REVOLVING CREDIT AGREEMENT

Exhibit 10.26

EXECUTION VERSION

 

REVOLVING CREDIT AGREEMENT

Dated as of January 12, 2007

Among

KEYSTONE AUTOMOTIVE HOLDINGS, INC.,

KEYSTONE AUTOMOTIVE OPERATIONS, INC.,

as the Borrower,

The Lenders Party Hereto,

BANK OF AMERICA, N.A.,

as Administrative Agent, Collateral Agent, Issuing Bank and Swingline Lender

 

BANC OF AMERICA SECURITIES LLC

as

Lead Arranger and Book Manager

 

TABLE OF CONTENTS

 

 

i

Keystone Senior Credit Agreement

ii

Keystone Revolving Credit Agreement

iii

Keystone Revolving Credit Agreement

iv

Keystone Revolving Credit Agreement

v

Keystone Revolving Credit Agreement

REVOLVING CREDIT AGREEMENT

This REVOLVING CREDIT AGREEMENT (“Agreement”) is entered into as of January 12, 2007 among KEYSTONE AUTOMOTIVE HOLDINGS, INC., a Delaware corporation (“Holdings”), KEYSTONE AUTOMOTIVE OPERATIONS, INC., a Pennsylvania corporation (the “Borrower”), each LENDER and registered assigns from time to time party hereto, and BANK OF AMERICA, N.A., as Administrative Agent and Documentation Agent.

WHEREAS, the Borrower has requested that the Lenders provide a revolving credit facility, consisting of credit in the form of Revolving Loans at any time and from time to time prior to the Revolving Maturity Date, in an aggregate principal amount at any time outstanding not in excess of $125.0 million.

WHEREAS, the Borrower has requested that the Swingline Lender make Swingline Loans, at any time and from time to time prior to the Revolving Maturity Date, in an aggregate principal amount at any time outstanding not in excess of $7.0 million.

WHEREAS, the Borrower has requested that the Issuing Bank issue letters of credit, in an aggregate face amount at any time outstanding not in excess of $25.0 million, to support payment obligations incurred in the ordinary course of business by the Borrower and its Subsidiaries.

WHEREAS, the proceeds of the Loans are to be used in accordance with Section 6.11.

NOW, THEREFORE, the Lenders are willing to extend such credit to the Borrower and the Issuing Bank is willing to issue letters of credit for the account of the Borrower on the terms and subject to the conditions set forth herein. Accordingly, in consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE 1

D EFINITIONS AND A CCOUNTING T ERMS

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

“ Accounts ” means all “accounts,” as such term is defined in the UCC as in effect on the date hereof in the State of New York, in which any Person now or hereafter has rights.

 

Keystone Senior Credit Agreement

“ Account Debtor ” means any Person who may become obligated to another Person under, with respect to, or on account of, an Account.

“ Administrative Agent ” means Bank of America in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

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

“ Administrative Agent Fees ” shall have the meaning assigned to such term in Section 2.05(b).

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

“ Advent ” means Advent International Corp.

“ Advent Advisory Agreement ” means the Advisory Agreement dated October 30, 2003 between the Borrower and Advent, as in effect on such date.

“ Affiliate ” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. “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. Without limiting the generality of the foregoing, a Person shall be deemed to be Controlled by another Person if such other Person possesses, directly or indirectly, power to vote 10% or more of the securities having ordinary voting power for the election of directors, managing general partners or the equivalent.

“ Agents ” means the Administrative Agent, the Collateral Agent, the Documentation Agent and the Syndication Agent.

“ Agent-Related Persons ” means the Agents, together with their Affiliates (including, in the case of Bank of America in its capacity as the Administrative Agent and the Syndication Agent, the Arranger), and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates.

“ Aggregate Commitments ” means, at any time, the aggregate amount of the Revolving Commitments of all Lenders.

 

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Keystone Revolving Credit Agreement

“ Aggregate Exposures ” means, at any time, the sum of (i) the aggregate Outstanding Amount of all Loans plus (ii) the LC Exposure, each determined at such time.

“ Agreement ” means this Credit Agreement.

“ Applicable Fee ” means, for any day, with respect to any Revolving Loan, the applicable percentage set forth in Annex I under the caption “Applicable Fee”.

“ Applicable Margin ” means, for any day, with respect to any Revolving Loan, the applicable percentage set forth in Annex I under the appropriate caption.

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

“ Arranger ” means Banc of America Securities LLC, in its capacity as lead arranger and book manager.

“ Asset Sale ” means any Disposition by Holdings or any Subsidiary (including the Borrower), other than (i) Dispositions described in clauses (a), (b), (c), (d), (e) and (f) of Section 7.05, (ii) the Retail Facilities Disposition or any Non-Core Disposition, to the extent the Net Cash Proceeds thereof are applied or contractually committed to be applied within 12 months after receipt thereof to purchase assets used or useful in the business of the Borrower and its Subsidiaries or to finance a Permitted Acquisition in reliance on Section 7.02(f) and, if contractually committed but not so applied within such 12 months, then so applied within 18 months after the receipt thereof (and, at the end of such 12 or 18 month period as applicable, any amount of such Net Cash Proceeds not so applied or contractually committed to be applied shall be applied to repay the outstanding loans under the Term Loan Facility if and to the extent required pursuant to the Term Loan Facility), (iii) any Disposition or series of related Dispositions resulting in aggregate Net Cash Proceeds not exceeding (x) $1,000,000 for any single Disposition or series of related Dispositions or (y) $5,000,000 for all such Dispositions or series of related Dispositions consummated on or after the Closing Date, and (iv) any other Disposition described in Section 7.05 to the extent the Net Cash Proceeds thereof are applied or contractually committed to be applied within 12 months after receipt thereof to purchase assets used or useful in the business of the Borrower and its Subsidiaries (other than pursuant to a Permitted Acquisition) (and, at the end of such 12 or 18 month period, as applicable, any amount of such Net Cash Proceeds not so applied or contractually committed to be applied shall be applied to repay the outstanding loans under the Term Loan Facility if and to the extent required pursuant to the Term Loan Facility).

 

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Keystone Revolving Credit Agreement

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

“ Assignment and Assumption ” means an Assignment and Assumption substantially in the form of Exhibit D.

“ Attorney Costs ” means and includes all fees, expenses and disbursements of any law firm or other external counsel (including, without limitation, with respect to third parties retained by such law firm or other external counsel in connection with this Agreement) and, without duplication, all expenses and disbursements of internal counsel.

“ Attributable Indebtedness ” means, on any date, (a) in respect of any capital lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP as if such lease were accounted for as a capital lease.

“ Audited Financial Statements ” means the audited consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal year ended December 31, 2005, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Borrower and its Subsidiaries, including the notes thereto, which financial statements shall not be subject to any “going concern” or like qualifications or exceptions or any qualification or exception as to the scope of the audit conducted to prepare such financial statements.

“ Availability Reserves ” means, without duplication of any other Reserves or items that are otherwise addressed or excluded through eligibility criteria, such reserves as the Administrative Agent, from time to time determines in its Permitted Discretion.

“ Bain Advisory Agreement ” means the Advisory Agreement dated October 30, 2003 between the Borrower and Bain Capital, as in effect on such date.

“ Bain Capital ” means Bain Capital Partners, LLC.

“ Bank of America ” means Bank of America, N.A. and its successors.

“ Bank Product Agreements ” means any agreement for services provided to any Loan Party by any Lender or any of its Affiliates (other than those

 

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Keystone Revolving Credit Agreement

constituting a Cash Management Agreement), on account of (a) credit cards, (b) purchase cards, and (c) Swap Contracts.

“ Base Rate ” means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.” The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

“ Base Rate Loan ” means any Loan or Borrowing that bears interest based on the Base Rate.

“ Base Rate Revolving Loan ” means any Revolving Loan bearing interest at a rate determined by reference to the Base Rate in accordance with the provisions of Article II.

“ Base Revolving Borrowing ” means a Borrowing comprised of Base Rate Revolving Loans.

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

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

“ Borrowing Base ” means at any time, subject to adjustment as provided in Section 2.14, an amount equal to the sum of, without duplication:

(i) the book value of Eligible Accounts of the Loan Parties, net of Receivables Reserves, multiplied by the advance rate of 85%, plus

(ii) the advance rate of 85% of the Net Recovery Cost Percentage multiplied by the Cost of Eligible Inventory, net of Inventory Reserves, of the Loan Parties, minus

(iii) any Availability Reserves established from time to time by the Administrative Agent in accordance with Section 2.16:

 

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Keystone Revolving Credit Agreement

provided that , prior to the receipt of a satisfactory appraisal of the Inventory and completion of a field audit of the Borrowing Base as set out in Section 4.01(l) and 6.17, the Borrowing Base shall equal the lesser of:

(i) $45 million and

(ii) the sum of 50% of the book value of the Borrower’s accounts receivable and 20% of the book value of the Borrower’s Inventory.

The Borrowing Base at any time shall (subject to the proviso above) be determined by reference to the most recent Borrowing Base Certificate theretofore delivered to the Administrative Agent and the Collateral Agent.

“ Borrowing Base Certificate ” means an Officers’ Certificate from the Borrower, substantially in the form of, and containing the information prescribed by, Exhibit K (or such other form approved by the Administrative Agent) delivered to the Administrative Agent setting forth the Borrower’s calculation of the Borrowing Base.

“ Borrowing Request ” means a request by the Borrower in accordance with the terms of Section 2.03 and substantially in the form of Exhibit G, or such other form as shall be approved by the Administrative Agent.

“ Business Day ” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located and, if such day relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

“ Capex Basket Amount ” means, for any fiscal year, an amount equal to (i) the sum of (A) $12,000,000 plus (or minus , in the case of dispositions) (B) 20% of the aggregate EBITDA Transaction Amount with respect to all Permitted Acquisitions (or dispositions) made by the Borrower and its Subsidiaries after the Closing Date and prior to the end of such fiscal year (such sum in this clause (i), the “ Base Amount ”) plus (ii) any portion of the Base Amount for the immediately previous fiscal year that was not expended in such previous fiscal year for Capital Expenditures (the “ Carryover Amount ”). Capital Expenditures shall be applied against the Carryover Amount for such fiscal year only to the extent the aggregate amount thereof exceeds the Base Amount for such fiscal year. Any Carryover Amount that is not expended in the first fiscal year in which it is available may not be carried over for expenditure in any subsequent fiscal year.

“ Capital Expenditures ” means, for any period, (a) the additions to property, plant and equipment and other capital expenditures of Holdings and its

 

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Keystone Revolving Credit Agreement

Subsidiaries that are (or would be) set forth in a consolidated statement of cash flows of Holdings and its Subsidiaries for such period prepared in accordance with GAAP and (b) any Synthetic Lease Obligations incurred by Holdings and its Subsidiaries during such period; provided that Capital Expenditures for such period shall not include (i) a Permitted Acquisition permitted by Section 7.02(f), (ii) a leasehold improvement paid for by a Loan Party on premises leased by such Loan Party, but only to the extent such Loan Party has been reimbursed by the landlord under such leasehold within 60 days of the incurrence of such expenditure, (iii) any such additions to the extent financed with the Net Cash Proceeds of an Asset Sale or with Insurance Proceeds within twelve months of the receipt thereof or (iv) exchanges and trade-ins of equipment, in each case to the extent otherwise included in “Capital Expenditures” for such period.

“ Cash Dominion Event ” shall have the meaning set forth in Section 2.04(f).

“ Cash Management Agreement ” means any agreement evidencing one or more of the following types or services or facilities provided to any Loan Party by any Lender or any of its Affiliates: (a) ACH transactions, (b) cash management, including, without limitation, controlled disbursement services, (c) foreign exchange facilities, (d) credit cards, (e) deposit and other accounts and (f) merchant services (other than those constituting a line of credit).

“ Change of Control ” means an event or series of events by which:

(a) after an Initial Public Offering is consummated, (i) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time; “beneficially own” has the corresponding meaning), directly or indirectly, of a greater percentage of the Voting Securities of Holdings on a fully-diluted basis (and taking into account all such Voting Securities that such person or group has the right to acquire pursuant to any option right) than the percentage of such Voting Securities beneficially owned by the Sponsor or (ii) the Sponsor ceases to beneficially own, directly or indirectly, at least 25% of the Voting Securities of Holdings on a fully-diluted basis (and taking into account all such Voting Securities that such person or group has the right to acquire pursuant to any option right);

 

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Keystone Revolving Credit Agreement

(b) before an Initial Public Offering is consummated, the Sponsor ceases to be the “beneficial owner”, directly or indirectly, of at least 51% of the Voting Securities of Holdings on a fully-diluted basis (and taking into account all such Voting Securities that the Sponsor has the right to acquire pursuant to any option right);

(c) at any time from or after the consummation of an Initial Public Offering, during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of Holdings or the Borrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body (excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any person or group other than a solicitation for the election of one or more directors by or on behalf of the board of directors);

(d) Holdings ceases to be the “beneficial owner”, directly or indirectly, of 100% of the Voting Securities of the Borrower; or

(e) the occurrence of a “Change of Control” under the Senior Subordinated Notes or the Term Loan Facility.

“ Chattel Paper ” means all “chattel paper,” as such term is defined in the UCC as in effect on the date hereof in the State of New York, in which any Person now or hereafter has rights.

“ Class ”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline Loans and, when used in reference to any Commitment, refers to whether such Commitment is a Revolving Commitment or Swingline Commitment.

“ Closing Date ” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 4.01 (or, in the case of Section 4.01(c), waived by the Person entitled to receive the applicable payment).

 

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Keystone Revolving Credit Agreement

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Collateral ” means any and all “Collateral”, as defined in any Security Document.

“ Collateral Agent ” means Bank of America in its capacity as collateral agent under any of the Loan Documents, or any successor collateral agent.

“ Collateral and Guarantee Requirement ” means the requirement that:

(a) the Administrative Agent shall have received from each Loan Party either (i) a counterpart of the Security Agreement duly executed and delivered on behalf of such Loan Party or (ii) in the case of any Person that becomes a Loan Party after the Closing Date, a supplement to the Security Agreement, in the form specified therein, duly executed and delivered on behalf of such Loan Party;

(b) all outstanding Equity Interests in the Borrower and its Subsidiaries owned by or on behalf of any Loan Party shall have been pledged pursuant to the Security Agreement (except that the Loan Parties shall not be required to pledge more than 66% of the outstanding voting Equity Interests in any Foreign Subsidiary) and the Administrative Agent shall have received all certificates or other instruments in existence representing such Equity Interests, together with stock powers or other instruments of transfer with respect thereto endorsed in blank;

(c) all documents and instruments, including UCC financing statements and Mortgages, required by law or reasonably requested by the Administrative Agent to be filed, registered or recorded to create the Liens intended to be created by the Security Documents and perfect or record such Liens to the extent, and with the priority, required by, and subject to the limitations set forth in, the Security Agreement, shall have been filed, registered or recorded or delivered to the Administrative Agent for filing, registration or recording;

(d) the Administrative Agent shall have received (i) counterparts of a Mortgage with respect to each Mortgaged Property duly executed and delivered by the record owner of such Mortgaged Property, (ii) a policy or policies of title insurance issued by a nationally recognized title insurance company insuring the Lien of each such Mortgage as a valid first Lien on the Mortgaged Property described therein, free of any other Liens except as expressly permitted by Section 7.01, together with such endorsements, coinsurance and reinsurance as the Administrative Agent or the Required Lenders may reasonably request and (iii) such surveys, abstracts, appraisals, legal opinions and other documents as the

 

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Keystone Revolving Credit Agreement

Administrative Agent or the Required Lenders may reasonably request with respect to any such Mortgage or Mortgaged Property;

(e) each Loan Party shall have obtained all consents and approvals reasonably required to be obtained by it in connection with the execution and delivery of all Security Documents to which it is a party, the performance of its obligations thereunder and the granting of the Liens granted by it thereunder;

(f) each Loan Party shall have taken all other action reasonably required under the Security Documents to perfect, register and/or record the Liens granted by it thereunder; and

(g) any warehousemen, bailees or other similar Persons holding Collateral (including inventory) owned by the Loan Parties, shall have entered into agreements acknowledging the Transaction Liens, waiving any Liens in their favor and acknowledging the rights of the Administrative Agent under the Security Agreement.

“ Commitment ” means, with respect to any Lender, such Lender’s Revolving Commitment, LC Commitment or Swingline Commitment.

“ Commitment Fee ” shall have the meaning assigned to such term in Section 2.05(a).

“ Commitment Letter ” means the Commitment Letter dated December 6, 2006 among Bank of America, Banc of America Securities LLC, Holdings and the Borrower.

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

“ Consolidated Adjusted EBITDA ” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income for such period plus (a) without duplication, the following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated Interest Charges for such period, (ii) the provision for federal, state, local and foreign income or other similar taxes (including franchise taxes) payable by the Borrower and its Subsidiaries for such period, (iii) the amount of depreciation and amortization expense deducted in determining such Consolidated Net Income, (iv) management fees paid pursuant to the Bain Advisory Agreement or the Advent Advisory Agreement, (v) any non-capitalized transactions costs, fees and expenses incurred with respect to any Permitted Acquisition (or with respect to any prospective Permitted Acquisition which is not consummated), any one-time payments made in connection with any Permitted Acquisition, so long as such one-time payments are contemplated to be made at the time of

 

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consummation of such Permitted Acquisition and are set forth in the Permitted Acquisition Certificate with respect to such Permitted Acquisition and any non-capitalized transactions costs, fees and expenses incurred with respect to the transactions contemplated by this Agreement, (vi) any non-cash charges (including deferred financing fees) to the extent they will not result in a cash charge in any future period and any interest payable in kind, (vii) any extraordinary items (including losses), and (viii) any unusual and non-recurring expenses or losses but only to the extent that the amounts in this clause (viii) in the aggregate do not exceed 10% of Core EBITDA for such period, and minus (b) without duplication, the following to the extent included in calculating such Consolidated Net Income: (i) any extraordinary items (including gains), and (ii) any unusual and non-recurring income or gains but only to the extent that the amounts in this clause (ii) in the aggregate do not exceed 10% of Core EBITDA for such period, in the case of all the clauses set forth above determined in accordance with GAAP. “ Core EBITDA ” means, for any period, “Consolidated Adjusted EBITDA” calculated in accordance with this definition but without giving effect to clauses (a)(viii) and (b)(ii) hereof.

“ Consolidated Fixed Charge Coverage Ratio ” means, as of any date of determination, the ratio of (a) Consolidated Adjusted EBITDA for the period of the four prior fiscal quarters ending on such date minus Capital Expenditures for such period to (b) Consolidated Fixed Charges for such period plus the amount of cash payments made during such period by the Borrower and its Subsidiaries in respect of federal, state, local and foreign income taxes.

“ Consolidated Fixed Charges ” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the sum, without duplication, of (a) Consolidated Interest Charges for such period, (b) the aggregate amount of scheduled amortization payments of principal made during such period in respect of Long-Term Indebtedness of the Borrower and its Subsidiaries (except payments made by the Borrower or any Subsidiary to the Borrower or any Subsidiary), which payments, with respect to Indebtedness under the Term Loan Facility, shall be those made pursuant to Section 2.05(a) of the Term Loan Facility (as such amounts shall have been reduced pursuant to Section 2.05(b) thereof), and (c) the aggregate amount of principal payments (except scheduled amortization payments of principal) made during such period in respect of Long-Term Indebtedness of the Borrower and its Subsidiaries (other than the Loans and Indebtedness under the Term Loan Facility), to the extent that such payment reduced any scheduled amortization payment of principal that would have become due within one year after the date of such payment.

“ Consolidated Funded Indebtedness ” means, as of any date of determination, for the Borrower and its Subsidiaries on a consolidated basis, the sum, without duplication, of all Funded Indebtedness of the Borrower and its Subsidiaries on such date.

 

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“ Consolidated Interest Charges ” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the sum of (a) all cash interest, premium payments, debt discount, charges and related fees and expenses of the Borrower and its Subsidiaries in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, and (b) the portion of rent expense of the Borrower and its Subsidiaries with respect to such period under capital leases that is treated as interest in accordance with GAAP.

“ Consolidated Interest Coverage Ratio ” means, as of any date of determination, the ratio of (a) Consolidated Adjusted EBITDA for the period of the four prior fiscal quarters ending on such date to (b) Consolidated Interest Charges for such period.

“ Consolidated Interest Expense ” means, for any period, without duplication, the total consolidated interest expense of the Borrower and its Subsidiaries for such period (calculated (i) without regard to any limitations on the payment thereof and (ii) including amortization of debt discount and deferred financing costs (other than a write-off of the unamortized portion of such amounts attributable to the Existing Credit Agreement), capitalized interest, interest paid in kind, commitment fees, letter of credit fees and net amounts payable under interest rate protection agreements, appraisal fees and fees in connection with collateral audits, determined in accordance with GAAP plus, without duplication, (a) the portion of capital lease obligations of the Borrower and its Subsidiaries representing the interest factor for such period, (b) imputed interest on Attributable Indebtedness, (c) cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or trust to pay interest or fees to any Person (other than the Borrower or Wholly Owned Subsidiaries) in connection with Indebtedness incurred by such plan or trust, (d) all interest paid or payable with respect to discontinued operations, (e) the product of (i) all dividend payments on any series of any Preferred Stock of any Subsidiary of the Borrower (other than any Preferred Stock held by the Borrower or a Wholly Owned Subsidiary), multiplied by (ii) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state, local and foreign statutory tax rate of the Borrower and its Subsidiaries, expressed as a decimal, (f) all interest on any Indebtedness of the type described in clause (f) of the definition of “Indebtedness” with respect to the Borrower or any of its Subsidiaries and (g) the interest component on consulting agreements.

“ Consolidated Leverage Ratio ” means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated Adjusted EBITDA for the period of the four fiscal quarters most

 

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recently ended for which the Borrower has delivered financial statements pursuant to Section 6.01(a) or (b).

“ Consolidated Net Income ” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the net income of the Borrower and its Subsidiaries for such period determined in accordance with GAAP but excluding in any event (a) after-tax extraordinary gains or extraordinary losses; (b) after-tax gains or losses realized from (i) the acquisition of any securities, or the extinguishment or conversion of any Indebtedness or Equity Interest, of a Borrower or any of its Subsidiaries or (ii) any sales of assets (other than inventory in the ordinary course of business); (c) net earnings or loss of any other Person (other than a Subsidiary of a Borrower) in which the Borrowers or any of its Subsidiaries has an ownership interest, except (in the case of any such net earnings) to the extent such net earnings shall have actually been received by a Borrower or such Subsidiary (subject to the limitation in clause (d) below) in the form of cash dividends or distributions; (d) the net income of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary of its net income is not at the time of determination permitted without approval under applicable Law or under such Subsidiary’s organizational documents or any agreement or instrument applicable to such Subsidiary or its stockholders; (e) gains or losses from the cumulative effect of any change in accounting principles; (f) earnings resulting from any reappraisal, revaluation or write-up or write-down of assets; and (g) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of a Borrower or any of its Subsidiaries or is merged into or consolidated with a Borrower or any of its Subsidiaries or such Person’s assets are acquired by a Borrower or such Subsidiary. In addition, Consolidated Net Income shall be calculated without giving effect to (i) any write-off of deferred financing costs incurred as a result of the refinancing of Indebtedness, (ii) purchase accounting or similar adjustments required or permitted by GAAP, in connection with any Permitted Acquisitions, (iii) any gain or loss recognized in determining consolidated net income (or net loss) for such period in respect of pension and other post-retirement benefits and (iv) any gain or loss recognized in determining consolidated net income (or loss) for such period in respect of pension assets.

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

“ Control ” has the meaning specified in the definition of “Affiliate.”

“ Cost ” means, as reasonably determined by the Administrative Agent in good faith, with respect to Inventory, the lower of (a) cost computed on a specific identification or first in first out basis or (b) market value, provided that for

 

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purposes of the calculation of Borrowing Base, the Cost of Inventory shall not include (A) the portion of the cost of Inventory equal to the profit earned by any Affiliate on the sale thereof to any Loan Party, or (B) write ups or write downs in cost with respect to currency exchange rates.

“ Covenant Compliance Event ” shall have the meaning assigned to such term in Section 7.14.

“ Credit Extension ” means, as the context may require, (i) the making of a Loan by a Lender or (ii) the issuance of any Letter of Credit by the Issuing Bank or the amendment, extension or renewal of any Existing Letter of Credit; provided that “Credit Extensions” shall not include conversions and continuations of outstanding Loans.

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

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

“ Default Period ” shall have the meaning assigned to such term in Section 2.11(a).

“ Default Rate ” means an interest rate equal to (a) the Base Rate plus (b) the Applicable Margin, if any, applicable to Base Rate Loans plus (c) 2% per annum; provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Margin) otherwise applicable to such Loan plus 2% per annum, in each case to the fullest extent permitted by applicable Laws.

“ Defaulted Loan ” shall have the meaning assigned to such term in Section 2.11(a).

“ Defaulting Lender ” shall have the meaning assigned to such term in Section 2.11(a).

“ Disposition ” or “ Dispose ” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

 

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“ Documentation Agent ” means a financial institution, in its capacity as documentation agent under any of the Loan Documents, appointed by Bank of America after reasonable consultation with the Borrower, or any successor documentation agent.

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

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

“ EBITDA Transaction Amount” means, with respect to any Person acquired in a Permitted Acquisition or disposed of by the Borrower or any of its Subsidiaries after the Closing Date, the amount of Consolidated Adjusted EBITDA of such Person (determined as if the references to the Borrower and the Subsidiaries in the definition of Consolidated Adjusted EBITDA were references to such Person and its Subsidiaries) for the trailing 12-month period prior to the consummation of such acquisition or disposition, as relevant, all as determined on a consolidated basis for such Person.

“ Eligible Accounts ” shall have the meaning assigned to such term in Section 2.14(a).

“ Eligible Assignee ” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other than a natural person) approved by (i) the Administrative Agent, and (ii) unless a Default has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed), each of which shall have complied with Section 11.15, as applicable; provided that notwithstanding the foregoing, “Eligible Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or Subsidiaries.

“ Eligible Inventory ” means, subject to adjustment as set forth in Section 2.14(b), items of Inventory of any Loan Party, as applicable, held for sale in the ordinary course (excluding packing or shipping materials or maintenance supplies).

“ Environmental Laws ” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders and decrees, and any and all restrictions, limits, terms or conditions contained in permits, concessions, grants, franchises, licenses, agreements or governmental restrictions, in each case relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and wastewater discharges.

“ Environmental Liability ” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines,

 

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penalties or indemnities), of Holdings, the Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“ Equity Interests ” means (i) 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 or (ii) any warrants, options or other rights to acquire such shares or interests.

“ Equity Investors ” means the Sponsor, Advent and its Affiliates, Randolph Street Partners VI, and Bear Stearns Merchant Banking and its Affiliates, and members of senior management of the Borrower and its Subsidiaries.

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

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

“ ERISA Event ” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by Holdings, the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by Holdings, the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of an amendment to a Pension Plan or a Multiemployer Plan as a termination under Sections 4041 or 4041A of ERISA, as applicable, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon Holdings, the Borrower or any ERISA Affiliate.

 

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“ Eurodollar Rate ” means, for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the British Bankers Association LIBOR Rate (“ BBA LIBOR ”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. If such rate is not available at such time for any reason, then the “Eurodollar Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period.

“ Eurodollar Rate Loan ” means a Loan that bears interest at a rate based on the Eurodollar Rate.

“ Eurodollar Reserve Percentage ” means, for any day during any Interest Period, the reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the FRB for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “Eurocurrency liabilities”). The Eurodollar Rate for each outstanding Eurodollar Rate Loan shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage.

“ Eurodollar Revolving Borrowing ” means a Borrowing comprised of Eurodollar Revolving Loans.

“ Eurodollar Revolving Loan ” means any Revolving Loan bearing interest at a rate determined by reference to the Eurodollar Rate in accordance with the provisions of Article II.

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

“ Excess Availability ” means at any time (a) the lesser of (i) the Aggregate Commitments at such time and (ii) the Borrowing Base minus (b) the Aggregate Exposures, in each case determined at such time.

“ Excess Availability Requirements ” means Excess Availability equals or exceeds the greater of (x) 10% of the then-applicable Borrowing Base and (y) $8

 

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million (or if the Revolving Commitments are increased in accordance with the provisions of Section 2.16, an adjusted amount increased in proportion to the increase in the aggregate Revolving Commitments).

“ Existing Credit Agreement ” means that certain Credit Agreement dated as of October 30, 2003 among Holdings, the Borrower, any Lenders party thereto, Bank of America, as administrative agent, UBS Securities LLC, as Syndication Agent, PNC Bank, National Association, as Documentation Agent and Banc of America Securities LLC, as Lead Arranger and Book Manager and a syndicate of lenders, as in effect immediately prior to the Closing Date.

“ Existing Letters of Credit ” means those Letters of Credit issued under the Existing Credit Agreement described on Schedule I hereto.

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

“ Fee Letter ” means the letter agreement, dated December 6, 2006, among Holdings, the Borrower, the Administrative Agent and the Arranger.

“ Foreign Lender ” has the meaning specified in Section 11.15(a)(i).

“ Foreign Subsidiary ” means any Subsidiary that (i) is not organized under the laws of the United States, any State or the District of Columbia or any political subdivision thereof and (ii) is a “controlled foreign corporation” under the Code. ›

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

“ Fronting Fees ” shall have the meaning assigned to such term in Section 2.05(c)(ii).

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

 

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“ Funded Indebtedness ” of any Person means (a) the outstanding principal amount of all obligations of such Person, whether current or long-term, for borrowed money (including Obligations hereunder) and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments, (b) all purchase money Indebtedness of such Person, (c) all direct obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments, (d) all obligations of such Person in respect of the deferred purchase price of property or services (other than trade accounts payable and other accrued non-debt liabilities in the ordinary course of business), (e) Attributable Indebtedness of such Person in respect of capital leases and Synthetic Lease Obligations, (f) without duplication, all Guarantees of such Person with respect to outstanding Indebtedness of the types specified in clauses (a) through (e) above of Persons other than such Person or any Subsidiary, and (g) all Indebtedness of the types referred to in clauses (a) through (f) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person or any Subsidiary is a general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to such Person or such Subsidiary; provided that “Funded Indebtedness” shall not include any earnouts or other amounts constituting the payment of deferred purchase price with respect to any Permitted Acquisition permitted pursuant to Section 7.02(f) and the amount of which is based on, or calculated by reference to, bona fide financial or other operating performance, unless and until such earnouts or other amounts would be reflected as a liability on the balance sheet of such Person in accordance with GAAP if such balance sheet were prepared at such time.

“ Funding Default ” shall have the meaning assigned to such term in Section 2.11(a).

“ GAAP ” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

“ Governmental Authority ” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“ Guarantee ” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of

 

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Keystone Revolving Credit Agreement

guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or such other obligation of any other Person, whether or not such Indebtedness or such other obligation is assumed by such Person. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

“ Guarantors ” means, collectively, Holdings and each Domestic Subsidiary of the Borrower.

“ Guaranty ” means the Guaranty made by the Guarantors in favor of the Administrative Agent on behalf of the Lenders pursuant to the Security Agreement.

“ 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.

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

“ Holdings Administrative Advances ” means any unsecured loans or advances made by the Borrower to Holdings so long as the proceeds thereof are used for general administrative costs and expenses incurred by Holdings to the extent attributable to its capacity as a holding company of the Borrower.

 

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Keystone Revolving Credit Agreement

“ Increase Effective Date ” shall have the meaning assigned to such term in Section 2.15(b).

“ Increased-Cost Lender ” has the meaning specified in Section 11.16(a)(i).

“ Indebtedness ” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(b) all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

(c) net obligations of such Person under any Swap Contract;

(d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable and other accrued non-debt liabilities in the ordinary course of business);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(f) capital leases and Synthetic Lease Obligations; and

(g) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any capital lease or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.

“ Indemnified Liabilities ” has the meaning specified in Section 11.05.

 

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Keystone Revolving Credit Agreement

“ Indemnitees ” has the meaning specified in Section 11.05.

“ Information ” has the meaning specified in Section 11.08.

“ Initial Public Offering ” means an initial primary underwritten public offering of the common stock of Holdings at any time after the Closing Date, other than any public offering or sale pursuant to a registration statement on Form S-4, S-8 or a comparable or successor form.

“ Insurance Proceeds ” means any proceeds received from insurance maintained by or on behalf of Holdings or any Subsidiary (including the Borrower) and relating to claims with respect to losses of Holdings or such Subsidiary (including the Borrower), whether such proceeds are payable to Holdings, such Subsidiary (including the Borrower) or to the Administrative Agent, net of amounts of the type described in clauses (A), (B) and (C) of clause (ii) of the definition of “Net Cash Proceeds” with respect to the loss giving rise to receipt of such proceeds.

“ Intercreditor Agreement ” means the Intercreditor Agreement dated January 12, 2007 between the Agent and the Term Loan Facility Agent.

“ Interest Election Request ” means a request by the Borrower to convert or continue a Revolving Borrowing in accordance with Section 2.08(b), substantially in the form of Exhibit B or such other form approved by Administrative Agent.

“ Interest Payment Date ” means, (a) as to any Loan other than a Base Rate Loan, the last day of each Interest Period applicable to such Loan and the Loan Maturity Date; provided, however, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; (b) as to any Base Rate Loan, the last Business Day of each month and the Loan Maturity Date; and (c) with respect to any Swingline Loan, the day that such Loan is required to be repaid.

“ Interest Period ” means, with respect to any Eurodollar Revolving 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 (or if available to all Lenders nine or twelve months thereafter), as the Borrower 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 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;

 

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Keystone Revolving Credit Agreement

(b) any Interest Period 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 thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing; and

(c) no Interest Period shall extend beyond the Revolving Maturity Date.

“ Inventory ” means all “inventory,” as such term is defined in the UCC as in effect on the date hereof in the State of New York, wherever located, in which any Person now or hereafter has rights.

“ Inventory Appraisal ” means (a) on the Closing Date, the audit prepared by Great American Group dated December 2006 and (b) thereafter, the most recent inventory appraisal conducted by an independent appraisal firm and delivered pursuant to Section 2.11 hereof.

“ Inventory Reserves ” means such reserves against Inventory as may be established from time to time by the Administrative Agent, in its Permitted Discretion.

“ Investment ” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

“ IP Rights ” has the meaning specified in Section 5.18.

“ IRS ” means the United States Internal Revenue Service.

“ Issuing Bank ” means, as the context may require, (a) Bank of America, with respect to Letters of Credit issued by it; (b) any other Lender that may become an Issuing Bank pursuant to Sections 2.13(i) and 2.13(k), with respect to Letters of Credit issued by such Lender; (c) with respect to the Existing Letters of Credit, the Lender which issued each such Letter of Credit, or (d) collectively, all of the foregoing.

 

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Keystone Revolving Credit Agreement

“ Joinder Agreement ” means a joinder agreement substantially in the form of Exhibit H or such other form approved by the Administrative Agent.

“ Landlord Lien Reserve ” shall have the meaning assigned to such term in Section 2.16(a)(i).

“ Landlord Lien Waiver and Access Agreement ” means a Landlord Lien Waiver and Access Agreement, substantially in the form of Exhibit I or such other form approved by the Administrative Agent.

“ Laws ” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

“ LC Collateral Account ” means a collateral account in the form of a deposit account established and maintained by the Collateral Agent for the benefit of the Secured Parties, in accordance with the provisions of Section 11.01.

“ LC Commitment ” means the commitment of the Issuing Bank to issue Letters of Credit pursuant to Section 2.13.

“ LC Disbursement ” means a payment or disbursement 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 principal amount of all LC Disbursements that have not yet been reimbursed at such time. The LC Exposure of any Revolving Lender at any time shall mean its Pro Rata Percentage of the aggregate LC Exposure at such time.

“ LC Participation Fee ” shall have the meaning assigned to such term in Section 2.05(c)(i).

“ LC Request ” means a request by the Borrower in accordance with the terms of Section 2.13(b) and substantially in the form of Exhibit L, or such other form as shall be approved by the Issuing Lender.

“ Lender Addendum ” means an instrument, substantially in the form of Exhibit E, by which a Lender becomes a party to this Agreement as of the Closing Date.

 

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Keystone Revolving Credit Agreement

“ Lenders ” means (a) the financial institutions that have become a party hereto on the Closing Date (other than any such financial institution that has ceased to be a party hereto pursuant to an Assignment and Acceptance) and (b) any financial institution that has become a party hereto pursuant to an Assignment and Acceptance. Unless the context clearly indicates otherwise, the term “Lenders” shall include the Swingline Lender.

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

“ Letter of Credit ” means any letters of credit issued or to be issued by an Issuing Bank for the account of the Borrower or any of its Subsidiaries pursuant to Section 2.13, including each Existing Letter of Credit.

“ Letter of Credit Expiration Date ” means the date which is five (5) Business Days prior to the Revolving Maturity Date.

“ Lien ” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, and any financing lease having substantially the same economic effect as any of the foregoing). For the avoidance of doubt, “Lien” shall not be deemed to include any license of IP Rights.

“ Loan Documents ” means this Agreement, each Note, the Fee Letter, the Intercreditor Agreement and the Security Documents.

“ Loan Parties ” means, collectively, the Borrower, Holdings and each other Guarantor.

“ Loans ” means advances made to or at the instructions of the Borrower pursuant to Article II hereof and may constitute Revolving Loans or Swingline Loans.

“ Long-Term Indebtedness ” means any Indebtedness that, in accordance with GAAP, constitutes (or, when incurred, constituted) a long-term liability.

“ Material Adverse Effect ” means (a) a material adverse change in, or a material adverse effect upon, the business, properties or financial condition of the Loan Parties taken as a whole; (b) a material impairment of the rights of or benefits or remedies taken as a whole (including value of Collateral and perfection and priority of Liens in favor of the Collateral Agent (for its benefit and the benefit of the other Secured Parties)) available to the Lenders or the

 

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Keystone Revolving Credit Agreement

Administrative Agent under the Loan Documents or the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability of the Loan Documents.

“ Maximum Rate ” has the meaning specified in Section 11.10.

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

“ Mortgage ” means a mortgage, deed of trust, assignment of leases and rents, leasehold mortgage or other security document granting a Lien on any Mortgaged Property to secure the Secured Obligations. Each Mortgage must be reasonably satisfactory in form and substance to the Administrative Agent.

“ Mortgaged Property ” means each parcel of real property and improvements thereto owned by a Loan Party that is either (i) identified as a Mortgaged Property on Schedule 5.08 or (ii) subject to a Transaction Lien granted after the Closing Date pursuant to Section 6.12 or 6.13.

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

“ Net Cash Proceeds ” means with respect to any Disposition, the excess, if any, of (i) the sum of cash and cash equivalents received in connection with such Disposition (including any cash received by way of deferred payment pursuant to, or by monetization of or other cash realization upon, a note receivable or other non-cash consideration, but only as and when so received) over (ii) the sum of (A) the principal, interest, premiums, penalties and other amounts due under any Indebtedness that is secured by such asset and that is required to be repaid in connection with such event (other than Indebtedness under the Loan Documents), (B) the out-of-pocket expenses incurred by the Borrower or any Subsidiary in connection with any Disposition, (C) taxes reasonably estimated to be actually payable with respect to the taxable year in which such Disposition occurred as a result of any gain recognized in connection therewith and (D) amounts reasonably expected to be payable prior to the Revolving Maturity Date pursuant to customary escrow arrangements, purchase price adjustments or indemnification agreements in connection with any Asset Sale (as estimated in good faith by a Responsible Officer of the applicable Loan Party and set forth in a certificate delivered to the Administrative Agent prior to the consummation of such Disposition).

“ Net Recovery Cost Percentage ” means the fraction, expressed as a percentage, (a) the numerator of which is the amount equal to the blended

 

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Keystone Revolving Credit Agreement

recovery on the aggregate amount of the Eligible Inventory at such time on a “net orderly liquidation value” basis as set forth in the most recent Inventory Appraisal received by Collateral Agent in accordance with Section 6.17, net of operating expenses, liquidation expenses and commissions reasonably anticipated in the disposition of such assets, and (b) the denominator of which is the original Cost of the aggregate amount of the Eligible Inventory subject to appraisal.

“ Non-Consenting Lender ” has the meaning specified in Section 11.16(a)(iii).

“ Non-Core Disposition ” means any Disposition of non-core assets (including real estate) acquired pursuant to a Permitted Acquisition.

“ Note ” means a promissory note made by the Borrower in favor of a Lender evidencing Loans made by such Lender, substantially in the form of Exhibit A.

“ Obligations ” means (i) all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan and (ii) all obligations of any Loan Party arising under any Swap Contracts to which a Lender, the Administrative Agent or any of their respective Affiliates is a party, in each case whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

“ Off-Balance Sheet Liabilities ” means, with respect to any Person as of any date of determination thereof, without duplication and to the extent not included as a liability on the consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP: (a) with respect to any asset securitization transaction (including any accounts receivable purchase facility) (i) the unrecovered investment of purchasers or transferees of assets so transferred, and (ii) any other payment, recourse, repurchase, hold harmless, indemnity or similar obligation of such Person or any of its Subsidiaries in respect of assets transferred or payments made in respect thereof, other than limited recourse provisions that are customary for transactions of such type and that neither (x) have the effect of limiting the loss or credit risk of such purchasers or transferees with respect to payment or performance by the obligors of the assets so transferred nor (y) impair the characterization of the transaction as a true sale under applicable Laws (including Debtor Relief Laws); (b) the monetary obligations under any financing lease or so-called “synthetic,” tax retention or off-balance sheet lease transaction which, upon the application of any Debtor Relief Law to such Person or any of its

 

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Subsidiaries, would be characterized as indebtedness; or (c) the monetary obligations under any sale and leaseback transaction which does not create a liability on the consolidated balance sheet of such Person and its Subsidiaries.

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

“ Other Liabilities ” means outstanding liabilities with respect to or arising from (a) any Cash Management Agreements and/or (b) any Bank Product Agreements.

“ Other Taxes ” has the meaning specified in Section 3.01(b).

“ Outstanding Amount ” means with respect to Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Loans occurring on such date.

“ ownership interests ” has the meaning specified in Section 4.01(e).

“ Participant ” has the meaning specified in Section 11.07(d).

“ Payment Conditions ” means, at the time of determination with respect to any specified transaction or payment, that (i) no Specified Default then exists or would arise as a result of entering into such transaction or the making of such payment and (ii) the Borrower has demonstrated to the reasonable satisfaction of the Administrative Agent that, on a pro-forma basis for the 12 months following and after giving effect to such transaction or payment, (A) average monthly Excess Availability for such period is expected to be not less than 30% of the Borrowing Base and (B) the Consolidated Fixed Charge Coverage Ratio (determined for the then most recent Test Period that would exist at the end of such 12 month period) is not less than 1.1:1.0.

“ PBGC ” means the Pension Benefit Guaranty Corporation.

“ Pension Plan ” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower or

 

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any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years.

“ Perfection Certificate ” means a certificate in the form of Exhibit E to the Security Agreement or any other form approved by the Administrative Agent.

“ Permitted Acquisition ” means the purchase or other acquisition of capital stock or other securities of another Person or of assets of another Person that constitute a business unit; provided that (i) prior to and after giving effect to such purchase or acquisition, no Default with respect to any obligation described in Section 8.01(a) or any covenant or agreement described in Section 8.01(b), and no Event of Default under any other clause of Section 8.01, in each case calculated on a pro-forma basis in accordance with Section 7.15(b) after giving effect to such purchase or other acquisition, shall have occurred and be continuing and (ii) the Borrower shall have delivered to the Administrative Agent at least five Business Days prior to the date of proposed consummation of such purchase or other acquisition, a Permitted Acquisition Certificate.

“ Permitted Acquisition Certificate ” means, with respect to any Permitted Acquisition, a certificate of a Responsible Officer certifying compliance with the conditions set forth in clause (i) of the definition thereof with respect to such Permitted Acquisition, and setting forth (i) a calculation in reasonable detail of compliance with any applicable basket amounts in Section 7.02(f), (ii) at the Borrower’s option, any one-time payments contemplated to be made at the time of the consummation of such Permitted Acquisition, and (iii) at the Borrower’s option, synergies or cost reductions as reasonably estimated by the Borrower in good faith and on the basis of reasonable assumptions to be realized within 12 months of the date of consummation of such Permitted Acquisition.

“ Permitted Discretion ” means the Administrative Agent’s or the Collateral Agent’s reasonable judgment exercised in good faith based upon (i) its consideration of any factor which the Administrative Agent or Collateral Agent believes in good faith: (a) will or could adversely affect the value of any Collateral, the enforceability or priority of the Collateral Agent’s Liens thereon or the amount which the Collateral Agent and the Lenders would be likely to receive (after giving consideration to delays in payment, costs of enforcement and claims that the Administrative Agent determines in its reasonable judgment will need to be satisfied in connection with the realization upon any Collateral) in the liquidation of such Collateral; (b) suggests that any collateral report or financial information delivered to the Agents, by or on behalf of, the Borrower is incomplete, inaccurate or misleading in any material respect; or (c) materially increases the likelihood of a bankruptcy, reorganization or other insolvency proceeding involving the Borrower or any of its Subsidiaries or any of the

 

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Collateral; and (ii) its consideration of the Loan Parties’ obligations with respect to Bank Product Agreements and Cash Management Agreements. The parties agree that there is a rebuttable presumption that the Agents have acted in good faith in their determination of Permitted Discretion.

“ Permitted Investments ” means investments in:

(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), in each case maturing within one year from the date of acquisition thereof;

(b) marketable direct obligations issued by any State or any political subdivision or public instrumentality thereof, in each case maturing within one year from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;

(c) commercial paper maturing within 360 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;

(d) certificates of deposit, banker’s acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States or any State thereof, or any United States branch of a bank that is organized under the laws of another jurisdiction, in each case which has a combined capital and surplus and undivided profits of at least $500,000,000;

(e) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (d) above;

(f) money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $500,000,000; and

(g) mutual funds that invest substantially all of their assets in securities of the types described in clauses (a) through (f) above.

“ Permitted Refinancing ” has the meaning set forth in Section 7.03(q).

 

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

“ Plan ” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by the Borrower.

“ Pre-Commitment Information ” means all information (including financial projections) that was provided to the Arrangers or any of the Lenders by the Sponsor, Holdings, the Borrower, the Subsidiaries or any of their respective representatives (or on their behalf) prior to the date of the Commitment Letter in connection with any aspect of the Transaction.

“ Preferred Stock ” means, with respect to any Person, any and all preferred or preference Equity Interests (however designated) of such Person whether now outstanding or issued after the Closing Date.

“ Pro Rata Percentage ” of any Revolving Lender at any time means the percentage of the total Revolving Commitment represented by such Lender’s Revolving Commitment.

“ Pro Rata Share ” means with respect to each Lender at any time, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of the Exposure of such Lender at such time and the denominator of which is the amount of the Exposures at such time. The initial Pro Rata Shares of each Lender are set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

“ Receivables Reserves ” means such reserves as may be established with respect to Accounts from time to time by the Administrative Agent, in its Permitted Discretion.

“ Refinancing ” means the repayment of the Indebtedness of the Borrower and its Subsidiaries listed on Schedule 1.01A.

“ Register ” has the meaning specified in Section 11.07(c).

“ Replacement Lender ” has the meaning specified in Section 11.16(b)(ii).

“ Reportable Event ” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.

“ Required Lenders ” means, at any time, Lenders having Revolving Commitments aggregating more than 50% of the aggregate Revolving Commitments, or if the Revolving Commitments have been terminated, Lenders

 

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whose percentage of Revolving Exposure represents at least a majority of the sum of all Revolving Exposure; provided that Revolving Exposures or Revolving Commitments held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

“ Reserves ” means all (if any) Receivables Reserves, Inventory Reserves and Availability Reserves.

“ Responsible Officer ” means, with respect to any Person, the chief executive officer, president or chief financial officer of such Person and, solely for purposes of completing and signing any notice or certificate described in Sections 2.02(a), 4.01(a)(iv) or 4.01(a)(ix), the treasurer, director of financial planning or controller of such Person. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

“ Restricted Payment ” means (i) any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interest in Holdings, the Borrower 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, cancellation or termination of any such Equity Interest, (ii) any voluntary or optional payment of principal in respect of Indebtedness (other than (A) any such prepayment of Indebtedness under the Loan Documents and (B) any such prepayment in connection with a refinancing or replacement of such Indebtedness otherwise permitted hereunder) or (iii) so long as any Event of Default exists or would result therefrom, any mandatory payment of principal, or offer of payment, in respect of Indebtedness subordinated in right of payment to the Obligations.

“ Retail Facilities Disposition ” means a Disposition of the retail operations of the Borrower and its Subsidiaries.

“ Retail Facilities Proceeds Account ” means the account established pursuant to the Security Agreement and designated as the “Retail Facilities Proceeds Account.”

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

“ Revolving Borrowing ” means a Borrowing comprised of Revolving Loans.

 

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Keystone Revolving Credit Agreement

“ Revolving Commitment ” means, with respect to each Lender, the commitment, if any, of such Lender to make Revolving Loans hereunder up to the amount set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender assumed its Revolving Commitment, as applicable, as the same may be (a) reduced from time to time pursuant to Section 2.07 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 11.07. The aggregate amount of the Lenders’ Revolving Commitments on the Closing Date is $125.0 million. The aggregate amount of the Lenders’ Revolving Commitments may be increased as set forth in Section 2.15.

“ Revolving Exposure ” means, with respect to any Lender at any time, the aggregate principal amount at such time of all outstanding Revolving Loans of such Lender, plus the aggregate amount at such time of such Lender’s LC Exposure, plus the aggregate amount at such of such Lender’s Swingline Exposure.

“ Revolving Lender ” means a Lender with a Revolving Commitment.

“ Revolving Loans ” means a Loan made by the Lenders to the Borrower pursuant to Section 2.01(a).

“ Revolving Maturity Date ” means January 12, 2012.

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

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

“ Secured Obligations ” has the meaning specified in Section 1 of the Security Agreement.

“ Secured Parties ” has the meaning specified in Section 1 of the Security Agreement.

“ Security Agreement ” means the Guarantee and Security Agreement among the Loan Parties and the Administrative Agent, substantially in the form of Exhibit M.

“ Security Documents ” means the Security Agreement, the Intercreditor Agreement, the Mortgages and each other security agreement, instrument or document executed and delivered pursuant to Section 6.12 or 6.13 to secure any of the Secured Obligations.

 

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Keystone Revolving Credit Agreement

“ Seller Note ” means, collectively, each of the promissory notes dated December 23, 2005 between Holdings and the holder thereof.

“ Senior Subordinated Notes ” means senior subordinated unsecured notes of the Borrower issued on October 30, 2003 in an aggregate principal amount of up to $175,000,000.

A Person is “ Solvent ” if (a) the fair value of the assets of such Person, at a fair valuation, exceed its debts and liabilities, subordinated, contingent or otherwise; (b) the present fair saleable value of the property of such Person exceed 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; (c) such Person is able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (d) such Person does not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and proposed to be conducted.

“ Special Agent Advance ” shall have the meaning assigned to such term in Section 9.13.

“ Specified Default ” means the occurrence of any Event of Default specified in Article 8, clauses (a), (b) (but only with respect to Section 6.10(a), 6.11, 6.16 or 7.14), (c) (but only with respect to Section 2.04(f) or 6.07) or (d) (but only with respect to any representation made or deemed to be made by or on behalf of any Loan Party in any Borrowing Base Certificate or any certificate of a Financial Officer accompanying any financial statement).

“ Specified Transaction ” means (a) any disposition of all or substantially all the assets of or all the Equity Interests of any Subsidiary or of any division or product line of a Borrower or any of its Subsidiaries, (b) any Permitted Acquisition, (c) any proposed incurrence of Indebtedness or (d) the proposed making of a dividend permitted hereunder.

“ Sponsor ” means (i) Bain Capital, LLC and (ii) any fund that is managed or administered by Bain Capital, LLC or one of its Affiliates.

“ Subordinated Debt Documents ” means the indenture under which the Senior Subordinated Notes are issued and all other instruments, agreements and other documents evidencing or governing the Senior Subordinated Notes or providing for any Guarantee or other right in respect thereof.

“ Subsidiary ” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests

 

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Keystone Revolving Credit Agreement

having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

“ Swap Contract ” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

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

“ Swingline Commitment ” means the commitment of the Swingline Lender to make loans pursuant to Section 2.12, as the same may be reduced from time to time pursuant to Section 2.07 or Section 2.12.

“ Swingline Exposure ” means at any time the aggregate principal amount at such time of all outstanding Swingline Loans. The Swingline Exposure of any Revolving Lender at any time shall equal its Pro Rata Percentage of the aggregate Swingline Exposure at such time.

“ Swingline Lender ” means Bank of America.

“ Swingline Loan ” means any Loan made by the Swingline Lender pursuant to Section 2.12.

“ Syndication Agent ” means a financial institution, in its capacity as syndication agent under any of the Loan Documents, appointed by Bank of

 

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America after reasonable consultation with the Borrower or any successor syndication agent.

“ Synthetic Lease Obligation ” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

“ Taxes ” has the meaning specified in Section 3.01(a).

“ Term Loan Facility ” means the Term Credit Agreement dated as of January 12, 2007 between Holdings, the Borrower and Bank of America, as Administrative Agent, Syndication Agent, Collateral Agent and Documentation Agent as amended from time to time, provided that the aggregate principal amount of all financing thereunder does not exceed $225,000,000.

“ Term Loan Facility Agent ” means the Administrative Agent, the Collateral Agent, the Documentation Agent and the Syndication Agent, each as defined in the Term Loan Facility.

“ Terminated Lender ” has the meaning specified in Section 11.16(a).

“ Test Period ” shall have the meaning assigned to such term in Section 7.14

“ Threshold Amount ” means $10,000,000.

“ Transaction ” means, collectively, (i) the entering into of this Agreement and the funding of the Loans, (ii) the entering into of the Term Loan Facility and the funding of loans in connection therewith, (iii) the Refinancing and (iv) all transactions related hereto or thereto.

“ Transaction Liens ” means the Liens on Collateral granted by the Loan Parties under the Security Documents.

“ 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 Eurodollar Rate or the Base Rate.

“ UCC ” has the meaning specified in Section 1 of the Security Agreement.

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

 

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“ Voting Securities ” means, with respect to any Person, Equity Interests of such Person entitled to vote for members of the board of directors or equivalent governing body of such Person.

“ Wholly Owned Subsidiary ” means, as to any Person, (a) any corporation 100% of whose Equity Interests (other than directors’ qualifying shares or nominal shares required to be held by someone other than such Person under Applicable Law) is at the time owned by such Person and/or one or more Wholly Owned Subsidiaries of such Person and (b) any partnership, association, joint venture, limited liability company or other entity in which such Person and/or one or more Wholly Owned Subsidiaries of such Person have a 100% equity interest at such time.

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

(a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

(b) (i) The words “herein,” “hereto,” “hereof” and “hereunder” and words of similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision thereof.

(ii) Article, Section, Exhibit and Schedule references are to the Loan Document in which such reference appears.

(iii) The term “including” is by way of example and not limitation.

(iv) The term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.

(c) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

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

Section 1.03 . Accounting Terms. (a) All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all

 

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financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.

(b) If at any time any change in GAAP or in the application thereof would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change (subject to the approval of the Required Lenders); provided that, until so amended, such ratio or requirement shall continue to be computed in accordance with GAAP as applied prior to such change.

(c) Notwithstanding anything to the contrary contained herein, financial ratios and other financial calculations pursuant to this Agreement shall, following any Specified Transaction, be calculated on a Pro Forma Basis with Pro Forma Adjustments in accordance with Section 7.15. In addition, the financial ratios and related definitions set forth in the Loan Documents shall be computed to exclude (i) the effect of purchase accounting adjustments, including the effect of any non-cash items resulting from any amortization, write-up, write-down or write-off of assets (including intangible assets, goodwill and deferred financing costs in connection with any Permitted Acquisition or any merger, consolidation or similar transaction not prohibited by this Agreement), (ii) the application of FAS 133, FAS 150 or FAS 123r (to the extent that the pronouncements in FAS 123r result in recording an equity award as a liability on the consolidated balance sheet of Holdings and its Subsidiaries in the circumstance where, but for the application of the pronouncements, such award would have been classified as equity), (iii) any mark-to-market adjustments to any derivatives (including embedded derivatives contained in other debt or equity instruments under FAS 133), (iv) any non-cash compensation charges resulting from the application of FAS 123r and (v) the application of FAS 146.

Section 1.04 . Rounding. Any financial ratios required to be maintained pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

Section 1.05 . References to Agreements and Laws. Unless otherwise expressly provided herein, (a) references to Organization Documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions,

 

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supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document; and (b) references to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law.

Section 1.06 . Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

Section 1.07. Letter of Credit Amounts . Unless otherwise specified, all references herein to the amount of a Letter of Credit at any time shall be deemed to mean the maximum face amount of such Letter of Credit (including any amendments thereto) after giving effect to all increases thereof contemplated by such Letter of Credit, whether or not such maximum face amount is in effect at such time.

ARTICLE 2

T HE C REDITS

Section 2.01. Commitments and Borrowing Base Determination .

(a) Subject to the terms and conditions and relying upon the representations and warranties herein set forth, each Lender agrees, severally and not jointly, to make Revolving Loans to the Borrower, at any time and from time to time after the Closing Date until the earlier of one Business Day prior to the Revolving Maturity Date and the termination of the Commitment of such Lender in accordance with the terms hereof, in an aggregate principal amount at any time outstanding that will not result in such Lender’s Revolving Exposure exceeding the lesser of (A) such Lender’s Revolving Commitment, and (B) such Lender’s Pro Rata Percentage multiplied by the Borrowing Base then in effect. Within the limits set forth above and subject to the terms, conditions and limitations set forth herein, the Borrower may borrow, pay or prepay and reborrow Revolving Loans.

(b) The Administrative Agent shall (i) promptly notify the Borrower in writing (including via e-mail) whenever it determines that the Borrowing Base set forth on a Borrowing Base Certificate differs from the Borrowing Base, (ii) discuss the basis for any such deviation and any changes proposed by the Borrower, including the reasons for any impositions of or changes in Reserves or any change in advance rates with respect to Eligible Accounts (in the Administrative Agent’s Permitted Discretion and subject to Section 2.14(a)) or eligibility criteria, with the Borrower, (iii) consider, in the exercise of its Permitted Discretion, any additional factual information provided by the Borrower relating to the determination of the Borrowing Base and (iv) promptly

 

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notify the Borrower of its decision with respect to any changes proposed by the Borrower. Pending a decision by the Administrative Agent to make any requested change, the initial determination of the Borrowing Base by the Administrative Agent shall continue to constitute the Borrowing Base.

Section 2.02. Loans .

(a) Each Loan (other than Swingline Loans) shall be made as part of a Borrowing consisting of Loans made by the Lenders ratably in accordance with their applicable Commitments; provided that the failure of any Lender to make any Loan shall not in itself relieve any other Lender of its obligation to lend hereunder (it being understood, however, that no Lender shall be responsible for the failure of any other Lender to make any Loan required to be made by such other Lender). Except for Loans deemed made pursuant to Section 2.02(f), Loans (other than Swingline Loans) comprising any Borrowing shall be in an aggregate principal amount that is (i) (A) in the case of Base Rate Revolving Loans, not less than $500,000 and (B) in the case of Eurodollar Revolving Loans, an integral multiple of $250,000 and not less than $1.0 million, or (ii) equal to the remaining available balance of the applicable Revolving Commitments.

(b) Subject to Section 3.02, each Borrowing shall be comprised entirely of Base Rate Revolving Loans or Eurodollar Revolving Loans as the Borrower may request pursuant to Section 2.03. Each Lender may at its option make any Eurodollar Revolving 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 Borrower to repay such Loan in accordance with the terms of this Agreement or cause the Borrower to pay additional amounts pursuant to Section 3.01. Borrowings of more than one Type may be outstanding at the same time; provided further that the Borrower shall not be entitled to request any Borrowing that, if made, would result in more than six Eurodollar Revolving Borrowings outstanding hereunder at any one time. For purposes of the foregoing, Borrowings having different Interest Periods, regardless of whether they commence on the same date, shall be considered separate Borrowings.

(c) Except with respect to Loans made pursuant to Section 2.02(f), each Lender shall make each Loan (other than Swingline Loans) to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds to such account in New York City as the Administrative Agent may designate not later than 3:00 p.m., New York City time, and the Administrative Agent shall promptly credit the amounts so received to an account as directed by the Borrower in the applicable Borrowing Request maintained with the Administrative Agent or, if a Borrowing shall not occur on such date because any condition precedent herein specified shall not have been met or waived, return the amounts so received to the respective Lenders.

 

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(d) Unless the Administrative Agent shall have received notice from a Lender prior to the date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s portion of such Borrowing, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on the date of such Borrowing in accordance with paragraph (c) above, and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If the Administrative Agent shall have so made funds available then, to the extent that such Lender shall not have made such portion available to the Administrative Agent, such Lender and the Borrower severally agree to repay to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent at (i) in the case of the Borrower, the interest rate applicable at the time to the Loans comprising such Borrowing and (ii) in the case of such Lender, a rate determined by the Administrative Agent to represent its cost of overnight or short-term funds (which determination shall be conclusive absent manifest error). If such Lender shall repay to the Administrative Agent such corresponding amount, such amount shall constitute such Lender’s Loan as part of such Borrowing for purposes of this Agreement.

(e) Notwithstanding any other provision of this Agreement, the Borrower 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 Revolving Maturity Date.

(f) If the Issuing Bank shall not have received from the Borrower the payment required to be made by Section 2.13(e) within the time specified in such Section, the Issuing Bank will promptly notify the Administrative Agent of the LC Disbursement and the Administrative Agent will promptly notify each Revolving Lender of such LC Disbursement and its Pro Rata Percentage thereof. Each Revolving Lender shall pay by wire transfer of immediately available funds to the Administrative Agent on such date (or, if such Revolving Lender shall have received such notice later than 12:00 (noon), New York City time, on any day, not later than 11:00 a.m., New York City time, on the immediately following Business Day), an amount equal to such Lender’s Pro Rata Percentage of such LC Disbursement (it being understood that such amount shall be deemed to constitute a Base Rate Revolving Loan of such Lender, and such payment shall be deemed to have reduced the LC Exposure), and the Administrative Agent will promptly pay to the Issuing Bank amounts so received by it from the Revolving Lenders. The Administrative Agent will promptly pay to the Issuing Bank any amounts received by it from the Borrower pursuant to Section 2.13(e) prior to the time that any Revolving Lender makes any payment pursuant to this paragraph (f); any such amounts received by the Administrative Agent thereafter will be promptly remitted by the Administrative Agent to the Revolving Lenders that shall have

 

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made such payments and to the Issuing Bank, as their interests may appear. If any Revolving Lender shall not have made its Pro Rata Percentage of such LC Disbursement available to the Administrative Agent as provided above, such Lender and the Borrower severally agree to pay interest on such amount, for each day from and including the date such amount is required to be paid in accordance with this paragraph (f) to but excluding the date such amount is paid, to the Administrative Agent for the account of the Issuing Bank at (i) in the case of the Borrower, a rate per annum equal to the interest rate applicable to Revolving Loans pursuant to Section 2.06(a), and (ii) in the case of such Lender, for the first such day, the Federal Funds Rate, and for each day thereafter, the Base Rate.

Section 2.03 . Borrowing Procedure. To request a Revolving Borrowing, the Borrower shall notify the Administrative Agent of such request by telecopy or electronic transmission (if arrangements for doing so have been approved by the Administrative Agent, which approval shall not be unreasonably withheld, conditioned or delayed) or telephone (promptly confirmed by telecopy) (i) in the case of a Eurodollar Revolving Borrowing, not later than 1:00 p.m., New York City time, three Business Days before the date of the proposed Borrowing or (ii) in the case of a Base Rate Revolving Borrowing (other than Swingline Loans), not later than 1:00 p.m., New York City time, on the Business Day of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable, subject to Sections 2.09, 3.02 and 3.03, and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by the Borrower. Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02:

(a) the aggregate amount of such Borrowing;

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

(c) whether such Borrowing is to be a Base Rate Revolving Borrowing or a Eurodollar Revolving Borrowing;

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

(e) the location and number of the account to which funds are to be disbursed, which shall comply with the requirements of Section 2.02; and

(f) that the conditions set forth in Section 4.02(b) and (c) are satisfied or waived as of the date of the notice.

If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be a Base Rate Revolving Borrowing. If no Interest Period is

 

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specified with respect to any requested Eurodollar Revolving Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration (subject to the proviso in clause (d) above). Promptly following receipt of a Borrowing Request in accordance with this Section 2.03, 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.

Section 2.04. Evidence of Debt; Repayment of Loans .

(a) The Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of each Revolving Lender, the then unpaid principal amount of each Revolving Loan of such Lender on the Revolving Maturity Date and (ii) to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the Revolving Maturity Date.

(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement. The Borrower shall be entitled to review records of such accounts with prior reasonable notice during normal business hours.

(c) The Administrative Agent shall maintain accounts in which it will record (i) the amount of each Loan made hereunder, the Type and Class 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 Borrower 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. Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender. The Borrower shall be entitled to review records of such accounts with prior reasonable notice during normal business hours.

(d) The entries made in the accounts maintained pursuant to paragraphs (b) and (c) above shall be prima facie evidence of the existence and amounts of the obligations therein recorded absent manifest error; 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 obligations of the Borrower to repay the Loans in accordance with their terms.

(e) Any Lender may request that Loans of any Class made by it be evidenced by a promissory note. In such event, the Borrower shall promptly 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) substantially in the form of Exhibit A. Thereafter, the Loans

 

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evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 11.07) 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 permitted assigns).

(f) All funds held by the Borrower or any other Loan Party (other than petty cash accounts funded in the ordinary course of business, the deposits in which shall not aggregate more than $2,000,000 or exceed $100,000 with respect to any one account (or in each case, such greater amounts to which the Administrative Agent may agree), and payroll, trust and tax withholding accounts funded in the ordinary course of business and required by Applicable Law) shall be deposited in one or more bank or investment accounts, subject to account control agreements in form and substance reasonably satisfactory to Collateral Agent, and, following the occurrence and during the continuance of a Specified Default or if, for five consecutive Business Days, the Excess Availability Requirements are not met (each, a “ Cash Dominion Event ”), shall be applied on a daily basis to the repayment of the Swingline Loans and, thereafter, to any Revolving Loans which become due, without a reduction in the Aggregate Commitments until (i) such Specified Default is cured or waived and/or (ii) Excess Availability has exceeded the Excess Availability Requirements for 30 consecutive days; provided, that a Cash Dominion Event may not be so cured on more than two (2) occasions in any period of 365 consecutive days.

Section 2.05. Fees .

(a) Commitment Fee . The Borrower agrees to pay to the Administrative Agent for the account of each Lender (except as otherwise provided in Section 2.11(a)) a commitment fee (a “ Commitment Fee ”), equal to the Applicable Fee per annum on the average daily unused amount of each Commitment of such Lender during the period from and including the Closing Date to but excluding the date on which such Commitment terminates. Accrued Commitment Fees shall be payable monthly in arrears in the case of Commitment Fees in respect of the Revolving Commitments and on the date on which the Revolving Commitments terminate; provided, however , the amount earned, due and payable on the first such date shall be pro-rated for the number of days from the Closing Date to and including the first payment date. 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 (including the first day but excluding the last day). For purposes of computing Commitment Fees with respect to Revolving Commitments, a Revolving Commitment of a Lender shall be deemed to be used to the extent of the outstanding Revolving Loans and LC Exposure of such Lender (and the Swingline Exposure of such Lender shall be disregarded for such purpose).

 

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(b) Administrative Agent Fees . The Borrower agrees to pay to the Administrative Agent, for its own account, the fees set forth in the Fee Letter or such other fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent (the “ Administrative Agent Fees ”).

(c) LC and Fronting Fees . The Borrower agrees to pay (i) to the Administrative Agent for the account of each Revolving Lender a participation fee (“ LC Participation Fee ”) with respect to its participations in Letters of Credit, which shall accrue at a rate equal to the Applicable Margin from time to time used to determine the interest rate on Eurodollar Revolving Loans pursuant to Section 2.06, as described on Annex I attached hereto, on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Closing Date to but excluding the later of the date on which such Lender’s Revolving Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee (“ 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 Closing 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 and reasonable fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder as agreed among the Borrower and the Issuing Lender from time to time. LC Participation Fees and Fronting Fees accrued through and including the last day of March, June, September and December of each year shall be payable on the third Business Day following such last day, commencing on the first such date to occur after the Closing 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 Revolving Commitments terminate shall be payable on demand (including documentation reasonably supporting such request). Any other fees payable to the Issuing Bank pursuant to this paragraph shall be payable within 10 days after written demand (together with backup documentation supporting such reimbursement request). All LC 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 (including the first day but excluding the last day).

(d) All Fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent for distribution, if and as appropriate, among the Lenders (other than Defaulting Lenders), except that the Fronting Fees shall be paid directly to the Issuing Bank. Once paid, none of the Fees shall be refundable under any circumstances.

 

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Section 2.06. Interest on Loans .

(a) Subject to the provisions of Section 2.06(c), the Loans comprising each Base Rate Revolving Borrowing, including each Swingline Loan, shall bear interest at a rate per annum equal to the Base Rate plus the Applicable Margin in effect from time to time.

(b) Subject to the provisions of Section 2.06(c), the Loans comprising each Eurodollar Revolving Borrowing shall bear interest at a rate per annum equal to the Eurodollar Rate for the Interest Period in effect for such Borrowing plus the Applicable Margin in effect from time to time.

(c) Notwithstanding the foregoing, effective upon written notice from the Administrative Agent (at the direction of the Required Lenders) while any Event of Default exists under Section 8.01(a), (f) or (g), (a) all Obligations shall bear interest, after as well as before judgment, at a per annum rate equal to (i) in the case of principal of any Loan, 2% in excess of the rate in effect from time to time, (ii) in the case of LC Participating Fees, 2% plus the otherwise applicable rate thereof, or (iii) in the case of any other amount, 2% plus the rate in effect from time to time applicable to Base Rate Revolving Loans as provided in paragraph (a) of this Section 2.06.

(d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and, in the case of Revolving Loans, upon termination of the Revolving Commitments; provided that (i) interest accrued pursuant to paragraph (c) of this Section 2.06 shall be payable on demand and, absent demand, on each Interest Payment Date and upon termination of the Revolving Commitments, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of a Base Rate Revolving Loan prior to the end of the Revolving Availability Period), accrued 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 Revolving 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.

(e) All interest hereunder shall be computed on the basis of a year of 365/366 days, except that interest computed by reference to the Eurodollar Rate and all Fees shall be computed on the basis of a year of 360 days, 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 Base Rate or Eurodollar Rate shall be determined by the Administrative Agent in accordance with the provisions of this Agreement and such determination shall be conclusive absent manifest error.

 

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Section 2.07. Termination and Reduction of Commitments .

(a) The Revolving Commitments, the Swingline Commitment, and the LC Commitment shall automatically terminate on the Revolving Maturity Date.

(b) The Borrower may at any time terminate, or from time to time reduce, the Revolving Commitments; provided that (i) any such reduction shall be in an amount that is an integral multiple of $1.0 million and (ii) the Revolving Commitments shall not be terminated or reduced if, after giving effect to any concurrent prepayment of the Revolving Loans in accordance with Section 2.09, the Aggregate Exposures would exceed the Aggregate Commitments.

(c) The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Aggregate Commitments under paragraph (b) of this Section 2.07 at least two Business Days prior to the effective date of such termination or reduction, 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 pursuant to this Section 2.07 shall be irrevocable except that, to the extent delivered in connection with a refinancing of the Obligations, such notice shall not be irrevocable until such refinancing is closed and funded. Any effectuated termination or reduction of the Aggregate Commitments shall be permanent. Each reduction of the Aggregate Commitments shall be made ratably among the Lenders in accordance with their respective Revolving Commitments.

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 Revolving Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Revolving Borrowing, may elect Interest Periods therefor, all as provided in this Section 2.08. The Borrower 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. Notwithstanding anything to the contrary, the Borrower shall not be entitled to request any conversion or continuation that, if made, would result in more than six Eurodollar Revolving Borrowings outstanding hereunder at any one time. This Section 2.08 shall not apply to Swingline Borrowings, which may not be converted or continued.

(b) To make an election pursuant to this Section 2.08, the Borrower shall notify the Administrative Agent of such election by telephone or electronic transmission (if arrangements for doing so have been approved by the Administrative Agent, which approval shall not be unreasonably withheld,

 

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delayed or conditioned) by the time that a Borrowing Request would be required under Section 2.03 if the Borrower was requesting a Revolving Borrowing of the Type resulting from such election to be made on the effective date of such election, subject to Section 3.03. Each such telephonic Interest Election Request shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request substantially in the form of Exhibit B, unless otherwise agreed to by the Administrative Agent and the Borrower.

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

(i) 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 clauses (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 a Base Rate Revolving Borrowing or a Eurodollar Revolving Borrowing; and

(iv) if the resulting Borrowing is a Eurodollar Revolving 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 Revolving Borrowing but does not specify an Interest Period, then the Borrower 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 an Interest Election Request with respect to a Eurodollar Revolving Borrowing is not timely delivered 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 a Base Rate Revolving 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, then, after the occurrence and during the continuance of such Event of Default (i) no outstanding Borrowing may be converted to or continued as a Eurodollar

 

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Revolving Borrowing and (ii) unless repaid, each Eurodollar Revolving Borrowing shall be converted to a Base Rate Revolving Borrowing at the end of the Interest Period applicable thereto.

Section 2.09. Optional and Mandatory Prepayments of Loans .

(a) Optional Prepayments . The Borrower shall have the right at any time and from time to time to prepay, without premium or penalty, any Borrowing, in whole or in part, subject to the requirements of this Section 2.09; provided that each partial prepayment shall be in an amount that is an integral multiple of $100,000.

(b) Revolving Loan Prepayments .

(i) In the event of the termination of all the Revolving Commitments, the Borrower shall, on the date of such termination, repay or prepay all the outstanding Revolving Borrowings and all outstanding Swingline Loans and replace all outstanding Letters of Credit and/or deposit an amount equal to the LC Exposure in the LC Collateral Account.

(ii) In the event of any partial reduction of the Revolving Commitments, then (A) at or prior to the effective date of such reduction, the Administrative Agent shall notify the Borrower and the Revolving Lenders of the Aggregate Exposures after giving effect thereto and (B) if the Aggregate Exposures would exceed the lesser of (x) the Aggregate Commitments and (y) the Borrowing Base then in effect, after giving effect to such reduction, then the Borrower shall, on the date of such reduction (or, if such reduction is due to the imposition of a new Reserve or a change in the methodology of calculating an existing Reserve, within six Business Days following such notice), first , repay or prepay all Swingline Loans, second , repay or prepay Revolving Borrowings and third , replace or cash collateralize outstanding Letters of Credit in accordance with the procedures set forth in Section 2.13(j), in an amount sufficient to eliminate such excess.

(iii) In the event that the Aggregate Exposures at any time exceeds the lesser of (i) the Aggregate Commitments or (ii) the Borrowing Base then in effect, the Borrower shall, immediately after demand (or, if such overadvance is due to the imposition of a new Reserve or a change in the methodology of calculating an existing Reserve, or change in eligibility standards, within six Business Days following notice), apply an amount equal to such excess to prepay the Loans and any interest accrued thereon, in accordance with this Section 2.09(b)(iii). The Borrower shall, first , repay or prepay all Swingline Loans, second , repay or prepay Revolving Borrowings, and third , replace or cash collateralize outstanding

 

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Letters of Credit in accordance with the procedures set forth in Section 2.13(j), in an amount sufficient to eliminate such excess.

(iv) In the event that the aggregate LC Exposure exceeds the LC Commitment then in effect, the Borrower shall, without notice or demand, immediately replace or cash collateralize outstanding Letters of Credit in accordance with the procedures set forth in Section 2.13(j), in an amount sufficient to eliminate such excess.

(c) Application of Prepayments .

(i) Prior to any optional or mandatory prepayment of Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid and shall specify such selection in the notice of such prepayment pursuant to paragraph (i) of this Section 2.09(c). Unless a Cash Dominion Event then exists and is continuing, except as provided in Section 2.09(b)(iii) hereof, all mandatory prepayments shall be applied as follows: first , to Fees and reimbursable expenses of Agents then due and payable pursuant to the Loan Documents; second , to interest then due and payable on the Borrower’s Swingline Loan; third , to the principal balance of the Swingline Loan outstanding until the same has been prepaid in full; fourth , to interest then due and payable on the Borrower’s Revolving Loans and other amounts due pursuant to Sections 2.10, 3.01 and 3.05; fifth , to the principal balance of Revolving Borrowing until the same has been prepaid in full; sixth , to cash collateralize all LC Exposures plus any accrued and unpaid interest thereon (to be held and applied in accordance with Section 2.13(j) hereof); seventh , to all other Obligations pro rata in accordance with the amounts that such Lender certifies is outstanding; and eighth , as required by the Intercreditor Agreement or, in the absence of any such requirement, returned to the Borrower or to such party as otherwise required by law.

(ii) Amounts to be applied pursuant to this Section 2.09 to the prepayment of Revolving Loans shall be applied, as applicable, first to reduce outstanding Base Rate Revolving Loans. Any amounts remaining after each such application shall be applied to prepay Eurodollar Revolving Loans. Notwithstanding the foregoing, if the amount of any prepayment of Loans required under this Section 2.09 shall be in excess of the amount of the Base Rate Revolving Loans at the time outstanding, only the portion of the amount of such prepayment that is equal to the amount of such outstanding Base Rate Revolving Loans shall be immediately prepaid and, at the election of the Borrower, the balance of such required prepayment shall be either (A) deposited in the LC Collateral Account and applied to the prepayment of Eurodollar Revolving Loans on the last day of the then next-expiring Interest Period for

 

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Eurodollar Revolving Loans (with all interest accruing thereon for the account of the Borrower) or (B) prepaid immediately, together with any amounts owing to the Lenders under Section 2.10. Notwithstanding any such deposit in the LC Collateral Account, interest shall continue to accrue on such Loans until prepayment.

(d) Notice of Prepayment . The Borrower shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Revolving Borrowing, not later than 1:00 p.m., New York City time, three Business Days before the date of prepayment, (ii) in the case of prepayment of a Base Rate Revolving Borrowing, not later than 4:00 p.m., New York City time, on the date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 1:00 p.m., New York City time, on the date of prepayment. Each such notice shall specify the prepayment date, the principal amount of each Borrowing or portion thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably detailed calculation of the amount of such prepayment. Each notice of prepayment pursuant to this Section shall be irrevocable, except that the Borrower may, by subsequent notice to the Administrative Agent, revoke any such notice of prepayment if such notice of revocation is received not later than 10:00 a.m. (New York City time) on the day on which such scheduled prepayment and, provided that (i) the Borrower reimburses each Lender pursuant to Section 3.05 for any funding losses within five Business Days after receiving written demand therefor and (ii) the amounts of Loans as to which such revocation applies shall be deemed converted to (or continued as, as applicable) Base Rate Loans in accordance with the provisions of Section 2.08 as of the date of notice of revocation (subject to subsequent conversion in accordance with the provisions of this Agreement). Promptly following receipt of any such notice (other than a notice relating solely to Swingline Loans), the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02, except as necessary to apply fully the required amount of a mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.06.

Section 2.10. Payments Generally; Pro Rata Treatment; Sharing of Set-offs .

(a) The Borrower shall make each payment required to be made by it hereunder or under any other Loan Document (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Sections 3.01, 3.04 and 3.05, or otherwise) at or before the time expressly required

 

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hereunder or under such other Loan Document for such payment (or, if no such time is expressly required, prior to 2:00 p.m., New York City time), on the date when due, in immediately available funds, without setoff or counterclaim. Any amounts received after such time on any date may, in the reasonable 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 101 N. Tryon Street 15th Floor, NC1-001-15-04, Charlotte, NC 28255, except payments to be made directly to the Issuing Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Sections 3.01, 3.04, 3.05 and 11.04 shall be made to the Administrative Agent for the benefit of to the Persons entitled thereto and payments pursuant to other Loan Documents shall be made to the Administrative Agent for the benefit of the Persons specified therein. 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 under any Loan Document 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 under each Loan Document shall be made in Dollars.

(b) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied in the manner as provided in Section 2.09(c) or 10.02 hereof, as applicable, ratably among the parties entitled thereto.

(c) If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Revolving Loans or participations in LC Disbursements or Swingline Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Revolving Loans and participations in LC Disbursements and Swingline Loans 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 Revolving Loans and participations in LC Disbursements and Swingline Loans 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 Revolving Loans and participations in LC Disbursements and Swingline Loans; 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 Borrower pursuant to and in accordance with the express terms of this Agreement or any

 

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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, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agree, to the extent it may effectively do so under Applicable Law that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Loan Parties rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of a Loan Party in the amount of such participation.

(d) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrower has 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 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 Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(e) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.02(c), 2.02(f), 2.10(d), 2.12(d) or 2.13(d), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), 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.

Section 2.11. Defaulting Lenders .

(a) Anything contained herein to the contrary notwithstanding, in the event that any Lender (a “ Defaulting Lender ”) defaults (a “ Funding Default ”) in its obligation to fund any Loan (a “ Defaulted Loan ”) in accordance with Section 2.02, then (i) during any Default Period (as defined below) with respect to such Defaulting Lender, such Defaulting Lender shall be deemed not to be a “Lender” for purposes of voting on any matters (including the granting of any consents or waivers) with respect to any of the Loan Documents, (ii) to the extent permitted by Applicable Law during the Default Period (A) any voluntary prepayment of the Revolving Loans pursuant to Section 2.09 shall, if the Borrower so requests at the time of making such voluntary prepayment and if the Administrative Agent, in its sole discretion, consents thereto, be applied to the

 

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Loans of other Lenders as if such Defaulting Lender had no Loans outstanding and the Revolving Exposure of such Defaulting Lender were zero, and if the Administrative Agent does not so elect, the portion attributable to the Defaulting Lender shall be held by Administrative Agent for the benefit of the Defaulting Lender, and as security (along with earnings, if any) for its obligations (y) under this Agreement to the Agents and the Lenders and (z) when all such obligations (contingent and otherwise) have been satisfied, paid to the Borrower, and (B) any mandatory prepayment of the Revolving Loans pursuant to Section 2.09 shall, if the Borrower so requests at the time of making such mandatory prepayments and if the Administrative Agent, in its sole discretion, consents thereto, be applied to the Revolving Loans of other Lenders (but not to the Revolving Loans of such Defaulting Lender) as if such Defaulting Lender had funded all Defaulted Loans of such Defaulting Lender, it being understood and agreed that, if the Administrative Agent so elects, the Borrower shall be entitled to retain any portion of any mandatory prepayment of the Loans that is not paid to such Defaulting Lender solely as a result of the operation of the provisions of this clause (B) and if the Administrative Agent does not so elect, the portion attributable to the Defaulting Lender shall be held by Administrative Agent for the benefit of the Defaulting Lender, and as security (along with earnings, if any) for its obligations (y) under this Agreement to the Agents and the Lenders and (z) when all such obligations (contingent and otherwise) have been satisfied, the Borrower, (iii) upon the Administrative Agent providing prior written consent, such Defaulting Lender’s Revolving Commitment and outstanding Loans and such Defaulting Lender’s pro rata share of the LC Disbursements shall be excluded for purposes of calculating the Commitment Fee in respect of any day during any Default Period with respect to such Defaulting Lender, and upon the Administrative Agent providing prior written consent, such Defaulting Lender shall not be entitled to receive any Commitment Fee with respect to such Defaulting Lender’s Revolving Commitment in respect of any Default with respect to such Defaulting Lender and (iv) any portion of the Commitment Fee allocated to the Defaulting Lender shall be held by Administrative Agent for the benefit of the Defaulting Lender and as security (along with earnings, if any) for its obligations owed (y) under this Agreement to the Agent’s and the Lenders and (z) when all such obligations (contingent and otherwise) have been satisfied, paid to the Borrower.

For purposes of this Agreement, “ Default Period ” means, with respect to any Defaulting Lender, the period commencing on the date of the applicable Funding Default and ending on the date on which the Borrower, Administrative Agent and Requisite Lenders waive all Funding Defaults of such Defaulting Lender in writing.

 

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Section 2.12. Swingline Loans .

(a) Swingline Commitment . Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the Borrower from time to time during the Revolving Availability Period, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding $7.0 million or (ii) the Aggregate Exposures exceeding the lesser of (A) the Aggregate Commitments and (B) the Borrowing Base then in effect; provided that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, repay and reborrow Swingline Loans.

(b) Swingline Loans . To request a Swingline Loan, the Borrower shall notify the Administrative Agent of such request by telephone (confirmed by telecopy), not later than 4:00 p.m., New York City time, on the day of a proposed Swingline Loan. Each such notice shall be irrevocable and specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan. The Administrative Agent will promptly advise the Swingline Lender of any such notice received from the Borrower. The Swingline Lender shall make each Swingline Loan available to the Borrower by means of a credit to the general deposit account of the Borrower with the Swingline Lender (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.13(e), by remittance to the Issuing Bank) by 5:00 p.m., New York City time, on the requested date of such Swingline Loan. The Borrower shall not request a Swingline Loan if at the time of and immediately after giving effect to such request a Default has occurred and is continuing. Swingline Loans shall be made in minimum amounts of $100,000.

(c) Prepayment . The Borrower shall have the right at any time and from time to time to repay, without premium or penalty, any Swingline Loan, in whole or in part, upon giving written or telecopy notice (or telephone notice promptly confirmed by written, or telecopy notice) to the Swingline Lender and to the Administrative Agent before 4:00 p.m., New York City time on the date of repayment at the Swingline Lender’s address for notices specified in the Swingline Lender’s Administrative Questionnaire. All principal payments of Swingline Loans shall be accompanied by accrued interest on the principal amount being repaid to the date of payment.

(d) Participations . The Swingline Lender may by written notice given to the Administrative Agent not later than 4:00 p.m., New York City time, on any Business Day require the Revolving Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such notice shall specify the aggregate amount of Swingline Loans in which Revolving Lenders will participate. Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Revolving Lender,

 

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specifying in such notice such Lender’s Pro Rata Percentage of such Swingline Loan or Loans. Each Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such Lender’s Pro Rata Percentage of such Swingline Loan or Loans. Each Revolving Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Aggregate Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever ( provided that such payment shall not cause such Lender’s Revolving Exposure to exceed such Lender’s Revolving Commitment). Each Revolving Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.02(f) with respect to Loans made by such Lender (and Section 2.02 shall apply, mutatis mutandis , to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Revolving Lenders. The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from the Borrower (or other party on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Revolving Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower of any default in the payment thereof.

Section 2.13. Letters of Credit .

(a) General . Subject to the terms and conditions set forth herein, the Borrower may request the issuance of Letters of Credit for the Borrower’s account or the account of a Subsidiary of the Borrower in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to time during the Revolving Availability Period ( provided that the Borrower shall be a co-applicant with respect to each Letter of Credit issued for the account of or in favor of a Subsidiary). All Existing Letters of Credit shall be deemed, without further action by any party hereto, to have been issued on the Closing Date pursuant to this Agreement, and the Lenders shall thereupon acquire participations in the Existing Letters of Credit as if so issued without further action by any party hereto, to be acquired by the Lenders hereto. In the event of

 

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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 Borrower to, or entered into by the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

(b) Request for 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 shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Bank) a LC Request to the Issuing Bank and the Administrative Agent not later than 1:00 p.m. on the second Business Day preceding the requested date of issuance, amendment, renewal or extension (or such later date and time as is reasonably acceptable to the Issuing Bank). A request for an initial issuance of a Letter of Credit shall specify in form and detail reasonably satisfactory to the Issuing Bank: (i) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (ii) the amount thereof; (iii) the expiry date thereof; (iv) the name and address of the beneficiary thereof; (v) the documents to be presented by such beneficiary in case of any drawing thereunder; (vi) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder, and (vii) such other matters as the Issuing Bank may reasonably require. A request for an amendment, renewal or extension of any outstanding Letter of Credit shall specify in form and detail reasonably satisfactory to the Issuing Bank (i) the Letter of Credit to be amended, renewed or extended; (ii) the proposed date of amendment, renewal or extension thereof (which shall be a Business Day), (iii) the nature of the proposed amendment, renewal or extension, and (iv) such other matters as the Issuing Bank may reasonably require. If requested by the Issuing Bank, the Borrower also shall submit a letter of credit application substantially 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 Borrower 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 $25.0 million and (ii) the total Revolving Exposures shall not exceed the lesser of (A) the total Revolving Commitments and (B) the Borrowing Base then in effect. Unless the Issuing Bank shall otherwise agree, no Letter of Credit shall be denominated in a currency other than Dollars.

(c) Expiration Date . Each Letter of Credit shall expire at or prior to the close of business on the earlier of the date which is one year after the date of the issuance of such Letter of Credit (or such other longer period of time as the Administrative Agent and the applicable Issuing Bank may agree and, in the case of any renewal or extension thereof, one (1) year after such renewal or extension) and, unless cash collateralized or otherwise credit supported to the reasonable

 

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satisfaction of the Administrative Agent and the applicable Issuing Bank (in which case the expiry may extend no longer than twelve months after the Letter of Credit Expiration Date) the Letter of Credit Expiration Date. Each Standby Letter of Credit may, upon the request of the Borrower, include a provision whereby such Letter of Credit shall be renewed automatically for additional consecutive periods of twelve (12) months or less (but, subject to the foregoing, not beyond the date that is after the Letter of Credit Expiration Date) unless the applicable Issuing Bank notifies the beneficiary thereof at least thirty (30) days prior to the then-applicable expiration date that such Letter of Credit will not be renewed.

(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 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 Pro Rata 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