CREDIT AGREEMENT

Exhibit 4.2

CREDIT AGREEMENT

Dated as of June 9, 2008,

as Amended and Restated as of July 16, 2009

among

PLY GEM HOLDINGS, INC.,

PLY GEM INDUSTRIES, INC.,

as the Specified U.S. Borrower,

CWD WINDOWS AND DOORS, INC.,

as the Canadian Borrower,

The Other Borrowers Named Herein,

CREDIT SUISSE,

as Administrative Agent, U.S. Swing Line Lender and U.S. L/C Issuer,

GENERAL ELECTRIC CAPITAL CORPORATION,

as Collateral Agent,

CREDIT SUISSE, TORONTO BRANCH

as Canadian Swing Line Lender and Canadian L/C Issuer,

The Other Lenders Party Hereto,

CREDIT SUISSE SECURITIES (USA) LLC,

as Sole Lead Arranger and Sole Bookrunner

and

GENERAL ELECTRIC CAPITAL CORPORATION,

as Syndication Agent

and

UBS Loan Finance LLC,

as Documentation Agent

[CS&M Ref No. 5865-643]

 

 

TABLE OF CONTENTS

ARTICLE I

Definitions and Accounting Terms

SECTION 1.01.	Defined Terms	2
SECTION 1.02.	Other Interpretive Provisions	59
SECTION 1.03.	Accounting Terms	60
SECTION 1.04.	Rounding	61
SECTION 1.05.	Times of Day	61
SECTION 1.06.	Letter of Credit Amounts	61
SECTION 1.07.	Currency Equivalents Generally	61
ARTICLE II
The Commitments and Credit Extensions
SECTION 2.01.	The Loans	61
SECTION 2.02.	Borrowings, Conversions and Continuations of Loans	69
SECTION 2.03.	Letters of Credit  Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit	71
SECTION 2.04.	Swing Line Loans.	78
SECTION 2.05.	Prepayments	85
SECTION 2.06.	Termination or Reduction of Commitments	87
SECTION 2.07.	Repayment of Loans	88
SECTION 2.08.	Interest	88
SECTION 2.09.	Fees	89
SECTION 2.10.	Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate	90
SECTION 2.11.	Evidence of Debt	91
SECTION 2.12.	Payments Generally; Administrative Agent’s Clawback	91
SECTION 2.13.	Sharing of Payments by Lenders	94
SECTION 2.14.	Nature of Obligations	95
SECTION 2.15.	Borrower Agent	96
SECTION 2.16.	Incremental Revolving Credit Commitments	97
ARTICLE III
Taxes, Yield Protection and Illegality
SECTION 3.01.	Taxes	98
SECTION 3.02.	Illegality	102
SECTION 3.03.	Inability to Determine Rates	103
SECTION 3.04.	Increased Costs; Reserves on Eurodollar Rate Loans	103
SECTION 3.05.	Compensation for Losses	105
SECTION 3.06.	Mitigation Obligations; Replacement of Lenders	105
SECTION 3.07.	Survival	106
ARTICLE IV
Conditions Precedent to Credit Extensions
SECTION 4.01.	Conditions of Initial Credit Extension	106
SECTION 4.02.	Conditions to all Credit Extensions	113

ARTICLE V
Representations and Warranties
SECTION 5.01.	Existence, Qualification and Power; Compliance with Laws	114
SECTION 5.02.	Authorization; No Contravention	114
SECTION 5.03.	Governmental Authorization; Other Consents	114
SECTION 5.04.	Binding Effect	115
SECTION 5.05.	Financial Statements; No Material Adverse Effect	115
SECTION 5.06.	Litigation	116
SECTION 5.07.	No Default	116
SECTION 5.08.	Ownership of Property; Liens	116
SECTION 5.09.	Environmental Compliance	116
SECTION 5.10.	Insurance	117
SECTION 5.11.	Taxes	118
SECTION 5.12.	ERISA Compliance	118
SECTION 5.13.	Subsidiaries; Equity Interests; Loan Parties	119
SECTION 5.14.	Margin Regulations; Investment Company Act	119
SECTION 5.15.	Disclosure	119
SECTION 5.16.	Compliance with Laws	120
SECTION 5.17.	Intellectual Property; Licenses, Etc	120
SECTION 5.18.	Solvency	120
SECTION 5.19.	Casualty, Etc	120
SECTION 5.20.	Perfection, Etc	120
SECTION 5.21.	Senior Debt	121
SECTION 5.22.	Tax Shelter Regulations	121
SECTION 5.23.	Anti-Terrorism Law	121
SECTION 5.24.	Accounts	122
SECTION 5.25.	Canadian Pension Plans	123
ARTICLE VI
Affirmative Covenants
SECTION 6.01.	Financial Statements; Borrowing Base	123
SECTION 6.02.	Certificates; Other Information	125
SECTION 6.03.	Notices	127
SECTION 6.04.	Payment of Obligations	128
SECTION 6.05.	Preservation of Existence, Etc	128
SECTION 6.06.	Maintenance of Properties	128
SECTION 6.07.	Maintenance of Insurance	129
SECTION 6.08.	Compliance with Laws	129
SECTION 6.09.	Books and Records	129
SECTION 6.10.	Inspections; Appraisals	129
SECTION 6.11.	Use of Proceeds	130
SECTION 6.12.	Covenant to Guarantee Obligations and Give Security	130
SECTION 6.13.	Compliance with Environmental Laws	134
SECTION 6.14.	Further Assurances	134
SECTION 6.15.	Compliance with Terms of Leaseholds	135
SECTION 6.16.	Designation as Senior Debt	135
SECTION 6.17.	Collateral Administration	135
SECTION 6.18.	Maintenance of Cash Management System	137
SECTION 6.19.	Collateral Audit	137
SECTION 6.20.	Post-Closing Matters	138
ARTICLE VII
Negative Covenants
SECTION 7.01.	Liens	138
SECTION 7.02.	Investments	141
SECTION 7.03.	Indebtedness	144
SECTION 7.04.	Fundamental Changes	146
SECTION 7.05.	Dispositions	147
SECTION 7.06.	Restricted Payments	149
SECTION 7.07.	Change in Nature of Business	151
SECTION 7.08.	Transactions with Affiliates	151
SECTION 7.09.	Burdensome Agreements	152
SECTION 7.10.	Use of Proceeds	153
SECTION 7.11.	Consolidated Fixed Charge Coverage Ratio	153
SECTION 7.12.	Amendments of Material Documents	153
SECTION 7.13.	Accounting Changes	153
SECTION 7.14.	Prepayments, Etc. of Indebtedness	153
SECTION 7.15.	Equity Interests of the Specified U.S. Borrower and Subsidiaries	154
SECTION 7.16.	Designation of Senior Debt	154

ARTICLE VIII
Events of Default and Remedies
SECTION 8.01.	Events of Default	154
SECTION 8.02.	Remedies upon Event of Default	157
SECTION 8.03.	Application of Funds	158
SECTION 8.04.	Collection Allocation Mechanism	160
ARTICLE IX
The Agents
SECTION 9.01.	Appointment and Authority	161
SECTION 9.02.	Rights as a Lender	162
SECTION 9.03.	Exculpatory Provisions	162
SECTION 9.04.	Reliance by Administrative Agent	163
SECTION 9.05.	Delegation of Duties	164
SECTION 9.06.	Resignation of Administrative Agent	165
SECTION 9.07.	Non-Reliance on  Administrative Agent and Other Lenders	165
SECTION 9.08.	No Other Duties, Etc	165
SECTION 9.09.	Administrative Agent May File Proofs of Claim	165
SECTION 9.10.	Collateral and Guaranty Matters	166
SECTION 9.11.	Secured Cash Management Agreements and Secured Hedge Agreements	167
ARTICLE X
Miscellaneous
SECTION 10.01.	Amendments, Etc	168
SECTION 10.02.	Notices; Effectiveness; Electronic Communications	170
SECTION 10.03.	No Waiver; Cumulative Remedies	173
SECTION 10.04.	Expenses; Indemnity; Damage Waiver	174
SECTION 10.05.	Payments Set Aside	175
SECTION 10.06.	Successors and Assigns	176
SECTION 10.07.	Treatment of Certain Information; Confidentiality	180
SECTION 10.08.	Right of Setoff	181
SECTION 10.09.	Interest Rate Limitation	181
SECTION 10.10.	Counterparts; Integration; Effectiveness	182
SECTION 10.11.	Survival of Representations and Warranties	183
SECTION 10.12.	Severability	183
SECTION 10.13.	Replacement of Lenders	183
SECTION 10.14.	Governing Law; Jurisdiction; Etc	184
SECTION 10.15.	Waiver of Jury Trial	185
SECTION 10.16.	No Advisory or Fiduciary Responsibility	185
SECTION 10.17.	Electronic Execution of Assignments and Certain Other Documents	186
SECTION 10.18.	USA Patriot Act Notice	186
SECTION 10.19.	Judgment Currency	186
SECTION 10.20.	Language	187
SECTION 10.21.	Intercreditor Agreement	187

 

 

 

Preliminary Statements :

The parties hereto are party to that certain Original Credit Agreement (such term and other capitalized terms used in these preliminary statements are defined in Section 1.01 hereof).  Pursuant to the Amendment and Restatement Agreement, and upon satisfaction of the conditions set forth therein, the Original Credit Agreement is being amended and restated in the form of this Agreement.

The Original Credit Agreement established, among other things, the U.S. Revolving Credit Facility and the Canadian Revolving Credit Facility (in each case, as defined therein), and permitted the Borrowers to establish, subject to the terms and conditions set forth therein, Incremental Revolving Credit Commitments (as defined therein).  Upon the effectiveness of the Amendment and Restatement Agreement, the Original Credit Agreement will be amended and restated to, among other things, increase the Revolving Credit Commitments consisting of U.S. Revolving Credit Commitments, and decrease the amount of Incremental Revolving Credit Commitments the Borrowers are permitted to establish to $25,000,000.

The Borrowers have requested that the Lenders provide a revolving credit facility, and the Lenders have indicated their willingness to lend and the L/C Issuers have indicated their willingness to issue letters of credit, in each case, on the terms and subject to the conditions set forth herein.

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

 

 

 

ARTICLE I

 

Definitions and Accounting Terms

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

“ 2012 Senior Subordinated Notes ” means all outstanding 9% unsecured senior subordinated notes due 2012 issued by the Specified U.S. Borrower pursuant to the 2012 Senior Subordinated Notes Indenture.

“ 2012 Senior Subordinated Notes Indenture ” means the Indenture dated as of February 12, 2004 among U.S. Bank National Association, the Specified U.S. Borrower and certain of the Guarantors, together with all instruments and other agreements in connection therewith or otherwise setting forth the terms of the 2012 Senior Subordinated Notes, as may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof, but only to the extent permitted under the terms of the Loan Documents.

“ ABL Priority Collateral ” means the “Revolving Facility First Lien Collateral” (as defined in the Intercreditor Agreement).

“ Account ” has the meaning specified in the UCC (or, with respect to a Canadian Loan Party, the PPSA), and shall include any and all rights of a Loan Party to payment for goods sold or leased or for services rendered that are not evidenced by an Instrument or Chattel Paper, whether or not they have been earned by performance.

“ Account Debtor ” a Person who is obligated under an Account, Chattel Paper or General Intangible.

“ Administrative Agent ” means Credit Suisse in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent and, with respect to matters relating to the Canadian Revolving Credit Facility, means CS Toronto, in its capacity as Canadian administrative agent under any of the Loan Documents, or any successor Canadian administrative agent.

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

“ Administrative Questionnaire ” means an Administrative Questionnaire in substantially the form of Exhibit E-2 or any other form approved by the Administrative Agent.

“ Advisory Agreement ” means the General Advisory Agreement dated as of February 12, 2004 between the Specified U.S. Borrower and CXCIC LLC, as amended,

 

supplemented or otherwise modified from time to time in accordance with the terms thereof, but only to the extent permitted under the Loan Documents.

 

“ Affiliate ” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“ Agents ” means the Administrative Agent and the Collateral Agent.

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

“ Agreement ” means this Credit Agreement as modified, amended, supplemented or restated, and in effect from time to time.

“ Amendment and Restatement Agreement ” means the Amendment and Restatement Agreement dated as of July 16, 2009, among Holdings, the Specified U.S. Borrower, the Canadian Borrower, the Subsidiaries of the Specified U.S. Borrower party thereto, the Lenders party thereto, the Administrative Agent, the Collateral Agent, CS Toronto and the other agents party thereto.

“ Anti-Terrorism Laws ” has the meaning specified in Section 5.23(a) .

“ Applicable Commitment Fee Rate ” means, for each fiscal quarter ending after the Closing Date, (a) 0.50% per annum, if the Average Revolving Credit Facility Balance during the immediately preceding fiscal quarter is greater than 66% of the Aggregate Commitments outstanding during such period, (b) 0.625% per annum, if the Average Revolving Credit Facility Balance during the immediately preceding fiscal quarter is less than or equal to 66% and greater than 33% of the Aggregate Commitments outstanding during such period, or (c) 0.75%, if the Average Revolving Credit Facility Balance during the immediately preceding fiscal quarter is less than or equal to 33% of the Aggregate Commitments outstanding during such period.  Notwithstanding the foregoing, until the fiscal quarter ending on or around March 31, 2009, the Applicable Commitment Fee Rate shall be 0.625%.

“ Applicable Percentage ” means, (a) with respect to any U.S. Appropriate Lender at any time, the percentage (carried out to the ninth decimal place) of the U.S. Revolving Credit Facility represented by such U.S. Revolving Credit Lender’s U.S. Revolving Credit Commitment at such time and (b) with respect to any Canadian Appropriate Lender at any time, the percentage (carried out to the ninth decimal place) of the Canadian Revolving Credit Facility represented by such Canadian Revolving Credit Lender’s Canadian Revolving Credit Commitment at such time.  If the commitment of each Appropriate Lender to make Revolving Credit Loans and the obligation of each L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02 , or if the Revolving Credit Commitments have expired, then the Applicable Percentage of each Appropriate Lender in respect of the Revolving Credit Facility shall be determined based on the Applicable Percentage of such Appropriate Lender in respect of the Revolving Credit Facility most recently in effect, giving effect to any subsequent assignments.  The Applicable Percentage of each Lender in respect of each Facility is set forth opposite the

“ Applicable Rate ” means, for each fiscal quarter, the applicable percentage per annum set forth below determined by reference to Average Excess Availability for the immediately preceding fiscal quarter:

Applicable Rate
Pricing Level	Average Excess Availability	Eurodollar Rate, BA Rate and Letter of Credit Fees	Base Rate, Canadian Base Rate and Canadian Prime Rate
1	≥ $100,000,000	3.75%	2.75%
2	< $100,000,000 but ≥ $50,000,000	4.00%	3.00%
3	< $50,000,000	4.25%	3.25%

Notwithstanding the foregoing, (a) during the fiscal quarter in which the Closing Date occurs, Level 2 shall be deemed to apply, and (b) thereafter and until the fiscal quarter ending on or around March 31, 2009, for purposes of determining the Applicable Rate, Average Excess Availability shall be deemed to be not greater than $100,000,000 or less than $50,000,000. Any increase or decrease in the Applicable Rate resulting from a change in the Average Excess Availability shall become effective as of the first calendar day of each fiscal quarter.  Average Excess Availability shall be calculated by the Administrative Agent based on the Administrative Agent’s records.  If the Borrowing Base Certificates (including any required financial information in support thereof) of the Borrowers are not received by the Agents by the date required pursuant to Section 6.01(e) of this Agreement, then, upon the request of the Required Lenders, the Applicable Rate shall be determined as if the Average Excess Availability for the immediately preceding fiscal quarter is at Level 3 until such time as such Borrowing Base Certificates and supporting information are received.

Notwithstanding anything to the contrary contained in this definition, the determination of the Applicable Rate for any period shall be subject to the provisions of Section 2.10(b) .

“ Appropriate Lender ” means, at any time, (a) (i) with respect to the U.S. Revolving Credit Facility, a Lender that has a Commitment with respect to the U.S. Revolving Credit Facility or holds a U.S. Revolving Credit Loan at such time (each, a “ U.S. Appropriate Lender ”), (ii) with respect to the U.S. Letter of Credit Sublimit, (A) the U.S. L/C Issuer and (B) if any U.S. Letters of Credit have been issued pursuant to Section 2.01(c) , the U.S. Revolving Credit Lenders and (iii) with respect to the U.S. Swing Line Sublimit, (A) the U.S. Swing Line Lender and (B) if any U.S. Swing Line Loans are outstanding pursuant to Section 2.04(A)(a) , the U.S. Revolving Credit Lenders and (b) (i) with respect to the Canadian Revolving Credit Facility, a Lender that has a Commitment with respect to the Canadian Revolving Credit Facility or holds a Canadian Revolving Credit Loan at such time (each, a “ Canadian Appropriate Lender ”), (ii) with respect to the Canadian Letter of Credit Sublimit, (A) the Canadian L/C Issuer and (B) if any Canadian Letters of Credit have been issued pursuant to Section 2.01(d) , the

“ 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.

“ 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 entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.06(b) ), and accepted by the Administrative Agent, in substantially the form of Exhibit E-1 or any other form approved by the Administrative Agent.

“ Attributable Indebtedness ” means, on any date, (a) in respect of any Capitalized 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, (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease or similar payments under the relevant lease or other applicable agreement or instrument that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease or other agreement or instrument were accounted for as a Capitalized Lease and (c) all Synthetic Debt of such Person.

“ Audited Financial Statements ” means the audited consolidated balance sheet of Holdings and its Subsidiaries for the fiscal year ended December 31, 2007 and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of Holdings and its Subsidiaries, including the notes thereto.

“ Availability Period ” means, with respect to each Revolving Credit Facility, the period from and including the Closing Date to the earliest of (i) the Maturity Date, (ii) the date of termination of the applicable Revolving Credit Commitments pursuant to Section 2.06 , and (iii) the date of termination of the commitment of each applicable Appropriate Lender to make Revolving Credit Loans and of the obligation of the applicable L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02 .

“ Availability Reserve ” means, on any date of determination and with respect to the U.S. Borrowing Base or the Canadian Borrowing Base, as the case may be, the sum (without duplication) of (a) reserves for deterioration in the salability of inventory; (b) the Rent and Charges Reserve; (c) the Bank Product Reserve; (d) all accrued Royalties, whether or not then due and payable by, in the case of the U.S. Borrowing Base, a U.S. Loan Party or, in the case of the Canadian Borrowing Base, a

“ Average Excess Availability ” means, on any date of determination, the amount of Excess Availability during a stipulated consecutive Business Day period, calendar day period or fiscal quarter period divided by the number of Business Days or calendar days, as the case may be, in such period.

“ Average Revolving Credit Facility Balance ” means, for any period for any Facility, the amount obtained by adding the Outstanding Amount of Loans outstanding under such Facility (less the Outstanding Amount of any Swing Line Loans under such Facility on such date) and L/C Obligations under such Facility at the end of each day for the period in question and by dividing such sum by the number of days in such period.

“ BA Rate ” means, for the Interest Period of each BA Rate Loan, the rate of interest per annum equal to the average annual rate applicable to Canadian Dollar bankers’ acceptances having an identical or comparable term as the proposed BA Rate Loan displayed and identified as such on the display referred to as the “CDOR Page” (or any display substituted therefor) of Reuters Monitor Money Rates Service as at approximately 10:00 a.m. Toronto time on such day (or, if such day is not a Business Day, as of 10:00 a.m. Toronto time on the immediately preceding Business Day), plus five (5) basis points; provided that if such rate does not appear on the CDOR Page at such time

“ BA Rate Loan ” means any Canadian Revolving Credit Loan denominated in Canadian Dollars bearing interest at a rate determined by reference to the BA Rate.

“ Bank Product ” means any of the following products, services or facilities extended to any Loan Party: (a) cash management services provided by Cash Management Banks under Cash Management Agreements and (b) products provided by Hedge Banks under Secured Hedge Agreements; provided , however , that for any of the foregoing to be included as an “Obligation” for purposes of a distribution under Section 8.03 , the applicable Secured Party and the Loan Party must have previously provided written notice to the Administrative Agent of (i) the existence of such Bank Product, (ii) the maximum dollar amount of obligations arising thereunder to be included as a Bank Product Reserve (the “ Bank Product Amount ”), and (iii) the methodology to be used by such parties in determining the Bank Product Debt owing from time to time.  The Bank Product Amount may be changed from time to time upon written notice to the Administrative Agent by the applicable Secured Party and Loan Party.  No Bank Product Amount may be established or increased at any time that a Default or Event of Default exists and is continuing, or if a reserve in such amount would cause an Overadvance.

“ Bank Product Amount ” has the meaning specified in the definition of “Bank Product”.

“ Bank Product Debt ” means Debt and other obligations of a Loan Party relating to Bank Products.

“ Bank Product Reserve ” means, with respect to the U.S. Borrowing Base or the Canadian Borrowing Base, the aggregate amount of reserves established by the Agents from time to time in their Credit Judgment in respect of Bank Product Debt of the U.S. Loan Parties or the Canadian Loan Parties, as the case may be, which shall be at least equal to the sum of all Bank Product Amounts.

“ Base Rate ” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the Eurodollar Rate in effect on such day for a one-month Interest Period plus 1% and (c) the rate of interest in effect for such day as determined from time to time by Credit Suisse as its “prime rate” in effect at its principal office in New York City.  The “prime rate” is a rate set by Credit Suisse based upon various factors including Credit Suisse’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in the

“ Base Rate Loan ” means a Revolving Credit Loan that bears interest based on the Base Rate.

“ BIA ” means the Bankruptcy and Insolvency Act (Canada).

“ Bookrunner ” means Credit Suisse Securities (USA) LLC, in its capacity as sole lead arranger and sole bookrunner.

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

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

“ Borrowers ” mean the Canadian Borrower and the U.S. Borrowers.

“ Borrowing ” means a Revolving Credit Borrowing or a Swing Line Borrowing, as the context may require.

“ Borrowing Base ” means any of the U.S. Borrowing Base, the Canadian Borrowing Base and/or the Total Borrowing Base, as the context may require.

“ Borrowing Base Certificate ” means a certificate substantially in the form of Exhibit K .

“ Business Day ” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, relative to matters with respect to the U.S. Revolving Credit Facility, the state where the Administrative Agent’s Office is located, or relative to matters with respect to the Canadian Revolving Credit Facility, the jurisdiction where the Administrative Agent’s principal Canadian lending Affiliate or branch is located and, if such day relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

“ CAM ” means the mechanism for the allocation and exchange of interests in the Loans, participations in Letters of Credit and collections thereunder established pursuant to Section 8.04 .

“ CAM Exchange ” means the exchange of the Lenders’ interests provided for in Section 8.04 .

“ CAM Exchange Date ” means the first date after the Closing Date on which there shall occur (a) any Event of Default under clause (f) or (g) of Section 8.01 with respect to a Borrower or (b) an acceleration of Loans pursuant to Section 8.02(b) .

 

 

“ CAM Percentage ” means, as to each Lender, a fraction, expressed as a decimal, of which (a) the numerator shall be the sum, without duplication, of (i) the Canadian Revolving Credit Exposure, if any, of such Lender, (ii) the U.S. Revolving Credit Exposure, if any, of such Lender and (iii) the aggregate amount of any other Obligations otherwise owed to such Lender pursuant to the Loan Documents, in each case immediately prior to the CAM Exchange Date, and (b) the denominator shall be the sum of (i) the aggregate U.S. Revolving Credit Exposure of all the Lenders, (ii) the aggregate Canadian Revolving Exposure of all Lenders and (iii) the aggregate amount of any other Obligations otherwise owed to any of the Lenders pursuant to the Loan Documents, in each case immediately prior to the CAM Exchange Date.

“ Canadian Account Control Agreements ” means, collectively, the Deposit Account Control Agreements entered into by the Canadian Loan Parties in favor of the Collateral Agent, each in form and substance reasonably satisfactory to the Collateral Agent.

“ Canadian Base Rate ” means, for any day, a 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 determined from time to time by CS Toronto as its “Base Rate” for loans in Dollars in Canada.  The “Canadian Base Rate” is a rate set by CS Toronto based upon various factors including CS Toronto’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in the “Canadian Base Rate” so determined by CS Toronto shall take effect at the opening of business on the day specified by CS Toronto.

“ Canadian Base Rate Loan ” means any Canadian Revolving Credit Loan denominated in Dollars bearing interest computed by reference to the Canadian Base Rate.

“ Canadian Benefit Plans ” means all employee benefit plans, programs or arrangements of any nature or kind whatsoever that are not Canadian Pension Plans and are maintained or contributed to by, or to which there is or may be an obligation to contribute by, any Borrower or its Subsidiaries in respect of its employees or former employees in Canada.

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

“ Canadian Borrowing Base ” means, on any date of determination, an amount (calculated based on the most recent Borrowing Base Certificate delivered to the Agents in accordance with this Agreement) equal to

 

 

“ Canadian Cash Management Bank ” means any Person that, at the time it enters into a Cash Management Agreement, is an Agent or a Canadian Lender or an Affiliate of an Agent or a Canadian Lender, in its capacity as a party to such Cash Management Agreement, in each case in respect of services provided under such Cash Management Agreement to a Canadian Loan Party.

“ Canadian Collateral ” means all of the “Collateral” and “Mortgaged Property” referred to in the Canadian Collateral Documents and all of the other property that is or is intended under the terms of the Canadian Collateral Documents to be subject to Liens in favor of the Collateral Agent for the benefit of the Canadian Secured Parties.

“ Canadian Collateral Documents ” means, collectively, the Canadian Security Agreement, the Canadian Intellectual Property Security Agreement, Canadian Mortgages, the Canadian Account Control Agreements, each of the collateral assignments, Security Agreement Supplements, IP Security Agreement Supplements, security agreements, deeds of hypothec, hypothecs, pledge agreements or other similar agreements delivered to the Collateral Agent pursuant to Section 6.12 , and each of the other agreements, instruments or documents that creates or purports to create a Lien securing the Canadian Obligations in favor of the Administrative Agent for the benefit of the Canadian Secured Parties.

“ Canadian Dollar ” or “ Cdn. $ ” means Canadian dollars, the lawful currency of Canada.

“ Canadian Excess Availability ” means, at any time, the difference between (a) the lesser of (i) the Canadian Revolving Credit Facility and (ii) the Canadian Borrowing Base at such time, as determined from the most recent Borrowing Base Certificate delivered by the Borrower Agent to the Agents pursuant to Section 6.01(e) hereof minus (b) the Total Canadian Revolving Credit Outstandings.

“ Canadian Guarantee ” means, collectively, the Guarantees made by the Canadian Subsidiary Guarantors in favor of the Canadian Secured Parties, each in form and substance reasonably satisfactory to the Administrative Agent, together with each other guarantee and guarantee supplement delivered pursuant to Section 6.12 .

“ Canadian Intellectual Property Security Agreement ” has the meaning specified in Section 4.01(a)(vii) .

 

 

“ Canadian L/C Advance ” means, with respect to each Canadian Revolving Credit Lender, such Lender’s funding of its participation in any Canadian L/C Borrowing in accordance with its Applicable Percentage.

“ Canadian L/C Borrowing ” means an extension of credit resulting from a drawing under any Canadian Letter of Credit which has not been reimbursed on the date when made or refinanced as a Canadian Revolving Credit Borrowing.

“ Canadian L/C Credit Extension ” means, with respect to any Canadian Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.

“ Canadian L/C Issuer ” means CS Toronto in its capacity as issuer of Canadian Letters of Credit hereunder, or any successor issuer of Canadian Letters of Credit hereunder.

“ Canadian L/C Obligations ” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Canadian Letters of Credit plus the aggregate of all Unreimbursed Amounts in respect of Canadian Letters of Credit, including all Canadian L/C Borrowings.  For purposes of computing the amount available to be drawn under any Canadian Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06 .  For all purposes of this Agreement, if on any date of determination a Canadian Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

“ Canadian Lender ” means each financial institution listed on Schedule 2.01 as a “Canadian Revolving Credit Lender”, as well as any Person that becomes a “Canadian Revolving Credit Lender” hereunder pursuant to Section 2.16 or 10.06 and, as the context requires, includes the Canadian Swing Line Lender.

“ Canadian Letter of Credit ” means any standby letter of credit or commercial letter of credit issued hereunder.

“ Canadian Letter of Credit Sublimit ” means an amount equal to $3,000,000.  The Canadian Letter of Credit Sublimit is part of, and not in addition to, the Canadian Revolving Credit Facility.

“ Canadian Loan ” means an extension of credit by a Lender to the Canadian Borrower under Article II in the form of a Canadian Revolving Credit Loan or a Canadian Swing Line Loan.

“ Canadian Loan Documents ” means, collectively, (a) this Agreement, (b) the Canadian Revolving Credit Notes, (c) the Canadian Guarantee, (d) the Canadian Collateral Documents, (e) the Fee Letter and (f) each Issuer Document with respect to a Canadian Letter of Credit.

 

 

“ Canadian Loan Parties ” means the Canadian Borrower and the Canadian Subsidiary Guarantors.

“ Canadian Obligations ” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Canadian Loan Party arising under any Loan Document or otherwise with respect to any Canadian Loan, Canadian Letter of Credit, Canadian Secured Cash Management Agreement or Canadian Secured Hedge Agreement, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Canadian Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

“ Canadian Overadvance ” has the meaning specified in Section 2.01(g) .

“ Canadian Overadvance Loan ” means a Canadian Revolving Credit Loan made when an Overadvance exists or is caused by the funding thereof.

“ Canadian Payment Account ” means the Canadian Dollar account and the U.S. Dollar account of the Collateral Agent to which all monies constituting proceeds of Canadian Collateral shall be transferred from time to time.

“ Canadian Pension Plans ” means each plan, program or arrangement which is required to be registered as a pension plan under any applicable pension benefits standards or tax statute or regulation in Canada (or any province or territory thereof) maintained or contributed to by, or to which there is or may be an obligation to contribute by, any Borrower or its Subsidiaries in respect of its Canadian employees or former employees.

“ Canadian Prime Rate ” means, for any day, a fluctuating rate of interest per annum equal to the greater of (a) the rate of interest in effect for such day as determined from time to time by CS Toronto as its “Prime Rate” and (b) the interest rate per annum equal to the sum of (i) the BA Rate applicable to bankers’ acceptances with a term of 30 days on such day and (ii) 0.50% per annum.  The “Canadian Prime Rate” is a rate set by CS Toronto based upon various factors including CS Toronto’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in the “Canadian Prime Rate” so determined by CS Toronto shall take effect at the opening of business on the day specified by CS Toronto.

“ Canadian Prime Rate Loan ” means any Canadian Revolving Credit Loan denominated in Canadian Dollars bearing interest computed by reference to the Canadian Prime Rate.

“ Canadian Priority Payables ” means, at any time, with respect to the Canadian Borrowing Base:

 

 

(a) the amount past due and owing by the Canadian Borrower and any other Canadian Loan Party, or the accrued amount for which each of the Canadian Borrower and any other Canadian Loan Party has an obligation to remit to a Governmental Authority or other Person pursuant to any applicable Law, rule or regulation, in respect of (i) pension fund obligations; (ii) employment insurance; (iii) goods and services taxes, sales taxes, employee income taxes and other taxes payable or to be remitted or withheld; (iv) workers’ compensation; (v) vacation pay; and (vi) other like charges and demands; in each case, in respect of which any Governmental Authority or other Person may claim a security interest, hypothec, prior claim, lien, trust or other claim or Lien ranking or capable of ranking in priority to or pari passu with one or more of the Liens granted in the Collateral Documents; and

“ Canadian Priority Payables Reserve ” means, on any date of determination for the Canadian Borrowing Base, a reserve established from time to time by the Agents in their Credit Judgment in such amount as the Agents may determine reflects the unpaid or unremitted Canadian Priority Payables by the Canadian Loan Parties, which would give rise to a Lien with priority under applicable Laws over the Lien of the Collateral Agent for the benefit of the Canadian Secured Parties.

“ Canadian Revolving Credit Borrowing ” means a borrowing consisting of simultaneous Canadian Revolving Credit Loans of the same Type and, in the case of Eurodollar Rate Loans and BA Rate Loans, having the same Interest Period made by each of the Canadian Revolving Credit Lenders pursuant to Section 2.01(b) and shall be deemed to include any Canadian Overadvance Loan and, to the extent attributed to the Canadian Collateral in the Agents’ Credit Judgment, Protective Advance made hereunder.

“ Canadian Revolving Credit Commitment ” means, as to each Canadian Revolving Credit Lender, its obligation to (a) make Canadian Revolving Credit Loans to the Canadian Borrower pursuant to Section 2.01(b) , (b) purchase participations in Canadian L/C Obligations, and (c) purchase participations in Canadian Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Canadian Revolving Credit Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement, including pursuant to Section 2.16 .

 

 

“ Canadian Revolving Credit Exposure ” means, with respect to any Appropriate Lender at any time, the Outstanding Amount of Canadian Revolving Credit Loans of such Lender plus such Lender’s Applicable Percentage of the Outstanding Amount of Canadian L/C Obligations with respect to Canadian Letters of Credit plus such Lender’s Applicable Percentage of the Outstanding Amount of Canadian Swing Line Loans.

“ Canadian Revolving Credit Facility ” means, at any time, the aggregate amount of the Canadian Revolving Credit Lenders’ Canadian Revolving Credit Commitments at such time.

“ Canadian Revolving Credit Lender ” means, at any time, any Lender that has a Canadian Revolving Credit Commitment at such time.

“ Canadian Revolving Credit Loan ” has the meaning specified in Section 2.01(b) and shall be deemed to include any Canadian Overadvance Loan and, to the extent attributed to the Canadian Collateral in the Agents’ Credit Judgment, Protective Advance made hereunder.

“ Canadian Revolving Credit Note ” means a promissory note made by the Canadian Borrower in favor of a Canadian Appropriate Lender evidencing Canadian Revolving Credit Loans or Canadian Swing Line Loans, as the case may be, made by such Canadian Revolving Credit Lender, substantially in the form of Exhibit C-2 .

“ Canadian Secured Cash Management Agreement ” means any Cash Management Agreement that is entered into by and between a Canadian Loan Party and any Cash Management Bank.

“ Canadian Secured Hedge Agreement ” means any Secured Hedge Agreement that is entered into by and between any Canadian Loan Party and any Hedge Bank.

“ Canadian Secured Parties ” means, collectively, the Administrative Agent, the Collateral Agent, the Canadian Revolving Credit Lenders, the Canadian L/C Issuer, the Canadian Hedge Banks, the Canadian Cash Management Banks, each co-agent or sub-agent appointed by the Administrative Agent  or the Collateral Agent from time to time pursuant to Section 9.05 , and the other Persons the Canadian Obligations owing to which are or are purported to be secured by the Canadian Collateral under the terms of the Collateral Documents.

“ Canadian Security Agreement ” means, collectively, the Security Agreements and the deeds of hypothec delivered pursuant to Section 6.12 , in each case in respect of the Canadian Collateral, in each case in form and substance reasonably satisfactory to the Administrative Agent and as amended.

“ Canadian Subsidiary ” means any direct or indirect Subsidiary of the Specified U.S. Borrower which is incorporated or otherwise organized under the laws of Canada or any province or territory thereof.

 

 

“ Canadian Subsidiary Guarantor ” means each Canadian Subsidiary (other than the Canadian Borrower or any Excluded Subsidiary) and each Person that shall, at any time after the date hereof, become a Canadian Subsidiary and execute and deliver a Canadian Guarantee pursuant to Section 6.12 ; it being understood that none of the Canadian Borrower or any Canadian Subsidiary Guarantors shall guarantee any of the U.S. Obligations.

“ Canadian Swing Line Borrowing ” means a borrowing of a Canadian Swing Line Loan pursuant to Section 2.04 .

“ Canadian Swing Line Lender ” means CS Toronto in its capacity as provider of Canadian Swing Line Loans, or any successor swing line lender hereunder.

“ Canadian Swing Line Loan ” has the meaning specified in Section 2.04(B)(a).

“ Canadian Swing Line Sublimit ” means an amount equal to $1,500,000.  The Canadian Swing Line Sublimit is part of, and not in addition to, the Canadian Revolving Credit Facility.

“ Canadian Unfunded Advances/Participations ” shall mean (a) with respect to the Administrative Agent, the aggregate amount, if any (i) made available to the Canadian Borrower on the assumption that each Canadian Lender has made its portion of the applicable Borrowing available to the Administrative Agent as contemplated by Section 2.12(b) and (ii) with respect to which a corresponding amount shall not in fact have been returned to the Administrative Agent by the Canadian Borrower or made available to the Administrative Agent by any such Canadian Lender, (b) with respect to the Canadian Swing Line Lender, the aggregate amount, if any, of participations in respect of any outstanding Canadian Swing Line Loan that shall not have been funded by the Canadian Revolving Credit Facility Lenders in accordance with Section 2.04(c) and (c) with respect to the Canadian L/C Issuer, the aggregate amount, if any, of participations in respect of any outstanding Canadian L/C Borrowing that shall not have been funded by the Canadian Revolving Credit Facility Lenders in accordance with Sections 2.03(c) .

“ Capital Expenditures ” means, with respect to any Person for any period, any expenditure in respect of the purchase or other acquisition of any fixed or capital asset (excluding normal replacements and maintenance which are properly charged to current operations); provided , however , that Capital Expenditures shall not include any such expenditures which constitute (a) a Permitted Acquisition, (b) capital expenditures relating to the construction or acquisition of any property which has been transferred to a Person that is not a Borrower pursuant to a sale-leaseback transaction permitted under Section 7.05(f) , (c) to the extent permitted by this Agreement, a reinvestment of the net cash proceeds of any Disposition (other than any Dispositions under Sections 7.05(b) , (f) , (h) , (i) and (j) ) or any insurance proceeds paid on account of the loss of or damage to the assets being replaced, substituted, restored or repaired and the reinvestment of the net cash proceeds of any such Disposition or such insurance proceeds, (d) the purchase price

“ Capitalized Leases ” means all leases that have been or should be, in accordance with GAAP, recorded as capitalized leases.

“ Capitalized Lease Obligations ” means, at the time any determination thereof is to be made, the amount of the liability in respect of a Capitalized Lease that would at that time be required to be capitalized on a balance sheet in accordance with GAAP. Notwithstanding the foregoing, any obligations under any sale-leaseback transaction (including the Sale-Leaseback Transaction) in existence on the Closing Date shall not constitute Capitalized Lease Obligations hereunder.

“ Cash Collateralize ” has the meaning specified in Section 2.03(g) .

“ Cash Dominion Event ” means either (a) the occurrence and continuance of an Event of Default or (b) the failure of the Loan Parties to maintain Excess Availability of at least the greater of (i) 15% of the lesser of (A) the Total Borrowing Base and (B) the Aggregate Commitments and (ii) $20,000,000.  For purposes of this Agreement, the occurrence of a Cash Dominion Event shall be deemed continuing (a) so long as such Event of Default is continuing and has not been cured or waived, and/or (b) if the Cash Dominion Event arises under clause (b) above, until Excess Availability is equal to or greater than the greater of (i) 15% of the lesser of (A) the Total Borrowing Base and (B) the Aggregate Commitments and (ii) $20,000,000 for thirty (30) consecutive days, in which case a Cash Dominion Event shall no longer be deemed to be continuing for purposes of this Agreement.

“ Cash Equivalents ” means any of the following types of Investments, to the extent owned by the Borrowers or any of their Subsidiaries free and clear of all Liens (other than Liens created under the Collateral Documents and other Liens permitted hereunder):

provided that instruments equivalent to those referred to in clauses (a) through (f) above denominated in Canadian Dollars which are comparable in credit quality and tenor to those referred to above and customarily used by corporations for short term cash management purposes in Canada shall be permitted to the extent reasonably required in connection with any business conducted by any Subsidiary organized in Canada.

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

“ Cash Management Bank ” means a U.S. Cash Management Bank and/or a Canadian Cash Management Bank, as the context may require.

 

 

“ CCAA ” means the Companies’ Creditors Arrangement Act (Canada), as amended or otherwise modified from time to time and any rule or regulation issued thereunder.

“ CERCLA ” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980.

“ CERCLIS ” means the Comprehensive Environmental Response, Compensation and Liability Information System maintained by the U.S. Environmental Protection Agency.

“ CFC ” means a Person that is a controlled foreign corporation under Section 957 of the Code.

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

A “ Change of Control ”   shall be deemed to have occurred if:

 

 

 

 

 

For purpose of this definition, a person shall not be deemed to have beneficial ownership of Equity Interests subject to a stock purchase agreement, merger agreement or similar agreement until consummation of the transactions contemplated by such agreement.

“ Closing Date ” means June 9, 2008.

“ Code ” means the Internal Revenue Code of 1986 as amended from time to time.

“ Collateral ” means the U.S. Collateral and the Canadian Collateral.

“ Collateral Agent ” means General Electric Capital Corporation, in its capacity as “collateral agent” pursuant to Section 9.01 .

“ Collateral Documents ” means the U.S. Collateral Documents and the Canadian Collateral Documents.

“ Commodities Account Control Agreements ” has the meaning specified in the U.S. Security Agreement and/or the Canadian Security Agreement, as the context may require.

“ Commitment ” means a Revolving Credit Commitment.

“ Committed Loan Notice ” means a notice of (a) a Revolving Credit Borrowing, (b) a conversion of Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a) , which, if in writing, shall be substantially in the form of Exhibit A .

 

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

 

 

 

“ Consolidated Amortization Expense ” for any period means, with respect to any specified Person for such period, the amortization expense of such Person and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.

“ Consolidated Depreciation Expense ” for any period means, with respect to any specified Person for such period, the depreciation expense of such Person and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.

“ Consolidated EBITDA ” means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period and, without duplication, plus :  (1) Consolidated Income Tax Expense; plus (2) Consolidated Amortization Expense (but only to the extent not included in Consolidated Interest Expense); plus (3) Consolidated Depreciation Expense; plus (4) Consolidated Interest Expense; plus (5) Restructuring Expenses; plus (6) payments pursuant to the Advisory Agreement; plus (7) Pro Forma Cost Savings; plus (8) net out-of-pocket costs and expenses related to acquiring the inventory of a prior supplier of a company in connection with becoming a provider to such company not to exceed $5,000,000 for any Measurement Period; plus (9) fees and expenses payable in connection with the amendment and restatement of this Agreement, and costs payable in connection with the establishment of any incremental facilities permitted hereunder; plus (10) all other non-cash items reducing the Consolidated Net Income (excluding any non-cash charge that results in an accrual of a reserve for cash charges in any future period and excluding write-down or write-off of current assets) for such period, in each case for items (1) to (10) above, determined on a consolidated basis in accordance with GAAP; minus (11) the aggregate amount of all non-cash items, determined on a consolidated basis, to the extent such items increased Consolidated Net Income for such period; provided that the sum of the Restructuring Expenses and Pro Forma Costs Savings added to the Consolidated Net Income to compute Consolidated EBITDA in any Measurement Period shall not exceed 15% of such Consolidated EBITDA for such Measurement Period.

Notwithstanding the preceding, the provision for items (2) to (9) above of a Subsidiary which is not a Guarantor of the Specified U.S. Borrower shall be added to Consolidated Net Income to compute Consolidated EBITDA of the Specified U.S. Borrower only to the extent (and in the same proportion) deducted in determining Consolidated Net Income and with respect to the portion of Consolidated Net Income attributable to any Subsidiary (other than any Loan Party) only if a corresponding amount would be permitted at the date of determination to be distributed to the Specified U.S. Borrower by such Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to such Subsidiary or its stockholders.

“ Consolidated Fixed Charge Coverage Ratio ” means, for any period, the ratio of (a) (i) Consolidated EBITDA of the Specified U.S.

“ Consolidated Income Tax Expense ” for any period means, with respect to any specified Person for any period, the provision for taxes of such Person and its Subsidiaries, determined on a consolidated basis in accordance with GAAP.

“ Consolidated Interest Expense ” for any period means, with respect to any specified Person for any period, the sum, without duplication, of the total interest expense (less interest income) of such Person and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP and including without duplication,

less , to the extent included in such total interest expense, (A) the amortization during such period of capitalized financing costs associated with the Transactions and (B) the amortization during such period of other capitalized financing costs; provided , however , that, in the case of clause (B), the aggregate amount of amortization relating to such capitalized financing costs deducted in calculating Consolidated Interest Expense shall not exceed 5% of the aggregate amount of the financing giving rise thereto.

Consolidated Interest Expense shall be calculated excluding unrealized gains and losses with respect to Hedging Obligations.

“ Consolidated Net Income ” means, with respect to any specified Person for any period, the aggregate of the net income (or loss) of such Person and its Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that there shall be excluded from such net income (or loss) (to the extent otherwise included therein), without duplication:

 

 

For purposes of this definition of “Consolidated Net Income,” “nonrecurring” means, with respect to any cash gain or loss, any gain or loss as of any date that is not reasonably likely to recur within the two years following such date; provided   that if there was a gain or loss similar to such gain or loss within the two years preceding such date, such gain or loss shall not be deemed nonrecurring.

 

 

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

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

“ Covenant Trigger Event ” means, at any time, either (a) the occurrence and continuance of an Event of Default or (b) the failure of the Loan Parties to maintain Excess Availability of at least the greater of (i) 15% of the lesser of (A) the Total Borrowing Base and (B) the Aggregate Commitments and (ii) $20,000,000.  For purposes of this Agreement, the occurrence of a Covenant Trigger Event shall be deemed continuing (a) so long as such Event of Default is continuing and has not been cured or waived and/or (b) if the Covenant Trigger Event arises under clause (b) above, until Excess Availability is equal to or greater than the greater of (i) 15% of the lesser of (A) the Total Borrowing Base and (B) the Aggregate Commitments and (ii) $20,000,000 for thirty (30) consecutive days, in which case a Covenant Trigger Event shall no longer be deemed to be continuing for purposes of this Agreement.  For purposes of determining whether a Covenant Trigger Event shall have occurred and is continuing, no greater than 25% of Excess Availability shall be composed of Canadian Excess Availability and no greater than 25% of the Aggregate Commitments shall be composed of Commitments of Canadian Lenders.

“ Credit Extension ” means each of the following:  (a) a Borrowing and (b) an L/C Credit Extension.

“ Credit Judgment ” means the Agents’ commercially reasonable judgment exercised in good faith, based upon their consideration of any factor that they reasonably believe (a) could materially adversely affect the quantity, quality, mix or value of Collateral (including any Applicable Law that may inhibit collection of an Account), the enforceability or priority of the Collateral Agent’s Liens, or the amount that the Agents and the Lenders could receive in liquidation of any Collateral; (b) suggests that any collateral report or financial information delivered by any Loan Party is incomplete, inaccurate or misleading in any material respect; (c) materially increases the likelihood of any Insolvency Proceeding involving a Loan Party; or (d) creates or could result in an Event of Default.  In exercising such judgment, the Agents may consider any factors that could materially increase the credit risk of lending to the Borrowers on the security of the Collateral.

“ CS Toronto ” has the meaning specified in the introductory paragraph hereto.

“ Debtor Relief Laws ” means the Bankruptcy Code of the United States, the BIA, the CCAA and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency,

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

“ Default Rate ” means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate, Canadian Base Rate or Canadian Prime Rate, as applicable plus (ii) the Applicable Rate, if any, applicable to Base Rate Loans, Canadian Base Rate Loans or Canadian Prime Rate Loans, as the case may be, under the Revolving Credit Facility plus (iii) 2% per annum; provided , however , that with respect to a Eurodollar Rate Loan or a BA Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus 2% per annum.

“ Defaulting Lender ” means any Lender that (a) has failed to fund any portion of the Revolving Credit Loans, participations in L/C Obligations or participations in Swing Line Loans required to be funded by it hereunder within one Business Day of the date required to be funded by it hereunder, (b) has otherwise failed to pay over to the 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.

“ Deposit Account Control Agreements ” has the meaning specified in the U.S. Security Agreement and/or the Canadian Security Agreement, as the context may require.

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

“ Disqualified Equity Interests ” means any Equity Interest which, by its terms (or by the terms of any security or other Equity Interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (a) matures or is mandatorily redeemable (other than solely for Equity Interests (other than Disqualified Equity Interests)), pursuant to a sinking fund obligation or otherwise, (b) is redeemable at the option of the holder thereof, in whole or in part, (c) provides for the scheduled payments of dividends in cash, or (d) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is ninety one (91) days after the Maturity Date; provided that if such Equity Interest is issued to any employee or

 

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

“ Dollar Equivalent ” means, at any time, (a) with respect to any amount denominated in Dollars, such amount, and (b) with respect to any amount denominated in any other currency, the equivalent amount thereof in Dollars as determined by the Administrative Agent or the L/C Issuers, as the case may be, at such time on the basis of the Spot Rate in accordance with Section 1.07 .

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

“ Dominion Account ” means any Deposit Account of a Loan Party at the Collateral Agent or its Affiliates or branches or another bank acceptable to the Collateral Agent, in each case which is subject to a Deposit Account Control Agreement and a lockbox or other similar arrangement in accordance with Section 6.17(a)(iv).

“ Eligible Assignee ” means any Person that meets the requirements to be an assignee under Section 10.06(b)(iii) , (v) and (vi) (subject to such consents, if any, as may be required under Section 10.06(b)(iii) ).

“ Eligible Collateral ” means, collectively, Eligible Inventory and Eligible Receivables.

 

 

“ Eligible Inventory ”   means Inventory of the Loan Parties subject to the Lien of the Collateral Documents, the value of which shall be determined by taking into consideration, among other factors, the lowest of its cost and its book value determined in accordance with GAAP and excluding any portion of cost attributable to intercompany profit among the Loan Parties and their Affiliates; provided , however , that, subject to the ability of the Agents to establish other criteria of ineligibility in their Credit Judgment or modify the criteria established below, unless otherwise approved by the Agents in their Credit Judgment, none of the following classes of Inventory shall be deemed to be Eligible Inventory:

 

 

If the Agents deem Inventory ineligible in their Credit Judgment (and not based upon the criteria set forth above), then the Agents shall give the Borrower Agent two (2) Business Days’ prior notice thereof (unless an Event of Default exists, in which event no notice shall be required).

“ Eligible Receivables ” means Accounts of the Loan Parties subject to the Lien of the Collateral Documents, the value of which shall be determined by taking into consideration, among other factors, their book value determined in accordance with GAAP, net of any returns, rebates, discounts (calculated on the shortest terms), credits, allowances or Taxes (including sales, excise or other taxes) that have been or could be claimed by the Account Debtor or any other Person; provided , however , that, subject to the ability of the Agents to establish other criteria of ineligibility in their Credit Judgment or modify the criteria established below, unless otherwise approved by the Agents in their Credit Judgment, none of the following classes of Accounts shall be deemed to be Eligible Receivables:

 

 

 

If the Agents deem Accounts ineligible in their Credit Judgment (and not based upon the criteria set forth above), then the Agents shall give the Borrower Agent two (2) Business Days’ prior notice thereof (unless an Event of Default exists, in which event no notice shall be required).

“ Environmental Laws ” means any and all federal, state, provincial, territorial, municipal, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, licenses, and the common law relating to pollution or the protection of the environment (including ambient air, indoor air, surface wastes, groundwater, land and subsurface strata), human health and safety and natural resources including those related to Release or threat of Release, or exposure to, or generation, storage, treatment, transport, handling, distribution or disposal of Hazardous Materials.

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

“ Environmental Permit ” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

“ Equity Interests ” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

 

 

“ Equity Investors ” means the Sponsor, the Management Shareholders, the other equityholders of Ply Gem Prime Holdings, Inc. and their respective Affiliates and Related Parties as of the Closing Date.

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

“ ERISA Affiliate ” means any trade or business (whether or not incorporated) under common control with the 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) (i) the occurrence of a Reportable Event with respect to a Pension Plan or (ii) the requirements of Section 4043(b) of ERISA apply with respect to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Pension Plan, and an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably expected to occur with respect to such Pension Plan within the following 30 days; (b) a withdrawal by the 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 that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrowers 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 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 constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrowers or any ERISA Affiliate; (g) the withdrawal by any Loan Party or any ERISA Affiliate from a Pension Plan that is a multiple employer or other plan described in Section 4064(a) of ERISA during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (h) the conditions for imposition of a lien under Section 303(k) of ERISA or other applicable Laws shall have been met with respect to any Pension Plan or Canadian Pension Plan; or (i) a determination that any Pension Plan is in “at risk” status (within the meaning of Section 303 of ERISA).

“ Eurodollar Rate ” means, for any Interest Period with respect to a Eurodollar Rate Loan, an interest rate per annum equal to the product of (a) the greater of (x) 2% per annum and (y) the rate per annum determined by Credit Suisse, at approximately 11:00 a.m. (London time) on the date which is two Business Days prior to the beginning of such Interest Period (as specified in the applicable Committed Loan Notice) by reference to the British Bankers’ Association Interest Settlement Rates for deposits in Dollars (as set forth by any service which has been nominated by the British Bankers’ Association as an authorized information vendor for the purpose of displaying such rates) for a period equal to such Interest Period,   provided that, to the extent that an interest rate is not ascertainable pursuant to the foregoing provision of this definition, the

 

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

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

“ Excess Availability ” means the sum of U.S. Excess Availability and Canadian Excess Availability.

“ Excluded Accounts ” has the meaning specified in the U.S. Security Agreement and/or the Canadian Security Agreement, as the context may require.

“ Excluded Subsidiary ” means, on any date, any Subsidiary of the Specified U.S. Borrower that has less than $100,000 in total assets; (ii) which does not have any Indebtedness (including by way of Guarantee) in respect of money borrowed (it being understood, without limitation to the foregoing, that in no event shall any Subsidiary that provides a Guarantee of the Senior Secured Notes be an Excluded Subsidiary), and (iii) which is not engaged in any substantial business activities.

“ Excluded Taxes ” means, with respect to any Agent, any Lender, any L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of a Borrower hereunder, (a) taxes imposed on or measured by its overall net income or capital (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the Laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located, (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction described in clause (a) above, (c) any backup withholding tax that is required by the Code to be withheld from any amounts payable under this Agreement, and (d) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower Agent under Section 10.13 and other than an assignee Lender pursuant to a CAM Exchange under Section 8.04 ), any United States withholding tax that (i) is required to be imposed on amounts payable to such Foreign Lender pursuant to the Laws in force at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office) or (ii) is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with clause (B) of Section 3.01(e)(ii) , except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from the Borrowers with respect to such withholding tax pursuant to Section 3.01(a)(ii) or (iii) .

 

 

“ Executive Order ” has the meaning specified in Section 5.23(a) .

“ Existing Credit Agreement ” means that certain Fifth Amended and Restated Credit Agreement, dated as of April 5, 2007, as amended, among the Borrowers, Holdings, UBS AG, Stamford Branch, as administrative agent and collateral agent and the lender parties and other agents party thereto.

“ Existing Letters of Credit ” means the letters of credit listed on Schedule 1.01 to the Original Credit Agreement and outstanding on the Closing Date.

“ Facility ” means the U.S. Revolving Credit Facility and/or the Canadian Revolving Credit Facility, as the context may require.

“ 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 Credit Suisse on such day on such transactions as determined by the Administrative Agent.

“ Fee Letter ” means (a) the letter agreement, dated June 2, 2008, among the Specified U.S. Borrower, the Administrative Agent and the Bookrunner and (b) the letter agreement, dated June 3, 2008, between the Specified U.S. Borrower and the Collateral Agent.

“ Foreign Lender ” means any Lender that is organized under the Laws of a jurisdiction other than that in which a Borrower is resident for tax purposes (including such a Lender when acting in the capacity of an L/C Issuer).  For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“ Foreign Plan ” means any employee benefit plan, program, policy, arrangement or agreement maintained or contributed to by, or entered into with, the Specified U.S. Borrower or any Subsidiary with respect to employees employed outside the United States.

“ Foreign Subsidiary ” means any direct or indirect Subsidiary of the Specified U.S. Borrower that is not a Domestic Subsidiary.

 

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

 

“ 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 activities.

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

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

“ Guarantee ” means, as to any Person, any (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien); provided that the term “Guarantee” shall not include customary and reasonable indemnity obligations in effect on the Closing Date or entered into in connection with any acquisition or Disposition of assets permitted under this Agreement (other than such obligations with respect to Indebtedness).  The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.  The term “ Guarantee ” as a verb has a corresponding meaning.

 

 

“ Guarantors ” means, collectively, Holdings, the Specified U.S. Borrower, the Subsidiaries of the Specified U.S. Borrower listed on Schedule 6.12 and each other Subsidiary of the Specified U.S. Borrower that shall be required to execute and deliver a guaranty or guaranty supplement pursuant to Section 6.12 .

“ Guaranties ” means the U.S. Guaranty and the Canadian Guarantee.

“ 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, mold, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

“ Hedge Bank ” means any Person that, at the time it enters into a Swap Contract permitted under Article VI or VII , is an Agent or a Lender or an Affiliate of an Agent or a Lender, in its capacity as a party to such Swap Contract.

“ Hedging Obligations ” means, with respect to any specified Person, the obligations of such Person under:

“ Holdings ” means Ply Gem Holdings, Inc.

 

 

provided that, “Indebtedness” shall not include any post-closing payment adjustments or earn-out, non-competition or consulting obligations existing on the Closing Date or incurred in connection with Investments permitted under Section 7.02(h) or (n) (i) if such obligations are not required to be reflected as a liability on the balance sheet of the applicable Person or (ii) if at the time of such Investment, the Specified U.S. Borrower was able to satisfy the tests in Section 7.02(h) or (n) , as applicable, after giving pro forma effect to the maximum possible payment that could result from such adjustment, earn-out or other obligation as if paid on the date of consummation of such Investment (as certified to the Administrative Agent in reasonable detail by a Responsible Officer of the Borrower).

 

 

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

“ Indemnified Taxes ”   means Taxes other than Excluded Taxes.

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

“ Information ” has the meaning specified in Section 10.07 .

“ Information Memorandum ” means the information memorandum intended to be used by the Bookrunner in connection with the syndication of the Commitments.

“ Initial Borrowing Base Certificate ” means the first Borrowing Base Certificate delivered by the Borrower Agent to the Agents pursuant to Section 6.01(e) after completion of the Required Audit and Appraisal.

“ Intellectual Property Security Agreements ” means the U.S. Intellectual Property Security Agreement and the Canadian Intellectual Property Security Agreement.

“ Intercompany Note ” means an intercompany note, substantially in the form of Exhibit I , executed by the Specified U.S. Borrower and each of its Subsidiaries and endorsed in blank by each of the U.S. Loan Parties.

“ Intercreditor Agreement ” means the Lien Subordination and Intercreditor Agreement dated as of the Closing Date, among the Collateral Agent, on behalf of the U.S. Secured Parties, and the Trustee, on behalf of the “Noteholder Secured Parties” (as defined therein), Holdings and the U.S. Loan Parties.

“ Interest Payment Date ” means, (a) as to any Eurodollar Rate Loan or BA Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date of the Facility under which such Loan was made; provided , however , that if any Interest Period for a Eurodollar Rate Loan or a BA Rate Loan exceeds 3 months, the respective dates that fall every 3 months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan, Canadian Base Rate Loan, Canadian Prime Rate Loan or Swing Line Loan, the first Business Day of each April, July, October and January and the Maturity Date of the Facility under which such Loan was made (with Swing Line Loans being deemed made under the Revolving Credit Facility for purposes of this definition).

 

“ Interest Period ” means, as to each Eurodollar Rate Loan and BA Rate Loan, the period commencing on the date such Eurodollar Rate Loan or BA Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan or BA Rate Loan, and ending on the date 1, 2, 3 or 6 months thereafter, as selected by a Borrower in its

“ Inventory ” has the meaning specified in the UCC or the PPSA, as applicable, and shall include all goods intended for sale or lease by a Loan Party, or for display or demonstration; all work in process, all raw materials, and other materials and supplies of every nature and description used or which might be used in connection with the manufacture, printing, packing, shipping, advertising, selling, leasing or furnishing such goods or otherwise used or consumed in such Loan Party’s business (but excluding Equipment).

“ Investment ” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or interest in, another 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 or all or a substantial part of the business of, such Person.  For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

“ IP Rights ” has the meaning specified in Section 5.17 .

“ IP Security Agreement Supplement ” means a supplement delivered in connection with any Intellectual Property Security Agreement, in each case in form and substance reasonably satisfactory to the Collateral Agent.

“ IRS ” means the United States Internal Revenue Service.

“ ISP ” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).

“ Issuer Documents ” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by

 

“ Junior Financing ” has the meaning specified in Section 7.14 .

“ Junior Financing Documentation ” means the 2012 Senior Subordinated Notes, the 2012 Senior Subordinated Notes Indenture and any documentation governing any other Junior Financing.

“ Laws ” means, collectively, all international, foreign, federal, state, provincial, territorial, municipal and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case having the force of law.

“ L/C Advance ” a U.S. L/C Advance and/or a Canadian L/C Advance, as the context may require.

“ L/C Borrowing ” means a U.S. L/C Borrowing and/or a Canadian L/C Borrowing, as the context may require.

“ L/C Credit Extension ” means a U.S. L/C Credit Extension and/or a Canadian L/C Credit Extension, as the context may require.

“ L/C Issuer ” means the U.S. L/C Issuer and/or the Canadian L/C Issuer, as the context may require.

“ L/C Obligations ” means the U.S. L/C Obligations and/or the Canadian L/C Obligations, as the context may require.

“ Lender ” means a U.S. Lender and/or a Canadian Lender, as the context may require.

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

“ Letter of Credit ” means a U.S. Letter of Credit and/or a Canadian Letter of Credit, as the context may require.

“ Letter of Credit Application ” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by an L/C Issuer.

 

 

“ Letter of Credit Expiration Date ” means the day that is five Business Days prior to the Maturity Date then in effect for the Revolving Credit Facility (or, if such day is not a Business Day, the next preceding Business Day).

“ Letter of Credit Fee ” has the meaning specified in Section 2.03(h).

“ Letter of Credit Sublimit ” means the U.S. Letter of Credit Sublimit and/or the Canadian Letter of Credit Sublimit, as the context may require.

“ License ” means any license or agreement under which a Loan Party is authorized to use IP Rights in connection with any manufacture, marketing, distribution or disposition of Collateral, any use of property or any other conduct of its business.

“ Licensor ” means any Person from whom a Loan Party obtains the right to use any IP Rights.

“ Lien ” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

“ Lien Waiver ” means an agreement, in form and substance reasonably satisfactory to the Collateral Agent, by which (a) for any personal property Collateral located on leased premises, the lessor waives or subordinates any Lien it may have on the Collateral, and agrees to permit the Collateral Agent to enter upon the premises and remove the Collateral or to use the premises for an agreed upon period of time to store or dispose of the Collateral; (b) for any Collateral held by a warehouseman, processor, shipper, customs broker or freight forwarder, such Person waives or subordinates any Lien it may have on the Collateral, agrees to hold any documents in its possession relating to the Collateral as agent for the Collateral Agent, and agrees to deliver the Collateral to the Collateral Agent upon request; and (c) for any Collateral held by a repairman, mechanic or bailee, such Person acknowledges the Collateral Agent’s Lien, waives or subordinates any Lien it may have on the Collateral, and agrees to deliver the Collateral to the Collateral Agent upon request.

“ Loan ” means a U.S. Loan and/or a Canadian Loan.

“ Loan Documents ” means the U.S. Loan Documents and the Canadian Loan Documents.

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

“ Management Shareholders ” means the members of management of the Specified U.S. Borrower or its Subsidiaries who were investors in Ply Gem Prime Holdings, Inc. on the Closing Date.

 

 

“ Mandatory Principal Payments ” means all regularly scheduled principal payments or redemptions or similar acquisitions for value of outstanding Indebtedness for borrowed money of any Borrower or Guarantor.

“ Material Adverse Effect ” means (A) a material adverse change in, or a material adverse effect on, the business, assets, liabilities, operations, condition (financial or otherwise) operating results of the Specified U.S. Borrower and its Subsidiaries, taken as a whole; (B) a material impairment of the rights and remedies of or benefits available to the Administrative Agent or any Lender under any Loan Document, or of the ability of the Borrowers or any Guarantor to perform its obligations under any Loan Document to which it is a party; or (C) a material adverse effect upon the legality, validity, binding effect or enforceability against any Borrower or any Guarantor of any Loan Document to which it is a party.

“ Material Contract ” means each contract of the Specified U.S. Borrower or any of its Subsidiaries relating to any material portion of the Accounts constituting Collateral.

“ Material Foreign Subsidiary ” has the meaning specified in Section 6.12(d) .

“ Material Real Estate ” means any parcel of real property that is fee owned by a U.S. Loan Party, other than any parcel of real property (i) for which the greater of the cost and the book value is less than $2,000,000, or (ii) which property is subject to a Lien permitted by Section 7.01(q) which prohibits the granting of a Lien to the Collateral Agent.

“ March 10-Q ” means Holdings’ quarterly report on Form 10-Q filed with the SEC on May 9, 2008.

“ Maturity Date ” means, with respect to each of the U.S. Revolving Credit Facility and the Canadian Revolving Credit Facility, the fifth anniversary of the Closing Date; provided , however , that if the 2012 Senior Subordinated Notes shall not have been refinanced in full on or prior to October 15, 2011 with the proceeds of Permitted Subordinated Indebtedness or a Permitted Equity Issuance, the Maturity Date shall be October 15, 2011; provided , further , that if such date is not a Business Day, the Maturity Date shall be the next preceding Business Day.

“ Measurement Period ” means, at any date of determination, the most recently completed four fiscal quarters of the Specified U.S. Borrower.

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

“ Mortgage ” has the meaning specified in Section 4.01(a)(vi) .

“ Mortgage Policy ” has the meaning specified in Section 4.01(a)(vi)(B) .

 

 

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

“ NOLV Percentage ” means the net orderly liquidation value of Inventory, expressed as a percentage, expected to be realized at an orderly, negotiated sale held within a reasonable period of time, net of all liquidation expenses, as determined from the most recent appraisal of the Loan Parties’ Inventory performed by an appraiser and on terms satisfactory to the Agents.

“ Noteholder Priority Collateral ” means the “Noteholder Collateral” (as defined in the Intercreditor Agreement).

“ Note ” means a Revolving Credit Note.

“ NPL ” means the National Priorities List under CERCLA.

“ Obligations ” means the U.S. Obligations and the Canadian Obligations.

“ OFAC ” has the meaning specified in Section 5.23(b)(v) .

“ Original Credit Agreement ” means the Credit Agreement dated as of June 9, 2008, among Holdings, the Specified U.S. Borrower, the Canadian Borrower, the Subsidiaries of the Specified U.S. Borrower from time to time party thereto as borrowers and guarantors, each lender from time to time party thereto, the Administrative Agent, the Collateral Agent, CS Toronto and the other agents party thereto, as modified or supplemented prior to the Restatement Effective Date, including pursuant to the Incremental Assumption Agreement, dated as of August 14, 2008, among, among others, Holdings, the Borrowers, General Electric Capital Corporation, as the Incremental Revolving Credit Lender, and the Administrative Agent.

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

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

 

 

“ Outstanding Amount ” means (a) with respect to Revolving Credit Loans and Swing Line Loans on any date, the Dollar Equivalent amount of the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Revolving Credit Loans and Swing Line Loans, as the case may be, occurring on such date; and (b) with respect to any L/C Obligations on any date, the Dollar Equivalent amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by a Borrower of Unreimbursed Amounts.  Notwithstanding the foregoing, at the time of any Canadian Revolving Credit Borrowing, any issuance of Canadian Letters of Credit, any Canadian L/C Borrowing or any conversion or continuation of a Canadian Loan if (a) such Borrowing, issuance, conversion or continuation is for a Loan or Letter of Credit denominated in Canadian dollars or (b) there are any outstanding Canadian Loans or Canadian Letters of Credit denominated in Canadian dollars, the Administrative Agent shall calculate the Outstanding Amount based on the Dollar Equivalent on the date of such Borrowing, conversion or continuation to determine whether such Borrowing complies with the proviso to the first sentences of Sections 2.01(a) , (b) , (c) or (d) or Sections 2.04(A)(a) or (B)(a) .

“Overadvance ” means a U.S. Overadvance and/or a Canadian Overadvance, as the context may require.

“ Overadvance Loan ” means a U.S. Overadvance Loan and/or a Canadian Overadvance Loan, as the context may require.

“ Overnight Rate ” means, for any day, (a) with respect to any amount denominated in Dollars, the greater of (i) the Federal Funds Rate and (ii) an overnight rate determined by the Administrative Agent, the applicable L/C Issuer or the applicable Swing Line Lender, as the case may be, in accordance with banking industry rules on interbank compensation, and (b) with respect to any amount denominated in Canadian Dollars, the rate of interest per annum at which overnight deposits in Canadian Dollars, in an amount approximately equal to the amount with respect to which such rate is being determined, would be offered for such day by CS Toronto in the Canadian interbank market for Canadian Dollars to major banks in such interbank market.

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

“ Payment Item ” means each check, draft or other item of payment payable to a Loan Party, including those constituting proceeds of any Collateral.

“ PBGC ” means the Pension Benefit Guaranty Corporation (or any successor).

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

 

“ Perfection Certificate ” shall mean certificates in the form of Exhibit L or any other form approved by the Administrative Agent, as the same shall be supplemented from time to time by a Perfection Certificate Supplement or otherwise.

“ Perfection Certificate Supplement ” shall mean a perfection certificate supplement in form and substance reasonably satisfactory to the Administrative Agent.

“ Permitted Acquired Debt ” has the meaning specified in Section 7.03(r) .

“ Permitted Acquisition ” has the meaning specified in Section 7.02(h) .

“ Permitted Encumbrances ” has the meaning specified in the Mortgages.

“ Permitted Equity Issuance ” means any sale or issuance of any Equity Interests (other than Disqualified Equity Interests) of the Specified U.S. Borrower (or capital contributions in respect thereof).

“ Permitted Refinancing ” means, with respect to any Person, any modification, refinancing, refunding, renewal or extension of any Indebtedness of such Person; provided that (a) the principal amount (or accreted value, if applicable) thereof does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so modified, refinanced, refunded, renewed or extended except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such modification, refinancing, refunding, renewal or extension and by an amount equal to any existing commitments unutilized thereunder (to the extent such commitments could be drawn at the time of such refinancing in compliance with this Agreement) or as otherwise permitted pursuant to Section 7.03 , (b) such modification, refinancing, refunding, renewal or extension has (i) a final maturity date equal to or later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being modified, refinanced, refunded, renewed or extended, (c) if the Indebtedness being modified, re-financed, refunded, renewed or extended is subordinated in right of payment to the Obligations, such modification, refinancing, refunding, renewal or extension is subordinated in right of payment to the Obligations on terms at least as favorable to the Lenders as those contained in the documentation governing the Indebtedness being modified, refinanced, refunded, renewed or extended, (d) the terms and conditions (including, if applicable, as to collateral) of any such modified, refinanced, refunded, renewed or extended Indebtedness are not materially, taken as a whole, less favorable to the Loan Parties or the Lenders than the terms and conditions of the Indebtedness being modified, refinanced, refunded, renewed or extended or are on market terms for similar issuances at the time of such modification, refinancing, refunding, renewal or extension, (e) such modification, refinancing, refunding, renewal or extension

 

“ Permitted Seller Notes ” has the meaning specified in Section 7.03(r) .

“ Permitted Subordinated Indebtedness ” means any unsecured Indebtedness of the Specified U.S. Borrower that (a) is expressly subordinated to the prior payment in full in cash of the Obligations on terms and conditions no less favorable to the Lenders than the terms and conditions of the 2012 Senior Subordinated Notes, (b) will not mature prior to the date that is six months after the Maturity Date, (c) has no scheduled amortization or payments of principal prior to the Maturity Date and (d) has covenant, default and remedy provisions no more restrictive, or mandatory prepayment, repurchase or redemption provisions no more onerous or expansive in scope than those contained in the 2012 Senior Subordinated Notes Indenture, taken as a whole; provided any such Indebtedness shall constitute Permitted Subordinated Indebtedness only if both before and after giving effect to the issuance or incurrence thereof, no Default or Event of Default shall have occurred and be continuing.

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

“ Plan ” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by any Borrower or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.  For greater certainty, “Plan” does not include any Canadian Benefit Plan or Canadian Pension Plan.

“ Platform ” has the meaning specified in Section 6.02 .

“ Pledged Debt ” means any pledged “Pledged Debt” defined in any Security Agreement and all other indebtedness from time to time owed to the Loan Parties (including, without limitation, all promissory notes or instruments, if any, evidencing such indebtedness) and required to be pledged by the Loan Parties pursuant to the Loan Documents.

“ Pledged Equity ” means any pledged “Pledged Stock” defined in any Security Agreement and all other Equity Interests from time to time acquired, owned or held by the Loan Parties (including, without limitation, the certificates, if any, representing such Equity Interests) and required to be pledged by the Loan Parties pursuant to the Loan Documents.

“ PPSA ” means the Personal Property Security Act of Alberta; provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the PPSA as in effect in a Canadian jurisdiction other than Alberta, or the Civil Code of Quebec, “PPSA” means the Personal Property Security Act as in effect from time to time in such other jurisdiction or the Civil

 

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

“ Pro Forma Cost Savings ” means, with respect to any Measurement Period, the reductions in costs that occurred during such Measurement Period that are (a) directly attributable to an asset acquisition and calculated on a basis that is consistent with Article 11 of Regulation S-X under the Securities Act of 1933, as amended, or (b) implemented, committed to be implemented or the commencement of implementation of which has begun in good faith by the business that was the subject of any such asset acquisition within six months of the date of the asset acquisition and that are supportable and quantifiable by the underlying records of such business, as if, in the case of each of clauses (a) and (b), all such reductions in costs had been effected as of the beginning of such period, decreased by any incremental expenses incurred or to be incurred during the Measurement Period in order to achieve such reduction in costs.

“ Protective Advance ” has the meaning specified in Section 2.01(h) .

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

“ Qualified Equity Interests ” means any Equity Interests other than Disqualified Equity Interests; provided   that such Equity Interests shall not be deemed Qualified Equity Interests to the extent sold or owed to a Subsidiary of the Specified U.S. Borrower or financed, directly or indirectly, using funds (a) borrowed from the Specified U.S. Borrower  or any Subsidiary of the Specified U.S. Borrower until and to the extent such borrowing is repaid or (b) contributed, extended, guaranteed or advanced by the Specified U.S. Borrower or any Subsidiary of the Specified U.S. Borrower (including, without limitation, in respect of any employee stock ownership or benefit plan).

“ Qualifying IPO ” means the issuance by Holdings or any parent company that directly or indirectly holds 100% of the issued and outstanding Equity Interests of Holdings of its common Equity Interests in an underwritten primary public offering (other than a public offering pursuant to a registration statement on Form S-8) pursuant to an effective registration statement filed with the SEC in accordance with the Securities Act (whether alone or in connection with a secondary public offering) that results in the sale or distribution of at least 15% of the total issued and outstanding common Equity Interests of Holdings or such parent company.

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

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

 

 

“ Release ” means disposing, discharging, injecting, spilling, leaking, leaching, dumping, emitting, escaping, seeping, or placing into the environment.

“ Rent and Charges Reserve ” means (a) with respect to the U.S. Borrowing Base, the aggregate of (i) all past due rent and other amounts owing by a U.S. Loan Party to any landlord, warehouseman, processor, repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any Eligible Inventory or could assert a Lien on any Eligible Inventory and (ii) a reserve equal to two months rent that could be payable to any such Person, unless it has executed a Lien Waiver and (b) with respect to the Canadian Borrowing Base, the aggregate of (i) all past due rent and other amounts owing by a Canadian Loan Party to any landlord, warehouseman, processor, repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any Eligible Inventory or could assert a Lien on any Eligible Inventory and (ii) a reserve equal to two months rent that could be payable to any such Person, unless it has executed a Lien Waiver.

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

“ Request for Credit Extension ” means (a) with respect to a Borrowing, conversion or continuation of Revolving Credit Loans, a Committed Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice.

“ Required Audit and Appraisal ” means the Agents’ Collateral due diligence review, including, without limitation, completion of the borrowing base field audit and the inventory appraisal in respect of the ABL Priority Collateral and the Canadian Collateral and completion of the review of the cash management and accounting systems, policies and procedures of the Specified U.S. Borrower and its Subsidiaries, with results reasonably satisfactory to the Agents.

“ Required Canadian Lenders ” means, as of any date of determination, Lenders holding more than 50% of the sum of the (a) Total Canadian Outstandings (with the aggregate amount of each Canadian Revolving Credit Lender’s risk participation and funded participation in Canadian L/C Obligations and Canadian Swing Line Loans being deemed “held” by such Appropriate Lender for purposes of this definition) and (b) aggregate unused Canadian Revolving Credit Commitments; provided that the unused Canadian Revolving Credit Commitment of, and the portion of the Total Canadian Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Canadian Lenders.

“ Required Lenders ” means, as of any date of determination, Lenders holding more than 50% of the sum of the (a) Total Outstandings (with the aggregate amount of each Revolving Credit Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed “held” by such Appropriate Lender for purposes of this definition) and (b) aggregate unused Revolving Credit Commitments; provided that the unused Revolving Credit Commitment of, and the portion of the Total

“ Required U.S. Lenders ” means, as of any date of determination, Lenders holding more than 50% of the sum of the (a) Total U.S. Outstandings (with the aggregate amount of each U.S. Revolving Credit Lender’s risk participation and funded participation in U.S. L/C Obligations and U.S. Swing Line Loans being deemed “held” by such Appropriate Lender for purposes of this definition) and (b) aggregate unused U.S. Revolving Credit Commitments; provided that the unused U.S. Revolving Credit Commitment of, and the portion of the Total U.S. Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required U.S. Lenders.

“ Responsible Officer ” means the chief executive officer, president, vice president, chief financial officer, treasurer, assistant treasurer or controller of a Loan Party.  Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

“ Restatement Effective Date ” means the Restatement Effective Date as such term is defined in the Amendment and Restatement Agreement.

“ Restricted Payment ” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of any Person or any of its Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to any Person’s stockholders, partners or members (or the equivalent of any thereof), or any option, warrant or other right to acquire any such dividend or other distribution or payment.

“ Restructuring Expenses ” means expenses and charges incurred in connection with restructuring within the Specified U.S. Borrower and/or one or more of its Subsidiaries, including in connection with integration of acquired businesses or Persons, disposition of one or more Subsidiaries or businesses, exiting of one or more lines of businesses and relocation or consolidation of facilities, including severance, lease termination and other non-ordinary-course, non-operating costs and expenses in connection therewith.

“ Revolving Credit Borrowing ” means a U.S. Revolving Credit Borrowing and/or a Canadian Revolving Credit Borrowing, as the context may require.

 

 

“ Revolving Credit Commitment ” means a U.S. Revolving Credit Commitment and/or a Canadian Revolving Credit Commitment, as the context may require.

“ Revolving Credit Facility ” means the U.S. Revolving Credit Facility and/or the Canadian Revolving Credit Facility, as the context may require.

“ Revolving Credit Lender ” means a U.S. Revolving Credit Lender and/or a Canadian Revolving Credit Lender, as the context may require.

“ Revolving Credit Loan ” means a U.S. Revolving Credit Loan and/or a Canadian Revolving Credit Loan, as the context may require.

“ Revolving Credit Note ” means a U.S. Revolving Credit Note and/or a Canadian Revolving Credit Note, as the context may require.

“ Royalties ” means all royalties, fees, expense reimbursement and other amounts payable by a Loan Party under a License.

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

“ Sale-Leaseback Documents ” shall mean the Deed of Lease Agreement, by and among GP (MULTI) L.P., a Delaware limited partnership as Landlord, and Ply Gem Industries, Inc., MWM Holding, Inc., Great Lakes Window, Inc., MWM Manufacturers Inc., Napco Window Systems, Inc., Kroy Building Products, Inc., Napco, Inc., Thermal-Gard, Inc., as Tenant, dated as of August 27, 2004 and the Lease Agreement by and between PG-NOM (ALBERTA) INC., an Alberta corporation, as nominee for PG-TRUST (DE), a trust formed under the laws of the State of Delaware, as Landlord and CWD Windows and Doors, Inc., as Tenant, dated as of August 27, 2004.

“ Sale-Leaseback Properties ” shall mean the owned real properties listed on Schedule 1.01(a) .

“ Sale-Leaseback Transaction ” shall mean the Sale and Leaseback of the Sale-Leaseback Properties pursuant to the Sale-Leaseback Documents.

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

“ Secured Cash Management Agreement ” means any Cash Management Agreement that is entered into by and between a Loan Party and any Cash Management Bank.

“ Secured Hedge Agreement ” means any Swap Contract permitted under Article VI or VII that is entered into by and between any Loan Party and any Hedge Bank.

 

 

“ Secured Parties ” means the U.S. Secured Parties and the Canadian Secured Parties.

“ Security Agreement ” means the U.S. Security Agreement and/or the Canadian Security Agreement, as the context may require.

“ Security Agreement Supplement ” means a supplement delivered in connection with any Security Agreement, in each case in form and substance reasonably satisfactory to the Administrative Agent.

“ Securities Account Control Agreements ” has the meaning specified in the U.S. Security Agreement and/or the Canadian Security Agreement, as the context may require.

“ Senior Secured Notes ” means the senior secured notes of the Specified U.S. Borrower in an aggregate principal amount of up to $700,000,000 issued and sold on the Closing Date pursuant to the Senior Secured Notes Documents and any exchange notes issued in exchange therefor, in each case, pursuant to the Senior Secured Notes Indenture.

“ Senior Secured Notes Documents ” means the Senior Secured Notes Indenture, the Purchase Agreement dated as of June 2, 2008 among the Specified U.S. Borrower, the Initial Purchasers (as defined therein) and the guarantors party thereto, the Senior Secured Notes and all other agreements, instruments and other documents pursuant to which the Senior Secured Notes have been or will be issued or otherwise setting forth the terms of the Senior Secured Notes.

“ Senior Secured Notes Indenture ” means the Indenture, dated as of the Closing Date, among the Specified U.S. Borrower, as “Issuer” and U.S. Bank National Association, as Trustee.

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

 

 

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

“ Sponsor ” means Caxton-Iseman Capital, Inc. and its Controlled Affiliates.

“ Statutory Reserves ” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board of Governors of the Federal Reserve System of the United States (the “ Board ”) and any other banking authority, domestic or foreign, to which Credit Suisse or any Lender (including any branch, Affiliate or other fronting office making or holding a Loan) is subject for Eurocurrency Liabilities (as defined in Regulation D of the Board).  Eurodollar Rate Loans shall be deemed to constitute Eurocurrency Liabilities (as defined in Regulation D of the Board) and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D. Statutory Reserves shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

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

“ Supermajority Lenders ” means, as of any date of determination, Lenders holding more than 66 2/3% of the sum of the (a) Total Outstandings (with the aggregate amount of each Revolving Credit Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed “held” by such Appropriate Lender for purposes of this definition) and (b) aggregate unused Revolving Credit Commitments; provided that the unused Revolving Credit Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

“ Supplemental Collateral Agent ” has the meaning specified in Section 9.05(a) .

“ Swap Contract ” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or

 

“ Swap Termination Value ” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include an Agent or a Lender or any Affiliate of an Agent or a Lender).

“ Swing Line Borrowing ” means a U.S. Swing Line Borrowing and/or a Canadian Swing Line Borrowing, as the context may require.

“ Swing Line Lender ” means the U.S. Swing Line Lender and/or the Canadian Swing Line Lender, as the context may require.

“ Swing Line Loan ” means a U.S. Swing Line Loan and/or a Canadian Swing Line Loan, as the context may require.

“ Swing Line Loan Notice ” means a notice of a Swing Line Borrowing pursuant to Section 2.04(A)(b) or 2.04(B)(b) , which, if in writing, shall be substantially in the form of Exhibit B .

“ Swing Line Sublimit ” means the U.S. Swing Line Sublimit and/or the Canadian Swing Line Sublimit, as the context may require.

“ Synthetic Debt ” means, with respect to any Person as of any date of determination thereof, all obligations of such Person in respect of transactions entered into by such Person that are intended to function primarily as a borrowing of funds (including any minority interest transactions that function primarily as a borrowing) but are not otherwise included in the definition of “ Indebtedness ” or as a liability on the consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP.

“ Synthetic Lease Obligation ” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property (including sale and leaseback transactions), in each case, creating obligations that do not appear on the balance sheet of such Person but which, upon the application of any Debtor Relief Laws to such Person, would be characterized as the indebtedness of such Person

 

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

“ Threshold Amount ” means $15,000,000.

“ Total Borrowing Base ” means the sum of the U.S. Borrowing Base and the Canadian Borrowing Base.

“ Total Canadian Outstandings ” means the aggregate Outstanding Amount of all Canadian Loans and all Canadian L/C Obligations.

“ Total Canadian Revolving Credit Outstandings ” means the aggregate Outstanding Amount of all Canadian Revolving Credit Loans, Canadian Swing Line Loans and Canadian L/C Obligations.

“ Total Revolving Credit Outstandings ” means the aggregate Outstanding Amount of all Revolving Credit Loans, Swing Line Loans and L/C Obligations.

“ Total Outstandings ” means the aggregate Outstanding Amount of all Loans and all L/C Obligations.

“ Total U.S. Outstandings ” means the aggregate Outstanding Amount of all U.S. Loans and all U.S. L/C Obligations.

“ Total U.S. Revolving Credit Outstandings ” means the aggregate Outstanding Amount of all U.S. Revolving Credit Loans, U.S. Swing Line Loans and U.S. L/C Obligations.

“ Transaction ” means, collectively, (a) the issuance and sale of the Senior Secured Notes, (b) the entering into and performance by the U.S. Loan Parties and their applicable Subsidiaries of the Loan Documents and the Senior Secured Notes Documents to which they are or are intended to be a party, (c) the refinancing of certain outstanding Indebtedness of the Specified U.S. Borrower and its Subsidiaries and the termination of all commitments with respect thereto and (d) the payment of the fees and expenses incurred in connection with the consummation of the foregoing.

“ Trustee ” means U.S. Bank National Association, in its capacity as trustee under the Senior Secured Notes Indenture.

“ Tuck-in Acquisitions ” means one or more acquisitions made pursuant to Section 7.02(h) with aggregate consideration for all such acquisitions not to exceed $15,000,000.

 

 

“ Type ” means, with respect to a Loan, its character as a Base Rate Loan, Canadian Base Rate Loan, Canadian Prime Rate Loan, BA Rate Loan or a Eurodollar Rate Loan.

“ UCC ” means the Uniform Commercial Code as in effect in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “ UCC ” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

“ 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.

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

“ Unreimbursed Amount ” has the meaning specified in Section 2.03(b) .

“ U.S. Borrowers ” means the Specified U.S. Borrower and each Domestic Subsidiary that becomes a “Guarantor” hereunder after the Closing Date.

“ U.S. Borrowing Base ” means, on any date of determination, an amount (calculated based on the most recent Borrowing Base Certificate delivered to the Agents in accordance with this Agreement) equal to

minus

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

 

“ U.S. Collateral ” means all of the “Collateral” and “Mortgaged Property” referred to in the U.S. Collateral Documents and all of the other property that is or is intended under the terms of the U.S. Collateral Documents to be subject to Liens in favor of the Collateral Agent for the benefit of the U.S. Secured Parties.

“ U.S. Collateral Documents ” means, collectively, the U.S. Security Agreement, the U.S. Intellectual Property Security Agreement, the U.S. Mortgages, the U.S. Account Control Agreements, each of the mortgages, collateral assignments, Security Agreement Supplements, IP Security Agreement Supplements, security agreements, pledge agreements or other similar agreements delivered to the Collateral Agent pursuant to Section 6.12 , and each of the other agreements, instruments or documents that creates or purports to create a Lien in favor of the Collateral Agent for the benefit of the U.S. Secured Parties.

“ U.S. Excess Availability ” means, at any time, the difference between (a) the lesser of (i) (A) the U.S. Revolving Credit Facility and (ii) the U.S. Borrowing Base at such time, as determined from the most recent Borrowing Base Certificate delivered by the Borrower Agent to the Agents pursuant to Section 6.01(e) hereof minus (b) the Total U.S. Revolving Credit Outstandings.

“ U.S. Guaranty ” means, collectively, the Guarantees made by the Specified U.S. Borrower and the U.S. Subsidiary Guarantors in favor of the U.S. Secured Parties, substantially in the form of Exhibit F , together with each other guaranty and guaranty supplement delivered pursuant to Section 6.12 .

“ U.S. Intellectual Property Security Agreement ” has the meaning specified in Section 4.01(a)(vii) .

“ U.S. L/C Advance ” means, with respect to each U.S. Revolving Credit Lender, such Lender’s funding of its participation in any U.S. L/C Borrowing in accordance with its Applicable Percentage.

“ U.S. L/C Borrowing ” means an extension of credit resulting from a drawing under any U.S. Letter of Credit which has not been reimbursed on the date when made or refinanced as a U.S. Revolving Credit Borrowing.

“ U.S. L/C Credit Extension ” means, with respect to any U.S. Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.

“ U.S. L/C Issuer ” means Credit Suisse in its capacity as issuer of U.S. Letters of Credit hereunder, or any successor issuer of U.S. Letters of Credit hereunder and, with respect to each Existing Letter of Credit, UBS AG, Stamford Branch, in its capacity as the issuer thereof.

 

 

“ U.S. L/C Obligations ” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding U.S. Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all U.S. L/C Borrowings.  For purposes of computing the amount available to be drawn under any U.S. Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06 .  For all purposes of this Agreement, if on any date of determination a U.S. Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

“ U.S. Lender ” means each financial institution listed on Schedule 2.01 as a “U.S. Revolving Credit Lender”, as well as any Person that becomes a “U.S. Revolving Credit Lender” hereunder pursuant to Section 2.16 or 10.06 and, as the context requires, includes the U.S. Swing Line Lender.

“ U.S. Letter of Credit ” means any standby letter of credit issued hereunder and shall include the Existing Letters of Credit.  A U.S. Letter of Credit may be a commercial letter of credit or a standby letter of credit.

“ U.S. Letter of Credit Sublimit ” means an amount equal to $13,500,000.  The U.S. Letter of Credit Sublimit is part of, and not in addition to, the U.S. Revolving Credit Facility.

“ U.S. Loan ” means an extension of credit by a Lender to the Specified U.S. Borrower under Article II in the form of a U.S. Revolving Credit Loan or a U.S. Swing Line Loan.

“ U.S. Loan Documents ” means, collectively, (a) this Agreement, (b) the U.S. Revolving Credit Notes, (c) the U.S. Guaranty, (d) the U.S. Collateral Documents, (e) the Intercreditor Agreement, (f) the Fee Letter and (g) each Issuer Document with respect to a U.S. Letter of Credit.

“ U.S. Loan Party ” means any Loan Party that is organized under the laws of one of the states of the United States of America and that is not a CFC.

“ U.S. Obligations ” means all advances to, and debts, liabilities, obligations, covenants and duties of, any U.S. Loan Party arising under any Loan Document or otherwise with respect to any U.S. Loan, U.S. Letter of Credit, U.S. Secured Cash Management Agreement or U.S. Secured Hedge Agreement, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any U.S. Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

“ U.S. Overadvance ” has the meaning specified in Section 2.01(f) .

 

 

“ U.S. Overadvance Loan ” means a U.S. Revolving Credit Loan made when an Overadvance exists or is caused by the funding thereof.

“ U.S. Payment Account ” means the account of the Collateral Agent to which all monies constituting proceeds of U.S. Collateral shall be transferred from time to time.

“ U.S. Revolving Credit Borrowing ” means a borrowing consisting of simultaneous U.S. Revolving Credit Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the U.S. Revolving Credit Lenders pursuant to Section 2.01(a) and shall be deemed to include any U.S. Overadvance Loan and U.S. Protective Advance made hereunder.

“ U.S. Revolving Credit Commitment ” means, as to each U.S. Revolving Credit Lender, its obligation to (a) make U.S. Revolving Credit Loans to the Specified U.S. Borrower pursuant to Section 2.01(a) , (b) purchase participations in U.S. L/C Obligations, and (c) purchase participations in U.S. Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “U.S. Revolving Credit Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement, including Section 2.16 ; provided , that at any time that that Total Canadian Revolving Credit Outstandings exceed 100% of the Canadian Revolving Credit Commitments, the U.S. Revolving Credit Commitments shall be temporarily reduced by the amount of such excess until such excess is reduced to zero.

“ U.S. Revolving Credit Exposure ” means, with respect to any U.S. Appropriate Lender at any time, the Outstanding Amount of such Lender’s U.S. Revolving Credit Loans plus such Lender’s Applicable Percentage of the Outstanding Amount of U.S. L/C Obligations with respect to U.S. Letters of Credit plus such Lender’s Applicable Percentage of the Outstanding Amount of U.S. Swing Line Loans.

“ U.S. Revolving Credit Facility ” means, at any time, the aggregate amount of the U.S. Revolving Credit Lenders’ U.S. Revolving Credit Commitments at such time.

“ U.S. Revolving Credit Lender ” means, at any time, any Lender that has a U.S. Revolving Credit Commitment at such time.

“ U.S. Revolving Credit Loan ” has the meaning specified in Section 2.01(a) and shall be deemed to include any U.S. Overadvance Loan and U.S. Protective Advance made hereunder.

“ U.S. Revolving Credit Note ” means a promissory note made by the Specified U.S. Borrower in favor of a U.S. Appropriate Lender evidencing U.S. Revolving Credit Loans or U.S. Swing Line Loans, as the case may be, made by such U.S. Revolving Credit Lender, substantially in the form of Exhibit C-1 .

 

 

“ U.S. Secured Cash Management Agreement ” means any Cash Management Agreement that is entered into by and between a U.S. Loan Party and any Cash Management Bank.

“ U.S. Secured Hedge Agreement ” means any Secured Hedge Agreement that is entered into by and between any U.S. Loan Party and any Hedge Bank.

“ U.S. Secured Parties ” means, collectively, the Administrative Agent, the Collateral Agent, the U.S. Revolving Credit Lenders, the U.S. L/C Issuer, the U.S. Hedge Banks, the U.S. Cash Management Banks, each co-agent or sub-agent appointed by any Agent from time to time pursuant to Section 9.05 , the Canadian Secured Parties and the other Persons the U.S. Obligations owing to which are or are purported to be secured by the U.S. Collateral under the terms of the Collateral Documents.

“ U.S. Security Agreement ” means the U.S. Security Agreement dated as of the Closing Date and attached as Exhibit G-1 (together with each other security agreement and security agreement supplement delivered pursuant to Section 6.12 in respect of the U.S. Collateral, in each case as amended).

“ U.S. Subsidiary Guarantor ” means each Domestic Subsidiary (other than the Specified U.S. Borrower and any Excluded Subsidiary) and each Person that shall, at any time after the date hereof, become a Domestic Subsidiary.

“ U.S. Swing Line Borrowing ” means a borrowing of a U.S. Swing Line Loan pursuant to Section 2.04 .

“ U.S. Swing Line Lender ” means Credit Suisse in its capacity as provider of U.S. Swing Line Loans, or any successor swing line lender hereunder.

“ U.S. Swing Line Loan ” has the meaning specified in Section 2.04(a) .

“ U.S. Swing Line Sublimit ” means an amount equal to the lesser of (a) $13,500,000 and (b) the U.S. Revolving Credit Facility.  The U.S. Swing Line Sublimit is part of, and not in addition to, the U.S. Revolving Credit Facility.

“ U.S. Unfunded Advances/Participations ” shall mean (a) with respect to the Administrative Agent, the aggregate amount, if any (i) made available to the U.S. Borrowers on the assumption that each U.S. Appropriate Lender has made its portion of the applicable Borrowing available to the Administrative Agent as contemplated by Section 2.12(b) and (ii) with respect to which a corresponding amount shall not in fact have been returned to the Administrative Agent by the U.S. Borrowers or made available to the Administrative Agent by any such U.S. Appropriate Lender, (b) with respect to the U.S. Swing Line Lender, the aggregate amount, if any, of participations in respect of any outstanding U.S. Swing Line Loan that shall not have been funded by the U.S. Revolving Credit Lenders in accordance with Section 2.04(c) and (c) with respect to any U.S. L/C Issuer, the aggregate amount, if any, of participations in respect of any outstanding U.S. L/C Borrowing that shall not have been funded by the U.S. Revolving Credit Lenders in accordance with Sections 2.03(c) .

 

 

“ Weighted Average Life to Maturity ” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:  (i) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by (ii) the then outstanding principal amount of such Indebtedness.

 

 

ARTICLE II

 

The Commitments and Credit Extensions

 

 

 

(h)   Protective Advances .  The Agents shall be authorized, in their discretion, at any time that any conditions in Section 4.02 are not satisfied, to make U.S. Revolving Credit Loans (any such U.S. Revolving Credit Loans made pursuant to this Section 2.01(h) , “ U.S. Protective Advances” ) or to cause to be made through CS Toronto as its sub-agent Canadian Revolving Credit Loans (any such Canadian Revolving Credit Loans made pursuant to this Section 2.01(h) , “ Canadian Protective Advances ” and, together with the U.S. Protective Advances, the “ Protective Advances ”) (a) up to an aggregate amount, when taken together with all U.S. Overadvances and all Canadian Overadvances, the lesser of (x) $10,000,000 and (y) 10% of the Total Borrowing Base outstanding at any time, if the Agents reasonably deem such Loans necessary or desirable to preserve or protect Collateral, or to enhance the collectibility or repayment of Obligations; or (b) to pay any other amounts chargeable to Loan Parties under any Loan Documents, including costs, fees and expenses.  Protective Advances shall constitute Obligations secured by the Collateral and shall be entitled to all of the benefits of the Loan Documents.  Immediately upon the making of a Protective Advance, each applicable Appropriate Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Administrative Agent a risk participation in such Protective Advance in an amount equal to the product of such applicable Revolving Credit Lender’s Applicable Percentage times the amount of such Protective Advance.  The Agents’ determination that funding of a Protective Advance is appropriate shall be conclusive.  In no event shall Protective Advances cause the aggregate Outstanding Amount of the Revolving Credit Loans of any Lender, plus such Lender’s Applicable

SECTION 2.02.   Borrowings, Conversions and Continuations of Loans.   (a)  Each Revolving Credit Borrowing, each conversion of Revolving Credit Loans from one Type to the other, and each continuation of Eurodollar Rate Loans or BA Rate Loans shall be made upon the applicable Borrower’s irrevocable notice to the Administrative Agent, which may be given by telephone.  Each such notice must be received by the Administrative Agent not later than 12:00 p.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans or BA Rate Loans or of any conversion of Eurodollar Rate Loans or BA Rate Loans to Base Rate Loans, Canadian Base Rate Loans or Canadian Prime Rate Loans, as the case may be, and (ii) one Business Day prior to the requested date of any Borrowing of Base Rate Loans, Canadian Base Rate Loans or Canadian Prime Rate Loans; provided , however , that if the applicable Borrower wishes to request Eurodollar Rate Loans or BA Rate Loans having an Interest Period other than 1, 2, 3 or 6 months in duration as provided in the definition of “Interest Period,” the applicable notice must be received by the Administrative Agent not later than 11:00 a.m. four Business Days prior to the requested date of such Borrowing, conversion or continuation, whereupon the Administrative Agent shall give prompt notice to the Appropriate Lenders of such request and determine whether the requested Interest Period is acceptable to all of them.  Not later than 11:00 a.m., three Business Days before the requested date of such Borrowing, conversion or continuation, the Administrative Agent shall notify the applicable Borrower (which notice may be by telephone) whether or not the requested Interest Period has been consented to by all the applicable Lenders.  Each telephonic notice by a Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of such Borrower.  Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans or BA Rate Loans shall be in a principal amount of $1,000,000 or Cdn. $1,000,000, as applicable, or a whole multiple of $200,000 or Cdn. $200,000, as applicable, in excess thereof.  Except as provided in Sections 2.03(a) and 2.04(c) , each Borrowing of or conversion to Base Rate Loans, Canadian Base Rate Loans or Canadian Prime Rate Loans shall be in a principal amount of $500,000 or Cdn. $500,000, as applicable, or a whole multiple of $100,000 or Cdn. $100,000, as applicable, in excess thereof.  Each Committed Loan Notice  (whether telephonic or written) shall specify (i) whether a Borrower is requesting a Revolving Credit Borrowing, a conversion of Revolving Credit Loans from one Type to the other, or a continuation of Eurodollar Rate Loans or BA Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Revolving Credit Loans are to be converted, (v) if applicable, the duration of the Interest Period with respect thereto and (vi) if applicable, the currency of the Borrowing, continuation or conversion.  If a Borrower fails to specify a Type of Loan in a Committed Loan Notice or if a Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Revolving Credit Loans shall be made as, or converted to, Base Rate Loans (in the case of U.S. Revolving Credit

 

(b)   Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each applicable Lender of the amount of its Applicable Percentage under the applicable Facility of the applicable Revolving Credit Loans, and if no timely notice of a conversion or continuation is provided by the applicable Borrower, the Administrative Agent shall notify each applicable Lender of the details of any automatic conversion to Base Rate Loans, Canadian Base Rate Loans or Canadian Prime Rate Loans, as applicable, described in Section 2.02(a) .  In the case of a Revolving Credit Borrowing, each Appropriate Lender shall make the amount of its Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 1:00 p.m. on the Business Day specified in the applicable Committed Loan Notice.  Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Borrowing is the initial Credit Extension, Section 4.01 ), the Administrative Agent shall make all funds so received available to the applicable Borrower by wire transfer of such funds in accordance with instructions provided (and reasonably acceptable) to the Administrative Agent by the applicable Borrower.

 

(c)   Any Eurodollar Rate Loan and a BA Rate Loan continued or converted other than on the last day of an Interest Period for such Eurodollar Rate Loan or BA Rate Loan and any continuation or conversion shall be subject to Section 3.05 .  During the existence of an Event of Default, (i) upon notice to the Borrower Agent from the Administrative Agent given at the request of the Required U.S. Lenders, no outstanding Loans to the U.S. Borrowers may be converted into, or continued as Eurodollar Rate Loans and (ii) upon notice to the Borrower Agent from the Administrative Agent given at the request of the Required Canadian Lenders, no outstanding Loans to the Canadian Borrowers may be converted into, or continued as Eurodollar Rate Loans or BA Rate Loans.

 

(d)   The Administrative Agent shall promptly notify the applicable Borrower and the applicable Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans and BA Rate Loans upon determination of such interest rate.  At any time that Base Rate Loans, Canadian Base Rate Loans or Canadian Prime Rate Loans are outstanding, the Administrative Agent shall notify the applicable Borrower and the applicable Lenders of any change in Credit Suisse’s or CS Toronto’s, as applicable, base rate or prime rate used in determining the Base Rate, Canadian Base Rate or

 

(e)   After giving effect to all Revolving Credit Borrowings, all conversions of Revolving Credit Loans from one Type to the other, and all continuations of Revolving Credit Loans as the same Type, there shall not be more than ten Interest Periods in effect in respect of the Revolving Credit Facility.

 

SECTION 2.03.   Letters of Credit  Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit.   (a)  (i)  Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the applicable Borrower delivered to the applicable L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of such Borrower.  Such Letter of Credit Application must be received by the applicable L/C Issuer and the Administrative Agent not later than 2:00 p.m. at least two Business Days (or such later date and time as the Administrative Agent and such L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be.  In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the applicable L/C Issuer:  (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount and currency thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the purpose and nature of the requested Letter of Credit; and (H) such other matters as the applicable L/C Issuer may reasonably require.  In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the applicable L/C Issuer (1) the Letter of Credit to be amended; (2) the proposed date of amendment thereof (which shall be a Business Day); (3) the nature of the proposed amendment; and (4) such other matters as the applicable L/C Issuer may require.  Additionally, the applicable Borrower shall furnish to the applicable L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as such L/C Issuer or the Administrative Agent may reasonably require.

 

(ii)   Promptly after receipt of any Letter of Credit Application, the applicable L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the applicable Borrower and, if not, such L/C Issuer will provide the Administrative Agent with a copy thereof.  Unless the applicable L/C Issuer has received written notice from any Appropriate Lender under the applicable Facility, the Administrative Agent or any Loan Party, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article IV shall not then be satisfied, then, subject to the terms and conditions hereof, such L/C Issuer shall, on the requested date, issue a

(iii)   If a Borrower so requests in any applicable Letter of Credit Application, the applicable L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “ Auto-Extension Letter of Credit ”); provided that any such Auto-Extension Letter of Credit must permit such L/C Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “ Non-Extension Notice Date ”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued.  Unless otherwise directed by the applicable L/C Issuer, a Borrower shall not be required to make a specific request to such L/C Issuer for any such extension.  Once an Auto-Extension Letter of Credit has been issued, the Revolving Credit Lenders under the applicable Facility shall be deemed to have authorized (but may not require) the applicable L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided , however , that such L/C Issuer shall not permit any such extension if (A) such L/C Issuer has determined that it would not be permitted, or would have no obligation at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of clause (ii) or (iii) of Section 2.03(a) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is seven Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required U.S. Lenders (in the case of the U.S. Letters of Credit) or the Required Canadian Lenders (in the case of Canadian Letters of Credit) have elected not to permit such extension or (2) from the Administrative Agent, any Appropriate Lender under the applicable Facility or a Borrower that one or more of the applicable conditions specified in Section 4.02 is not then satisfied,