exv10w1






 Exhibit 10.1



 














CREDIT AGREEMENT




dated as of




March 22, 2010




among




KAISER ALUMINUM CORPORATION,

KAISER ALUMINUM INVESTMENTS COMPANY,

KAISER ALUMINUM FABRICATED PRODUCTS, LLC and

KAISER ALUMINIUM INTERNATIONAL, INC.,

as Borrowers




The Lenders Party Hereto




and




JPMORGAN CHASE BANK, N.A.,

as Administrative Agent




 






J.P. MORGAN SECURITIES INC. and

WELLS FARGO CAPITAL FINANCE, LLC,

as Joint Bookrunners and Joint Lead Arrangers




WELLS FARGO CAPITAL FINANCE, LLC,

as Documentation Agent




and




BANK OF AMERICA, N.A.,

as Syndication Agent




 





CHASE BUSINESS CREDIT









 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	
ARTICLE I

DEFINITIONS
	 
	 	 	 	 
	SECTION 1.01. Defined Terms
	 	 	1	 
	SECTION 1.02. Classification of Loans and Borrowings
	 	 	30	 
	SECTION 1.03. Terms Generally
	 	 	30	 
	SECTION 1.04. Accounting Terms; GAAP
	 	 	31	 
	SECTION 1.05. Allocation of Loans and Applicable Percentages at the Effective Date
	 	 	31	 
	
ARTICLE II

THE CREDITS
	 
	 	 	 	 
	SECTION 2.01. Revolving Commitments
	 	 	32	 
	SECTION 2.02. Loans and Borrowings
	 	 	32	 
	SECTION 2.03. Requests for Revolving Borrowings
	 	 	32	 
	SECTION 2.04. Protective Advances
	 	 	33	 
	SECTION 2.05. Swingline Loans
	 	 	34	 
	SECTION 2.06. Letters of Credit
	 	 	35	 
	SECTION 2.07. Funding of Borrowings
	 	 	38	 
	SECTION 2.08. Interest Elections
	 	 	39	 
	SECTION 2.09. Termination of Revolving Commitments; Increase in Revolving Commitments
	 	 	40	 
	SECTION 2.10. Repayment and Amortization of Loans; Evidence of Debt
	 	 	41	 
	SECTION 2.11. Prepayment of Loans
	 	 	42	 
	SECTION 2.12. Fees
	 	 	42	 
	SECTION 2.13. Interest
	 	 	43	 
	SECTION 2.14. Alternate Rate of Interest
	 	 	44	 
	SECTION 2.15. Increased Costs
	 	 	44	 
	SECTION 2.16. Break Funding Payments
	 	 	45	 
	SECTION 2.17. Taxes
	 	 	46	 
	SECTION 2.18. Payments Generally; Allocation of Proceeds; Sharing of Set-offs
	 	 	48	 
	SECTION 2.19. Mitigation Obligations; Replacement of Lenders
	 	 	50	 
	SECTION 2.20. Defaulting Lenders
	 	 	50	 
	SECTION 2.21. Returned Payments
	 	 	52	 
	 
	 	 	 	 
	
ARTICLE III 

REPRESENTATIONS AND WARRANTIES
	 
	 	 	 	 
	SECTION 3.01. Organization; Powers
	 	 	52	 






i









 






	 	 	 	 	 
	 	 	Page	 
	SECTION 3.02. Authorization; Enforceability
	 	 	52	 
	SECTION 3.03. Governmental Approvals; No Conflicts
	 	 	52	 
	SECTION 3.04. Financial Condition; No Material Adverse Change
	 	 	52	 
	SECTION 3.05. Properties
	 	 	53	 
	SECTION 3.06. Litigation and Environmental Matters
	 	 	53	 
	SECTION 3.07. Compliance with Laws and Agreements
	 	 	53	 
	SECTION 3.08. Investment Company Status
	 	 	53	 
	SECTION 3.09. Taxes
	 	 	53	 
	SECTION 3.10. ERISA
	 	 	54	 
	SECTION 3.11. Disclosure
	 	 	54	 
	SECTION 3.12. Material Agreements
	 	 	54	 
	SECTION 3.13. Solvency
	 	 	54	 
	SECTION 3.14. Insurance
	 	 	55	 
	SECTION 3.15. Capitalization and Subsidiaries
	 	 	55	 
	SECTION 3.16. Security Interest in Collateral
	 	 	55	 
	SECTION 3.17. Employment Matters
	 	 	55	 
	SECTION 3.18. Common Enterprise
	 	 	55	 
	 
	 	 	 	 
	
ARTICLE IV

CONDITIONS
	 
	 	 	 	 
	SECTION 4.01. Effective Date
	 	 	56	 
	SECTION 4.02. Each Credit Event
	 	 	58	 
	 
	 	 	 	 
	
ARTICLE V 

AFFIRMATIVE COVENANTS
	 
	 	 	 	 
	SECTION 5.01. Financial Statements; Borrowing Base and Other Information
	 	 	59	 
	SECTION 5.02. Notices of Material Events
	 	 	61	 
	SECTION 5.03. Existence; Conduct of Business
	 	 	62	 
	SECTION 5.04. Payment of Obligations
	 	 	62	 
	SECTION 5.05. Maintenance of Properties
	 	 	63	 
	SECTION 5.06. Books and Records; Inspection Rights
	 	 	63	 
	SECTION 5.07. Compliance with Laws
	 	 	63	 
	SECTION 5.08. Use of Proceeds
	 	 	63	 
	SECTION 5.09. Insurance
	 	 	63	 
	SECTION 5.10. Environmental Covenant
	 	 	64	 
	SECTION 5.11. Appraisals
	 	 	64	 
	SECTION 5.12. Field Examinations
	 	 	64	 






ii









 






	 	 	 	 	 
	 	 	Page	 
	SECTION 5.13. Depository Banks
	 	 	65	 
	SECTION 5.14. Additional Collateral; Further Assurances
	 	 	65	 
	SECTION 5.15. Collateral Access Agreements and Appraisals
	 	 	65	 
	
ARTICLE VI

NEGATIVE COVENANTS
	SECTION 6.01. Indebtedness
	 	 	65	 
	SECTION 6.02. Liens
	 	 	67	 
	SECTION 6.03. Fundamental Changes
	 	 	68	 
	SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions
	 	 	68	 
	SECTION 6.05. Asset Sales
	 	 	69	 
	SECTION 6.06. Sale and Leaseback Transactions
	 	 	70	 
	SECTION 6.07. Swap Agreements
	 	 	70	 
	SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness
	 	 	70	 
	SECTION 6.09. Transactions with Affiliates
	 	 	71	 
	SECTION 6.10. Restrictive Agreements
	 	 	72	 
	SECTION 6.11. Amendment of Material Documents
	 	 	72	 
	SECTION 6.12. Fixed Charge Coverage Ratio
	 	 	72	 
	 
	 	 	 	 
	
ARTICLE VII

EVENTS OF DEFAULT
	 
	 	 	 	 
	
ARTICLE VIII

THE ADMINISTRATIVE AGENT; OTHER AGENTS
	 
	 	 	 	 
	SECTION 8.01. The Administrative Agent
	 	 	75	 
	SECTION 8.02. Other Agents
	 	 	77	 
	 
	 	 	 	 
	
ARTICLE IX

MISCELLANEOUS
	 
	 	 	 	 
	SECTION 9.01. Notices
	 	 	77	 
	SECTION 9.02. Waivers; Amendments
	 	 	78	 
	SECTION 9.03. Expenses; Indemnity; Damage Waiver
	 	 	80	 
	SECTION 9.04. Successors and Assigns
	 	 	82	 
	SECTION 9.05. Survival
	 	 	84	 
	SECTION 9.06. Counterparts; Integration; Effectiveness
	 	 	85	 
	SECTION 9.07. Severability
	 	 	85	 
	SECTION 9.08. Right of Setoff
	 	 	85	 
	SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process
	 	 	85	 
	SECTION 9.10. WAIVER OF JURY TRIAL
	 	 	86	 
	SECTION 9.11. Headings
	 	 	86	 






iii









 






	 	 	 	 	 
	 	 	Page	 
	SECTION 9.12. Confidentiality
	 	 	86	 
	SECTION 9.13. Several Obligations; Nonreliance; Violation of Law
	 	 	87	 
	SECTION 9.14. USA PATRIOT Act
	 	 	87	 
	SECTION 9.15. Disclosure
	 	 	87	 
	SECTION 9.16. Appointment for Perfection
	 	 	87	 
	SECTION 9.17. Interest Rate Limitation
	 	 	87	 
	
ARTICLE X

LOAN GUARANTY
	SECTION 10.01. Guaranty
	 	 	88	 
	SECTION 10.02. Guaranty of Payment
	 	 	88	 
	SECTION 10.03. No Discharge or Diminishment of Loan Guaranty
	 	 	88	 
	SECTION 10.04. Defenses Waived
	 	 	89	 
	SECTION 10.05. Rights of Subrogation
	 	 	89	 
	SECTION 10.06. Reinstatement; Stay of Acceleration
	 	 	89	 
	SECTION 10.07. Information
	 	 	90	 
	SECTION 10.08. Termination
	 	 	90	 
	SECTION 10.09. Taxes
	 	 	90	 
	SECTION 10.10. Maximum Liability
	 	 	90	 
	SECTION 10.11. Contribution
	 	 	90	 
	SECTION 10.12. Liability Cumulative
	 	 	91	 
	
ARTICLE XI

THE BORROWER REPRESENTATIVE
	SECTION 11.01. Appointment; Nature of Relationship
	 	 	91	 
	SECTION 11.02. Powers
	 	 	91	 
	SECTION 11.03. Employment of Agents
	 	 	92	 
	SECTION 11.04. Notices
	 	 	92	 
	SECTION 11.05. Successor Borrower Representative
	 	 	92	 
	SECTION 11.06. Execution of Loan Documents; Borrowing Base Certificate
	 	 	92	 
	SECTION 11.07. Reporting
	 	 	92	 






iv









 






SCHEDULES:




Revolving Commitment Schedule

Schedule 1.01(a) – Designated Asset Sales

Schedule 1.01(b) – Designated Account Debtors

Schedule 1.01(c) – Significant Subsidiaries

Schedule 1.01(d) – Reliance Account Debtors

Schedule 1.01(e) – Existing Loans

Schedule 2.06(k) – Existing Letters of Credit

Schedule 3.05 (a) – Real Property

Schedule 3.05(b) – Intellectual Property

Schedule 3.06 – Disclosed Matters

Schedule 3.12 – Material Agreements

Schedule 3.14 – Insurance

Schedule 3.15 – Capitalization and Subsidiaries

Schedule 6.01(b) – Existing Indebtedness

Schedule 6.01(e) – Existing Purchase Money Debt and Capital Lease Obligations

Schedule 6.02 – Existing Liens

Schedule 6.04 – Existing Investments

Schedule 6.10 – Existing Restrictions




EXHIBITS:




Exhibit A – Form of Assignment and Assumption

Exhibit B – Form of Opinion of Borrower’s Counsel

Exhibit C – Form of Borrowing Base Certificate

Exhibit D – Form of Compliance Certificate

Exhibit E – Form of Joinder Agreement

Exhibit F – Form of Exemption Certificate





v











 





          CREDIT AGREEMENT, dated as of March 22, 2010 (as it may be amended or modified from time
to time, this “Agreement”), among KAISER ALUMINUM CORPORATION, a Delaware corporation,
KAISER ALUMINUM INVESTMENTS COMPANY, a Delaware corporation, KAISER ALUMINUM FABRICATED PRODUCTS,
LLC, a Delaware limited liability company, and KAISER ALUMINIUM INTERNATIONAL, INC., a Delaware
corporation, as Borrowers, the Lenders party hereto, JPMORGAN CHASE BANK, N.A., as Administrative
Agent, J.P. MORGAN SECURITIES INC. and WELLS FARGO CAPITAL FINANCE, LLC, as Joint Bookrunners and
Joint Lead Arrangers, WELLS FARGO CAPITAL FINANCE, LLC, as Documentation Agent, and BANK OF
AMERICA, N.A., as Syndication Agent.




          The parties hereto agree as follows:




ARTICLE I




Definitions



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




          “ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to
the Alternate Base Rate.




          “Account” has the meaning assigned to such term in the Security Agreement.




          “Account Debtor” means any Person obligated on an Account.




          “Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period or for any ABR Borrowing, an interest rate per annum (rounded upwards, if necessary, to the
next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the
Statutory Reserve Rate.




          “Administrative Agent” means JPMorgan Chase, in its capacity as administrative agent
for the Lenders hereunder, and its successors and assigns in such capacity.




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




          “Affiliate” means, with respect to a specified 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.




          “Agents” means, individually or collectively as the context may require, the
Administrative Agent, the Joint Bookrunners, the Joint Lead Arrangers, the Documentation Agent and
the Syndication Agent.




          “Aggregate Credit Exposure” means, at any time, the aggregate Credit Exposure of all
the Lenders.




          “Agreement” has the meaning assigned to such term in the preamble.







 









 








          “Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1% and (c) the Adjusted LIBO Rate for a one month Interest Period on such day (or if
such day is not a Business Day, the immediately preceding Business Day) plus 1%; provided
that, for purposes of this definition, the Adjusted LIBO Rate for any day shall be based on the
rate appearing on the Reuters Screen LIBOR01 Page (or on any successor or substitute page) at
approximately 11:00 a.m., London time, on such day (without any rounding). Any change in the
Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the
Adjusted LIBO Rate shall be effective from and including the effective date of such change in the
Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.




          “Applicable Percentage” means, with respect to any Lender, (a) with respect to
Revolving Loans, LC Exposure or Swingline Loans, a percentage equal to a fraction the numerator of
which is such Lender’s Revolving Commitment and the denominator of which is the aggregate Revolving
Commitment of all the Revolving Lenders (if the Revolving Commitments have terminated or expired,
the Applicable Percentages shall be determined based upon such Revolving Lender’s share of the
aggregate Revolving Exposures at that time); provided that in the case of Section
2.20 when a Defaulting Lender shall exist, any such Defaulting Lender’s Revolving Commitment
shall be disregarded in the calculation; and (b) with respect to Protective Advances or with
respect to the Aggregate Credit Exposure, a percentage based upon its share of the Aggregate Credit
Exposure and the unused Revolving Commitments; provided that in the case of Section
2.20 when a Defaulting Lender shall exist, any such Defaulting Lender’s Revolving Commitment
shall be disregarded in the calculation.




          “Applicable Rate” means, for any day, with respect to any ABR Loan or Eurodollar Loan,
as the case may be, the applicable rate per annum set forth below under the caption “Revolver ABR
Spread” or “Revolver Eurodollar Spread”, as the case may be, based upon Quarterly Available Credit
as of the most recent determination date; provided that until the delivery to the
Administrative Agent, pursuant to Section 5.01(g), of all the Borrowing Base Certificates
for the first full Fiscal Quarter after the Effective Date, the “Applicable Rate” shall be the
applicable rate per annum set forth below in Category 1:




	 	 	 	 	 	 	 	 	 
	Quarterly	 	Revolver	 	Revolver
	Available	 	ABR	 	Eurodollar
	Credit	 	Spread	 	Spread
	  Category 1

> $125,000,000

	 	 	2.00	%	 	 	3.00	%
	 
	 	 	 	 	 	 	 	 
	  Category 2

< $125,000,000 but

> $75,000,000

	 	 	2.25	%	 	 	3.25	%
	 
	 	 	 	 	 	 	 	 
	  Category 3

< $75,000,000

	 	 	2.50	%	 	 	3.50	%






          For purposes of the foregoing, (a) the Applicable Rate shall be determined by the
Administrative Agent as of the end of each Fiscal Quarter based upon the Borrowing Base
Certificates that are delivered from time to time pursuant to Section 5.01(g), and (b) each
change in the Applicable Rate resulting from a change in Quarterly Available Credit shall be
effective as of the first day of each







2









 







succeeding Fiscal Quarter following the Fiscal Quarter with
respect to which the Quarterly Available Credit is calculated and ending on the date immediately preceding the effective date of the
next such change; provided that Quarterly Available Credit shall be deemed to be in
Category 3 (i) at any time that an Event of Default has occurred and is continuing or (ii) if the
Borrower Representative fails to deliver any Borrowing Base Certificate that is required to be
delivered by it pursuant to Section 5.01(g), during the period from the expiration of the
time for delivery thereof until such Borrowing Base Certificate is delivered. The Administrative
Agent shall provide the Borrower Representative with a statement of each calculation of Quarterly
Available Credit promptly following the end of each Fiscal Quarter.




          “Approved Fund” has the meaning assigned to such term in Section 9.04(b).




          “Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required by Section
9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other
form approved by the Administrative Agent.




          “Availability” means, at any time, an amount equal to (a) the lesser of (i) the
Revolving Commitment and (ii) the Borrowing Base, minus (b) the Aggregate Credit Exposure,
minus (c) without duplication of any Reserves imposed pursuant to the calculation of
Borrowing Base, Reserves. The Administrative Agent may, in its Permitted Discretion, adjust
Reserves, with any such changes to be effective three Business Days after delivery of notice
thereof to the Company.




          “Availability Period” means the period from and including the Effective Date to but
excluding the earlier of the Maturity Date and the date of termination of the Revolving Commitment.




          “Available Revolving Commitment” means, at any time, the Revolving Commitment then in
effect minus the Aggregate Credit Exposure.




          “Banking Services” means each and any of the following bank services provided to any
Borrower by any Lender or any of its Affiliates: (a) credit cards for commercial customers
(including, without limitation, “commercial credit cards” and purchasing cards), (b) stored value
cards and (c) treasury management services (including, without limitation, controlled disbursement,
automated clearinghouse transactions, return items, overdrafts and interstate depository network
services).




          “Banking Services Obligations” of the Borrowers means any and all obligations of the
Borrowers, whether absolute or contingent and howsoever and whensoever created, arising, evidenced
or acquired (including all renewals, extensions and modifications thereof and substitutions
therefor) in connection with Banking Services.




          “Banking Services Reserves” means all Reserves which the Administrative Agent from
time to time establishes in its Permitted Discretion for Banking Services then provided or
outstanding.




          “Board” means the Board of Governors of the Federal Reserve System of the United
States.




          “Borrower” or “Borrowers” means, individually or collectively as the context
may require, the Company, KAIC, KAFP, KAII and each other Significant Subsidiary that is required
to become a Borrower hereunder pursuant to Section 5.14(a).






3









 








          “Borrower Representative” means the Company, in its capacity as contractual
representative of the Borrowers pursuant to Article XI.




          “Borrowing” means each (a) Revolving Borrowing, (b) Swingline Loan or (c) Protective
Advance.




          “Borrowing Base” means, at any time, the sum of (a) 85% of the Borrowers’ Eligible
Accounts at such time; plus (b) the lesser of (i) 65% of the Borrowers’ Eligible Inventory,
valued at the lower of cost or market value, determined on a first-in-first-out basis, at such
time, and (ii) the product of 85% multiplied by the Net Orderly Liquidation Value
percentage identified in the most recent inventory appraisal ordered by the Administrative Agent
multiplied by the Borrowers’ Eligible Inventory, valued at the lower of cost or market
value, determined on a first-in-first-out basis, at such time; minus (c) without
duplication of any Reserves imposed pursuant to the calculation of Availability, Reserves. The
Administrative Agent may, in its Permitted Discretion, reduce the advance rates set forth above,
adjust Reserves or reduce one or more of the other elements used in computing the Borrowing Base,
with any such changes to be effective three Business Days after delivery of notice thereof to the
Company.




          “Borrowing Base Certificate” means a certificate, signed and certified as accurate and
complete by a Financial Officer of the Borrower Representative, in substantially the form of
Exhibit C or another form which is acceptable to the Administrative Agent in its sole
discretion.




          “Borrowing Request” means a request by the Borrower Representative for a Borrowing of
Revolving Loans in accordance with Section 2.02.




          “Business Day” means any day that is not a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to remain closed;
provided that, when used in connection with a Eurodollar Loan, the term “Business Day”
shall also exclude any day on which banks are not open for dealings in dollar deposits in the
London interbank market.




          “Capital Expenditures” means, without duplication, any actual cash expenditure for any
purchase or other acquisition of any asset which would be classified as a fixed or capital asset on
a consolidated balance sheet of the Company and its Subsidiaries prepared in accordance with GAAP.




          “Capital Lease Obligations” of any Person means the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in accordance with GAAP.




          “Change in Control” means (a) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the
date hereof) (other than the VEBA Trusts), of Equity Interests representing more than 45% of the
aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the
Company; (b) occupation of a majority of the seats (other than vacant seats) on the board of
directors of the Company by Persons who were neither (i) nominated by the board of directors of the
Company nor (ii) appointed by directors so nominated; (c) the acquisition of direct or indirect
Control of any of the Borrowers by any Person or group (within the meaning of the Securities
Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the Effective Date) other
than the Company; or (d) the occurrence of a “fundamental change”






4









 







under the Convertible Note Agreement permitting the holders of Convertible Notes to put Convertible Notes to the Company.




          “Change in Law” means (a) the adoption of any law, rule or regulation after the date
of this Agreement; (b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this Agreement; or (c) compliance by any
Lender or the Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of
such Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any Governmental Authority made
or issued after the date of this Agreement.




          “Code” means the Internal Revenue Code of 1986.




          “Collateral” means any and all property owned, leased or operated by a Person covered
by the Collateral Documents and any and all other property of any Borrower, now existing or
hereafter acquired, that may at any time be or become subject to a security interest or Lien in
favor of the Administrative Agent (for the benefit of the Lender Parties) to secure the Secured
Obligations.




          “Collateral Access Agreement” has the meaning assigned to such term in the Security
Agreement.




          “Collateral Documents” means, collectively, the Security Agreement, each Collateral
Access Agreement, each Deposit Account Control Agreement, each Lock Box Agreement and each other
document granting a Lien upon the Collateral as security for payment of the Secured Obligations.




          “Collection Deposit Account” has the meaning assigned to such term in the Security
Agreement.




          “Commitment” means, with respect to each Lender, the sum of such Lender’s Revolving
Commitment, together with the commitment of such Lender to acquire participations in Protective
Advances hereunder. The initial amount of each Lender’s Revolving Commitment is set forth on the
Revolving Commitment Schedule, or in the Assignment and Assumption pursuant to which such
Lender shall have assumed its Revolving Commitment, as applicable.




          “Commodity Swap Agreement” means any Swap Agreement involving or settled by reference
to one or more commodities.




          “Company” means Kaiser Aluminum Corporation, a Delaware corporation.




          “Company Call Options” means one or more call options, purchased from a Dealer
Counterparty by the Company in connection with the issuance of the Convertible Notes, to purchase
up to the notional number of shares of the Company’s common stock equal to the number of shares
underlying the Convertible Notes at the exercise price initially equal to the initial conversion
price of the Convertible Notes; provided that such call options may be capped and/or
net-share or cash settled.




          “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.






5









 








          “Convertible Notes Call Agreements” means, collectively, the documentation evidencing
the Company Call Options.




          “Convertible Notes” means the Convertible Senior Notes of the Company that are issued
pursuant to the Convertible Notes Agreement, as from time to time amended, modified, refinanced,
replaced or exchanged.




          “Convertible Notes Agreement” means, collectively, each indenture, agreement, document
or instrument evidencing or governing any Convertible Notes, amended or modified from time to time.




          “Covenant Release Event” means as of any date following the occurrence of a Covenant
Trigger Event, the first date upon which both of the following conditions have been satisfied: (a)
Availability has exceeded 20% of the aggregate Revolving Commitment then in effect for each day
during the 90 consecutive calendar day period ending on such date after the immediately preceding
Covenant Trigger Event and (b) at least 365 days have elapsed since the date of the last Covenant
Release Event, if any.




          “Covenant Trigger Event” means any date on which Availability has been less than 15%
of the aggregate Revolving Commitment then in effect for any period of three consecutive Business
Days ending on such date. A Covenant Trigger Event shall be deemed to have occurred and be
continuing from the occurrence of such Covenant Trigger Event up to but not including the first
date upon which a Covenant Release Event occurs following such Covenant Trigger Event.




          “Covenant Trigger Period” means the period beginning on the date of the occurrence of
a Covenant Trigger Event and ending on the date of the occurrence of the Covenant Release Event.




          “Credit Exposure” means, as to any Lender at any time, the sum of (a) such Lender’s
Revolving Exposure at such time, plus (b) an amount equal to its Applicable Percentage, if
any, of the aggregate principal amount of Protective Advances outstanding at such time.




          “DCO” means DCO Management, LLC, formerly Kaiser Aluminum & Chemical Corporation, LLC,
a Delaware limited liability company.




          “Dealer Counterparties” means, collectively, JPMorgan Chase Bank, N.A., Bank of
America, N.A. or other leading commercial or investment banks (or, with respect to any of the
foregoing, an Affiliate thereof) and their respective successors and assigns.




          “Dealer Counterparty Warrants” means the net-share settled warrants, sold by the
Company to a Dealer Counterparty on any day(s) on which the Company Call Options are purchased by
the Company from such Dealer Counterparty, to purchase up to initially the number of shares of
common stock of the Company equal to the notional number of shares underlying such Company Call
Options.




          “Default” means any event or condition which constitutes an Event of Default or which
upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.




          “Defaulting Lender” means any Lender, as determined by the Administrative Agent, that
has (a) failed to fund any portion of its Loans or participations in Letters of Credit or Swingline
Loans within three Business Days of the date required to be funded by it hereunder; (b) notified
any Borrower, the Administrative Agent, the Issuing Bank, the Swingline Lender or any Lender in
writing that it does






6









 







not intend to comply with any of its funding obligations under this Agreement
or 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 in which it commits to extend credit;
(c) failed, within three Business Days after request by the Administrative Agent, to confirm that
it will comply with the terms of this Agreement relating to its obligations to fund prospective
Loans and participations in then outstanding Letters of Credit and Swingline Loans; (d) otherwise
failed to pay over to the Administrative Agent or any other Lender any other amount required to be
paid by it hereunder within three Business Days of the date when due, unless the subject of a good
faith dispute; or (e)(i) become or is insolvent or has a parent company that has become or is insolvent or (ii) 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 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.




          “Deposit Account Control Agreement” has the meaning assigned to such term in the
Security Agreement.




          “Designated Asset Sales” means those assets described in Schedule 1.01(a) that may be
sold in accordance with Section 6.05(i).




          “Disclosed Matters” means the actions, suits and proceedings and the environmental
matters disclosed in Schedule 3.06.




          “Disqualified Indebtedness” means any Indebtedness for borrowed money with any bond,
note, indenture or similar instrument issued, assumed or acquired in connection with an acquisition
if the instrument governing such Indebtedness or other obligation (a) has a scheduled maturity date
earlier than 90 days after the Maturity Date or (b) requires any Borrower to make any scheduled or
mandatory payments of principal or to otherwise purchase or redeem, or make sinking fund or other
similar payments with respect to, such Indebtedness earlier than 90 days after the Maturity Date;
provided that the amount of such Indebtedness under this clause (b) shall be the
aggregate principal amount of all such scheduled or mandatory payments, purchases, redemptions, or
sinking fund or other similar payments required to be made earlier than 90 days after the Maturity
Date.




          “Document” has the meaning assigned to such term in the Security Agreement.




          “Documentation Agent” means Wells Fargo Capital Finance, LLC, in its capacity as
Documentation Agent, and its successors and assigns in such capacity.




          “dollars” or “$” refers to lawful money of the United States.




          “Dominion Release Event” shall mean, as of any date following the occurrence of a
Dominion Trigger Event, the first date upon which both of the following conditions have been
satisfied: (i) Availability has exceeded 25% of the aggregate Revolving Commitment then in effect
for each day during the 90 consecutive calendar day period ending on such date after the
immediately preceding Dominion Trigger Event and (ii) at least 365 days have elapsed since the date
of the last Dominion Release Event, if any.






7









 








          “Dominion Trigger Event” shall mean any date on which Availability is less than 20% of
the aggregate Revolving Commitment then in effect for any period of five consecutive Business Days
ending on such date. A Dominion Trigger Event shall be deemed to have occurred and be continuing
from the occurrence of such Dominion Trigger Event up to but not including the first date upon
which a Dominion Release Event occurs following such Dominion Trigger Event.




          “Dominion Trigger Period” means the period beginning on the date of the occurrence of
a Dominion Trigger Event and ending on the date of the occurrence of the Dominion Release Event.




          “EBITDA” means, for the Borrowers and the Subsidiaries on a consolidated basis, for
any period, in each case as determined in accordance with GAAP, Net Income for such period,
plus (a) to the extent deducted in determining Net Income for such period, (i) Interest
Expense, (ii) expense for income taxes, (iii) depreciation, (iv) amortization, (v) extraordinary
losses incurred, (vi) Mark-to-Market Losses, (vii) VEBA Expense and (viii) any other non-cash
charges except to the extent that any such non-cash charges (A) could reasonably be expected to
result in a cash payment during the term of this Agreement or (B) represent amortization of a
prepaid cash item paid in a prior period, minus (b) to the extent included in determining
Net Income, (i) benefit for income taxes, (ii) extraordinary gains realized, (iii) Mark-to-Market
Profits and (vii) VEBA Benefits.




          “EDGAR” means the SEC’s Electronic Data Gathering Analysis and Retrieval System (or
any successor system).




          “Effective Date” means the date on which the conditions specified in Section
4.01 are satisfied (or waived in accordance with Section 9.02).




          “Eligible Accounts” means, at any time, the Accounts of the Borrowers which the
Administrative Agent determines in its Permitted Discretion are eligible as the basis for (a) the
extension of Revolving Loans and Swingline Loans and (b) the issuance of Letters of Credit
hereunder. Without limiting the Administrative Agent’s discretion provided herein, Eligible
Accounts shall not include any Account:





     (a) which is not subject to a first priority perfected security interest in favor of
the Administrative Agent (for the benefit of the Lender Parties);




     (b) which is subject to any Lien other than (i) a Lien in favor of the Administrative
Agent (for the benefit of the Lender Parties) or (ii) a Permitted Encumbrance which does not
have priority over the Lien in favor of the Administrative Agent (for the benefit of the
Lender Parties);




     (c) which is unpaid more than 90 days after the date of the original invoice therefor;




     (d) which is owing by an Account Debtor for which more than 25% of the Accounts owing
from such Account Debtor and its Affiliates are ineligible under this Agreement (other than
as a result of the operation of paragraph (e) below);




     (e) which is owing by an Account Debtor to the extent that the aggregate amount of
Accounts owing from such Account Debtor and its Affiliates to all the Borrowers exceeds 15%
(or, solely in the case of the Reliance Account Debtors, 25%) of the aggregate amount of
Eligible Accounts of all the Borrowers, provided that, in each such case, only those
Accounts owing by such Account Debtor or group of Affiliated Account Debtors that are in
excess of 15% (or 25% in the case of the Reliance Account Debtors) of the aggregate amount
of Eligible Accounts as set



8









 






forth in the most recent Borrowing Base Certificate delivered hereunder shall be deemed ineligible as a result of this paragraph (e);




     (f) with respect to which any (i) covenant has been breached in any material respect or
(ii) representation or warranty is not true in all material respects, in each case to the
extent contained in this Agreement or the Security Agreement; provided that each such
representation and warranty shall be true and correct in all respects to the extent it is
already qualified by a materiality standard;




     (g) which (i) does not arise from the sale of goods or performance of services in the
ordinary course of business; (ii) is not evidenced by an invoice or other documentation
reasonably satisfactory to the Administrative Agent which has been sent to the Account
Debtor; (iii) represents a progress billing; (iv) is contingent upon the applicable
Borrower’s completion of any further performance (other than product returns in the ordinary
course of business); (v) represents a guaranteed sale, sale-and-return, sale on approval,
consignment, cash-on-delivery or any other repurchase or return basis (excluding Accounts
that are subject to returns in the ordinary course of business); (vi) represents a sale on a
bill-and-hold; provided that such Account shall be deemed eligible if (A) the
applicable Account Debtor with respect to such Account has delivered an agreement (in form
and substance acceptable to the Administrative Agent) among such Account Debtor, the
applicable Borrower and the Administrative Agent, pursuant to which such Account Debtor
unconditionally agrees to accept delivery of such goods and waives any rights of set-off
with respect to such Account or (B) such Account Debtor unconditionally agrees to pay in
cash for such Account in the event that such Account Debtor elects not to take delivery);
and (vii) relates to payments of interest;




     (h) for which the goods giving rise to such Account have not been shipped to the
Account Debtor or for which the services giving rise to such Account have not been performed
by such Borrower (other than bill-and-hold Accounts which satisfy the requirements set forth
in the proviso to clause (g)(vi) above); provided, however, that
this paragraph shall not exclude portions of Accounts relating to “capacity reservation
fees”;




     (i) with respect to which any check or other instrument of payment has been returned
uncollected for any reason;




     (j) which is owed by an Account Debtor which has (i) applied for, suffered or consented
to the appointment of any receiver, custodian, trustee or liquidator of its assets; (ii) has
had possession of all or a material part of its property taken by any receiver, custodian,
trustee or liquidator; (iii) filed, or had filed against it, any request or petition for
liquidation, reorganization, arrangement, adjustment of debts, adjudication as bankrupt,
winding-up, or voluntary or involuntary case under any state or Federal bankruptcy laws;
(iv) has admitted in writing its inability, or is generally unable to, pay its debts as they
become due; (v) become insolvent; or (vi) ceased operation of its business; provided that,
notwithstanding the foregoing, the Administrative Agent may determine, in its Permitted
Discretion, that post-petition Accounts owing by an Account Debtor that is a
debtor-in-possession under Federal bankruptcy laws shall not be deemed ineligible;




     (k) which is owed by any Account Debtor which has sold all or a substantially all of
its assets;



9









 






     (l) which is owed by an Account Debtor which (i) does not maintain its chief executive
office in the U.S., the United Kingdom or Canada (other than the Canadian province of
Quebec) or (ii) is not organized under applicable law of the U.S., any state of the U.S.,
the United Kingdom, Canada or any province of Canada (other than the Canadian province of
Quebec) unless, in either case, such Account is (A) backed by a Letter of Credit acceptable
to the Administrative Agent which is in the possession of, and is directly drawable by, the
Administrative Agent, (B) owed by an Account Debtor that has been approved by the
Administrative Agent in its Permitted Discretion (provided that the aggregate amount
of such Accounts owed by all such Account Debtors in the aggregate shall not exceed 20% of
the aggregate amount of Eligible Receivables) or (C) owed by an Account Debtor listed on
Schedule 1.01(b), as such schedule may be amended from time to time by the Borrower
Representative with the consent of the Required Lenders;




     (m) which is owed in any currency other than U.S. dollars, other than Accounts payable
in Euros, Pounds Sterling, Canadian Dollars or any other currency specified by the
Administrative Agent in its Permitted Discretion; provided that the amount of all
such Accounts payable in Euros, Pounds Sterling, Canadian Dollars or any other currency
specified by the Administrative Agent shall not exceed $8,000,000 in the aggregate; and
provided, further, that, with respect to Accounts owed in any currency other
than U.S. dollars, the value of such Accounts for purposes of calculating the Borrowing Base
shall be expressed in U.S. dollars as of the date of the applicable Borrowing Base
Certificate, each such value to be calculated on a basis acceptable to the Administrative
Agent in its Permitted Discretion;




     (n) which is owed by (i) the government (or any department, agency, public corporation,
or instrumentality thereof) of any country other than the U.S. unless such Account is backed
by a Letter of Credit acceptable to the Administrative Agent which is in the possession of
the Administrative Agent, or (ii) the government of the U.S., or any department, agency,
public corporation, or instrumentality thereof, unless the Federal Assignment of Claims Act
of 1940, as amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.), and any other
steps necessary to perfect the Lien of the Administrative Agent in such Account have been
complied with to the Administrative Agent’s satisfaction;




     (o) which is owed by any Affiliate, employee, officer, director, agent or stockholder
of any Borrower;




     (p) which is owed by an Account Debtor or any Affiliate of such Account Debtor to which
any Borrower is indebted, but only to the extent of such indebtedness or is subject to any
security, deposit, progress payment, retainage or other similar advance made by or for the
benefit of an Account Debtor, in each case to the extent thereof;




     (q) which is subject to any counterclaim, deduction, defense, setoff or dispute but
only to the extent of any such counterclaim, deduction, defense, setoff or dispute;




     (r) which is evidenced by any promissory note, chattel paper, or instrument;




     (s) which is owed by an Account Debtor located in any jurisdiction which requires
filing of a “Notice of Business Activities Report” or other similar report in order to
permit such Borrower to seek judicial enforcement in such jurisdiction of payment of such
Account, unless such Borrower has filed such report or qualified to do business in such
jurisdiction;



10









 






     (t) with respect to which such Borrower has made any agreement with the Account Debtor
for any reduction thereof, other than discounts and adjustments given in the ordinary course
of business, or any Account which was partially paid and such Borrower created a new
receivable for the unpaid portion of such Account;




     (u) which does not comply in all material respects with the requirements of all
applicable laws and regulations, whether Federal, state or local, including without
limitation the Federal Consumer Credit Protection Act, the Federal Truth in Lending Act and
Regulation Z of the Board;




     (v) which is for goods that have been sold under a purchase order or pursuant to the
terms of a contract or other agreement or understanding (written or oral) that indicates or
purports that any Person other than such Borrower has or has had an ownership interest in
such goods, or which indicates any party other than such Borrower as payee or remittance
party; or




     (w) which the Administrative Agent otherwise determines in its Permitted Discretion is
unacceptable for any reason whatsoever.



          In determining the amount of an Eligible Account, the face amount of an Account may, in the
Administrative Agent’s Permitted Discretion, be reduced by, without duplication, to the extent not
reflected in such face amount, (i) the amount of all accrued and actual discounts, claims, credits
or credits pending, promotional program allowances, price adjustments, finance charges or other
allowances (including any amount that such Borrower may be obligated to rebate to an Account Debtor
pursuant to the terms of any agreement or understanding (written or oral)) and (ii) the aggregate
amount of all cash received in respect of such Account but not yet applied by such Borrower to
reduce the amount of such Account.




          “Eligible Inventory” means, at any time, the Inventory of a Borrower which the
Administrative Agent determines in its Permitted Discretion is eligible as the basis for (i) the
extension of Revolving Loans and Swingline Loans and (ii) the issuance of Letters of Credit
hereunder. Without limiting the Administrative Agent’s discretion provided herein, Eligible
Inventory shall not include any Inventory:





     (a) which is not subject to a first priority perfected Lien in favor of the
Administrative Agent (for the benefit of the Lender Parties);




     (b) which is subject to any Lien other than (i) a Lien in favor of the Administrative
Agent (for the benefit of the Lender Parties) and (ii) a Permitted Encumbrance which does
not have priority over the Lien in favor of the Administrative Agent (for the benefit of the
Lender Parties);




     (c) which is, in the Administrative Agent’s opinion, applying its Permitted Discretion,
slow moving, obsolete, unmerchantable, defective, unfit for sale, not salable at prices
approximating at least the cost of such Inventory in the ordinary course of business or
unacceptable due to age, type, category and/or quantity;




     (d) with respect to which any covenant has been breached in any material respect or
representation or warranty is not true in all material respects, in each case to the extent
contained in this Agreement or the Security Agreement (provided that each such
representation and warranty shall be true and correct in all respects to the extent it is
already qualified by a



11









 






materiality standard) and which does not conform in any material respect to all standards imposed by any Governmental Authority;




     (e) in which any Person other than such Borrower shall (i) have any direct or indirect
ownership, interest or title to such Inventory or (ii) be indicated on any purchase order or
invoice with respect to such Inventory as having or purporting to have an interest therein;




     (f) which constitutes packaging and shipping material or stores (provided that
such stores may be deemed eligible in the Administrative Agent’s Permitted Discretion upon
receipt of an inventory appraisal with respect to such stores, which appraisal shall be done
in a manner acceptable to the Administrative Agent by an appraiser acceptable to the
Administrative Agent), displays or display items, bill-and-hold goods, goods that are returned or marked for
return, repossessed goods, defective or damaged goods, goods held on consignment, or goods
which are not of a type held for sale in the ordinary course of business;




     (g) which is (i) not located in the U.S. or Canada (excluding the Canadian province of
Quebec) or (ii) in transit except for Inventory in transit between locations controlled by a
Borrower;




     (h) which is located in any location leased by such Borrower unless (i) the lessor has
delivered to the Administrative Agent a Collateral Access Agreement or (ii) a Rent Reserve
with respect to such facility has been established by the Administrative Agent in its
Permitted Discretion, but without duplication of any Rent Reserves pursuant to any other
provision of this Agreement;




     (i) which is located in any third party warehouse or is in the possession of a bailee
(other than a third party processor) unless (i) such warehouseman or bailee has delivered
to the Administrative Agent a Collateral Access Agreement and such other documentation as
the Administrative Agent may require in its Permitted Discretion (provided that up
to $4,000,000 of such Inventory may be included in the Borrowing Base even if Collateral
Access Agreements and such other documentation as the Administrative Agent may require have
not been obtained with respect to such Inventory) or (ii) an appropriate Reserve has been
established by the Administrative Agent in its Permitted Discretion;




     (j) which is being processed offsite at a third party location or outside processor, or
is in-transit to or from said third party location or outside processor; provided
that Inventory located at a third-party processor shall not be ineligible pursuant to this
paragraph (j) if the applicable third-party processor has entered into, on terms
reasonably satisfactory to the Administrative Agent, a Collateral Access Agreement or such
other documentation as the Administrative Agent may reasonably require;




     (k) which is the subject of a consignment by such Borrower as consignor or which any
Borrower has placed on consignment with another Person (other than a Person that is a third
party processor of such Inventory, in which case such Inventory may be included as Eligible
Inventory to the extent provided in paragraph (j) above);




     (l) which is perishable;




     (m) which contains or bears any intellectual property rights licensed to such Borrower unless the
Administrative Agent is satisfied, in its Permitted Discretion, that it may sell




12











 






or otherwise dispose of such Inventory without (i) infringing the rights of such licensor,
(ii) violating any contract with such licensor, or (iii) incurring any liability with
respect to payment of royalties other than royalties incurred pursuant to sale of such
Inventory under the current licensing agreement;




     (n) for which reclamation rights have been asserted by the seller; or




     (o) which the Administrative Agent otherwise determines in its Permitted Discretion is
unacceptable for any reason whatsoever.



          “Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into
by any
Governmental Authority, relating in any way to the environment, preservation or reclamation of
natural resources, the management, release or threatened release of any Hazardous Material or to
health and safety matters.



          “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of any
Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) any 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.



          “Equity Interests” means shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or other equity ownership
interests in a Person, and any warrants, options or other rights entitling the holder thereof to
purchase or acquire any such equity interest.



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



          “ERISA Affiliate” means any trade or business (whether or not incorporated) that,
together with a Borrower, is treated as a single employer under Section 414(b), (c), (m) or (o) of
the Code.



          “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or
the regulations issued thereunder with respect to a Plan (other than an event for which the 30 day
notice period is waived); (b) the existence with respect to any Plan of a failure to satisfy any
minimum funding standard (sufficient to give rise to a Lien under Section 430 of the Code or
Section 303 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code
or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by any Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan; (e) the taking of
any steps by any Borrower or any ERISA Affiliate to terminate any Plan or the receipt by any
Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an
intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the
incurrence by any Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; (g) the receipt by any
Borrower or any ERISA Affiliate of any notice concerning the imposition of Withdrawal Liability or
a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization,



13









 







within the meaning of Title IV of ERISA; or (h) the incurrence by any Borrower of any material
liability under Title IV of ERISA.



          “Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by
reference to the Adjusted LIBO Rate.



          “Event of Default” has the meaning assigned to such term in Article VII.



          “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the
Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of
any Borrower under any Loan Document, (a) income or franchise taxes imposed on (or measured by) its
net income by the United States, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any Lender, in which its
applicable lending office
is located, (b) any branch profits taxes imposed by the United States or any similar tax
imposed by any other jurisdiction in which a Borrower is located and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by a Borrower under Section 2.19(b)),
any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such
Foreign Lender becomes a party to this Agreement (or designates a new lending office) or is
attributable to such Foreign Lender’s failure to comply with Section 2.17(f), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation
of a new lending office (or assignment), to receive additional amounts from the Borrowers with
respect to such withholding tax pursuant to Section 2.17(a).



          “Existing Credit Agreement” means the Senior Secured Revolving Credit Agreement, dated
as of July 6, 2006, as amended, among the Borrowers, the lenders party thereto and JPMorgan Chase,
as Administrative Agent.



          “Existing Lender” means any Lender that has Existing Loans, immediately prior to the
making of the initial Borrowings hereunder, under the Existing Credit Agreement.



          “Existing Letters of Credit” means the letters of credit referred to on Schedule
2.06(k) hereto, which letters of credit were originally issued by the Issuing Bank pursuant to
the Existing Credit Agreement.



          “Existing Loans” means, with respect to each Existing Lender, the aggregate principal
amount of such Existing Lender’s revolving loans that are outstanding under the Existing Credit
Agreement immediately prior to the making of the initial Borrowings hereunder, as set forth on
Schedule 1.01(e).



          “Existing Security and Pledge Agreement” means the Security and Pledge Agreement that
was entered into in connection with the Existing Credit Agreement.



          “Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) 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 that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received
by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.



14









 





          “Financial Officer” means the chief financial officer, principal accounting officer,
treasurer, assistant treasurer or controller of a Borrower, or any other Person who performs a
function similar to any of the foregoing and has been identified in writing to the Administrative
Agent as a “Financial Officer” hereunder.



          “Fiscal Month” means any of the monthly accounting periods of the Borrowers and the
Subsidiaries.



          “Fiscal Quarter” means any of the quarterly accounting periods of the Borrowers and
the Subsidiaries, ending on March 31, June 30, September 30 and December 31 of each year.



          “Fiscal Year” means any of the annual accounting periods of the Borrowers and the
Subsidiaries ending on December 31 of each year.



          “Fixed Charge Coverage Ratio” means the ratio, determined as of the end of any period,
of (a) EBITDA for the period of determination minus Net Capital Expenditures for such
period of determination to (b) Fixed Charges for such period of determination, all calculated for
the Borrowers and the Subsidiaries on a consolidated basis in accordance with GAAP.



          “Fixed Charges” means, for the Borrowers and the Subsidiaries on a consolidated basis,
with reference to any period, without duplication, cash Interest Expense paid during such period,
plus scheduled principal payments on Indebtedness (including rent or other payments on
Capital Lease Obligations other than imputed interest components thereof) made during such period,
plus, income taxes paid in cash during such period (or less cash payments received
with respect to income taxes during such period), plus dividends or other distributions
paid in cash to holders of Equity Interests in the Company in respect thereof during such period.



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



          “Funding Accounts” has the meaning assigned to such term in Section 4.01(h).



          “GAAP” means generally accepted accounting principles in the United States.



          “Governmental Authority” means the government of the United States, 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.



          “Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such Indebtedness or other
obligation of the payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any
letter of



15









 







credit or letter of guaranty issued to support such Indebtedness or obligation;
provided that the term “Guarantee” shall not include endorsements for collection or deposit
in the ordinary course of business. The amount of any Guarantee of any guarantor shall be deemed
to be the lower of (i) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee is made and (ii) the maximum amount for which such
guarantor may be liable pursuant to the terms of the instrument embodying such Guarantee.



          “Guaranteed Obligations” has the meaning assigned to such term in Section
10.01.



          “Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.



          “Indebtedness” of any Person means, without duplication, (a) all obligations of such
Person for borrowed money or with respect to deposits or advances of any kind (other than “capacity
reservation fees” arising in the ordinary course of business), (b) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property acquired by such Person,
(e) all obligations of such Person in respect of the deferred purchase price of property or
services (excluding current accounts payable, expense accruals and deferred compensation items
incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured
thereby has been assumed, provided that, if such Person has not assumed such
obligations, then the amount of Indebtedness of such Person for purposes of this paragraph
(f) shall be equal to the lesser of the amount of the obligations of the holder of such
obligations and the fair market value of the assets of such Person which secure such obligations;
(g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of
such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise,
of such Person in respect of bankers’ acceptances, (k) obligations under any liquidated earn-out;
(l) all Swap Obligations of such Person (with the amount of Indebtedness attributable to Swap
Obligations of such Person for purposes of this definition being equal to the Net Mark-to-Market
Exposure with respect thereto); and (m) any other Off-Balance Sheet Liability. The Indebtedness of
any Person shall include the Indebtedness of any other entity (including any partnership in which
such Person is a general partner) to the extent such Person is liable therefor as a result of such
Person’s ownership interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.



          “Indemnified Taxes” means Taxes other than Excluded Taxes.



          “Information Memorandum” means the Confidential Information Memorandum dated March
2010 relating to the Borrowers and the Transactions.



          “Interest Election Request” means a request by the Borrower Representative to convert
or continue a Revolving Borrowing in accordance with Section 2.08.



          “Interest Expense” means, with reference to any period, total interest expense,
calculated on a consolidated basis for the Company and the Subsidiaries (including all commissions,
discounts and



16









 







other fees and charges owed with respect to letters of credit and bankers’ acceptance
financing) for such period in accordance with GAAP.



          “Interest Payment Date” means (a) with respect to any ABR Loan (other than a Swingline
Loan), the last day of each calendar month and the Maturity Date, and (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan
is a part and, in the case of a Eurodollar Loan with an Interest Period of more than three months’
duration, each day prior to the last day of such Interest Period that occurs at intervals of three
months’ duration after the first day of such Interest Period and the Maturity Date.



          “Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically corresponding day in the
calendar month that is one, two, three or six months thereafter, as the Borrower Representative may
elect; provided that (a) if any Interest Period would end on a day other than a Business
Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case
of a Eurodollar Borrowing only, such next succeeding Business Day would fall in the next calendar
month, in which case such Interest
Period shall end on the next preceding Business Day; and (b) any Interest Period pertaining to
a Eurodollar Borrowing that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of such Interest Period)
shall end on the last Business Day of the last calendar month of such Interest Period. For
purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is
made and, in the case of a Revolving Borrowing, thereafter shall be the effective date of the most
recent conversion or continuation of such Borrowing.



          “Inventory” has the meaning assigned to such term in the Security Agreement.



          “Investment” has the meaning assigned to such term in Section 6.04.



          “Issuing Bank” means JPMorgan Chase, in its capacity as the issuer of Letters of
Credit hereunder, and its successors in such capacity as provided in Section 2.06(i). The
Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by
Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall include any such
Affiliate with respect to Letters of Credit issued by such Affiliate.



          “Joinder Agreement” has the meaning assigned to such term in Section 5.14(a).



          “Joint Bookrunners” means, individually or collectively as the context may require,
J.P. Morgan Securities Inc. and Wells Fargo Capital Finance, LLC, in their respective capacities as
joint bookrunners hereunder, and each of their successors and assigns in such capacity.



          “Joint Lead Arrangers” means, individually or collectively as the context may require,
J.P. Morgan Securities Inc. and Wells Fargo Capital Finance, LLC, in their respective capacities as
joint lead arrangers hereunder, and each of their successors and assigns in such capacity.



          “JPMorgan Chase” means JPMorgan Chase Bank, N.A., a national banking association, in
its individual capacity, and its successors.



          “KACL” means Kaiser Aluminum Canada Limited, an Ontario corporation.



17









 





          “KAF” means Kaiser Aluminum France, SAS, a société par actions simplifiée organized
under the laws of France.



          “KAFP” means Kaiser Aluminum Fabricated Products, LLC, a Delaware limited liability
company.



          “KAIC” means Kaiser Aluminum Investments Company, a Delaware corporation.



          “KAII” means Kaiser Aluminium International, Inc., a Delaware corporation.



          “LC Collateral Account” has the meaning assigned to such term in Section
2.06(j).



          “LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter of
Credit.



          “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all
outstanding Letters of Credit at such time, plus (b) the aggregate amount of all LC
Disbursements relating to Letters of Credit that have not yet been reimbursed by or on behalf of
the Borrowers at such time. The
LC Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the
total LC Exposure at such time.



          “Lender Parties” means, individually or collectively as the context may require, the
Agents, the Lenders and the Issuing Bank.



          “Lenders” means the Persons listed on the Revolving Commitment Schedule and
any other Person that shall have become a party hereto pursuant to an Assignment and Assumption,
other than any such Person that ceases to be a party hereto pursuant to an Assignment and
Assumption. Unless the context otherwise requires, the term “Lenders” includes the Swingline
Lender.



          “Letter of Credit” means any standby letter of credit issued pursuant to this
Agreement.



          “Letter of Credit Shortfall Amount” means an amount equal to the difference of (a) the
amount of Letter of Credit Exposure at such time, less (b) the amount of cash on deposit in the LC
Collateral Account at such time which (i) is free and clear of all rights, claims and Liens of all
Persons, other than in favor of the Administrative Agent (for the benefit of the Lender Parties),
and (ii) has not been applied against the Obligations.



          “LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period,
the rate appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute page of such
Service, or any successor to or substitute for such Service, providing rate quotations comparable
to those currently provided on such page of such Service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates applicable to dollar
deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar deposits having a
maturity comparable to such Interest Period. In the event that such rate is not available at such
time for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for such
Interest Period shall be the rate at which dollar deposits of $5,000,000 and for a maturity
comparable to such Interest Period are offered by the principal London office of the Administrative
Agent in immediately available funds in the London interbank market at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest Period.



18









 





          “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset; (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset; and (c) in the case of securities, any purchase option, call
or similar right of a third party with respect to such securities.



          “Loan Documents” means this Agreement, any promissory notes issued pursuant to this
Agreement, any Letter of Credit applications, the Collateral Documents, the Loan Guaranty and all
other agreements, instruments, documents and certificates identified in Section 4.01
executed and delivered to, or in favor of, the Administrative Agent or any Lenders and including
all other pledges, powers of attorney, consents, assignments, contracts, notices, letter of credit
agreements and all other written matter whether heretofore, now or hereafter executed by or on
behalf of any Borrower, or any employee of any Borrower, and delivered to the Administrative Agent
or any Lender in connection with this Agreement or the transactions contemplated thereby. Any
reference in this Agreement or any other Loan Document to a Loan Document shall include all
appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other
modifications thereto, and shall refer to this Agreement or such Loan Document as the same may be
in effect at any and all times such reference becomes operative.



          “Loan Guarantor” means each Borrower in its capacity as guarantor of repayment of the
Secured Obligations.



          “Loan Guaranty” means Article X of this Agreement.



          “Loans” means the loans and advances made by the Lenders pursuant to this Agreement,
including Swingline Loans and Protective Advances.



          “Lock Box Agreement” has the meaning assigned to such term in the Security Agreement.



          “Mark-to-Market Losses” means, with respect to any Person as of any date of
determination, all non-cash unrealized losses recorded in the income of such Person arising from
Swap Agreement transactions and, if not included in Swap Agreement transactions, all non-cash
losses on the Company Call Options and the call options embedded in the Convertible Notes.



          “Mark-to-Market Profits” means with respect to any Person as of any date of
determination, all non-cash unrealized gains or profits recorded in the income of such Person
arising from Swap Agreement transactions and, if not included in Swap Agreement transactions, all
non-cash unrealized gains or profits on the Company Call Options and the call options embedded in
the Convertible Notes.



          “Material Adverse Effect” means a material adverse effect on (a) the business, assets,
property, operations, prospects or condition, financial or otherwise of the Borrowers, taken as a
whole; (b) the ability of the Borrowers, taken as a whole, to perform any of its obligations under
the Loan Documents to which they are a party; (c) the Collateral, the Administrative Agent’s Liens
(for the benefit of the Lender Parties) on the Collateral or the priority of such Liens; or (d) the
rights of or benefits available to the Administrative Agent or any other Lender Party under the
Loan Documents.



          “Material Indebtedness” means any Indebtedness (other than the Loans and Letters of
Credit) or obligations in respect of one or more Swap Agreements, of any one or more of the
Borrowers



19









 







and the Subsidiaries of any Borrower in an aggregate principal amount exceeding
$20,000,000. For purposes of determining Material Indebtedness, the “obligations” of any Borrower
or Subsidiary in respect of any Swap Agreement at any time shall be the Net Mark-to-Market Exposure
that such Borrower or Subsidiary would be required to pay if such Swap Agreement were terminated at
such time.



          “Maturity Date” means March 23, 2014 or any earlier date on which the Revolving
Commitments are reduced to zero or otherwise terminated pursuant to the terms hereof.



          “Maximum Liability” has the meaning assigned to such term in Section 10.10.



          “Moody’s” means Moody’s Investors Service, Inc.



          “Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.



          “Net Capital Expenditures” means, with respect to any Person and any period, as of any
date of determination, the total Capital Expenditures of such period minus that portion of
such Capital Expenditures that (a) are financed with Indebtedness described in Section
6.01(e) and 6.01(n), and (b) are financed with insurance proceeds received in respect
of any casualty, provided such insurance proceeds are reinvested in assets of a
substantially similar nature as those subject to any such casualty.



          “Net Income” means, for any period, the consolidated net income (or loss) of the
Company and the Subsidiaries, determined on a consolidated basis in accordance with GAAP;
provided that there shall be excluded (a) the income (or deficit) of any Person accrued
prior to the date it becomes a Subsidiary or is merged into or consolidated with the Company or any
of the Subsidiaries; (b) the income (or deficit) of any Person (other than a Subsidiary) in which
the Company or any of the Subsidiaries has an ownership interest, except to the extent that any
such income is actually received by the Company or such Subsidiary in the form of dividends or
similar distributions; and (c) the undistributed earnings of any Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation (other than under any Loan Document) or
Requirement of Law applicable to such Subsidiary.



          “Net Mark-to-Market Exposure” means with respect to any Person, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized profits of such
Person arising from Swap Agreement transactions. As used in this definition, “unrealized losses”
means the fair market value of the cost to such Person of replacing such Swap Agreement
transactions as of the date of determination (assuming the Swap Agreement transactions were to be
terminated as of the date), and “unrealized profits” means the fair market value of the gain to
such Person of replacing such Swap Agreement transactions as of the date of determination (assuming
such Swap Agreement transactions were to be terminated as of that date).



          “Net Orderly Liquidation Value” means, with respect to Inventory of any Person, the
orderly liquidation value thereof as determined in the most recent appraisal received by the
Administrative Agent in accordance with the terms hereof, which appraisal shall be done in a manner
acceptable to the Administrative Agent by an appraiser acceptable to the Administrative Agent, net
of all costs of liquidation thereof.



          “Net Proceeds” means, if in connection with (a) an asset disposition, cash proceeds
received by any Borrower net of (i) commissions, attorneys’ fees, accountants’ fees, investment
banking fees and other reasonable and customary transaction costs, fees and expenses properly
attributable to such



20









 







transaction and payable by such Borrower in connection therewith (in each
case, paid to non-Affiliates of such Borrower); (ii) taxes actually payable in respect thereof and
reasonable estimates of taxes actually payable with respect to such transaction in the tax year of
such transaction or in the following tax year; (iii) amounts payable to holders of senior Liens on
such asset (to the extent such Liens constitute Permitted Liens), if any; (iv) an appropriate
reserve for income taxes in accordance with GAAP established in connection therewith; and (v)
amounts escrowed or reserved against indemnification obligations or purchase price adjustments;
provided, however, that Net Proceeds shall not include any such amounts so received by such
Borrower in respect of any asset disposition made in any Fiscal Year until the aggregate amount of
cash received by all Borrowers in respect of asset dispositions during such Fiscal Year exceeds
$2,500,000 (excluding cash received in connection with dispositions described in Section
6.05(a) or Designated Asset Sales), in which case Net Proceeds shall constitute solely such
amounts in excess thereof; or (b) the issuance or incurrence of Indebtedness, cash proceeds net of
attorneys’ fees, investment banking fees, accountants’ fees, underwriting discounts and commissions
and other customary fees and expenses actually incurred in connection therewith; or (c) an equity
issuance, cash proceeds net of underwriting discounts and commissions and other reasonable costs
paid to non-Affiliates in connection therewith, provided, however, that Net Proceeds shall not
include any cash received in connection with the exercise of stock options granted to employees or
directors of any Borrower or any of the Subsidiaries.



          “Non-Consenting Lender” has the meaning assigned to such term in Section
9.02(d).



          “Non-Paying Guarantor” has the meaning assigned to such term in Section 10.11.



          “Obligated Party” has the meaning assigned to such term in Section 10.02.



          “Obligations” means all unpaid principal of and accrued and unpaid interest on the
Loans, all LC Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities
and other obligations of the Borrowers to the Lenders or to any Lender, the Administrative Agent,
the Issuing Bank or any indemnified party arising under the Loan Documents.



          “Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any
indebtedness, liability or obligation under any so-called “synthetic lease” transaction entered
into by such Person, or (c) any indebtedness, liability or obligation arising with respect to any
other transaction which is the functional equivalent of or takes the place of borrowing but which
does not constitute a liability on the balance sheets of such Person (other than operating leases).



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



          “Participant” has the meaning set forth in Section 9.04.



          “Paying Guarantor” has the meaning assigned to such term in Section 10.11.



          “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.



          “Permitted Acquisition” shall mean any acquisition by any Borrower in a transaction
that satisfies each of the following requirements:



21









 






     (a) such acquisition is not a hostile or contested acquisition;




     (b) the business acquired in connection with such acquisition (i) is not located in any
country or jurisdiction in which (A) in accordance with Requirements of Law binding on U.S.
Persons (including the regulations promulgated by the U.S. Office of Foreign Assets
Control), U.S. Persons are prohibited from engaging in business or (B) any Lender would, in
accordance with its internal policies, be prohibited from extending credit, and (ii) is not
primarily engaged, directly or indirectly, in any material line of business other than the
businesses in which the Borrowers are engaged on the Effective Date and any business
activities that are substantially similar, related or incidental thereto;




     (c) both before and after giving effect to such acquisition and the Loans (if any)
requested to be made in connection therewith, each of the representations and warranties in
the Loan Documents is true and correct in all material respects; provided that
either (i)(A) each such representation and warranty shall be true and correct in all
respects to the extent it is already qualified by a materiality standard and (B) any such
representation or warranty which relates to a specified prior date shall be true and correct
(subject to the aforementioned materiality standards) as of such earlier date; or (ii) to
the extent the Lenders have been notified in writing by the Borrower Representative that any
representation or warranty is not correct, the Required Lenders have explicitly waived in
writing compliance with such representation or warranty;




     (d) as soon as available, but not later than the Business Day following the day in
which the board of directors (or other governing body) of the applicable Borrower approves
such
acquisition, the applicable Borrower has provided the Administrative Agent (i) notice
of such acquisition and (ii) a copy of all business and financial information reasonably
requested by the Administrative Agent including pro forma financial statements, statements
of cash flow, and Availability projections;




     (e) if the Accounts and Inventory acquired in connection with such acquisition are
proposed to be included in the determination of the Borrowing Base, the Administrative Agent
shall have conducted an audit and field examination of such Accounts and Inventory to its
satisfaction prior to such inclusion;




     (f) if Availability on a Pro Forma Basis after giving effect to such acquisition is
less than $100,000,000, (i) the sum of (A) the amount of cash consideration paid in
connection with such acquisition plus (B) the amount of Disqualified Indebtedness
assumed, acquired or issued in connection with such acquisition, in each case during the
term of this Agreement, shall not exceed $100,000,000; and (ii) Pro Forma Availability after
giving effect to such acquisition shall be at least $50,000,000; and (iii) the Pro Forma
Fixed Charge Coverage Ratio for the Test Period in effect after giving effect to such
acquisition is consummated shall not be less than 1.1:1.0;




     (g) if such acquisition is an acquisition of the Equity Interests of a Person or a
merger or consolidation with another Person, the acquisition, merger or consolidation is
structured so that the Person so acquired, merged or consolidated shall become a
wholly-owned Subsidiary of the applicable Borrower and, if required pursuant to Section
5.14(a), a Borrower pursuant to the terms of this Agreement;




     (h) if such acquisition is an acquisition of assets, the acquisition is structured so
that a Borrower shall acquire such assets;



22









 






     (i) if such acquisition is an acquisition of Equity Interests, such acquisition will
not result in any violation of Regulation U;




     (j) no Borrower shall, as a result of or in connection with any such acquisition,
assume or incur any direct or contingent liabilities (whether relating to environmental,
tax, litigation, or other matters) that at the time of such acquisition could be reasonably
expected to have a Material Adverse Effect;




     (k) in connection with an acquisition of the Equity Interests of any Person, all Liens
on property of such Person (other than Liens in favor of the Administrative Agent (for the
benefit of the Lender Parties) securing the Secured Obligations and any Liens that would
constitute Permitted Liens) shall be terminated unless the Lenders in their sole discretion
consent otherwise, and in connection with an acquisition of the assets of any Person, all
Liens on such assets (other than Liens in favor of the Administrative Agent (for the benefit
of the Lender Parties) securing the Secured Obligations and any Liens that would constitute
Permitted Liens) shall be terminated;




     (l) if the applicable acquisition is to be consummated during a Dominion Trigger
Period, the Fixed Charge Coverage Ratio shall be greater than 1.1:1.0 for the most recently
completed Fiscal Quarter;




     (m) the Borrower Representative shall certify in reasonable detail to the Lenders those
calculations it is relying on pursuant to paragraphs (f) and (l) in making
any determination therein; and




     (n) no Default or Event of Default has occurred and is continuing at the time such
acquisition is consummated or after giving effect thereto.



          “Permitted Commodity Swap Agreement” means any Commodity Swap Agreement that (a)
involves or is settled with respect to electricity, natural gas, alumina, bauxite or other mineral
or metal used in the business of the Borrowers or the Subsidiaries, and (b) is entered into in the
ordinary course of business of the Borrowers to hedge against fluctuations in the price of
electricity, natural gas, alumina, bauxite or other minerals or metals used in the business of the
Borrowers or the Subsidiaries and not for speculative purposes.



          “Permitted Discretion” means a determination made in good faith and in the exercise of
reasonable (from the perspective of a secured asset-based lender) business judgment.



          “Permitted Encumbrances” means:




     (a) Liens imposed by law for taxes that are not yet due or are being contested in
compliance with Section 5.04;




     (b) landlord’s, carrier’s, warehousemen’s, workmen’s, vendor’s, consignor’s,
mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not overdue by more than 30
days or are being contested in compliance with Section 5.04;




     (c) Liens incurred or pledges and deposits made in the ordinary course of business in
compliance with workers’ compensation laws, unemployment insurance, governmental insurance
and other social security laws or regulations;




23











 






     (d) Liens granted and deposits and other investments made to secure the
performance of tenders, bids, contracts (other than for the repayment of Indebtedness),
leases, statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;




     (e) Liens incurred to secure appeal bonds and judgment and attachment liens in respect
of judgments that do not constitute an Event of Default under paragraph (k) of
Article VII; and




     (f) easements, zoning restrictions, rights-of-way covenants, consents, reservations,
mineral leases, encroachments, variations and zoning laws, ordinances, other restrictions
and rights reserved to or vested in any municipality or government or proper authority to
control or regulate any real property of the Borrowers, charges or encumbrances (whether or
not recorded) and interest of ground lessors, minor defects and irregularities in the title
to any real property, which do not interfere materially with the ordinary conduct of the
business of the Borrowers, and which do not materially detract from the value of the
property to which they attach or materially impair the use thereof to the Borrowers;




     (g) purchase money Liens (including capital leases) upon or in any property acquired or
held in the ordinary course of business to secure the purchase price of such property solely
for the purpose of financing the acquisition of such property to the extent such purchase
money Liens secure Indebtedness incurred in accordance with Section 6.01(e);




     (h) pledges or deposits in the ordinary course to secure leases entered into in the
ordinary course of business;




     (i) pledges and deposits of cash and Permitted Investments with a commodity broker or
dealer for the purpose of margining or securing the obligations of any Borrower or
Significant Subsidiary under a Permitted Commodity Swap Agreement;




     (j) any interest of a consignor in goods held by any Borrower or Significant
Subsidiary on consignment provided that such goods are held on consignment in the ordinary
course of business consistent with past practices; and




     (k) extensions, renewals, or replacements of any Lien referred to in clauses (a)
through (j) above; provided that the principal amount of the obligation secured thereby is
not increased and that any such extension, renewal or replacement is limited to the property
encumbered thereby;


provided that the term “Permitted Encumbrances” shall not include any Lien securing
Indebtedness.




          “Permitted Investments” means:





     (a) direct obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States (or by any agency thereof to the extent
such obligations are backed by the full faith and credit of the United States);




     (b) without limiting the provisions of paragraph (d) below, investments in
commercial paper having, at such date of acquisition, a rating of at least “A-2” or the
equivalent thereof from S&P or of at least “P-2” or the equivalent thereof from Moody’s;



24









 






     (c) investments in certificates of deposit, bankers acceptances and time deposits
(including Eurodollar time deposits) issued or guaranteed by or placed with (i) any domestic
office of the Administrative Agent or the bank with whom the Borrowers maintain their cash
management system; provided that if such bank is not a Lender hereunder, such bank
shall have entered into an agreement with the Administrative Agent pursuant to which such
bank shall have waived all rights of setoff and confirmed that such bank does not have, nor
shall it claim, a security interest therein, or (ii) any domestic office of any other
commercial bank of recognized standing organized under the laws of the United States or any
State thereof that has a combined capital and surplus and undivided profits of not less than
$250,000,000 and is the principal bank of a bank holding company having a long-term
unsecured debt rating of at least “A-2” or the equivalent thereof from S&P or at least “P-2”
or the equivalent thereof from Moody’s;




     (d) investments in commercial paper issued by any Person organized under the laws of
any state of the United States and rated at least “P-1” (or the then equivalent grade) by
Moody’s or at least “A-1” (or the then equivalent grade) by S&P;




     (e) investments in repurchase obligations with a term of not more than seven days for
underlying securities of the types described in paragraph (a) above entered into
with any office of a bank or trust company meeting the qualifications specified in
paragraph (c) above; and




     (f) investments in money market funds substantially all the assets of which are
comprised of securities of the types described in paragraph (a) through (e)
above.


The average maturity for the Permitted Investments of the Borrowers, taken as a whole, shall not
exceed 36 months from the date of acquisition thereof.




          “Permitted Lien” means any Lien permitted pursuant to Section 6.02.




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




          “Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA,
and in respect of which any Borrower or any ERISA Affiliate is an “employer” as defined in Section
3(5) of ERISA.




          “Prepayment Event” means:





     (a) any sale, transfer or other disposition of any property or asset that forms a part
of the Collateral of any Borrower, other than dispositions described in Section
6.05(a) or Designated Asset Sales; or




     (b) any casualty or other insured damage to, or any taking under power of eminent
domain or by condemnation or similar proceeding of, any property or asset of any Borrower
forming a part of the Collateral; or




     (c) the issuance by the Company of any Equity Interests, other than Equity Interests
issued (A) in connection with the Dealer Counterparty Warrants or the Convertible Notes or
(B) pursuant to a merger permitted by Section 6.03 or a Permitted Acquisition; or



25









 






     (d) the incurrence by any Borrower of any Indebtedness, other than Indebtedness
permitted under Section 6.01 or permitted by the Required Lenders.



          “Prime Rate” means the rate of interest per annum publicly announced from time to time
by JPMorgan Chase as its prime rate at its offices at 270 Park Avenue in New York City; each change
in the Prime Rate shall be effective from and including the date such change is publicly announced
as being effective.




          “Pro Forma Basis” means, with respect to any test hereunder in connection with any
event, that such test shall be calculated after giving effect on a pro forma basis
(which pro forma presentation shall treat all cash consideration given, and the
amount of Disqualified Indebtedness assumed, acquired or issued, in connection with such event as
having been paid in cash at the time of making such event) for the period of such calculation to
(a) such event as if it happened on the first day of such period or (b) the incurrence of any
Indebtedness by the Company or any Subsidiary in connection with such event and any incurrence,
repayment, issuance or redemption of other Indebtedness of the Company or any Subsidiary occurring
at any time subsequent to the last day of the Test Period and on or prior to the date of
determination, as if such incurrence, repayment, issuance or redemption, as the case may be,
occurred on the first day of the Test Period.




          “Projections” has the meaning assigned to such term in Section 5.01(f).




          “Protective Advance” has the meaning assigned to such term in Section 2.04.




          “Quarterly Available Credit” means, with respect to any Fiscal Quarter, the average
daily Availability for such Fiscal Quarter.




          “Register” has the meaning set forth in Section 9.04.




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




          “Reliance Account Debtors” means each Account Debtor that is listed on Schedule
1.01(d).




          “Rent Reserve” means, with respect to any store, warehouse distribution center,
regional distribution center or depot where any Inventory subject to Liens arising by operation of
law is located and with respect to which no Collateral Access Agreement is in effect, a reserve
equal to three months’ rent at such store, warehouse distribution center, regional distribution
center or depot.




          “Report” means reports prepared by the Administrative Agent or another Person showing
the results of appraisals, field examinations or audits pertaining to the Borrowers’ assets from
information furnished by or on behalf of the Borrowers, after the Administrative Agent has
exercised its rights of inspection pursuant to this Agreement, which Reports may be distributed to
the Lenders by the Administrative Agent.




          “Required Lenders” means, at any time, one (or, if there are four or less Lenders
under this Agreement, three Lenders) or more Lenders having Credit Exposure and unused Revolving
Commitments representing at least 51% of the sum of the total Credit Exposure and unused Revolving
Commitments at such time.







26









 








          “Requirement of Law” means, as to any Person, the Certificate of Incorporation and By
Laws or other organizational or governing documents of such Person, and any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental Authority, in each
case applicable to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.




          “Reserves” means any and all reserves which the Administrative Agent deems necessary,
in its Permitted Discretion, to maintain (including, without limitation, reserves for accrued and
unpaid interest on the Secured Obligations, Banking Services Reserves, volatility reserves,
reserves for rent at locations leased by any Borrower and for consignee’s, warehousemen’s and
bailee’s charges, reserves for dilution of Accounts, reserves for Inventory shrinkage, reserves for
customs charges and shipping charges related to any Inventory in transit, reserves for Swap
Obligations (provided that the Administrative Agent may maintain reserves for all or any
part of the Swap Obligations that form a part of the Secured Obligations only at such times that
(a) Availability is less than $75,000,000 or (b) the aggregate exposure of the Lender Parties with
respect to Swap Obligations of the Borrowers is $25,000,000 or more), reserves for contingent
liabilities (including Environmental Liabilities) of any Borrower, reserves for uninsured losses of
any Borrower, reserves for uninsured, underinsured, un-indemnified or under-indemnified liabilities
or potential liabilities with respect to any litigation, reserves for taxes, fees, assessments, and
other governmental charges and reserves with respect to the Company’s obligations in respect of the
call options embedded in the Convertible Notes but only to the extent such obligations are not
offset by amounts receivable under the Company Call Options) with respect to the Collateral or any
Borrower; provided that “Reserves” shall not be maintained as a result of the
mark-to-market requirements with respect to the Company Call Options and Dealer Counterparty
Warrants.




          “Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the Company or any
Subsidiary, or any payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement, acquisition,
conversion, cancellation or termination of any such Equity Interests in the Company or the
Convertible Notes or any option, warrant or other right to acquire any such Equity Interests in the
Company.




          “Revolving Borrowing” means a Revolving Loan of the same Type, made, converted or
continued on the same date and, in the case of a Eurodollar Loan, as to which a single Interest
Period is in effect.




          “Revolving Commitment” means, with respect to each Lender, the commitment, if any, of
such Lender to make Revolving Loans and to acquire participations in Letters of Credit and
Swingline Loans hereunder, expressed as an amount representing the maximum possible aggregate
amount of such Lender’s Revolving Exposure hereunder, as such commitment may be reduced or
increased from time to time pursuant to (a) Section 2.09 and (b) assignments by or to such
Lender pursuant to Section 9.04. The initial amount of each Lender’s Revolving Commitment
is set forth on the Revolving Commitment Schedule, or in the Assignment and Assumption
pursuant to which such Lender shall have assumed its Revolving Commitment, as applicable. The
initial aggregate amount of the Lenders’ Revolving Commitments is $200,000,000.




          “Revolving Commitment Schedule” means the Schedule attached hereto identified as such.




          “Revolving Exposure” means, with respect to any Lender at any time, the sum of (a) the
outstanding principal amount of Revolving Loans of such Lender at such time, plus (b) an
amount equal





27









 







to the Applicable Percentage of the aggregate principal amount of the Swingline Loans
of such Lender at such time, plus (c) an amount equal to the Applicable Percentage of the LC Exposure of
such Lender at such time.




          “Revolving Lender” means, as of any date of determination, a Lender with a Revolving
Commitment or, if the Revolving Commitments have terminated or expired, a Lender with Revolving
Exposure.




          “Revolving Loan” means a Loan made pursuant to Section 2.01.




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




          “SEC” means the Securities and Exchange Commission.




          “Secured Obligations” means all Obligations, together with all (a) Banking Services
Obligations and (b) Swap Obligations owing to one or more Lenders or their respective Affiliates;
provided that not later than 10 Business Days after any transaction relating to such Swap
Obligation is executed, the Lender or Affiliate of a Lender party thereto (other than JPMorgan
Chase) shall have delivered written notice to the Administrative Agent that such a transaction has
been entered into and that it constitutes a Secured Obligation entitled to the benefits of the
Collateral Documents.




          “Security Agreement” means that certain Security Agreement, dated as of the date
hereof, among the Borrowers and the Administrative Agent (for the benefit of the Lender Parties),
and any other security agreement entered into, after the date of this Agreement by any other
Borrower (as required by this Agreement or any other Loan Document), or any other Person, as the
same may be amended, restated or otherwise modified from time to time.




          “Settlement” has the meaning assigned to such term in Section 2.05(c).




          “Settlement Date” has the meaning assigned to such term in Section 2.05(c).




          “Significant Subsidiary” shall mean each domestic Subsidiary of the Company that:





     (a) is listed on Schedule 1.01(c);




     (b) accounted for at least 5% of consolidated revenues of the Company and the
Subsidiaries from sales to third parties for the four Fiscal Quarters of the Company ending
on the last day of the last Fiscal Quarter of the Company immediately preceding the date as
of which any such determination is made; or




     (c) has assets (other than assets which are eliminated in consolidation) which
represent at least 5% of the consolidated assets of the Company and the Subsidiaries as of
the last day of the last Fiscal Quarter of the Company immediately preceding the date as of
which any such determination is made,


all of which, with respect to paragraphs (b) and (c), shall be as included in the
consolidated financial statements of the Company for the applicable fiscal period, or as of the
date, in question.




          “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus the aggregate of the





28









 







maximum reserve percentages (expressed as a decimal and including any marginal, special, emergency
or
supplemental reserves) as in effect on any date of determination and established by the Board
or other Governmental Authority to which the Administrative Agent is subject with respect to the
Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities”
in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to
such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any Lender under such Regulation D or any
comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.




          “Subordinated Indebtedness” of a Person means any Indebtedness of such Person the
payment of which is subordinated to payment of the Obligations to the written satisfaction of the
Administrative Agent.




          “Subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity the accounts of
which would be consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50% of the equity or
more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as
of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by
the parent and one or more subsidiaries of the parent. Unless otherwise expressly provided, all
references herein to “Subsidiary” means any direct or indirect subsidiary of the Company or any
other Borrower, as applicable.




          “Swap Agreement” means any agreement (including each Commodity Swap Agreement) with
respect to any swap, forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any combination of these
transactions; provided that Swap Agreements shall not include (i) any phantom stock or
similar plan providing for payments only on account of services provided by current or former
directors, officers, employees or consultants of the Borrowers or the Subsidiaries, or (ii) any
Dealer Counterparty Warrants or Company Call Options.




          “Swap Obligations” of a Person means any and all obligations of such Person, whether
absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and substitutions therefor), under
(a) any and all Swap Agreements, and (b) any and all cancellations, buy backs, reversals,
terminations or assignments of any Swap Agreement transaction.




          “Swingline Exposure” means, at any time, the sum of the aggregate amount of all
outstanding Swingline Loans at such time. The Swingline Exposure of any Revolving Lender at any
time shall be its Applicable Percentage of the total Swingline Exposure at such time.




          “Swingline Lender” means JPMorgan Chase, in its capacity as lender of Swingline Loans
hereunder.




          “Swingline Loan” has the meaning assigned to such term in Section 2.05(a).





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          “Syndication Agent” means Bank of America, N.A., in its capacity as Syndication Agent,
and its successors and assigns in such capacity.




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




          “Test Period” means the most recent period of 12 consecutive full Fiscal Months
immediately preceding each date (taken as one accounting period) in respect of which the Company
has delivered the financial statements referred to in Section 5.01(c).




          “Total Indebtedness” means, at any date, the aggregate principal amount of all
Indebtedness of the Company and its Subsidiaries at such date, determined on a consolidated basis
in accordance with GAAP.




          “Total Revolving Commitment” means, at any time, the sum of the Revolving Commitments
at such time.




          “Transactions” means the execution, delivery and performance by the Borrowers of this
Agreement, the borrowing of Loans and other credit extensions, the use of the proceeds thereof and
the issuance of Letters of Credit hereunder.




          “Trochus” means Trochus Insurance Company, Ltd., a Bermuda entity.




          “Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the
Adjusted LIBO Rate, the Alternate Base Rate.




          “UCC” means the Uniform Commercial Code as in effect from time to time in the State of
New York or any other state the laws of which are required to be applied in connection with the
issue of perfection of security interests.




          “United States” or “U.S.” means the United States of America.




          “Unliquidated Obligations” means, at any time, any Secured Obligations (or portion
thereof) that are contingent in nature or unliquidated at such time, including any Secured
Obligation that is: (i) an obligation to reimburse a bank for drawings not yet made under a letter
of credit issued by it; (ii) any other obligation (including any guarantee) that is contingent in
nature at such time; or (iii) an obligation to provide collateral to secure any of the foregoing
types of obligations.




          “VEBA Benefit” means any non-cash benefit or gain recorded in the income statement of
the Borrowers related to the VEBA Trusts.




          “VEBA Expense” means any non-cash expense recorded in the income statement of the
Borrowers related to the VEBA Trusts.




          “VEBA Trusts” means, individually or collectively as the context may require, (i) the
trust that provides benefits for certain eligible retirees of Kaiser Aluminum & Chemical
Corporation represented by the USW, the International Union, United Automobile, Aerospace and
Agricultural Implement Workers of America and its Local 1186, the International Association of
Machinists and





30









 







Aerospace Workers, the International Chemical Workers Union Council of the United
Food and Commercial Workers, and the Paper, Allied-Industrial, Chemical and Energy Workers
International Union, AFL-CIO, CLC and their surviving spouses and eligible dependents and (ii) the
trust that provides
benefits to certain other eligible retirees and their surviving spouses and eligible
dependents of Kaiser Aluminum & Chemical Corporation who were salaried employees.




          “Warrant Agreements” means the documentation evidencing the Dealer Counterparty
Warrants.




          “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.




          SECTION 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans and Borrowings may be classified and referred to by Type (e.g., a
“Eurodollar Loan” or a “Eurodollar Borrowing”).




          SECTION 1.03. Terms Generally. 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 (a) any definition of or reference to any agreement, instrument or other
document herein 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), (b) any reference herein to any Person
shall be construed to include such Person’s successors and assigns, (c) the words “herein”,
“hereof” and “hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Agreement; (e) 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; and (f) any
reference to any law or regulation herein shall, unless otherwise specified, refer to such law or
regulation as amended, modified or supplemented from time to time, together with all rules,
regulations and interpretations thereunder or related thereto. A Default or Event of Default shall
be deemed to exist at all times during the period commencing on the date that such Default or Event
of Default occurs to the date on which such Default or Event of Default is waived by the
Administrative Agent pursuant to this Agreement or, in the case of a Default, is cured within any
period of cure expressly provided for in this Agreement; and an Event of Default shall “continue”
or be “continuing” until such Event of Default has been waived by the Administrative Agent.



          SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided herein, all
terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect
from time to time; provided that, if the Borrower Representative notifies the
Administrative Agent that the Borrowers request an amendment to any provision hereof to eliminate
the effect of any change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the Borrower
Representative 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 change in GAAP or in
the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect
and applied immediately before such change shall have become







31









 







effective until such notice shall
have been withdrawn or such provision amended in accordance herewith. Notwithstanding the
foregoing, all financial statements delivered hereunder shall be prepared, and all financial
covenants herein shall be calculated, without giving effect to any election under Accounting
Standards Codification 820-10 “Fair Value Measurements and Disclosures” (or any similar accounting
principle) permitting a Person to value its financial liabilities at the fair value thereof.



SECTION 1.05. Allocation of Loans and Applicable Percentages at the Effective Date.




          (a) The Borrowers, each Agent and each Lender agree that, effective at the Effective Date,
(i) this Agreement shall amend and restate in its entirety the Existing Credit Agreement, (ii) the
outstanding loans thereunder (and the participations in letters of credit and swingline loans
thereunder). shall be allocated among the Lenders in accordance with their respective Applicable
Percentages and (iii) the Security Agreement shall amend and reinstate in the entirety the Existing
Security and Pledge Agreement. Without limiting the foregoing, the Borrowers hereby ratify, confirm
and affirm in all respects the grant of security in the collateral as provided in the Existing
Security and Pledge Agreement to the extent it constitutes Collateral.




          (b) To facilitate the allocation described in paragraph (a), on the Effective Date,
(i) each Existing Lender shall be deemed to have funded, in accordance with the requirements of
Section 2.07(a), its respective Revolving Loans to the extent of its Existing Loans and
shall not be required to wire transfer funds in such amounts as provided in such Section; (ii) each
Existing Lender shall fund, in accordance with the requirements of Section 2.07(a), the
applicable Loans (in accordance with its Applicable Percentages) pursuant to the terms of this
Agreement to the extent that such Existing Lender’s Commitments exceed its Existing Loans; and
(iii) the Borrowers shall pay to each Existing Lender (A) an amount equal to the excess, if any, of
such Existing Lender’s Existing Loans over such Existing Lender’s Revolving Commitment and
(B) any other amounts with respect to the Existing Loans (including, without limitation, accrued
and unpaid interest and break funding payments) that would be payable to such Existing Lender
pursuant to the Existing Credit Agreements if all of such Existing Lender’s Existing Loans were
being repaid in full in cash on the Effective Date.




ARTICLE II




The Credits



          SECTION 2.01. Revolving Commitments. Subject to the terms and conditions set forth
herein, each Lender agrees to make Revolving Loans to the Borrowers from time to time during the
Availability Period in an aggregate principal amount that will not result in (a) such Lender’s
Revolving Exposure exceeding such Lender’s Revolving Commitment (b) the total Revolving Exposures
exceeding the lesser of (i) the Total Revolving Commitments or (ii) the Borrowing Base, subject to
the Administrative Agent’s authority, in its sole discretion, to make Protective Advances pursuant
to the terms of Section 2.04. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrowers may borrow, prepay and reborrow Revolving Loans.




          SECTION 2.02. Loans and Borrowings. (a) Each Loan (other than a Protective Advance
or Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the same Type made
by the Lenders ratably in accordance with their respective Revolving Commitments. Any Protective
Advance and any Swingline Loan shall be made in accordance with the procedures set forth in
Sections 2.04 and 2.05, respectively.





32









 








          (b) Subject to Section 2.14, each Revolving Borrowing shall be comprised entirely of
ABR Loans or Eurodollar Loans as the Borrower Representative may request in accordance herewith;
provided that all Borrowings made on the Effective Date must be made as ABR Borrowings but
may be converted into Eurodollar Borrowings in accordance with Section 2.08. Each Swingline
Loan shall be an ABR Loan. Each Lender at its option may make any Eurodollar Loan by causing any
domestic or foreign
branch or Affiliate of such Lender to make such Loan; provided that any exercise of
such option shall not affect the obligation of the Borrowers to repay such Loan in accordance with
the terms of this Agreement.




          (c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing
shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than
$5,000,000. ABR Borrowings and Swingline Loans may be in any amount. Borrowings of more than one
Type may be outstanding at the same time; provided that there shall not at any time be more
than a total of 10 Eurodollar Borrowings outstanding.




          (d) Notwithstanding any other provision of this Agreement, the Borrower Representative shall
not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest
Period requested with respect thereto would end after the Maturity Date.




          SECTION 2.03. Requests for Revolving Borrowings. To request a Revolving Borrowing,
the Borrower Representative shall notify the Administrative Agent of such request either in writing
(delivered by hand or facsimile) in a form approved by the Administrative Agent and signed by the
Borrower Representative or by telephone (a) in the case of a Eurodollar Borrowing, not later than
12:00 noon, Chicago time, three Business Days before the date of the proposed Borrowing or (b) in
the case of an ABR Borrowing, not later than 12:00 noon, Chicago time, on the date of the proposed
Borrowing; provided that any such notice of an ABR Borrowing to finance the reimbursement
of an LC Disbursement as contemplated by Section 2.06(e) may be given not later than 9:00
a.m., Chicago time, on the date of the proposed Borrowing. Each such telephonic Borrowing Request
shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the
Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent
and signed by the Borrower Representative. Each such telephonic and written Borrowing Request
shall specify the following information in compliance with Section 2.01:





     (i) the name of the applicable Borrower;




     (ii) the aggregate amount of the requested Borrowing and a breakdown of the separate
wires comprising such Borrowing;




     (iii) the date of such Borrowing, which shall be a Business Day;




     (iv) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and




     (v) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of the term
“Interest Period.”


If no election as to the Type of Revolving Borrowing is specified, then the requested Revolving
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any
requested Eurodollar Borrowing, then the applicable Borrower(s) shall be deemed to have selected an
Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in
accordance with this Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.





33









 








          SECTION 2.04. Protective Advances. (a) Subject to the limitations set forth below,
the Administrative Agent is authorized by the Borrowers and the Lenders, from time to time in the
Administrative Agent’s sole discretion (but shall have absolutely no obligation to), to make Loans
to the Borrowers, on behalf of all Lenders, which the Administrative Agent, in its Permitted
Discretion, deems necessary or desirable (i) to preserve or protect the Collateral, or any portion
thereof, (ii) to enhance the
likelihood of, or maximize the amount of, repayment of the Loans and other Obligations, or
(iii) to pay any other amount chargeable to or required to be paid by the Borrowers pursuant to the
terms of this Agreement, including payments of reimbursable expenses (including costs, fees, and
expenses as described in Section 9.03) and other sums payable under the Loan Documents (any
of such Loans are herein referred to as “Protective Advances”); provided that the
aggregate amount of Protective Advances outstanding at any time shall not at any time exceed 10% of
the Total Revolving Commitment; and provided, further, that the aggregate amount of
outstanding Protective Advances plus the aggregate Revolving Exposure shall not exceed the Total
Revolving Commitment. Protective Advances may be made even if the conditions precedent set forth
in Section 4.02 have not been satisfied. The Protective Advances shall be secured by the
Liens in favor of the Administrative Agent (for the benefit of the Lender Parties) in and to the
Collateral and shall constitute Obligations hereunder. All Protective Advances shall be ABR
Borrowings. The Administrative Agent’s authorization to make Protective Advances may be revoked at
any time by the Required Lenders. Any such revocation must be in writing and shall become
effective prospectively upon the Administrative Agent’s receipt thereof. At any time that there is
sufficient Availability and the conditions precedent set forth in Section 4.02 have been
satisfied, the Administrative Agent may request the Revolving Lenders to make a Revolving Loan to
repay a Protective Advance. At any other time the Administrative Agent may require the Lenders to
fund their risk participations described in Section 2.04(b).




          (b) Upon the making of a Protective Advance by the Administrative Agent (whether before or
after the occurrence of a Default), each Lender shall be deemed, without further action by any
party hereto, to have unconditionally and irrevocably purchased from the Administrative Agent
without recourse or warranty, an undivided interest and participation in such Protective Advance in
proportion to its Applicable Percentage. From and after the date, if any, on which any Lender is
required to fund its participation in any Protective Advance purchased hereunder, the
Administrative Agent shall promptly distribute to such Lender, such Lender’s Applicable Percentage
of all payments of principal and interest and all proceeds of Collateral received by the
Administrative Agent in respect of such Protective Advance.




          SECTION 2.05. Swingline Loans. (a) The Administrative Agent, the Swingline Lender and
the Revolving Lenders agree that in order to facilitate the administration of this Agreement and
the other Loan Documents, promptly after the Borrower Representative requests an ABR Borrowing, the
Swingline Lender may elect to have the terms of this Section 2.05(a) apply to such
Borrowing Request by advancing, on behalf of the Revolving Lenders and in the amount requested,
same day funds to the Borrowers, on the applicable Borrowing date to the Funding Account(s) (each
such Loan made solely by the Swingline Lender pursuant to this Section 2.05(a) is referred
to in this Agreement as a “Swingline Loan”), with settlement among them as to the Swingline
Loans to take place on a periodic basis as set forth in Section 2.05(c). Each Swingline
Loan shall be subject to all the terms and conditions applicable to other ABR Loans funded by the
Revolving Lenders, except that all payments thereon shall be payable to the Swingline Lender solely
for its own account. In addition, the Borrowers hereby authorize the Swingline Lender to, and the
Swingline Lender shall, subject to the terms and conditions set forth herein (but without any
further written notice from the Borrowers required), not later than 2:00 p.m., Chicago time, on
each Business Day, make available to the Borrowers by means of a credit to the Funding Account, the
proceeds of a Swingline Loan to the extent necessary to pay items to be drawn on any cash
management account of the Borrowers that day (as determined based on notice from the Administrative





34











 




Agent). The aggregate amount of Swingline Loans outstanding at any time shall not exceed
$20,000,000. The Swingline Lender shall not make any Swingline Loan if the requested Swingline
Loan exceeds Availability (before giving effect to such Swingline Loan). All Swingline Loans shall
be ABR Borrowings.




          (b) Upon the making of a Swingline Loan (whether before or after the occurrence of a Default
and regardless of whether a Settlement has been requested with respect to such Swingline Loan),
each Revolving Lender shall be deemed, without further action by any party hereto, to have
unconditionally and irrevocably purchased from the Swingline Lender without recourse or warranty,
an undivided interest and participation in such Swingline Loan in proportion to its Applicable
Percentage of the Total Revolving Commitment. The Swingline Lender may, at any time, require the
Revolving Lenders to fund their participations. From and after the date, if any, on which any
Revolving Lender is required to fund its participation in any Swingline Loan purchased hereunder,
the Administrative Agent shall promptly distribute to such Lender, such Lender’s Applicable
Percentage of all payments of principal and interest and all proceeds of Collateral received by the
Administrative Agent in respect of such Loan.




          (c) The Administrative Agent, on behalf of the Swingline Lender, shall request settlement (a
“Settlement”) with the Revolving Lenders on at least a weekly basis or on any date that the
Administrative Agent elects, by notifying the Revolving Lenders of such requested Settlement by
facsimile, telephone, or e-mail no later than 12:00 noon, Chicago time, on the date of such
requested Settlement (the “Settlement Date”). Each Revolving Lender (other than the
Swingline Lender, in the case of the Swingline Loans) shall transfer the amount of such Revolving
Lender’s Applicable Percentage of the outstanding principal amount of the applicable Loan with
respect to which Settlement is requested to the Administrative Agent, to such account of the
Administrative Agent as the Administrative Agent may designate, not later than 2:00 p.m., Chicago
time, on such Settlement Date. Settlements may occur during the existence of a Default and whether
or not the applicable conditions precedent set forth in Section 4.02 have then been
satisfied. Such amounts transferred to the Administrative Agent shall be applied against the
amounts of the Swingline Lender’s Swingline Loans and, together with Swingline Lender’s Applicable
Percentage of such Swingline Loan, shall constitute Revolving Loans of such Revolving Lenders,
respectively. If any such amount is not transferred to the Administrative Agent by any Revolving
Lender on such Settlement Date, the Swingline Lender shall be entitled to recover such amount on
demand from such Lender together with interest thereon as specified in Section 2.07.




          SECTION 2.06. Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, the Borrower Representative may request the issuance of Letters of
Credit for its own account or for the account of another Borrower, in a form reasonably acceptable
to the Administrative Agent and the Issuing Bank, at any time and from time to time during the
Availability Period. In the event of any inconsistency between the terms and conditions of this
Agreement and the terms and conditions of any form of letter of credit application or other
agreement submitted by the Borrowers to, or entered into by the Borrowers with, the Issuing Bank
relating to any Letter of Credit, the terms and conditions of this Agreement shall control.




          (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or extension of an
outstanding Letter of Credit), the Borrower Representative shall hand deliver or facsimile (or
transmit by electronic communication, if arrangements for doing so have been approved by the
Issuing Bank) to the Issuing Bank and the Administrative Agent (prior to 1:00 p.m., Chicago time,
at least three Business Days (or such shorter period as may be agreed by the Borrower
Representative and the Issuing Bank) prior to the requested date of issuance, amendment, renewal or
extension) a notice requesting the issuance of a Letter






35









 







of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day),
the date on which such Letter of Credit is to expire (which shall comply with paragraph (c)
of this Section), the amount of such Letter of Credit, the name and address of the beneficiary
thereof and such other information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit. If requested by the Issuing Bank, the applicable Borrower also shall submit a
letter of credit application on the Issuing Bank’s standard form in connection with any request for
a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and
upon issuance, amendment, renewal or extension of each Letter of Credit the Borrowers shall be
deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or
extension (i) the LC Exposure shall not exceed $60,000,000 and (ii) the total Revolving Exposures
shall not exceed the lesser of (A) the Total Revolving Commitment and (B) the Borrowing Base then
in effect.




          (c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date one year after the date of the issuance of such Letter of
Credit (or, in the case of any renewal or extension thereof, one year after such renewal or
extension) and (ii) the date that is five Business Days prior to the Maturity Date.




          (d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action on the part of the
Issuing Bank or the Revolving Lenders, the Issuing Bank hereby grants to each Revolving Lender, and
each Revolving Lender hereby acquires from the Issuing Bank, a participation in such Letter of
Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn
under such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving
Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the
account of the Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement made by
the Issuing Bank and not reimbursed by the Borrowers on the date due as provided in paragraph
(e) of this Section, or of any reimbursement payment required to be refunded to the Borrowers
for any reason. Each Revolving Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever, including any amendment,
renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or
reduction or termination of the Revolving Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever.




          (e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect of
a Letter of Credit, the Borrowers shall reimburse such LC Disbursement by paying to the
Administrative Agent an amount equal to such LC Disbursement not later than 3:00 p.m., Chicago
time, on the Business Day that the Borrower Representative receives notice of such LC Disbursement,
if such notice is received prior to 1:00 p.m., Chicago time, on such Business Day (or, if the
Borrower Representative receives notice of such LC Disbursement after 1:00 p.m., Chicago time, on
any Business Day, by 1:00 p.m., Chicago time, on the next following Business Day); provided
that the Borrowers may, subject to the conditions to borrowing set forth herein, request in
accordance with Section 2.03 or 2.05 that such payment be financed with an ABR
Borrowing or Swingline Loan in an equivalent amount. Unless the Borrowers otherwise specify, each
such payment automatically will be financed with a Swingline Loan in an equivalent amount, subject
to the satisfaction of the conditions set forth in Section 4.02. To the extent any such
payment is financed with an ABR Borrowing or a Swingline Loan, the Borrowers’ obligation to make
such payment shall be discharged and replaced by the resulting ABR Borrowing or Swingline Loan (or
the applicable portion thereof). If the Borrowers fail to make such payment when due, the
Administrative Agent shall notify each Revolving Lender of the applicable LC Disbursement, the
payment then due from the Borrowers in respect thereof and such Lender’s Applicable Percentage






36









 







thereof. Promptly following receipt of such notice, each Revolving Lender shall pay to the
Administrative Agent an amount equal to its Applicable Percentage of the payment then due from the
Borrowers, in the same manner as provided in Section 2.07 with respect to Loans made by
such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment
obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the
Issuing Bank the amounts so received by it from the Revolving Lenders. Promptly following receipt
by the Administrative Agent of any payment from the Borrowers pursuant to this paragraph, the
Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that
Revolving Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then
to such Revolving Lenders and the Issuing Bank as their interests may appear. Any payment made by
a Revolving Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement
(other than the funding of ABR Loans or a Swingline Loan as contemplated above) shall not
constitute a Loan and shall not relieve the Borrowers of their obligation to reimburse such LC
Disbursement.




          (f) Obligations Absolute. The Borrowers’ joint and several obligation to reimburse
LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under
any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability
of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in
any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by
the Issuing Bank under a Letter of Credit against presentation of a draft or other document that
does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of
this Section, constitute a legal or equitable discharge of, or provide a right of setoff against,
the Borrowers’ obligations hereunder. Neither the Administrative Agent, the Revolving Lenders nor
the Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or
failure to make any payment thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in transmission or
delivery of any draft, notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the Issuing Bank;
provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the
Borrowers to the extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrowers to the extent permitted by applicable law)
suffered by any Borrower that are caused by the Issuing Bank’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of Credit comply with the
terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or
willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent
jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on their face to be in substantial
compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or refuse to accept and
make payment upon such documents if such documents are not in strict compliance with the terms of
such Letter of Credit.




          (g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt
thereof, examine all documents purporting to represent a demand for payment under a Letter of
Credit. The Issuing Bank shall promptly notify the Administrative Agent and the applicable
Borrower by telephone (confirmed by facsimile) of such demand for payment and whether the Issuing
Bank has made






37









 







or will make an LC Disbursement thereunder; provided that any failure to give or delay
in giving such notice shall not relieve the Borrowers of their obligation to reimburse the Issuing
Bank and the Revolving Lenders with respect to any such LC Disbursement.




          (h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then,
unless the Borrowers shall reimburse such LC Disbursement in full on the date such LC Disbursement
is made, the unpaid amount thereof shall bear interest, for each day from and including the date
such LC Disbursement is made to but excluding the date that the Borrowers reimburse such LC
Disbursement, at the rate per annum then applicable to ABR Loans; provided that if the
Borrowers fail to reimburse such LC Disbursement when due pursuant to paragraph (e) of this
Section, then Section 2.13(d) shall apply. Interest accrued pursuant to this paragraph
shall be for the account of the Issuing Bank, except that interest accrued on and after the date of
payment by any Revolving Lender pursuant to paragraph (e) of this Section to reimburse the
Issuing Bank shall be for the account of such Revolving Lender to the extent of such payment.




          (i) Replacement of the Issuing Bank. The Issuing Bank may be replaced at any time by
written agreement among the Borrower Representative, the Administrative Agent, the Issuing Bank to
be replaced and the successor Issuing Bank. The Administrative Agent shall notify the Revolving
Lenders of any such replacement of the Issuing Bank. At the time any such replacement shall become
effective, the Borrowers shall pay all unpaid fees accrued for the account of the replaced Issuing
Bank pursuant to Section 2.12(b). From and after the effective date of any such
replacement, (i) the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and
(ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to
any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context
shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall
remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank
under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but
shall not be required to issue additional Letters of Credit.




          (j) Cash Collateralization. If any Event of Default shall occur and be continuing,
on the Business Day that the Borrower Representative receives notice from the Administrative Agent
or the Required Lenders demanding the deposit of cash collateral pursuant to this paragraph, the
Borrowers shall deposit in an account with the Administrative Agent, in the name of the
Administrative Agent (for the benefit of the Lender Parties) (the “LC Collateral Account”), an
amount in cash equal to 105% of the Letter of Credit Shortfall as of such date; provided that the
obligation to deposit such cash collateral shall become effective immediately, and such deposit
shall become immediately due and payable, without demand or other notice of any kind, upon the
occurrence of any Event of Default with respect to any Borrower described in paragraph (h) or (i)
of Article VII. Such deposit shall be held by the Administrative Agent as collateral for the
payment and performance of the Secured Obligations. The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such account and the
Borrowers hereby grant the Administrative Agent (for the benefit of the Lender Parties) a security
interest in the LC Collateral Account. Other than any interest earned on the investment of such
deposits, which investments shall be in the form of Permitted Investments selected by the Company
and at the Borrowers’ risk and expense, such deposits shall not bear interest. Interest or
profits, if any, on such investments shall accumulate in such account. Moneys in such account
shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Borrowers for the LC Exposure at such time or,
if the maturity of the Loans has been accelerated (but subject to the consent of the Required
Lenders), be applied to satisfy other Secured Obligations. If the Borrowers are required to
provide an amount of cash collateral






38









 







hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to the Borrowers within three Business Days after all such
Events of Default have been cured or waived.




          (k) Existing Letters of Credit. On the Effective Date, each Existing Letter of
Credit shall, automatically and without further action, be deemed to be a Letter of Credit that has
been issued hereunder as of the Effective Date for all purposes hereunder and under the other Loan
Documents. Without limiting the foregoing (i) each such Existing Letter of Credit shall be
included in the calculation of LC Exposure, (ii) all liabilities of the Borrowers with respect to
such Existing Letters of Credit shall constitute Obligations and (iii) each Lender shall have
reimbursement obligations with respect to such Existing Letters of Credit as provided in this
Section 2.06. Any Existing Letter of Credit that is renewed or extended shall be issued by
the Issuing Bank.




          SECTION 2.07. Funding of Borrowings. (a) Each Lender shall make each Loan to be
made by it hereunder on the proposed date thereof by wire transfer of immediately available funds
by 3:00 p.m., Chicago time, to the account of the Administrative Agent most recently designated by
it for such purpose by notice to the Lenders in an amount equal to such Lender’s Applicable
Percentage; provided that Swingline Loans shall be made as provided in Section
2.05. The Administrative Agent will make such Loans available to the Borrower Representative
by promptly crediting the amounts so received, in like funds, to the Funding Account(s);
provided that ABR Loans made to finance the reimbursement of (i) an LC Disbursement as
provided in Section 2.06(e) shall be remitted by the Administrative Agent to the Issuing
Bank and (ii) a Protective Advance shall be retained by the Administrative Agent.




          (b) Unless the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing 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 paragraph (a) of this Section and
may, in reliance upon such assumption, make available to the applicable 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 Borrowers severally agree
to pay to the Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available to the applicable
Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of
such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank compensation, or (ii)
in the case of the Borrowers, the interest rate applicable to ABR Loans. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included
in such Borrowing.




          SECTION 2.08. Interest Elections. (a) Each Revolving Borrowing initially shall be
of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar
Borrowing, shall have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Borrower Representative may elect to convert such Borrowing to a Borrowing of a
different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect
Interest Periods therefor, all as provided in this Section. The Borrower Representative may elect
different options with respect to different portions of the affected Borrowing, in which case each
such portion shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.
This Section shall not apply to Swingline Borrowings or Protective Advances, which may not be
converted or continued.







39









 








          (b) To make an election pursuant to this Section, the Borrower Representative shall notify
the Administrative Agent of such election by telephone by the time that a Borrowing Request would
be required under Section 2.03 if the Borrowers were requesting a Borrowing of the Type
resulting from such election to be made on the effective date of such election. Each such
telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or facsimile to the Administrative Agent of a written Interest Election Request in a form
approved by the Administrative Agent and signed by the Borrower Representative.




          (c) Each telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.02:





     (i) the Borrower and the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Borrowing (in which case the information
to be specified pursuant to paragraphs (iii) and (iv) below shall be
specified for each resulting Borrowing);




     (ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;




     (iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and




     (iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term “Interest Period”.


If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an
Interest Period, then the Borrowers shall be deemed to have selected an Interest Period of one
month’s duration.




          (d) Promptly following receipt of an Interest Election Request, the Administrative Agent
shall advise each Lender of the details thereof and of such Lender’s portion of each resulting
Borrowing.




          (e) If the Borrower Representative fails to deliver a timely Interest Election Request with
respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest Period such
Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof,
if an Event of Default has occurred and is continuing and the Administrative Agent, at the request
of the Required Lenders, so notifies the Borrower Representative, then, so long as an Event of
Default is continuing, (i) no outstanding Revolving Borrowing may be converted to or continued as a
Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR
Borrowing at the end of the Interest Period applicable thereto.




          SECTION 2.09. Termination of Revolving Commitments; Increase in Revolving
Commitments. (a) Unless previously terminated, all the Revolving Commitments shall terminate
on the Maturity Date.




          (b) The Borrowers may at any time terminate the Revolving Commitments upon (i) the payment in
full in cash of all outstanding Loans and LC Disbursements, together with accrued and unpaid
interest thereon, (ii) the cancellation and return of all outstanding Letters of Credit (or
alternatively, with respect to each such Letter of Credit, deposit in the LC Collateral Account
cash equal to 105% of the LC






40









 







Exposure as of such date in accordance with Section 2.06(j) (or, with the consent of
the Administrative Agent and the Issuing Bank, a back-up standby letter of credit equal to 105% of
the LC Exposure as of such date or the inclusion of such Letters of Credit in a credit facility
that refinances the Obligations outstanding under this Agreement)), (iii) the payment in full in
cash of the accrued and unpaid fees, and (iv) the payment in full in cash of all reimbursable
expenses and other Secured Obligations (other than Unliquidated Obligations) together with accrued
and unpaid interest thereon.




          (c) The Borrower Representative shall notify the Administrative Agent of any election to
terminate the Revolving Commitments under paragraph (b) of this Section at least two
Business Days prior to the effective date of such termination, specifying such election and the
effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall
advise the Lenders of the contents thereof. Each notice delivered by the Borrower Representative
pursuant to this Section shall be irrevocable; provided that a notice of termination of the
Revolving Commitments delivered by the Borrower Representative may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case such notice may be
revoked by the Borrower Representative (by notice to the Administrative Agent on or prior to the
specified effective date) if such condition is not satisfied. Any termination of the Revolving
Commitments shall be permanent.




          (d) The Borrowers shall have the right to increase the Total Revolving Commitment by
obtaining additional Revolving Commitments, either from one or more of the Lenders or another
lending institution provided that (i) any such request for an increase shall be in a minimum amount
of $10,000,000 or in an integral multiple of $5,000,000 in excess thereof, (ii) the Borrower
Representative, on behalf of the Borrower, may make a maximum of five such requests, (iii) the
Administrative Agent has approved the identity of any such new Lender, such approval not to be
unreasonably withheld, (iv) any such new Lender assumes all of the rights and obligations of a
“Lender” hereunder, (v) any such additional Revolving Commitments shall be on the same terms as the
other Revolving Commitments and (vi) the procedures described in Section 2.09(e) have been
satisfied.




          (e) Any amendment hereto for such an increase or addition shall be in form and substance
satisfactory to the Administrative Agent and shall only require the written signatures of the
Administrative Agent, the Borrowers and the Lender(s) being added or increasing their Revolving
Commitment, subject only to the approval of all Lenders if any such increase would cause the Total
Revolving Commitment to exceed $250,000,000. As a condition precedent to such an increase, the
Borrower Representative shall deliver to the Administrative Agent a certificate of each Borrower
(with sufficient copies for each Lender) signed by an authorized officer of such Borrower (i)
certifying and attaching the resolutions adopted by such Borrower approving or consenting to such
increase, and (ii) in the case of the Borrowers, certifying that, before and after giving effect to
such increase, (A) the representations and warranties contained in Article III and the
other Loan Documents are true and correct in all material respects (provided that such
representations and warranties shall be true in all respects if they are already qualified by a
materiality standard), 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 (B) no Default exists.




          (f) Within a reasonable time after the effective date of any increase, the Administrative
Agent shall, and is hereby authorized and directed to, revise the Revolving Commitment
Schedule to reflect such increase and shall distribute such revised Revolving Commitment
Schedule to each of the Lenders and the Borrowers, whereupon such revised Revolving
Commitment Schedule shall replace the then current Revolving Commitment Schedule and
become part of this Agreement. On the Business Day following any such increase, all outstanding
ABR Loans shall be reallocated among the Lenders (including any newly added Lenders) in accordance
with the Lenders’ respective revised Applicable






41









 







Percentages. Eurodollar Loans shall not be reallocated among the Lenders prior to the
expiration of the applicable Interest Period in effect at the time of any such increase.




          SECTION 2.10. Repayment and Amortization of Loans; Evidence of Debt. (a) The
Borrowers hereby unconditionally promise to pay (i) to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Revolving Loan on the Maturity Date and (ii)
to the Administrative Agent the then unpaid amount of each Protective Advance on the earlier of the
Maturity Date and demand by the Administrative Agent.




          (b) On each Business Day during a Dominion Trigger Period, the Administrative Agent shall
apply an amount equal to the ledger balance in the Collection Deposit Account on such Business Day
or the immediately preceding Business Day (at the discretion of the Administrative Agent)
first, to prepay any Protective Advances that may be outstanding, pro rata; second,
to prepay the Swingline Loans; and third, pro rata, to prepay the Revolving Loans (without
a corresponding reduction in the Revolving Commitments) and if an Event of Default has occurred and
is continuing, deposit in the LC Collateral Account cash in an amount equal to 105% of the Letter
of Credit Shortfall Amount.




          (c) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrowers to such Lender resulting from each Loan made by such
Lender, including the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.




          (d) The Administrative Agent shall maintain accounts in which it shall record (i) the amount
of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable from the Borrowers
to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share thereof.




          (e) The entries made in the accounts maintained pursuant to paragraph (c) or
(d) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in any manner affect
the obligation of the Borrowers to repay the Loans in accordance with the terms of this Agreement.




          (f) Any Lender may request that Loans made by it be evidenced by a promissory note. In such
event, the Borrowers shall prepare, execute and deliver to such Lender a promissory note payable to
the order of such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after assignment pursuant
to Section 9.04) be represented by one or more promissory notes in such form payable to the
order of the payee named therein (or, if such promissory note is a registered note, to such payee
and its registered assigns).




          SECTION 2.11. Prepayment of Loans. (a) The Borrowers shall have the right at any
time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in
accordance with paragraph (e) of this Section.




          (b) In the event and on such occasion that the total Revolving Exposure exceeds the lesser of
(i) the Total Revolving Commitments and (ii) the Borrowing Base, the Borrowers shall promptly repay
the Revolving Loans, the LC Exposure and/or the Swingline Loans to the extent required to eliminate
such excess; provided that any such payments shall be applied first, to pay
outstanding






42









 







Protective Advances, second, to pay outstanding Swingline Loans, third, to pay
outstanding Revolving Loans, fourth, to pay LC Disbursements and fifth, if an Event
of Default shall have occurred and be continuing, to cash collateralize the Letters of Credit.




          (c) During a Dominion Trigger Period, in the event and on each occasion that any Net Proceeds
are received by or on behalf of any Borrower in respect of any Prepayment Event, the Borrowers
shall, immediately after such Net Proceeds are received by any Borrower, prepay the Obligations as
set forth in Section 2.11(d) below in an aggregate amount equal to 100% of such Net
Proceeds to the extent that such Obligations are then outstanding.




          (d) All such amounts pursuant to Section 2.11(c) shall be applied first, to
prepay any Protective Advances that may be outstanding, pro rata, and second, to prepay the
Revolving Loans (including Swing Line Loans) without a corresponding reduction in the Revolving
Commitment and thereafter, if an Event of Default shall have occurred and be continuing, to cash
collateralize any outstanding Letter of Credit.




          (e) The Borrower Representative shall notify the Administrative Agent (and, in the case of
prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by facsimile) of any
prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than 12:00
noon, Chicago time, three Business Days before the date of prepayment, or (ii) in the case of
prepayment of an ABR Borrowing, not later than 1:00 p.m., Chicago time, on the date of prepayment.
Each such notice shall be irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid; provided that, if a notice of
prepayment is given in connection with a conditional notice of termination of the Commitments as
contemplated by Section 2.09, then such notice of prepayment may be revoked if such notice
of termination is revoked in accordance with Section 2.09. Promptly following receipt of
any such notice relating to a Revolving Borrowing, the Administrative Agent shall advise the
Lenders of the contents thereof. Each partial prepayment of any Revolving Borrowing shall be in an
amount that would be permitted in the case of an advance of a Revolving Borrowing of the same Type
as provided in Section 2.02. Each prepayment of a Revolving Borrowing shall be applied
ratably to the Revolving Loans included in the prepaid Borrowing. Prepayments shall be accompanied
by accrued interest to the extent required by Section 2.13.




          SECTION 2.12. Fees. (a) The Borrowers agree to pay, from and including the
Effective Date to but excluding the date on which each Lender’s Revolving Commitment terminates,
to the Administrative Agent, for the pro rata account of each Lender (based upon
the average daily amount of the Available Revolving Commitment of each such Lender), a commitment
fee which shall accrue at a rate equal to 0.625% per annum of the average daily unused portion of
the Total Revolving Commitment during the calendar month in respect of which such commitment fee is
being paid; provided, however, such commitment fee shall accrue at a rate equal to
0.50% per annum if the average daily unused portion of the Total Revolving Commitment during the
calendar month in respect of which the commitment fee is being paid is less than 33.3% of the Total
Revolving Commitment. Accrued commitment fees shall be payable in arrears on the last day of each
calendar month and on the date on which the Revolving Commitments terminate, commencing on the
first such date to occur after the date hereof. All commitment fees shall be computed on the basis
of a year of 360 days and shall be payable for the actual number of days elapsed.




          (b) The Borrowers agree to pay (i) to the Administrative Agent for the account of each
Revolving Lender a participation fee with respect to its participations in Letters of Credit, which
shall accrue at the same Applicable Rate used to determine the interest rate applicable to
Eurodollar Loans on the average daily amount of such Lender’s LC Exposure (excluding any portion
thereof attributable to






43









 







unreimbursed LC Disbursements) during the period from and including the Effective Date to but
excluding the later of the date on which such Lender’s Revolving Commitment terminates and the date
on which such Revolving Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a
fronting fee, which shall accrue at the rate of 0.125% per annum on the average daily amount of the
LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during
the period from and including the Effective Date to but excluding the later of the date of
termination of the Revolving Commitments and the date on which there ceases to be any LC Exposure,
as well as the Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or
extension of any Letter of Credit or processing of drawings thereunder. Participation fees and
fronting fees accrued through and including the last day of each calendar month shall be payable on
the third Business Day following such last day, commencing on the first such date to occur after
the Effective Date; provided that all such fees shall be payable on the date on which the
Revolving Commitments terminate and any such fees accruing after the date on which the Commitments
terminate shall be payable on demand. Any other fees payable to the Issuing Bank pursuant to this
paragraph shall be payable within 14 days after demand. All participation fees and fronting fees
shall be computed on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed.




          (c) The Borrowers agree to pay to the Administrative Agent, for its own account, fees payable
in the amounts and at the times separately agreed upon between the Borrowers and the Administrative
Agent.




          (d) All fees payable hereunder shall be paid on the dates due, in immediately available
funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for
distribution, in the case of commitment fees and participation fees, to the Lenders. Fees paid
shall not be refundable under any circumstances.




          SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing (including each
Swingline Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate.




          (b) The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO
Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.




          (c) Each Protective Advance shall bear interest at the Alternate Base Rate plus the
Applicable Rate for Revolving Loans plus (if any Event of Default has occurred and is
continuing) 2%.




          (d) Notwithstanding the foregoing, during the occurrence and continuance of an Event of
Default, the Administrative Agent or the Required Lenders may, at their option, by notice to the
Borrower Representative (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 9.02 requiring the consent of “each Lender
affected thereby” for reductions in interest rates), declare that (i) all Loans shall bear interest
at 2% plus the rate otherwise applicable to such Loans as provided in the preceding
paragraphs of this Section or (ii) in the case of any other amounts outstanding hereunder, such
amount shall accrue at 2% plus the rate applicable to such fee or other obligation as
provided hereunder (or, if no such interest rate is specified, at a rate of interest equal to 2%
plus the rate otherwise applicable to ABR Loans).




          (e) Accrued interest on each Loan (for ABR Loans, accrued through the last day of the prior
calendar month) shall be payable in arrears on each Interest Payment Date for such Loan and upon
termination of the Revolving Commitments; provided that (i) interest accrued pursuant to
paragraph (d) of this Section shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior to the
end of the Availability Period), accrued






44









 







interest on the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior to
the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on
the effective date of such conversion.




          (f) All interest hereunder shall be computed on the basis of a year of 360 days, except that
interest computed by reference to the Alternate Base Rate shall be computed on the basis of a year
of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number
of days elapsed (including the first day, but excluding the last day). The applicable Alternate
Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and
such determination shall be conclusive absent manifest error.




          SECTION 2.14. Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:





     (a) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for ascertaining the
Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period; or




     (b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO
Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or
its Loan) included in such Borrowing for such Interest Period;


then the Administrative Agent shall give notice thereof to the Borrower Representative and the
Lenders by telephone or facsimile as promptly as practicable thereafter and, until the
Administrative Agent notifies the Borrower Representative and the Lenders that the circumstances
giving rise to such notice no longer exist, (i) any Interest Election Request that requests the
conversion of any Revolving Borrowing to, or continuation of any Revolving Borrowing as, a
Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a Eurodollar
Borrowing, such Borrowing shall be made as an ABR Borrowing.




          SECTION 2.15. Increased Costs. (a) If any Change in Law shall:





     (i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit extended by,
any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the
Issuing Bank; or




     (ii) impose on any Lender or the Issuing Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender (or any
participation therein) or any Letter of Credit (or any participation therein);


and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to
increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining
any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or
the Issuing Bank hereunder (whether of principal, interest or otherwise), then the Borrowers will
pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or the Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered.







45









 








          (b) If any Lender or the Issuing Bank determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such Lender’s or the
Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if
any, as a consequence of this Agreement or the Loans made by, or participations in Letters of
Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below
that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company
could have achieved but for such Change in Law (taking into consideration such Lender’s or the
Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company
with respect to capital adequacy), then from time to time the Borrowers will pay to such Lender or
the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such
reduction suffered.




          (c) A certificate of a Lender or the Issuing Bank setting forth the amount or amounts
necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower
Representative and shall be conclusive absent manifest error. The Borrowers shall pay such Lender
or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within 14
days after receipt thereof.




          (d) Failure or delay on the part of any Lender or the Issuing Bank to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right
to demand such compensation; provided that the Borrowers shall not be required to
compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs or
reductions incurred more than 180 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Borrower Representative of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or the Issuing Bank’s intention to claim
compensation therefor; provided, further, that, if the Change in Law giving rise to
such increased costs or reductions is retroactive, then the 180-day period referred to above shall
be extended to include the period of retroactive effect thereof.




          SECTION 2.16. Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar 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 Eurodollar Loan
other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow,
convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under Section 2.09(c) and is
revoked in accordance therewith), or (d) the assignment of any Eurodollar Loan other than on the
last day of the Interest Period applicable thereto as a result of a request by the Borrower
Representative pursuant to Section 2.19, then, in any such event, the Borrowers shall compensate
each Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar
Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by
such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate (without
including the Applicable Margin in such calculation) that would have been applicable to such Loan,
for the period from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the period that would
have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue
on such principal amount for such period at the interest rate which such Lender would bid were it
to bid, at the commencement of such period, for dollar deposits of a comparable amount and period
from other banks in the eurodollar market. A certificate of any Lender setting forth any amount or
amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the
Borrower Representative and shall be conclusive absent manifest error. The Borrowers shall pay
such Lender the amount shown as due on any such certificate within 14 days after receipt thereof.







46









 








          SECTION 2.17. Taxes. (a) Any and all payments by or on account of any obligation of
the Borrowers hereunder shall be made free and clear of and without deduction for any Indemnified
Taxes; provided that if the Borrowers shall be required to deduct any Indemnified Taxes
from such payments, then (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums payable under this
Section) the Administrative Agent, Lender or Issuing Bank (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (ii) the Borrowers shall
make such deductions and (iii) the Borrowers shall pay the full amount deducted to the relevant
Governmental Authority in accordance with Requirements of Law.




          (b) In addition, the Borrowers shall pay any Other Taxes to the relevant Governmental
Authority in accordance with Requirements of Law.




          (c) Without duplication of their obligation to pay amounts on account of Indemnified Taxes
and Other Taxes pursuant to Section 2.17(a) and (b), the Borrowers shall jointly
and severally indemnify the Administrative Agent, each Lender and the Issuing Bank, within 14 days
after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or with respect
to any payment by or on account of any obligation of the Borrowers hereunder (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section)
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. A certificate as to the amount of such payment or
liability delivered to the Borrower Representative by a Lender or the Issuing Bank, or by the
Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be
conclusive absent manifest error.




          (d) Each Lender and the Issuing Bank shall indemnify the Borrowers and the Administrative
Agent, within 10 days after written demand therefor, against any and all Taxes and any and all
related losses, claims, liabilities, penalties, interest and reasonable expenses (including the
fees, charges and disbursements of any counsel for the Borrower or the Administrative Agent)
incurred by or asserted against the Borrowers or the Administrative Agent by any Governmental
Authority as a result of the failure by such Lender or the Issuing Bank, as the case may be, to
deliver, or as a result of the inaccuracy, inadequacy or deficiency of, any documentation required
to be delivered to the Borrowers or the Administrative Agent pursuant to Section 2.17(f).
Each Lender and the Issuing Bank hereby authorizes the Administrative Agent to set off and apply
any and all amounts at any time owing to such Lender or the Issuing Bank, as the case may be, under
this Agreement or any other Loan Document against any amount due to the Administrative Agent under
this Section 2.17(d).




          (e) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrowers to a Governmental Authority, the Borrower Representative 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.




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






47









 







Requirements of Law or reasonably requested by the Borrower Representative as will permit such
payments to be made without withholding or at a reduced rate.





     (ii) Without limiting the generality of the foregoing, in the event that any Borrower
is resident for tax purposes in the United States, any Foreign Lender shall deliver to the
Borrower Representative and the Administrative Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Foreign Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the request of the
Borrower Representative or the Administrative Agent or if the Lender’s factual or legal
circumstances have changed since it last provided the form, rendering such form obsolete or
incorrect, but only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:




     (a) duly completed 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,




     (b) duly completed copies of Internal Revenue Service Form
W-8ECI,




     (c) in the case of a Foreign Lender claiming the benefits of
the exemption for portfolio interest under Section 881(c) of the
Code, (x) a certificate, in substantially the form of Exhibit
F, or any other form approved by the Administrative Agent, to
the effect that such Foreign Lender is not (A) a “bank” within the
meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent
shareholder” of such Borrower within the meaning of Section
881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code and (y) duly completed
copies of Internal Revenue Service Form W-8BEN, or




     (d) any other form prescribed by applicable Requirements of Law
as a basis for claiming exemption from or a reduction in United
States Federal withholding tax duly completed together with such
supplementary documentation as may be prescribed by applicable
Requirements of Law to permit such Borrower to determine the
withholding or deduction required to be made.



          (g) If the Administrative Agent or a Lender determines, in its sole discretion, that it has
received a refund of or credit against any Taxes paid by any Borrower or as to which it has been
indemnified by the Borrowers or with respect to which the Borrowers have paid additional amounts
pursuant to this Section 2.17, it shall pay over such refund or the amount of such credit
to the Borrowers (but only to the extent of indemnity payments made, or additional amounts paid, by
the Borrowers under this Section 2.17 with respect to the Taxes giving rise to such
refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority with respect to such
refund or credit) within 30 days of the receipt of such amount; provided, that the
Borrowers, upon the request of the Administrative Agent or such Lender, agree to repay the amount
paid over to the Borrowers (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative
Agent or such Lender is required to repay such refund to such Governmental Authority. This Section
shall not be construed to require the Administrative Agent or any Lender to make available






48









 







its tax returns (or any other information relating to its taxes which it deems confidential)
to the Borrowers or any other Person.




          SECTION 2.18. Payments Generally; Allocation of Proceeds; Sharing of Set-offs. (a)
The Borrowers shall make each payment required to be made by them hereunder (whether of principal,
interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section
2.15, 2.16 or 2.17, or otherwise) prior to 2:00 p.m., Chicago time, on the date
when due, in immediately available funds, without set off or counterclaim. Any amounts received
after such time on any date may, in the discretion of the Administrative Agent, be deemed to have
been received on the next succeeding Business Day for purposes of calculating interest thereon.
All such payments shall be made to the Administrative Agent at its offices at 10 South Dearborn
Street, 22nd Floor, Chicago, Illinois, except payments to be made directly to the Issuing Bank or
Swingline Lender as expressly provided herein and except that payments pursuant to Sections
2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons
entitled thereto. The Administrative Agent shall distribute any such payments received by it for
the account of any other Person to the appropriate recipient promptly following receipt thereof.
If any payment hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.




          (b) Any proceeds of Collateral received by the Administrative Agent after an Event of Default
has occurred and is continuing and the Administrative Agent so elects or the Required Lenders so
direct shall be applied ratably first, to pay any fees, indemnities, or expense
reimbursements including amounts then due to the Administrative Agent and the Issuing Bank from the
Borrowers (other than in connection with Banking Services or Swap Obligations), second, to
pay any fees or expense reimbursements then due to the Lenders from the Borrowers (other than in
connection with Banking Services or Swap Obligations), third, to pay interest due in
respect of the Protective Advances, fourth, to pay the principal of the Protective
Advances, fifth, to pay interest then due and payable on the Swingline Loans,
sixth, to pay principal on the Swingline Loans, seventh, to pay interest then due
and payable on the Loans (other than the Protective Advances and Swingline Loans), eighth,
to prepay principal on the Loans (other than the Protective Advances and Swingline Loans) and
unreimbursed LC Disbursements ratably, ninth, to deposit in the LC Collateral Account cash
collateral equal to 105% of the sum of the LC Exposure to be held as cash collateral for such
Obligations, tenth, to payment of any amounts owing with respect to Banking Services and
Swap Obligations, and eleventh, to the payment of any other Secured Obligation due to any
Lender Party by the Borrowers. Notwithstanding anything to the contrary contained in this
Agreement, unless so directed by the Borrower Representative, or unless an Event of Default is in
existence, neither the Administrative Agent nor any Lender shall apply any payment which it
receives to any Eurodollar Loan, except (a) on the expiration date of the Interest Period
applicable to any such Eurodollar Loan or (b) in the event, and only to the extent, that there are
no outstanding ABR Loans, in any such event, the Borrowers shall pay the break funding payment
required in accordance with Section 2.16. The Administrative Agent and the Lenders shall
have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds
and payments to any portion of the Secured Obligations.




          (c) At the election of the Administrative Agent, all payments of principal, interest, LC
Disbursements, fees, premiums, reimbursable expenses (including, without limitation, all
reimbursement for fees and expenses pursuant to Section 9.03), and other sums payable under
the Loan Documents, may be paid from the proceeds of Borrowings made hereunder whether made
following a request by the Borrower Representative pursuant to Section 2.03 or a deemed
request as provided in this Section or may be deducted from any deposit account of any Borrower
maintained with the Administrative Agent. Each Borrower hereby irrevocably authorizes (i) the
Administrative Agent to make a Borrowing for the






49









 







purpose of paying each payment referred to in the preceding sentence and agrees that all such
amounts charged shall constitute Loans (including Swingline Loans, but such a Borrowing may only
constitute a Protective Advance if it is to reimburse costs, fees and expenses as described in
Section 9.03) and that all such Borrowings shall be deemed to have been requested pursuant
to Sections 2.03, 2.04 or 2.05, as applicable and (ii) the Administrative
Agent to charge any deposit account of any Borrower maintained with the Administrative Agent for
each payment of principal, interest and fees as it becomes due hereunder or any other amount due
under the Loan Documents.




          (d) If any Lender shall, by exercising any right of set off or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of its Loans or participations in
LC Disbursements resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Loans and participations in LC Disbursements and accrued interest thereon
than the proportion received by any other Lender, then the Lender receiving such greater proportion
shall purchase (for cash at face value) participations in the Loans and participations in LC
Disbursements of other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and participations in LC Disbursements; provided
that (i) if any such participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be
construed to apply to any payment made by the Borrowers pursuant to and in accordance with the
express terms of this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations in LC Disbursements
to any assignee or participant. Each 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 such Borrower rights of set-off and counterclaim
with respect to such participation as fully as if such Lender were a direct creditor of such
Borrower in the amount of such participation.




          (e) Unless the Administrative Agent shall have received notice from the Borrower
Representative prior to the date on which any payment is due to the Administrative Agent for the
account of the Lenders or the Issuing Bank hereunder that the Borrowers will not make such payment,
the Administrative Agent may assume that the Borrowers have made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the
Issuing Bank, as the case may be, the amount due. In such event, if the Borrowers have not in fact
made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally
agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such
Lender or the Issuing Bank 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 greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.




          (f) If any Lender shall fail to make any payment required to be made by it pursuant to
Section 2.05, 2.06(d) or (e), 2.07(b), 2.18(e) or
9.03(c), then the Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), (i) apply any amounts thereafter received by the Administrative Agent for the
account of such Lender to satisfy such Lender’s obligations under such Sections until all such
unsatisfied obligations are fully paid and/or (ii) hold any such amounts in a segregated account as
cash collateral for, and apply any such amounts to, any future funding obligations of such Lender
under such Sections; application of amounts pursuant to (i) and (ii) above shall be made in such
order as may be determined by the Administrative Agent in its discretion.







50









 








          SECTION 2.19. Mitigation Obligations; Replacement of Lenders.




          (a) If any Lender or the Issuing Bank requests compensation under Section 2.15, or if
the Borrowers are required to pay any additional amount to any Lender, the Issuing Bank or any
Governmental Authority for the account of any Lender or the Issuing Bank pursuant to Section
2.17, then such Lender or the Issuing Bank shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of
such Lender or the Issuing Bank, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the future
and (ii) would not subject such Lender or the Issuing Bank to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Lender or the Issuing Bank. The Borrowers hereby
agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment).




          (b) If any Lender or the Issuing Bank requests compensation under Section 2.15, or if
the Borrowers are required to pay any additional amount to any Lender, the Issuing Bank or any
Governmental Authority for the account of any Lender or the Issuing Bank pursuant to Section
2.17, or if any Lender or the Issuing Bank becomes a Defaulting Lender, then the Borrowers may,
at their sole expense and effort, upon notice to such Lender, the Issuing Bank and the
Administrative Agent, require such Lender or the Issuing Bank to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in Section 9.04),
all its interests, rights and obligations under this Agreement to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such assignment);
provided that (i) the Borrowers shall have received the prior written consent of the
Administrative Agent and the Issuing Bank, which consent shall not unreasonably be withheld,
conditioned or delayed, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans,
accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and fees) or the
Borrowers (in the case of all other amounts) and (iii) in the case of any such assignment resulting
from a claim for compensation under Section 2.15 or payments required to be made pursuant
to Section 2.17, such assignment will result in a reduction in such compensation or
payments. No Lender nor the Issuing Bank shall be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender, the Issuing Bank or
otherwise, the circumstances entitling the Borrowers to require such assignment and delegation
cease to apply.




          SECTION 2.20. Defaulting Lenders. Notwithstanding any provision of this Agreement to
the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply
for so long as such Lender is a Defaulting Lender:




          (a) fees shall cease to accrue on the unfunded portion of the Revolving Commitment of such
Defaulting Lender pursuant to Section 2.12(a);




          (b) the Revolving Commitment and Revolving Credit Exposure of such Defaulting Lender shall
not be included in determining whether all Lenders or the Required Lenders have taken or may take
any action hereunder (including any consent to any amendment or waiver pursuant to Section 9.02),
provided that any waiver, amendment or modification requiring the consent of all Lenders or each
affected Lender which affects such Defaulting Lender differently than other affected Lenders shall
require the consent of such Defaulting Lender;







51









 








          (c) if any Swingline Exposure or LC Exposure exists at the time a Lender becomes a Defaulting
Lender then:





     (i) all or any part of such Swingline Exposure and LC Exposure shall be reallocated
among the non-Defaulting Lenders in accordance with their respective Applicable Percentages
but only to the extent (x) the sum of all non-Defaulting Lenders’ Revolving Credit Exposures
plus such Defaulting Lender’s Swingline Exposure and LC Exposure does not exceed the total
of all non-Defaulting Lenders’ Revolving Commitments and (y) the conditions set forth in
Section 4.02 are satisfied at such time; and




     (ii) if the reallocation described in paragraph (i) above cannot, or can only
partially, be effected, the Borrowers shall within one Business Day following notice by the
Administrative Agent (x) first, prepay such Swingline Exposure and (y)
second, cash collateralize such Defaulting Lender’s LC Exposure (after giving effect
to any partial reallocation pursuant to paragraph (i) above) in accordance with the
procedures set forth in Section 2.06(j) for so long as such LC Exposure is
outstanding;




     (iii) if the Borrowers cash collateralize any portion of such Defaulting Lender’s LC
Exposure pursuant to Section 2.20(c), the Borrowers shall not be required to pay any
fees to such Defaulting Lender pursuant to Section 2.12(b) with respect to such
Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is
cash collateralized;




     (iv) if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to
Section 2.20(c), then the fees payable to the Lenders pursuant to Sections
2.12(a) and (b) shall be adjusted in accordance with such non-Defaulting
Lenders’ Applicable Percentages; or




     (v) if any Defaulting Lender’s LC Exposure is neither cash collateralized nor
reallocated pursuant to Section 2.20(c), then, without prejudice to any rights or
remedies of the Issuing Bank or any Lender hereunder, all facility fees that otherwise would
have been payable to such Defaulting Lender (solely with respect to the portion of such
Defaulting Lender’s Commitment that was utilized by such LC Exposure) and letter of credit
fees payable under Section 2.12(b) with respect to such Defaulting Lender’s LC
Exposure shall be payable to the Issuing Bank until such LC Exposure is cash collateralized
and/or reallocated;



          (d) the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit,
unless it is satisfied that the related exposure will be 100% covered by the Commitments of the
non-Defaulting Lenders and/or cash collateral will be provided by the Borrowers in accordance with
Section 2.20(c), and participating interests in any such newly issued or increased Letter
of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section
2.20(c)(i)(and Defaulting Lenders shall not participate therein); and




          (e) in the event and on the date that each of the Administrative Agent, the Borrowers, the
Issuing Bank and the Swingline Lender agrees that a Defaulting Lender has adequately remedied all
matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and LC
Exposure of the other Lenders shall be readjusted to reflect the inclusion of such Lender’s
Revolving Commitment and on such date such Lender shall purchase at par such of the Loans of the
other Lenders (other than Swingline Loans) as the Administrative Agent shall determine may be
necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage.







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          SECTION 2.21. Returned Payments. If after receipt of any payment which is applied to
the payment of all or any part of the Obligations, the Administrative Agent or any Lender is for
any reason compelled to surrender such payment or proceeds to any Person because such payment or
application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or
voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other
reason, then the Obligations or part thereof intended to be satisfied shall be revived and
continued and this Agreement shall continue in full force as if such payment or proceeds had not
been received by the Administrative Agent or such Lender. The provisions of this Section
2.21 shall be and remain effective notwithstanding any contrary action which may have been
taken by the Administrative Agent or any Lender in reliance upon such payment or application of
proceeds. The provisions of this Section 2.21 shall survive the termination of this
Agreement.




ARTICLE III




Representations and Warranties



          Each Borrower represents and warrants to the Lender Parties that:




          SECTION 3.01. Organization; Powers. Each of the Borrowers is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required.




          SECTION 3.02. Authorization; Enforceability. The Transactions are within each
Borrower’s organizational powers and have been duly authorized by all necessary organizational
actions and, if required, actions by equity holders. The Loan Documents to which each Borrower is
a party have been duly executed and delivered by such Borrower and each constitutes a legal, valid
and binding obligation of such Borrower, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’
rights generally and subject to general principles of equity, regardless of whether considered in a
proceeding in equity or at law.




          SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other action by, any
Governmental Authority, except such as have been obtained or made and are in full force and effect
and except for filings necessary to perfect Liens created pursuant to the Loan Documents; (b) will
not violate any Requirement of Law applicable to any Borrower; (c) will not violate or result in a
default under any material indenture, agreement or other instrument binding upon any Borrower or
its assets, or give rise to a right under any such material indenture, agreement or other
instrument (other than a Loan Document) to require any payment to be made by any Borrower; and (d)
will not result in the creation or imposition of any Lien on any asset of any Borrower, except
Liens created pursuant to the Loan Documents.




          SECTION 3.04. Financial Condition; No Material Adverse Change. (a) The Company has
heretofore furnished to the Lender Parties copies of, or has provided the Administrative Agent with
an electronic link to the copies that have been made available through its website or that have
been filed with the SEC via EDGAR, its consolidated balance sheet and statements of income,
stockholders equity and cash flows (i) as of and for the 2008 and 2009 Fiscal Years, audited by
Deloitte & Touche LLP, independent public accountants, and (ii) as of and for the Fiscal Month
ended January 31, 2010. Such financial statements present fairly, in all material respects, the
financial condition and results of






53









 







operations and cash flows of the Company and the Subsidiaries as of such dates and for such
periods in accordance with GAAP, subject to year end audit adjustments and the absence of footnotes
in the case of the statements referred to in clause (ii).




          (b) No event, change or condition has occurred that has had, or could reasonably be expected
to have, a Material Adverse Effect, since December 31, 2009.




          SECTION 3.05. Properties. (a) As of the Effective Date, Schedule 3.05(a)
sets forth the address of each parcel of material real property that is owned or leased by each
Borrower. Each of such leases and subleases is valid and enforceable in accordance with its terms
and is in full force and effect, and, to the knowledge of the Borrowers, no material default by any
party to any such lease or sublease exists. Except as set forth on Schedule 3.05(a), each
of the Borrowers has good and indefeasible title to, or valid leasehold interests in, all its
material real and personal property, free of all Liens other than Permitted Liens.




          (b) Each of the Borrowers owns, or is licensed to use, all material trademarks, tradenames,
copyrights, patents and other intellectual property necessary to its business as currently
conducted, a correct and complete list of which, as of the date of this Agreement, is set forth on
Schedule 3.05(b), and the use thereof by the Borrowers does not infringe in any material
respect upon the rights of any other Person, and the Borrowers’ rights thereto are not subject to
any licensing agreement or similar arrangement.




          SECTION 3.06. Litigation and Environmental Matters. (a) Except for the Disclosed
Matters, there are no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of any of the Borrowers, threatened against or
affecting the Borrowers (i) which could reasonably be expected, individually or in the aggregate,
to result in a Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve this
Agreement or the Transactions.




          (b) Except for the Disclosed Matters, (i) no Borrower has received notice of any claim with
respect to any Environmental Liability or knows of any basis for any Environmental Liability and
(ii) and except with respect to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, no Borrower (A) has failed to comply
with any Environmental Law or to obtain, maintain or comply with any permit, license or other
approval required under any Environmental Law or (B) has become subject to any Environmental
Liability.




          SECTION 3.07. Compliance with Laws and Agreements. Each of the Borrowers, to its
knowledge, is in compliance with all Requirements of Law applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect.




          SECTION 3.08. Investment Company Status. No Borrower nor any of the Subsidiaries is
an “investment company” as defined in, or subject to regulation under, the Investment Company Act
of 1940.




          SECTION 3.09. Taxes. Each of the Borrowers has timely filed or caused to be filed
all Federal and all state and other material Tax returns and reports required to have been filed
and has paid or caused to be paid all Federal and all state and other material Taxes required to
have been paid by it, except Taxes that are being contested in good faith by appropriate
proceedings and for which such





54












 




Borrower has set aside on its books adequate reserves. No tax Liens (other than Permitted
Encumbrances) have been filed and no claims are being asserted with respect to any such Taxes.




          SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse Effect. The
funding target under each Plan (based on the actuarial assumptions specified for funding purposes
pursuant to ERISA Section 303(h) in such Plan’s most recent actuarial valuation report) did not, as
of the date of the most recently ended plan year, exceed by more than $20,000,000 the current value
(within the meaning of Section 3(26) of ERISA) of the assets of such Plan allocable to such
benefits in accordance with Title IV of ERISA, as determined for the most recent valuation date for
such Plan using the actuarial assumptions as set forth in such report, and the sum of the funding
targets for all Plans (based on the actuarial assumptions specified for funding purposes pursuant
to ERISA Section 303(h) in such Plan’s most recent actuarial valuation report) did not, as of the
date of the most recently ended plan year, exceed by more than $20,000,000 the fair market value of
the assets of all such Plans.




          SECTION 3.11. Disclosure. Each Borrower has disclosed to the Lenders all agreements,
instruments and corporate or other restrictions to which it or any Subsidiary is subject, and all
other matters known to it, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. Neither the Information Memorandum nor any of the other
reports, financial statements, certificates or other information furnished by or on behalf of any
Borrower to the Administrative Agent or any Lender in connection with the negotiation of this
Agreement or any other Loan Document (as modified or supplemented by other information so
furnished), when taken as a whole, 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 misleading; provided that, with respect to projected financial
information, (a) the Borrowers represent only that such information was prepared in good faith
based upon assumptions believed to be reasonable at the time delivered and, if such projected
financial information was delivered prior to the Effective Date, as of the Effective Date, and (b)
it is understood and agreed that uncertainty is inherent in any forecasts or projections and no
assurances can be given by the Borrowers of the future achievement of such performance.




          SECTION 3.12. Material Agreements. As of the Effective Date, all material agreements
and contracts to which any Borrower is a party or is bound and which, under Requirements of Law,
would be required to be filed with the SEC, are either (a) filed as exhibits to, or incorporated by
reference in, the reports of the Company that were filed with the SEC, prior to the Effective Date,
or (b) are listed on Schedule 3.12. No Borrower is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions contained in (i) any
material agreement to which it is a party or (ii) any agreement or instrument evidencing or
governing Indebtedness.




          SECTION 3.13. Solvency. (a) Both before and immediately after the consummation of
the Transactions to occur on the Effective Date, (i) the fair value of the assets of each Borrower,
at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise;
(ii) the present fair saleable value of the property of each Borrower will be greater than the
amount that will be required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities become absolute and
matured; (iii) each Borrower will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) no
Borrower will have unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted after the Effective Date.
The amount of contingent liabilities at any time shall be computed as the amount that, in light of
all






55









 







facts and circumstances existing at such time, represents the amount that can reasonably be
expected to become an actual or matured liability.




          (b) No Borrower intends to, or will permit any of the Subsidiaries to, and no Borrower
believes that it or any of the Subsidiaries will, incur debts beyond its ability to pay such debts
as they mature, taking into account the timing of and amounts of cash to be received by it or any
such Subsidiary and the timing of the amounts of cash to be payable on or in respect of its
Indebtedness or the Indebtedness of any such Subsidiary.




          SECTION 3.14. Insurance. Schedule 3.14 sets forth a description of all
insurance maintained by or on behalf of the Borrowers as of the Effective Date. All policies of
insurance of any kind or nature owned by or issued to any of the Borrowers, including without
limitation, policies of life, fire, theft, product liability, public liability, property damage,
other casualty, employee fidelity, workers’ compensation, employee health and welfare, title,
property and liability insurance are in full force and effect and are of a nature and provide such
coverage as is customarily carried by companies of the size and character of the Borrowers.




          SECTION 3.15. Capitalization and Subsidiaries. Schedule 3.15 (as updated from
time to time by the Company) sets forth (a) a correct and complete list of the name and
relationship to the Company of each and all of the other Borrowers, (b) a true and complete listing
of each class of each of the Borrowers’ authorized Equity Interests (other than the Company’s), of
which all of such issued shares are validly issued, outstanding, fully paid and non-assessable, and
owned beneficially and of record by the Persons identified on Schedule 3.15, and (c) the
type of entity of each Borrower. All of the issued and outstanding Equity Interests of a
Subsidiary owned by any Borrower have been duly authorized and issued and are fully paid and
non-assessable (to the extent such concepts are relevant with respect to such ownership interests).




          SECTION 3.16. Security Interest in Collateral. The provisions of this Agreement and
the other Loan Documents create legal and valid Liens on all the Collateral in favor of the
Administrative Agent, for the benefit of the Lender Parties, and such Liens constitute perfected
and continuing Liens on the Collateral, securing the Secured Obligations, enforceable against the
applicable Borrower, and having priority over all other Liens on the Collateral except in the case
of (a) Permitted Liens, to the extent any such Permitted Liens would have priority over the Liens
in favor of the Administrative Agent, for the benefit of the Lender Parties, pursuant to any
Requirement of Law or any applicable agreement that is permitted hereunder and (b) Liens perfected
only by possession (including possession of any certificate of title) to the extent the
Administrative Agent has not obtained or does not maintain possession of such Collateral.




          SECTION 3.17. Employment Matters. As of the Effective Date, there are no strikes,
lockouts or slowdowns against any Borrower or any of the Subsidiaries pending or, to the knowledge
of the Borrowers, threatened. The hours worked by and payments made to employees of any Borrower
or any of the Subsidiaries have not been in violation of the Fair Labor Standards Act or any other
applicable Federal, state, local or foreign law dealing with such matters. All payments due from
and payable by any Borrower in accordance with Requirements of Law, on account of wages and
employee health and welfare insurance and other benefits, have been paid at or within such time as
required by such Requirements of Law, or, to the extent required by such Requirements of Law,
accrued as a liability on the books of such Borrower.




          SECTION 3.18. Common Enterprise. The successful operation and condition of each of
the Borrowers is dependent on the continued successful performance of the functions of the group of
the






56









 







Borrowers as a whole and the successful operation of each of the Borrowers is dependent on the
successful performance and operation of each other Borrower. Each Borrower expects to derive
benefit (and its board of directors or other governing body has determined that it may reasonably
be expected to derive benefit), directly and indirectly, from (a) successful operations of each of
the other Borrowers and (b) the credit extended by the Lender Parties to the Borrowers hereunder,
both in their separate capacities and as members of the group of companies. Each Borrower has
determined that execution, delivery, and performance of this Agreement and any other Loan Documents
to be executed by such Borrower is within its purpose, will be of direct and indirect benefit to
such Borrower, and is in its best interest.




ARTICLE IV




Conditions



          SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans and of the
Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on
which each of the following conditions is satisfied (or waived in accordance with Section
9.02) to the satisfaction of each Lender:





     (a) Credit Agreement and Loan Documents. The Administrative Agent (or its
counsel) shall have received (i) from each party hereto either (A) a counterpart of this
Agreement signed on behalf of such party or (B) written evidence satisfactory to the
Administrative Agent (which may include PDF or facsimile transmission of a signed signature
page of this Agreement) that such party has signed a counterpart of this Agreement and (ii)
duly executed copies (or PDF or facsimile copies) of the Loan Documents and such other
certificates, documents, instruments and agreements as the Administrative Agent shall
reasonably request in connection with the transactions contemplated by this Agreement and
the other Loan Documents, including any promissory notes requested by a Lender pursuant to
Section 2.10 payable to the order of each such requesting Lender and a written
opinion of the Borrowers’ counsel, addressed to the Administrative Agent, the Issuing Bank
and the Lenders in substantially the form of Exhibit B.




     (b) Financial Statements and Projections. The Lender Parties shall have
received (i) (A) audited consolidated financial statements of the Borrowers for the 2008 and
2009 Fiscal Years and (B) unaudited interim consolidated financial statements of the
Borrowers for the Fiscal Month ended January 31, 2010, and such financial statements shall
not, in the reasonable judgment of the Administrative Agent, reflect any material adverse
change in the consolidated financial condition of the Borrowers, as reflected in the
financial statements or projections contained in the Information Memorandum; and (ii)
satisfactory projections prepared on a monthly basis for the 2010 Fiscal Year and on an
annual basis for the remaining period through and including Fiscal Year 2013.




     (c) Closing Certificates; Certified Certificate of Incorporation; Good Standing
Certificates. The Administrative Agent shall have received (i) a certificate of each
Borrower, dated the Effective Date and executed by its Secretary or Assistant Secretary,
which shall (A) certify the resolutions of its Board of Directors, members or other body
authorizing the execution, delivery and performance of the Loan Documents to which it is a
party, (B) identify by name and title and bear the signatures of the Financial Officers and
any other officers of such Borrower authorized to sign the Loan Documents to which it is a
party, and (C) contain appropriate attachments, including the certificate or articles of
incorporation or organization of each Borrower certified by the relevant authority of the
jurisdiction of organization of such Borrower



57









 







and a true and correct copy of its bylaws or operating, management or partnership
agreement, and (ii) a long form good standing certificate for each Borrower from its
jurisdiction of organization.




     (d) Closing Date Certificate. The Administrative Agent shall have received a
certificate, signed by the chief financial officer of the Borrower Representative and dated
the Effective Date (i) stating that no Default has occurred and is continuing, (ii) stating
that the representations and warranties contained in Article III are true and
correct in all material respects as of such date (provided that each such
representation and warranty shall be true and correct in all respects to the extent that it
is already qualified by a materiality standard), and (iii) certifying any other factual
matters as may be reasonably requested by the Administrative Agent.




     (e) Fees. The Lender Parties shall have received all fees required to be paid,
and all expenses for which invoices have been presented (including the reasonable fees and
expenses of legal counsel of the Administrative Agent), on or before the Effective Date.
All such amounts will be paid with proceeds of Loans made on the Effective Date and will be
reflected in the funding instructions given by the Borrower Representative to the
Administrative Agent on or before the Effective Date.




     (f) Lien Searches. The Administrative Agent shall have received the results of
a recent lien search in each of the jurisdictions where assets of the Borrowers are located,
and such search shall reveal no Liens on any of the assets of the Borrowers except for
Permitted Liens or Liens discharged on or prior to the Effective Date pursuant to a pay-off
letter or other documentation satisfactory to the Administrative Agent.




     (g) Pay-Off Letter. The Administrative Agent shall have received satisfactory
evidence (i) of the pay-off of all Existing Loans that are not deemed outstanding
hereunder and (ii) the termination of all Liens on property of the Borrowers (other than
Liens on property of the Borrowers forming a part of the Collateral in favor of the
Administrative Agent).




     (h) Funding Accounts. The Administrative Agent shall have received a notice
setting forth the deposit account(s) of the Borrowers (the “Funding Accounts”) to
which the Administrative Agent is authorized by the Borrowers to transfer the proceeds of
any Borrowings requested or authorized pursuant to this Agreement.




     (i) Collateral Access and Control Agreements. The Administrative Agent shall
have received each (i) Collateral Access Agreement required to be provided pursuant to
Section 4.9 of the Security Agreement and (ii) Deposit Account Control Agreement and Lock
Box Agreement required to be provided pursuant to Section 4.10 of the Security Agreement.




     (j) Solvency. The Administrative Agent shall have received a solvency
certificate from a Financial Officer of each Borrower.




     (k) Borrowing Base Certificate. The Agents shall have received a Borrowing
Base Certificate which calculates the Borrowing Base as of the end of the calendar month
immediately preceding the Effective Date.




     (l) Filings, Registrations and Recordings. Each document (including any
Uniform Commercial Code financing statement) required by the Collateral Documents or under
law or reasonably requested by the Administrative Agent to be filed, registered or recorded
in order to create in favor of the Administrative Agent (for the benefit of the Lender
Parties) a valid and



58









 







perfected, first priority Lien on the Collateral described therein, prior and superior
in right to any other Person (other than Permitted Liens), shall be in proper form for
filing, registration or recordation.




     (m) Corporate Structure. The corporate structure, capital structure, other
debt instruments (including the Convertible Notes), material accounts and governing
documents of the Borrower and the Subsidiaries, to the extent reasonably related to the
Transactions, shall be acceptable to the Administrative Agent.




     (n) Insurance. The Administrative Agent shall have received evidence of
insurance coverage in form, scope, and substance evidencing compliance with the terms of
Section 5.09.




     (o) Appraisals. The Administrative Agent shall have received satisfactory
appraisals of Inventory and field exams from appraisers satisfactory to the Administrative
Agent; provided that, in the sole discretion of the Administrative Agent, such
appraisals and field exams may be delivered after the Effective Date.




     (p) Due Diligence. The Administrative Agent and its counsel shall have
completed all legal due diligence to the extent reasonably related to the Transactions.




     (q) Tax Withholding. The Administrative Agent shall have received a properly
completed and signed IRS Form W-8 or W-9, as applicable, for each Borrower.




     (r) Other Documents. The Administrative Agent shall have received such other
documents as the Administrative Agent or its counsel may have reasonably requested.


The Administrative Agent shall notify the Borrowers and the Lenders of the Effective Date, and such
notice shall be conclusive and binding.




          SECTION 4.02. Each Credit Event. The obligation of each Lender to make a Loan on the
occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter of
Credit, is subject to the satisfaction of the following conditions:





     (a) The representations and warranties of the Borrowers set forth in this Agreement
shall be true and correct in all material respects (provided that such
representations and warranties shall be true in all respects if they are already qualified
by a materiality standard) on and as of the date of such Borrowing or the date of issuance,
amendment, renewal or extension of such Letter of Credit, as applicable.




     (b) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no
Default shall have occurred and be continuing.




     (c) After giving effect to any Borrowing or the issuance of any Letter of Credit,
Availability is not less than zero.


Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be
deemed to constitute a representation and warranty by the Borrowers on the date thereof as to the
matters specified in paragraphs (a), (b) and (c) of this Section.







59









 







Notwithstanding the failure to satisfy the conditions precedent set forth in paragraph (a)
or (b) of this Section, unless otherwise directed by the Required Lenders, the
Administrative Agent may, but shall have no obligation to, continue to make Loans and an Issuing
Bank may, but shall have no obligation to, issue or cause to be issued any Letter of Credit for the
ratable account and risk of Lenders from time to time if the Administrative Agent believes that
making such Loans or issuing or causing to be issued any such Letter of Credit is in the best
interests of the Lenders.




ARTICLE V




Affirmative Covenants



          Until all the Revolving Commitments have expired or been terminated and the Secured
Obligations have been indefeasibly paid or satisfied as provided in Section 2.09(b), each
Borrower executing this Agreement covenants and agrees, jointly and severally with all of the other
Borrowers, in favor of the Lender Parties that:




          SECTION 5.01. Financial Statements; Borrowing Base and Other Information. The
Borrowers will furnish to the Administrative Agent:





     (a) on or before the date upon which the Company’s annual report on Form 10-K is
required to be filed with the SEC (and in any event within 105 days after the end of each
Fiscal Year), the Company’s (i) audited consolidated balance sheet and related statements of
income, stockholders’ equity and cash flows, showing the financial condition of the Company
and the Subsidiaries on a consolidated basis as of the close of such Fiscal Year and the
results of their operations during such Fiscal Year, such consolidated financial statements
to be audited for the Company and the Subsidiaries by Deloitte & Touche LLP or other
independent public accountants of recognized national standing and accompanied by an audit
opinion of such accountants (without (A) a “going concern” or like qualification, exception
or explanatory paragraph and (B) any qualification or exception as to the scope of such
audit) and to be certified by a Financial Officer of the Company to the effect that such
consolidated financial statements fairly present the financial condition and results of
operations of the Company and the Subsidiaries on a consolidated basis in accordance with
GAAP, and (ii) unaudited consolidating balance sheet and related unaudited consolidating
statements of income as of the close of the fourth Fiscal Quarter and as of the close of
such Fiscal Year, all such consolidating financial statements showing separately the
financial condition of the Company and the Subsidiaries; provided, however, that any
document required to be delivered pursuant to this Section 5.01(a) shall be deemed
to have been furnished to the Administrative Agent if the Borrowers have provided the
Administrative Agent with a link to such documents that have been made available through
their website or that have been filed with the SEC via EDGAR;




     (b) on or before the date upon which the Company’s quarterly report on Form 10-Q is
required to be filed with the SEC (and in any event within 50 days after the end of each of
the first three Fiscal Quarters of the Company), the Company’s (i) unaudited consolidated
balance sheets and related unaudited statements of income, stockholders’ equity and cash
flows, showing the financial condition of the Company and the Subsidiaries on a consolidated
basis as of the close of such Fiscal Quarter and the results of their operations during such
Fiscal Quarter and the then elapsed portion of the applicable Fiscal Year, certified by a
Financial Officer of the Company as fairly presenting the financial condition and results of
operations of the Company and the Subsidiaries on a consolidated basis in accordance with
GAAP, subject to normal year-end audit adjustments and the absence of footnotes, and (ii)
unaudited consolidating balance sheet



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and related unaudited consolidating statements of income as of the close of such Fiscal
Quarter, all such consolidating financial statements showing separately the financial
condition of the Company and the Subsidiaries; provided that any document required
to be delivered pursuant to this Section 5.01(b) shall be deemed to have been
furnished to the Administrative Agent if the Borrowers have provided the Administrative
Agent with a link to such documents that have been made available through their website or
that have been filed with the SEC via EDGAR;




     (c) commencing with the first Fiscal Month following the Effective Date as soon as
available, but no more than 30 days after the end of each Fiscal Month, the unaudited
consolidated balance sheet as of the close of such Fiscal Month and related unaudited
consolidated statements of income and cash flow of the Company and the Subsidiaries during
such Fiscal Month and the Fiscal Year to date period;




     (d) (i) concurrently with any delivery of financial statements under paragraph
(a), (b) or (c) above, a certificate of a Financial Officer of the
Borrower Representative in substantially the form of Exhibit D (i) certifying, in
the case of the financial statements delivered under paragraph (b) or (c),
as presenting fairly in all material respects the financial condition and results of
operations of the Company and the Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied, subject to normal year-end audit adjustments and the absence of
footnotes, (ii) certifying as to whether a Default or Event of Default has occurred and, if
a Default or Event of Default has occurred, specifying the details thereof and any action
taken or proposed to be taken with respect thereto, and (iii) certifying in the case of the
financial statements delivered under paragraph (c), (A) if Availability is less than
$100,000,000 for any period of five consecutive Business Days during the Fiscal Month with
respect to which such financial statements are delivered, a reasonably detailed calculation
of the Fixed Charge Coverage Ratio and (B) during any Covenant Trigger Period, compliance
with Section 6.12;




     (e) concurrently with any delivery of financial statements under paragraph (a) above, a
certificate of the accounting firm that reported on such financial statements stating
whether they obtained knowledge during the course of their examination of such financial
statements, if any Default or Event of Default has occurred and is continuing, specifying
the nature thereof and all relevant facts with respect thereto (which certificate may be
limited to the extent required by accounting rules or guidelines);




     (f) as soon as available, but in any event not more than 60 days after the end of each
Fiscal Year, a copy of the plan and forecast (including a projected consolidated balance
sheet, income statement and funds flow statement) of the Company on a consolidated basis for
each month of the then current Fiscal Year (the “Projections”) in form reasonably
satisfactory to the Administrative Agent;




     (g) as soon as available but in any event within 15 days of the end of each calendar
month (or within three Business Days of the end of each calendar week (it being understood
that a calendar week ends on Sunday) during a Dominion Trigger Period), as of the last day
of the immediately preceding month, or during a Dominion Trigger Period, as of the last day
of the immediately preceding week, a Borrowing Base Certificate which calculates the
Borrowing Base as of the calendar period then ended, together with supporting information in
connection therewith, together with any additional reports with respect to the Borrowing
Base as the Administrative Agent may reasonably request;



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     (h) as soon as available but in any event within 15 days of the end of each calendar
month (or, in the case of paragraphs (h)(i) and (h)(ii) below, within three
Business Days of the end of each calendar week (it being understood that a calendar week
ends on Sunday) during any Dominion Trigger Period), as of the period then ended, all
delivered electronically in a text formatted file acceptable to the Administrative Agent:




     (i) a detailed aging of the Borrowers’ Accounts (A) including all invoices aged
by invoice date and due date and (B) reconciled to the Borrowing Base Certificate
delivered as of such date prepared in a manner reasonably acceptable to the
Administrative Agent, together with a summary specifying the name, address, and
balance due for each Account Debtor;




     (ii) a schedule detailing the Borrowers’ Inventory, in form satisfactory to the
Administrative Agent, (A) by location (showing Inventory in transit, any Inventory
located with a third party under any consignment, bailee arrangement, or warehouse
agreement), by class (raw material, work-in-process and finished goods), which
Inventory shall be valued at the lower of cost (determined on a first-in, first-out
basis) or market and (B) reconciled to the Borrowing Base Certificate delivered as
of such date;




     (iii) a summary of categories of Accounts excluded from Eligible Accounts
Receivable and Inventory excluded from Eligible Inventory; and




     (i) a reconciliation of the Borrowers’ Accounts and Inventory between the amounts shown
in the Borrowers’ general ledger and financial statements and the reports delivered pursuant
to paragraphs (i) and (ii) above;




     (j) as soon as available but in any event within 30 days of the end of each December 31
and at such other times as may be requested by the Administrative Agent, a list of all
customer addresses, delivered electronically in a text formatted file acceptable to the
Administrative Agent;




     (k) promptly after any Borrower obtains knowledge thereof and has reason to know,
notice of a material portion of Eligible Accounts and Eligible Inventory, as the case may
be, becoming ineligible under the Borrowing Base;




     (l) within 30 days of the first Business Day of each March and September, a certificate
of good standing for each Borrower from the appropriate governmental officer in its
jurisdiction of incorporation, formation or organization;




     (m) promptly after the same become publicly available, copies of all periodic and other
reports, proxy statements and other materials filed by any Borrower or any Subsidiary with
the SEC, or any Governmental Authority succeeding to any or all of the functions of the SEC,
or with any national securities exchange, as the case may be; provided that any
documents required to be delivered pursuant to this paragraph (l) shall be deemed to
have been delivered on the date on which the Company provides the Administrative Agent a
link to where such documents were filed electronically via EDGAR or such documents have been
made publicly available on its website; and




     (n) promptly following any request therefor, such other information regarding the
operations, business affairs and financial condition of any Borrower or any Subsidiary, or



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compliance with the terms of this Agreement, as the Administrative Agent or any Lender,
acting through the Administrative Agent, may reasonably request.



          SECTION 5.02. Notices of Material Events. The Borrowers will furnish to the
Administrative Agent (for delivery to each Lender) prompt written notice of the following:





     (a) the occurrence of any Default or Event of Default (which notice shall be delivered
no later than five Business Days after any Borrower has any knowledge thereof);




     (b) receipt of any notice of any governmental investigation or any governmental or
other litigation or proceeding commenced or threatened against any Borrower that (i) could
reasonably be expected to have a Material Adverse Effect, (ii) contests any tax, fee,
assessment, or other governmental charge in excess of $5,000,000, or (iii) involves any
product recall;




     (c) any Lien (other than Permitted Liens) or claim made or asserted against Collateral
having a value in excess of $5,000,000;




     (d) any loss, damage, or destruction to the Collateral having a book value of
$5,000,000 or more, whether or not covered by insurance;




     (e) any and all default notices received under or with respect to any leased location
or public warehouse where Collateral is located (which shall be delivered within two
Business Days after receipt thereof);




     (f) the occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liability of the
Borrowers in an aggregate amount exceeding $5,000,000;




     (g) receipt of any notice by a holder of any Equity Interests of any Borrower or
holder of any Material Indebtedness that any default exists with respect thereto or that any
Borrower is not in compliance with the terms thereof; and




     (h) any other development, including as a result of any work stoppage, strike or other
labor dispute, that results in, or could reasonably be expected to result in, a Material
Adverse Effect.


The Administrative Agent shall deliver to the Lenders all documents that are received by it
pursuant to this Section as provided in Section 9.01(b) or by posting such documents to
Intralinks or an equivalent means of electronic delivery to which the Lenders have access. Each
notice delivered under this Section shall be accompanied by a statement of a Financial Officer or
other executive officer of the Borrower Representative setting forth in reasonable detail the
details of the event or development requiring such notice and any action taken or proposed to be
taken with respect thereto.




          SECTION 5.03. Existence; Conduct of Business. Each Borrower will (a) do or cause to
be done all things necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, qualifications, licenses, permits, franchises, governmental
authorizations, intellectual property rights, licenses and permits material to the conduct of its
business, and maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted, except (i) if (A) in the reasonable business judgment of the
Company, it is in the best economic interest of the Borrowers, taken as a whole, not to preserve
and maintain such rights, privileges, qualifications, permits, licenses and






63









 







franchises, and (B) such failure to preserve the same could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect, and (ii) as otherwise permitted in connection with
sales of assets permitted by Section 6.05; and (b) carry on and conduct its business in
substantially the same manner and in substantially the same fields of enterprise as it is presently
conducted.




          SECTION 5.04. Payment of Obligations. Each Borrower will pay or discharge all
Material Indebtedness and all other material liabilities and obligations, including material Taxes,
before the same shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) such Borrower has set
aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the
failure to make payment pending such contest could not reasonably be expected to result in a
Material Adverse Effect.




          SECTION 5.05. Maintenance of Properties. Each Borrower will keep and maintain all
property material to the conduct of its business in good working order and condition, ordinary wear
and tear excepted.




          SECTION 5.06. Books and Records; Inspection Rights. Each Borrower will (a) keep
proper books of record and account in accordance with GAAP in which full, true and correct entries
are made of all dealings and transactions in relation to its business and activities and (b) permit
any representatives designated by the Administrative Agent or any Lender (including employees of
the Administrative Agent, any Lender or any consultants, accountants, lawyers and appraisers
retained by the Administrative Agent), upon reasonable prior notice, to visit during regular
business hours and inspect its properties, to examine and make extracts from its books and records
for the purpose of verifying the accuracy of the various reports delivered by the Borrowers to the
Administrative Agent, and to discuss its affairs, finances and condition with its officers and
independent accountants, all at such reasonable times and as often as reasonably requested. The
Borrowers acknowledge that the Administrative Agent, after exercising its rights of inspection, may
prepare and distribute to the Lenders certain Reports pertaining to the Borrowers’ assets for
internal use by the Administrative Agent and the Lenders.




          SECTION 5.07. Compliance with Laws. Each Borrower will comply in all material
respects all Requirements of Law applicable to it or its property, except any of the foregoing
relating to Environmental Laws, which compliance is subject to Section 5.10.




          SECTION 5.08. Use of Proceeds. The proceeds of the Loans and Letters of Credit will
be used only (a) to repay amounts outstanding under the Existing Credit Agreement, (b) for general
corporate purposes (including Permitted Acquisitions and, subject to the restrictions contained in
Section 6.08, repurchases of shares of common stock of the Company) of the Borrowers in the
ordinary course of business and (c) to pay any related transaction costs, fees and expenses. No
part of the proceeds of any Loan and no Letter of Credit will be used, whether directly or
indirectly, for any purpose that entails a violation of any of the Regulations of the Board,
including Regulations T, U and X.




          SECTION 5.09. Insurance. Each Borrower will maintain with financially sound and
reputable carriers acceptable to the Administrative Agent in its Permitted Discretion (including,
consistent with past practice, insurance companies affiliated with the Company), insurance with
respect to their properties and business (including business interruption insurance, fire insurance
and public liability insurance) in such amounts, of such character and against such risks
acceptable to the Administrative Agent in its Permitted Discretion and as are usually maintained by
companies engaged in the same or similar business or having comparable properties, and in any case
having a coverage which is not materially less than the insurance of such type maintained by the
Borrowers on the Effective Date, provided that no Borrower will use or permit any property
to be used in any manner which might render





64












 




inapplicable any such insurance coverage. All property insurance covering Collateral
maintained by the Borrowers shall name the Administrative Agent as sole loss payee. All liability
insurance maintained by the Borrowers shall name the Administrative Agent as additional insured.
All such property and liability insurance shall further provide for at least 30 days’ prior written
notice (10 days’ prior written notice with respect to cancellation for non-payment of premium or at
the request of the insured) to the Administrative Agent of the cancellation or substantial
modification thereof. The Borrowers will furnish to the Lenders, promptly upon request of the
Administrative Agent, information in reasonable detail as to the insurance so maintained.




          SECTION 5.10. Environmental Covenant. Each Borrower will:





          (a) use and operate all of their respective facilities and properties in material
compliance with all Environmental Laws, keep all necessary permits, approvals, certificates,
licenses, and other authorizations required by applicable Environmental Laws relating to
environmental matters in effect from time to time, and remain in material compliance
therewith, and handle all Hazardous Materials in material compliance with all applicable
Environmental Laws;




          (b) (i) as soon as possible and in any event not later than 15 Business Days after any
Borrower becomes aware of the receipt thereof, notify the Administrative Agent and provide
copies of all written claims, complaints, notices, or inquiries by a Governmental Authority,
or any Person which has commenced a legal proceeding against any of the Borrowers, relating
to material non-compliance by any of the Borrowers with, or material potential liability of
any of the Borrowers under, Environmental Laws; and




     (ii) with reasonable diligence cure all environmental defects and
conditions which are the subject of any actions and proceedings against any
of the Borrowers relating to compliance with Environmental Laws, except to
the extent such actions and proceedings (or the obligation of any of the
Borrowers to cure such defects and conditions) are stayed or are being
contested by any of the Borrowers or in good faith by appropriate
proceedings; and




          (c) provide such information, access and certifications which the Administrative Agent
may reasonably request from time to time to evidence compliance with this Section
5.10.



          SECTION 5.11. Appraisals. At any time that the Administrative Agent requests, the
Borrowers will provide the Administrative Agent with appraisals or updates thereof of their
Inventory from an appraiser selected and engaged by the Administrative Agent, and prepared on a
basis satisfactory to the Administrative Agent, such appraisals and updates to include, without
limitation, information required by applicable Requirements of Law. The Borrowers shall reimburse
the Administrative Agent for all reasonable charges, costs and expenses related to one appraisal
during each calendar year; provided that if at any time during any calendar year
Availability is less than 67% of the Total Revolving Commitment, the Borrowers shall reimburse the
Administrative Agent for all reasonable charges, costs and expenses related to a second appraisal
during such calendar year; and provided, further, that there shall be no limitation
on the number or frequency of appraisals that shall be at the sole expense of the Borrowers if any
Default or Event of Default shall have occurred and be continuing. Unless otherwise approved by the
Required Lenders, the Administrative Agent agrees to conduct at least one appraisal of the
Borrowers’ Inventory each calendar year.





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          SECTION 5.12. Field Examinations. At any time that the Administrative Agent
requests, the Borrowers will allow the Administrative Agent to conduct field examinations or
updates thereof to ensure the adequacy of Collateral included in any Borrowing Base and related
reporting and control systems, and prepared on a basis satisfactory to the Administrative Agent,
such field examinations and updates to include, without limitation, information required by
applicable Requirements of Law. The Borrowers shall reimburse the Administrative Agent for all
reasonable charges, costs and expenses related to one field examination during each calendar year;
provided that if at any time during any calendar year Availability is less than 67% of the
Total Revolving Commitment, the Borrowers shall reimburse the Administrative Agent for all
reasonable charges, costs and expenses related to a second field examination during such calendar
year; and provided, further, that there shall be no limitation on the number or
frequency of field examinations that shall be at the sole expense of the Borrowers if any Default
or Event of Default shall have occurred and be continuing.




          SECTION 5.13. Depository Banks. Each of the Borrowers will maintain one or more of
the Lenders or other banks that are acceptable to the Administrative Agent as its principal
depository bank, including for the maintenance of operating, administrative, cash management,
collection activity, and other deposit accounts for the conduct of its business.




          SECTION 5.14. Additional Collateral; Further Assurances. (a) Subject to applicable
Requirements of Law, each Borrower shall cause each of its domestic Significant Subsidiaries formed
or acquired after the date of this Agreement to become a Borrower by executing the Joinder
Agreement set forth as Exhibit E hereto (the “Joinder Agreement”). Upon execution
and delivery thereof, each such Person (i) shall automatically become a Borrower and hereunder and
thereupon shall have all of the rights, benefits, duties, and obligations in such capacity under
the Loan Documents and (ii) will grant Liens to the Administrative Agent (for the benefit of the
Lender Parties) in any property of such Borrower which constitutes Collateral.




          (b) Without limiting the foregoing, each Borrower will execute and deliver, or cause to be
executed and delivered, to the Administrative Agent such documents, agreements and instruments, and
will take or cause to be taken such further actions (including the filing and recording of
financing statements) and other documents and such other actions or deliveries of the type required
by Section 4.01, as applicable), which may be required by law or which the Administrative
Agent may, from time to time, reasonably request to carry out the terms and conditions of this
Agreement and the other Loan Documents and to ensure perfection and priority of the Liens created
or intended to be created by the Collateral Documents, all at the expense of the Borrowers.




          SECTION 5.15. Collateral Access Agreements and Appraisals. Each Borrower will
exercise commercially reasonable efforts to obtain Collateral Access Agreements for each of those
locations where it has a Collateral Access Agreement, as of the Effective Date, pursuant to the
Existing Credit Agreement (it being agreed that each such Collateral Access Agreement shall be in
substantially the same form as each such agreement existing on the Effective Date or otherwise on
terms reasonably satisfactory to the Administrative Agent). In addition, the appraisals referred
to in Section 4.01(o) shall be delivered not later than April 15, 2010 (or such later date
as the Administrative Agent may approve).




ARTICLE VI




Negative Covenants



          Until all the Revolving Commitments have expired or been terminated and the Secured
Obligations have been indefeasibly paid or satisfied, as the case may be, as provided in
Section 2.09(b),



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each Borrower executing this Agreement covenants and agrees, jointly and
severally with all of the other Borrowers, in favor of the Lender Parties that:




          SECTION 6.01. Indebtedness. No Borrower will create, incur or suffer to exist any
Indebtedness, except:




          (a) the Secured Obligations;





     (b) Indebtedness existing on the Effective Date hereof and set forth in Schedule
6.01(b), and extensions, renewals and replacements of any such Indebtedness in
accordance with paragraph (f) hereof;




     (c) Indebtedness of any Borrower to any other Borrower; provided that such
Indebtedness shall be subordinated to the Secured Obligations on terms reasonably
satisfactory to the Administrative Agent;




     (d) Guarantees by any Borrower of Indebtedness of any other Borrower or any
Subsidiary; provided that (i) the Indebtedness so Guaranteed is permitted by this
Section 6.01, (ii) Guarantees by any Borrower of Indebtedness of any Subsidiary that
is not a Borrower shall be subject to Section 6.04 and (iii) Guarantees permitted
under this paragraph (d) shall be subordinated to the Secured Obligations of the
applicable Borrower on the same terms to the extent that the Indebtedness so Guaranteed is
subordinated to the Secured Obligations;




     (e) Indebtedness of any Borrower set forth in Schedule 6.01(e) that was
incurred to finance the acquisition, construction or improvement of any fixed or capital
assets (whether or not constituting purchase money Indebtedness), including Capital Lease
Obligations and any Indebtedness assumed in connection with the acquisition of any such
assets or secured by a Lien on any such assets prior to the acquisition thereof, and
extensions, renewals and replacements of any such Indebtedness in accordance with
paragraph (f) hereof;




     (f) Indebtedness which represents an extension, refinancing, replacement or renewal of
any of the Indebtedness described in paragraphs (b) and (e) hereof;
provided that (i) the principal amount of such Indebtedness is not increased, (ii)
any Liens securing such Indebtedness are not extended to any additional property of any
Borrower, (iii) no Borrower that is not originally obligated with respect to repayment of
such Indebtedness is required to become obligated with respect thereto, (iv) such extension,
refinancing, replacement or renewal does not result in a shortening of the average weighted
maturity of the Indebtedness so extended, refinanced, replaced or renewed, (v) the terms of
any such extension, refinancing, replacement or renewal are not less favorable to the
obligor thereunder than the original terms of such Indebtedness and (vi) if the Indebtedness
that is refinanced, renewed or extended was subordinated in right of payment to the Secured
Obligations, then the terms and conditions of the refinancing, renewal, replacement or
extension Indebtedness must include subordination terms and conditions that are at least as
favorable to the Administrative Agent and the Lenders as those that were applicable to the
refinanced, renewed, or extended Indebtedness;




     (g) Indebtedness owed to any Person providing workers’ compensation, health,
disability or other employee benefits or property, casualty or liability insurance, pursuant
to reimbursement or indemnification obligations to such Person, in each case incurred in the
ordinary course of business;



67









 






     (h) Indebtedness in respect of performance bonds, bid bonds, appeal bonds, surety
bonds and similar obligations, in each case provided in the ordinary course of business;




     (i) Indebtedness in respect of obligations pursuant to any Permitted Commodity Swap
Agreement;




     (j) Indebtedness in respect of advance payments by customers under purchase contracts
in the ordinary course of business by the applicable Borrower;




     (k) Indebtedness owed to any Lender or Affiliate thereof in respect of any Banking
Services Obligations;




     (l) Indebtedness incurred by any Borrower under Swap Agreements entered into in
accordance with Section 6.07;




     (m) Indebtedness in respect of the Convertible Notes (which may be net-share and/or
cash settled) in an aggregate principal amount not to exceed $175,000,000 at any time
outstanding; and




     (n) other Indebtedness incurred after the Effective Date in an aggregate principal
amount, together with the aggregate consideration for all sale and leaseback transactions
consummated after the Effective Date, not exceeding $75,000,000 at any time outstanding,
plus at any time so long as (i) Pro Forma Availability in effect at the time any
such Indebtedness is incurred or sale and leaseback transaction is consummated is equal or
greater than $50,000,000 and (ii) the Pro Forma Fixed Charge Coverage Ratio for the Test
Period in effect at the time such Indebtedness is incurred or sale and leaseback transaction
is consummated is equal to or greater than 1.25:1.00, an additional aggregate amount of
$50,000,000 at any time outstanding; provided that the (A) aggregate principal
amount of Indebtedness and consideration for all sale and leaseback transactions of the
Borrowers permitted by this paragraph (n) shall not, in any event, exceed
$125,000,000 at any time outstanding and (B) to the extent any such Indebtedness is secured
by any property or assets of the Borrowers, (x) such security shall not attach to all or any
part of the Collateral and (y) to the extent reasonably requested by the Administrative
Agent, the holders of such secured Indebtedness shall enter into an intercreditor agreement
with respect thereto.



     The amounts permitted by paragraphs (b), (l), and (n) shall
not include those obligations under operating leases that are required to be reclassified, in
accordance with GAAP, as Capital Lease Obligations.



         SECTION 6.02. Liens. No Borrower will create, incur, assume or permit to exist any
Lien on any Collateral, or assign or sell any income or revenues (including accounts receivable) or
rights in respect of any thereof, except:




     (a) Liens created pursuant to any Loan Document;




     (b) Permitted Encumbrances;




     (c) any Lien on any Collateral existing on the Effective Date and set forth in
Schedule 6.02; provided that (i) such Lien shall not apply to any other
property or asset forming a part of the Collateral and (ii) such Lien shall secure only
those obligations which it secures on the date



68









 






hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;




     (d) any Lien existing on any Collateral (other than Accounts and Inventory) prior to
the acquisition thereof by any Borrower, including as a result of merger or consolidation
with any Borrower that is permitted pursuant to Section 6.03, or existing on any
Collateral (other than Accounts and Inventory) of any Person that becomes a Borrower after
the date hereof prior to the time such Person becomes a Borrower; provided that (i)
such Lien is not created in contemplation of or in connection with such acquisition, merger
or consolidation or such Person becoming a Borrower and (ii) such Lien shall secure only
those obligations which it secures on the date of such acquisition or the date such Person
becomes a Borrower and extensions, renewals and replacements thereof that do not increase
the outstanding principal amount thereof;




     (e) Liens of a collecting bank arising in the ordinary course of business under
Section 4 210 of the Uniform Commercial Code in effect in the relevant jurisdiction covering
only the items being collected upon; and




     (f) Liens securing a judgment for the payment of money and not constituting an Event
of Default under paragraph (k) of Article VII.


Notwithstanding the foregoing, none of the Permitted Liens may at any time attach to any Borrower’s
Accounts or Inventory, other than those permitted under paragraph (a) of the definition of
Permitted Encumbrance, paragraph (a) above and, in the case of Inventory only, Liens of
landlords and warehousemen that arise in the ordinary course of business under the Requirements of
Law and secure obligations not overdue by more than 30 days or are being contested in compliance
with Section 5.04.




          SECTION 6.03. Fundamental Changes. No Borrower will merge into or consolidate with
any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or
dissolve, except that, if at the time thereof and immediately after giving effect thereto no Event
of Default shall have occurred and be continuing (i) any Borrower may dissolve, merge or liquidate
with or into any other Borrower and (ii) Subsidiary may merge into any Borrower in a transaction in
which such Borrower is the surviving corporation.




          SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. No Borrower
will purchase, hold or acquire (including pursuant to any merger) any Equity Interests, evidences
of indebtedness or other securities (including any option, warrant or other right to acquire any of
the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of,
or make or permit to exist any investment or any other interest in, any other Person, or purchase
or otherwise acquire (in one transaction or a series of transactions) any assets of any other
Person constituting a business unit, whether through purchase of assets, merger or otherwise (all
the foregoing, “Investments”), except:





     (a) Permitted Investments;




     (b) Investments in existence on the date of this Agreement and described in
Schedule 6.04, together with modifications, extensions and renewals thereof;




     (c) Investments by the Borrowers in Equity Interests in their respective Subsidiaries;



69









 






     (d) loans or advances made by any Borrower to any other Borrower; provided
that the amount of such loans and advances made by Subsidiaries that are not Borrowers shall
be subordinated to the Secured Obligations on terms reasonably satisfactory to the
Administrative Agent;




     (e) Guarantees constituting Indebtedness permitted by Section 6.01;




     (f) loans or advances made by a Borrower to its employees in the ordinary course of
business consistent with past practices for travel and entertainment expenses, relocation
costs and similar purposes up to a maximum of $2,000,000 in the aggregate at any one time
outstanding;




     (g) subject to Sections 4.2(a) and 4.4 of the Security Agreement, notes payable, or
stock or other securities issued by Account Debtors to a Borrower pursuant to negotiated
agreements with respect to settlement of such Account Debtor’s Accounts in the ordinary
course of business, consistent with past practices;




     (h) Investments in the form of Swap Agreements permitted by Section 6.07;




     (i) Investments of any Person existing at the time such Person becomes a Borrower or
consolidates or merges with a Borrower (including in connection with a Permitted
Acquisition) so long as such investments were not made in contemplation of such Person
becoming a Borrower or of such merger;




     (j) Investments received in connection with the dispositions of assets permitted by
Section 6.05;




     (k) Permitted Acquisitions;




     (l) Investments in the form of the purchase of the Company Call Options in connection
with the issuance of the Convertible Notes; provided, no Event of Default has
occurred and is continuing immediately prior to or after giving effect thereto;




     (m) loans or advances to directors, officers or employees of any Borrower, the
proceeds of which are concurrently used to purchase Equity Interests in a Borrower;




     (n) advances and loans to, and Investments in, DCO, KACL, KAF, and Trochus in the
ordinary course of business consistent with past practices; provided that (i) no
Event of Default has occurred and is continuing immediately prior to or after giving effect
thereto; and (ii) the sum of (A) the aggregate principal amount of such advances or loans
made after the Effective Date at any one time outstanding plus (B) the amount of such
Investments (other than such advances and loans under clause (A) above) made after the
Effective Date from all of the Borrowers as a group to all of DCO, KACL, KAF and Trochus as
a group, net of any Investments made from DCO, KACL, KAF and Trochus as a group to all of
the Borrowers as a group after the Effective Date, shall not in the aggregate exceed
$20,000,000 at any time;




     (o) Investments in the form of advance payments in connection with any Permitted
Commodity Swap Agreement;



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     (p) Investments in respect of, including by way of contributions to, the VEBA Trusts
pursuant to agreements reached during the Company’s bankruptcy under chapter 11, title 11 of
the U.S. Code;




     (q) Investments constituting deposits described in paragraphs (c) and
(d) of the definition of the term “Permitted Encumbrances”; and




     (r) other Investments not to exceed $5,000,000 in the aggregate at any time
outstanding.



         SECTION 6.05. Asset Sales. No Borrower will sell, transfer, lease or otherwise
dispose of any asset, including any Equity Interest owned by it, except:




     (a) sales, transfers and dispositions of (i) Inventory in the ordinary course of
business and (ii) used, obsolete, worn out or surplus equipment or property in the ordinary
course of business;




     (b) sales, transfers and dispositions to any other Borrower;




     (c) sales, transfers and dispositions of accounts receivable in connection with the
compromise, settlement or collection thereof;




     (d) sales, transfers and dispositions of Permitted Investments;




     (e) sale and leaseback transactions permitted by Section 6.06;




     (f) dispositions resulting from any casualty or other insured damage to, or any taking
under power of eminent domain or by condemnation or similar proceeding of, any property or
asset of any Borrower;




     (g) non-exclusive licenses of intellectual property in the ordinary course of
business;




     (h) if no Default or Event of Default has occurred and is continuing or would result
therefrom, sales, transfers and other dispositions of the Designated Asset Sales; and




     (i) sales, transfers and other dispositions of assets (other than the sale of Equity
Interests that would result in a Change of Control) that are not permitted by any other
paragraph of this Section, provided that the aggregate fair market value of all
assets sold, transferred or otherwise disposed of in reliance upon this paragraph
(i) shall not exceed $25,000,000 during any Fiscal Year of the Company;


provided that all sales, transfers, leases and other dispositions permitted hereby (other
than those permitted by paragraphs (b), (h) and (i) above) shall be made
for fair value and at least 75% of the consideration therefor shall be in cash or assets that can
be readily converted into cash without discount within 90 days thereafter.




          SECTION 6.06. Sale and Leaseback Transactions. No Borrower will enter into any
arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or
personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter
rent or lease such property or other property that it intends to use for substantially the same
purpose or purposes as the property sold or transferred, except for any such sale of any fixed or
capital assets by any Borrower that is made for cash consideration in an amount not less than the
fair value of such fixed or capital asset and is





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consummated within 90 days after such Borrower
acquires or completes the construction of such fixed or capital asset; provided that the
aggregate consideration for all transactions permitted under this Section 6.06, together
with the aggregate principal amount of Indebtedness incurred by the Borrower pursuant to
Section 6.01(n), shall not exceed the amounts set forth in Section 6.01(n).




          SECTION 6.07. Swap Agreements. No Borrower will enter into any Swap Agreement,
except (a) Swap Agreements entered into to hedge or mitigate risks to which any Borrower has actual
exposure (other than those in respect of Equity Interests of any Borrower), and (b) Swap Agreements
entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating
rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing
liability or investment of any Borrower, and (c) Permitted Commodity Swap Agreements.



          SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness. (a) No
Borrower will declare or make, or agree to pay or make, directly or indirectly, any Restricted
Payment, or incur any obligation (contingent or otherwise) to do so, except (i) each Borrower may
declare and pay dividends with respect to its common stock payable solely in additional shares of
its common stock, and, with respect to its preferred stock, payable solely in additional shares of
such preferred stock or in shares of its common stock; (ii) any Borrower (other than the Company)
may declare and pay dividends ratably with respect to their Equity Interests; (iii) any Borrower
may make Restricted Payments to any other Borrower that is its direct parent; (iv) the Company may
use the proceeds of the Convertible Notes to (A) repurchase shares of its common Equity Interests
from one or more holders thereof within 30 days of the issuance of such Convertible Notes and (B)
purchase the Company Call Options, in each case as long as no Default or Event of Default has
occurred and is continuing or would result therefrom; (v) the Company may settle conversions of the
Convertible Notes and settle the Dealer Counterparty Warrants in common stock of the Company or in
cash solely from amounts the Company receives in settlements under the Company Call Options; and
(vi) the Company may make Restricted Payments if no Default or Event of Default has occurred and is
continuing or would result therefrom (A) in an unlimited amount during any period of time when
there are no Revolving Loans outstanding (both immediately before and after giving effect to the
making of any such Restricted Payment) and (B) in an annual amount not to exceed (1) $50,000,000
if Pro Forma Availability at the time the relevant Restricted Payment is made is equal to or
greater than $150,000,000 and (2) $25,000,000 at any time that either (x) Pro Forma Availability at
the time the relevant Restricted Payment is made is less than $150,000,000 but is equal to or
greater than $100,000,000 or (y)(I) Pro Forma Availability at the time the relevant Restricted
Payment is made is less than $100,000,000 but is equal to or greater than $50,000,000 and (II) the
Pro Forma Fixed Charge Coverage Ratio at the time the relevant Restricted Payment is made for the
Test Period in effect at the time such restricted payment is made is greater than 1.1:1.0.



          (b) No Borrower will make or agree to pay or make, directly or indirectly, any payment or
other distribution (whether in cash, securities or other property) of or in respect of principal of
or interest on any Indebtedness, or any payment or other distribution (whether in cash, securities
or other property), including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any Indebtedness, except:




          (i) payment of Indebtedness created under the Loan Documents;




     (ii) payment of regularly scheduled interest and principal payments as and when due in
respect of any Indebtedness, other than payments in respect of the Subordinated Indebtedness
prohibited by the subordination provisions thereof;




          (iii) Capital Lease Obligations permitted by Section 6.01(e); and



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          (iv) any prepayment of Indebtedness in connection with the cancellation, termination
or unwinding of any Permitted Commodity Swap Agreement or Swap Agreement permitted pursuant
to Section 6.07; and




          (v) payment of principal and, if applicable, conversion value on any portion of
Convertible Notes whose holders exercise any right to put or to cash convert such
Indebtedness to any Borrower prior to the maturity of the Convertible Notes to the extent
permitted under Section 6.08(a).



               SECTION 6.09. Transactions with Affiliates. No Borrower will sell, lease or
otherwise transfer any property or assets material to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other material transactions with, any of its
Affiliates, except (a) transactions that (i) are in the ordinary course of business and (ii) are at
prices and on terms and conditions not less favorable to such Borrower than could be obtained on an
arm’s-length basis from unrelated third parties; (b) transactions between or among the Borrowers
not involving any other Affiliate; (c) any Investment permitted by Section 6.04(c) or
(d); (d) any Indebtedness permitted under Section 6.01(c); (e) any Restricted
Payment permitted by Section 6.08; (f) loans or advances to employees, officers and
directors permitted under Section 6.04; (g) the payment of reasonable fees to directors of
any Borrower who are not employees of such Borrower, and compensation and employee benefit
arrangements paid to, and indemnities provided for the benefit of, directors, officers or employees
of the Borrowers in the ordinary course of business; and (h) any issuances of securities or other
payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of,
employment agreements, stock options and stock ownership plans approved by a Borrower’s board of
directors.



               SECTION 6.10. Restrictive Agreements. No Borrower will directly or indirectly, enter
into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of such Borrower to create, incur or permit to exist any
Lien upon any of its property or assets forming a part of the Collateral, or (b) the ability of any
Borrower (other than the Company) to pay dividends or other distributions with respect to any
shares of its Equity Interests or to make or repay loans or advances to any Borrower or to
Guarantee Indebtedness of any Borrower; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by Requirements of Law or by any Loan Document; (ii) the
foregoing shall not apply to restrictions and conditions imposed on the Borrowers existing on the
date hereof identified on Schedule 6.10 (but shall apply to any extension or renewal of, or
any amendment or modification expanding the scope of, any such restriction or condition); (iii) the
foregoing shall not apply to customary restrictions and conditions contained in agreements relating
to the sale of a Borrower pending such sale (provided that such restrictions and conditions
apply only to the Borrower that is to be sold and such sale is permitted hereunder); (iv)
paragraph (a) of the foregoing shall not apply to restrictions or conditions imposed by any
agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing such Indebtedness; and (v) paragraph
(a) of the foregoing shall not apply to customary provisions in leases and other contracts
restricting the assignment thereof.



               SECTION 6.11. Amendment of Material Documents. No Borrower will amend, modify or
waive any of its rights under (a) any agreement relating to any Subordinated Indebtedness that has
the effect of (i) accelerating the date of any payment of principal or interest thereunder, (ii)
increasing the interest rate or fees payable thereunder or converting any interest payable in kind
to current cash pay interest, (iii) amending, modifying or supplementing the subordination
provisions related thereto or (iv) making any provisions related thereto more restrictive or
burdensome on any Borrower; or (b) any Convertible Notes Agreement making any provisions related
thereto materially more restrictive or materially more burdensome on any Borrower.



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          SECTION 6.12. Fixed Charge Coverage Ratio. The Borrowers will not permit the Fixed
Charge Coverage Ratio, as of the last day of any Test Period, to be less than 1.1:1.0;
provided that no Borrower shall be required to comply with this covenant as of the last day
of any Fiscal Month, so long as (a) no Covenant Trigger Period has occurred and is continuing on
the last day of such Fiscal Month and (b) no Covenant Trigger Period occurs after the last day of
such Fiscal Month and on or prior to the last day of the next succeeding Fiscal Month.



ARTICLE VII




Events of Default




     If any of the following events (“Events of Default”) shall occur:




     (a) the Borrowers shall fail to pay any principal of any Loan or any reimbursement
obligation in respect of any LC Disbursement when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for prepayment thereof or
otherwise;




     (b) the Borrowers shall fail to pay any interest on any Loan or any fee or any other
Obligation (other than an amount referred to in paragraph (a) of this Article)
payable pursuant to this Agreement, when and as the same shall become due and payable, and
such failure shall continue unremedied for a period of three Business Days after the date
due;




     (c) any representation or warranty made or deemed made by or on behalf of any Borrower
in or in connection with this Agreement or any other Loan Document or any amendment or
modification thereof or waiver thereunder, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with this Agreement or
any other Loan Document or any amendment or modification thereof or waiver thereunder, shall
prove to have been materially incorrect when made or deemed made;




     (d) any Borrower shall fail to observe or perform any covenant, condition or agreement
contained in Section 5.02(a), 5.03 (with respect to a Borrower’s existence)
or 5.08 or in Article VI or in Article IV or VI of the Security Agreement;




     (e) any Borrower shall fail to observe or perform any covenant, condition or agreement
contained in this Agreement or any other Loan Document (other than those which constitute a
default under another Section of this Article), and such failure shall continue unremedied
for a period of (i) five days after the earlier of any Borrower’s knowledge of such breach
or notice thereof from the Administrative Agent (which notice will be given at the request
of any Lender) if such breach relates to the terms or provisions of Section 5.01,
5.02 (other than Section 5.02(a)) or 5.06 of this Agreement, (ii) 10
days if such breach relates to the terms and provisions of the Security Agreement (other
than Article IV or VI of the Security Agreement), or (iii) 30 days after the earlier of any
Borrower’s knowledge of such breach or notice thereof from the Administrative Agent (which
notice will be given at the request of any Lender) if such breach relates to terms or
provisions of any other Section of this Agreement or the other Loan Documents;




     (f) any Borrower shall fail to make any payment (whether of principal or interest and
regardless of amount) in respect of any Material Indebtedness, when and as the same shall
become due and payable;




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     (g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or without the
giving of notice, the lapse of time or both) the holder or holders of any Material
Indebtedness or any trustee or agent on its or their behalf to cause any Material
Indebtedness to become due, or to require the prepayment, repurchase, redemption or
defeasance thereof, prior to its scheduled maturity; provided that this paragraph
(g) shall not apply to secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness;
provided, further, that an Event of Default shall not result under this
paragraph (g) solely as a result of any holder of the Convertible Notes converting
its Convertible Note of the Company before the scheduled maturity date thereof in connection
with circumstances that do not constitute an event of default or a “fundamental change”
under the Convertible Notes Agreements;




     (h) an involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of any Borrower or
its debts, or of a substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official
for any Borrower or for a substantial part of its assets, and, in any such case, such
proceeding or petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;




     (i) any Borrower shall (i) voluntarily commence any proceeding or file any petition
seeking liquidation, reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner, any proceeding
or petition described in paragraph (h) of this Article, (iii) apply for or consent
to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar
official for such Borrower or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;




     (j) any Borrower shall become unable, admit in writing its inability or fail generally
to pay its debts as they become due;




     (k) one or more judgments for the payment of money in an aggregate amount in excess of
$10,000,000 shall be rendered against any Borrower and the same shall remain undischarged
for a period of 30 consecutive days during which execution shall not be effectively stayed,
or any action shall be legally taken by a judgment creditor to attach or levy upon any
assets of any Borrower to enforce any such judgment or any Borrower shall fail within 30
days to discharge one or more non-monetary judgments or orders which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, which judgments
or orders, in any such case, are not stayed on appeal or otherwise being appropriately
contested in good faith by proper proceedings diligently pursued;




     (l) an ERISA Event shall have occurred that, in the opinion of the Required Lenders,
when taken together with all other ERISA Events that have occurred, could reasonably be
expected to result in liability of $10,000,000 or more;




     (m) a Change in Control shall occur;



75









 






     (n) the breach of any of the terms or provisions of any Loan Document (other than this
Agreement and the Security Agreement), which default or breach continues beyond any period
of grace therein provided;




     (o) the Loan Guaranty shall fail to remain in full force or effect or any action shall
be taken to discontinue or to assert the invalidity or unenforceability of the Loan
Guaranty, or any Loan Guarantor shall fail to comply with any of the terms or provisions of
the Loan Guaranty to which it is a party, or any Loan Guarantor shall deny that it has any
further liability under the Loan Guaranty to which it is a party, or shall give notice to
such effect;




     (p) any Collateral Document shall for any reason fail to create a valid and perfected
first priority security interest in any Collateral purported to be covered thereby, except
as permitted by the terms of any Collateral Document, or any Collateral Document shall fail
to remain in full force or effect or any action shall be taken to discontinue or to assert
the invalidity or unenforceability of any Collateral Document, or any Borrower shall fail to
comply with any of the terms or provisions of any Collateral Document;




     (q) any material provision of any Loan Document for any reason ceases to be valid,
binding and enforceable in accordance with its terms (or any Borrower shall challenge the
enforceability of any Loan Document or shall assert in writing, or engage in any action or
inaction based on any such assertion, that any provision of any of the Loan Documents has
ceased to be or otherwise is not valid, binding and enforceable in accordance with its
terms); or




     (r) any Borrower is criminally indicted or convicted under any law that may reasonably
be expected to lead to a forfeiture of any property of such Borrower having a fair market
value in excess of $20,000,000;


then, and in every such event (other than an event with respect to the Borrowers described in
paragraph (h) or (i) of this Article), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of the Required Lenders
shall, by notice to the Borrower Representative, take either or both of the following actions, at
the same or different times: (i) terminate the Revolving Commitments, and thereupon the Revolving
Commitments shall terminate immediately, and (ii) declare the Loans and other Obligations then
outstanding to be due and payable in whole (or in part, in which case any Obligations not so
declared to be due and payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans and other Obligations so declared to be due and payable, together with
accrued interest thereon and all fees and other Obligations of the Borrowers accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrowers; and in case of any event with respect to
the Borrowers described in paragraph (h) or (i) of this Article, the Revolving
Commitments shall automatically terminate and the unpaid principal of the Loans and other
Obligations then outstanding, together with accrued and unpaid interest thereon and all fees and
other Obligations of the Borrowers accrued hereunder, shall automatically become due and payable,
without presentment, demand, protest or other notice of any kind, all of which are hereby waived by
the Borrowers. Upon the occurrence and during the continuance of an Event of Default, the
Administrative Agent may, and at the request of the Required Lenders shall, exercise any rights and
remedies provided to the Administrative Agent under the Loan Documents or at law or equity,
including all remedies provided under the UCC.







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ARTICLE VIII




The Administrative Agent; Other Agents



          SECTION 8.01. The Administrative Agent.




          Each of the Lender Parties hereby irrevocably appoints the Administrative Agent as its agent
hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such
actions on its behalf, including execution of the other Loan Documents, and to exercise such powers
as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such
actions and powers as are reasonably incidental thereto.




          The bank 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 such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrowers or any of the Subsidiaries or other
Affiliate thereof as if it were not the Administrative Agent hereunder.




          The Administrative Agent shall not have any duties or obligations except those expressly set
forth in the Loan Documents. Without limiting the generality of the foregoing, (a) the
Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing; (b) the Administrative Agent shall not have any
duty to take any discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is
required to exercise in writing as directed by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as provided in Section
9.02); and (c) except as expressly set forth in the Loan Documents, the Administrative Agent
shall not have any duty to disclose, and shall not be liable for the failure to disclose, any
information relating to any Borrower or any of the Subsidiaries that is communicated to or obtained
by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it with the consent
or at the request of the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 9.02) or in the absence
of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to
have knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower Representative or a Lender Party, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with any Loan Document; (ii) the contents of
any certificate, report or other document delivered hereunder or in connection with any Loan
Document; (iii) the performance or observance of any of the covenants, agreements or other terms or
conditions set forth in any Loan Document; (iv) the adequacy, accuracy or completeness of any
information (whether oral or written) set forth or in connection with any Loan Document; (v) the
legality, validity, enforceability, effectiveness, adequacy or genuineness of any Loan Document or
any other agreement, instrument or document; (vi) the creation, perfection or priority of Liens on
the Collateral or the existence of the Collateral; or (vii) the satisfaction of any condition set
forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent.




          The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any representation, notice, request, certificate, consent, statement, instrument,
document or other writing or communication believed by it to be genuine and correct, and to have
been authorized, signed or sent by the proper Person. The Administrative Agent also may rely upon
any statement made to



77









 






it orally or by telephone and believed by it to be made or authorized by the
proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult with legal
counsel (who may be counsel for the Borrowers), independent accountants and other experts selected
by it, and shall not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.




          The Administrative Agent may perform any and all its duties and exercise its rights and powers
by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative
Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the preceding paragraphs
shall apply to any such sub-agent and to the Related Parties of the Administrative 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 the Administrative Agent.




          Subject to the appointment and acceptance of a successor Administrative Agent as provided in
this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the
Issuing Bank and the Borrower Representative. Upon any such resignation, the Required Lenders
shall have the right to appoint a successor with the consent of the Company (if such successor is
not a Lender). If no successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent gives notice of
its resignation, then the retiring Administrative Agent may, on behalf of the Lender Parties,
appoint a successor Administrative Agent, which shall be a commercial bank or an Affiliate of any
such commercial bank, which shall be reasonably satisfactory to the Company. Upon the acceptance
of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed
to and become vested with all the rights, powers, privileges, obligations and duties of the
retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the Borrowers to a
successor Administrative Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrowers and such successor. After the Administrative Agent’s
resignation hereunder, the provisions of this Article, Sections 2.17(d) and 9.03
shall continue in effect for the benefit of such retiring Administrative 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 it was acting as Administrative Agent.




          Each Lender Party acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender Party 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 Party also acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender Party 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.




          Each Lender Party hereby agrees that (a) it has requested a copy of each Report prepared by or
on behalf of the Administrative Agent; (b) the Administrative Agent (i) makes no representation or
warranty, express or implied, as to the completeness or accuracy of any Report or any of the
information contained therein or any inaccuracy or omission contained in or relating to a Report
and (ii) shall not be liable for any information contained in any Report; (c) the Reports are not
comprehensive audits or examinations, and that any Person performing any field examination will
inspect only specific information regarding the Borrowers and will rely significantly upon the
Borrowers’ books and records, as well as on representations of the Borrowers’ personnel and that
the Administrative Agent undertakes




78









 







no obligation to update, correct or supplement the Reports; (d)
it will keep all Reports confidential and strictly for its internal use, and it will not share the
Report with any Borrower or any other Person except
as otherwise permitted pursuant to this Agreement; and (e) without limiting the generality of
any other indemnification provision contained in this Agreement, it will pay and protect, and
indemnify, defend, and hold the Administrative Agent and any such other Person preparing a Report
harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other
amounts (including reasonable attorney fees) incurred by as the direct or indirect result of any
third parties who might obtain all or part of any Report through the indemnifying Lender.




          SECTION 8.02. Other Agents. The Joint Bookrunners, the Joint Lead Arrangers, the
Documentation Agent and the Syndication Agent shall not have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those applicable to all Lenders
as such.




ARTICLE IX




Miscellaneous



          SECTION 9.01. Notices. (a) Except in the case of notices and other communications
expressly permitted to be given by telephone or by other electronic communication (and subject to
paragraph (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 facsimile, as follows:




          (i) if to any Borrower, to the Borrower Representative at:



Kaiser Aluminum Corporation

27422 Portola Parkway, Suite 200

Foothill Ranch, California 92610-2831

Attention: Office of the Chief Financial Officer

Facsimile No.: (949) 614-1930





     (ii) if to the Administrative Agent, the Issuing Bank or the Swingline Lender, to
JPMorgan Chase at:


JPMorgan Chase Bank, N.A.

2200 Ross Avenue, 9th Floor

Mail Code: TX1-2921

Dallas, Texas 75201

Attention: Portfolio Manager

Facsimile No.: (214) 965-2594





     (iii) if to any other Lender, to it at its address or facsimile number set forth in
its Administrative Questionnaire.



         All such notices and other communications (i) sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when received or (ii)
sent by facsimile shall be deemed to have been given when sent; provided 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.



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          (b) Notices and other communications to the Lenders hereunder may be delivered or furnished
by electronic communications (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
pursuant to Article II, to compliance notices or to no Event of Default certificates
delivered pursuant to Section 5.01(d) unless otherwise agreed by the Administrative Agent
and the applicable Lender. The Administrative Agent or the Borrower Representative (on behalf of
the Borrowers) 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. All such
notices and other communications (i) sent 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 not given during the normal business hours of the recipient, such notice
or communication shall be deemed to have been given at the opening of business on the next Business
Day for the recipient, and (ii) 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 (b)(i) of notification that such notice or communication is available and
identifying the website address therefor.




          (c) Any party hereto may change its address or facsimile number for notices and other
communications hereunder by notice to the other parties hereto.




          SECTION 9.02. Waivers; Amendments. (a) No failure or delay by any Lender Party in
exercising any right or power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of the Lender
Parties, hereunder and under any other Loan Document, are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document
or consent to any departure by any Borrower therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which given. Without
limiting the generality of the foregoing, the making of a Loan or the issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether any Lender Party
may have had notice or knowledge of such Default at the time.




          (b) Neither this Agreement nor any other Loan Document nor any provision hereof or thereof
may be waived, amended or modified except (i) in the case of this Agreement, pursuant to an
agreement or agreements in writing entered into by the Borrowers and the Required Lenders or, (ii)
in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Administrative Agent and each Borrower, with the consent of the Required Lenders;
provided that no such agreement shall (i) increase the Revolving Commitment of any Lender
without the written consent of such Lender (provided that the Administrative Agent may make
Protective Advances as set forth in Section 2.04); (ii) reduce or forgive the principal
amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce or forgive
any interest or fees payable hereunder, without the written consent of each Lender directly
affected thereby; (iii) postpone any scheduled date of payment of the principal amount of any Loan
or LC Disbursement, or any date for the payment of any interest, fees or other Obligations payable
hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled
date of expiration of the Revolving Commitment, without the written consent of each Lender directly
affected thereby; (iv) change Section 2.18(b) or (d) in a manner that would alter
the manner in which payments are shared, without the written consent of each Lender; (v) increase
the advance rates set forth in the definition of “Borrowing Base” or add new categories of eligible
assets,



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without the written consent of each Revolving Lender, (vi) change any of the provisions of
this Section or the definition of “Required Lenders” or any other provision of any Loan Document
specifying the number or percentage of Lenders required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without the written consent
of each Lender, (vii) release
any Loan Guarantor from its obligation under its Loan Guaranty (except as otherwise permitted
herein or in the other Loan Documents), without the written consent of each Lender, (viii) except
as provided in paragraphs (c) and (d) of this Section or in any Collateral
Document, release all or substantially all of the Collateral, without the written consent of each
Lender, or (ix) amend the definitions “Dominion Trigger Event”, “Dominion Release Event”, “Dominion
Trigger Period”, “Covenant Trigger Event”, “Covenant Release Event” or “Covenant Trigger Period”,
without the written consent of each Lender, and provided, further, that no such
agreement shall amend, modify or otherwise affect the rights or duties of any Lender Party
hereunder without the prior written consent of such Lender Party. The Administrative Agent may
also amend the Revolving Commitment Schedule to reflect assignments entered into pursuant
to Section 9.04.




          (c) The Lender Parties hereby irrevocably authorize the Administrative Agent, at its option
and in its sole discretion, to release any Liens granted to the Administrative Agent by the
Borrowers on any Collateral (i) upon the termination of all the Revolving Commitments and
indefeasible payment or satisfaction of all the Secured Obligations as provided in Section
2.09(b), (ii) constituting property being sold, assigned, transferred or otherwise disposed of
if the Borrower disposing of such property certifies to the Administrative Agent that such sale,
assignment, transfer or disposition is made in compliance with the terms of this Agreement (and the
Administrative Agent may rely conclusively on any such certificate, without further inquiry), (iii)
constituting property leased to a Borrower under a lease which has expired or been terminated in a
transaction permitted under this Agreement, or (iv) as required to effect any sale or other
disposition of such Collateral in connection with any exercise of remedies of the Administrative
Agent and the Lenders pursuant to Article VII. Except as provided in the preceding
sentence, the Administrative Agent will not release any Liens on Collateral without the prior
written authorization of the Required Lenders; provided that the Administrative Agent may
in its discretion, release its Liens on Collateral valued in the aggregate not in excess of
$2,000,000 during any calendar year without the prior written authorization of the Required
Lenders. Any 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 the Borrowers in
respect of) all interests retained by the Borrowers, including the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.




          (d) If, in connection with any proposed amendment, waiver or consent requiring the consent of
“each Lender” or “each Lender affected thereby”, the consent of the Required Lenders is obtained,
but the consent of other necessary Lenders is not obtained (any such Lender whose consent is
necessary but not obtained being referred to herein as a “Non-Consenting Lender”), then the
Borrowers may elect to replace a Non-Consenting Lender as a Lender party to this Agreement;
provided that, concurrently with such replacement, (i) another bank or other entity which
is reasonably satisfactory to the Borrowers and the Administrative Agent shall agree, as of such
date, to purchase for cash the Loans and other Obligations due to the Non-Consenting Lender
pursuant to an Assignment and Assumption and to become a Lender for all purposes under this
Agreement and to assume all obligations of the Non-Consenting Lender to be terminated as of such
date and to comply with the requirements of paragraph (b) of Section 9.04, and (ii)
the Borrowers shall pay to such Non-Consenting Lender in same day funds on the day of such
replacement (A) all interest, fees and other amounts then accrued but unpaid to such Non-Consenting
Lender by the Borrowers hereunder to and including the date of termination, including without
limitation payments due to such Non-Consenting Lender under Sections 2.15 and 2.17,
and (B) an amount, if any, equal to the payment which would have been due to such Lender on the day
of such






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replacement under Section 2.16 had the Loans of such Non-Consenting Lender been
prepaid on such date rather than sold to the replacement Lender.




          SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrowers shall pay (i)
all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of counsel for the Administrative Agent,
in connection
with the syndication and distribution (including, without limitation, via the internet or
through a service such as Intralinks) of the credit facilities provided for herein, the preparation
and administration of the Loan Documents or any amendments, modifications or waivers of the
provisions of the Loan Documents (whether or not the transactions contemplated hereby or thereby
shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in
connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent,
the Issuing Bank or any Lender, including the fees, charges and disbursements of any counsel for
the Administrative Agent, the Issuing Bank or any Lender, in connection with the enforcement,
collection or protection of its rights in connection with the Loan Documents, including its rights
under this Section, or in connection with the Loans made or Letters of Credit issued hereunder,
including all such out-of pocket expenses incurred in connection with any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit. Expenses being reimbursed by the
Borrowers under this Section include, without limiting the generality of the foregoing, costs and
expenses incurred in connection with:





     (i) subject to Section 5.11, appraisals and insurance reviews;




     (ii) subject to Section 5.12, field examinations and the preparation of
Reports based on the fees charged by a third party retained by the Administrative Agent or
the internally allocated fees for each Person employed by the Administrative Agent with
respect to each field examination (such field examination fees shall be equal, as of the
Effective Date, to $125 per hour per examiner plus out of pocket expenses);




     (iii) taxes, fees and other charges for (A) lien searches and (B) filing financing
statements and continuations, and other actions to perfect, protect, and continue the
Administrative Agent’s Liens;




     (iv) sums paid or incurred to take any action required of any Borrower under the Loan
Documents that such Borrower fails to pay or take; and




     (v) forwarding loan proceeds, collecting checks and other items of payment, and
establishing and maintaining the accounts and lock boxes, and costs and expenses of
preserving and protecting the Collateral.


All of the foregoing costs and expenses may be charged to the Borrowers as Revolving Loans or to
another deposit account, all as described in Section 2.18(c).




          (b) The Borrowers shall, jointly and severally, indemnify each Lender Party and Related Party
thereof (each such Person being called an “Indemnitee”) against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, penalties, incremental taxes, liabilities and
related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result
of any actual or prospective claim, litigation, investigation or proceeding relating to any of the
following, whether based on contract, tort or any other theory and regardless of whether any
Indemnitee is a party thereto (i) the



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execution or delivery of the Loan Documents or any agreement
or instrument contemplated thereby, the performance by the parties hereto of their respective
obligations thereunder or the consummation of the Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit
if the documents presented in connection with such demand do not strictly comply with the terms of
such Letter of Credit), or (iii) any actual or alleged presence or release of Hazardous Materials
on or from any property owned or operated by any Borrower or any of their Subsidiaries, or any
Environmental Liability related in any way to any Borrower or any of their Subsidiaries;
provided that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, penalties, liabilities or related expenses 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 Indemnitee.




          (c) To the extent that the Borrowers fail to pay any amount required to be paid by them to
the Administrative Agent, the Issuing Bank or the Swingline Lender under paragraph (a) or
(b) of this Section, each Lender severally agrees to pay to the Administrative Agent, the
Issuing Bank or the Swingline Lender, as the case may be, such Lender’s Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity payment is sought)
of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim,
damage, penalty, liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent, the Issuing Bank or the Swingline Lender in its capacity as such.




          (d) To the extent permitted by Requirements of Law, no Borrower shall assert, and each hereby
waives, any claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or instrument contemplated
hereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.




          (e) All amounts due under this Section shall be payable promptly after written demand
therefor.




          SECTION 9.04. Successors and Assigns. (a) The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of
Credit), except that (i) no Borrower may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by a Borrower without such consent shall be null and void) and (ii) no
Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance
with this Section (and any other attempted assignment or transfer by any party hereto shall be null
and void). 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
(including any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to
the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Agents, the Issuing Bank and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.




          (b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may
assign to one or more assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Revolving Commitment and the Loans at the time owing to it) with
the prior written consent (such consent not to be unreasonably withheld) of:





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     (A) the Borrower Representative, provided that no consent of the
Borrower Representative shall be required for an assignment to a Lender, an
Affiliate of a Lender, any Approved Fund, a successor-in-interest to a Lender
pursuant to a consolidation, sale or merger or, if an Event of Default has occurred
and is continuing, any other assignee;




     (B) the Administrative Agent; and




     (C) the Issuing Bank.



          (ii) Assignments shall be subject to the following additional conditions:





     (A) except in the case of an assignment to a Lender, an Affiliate of a Lender
or a successor-in-interest to a Lender pursuant to a consolidation, sale or merger,
or an assignment of the entire remaining amount of the assigning Lender’s Revolving
Commitment or Loans, the amount of the Revolving Commitment or 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) shall not be less than $5,000,000 unless each of the Borrower
Representative and the Administrative Agent otherwise consent; provided that
no such consent of the Borrower Representative shall be required if an Event of
Default has occurred and is continuing;




     (B) 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;




     (C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing and
recordation fee of $3,500; and




     (D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in which the assignee
designates one or more credit contacts to whom all syndicate-level information
(which may contain material non-public information about the Company, the other
Borrowers and their Related Parties or their respective securities) will be made
available and who may receive such information in accordance with the assignee’s
compliance procedures and applicable laws, including Federal and state securities
laws.



          For the purposes of this Section 9.04(b), the term “Approved Fund” has the
following meaning:




          “Approved 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 of its business and 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.



     (iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this
Section, from and after the effective date specified in each Assignment and Assumption the assignee
thereunder shall be a party hereto 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 extent of the interest assigned by such





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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 2.15, 2.16,
2.17 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 9.04 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 paragraph (c) of this Section.




     (iv) The Administrative Agent, acting for this purpose as an agent of the Borrowers
and the Lender Parties, shall maintain at one of its offices 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 Revolving Commitment of, and principal amount of the Loans and LC
Disbursements 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 Borrowers and the
Lender Parties may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender or Issuing Bank, as the case may be, hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrowers, the Issuing Bank and any Lender, at any reasonable time and
from time to time upon reasonable prior notice.




     (v) Upon its receipt of a duly completed Assignment and Assumption executed by an
assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire
(unless the assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative Agent shall
accept such Assignment and Assumption and record the information contained therein in the
Register; provided that if either the assigning Lender or the assignee shall have
failed to make any payment required to be made by it pursuant to Section 2.05,
2.06(d) or (e), 2.07(b), 2.18(d), or 9.03(c), the
Administrative Agent shall have no obligation to accept such Assignment and Assumption and
record the information therein in the Register unless and until such payment shall have been
made in full, together with all accrued interest thereon. No assignment shall be effective
for purposes of this Agreement unless it has been recorded in the Register as provided in
this paragraph.



          (c) (i) Any Lender may, without the consent of the Borrowers, the Administrative Agent, the
Issuing Bank or the Swingline Lender, sell participations to one or more banks or other entities (a
“Participant”) in all or a portion of such Lender’s rights and obligations under this
Agreement (including all or a portion of its Revolving Commitment and the Loans owing to it);
provided that (A) such Lender’s obligations under this Agreement shall remain unchanged,
(B) such Lender shall remain solely responsible to the other parties hereto for the performance of
such obligations and (C) the Borrowers, the Agents, the Issuing Bank and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision of this Agreement;
provided that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 9.02(b) that affects such Participant. Subject to paragraph
(c)(ii) of this Section, the Borrowers agree that each Participant shall be entitled to the
benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of this
Section. To the extent permitted by law, each Participant also shall be entitled to the benefits
of Section 9.08 as though it were a Lender; provided that such Participant agrees
to be subject to Section 2.18(c) as though it were a Lender. Each Participant shall



85









 




agree to be subject, on terms reasonably satisfactory to the Borrower Representative, to the
confidentiality provisions set forth in Section 9.12.





     (ii) A Participant shall not be entitled to receive any greater payment under
Section 2.15 or 2.17 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower Representative’s prior written
consent. A Participant that would be a Lender that is not a U.S. Person if it were a Lender
shall not be entitled to the benefits of Section 2.17 unless the Borrower
Representative is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrowers, to comply with Section 2.17(f)
as though it were a Lender.



          (d) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including, without
limitation, any pledge or assignment to secure obligations to a Federal Reserve Bank, 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 as a party hereto.



          SECTION 9.05. Survival. All covenants, agreements, representations and warranties
made by the Borrowers 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 any Lender
Party may have had notice or knowledge of any 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. The provisions of Sections 2.15, 2.16,
2.17 and 9.03 and Article VIII shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the Revolving Commitments or the
termination of this Agreement or any provision hereof.



          SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different counterparts), each of which
shall constitute an original, but all of which when taken together shall constitute a single
contract. This Agreement, the other Loan Documents and any separate letter agreements with respect
to fees payable to the Administrative Agent 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
which, when taken together, bear the signatures of each of the other parties hereto, and thereafter
shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement
by facsimile or PDF transmission shall be effective as delivery of a manually executed counterpart
of this Agreement.



          SECTION 9.07. Severability. Any provision of any Loan Document held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of



86









 




such invalidity, illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions thereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other jurisdiction.




          SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other obligations at any
time owing by such Lender or Affiliate to or for the credit or the account of the Borrowers against
any of and all the Secured Obligations held by such Lender, irrespective of whether or not such
Lender shall have made any demand under the Loan Documents and although such obligations may be
unmatured. The applicable Lender shall notify the Borrower Representative and the Administrative
Agent of such set-off or application, provided that any failure to give or any delay in giving such
notice shall not affect the validity of any such set-off or application under this Section. The
rights of each Lender under this Section are in addition to other rights and remedies (including
other rights of setoff) which such Lender may have.



          SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process. (a) The
Loan Documents (other than those containing a contrary express choice of law provision) shall be
governed by and construed in accordance with the laws of the State of New York, but giving effect
to federal laws applicable to national banks.



          (b) Each Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the non-exclusive jurisdiction of any U.S. Federal or New York State court sitting in
the Borough of Manhattan, New York in any action or proceeding arising out of or relating to any
Loan Documents, or for recognition or enforcement of any judgment, and each of the parties hereto
hereby 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 or, to the extent permitted by 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 any other Loan
Document shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or any other Loan
Document against any Borrower or its properties in the courts of any jurisdiction.



          (c) Each Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or hereafter have to the laying of
venue of any suit, 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 law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such court.



          (d) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 9.01. Nothing in this Agreement or any other Loan Document
will affect the right of any party to this Agreement to serve process in any other manner permitted
by law.



          SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY 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, ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON



87









 




CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
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 BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.




          SECTION 9.11. Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and shall not affect
the construction of, or be taken into consideration in interpreting, this Agreement.



          SECTION 9.12. Confidentiality. Each of the Lender Parties agrees to maintain the
confidentiality of the Information (as defined below), except that Information may be disclosed (a)
to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal
counsel and other advisors (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory authority, (c) to the
extent required by Requirement of Laws or by any subpoena or similar legal process, (d) to any
other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement
of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially
the same as those of this Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating
to the Borrowers and their obligations, (g) with the consent of the Borrower Representative or (h)
to the extent such Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to any Lender Party on a non-confidential basis from a
source other than the Borrowers. For the purposes of this Section, “Information” means all
information received from the Borrowers relating to the Borrowers or their business, operations,
assets, liabilities, financial condition or position, results or operations, or prospects, other
than any such information that is available to any Lender Party on a non-confidential basis prior
to disclosure by the Borrowers. 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 the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.



          EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN 9.12 FURNISHED TO IT PURSUANT TO THIS
AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE COMPANY AND ITS AFFILIATES AND
THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED
COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE
SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW,
INCLUDING FEDERAL AND STATE SECURITIES LAWS.



          ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE BORROWERS OR
THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE
SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE COMPANY,
THE OTHER BORROWERS AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY, EACH



88









 




LENDER REPRESENTS TO THE BORROWERS AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS
ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL
NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING
FEDERAL AND STATE SECURITIES LAWS.




          SECTION 9.13. Several Obligations; Nonreliance; Violation of Law. The respective
obligations of the Lenders hereunder are several and not joint and the failure of any Lender to
make any Loan or perform any of its obligations hereunder shall not relieve any other Lender from
any of its obligations hereunder. Each Lender hereby represents that it is not relying on or
looking to any margin stock for the repayment of the Borrowings provided for herein. Anything
contained in this Agreement to the contrary notwithstanding, neither the Issuing Bank nor any
Lender shall be obligated to extend credit to the Borrowers in violation of any Requirement of Law.



          SECTION 9.14. USA PATRIOT Act. Each Lender that is subject to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
“Act”) hereby notifies the Borrowers that pursuant to the requirements of the Act, it is
required to obtain, verify and record information that identifies the Borrowers, which information
includes the names and addresses of the Borrowers and other information that will allow such Lender
to identify the Borrowers in accordance with the Act.



          SECTION 9.15. Disclosure. Each Borrower and each Lender hereby acknowledges and
agrees that the Administrative Agent and/or its Affiliates from time to time may hold investments
in, make other loans to or have other relationships with any of the Borrowers and their respective
Affiliates.



          SECTION 9.16. Appointment for Perfection. Each Lender Party hereby appoints each
other Lender Party as its agent for the purpose of perfecting Liens, for the benefit of the Lender
Parties, in assets which, in accordance with Article 9 of the UCC or any other applicable law can
be perfected only by possession. Should any Lender Party (other than the Administrative Agent)
obtain possession of any such Collateral, such Lender Party shall notify the Administrative Agent
thereof, and, promptly upon the Administrative Agent’s request therefor shall deliver such
Collateral to the Administrative Agent or otherwise deal with such Collateral in accordance with
the Administrative Agent’s instructions.



          SECTION 9.17. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges
and other amounts which are treated as interest on such Loan under applicable law (collectively the
“Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be
contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance
with applicable law, the rate of interest payable in respect of such Loan hereunder, together with
all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent
lawful, the interest and Charges that would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be increased (but not
above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.



89









 





ARTICLE X




Loan Guaranty



          SECTION 10.01. Guaranty. Each Loan Guarantor hereby agrees that it is jointly and
severally liable for, and absolutely and unconditionally guarantees to the Lender Parties, the
prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all
times thereafter, of the Secured Obligations and all costs and expenses including, without
limitation, all court costs and reasonable attorneys’ and paralegals’ fees (including reasonable
allocated costs of in-house counsel and paralegals) and expenses paid or incurred by the Lender
Parties in endeavoring to collect all or any part of the Secured Obligations from, or in
prosecuting any action against, any Borrower, any Loan Guarantor or any other guarantor of all or
any part of the Secured Obligations (such costs and expenses, together with the Secured
Obligations, collectively the “Guaranteed Obligations”). Each Loan Guarantor further agrees
that the Guaranteed Obligations may be extended or renewed in whole or in part without notice to or
further assent from it, and that it remains bound upon its guarantee notwithstanding any such
extension or renewal. All terms of this Loan Guaranty apply to and may be enforced by or on behalf
of any domestic or foreign branch or Affiliate of any Lender Party that extended any portion of the
Guaranteed Obligations.



          SECTION 10.02. Guaranty of Payment. This Loan Guaranty is a guaranty of payment and
not of collection. Each Loan Guarantor waives any right to require any Lender Party to sue any
Borrower, any other Loan Guarantor, any other guarantor, or any other Person obligated for all or
any part of the Guaranteed Obligations (each, an “Obligated Party”), or otherwise to
enforce its payment against any collateral securing all or any part of the Guaranteed Obligations.



          SECTION 10.03. No Discharge or Diminishment of Loan Guaranty. (a) The obligations
of each Loan Guarantor hereunder are unconditional and absolute and not subject to any reduction,
limitation, impairment or termination for any reason (other than the indefeasible payment or
satisfaction of the Guaranteed Obligations as provided in Section 2.09(b)), including: (i)
any claim of waiver, release, extension, renewal, settlement, surrender, alteration, or compromise
of any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any change in the
corporate existence, structure or ownership of any Borrower or any other guarantor of or other
person liable for any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any Obligated Party, or their assets or any
resulting release or discharge of any obligation of any Obligated Party; (iv) the existence of any
claim, setoff or other rights which any Loan Guarantor may have at any time against any Obligated
Party, any Lender Party or any other Person, whether in connection herewith or in any unrelated
transactions; or (v) any law or regulation of any jurisdiction or any other event affecting any
term of a Guaranteed Obligation.



          (b) The obligations of each Loan Guarantor hereunder are not subject to any defense or
setoff, counterclaim, recoupment, or termination whatsoever by reason of the invalidity,
illegality, or unenforceability of any of the Guaranteed Obligations or otherwise, or any provision
of applicable law or regulation purporting to prohibit payment by any Obligated Party, of the
Guaranteed Obligations or any part thereof.



          (c) Further, the obligations of any Loan Guarantor hereunder are not discharged or impaired
or otherwise affected by: (i) the failure of any Lender Party to assert any claim or demand or to
enforce any remedy with respect to all or any part of the Guaranteed Obligations; (ii) any waiver
or modification of or supplement to any provision of any agreement relating to the Guaranteed
Obligations; (iii) any release, non-perfection, or invalidity of any indirect or direct security
for the obligations of any



90









 




Borrower for all or any part of the Guaranteed Obligations or any obligations of any other
guarantor of or other person liable for any of the Guaranteed Obligations; (iv) any action or
failure to act by any Lender Party with respect to any collateral securing any part of the
Guaranteed Obligations; or (v) any default, failure or delay, willful or otherwise, in the payment
or performance of any of the Guaranteed Obligations, or any other circumstance, act, omission or
delay that might in any manner or to any extent vary the risk of such Loan Guarantor or that would
otherwise operate as a discharge of any Loan Guarantor as a matter of law or equity (other than the
indefeasible payment or satisfaction of the Guaranteed Obligations as provided in Section 2.09
(b)).




          SECTION 10.04. Defenses Waived. To the fullest extent permitted by applicable law,
each Loan Guarantor hereby waives any defense based on or arising out of any defense of any
Borrower or any Loan Guarantor or the unenforceability of all or any part of the Guaranteed
Obligations from any cause, or the cessation from any cause of the liability of any Borrower or any
Loan Guarantor, other than the indefeasible payment or satisfaction of the Guaranteed Obligations
as provided in Section 2.09(b). Without limiting the generality of the foregoing, each Loan
Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and, to the fullest
extent permitted by law, any notice not provided for herein, as well as any requirement that at any
time any action be taken by any person against any Obligated Party or any other Person. Each Loan
Guarantor confirms that it is not a surety under any state law and shall not raise any such law as
a defense to its obligations hereunder. The Administrative Agent may, at its election, following
the occurrence of an Event of Default, foreclose on any Collateral held by it by one or more
judicial or nonjudicial sales, accept an assignment of any such Collateral in lieu of foreclosure
or otherwise act or fail to act with respect to any collateral securing all or a part of the
Guaranteed Obligations, compromise or adjust any part of the Guaranteed Obligations, make any other
accommodation with any Obligated Party or exercise any other right or remedy available to it
against any Obligated Party, without affecting or impairing in any way the liability of such Loan
Guarantor under this Loan Guaranty except to the extent the Guaranteed Obligations have been fully
and indefeasibly paid or satisfied as provided in Section 2.09(b). To the fullest extent
permitted by applicable law, each Loan Guarantor waives any defense arising out of any such
election even though that election may operate, pursuant to applicable law, to impair or extinguish
any right of reimbursement or subrogation or other right or remedy of any Loan Guarantor against
any Obligated Party or any security.



          SECTION 10.05. Rights of Subrogation. No Loan Guarantor will assert any right, claim
or cause of action, including, without limitation, a claim of subrogation, contribution or
indemnification that it has against any Obligated Party, or any collateral, until the Loan
Guarantors have fully performed all their obligations to the Lender Parties and the Guaranteed
Obligations have been fully and indefeasibly paid or satisfied as provided in Section
2.09(b).



          SECTION 10.06. Reinstatement; Stay of Acceleration. If at any time any payment of
any portion of the Guaranteed Obligations is rescinded or must otherwise be restored or returned
upon the insolvency, bankruptcy, or reorganization of any Borrower or otherwise, each Loan
Guarantor’s obligations under this Loan Guaranty with respect to that payment shall be reinstated
at such time as though the payment had not been made and whether or not the Lender Parties are in
possession of this Loan Guaranty. If acceleration of the time for payment of any of the Guaranteed
Obligations is stayed upon the insolvency, bankruptcy or reorganization of any Borrower, all such
amounts otherwise subject to acceleration under the terms of any agreement relating to the
Guaranteed Obligations shall nonetheless be payable by the Loan Guarantors forthwith on demand by
the Lender Parties.



          SECTION 10.07. Information. Each Loan Guarantor assumes all responsibility for being
and keeping itself informed of the Borrowers’ financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature,
scope



91









 




and extent of the risks that each Loan Guarantor assumes and incurs under this Loan Guaranty,
and agrees that no Lender Party shall have any duty to advise any Loan Guarantor of information
known to it regarding those circumstances or risks.




          SECTION 10.08. Termination. The Lenders may continue to make loans or extend credit
to the Borrowers based on this Loan Guaranty until five days after it receives written notice of
termination from any Loan Guarantor. Notwithstanding receipt of any such notice, each Loan
Guarantor will continue to be liable to the Lenders for any Guaranteed Obligations created, assumed
or committed to prior to the fifth day after receipt of the notice, and all subsequent renewals,
extensions, modifications and amendments with respect to, or substitutions for, all or any part of
that Guaranteed Obligations.



          SECTION 10.09. Taxes. All payments of the Guaranteed Obligations will be made by
each Loan Guarantor free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if any Loan Guarantor shall be required to deduct any Indemnified Taxes or
Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to additional sums payable
under this Section) the Administrative Agent, Lender or Issuing Bank (as the case may be) receives
an amount equal to the sum it would have received had no such deductions been made, (ii) such Loan
Guarantor shall make such deductions and (iii) such Loan Guarantor shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable law.



          SECTION 10.10. Maximum Liability. The provisions of this Loan Guaranty are
severable, and in any action or proceeding involving any state corporate law, or any state, federal
or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors
generally, if the obligations of any Loan Guarantor under this Loan Guaranty would otherwise be
held or determined to be avoidable, invalid or unenforceable on account of the amount of such Loan
Guarantor’s liability under this Loan Guaranty, then, notwithstanding any other provision of this
Loan Guaranty to the contrary, the amount of such liability shall, without any further action by
the Loan Guarantors or the Lender Parties, be automatically limited and reduced to the highest
amount that is valid and enforceable as determined in such action or proceeding (such highest
amount determined hereunder being the relevant Loan Guarantor’s “Maximum Liability”). This
Section with respect to the Maximum Liability of each Loan Guarantor is intended solely to preserve
the rights of the Lender Parties to the maximum extent not subject to avoidance under applicable
law, and no Loan Guarantor nor any other person or entity shall have any right or claim under this
Section with respect to such Maximum Liability, except to the extent necessary so that the
obligations of any Loan Guarantor hereunder shall not be rendered voidable under applicable law.
Each Loan Guarantor agrees that the Guaranteed Obligations may at any time and from time to time
exceed the Maximum Liability of each Loan Guarantor without impairing this Loan Guaranty or
affecting the rights and remedies of the Lender Parties hereunder; provided that, nothing
in this sentence shall be construed to increase any Loan Guarantor’s obligations hereunder beyond
its Maximum Liability.



          SECTION 10.11. Contribution. In the event any Loan Guarantor (a “Paying
Guarantor”) shall make any payment or payments under this Loan Guaranty or shall suffer any
loss as a result of any realization upon any collateral granted by it to secure its obligations
under this Loan Guaranty, each other Loan Guarantor (each a “Non-Paying Guarantor”) shall
contribute to such Paying Guarantor an amount equal to such Non-Paying Guarantor’s “Applicable
Percentage” of such payment or payments made, or losses suffered, by such Paying Guarantor. For
purposes of this Article X, each Non-Paying Guarantor’s “Applicable Percentage” with
respect to any such payment or loss by a Paying Guarantor shall be determined as of the date on
which such payment or loss was made by reference to the ratio of (i) such Non-Paying Guarantor’s
Maximum Liability as of such date (without giving effect to any right to receive,



92









 




or obligation to make, any contribution hereunder) or, if such Non-Paying Guarantor’s Maximum
Liability has not been determined, the aggregate amount of all monies received by such Non-Paying
Guarantor from the Borrowers after the date hereof (whether by loan, capital infusion or by other
means) to (ii) the aggregate Maximum Liability of all Loan Guarantors hereunder (including such
Paying Guarantor) as of such date (without giving effect to any right to receive, or obligation to
make, any contribution hereunder), or to the extent that a Maximum Liability has not been
determined for any Loan Guarantor, the aggregate amount of all monies received by such Loan
Guarantors from the Borrowers after the date hereof (whether by loan, capital infusion or by other
means). Nothing in this provision shall affect any Loan Guarantor’s several liability for the
entire amount of the Guaranteed Obligations (up to such Loan Guarantor’s Maximum Liability). Each
of the Loan Guarantors covenants and agrees that its right to receive any contribution under this
Loan Guaranty from a Non-Paying Guarantor shall be subordinate and junior in right of payment to
the payment in full in cash of the Guaranteed Obligations. This provision is for the benefit of
both the Lender Parties and the Loan Guarantors and may be enforced by any one, or more, or all of
them in accordance with the terms hereof.




          SECTION 10.12. Liability Cumulative. The liability of each Borrower as a Loan
Guarantor under this Article X is in addition to and shall be cumulative with all
liabilities of each Borrower to the Lender Parties under this Agreement and the other Loan
Documents to which such Borrower is a party or in respect of any obligations or liabilities of the
other Borrowers, without any limitation as to amount, unless the instrument or agreement evidencing
or creating such other liability specifically provides to the contrary.



ARTICLE XI




The Borrower Representative



          SECTION 11.01. Appointment; Nature of Relationship. The Company is hereby appointed
by each of the Borrowers as its contractual representative (herein referred to as the “Borrower
Representative”) hereunder and under each other Loan Document, and each of the Borrowers
irrevocably authorizes the Borrower Representative to act as the contractual representative of such
Borrower with the rights and duties expressly set forth herein and in the other Loan Documents.
The Borrower Representative agrees to act as such contractual representative upon the express
conditions contained in this Article XI. Additionally, the Borrowers hereby appoint the
Borrower Representative as their agent to receive all of the proceeds of the Loans in the Funding
Account(s), at which time the Borrower Representative shall promptly disburse such Loans to the
appropriate Borrower, provided that, in the case of a Revolving Loan, such amount shall not exceed
such Borrower’s Availability. None of the Lender Parties, nor any of their respective officers,
directors, agents or employees, shall be liable to the Borrower Representative or any Borrower for
any action taken or omitted to be taken by the Borrower Representative or the Borrowers pursuant to
this Section 11.01.



          SECTION 11.02. Powers. The Borrower Representative shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the Borrower Representative by the
terms of each thereof, together with such powers as are reasonably incidental thereto. The
Borrower Representative shall have no implied duties to the Borrowers, or any obligation to the
Lender Parties to take any action thereunder except any action specifically provided by the Loan
Documents to be taken by the Borrower Representative.



          SECTION 11.03. Employment of Agents. The Borrower Representative may execute any of
its duties as the Borrower Representative hereunder and under any other Loan Document by or through
authorized officers.



93









 





          SECTION 11.04. Notices. Each Borrower shall immediately notify the Borrower
Representative of the occurrence of any Default hereunder referring to this Agreement describing
such Default and stating that such notice is a “notice of default.” In the event that the Borrower
Representative receives such a notice, the Borrower Representative shall give prompt notice thereof
to the Administrative Agent and the other Lender Parties. Any notice provided to the Borrower
Representative hereunder shall constitute notice to each Borrower on the date received by the
Borrower Representative.



          SECTION 11.05. Successor Borrower Representative. Upon the prior written consent of
the Administrative Agent, the Borrower Representative may resign at any time, such resignation to
be effective upon the appointment of a successor Borrower Representative. The Administrative Agent
shall give prompt written notice of such resignation to the Lender Parties.



          SECTION 11.06. Execution of Loan Documents; Borrowing Base Certificate. The
Borrowers hereby empower and authorize the Borrower Representative, on behalf of the Borrowers, to
execute and deliver to the Lender Parties the Loan Documents and all related agreements,
certificates, documents, or instruments as shall be necessary or appropriate to effect the purposes
of the Loan Documents, including without limitation, the Borrowing Base Certificates and the
Compliance Certificates. Each Borrower agrees that any action taken by the Borrower Representative
or the Borrowers in accordance with the terms of this Agreement or the other Loan Documents, and
the exercise by the Borrower Representative 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
Borrowers.



          SECTION 11.07. Reporting. Each Borrower hereby agrees that such Borrower shall
furnish promptly after each Fiscal Month to the Borrower Representative a copy of its Borrowing
Base Certificate and any other certificate or report required hereunder or requested by the
Borrower Representative on which the Borrower Representative shall rely to prepare the Borrowing
Base Certificates and the Compliance Certificates required pursuant to the provisions of this
Agreement.




94











 






     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by
their respective authorized officers as of the day and year first above written.



	 	 	 	 	 
	 	BORROWERS:




KAISER ALUMINUM CORPORATION

 	 
	 	By:  	/s/
Daniel J. Rinkenberger 	 
	 	 	Name:  	Daniel J. Rinkenberger 	 
	 	 	Title:  	Senior Vice President and Chief Financial

Officer 	 
	 
	 	KAISER ALUMINUM INVESTMENTS COMPANY

 	 
	 	By  	/s/
Daniel J. Rinkenberger 	 
	 	 	Name:  	Daniel J. Rinkenberger 	 
	 	 	Title:  	Senior Vice President and Chief Financial

Officer 	 
	 
	 	KAISER ALUMINUM FABRICATED

PRODUCTS, LLC

 	 
	 	By  	/s/
Daniel J. Rinkenberger 	 
	 	 	Name:  	Daniel J. Rinkenberger 	 
	 	 	Title:  	Senior Vice President and Chief Financial

Officer 	 
	 
	 	KAISER ALUMINIUM INTERNATIONAL, INC.

 	 
	 	By  	/s/
Daniel J. Rinkenberger 	 
	 	 	Name:  	Daniel J. Rinkenberger 	 
	 	 	Title:  	Senior Vice President and Chief Financial

Officer 	 
	 



Credit Agreement

Signature Page








 









 








	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A., as Administrative

Agent, Issuing Bank, Swingline Lender and Lender

 	 
	 	By  	/s/
Teresa B. Keckler	 
	 	 	Name:  	Teresa B. Keckler	 
	 	 	Title:  	Vice President 	 
	 



Credit Agreement

Signature Page







 









 








	 	 	 	 	 
	 	WELLS FARGO CAPITAL FINANCE, LLC, as Lender

 	 
	 	By  	/s/ Mark Bradford	 
	 	 	Name:  	Mark Bradford	 
	 	 	Title:  	Vice President	 
	 



Credit Agreement

Signature Page







 









 








	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as Lender

 	 
	 	By  	/s/
Robert M. Dalton	 
	 	 	Name:  	Robert M. Dalton	 
	 	 	Title:  	Vice President	 
	 



Credit Agreement

Signature Page







 









 








	 	 	 	 	 
	 	PNC BANK, NATIONAL ASSOCIATION, as Lender

 	 
	 	By  	/s/
Dale A. Stein	 
	 	 	Name:  	Dale A. Stein	 
	 	 	Title:  	Senior Vice President	 
	 



Credit Agreement

Signature Page











 









 








REVOLVING COMMITMENT SCHEDULE




	 	 	 	 	 
	 	 	Revolving	 
	Lender	 	Commitment	 
	JPMorgan Chase Bank, N.A.
	 	$	57,500,000	 
	Wells Fargo Capital Finance, LLC.
	 	$	57,500,000	 
	Bank of America, N.A.
	 	$	50,000,000	 
	PNC Bank, National Association
	 	$	35,000,000	 
	Total
	 	$	200,000,000	 







 











 





Schedule 1.01(a)

Designated Asset Sales





	1.	 	Sale of approximately 400 acres of vacant land in Spokane County, Washington located in an
area bounded by US Highway 2 to the west, Farwell Road to the north, the North/South Freeway
to the east, and the Bonneville Power Authority east/west power line to the south.
	 
	2.	 	Sale of real and personal property located at 1508 Highway 246 South, Greenwood, SC 29646.
	 
	3.	 	Sale of real and personal property located at 4111 S. 4th E. Avenue, Tulsa, OK 74194.
	 
	4.	 	Sale of all or a portion of the 49% interest in Anglesey Aluminium Limited owned by Kaiser
Aluminum Investments Company.




 









 











Schedule 1.01(b)

Designated Account Debtors




AIRBUS GROUP (including, but not limited to the following)



 AEROLIA SAS

AIRBUS OPERATIONS LTD

AIRBUS OPERATIONS SAS

AIRBUS OPERATIONS GMBH

ELBE AIRBUS FLUGZEUGWERKE GMBH

EADS CASA

EADS SOGERMA SERVICES

EUROCOPTER DEUTSCHLAND GMBH

LATECOERE S.A.

PREMIUM AEROTEC GMBH

PFW AEROSPACE AG

SABCA




AM CASTLE GROUP (including, but not limited to the following)



 AM CASTLE MATERIALS (SHANGHAI) CO LTD

CASTLE METALS DE MEXICO SA

TRANSTAR METALS FRANCE




THYSSENKRUPP GROUP (including, but not limited to the following)



 THYSSENKRUPP AEROSPACE AUSTRALIA PTY LTD

THYSSENKRUPP GMBH

THYSSENKRUPP MATERIALS FRANCE

THYSSENKRUPP VDM GMBH




TW METALS GROUP (including, but not limited to the following)



 TW METALS INDIA

TW METALS POLSKA SP ZOO

TW METALS S.A.R.L.




ALL METAL SERVICES GROUP (including, but not limited to the following)



 ALL METAL SERVICES FRANCE

ALL METAL SERVICES CHINA




CONTINENTAL AUTOMOTIVE GROUP (including, but not limited to the following)



 CONTINENTAL AUTOMOTIVE MEXICO

CONTINENTAL AUTOMOTIVE DO BRASIL LTDA.

CONTINENTAL TEVES AG & CO OHG

CONTINENTAL TEVES CZECH REPUBLIC




RELIANCE GROUP



 RELIANCE FOREIGN ACCOUNTS INCLUDED ON RELIANCE LIST








 









 








SCHEDULE 1.01(b) (continued)




OTHERS



 AAM INTERNATIONAL SARL (AMERICAN AXLE MEXICO)

ACEROS FORTUNA SA DE CV

AGUSTA SPA

BTI METAL CENTER LTD

ALENIA AERONAUTICA SPA

ALUM DEVELOPING INC

ALUMINIUM TECHNOLOGIE SCHMID

ALUMINUM PECHINEY

ATELIERS DE LA HAUTE-GARONNE

AUBERT & DUVAL

CALM ALUMINUM

DANA GLOBAL PRODUCTS INC

EATON INDUSTRIES GMBH

EMBRAER-EMPRESA BRASILEIRA DE AERONAUTICA SA

ENAER — EMPRESA NACIONAL AERONAUTICA CHILE

FIGEAC-AERO

FUTURE METALS INC

GARMCO PTE LTD

ISYFAST

KASTENS&KNAUER GMBH & CO

MANOIR INDUSTRIES

MARMON/KEYSTONE DE MEXICO

MECANIQUE AERONAUTIQUE PYRENEENNE

METALKOR INDUSTRIES LTD

NEUMAN ALUMINUM AUSTRIA GMBH

OTTO FUCHS KG

PECHINEY AVIATUBE

REGE MOTORENTEILE GMBH

RIO TINTO ALUMINIUM LIMITED

ROBERT BOSCH GMBH

ROTHE ERDE GMBH

RUAG SWITZERLAND LTD

SAFRA SPA

SCOPE MTL TRADING & TECH SVCE

SERVICE CENTRES AERO FRANCE

STARKE SINGAPORE PTE LTD

SYOTEC SA DE CV

TOYOTA TSUSHO AMERICA, INC.

WABCO EUROPE BVBA

ZF LEMFORDER FAHRWERKTECHNIK





 









 








Schedule 1.01(c)

Significant Subsidiaries



 Kaiser Aluminum Investments Company

Kaiser Aluminum Fabricated Products, LLC

Kaiser Aluminium International, Inc.






 









 








Schedule 1.01(d)

Reliance Account Debtors



 AFFILIATED METALS INC

AMERICAN METALS CORPORATION

AMI METALS EUROPE

AMI METALS INC

BRALCO METALS

BRALCO METALS PACIFIC NW DIV

BRALCO METALS SOUTHWEST

CHATHAM STEEL CORP

CLAYTON METALS INC

EARLE M JORGENSEN COMPANY

EARLE M JORGENSEN (CANADA) INC

EVEREST METALS CO LTD (CHINA)

HAGERTY STEEL ALUMINUM

LIEBOVICH BROS INC

LUSK METALS

METALCENTER INC

OLYMPIC METALS INC

PACIFIC METAL COMPANY

PHOENIX METALS COMPANY

RELIANCE METAL CENTER

RELIANCE STEEL & ALUMINUM CO

SISKIN STEEL & SUPPLY CO

STEEL BAR CORP

TUBE SERVICE COMPANY

VIKING MATERIALS

YARDE METALS INC.






 









 








Schedule 1.01(e)

Existing Loans



 None






 









 








Schedule 2.06(k)

Existing Letters of Credit



The Letters of Credit outstanding on the Effective Date are listed below:




	 	 	 	 	 
	JP Morgan Chase Letter of Credit No. L5LS-624174

In favor of Louisiana Dept. of Labor
	 	$	925,000.00	 
	JP Morgan Chase Letter of Credit No. L5LS-640616

In favor of Ohio Bureau of Workers’ Compensation
	 	$	417,000.00	 
	JP Morgan Chase Letter of Credit No. L5LS-641916

In favor of Oklahoma Workers’ Compensation
	 	$	300,000.00	 
	JP Morgan Chase Letter of Credit No. L5LS-640525

In favor of State of California
	 	$	220,000.00	 
	JP Morgan Chase Letter of Credit No. L5LS-624999

In favor of Old Republic Insurance Co.
	 	$	7,000,000.00	 
	JP Morgan Chase Letter of Credit No. L5LS-650644

In favor of Arch Insurance Company
	 	$	899,000.00	 
	JP Morgan Chase Letter of Credit No. L5LS-650625

In favor of Avalon Risk Management
	 	$	50,000.00	 
	JP Morgan Chase Letter of Credit No. 5-650643 in favor of
Realty Associates Fund VIII, LP.
	 	$	50,000.00	 
	 
	 	 	 
	Total
	 	$	9,861,000.00	 







 











 





Schedule 3.05(a)

Real Property




Owned Real Property:




	 	 	 
	Owner	 	Property Location
	 
	 	 
	KAFP

	 	Trentwood

15000 E. Euclid Ave.

Spokane Valley, WA 99216 (Spokane County)
	 
	 	 
	KAFP

	 	Mead Parcel 6 and 5

Mead, WA 99021 (Spokane County)
	 
	 	 
	KAFP

	 	Greenwood (Forge and Machine)

1508 Highway 246 South

Greenwood, SC 29646 (Greenwood County)
	 
	 	 
	KAFP

	 	Tennalum

309 Industrial Drive

Jackson, TN 38301 (Madison County)
	 
	 	 
	KAFP

	 	Newark

600 Kaiser Drive

Heath, Ohio 43056 (Licking County)
	 
	 	 
	KAFP

	 	Sherman

4300 Highway 75 South

Sherman, TX 75090 (Grayson County)
	 
	 	 
	KAFP

	 	Tulsa

4111 S. 74th E. Avenue

Tulsa, OK 74194 (Tulsa County)
	 
	 	 
	KAFP

	 	Bellwood

1901 Reymet Road

Richmond, VA 23237 (Chesterfield County)
	 
	 	 
	KAFP

	 	Los Angeles

6250 Bandini Blvd.

Commerce CA 90040-3168






 









 






Leased Real Property:




	 	 	 
	Tenant	 	Property Location
	 
	 	 
	KAFP

	 	3401 N. Tschirley Road

Spokane Valley, WA 99216
	 
	 	 
	KAFP

	 	6573 W. Willis Road

Chandler, AZ 85226
	 
	 	 
	KAFP

	 	5200 Midlink Drive, Charter Township of Comstock

Kalamazoo, Michigan 49048
	 
	 	 
	KAFP

	 	2425 Stevens Drive

Richland, WA 99352
	 
	 	 
	KAFP

	 	2301 North Route 30

Plainfield, IL 60544-8500
	 
	 	 
	KAFP

	 	27422 Portola Parkway

Foothill Ranch, CA 92610
	 
	 	 
	KAFP

	 	31000 Telegraph Road, Suite 220

Bingham Farms, MI 48025
	 
	 	 
	KAFP

	 	400 International Parkway

Richardson, TX 750812






 









 






Schedule 3.05(b)

Intellectual Property




Patents



	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Date of	 	 
	 	 	 	 	 	 	Issuance/	 	 
	Grantor	 	Title of Patent	 	Jurisdiction	 	Filing	 	Patent/ App Number
	Kaiser Aluminum
Fabricated
Products, LLC

	 	Automotive space frame joining system
	 	USA
	 	2/10/1998
	 	 	5715643	 
	Kaiser Aluminum
Fabricated
Products, LLC

	 	Method of producing aluminum alloys
having superplastic properties
	 	USA
	 	06/30/1998
	 	 	5772804	 
	Kaiser Aluminum
Fabricated
Products, LLC

	 	Lead-free 6000 series aluminum alloy
	 	USA
	 	07/07/1998
	 	 	5776269	 
	Kaiser Aluminum
Fabricated
Products, LLC

	 	Aluminum-copper alloy
	 	USA
	 	09/08/1998
	 	 	5803994	 
	Kaiser Aluminum
Fabricated
Products, LLC

	 	Lead-free 6000 series aluminum alloy
	 	USA
	 	09/22/1998
	 	 	5810952	 
	Kaiser Aluminum
Fabricated
Products, LLC

	 	Liquid edge bead removal device
	 	USA
	 	03/21/1995
	 	 	5398372	 
	Kaiser Aluminum
Fabricated
Products, LLC

	 	Aluminum alloy having improved
damage tolerant characteristics
	 	USA
	 	03/30/1999
	 	 	5888320	 
	Kaiser Aluminum
Fabricated
Products, LLC

	 	Improved damage tolerant aluminum
6XXX alloy
	 	Germany
	 	7/22/2004
	 	 	69628922.9	 
	Kaiser Aluminum
Fabricated
Products, LLC

	 	Improved damage tolerant aluminum
6XXX alloy
	 	France
	 	7/2/2003
	 	 	0826072	 
	Kaiser Aluminum
Fabricated
Products, LLC

	 	Improved damage tolerant aluminum
6XXX alloy
	 	Great Britain
	 	7/2/2003
	 	 	0826072	 
	Kaiser Aluminum
Fabricated
Products, LLC

	 	Improved damage tolerant aluminum
6XXX alloy
	 	Netherlands
	 	7/2/2003
	 	 	0826072	 
	Kaiser Aluminum
Fabricated
Products, LLC

	 	Improved damage tolerant aluminum
6XXX alloy
	 	Canada
	 	7/22/2008
	 	 	2218024	 
	Kaiser Aluminum
Fabricated
Products, LLC

	 	Aluminum-copper-magnesium-manganese
alloy useful for aircraft
applications
	 	USA
	 	04/27/1999
	 	 	5897720	 
	Kaiser Aluminum
Fabricated
Products, LLC

	 	Method of manufacturing aluminum
aircraft sheet
	 	USA
	 	08/17/1999
	 	 	5938867	 
	Kaiser Aluminum
Fabricated
Products, LLC

	 	Aluminum-magnesium-scandium alloys
with zinc and copper
	 	USA
	 	10/31/2000
	 	 	6139653	 






 









 







	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Date of	 	 
	 	 	 	 	 	 	Issuance/	 	 
	Grantor	 	Title of Patent	 	Jurisdiction	 	Filing	 	Patent/ App Number
	Kaiser Aluminum
Fabricated
Products, LLC

	 	Aluminum-magnesium-scandium alloys
with zinc and copper
	 	Germany
	 	06/09/2004
	 	 	60007882.5	 
	Kaiser Aluminum
Fabricated
Products, LLC

	 	Aluminum-magnesium-scandium alloys
with zinc and copper
	 	Great Britain
	 	01/21/2004
	 	 	1212473	 
	Kaiser Aluminum
Fabricated
Products, LLC

	 	Aluminum-magnesium-scandium alloys
with zinc and copper
	 	France
	 	01/21/2004
	 	 	1212473	 
	Kaiser Aluminum
Fabricated
Products, LLC

	 	Aluminum-magnesium-scandium alloys
with zinc and copper
	 	Canada
	 	03/01/2005
	 	 	2381332	 
	Kaiser Aluminum
Fabricated
Products, LLC

	 	Aluminum alloy useful for driveshaft
assemblies and method of
manufacturing extruded tube of such
alloy
	 	USA
	 	06/19/2001
	 	 	6248189	 
	Kaiser Aluminum
Fabricated
Products, LLC

	 	High strength aluminum alloys and
process for making the same
	 	China
	 	03/22/2006
	 	 	App No.

20068017318

	Kaiser Aluminum
Fabricated
Products, LLC

	 	High strength aluminum alloys and
process for making the same
	 	Europe
	 	03/22/2006
	 	 	App. No. 06849740







 









 






Trademarks




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Date of	 	 
	 	 	 	 	 	 	Registration/	 	Registration/
	Grantor	 	Trademark	 	Jurisdiction	 	Filing	 	Serial Number
	Kaiser Aluminum
Fabricated

Products, LLC

	 	Precision Rod
	 	USA
	 	08/08/2006
	 	 	3,127,295	 
	Kaiser Aluminum
Fabricated

Products, LLC

	 	Kaiser Select
	 	USA
	 	05/17/2005
	 	 	2,952,651	 
	Kaiser Aluminum
Fabricated

Products, LLC

	 	T-Form
	 	USA
	 	04/20/2004
	 	 	2834165	 
	Kaiser Aluminum
Fabricated

Products, LLC

	 	Tennalum and Design
	 	USA
	 	1/20/1998
	 	 	2130244	 
	Kaiser Aluminum
Fabricated

Products, LLC

	 	Tennalum Preferred
Employer Preferred
Investment
Preferred Supplier
and Design
	 	USA
	 	1/27/1998
	 	 	2132196	 
	Kaiser Aluminum
Fabricated

Products, LLC

	 	Tennalum
	 	USA
	 	01/07/1997
	 	 	2028807	 
	Kaiser Aluminum
Fabricated

Products, LLC

	 	Kaiser T-Form
	 	USA
	 	12/9/1997
	 	 	2120283	 
	Kaiser Aluminum
Fabricated

Products, LLC

	 	Precision Plate
	 	USA
	 	10/24/1989
	 	 	1561785	 
	Kaiser Aluminum
Fabricated

Products, LLC

	 	Kaiser
	 	USA
	 	5/3/1977
	 	 	1064817	 
	Kaiser Aluminum &
Chemical
Corporation

	 	KAISER HOLOBAR
	 	USA
	 	11/28/2006
	 	 	3178357	 
	Kaiser Aluminum
Fabricated

Products, LLC

	 	Hi-Form
	 	United Kingdom
	 	4/30/1999
	 	 	2052347	 
	Kaiser Aluminum
Fabricated

Products, LLC

	 	Kaiser
	 	United Kingdom
	 	 	 	 	854971	 
	Kaiser Aluminum
Fabricated

Products, LLC

	 	Precision K+
	 	Canada
	 	8/24/1998
	 	 	TMA499090

	Kaiser Aluminum
Fabricated

Products, LLC

	 	Hi-Form
	 	Canada
	 	1/22/1997
	 	 	TMA469374

	Kaiser Aluminum
Fabricated

Products, LLC

	 	Precision Plate
	 	Canada
	 	2/5/1997
	 	 	TMA470525







 









 






	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Date of	 	 
	 	 	 	 	 	 	Registration/	 	Registration/
	Grantor	 	Trademark	 	Jurisdiction	 	Filing	 	Serial Number
	Kaiser Aluminum
Fabricated 

Products, LLC

	 	Kaiser
	 	Canada
	 	3/18/1966
	 	 	TMA144408

	Kaiser Aluminum
Fabricated 

Products, LLC

	 	Kaiser
	 	Canada
	 	3/18/1966
	 	 	TMA144407

	Kaiser Aluminum
Fabricated 

Products, LLC

	 	Kaiser
	 	Europe
	 	7/27/2004

(filing date)
	 	 	3953651	 
	Kaiser Aluminum
Fabricated 

Products, LLC

	 	Kaiser
	 	Spain
	 	1/31/1964
	 	 	431540M	 
	Kaiser Aluminum
Fabricated 

Products, LLC

	 	Hi-Form
	 	France
	 	 	 	 	96606761	 
	Kaiser Aluminum
Fabricated 

Products, LLC

	 	Hi-Form
	 	Benelux
	 	 	 	 	588424	 
	Kaiser Aluminum
Fabricated 

Products, LLC

	 	Kaiser
	 	Benelux
	 	 	 	 	98542	 
	Kaiser Aluminum
Fabricated 

Products, LLC

	 	Kaiser
	 	Austria
	 	12/13/1995
	 	 	161489	 
	Kaiser Aluminum
Fabricated 

Products, LLC

	 	Hi-Form
	 	Japan
	 	8/29/1997
	 	 	4049234	 
	Kaiser Aluminum
Fabricated 

Products, LLC

	 	Kaiser
	 	Japan
	 	2/17/1965
	 	 	0667912	 
	Kaiser Aluminum
Fabricated 

Products, LLC

	 	Kaiser
	 	Germany
	 	10/11/1996
	 	 	39534136	 
	Kaiser Aluminum
Fabricated 

Products, LLC

	 	Hi-Form
	 	Germany
	 	4/9/1996
	 	 	39603085	 
	Kaiser Aluminum
Fabricated 

Products, LLC

	 	Kaiser
	 	Germany
	 	8/8/1969
	 	 	860036	 
	Kaiser Aluminum
Fabricated 

Products, LLC

	 	Kaiser
	 	Chile
	 	10/1/1996
	 	 	468710	 
	Kaiser Aluminum
Fabricated 

Products, LLC

	 	Kaiser
	 	Dominican Republic
	 	9/23/2000
	 	 	7476	 
	Kaiser Aluminum
Fabricated 

Products, LLC

	 	Kaiser
	 	European Community
	 	7/27/2004
	 	 	3935651	 
	Kaiser Aluminum
Fabricated 

Products, LLC

	 	Kaiser
	 	Mexico
	 	10/4/1995
	 	 	608668	 






 









 






	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Date of	 	 
	 	 	 	 	 	 	Registration/	 	Registration/
	Grantor	 	Trademark	 	Jurisdiction	 	Filing	 	Serial Number
	Kaiser Aluminum
Fabricated 

Products, LLC

	 	Kaiser
	 	South Korea
	 	6/10/1997
	 	 	364530	 
	Kaiser Aluminum
Fabricated 

Products, LLC

	 	Kaiser
	 	Ukraine
	 	11/12/1999
	 	 	13997	 
	Kaiser Aluminum
Fabricated 

Products, LLC

	 	Kaiser
	 	Venezuela
	 	9/20/1995
	 		P-205681	 
	Kaiser Aluminum
Fabricated 

Products, LLC

	 	Kaiser
	 	Germany
	 	1/5/1955
	 	 	669236	 
	Kaiser Aluminum
Fabricated 

Products, LLC

	 	Hi-Form
	 	Italy
	 	5/14/1998
	 	 	747152	 







 











 





Schedule 3.06

Disclosed Matters




(a) None.



(b) :



1. TRENTWOOD MILL, SPOKANE, WA — In June 2001 the Washington Department of Ecology (“WDOE”) issued a
Potential Liable Party notice to the Company in connection with PCB contamination in the Spokane
River. In January 2005 WDOE issued a notice of intent to formalize an Agreed Order related to the
Trentwood property draft RI/FS. On August 16, 2005, WDOE issued an Agreed Order under which the
Company will conduct on RI/FS for this property. The Company is undertaking the activities
required by the Agreed Order.



In November 2004, WDOE issued an Administrative Order and Notice of Penalty alleging that in
November and December 2002 certain discharges from the NPDES outfall (Permit -WA-0000892)
constituted a violation of the permit terms and Washington law. The Company appealed the
Administrative Order and Notice of Penalty; subsequently, the Company entered into a settlement
with the WDOE which resulted in an Amended Order. The Amended Order required the Company to
conduct an investigation and take corrective action concerning PCB releases, pay a fine, and fund
the performance of hydrogeologic studies. In March 2004, the Company and certain individuals were
served with federal grand jury subpoenas, which the Company believed were are related to the same
discharges that are the subject of the WDOE Notice of Penalty. In February 2007, the Company was
informed that the subpoena to the Company was withdrawn and the investigation closed at that time.



2. NEWARK, OH — In November 2005, the Ohio Environmental Protection Agency (“OEPA”) sampled surface
soil, subsurface soil and groundwater in the vicinity of the closed onsite landfill and in
background areas of the property. On June 29, 2009 OEPA issued a Consent Order requiring the
Company to perform a site-wide RI/FS. A draft RI/FS work plan was submitted to OEPA March 31, 2010.
Implementation of the plan is expected to begin in 2010 or 2011.



3. LOS ANGELES, CA  — In September 2009 the Company received a Notice of Violation (NOV) from the
South Coast Air Air Quality Management District (AQMD) alleging four violations of AQMD reporting
requirements. On February 23, 2010 the Company received a letter from AQMD offering to resolve the
matter and requesting a summary of the Company’s defenses and mitigating circumstances.






 









 








Schedule 3.12

Material Agreements



None.






 









 








Schedule 3.14

Insurance




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	DEDUCTIBLE/SIR
	INSURANCE	 	 	 	POLICY	 	 	 	 	 	(Self Insured
	COVERAGE	 	POLICY NUMBER	 	PERIOD	 	UNDERWRITERS	 	LIMITS	 	Retention)
	Marine Cargo

	 	AH88386
	 	4/1/09-4/1/10
	 	AIG Global Marine
	 	$15MM per any one
vessel under deck or
aircraft or in any one
place $2MM per any one
vessel “on deck”
subject to an “on
deck” bill of lading
$20K per any one
package by mail or
parcel post
	 	$100K any one
occurrence
	 
	 	 	 	 	 	 	 	 	 	 
	Charterers
Legal Liability

	 	Q0415
	 	4/1/09-4/1/10
	 	AIG Global Marine
	 	$5MM any one occurrence
	 	$100K any one
occurrence
	 
	 	 	 	 	 	 	 	 	 	 
	Aviation Products
Liability

	 	AB0804251
	 	5/1/09-5/1/10
	 	ABC London
	 	$500MM
	 	None
	 
	 	 	 	 	 	 	 	 	 	 
	Property Coverage

(Canadian location 

included)

	 	ERP9258762-02

PGL-N05067418

RMP2071071963

26465442

AJP087039A09
	 	3/31/09-3/31/10
	 	Zurich (31.3%

share) 

AIG (33.0%

share) 

ACE (22.0%
 share) 

CNA.
(8.7% 
share)

Validus (5.0%

share)
	 	$350MM ea. Occ
Combined Property
Damage / Business
Interrruption and in
the annual aggregate
separately for flood
and earthquake subject
to earthquake (except
California) $100MM
sublimit and $20MM ea.
Occ./Annual Aggregate
CA EQ and $100MM flood
annual ag
	 	$2.5 MM per Occ.,
except 5% of total
values for CA
earthquake with min
$2.5MM. Windstorm
2% TIV subject to
$2.5MM minimum.
Service
Interruption (off
premises power) 48
hrs.
	 
	 	 	 	 	 	 	 	 	 	 
	General Liability

	 	C013081/001
	 	12/1/09-12/1/10
	 	Allied World (AWAC)
	 	$1MM each Occurrence;
$2MM General Aggregate

$2MM
Products/Completed
Operations aggregate
limit

$1MM Personal
Injury/Advertising
Injury
	 	$500K SIR

Defense costs do
erode the SIR
	 

	 	 	 	 	 	 	 	$1MM/$2MM Employee
Benefits Liability
[each Occ/Agg]	 	 
	 

	 	 	 	 	 	 	 	Defense costs DO NOT
erode the limits
described above	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Auto Liability

	 	71CAB-496-6400
	 	12/1/09-12/1/10
	 	Arch Insurance
	 	$1MM ea. Occurrence
Combined Single Limit 

$1MM
Uminsured/Underinsured —
	 	Guaranteed cost






 









 






	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	DEDUCTIBLE/SIR
	INSURANCE	 	 	 	POLICY	 	 	 	 	 	(Self Insured
	COVERAGE	 	POLICY NUMBER	 	PERIOD	 	UNDERWRITERS	 	LIMITS	 	Retention)
	 

	 	 	 	 	 	 	 	$5K Med Payments 
$1MM Hired or
Borrowed;
 $1MM
Non-owned auto	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Workers’ Comp/Employers
Liability
(EL)

	 	71WCI-496-6200
	 	12/1/09-12/1/10
	 	Arch Insurance
	 	Statutory WC Benefits

EL: $1MM Bodily
Injury each Accident

EL: $1MM Bodily
Injury by Disease —
Each Employee 

Excludes: States of
Ohio and Washington	 	$500K Deductible
	 
	 	 	 	 	 	 	 	 	 	 
	Excess Workers’
Comp/Employers
Liability
(EL)

	 	71WCX-496-6300
	 	12/1/09-12/1/10
	 	Arch Insurance
	 	WC — Statutory / EL —
$1MM
Covered states: Ohio &
Washington
	 	$500K Deductible
	 
	 	 	 	 	 	 	 	 	 	 
	Excess Liability

	 	0305-1233

EXC 863-4848

B0713NAMCA09000106
	 	12/1/09-12/1/10

12/1/09-12/1/10

12/1/09-12/1/10
	 	Allied World
 (AWAC)
Great American

XL Europe
	 	$25MM per
Occurrence/Aggregate

$25MM occ/agg xs $25MM

$50MM occ/agg xs $50MM
(includes punitive
damages)
	 	lead excess policy
attaches to
the underlying
primary policies
at their limits of
liability
	 
	 	 	 	 	 	 	 	 	 	 
	Punitive Damages

	 	C010883/002

MCPD202352
	 	12/1/09-12/1/10

12/1/09-12/1/10
	 	AWAC Bermuda

Magna Carta
	 	$25MM

$25 MM occ/agg xs

$25MM
	 	excess layers above
the lead
have no SIR
	 
	 	 	 	 	 	 	 	 	 	 
	Foreign Difference
In
Conditions (DIC) pkg

	 	PHFD37064798
	 	12/1/09-12/1/10
	 	ACE
	 	Gap Coverage (GL,
Auto, WC) for foreign
premises


GL: $1M each Occurrent
/ $2M General
Aggregate


Auto: $1M Combined
Single Limit FVWC: El
$1M/$1M/$1M
	 	None
	 
	 	 	 	 	 	 	 	 	 	 
	UK 

Employers Liability

(EL)

	 	PHFD37064798
	 	3/1/10-12/1/10
	 	ACE
	 	$10MM

$5MM — best local
practice including
terrorism sublimit
	 	None
	 
	 	 	 	 	 	 	 	 	 	 
	Directors & Officers
Liability (Primary)

	 	01-406-19-54
	 	12/1/09-12/1/10
	 	Chartis (AIG)
	 	$10 MM
	 	$0 Non-Indemnifiable
$250K Indemnifiable
$500K securities
claims
	 
	 	 	 	 	 	 	 	 	 	 
	Excess Directors &
Officers Liability 


Excess Side A D&O

	 	EC0-9400-720

00-DA-0233825-09
	 	12/1/09-12/1/10

12/1/09-12/1/10

12/1/09-12/1/10
	 	Travelers
Hartford
Chubb
	 	$10 MM xs $10 MM

$10 MM xs $20 MM

$10MM xs $30 MM
	 	follow form over
primary






 









 






	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	DEDUCTIBLE/SIR
	INSURANCE	 	 	 	POLICY	 	 	 	 	 	(Self Insured
	COVERAGE	 	POLICY NUMBER	 	PERIOD	 	UNDERWRITERS	 	LIMITS	 	Retention)
	Corporate Fiduciary 

Liability

	 	8221-4392

EC0-9400-721
	 	12/1/09-12/1/10

12/1/09-12/1/10
	 	Chubb

Travelers
	 	$10 MM

$5 MM xs 10 MM
	 	$25K

N/A
	 
	 	 	 	 	 	 	 	 	 	 
	Executive Risk
(K&R)

	 	6473875
	 	6/1/08-6/1/11
	 	Chartis (AIG)
	 	$20 MM
	 	NIL
	Commercial Crime

	 	FID 596445900
	 	1/31/08-1/31/11
	 	Zurich
	 	$10 MM

(per loss)
	 	$250K per Occurence
	 
	 	 	 	 	 	 	 	 	 	 
	LONG-TERM AND
RUN-OFF POLICIES
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	$20MM ea. Loss/$20MM
Gramercy, Louisiana
(Named Insured:	 	 
	Pollution Liability

	 	PLS1363664
	 	9/30/04-9/30/14
	 	Chartis (AIG)
	 	Gramercy

Alumina LLC)
	 	$100K each loss
	 
	 	 	 	 	 	 	 	 	 	 
	Clean-Up Cost
Cap. Ins

	 	EPP1956642
	 	10/7/04-10/7/34
	 	Chartis (AIG)
	 	$18MM Limit for
Clean-up Costs of
Pollutants identified
in Remedial Plan
Mead Location (Named
Insured: Mead SPL Site
Custorial Trust under
Custorial Trust
Agreement dated
October 7, 2004)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Directors & Officers
Liability RUN-OFF

	 	00DA 0210738-04
	 	7/6/06-7/6/12
	 	Chartis (AIG)
	 	$10 MM
	 	$5 MM Cov. Form B
Company
Reimbursement
	 
	 	 	 	 	 	 	 	 	 	 
	Corporate Fiduciary
Liability RUN-OFF

	 	 	 	12/1/03-7/6/12
	 	Chartis (AIG)
	 	$10 MM
	 	$100K indemnifiable

0 non-indemnifiable







 











 





Schedule 3.15

Capitalization and Subsidiaries




(a)




	 	 	 
	 	 	The Borrower’s Ownership in the
	Name	 	Significant Subsidiary
	 
	 	 
	Kaiser Aluminum Investments Company (“KAIC”)

	 	100% directly owned by
Kaiser Aluminum
Corporation (the
“Company”)
	Kaiser Aluminum Fabricated Products, LLC

	 	100% directly owned by
KAIC and 100% indirectly
owned by the Parent
	Kaiser Aluminium International, Inc.

	 	100% directly owned by
KAIC and 100% indirectly
owned by the Parent






(b)




•   Equity Interests of KAIC




	 	 	 
	Class of Stock	 	Shareholder Name and Ownership Interest
	Common

	 	100% directly owned by the Company






•   Equity Interests of Kaiser Aluminum Fabricated Products, LLC




	 	 	 
	Class of Stock	 	Member Name and Ownership Interest
	N/A

	 	100% directly owned by KAIC and 100% indirectly owned by
the Company






•   Equity Interests of Kaiser Aluminium International, Inc.




	 	 	 
	Class of Stock	 	Shareholder Name and Ownership Interest
	Common

	 	100% directly owned by KAIC and 100% indirectly owned by
the Company






 









 






(c)




	 	 	 
	Name	 	Type of Entity
	Kaiser Aluminum Corporation

	 	Corporation
	Kaiser Aluminum Investments Company

	 	Corporation
	Kaiser Aluminum Fabricated Products, LLC

	 	Limited Liability Company
	Kaiser Aluminium International, Inc.

	 	Corporation






 









 






Schedule 6.01(b)

Existing Indebtedness





	1.	 	Amounts outstanding from time to time (approximately $3.0 million) at February 28, 2010)
owing from KAIC to Trochus.
	 
	2.	 	Amounts outstanding from time to time (approximately $2.2 million) at February 28, 2010)
owing from KAFP to KACL.




 









 











Schedule 6.01(e)

Existing Purchase Money Debt and Capital Lease Obligations





	1.	 	Promissory note in the amount of $7.0 million in connection with the purchase of real
property of the Los Angeles, California facility. Principal payments are due on February 1,
2012 and February 1, 2013 in the amount of $3.5 million each year. The Note is secured by the
deed of trust of the property. The interest rate applicable to borrowings under the Note was
4.8% at December 31, 2008.
	 
	2.	 	Capital lease for end-loader equipment at the Los Angeles, California facility in the amount
of $79,000. The lease expires in February 2014.




 









 











Schedule 6.02

Existing Liens



Financing Statement #2007-4749338 filed on 12/17/2007 with the Delaware Department of State;
Secured Party: Signode Packaging Systems; Debtor: Kaiser Aluminum Corporation.1






 




			
	1	 	To be terminated by secured party within 30
days after the Effective Date.




 









 










Schedule 6.04

Existing Investments




	 	 	 	 	 
	Entity	 	Holder	 	Interest
	1. Anglesey Aluminium
Limited

	 	Kaiser Aluminum
Investments Company
	 	Holds a 49% interest
in Anglesey Aluminium
Limited





2. Investments related to Kaiser Aluminum Fabricated Products Restoration Plan held at
Fidelity Investments as trustee for the plan.






 









 








Schedule 6.10

Existing Restrictions




None.





 











 





EXHIBIT A




ASSIGNMENT AND ASSUMPTION




          This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the
Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the
“Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used
but not defined herein shall have the meanings specified in the Credit Agreement identified below
(as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”),
receipt of a copy of which is hereby acknowledged by the 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 Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, 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
rights and obligations in its capacity as a Lender 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 under the Credit Agreement (including in respect of Letters of Credit and Swingline Loans)
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) against any Person,
whether known or unknown, arising under or in connection with the Credit Agreement, 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 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 pursuant to clauses (i) and (ii) above being referred to herein collectively as the
“Assigned Interest”). Such sale and assignment is without recourse to the Assignor and,
except as expressly provided in this Assignment and Assumption, without representation or warranty
by the Assignor.




	 	 	 	 	 

	1.

	 	Assignor:
	 	                                                                         
       
	 
	 	 	 	 
	2.

	 	Assignee:
	 	                                                                         
       
	 

	 	 	 	[and is an Affiliate of/Approved Fund of [identify Lender]1]
	 
	 	 	 	 
	3.

	 	Borrowers:
	 	Kaiser Aluminum Corporation, Kaiser Aluminum
Investments Company, Kaiser Aluminum Fabricated Products, LLC and
Kaiser Aluminium International, Inc.
	 
	 	 	 	 
	4.

	 	Administrative Agent:
	 	JPMorgan Chase Bank, N.A., as the administrative agent under the
Credit Agreement








 




			
	1	 	Select as applicable.




Exhibit A-1









 










	 	 	 	 	 

	5.

	 	Credit Agreement:
	 	The Credit Agreement dated as of March 22, 2010 among the Borrowers,
the Lender Parties party thereto, and JPMorgan Chase Bank, N.A., as
Administrative Agent
	6.

	 	Assigned Interest:	 	 






	 	 	 	 	 	 	 	 	 
	Aggregate Amount of Revolving	 	Amount of Revolving	 	 	Percentage Assigned of	 
	Commitment/Loans for	 	Commitment/Loans	 	 	Revolving	 
	all Lenders	 	Assigned	 	 	Commitment/Loans2	 
	$
	 	$	 	 	 	 	%	 
	$
	 	$	 	 	 	 	%	 
	$
	 	$	 	 	 	 	%	 





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 Assignee agrees to deliver to the Administrative Agent a completed Administrative Questionnaire
in which the Assignee designates one or more credit contacts to whom all syndicate-level
information (which may contain material non-public information about the Company, the other
Borrowers and their Related Parties or their respective securities) will be made available and who
may receive such information in accordance with the Assignee’s compliance procedures and applicable
laws, including Federal and state securities laws.



The terms set forth in this Assignment and Assumption are hereby agreed to:




	 	 	 	 	 
	 	ASSIGNOR




[NAME OF ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 
	 	ASSIGNEE




[NAME OF ASSIGNEE]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 





 




			
	2	 	Set forth, to at least 9 decimals, as a
percentage of the Revolving Commitment/Loans of all Lenders thereunder.



Assignment and Assumption

Signature Page





Exhibit A-2









 










	 	 	 	 	 
	Consented to and Accepted:


JPMORGAN CHASE BANK, N.A., as

Administrative Agent

 	 	 
	By  	 	 	 
	 	Title: 	 	 
	 	 	 	 
	 
	Consented to:



JPMORGAN CHASE BANK, N.A., as

Issuing Bank

 	 	 
	By  	 	 	 
	 	 	 	 
	 
	[Consented to:]3



[KAISER ALUMINUM CORPORATION]

 	 	 
	By  	 	 	 
	 	Title: 	 	 
	 	 	 	 
	 





 




			
	3	 	To be added only if the consent of the
Borrower Representative is required by the terms of the Credit Agreement.



Assignment and Assumption

Signature Page





Exhibit A-3









 










ANNEX 1




STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION




          1. Representations and Warranties.




          1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the 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 any Borrower, any of their Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by any 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 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 satisfies the requirements, if any, specified in the Credit Agreement
that are required to be satisfied by it in order to acquire the Assigned Interest and become a
Lender, (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 Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together
with copies of the most recent financial statements delivered pursuant to paragraph (a), (b) and
(c) of Section 5.01 thereof, as applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Administrative Agent or any other Lender,
and (v) if it is a Foreign Lender, attached to the Assignment and Assumption is any documentation
required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and
executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on
the Administrative Agent, the 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. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of principal, interest,
fees and other amounts) to the Assignor for amounts which have accrued to but excluding the
Effective Date and to the 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 facsimile or PDF transmission 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 laws of the State of New York.





Exhibit A-4











 





EXHIBIT B




OPINION OF COUNSEL FOR THE BORROWERS





 









 





Jones Day




77 WEST WACKER · CHICAGO, ILLINOIS 60601.1692


TELEPHONE: 312.782.3939 · FACSIMILE: 312.782.8585




March 23, 2010




To the Lenders and the Administrative Agent

Referred to Below

c/o JPMorgan Chase Bank, N.A.

2220 Ross Avenue

Dallas, Texas 75201





	 	 	 	Re: Credit Agreement




Ladies/Gentlemen:



     We have acted as special New York counsel for Kaiser Aluminum Corporation, a Delaware
corporation (the “Company”), Kaiser Aluminum Investments Company, a Delaware corporation
(“KAIC”), Kaiser Aluminum Fabricated Products, LLC, a Delaware limited liability company
(“KAFP”), and Kaiser Aluminium International, Inc., a Delaware corporation (“KAII”
and together with the Company, KAIC and KAFP, each individually a “Borrower” and,
collectively, the “Borrowers”), in connection with the Credit Agreement, dated as of March
22, 2010 (the “Credit Agreement”), among the Borrowers, each of the financial institutions
from time to time party thereto as lenders (the “Lenders”) and JPMorgan Chase Bank, N.A.,
as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).
This opinion letter is delivered to you pursuant to Section 4.01(a)(ii) of the Credit Agreement.
Capitalized terms used herein and not otherwise defined herein have the meanings assigned to such
terms in the Credit Agreement. The Uniform Commercial Code, as amended and in effect in the State
of New York on the date hereof, is referred to herein as the “NY UCC.” The Uniform
Commercial Code, as amended and in effect in the State of Delaware on the date hereof, is referred
to herein as the “Del. UCC.” The NY UCC and the Del. UCC are referred to herein,
collectively, as the “UCC.” With your permission, all assumptions and statements of
reliance herein have been made without any independent investigation or verification on our part
except to the extent, if any, otherwise expressly stated, and we express no opinion with respect to
the subject matter or accuracy of the assumptions or items upon which we have relied.



     In connection with the opinions expressed herein, we have examined such documents, records and
matters of law as we have deemed necessary for the purposes of such opinions. We have examined,
among other documents, the following:




	 	(1)	 	an executed copy of the Credit Agreement;
	 
	 	(2)	 	an executed copy of the Security Agreement, dated as of March 22, 2010 (the
“Security Agreement”), by and among the Borrowers and the Administrative Agent;


















 











To the Lenders and the Administrative Agent

March 23, 2010

Page 2





	 	(3)	 	an executed copy of the Patent Security Agreement dated as March 22, 2010
(the “Patent Security Agreement”) between KAFP and the Administrative Agent;
	 
	 	(4)	 	an executed copy of the Trademark Security Agreement dated as of March 22, 2010
(the “Trademark Security Agreement”) between KAFP and the Administrative
Agent;
	 
	 	(5)	 	an executed copy of the Blocked Account Control Agreement dated as of March 22,
2010 (the “Account Control Agreement”) between KAII, JPMorgan Chase Bank,
N.A., as the depositary (in such capacity, the “Depositary”), and the
Administrative Agent;
	 
	 	(6)	 	an executed copy of the Blocked Lockbox Account Control Agreement dated as of
March 22, 2010 (the “Lockbox Control Agreement”) between KAIC, the Depositary,
and the Administrative Agent;
	 
	 	(7)	 	an executed copy of the Intercompany Subordination Agreement dated as of March
22, 2010, (the “Intercompany Subordination Agreement”) among the Borrowers and
the Administrative Agent;
	 
	 	(8)	 	the Officer’s Certificate of the Borrowers delivered to us in connection with
this opinion letter, a copy of which is attached hereto as Exhibit A (the
“Officer’s Certificate”);
	 
	 	(9)	 	unfiled copies of financing statements (the “Financing Statements”),
naming each Borrower as debtor and the Administrative Agent as secured party, a copy of
each of which is attached hereto as Exhibits B-1 through B-4, which Financing
Statements we understand will be filed with the Secretary of State of the State of
Delaware (the “Filing Office”);
	 
	 	(10)	 	a copy of each organizational document listed on Schedule 1 hereto with
respect to each Borrower certified by the Secretary of State of the State of Delaware
and certified to us by an officer of each Borrower as being complete and correct and in
full force and effect as of the date hereof (as to each Borrower, the “Certified
Organizational Document” and, collectively, the “Certified Organizational
Documents”); and
	 
	 	(11)	 	copies of certificates of the Secretary of State of the State of Delaware as to
the existence and good standing of each Borrower in the State of Delaware on the dates
set forth on Schedule 2 hereto (as to each Borrower, the “Good Standing
Certificate” and, collectively, the “Good Standing Certificates”);





     The documents referred to in items (1) through (6) above are referred to herein collectively
as the “Documents” and the documents referred to in items (2) through (6) above are



 









 





To the Lenders and the Administrative Agent

March 23, 2010

Page 3



referred to herein collectively as the “Collateral Documents.” In addition, as used
herein, “security interest” means “security interest” (as defined in Section 1-201(37) of
the NY UCC).




     In all such examinations, we have assumed the legal capacity of all natural persons executing
documents, the genuineness of all signatures, the authenticity of original and certified documents
and the conformity to original or certified copies of all copies submitted to us as conformed or
reproduction copies. As to various questions of fact relevant to the opinions expressed herein, we
have relied upon, and assume the accuracy of, representations and warranties contained in the
Documents and certificates and oral or written statements and other information of or from
representatives of the Borrowers and others and assume compliance on the part of the Borrowers with
their covenants and agreements contained therein. In connection with the opinions expressed in the
first sentence of paragraph (a) below, we have relied solely upon certificates of public officials
as to the factual matters and legal conclusions set forth therein. With respect to the opinions
expressed in clauses (ii) and (iv)(A) of paragraph (b) below, our opinions are limited (x) to our
actual knowledge, if any, of the specially regulated business activities and properties of the
Borrowers based solely upon an officer’s certificate in respect of such matters and without any
independent investigation or verification on our part and (y) to only those laws and regulations
that, in our experience, are normally applicable to transactions of the type contemplated by the
Documents.



     Based upon the foregoing, and subject to the limitations, qualifications and assumptions set
forth herein and the discussion and analysis below, we are of the opinion that:



     (a) Each Borrower is a corporation or a limited liability company, as the case may be,
existing in good standing under the laws of the State of Delaware. Each Borrower has the corporate
or limited liability company, as the case may be, power and authority (i) to conduct its business
substantially as described in the Officer’s Certificate and (ii) to enter into and to incur and
perform its obligations under the Documents to which it is a party.



     (b) The execution and delivery to the Administrative Agent and the Lenders by each Borrower of
the Documents to which it is a party and the performance by such Borrower of its obligations
thereunder, and the granting by each Borrower of the security interests provided for in the
Collateral Documents, (i) have been authorized by all necessary corporate or limited liability
company, as applicable, action by such Borrower, (ii) do not require under present law, or present
regulation of any governmental agency or authority, of the State of New York or the United States
of America, or under the DGCL or DLLCA (as each term is defined below) any filing or registration
by such Borrower with, or approval or consent to such Borrower of, any governmental agency or
authority of the State of New York, the State of Delaware or the United States of America that has
not been made or obtained except (A) those required in the ordinary course of business in
connection with the performance by such Borrower of its obligations under certain covenants
contained in the Documents to which it is a party and to perfect security interests, if any,
granted by such Borrower thereunder, and (B) pursuant to securities and other laws that may be
applicable to the disposition of any collateral subject thereto, (iii) do not contravene any
provision of the Certificate of Incorporation or Bylaws, the Certificate of



 









 





To the Lenders and the Administrative Agent

March 23, 2010

Page 4



Formation or Limited Liability Company Agreement, as applicable, of such Borrower and (iv) do
not violate (A) the Delaware General Corporation Law (the “DGCL”) or the Delaware Limited
Liability Company Act (the “DLLCA”) or any present law, or present regulation of any
governmental agency or authority, of the State of New York or the United States of America
applicable to such Borrower or its property, (B) any agreement binding upon such Borrower or its
property that is listed on Annex I to the Officer’s Certificate or any court decree or order
binding upon such Borrower or its property that is listed on Annex II to the Officer’s Certificate
(this opinion being limited in that we express no opinion with respect to any violation not readily
ascertainable from the face of any such agreement, decree or order, or arising under or based upon
any cross default provision insofar as it relates to a default under an agreement not so identified
to us, or arising under or based upon any covenant of a financial or numerical nature or requiring
computation) and (v) will not result in or require the creation or imposition of any security
interest or lien upon any of its properties pursuant to the provisions of any agreement binding
upon such Borrower or its properties that is listed on Annex I to the Officer’s Certificate other
than any security interests or liens created by the Documents and any other security interests or
liens in favor of the Administrative Agent or the Lenders arising under any of the Documents or
applicable law.




     (c) Each Document has been duly executed and delivered on behalf of each Borrower signatory
thereto and constitutes an enforceable obligation of such Borrower in accordance with its terms.



     (d) The borrowings by the Borrowers under the Credit Agreement and the application of the
proceeds thereof as provided in the Credit Agreement will not violate Regulation T, U or X of the
Board of Governors of the Federal Reserve System (the “Margin Regulations”).



     (e) None of the Borrowers an “investment company” or a company “controlled by” and “investment
company” (under, and as each such term is defined in, the Investment Company Act of 1940, as
amended).



     (f) The Security Agreement creates in favor of the Administrative Agent for the benefit of the
Lender Parties, as security for the Secured Obligations, a security interest in each Borrower’s
rights in the Collateral (as defined in the Security Agreement) to which Article 9 of the NY UCC is
applicable (the “Article 9 Collateral”).



     (g) Each of the Financing Statements is in appropriate form for filing under Article 9 of the
UCC in the Filing Office. Upon the effective filing of the Financing Statements with the Filing
Office, the Administrative Agent will have, for the benefit of the Lenders, a perfected security
interest in that portion of the Article 9 Collateral in which a security interest may be perfected
by filing an initial financing statement with the Filing Office under the Del. UCC (the “Filing
Collateral”).



     (h) The Security Agreement and the Account Control Agreement together create in favor of the
Administrative Agent, for the benefit of the Lender Parties, as security for the Secured



 









 





To the Lenders and the Administrative Agent

March 23, 2010

Page 5



Obligations, a perfected security interest under the NY UCC in KAII’s rights in the and the
“Account” as defined in the Account Control Agreement (defined herein as the “Deposit
Account”).




     (i) The Security Agreement and the Lockbox Control Agreements together create in favor of the
Administrative Agent, for the benefit of the Lender Parties, as security for the Secured
Obligations, a perfected security interest under the NY UCC in (i) KAIC’s rights in the
“Lockboxes” (as defined in the Lockbox Control Agreement) and the “Account” as defined in
the Lockbox Control Agreement (defined herein as the “Lockbox Account”).



     (j) The Patent Security Agreement creates in favor of the Administrative Agent, for the
benefit of the Lender Parties, as security for the Secured Obligations, a security interest in the
rights of KAFP in the United States registered patents that are specifically identified in the
Patent Security Agreement and listed in Schedule A thereto, insofar as such rights relate to
Accounts and Inventory (the “Patent Collateral”), in each case to the extent that each such
United States registered patent included in the Patent Collateral is valid and is owned by KAFP.
Upon the proper recordation of the Patent Security Agreement with the United States Patent and
Trademark Office (the “PTO”), in accordance with all applicable PTO rules and regulations
and accompanied by all required forms and fees, the Patent Security Agreement will create in favor
of the Administrative Agent, for the benefit of the Lender Parties, as security for the Secured
Obligations, a perfected security interest in the rights of KAFP in the Patent Collateral, in each
case to the extent that (i) Section 261 of Title 35 of the United States Code is applicable to and
governs the perfection of such security interest and (ii) each such patent included in the Patent
Collateral is valid and is owned by KAFP.



     (k) The Trademark Security Agreement creates in favor of the Administrative Agent, for the
benefit of the Lender Parties, as security for the Secured Obligations, a security interest in the
rights of KAFP in the United States registered trademarks that are specifically identified in the
Trademark Security Agreement and listed in Schedule A thereto, insofar as such rights relate to
Accounts and Inventory (the “Trademark Collateral”), in each case to the extent that each
such United States registered trademark included in the Trademark Collateral is valid and is owned
by KAFP. Upon the proper recordation of the Trademark Security Agreement with the PTO, in
accordance with all applicable PTO rules and regulations and accompanied by all required forms and
fees, the Trademark Security Agreement will create in favor of the Administrative Agent, for the
benefit of the Lender Parties, as security for the Secured Obligations, a perfected security
interest in the rights of KAFP in the Trademark Collateral, in each case to the extent that (i)
Section 1060 of Title 15 of the United States Code is applicable to and governs the perfection of
such security interest and (ii) each such trademark and registration included in the Trademark
Collateral is valid and is owned by KAFP.



     The opinions set forth above are subject to the following qualifications and limitations:



     (A) Our opinions in paragraph (c) above are subject to (i) applicable bankruptcy, insolvency,
reorganization, fraudulent transfer and conveyance, voidable preference,



 









 





To the Lenders and the Administrative Agent

March 23, 2010

Page 6



moratorium, receivership, conservatorship, arrangement or similar laws, and related
regulations and judicial doctrines, from time to time in effect affecting creditors’ rights and
remedies generally, (ii) general principles of equity (including, without limitation, standards of
materiality, good faith, fair dealing and reasonableness, equitable defenses, the exercise of
judicial discretion and limits on the availability of equitable remedies), whether such principles
are considered in a proceeding at law or in equity, and (iii) the qualification that certain other
provisions of the Documents may be unenforceable in whole or in part under the laws (including
judicial decisions) of the State of New York or the United States of America, but the inclusion of
such provisions does not affect the validity as against the Borrowers party thereto of the
Documents as a whole and the Documents contain adequate provisions for enforcing payment of the
obligations governed thereby, and otherwise for the practical realization of the principal benefits
provided by the Documents, in each case subject to the other qualifications contained in this
letter.




     (B) We express no opinion as to the enforceability of any provision in the Documents:




     (i) providing that any person or entity may sell or otherwise dispose of, or purchase,
any collateral subject thereto, or enforce any other right or remedy thereunder (including
without limitation any self-help or taking-possession remedy), except in compliance with the
NY UCC and other applicable laws;




     (ii) establishing standards for the performance of the obligations of good faith,
diligence, reasonableness and care prescribed by the NY UCC or of any of the rights or
duties referred to in Section 9-603 of the NY UCC;




     (iii) relating to indemnification, contribution or exculpation in connection with
violations of any securities laws or statutory duties or public policy, or in connection
with willful, reckless or unlawful acts or gross negligence of the indemnified or exculpated
party or the party receiving contribution;




     (iv) providing that any person or entity may exercise set-off rights other than with
notice and otherwise in accordance with and pursuant to applicable law;




     (v) relating to choice of governing law to the extent that the enforceability of any
such provision is to be determined by any court other than a court of the State of New York
or may be subject to constitutional limitations;




     (vi) waiving any rights to trial by jury;




     (vii) purporting to confer, or constituting an agreement with respect to, subject
matter jurisdiction of United States federal courts to adjudicate any matter;




     (viii) purporting to create a trust or other fiduciary relationship;



 









 





To the Lenders and the Administrative Agent

March 23, 2010

Page 7





     (ix) specifying that provisions thereof may be waived only in writing, to the extent
that an oral agreement or an implied agreement by trade practice or course of conduct has
been created that modifies any provision of such Documents;




     (x) giving any person or entity the power to accelerate obligations or to foreclose
upon collateral without any notice to the obligor;




     (xi) granting or purporting to create a power of attorney, and we express no opinion as
to the effectiveness of any power of attorney granted or purported to be created under any
Document;




     (xii) providing for the performance by any guarantor of any of the non-monetary
obligations of any person or entity not controlled by such guarantor;




     (xiii) providing for restraints on alienation of property and purporting to render
transfers of such property void and of no effect or prohibiting or restricting the
assignment or transfer of property or rights to the extent that any such prohibition or
restriction is ineffective pursuant to Sections 9-406 through 9-409 of the NY UCC; or




     (xiv) providing for liquidated damages, make-whole or other prepayment premiums or
similar payments, default interest rates, late charges or other economic remedies to the
extent a court were to determine that any such economic remedy is not reasonable and
therefore constitutes a penalty.



     (C) Our opinions as to enforceability are subject to the effect of generally applicable rules
of law that:




     (i) provide that forum selection clauses in contracts are not necessarily binding on
the court(s) in the forum selected; and




     (ii) may, where less than all of a contract may be unenforceable, limit the
enforceability of the balance of the contract to circumstances in which the unenforceable
portion is not an essential part of the agreed exchange, or that permit a court to reserve
to itself a decision as to whether any provision of any agreement is severable.



     (D) We express no opinion as to the enforceability of any purported waiver, release,
variation, disclaimer, consent or other agreement to similar effect (all of the foregoing,
collectively, a “Waiver”) by any Borrower under any of the Documents to the extent limited
by Sections 1-102(3), 9-602 or 9-624 of the NY UCC or other provisions of applicable law (including
judicial decisions), or to the extent that such a Waiver applies to a right, claim, duty or defense
or a ground for, or a circumstance that would operate as, a discharge or release otherwise existing
or occurring as a matter of law (including judicial decisions), except to the extent that such a
Waiver is effective under and is not prohibited by or void or invalid under Section 9-602 or 9-624
of the NY UCC or other provisions of applicable law (including judicial decisions).



 









 





To the Lenders and the Administrative Agent

March 23, 2010

Page 8




     (E) Our opinions in paragraphs (f) through (k), inclusive, are subject to the following
assumptions, qualifications and limitations:




     (i) Any security interest in the proceeds of collateral is subject in all respects to
the limitations set forth in Section 9-315 of the UCC.




     (ii) We express no opinion as to the nature or extent of the rights, or the power to
transfer rights, of any Borrower in, or title of any Borrower to, any collateral under any
of the Documents, or property purporting to constitute such collateral, or the value,
validity or effectiveness for any purpose of any such collateral or purported collateral,
and we have assumed that each Borrower has sufficient rights in, or power to transfer rights
in, all such collateral or purported collateral for the security interests provided for
under the Documents to attach.




     (iii) We express no opinion as to the priority of any pledge, security interest,
assignment for security, lien or other encumbrance, as the case may be, that may be created
or purported to be created under the Documents. Other than as expressly noted in paragraphs
(g), (h), (i), (j), and (k) above, we express no opinion as to the perfection of, and other
than as expressly noted in paragraphs (f), (h), (i), (j), and (k) above, we express no
opinion as to the creation, validity or enforceability of, any pledge, security interest,
assignment for security, lien or other encumbrance, as the case may be, that may be created
or purported to be created under the Documents. We express no opinion as to the creation,
validity or enforceability of any pledge, security interest, assignment for security, lien
or other encumbrance, as the case may be, that may be created or purported to be created
under the Documents in any commercial tort claims.




     (iv) In the case of property that becomes collateral under the Documents after the date
hereof, Section 552 of the Bankruptcy Code limits the extent to which property acquired by a
debtor after the commencement of a case under the United States Bankruptcy Code may be
subject to a lien arising from a security agreement entered into by the debtor before the
commencement of such case.




     (v) We express no opinion as to the enforceability of the security interests under the
Documents in any item of collateral subject to any restriction on or prohibition against
transfer contained in or otherwise applicable to such item of collateral or any contract,
agreement, license, permit, security, instrument or document constituting, evidencing or
relating to such item, except to the extent that any such restriction is rendered
ineffective pursuant to any of Sections 9-406 through 9-409, inclusive, of the NY UCC.




     (vi) We call to your attention that Article 9 of the Del. UCC requires the filing of
continuation statements within the period of six months prior to the expiration of five
years from the date of original filing of financing statements under the Del. UCC in order
to maintain the effectiveness of such financing statements and that additional financing



 









 





To the Lenders and the Administrative Agent

March 23, 2010

Page 9





statements may be required to be filed to maintain the perfection of security interests
if the debtor granting such security interests makes certain changes to its name, or changes
its location (including through a change in its jurisdiction of organization) or the
location of certain types of collateral, all as provided in the Del. UCC.




     (vii) We call to your attention that an obligor (as defined in the NY UCC) other than a
debtor may have rights under Part 6 of Article 9 of the NY UCC.




     (viii) With respect to our opinions above as to the perfection of a security interest
in the Article 9 Collateral through the filing of a financing statement, we express no
opinion with respect to the perfection of any such security interest in any Article 9
Collateral constituting timber to be cut, as extracted collateral, cooperative interests, or
property described in Section 9-311(a) of the UCC (including, without limitation, property
subject to a certificate-of-title statute), and we express no opinion with respect to the
effectiveness of any financing statement filed or purported to be filed as a fixture filing.




     (ix) We have assumed that each Borrower is organized solely under the laws of the state
identified as such Borrower’s jurisdiction of organization in the Certified Organizational
Document of and Good Standing Certificate for such Borrower.




     (x) We express no opinion with respect to the priority of the security interest of the
Administrative Agent in the Lockbox Accounts against any of the following: (1) any claim or
liens that arise by operation of law and any other claims or liens not created under the
Uniform Commercial Code or (2) any claim or lien in favor of the United States of America or
any state or other political subdivision thereof or any agency or instrumentality of any of
the foregoing.



     (F) The opinions set forth in paragraph (h) above are subject to the following additional
assumptions, qualifications and limitations:




     (i) We call to your attention that under the NY UCC actions taken by the Depositary or
the Administrative Agent (including amending any agreement relating to each of the Deposit
Account the Lockbox Account in a manner that either (1) eliminates or changes the basis for
the Administrative Agent ‘s “control” over such Deposit Account and Lockbox Account, (2)
changes the identity of the Depositary’s customer with respect to such Deposit Account and
Lockbox Account or (3) changes the law governing such Deposit Account and Lockbox Account)
may adversely affect the security interest of the Administrative Agent, and we express no
opinion as to the effect of any of the foregoing on the opinions expressed herein.




     (ii) We have assumed that each of the Deposit Account and the Lockbox Account has been
established and will be maintained in the manner set forth herein and in each of the Account
Control Agreement and the Lockbox Control Agreement, (including,



 









 





To the Lenders and the Administrative Agent

March 23, 2010

Page 10





without limitation, as to the identity of the Depositary’s customer) and is and will
remain a “deposit account” within the meaning of the NY UCC.



     (G) To the extent it may be relevant to the opinions expressed herein, we have assumed that
the parties to the Documents (other than the Borrowers) have the power to enter into and perform
such documents and to consummate the transactions contemplated thereby and that such documents have
been duly authorized, executed and delivered by, and constitute legal, valid and binding
obligations of, such parties.



     (H) For purposes of the opinions set forth in paragraph (d) above, we have assumed that (i)
neither the Administrative Agent nor any of the Lenders has or will have the benefit of any
agreement or arrangement (excluding the Documents) pursuant to which any extensions of credit to
any Borrower are directly or indirectly secured by “margin stock” (as defined under the Margin
Regulations), (ii) neither the Administrative Agent nor any of the Lenders nor any of their
respective affiliates has extended or will extend any other credit to any Borrower directly or
indirectly secured by margin stock and (iii) neither the Administrative Agent nor any of the
Lenders has relied or will rely upon any margin stock as collateral in extending or maintaining any
extensions of credit pursuant to the Credit Agreement, as to which we express no opinion.



     (I) We express no opinion as to the application of, and our opinions above are subject to the
effect, if any, of, any applicable fraudulent conveyance, fraudulent transfer, fraudulent
obligation or preferential transfer law.



     (J) The opinions expressed herein are limited to (i) the federal laws of the United States of
America and the laws of the State of New York, (ii) to the extent relevant to the opinions
expressed in paragraphs (a), (b) and (c) above, the DGCL and the DLLCA and (iii) to the extent
relevant to the opinions expressed in paragraph (g) above, the Del. UCC, in each case as currently
in effect. Our opinions in paragraphs (f), (h) and (i) above are limited to Article 9 of the NY
UCC, and our opinions in paragraph (g) above are limited to Article 9 of the Del. UCC, and
therefore, those opinion paragraphs do not address (A) laws of jurisdictions other than New York
and Delaware, and laws of New York and Delaware other than Article 9 of the NY UCC and Article 9 of
the Del. UCC, (B) collateral of a type not subject to Article 9 of the NY UCC and Article 9 of the
Del. UCC, and (C) under the choice of law rules of the UCC with respect to the law governing
perfection and priority of security interests granted, and, to the extent applicable, under Section
8-110 of the NY UCC, what law governs perfection and/or priority of the security interests granted
in the collateral covered by this opinion letter.



     (K) Our opinions as to any matters governed by the Del. UCC are based solely upon our review
of the Del. UCC as published in the CCH Secured Transactions Guide, last updated March 2, 2010,
without any review or consideration of any decisions or opinions of courts or other adjudicative
bodies or governmental authorities of the State of Delaware, whether or not reported or summarized
in the foregoing publication.



 









 





To the Lenders and the Administrative Agent

March 23, 2010

Page 11




     (L) Our opinions are limited to those expressly set forth herein, and we express no opinions
by implication.



     (M) We express no opinion as to the compliance or noncompliance, or the effect of the
compliance or noncompliance, of any of the addressees or any other person or entity with any state
or federal laws or regulations applicable to any of them by reason of their status as or
affiliation with a federally insured depository institution.



     The opinions expressed herein are solely for the benefit of the addressees hereof and of any
other person or entity becoming a Lender or an Administrative Agent under the Credit Agreement, in
each case above, in connection with the transaction referred to herein and may not be relied on by
such addressees or such other persons or entities for any other purpose or in any manner or for any
purpose by any other person or entity.



	 	 	 	 	 
	 	Very truly yours,

 	 
	 	/s/ Jones Day
 	 
	 	 	 
	 	 	 
	 




 











 










BORROWING BASE REPORT




	 	 	 	 	 

	 

	 	Rpt #	 	 
	Obligor Number:

	 	Date:	 	 
	Loan Number:	 	Period Covered: ___________ to ____________






	 	 	 	 	 	 	 	 	 	 	 	 	 
	COLLATERAL CATEGORY	 	A/R	 	 	Inventory	 	 	Total Eligible Collateral
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Description	 	 	 	 	 	 	 	 	 	 
	1
	 	Beginning Balance (Previous report — Line 8)	 	 	 	 	 	 	 	 	 	 
	2
	 	Additions to Collateral (Gross Sales or Purchases)	 	 	 	 	 	 	 	 	 	 
	3
	 	Other Additions (Add back any non-A/R cash in line 3)	 	 	 	 	 	 	 	 	 	 
	4
	 	Deductions to Collateral (Cash Received)	 	 	 	 	 	 	 	 	 	 
	5
	 	Deductions to Collateral (Discounts, other)	 	 	 	 	 	 	 	 	 	 
	6
	 	Deductions to Collateral (Credit Memos, all)	 	 	 	 	 	 	 	 	 	 
	7
	 	Other non-cash credits to A/R	 	 	 	 	 	 	 	 	 	 
	8
	 	Total Ending Collateral Balance	 	 	 	 	 	 	 	 	 	 
	9
	 	Less Ineligible — Past Due	 	 	 	 	 	 	 	 	 	 
	10
	 	Less Ineligible — Cross-age (___%)	 	 	 	 	 	 	 	 	 	 
	11
	 	Less Ineligible — Foreign	 	 	 	 	 	 	 	 	 	 
	12
	 	Less Ineligible — Contra	 	 	 	 	 	 	 	 	 	 
	13
	 	Less Ineligible — Other (attached schedule)	 	 	 	 	 	 	 	 	 	 
	14
	 	Total Ineligibles — Accounts Receivable	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	15
	 	Less Ineligible — Inventory Slow-moving	 	 	 	 	 	 	 	 	 	 
	16
	 	Less Ineligible — Inventory Offsite not covered	 	 	 	 	 	 	 	 	 	 
	17
	 	Less Ineligible — Consigned	 	 	 	 	 	 	 	 	 	 
	18
	 	Less Ineligible — Other (attached schedule)	 	 	 	 	 	 	 	 	 	 
	19
	 	Total Ineligible Inventory	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	20
	 	Total Eligible Collateral	 	 	 	 	 	 	 	 	 	 
	21
	 	Advance Rate Percentage	 	 	%	 	 	 	%	 	 	 
	22
	 	Net Available — Borrowing Base Value	 	 	 	 	 	 	 	 	 	 
	23
	 	Reserves (other)	 	 	 	 	 	 	 	 	 	 
	24
	 	Total Borrowing Base Value	 	 	 	 	 	 	 	 	 	 
	24A
	 	Total Availability/CAPS	 	 	 	 	 	 	 	 	 	 
	25
	 	Revolver Line	 	 	 	 	 	 	 	 	 	Total Revolver Line
	26
	 	Maximum Borrowing Limit (Lesser of 25 or 26)*	 	 	 	 	 	 	 	 	 	Total Available
	26A
	 	Suppressed Availability	 	 	 	 	 	 	 	 	 	 
	LOAN STATUS	 	 	 	 	 	 	 	 	 	 
	27
	 	Previous Loan Balance (Previous Report Line 31)	 	 	 	 	 	 	 	 	 	 
	28	 	Less:      A.  Net Collections (Same as line 4)

B.  Adjustments/Other ____________
	 	 	 	 	 	 	 	 	 	 
	29
	 	Add:       A.  Request for Funds

B.  Adjustments/Other ____________
	 	 	 	 	 	 	 	 	 	 
	30
	 	New Loan Balance	 	 	 	 	 	 	 	 	 	 
	31
	 	LC Exposure	 	 	 	 	 	 	 	 	 	 
	32
	 	Availability Not Borrowed (Lines 27 less 31 & 32)	 	 	 	 	 	 	 	 	 	 
	33
	 	OVERALL EXPOSURE (lines 31 & 32)	 	 	 	 	 	 	 	 	 	Total New Loan Balance:





Pursuant to, and in accordance with, the terms and provisions of that certain Credit Agreement
(“Agreement”), among JPMorgan Chase Bank, N.A. (“Chase”), as administrative agent for the Lender
Parties, the Lender Parties party thereto and Kaiser Aluminum Corporation, Kaiser Aluminum
Investments Company, Kaiser Aluminum Fabricated Products, LLC and Kaiser Aluminium International,
Inc. (“Borrowers”), Borrower Representative is executing and delivering to Chase this Collateral
Report accompanied by supporting data (collectively referred to as the “Report”). Borrower
Representative represents and warrants to Chase that this Report is true and correct, and is based
on information contained in Borrowers’ own financial accounting records. Borrower Representative,
by the execution of this Report, hereby, on behalf of the Borrowers, ratifies, confirms and affirms
all of the terms, conditions and provisions of the Agreement, and further certifies on this
________ day of _______________, 20__, that the Borrowers are in compliance with said Agreement.




	 	 	 
	BORROWER REPRESENTATIVE NAME:

	 	AUTHORIZED SIGNATURE:
	KAISER ALUMINUM CORPORATION
	 	 






Exhibit C-1

















 





EXHIBIT D




COMPLIANCE CERTIFICATE





			
	To:	 	The Lender Parties party to the

Credit Agreement Described Below





     This Compliance Certificate is furnished pursuant to that certain Credit Agreement, dated as
of March 22, 2010 (as amended, modified, renewed or extended from time to time, the “Credit
Agreement”), among Kaiser Aluminum Corporation, Kaiser Aluminum Investments Company, Kaiser
Aluminum Fabricated Products, LLC and Kaiser Aluminium International, Inc. (collectively, the
“Borrowers”), JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders and as the
Issuing Bank, and the other Lender Parties party thereto. Unless otherwise defined herein,
capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the
Credit Agreement.



     THE UNDERSIGNED HEREBY CERTIFIES, ON ITS BEHALF AND ON BEHALF OF THE BORROWERS, THAT:



     1. I am the duly elected [________]1 of the Borrower
Representative; and



     2. I have reviewed the terms of the Credit Agreement and I have made, or have caused to be
made under my supervision, a detailed review of the transactions and conditions of the Company and
its Subsidiaries during the accounting period covered by the attached financial statements [and
such financial statements present fairly in all material respects the financial condition and
results of operations of the Company and the Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of
footnotes]2; and



     3. The examinations described in paragraph 2 did not disclose, except as set forth below, and
I have no knowledge of the existence of any condition or event which constitutes a Default or Event
of Default during or at the end of the accounting period covered by the attached financial
statements or as of the date of this Certificate; and



     4. I hereby certify that no Borrower has changed (i) its name, (ii) its chief executive
office, (iii) principal place of business, (iv) the type of entity it is or (v) its state of
incorporation or organization without having given the Administrative Agent the notice required by
Section 4.11 of the Security Agreement; and



     5. [Schedule I attached hereto sets forth financial data and computations of the Fixed
Charge Coverage Ratio demonstrating the Borrowers’ compliance with the requirements of Section 6.12
of the Credit Agreement, all of which data and computations are true, complete and correct;
and] 3



     6. Schedule II hereto sets forth the computations necessary to determine the
Applicable Rate commencing on the Business Day this Compliance Certificate is delivered.





 




			
	1	 	To be executed by a Financial Officer of
Kaiser Aluminum Corporation.
	 
	2	 	To be included only if this Compliance
Certificate is being delivered with the quarterly or monthly financial
statements as provided in Sections 5.01(b) or 5.01(c), respectively, of the
Credit Agreement.
	 
	3	 	To be added only if this Compliance
Certificate is being delivered if a Covenant Trigger Event has occurred and is
continuing.




Exhibit D-1









 










     Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature
of the condition or event, the period during which it has existed and the action which the
Borrowers have taken, are taking, or propose to take with respect to each such condition or event:



      




      




      




     The foregoing certifications, together with the computations set forth in Schedule I and
Schedule II hereto and the financial statements delivered with this Certificate in support hereof,
are made and delivered this     day of                ,    .



	 	 	 	 	 
	 	KAISER ALUMINUM CORPORATION,

as Borrower Representative

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 




Compliance Certificate

Signature Page



Exhibit D-2









 






	 	 	 	 	 



SCHEDULE I




Borrowers’ Calculation of the Fixed Charge Coverage Ratio as of _________, ____






Exhibit D-3









 








SCHEDULE II




Borrowers’ Applicable Rate Calculation





Exhibit D-4









 





EXHIBIT E




JOINDER AGREEMENT




     THIS JOINDER AGREEMENT (this “Agreement”), dated as of __________, ____, 20__, is
entered into between ______________________, a _________________ (the “New Borrower”) and
JPMORGAN CHASE BANK, N.A., in its capacity as administrative agent (the “Administrative
Agent”) under that certain Credit Agreement, dated as of March 22, 2010, among Kaiser Aluminum
Corporation, Kaiser Aluminum Investments Company, Kaiser Aluminum Fabricated Products, LLC and
Kaiser Aluminium International, Inc. (collectively, the “Borrowers”), the Administrative
Agent and the other Lender Parties party thereto (as the same may be amended, modified, extended or
restated from time to time, the “Credit Agreement”). All capitalized terms used herein and
not otherwise defined shall have the meanings set forth in the Credit Agreement.



     The New Borrower and the Administrative Agent, for the benefit of the Lender Parties, hereby
agree as follows:



     1. The New Borrower hereby acknowledges, agrees and confirms that, by its execution of this
Agreement, the New Borrower will be deemed to be a Borrower under the Credit Agreement and a “Loan
Guarantor” for all purposes of the Credit Agreement and shall have all of the obligations of a
Borrower and a Loan Guarantor thereunder as if it had executed the Credit Agreement. The New
Borrower hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms,
provisions and conditions contained in the Credit Agreement, including without limitation (a) all
of the representations and warranties of the Borrowers set forth in Article III of the Credit
Agreement, (b) all of the covenants set forth in Articles V and VI of the Credit Agreement and (c)
all of the guaranty obligations set forth in Article X of the Credit Agreement. Without limiting
the generality of the foregoing terms of this paragraph 1, the New Borrower, subject to the
limitations set forth in Section 10.10 of the Credit Agreement, hereby guarantees, jointly and
severally with the other Loan Guarantors, to the Administrative Agent and the other Lender Parties,
as provided in Article X of the Credit Agreement, the prompt payment [and performance] of the
Guaranteed Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration or otherwise) strictly in accordance with the terms thereof and agrees that if any of
the Guaranteed Obligations are not paid or performed in full when due (whether at stated maturity,
as a mandatory prepayment, by acceleration or otherwise), the New Borrower will, jointly and
severally together with the other Loan Guarantors, promptly pay [and perform] the same, without any
demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of
any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at
extended maturity, as a mandatory prepayment, by acceleration or otherwise) in accordance with the
terms of such extension or renewal.



     2. If required, the New Borrower is, simultaneously with the execution of this Agreement,
executing and delivering such Collateral Documents (and such other documents and instruments) as
requested by the Administrative Agent in accordance with the Credit Agreement.



     3. The address of the New Borrower is the same address as for the other Borrowers, as set
forth in Section 9.01 of the Credit Agreement.



     4. The New Borrower hereby waives acceptance by the Administrative Agent and the other Lender
Parties of the guaranty by the New Borrower upon the execution of this Agreement by the New
Borrower.



Exhibit E-1









 





     5. This Agreement may be executed in any number of counterparts, each of which when so
executed and delivered shall constitute an original, but all of which when taken together shall
constitute one and the same instrument.



     6. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.








Exhibit E-2









 








     IN WITNESS WHEREOF, the New Borrower has caused this Agreement to be duly executed by its
authorized officer, and the Administrative Agent, for the benefit of the Lender Parties, has caused
the same to be accepted by its authorized officer, as of the day and year first above written.



	 	 	 	 	 
	 	[NEW BORROWER]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Acknowledged and accepted:



JPMORGAN CHASE BANK, N.A., as Administrative

Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 





JOINDER AGREEMENT

SIGNATURE PAGE




Exhibit E-3









 








EXHIBIT F




FORM OF EXEMPTION CERTIFICATE





     Reference is made to the Credit Agreement dated as of March 22, 2010 (as amended, supplemented
or otherwise modified from time to time, the “Credit Agreement”), among Kaiser Aluminum
Corporation, Kaiser Aluminum Investments Company, Kaiser Aluminum Fabricated Products, LLC and
Kaiser Aluminium International, Inc. (each a “Borrower” and collectively the
“Borrowers”), the Lenders (as defined therein) parties thereto and JPMorgan Chase Bank,
N.A., as administrative agent (in such capacity, the “Administrative Agent”) for the
Lenders. Capitalized terms used herein without definition shall have the meanings ascribed to them
in the Credit Agreement. [Name of Foreign Lender] (the “Subject Lender”) is
providing this certificate pursuant to Section 2.17(f)(ii)(c) of the Credit Agreement. The Subject
Lender hereby represents and warrants that:




     1. The Subject Lender is the sole record and beneficial owner of the interest in the
Loan in respect of which it is providing this certificate.




     2. The Subject Lender is not a “bank” for purposes of Section 881(c)(3)(A) of the Code.
In this regard, the Subject Lender further represents and warrants that:




     (a) the Subject Lender is not subject to regulatory or other legal requirements
as a bank in any jurisdiction;




     (b) the Subject Lender has not been treated as bank for purposes of any tax,
securities law or other filing or submission made to any governmental authority, any
application made to a rating agency or qualification for any exemption from tax,
securities law or other legal requirements;




     (c) the Subject Lender is acquiring an interest in the Loan for its own
account, and the Subject Lender will not hold such interest, directly or indirectly,
for or on behalf of, or as nominee for, any bank. Further, the Subject Lender is
not a “conduit entity” within the meaning of U.S. Treasury Regulations Section
1.881-3 and agrees that it will promptly notify the Borrower and the Administrative
Agent if the Subject Lender becomes a “conduit entity” with respect to the Loan
owned by it within the meaning of such regulations or any successor thereto or other
regulations promulgated under Section 7701(l) of the Code; and




     (d) the Subject Lender is not using funds to acquire an interest in the Loan
that were borrowed from a bank on a limited recourse or other basis, the effect of
which is to shift the economic benefits or burdens of ownership of an interest in
the Loan to such bank.




     3. The Subject Lender meets all of the requirements under Code Section 871(h) or 881(c)
to be eligible for a complete exemption from withholding of United States withholding tax on
interest payments made to it under the Credit Agreement, including, without limitation, that
it is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code)
of the Borrower and is not a controlled foreign corporation related to the Borrower (within
the meaning of Section 864(d)(4) of the Code). In addition, the Subject Lender represents
and warrants that it has not taken, and will not take, any action that would cause the Loan
held by it at any time



Exhibit F-1









 







during the term of the Credit Agreement to fail to be in registered form within the
meaning of Temporary U.S. Treasury Regulations Section 5f.103-1(c) or any successor
regulations.




     IN WITNESS WHEREOF, the undersigned has duly executed this certificate.



	 	 	 	 	 
	 	[Name of Foreign Lender]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 


Date:____________________






EXEMPTION AGREEMENT

SIGNATURE PAGE


Exhibit F-2