
    	
 
    
	
September [    ], 2012
    	
 
    	
Term Loan B
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
																

 

Form of Compliance Certificate

 

D-1

 

EXHIBIT D

 

FORM OF COMPLIANCE CERTIFICATE

 

Financial Statement Date:                  ,   

 

To:  Citibank, N.A., as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Amended and Restated Senior Secured Term Loan Credit Agreement, dated as of September 24, 2012 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Aventine Renewable Energy Holdings, Inc., a Delaware corporation (the “Borrower”), the Lenders from time to time party thereto, and Citibank, N.A., as Administrative Agent and Collateral Agent.

 

The undersigned Responsible Officer(1) hereby certifies (on behalf of the Borrower and not in [his][her individual capacity) as of the date hereof that he/she is the                                                  of the Borrower, and that, as such, he/she is authorized to execute and deliver this Certificate to the Administrative Agent on the behalf of the Borrower, and that:

 

[Use following paragraph 1 for fiscal year-end financial statements]

 

1.             The Borrower has delivered the year-end consolidated audited financial statements required by Section 6.01(a) of the Agreement for the fiscal year of the Borrower ended as of the above date, together with the report and opinion of an independent certified public accountant required by such section and Plant-Level Financial Statements (as defined in the Agreement).

 

[Use following paragraph 1 for fiscal quarter-end financial statements]

 

1.             The Borrower has delivered the unaudited financial statements required by Section 6.01(b) of the Agreement for the fiscal quarter of the Borrower ended as of the above date.  Such consolidated financial statements and Plant-Level Financial Statements (as defined in the Agreement) fairly present in all material respects the financial condition and results of operations of the Borrower and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.

 

[Use following paragraph 1 for fiscal month-end financial statements]

 

1.             The Borrower has delivered the unaudited financial statements required by Section 6.01(c) of the Agreement for the fiscal month of the Borrower ended as of the above date. Such consolidated financial statements and Plant-Level Financial Statements (as defined in 

 

(1)                                  This certificate should be from the chief executive officer, chief financial officer or treasurer of the Borrower.

 

D-1

 

the Agreement) fairly present in all material respects the financial condition, and results of operations of the Borrower and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.

 

2.             The undersigned has reviewed and is familiar with the terms of the Agreement and has made, or has caused to be made under his/her supervision, a detailed review of the financial condition of the Borrower during the accounting period covered by such financial statements.

 

3.             A review of the activities of the Borrower during such fiscal period has been made with a view to determining whether during such fiscal period the Borrower performed and observed all its Obligations under the Loan Documents, and

 

[select one:]

 

[to the best knowledge of the undersigned during such fiscal period, the Borrower performed and observed each covenant of the Loan Documents applicable to it, and no Default has occurred and is continuing.]

 

--or--

 

[the following covenants or conditions have not been performed or observed and the following is a list of each such Default and its nature and status:]

 

4.             The representations and warranties of the Borrower contained in Article V of the Agreement and all representations and warranties of any Loan Party that are contained in any document furnished at any time under or in connection with the Loan Documents, are true and correct in all material respects on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects as of such earlier date, and except that for purposes of this Compliance Certificate, the representations and warranties contained in subsections (a) and (b) of Section 5.04 of the Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a), (b) and (c), respectively, of Section 6.01 of the Agreement, including the statements in connection with which this Compliance Certificate is delivered.

 

5.             [intentionally omitted].

 

D-2

 

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of                                     ,                                 .

 

	
 
    	
AVENTINE   RENEWABLE ENERGY HOLDINGS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
[Chief   Executive Officer]  [Chief Financial
   Officer]  [Treasurer]
    

 

D-3

 

EXHIBIT  E-1

 

ASSIGNMENT AND ASSUMPTION (NON-DUTCH AUCTION)

 

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [the][each](2) Assignor identified in item 1 below ([the][each, an] “Assignor”) and [the][each](3) Assignee identified in item 2 below ([the][each, an] “Assignee”).  [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees](4) hereunder are several and not joint.](5)   Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below, receipt of a copy of which is hereby acknowledged by [the][each] Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the Term  Facility and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other Loan Document, and any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] “Assigned Interest”).  [Each such][Such] sale 

 

(2)                                  For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language.  If the assignment is from multiple Assignors, choose the second bracketed language.

 

(3)                                  For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language.  If the assignment is to multiple Assignees, choose the second bracketed language.

 

(4)                                  Select as applicable for multiple Assignors or Assignees.

 

(5)                                  Include bracketed language if there are either multiple Assignors or multiple Assignees.

 

Form of Assignment and Assumption (Non-Dutch Auction)

 

E-1-1

 

and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.

 

	
1.
    	
Assignor[s]:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
2.
    	
Assignee[s]:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
[for each   Assignee, indicate [Lender][Affiliate][Approved   Fund][Affiliated Lender] of [identify Lender][Person   approved by Administrative Agent and Borrower]]
    
	
 
    	
 
    
	
3.
    	
Borrower: Aventine   Renewable Energy Holdings, Inc.
    
	
 
    	
 
    
	
4.
    	
Administrative   Agent: Citibank, N.A., as the administrative agent under the Credit   Agreement
    
	
 
    	
 
    
	
5.
    	
Credit   Agreement: Amended and Restated Senior Secured Term Loan   Credit Agreement, dated as of September 24, 2012 (as amended, restated,   extended, supplemented or otherwise modified in writing from time to time,   the “Credit Agreement”), among Aventine Renewable Energy Holdings,   Inc., a Delaware corporation, as Borrower, the Lenders from time to time   party thereto, and Citibank, N.A., as Administrative Agent and Collateral Agent.
    
	
 
    	
 
    
	
6.
    	
Assigned   Interest:
    

 

Term Facility

 

	
Assignor[s](6)
    	
 
    	
Assignee[s](7)
    	
 
    	
Aggregate Amount
   of
   Commitment/[Term
   Loan A] [Term
   Loan B] for all
   Lenders(8)
    	
 
    	
Amount of
   Commitment
   /[Term Loan
   A] [Term
   Loan B]
   Assigned
    	
 
    	
Percentage
   Assigned of
   Commitment/
   [Term Loan
   A][Term
   Loan B](9)
    	
 
    	
CUSIP
   Number
    	
 
    
	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    	
 
    	
 
    	
 
    	
 
    

 

(6)                                  List each Assignor, as appropriate.

 

(7)                                  List each Assignee, as appropriate.

 

(8)                                  Amounts in this column and in the column immediately to the right to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date.

 

(9)                                  Set forth, to at least 9 decimals, as a percentage of the Commitment/[Term Loan A] [Term Loan B] of all Lenders thereunder.

 

E-1-2

 

New Term Loan Facility(10)

 

	
Assignor[s](11)
    	
 
    	
Assignee[s](12)
    	
 
    	
Aggregate
   Amount of
   Commitment/New
   Term Loans for all
   New Lenders(13)
    	
 
    	
Amount of
   Commitment
   /New Term
   Loans
   Assigned
    	
 
    	
Percentage
   Assigned of
   Commitment/
   New Term
   Loans(14)
    	
 
    	
CUSIP 
   Number
    	
 
    
	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    	
 
    	
 
    	
 
    	
 
    

 

[7.                             Trade Date:                                  ](15)

 

Effective Date:                                    , 20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

	
 
    	
ASSIGNOR
    
	
 
    	
[NAME OF   ASSIGNOR]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    

 

	
(10)
    	
 
    	
If   assignment relates to a particular New Term Loan Facility that is effective,   specify tranche for New Term Loan Facility.
    
	
 
    	
 
    	
 
    
	
(11)
    	
 
    	
List   each Assignor, as appropriate.
    
	
 
    	
 
    	
 
    
	
(12)
    	
 
    	
List   each Assignee, as appropriate.
    
	
 
    	
 
    	
 
    
	
(13)
    	
 
    	
Amounts   in this column and in the column immediately to the right to be adjusted by   the counterparties to take into account any payments or prepayments made   between the Trade Date and the Effective Date.
    
	
 
    	
 
    	
 
    
	
(14)
    	
 
    	
Set   forth, to at least 9 decimals, as a percentage of the Commitment/New Term   Loans of all New Lenders thereunder.
    
	
 
    	
 
    	
 
    
	
(15)
    	
 
    	
To   be completed if the Assignor and the Assignee intend that the minimum   assignment amount is to be determined as of the Trade Date.
    

 

E-1-3

 

	
 
    	
ASSIGNEE
    
	
 
    	
[NAME OF   ASSIGNEE]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    

 

	
[Consented to   and](16) Accepted:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
CITIBANK,   N.A., as
    	
 
    	
 
    
	
Administrative Agent
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
[Consented to:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
AVENTINE   RENEWABLE ENERGY HOLDINGS, INC.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Title:](17)
    	
 
    	
 
    

 

	
(16)
    	
 
    	
To   be added only if the consent of the Administrative Agent is required by the   terms of the Credit Agreement.
    
	
 
    	
 
    	
 
    
	
(17)
    	
 
    	
To   be added only if the consent of the Borrower is required by the terms of the   Credit Agreement.
    

 

E-1-4

 

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

 

AVENTINE RENEWABLE ENERGY HOLDINGS, INC. 
 CREDIT AGREEMENT

 

STANDARD TERMS AND CONDITIONS FOR

 

ASSIGNMENT AND ASSUMPTION

 

1.             Representations and Warranties.

 

1.1.          Assignor.  [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

 

1.2.          Assignee.  [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under the Credit Agreement (subject to such consents, if any, as may be required the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by [the][such] Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire [the][such] Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 6.01 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, and (vii) if it is a Foreign Lender, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance upon the Administrative Agent, [the][any] Assignor or any other Lender,

 

E-1-5

 

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 Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

 

2.             Payments.  From and after the Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after the Effective Date.

 

3.             General Provisions.  This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

 

E-1-6

 

EXHIBIT E-2

 

ASSIGNMENT AND ASSUMPTION (DUTCH AUCTION)

 

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [the][each](18) Assignor identified in item 1 below ([the][each, an] “Assignor”) and [the][each](19) Assignee identified in item 2 below ([the][each, an] “Assignee”).  [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees](20) hereunder are several and not joint.](21)   Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below, receipt of a copy of which is hereby acknowledged by [the][each] Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the Term  Facility and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other Loan Document, and any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] “Assigned Interest”).  [Each such][Such] sale

 

	
(18)
    	
 
    	
For   bracketed language here and elsewhere in this form relating to the Assignor(s),   if the assignment is from a single Assignor, choose the first bracketed   language. If the assignment is from multiple Assignors, choose the second   bracketed language.
    
	
 
    	
 
    	
 
    
	
(19)
    	
 
    	
For   bracketed language here and elsewhere in this form relating to the Assignee(s),   if the assignment is to a single Assignee, choose the first bracketed   language. If the assignment is to multiple Assignees, choose the second   bracketed language.
    
	
 
    	
 
    	
 
    
	
(20)
    	
 
    	
Select   as applicable for multiple Assignors or Assignees.
    
	
 
    	
 
    	
 
    
	
(21)
    	
 
    	
Include   bracketed language if there are either multiple Assignors or multiple   Assignees.
    

 

Form of Assignment and Assumption (Dutch Auction)

 

E-2-1

 

and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.

 

	
1.
    	
Assignor[s]:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
2.
    	
Assignee[s](22):
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    

 

3.                                       Borrower:  Aventine Renewable Energy Holdings, Inc.

 

4.                                       Administrative Agent:  Citibank, N.A., as the administrative agent under the Credit Agreement

 

5.                                       Credit Agreement: Amended and Restated Senior Secured Term Loan Credit Agreement, dated as of September 24, 2012(as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Credit Agreement”), among Aventine Renewable Energy Holdings, Inc., a Delaware corporation, as Borrower, the Lenders from time to time party thereto, and Citibank, N.A., as Administrative Agent and Collateral Agent.

 

6.                                       Assigned Interest:

 

Term Facility

 

	
Assignor[s](23)
    	
 
    	
Assignee[s](24)
    	
 
    	
Aggregate Amount
   of
   Commitment/[Term
   Loan A] [Term
   Loan B] for all
   Lenders(25)
    	
 
    	
Amount of
   Commitment
   /[Term Loan
   A] [Term
   Loan B]
   Assigned
    	
 
    	
Percentage
   Assigned of
   Commitment/
   [Term Loan
   A] [Term
   Loan B](26)
    	
 
    	
CUSIP
   Number
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
$
    	
  
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
$
    	
  
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
$
    	
  
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    	
 
    	
 
    

 

	
(22)
    	
 
    	
Assignee   must be the Borrower or any of its Subsidiaries.
    
	
 
    	
 
    	
 
    
	
(23)
    	
 
    	
List   each Assignor, as appropriate.
    
	
 
    	
 
    	
 
    
	
(24)
    	
 
    	
List   each Assignee, as appropriate.
    
	
 
    	
 
    	
 
    
	
(25)
    	
 
    	
Amounts   in this column and in the column immediately to the right to be adjusted by   the counterparties to take into account any payments or prepayments made   between the Trade Date and the Effective Date.
    
	
 
    	
 
    	
 
    
	
(26)
    	
 
    	
Set   forth, to at least 9 decimals, as a percentage of the Commitment/[Term Loan   A] [Term Loan B] of all Lenders thereunder.
    

 

E-2-2

 

New Term Loan Facility(27)

 

	
Assignor[s](28)
    	
 
    	
Assignee[s](29)
    	
 
    	
Aggregate
   Amount of
   Commitment/New
   Term Loans for all
   New Lenders(30)
    	
 
    	
Amount of
   Commitment
   /New Term
   Loans
   Assigned
    	
 
    	
Percentage
   Assigned of
   Commitment/
   New Term
   Loans(31)
    	
 
    	
CUSIP 
   Number
    	
 
    
	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    	
 
    	
 
    	
 
    	
 
    

 

[7.                             Trade Date:                                  ](32)

 

Effective Date:                                    , 20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

	
 
    	
ASSIGNOR
    
	
 
    	
[NAME OF   ASSIGNOR]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    

 

	
(27)
    	
 
    	
If   assignment relates to a particular New Term Loan Facility that is effective,   specify tranche for New Term Loan Facility.
    
	
 
    	
 
    	
 
    
	
(28)
    	
 
    	
List   each Assignor, as appropriate.
    
	
 
    	
 
    	
 
    
	
(29)
    	
 
    	
List   each Assignee, as appropriate.
    
	
 
    	
 
    	
 
    
	
(30)
    	
 
    	
Amounts   in this column and in the column immediately to the right to be adjusted by   the counterparties to take into account any payments or prepayments made   between the Trade Date and the Effective Date.
    
	
 
    	
 
    	
 
    
	
(31)
    	
 
    	
Set   forth, to at least 9 decimals, as a percentage of the Commitment/New Term   Loans of all New Lenders thereunder.
    
	
 
    	
 
    	
 
    
	
(32)
    	
 
    	
To   be completed if the Assignor and the Assignee intend that the minimum   assignment amount is to be determined as of the Trade Date.
    

 

E-2-3

 

	
 
    	
ASSIGNEE
    
	
 
    	
[NAME OF   ASSIGNEE]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    
	
[Consented to   and](33) Accepted:
    	
 
    
	
 
    	
 
    
	
CITIBANK,   N.A., as
    	
 
    
	
Administrative Agent
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    
					

 

	
(33)
    	
 
    	
To   be added only if the consent of the Administrative Agent is required by the   terms of the Credit Agreement.
    

 

E-2-4

 

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

 

AVENTINE RENEWABLE ENERGY HOLDINGS, INC. 
 CREDIT AGREEMENT

 

STANDARD TERMS AND CONDITIONS FOR

 

ASSIGNMENT AND ASSUMPTION

 

1.             Representations and Warranties.

 

1.1.          Assignor.  [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

 

1.2.          Assignee.  [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it is either the Borrower or one of its Subsidiaries, (iii) no Default has occurred or is continuing  or would result from the consummation of the transactions contemplated by this Assignment and Assumption (iv) prior to and after giving effect to the transactions contemplated hereby, the Borrower is in pro forma compliance with the financial covenants in Section 7.08 of the Credit Agreement, (v) after giving effect to this Assignment and Assumption, the aggregate principal amount of all Loans assigned to the Borrower or any of its Subsidiaries constitutes 33% or less of the aggregate principal amount of the original principal amount of the Term Loans and any New Term Loans in the aggregate, (vi) it is not in possession of any material non-public information that has not been disclosed to investors or has not otherwise been disseminated in a manner making it available to investors generally, in each case within the meaning of Regulation FD, prior to such time, (vii) it is sophisticated with respect to decisions to acquire assets of the type represented by [the][such] Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire [the][such] Assigned Interest, is experienced in acquiring assets of such type, (viii) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 6.01 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest and (ix) it has, independently and without reliance upon

 

E-2-5

 

the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest; and (b) agrees that it will, independently and without reliance upon the Administrative Agent, [the][any] 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 Loan Documents and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

 

2.             Payments.  Immediately upon the Effective Date, each of the Loans assigned pursuant to this Assignment and Assumption shall be automatically and permanently cancelled.

 

3.             General Provisions.  This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

 

E-2-6

 

EXHIBIT F

 

FORM OF MORTGAGE

 

[see attached]

 

Form of Mortgage

 

F-1

 

 [LEASEHOLD] DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
 AND LEASES AND FIXTURE FILING [(                        )]

 

by and from

 

[                                  ], “Grantor”

 

to

 

[                                  ], “Trustee”

 

for the benefit of

 

CITIBANK, N.A., in its capacity as Agent, “Beneficiary”

 

Dated as of [                              , 2011]

 

	
 
    	
Location:
    	
[                        ]
    
	
 
    	
Municipality:
    	
[                        ]
    
	
 
    	
County:
    	
[                        ]
    
	
 
    	
State:
    	
[                        ]
    

 

THE SECURED PARTY (BENEFICIARY) DESIRES THIS FIXTURE FILING 
 TO BE INDEXED AGAINST THE RECORD OWNER OF THE REAL ESTATE DESCRIBED HEREIN.

 

PREPARED BY, RECORDING REQUESTED BY,
 AND WHEN RECORDED MAIL TO:

 

Shearman & Sterling LLP

599 Lexington Avenue

New York, New York  10022-6069

Attention:  Malcolm K. Montgomery, Esq.

File #35609/6565

 

 

[LEASEHOLD] DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
 AND LEASES AND FIXTURE FILING ([                        ])

 

THIS [LEASEHOLD] DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND LEASES AND FIXTURE FILING ([                        ]) (this “Deed of Trust”) is dated as of [                        , 2011] by and from [                                    ], a [                        ] [                        ] (“Grantor”), whose address is [                                         ] to [                                      ],  a [                                ] [                                      ] (“Trustee”),  with an address at [                                 ], for the benefit of CITIBANK, N.A., a national banking association, as collateral agent (in such capacity, “Agent”) for the Secured Parties as defined in the Credit Agreement (defined below), having an address at [                                             ] (Agent, together with its successors and assigns, “Beneficiary”).

 

ARTICLE 1
 DEFINITIONS

 

Section 1.1            Definitions.  All capitalized terms used herein without definition shall have the respective meanings ascribed to them in that certain Senior Secured Term Loan Credit Agreement dated as [              , 2010], as the same may be amended, amended and restated, supplemented or otherwise modified from time to time (the “Credit  Agreement”), among Aventine Renewable Energy Holdings, Inc. (“Borrower”), Agent, Lender (as defined therein) and Citigroup Global Markets Inc.  As used herein, the following terms shall have the following meanings:

 

(a)   “Event of Default”:  An Event of Default under and as defined in the Credit Agreement.

 

(b)   “Event of Loss”:  Shall have the meaning set forth in the Credit Agreement.

 

(c)   “Guaranty”:  That certain Guarantee by and from Grantor and the other guarantors referred to therein for the benefit of the Secured Parties dated as of [                    , 2010], as the same may hereafter be amended, amended and restated, supplemented or otherwise modified from time to time.

 

(d)   “Indebtedness”:  (1) All indebtedness of Grantor to Beneficiary or any of the other Secured Parties under the Credit Agreement or any other Loan Document to which Grantor is a party, including, without limitation (except as otherwise set forth in Section [1(b)] of the Guaranty), the sum of all (a) principal, interest and other amounts owing under or evidenced or secured by the Loan Documents, and (b) principal, interest and other amounts which may hereafter be lent by Beneficiary or any of the other Secured Parties under or in connection with the Credit Agreement or any of the other Loan Documents, whether evidenced by a promissory note or other instrument which, by its terms, is secured hereby, and (2) all other indebtedness, obligations and liabilities now or hereafter existing of any kind of Grantor to Beneficiary or any of the other Secured Parties under documents which recite that they are intended to be secured by this Deed of Trust.  The Indebtedness secured hereby includes, without limitation, all interest and expenses accruing after the commencement by or against Grantor or any of its affiliates of a proceeding under the Bankruptcy Code (defined below) or any similar law for the relief of debtors.

 

(e)   “Mortgaged Property”:  The [fee][leasehold] interest in the real property described in Exhibit A attached hereto and incorporated by reference [created by the Subject Lease (defined below)], together with [all rights and interests of Grantor in and to the Subject Lease] and any greater estate in such real property as hereafter may be acquired by Grantor (the “Land”), and all of Grantor’s right, title and interest now or hereafter acquired in and to (1) all improvements now owned or hereafter

 

 

acquired by Grantor, now or at any time situated, placed or constructed upon the Land (the “Improvements”; the Land and Improvements are collectively referred to as the “Premises”), (2) all materials, supplies, equipment, apparatus and other items of personal property now owned or hereafter acquired by Grantor and now or hereafter attached to, installed in or used in connection with any of the Improvements or the Land, and water, gas, electrical, telephone, storm and sanitary sewer facilities and all other utilities whether or not situated in easements, and all equipment, inventory and other goods in which Grantor now has or hereafter acquires any rights or any power to transfer rights and that are or are to become fixtures (as defined in the UCC, defined below) related to the Land (the “Fixtures”), (3) all goods, accounts, inventory, general intangibles, instruments, documents, contract rights and chattel paper, including all such items as defined in the UCC, now owned or hereafter acquired by Grantor and now or hereafter affixed to, placed upon, used in connection with, arising from or otherwise related to the Premises (the “Personalty”), (4) all reserves, escrows or impounds required under the Credit Agreement or any of the other Loan Documents and all deposit accounts maintained by Grantor with respect to the Mortgaged Property (the “Deposit Accounts”), (5) all leases, licenses, concessions, occupancy agreements or other agreements (written or oral, now or at any time in effect) which grant to any Person (other than Grantor) a possessory interest in, or the right to use, all or any part of the Mortgaged Property, together with all related security and other deposits (the “Leases”), (6) all of the rents, revenues, royalties, income, proceeds, profits, accounts receivable, security and other types of deposits, and other benefits paid or payable by parties to the Leases for using, leasing, licensing possessing, operating from, residing in, selling or otherwise enjoying the Mortgaged Property (the “Rents”), (7) all other agreements, such as construction contracts, architects’ agreements, engineers’ contracts, utility contracts, maintenance agreements, management agreements, service contracts, listing agreements, guaranties, warranties, permits, licenses, certificates and entitlements in any way relating to the construction, use, occupancy, operation, maintenance, enjoyment or ownership of the Mortgaged Property (the “Property Agreements”), (8) all rights, privileges, tenements, hereditaments, rights-of-way, easements, appendages and appurtenances appertaining to the foregoing, (9) all property tax refunds payable with respect to the Mortgaged Property (the “Tax Refunds”), (10) all accessions, replacements and substitutions for any of the foregoing and all proceeds thereof (the “Proceeds”), (11) all insurance policies, unearned premiums therefor and proceeds from such policies covering any of the above property now or hereafter acquired by Grantor (the “Insurance”), and (12) all awards, damages, remunerations, reimbursements, settlements or compensation heretofore made or hereafter to be made by any governmental authority pertaining to any condemnation or other taking (or any purchase in lieu thereof) of all or any portion of the Land, Improvements, Fixtures or Personalty (the “Condemnation Awards”).  As used in this Deed of Trust, the term “Mortgaged Property” shall mean all or, where the context permits or requires, any portion of the above or any interest therein.

 

(f)    “Net Cash Proceeds”: Shall have the meaning set forth in the Credit Agreement.

 

(g)   “Obligations”:  All of the agreements, covenants, conditions, warranties, representations and other obligations of Grantor under the Credit Agreement and the other Loan Documents to which it is a party.

 

(h)   “Permitted Liens”:  Liens described in Section 1.01 of the Credit Agreement as items (a) through (y) under the definition of “Permitted Liens”, excepting therefrom items (c), (h) and (o).

 

(i)    “Security Agreement”:  That certain Pledge and Security Agreement by and from Grantor and the other grantors referred to therein to Agent and the other Secured Parties dated as of [                  , 2010], as the same may hereafter be amended, amended and restated, supplemented or otherwise modified from time to time.

 

(j)    [“Subject  Lease”:  Shall have the meaning set forth in Exhibit B attached hereto.]

 

2

 

(k)   “UCC”:  The Uniform Commercial Code of the State of [                                ] or, if the creation, perfection and enforcement of any security interest herein granted is governed by the laws of a state other than the State of [                                      ], then, as to the matter in question, the Uniform Commercial Code in effect in that state.

 

ARTICLE 2
 GRANT

 

Section 2.1            Grant.  To secure the full and timely payment of the Indebtedness and the full and timely performance of the Obligations, Grantor GRANTS, BARGAINS, ASSIGNS, SELLS, CONVEYS and CONFIRMS, to Trustee the Mortgaged Property, subject, however, only to the matters that are set forth on Exhibit [C] attached hereto (the “Permitted Encumbrances”) and to Permitted Liens, TO HAVE AND TO HOLD the Mortgaged Property, IN TRUST, WITH POWER OF SALE, and Grantor does hereby bind itself, its successors and assigns to WARRANT AND FOREVER DEFEND the title to the Mortgaged Property unto Trustee.

 

ARTICLE 3
 WARRANTIES, REPRESENTATIONS AND COVENANTS

 

Grantor warrants, represents and covenants to Beneficiary as follows:

 

Section 3.1            Title to Mortgaged Property and Lien of this Instrument.  Grantor owns the Mortgaged Property free and clear of any liens, claims or interests, except the Permitted Encumbrances and the Permitted Liens.  This Deed of Trust creates valid, enforceable first priority liens and security interests against such portions of the Mortgaged Property as can be validly granted as security under the laws of the state in which the Mortgaged Property is located.

 

Section 3.2            First Lien Status.  Grantor shall preserve and protect the first lien and security interest status of this Deed of Trust and the other Loan Documents.  If any lien or security interest other than a Permitted Encumbrance or a Permitted Lien is asserted against the Mortgaged Property, Grantor shall promptly, and at its expense, (a) give Beneficiary a detailed written notice of such lien or security interest (including origin, amount and other terms), and (b) pay the underlying claim in full or take such other action so as to cause it to be released or contest the same in compliance with the requirements of the Credit Agreement (including the requirement of providing a bond or other security satisfactory to Beneficiary).

 

Section 3.3            Payment and Performance.  Grantor shall pay the Indebtedness when due under the Credit Agreement and the other Loan Documents and shall perform the Obligations in full when they are required to be performed.

 

Section 3.4            Replacement of Fixtures and Personalty.  Grantor shall not, without the prior written consent of Beneficiary, permit any of the Fixtures or Personalty owned or leased by Grantor to be removed at any time from the Land or Improvements, unless the removed item is removed temporarily for maintenance and repair or is permitted to be removed by the Credit Agreement.

 

Section 3.5            Inspection.  Grantor shall permit Beneficiary and the other Secured Parties and their respective agents, representatives and employees, upon reasonable prior notice to Grantor, [and in compliance with the Subject Lease,] to inspect the Mortgaged Property and all books and

 

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records of Grantor located thereon, and to conduct such environmental and engineering studies as Beneficiary or the other Secured Parties may require, provided that such inspections and studies shall (i) be non-invasive to the degree practicable and (ii) not materially interfere with the use and operation of the Mortgaged Property.

 

Section 3.6            Other Covenants.  All of the covenants in the Credit Agreement are incorporated herein by reference and, together with covenants in this Article 3, shall be covenants running with the Land.

 

Section 3.7            Insurance; Condemnation Awards and Insurance Proceeds.

 

(a)   Insurance.  Grantor shall maintain or cause to be maintained, insurance with respect to the Mortgaged Property with responsible carriers against such risks and in such amounts, and with such deductibles, retentions, self-insured amounts and co-insurance provisions, as are, in the Beneficiary’s reasonable judgment, customarily carried by similar businesses of similar size, including property and casualty loss, workers’ compensation and interruption of business insurance.  Each such policy of insurance shall name Beneficiary as the loss payee (or, in the case of liability insurance, an additional insured) thereunder for the ratable benefit of the Secured Parties, shall (except in the case of liability insurance) name Beneficiary as the “mortgagee” under a so-called “New York” long form non-contributory endorsement and shall provide for at least 30 days’ prior written notice of any material modification or cancellation of such policy.  In addition to the foregoing, if any portion of the Mortgaged Property is located in an area identified by the Federal Emergency Management Agency as an area having special flood hazards and in which flood insurance has been made available under the National Flood Insurance Act of 1968 (or any amendment or successor act thereto), then Grantor shall maintain, or cause to be maintained, with a financially sound and reputable insurer, flood insurance in an amount sufficient to comply with all applicable rules and regulations promulgated pursuant to such Act.

 

(b)   Condemnation Awards.  [Subject to the terms of the Subject Lease,] Section 6.17 of the Credit Agreement shall govern Grantor’s use and disposition of all Net Cash Proceeds with respect to an Event of Loss.

 

(c)   Insurance Proceeds.  [Subject to the terms of the Subject Lease,] Grantor assigns to Beneficiary all proceeds of any insurance policies insuring against loss or damage to the Mortgaged Property.  Subject to the terms of the Credit Agreement, Grantor authorizes Beneficiary to collect and receive such proceeds [(to the extent Mortgagor is entitled thereto under the Subject Lease)] and authorizes and directs the issuer of each of such insurance policies to make payment for all such losses [(to the extent Mortgagor is entitled thereto under the Subject Lease)] directly to Beneficiary, instead of to Grantor and Beneficiary jointly.

 

ARTICLE 4
 [LEASEHOLD DEED OF TRUST PROVISIONS]

 

Section 4.1            [Representations; Warranties; Covenants.  Grantor hereby represents, warrants and covenants that:

 

(a)   (1) Except as set forth in Exhibit B hereof, the Subject Lease is unmodified and in full force and effect, (2) all rent and other charges therein have been paid to the extent they are payable to the date hereof, (3) Grantor enjoys the quiet and peaceful possession of the Premises, (4) to the best of its knowledge, Grantor is not in default under any of the material terms thereof and there are no circumstances which, with the passage of time or the giving of notice or both, would constitute an event

 

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of default thereunder, (5) to the best of Grantor’s knowledge, the lessor thereunder is not in default under any of the material terms or provisions thereof on the part of the lessor to be observed or performed, and (6) Grantor has not previously subordinated its interest in the Mortgaged Property to the Lien or interests of any beneficiary of the lessor’s fee interest in the Premises;

 

(b)   Grantor shall promptly pay, when due and payable, the rent and other charges payable pursuant to the Subject Lease, taking into account any applicable grace or cure periods, and will timely perform and observe all of the other terms, covenants and conditions required to be performed and observed by Grantor as lessee under the Subject Lease;

 

(c)   Grantor shall notify Beneficiary in writing of any default by Grantor in the performance or observance of any terms, covenants or conditions on the part of Grantor to be performed or observed under the Subject Lease within three (3) days after Grantor obtains knowledge of such default;

 

(d)   Grantor shall, promptly upon receipt thereof, deliver a copy of each material notice given to Grantor by the lessor pursuant to the Subject Lease and promptly notify Beneficiary in writing of any default by the lessor in the performance or observance of any of the terms, covenants or conditions on the part of the lessor to be performed or observed thereunder;

 

(e)   Unless required under the terms of the Subject Lease, Grantor shall not terminate, modify or surrender the Subject Lease without the prior written consent of Beneficiary (which, in the case of any proposed termination or surrender, may be granted or withheld in Beneficiary’s sole and absolute discretion and, in the case of any other modification, may be granted or withheld in Beneficiary’s reasonable discretion), and any such attempted termination, modification or surrender without Beneficiary’s written consent shall be void;

 

(f)    If the Subject Lease shall be rejected or disaffirmed by the lessor thereunder (or by any receiver, trustee, custodian or other party who succeeds to the rights of such lessor) pursuant to the Bankruptcy Code or similar or successor law or right, Grantor covenants that it will not elect to treat the Subject Lease as terminated under 11 U.S.C. § 365(h) or any similar or successor law or right.  Upon the occurrence and during the continuance of an Event of Default, Beneficiary shall have the sole and exclusive right to make or refrain from making any such election, and Grantor agrees that any such election, if made by Grantor other than in accordance with this subsection, shall be void and of no force or effect;

 

(g)   Grantor shall, within thirty (30) days after written request from Beneficiary, use commercially reasonable efforts to obtain from the lessor and deliver to Beneficiary a certificate setting forth the name of the tenant under the Subject Lease and stating that the Subject Lease is in full force and effect, is unmodified or, if the Subject Lease has been modified, the date of each modification (together with copies of each such modification), that no notice of termination thereof has been served on Grantor, stating that no default or event which with notice or lapse of time (or both) would become a default is existing under the Subject Lease (or if any such default or event is existing, specifying the nature of such default or event), stating the date to which rent has been paid, and containing such other statements and representations as may be requested by Beneficiary; provided, however, that so long as no Event of Default shall have occurred and be continuing, no more than two (2) such certificates shall be requested during any twelve (12) month period; and

 

(h)   Grantor shall not at any time subordinate its interest in the Mortgaged Property or any portion thereof to the Lien or interests of any Beneficiary of the lessor’s fee interest in the Premises.

 

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Section 4.2            No Merger.  So long as any of the Indebtedness or the Obligations remain unpaid or unperformed, the fee title to and the leasehold estate in the Premises subject to each Subject Lease shall not merge but shall always be kept separate and distinct notwithstanding the union of such estates in the lessor or Grantor, or in a third party, by purchase or otherwise.  If Grantor acquires the fee title or any other estate, title or interest in the Premises, or any part thereof, the lien of this Deed of Trust shall attach to, cover and be a lien upon such acquired estate, title or interest and the same shall thereupon be and become a part of the Mortgaged Property with the same force and effect as if specifically encumbered herein.  Grantor agrees to execute all instruments and documents that Beneficiary or Trustee may reasonably require to ratify, confirm and further evidence the lien of this Deed of Trust on the acquired estate, title or interest.  Furthermore, Grantor hereby appoints Beneficiary as its true and lawful attorney-in-fact to execute and deliver, following the occurrence and during the continuance of an Event of Default, all such instruments and documents in the name and on behalf of Grantor.  This power, being coupled with an interest, shall be irrevocable as long as any portion of the Indebtedness remains unpaid.

 

Section 4.3            Beneficiary as Lessee.       If the Subject Lease shall be terminated prior to the natural expiration of its term due to default by Grantor or any tenant thereunder, and if, pursuant to the provisions of such Subject Lease, Beneficiary or its designee shall acquire from the lessor a new lease of the Premises, Grantor shall have no right, title or interest in or to such new lease or the leasehold estate created thereby, or renewal privileges therein contained.

 

Section 4.4            No Assignment.  Notwithstanding anything to the contrary contained herein, this Deed of Trust shall not constitute an assignment of any Subject Lease within the meaning of any provision thereof prohibiting its assignment and Beneficiary shall have no liability or obligation thereunder by reason of its acceptance of this Deed of Trust.  Beneficiary shall be liable for the obligations of the tenant arising out of any Subject Lease for only that period of time for which Beneficiary is in possession of the premises demised thereunder or has acquired, by foreclosure or otherwise, and is holding all of Grantor’s right, title and interest therein.]

 

ARTICLE 5
 DEFAULT AND FORECLOSURE

 

Section 5.1            Remedies.  Upon the occurrence and during the continuance of an Event of Default, Beneficiary may, at Beneficiary’s election and by or through Trustee or otherwise, exercise any or all of the following rights, remedies and recourses:

 

(a)   Acceleration.  Subject to any provisions of the Loan Documents providing for the automatic acceleration of the Indebtedness upon the occurrence of certain Events of Default, declare the Indebtedness to be immediately due and payable, without further notice, presentment, protest, notice of intent to accelerate, notice of acceleration, demand or action of any nature whatsoever (each of which hereby is expressly waived by Grantor), whereupon the same shall become immediately due and payable.

 

(b)   Entry on Mortgaged Property.  [Subject to the terms of the Subject Lease and applicable law, e][E]nter the Mortgaged Property and take exclusive possession thereof and of all books, records and accounts relating thereto or located thereon.  If Grantor remains in possession of the Mortgaged Property following the occurrence and during the continuance of an Event of Default and without Beneficiary’s prior written consent, [subject to the terms of the Subject Lease and applicable law,] Beneficiary may invoke any legal remedies to dispossess Grantor.

 

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(c)   Operation of Mortgaged Property.  Hold, lease, develop, manage, operate or otherwise use the Mortgaged Property upon such terms and conditions as Beneficiary may deem reasonable under the circumstances (making such repairs, alterations, additions and improvements and taking other actions, from time to time, as Beneficiary deems necessary or desirable), [all in a manner consistent with the terms of the Subject Lease,] and apply all Rents and other amounts collected by Trustee or Beneficiary in connection therewith in accordance with the provisions of Section 5.7.

 

(d)   Foreclosure and Sale.  Institute proceedings for the complete foreclosure of this Deed of Trust by judicial action or by power of sale, in which case the Mortgaged Property may be sold for cash or credit in one or more parcels[, subject to the terms of the Subject Lease and applicable law] as Beneficiary may determine.  With respect to any notices required or permitted under the UCC, Grantor agrees that ten (10) days’ prior written notice shall be deemed commercially reasonable.  At any such sale by virtue of any judicial proceedings, power of sale, or any other legal right, remedy or recourse, the title to and right of possession of any such property shall pass to the purchaser thereof, and to the fullest extent permitted by law, Grantor shall be completely and irrevocably divested of all of its right, title, interest, claim, equity, equity of redemption, and demand whatsoever, either at law or in equity, in and to the property sold and such sale shall be a perpetual bar both at law and in equity against Grantor, and against all other Persons claiming or to claim the property sold or any part thereof, by, through or under Grantor.  Beneficiary or any of the other Secured Parties may be a purchaser at such sale.  If Beneficiary or such other Secured Party is the highest bidder, Beneficiary or such other Secured Party may credit the portion of the purchase price that would be distributed to Beneficiary or such other Secured Party against the Indebtedness in lieu of paying cash.  In the event this Deed of Trust is foreclosed by judicial action, appraisement of the Mortgaged Property is waived.

 

(e)   Receiver.  Make application to a court of competent jurisdiction for, and obtain from such court as a matter of strict right and without notice to Grantor or regard to the adequacy of the Mortgaged Property for the repayment of the Indebtedness, the appointment of a receiver of the Mortgaged Property, and Grantor irrevocably consents to such appointment.  Any such receiver shall have all the usual powers and duties of receivers in similar cases, including the full power to rent, maintain and otherwise operate the Mortgaged Property upon such terms as may be approved by the court,  [and in a manner consistent with the terms of the Subject Lease,] and shall apply such Rents in accordance with the provisions of Section 5.7.

 

(f)    Other.  [Subject to the terms of the Subject Lease, e][E]xercise all other rights, remedies and recourses granted under the Loan Documents or otherwise available at law or in equity.

 

Section 5.2            Separate Sales.  [To the extent not prohibited under the Subject Lease, t][T]he Mortgaged Property may be sold in one or more parcels and in such manner and order as Trustee in its sole discretion may elect.  The right of sale arising out of any Event of Default shall not be exhausted by any one or more sales.

 

Section 5.3            Remedies Cumulative, Concurrent and Nonexclusive.  Trustee, Beneficiary and the other Secured Parties shall have all rights, remedies and recourses granted in the Loan Documents and available at law or equity (including the UCC), which rights (a) shall be cumulative and concurrent, (b) may be pursued separately, successively or concurrently against Grantor or others obligated under the Loan Documents, or against the Mortgaged Property, or against any one or more of them, at the sole discretion of Trustee, Beneficiary or such other Secured Party, as the case may be, (c) may be exercised as often as occasion therefor shall arise, and the exercise or failure to exercise any of them shall not be construed as a waiver or release thereof or of any other right, remedy or recourse, and (d) are intended to be, and shall be, nonexclusive.  No action by Trustee, Beneficiary or any other Secured

 

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Party in the enforcement of any rights, remedies or recourses under the Loan Documents or otherwise at law or equity shall be deemed to cure any Event of Default.

 

Section 5.4            Release of and Resort to Collateral.  Beneficiary may release, regardless of consideration and without the necessity for any notice to or consent by the holder of any subordinate lien on the Mortgaged Property, any part of the Mortgaged Property without, as to the remainder, in any way impairing, affecting, subordinating or releasing the lien or security interest created in or evidenced by the Loan Documents or their status as a first and prior lien and security interest in and to the Mortgaged Property.  For payment of the Indebtedness, Beneficiary may resort to any other security in such order and manner as Beneficiary may elect.

 

Section 5.5            Waiver of Redemption, Notice and Marshalling of Assets.  To the fullest extent permitted by law, Grantor hereby irrevocably and unconditionally waives and releases (a) all benefit that might accrue to Grantor by virtue of any present or future statute of limitations or law or judicial decision exempting the Mortgaged Property from attachment, levy or sale on execution or providing for any stay of execution, exemption from civil process, redemption or extension of time for payment, (b) all notices of any Event of Default or of any election by Trustee or Beneficiary to exercise or the actual exercise of any right, remedy or recourse provided for under the Loan Documents, and (c) any right to a marshalling of assets or a sale in inverse order of alienation.

 

Section 5.6            Discontinuance of Proceedings.  If Trustee, Beneficiary or any other Secured Party shall have proceeded to invoke any right, remedy or recourse permitted under the Loan Documents and shall thereafter elect to discontinue or abandon it for any reason, Trustee, Beneficiary or such other Secured Party, as the case may be, shall have the unqualified right to do so and, in such an event, Grantor, Trustee, Beneficiary and the other Secured Parties shall be restored to their former positions with respect to the Indebtedness, the Obligations, the Loan Documents, the Mortgaged Property and otherwise, and the rights, remedies, recourses and powers of Trustee, Beneficiary and the other Secured Parties shall continue as if the right, remedy or recourse had never been invoked, but no such discontinuance or abandonment shall waive any Event of Default which may then exist or the right of Trustee, Beneficiary or any other Secured Party thereafter to exercise any right, remedy or recourse under the Loan Documents for such Event of Default.

 

Section 5.7            Application of Proceeds.  The proceeds of any sale of, and the Rents and other amounts generated by the holding, leasing, management, operation or other use of the Mortgaged Property, shall be applied by Beneficiary or Trustee (or the receiver, if one is appointed) in the following order unless otherwise required by applicable law:

 

(a)   to the payment of the reasonable costs and actual out-of-pocket expenses of taking possession of the Mortgaged Property and of holding, using, leasing, repairing, improving and selling the same, including, without limitation (1) trustee’s and receiver’s fees and expenses, including the repayment of the amounts evidenced by any receiver’s certificates, (2) court costs, (3) attorneys’ and accountants’ fees and expenses, [and] (4) costs of advertisement[, and (5) the payment of all rent and other charges under the Subject Lease];

 

(b)   to the payment of the Indebtedness and performance of the Obligations in such manner and order of preference as Beneficiary in its sole discretion may determine; and

 

(c)   the balance, if any, to the Persons legally entitled thereto.

 

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Section 5.8            Occupancy After Foreclosure.  Any sale of the Mortgaged Property or any part thereof in accordance with Section 5.1(d) will divest all right, title and interest of Grantor in and to the property sold.  Subject to applicable law [and the Subject Lease], any purchaser at a foreclosure sale will receive immediate possession of the property purchased.  If Grantor retains possession of such property or any part thereof subsequent to such sale, Grantor will be considered a tenant at sufferance of the purchaser, and will, if Grantor remains in possession after demand to remove, be subject to eviction and removal, forcible or otherwise, with or without process of law.

 

Section 5.9            Additional Advances and Disbursements; Costs of Enforcement.  [To the extent not prohibited under the terms of the Subject Lease, u][U]pon the occurrence and during the continuance of any Event of Default, Beneficiary and each of the other Secured Parties shall have the right, but not the obligation, to cure such Event of Default in the name and on behalf of Grantor.  All sums advanced and expenses incurred at any time by Beneficiary or any other Secured Party under this Section 5.9, or otherwise under this Deed of Trust or any of the other Loan Documents or applicable law, shall bear interest from the date that such sum is advanced or expense incurred, to and including the date of reimbursement, computed at the highest rate at which interest is then computed on any portion of the Indebtedness, and all such sums, together with interest thereon, shall be secured by this Deed of Trust.

 

(b)   Grantor shall pay all expenses (including reasonable attorneys’ fees and expenses) of or incidental to the perfection and enforcement of this Deed of Trust and the other Loan Documents, or the enforcement, compromise or settlement of the Indebtedness or any claim under this Deed of Trust and the other Loan Documents, and for the curing thereof, or for defending or asserting the rights and claims of Beneficiary in respect thereof, by litigation or otherwise.

 

Section 5.10         No Mortgagee in Possession.  Neither the enforcement of any of the remedies under this Article 5, the assignment of the Rents and Leases under Article 6, the security interests under Article 7, nor any other remedies afforded to Beneficiary under the Loan Documents, at law or in equity shall cause Trustee, Beneficiary or any other Secured Party to be deemed or construed to be a mortgagee in possession of the Mortgaged Property, to obligate Trustee, Beneficiary or any other Secured Party to lease the Mortgaged Property or attempt to do so, or to take any action, incur any expense, or perform or discharge any obligation, duty or liability whatsoever under any of the Leases or otherwise.

 

ARTICLE 6
 ASSIGNMENT OF RENTS AND LEASES

 

Section 6.1            Assignment.  In furtherance of and in addition to the assignment made by Grantor in Section 2.1 of this Deed of Trust, Grantor hereby absolutely and unconditionally assigns, sells, transfers and conveys to Trustee (for the benefit of Beneficiary) and to Beneficiary all of its right, title and interest in and to all Leases, whether now existing or hereafter entered into, and all of its right, title and interest in and to all Rents.  This assignment is an absolute assignment and not an assignment for additional security only.  So long as no Event of Default shall have occurred and be continuing, Grantor shall have a revocable license from Trustee and Beneficiary to exercise all rights extended to the landlord under the Leases, including the right to receive and collect all Rents and to hold the Rents in trust for use in the payment and performance of the Obligations and to otherwise use the same.  The foregoing license is granted subject to the conditional limitation that no Event of Default shall have occurred and be continuing.  Upon the occurrence and during the continuance of an Event of Default, whether or not legal proceedings have commenced, and without regard to waste, adequacy of security for the Obligations or solvency of Grantor, the license herein granted shall automatically expire and terminate, without notice to

 

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Grantor by Trustee or Beneficiary (any such notice being hereby expressly waived by Grantor to the extent permitted by applicable law).

 

Section 6.2            Perfection Upon Recordation.  Grantor acknowledges that Beneficiary and Trustee have taken all actions necessary to obtain, and that upon recordation of this Deed of Trust Beneficiary and Trustee shall have, to the extent permitted under applicable law, a valid and fully perfected, first priority, present assignment of the Rents arising out of the Leases and all security for such Leases.  Grantor acknowledges and agrees that upon recordation of this Deed of Trust Trustee’s and Beneficiary’s interest in the Rents shall be deemed to be fully perfected, “choate” and enforced as to Grantor and to the extent permitted under applicable law, all third parties, including, without limitation, any subsequently appointed trustee in any case under Title 11 of the United States Code (the “Bankruptcy Code”), without the necessity of commencing a foreclosure action with respect to this Deed of Trust, making formal demand for the Rents, obtaining the appointment of a receiver or taking any other affirmative action.

 

Section 6.3            Bankruptcy Provisions.  Without limitation of the absolute nature of the assignment of the Rents hereunder, Grantor, Trustee and Beneficiary agree that (a) this Deed of Trust shall constitute a “security agreement” for purposes of Section 552(b) of the Bankruptcy Code, (b) the security interest created by this Deed of Trust extends to property of Grantor acquired before the commencement of a case in bankruptcy and to all amounts paid as Rents and (c) such security interest shall extend to all Rents acquired by the estate after the commencement of any case in bankruptcy.

 

Section 6.4            [No Merger of Estates.  So long as part of the Indebtedness and the Obligations secured hereby remain unpaid and undischarged, the fee and leasehold estates to the Mortgaged Property shall not merge, but shall remain separate and distinct, notwithstanding the union of such estates either in Grantor, Beneficiary, any tenant or any third party by purchase or otherwise.]

 

ARTICLE 7
 SECURITY AGREEMENT

 

Section 7.1            Security Interest.  This Deed of Trust constitutes a “security agreement” on personal property within the meaning of the UCC and other applicable law and with respect to the Personalty, Fixtures, Leases, Rents, Deposit Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance and Condemnation Awards.  To this end, Grantor grants to Beneficiary a first and prior security interest in the Personalty, Fixtures, Leases, Rents, Deposit Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance, Condemnation Awards and all other Mortgaged Property which is personal property to secure the payment of the Indebtedness and performance of the Obligations, and agrees that Beneficiary shall have all the rights and remedies of a secured party under the UCC with respect to such property.  Any notice of sale, disposition or other intended action by Beneficiary with respect to the Personalty, Fixtures, Leases, Rents, Deposit Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance and Condemnation Awards sent to Grantor at least ten (10) days prior to any action under the UCC shall constitute reasonable notice to Grantor.  In the event of any conflict or inconsistency between the terms of this Deed of Trust and the terms of the Security Agreement with respect to the collateral covered both therein and herein, the Security Agreement shall control and govern to the extent of any such conflict or inconsistency.

 

Section 7.2            Financing Statements.  Grantor shall prepare and deliver to Beneficiary such financing statements, and shall execute and deliver to Beneficiary such other documents, instruments and further assurances, in each case in form and substance satisfactory to Beneficiary, as Beneficiary may, from time to time, reasonably consider necessary to create, perfect and preserve Beneficiary’s security interest hereunder.  Grantor hereby irrevocably authorizes Beneficiary to cause financing

 

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statements (and amendments thereto and continuations thereof) and any such documents, instruments and assurances to be recorded and filed, at such times and places as may be required or permitted by law to so create, perfect and preserve such security interest.  Grantor represents and warrants to Beneficiary that Grantor’s jurisdiction of organization is the State of [                                ].  After the date of this Deed of Trust, Grantor shall not change its name, type of organization, organizational identification number (if any), jurisdiction of organization or location (within the meaning of the UCC) without giving at least thirty (30) days’ prior written notice to Beneficiary.

 

Section 7.3            Fixture Filing.  This Deed of Trust shall also constitute a “fixture filing” for the purposes of the UCC against all of the Mortgaged Property which is or is to become fixtures.  The information provided in this Section 7.3 is provided so that this Deed of Trust shall comply with the requirements of the UCC for a mortgage instrument to be filed as a financing statement.  Grantor is the “Debtor” and its name and mailing address are set forth in the preamble of this Deed of Trust immediately preceding Article 1.  Beneficiary is the “Secured Party” and its name and mailing address from which information concerning the security interest granted herein may be obtained are also set forth in the preamble of this Deed of Trust immediately preceding Article 1.  A statement describing the portion of the Mortgaged Property comprising the fixtures hereby secured is set forth in Section 1.1(e) of this Deed of Trust.  Grantor represents and warrants to Beneficiary that Grantor is the record owner of the Mortgaged Property, the employer identification number of Grantor is [                          ] and the organizational identification number of Grantor is [                        ].

 

ARTICLE 8
 CONCERNING THE TRUSTEE

 

Section 8.1            Certain Rights.  With the approval of Beneficiary, Trustee shall have the right to select, employ and consult with counsel.  Trustee shall have the right to rely on any instrument, document or signature authorizing or supporting any action taken or proposed to be taken by it hereunder, believed by it in good faith to be genuine.  Trustee shall be entitled to reimbursement for actual, reasonable expenses incurred by it in the performance of its duties and to reasonable compensation for Trustee’s services hereunder as shall be rendered.  Grantor shall, from time to time, pay the compensation due to Trustee hereunder and reimburse Trustee for, and indemnify, defend and save Trustee harmless against, all liability and reasonable expenses which may be incurred by it in the performance of its duties, including those arising from joint, concurrent, or comparative negligence of Trustee; provided, however, that Grantor shall not be liable under such indemnification to the extent such liability or expenses result solely from Trustee’s gross negligence or willful misconduct.  Grantor’s obligations under this Section 8.1 shall not be reduced or impaired by principles of comparative or contributory negligence.

 

Section 8.2            Retention of Money.  All moneys received by Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated in any manner from any other moneys (except to the extent required by law), and Trustee shall be under no liability for interest on any moneys received by Trustee hereunder.

 

Section 8.3            Successor Trustees.  If Trustee or any successor Trustee shall die, resign or become disqualified from acting in the execution of this trust, or Beneficiary shall desire to appoint a substitute Trustee, Beneficiary shall have full power to appoint one or more substitute Trustees and, if preferred, several substitute Trustees in succession who shall succeed to all the estates, rights, powers and duties of Trustee.  Such appointment may be executed by any authorized agent of Beneficiary and as so executed, such appointment shall be conclusively presumed to be executed with authority, valid and sufficient, without further proof of any action.

 

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Section 8.4            Perfection of Appointment.  Should any deed, conveyance or instrument of any nature be required from Grantor by any successor Trustee to more fully and certainly vest in and confirm to such successor Trustee such estates, rights, powers and duties, then, upon request by such Trustee, all such deeds, conveyances and instruments shall be made, executed, acknowledged and delivered and shall be caused to be recorded and/or filed by Grantor.

 

Section 8.5            Trustee Liability.  In no event or circumstance shall Trustee or any substitute Trustee hereunder be personally liable under or as a result of this Deed of Trust, either as a result of any action by Trustee (or any substitute Trustee) in the exercise of the powers hereby granted or otherwise.

 

ARTICLE 9
 MISCELLANEOUS

 

Section 9.1            Notices.  Any notice required or permitted to be given under this Deed of Trust shall be given in accordance with Section 10.02 of the Credit Agreement.

 

Section 9.2            Covenants Running with the Land.  All Obligations contained in this Deed of Trust are intended by Grantor, Beneficiary and Trustee to be, and shall be construed as, covenants running with the Land.  As used herein, “Grantor” shall refer to the party named in the first paragraph of this Deed of Trust and to any subsequent owner of all or any portion of the Mortgaged Property.  All Persons who may have or acquire an interest in the Mortgaged Property shall be deemed to have notice of, and be bound by, the terms of the Credit Agreement and the other Loan Documents; provided, however, that no such party shall be entitled to any rights thereunder without the prior written consent of Beneficiary.

 

Section 9.3            Attorney-in-Fact.  Grantor hereby irrevocably appoints Beneficiary as its attorney-in-fact, which agency is coupled with an interest and with full power of substitution, with full authority in the place and stead of Grantor and in the name of Grantor or otherwise (a) to execute and/or record any notices of completion, cessation of labor or any other notices that Beneficiary deems appropriate to protect Beneficiary’s interest, if Grantor shall fail to do so within ten (10) days after written request by Beneficiary, (b) upon the issuance of a deed pursuant to the foreclosure of this Deed of Trust or the delivery of a deed in lieu of foreclosure, to execute all instruments of assignment, conveyance or further assurance with respect to the Leases, Rents, Deposit Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance and Condemnation Awards in favor of the grantee of any such deed and as may be necessary or desirable for such purpose, (c) to prepare and file or record financing statements and continuation statements, and to prepare, execute and file or record applications for registration and like papers necessary to create, perfect or preserve Beneficiary’s security interests and rights in or to any of the Mortgaged Property, and (d) after the occurrence and during the continuance of any Event of Default, to perform any obligation of Grantor hereunder; provided, however, that (1) Beneficiary shall not under any circumstances be obligated to perform any obligation of Grantor; (2) any sums advanced by Beneficiary in such performance shall be added to and included in the Indebtedness and shall bear interest at the highest rate at which interest is then computed on any portion of the Indebtedness; (3) Beneficiary as such attorney-in-fact shall only be accountable for such funds as are actually received by Beneficiary; and (4) Beneficiary shall not be liable to Grantor or any other person or entity for any failure to take any action which it is empowered to take under this Section 9.3.

 

Section 9.4            Successors and Assigns.  This Deed of Trust shall be binding upon and inure to the benefit of Beneficiary, the other Secured Parties, Trustee and Grantor and their respective

 

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successors and assigns.  Grantor shall not, without the prior written consent of Beneficiary, assign any rights, duties or obligations hereunder.

 

Section 9.5            No Waiver.  Any failure by Beneficiary, the other Secured Parties or Trustee to insist upon strict performance of any of the terms, provisions or conditions of the Loan Documents shall not be deemed to be a waiver of same, and Beneficiary, the other Secured Parties and Trustee shall have the right at any time to insist upon strict performance of all of such terms, provisions and conditions.

 

Section 9.6            Credit Agreement.   If any conflict or inconsistency exists between this Deed of Trust and the Credit Agreement, the Credit Agreement shall control and govern to the extent of any such conflict or inconsistency.

 

Section 9.7            Release or Reconveyance.  Upon payment in full of the Indebtedness and performance in full of the Obligations or upon a sale or other disposition of the Mortgaged Property permitted by the Credit Agreement, Beneficiary, at Grantor’s request and expense, shall release the liens and security interests created by this Deed of Trust or reconvey the Mortgaged Property to Grantor.

 

Section 9.8            Waiver of Stay, Moratorium and Similar Rights.  Grantor agrees, to the full extent that it may lawfully do so, that it will not at any time insist upon or plead or in any way take advantage of any stay, marshalling of assets, extension, redemption or moratorium law now or hereafter in force and effect so as to prevent or hinder the enforcement of the provisions of this Deed of Trust or the Indebtedness or Obligations secured hereby, or any agreement between Grantor and Beneficiary or any rights or remedies of Trustee, Beneficiary or any other Secured Party.

 

Section 9.9            Applicable Law.  The provisions of this Deed of Trust regarding the creation, perfection and enforcement of the liens and security interests herein granted shall be governed by and construed under the laws of the state in which the Mortgaged Property is located.  All other provisions of this Deed of Trust shall be governed by the laws of the State of New York (including, without limitation, Section 5-1401 of the General Obligations Law of the State of New York).

 

Section 9.10         Headings.  The Article, Section and Subsection titles hereof are inserted for convenience of reference only and shall in no way alter, modify or define, or be used in construing, the text of such Articles, Sections or Subsections.

 

Section 9.11         Severability.  If any provision of this Deed of Trust shall be held by any court of competent jurisdiction to be unlawful, void or unenforceable for any reason, such provision shall be deemed severable from and shall in no way affect the enforceability and validity of the remaining provisions of this Deed of Trust.

 

Section 9.12         Entire Agreement.  This Deed of Trust and the other Loan Documents embody the entire agreement and understanding between Grantor and Beneficiary relating to the subject matter hereof and thereof and supersede all prior agreements and understandings between such parties relating to the subject matter hereof and thereof.  Accordingly, the Loan Documents may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties.  There are no unwritten oral agreements between the parties.

 

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Section 9.13                            Beneficiary as Agent; Successor Agents.

 

(a)          Agent has been appointed to act as Agent hereunder by the other Secured Parties.  Agent shall have the right hereunder to make demands, to give notices, to exercise or refrain from exercising any rights, and to take or refrain from taking any action (including, without limitation, the release or substitution of the Mortgaged Property) in accordance with the terms of the Credit Agreement, any related agency agreement among Agent and the other Secured Parties (collectively, as amended, amended and restated, supplemented or otherwise modified or replaced from time to time, the “Agency Documents”) and this Deed of Trust.  Grantor and all other Persons shall be entitled to rely on releases, waivers, consents, approvals, notifications and other acts of Agent, without inquiry into the existence of required consents or approvals of the Secured Parties therefor.

 

(b)         Beneficiary shall at all times be the same Person that is Agent under the Agency Documents.  Written notice of resignation by Agent pursuant to the Agency Documents shall also constitute notice of resignation as Agent under this Deed of Trust.  Removal of Agent pursuant to any provision of the Agency Documents shall also constitute removal as Agent under this Deed of Trust.  Appointment of a successor Agent pursuant to the Agency Documents shall also constitute appointment of a successor Agent under this Deed of Trust.  Upon the acceptance of any appointment as Agent by a successor Agent under the Agency Documents, that successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring or removed Agent as the Beneficiary under this Deed of Trust, and the retiring or removed Agent shall promptly (i) assign and transfer to such successor Agent all of its right, title and interest in and to this Deed of Trust and the Mortgaged Property, and (ii) execute and deliver to such successor Agent such assignments and amendments and take such other actions, as may be necessary or appropriate in connection with the assignment to such successor Agent of the liens and security interests created hereunder, whereupon such retiring or removed Agent shall be discharged from its duties and obligations under this Deed of Trust.  After any retiring or removed Agent’s resignation or removal hereunder as Agent, the provisions of this Deed of Trust and the Agency Documents shall inure to its benefit as to any actions taken or omitted to be taken by it under this Deed of Trust while it was Agent hereunder.

 

ARTICLE 10
 LOCAL LAW PROVISIONS

 

[To Come]

 

[The remainder of this page has been intentionally left blank]

 

14

 

IN WITNESS WHEREOF, Grantor has on the date set forth in the acknowledgement hereto, effective as of the date first above written, caused this instrument to be duly EXECUTED AND DELIVERED by authority duly given.

 

	
GRANTOR:
    	
[                                            ],
    
	
 
    	
a   [                                  ]   [                            ]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

S-1

 

 

[Insert state specific form of notary acknowledgement]

 

N-1

 

EXHIBIT A

 

LEGAL DESCRIPTION

 

Legal Description of premises located at [                                                              ]:

 

[See Attached Page(s) For Legal Description]

 

Exh. A-1

 

EXHIBIT B

 

[SUBJECT LEASE

 

The term “Subject Lease” shall mean the agreement of lease described in this Exhibit B.  If more than one agreement of lease is described, the “Subject Lease” shall mean (a) each lease individually and (b) all such leases collectively.

 

That certain [Title of Lease] dated [Date of Lease], [as amended by                     ,] pursuant to which Grantor leases all or a portion of the Land from [Full Name of Lessor], a memorandum of which was recorded with the County Clerk of [County] County, [State], [contemporaneously herewith] [in [Book/Liber/Reel] [          ], Page [        ]].]

 

Exh. B-1

 

[EXHIBIT C]

 

PERMITTED ENCUMBRANCES

 

Those exceptions set forth in Schedule B of that certain policy of title insurance issued to Beneficiary by Commonwealth Land Title Insurance Company on or about the date hereof pursuant to commitment number [                  ].

 

Exh. C-1Exhibit 10.2

 

 

	

    	
SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

by and among

 

WELLS FARGO CAPITAL FINANCE, LLC,
    	
 
    

as Agent,

 

THE LENDERS THAT ARE PARTIES HERETO,

as the Lenders,

 

AVENTINE RENEWABLE ENERGY HOLDINGS, INC.,

as Parent,

 

AVENTINE RENEWABLE ENERGY, INC.,

AVENTINE RENEWABLE ENERGY – AURORA WEST, LLC,

AVENTINE RENEWABLE ENERGY – MT VERNON, LLC,

AVENTINE RENEWABLE ENERGY – CANTON, LLC,

AVENTINE POWER, LLC,

 

and

 

NEBRASKA ENERGY, L.L.C.,

as Borrowers

 

Dated as of September 24, 2012

 

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS SECOND AMENDED AND RESTATED  CREDIT AGREEMENT (this “Agreement”), is entered into as of September 24, 2012, by and among the lenders identified on the signature pages hereof (each of such lenders, together with its successors and permitted assigns, is referred to hereinafter as a “Lender” as that term is hereinafter further defined), WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company, as agent for each member of the Lender Group and the Bank Product Providers (in such capacity, together with its successors and assigns in such capacity, “Agent”), AVENTINE RENEWABLE ENERGY HOLDINGS, INC., a Delaware corporation (“Parent”), AVENTINE RENEWABLE ENERGY, INC., a Delaware corporation (“AREI”), AVENTINE RENEWABLE ENERGY — AURORA WEST, LLC, a Delaware limited liability company (“ARE-AW”), AVENTINE RENEWABLE ENERGY — MT  VERNON, LLC, a Delaware limited liability company (“ARE-MT), AVENTINE RENEWABLE ENERGY — CANTON, LLC, a Delaware limited liability company (“ARE-C”), AVENTINE POWER, LLC, a Delaware limited liability company (“Power”), and NEBRASKA ENERGY, L.L.C., a Kansas limited liability company (“Nebraska”; together with Parent, AREI, ARE-AW, ARE-MT, ARE-C, and Power, are referred to hereinafter each individually as a “Borrower,” and individually and collectively, jointly and severally, as “Borrowers”).

 

WHEREAS, Agent, certain of the Lenders and Borrowers are parties to that certain Amended and Restated Credit Agreement, dated as of July 20, 2011 (the “Original Closing Date”) (as amended, restated, supplemented, or otherwise modified from time to time prior to the date hereof, the “Original Credit Agreement”); and

 

WHEREAS, Borrowers have requested that Agent and the Lenders amend and restate the Original Credit Agreement in its entirety subject to the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree to amend and restate the Original Credit Agreement in its entirety as follows:

 

The parties agree as follows:

 

1.             DEFINITIONS AND CONSTRUCTION.

 

1.1           Definitions.  As used in this Agreement, the following terms shall have the following definitions:

 

“Account” means an account (as that term is defined in the Code).

 

“Account Debtor” means any Person who is obligated on an Account, chattel paper, or a general intangible.

 

“Accounting Changes” means changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants (or successor thereto or any agency with similar functions).

 

“Acquired Indebtedness” means Indebtedness of a Person whose assets or Equity Interests are acquired by Parent or any of its Subsidiaries in a Permitted Acquisition; provided, that such Indebtedness (a) is either purchase money Indebtedness or a Capital Lease with respect to Equipment or mortgage financing with respect to Real Property, (b) was in existence prior to the date of such Permitted Acquisition, and (c) was not incurred in connection with, or in contemplation of, such Permitted Acquisition.

 

 

“Acquisition” means (a) the purchase or other acquisition by a Person or its Subsidiaries of all or substantially all of the assets of (or any division or business line of) any other Person, or (b) the purchase or other acquisition (whether by means of a merger, consolidation, or otherwise) by a Person or its Subsidiaries of all or substantially all of the Equity Interests of any other Person.

 

“Additional Documents” has the meaning specified therefor in Section 5.12.

 

“Administrative Borrower” has the meaning specified therefor in Section 17.13.

 

“Administrative Questionnaire” has the meaning specified therefor in Section 13.1(a).

 

“Affected Lender” has the meaning specified therefor in Section 2.13(b).

 

“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

 

“Agent” has the meaning specified therefor in the preamble to this Agreement.

 

“Agent-Related Persons” means Agent, together with its Affiliates, officers, directors, employees, attorneys, and agents.

 

“Agent’s Account” means the Deposit Account of Agent identified on Schedule A-1 (or such other Deposit Account of Agent that has been designated as such, in writing, by Agent to Administrative Borrower and the Lenders).

 

“Agent’s Liens” means the Liens granted by Parent or its Subsidiaries to Agent under the Loan Documents and securing the Obligations.

 

“Agreement” has the meaning specified therefor in the preamble to this Agreement.

 

“Application Event” means the occurrence of (a) a failure by Borrowers to repay all of the Obligations in full on the Maturity Date, or (b) an Event of Default and the election by Agent or the Required Lenders to require that payments and proceeds of Collateral be applied pursuant to Section 2.4(b)(ii).

 

“AREI” has the meaning specified therefor in the preamble to this Agreement.

 

“AREI Mortgage Assignment” means the assignment of mortgage, security agreement, assignment of rents and leases and fixture filing, dated as of the Original Closing Date, by PNC to Agent with respect to that certain Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Filing, executed by AREI in favor of PNC, dated as of March 22, 2011, and recorded on April 18, 2011, as Instrument No. 201100006947, Official Records of Tazewell County, Illinois.

 

“ARE-AW” has the meaning specified therefor in the preamble to this Agreement.

 

“ARE-AW Mortgage Assignment” means the assignment of deed of trust, security agreement, assignment of rents and leases and fixture filing, dated as of the Original Closing Date, by PNC to Agent with respect to that certain Deed of Trust, Security Agreement, Assignment of Rents and Leases and Fixture Filing, executed by ARE-AW in favor of Chicago Title Insurance Company, as Trustee for the benefit of PNC, dated as of March 22, 2011, and recorded on March 29, 2011, in Mortgage Book 267, Page 80, Official Records of Hamilton County, Nebraska.

 

“ARE-C” has the meaning specified therefor in the preamble to this Agreement.

 

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“ARE-C Mortgage Assignment” means the assignment of mortgage, security agreement, assignment of rents and leases and fixture filing, dated as of the Original Closing Date, by PNC to Agent with respect to that certain Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Filing, executed by ARE-C in favor of PNC, dated as of March 22, 2011, and recorded on April 1, 2011, as Instrument No. 1139256, Official Records of Fulton County, Illinois.

 

“ARE-MT” has the meaning specified therefor in the preamble to this Agreement.

 

“ARE-MT Mortgage Assignment” means the assignment of leasehold mortgage, security agreement, assignment of rents and leases and fixture filing, dated as of the Original Closing Date, by PNC to Agent with respect to that certain Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Filing, executed by ARE-MT in favor of PNC, dated as of March 22, 2011, and recorded on April 14, 2011, as Instrument No. 201101532, Official Records of Posey County, Indiana.

 

“Assignee” has the meaning specified therefor in Section 13.1(a).

 

“Assignment Agreement” means an assignment and acceptance agreement, dated as of the Original Closing Date, executed and delivered by PNC and Agent, acknowledged by Parent and each of its Subsidiaries.

 

“Assignment and Acceptance” means an Assignment and Acceptance Agreement substantially in the form of Exhibit A-1.

 

“Assignment of Patent and Trademark Security Agreement” means an assignment of patent and trademark security agreement, dated as of the Original Closing Date, executed and delivered by PNC in favor Agent, acknowledged by Parent and each of its Subsidiaries.

 

“Authorized Person” means any one of the individuals identified on Schedule A-2, as such schedule is updated from time to time by written notice from Administrative Borrower to Agent.

 

“Availability” means, as of any date of determination, the amount that Borrowers are entitled to borrow as Revolving Loans under Section 2.1 (after giving effect to the then outstanding Revolver Usage).

 

“Available Increase Amount” means, as of any date of determination, an amount equal to the result of (a) $20,000,000 minus (b) the aggregate principal amount of Increases to the Commitments previously made pursuant to Section 2.14 of this Agreement.

 

“Average Daily Net Availability” means, with respect to any period, the sum of the aggregate amount of Availability for each Business Day in such period (calculated as of the end of each respective Business Day) divided by the number of Business Days in such period.

 

“Bank Product” means any one or more of the following financial products or accommodations extended to Parent or its Subsidiaries by a Bank Product Provider:  (a) credit cards (including credit cards (including so-called “purchase cards”, “procurement cards” or “p-cards”)), (b) credit card processing services, (c) debit cards, (d) stored value cards, (e) Cash Management Services, or (f) transactions under Hedge Agreements.

 

“Bank Product Agreements” means those agreements entered into from time to time by Parent or any of its Subsidiaries with a Bank Product Provider in connection with the obtaining of any of the Bank Products.

 

“Bank Product Collateralization” means providing cash collateral (pursuant to documentation reasonably satisfactory to Agent) to be held by Agent for the benefit of the Bank Product Providers (other than

 

3

 

the Hedge Providers) in an amount determined by Agent as sufficient to satisfy the reasonably estimated credit exposure with respect to the then existing Bank Product Obligations (other than Hedge Obligations).

 

“Bank Product Obligations” means (a) all obligations, liabilities, reimbursement obligations, fees, or expenses owing by Parent or its Subsidiaries to any Bank Product Provider pursuant to or evidenced by a Bank Product Agreement and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, (b) all Hedge Obligations, and (c) all amounts that Agent or any Lender is obligated to pay to a Bank Product Provider as a result of Agent or such Lender purchasing participations from, or executing guarantees or indemnities or reimbursement obligations to, a Bank Product Provider with respect to the Bank Products provided by such Bank Product Provider to Parent or its Subsidiaries.

 

“Bank Product Provider” means Wells Fargo or any of its Affiliates (including WFCF).

 

“Bank Product Reserves” means, as of any date of determination, those reserves that Agent deems necessary or appropriate to establish (based upon the Bank Product Providers’ determination of the liabilities and obligations of Parent and its Subsidiaries in respect of Bank Product Obligations) in respect of Bank Products then provided or outstanding.

 

“Bankruptcy Code” means title 11 of the United States Code, as in effect from time to time.

 

“Base Rate” means the greatest of (a) the Federal Funds Rate plus 1⁄2%, (b) the LIBOR Rate (which rate shall be calculated based upon an Interest Period of 3 months and shall be determined on a daily basis), plus 1 percentage point, and (c) the rate of interest announced, from time to time, within Wells Fargo at its principal office in San Francisco, California as its “prime rate”, with the understanding that the “prime rate” is one of Wells Fargo’s base rates (not necessarily the lowest of such rates) and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto and is evidenced by the recording thereof after its announcement in such internal publications as Wells Fargo may designate.

 

“Base Rate Loan” means each portion of the Revolving Loans that bears interest at a rate determined by reference to the Base Rate.

 

“Base Rate Margin” means 2.50 percentage points.

 

“Benefit Plan” means a “defined benefit plan” (as defined in Section 3(35) of ERISA) for which Parent or any of its Subsidiaries or ERISA Affiliates has been an “employer” (as defined in Section 3(5) of ERISA) within the past six years.

 

“Blocked Account” means a Deposit Account in the name of a Borrower at Wells Fargo with account number 4945660959.

 

“Blocked Account Control Agreement” means that certain Deposit Account Control Agreement (Access Restricted Immediately — Two Secured Parties — Standing Transfer Order — Agent Account), dated as of July 6, 2012, by and among Borrowers, Agent, Term Loan Agent, and Wells Fargo.

 

“Blocked Account Funds” means all cash, funds, and other property and assets in the Blocked Account.

 

“Board of Directors” means, as to any Person, the board of directors (or comparable managers) of such Person or any committee thereof duly authorized to act on behalf of the board of directors (or comparable managers).

 

4

 

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

 

“Borrower” and “Borrowers” have the respective meanings specified therefor in the preamble to this Agreement.

 

“Borrower Materials” has the meaning specified therefor in Section 17.9(c).

 

“Borrowing” means a borrowing consisting of Revolving Loans made on the same day by the Lenders (or Agent on behalf thereof), or by Swing Lender in the case of a Swing Loan, or by Agent in the case of an Extraordinary Advance.

 

“Borrowing Base” means, as of any date of determination, the result of:

 

(a)                                  85% of the amount of Eligible Accounts, less the amount, if any, of the Dilution Reserve, plus

 

(b)           the lowest of

 

(i) $37,500,000,

 

(ii) (A) 70% multiplied by the sum of the value (calculated at the lower of cost or market on a first in, first out basis; provided, that with respect to (x) ethanol, (y) Ethanol Byproduct, and (z) corn purchased by Borrowers to be used to prepare first quality finished goods held for sale in the ordinary course of Borrowers’ business, market shall be based on the price of corn, ethanol or Ethanol Byproduct, as applicable, as listed by the Chicago Board of Trade at the close of business on the date prior to the date of delivery of each Borrowing Base Certificate pursuant to Schedule 5.2, adjusted by the local basis) of (1) Eligible Finished Goods Inventory at such time, and (2) Eligible Raw Materials Inventory at such time, plus (B) 85% multiplied by the Net Recovery Percentage identified in the most recent inventory appraisal ordered and obtained by Agent multiplied by the value (calculated at the lower of cost or market on a basis consistent with Borrowers’ historical accounting practices) of Eligible Work-in-Process Inventory,

 

(iii) (A) 85% multiplied by the sum of the Net Recovery Percentage identified in the most recent inventory appraisal ordered and obtained by Agent multiplied by the value (calculated at the lower of cost or market on a basis consistent with Borrowers’ historical accounting practices) of (1) Eligible Finished Goods Inventory (such determination may be made as to different categories of Eligible Finished Goods Inventory based upon the Net Recovery Percentage applicable to such categories) at such time, and (2) Eligible Raw Materials Inventory (such determination may be made as to different categories of Eligible Raw Materials Inventory based upon the Net Recovery Percentage applicable to such categories) at such time, plus (B) 85% multiplied by the sum of the Net Recovery Percentage identified in the most recent inventory appraisal ordered and obtained by Agent multiplied by the value (calculated at the lower of cost or market on a basis consistent with Borrowers’ historical accounting practices) of Eligible Work-in-Process Inventory (such determination may be made as to different categories of Eligible Work-in-Process Inventory based upon the Net Recovery Percentage applicable to such categories) at such time, minus

 

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(c)                                  the aggregate amount of reserves, if any, established by Agent under Section 2.1(c) and Section 2.1(d), plus

 

(d)                                 100% of the Blocked Account Funds as of such date of determination in an aggregate amount not to exceed $2,500,000.

 

“Borrowing Base Certificate” means a certificate in the form of Exhibit B-1.

 

“Business Day” means any day that is not a Saturday, Sunday, or other day on which banks are authorized or required to close in the state of California, except that, if a determination of a Business Day shall relate to a LIBOR Rate Loan, the term “Business Day” also shall exclude any day on which banks are closed for dealings in Dollar deposits in the London interbank market.

 

“Commodity Account” means any commodity account (as that term is defined in the Code).

 

“Capitalized Lease Obligation” means that portion of the obligations under a Capital Lease that is required to be capitalized in accordance with GAAP.

 

“Capital Lease” means a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

 

“Cash Equivalents” means (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within 1 year from the date of acquisition thereof, (b) marketable direct obligations issued or fully guaranteed by any state of the United States or any political subdivision of any such state or any public instrumentality thereof maturing within 1 year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poor’s Rating Group (“S&P”) or Moody’s Investors Service, Inc. (“Moody’s”), (c) commercial paper maturing no more than 270 days from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or at least P-1 from Moody’s, (d) certificates of deposit, time deposits, overnight bank deposits or bankers’ acceptances maturing within 1 year from the date of acquisition thereof issued by any bank organized under the laws of the United States or any state thereof or the District of Columbia or any United States branch of a foreign bank having at the date of acquisition thereof combined capital and surplus of not less than $1,000,000,000, (e) Deposit Accounts maintained with (i) any bank that satisfies the criteria described in clause (d) above, or (ii) any other bank organized under the laws of the United States or any state thereof so long as the full amount maintained with any such other bank is insured by the Federal Deposit Insurance Corporation, (f) repurchase obligations of any commercial bank satisfying the requirements of clause (d) of this definition or recognized securities dealer having combined capital and surplus of not less than $1,000,000,000, having a term of not more than seven days, with respect to securities satisfying the criteria in clauses (a) or (d) above, (g) debt securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any commercial bank satisfying the criteria described in clause (d) above, and (h) Investments in money market funds substantially all of whose assets are invested in the types of assets described in clauses (a) through (g) above.

 

“Cash Management Services” means any cash management or related services including treasury, depository, return items, overdraft, controlled disbursement, merchant store value cards, e-payables services, electronic funds transfer, interstate depository network, automatic clearing house transfer (including the Automated Clearing House processing of electronic funds transfers through the direct Federal Reserve Fedline system) and other cash management arrangements.

 

6

 

“Change in Control” means that:

 

(a)  the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Borrowers or any one or more of their Subsidiaries, taken as a whole, to any “person” (within the meaning of Section 13(d) of the Exchange Act);

 

(b)  the stockholders of any one or more Borrowers approve a plan for the liquidation or dissolution of any one or more of the Borrowers;

 

(c)  any Person or Persons acting together that would constitute a group (for purposes of Section 13(d) of the Exchange Act, or any successor provision thereto) (a “group”), together with any Affiliates or related Persons thereof, is or becomes the “Beneficial Owner,” directly or indirectly, of more than 50% of the voting power of the Voting Stock of Parent; provided that none of the New Equity Holders shall be deemed to be acting together as a group for this purpose;

 

(d)  individuals who on the Closing Date constituted the Board of Directors of Parent (together with any new directors whose election by the Board of Directors of Parent or whose nomination by the Board of Directors of Parent for election by Parent’s stockholders was approved by a vote of at least a majority of the Board of Directors of Parent then in office who either were members of the Board of Directors of Parent on the Closing Date or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the members of the Board of Directors of Parent then in office;

 

(e)  the failure at any time of (i) Parent to legally and beneficially own and control 100% of the issued and outstanding shares of Equity Interests of each other Loan Party, other than Nebraska; (ii) Parent to legally and beneficially own and control 78.4% of the issued and outstanding shares of Equity Interests of Nebraska or AREI to legally and beneficially own and control 21.6% of the issued and outstanding shares of Equity Interests of Nebraska; or (iii) Parent to have the ability to elect all of the members of the Board of Directors of each other Loan Party; or

 

(f)  the occurrence of any “Change of Control” as defined in the Term Loan Agreement.

 

“Change in Law” means the occurrence after the date of the Agreement of:  (a) the adoption or effectiveness of any law, rule, regulation, judicial ruling, judgment or treaty, (b) any change in any law, rule, regulation, judicial ruling, judgment or treaty or in the administration, interpretation, implementation or application by any Governmental Authority of any law, rule, regulation, guideline or treaty, or (c) the making or issuance by any Governmental Authority of any request, rule, guideline or directive, whether or not having the force of law; provided that notwithstanding anything in the Agreement to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives concerning capital adequacy promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities shall, in each case, be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.

 

“Claim” has the meaning specified therefor in Section 17.17(a).

 

“Closing Date” means the date on which Agent acknowledges to Borrowers that Agent is satisfied that each of the conditions precedent set forth on Schedule 3.1 have either been satisfied or waived.

 

“Code” means the California Uniform Commercial Code, as in effect from time to time.

 

“Collateral” means all assets and interests in assets and proceeds thereof now owned or hereafter acquired by Parent or its Subsidiaries in or upon which a Lien is granted by such Person in favor of Agent or the Lenders under any of the Loan Documents.

 

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“Collateral Access Agreement” means a landlord waiver, bailee letter, or acknowledgement agreement of any lessor, warehouseman, processor, consignee, or other Person in possession of, having a Lien upon, or having rights or interests in the Loan Parties’ books and records, Equipment, or Inventory, in each case, in form and substance reasonably satisfactory to Agent.

 

“Commitment” means, with respect to each Lender, its Commitment, and, with respect to all Lenders, their Commitments, as such Dollar amounts are set forth beside such Lender’s name under the applicable heading on Schedule C-1 or in the Assignment and Acceptance pursuant to which such Lender became a Lender under this Agreement, as such amounts may be (a) reduced or increased from time to time pursuant to assignments made in accordance with the provisions of Section 13.1, (b) reduced pursuant to Section 2.4(c), or (c) increased pursuant to Section 2.14.

 

“Competitor” means any Person which is a direct competitor of a Borrower or its Subsidiaries if, at the time of a proposed assignment, Agent and the assigning Lender have actual knowledge that such Person is a direct competitor of such Borrower or its Subsidiaries; provided, that in connection with any assignment or participation, the Assignee or Participant with respect to such proposed assignment or participation that is an investment bank, a commercial bank, a finance company, a fund, or other Person which merely has an economic interest in any such direct competitor, and is not itself such a direct competitor of a Borrower or its Subsidiaries, shall not be deemed to be a direct competitor for the purposes of this definition.

 

“Compliance Certificate” means a certificate substantially in the form of Exhibit C-1 delivered by a Financial Officer of Parent to Agent.

 

“Confidential Information” has the meaning specified therefor in Section 17.9(a).

 

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

 

“Control Agreement” means a control agreement, in form and substance reasonably satisfactory to Agent, executed and delivered by Parent or one of its Subsidiaries, Agent, and the applicable securities intermediary (with respect to a Securities Account) or bank (with respect to a Deposit Account), or commodities intermediary (with respect to a Commodities Account).

 

“Coop Litigation” has the meaning specified therefor on Schedule C-2.

 

“Copyright Security Agreement” has the meaning specified therefor in the Guaranty and Security Agreement.

 

“Court” has the meaning specified therefor in Section 12(f).

 

“Default” means an event, condition, or default that, with the giving of notice, the passage of time, or both, would be an Event of Default.

 

“Defaulting Lender” means any Lender that (a) has failed to fund any amounts required to be funded by it under this Agreement on the date that it is required to do so under this Agreement (including the failure to make available to Agent amounts required pursuant to a Settlement or to make a required payment in connection with a Letter of Credit Disbursement), (b) notified any Borrower, Agent, or any Lender in writing that it does not intend to comply with all or any portion of its funding obligations under this Agreement, (c) has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or under other agreements generally (as reasonably determined by Agent) under which it has committed to extend credit, (d) failed, within 1 Business Day after written request by Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund any amounts required to

 

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be funded by it under this Agreement, (e) otherwise failed to pay over to Agent or any other Lender any other amount required to be paid by it under this Agreement on the date that it is required to do so under this Agreement, or (f)(i) becomes or is insolvent or has a parent company that has become or is insolvent or (ii) becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, or custodian or appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment.

 

“Defaulting Lender Rate” means (a) for the first 3 days from and after the date the relevant payment is due, the Base Rate, and (b) thereafter, the interest rate then applicable to Revolving Loans that are Base Rate Loans (inclusive of the Base Rate Margin applicable thereto).

 

“Deposit Account” means any deposit account (as that term is defined in the Code).

 

“Designated Account” means the Deposit Account of Administrative Borrower or AREI identified on Schedule D-1 (or such other Deposit Account of Administrative Borrower or AREI located at Designated Account Bank that has been designated as such, in writing, by Administrative Borrower to Agent).

 

“Designated Account Bank” has the meaning specified therefor in Schedule D-1 (or such other bank that is located within the United States that has been designated as such, in writing, by Administrative Borrower to Agent).

 

“Dilution” means, as of any date of determination, a percentage, based upon the experience of the immediately prior 90 consecutive days, that is the result of dividing the Dollar amount of (a) bad debt write-downs, discounts, advertising allowances, credits, or other dilutive items with respect to Borrowers’ Accounts during such period, by (b) Borrowers’ billings with respect to Accounts during such period.

 

“Dilution Reserve” means, as of any date of determination, an amount sufficient to reduce the advance rate against Eligible Accounts by 1 percentage point for each percentage point by which Dilution is in excess of 5%.

 

“Disqualified Equity Interests” shall mean any Equity Interest that, by its terms (or by the terms of any security or other Equity Interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (a) matures or is mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments), (b) is redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests), in whole or in part, (c) provides for the scheduled payments of dividends in cash, or (d) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is 180 days after the Maturity Date.

 

“Dollars” or “$” means United States dollars.

 

“Drawing Document” means any Letter of Credit or other document presented for purposes of drawing under any Letter of Credit.

 

“Eligible Accounts” means those Accounts created by any Borrower in the ordinary course of its business, that arise out of such Borrower’s sale of goods or rendition of services, that comply with each of the representations and warranties respecting Eligible Accounts made in the Loan Documents, and that are not

 

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excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, that such criteria may be revised from time to time by Agent in Agent’s Permitted Discretion to address the results of any field examination performed by (or on behalf of) Agent from time to time after the Closing Date.  In determining the amount to be included, Eligible Accounts shall be calculated net of customer deposits, unapplied cash, taxes, discounts, credits, allowances, and rebates.  Eligible Accounts shall not include the following:

 

(a)                                  Accounts that (i) an Account Debtor listed on Schedule 1.1(a) (as such Schedule may be updated from time to time with prior written consent of Agent) has failed to pay within the lesser of (A) a period of time equal to the amount of days of the selling terms for such Account multiplied by 3 and (B) 45 days, and (ii) an Account Debtor, other than an Account Debtor listed on Schedule 1.1(a), has failed to pay within the lesser of (A) a period of time equal to the amount of days of the selling terms for such Account multiplied by 3 and (B) 30 days,

 

(b)                                 Accounts owed by an Account Debtor (or its Affiliates) where 50% or more of all Accounts owed by that Account Debtor (or its Affiliates) are deemed ineligible under clause (a) above,

 

(c)                                  Accounts with respect to which the Account Debtor is an Affiliate of a Borrower or an employee or agent of a Borrower or any Affiliate of a Borrower,

 

(d)                                 Accounts arising in a transaction wherein goods are placed on consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale on approval, a bill and hold, or any other terms by reason of which the payment by the Account Debtor may be conditional,

 

(e)                                  Accounts that are not payable in Dollars,

 

(f)                                    Accounts with respect to which the Account Debtor (i) does not maintain its chief executive office in the United States, (ii) is not organized under the laws of the United States or any state thereof, or (iii) is the government of any foreign country or sovereign state, or of any state, province, municipality, or other political subdivision thereof, or of any department, agency, public corporation, or other instrumentality thereof, unless (A) the Account is supported by an irrevocable letter of credit reasonably satisfactory to Agent (as to form, substance, and issuer or domestic confirming bank) that has been delivered to Agent and is directly drawable by Agent, or (B) the Account is covered by credit insurance in form, substance, and amount, and by an insurer, reasonably satisfactory to Agent,

 

(g)                                 Accounts with respect to which the Account Debtor is either (i) the United States or any department, agency, or instrumentality of the United States (exclusive, however, of Accounts with respect to which Borrowers have complied, to the reasonable satisfaction of Agent, with the Assignment of Claims Act, 31 USC §3727), or (ii) any state of the United States,

 

(h)                                 Accounts with respect to which the Account Debtor is a creditor of a Borrower, has or has asserted a right of recoupment or setoff, or has disputed its obligation to pay all or any portion of the Account, to the extent of such claim, right of recoupment or setoff, or dispute,

 

(i)                                     Accounts with respect to (i) an Account Debtor with (A) a corporate credit rating from S&P of BBB or higher or (B) a corporate credit rating from Moody’s of Baa2 or higher, in each case whose total obligations owing to Borrowers exceed 35% (such percentage, as applied to a particular Account Debtor, being subject to reduction by Agent in its Permitted Discretion if the creditworthiness of such Account Debtor deteriorates) of all Eligible Accounts, to the extent of the obligations owing by such Account Debtor in excess of such percentage and (ii) an Account Debtor, other than an Account Debtor included in the foregoing clause (i), whose total obligations owing to Borrowers exceed 10% (such percentage, as applied to a particular Account Debtor, being subject to reduction by Agent in its Permitted Discretion if the creditworthiness of such Account Debtor deteriorates) of all Eligible Accounts, to the extent of the obligations owing by such Account

 

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Debtor in excess of such percentage; provided, that, in each case, the amount of Eligible Accounts that are excluded because they exceed the foregoing percentage shall be determined by Agent based on all of the otherwise Eligible Accounts prior to giving effect to any eliminations based upon the foregoing concentration limit,

 

(j)                                     Accounts with respect to which the Account Debtor is subject to an Insolvency Proceeding, is not Solvent, has gone out of business, or as to which a Borrower has received notice of an imminent Insolvency Proceeding or a material impairment of the financial condition of such Account Debtor,

 

(k)                                  Accounts, the collection of which, Agent, in its Permitted Discretion, believes to be doubtful, including by reason of the Account Debtor’s financial condition,

 

(l)                                     Accounts that are not subject to a valid and perfected first priority Agent’s Lien,

 

(m)                               Accounts with respect to which (i) the goods giving rise to such Account have not been shipped and billed to the Account Debtor, or (ii) the services giving rise to such Account have not been performed and billed to the Account Debtor,

 

(n)                                 Accounts with respect to which the Account Debtor is a Sanctioned Person or Sanctioned Entity,

 

(o)                                 Accounts that represent the right to receive progress payments or other advance billings that are due prior to the completion of performance by Borrowers of the subject contract for goods or services,

 

(p)                                 Accounts owned by a target acquired in connection with a Permitted Acquisition, until the completion of an appraisal and field examination with respect to such target, in each case, reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition), or

 

(q)                                 Accounts resulting from the sale or other disposition of Port Inventory; provided, that such Accounts shall not be deemed ineligible solely as a result of this clause (q) from and after the date that the Port A/R Documentation has been executed and delivered by all parties thereto.

 

“Eligible Finished Goods Inventory” shall mean Inventory that qualifies as Eligible Inventory and consists of first quality finished goods held for sale in the ordinary course of Borrowers’ business.

 

“Eligible Inventory” means Inventory of a Borrower, that complies with each of the representations and warranties respecting Eligible Inventory made in the Loan Documents, and that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, that such criteria may be revised from time to time by Agent in Agent’s Permitted Discretion to address the results of any field examination or appraisal performed by Agent from time to time after the Closing Date.  In determining the amount to be so included, Inventory shall be valued at the lower of cost or market on a basis consistent with Borrowers’ historical accounting practices.  An item of Inventory shall not be included in Eligible Inventory if:

 

(a)                                  a Borrower does not have good, valid, and marketable title thereto,

 

(b)                                 a Borrower does not have actual and exclusive possession thereof (either directly or through a bailee or agent of such Borrower),

 

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(c)                                  it is not located at one of the locations in the continental United States set forth on Schedule E-1 (as such Schedule may be updated from time to time with prior written consent of Agent) (or in-transit from one such location to another such location),

 

(d)                                 it is in-transit to or from a location of a Borrower (other than in-transit from one location set forth on Schedule E-1 (as such Schedule may be updated from time to time with prior written consent of Agent) to another location set forth on Schedule E-1 and other than ethanol that is in transit from one location set forth on Schedule E-1 to an Account Debtor with respect to which Eligible Accounts will be created by delivery of such Inventory to such Account Debtor),

 

(e)                                  it is located on real property leased by a Borrower or in a contract warehouse, in each case, unless it is subject to a Collateral Access Agreement executed by the lessor or warehouseman, as the case may be, and unless it is segregated or otherwise separately identifiable from goods of others, if any, stored on the premises,

 

(f)                                    it is the subject of a bill of lading or other document of title,

 

(g)                                 it is not subject to a valid and perfected first priority Agent’s Lien,

 

(h)                                 it consists of goods returned or rejected by a Borrower’s customers,

 

(i)                                     it consists of goods that are obsolete or slow moving, restrictive or custom items, or goods that constitute spare parts, packaging and shipping materials, supplies used or consumed in Borrowers’ business, bill and hold goods, defective goods, “seconds”, or Inventory acquired on or held on consignment,

 

(j)                                     it is subject to third party trademark, licensing or other proprietary rights, unless Agent is satisfied that such Inventory can be freely sold by Agent on and after the occurrence of an Event of a Default despite such third party rights,

 

(k)                                  it was acquired in connection with a Permitted Acquisition, until the completion of an appraisal and field examination of such Inventory, in each case, reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition),

 

(l)                                     it consists of goods which have been paid for by or on behalf of an Account Debtor prior to the delivery of such goods to such Account Debtor, or

 

(m)                               it is Port Inventory; provided, that Port Inventory shall not be deemed ineligible solely as a result of this clause (m) from and after the date that the Port Inventory Documentation has been executed and delivered by all parties thereto to Agent.

 

“Eligible Raw Material Inventory” shall mean Inventory that qualifies as Eligible Inventory and consists of goods that are first quality raw materials to the extent such goods are used to prepare Eligible Work-in-Process Inventory; provided, that, anything to the contrary contained herein notwithstanding, the value of such Inventory shall not include the value of any labor or other services rendered to produce such Inventory or the cost of converting such Inventory into Eligible Work-in-Process Inventory.

 

“Eligible Work-in-Process Inventory” shall mean Inventory that qualifies as Eligible Inventory and consists of goods that are first quality work-in-process to the extent such goods are used to prepare Eligible Finished Goods; provided, that, anything to the contrary contained herein notwithstanding, the value of such Inventory shall not include the value of any labor or other services rendered to produce such Inventory or the cost of converting such Inventory into Eligible Finished Goods.

 

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“Employee Benefit Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA (a) that is maintained for employees of any Loan Party or any ERISA Affiliate, (b) that has at any time within the preceding six (6) years been maintained for the employees of any Loan Party or any current or former ERISA Affiliate, (c) to which any Loan Party or any ERISA Affiliate makes contributions or is required to make contributions, (d) to which any Loan Party or any ERISA Affiliate has made or has been required to make contributions at any time within the preceding six (6) years or (e) to which any Loan Party to any ERISA Affiliate has, or has had at any time within the preceding six (6) years, any liability, contingent or otherwise.

 

“Environmental Action” means any actual or, to the knowledge of a Responsible Officer, threatened complaint, summons, citation, notice, directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter, or other written communication from any Governmental Authority, or any third party either involving violations by any Borrower or any Subsidiary of Borrower of Environmental Laws, or related to any Releases of Hazardous Materials (a) occurring at any assets, properties, or businesses owned or operated by any Borrower, any Subsidiary of a Borrower, or any of their predecessors in interest, including those arising from adjoining properties or businesses, or (b) arising from facilities which received Hazardous Materials generated by any Borrower, any Subsidiary of a Borrower, or any of their predecessors in interest.

 

“Environmental Law” means any applicable federal, state, provincial, foreign or local statute, law, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written policy, or rule of common law now or hereafter in effect and in each case as amended, or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, in each case, relating to the environment, the effect of the environment on employee health, or Hazardous Materials, in each case as amended from time to time.

 

“Environmental Liabilities” means all liabilities, monetary obligations, losses, damages, costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts, or consultants, and costs of investigation and feasibility studies), fines, penalties, sanctions, and interest incurred as a result of any violations of or non-compliance with Environmental Laws, Releases of Hazardous Substances, claims or demands for, or Remedial Action required, by any Governmental Authority or any third party relating to or otherwise impacting any assets or properties owned or operated by any Borrower or their Subsidiary.

 

“Environmental Lien” means any Lien in favor of any Governmental Authority for Environmental Liabilities.

 

“Equipment” means equipment (as that term is defined in the Code).

 

“Equity Documents” means, collectively, the Subscription Agreement, the Stockholders Agreement, the Registration Rights Agreement, the Warrants, the Warrant Agreement, the Amended and Restated Certificate of Incorporation of Parent, and the Amended and Restated By-Laws of Parent, and each of the other documents and agreements entered into by all or some of Parent, the New Equity Holders, the Original Equity Holders and/or other parties in connection with the Equity Transactions, in each case, as in effect on the Closing Date.

 

“Equity Interest” means, with respect to a Person, all of the shares, options, warrants, interests, participations, or other equivalents (regardless of how designated) of or in such Person, whether voting or nonvoting, including capital stock (or other ownership or profit interests or units), preferred stock, or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act).

 

“Equity Transactions” means the transactions to occur on or prior to the Closing Date pursuant to the Equity Documents, pursuant to which (a) the beneficial owners of all of Parent’s Equity

 

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Interests will consist of the Original Equity Holders and the New Equity Holders, (b) the Original Equity Holders will own 7.5% of the issued and outstanding Equity Interests of Parent, on a fully-diluted basis, immediately after giving effect to the New Equity Issuance (without giving effect to the Warrants), (c) the New Equity Holders will own newly issued common stock of Parent equal to 92.5% of the issued and outstanding Equity Interests of Parent, on a fully-diluted basis (without giving effect to the Warrants), (d) 50% of such newly issued Equity Interests will be issued to the Term Loan A Lenders (or their designees) in consideration of the Term Loan A Lenders’ agreement to make the Term Loan A pursuant to the Term Loan Agreement, and (e) 50% of such newly issued Equity Interests will be issued to all of the Term Loan Lenders existing as of the Closing Date (or their designees) in exchange for the cancellation of the outstanding balance of the Existing Term Loan other than the portion thereof continued and reconstituted as the Term Loan B pursuant to the Term Loan Agreement.

 

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

 

“ERISA Affiliate” means (a) any Person subject to ERISA whose employees are treated as employed by the same employer as the employees of Parent or its Subsidiaries under IRC Section 414(b), (b) any trade or business subject to ERISA whose employees are treated as employed by the same employer as the employees of Parent or its Subsidiaries under IRC Section 414(c), (c) solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any organization subject to ERISA that is a member of an affiliated service group of which Parent or any of its Subsidiaries is a member under IRC Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any Person subject to ERISA that is a party to an arrangement with Parent or any of its Subsidiaries and whose employees are aggregated with the employees of Parent or its Subsidiaries under IRC Section 414(o).

 

“Estoppel Agreement” means a letter agreement, dated as of the Original Closing Date, executed and delivered by Parent and each of its Subsidiaries in favor of Agent.

 

“Ethanol Byproduct” means the byproduct created in the production of ethanol.

 

“Event of Default” has the meaning specified therefor in Section 8.

 

“Excess” has the meaning specified therefor in Section 2.14(b)(iv).

 

“Excess Availability” means, as of any date of determination, the amount equal to Availability minus the aggregate amount, if any, of all trade payables of Parent and its Subsidiaries aged in excess of historical levels with respect thereto and all book overdrafts of Parent and its Subsidiaries in excess of historical practices with respect thereto, in each case as determined by Agent in its Permitted Discretion.

 

“Excess Availability Requirement” has the meaning specified therefor in Section 5.20.

 

“Exchange Act” means the Securities Exchange Act of 1934, as in effect from time to time.

 

“Existing Letters of Credit” means all Letters of Credit issued under the Original Credit Agreement and outstanding as of the Closing Date.

 

“Existing Port of Indiana Subordination Agreement” means that certain Subordination Agreement, dated as of March 22, 2011, among Term Loan Agent, PNC, The Ports of Indiana, a body corporate and politic existing under the laws of the State of Indiana, formerly known as the Indiana Port Commission, and Aventine Renewable Energy — Mt Vernon, LLC.

 

“Extraordinary Advances” has the meaning specified therefor in Section 2.3(d)(i).

 

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“Fee Letter” means that certain Amended and Restated Fee Letter, dated as of even date with this Agreement, by and among Borrowers and Agent, in form and substance reasonably satisfactory to Agent.

 

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

 

“Financial Condition Certificate” means that certain financial condition certificate, dated as of even date with this Agreement, executed by a Financial Officer of each of Borrowers, in form and substance reasonably satisfactory to Agent.

 

“Financial Officer” means with respect to any Person, the chief financial officer, chief accounting officer, vice president of finance, treasurer, assistant treasurer or controller of such Person.

 

“Forbearance Agreement” means that certain Forbearance Agreement, dated as of July 27, 2012, by and among Borrowers, the Lenders, and Agent.

 

“Foreign Lender” means any Lender or Participant that is not a United States person within the meaning of IRC section 7701(a)(30).

 

“Funding Date” means the date on which a Borrowing occurs.

 

“Funding Losses” has the meaning specified therefor in Section 2.12(b)(ii).

 

“GAAP” means generally accepted accounting principles as in effect from time to time in the United States, consistently applied.

 

“Governing Documents” means, with respect to any Person, the certificate or articles of incorporation, by-laws, or other organizational documents of such Person.

 

“Governmental Authority” means any federal, state, local, or other governmental or administrative body, instrumentality, board, department, or agency or any court, tribunal, administrative hearing body, arbitration panel, commission, or other similar dispute-resolving panel or body.

 

“Guarantors” means each Person that becomes a guarantor after the Closing Date pursuant to Section 5.11 and “Guarantor” means any one of them.

 

“Guaranty and Security Agreement” means that certain Amended and Restated Guaranty and Security Agreement, dated as of the Original Closing Date, executed and delivered by each Loan Party to Agent, as the same may have been or may be amended, restated, supplemented or otherwise modified from time to time thereafter in form and substance reasonably satisfactory to Agent.

 

“Hazardous Materials” means (a) substances that are defined or listed in, or otherwise classified pursuant to, any applicable Environmental Laws as “hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic substances,” or any other formulation intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity, or “EP toxicity”, (b) oil, petroleum, or petroleum derived substances, natural gas, natural gas liquids, synthetic gas, drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil, natural gas, or geothermal resources, and (c) asbestos in any form or electrical

 

15

 

equipment that contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of 50 parts per million.

 

“Hedge Agreement” means (a) a “swap agreement” as that term is defined in Section 101(53B)(A) of the Bankruptcy Code and (b) all agreements with respect to carbon credits, renewable identification numbers and other similar rights issued by the United States Environmental Protection Agency or any other Governmental Authority, rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, cross product hedges, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options of forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, carbon credits, renewable identification numbers under the Renewable Fuel Standard program under the Foreign Policy Act of 2005 and other similar rights, or any other similar transactions or any combination of the foregoing (including options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, entered into for the purpose of hedging the risk associated with Parent’s and its Subsidiaries’ operations and not for speculative purposes.

 

“Hedge Obligations” means any and all obligations or liabilities, whether absolute or contingent, due or to become due, now existing or hereafter arising, of Parent or its Subsidiaries arising under, owing pursuant to, or existing in respect of Hedge Agreements entered into with one or more of the Hedge Providers.

 

“Hedge Provider” means Wells Fargo or any of its Affiliates.

 

“Increase” has the meaning specified therefor in Section 2.14(a).

 

“Increase Date” has the meaning specified therefor in Section 2.14(b)(iv).

 

“Increase Joinder” has the meaning specified therefor in Section 2.14(b)(i).

 

“Indebtedness” as to any Person means (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit, bankers acceptances, or other financial products, (c) all obligations of such Person as a lessee under Capital Leases, (d) all obligations or liabilities of others secured by a Lien on any asset of such Person, irrespective of whether such obligation or liability is assumed, (e) all obligations of such Person to pay the deferred purchase price of assets (other than trade payables incurred in the ordinary course of business and repayable in accordance with customary trade practices and, for the avoidance of doubt, other than royalty payments payable in the ordinary course of business in respect of non-exclusive licenses), (f) to the extent not otherwise included in this definition, all monetary obligations of such Person owing under Hedge Agreements (which amount shall be calculated based on the amount that would be payable by such Person if the Hedge Agreement were terminated on the date of determination), (g) any Disqualified Equity Interests of such Person, and (h) any obligation of such Person guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation of any other Person that constitutes Indebtedness under any of clauses (a) through (g) above.  For purposes of this definition, (i) the amount of any Indebtedness represented by a guaranty or other similar instrument shall be the lesser of the principal amount of the obligations guaranteed and still outstanding and the maximum amount for which the guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Indebtedness, and (ii) the amount of any Indebtedness which is limited or is non-recourse to a Person or for which recourse is limited to an identified asset shall be valued at the lesser of (A) if applicable, the limited amount of such obligations, and (B) if applicable, the fair market value of such assets securing such obligation.

 

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“Indemnified Liabilities” has the meaning specified therefor in Section 10.3.

 

“Indemnified Person” has the meaning specified therefor in Section 10.3.

 

“Indiana Port Lease Agreement” means the Lease Agreement, dated as of October 31, 2006, between the Indiana Port Lessor and the Indiana Port Lessee, as amended by 8 amendments prior to the Original Closing Date, and as the same may have been or may be amended, restated, supplemented or otherwise modified from time to time thereafter in a manner satisfactory to Agent.

 

“Indiana Port Lease Collateral” means Equipment or Fixtures of the Indiana Port Lessee that are now or hereafter located on the Indiana Port Leased Premises, but only for the period of time that the Indiana Port Lease Agreement is in full force and effect and ARE-MT is the Indiana Port Lessee.

 

“Indiana Port Leased Premises” means the real property leasehold interest located at 7201 Port Road, Mt. Vernon, Indiana 47620 that is leased by the Indiana Port Lessee from the Indiana Port Lessor pursuant to the Indiana Port Lease Agreement.

 

“Indiana Port Lessee” means the lessee under the Indiana Port Lease Agreement, which is ARE-MT.

 

“Indiana Port Lessor” means The Ports of Indiana, a body corporate and politic existing under the laws of the State of Indiana, and its successors and assigns.

 

“Ineligible Institution” shall mean the Persons identified in writing to Agent by Borrowers on or prior to the Closing Date, which listing is consented to in writing by Agent (such consent not to be unreasonably withheld or delayed).

 

“Insolvency Proceeding” means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.

 

“Intercompany Subordination Agreement” means that certain Intercompany Subordination Agreement, dated as of the Original Closing Date, executed and delivered by Parent, each of its Subsidiaries, and Agent, as the same may have been or may be amended, restated, supplemented or otherwise modified from time to time thereafter in form and substance reasonably satisfactory to Agent.

 

“Intercreditor Agreement” means that certain Second Amended and Restated Intercreditor Agreement, dated as of even date with this Agreement, executed by and among Term Loan Agent and Agent, and acknowledged by Borrowers, in form and substance reasonably satisfactory to Agent, and as the same may be further amended, modified or restated in accordance with the terms hereof.

 

“Interest Period” means, with respect to each LIBOR Rate Loan, a period commencing on the date of the making of such LIBOR Rate Loan (or the continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a LIBOR Rate Loan) and ending 1, 2, or 3 months thereafter; provided, that (a) interest shall accrue at the applicable rate based upon the LIBOR Rate from and including the first day of each Interest Period to, but excluding, the day on which any Interest Period expires, (b) any Interest Period that would end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day, (c) with respect to an Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period), the Interest Period shall end on the last Business Day of the calendar month that is

 

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1, 2, or 3 months after the date on which the Interest Period began, as applicable, and (d) Borrowers may not elect an Interest Period which will end after the Maturity Date.

 

“Inventory” means inventory (as that term is defined in the Code).

 

“Inventory Reserves” means, as of any date of determination, (a) Landlord Reserves and (b) those reserves that Agent deems necessary or appropriate, in its Permitted Discretion and subject to Section 2.1(c), to establish and maintain (including reserves for slow moving Inventory, for Inventory shrinkage, and for unpaid corn in order to mitigate the effects of the Perishable Agricultural Commodities Act of 1930) with respect to Eligible Inventory.

 

“Investment” means, with respect to any Person, any investment by such Person in any other Person (including Affiliates) in the form of loans, guarantees, advances, capital contributions (excluding (a) payroll, commission, travel, and similar advances to officers and employees of such Person made in the ordinary course of business, and (b) bona fide Accounts arising in the ordinary course of business), or acquisitions of Indebtedness, Equity Interests, or all or substantially all of the assets of such other Person (or of any division or business line of such other Person), and any other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP.  The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustment for increases or decreases in value, or write-ups, write-downs, or write-offs with respect to such Investment.

 

“IRC” means the Internal Revenue Code of 1986, as in effect from time to time.

 

“ISP” means, with respect to any Letter of Credit, the International Standby Practices 1998 (International Chamber of Commerce Publication No. 590) and any subsequent revision thereof adopted by the International Chamber of Commerce on the date such Letter of Credit is issued.

 

“Issuer Document” means, with respect to any Letter of Credit, a letter of credit application, a letter of credit agreement, or any other document, agreement or instrument entered into (or to be entered into) by a Borrower in favor of Issuing Bank and relating to such Letter of Credit.

 

“Issuing Bank” means Wells Fargo or any other Lender that, at the request of Borrowers and with the consent of Agent, agrees, in such Lender’s sole discretion, to become an Issuing Bank for the purpose of issuing Letters of Credit pursuant to Section 2.11, and Issuing Bank shall be a Lender.

 

“Jefferies Commodity Accounts” means those Commodity Accounts of AREI held at Jefferies Bache, LLC bearing the account number BTB-950791 and subaccount numbers BTB-95079 and BTB-952751.

 

“Landlord Reserve” means, as to each location at which any Borrower has Inventory located and as to which a Collateral Access Agreement has not been received by Agent, a reserve in an amount equal to the greater of (a) the number of months rent for which the landlord will have, under applicable law, a Lien in the Inventory of Borrower to secure the payment of rent or other amounts under the lease relative to such location, or (b) 3 months rent under the lease relative to such location.

 

“Lender” has the meaning set forth in the preamble to this Agreement, shall include Issuing Bank and the Swing Lender, and shall also include any other Person made a party to this Agreement pursuant to the provisions of Section 13.1 and “Lenders” means each of the Lenders or any one or more of them.

 

“Lender Group” means each of the Lenders (including Issuing Bank and the Swing Lender) and Agent, or any one or more of them.

 

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“Lender Group Expenses” means all (a) costs or expenses (including taxes and insurance premiums) required to be paid by Parent or its Subsidiaries under any of the Loan Documents that are paid, advanced, or incurred by the Lender Group, (b) documented out-of-pocket fees or charges paid or incurred by Agent in connection with the Lender Group’s transactions with Parent or its Subsidiaries under any of the Loan Documents, including, fees or charges for photocopying, notarization, couriers and messengers, telecommunication, public record searches, filing fees, recording fees, publication, appraisal (including periodic collateral appraisals or business valuations to the extent of the fees and charges (and up to the amount of any limitation) contained in this Agreement or the Fee Letter), real estate surveys, real estate title policies and endorsements, and environmental audits, (c) Agent’s customary fees and charges (as adjusted from time to time) with respect to the disbursement of funds (or the receipt of funds) to or for the account of Borrowers (whether by wire transfer or otherwise), together with any documented out-of-pocket costs and expenses incurred in connection therewith, (d) customary charges imposed or incurred by Agent resulting from the dishonor of checks payable by or to any Loan Party, (e) reasonable and documented out-of-pocket costs and expenses paid or incurred by the Lender Group to correct any default or enforce any provision of the Loan Documents, or during the continuance of an Event of Default, in gaining possession of, maintaining, handling, preserving, storing, shipping, selling, preparing for sale, or advertising to sell the Collateral, or any portion thereof, irrespective of whether a sale is consummated, (f) documented field examination, appraisal, electronic reporting, and valuation fees and expenses (including travel, meals, and lodging) of Agent related to any inspections, field examinations, appraisals, establishment of electronic reporting, or valuation to the extent of the fees and charges (and up to the amount of any limitation) provided in Section 2.10, (g) Agent’s reasonable costs and expenses (including reasonable documented attorneys’ fees and expenses) relative to third party claims or any other lawsuit or adverse proceeding paid or incurred, whether in enforcing or defending the Loan Documents or otherwise in connection with the transactions contemplated by the Loan Documents, Agent’s Liens in and to the Collateral, or the Lender Group’s relationship with Parent or any of its Subsidiaries, (h) Agent’s reasonable documented costs and expenses (including reasonable documented attorneys’ fees and due diligence expenses) incurred in advising, structuring, drafting, reviewing, administering (including travel, meals, and lodging), syndicating (including reasonable costs and expenses relative to CUSIP, DXSyndicateTM, SyndTrak or other communication costs incurred in connection with a syndication of the loan facilities), or amending, waiving, or modifying the Loan Documents, (i) Agent’s and each Lender’s reasonable documented costs and expenses (including reasonable documented attorneys, accountants, consultants, and other advisors fees and expenses) incurred in terminating, enforcing (including attorneys, accountants, consultants, and other advisors fees and expenses incurred in connection with a “workout,” a “restructuring,” or an Insolvency Proceeding concerning Parent or any of its Subsidiaries or in exercising rights or remedies under the Loan Documents), or defending the Loan Documents, irrespective of whether a lawsuit or other adverse proceeding is brought, or in taking any enforcement action or any Remedial Action with respect to the Collateral, and (j) the fees, charges, commissions and costs provided for in Section 2.11(k) (including any fronting fees) and all other fees, charges, commissions, costs and expenses for amendments, renewals, extensions, transfers, or drawings from time to time incurred or charged by Issuing Bank in respect of Letters of Credit and out-of-pocket fees, costs, and expenses incurred or charged by Issuing Bank in connection with the issuance, amendment, renewal, extension, or transfer of, or drawing under, any Letter of Credit or any demand for payment thereunder.

 

“Lender Group Representatives” has the meaning specified therefor in Section 17.9.

 

“Lender-Related Person” means, with respect to any Lender, such Lender, together with such Lender’s Affiliates, officers, directors, employees, attorneys, and agents.

 

“Letter of Credit” means a letter of credit (as that term is defined in the Code) issued by Issuing Bank.

 

“Letter of Credit Collateralization” means either (a) providing cash collateral (pursuant to documentation reasonably satisfactory to Agent, including provisions that specify that the Letter of Credit Fees and all commissions, fees, charges and expenses provided for in Section 2.11(k) (including any fronting fees)

 

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will continue to accrue while the Letters of Credit are outstanding) to be held by Agent for the benefit of the Lenders in an amount equal to 103% of the then existing Letter of Credit Usage, (b) delivering to Agent documentation executed by all beneficiaries under the Letters of Credit, in form and substance reasonably satisfactory to Agent and Issuing Bank, terminating all of such beneficiaries’ rights under the Letters of Credit, or (c) providing Agent with a standby letter of credit, in form and substance reasonably satisfactory to Agent, from a commercial bank acceptable to Agent (in its sole discretion) in an amount equal to 103% of the then existing Letter of Credit Usage (it being understood that the Letter of Credit Fee and all fronting fees set forth in this Agreement will continue to accrue while the Letters of Credit are outstanding and that any such fees that accrue must be an amount that can be drawn under any such standby letter of credit).

 

“Letter of Credit Disbursement” means a payment made by Issuing pursuant to a Letter of Credit.

 

“Letter of Credit Exposure” means, as of any date of determination with respect to any Lender, such Lender’s Pro Rata Share of the Letter of Credit Usage on such date.

 

“Letter of Credit Fee” has the meaning specified therefor in Section 2.6(b).

 

“Letter of Credit Indemnified Costs” has the meaning specified therefor in Section 2.11(f) of the Agreement.

 

“Letter of Credit Related Person” has the meaning specified therefor in Section 2.11(f) of the Agreement.

 

“Letter of Credit Usage” means, as of any date of determination, the aggregate undrawn amount of all outstanding Letters of Credit.

 

“LIBOR Deadline” has the meaning specified therefor in Section 2.12(b)(i).

 

“LIBOR Notice” means a written notice in the form of Exhibit L-1.

 

“LIBOR Option” has the meaning specified therefor in Section 2.12(a).

 

“LIBOR Rate” means the rate per annum rate appearing on Macro*World’s (www.mworld.com; the “Service”) Page BBA LIBOR - USD) (or on any successor or substitute page of such Service, or any successor to or substitute for such Service) 2 Business Days prior to the commencement of the requested Interest Period, for a term and in an amount comparable to the Interest Period and the amount of the LIBOR Rate Loan requested (whether as an initial LIBOR Rate Loan or as a continuation of a LIBOR Rate Loan or as a conversion of a Base Rate Loan to a LIBOR Rate Loan) by Borrower in accordance with this Agreement, which determination shall be conclusive in the absence of manifest error.

 

“LIBOR Rate Loan” means each portion of a Revolving Loan that bears interest at a rate determined by reference to the LIBOR Rate.

 

“LIBOR Rate Margin” means 4.00 percentage points.

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit arrangement, encumbrance, easement, lien (statutory or other), security interest, or other security arrangement and any other preference, priority, or preferential arrangement of any kind or nature whatsoever, including any conditional sale contract or other title retention agreement, the interest of a lessor under a Capital Lease and any synthetic or other financing lease having substantially the same economic effect as any of the foregoing.

 

“Liquidity Requirement” has the meaning specified therefor in Section 7.1.

 

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“Loan” shall mean any Revolving Loan, Swing Loan or Extraordinary Advance made hereunder.

 

“Loan Account” has the meaning specified therefor in Section 2.9.

 

“Loan Documents” means this Agreement, the Reaffirmation Agreement, the Blocked Account Control Agreement, the Resignation and Appointment Agreement, the Assignment Agreement, the Assignment of Patent and Trademark Security Agreement, any Borrowing Base Certificate, the Control Agreements, the Copyright Security Agreement, the Estoppel Agreement, the Fee Letter, the Financial Condition Certificate, the Guaranty and Security Agreement, the Intercompany Subordination Agreement, the Intercreditor Agreement, any Issuer Documents, the Letters of Credit, the Mortgages, the Patent Security Agreement, the Perfection Certificate, the PNC Mortgage Assignments, the Existing Port of Indiana Subordination Agreement, the Trademark Security Agreement, the Pledged Interests Addendum, any note or notes executed by any Borrower in connection with this Agreement and payable to any member of the Lender Group, and any other instrument or agreement entered into, now or in the future, by Parent or any of its Subsidiaries and any member of the Lender Group in connection with this Agreement.

 

“Loan Party” means any Borrower or any Guarantor.

 

“Lock Box Account” that certain Deposit Account Number 4123507238 in the name of AREI.

 

“Margin Stock” as defined in Regulation U of the Board of Governors as in effect from time to time.

 

“Material Adverse Effect” means (a) a material adverse effect in the business, operations, results of operations, assets, liabilities or financial condition of Parent and its Subsidiaries, taken as a whole, (b) a material impairment of Parent’s or its Subsidiaries’ ability to perform their obligations under the Loan Documents to which they are parties or of the Lender Group’s ability to enforce the Obligations or realize upon the Collateral (other than as a result of an action taken or not taken that is solely in the control of Agent), or (c) a material impairment of the enforceability or priority of Agent’s Liens with respect to all or a material portion of the Collateral as a result of an action or failure to act on the part of Parent or its Subsidiaries.

 

“Maturity Date” means the earlier of (a) July 20, 2015, and (b) the date that is six (6) months before the earliest maturity date of the Term Loan Indebtedness under the Term Loan Agreement, or if fully refinanced or fully replaced, the maturity date of the fully refinanced or fully replaced Term Loan Indebtedness.

 

“Maximum Interest” shall mean, for any period of determination, the highest rate of interest permitted to be paid under this Agreement under any law that a court of competent jurisdiction shall, in a final determination, deem applicable.

 

“Maximum Revolver Amount” means $30,000,000, decreased by the amount of reductions in the Commitments made in accordance with Section 2.4(c) or increased in accordance with Section 2.14.

 

“Moody’s” has the meaning specified therefor in the definition of Cash Equivalents.

 

“Mortgages” means, individually and collectively, one or more mortgages, deeds of trust, or deeds to secure debt, executed and delivered by Parent or its Subsidiaries in favor of Agent, in form and substance reasonably satisfactory to Agent, that encumber the Real Property Collateral.

 

“Mt Vernon Facility” means that certain ethanol production facility of Borrowers located in Mount Vernon, Indiana.

 

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“Multiemployer Plan” means any multiemployer plan within the meaning of Section 3(37) of ERISA with respect to which any Loan Party, any of their Subsidiaries, or any of their ERISA Affiliates has an obligation to contribute or otherwise has any liability.

 

“Nebraska” has the meaning specified therefor in the preamble to this Agreement.

 

“Nebraska Mortgage Assignment” means the assignment of deed of trust, security agreement, assignment of rents and leases and fixture filing, dated as of the Original Closing Date, by PNC to Agent with respect to that certain Deed of Trust, Security Agreement, Assignment of Rents and Leases and Fixture Filing, executed by Nebraska in favor of Chicago Title Insurance Company, as Trustee for the benefit of PNC, dated as of March 22, 2011, and recorded on March 29, 2011, in Mortgage Book 267, Page 82, Official Records of Hamilton County, Nebraska.

 

“Net Recovery Percentage” means, as of any date of determination, the percentage of the book value of Borrowers’ Inventory that is estimated to be recoverable in an orderly liquidation of such Inventory net of all associated costs and expenses of such liquidation, such percentage to be determined as to each category of Inventory and to be as specified in the most recent appraisal received by Agent from an appraisal company selected by Agent.

 

“New Equity Holders” means the lenders party to the Original Term Loan Agreement immediately prior to the Closing Date (or any such lender’s designee under the Subscription Agreement), in any case, as identified on Schedule N-1.

 

“New Equity Issuance” means the issuance of new shares of Equity Interests of Parent on the Closing Date pursuant to the Amended and Restated Certificate of Incorporation of Parent, with 50% of such new shares being issued to the Term Loan A Lenders existing as of the Closing Date (or their designees) and 50% of such new shares being issued to all of the Term Loan Lenders (or their designees), as further set forth in the definition of “Equity Transactions”.

 

“Non-Consenting Lender” has the meaning specified therefor in Section 14.2(a).

 

“Non-Defaulting Lender” means each Lender other than a Defaulting Lender.

 

“Obligations” means (a) all loans (including the Revolving Loans (inclusive of Extraordinary Advances and Swing Loans)), debts, principal, interest (including any interest that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), reimbursement or indemnification obligations with respect to Letters of Credit (irrespective of whether contingent), premiums, liabilities (including all amounts charged to the Loan Account pursuant to this Agreement), obligations (including indemnification obligations), fees (including the fees provided for in the Fee Letter), Lender Group Expenses (including any fees or expenses that accrue after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), guaranties, and all covenants and duties of any other kind and description owing by any Loan Party arising out of, under, pursuant to, in connection with, or evidenced by this Agreement or any of the other Loan Documents and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all interest not paid when due and all other expenses or other amounts that any Borrower is required to pay or reimburse by the Loan Documents or by law or otherwise in connection with the Loan Documents and (b) all Bank Product Obligations.  Without limiting the generality of the foregoing, the Obligations of Borrowers under the Loan Documents include the obligation to pay (i) the principal of the Revolving Loans, (ii) interest accrued on the Revolving Loans, (iii) the amount necessary to reimburse Issuing Bank for amounts paid or payable pursuant to Letters of Credit, (iv) Letter of Credit commissions, charges, expenses, and fees, (v) Lender Group Expenses, (vi) fees payable under this Agreement or any of the other

 

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Loan Documents, and (vii) indemnities and other amounts payable by any Loan Party under any Loan Document.  Any reference in this Agreement or in the other Loan Documents to the Obligations shall include all or any portion thereof and any extensions, modifications, renewals, or alterations thereof, both prior and subsequent to any Insolvency Proceeding.

 

“OFAC” means The Office of Foreign Assets Control of the U.S. Department of the Treasury.

 

“Original Closing Date” has the meaning specified therefor in the recitals to this Agreement.

 

“Original Credit Agreement” has the meaning specified therefor in the recitals to this Agreement.

 

“Original Equity Holders” means the beneficial owners of all of Parent’s Equity Interests issued and outstanding immediately prior to the Closing Date.

 

“Original Term Loan Agreement” means the “Original Credit Agreement” as such term is defined in the Term Loan Credit Agreement.

 

“Originating Lender” has the meaning specified therefor in Section 13.1(e).

 

“Overadvance” means, as of any date of determination, that the Revolver Usage is greater than any of the limitations set forth in Section 2.1 or Section 2.11.

 

“Parent” has the meaning specified therefor in the preamble to this Agreement.

 

“Participant” has the meaning specified therefor in Section 13.1(e).

 

“Patent Security Agreement” has the meaning specified therefor in the Guaranty and Security Agreement.

 

“Patriot Act” has the meaning specified therefor in Section 4.17.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any successor agency.

 

“Pekin Plant” means that certain ethanol production plant located at 1300 S. Second Street, Pekin, Illinois, 61554.

 

“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or Section 412 of the Code.

 

“Perfection Certificate” means that certain perfection certificate, dated as of even date with this Agreement, executed by each of Borrowers, in form and substance reasonably satisfactory to Agent.

 

“Permitted Acquisition” means any Acquisition so long as:

 

(a)                                  no Default or Event of Default shall have occurred and be continuing or would result from the consummation of the proposed Acquisition and the proposed Acquisition is consensual,

 

(b)                                 no Indebtedness will be incurred, assumed, or would exist with respect to Parent or its Subsidiaries as a result of such Acquisition, other than Indebtedness permitted under clauses (f) or (g) of the definition of Permitted Indebtedness and no Liens will be incurred, assumed, or would exist with respect to the assets of Parent or its Subsidiaries as a result or such Acquisition other than Permitted Liens,

 

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(c)                                  Borrowers have provided Agent with written confirmation, supported by reasonably detailed calculations, that on a pro forma basis (including pro forma adjustments arising out of events which are directly attributable to such proposed Acquisition, are factually supportable, and are expected to have a continuing impact, in each case, determined as if the combination had been accomplished at the beginning of the relevant period; such eliminations and inclusions determined on a basis consistent with Article 11 of Regulation S-X promulgated under the Securities Act and as interpreted by the staff of the SEC) created by adding the historical combined financial statements of Parent and its Subsidiaries (including the combined financial statements of any other Person or assets that were the subject of a prior Permitted Acquisition during the relevant period) to the historical consolidated financial statements of the Person to be acquired (or the historical financial statements related to the assets to be acquired) pursuant to the proposed Acquisition, Parent and its Subsidiaries (i) would have been in compliance with the financial covenants in Section 7 for the 4 fiscal quarter period ended immediately prior to the proposed date of consummation of such proposed Acquisition, and (ii) are projected to be in compliance with the financial covenants in Section 7 for the 4 fiscal quarter period ended one year after the proposed date of consummation of such proposed Acquisition,

 

(d)                                 Borrowers have provided Agent with their due diligence package relative to the proposed Acquisition, including forecasted balance sheets, profit and loss statements, and cash flow statements of the Person or assets to be acquired, all prepared on a basis consistent with such Person’s (or assets’) historical financial statements, together with appropriate supporting details and a statement of underlying assumptions for the 1 year period following the date of the proposed Acquisition, on a quarter by quarter basis), in form and substance (including as to scope and underlying assumptions) reasonably satisfactory to Agent,

 

(e)                                  Borrowers shall have Availability plus Qualified Cash in an amount equal to or greater than $20,000,000 immediately after giving effect to the consummation of the proposed Acquisition,

 

(f)                                    Borrowers have provided Agent with written notice of the proposed Acquisition at least 15 Business Days prior to the anticipated closing date of the proposed Acquisition and, not later than 5 Business Days prior to the anticipated closing date of the proposed Acquisition, copies of the acquisition agreement and other material documents relative to the proposed Acquisition, which agreement and documents must be reasonably acceptable to Agent,

 

(g)                                 the assets being acquired (other than a de minimis amount of assets in relation to Parent’s and its Subsidiaries’ total assets), or the Person whose Equity Interests are being acquired, are useful in or engaged in, as applicable, the business of Parent and its Subsidiaries or a business reasonably related thereto,

 

(h)                                 the assets being acquired (other than a de minimis amount of assets in relation to the assets being acquired) are located within the United States or the Person whose Equity Interests are being acquired is organized in a jurisdiction located within the United States,

 

(i)                                     the subject assets or Equity Interests, as applicable, are being acquired directly by a Borrower (other than Parent) or one of its Subsidiaries that is a Loan Party, and, in connection therewith, the applicable Borrower or the applicable Loan Party shall have complied with Section 5.11 or 5.12, as applicable, and, in the case of an acquisition of Equity Interests, the applicable Borrower or the applicable Loan Party shall have demonstrated to Agent that the new Loan Parties have received consideration sufficient to make the joinder documents binding and enforceable against such new Loan Parties, and

 

(j)                                     the purchase consideration payable in respect of all Permitted Acquisitions (including the proposed Acquisition and including deferred payment obligations) shall not exceed $10,000,000 in the aggregate; provided, that the purchase consideration payable in respect of any single Acquisition or series of related Acquisitions shall not exceed $2,000,000 in the aggregate.

 

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“Permitted Discretion” means a determination made in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment.

 

“Permitted Dispositions” means:

 

(a) sales, abandonment, or other dispositions of Equipment that is substantially worn, damaged, or obsolete or no longer used or useful in the ordinary course of business and leases or subleases of Real Property not useful in the conduct of the business of Parent and its Subsidiaries,

 

(b) sales of Inventory to buyers in the ordinary course of business,

 

(c) the use or transfer of money or Cash Equivalents in a manner that is not prohibited by the terms of this Agreement or the other Loan Documents,

 

(d) the licensing, on a non-exclusive basis, of patents, trademarks, copyrights, and other intellectual property rights in the ordinary course of business,

 

(e) the granting of Permitted Liens,

 

(f) (i) the sale, without recourse, of Accounts arising in the ordinary course of business, but only in connection with the compromise or collection thereof, and (ii) the discount, without recourse, of Accounts arising in the ordinary course of business,

 

(g) any involuntary loss, damage or destruction of property,

 

(h) any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property,

 

(i) the leasing or subleasing of assets of Parent or its Subsidiaries in the ordinary course of business,

 

(j) the sale or issuance of Equity Interests (other than Disqualified Equity Interests) of Parent,

 

(k)(i) the lapse of registered patents, trademarks, copyrights and other intellectual property of Parent and its Subsidiaries to the extent not economically desirable in the conduct of their business or (ii) the abandonment of patents, trademarks, copyrights, or other intellectual property rights in the ordinary course of business so long as (in each case under clauses (i) and (ii)), (A) with respect to copyrights, such copyrights are not material revenue generating copyrights, and (B) such lapse is not materially adverse to the interests of the Lender Group,

 

(l)  the making of Restricted Payments that are expressly permitted to be made pursuant to this Agreement,

 

(m)  the making of Permitted Investments,

 

(n)  so long as no Event of Default has occurred and is continuing or would immediately result therefrom, transfers of assets (i) from Parent or any of its Subsidiaries to a Borrower (other than Parent), and (ii) from any Subsidiary of Parent that is not a Loan Party to any other Subsidiary of Parent, and

 

(o)  sales or dispositions of assets (other than Accounts, Inventory, or Equity Interests of Subsidiaries of Parent) in the ordinary course of business not otherwise permitted in clauses (a) through (n) above so long as made at fair market value and the aggregate fair market value of all assets disposed of in a fiscal year (including the proposed disposition) would not exceed $5,000,000.

 

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“Permitted Indebtedness” means:

 

(a) Indebtedness evidenced by this Agreement or the other Loan Documents,

 

(b) Indebtedness set forth on Schedule 4.17 and any Refinancing Indebtedness in respect of such Indebtedness,

 

(c) Permitted Purchase Money Indebtedness and any Refinancing Indebtedness in respect of such Indebtedness,

 

(d) endorsement of instruments or other payment items for deposit,

 

(e) Indebtedness consisting of (i) unsecured guarantees incurred in the ordinary course of business with respect to surety and appeal bonds, performance bonds, bid bonds, appeal bonds, completion guarantee and similar obligations; (ii) unsecured guarantees arising with respect to customary indemnification obligations to purchasers in connection with Permitted Dispositions; and (iii) unsecured guarantees with respect to Indebtedness of Parent or one of its Subsidiaries, to the extent that the Person that is obligated under such guaranty could have incurred such underlying Indebtedness,

 

(f) unsecured Indebtedness of Parent or its Subsidiaries that is incurred on the date of the consummation of a Permitted Acquisition solely for the purpose of consummating such Permitted Acquisition so long as (i) no Event of Default has occurred and is continuing or would result therefrom, (ii) such unsecured Indebtedness is not incurred for working capital purposes, (iii) such unsecured Indebtedness does not mature prior to the date that is 12 months after the Maturity Date, (iv) such unsecured Indebtedness does not amortize until 12 months after the Maturity Date, (v) such unsecured Indebtedness does not provide for the payment of interest thereon in cash or Cash Equivalents prior to the date that is 12 months after the Maturity Date, and (vi) such Indebtedness is subordinated in right of payment to the Obligations on terms and conditions reasonably satisfactory to Agent,

 

(g) Acquired Indebtedness in an amount not to exceed $3,000,000 outstanding at any one time,

 

(h) Indebtedness incurred in the ordinary course of business under performance, surety, statutory, or appeal bonds,

 

(i) Indebtedness owed to any Person providing property, casualty, liability, or other insurance to Parent or any of its Subsidiaries, so long as the amount of such Indebtedness is not in excess of the amount of the unpaid cost of, and shall be incurred only to defer the cost of, such insurance for the year in which such Indebtedness is incurred and such Indebtedness is outstanding only during such year,

 

(j) the incurrence by Parent or its Subsidiaries of Indebtedness under Hedge Agreements that are incurred in the ordinary course of business, directly or indirectly, to hedge commodity prices (including both input prices and output prices), currency or interest rate risks, in each case, in amounts reasonably related to Borrowers’ and their respective Subsidiaries’ projected activities and consistent with prudent industry practices,

 

(k) Indebtedness incurred in the ordinary course of business in respect of credit cards, credit card processing services, debit cards, stored value cards, purchase cards (including so-called “procurement cards” or “P-cards”), or Cash Management Services,

 

(l) unsecured Indebtedness of Parent owing to former employees, officers, or directors (or any spouses, ex-spouses, or estates of any of the foregoing) incurred in connection with the repurchase by Parent of the Equity Interests of Parent that has been issued to such Persons, so long as (i) no Default or Event of Default

 

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has occurred and is continuing or would result from the incurrence of such Indebtedness, (ii) the aggregate amount of all such Indebtedness outstanding at any one time does not exceed $5,000,000, and (iii) such Indebtedness is subordinated to the Obligations on terms and conditions reasonably acceptable to Agent,

 

(m) unsecured Indebtedness owing to sellers of assets or Equity Interests to a Loan Party that is incurred by the applicable Loan Party in connection with the consummation of one or more Permitted Acquisitions so long as (i) the aggregate principal amount for all such unsecured Indebtedness does not exceed $5,000,000 at any one time outstanding, (ii) is subordinated to the Obligations on terms and conditions reasonably acceptable to Agent, and (iii) is otherwise on terms and conditions (including all economic terms and the absence of covenants) reasonably acceptable to Agent,

 

(n) contingent liabilities in respect of any indemnification obligation, adjustment of purchase price, non-compete, or similar obligation of Parent or the applicable Loan Party incurred in connection with the consummation of one or more Permitted Acquisitions,

 

(o) Indebtedness composing Permitted Investments,

 

(p)  unsecured Indebtedness incurred in respect of netting services, overdraft protection, and other like services, in each case, incurred in the ordinary course of business,

 

(q)  accrual of interest, accretion or amortization of original issue discount, or the payment of interest in kind, in each case, on Indebtedness that otherwise constitutes Permitted Indebtedness,

 

(r)  the Term Loan Indebtedness so long as the Intercreditor Agreement is in full force and effect,

 

(s)  any Investment in a Person, other than a Borrower, engaged in the business of Parent and its Subsidiaries as of the Closing Date and any other activities that are related ancillary or complementary to such business having an aggregate value (calculated at the lower of cost or market on a basis consistent with such Person’s historical accounting practices) not to exceed 15% of the total consolidated assets of Parent and its Subsidiaries as shown on Borrowers most recent consolidated balance sheet at the time of such Investment (with the value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided, that (i) no Default or Event of Default has occurred and is continuing or would result from such Investment; (ii) such Person shall not use the proceeds of such Investment to purchase, redeem, retire or otherwise acquire for value any shares of stock of Parent; and (iii) Borrowers shall have Excess Availability of at least $20,000,000 immediately prior to and after giving effect to such Investment, and

 

(t)  any other unsecured Indebtedness incurred by Parent or any of its Subsidiaries in an aggregate outstanding amount not to exceed $10,000,000 at any one time.

 

“Permitted Intercompany Advances” means loans made by (a) a Loan Party to another Loan Party, (b) a Subsidiary of Parent that is not a Loan Party to another Subsidiary of Parent that is not a Loan Party, and (c) a Subsidiary of Parent that is not a Loan Party to a Loan Party, so long as the parties thereto are party to the Intercompany Subordination Agreement.

 

“Permitted Investments” means:

 

(a) Investments in cash and Cash Equivalents,

 

(b) Investments in negotiable instruments deposited or to be deposited for collection in the ordinary course of business,

 

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(c) advances made in connection with purchases of goods or services in the ordinary course of business,

 

(d) Investments received in settlement of amounts due to any Loan Party or any of its Subsidiaries effected in the ordinary course of business or owing to any Loan Party or any of its Subsidiaries as a result of Insolvency Proceedings involving an Account Debtor or upon the foreclosure or enforcement of any Lien in favor of a Loan Party or its Subsidiaries,

 

(e) Investments owned by any Loan Party or any of its Subsidiaries on the Closing Date and set forth on Schedule P-1,

 

(f) guarantees permitted under the definition of Permitted Indebtedness,

 

(g) Permitted Intercompany Advances,

 

(h) Equity Interests or other securities acquired in connection with the satisfaction or enforcement of Indebtedness or claims due or owing to a Loan Party or its Subsidiaries (in bankruptcy of customers or suppliers or otherwise outside the ordinary course of business) or as security for any such Indebtedness or claims,

 

(i) deposits of cash made in the ordinary course of business to secure performance of operating leases,

 

(j) (i) non-cash loans and advances to employees, officers, and directors of Parent or any of its Subsidiaries for the purpose of purchasing Equity Interests in Parent so long as the proceeds of such loans are used in their entirety to purchase such Equity Interests in Parent, and (ii) loans and advances to employees and officers of Parent or any of its Subsidiaries in the ordinary course of business for any other business purpose and in an aggregate amount not to exceed $1,000,000 at any one time,

 

(k) Permitted Acquisitions,

 

(l) Investments resulting from entering into (i) Bank Product Agreements, or (ii) agreements relative to Indebtedness that is permitted under clause (j) of the definition of Permitted Indebtedness,

 

(m) equity Investments by any Loan Party in any Subsidiary of such Loan Party which is required by law to maintain a minimum net capital requirement or as may be otherwise required by applicable law,

 

(n) (i) equity Investments by Parent in any other Loan Party, existing as of the Closing Date, (ii) equity Investments by AREI in Nebraska, and (iii) equity Investments by any Loan Party in any other Loan Party so long as such other Loan Party was formed or acquired after the Closing Date in accordance with this Agreement and so long as Borrowers have complied with Sections 5.11 and 5.12 of this Agreement,

 

(o)  Investments held by a Person acquired in a Permitted Acquisition to the extent that such Investments were not made in contemplation of or in connection with such Permitted Acquisition and were in existence on the date of such Permitted Acquisition,

 

(p)  Investments held by a Person acquired as consideration in a Permitted Disposition of Term Loan Primary Collateral (as such term is defined in the Intercreditor Agreement) to the extent such Investments are permitted under the Term Loan Agreement, and

 

(q) so long as no Event of Default has occurred and is continuing or would result therefrom, any other Investments in an aggregate amount not to exceed $1,000,000 during the term of this Agreement.

 

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“Permitted Liens” means

 

(a) Liens granted to, or for the benefit of, Agent to secure the Obligations,

 

(b) Liens for unpaid taxes, assessments, or other governmental charges or levies that either (i) are not yet delinquent, or (ii) do not have priority over Agent’s Liens and the underlying taxes, assessments, or charges or levies are the subject of Permitted Protests,

 

(c) judgment Liens arising solely as a result of the existence of judgments, orders, or awards that do not constitute an Event of Default under Section 8.3,

 

(d) Liens set forth on Schedule P-2; provided, that to qualify as a Permitted Lien, any such Lien described on Schedule P-2 shall only secure the Indebtedness that it secures on the Closing Date and any Refinancing Indebtedness in respect thereof,

 

(e) the interests of lessors under operating leases and non-exclusive licensors under license agreements,

 

(f) purchase money Liens or the interests of lessors under Capital Leases to the extent that such Liens or interests secure Permitted Purchase Money Indebtedness and so long as (i) such Lien attaches only to the asset purchased or acquired and the proceeds thereof, and (ii) such Lien only secures the Indebtedness that was incurred to acquire the asset purchased or acquired or any Refinancing Indebtedness in respect thereof,

 

(g) Liens arising by operation of law in favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course of business and not in connection with the borrowing of money, and which Liens either (i) are for sums not yet delinquent, or (ii) are the subject of Permitted Protests,

 

(h) Liens on amounts deposited to secure Parent’s and its Subsidiaries obligations in connection with worker’s compensation or other unemployment insurance,

 

(i) Liens on amounts deposited to secure Parent’s and its Subsidiaries obligations in connection with the making or entering into of bids, tenders, or leases in the ordinary course of business and not in connection with the borrowing of money,

 

(j) Liens on amounts deposited to secure Parent’s and its Subsidiaries reimbursement obligations with respect to surety or appeal bonds obtained in the ordinary course of business,

 

(k) with respect to any single tract or parcel of, or multiple contiguous tracts or parcels of, Real Property, (i) survey exceptions, easements, ordinances, subdivision approvals, restrictive covenants, and dedications for public use, (ii) reservations of, or rights of others for, licenses and rights-of-way for sewers, electric lines, telegraph and telephone lines, and other similar purposes, (iii) zoning or other restrictions as to the use of such Real Property, and (iv) mineral leases existing as of the date hereof, leases which are disclosed on Schedule R-1 attached hereto, and leases which are in effect as of the date hereof and disclosed in any mortgagee policy of title insurance issued or endorsed to Agent relating to any portion of the Real Property Collateral, that, in each case, were not incurred in connection with Indebtedness and do not in the aggregate have a materially adverse effect on the value of such Real Property or materially impair or negatively affect the current or hereafter contemplated use or operation of such Real Property,

 

(l) non-exclusive licenses of patents, trademarks, copyrights, and other intellectual property rights in the ordinary course of business,

 

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(m) Liens that are replacements of Permitted Liens to the extent that the original Indebtedness is the subject of permitted Refinancing Indebtedness and so long as the replacement Liens only encumber those assets that secured the original Indebtedness,

 

(n) rights of setoff or bankers’ liens upon deposits of funds in favor of (i) banks or other depository institutions, solely to the extent incurred in connection with the maintenance of such Deposit Accounts in the ordinary course of business, and (ii) Jefferies Bache, LLC, solely to the extent incurred in connection with the maintenance of the commodities account referenced on Schedule 4.14 in the ordinary course of business,

 

(o) Liens granted in the ordinary course of business on the unearned portion of insurance premiums securing the financing of insurance premiums to the extent the financing is permitted under the definition of Permitted Indebtedness,

 

(p) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods,

 

(q) Liens solely on any cash earnest money deposits made by Parent or any of its Subsidiaries in connection with any letter of intent or purchase agreement with respect to a Permitted Acquisition,

 

(r) Liens assumed by Parent or its Subsidiaries in connection with a Permitted Acquisition that secure Acquired Indebtedness,

 

(s) (i) (A) prior to the Port Lien Subordination Date, the Lien in favor of the Indiana Port Lessor pursuant to the Indiana Port Lease Agreement on any Port Inventory or any Indiana Port Lease Collateral securing the obligations of the Indiana Port Lessee under the Indiana Port Lease Agreement so long as such Lien is subordinated to Agent’s Lien on any such Port Inventory or any such Indiana Port Lease Collateral pursuant to the Existing Port of Indiana Subordination Agreement, and (B) after the Port Lien Subordination Date, (1) the Lien in favor of the Indiana Port Lessor pursuant to the Indiana Port Lease Agreement on any Port Inventory so long as such Lien is subordinated to Agent’s Lien on any such Port Inventory pursuant to the Port Inventory Documentation and (2) the Lien in favor of the Indiana Port Lessor pursuant to the Indiana Port Lease Agreement on any Indiana Port Lease Collateral securing the obligations of the Indiana Port Lessee under the Indiana Port Lease Agreement so long as such Lien is subordinated to Agent’s Lien on any such Indiana Port Lease Collateral pursuant to the Existing Port of Indiana Subordination Agreement, and (ii) prior to the Port Lien Release Date, the Lien in favor of the Indiana Port Lessor pursuant to the Indiana Port Lease Agreement on any Port A/R so long as such Lien is subordinated to Agent’s Lien on any such Port A/R pursuant to the Existing Port of Indiana Subordination Agreement.

 

(t) leases or subleases granted to others that do not materially interfere with the ordinary course of business of Parent and its Subsidiaries taken as whole so long as the aggregate fair market value of all Collateral subject to such Liens pursuant to this clause (t) does not exceed $500,000 at any one time,

 

(u) Liens securing reimbursement Obligations with respect to letters of credit that encumber documents and other property relating to such letters of credit and the products and proceeds thereof so long as the aggregate amount of obligations secured by Liens incurred pursuant to this clause does not exceed $500,000 at any one time outstanding,

 

(v)  Liens consisting of conditional sale, title retention, consignment or similar arrangements for the sale of goods acquired by Parent or any of its Subsidiaries in the ordinary course of business in accordance with the past practices of Parent and its Subsidiaries prior to the Closing Date so long as the aggregate fair market value of all Collateral subject to such Liens pursuant to this clause does not exceed $500,000 at any one time,

 

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(w)  Liens securing the Term Loan Indebtedness so long as the Intercreditor Agreement is in full force and effect,

 

(x)  Liens in favor of the Term Loan Agent to secure Indebtedness consisting of the Obligations (as such term is defined in the Term Loan Agreement) permitted by clause (r) of the definition of Permitted Indebtedness so long as the Intercreditor Agreement is in full force and effect, and

 

(y)  other Liens which do not secure Indebtedness for borrowed money or letters of credit and as to which the aggregate amount of the obligations secured thereby does not exceed $250,000 at any one time.

 

“Permitted Protest” means the right of Parent or any of its Subsidiaries to protest any Lien (other than any Lien that secures the Obligations), taxes (other than payroll taxes or taxes that are the subject of a United States federal tax lien), or rental payment, provided that (a) a reserve with respect to such obligation is established on Parent’s or its Subsidiaries’ books and records in such amount as is required under GAAP, (b) any such protest is instituted promptly and prosecuted diligently by Parent or its Subsidiary, as applicable, in good faith, and (c) Agent is satisfied that, while any such protest is pending, there will be no impairment of the enforceability, validity, or priority of any of Agent’s Liens.

 

“Permitted Purchase Money Indebtedness” means, as of any date of determination, Indebtedness (other than the Obligations, but including Capitalized Lease Obligations), incurred after the Closing Date and at the time of, or within 20 days after, the acquisition of any fixed assets for the purpose of financing all or any part of the acquisition cost thereof, in an aggregate principal amount outstanding at any one time not in excess of $5,000,000.

 

“Person” means natural persons, corporations, limited liability companies, limited partnerships, general partnerships, limited liability partnerships, joint ventures, trusts, land trusts, business trusts, or other organizations, irrespective of whether they are legal entities, and governments and agencies and political subdivisions thereof.

 

“PIK Interest Amounts” means the interest accruing on the outstanding principal amount of the Term Loan B that is capitalized by being added to such outstanding principal amount in accordance with the Term Loan Agreement.

 

“Plant-Level Financial Statements” means, for each of Borrowers’ ethanol production facilities and for any specified period, statements of income and operations (including appropriate operating metrics) of each such facility for such period and for the portion of Parent’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding period of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail.

 

“Platform” has the meaning specified therefor in Section 17.9(c).

 

“Pledged Interests Addendum” has the meaning specified therefor in the Guaranty and Security Agreement.

 

“PNC” means PNC Bank, National Association, a national association.

 

“PNC Mortgage Assignments” means, collectively, (i) the ARE-AW Mortgage Assignment, (ii) the ARE-C Mortgage Assignment, (iii) the ARE-MT Mortgage Assignment, (iv) the AREI Mortgage Assignment, and (v) the Nebraska Mortgage Assignment.

 

“Port A/R” means proceeds and products of the sale or other disposition of the Port Inventory (including all Accounts and all proceeds and products thereof).

 

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“Port A/R Documentation” shall mean an agreement among the Indiana Port Lessor, the Indiana Port Lessee, Term Loan Agent, and Agent, in form and substance reasonably satisfactory to Agent, whereby (i) the Indiana Port Lessor releases any and all of its Liens in and to the Port A/R, (ii) the Indiana Port Lessor acknowledges and agrees that (A) Agent has a first priority perfected security interest in the Port A/R; and (B) Agent has the right to foreclose and exercise any and all remedies relative to the Port A/R without the consent of or any notice to the Indiana Port Lessor, and (iii) the Indiana Port Lessor acknowledges and agrees that Agent has no obligation to restore the Indiana Port Leased Premises at the Indiana Port Lessor as a result of exercising remedies in respect of the Port A/R.

 

“Port A/R Reserve” means, as of any date of determination, those reserves that Agent deems necessary or appropriate, in its Permitted Discretion, to establish and maintain with respect to the Eligible Accounts or the Maximum Revolver Amount as a result of any Lien that the Indiana Port Lessor may have on the Port A/R or any other rights of the Indiana Port Lessor under the Indiana Port Lease Agreement (it being understood and agreed that, as of any date of determination, Agent shall not establish a reserve with respect to any portion of the Port A/R that, as of such date of determination, is not an Eligible Account as a result of the failure to satisfy clause (q) of the definition of Eligible Accounts).

 

“Port Inventory” means Inventory located at any time (whether in the past, present, or future) on the Indiana Port Leased Premises or at any time used in connection with any of the Loan Parties’ business carried out on the Indiana Port Leased Premises.

 

“Port Inventory Documentation” shall mean an agreement among the Indiana Port Lessor, the Indiana Port Lessee, Term Loan Agent, and Agent, in form and substance reasonably satisfactory to Agent, whereby (i) the Indiana Port Lessor subordinates its Liens in and to the Port Inventory, (ii) the Indiana Port Lessor acknowledges and agrees that (A) Agent has a first priority perfected security interest in the Port Inventory; and (B) Agent has the right to foreclose and exercise any and all remedies relative to the Port Inventory without the consent of or any notice to the Indiana Port Lessor, (iii) the Indiana Port Lessor acknowledges and agrees that Agent has no obligation to restore the Indiana Port Leased Premises at the Indiana Port Lessor as a result of exercising remedies in respect of the Port Inventory; and (iv) the Indiana Port Lessor grants Agent access to the Indiana Port Leased Premises for the purpose of appraising, removing, preparing for sale, and selling or otherwise disposing of (at public auction or private sale) the Inventory.

 

“Port Inventory Reserve” means, as of any date of determination, those reserves that Agent deems necessary or appropriate, in its Permitted Discretion, to establish and maintain with respect to the Eligible Inventory or the Maximum Revolver Amount as a result of any Lien that the Indiana Port Lessor may have on the Port Inventory or any other rights of the Indiana Port Lessor under the Indiana Port Lease Agreement (it being understood and agreed that, as of any date of determination, Agent shall not establish a reserve with respect to any portion of the Port Inventory that, as of such date of determination, is not Eligible Inventory as a result of the failure to satisfy clause (m) of the definition of Eligible Inventory).  For the purposes of this definition, the “value” of Inventory shall be calculated at the lower of cost or market on a first in, first out basis; provided, that with respect to (x) ethanol, (y) Ethanol Byproduct, and (z) corn purchased by Borrowers to be used to prepare first quality finished goods held for sale in the ordinary course of Borrowers’ business, market shall be based on the price of corn, ethanol or Ethanol Byproduct, as applicable, as listed by the Chicago Board of Trade at the close of business on the date prior to the date of delivery of each Borrowing Base Certificate pursuant to Schedule 5.2, adjusted weekly by the local basis.

 

“Port Lien Release Date” has the meaning specified therefor in Section 2.1(d)(ii).

 

“Port Lien Subordination Date” has the meaning specified therefor in Section 2.1(d)(i).

 

“Port of Indiana Estoppel Letter” means a letter agreement from the Indiana Port Lessor to Agent, in form and substance reasonably satisfactory to Agent, in its sole discretion, executed and delivered by the parties thereto.

 

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“Power” has the meaning specified therefor in the preamble to this Agreement.

 

“Post-Increase Lenders” has the meaning specified therefor in Section 2.14(d).

 

“Pre-Increase Lenders” has the meaning specified therefor in Section 2.14(d).

 

“Projections” means Parent’s forecasted (a) balance sheets, (b) profit and loss statements, and (c) cash flow statements, all prepared on a basis consistent with Parent’s historical financial statements, together with appropriate supporting details and a statement of underlying assumptions.

 

“Pro Rata Share” means, as of any date of determination:

 

(a)  with respect to a Lender’s obligation to make all or a portion of the Revolving Loans, with respect to such Lender’s right to receive payments of interest, fees, and principal with respect to the Revolving Loans, and with respect to all other computations and other matters related to the Commitments or the Revolving Loans, the percentage obtained by dividing (i) the Revolving Loan Exposure of such Lender by (ii) the aggregate Revolving Loan Exposure of all Lenders,

 

(b)  with respect to a Lender’s obligation to participate in the Letters of Credit, with respect to such Lender’s obligation to reimburse Issuing Bank, and with respect to such Lender’s right to receive payments of Letter of Credit Fees, and with respect to all other computations and other matters related to the Letters of Credit, the percentage obtained by dividing (i) the Revolving Loan Exposure of such Lender by (ii) the aggregate Revolving Loan Exposure of all Lenders; provided, that if all of the Revolving Loans have been repaid in full and all Commitments have been terminated, but Letters of Credit remain outstanding, Pro Rata Share under this clause shall be determined as if the Commitments had not been terminated and based upon the Commitments as they existed immediately prior to their termination, and

 

(c)  with respect to all other matters and for all other matters as to a particular Lender (including the indemnification obligations arising under Section 15.7), the percentage obtained by dividing (i) the Revolving Loan Exposure of such Lender by (ii) the aggregate Revolving Loan Exposure of all Lenders, in any such case as the applicable percentage may be adjusted by assignments permitted pursuant to Section 13.1; provided, that if all of the Loans have been repaid in full, all Letters of Credit have been made the subject of Letter of Credit Collateralization, and all Commitments have been terminated, Pro Rata Share under this clause shall be determined as if the Revolving Loan Exposures had not been repaid, collateralized, or terminated and shall be based upon the Revolving Loan Exposures as they existed immediately prior to their repayment, collateralization, or termination.

 

“Protective Advances” has the meaning specified therefor in Section 2.3(d)(i).

 

“Public Lender” has the meaning specified therefor in Section 17.9(c).

 

“Purchase Price” means, with respect to any Acquisition, an amount equal to the aggregate consideration, whether cash, property or securities (including the fair market value of any Equity Interests of Parent issued in connection with such Acquisition), paid or delivered by Parent or one of its Subsidiaries in connection with such Acquisition (whether paid at the closing thereof or payable thereafter and whether fixed or contingent), but excluding therefrom (a) any cash of the seller and its Affiliates used to fund any portion of such consideration and (b) any cash or Cash Equivalents acquired in connection with such Acquisition.

 

“Qualified Cash” means, as of any date of determination, the amount of unrestricted cash and Cash Equivalents of Parent and its Subsidiaries that is in Deposit Accounts or in Securities Accounts, or any combination thereof, and which such Deposit Account or Securities Account is the subject of a Control Agreement and is maintained by a branch office of the bank or securities intermediary located within the

 

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United States.  For the avoidance of doubt, any amount of unrestricted cash and Cash Equivalents of Parent and its Subsidiaries that is in Commodity Accounts (including the Jefferies Commodity Accounts) shall be excluded from Qualified Cash.

 

“Qualified Equity Interest” means and refers to any Equity Interests issued by Parent (and not by one or more of its Subsidiaries) that is not a Disqualified Equity Interest.

 

“Reaffirmation Agreement” means that certain Reaffirmation Agreement, dated as of even date with this Agreement, in form and substance reasonably satisfactory to Agent, executed and delivered by each Loan Party to Agent.

 

“Real Property” means any estates or interests in real property now owned or hereafter acquired by Parent or its Subsidiaries and the improvements thereto.

 

“Real Property Collateral” means the Real Property identified on Schedule R-1 and any Real Property hereafter acquired by Parent or its Subsidiaries.

 

“Receivable Reserves” means, as of any date of determination, those reserves that Agent deems necessary or appropriate, in its Permitted Discretion and subject to Section 2.1(c), to establish and maintain (including reserves for rebates, discounts, warranty claims, and returns) with respect to the Eligible Accounts.

 

“Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

 

“Refinancing Indebtedness” means refinancings, renewals, or extensions of Indebtedness so long as:

 

(a) such refinancings, renewals, or extensions do not result in an increase in the principal amount of the Indebtedness so refinanced, renewed, or extended, other than by the amount of premiums paid thereon and the fees and expenses incurred in connection therewith and by the amount of unfunded commitments with respect thereto,

 

(b) such refinancings, renewals, or extensions do not result in a shortening of the average weighted maturity (measured as of the refinancing, renewal, or extension) of the Indebtedness so refinanced, renewed, or extended, nor are they on terms or conditions that, taken as a whole, are or could reasonably be expected to be materially adverse to the interests of the Lenders,

 

(c) if the Indebtedness that is refinanced, renewed, or extended was subordinated in right of payment to the Obligations, then the terms and conditions of the refinancing, renewal, or extension must include subordination terms and conditions that are at least as favorable to the Lender Group as those that were applicable to the refinanced, renewed, or extended Indebtedness, and

 

(d) the Indebtedness that is refinanced, renewed, or extended is not recourse to any Person that is liable on account of the Obligations other than those Persons which were obligated with respect to the Indebtedness that was refinanced, renewed, or extended.

 

“Registration Rights Agreement” means that certain Registration Rights Agreement, dated as of the Closing Date, by and among Parent and each of the other parties identified on the signature pages thereto as “Holders”.

 

“Related Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course and that

 

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is administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender, or (c) an entity or an Affiliate of an entity that administers, advises or manages a Lender.

 

“Release” means any release, spill, leak, discharge, presence of, abandonment, disposal, pumping, pouring, emitting, emptying, injecting, leaching, dumping, depositing, dispersing, allowing to escape or migrate into or otherwise enter the environment (including ambient air, surface water, groundwater, wetlands, land, surface, and subsurface strata or within any building, structure, facility or fixture).

 

“Releasee” has the meaning specified therefor in Section 17.17(a).

 

“Remedial Action” means all actions required to be taken under Environmental Laws to (a) clean up, remove, remediate, contain, treat, monitor, assess, evaluate, or in any way address a Release of Hazardous Materials, (b) restore or reclaim natural resources or the environment, or (c) perform any pre-remedial studies, investigations, or post-remedial operation and maintenance activities.

 

“Replacement Lender” has the meaning specified therefor in Section 2.13(b).

 

“Report” has the meaning specified therefor in Section 15.16.

 

“Required Availability” has the meaning specified therefor in Schedule 3.1.

 

“Required Lenders” means, at any time, Lenders having or holding more than 50% of the sum of the aggregate Revolving Loan Exposure of all Lenders; provided, that (i) the Revolving Loan Exposure of any Defaulting Lender shall be disregarded in the determination of the Required Lenders, and (ii) at any time at any time there are 2 or more Lenders, “Required Lenders” must include at least 2 Lenders (who are not Affiliates of one another).

 

“Reserves” means, as of any date of determination, those reserves (other than Receivable Reserves, Bank Product Reserves, and Inventory Reserves) that Agent deems necessary or appropriate, in its Permitted Discretion and subject to Section 2.1(c), to establish and maintain (including reserves with respect to (a) sums that Parent or its Subsidiaries are required to pay under any Section of this Agreement or any other Loan Document (such as taxes, assessments, insurance premiums, or, in the case of leased assets, rents or other amounts payable under such leases) and has failed to pay, and (b) amounts owing by Parent or its Subsidiaries to any Person to the extent secured by a Lien on, or trust over, any of the Collateral (other than a Permitted Lien), which Lien or trust, in the Permitted Discretion of Agent likely would have a priority superior to the Agent’s Liens (such as Liens or trusts in favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes where given priority under applicable law) in and to such item of the Collateral) with respect to the Borrowing Base.

 

“Resignation and Appointment Agreement” means that certain Resignation and Appointment Agreement, dated as of the Original Closing Date, executed and delivered by PNC, Parent, each of its Subsidiaries, and Agent.

 

“Responsible Officer” means, with respect to any Borrower, the chief executive officer, president, any executive officer, any Financial Officer, or any vice president of such Person or, with respect to financial matters, the Financial Officer of such Person.

 

“Restricted Payment” means to (a) declare or pay any dividend or make any other payment or distribution, directly or indirectly, on account of Equity Interests issued by Parent (including any payment in connection with any merger or consolidation involving Parent) or to the direct or indirect holders of Equity Interests issued by Parent in their capacity as such (other than dividends or distributions payable in Qualified Equity Interests issued by Parent or warrants, options, or other rights to acquire such Qualified Equity Interests), or (b) purchase, redeem, make any sinking fund or similar payment, or otherwise acquire or retire

 

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for value (including in connection with any merger or consolidation involving Parent) any Equity Interests issued by Parent (other than payments, acquisitions or retirements for value effected solely with Qualified Equity Interests issued by Parent or warrants, options, or other rights to acquire such Qualified Equity Interests), (c) make any payment to retire, or to obtain the surrender of, any outstanding warrants, options, or other rights to acquire Equity Interests of Parent now or hereafter outstanding (other than payments effected solely with Qualified Equity Interests issued by Parent or warrants, options, or other rights to acquire such Qualified Equity Interests), and (d) make, or cause or suffer to permit any of Parent’s Subsidiaries to make, any payment or prepayment of principal of, premium, if any, or interest on, or redemption, purchase, retirement, defeasance (including in-substance or legal defeasance), sinking fund or similar payment with respect to, any Subordinated Indebtedness.

 

“Restructuring” has the meaning specified therefor in clause (p) of Schedule 3.1 to this Agreement.

 

“Restructuring Agreement” means that certain Restructuring Agreement, dated as of August 17, 2012, by and among Parent, the other Borrowers, the Term Loan Lenders listed on the signature pages thereto, and certain shareholders of Parent beneficially holding Parent’s issued and outstanding common stock as of the date thereof, as in effect on the Closing Date.

 

“Restructuring Documents” means (a) the Restructuring Agreement, (b) the Equity Documents, and (c) the Term Loan Documents that are entered into or become effective on the Closing Date.

 

“Revolver Usage” means, as of any date of determination, the sum of (a) the amount of outstanding Revolving Loans, plus (b) the amount of the Letter of Credit Usage.

 

“Revolving Loan Exposure” means, with respect to any Lender, as of any date of determination (a) prior to the termination of the Commitments, the amount of such Lender’s Commitment, and (b) after the termination of the Commitments, the aggregate outstanding principal amount of the Revolving Loans of such Lender.

 

“Revolving Loans” has the meaning specified therefor in Section 2.1(a).

 

“Sanctioned Entity” means (a) a country or a government of a country, (b) an agency of the government of a country, (c) an organization directly or indirectly controlled by a country or its government, (d) a Person resident in or determined to be resident in a country, in each case, that is subject to a country sanctions program administered and enforced by OFAC.

 

“Sanctioned Person” means a person named on the list of Specially Designated Nationals maintained by OFAC.

 

“S&P” has the meaning specified therefor in the definition of Cash Equivalents.

 

“SEC” means the United States Securities and Exchange Commission and any successor thereto.

 

“Securities Account” means a securities account (as that term is defined in the Code).

 

“Securities Act” means the Securities Act of 1933, as amended from time to time, and any successor statute.

 

“Settlement” has the meaning specified therefor in Section 2.3(e)(i).

 

“Settlement Date” has the meaning specified therefor in Section 2.3(e)(i).

 

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“Shortfall Amount” has the meaning specified therefor in Section 5.20.

 

“Solvent” means, with respect to any Person as of any date of determination, that (a) at fair valuations, the sum of such Person’s debts (including contingent liabilities) is less than all of such Person’s assets, (b) such Person is not engaged or about to engage in a business or transaction for which the remaining assets of such Person are unreasonably small in relation to the business or transaction or for which the property remaining with such Person is an unreasonably small capital, (c) such Person has not incurred and does not intend to incur, or reasonably believe that it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise), and (d) such Person is “solvent” or not “insolvent”, as applicable within the meaning given those terms and similar terms under applicable laws relating to fraudulent transfers and conveyances.  For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).

 

“Standard Letter of Credit Practice” means, for Issuing Bank, any domestic or foreign law or letter of credit practices applicable in the city in which Issuing Bank issued the applicable Letter of Credit or, for its branch or correspondent, such laws and practices applicable in the city in which it has advised, confirmed or negotiated such Letter of Credit, as the case may be, in each case, (a) which letter of credit practices are of banks that regularly issue letters of credit in the particular city, and (b) which laws or letter of credit practices are required or permitted under ISP or UCP, as chosen in the applicable Letter of Credit.

 

“Stockholders Agreement” means that certain Stockholders Agreement, dated as of the Closing Date, by and among Parent, the New Equity Holders and each of the other parties identified on the signature pages thereto as “Other Stockholders”.

 

“Subordinated Indebtedness” means any unsecured Indebtedness of Parent or its Subsidiaries incurred from time to time that is subordinated in right of payment to the Obligations and that (a) is only guaranteed by the Guarantors, (b) is not subject to scheduled amortization, redemption, sinking fund or similar payment and does not have a final maturity, in each case, on or before the date that is six months after the Maturity Date, (c) does not include any financial covenants or any covenant or agreement that is more restrictive or onerous on any Loan Party in any material respect than any comparable covenant in this Agreement, and (d) contains customary subordination (including customary payment blocks during a payment default under any “senior debt” designated thereunder) and turnover provisions and shall be limited to cross-payment default and cross-acceleration to other “senior debt” designated thereunder.

 

“Subscription Agreement” means that certain Subscription Agreement, dated as of the Closing Date, between Parent and the New Equity Holders.

 

“Subsidiary” of a Person means a corporation, partnership, limited liability company, or other entity in which that Person directly or indirectly owns or controls the Equity Interests having ordinary voting power to elect a majority of the Board of Directors of such corporation, partnership, limited liability company, or other entity.

 

“Swing Lender” means WFCF or any other Lender that, at the request of Borrowers and with the consent of Agent agrees, in such Lender’s sole discretion, to become the Swing Lender under Section 2.3(b).

 

“Swing Loan” has the meaning specified therefor in Section 2.3(b).

 

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“Swing Loan Exposure” means, as of any date of determination with respect to any Lender, such Lender’s Pro Rata Share of the Swing Loans on such date.

 

“Taxes” means any taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein with respect to such payments and all interest, penalties or similar liabilities with respect thereto; provided, that Taxes shall exclude (i) any tax imposed on the net income or net profits of any Lender or any Participant (including any branch profits taxes) and franchise taxes, in each case imposed by the jurisdiction (or by any political subdivision or taxing authority thereof) in which such Lender or such Participant is organized or the jurisdiction (or by any political subdivision or taxing authority thereof) in which such Lender’s or such Participant’s principal office is located in each case as a result of a present or former connection between such Lender or such Participant and the jurisdiction or taxing authority imposing the tax (other than any such connection arising solely from such Lender or such Participant having executed, delivered or performed its obligations or received payment under, or enforced its rights or remedies under this Agreement or any other Loan Document); (ii) taxes resulting from a Lender’s or a Participant’s failure to comply with the requirements of Section 16.2 or 16.3, and (iii) any United States federal withholding taxes that would be imposed on amounts payable to a Foreign Lender based upon the applicable withholding rate in effect at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office), except that Taxes shall include (A) any amount that such Foreign Lender (or its assignor, if any) was previously entitled to receive pursuant to Section 16.1, if any, with respect to such withholding tax at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office), and (B) additional United States federal withholding taxes that may be imposed after the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office), as a result of a change in law, rule, regulation, order or other decision with respect to any of the foregoing by any Governmental Authority.

 

“Tax Lender” has the meaning specified therefor in Section 14.2(a).

 

“Term Loan A” has the meaning specified therefor in the Term Loan Agreement.

 

“Term Loan A Closing Fee” means the “Closing Fee” as such term is defined in the Term Loan Agreement as in effect on the Closing Date.

 

“Term Loan A Exit Fee” means the “Exit Fee” as such term is defined in the Term Loan Agreement as in effect on the Closing Date.

 

“Term Loan A Lender” has the meaning specified therefor in the Term Loan Agreement.

 

“Term Loan Agent” means collectively the “Administrative Agent” and “Collateral Agent” as such terms are defined in the Term Loan Agreement and any Person acting in a similar capacity under any amendment, restatement, supplement, replacement or refinancing thereof.  The Term Loan Agent on the date of this Agreement is Citibank, N.A.

 

“Term Loan Agreement” means that certain Amended and Restated Senior Secured Term Loan Credit Agreement dated as of even date herewith, by and among Parent, as borrower, the Term Loan Lenders, the Term Loan Agent, and the other parties thereto, as such is amended, modified, supplemented, restated, replaced or refinanced from time to time if and to the extent not prohibited pursuant to the Intercreditor Agreement.

 

“Term Loan B” has the meaning specified therefor in the Term Loan Agreement.

 

“Term Loan Documents” means the “Loan Documents” as such term is defined in the Term Loan Agreement and any documents, instruments and agreements entered into in connection with any amendment, supplement, restatement, replacement or refinancing thereof, as amended, modified,

 

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supplemented or restated from time to time if and to the extent not prohibited pursuant to the Intercreditor Agreement.

 

“Term Loan Indebtedness” means the Indebtedness incurred by Borrowers under the Term Loan Documents in an aggregate principal amount not to exceed the result of (a) an amount equal to the sum of (i) $150,000,000, plus (ii) any PIK Interest Amounts, plus (iii) the amount of the Term Loan A Closing Fee which has been capitalized and paid in kind by being added to the principal amount of the Term Loan A on the Closing Date, plus (iv) the amount of the Term Loan A Exit Fee, minus (b) the aggregate amount of all repayments, mandatory prepayments, and optional prepayments of the principal of such Indebtedness (other than in connection with Refinancing Indebtedness), plus (c) 16.67% of the amount resulting from the calculation in clause (a); provided, that any Indebtedness incurred under Secured Hedge Agreements (as defined in the Intercreditor Agreement) may not exceed an aggregate amount equal to $25,000,000.

 

“Term Loan Lenders” means the lenders from time to time party to the Term Loan Agreement.

 

“Termination Event” means (a) a “Reportable Event” described in Section 4043 of ERISA for which the notice requirement has not been waived by the PBGC, (b) the withdrawal of any Loan Party or any ERISA Affiliate from a Pension Plan during a plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA, (c) the termination of a Pension Plan, the filing of a notice of intent to terminate a Pension Plan or the treatment of a Pension Plan amendment as a termination, under Section 4041 of ERISA, if the plan assets are not sufficient to pay all plan liabilities, (d) the institution of proceedings to terminate, or the appointment of a trustee with respect to, any Pension Plan by the PBGC, (e) any other event or condition which would constitute grounds under Section 4042(a) of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan, (f) the imposition of a Lien pursuant to Section 412 or 430 of the IRC or Section 302 or 4068 of ERISA, (g) the partial or complete withdrawal of any Loan Party or any ERISA Affiliate from a Multiemployer Plan (other than any complete withdrawal that would not constitute an Event of Default under Section 8.12), (h) any event or condition which results in the reorganization or insolvency of a Multiemployer Plan under Sections 4241 or 4245 of ERISA, (i) any event or condition which results in the termination of a Multiemployer Plan under Section 4041A of ERISA or the institution by the PBGC of proceedings to terminate or to appoint a trustee to administer a Multiemployer Plan under Section 4042 of ERISA, (j) any Pension Plan being in “at risk status” within the meaning of IRC Section 430(i), (k) any Multiemployer Plan being in “endangered status” or “critical status” within the meaning of IRC Section 432(b), (l) with respect to any Pension Plan, any Loan Party or any ERISA Affiliate incurring a substantial cessation of operations within the meaning of ERISA Section 4062(e); or (m) any event that causes any Loan Party or any of their ERISA Affiliates to incur liability under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of the IRC.

 

“Trademark Security Agreement” has the meaning specified therefor in the Guaranty and Security Agreement.

 

“UCP” means, with respect to any Letter of Credit, the Uniform Customs and Practice for Documentary Credits 2007 Revision, International Chamber of Commerce Publication No. 600 and any subsequent revision thereof adopted by the International Chamber of Commerce on the date such Letter of Credit is issued.

 

“United States” means the United States of America.

 

“Unused Line Fee” has the meaning specified therefor in Section 2.10(b).

 

“Voidable Transfer” has the meaning specified therefor in Section 17.8.

 

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“Voting Stock” means, with respect to any Person, Equity Interests of any class or kind ordinarily having the power to vote for the election of directors, managers or other voting members of the governing body of such Person.

 

“Warrant Agreement” means that certain Warrant Agreement, dated as of the Closing Date, between Parent and American Stock Transfer & Trust Company, LLC, as warrant agent.

 

“Warrants” means the five-year warrants, issued by Parent to the Original Equity Holders pursuant to the Warrant Agreement, to purchase 787,855 shares of Parent’s Equity Interests at an exercise price of $61.75 per share.

 

“Wells Fargo” means Wells Fargo Bank, National Association, a national banking association.

 

“WFCF” means Wells Fargo Capital Finance, LLC, a Delaware limited liability company.

 

1.2           Accounting Terms.  All accounting terms not specifically defined herein shall be construed in accordance with GAAP; provided, that if Administrative Borrower notifies Agent that Borrowers request an amendment to any provision hereof to eliminate the effect of any Accounting Change occurring after the Closing Date or in the application thereof on the operation of such provision (or if Agent notifies Administrative Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such Accounting Change or in the application thereof, then Agent and Borrowers agree that they will negotiate in good faith amendments to the provisions of this Agreement that are directly affected by such Accounting Change with the intent of having the respective positions of the Lenders and Borrowers after such Accounting Change conform as nearly as possible to their respective positions as of the later of (i) the date of this Agreement or (ii) the date of the most recent amendment to any provision hereof to eliminate the effect of any Accounting Change or in the application thereof on the operation of such provision and, until any such amendments have been agreed upon and agreed to by the Required Lenders, the provisions in this Agreement shall be calculated as if no such Accounting Change had occurred.  When used herein, the term “financial statements” shall include the notes and schedules thereto.  Whenever the term “Parent” is used in respect of a financial covenant or a related definition, it shall be understood to mean Parent and its Subsidiaries on a consolidated basis, unless the context clearly requires otherwise.  Notwithstanding anything to the contrary contained herein, (a) all financial statements delivered hereunder shall be prepared, and all financial covenants contained herein shall be calculated, without giving effect to any election under the Statement of Financial Accounting Standards No. 159  (or any similar accounting principle) permitting a Person to value its financial liabilities or Indebtedness at the fair value thereof, and (b) the term “unqualified opinion” as used herein to refer to opinions or reports provided by accountants shall mean an opinion or report that is (i) unqualified, and (ii) does not include any explanation, supplemental comment, or other comment concerning the ability of the applicable Person to continue as a going concern or concerning the scope of the audit.

 

1.3           Code.  Any terms used in this Agreement that are defined in the Code shall be construed and defined as set forth in the Code unless otherwise defined herein; provided, that to the extent that the Code is used to define any term herein and such term is defined differently in different Articles of the Code, the definition of such term contained in Article 9 of the Code shall govern.

 

1.4           Construction.  Unless the context of this Agreement or any other Loan Document clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “includes” and “including” are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”.  The words “hereof”, “herein”, “hereby”, “hereunder”, and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Loan Document, as the case may be.  Section, subsection, clause, schedule, and exhibit references

 

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herein are to this Agreement unless otherwise specified.  Any reference in this Agreement or in any other Loan Document to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein).  The words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties.  Any reference herein or in any other Loan Document to the satisfaction, repayment, or payment in full of the Obligations shall mean (a) the payment or repayment in full in immediately available funds of (i) the principal amount of, and interest accrued with respect to, all outstanding Loans, together with the payment of any premium applicable to the repayment of the Loans, (ii) all Lender Group Expenses that have accrued regardless of whether demand has been made therefor, (iii) all fees or charges that have accrued hereunder or under any other Loan Document (including the Letter of Credit Fee and the Unused Line Fee), (b) in the case of contingent reimbursement obligations with respect to Letters of Credit, providing Letter of Credit Collateralization, (c) in the case of obligations with respect to Bank Products (other than Hedge Obligations), providing Bank Product Collateralization, (d) the receipt by Agent of cash collateral in order to secure any other contingent Obligations for which a claim or demand for payment has been made on or prior to such time or in respect of matters or circumstances known to Agent or a Lender at such time that are reasonably expected to result in any loss, cost, damage or expense (including attorneys’ fees and legal expenses), such cash collateral to be in such amount as Agent reasonably determines is appropriate to secure such contingent Obligations, (e) the payment or repayment in full in immediately available funds of all other Obligations (including the payment of any termination amount then applicable (or which would or could become applicable as a result of the repayment of the other Obligations) under Hedge Agreements provided by Hedge Providers) other than (i) unasserted contingent indemnification Obligations, (ii) any Bank Product Obligations (other than Hedge Obligations) that, at such time, are allowed by the applicable Bank Product Provider to remain outstanding without being required to be repaid or cash collateralized, and (iii) any Hedge Obligations that, at such time, are allowed by the applicable Hedge Provider to remain outstanding without being required to be repaid, and (f) the termination of all of the Commitments of the Lenders.  Any reference herein to any Person shall be construed to include such Person’s successors and assigns.  Any requirement of a writing contained herein or in any other Loan Document shall be satisfied by the transmission of a Record.

 

1.5           Time References.  Unless the context of this Agreement or any other Loan Document clearly requires otherwise, all references to time of day refer to Pacific Standard Time or Pacific Daylight Saving Time, as in effect in Los Angeles, California on such day.  For purposes of the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each means “to and including”; provided, that with respect to a computation of fees or interest payable to Agent or any Lender, such period shall in any event consist of at least one full day.

 

1.6           Schedules and Exhibits.  All of the schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference.

 

2.             LOANS AND TERMS OF PAYMENT.

 

2.1           Revolving Loans.

 

(a)           Subject to the terms and conditions of this Agreement, and during the term of this Agreement, each Lender agrees (severally, not jointly or jointly and severally) to make revolving loans (“Revolving Loans”) to Borrowers in an amount at any one time outstanding not to exceed the lesser of::

 

(i)         such Lender’s Commitment, or

 

(ii)        such Lender’s Pro Rata Share of any amount equal to the lesser of:

 

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(A)          the amount equal to (1) the Maximum Revolver Amount at such time less (2) the sum of (x) the Letter of Credit Usage at such time, plus (y) the principal amount of Swing Loans outstanding at such time, and

 

(B)           the amount equal to (1) the Borrowing Base at such time less (2) the sum of (y) the Letter of Credit Usage at such time, plus (z) the principal amount of Swing Loans outstanding at such time.

 

(b)           Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to the terms and conditions of this Agreement, reborrowed at any time during the term of this Agreement.  The outstanding principal amount of the Revolving Loans, together with interest accrued and unpaid thereon, shall constitute Obligations and shall be due and payable on the Maturity Date or, if earlier, on the date on which they are declared due and payable pursuant to the terms of this Agreement.

 

(c)           Anything to the contrary in this Section 2.1 notwithstanding, Agent shall have the right (but not the obligation), in the exercise of its Permitted Discretion, to establish and increase or decrease Receivable Reserves, Inventory Reserves, Bank Product Reserves, and other Reserves.  The amount of any Receivable Reserve, Inventory Reserve, Bank Product Reserve, or other Reserve established by Agent shall have a reasonable relationship to the event, condition, other circumstance, or fact that is the basis for such reserve.  Upon establishment or increase in reserves, Agent agrees to make itself available to discuss the reserve or increase, and Borrowers may take such action as may be required so that the event, condition, circumstance, or fact that is the basis for such reserve or increase no longer exists, in a manner and to the extent reasonably satisfactory to Agent in the exercise of its Permitted Discretion.  In no event shall such opportunity limit the right of Agent to maintain, establish, or change such Receivable Reserve, Inventory Reserve, Bank Product Reserve, or other Reserves, unless Agent shall have determined, in its Permitted Discretion, that the event, condition, other circumstance, or fact that was the basis for such Receivable Reserve, Inventory Reserve, Bank Product Reserve, or other Reserves or such change no longer exists or has otherwise been adequately addressed by Borrowers.

 

(d)           Anything to the contrary in this Section 2.1 notwithstanding, Agent shall have the right (but not the obligation), in its sole discretion, to establish (i) a Port Inventory Reserve; provided, that upon Agent’s receipt of the Port Inventory Documentation, in form and substance reasonably satisfactory to Agent, in Agent’s sole discretion, the amount of the Port Inventory Reserve shall be reduced to $0 (the date of such reduction, the “Port Lien Subordination Date”), and (ii) a Port A/R Reserve; provided, that upon Agent’s receipt of the Port A/R Documentation, in form and substance reasonably satisfactory to Agent, in Agent’s sole discretion, the amount of the Port A/R Reserve shall be reduced to $0 (the date of such reduction, the “Port Lien Release Date”).

 

2.2           Permanent Waiver.  The Lenders and Agent agree that all of the Prospective Defaults (as such term is defined in the Forbearance Agreement) existing immediately prior to the Closing Date under the Original Credit Agreement are permanently waived effective as of the Closing Date.  Agent and the Lenders agree that, upon satisfaction of the conditions precedent to the effectiveness of this Agreement, $1,623,821.62 of the funds on deposit in the Blocked Account as of the Closing Date will be released and transferred to the Designated Account.

 

2.3           Borrowing Procedures and Settlements.

 

(a)           Procedure for Borrowing Revolving Loans.  Each Borrowing shall be made by a written request by an Authorized Person delivered to Agent and received by Agent no later than 10:00 a.m. on the Business Day that is the requested Funding Date specifying (i) the amount of such Borrowing, and (ii) the requested Funding Date (which shall be a Business Day); provided, that Agent may, in its sole discretion, elect to accept as timely requests that are received later than 10:00 a.m. on the Business Day that is the requested Funding Date.  At Agent’s election, in lieu of delivering the above-described written request, any Authorized Person may give Agent telephonic notice of such request by the required time.  In such circumstances,

 

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Borrowers agree that any such telephonic notice will be confirmed in writing within 24 hours of the giving of such telephonic notice, but the failure to provide such written confirmation shall not affect the validity of the request.

 

(b)           Making of Swing Loans.  In the case of a request for a Revolving Loan and so long as either (i) the aggregate amount of Swing Loans made since the last Settlement Date, minus all payments or other amounts applied to Swing Loans since the last Settlement Date, plus the amount of the requested Swing Loan does not exceed $5,000,000, or (ii) Swing Lender, in its sole discretion, agrees to make a Swing Loan notwithstanding the foregoing limitation, Swing Lender shall make a Revolving Loan (any such Revolving Loan made by Swing Lender pursuant to this Section 2.3(b) being referred to as a “Swing Loan” and all such Revolving Loans being referred to as “Swing Loans”) available to Borrowers on the Funding Date applicable thereto by transferring immediately available funds in the amount of such requested Borrowing to the Designated Account.  Each Swing Loan shall be deemed to be a Revolving Loan hereunder and shall be subject to all the terms and conditions (including Section 3) applicable to other Revolving Loans, except that all payments (including interest) on any Swing Loan shall be payable to Swing Lender solely for its own account.  Subject to the provisions of Section 2.3(d)(ii), Swing Lender shall not make and shall not be obligated to make any Swing Loan if Swing Lender has actual knowledge that (i) one or more of the applicable conditions precedent set forth in Section 3 will not be satisfied on the requested Funding Date for the applicable Borrowing, or (ii) the requested Borrowing would exceed the Availability on such Funding Date.  Swing Lender shall not otherwise be required to determine whether the applicable conditions precedent set forth in Section 3 have been satisfied on the Funding Date applicable thereto prior to making any Swing Loan.  The Swing Loans shall be secured by Agent’s Liens, constitute Revolving Loans and Obligations, and bear interest at the rate applicable from time to time to Revolving Loans that are Base Rate Loans.

 

(c)           Making of Revolving Loans.

 

(i)         In the event that Swing Lender is not obligated to make a Swing Loan, then after receipt of a request for a Borrowing pursuant to Section 2.3(a), Agent shall notify the Lenders by telecopy, telephone, email, or other similar form of transmission, of the requested Borrowing; such notification shall be sent (A) if the request by Borrowers is received by Agent no later than 10:00 a.m. on the Business Day that is the requested Funding Date, not later than 12:00 p.m. (or such later time as Agent may elect in its sole discretion (but subject to clauses (Y) and (Z) below)) on the Business Day that is the Funding Date applicable thereto, and (B) if the request by Borrowers is received by Agent after 10:00 a.m. on the Business Day that is the requested Funding Date and if Agent elects to accept such request as timely (as contemplated by Section 2.3(a)), promptly after the receipt of such request by Agent, but in no event later than 10:00 a.m. (or such later time as Agent may elect in its sole discretion (but subject to clauses (Y) and (Z) below)) on the Business Day that is the first Business Day after the requested Funding Date applicable thereto.  If (Y) Agent has notified the Lenders of a requested Borrowing not later than 12:00 p.m. on the Business Day that is the Funding Date applicable thereto, then each Lender shall make the amount of such Lender’s Pro Rata Share of the requested Borrowing available to Agent in immediately available funds, to Agent’s Account, not later than 1:30 p.m. on the Funding Date applicable thereto, and (Z) if Agent has notified the Lenders of a requested Borrowing later than 12:00 p.m. on the Business Day that is the requested Funding Date applicable thereto, then each Lender shall make the amount of such Lender’s Pro Rata Share of the requested Borrowing available to Agent in immediately available funds, to Agent’s Account, as promptly as practicable, but in any event not later than 10:00 a.m. on the Business Day that is the first Business Day after the requested Funding Date applicable thereto.  After Agent’s receipt of the proceeds of such Revolving Loans from the Lenders, Agent shall make the proceeds thereof available to Borrowers on the applicable Funding Date (or the Business Day following the requested Funding Date, as applicable) by transferring immediately available funds equal to such proceeds received by Agent to the Designated Account; provided, that, subject to the provisions of Section 2.3(d)(ii), no Lender shall have an obligation to make any Revolving Loan, if (1) one or more of the applicable conditions precedent set forth in Section 3 will not be satisfied on the requested Funding Date for the applicable Borrowing unless such condition has been waived, or (2) the requested Borrowing would exceed the Availability on such Funding Date.

 

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(ii)        Unless Agent receives notice from a Lender prior to (A) 1:00 p.m. on the Business Day that is the requested Funding Date relative to a requested Borrowing as to which Agent has notified the Lenders of a requested Borrowing not later than 12:00 p.m. on the Business Day that is the Funding Date applicable thereto, or (B) 9:30 a.m. on the Business Day that is the first Business Day after the requested Funding Date relative to a requested Borrowing as to which Agent has notified the Lenders of a requested Borrowing after 12:00 p.m. on the Business Day that is the Funding Date applicable thereto if Agent has notified the Lenders of a requested Borrowing later than 12:00 p.m. on the Business Day that is the requested Funding Date applicable thereto, that such Lender will not make available as and when required hereunder to Agent for the account of Borrowers the amount of that Lender’s Pro Rata Share of the Borrowing, Agent may assume that each Lender has made or will make such amount available to Agent in immediately available funds on the Funding Date and Agent may (but shall not be so required), in reliance upon such assumption, make available to Borrowers on or prior to such date a corresponding amount.  If, on the requested Funding Date, any Lender shall not have remitted the full amount that it is required to make available to Agent in immediately available funds (irrespective of whether its obligation is to remit the funds on the next Business Day) and if Agent has made available to Borrowers such amount on the requested Funding Date, then such Lender shall make the amount of such Lender’s Pro Rata Share of the requested Borrowing available to Agent in immediately available funds, to Agent’s Account, no later than 10:00 a.m. on the Business Day that is the first Business Day after the requested Funding Date applicable thereto (in which case, the interest accrued on such Lender’s portion of such Borrowing for the Funding Date shall be for Agent’s separate account).  If any Lender shall not remit the full amount that it is required to make available to Agent in immediately available funds as and when required hereby and if Agent has made available to Borrowers such amount, then that Lender shall be obligated to immediately remit such amount to Agent, together with interest at the Defaulting Lender Rate for each day until the date on which such amount is so remitted.  A notice submitted by Agent to any Lender with respect to amounts owing under this Section 2.3(c)(ii) shall be conclusive, absent manifest error.  If the amount that a Lender is required to remit is made available to Agent, then such payment to Agent shall constitute such Lender’s Revolving Loan for all purposes of this Agreement.  If such amount is not made available to Agent on the Business Day following the Funding Date, Agent will notify Administrative Borrower of such failure to fund and, upon demand by Agent, Borrowers shall pay such amount to Agent for Agent’s account, together with interest thereon for each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate applicable at the time to the Revolving Loans composing such Borrowing.

 

(d)           Protective Advances and Optional Overadvances.

 

(i)         Any contrary provision of this Agreement or any other Loan Document notwithstanding, at any time, (A) after the occurrence and during the continuance of a Default or an Event of Default, or (B) that any of the other applicable conditions precedent set forth in Section 3 are not satisfied, Agent hereby is authorized by Borrowers and the Lenders, from time to time in Agent’s sole discretion, to make Revolving Loans to, or for the benefit of, Borrowers on behalf of the Lenders that Agent, in its Permitted Discretion deems necessary or desirable (1) to preserve or protect the Collateral, or any portion thereof, or (2) to enhance the likelihood of repayment of the Obligations (other than the Bank Product Obligations) (the Revolving Loans described in this Section 2.3(d)(i) shall be referred to as “Protective Advances”).

 

(ii)        Any contrary provision of this Agreement or any other Loan Document notwithstanding, the Lenders hereby authorize Agent or Swing Lender, as applicable, and either Agent or Swing Lender, as applicable, may, but is not obligated to, knowingly and intentionally, continue to make Revolving Loans (including Swing Loans) to Borrowers notwithstanding that an Overadvance exists or would be created thereby, so long as (A) after giving effect to such Revolving Loans, the outstanding Revolver Usage does not exceed the Borrowing Base by more than $3,000,000, and (B) after giving effect to such Revolving Loans, the outstanding Revolver Usage (except for and excluding amounts charged to the Loan Account for interest, fees, or Lender Group Expenses) does not exceed the Maximum Revolver Amount.  In the event Agent obtains actual knowledge that the Revolver Usage exceeds the amounts permitted by the immediately foregoing provisions, regardless of the amount of, or reason for, such excess, Agent shall notify the Lenders as soon as practicable (and prior to making any (or any additional) intentional Overadvances (except for and

 

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excluding amounts charged to the Loan Account for interest, fees, or Lender Group Expenses) unless Agent determines that prior notice would result in imminent harm to the Collateral or its value, in which case Agent may make such Overadvances and provide notice as promptly as practicable thereafter), and the Lenders thereupon shall, together with Agent, jointly determine the terms of arrangements that shall be implemented with Borrowers intended to reduce, within a reasonable time, the outstanding principal amount of the Revolving Loans to Borrowers to an amount permitted by the preceding sentence.  In such circumstances, if any Lender objects to the proposed terms of reduction or repayment of any Overadvance, the terms of reduction or repayment thereof shall be implemented according to the determination of the Required Lenders.  The foregoing provisions are meant for the benefit of the Lenders and Agent and are not meant for the benefit of Borrowers, which shall continue to be bound by the provisions of Section 2.4(e)(1).  Each Lender shall be obligated to settle with Agent as provided in Section 2.3(e) (or Section 2.3(g), as applicable) for the amount of such Lender’s Pro Rata Share of any unintentional Overadvances by Agent reported to such Lender, any intentional Overadvances made as permitted under this Section 2.3(d)(ii), and any Overadvances resulting from the charging to the Loan Account of interest, fees, or Lender Group Expenses.

 

(iii)       Each Protective Advance and each Overadvance (each an “Extraordinary Advance”) shall be deemed to be a Revolving Loan hereunder, except that no Extraordinary Advance shall be eligible to be a LIBOR Rate Loan and, prior to Settlement therefor, all payments on the Extraordinary Advances shall be payable to Agent solely for its own account.  The Extraordinary Advances shall be repayable on demand, secured by Agent’s Liens, constitute Obligations hereunder, and bear interest at the rate applicable from time to time to Revolving Loans that are Base Rate Loans.  The provisions of this Section 2.3(d) are for the exclusive benefit of Agent, Swing Lender, and the Lenders and are not intended to benefit any Borrower (or any other Loan Party) in any way.

 

(e)           Settlement.  It is agreed that each Lender’s funded portion of the Revolving Loans is intended by the Lenders to equal, at all times, such Lender’s Pro Rata Share of the outstanding Revolving Loans.  Such agreement notwithstanding, Agent, Swing Lender, and the other Lenders agree (which agreement shall not be for the benefit of any Borrower) that in order to facilitate the administration of this Agreement and the other Loan Documents, settlement among the Lenders as to the Revolving Loans, the Swing Loans, and the Extraordinary Advances shall take place on a periodic basis in accordance with the following provisions:

 

(i)         Agent shall request settlement (“Settlement”) with the Lenders on a weekly basis, or on a more frequent basis if so determined by Agent (1) on behalf of Swing Lender, with respect to the outstanding Swing Loans, (2) for itself, with respect to the outstanding Extraordinary Advances, and (3) with respect to Borrowers’ or their Subsidiaries’ payments or other amounts received, as to each by notifying the Lenders by telecopy, telephone, or other similar form of transmission, of such requested Settlement, no later than 2:00 p.m. on the Business Day immediately prior to the date of such requested Settlement (the date of such requested Settlement being the “Settlement Date”).  Such notice of a Settlement Date shall include a summary statement of the amount of outstanding Revolving Loans, Swing Loans, and Extraordinary Advances for the period since the prior Settlement Date.  Subject to the terms and conditions contained herein (including Section 2.3(g)):  (y) if the amount of the Revolving Loans (including Swing Loans and Extraordinary Advances) made by a Lender that is not a Defaulting Lender exceeds such Lender’s Pro Rata Share of the Revolving Loans (including Swing Loans and Extraordinary Advances) as of a Settlement Date, then Agent shall, by no later than 12:00 p.m. on the Settlement Date, transfer in immediately available funds to a Deposit Account of such Lender (as such Lender may designate), an amount such that each such Lender shall, upon receipt of such amount, have as of the Settlement Date, its Pro Rata Share of the Revolving Loans (including Swing Loans and Extraordinary Advances), and (z) if the amount of the Revolving Loans (including Swing Loans and Extraordinary Advances) made by a Lender is less than such Lender’s Pro Rata Share of the Revolving Loans (including Swing Loans and Extraordinary Advances) as of a Settlement Date, such Lender shall no later than 12:00 p.m. on the Settlement Date transfer in immediately available funds to Agent’s Account, an amount such that each such Lender shall, upon transfer of such amount, have as of the Settlement Date, its Pro Rata Share of the Revolving Loans (including Swing Loans and Extraordinary Advances).  Such amounts made available to Agent under clause (z) of the immediately preceding sentence shall be applied

 

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against the amounts of the applicable Swing Loans or Extraordinary Advances and, together with the portion of such Swing Loans or Extraordinary Advances representing Swing Lender’s Pro Rata Share thereof, shall constitute Revolving Loans of such Lenders.  If any such amount is not made available to Agent by any Lender on the Settlement Date applicable thereto to the extent required by the terms hereof, Agent shall be entitled to recover for its account such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate.

 

(ii)        In determining whether a Lender’s balance of the Revolving Loans, Swing Loans, and Extraordinary Advances is less than, equal to, or greater than such Lender’s Pro Rata Share of the Revolving Loans, Swing Loans, and Extraordinary Advances as of a Settlement Date, Agent shall, as part of the relevant Settlement, apply to such balance the portion of payments actually received in good funds by Agent with respect to principal, interest, fees payable by Borrowers and allocable to the Lenders hereunder, and proceeds of Collateral.

 

(iii)       Between Settlement Dates, Agent, to the extent Extraordinary Advances or Swing Loans are outstanding, may pay over to Agent or Swing Lender, as applicable, any payments or other amounts received by Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the Revolving Loans, for application to the Extraordinary Advances or Swing Loans.  Between Settlement Dates, Agent, to the extent no Extraordinary Advances or Swing Loans are outstanding, may pay over to Swing Lender any payments or other amounts received by Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the Revolving Loans, for application to Swing Lender’s Pro Rata Share of the Revolving Loans.  If, as of any Settlement Date, payments or other amounts of Parent or its Subsidiaries received since the then immediately preceding Settlement Date have been applied to Swing Lender’s Pro Rata Share of the Revolving Loans other than to Swing Loans, as provided for in the previous sentence, Swing Lender shall pay to Agent for the accounts of the Lenders, and Agent shall pay to the Lenders (other than a Defaulting Lender if Agent has implemented the provisions of Section 2.3(g)), to be applied to the outstanding Revolving Loans of such Lenders, an amount such that each such Lender shall, upon receipt of such amount, have, as of such Settlement Date, its Pro Rata Share of the Revolving Loans.  During the period between Settlement Dates, Swing Lender with respect to Swing Loans, Agent with respect to Extraordinary Advances, and each Lender with respect to the Revolving Loans other than Swing Loans and Extraordinary Advances, shall be entitled to interest at the applicable rate or rates payable under this Agreement on the daily amount of funds employed by Swing Lender, Agent, or the Lenders, as applicable.

 

(iv)       Anything in this Section 2.3(e) to the contrary notwithstanding, in the event that a Lender is a Defaulting Lender, Agent shall be entitled to refrain from remitting settlement amounts to the Defaulting Lender and, instead, shall be entitled to elect to implement the provisions set forth in Section 2.3(g).

 

(f)            Notation.  Agent, as a non-fiduciary agent for Borrowers, shall maintain a register showing the principal amount of the Revolving Loans, owing to each Lender, including the Swing Loans owing to Swing Lender, and Extraordinary Advances owing to Agent, and the interests therein of each Lender, from time to time and such register shall, absent manifest error, conclusively be presumed to be correct and accurate.

 

(g)           Defaulting Lenders.

 

(i)         Agent shall not be obligated to transfer to a Defaulting Lender any payments made by any Borrower to Agent for the Defaulting Lender’s benefit or any proceeds of Collateral that would otherwise be remitted hereunder to the Defaulting Lender, and, in the absence of such transfer to the Defaulting Lender, Agent shall transfer any such payments (A) first, to Swing Lender to the extent of any Swing Loans that were made by Swing Lender and that were required to be, but were not, paid by the Defaulting Lender, (B) second, to Issuing Bank, to the extent of the portion of a Letter of Credit Disbursement that was required to be, but was not, paid by the Defaulting Lender, (C) third, to each Non-Defaulting Lender ratably in accordance with its Commitment (but, in each case, only to the extent that such Defaulting Lender’s

 

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portion of a Revolving Loan (or other funding obligation) was funded by such other Non-Defaulting Lender), (D) to a suspense account maintained by Agent, the proceeds of which shall be retained by Agent and may be made available to be re-advanced to or for the benefit of Borrowers (upon the request of Borrowers and subject to the conditions set forth in Section 3.2) as if such Defaulting Lender had made its portion of Revolving Loans (or other funding obligations) hereunder, and (E) from and after the date on which all other Obligations have been paid in full, to such Defaulting Lender in accordance with tier (L) of Section 2.4(b)(ii).  Subject to the foregoing, Agent may hold and, in its discretion, re-lend to Borrowers for the account of such Defaulting Lender the amount of all such payments received and retained by Agent for the account of such Defaulting Lender.  Solely for the purposes of voting or consenting to matters with respect to the Loan Documents (including the calculation of Pro Rata Share in connection therewith) and for the purpose of calculating the fee payable under Section 2.10(b), such Defaulting Lender shall be deemed not to be a “Lender” and such Lender’s Commitment shall be deemed to be zero; provided, that the foregoing shall not apply to any of the matters governed by Section 14.1(a)(i) through (iii).  The provisions of this Section 2.3(g) shall remain effective with respect to such Defaulting Lender until the earlier of (y) the date on which all of the Non-Defaulting Lenders, Agent, Issuing Bank, and Borrowers shall have waived, in writing, the application of this Section 2.3(g) to such Defaulting Lender, or (z) the date on which such Defaulting Lender makes payment of all amounts that it was obligated to fund hereunder, pays to Agent all amounts owing by Defaulting Lender in respect of the amounts that it was obligated to fund hereunder, and, if requested by Agent, provides adequate assurance of its ability to perform its future obligations hereunder (on which earlier date, so long as no Event of Default has occurred and is continuing, any remaining cash collateral held by Agent pursuant to Section 2.3(g)(ii) shall be released to Borrowers).  The operation of this Section 2.3(g) shall not be construed to increase or otherwise affect the Commitment of any Lender, to relieve or excuse the performance by such Defaulting Lender or any other Lender of its duties and obligations hereunder, or to relieve or excuse the performance by Borrowers of their duties and obligations hereunder to Agent, Issuing Bank, or to the Lenders other than such Defaulting Lender.  Any failure by a Defaulting Lender to fund amounts that it was obligated to fund hereunder shall constitute a material breach by such Defaulting Lender of this Agreement and shall entitle Borrowers, at their option, upon written notice to Agent, to arrange for a substitute Lender to assume the Commitment of such Defaulting Lender, such substitute Lender to be reasonably acceptable to Agent.  In connection with the arrangement of such a substitute Lender, the Defaulting Lender shall have no right to refuse to be replaced hereunder, and agrees to execute and deliver a completed form of Assignment and Acceptance in favor of the substitute Lender (and agrees that it shall be deemed to have executed and delivered such document if it fails to do so) subject only to being paid its share of the outstanding Obligations (other than Bank Product Obligations, but including (1) all interest, fees, and other amounts that may be due and payable in respect thereof, and (2) an assumption of its Pro Rata Share of its participation in the Letters of Credit); provided, that any such assumption of the Commitment of such Defaulting Lender shall not be deemed to constitute a waiver of any of the Lender Groups’ or any Borrower’s rights or remedies against any such Defaulting Lender arising out of or in relation to such failure to fund.  In the event of a direct conflict between the priority provisions of this Section 2.3(g) and any other provision contained in this Agreement or any other Loan Document, it is the intention of the parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in concert with each other.  In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this Section 2.3(g) shall control and govern.

 

(ii)        If any Swing Loan or Letter of Credit is outstanding at the time that a Lender becomes a Defaulting Lender then:

 

(A)          such Defaulting Lender’s Swing Loan Exposure and Letter of Credit Exposure shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Pro Rata Shares but only to the extent (y) the sum of all Non-Defaulting Lenders’ Revolving Loan Exposures plus such Defaulting Lender’s Swing Loan Exposure and Letter of Credit Exposure does not exceed the total of all Non-Defaulting Lenders’ Commitments and (z) the conditions set forth in Section 3.2 are satisfied at such time;

 

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(B)           if the reallocation described in clause (A) above cannot, or can only partially, be effected, Borrowers shall within one Business Day following notice by Agent to Administrative Borrower (y) first, prepay such Defaulting Lender’s Swing Loan Exposure (after giving effect to any partial reallocation pursuant to clause (A) above) and (z) second, cash collateralize such Defaulting Lender’s Letter of Credit Exposure (after giving effect to any partial reallocation pursuant to clause (A) above), pursuant to a cash collateral agreement to be entered into in form and substance reasonably satisfactory to Agent, for so long as such Letter of Credit Exposure is outstanding; provided, that Borrowers shall not be obligated to cash collateralize any Defaulting Lender’s Letter of Credit Exposure if such Defaulting Lender is also the Issuing Bank;

 

(C)           if Borrowers cash collateralize any portion of such Defaulting Lender’s Letter of Credit Exposure pursuant to this Section 2.3(g)(ii), Borrowers shall not be required to pay any Letter of Credit Fees to Agent for the account of such Defaulting Lender pursuant to Section 2.6(b) with respect to such cash collateralized portion of such Defaulting Lender’s Letter of Credit Exposure during the period such Letter of Credit Exposure is cash collateralized;

 

(D)          to the extent the Letter of Credit Exposure of the Non-Defaulting Lenders is reallocated pursuant to this Section 2.3(g)(ii), then the Letter of Credit Fees payable to the Non-Defaulting Lenders pursuant to Section 2.6(b) shall be adjusted in accordance with such Non-Defaulting Lenders’ Letter of Credit Exposure;

 

(E)           to the extent any Defaulting Lender’s Letter of Credit Exposure is neither cash collateralized nor reallocated pursuant to this Section 2.3(g)(ii), then, without prejudice to any rights or remedies of the Issuing Bank or any Lender hereunder, all Letter of Credit Fees that would have otherwise been payable to such Defaulting Lender under Section 2.6(b) with respect to such portion of such Letter of Credit Exposure shall instead be payable to the Issuing Bank until such portion of such Defaulting Lender’s Letter of Credit Exposure is cash collateralized or reallocated;

 

(F)           so long as any Lender is a Defaulting Lender, the Swing Lender shall not be required to make any Swing Loan and the Issuing Bank shall not be required to issue, amend, or increase any Letter of Credit, in each case, to the extent (y) the Defaulting Lender’s Pro Rata Share of such Swing Loans or Letter of Credit cannot be reallocated pursuant to this Section 2.3(g)(ii) or (z) the Swing Lender or Issuing Bank, as applicable, has not otherwise entered into arrangements reasonably satisfactory to the Swing Lender or Issuing Bank, as applicable, and Borrowers to eliminate the Swing Lender’s or Issuing Bank’s risk with respect to the Defaulting Lender’s participation in Swing Loans or Letters of Credit; and

 

(G)           Agent may release any cash collateral provided by Borrowers pursuant to this Section 2.3(g)(ii) to the Issuing Bank and the Issuing Bank may apply any such cash collateral to the payment of such Defaulting Lender’s Pro Rata Share of any Letter of Credit Disbursement that is not reimbursed by Borrowers pursuant to Section 2.11(d).

 

(h)           Independent Obligations.  All Revolving Loans (other than Swing Loans and Extraordinary Advances) shall be made by the Lenders contemporaneously and in accordance with their Pro Rata Shares.  It is understood that (i) no Lender shall be responsible for any failure by any other Lender to perform its obligation to make any Revolving Loan (or other extension of credit) hereunder, nor shall any Commitment of any Lender be increased or decreased as a result of any failure by any other Lender to perform its obligations hereunder, and (ii) no failure by any Lender to perform its obligations hereunder shall excuse any other Lender from its obligations hereunder.

 

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2.4           Payments; Reductions of Commitments; Prepayments.

 

(a)           Payments by Borrowers.

 

(i)         Except as otherwise expressly provided herein, all payments by any Borrower shall be made to Agent’s Account for the account of the Lender Group and shall be made in immediately available funds, no later than 1:30 p.m. on the date specified herein.  Any payment received by Agent later than 1:30 p.m. shall be deemed to have been received (unless Agent, in its sole discretion, elects to credit it on the date received) on the following Business Day and any applicable interest or fee shall continue to accrue until such following Business Day.

 

(ii)        Unless Agent receives notice from Administrative Borrower prior to the date on which any payment is due to the Lenders that Borrowers will not make such payment in full as and when required, Agent may assume that Borrowers have made (or will make) such payment in full to Agent on such date in immediately available funds and Agent may (but shall not be so required), in reliance upon such assumption, distribute to each Lender on such due date an amount equal to the amount then due such Lender.  If and to the extent Borrowers do not make such payment in full to Agent on the date when due, each Lender severally shall repay to Agent on demand such amount distributed to such Lender, together with interest thereon at the Defaulting Lender Rate for each day from the date such amount is distributed to such Lender until the date repaid.

 

(b)           Apportionment and Application.

 

(i)         So long as no Application Event has occurred and is continuing and except as otherwise provided herein with respect to Defaulting Lenders, all principal and interest payments received by Agent shall be apportioned ratably among the Lenders (according to the unpaid principal balance of the Obligations to which such payments relate held by each Lender) and all payments of fees and expenses received by Agent (other than fees or expenses that are for Agent’s separate account or for the separate account of Issuing Bank) shall be apportioned ratably among the Lenders having a Pro Rata Share of the type of Commitment or Obligation to which a particular fee or expense relates.  Subject to Section 2.4(b)(iv) and Section 2.4(e), all payments to be made hereunder by Borrowers shall be remitted to Agent and all such payments, and all proceeds of Collateral received by Agent, shall be applied, so long as no Application Event has occurred and is continuing and except as otherwise provided herein with respect to Defaulting Lenders, to reduce the balance of the Revolving Loans outstanding and, thereafter, to Borrowers (to be wired to the Designated Account) or such other Person entitled thereto under applicable law.

 

(ii)        At any time that an Application Event has occurred and is continuing and except as otherwise provided herein with respect to Defaulting Lenders, all payments remitted to Agent and all proceeds of Collateral received by Agent shall be applied as follows:

 

(A)          first, to pay any Lender Group Expenses (including cost or expense reimbursements) or indemnities then due to Agent under the Loan Documents, until paid in full,

 

(B)           second, to pay any fees or premiums then due to Agent under the Loan Documents until paid in full,

 

(C)           third, to pay interest due in respect of all Protective Advances until paid in full,

 

(D)          fourth, to pay the principal of all Protective Advances until paid in full,

 

(E)           fifth, ratably, to pay any Lender Group Expenses (including cost or expense reimbursements) or indemnities then due to any of the Lenders under the Loan Documents, until paid in full,

 

(F)           sixth, ratably, to pay any fees or premiums then due to any of the Lenders under the Loan Documents until paid in full,

 

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(G)           seventh, to pay interest accrued in respect of the Swing Loans until paid in full,

 

(H)          eighth, to pay the principal of all Swing Loans until paid in full,

 

(I)            ninth, ratably, to pay interest accrued in respect of the Revolving Loans (other than Protective Advances) until paid in full,

 

(J)            tenth, ratably (i) to pay the principal of all Revolving Loans until paid in full, and (ii) to Agent, to be held by Agent, for the benefit of Issuing Bank (and for the ratable benefit of each of the Lenders that have an obligation to pay to Agent, for the account of Issuing Bank, a share of each Letter of Credit Disbursement), as cash collateral in an amount up to 103% of the Letter of Credit Usage (to the extent permitted by applicable law, such cash collateral shall be applied to the reimbursement of any Letter of Credit Disbursement as and when such disbursement occurs and, if a Letter of Credit expires undrawn, the cash collateral held by Agent in respect of such Letter of Credit shall, to the extent permitted by applicable law, be reapplied pursuant to this Section 2.4(b)(ii), beginning with tier (A) hereof),

 

(K)          eleventh, ratably to the Bank Product Providers based upon amounts then certified by the applicable Bank Product Provider to Agent (in form and substance satisfactory to Agent) to be due and payable to such Bank Product Providers on account of Bank Product Obligations,

 

(L)           twelfth, to pay any other Obligations other than Obligations owed to Defaulting Lenders,

 

(M)         thirteenth, ratably to pay any Obligations owed to Defaulting Lenders; and

 

(N)          fourteenth, to Borrowers (to be wired to the Designated Account) or such other Person entitled thereto under applicable law.

 

(iii)       Agent promptly shall distribute to each Lender, pursuant to the applicable wire instructions received from each Lender in writing, such funds as it may be entitled to receive, subject to a Settlement delay as provided in Section 2.3(e).

 

(iv)       In each instance, so long as no Application Event has occurred and is continuing, Section 2.4(b)(i) shall not apply to any payment made by any Borrower to Agent and specified by such Borrower to be for the payment of specific Obligations then due and payable (or prepayable) under any provision of this Agreement or any other Loan Document.

 

(v)        For purposes of Section 2.4(b)(ii), “paid in full” of a type of Obligation means payment in cash or immediately available funds of all amounts owing on account of such type of Obligation, including interest accrued after the commencement of any Insolvency Proceeding, default interest, interest on interest, and expense reimbursements, irrespective of whether any of the foregoing would be or is allowed or disallowed in whole or in part in any Insolvency Proceeding.

 

(vi)      In the event of a direct conflict between the priority provisions of this Section 2.4 and any other provision contained in this Agreement or any other Loan Document, it is the intention of the parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in concert with each other.  In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, if the conflict relates to the provisions of Section 2.3(g) and this Section 2.4, then the provisions of Section 2.3(g) shall control and govern, and if otherwise, then the terms and provisions of this Section 2.4 shall control and govern.

 

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(vii)      For the avoidance of doubt, unless and until the Blocked Account Funds are applied by Agent to the Obligations in accordance with Section 5.19, none of the Blocked Account Funds in the Blocked Account shall satisfy (or be deemed to satisfy) any portion of the Obligations (whether or not due or payable and whether or not contingent).

 

(c)           Reduction of Commitments.  The Commitments shall terminate on the Maturity Date.  Borrowers may reduce the Commitments to an amount (which may be zero) not less than the sum of (A) the Revolver Usage as of such date, plus (B) the principal amount of all Revolving Loans not yet made as to which a request has been given by Borrowers under Section 2.3(a), plus (C) the amount of all Letters of Credit not yet issued as to which a request has been given by Borrowers pursuant to Section 2.11(a).  Each such reduction shall be in an amount which is not less than $5,000,000 (unless the Commitments are being reduced to zero and the amount of the Commitments in effect immediately prior to such reduction are less than $5,000,000), shall be made by providing not less than 10 Business Days prior written notice to Agent, and shall be irrevocable.  Once reduced, the Commitments may not be increased.  Each such reduction of the Commitments shall reduce the Commitments of each Lender proportionately in accordance with its ratable share thereof.

 

(d)           Optional Prepayments.  Borrowers may prepay the principal of any Revolving Loan at any time in whole or in part, without premium or penalty.

 

(e)           Mandatory Prepayments.  If, at any time, the Revolver Usage on such date exceeds the Borrowing Base reflected in the Borrowing Base Certificate most recently delivered by Borrowers to Agent, then Borrowers shall immediately prepay the Obligations in accordance with Section 2.4(f)(i) in an aggregate amount equal to the amount of such excess.

 

(f)            Application of Payments.  Each prepayment pursuant to Section 2.4(e) shall, (A) so long as no Application Event shall have occurred and be continuing, be applied, first, to the outstanding principal amount of the Revolving Loans until paid in full, second,  to cash collateralize the Letters of Credit in an amount equal to 103% of the then outstanding Letter of Credit Usage, and (B) if an Application Event shall have occurred and be continuing, be applied in the manner set forth in Section 2.4(b)(ii).

 

2.5           Promise to Pay.  Borrowers agree to pay the Lender Group Expenses on the earlier of (a) the first day of the month following the date on which the applicable Lender Group Expenses were first incurred or (b) the date on which demand therefor is made by Agent. (it being acknowledged and agreed that any charging of such costs, expenses, or Lender Group Expenses to the Loan Account pursuant to the provisions of Section 2.6(d) shall be deemed to constitute a demand for payment thereof for the purposes of this subclause (b)).  Borrowers agree to pay in full all of the Obligations (including principal, interest, premiums, if any, fees, costs, and expenses (including Lender Group Expenses)) on the Maturity Date or, if earlier, on the date on which the Obligations (other than the Bank Product Obligations) become due and payable pursuant to the terms of this Agreement.  Borrowers agree that their obligations contained in the first sentence of this Section 2.5 shall survive payment or satisfaction in full of all other Obligations.

 

2.6           Interest Rates and Letter of Credit Fee:  Rates, Payments, and Calculations.

 

(a)           Interest Rates.  Except as provided in Section 2.6(c), all Obligations (except for undrawn Letters of Credit) that have been charged to the Loan Account pursuant to the terms hereof shall bear interest as follows:

 

(i)         if the relevant Obligation is a LIBOR Rate Loan, at a per annum rate equal to the LIBOR Rate plus the LIBOR Rate Margin, and

 

(ii)        otherwise, at a per annum rate equal to the Base Rate plus the Base Rate Margin.

 

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(b)           Letter of Credit Fee.  Borrowers shall pay Agent (for the ratable benefit of the Lenders), a Letter of Credit fee (the “Letter of Credit Fee”) (which fee shall be in addition to the fees, charges, commissions, and costs set forth in Section 2.11(j)) which shall accrue at a per annum rate equal to the LIBOR Rate Margin times the undrawn amount of all outstanding Letters of Credit.

 

(c)           Default Rate.  Upon the occurrence and during the continuation of an Event of Default and at the election of Agent or the Required Lenders,

 

(i)         all Obligations (except for undrawn Letters of Credit) that have been charged to the Loan Account pursuant to the terms hereof shall bear interest at a per annum rate equal to 2 percentage points above the per annum rate otherwise applicable thereunder, and

 

(ii)        the Letter of Credit Fee shall be increased to 2 percentage points above the per annum rate otherwise applicable hereunder.

 

(d)           Payment.  Except to the extent provided to the contrary in Section 2.10, Section 2.11(k) or Section2.12(a), (i) all interest, all Letter of Credit Fees, and all other fees payable hereunder or under any of the other Loan Documents shall be due and payable, in arrears, on the first day of each month and (ii) all costs and expenses payable hereunder or under any of the other Loan Documents, and all Lender Group Expenses shall be due and payable, in arrears, on the first day of each month at any time that Obligations or Commitments are outstanding.  Each Borrower hereby authorizes Agent, from time to time without prior notice to such Borrower, to charge (A) on the first day of each month, all interest accrued during the prior month on the Revolving Loans hereunder, (B) on the first day of each month, all Letter of Credit Fees accrued or chargeable hereunder during the prior month, (C) on the first day of each month, the Unused Line Fee accrued during the prior month pursuant to Section 2.10(b), (D) as and when incurred or accrued, all audit, appraisal, valuation, or other charges or fees payable hereunder pursuant to Section 2.10(c), (E) as and when due and payable, all other fees payable hereunder or under any of the other Loan Documents, (F) as and when incurred or accrued, all Lender Group Expenses, (G) as and when incurred or accrued, the fronting fees and all commissions, other fees, charges and expenses provided for in Section 2.11(k), (H) as and when incurred or accrued, all fees and costs provided for in Section 2.10, and (I) as and when due and payable all other payment obligations payable under any Loan Document or any Bank Product Agreement (including any amounts due and payable to the Bank Product Providers in respect of Bank Products) to the Loan Account, which amounts thereafter shall constitute Revolving Loans hereunder and, initially, shall accrue interest at the rate then applicable to Revolving Loans that are Base Rate Loans.  Any interest, fees, costs, expenses, Lender Group Expenses, or other amounts payable hereunder or under any other Loan Document or under any Bank Product Agreement that are charged to the Loan Account shall thereupon constitute Revolving Loans hereunder, shall constitute Obligations hereunder, and shall initially accrue interest at the rate then applicable to Revolving Loans that are Base Rate Loans (unless and until converted into LIBOR Rate Loans in accordance with the terms of this Agreement).

 

(e)           Computation.  All interest and fees chargeable under the Loan Documents shall be computed on the basis of a 360 day year, in each case, for the actual number of days elapsed in the period during which the interest or fees accrue.  In the event the Base Rate is changed from time to time hereafter, the rates of interest hereunder based upon the Base Rate automatically and immediately shall be increased or decreased by an amount equal to such change in the Base Rate.

 

(f)            Intent to Limit Charges to Maximum Lawful Rate.  The Lender Group and all other parties to the Loan Documents intend to contract in strict compliance with applicable usury law from time to time in effect.  In furtherance thereof such Persons stipulate and agree that none of the terms and provisions contained in the Loan Documents shall ever be construed to create a contract to pay, for the use, forbearance or detention of money, or interest in excess of the Maximum Interest.  No Loan Party, endorser, or other Person hereafter becoming liable for payment of any Obligation shall ever be liable to pay interest thereon in excess of the Maximum Interest, and the provisions of this section shall control over all other provisions of the Loan Documents which may be in conflict or apparent conflict herewith.  If (i) the maturity

 

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of any Obligation is accelerated for any reason, (ii) any Obligation is prepaid and as a result any amounts held to constitute interest are determined to be in excess of the Maximum Interest, or (iii) any Lender or any other holder of any or all of the Obligations shall otherwise collect moneys that are determined to constitute interest which would otherwise increase the interest and other amounts deemed interest on any or all of the Obligations to an amount in excess of the Maximum Interest, then all sums determined to constitute interest in excess of the Maximum Interest shall, without penalty, be promptly applied to reduce the then outstanding principal of the related Obligations or, at such Lender’s or holder’s option, promptly returned to Borrower upon such determination.  In determining whether or not the interest paid or payable, under any specific circumstance, exceeds the Maximum Interest, the Lender Group and Loan Parties shall to the greatest extent permitted under applicable law, (x) characterize any non-principal payment as an expense, fee or premium rather than as interest, (y) exclude the voluntary prepayments and the effects thereof, and (z) amortize, prorate, allocate, and spread the total amount of interest throughout the entire contemplated term of the instruments evidencing Obligations in accordance with the amounts outstanding from time to time thereunder and the Maximum Interest in order to lawfully charge the Maximum Interest.  If at any time mandatory provisions of law provide for the application of an interest ceiling under Chapter 303 of the Texas Finance Code (the “Texas Finance Code”) as amended, at such time, the ceiling shall be the “weekly ceiling” as defined in the Texas Finance Code; provided that if any applicable law permits greater interest, the law permitting the greatest interest shall apply.  To the extent that the interest rate or rates otherwise payable under this Agreement plus any other amounts paid under this Agreement or any other Loan Document are limited under applicable law, each Lender agrees to limit the interest to which it is otherwise entitled to the Maximum Interest.  Such limitation for each Lender for any period shall be in an amount equal to such Lender’s Pro Rata Share multiplied by the difference between the applicable interest rate under this Agreement and the Maximum Interest.  For purposes of this calculation at any date of determination, any fees or charges included in the calculation of interest not directly related to a particular type of Obligation shall be allocated ratably to each Lender based upon the outstanding Obligations of each Lender compared to all Obligations.  As provided in Section 12(a), this Agreement shall be governed by, and construed in accordance with, the laws of the State of California.  The foregoing provisions are included solely out of an abundance of caution and shall not be construed to mean that any of the above referenced provisions of Texas law are in any way applicable to this Agreement, the other Loan Documents, or the Obligations.

 

2.7           Crediting Payments.  The receipt of any payment item by Agent shall not be required to be considered a payment on account unless such payment item is a wire transfer of immediately available federal funds made to Agent’s Account or unless and until such payment item is honored when presented for payment.  Should any payment item not be honored when presented for payment, then Borrowers shall be deemed not to have made such payment and interest shall be calculated accordingly.  Anything to the contrary contained herein notwithstanding, any payment item shall be deemed received by Agent only if it is received into Agent’s Account on a Business Day on or before 1:30 p.m.  If any payment item is received into Agent’s Account on a non-Business Day or after 1:30 p.m. on a Business Day (unless Agent, in its sole discretion, elects to credit it on the date received), it shall be deemed to have been received by Agent as of the opening of business on the immediately following Business Day.

 

2.8           Designated Account.  Agent is authorized to make the Revolving Loans, and Issuing Bank is authorized to issue the Letters of Credit, under this Agreement based upon telephonic or other instructions received from anyone purporting to be an Authorized Person or, without instructions, if pursuant to Section 2.6(d).  Borrowers agree to establish and maintain the Designated Account with the Designated Account Bank for the purpose of receiving the proceeds of the Revolving Loans requested by Borrowers and made by Agent or the Lenders hereunder.  Unless otherwise agreed by Agent and Borrowers, any Revolving Loan or Swing Loan requested by Borrowers and made by Agent or the Lenders hereunder shall be made to the Designated Account.

 

2.9           Maintenance of Loan Account; Statements of Obligations.  Agent shall maintain an account on its books in the name of Borrowers (the “Loan Account”) on which Borrowers will be charged with all Revolving Loans (including Extraordinary Advances and Swing Loans) made by Agent, Swing

 

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Lender, or the Lenders to Borrowers or for any Borrower’s account, the Letters of Credit issued or arranged by Issuing Bank for any Borrower’s account, and with all other payment Obligations hereunder or under the other Loan Documents, including, accrued interest, fees and expenses, and Lender Group Expenses.  In accordance with Section 2.7, the Loan Account will be credited with all payments received by Agent from Borrowers or for any Borrower’s account.  Agent shall make available to Borrowers monthly statements regarding the Loan Account, including the principal amount of the Revolving Loans, interest accrued hereunder, fees accrued or charged hereunder or under the other Loan Documents, and a summary itemization of all charges and expenses constituting Lender Group Expenses accrued hereunder or under the other Loan Documents, and each such statement, absent manifest error, shall be conclusively presumed to be correct and accurate and constitute an account stated between Borrowers and the Lender Group unless, within 30 days after Agent first makes such a statement available to Borrowers, Borrowers shall deliver to Agent written objection thereto describing the error or errors contained in such statement.

 

2.10         Fees.

 

(a)           Agent Fees.  Borrowers shall pay to Agent, for the account of Agent, as and when due and payable under the terms of the Fee Letter, the fees set forth in the Fee Letter.

 

(b)           Unused Line Fee.  Borrowers shall pay to Agent, for the ratable account of the Lenders, on the first day of each month from and after the Closing Date up to the first day of the month prior to the date on which the Obligations are paid in full and on the date on which the Obligations are paid in full, an unused line fee (the “Unused Line Fee”) in an amount equal to 0.50% per annum times the result of (i) the aggregate amount of the Commitments, less (ii) the average amount of the Revolver Usage during the immediately preceding month (or portion thereof).

 

(c)           Field Examination and Other Fees.  Borrowers shall pay to Agent, field examination, appraisal, and valuation fees and charges, as and when incurred or chargeable, as follows (i) a fee of $1,000 per day, per examiner, plus out-of-pocket expenses for each field examination of the Loan Parties performed by personnel employed by Agent, and (ii) the customary fees or charges paid, incurred or charged by Agent (but, in any event, no less than a charge of $1,000 per day, per Person, plus out-of-pocket expenses) if it elects to employ the services of one or more third Persons to perform field examinations of Parent or its Subsidiaries, to establish electronic collateral reporting systems, to appraise the Collateral, or any portion thereof, or to assess Parent’s or its Subsidiaries’ business valuation; provided, that so long as no Event of Default shall have occurred and be continuing, Borrowers shall not be obligated to reimburse Agent for more than 3 field examinations during any calendar year, or more than 2 appraisals of the Collateral during any calendar year.

 

2.11         Letters of Credit.

 

(a)           Subject to the terms and conditions of this Agreement, upon the request of Borrowers made in accordance herewith, and prior to the Maturity Date, Issuing Bank agrees to issue a requested Letter of Credit for the account of Borrowers.  By submitting a request to Issuing Bank for the issuance of a Letter of Credit, Borrowers shall be deemed to have requested that Issuing Bank issue the requested Letter of Credit.  Each request for the issuance of a Letter of Credit, or the amendment, renewal, or extension of any outstanding Letter of Credit, shall be irrevocable and shall be made in writing by an Authorized Person and delivered to Iressuing Bank via telefacsimile or other electronic method of transmission reasonably acceptable to Issuing Bank in advance of the requested date of issuance, amendment, renewal, or extension.  Each such request shall be in form and substance reasonably satisfactory to Issuing Bank and (i) shall specify (A) the amount of such Letter of Credit, (B) the date of issuance, amendment, renewal, or extension of such Letter of Credit, (C) the proposed expiration date of such Letter of Credit, (D) the name and address of the beneficiary of the Letter of Credit, and (E) such other information (including, the conditions to drawing, and, in the case of an amendment, renewal, or extension, identification of the Letter of Credit to be so amended, renewed, or extended) as shall be necessary to prepare, amend, renew, or extend such Letter of Credit, and (ii) shall be accompanied by such Issuer Documents as Agent or Issuing Bank may request or

 

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require.  Anything contained herein to the contrary notwithstanding, Issuing Bank may, but shall not be obligated to, issue or cause the issuance of a Letter of Credit or to issue a Letter of Credit that supports the obligations of Parent or its Subsidiaries (1) in respect of (A) a lease of real property, or (B) an employment contract, or (2) at any time that one or more of the Lenders is a Defaulting Lender.

 

(b)           Issuing Bank shall have no obligation to issue a Letter of Credit if any of the following would result after giving effect to the requested issuance:

 

(i)         the Letter of Credit Usage would exceed $10,000,000,

 

(ii)        the Letter of Credit Usage would exceed the Maximum Revolver Amount less the outstanding amount of all Loans (including Swing Loans), or

 

(iii)       the Letter of Credit Usage would exceed the Borrowing Base at such time less the outstanding principal balance of the Revolving Loans (inclusive of Swing Loans) at such time.

 

(c)           In the event there is a Defaulting Lender as of the date of any request for the issuance of a Letter of Credit, the Issuing Bank shall not be required to issue or arrange for such Letter of Credit to the extent (y) the Defaulting Lender’s Letter of Credit Exposure with respect to such Letter of Credit may not be reallocated pursuant to Section 2.3(g)(ii) or (z) the Issuing Bank has not otherwise entered into arrangements reasonably satisfactory to it and Borrowers to eliminate the Issuing Bank’s risk with respect to the participation in such Letter of Credit of the Defaulting Lender, which arrangements may include Borrowers cash collateralizing such Defaulting Lender’s Letter of Credit Exposure in accordance with Section 2.3(g)(ii).  Additionally, Issuing Bank shall have no obligation to issue a Letter of Credit if (I) any order, judgment, or decree of any Governmental Authority or arbitrator shall, by its terms, purport to enjoin or restrain Issuing Bank from issuing such Letter of Credit, or any law applicable to Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over Issuing Bank shall prohibit or request that Issuing Bank refrain from the issuance of letters of credit generally or such Letter of Credit in particular, or (II) the issuance of such Letter of Credit would violate one or more policies of Issuing Bank applicable to letters of credit generally.

 

(d)           Any Issuing Bank (other than Wells Fargo or any of its Affiliates) shall notify Agent in writing on each Business Day of all Letters of Credit issued on the prior Business Day by such Issuing Bank; provided that (y) until Agent advises any such Issuing Bank that the provisions of Section 3.2 are not satisfied, or (z) the aggregate amount of the Letters of Credit issued in any such week exceeds such amount as shall be agreed by Agent and such Issuing Bank, such Issuing Bank shall be required to so notify Agent in writing only once each week of the Letters of Credit issued by such Issuing Bank during the immediately preceding week as well as the daily amounts outstanding for the prior week, such notice to be furnished on such day of the week as Agent and Issuing Bank may agree.  Borrowers and the Lender Group hereby acknowledge and agree that all Existing Letters of Credit shall constitute Letters of Credit under this Agreement on and after the Closing Date with the same effect as if such Existing Letters of Credit were issued by Issuing Bank at the request of Borrowers on the Closing Date.  Each Letter of Credit shall be in form and substance reasonably acceptable to Issuing Bank, including the requirement that the amounts payable thereunder must be payable in Dollars.  If Issuing Bank makes a payment under a Letter of Credit, Borrowers shall pay to Agent an amount equal to the applicable Letter of Credit Disbursement on the date such Letter of Credit Disbursement is made and, in the absence of such payment, the amount of the Letter of Credit Disbursement immediately and automatically shall be deemed to be a Revolving Loan hereunder (notwithstanding any failure to satisfy any condition precedent set forth in Section 3) and, initially, shall bear interest at the rate then applicable to Revolving Loans that are Base Rate Loans. If a Letter of Credit Disbursement is deemed to be a Revolving Loan hereunder, Borrowers’ obligation to pay the amount of such Letter of Credit Disbursement to Issuing Bank shall be automatically converted into an obligation to pay the resulting Revolving Loan.  Promptly following receipt by Agent of any payment from any Borrower pursuant to this paragraph, Agent shall distribute such payment to Issuing Bank or, to the extent that Lenders have made

 

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payments pursuant to Section 2.11(b) to reimburse Issuing Bank, then to such Lenders and Issuing Bank as their interests may appear.

 

(e)           Promptly following receipt of a notice of a Letter of Credit Disbursement pursuant to Section 2.11(a), each Lender agrees to fund its Pro Rata Share of any Revolving Loan deemed made pursuant to Section 2.11(a) on the same terms and conditions as if Borrowers had requested the amount thereof as a Revolving Loan and Agent shall promptly pay to Issuing Bank the amounts so received by it from the Lenders.  By the issuance of a Letter of Credit (or an amendment, renewal, or extension of a Letter of Credit) and without any further action on the part of Issuing Bank or the Lenders, Issuing Bank shall be deemed to have granted to each Lender, and each Lender shall be deemed to have purchased, a participation in each Letter of Credit issued by Issuing Bank, in an amount equal to its Pro Rata Share of such Letter of Credit, and each such Lender agrees to pay to Agent, for the account of Issuing Bank, such Lender’s Pro Rata Share of any Letter of Credit Disbursement made by Issuing Bank under the applicable Letter of Credit.  In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to Agent, for the account of Issuing Bank, such Lender’s Pro Rata Share of each Letter of Credit Disbursement made by Issuing Bank and not reimbursed by Borrowers on the date due as provided in Section 2.11(a), or of any reimbursement payment that is required to be refunded (or that Agent or Issuing Bank elects, based upon the advice of counsel, to refund) to Borrowers for any reason.  Each Lender acknowledges and agrees that its obligation to deliver to Agent, for the account of Issuing Bank, an amount equal to its respective Pro Rata Share of each Letter of Credit Disbursement pursuant to this Section 2.11(b) shall be absolute and unconditional and such remittance shall be made notwithstanding the occurrence or continuation of a Default or an Event of Default or the failure to satisfy any condition set forth in Section 3.  If any such Lender fails to make available to Agent the amount of such Lender’s Pro Rata Share of a Letter of Credit Disbursement as provided in this Section, such Lender shall be deemed to be a Defaulting Lender and Agent (for the account of Issuing Bank) shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate until paid in full.

 

(f)            Each Borrower agrees to indemnify, defend and hold harmless each member of the Lender Group (including Issuing Bank and its branches, Affiliates, and correspondents) and each such Person’s respective directors, officers, employees, attorneys and agents (each, including Issuing Bank, a “Letter of Credit Related Person”) (to the fullest extent permitted by law) from and against any and all claims, demands, suits, actions, investigations, proceedings, liabilities, fines, costs, penalties, and damages, and all reasonable fees and disbursements of attorneys, experts, or consultants and all other costs and expenses actually incurred in connection therewith or in connection with the enforcement of this indemnification (as and when they are incurred and irrespective of whether suit is brought), which may be incurred by or awarded against any Letter of Credit Related Person (other than Taxes, which shall be governed by Section 16) (the “Letter of Credit Indemnified Costs”), and which arise out of or in connection with, or as a result of this Agreement, any Letter of Credit, any Issuer Document, or any Drawing Document referred to in or related to any Letter of Credit, or any action or proceeding arising out of any of the foregoing (whether administrative, judicial or in connection with arbitration); in each case, including that resulting from the Letter of Credit Related Person’s own negligence; provided,  that such indemnity shall not be available to any Letter of Credit Related Person claiming indemnification to the extent that such Letter of Credit Indemnified Costs may be finally determined in a final, non-appealable judgment of a court of competent jurisdiction to have resulted directly from the gross negligence or willful misconduct of the Letter of Credit Related Person claiming indemnity.  This indemnification provision shall survive termination of this Agreement and all Letters of Credit.

 

(g)           The liability of Issuing Bank (or any other Letter of Credit Related Person) under, in connection with or arising out of any Letter of Credit (or pre-advice), regardless of the form or legal grounds of the action or proceeding, shall be limited to direct damages suffered by Borrowers that are caused directly by Issuing Bank’s gross negligence or willful misconduct in (i) honoring a presentation under a Letter of Credit that on its face does not at least substantially comply with the terms and conditions of such Letter of Credit, (ii) failing to honor a presentation under a Letter of Credit that strictly complies with the terms and

 

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conditions of such Letter of Credit or (iii) retaining Drawing Documents presented under a Letter of Credit.  Issuing Bank shall be deemed to have acted with due diligence and reasonable care if Issuing Bank’s conduct is in accordance with Standard Letter of Credit Practice or in accordance with this Agreement.  Borrowers’ aggregate remedies against Issuing Bank and any Letter of Credit Related Person for wrongfully honoring a presentation under any Letter of Credit or wrongfully retaining honored Drawing Documents shall in no event exceed the aggregate amount paid by Borrowers to Issuing Bank in respect of the honored presentation in connection with such Letter of Credit under Section 2.11(d), plus interest at the rate then applicable to Base Rate Loans hereunder.  Borrowers shall take action to avoid and mitigate the amount of any damages claimed against Issuing Bank or any other Letter of Credit Related Person, including by enforcing its rights against the beneficiaries of the Letters of Credit.  Any claim by Borrowers under or in connection with any Letter of Credit shall be reduced by an amount equal to the sum of (x) the amount (if any) saved by Borrowers as a result of the breach or alleged wrongful conduct complained of; and (y) the amount (if any) of the loss that would have been avoided had Borrowers taken all reasonable steps to mitigate any loss, and in case of a claim of wrongful dishonor, by specifically and timely authorizing Issuing Bank to effect a cure.

 

(h)           Borrowers are responsible for preparing or approving the final text of the Letter of Credit as issued by Issuing Bank, irrespective of any assistance Issuing Bank may provide such as drafting or recommending text or by Issuing Bank’s use or refusal to use text submitted by Borrowers.  Borrowers are solely responsible for the suitability of the Letter of Credit for Borrowers’ purposes.  With respect to any Letter of Credit containing an “automatic amendment” to extend the expiration date of such Letter of Credit, Issuing Bank, in its sole and absolute discretion, may give notice of nonrenewal of such Letter of Credit and, if Borrowers do not at any time want such Letter of Credit to be renewed, Borrowers will so notify Agent and Issuing Bank at least 15 calendar days before Issuing Bank is required to notify the beneficiary of such Letter of Credit or any advising bank of such nonrenewal pursuant to the terms of such Letter of Credit.

 

(i)            Borrowers’ reimbursement and payment obligations under this Section 2.11 are absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever, including:

 

(i)         any lack of validity, enforceability or legal effect of any Letter of Credit or this Agreement or any term or provision therein or herein,

 

(ii)        payment against presentation of any draft, demand or claim for payment under any Drawing Document that does not comply in whole or in part with the terms of the applicable Letter of Credit or which proves to be fraudulent, forged or invalid in any respect or any statement therein being untrue or inaccurate in any respect, or which is signed, issued or presented by a Person or a transferee of such Person purporting to be a successor or transferee of the beneficiary of such Letter of Credit

 

(iii)       Issuing Bank or any of its branches or Affiliates being the beneficiary of any Letter of Credit,

 

(iv)       Issuing Bank or any correspondent honoring a drawing against a Drawing Document up to the amount available under any Letter of Credit even if such Drawing Document claims an amount in excess of the amount available under the Letter of Credit,

 

(v)        the existence of any claim, set-off, defense or other right that Parent or any of its Subsidiaries may have at any time against any beneficiary, any assignee of proceeds, Issuing Bank or any other Person,

 

(vi)       any other event, circumstance or conduct whatsoever, whether or not similar to any of the foregoing that might, but for this Section 2.11(i), constitute a legal or equitable defense to or discharge of, or provide a right of set-off against, any Borrower’s or any of its Subsidiaries’ reimbursement and other payment obligations and liabilities, arising under, or in connection with, any Letter of Credit, whether against Issuing Bank, the beneficiary or any other Person, or

 

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(vii)        the fact that any Default or Event of Default shall have occurred and be continuing; provided, that subject to Section 2.11(g) above, the foregoing shall not release Issuing Bank from such liability to Borrowers as may be finally determined in a final, non-appealable judgment of a court of competent jurisdiction against Issuing Bank following reimbursement or payment of the obligations and liabilities, including reimbursement and other payment obligations, of Borrowers to Issuing Bank arising under, or in connection with, this Section 2.11 or any Letter of Credit.

 

(j)            Without limiting any other provision of this Agreement, Issuing Bank and each other Letter of Credit Related Person (if applicable) shall not be responsible to Borrowers for, and Issuing Bank’s rights and remedies against Borrowers and the obligation of Borrowers to reimburse Issuing Bank for each drawing under each Letter of Credit shall not be impaired by:

 

(i)         honor of a presentation under any Letter of Credit that on its face substantially complies with the terms and conditions of such Letter of Credit, even if the Letter of Credit requires strict compliance by the beneficiary;

 

(ii)        honor of a presentation of any Drawing Document that appears on its face to have been signed, presented or issued (A) by any purported successor or transferee of any beneficiary or other Person required to sign, present or issue such Drawing Document or (B) under a new name of the beneficiary;

 

(iii)       acceptance as a draft of any written or electronic demand or request for payment under a Letter of Credit, even if nonnegotiable or not in the form of a draft or notwithstanding any requirement that such draft, demand or request bear any or adequate reference to the Letter of Credit;

 

(iv)       the identity or authority of any presenter or signer of any Drawing Document or the form, accuracy, genuineness or legal effect of any Drawing Document (other than Issuing Bank’s determination that such Drawing Document appears on its face substantially to comply with the terms and conditions of the Letter of Credit);

 

(v)        acting upon any instruction or request relative to a Letter of Credit or requested Letter of Credit that Issuing Bank in good faith believes to have been given by a Person authorized to give such instruction or request;

 

(vi)       any errors, omissions, interruptions or delays in transmission or delivery of any message, advice or document (regardless of how sent or transmitted) or for errors in interpretation of technical terms or in translation or any delay in giving or failing to give notice to Borrowers;

 

(vii)      any acts, omissions or fraud by, or the insolvency of, any beneficiary, any nominated person or entity or any other Person or any breach of contract between any beneficiary and any Borrower or any of the parties to the underlying transaction to which the Letter of Credit relates;

 

(viii)     assertion or waiver of any provision of the ISP or UCP that primarily benefits an issuer of a letter of credit, including any requirement that any Drawing Document be presented to it at a particular hour or place;

 

(ix)       payment to any paying or negotiating bank (designated or permitted by the terms of the applicable Letter of Credit) claiming that it rightfully honored or is entitled to reimbursement or indemnity under Standard Letter of Credit Practice applicable to it;

 

(x)        acting or failing to act as required or permitted under Standard Letter of Credit Practice applicable to where Issuing Bank has issued, confirmed, advised or negotiated such Letter of Credit, as the case may be;

 

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(xi)       honor of a presentation after the expiration date of any Letter of Credit notwithstanding that a presentation was made prior to such expiration date and dishonored by Issuing Bank if subsequently Issuing Bank or any court or other finder of fact determines such presentation should have been honored;

 

(xii)      dishonor of any presentation that does not strictly comply or that is fraudulent, forged or otherwise not entitled to honor; or

 

(xiii)     honor of a presentation that is subsequently determined by Issuing Bank to have been made in violation of international, federal, state or local restrictions on the transaction of business with certain prohibited Persons.

 

(k)           Borrowers shall pay immediately upon demand to Agent for the account of Issuing Bank as non-refundable fees, commissions, and charges (it being acknowledged and agreed that any charging of such fees, commissions, and charges to the Loan Account pursuant to the provisions of Section 2.6(d) shall be deemed to constitute a demand for payment thereof for the purposes of this Section 2.11(k)):  (i) a fronting fee which shall be imposed by Issuing Bank upon the issuance of each Letter of Credit of 0.25% per annum of the face amount thereof, plus  (ii) any and all other customary commissions, fees and charges then in effect imposed by, and any and all expenses incurred by, Issuing Bank, or by any adviser, confirming institution or entity or other nominated person, relating to Letters of Credit, at the time of issuance of any Letter of Credit and upon the occurrence of any other activity with respect to any Letter of Credit (including transfers, assignments of proceeds, amendments, drawings, renewals or cancellations).

 

(l)            If by reason of (y) any Change in Law, or (z) compliance by Issuing Bank or any other member of the Lender Group with any direction, request, or requirement (irrespective of whether having the force of law) of any Governmental Authority or monetary authority including, Regulation D of the Board of Governors as from time to time in effect (and any successor thereto):

 

(i)         any reserve, deposit, or similar requirement is or shall be imposed or modified in respect of any Letter of Credit issued or caused to be issued hereunder or hereby, or

 

(ii)        there shall be imposed on Issuing Bank or any other member of the Lender Group any other condition regarding any Letter of Credit,

 

and the result of the foregoing is to increase, directly or indirectly, the cost to Issuing Bank or any other member of the Lender Group of issuing, making, participating in, or maintaining any Letter of Credit or to reduce the amount receivable in respect thereof, then, and in any such case, Agent may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify Administrative Borrower, and Borrowers shall pay within 30 days after demand therefor, such amounts as Agent may specify to be necessary to compensate Issuing Bank or any other member of the Lender Group for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment in full thereof at the rate then applicable to Base Rate Loans hereunder; provided, that (A) Borrowers shall not be required to provide any compensation pursuant to this Section 2.11(l) for any such amounts incurred more than 180 days prior to the date on which the demand for payment of such amounts is first made to Borrowers, and (B) if an event or circumstance giving rise to such amounts is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.  The determination by Agent of any amount due pursuant to this Section 2.11(l), as set forth in a certificate setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest or demonstrable error, be final and conclusive and binding on all of the parties hereto.

 

(m)          Unless otherwise expressly agreed by Issuing Bank and Borrowers when a Letter of Credit is issued (including any such agreement applicable to an Existing Letter of Credit), (i) the rules of the ISP and the UCP shall apply to each standby Letter of Credit, and (ii) the rules of the UCP shall apply to each commercial Letter of Credit.

 

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(n)           In the event of a direct conflict between the provisions of this Section 2.11 and any provision contained in any Issuer Document, it is the intention of the parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in concert with each other.  In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this Section 2.11 shall control and govern.

 

2.12         LIBOR Option.

 

(a)           Interest and Interest Payment Dates.  In lieu of having interest charged at the rate based upon the Base Rate, Borrowers shall have the option, subject to Section 2.12(b) below (the “LIBOR Option”) to have interest on all or a portion of the Revolving Loans be charged (whether at the time when made (unless otherwise provided herein), upon conversion from a Base Rate Loan to a LIBOR Rate Loan, or upon continuation of a LIBOR Rate Loan as a LIBOR Rate Loan) at a rate of interest based upon the LIBOR Rate.  Interest on LIBOR Rate Loans shall be payable on the earliest of (i) the last day of the Interest Period applicable thereto, (ii) the date on which all or any portion of the Obligations are accelerated pursuant to the terms hereof, or (iii) the date on which this Agreement is terminated pursuant to the terms hereof.  On the last day of each applicable Interest Period, unless Borrowers properly have exercised the LIBOR Option with respect thereto, the interest rate applicable to such LIBOR Rate Loan automatically shall convert to the rate of interest then applicable to Base Rate Loans of the same type hereunder.  At any time that an Event of Default has occurred and is continuing, Borrowers no longer shall have the option to request that Revolving Loans bear interest at a rate based upon the LIBOR Rate.

 

(b)           LIBOR Election.

 

(i)         Borrowers may, at any time and from time to time, so long as no Event of Default has occurred and is continuing, elect to exercise the LIBOR Option by notifying Agent prior to 11:00 a.m. at least 3 Business Days prior to the commencement of the proposed Interest Period (the “LIBOR Deadline”).  Notice of Borrowers’ election of the LIBOR Option for a permitted portion of the Revolving Loans and an Interest Period pursuant to this Section shall be made by delivery to Agent of a LIBOR Notice received by Agent before the LIBOR Deadline, or by telephonic notice received by Agent before the LIBOR Deadline (to be confirmed by delivery to Agent of a LIBOR Notice received by Agent prior to 5:00 p.m. on the same day).  Promptly upon its receipt of each such LIBOR Notice, Agent shall provide a copy thereof to each of the affected Lenders.

 

(ii)        Each LIBOR Notice shall be irrevocable and binding on Borrowers.  In connection with each LIBOR Rate Loan, each Borrower shall indemnify, defend, and hold Agent and the Lenders harmless against any loss, cost, or expense actually incurred by Agent or any Lender as a result of (A) the payment of any principal of any LIBOR Rate Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (B) the conversion of any LIBOR Rate Loan other than on the last day of the Interest Period applicable thereto, or (C) the failure to borrow, convert, continue or prepay any LIBOR Rate Loan on the date specified in any LIBOR Notice delivered pursuant hereto (such losses, costs, or expenses, “Funding Losses”).  A certificate of Agent or a Lender delivered to Borrowers setting forth in reasonable detail any amount or amounts that Agent or such Lender is entitled to receive pursuant to this Section 2.12 shall be conclusive absent manifest error.  Borrowers shall pay such amount to Agent or the Lender, as applicable, within 30 days of the date of its receipt of such certificate.

 

(iii)       Unless Agent, in its sole discretion, agrees otherwise, Borrowers shall have not more than 5 LIBOR Rate Loans in effect at any given time.  Borrowers only may exercise the LIBOR Option for proposed LIBOR Rate Loans of at least $1,000,000.

 

(c)           Conversion.  Borrowers may convert LIBOR Rate Loans to Base Rate Loans at any time; provided, that in the event that LIBOR Rate Loans are converted or prepaid on any date that is not the last day of the Interest Period applicable thereto, including as a result of any prepayment through the required application by Agent of any payments or proceeds of Collateral in accordance with Section 2.4(b) or

 

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for any other reason, including early termination of the term of this Agreement or acceleration of all or any portion of the Obligations pursuant to the terms hereof, each Borrower shall indemnify, defend, and hold Agent and the Lenders and their Participants harmless against any and all Funding Losses in accordance with Section 2.12 (b)(ii).

 

(d)           Special Provisions Applicable to LIBOR Rate.

 

(i)         The LIBOR Rate may be adjusted by Agent with respect to any Lender on a prospective basis to take into account any additional or increased costs to such Lender of maintaining or obtaining any eurodollar deposits or increased costs, in each case, due to changes in applicable law occurring subsequent to the commencement of the then applicable Interest Period, including any Changes in Law (including any changes in tax laws (except changes of general applicability in corporate income tax laws) and changes in the reserve requirements imposed by the Board of Governors, which additional or increased costs would increase the cost of funding or maintaining loans bearing interest at the LIBOR Rate.  In any such event, the affected Lender shall give Administrative Borrower and Agent notice of such a determination and adjustment and Agent promptly shall transmit the notice to each other Lender and, upon its receipt of the notice from the affected Lender, Administrative Borrower may, by notice to such affected Lender (A) require such Lender to furnish to Administrative Borrower a statement setting forth in reasonable detail the basis for adjusting such LIBOR Rate and the method for determining the amount of such adjustment, or (B) repay the LIBOR Rate Loans of such Lender with respect to which such adjustment is made (together with any amounts due under Section 2.12(b)(ii)).

 

(ii)        In the event that any change in market conditions or any Change in Law shall at any time after the date hereof, in the reasonable opinion of any Lender, make it unlawful or impractical for such Lender to fund or maintain LIBOR Rate Loans or to continue such funding or maintaining, or to determine or charge interest rates at the LIBOR Rate, such Lender shall give notice of such changed circumstances to Agent and Administrative Borrower and Agent promptly shall transmit the notice to each other Lender and (y) in the case of any LIBOR Rate Loans of such Lender that are outstanding, the date specified in such Lender’s notice shall be deemed to be the last day of the Interest Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans of such Lender thereafter shall accrue interest at the rate then applicable to Base Rate Loans, and (z) Borrowers shall not be entitled to elect the LIBOR Option until such Lender determines that it would no longer be unlawful or impractical to do so.

 

(e)           No Requirement of Matched Funding.  Anything to the contrary contained herein notwithstanding, neither Agent, nor any Lender, nor any of their Participants, is required actually to acquire eurodollar deposits to fund or otherwise match fund any Obligation as to which interest accrues at the LIBOR Rate.

 

2.13         Capital Requirements.

 

(a)           If, after the date hereof, Issuing Bank or any Lender determines that (i) any Change in Law regarding capital or reserve requirements for banks or bank holding companies, or (ii) compliance by Issuing Bank or such Lender or their respective parent bank holding companies with any guideline, request or directive of any Governmental Authority regarding capital adequacy (whether or not having the force of law), has the effect of reducing the return on Issuing Bank’s, such Lender’s, or such holding companies’ capital as a consequence of Issuing Bank’s or such Lender’s commitments hereunder to a level below that which Issuing Bank, such Lender, or such holding companies could have achieved but for such Change in Law or compliance (taking into consideration Issuing Bank’s, such Lender’s, or such holding companies’ then existing policies with respect to capital adequacy and assuming the full utilization of such entity’s capital) by any amount deemed by Issuing Bank or such Lender to be material, then Issuing Bank or such Lender may notify Administrative Borrower and Agent thereof.  Following receipt of such notice, Borrowers agree to pay Issuing Bank or such Lender on demand the amount of such reduction of return of capital as and when such reduction is determined, payable within 30 days after presentation by Issuing Bank or such Lender of a statement in the amount and setting forth in reasonable detail Issuing Bank or such Lender’s calculation thereof and the

 

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assumptions upon which such calculation was based (which statement shall be deemed true and correct absent manifest error).  In determining such amount, Issuing Bank or such Lender may use any reasonable averaging and attribution methods.  Failure or delay on the part of Issuing Bank or any Lender to demand compensation pursuant to this Section shall not constitute a waiver of Issuing Bank’s or such Lender’s right to demand such compensation; provided that Borrowers shall not be required to compensate Issuing Bank or a Lender pursuant to this Section for any reductions in return incurred more than 180 days prior to the date that Issuing Bank or such Lender notifies Administrative Borrower of such Change in Law giving rise to such reductions and of such Lender’s intention to claim compensation therefor; provided  further that if such claim arises by reason of any Change in Law that is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

 

(b)           If Issuing Bank or any Lender requests additional or increased costs referred to in Section 2.11(l), Section 2.12(d)(i) or amounts under Section 2.13(a) or sends a notice under Section 2.12(d)(ii) relative to changed circumstances (such Issuing Bank or Lender, an “Affected Lender”), then such Affected Lender shall use reasonable efforts to promptly designate a different one of its lending offices or to assign its rights and obligations hereunder to another of its offices or branches, if (i) in the reasonable judgment of such Affected Lender, such designation or assignment would eliminate or reduce amounts payable pursuant to Section 2.11(l), Section 2.12(d)(i) or Section 2.13(a), as applicable, or would eliminate the illegality or impracticality of funding or maintaining LIBOR Rate Loans and (ii) in the reasonable judgment of such Affected Lender, such designation or assignment would not subject it to any material unreimbursed cost or expense and would not otherwise be materially disadvantageous to it.  Borrowers agree to pay all reasonable out-of-pocket costs and expenses incurred by such Affected Lender in connection with any such designation or assignment.  If, after such reasonable efforts, such Affected Lender does not so designate a different one of its lending offices or assign its rights to another of its offices or branches so as to eliminate Borrowers’ obligation to pay any future amounts to such Affected Lender pursuant to Section 2.11(l), Section 2.12(d)(i) or Section 2.13(a), as applicable, or to enable Borrowers to obtain LIBOR Rate Loans, then Borrowers (without prejudice to any amounts then due to such Affected Lender under Section 2.11(l), Section 2.12(d)(i) or Section 2.13(a), as applicable) may, unless prior to the effective date of any such assignment the Affected Lender withdraws its request for such additional amounts under Section 2.11(l), Section 2.12(d)(i) or Section 2.13(a), as applicable, or indicates that it is no longer unlawful or impractical to fund or maintain LIBOR Rate Loans, may designate a different Issuing Bank or substitute a Lender, in each case, reasonably acceptable to Agent to purchase the Obligations owed to such Affected Lender and such Affected Lender’s commitments hereunder (a “Replacement Lender”), and if such Replacement Lender agrees to such purchase, such Affected Lender shall assign to the Replacement Lender its Obligations and commitments, and upon such purchase by the Replacement Lender, which such Replacement Lender shall be deemed to be “Issuing Bank” or a “Lender” (as the case may be) for purposes of this Agreement and such Affected Lender shall cease to be “Issuing Bank” or a “Lender” (as the case may be) for purposes of this Agreement.

 

(c)           Notwithstanding anything herein to the contrary, the protection of Sections 2.11(l), 2.12(d), and 2.13 shall be available to Issuing Bank and each Lender (as applicable) regardless of any possible contention of the invalidity or inapplicability of the law, rule, regulation, judicial ruling, judgment, guideline, treaty or other change or condition which shall have occurred or been imposed, so long as it shall be customary for issuing banks or lenders affected thereby to comply therewith.  Notwithstanding any other provision herein, neither Issuing Bank nor any Lender shall demand compensation pursuant to this Section 2.13 if it shall not at the time be the general policy or practice of Issuing Bank or such Lender (as the case may be) to demand such compensation in similar circumstances under comparable provisions of other credit agreements, if any.

 

2.14         Accordion.

 

(a)           At any time during the period from and after the Closing Date through but excluding the Maturity Date, at the option of Borrowers (but subject to the conditions set forth in clause (b) below), the Commitments and the Maximum Revolver Amount may be increased by an amount in the aggregate for all

 

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such increases of the Commitments and the Maximum Revolver Amount not to exceed the Available Increase Amount (each such increase, an “Increase”).  Agent shall invite each Lender to increase its Commitments (it being understood that no Lender shall be obligated to increase its Commitments) in connection with a proposed Increase at the interest margin proposed by Borrowers, and if sufficient Lenders do not agree to increase their Commitments in connection with such proposed Increase, then Agent or Borrowers may invite any prospective lender who is reasonably satisfactory to Agent and Borrowers to become a Lender in connection with a proposed Increase.  Any Increase shall be in an amount of at least $5,000,000 and integral multiples of $5,000,000 in excess thereof.  In no event may the Commitments and the Maximum Revolver Amount be increased pursuant to this Section 2.14 on more than 2 occasions in the aggregate for all such Increases.  Additionally, for the avoidance of doubt, it is understood and agreed that in no event shall the aggregate amount of the Increases to the Commitments exceed $20,000,000.

 

(b)           Each of the following shall be conditions precedent to any Increase of the Commitments and the Maximum Revolver Amount in connection therewith:

 

(i)         Agent or Borrowers have obtained the commitment of one or more Lenders (or other prospective lenders) reasonably satisfactory to Agent and Borrowers to provide the applicable Increase and any such Lenders (or prospective lenders), Borrowers, and Agent have signed a joinder agreement to this Agreement (an “Increase Joinder”), in form and substance reasonably satisfactory to Agent, to which such Lenders (or prospective lenders), Borrowers, and Agent are party,

 

(ii)        each of the conditions precedent set forth in Section 3.2 are satisfied,

 

(iii)       Agent shall have received an acknowledgement and agreement, in form and substance satisfactory to Agent, executed by Term Loan Agent and certifying that the applicable Increase (A) falls within the ABL Cap (as such term is defined in the Intercreditor Agreement), and (B) constitutes Indebtedness permitted under the Term Loan Agreement and is being incurred by Borrowers in compliance with the terms and conditions of the Term Loan Agreement applicable thereto,

 

(iv)       Agent shall be satisfied, in its sole discretion, that the applicable Increase (A) falls within the ABL Cap (as such term is defined in the Intercreditor Agreement) and (B) constitutes Indebtedness permitted under the Term Loan Agreement and is being incurred by Borrower in compliance with the terms and conditions of the Term Loan Agreement applicable thereto, and

 

(v)        Agent shall have received duly executed amendments to each of the Mortgages to reflect the Increase to the Commitments, together with date down endorsements with respect to each of the title insurance policies relating to such Mortgages, in each case, in form and substance reasonably satisfactory to Agent.

 

Borrowers shall have reached agreement with the Lenders (or prospective lenders) agreeing to the increased Commitments with respect to the interest margins applicable to the Revolving Loans to be made pursuant to the increased Commitments (which interest margins may be higher than or equal to the interest margins set forth in this Agreement immediately prior to the date of the increased Commitments (the date of the effectiveness of the increased Commitments and the Maximum Revolver Amount, the “Increase Date”)).  Any Increase Joinder may, with the consent of Agent, Borrowers and the Lenders or prospective lenders agreeing to the proposed Increase, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate to effectuate the provisions of this Section 2.14 (including any amendment necessary to effectuate the interest margins applicable for the Revolving Loans to be made pursuant to the increased Commitments).  Anything to the contrary contained herein notwithstanding, if the interest margin that is to be applicable to the Revolving Loans to be made pursuant to the increased Revolver Commitments are higher than the interest margin applicable to the Revolving Loans hereunder immediately prior to the applicable Increase Date (the amount by which the interest margin is higher, the “Excess”), then the interest margin applicable to the Revolving Loans immediately prior to the Increase Date shall be increased by the amount of

 

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the Excess, effective on the applicable Increase Date, and without the necessity of any action by any party hereto.

 

(c)           Unless otherwise specifically provided herein, all references in this Agreement and any other Loan Document to Revolving Loans shall be deemed, unless the context otherwise requires, to include Revolving Loans made pursuant to the increased Commitments and Maximum Revolver Amount pursuant to this Section 2.14.

 

(d)           Each of the Lenders having a Commitment prior to the Increase Date (the “Pre-Increase Lenders”) shall assign to any Lender which is acquiring a new or additional Commitment on the Increase Date (the “Post-Increase Lenders”), and such Post-Increase Lenders shall purchase from each Pre-Increase Lender, at the principal amount thereof, such interests in the Revolving Loans and participation interests in Letters of Credit on such Increase Date as shall be necessary in order that, after giving effect to all such assignments and purchases, such Revolving Loans and participation interests in Letters of Credit will be held by Pre-Increase Lenders and Post-Increase Lenders ratably in accordance with their Pro Rata Share after giving effect to such increased Commitments.

 

(e)           The Revolving Loans, Commitments, and Maximum Revolver Amount established pursuant to this Section 2.14 shall constitute Revolving Loans, Commitments, and Maximum Revolver Amount under, and shall be entitled to all the benefits afforded by, this Agreement and the other Loan Documents, and shall, without limiting the foregoing, benefit equally and ratably from any guarantees and the security interests created by the Loan Documents.  Borrowers shall take any actions reasonably required by Agent to ensure and demonstrate that the Liens and security interests granted by the Loan Documents continue to be perfected under the Code or otherwise after giving effect to the establishment of any such new Commitments and Maximum Revolver Amount.

 

2.15         Joint and Several Liability of Borrowers.

 

(a)           Each Borrower is accepting joint and several liability hereunder and under the other Loan Documents in consideration of the financial accommodations to be provided by the Lender Group under this Agreement and by the Bank Product Providers under the Bank Product Agreements, for the mutual benefit, directly and indirectly, of each Borrower and in consideration of the undertakings of the other Borrowers to accept joint and several liability for the Obligations.

 

(b)           Each Borrower, jointly and severally, hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Borrowers, with respect to the payment and performance of all of the Obligations (including any Obligations arising under this Section 2.15), it being the intention of the parties hereto that all the Obligations shall be the joint and several obligations of each Borrower without preferences or distinction among them.

 

(c)           If and to the extent that any Borrower shall fail to make any payment with respect to any of the Obligations as and when due or to perform any of the Obligations in accordance with the terms thereof, then in each such event the other Borrowers will make such payment with respect to, or perform, such Obligation until such time as all of the Obligations are paid in full.

 

(d)           The Obligations of each Borrower under the provisions of this Section 2.15 constitute the absolute and unconditional, full recourse Obligations of each Borrower enforceable against each Borrower to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of the provisions of this Agreement (other than this Section 2.15(d)) or any other circumstances whatsoever.

 

(e)           Except as otherwise expressly provided in this Agreement, each Borrower hereby waives notice of acceptance of its joint and several liability, notice of any Revolving Loan or Letters of Credit issued under or pursuant to this Agreement, notice of the occurrence of any Default, Event of Default, or of any demand for any payment under this Agreement, notice of any action at any time taken or omitted by Agent

 

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or Lenders under or in respect of any of the Obligations, any requirement of diligence or to mitigate damages and, generally, to the extent permitted by applicable law, all demands, notices and other formalities of every kind in connection with this Agreement (except as otherwise provided in this Agreement).  Each Borrower hereby assents to, and waives notice of, any extension or postponement of the time for the payment of any of the Obligations, the acceptance of any payment of any of the Obligations, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by Agent, any other member of the Lenders Group or any Bank Product Provider at any time or times in respect of any default by any Borrower in the performance or satisfaction of any term, covenant, condition or provision of this Agreement or any other Loan Document, any and all other indulgences whatsoever by Agent or Lenders in respect of any of the Obligations, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of the Obligations or the addition, substitution or release, in whole or in part, of any Borrower.  Without limiting the generality of the foregoing, each Borrower assents to any other action or delay in acting or failure to act on the part of any Agent, any other member of the Lender Group or any Bank Product Provider with respect to the failure by any Borrower to comply with any of its respective Obligations, including, without limitation, any failure strictly or diligently to assert any right or to pursue any remedy or to comply fully with applicable laws or regulations thereunder, which might, but for the provisions of this Section 2.15 afford grounds for terminating, discharging or relieving any Borrower, in whole or in part, from any of its Obligations under this Section 2.15, it being the intention of each Borrower that, so long as any of the Obligations hereunder remain unsatisfied, the Obligations of each Borrower under this Section 2.15 shall not be discharged except by performance and then only to the extent of such performance.  The Obligations of each Borrower under this Section 2.15 shall not be diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to any other Borrower or any Agent, any other member of the Lender Group or any Bank Product Provider.

 

(f)            Each Borrower represents and warrants to the Lender Group and the Bank Product Providers that such Borrower is currently informed of the financial condition of Borrowers and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations.  Each Borrower further represents and warrants to the Lender Group and the Bank Product Providers that such Borrower has read and understands the terms and conditions of the Loan Documents.  Each Borrower hereby covenants that such Borrower will continue to keep informed of Borrowers’ financial condition and of all other circumstances which bear upon the risk of nonpayment or nonperformance of the Obligations.

 

(g)           The provisions of this Section 2.15 are made for the benefit of Agent, each other member of the Lender Group, each Bank Product Provider, and their respective successors and assigns, and may be enforced by it or them from time to time against any or all Borrowers as often as occasion therefor may arise and without requirement on the part of Agent, any other member of the Lender Group, any Bank Product Provider, or any of their successors or assigns first to marshal any of its or their claims or to exercise any of its or their rights against any Borrower or to exhaust any remedies available to it or them against any Borrower or to resort to any other source or means of obtaining payment of any of the Obligations hereunder or to elect any other remedy.  The provisions of this Section 2.15 shall remain in effect until all of the Obligations shall have been paid in full or otherwise fully satisfied.  If at any time, any payment, or any part thereof, made in respect of any of the Obligations, is rescinded or must otherwise be restored or returned by Agent or any Lender upon the insolvency, bankruptcy or reorganization of any Borrower, or otherwise, the provisions of this Section 2.15 will forthwith be reinstated in effect, as though such payment had not been made.

 

(h)           Each Borrower hereby agrees that it will not enforce any of its rights of contribution or subrogation against any other Borrower with respect to any liability incurred by it hereunder or under any of the other Loan Documents, any payments made by it to Agent, any other member of the Lender Group or any Bank Product Provider with respect to any of the Obligations or any collateral security therefor until such time as all of the Obligations have been paid in full in cash.  Any claim which any Borrower may have against any other Borrower with respect to any payments to Agent, any other member of the Lender Group or any Bank Product Provider hereunder, under the other Loan Documents or under any of the Bank Product Agreements

 

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are hereby expressly made subordinate and junior in right of payment, without limitation as to any increases in the Obligations arising hereunder or thereunder, to the prior payment in full in cash of the Obligations and, in the event of any insolvency, bankruptcy, receivership, liquidation, reorganization or other similar proceeding under the laws of any jurisdiction relating to any Borrower, its debts or its assets, whether voluntary or involuntary, all such Obligations shall be paid in full in cash before any payment or distribution of any character, whether in cash, securities or other property, shall be made to any other Borrower therefor.

 

(i)            Each Borrower hereby agrees that after the occurrence and during the continuance of any Default or Event of Default, such Borrower will not demand, sue for or otherwise attempt to collect any indebtedness of any other Borrower owing to such Borrower until the Obligations shall have been paid in full in cash.  If, notwithstanding the foregoing sentence, such Borrower shall collect, enforce or receive any amounts in respect of such indebtedness, such amounts shall be collected, enforced and received by such Borrower as trustee for Agent, and such Borrower shall deliver any such amounts to Agent for application to the Obligations in accordance with Section 2.4(b).

 

3.             CONDITIONS; TERM OF AGREEMENT.

 

3.1           Conditions Precedent to the Initial Extension of Credit.  The effectiveness of this Agreement and the obligation of each Lender to make its initial extension of credit provided for hereunder are each subject to the fulfillment, to the satisfaction of Agent and each Lender, of each of the conditions precedent set forth on Schedule 3.1 (the making of such initial extension of credit by a Lender being conclusively deemed to be its satisfaction or waiver of the conditions precedent).

 

3.2         Conditions Precedent to all Extensions of Credit.  The obligation of the Lender Group (or any member thereof) to make any Revolving Loans hereunder (or to extend any other credit hereunder) at any time shall be subject to the following conditions precedent:

 

(a)           the representations and warranties of Parent or its Subsidiaries contained in this Agreement or in the other Loan Documents shall be true, correct and complete in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date of such extension of credit, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true, correct and complete in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date);

 

(b)           no Default or Event of Default shall have occurred and be continuing on the date of such extension of credit, nor shall either result from the making thereof; and

 

(c)           Borrowers shall be in compliance with the Excess Availability Requirement after giving pro forma effect to such Revolving Loan or other extension of credit.

 

3.3           Maturity.  This Agreement shall continue in full force and effect for a term ending on the Maturity Date.  The foregoing notwithstanding, the Lender Group, upon the election of the Required Lenders, shall have the right to terminate its obligations under this Agreement immediately and without notice upon the occurrence and during the continuation of an Event of Default.

 

3.4           Effect of Maturity.  On the Maturity Date, all commitments of the Lender Group to provide additional credit hereunder shall automatically be terminated and all of the Obligations immediately shall become due and payable without notice or demand and Borrowers shall be required to repay all of the Obligations in full.  No termination of the obligations of the Lender Group (other than payment in full of the Obligations and termination of the Commitments) shall relieve or discharge any Loan Party of its duties, obligations, or covenants hereunder or under any other Loan Document and Agent’s Liens in the Collateral shall continue to secure the Obligations and shall remain in effect until all Obligations have been paid in full

 

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and the Commitments have been terminated.  When all of the Obligations have been paid in full and the Lender Group’s obligations to provide additional credit under the Loan Documents have been terminated irrevocably, Agent will, at Borrowers’ sole expense, execute and deliver any termination statements, Lien releases, discharges of security interests, and other similar discharge or release documents (and, if applicable, in recordable form) as are reasonably necessary to release, as of record, Agent’s Liens and all notices of security interests and liens previously filed by Agent.

 

3.5           Early Termination by Borrowers.  Borrowers have the option, at any time upon 10 Business Days prior written notice to Agent, to terminate this Agreement and terminate the Commitments hereunder by repaying to Agent all of the Obligations in full.  The foregoing notwithstanding, (a) Borrowers may rescind termination notices relative to proposed payments in full of the Obligations with the proceeds of third party Indebtedness if the closing for such issuance or incurrence does not happen on or before the date of the proposed termination (in which case, a new notice shall be required to be sent in connection with any subsequent termination), and (b) Borrowers may extend the date of termination at any time with the consent of Agent (which consent shall not be unreasonably withheld or delayed).

 

4.             REPRESENTATIONS AND WARRANTIES.

 

In order to induce the Lender Group to enter into this Agreement, each Borrower makes the following representations and warranties to the Lender Group which shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the Closing Date, and shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the date of the making of each Revolving Loan (or other extension of credit) made thereafter, as though made on and as of the date of such Revolving Loan (or other extension of credit) (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true, correct and complete in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date) and such representations and warranties shall survive the execution and delivery of this Agreement:

 

4.1           Due Organization and Qualification; Subsidiaries.

 

(a)           Each Loan Party (i) is duly organized and existing and in good standing under the laws of the jurisdiction of its organization, (ii) is qualified to do business in any state where the failure to be so qualified could reasonably be expected to result in a Material Adverse Effect, and (iii) has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into the Loan Documents to which it is a party and to carry out the transactions contemplated thereby.

 

(b)           Set forth on Schedule 4.1(b) (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement) is a complete and accurate description of the authorized Equity Interest of Parent, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding.  Other than as described on Schedule 4.1(b), there are no subscriptions, options, warrants, or calls relating to any shares of Parent’s Equity Interest, including any right of conversion or exchange under any outstanding security or other instrument.  No Borrower is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its Equity Interest or any security convertible into or exchangeable for any of its Equity Interest.

 

(c)           Set forth on Schedule 4.1(c) (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement), is a complete and accurate list of Parent’s direct and indirect Subsidiaries, showing: (i) the number of shares of each class of common and preferred Equity Interests authorized for each of such Subsidiaries, and (ii) the number and the percentage of

 

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the outstanding shares of each such class owned directly or indirectly by Parent.  All of the outstanding Equity Interest of each Subsidiary of Parent has been validly issued and is fully paid and non-assessable.

 

(d)           Except as set forth on Schedule 4.1(c), there are no subscriptions, options, warrants, or calls relating to any shares of Parent’s Subsidiaries’ Equity Interest, including any right of conversion or exchange under any outstanding security or other instrument.

 

4.2           Due Authorization; No Conflict.

 

(a)           As to each Loan Party, the execution, delivery, and performance by such Loan Party of the Loan Documents to which it is a party have been duly authorized by all necessary action on the part of such Loan Party.

 

(b)           As to each Loan Party, the execution, delivery, and performance by such Loan Party of the Loan Documents to which it is a party do not and will not (i) violate any material provision of federal, state, or local law or regulation applicable to any Loan Party or its Subsidiaries, the Governing Documents of any Loan Party or its Subsidiaries, or any order, judgment, or decree of any court or other Governmental Authority binding on any Loan Party or its Subsidiaries, (ii) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any material agreement of any Loan Party or its Subsidiaries where any such conflict, breach or default could individually or in the aggregate reasonably be expected to have a Material Adverse Effect, (iii) result in or require the creation or imposition of any Lien of any nature whatsoever upon any assets of any Loan Party, other than Permitted Liens, or (iv) require any approval of any holder of Equity Interest of a Loan Party or any approval or consent of any Person under any material agreement of any Loan Party, other than consents or approvals that have been obtained and that are still in force and effect and except, in the case of material agreements, for consents or approvals, the failure to obtain could not individually or in the aggregate reasonably be expected to cause a Material Adverse Effect.

 

4.3           Governmental Consents.  The execution, delivery, and performance by each Loan Party of the Loan Documents to which such Loan Party is a party and the consummation of the transactions contemplated by the Loan Documents do not and will not require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority, other than registrations, consents, approvals, notices, or other actions that have been obtained and that are still in force and effect and except for filings and recordings with respect to the Collateral to be made, or otherwise delivered to Agent for filing or recordation, as of the Closing Date.

 

4.4           Binding Obligations; Perfected Liens.

 

(a)           Each Loan Document has been duly executed and delivered by each Loan Party that is a party thereto and is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.

 

(b)           Agent’s Liens are validly created, perfected (other than (i) in respect of motor vehicles that are subject to a certificate of title, (ii) money, (iii) letter-of-credit rights (other than supporting obligations), (iv) commercial tort claims (other than those that, by the terms of the Guaranty and Security Agreement, are required to be perfected), (v) any Deposit Accounts and Securities Accounts not subject to a Control Agreement as permitted by Section 6.10, and subject only to the filing of financing statements, and the recordation of the Mortgages, in each case, in the appropriate filing offices, and (vi) assets for which the perfection steps set forth in Sections 7(a) and 7(b) of the Guaranty and Security Agreement are not required to be performed by such Sections), and first priority Liens, subject only to (y) Permitted Liens which are non-consensual Permitted Liens, permitted purchase money Liens, or the interests of lessors under Capital Leases

 

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and (z) the Liens granted under the Term Loan Documents that are expressly permitted under the terms of the Intercreditor Agreement to be first priority Liens.

 

4.5           Title to Assets; No Encumbrances.  Each of the Loan Parties and its Subsidiaries has (a) good, sufficient and legal title to (in the case of fee interests in Real Property), (b) valid leasehold interests in (in the case of leasehold interests in real or personal property), and (c) good and marketable title to (in the case of all other personal property), all of their respective assets reflected in their most recent financial statements delivered pursuant to Section 5.1, in each case except for assets disposed of since the date of such financial statements to the extent permitted hereby.  All of such assets are free and clear of Liens except for Permitted Liens.

 

4.6           Jurisdiction of Organization; Location of Chief Executive Office; Organizational Identification Number; Commercial Tort Claims.

 

(a)           The name (within the meaning of Section 9-503 of the Code) and jurisdiction of organization of each Loan Party and each of its Subsidiaries is set forth on Schedule 4.6(a) (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement).

 

(b)           The chief executive office of each Loan Party and each of its Subsidiaries is located at the address indicated on Schedule 4.6(b) (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement).

 

(c)           Each Loan Party’s and each of its Subsidiaries’ tax identification numbers and organizational identification numbers, if any, are identified on Schedule 4.6(c) (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement).

 

(d)           As of the Closing Date, no Loan Party and no Subsidiary of a Loan Party holds any commercial tort claims that exceed $1,000,000 in amount, except as set forth on Schedule 4.6(d).

 

4.7           Litigation.

 

(a)           There are no actions, suits, or proceedings pending or, to the knowledge of Borrowers, after due inquiry, threatened in writing against a Loan Party or any of its Subsidiaries that, (i) other than in the case of the Coop Litigation, either individually or in the aggregate could reasonably be expected to result in a Material Adverse Effect, and (ii) in the case of the Coop Litigation, could reasonably be expected to have a Material Adverse Effect other than in respect of the Term Loan Primary Collateral (as such term is defined in the Intercreditor Agreement).

 

(b)           Schedule 4.7(b) sets forth a complete and accurate description, with respect to each of the actions, suits, or proceedings with asserted liabilities in excess of, or that could reasonably be expected to result in liabilities in excess of, $1,000,000 that, as of the Closing Date, is pending or, to the knowledge of Borrowers, threatened against a Loan Party or any of its Subsidiaries, of (i) the parties to such actions, suits, or proceedings, (ii) the nature of the dispute that is the subject of such actions, suits, or proceedings, (iii) the procedural status, as of the Closing Date, with respect to such actions, suits, or proceedings, and (iv) whether any liability of the Loan Parties’ and their Subsidiaries in connection with such actions, suits, or proceedings is covered by insurance.

 

4.8           Compliance with Laws.  No Loan Party nor any of its Subsidiaries (a) is in violation of any applicable laws, rules, regulations, executive orders, or codes (except with respect to Environmental Laws, compliance with which is addressed in Section 4.12) that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect, or (b) is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality,

 

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domestic or foreign, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

 

4.9           No Material Adverse Effect.  All historical financial statements relating to the Loan Parties and their Subsidiaries that have been delivered by any Borrower to Agent have been prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the lack of footnotes and being subject to year-end audit adjustments) and present fairly in all material respects, the Loan Parties’ and their Subsidiaries’ consolidated financial condition as of the date thereof and results of operations for the period then ended.  Since August 17, 2012, no event, circumstance, or change has occurred that has or could reasonably be expected to result in a Material Adverse Effect with respect to the Loan Parties and their Subsidiaries.

 

4.10         Solvency.

 

(a)           Each Loan Party is Solvent.

 

(b)           No transfer of property is being made by any Loan Party and no obligation is being incurred by any Loan Party in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of such Loan Party.

 

4.11         Employee Benefits.  Except as set forth on Schedule 4.11, no Loan Party, none of their Subsidiaries, nor any of their ERISA Affiliates maintains or contributes to any Benefit Plan.

 

4.12         Environmental Condition.  Except as set forth on Schedule 4.12, (a) to Borrowers’ knowledge after due inquiry, no Loan Party’s nor any of its Subsidiaries’ properties or assets is in violation, in any material respect, of any applicable Environmental Law, (b) Borrowers or their Subsidiaries possess all material authorizations (including without limitation all permits, approvals, licenses, filings, or registrations) from Governmental Authorities required under Environmental Law to conduct their ethanol production operations, such authorizations are in full force and effect, and Borrowers or their Subsidiaries are operating in material compliance with all such authorizations, (c) to Borrowers’ knowledge, after due inquiry, no Releases of Hazardous Materials have occurred at any of Loan Party’s nor any of its Subsidiaries’ properties or assets that would necessitate Remedial Action under any Environmental Laws, (d) to Borrowers’ knowledge, after due inquiry, no Loan Party nor any of its Subsidiaries has ever received notice regarding any actual or alleged violation of or non-compliance with Environmental Laws, (e) no Loan Party nor any of its Subsidiaries has received notice that a Lien arising under any Environmental Law has attached to any revenues or to any Real Property owned or operated by a Loan Party or its Subsidiaries, and (f) no Loan Party nor any of its Subsidiaries nor any of their respective facilities or operations is subject to any obligation under any written order, consent decree, or settlement agreement with any Person relating to any Environmental Law or Environmental Liability that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

 

4.13         Intellectual Property.  Each Loan Party and its Subsidiaries own, or hold licenses in, all trademarks, trade names, copyrights, patents, and licenses that are necessary to the conduct of its business as currently conducted, and attached hereto as Schedule 4.13 (as updated from time to time) is a true, correct, and complete listing of all material trademarks, trade names, copyrights, patents, and licenses as to which Parent or one of its Subsidiaries is the owner or is an exclusive licensee; provided, that Borrowers may amend Schedule 4.13 to add additional intellectual property so long as such amendment occurs by written notice to Agent not less than 30 days after the date on which the applicable Loan Party or its Subsidiary acquires any such property after the Closing Date at the time that Parent provides its Compliance Certificate pursuant to Section 5.1.

 

4.14         Deposit Accounts, Securities Accounts and Commodity Accounts.  Set forth on Schedule 4.14 (as updated pursuant to the provisions of the Guaranty and Security Agreement from time to

 

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time) is a listing of all of the Loan Parties’ and their Subsidiaries’ Deposit Accounts, Securities Accounts and Commodity Accounts, including, with respect to each bank, securities intermediary or commodity intermediary (a) the name and address of such Person, and (b) the account numbers of the Deposit Accounts, Securities Accounts or Commodity Accounts maintained with such Person.

 

4.15         Complete Disclosure.  All written factual information taken as a whole (other than forward-looking information and projections and information of a general economic nature and general information about Borrowers’ industry) furnished by or on behalf of a Loan Party or its Subsidiaries in writing to Agent or any Lender (including all information contained in the Schedules hereto or in the other Loan Documents) for purposes of or in connection with this Agreement or the other Loan Documents, and all other such factual information taken as a whole (other than forward-looking information and projections and information of a general economic nature and general information about Borrowers’ industry) hereafter furnished by or on behalf of a Loan Party or its Subsidiaries in writing to Agent or any Lender will be, true and accurate, in all material respects, on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided.  The Projections delivered to Agent on August 16, 2012 represent, and as of the date on which any other Projections are delivered to Agent, such additional Projections represent, Borrowers’ good faith estimate, on the date such Projections are delivered, of the Loan Parties’ and their Subsidiaries’ future performance for the periods covered thereby based upon assumptions believed by Borrowers to be reasonable at the time of the delivery thereof to Agent (it being understood that such Projections are subject to significant uncertainties and contingencies, many of which are beyond the control of the Loan Parties and their Subsidiaries, and no assurances can be given that such Projections will be realized, and although reflecting Borrowers’ good faith estimate, projections or forecasts based on methods and assumptions which Borrowers believed to be reasonable at the time such Projections were prepared, are not to be viewed as facts, and that actual results during the period or periods covered by the Projections may differ materially from projected or estimated results).

 

4.16         Patriot Act.  To the extent applicable, each Loan Party is in compliance, in all material respects, with the (a) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (b) Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001) (the “Patriot Act”).  No part of the proceeds of the loans made hereunder will be used by any Loan Party or any of their Affiliates, 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.

 

4.17         Indebtedness.  Set forth on Schedule 4.17 is a true and complete list of all Indebtedness of each Loan Party and each of its Subsidiaries outstanding immediately prior to the Closing Date that is to remain outstanding immediately after giving effect to the closing hereunder on the Closing Date and such Schedule accurately sets forth the aggregate principal amount of such Indebtedness as of the Closing Date.

 

4.18         Payment of Taxes.  Except as otherwise permitted under Section 5.5, all tax returns and reports of each Loan Party and its Subsidiaries required to be filed by any of them have been timely filed, and all taxes shown on such tax returns to be due and payable and all assessments, fees and other governmental charges upon a Loan Party and its Subsidiaries and upon their respective assets, income, businesses and franchises that are due and payable have been paid when due and payable.  Each Loan Party and each of its Subsidiaries have made adequate provision in accordance with GAAP for all taxes not yet due and payable.  No Borrower knows of any proposed tax assessment against a Loan Party or any of its Subsidiaries that is not being actively contested by such Loan Party or such Subsidiary diligently, in good faith, and by appropriate

 

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proceedings; provided such reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor.

 

4.19         Margin Stock.  No Loan Party nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock.  No part of the proceeds of the loans made to Borrowers will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock or for any purpose that violates the provisions of Regulation T, U or X of the Board of Governors of the United States Federal Reserve.

 

4.20         Governmental Regulation.  No Loan Party nor any of its Subsidiaries is subject to regulation under the Federal Power Act or the Investment Company Act of 1940 or under any other federal or state statute or regulation which may limit its ability to incur Indebtedness or which may otherwise render all or any portion of the Obligations unenforceable.  No Loan Party nor any of its Subsidiaries is a “registered investment company” or a company “controlled” by a “registered investment company” or a “principal underwriter” of a “registered investment company” as such terms are defined in the Investment Company Act of 1940.  None of the Borrowers are in the business of producing electric power for delivery to a transmission grid or natural gas to be shipped by interstate pipeline.

 

4.21         OFAC.  No Loan Party nor any of its Subsidiaries is in violation of any of the country or list based economic and trade sanctions administered and enforced by OFAC.  No Loan Party nor any of its Subsidiaries (a) is a Sanctioned Person or a Sanctioned Entity, (b) has its assets located in Sanctioned Entities, or (c) derives revenues from investments in, or transactions with Sanctioned Persons or Sanctioned Entities.  No proceeds of any loan made hereunder will be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity.

 

4.22         Employee and Labor Matters.  There is (i) no unfair labor practice complaint pending or, to the knowledge of Borrowers, threatened against Parent or its Subsidiaries before any Governmental Authority and no grievance or arbitration proceeding pending or threatened against Parent or its Subsidiaries which arises out of or under any collective bargaining agreement and that could reasonably be expected to result in a material liability, (ii) no strike, labor dispute, slowdown, stoppage or similar action or grievance pending or threatened in writing against Parent or its Subsidiaries that could reasonably be expected to result in a material liability, or (iii) to the knowledge of Borrowers no union representation question existing with respect to the employees of Parent or its Subsidiaries and no union organizing activity taking place with respect to any of the employees of Parent or its Subsidiaries.  None of Parent or its Subsidiaries has incurred any liability or obligation under the Worker Adjustment and Retraining Notification Act or similar state law, which remains unpaid or unsatisfied.  The hours worked and payments made to employees of Parent or its Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable legal requirements, except to the extent such violations could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.  All material payments due from Parent or its Subsidiaries on account of wages and employee health and welfare insurance and other benefits have been paid or accrued as a liability on the books of Parent, except where the failure to do so could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

4.23         Parent as a Holding Company.  Parent is a holding company and does not have any material liabilities (other than (a) liabilities arising under the Loan Documents and the Term Loan Documents, (b) de minimis liabilities, and (c) liabilities arising out of agreements listed on Schedule 4.17 to which Parent is a party), own any material assets (other than de minimis assets and the Equity Interest of the other Borrowers) or engage in any operations or business (other than in connection with its ownership of the other Borrowers and its rights and obligations under the Loan Documents and the Term Loan Documents).

 

4.24         Leases.  Each Loan Party and its Subsidiaries enjoy peaceful and undisturbed possession under all leases material to their business and to which they are parties or under which they are

 

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operating, and, subject to Permitted Protests, all of such material leases are valid and subsisting and no material default by the applicable Loan Party or its Subsidiaries exists under any of them.

 

4.25         Eligible Accounts.  As to each Account that is identified by any Borrower as an Eligible Account in a Borrowing Base Certificate submitted to Agent, such Account is (a) a bona fide existing payment obligation of the applicable Account Debtor created by the sale and delivery of Inventory or the rendition of services to such Account Debtor in the ordinary course of Borrowers’ business, (b) owed to one or more Borrower without any known defenses, disputes, offsets, counterclaims, or rights of return or cancellation, and (c) not excluded as ineligible by virtue of one or more of the excluding criteria (other than Agent-discretionary criteria) set forth in the definition of Eligible Accounts.

 

4.26         Eligible Inventory.  As to each item of Inventory that is identified by any Borrower as Eligible Finished Goods Inventory, Eligible Raw Materials Inventory, or Eligible Work-in-Process Inventory in a Borrowing Base Certificate submitted to Agent, such Inventory is (a) of good and merchantable quality, free from known defects, and (b) not excluded as ineligible by virtue of one or more of the excluding criteria (other than Agent-discretionary criteria) set forth in the definition of Eligible Inventory.

 

4.27         Locations of Inventory.  The Inventory of the Loan Parties and their Subsidiaries is not stored with a bailee, warehouseman, or similar party and is located only at, or in-transit between, the locations identified on Schedule 4.27 (as such Schedule may be updated pursuant to Section 5.14); provided, , that Inventory of the Loan Parties and their Subsidiaries may be stored with the bailees and warehouseman that are identified by name and address of location on Schedule 4.27.

 

4.28         Inventory Records.  Each Loan Party  keeps correct and accurate records itemizing and describing the type, quality, and quantity of its and its Subsidiaries’ Inventory and the book value thereof.

 

4.29         Bankruptcy.  Each Loan Party has emerged from bankruptcy pursuant to the confirmation order dated March 15, 2011, and the confirmed plans are effective and have been substantially consummated.

 

4.30         Blocked Account Funds.  The cash, funds, and other property and assets in the Blocked Account are solely the proceeds and products of the sale or other disposition of Inventory (including all Accounts and all proceeds and products thereof).

 

4.31         Pekin.  AREI owns the Inventory (including all Accounts and all proceeds and products thereof) produced at and sold from the production facilities located at Pekin, Illinois.

 

4.32         Restructuring Documents.  As of the Closing Date, Borrowers have delivered to Agent true and correct copies of the Restructuring Documents.  No party thereto is in default in the performance or compliance with any provisions thereof and the Restructuring Documents comply in all material respects with all applicable laws.  The Restructuring Documents are in full force and effect as of the Closing Date and have not been terminated, rescinded or withdrawn as of such date.  The execution, delivery and performance of the Restructuring Documents do not and will not require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority, other than (a) consents or approvals that have been obtained and that are still in full force and effect, and (b) notices to be delivered to Governmental Authorities following consummation of the Restructuring.  To each Borrower’s knowledge, none of the representations or warranties of any other Person in any Restructuring Document contains any untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading.

 

5.             AFFIRMATIVE COVENANTS.

 

Each Borrower covenants and agrees that, until termination of all of the Commitments and payment in full of the Obligations:

 

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5.1           Financial Statements, Reports, Certificates.  Borrowers (a) will deliver to Agent, with copies to each Lender, each of the financial statements, reports, and other items set forth on Schedule 5.1 in the manner and no later than the times specified therein, (b) agree that no Subsidiary of a Loan Party will have a fiscal year different from that of Parent, (c) agree to maintain a system of accounting that enables Borrowers to produce financial statements in accordance with GAAP, and (d) agree that each will, and will cause each other Loan Party to, (i) keep a reporting system that shows all additions, sales, claims, returns, and allowances with respect to its and its Subsidiaries’ sales, and (ii) maintain its billing systems and practices substantially as in effect as of the Closing Date and shall only make material modifications thereto with notice to, and with the consent of, Agent.

 

5.2           Collateral Reporting.  Borrowers (a) will deliver to Agent (and if so requested by Agent, with copies for each Lender) each of the reports set forth on Schedule 5.2 at the times specified therein, and (b) agree to use commercially reasonable efforts in cooperation with Agent to facilitate and implement a system of electronic collateral reporting in order to provide electronic reporting of each of the items set forth on such Schedule.

 

5.3           Existence.  Except as otherwise permitted under Section 6.3 or Section 6.4, each Borrower will, and will cause each of its Subsidiaries to, at all times preserve and keep in full force and effect such Person’s valid existence and good standing in its jurisdiction of organization and, except as could not reasonably be expected to result in a Material Adverse Effect, good standing with respect to all other jurisdictions in which it is qualified to do business and any rights, franchises, permits, licenses, accreditations, authorizations, or other approvals material to their businesses.

 

5.4           Maintenance of Properties.  Each Borrower will, and will cause each of its Subsidiaries to, maintain and preserve all of its assets that are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear, tear, casualty, and condemnation and Permitted Dispositions excepted.

 

5.5           Taxes.  Other than an aggregate amount of not more than $250,000 at any one time for Parent and its Subsidiaries, each Borrower will, and will cause each of its Subsidiaries to, pay in full before delinquency or before the expiration of any extension period all material governmental assessments and taxes imposed, levied, or assessed against it, or any of its assets or in respect of any of its income, businesses, or franchises, except to the extent that the validity of such governmental assessment or tax is the subject of a Permitted Protest.

 

5.6           Insurance.  Each Borrower will, and will cause each of its Subsidiaries to, at Borrowers’ expense, (a) maintain insurance respecting each Borrower’s and it Subsidiaries’ assets wherever located, covering liabilities, losses or damages as are customarily insured against by other Persons engaged in the same or similar businesses that are similarly situated and located.  All such policies of insurance shall be with financially sound and reputable insurance companies acceptable to Agent (it being agreed that, as of the Closing Date, Chartis, Travelers Excess Casualty, Zurich Global Energy, Liberty International Underwriters, Lloyds of London are acceptable to Agent) and in such amounts as is carried generally in accordance with sound business practice by companies in similar businesses similarly situated and located and, in any event, in amount, adequacy, and scope reasonably satisfactory to Agent (it being agreed that the amount, adequacy, and scope of the policies of insurance of each Borrower and its Subsidiaries in effect as of the Closing Date are acceptable to Agent).  All property insurance policies covering the Collateral are to be made payable to Agent for the benefit of Agent and the Lenders, as their interests may appear, in case of loss, pursuant to a standard loss payable endorsement with a standard non contributory “lender” or “secured party” clause and are to contain such other provisions as Agent may reasonably require to fully protect the Lenders’ interest in the Collateral and to any payments to be made under such policies.  All certificates of property and general liability insurance are to be delivered to Agent, with the loss payable (but only in respect of Collateral) and additional insured endorsements in favor of Agent and shall provide for not less than 30 days (10 days in the case of non-payment) prior written notice to Agent of the exercise of any right of cancellation.  If any Borrower or its Subsidiaries fail to maintain such insurance, Agent may arrange for such insurance, but at

 

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Borrowers’ expense and without any responsibility on Agent’s part for obtaining the insurance, the solvency of the insurance companies, the adequacy of the coverage, or the collection of claims.  Borrowers shall give Agent prompt notice of any loss exceeding $1,000,000 covered by its or its Subsidiaries’ casualty or business interruption insurance.  Upon the occurrence and during the continuance of an Event of Default, Agent shall have the sole right to file claims under any property and general liability insurance policies in respect of the Collateral, to receive, receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies.

 

5.7           Inspection.

 

(a)           Each Borrower will, and will cause each of its Subsidiaries to, permit Agent, any Lender, and each of their respective duly authorized representatives or agents to visit any of its properties and inspect any of its assets or books and records, to examine and make copies of its books and records, and to discuss its affairs, finances, and accounts with, and to be advised as to the same by, its officers and employees (provided an authorized representative of Administrative Borrower shall be allowed to be present) at such reasonable times and intervals as Agent or any Lender, as applicable, may designate and, so long as no Default or Event of Default exists, with reasonable prior notice to Administrative Borrower and during regular business hours.

 

(b)           Each Borrower will, and will cause each of its Subsidiaries to, permit Agent and each of its duly authorized representatives or agents to conduct appraisals and valuations at such reasonable times and intervals as Agent may designate.  Agent agrees to provide Administrative Borrower with a copy of the report for any appraisal upon request by Borrowers so long as (i) such report exists, (ii) the third person employed by Agent to perform such appraisals consents to such disclosure, and (iii) Borrowers execute and deliver to Agent a non-reliance letter reasonably satisfactory to Agent.  For clarity, under no circumstances shall Agent be required to provide Administrative Borrower, or any other Borrower, with copies of field examination reports.

 

5.8           Compliance with Laws.  Each Borrower will, and will cause each of its Subsidiaries to, comply with the requirements of all applicable laws, rules, regulations, and orders of any Governmental Authority, other than laws, rules, regulations, and orders the non-compliance with which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

 

5.9           Environmental.  Each Borrower will, and will cause each of its Subsidiaries to:

 

(a)           Keep any property either owned or operated by Parent or its Subsidiaries free of any Environmental Liens or post bonds or other financial assurances sufficient to satisfy the obligations or liability evidenced by such Environmental Liens,

 

(b)           Comply, in all material respects, with Environmental Laws and provide to Agent documentation of such compliance which Agent reasonably requests,

 

(c)           Possess all material authorizations (including without limitation all permits, approvals, licenses, filings, or registrations) from Governmental Authorities required under Environmental Law to conduct such Borrowers’ ethanol production operations, maintain such authorizations in full force and effect, and operate in material compliance with all such authorizations,

 

(d)           Promptly notify Agent of any Release of Hazardous Materials in any quantity that would require reporting to a Governmental Authority under Environmental Laws from or at property or assets owned or operated by Parent or its Subsidiaries, providing Agent with copies of any and all reports, assessments, or other documentation relating to such release,

 

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(e)           Promptly undertake any Remedial Actions required to be taken under Environmental Law in the event of any material Release or threat of a material Release of Hazardous Materials that occurs within or otherwise impacts property owned or operated by Parent or its Subsidiaries, providing Agent with copies of any and all reports, assessments, or other documentation relating to such Release, and

 

(f)            Promptly, but in any event within 5 Business Days of its receipt thereof, provide Agent with written notice received by any Borrower or any of its Subsidiaries of any of the following:  (i) notice that an Environmental Lien has been filed against any of the real or personal property of Parent or its Subsidiaries, (ii) commencement of any Environmental Action or written notice that an Environmental Action will be filed against Parent or its Subsidiaries, and (iii) written notice of a violation, citation, or other administrative order from a Governmental Authority relating to Parent’s or any of its Subsidiaries’ compliance with Environmental Law, providing Agent with copies of any and all documentation relating to such notices or Environmental Actions.

 

5.10         Disclosure Updates.  Each Borrower will, promptly and in no event later than 10 Business Days after a Responsible Officer obtains knowledge thereof, notify Agent if any written information, exhibit, or report furnished to Agent or the Lenders contained, at the time it was furnished, any untrue statement of a material fact or omitted to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances in which made.  The foregoing to the contrary notwithstanding, any notification pursuant to the foregoing provision will not cure or remedy the effect of the prior untrue statement of a material fact or omission of any material fact nor shall any such notification have the effect of amending or modifying this Agreement or any of the Schedules hereto.

 

5.11         Formation of Subsidiaries.  Each Borrower will, at the time that any Loan Party forms any direct or indirect Subsidiary or acquires any direct or indirect Subsidiary after the Closing Date, within (a) 30 days, other than with respect to title insurance or other documentation with respect to Real Property, or (b) 90 days, with respect to title insurance and other documentation with respect to Real Property, after such formation or acquisition (or such later date as permitted by Agent in its sole discretion), (a) cause such new Subsidiary to provide to Agent a joinder to the Guaranty and Security Agreement, together with such other security agreements (including mortgages with respect to any Real Property owned in fee of such new Subsidiary with a fair market value greater than $3,000,000), as well as appropriate financing statements (and with respect to all property subject to a mortgage, fixture filings), all in form and substance reasonably satisfactory to Agent (including being sufficient to grant Agent a first priority Lien (subject only to (y) Permitted Liens which are non-consensual Permitted Liens, permitted purchase money Liens, or the interests of lessors under Capital Leases and (z) the Liens granted under the Term Loan Documents that are expressly permitted under the terms of the Intercreditor Agreement to be first priority Liens) in and to the assets of such newly formed or acquired Subsidiary), (b) provide, or cause the applicable Loan Party to provide, to Agent a pledge agreement (or an addendum to the Guaranty and Security Agreement) and appropriate certificates and powers or financing statements, pledging all of the direct or beneficial ownership interest in such new Subsidiary in form and substance reasonably satisfactory to Agent, and (c) provide to Agent all other documentation, including one or more opinions of counsel reasonably satisfactory to Agent, which, in its opinion, is appropriate with respect to the execution and delivery of the applicable documentation referred to above (including policies of title insurance or other documentation with respect to all Real Property owned in fee and subject to a mortgage).  Any document, agreement, or instrument executed or issued pursuant to this Section 5.11 shall constitute a Loan Document.

 

5.12         Further Assurances.  Each Borrower will, and will cause each of the other Loan Parties to, within (a) 30 days, other than with respect to documentation with respect to Real Property, upon the reasonable request of Agent, or (b) 90 days, with respect to documentation with respect to Real Property, execute or deliver to Agent any and all financing statements, fixture filings, security agreements, pledges, assignments, mortgages, deeds of trust, opinions of counsel, and all other documents (the “Additional Documents”) that Agent may reasonably request in form and substance reasonably satisfactory to Agent, to create, perfect, and continue perfected or to better perfect Agent’s Liens in all of the assets of each Borrower and its Subsidiaries (whether now owned or hereafter arising or acquired, tangible or intangible, real or

 

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personal), to create and perfect Liens in favor of Agent in any Real Property acquired by any Borrower or any other Loan Party with a fair market value in excess of $3,000,000, and in order to fully consummate all of the transactions contemplated hereby and under the other Loan Documents.  To the maximum extent permitted by applicable law, if any Borrower or any other Loan Party refuses or fails to execute or deliver any reasonably requested Additional Documents within a reasonable period of time following the request to do so, each Borrower and each other Loan Party hereby authorizes Agent to execute any such Additional Documents in the applicable Loan Party’s name and authorizes Agent to file such executed Additional Documents in any appropriate filing office.  In furtherance of, and not in limitation of, the foregoing, each Loan Party shall take such actions as Agent may reasonably request from time to time to ensure that the Obligations are guarantied by any Guarantors and are secured by substantially all of the assets of Parent and its Subsidiaries, including all of the outstanding capital Equity Interests of each Borrower (other than Parent) and each Borrower’s Subsidiaries.

 

5.13         Lender Meetings.  Borrowers will, within 120 days after the close of each fiscal year of Parent, at the request of Agent or of the Required Lenders and upon reasonable prior notice, hold a meeting (at a mutually agreeable location and time or, at the option of Agent, by conference call) with all Lenders who choose to attend such meeting at which meeting shall be reviewed the financial results of the previous fiscal year and the financial condition of Parent and its Subsidiaries and the projections presented for the current fiscal year of Parent.

 

5.14         Location of Inventory.  Each Borrower will, and will cause each of its Subsidiaries to, keep its Inventory only at the locations identified on Schedule 4.27 and their chief executive offices only at the locations identified on Schedule 4.6(b); provided, that any Borrower may amend Schedule 4.27 or Schedule 4.6(b) so long as such amendment occurs by written notice to Agent on or prior to the date on which such Inventory is moved to such new location or such chief executive office is relocated and so long as such new location is within the continental United States and so long as such location is subject to a Collateral Access Agreement.

 

5.15         Compliance with ERISA and the IRC.  In addition to and without limiting the generality of Section 5.8, each Borrower will, and will cause each of its Subsidiaries to, (a) comply in all material respects with applicable provisions of ERISA, the IRC and the regulations thereunder with respect to all Employee Benefit Plans, (b) without the prior written consent of Agent and the Required Lenders, not take any action or fail to take action the result of which could be a material liability to the PBGC or to a Multiemployer Plan (other than claims for benefits, contributions or premiums payable in the ordinary course), (c) not participate in any prohibited transaction that could result in any civil penalty under ERISA or tax under the IRC, other than any prohibited transaction that could not reasonably be expected to result in material liability, and (d) operate each Employee Benefit Plan in such a manner that will not incur any material tax liability under Section 4980B of the IRC, and (e) furnish to Agent upon Agent’s written request such additional information about any Employee Benefit Plan for which any Borrower or any Subsidiary, or any ERISA Affiliate could reasonably expect to incur any material liability as may be reasonably requested by Agent.

 

5.16         Hedge Agreements.  Each Borrower will, and will cause each of its Subsidiaries to, allow WFCF (or one or more of its Affiliates) the first opportunity to bid for all interest rate protection agreements, currency hedge agreements, and commodity hedge agreements to be entered into by any Borrower or one of its Subsidiaries; provided, that the foregoing shall not apply to Hedge Agreements entered into with Macquarie Bank Limited so long as such agreements are permitted by the terms of this Agreement.

 

5.17         Deposit Accounts, Securities Accounts and Commodity Accounts.   Except as permitted pursuant to Section 6.10(b), each Borrower will, and cause each of its Subsidiaries to, maintain all of the Deposit Accounts, Securities Accounts and Commodity Accounts (other than the Jefferies Commodity Accounts) of the Loan Parties and their Subsidiaries that are organized in a jurisdiction in the United States only at Wells Fargo or one or more of its Affiliates.

 

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5.18                           Port of Indiana Production.  Borrowers shall provide Agent written notice 30 days prior to the commencement by Borrowers of the production of ethanol at the Indiana Port Leased Premises.

 

5.19                           Blocked Account Funds.

 

(a)                                  Each Borrower will, and cause each of its Subsidiaries to, deposit and maintain immediately available funds in the Blocked Account to the extent required in accordance with Section 5.20 below, and each Borrower and each of its Subsidiaries may, with the prior written consent of Agent, from time to time, deposit additional funds in the Blocked Account, which shall immediately (and without further action by any party hereto) be deemed to be Blocked Account Funds.  Borrowers hereby authorize Agent, to the extent required pursuant to Section 5.20, to transfer immediately available funds from the Lock Box Account (whether through Agent’s account number 37072820231201068 or otherwise) into the Blocked Account.

 

(b)                                 Anything to the contrary contained in any Loan Document notwithstanding, Borrowers hereby authorize Agent, in the absence of timely payment in accordance with the terms of this Agreement, of any Letter of Credit Disbursement, Loan, or any other Obligation or upon the occurrence of an Event of Default, and anything to the contrary contained in any Loan Document notwithstanding, to, at its option and without notice to any Borrower, exercise its rights and remedies with respect to the Blocked Account to reimburse or repay (as applicable) the Issuing Bank, Agent, or Lender (as applicable) for the amount of such Letter of Credit Disbursement, Loan, or other Obligation (including issuance charges, usage charges, commissions, fees, and costs set forth in Section 2.6(b) and 2.11(k).

 

(c)                                  Each Borrower agrees that it may not use the cash, funds, and other property and assets deposited in the Blocked Account for any purpose other than to secure the Obligations.  Without limiting the generality of the foregoing, each Borrower agrees that it shall have no right to withdraw funds from the Blocked Account or otherwise access the Blocked Account except with the prior written consent of Agent; provided that, so long as (i) no Default or Event of Default has occurred and is continuing or would result therefrom and (ii) after giving effect thereto Borrowers shall be in pro forma compliance with the Excess Availability Requirement and the Liquidity Requirement, upon receipt of a written request of Borrowers together with a Borrowing Base Certificate delivered pursuant to Section 5.2 demonstrating that the amount of the Blocked Account Funds then on deposit in the Blocked Account exceeds the then applicable Shortfall Amount, Agent shall permit the release of such excess funds from the Blocked Account.

 

5.20                           Minimum Liquidity Shortfall.  If, pursuant to the Borrowing Base Certificate delivered to Agent pursuant to Section 5.2, Borrowers have failed to maintain Excess Availability of at least $5,000,000, then within 1 Business Day after receipt by Agent of such Borrowing Base Certificate immediately available funds consisting of proceeds of the sale or other disposition of Inventory or proceeds of other ABL Primary Collateral (as such term is defined in the Intercreditor Agreement) in an amount equal to 103% of the result of (i) $5,000,000 (the “Excess Availability Requirement”) minus (ii) the amount of Excess Availability reported to Agent pursuant to such Borrower Base Certificate (such result, the “Shortfall Amount”) shall have been deposited in the Blocked Account from, at the option of Agent, either (i) the transfer of funds from the Lock Box Account (whether through Agent’s deposit account number 37072820231201068 or otherwise), or (ii) through the deposit by Borrowers of other proceeds from the sale or other disposition of Inventory (it being understood and agreed that Agent has the right, in its sole discretion, to extend such 1 Business Day deadline by providing written notice thereof to Borrowers).  The deposit of such funds shall be deemed to have satisfied the Excess Availability Requirement for such period effective as of each date of determination of any such Shortfall Amount with the same effect as though there had been no failure to comply with the Excess Availability Requirement on such date and any applicable Default or Event of Default which would have resulted therefrom with respect to such period shall be deemed cured for all purposes of this Agreement and the other Loan Documents.  Funds may be released from the Blocked Account pursuant to the terms and conditions set forth in Section 5.19(c) above.

 

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6.                                       NEGATIVE COVENANTS.

 

Each Borrower covenants and agrees that, until termination of all of the Commitments and payment in full of the Obligations:

 

6.1                                 Indebtedness.  Borrowers will not, and will not permit any of their Subsidiaries to, create, incur, assume, suffer to exist, guarantee, or otherwise become or remain, directly or indirectly, liable with respect to any Indebtedness, except for Permitted Indebtedness.

 

6.2                                 Liens.  Borrowers will not, and will not permit any of their Subsidiaries to, create, incur, assume, or suffer to exist, directly or indirectly, any Lien on or with respect to any of its assets, of any kind, whether now owned or hereafter acquired, or any income or profits therefrom, except for Permitted Liens.

 

6.3                                 Restrictions on Fundamental Changes.  Borrowers will not, and will not permit any of their Subsidiaries to:

 

(a)                                  other than in order to consummate a Permitted Acquisition, enter into any merger, consolidation, reorganization, or recapitalization, or reclassify its Equity Interests, except for (i) any merger between Loan Parties, provided, that a Borrower must be the surviving entity of any such merger to which it is a party and no merger may occur between Parent and any other Borrower, (ii) any merger between a Loan Party and a Subsidiary of such Loan Party that is not a Loan Party so long as such Loan Party (other than Parent) is the surviving entity of any such merger, (iii) any merger between Subsidiaries of Parent that are not Loan Parties, (iv) the New Equity Issuance and the other Equity Transactions consummated as of the Closing Date pursuant to the terms of the applicable Restructuring Documents, and (v) the issuances of the Warrants and the shares of common Equity Interests upon exercise of the Warrants,

 

(b)                                 liquidate, wind up, or dissolve itself (or suffer any liquidation or dissolution), except for (i) the liquidation or dissolution of non-operating Subsidiaries of Parent with nominal assets and nominal liabilities, (ii) the liquidation or dissolution of a Loan Party (other than any Borrower) or any of its wholly-owned Subsidiaries so long as all of the assets (including any interest in any Equity Interests) of such liquidating or dissolving Loan Party or Subsidiary are transferred to a Loan Party (other than Parent) that is not liquidating or dissolving, or (iii) the liquidation or dissolution of a Subsidiary of Parent that is not a Loan Party (other than any such Subsidiary the Equity Interests of which (or any portion thereof) is subject to a Lien in favor of Agent) so long as all of the assets of such liquidating or dissolving Subsidiary are transferred to a Subsidiary of Parent that is not liquidating or dissolving, or

 

(c)                                  suspend or modify a substantial portion of its or their business activity levels as conducted on the Closing Date, except as permitted pursuant to clauses (a) or (b) above or in connection with a transaction permitted under Section 6.4 or Section 5.4.

 

6.4                                 Disposal of Assets.  Other than Permitted Dispositions or transactions expressly permitted by Sections 6.3 or 6.10, Borrowers will not, and will not permit any of their Subsidiaries to, convey, sell, lease, license, assign, transfer, or otherwise dispose of (or enter into an agreement to convey, sell, lease, license, assign, transfer, or otherwise dispose of) any of their assets.

 

6.5                                  Change Name.  Borrowers will not, and will not permit any of their Subsidiaries to change its or their name, organizational identification number, jurisdiction of organization or organizational identity; provided, that Parent or any of its Subsidiaries may change its name upon at least 10 days prior written notice to Agent of such change.

 

6.6                                 Nature of Business.  Borrowers will not, and will not permit any of their Subsidiaries to make any change in the nature of their business as described in Schedule 6.6 or acquire any properties or assets that are not reasonably related to the conduct of such business activities; provided, that the

 

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foregoing shall not prevent Parent and its Subsidiaries from engaging in any business that is reasonably related or ancillary to its or their business.

 

6.7                                 Prepayments and Amendments.  Borrowers will not, and will not permit any of their Subsidiaries to:

 

(a)                                  except in connection with Refinancing Indebtedness permitted by Section 6.1,

 

(i)                           optionally prepay, redeem, defease, purchase, or otherwise acquire any Indebtedness of Parent or its Subsidiaries, other than (A) the Obligations in accordance with this Agreement, (B) Permitted Intercompany Advances, and (C) the portion of the Term Loan Indebtedness under the Original Term Loan Agreement being cancelled and extinguished on the Closing Date pursuant to the Restructuring Documents, or

 

(ii)                        make any payment on account of Indebtedness that has been contractually subordinated in right of payment to the Obligations if such payment is not permitted at such time under the subordination terms and conditions, or

 

(b)                                 directly or indirectly, amend, modify, or change any of the terms or provisions of

 

(i)                           any agreement, instrument, document, indenture, or other writing evidencing or concerning Permitted Indebtedness other than (A) the Obligations in accordance with this Agreement, (B) Permitted Intercompany Advances, and (C) Indebtedness permitted under clauses (c), (h), (j), (k), and (r)  (which is addressed in clause (ii) below) of the definition of Permitted Indebtedness,

 

(ii)                        any Term Loan Document in any manner that is not permitted by the terms of the Intercreditor Agreement, or

 

(iii)                     the Governing Documents of any Loan Party or any of its Subsidiaries if the effect thereof, either individually or in the aggregate, could reasonably be expected to be materially adverse to the interests of the Lenders, or

 

(iv)                    the Indiana Port Lease Agreement, or

 

(c)                                  acquire or purchase the Term Loan Indebtedness pursuant to Section 10.06 of the Term Loan Agreement or otherwise.

 

6.8                                 Restricted Payments.  Borrowers will not, and will not permit any of their Subsidiaries to, make any Restricted Payment; provided, that, so long as it is permitted by law, and so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom,

 

(a)                                  Parent may make distributions to former employees, officers, or directors of Parent (or any spouses, ex-spouses, or estates of any of the foregoing) on account of redemptions of Equity Interests of Parent held by such Persons; provided, that (i) prior to and after giving effect to such distributions, Excess Availability is at least $15,000,000, (ii) the aggregate amount of such redemptions made by Parent during any fiscal year of Parent plus the aggregate amount of such redemptions made by Parent during the term of this Agreement plus the amount of Indebtedness outstanding under clause (l) of the definition of Permitted Indebtedness, does not exceed $2,500,000, and (iii) the aggregate amount of such redemptions made by Parent during the term of this Agreement plus the aggregate amount of Indebtedness outstanding under clause (l) of the definition of Permitted Indebtedness, does not exceed $5,000,000,

 

(b)                                 Parent may purchase Equity Interests from its or its Subsidiaries’ employees, in an aggregate amount not to exceed $1,000,000 in any fiscal year of Parent, in connection with the satisfaction of

 

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such employees’ tax withholding obligations pursuant to employee benefit plans or outstanding awards, and payment of any corresponding requisite amounts to the appropriate Governmental Authority, and

 

(c)                                  Parent may make payment in cash to holders of Parent’s Equity Interests in lieu of fractional shares in connection with the reverse stock split contemplated in the Equity Documents; and

 

(d)                                 Parent may make change of control payments calculated in accordance with the Warrant Agreement paid to the holders of the Warrants to the extent such Warrants could be exercised at such time, provided that (x) no Change of Control, other than a Permitted Change of Control (as such term is defined in the Term Loan Agreement as in effect as of the Closing Date), has occurred unless all Obligations are paid in full prior to such payments and (y) any such payments made prior to payment in full of the Obligations shall be made solely from the proceeds of the issuance of new Equity Interests (other than Disqualified Equity Interests) or other equity contributions to Parent and shall not be made with the proceeds of any Collateral.

 

6.9                                 Accounting Methods.  Borrowers will not, and will not permit any of their Subsidiaries to, modify or change its fiscal year or its method of accounting (other than as may be required to conform to GAAP).

 

6.10                           Investments; Controlled Investments.  Borrowers will not, and will not permit any of their Subsidiaries to:

 

(a)                                  except for Permitted Investments, directly or indirectly, make or acquire any Investment or incur any liabilities (including contingent obligations) for or in connection with any Investment, or

 

(b)                                 other than (i) an aggregate amount of not more than $50,000 at any one time, in the case of Parent and its Subsidiaries, (ii) amounts deposited into Deposit Accounts specifically and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for Parent’s or its Subsidiaries’ employees, or (iii) amounts deposited into a Deposit Account specifically and exclusively used to accept the proceeds of Term Loan Primary Collateral (as such term is defined in the Intercreditor Agreement) in accordance with the terms of the Intercreditor Agreement, make, acquire, or permit to exist Permitted Investments consisting of cash, Cash Equivalents, or amounts credited to Deposit Accounts, Securities Accounts or Commodity Accounts (except for the Jefferies Commodity Accounts at any time prior to the date that is 120 days after the Closing Date) unless Parent or its Subsidiary, as applicable, and the applicable bank, securities intermediary or commodity intermediary have entered into Control Agreements with Agent governing such Permitted Investments in order to perfect (and further establish) Agent’s Liens in such Permitted Investments.  Except as provided in Section 6.10(b)(i), (ii), and (iii) Borrowers shall not and shall not permit their Subsidiaries to establish or maintain any Deposit Account, Securities Account, or Commodity Account (other than the Jefferies Commodity Accounts) unless Agent shall have received a Control Agreement in respect of such Deposit Account, Securities Account or Commodity Account.

 

6.11                           Transactions with Affiliates.  Borrowers will not, and will not permit any of their Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction with any Affiliate of Parent or any of their Subsidiaries except for:

 

(a)                                  transactions (other than the payment of management, consulting, monitoring, or advisory fees) between Parent or its Subsidiaries, on the one hand, and any Affiliate of Parent or its Subsidiaries, on the other hand, so long as such transactions (i) are fully disclosed to Agent prior to the consummation thereof, if they involve one or more payments by Parent or its Subsidiaries in excess of $1,000,000 for any single transaction or series of related transactions, and (ii) are no less favorable, taken as a whole, to Parent or its Subsidiaries, as applicable, than would be obtained in an arm’s length transaction with a non-Affiliate,

 

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(b)                                 so long as it has been approved by Parent’s or its applicable Subsidiary’s Board of Directors in accordance with applicable law, any indemnity provided for the benefit of directors (or comparable managers) of Parent or its applicable Subsidiary,

 

(c)                                  so long as it has been approved by Parent’s or its applicable Subsidiary’s Board of Directors in accordance with applicable law, the payment of reasonable compensation, severance, or employee benefit arrangements to employees, officers, and outside directors of Parent and its Subsidiaries in the ordinary course of business and consistent with industry practice,

 

(d)                                 any payments or other transactions pursuant to any tax-sharing agreement between Parent and any other Person with which Parent files a consolidated, combined or unitary tax return or with which Parent is part of consolidated, combined or unitary group for tax purposes,

 

(e)                                  any transaction with joint venture or similar entity which is otherwise permitted under this Agreement solely because Parent or a Subsidiary of Parent owns an equity interest in or otherwise controls such joint venture or similar entity,

 

(f)                                    the transactions occurring pursuant to or as contemplated by the Restructuring Documents as in effect on the Closing Date, and

 

(g)                                 transactions permitted by Section 6.3 or Section 6.8, or any Permitted Intercompany Advance.

 

6.12                           Use of Proceeds.  Borrowers will not, and will not permit any of their Subsidiaries to, use the proceeds of any loan made hereunder for any purpose other than, consistent with the terms and conditions hereof, for their lawful and permitted purposes (including that no part of the proceeds of the loans made to Borrowers will be used to purchase or carry any such Margin Stock or to extend credit to others for the purpose of purchasing or carrying any such Margin Stock or for any purpose that violates the provisions of Regulation T, U or X of the Board of Governors of the United States Federal Reserve).

 

6.13                           Limitation on Issuance of Equity Interests.  Except for the issuance or sale of Qualified Equity Interests by Parent (including such Qualified Equity Interests to be issued to the New Equity Holders on the Closing Date and the Warrants to be issued to the Original Equity Holders in connection with the Restructuring), Borrowers will not, and will not permit any of their Subsidiaries to, issue or sell or enter into any agreement or arrangement for the issuance or sale of any of their Equity Interests to any Person other than a Loan Party.

 

6.14                           Inventory with Bailees.  Borrower will not, and will not permit any of their Subsidiaries to, store their Inventory at any time with a bailee, warehouseman, or similar party other than the bailees listed on Schedule 6.14 (as such Schedule may be updated from time to time with prior written consent of Agent) hereof.

 

6.15                           Parent as Holding Company.  Borrowers will not, and will not permit any of their Subsidiaries to, permit Parent to incur any liabilities (other than (a) liabilities arising under the Loan Documents, the Term Loan Documents, and the Equity Documents, (b) de minimis liabilities, and (c) liabilities arising out of agreements listed on Schedule 4.17 to which Parent is a party), own or acquire any assets (other than de minimis assets and the Equity Interests of the other Borrowers and their Subsidiaries) or engage itself in any operations or business, except in connection with its ownership of the other Borrowers and its rights and obligations under the Loan Documents and the Term Loan Documents.

 

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7.                                       FINANCIAL COVENANTS.

 

Each Borrower covenants and agrees that, until termination of all of the Commitments and payment in full of the Obligations, Borrowers will:

 

7.1                                 Minimum Liquidity.  Maintain  at all times from and including the date of this Agreement until the Maturity Date, (a) at any time that the aggregate principal amount of outstanding Revolving Loans is less than $1,000,000, (i) Excess Availability of at least $5,000,000 and (ii) Excess Availability plus Qualified Cash of at least $10,000,000, and (b) at any time that the aggregate principal amount of outstanding Revolving Loans is greater than or equal to $1,000,000, Excess Availability of at least $10,000,000 (the requirements set forth in the foregoing clauses (a) and (b) are each herein referred to as the “Liquidity Requirement”).

 

7.2                                 Minimum Ethanol Production.  Maintain, from and including the date hereof until the Maturity Date, ethanol production of at least 80,000,000 gallons of ethanol, during any trailing 12 month period ending as of any calendar month most recently ended after the date hereof, in the aggregate for all of Borrowers’ ethanol production plants (excluding the Mt. Vernon Facility and any other such plants where Agent does not have a perfected first priority security interest in the Accounts and Inventory related thereto).

 

8.                                       EVENTS OF DEFAULT.

 

Any one or more of the following events shall constitute an event of default (each, an “Event of Default”) under this Agreement:

 

8.1                                 Payments.  If Borrowers fail to pay when due and payable, or when declared due and payable, (a) all or any portion of the Obligations consisting of interest, fees, or charges due the Lender Group, reimbursement of Lender Group Expenses, or other amounts (other than any portion thereof constituting principal) constituting Obligations (including any portion thereof that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), and such failure continues for a period of 3 Business Days, (b) all or any portion of the principal of the Loans, or (c) any amount payable to Issuing Bank in reimbursement of any drawing under a Letter of Credit;

 

8.2                                 Covenants.  If any Loan Party or any of its Subsidiaries:

 

(a)                                  fails to perform or observe any covenant or other agreement contained in any of (i) Sections 3.6, 5.1, 5.2, 5.3 (solely if any Borrower is not in good standing in its jurisdiction of organization), 5.6, 5.7 (solely if any Borrower refuses to allow Agent or its representatives or agents to visit such Borrower’s properties, inspect its assets or books or records, examine and make copies of its books and records, or discuss such Borrower’s affairs, finances, and accounts with officers and employees of such Borrower), 5.10, 5.11, 5.12, 5.13, 5.14, 5.15, 5.16, or 5.17 of this Agreement, (ii) Sections 6.1 through 6.15 of this Agreement, (iii) Section 7 of this Agreement, or (iv) Section 6 of the Guaranty and Security Agreement;

 

(b)                                 fails to perform or observe any covenant or other agreement contained in any of Sections 5.3 (other than if any Borrower is not in good standing in its jurisdiction of organization), 5.4, 5.5, and 5.8 of this Agreement and such failure continues for a period of 10 days after the earlier of (i) the date on which such failure shall first become known to any officer of any Borrower or (ii) the date on which written notice thereof is given to Administrative Borrower by Agent; or

 

(c)                                  fails to perform or observe any covenant or other agreement contained in this Agreement, or in any of the other Loan Documents, in each case, other than any such covenant or agreement that is the subject of another provision of this Section 8 (in which event such other provision of this Section 8 shall govern), and such failure continues for a period of 30 days after the earlier of (i) the date on which such

 

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failure shall first become known to a Responsible Officer of any Borrower or (ii) the date on which written notice thereof is given to Administrative Borrower by Agent;

 

8.3                                 Judgments.  If one or more judgments, orders, or awards for the payment of money involving an aggregate amount of $2,500,000, or more (except to the extent fully covered (other than to the extent of customary deductibles) by insurance pursuant to which the insurer has not denied coverage) is entered or filed against a Loan Party or any of its Subsidiaries, or with respect to any of their respective assets, and either (a) there is a period of 30 consecutive days at any time after the entry of any such judgment, order, or award during which (1) the same is not discharged, satisfied, vacated, or bonded pending appeal, or (2) a stay of enforcement thereof is not in effect, or (b) enforcement proceedings are commenced upon such judgment, order, or award;

 

8.4                                 Voluntary Bankruptcy, etc.  If an Insolvency Proceeding is commenced by a Loan Party or any of its Subsidiaries;

 

8.5                                 Involuntary Bankruptcy, etc.  If an Insolvency Proceeding is commenced against a Loan Party or any of its Subsidiaries and any of the following events occur: (a) such Loan Party or such Subsidiary consents to the institution of such Insolvency Proceeding against it, (b) the petition commencing the Insolvency Proceeding is not timely controverted, (c) the petition commencing the Insolvency Proceeding is not dismissed within 60 calendar days of the date of the filing thereof, (d) an interim trustee is appointed to take possession of all or any substantial portion of the properties or assets of, or to operate all or any substantial portion of the business of, such Loan Party or its Subsidiary, or (e) an order for relief shall have been issued or entered therein;

 

8.6                                 Default Under Other Agreements.  If there is (a) a default in one or more agreements to which a Loan Party or any of its Subsidiaries is a party with one or more third Persons relative to a Loan Party’s or any of its Subsidiaries’ Indebtedness involving an aggregate amount of $2,500,000 or more, and such default (i) occurs at the final maturity of the obligations thereunder, or (ii) results in a right by such third Person, irrespective of whether exercised, to accelerate the maturity of such Loan Party’s or its Subsidiary’s obligations thereunder; (b)  an acceleration of the Term Loan Indebtedness under any of the Term Loan Documents; (c) there exists an Event of Default (as such terms are defined in the Term Loan Agreement) under any of the Term Loan Documents; (d) a default in or an involuntary early termination of one or more Hedge Agreements to which a Loan Party or any of its Subsidiaries is a party; or (e) a default or breach under the Indiana Port Lease Agreement;

 

8.7                                 Representations, etc.  If any warranty, representation, certificate, statement, or Record made herein or in any other Loan Document or delivered in writing to Agent or any Lender in connection with this Agreement or any other Loan Document proves to be untrue in any material respect (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of the date of issuance or making or deemed making thereof;

 

8.8                                 Guaranty.  If the obligation of any Guarantor under the guaranty contained in the Guaranty and Security Agreement is limited or terminated by operation of law or by such Guarantor (other than in accordance with the terms of this Agreement);

 

8.9                                 Security Documents.  If the Guaranty and Security Agreement or any other Loan Document that purports to create a Lien, shall, for any reason, fail or cease to create a valid and perfected and, except to the extent of (y) Permitted Liens which are non-consensual Permitted Liens, permitted purchase money Liens or the interests of lessors under Capital Leases and (z) Liens granted under the Term Loan Documents that are expressly permitted under the terms of the Intercreditor Agreement to be first priority Liens, first priority Lien on the Collateral covered thereby, except (a) as a result of a disposition of the applicable Collateral in a transaction permitted under such Loan Document, or (b) as the result of an action or failure to act on the part of Agent;

 

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8.10                           Loan Documents.  The validity or enforceability of any Loan Document shall at any time for any reason (other than solely as the result of an action or failure to act on the part of Agent) be declared to be null and void, or a proceeding shall be commenced by a Loan Party or its Subsidiaries, or by any Governmental Authority having jurisdiction over a Loan Party or its Subsidiaries, seeking to establish the invalidity or unenforceability thereof, or a Loan Party or its Subsidiaries shall deny that such Loan Party or its Subsidiaries has any liability or obligation purported to be created under any Loan Document;

 

8.11                           Change in Control.  A Change in Control shall occur after the Closing Date, whether directly or indirectly;

 

8.12                           Employee Benefits.  The occurrence of any of the following events with respect to any Loan Party or any of its ERISA Affiliates: (i) any Loan Party or any ERISA Affiliate fails to make full payment when due of all amounts which, under the provisions of any Pension Plan or Section 412 or 430 of the IRC, any of them are required to pay as contributions to such Pension Plan, and such failure could reasonably be expected to result in liability in excess of $2,500,000, (ii) an accumulated funding deficiency or funding shortfall in excess of $2,500,000 occurs or exists, whether or not waived, with respect to any Pension Plan, individually or in the aggregate, (iii) a Termination Event which could reasonably be expected to result in liability in excess of $2,500,000, either individually or in the aggregate, or (iv) any Loan Party or any ERISA Affiliate as employers under one or more Multiemployer Plans makes a complete or partial withdrawal from any such Multiemployer Plan and incurs a withdrawal liability requiring payments in an amount exceeding $2,500,000; or

 

8.13                           Restraining Orders.  If a Loan Party or any of its Subsidiaries is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of the business affairs of Parent and its Subsidiaries, taken as a whole.

 

9.                                       RIGHTS AND REMEDIES.

 

9.1                                 Rights and Remedies.  Upon the occurrence and during the continuation of an Event of Default, Agent may, and, at the instruction of the Required Lenders, shall (in each case under clauses (a) or (b) by written notice to Administrative Borrower), in addition to any other rights or remedies provided for hereunder or under any other Loan Document or by applicable law, do any one or more of the following:

 

(a)                                  (i) declare the principal of, and any and all accrued and unpaid interest and fees in respect of, the Loans and all other Obligations (other than the Bank Product Obligations), whether evidenced by this Agreement or by any of the other Loan Documents to be immediately due and payable, whereupon the same shall become and be immediately due and payable and Borrowers shall be obligated to repay all of such Obligations in full, without presentment, demand, protest, or further notice or other requirements of any kind, all of which are hereby expressly waived by each Borrower, (ii) terminate any Letter of Credit that may be terminated in accordance with its terms, and (iii) direct Borrowers to provide (and Borrowers agree that upon receipt of such notice Borrowers will provide) Letter of Credit Collateralization to Agent to be held as security for Borrowers’ reimbursement obligations for drawings that may subsequently occur under issued and outstanding Letters of Credit;

 

(b)                                 declare the Commitments terminated, whereupon the Commitments shall immediately be terminated together with (i) any obligation of any Lender to make Revolving Loans, (ii) the obligation of the Swing Lender to make Swing Loans, and (iii) the obligation of Issuing Bank to issue Letters of Credit; and

 

(c)                                  exercise all other rights and remedies available to Agent or the other members of the Lender Group under the Loan Documents or applicable law.

 

The foregoing to the contrary notwithstanding, upon the occurrence of any Event of Default described in Section 8.4 or Section 8.5, in addition to the remedies set forth above, without any notice to any

 

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Borrower or any other Person or any act by the Lender Group, the Commitments shall automatically terminate and the Obligations (other than the Bank Product Obligations), inclusive of the principal of, and any and all accrued and unpaid interest and fees in respect of, the Loans and all other Obligations (other than the Bank Product Obligations), whether evidenced by this Agreement or by any of the other Loan Documents, shall automatically become and be immediately due and payable and Borrowers shall automatically be obligated to repay all of such Obligations in full (including Borrowers being obligated to provide (and Borrowers agrees that they will provide) (1) Letter of Credit Cash Collateralization to Agent to be held as security for Borrowers’ reimbursement obligations in respect of drawings that may subsequently occur under issued and outstanding Letters of Credit and (2) Bank Product Collateralization to be held as security for Borrowers’ or their Subsidiaries’ obligations in respect of outstanding Bank Products), without presentment, demand, protest, or notice or other requirements of any kind, all of which are expressly waived by each Borrower.

 

9.2                                 Remedies Cumulative.  The rights and remedies of the Lender Group and the Bank Product Providers under this Agreement, the other Loan Documents, and all other agreements shall be cumulative.  The Lender Group shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity.  No exercise by the Lender Group of one right or remedy shall be deemed an election, and no waiver by the Lender Group of any Event of Default shall be deemed a continuing waiver.  No delay by the Lender Group shall constitute a waiver, election, or acquiescence by it.

 

10.                                 WAIVERS; INDEMNIFICATION.

 

10.1                           Demand; Protest; etc.  Each Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, nonpayment at maturity, release, compromise, settlement, extension, or renewal of documents, instruments, chattel paper, and guarantees at any time held by the Lender Group on which such Borrower may in any way be liable.

 

10.2                           The Lender Group’s Liability for Collateral.  Each Borrower hereby agrees that:  (a) so long as Agent complies with its obligations, if any, under the Code, the Lender Group shall not in any way or manner be liable or responsible for:  (i) the safekeeping of the Collateral, (ii) any loss or damage thereto occurring or arising in any manner or fashion from any cause, (iii) any diminution in the value thereof, or (iv) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of loss, damage, or destruction of the Collateral shall be borne by Borrowers.

 

10.3                           Indemnification.  Borrowers shall pay, indemnify, defend, and hold the Agent-Related Persons, the Lender-Related Persons, and each Participant (each, an “Indemnified Person”) harmless (to the fullest extent permitted by law) from and against any and all claims, demands, suits, actions, investigations, proceedings, liabilities, fines, costs, penalties, and damages, and all reasonable fees and disbursements of attorneys, experts, or consultants and all other costs and expenses actually incurred in connection therewith or in connection with the enforcement of this indemnification (as and when they are incurred and irrespective of whether suit is brought), at any time asserted against, imposed upon, or incurred by any of them (a) in connection with or as a result of or related to the execution and delivery (provided that no Borrower shall be liable for costs and expenses (including attorneys’ fees) of any Lender (other than WFCF) incurred in advising, structuring, drafting, reviewing, administering or syndicating the Loan Documents), enforcement, performance, or administration (including any restructuring or workout with respect hereto) of this Agreement, any of the other Loan Documents, or the transactions contemplated hereby or thereby or the monitoring of Parent’s and its Subsidiaries’ compliance with the terms of the Loan Documents (provided, that the indemnification in this clause (a) shall not extend to (i) disputes solely between or among the Lenders, (ii) disputes solely between or among the Lenders and their respective Affiliates that do not involve any acts or omissions of any Loan Party; it being understood and agreed that the indemnification in this clause (a) shall extend to Agent (but not the Lenders) relative to disputes between or among Agent on the one hand, and one or more Lenders, or one or more of their Affiliates, on the other hand, or (iii) any Taxes or any costs attributable to Taxes, which shall be governed by Section 16), (b) with respect to any investigation, litigation, or proceeding related to this Agreement, any other Loan Document, or the use of the proceeds of the credit provided hereunder (irrespective of whether any Indemnified Person is a party thereto), or any act, omission,

 

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event, or circumstance in any manner related thereto, and (c) in connection with or arising out of either any presence or Release of Hazardous Materials at, on, under, to or from any assets or properties owned, leased or operated by Parent or any of its Subsidiaries, or any Environmental Actions, Environmental Liabilities or Remedial Actions related in any way to any such assets or properties of Parent or any of its Subsidiaries (each and all of the foregoing, the “Indemnified Liabilities”).  The foregoing to the contrary notwithstanding, no Borrower shall have any obligation to any Indemnified Person under this Section 10.3 with respect to any Indemnified Liability that a court of competent jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of such Indemnified Person or its officers, directors, employees, attorneys, or agents.  This provision shall survive the termination of this Agreement and the repayment of the Obligations.  If any Indemnified Person makes any payment to any other Indemnified Person with respect to an Indemnified Liability as to which any Borrower was required to indemnify the Indemnified Person receiving such payment, the Indemnified Person making such payment is entitled to be indemnified and reimbursed by Borrowers with respect thereto.  WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON.

 

11.                                 NOTICES.

 

Unless otherwise provided in this Agreement, all notices or demands relating to this Agreement or any other Loan Document shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid or delivered electronically as set forth pursuant to the terms of Section 5.1) shall be personally delivered or sent by registered or certified mail (postage prepaid, return receipt requested), overnight courier, electronic mail (at such email addresses as a party may designate in accordance herewith), or telefacsimile.  In the case of notices or demands to Borrowers or Agent, as the case may be, they shall be sent to the respective address set forth below:

 

	
If   to Borrowers:
    	
AVENTINE   RENEWABLE ENERGY HOLDINGS, INC.
    
	
 
    	
One   Lincoln Centre
    
	
 
    	
5400   LBJ Freeway, Suite 450
    
	
 
    	
Dallas,   Texas 75240
    
	
 
    	
Attn:   Corporate Controller and Corporate Counsel
    
	
 
    	
Fax   No.: (214) 451-6799
    
	
 
    	
 
    
	
with   copies to:
    	
AKIN GUMP STRAUSS HAUER & FELD LLP
    
	
 
    	
One   Bryant Park
    
	
 
    	
New   York, NY 10036-6745
    
	
 
    	
Attn:   Ackneil M. Muldrow III, Esq.
    
	
 
    	
Fax   No.: 212.872.1002
    
	
 
    	
 
    
	
If   to Agent:
    	
WELLS FARGO CAPITAL FINANCE, LLC
    
	
 
    	
2450   Colorado Avenue
    
	
 
    	
Suite 3000   West
    
	
 
    	
Santa   Monica, CA 90404
    
	
 
    	
Attn:   Business Finance Division Manager
    
	
 
    	
Fax   No.: (310) 453-7413
    
	
 
    	
 
    
	
with   copies to:
    	
PAUL   HASTINGS LLP
    
	
 
    	
515   South Flower Street, 25th Floor
    
	
 
    	
Los   Angeles, CA 90071
    
	
 
    	
Attn:   John Francis Hilson, Esq.
    
	
 
    	
Fax   No.: (213) 996-3300
    

 

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Any party hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other party.  All notices or demands sent in accordance with this Section 11, shall be deemed received on the earlier of the date of actual receipt, the date of electronic delivery pursuant to Section 5.1 or 3 Business Days after the deposit thereof in the mail; provided, that (a) notices sent by overnight courier service shall be deemed to have been given when received, (b) notices by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient) and (c) notices by electronic mail shall be deemed received upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return email or other written acknowledgment).

 

12.                                 CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE PROVISION.

 

(a)                                  THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO, AND ANY CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.

 

(b)                                 THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA; 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 AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM  NON  CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12(b).

 

(c)                                  TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS, IF ANY, TO A JURY TRIAL OF ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS (EACH A “CLAIM”).  EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

(d)                                 EACH BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN

 

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DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT AGENT MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(e)                                  NO CLAIM MAY BE MADE BY ANY LOAN PARTY AGAINST AGENT, THE SWING LENDER, ANY OTHER LENDER, ISSUING BANK, OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR ATTORNEY-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES OR FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY LOSSES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION THEREWITH, AND EACH LOAN PARTY HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

 

(f)                                    IN THE EVENT ANY LEGAL PROCEEDING IS FILED IN A COURT OF THE STATE OF CALIFORNIA (THE “COURT”) BY OR AGAINST ANY PARTY HERETO IN CONNECTION WITH ANY CLAIM AND THE WAIVER SET FORTH IN CLAUSE (C) ABOVE IS NOT ENFORCEABLE IN SUCH PROCEEDING, THE PARTIES HERETO AGREE AS FOLLOWS:

 

(i)                           WITH THE EXCEPTION OF THE MATTERS SPECIFIED IN SUBCLAUSE (ii) BELOW, ANY CLAIM SHALL BE DETERMINED BY A GENERAL REFERENCE PROCEEDING IN ACCORDANCE WITH THE PROVISIONS OF CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638 THROUGH 645.1.  THE PARTIES INTEND THIS GENERAL REFERENCE AGREEMENT TO BE SPECIFICALLY ENFORCEABLE.  VENUE FOR THE REFERENCE PROCEEDING SHALL BE IN THE COUNTY OF LOS ANGELES, CALIFORNIA.

 

(ii)                        THE FOLLOWING MATTERS SHALL NOT BE SUBJECT TO A GENERAL REFERENCE PROCEEDING: (A) NON-JUDICIAL FORECLOSURE OF ANY SECURITY INTERESTS IN REAL OR PERSONAL PROPERTY, (B) EXERCISE OF SELF-HELP REMEDIES (INCLUDING SET-OFF OR RECOUPMENT), (C) APPOINTMENT OF A RECEIVER, AND (D) TEMPORARY, PROVISIONAL, OR ANCILLARY REMEDIES (INCLUDING WRITS OF ATTACHMENT, WRITS OF POSSESSION, TEMPORARY RESTRAINING ORDERS, OR PRELIMINARY INJUNCTIONS).  THIS AGREEMENT DOES NOT LIMIT THE RIGHT OF ANY PARTY TO EXERCISE OR OPPOSE ANY OF THE RIGHTS AND REMEDIES DESCRIBED IN CLAUSES (A) - (D) AND ANY SUCH EXERCISE OR OPPOSITION DOES NOT WAIVE THE RIGHT OF ANY PARTY TO PARTICIPATE IN A REFERENCE PROCEEDING PURSUANT TO THIS AGREEMENT WITH RESPECT TO ANY OTHER MATTER.

 

(iii)                    UPON THE WRITTEN REQUEST OF ANY PARTY, THE PARTIES SHALL SELECT A SINGLE REFEREE, WHO SHALL BE A RETIRED JUDGE OR JUSTICE.  IF THE PARTIES DO NOT AGREE UPON A REFEREE WITHIN 10 DAYS OF SUCH WRITTEN REQUEST, THEN, ANY PARTY SHALL HAVE THE RIGHT TO REQUEST THE COURT TO APPOINT A REFEREE PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 640(B).  THE REFEREE SHALL BE APPOINTED TO SIT WITH ALL OF THE POWERS PROVIDED BY LAW.  PENDING APPOINTMENT OF THE REFEREE, THE COURT SHALL HAVE THE POWER TO ISSUE TEMPORARY OR PROVISIONAL REMEDIES.

 

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(iv)                    EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE REFEREE SHALL DETERMINE THE MANNER IN WHICH THE REFERENCE PROCEEDING IS CONDUCTED INCLUDING THE TIME AND PLACE OF HEARINGS, THE ORDER OF PRESENTATION OF EVIDENCE, AND ALL OTHER QUESTIONS THAT ARISE WITH RESPECT TO THE COURSE OF THE REFERENCE PROCEEDING.  ALL PROCEEDINGS AND HEARINGS CONDUCTED BEFORE THE REFEREE, EXCEPT FOR TRIAL, SHALL BE CONDUCTED WITHOUT A COURT REPORTER, EXCEPT WHEN ANY PARTY SO REQUESTS A COURT REPORTER AND A TRANSCRIPT IS ORDERED, A COURT REPORTER SHALL BE USED AND THE REFEREE SHALL BE PROVIDED A COURTESY COPY OF THE TRANSCRIPT.  THE PARTY MAKING SUCH REQUEST SHALL HAVE THE OBLIGATION TO ARRANGE FOR AND PAY THE COSTS OF THE COURT REPORTER, PROVIDED THAT SUCH COSTS, ALONG WITH THE REFEREE’S FEES, SHALL ULTIMATELY BE BORNE BY THE PARTY WHO DOES NOT PREVAIL, AS DETERMINED BY THE REFEREE.

 

(v)                       THE REFEREE MAY REQUIRE ONE OR MORE PREHEARING CONFERENCES.  THE PARTIES HERETO SHALL BE ENTITLED TO DISCOVERY, AND THE REFEREE SHALL OVERSEE DISCOVERY IN ACCORDANCE WITH THE RULES OF DISCOVERY, AND SHALL ENFORCE ALL DISCOVERY ORDERS IN THE SAME MANNER AS ANY TRIAL COURT JUDGE IN PROCEEDINGS AT LAW IN THE STATE OF CALIFORNIA.

 

(vi)                    THE REFEREE SHALL APPLY THE RULES OF EVIDENCE APPLICABLE TO PROCEEDINGS AT LAW IN THE STATE OF CALIFORNIA AND SHALL DETERMINE ALL ISSUES IN ACCORDANCE WITH CALIFORNIA SUBSTANTIVE AND PROCEDURAL LAW.  THE REFEREE SHALL BE EMPOWERED TO ENTER EQUITABLE AS WELL AS LEGAL RELIEF AND RULE ON ANY MOTION WHICH WOULD BE AUTHORIZED IN A TRIAL, INCLUDING MOTIONS FOR DEFAULT JUDGMENT OR SUMMARY JUDGMENT.  THE REFEREE SHALL REPORT HIS OR HER DECISION, WHICH REPORT SHALL ALSO INCLUDE FINDINGS OF FACT AND CONCLUSIONS OF LAW.  THE REFEREE SHALL ISSUE A DECISION AND PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE, SECTION 644, THE REFEREE’S DECISION SHALL BE ENTERED BY THE COURT AS A JUDGMENT IN THE SAME MANNER AS IF THE ACTION HAD BEEN TRIED BY THE COURT.  THE FINAL JUDGMENT OR ORDER FROM ANY APPEALABLE DECISION OR ORDER ENTERED BY THE REFEREE SHALL BE FULLY APPEALABLE AS IF IT HAS BEEN ENTERED BY THE COURT.

 

(vii)                 THE PARTIES RECOGNIZE AND AGREE THAT ALL CLAIMS RESOLVED IN A GENERAL REFERENCE PROCEEDING PURSUANT HERETO WILL BE DECIDED BY A REFEREE AND NOT BY A JURY.  AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR OWN CHOICE, EACH PARTY HERETO KNOWINGLY AND VOLUNTARILY AND FOR THEIR MUTUAL BENEFIT AGREES THAT THIS REFERENCE PROVISION SHALL APPLY TO ANY DISPUTE BETWEEN THEM THAT ARISES OUT OF OR IS RELATED TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.

 

13.                                 ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

 

13.1                           Assignments and Participations.

 

(a)                                  (i)  Subject to the conditions set forth in clause (a)(ii) below, any Lender may assign and delegate to one or more assignees (each, an “Assignee”) with the prior written consent (such consent not be unreasonably withheld or delayed; it being understood that, without limitation, Administrative Borrower shall have the right to withhold its consent to any assignment if, in order for such assignment to comply with applicable law, Administrative Borrower would be required to obtain the consent of, or make any filing or registration with, any Governmental Authority) of:

 

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(A)                              Administrative Borrower; provided, that no consent of Administrative Borrower shall be required (1) if an Event of Default has occurred and is continuing, or (2) in connection with an assignment to a Person that is a Lender, an Affiliate (other than natural persons) of a Lender, or a Related Fund of such Lender; provided  further, that Administrative Borrower shall be deemed to have consented to a proposed assignment unless it objects thereto by written notice to Agent within 5 Business Days after having received notice thereof; and

 

(B)                                Agent, Swing Lender, and Issuing Bank.

 

(ii)                                  Assignments shall be subject to the following additional conditions:

 

(A)                              no assignment may be made to (i) so long as no Event of Default has occurred and is continuing, an Ineligible Institution, (ii) so long as no Event of Default has occurred and is continuing, a Competitor, or (iii) a natural person,

 

(B)                                no assignment may be made to a Loan Party or any Affiliate of a Loan Party,

 

(C)                                the amount of the Commitments and the other rights and obligations of the assigning Lender hereunder and under the other Loan Documents subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to Agent) shall be in a minimum amount (unless waived by Agent) of $5,000,000 (except such minimum amount shall not apply to (I) an assignment or delegation by any Lender to any other Lender, an Affiliate of any Lender, or a Related Fund of such Lender or (II) a group of new Lenders, each of which is an Affiliate of each other or a Related Fund of such new Lender to the extent that the aggregate amount to be assigned to all such new Lenders is at least $5,000,000);

 

(D)                               each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement;

 

(E)                                 the parties to each assignment shall execute and deliver to Agent an Assignment and Acceptance; provided, that Borrowers and Agent may continue to deal solely and directly with the assigning Lender in connection with the interest so assigned to an Assignee until written notice of such assignment, together with payment instructions, addresses, and related information with respect to the Assignee, have been given to Administrative Borrower and Agent by such Lender and the Assignee.

 

(F)                                 unless waived by Agent, the assigning Lender or Assignee has paid to Agent, for Agent’s separate account, a processing fee in the amount of $3,500; and

 

(G)                                the assignee, if it is not a Lender, shall deliver to Agent an Administrative Questionnaire in a form approved by Agent (the “Administrative Questionnaire”).

 

(b)                                 From and after the date that Agent receives the executed Assignment and Acceptance and, if applicable, payment of the required processing fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall be a “Lender” and shall have the rights and obligations of a Lender under the Loan Documents, and (ii) the assigning Lender shall, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights (except with respect to Section 10.3) and be released from any future obligations under this Agreement (and in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement and the other Loan Documents, such Lender shall cease to be a party hereto and thereto); provided, that nothing contained herein shall release any assigning Lender from obligations that survive the termination of this Agreement, including such assigning Lender’s obligations under Section 15 and Section 17.9(a).

 

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(c)                                  By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the Assignee thereunder confirm to and agree with each other and the other parties hereto as follows:  (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Loan Document furnished pursuant hereto, (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Borrower or the performance or observance by any Borrower of any of its obligations under this Agreement or any other Loan Document furnished pursuant hereto, (iii) such Assignee confirms that it has received a copy of this Agreement, together with such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance, (iv) such Assignee will, independently and without reliance upon Agent, such assigning Lender 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 this Agreement, (v) such Assignee appoints and authorizes Agent to take such actions and to exercise such powers under this Agreement and the other Loan Documents as are delegated to Agent, by the terms hereof and thereof, together with such powers as are reasonably incidental thereto, and (vi) such Assignee agrees that it will perform all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.

 

(d)                                 Immediately upon Agent’s receipt of the required processing fee, if applicable, and Agent’s receipt of the executed Assignment and Acceptance pursuant to Section 13.1(b), this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee and the resulting adjustment of the Commitments arising therefrom.  The Commitment allocated to each Assignee shall reduce such Commitments of the assigning Lender pro tanto.

 

(e)                                  Any Lender may at any time sell to one or more commercial banks, financial institutions, or other Persons (a “Participant”) participating interests in all or any portion of its Obligations, its Commitment, and the other rights and interests of that Lender (the “Originating Lender”) hereunder and under the other Loan Documents; provided, that (i) the Originating Lender shall remain a “Lender” for all purposes of this Agreement and the other Loan Documents and the Participant receiving the participating interest in the Obligations, the Commitments, and the other rights and interests of the Originating Lender hereunder shall not constitute a “Lender” hereunder or under the other Loan Documents and the Originating Lender’s obligations under this Agreement shall remain unchanged, (ii) the Originating Lender shall remain solely responsible for the performance of such obligations, (iii) Borrowers, Agent, and the Lenders shall continue to deal solely and directly with the Originating Lender in connection with the Originating Lender’s rights and obligations under this Agreement and the other Loan Documents, (iv) no Lender shall transfer or grant any participating interest under which the Participant has the right to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Loan Document, except to the extent such amendment to, or consent or waiver with respect to this Agreement or of any other Loan Document would (A) extend the final maturity date of the Obligations hereunder in which such Participant is participating, (B) reduce the interest rate applicable to the Obligations hereunder in which such Participant is participating, (C) release all or substantially all of the Collateral or guaranties (except to the extent expressly provided herein or in any of the Loan Documents) supporting the Obligations hereunder in which such Participant is participating, (D) postpone the payment of, or reduce the amount of, the interest or fees payable to such Participant through such Lender (other than a waiver of default interest), or (E) decreases the amount or postpones the due dates of scheduled principal repayments or prepayments or premiums payable to such Participant through such Lender, (v) no participation shall be sold to an Ineligible Institution, a Competitor, or a natural person, (vi) no participation shall be sold to a Loan Party or any Affiliate of a Loan Party, and (vii) all amounts payable by Borrowers hereunder shall be determined as if such Lender had not sold such participation, except that, if amounts outstanding under this Agreement are due and unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, 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

 

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participating interest were owing directly to it as a Lender under this Agreement.  The rights of any Participant only shall be derivative through the Originating Lender with whom such Participant participates and no Participant shall have any rights under this Agreement or the other Loan Documents or any direct rights as to the other Lenders, Agent, Borrowers, the Collateral, or otherwise in respect of the Obligations.  No Participant shall have the right to participate directly in the making of decisions by the Lenders among themselves.

 

(f)                                    In connection with any such assignment or participation or proposed assignment or participation or any grant of a security interest in, or pledge of, its rights under and interest in this Agreement, a Lender may, subject to the provisions of Section 17.9, disclose all documents and information which it now or hereafter may have relating to Parent and its Subsidiaries and their respective businesses.

 

(g)                                 Any other provision in this Agreement notwithstanding, any Lender may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement in favor of any Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Bank or U.S. Treasury Regulation 31 CFR §203.24, and such Federal Reserve Bank may enforce such pledge or security interest in any manner permitted under applicable law.

 

13.2                           Successors.  This Agreement shall bind and inure to the benefit of the respective successors and assigns of each of the parties; provided, that no Borrower may assign this Agreement or any rights or duties hereunder without the Lenders’ prior written consent and any prohibited assignment shall be absolutely void ab initio.  No consent to assignment by the Lenders shall release any Borrower from its Obligations.  A Lender may assign this Agreement and the other Loan Documents and its rights and duties hereunder and thereunder pursuant to Section 13.1 and, except as expressly required pursuant to Section 13.1, no consent or approval by any Borrower is required in connection with any such assignment.

 

14.                                 AMENDMENTS; WAIVERS.

 

14.1                           Amendments and Waivers.

 

(a)                                  No amendment, waiver or other modification of any provision of this Agreement or any other Loan Document (other than Bank Product Agreements or the Fee Letter), and no consent with respect to any departure by any Borrower therefrom, shall be effective unless the same shall be in writing and signed by the Required Lenders (or by Agent at the written request of the Required Lenders) and the Loan Parties that are party thereto and then any such waiver or consent shall be effective, but only in the specific instance and for the specific purpose for which given; provided, that no such waiver, amendment, or consent shall, unless in writing and signed by all of the Lenders directly affected thereby and all of the Loan Parties that are party thereto, do any of the following:

 

(i)                           increase the amount of or extend the expiration date of any Commitment of any Lender or amend, modify, or eliminate the last sentence of Section 2.4(c),

 

(ii)                        postpone or delay any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees, or other amounts due hereunder or under any other Loan Document,

 

(iii)                     reduce the principal of, or the rate of interest on, any loan or other extension of credit hereunder, or reduce any fees or other amounts payable hereunder or under any other Loan Document (except in connection with the waiver of applicability of Section 2.6(c) (which waiver shall be effective with the written consent of the Required Lenders),

 

(iv)                    amend, modify, or eliminate this Section or any provision of this Agreement providing for consent or other action by all Lenders,

 

(v)                       amend, modify, or eliminate Section 3.1 or Section 3.2,

 

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(vi)                    amend, modify, or eliminate Section 15.11,

 

(vii)                 other than as permitted by Section 15.11, release Agent’s Lien in and to any of the Collateral,

 

(viii)              amend, modify, or eliminate the definitions of “Required Lenders”, or “Pro Rata Share”,

 

(ix)                      contractually subordinate any of Agent’s Liens,

 

(x)                         other than in connection with a merger, liquidation, dissolution or sale of such Person expressly permitted by the terms hereof or the other Loan Documents, release any Borrower or any Guarantor from any obligation for the payment of money or consent to the assignment or transfer by any Borrower or any Guarantor of any of its rights or duties under this Agreement or the other Loan Documents,

 

(xi)                      amend, modify, or eliminate any of the provisions of Section 2.4(b)(i) or (ii) or Section 2.4(e) or (f),

 

(xii)                   amend, modify, or eliminate any of the provisions of Section 13.1 with respect to assignments to, or participations with, Persons who are a Loan Party or an Affiliate of a Loan Party, or

 

(xiii)                the definition of Borrowing Base or any of the defined terms (including the definitions of Eligible Accounts, Eligible Finished Goods Inventory, Eligible Inventory, Eligible Raw Materials Inventory, and Eligible Work-in-Process Inventory) that are used in such definition to the extent that any such change results in more credit being made available to Borrowers based upon the Borrowing Base, but not otherwise, or the definition of Maximum Revolver Amount, or change Section 2.1(c).

 

(b)                                 No amendment, waiver, modification, or consent shall amend, modify, waive, or eliminate,

 

(i)                           the definition of, or any of the terms or provisions of, the Fee Letter, without the written consent of Agent and Borrowers (and shall not require the written consent of any of the Lenders),

 

(ii)                        the terms or provisions of the Intercreditor Agreement, without the written consent of Agent and the Required Lenders, and

 

(iii)                     any provision of Section 15 pertaining to Agent, or any other rights or duties of Agent under this Agreement or the other Loan Documents, without the written consent of Agent, Borrowers, and the Required Lenders.

 

(c)                                  No amendment, waiver, modification, elimination, or consent shall amend, modify, or waive any provision of this Agreement or the other Loan Documents pertaining to Issuing Bank, or any other rights or duties of Issuing Bank under this Agreement or the other Loan Documents, without the written consent of Issuing Bank, Agent, Borrowers, and the Required Lenders.

 

(d)                                 No amendment, waiver, modification, elimination, or consent shall amend, modify, or waive any provision of this Agreement or the other Loan Documents pertaining to Swing Lender, or any other rights or duties of Swing Lender under this Agreement or the other Loan Documents, without the written consent of Swing Lender, Agent, Borrowers, and the Required Lenders.

 

(e)                                  Anything in this Section 14.1 to the contrary notwithstanding, (i) any amendment, modification, elimination, waiver, consent, termination, or release of, or with respect to, any provision of this Agreement or any other Loan Document that relates only to the relationship of the Lender Group among

 

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themselves, and that does not affect the rights or obligations of any Borrower, shall not require consent by or the agreement of any Loan Party, and (ii) any amendment, waiver, modification, elimination, or consent of or with respect to any provision of this Agreement or any other Loan Document may be entered into without the consent of, or over the objection of, any Defaulting Lender other than any of the matters governed by Section 14.1(a)(i) through (iii) that affect such Lender..

 

14.2                           Replacement of Certain Lenders.

 

(a)                                  If (i) any action to be taken by the Lender Group or Agent hereunder requires the consent, authorization, or agreement of all Lenders or all Lenders affected thereby and if such action has received the consent, authorization, or agreement of the Required Lenders but not of all Lenders or all Lenders affected thereby, (ii) any Lender makes a claim for compensation under Section 16, or (iii) any Lender is at such time a Defaulting Lender, then Borrowers or Agent, upon at least 5 Business Days prior irrevocable notice, may permanently replace such Defaulting Lender, any Lender that failed to give its consent, authorization, or agreement (a “Non-Consenting Lender”) or any Lender that made a claim for compensation (a “Tax Lender”) with one or more Replacement Lenders, and the Non-Consenting Lender or Tax Lender, as applicable, shall have no right to refuse to be replaced hereunder.  Such notice to replace the Defaulting Lender, Non-Consenting Lender or Tax Lender, as applicable, shall specify an effective date for such replacement, which date shall not be later than 15 Business Days after the date such notice is given.

 

(b)                                 Prior to the effective date of such replacement, the Defaulting Lender, Non-Consenting Lender or Tax Lender, as applicable, and each Replacement Lender shall execute and deliver an Assignment and Acceptance, subject only to the Defaulting Lender, Non-Consenting Lender or Tax Lender, as applicable, being repaid in full its share of the outstanding Obligations (without any premium or penalty of any kind whatsoever, but including  (i) all interest, fees and other amounts that may be due in payable in respect thereof, and (ii) an assumption of its Pro Rata Share of participations in the Letters of Credit).  If the Defaulting Lender, Non-Consenting Lender or Tax Lender, as applicable, shall refuse or fail to execute and deliver any such Assignment and Acceptance prior to the effective date of such replacement, Agent may, but shall not be required to, execute and deliver such Assignment and Acceptance in the name or and on behalf of the Defaulting Lender, Non-Consenting Lender or Tax Lender, as applicable, and irrespective of whether Agent executes and delivers such Assignment and Acceptance, the Defaulting Lender, Non-Consenting Lender or Tax Lender, as applicable, shall be deemed to have executed and delivered such Assignment and Acceptance.  The replacement of any Defaulting Lender, Non-Consenting Lender or Tax Lender, as applicable, shall be made in accordance with the terms of Section 13.1.  Until such time as one or more Replacement Lenders shall have acquired all of the Obligations, the Commitments, and the other rights and obligations of the Defaulting Lender, Non-Consenting Lender or Tax Lender, as applicable, hereunder and under the other Loan Documents, the Defaulting Lender, Non-Consenting Lender or Tax Lender, as applicable, shall remain obligated to make the Defaulting Lender’s, Non-Consenting Lender’s or Tax Lender’s, as applicable, Pro Rata Share of Revolving Loans and to purchase a participation in each Letter of Credit, in an amount equal to its Pro Rata Share of participations in such Letters of Credit.

 

14.3                           No Waivers; Cumulative Remedies.  No failure by Agent or any Lender to exercise any right, remedy, or option under this Agreement or any other Loan Document, or delay by Agent or any Lender in exercising the same, will operate as a waiver thereof.  No waiver by Agent or any Lender will be effective unless it is in writing, and then only to the extent specifically stated.  No waiver by Agent or any Lender on any occasion shall affect or diminish Agent’s and each Lender’s rights thereafter to require strict performance by each Borrower of any provision of this Agreement.  Agent’s and each Lender’s rights under this Agreement and the other Loan Documents will be cumulative and not exclusive of any other right or remedy that Agent or any Lender may have.

 

15.                                 AGENT; THE LENDER GROUP.

 

15.1                           Appointment and Authorization of Agent.  Each Lender hereby designates and appoints WFCF as its agent under this Agreement and the other Loan Documents and each Lender hereby

 

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irrevocably authorizes (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to designate, appoint, and authorize) Agent to execute and deliver each of the other Loan Documents on its behalf and to take such other 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 Agent by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto.  Agent agrees to act as agent for and on behalf of the Lenders (and the Bank Product Providers) on the conditions contained in this Section 15.  Any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document notwithstanding, Agent shall not have any duties or responsibilities, except those expressly set forth herein or in the other Loan Documents, nor shall Agent have or be deemed to have any fiduciary relationship with any Lender (or Bank Product Provider), 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.  Without limiting the generality of the foregoing, the use of the term “agent” in this Agreement or the other Loan Documents with reference to Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law.  Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only a representative relationship between independent contracting parties.  Each Lender hereby further authorizes (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to authorize) Agent to act as the secured party under each of the Loan Documents that create a Lien on any item of Collateral.  Except as expressly otherwise provided in this Agreement, Agent shall have and may use its sole discretion with respect to exercising or refraining from exercising any discretionary rights or taking or refraining from taking any actions that Agent expressly is entitled to take or assert under or pursuant to this Agreement and the other Loan Documents.  Without limiting the generality of the foregoing, or of any other provision of the Loan Documents that provides rights or powers to Agent, Lenders agree that Agent shall have the right to exercise the following powers as long as this Agreement remains in effect:  (a) maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Obligations, the Collateral, payments and proceeds of Collateral, and related matters, (b) execute or file any and all financing or similar statements or notices, amendments, renewals, supplements, documents, instruments, proofs of claim, notices and other written agreements with respect to the Loan Documents, (c) make Revolving Loans, for itself or on behalf of Lenders, as provided in the Loan Documents, (d) exclusively receive, apply, and distribute payments and proceeds of the Collateral as provided in the Loan Documents, (e) open and maintain such bank accounts and cash management arrangements as Agent deems necessary and appropriate in accordance with the Loan Documents for the foregoing purposes, (f) perform, exercise, and enforce any and all other rights and remedies of the Lender Group with respect to Parent or its Subsidiaries, the Obligations, the Collateral, or otherwise related to any of same as provided in the Loan Documents, and (g) incur and pay such Lender Group Expenses as Agent may deem necessary or appropriate for the performance and fulfillment of its functions and powers pursuant to the Loan Documents.

 

15.2                           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 as long as such selection was made without gross negligence or willful misconduct.

 

15.3                           Liability of Agent.  None of the Agent-Related Persons 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 for its own gross negligence, bad faith or willful misconduct), or (b) be responsible in any manner to any of the Lenders (or Bank Product Providers) for any recital, statement, representation or warranty made by Parent or any of its Subsidiaries or Affiliates, or any officer or director 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 for any failure of Parent or its Subsidiaries or any other party to any Loan Document to perform its obligations hereunder or thereunder.  No Agent-Related

 

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Person shall be under any obligation to any Lenders (or Bank Product Providers) 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 books and records or properties of Parent or its Subsidiaries.

 

15.4                           Reliance by Agent.  Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, telefacsimile or other electronic method of transmission, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent, or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to any Lender), independent accountants and other experts 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 Agent shall first receive such advice or concurrence of the Lenders as it deems appropriate and until such instructions are received, Agent shall act, or refrain from acting, as it deems advisable.  If Agent so requests, it shall first be indemnified to its reasonable satisfaction by the Lenders (and, if it so elects, the Bank Product Providers) against any and all liability and expense that 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 the Required Lenders and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Lenders (and Bank Product Providers).

 

15.5                     Notice of Default or Event of Default.  Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest, fees, and expenses required to be paid to Agent for the account of the Lenders and, except with respect to Events of Default of which Agent has actual knowledge, unless Agent shall have received written notice from a Lender or any Borrower referring to this Agreement, describing such Default or Event of Default, and stating that such notice is a “notice of default.”  Agent promptly will notify the Lenders of its receipt of any such notice or of any Event of Default of which Agent has actual knowledge.  If any Lender obtains actual knowledge of any Event of Default, such Lender promptly shall notify the other Lenders and Agent of such Event of Default.  Each Lender shall be solely responsible for giving any notices to its Participants, if any.  Subject to Section 15.4, Agent shall take such action with respect to such Default or Event of Default as may be requested by the Required Lenders in accordance with Section 9; 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 Default or Event of Default as it shall deem advisable.

 

15.6                     Credit Decision.  Each Lender (and Bank Product Provider) acknowledges that none of the Agent-Related Persons has made any representation or warranty to it, and that no act by Agent hereinafter taken, including any review of the affairs of Parent and its Subsidiaries or Affiliates, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender (or Bank Product Provider).  Each Lender represents (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to represent) to Agent that it has, independently and without reliance upon any Agent-Related Person and based on such due diligence, 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 any Borrower or any other Person party to a Loan Document, and all applicable bank regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to Borrowers.  Each Lender also represents (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to represent) that it will, independently and without reliance upon any Agent-Related Person 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 any Borrower or any other Person party to a Loan Document.  Except for notices, reports, and other documents expressly herein required to be furnished to the Lenders by Agent, Agent shall not have any duty or responsibility to provide any Lender (or Bank Product Provider) with

 

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any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any Borrower or any other Person party to a Loan Document that may come into the possession of any of the Agent-Related Persons.  Each Lender acknowledges (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that Agent does not have any duty or responsibility, either initially or on a continuing basis (except to the extent, if any, that is expressly specified herein) to provide such Lender (or Bank Product Provider) with any credit or other information with respect to any Borrower, its Affiliates or any of their respective business, legal, financial or other affairs, and irrespective of whether such information came into Agent’s or its Affiliates’ or representatives’ possession before or after the date on which such Lender became a party to this Agreement (or such Bank Product Provider entered into a Bank Product Agreement).

 

15.7                           Costs and Expenses; Indemnification.  Agent may incur and pay Lender Group Expenses to the extent Agent reasonably deems necessary or appropriate for the performance and fulfillment of its functions, powers, and obligations pursuant to the Loan Documents, including court costs, attorneys’ fees and expenses, fees and expenses of financial accountants, advisors, consultants, and appraisers, costs of collection by outside collection agencies, auctioneer fees and expenses, and costs of security guards or insurance premiums paid to maintain the Collateral, whether or not Borrowers are obligated to reimburse Agent or Lenders for such expenses pursuant to this Agreement or otherwise.  Agent is authorized and directed to deduct and retain sufficient amounts from payments or proceeds of the Collateral received by Agent to reimburse Agent for such out-of-pocket costs and expenses prior to the distribution of any amounts to Lenders (or Bank Product Providers).  In the event Agent is not reimbursed for such costs and expenses by Parent or its Subsidiaries, each Lender hereby agrees that it is and shall be obligated to pay to Agent such Lender’s ratable thereof.  Whether or not the transactions contemplated hereby are consummated, each of the Lenders, on a ratable basis, shall indemnify and defend the Agent-Related Persons (to the extent not reimbursed by or on behalf of Borrowers and without limiting the obligation of Borrowers to do so) from and against any and all Indemnified Liabilities; provided, that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities resulting solely from such Person’s gross negligence or willful misconduct nor shall any Lender be liable for the obligations of any Defaulting Lender in failing to make a Revolving Loan or other extension of credit hereunder.  Without limitation of the foregoing, each Lender shall reimburse Agent upon demand for such Lender’s ratable share of any costs or out of pocket expenses (including attorneys, accountants, advisors, and consultants fees and expenses) 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 or any other Loan Document to the extent that Agent is not reimbursed for such expenses by or on behalf of Borrowers.  The undertaking in this Section shall survive the payment of all Obligations hereunder and the resignation or replacement of Agent.

 

15.8                           Agent in Individual Capacity.  WFCF and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, provide Bank Products to, acquire Equity Interests in, and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with Parent and its Subsidiaries and Affiliates and any other Person party to any Loan Document as though WFCF were not Agent hereunder, and, in each case, without notice to or consent of the other members of the Lender Group.  The other members of the Lender Group acknowledge (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, pursuant to such activities, WFCF or its Affiliates may receive information regarding Parent or its Affiliates or any other Person party to any Loan Documents that is subject to confidentiality obligations in favor of Parent or its Affiliates or such other Person and that prohibit the disclosure of such information to the Lenders (or Bank Product Providers), and the Lenders acknowledge (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, in such circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver Agent will use its reasonable best efforts to obtain), Agent shall not be under any obligation to provide such information to them.  The terms “Lender” and “Lenders” include WFCF in its individual capacity.

 

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15.9                     Successor Agent.  Agent may resign as Agent upon 30 days (10 days if an Event of Default has occurred and is continuing) prior written notice to the Lenders (unless such notice is waived by the Required Lenders) and Administrative Borrower (unless such notice is waived by Borrowers) and without any notice to the Bank Product Providers.  If Agent resigns under this Agreement, the Required Lenders shall be entitled, with (so long as no Event of Default has occurred and is continuing) the consent of Administrative Borrower (such consent not to be unreasonably withheld, delayed, or conditioned), appoint a successor Agent for the Lenders (and the Bank Product Providers).  If, at the time that Agent’s resignation is effective, it is acting as Issuing Bank or the Swing Lender, such resignation shall also operate to effectuate its resignation as Issuing Bank or the Swing Lender, as applicable, and it shall automatically be relieved of any further obligation to issue Letters of Credit or to make Swing Loans.  If no successor Agent is appointed prior to the effective date of the resignation of Agent, Agent may appoint, after consulting with the Lenders and Administrative Borrower, a successor Agent.  If Agent has materially breached or failed to perform any material provision of this Agreement or of applicable law, the Required Lenders may agree in writing to remove and replace Agent with a successor Agent from among the Lenders with (so long as no Event of Default has occurred and is continuing) the consent of Administrative Borrower (such consent not to be unreasonably withheld, delayed, or conditioned).  In any such event, 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 provisions of this Section 15 shall 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 the Lenders shall perform all of the duties of Agent hereunder until such time, if any, as the Lenders appoint a successor Agent as provided for above.

 

15.10               Lender in Individual Capacity.  Any Lender and its respective Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, provide Bank Products to, acquire Equity Interests in and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with Parent and its Subsidiaries and Affiliates and any other Person party to any Loan Documents as though such Lender were not a Lender hereunder without notice to or consent of the other members of the Lender Group (or the Bank Product Providers).  The other members of the Lender Group acknowledge (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, pursuant to such activities, such Lender and its respective Affiliates may receive information regarding Parent or its Affiliates or any other Person party to any Loan Documents that is subject to confidentiality obligations in favor of Parent or its Affiliates or such other Person and that prohibit the disclosure of such information to the Lenders, and the Lenders acknowledge (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, in such circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver such Lender will use its reasonable best efforts to obtain), such Lender shall not be under any obligation to provide such information to them.

 

15.11                     Collateral Matters.

 

(a)                                  The Lenders hereby irrevocably authorize (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to authorize) Agent to release any Lien on any Collateral (i) upon the termination of the Commitments and payment and satisfaction in full by Borrowers of all of the Obligations, (ii) constituting property being sold or disposed of if a release is required or desirable in connection therewith and if Borrowers certify to Agent that the sale or disposition is permitted under Section 6.4 (and Agent may rely conclusively on any such certificate, without further inquiry), (iii) constituting property in which Parent or its Subsidiaries owned no interest at the time Agent’s Lien was granted nor at any time thereafter, or (iv) constituting property leased to Parent or its Subsidiaries under a lease that has expired or is terminated in a transaction permitted under this Agreement.  The Loan Parties and the Lenders hereby irrevocably authorize (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to authorize) Agent, based upon the instruction of the Required Lenders, to (a) consent to, credit bid or

 

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purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral at any sale thereof conducted under the provisions of the Bankruptcy Code, including under Section 363 of the Bankruptcy Code, (b) credit bid or purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral at any sale or other disposition thereof conducted under the provisions of the Code, including pursuant to Sections 9-610 or 9-620 of the Code, or (c) credit bid or purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral at any other sale or foreclosure conducted by Agent (whether by judicial action or otherwise) in accordance with applicable law.  In connection with any such credit bid or purchase, (i) the Obligations owed to the Lenders and the Bank Product Providers shall be entitled to be, and shall be, credit bid on a ratable basis (with Obligations with respect to contingent or unliquidated claims being estimated for such purpose if the fixing or liquidation thereof would not unduly delay the ability of Agent to credit bid or purchase at such sale or other disposition of the Collateral and, if such claims cannot be estimated without unduly delaying the ability of Agent to credit bid, then such claims shall be disregarded, not credit bid, and not entitled to any interest in the asset or assets purchased by means of such credit bid) and the Lenders and the Bank Product Providers whose Obligations are credit bid shall be entitled to receive interests (ratably based upon the proportion of their Obligations credit bid in relation to the aggregate amount of Obligations so credit bid) in the asset or assets so purchased (or in the Equity Interests of the acquisition vehicle or vehicles that are used to consummate such purchase), and (ii) Agent, based upon the instruction of the Required Lenders, may accept non-cash consideration, including debt and equity securities issued by such acquisition vehicle or vehicles and in connection therewith Agent may reduce the Obligations owed to the Lenders and the Bank Product Providers (ratably based upon the proportion of their Obligations credit bid in relation to the aggregate amount of Obligations so credit bid) based upon the value of such non-cash consideration.  Except as provided above, Agent will not execute and deliver a release of any Lien on any Collateral without the prior written authorization of (y) if the release is of all or substantially all of the Collateral, all of the Lenders (without requiring the authorization of the Bank Product Providers), or (z) otherwise, the Required Lenders (without requiring the authorization of the Bank Product Providers).  Upon request by Agent or any Borrower at any time, the Lenders will (and if so requested, the Bank Product Providers will) confirm in writing Agent’s authority to release any such Liens on particular types or items of Collateral pursuant to this Section 15.11; provided, that (1) Agent shall not be required to execute any document necessary to evidence such release on terms that, in Agent’s opinion, would expose Agent to liability or create any obligation or entail any consequence other than the release of such Lien without recourse, representation, or warranty, and (2) such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of any Borrower in respect of) all interests retained by any Borrower, including, the proceeds of any sale, all of which shall continue to constitute part of the Collateral.  The Lenders further hereby irrevocably authorize (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to authorize) Agent, at its option and in its sole discretion, to subordinate any Lien granted to or held by Agent under any Loan Document to the holder of any Permitted Lien on such property if such Permitted Lien secures Permitted Purchase Money Indebtedness.

 

(b)                                 Agent shall have no obligation whatsoever to any of the Lenders (or the Bank Product Providers) to assure that the Collateral exists or is owned by Parent or its Subsidiaries or is cared for, protected, or insured or has been encumbered, or that Agent’s Liens have been properly or sufficiently or lawfully created, perfected, protected, or enforced or are entitled to any particular priority, or that any particular items of Collateral meet the eligibility criteria applicable in respect thereof or whether to impose, maintain, reduce, or eliminate any particular reserve hereunder or whether the amount of any such reserve is appropriate or not, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers granted or available to Agent pursuant to any of the Loan Documents, it being understood and agreed that in respect of the Collateral, or any act, omission, or event related thereto, subject to the terms and conditions contained herein, Agent may act in any manner it may deem appropriate, in its sole discretion given Agent’s own interest in the Collateral in its capacity as one of the Lenders and that Agent shall have no other duty or liability whatsoever to any Lender (or Bank Product Provider) as to any of the foregoing, except as otherwise provided herein.

 

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15.12                     Restrictions on Actions by Lenders; Sharing of Payments.

 

(a)                                  Each of the Lenders agrees that it shall not, without the express written consent of Agent, and that it shall, to the extent it is lawfully entitled to do so, upon the written request of Agent, set off against the Obligations, any amounts owing by such Lender to Parent or its Subsidiaries or any deposit accounts of Parent or its Subsidiaries now or hereafter maintained with such Lender.  Each of the Lenders further agrees that it shall not, unless specifically requested to do so in writing by Agent, take or cause to be taken any action, including, the commencement of any legal or equitable proceedings to enforce any Loan Document against any Borrower or any Guarantor or to foreclose any Lien on, or otherwise enforce any security interest in, any of the Collateral.

 

(b)                                 If, at any time or times any Lender shall receive (i) by payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments with respect to the Obligations, except for any such proceeds or payments received by such Lender from Agent pursuant to the terms of this Agreement, or (ii) payments from Agent in excess of such Lender’s Pro Rata Share of all such distributions by Agent, such Lender promptly shall (A) turn the same over to Agent, in kind, and with such endorsements as may be required to negotiate the same to Agent, or in immediately available funds, as applicable, for the account of all of the Lenders and for application to the Obligations in accordance with the applicable provisions of this Agreement, or (B) purchase, without recourse or warranty, an undivided interest and participation in the Obligations owed to the other Lenders so that such excess payment received shall be applied ratably as among the Lenders in accordance with their Pro Rata Shares; provided, that to the extent that such excess payment received by the purchasing party is thereafter recovered from it, those purchases of participations shall be rescinded in whole or in part, as applicable, and the applicable portion of the purchase price paid therefor shall be returned to such purchasing party, but without interest except to the extent that such purchasing party is required to pay interest in connection with the recovery of the excess payment.

 

15.13               Agency for Perfection.  Agent hereby appoints each other Lender (and each Bank Product Provider) as its agent (and each Lender hereby accepts (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to accept) such appointment) for the purpose of perfecting Agent’s Liens in assets which, in accordance with Article 8 or Article 9, as applicable, of the Code can be perfected by possession or control.  Should any Lender obtain possession or control of any such Collateral, such Lender shall notify Agent thereof, and, promptly upon Agent’s request therefor shall deliver possession or control of such Collateral to Agent or in accordance with Agent’s instructions.

 

15.14               Payments by Agent to the Lenders.  All payments to be made by Agent to the Lenders (or Bank Product Providers) shall be made by bank wire transfer of immediately available funds pursuant to such wire transfer instructions as each party may designate for itself by written notice to Agent.  Concurrently with each such payment, Agent shall identify whether such payment (or any portion thereof) represents principal, premium, fees, or interest of the Obligations.

 

15.15               Concerning the Collateral and Related Loan Documents.  Each member of the Lender Group authorizes and directs Agent to enter into this Agreement and the other Loan Documents.  Each member of the Lender Group agrees (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to agree) that any action taken by Agent in accordance with the terms of this Agreement or the other Loan Documents relating to the Collateral and the exercise by Agent of its powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of the Lenders (and such Bank Product Provider).

 

15.16               Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information.  By becoming a party to this Agreement, each Lender:

 

(a)                                  is deemed to have requested that Agent furnish such Lender, promptly after it becomes available, a copy of each field examination report respecting Parent or its Subsidiaries (each, a “Report”) prepared by or at the request of Agent, and Agent shall so furnish each Lender with such Reports,

 

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(b)                                 expressly agrees and acknowledges that Agent does not (i) make any representation or warranty as to the accuracy of any Report, and (ii) shall not be liable for any information contained in any Report,

 

(c)                                  expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that Agent or other party performing any field examination will inspect only specific information regarding Parent and its Subsidiaries and will rely significantly upon Parent’s and its Subsidiaries’ books and records, as well as on representations of each Borrower’s personnel,

 

(d)                                 agrees to keep all Reports and other material, non-public information regarding Parent and its Subsidiaries and their operations, assets, and existing and contemplated business plans in a confidential manner in accordance with Section 17.9, and

 

(e)                                  without limiting the generality of any other indemnification provision contained in this Agreement, agrees:  (i) to hold Agent and any other Lender preparing a Report harmless from any action the indemnifying Lender may take or fail to take or any conclusion the indemnifying Lender may reach or draw from any Report in connection with any loans or other credit accommodations that the indemnifying Lender has made or may make to Borrowers, or the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or loans of Borrowers, and (ii) to pay and protect, and indemnify, defend and hold Agent, and any such other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including, attorneys’ fees and costs) incurred by Agent and any such other Lender preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

 

(f)                                    In addition to the foregoing, (x) any Lender may from time to time request of Agent in writing that Agent provide to such Lender a copy of any report or document provided by Parent or its Subsidiaries to Agent that has not been contemporaneously provided by Parent or such Subsidiary to such Lender, and, upon receipt of such request, Agent promptly shall provide a copy of same to such Lender, (y) to the extent that Agent is entitled, under any provision of the Loan Documents, to request additional reports or information from Parent or its Subsidiaries, any Lender may, from time to time, reasonably request Agent to exercise such right as specified in such Lender’s notice to Agent, whereupon Agent promptly shall request of Parent or such Subsidiary the additional reports or information reasonably specified by such Lender, and, upon receipt thereof from Parent or such Subsidiary, Agent promptly shall provide a copy of same to such Lender, and (z) any time that Agent renders to Borrowers a statement regarding the Loan Account, Agent shall send a copy of such statement to each Lender.

 

15.17                     Several Obligations; No Liability.  Notwithstanding that certain of the Loan Documents now or hereafter may have been or will be executed only by or in favor of Agent in its capacity as such, and not by or in favor of the Lenders, any and all obligations on the part of Agent (if any) to make any credit available hereunder shall constitute the several (and not joint) obligations of the respective Lenders on a ratable basis, according to their respective Commitments, to make an amount of such credit not to exceed, in principal amount, at any one time outstanding, the amount of their respective Commitments.  Nothing contained herein shall confer upon any Lender any interest in, or subject any Lender to any liability for, or in respect of, the business, assets, profits, losses, or liabilities of any other Lender.  Each Lender shall be solely responsible for notifying its Participants of any matters relating to the Loan Documents to the extent any such notice may be required, and no Lender shall have any obligation, duty, or liability to any Participant of any other Lender.  Except as provided in Section 15.7, no member of the Lender Group shall have any liability for the acts of any other member of the Lender Group.  No Lender shall be responsible to any Borrower or any other Person for any failure by any other Lender (or Bank Product Provider) to fulfill its obligations to make credit available hereunder, nor to advance for such Lender (or Bank Product Provider) or on its behalf, nor to take any other action on behalf of such Lender (or Bank Product Provider) hereunder or in connection with the financing contemplated herein.

 

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16.                                 WITHHOLDING TAXES.

 

16.1                           Payments.  All payments made by any Borrower hereunder or under any note or other Loan Document will be made without setoff, counterclaim, or other defense.  In addition, all such payments will be made free and clear of, and without deduction or withholding for, any present or future Taxes, and in the event any deduction or withholding of Taxes is required, Borrowers shall comply with the next sentence of this Section 16.  If any Taxes are so levied or imposed, Borrowers agree to pay the full amount of such Taxes and such additional amounts as may be necessary so that every payment of all amounts due under this Agreement, any note, or Loan Document, including any amount paid pursuant to this Section 16 after withholding or deduction for or on account of any Taxes, will not be less than the amount provided for herein; provided, that Borrowers shall not be required to increase any such amounts if the increase in such amount payable results from Agent’s or such Lender’s own willful misconduct or gross negligence (as finally determined by a court of competent jurisdiction).  Borrowers will furnish to Agent as promptly as possible after the date the payment of any Tax is due pursuant to applicable law, certified copies of tax receipts evidencing such payment by Borrowers.  Borrowers agree to pay any present or future stamp, value added or documentary taxes or any other excise or property taxes, charges, or similar levies that arise from any payment made hereunder or from the execution, delivery, performance, recordation, or filing of, or otherwise with respect to this Agreement or any other Loan Document.

 

16.2                           Exemptions.

 

(a)                                  Each Lender or Participant agrees with and in favor of Agent, to deliver to Agent (or, in the case of a Participant, to the Lender granting the participation only) one of the following before receiving its first payment under this Agreement:

 

(i)                           if such Lender or Participant is entitled to claim an exemption from United States withholding tax pursuant to the portfolio interest exception, (A) a statement of the Lender or Participant, signed under penalty of perjury, that it is not a (I) a “bank” as described in Section 881(c)(3)(A) of the IRC, (II) a 10% shareholder of any Borrower (within the meaning of Section 871(h)(3)(B) of the IRC), or (III) a controlled foreign corporation related to any Borrower within the meaning of Section 864(d)(4) of the IRC, and (B) a properly completed and executed IRS Form W-8BEN or Form W-8IMY (with proper attachments);

 

(ii)                        if such Lender or Participant is entitled to claim an exemption from, or a reduction of, withholding tax under a United States tax treaty, a properly completed and executed copy of IRS Form W-8BEN;

 

(iii)                     if such Lender or Participant is entitled to claim that interest paid under this Agreement is exempt from United States withholding tax because it is effectively connected with a United States trade or business of such Lender, a properly completed and executed copy of IRS Form W-8ECI;

 

(iv)                    if such Lender or Participant is entitled to claim that interest paid under this Agreement is exempt from United States withholding tax because such Lender or Participant serves as an intermediary, a properly completed and executed copy of IRS Form W-8IMY (with proper attachments); or

 

(v)                      a properly completed and executed copy of any other form or forms, including IRS Form W-9, as may be required under the IRC or other laws of the United States as a condition to exemption from, or reduction of, United States withholding or backup withholding tax.

 

(b)                                 Each Lender or Participant shall provide new forms (or successor forms) upon the expiration or obsolescence of any previously delivered forms and to promptly notify Agent (or, in the case of a Participant, to the Lender granting the participation only) of any change in circumstances (including the designation of a new lending office) which would modify or render invalid any claimed exemption or reduction.

 

(c)                                  If a Lender or Participant claims an exemption from withholding tax in a jurisdiction other than the United States, such Lender or such Participant agrees with and in favor of Agent, to

 

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deliver to Agent (or, in the case of a Participant, to the Lender granting the participation only) any such form or forms, as may be required under the laws of such jurisdiction as a condition to exemption from, or reduction of, foreign withholding or backup withholding tax before receiving its first payment under this Agreement, but only if such Lender or such Participant is legally able to deliver such forms, provided, that nothing in this Section 16(c) shall require a Lender or Participant to disclose any information that it deems to be confidential (including without limitation, its tax returns).  Each Lender and each Participant shall provide new forms (or successor forms) upon the expiration or obsolescence of any previously delivered forms and to promptly notify Agent (or, in the case of a Participant, to the Lender granting the participation only) of any change in circumstances which would modify or render invalid any claimed exemption or reduction.

 

(d)                                 If a Lender or Participant claims exemption from, or reduction of, withholding tax and such Lender or Participant sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of Borrowers to such Lender or Participant, such Lender or Participant agrees to notify Agent (or, in the case of a sale of a participation interest, to the Lender granting the participation only) of the percentage amount in which it is no longer the beneficial owner of Obligations of Borrowers to such Lender or Participant.  To the extent of such percentage amount, Agent will treat such Lender’s or such Participant’s documentation provided pursuant to Section 16.2(a) or 16.2(c) as no longer valid.  With respect to such percentage amount, such Participant or Assignee may provide new documentation, pursuant to Section 16.2(a) or 16.2(c), if applicable.  Borrowers agree that each Participant shall be entitled to the benefits of this Section 16 with respect to its participation in any portion of the Commitments and the Obligations so long as such Participant complies with the obligations set forth in this Section 16 with respect thereto.

 

16.3                           Reductions.

 

(a)                                  If a Lender or a Participant is entitled to a reduction in the applicable withholding tax, Agent (or, in the case of a Participant, to the Lender granting the participation) may withhold from any interest payment to such Lender or such Participant an amount equivalent to the applicable withholding tax after taking into account such reduction.  If the forms or other documentation required by Section 16.2(a) or 16.2(c) are not delivered to Agent (or, in the case of a Participant, to the Lender granting the participation), then Agent (or, in the case of a Participant, to the Lender granting the participation) may withhold from any interest payment to such Lender or such Participant not providing such forms or other documentation an amount equivalent to the applicable withholding tax.

 

(b)                                 If the IRS or any other Governmental Authority of the United States or other jurisdiction asserts a claim that Agent (or, in the case of a Participant, to the Lender granting the participation) did not properly withhold tax from amounts paid to or for the account of any Lender or any Participant due to a failure on the part of the Lender or any Participant (because the appropriate form was not delivered, was not properly executed, or because such Lender failed to notify Agent (or such Participant failed to notify the Lender granting the participation) of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason) such Lender shall indemnify and hold Agent harmless (or, in the case of a Participant, such Participant shall indemnify and hold the Lender granting the participation harmless) for all amounts paid, directly or indirectly, by Agent (or, in the case of a Participant, to the Lender granting the participation), as tax or otherwise, including penalties and interest, and including any taxes imposed by any jurisdiction on the amounts payable to Agent (or, in the case of a Participant, to the Lender granting the participation only) under this Section 16, together with all costs and expenses (including attorneys’ fees and expenses).  The obligation of the Lenders and the Participants under this subsection shall survive the payment of all Obligations and the resignation or replacement of Agent.

 

16.4                           Refunds.  If Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes as to which it has been indemnified by Borrowers or with respect to which Borrowers have paid additional amounts pursuant to this Section 16, so long as no Default or Event of Default has occurred and is continuing, it shall pay over such refund to Borrowers (but only to the extent of payments made, or additional amounts paid, by Borrowers under this Section 16 with respect to Taxes giving rise to such a refund), net of all reasonable out-of-pocket expenses of Agent or such Lender and without interest (other

 

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than any interest paid by the applicable Governmental Authority with respect to such a refund); provided, that Borrowers, upon the request of Agent or such Lender, agree to repay the amount paid over to Borrowers (plus any penalties, interest or other charges, imposed by the applicable Governmental Authority, other than such penalties, interest or other charges imposed as a result of the willful misconduct or gross negligence of Agent hereunder) to Agent or such Lender in the event Agent or such Lender is required to repay such refund to such Governmental Authority.  Notwithstanding anything in this Agreement to the contrary, this Section 16 shall not be construed to require Agent or any Lender to make available its tax returns (or any other information which it deems confidential) to any Borrower or any other Person.

 

17.                                 GENERAL PROVISIONS.

 

17.1                           Effectiveness.  This Agreement shall be binding and deemed effective when executed by each Borrower, Agent, and each Lender whose signature is provided for on the signature pages hereof.

 

17.2                           Section Headings.  Headings and numbers have been set forth herein for convenience only.  Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Agreement.

 

17.3                           Interpretation.  Neither this Agreement nor any uncertainty or ambiguity herein shall be construed against any member of the Lender Group or any Borrower, whether under any rule of construction or otherwise.  On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

 

17.4                           Severability of Provisions.  Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

 

17.5                           Bank Product Providers.  Each Bank Product Provider shall be deemed a third party beneficiary hereof and of the provisions of the other Loan Documents for purposes of any reference in a Loan Document to the parties for whom Agent is acting.  Agent hereby agrees to act as agent for such Bank Product Providers and, by virtue of entering into a Bank Product Agreement, the applicable Bank Product Provider shall be automatically deemed to have appointed Agent as its agent and to have accepted the benefits of the Loan Documents; it being understood and agreed that the rights and benefits of each Bank Product Provider under the Loan Documents consist exclusively of such Bank Product Provider’s being a beneficiary of the Liens and security interests (and, if applicable, guarantees) granted to Agent and the right to share in payments and collections out of the Collateral as more fully set forth herein. In addition, each Bank Product Provider, by virtue of entering into a Bank Product Agreement, shall be automatically deemed to have agreed that Agent shall have the right, but shall have no obligation, to establish, maintain, relax, or release reserves in respect of the Bank Product Obligations and that if reserves are established there is no obligation on the part of Agent to determine or insure whether the amount of any such reserve is appropriate or not.  In connection with any such distribution of payments or proceeds of Collateral, Agent shall be entitled to assume no amounts are due or owing to any Bank Product Provider unless such Bank Product Provider has provided a written certification (setting forth a reasonably detailed calculation) to Agent as to the amounts that are due and owing to it and such written certification is received by Agent a reasonable period of time prior to the making of such distribution.  Agent shall have no obligation to calculate the amount due and payable with respect to any Bank Products, but may rely upon the written certification of the amount due and payable from the applicable Bank Product Provider.  In the absence of an updated certification, Agent shall be entitled to assume that the amount due and payable to the applicable Bank Product Provider is the amount last certified to Agent by such Bank Product Provider as being due and payable (less any distributions made to such Bank Product Provider on account thereof).  Any Borrower may obtain Bank Products from any Bank Product Provider, although no Borrower is required to do so.  Each Borrower acknowledges and agrees that no Bank Product Provider has committed to provide any Bank Products and that the providing of Bank Products by any Bank Product

 

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Provider is in the sole and absolute discretion of such Bank Product Provider.  Notwithstanding anything to the contrary in this Agreement or any other Loan Document, no provider or holder of any Bank Product shall have any voting or approval rights hereunder (or be deemed a Lender) solely by virtue of its status as the provider or holder of such agreements or products or the Obligations owing thereunder, nor shall the consent of any such provider or holder be required (other than in their capacities as Lenders, to the extent applicable) for any matter hereunder or under any of the other Loan Documents, including as to any matter relating to the Collateral or the release of Collateral or any Guarantors.

 

17.6                           Debtor-Creditor Relationship.  The relationship between the Lenders and Agent, on the one hand, and the Loan Parties, on the other hand, is solely that of creditor and debtor.  No member of the Lender Group has (or shall be deemed to have) any fiduciary relationship or duty to any Loan Party arising out of or in connection with the Loan Documents or the transactions contemplated thereby, and there is no agency or joint venture relationship between the members of the Lender Group, on the one hand, and the Loan Parties, on the other hand, by virtue of any Loan Document or any transaction contemplated therein.

 

17.7                           Counterparts; Electronic Execution.  This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement.  Delivery of an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement.  Any party delivering an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement.  The foregoing shall apply to each other Loan Document mutatis mutandis.

 

17.8                           Revival and Reinstatement of Obligations; Certain Waivers.

 

(a)                                  If the incurrence or payment of the Obligations by any Borrower or any Guarantor or the transfer to the Lender Group of any property should for any reason subsequently be asserted, or declared, to be void or voidable under any state or federal law relating to creditors’ rights, including provisions of the Bankruptcy Code relating to fraudulent conveyances, preferences, or other voidable or recoverable payments of money or transfers of property (each, a “Voidable Transfer”), and if the Lender Group is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the advice of counsel, then, as to any such Voidable Transfer, or the amount thereof that the Lender Group is required or elects to repay or restore, and as to all reasonable costs, expenses, and attorneys’ fees of the Lender Group related thereto, the liability of Borrowers or any Guarantors automatically shall be revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been made.

 

(b)                                 Anything to the contrary contained herein notwithstanding, if Agent or any Lender accepts a guaranty of only a portion of the Obligations pursuant to any guaranty, each Borrower hereby waives its right under Section 2822(a) of the California Civil Code or any similar laws of any other applicable jurisdiction to designate the portion of the Obligations satisfied by the applicable guarantor’s partial payment.

 

17.9                           Confidentiality.

 

(a)                                  Agent and Lenders each individually (and not jointly or jointly and severally) agree that material, non-public information regarding Parent and its Subsidiaries, their operations, assets, and existing and contemplated business plans (“Confidential Information”) shall be treated by Agent and the Lenders in a confidential manner, and shall not be disclosed by Agent and the Lenders to Persons who are not parties to this Agreement, except:  (i) to attorneys for and other advisors, accountants, auditors, and consultants to any member of the Lender Group and to employees, directors and officers of any member of the Lender Group (the Persons in this clause (i), “Lender Group Representatives”) on a “need to know” basis in connection with this Agreement and the transactions contemplated hereby and on a confidential basis, (ii) to Subsidiaries and Affiliates of any member of the Lender Group (including the Bank Product Providers),

 

106

 

provided that any such Subsidiary or Affiliate shall have agreed to receive such information hereunder subject to the terms of this Section 17.9, (iii) as may be required by regulatory authorities so long as such authorities are informed of the confidential nature of such information, (iv) as may be required by statute, decision, or judicial or administrative order, rule, or regulation; provided that (x) prior to any disclosure under this clause (iv), the disclosing party agrees to provide Administrative Borrower with prior notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior notice to Borrowers pursuant to the terms of the applicable statute, decision, or judicial or administrative order, rule, or regulation and (y) any disclosure under this clause (iv) shall be limited to the portion of the Confidential Information as may be required by such statute, decision, or judicial or administrative order, rule, or regulation, (v) as may be agreed to in advance in writing by Borrowers, (vi) as requested or required by any Governmental Authority pursuant to any subpoena or other legal process, provided, that, (x) prior to any disclosure under this clause (vi) the disclosing party agrees to provide Administrative Borrower with prior written notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior written notice to Borrowers pursuant to the terms of the subpoena or other legal process and (y) any disclosure under this clause (vi) shall be limited to the portion of the Confidential Information as may be required by such Governmental Authority pursuant to such subpoena or other legal process, (vii) as to any such information that is or becomes generally available to the public (other than as a result of prohibited disclosure by Agent or the Lenders or the Lender Group Representatives), (viii) in connection with any assignment, participation or pledge of any Lender’s interest under this Agreement, provided that prior to receipt of Confidential Information any such assignee, participant, or pledgee shall have agreed in writing to receive such Confidential Information hereunder subject to the terms of this Section, (ix) in connection with any litigation or other adversary proceeding involving parties hereto which such litigation or adversary proceeding involves claims related to the rights or duties of such parties under this Agreement or the other Loan Documents; provided, that, prior to any disclosure to any Person (other than any Loan Party, Agent, any Lender, any of their respective Affiliates, or their respective counsel) under this clause (ix) with respect to litigation involving any Person (other than any Loan Party, Agent, any Lender, any of their respective Affiliates, or their respective counsel), the disclosing party agrees to provide Administrative Borrower with prior written notice thereof, and (x) in connection with, and to the extent reasonably necessary for, the exercise of any secured creditor remedy under this Agreement or under any other Loan Document.

 

(b)                                 Anything in this Agreement to the contrary notwithstanding, Agent may disclose information concerning the terms and conditions of this Agreement and the other Loan Documents to loan syndication and pricing reporting services or in its marketing materials, with such information to consist of deal terms and other information customarily found in such publications or marketing materials and may otherwise use the name, logos, and other insignia of Borrowers or the other Loan Parties and the Commitments provided hereunder in any “tombstone” or other advertisements, on its website or in other marketing materials of Agent.

 

(c)                                  The Loan Parties hereby acknowledge that Agent or its Affiliates may make available to the Lenders materials or information provided by or on behalf of any Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks, SyndTrak or another similar electronic system (the “Platform”) and certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Loan Parties or their securities) (each, a “Public Lender”).  The Loan Parties shall be deemed to have authorized Agent and its Affiliates and the Lenders to treat Borrower Materials marked “PUBLIC” or otherwise at any time filed with the SEC as not containing any material non-public information with respect to the Loan Parties or their securities for purposes of United States federal and state securities laws.  All Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated as “Public Investor” (or another similar term).  Agent and its Affiliates and the Lenders shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” or that are not at any time filed with the SEC as being suitable only for posting on a portion of the Platform not marked as “Public Investor” (or such other similar term).

 

107

 

17.10       Survival.  All representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that Agent, Issuing Bank, or any Lender may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated.

 

17.11       Patriot Act.  Each Lender that is subject to the requirements of the Patriot Act hereby notifies Borrowers that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies each Borrower, which information includes the name and address of each Borrower and other information that will allow such Lender to identify each Borrower in accordance with the Patriot Act.  In addition, if Agent is required by law or regulation or internal policies to do so, it shall have the right to periodically conduct (a) Patriot Act searches, OFAC/PEP searches, and customary individual background checks for the Loan Parties and (b) OFAC/PEP searches and customary individual background checks for the Loan Parties’ senior management and key principals, and each Borrower agrees to cooperate in respect of the conduct of such searches and further agrees that the reasonable costs and charges for such searches shall constitute Lender Group Expenses hereunder and be for the account of Borrowers.

 

17.12       Integration.  This Agreement, together with the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof.  The foregoing to the contrary notwithstanding, all Bank Product Agreements, if any, are independent agreements governed by the written provisions of such Bank Product Agreements, which will remain in full force and effect, unaffected by any repayment, prepayments, acceleration, reduction, increase, or change in the terms of any credit extended hereunder, except as otherwise expressly provided in such Bank Product Agreement.

 

17.13       Parent as Agent for Borrowers.  Each Borrower hereby irrevocably appoints Parent as the borrowing agent and attorney-in-fact for all Borrowers (“Administrative Borrower”) which appointment shall remain in full force and effect unless and until Agent shall have received prior written notice signed by each Borrower that such appointment has been revoked and that another Borrower has been appointed Administrative Borrower.  Each Borrower hereby irrevocably appoints and authorizes the Administrative Borrower (a) to provide Agent with all notices with respect to Revolving Loans and Letters of Credit obtained for the benefit of any Borrower and all other notices and instructions under this Agreement and the other Loan Documents (and any notice or instruction provided by Administrative Borrower shall be deemed to be given by Borrowers hereunder and shall bind each Borrower), (b) to receive notices and instructions from the members of the Lender Group (and any notice or instruction provided by any member of the Lender Group to Administrative Borrower in accordance with the terms hereof shall be deemed to have been given to each Borrower, and (c) to take such action as the Administrative Borrower deems appropriate on its behalf to obtain Revolving Loans and Letters of Credit and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement.  It is understood that the handling of the Loan Account and Collateral in a combined fashion, as more fully set forth herein, is done solely as an accommodation to Borrowers in order to utilize the collective borrowing powers of Borrowers in the most efficient and economical manner and at their request, and that Lender Group and the Bank Product Providers shall not incur liability to any Borrower as a result hereof.  Each Borrower expects to derive benefit, directly or indirectly, from the handling of the Loan Account and the Collateral in a combined fashion since the successful operation of each Borrower is dependent on the continued successful performance of the integrated group.  To induce the Lender Group and the Bank Product Providers to do so, and in consideration thereof, each Borrower hereby jointly and severally agrees to indemnify each member of the Lender Group and each Bank Product Provider and hold each member of the Lender Group and each Bank Product Provider harmless

 

108

 

against any and all liability, expense, loss or claim of damage or injury, made against the Lender Group and the Bank Product Providers by any Borrower or by any third party whosoever, arising from or incurred by reason of (a) the handling of the Loan Account and Collateral of Borrowers as herein provided, or (b) the Lender Group’s and the Bank Product Provider’s relying on any instructions of the Administrative Borrower, except that Borrowers will have no liability to the relevant Agent-Related Person or Lender-Related Person under this Section 17.13 with respect to any liability that has been finally determined by a court of competent jurisdiction to have resulted solely from the bad faith, gross negligence or willful misconduct of such Agent-Related Person or Lender-Related Person, as the case may be.

 

17.14       No Novation.  This Agreement does not extinguish the obligations for the payment of money outstanding under the Original Credit Agreement, does not discharge the other obligations of Borrowers under the Original Credit Agreement, and does not discharge or release the liens granted to PNC, as agent, which shall continue to secure the “Obligations” under the Original Credit Agreement as renewed, amended, restated and modified hereby and under the Guaranty and Security Agreement, or priority of any mortgage, pledge, security agreement or any other security therefor.  Nothing herein contained shall be construed as a substitution or novation of the obligations outstanding under the Original Credit Agreement or instruments securing the same, which shall remain in full force and effect, except as modified hereby or by instruments executed concurrently herewith.  Nothing expressed or implied in this Agreement shall be construed as a release or other discharge of any Borrower from any of its obligations or liabilities under the Original Credit Agreement or any of the security agreements, pledge agreements, mortgages, guaranties or other loan documents executed in connection therewith.  Each Borrower hereby (a) confirms and agrees that each Loan Document (as defined in the Original Credit Agreement) to which it is a party that is not being amended and restated concurrently herewith is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects except that on and after the Closing Date, all references in any such Loan Document (as defined in the Original Credit Agreement) to “the Loan Agreement,” “thereto,” “thereof,” “thereunder” or words of like import referring to the Original Credit Agreement shall mean the Original Credit Agreement as amended and restated by this Agreement; and (b) confirms and agrees that to the extent that any such Loan Document (as defined in the Original Credit Agreement) purports to assign or pledge to any of Agent or the Lender Group or the Bank Product Providers or to grant to any of Agent or the Lender Group or the Bank Product Providers a security interest in or lien on, any collateral as security for the obligations of Borrowers from time to time existing in respect of the Original Credit Agreement or the Loan Documents (as defined in the Original Credit Agreement), such pledge or assignment or grant of the security interest or lien is hereby ratified and confirmed in all respects with respect to this Agreement and the Loan Documents.

 

17.15       Intercreditor Legend.  Agent, for itself and on behalf of the Lender Group and the Bank Product Providers, (a) acknowledges that it has received a copy of the Intercreditor Agreement, (b) consents to the subordination of Liens on the Term Loan Primary Collateral as defined, and provided for, in the Intercreditor Agreement, (c) agrees that it will be bound by and will take no actions contrary to the provisions of the Intercreditor Agreement and (d) solely with respect to each member of the Lender Group and each Bank Product Provider, authorizes and instructs Agent to enter into the Intercreditor Agreement as agent for and representative of such member of the Lender Group or such Bank Product Provider, as applicable.  The foregoing provisions are intended as an inducement to the Term Loan Secured Parties (as such term is defined in the Intercreditor Agreement) under the Term Loan Documents (as such term is defined in the Intercreditor Agreement) to continue to have credit extended to Borrowers and such Term Loan Secured Parties are intended third party beneficiaries of such provisions.

 

17.16       Acknowledgment of Prior Obligations and Continuation Thereof  .  Each of the Borrowers (a) consents to the amendment and restatement of the Original Credit Agreement by this Agreement; and (b) acknowledges and agrees that (i) its Obligations and other Indebtedness incurred in favor of Agent and Lenders under any Loan Document, including, without limitation, the Control Agreements, the Copyright Security Agreement, the Estoppel Agreement, the Fee Letter, the Guaranty and Security Agreement, the Intercompany Subordination Agreement, the Existing Letters of Credit, the Mortgages, the Patent Security Agreement, the PNC Mortgage Assignments, the Existing Port of Indiana Subordination Agreement, the

 

109

 

Trademark Security Agreement, and any other Loan Documents not being amended and restated on the Closing Date, to which it is a party, and (ii) the prior grant or grants of security interests and Liens in favor of the Agent in its properties and assets, under each Loan Document (as defined in the Original Credit Agreement) to which it is a party shall be in respect of the obligations of each Borrower under this Agreement and the other Loan Documents; (c) reaffirms (i) all of its obligations owing to the Lender Group, and (ii) all prior grants of Liens in favor of Agent under each Loan Document (as defined in the Original Credit Agreement); (d) except as expressly amended hereby or by any of the other Loan Documents, continues to pledge and grant to Agent a security interest in and to all of the right, title and interest of each Borrower in, to and under the Collateral to secure the prompt payment and performance of all of the Obligations and other Indebtedness of each Borrower under the Loan Documents; and (e) agrees that, except as expressly amended hereby or by any of the other Loan Documents, each of the Loan Documents (as defined in the Original Credit Agreement) to which it is a party is and shall remain in full force and effect.  Each Borrower acknowledges that, under the Original Credit Agreement, in each case through 11:00 a.m. (California time) on September 21, 2012:  (i) the aggregate outstanding principal amount of the Revolving Loans is $0, (ii) the accrued but unpaid interest on such Revolving Loans is $14.94, (iii) the accrued but unpaid amount of the continuing unused line fee due under Section 2.10(b) of the Original Credit Agreement is $11,772.59, (iv) the aggregate outstanding face amount of all Existing Letters of Credit is $7,615,208.00, and (v) the accrued and unpaid Letter of Credit fee payable with respect to the Existing Letters of Credit is $23,268.69.  Each Borrower hereby confirms and agrees that all outstanding principal, interest and fees (including such accrued and unpaid principal, interest, and fees set forth in the immediately preceding sentence) and other obligations under the Original Credit Agreement immediately prior to the Closing Date shall, to the extent not paid on the Closing Date, from and after the Closing Date, be, without duplication, Obligations owing and payable pursuant to this Agreement and the other Loan Documents as in effect from time to time, shall accrue interest thereon as specified in this Agreement, and shall be secured by the Liens granted to Agent pursuant to the terms of the Loan Documents, this Agreement and the other Loan Documents.  Although each Borrower and each other Guarantor has been informed of the matters set forth herein and has acknowledged and agreed to same, it understands that neither Agent nor any other member of the Lender Group shall have any obligation to inform it of such matters in the future or to seek its acknowledgement or agreement to future amendments or modifications, and nothing herein shall create such a duty.

 

17.17       Release and Covenant Not to Sue.

 

(a)           Effective on the date hereof, each of each Borrower and each Guarantor, for itself and on behalf of its successors, assigns, and officers, directors, employees, agents and attorneys, and any Person acting for or on behalf of, or claiming through it, hereby waives, releases, remises and forever discharges Agent, each Lender, Issuing Bank, each Bank Product Provider, and each of their respective Affiliates, and each of their respective successors in title, past, present and future officers, directors, employees, limited partners, general partners, investors, attorneys, assigns, subsidiaries, shareholders, trustees, agents and other professionals and all other persons and entities to whom any member of the Lenders would be liable if such persons or entities were found to be liable to such Borrower or such Guarantor (each a “Releasee” and collectively, the “Releasees”), from any and all past, present and future claims, suits, liens, lawsuits, adverse consequences, amounts paid in settlement, debts, deficiencies, diminution in value, disbursements, demands, obligations, liabilities, causes of action, damages, losses, costs and expenses of any kind or character, whether based in equity, law, contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law (each a “Claim” and collectively, the “Claims”), whether known or unknown, fixed or contingent, direct, indirect, or derivative, asserted or unasserted, matured or unmatured, foreseen or unforseen, past or present, liquidated or unliquidated, suspected or unsuspected, which such Borrower or such Guarantor ever had from the beginning of the world to the date hereof, now has, or might hereafter have against any such Releasee which relates, directly or indirectly to the Credit Agreement, any other Loan Document, or to any acts or omissions of any such Releasee with respect to the Credit Agreement or any other Loan Document, or to the lender-borrower relationship evidenced by the Loan Documents, except for the duties and obligations set forth in the Loan Documents effective as of the date hereof and other than Claims resulting from the willful misconduct or gross negligence of a Releasee, as determined by the final,

 

110

 

non-appealable judgment of a court of competent jurisdiction.  As to each and every Claim released hereunder, each of each Borrower and each Guarantor hereby represents that it has received the advice of legal counsel with regard to the releases contained herein, and having been so advised, specifically waives the benefit of the provisions of Section 1542 of the Civil Code of California which provides as follows:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

 

As to each and every Claim released hereunder, each of each Borrower and each Guarantor also waives the benefit of each other similar provision of applicable federal or state law (including without limitation the laws of the state of California), if any, pertaining to general releases after having been advised by its legal counsel with respect thereto.

 

(b)           Each of each Borrower and each Guarantor acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such Claims and agrees that this instrument shall be and remain effective in all respects notwithstanding any such differences or additional facts.  Each of each Borrower and each Guarantor understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

 

(c)           Each of each Borrower and each Guarantor, for itself and on behalf of its successors, assigns, and officers, directors, employees, agents and attorneys, and any Person acting for or on behalf of, or claiming through it, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by such Person pursuant to the above release.  Each of each Borrower and each Guarantor further agrees that it shall not dispute the validity or enforceability of the Credit Agreement or any of the other Loan Documents or any of its obligations thereunder, or the validity, priority, enforceability or the extent of Agent’s Lien on any item of Collateral under the Credit Agreement or the other Loan Documents.  If any Borrower, any Guarantor or any of their respective successors, assigns, or officers, directors, employees, agents or attorneys, or any Person acting for or on behalf of, or claiming through it violate the foregoing covenant, such Person, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys’ fees and costs incurred by such Releasee as a result of such violation.

 

[Signature pages to follow.]

 

111

 

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

 

	
BORROWERS:
    	
 
    	
AVENTINE   RENEWABLE ENERGY HOLDINGS, INC., 

a   Delaware corporation
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Calvin Stewart
    
	
 
    	
 
    	
 
    	
Name:   Calvin Stewart
    
	
 
    	
 
    	
 
    	
Title:     Chief Financial Officer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
AVENTINE   RENEWABLE ENERGY, INC., 

a   Delaware corporation
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Calvin Stewart
    
	
 
    	
 
    	
 
    	
Name:   Calvin Stewart
    
	
 
    	
 
    	
 
    	
Title:   Senior   Vice President, Assistant Secretary and Treasurer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
AVENTINE   RENEWABLE ENERGY — AURORA WEST, LLC, 

a   Delaware limited liability company
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Calvin Stewart
    
	
 
    	
 
    	
 
    	
Name:   Calvin Stewart
    
	
 
    	
 
    	
 
    	
Title:     Treasurer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
AVENTINE   RENEWABLE ENERGY — MT  VERNON, LLC, 

a   Delaware limited liability company
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Calvin Stewart
    
	
 
    	
 
    	
 
    	
Name:   Calvin Stewart
    
	
 
    	
 
    	
 
    	
Title:     Treasurer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
AVENTINE   RENEWABLE ENERGY — CANTON, LLC, 

a   Delaware limited liability company
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Calvin Stewart
    
	
 
    	
 
    	
 
    	
Name:   Calvin Stewart
    
	
 
    	
 
    	
 
    	
Title:     Treasurer
    

 

[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

	
 
    	
 
    	
AVENTINE   POWER, LLC, 

a   Delaware limited liability company
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Calvin Stewart
    
	
 
    	
 
    	
 
    	
Name:   Calvin Stewart
    
	
 
    	
 
    	
 
    	
Title:     Treasurer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
NEBRASKA   ENERGY, L.L.C., 

a   Kansas limited liability company
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Calvin Stewart
    
	
 
    	
 
    	
 
    	
Name:   Calvin Stewart
    
	
 
    	
 
    	
 
    	
Title:   Senior   Vice President, Assistant Secretary and Treasurer
    

 

[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

	
 
    	
 
    	
WELLS FARGO CAPITAL FINANCE, LLC,  

a   Delaware limited liability company, 

as   Agent and as a Lender
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Daniel Whitwer
    
	
 
    	
 
    	
 
    	
Name:   Daniel Whitwer
    
	
 
    	
 
    	
 
    	
SVP
    

 

[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
1.
    	
DEFINITIONS AND CONSTRUCTION
    	
1
    
	
 
    	
 
    	
 
    
	
 
    	
1.1
    	
Definitions
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.2
    	
Accounting Terms
    	
40
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.3
    	
Code
    	
40
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.4
    	
Construction
    	
40
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.5
    	
Time References
    	
41
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.6
    	
Schedules and Exhibits
    	
41
    
	
 
    	
 
    	
 
    
	
2.
    	
LOANS AND TERMS OF PAYMENT
    	
41
    
	
 
    	
 
    	
 
    
	
 
    	
2.1
    	
Revolving Loans
    	
41
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.2
    	
Permanent Waiver
    	
42
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.3
    	
Borrowing Procedures and Settlements
    	
42
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.4
    	
Payments; Reductions of Commitments; Prepayments
    	
48
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.5
    	
Promise to Pay
    	
51
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.6
    	
Interest Rates and Letter of Credit Fee: Rates, Payments,   and Calculations
    	
51
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.7
    	
Crediting Payments
    	
53
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.8
    	
Designated Account
    	
53
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.9
    	
Maintenance of Loan Account; Statements of Obligations
    	
53
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.10
    	
Fees
    	
54
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.11
    	
Letters of Credit
    	
54
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.12
    	
LIBOR Option
    	
60
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.13
    	
Capital Requirements
    	
61
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.14
    	
Accordion
    	
62
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.15
    	
Joint and Several Liability of Borrowers
    	
64
    
	
 
    	
 
    	
 
    
	
3.
    	
CONDITIONS; TERM OF AGREEMENT
    	
66
    
	
 
    	
 
    	
 
    
	
 
    	
3.1
    	
Conditions Precedent to the Initial Extension of Credit
    	
66
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.2
    	
Conditions Precedent to all Extensions of Credit
    	
66
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.3
    	
Maturity
    	
66
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.4
    	
Effect of Maturity
    	
66
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.5
    	
Early Termination by Borrowers
    	
67
    
	
 
    	
 
    	
 
    
	
4.
    	
REPRESENTATIONS AND WARRANTIES
    	
67
    
	
 
    	
 
    	
 
    
	
 
    	
4.1
    	
Due Organization and Qualification; Subsidiaries
    	
67
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.2
    	
Due Authorization; No Conflict
    	
68
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.3
    	
Governmental Consents
    	
68
    

 

i

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
 
    	
4.4
    	
Binding Obligations; Perfected Liens
    	
68
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.5
    	
Title to Assets; No Encumbrances
    	
69
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.6
    	
Jurisdiction of Organization; Location of Chief Executive   Office; Organizational Identification Number; Commercial Tort Claims
    	
69
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.7
    	
Litigation
    	
69
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.8
    	
Compliance with Laws
    	
69
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.9
    	
No Material Adverse Effect
    	
70
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.10
    	
Solvency
    	
70
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.11
    	
Employee Benefits
    	
70
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.12
    	
Environmental Condition
    	
70
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.13
    	
Intellectual Property
    	
70
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.14
    	
Deposit Accounts, Securities Accounts and Commodity   Accounts
    	
70
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.15
    	
Complete Disclosure
    	
71
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.16
    	
Patriot Act
    	
71
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.17
    	
Indebtedness
    	
71
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.18
    	
Payment of Taxes
    	
71
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.19
    	
Margin Stock
    	
72
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.20
    	
Governmental Regulation
    	
72
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.21
    	
OFAC
    	
72
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.22
    	
Employee and Labor Matters
    	
72
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.23
    	
Parent as a Holding Company
    	
72
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.24
    	
Leases
    	
72
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.25
    	
Eligible Accounts
    	
73
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.26
    	
Eligible Inventory
    	
73
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.27
    	
Locations of Inventory
    	
73
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.28
    	
Inventory Records
    	
73
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.29
    	
Bankruptcy
    	
73
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.30
    	
Blocked Account Funds
    	
73
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.31
    	
Pekin
    	
73
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.32
    	
Restructuring Documents
    	
73
    
	
 
    	
 
    	
 
    
	
5.
    	
AFFIRMATIVE COVENANTS
    	
73
    
	
 
    	
 
    	
 
    
	
 
    	
5.1
    	
Financial Statements, Reports, Certificates
    	
74
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.2
    	
Collateral Reporting
    	
74
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.3
    	
Existence
    	
74
    

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
 
    	
5.4
    	
Maintenance of Properties
    	
74
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.5
    	
Taxes
    	
74
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.6
    	
Insurance
    	
74
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.7
    	
Inspection
    	
75
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.8
    	
Compliance with Laws
    	
75
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.9
    	
Environmental
    	
75
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.10
    	
Disclosure Updates
    	
76
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.11
    	
Formation of Subsidiaries
    	
76
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.12
    	
Further Assurances
    	
76
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.13
    	
Lender Meetings
    	
77
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.14
    	
Location of Inventory
    	
77
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.15
    	
Compliance with ERISA and the IRC
    	
77
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.16
    	
Hedge Agreements
    	
77
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.17
    	
Deposit Accounts, Securities Accounts and Commodity   Accounts
    	
77
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.18
    	
Port of Indiana Production
    	
78
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.19
    	
Blocked Account Funds
    	
78
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.20
    	
Minimum Liquidity Shortfall
    	
78
    
	
 
    	
 
    	
 
    
	
6.
    	
NEGATIVE COVENANTS
    	
79
    
	
 
    	
 
    	
 
    
	
 
    	
6.1
    	
Indebtedness
    	
79
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.2
    	
Liens
    	
79
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.3
    	
Restrictions on Fundamental Changes
    	
79
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.4
    	
Disposal of Assets
    	
79
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.5
    	
Change Name
    	
79
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.6
    	
Nature of Business
    	
79
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.7
    	
Prepayments and Amendments
    	
80
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.8
    	
Restricted Payments
    	
80
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.9
    	
Accounting Methods
    	
81
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.10
    	
Investments; Controlled Investments
    	
81
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.11
    	
Transactions with Affiliates
    	
81
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.12
    	
Use of Proceeds
    	
82
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.13
    	
Limitation on Issuance of Equity Interests
    	
82
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.14
    	
Inventory with Bailees
    	
82
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.15
    	
Parent as Holding Company
    	
82
    

 

iii

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
7.
    	
FINANCIAL COVENANTS
    	
83
    
	
 
    	
 
    	
 
    
	
 
    	
7.1
    	
Minimum Liquidity
    	
83
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.2
    	
Minimum Ethanol Production
    	
83
    
	
 
    	
 
    	
 
    
	
8.
    	
EVENTS OF DEFAULT
    	
83
    
	
 
    	
 
    	
 
    
	
 
    	
8.1
    	
Payments
    	
83
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.2
    	
Covenants
    	
83
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.3
    	
Judgments
    	
84
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.4
    	
Voluntary Bankruptcy, etc.
    	
84
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.5
    	
Involuntary Bankruptcy, etc.
    	
84
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.6
    	
Default Under Other Agreements
    	
84
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.7
    	
Representations, etc.
    	
84
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.8
    	
Guaranty
    	
84
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.9
    	
Security Documents
    	
84
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.10
    	
Loan Documents
    	
85
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.11
    	
Change in Control
    	
85
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.12
    	
Employee Benefits
    	
85
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.13
    	
Restraining Orders
    	
85
    
	
 
    	
 
    	
 
    
	
9.
    	
RIGHTS AND REMEDIES
    	
85
    
	
 
    	
 
    	
 
    
	
 
    	
9.1
    	
Rights and Remedies
    	
85
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.2
    	
Remedies Cumulative
    	
86
    
	
 
    	
 
    	
 
    
	
10.
    	
WAIVERS; INDEMNIFICATION
    	
86
    
	
 
    	
 
    	
 
    
	
 
    	
10.1
    	
Demand; Protest; etc.
    	
86
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
10.2
    	
The Lender Group’s Liability for Collateral
    	
86
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
10.3
    	
Indemnification
    	
86
    
	
 
    	
 
    	
 
    
	
11.
    	
NOTICES
    	
87
    
	
 
    	
 
    	
 
    
	
12.
    	
CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER
    	
88
    
	
 
    	
 
    	
 
    
	
13.
    	
ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS
    	
90
    
	
 
    	
 
    	
 
    
	
 
    	
13.1
    	
Assignments and Participations
    	
90
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
13.2
    	
Successors
    	
93
    
	
 
    	
 
    	
 
    
	
14.
    	
AMENDMENTS; WAIVERS
    	
93
    
	
 
    	
 
    	
 
    
	
 
    	
14.1
    	
Amendments and Waivers
    	
93
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
14.2
    	
Replacement of Certain Lenders
    	
95
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
14.3
    	
No Waivers; Cumulative Remedies
    	
95
    

 

iv

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
15.
    	
AGENT; THE LENDER GROUP
    	
95
    
	
 
    	
 
    	
 
    
	
 
    	
15.1
    	
Appointment and Authorization of Agent
    	
95
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.2
    	
Delegation of Duties
    	
96
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.3
    	
Liability of Agent
    	
96
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.4
    	
Reliance by Agent
    	
97
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.5
    	
Notice of Default or Event of Default
    	
97
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.6
    	
Credit Decision
    	
97
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.7
    	
Costs and Expenses; Indemnification
    	
98
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.8
    	
Agent in Individual Capacity
    	
98
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.9
    	
Successor Agent
    	
99
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.10
    	
Lender in Individual Capacity
    	
99
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.11
    	
Collateral Matters
    	
99
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.12
    	
Restrictions on Actions by Lenders; Sharing of Payments
    	
101
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.13
    	
Agency for Perfection
    	
101
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.14
    	
Payments by Agent to the Lenders
    	
101
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.15
    	
Concerning the Collateral and Related Loan Documents
    	
101
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.16
    	
Field Examination Reports; Confidentiality; Disclaimers by   Lenders; Other Reports and Information
    	
101
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.17
    	
Several Obligations; No Liability
    	
102
    
	
 
    	
 
    	
 
    
	
16.
    	
WITHHOLDING TAXES
    	
102
    
	
 
    	
 
    	
 
    
	
 
    	
16.1
    	
Payments
    	
103
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
16.2
    	
Exemptions
    	
103
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
16.3
    	
Reductions
    	
104
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
16.4
    	
Refunds
    	
104
    
	
 
    	
 
    	
 
    
	
17.
    	
GENERAL PROVISIONS
    	
105
    
	
 
    	
 
    	
 
    
	
 
    	
17.1
    	
Effectiveness
    	
105
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.2
    	
Section Headings
    	
105
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.3
    	
Interpretation
    	
105
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.4
    	
Severability of Provisions
    	
105
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.5
    	
Bank Product Providers
    	
105
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.6
    	
Debtor-Creditor Relationship
    	
106
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.7
    	
Counterparts; Electronic Execution
    	
106
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.8
    	
Revival and Reinstatement of Obligations; Certain Waivers
    	
106
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.9
    	
Confidentiality
    	
106
    

 

v

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
 
    	
17.10
    	
Survival
    	
108
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.11
    	
Patriot Act
    	
108
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.12
    	
Integration
    	
108
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.13
    	
Parent as Agent for Borrowers
    	
108
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.14
    	
No Novation
    	
109
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.15
    	
Intercreditor Legend
    	
109
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.16
    	
Acknowledgment of Prior Obligations and Continuation   Thereof
    	
109
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.17
    	
Release and Covenant Not to Sue
    	
110
    

 

vi

 

EXHIBITS AND SCHEDULES

 

	
Exhibit A-1
    	
Form of   Assignment and Acceptance Agreement
    
	
Exhibit B-1
    	
Form of   Borrowing Base Certificate
    
	
Exhibit C-1
    	
Form of   Compliance Certificate
    
	
Exhibit L-1
    	
Form of   LIBOR Notice
    
	
 
    	
 
    
	
Schedule   A-1
    	
Agent’s   Account
    
	
Schedule   A-2
    	
Authorized   Persons
    
	
Schedule   C-1
    	
Commitments
    
	
Schedule   C-2
    	
Coop   Litigation
    
	
Schedule   D-1
    	
Designated   Account
    
	
Schedule   E-1
    	
Eligible   Inventory Locations
    
	
Schedule   N-1
    	
New   Equity Holders
    
	
Schedule   P-1
    	
Permitted   Investments
    
	
Schedule   P-2
    	
Permitted   Liens
    
	
Schedule   R-1
    	
Real   Property Collateral
    
	
Schedule   1.1(a)
    	
Specified   Account Debtors
    
	
Schedule   3.1
    	
Conditions   Precedent
    
	
Schedule   4.1(b)
    	
Capitalization   of Parent
    
	
Schedule   4.1(c)
    	
Capitalization   of Parent’s Subsidiaries
    
	
Schedule   4.6(a)
    	
Name   and Jurisdiction of Organization
    
	
Schedule   4.6(b)
    	
Chief   Executive Offices
    
	
Schedule   4.6(c)
    	
Tax   Identification Numbers and Organizational Identification Numbers
    
	
Schedule   4.6(d)
    	
Commercial   Tort Claims
    
	
Schedule   4.7(b)
    	
Litigation
    
	
Schedule 4.11
    	
Employee   Benefit Plans
    
	
Schedule   4.12
    	
Environmental   Matters
    
	
Schedule   4.13
    	
Intellectual   Property
    
	
Schedule   4.14
    	
Deposit   Accounts and Securities Accounts
    
	
Schedule   4.17
    	
Indebtedness
    
	
Schedule   4.27
    	
Locations   of Inventory
    
	
Schedule   5.1
    	
Financial   Statements, Reports, Certificates
    
	
Schedule   5.2
    	
Collateral   Reporting
    
	
Schedule   6.6
    	
Nature   of Business
    
	
Schedule   6.14
    	
Bailees
    

 

vii

 

EXHIBIT A-1

 

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

This ASSIGNMENT AND ACCEPTANCE AGREEMENT (“Assignment Agreement”) is entered into as of                                  between                                                        (“Assignor”) and                                                          (“Assignee”).  Reference is made to the Agreement described in Annex I hereto (the “Credit Agreement”).  Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Credit Agreement.

 

In accordance with the terms and conditions of Section 13 of the Credit Agreement, Assignor hereby sells and assigns to Assignee, and Assignee hereby purchases and assumes from Assignor, that interest in and to Assignor’s rights and obligations under the Loan Documents as of the date hereof with respect to the Obligations owing to Assignor, and Assignor’s portion of the Commitments, all to the extent specified on Annex I.

 

Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim and (ii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment Agreement and to consummate the transactions contemplated hereby; (b) makes no representation or warranty and assumes no responsibility with respect to (i) any statements, representations or warranties made in or in connection with the Loan Documents, or (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any other instrument or document furnished pursuant thereto; (c) makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Loan Party or the performance or observance by any Loan Party of any of its obligations under the Loan Documents or any other instrument or document furnished pursuant thereto, and (d) represents and warrants that the amount set forth as the Purchase Price on Annex I represents the amount owed by Borrowers to Assignor with respect to Assignor’s share of the Revolving Loans assigned hereunder, as reflected on Assignor’s books and records.

 

Assignee (a) confirms that it has received copies of the Credit Agreement and the other Loan Documents, together with copies of the financial statements referred to therein 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; (b) agrees that it will, independently and without reliance upon Agent, Assignor, or any other Lender, based upon such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action under the Loan Documents; (c) confirms that it is eligible as an “Assignee” under the terms of the Credit Agreement, (d) appoints and authorizes Agent to take such action as agent on its behalf and to exercise such powers under the Loan Documents as are delegated to Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (e) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender; and (f) attaches the tax forms and documentation required to be delivered by it pursuant to the terms of the Credit Agreement.

 

Following the execution of this Assignment Agreement by Assignor and Assignee, Assignor and Assignee will deliver to Agent and Administrative Borrower this Assignment Agreement, together with payment instructions, addresses, and related information with respect to Assignee.  The effective date of this Assignment (the “Settlement Date”) shall be the latest to occur of (a) the date of the execution and delivery hereof by Assignor and Assignee, (b) the receipt by Agent for its sole and separate account a processing fee in the amount of $3,500 (if required by the Credit Agreement), (c) the receipt of any required consent of Agent and Administrative Borrower, and (d) the date specified on Annex I.

 

As of the Settlement Date (a) Assignee shall (i) be a party to the Credit Agreement and (ii) to the extent that rights and obligations under the Credit Agreement have been assigned to Assignee pursuant to 

 

 

this Assignment Agreement, be a “Lender” and have the rights and obligations of a Lender under the Credit Agreement and the other Loan Documents, and (b) Assignor shall, to the extent that rights and obligations under the Credit Agreement and the other Loan Documents have been assigned by Assignor pursuant to this Assignment Agreement, relinquish its rights (except with respect to Section 10.3 of the Credit Agreement) and be released from any future obligations under the Credit Agreement and the other Loan Documents (and if this Assignment Agreement covers all or the remaining portion of Assignor’s rights and obligations under the Credit Agreement and the other Loan Documents, Assignor shall cease to be a party to the Credit Agreement and the other Loan Documents), provided, that nothing contained herein shall release Assignor from obligations that survive the termination of this Agreement, including Assignor’s obligations under Section 15 and Section 17.9(a) of the Credit Agreement.

 

Upon the Settlement Date, Assignee shall pay to Assignor the Purchase Price (as set forth in Annex I).  From and after the Settlement Date, Agent shall make all payments that are due and payable to the holder of the interest assigned hereunder (including payments of principal, interest, fees and other amounts) to Assignor for amounts which have accrued up to but excluding the Settlement Date and to Assignee for amounts which have accrued from and after the Settlement Date.  On the Settlement Date, Assignor shall pay to Assignee an amount equal to the portion of any interest, fee, or any other charge that was paid to Assignor prior to the Settlement Date on account of the interest assigned hereunder and that are due and payable to Assignee with respect thereto, to the extent that such interest, fee or other charge relates to the period of time from and after the Settlement Date.

 

This Assignment Agreement may be executed in counterparts and by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.  Delivery of an executed counterpart of this Assignment Agreement by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement.

 

THE VALIDITY OF THIS ASSIGNMENT AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO, AND ANY CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.

 

[signature page follows]

 

2

 

IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement and Annex I hereto to be executed by their respective officers, as of the first date written above.

 

[SIGNATURE PAGE TO ASSIGNMENT AND ACCEPTANCE AGREEMENT]

 

 

	
 
    	
[NAME   OF ASSIGNOR],
    
	
 
    	
as   Assignor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[NAME   OF ASSIGNEE],
    
	
 
    	
as   Assignee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
[ACCEPTED   THIS            DAY   OF                         
    	
 
    
	
 
    	
 
    
	
WELLS FARGO CAPITAL FINANCE, LLC,
    	
 
    
	
a   Delaware limited liability company,
    	
 
    
	
as   Agent and Swing Lender
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
WELLS FARGO BANK, NATIONAL   ASSOCIATION,
    	
 
    
	
a   national banking association, as Issuing Bank
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
Title:](1)
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
[ACCEPTED   THIS          DAY OF                       
    	
 
    
	
 
    	
 
    
	
AVENTINE   RENEWABLE ENERGY HOLDINGS, INC.,
    	
 
    
	
a   Delaware corporation, as Administrative Borrower
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
Title:](2)
    	
 
    	
 
    
						

 

(1)  Include to the extent required by Section 13.1(a) of the Credit Agreement.

 

(2)  Include to the extent required by Section 13.1(a) of the Credit Agreement.

 

4

 

ANNEX I TO ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

	
1.
    	
Borrowers: Aventine Renewable Energy Holdings, Inc., a Delaware   corporation, Aventine Renewable Energy, Inc., a Delaware corporation,   Aventine Renewable Energy — Aurora West, LLC, a Delaware limited liability   company, Aventine Renewable Energy — Mt Vernon, LLC, a Delaware limited   liability company, Aventine Renewable Energy — Canton, LLC, a Delaware   limited liability company, Aventine Power, LLC, a Delaware limited liability   company, and Nebraska Energy, L.L.C., a Kansas limited liability company
    
	
 
    	
 
    
	
2.
    	
Name and Date of Credit Agreement:
    
	
 
    	
 
    
	
 
    	
 
    	
Second   Amended and Restated Credit Agreement, dated as of September 24, 2012, by and   among Borrowers, the lenders identified on the signature pages thereof (such   lenders, together with their respective successors and assigns in such   capacity, each, individually, a “Lender” and, collectively, the “Lenders”),   Wells Fargo Capital Finance, LLC, a Delaware limited liability company, as   agent for the Lenders
    
	
 
    	
 
    
	
3.
    	
Date   of Assignment Agreement:
    	
 
    
	
 
    	
 
    	
 
    
	
4.
    	
Amounts:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Assigned Amount of Commitment
    	
$
    
	
 
    	
 
    	
 
    
	
 
    	
Assigned   Amount of Revolving Loans
    	
$
    
	
 
    	
 
    	
 
    
	
5.
    	
Settlement   Date:
    	
 
    
	
 
    	
 
    	
 
    
	
6.
    	
Purchase   Price
    	
$
    
	
 
    	
 
    	
 
    
	
7.
    	
Notice   and Payment Instructions, etc.
    	
 
    
	
 
    	
 
    
	
 
    	
Assignee:
    	
 
    	
Assignor:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
						

 

 

EXHIBIT B-1

 

[see attached]

 

 

EXHIBIT C-1

 

FORM OF COMPLIANCE CERTIFICATE

 

[on Borrowers’ letterhead]

 

To:                              Wells Fargo Capital Finance, LLC, as Agent
 under the below referenced Credit Agreement
 2450 Colorado Avenue

Suite 3000 West

Santa Monica, California  90404

Attn:  Business Finance Division Manager

Fax No.:  (310) 453-7413

 

Re:          Compliance Certificate dated                , 20                         

 

Ladies and Gentlemen:

 

Reference hereby is made to that certain Second Amended and Restated Credit Agreement, dated as of September 24, 2012 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”), by and among Aventine Renewable Energy Holdings, Inc., a Delaware corporation (“Parent”), Aventine Renewable Energy, Inc., a Delaware corporation (“AREI”), Aventine Renewable Energy — Aurora West, LLC, a Delaware limited liability company (“ARE-AW”), Aventine Renewable Energy — Mt Vernon, LLC, a Delaware limited liability company (“ARE-MT”), Aventine Renewable Energy — Canton, LLC, a Delaware limited liability company (“ARE-C”), Aventine Power, LLC, a Delaware limited liability company (“Power”), and Nebraska Energy, L.L.C., a Kansas limited liability company (“Nebraska”; together with Parent, AREI, ARE-AW, ARE-MT, ARE-C and Power, are referred to hereinafter each individually as a “Borrower”, and individually and collectively, jointly and severally, as “Borrowers”), the lenders identified on the signature pages thereof (such lenders, together with their respective successors and assigns in such capacity, each, individually, a “Lender” and, collectively, the “Lenders”), and Wells Fargo Capital Finance, LLC, a Delaware limited liability company, as agent for the Lenders (“Agent”).  All initially capitalized terms used in this Compliance Certificate have the meanings set forth in the Credit Agreement unless specifically defined herein.

 

Pursuant to Schedule 5.1 of the Credit Agreement, the undersigned officer of Parent hereby certifies that:

 

1.             The financial information of Parent and its Subsidiaries furnished in Schedule 1 [attached hereto] [by filing such financial information with the Securities and Exchange Commission on                     , 20    ], has been prepared in accordance with GAAP (except for year-end adjustments and the lack of footnotes), and fairly presents in all material respects the financial condition of Parent and its Subsidiaries.

 

2.             Such officer has reviewed the terms of the Credit Agreement and has made, or caused to be made under his/her supervision, a review in reasonable detail of the transactions and conditions of Parent and its Subsidiaries during the accounting period covered by the financial statements delivered pursuant to Schedule 5.1 of the Credit Agreement.

 

 

3.             Such review has not disclosed the existence on and as of the date hereof, and the undersigned does not have knowledge of the existence as of the date hereof, of any event or condition that constitutes a Default or Event of Default, except for such conditions or events listed on Schedule 2 attached hereto, specifying the nature and period of existence thereof and what action Parent and its Subsidiaries have taken, are taking, or propose to take with respect thereto.

 

4.             The representations and warranties of Parent and its Subsidiaries set forth in the Credit Agreement and the other Loan Documents are true, correct and complete in all material respects (except that such materiality qualifier is not applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties are true, correct and complete in all material respects (except that such materiality qualifier is not applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date), except as set forth on Schedule 3 attached hereto.

 

5.             Borrowers are in compliance with the covenants contained in Section 7 of the Credit Agreement as demonstrated on Schedule 4 hereof.

 

6.             The following Form 8-Ks were filed over the last period:

 

7.             The following filings, other than Form 8-Ks, were made with the SEC over the last period:                      

 

 

IN WITNESS WHEREOF, this Compliance Certificate is executed by the undersigned this             day of                                                , 20                   .

 

 

	
 
    	
AVENTINE   RENEWABLE ENERGY HOLDINGS, INC.,
    
	
 
    	
a   Delaware corporation, as Administrative Borrower
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[SIGNATURE PAGE TO COMPLIANCE CERTIFICATE]

 

 

SCHEDULE 1

 

Financial Information

 

 

SCHEDULE 2

 

Default or Event of Default

 

 

SCHEDULE 3

 

Representations and Warranties

 

 

SCHEDULE 4

 

Financial Covenant

 

1.             Minimum Liquidity.

 

[Borrowers’ Excess Availability is $                             and Excess Availability plus Qualified Cash is $                            , as of                   ,                 , which amounts [are/are not] greater than or equal to the amounts required by Section 7.1(a) of the Credit Agreement for the corresponding period.](3)

 

[Borrowers’ Excess Availability is $                            , as of                   ,                 , which amount [is/is not] greater than or equal to the amounts required by Section 7.1(b) of the Credit Agreement for the corresponding period.](4)

 

2.             Minimum Ethanol Production.

 

For the trailing twelve month period ending                   ,                 , the aggregate for all of Borrowers’ ethanol production plants (excluding the Mt. Vernon Facility and any other such plants where Agent does not have a perfected first priority security interest in the Accounts and Inventory related thereto)  produced                    gallons of ethanol, which amount [is/is not] greater than or equal to the amount set forth in Section 7.2 of the Credit Agreement.

 

(3)  To be used if the aggregate principal amount of outstanding Revolving Loans is less than $1,000,000.

 

(4)  To be used if the aggregate principal amount of outstanding Revolving Loans is greater than or equal to $1,000,000.

 

 

EXHIBIT L-1

 

FORM OF LIBOR NOTICE

 

Wells Fargo Capital Finance, LLC, as Agent
 under the below referenced Credit Agreement
 2450 Colorado Avenue

Suite 3000 West

Santa Monica, California  90404

Attn:  Business Finance Division Manager

Fax No.:  (310) 453-7413

 

Ladies and Gentlemen:

 

Reference hereby is made to that certain Second Amended and Restated Credit Agreement, dated as of September 24, 2012 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”), by and among Aventine Renewable Energy Holdings, Inc., a Delaware corporation (“Parent”), Aventine Renewable Energy, Inc., a Delaware corporation (“AREI”), Aventine Renewable Energy — Aurora West, LLC, a Delaware limited liability company (“ARE-AW”), Aventine Renewable Energy — Mt Vernon, LLC, a Delaware limited liability company (“ARE-MT”), Aventine Renewable Energy — Canton, LLC, a Delaware limited liability company (“ARE-C”), Aventine Power, LLC, a Delaware limited liability company (“Power”), and Nebraska Energy, L.L.C., a Kansas limited liability company (“Nebraska”; together with Parent, AREI, ARE-AW, ARE-MT, ARE-C and Power, are referred to hereinafter each individually as a “Borrower”, and individually and collectively, jointly and severally, as “Borrowers”), the lenders identified on the signature pages thereof (such lenders, together with their respective successors and assigns in such capacity, each, individually, a “Lender” and, collectively, the “Lenders”), and Wells Fargo Capital Finance, LLC, a Delaware limited liability company, as agent for the Lenders (“Agent”).  All initially capitalized terms used herein without definition shall have the meanings ascribed thereto in the Credit Agreement.

 

This LIBOR Notice represents Borrowers’ request to elect the LIBOR Option with respect to outstanding Revolving Loans in the amount of $                 (the “LIBOR Rate Loan”), and is a written confirmation of the telephonic notice of such election given to Agent.

 

The LIBOR Rate Loan will have an Interest Period of 1, 2, or 3 month(s) commencing on                                     .

 

This LIBOR Notice further confirms Borrowers’ acceptance, for purposes of determining the rate of interest based on the LIBOR Rate under the Credit Agreement, of the LIBOR Rate as determined pursuant to the Credit Agreement.

 

Each Borrower represents and warrants that (i) each representation and warranty contained in or pursuant to any Loan Document or any agreement, instrument, certificate, document or other writing furnished at any time under or in connection with any Loan Document is true, correct and complete in all material respects (except that such materiality qualifier shall not be applicable to any representation or warranty that already is qualified or modified by materiality in the text thereof) as of the date hereof and as of the effective date of any Revolving Loan, continuation or conversion requested above (except to the extent any representation or warranty expressly related to an earlier date, in which case such representation or warranty shall be true, correct and complete in all material respects (except that such materiality qualifier shall not be applicable to any representation or warranty that already is qualified or modified by materiality in the text thereof) as of such earlier date), (ii) each of the covenants and agreements contained in any Loan Document have been performed (to the extent required to be performed on or before the date hereof or each such effective date), and (iii) no Default or Event of Default has occurred and is continuing on the date hereof, nor will any thereof occur after giving effect to the request above.

 

 

[signature page follows]

 

9

 

	
 
    	
Dated:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
AVENTINE   RENEWABLE ENERGY HOLDINGS, INC.,
    
	
 
    	
a   Delaware corporation, as Administrative Borrower
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
Acknowledged   by:
    	
 
    
	
 
    	
 
    
	
WELLS   FARGO CAPITAL FINANCE, LLC,
    	
 
    
	
a   Delaware limited liability company, as Agent
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    
						

 

[SIGNATURE PAGE TO LIBOR NOTICE]

 

 

Schedule A-1

 

Agent’s Account

 

An account at a bank designated by Agent from time to time as the account into which Borrowers shall make all payments to Agent for the benefit of the Lender Group and into which the Lender Group shall make all payments to Agent under this Agreement and the other Loan Documents; unless and until Agent notifies Administrative Borrower and the Lender Group to the contrary, Agent’s Account shall be that certain deposit account bearing account number 4124923707 with the account name “Wells Fargo Capital Finance, LLC” that is maintained by Agent with Wells Fargo Bank, N.A., 420 Montgomery Street, San Francisco, CA, ABA #121-000-248.

 

 

Schedule A-2

 

Authorized Persons

 

	
Loan Party
    	
 
    	
Name of Officer
    	
 
    	
Title/Position of Officer
    
	
Parent
    	
 
    	
John   W. Castle
    	
 
    	
President, Chief Executive Officer and Secretary
    
	
Parent
    	
 
    	
Calvin   Stewart
    	
 
    	
Chief Financial Officer
    
	
AREI
    	
 
    	
John   W. Castle
    	
 
    	
Vice President of Finance and Secretary
    
	
AREI
    	
 
    	
Calvin   Stewart
    	
 
    	
Senior Vice President, Assistant Secretary and Treasurer
    
	
ARE-AW, ARE-MT, Power, ARE-C
    	
 
    	
John   W. Castle
    	
 
    	
Vice President and Secretary
    
	
ARE-AW, ARE-MT, Power, ARE-C
    	
 
    	
Calvin   Stewart
    	
 
    	
Treasurer
    
	
Nebraska
    	
 
    	
John   W. Castle
    	
 
    	
Vice President of Finance and Secretary
    
	
Nebraska
    	
 
    	
Calvin   Stewart
    	
 
    	
Senior Vice President, Assistant Secretary and Treasurer
    

 

 

Schedule C-1

 

Commitments

 

	
Lender
    	
 
    	
Commitment
    	
 
    	
Total Commitment
    	
 
    
	
Wells Fargo Capital Finance, LLC
    	
 
    	
$
    	
30,000,000
    	
 
    	
$
    	
30,000,000
    	
 
    
	
All Lenders
    	
 
    	
$
    	
30,000,000
    	
 
    	
$
    	
30,000,000
    	
 
    

 

 

Schedule C-2

 

Coop Litigation

 

1.                                       On May 31, 2012, Parent served Aurora Cooperative Elevator Company (“Aurora”) with a petition for declaratory relief filed in the District Court of Dallas County, Texas, 160th Judicial District.  The petition alleges, among other things, that Aurora has improperly threatened — in direct contravention of the agreement between Parent and Aurora — to invoke a contractual option to repurchase the land on which Parent’s Aurora West ethanol plant (the “Plant”) is located.  Aurora’s stated position is that Aurora has the right to invoke the option if the Plant has not been producing ethanol for thirty days, at a daily rate equivalent to an annualized production rate of 90 million gallons, by July 31, 2012.

 

The petition alleges that the contract setting forth the option does not require thirty days of production in order to prevent Aurora’s exercise of the contractual option.  Rather Parent asserts the contract only requires that Parent “diligently pursue construction” of the Plant “to completion by July 1, 2012,” where “diligently pursue construction . . . to completion” does not mean “operation” or “production.” Parent is seeking a declaratory judgment that Parent was not required to operate the plant or produce ethanol at the Plant at the rates or amounts asserted by Aurora before July 31, 2012 and Parent need not operate the Plant or meet the production requirements to avoid the exercise of the contractual option.  On June 22, 2012, Aurora removed the action to the United States District Court for the Northern District of Texas.  Parent intends to pursue any and all rights available to it with respect to the foregoing.

 

On June 21, 2012, Aurora initiated a separate counter-action against Parent in the District Court of Hamilton County, Nebraska.  The petition alleges that Parent has repudiated its agreement with Aurora—the same agreement at issue in the litigation in Texas—and seeks specific performance under its terms.  Aurora’s position is that Parent did not “diligently pursue construction . . . to completion” because it did not operate the Plant to demonstrate that it was complete.  Aurora has asked for a judgment requiring Parent to sell the land on which the Plant is located.  On July 3, 2012, Parent removed the action to the United States District Court for the District of Nebraska.  Parent intends to defend all of its rights with respect to the agreement and its Plant.

 

2.                                       On Monday, September 16, 2012, Aurora provided Parent with a courtesy copy of a letter of complaint initiating an arbitration before the National Grain and Feed Association (the “NGFA Arbitration”). The letter of complaint claims that Parent is liable to Aurora for approximately $1.8 million for losses allegedly sustained by Aurora in connection with certain quantities of corn that Aurora claims it purchased for Parent under the Aventine Grain Supply Agreement, which governs certain corn purchases for Parent’s Aurora West ethanol facility.  Parent disputes liability.

 

On the same date, Parent sent to Aurora a letter noting that Aurora is past due on certain payments required to be made under that same Grain Supply Agreement and under the Aventine Marketing Agreement, and therefore terminating both agreements.  On Thursday, September 19, 2012, Aurora provided Parent with a courtesy copy of a complaint filed by Aurora in federal court in Nebraska (the “Termination Litigation”), in which Aurora principally seeks a declaration that the Grain Supply Agreement and Marketing Agreement were not terminable on the grounds asserted by Parent, and that these agreements remain in effect.  Parent contends that these agreements were terminable and have been terminated, and intends to vigorously defend its rights in connection with both the NGFA Arbitration and the Termination Litigation.

 

 

Schedule D-1

 

Designated Account

 

Account number 4123507220 of AREI maintained with AREI’s Designated Account Bank, or such other deposit account of Administrative Borrower or AREI (located within the United States) that has been designed as such, in writing, by Administrative Borrower to Agent.

 

“Designated Account Bank” means Wells Fargo Bank, N.A., whose address is PO Box 63020, San Francisco, CA  94163.

 

 

Schedule E-1

 

Eligible Inventory Locations

 

	
Address of Location Where Equipment, Inventory or Other 
   Tangible Personal Property is Maintained or Kept 
   (excluding inventory held by common carriers in the 
   ordinary course)
   (Property owner name, if different)
    	
 
    	
Description of Assets at Such Location
    
	
Kinder   Morgan Liquid Terminals, L.L.C.
   8500 West 68th Street
   Argo, IL 60501
    	
 
    	
Inventory
    
	
Parke   Warehouse
   1800 E Garfield Avenue
   Decatur, IL 62525
   (Parke and Son, Inc.)
    	
 
    	
Inventory
    
	
Bell   Enterprises
   30082 Harding Road
   Deer Creek, IL 61733
    	
 
    	
Inventory
    
	
J &   L Dock facilities
   Foot of Sanger St.
   Peoria, IL 61602
    	
 
    	
Inventory
    
	
Peoria   Barge Terminal
   Foot of Sanger St.
   Peoria, IL 61602
   (Finch Family Land Trust)
    	
 
    	
Inventory
    
	
Buckeye   Terminals, L.L.C.
   14410 N. Old Galena Road
   Chillicothe, IL 61523
    	
 
    	
Inventory
    
	
Buckeye   Terminals, L.L.C.
   18264 N. US Highway 45
   Effingham, IL 62401
    	
 
    	
Inventory
    
	
AREI
   1300 S. Second Street
   Pekin, IL 61554
    	
 
    	
Manufacturing   Equipment, Inventory
    
	
Nebraska
   1205 S. “O” Road
   Aurora, NE 68818
    	
 
    	
Manufacturing   Equipment, Inventory
    
	
ARE-AW
   2103 Harvest Drive
   Aurora, Nebraska 68818
    	
 
    	
Manufacturing   Equipment, Inventory
    
	
ARE-C
   23133 E County Hwy 6
   Canton, IL 61520
    	
 
    	
Manufacturing   Equipment, Inventory
    
	
ARE-MT
   7201 Port Road
   Mt. Vernon, IN 47620
    	
 
    	
Manufacturing   Equipment, Inventory
    

 

 

Schedule E-2

 

Existing Letters of Credit

 

	
Applicant
    	
 
    	
Issuer
    	
 
    	
Beneficiary
    	
 
    	
Amount
    	
 
    	
Effective Date
    	
 
    	
Expiration Date
    	
 
    
	
ARE-AW
    	
 
    	
Wells   Fargo Bank, National Association
    	
 
    	
Kinder   Morgan Interstate Gas Transmission LLC
    	
 
    	
$
    	
4,978,000.00
    	
 
    	
7/21/2010
    	
 
    	
7/21/2013
    	
 
    
	
ARE-AW
    	
 
    	
Wells   Fargo Bank, National Association
    	
 
    	
Southern   Public Power District
    	
 
    	
$
    	
100,000.00
    	
 
    	
8/19/2010
    	
 
    	
8/19/2013
    	
 
    
	
ARE-MT
    	
 
    	
Wells   Fargo Bank, National Association
    	
 
    	
Southern   Indiana Gas & Electric
    	
 
    	
$
    	
2,367,208.00
    	
 
    	
10/5/2010
    	
 
    	
10/1/2012
    	
 
    
	
AREI
    	
 
    	
Wells   Fargo Bank, National Association
    	
 
    	
Florida   Department of Revenue 
    	
 
    	
$
    	
170,000.00
    	
 
    	
10/20/2011
    	
 
    	
10/14/2012
    	
 
    

 

 

Schedule P-1

 

Permitted Investments

 

	
Holder
    	
 
    	
Issuer
    	
 
    	
Ownership Interest /
   Number of Shares or 
   Interests Owned
    	
 
    	
Class/Type of Interest
    	
 
    	
Certificate 
   No.
    	
 
    
	
AREI
    	
 
    	
Advanced Bio-Energy LLC
    	
 
    	
131,579
    	
 
    	
Membership Interest
    	
 
    	
852
    	
 
    
	
Parent
    	
 
    	
Imperial Petroleum, Inc.
    	
 
    	
425,000
    	
 
    	
Common Stock
    	
 
    	
7206
    	
 
    
	
AREI
    	
 
    	
Northeast Iowa Ethanol*
    	
 
    	
7.9%
    	
 
    	
Membership Interest
    	
 
    	
Uncertificated
    	
 
    
	
AREI
    	
 
    	
TriStates Ethanol Company LLC*
    	
 
    	
15.1%
    	
 
    	
Membership Interest
    	
 
    	
Uncertificated
    	
 
    
	
AREI
    	
 
    	
Fluid Technologies n/k/a Micap Plc*
    	
 
    	
1.9%
    	
 
    	
Membership Interest
    	
 
    	
254   and 407
    	
 
    

 

*These investments are unlikely to be recoverable and have been written down to $0 on Aventine’s general ledger and financial records.

 

 

Schedule P-2

 

Permitted Liens

 

	
Name of 
   Debtor
    	
 
    	
Name of 
   Current 
   Secured Party
    	
 
    	
Jurisdiction
    	
 
    	
Filing Date
    	
 
    	
File Number
    	
 
    	
Type of Lien
    	
 
    
	
Aventine   Renewable Energy Holdings, Inc.
    	
 
    	
Citibank,   N.A., as Collateral Agent
    	
 
    	
Delaware
    	
 
    	
12/22/2010
    	
 
    	
2010

4551317
    	
 
    	
UCC-1   securing all assets, whether now owned or hereafter acquired
    	
 
    
	
Aventine   Renewable Energy Holdings, Inc.
    	
 
    	
Citibank,   N.A., as Collateral Agent
    	
 
    	
Delaware
    	
 
    	
09/14/2012
    	
 
    	
2012

3554641
    	
 
    	
UCC-3   Amendment to file no. 2010 4551317 to update debtor’s address.
    	
 
    
	
Aventine   Renewable Energy, Inc.
    	
 
    	
Citibank,   N.A., as Collateral Agent
    	
 
    	
Delaware
    	
 
    	
12/22/2010
    	
 
    	
2010

4551176
    	
 
    	
UCC-1   securing all assets, whether now owned or hereafter acquired
    	
 
    
	
Aventine   Renewable Energy, Inc.
    	
 
    	
Citibank,   N.A., as Collateral Agent
    	
 
    	
Delaware
    	
 
    	
09/14/2012
    	
 
    	
2012

3554666
    	
 
    	
UCC-3   Amendment to file no. 2010 4551176 to update debtor’s address.
    	
 
    
	
Aventine   Renewable Energy — Aurora West, LLC

 
    	
 
    	
Citibank,   N.A., as Collateral Agent
    	
 
    	
Delaware
    	
 
    	
12/22/2010
    	
 
    	
2010

4551036
    	
 
    	
UCC-1   securing all assets, whether now owned or hereafter acquired
    	
 
    
	
Aventine   Renewable Energy — Aurora West, LLC
    	
 
    	
Citibank,   N.A., as Collateral Agent
    	
 
    	
Delaware
    	
 
    	
09/14/2012
    	
 
    	
2012

3554799
    	
 
    	
UCC-3   Amendment to file no. 2010 4551036 to update debtor’s address.
    	
 
    
	
Aventine   Renewable Energy — Mt Vernon, LLC

 
    	
 
    	
Citibank,   N.A., as Collateral Agent

 
    	
 
    	
Delaware
    	
 
    	
12/22/2010
    	
 
    	
2010

4551101
    	
 
    	
UCC-1   securing all assets, whether now owned or hereafter acquired
    	
 
    
	
Aventine   Renewable Energy — Mt Vernon, LLC
    	
 
    	
Citibank,   N.A., as Collateral Agent

 
    	
 
    	
Delaware
    	
 
    	
09/14/2012
    	
 
    	
2012

3554856
    	
 
    	
UCC-3   Amendment to file no. 2010 4551101 to update debtor’s address.
    	
 
    
	
Aventine   Renewable Energy — Mt Vernon, LLC
    	
 
    	
Citibank,   N.A., as Collateral Agent

 
    	
 
    	
Delaware
    	
 
    	
09/21/2012
    	
 
    	
2012

3647510
    	
 
    	
UCC-3   Amendment to file no. 2010 4551101 to correct debtor’s name. 
    	
 
    

 

 

	
Name of 
   Debtor
    	
 
    	
Name of 
   Current 
   Secured Party
    	
 
    	
Jurisdiction
    	
 
    	
Filing Date
    	
 
    	
File Number
    	
 
    	
Type of Lien
    	
 
    
	
Nebraska Energy, L.L.C.
    	
 
    	
Citibank,   N.A., as Collateral Agent

 
    	
 
    	
Kansas
    	
 
    	
12/22/2010
    	
 
    	
6757504
    	
 
    	
UCC-1   securing all assets, whether now owned or hereafter acquired
    	
 
    
	
Nebraska Energy, L.L.C.
    	
 
    	
Citibank,   N.A., as Collateral Agent

 
    	
 
    	
Kansas
    	
 
    	
09/14/2012
    	
 
    	
6935530
    	
 
    	
UCC-3   Amendment to file no. 6757504 to update debtor’s address.
    	
 
    
	
Aventine   Power, LLC
    	
 
    	
Citibank,   N.A., as Collateral Agent

 
    	
 
    	
Delaware
    	
 
    	
12/22/2010
    	
 
    	
2010

4550954
    	
 
    	
UCC-1   securing all assets, whether now owned or hereafter acquired
    	
 
    
	
Aventine   Power, LLC
    	
 
    	
Citibank,   N.A., as Collateral Agent

 
    	
 
    	
Delaware
    	
 
    	
09/14/2012
    	
 
    	
2012

3554757
    	
 
    	
UCC-3   Amendment to file no. 2010 4550954 to update debtor’s address.
    	
 
    
	
Aventine   Renewable Energy — Canton, LLC
    	
 
    	
Citibank,   N.A., as Collateral Agent
    	
 
    	
Delaware
    	
 
    	
12/22/2010
    	
 
    	
2010

4551358
    	
 
    	
UCC-1   securing all assets, whether now owned or hereafter acquired
    	
 
    
	
Aventine   Renewable Energy — Canton, LLC
    	
 
    	
Citibank,   N.A., as Collateral Agent
    	
 
    	
Delaware
    	
 
    	
09/14/2012
    	
 
    	
2012

3554823
    	
 
    	
UCC-3   Amendment to file no.2010 4551358 to update debtor’s address.
    	
 
    
	
Aventine   Renewable Energy Holdings, Inc.
    	
 
    	
Aurora   Cooperative Elevator Company
    	
 
    	
Hamilton   County, NE
    	
 
    	
08/06/2007
    	
 
    	
Memorandum   of Real Estate Option by and between Aventine Renewable Energy Holdings, Inc.   and Aurora Cooperative Elevator Company dated July 24, 2007, recorded   August 6, 2007, as Book 46, Page 235, as affected by the Memorandum   of Amended Real Estate Option dated March 15, 2010, recorded April 1,   2010, as Book 48, Page 77, by and between Aventine Renewable Energy   Holdings, Inc. and Aurora Cooperative Elevator Company 
    	
 
    
	
Aventine   Renewable Energy Holdings, Inc
    	
 
    	
Spoon   River Electric Cooperative
    	
 
    	
Fulton   County, IL
    	
 
    	
09/06/2006
    	
 
    	
Mortgage   made by Central Illinois Energy Cooperative to Spoon River Electric   Cooperative dated September 6, 2006, recorded September 7, 2006, as   Document 0607109, as affected by Assignment and Assumption of Mortgage dated   August 6, 2010, recorded August 19, 2010, as Document 1035196, from   New CIE Energy Opco, 
    	
 
    

 

 

	
Name of 
   Debtor
    	
 
    	
Name of 
   Current 
   Secured Party
    	
 
    	
Jurisdiction
    	
 
    	
Filing Date
    	
 
    	
File Number
    	
 
    	
Type of Lien
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
LLC,   to Aventine Renewable Energy Holdings, Inc. (the “Spoon   River Mortgage”)
    	
 
    
	
Aventine   Renewable Energy, Inc.
    	
 
    	
Citibank,   N.A. as Agent
    	
 
    	
Tazewell   County, Illinois
    	
 
    	
03/29/2011
    	
 
    	
201100005692
    	
 
    	
Mortgage   recorded to secure repayment indebtedness of $225,000,000 to Citibank, N.A.,   as Agent
    	
 
    
	
Nebraska Energy, L.L.C. 
    	
 
    	
Chicago   Title Insurance Company, as Trustee, for the benefit of Citibank, N.A., as   Agent

 
    	
 
    	
Hamilton   County, Nebraska
    	
 
    	
03/29/2011
    	
 
    	
Page 267,   Page 81
    	
 
    	
Deed   of Trust recorded to secure repayment indebtedness of $225,000,000 to   Citibank, N.A., as Agent
    	
 
    
	
Aventine   Renewable Energy — Aurora West, LLC
    	
 
    	
Chicago   Title Insurance Company, as Trustee, for the benefit of Citibank, N.A., as   Agent

 
    	
 
    	
Hamilton   County, Nebraska
    	
 
    	
03/29/2011
    	
 
    	
Book   267, Page 79
    	
 
    	
Deed   of Trust recorded to secure repayment indebtedness of $225,000,000 to   Citibank, N.A., as Agent
    	
 
    
	
Aventine   Renewable Energy — Mt Vernon, LLC
    	
 
    	
Citibank,   N.A., as Agent
    	
 
    	
Posey   County, Indiana
    	
 
    	
03/25/11
    	
 
    	
201101239
    	
 
    	
Mortgage   recorded to secure repayment indebtedness of $225,000,000 to Citibank, N.A.,   as Agent
    	
 
    
	
Aventine   Renewable Energy — Canton, LLC
    	
 
    	
Citibank,   N.A., as Agent
    	
 
    	
Fulton   County, Illinois
    	
 
    	
04/01/2011
    	
 
    	
1139255
    	
 
    	
Mortgage   recorded to secure repayment indebtedness of $225,000,000 to Citibank, N.A.,   as Agent
    	
 
    
	
Aventine   Renewable Energy — Canton, LLC
    	
 
    	
N/A
    	
 
    	
Fulton   County, IL
    	
 
    	
10/01/2009
    	
 
    	
Document   0929775
    	
 
    	
Development   Agreement by and between the County of Fulton, Illinois and Riverland   Biofuels, LLC.
    	
 
    
	
Aventine   Renewable Energy, Inc. 
    	
 
    	
N/A
    	
 
    	
Tazewell   County, IL
    	
 
    	
05/06/1968
    	
 
    	
Vol.   792, Pg. 455
    	
 
    	
Mineral   rights reserved by Peoria Terminal Company in Warranty Deed to Corn Products   Company dated April 
    	
 
    

 

 

	
Name of 
   Debtor
    	
 
    	
Name of 
   Current 
   Secured Party
    	
 
    	
Jurisdiction
    	
 
    	
Filing Date
    	
 
    	
File Number
    	
 
    	
Type of Lien
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
26,   1968.
    	
 
    
	
Aventine   Renewable Energy — Mt Vernon, LLC
    	
 
    	
N/A
    	
 
    	
Posey   County, IN
    	
 
    	
12/08/1942
    	
 
    	
Deed   Record 56, Pg. 343
    	
 
    	
Mineral   reservation contained in Warranty Deed from Alonzo Allyn and Olive B. Allyn,   his wife, to Casper Graulich and Julia Graulich, husband and wife, dated   November 19, 1942.
    	
 
    
	
Nebraska   Energy, L.L.C.
    	
 
    	
Wilmington   Trust, FSB, as Collateral Agent
    	
 
    	
Hamilton   County, NE
    	
 
    	
03/19/2010
    	
 
    	
Book   259, Page 172
    	
 
    	
UCC-1   securing all right, title and interest to real property described in Exhibit A   thereto and all improvements, fixture property, security property, leases,   rents, agreements, and awards related thereto.
    	
 
    
	
Aventine   Renewable Energy Holdings, Inc.
    	
 
    	
Wilmington   Trust, FSB, as Collateral Agent
    	
 
    	
Hamilton   County, NE
    	
 
    	
05/21/2010
    	
 
    	
Book   261, Page 37
    	
 
    	
UCC-1   securing all right, title and interest to real property described in Exhibit A   thereto and all improvements, fixture property, security property, leases,   rents, agreements, and awards related thereto.
    	
 
    

 

 

Schedule N-1

 

New Equity Holders

 

	
Lender Name
    
	
 
    
	
ALJ Capital
    
	
ALJ CAPITAL I, L.P.
    
	
ALJ CAPITAL II, L.P.
    
	
LJR CAPITAL L.P.
    
	
Alliance Capital
    
	
ALLIANCEBERNSTEIN EVENT   DRIVEN OPPORTUNITIES FUND (DELAWARE), L.P.
    
	
ALLIANCEBERNSTEIN   STRATEGIC OPPORTUNITIES FUND, L.P.
    
	
Altai Capital Management
    
	
ALTAI CAPITAL MASTER   FUND, LTD.
    
	
Apollo / Stone Tower
    
	
APOLLO INVESTMENT   CORPORATION
    
	
Credit Suisse
    
	
CREDIT SUISSE LOAN FUNDING   LLC
    
	
DK Partners
    
	
MIDTOWN ACQUISITIONS L.P.
    
	
Macquarie Group
    
	
MACQUARIE BANK LIMITED
    
	
Redwood Capital Management
    
	
REDWOOD MASTER   FUND, LTD.
    
	
Seix Advisors
    
	
RIDGEWORTH HIGH INCOME   FUND
    
	
RIDGEWORTH SEIX FLOATING   RATE HIGH INCOME FUND
    
	
ROCHDALE FIXED INCOME   PORTFOLIOS
    
	
SEIX MULTI-SECTOR ABSOLUTE   RETURN FUND LP
    
	
UNIVERSITY OF ROCHESTER
    
	
Senator Investment Group
    
	
SENATOR GLOBAL OPPORTUNITY   MASTER FUND L.P.
    
	
TPG
    
	
TCS II OPPORTUNITIES, L.P.
    
	
TPG CREDIT OPPORTUNITIES   FUND L.P.
    
	
TPG CREDIT OPPORTUNITIES   INVESTORS, L.P.
    
	
TPG CREDIT STRATEGIES FUND   II, L.P.
    
	
TPG CREDIT STRATEGIES   FUND, L.P.
    

 

 

Schedule R-1

 

Real Property Collateral

 

Owned Real Property

 

	
Loan Party as Owner
    	
 
    	
Property
    	
 
    	
County
    
	
AREI
    	
 
    	
1300   S. Second Street
   Pekin, Illinois 61554
    	
 
    	
Tazewell
    
	
Nebraska
    	
 
    	
1205   S. “O” Road
   Aurora, Nebraska 68818
    	
 
    	
Hamilton
    
	
ARE-AW
    	
 
    	
2103   Harvest Drive
   Aurora, Nebraska 68818
    	
 
    	
Hamilton
    
	
ARE-C
    	
 
    	
23133   E County Hwy 6
   Canton, IL 61520
    	
 
    	
Fulton
    

 

Leased Real Property

Loan Party as Lessee

 

	
Loan 
   Party as 
   Lessee
    	
 
    	
Lessor/Sublessor
    	
 
    	
Property Address
    	
 
    	
County
    
	
AREI
    	
 
    	
Skywire Software, LLC as Sublessor
    	
 
    	
One Lincoln Centre, 5400 LBJ Freeway, Suite 450 Dallas, Texas   75240
    	
 
    	
Dallas
    
	
ARE-MT
    	
 
    	
Ports of Indiana
    	
 
    	
7201 Port Road 
   Mt. Vernon, Indiana 47620
    	
 
    	
Posey
    

 

Loan Party as Lessor

 

	
Loan 
   Party as 
   Lessor
    	
 
    	
Lessee
    	
 
    	
Property Address
    	
 
    	
County
    
	
AREI
    	
 
    	
Continental Carbonic   Products, Inc., an Illinois corporation
    3985 East Harrison Avenue

Decatur, IL 62526
    	
 
    	
1300 S. Second Street
   Pekin, Illinois 61554
    	
 
    	
Tazewell
    
	
AREI
    	
 
    	
Linde, Inc.,   a Delaware corporation
   575 Mountain Avenue

Murray   Hill, New Jersey 07974
    	
 
    	
1300 S. Second Street
   Pekin, Illinois 61554
    	
 
    	
Tazewell
    
	
AREI
    	
 
    	
Turner Grain Services, Inc., an Illinois   corporation
   P.O. Box 411
   Pekin, IL 61555-0411
    	
 
    	
1300 S. Second Street
   Pekin, Illinois 61554
    	
 
    	
Tazewell
    

 

 

Schedule 1.1(a)

 

Specified Account Debtors

 

1.               Motiva Enterprises, L.L.C.

 

2.               Cargill Incorporated

 

3.               Marathon Petroleum Corp.

 

 

Schedule 3.1

 

Conditions Precedent

 

The effectiveness of the Agreement and the obligation of each Lender to make its initial extension of credit provided for in the Agreement is subject to the fulfillment, to the satisfaction of each Lender (the making of such initial extension of credit by any Lender being conclusively deemed to be its satisfaction or waiver of the following), of each of the following conditions precedent:

 

(a)                                  the Closing Date shall occur on or before September 30, 2012;

 

(b)                                 Agent shall have received evidence that appropriate financing statements have been duly filed in such office or offices as may be necessary or, in the opinion of Agent, desirable to perfect the Agent’s Liens in and to the Collateral;

 

(c)                                  Agent shall have received each of the following documents, in form and substance satisfactory to Agent, duly executed, and each such document shall be in full force and effect:

 

(i)                                     the Fee Letter,

 

(ii)                                  the Reaffirmation Agreement,

 

(iii)                               the Intercreditor Agreement, and

 

(iv)                              the Perfection Certificate;

 

(d)                                 Agent shall have received a certificate from an authorized officer of each Borrower (i) attesting to the resolutions of such Borrower’s Board of Directors authorizing its execution, delivery, and performance of this Agreement and the other Loan Documents to which such Borrower is a party, (ii) authorizing specific officers of such Borrower to execute the same, and (iii) attesting to the incumbency and signatures of such specific officers of such Borrower;

 

(e)                                  Agent shall have received certified copies of each Borrower’s Governing Documents, as amended, modified, or supplemented to the Closing Date, certified by an authorized officer of such Borrower;

 

(f)                                    Agent shall have received a certificate of status with respect to each Borrower, dated within 10 days of the Closing Date, such certificate to be issued by the appropriate officer of the jurisdiction of organization of such Borrower, which certificate shall indicate that such Borrower is in good standing in such jurisdiction;

 

(g)                                 Agent shall have received (i) certificates of status with respect to each Borrower, each dated within 30 days of the Closing Date, such certificates to be issued by the appropriate officer of the jurisdictions (other than the jurisdiction of organization of such Borrower) in which its failure to be duly qualified or licensed would have a Material Adverse Effect, which certificates shall indicate that such Borrower is in good standing in such jurisdictions, or (ii) to the extent that any Borrower is unable to obtain such certificates of status, evidence that such Borrower is in good standing in the applicable jurisdictions, the form and substance of which shall be satisfactory to Agent, which evidence shall include a certificate of an authorized officer of Parent certifying that such Borrower is in good standing in such jurisdictions;

 

(h)                                 Agent shall have received an opinion of Borrowers’ counsel in form and substance satisfactory to Agent;

 

 

(i)                                     Borrowers shall have Availability, plus Qualified Cash, of at least $25,000,000 (the “Required Availability”), after giving effect to the extensions of credit under the Term Loan Agreement on the Closing Date and the payment of all fees and expenses (including Lender Group Expenses) required to be paid by Borrowers on the Closing Date under this Agreement or the other Loan Documents or under the Restructuring Documents;

 

(j)                                     Agent shall have received a set of Projections of Parent and its Subsidiaries for the 2 year period following the Closing Date (on a year by year basis, and for the 1 year period following the Closing Date, on a month by month basis), in form and substance (including as to scope and underlying assumptions) satisfactory to Agent;

 

(k)                                  Borrowers shall have paid to Agent and the Lenders (i) all Lender Group Expenses incurred by Agent and such Lenders in connection with the transactions evidenced by the Agreement and the other Loan Documents, and (ii) all fees required to be paid by Borrowers to Agent and such Lenders on the Closing Date under the Agreement and the other Loan Documents (including the Fee Letter);

 

(l)                                     Borrowers shall have provided Agent with a Borrowing Base Certificate evidencing that Excess Availability shall be no less than $2,500,000 after giving effect to the Revolver Usage as of the Closing Date and the implementation of the Availability Block and after giving effect to the payment of all fees and expenses required to be paid by Borrowers on the Closing Date under the Agreement or the other Loan Documents (including the Fee Letter);

 

(m)                               Parent and each of its Subsidiaries shall have received all licenses, approvals or evidence of other actions required by any Governmental Authority in connection with the execution and delivery by Parent or its Subsidiaries of the Loan Documents or with the consummation of the transactions contemplated thereby;

 

(n)                                 Agent shall have received copies of each of: (i) the Restructuring Agreement, (ii) to the extent executed and delivered on the Closing Date, the Term Loan Documents, other than any “Fee Letter” or “Note”, as each such term is defined in the Term Loan Agreement, and (iii) the Equity Documents (excluding the Warrants, but including copies of the form of Warrant certificates attached to the Warrant Agreement), which in the case of each of (i), (ii), and (iii), shall be in form and substance satisfactory to Agent, together with a certificate of an authorized officer of Parent certifying each such document as being a true, correct, and complete copy thereof;

 

(o)                                 All of the conditions precedent set forth in the Restructuring Documents shall have been satisfied or waived in accordance therewith and copies of any deliverables provided to Term Loan Agent or the Term Loan Lenders in satisfaction of such conditions precedent shall have been provided to Agent (subject to customary confidentiality exceptions);

 

(p)                                 Agent shall have received a solvency certificate, in form and substance satisfactory to it, certifying as to the solvency of the Loan Parties taken as a whole after giving effect to the consummation of the Equity Issuance and the other transactions contemplated pursuant to the terms of the Restructuring Documents on the Closing Date (collectively, the “Restructuring”);

 

(q)                                 Agent shall have received a certificate executed by an authorized officer of each Borrower certifying to, among other things, (i) the Required Availability required pursuant to clause (i) above, (ii) the receipt of the items set forth in clause (n) above, (iii) the consummation of the Restructuring, (iv) the truthfulness and correctness of the representations and warranties set forth in Section 3.2(a) of the Agreement, (v) no Defaults or Events of Default existing as required by Section 3.2(b) of the Agreement, and (vi) the satisfaction of all conditions precedent set forth in this Schedule 3.1 and in Section 3.2 of the Agreement;

 

 

(r)                                    since August 17, 2012, no event, circumstance, or change has occurred that could reasonably be expected to result in a Material Adverse Effect with respect to the Loan Parties and their Subsidiaries;

 

(s)                                  no Default or Event of Default shall have occurred and be continuing, or would result from the execution of this Agreement and the other Loan Documents and the consummation of the transactions contemplated hereby and by the Restructuring Documents; and

 

(t)                                    all other documents and legal matters in connection with the transactions contemplated by this Agreement shall have been delivered, executed, or recorded and shall be in form and substance satisfactory to Agent.

 

 

Schedule 4.1(b)

 

Capitalization of Parent(1)

 

	
Class
    	
 
    	
Authorized Number of Shares
    	
 
    	
Number of Shares Issued and 
   Outstanding as of the Closing Date
    	
 
    
	
Common Stock, $0.001 Par   Value  
    	
 
    	
15,000,000
    	
 
    	
2,353,444
    	
 
    
	
Preferred Stock
    	
 
    	
5,000,000
    	
 
    	
None
    	
 
    

 

Subscriptions, Options, Warrants, Calls, Conversion Rights and Exchange Rights

 

There are approximately 13,843 shares underlying outstanding stock awards, including 2,903 shares underlying stock options and 2,197 shares underlying RSUs. There are approximately 7,658 shares held by the unsecured claims stock pool. There are approximately 8,991 unexercised warrants to purchase shares of common stock.(2)

 

There are no subscriptions, calls, conversion rights or exchange rights with respect to Parent’s Common Stock or Preferred Stock.

 

The Warrants to be issued under the Warrant Agreement.

 

(1)  After giving effect to the transactions contemplated by the Equity Documents, including the reverse stock split.

 

(2)  The unexercised warrants will expire shortly after the Closing in accordance with their terms. Otherwise, the unexercised warrants may be subject to further adjustment as a result of the warrant issuance under Section 4.1(d) or (f) of the related warrant agreement.

 

 

Schedule 4.1(c)

 

Capitalization of Parent’s Subsidiaries

 

	
Subsidiary
    	
 
    	
# of Shares Owned /
   Units Owned
    	
 
    	
# of Shares 
   / Units 
   Outstanding
    	
 
    	
Percentage 
   Ownership
    	
 
    	
Ownership 
   Interest
    	
 
    	
Percentage 
   Owned 
   Directly/Indirectly 
   by Parent
    	
 
    
	
AREI
    	
 
    	
1,000 Shares
    	
 
    	
1,000 Shares
    	
 
    	
100
    	
%
    	
Shares of Common Stock
    	
 
    	
100
    	
%
    
	
ARE-AW
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
100
    	
%
    	
Membership interests
    	
 
    	
100
    	
%
    
	
ARE-MT
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
100
    	
%
    	
Membership interests
    	
 
    	
100
    	
%
    
	
Power
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
100
    	
%
    	
Membership interests
    	
 
    	
100
    	
%
    
	
Nebraska
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
78.414
    	
%
    	
Membership interests
    	
 
    	
100
    	
%(3)
    
	
ARE-C
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
100
    	
%
    	
Membership interests
    	
 
    	
100
    	
%
    

 

Subscriptions, Options, Warrants, Calls, Conversion Rights and Exchange Rights

 

None.

 

(3)  Parent owns 78.414% of the membership units of Nebraska and Parent’s wholly-owned subsidiary AREI. owns 21.586% of the membership units of Nebraska.

 

 

Schedule 4.6(a)

 

Name and Jurisdiction of Organization

 

	
Loan Party
    	
 
    	
Jurisdiction of Organization
    
	
Aventine   Renewable Energy Holdings, Inc.
    	
 
    	
Delaware
    
	
Aventine   Renewable Energy, Inc.
    	
 
    	
Delaware
    
	
Aventine   Renewable Energy — Aurora West, LLC
    	
 
    	
Delaware
    
	
Aventine   Renewable Energy — Mt Vernon, LLC
    	
 
    	
Delaware
    
	
Aventine   Power, LLC
    	
 
    	
Delaware
    
	
Nebraska Energy, L.L.C.
    	
 
    	
Kansas
    
	
Aventine   Renewable Energy — Canton, LLC
    	
 
    	
Delaware
    

 

 

Schedule 4.6(b)

 

Chief Executive Offices

 

	
Loan Party
    	
 
    	
Address
    
	
Aventine Renewable Energy Holdings, Inc.
    	
 
    	
One Lincoln Centre, 5400 LBJ Freeway,   Suite 450 Dallas, Texas 75240
    
	
Aventine Renewable Energy, Inc.
    	
 
    	
One Lincoln Centre, 5400 LBJ Freeway,   Suite 450 Dallas, Texas 75240
    
	
Aventine Renewable Energy — Aurora West, LLC
    	
 
    	
One Lincoln Centre, 5400 LBJ Freeway, Suite 450   Dallas, Texas 75240
    
	
Aventine Renewable Energy — Mt Vernon, LLC
    	
 
    	
One Lincoln Centre, 5400 LBJ Freeway,   Suite 450 Dallas, Texas 75240
    
	
Aventine Power, LLC
    	
 
    	
One Lincoln Centre, 5400 LBJ Freeway,   Suite 450 Dallas, Texas 75240
    
	
Nebraska Energy,   L.L.C.
    	
 
    	
One Lincoln Centre, 5400 LBJ Freeway,   Suite 450 Dallas, Texas 75240
    
	
Aventine Renewable Energy — Canton, LLC
    	
 
    	
One Lincoln Centre, 5400 LBJ Freeway,   Suite 450 Dallas, Texas 75240
    

 

 

Schedule 4.6(c)

 

Tax Identification Numbers and Organizational Identification Numbers

 

	
Loan Party
    	
 
    	
Organizational Identification 
   Number
    	
 
    	
Federal Tax Identification 
   Number
    
	
Aventine Renewable Energy Holdings, Inc.
    	
 
    	
3623696
    	
 
    	
05-0569368
    
	
Aventine Renewable Energy, Inc.
    	
 
    	
2505911
    	
 
    	
75-3108352
    
	
Aventine Renewable Energy — Aurora West, LLC
    	
 
    	
4199627
    	
 
    	
20-5359285
    
	
Aventine Renewable Energy — Mt Vernon, LLC
    	
 
    	
4211292
    	
 
    	
20-5838144
    
	
Aventine Power, LLC
    	
 
    	
4199626
    	
 
    	
20-5359343
    
	
Nebraska Energy,   L.L.C.
    	
 
    	
2108371
    	
 
    	
47-0771872
    
	
Aventine Renewable Energy — Canton, LLC
    	
 
    	
4848807
    	
 
    	
27-3127915
    

 

 

Schedule 4.6(d)

 

Commercial Tort Claims

 

1.                     On November 6, 2008, AREI filed a Complaint against JPMorgan Securities, Inc. and JPMorgan Chase Bank, N.A. in the Circuit Court for the Tenth Judicial Circuit of Tazewell County, Illinois (Case No. 08 L 142).  AREI seeks to recover $31.6 million lost in the investment of funds in student loan backed auction rate securities.  AREI alleges that JPMorgan Chase Bank, through its investment arm JPMorgan Securities, gave false assurances of the liquidity of this type of investment.  The $31.6 million figure represents funds lost because AREI was forced to sell the investment at a loss after the securities became illiquid.  The matter is currently pending before a FINRA arbitration panel set to be heard late 2012.

 

2.                     On April 7, 2009, Aventine Renewable Energy Holdings, Inc. and all of its direct and indirect subsidiaries (collectively “the Debtors”), filed voluntary petitions with the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) to reorganize under Chapter 11 of the United States Code.  On January 13, 2010, the Debtors filed the First Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code, dated as of January 13, 2010 (as modified, the “Plan”).  The Plan was confirmed by order entered by the Bankruptcy Court on February 24, 2010 and became effective on March 15, 2010 (the “Effective Date”), the date on which the Company emerged from protection under Chapter 11 of the Bankruptcy Code.  Since the Effective Date most of the Debtors’ cases have been closed by order of the Bankruptcy Court; however, the case of Aventine Renewable Energy, Inc. remains open, wherein certain creditor claims remain subject to dispute and further adjudication, as do certain claims and potential claims by Aventine Renewable Energy, Inc. against certain third parties to recover sums which Aventine asserts is owed to it.

 

3.                     On May 31, 2012, Parent served Aurora Cooperative Elevator Company (“Aurora”) with a petition for declaratory relief filed in the District Court of Dallas County, Texas, 160th Judicial District.  The petition alleges, among other things, that Aurora has improperly threatened — in direct contravention of the agreement between Parent and Aurora — to invoke a contractual option to repurchase the land on which Parent’s Aurora West ethanol plant (the “Plant”) is located.  Aurora’s stated position is that Aurora has the right to invoke the option if the Plant has not been producing ethanol for thirty days, at a daily rate equivalent to an annualized production rate of 90 million gallons, by July 31, 2012.

 

The petition alleges that the contract setting forth the option does not require thirty days of production in order to prevent Aurora’s exercise of the contractual option.  Rather Parent asserts the contract only requires that Parent “diligently pursue construction” of the Plant “to completion by July 1, 2012,” where “diligently pursue construction . . . to completion” does not mean “operation” or “production.” Parent is seeking a declaratory judgment that Parent was not required to operate the plant or produce ethanol at the Plant at the rates or amounts asserted by Aurora before July 31, 2012 and Parent need not operate the Plant or meet the production requirements to avoid the exercise of the contractual option.  On June 22, 2012, Aurora removed the action to the United States District Court for the Northern District of Texas.  Parent intends to pursue any and all rights available to it with respect to the foregoing.

 

On June 21, 2012, Aurora initiated a separate counter-action against Parent in the District Court of Hamilton County, Nebraska.  The petition alleges that Parent has repudiated its agreement with Aurora—the same agreement at issue in the litigation in Texas—and seeks specific performance under its terms.  Aurora’s position is that Parent did not “diligently pursue construction . . . to completion” because it did not operate the Plant to demonstrate that it was complete.  Aurora has asked for a judgment requiring Parent to sell the land on which the Plant is located.  On July 3, 2012, Parent removed the action to the United States District Court for the District of Nebraska.  Parent intends to defend all of its rights with respect to the agreement and its Plant.

 

4.                     On Monday, September 16, 2012, Aurora provided Parent with a courtesy copy of a letter of complaint initiating an arbitration before the National Grain and Feed Association (the “NGFA Arbitration”). The letter of complaint claims that Parent is liable to Aurora for approximately $1.8 million for losses allegedly sustained by Aurora in connection with certain quantities of corn that Aurora claims it purchased for Parent under the Aventine Grain Supply Agreement, which governs certain corn purchases for Parent’s Aurora West ethanol facility.  Parent disputes liability.

 

 

On the same date, Parent sent to Aurora a letter noting that Aurora is past due on certain payments required to be made under that same Grain Supply Agreement and under the Aventine Marketing Agreement, and therefore terminating both agreements.  On Thursday, September 19, 2012, Aurora provided Parent with a courtesy copy of a complaint filed by Aurora in federal court in Nebraska (the “Termination Litigation”), in which Aurora principally seeks a declaration that the Grain Supply Agreement and Marketing Agreement were not terminable on the grounds asserted by Parent, and that these agreements remain in effect.  Parent contends that these agreements were terminable and have been terminated, and intends to vigorously defend its rights in connection with both the NGFA Arbitration and the Termination Litigation.

 

 

Schedule 4.7(b)

 

Litigation

 

1.             On May 31, 2012, Parent served Aurora Cooperative Elevator Company (“Aurora”) with a petition for declaratory relief filed in the District Court of Dallas County, Texas, 160th Judicial District.  The petition alleges, among other things, that Aurora has improperly threatened — in direct contravention of the agreement between Parent and Aurora — to invoke a contractual option to repurchase the land on which Parent’s Aurora West ethanol plant (the “Plant”) is located.  Aurora’s stated position is that Aurora has the right to invoke the option if the Plant has not been producing ethanol for thirty days, at a daily rate equivalent to an annualized production rate of 90 million gallons, by July 31, 2012.

 

The petition alleges that the contract setting forth the option does not require thirty days of production in order to prevent Aurora’s exercise of the contractual option.  Rather Parent asserts the contract only requires that Parent “diligently pursue construction” of the Plant “to completion by July 1, 2012,” where “diligently pursue construction . . . to completion” does not mean “operation” or “production.” Parent is seeking a declaratory judgment that Parent was not required to operate the plant or produce ethanol at the Plant at the rates or amounts asserted by Aurora before July 31, 2012 and Parent need not operate the Plant or meet the production requirements to avoid the exercise of the contractual option.  On June 22, 2012, Aurora removed the action to the United States District Court for the Northern District of Texas.  Parent intends to pursue any and all rights available to it with respect to the foregoing.

 

On June 21, 2012, Aurora initiated a separate counter-action against Parent in the District Court of Hamilton County, Nebraska.  The petition alleges that Parent has repudiated its agreement with Aurora—the same agreement at issue in the litigation in Texas—and seeks specific performance under its terms.  Aurora’s position is that Parent did not “diligently pursue construction . . . to completion” because it did not operate the Plant to demonstrate that it was complete.  Aurora has asked for a judgment requiring Parent to sell the land on which the Plant is located.  On July 3, 2012, Parent removed the action to the United States District Court for the District of Nebraska.  Parent intends to defend all of its rights with respect to the agreement and its Plant.

 

2.             On Monday, September 16, 2012, Aurora provided Parent with a courtesy copy of a letter of complaint initiating an arbitration before the National Grain and Feed Association (the “NGFA Arbitration”). The letter of complaint claims that Parent is liable to Aurora for approximately $1.8 million for losses allegedly sustained by Aurora in connection with certain quantities of corn that Aurora claims it purchased for Parent under the Aventine Grain Supply Agreement, which governs certain corn purchases for Parent’s Aurora West ethanol facility.  Parent disputes liability.

 

On the same date, Parent sent to Aurora a letter noting that Aurora is past due on certain payments required to be made under that same Grain Supply Agreement and under the Aventine Marketing Agreement, and therefore terminating both agreements.  On Thursday, September 19, 2012, Aurora provided Parent with a courtesy copy of a complaint filed by Aurora in federal court in Nebraska (the “Termination Litigation”), in which Aurora principally seeks a declaration that the Grain Supply Agreement and Marketing Agreement were not terminable on the grounds asserted by Parent, and that these agreements remain in effect.  Parent contends that these agreements were terminable and have been terminated, and intends to vigorously defend its rights in connection with both the NGFA Arbitration and the Termination Litigation.

 

 

Schedule 4.11

 

Employee Benefit Plans

 

Aventine Renewable Energy, Inc. maintains Aventine Renewable Energy, Inc. Hourly Pension Plan, a defined benefit pension plan, for the benefit of certain eligible unionized employees employed at the Pekin, Illinois facility.

 

 

Schedule 4.12

 

Environmental Matters

 

	
 
    	
 
    	
Environmental
   Issue
    	
 
    	
State
   or
   Federal
    	
 
    	
Penalties
   Sought
    	
 
    	
Status
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Pekin
    	
 
    	
Contact   to Non Contact cooling 
    	
 
    	
State
    	
 
    	
No
    	
 
    	
NPDES   Application submitted for non-contact operation.  Conversion complete as of   November 2011.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Releases,   including RMP issues and an EPCRA allegation on timeliness of reporting   caustic release in 2008
    	
 
    	
Federal
    	
 
    	
Yes
    	
 
    	
The   Company identified releases at the facility from 1990-92, including a diesel   release resulting in a “no further response letter.”  A release during that time from an   anhydrous ammonia aboveground storage tank that was mistakenly placed into   Illinois EPA’s Leaking Underground Storage Tank Program (LUST) is now   closed.  In 2009, two releases occurred   from the dry mill.  The Company fully   resolved an anhydrous ammonia release, and has heard nothing further from   regulators.  With respect to a caustic   release, the Company received (after a bankruptcy and the passage of three   years time) federal inquiry concerning the timeliness of the initial   notification.  EPA seeks a penalty of   $192,000 as a result of a failure to provide follow-up notification related   to the release. (see next item)

 

Submitted   letter identifying violation occurring prior to bankruptcy, which could   impede payment of penalty.  Received   more details from USEPA on issue.    Discovered most questions focus on the Risk Management Plan  audit by USEPA in 2008.  Submitted a response back to USEPA on   7-1-11. Have provided additional information to USEPA periodically since that   time.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Air   emissions and SO2 Non-Attainment Designation 
    	
 
    	
State
    	
 
    	
No
    	
 
    	
The   Company budgets $6.5 million to improve emissions control equipment.  EPA-required testing in 2004 showed the   facility’s emissions to be in compliance with all but one state VOM-emissions   requirement of 8 lb/hr.  While the   Company has received no additional correspondence from EPA on the issue, it   remains possible that the State will require equipment to correct the   exceedence.

 

Illinois   EPA has submitted the SO2 non-attainment designation for the area that   Aventine resides in to USEPA for approval.    The approval process  continues.  IEPA will begin to reach out to potential   significant sources of SO2 in the non-attainment areas to work on reduction   strategy.
    

 

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
IEPA   must submit a workable plan for approval by the Illinois Pollution Control   Board.  Aventine is a major source for   SO2 and will likely be required to share in the overall reduction of  SO2 emissions to allow the area to regain   attainment status.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Nebraska   Energy
    	
 
    	
Air   inspection by NDEQ identified several outstanding issues including   uncontrolled tank vents that are required by last permit revision to be   controlled
    	
 
    	
State
    	
 
    	
No
    	
 
    	
The   Company responded to NDEQ on July 9.    Note that the Company reported all emissions during the period in   question and no level significantly exceeded the permit limits.     NDEQ now agrees no control is   necessary.  In process of modifying   permit to allow releases to atmosphere.    
    

 

 

Schedule 4.13

 

Intellectual Property

 

1(a).        Trademarks, Trademark Applications and Trademark Licenses

 

	
Record
   Owner
    	
 
    	
Title
    	
 
    	
Country
    	
 
    	
Filing Date/
   Issued Date
    	
 
    	
Expiration
   Date
    	
 
    	
Application/Registration No.
    
	
Parent
    	
 
    	
“Aventine   Renewable Energy and design”
    	
 
    	
USA
    	
 
    	
7/6/2007   / 10/5/2010
    	
 
    	
10/05/2020
    	
 
    	
3,857,196
    
	
AREI
    	
 
    	
“Aventine   Renewable Energy, Inc. and design”
    	
 
    	
USA
    	
 
    	
12/11/2003   / 5/24/2005
    	
 
    	
05/24/2015
    	
 
    	
2,954,378
    
	
AREI
    	
 
    	
“Aventine”
    	
 
    	
USA
    	
 
    	
5/13/2003   / 2/22/2005
    	
 
    	
02/22/2015
    	
 
    	
2,928,195
    
	
AREI
    	
 
    	
“Aventine   and design”
    	
 
    	
USA
    	
 
    	
12/11/2003   / 4/5/2005
    	
 
    	
04/05/2015
    	
 
    	
2,937,415
    
	
AREI
    	
 
    	
“Providing   clean, renewable energy for the world”
    	
 
    	
USA
    	
 
    	
9/12/2006   / 5/13/2008
    	
 
    	
05/13/2018
    	
 
    	
3,428,803
    
	
Parent
    	
 
    	
Riverland   Biofuels
    	
 
    	
USA
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Unregistered
    
	
Parent
    	
 
    	
Riverland   Biofuels logo
    	
 
    	
USA
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
Unregistered
    

 

1(b).        Trade Names

 

None.

 

2.             Patents, Patent Applications and Patent Licenses

 

	
Record
   Owner
    	
 
    	
Title
    	
 
    	
Country
    	
 
    	
Filing Date/
   Issued Date
    	
 
    	
Expiration
   Date
    	
 
    	
Application/Registration No.
    
	
AREI
    	
 
    	
“Heat   Recovery from a Biomass Heat Source”
    	
 
    	
USA
    	
 
    	
6/17/2005   / 7/28/2009
    	
 
    	
07/28/2019
    	
 
    	
7,566,383
    

 

3.             Copyrights, Copyright Applications and Copyright Licenses

 

None.

 

 

Schedule 4.14

 

Deposit Accounts and Securities Accounts

 

Deposit Accounts

 

	
Loan Party
    	
 
    	
Institution
    	
 
    	
Account Type.
    	
 
    	
Account #
    
	
AREI
    	
 
    	
Wells   Fargo Bank, N.A.

PO   Box 63020

San   Francisco, CA  94163
    	
 
    	
Depository
    	
 
    	
4123507238
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AREI
    	
 
    	
Wells   Fargo Bank, N.A.

PO   Box 63020

San   Francisco, CA  94163
    	
 
    	
Operating   Account
    	
 
    	
4123507220
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AREI
    	
 
    	
Wells   Fargo Bank, N.A.

PO   Box 63020

San   Francisco, CA  94163
    	
 
    	
ZBA   Checking
    	
 
    	
4123507246
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AREI
    	
 
    	
Wells   Fargo Bank, N.A.

PO   Box 63020

San   Francisco, CA  94163
    	
 
    	
ZBA   Checking
    	
 
    	
4123507253
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Nebraska   
    	
 
    	
Wells   Fargo Bank, N.A.

PO   Box 63020

San   Francisco, CA  94163
    	
 
    	
ZBA   Checking
    	
 
    	
4123507261
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AREI
    	
 
    	
Wells   Fargo Bank, N.A.

PO   Box 63020

San   Francisco, CA  94163
    	
 
    	
ZBA   Checking
    	
 
    	
4124321696
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Parent
    	
 
    	
Wells   Fargo Bank, N.A.

PO   Box 63020

San   Francisco, CA  94163
    	
 
    	
ZBA   Checking
    	
 
    	
4124321787
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARE-C
    	
 
    	
Wells   Fargo Bank, N.A.

PO   Box 63020

San   Francisco, CA  94163
    	
 
    	
ZBA   Checking
    	
 
    	
4124321803
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARE-AW
    	
 
    	
Wells   Fargo Bank, N.A.

PO   Box 63020

San   Francisco, CA  94163
    	
 
    	
ZBA   Checking
    	
 
    	
4124321829
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARE-MT
    	
 
    	
Wells   Fargo Bank, N.A.

PO   Box 63020

 San Francisco, CA  94163
    	
 
    	
ZBA   Checking
    	
 
    	
4124321837
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AREI
    	
 
    	
Wells   Fargo Bank, N.A.

PO   Box 63020

San   Francisco, CA  94163
    	
 
    	
Blocked   Collateral Account
    	
 
    	
4945660959
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AREI
    	
 
    	
Macquarie   Futures USA, LLC

125   West 55th Street

New   York, NY  10019
    	
 
    	
Commodities   Account
    	
 
    	
52315020
    

 

 

	
Loan Party
    	
 
    	
Institution
    	
 
    	
Account Type.
    	
 
    	
Account #
    
	
AREI
    	
 
    	
Macquarie   Futures USA, LLC

125   West 55th Street

New   York, NY  10019
    	
 
    	
Commodities   Account
    	
 
    	
52315021
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AREI
    	
 
    	
Jefferies Bache, LLC
   Global Derivatives Group
   One New York Plaza, 13th Floor
   New York, NY 10004
    	
 
    	
Commodities   Account
    	
 
    	
BTB-950791
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Parent
    	
 
    	
Citibank,   N.A.

1615   Bret Road

Building   No. 3

New   Castle, DE 19720
    	
 
    	
Collateral   Account
    	
 
    	
798580
    

 

Securities Accounts

 

	
Loan Party
    	
 
    	
Type of Account
    	
 
    	
Account Number
    	
 
    	
Name & Address of Depositary
   Institution
    
	
AREI
    	
 
    	
Commodities   Account
    	
 
    	
Group   Account No.:
   BTB-950791

 

Subaccount   Nos.:
   BTB-950791
   BTB-952751
    	
 
    	
Jefferies   Bache, LLC
   One New York Plaza, 13th Floor
   New York, NY 10004
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AREI
    	
 
    	
Commodities   Account
    	
 
    	
52315020
    	
 
    	
Macquarie   Futures USA, LLC

125   West 55th Street

New   York, NY  10019
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AREI
    	
 
    	
Commodities   Account
    	
 
    	
52315021
    	
 
    	
Macquarie   Futures USA, LLC

125   West 55th Street

New   York, NY  10019
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Parent
    	
 
    	
Collateral   Account
    	
 
    	
798580
    	
 
    	
Citibank,   N.A.

1615   Bret Road

Building   No. 3

New   Castle, DE 19720
    

 

 

Schedule 4.17

 

Indebtedness

 

1.     Amended and Restated Senior Secured Term Loan Credit Agreement, dated September 24, 2012, among Aventine Renewable Energy Holdings, Inc., as Borrower, the Lenders from time to time party thereto, and Citibank, N.A. as Collateral Agent and Administrative Agent, representing aggregate obligations in the amount of approximately $130,000,000.

 

2.     Equipment Lease Contract, dated June 30, 2006, as amended, by and between New CIE Energy Opco, LLC and Wabash Power Equipment Co., (New CIE Opco, LLC’s rights, title and interest assigned to Aventine Renewable Energy Holdings, Inc. on July 16, 2010), representing aggregate obligations in the amount of approximately $120,840.46.

 

3.     Agreement, dated October 27, 2009, as amended, by and between New CIE Energy Opco, LLC DBA Riverland Biofuels and U.S. Water Services (New CIE Opco, LLC’s rights, title and interest assigned to Aventine Renewable Energy Holdings, Inc. on July 16, 2010), representing aggregate obligations in the amount of approximately $229,575.

 

4.     The Spoon River Mortgage (as defined in Schedule P-2) securing indebtedness in the amount of approximately $211,000.

 

 

Schedule 4.27

 

Locations of Inventory

 

	
Address of Location Where Equipment, Inventory or
   Other Tangible Personal Property is Maintained or Kept
   (excluding inventory held by common carriers in the
   ordinary course)
   (Property owner name, if different)
    	
 
    	
Description of Assets at Such Location
    
	
Kinder   Morgan Liquid Terminals, L.L.C.
   8500 West 68th Street
   Argo, IL 60501
    	
 
    	
Inventory
    
	
Parke   Warehouse
   1800 E Garfield Avenue
   Decatur, IL 62525
   (Parke and Son, Inc.)
    	
 
    	
Inventory
    
	
Bell   Enterprises, Inc.
   30082 Harding Road
   Deer Creek, IL 61733
    	
 
    	
Inventory
    
	
J &   L Dock facilities
   Foot of Sanger St.
   Peoria, IL  61602
    	
 
    	
Inventory
    
	
Peoria   Barge Terminal
   Foot of Sanger St.
   Peoria, IL  61602
   (Finch Family Land Trust)
    	
 
    	
Inventory
    
	
Buckeye   Terminals, L.L.C.
   14410 N. Old Galena Road
   Chillicothe, IL 61523
    	
 
    	
Inventory
    
	
Buckeye   Terminals, L.L.C.
   18264 N. US Highway 45
   Effingham, IL 62401
    	
 
    	
Inventory
    
	
AREI
   1300 S. Second Street
   Pekin, IL 61554
    	
 
    	
Manufacturing   Equipment, Inventory
    
	
Nebraska
   1205 S. “O” Road
   Aurora, NE 68818
    	
 
    	
Manufacturing   Equipment, Inventory
    
	
ARE-AW
   2103 Harvest Drive
   Aurora, Nebraska 68818
    	
 
    	
Manufacturing   Equipment, Inventory
    
	
ARE-C
   23133 E County Hwy 6
   Canton, IL 61520
    	
 
    	
Manufacturing   Equipment, Inventory
    
	
ARE-MT
   Port Road
   Mt. Vernon, IN 47620
    	
 
    	
Manufacturing   Equipment, Inventory
    

 

 

Schedule 5.1

 

Financial Statements, Reports, Certificates

 

Deliver to Agent, with copies to each Lender, each of the financial statements, reports, or other items set forth below at the following times in form satisfactory to Agent:

 

	
as   soon as available, but in any event within 30 days after the end of each   month during each of Parent’s fiscal years,

 
    	
 
    	
(a)   an unaudited consolidated and consolidating balance sheet,   income statement, and statement of cash flow covering Parent’s and its   Subsidiaries’ operations during such period,

 

(b)   commencing with the month ended October 31, 2012, Plant-Level   Financial Statements; and

 

(c)   a Compliance Certificate, together with both (i) either (A)   copies of all Form 8-Ks that have been filed during such period or (B) written   notice in such Compliance Certificate listing the Form 8-Ks that have been   filed during such period, and (ii) either (A) any other filings made by   Parent or any of its Subsidiaries with the SEC during such period or (B)   written notice in such Compliance Certificate listing such other filings that   have been made during such period.
    
	
 
    	
 
    	
 
    
	
as   soon as available, but in any event within 45 days after the end of each   quarter (each such date, the “Quarterly Deadline”) during each of   Parent’s fiscal years,

 
    	
 
    	
(d)   an unaudited consolidated and consolidating balance sheet,   income statement, and statement of cash flow covering Parent’s and its   Subsidiaries’ operations during such period,

 

(e)   provided,   that if Parent has filed any of the items listed in clause (c) above in its   Form 10-Q quarterly report with the SEC by the applicable Quarterly Deadline,   then Parent shall (i) provide Agent written notice (in the Compliance   Certificate or elsewhere) by the applicable Quarterly Deadline that Parent   has filed its Form 10-Q with the SEC and (ii) deliver to Agent by the   applicable Quarterly Deadline copies of any items listed in clause (c) above   that were not filed with the SEC,

 

(f)    provided,   further, however, that if Parent has been granted an extension   by the SEC for the filing of a Form 10-Q quarterly report, Parent shall   deliver to Agent (i) by the applicable Quarterly Deadline, all of the items   listed in clause (c) above, (ii) within 2 Business Days of receiving such   extension, a copy of such extension and the document that sets forth the   extension date on which Parent is required to file the Form 10-Q, and (iii)   on the date that the Form 10-Q quarterly report is filed with the SEC,   written notice describing the Form 10-Q that was filed with the SEC, and

 

(g)   a Compliance Certificate.
    
	
 
    	
 
    	
 
    
	
as   soon as available, but in any event within 120 days after the end of each of   Parent’s fiscal years (each such date, the “Annual Deadline”),
    	
 
    	
(h)   consolidated and consolidating financial statements of Parent   and its Subsidiaries for each such fiscal year, audited by independent   certified public accountants reasonably acceptable to Agent and certified,   without any qualifications (including any (i) “going concern” or like   qualification or exception, (ii) qualification or exception as to the   scope of such audit, or (iii) qualification which relates to the treatment or   classification of any item and which, as a condition to the removal of such   qualification, would require an adjustment to such item, the effect of which   would be to cause any noncompliance with the provisions of Section 7),   by such accountants to have been prepared in accordance with GAAP (such   audited financial statements to include a balance sheet, income statement,   and statement of cash flow and, if prepared, such accountants’ letter to   management),

 

(i)    provided, that if Parent has filed any of the items   listed in clause (e) above in
    

 

 

	
 
    	
 
    	
its Form 10-K annual report with the SEC by the applicable Annual   Deadline, then Parent shall (i) provide Agent written notice (in the   Compliance Certificate or elsewhere) by the applicable Annual Deadline that   Parent has filed its Form 10-K with the SEC  and (ii) deliver to Agent by the applicable   Annual Deadline copies of any items listed in clause (e) above that were not   filed with the SEC,

 

(j)    provided,   further, that if Parent has been granted an extension by the SEC for   the filing of a Form 10-K annual report, Parent shall deliver to Agent (i) by   the applicable Annual Deadline, unaudited consolidated and consolidating   financial statements of Parent and its Subsidiaries for such fiscal year   (such unaudited financial statements to include a balance sheet, income   statement, and statement of cash flow), (ii) by the earlier of (A) the date   that is 120 days after the end of such fiscal year, and (B) the date that the   Form 10-K annual report is filed with the SEC, notice of all of the items   listed in clause (e) above that are filed with the SEC (if any) and copies of   all of the items listed in clause (e) above that were not filed with the SEC,   (iii) within 2 Business Days of receiving such extension, a copy of such   extension and the document that sets forth the extension date on which Parent   is required to file the Form 10-K, and (iv) on the date that the   Form 10-K annual report is filed with the SEC, a copy of the   Form 10-K that was filed with the SEC, and

 

(k)   a Compliance Certificate.
    
	
 
    	
 
    	
 
    
	
as   soon as available, but in any event within 30 days prior to the start of each   of Parent’s fiscal years,
    	
 
    	
(l)    copies of Parent’s and its Subsidiaries’ Projections, in form   and substance (including as to scope and underlying assumptions) satisfactory   to Agent, in its Permitted Discretion, for the forthcoming 3 years, year by   year, and for the forthcoming fiscal year, month by month, certified by the   chief financial officer of Parent as being such officer’s good faith estimate   of the financial performance of Parent and its Subsidiaries during the period   covered thereby.
    
	
 
    	
 
    	
 
    
	
if   and when distributed by Parent or any of its Subsidiaries,
    	
 
    	
(m)  any other information that is provided by Parent or any of its   Subsidiaries to its shareholders generally (including the New Equity   Holders).
    

 

 

	
promptly,   but in any event within 5 days after any Borrower has knowledge of any event   or condition that constitutes a Default or an Event of Default,
    	
 
    	
(n)   notice of such event or condition and a statement of the   curative action that Borrowers propose to take with respect thereto.
    
	
 
    	
 
    	
 
    
	
promptly   after the commencement thereof, but in any event within 5 days after the   service of process with respect thereto on Parent or any of its Subsidiaries,
    	
 
    	
(o)   notice of all actions, suits, or proceedings brought by or   against Parent or any of its Subsidiaries before any Governmental Authority   which could reasonably be expected to result in a Material Adverse Effect.
    
	
 
    	
 
    	
 
    
	
upon   the request of Agent,
    	
 
    	
(p)   any other information reasonably requested relating to the   financial condition of Parent or its Subsidiaries.
    

 

 

Schedule 5.2

 

Collateral Reporting

 

Provide Agent (and if so requested by Agent, with copies for each Lender) with each of the documents set forth below at the following times in form satisfactory to Agent:

 

	
Weekly
    	
 
    	
(a)   a detailed aging and roll-forward, by total, of Parent’s and its   Subsidiaries’ Accounts with supporting details supplied from sales journals,   collection journals, credit registers and any other records,

 

(b)   a   detailed calculation of those Accounts that are not eligible for the   Borrowing Base, if Borrowers have not implemented electronic reporting,

 

(c)   a   detailed calculation of Inventory categories that are not eligible for the   Borrowing Base, if Borrowers have not implemented electronic reporting,

 

(d)   Inventory   system/perpetual reports specifying the cost and the market value of Parent’s   and its Subsidiaries’ Inventory on a first in, first out basis, by category,   with additional detail showing additions to and deletions therefrom   (delivered electronically in an acceptable format, if Borrowers have   implemented electronic reporting),

 

(e)   a   detailed report regarding Parent’s and its Subsidiaries’ cash and Cash   Equivalents, including an indication of which amounts constitute Qualified   Cash,

 

(f)    a   detailed calculation of deferred revenue related to shipments of Inventory on   railcars,

 

(g)   a list   of amounts owing to corn suppliers, and

 

(h)   a   Borrowing Base Certificate.
    
	
 
    	
 
    	
 
    
	
Monthly   (no later than the 10th Business Day of each month)
    	
 
    	
(i)    a   detailed aging, by total, of Borrowers’ Accounts (delivered electronically in   an acceptable format, if Borrowers have implemented electronic reporting),

 

(j)    a   detailed Inventory system/perpetual report (delivered electronically in an   acceptable format, if Borrowers have implemented electronic reporting),

 

(k)   a   summary aging, by vendor, of Parent’s and its Subsidiaries’ accounts payable and   any book overdraft  (delivered   electronically in an acceptable format, if Borrowers have implemented   electronic reporting) and an aging, by vendor, of any held checks,

 

(l)    a   monthly Account roll-forward, in a format acceptable to Agent in its discretion,   tied to the beginning and ending account receivable balances of Borrowers’   general ledger, and

 

(m)  a   Borrowing Base Certificate.
    

 

 

	
Monthly   (no later than the 30th day of each month)
    	
 
    	
(n)   a   reconciliation of Accounts, trade accounts payable, and Inventory of   Borrowers’ general ledger accounts to its monthly financial statements   including any book reserves related to each category,

 

(o)   a   reconciliation and supporting documentation for any reconciling items noted   (delivered electronically in an acceptable format, if Borrowers have   implemented electronic reporting),

 

(p)   a   reconciliation to Borrowers’ general ledger accounts (delivered   electronically in an acceptable format, if Borrowers have implemented   electronic reporting), and

 

(q)   a detailed general ledger that supports   Borrowers’ balance sheets at month end.
    
	
 
    	
 
    	
 
    
	
Annually
    	
 
    	
(r)    a   detailed list of Parent’s and its Subsidiaries’ customers, with address and   contact information.
    
	
 
    	
 
    	
 
    
	
Upon   request by Agent 
    	
 
    	
(s)   such   other reports as to the Collateral or the financial condition of Parent and   its Subsidiaries, as Agent may reasonably request, and

 

(t)    a   report regarding Parent’s and its Subsidiaries’ accrued, but unpaid, ad valorem taxes.
    

 

 

Schedule 6.6

 

Nature of Business

 

Borrowers are engaged in the production and marketing of corn-based, fuel-grade ethanol in the United States.  Borrowers market and distribute ethanol to many of the leading energy and trading companies in the United States.  In addition to producing ethanol, Borrowers’ facilities also produce several by-products, such as distillers grain, corn gluten meal and feed, corn germ and grain distillers dried yeast, which generate revenue and offset a portion of the costs of raw materials.

 

 

Schedule 6.14

 

Inventory with Bailees

 

	
Bailee Name
   (excluding inventory held by common carriers in the
   ordinary course)
   (Property owner name, if different)
    	
 
    	
Description of Assets at Such Location
    
	
Kinder   Morgan Liquid Terminals, L.L.C.
   8500 West 68th Street
   Argo, IL 60501
    	
 
    	
Inventory
    
	
Parke   Warehouse
   1800 E Garfield Avenue
   Decatur, IL 62525
   (Parke and Son, Inc.)
    	
 
    	
Inventory
    
	
Bell   Enterprises
   30082 Harding Road
   Deer Creek, IL 61733
    	
 
    	
Inventory
    
	
J   & L Dock facilities
   Foot of Sanger St.
   Peoria, IL  61602
    	
 
    	
Inventory
    
	
Peoria   Barge Terminal
   Foot of Sanger St.
   Peoria, IL  61602
   (Finch Family Land Trust)
    	
 
    	
Inventory

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