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    Form_8-K_2008-07-31reliance steel & aluminum  Form_8-K_2008-07-31reliance steel & aluminum Document Transcript

    • UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): July 31, 2008 RELIANCE STEEL & ALUMINUM CO. (Exact name of registrant as specified in its charter) California 001-13122 95-1142616 (State or other jurisdiction of (Commission File Number) (I.R.S. Employer incorporation) Identification Number) 350 S. Grand Ave., Suite 5100 Los Angeles, CA 90071 (Address of principal executive offices) (213) 687-7700 (Registrant’s telephone number, including area code) Not applicable. (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
    • Item 1.01 Entering into a Definitive Material Agreement. The information provided in the Items 2.01 and 2.03 below is hereby incorporated by reference into this Item 1.01. Item 2.01 Completion of Acquisition or Disposition of Assets. On August 1, 2008, Reliance Steel & Aluminum Co. (“Reliance” or the “Company”) completed the acquisition of all of the outstanding capital stock of PNA Group Holding Corporation, a Delaware corporation (“PNA Group Holding”), through its wholly-owned subsidiary RSAC Management Corp., a California corporation (“RSAC Management”), in accordance with the Stock Purchase Agreement dated June 16, 2008 and described in that Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”). RSAC Management paid cash consideration of approximately $340 million and repaid or refinanced debt of PNA Group Holding or its subsidiaries in the amount of approximately $725 million, including the settlement of Reliance’s cash tender offers for 100% of the outstanding notes of PNA Intermediate Holding Corporation (“PNA Intermediate”) and PNA Group, Inc. (“PNA Group”), wholly-owned subsidiaries of PNA Group Holding. (See Item 8.01 below.) The Company funded the acquisition with proceeds from its new $500 million senior unsecured term loan and borrowings under its existing $1.1 billion syndicated revolving credit facility (See Item 2.03 below.) PNA Group Holding’s operating subsidiaries include Delta Steel, LP, Feralloy Corporation, Infra-Metals Co., Metals Supply Company, Ltd., Precision Flamecutting and Steel, LP and Sugar Steel Corporation. Through these operating subsidiaries, PNA Group Holding processes and distributes principally carbon steel plate, bar, structural and flat-rolled products through 23 steel service centers throughout the United States. Feralloy Corporation also participates in five joint ventures operating seven service centers in the United States and Mexico. PNA Group Holding’s revenues were about $1.6 billion for the twelve months ended December 31, 2007 and about $1.1 billion for the six months ended June 30, 2008. Current management of each of PNA Group Holding’s operating subsidiaries will remain in place, although changes will be made in management of PNA Group Holding, PNA Intermediate and PNA Group. Initially, PNA Group Holding will continue to operate as a wholly-owned subsidiary of the Company, but the Company is considering consolidating or restructuring certain of the PNA entities. The purchase price was determined by negotiations between the Company, on the one hand, and the stockholders of PNA Group Holding, on the other. To fund the purchase price and the repayment or refinancing of debt, the Company drew down on its syndicated revolving line of credit established November 9, 2006, with Bank of America, N.A., as administrative agent, and 15 banks, as lenders, and obtained a new syndicated term loan, dated July 31, 2008, with Bank of America, N.A., as administrative agent, and a syndicate of banks, as lenders, in the amount of $500 million. The sellers, through Travel Main Corporation, own real property on which certain facilities of the operating subsidiaries of PNA Group Holding are located. Travel Main Corporation was not part of PNA Group Holding at the time of the closing of the transaction and any assets and debt of Travel Main Corporation continue to be owned, directly or indirectly, by the sellers. Upon completion of the acquisition of PNA Group Holding by RSAC Management, Maurice S. “Sandy” Nelson, the Chief Executive Officer of PNA Group Holding, retired. The foregoing description of the acquisition does not purport to be complete and is qualified in its entirety by reference to the full text of the agreement previously filed with the SEC. Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of Registrant. In connection with the acquisition of PNA Group Holding, Reliance and RSAC Management, collectively as borrowers, entered into a Credit Agreement dated July 31, 2008 with Bank of America, -2-
    • N.A., as administrative agent, and the lenders identified therein providing for a term loan in the principal amount of $500 million (the “Term Loan”), with quarterly installment payments of 15% of the original principal. The Credit Agreement for the Term Loan has substantially the same terms and conditions as the Company’s existing syndicated revolving credit facility, and the Term Loan matures on November 9, 2011, co terminus with the Company’s existing syndicated revolving credit facility. The Company also entered into that First Amendment to Amended and Restated Credit Agreement (the “Amendment”) dated July 31, 2008 by and among Reliance and RSAC Management, as borrowers, and Bank of America, N.A. as administrative agent, and the lenders named therein. The Amendment provides, among other things, for an increase in the amount of permitted borrowings of unsecured indebtedness by the Company, among other things. Initially the amount of permitted unsecured indebtedness for borrowed money was $500 million and it has been increased to $500 million plus the amount of the Term Loan. All of the Company’s wholly-owned material domestic subsidiaries are guarantors of all of the Company’s consolidated debt including those items discussed above. Item 8.01 Other Events The disclosure set forth under Items 2.01 and 2.03 above is incorporated herein by reference. Reliance issued a press release on August 4, 2008 announcing the acquisition of PNA Group Holding Corporation and discussing the related financing transactions. The press release is attached as Exhibit 99.1 hereto. On July 1, 2008, pursuant to an Offer to Purchase and Consent Solicitation Statement dated July 1, 2008, Reliance commenced a tender offer to purchase for cash any and all of the outstanding $250 million 10-3/4% Senior Notes due 2016 (the “Fixed Rated Notes”) issued by PNA Group pursuant to that Indenture dated as of August 15, 2006, and any and all of the $170 million Senior Floating Rate Toggle Notes due 2013 (“Floating Rate Notes”) issued by PNA Intermediate pursuant to that Indenture dated February 12, 2007 (collectively, the Fixed Rate Notes and the Floating Rate Notes are referred to as the “PNA Notes”) and a related consent solicitation to amend the Indentures with respect to the PNA Notes. On July 15, 2008, the Company announced that all of the PNA Notes had been tendered and not withdrawn. The tender offers expired on August 1, 2008. The Company accepted for payment all of the PNA Notes validly tendered and not withdrawn and settled the purchase of the PNA Notes pursuant to these tender offers on August 4, 2008. The total amount paid to settle the purchase of the PNA Notes pursuant to the tender offers and consent solicitation, including the consent payments and accrued but unpaid interest was $489.9 million. The Company paid for the PNA Notes with funds form the Term Loan and from its existing syndicated revolving credit facility. (See Item 2.03 above.) Reliance received the requisite consent for the amendments to the Indentures. The amendments to the Indentures eliminated substantially all of the restrictive covenants contained in the Indentures and the PNA Notes (other than the covenants related to asset sales and change of control offers) and certain events of default. The amendments were approved by holders of more than a majority of the outstanding principal balance of both the Fixed Notes and the Floating Rates Notes and became effective upon acceptance by the Company on August 1, 2008 with respect to the Fixed Rate Notes. The Floating Rate Notes were retired and cancelled effective August 4, 2008. Following the settlement of the tender offers described above, PNA Group entered into a Fourth Supplemental Indenture dated as of August 1, 2008. Under that Fourth Supplemental Indenture, PNA Group continues to be obligated to pay the Fixed Rate Notes, but it has become an intra-company debt for the benefit of Reliance. A copy of the Company’s press release dated August 4, 2008 is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference. The foregoing description and the description in the press release are qualified in their entirety by reference to the full text of the Offer to Purchase and Consent Solicitation Statement and the Fourth Supplemental Indenture. -3-
    • Item 9.01 Financial Statements and Exhibits. (a) Financial Statements of Businesses Acquired. No financial statements are being filed with this report. Financial statements required to be filed as exhibits to this report will be filed by amendment not later than sixty (60) days after the date that the initial report on Form 8-K must be filed. (b) Pro Forma Financial Information. No pro forma financial information is being filed with this report. The pro forma financial information required to be filed as an exhibit to this report will be filed by amendment not later than sixty (60) days after the date that the initial report on Form 8-K must be filed. (c) Exhibits. Exhibit No. Description 4.1 Credit Agreement dated July 31, 2008 by and among Reliance Steel & Aluminum Co. and RSAC Management Corp., collectively as Borrowers, and Bank of America, N.A., as Administrative Agent, and the banks identified as lenders therein. 4.2 First Amendment to Amended and Restated Credit Agreement dated July 31, 2008 by and among Reliance Steel & Aluminum Co. and RSAC Management Corp. and Bank of America, N.A., as Administrative Agent, and the banks identified as lenders therein. 4.3 Fourth Supplemental Indenture, dated August 1, 2008 by and among The Bank of New York Mellon, as Trustee, and PNA Group, Inc. and the subsidiaries of PNA Group, Inc. that are guarantors with respect thereto. 99.1 Press Release dated August 4, 2008. 99.2 Offer to Purchase and Consent Solicitation Statement dated July 1, 2008. -4-
    • SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. RELIANCE STEEL & ALUMINUM CO. Dated: August 6, 2008 By /s/ Karla Lewis Karla Lewis Executive Vice President, Chief Financial Officer and Assistant Secretary -5-
    • RELIANCE STEEL & ALUMINUM CO. FORM 8-K INDEX TO EXHIBITS Exhibit No. Description 4.1 Credit Agreement dated July 31, 2008 by and among Reliance Steel & Aluminum Co. and RSAC Management Corp., collectively as Borrowers, and Bank of America, N.A., as Administrative Agent, and the banks identified as lenders therein. 4.2 First Amendment to Amended and Restated Credit Agreement dated July 31, 2008 by and among Reliance Steel & Aluminum Co. and RSAC Management Corp. and Bank of America, N.A., as Administrative Agent, and the banks identified as lenders therein. 4.3 Fourth Supplemental Indenture, dated August 1, 2008 by and among The Bank of New York Mellon, as Trustee, and PNA Group, Inc. and the subsidiaries of PNA Group, Inc. that are guarantors with respect thereto. 99.1 Press Release dated August 4, 2008. 99.2 Offer to Purchase and Consent Solicitation Statement dated July 1, 2008. -6-
    • EXECUTION COPY Published CUSIP Number: CREDIT AGREEMENT Dated as of July 31, 2008 among RELIANCE STEEL & ALUMINUM CO. RSAC MANAGEMENT CORP. BANK OF AMERICA, N.A., as Administrative Agent JPMORGAN CHASE BANK, N.A., as Co-Syndication Agent UBS SECURITIES LLC, as Co-Syndication Agent and THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO Arranged by BANC OF AMERICA SECURITIES LLC
    • TABLE OF CONTENTS SECTION 1 DEFINITIONS AND ACCOUNTING TERMS 1 1.1 Defined Terms 1 1.2 Use of Defined Terms 23 1.3 Accounting Terms 23 1.4 Rounding 23 1.5 Exhibits and Schedules 24 1.6 References to “RSA and its Subsidiaries” or “Borrowers and their respective Subsidiaries” 24 1.7 Miscellaneous Terms 24 SECTION 2 THE TERM LOAN 24 2.1 Term Loan 24 2.2 Borrowing, Conversions and Continuations of Portions 24 2.3 Prepayments 25 2.4 Termination of Commitments 25 2.5 Repayments 25 2.6 Interest 25 2.7 Fees 26 2.8 Computation of Interest and Fees 26 2.9 Manner and Treatment of Payments among Lenders, Borrowers and Administrative Agent 27 2.10 Funding Sources 28 2.11 Automatic Deduction 28 2.12 Obligations of Lenders Several 29 2.13 Sharing of Payments by Lenders 29 SECTION 3 TAXES, YIELD PROTECTION AND ILLEGALITY 29 3.1 Taxes 29 3.2 Increased Costs 30 3.3 Capital Adequacy 30 3.4 Illegality 30 3.5 Inability to Determine Rates 31 3.6 Breakfunding Costs 31 3.7 Matters Applicable to all Requests for Compensation 31 i
    • TABLE OF CONTENTS (continued) Page SECTION 4 CONDITIONS 32 4.1 Basic Closing Conditions 32 4.2 Additional Conditions 33 SECTION 5 REPRESENTATIONS AND WARRANTIES 34 5.1 Existence and Qualification; Power; Compliance With Laws 34 5.2 Authority; Compliance With Other Agreements and Instruments and Government Regulations 34 5.3 No Governmental Approvals or Other Consents Required 35 5.4 Binding Obligations 35 5.5 Litigation 35 5.6 No Default 35 5.7 ERISA Compliance 35 5.8 Use of Proceeds; Margin Regulations 36 5.9 Title to Property 36 5.10 Intangible Assets 36 5.11 Tax Liability 36 5.12 Financial Statements 37 5.13 Environmental Compliance 37 5.14 Investment Company Act 37 5.15 Subsidiaries 38 5.16 Insurance 38 5.17 Disclosure 38 SECTION 6 AFFIRMATIVE COVENANTS 38 6.1 Financial Statements 38 6.2 Certificates, Notices and Other Information 39 6.3 Guaranties 42 6.4 Preservation of Existence 42 6.5 Maintenance of Properties 42 6.6 Maintenance of Insurance 43 6.7 Payment of Obligations 43 6.8 Compliance With Laws 43 ii
    • TABLE OF CONTENTS (continued) Page 6.9 Environmental Laws 43 6.10 Inspection Rights 43 6.11 Keeping of Records and Books of Account 43 6.12 Compliance with ERISA 43 6.13 Compliance With Agreements 44 6.14 Use of Proceeds 44 6.15 RSAC Management 44 SECTION 7 NEGATIVE COVENANTS 44 7.1 Liens, Negative Pledges 44 7.2 Investments 45 7.3 Indebtedness 46 7.4 Prepayment of Indebtedness 46 7.5 Dispositions 47 7.6 Sales and Leasebacks 47 7.7 Mergers 47 7.8 Acquisitions 48 7.9 ERISA 48 7.10 Interest Coverage Ratio 48 7.11 Total Leverage Ratio 48 7.12 Change in Nature of Business 48 7.13 Transactions with Affiliates 48 7.14 Distributions 49 SECTION 8 EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT 49 8.1 Events of Default 49 8.2 Remedies Upon Event of Default 51 8.3 Application of Funds 51 SECTION 9 ADMINISTRATIVE AGENT 52 9.1 Appointment and Authority 52 9.2 Rights as a Lender 52 9.3 Exculpatory Provisions 52 iii
    • TABLE OF CONTENTS (continued) Page 9.4 Reliance by Administrative Agent 53 9.5 Delegation of Duties 53 9.6 Resignation of Administrative Agent 54 9.7 Non-Reliance on Administrative Agent and Other Lenders 54 9.8 No Other Duties, Etc. 54 9.9 Administrative Agent May File Proofs of Claim 55 9.10 Master Subsidiary Guaranty Matters 55 SECTION 10 MISCELLANEOUS 56 10.1 Amendments, Etc. 56 10.2 Notices; Effectiveness; Electronic Communication 57 10.3 No Waiver; Cumulative Remedies 59 10.4 Expenses; Indemnity; Damage Waiver 59 10.5 Payments Set Aside 61 10.6 Successors and Assigns 61 10.7 Treatment of Certain Information; Confidentiality 65 10.8 Right of Setoff 66 10.9 Interest Rate Limitation 67 10.10 Counterparts; Integration; Effectiveness 67 10.11 Survival of Representations and Warranties 67 10.12 Severability 67 10.13 Replacement of Lenders 68 10.14 Governing Law; Jurisdiction; Etc. 68 10.15 Waiver of Jury Trial 69 10.16 USA PATRIOT Act Notice 72 10.17 Time of the Essence 72 10.18 Tax Forms 72 10.19 Surety Waivers 73 10.20 No Advisory or Fiduciary Responsibility 73 iv
    • TABLE OF CONTENTS (continued) Page EXHIBITS Form of A Request for Extension of Credit B Compliance Certificate C Term Note D Assignment and Assumption E Master Subsidiary Guaranty SCHEDULES 2.1 Commitments and Pro Rata Shares 5.5 Certain Litigation 5.9 Existing Liens and Negative Pledges 5.15 Subsidiaries 7.2 Investments 7.3 Existing Indebtedness 10.2 Administrative Agent’s Office; Certain Addresses for Notice v
    • CREDIT AGREEMENT This CREDIT AGREEMENT dated as of July 31, 2008, is entered into by and among Reliance Steel & Aluminum Co., a California corporation (“RSA”), RSAC Management Corp., a California corporation (“RSAC Management” and together with RSA, jointly and severally, “Borrowers” and individually, a “Borrower”), each lender whose name is set forth on the signature pages of this Agreement and each lender which may hereafter become a party to this Agreement (collectively, “Lenders” and individually, a “Lender”), and Bank of America, N.A., as Administrative Agent. In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows: Section 1 DEFINITIONS AND ACCOUNTING TERMS 1.1 Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below: “Acquired Business” means the entity or assets acquired by Borrowers or a Subsidiary of Borrowers in an Acquisition, whether before or after the date hereof. “Acquired Business EBITDA” means for any period ending on or before the date of any Acquisition of an Acquired Business the sum of items (a) through (f) of the definition of EBITDA with respect to such Acquired Business. “Acquisition” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person or any business or division of a Person, (b) the acquisition of in excess of 50% of the capital stock, partnership interests, membership interests or equity of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person (other than a Person that is a Subsidiary) provided that either Borrower or one of its Subsidiaries is the surviving entity. “Administrative Agent” means Bank of America, N.A., in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent. “Administrative Agent’s Office” means Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.2, or such other address or account as Administrative Agent hereafter may designate by written notice to Borrowers and Lenders. “Administrative Questionnaire” means an administrative questionnaire in a form supplied by Administrative Agent. “Affiliate” means, as to any Person, any other Person which directly or indirectly controls, or is under common control with, or is controlled by, such Person. As used in this 1
    • definition, “control” (and the correlative terms, “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise); provided that, in any event, any Person that owns, directly or indirectly, 10% or more of the securities having ordinary voting power for the election of directors or other governing body of a corporation that has more than 100 record holders of such securities, or 10% or more of the partnership or other ownership interests of any other Person that has more than 100 record holders of such interests, will be deemed to control such corporation, partnership or other Person. “Aggregate Commitments” has the meaning set forth in the definition of “Commitment”. “Agreement” means this Credit Agreement, either as originally executed or as it may from time to time be supplemented, modified, amended, restated or extended. “Applicable Margin” means, for any Pricing Period, the per annum amounts set forth below (in basis points per annum) opposite the applicable Pricing Level; provided, however, that until Administrative Agent’s receipt of the first Compliance Certificate after the Closing Date required under Section 6.2(a), such amounts shall be those indicated for Pricing Level 2: Pricing Level Total Leverage Ratio Eurodollar Rate + Base Rate + ≥ 0.55:1 2.50 1.25 1 <0.55:1.00 but ≥0.45:1.00 2.25 1.00 2 <0.45:1.00 but ≥0.35:1.00 2.00 0.75 3 <0.35:1.00 but ≥0.25:1.00 1.75 0.50 4 5 <0.25: 1.00 1.50 0.25 “Pricing Level” means, for each period, the pricing level set forth above opposite the Total Leverage Ratio achieved by RSA and its Subsidiaries as of the first day of that Pricing Period. “Pricing Level Change Date” means, with respect to any change in the Pricing Level which results in a change in the Applicable Margin, the earlier of (a) 5 Business Days after the date upon which Borrowers deliver a Compliance Certificate to Administrative Agent reflecting such changed Pricing Level and (b) 5 Business Days after the date upon which Borrowers are required by Section 6.2(a) to deliver such Compliance Certificate; provided, however, that if the Compliance Certificate is not delivered by the date required by Section 6.2(a), then, at the request of Requisite Lenders, subject to the other provisions of this Agreement, commencing on the date such Compliance Certificate was required until such Compliance Certificate is delivered, the Applicable Margin shall be based on the next higher level than the one previously in effect, and from and 2
    • after the date such Compliance Certificate is thereafter received, the Applicable Margin shall be as determined from such Compliance Certificate. “Pricing Period” means (a) the period commencing on the Closing Date and ending on the first Pricing Level Change Date to occur thereafter and (b) each subsequent period commencing on each Pricing Level Change Date and ending the day prior to the next Pricing Level Change Date. Notwithstanding anything to the contrary contained in this definition, the determination of the Applicable Margin for any period shall be subject to the provisions of Section 2.8. “Applicable Taxes” means any and all present or future taxes (including documentary taxes), levies, assessments, imposts, duties, deductions, fees, withholdings or similar charges, and all liabilities with respect thereto imposed by a Governmental Authority relating to any Loan Document, including any liabilities imposed on amounts paid by Borrowers to indemnify or reimburse any Person for such amounts, excluding Lender Taxes. “Approved Fund” has the meaning specified in Section 10.6(h). “Arranger” means Banc of America Securities LLC, in its capacity as sole lead arranger and sole book manager. “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 and disbursements of any law firm or other external counsel and the allocated cost of internal legal services and all 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, 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 if such lease were accounted for as a capital lease. “Bank of America” means Bank of America, N.A. “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 3
    • 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 Portion” means all or any portion of the Term Loan which bears interest based on the Base Rate. “Borrower” and “Borrowers” each has the meaning set forth in the introductory paragraph hereto. “Borrower Party” means any Person, other than Administrative Agent and Lenders, which now or hereafter is a party to any of the Loan Documents. “Borrowers Account” shall have the meaning specified in Section 2.11. “Borrowers Materials” has the meaning specified in Section 6.2. “Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in New York City or San Francisco are authorized or required by law to close and, if such day relates to any Eurodollar Rate Portion, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market. “Capital Lease Obligations” means all monetary obligations of a Person under any leasing or similar arrangement which, in accordance with GAAP, is classified as a capital lease. “Cash” means, when used in connection with any Person, all monetary and non-monetary items owned by that Person that are treated as cash or cash equivalents in accordance with GAAP, consistently applied. “Change of Control” means, with respect to any Person, an event or series of events by which: (a) 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), directly or indirectly, of 40% or more of the equity securities of such Person entitled to vote for members of the board of directors or equivalent governing body of such Person on a partially-diluted basis (i.e., taking into account all such securities that such person or group has the right to acquire pursuant to any option right); or 4
    • (b) during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of such Person 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. “Closing Date” means the time and Business Day on which the conditions set forth in Section 4.1 are satisfied or waived and Administrative Agent and Borrowers have agreed such Business Day shall be the Closing Date. Administrative Agent shall notify Borrowers and Lenders of the date that is the Closing Date. “Code” means the Internal Revenue Code of 1986, as amended or replaced and as in effect from time to time. “Commitment” means, for each Lender, the amount set forth as such opposite such Lender’s name on Schedule 2.1, as such amount may be terminated pursuant to the terms of this Agreement (collectively, the “Aggregate Commitments”). The respective Pro Rata Shares of Lenders as of the date hereof are set forth in Schedule 2.1. “Compliance Certificate” means a certificate in the form of Exhibit B, properly completed and signed by a Responsible Officer of each Borrower. “Consolidated Net Worth” means, as of the date of any determination thereof, the total consolidated assets of RSA and its Subsidiaries less the total consolidated liabilities of RSA and its Subsidiaries determined in accordance with GAAP. “Consolidated Tangible Net Worth” means, as of any date of determination, for RSA and its Subsidiaries on a consolidated basis, Shareholders’ Equity of RSA and its Subsidiaries on that date minus the Intangible Assets of RSA and its Subsidiaries on that date. “Continuation” and “Continue” each mean, with respect to any Eurodollar Rate Portion, the continuation of such Eurodollar Rate Portion as a Eurodollar Rate Portion in the same principal amount, but with a new Interest Period and an interest rate determined as of the first day of such new Interest Period. Continuations must occur on the last day of the Interest Period for such Eurodollar Rate Portion. “Contractual Obligation” means, as to any Person, any provision of any outstanding security issued by that Person or of any material agreement, instrument or undertaking to which that Person is a party or by which it or any of its Property is bound. 5
    • “Conversion” and “Convert” each mean the conversion of all or any Base Rate Portion or Eurodollar Rate Portion from one type of credit extension into another type of credit extension. With respect to Eurodollar Rate Portions, Conversions must occur on the last day of the Interest Period for such Eurodollar Rate Portion. “Debtor Relief Laws” means the Bankruptcy Code of the United States of America, as amended from time to time, and all other applicable liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws from time to time in effect and affecting the rights of creditors generally. “Default” means any event that, with the giving of any applicable notice or passage of time specified in Section 8.1, or both, would be an Event of Default. “Default Rate” means an interest rate equal to the Base Rate plus the Applicable Margin, if any, applicable to the Base Rate plus 2%, to the fullest extent permitted by applicable Laws. “Defaulting Lender” means any Lender that (a) has failed to fund any portion of the Term Loan when due, (b) has otherwise failed to pay over to Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute, or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding. “Designated Deposit Account” means a deposit account to be maintained by RSA or RSAC Management with Bank of America, as from time to time designated by Borrowers by written notification to Administrative Agent. “Disposition” means the voluntary sale, transfer, or other disposition of any asset of Borrowers or any of their respective Subsidiaries, including without limitation any sale, assignment, pledge, hypothecation, transfer or other disposal with or without recourse of any notes or accounts receivable or any rights and claims associated therewith. “Distribution” means, with respect to any shares of capital stock or any warrant or option to purchase an equity security or other equity security issued by a Person, (a) the retirement, redemption, purchase, or other acquisition for Cash or for Property by such Person of any such security, (b) the declaration or (without duplication) payment by such Person of any dividend in Cash or in Property on or with respect to any such security, (c) any Investment by such Person in the holder of 5% or more of any such security if a purpose of such Investment is to avoid characterization of the transaction as a Distribution and (d) any other payment in Cash or Property by such Person constituting a distribution under applicable Laws with respect to such security. “Dollars” or “$” means United States dollars. 6
    • “EBIT” means, with respect to any Person and with respect to any fiscal period, the sum of (a) Net Income of that Person for that period, plus (b) any non-operating non-recurring loss reflected in such Net Income, minus (c) any non-operating non-recurring gain reflected in such Net Income, plus (d) Interest Expense of that Person for that period, plus (e) the aggregate amount of federal and state taxes on or measured by income of that Person for that period (whether or not payable during that period), in each case as determined in accordance with GAAP, and adjusted by subtracting equity in earnings in 50% or less owned companies and joint ventures and, to the extent approved by Administrative Agent (which approval shall not be unreasonably withheld), any other companies not consolidated with Borrowers, and by adding Cash dividends received from 50% or less owned companies and joint ventures and, to the extent approved by Administrative Agent (which approval shall not be unreasonably withheld), any other companies not consolidated with Borrowers. “EBITDA” means, with respect to any Person and with respect to any fiscal period, the sum of (a) Net Income of that Person for that period, plus (b) any non-operating non-recurring loss reflected in such Net Income, minus (c) any non-operating non-recurring gain reflected in such Net Income, plus (d) Interest Expense of that Person for that period, plus (e) the aggregate amount of federal and state taxes on or measured by income of that Person for that period (whether or not payable during that period), plus (f) depreciation, amortization and all other non-cash expenses of that Person for that period, plus (g) Acquired Business EBITDA, in each case as determined in accordance with GAAP, and adjusted by subtracting equity in earnings in 50% or less owned companies and joint ventures and, to the extent approved by Administrative Agent (which approval shall not be unreasonably withheld), any other companies not consolidated with Borrowers, and by adding Cash dividends received from 50% or less owned companies and joint ventures and, to the extent approved by Administrative Agent (which approval shall not be unreasonably withheld), any other companies not consolidated with Borrowers; provided that Acquired Business EBITDA with respect to any Acquired Business shall only be included in EBITDA if financial statements of such Acquired Business, within the preceding twelve months, either were (i) audited by an independent accounting firm, (ii) reviewed by an independent accounting firm as long as such reviewed and unaudited Acquired Business EBITDA does not exceed 10% of the total audited EBITDA of RSA and its Subsidiaries, or, (iii) subject to consent of the Requisite Lenders, unaudited or reviewed by an independent accounting firm. “Eligible Assignee” has the meaning specified in Section 10.6(h). “Environmental Laws” means all federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authorities, in each case relating to environmental, health, safety and land use matters applicable to any of the Real Property. “Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of Borrowers or any other Borrower Party, or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, 7
    • (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. “ERISA” means the Employee Retirement Income Security Act of 1974, and any regulations issued pursuant thereto, as amended or replaced and as in effect from time to time. “ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with Borrowers 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 Borrowers 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 which is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by either 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 a Pension Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which might reasonably be expected to constitute 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 PBGC premiums due but not delinquent under Section 4007 of ERISA, upon Borrowers or any ERISA Affiliate. “Eurodollar Base Rate” has the meaning specified in the definition of Eurodollar Rate. “Eurodollar Rate” means for any Interest Period with respect to a Eurodollar Rate Portion, a rate per annum determined by Administrative Agent pursuant to the following formula: Eurodollar Base Rate Eurodollar Rate = 1.00 - Eurodollar Reserve Percentage Where, “Eurodollar Base Rate” means, for such Interest Period, 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 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 8
    • 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 Base Rate” for such Interest Period shall be the rate per annum determined by 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 Portion 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 Portion” means all or any portion of the Term Loan bearing interest 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 Portion shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage. “Event of Default” has the meaning specified in Section 8.1. “Existing Credit Agreement” means that certain Amended and Restated Credit Agreement, dated as of November 9, 2006, by and among RSA, RSAC Management, Bank of America, N.A., as Administrative Agent and the lenders identified therein, as amended. “Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by Administrative Agent. “Fee Letter” means the letter agreement dated June 23, 2008, among Borrowers, Administrative Agent and Arranger. “Fiscal Quarter” means the fiscal quarter of RSA consisting of a three-month fiscal period ending on each March 31, June 30, September 30 and December 31. 9
    • “Fiscal Year” means the fiscal year of RSA consisting of a twelve-month period ending on each December 31. “Foreign Lender” has the meaning specified in Section 10.18(a). “Foreign Subsidiary” means, at any time, each Subsidiary of a Borrower which is created, organized or domesticated in any jurisdiction other than the United States or any state thereof. “FRB” means the Board of Governors of the Federal Reserve System or any governmental authority succeeding to its functions. “Fund” has the meaning specified in Section 10.6(h). “Funded Debt” means, as of the date of determination, without duplication, the sum of (a) all principal Indebtedness of RSA and its Subsidiaries for borrowed money (including debt securities issued by RSA or any of its Subsidiaries) on that date plus (b) Guaranty Obligations in connection with Synthetic Leases, plus (c) the aggregate amount of all Capital Lease Obligations of RSA and its Subsidiaries on that date, plus (d) all Letter of Credit Usage (as defined in the Existing Credit Agreement) and the face amount of, and reimbursement obligations with respect to, any other letters of credit issued for the account of RSA and its Subsidiaries. “GAAP” means accounting principles generally accepted in the United States of America 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, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing (including any supra-national bodies, such as the European Union or the European Central Bank). “Granting Lender” has the meaning specified in Section 10.6(i). “Guarantors” means, collectively, (a) all Material Domestic Subsidiaries; (b) any Subsidiaries that are guarantors or obligors with respect to any of the note purchase agreements described in Schedule 7.3 or with respect to any Indebtedness issued pursuant to Sections 7.3(a), 7.3(f) or 7.3(g); and (c) Subsidiaries that have been identified by the Borrowers as Guarantors pursuant to Section 6.3(a). 10
    • “Guaranty Obligation” means, as to any Person, any (a) guarantee by that Person of Indebtedness of, or other obligation performable by, any other Person or (b) assurance, agreement, letter of responsibility, letter of awareness, undertaking or arrangement given by that Person to an obligee of any other Person with respect to the performance of an obligation by, or the financial condition of, such other Person, whether direct, indirect or contingent, including any purchase or repurchase agreement covering such obligation or any collateral security therefor, any agreement to provide funds (by means of loans, capital contributions or otherwise) to such other Person, any agreement to support the solvency or level of any balance sheet item of such other Person or any “keep-well” or other arrangement of whatever nature given for the purpose of assuring or holding harmless such obligee against loss with respect to any obligation of such other Person; provided, however, that the term Guaranty Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guaranty Obligation shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, covered by such Guaranty Obligation or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the Person making the Guaranty in good faith. “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. “Hostile Acquisition” means the acquisition of the capital stock or other equity interests of a Person through a tender offer or similar solicitation of the owners of such capital stock or other equity interests which has not been approved (which approval shall be obtained prior to such acquisition) by resolutions of the board of directors of such Person or by similar action if such Person is not a corporation. “Indebtedness” means, as to any Person (without duplication): (a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (b) any direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, shipside bonds, surety bonds and similar instruments; (c) all obligations of such Person as lessee under leases which have been or should be, in accordance with GAAP, recorded as Capital Lease Obligations; (d) all other items which, in accordance with GAAP, would be included as liabilities on the liability side of the balance sheet of such Person as of the date at which Indebtedness is to be determined; 11
    • (e) net obligations under any Swap Contract in an amount equal to (i) if such Swap Contract has been closed out, the termination value thereof, or (ii) if such Swap Contract has not been closed out, the mark-to-market value thereof determined on the basis of readily available quotations provided by any recognized dealer in such Swap Contracts; (f) whether or not so included as liabilities in accordance with GAAP, all obligations of such Person to pay the deferred purchase price of property or services, and 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; (g) indebtedness of such Person arising under facilities for the discount of accounts receivable of such Person in an amount equal to the present value of the unpaid amount of all accounts receivable sold, determined by using a discount rate equal to the discount rate used in determining the purchase price of such accounts receivable under such facilities; (h) indebtedness relating to Synthetic Leases; and (i) all Guaranty Obligations of such Person in respect of any of the foregoing to the extent not included as a primary obligation of another Person. 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 (subject only to customary exceptions acceptable to the Requisite Lenders). The amount of any Capital Lease Obligation or Synthetic Lease as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date. Notwithstanding the foregoing, obligations in respect of money borrowed by Earle M. Jorgensen Company, a Delaware corporation (“EMJ”), against the available cash surrender value of life insurance policies (the “EMJ COLI”) that were obtained in 1984, 1985 and 1986 by Kilsby Roberts Holding Co. (“KR”) from Phoenix Mutual Life Insurance Company covering participants in the KR employee stock ownership plan and certain other KR executives shall not constitute Indebtedness so long as (1) such obligations are non- recourse to RSA, EMJ, and their respective Subsidiaries, (2) each EMJ COLI policy is owned by EMJ and has EMJ as its sole beneficiary, (3) the aggregate amount of such obligations outstanding thereunder at any time does not exceed the cash surrender value of the EMJ COLI policies at such time, and (4) the proceeds of such loans incurred after the Closing Date are not used for any purpose other than to pay the premiums, interest, taxes and expenses related to the EMJ COLI policies. “Indemnitee” has the meaning specified in Section 10.4(b). 12
    • “Intangible Assets” means assets that are considered intangible assets under GAAP, including customer lists, goodwill, computer software (except for purchased or licensed software), copyrights, trade names, trademarks and patents. “Interest Coverage Ratio” means, as of the last day of any Fiscal Quarter (including the last day of a Fiscal Quarter which is also the last day of a Fiscal Year), the ratio of (a) EBIT of RSA and its Subsidiaries on a consolidated basis for the fiscal period consisting of that Fiscal Quarter and the three immediately preceding Fiscal Quarters, excluding any portion of EBIT allocable to any Person acquired by RSA or any of its Subsidiaries for any fiscal period prior to the Acquisition to (b) Interest Expense of RSA and its Subsidiaries on a consolidated basis for such fiscal period. “Interest Expense” means, with respect to any Person and as of the last day of any fiscal period, the sum of (a) all interest, fees, charges and related expenses paid or payable (without duplication) for that fiscal period by that Person to a lender in connection with borrowed money (including any obligations for fees, charges and related expenses payable to the issuer of any letter of credit) or the deferred purchase price of assets that are considered “interest expense” under GAAP plus (b) the portion of rent paid or payable (without duplication) for that fiscal period by that Person under Capital Lease Obligations that should be treated as interest in accordance with Financial Accounting Standards Board Statement No. 13. “Interest Payment Date” means, (a) with respect to any Base Rate Portion, the last Business Day of each calendar quarter and the Maturity Date, and (b) with respect to Eurodollar Rate Portions, (i) any date that such Eurodollar Rate Portion is prepaid in whole or in part, (ii) the last day of each Interest Period applicable to, or the maturity of, such Eurodollar Rate Portion; provided, however, that if any Interest Period or the maturity of any such Eurodollar Rate Portion exceeds three months, the date that falls three months after the beginning of such Interest Period, shall also be an Interest Payment Date, and (iii) the Maturity Date. “Interest Period” means, with respect to any Eurodollar Rate Portion, the period commencing on the date specified by Borrowers in their Request for Extension of Credit and ending one, two, three or six months thereafter, as selected by Borrowers in the Request for Extension of Credit relating thereto; provided that: (a) The first day of any Interest Period shall be a Business Day; (b) Any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless, in the case of an Eurodollar Rate Portion, such Business Day falls in another calendar month, in which case such Interest Period shall end on the immediately preceding Business Day; (c) No Interest Period shall extend beyond the Maturity Date. “Investment” means, as to any Person, any acquisition (other than an “Acquisition” as defined above) or investment by such Person, whether by means of (a) the 13
    • purchase or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, guaranty 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. “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, executive 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. “Lender” means each lender from time to time party hereto. “Lender Taxes” means, in the case of each Lender, Administrative Agent and each Eligible Assignee, and any Affiliate or Lending Office thereof: (a) taxes imposed on or measured in whole or in part by its overall net income, gross income or gross receipts or capital and franchise taxes imposed on it, by (i) any jurisdiction (or political subdivision thereof) in which it is organized or maintains its principal office or Lending Office or (ii) any jurisdiction (or political subdivision thereof) in which it is “doing business” (unless it would not be doing business in such jurisdiction (or political subdivision thereof) absent the transactions contemplated hereby), (b) any withholding taxes or other taxes based on gross income imposed by the United States of America (other than withholding taxes and taxes based on gross income resulting from or attributable to any change in any law, rule or regulation or any change in the interpretation or administration of any law, rule or regulation by any Governmental Authority) or (c) any withholding taxes or other taxes based on gross income imposed by the United States of America for any period with respect to which it has failed to provide Borrowers with the appropriate form or forms required by Section 10.18, to the extent such forms are then required by applicable Laws. “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 such Lender may from time to time notify Borrowers and Administrative Agent. “Lien” means any security interest, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge against or interest in property to secure payment of a debt or performance of an obligation or other priority or preferential arrangement of any kind or nature whatsoever, including any agreement to grant any of the foregoing, any conditional sale or other title retention agreement, any lease in the nature of a security interest, and/or the filing of or agreement to give any financing statement (other than a precautionary financing statement with respect to a lease that is not in the nature of a security 14
    • interest) under the Uniform Commercial Code or comparable Laws of any jurisdiction with respect to any Property, including the interest of a purchaser of accounts receivable. “Loan Documents” means, collectively, this Agreement, the Term Notes, the Master Subsidiary Guaranty, any Request for Extension of Credit, any Compliance Certificate, and any other agreements of any type or nature hereafter executed and delivered by Borrowers or any of their respective Subsidiaries or Affiliates to Administrative Agent or to any Lender in any way relating to or in furtherance of this Agreement, in each case either as originally executed or as the same may from time to time be supplemented, modified, amended, restated, extended or replaced. “Margin Stock” means “margin stock” as such term is defined in Regulation U of the FRB as in effect from time to time. “Master Subsidiary Guaranty” means a guaranty of the Obligations, executed by Material Domestic Subsidiaries and certain other Subsidiaries selected by RSA substantially in the form of Exhibit E. “Material Adverse Effect” means any set of circumstances or events which (a) has or could reasonably be expected to have any material adverse effect whatsoever upon the validity or enforceability of any Loan Document, (b) is or could reasonably be expected to be material and adverse to the condition (financial or otherwise), business, or operations of Borrowers and their respective Subsidiaries, taken as a whole, or (c) materially impairs or could reasonably be expected to materially impair the ability of Borrowers and their respective Subsidiaries, taken as a whole, to perform the Obligations. “Material Domestic Subsidiary” means, at any time, each Subsidiary of either Borrower where such Subsidiary is a Wholly-Owned Subsidiary of a Borrower which is created, organized or domesticated in the United States or under the laws of the United States or any state thereof and (a) the aggregate amount of such Subsidiary’s Tangible Assets exceeds 5% of the consolidated Tangible Assets of RSA and its Subsidiaries or (b) the EBITDA of such Subsidiary for the four fiscal quarters most recently ended exceeded 5% of consolidated EBITDA of RSA and its Subsidiaries for such period. “Maturity Date” means November 9, 2011. “Minimum Amount” means, with respect to each of the following actions, the following amounts set forth opposite such action (a reference to “Minimum Amount” shall also be deemed a reference to the multiples in excess thereof set forth below): 15
    • Minimum Multiples in Type of Action Minimum Amount excess of Minimum Amount Prepayment of or Conversion into, Base Rate Portions $ 250,000 $25,000 Prepayment of, Continuation of, or Conversion into, Eurodollar Rate Portions $ 250,000 $25,000 Assignments $5,000,000 “Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA. “Negative Pledge” means a Contractual Obligation that contains a covenant binding on Borrowers or any of their respective Subsidiaries that prohibits Liens on any of their Property, other than (a) any such covenant contained in a Contractual Obligation granting a Lien permitted under Section 7.1 which affects only the Property that is the subject of such permitted Lien and (b) any such covenant that does not prohibit Liens securing the Obligations. “Net Cash Proceeds” means Net Proceeds to the extent consisting of Cash. “Net Income” means, with respect to any fiscal period, the consolidated net income of RSA and its Subsidiaries for that period, determined in accordance with GAAP, consistently applied. “Net Proceeds” means, with respect to any Disposition, the gross sales proceeds received by Borrowers and their respective Subsidiaries from such Disposition (including Cash, Property and the assumption by the purchaser of any liability of Borrowers or their respective Subsidiaries) net of brokerage commissions, legal expenses, transfer and recording taxes or fees and other transactional costs payable by Borrowers and their respective Subsidiaries with respect to such Disposition and net of an amount determined in good faith by Borrowers to be the estimated amount of income taxes payable by Borrowers attributable to such Disposition. “Obligations” means all present and future obligations of every kind or nature of Borrowers or any Borrower Party at any time and from time to time owed to Administrative Agent, any Lender, any Person entitled to indemnification, or any one or more of them, under any one or more of the Loan Documents or under Permitted Swap Obligations, whether due or to become due, matured or to become mature, liquidated or unliquidated, or contingent or actual, including obligations of performance as well as obligations of payment, and including interest that accrues after the commencement of any proceeding under any Debtor Relief Law by or against Borrowers or any Subsidiary or Affiliate of Borrowers. 16
    • “Opinion of Counsel” means a favorable opinion of Kay Rustand, Vice President and General Counsel of Borrowers, counsel to Borrowers and their respective Subsidiaries, addressed to the Administrative Agent and each Lender, as to the matters contained in Sections 5.1, 5.2, 5.3, 5.4, 5.5 and 5.14 of this Agreement and such other matters concerning Borrowers, the Guarantors and the Loan Documents as the Requisite Lenders may reasonably request. “Outstanding Amount” means, as of any date, the aggregate outstanding principal amount of the Term Loan. “Outstanding Obligations” means, as of any date, the sum of the Outstanding Amount and any other Obligations outstanding under this Agreement. “Participant” has the meaning specified in Section 10.6(d). “PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto established under ERISA. “Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, which is subject to Title IV of ERISA and is maintained by RSA or its Subsidiaries or to which RSA or any of its Subsidiaries contributes or has an obligation to contribute, or in the case of a multiple employer plan (as described in Section 4064(a) of ERISA) has made contributions at any time during the immediately preceding five plan years. “Permitted Disposition” means (a) a Disposition of Cash, inventory or other assets sold, leased or otherwise disposed of in the ordinary course of business of Borrowers or any of their Subsidiaries, (b) Dispositions of inventory, or used, worn-out or surplus equipment, all in the ordinary course of business, (c) Dispositions of equipment to the extent that such equipment is exchanged for credit against the purchase price of similar replacement equipment, or the proceeds of such sale are reasonably promptly applied to the purchase price of such replacement equipment or where Borrowers or their Subsidiaries determine in good faith that the failure to replace such equipment will not be detrimental to the business of RSA or any of its Subsidiaries, (d) a Disposition to Borrowers or a Guarantor and (e) a Disposition of the assets of a Subsidiary of Borrowers to Borrowers or any Guarantor. “Permitted Liens” means: (a) inchoate Liens incident to construction on or maintenance of Real Property; or Liens incident to construction on or maintenance of Real Property now or hereafter filed of record for which adequate reserves have been set aside (or deposits made pursuant to applicable Laws) and which are being contested in good faith by appropriate proceedings and have not proceeded to judgment, provided that, by reason of nonpayment of the obligations secured by such Liens, no such Real Property is subject to a material risk of loss or forfeiture; 17
    • (b) Liens for taxes and assessments on Real Property which are not past due; or Liens for taxes and assessments on Real Property for which adequate reserves have been set aside and are being contested in good faith by appropriate proceedings and have not proceeded to judgment, provided that, by reason of nonpayment of the obligations secured by such Liens, no such Real Property is subject to a material risk of loss or forfeiture; (c) minor defects and irregularities in title, easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business which do not in any case materially detract from the value of the Property subject thereto or interfere with the ordinary conduct of the businesses of Borrowers and their respective Subsidiaries; (d) rights reserved to or vested in any Governmental Authority to control or regulate, or obligations or duties to any Governmental Authority with respect to, the use of any Real Property; (e) rights reserved to or vested in any Governmental Authority to control or regulate, or obligations or duties to any Governmental Authority with respect to, any right, power, franchise, grant, license, or permit; (f) present or future zoning laws and ordinances or other laws and ordinances restricting the occupancy, use, or enjoyment of Real Property; (g) statutory Liens, other than those described in subsections (a) or (b) above, arising in the ordinary course of business with respect to obligations which are not delinquent or are being contested in good faith, provided that, if delinquent, adequate reserves have been set aside with respect thereto and, by reason of nonpayment, no Property is subject to a material risk of loss or forfeiture; (h) covenants, conditions, and restrictions affecting the use of Real Property which in the aggregate do not materially impair the fair market value or use of the Real Property for the purposes for which it is held; (i) rights of tenants under leases and rental agreements covering Real Property entered into in the ordinary course of business of the Person owning such Real Property; (j) Liens consisting of pledges or deposits to secure obligations under workers’ compensation laws or similar legislation, including Liens of judgments thereunder which are not currently dischargeable; (k) Liens consisting of pledges or deposits of Property to secure performance in connection with operating leases made in the ordinary course of business to which Borrowers or any Subsidiary of Borrowers is a party as lessee; 18
    • (l) Liens consisting of any right of offset, or statutory bankers’ lien, on bank deposit accounts maintained in the ordinary course of business so long as such bank deposit accounts are not established or maintained for the purpose of providing such right of offset or bankers’ lien; (m) Liens consisting of deposits of Property to secure statutory obligations of Borrowers or any Subsidiary of Borrowers in the ordinary course of its business; (n) Liens consisting of deposits of Property to secure (or in lieu of) surety, appeal or customs bonds in proceedings to which Borrowers or any Subsidiary of Borrowers is a party in the ordinary course of its business; (o) Liens (other than judgment Liens resulting in an Event of Default under Section 8.1(h)) created by or resulting from any litigation or legal proceeding involving Borrowers or any Subsidiary of Borrowers in the ordinary course of its business which is currently being contested in good faith by appropriate proceedings, provided that adequate reserves have been set aside and no Property is subject to a material risk of loss or forfeiture; (p) other non-consensual Liens incurred in the ordinary course of business but not in connection with an extension of credit, which do not in the aggregate, when taken together with all other Liens, materially impair the value or use of the Property of Borrowers and their respective Subsidiaries, taken as a whole; (q) Liens consisting of (i) an interest (other than a legal or equitable co-ownership interest, an option or right to acquire a legal or equitable co-ownership interest and any interest of a ground lessor under a ground lease), that does not materially impair the value or use of Property for the purposes for which it is or may reasonably be expected to be held, (ii) an option or right to acquire a Lien that would be a Permitted Lien, (iii) the subordination of a lease or sublease in favor of a financing entity and (iv) a license, or similar right, of or to Intangible Assets granted in the ordinary course of business; and (r) Liens and Negative Pledges securing purchase money obligations, capital leases and Synthetic Leases incurred after the Closing Date as provided in Section 7.1(f). “Permitted Swap Obligations” means all obligations (contingent or otherwise) of Borrowers or any of their respective Subsidiaries existing or arising under Swap Contracts, provided that each of the following criteria is satisfied: (a) such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risks associated with liabilities, commitments or assets held or reasonably anticipated by such Person, or changes in the value of securities issued by such Person in conjunction with a securities repurchase program not otherwise prohibited hereunder, and not for purposes of speculation or 19
    • taking a “market view;” and (b) such Swap Contracts do not contain (i) any provision (“walk-away” provision) exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party, or (ii) any provision creating or permitting the declaration of an event of default, termination event or similar event upon the occurrence of a breach hereof (other than an Event of Default under Section 8.1). “Person” means any individual or entity, including a trustee, corporation, limited liability company, general partnership, limited partnership, joint stock company, trust, estate, unincorporated organization, business association, firm, joint venture, Governmental Authority, or other entity. “Pro Rata Share” means, with respect to each Lender, the percentage of the Aggregate Commitments set forth opposite the name of that Lender on Schedule 2.1, as such share may be adjusted as contemplated herein. “Property” or “Properties” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible. “Real Property” means, as of any date of determination, all real Property then or theretofore owned, leased or occupied by Borrowers or any of their respective Subsidiaries. “Register” has the meaning specified in Section 10.6(c). “Regulations T, U and X” means Regulations T, U and X, as at any time amended, of the FRB, or any other regulations in substance substituted therefor. “Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates. “Reportable Event” means, any of the events set forth in Section 4043(c) of ERISA or the regulations thereunder, other than any such event for which the 30-day notice requirement under ERISA has been waived in regulations issued by the PBGC. “Request for Extension of Credit” means a written request substantially in the form of Exhibit A or telephonic request followed by such written request, duly completed and signed by a Responsible Officer of each Borrower, in each case delivered to Administrative Agent by Requisite Notice. “Requisite Lenders” means, as of any date of determination, Lenders whose Voting Percentages aggregate more than 50%. “Requisite Notice” means, unless otherwise provided herein, (a) irrevocable written notice to the intended recipient or (b) irrevocable telephonic notice to the intended recipient, promptly followed by a written notice to such recipient. Such notices shall be (i) delivered or made to such recipient at the address, telephone number or facsimile number set forth on Schedule 10.2 or in the Administrative Questionnaire or as otherwise designated by such 20
    • recipient by Requisite Notice to Administrative Agent and (ii) if made by a Borrower Party, given or made by a Responsible Officer. Any written notice shall be in the form, if any, prescribed in the applicable section herein and may be given by facsimile provided such facsimile is promptly confirmed by a telephone call to such recipient. “Requisite Time” means, with respect to any of the actions listed below, the time set forth opposite such action (all times are California time) on or prior to the date (the “relevant date”) of such action: Action Time Date Borrowing or prepayment of or conversion into Base Rate 9:00 a.m. Relevant date Portions Borrowing of, continuation of, prepayment of or conversion into 10:00 a.m. 3 Business Days prior to relevant date Eurodollar Rate Portions Funds made available by Lenders or Borrowers to 11:00 a.m. Relevant date Administrative Agent “Responsible Officer” means the chief executive officer, president, chief financial officer, corporate controller or treasurer of a Borrower Party, or any other officer or partner having substantially the same authority and responsibility. Any document or certificate hereunder that is signed or executed by a Responsible Officer of a Borrower Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Borrower Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Borrower Party. “RSA” means Reliance Steel & Aluminum Co., a California corporation. “RSAC Management” means RSAC Management Corp., a California corporation. “Shareholders’ Equity” means, as of any date of determination for RSA and its Subsidiaries on a consolidated basis, shareholders’ equity as of that date determined in accordance with GAAP. “SPC” has the meaning specified in Section 10.6(i). “Subsidiary” means, as of any date of determination and with respect to any Person, any corporation, limited liability company or partnership (whether or not, in either case, characterized as such or as a “joint venture”), whether now existing or hereafter organized or 21
    • acquired: (a) in the case of a corporation or limited liability company, of which a majority of the securities having ordinary voting power for the election of directors or other governing body (other than securities having such power only by reason of the happening of a contingency) are at the time beneficially owned by such Person and/or one or more Subsidiaries of such Person, or (b) in the case of a partnership, of which a majority of the partnership or other ownership interests are at the time beneficially owned by such Person and/or one or more of its Subsidiaries. “Swap Contract” means a written agreement between either Borrower and one or more financial institutions providing for “swap”, “cap”, “collar” or other interest rate protection with respect to any Indebtedness. “Synthetic Lease” means, with respect to any Person, (a) a so-called synthetic lease, or (b) an agreement for the use or possession of property creating obligations which 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). “Tangible Assets” means, with respect to any Person, all of such Person’s assets determined in accordance with GAAP other than Intangible Assets. “Term Loan” means the extensions of credit to Borrowers under Section 2.1. “Term Note” means, without differentiation, each promissory note made by Borrowers to a Lender evidencing such Lender’s Pro Rata Share of the Term Loan, substantially in the form of Exhibit C, either as originally executed or as the same may from time to time be supplemented, modified, amended, renewed, extended or replaced (collectively, the “Term Notes”). “to the best knowledge of” means, when modifying a representation, warranty or other statement of any Person, that the fact or situation described therein is known by the Person (or, in the case of a Person other than a natural Person, known by a Responsible Officer) making the representation, warranty or other statement, or with the exercise of reasonable due diligence under the circumstances (in accordance with the standard of what a reasonable Person in similar circumstances would have done) would have been known by the Person (or, in the case of a Person other than a natural Person, would have been known by a Responsible Officer). “Total Leverage Ratio” means, as of the last day of any Fiscal Quarter (including the last day of a Fiscal Quarter which is also the last day of a Fiscal Year), the ratio, calculated on a consolidated basis for RSA and its Subsidiaries, of (a) Funded Debt to (b) the sum of Funded Debt plus Shareholders’ Equity. “type” means (a) a Base Rate Portion or (b) an Eurodollar Rate Portion with an Interest Period of one, two, three, or six months thereafter, as selected by Borrowers in the Request for Extension of Credit relating thereto. “Type” means, in respect of all or any portion of the Term Loan, its character as such. 22
    • “Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year. “Voting Percentage” means, as to any Lender, (a) on or prior to the termination of the Aggregate Commitments, such Lender’s Pro Rata Share and (b) at any time after the termination of the Aggregate Commitments, the percentage (carried out to the ninth decimal place) which (i) such Lender’s Pro Rata Share of the Term Loan then comprises of (ii) the Outstanding Amount of the Term Loan; provided, however, that if any Lender has failed to fund any portion of its Pro Rata Share of the Term Loan required to be funded by it hereunder, such Lender’s Voting Percentage shall be deemed to be zero, and the respective Pro Rata Shares and Voting Percentages of the other Lenders shall be recomputed for purposes of this definition and the definition of “Requisite Lenders” without regard to such Lender’s Commitment or the Outstanding Amount of such Defaulting Lender’s Pro Rata Share of the Term Loan. “Wholly-Owned Domestic Subsidiary” means a Wholly-Owned Subsidiary of either Borrower which is created, organized or domesticated in the United States or under the laws of the United States or any state thereof. “Wholly-Owned Subsidiary” means, at any time, any Subsidiary one hundred percent (100%) of all of the equity interests and voting interests of which are owned by any one or more of Borrowers and their respective Wholly-Owned Subsidiaries at such time. 1.2 Use of Defined Terms. Any defined term used in the plural shall refer to all members of the relevant class, and any defined term used in the singular shall refer to any one or more of the members of the relevant class. 1.3 Accounting Terms. All accounting terms not specifically defined in this Agreement shall be construed in conformity with, and all financial data required to be submitted by this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, except as otherwise specifically prescribed herein. In the event that GAAP changes during the term of this Agreement such that the financial covenants would then be calculated in a different manner or with different components, (a) Borrowers and Lenders agree to amend this Agreement in such respects as are necessary to conform those covenants as criteria for evaluating Borrowers’ financial condition to substantially the same criteria as were effective prior to such change in GAAP and (b) Borrowers shall be deemed to be in compliance with the covenants contained in the aforesaid Sections during the 90-day period following any such change in GAAP if and to the extent that Borrowers would have been in compliance therewith under GAAP as in effect immediately prior to such change. 1.4 Rounding. Any financial ratios required to be maintained by Borrowers pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed in this Agreement and rounding the result up or down to the nearest number 23
    • (with a rounding up if there is no nearest number) to the number of places by which such ratio is expressed in this Agreement. 1.5 Exhibits and Schedules. All Exhibits and Schedules to this Agreement, either as originally existing or as the same may from time to time be supplemented, modified or amended, are incorporated herein by this reference. A matter disclosed on any Schedule shall be deemed disclosed on all Schedules. 1.6 References to “RSA and its Subsidiaries” or “Borrowers and their respective Subsidiariesquot;. Any reference herein to (i) “RSA and its Subsidiaries” or the like shall refer solely to RSA during such times, if any, as RSA shall have no Subsidiaries, or (ii) “Borrowers and their respective Subsidiaries” or the like shall refer solely to Borrowers during such times, if any, as Borrowers shall have no Subsidiaries. 1.7 Miscellaneous Terms. The term “or” is disjunctive; the term “and” is conjunctive. The term “shall” is mandatory; the term “may” is permissive. Masculine terms also apply to females; feminine terms also apply to males. The term “including” is by way of example and not limitation. Section 2 THE TERM LOAN 2.1 Term Loan. (a) Subject to the terms and conditions set forth in this Agreement, each Lender severally agrees, simultaneously with the other Lenders, to make loans to Borrowers on the Closing Date in an amount not to exceed such Lender’s Pro Rata Share of the Aggregate Commitments. 2.2 Borrowing, Conversions and Continuations of Portions. (a) The borrowing of the Term Loan and the Conversion or Continuation of Base Rate Portions and Eurodollar Rate Portions shall be made by a duly completed Request for Extension of Credit therefor by Requisite Notice to Administrative Agent not later than the Requisite Time therefor. All portions of the Term Loan shall bear interest as a Base Rate Portion unless otherwise properly and timely otherwise designated as a Eurodollar Rate Portion as set forth in the preceding sentence. (b) Following receipt of the initial Request for Extension of Credit, Administrative Agent shall notify each Lender of its Pro Rata Share thereof by Requisite Notice, and, thereafter, each Lender shall make the funds for the Term Loan available to Administrative Agent at Administrative Agent’s Office not later than the Requisite Time therefor on the Business Day specified in such Request for Extension of Credit. Upon satisfaction or waiver of the applicable conditions set forth in Section 4, all funds so received shall be made available to Borrowers in like funds received. 24
    • (c) Administrative Agent shall promptly notify Borrowers and Lenders of the Eurodollar Rate applicable to any Eurodollar Rate Portion upon determination thereof. (d) Unless Administrative Agent and the Requisite Lenders otherwise consent, no more than ten different Interest Periods shall be in effect in respect of the Term Loan at any one time. (e) No Eurodollar Rate Portions may be continued as such during the existence of an Event of Default. During the existence of an Event of Default, the Requisite Lenders may determine that any or all of the then outstanding Eurodollar Rate Portions shall be Converted to Base Rate Portions. Such Conversion shall be effective upon notice to Borrowers from Administrative Agent and shall continue so long as such Event of Default continues to exist. 2.3 Prepayments. (a) Upon Requisite Notice to Administrative Agent not later than the Requisite Time therefor, Borrowers may at any time and from time to time voluntarily prepay the Term Loan in the Minimum Amount therefor. Administrative Agent will promptly notify each Lender thereof and of such Lender’s Pro Rata Share of such prepayment. Any prepayment of a Eurodollar Rate Portion shall be accompanied by all accrued interest thereon, together, if applicable because not at the end of an Interest Period, with the costs set forth in Section 3.6. Each prepayment of the Term Loan shall be applied in the inverse order of maturity to the principal repayment installments thereof payable in accordance with Section 2.5. 2.4 Termination of Commitments. The aggregate Commitments, other than the Commitment of a Defaulting Lender, shall automatically and permanently be reduced to zero on the date of the borrowing of the Term Loan. 2.5 Repayments. Borrowers shall pay to Administrative Agent for the accounts of the Lenders a portion of the principal amount of the Term Loan on the last Business Day of each calendar quarter, commencing on December 31, 2008, in an aggregate amount equal to $18,750,000 (which amount shall be reduced as a result of the application of prepayments of principal in accordance with the order of priority set forth in Section 2.3); and any amount of the Term Loan remaining outstanding shall be repaid in one final installment on the Maturity Date. 2.6 Interest. (a) Subject to subsection (b), Borrowers jointly and severally agree to pay interest on the unpaid principal amount of the Term Loan from the date borrowed until paid in full (whether by acceleration or otherwise) (i) in the case of Base Rate Portions at a rate per annum equal to the Base Rate plus the Applicable Margin, and (ii) in the case of Eurodollar Rate Portions, the Eurodollar Rate for the applicable Interest Period plus the Applicable Margin. 25
    • (b) If any amount payable by Borrowers under any Loan Document is not paid when due (without regard to any applicable grace periods), it shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws. Upon the request of the Requisite Lenders, while any Event of Default exists, Borrowers shall pay interest on the principal amount of all Outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws. Accrued and unpaid interest on past due amounts including, without limitation, interest on past due interest shall be compounded monthly, on the last day of each calendar month, to the fullest extent permitted by applicable Laws and payable upon demand. (c) Interest on the principal balance of the Term Loan that remains outstanding from day to day shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment and after the commencement of any proceeding under any Debtor Relief Law. 2.7 Fees. Borrowers shall pay to the Arranger and Administrative Agent for their own respective accounts (or, to the extent specified in the Fee Letter, for the account of Lenders) fees in the amounts and at the times specified in the Fee Letter. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever. 2.8 Computation of Interest and Fees. (a) Computation of interest on Base Rate Portions shall be calculated on the basis of a year of 365 or 366 days, as the case may be, and the actual number of days elapsed; computation of interest on Eurodollar Rate Portions and all fees under this Agreement shall be calculated on the basis of a year of 360 days and the actual number of days elapsed, which results in a higher yield to Lenders than a method based on a year of 365 or 366 days. Interest shall accrue on the Term Loan for the day on which it is made; interest shall not accrue on the Term Loan, or any portion thereof, for the day on which the Term Loan or such portion is paid. Any repayment of all or any portion of the Term Loan on the same day on which it is made shall bear interest for one day. Notwithstanding anything in this Agreement to the contrary, interest in excess of the maximum amount permitted by applicable Laws shall not accrue or be payable hereunder, and any amount paid as interest hereunder which would otherwise be in excess of such maximum permitted amount shall instead be treated as a payment of principal. (b) If, as a result of any restatement of or other adjustment to the financial statements of Borrowers or for any other reason, Borrowers or the Lenders determine that (i) the Total Leverage Ratio as calculated by Borrowers as of any applicable date was inaccurate and (ii) a proper calculation of the Total Leverage Ratio would have resulted in higher pricing for such period, Borrowers shall immediately and retroactively be obligated to pay to Administrative Agent for the account of the applicable Lenders, promptly following, and in any event within five (5) days after, demand by Administrative Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect to either Borrower under the Bankruptcy Code of the United States, automatically and without further action by 26
    • Administrative Agent or any Lender) an amount equal to the excess of the amount of interest that should have been paid for such period over the amount of interest actually paid for such period. This Section shall not limit the rights of Administrative Agent or any Lender, as the case may be, under Section 2.6 or Section 8. Subject to any applicable statute of limitations, Borrowers’ obligations under this Section shall survive the termination of the Aggregate Commitments and the repayment of all Obligations hereunder. 2.9 Manner and Treatment of Payments among Lenders, Borrowers and Administrative Agent. (a) All payments to be made by Borrowers shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by Borrowers or any Lender hereunder shall be made to Administrative Agent at Administrative Agent’s Office not later than the Requisite Time for such type of payment in Dollars in immediately available funds. The Administrative Agent will promptly distribute to each Lender from any such payment made by either Borrower for the account of Lenders such Lender’s Pro Rata Share (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office. All payments received after such Requisite Time shall be deemed received on the next succeeding Business Day. All payments shall be made in immediately available funds in lawful money of the United States of America. (b) Upon satisfaction of any applicable terms and conditions set forth herein, Administrative Agent shall promptly make any amounts received in accordance with the prior subsection available in like funds received as follows: (i) if payable to Borrowers, by crediting the Designated Deposit Account, and (ii) if payable to any Lender, by wire transfer to such Lender at the address specified in Schedule 10.2 or the Administrative Questionnaire. Administrative Agent’s determination, or any Lender’s determination not contradictory thereto, of any amount payable hereunder shall be conclusive in the absence of manifest error. (c) Subject to the definition of “Interest Period,” if any payment to be made by Borrowers or any other Borrower Party shall come due on a day other than a Business Day, payment shall instead be considered due on the next succeeding Business Day and the extension of time shall be reflected in computing interest and fees. (d) Unless Borrowers or any Lender have notified Administrative Agent prior to the time any payment to be made by them is due, that they do not intend to remit such payment, Administrative Agent may, in its discretion, assume that Borrowers or Lender, as the case may be, have timely remitted such payment and may, in its discretion and in reliance thereon, make available such payment to the Person entitled thereto. If such payment was not in fact remitted to Administrative Agent, then: (i) if Borrowers failed to make such payment, each Lender shall forthwith on demand repay to Administrative Agent the amount of such assumed payment made available to such Lender, together with interest thereon in respect of each day from and including the date such 27
    • amount was made available by Administrative Agent to such Lender to the date such amount is repaid to Administrative Agent at the Federal Funds Rate; and (ii) if any Lender failed to make such payment, Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender. If such Lender does not pay such corresponding amount forthwith upon Administrative Agent’s demand therefor, Administrative Agent promptly shall notify Borrowers, and Borrowers shall pay such corresponding amount to Administrative Agent. Administrative Agent also shall be entitled to recover from such Lender interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by Administrative Agent to Borrowers to the date such corresponding amount is recovered by Administrative Agent, (A) from such Lender at a rate per annum equal to the daily Federal Funds Rate, and (B) from Borrowers, at a rate per annum equal to the interest rate applicable to the amount so borrowed. Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Commitments or to prejudice any rights which Administrative Agent or Borrowers may have against any Lender as a result of any default by such Lender hereunder. 2.10 Funding Sources. Nothing in this Agreement shall be deemed to obligate any Lender to obtain the funds for the Term Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for the Term Loan in any particular place or manner. 2.11 Automatic Deduction. On each date when the payment of any principal, interest or fees are due hereunder or under any Term Note, Borrowers agree to maintain on deposit in an ordinary checking account maintained by Borrowers with Administrative Agent (as such account shall be designated by Borrowers in a written notice to Administrative Agent from time to time, the “Borrowers Account”) an amount sufficient to pay such principal, interest or fees in full. Borrowers hereby authorize Administrative Agent (i) to deduct automatically all interest or fees when due hereunder or under the Term Notes from the Borrowers Account, and (ii) if and to the extent any payment of principal under this Agreement or any other Loan Document is not made when due, to deduct automatically any such amount from any or all of the accounts of Borrowers maintains with Administrative Agent. Administrative Agent agrees to provide timely notice to Borrowers of any automatic deduction made pursuant to this Section 2.11. 2.12 Obligations of Lenders Several. The obligations of Lenders hereunder to fund their respective Pro Rata Shares of the Term Loan and to make payments pursuant to Section 10.4(c) are several and not joint. The failure of any Lender to fund its Pro Rata Share of the Term Loan or to make any payment under Section 10.4(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no 28
    • Lender shall be responsible for the failure of any other Lender to fund its Pro Rata Share of the Term Loan or to make its payment under Section 10.4(c). 2.13 Sharing of Payments by Lenders. If any Lender, by exercising any right of setoff or counterclaim or otherwise, obtains payment in respect of any principal of or interest on the Term Loan resulting in such Lender’s receiving payment of a proportion of the Term Loan and accrued interest thereon greater than its Pro Rata Share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Term Loan, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with their Pro Rata Shares; provided that: (i) if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and (ii) the provisions of this Section shall not be construed to apply to (x) any payment by Borrowers pursuant to and in accordance with the express terms of this Agreement or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in the Term Loan to any assignee or participant other than to Borrowers or any of their Subsidiaries (as to which the provisions of this Section apply). Section 3 TAXES, YIELD PROTECTION AND ILLEGALITY 3.1 Taxes. (a) Payments Free of Taxes. Each payment of any amount payable by Borrowers or any other Borrower Party under this Agreement or any other Loan Document shall be made free and clear of, and without reduction by reason of, any Applicable Taxes. To the extent that Borrowers are obligated by applicable Laws to make any deduction or withholding on account of Applicable Taxes or Lender Taxes from any amount payable to any Lender under this Agreement, Borrowers shall promptly notify Administrative Agent of such fact and (a) make such deduction or withholding and pay the same to the relevant Governmental Authority and (b) in case of an Applicable Tax, pay such additional amount directly to that Lender as is necessary to result in that Lender receiving a net after-Applicable Tax amount equal to the amount to which that Lender would have been entitled under this Agreement absent such deduction or withholding. Within 30 days after the date of any payment by Borrowers of any amounts pursuant to this section, Borrowers shall furnish to Administrative Agent the original or a certified copy of a receipt evidencing payment thereof, or other evidence of payment satisfactory to Administrative Agent. 29
    • (b) Indemnification by Borrowers. Borrowers shall indemnify Administrative Agent and each Lender, within 10 days after demand therefor, for the full amount of any Applicable Taxes (including for the full amount of any Applicable Taxes imposed or asserted on or attributable to amounts payable under this paragraph) paid by Administrative Agent or such Lender, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Applicable Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Borrowers by a Lender (with a copy to Administrative Agent), or by Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error. 3.2 Increased Costs. If any Lender reasonably determines after the Closing Date that any Laws or guidelines (whether or not having the force of law) or compliance therewith, have the effect of increasing its cost of agreeing to make or making, to issue or participating in, funding or maintaining its Pro Rata Share of the Term Loan, then Borrowers shall, upon demand by such Lender (with a copy of such demand to Administrative Agent), pay to Administrative Agent for the account of such Lender additional amounts sufficient to compensate such Lender for such increased cost. 3.3 Capital Adequacy. If any Lender determines after the Closing Date that any Laws regarding capital adequacy, or compliance by such Lender (or its Lending Office) or any corporation controlling Lender, with any request, guideline or directive regarding capital adequacy (whether or not having the force of law) of any Governmental Authority not imposed as a result of such Lender’s or such corporation’s failure to comply with any other Laws affects or would affect the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender and (taking into consideration such Lender’s or such corporation’s policies with respect to capital adequacy and such Lender’s desired return on capital) determines in good faith that the amount of such capital is increased, or the rate of return on capital is reduced, as a consequence of its obligations under this Agreement, then upon demand of such Lender (with a copy to Administrative Agent), Borrowers shall pay to such Lender, from time to time as specified in good faith by such Lender, additional amounts sufficient to compensate such Lender in light of such circumstances, to the extent reasonably allocable to such obligations under this Agreement. 3.4 Illegality. If any Lender determines after the Closing Date that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make or maintain Eurodollar Rate Portions, or materially restricts the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the applicable offshore Dollar market, or to determine or charge interest rates based upon the Eurodollar Rate, then, on notice thereof by such Lender to Borrowers through Administrative Agent, any obligation of such Lender to make or maintain Eurodollar Rate Portions shall be suspended until such Lender notifies Administrative Agent and Borrowers that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, Borrowers shall, upon demand from such Lender (with a copy to Administrative Agent), Convert all Eurodollar Rate Portions of such Lender, either on the last day of the Interest Period thereof, if such Lender may lawfully continue to maintain such Eurodollar Rate Portions to such day, or immediately, if 30
    • such Lender may not lawfully continue to maintain such Eurodollar Rate Portions. Each Lender agrees to designate a different Lending Office if such designation will avoid the need for such notice and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender. 3.5 Inability to Determine Rates. If, in connection with any Request for Extension of Credit, Administrative Agent reasonably determines that (a) Dollar deposits are not being offered to Lenders in the applicable offshore Dollar market for the applicable amount and applicable Interest Period, (b) adequate and reasonable means do not exist for determining the Eurodollar Rate, or (c) such Eurodollar Rate does not adequately and fairly reflect the cost to Lenders of funding or maintaining the Term Loan, Administrative Agent will promptly so notify Borrowers and each Lender. Thereafter, the obligation of Lenders to maintain all or any portion of the Term Loan as a Eurodollar Rate Portion shall be suspended until Administrative Agent revokes such notice, and the Term Loan will bear interest calculated based on the Base Rate. 3.6 Breakfunding Costs. Upon Continuation, Conversion, payment or prepayment of any Eurodollar Rate Portion on a day other than the last day in the applicable Interest Period (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise and including any repayment pursuant to Section 2.5 and any action required under this Section 3), or upon the failure of Borrowers (for a reason other than the failure of a Lender to fund its Pro Rata Share of the Term Loan) to borrow, Continue or Convert any Eurodollar Rate Portion on the date or in the amount specified in any Request for Extension of Credit, then Borrowers shall, upon demand made by any Lender (with a copy to Administrative Agent), reimburse each Lender and hold each Lender harmless from any loss or expense which Lender may sustain or incur as a consequence thereof, including any such loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain its Pro Rata Share of the Term Loans or from fees payable to terminate the deposits from which such funds were obtained. 3.7 Matters Applicable to all Requests for Compensation. (a) Administrative Agent and any Lender shall provide reasonable detail to Borrowers regarding the manner in which the amount of any payment to Administrative Agent or that Lender under this Section 3 has been determined, concurrently with demand for such payment. Administrative Agent’s or any Lender’s determination of any amount payable under this Section 3 shall be conclusive in the absence of manifest error. (b) For purposes of calculating amounts payable under this Section 3 the Eurodollar Rate Portion shall be deemed to have been funded at the applicable interest rate set forth in the definition thereof whether or not such portion was, in fact, so funded. (c) All of Borrowers’ obligations under this Section 3 shall survive termination of the Aggregate Commitments and payment in full of all Outstanding Obligations hereunder. 31
    • Section 4 CONDITIONS 4.1 Basic Closing Conditions. The obligation of each Lender to fund its Pro Rata Share of the Term Loan is subject to the following conditions precedent, each of which shall be satisfied prior to the making of the Term Loan (unless all of Lenders, in their sole and absolute discretion, shall agree otherwise): (a) Administrative Agent shall have received all of the following, each of which shall be originals unless otherwise specified, each properly executed by a Responsible Officer of each Borrower (except in the case of the Master Subsidiary Guaranty under subsection (iii)), each dated as of the Closing Date or, in the case of the documents required under subsection (iv) below, as of a recent date, and each in form and substance satisfactory to Administrative Agent, each of the Lenders, and their respective legal counsel (unless otherwise specified or, in the case of the date of any of the following, unless Administrative Agent otherwise agrees or directs): (i) at least one executed counterpart of this Agreement, together with arrangements satisfactory to Administrative Agent for additional executed counterparts of this Agreement, sufficient in number for distribution to each Lender and Borrowers; (ii) Term Notes executed by Borrowers in favor of each Lender requesting a Term Note, each in a principal amount equal to that Lender’s Pro Rata Share; (iii) the Master Subsidiary Guaranty executed by each Guarantor; (iv) with respect to Borrowers and each Guarantor, such documentation as may be required to establish the due organization, valid existence and good standing of Borrowers and each such Guarantor, its qualification to engage in business in each jurisdiction in which it is engaged in business or required to be so qualified (where failure to be qualified could reasonably be expected to result in a Material Adverse Effect), its authority to execute, deliver and perform any Loan Documents to which it is a party, the identity, authority and capacity of each Responsible Officer thereof authorized to act on its behalf, including certified copies of articles of incorporation and amendments thereto, bylaws and amendments thereto, certificates of good standing and/or qualification to engage in business, tax clearance certificates, certificates of corporate resolutions, incumbency certificates, certificates of Responsible Officers, and the like; (v) the Opinion of Counsel; 32
    • (vi) a certificate signed by a Responsible Officer certifying that (i) the conditions specified in Sections 4.1(d) and 4.1(e) have been satisfied, (ii) there shall not have occurred a material adverse change since December 31, 2007 in the business, assets, liabilities (actual or contingent), operations, or condition (financial or otherwise) of Borrowers and their respective Subsidiaries taken as a whole; (vii) a duly completed Compliance Certificate as of the last day of the Fiscal Quarter of RSA and its Subsidiaries on a consolidated basis ended on June 30, 2008, signed by a Responsible Officer of RSA; and (viii) such other assurances, certificates, documents, consents or opinions as Lenders or Administrative Agent reasonably may require. (b) Any fees required to be paid on or before the Closing Date shall have been paid. (c) Attorney Costs of Bank of America to the extent invoiced prior to or on the Closing Date, plus such additional amounts of Attorney Costs as shall constitute Bank of America’s reasonable estimate of Attorney Costs incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not hereafter preclude final settling of accounts between Borrowers and Bank of America) shall have been paid. (d) The representations and warranties of Borrowers contained in Section 5 shall be true and correct in all material respects as of the Closing Date. (e) Borrowers and any other Borrower Parties shall be in compliance with all the terms and provisions of the Loan Documents, and giving effect to the Term Loan no Default or Event of Default shall have occurred and be continuing. Without limiting the generality of the provisions of Section 9.4, for purposes of determining compliance with the conditions specified in this Section 4.1, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto. 4.2 Additional Conditions. The obligation of each Lender to fund its Pro Rata Share of the Term Loan is subject to the following additional conditions precedent: (a) no Default or Event of Default has occurred and is continuing, or would result from the Term Loan; (b) Administrative Agent shall have timely received a duly completed Request for Extension of Credit by Requisite Notice by the Requisite Time therefor. 33
    • Section 5 REPRESENTATIONS AND WARRANTIES Borrowers, jointly and severally, represent and warrant to Administrative Agent and Lenders that: 5.1 Existence and Qualification; Power; Compliance With Laws. Each Borrower and each of its respective Subsidiaries is a corporation duly formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation. Each Borrower and each of its respective Subsidiaries is duly qualified or registered to transact business and is in good standing in each other jurisdiction in which the conduct of its business or the ownership or leasing of its Properties makes such qualification or registration necessary, except where the failure so to qualify or register and to be in good standing would not constitute a Material Adverse Effect. Each Borrower and each of its respective Subsidiaries has all requisite corporate power and authority to conduct its business, to own and lease its Properties and to execute and deliver each Loan Document to which it is a party and to perform its Obligations. All outstanding shares of capital stock of each Borrower and each of its respective Subsidiaries are duly authorized, validly issued, fully paid and non-assessable, and no holder thereof has any enforceable right of rescission under any applicable state or federal securities Laws. Each Borrower and each of its respective Subsidiaries is in compliance with all Laws and other legal requirements applicable to its business, has obtained all authorizations, consents, approvals, orders, licenses and permits from, and has accomplished all filings, registrations and qualifications with, or obtained exemptions from any of the foregoing from, any Governmental Authority that are necessary for the transaction of its business, except where the failure so to comply, file, register, qualify or obtain exemptions does not constitute a Material Adverse Effect. 5.2 Authority; Compliance With Other Agreements and Instruments and Government Regulations. The execution, delivery and performance by Borrowers and each of their respective Subsidiaries of the Loan Documents to which it is a party have been duly authorized by all necessary corporate action, and do not and will not: (a) Require any consent or approval not heretofore obtained of any partner, director, stockholder, security holder or creditor of such party where the failure to obtain such consent or approval could reasonably be expected to have a Material Adverse Effect; (b) Violate or conflict with any provision of such party’s charter, articles of incorporation or bylaws, as applicable, as amended; (c) Result in or require the creation or imposition of any Lien upon or with respect to any Property now owned or leased or hereafter acquired by such party that is not permitted under Section 7.1; (d) Violate any Laws applicable to such party where such violation could reasonably be expected to have a Material Adverse Effect; or 34
    • (e) Result in a breach of or constitute a default under, or cause or permit the acceleration of any obligation owed under, any indenture or loan or credit agreement or any other Contractual Obligation to which such party is a party or by which such party or any of its Property is bound or affected; 5.3 No Governmental Approvals or Other Consents Required. No authorization, consent, approval, order, license or permit from, or filing, registration or qualification with, any Governmental Authority or any other Person is or will be necessary or required to authorize or permit under applicable Laws the execution, delivery and performance by, or enforcement against, Borrowers and their respective Subsidiaries of the Loan Documents to which it is a party. 5.4 Binding Obligations. Each of the Loan Documents to which Borrowers or any Subsidiary thereof is a party will, when executed and delivered by such party, constitute the legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms, except as enforcement may be limited by Debtor Relief Laws or equitable principles relating to the granting of specific performance and other equitable remedies as a matter of judicial discretion. 5.5 Litigation. Except for (a) any matter fully covered as to subject matter and amount (subject to applicable deductibles and retentions) by insurance for which the insurance carrier has not asserted lack of subject matter coverage or reserved its right to do so, (b) any matter, or series of related matters, involving a claim against Borrowers or any Subsidiary thereof of less than $20,000,000, (c) matters of an administrative nature not involving a claim or charge against Borrowers or any of their respective Subsidiaries and (d) matters set forth in Schedule 5.5, there are no actions, suits, proceedings or investigations pending as to which Borrowers or any of their respective Subsidiaries have been served or have received notice or, to the best knowledge of Borrowers, threatened against or affecting Borrowers or any of their respective Subsidiaries or any Property of any of them before any Governmental Authority, which if adversely determined would have a Material Adverse Effect. 5.6 No Default. No event has occurred and is continuing that is a Default or Event of Default. 5.7 ERISA Compliance. (a) Each Pension Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state law. Each Pension Plan which is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the United States Internal Revenue Service or an application for such a letter is currently being processed by the United States Internal Revenue Service with respect thereto and, to the best knowledge of Borrowers, nothing has occurred which would prevent, or cause the loss of, such qualification. Borrowers and each ERISA Affiliate have made all required contributions to any Pension Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Pension Plan. 35
    • (b) There are no pending or, to the best knowledge of Borrowers, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Pension Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Pension Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect. (c) (i) No ERISA Event has occurred or is reasonably expected to occur where the related costs, expenses and liabilities could reasonably be expected to exceed $35,000,000; (ii) no Pension Plan has any Unfunded Pension Liability, other than Unfunded Pension Liability which, when aggregated with all Unfunded Pension Liability of all other Pension Plans, does not exceed $35,000,000 in the aggregate at any time; (iii) neither Borrowers nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither Borrowers nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither Borrowers nor any ERISA Affiliate has engaged in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA. 5.8 Use of Proceeds; Margin Regulations. No part of the proceeds of the Term Loan will be used to purchase or carry, or to extend credit to others for the purpose of purchasing or carrying, any Margin Stock in violation of Regulations T, U and X. Margin Stock does not constitute more than 5% of the value of the combined assets of RSA and its Subsidiaries and RSA does not have any present intention that Margin Stock will constitute more than 5% of the value of such assets. 5.9 Title to Property. Borrowers and their respective Subsidiaries have valid title to the Property reflected in the balance sheet described in Section 5.12(a), other than items of Property which are immaterial to Borrowers and their Subsidiaries, taken as a whole, and Property subsequently sold or disposed of in the ordinary course of business, free and clear of all Liens, other than Liens described in Schedule 5.9 or permitted by Section 7.1. 5.10 Intangible Assets. Borrowers and their respective Subsidiaries own, or possess the right to use to the extent necessary in their respective businesses, all material trademarks, trade names, copyrights, patents, patent rights, computer software, licenses and other Intangible Assets that are used in the conduct of their businesses as now operated, and no such Intangible Asset, to the best knowledge of Borrowers, conflicts with the valid trademark, trade name, copyright, patent, patent right or Intangible Asset of any other Person to the extent that such conflict constitutes a Material Adverse Effect. 5.11 Tax Liability. Borrowers and their respective Subsidiaries have filed all tax returns which are required to be filed, and have paid, or made provision for the payment of, all taxes with respect to the periods, Property or transactions covered by said returns, or pursuant to any assessment received by Borrowers or any of their respective Subsidiaries, except (a) such 36
    • taxes, if any, as are being contested in good faith by appropriate proceedings and as to which adequate reserves have been established and maintained and (b) immaterial taxes so long as no material item or portion of Property of Borrowers or any of their respective Subsidiaries is in jeopardy of being seized, levied upon or forfeited. 5.12 Financial Statements. (a) The audited consolidated balance sheet dated December 31, 2007, and the quarterly consolidated balance sheets dated [June 30, 2008], of RSA and its Subsidiaries, and the related consolidated statements of income or operations, Shareholders’ Equity and cash flows for the Fiscal Year or Fiscal Quarter, as applicable, ended on those dates (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, (ii) fairly present the financial condition of RSA and its Subsidiaries as of the date thereof and results of operations for the period covered thereby; and (iii) show all material Indebtedness and other liabilities, direct or contingent, of RSA and its Subsidiaries as of the date thereof, including liabilities for taxes or other material commitments. (b) Since the date of the audited financial statements referred to in subsection (a) above, there has been no Material Adverse Effect. 5.13 Environmental Compliance. Each Borrower and its Subsidiaries conduct in the ordinary course of business a review of the effect of existing Environmental Laws and claims alleging potential liability or responsibility for violation of any Environmental Law on their respective businesses, operations and properties, and as a result thereof each Borrower has reasonably concluded that compliance with such Environmental Laws and claims could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 5.14 Investment Company Act. Neither Borrowers nor any of their respective Subsidiaries is or is required to be registered as an “investment company” under the Investment Company Act of 1940. 5.15 Subsidiaries. Schedule 5.15 hereto correctly sets forth the names, form of legal entity, number of shares of capital stock issued and outstanding, number of shares owned by Borrowers or any Subsidiary of Borrowers (specifying such owner) and jurisdictions of organization of all Subsidiaries of Borrowers (other than Borrowers). Each Material Domestic Subsidiary (other than RSAC Management) has executed and delivered the Master Subsidiary Guaranty. Unless otherwise indicated in Schedule 5.15, all of the outstanding shares of capital stock, or all of the units of equity interest, as the case may be, of each Subsidiary are owned of record and beneficially by Borrowers, as applicable, there are no outstanding options, warrants or other rights to purchase capital stock of any such Subsidiary, and all such shares or equity interests so owned are duly authorized, validly issued, fully paid and non-assessable, and were issued in compliance with all applicable state and federal securities and other Laws, and are free and clear of all Liens except for Permitted Liens. From time to time, Borrowers may update Schedule 5.15 by delivering a revised version to Administrative Agent, whereupon this Agreement shall be deemed to be amended as set forth in such revised Schedule 5.15. 37
    • 5.16 Insurance. The properties of Borrowers and their respective Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates of Borrowers, in such amounts, with such deductibles and self-insurance and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where Borrowers or such Subsidiary operates. 5.17 Disclosure. No written statement made by a Responsible Officer to Administrative Agent or any Lender in connection with this Agreement, or in connection with the Term Loan, as of the date thereof contained any untrue statement of a material fact or omitted a material fact necessary to make the statement made not misleading in light of all the circumstances existing at the date the statement was made. Section 6 AFFIRMATIVE COVENANTS So long as all or any portion of the Term Loan remains unpaid, or any other Obligation remains unpaid or unperformed, or the Aggregate Commitments remain in force, Borrowers shall, and shall cause each of their respective Subsidiaries to: 6.1 Financial Statements. Deliver to Administrative Agent in form and detail reasonably satisfactory to Administrative Agent and the Requisite Lenders, with sufficient copies for each Lender: (a) As soon as practicable, and in any event within 95 days after the end of each Fiscal Year, (i) the consolidated balance sheet of RSA and its Subsidiaries as at the end of such Fiscal Year and the consolidated statements of operations, Shareholders’ Equity and cash flows, in each case of RSA and its Subsidiaries for such Fiscal Year and (ii) consolidating (in accordance with past consolidating practices of RSA) balance sheets and statements of operations, in each case of RSA and its Subsidiaries as at the end of and for the Fiscal Year, all in reasonable detail. Such financial statements shall be prepared in accordance with GAAP, consistently applied, and such consolidated balance sheet and consolidated statements shall be accompanied by a report of independent public accountants of recognized standing selected by RSA and reasonably satisfactory to the Requisite Lenders, which report shall be prepared in accordance with generally accepted auditing standards and applicable securities laws as at such date, and shall not be subject to any qualifications or exceptions as to the scope of the audit nor to any “going concern” or like qualification or exception nor to any other qualification or exception that are reasonably determined by the Requisite Lenders in their good faith business judgment to be materially adverse to the interests of Lenders. Such accountants’ report shall be accompanied by a certificate stating that they have read this Agreement and, in making the examination pursuant to generally accepted auditing standards necessary for certification of such financial statements and such report, such accountants have obtained no knowledge of any Default. (b) As soon as practicable, and in any event within 50 days after the end of each Fiscal Quarter (other than the fourth Fiscal Quarter in any Fiscal Year), the consolidated balance sheet of RSA and its Subsidiaries as at the end of such Fiscal Quarter and 38
    • the consolidated statement of operations for such Fiscal Quarter, and the statement of cash flows for the portion of the Fiscal Year ended with such Fiscal Quarter, all in reasonable detail. (c) As to any information contained in materials furnished pursuant to Section 6.2(c), Borrowers shall not be separately required to furnish such information under clause (a) or (b) above, but the foregoing shall not be in derogation of the obligation of Borrowers to furnish the information and materials described in clauses (a) and (b) above at the times specified therein. 6.2 Certificates, Notices and Other Information. Deliver to Administrative Agent in form and detail satisfactory to Administrative Agent and the Requisite Lenders, with sufficient copies for each Lender: (a) Concurrently with the financial statements required pursuant to Sections 6.1(a) and 6.1(b), a Compliance Certificate signed by a Responsible Officer of each Borrower; (b) Promptly after any request by Administrative Agent, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of either Borrower by independent accountants in connection with the accounts or books of RSA or any of its Subsidiaries, or any audit of any of them; (c) Promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the shareholders of RSA, and copies of all annual, regular, periodic and special reports and registration statements which RSA may file or be required to file with the Securities and Exchange Commission under Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, and not otherwise required to be delivered to Administrative Agent pursuant to other provisions of this Section; (d) Promptly after request by Administrative Agent, copies of any other report or other document that was filed by each Borrower or any of its Subsidiaries with any Governmental Authority that is material to Borrowers and their Subsidiaries taken as a whole and that is not publicly available through filings with the SEC; (e) As soon as practicable, notice of the occurrence of any (i) ERISA Event, other than with respect to the standard termination of a Pension Plan as to which neither Borrower Party nor any of its ERISA Affiliates has any liability (contingent or otherwise) and to which the Borrower Parties have contributed less than $35,000,0000 in the aggregate with respect to all such Pension Plans, (ii) “prohibited transaction” (as such term is defined in Section 406 of ERISA or Section 4975 of the Code) in connection with any Pension Plan or any trust created thereunder that is reasonably likely to have a Material Adverse Effect on Borrowers and their Subsidiaries taken as a whole, (iii) the adoption of, or the commencement of contributions to, any Pension Plan subject to Section 412 of the Code by Borrowers or any ERISA Affiliate, or (iv) the adoption of any amendment to a Pension Plan subject to Section 412 of the Code, if such amendment results in a material increase in contributions or Unfunded Pension Liability, 39
    • telephonic notice specifying the nature thereof, and, no more than five Business Days after such telephonic notice, written notice again specifying the nature thereof and specifying what action Borrowers or any of their respective Subsidiaries are taking or propose to take with respect thereto, and, when known, any action taken by the Internal Revenue Service with respect thereto; (f) With reasonable promptness copies of (a) all notices received by Borrowers or any of their ERISA Affiliates of the PBGC’s intent to terminate any Pension Plan or to have a trustee appointed to administer any Pension Plan; (b) each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) filed by Borrowers or any of their ERISA Affiliates with the Internal Revenue Service with respect to each Pension Plan, other than a Pension Plan to which neither Borrower contributes nor as to which either Borrower has any liability (contingent or otherwise); and (c) all notices received by Borrowers or any of their ERISA Affiliates from a Multiemployer Plan sponsor concerning the imposition or amount of withdrawal liability pursuant to Section 4202 of ERISA; (g) As soon as practicable, notice of the occurrence of any Default or Event of Default, and of the occurrence or existence of any event or circumstance that foreseeably will become a Default or Event of Default, specifying the nature and period of existence thereof and specifying what action Borrowers are taking or propose to take with respect thereto; (h) As soon as practicable, notice of (i) the commencement of a legal proceeding or investigation (which investigation is known to either Borrower) with respect to a claim against Borrowers or any of their respective Subsidiaries that is $20,000,000 or more in excess of the amount thereof that is fully covered by insurance, including pursuant to any applicable Environmental Laws, (ii) any creditor or lessor under a written credit agreement or material lease asserting a material default thereunder on the part of Borrowers or any of their respective Subsidiaries, (iii) commencement of a legal proceeding with respect to a claim against Borrowers or any of their respective Subsidiaries under a contract that is not a credit agreement or material lease in excess of $20,000,000 or which otherwise may reasonably be expected to result in a Material Adverse Effect, or (iv) any material development in any litigation or proceeding (as described in clauses (i) and (iii) above) affecting Borrowers or their respective Subsidiaries; (i) Notice of any material change in accounting policies or financial reporting practices by RSA or any of its Subsidiaries (other than changes required by GAAP or by regulations promulgated by the Securities and Exchange Commission), including any determination by Borrowers referred to in Section 2.8; (j) Promptly, such other data and information as from time to time may be reasonably requested by Administrative Agent, any Lender (through Administrative Agent) or the Requisite Lenders. Documents required to be delivered pursuant to Section 6.1(a) or (b) or Section 6.2(c) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and, if so delivered, shall be deemed to have been delivered on the date 40
    • (i) on which Borrowers post such documents or provide a link thereto on Borrowers’ website on the Internet as notified to Administrative Agent from time to time; or (ii) on which documents are posted on Borrowers’ behalf on an Internet or intranet website, if any, to which each Lender and Administrative Agent have access (whether a commercial third-party website or whether sponsored by Administrative Agent); provided that: (i) upon request, Borrowers shall deliver paper copies of such documents to Administrative Agent or any Lender until a written request to cease delivering paper copies is given by Administrative Agent or such Lender and (ii) Borrowers shall notify Administrative Agent (by telecopier or electronic mail) of the posting of any such documents. Notwithstanding anything contained herein, in every instance Borrowers will be required to provide paper copies of the Compliance Certificate required by Section 6.2(a) to Administrative Agent. Except for such Compliance Certificate, Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above and, in any event, shall have no responsibility to monitor compliance by Borrowers with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents. Borrowers hereby acknowledge that (a) Administrative Agent and/or the Arranger will make available to Lenders materials and/or information provided by or on behalf of Borrowers hereunder (collectively, “Borrowers Materials”) by posting the Borrowers Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) certain of Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to Borrowers or their respective securities) (each, a “Public Lender”). Each Borrower hereby agrees that so long as such Borrower is the issuer of any outstanding debt or equity securities that are registered or issued pursuant to a private offering or is actively contemplating issuing any such securities (w) all Borrowers Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrowers Materials “PUBLIC,” each Borrower shall be deemed to have authorized Administrative Agent, the Arranger and Lenders to treat such Borrowers Materials as not containing any material non-public information with respect to Borrowers or its securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such Borrowers Materials constitute Information (as defined in Section 10.7), they shall be treated as set forth in Section 10.7); (y) all Borrowers Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor;” and (z) Administrative Agent and the Arranger shall be entitled to treat any Borrowers Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.” Notwithstanding the foregoing, Borrowers shall be under no obligation to mark any Borrowers Materials “PUBLIC.” 6.3 Guaranties. (a) If, as of the end of any Fiscal Quarter, the Tangible Assets or EBITDA for the four fiscal quarters most recently ended for the Borrowers and all Guarantors are less than 80% of the consolidated Tangible Assets as of the last day of such fiscal quarter or consolidated EBITDA for such period, respectively, of RSA and its Subsidiaries, promptly identify to the Administrative Agent in writing one or more other Subsidiaries who shall become 41
    • Guarantors such that, when such additional Subsidiaries’ Tangible Assets as of the last day of such fiscal quarter and EBITDA for such period are aggregated with those of the Borrowers and other Guarantors, the aggregate Tangible Assets and EBITDA would be not less than 80% of such consolidated Tangible Assets as of such date and consolidated EBITDA for such period, respectively, of RSA and its Subsidiaries. (b) Within 45 days after any Subsidiary becomes a Material Domestic Subsidiary or is designated as a Guarantor pursuant to clause (a) above, deliver to Administrative Agent (i) a Certificate Regarding Additional Guarantors substantially in the form of Exhibit A to the Master Subsidiary Guaranty (with appropriate insertions made and executed by its authorized officer) and (ii) a Certificate of Secretary substantially in the form of Exhibit B to the Master Subsidiary Guaranty (with appropriate insertions made, the required documents attached and executed by its secretary or other Responsible Officer). 6.4 Preservation of Existence. Preserve and maintain their respective existences in the jurisdiction of their formation and all material authorizations, rights, franchises, privileges, consents, approvals, orders, licenses, permits, or registrations from any Governmental Authority that are necessary for the transaction of their respective business, except where the failure to so preserve and maintain the existence of any of each Borrower’s Subsidiaries and such authorizations would not constitute a Material Adverse Effect and except that a merger permitted hereunder shall not constitute a violation of this covenant; and qualify and remain qualified to transact business in each jurisdiction in which such qualification is necessary in view of their respective business or the ownership or leasing of their respective Properties except where the failure to so qualify or remain qualified would not constitute a Material Adverse Effect. 6.5 Maintenance of Properties. Maintain, preserve and protect all of their respective depreciable Properties in good order and condition, subject to normal wear and tear in the ordinary course of business, and not permit any waste of their respective Properties, except that the failure to maintain, preserve and protect a particular item of depreciable Property that is not of significant value, either intrinsically or to the operations of each Borrower and its respective Subsidiaries, taken as a whole, shall not constitute a violation of this covenant. 6.6 Maintenance of Insurance. Maintain liability, casualty and other insurance (subject to customary deductibles, self-insurance, and retentions) with responsible insurance companies in such amounts and against such risks as is carried by responsible companies engaged in similar businesses and owning similar assets in the general areas in which each Borrower and its respective Subsidiaries operate. 6.7 Payment of Obligations. Pay and discharge as the same shall become due and payable, all its obligations and liabilities, including (a) all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by Borrowers or such Subsidiary; (b) all lawful claims which, if unpaid, would by law become a Lien upon its property; and (c) all Indebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness. 42
    • 6.8 Compliance With Laws. Comply, within the time period, if any, given for such compliance by the relevant Governmental Authority, with all Laws noncompliance with which constitutes a Material Adverse Effect, except that each Borrower and its respective Subsidiaries need not comply with Laws then being contested by any of them in good faith by appropriate proceedings. 6.9 Environmental Laws. Conduct its operations and keep and maintain its property in compliance in all material respects with all Environmental Laws. 6.10 Inspection Rights. Subject to the confidentiality provisions of Section 10.7, upon reasonable notice, at any time during regular business hours and as often as requested (but not so as to materially interfere with the business of each Borrower or any of its respective Subsidiaries or the performance by any officer of his or her responsibilities), permit Administrative Agent or any Lender, or any authorized employee, agent or representative thereof, to examine, audit and make copies and abstracts from the records and books of account of, and to visit and inspect the Properties of, each Borrower and its respective Subsidiaries and to discuss the affairs, finances and accounts of each Borrower and its respective Subsidiaries with any of their officers, key employees or accountants and, upon request, furnish promptly to Administrative Agent or any Lender true copies of all financial information made available to the board of directors or audit committee of the board of directors of each Borrower. 6.11 Keeping of Records and Books of Account. Keep adequate records and books of account reflecting all financial transactions in conformity with GAAP, consistently applied, and in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over each Borrower or any of its respective Subsidiaries. 6.12 Compliance with ERISA. Cause, and cause each of its ERISA Affiliates to: (a) maintain each Pension Plan in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state law; (b) cause each Pension Plan which is qualified under Section 401(a) of the Code to maintain such qualification; and (c) make all required contributions to any Pension Plan subject to Section 412 of the Code. 6.13 Compliance With Agreements. Promptly and fully comply with all Contractual Obligations under all material agreements, indentures, leases and/or instruments to which any one or more of them is a party, whether such material agreements, indentures, leases or instruments are with a Lender or another Person, to the extent failure to comply with any such Contractual Obligations would constitute a Default or an Event of Default or could reasonably be expected to have a Material Adverse Effect. 6.14 Use of Proceeds. Use the proceeds of the Term Loan for working capital, capital expenditures, Acquisitions, Investments, stock repurchases, and general corporate purposes of each Borrower and its respective Subsidiaries, including, without limitation, to finance in part the acquisition of PNA Group Holding Corporation and repayment of Indebtedness thereof. 43
    • 6.15 RSAC Management. Cause RSAC Management to remain at all times a Wholly-Owned Subsidiary of RSA. Section 7 NEGATIVE COVENANTS So long as all or any portion of the Term Loan remains unpaid, or any other Obligation remains unpaid or unperformed, or any portion of the Aggregate Commitments remains in force, Borrowers shall not, and shall not permit any of their respective Subsidiaries to, directly or indirectly: 7.1 Liens, Negative Pledges. Create, incur, assume or suffer to exist any Lien or Negative Pledge of any nature upon or with respect to any of their respective Properties, or engage in any sale and leaseback transaction with respect to any of their respective Properties, whether now owned or hereafter acquired, except: (a) Permitted Liens; (b) Liens and Negative Pledges under the Loan Documents and Negative Pledges under the Existing Credit Agreement; (c) Liens and Negative Pledges existing on the Closing Date and disclosed in Schedule 5.9 and Negative Pledges in documents entered into in connection with the issuance of the Indebtedness permitted under Section 7.3(a) (which Negative Pledges shall be substantially identical to those existing on the Closing Date and disclosed in Schedule 5.9) and any renewals/extensions or amendments thereof; provided that the obligations secured or benefited thereby are not increased; (d) Liens on Property acquired by Borrowers or any of their respective Subsidiaries or owned by Persons acquired by either of Borrowers or any of their respective Subsidiaries that were in existence at the time of the acquisition of such Property or Persons and were not created in contemplation of such acquisition or do not attach to any other Property of Borrowers or their Subsidiaries; (e) any Lien or Negative Pledge created by an agreement or instrument entered into by Borrowers or any of their respective Subsidiaries in the ordinary course of its business which consists of a restriction on the assignability, transfer or hypothecation of such agreement or instrument; (f) Liens and Negative Pledges not described above securing purchase money obligations, capital leases and Synthetic Leases incurred after the Closing Date in an aggregate amount not exceeding $75,000,000 at any time; (g) Liens solely on the assets of Foreign Subsidiaries of RSA securing Indebtedness of such Foreign Subsidiaries of RSA not exceeding $75,000,000 in the aggregate at any time; and 44
    • (h) Liens on the EMJ COLI policies, as defined in the definition “Indebtedness,” that do not secure Indebtedness. 7.2 Investments. Make any Investment, except: (a) Investments, other than those permitted by subsections (b) through (f), that are existing on the date hereof and listed on Schedule 7.2; (b) Investments held by Borrowers or any of their respective Subsidiaries in the form of cash equivalents or short-term marketable securities; (c) Advances to officers, directors and employees of Borrowers and their respective Subsidiaries in the aggregate amount not to exceed $10,000,000 at any time outstanding, for travel, entertainment, relocation and analogous ordinary business purposes; (d) Investments in either Borrower or any Wholly-Owned Domestic Subsidiary of either Borrower; (e) Investments consisting of extension of credit in the nature of accounts receivable or notes receivable arising from the sale or lease of goods or services in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss; and (f) Other Investments made after the Closing Date that, when aggregated with Investments made after the Closing Date (as defined in the Existing Credit Agreement) pursuant to Section 7.1(f) of the Existing Credit Agreement, do not exceed 10% of Consolidated Net Worth as of the end of the most recently ended Fiscal Quarter. 7.3 Indebtedness. Create, incur, assume, suffer to exist, or otherwise be liable with respect to, any Indebtedness except: (a) Indebtedness existing on the Closing Date and disclosed in Schedule 7.3, and any refinancings, refundings, renewals or extensions thereof; provided that the amount of such Indebtedness is not materially increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing; (b) Total Indebtedness under the Loan Documents and under the Existing Credit Agreement, as such Indebtedness may be increased in accordance with Section 2.15 of the Existing Credit Agreement; (c) Indebtedness owed to Borrowers or any of their respective Subsidiaries; (d) Permitted Swap Obligations; 45
    • (e) Obligations (contingent or otherwise) of Borrowers or any Subsidiary thereof existing or arising under any Swap Contract, provided that (i) such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets or property held or reasonably anticipated by such Person, or changes in the value of securities issued by such Person and not for purposes of speculation or taking in a “market view;” and (ii) such Swap Contract does not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party; (f) Unsecured Indebtedness for borrowed money of Borrowers (which may be guaranteed by Subsidiaries of RSA which are party to the Master Subsidiary Guaranty) issued after the Closing Date that, when aggregated with the principal amount of unsecured Indebtedness issued after the Closing Date (as defined in the Existing Credit Agreement) pursuant to Section 7.3(g) of the Existing Credit Agreement, does not exceed the principal amount of $500,000,000; provided, however, that the documentation evidencing such Indebtedness shall contain covenants no more restrictive than in this Agreement and shall be on terms and conditions (including the maturity date and amortization schedule) acceptable to Administrative Agent; (g) Indebtedness in addition to that described in Section 7.3(a)-(f) above incurred for business purposes, including without limitation capital leases and Synthetic Leases, provided that the aggregate principal amount of such Indebtedness outstanding at any one time does not exceed $75,000,0000. 7.4 Prepayment of Indebtedness. Pay any principal or interest on any Indebtedness of Borrowers or any of their respective Subsidiaries prior to the date when due, or make any payment or deposit with any Person that has the effect of providing for the satisfaction of any Indebtedness of Borrowers or any of their respective Subsidiaries prior to the date when due, in each case if a Default or Event of Default then exists or would result therefrom. 7.5 Dispositions. Make any Disposition of its Property, whether now owned or hereafter acquired, except: (a) Permitted Dispositions; and (b) Dispositions not otherwise permitted hereunder which are made for fair market value; provided that (i) at the time of any Disposition, no Event of Default shall exist or shall result from such Disposition, (ii) the aggregate sales price from such Disposition shall be paid in cash, and (iii) the aggregate value of all assets so sold by Borrowers and their Subsidiaries, in any Fiscal Year, and the amount of Net Cash Proceeds from sales and leasebacks consummated in such Fiscal Year, does not exceed 15% of Consolidated Tangible Net Worth as of the end of the Fiscal Quarter immediately preceding such Disposition of Property; provided, however, that in no event shall the total aggregate amount of Net Cash Proceeds from Dispositions by Borrowers and their Subsidiaries from and after the Closing Date exceed 30% of Consolidated Tangible Net Worth as of the most recently ended Fiscal Quarter. 46
    • 7.6 Sales and Leasebacks. Become or remain liable as lessee or as guarantor or other surety with respect to any lease with any Person, whether an Operating Lease or a Capital Lease, of any property (whether real or personal or mixed) whether now owned or hereafter acquired, (i) which Borrowers or any of their respective Subsidiaries have sold or transferred or are to sell or transfer to such Person or such Person’s Affiliate, or (ii) which Borrowers or any such Subsidiary thereof intend to use for substantially the same purpose as any other property which has been or is to be sold or transferred by Borrowers or any such Subsidiary thereof to such Person or such Person’s Affiliate in connection with such lease; provided that Borrowers may enter into any sale and leaseback of Real Property, improvements thereon and equipment of Borrowers entered into to finance or refinance the purchase price or construction of such real property, improvements and equipment; provided that the Net Cash Proceeds of each such transaction during any Fiscal Year together with aggregate Net Cash Proceeds from other sales and leasebacks consummated during such Fiscal Year do not exceed 15% of Consolidated Tangible Net Worth as of the end of the Fiscal Quarter immediately preceding such transaction. 7.7 Mergers. Merge or consolidate with or into any Person, except: (a) mergers and consolidations of any Subsidiary of RSA into either Borrower or a Subsidiary of a Borrower (with such Borrower or such Subsidiary as the surviving entity) or of either Borrower or any Guarantor with each other, provided that any Guarantor will only be merged into or consolidated with either Borrower or a Guarantor and provided further that RSA and its Subsidiaries have executed such amendments to the Loan Documents as Administrative Agent may reasonably determine are appropriate as a result of such merger; and (b) a merger or consolidation of RSA or any of its Subsidiaries with any other Person, provided that (i) either (A) either Borrower or a Guarantor is the surviving entity, or (B) the surviving entity is a corporation organized under the Laws of a State of the United States of America or the District of Columbia and, as of the date of such merger or consolidation, expressly assumes or becomes a Guarantor of, by appropriate agreements and instruments as shall be satisfactory to the Requisite Lenders, the Obligations of Borrowers or their respective Subsidiaries, as the case may be, and (ii) giving effect thereto on a pro-forma basis, no Default or Event of Default exists or would result therefrom. 7.8 Acquisitions. (a) Make or agree to make any Acquisition if, after giving effect thereto, Borrowers would not be in compliance with the terms and conditions of this Agreement on a pro forma basis; or (b) Directly or indirectly use the proceeds of the Term Loan in connection with any Hostile Acquisition. 47
    • 7.9 ERISA. (a) At any time, permit any Pension Plan to: (i) engage in any non-exempt “prohibited transaction” (as defined in Section 4975 of the Code); (ii) fail to comply with ERISA or any other applicable Laws; (iii) incur any material “accumulated funding deficiency” (as defined in Section 302 of ERISA); or (iv) terminate in any manner, which, in each case, could reasonably be expected to result in a Material Adverse Effect; or (b) withdraw, completely or partially, from any Multiemployer Plan if to do so could reasonably be expected to result in a Material Adverse Effect. 7.10 Interest Coverage Ratio. Permit the Interest Coverage Ratio, as of the last day of any Fiscal Quarter, to be less than 3.00 to 1.00. 7.11 Total Leverage Ratio. Permit the Total Leverage Ratio, as of the last day of any Fiscal Quarter, to be greater than 0.60 to 1.00. 7.12 Change in Nature of Business. Make any material change in the nature of the business of Borrowers and their respective Subsidiaries, taken as a whole. 7.13 Transactions with Affiliates. Enter into any transaction of any kind with any Affiliate of either Borrower other than (a) salary, bonus, employee stock option, restricted stock, stock appreciation rights, phantom stock and other compensation arrangements with directors or officers in the ordinary course of business, (b) transactions that are fully disclosed to the board of directors of each Borrower and expressly authorized by a resolution of the board of directors of each Borrower which is approved by a majority of the directors not having an interest in the transaction, (c) transactions between or among each Borrower and the Guarantors, (d) transactions between or among either Borrower or any Guarantor, on the one hand, and any Subsidiary of either Borrower (other than any Guarantor), on the other hand, so long as such transactions individually or in the aggregate are not materially adverse to the interest of the Lenders and the aggregate amount of consideration for all such transactions during the term of this Agreement does not exceed $35,000,000, and (e) transactions on overall terms at least as favorable to each Borrower or its Subsidiaries as would be the case in an arm’s-length transaction between unrelated parties of equal bargaining power. 7.14 Distributions. Make any Distribution, whether from capital, income or otherwise, and whether in Cash or other Property if, after giving effect thereto, Borrowers would not be in compliance with the terms and conditions of this Agreement on a pro forma basis. Section 8 EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT 8.1 Events of Default. The existence or occurrence of any one or more of the following events, whatever the reason therefor and under any circumstances whatsoever, shall constitute an “Event of Default”: 48
    • (a) Borrowers fail to maintain on deposit as of the due date in the Borrowers Account an amount sufficient to pay in accordance with Section 2.11 any outstanding principal balance of the Term Loan, or, for any reason, any portion or installment thereof when due or any outstanding principal balance of the Term Loan, or any portion or installment thereof is not otherwise paid within 5 days after the date when due; or (b) Borrowers fail to pay any accrued and unpaid interest on the outstanding principal balance of the Term Loan or any fees due hereunder, or any portion thereof, within five days after the date when due; or (c) Borrowers fail to comply with any of the covenants contained in Section 7; or (d) Borrowers, any of their respective Subsidiaries or any other Borrower Party fails to perform or observe any other covenant or agreement (not specified above) contained in any Loan Document on its part to be performed or observed and such failure continues for a period of 30 days; or (e) Any representation or warranty of Borrowers or any of their respective Subsidiaries made in any Loan Document, or in any certificate or other writing delivered by Borrowers or such Subsidiary pursuant to any Loan Document proves to have been incorrect when made or reaffirmed in any respect that is materially adverse to the interests of Lenders; or (f) An Event of Default occurs under the Existing Credit Agreement (provided that upon the cure or waiver of such Event of Default under the Existing Credit Agreement, then so long as an Event of Default has arisen hereunder only under this first clause of this first sentence, such Event of Default hereunder shall also be deemed cured or waived without need for action by Administrative Agent or any Lender) or Borrowers or any of their respective Subsidiaries (i) fail to make any payment in respect of any Indebtedness having an aggregate principal amount of more than $20,000,000 when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) and such failure continues after the applicable grace or notice period, if any, specified in the relevant document on the date of such failure; or (ii) fail to perform or observe any other condition or covenant, or any other event shall occur or condition exist, under any agreement or instrument relating to any such Indebtedness, and such failure continues after the applicable grace or notice period, if any, specified in the relevant document on the date of such failure, if the effect of such failure, event or condition is to cause or to permit (A) the holder or holders of such Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to declare such Indebtedness to be due and payable prior to its stated maturity, or (B) any Guaranty Obligation to become payable or cash collateral in respect thereof to be demanded; or (g) Any Loan Document, at any time after its execution and delivery and for any reason other than the agreement or action (or omission to act) of Administrative Agent or Lenders or satisfaction in full of all the Obligations, ceases to be in full force and effect 49
    • or is declared by a court of competent jurisdiction to be null and void, invalid or unenforceable in any respect which, in any such event in the reasonable opinion of the Requisite Lenders, is materially adverse to the interests of Lenders; or any Borrower Party thereto denies in writing that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind same; or (h) A final judgment against either Borrower or any of their respective Subsidiaries is entered for the payment of money in excess of $20,000,000 and, absent procurement of a stay of execution, such judgment remains unsatisfied for 30 calendar days after the date of entry of judgment, or in any event later than five days prior to the date of any proposed sale thereunder; or any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the Property of any such Person and is not released, vacated or fully bonded within 30 calendar days after its issue or levy; or (i) Either Borrower or any of their respective Subsidiaries institutes or consents to the institution of any proceeding under a Debtor Relief Law relating to it or to all or any material part of its Property, or is unable or admits in writing its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its Property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of that Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under a Debtor Relief Law relating to any such Person or to all or any part of its Property is instituted without the consent of that Person and continues undismissed or unstayed for 60 calendar days; or (j) (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of either Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of $35,000,000; (ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans at any time exceeds $35,000,000; or (iii) Borrowers or any ERISA Affiliate shall fail to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of $35,000,000; or (k) There occurs any Change of Control of either Borrower. 8.2 Remedies Upon Event of Default. If any Event of Default occurs, Administrative Agent shall, at the request of, or may, with the consent of, the Requisite Lenders, (a) If the Term Loan has not been fully funded, declare the Commitment of each Lender to fund its Pro Rata Share of the Term Loan to be terminated, whereupon such commitments and obligation shall be terminated; (b) declare the unpaid principal amount of the Term Loan, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any 50
    • other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by Borrowers; (c) exercise on behalf of itself and Lenders all rights and remedies available to it and Lenders under the Loan Documents or applicable law; (d) provided, however, that upon the occurrence of any event specified in subsection (i) of Section 8.1, the obligation of each Lender to make the Term Loan shall automatically terminate, and the unpaid principal amount of the Term Loan and all interest and other amounts as aforesaid shall automatically become due and payable, in each case without further act of Administrative Agent or any Lender. 8.3 Application of Funds. After the exercise of remedies provided for in Section 8.2 (or after the Term Loan has automatically become immediately due and payable as set forth in the proviso to Section 8.2), any amounts received on account of the Obligations shall be applied by Administrative Agent in the following order: First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to Administrative Agent and amounts payable under Section 3) payable to Administrative Agent in its capacity as such; Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts payable to the Lenders (including fees, charges and disbursements of counsel to the respective Lenders and amounts payable under Section 3), ratably among them in proportion to the respective amounts described in this clause Second payable to them; Third, to payment of accrued and unpaid interest payable on the outstanding principal balance of the Term Loan to the Lenders ratably among them in proportion to the respective amounts of that portion of the Obligations held by such Lenders; Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Term Loan and Permitted Swap Obligations payable to Lenders, ratably among the Lenders in proportion to the respective amounts of such Obligations held by them; Fifth, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to Borrowers or as otherwise required by Law. Section 9 ADMINISTRATIVE AGENT 9.1 Appointment and Authority. Each of the Lenders hereby irrevocably appoints Bank of America to act on its behalf as Administrative Agent hereunder and under the other Loan Documents and authorizes Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to Administrative Agent by the terms hereof or 51
    • thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Section 9 are solely for the benefit of Administrative Agent and Lenders, and neither Borrowers nor any other Borrower Party shall have rights as a third party beneficiary of any of such provisions. 9.2 Rights as a Lender. The Person serving as Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with Borrowers or any of their respective Subsidiaries or other Affiliate thereof as if such Person were not Administrative Agent hereunder and without any duty to account therefor to Lenders. 9.3 Exculpatory Provisions. Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, Administrative Agent: (a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing; (b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that Administrative Agent is required to exercise as directed in writing by the Requisite Lenders (or such other number or percentage of Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and (c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to Borrowers or any of their respective Affiliates that is communicated to or obtained by the Person serving as Administrative Agent or any of its Affiliates in any capacity. Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Requisite Lenders (or such other number or percentage of Lenders as shall be necessary, or as Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.1 and 8.2) or (ii) in the absence of its own gross negligence or willful misconduct. Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to Administrative Agent by Borrowers or a Lender. Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any 52
    • other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Section 4 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to Administrative Agent. 9.4 Reliance by Administrative Agent. Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of the Term Loan that by its terms must be fulfilled to the satisfaction of a Lender, Administrative Agent may presume that such condition is satisfactory to such Lender unless Administrative Agent shall have received notice to the contrary from such Lender prior to the making of the Term Loan. Administrative Agent may consult with legal counsel (who may be counsel for Borrowers), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts. 9.5 Delegation of Duties. Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by Administrative Agent. Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Section 9 shall apply to any such sub-agent and to the Related Parties of Administrative Agent and any such sub- agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent. 9.6 Resignation of Administrative Agent. Administrative Agent may at any time give notice of its resignation to Lenders and Borrowers. Upon receipt of any such notice of resignation, the Requisite Lenders shall have the right, in consultation with Borrowers, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Requisite Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of Lenders appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if Administrative Agent shall notify Borrowers and Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents and (2) all payments, communications and determinations provided to be made by, to or through Administrative Agent shall instead be made by or to each Lender directly, until such time as the 53
    • Requisite Lenders appoint a successor Administrative Agent as provided for above in this Section. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between Borrowers and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Section 9 and Section 10.4 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent. 9.7 Non-Reliance on Administrative Agent and Other Lenders. Each Lender acknowledges that it has, independently and without reliance upon Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder. 9.8 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the Arranger or other agents listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as Administrative Agent or a Lender hereunder. 9.9 Administrative Agent May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Borrower Party, Administrative Agent (irrespective of whether the principal of the Term Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether Administrative Agent shall have made any demand on Borrowers) shall be entitled and empowered, by intervention in such proceeding or otherwise (a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Term Loan and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of Lenders and Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of Lenders and Administrative Agent and their respective agents and counsel and all other amounts due Lenders and Administrative Agent under Sections 2.7 and 10.4) allowed in such judicial proceeding; and 54
    • (b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to Administrative Agent and, in the event that Administrative Agent shall consent to the making of such payments directly to Lenders, to pay to Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of Administrative Agent and its agents and counsel, and any other amounts due Administrative Agent under Sections 2.7 and 10.4. Nothing contained herein shall be deemed to authorize Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize Administrative Agent to vote in respect of the claim of any Lender in any such proceeding. 9.10 Master Subsidiary Guaranty Matters. Lenders irrevocably authorize Administrative Agent, at its option and in its discretion, to release any Guarantor from its obligations under the Master Subsidiary Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder. Upon request by Administrative Agent at any time, the Requisite Lenders will confirm in writing the Administrative Agent’s authority to release any Guarantor from its obligations under the Master Subsidiary Guaranty pursuant to this Section 9.10. Section 10 MISCELLANEOUS 10.1 Amendments, Etc. No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by Borrowers or any other Borrower Party therefrom, shall be effective unless in writing signed by the Requisite Lenders and Borrowers or the applicable Borrower Party, as the case may be, and acknowledged by Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall: (a) waive any condition set forth in Section 4.1(a) without the written consent of each Lender; (b) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.2), without the written consent of such Lender; (c) postpone any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees or other amounts due to Lenders (or any of them) hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby; 55
    • (d) reduce the principal of, or the rate of interest specified herein on, the Term Loan, or (subject to clause (v) of the second proviso to this Section 10.1) any fees or other amounts payable hereunder or under any other Loan Document, or change the manner of computation of any financial ratio (including any change in any applicable defined term) used in determining the Applicable Margin that would result in a reduction of any interest rate on the Term Loan or any fee payable hereunder without the written consent of each Lender directly affected thereby; provided, however, that only the consent of the Requisite Lenders shall be necessary to amend the definition of “Default Rate” or to waive any obligation of Borrowers to pay interest at the Default Rate; (e) change any provision of this Section, the order in which funds are applied pursuant to Section 8.3 or the definition of “Requisite Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder without the written consent of each Lender; or (f) release all or substantially all of the value of the Master Subsidiary Guaranty without the written consent of each Lender; and, provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by Administrative Agent in addition to Lenders required above, affect the rights or duties of Administrative Agent under this Agreement or any other Loan Document; (ii) Section 10.6(i) may not be amended, waived or otherwise modified without the consent of each Granting Lender all or any part of whose interests in the Term Loan are being funded by an SPC at the time of such amendment, waiver or other modification; and (iii) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased without the consent of such Lender. 10.2 Notices; Effectiveness; Electronic Communication. (a) Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows: (i) if to Borrowers or Administrative Agent to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 10.2; and 56
    • (ii) if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire. Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b). (b) Electronic Communications. Notices and other communications to Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by Administrative Agent, provided that the foregoing shall not apply to notices to any Lender pursuant to Section 2 if such Lender, has notified Administrative Agent that it is incapable of receiving notices under such Section by electronic communication. Administrative Agent or each Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications. Unless Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor. (c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWERS MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWERS MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWERS MATERIALS OR THE PLATFORM. In no event shall Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to any Borrower, any Lender or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of Borrowers’ or the Administrative Agent’s transmission of Borrowers Materials through the Internet, except to the extent that such 57
    • losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to any Borrower, any Lender or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages). (d) Change of Address, Etc. Each of Borrowers and the Administrative Agent may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to Borrowers and Administrative Agent. In addition, each Lender agrees to notify Administrative Agent from time to time to ensure that Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender. (e) Reliance by Administrative Agent and Lenders. Administrative Agent and Lenders shall be entitled to rely and act upon any notices purportedly given by or on behalf of Borrowers which are reasonably believed to be genuine and correct even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. Borrowers shall indemnify Administrative Agent, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of Borrowers. All telephonic notices to and other telephonic communications with Administrative Agent may be recorded by Administrative Agent, and each of the parties hereto hereby consents to such recording. 10.3 No Waiver; Cumulative Remedies. No failure by any Lender or Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. 10.4 Expenses; Indemnity; Damage Waiver. (a) Costs and Expenses. Each Borrower jointly and severally shall pay (i) all reasonable out-of-pocket expenses incurred by Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for Administrative Agent), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated) and (ii) all out-of-pocket expenses incurred by Administrative Agent or any Lender (including the 58
    • fees, charges and disbursements of any counsel for Administrative Agent or any Lender), and shall pay all fees and time charges for attorneys who may be employees of Administrative Agent or any Lender in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Term Loan made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of the Term Loan. Notwithstanding anything to the contrary herein, certain fees and expenses of the Arranger shall be paid by Borrowers in accordance with the Fee Letter. (b) Indemnification by Borrowers. Borrowers jointly and severally shall indemnify Administrative Agent (and any sub-agent thereof), each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, penalties, liabilities and related expenses (including the reasonable fees, charges and disbursements of any counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all reasonable fees and time charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party or by Borrowers or any other Borrower Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, the consummation of the transactions contemplated hereby or thereby, or, in the case of Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) the Term Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by Borrowers or any of their respective Subsidiaries, or any Environmental Liability related in any way to Borrowers or any of their respective Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by Borrowers or any other Borrower Party, and regardless of whether any Indemnitee is a party thereto, in all cases, whether or not caused by or arising, in whole or in part, out of the comparative, contributory or sole negligence of the Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by any Borrower Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if any such Borrower Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction. (c) Reimbursement by Lenders. To the extent that any Borrower for any reason fails to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to Administrative Agent (or any sub-agent thereof) or any Related Party, each Lender severally agrees to pay to Administrative Agent (or any such sub-agent) or such Related Party, as the case may be, such Lender’s Pro Rata Share (determined as of the time that 59
    • the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against Administrative Agent (or any such sub-agent) in its capacity as such, or against any Related Party of any of the foregoing acting for Administrative Agent (or any such sub-agent) in connection with such capacity. The obligations of Lenders under this subsection (c) are subject to the provisions of Section 2.12. (d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, neither Borrowers nor any other Borrower Party shall assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, the Term Loan or the use of the proceeds thereof. No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby, except to the extent such distribution arises from the gross negligence or willful misconduct of such Indemnitee. (e) Payments. All amounts due under this Section 10.4 shall be payable not later than ten Business Days after demand therefor. (f) Survival. The agreements in this Section 10.4 shall survive the resignation of Administrative Agent, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations. 10.5 Payments Set Aside. To the extent that any payment by or on behalf of either Borrower is made to Administrative Agent or any Lender, or Administrative Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender severally agrees to pay to Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of Lenders under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement. 60
    • 10.6 Successors and Assigns. (a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither Borrowers nor any other Borrower Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section, (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) of this Section, or (iv) to an SPC in accordance with the provisions of subsection (i) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of Administrative Agent and Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement. (b) Assignments by Lenders. Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment or the portion of the Term Loan owing to it); provided that (i) except in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment or the portion of the Term Loan at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate amount of the Commitment or the portion of the Term Loan of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000 unless each of Administrative Agent and, so long as no Event of Default has occurred and is continuing, each Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such Minimum Amount has been met; (ii) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations 61
    • under this Agreement with respect to the portion of the Term Loan or the Commitment assigned; (iii) any assignment of a Commitment must be approved by Administrative Agent unless the Person that is the proposed assignee is itself a Lender (whether or not the proposed assignee would otherwise qualify as an Eligible Assignee); and (iv) the parties to each assignment shall execute and deliver to Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $3,500; provided, however, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it shall not be a Lender, shall deliver to Administrative Agent an Administrative Questionnaire. Subject to acceptance and recording thereof by Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.1 through 3.3, 3.6 and 10.4 with respect to facts and circumstances occurring prior to the effective date of such assignment. Upon request, Borrowers (at their expense) shall execute and deliver new or replacement Term Notes to the assigning Lender and/or the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section. (c) Register. Administrative Agent, acting solely for this purpose as an agent of Borrowers, shall maintain at Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of Lenders and the portion of the Term Loan owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and Borrowers, Administrative Agent and Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by each of Borrowers at any reasonable time and from time to time upon reasonable prior notice. In addition, at any time that a request for a consent for a material or substantive change to the Loan Documents is pending, any Lender may request and receive from Administrative Agent a copy of the Register. 62
    • (d) Participations. Any Lender may at any time, without the consent of, or notice to, Borrowers or Administrative Agent, sell participations to any Person (other than a natural person or Borrowers or any of Borrowers’ Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment or the portion of the Term Loan owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) Borrowers, Administrative Agent and Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 10.1 that affects such Participant. Subject to subsection (e) of this Section, each Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.1 through 3.3 and Section 3.6 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.8 as though it were a Lender, provided such Participant agrees to be subject to Section 2.9 as though it were a Lender. (e) Limitations upon Participant Rights. A Participant shall not be entitled to receive any greater payment under Sections 3.1 through 3.3 and Section 3.6 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with Borrowers’ prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.1 unless Borrowers are notified of the participation sold to such Participant and such Participant agrees, for the benefit of Borrowers, to comply with Section 10.18 as though it were a Lender. (f) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. (g) Electronic Execution of Assignments. The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and 63
    • National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act. (h) As used herein, the following terms have the following meaning: “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) Administrative Agent, and (ii) unless (A) such Person is taking delivery of an assignment in connection with physical settlement of a credit derivative transaction or (B) an Event of Default has occurred and is continuing, Borrower (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include Borrowers or any of Borrowers’ Affiliates or Subsidiaries; provided further that, unless an Event of Default has occurred and is continuing, an Eligible Assignee under clause (d) above shall have a minimum of $100,000,000 of combined capital and surplus. “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. “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. (i) Special Purpose Funding Vehicles. Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to Administrative Agent and Borrowers (an “SPC”) the option to provide all or any part of the portion of the Term Loan that such Granting Lender would otherwise be obligated to fund pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to so fund the Term Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails to so fund the Term Loan, the Granting Lender shall be obligated to fund its Pro Rata Share of the Term Loan pursuant to the terms hereof or, if it fails to do so, to make such payment to Administrative Agent as is required under Section 2.9(d). Each party hereto hereby agrees that (i) neither the grant to any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise increase or change the obligations of Borrowers under this Agreement (including its obligations under Section 3.2), (ii) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement for which a Lender would be liable, and (iii) the Granting Lender shall for all purposes, including the approval of any amendment, waiver or other modification of any provision of any Loan Document, remain the lender of record hereunder. In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior debt of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding 64
    • under the laws of the United States or any State thereof. Notwithstanding anything to the contrary contained herein, any SPC may (i) with notice to, but without prior consent of Borrowers and Administrative Agent and with the payment of a processing fee in the amount of $3,500, assign all or any portion of its right to receive payment with respect to the Term Loan to the Granting Lender and (ii) disclose on a confidential basis any non-public information relating to its funding of a portion of the Term Loan to any rating agency, commercial paper dealer or provider of any surety or guarantee or credit or liquidity enhancement to such SPC. 10.7 Treatment of Certain Information; Confidentiality. Each of Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to Borrowers and their respective obligations, (g) with the consent of Borrowers or (h) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to Administrative Agent, any Lender or any of their respective Affiliates on a nonconfidential basis from a source other than such Borrower. For purposes of this Section, “Information” means all information received from Borrowers or any of their respective Subsidiaries relating to such Borrower or any Subsidiary or any of their respective businesses, other than any such information that is available to Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by such Borrower or any Subsidiary, provided that, in the case of information received from such Borrower or any Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. Each of Administrative Agent and the Lenders acknowledges that (a) the Information may include material non-public information concerning Borrowers or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including Federal and state securities Laws. 65
    • 10.8 Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender or any such Affiliate to or for the credit or the account of either Borrower or any other Borrower Party against any and all of the obligations of such Borrower or such other Borrower Party now or hereafter existing under this Agreement or any other Loan Document to such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement or any other Loan Document and although such obligations of such Borrower or such other Borrower Party may be contingent or unmatured or are owed to a branch or office of such Lender or Affiliate different from the branch or office holding such deposit or obligated on such indebtedness. The rights of each Lender and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender or their respective Affiliates may have. Each Lender agrees to notify each Borrower and Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application. 10.9 Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Term Loan or, if it exceeds such unpaid principal, refunded to Borrowers. In determining whether the interest contracted for, charged, or received by Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder. 10.10 Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.1, this Agreement shall become effective when it shall have been executed by Administrative Agent and when Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement. 10.11 Survival of Representations and Warranties. All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and 66
    • delivery hereof and thereof. Such representations and warranties have been or will be relied upon by Administrative Agent and each Lender, regardless of any investigation made by Administrative Agent or any Lender or on their behalf and notwithstanding that Administrative Agent or any Lender may have had notice or knowledge of any Default at the time the Term Loan is made, and shall continue in full force and effect as long as all or any portion of the Term Loan or any other Obligation hereunder shall remain unpaid or unsatisfied, except to the extent that such representations and warranties were modified or supplemented as provided herein. 10.12 Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 10.13 Replacement of Lenders. If any Lender requests compensation under Section 3.2, or if any Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.1, or if any Lender is a Defaulting Lender, then such Borrower may, at its sole expense and effort, upon notice to such Lender and Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.6), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that: (a) such Borrower shall have paid to Administrative Agent the assignment fee specified in Section 10.6(b); (b) such Lender shall have received payment of an amount equal to its Pro Rata Share of the outstanding principal balance of the Term Loan, accrued interest thereon, accrued fees and all other amounts payable to it hereunder (but, if the Lender is a Defaulting Lender, after deducting any amounts due to Administrative Agent or any other Lender as a result of such default) and under the other Loan Documents (including any amounts under Section 3.6) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or such Borrower (in the case of all other amounts); (c) in the case of any such assignment resulting from a claim for compensation under Section 3.2 or payments required to be made pursuant to Section 3.1, such assignment will result in a reduction in such compensation or payments thereafter; and (d) such assignment does not conflict with applicable Laws. 67
    • A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling either Borrowers to require such assignment and delegation cease to apply. 10.14 Governing Law; Jurisdiction; Etc. (a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA. (b) SUBMISSION TO JURISDICTION. EACH BORROWER AND EACH OTHER BORROWER PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF CALIFORNIA SITTING IN LOS ANGELES COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE CENTRAL DISTRICT, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH CALIFORNIA STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST EITHER BORROWER OR ANY OTHER BORROWER PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION. (c) WAIVER OF VENUE. EACH BORROWER AND EACH OTHER BORROWER PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT. (d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.2. NOTHING IN THIS AGREEMENT WILL AFFECT THE 68
    • RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW. 10.15 Waiver of Jury Trial. (a) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (1) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (2) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. (b) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT TO THE CONTRARY, IF THE FOREGOING IRREVOCABLE WAIVER OF ALL RIGHT TO TRIAL BY JURY IS RULED INVALID BY A COURT OF LAW, THEN ANY CONTROVERSIES OR CLAIMS BETWEEN THE PARTIES, WHETHER ARISING IN CONTRACT, TORT OR BY STATUTE, INCLUDING BUT NOT LIMITED TO CONTROVERSIES OR CLAIMS THAT ARISE OUT OF OR RELATE TO: (1) THIS AGREEMENT (INCLUDING ANY RENEWALS, EXTENSIONS OR MODIFICATIONS); OR (2) ANY DOCUMENT RELATED TO THIS AGREEMENT (COLLECTIVELY A “CLAIM”) SHALL AT THE REQUEST OF ANY PARTY BE DETERMINED BY BINDING ARBITRATION. FOR THE PURPOSES OF THIS ARBITRATION PROVISION ONLY, THE TERM “PARTIES” SHALL INCLUDE ANY PARENT CORPORATION, SUBSIDIARY OR AFFILIATE OF THE ADMINISTRATIVE AGENT OR ANY LENDER INVOLVED IN THE SERVICING, MANAGEMENT OR ADMINISTRATION OF ANY OBLIGATION DESCRIBED OR EVIDENCED BY THIS AGREEMENT. (c) AT THE REQUEST OF ANY PARTY TO THIS AGREEMENT, ANY CLAIM SHALL BE RESOLVED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (TITLE 9, U.S. CODE) (THE “ACT”). THE ACT WILL APPLY EVEN THOUGH THIS AGREEMENT PROVIDES THAT IT IS GOVERNED BY THE LAW OF A SPECIFIED STATE. THE ARBITRATION WILL TAKE PLACE ON AN INDIVIDUAL BASIS WITHOUT RESORT TO ANY FORM OF CLASS ACTION. (d) ARBITRATION PROCEEDINGS WILL BE DETERMINED IN ACCORDANCE WITH THE ACT, THE THEN-CURRENT RULES AND PROCEDURES 69
    • FOR THE ARBITRATION OF FINANCIAL SERVICES DISPUTES OF THE AMERICAN ARBITRATION ASSOCIATION OR ANY SUCCESSOR THEREOF (“AAA”), AND THE TERMS OF THIS SECTION. IN THE EVENT OF ANY INCONSISTENCY, THE TERMS OF THIS SECTION SHALL CONTROL. IF AAA IS UNWILLING OR UNABLE TO (1) SERVE AS THE PROVIDER OF ARBITRATION OR (2) ENFORCE ANY PROVISION OF THIS ARBITRATION CLAUSE, ANY PARTY TO THIS AGREEMENT MAY SUBSTITUTE ANOTHER ARBITRATION ORGANIZATION WITH SIMILAR PROCEDURES TO SERVE AS THE PROVIDER OF ARBITRATION. (e) THE ARBITRATION SHALL BE ADMINISTERED BY AAA AND CONDUCTED, UNLESS OTHERWISE REQUIRED BY LAW, IN ANY U.S. STATE WHERE REAL OR TANGIBLE PERSONAL PROPERTY COLLATERAL FOR THIS CREDIT IS LOCATED OR IF THERE IS NO SUCH COLLATERAL, IN THE STATE SPECIFIED IN THE GOVERNING LAW SECTION OF THIS AGREEMENT. ALL CLAIMS SHALL BE DETERMINED BY ONE ARBITRATOR; HOWEVER, IF CLAIMS EXCEED FIVE MILLION DOLLARS ($5,000,000), UPON THE REQUEST OF ANY PARTY, THE CLAIMS SHALL BE DECIDED BY THREE ARBITRATORS. ALL ARBITRATION HEARINGS SHALL COMMENCE WITHIN NINETY (90) DAYS OF THE DEMAND FOR ARBITRATION AND CLOSE WITHIN NINETY (90) DAYS OF COMMENCEMENT AND THE AWARD OF THE ARBITRATOR(S) SHALL BE ISSUED WITHIN THIRTY (30) DAYS OF THE CLOSE OF THE HEARING. HOWEVER, THE ARBITRATOR(S), UPON A SHOWING OF GOOD CAUSE, MAY EXTEND THE COMMENCEMENT OF THE HEARING FOR UP TO AN ADDITIONAL SIXTY (60) DAYS. THE ARBITRATOR(S) SHALL PROVIDE A CONCISE WRITTEN STATEMENT OF REASONS FOR THE AWARD. THE ARBITRATION AWARD MAY BE SUBMITTED TO ANY COURT HAVING JURISDICTION TO BE CONFIRMED, JUDGMENT ENTERED AND ENFORCED. (f) THE ARBITRATOR(S) WILL GIVE EFFECT TO STATUTES OF LIMITATION IN DETERMINING ANY CLAIM AND MAY DISMISS THE ARBITRATION ON THE BASIS THAT THE CLAIM IS BARRED. FOR PURPOSES OF THE APPLICATION OF THE STATUTE OF LIMITATIONS, THE SERVICE ON AAA UNDER APPLICABLE AAA RULES OF A NOTICE OF CLAIM IS THE EQUIVALENT OF THE FILING OF A LAWSUIT. ANY DISPUTE CONCERNING THIS ARBITRATION PROVISION OR WHETHER A CLAIM IS ARBITRABLE SHALL BE DETERMINED BY THE ARBITRATOR(S). THE ARBITRATOR(S) SHALL HAVE THE POWER TO AWARD LEGAL FEES PURSUANT TO THE TERMS OF THIS AGREEMENT. (g) THIS SECTION DOES NOT LIMIT THE RIGHT OF ANY PARTY TO: (1) EXERCISE SELF-HELP REMEDIES, SUCH AS BUT NOT LIMITED TO, SETOFF; (2) INITIATE JUDICIAL OR NON-JUDICIAL FORECLOSURE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL (IF ANY); (3) EXERCISE ANY JUDICIAL OR POWER OF SALE RIGHTS, OR (4) ACT IN A COURT OF LAW TO OBTAIN AN INTERIM REMEDY, SUCH AS BUT NOT LIMITED TO, INJUNCTIVE RELIEF, WRIT OF POSSESSION OR APPOINTMENT OF A RECEIVER, OR ADDITIONAL OR SUPPLEMENTARY REMEDIES. 70
    • (h) THE PROCEDURE DESCRIBED ABOVE WILL NOT APPLY IF THE CLAIM, AT THE TIME OF THE PROPOSED SUBMISSION TO ARBITRATION, ARISES FROM OR RELATES TO AN OBLIGATION TO THE LENDERS SECURED BY REAL PROPERTY. IN THIS CASE, ALL OF THE PARTIES TO THIS AGREEMENT MUST CONSENT TO SUBMISSION OF THE CLAIM TO ARBITRATION. IF ALL SUCH PARTIES DO NOT CONSENT TO ARBITRATION, THE CLAIM WILL BE RESOLVED AS FOLLOWS: THE PARTIES WILL DESIGNATE A REFEREE (OR A PANEL OF REFEREES) SELECTED UNDER THE AUSPICES OF AAA IN THE SAME MANNER AS ARBITRATORS ARE SELECTED IN AAA ADMINISTERED PROCEEDINGS. THE DESIGNATED REFEREE(S) WILL BE APPOINTED BY A COURT AS PROVIDED IN CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638 AND THE FOLLOWING RELATED SECTIONS. THE REFEREE (OR PRESIDING REFEREE OF THE PANEL) WILL BE AN ACTIVE ATTORNEY OR A RETIRED JUDGE. THE AWARD THAT RESULTS FROM THE DECISION OF THE REFEREE(S) WILL BE ENTERED AS A JUDGMENT IN THE COURT THAT APPOINTED THE REFEREE, IN ACCORDANCE WITH THE PROVISIONS OF CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 644 AND 645. (i) THE FILING OF A COURT ACTION IS NOT INTENDED TO CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE SUING PARTY, THEREAFTER TO REQUIRE SUBMITTAL OF THE CLAIM TO ARBITRATION. 10.16 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as hereinafter defined) and Administrative Agent (for itself and not on behalf of any Lender) hereby notifies each Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies either Borrower, which information includes the name and address of such Borrower and other information that will allow such Lender or Administrative Agent, as applicable, to identify such Borrower in accordance with the Act. 10.17 Time of the Essence. Time is of the essence of the Loan Documents. 10.18 Tax Forms. (a) Each Lender that is not a “United States person” within the meaning of Section 7701(a)(30) of the Code (a “Foreign Lender”) shall deliver to Administrative Agent, prior to receipt of any payment subject to withholding under the Code (or upon accepting an assignment of an interest herein), two duly signed completed copies of either IRS Form W-8BEN or any successor thereto (relating to such Person and entitling it to an exemption from, or reduction of, withholding tax on all payments to be made to such Person by Borrowers pursuant to this Agreement) or IRS Form W-8ECI or any successor thereto (relating to all payments to be made to such Person by Borrowers pursuant to this Agreement) or such other evidence satisfactory to Borrowers and Administrative Agent that such Person is entitled to an exemption from, or reduction of, United States withholding tax. Thereafter and from time to time, each such Person shall (i) promptly submit to Administrative Agent such additional duly completed and signed copies of one of such forms (or such successor forms as shall be adopted 71
    • from time to time by the relevant United States taxing authorities) as may then be available under then current United States laws and regulations to avoid, or such evidence as is satisfactory to Borrowers and Administrative Agent of any available exemption from or reduction of, United States withholding taxes in respect of all payments to be made to such Person by Borrowers pursuant to this Agreement, (ii) promptly notify Administrative Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction, and (iii) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of applicable Laws that Borrowers make any deduction or withholding for taxes from amounts payable to such Person. If such Person fails to deliver the above forms or other documentation, then Administrative Agent may withhold from any interest payment to such Person an amount equivalent to the applicable withholding tax imposed by Sections 1441 and 1442 of the Code, without reduction. (b) Upon the request of Administrative Agent, each Lender that is a “United States person” within the meaning of Section 7701(a)(30) of the Code shall deliver to Administrative Agent two duly signed completed copies of IRS Form W-9. If such Lender fails to deliver such forms, then Administrative Agent may withhold from any interest payment to such Lender an amount equivalent to the applicable back-up withholding tax imposed by the Code, without reduction. (c) If any Governmental Authority asserts that Administrative Agent did not properly withhold or backup withhold, as the case may be, any tax or other amount from payments made to or for the account of any Lender, such Lender shall indemnify Administrative Agent therefor, including all penalties and interest, any taxes imposed by any jurisdiction on the amounts payable to Administrative Agent under this Section, and costs and expenses (including Attorney Costs) of Administrative Agent. The obligation of Lenders under this Section shall survive the termination of the Aggregate Commitments, repayment of all Obligations and the resignation of Administrative Agent. 10.19 Surety Waivers. In the event that either Borrower is deemed to be a guarantor or a surety with respect to the Obligations under this Agreement, then such Borrower shall be deemed to have agreed to the provisions of Sections 7 and 8 of the Master Subsidiary Guaranty. 10.20 No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby, each Borrower acknowledges and agrees that: (i) the credit facilities provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document) are an arm’s-length commercial transaction between Borrowers and their respective Affiliates, on the one hand, and the Administrative Agent and the Arranger, on the other hand, and each Borrower is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver or other modification hereof or thereof); (ii) in connection with the process leading to such transaction, the Administrative Agent and the Arranger each is and has been acting solely as a principal and is 72
    • not the financial advisor, agent or fiduciary, for Borrowers or any of their respective Affiliates, stockholders, creditors or employees or any other Person; (iii) neither the Administrative Agent nor the Arranger has assumed or will assume an advisory, agency or fiduciary responsibility in favor of either Borrower with respect to any of the transactions contemplated hereby or the process leading thereto, including with respect to any amendment, waiver or other modification hereof or of any other Loan Document (irrespective of whether the Administrative Agent or the Arranger has advised or is currently advising Borrowers or any of their respective Affiliates on other matters) and neither the Administrative Agent nor the Arranger has any obligation to either Borrower or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; (iv) the Administrative Agent and the Arranger and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of Borrowers and their respective Affiliates, and neither the Administrative Agent nor the Arranger has any obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (v) neither the Administrative Agent nor the Arranger has provided nor will either of them provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Loan Document) and each Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate. Each Borrower hereby waives and releases, to the fullest extent permitted by law, any claims that it may have against the Administrative Agent and the Arranger with respect to any breach or alleged breach of agency or fiduciary duty. [Remainder of page left intentionally blank] 73
    • IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be duly executed as of the date first above written. RELIANCE STEEL & ALUMINUM CO., a California corporation By: /s/ David H. Hannah Name: David H. Hannah Title: Chairman and Chief Executive Officer By: /s/ Karla Lewis Name: Karla Lewis Title: Executive Vice President and Chief Financial Officer RSAC MANAGEMENT CORP., a California corporation By: /s/ David H. Hannah Name: David H. Hannah Title: Chief Executive Officer By: /s/ Karla Lewis Name: Karla Lewis Title: Executive Vice President and Chief Financial Officer S-1
    • BANK OF AMERICA, N.A., as Administrative Agent By: /s/ Ken Puro Name: Ken Puro Title: Vice President S-2
    • BANK OF AMERICA, N.A., as Lender By: /s/ Matthew Koenig Name: Matthew Koenig Title: Senior Vice President S-3
    • JPMORGAN CHASE BANK, N.A., as Lender By: /s/ Clara Sohan Name: Clara Sohan Title: Vice President S-4
    • UBS LOAN FINANCE LLC, as Lender By: /s/ Richard L. Tavrow Name: Richard L. Tavrow Title: Director By: /s/ David B. Julie Name: David B. Julie Title: Assistant Director S-5
    • WELLS FARGO BANK, N.A., as Lender By: /s/ David W. Shaw Name: David W. Shaw Title: Vice President S-6
    • RAYMOND JAMES BANK, FSB, as Lender By: /s/ Joseph A. Ciccolini Name: Joseph A. Ciccolini Title: Vice President – Senior Corporate Banker S-7
    • SUNTRUST BANK, as Lender By: /s/ Baebel Freundenthaler Name: Baebel Freundenthaler Title: Vice President S-8
    • CITIZENS BANK OF PENNSYLVANIA, as Lender By: /s/ Euclid R. Noble Name: Euclid R. Noble Title: VP S-9
    • U.S. BANK NATIONAL ASSOCIATION, as Lender By: /s/ Richard J. Ameny, Jr. Name: Richard J. Ameny, Jr. Title: Vice President S-10
    • BANK OF THE WEST, as Lender By: /s/ Craig Takeshige Name: Craig Takeshige Title: Vice President S-11
    • CHANG HWA COMMERCIAL BANK, LTD., LOS ANGELES BRANCH, as Lender By: /s/ Beverly Chen Name: Beverly Chen Title: VP and General Manager S-12
    • TAIPEI FUBON COMMERCIAL BANK CO., LTD., NEW YORK AGENCY, as Lender By: /s/ Sophia Jing Name: Sophia Jing Title: FVP & General Manager S-13
    • FIRST COMMERCIAL BANK, LOS ANGELES BRANCH, as Lender By: /s/ Larry Jen-Yu Lai Name: Larry Jen-Yu Lai Title: SAVP & Deputy General Manager S-14
    • UNION BANK OF CALIFORNIA, N.A., as Lender By: /s/ Peter Thompson Name: Peter Thompson Title: Vice President S-15
    • MEGA INTERNATIONAL COMMERCIAL BANK CO., LTD., LOS ANGELES BRANCH, as Lender By: /s/ Chia Jang Liu Name: Chia Jang Liu Title: SVP & General Manager S-16
    • TAIWAN BUSINESS BANK, as Lender By: /s/ Ben Chou Name: Ben Chou Title: V.P. & General Manager S-17
    • SCHEDULE 10.2 ADMINISTRATIVE AGENT’S OFFICE; CERTAIN ADDRESSES FOR NOTICES RELIANCE STEEL & ALUMINUM CO., as Borrower Address for Notices: Reliance Steel & Aluminum Co. 350 S. Grand Avenue, Suite 5100 Los Angeles, California 90071 Attention: Brenda Miyamoto Vice President and Corporate Controller Telephone: 213-576-2430 Facsimile: 213-576-8821 E-mail: bmiyamoto@rsac.com RSAC MANAGEMENT CORP., as Borrower Address for Notices: RSAC Management Corp. 350 S. Grand Avenue, Suite 5100 Los Angeles, California 90071 Attention: Brenda Miyamoto Vice President and Corporate Controller Telephone: 213-576-2430 Facsimile: 213-576-8821 E-mail: bmiyamoto@rsac.com BANK OF AMERICA, N.A., as Administrative Agent Notices (other than Requests for Extensions of Credit): Bank of America, N.A. 800 Fifth Avenue, Floor 17 Seattle, WA 98104 Mail Code: WA1-501-17-32 Attention: Ken Puro Telephone: 206-358-0138 Facsimile: 415-343-0559 E-mail: ken.puro@bankofamerica.com Schedule 10.2-1
    • Requests for Extensions of Credit and Notices of Payment: Bank of America, N.A. 2001 Clayton Road, 2 nd Floor Concord, CA 94520 Mail Code: CA4-702-02-25 Attention: Remy David Telephone: 925-675-8416 Facsimile: 888-217-4730 E-mail: remedios.a.david@bankofamerica.com Payments: Bank of America, N.A. Dallas, TX ABA No. 111000012 Account No: 3750836479 Account Name: Corporate FTA Attention: Remy David Reference: Reliance Steel Schedule 10.2-2
    • RELIANCE STEEL & ALUMINUM CO. RSAC MANAGEMENT CORP. FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT This FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is dated as of July 31, 2008 and entered into by and among Reliance Steel & Aluminum Co., a California corporation (“RSA”), RSAC Management Corp., a California corporation (“RSAC Management” and together with RSA, jointly and severally, “Borrowers” and individually, a “Borrower”), the lenders party to the Credit Agreement (the “Lenders”) and Bank of America, N.A., as administrative agent for the Lenders (“Administrative Agent”) and is made with reference to that certain Amended and Restated Credit Agreement dated as of November 9, 2006 (the “Credit Agreement”), by and among Borrowers, Lenders and Administrative Agent. Capitalized terms used herein without definition shall have the same meanings herein as set forth in the Credit Agreement. RECITALS WHEREAS, Borrowers have agreed to acquire PNA (as hereinafter defined). WHEREAS, in connection with the PNA Acquisition (as hereinafter defined), Borrowers and Lenders desire to amend the Credit Agreement to (a) permit Borrowers to incur additional unsecured Indebtedness, (b) modify the definition of EBITDA with respect to Acquired Business EBITDA and (c) treat PNA Letters of Credit (as hereinafter defined) as Letters of Credit under the Credit Agreement. NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows: Section 1. AMENDMENTS TO THE CREDIT AGREEMENT 1.1 Amendments to Section 1: Definitions. A. Section 1.1 of the Credit Agreement is hereby amended by adding the following definitions in correct alphabetical order: “‘PNA’ means PNA Group Holding Corporation, a Delaware corporation. “‘PNA Acquisition’ means the Acquisition by Borrowers of PNA and its Subsidiaries.” “‘PNA Acquisition Effectiveness Time’ means the time when the PNA Acquisition becomes effective.”
    • “‘PNA Letters of Credit’ means the letters of credit issued by Bank of America for the account of PNA and its Subsidiaries, at or prior to the PNA Acquisition Effectiveness Time by Borrowers.” “‘Term Loan’ means a term loan in an aggregate amount not to exceed $500,000,000 made to Borrowers under that certain Credit Agreement dated as of July 31, 2008 among Borrowers, Bank of America, N.A., as Administrative Agent, the Lenders and other parties thereto.” B. The definitions of “EBITDA,” and “Letter of Credit” in Section 1.1 of the Credit Agreement are deleted in their entirety and replaced with the following definitions: “‘EBITDA’ means, with respect to any Person and with respect to any fiscal period, the sum of (a) Net Income of that Person for that period, plus (b) any non-operating non-recurring loss reflected in such Net Income, minus (c) any non-operating non-recurring gain reflected in such Net Income, plus (d) Interest Expense of that Person for that period, plus (e) the aggregate amount of federal and state taxes on or measured by income of that Person for that period (whether or not payable during that period), plus (f) depreciation, amortization and all other non-cash expenses of that Person for that period, plus (g) Acquired Business EBITDA, in each case as determined in accordance with GAAP, and adjusted by subtracting equity in earnings in 50% or less owned companies and joint ventures and, to the extent approved by Administrative Agent (which approval shall not be unreasonably withheld), any other companies not consolidated with Borrowers, and by adding Cash dividends received from 50% or less owned companies and joint ventures and, to the extent approved by Administrative Agent (which approval shall not be unreasonably withheld), any other companies not consolidated with Borrowers; provided that Acquired Business EBITDA with respect to any Acquired Business shall only be included in EBITDA if financial statements of such Acquired Business, within the preceding twelve months, either were (i) audited by an independent accounting firm, (ii) reviewed by an independent accounting firm as long as such reviewed and unaudited Acquired Business EBITDA does not exceed 10% of the total audited EBITDA of RSA and its Subsidiaries, or, (iii) subject to consent of the Requisite Lenders, unaudited or reviewed by an independent accounting firm.” “‘Letter of Credit’ means any of the letters of credit issued by the Issuing Lender hereunder, including the Existing Letters of Credit and the PNA Letters of Credit, either as originally issued or as the same may be supplemented, amended, renewed or extended.” 1.2 Amendment to Section 7:3. Indebtedness. Subsection (g) of Section 7.3 of the Credit Agreement is hereby amended by deleting it in its entirety and substituting therefor the following: 2
    • “(g) Unsecured indebtedness for borrowed money of Borrowers (which may be guaranteed by Subsidiaries of RSA which are party to the Master Subsidiary Guaranty) issued after the Closing Date (i) in the aggregate principal amount of not more than $500,000,000 and (ii) under the Term Loan; provided, however, that the documentation evidencing such Indebtedness described in clause (i) and clause (ii) above shall contain covenants no more restrictive than in this Agreement and shall be on terms and conditions (including the maturity date and amortization schedule) acceptable to Administrative Agent;” Section 2. NOVATION OF LETTER OF CREDIT OBLIGATIONS Concurrently with the PNA Acquisition Effectiveness Time, Borrowers, the Issuing Lender and Bank of America, as issuer of the PNA Letters of Credit (in such capacity, the “PNA Issuing Bank”), agree, and Borrowers shall cause PNA and its Subsidiaries to agree that: 2.1 Novation and Acceptance. (a) All of the rights, liabilities duties and obligations of PNA and of its Subsidiaries under the PNA Letters of Credit are transferred by novation, and acceptance thereof, to Borrowers (b) all of the rights, liabilities, duties and obligations of the PNA Issuing Bank under the PNA Letters of Credit are transferred by novation and acceptance thereof to the Issuing Lender, with the effect that the PNA Letters of Credit shall become Letters of Credit under the Credit Agreement in respect of which Borrowers have joint and several obligations in accordance with the Credit Agreement, 2.2 Release of PNA and PNA Issuing Bank. PNA and the PNA Issuing Bank are each released and discharged from further obligations to each other in respect of the PNA Letters of Credit and their respective rights against each other in respect thereof are cancelled, provided that such release and discharge shall not affect any rights, liabilities or obligations with respect to payments or other obligations due and payable or due to be performed prior to the PNA Acquisition Effectiveness Time and such payments and obligations shall be paid or performed in accordance with their respective agreements and duties in respect of the PNA Letters of Credit; and 2.3 Undertaking of Obligations of PNA and PNA Issuing Bank. Each of Borrowers, on the one hand, and Issuing Lender, on the other hand, undertake liabilities and obligations toward the other and acquire rights against the other as if the PNA Letters of Credit were issued as Letters of Credit under the Credit Agreement as of the PNA Acquisition Effectiveness Time. Section 3. CONDITIONS TO EFFECTIVENESS This Amendment shall become effective when all of the following conditions precedent have been satisfied (the date of satisfaction of such conditions being referred to herein as the “First Amendment Effective Date”): 3
    • A. Administrative Agent shall have received all of the following, and each in form and substance satisfactory to Administrative Agent: (i) at least one original, telecopied or electronically delivered counterpart of this Amendment executed by Requisite Lenders, Borrowers, Guarantors and Administrative Agent; (ii) notice from Borrowers that all conditions precedent to the effectiveness of the PNA Acquisition have been satisfied; and (iii) such other assurances, certificates, documents, consents or opinions as Administrative Agent may reasonably require. B. Borrowers shall have executed a fee letter with Arranger and Administrative Agent, and Arranger shall have received (on account of Lenders) the fees that are due and payable thereunder. C. Attorney Costs of Bank of America to the extent invoiced prior to or on the First Amendment Effective Date, plus such additional amounts of Attorney Costs as shall constitute Bank of America’s reasonable estimate of Attorney Costs incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not hereafter preclude final settling of accounts between Borrowers and Bank of America) shall have been paid. D. On or before the First Amendment Effective Date, all corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incidental thereto not previously found acceptable by Administrative Agent, acting on behalf of Lenders, and its counsel shall be reasonably satisfactory in form and substance to Administrative Agent and such counsel, and Administrative Agent and such counsel shall have received all such counterpart originals or certified copies of such documents as Administrative Agent may reasonably request. Section 4. BORROWERS’ REPRESENTATIONS AND WARRANTIES In order to induce Lenders to enter into this Amendment and to amend the Credit Agreement in the manner provided herein, Borrowers, jointly and severally, represent and warrant to each Lender that the following statements are true, correct and complete (both before and after giving effect to the PNA Acquisition): 4.1 Corporate Power and Authority. Each Borrower has all requisite corporate power and authority to enter into this Amendment and to carry out the transactions contemplated by, and perform its obligations under, the Credit Agreement as amended by this Amendment (the “Amended Agreement”). 4.2 Authorization of Agreements. The execution and delivery of this Amendment have been duly authorized by all necessary corporate action on the part of each Borrower. 4
    • 4.3 No Conflict. The execution and delivery by each Borrower of this Amendment, and the consummation of the transactions contemplated hereby do not and will not (i) violate any provision of any law or any governmental rule or regulation applicable to Borrowers or any of their Subsidiaries, the certificate or articles of incorporation or bylaws of Borrowers or any of their Subsidiaries or any order, judgment or decree of any court or other agency of government binding on Borrowers or any of their Subsidiaries, (ii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any Contractual Obligation to which either Borrower or any of its Subsidiaries is a party or by which either Borrower or any of its Subsidiaries or any of its or their Property is bound or affected, other than (1) conflicts that will be resolved on or before the First Amendment Effective Date or (2) conflicts that could not reasonably be expected to have a Material Adverse Effect. 4.4 Governmental Consents. The execution and delivery by Borrowers of this Amendment and the performance by Borrowers of the Amended Agreement do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any federal, state or other Governmental Authority or regulatory body, except such consent and approval which have been obtained on or prior to the First Amendment Effective Date or registration or notice which have been made on or prior to the First Amendment Effective Date. 4.5 Binding Obligation. This Amendment has been duly executed and delivered by Borrowers and is the legally valid and binding obligation of Borrowers, enforceable against them in accordance with its terms, except as the same as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability. 4.6 Representations and Warranties From Credit Agreement. The representations and warranties contained in Section 5 of the Amended Credit Agreement are and will be true, correct and complete in all material respects on and as of the First Amendment Effective Date, except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects on and as of such earlier date. 4.7 Absence of Default. No event has occurred and is continuing or will result from the consummation of the transactions contemplated by this Amendment that would constitute a Default or an Event of Default. Section 5. MISCELLANEOUS 5.1 Reference to and Effect on the Credit Agreement and the Other Loan Documents. A. On and after the First Amendment Effective Date, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to the “Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement shall mean and be a reference to the Amended Agreement. 5
    • B. Except as specifically amended by this Amendment, the Credit Agreement, the Master Subsidiary Guaranty and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed. C. The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of Administrative Agent or any Lender under, the Credit Agreement, the Master Subsidiary Guaranty or any of the other Loan Documents. 5.2 Headings. Section and subsection headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose or be given any substantive effect. 5.3 Applicable Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. 5.4 Counterparts; Effectiveness. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. [Remainder of page intentionally left blank] 6
    • IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above. BORROWERS: RELIANCE STEEL & ALUMINUM CO., a California corporation By: /s/ David H. Hannah Name: David H. Hannah Title: Chairman and Chief Executive Officer By: /s/ Karla Lewis Name: Karla Lewis Title: Executive Vice President and Chief Financial Officer RSAC MANAGEMENT CORP., a California corporation By: /s/ David H. Hannah Name: David H. Hannah Title: Chief Executive Officer By: /s/ Karla Lewis Name: Karla Lewis Title: Executive Vice President and Chief Financial Officer S-1
    • BANK OF AMERICA, N.A., as Administrative Agent By: /s/ Ken Puro Name: Ken Puro Title: Vice President S-2
    • BANK OF AMERICA, N.A., as Issuing Lender, Swing Line Lender and a Lender By: /s/ Matthew Koenig Name: Matthew Koenig Title: Senior Vice President S-3
    • WACHOVIA BANK, N.A., as Syndication Agent and a Lender By: /s/ Barbara VanMeerten Name: Barbara VanMeerten Title: Director S-4
    • CITICORP NORTH AMERICA, INC., as Co-Documentation Agent and a Lender By: /s/ Peter Olnowich Name: Peter Olnowich Title: Vice President S-5
    • JPMORGAN CHASE BANK, N.A. as Co-Documentation Agent and a Lender By: /s/ Clara Sohan Name: Clara Sohan Title: Vice President S-6
    • WELLS FARGO BANK, N.A., as a Lender By: /s/ David W. Shaw Name: David W. Shaw Title: Vice President S-7
    • KEYBANK NATIONAL ASSOCIATION, as a Lender By: /s/ Suzannah Harris Name: Suzannah Harris Title: Vice President S-8
    • UNION BANK OF CALIFORNIA, N.A., as a Lender By: /s/ Peter Thompson Name: Peter Thompson Title: Vice President S-9
    • U.S. BANK NATIONAL ASSOCIATION, as a Lender By: /s/ Richard J. Ameny, Jr. Name: Richard J. Ameny, Jr. Title: Vice President S-1
    • CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as a Lender By: /s/ Ian Nalitt Name: Ian Nalitt Title: Director By: /s/ Morenikeji Ajayi Name: Morenikeji Ajayi Title: Associate S-2
    • UBS LOAN FINANCE LLC, as a Lender By: /s/ Richard L. Tavrow Name: Richard L. Tavrow Title: Director By: /s/ Irja R. Otsa Name: Irja R. Otsa Title: AssociateDirector S-3
    • FIFTH THIRD BANK, as a Lender By: /s/ Gary S. Losey Name: Gary S. Losey Title: Vice President S-4
    • BNP PARIBAS, as a Lender By: /s/ Katherine Wolfe Name: Katherine Wolfe Title: Managing Director By: /s/ Sandy Bertram Name: Sandy Bertram Title: Vice President S-5
    • MIZUHO CORPORATE BANK, LTD., as a Lender By: /s/ Toru Inoue Name: Toru Inoue Title: Deputy General Manager S-6
    • THE NORTHERN TRUST COMPANY, as a Lender By: /s/ John Burda Name: John Burda Title: Senior Vice President S-7
    • CONSENT AND AGREEMENT OF GUARANTORS THIS CONSENT AND AGREEMENT OF GUARANTORS (“Consent”) is executed and delivered as of First Amendment Effective Date by the undersigned (the “Guarantors”), in favor of the Lenders and Administrative Agent under the Amended Agreement (as defined in the foregoing Amendment). Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to them in the Amended Agreement. WITNESSETH: WHEREAS, the Guarantors have executed and delivered the Master Subsidiary Guaranty under the Amended Agreement; and WHEREAS, it is a condition to the foregoing Amendment that the Guarantors shall have executed this Consent; NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Guarantors hereby consent to the Amendment and agree that the Guaranty continues in full force and effect. IN WITNESS WHEREOF, each Guarantor has executed this Guaranty by its duly authorized officer as of the date first written above. GUARANTORS: ALLEGHENY STEEL DISTRIBUTORS, INC. ALUMINUM AND STAINLESS, INC. CCC STEEL, INC. CHAPEL STEEL CORP. CHATHAM STEEL CORPORATION CLAYTON METALS, INC. CREST STEEL CORPORATION DURRETT SHEPPARD STEEL CO., INC. ENCORE METALS (U.S.A.), INC. PACIFIC METAL COMPANY PDM STEEL SERVICE CENTERS, INC. PHOENIX CORPORATION TOMA METALS, INC. VIKING MATERIALS, INC. YARDE METALS, INC. By: Name: Karla Lewis Title: Vice President and Secretary of each of the foregoing 1
    • EARLE M. JORGENSEN COMPANY PRECISION STRIP, INC. PRECISION STRIP TRANSPORT, INC. SISKIN STEEL & SUPPLY COMPANY, INC. By: Name: Karla Lewis Title: Vice President and Assistant Secretary of each of the foregoing LUSK METALS SERVICE STEEL AEROSPACE CORP. By: Name: Karla Lewis Title: Chief Financial Officer and Secretary of each of the foregoing AMERICAN METALS CORPORATION By: Name: Karla Lewis Title: Vice President, Chief Financial Officer and Assistant Secretary of the foregoing AMERICAN STEEL, L.L.C. By: Name: Karla Lewis Title: Chief Financial Officer, Treasurer and Assistant Secretary of the foregoing AMI METALS, INC. By: Name: Karla Lewis Title: Vice President, Chief Financial Officer and Secretary of the foregoing 2
    • LIEBOVICH BROS., INC. LBT, INC. By: Name: Karla Lewis Title: Vice President, Assistant Treasurer and Assistant Secretary of the foregoing 3
    • PNA GROUP, INC. 10 3/4% Senior Notes due 2016 FOURTH SUPPLEMENTAL INDENTURE Dated as of August 1, 2008 with respect to INDENTURE Dated as of August 15, 2006 THE BANK OF NEW YORK MELLON, as Trustee
    • FOURTH SUPPLEMENTAL INDENTURE FOURTH SUPPLEMENTAL INDENTURE dated as of August 1, 2008 (this “Fourth Supplemental Indenture”) by and among PNA Group, Inc., a corporation duly organized and existing under the laws of the State of Delaware (the “Company”), the Guarantors (as that term is defined in the Indenture) and The Bank of New York Mellon, a New York banking association, as trustee (the “Trustee”) under the Indenture (as hereinafter defined). RECITALS OF THE COMPANY WHEREAS, the Company has heretofore executed and delivered to The Bank of New York Mellon, an Indenture (as amended, supplemented or otherwise modified, the “Indenture”) dated as of August 15, 2006, providing for the issuance of the Company’s 103/4% Senior Notes due 2016 (the “Notes”), initially in the aggregate principal amount of $250,000,000. WHEREAS, pursuant to and in accordance with Section 9.2 of the Indenture, Reliance Steel & Aluminum Co. (“Reliance”), the parent corporation of the Company, has obtained on behalf of the Company, on or prior to the date hereof, the consent of the Holders of the Notes representing not less than a majority in aggregate principal amount of the outstanding Notes to the amendments to the Indenture set forth in this Fourth Supplemental Indenture. WHEREAS, Reliance has solicited the consents of the Holders of the Notes pursuant to the Offer to Purchase and Consent Solicitation Statement dated July 1, 2008 (as the same may be amended or supplemented from time to time, the “Statement”), and in the related Letter of Transmittal and Consent (as the same may be amended or supplemented from time to time, together with the Statement, the “Offer”), to the proposed amendments to the Indenture upon the terms and conditions set forth therein (the “Amendments”); WHEREAS, Reliance has received and delivered or caused to be delivered to the Trustee the consents of the Holders of at least a majority in aggregate principal amount of the outstanding Notes to the Amendments pursuant to the Offer; WHEREAS, the Company has been authorized by resolution of its board of directors to enter into this Supplemental Indenture; WHEREAS, the Company has requested that the Trustee join in the execution and delivery of this Supplemental Indenture; WHEREAS, all other acts and proceedings required by law, by the Indenture and by the articles of incorporation and bylaws of the Company to make this Supplemental Indenture a valid and binding agreement for the purposes
    • expressed herein, in accordance with its terms, have been duly done and performed; and WHEREAS, the Amendments contained herein will become operative (the “Operative Date”) upon Reliance’s acceptance for payment of at least a majority in aggregate principal amount of the outstanding Notes that are validly tendered and not withdrawn pursuant to the Offer. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, it is mutually covenanted and agreed for the equal and ratable benefit of the Holders of the Notes as follows: ARTICLE 1 AMENDMENTS TO INDENTURE Section 1.01. (a) Sections 4.3 and 4.4 of the Indenture shall be amended by deleting the text in such Sections in their entirety and replacing them with “The Company shall comply with Section 314 of the Trust Indenture Act.” (b) Sections 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.15, 4.17, 4.20, 4.21 and 4.22 of the Indenture shall be amended by deleting the text of such Sections in their entirety and replacing them with “[Intentionally Omitted],” and all references made thereto throughout the Indenture and the Notes shall be deleted in their entirety. (c) Subclauses (ii), (iii) and (iv) of Section 5.1 of the Indenture shall be amended by deleting the text of such subclauses in their entirety and replacing them with “[Intentionally Omitted],” and the paragraph immediately following Section 5.1(iv) shall be amended by deleting such text in its entirety and all references made thereto throughout the Indenture and the Notes shall be deleted in their entirety. (d) Subclauses (3), (4), (5), (6) and (7) of Section 6.1 of the Indenture shall be amended by deleting the text of such subclauses in their entirety and replacing them with “[Intentionally Omitted],” and all references made thereto throughout the Indenture and the Notes shall be deleted in their entirety. (e) To the extent that any defined term is used exclusively in the article, sections, subclauses and paragraphs deleted pursuant to subclauses (a) – (d) above, Section 1.1 of the Indenture shall be amended by deleting the definitions for such defined terms. 2
    • ARTICLE 2 AMENDMENTS TO NOTES Section 2.01. The Notes are deemed to be amended as follows: (a) The reference to Section 4.10 in Section 6 “Mandatory Redemption” on the reverse of the form of Note is deleted. (b) The reference to “an Asset Sale Offer or” in clause (c) of Section 7 “Repurchase at the Option of Holder” on the reverse of the form of Note is deleted. (c) Clauses (3), (4), (5), (6) and (7) of Section 13 “Defaults and Remedies” on the reverse of the form of Note are deleted. ARTICLE 3 MISCELLANEOUS Section 3.01. This Fourth Supplemental Indenture will become effective immediately upon its execution and delivery but the amendments in such Fourth Supplemental Indenture set forth in Article 1 and Article 2 hereof will only become operative on the Operative Date. Section 3.02. The Indenture, as supplemented by this Fourth Supplemental Indenture, is in all respects ratified and confirmed, and this Fourth Supplemental Indenture shall be deemed a part of the Indenture in the manner and to the extent herein and therein provided. Section 3.03. The recitals herein shall be taken as the statements solely of the Company, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representations as to, and shall not be responsible in any manner whatsoever for or in respect of, the validity or sufficiency of this Fourth Supplemental Indenture. Section 3.04. All agreements of the Issuer in this Fourth Supplemental Indenture and the Notes and any Note Guarantees, as applicable, shall bind their respective successors and assigns. All agreements of the Trustee in this Fourth Supplemental Indenture shall bind its successors and assigns. Section 3.05. This Fourth Supplemental Indenture shall be governed by, and construed in accordance with, the law of the State of New York. Section 3.06. In case any provision in this Fourth Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 3
    • Section 3.07. The parties may sign any number of copies of this Fourth Supplemental Indenture. Each signed copy shall be an original, but all of them together shall represent the same agreement. Section 3.08. Capitalized terms not otherwise defined in this Fourth Supplemental Indenture shall have the respective meanings assigned to them in the Indenture. [signature pages follow] 4
    • IN WITNESS WHEREOF, this Fourth Supplemental Indenture has been duly executed as of the date first-above written. PNA GROUP, INC. By: /s/ Karla Lewis Name: Karla Lewis Title: Vice President and Secretary PRECISION FLAMECUTTING & STEEL, L.P. By: Precision GP Holding, LLC, its general partner By: /s/ Karla Lewis Name: Karla Lewis Title: Vice President and Secretary SUGAR STEEL CORPORATION By: /s/ Karla Lewis Name: Karla Lewis Title: Vice President and Secretary S&S STEEL WAREHOUSE, INC. By: /s/ Karla Lewis Name: Karla Lewis Title: Vice President and Secretary SMITH PIPE & STEEL COMPANY By: /s/ Karla Lewis Name: Karla Lewis Title: Vice President and Secretary INFRA-METALS CO. By: /s/ Karla Lewis Name: Karla Lewis Title: Vice President and Secretary FERALLOY CORPORATION By: /s/ Karla Lewis Name: Karla Lewis Title: Vice President and Secretary
    • DELNOR CORPORATION By: /s/ Karla Lewis Name: Karla Lewis Title: Vice President and Secretary DELTA STEEL, L.P. By: Delta GP, L.L.C., its general partner By: /s/ Karla Lewis Name: Karla Lewis Title: Vice President and Secretary By: Delta LP, L.L.C., its limited partner By: /s/ Karla Lewis Name: Karla Lewis Title: Vice President and Secretary DELTA GP, L.L.C. By: /s/ Karla Lewis Name: Karla Lewis Title: Vice President and Secretary DELTA LP, L.L.C. By: /s/ Karla Lewis Name: Karla Lewis Title: Vice President and Secretary METALS SUPPLY COMPANY, LTD. By: MSC Management, Inc., its general partner By: /s/ Karla Lewis Name: Karla Lewis Title: Vice President and Secretary By: PNA Group, Inc., its limited partner By: /s/ Karla Lewis Name: Karla Lewis Title: Vice President and Secretary MSC MANAGEMENT, INC. By: /s/ Karla Lewis Name: Karla Lewis Title: Vice President and Secretary 6
    • THE BANK OF NEW YORK MELLON, as Trustee By: /s/ Timothy Casey Name: Timothy Casey Title: Assistant Treasurer 7
    • Exhibit 99.1 NEWS RELEASE FOR IMMEDIATE RELEASE CONTACT: Kim P. Feazle Investor Relations (713) 610-9937 (213) 576-2428 kfeazle@rsac.com investor@rsac.com RELIANCE STEEL & ALUMINUM CO. COMPLETES PNA GROUP ACQUISITION FOR $1.1 BILLION; RAISES $500 MILLION IN A NEW SENIOR UNSECURED TERM LOAN; AND SETTLES CASH TENDER OFFERS FOR PNA’S SENIOR NOTES Los Angeles, CA — August 4, 2008 — Reliance Steel & Aluminum Co. (NYSE:RS) announced today that it has completed the previously announced acquisition of the outstanding capital stock of PNA Group Holding Corporation, a national steel service center group. The transaction value of approximately $1.065 billion included approximately $725 million of PNA’s debt that was repaid or refinanced, including the settlement of Reliance’s cash tender offers for 100% of PNA’s outstanding notes. Reliance funded the purchase of PNA with proceeds from its new $500 million senior unsecured term loan and borrowings under Reliance’s existing $1.1 billion credit facility. PNA’s subsidiaries include the operating entities Delta Steel, LP, Feralloy Corporation, Infra-Metals Co., Metals Supply Company, Ltd., Precision Flamecutting and Steel, LP and Sugar Steel Corporation. Through its subsidiaries, PNA processes and distributes primarily carbon steel plate, bar, structural and flat-rolled products. PNA had revenues for the six months ended June 30, 2008 of about $1.1 billion. PNA operates 23 steel service centers throughout the United States, as well as five joint ventures with seven additional service centers in the United States and Mexico. “We are very pleased to have completed this acquisition. PNA is a strong fit for Reliance’s continued growth strategy as it complements our existing business, adds new products in new areas, and enhances our product, geographic and customer diversification which have been key factors in our success. We also continue to have a solid balance sheet with a pro forma net debt-to-total capital ratio of about 50% and availability under our $1.1 billion credit facility of about $200 million. Our weighted average borrowing cost for the financing of the PNA acquisition is approximately 4.0%,” said David H. Hannah, Chairman and Chief Executive Officer. (more)
    • 2-2-2 In addition, Reliance entered into a new $500 million senior unsecured term loan on July 31, 2008. The proceeds were used to fund the purchase of PNA, including the repayment of PNA’s debt. Banc of America Securities LLC was the sole lead arranger of the term loan. Reliance also announced today that it has settled its cash tender offers to purchase any and all of the outstanding PNA Group, Inc. 10.75% Senior Notes due 2016 (the “Fixed Rate Notes”) and any and all of the outstanding PNA Intermediate Holding Corporation Senior Floating Rate Toggle Notes due 2013 (the “Floating Rate Notes”, collectively the “Notes”). The tender offers expired on August 1, 2008. Reliance accepted for payment all Notes validly tendered and not withdrawn pursuant to the tender offers. All of the $250 million aggregate outstanding principal amount of Fixed Rate Notes and all of the $170 million aggregate outstanding principal amount of Floating Rate Notes were validly tendered and not withdrawn pursuant to the tender offers therefor. The total amount paid to settle the purchase of the Notes, including the consent payments and accrued and unpaid interest, was $489.9 million. Citi was the sole Dealer Manager for the tender offers and consent solicitations. Global Bondholder Services Corporation was the Information Agent and the Depositary for the tender offers and the consent solicitations. Reliance Steel & Aluminum Co., headquartered in Los Angeles, California, is the largest metals service center company in North America. Through a network of more than 200 locations in 38 states and Belgium, Canada, China, Mexico, South Korea and the United Kingdom, the Company provides value-added metals processing services and distributes a full line of over 100,000 metal products to more than 125,000 customers in a broad range of industries. Reliance Steel & Aluminum Co.’s press releases and additional information are available on the Company’s web site at www.rsac.com. The Company was named to the 2008 “Fortune 500” List, the Fortune 2008 List of “America’s Most Admired Companies” the 2008 Forbes “America’s Best Managed Companies” List, and the 2008 Forbes “Platinum 400 List of America’s Best Big Companies.” This release may contain forward-looking statements. Actual results and events may differ materially as a result of a variety of factors, many of which are outside of Reliance Steel & Aluminum Co.’s control. Risk factors and additional information are included in Reliance Steel & Aluminum Co.’s reports on file with the Securities and Exchange Commission, including Reliance Steel & Aluminum Co.’s Annual Report on Form 10-K for the year ended December 31, 2007, and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2008 and June 30, 2008. ###
    • Exhibit 99.2 OFFER TO PURCHASE AND CONSENT SOLICITATION STATEMENT RELIANCE STEEL & ALUMINUM CO. Offer to Purchase for Cash any and all outstanding 103/4% Senior Notes due 2016 issued by PNA Group, Inc. (CUSIP No. 69346R AB4, the “Fixed Notes”) and outstanding Senior Floating Rate Toggle Notes due 2013 issued by PNA Intermediate Holding Corporation (CUSIP No. 693463 AB7, the “Floating Notes” and, together with the Fixed Notes, the “Notes”) Solicitation of Consents to amend the Indenture for the Fixed Notes dated August 15, 2006, as amended (the “Fixed Note Indenture”), and the Indenture for the Floating Notes dated February 12, 2007, as amended (the “Floating Note Indenture” and, together with the Fixed Note Indenture, the “Indentures”) Each Tender Offer will expire at 5:00 p.m., New York City time, on August 1, 2008, unless extended or earlier terminated by Reliance Steel & Aluminum Co. in its sole discretion (such time and date, as the same may be extended or earlier terminated, the “Expiration Date”). Each Consent Solicitation will expire at 5:00 p.m., New York City time, on July 15, 2008, unless extended or earlier terminated (such time and date, as the same may be extended or earlier terminated, the “Consent Date”). Tendered Notes may be withdrawn, and the related Consents may be revoked, at any time prior to the Consent Date, but not thereafter. Holders of Notes (“Holders”) who wish to tender their Notes pursuant to the Tender Offers must consent to the Amendments (as defined below) and Holders may not deliver Consents without tendering the related Notes. Holders must tender Notes and deliver their Consents on or prior to the Consent Date in order to be eligible to receive the Consent Payment. The Tender Offers are conditioned upon, among other things, the closing of the acquisition of 100% of the outstanding capital stock of PNA Group Holding Corporation (“PNA Holding”) by RSAC Management Corp. (“RSAC”) pursuant to the Stock Purchase Agreement dated June 16, 2008 by and among PNA Holding, RSAC and the stockholders of PNA Holding (the “Acquisition”). Reliance Steel & Aluminum Co., a California corporation (“Reliance,” “we” or “us”), hereby offers, upon the terms and subject to the conditions set forth in this Offer to Purchase and Consent Solicitation Statement (as the same may be amended or supplemented, the “Offer to Purchase”) and the related Letter of Transmittal and Consent (as the same may be amended or supplemented, the “Letter of Transmittal”), to purchase for cash any and all outstanding 10 3/4% Senior Notes due 2016 issued by PNA Group, Inc. (“PNA Group”) and any and all outstanding Senior Floating Rate Toggle Notes due 2013 issued by PNA Intermediate Holding Corporation (“PNA Intermediate” and, together with PNA Group, the “Issuers”) . The offer to purchase each of the Fixed Notes and the Floating Notes is a separate offer (each a “Tender Offer” and collectively, the “Tender Offers”). The total consideration for each $1,000 principal amount of Fixed Notes validly tendered and not validly withdrawn pursuant to the Tender Offer therefor is $1,205.75 (the “Total Fixed Consideration”). The Total Fixed Consideration was determined by reference to the sum of (a) 35% of $1,107.50 (being the price, as described the terms of the Fixed Notes, at which 35% principal amount of the Fixed Notes may be redeemed with the net proceeds of certain qualified equity offerings ) and (b) 65% of $1,258.66 (being an estimate of the “make-whole” redemption price for the Fixed Notes based on U.S. Treasury yields as of 11:00 a.m., New York City time, on July 1, 2008 and a spread of 50 basis points). The Total Fixed Consideration includes a consent payment of $20.00 per $1,000 principal amount of Fixed Notes purchased (the “Fixed Consent Payment”). The total consideration for each $1,000 principal amount of Floating Notes validly tendered and not validly withdrawn pursuant to the Tender Offer therefor is $1,020.00 (the “Total Floating Consideration” and, together with the Total Fixed Consideration, the “Total Consideration”). The Total Floating Consideration includes a consent payment of $20.00 per $1,000 principal amount of Floating Notes purchased (the “Floating Consent Payment” and, together with the Fixed Consent Payment, the “Consent Payments”). The Consent Payments will be made in respect of Notes validly tendered and not validly withdrawn as to which Consents (as defined below) to the Amendments are delivered on or prior to 5:00 p.m., New York City time, on July 15, 2008. Holders must validly tender and not validly withdraw Notes on or prior to the Consent Date in order to be eligible to receive the Total Consideration for such Notes purchased in the Tender Offers. Holders who validly tender their Fixed Notes after the Consent Date and on or prior to the Expiration Date will be eligible to receive an amount, paid in cash, equal to $1,185.75 per $1,000 principal amount of Fixed Notes, representing the Total Fixed Consideration less the $20.00 Fixed Consent Payment (the “Fixed Tender Offer Consideration”). Holders who validly tender their Floating Notes after the Consent Date and on or prior to the Expiration Date will be eligible to receive an amount, paid in cash, equal to $1,000 per $1,000 principal amount of Floating Notes, representing the Total Floating Consideration less the $20.00 Floating Consent Payment (the “Floating Tender Offer Consideration” and, together with the Fixed Tender Offer Consideration, the “Tender Offer Consideration”). Holders whose Notes are purchased in the Tender Offers will also be paid accrued and unpaid interest on such Notes (“Accrued Interest”) from the last interest payment date to, but not including, the settlement date for Notes purchased pursuant to the Tender Offers (the “Settlement Date”). Outstanding Total Consideration (per $1,000 Consent Payment (per $1,000 Title of Security CUSIP No. Principal Amount principal amount) principal amount)
    • PNA Group, Inc. 103/4% Senior Notes due 2016 69346R AB4 $250,000,000 $1,205.75(1) $20.00 PNA Intermediate Holding Corporation Senior Floating Rate Toggle Notes due 2013 693463 AB7 $170,000,000 $1,020.00(2) $20.00 (1) Includes the Fixed Consent Payment of $20.00 per $1,000 principal amount of Fixed Notes purchased. (2) Includes the Floating Consent Payment of $20.00 per $1,000 principal amount of Floating Notes purchased. Concurrently with the Tender Offers, Reliance is soliciting, upon the terms and subject to the conditions set forth in this Offer to Purchase and the Letter of Transmittal (which together constitute the “Consent Solicitations”), consents (“Consents”) from Holders to certain proposed amendments (the “Amendments”) to each of the Indentures and the Notes. The Amendments would eliminate substantially all of the restrictive covenants contained in the Indentures and the Notes (other than the covenants related to change of control offers) as well as certain events of default. If you tender your Notes pursuant to the Tender Offer, you must consent to the Amendments with respect to such tendered Notes. Adoption of the Amendments with respect to each Indenture requires the consent of the Holders of a majority in aggregate principal amount of outstanding Notes issued pursuant to such Indenture not owned by the Issuers or their affiliates. See “The Amendments.” Our obligation to purchase Notes under each of the Tender Offers and pay for Consents under each of the Consent Solicitations is subject to certain conditions, including the closing of the Acquisition, but the Tender Offers are not conditioned upon any minimum principal amount of the Notes being tendered or upon the receipt of Consents necessary to approve the Amendments. Neither Tender Offer is conditioned upon the completion of the other Tender Offer. Any questions or requests for assistance concerning the terms of the Tender Offers or the Consent Solicitations may be directed to Citigroup Global Markets Inc. (the “Dealer Manager”) at the address and the telephone numbers set forth on the back cover of this Offer to Purchase. Any questions or requests for assistance concerning the Tender Offers or the Consent Solicitations or for additional copies of this Offer to Purchase or the Letter of Transmittal may be directed to Global Bondholder Services Corporation (the “Information Agent”) at the address and telephone numbers set forth on the back cover of this Offer to Purchase. Beneficial owners may also contact their broker, dealer, commercial bank, trust company or other nominee (each a “Custodian”) for assistance concerning the Tender Offers and the Consent Solicitations. NONE OF RELIANCE STEEL & ALUMINUM CO., PNA HOLDING, THE ISSUERS, THE DEALER MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY (AS DEFINED HEREIN) MAKES ANY RECOMMENDATION AS TO WHETHER OR NOT HOLDERS SHOULD TENDER THEIR NOTES PURSUANT TO THE TENDER OFFERS OR DELIVER CONSENTS PURSUANT TO THE CONSENT SOLICITATIONS. EACH HOLDER MUST MAKE ITS OWN DECISION AS TO WHETHER TO TENDER ITS NOTES, WHETHER TO DELIVER ITS CONSENTS, AND, IF SO, THE PRINCIPAL AMOUNT OF THE NOTES AS TO WHICH ACTION IS TO BE TAKEN. The Dealer Manager for the Tender Offers and Consent Solicitations is: Citi July 1, 2008
    • TABLE OF CONTENTS Page IMPORTANT INFORMATION i AVAILABLE INFORMATION iv THE ACQUISITION iv SUMMARY 1 DESCRIPTION OF THE NOTES 5 PURPOSES OF THE TENDER OFFERS AND CONSENT SOLICITATIONS 5 CERTAIN SIGNIFICANT CONSIDERATIONS 6 Subsequent Redemption and Defeasance of the Notes 6 Offer to Purchase Pursuant to a Change of Control 7 Effects of the Amendments 7 Subsequent Repurchase of the Notes 7 Limited Trading Market 7 Limited Public Information 7 THE TENDER OFFERS AND CONSENT SOLICITATIONS 8 Introduction 8 Total Consideration 8 EXPIRATION DATE; CONSENT TIME; EXTENSION; AMENDMENT AND TERMINATION 9 ACCEPTANCE FOR PURCHASE AND PAYMENT 9 PROCEDURES FOR TENDERING NOTES AND DELIVERING CONSENTS 10 Tender of Notes 11 WITHDRAWAL OF TENDERS; REVOCATION OF CONSENTS AND ABSENCE OF APPRAISAL RIGHTS 13 CONDITIONS OF THE TENDER OFFERS AND CONSENT SOLICITATIONS 13 THE AMENDMENTS 14 OTHER PURCHASES OF NOTES 16 MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS 16 Tax Consequences to U.S. Holders 17 Tax Consequences to Non-U.S. Holders 19 PERSONS EMPLOYED IN CONNECTION WITH THE TENDER OFFERS AND THE CONSENT SOLICITATIONS 20 Dealer Manager 20 Information Agent and Depositary 20 Other 20 MISCELLANEOUS 20
    • IMPORTANT INFORMATION Holders should take note of the following dates in connection with the Tender Offers and Consent Solicitations: Date Calendar Date Event Commencement Date July 1, 2008 Commencement of the Tender Offers and Consent Solicitations subject to the terms and conditions set forth in the Offer to Purchase and Letter of Transmittal. Consent Date 5:00 p.m., New York City time, on July 15, The last day and time for Holders to 2008, unless extended or earlier terminated deliver their Consents pursuant to the by Reliance in its sole discretion. Consent Solicitations in order to be eligible to receive the Total Consideration including the Consent Payment. Holders validly tendering Notes and delivering Consents after the Consent Date and on or prior to the Expiration Date will be eligible to receive only the Tender Offer Consideration, namely the Total Consideration less the Consent Payment. The last day and time for Holders to validly withdraw tendered Notes and revoke delivered Consents. Expiration Date 5:00 p.m., New York City time, on August 1, The last day and time for Holders to tender 2008, unless extended or earlier terminated Notes pursuant to the Tender Offers in order by Reliance in its sole discretion. to be eligible to receive the Tender Offer Consideration and the unpaid Accrued Interest. Settlement Date For Notes that have been validly tendered and Payment of the Total Consideration and the not validly withdrawn on or prior to the unpaid Accrued Interest for all Notes validly Expiration Date and that are accepted for tendered, and not validly withdrawn on or purchase, the Settlement Date will be one prior to the Consent Date. business day following the Expiration Date, namely August 4, 2008, assuming the Payment of the Tender Offer Consideration Expiration Date is not extended. (namely, the Total Consideration less the Consent Payment) and the unpaid Accrued Interest for all Notes validly tendered, and not validly withdrawn, after the Consent Date and on or prior to the Expiration Date. Upon the terms and subject to the conditions set forth in the Offer to Purchase and Letter of Transmittal, we hereby offer to pay an amount in cash equal to the Total Consideration plus the unpaid Accrued Interest to each Holder that validly tenders its Notes and delivers Consents, and does not validly withdraw such tender or revoke such Consents, on or prior to the Consent Date. Holders who validly tender Notes and deliver Consents after the Consent Date and on or prior to the Expiration Date will be eligible to receive only the Tender Offer Consideration plus unpaid Accrued Interest. Payment of such amounts is expected to be made on the Settlement Date. If either of the Tender Offers is terminated or withdrawn by us, neither the applicable Total Consideration nor the applicable Tender Offer Consideration will be paid or become payable with respect to such terminated or withdrawn Tender Offer. If either of the Consent Solicitations is terminated or withdrawn by us, the applicable Consent Payment will not be paid or become payable with respect to such terminated or withdrawn Consent Solicitation. In the event of a termination or withdrawal of either of the Tender Offers without any Notes being i
    • purchased thereunder, the Notes tendered pursuant to such terminated or withdrawn Tender Offer will be promptly returned to the tendering Holders. Notes tendered may be validly withdrawn and Consents delivered may be validly revoked at any time on or prior to the Consent Date, but not thereafter. A valid withdrawal of tendered Notes shall be deemed a valid revocation of the related Consent. All Notes accepted for purchase in the Tender Offers will cease to accrue interest on the Settlement Date, unless Reliance defaults in the payment of amounts payable pursuant to the applicable Tender Offer and Consent Solicitation. All Notes not tendered or accepted for purchase shall continue to accrue interest. Payment for Notes validly tendered and, to the extent applicable, Consents validly delivered, and accepted for purchase will be made by our deposit of immediately available funds with Global Bondholder Services Corporation, the depositary for the Tender Offers and the Consent Solicitations (the “Depositary”), or, upon the Depositary’s instructions, to The Depository Trust Company (“DTC”), which will act as agent for the tendering Holders for the purpose of receiving payments from us and transmitting such payments to Holders entitled thereto. Reliance expressly reserves the right, in its sole discretion, subject to the requirements of applicable law, (i) to terminate or withdraw either or both of the Tender Offers or Consent Solicitations, (ii) to extend the Expiration Date or the Consent Date with respect to either or both of the Tender Offers or Consent Solicitations, (iii) to waive any of the conditions to either or both of the Tender Offers and Consent Solicitations and (iv) to amend the terms of either or both of the Tender Offers or Consent Solicitations, subject to any obligation under applicable law to extend the period of time the amended Tender Offers or Consent Solicitations remains open. The foregoing rights are in addition to our right to delay acceptance for payment of Notes tendered or Consents delivered under the Tender Offers or Consent Solicitations. From time to time after the Expiration Date, or after termination or withdrawal of the Tender Offers, we or our affiliates may acquire any Notes that are not tendered and purchased pursuant to the Tender Offers through open-market purchases, privately negotiated transactions, tender offers, exchange offers, redemptions or otherwise, upon such terms and at such prices as we may determine (or as may be provided for in the Indentures), which may be more or less than the prices offered pursuant to the Tender Offers and could be for cash or other consideration. There can be no assurance as to which, if any, of these alternatives or combinations thereof we or our affiliates will choose to pursue in the future. See “Certain Significant Considerations” and “Material U.S. Federal Income Tax Considerations” for a discussion of certain factors that should be considered in evaluating the Tender Offers and the Consent Solicitations. This Offer to Purchase does not constitute an offer to purchase Notes or a solicitation of Consents in any jurisdiction in which, or to or from any person to or from whom, it is unlawful to make such offer or solicitation under applicable securities or “blue sky” laws. Subject to applicable law, delivery of this Offer to Purchase shall not under any circumstances create any implication that the information contained herein is correct as of any time subsequent to the date hereof or that there has been no change in the information set forth herein or in the affairs of Reliance, PNA Holding, the Issuers or any of their respective subsidiaries or affiliates since the date hereof. THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE TENDER OFFERS OR THE CONSENT SOLICITATIONS. Any Holder desiring to tender Notes and deliver a Consent should either (a) complete and sign the Letter of Transmittal or a facsimile copy in accordance with the instructions contained therein, mail or deliver it and any other required documents to the Depositary, and deliver the certificates for the tendered Notes to the Depositary (or transfer such Notes pursuant to the book-entry transfer procedures described herein), (b) request the Holder’s Custodian to effect the transaction or (c) tender through DTC using its Automated Tender Offer Program (“ATOP”). A Holder with Notes held through a Custodian must contact that Custodian if such Holder desires to tender those Notes and deliver its Consent and promptly instruct such Custodian to tender such Notes and deliver its Consent on its behalf. See “Procedures for Tendering Notes and Delivering Consents.” Please note that if Notes ii
    • are held by a Custodian, the Custodian may have an earlier deadline for tendering Notes pursuant to the Tender Offers than the Expiration Date and may have an earlier deadline for delivery of Consents pursuant to the Consent Solicitations than the Consent Date. Any questions or requests for assistance or for additional copies of this Offer to Purchase, the Letter of Transmittal or any of the other offer documents may be directed to the Information Agent at the address and telephone numbers set forth on the back cover of this Offer to Purchase. A Holder may also contact the Dealer Manager at its telephone numbers set forth on the back cover of this Offer to Purchase or such Holder’s Custodian for assistance concerning the Tender Offers and the Consent Solicitations. Adoption of the Amendments may have adverse consequences to Holders whose Notes are not tendered and purchased in the Tender Offers because Notes outstanding after consummation of the Tender Offers will not be entitled to the benefit of substantially all the restrictive covenants (other than covenants related to change of control offers) and certain event of default provisions. In addition, following consummation of the Tender Offers and adoption of the Amendments, the liquidity of the trading market for any Notes that remain outstanding may be significantly reduced. See “Certain Significant Considerations” and “The Amendments.” None of Reliance Steel & Aluminum Co., PNA Holding, the Issuers, their respective management or boards of directors, the Dealer Manager, the Depositary, the Information Agent, the trustee for the Notes (the “Trustee”) or their respective affiliates makes any recommendation to any Holder as to whether to tender any Notes in connection with the Tender Offers or to deliver any Consents in connection with the Consent Solicitations. None of Reliance Steel & Aluminum Co., PNA Holding, the Issuers their management or boards of directors, the Dealer Manager, the Depositary, the Information Agent or the Trustee has authorized any person to give any information or to make any representation in connection with the Tender Offers or the Consent Solicitations other than the information and representations contained in this Offer to Purchase and the Letter of Transmittal. If anyone makes any recommendation or representation or gives any such information, you should not rely upon that recommendation, information or representation as having been authorized by Reliance Steel & Aluminum Co., PNA Holding, the Issuers, the Dealer Manager, the Depositary, the Information Agent or the Trustee. iii
    • AVAILABLE INFORMATION The Issuers file reports and other information with the Securities and Exchange Commission (the “SEC”). These filings may be inspected and copied at the public reference facilities of the SEC located at 100 F Street, N.E., Washington, D.C. Copies of such material may be obtained by mail, upon payment of the SEC’s prescribed rates, by writing to the Public Reference Section of the SEC located at 100 F Street, N.E., Washington, D.C. 20549, and also may be obtained without charge from the SEC’s website at http://www.sec.gov. We have derived all disclosures contained in this Offer to Purchase regarding PNA Holding and the Issuers from the publicly available documents described in the preceding paragraph. We do not make any representations or warranties with respect to any of the information contained in the publicly disseminated documents or SEC filings of the Issuers, nor do we represent or warrant that the Issuers have made all filings required by law and the SEC’s regulations. Reference is made to the SEC filings of the Issuers solely to inform you of their availability. The Issuers’ SEC filings are not incorporated by reference into this Offer to Purchase. We cannot give any assurance that all events occurring prior to the date hereof (including events that would affect the accuracy or completeness of the publicly available documents described in the preceding paragraph) that could affect the prices of the Notes have been publicly disclosed. Subsequent disclosure of any such events or the disclosure of or failure to disclose material future events concerning the Issuers could affect the values of the Notes. Reliance is subject to the periodic reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and our SEC filings can be obtained in the same manner as described above with respect to the SEC filings of the Issuers. THE ACQUISITION On June 16, 2008, RSAC, a California corporation that is a wholly-owned subsidiary of Reliance, entered into an agreement (the “Stock Purchase Agreement”) with PNA Holding, a Delaware corporation and the parent corporation of the Issuers, and its stockholders, Platinum Equity Capital Partners, L.P., Platinum Equity Capital Partners – A, L.P., Platinum Equity Capital Partners – PF, L.P., and Platinum Travel Principals, LLC (collectively, the “Stockholders”), to acquire the outstanding capital stock of PNA Holding. RSAC agreed to pay to the Stockholders cash consideration of $315,000,000, subject to certain adjustments. RSAC and PNA Holding and the Stockholders have made customary representations, warranties and covenants to one another in the Stock Purchase Agreement, including, among other things, covenants that, prior to the closing of the Acquisition, PNA Holding (i) will operate its business in the ordinary course consistent with past practice and (ii) will not engage in certain kinds of transactions. The obligation of the parties to consummate the Acquisition is subject to a number of conditions, including, (i) the expiration or earlier termination of any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (ii) that no governmental authority shall have enacted, issued or effected any law or order making the Acquisition illegal or otherwise prohibiting the consummation of the Acquisition. Further, the obligation of the Stockholders to consummate the Acquisition is subject to a number of conditions, including (i) that the representations and warranties of RSAC contained in the Stock Purchase Agreement shall be true and correct (without giving effect to materiality qualifiers) on and as of the closing date with the same force and effect as though such representations and warranties had been made on and as of the closing date (other than those representations and warranties that are made as of another date, in which case such representations and warranties shall be true and correct as of such other date), except to the extent such failure to be true and correct does not, individually or in the aggregate, adversely affect the ability of RSAC to carry out its obligations under, and to consummate the transactions contemplated by, the Stock Purchase Agreement, (ii) that RSAC shall have duly performed and complied with, in all material respects, the covenants and agreements contained in the Stock Purchase Agreement to be performed or complied with by it prior to or at the closing date, and (iii) that PNA Holding shall have obtained the requisite consent of Bank of America, N.A. In addition, the obligation of RSAC to consummate the Acquisition is subject to a number of conditions, including (i) that the representations and warranties of the Stockholders and PNA Holding contained in the Stock Purchase Agreement shall be true and correct (without giving effect to materiality or materially adverse effect qualifiers) on and as of the closing date with the same force and effect as though such representations and warranties had been made on and as of the closing date (other than those representations and warranties that are made as of another date, in which case such representations and warranties shall be true and correct as of such other date), except to the extent such failure to be true and correct does not, iv
    • individually or in the aggregate, result in a material adverse change in respect of the business of PNA Holding, (ii) that PNA Holding and the Stockholders shall have duly performed and complied with, in all material respects, the covenants and agreements contained in the Stock Purchase Agreement to be performed or complied with by it prior to or at the closing date and (iii) that there shall have been no material adverse change in respect of the business of PNA Holding. The closing of the Acquisition is not subject to any financing condition. The Stock Purchase Agreement may be terminated at any time prior to the closing of the Acquisition by either RSAC or PNA Holding if (i) the closing has not occurred before October 2, 2008, (ii) a governmental order prohibiting the transactions contemplated by the Stock Purchase Agreement has become final and nonappealable or (iii) both parties have mutually consented to the termination in writing. Each of the Indentures provides that, upon consummation of the Acquisition, we will be obligated to offer to purchase the Notes issued thereunder at a price equal to 101% of the principal amount thereof plus accrued and unpaid interest. If not purchased or redeemed pursuant to the terms of the Indentures, the Notes will remain obligations of the Issuers. Reliance is not obligated by the Stock Purchase Agreement to make the Tender Offers or the Consent Solicitations and their completion is not a condition to the consummation of the Acquisition. Reliance included a copy of the Stock Purchase Agreement with its Current Report on Form 8-K filed on June 19, 2008, which may be obtained without charge from the SEC’s website as described in “Available Information.” v
    • SUMMARY This Offer to Purchase and the Letter of Transmittal contain important information that should be read carefully before any decision is made with respect to the Tender Offers or the Consent Solicitations. The following summary is qualified in its entirety by the more detailed information appearing elsewhere in this Offer to Purchase and the Letter of Transmittal. Capitalized terms not otherwise defined in this summary have the meanings assigned to them elsewhere in this Offer to Purchase and the Letter of Transmittal. The Offeror Reliance Steel & Aluminum Co., a California corporation (“Reliance”). 10 3/4% Senior Notes due 2016 issued by PNA Group, Inc. (the “Fixed Notes”) The Notes Senior Floating Rate Toggle Notes due 2013 issued by PNA Intermediate Holding Corporation (the “Floating Notes” and, together with the Fixed Notes, the “Notes”) The Tender Offers We are offering to purchase for cash, upon the terms and subject to the conditions set forth in this Offer to Purchase and the Letter of Transmittal, any and all of the outstanding Notes validly tendered, and not validly withdrawn, on or prior to the Expiration Date. Holders who desire to tender Notes pursuant to the Tender Offers must consent to the Amendments and Holders may not deliver Consents without tendering the related Notes. See “The Tender Offers and Consent Solicitations.” The Consent Solicitations We are soliciting Consents to the Amendments to each of the Indentures and the Notes, which would eliminate substantially all of the restrictive covenants contained in the Indentures and the Notes (other than the covenants related to change of control offers) as well as certain events of default. Consent Payment If, but only, if Fixed Notes are accepted for purchase in the Tender Offer therefor, each Holder who validly delivered Consents to the Amendments relating to such Notes on or prior to the Consent Date shall be entitled to receive, as part of the Fixed Total Consideration, a Fixed Consent Payment in the amount of $20.00 per $1,000 principal amount of Fixed Notes that have been validly tendered and not validly withdrawn (and Consent not validly revoked) by such Holder on or prior to the Consent Date. If, but only, if Floating Notes are accepted for purchase in the Tender Offer therefor, each Holder who validly delivered Consents to the Amendments relating to such Notes on or prior to the Consent Date shall be entitled to receive, as part of the Floating Total Consideration, a Floating Consent Payment in the amount of $20.00 per $1,000 principal amount of Floating Notes that have been validly tendered and not validly withdrawn (and Consent not validly revoked) by such Holder on or prior to the Consent Date. 1
    • Total Consideration The Total Consideration for each $1,000 principal amount of Notes validly tendered and not validly withdrawn pursuant to the Tender Offers is $1,205.75 in the case of the Fixed Notes and $1,020.00 in the case of the Floating Notes. The Total Consideration includes a Consent Payment of $20.00 per $1,000 principal amount of Fixed Notes and $20.00 per $1,000 principal amount of Floating Notes. The Consent Payment will be made in respect of Notes that have been validly tendered and not validly withdrawn as to which Consents to the Amendments are delivered on or prior to 5:00 p.m., New York City time, on July 15, 2008, the Consent Date, if Notes are accepted for purchase in the Tender Offers, and regardless of whether the requisite Consents are delivered to approve the Amendments. Holders must validly tender and not validly withdraw Notes on or prior to the Consent Date in order to be eligible to receive the Total Consideration for such Notes purchased in the Tender Offer. Tender Offer Consideration Holders who validly tender their Fixed Notes after the Consent Date and on or prior to the Expiration Date will be eligible to receive only the Fixed Tender Offer Consideration equal to $1,185.75 per $1,000 principal amount of Fixed Notes tendered, representing an amount equal to the Total Fixed Consideration, less the $20.00 Fixed Consent Payment. Holders who validly tender their Floating Notes after the Consent Date and on or prior to the Expiration Date will be eligible to receive only the Floating Tender Offer Consideration equal to $1,000.00 per $1,000 principal amount of Floating Notes tendered, representing an amount equal to the Total Floating Consideration, less the $20.00 Floating Consent Payment. Accrued Interest Subject to the terms and conditions of the Tender Offers, in addition to the Total Consideration or the Tender Offer Consideration, as the case may be, Holders whose Notes are purchased in the Tender Offers will also be paid accrued and unpaid interest on such Notes from the last interest payment date to, but not including, the Settlement Date. Consent Date 5:00 p.m., New York City time, on July 15, 2008, unless extended or earlier terminated by us in our sole discretion. Expiration Date 5:00 p.m., New York City time, on August 1, 2008, unless extended or earlier terminated by us in our sole discretion. See “Expiration Date; Consent Time; Extension; Amendment and Termination.” Settlement Date For Notes that have been validly tendered and not validly withdrawn on or prior to the Expiration Date and that are accepted for purchase, the Settlement Date will be one business day following the Expiration Date. Assuming the Tender Offers are not extended, we expect that the Settlement Date will be August 4, 2008. See “Acceptance for Purchase and Payment.” 2
    • Purposes of the Tender Offers and the The Tender Offers are being made in anticipation of, and are conditioned upon, the Consent Solicitations consummation of the acquisition by Reliance of 100% of the outstanding capital stock of PNA Holding (the “Acquisition”). The principal purpose of the Tender Offers is to acquire all of the outstanding Notes immediately following the consummation of the Acquisition and to eliminate substantially all of the restrictive covenants contained in the Indentures and the Notes (other than the covenants related to change of control offers) as well as certain events of default. Reliance also expects that the completion of the Tender Offers will reduce the interest expense it would otherwise begin to incur following the consummation of the Acquisition. See “Purposes of the Tender Offers and the Consent Solicitations.” Conditions of the Tender Offers Consummation of each of the Tender Offers is conditioned upon the satisfaction or waiver of the conditions described under “Conditions of the Tender Offers and Consent Solicitations,” including, but not limited to, the condition that we shall have, on or prior to the Expiration Date, completed the Acquisition. The Tender Offers are not conditioned upon any minimum principal amount of the Notes being tendered or upon the receipt of Consents necessary to approve the Amendments. Neither Tender Offer is conditioned upon the completion of the other Tender Offer. We reserve the right, in our sole discretion, with respect to each Tender Offer, to waive any or all conditions of such Tender Offer. See “Conditions of the Tender Offers and Consent Solicitations.” Withdrawal Rights Tenders of Notes may be withdrawn and Consents may be revoked at any time before the Consent Date, but not thereafter, by following the procedures described herein. A valid withdrawal of tendered Notes before the Consent Date shall be deemed a revocation of the related Consent. See “Withdrawal of Tenders; Revocation of Consents and Absence of Appraisal Rights.” Procedures for Tendering Notes and Any Holder desiring to tender Notes and deliver Consents should either (a) complete and sign Delivering Consents the Letter of Transmittal or a facsimile copy in accordance with the instructions therein, mail or deliver it and any other required documents to the Depositary, and deliver the certificates for the tendered Notes to the Depositary (or transfer such Notes pursuant to the book-entry transfer procedures described herein), (b) request the Holder’s Custodian to effect the transaction or (c) tender through DTC using ATOP. A Holder with Notes held through a Custodian must contact that Custodian if such Holder desires to tender those Notes and deliver a Consent and promptly instruct such Custodian to tender such Notes and deliver a Consent on its behalf. See “Procedures for Tendering Notes and Delivering Consents.” The Amendments The Amendments would eliminate substantially all of the restrictive covenants contained in each of the Indentures and the Notes (other than the covenants related to change of control offers) as well as certain event of default provisions. Adoption of the Amendments may have adverse consequences to Holders whose Notes are not tendered and purchased in the Tender Offers because Notes outstanding after consummation of the Tender Offers will not be entitled to the benefit of substantially all the restrictive covenants (other than the covenants related to change of control offers) and certain event of default provisions. See “Certain Significant Considerations” and “The Amendments.” 3
    • Material U.S. Federal Income Tax For a discussion of material U.S. federal income tax considerations of the Tender Offers and Considerations the Consent Solicitations, see “Material U.S. Federal Income Tax Considerations.” Certain Significant Considerations For a discussion of certain considerations that may affect your decision as to whether to participate in the Tender Offers and the Consent Solicitations, see “Certain Significant Considerations.” The Dealer Manager Citigroup Global Markets, Inc. The Depositary Global Bondholder Services Corporation The Information Agent Global Bondholder Services Corporation Trustee for the Notes The Bank of New York Additional Documentation; Further Any questions or requests for assistance concerning the terms of the Tender Offers or the Information; Assistance Consent Solicitations may be directed to the Dealer Manager at the address and telephone numbers set forth on the back cover of this Offer to Purchase. Any questions or requests for assistance concerning the Tender Offers, the Consent Solicitations or for additional copies of this Offer to Purchase or the Letter of Transmittal may be directed to the Information Agent at the address and telephone numbers set forth on the back cover of this Offer to Purchase. Beneficial owners may also contact their Custodian for assistance concerning the Tender Offers and the Consent Solicitations. 4
    • DESCRIPTION OF THE NOTES The Fixed Notes were issued pursuant to the Indenture, dated as of August 15, 2006, between PNA Group, the Guarantors (as defined therein) and The Bank of New York, as trustee. The Floating Notes were issued pursuant to the Indenture, dated as of February 12, 2007, between PNA Intermediate and The Bank of New York, as trustee. The terms of the Fixed Notes and Floating Notes are those stated in their respective Indentures and those made part of the Indentures by reference to the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”). Holders are referred to the Indentures and the Trust Indenture Act for a statement thereof. The Fixed Notes were issued on August 15, 2006 and interest on the Fixed Notes accrues at 103/4% per annum, payable semi-annually in arrears on each March 1 and September 1 to the holders of record of the Fixed Notes as of the preceding February 15 and August 15. The Floating Notes were issued on February 12, 2007 and interest on the Floating Notes accrues at a floating rate, payable quarterly in arrears on each February 15, May 15, August 15 and November 15 to the holders of record of the Floating Notes as of the preceding February 1, May 1, August 1 and November 1. PNA Group may redeem all or a part of the Fixed Notes before September 1, 2011, at a redemption price equal to 100% of the principal amount of the Fixed Notes redeemed plus the applicable premium as of, and accrued and unpaid interest, if any, to, the applicable redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date). PNA Group may redeem all or a part of the Fixed Notes after September 1, 2011 at specified redemption prices set forth in the Fixed Notes, plus accrued and unpaid interest to, but not including, the redemption date. PNA Group may also redeem prior to September 2009 up to 35% of the aggregate principal amount of the Fixed Notes at a redemption price equal to 110.75% of the principal amount thereof, plus accrued and unpaid interest, with proceeds from a “Qualified Equity Offering” (as defined in the Fixed Note Indenture). See “Certain Significant Considerations.” PNA Intermediate may redeem all or a part of the Floating Notes after February 15, 2008 at specified redemption prices set forth in the Floating Notes, plus accrued and unpaid interest to, but not including, the redemption date. See “Certain Significant Considerations.” The Indentures currently restrict, among other things, the ability of PNA Group and PNA Intermediate and the ability of most or all of their respective subsidiaries to incur additional indebtedness, pay dividends and make distributions, transfer and sell assets, create certain liens, engage in sale-leaseback transactions, engage in certain transactions with affiliates and consolidate or merge all or substantially all of its assets and the assets of its subsidiaries. However, the Amendments would eliminate substantially all of the restrictive covenants contained in the Indentures and the Notes (other than the covenants related to change of control offers) as well as certain events of default. PURPOSES OF THE TENDER OFFERS AND CONSENT SOLICITATIONS The Tender Offers are being made in anticipation of, and are conditioned upon, the consummation of the Acquisition by Reliance of 100% of the outstanding capital stock of PNA Holding. The principal purpose of the Tender Offers is to acquire all of the outstanding Notes immediately following the consummation of the Acquisition and to eliminate substantially all of the restrictive covenants contained in the Indentures and the Notes (other than the covenants related to change of control offers) as well as certain events of default. Reliance also expects that the completion of the Tender Offers will reduce the interest expense it would otherwise begin to incur following the consummation of the Acquisition. 5
    • CERTAIN SIGNIFICANT CONSIDERATIONS In deciding whether to participate in the Tender Offers and the Consent Solicitations, each Holder should consider carefully, in addition to the other information contained in this Offer to Purchase, the following consequences. Subsequent Redemption and Defeasance of the Notes Fixed Notes. In the event that Reliance does not receive sufficient Consents to effect the proposed Amendments to the Fixed Note Indenture, we intend to take one or more actions to redeem the then outstanding Fixed Notes promptly following the consummation of the Acquisition. These actions are likely to consist of one or more of the following: Undertake a Qualified Equity Offering (as defined in the Fixed Note Indenture) which would enable us to redeem 35% of the then • outstanding principal amount of the Fixed Notes at a redemption price of 110.75% of the principal amount thereof plus accrued and unpaid interest to the applicable redemption date; Effect a redemption of the then outstanding Fixed Notes at a redemption price equal to 100% of the principal amount of Fixed Notes to • be so redeemed, plus accrued and unpaid interest to the applicable redemption date, plus a premium equal to the greater of (i) 1.0% of the outstanding principal amount of the Fixed Notes to be redeemed and (ii) the excess of (a) the present value at such redemption date of a redemption price equal to 105.375% of the then outstanding principal amount of the Fixed Notes to be so redeemed plus all required interest payments due on such Fixed Notes through September 1, 2011 (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate (as defined in the Fixed Note Indenture) as of such redemption date plus 50 basis points; over (b) the then outstanding principal amount of the Fixed Notes to be so redeemed. The Fixed Note Indenture requires us to deliver an officer’s certificate to the Trustee at least 45 days prior to a redemption of the Fixed Notes (or such shorter period as the Trustee may require) establishing a redemption date and to deliver a notice to the Holders of the Fixed Notes at least 30 days prior to such redemption date. Immediately upon delivery of such officer’s certificate to the Trustee, we intend to effect a defeasance, which would release PNA Group from its obligations under the Fixed Note Indenture pursuant to Section 8.2 of such Indenture. Pursuant to such defeasance, we will irrevocably deposit or cause to be deposited funds in an amount sufficient to pay and discharge the entire indebtedness on the Fixed Notes then outstanding, including all accrued and unpaid interest to the redemption date. In the event that Reliance receives sufficient Consents to effect the proposed Amendments to the Fixed Note Indenture, our plans to take any action with respect to the remaining outstanding Fixed Notes have not yet been determined. Floating Notes. Regardless of whether Reliance receives sufficient Consents to effect the proposed Amendments to the Floating Note Indenture, we intend to effect a redemption of the then outstanding Floating Notes promptly following the consummation of the Acquisition at a redemption price equal to 102.00% of the then outstanding principal amount thereof plus accrued and unpaid interest to the applicable redemption date. If Reliance does not receive sufficient Consents to effect the proposed Amendments to the Floating Note Indenture, we intend to effect a defeasance of the Floating Notes. The Floating Note Indenture requires us to deliver an officer’s certificate to the Trustee at least 45 days prior to a redemption of the Floating Notes (or such shorter period as the Trustee may require) establishing a redemption date and to deliver a notice to the Holders of the Floating Notes at least 30 days prior to such redemption date. Immediately upon delivery of such officer’s certificate to the Trustee, we intend to effect the defeasance, which would release PNA Intermediate from its obligations under the Floating Note Indenture pursuant to Section 8.2 of such Indenture. Pursuant to such defeasance, we will irrevocably deposit or cause to be deposited funds in an amount sufficient to pay and discharge the entire indebtedness on the Floating Notes then outstanding, including all accrued and unpaid interest to the redemption date. 6
    • Offer to Purchase Pursuant to a Change of Control Each of the Indentures will require that the Issuers of the respective Notes make an offer to purchase their respective Notes at a purchase price of 101% of the outstanding principal amount thereof plus accrued and unpaid interest, if any, to but not including the applicable purchase date within 30 days following the consummation of the proposed Acquisition. Effects of the Amendments If the Amendments become operative, Notes that are not tendered and purchased pursuant to the Tender Offers will remain outstanding and will be subject to the terms of their respective Indentures as modified by the supplemental indentures effecting the Amendments. Among other things, as a result of the adoption of the Amendments, substantially all of the restrictive covenants contained in the Indentures (and related references in the Notes) (other than covenants related to change of control offers) as well as certain events of default with respect to the Notes will be eliminated and Holders of Notes not tendered and purchased will no longer be entitled to the benefits of such covenants and events of default. The elimination of these covenants and events of default will permit the Issuers to take certain actions previously prohibited that could increase the credit risks, adversely affect the market price and credit rating of the remaining Notes or otherwise be materially adverse to the interest of Holders. See “The Amendments.” Subsequent Repurchase of the Notes We and our affiliates reserve the right, in our sole discretion, to purchase from time to time any Notes that remain outstanding after the Expiration Date or after termination or withdrawal of the Tender Offers through open-market purchases, privately negotiated transactions, tender offers, exchange offers, redemptions or otherwise, upon such terms and at such prices as we may determine (or as may be provided for in the Indentures), which may be more or less than the prices offered pursuant to the Tender Offers and could be for cash or other consideration. Limited Trading Market To the extent that Notes are traded, prices for the Notes may fluctuate greatly depending on the trading volume and the balance between buy and sell orders. In addition, quotations for securities that are not widely traded, such as the Notes, may differ from actual trading prices and should be viewed as approximations. Holders of Notes are urged to contact their brokers to obtain the best available information as to current market prices. To the extent that Notes are purchased in the Tender Offers, the trading market for the Notes would become even more limited. A debt security with a smaller outstanding principal amount available for trading (a smaller “float”) may command a lower price than would a comparable debt security with a larger float. Therefore, the market price for Notes not purchased may be affected adversely to the extent that the principal amount of Notes tendered pursuant to the Tender Offers reduces the float. The reduced float may also make the trading price more volatile. There can be no assurance that any trading market will exist for the Notes following the consummation of the Tender Offers. The extent of the public market for the Notes following consummation of the Tender Offers will depend upon, among other things, the remaining outstanding principal amount of Notes, the number of Holders and the interest in maintaining a market in the Notes on the part of securities firms. We do not intend to create or sustain a market for any Notes that remain outstanding following the consummation of the Tender Offers. Limited Public Information Pursuant to the requirements of the Indentures, the Issuers are each obligated to disseminate to Holders financial statements in the form that that would be required to be contained in annual and quarterly reports filed with the SEC pursuant to the Exchange Act if they were required to file such forms, even though such financial statements and reports would not be required under the Exchange Act so long as there are fewer than 300 record Holders of their respective Notes. If the Amendments are adopted and there are fewer than 300 record Holders of each of the Notes, the Issuers will not be obligated, and will likely cease, to disseminate such financial statements. If the Issuers cease to disseminate financial statements to Holders of the Notes, public information related to their capitalization, cash flows, net income and results of operations may not be available to Holders of the Notes or other investors, which may adversely affect liquidity and trading prices for the Notes. 7
    • THE TENDER OFFERS AND CONSENT SOLICITATIONS This Offer to Purchase and the Letter of Transmittal contain important information that should be read carefully before any decision is made with respect to the Tender Offers or the Consent Solicitations. Introduction We hereby offer, upon the terms and subject to the conditions set forth in this Offer to Purchase and the Letter of Transmittal, to purchase for cash any and all of the outstanding Notes that are validly tendered (and not validly withdrawn prior to the Consent Date) to the Depositary on or prior to the Expiration Date for the consideration described below. Holders who validly tender their Notes on or prior to the Consent Date and who do not withdraw their Notes prior to the Consent Date will be eligible to receive the Total Consideration described below. Holders validly tendering Notes and delivering Consents after the Consent Date and on or prior to the Expiration Date will be eligible to receive only the Tender Offer Consideration, namely the Total Consideration less the Consent Payment. We will accept tenders of Notes in principal amounts of $1,000 or multiples thereof. The Board of Directors of Reliance has approved the Tender Offers and the Consent Solicitations. However, neither the respective Boards of Directors nor management of Reliance, PNA Holding or the Issuers is making any recommendation to the Holders as to whether to tender or refrain from tendering all or any portion of the Notes in the Tender Offers or to deliver or withhold Consents pursuant to the Consent Solicitations. Each Holder must decide whether to tender Notes, and if tendering, the principal amount of Notes to tender and to deliver Consents. The Holders are urged to review carefully all of the information contained in this Offer to Purchase and to obtain current market quotations for the Notes. Total Consideration The Total Fixed Consideration for each $1,000 principal amount of Fixed Notes validly tendered and not validly withdrawn pursuant to the Tender Offer is $1,205.75. The Total Fixed Consideration includes a Fixed Consent Payment of $20.00 per $1,000 principal amount of Fixed Notes purchased. Reliance advises that the Total Fixed Consideration was determined by reference to the sum of (a) 35% of $1,107.50 (being the price, as described the terms of the Fixed Notes, at which 35% principal amount of the Fixed Notes may be redeemed with the net proceeds of certain qualified equity offerings ) and (b) 65% of $1,258.66 (being an estimate of the “make-whole” redemption price for the Fixed Notes based on U.S. Treasury yields as of 11:00 a.m., New York City time, on July 1, 2008 and a spread of 50 basis points). The Total Floating Consideration for each $1,000 principal amount of Floating Notes validly tendered and not validly withdrawn pursuant to the Tender Offer is $1,020.00. The Total Floating Consideration includes a Floating Consent Payment of $20.00 per $1,000 principal amount of Floating Notes purchased. The Consent Payments will be made in respect of Notes validly tendered and not validly withdrawn as to which Consents to the Amendments are delivered on or prior to 5:00 p.m., New York City time, on July 15, 2008, the Consent Date. Holders must validly tender and not validly withdraw Notes on or prior to the Consent Date in order to be eligible to receive the Total Consideration for such Notes purchased in the Tender Offers. Holders who validly tender their Fixed Notes after the Consent Date and on or prior to the Expiration Date will be eligible to receive the Fixed Tender Offer Consideration of $1,185.75 per $1,000 principal amount of Fixed Notes, representing the Total Fixed Consideration less the $20.00 Fixed Consent Payment. Holders who validly tender their Floating Notes after the Consent Date and on or prior to the Expiration Date will be eligible to receive the Floating Tender Offer Consideration of $1,000.00 per $1,000 principal amount of Floating Notes, representing the Total Floating Consideration less the $20.00 Floating Consent Payment. In each case, Holders whose Notes are purchased in the Tender Offers will also be paid unpaid Accrued Interest from the last interest payment date to, but not including, the Settlement Date. Unless we default in the payment of the amounts payable pursuant to the Tender Offers and the Consent Solicitations, all Notes accepted for purchase pursuant to the Tender Offers shall cease to accrue interest on the Settlement Date. All Notes not tendered or accepted for purchase shall remain outstanding immediately following the completion of the Tender Offers and will continue to accrue interest as provided in such Notes until otherwise redeemed, repurchased or retired. See “Certain Significant Considerations.” Notes tendered may be validly withdrawn at any time on or prior to the Consent Date, but not thereafter. A valid withdrawal of tendered Notes shall be deemed a valid revocation of the tender of the Notes and the related Consent. In the event of a termination or withdrawal of either or both the Tender Offers without any Notes being purchased thereunder, the Notes tendered pursuant to such terminated or withdrawn Tender Offer will be promptly returned to the tendering Holders. See “Withdrawal of Tenders; Revocation of Consents and Absence of Appraisal Rights.” 8
    • Holders that tender their Notes pursuant to the Tender Offers and in accordance with the procedures described in this Offer to Purchase will be deemed to have delivered their Consent pursuant to the Consent Solicitations, whether or not the Notes are tendered prior to the Consent Date. Holders may not deliver Consents without tendering their Notes nor may they tender Notes without delivering Consents. Source and Amount of Funds We estimate that we will need approximately $490 million to purchase all of the outstanding Notes and to pay all unpaid Accrued Interest on the Notes, assuming that all outstanding Notes are validly tendered prior to the Consent Date and that the Total Consideration equals $1,205.75 per $1,000 principal amount of Fixed Notes and $1,020.00 per $1,000 principal amount of Floating Notes and that the Settlement Date for the Tender Offers is August 4, 2008. We expect to use (i) capital raised through a future debt or equity financing, or a combination thereof, (ii) capital provided under our existing credit facility and/or (iii) our cash on hand to pay for all of the Notes we purchase in the Tender Offers and the related expenses. Payment for Notes validly tendered and Consents validly delivered and accepted for purchase will be made by our deposit of immediately available funds with the Depositary, or, upon the Depositary’s instructions, with DTC, which will act as agent for the tendering Holders for the purpose of receiving payments from us and transmitting such payments to Holders entitled thereto. EXPIRATION DATE; CONSENT TIME; EXTENSION; AMENDMENT AND TERMINATION The Tender Offers will expire at 5:00 p.m., New York City time, on August 1, 2008, unless extended or earlier terminated by us in our sole discretion. The Consent Solicitations will expire at 5:00 p.m., New York City time, on July 15, 2008, unless extended or earlier terminated by us in our sole discretion. If any of the Tender Offers or Consent Solicitations are extended, “Expiration Date” and “Consent Date” shall mean the time and date on which each of the Tender Offers and the Consent Solicitations, respectively, as so extended, expire. Subject to the requirements of applicable law, with respect to each Tender Offer and Consent Solicitation, we reserve the right to extend the Expiration Date or the Consent Date, from time to time or for such period or periods as we may determine in our sole discretion by giving oral (to be confirmed in writing) or written notice of such extension to the Depositary and by making a public announcement by press release to Business Wire or a similar service at or prior to 9:00 a.m., New York City time, on the next business day following the previously established Expiration Date or Consent Date, as the case may be. During any extension of a Tender Offer and Consent Solicitation, all Notes previously tendered and not accepted for purchase will remain subject to such Tender Offer and may, subject to the terms and conditions of such Tender Offer, be accepted for purchase by us. To the extent we are legally permitted to do so, subject to the requirements of applicable law, we reserve the absolute right, in our sole discretion, with respect to each Tender Offer and Consent Solicitation, to at any time (i) waive any condition to any of such Tender Offer and such Consent Solicitation or (ii) amend any of the terms of such Tender Offer and such Consent Solicitation. If we make a material change in the terms of any of the Tender Offers and the Consent Solicitations or waive a material condition of the Tender Offers and the Consent Solicitations, we will give oral (to be confirmed in writing) or written notice of such amendment or such waiver to the Depositary and, to the extent required by law, we will disseminate additional offer documents and extend the Tender Offers and Consent Solicitations. We reserve the right to terminate or withdraw either or both of the Tender Offers and Consent Solicitations. Any such termination or withdrawal will be followed promptly by public announcement thereof. In the event of a termination or withdrawal of either or both the Tender Offers without any Notes being purchased thereunder, we will promptly notify the Depositary and the Notes tendered pursuant to such terminated or withdrawn Tender Offer will be promptly returned to the tendering Holders. In the event that a Tender Offer is terminated or withdrawn, no consideration will be paid or become payable in respect of any Notes subject to such Tender Offer not previously accepted for purchase. See “Withdrawal of Tenders; Revocation of Consents and Absence of Appraisal Rights” and “Conditions of the Tender Offers and Consent Solicitations.” There can be no assurance that we will exercise our right to extend the Expiration Date or the Consent Date. ACCEPTANCE FOR PURCHASE AND PAYMENT Upon the terms and subject to the conditions of each of the Tender Offers, we will accept for purchase Notes validly tendered pursuant to the Tender Offers (or defectively tendered, if such defect has been waived by us), and not validly withdrawn, upon the satisfaction or waiver of the conditions to the Tender Offers specified herein under “Conditions of the Tender Offers and Consent Solicitations.” We will promptly pay for Notes accepted. We reserve the right, in our sole discretion, with respect to each Tender Offer, to delay acceptance for purchase of Notes 9
    • tendered under the Tender Offers or the payment for Notes accepted for purchase (subject to Rule 14e-1(c) under the Exchange Act, which requires that an offeror pay the consideration offered or return the securities deposited by or on behalf of the Holders thereof promptly after the expiration, termination or withdrawal of a tender offer), or to terminate the Tender Offers and not accept for purchase any Notes not theretofore accepted for purchase, if any of the conditions set forth under “Conditions of the Tender Offers and Consent Solicitations” shall not have been satisfied or waived by us or in order to comply with any applicable law. In all cases, payment for Notes accepted for purchase pursuant to the Tender Offers will be made only after timely delivery of certificates representing tendered Notes, confirmation of book-entry transfer of the Notes or satisfaction of DTC’s ATOP procedures, and receipt of any other documents required in connection therewith. Subject to the satisfaction or waiver of the conditions to the Tender Offers and the Consent Solicitations, we expect to accept for purchase Notes validly tendered and not withdrawn on or prior to the Expiration Date promptly after the Expiration Date. Payment of the Total Consideration or the Tender Offer Consideration, as the case may be, shall be made promptly following the Expiration Date. For purposes of each of the Tender Offer, we will be deemed to have accepted for purchase validly tendered Notes (or defectively tendered Notes, if such defect has been waived by us) and validly delivered Consents if, as and when we give oral (confirmed in writing) or written notice thereof to the Depositary. Payment for Notes and Consents accepted for purchase in the Tender Offers and Consent Solicitations on or prior to the Settlement Date will be made by us by depositing such payment with the Depositary, or, upon the Depositary’s instructions, with DTC, which will act as agent for the Holders for the purpose of receiving the Total Consideration or the Tender Offer Consideration, as the case may be, and unpaid Accrued Interest and transmitting such consideration to the Holders. Tenders of Notes pursuant to the Tender Offers will be accepted only in principal amounts equal to $1,000 or any multiple thereof. Holders whose Notes are being purchased only in part shall be issued new Notes in book-entry form only and equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $1,000 in principal amount or multiples thereof. If, for any reason, acceptance for purchase of, or payment for, validly tendered Notes or validly delivered Consents pursuant to the Tender Offers or Consent Solicitations is delayed or we are unable to accept for purchase, or to pay for, validly tendered Notes or validly delivered Consents pursuant to the Tender Offers and Consent Solicitations, then the Depositary may, nevertheless, on our behalf, retain tendered Notes and delivered Consents, without prejudice to our rights described under “Expiration Date; Extension; Amendment and Termination,” “Conditions of the Tender Offers and Consent Solicitations” and “Withdrawal of Tenders; Revocation of Consents and Absence of Appraisal Rights” (subject to Rule 14e-l(c) under the Exchange Act, which requires that an offeror pay the consideration offered or return the securities deposited by or on behalf of the Holders thereof promptly after the expiration, termination or withdrawal of a tender offer). If any tendered Notes are not accepted for purchase for any reason pursuant to the terms and conditions of the Tender Offers, such Notes will be credited to the account from which such Notes were delivered promptly following the Expiration Date or the termination or withdrawal of the Tender Offers. We reserve the right to transfer or assign, in whole or from time to time in part, to one or more of our affiliates the right to purchase all or any portion of the Notes tendered pursuant to the Tender Offers or Consents delivered pursuant to the Consent Solicitations, but any such transfer or assignment will not relieve us of our obligations under the Tender Offers or Consent Solicitations and will in no way prejudice the rights of tendering Holders to receive payment for their Notes validly tendered and Consents validly delivered, and accepted for purchase pursuant to the Tender Offers and Consent Solicitations. Holders whose Notes are tendered and accepted for purchase pursuant to the Tender Offers will be entitled to unpaid Accrued Interest on their Notes up to, but not including, the Settlement Date. Under no circumstances will any additional interest be payable because of any delay in the transmission of funds to the Holders of purchased Notes or otherwise. Tendering Holders of Notes purchased in the Tender Offers will not be obligated to pay brokerage commissions, fees or, except in the circumstances described in the Letter of Transmittal, transfer taxes to us with respect to the purchase of their Notes. We will pay all charges and expenses incurred by us in connection with our making the Tender Offer. See “Persons Employed in Connection with the Tender Offers and the Consent Solicitations” and “Miscellaneous.” PROCEDURES FOR TENDERING NOTES AND DELIVERING CONSENTS The tender of Notes before the Consent Date pursuant to the Tender Offers and in accordance with the procedures described below will be deemed to constitute the delivery of a Consent with respect to the Notes tendered. Holders may not deliver Consents without tendering their Notes in the Tender Offer. Holders that validly 10
    • tender their Notes (or defectively tender their Notes, if such defect has been waived by us) and deliver Consents on or before the Consent Date will be eligible to receive the Total Consideration plus unpaid Accrued Interest. Notes tendered after the Consent Date but on or before the Expiration Date will be eligible to receive only the Tender Offer Consideration plus unpaid Accrued Interest. A defective tender of Notes (which defect is not waived by us) will not constitute valid delivery of the Notes or Consents and will not entitle the Holder thereof to any payment pursuant to the Tender Offers or the Consent Solicitations. Tender of Notes For a Holder to tender Notes validly pursuant to the Tender Offers, a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantee, or (in the case of a book-entry transfer) an Agent’s Message (as defined below) in lieu of the Letter of Transmittal, and any other required documents, must be received by the Depositary at its address set forth on the back cover of this Offer to Purchase on or prior to the Expiration Date. In addition, on or prior to the Expiration Date, either (a) certificates for tendered Notes must be received by the Depositary at such address or (b) such Notes must be transferred pursuant to the procedures for book- entry transfer described below (and a confirmation of such tender must be received by the Depositary, including an Agent’s Message if the tendering Holder has not delivered a Letter of Transmittal). The term “Agent’s Message” means a message, transmitted by DTC to and received by the Depositary and forming a part of a book-entry confirmation, which states that DTC has received an express acknowledgment from the tendering participant, which acknowledgment states that such participant has received and agrees to be bound by the Letter of Transmittal and that we may enforce such Letter of Transmittal against such participant. If the Notes are held of record in the name of a person other than the signer of the Letter of Transmittal, or if certificates for unpurchased Notes are to be issued to a person other than the Holder of record, the certificates must be endorsed or accompanied by appropriate bond powers, in either case signed exactly as the name of the holder of record (the “Record Holder”) appears on the certificates, with the signature on the certificates or bond powers guaranteed as described below. If the Notes are held of record in the name of a person other than the signer of the Letter of Transmittal, then the certificates must be accompanied by a completed irrevocable proxy authorizing the signatory to deliver Consent with respect to such Notes. Need for Guarantee of Signature. Signatures on a Letter of Transmittal must be guaranteed by a recognized participant (a “Medallion Signature Guarantor”) in the Securities Transfer Agents Medallion Program, unless the Notes tendered thereby are tendered (a) by the Record Holder of such Notes and that Holder has not completed either of the boxes entitled “A. Special Issuance/Delivery Instructions” or “B. Special Payment Instructions” on the Letter of Transmittal, or (b) for the account of a firm that is a member of a registered national securities exchange or The Financial Industry Regulatory Authority or is a commercial bank or trust company having an office in the United States (each, an “Eligible Institution”). Book-Entry Delivery of the Notes; Tender through ATOP. Within two business days after the date of this Offer to Purchase, the Depositary will establish an account with respect to the Notes at DTC for purposes of the Tender Offer and the Consent Solicitation. Any financial institution that is a participant in DTC may make book-entry delivery of Notes by causing DTC to transfer such Notes into the Depositary’s account in accordance with DTC’s procedure for such transfer. Although delivery of the Notes may be effected through book-entry at DTC, the Letter of Transmittal (or facsimile thereof), with any required signature guarantees, or (in the case of a book-entry transfer) an Agent’s Message in lieu of the Letter of Transmittal, and any other required documents, must be transmitted to and received by the Depositary on or prior to the Consent Date, in order to be eligible to receive the Total Consideration, or the Expiration Date, in order to be eligible to receive the Tender Offer Consideration, at its address set forth on the back cover of this Offer to Purchase. Delivery of such documents to DTC does not constitute delivery to the Depositary. Holders who are tendering by book-entry transfer to the Depositary’s account at DTC may execute their tender through DTC’s ATOP system by transmitting their acceptance to DTC in accordance with DTC’s ATOP procedures; DTC will then verify the tender, execute a book- entry delivery to the Depositary’s account at DTC and send an Agent’s Message to the Depositary. Delivery of the Agent’s Message by DTC will signify a Holder’s acceptance of the Tender Offers and delivery of Consents pursuant to the Consent Solicitations upon the terms and conditions of the Tender Offers and the Consent Solicitations and will satisfy the terms of the Tender Offers and the Consent Solicitations in lieu of execution and delivery of a Letter of Transmittal by the participant identified in the Agent’s Message. Accordingly, the Letter of Transmittal need not be completed by a Holder tendering through ATOP. 11
    • Mutilated, Lost, Stolen or Destroyed Certificates. If a Holder desires to tender Notes, but the certificates evidencing such Notes have been mutilated, lost, stolen or destroyed, such Holder should contact the Trustee for further instructions. Backup Withholding. Under U.S. federal income tax laws, the Depositary may be required to withhold 28% of the amount of any payments made to certain Holders pursuant to the Tender Offers and the Consent Solicitations. As discussed in the section called “Material U.S. Federal Income Tax Considerations,” you cannot use the tax summaries herein for the purpose of avoiding penalties that may be asserted against you under the Internal Revenue Code. General. The tender of Notes pursuant to the Tender Offers by one of the procedures set forth above will constitute (a) an agreement between the tendering Holder and Reliance in accordance with the terms and subject to the conditions of the Tender Offers and (b) the Consent of the tendering Holder to the Amendments. The method of delivery of the Letter of Transmittal, certificates for Notes and all other required documents is at the election and risk of the tendering Holder. If a Holder chooses to deliver by mail, the recommended method is by registered mail with return receipt requested, properly insured. In all cases, sufficient time should be allowed to ensure timely delivery. Please note that if Notes are held by a Custodian, the Custodian may have an earlier deadline for tendering Notes pursuant to the Tender Offers and delivery of the Consents pursuant to the Consent Solicitations than the Consent Date or Expiration Date, as the case may be. By tendering Notes through book-entry transfer as described in this Offer to Purchase, and subject to, and effective upon, acceptance for purchase of, and payment for, the Notes tendered therewith, a tendering Holder acknowledges receipt of this Offer to Purchase and (i) sells, assigns and transfers to, or upon the order of, Reliance all right, title and interest in and to all the Notes tendered thereby, (ii) waives any and all other rights with respect to the Notes (including, without limitation, the tendering Holder’s waiver of any existing or past defaults and their consequences in respect of the Notes and the Indentures), (iii) releases and discharges Reliance, each of the Issuers and any of their respective affiliates from any and all claims such Holder may have now, or may have in the future, arising out of, or related to, the Notes, including, without limitation, any claims that such Holder is entitled to receive additional principal or interest payments with respect to the Notes or to participate in any redemption or defeasance of the Notes and (iv) irrevocably constitutes and appoints the Depositary as the true and lawful agent and attorney-in-fact of such Holder with respect to any such tendered Notes, with full power of substitution and re-substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to (a) transfer ownership of such Notes on the account books maintained by DTC and the Trustee, together with all accompanying evidences of transfer and authenticity, to Reliance, (b) present such Notes for transfer on the relevant security register, and (c) receive all benefits or otherwise exercise all rights of beneficial ownership of such Notes (except that the Depositary will have no rights to, or control over, funds from Reliance, except as agent for the tendering Holders, for the Total Consideration or the Tender Offer Consideration, as the case may be, and unpaid Accrued Interest for any tendered Notes that are purchased by Reliance). The Holder, by tendering its Notes, represents and warrants that the Holder has full power and authority to tender, sell, assign and transfer, and to deliver consents in respect of, the Notes tendered, and that when such Notes are accepted for purchase and payment by us, we will acquire good title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim or right. The Holder will, upon request, execute and deliver any additional documents deemed by the Depositary or us to be necessary or desirable to complete the sale, assignment and transfer of the Notes tendered and the delivery of the related Consents. All authority conferred or agreed to be conferred by tendering the Notes through book-entry transfer shall survive the death or incapacity of the tendering Holder and every obligation of such Holder incurred in connection with its tender of its Notes shall be binding upon such Holder’s heirs, personal representatives, executors, administrators, successors, assigns, trustees in bankruptcy and other legal representatives. All questions as to the form of documents and validity, eligibility (including time of receipt), acceptance for payment and withdrawal of tendered Notes and delivered Consents will be determined by Reliance in its sole discretion, and its determination will be final and binding. Reliance reserves the absolute right to reject any and all tenders of Notes or deliveries of Consents that it determines are not in proper form or for which the acceptance for payment or payment may, in the opinion of its counsel, be unlawful. Reliance also reserves the absolute right in its sole discretion, with respect to each Tender Offer, to waive any of the conditions of the Tender Offers and Consent Solicitations or any defect or irregularity in the tender of Notes of any particular Holder, whether or not similar conditions, defects or irregularities are waived in the case of the other Holders. Reliance’s interpretation of the terms and conditions of the Tender Offers and Consent Solicitations (including the instructions in the Letter of 12
    • Transmittal) will be final and binding. None of Reliance, PNA Holding, the Issuers, the Trustee, the Dealer Manager, the Depositary, the Information Agent or any other person will be under any duty to give notice of any defects or irregularities in tenders or any notices of withdrawal or will incur any liability for failure to give any such notice. WITHDRAWAL OF TENDERS; REVOCATION OF CONSENTS AND ABSENCE OF APPRAISAL RIGHTS Notes tendered pursuant to the Tender Offers may be withdrawn and Consents may be revoked pursuant to the Tender Offers and Consent Solicitations at any time before the Consent Date, but not thereafter. The withdrawal of Notes before the Consent Date in accordance with the procedures set forth hereunder will effect a revocation of the related Consent. In order for a Holder of Notes to revoke a Consent, such Holder must withdraw the related tendered Notes. Holders of Notes may contact the Depositary at its address set forth on the back cover of this Offer to Purchase for information regarding withdrawal of Notes from the Book-Entry Transfer Facility. For a withdrawal of Notes and revocation of Consents to be effective, a written facsimile transmission notice of withdrawal or revocation must be timely received by the Depositary at its address set forth on the back cover of this Offer to Purchase. The withdrawal notice must (a) specify the name of the Holder who tendered the Notes to be withdrawn or as to which Consents are to be revoked and, if different, the name of the Record Holder of such Notes (or, in the case of Notes tendered by book-entry transfer, the name of the participant for whose account such Notes were tendered and such participant’s account number at DTC to be credited with the withdrawn Notes), (b) contain a description of the Notes to be withdrawn (including the principal amount to be withdrawn and, in the case of Notes tendered by delivery of certificates rather than book-entry transfer, the certificate numbers thereof) or to which the notice of revocation relates and (c) be signed by the Holder of such Notes in the same manner as the original signature on any Letter of Transmittal, including any required signature guarantees (or, in the case of Notes tendered by a DTC participant through ATOP, be signed by such participant in the same manner as the participant’s name is listed on the applicable Agent’s Message), or be accompanied by (x) documents of transfer sufficient to have the Depositary register the transfer of the Notes into the name of the person withdrawing such Notes and (y) a properly completed irrevocable proxy that authorizes such person to effect such revocation on behalf of such Holder. The signature on the notice of withdrawal must be guaranteed by a Medallion Signature Guarantor unless such Notes have been tendered for the account of an Eligible Institution. If certificates for the Notes to be withdrawn have been delivered or otherwise identified to the Depositary, a signed notice of withdrawal will be effective immediately upon receipt by the Depositary of written or facsimile transmission notice of withdrawal even if physical release is not yet effected. Withdrawals of tenders of Notes and revocation of Consents may not be rescinded, and any Notes properly withdrawn will thereafter be deemed not validly tendered and any Consents revoked will be deemed not validly delivered for purposes of the Tender Offers. Properly withdrawn Notes and revoked Consents may, however, be re-tendered following one of the procedures described under “Procedures for Tendering Notes and Delivering Consents” at any time prior to the Consent Date or Expiration Date, as applicable. Withdrawals of Notes and revocation of Consents can only be accomplished in accordance with the foregoing procedures. All questions as to the validity (including time of receipt) of notices of withdrawal or revocation will be determined by us in our sole discretion, and our determination shall be final and binding. None of Reliance, PNA Holding, the Issuers, the Trustee, the Dealer Manager, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or revocation, or incur any liability for failure to give any such notification. The Notes are debt obligations and are governed by the Indentures. There are no appraisal or other similar statutory rights available to Holders in connection with the Tender Offers or the Consent Solicitations. CONDITIONS OF THE TENDER OFFERS AND CONSENT SOLICITATIONS Notwithstanding any other provision of the Tender Offers or the Consent Solicitations, with respect to each Tender Offer and each Consent Solicitation, we will not be required to accept for purchase, or to pay for, Notes tendered pursuant to the Tender Offers or Consents delivered pursuant to the Consent Solicitations and may terminate, extend or amend either or both of the Tender Offers and the Consent Solicitations and may (subject to Rule 14e-1(c) under the Exchange Act, which requires that an offeror pay the consideration offered or return the securities deposited by or on behalf of the Holders thereof promptly after the expiration, termination or withdrawal of a tender offer) postpone the acceptance for purchase of, and payment for, Notes so tendered and Consents so delivered if: 13
    • (i) the Acquisition has not been consummated; or (ii) in our reasonable judgment, any actual or threatened legal impediment (including a default under an agreement, indentures or other instrument or obligation to which Reliance, PNA Holding, the Issuers or any of their respective affiliates is party or by which any of them is bound) to the purchase of such Notes pursuant to such Tender Offer and Consent Solicitation has arisen on or prior to the Expiration Date; or (iii) any change or development, including a prospective change or development, that, in our reasonable judgment, has or may have a material adverse effect on PNA Holding, PNA Group or PNA Intermediate the market price of the Notes or the value of the Notes has occurred on or prior to the Expiration Date; or (iv) on or prior to the Expiration Date, any order, statute, rule, regulation, executive order, stay, decree, judgment or injunction shall have been proposed, enacted, entered, issued, promulgated, enforced or deemed applicable by any court or governmental, regulatory or administrative agency or instrumentality that, in our reasonable judgment, would prohibit, prevent, restrict or delay consummation of such Tender Offer and Consent Solicitation; or (v) on or prior to the Expiration Date, the Trustee shall have objected in any respect to or taken any action that could, in our reasonable judgment, adversely affect the consummation of such Tender Offer or such Consent Solicitation or shall have taken any action that challenges the validity or effectiveness of the procedures used by us in the making of such Tender Offer or such Consent Solicitation or the acceptance of, or payment for, the Notes or, if the requisite Consents to approve the Amendments are received, the effectiveness of the Amendments. The Tender Offers are not conditioned upon any minimum principal amount of the Notes being tendered or upon the receipt of Consents necessary to approve the Amendments. Neither Tender Offer is conditioned upon the completion of the other Tender Offer. The conditions to the Tender Offers and the Consent Solicitations are for the sole benefit of Reliance and may be asserted by us in our sole discretion with respect to each Tender Offer and each Consent Solicitation, regardless of the circumstances giving rise to such conditions or may be waived by us, in whole or in part, in our sole discretion, whether or not any other condition of the Tender Offers and the Consent Solicitations also is waived. Our failure at any time to exercise any of the foregoing rights shall not be deemed a waiver of any right, and each right shall be deemed an ongoing right which may be asserted at any time up until the Expiration Date. We have not made a decision as to what circumstances would lead us to waive any such condition, and any such waiver would depend on circumstances prevailing at the time of such waiver. Any determination by us concerning the events described in this section shall be final and binding upon all Holders. Although we have no present plans or arrangements to do so, we reserve the right to amend, at any time, the terms of the Tender Offers and/or the Consent Solicitations. We will give Holders notice of such amendments as may be required by applicable law. THE AMENDMENTS The Amendments will be set forth in supplemental indentures to each of the Indentures for the Notes to be entered into between the Issuer of the Notes governed by such Indenture, any Guarantors and the Trustee under such indenture. With respect to each Indenture, such supplemental indenture will be entered into and become effective promptly following our acceptance for payment of the related Notes pursuant to the Tender Offer. In the Consent Solicitations, Reliance is seeking Consents to all the Amendments with respect to each Consent Solicitation as a single proposal. Accordingly, a Consent purporting to consent to only some of the Amendments will be deemed not to be a valid delivery of a Consent by a Holder. The Amendments would, among other things, eliminate in their entirety the obligations of the Issuers and any guarantors to comply with substantially all of the restrictive covenants contained in each of the Indentures and the Notes (other than the covenants related to change of control offers) as well as eliminate certain events of default. Specifically, the Amendments would eliminate the following covenants and events of default contained in the Indentures: 14
    • Fixed Note Indenture Floating Note Indenture Section Provision Section Provision Section 4.3 Provision of Financial Information Section 4.3 Provision of Financial Information Section 4.4 Compliance Certificate Section 4.4 Compliance Certificate Section 4.5 Taxes; Insurance Section 4.5 Taxes; Insurance Section 4.6 Stay; Extension and Usury Laws Section 4.6 Stay; Extension and Usury Laws Section 4.7 Limitation on Restricted Section 4.7 Limitation on Restricted Payments Payments Section 4.8 Limitation on Dividends and Other Section 4.8 Limitation on Dividends and Other Payments Affecting Restricted Payments Affecting Restricted Subsidiaries Subsidiaries Section 4.9 Limitation on Incurrence of Debt Section 4.9 Limitation on Incurrence of Debt Section 4.10 Limitation on Asset Sales Section 4.10 Limitation on Asset Sales Section 4.11 Limitation on Transactions with Section 4.11 Limitation on Transactions Affiliates with Affiliates Section 4.12 Limitation on Liens Section 4.12 Limitation on Liens Section 4.13 Limitation on Sale and Leaseback Section 4.13 Limitation on Sale and Leaseback Transactions Transactions Section 4.15 Corporate Existence Section 4.15 Corporate Existence Section 4.17 Business Activities Section 4.17 Business Activities Section 4.20 Additional Note Guarantees Section 4.20 Additional Note Guarantees Section 4.21 Limitation on Creation of Unrestricted Section 4.21 Limitation on Creation of Unrestricted Subsidiaries Subsidiaries Section 4.22 Further Instruments and Acts Section 4.22 Further Instruments and Acts Section 5.1 Merger, Consolidation or Sale of Assets – Section 5.1 Merger, Consolidation or Sale of deletion of conditions to consolidations, Assets – deletion of conditions to mergers, transfers and leases as to the consolidations, mergers, transfers and absence of defaults and events of default leases as to the absence of defaults and and the ability of the issuer of the Fixed events of default and the ability of the Notes or surviving entity to incur issuer of the Floating Notes or additional indebtedness under the surviving entity to incur additional Indenture indebtedness under the Indenture Section 6.1 (3), (4), (5), Certain Events of Default (relating to Section 6.1 (3), (4), (5), (6), Certain Events of Default (relating to (6), (7) defaults with respect to the enforceability defaults under other covenants or of any Note Guarantee, defaults under agreements in the Indenture, defaults other covenants or agreements in the under instruments securing or Indenture, defaults under instruments evidencing indebtedness and the securing or evidencing indebtedness and rendering of certain judgments) the rendering of certain judgments) The Amendments would also delete definitions in the respective Indentures if all references to such definitions would be eliminated as a result of the foregoing and make certain other changes of a technical or conforming nature to the Indentures and the Notes.
    • Reliance expects that each Issuer will enter into a supplemental indenture prior to the completion of the Tender Offer for its Notes, assuming that the requisite Consents to adopt the Amendments are received, and such supplemental indenture will become effective immediately upon its execution. The Amendments will not become operative with respect to a series of Notes, however, until Reliance accepts for payment all such Notes validly tendered and not validly withdrawn pursuant to the Tender Offer therefor. 15
    • If the Tender Offers are consummated and the Amendments become operative, the Amendments will be binding on all outstanding Notes. The modification or elimination of restrictive covenants, certain events of default, and other provisions pursuant to the Amendments may permit the Issuers of the Notes to take actions that, among other things, could increase the credit risks with respect to the issuer of the Notes faced by non-tendering Holders, adversely affect the market price of the Notes that remain outstanding or otherwise be adverse to the interests of non-tendering Holders. See “Certain Significant Considerations.” The foregoing is qualified in its entirety by reference to the Indentures and the form of the supplemental indentures. OTHER PURCHASES OF NOTES Whether or not the Tender Offers are consummated, we and our affiliates may from time to time acquire Notes, otherwise than pursuant to the Tender Offers, through open-market purchases, privately negotiated transactions, tender offers, exchange offers, redemptions or otherwise, upon such terms and at such prices as we may determine (or as may be provided for in the Indentures), which may be more or less than the price to be paid pursuant to the Tender Offers and could be for cash or other consideration. MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS This disclosure is limited to the federal tax issues addressed herein. Additional issues may exist that are not addressed in this disclosure and that could affect the federal tax treatment of the Tender Offers and the Consent Solicitations. This tax disclosure was written in connection with the promotion or marketing by Reliance of the Tender Offers and Consent Solicitations, and it cannot be used by any holder for the purpose of avoiding penalties that may be asserted against the holder under the Internal Revenue Code of 1986, as amended (the “Code”). Holders should seek their own advice based on their particular circumstances from an independent tax advisor. The following summary describes the material U.S. federal income tax consequences related to the Tender Offers and Consent Solicitations. This discussion applies only to Notes held as capital assets and does not describe all of the tax consequences that may be relevant to holders in light of their particular circumstances or to holders subject to special rules, such as: certain financial institutions; • insurance companies; • dealers and traders in securities or foreign currencies; • tax-exempt organizations; • certain former citizens and residents of the United States; • persons holding Notes as part of a straddle, hedge or integrated transaction; • U.S. Holders (as defined below) whose functional currency is not the U.S. dollar; • partnerships or other entities classified as partnerships for U.S. federal income tax purposes; or • persons subject to the alternative minimum tax. • This summary is based on the Code, administrative pronouncements, judicial decisions and final, temporary and proposed Treasury regulations in effect as of the date hereof, changes to any of which subsequent to the date of this Offer to Purchase and Consent Solicitation Statement may affect the tax consequences described herein. Holders are urged to consult their own tax advisors with regard to the application of the U.S. federal income tax laws to their particular situations as well as any tax consequences arising under the laws of any state, local or foreign taxing jurisdiction. If a partnership holds a Note, the U.S. federal income tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership. As a result, this summary does not address the tax treatment of partnerships or persons who hold their Notes through a partnership or other pass-through entity. Any partners of a partnership holding the Notes are urged to consult their tax advisors. 16
    • Tax Consequences to U.S. Holders As used herein, the term “U.S. Holder” means a beneficial owner of a Note that is, for U.S. federal income tax purposes: an individual citizen or resident of the United States; • a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the • laws of the United States or of any political subdivision thereof; or an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source. • Consequences to Tendering U.S. Holders Upon Reliance’s purchase of the Notes pursuant to the Tender Offers and Consent Solicitations, a U.S. Holder will recognize taxable gain or loss equal to the difference between the amount of cash received in exchange for the Notes (other than cash attributable to accrued interest and, as discussed below under “—Consent Payment,” potentially other than the amount of any Consent Payment) and such U.S. Holder’s adjusted tax basis in tendered Notes. Subject to the discussions below under “—Market Discount,” any gain or loss will be capital gain or loss. Such capital gain or loss will be long-term capital gain or loss if the U.S. Holder held the Notes for more than one year at the time of the repurchase pursuant to the Tender Offers. The deduction of capital losses for U.S. federal income tax purposes is subject to limitations. The cash received attributable to accrued but unpaid interest that has not yet been included in a U.S. Holder’s income will be taxable as ordinary interest income. Market Discount. If a U.S. Holder holds Notes acquired at a “market discount,” any gain recognized by the U.S. Holder upon the purchase of the Notes pursuant to the Tender Offers would be recharacterized as ordinary interest income to the extent of accrued market discount that had not previously been included as ordinary income. A U.S. Holder will be treated as having acquired a Fixed Note at a “market discount” if its principal amount exceeded its initial tax basis in the hands of such U.S. Holder, unless a statutorily defined de minimis exception applies. A U.S. Holder will be treated as having acquired a Floating Note at a “market discount” if its adjusted issue price at acquisition exceeded its initial tax basis in the hands of such U.S. Holder, unless a statutorily defined de minimis exception applies. Consent Payment. The U.S. federal income tax treatment of a holder’s receipt of a Consent Payment is unclear. The receipt of a Consent Payment by a holder may be treated for U.S. federal income tax purposes either as (i) additional consideration received in exchange for the Notes, in which case such amount would be taken into account in determining the amount of gain or loss on the purchase by Reliance or (ii) separate consideration for consenting to the Amendments, in which case such amount would constitute ordinary income to a U.S. Holder. Reliance intends to treat a Consent Payment as additional consideration paid in exchange for the tendered Notes. U.S. Holders are urged to consult their own tax advisors regarding the proper characterization and treatment of a Consent Payment for U.S. federal income tax purposes. Information Reporting and Backup Withholding. Information returns will be filed with the Internal Revenue Service (“IRS”) in connection with payments made with respect to the Tender Offers and Consent Solicitations (including any Consent Payments and any amounts attributable to accrued but unpaid interest), unless the U.S. Holder is a corporation or other exempt recipient. A U.S. Holder will be subject to U.S. backup withholding on such payments if the U.S. Holder fails to provide its taxpayer identification number to the Depositary and comply with certain certification procedures or otherwise establish an exemption from backup withholding. The amount of any backup withholding deducted from a payment to a U.S. Holder will be allowed as a credit against the U.S. Holder’s U.S. federal income tax liability and may entitle the U.S. Holder to a refund, provided that the required information is furnished to the IRS. Consequences to Non-Tendering U.S. Holders If the Amendments are adopted, the U.S. federal income tax consequences to non-tendering U.S. Holders will depend on whether or not, under applicable Treasury regulations (the “Regulations”), the adoption of the Amendments constitutes a “significant modification” of the Notes. If the adoption of the Amendments constitutes a significant modification of the Notes, non-tendering U.S. Holders will be deemed to have exchanged their Notes (“Old Notes”) for new Notes (“New Notes”). 17
    • Under the Regulations, the modification of a debt instrument is a significant modification if, based on the facts and circumstances and taking into account all modifications of the debt instrument collectively (except for, among others, modifications that add, delete or alter customary accounting or financial covenants), the legal rights or obligations that are altered and the degree to which they are altered are “economically significant.” The Regulations provide that a modification of a debt instrument that adds, deletes or alters customary accounting or financial covenants is not a significant modification. We intend to take the position that the adoption of the Amendments would not cause a significant modification of the Notes under the Regulations, and therefore would not result in a deemed exchange of the Notes for U.S. federal income tax purposes. Even if the adoption of the Amendments were to constitute a significant modification of the Notes, a non-tendering U.S. Holder would not recognize gain or loss if the deemed exchange qualified as a tax-free recapitalization. The deemed exchange will be treated as a recapitalization only if both the Old Notes and the New Notes constitute “securities” within the meaning of the provisions of the Code governing reorganizations. Although the matter is not free from doubt, we intend to take the position that any deemed exchange would qualify as a recapitalization for U.S. federal income tax purposes. Provided that the adoption of the Amendments does not result in a deemed exchange or, failing that, provided that the deemed exchange constitutes a tax-free recapitalization, a non-tendering U.S. Holder will have the same adjusted tax basis in, and holding period for, the Notes following the adoption of the Amendments as the holder had immediately prior to the adoption of the Amendments. If the adoption of the Amendments were deemed to constitute a significant modification of the Notes and if the resulting deemed exchange were not to constitute a recapitalization, the adoption of the Amendments would be a taxable event for non-tendering U.S. Holders. In such case, a non-tendering U.S. Holder would generally realize gain or loss on the deemed exchange of Old Notes for New Notes in an amount equal to the difference (if any) between the amount realized on the deemed exchange and such U.S. Holder’s adjusted tax basis in the Old Notes. The amount realized would equal the “issue price” of the New Notes (other than any amount treated as received with respect to accrued interest on the Old Notes, which would be taxable as ordinary interest income to the extent not previously included in income). The issue price of the New Notes will depend on whether the Old Notes or the New Notes are “publicly traded” within the meaning of applicable Treasury regulations. If either the Old Notes or the New Notes are publicly traded, the issue price of the New Notes will equal the fair market value of the New Notes (if the New Notes are publicly traded) or the Old Notes (if the New Notes are not publicly traded), in each case on the date of the deemed exchange. If neither the Old Notes nor the New Notes are publicly traded, the issue price of the New Notes will equal their stated principal amount. If a deemed exchange is treated as a wash sale within the meaning of Section 1091 of the Code, U.S. Holders would not be allowed to currently recognize any loss resulting from the deemed exchange. Instead, such loss will be deferred, and would be reflected as an increase in the basis of the New Notes. U.S. Holders should consult their own tax advisors regarding whether a deemed exchange may be subject to the wash sale rules. Subject to the application of the market discount rules discussed in the next paragraph, any gain or loss will be capital gain or loss, and will be long-term capital gain or loss if at the time of the deemed exchange, the Old Notes have been held for more than one year. The deduction of capital losses for U.S. federal income tax purposes is subject to limitations. A U.S. Holder’s holding period for a New Note will commence on the date immediately following the date of the deemed exchange, and the U.S. Holder’s initial tax basis in the New Note will be the issue price of the New Note. If a U.S. Holder holds Old Notes acquired at a “market discount,” any gain recognized by the holder on a deemed exchange of the Old Notes would be recharacterized as ordinary interest income to the extent of accrued market discount that had not previously been included as ordinary income. If the deemed exchange qualifies as a recapitalization, however, any market discount on the Old Notes prior to the deemed exchange would survive the deemed exchange, although some or all of the market discount could effectively be converted into original issue discount, as described immediately below. Subject to a statutory de minimis exception, if the issue price of a New Note received on a deemed exchange for a Fixed Note (determined in the manner described above) at the time of the deemed exchange were less than its principal amount, such New Note would have original issue discount for U.S. federal income tax purposes, which would be included in a U.S. Holder’s gross income on a constant yield basis in advance of receipt of cash attributable to the discount. Each New Note received on a deemed exchange for a Floating Note will have original 18
    • issue discount for U.S. federal income tax purposes, which will be included in a U.S. Holder’s gross income on a constant yield basis in advance of receipt of cash attributable to the discount. In addition, as described in “Certain Significant Considerations,” Reliance may in the future effect a redemption or a redemption and a defeasance of any Notes that are not tendered pursuant to the Tender Offers and Consent Solicitations. Upon the redemption of any such Notes, a non-tendering U.S. Holder would generally recognize taxable gain or loss in accordance with the principles set forth under “—Consequences to Tendering U.S. Holders.” A defeasance would constitute a significant modification of such Notes for U.S. federal income tax purposes under the Regulations, and non-tendering U.S. Holders would be deemed to have exchanged their Old Notes for New Notes as described above, except that such exchange likely would not qualify as a recapitalization. Holders are encouraged to consult their own tax advisors as to the consequences of the adoption of the Amendments. Tax Consequences to Non-U.S. Holders As used herein, the term “Non-U.S. Holder” means a beneficial owner of a Note that is, for U.S. federal income tax purposes: a nonresident alien individual; • a foreign corporation; or • a foreign estate or trust. • This discussion is not addressed to Non-U.S. Holders who own, actually or constructively, 10% or more of the total combined voting power of all classes of stock of Reliance entitled to vote, who own, actually or constructively, 10% or more of the value of stock of Reliance or who are controlled foreign corporations related to Reliance through stock ownership. Additionally, this discussion does not describe the U.S. federal income tax consequences to Non-U.S. Holders who are engaged in a trade or business in the United States with which the Notes are effectively connected, or who are individuals present in the United States for 183 days or more in the taxable year of disposition of the Notes. Such Non- U.S. Holders will generally be subject to special rules and are encouraged to consult their own tax advisors regarding the U.S. federal income tax consequences applicable to their particular situation. Consequences to Tendering Non-U.S. Holders Subject to the discussions below under “—Consent Payment” and “—Information Reporting and Backup Withholding,” any payments received by a Non-U.S. Holder in exchange for Notes surrendered in the Tender Offers and Consent Solicitations generally will not be subject to U.S. federal income or withholding tax, provided that the Non-U.S. Holder certifies on IRS Form W-8BEN (or other applicable form) under penalties of perjury, that it is not a United States person. Consent Payment. As described above under “—Tax Consequences to U.S. Holders—Consequences to Tendering U.S. Holders—Consent Payment,” we intend to take the position that a Consent Payment is additional consideration in exchange for the tendered Notes, in which case the payment will not be subject to U.S. federal income or withholding tax except as described in the next paragraph. If the IRS were to take the position that a Consent Payment is treated as separate consideration for consenting to the Amendments, we could be subject to tax on any amounts that were required to be withheld. Non-U.S. Holders are encouraged to consult their own tax advisors with respect to the U.S. federal income tax treatment of the Consent Payment. Information Reporting and Backup Withholding. Unless a Non-U.S. Holder complies with certification procedures to establish that it is not a United States person, the Non-U.S. Holder may be subject to information reporting and U.S. backup withholding on any payments received in exchange for Notes. The amount of any backup withholding from a payment to a Non-U.S. Holder will be allowed as a credit against the Non- U.S. Holder’s U.S. federal income tax liability and may entitle the Non-U.S. Holder to a refund, provided that the required information is furnished to the IRS. Consequences to Non-Tendering Non-U.S. Holders Subject to the following sentence, Non-U.S. Holders that do not tender their Notes pursuant to the Tender Offers and Consent Solicitations will generally not be subject to U.S. federal income tax. If there is a deemed 19
    • exchange of Old Notes for New Notes, the portion of the New Notes deemed received that is attributable to accrued interest or original issue discount on the Old Notes may be subject to U.S. federal withholding tax, unless the Non-U.S. Holder has certified on IRS Form W-8BEN (or other applicable form), under penalties of perjury, that it is not a United States person. Non-U.S. Holders are encouraged to consult their own tax advisors regarding the potential tax consequences of not tendering their Notes pursuant to the Tender Offers and Consent Solicitations. PERSONS EMPLOYED IN CONNECTION WITH THE TENDER OFFERS AND THE CONSENT SOLICITATIONS Dealer Manager The Dealer Manager for the Tender Offers and Consent Solicitations is Citigroup Global Markets Inc. We have agreed to pay the Dealer Manager customary fees for its services as dealer manager in connection with the Tender Offers and the Consent Solicitations. We have also agreed to reimburse the Dealer Manager for its reasonable out-of-pocket expenses incurred in connection with the Tender Offers and the Consent Solicitations, including fees and disbursements of counsel, and to indemnify the Dealer Manager for certain liabilities, including liabilities arising under federal securities laws. The Dealer Manager and its affiliates have rendered and may in the future render various investment banking, lending and commercial banking services and other advisory services to Reliance, PNA Holding, the Issuers and any of their respecitve affiliates. The Dealer Manager has received, and may in the future receive, customary compensation for such services. The Dealer Manager may from time to time hold Notes in its proprietary accounts, and, to the extent it owns Notes in these accounts at the time of the Tender Offers and the Consent Solicitations, the Dealer Manager may tender those Notes and deliver related Consents. Information Agent and Depositary We have appointed Global Bondholder Services Corporation as the Information Agent with respect to the Tender Offers and Consent Solicitations. We will pay the Information Agent customary fees for its services and reimburse the Information Agent for its reasonable out-of- pocket expenses in connection therewith. We have also agreed to indemnify the Information Agent for certain liabilities. Requests for additional copies of documentation may be directed to the Information Agent at the address and telephone numbers set forth on the back cover of this Offer to Purchase. Global Bondholder Services Corporation has been appointed the Depositary for the Tender Offers. All deliveries and correspondence sent to the Depositary should be directed to one of the addresses set forth on the back cover of this Offer to Purchase. We will pay the Depositary customary fees for its services and reimburse the Depositary for its reasonable out-of-pocket expenses in connection therewith. We have also agreed to indemnify the Depositary for certain liabilities. Other In connection with the Tender Offers and Consent Solicitations, directors and officers of Reliance and its affiliates may solicit tenders and Consents by use of the mails, personally or by telephone, fax, electronic communication or other similar methods. Members of the Board and management of Reliance will not be specifically compensated for these services. We will pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this Offer to Purchase and related documents to the beneficial owners of the Notes and in handling or forwarding tenders of Notes by their customers. MISCELLANEOUS The Tender Offers and Consent Solicitations are not being made to (nor will tenders of Notes or Consents be accepted from or on behalf of) Holders of Notes in any jurisdiction in which the making or acceptance of the Tender Offers and Consent Solicitations would not be in compliance with the laws of such jurisdiction. However, we, in our sole discretion, may take such action as we may deem necessary to make or extend the Tender Offers and Consent Solicitations in any such jurisdiction. No person has been authorized to give any information or make any representation on our behalf that is not contained in this Offer to Purchase or other offer documents and, if given or made, such information or representation should not be relied upon. NONE OF RELIANCE, PNA HOLDING, THE ISSUERS, THE DEALER MANAGER, THE DEPOSITARY, THE INFORMATION AGENT OR THE TRUSTEE MAKES ANY RECOMMENDATION AS TO WHETHER 20
    • OR NOT HOLDERS SHOULD TENDER ALL OR A PORTION OF THEIR NOTES PURSUANT TO THE TENDER OFFERS AND DELIVERY OF CONSENTS IN THE CONSENT SOLICITATIONS. EACH HOLDER MUST MAKE ITS OWN DECISION AS TO WHETHER OR NOT TO TENDER NOTES AND, IF SO, THE PRINCIPAL AMOUNT OF NOTES AS TO WHICH ACTION IS TO BE TAKEN. RELIANCE STEEL & ALUMINUM CO. 21
    • In order to tender and consent, a Holder should send or deliver a properly completed and signed Letter of Transmittal, certificates for Notes and any other required documents to the Depositary at the address set forth below or tender pursuant to DTC’s Automated Tender Offer Program. The Depositary for the Tender Offers and Consent Solicitations is: Global Bondholder Services Corporation By facsimile: (For Eligible Institutions only): (212) 430-3775 Confirmation: (212) 430-3774 By Mail: By Overnight Courier: By Hand: 65 Broadway, Suite 723 65 Broadway, Suite 723 65 Broadway, Suite 723 New York, NY 10006 New York, NY 10006 New York, NY 10006 The Information Agent for the Tender Offers and Consent Solicitations is: Global Bondholder Services Corporation Global Bondholder Services Corporation 65 Broadway, Suite 723 New York, NY 10006 Attention: Corporate Actions Banks and Brokers call: (212) 430-3774 Toll-Free: (866) 807-2200 Any questions or requests for assistance or for additional copies of this Offer to Purchase or the Letter of Transmittal may be directed to the Information Agent at its telephone number above. A Holder may also contact the Dealer Manager at its telephone numbers set forth below or such Holder’s Custodian for assistance concerning the Tender Offers and Consent Solicitations. The Dealer Manager for the Tender Offers and the Consent Solicitations is: Citi Liability Management Group 390 Greenwich Street, 4th Floor New York, NY 10013 (800) 558-3745 (toll-free) (212) 723-6106 (collect)