TABLE OF CONTENTS

 

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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 Certain Defined Terms		1
Section 1.02 Computation of Time Periods; Other Definitional Provisions		35
Section 1.03 Accounting Terms		35
Section 1.04 Terms Generally		35
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
Section 2.01 The Advances		36
Section 2.02 Making the Advances		37
Section 2.03 Issuance of and Drawings and Reimbursement Under Non-rollup Letters of Credit		38
Section 2.04 Repayment of Advances		44
Section 2.05 Termination or Reduction of Commitments, Etc		45
Section 2.06 Prepayments		46
Section 2.07 Interest		48
Section 2.08 Fees		48
Section 2.09 Conversion of Advances		50
Section 2.10 Increased Costs, Etc		51
Section 2.11 Payments and Computations		52
Section 2.12 Taxes		53
Section 2.13 Sharing of Payments, Etc		55
Section 2.14 Use of Proceeds		55
Section 2.15 Defaulting Lenders		56
Section 2.16 Evidence of Debt		58
Section 2.17 Priority and Liens		58
Section 2.18 Payment of Obligations		59
Section 2.19 No Discharge: Survival of Claims		59
Section 2.20 Replacement of Certain Lenders		59
Section 2.21 Issuance of and Drawings and Reimbursement Under Rollup Letters of Credit		60
ARTICLE III
CONDITIONS TO EFFECTIVENESS
Section 3.01 Conditions Precedent to Effectiveness		66
Section 3.02 Conditions Precedent to Each Borrowing and Each Issuance of a Letter of Credit		70
Section 3.03 Conditions Precedent to the Term Borrowing		71

 

 

Section 3.04 Determinations Under Sections 3.01 and 3.03		71
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties of the Loan Parties		72
ARTICLE V
COVENANTS OF THE LOAN PARTIES
Section 5.01 Affirmative Covenants		76
Section 5.02 Negative Covenants		80
Section 5.03 Reporting Requirements		86
Section 5.04 Financial Covenants		89
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01 Events of Default		90
Section 6.02 Actions in Respect of the Letters of Credit upon Default		94
ARTICLE VII
THE AGENTS
Section 7.01 Appointment and Authorization of the Agents		94
Section 7.02 Administrative Agent Individually		94
Section 7.03 Duties of Administrative Agent; Exculpatory Provisions		95
Section 7.04 Reliance by Administrative Agent		96
Section 7.05 Delegation of Duties		96
Section 7.06 Resignation of Administrative Agent		97
Section 7.07 Non-Reliance on Administrative Agent and Other Lender Parties		98
Section 7.08 No other Duties, etc.		99
Section 7.09 Indemnification of Agents		99
Section 7.10 Administrative Agent May File Proofs of Claim		99
Section 7.11 Collateral and Guaranty Matters		100
ARTICLE VIII
SUBSIDIARY GUARANTY
Section 8.01 Subsidiary Guaranty		100
Section 8.02 Guaranty Absolute		101
Section 8.03 Waivers and Acknowledgments		102
Section 8.04 Subrogation		102

 

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Section 8.05 Additional Guarantors		103
Section 8.06 Continuing Guarantee; Assignments		103
Section 8.07 No Reliance		103
ARTICLE IX
SECURITY
Section 9.01 Grant of Security		104
Section 9.02 Further Assurances		108
Section 9.03 Rights of Lender; Limitations on Lenders’ Obligations		109
Section 9.04 Covenants of the Loan Parties with Respect to Collateral		109
Section 9.05 Performance by Agent of the Loan Parties’ Obligations		113
Section 9.06 The Administrative Agent’s Duties		114
Section 9.07 Remedies		114
Section 9.08 Modifications		116
Section 9.09 Release; Termination		117
ARTICLE X
MISCELLANEOUS
Section 10.01 Amendments, Etc.		118
Section 10.02 Notices, Posting of Approved Electronic Communications, Etc		119
Section 10.03 No Waiver; Remedies		121
Section 10.04 Costs, Fees and Expenses		121
Section 10.05 Right of Set-off		122
Section 10.06 Binding Effect		123
Section 10.07 Successors and Assigns		123
Section 10.08 Execution in Counterparts		126
Section 10.09 Confidentiality and Related Matters		126
Section 10.10 Treatment of Information		127
Section 10.11 Patriot Act Notice.		129
Section 10.12 Jurisdiction, Etc		129
Section 10.13 Governing Law		129
Section 10.14 Certain Matters Relating to Rollup Revolving Credit Commitments		129
Section 10.15 Waiver of Jury Trial		130

 

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SCHEDULES

 

Schedule I	-	Commitments and Applicable Lending Offices
Schedule II	-	Intellectual Property
Schedule III	-	Material IP Agreements
Schedule IV	-	Initial Pledged Equity
Schedule V	-	Initial Pledged Debt
Schedule VI	-	Designated Account Debtors
Schedule VII	-	Form of Invoices
Schedule VIII	-	Non-Filing Domestic Subsidiaries
Schedule 4.01(a)	-	Equity Investments; Subsidiaries
Schedule 4.01(b)	-	Loan Parties
Schedule 4.01(i)	-	Disclosures
Schedule 4.01(m)	-	Environmental Liabilities
Schedule 4.01(t)	-	Surviving Debt
Schedule 4.01(u)	-	Lien
Schedule 5.02(g)	-	Investments in Joint Ventures
Schedule 5.02(p)	-	Sale and Lease Backs

 

EXHIBITS

 

Exhibit A-1	-	Form of Term Note
Exhibit A-2	-	Form of Non-rollup Revolving Credit Note
Exhibit A-3	-	Form of Rollup Revolving Credit Note
Exhibit B	-	Form of Notice of Borrowing
Exhibit C	-	Form of Assignment and Acceptance
Exhibit D-1	-	Form of Opinion of Kirkland & Ellis LLP
Exhibit E	-	Interim Order
Exhibit F	-	Form of Borrowing Base Certificate
Exhibit G	-	Form of IP Security Agreement Supplement
Exhibit H	-	Form of Guaranty Supplement

 

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SENIOR SECURED SUPERPRIORITY
DEBTOR-IN-POSSESSION CREDIT AGREEMENT

 

SENIOR SECURED SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT AGREEMENT (this “ Agreement ”) dated as of March 18, 2009 among CHEMTURA CORPORATION, a Delaware corporation and a debtor and debtor-in-possession in a case pending under chapter 11 of the Bankruptcy Code (as hereinafter defined) (the “ Borrower ”), and each of the direct and indirect Subsidiaries of the Borrower signatory hereto (each, a “ Guarantor ”, and together with any person that becomes a Guarantor hereunder pursuant to Section 8.05, the “ Guarantors ”), each of which is a debtor and debtor-in-possession in a case pending under chapter 11 of the Bankruptcy Code, the Initial Lenders (as hereinafter defined) and the other banks, financial institutions and other institutional lenders party hereto (each, a “ Lender ”, and together with the Initial Lenders and any other person that becomes a Lender hereunder pursuant to Section 10.07, the “ Lenders ”), CITIBANK, N.A. (“ Citibank ”), as the initial issuing bank (in such capacity, the “ Initial Issuing Bank ”), Citibank, as administrative agent (or any successor appointed pursuant to Article VII, the “ Administrative Agent ”) for the Lender Parties and the other Secured Parties (each as hereinafter defined), ROYAL BANK OF SCOTLAND PLC (“ RBS ”), as syndication agent (the “ Syndication Agent ”) and CITIGROUP GLOBAL MARKETS INC., as sole lead arranger and sole bookrunner (the “ Lead Arranger ”).

 

PRELIMINARY STATEMENTS

 

(1)           On March 18, 2009 (the “ Petition Date ”), the Borrower and the Guarantors filed voluntary petitions in the United States Bankruptcy Court for the Southern District of New York (the “ Bankruptcy Court ”) for relief, and commenced proceedings (the “ Cases ”) under chapter 11 of the U.S. Bankruptcy Code (11 U.S.C. §§ 101 et seq. ; the “ Bankruptcy Code ”) and have continued in the possession of their assets and in the management of their businesses pursuant to sections 1107 and 1108 of the Bankruptcy Code.

 

(2)           The Borrower has requested that the Agents and the Lender Parties (each as hereinafter defined) enter into term, revolving credit and letter of credit facilities (collectively, the “ Facilities ”) in an aggregate principal amount not to exceed $400,000,000.  The Lender Parties have agreed to enter into the Facilities on the terms and conditions of this Agreement.

 

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

 

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

 

Section 1.01  Certain Defined Terms .  As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

 

“ Account Collateral ” has the meaning specified in Section 9.01(f).

 

“ Account Debtor ” means, with respect to any Account, the Person obligated on such Account.

 

“ Accounts ” has the meaning set forth in the UCC.

 

 

“ Activities ” has the meaning specified in Section 7.02(b).

 

“ Administrative Agent ” has the meaning specified in the recital of parties to this Agreement.

 

“ Administrative Agent’s Account ” means the account of the Administrative Agent maintained by the Administrative Agent with Citibank and identified to the Borrower and the Lender Parties from time to time.

 

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

 

“ Advance ” means a Term Advance, a Rollup Revolving Credit Advance, a Non-rollup Revolving Credit Advance, a Rollup Letter of Credit Advance or a Non-rollup Letter of Credit Advance.

 

“ Affected Lender ” has the meaning specified in Section 2.20.

 

“ Affiliate ” means, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person or is a director or officer of such Person.  For purposes of this definition, the term “control” (including the terms “controlling”, “controlled by” and “under common control with”) of a Person means the possession, direct or indirect, of the power to vote 10% or more of the Voting Stock of such Person or to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Stock, by contract or otherwise.

 

“ After-Acquired Intellectual Property ” has the meaning specified in Section 9.04(g)(v).

 

“ Agent’s Group ” has the meaning specified in Section 7.02(b).

 

“ Agents ” means the Administrative Agent and the Lead Arranger.

 

“ Agreement Value ” means, for each Hedge Agreement, on any date of determination, an amount determined by the Administrative Agent equal to:  (a) in the case of a Hedge Agreement documented pursuant to the Master Agreement (Multicurrency-Cross Border) published by the International Swap and Derivatives Association, Inc. (the “Master Agreement”), the amount, if any, that would be payable by any Loan Party or any of its Subsidiaries to its counterparty to such Hedge Agreement, as if (i) such Hedge Agreement were being terminated early on such date of determination, (ii) such Loan Party or Subsidiary were the sole “Affected Party,” and (iii) the Administrative Agent were the sole party determining such payment amount (with the Administrative Agent reasonably making such determination pursuant to the provisions of the form of Master Agreement); (b) in the case of a Hedge Agreement traded on an exchange, the mark-to-market value of such Hedge Agreement, which will be the unrealized loss on such Hedge Agreement to the Loan Party or Subsidiary of a Loan Party party to such Hedge Agreement reasonably determined by the Administrative Agent based on the settlement price of such Hedge Agreement on such date of determination; or (c) in all other cases, the mark-to-market value of such Hedge Agreement, which will be the unrealized loss on such Hedge Agreement to the Loan Party or Subsidiary of a Loan Party party to such Hedge Agreement reasonably determined by the Administrative Agent as the amount, if any, by which (i) the present value of the future cash flows to be paid by such Loan Party or Subsidiary exceeds (ii) the present value of the future cash flows to be received by such Loan Party or Subsidiary pursuant to such Hedge Agreement;

 

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capitalized terms used and not otherwise defined in this definition or this Agreement shall have the respective meanings set forth in the above described Master Agreement or any other document governing such Hedge Agreement.

 

“ Applicable Lending Office ” means, with respect to each Lender Party, such Lender Party’s Domestic Lending Office in the case of a Base Rate Advance and such Lender Party’s Eurodollar Lending Office in the case of a Eurodollar Rate Advance.

 

“ Applicable Margin ” means (a) in respect of the Term Facility, 7.5% per annum, in the case of Eurodollar Advances, and 6.5% per annum, in the case of Base Rate Advances, (b) in respect of the Non-rollup Revolving Credit Facility, 7.5% per annum, in the case of Eurodollar Rate Advances, and 6.5% per annum, in the case of Base Rate Advances and (c) in respect of the Rollup Revolving Credit Facility, 3.5% per annum, in the case of Eurodollar Rate Advances, and 2.5% per annum, in the case of Base Rate Advances; provided that during any Specified Interest Accrual Period, the Applicable Margin stated herein for each Facility shall be increased by 2.5% per annum.

 

“ Appropriate Lender ” means, at any time, with respect to (a) the Non-rollup Revolving Credit Facility, the Rollup Revolving Credit Facility or the Term Facility, a Lender that has a Commitment or Advances outstanding, in each case with respect to or under such Facility at such time, and (b) the Letter of Credit Sublimit, (i) any Issuing Bank, (ii) if the Non-rollup Revolving Credit Lenders have made Non-rollup Letter of Credit Advances pursuant to Section 2.03(c) that are outstanding at such time, each such Non-rollup Revolving Credit Lender and (iii) if the Rollup Revolving Credit Lenders have made Rollup Letter of Credit Advances pursuant to Section 2.21(c) that are outstanding at such time, each such Rollup Revolving Credit Lender.

 

“ Approved Electronic Communications ” means each Communication that any Loan Party is obligated to, or otherwise chooses to, provide to the Administrative Agent pursuant to any Loan Document or the transactions contemplated therein, including any financial statement, financial and other report, notice, request, certificate and other information material; provided, however, that, solely with respect to delivery of any such Communication by any Loan Party to the Administrative Agent and without limiting or otherwise affecting either the Administrative Agent’s right to effect delivery of such Communication by posting such Communication to the Approved Electronic Platform or the protections afforded hereby to the Administrative Agent in connection with any such posting, “Approved Electronic Communication” shall exclude (i) any Notice of Borrowing, Letter of Credit Application, notice of Conversion or continuation, and any other notice, demand, communication, information, document and other material relating to a request for a new, or a conversion of an existing, Borrowing, (ii) any notice pursuant to Section 2.06 and any other notice relating to the payment of any principal or other amount due under any Loan Document prior to the scheduled date therefor, (iii) all notices of any Default or Event of Default and (iv) any notice, demand, communication, information, document and other material required to be delivered to satisfy any of the conditions set forth in Article III or any other condition to any Borrowing or other extension of credit hereunder or any condition precedent to the effectiveness of this Agreement.

 

“ Approved Electronic Platform ” has the meaning specified in Section 10.02(d).

 

“ 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.

 

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“ Assignment and Acceptance ” means an assignment and acceptance entered into by a Lender Party and an Eligible Assignee, and accepted by the Administrative Agent, in accordance with Section 10.07 and in substantially the form of Exhibit C hereto.

 

“ Available Amount ” of any Letter of Credit means, at any time, the maximum amount available to be drawn under such Letter of Credit at such time (assuming compliance at such time with all conditions to drawing).

 

“ Availability ” means, at any time, (a) the lesser of (i) the Borrowing Base at such time (based on the most recent Borrowing Base Certificate), and (ii) the aggregate Commitments at such time minus (b) the sum of (i) the Advances outstanding at such time plus (ii) the aggregate Available Amount of all Letters of Credit outstanding at such time.  Availability at any time shall be determined by reference to the most recent Borrowing Base Certificate delivered to the Administrative Agent pursuant to Section 5.03(p).

 

“ Bank Product Reserves ” means all reserves which the Administrative Agent from time to time establishes in its reasonable judgment for the Obligations under the Secured Cash Management Agreements and the Secured Hedge Agreements then outstanding.

 

“ Bankruptcy Code ” has the meaning specified in the Preliminary Statements.

 

“ Bankruptcy Court ” has the meaning specified in the Preliminary Statements and means the United States District Court for the Southern District of New York when such court is exercising direct jurisdiction over the Cases.

 

“ Base Rate ” means the higher of (a) 4% per annum and (b) a fluctuating interest rate per annum in effect from time to time, which rate per annum shall at all times be equal to the higher of (i) the rate of interest announced publicly by Citibank in New York, New York, from time to time, as Citibank’s base rate and (ii) ½ of 1% per annum above the Federal Funds Rate.

 

“ BBA LIBOR ” has the meaning specified in the definition of “Eurodollar Rate”.

 

“ Borrower ” has the meaning specified in the recital of parties to this Agreement.

 

“ Borrower’s Account ” means the account of the Borrower maintained by the Borrower and specified in writing to the Administrative Agent from time to time.

 

“ Borrowing ” means a borrowing consisting of simultaneous Advances of the same Type made by the Appropriate Lenders.

 

“ Borrowing Base ” means:

 

(a) prior to the Final Term Advance Date, $190,000,000; and

 

(b) on or after the Final Term Advance Date, (i) 80% of the value of Eligible Receivables, plus (ii) the lesser of (A) 85% of the Net Orderly Liquidation Value Percentage of Eligible Inventory and (B) 75% of the cost of Eligible Inventory, plus (iii) $125,000,000, minus (iv) Reserves.

 

“ Borrowing Base Certificate ” means a certificate in substantially the form of Exhibit F hereto (with such changes therein as may be required in accordance with the terms of this

 

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Agreement by the Administrative Agent or the Initial Lenders to reflect the components of, and reserves against, the Borrowing Base as provided for hereunder from time to time), executed and certified as accurate and complete by a Responsible Officer of the Borrower or by the controller of the Borrower, which shall include detailed calculations as to the Borrowing Base as reasonably requested by the Administrative Agent or the Initial Lenders.

 

“ Budget Variance Report ” means a report, in each case certified by a Responsible Officer of the Borrower, in form reasonably satisfactory to the Initial Lenders, delivered in accordance with Section 5.03(e), showing actual cash flows and the aggregate maximum amount of utilization of the Commitments for each such week as of the end of the week immediately preceding the week during which such Budget Variance Report is delivered and the variance (as a percentage) of such amounts from the corresponding anticipated amounts therefor set forth in the DIP Budget.

 

“ Business Day ” means a day of the year on which banks are not required or authorized by law to close in New York City and, if the applicable Business Day relates to any Eurodollar Rate Advances, on which dealings are carried on in the London interbank market.

 

“ Capital Expenditures ” means, for any Person for any period, the sum (without duplication) of all expenditures made, directly or indirectly, by such Person or any of its Subsidiaries during such period for equipment, fixed assets, real property or improvements, or for replacements or substitutions therefor or additions thereto, that have been or should be, in accordance with GAAP, reflected as additions to property, plant or equipment on a Consolidated balance sheet of such Person.  For purposes of this definition, the purchase price of equipment that is purchased simultaneously with the trade in of existing equipment or with insurance proceeds shall be included in Capital Expenditures only to the extent of the gross amount of such purchase price less the credit granted by the seller of such equipment for the equipment being traded in at such time or the amount of such proceeds, as the case may be.

 

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

 

“ Carve-Out ” means (i) all fees required to be paid to the Clerk of the Bankruptcy Court and to the Office of the United States Trustee under Section 1930(a) of title 28 of the United States Code, (ii) Professional Fees that are incurred prior to an Event of Default, and invoiced and payable under sections 330 and 331 of the Bankruptcy Code, whether prior to or after an Event of Default (the “ Pre-Trigger Pipeline Claims ”) (but only to the extent that such fees are payable pursuant to an order of the Bankruptcy Court), and (iii) without duplication of the amounts described in clause (ii) above, Professional Fees in an aggregate amount not to exceed $8,000,000 (the “ Carve-Out Cap ”) incurred after the occurrence and during the continuance of an Event of Default (but only to the extent such fees are payable pursuant to an order of the Bankruptcy Court); provided , however (to the extent allowed by the Bankruptcy Court), that the Borrower and each Guarantor shall be permitted to pay the Pre-Trigger Pipeline Claims, and the Carve-Out Cap shall not be reduced by the amount of any compensation and reimbursement of expenses incurred prior to the occurrence of an Event of Default (to the extent allowed by the Bankruptcy Court), whether paid prior to or after an Event of Default, or any fees, expenses, indemnities or other amounts paid to the Administrative Agent or the Lenders and their respective attorneys and agents under this Agreement or otherwise; and provided further that nothing herein shall be construed to impair the ability of any party to object to any of the fees, expenses, reimbursement or compensation described above in accordance with the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, The Local Bankruptcy Rules for the Southern District of New York,

 

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Guidelines for Reviewing Applications for Compensation & Reimbursement of Expenses Filed Under 11 U.S.C. Section 330, and any applicable order of the Bankruptcy Court.

 

“ Cases ” has the meaning specified in the Preliminary Statements.

 

“ Cash Collateralize ” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the Issuing Banks and the Non-rollup Revolving Credit Lenders or Rollup Revolving Credit Lenders, as applicable, as collateral for the L/C Obligations, cash or deposit account balances in an amount not less than 105% of the face amount of such L/C Obligations, pursuant to customary documentation in form and substance reasonably satisfactory to the Administrative Agent and the Issuing Banks.  Derivatives of such term have corresponding meanings.

 

“ Cash Equivalents ” means any of the following, to the extent having a maturity of not greater than 12 months from the date of issuance thereof:  (a) readily marketable direct obligations of the Government of the United States or any agency or instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of the Government of the United States, (b) certificates of deposit of or time deposits with any commercial bank that is a Lender Party or a member of the Federal Reserve System that issues (or the parent of which issues) commercial paper rated as described in clause (c), is organized under the laws of the United States or any state thereof and has combined capital and surplus of at least $1,000,000,000, (c) commercial paper in an aggregate amount of no more than $25,000 per issuer outstanding at any time, issued by any corporation organized under the laws of any state of the United States and rated at least “Prime-1” (or the then equivalent grade) by Moody’s or “A-1” (or the then equivalent grade) by S&P, and (d) Investments, classified in accordance with GAAP, as current assets of the Borrower or any of its Subsidiaries, in money market investment programs registered under the Investment Company Act of 1940, as amended, which are administered by financial institutions that have the highest rating obtainable from either Moody’s or S&P and which are approved by the Bankruptcy Court.

 

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

 

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

 

“ CFC ” means an entity that is a controlled foreign corporation of the Borrower under Section 957 of the Internal Revenue Code.

 

“ Change of Control ” means and shall be deemed to have occurred upon the occurrence of any of the following events:  (i) any Person or two or more Persons acting in concert shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of Voting Stock of the Borrower (or other securities convertible into such Voting Stock) representing 35% or more of the combined voting power of all Voting Stock of the Borrower; or (ii) after the date of this Agreement, individuals who as of the date of this Agreement were directors of the Borrower, together with each individual on the board of directors of the Borrower who was either (x) elected or appointed by a majority of those members of the board of directors of the Borrower who were members at the time of such election or appointment or (y) nominated for election or appointment

 

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by a majority of those members of the board of directors of the Borrower who were members at the time of such nomination, shall cease for any reason to constitute a majority of the board of directors of the Borrower.

 

“ Citibank ” has the meaning specified in the recital of parties to this Agreement.

 

“ Collateral ” means all “Collateral” referred to in the Collateral Documents and all other property of the Loan Parties that is or is purported to be subject to any Lien in favor of the Administrative Agent for the benefit of the Secured Parties.

 

“ Collateral Access Agreement ” means any landlord waiver, mortgagee waiver, bailee letter, or any similar acknowledgment or agreement of any warehouseman or processor that owns or is in possession of property where any Inventory is stored or located, pursuant to which a Person shall waive or subordinate its rights and claims as landlord, mortgagee, bailee, warehouseman or processor in any Inventory of a Loan Party and grant access to the Administrative Agent for the repossession and sale of such Inventory, in each case in form and substance reasonably satisfactory to the Agent.

 

“ Collateral Documents ” means, collectively, the provisions of Article IX of this Agreement, the Intellectual Property Security Agreement, the Mortgages and any other agreement that creates or purports to create a Lien in favor of the Administrative Agent for the benefit of the Secured Parties.

 

“ Commitment ” means a Term Commitment, a Rollup Revolving Credit Commitment, a Non-rollup Revolving Credit Commitment or a Letter of Credit Commitment.

 

“ Committee ” means the unsecured creditors’ committee appointed in the Cases.

 

“ Communications ” means each notice, demand, communication, information, document and other material provided for hereunder or under any other Loan Document or otherwise transmitted between the parties hereto relating this Agreement, the other Loan Documents, any Loan Party or its Affiliates, or the transactions contemplated by this Agreement or the other Loan Documents including, without limitation, all Approved Electronic Communications.

 

“ Computer Software ” has the meaning specified in Section 9.01(g)(iv).

 

“ Consolidated ” refers to the consolidation of accounts in accordance with GAAP.

 

“ Contract ” means an agreement between any Loan Party and an Account Debtor in any written form acceptable to such Loan Party, or in the case of any open account agreement as evidenced by one of the forms of invoices set forth in Schedule VII hereto or otherwise approved by the Administrative Agent from time to time (which approval shall not be unreasonably withheld), pursuant to or under which such Account Debtor shall be obligated to pay for goods or services from time to time.

 

“ 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 ownership of voting securities, by contract or otherwise, and the terms “ Controlling ” and “ Controlled ” shall have meanings correlative thereto.

 

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“ Conversion ”, “ Convert ” and “ Converted ” each refers to the conversion of Advances from one Type to Advances of the other Type.

 

“ Copyrights ” has the meaning specified in Section 9.01(g)(iii).

 

“ Debt ” of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all Obligations of such Person for the deferred purchase price of property or services (other than trade payables not overdue by more than 90 days incurred in the ordinary course of such Person’s business), (c) all Obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all Obligations of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (e) all Obligations of such Person as lessee under Capitalized Leases, (f) all Obligations of such Person under acceptance, letter of credit or similar facilities, (g) all Obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interests in such Person or any other Person or any warrants, rights or options to acquire such Equity Interests, valued, in the case of Redeemable Preferred Interests, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, (h) all Obligations of such Person in respect of Hedge Agreements, valued at the Agreement Value thereof, (i) all Guarantee Obligations and Synthetic Debt of such Person and (j) all indebtedness and other payment Obligations referred to in clauses (a) through (i) above of another Person secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness or other payment Obligations.

 

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

 

“ Default ” means any Event of Default or any event that would constitute an Event of Default but for the requirement that notice be given or time elapse or both.

 

“ Defaulted Advance ” means, with respect to any Lender at any time, the portion of any Advance required to be made by such Lender to the Borrower pursuant to Section 2.01, 2.02, 2.03 or 2.21 at or prior to such time which has not been made by such Lender or by the Administrative Agent for the account of such Lender pursuant to Section 2.02(e) as of such time.  In the event that a portion of a Defaulted Advance shall be deemed made pursuant to Section 2.15(a), the remaining portion of such Defaulted Advance shall be considered a Defaulted Advance originally required to be made pursuant to Section 2.01 on the same date as the Defaulted Advance so deemed made in part.

 

“ Defaulted Amount ” means, with respect to any Lender Party at any time, any amount required to be paid by such Lender Party to the Administrative Agent or any other Lender Party hereunder or under any other Loan Document at or prior to such time which has not been so paid as of such time, including, without limitation, any amount required to be paid by such Lender Party to (a) any Issuing Bank pursuant to Section 2.03(d) to purchase a portion of a Non-rollup Letter of Credit Advance made by such Issuing Bank, (b) the Administrative Agent pursuant to

 

8

 

Section 2.02(e) to reimburse the Administrative Agent for the amount of any Advance made by the Administrative Agent for the account of such Lender Party, (c) any other Lender Party pursuant to Section 2.13 to purchase any participation in Advances owing to such other Lender Party, (d) the Administrative Agent or any Issuing Bank pursuant to Section 7.07 to reimburse the Administrative Agent or such Issuing Bank for such Lender Party’s ratable share of any amount required to be paid by the Lender Parties to the Administrative Agent or such Issuing Bank as provided therein and (e) any Issuing Bank pursuant to Section 2.21(d) to purchase a portion of a Rollup Letter of Credit Advance made by such Issuing Bank.  In the event that a portion of a Defaulted Amount shall be deemed paid pursuant to Section 2.15(b), the remaining portion of such Defaulted Amount shall be considered a Defaulted Amount originally required to be paid hereunder or under any other Loan Document on the same date as the Defaulted Amount so deemed paid in part.

 

“ Defaulting Lender ” means, at any time, a Lender Party as to which the Administrative Agent has notified the Borrower that (a) such Lender Party has failed for two or more Business Days to comply with its obligations under this Agreement to make an Advance or make a payment to an Issuing Bank in respect of an Unreimbursed mount (each a “ funding obligation ”), (b) such Lender Party has notified the Administrative Agent, or has stated publicly, that it will not comply with any such funding obligation hereunder, or has defaulted on its funding obligations under any other loan agreement or credit agreement or other similar/other financing agreement, (c) such Lender Party has, for two or more Business Days, failed to confirm in writing to the Administrative Agent, in response to a written request of the Administrative Agent, that it will comply with its funding obligations hereunder, or (d) a Lender Insolvency Event has occurred and is continuing with respect to such Lender Party.  Any determination that a Lender Party is a Defaulting Lender under any of clauses (a) through (d) above (to the extent such a determination is contemplated in the preceding sentence in order for the relevant Lender Party to be considered a Defaulting Lender pursuant to such clause) will be made by the Administrative Agent in its sole discretion acting in good faith.

 

“ Designated Litigation Liabilities ” means all criminal and civil judgments rendered against, and all civil and criminal settlements entered into by, the Borrower and any of its Subsidiaries in connection with the antitrust investigations and related matters described under the heading “Antitrust Investigation and Related Matters” set forth in the Borrower’s Form 10-K filed with the SEC in respect of the Borrower’s fiscal year ended December 31, 2008 and all costs and expenses related thereto. A

 

“ DIP Budget ” means, at any time, collectively (a) the forecast delivered pursuant to Section 3.01(a)(ix) detailing the Borrower’s anticipated weekly cash receipts and disbursements and anticipated weekly cash flow projections, on a Consolidated basis for the Borrower and its Subsidiaries, and setting forth the anticipated aggregate maximum amount of utilization of the Commitments for each such week, together with a written set of assumptions supporting such projections, for the thirteen week period commencing with the week in which the Petition Date occurs and (b) the most recent supplement to such forecast, and all intervening supplements to such forecast, delivered in accordance with Section 5.03(f).

 

“ DIP Financing Orders ” means the Interim Order and the Final Order.

 

“ Domestic Lending Office ” means, with respect to any Lender Party, the office of such Lender Party specified as its “Domestic Lending Office” opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender Party, as the case

 

9

 

may be, or such other office of such Lender Party as such Lender Party may from time to time specify to the Borrower and the Administrative Agent.

 

“ EBITDA ” means, for any Person for any period, (a) net income (or net loss) plus (b) without duplication, to the extent included in the calculation of net income of such Person for such period in accordance with GAAP, the sum of (i) Interest Expense, (ii) income tax expense, (iii) depreciation expense, (iv) amortization expense, (v) non-cash charges related to restructuring, asset impairment or other extraordinary items and costs and expenses and legal and other advisor fees and expenses incurred in connection with the Cases and any related plan of reorganization, and fees and expenses incurred in connection with European Receivables Financing, (vi) charges for legal and other expenses in connection with Designated Litigation Liabilities in an aggregate amount not to exceed $40,000,000, (vii) the amount of all Designated Litigation Liabilities incurred for such period in excess of $1,000,000 in the aggregate to the extent that the same were deducted in arriving at net income (or net loss) for such period, (viii) any losses from sales of assets other than in the ordinary course of business, (ix) the amount of all fees, expenses and premiums incurred in connection with obtaining and attempting to obtain debtor-in-possession financing and receivables financing expense, including but not limited to fees, expenses and premiums incurred in connection with the execution and delivery of this Agreement and (x) non-cash expenses in respect of employees’ compensation payable in Equity Interests, minus (c) without duplication, (i) cash payments for non-cash restructuring charges reserved in a prior period to the extent a charge or expense for such payments was included in EBITDA for a prior period pursuant to clause (b) above and (ii) to the extent included in the calculation of net income of such Person for such period in accordance with GAAP, any gains from sales of assets other than in the ordinary course of business and any other extraordinary gains.  For the purposes of calculating EBITDA for any period, if during such period the Borrower or any of its Subsidiaries shall have made an acquisition, EBITDA for such period shall be calculated after giving pro forma effect thereto as if such acquisition occurred on the first day of such period.

 

“ Effective Date ” means the date on which this Agreement became effective pursuant to Section 3.01.

 

“ Eligible Assignee ” means with respect to any Facility (other than the Letter of Credit Facility), (i) a Lender Party; (ii) an Affiliate of a Lender Party; (iii) an Approved Fund; and (iv) any other Person (other than an individual) approved by (x) the Administrative Agent and (y) in the case of an assignment of a Non-rollup Revolving Credit Commitment, each Issuing Bank; provided , however , that neither any Loan Party nor any Affiliate of a Loan Party shall qualify as an Eligible Assignee under this definition.

 

“ Eligible Inventory ” means, at the time of any determination thereof, without duplication, the Inventory Value of the Loan Parties at such time that is not ineligible for inclusion in the calculation of the Borrowing Base pursuant to any of clauses (a) through (m) below.  No Inventory shall be deemed Eligible Inventory if, without duplication:

 

(a)           a Loan Party does not have good, valid and unencumbered title thereto, subject only to Liens granted to the Administrative Agent for the benefit of the Secured Parties under the Loan Documents and Permitted Liens; or

 

(b)           it is not located in the United States; or

 

10

 

(c)           it is either (i) not located on property owned by a Loan Party or (ii) located at a third party processor or (except in the case of consigned Inventory, which is covered by clause (f) below) in another location not owned by a Loan Party (it being understood that the Borrower will provide its best estimate of the value of such Inventory to be agreed to by the Administrative Agent and reflected in the Borrowing Base Certificate), and either (A) is not covered by a Collateral Access Agreement, (B) a Rent Reserve has not been taken with respect to such Inventory or, in the case of any third party processor, a Reserve has not been taken by the Administrative Agent in the exercise of its reasonable discretion or (C) is not subject to an enforceable agreement in form and substance reasonably satisfactory to the Administrative Agent pursuant to which the relevant Loan Party has validly assigned its access rights to such Inventory and property to the Administrative Agent; or

 

(d)           it is operating supplies, labels, packaging or shipping materials, cartons, repair parts, labels or miscellaneous spare parts, nonproductive stores inventory and other such materials, in each case not considered used for sale in the ordinary course of business of the Loan Parties by the Administrative Agent in its reasonable discretion from time to time; or

 

(e)           it is not subject to a valid and perfected first priority Lien in favor of the Administrative Agent subject only to Permitted Liens; or

 

(f)            it has been sold or is consigned at a customer, supplier or contractor location but still accounted for in the Loan Party’s inventory balance; or

 

(g)           it is in transit (unless it is in transit from one location within the United States of a Loan Party to another location of a Loan Party within the United States and as to which a Reserve has been taken by the Administrative Agent in the exercise of its reasonable discretion); or

 

(h)           it is obsolete, slow-moving, nonconforming or unmerchantable or is identified as a write-off, overstock or excess by a Loan Party, or does not otherwise conform to the representations and warranties contained in this Agreement and the other Loan Documents applicable to Inventory; or

 

(i)            it is Inventory used as a sample or prototype, display or display item; or

 

(j)            and to the extent any portion of Inventory Value thereof is attributable to intercompany profit among Loan Parties or their Affiliates; or

 

(k)           it is damaged, defective or marked for return to vendor, has been deemed by a Loan Party to require rework or is being held for quality control purposes; or

 

(l)            it does not meet all material applicable standards imposed by any Governmental Authority having regulatory authority over it; or

 

(m)          as to which the Administrative Agent shall not have completed its due diligence investigation in scope, and with results, satisfactory to the Administrative Agent.

 

“ Eligible Receivables ” means, at the time of any determination thereof, each Account that satisfies the following criteria: such Account (i) has been invoiced to, and represents the bona

 

11

 

fide amounts due to a Loan Party from, the purchaser of goods or services, in each case originated in the ordinary course of business of such Loan Party and (ii) is not ineligible for inclusion in the calculation of the Borrowing Base pursuant to any of clauses (a) through (v) below.  In determining the amount to be so included, the face amount of an Account shall be reduced by, without duplication, to the extent not reflected in such face amount, (A) the amount of all accrued and actual discounts, claims, credits or credits pending, promotional program allowances, price adjustments, finance charges or other allowances (including any amount that a Loan Party may be obligated to rebate to a customer pursuant to the terms of any written agreement or understanding), (B) the aggregate amount of all limits and deductions provided for in this definition and elsewhere in this Agreement, if any, and (C) the aggregate amount of all cash received in respect of such Account but not yet applied by a Loan Party to reduce the amount of such Account.  No Account shall be an Eligible Receivable if, without duplication:

 

(a)   any representation or warranty contained in this Agreement or any other Loan Document with respect to such specific Account is not true and correct with respect to such Account; or

 

(b)   the Account Debtor on such Account has disputed liability or made any claim with respect to such Account or any other Account due from such Account Debtor to any Loan Party but only to the extent of such dispute or claim; or

 

(c)   the Account Debtor in respect of such Account or any of its Affiliates is also a supplier to any Loan Party; provided that such Account shall be ineligible pursuant to this clause (c) only to the extent of an amount equal to the aggregate amount of accounts payable or other indebtedness owing by the Loan Parties to such Account Debtor or any of its Affiliates as at such date, unless the Account Debtor has executed a satisfactory no-offset letter; or

 

(d)   the transaction represented by such Account is to an Account Debtor which, if a natural person, is not a resident of the United States or, if not a natural person, is organized under the laws of a jurisdiction outside the United States or has its chief executive office outside the United States, unless (i) such Account is backed by a letter of credit in customary and reasonable form from an issuer reasonably deemed creditworthy by the Administrative Agent, which letter of credit is reasonably acceptable to the Administrative Agent in its reasonable discretion and such letter of credit names the Administrative Agent as the beneficiary or the issuer of such letter of credit has consented to the assignment of the proceeds thereof to the Administrative Agent, (ii) such Account Debtor is, if a natural person, a resident of Canada or the United Kingdom or, if not a natural person, is organized under the laws of the United Kingdom, Canada or a province of Canada and has its chief executive office in the United Kingdom or Canada, as applicable, and such Account is denominated in U.S. Dollars, (iii) such Account Debtor is listed on Schedule VI or (iv) such Account is backed by insurance reasonably acceptable to the Administrative Agent and the relevant insurance policy names the Administrative Agent as additional insured and loss payee; provided that if the Account Debtor is located in a jurisdiction outside the United States, the United Kingdom or Canada, this clause (d) shall not apply with respect to Accounts to the extent that such Accounts are denominated in U.S. Dollars and arise from sales of inventory shipped from the United States and the face amount thereof does not exceed 10% of the face amount of all Eligible Receivables; or

 

12

 

(e)   the sale to the Account Debtor on such Account is on a bill-and-hold, guaranteed sale, sale-and-return, sale-on-approval or consignment basis; or

 

(f)    such Account is not subject to a valid and perfected first priority Lien in favor of the Administrative Agent for the benefit of the Secured Parties; or

 

(g)   such Account is subject to any deduction, offset, counterclaim, return privilege or other conditions; or

 

(h)   the Account Debtor on such Account is located in any State of the United States requiring the holder of such Account, as a precondition to commencing or maintaining any action in the courts of such State either to (i) receive a certificate of authorization to do business in such State or be in good standing in such State or (ii) file a Notice of Business Activities Report with the appropriate office or agency of such State, in each case unless the holder of such Account has received such a certificate of authority to do business, is in good standing or, as the case may be, has duly filed such a notice in such State; or

 

(i)    the Account Debtor on such Account is a Governmental Authority, unless the applicable Loan Party has assigned its rights to payment of such Account to the Administrative Agent pursuant to the Assignment of Claims Act of 1940, as amended, in the case of a federal Governmental Authority, and pursuant to applicable law, if any, in the case of any other Governmental Authority, and such assignment has been accepted and acknowledged by the appropriate government officers; or

 

(j)    50% or more of the face amount of the Accounts of the Account Debtor are not, or are determined by the Administrative Agent not to be, Eligible Receivables as a result of the provisions of clause (o) below; or

 

(k)   the payment obligation represented by such Account is denominated in a currency other than U.S. Dollars; or

 

(l)    such Account is not evidenced by an invoice or other writing in form acceptable to the Agent, in its sole discretion; or

 

(m)  any Loan Party, in order to be entitled to collect such Account, is required to deliver any additional goods or merchandise to, perform any additional service for, or perform or incur any additional obligation to, the Person to whom or to which it was made; or

 

(n)   the total Accounts of the Account Debtor on such Account to the Loan Parties (taken as a whole) represent (a) if such Account Debtor has an Investment Grade Rating, more than 15% of the face amount of the Eligible Receivables of the Loan Parties (taken as a whole) at such time, or (b) if such Account Debtor does not have an Investment Grade Rating, more than 5% of the face amount of the Eligible Receivables of the Loan Parties (taken as a whole) at such time, but in each case only to the extent of such excess; or

 

(o)   such Account (or any portion thereof) remains unpaid for more than (x) 60 days from the original payment due date, or (y) 90 days from the original invoice date thereof, except that for purposes of clause (y) above, in the case of an Account that is

 

13

 

a Long Term Account, such Account shall be an Eligible Receivable for the period commencing with the day that is 180 days prior to the original payment due date for such Account until the day that is 60 days after the original payment due date for such Account, notwithstanding that such Account remains unpaid for more than 90 days from the original invoice date thereof; provided that the total Long Term Accounts that represent (A) on any day in the month of January, February, March, April, May or June, more than 35%, (B) on any day in the month of July, more than 20%, (C) on any day in the month of August, September or October, more than 10% or (D) on any day in the month of November or December, more than 15%, in each case, of the face amount of the Eligible Receivables of the Account Debtors (taken as a whole) at such time, shall not be Eligible Receivables to the extent of such excess); or

 

(p)   the Account Debtor on such Account has (i) filed a petition for bankruptcy or any other relief under any Debtor Relief Law, (ii) made an assignment for the benefit of creditors, (iii) had filed against it any petition or other application for relief under any Debtor Relief Law, (iv) failed, suspended business operations, become insolvent, called a meeting of its creditors for the purpose of obtaining any financial concession or accommodation or (v) had or suffered a receiver or a trustee to be appointed for all or a significant portion of its assets or affairs; or

 

(q)   such Account is not payable into a deposit account maintained with the Administrative Agent or which is the subject of an account control agreement described in Section 5.01(k); or

 

(r)    such Account does not arise under a Contract which has been duly authorized and which, together with such Account, is in full force and effect and constitutes the legal, valid and binding obligation of the Account Debtor of such Account enforceable against such Account Debtor in accordance with its terms; or

 

(s)   such Account, together with the Contract related thereto, contravenes in any material respect any laws, rules or regulations applicable thereto (including, without limitation, laws, rules and regulations relating to usury, consumer protection, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) or with respect to which any party to the Contract related thereto is in violation of any such law, rule or regulation in any material respect; or

 

(t)    the inventory giving rise to such Account has not been sent to the Account Debtor or the services giving rise to such Account have not yet been rendered to the Account Debtor; or

 

(u)   the sale to such Account Debtor on such Account is not a final sale; or

 

(v)   such Account relates to inventory not yet shipped or services not yet rendered.

 

For the avoidance of doubt, it is acknowledged and agreed that any calculation of ineligibility made pursuant to more than one clause above shall be made without duplication.

 

“ EMU ” means the economic and monetary union as contemplated in the Treaty on European Union.

 

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“ Environmental Action ” means any action, suit, written demand, demand letter, claim, notice of noncompliance or violation, notice of liability or potential liability, investigation, proceeding, consent order or consent agreement relating in any way to any Environmental Law, any Environmental Permit, any Hazardous Material, or arising from alleged injury or threat to public or employee health or safety, as such relates to exposure to Hazardous Material, or to the environment, including, without limitation, (a) by any governmental or regulatory authority for enforcement, cleanup, removal, response, remedial or other actions or damages and (b) by any governmental or regulatory authority or third party for damages, contribution, indemnification, cost recovery, compensation or injunctive relief.

 

“ Environmental Law ” means any applicable federal, state, local or foreign statute, law, ordinance, rule, regulation, code, order, writ, judgment, injunction or decree, or judicial or agency interpretation, relating to pollution or protection of the environment, public or employee health or safety, as such relates to exposure to Hazardous Material, or natural resources, including, without limitation, those relating to the use, handling, transportation, treatment, storage, disposal, release or discharge of Hazardous Materials.

 

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

 

“ Equipment ” has the meaning specified in the UCC.

 

“ Equity Interests ” means, with respect to any Person, shares of capital stock of (or other ownership or profit interests in) such Person, warrants, options or other rights for the purchase or other acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, 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 other acquisition from such Person of such shares (or such other interests), and other ownership or profit interests in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are authorized on any date of determination.

 

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

 

“ ERISA Affiliate ” means any Person that for purposes of Title IV of ERISA is a member of the controlled group of any Loan Party, or under common control with any Loan Party, within the meaning of Section 414(b), (c), (m) or (o) of the Internal Revenue Code.

 

“ ERISA Event ” means (a) (i) the occurrence of a reportable event, within the meaning of Section 4043 of ERISA, with respect to any ERISA Plan unless the 30-day notice requirement with respect to such event has been waived by the PBGC or (ii) the requirements of subsection (1) of Section 4043(b) of ERISA (without regard to subsection (2) of such Section) are met with respect to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of an ERISA 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 ERISA Plan within the following 30 days; (b) the application for a minimum funding waiver with respect to an ERISA Plan; (c) the provision by the administrator of any ERISA Plan of a notice of intent to terminate such ERISA Plan, pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA); (d) the cessation of operations at a facility of any Loan Party or any ERISA Affiliate in the circumstances described in Section 4062(e) of

 

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ERISA; (e) the withdrawal by any Loan Party or any ERISA Affiliate from a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions for imposition of a Lien under Section 302(f) of ERISA shall have been met with respect to any ERISA Plan; (g) the adoption of an amendment to an ERISA Plan requiring the provision of security to such ERISA Plan pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of proceedings to terminate an ERISA Plan pursuant to Section 4042 of ERISA, or the occurrence of any event or condition described in Section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, such ERISA Plan.

 

“ ERISA Plan ” means a Single Employer Plan or a Multiple Employer Plan.

 

“ Euro ”, “ € ” and “ EUR ” means the single currency of participating member states of the EMU.

 

“ Eurodollar Base Rate ” has the meaning specified in the definition of Eurodollar Rate.

 

“ Eurodollar Lending Office ” means, with respect to any Lender Party, the office of such Lender Party specified as its “Eurodollar Lending Office” opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender Party, as the case may be, or such other office of such Lender Party as such Lender Party may from time to time specify to the Borrower and the Administrative Agent.

 

“ Eurodollar Rate ” means, for any Interest Period with respect to a Eurodollar Rate Advance, a rate per annum equal to the higher of (a) 3% per annum and (b) the rate per annum determined by the Administrative Agent pursuant to the following formula:

 

Eurodollar Rate =	Eurodollar Base Rate
	1.00 – Eurodollar Rate Reserve Percentage

 

Where,

 

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

 

“ Eurodollar Rate Advance ” means an Advance that bears interest as provided in Section 2.07(a)(ii).

 

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

 

“ European Receivables Financing ” means (a) (i) the non-recourse factoring agreements in effect as of the date hereof between Mediofactoring Spa and the Foreign Subsidiaries named therein, and (ii) the non-recourse factoring agreement to be entered into after the date hereof between Mediofactoring Spa and Chemtura Sales France SA, each as referred to in the letter agreement dated February 25, 2009 between the Borrower and Mediofactoring Spa and in effect as of the date hereof (as such agreements may hereafter be amended, restated, supplemented or otherwise modified (or in the case of the agreement described in clause (a)(ii), entered into), so long as the terms thereof (other than Permitted Modifications) are not less favorable to the Borrower, the Subsidiaries and the Lenders than as in effect on the date hereof (or, in the case of the agreement described in clause (a)(ii), than the agreements described in clause (a)(i)), and (b) any other receivables factoring or any receivables securitization financing for Foreign Subsidiaries, in each case (covered by this clause (b)) on terms acceptable to the Required Lenders.

 

“ Events of Default ” has the meaning specified in Section 6.01.

 

“ Existing Credit Agreement ” means the Amended and Restated Credit Agreement, dated as of July 1, 2005 and amended and restated as of July 31, 2007, among the Borrower, Citibank, as administrative agent and the other lenders signatory thereto from time to time.

 

“ Existing Receivables Facility ” means the sale and securitization of certain Accounts of the Borrower and certain of its Subsidiaries pursuant to the (a) Receivables Sale Agreement, dated as of January 23, 2009, among the Borrower, Great Lakes Chemical Corporation, GLCC Laurel, LLC, Biolab, Inc. and Chemtura Receivables LLC, and (b) Receivables Purchase Agreement, dated as January 23, 2009, among Chemtura Receivables LLC, the Borrower, Citicorp USA, Inc., Citigroup Global Markets Inc., The Royal Bank of Scotland PLC and the other purchasers party thereto from time to time.

 

“ Extraordinary Receipt ” means any proceeds of property or casualty insurance (in any event excluding proceeds of business interruption insurance to the extent such proceeds constitute compensation for lost earnings) and condemnation awards in respect of any equipment and fixed assets (and payments in lieu thereof).

 

“ Facility ” means the Term Facility, the Rollup Revolving Credit Facility, the Non-rollup Revolving Credit Facility or the Letter of Credit Sublimit.

 

“ Federal Funds Rate ” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day for such transactions received

 

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by the Administrative Agent from three federal funds brokers of recognized standing selected by it.

 

“ Fee Letter ” means the fee letter dated March 5, 2009 between the Borrower and the Lead Arranger.

 

“ Final Order ” has the meaning specified in Section 3.02(b)(i)(C).

 

“ Final Term Advance Date ” means the date on which the Term Advances are made pursuant to Section 2.01(a)(ii).

 

“ First Day Orders ” means all orders entered by the Bankruptcy Court on, or within five days of, the Petition Date or based on motions filed on or about the Petition Date.

 

“ Fiscal Year ” means a fiscal year of the Borrower and its Subsidiaries ending on December 31.

 

“ Fitch ” means Fitch Ratings Ltd.

 

“ Flow-Through Entity ” has the meaning specified in Section 9.01(e)(iii).

 

“ Foreign Subsidiary ” means, at any time, any of the direct or indirect Subsidiaries of the Borrower that are organized outside of the laws of the United States or any state or political subdivision thereof at such time.

 

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

 

“ GAAP ” has the meaning specified in Section 1.03.

 

“ General Intangibles ” has the meaning specified in the UCC.

 

“ Governmental Authority ” means any nation, sovereign or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any central bank.

 

“ Granting Lender ” has the meaning specified in Section 10.07(k).

 

“ Guarantee Obligation ” means, with respect to any Person, any Obligation or arrangement of such Person to guarantee or intended to guarantee any Debt (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, (a) the direct or indirect guarantee, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the Obligation of a primary obligor, (b) the Obligation to make take-or-pay or similar payments, if required, regardless of nonperformance by any other party or parties to an agreement or (c) any Obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (A) for the purchase or payment of any such primary obligation or (B) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase

 

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property, assets, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof.  The amount of any Guarantee Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Guarantee Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder), as determined by such Person in good faith.

 

“ Guaranteed Obligations ” has the meaning specified in Section 8.01.

 

“ Guarantor ” has the meaning specified in the recital of parties to this Agreement, but in any event shall exclude Non-Filing Domestic Subsidiaries.

 

“ Guaranty ” has the meaning specified in Section 8.01.

 

“ Guaranty Supplement ” has the meaning specified in Section 8.05.

 

“ Hazardous Materials ” means (a) petroleum or petroleum products, by-products or breakdown products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls, mold and radon gas and (b) any other chemicals, materials or substances designated, classified or regulated as hazardous, toxic or words of similar import under any Environmental Law.

 

“ Hedge Agreements ” means interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts and other hedging agreements.

 

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

 

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

 

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

 

“ Information ” has the meaning specified in Section 10.09.

 

“ Initial Extension of Credit ” means the earlier to occur of the initial Borrowing and the initial issuance of a Letter of Credit hereunder.

 

“ Initial Issuing Bank ” has the meaning specified in the recital of parties to this Agreement.

 

“ Initial Lenders ” means the banks, financial institutions and other institutional lenders listed on the signature pages hereof as the Initial Lenders; provided that any such bank, financial institution or other institutional lender shall cease to be an Initial Lender on any date on which it ceases to have a Commitment.

 

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“ Initial Pledged Debt ” means Debt in existence on the Petition Date which is evidenced by a promissory note payable to a Loan Party by a third party with a principal face amount in excess of $100,000 as listed opposite such Loan Party’s name on and as otherwise described in Schedule V hereto.

 

“ Initial Pledged Equity ” means the shares of stock and other Equity Interests in any Subsidiary of a Loan Party as set forth opposite each Loan Party’s name on and as otherwise described in Schedule IV hereto.

 

“ Intellectual Property ” has the meaning specified in Section 9.01(g).

 

“ Intellectual Property Security Agreement ” has the meaning specified in Section 3.01(a)(vii).

 

“ Interest Expense ” means the sum of (a) interest on, and amortization of debt discount in respect of, Debt of the Borrower and its Subsidiaries and (b) amortization of discount of receivables or other assets of the Borrower and its Subsidiaries that are subject to factoring or securitization programs.  For the purposes of calculating Interest Expense for any period, if during such period the Borrower or any of its Subsidiaries shall have made an acquisition, Interest Expense for such period shall be calculated after giving pro forma effect thereto as if such acquisition occurred on the first day of such period.

 

“ Interest Period ” means, for each Eurodollar Rate Advance comprising part of the same Borrowing, the period commencing on the date of such Eurodollar Rate Advance or the date of the Conversion of any Base Rate Advance into such Eurodollar Rate Advance, and ending on the last day of the period selected by the Borrower pursuant to the provisions below and, thereafter, each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the period selected by the Borrower pursuant to the provisions below.  The duration of each such Interest Period shall be one, two or three months, as the Borrower may, upon notice received by the Administrative Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the first day of such Interest Period, select; provided , however , that:

 

(a)           the Borrower may not select any Interest Period with respect to any Eurodollar Rate Advance under a Facility that ends after the Stated Maturity Date;

 

(b)           Interest Periods commencing on the same date for Eurodollar Rate Advances comprising part of the same Borrowing shall be of the same duration;

 

(c)           whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided , however , that, if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day; and

 

(d)           whenever the first day of any Interest Period occurs on a day of an initial calendar month for which there is no numerically corresponding day in the calendar month that succeeds such initial calendar month by the number of months equal to the number of months in such Interest Period, such Interest Period shall end on the last Business Day of such succeeding calendar month.

 

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“ Interim Order ” has the meaning specified in Section 3.01(b).

 

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

 

“ Inventory ” has the meaning specified in the UCC.

 

“ Inventory Value ” means with respect to any Inventory of a Loan Party at the time of any determination thereof, (a) the lower of market value and standard cost determined on a first-in-first-out basis and carried on the general ledger or inventory system of such Loan Party stated on a basis consistent with its current and historical accounting practices, in U.S. Dollars, determined in accordance with the standard cost method of accounting less , (b) without duplication, (i) any markup on Inventory from an affiliate and (ii) in the event variances under the standard cost method are expensed, a reserve reasonably determined by the Administrative Agent as appropriate in order to adjust the standard cost of Eligible Inventory to approximate actual cost.

 

“ Investment ” means, with respect to any Person, (a) any direct or indirect purchase or other acquisition (whether for cash, securities, property, services or otherwise) by such Person of, or of a beneficial interest in, any Equity Interests or Debt of any other Person, (b) any direct or indirect purchase or other acquisition (whether for cash, securities, property, services or otherwise) by such Person of all or substantially all of the property and assets of any other Person or of any division, branch or other unit of operation of any other Person, (c) any direct or indirect loan, advance, other extension of credit or capital contribution by such Person to, or any other investment by such Person in, any other Person (including, without limitation, any arrangement pursuant to which the investor incurs indebtedness of the types referred to in clause (i) or (j) of the definition of “ Debt ” set forth in this Section 1.01 in respect of such other Person) and (d) any agreement irrevocably binding such Person to make any Investment prior to the Stated Maturity Date.

 

“ Investment Grade Rating ” with respect to a Person means that the Public Debt Rating of such Person is at least BBB- by S&P and Baa3 by Moody’s and such rating shall not be accompanied by either, in the case of S&P, a negative outlook, creditwatch negative or the equivalent thereof, or in the case of Moody’s, a negative outlook, a review for possible downgrade or the equivalent thereof (or, if such Person does not have a Public Debt Rating from S&P and Moody’s, the Public Debt Rating of such Person is at least BBB- by Fitch, and such rating shall not be accompanied by a negative watch or the equivalent thereof).

 

“ 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).

 

“ Issuing Bank ” means each Initial Issuing Bank and any other Non-rollup Revolving Credit Lender approved as an Issuing Bank by the Administrative Agent and any Eligible Assignee to which a Letter of Credit Commitment hereunder has been assigned pursuant to Section 7.09 or 10.07.

 

“ L/C Cash Collateral Account ” means the account established by the Borrower in the name of the Administrative Agent and under the sole and exclusive control of the Administrative Agent  that shall be used solely for the purposes set forth herein.

 

“ L/C Obligations ” means Non-rollup L/C Obligations or Rollup L/C Obligations.

 

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“ Lead Arranger ” has the meaning specified in the recital of parties to this Agreement.

 

“ Lender Insolvency Event ” means that (a) a Lender Party or its Parent Company is insolvent, or is generally unable to pay its debts as they become due, or admits in writing its inability to pay its debts as they become due, or makes a general assignment for the benefit of its creditors, or (b) such Lender Party or its Parent Company is the subject of a bankruptcy, insolvency, reorganization, liquidation or similar proceeding, or a receiver, trustee, conservator, intervenor or sequestrator or the like has been appointed for such Lender Party or its Parent Company, or such Lender Party or its Parent Company has taken any action in furtherance of or indicating its consent to or acquiescence in any such proceeding or appointment.

 

“ Lender Party ” means any Lender or any Issuing Bank.

 

“ Lender Party Appointment Period ” has the meaning specified in Section 7.06(a).

 

“ Lenders ” has the meaning specified in the recital of parties to this Agreement.

 

“ Letter of Credit ” means a Non-rollup Letter of Credit or Rollup Letter of Credit.

 

“ Letter of Credit Advance ” means a Non-rollup Letter of Credit Advance or Rollup Letter of Credit Advance.

 

“ 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 the applicable Issuing Bank.

 

“ Letter of Credit Commitment ” means with respect to any Issuing Bank, at any time, the obligation of such Issuing Bank to issue Letters of Credit pursuant to the terms and conditions of this Agreement in (a) the dollar amount set forth opposite such Issuing Bank’s name on Schedule I hereto under the caption “Letter of Credit Commitment” or (b) if such Issuing Bank has entered into one or more Assignment and Acceptances, set forth for such Issuing Bank in the Register maintained by the Administrative Agent pursuant to Section 10.07(d) as such Issuing Bank’s Letter of Credit Commitment,” in each case as the amount of such obligation may be reduced at or prior to such time pursuant to Section 2.05.

 

“ Letter of Credit Expiration Date ” means the day that is 10 Business Days prior to the Stated Maturity Date, or such later date as the applicable Issuing Bank may, in its sole discretion, specify.

 

“ Letter of Credit Sublimit ” means an amount equal to the lesser of (a) the aggregate amount of the Issuing Banks’ Letter of Credit Commitments at such time and (b) $50,000,000 as such amount may be reduced from time to time pursuant to Section 2.05.  The Letter of Credit Sublimit is part of, and not in addition to, the Non-rollup Revolving Credit Commitments and the Rollup Revolving Credit Commitments.

 

“ Lien ” means any lien, security interest or other charge or encumbrance of any kind, or any other type of preferential arrangement, including, without limitation, the lien or retained security title of a conditional vendor and any easement, right of way or other encumbrance on title to real property.

 

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“ Loan Documents ” means (i) this Agreement, (ii) the Notes, if any, (iii) the DIP Financing Orders, (iv) the Collateral Documents, (v) the Fee Letter, (vi) solely for purposes of the Collateral Documents, each Secured Hedge Agreement and Secured Cash Management Agreement and (vii) any other document, agreement or instrument executed and delivered by a Loan Party in connection with the Facilities, in each case as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof.

 

“ Loan Parties ” means, collectively, the Borrower and the Guarantors.

 

“ Long Term Account ” means an Account that relates to a Contract (a) which has an original payment due date that is more than 90 days after the invoice date specified in such Contract and (b) pursuant to or under which the Account Debtor is obligated to pay for crop protection goods or services or consumer goods or services (including pool and spa treatment products and household cleaning products).

 

“ Margin Stock ” has the meaning specified in Regulation U.

 

“ Material Adverse Change ” means any event or occurrence which has resulted in or would reasonably be expected to result in any material adverse change in the business, condition (financial or otherwise), operations, performance, properties, contingent liabilities, material agreements or prospects of the Borrower and each Guarantor, individually, and the Borrower, the Guarantors and their respective Subsidiaries, taken as a whole.

 

“ Material Adverse Effect ” means a material adverse effect on (a) the business, condition (financial or otherwise), operations, performance, properties, contingent liabilities, material agreements or prospects of the Borrower and each Guarantor, individually, and the Borrower, the Guarantors and their respective Subsidiaries, taken as a whole, (b) the rights and remedies of the Administrative Agent or any Lender Party under any Loan Document or (c) the ability of any Loan Party to perform its Obligations under any Loan Document to which it is or is to be a party.

 

“ Material Contract ” means, with respect to any Person, each contract evidencing such Person’s Debt for borrowed money in an aggregate principal amount exceeding $10,000,000.

 

“ Material Real Property ” means any real property owned or leased by any Loan Party reasonably determined by the Administrative Agent to be material.

 

“ Material Subsidiary ” means, on any date of determination, (a) any Subsidiary of the Borrower that, on such date, has (i) assets with a fair value equal to or in excess of $3,000,000, or (ii) annual net income in excess of $3,000,000 or (b) any other Subsidiary designated by the Borrower as a Material Subsidiary; provided that in no event shall all Subsidiaries of the Borrower that are not Material Subsidiaries have (A) assets with an aggregate book value in excess of $10,000,000, (B) aggregate annual net income in excess of $10,000,000 or (C) liabilities in an aggregate amount in excess of $10,000,000.

 

“ Maturity Date ” means the earlier of (a) the Stated Maturity Date and (b) the effective date of a Reorganization Plan.

 

“ Moody’s ” means Moody’s Investor Services, Inc.

 

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“ Mortgages ” means, collectively, the deeds of trust, trust deeds, mortgages, leasehold mortgages and leasehold deeds of trust executed by the Loan Parties in favor of the Administrative Agent in form and substance reasonably satisfactory to the Administrative Agent.

 

“ Multiemployer Plan ” means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions.

 

“ Multiple Employer Plan ” means a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan Party or any ERISA Affiliate and at least one Person other than the Loan Parties and the ERISA Affiliates or (b) was so maintained and in respect of which any Loan Party or any ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated.

 

“ Net Cash Proceeds ” means, (a) with respect to any sale, lease, transfer or other disposition of any asset of the Borrower or any Guarantor consummated after the Petition Date (other than any sale, lease, transfer or other disposition of assets pursuant to Section 5.02(h)(i), (ii), (iii), (v), (vi), (vii), (viii) or (ix) or any single sale, lease, transfer or other disposition (or series of related sales, leases, transfers or other dispositions) of assets for cash proceeds of less than $50,000), the excess, if any, of (i) the sum of cash and Cash Equivalents received in connection with such sale, lease, transfer or other disposition (including any cash or Cash Equivalents received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) over (ii) the sum of (A) the amount required to be paid in respect of any Debt permitted hereunder (other than Debt under the Loan Documents) that is secured by a lien permitted under Section 5.02(a) on such asset and that is required to be repaid in connection with such sale, lease, transfer or other disposition thereof, (B) the reasonable and customary out-of-pocket costs, fees, commissions, premiums and expenses incurred by the Borrower or its Subsidiaries, (C) federal, state, provincial, foreign and local taxes reasonably estimated (on a Consolidated basis) to be actually payable within the current or the immediately succeeding tax year as a result of such sale, lease, transfer of other disposition, and (D) a reasonable reserve (which reserve shall be deposited into an escrow account with the Administrative Agent) for any purchase price adjustment or any indemnification payments (fixed and contingent) or other liabilities attributable to the seller’s obligations to the purchaser undertaken by the Borrower or any of its Subsidiaries in connection with such sale, lease, transfer or other disposition (but excluding any purchase price adjustment or any indemnity which, by its terms, will not under any circumstances be made prior to the Stated Maturity Date); and

 

(b) with respect to any Extraordinary Receipt of the Borrower or any Guarantor after the Petition Date that is not otherwise included in clauses (a) above, the excess, if any, of (i) the sum of the cash and Cash Equivalents received in connection therewith in respect of an event that occurred after the Petition Date over (ii) the sum of (A) the amount required to be paid in respect of any Debt permitted hereunder (other than Debt under the Loan Documents) that is secured by a lien permitted under Section 5.02(a) on the assets giving rise to such Extraordinary Receipt and that is required to be repaid in connection with such Extraordinary Receipt, (B) the amount required to be paid with such Extraordinary Receipt under the terms of any contractual obligations permitted hereunder then in effect, (C) the reasonable and customary out-of-pocket costs, fees, commissions, premiums and expenses incurred by the Borrower or its Subsidiaries, and (D) federal, state, provincial, foreign and local taxes reasonably estimated (on a Consolidated

 

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basis) to be actually payable within the current or the immediately succeeding tax year as a result of such Extraordinary Receipt.

 

“ Net Orderly Liquidation Value Percentage ” means, with respect to Inventory at any time, the quotient (expressed as a percentage) of (a) the Net Orderly Liquidation Value of all Inventory owned by the Borrower and the Guarantors divided by (b) the gross inventory cost of such Inventory, determined on the basis of the then most recently conducted third party appraisal in form and substance, and performed by an independent appraisal firm, reasonably satisfactory to the Administrative Agent.

 

“ Net Orderly Liquidation Value ” means, with respect to Inventory, the orderly liquidation value with respect to such Inventory, net of expenses estimated to be incurred in connection with such liquidation, based on the most recent third party appraisal in form and substance, and by an independent appraisal firm, reasonably satisfactory to the Administrative Agent.

 

“ Non-Consenting Lender ” means, in the event that the Supermajority Lenders have agreed to any consent, waiver or amendment pursuant to Section 10.01 that requires the consent of one or more Lenders in addition to the Supermajority Lenders or (other than in the case of any consent, waiver or amendment that solely requires the consent of the Supermajority Lenders) the Required Lenders, any Lender whose agreement is necessary for the effectiveness of such consent, waiver or amendment but who does not so agree.

 

“ Non-Defaulting Lender ” means, at any time, a Lender Party that is not a Defaulting Lender or a Potential Defaulting Lender.

 

“ Non-Filing Domestic Subsidiary ” means Chemtura Receivables LLC and each other direct or indirect Subsidiary of the Borrower that is organized under the laws of the United States or any state or other political subdivision thereof that is not a guarantor under the Pre-Petition Document and is not a party to a Case.  As of the Effective Date, except as listed on Schedule VIII, Chemtura Receivables LLC is the only Non-Filing Domestic Subsidiary.

 

“ Non-Loan Party ” means any Subsidiary of a Loan Party that is not a Loan Party.

 

“ Non-rollup Honor Date ” has the meaning specified in Section 2.03(c).

 

“ Non-rollup L/C Obligations ” means, as at any date of determination, the aggregate Available Amount of all outstanding Non-rollup Letters of Credit plus the aggregate of all Non-rollup Unreimbursed Amounts, including all Non-rollup Letter of Credit Advances.

 

“ Non-rollup Letter of Credit ” means any letter of credit issued under Section 2.03.

 

“ Non-rollup Letter of Credit Advance ” means an advance made by any Issuing Bank or Non-rollup Revolving Credit Lender pursuant to Section 2.03(c).

 

“ Non-rollup Reduction Amount ” has the meaning specified in Section 2.06(b)(iv).

 

“ Non-rollup Revolving Credit Advance ” has the meaning specified in Section 2.01(b).

 

“ Non-rollup Revolving Credit Commitment ” means, with respect to any Lender at any time, the amount set forth for such time opposite such Lender’s name on Schedule I hereto under

 

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the caption “Non-rollup Revolving Credit Commitment” or, if such Lender has entered into one or more Assignments and Acceptances, set forth for such Lender in the Register maintained by the Administrative Agent pursuant to Section 10.07(d) as such Lender’s “Non-rollup Revolving Credit Commitment”, as such amount may be reduced at or prior to such time pursuant to Section 2.05.  The aggregate principal amount of the Non-rollup Revolving Credit Commitments shall be (a) $25,000,000 as of the Effective Date and (b) increased to an amount not in excess of $63,532,482 as of the Final Term Advance Date in accordance with Section 2.05(b).

 

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

 

“ Non-rollup Revolving Credit Lender ” means any Lender that has a Non-rollup Revolving Credit Commitment.

 

“ Non-rollup Revolving Credit Note ” means a promissory note of the Borrower payable to the order of any Non-rollup Revolving Credit Lender, in substantially the form of Exhibit A-2 hereto, evidencing the aggregate indebtedness of the Borrower to such Lender resulting from the Non-rollup Revolving Credit Advances made by such Lender.

 

“ Non-Rollup Unreimbursed Amount ” has the meaning specified in Section 2.03(c)(i).

 

“ Note ” means a Term Note, a Rollup Revolving Credit Note or a Non-rollup Revolving Credit Note.

 

“ Notice of Borrowing ” has the meaning specified in Section 2.02(a).

 

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

 

“ Other Taxes ” has the meaning specified in Section 2.12(b).

 

“ Outstanding Amount ” means (a) with respect to Advances on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Advances, as the case may be, occurring on such date; and (b) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any Letter of Credit Advance 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 of outstanding unpaid drawings under any Letters of Credit or any reductions in the Available Amount of any Letter of Credit taking effect on such date.

 

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“ Outstanding Financing Amount ” means, at any time, with respect to any European Receivables Financing, the aggregate cash amount invested by investors that are not Affiliates of the Borrower and paid to the Foreign Subsidiaries of the Borrower pursuant to such European Receivables Financing, as reduced by the aggregate amounts received by such investors from the collection or payment of receivables in connection therewith and applied to reduce such invested amount.

 

“ Parent Company ” means, with respect to a Lender Party, the bank holding company (as defined in Federal Reserve Board Regulation Y), if any, of such Lender Party, and/or any Person owning, beneficially or of record, directly or indirectly, a majority of the shares of such Lender Party.

 

“ Patents ” has the meaning specified in Section 9.01(g)(i).

 

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

 

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

 

“ Permitted Discretion ” means the Administrative Agent’s determination based upon such credit and collateral considerations as it may deem appropriate, in its sole discretion acting in a commercially reasonable manner and in accordance with its customary business practices.

 

“ Permitted Lien ” means such of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced (or if commenced, shall have been stayed):  (a) Liens for taxes, assessments and governmental charges or levies to the extent not required to be paid under Section 5.01(b) hereof; (b) Liens imposed by law, such as materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar Liens arising in the ordinary course of business securing obligations that (i) are not overdue for a period of more than 30 days and (ii) individually or together with all other Permitted Liens outstanding on any date of determination do not materially and adversely affect the use of the property to which they relate; (c) pledges or deposits in the ordinary course of business to secure obligations under workers’ compensation laws or similar legislation or to secure public or statutory obligations; (d) deposits to secure the performance of bids, trade contracts and leases (other than Debt), statutory obligations, surety bonds (other than bonds related to judgments or litigation), performance bonds and other obligations of a like nature incurred in the ordinary course of business; (e) Liens securing judgments (or the payment of money not constituting a Default under Section 9.01(g) or securing appeal or other surety bonds related to such judgments; (e) any banker’s Lien or right of offset on moneys of the Borrower or any of its Subsidiaries in favor of any lender or holder of its commercial paper deposited with such lender or holder in the ordinary course of business; (f) interest of lessees in property owned by the Borrower or any of its Subsidiaries where such interests are created in the ordinary course of their respective leasing activities and are not created directly or indirectly in connection with the borrowing of money or the securing of Debt by the Borrower or any of its Subsidiaries; (g) Liens in favor of customs or revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; (h) Liens arising from or related to precautionary UCC or like personal property security financing statements regarding operating leases (if any) entered into by the Borrower and its Subsidiaries in the ordinary course of business; (i) licenses, sublicenses, leases and subleases, to the extent that such would be an encumbrance, in each case entered into in the ordinary course of business and not materially interfering with the business of the Borrower

 

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or any of its Subsidiaries, and (k) easements, restrictions (including zoning restrictions), rights of way and other encumbrances on title to real property that do not render title to the property encumbered thereby unmarketable or materially adversely affect the use of such property for its present purposes.

 

“ Permitted Modifications ” means the modifications to the non-recourse factoring agreements in effect as of the date hereof between Mediofactoring Spa and the Foreign Subsidiaries named therein, as referred to in the letter agreement dated February 25, 2009 between the Borrower and Mediofactoring Spa, as in effect as of the date hereof (a) to implement full “with notification” provisions, (b) to reduce to 60 days the maximum payment term for receivables to which the factor’s risk assumption applies under section 6.1 of the general conditions to such factoring agreements, (c) to increase the interest spread to a rate not in excess of 4.0% per annum and (d) to impose additional factoring fees of not more than 1.0% of the amount of factored invoices.

 

“ Person ” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

 

“ Petition Date ” has the meaning specified in Preliminary Statement (1).

 

“ Pledged Collateral ” means, collectively, (a) the Initial Pledged Equity, (b) the Initial Pledged Debt, (c) Pledged Equity which is Equity Interests in any domestic Subsidiary of a Loan Party (other than the Initial Pledged Equity) acquired after the Petition Date, (d) Pledged Debt (other than the Initial Pledged Debt) which has a face principal amount in excess of $100,000 and which arises after the Petition Date and (e) any Pledged Investment Property (other than an Equity Interest), subject in the case of each of the foregoing to the limitations and exclusions set forth in this Agreement.

 

“ Pledged Debt ” has the meaning specified in Section 9.01(e)(iv).

 

“ Pledged Equity ” has the meaning specified in Section 9.01(e)(iii).

 

“ Pledged Investment Property ” has the meaning specified in Section 9.01(e)(v).

 

“ Potential Defaulting Lender ” means, at any time, a Lender Party directly or indirectly Controlled by a Person as to which an event of the kind referred to in the definition of “Lender Insolvency Event” has occurred and is continuing in respect of such Person.  Any determination that a Lender Party is a Potential Defaulting Lender (to the extent the preceding sentence contemplates such a determination in order for the relevant Lender Party to be considered a Potential Defaulting Lender) will be made by the Administrative Agent in its sole discretion acting in good faith.

 

“ Pre-Petition Agent ” means Citibank in its capacity as agent under the Pre-Petition Security Agreement.

 

“ Pre-Petition Collateral ” means the “Collateral” as defined in the Pre-Petition Security Agreement.

 

“ Pre-Petition Debt ” means Debt of the Loan Parties outstanding and unpaid on the Effective Date.

 

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“ Pre-Petition Document ” means the “Credit Agreement” as defined in the Pre-Petition Security Agreement.

 

“ Pre-Petition Secured Creditors ” means the Persons from time to time holding Pre-Petition Secured Indebtedness.

 

“ Pre-Petition Secured Indebtedness ” means all indebtedness and other Obligations of the Borrower and the Guarantors that are secured pursuant to the Pre-Petition Security Agreement.

 

“ Pre-Petition Security Agreement ” means the Second Amended and Restated Pledge and Security Agreement dated as of December 30, 2008 from the Borrower and the other grantors referred to therein to Citibank, as agent.

 

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

 

“ Pro Rata Share ” of any amount means, with respect to any Lender at any time, the product of such amount times a fraction the numerator of which is the amount of such Lender’s Commitment (or, if the Commitments shall have been terminated pursuant to Section 2.05 or 6.01, such Lender’s Commitment as in effect immediately prior to such termination) under the applicable Facility or Facilities at such time and the denominator of which is the amount of such Facility or Facilities at such time (or, if the Commitments shall have been terminated pursuant to Section 2.05 or 6.01, the amount of such Facility or Facilities as in effect immediately prior to such termination).

 

“ Professional Fees ” means the fees and expenses of any and all professional Persons, retained by the Borrower or the Committee.

 

“ Public Debt Rating ” means, with respect to any Person, as of any date, the rating that has been most recently announced by either S&P, Moody’s or Fitch, as the case may be, for any class of non-credit enhanced long-term senior unsecured debt issued by such Person or, if any such rating agency shall have issued more than one such rating, the lowest such rating issued by such rating agency for such debt of such Person.  For purposes of the foregoing, (a) if any rating established by S&P, Moody’s or Fitch shall be changed, such change shall be effective as of the date on which such change is first announced publicly by the rating agency making such change; and (b) if S&P, Moody’s or Fitch shall change the basis on which ratings are established, each reference to the Public Debt Rating announced by S&P, Moody’s or Fitch, as the case may be, shall refer to the then equivalent rating by S&P, Moody’s or Fitch, as the case may be.

 

“ RBS ” has the meaning specified in the recital of parties to this Agreement.

 

“ Redeemable ” means, with respect to any Equity Interest, Debt or other right or Obligation, any such right or Obligation that (a) the issuer has undertaken to redeem at a fixed or determinable date or dates, whether by operation of a sinking fund or otherwise, or upon the occurrence of a condition not solely within the control of the issuer or (b) is redeemable at the option of the holder.

 

“ Register ” has the meaning specified in Section 10.07(d).

 

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“ Regulation U ” means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time.

 

“ Related Contracts ” has the meaning specified in Section 9.01(c).

 

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

 

“ Related Security ” means,  with respect to any Account, (a) all of the applicable Loan Party’s right, title and interest in and to the goods (including returned or repossessed goods), if any, relating to the sale which gave rise to such Account, (b) all other security interests or Liens and property subject thereto from time to time purporting to secure payment of such Account, whether pursuant to the obligation giving rise to such Account or otherwise, (c) all guarantees and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Account whether pursuant to the obligation giving rise to such Account or otherwise, (d) all records relating to the foregoing and (e) all proceeds of the foregoing.

 

“Rent Reserve ” means, with respect to any plant, warehouse distribution center or other operating facility where any Inventory subject to landlords’ Liens or other Liens arising by operation of law is located and a Collateral Access Agreement has not been duly executed and delivered by the lessor or bailee at such location, a reserve equal to three (3) month’s rent at such plant, warehouse distribution center, or other operating facility, and such other reserve amounts that may be determined by the Administrative Agent in its reasonable discretion.

 

“ Reorganization Plan ” means a chapter 11 plan of reorganization in any of the Cases of the Borrower or a Guarantor.

 

“ Required Lenders ” means, at any time, Lenders owed or holding at least a majority in interest of the sum of (a) the aggregate principal amount of the Advances outstanding at such time, (b) the aggregate Available Amount of all Letters of Credit outstanding at such time, (c) the aggregate Unused Term Commitments at such time, (d) the aggregate Unused Non-rollup Revolving Credit Commitments at such time and (e) the aggregate Unused Rollup Revolving Credit Commitments at such time; provided , however , that if any Lender shall be a Defaulting Lender at such time, there shall be excluded from the determination of Required Lenders at such time (i) the aggregate principal amount of the Advances owing to such Lender (in its capacity as a Lender) and outstanding at such time, (ii) such Lender’s Pro Rata Share of the aggregate Available Amount of all Letters of Credit outstanding at such time, (iii) the Unused Term Commitment of such Lender at such time, (iv) the Unused Non-rollup Revolving Credit Commitment of such Lender at such time and (v) the Unused Rollup Revolving Credit Commitment of such Lender at such time.  For purposes of this definition, (A) the aggregate principal amount of Non-rollup Letter of Credit Advances owing to the Issuing Banks and the Available Amount of each Non-rollup Letter of Credit shall be considered to be owed to the Lenders ratably in accordance with their respective Non-rollup Revolving Credit Commitments and (B) the aggregate principal amount of Rollup Letter of Credit Advances owing to the Issuing Banks and the Available Amount of each Rollup Letter of Credit shall be considered to be owed to the Lenders ratably in accordance with their respective Rollup Revolving Credit Commitments.

 

“ Reserves ” means, at any time of determination, (a) Bank Product Reserves, (b) Rent Reserves, (c) the Carve-Out and (d) such other reserves as determined from time to time in the

 

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Permitted Discretion of the Administrative Agent to preserve and protect the value of the Collateral.

 

“ Responsible Officer ” means the chief executive officer, president, any executive vice president, chief financial officer, principal accounting officer, controller, chief restructuring officer or treasurer of a Loan Party.  Any document delivered hereunder or under any other Loan Document 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 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.

 

“ Restricting Information ” has the meaning specified in Section 10.10.

 

“ Rollup Honor Date ” has the meaning specified in Section 2.21(c).

 

“ Rollup L/C Obligations ” means, as at any date of determination, the aggregate Available Amount of all outstanding Rollup Letters of Credit plus the aggregate of all Rollup Unreimbursed Amounts, including all Rollup Letter of Credit Advances.

 

“ Rollup Letter of Credit ” means any letter of credit issued under Section 2.21.

 

“ Rollup Letter of Credit Advance ” means an advance made by any Issuing Bank or Rollup Revolving Credit Lender pursuant to Section 2.21(c).

 

“ Rollup Reduction Amount ” has the meaning specified in Section 2.06(b)(v).

 

“ Rollup Revolving Credit Advance ” has the meaning specified in Section 2.01(b).

 

“ Rollup Revolving Credit Commitment ” means, with respect to any Lender at any time, the amount set forth for such time opposite such Lender’s name on Schedule I hereto under the caption “Rollup Revolving Credit Commitment” or, if such Lender has entered into one or more Assignments and Acceptances, set forth for such Lender in the Register maintained by the Administrative Agent pursuant to Section 10.07(d) as such Lender’s “Rollup Revolving Credit Commitment”, in each case as such amount may be reduced at or prior to such time pursuant to Section 2.05.  As of the Effective Date, the aggregate principal amount of the Rollup Revolving Credit Commitments is $86,467,518.

 

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

 

“ Rollup Revolving Credit Lender ” means any Lender that has a Rollup Revolving Credit Commitment.

 

“ Rollup Revolving Credit Note ” means a promissory note of the Borrower payable to the order of any Rollup Revolving Credit Lender, in substantially the form of Exhibit A-3 hereto, evidencing the aggregate indebtedness of the Borrower to such Lender resulting from the Rollup Revolving Credit Advances made by such Lender.

 

“ Rollup Unreimbursed Amount ” has the meaning specified in Section 2.21(c)(i).

 

“ S&P ” means Standard & Poor’s, a division of The Mc-Graw Hill Companies, Inc.

 

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“ 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 permitted under Article V that is entered into by and between any Loan Party and any Cash Management Bank after the Petition Date, in each case solely to the extent that the obligations in respect of such Cash Management Agreement are not cash collateralized or otherwise secured (other than pursuant to the Collateral Documents); provided that the aggregate principal or notional amount of Obligations (in terms of Agreement Value in the case of Secured Hedge Agreements) under all Secured Cash Management Agreements and Secured Hedge Agreements shall not exceed $10,000,000 at any time outstanding.

 

“ Secured Hedge Agreement ” means any Hedge Agreement permitted under Article V that is entered into by and between any Loan Party and any Hedge Bank after the Petition Date, in each case solely to the extent that the obligations in respect of such Hedge Agreement are not cash collateralized or otherwise secured (other than pursuant to the Collateral Documents); provided that the aggregate principal or notional amount of Obligations (in terms of Agreement Value in the case of Secured Hedge Agreements) under all Secured Cash Management Agreements and Secured Hedge Agreements shall not exceed $10,000,000 at any time outstanding.

 

“ Secured Obligation ” has the meaning specified in Section 9.01.

 

“ Secured Parties ” means, collectively, the Administrative Agent, the Lender Parties, the Cash Management Banks and the Hedge Banks.

 

“ Security Collateral ” has the meaning specified in Section 9.01(e).

 

“ Single Employer Plan ” means a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan Party or any ERISA Affiliate and no Person other than the Loan Parties and the ERISA Affiliates or (b) was so maintained and in respect of which any Loan Party or any ERISA Affiliate could have liability under Section 4069 of ERISA in the event such plan has been or were to be terminated.

 

“ SPC ” has the meaning specified in Section 10.07(k).

 

“ Specified Interest Accrual Period ” means any period of time commencing (whether before or after the Effective Date) at such time that the aggregate Outstanding Financing Amount under all European Receivables Financings plus, if any other financing for Foreign Subsidiaries on terms acceptable to the Required Lenders is in effect, the aggregate principal amount thereof, shall be less than 40,000,000 Euros and ending at such time thereafter that either (a) the aggregate Outstanding Financing Amount under all European Receivables Financings (then in effect) plus the aggregate principal amount of such other financing shall equal or exceed 40,000,000 Euros or (b) the Borrower shall have implemented European Receivables Financings and/or alternative arrangements with respect to financing the operations of the Subsidiaries of the Borrower in Europe that are, in the aggregate, reasonably acceptable to the Administrative Agent or the Required Lenders.

 

“ Stated Maturity Date ” means the date that is 364 days following the Effective Date.

 

“ Subagent ” has the meaning specified in Section 9.06(b).

 

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“ Subsidiary ” of any Person means any corporation, partnership, joint venture, limited liability company, trust or estate of which (or in which) more than 50% of (a) the issued and outstanding capital stock having ordinary voting power to elect a majority of the Board of Directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (b) the interest in the capital or profits of such partnership, joint venture or limited liability company or (c) the beneficial interest in such trust or estate is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries.  Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

 

“ Superpriority Claim ” means a claim against the Borrower or a Guarantor in any of the Cases that is a superpriority administrative expense claim having priority over any or all administrative expenses and other claims of the kind specified in, or otherwise arising or ordered under, any sections of the Bankruptcy Code (including, without limitation, sections 105, 326, 328, 330, 331, 503(b), 507(a), 507(b), 546(c) and/or 726 thereof), whether or not such claim or expenses may become secured by a judgment Lien or other non-consensual Lien, levy or attachment.

 

“ Supermajority Lenders ” means, at any time, Lenders owed or holding at least 66 2 / 3 % in interest of the sum of (a) the aggregate principal amount of the Advances outstanding at such time, (b) the aggregate Available Amount of all Letters of Credit outstanding at such time, (c) the aggregate Unused Term Commitments at such time, (d) the aggregate Unused Non-rollup Revolving Credit Commitments at such time and (e) the aggregate Unused Rollup Revolving Credit Commitments at such time; provided , however , that if any Lender shall be a Defaulting Lender at such time, there shall be excluded from the determination of Required Lenders at such time (i) the aggregate principal amount of the Advances owing to such Lender (in its capacity as a Lender) and outstanding at such time, (ii) such Lender’s Pro Rata Share of the aggregate Available Amount of all Letters of Credit outstanding at such time, (iii) the Unused Term Commitment of such Lender at such time, (iv) the Unused Non-rollup Revolving Credit Commitment of such Lender at such time and (iv) the Unused Rollup Revolving Credit Commitment of such Lender at such time.  For purposes of this definition, (A) the aggregate principal amount of Non-rollup Letter of Credit Advances owing to the Issuing Banks and the Available Amount of each Non-rollup Letter of Credit shall be considered to be owed to the Lenders ratably in accordance with their respective Non-rollup Revolving Credit Commitments and (B) the aggregate principal amount of Rollup Letter of Credit Advances owing to the Issuing Banks and the Available Amount of each Rollup Letter of Credit shall be considered to be owed to the Lenders ratably in accordance with their respective Rollup Revolving Credit Commitments.

 

“ Surviving Debt ” means Debt of each Loan Party and its Subsidiaries outstanding immediately before and after giving effect to the Initial Extension of Credit.

 

“ Syndication Agent ” has the meaning specified in the recital of parties to this Agreement.

 

“ 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, without limitation, any minority interest transactions that function primarily as a borrowing) but are not otherwise included in the definition of “Debt” or as a liability on the consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP.

 

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“ Taxes ” has the meaning specified in Section 2.12(a).

 

“ Term Advance ” has the meaning specified in Section 2.01(a).

 

“ Term Commitment ” means, with respect to any Term Lender at any time, the amount set forth opposite such Lender’s name on Schedule I hereto under the caption “Term Commitment” or, if such Lender has entered into one or more Assignments and Acceptances, set forth for such Lender in the Register maintained by the Administrative Agent pursuant to Section 10.07(d) as such Lender’s “Term Commitment”, in each case as such amount may be reduced at or prior to such time pursuant to Section 2.05.  Before giving effect to any Term Advances, the aggregate principal amount of the Term Commitments shall be $250,000,000 as of the Effective Date.

 

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

 

“ Term Lender ” means any Lender that has a Term Commitment.

 

“ Term Note ” means a promissory note of the Borrower payable to the order of any Term Lender, in substantially the form of Exhibit A-1 hereto, evidencing the indebtedness of the Borrower to such Lender resulting from the Term Advance made by such Lender.

 

“ Termination Date ” means the earliest to occur of (i) the Maturity Date and (ii) the date of termination in whole of the Commitments pursuant to Section 2.05 or 6.01.

 

“ Testing Period ” means for any calendar week (the “ subject week ”) with respect to which compliance with Section 5.04(c) is being calculated, the period commencing with the first day of the first calendar week of the DIP Budget and ending with the last day of such subject week.

 

“ Trade Secrets ” has the meaning specified in Section 9.01(g)(v).

 

“ Trademarks ” has the meaning specified in Section 9.01(g)(ii).

 

“ Type ” refers to the distinction between Advances bearing interest at the Base Rate and Advances bearing interest at the Eurodollar Rate.

 

“ UCC ” means the Uniform Commercial Code as in effect, from time to time, 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.

 

“ Unreimbursed Amount ” means a Non-rollup Unreimbursed Amount or Rollup Unreimbursed Amount.

 

“ Unrolled Pre-Petition Secured Indebtedness ” means Pre-Petition Secured Indebtedness that shall not be refinanced with the proceeds of the Rollup Revolving Credit Advances pursuant to the Final Order.

 

“ Unused Non-rollup Revolving Credit Commitment ” means, with respect to any Lender at any time, (a) such Lender’s Non-rollup Revolving Credit Commitment at such time minus

 

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(b) the sum of (i) the aggregate principal amount of all Non-rollup Revolving Credit Advances and Non-rollup Letter of Credit Advances made by such Lender (in its capacity as a Lender) and outstanding at such time, plus (ii) such Lender’s Pro Rata Share of (A) the aggregate Available Amount of all Non-rollup Letters of Credit outstanding at such time and (B) the aggregate principal amount of all Non-rollup Letter of Credit Advances made by the Issuing Banks pursuant to Section 2.03(c) and outstanding at such time.

 

“ Unused Rollup Revolving Credit Commitment ” means, with respect to any Lender at any time, (a) such Lender’s Rollup Revolving Credit Commitment at such time minus (b) the sum of (i) the aggregate principal amount of all Rollup Revolving Credit Advances and Rollup Letter of Credit Advances made by such Lender (in its capacity as a Lender) and outstanding at such time, plus (ii) such Lender’s Pro Rata Share of (A) the aggregate Available Amount of all Rollup Letters of Credit outstanding at such time and (B) the aggregate principal amount of all Rollup Letter of Credit Advances made by the Issuing Banks pursuant to Section 2.21(c) and outstanding at such time.

 

“ Unused Term Commitment ” means, with respect to any Term Lender at any time (a) such Lender’s aggregate Term Commitments at such time minus (b) the aggregate principal amount of all Term Advances made by such Lender (in its capacity as a Lender).

 

“ Voting Stock ” means capital stock issued by a corporation, or equivalent interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency.

 

“ Withdrawal Liability ” has the meaning specified in Part I of Subtitle E of Title IV of ERISA.

 

Section 1.02  Computation of Time Periods; Other Definitional Provisions .  In this Agreement in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding”.  Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document in any Loan Document shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document) and (b) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time.

 

Section 1.03  Accounting Terms .  All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles consistent with those applied in the preparation of the financial statements referred to in Section 4.01(f) (“ GAAP ”).

 

Section 1.04  Terms Generally .  (a) When any Reserve is to be established or a change in any amount, percentage, reserve, eligibility criteria or other item in the definitions of the terms “Bank Product Reserves”, “Borrowing Base”, “Eligible Inventory”, “Eligible Receivables”, “Rent Reserve” and “Reserves” is to be determined in each case in the Administrative Agent’s “reasonable discretion” or “Permitted Discretion”, such Reserve shall be implemented or such change shall become effective on the second Business Day after the date of delivery of a written notice thereof to the Borrower (a “ Borrowing Base Change Notice ”), or immediately, without prior written notice, during the continuance of an Event of Default.

 

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(b)                                  Nothing in this Agreement or any other Loan Document (other than the DIP Financing Orders) shall be construed as limiting the amount of Pre-Petition Secured Indebtedness or shall prejudice the right of the Administrative Agent or any Lender Party to contest such amount.

 

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT

 

Section 2.01  The Advances .  (a)  The Term Advances .  Each Term Lender severally agrees, on the terms and conditions hereinafter set forth, to (i) make a single advance to the Borrower (together with any outstanding Non-rollup Revolving Credit Advance converted pursuant to the second proviso to this sentence, “ Term Advances ”) on the Effective Date in an amount not to exceed the lesser of (x) such Lender’s Pro Rata Share of $165,000,000, (y) such Lenders’ Term Commitment at such time and (z) such Lender’s Pro Rata Share of Availability at such time, and (ii) make a single advance to the Borrower on any Business Day within two Business Days after the entry of the Final Order, in an amount not to exceed the lesser of (x) such Lender’s Pro Rata Share of the amount of (1) $250,000,000 minus (2) the aggregate Term Advances made on the Effective Date, (y) such Lender’s Term Commitment at such time and (z) such Lender’s Pro Rata Share of Availability at such time; provided that the aggregate amount of Advances that may be made at any time shall not exceed the Availability at such time (without double-counting Non-rollup Revolving Credit Advances that are to be converted into Term Advances); provided further that to the extent a Lender holds both an Unused Term Commitment and any outstanding Non-rollup Revolving Credit Advance immediately prior to the time when the Term Advance is required to be made under Section 2.01(a)(ii), (A) on the Final Term Advance Date, such outstanding Non-rollup Revolving Credit Advance shall be automatically converted into a Term Advance of such Lender in the same Type and in the case of an Eurodollar Rate Advance, with the same continued Interest Period (and the Borrower shall be deemed to have requested such Term Advance on the Final Term Advance Date in such Type and with such Interest Period) and (B) the amount so converted shall be deemed to constitute for all purposes a Term Advance (such that the amount of the single advance that such Term Lender is obligated to make on the Final Term Advance Date shall be reduced by such amount).  Amounts borrowed under this Section 2.01(a) and repaid or prepaid may not be reborrowed.

 

(b)                                  The Revolving Credit Advances .  (i) Each Non-rollup Revolving Credit Lender severally agrees, on the terms and conditions hereinafter set forth, to make advances (each, a “ Non-rollup Revolving Credit Advance ”) to the Borrower from time to time on any Business Day during the period from the Effective Date until the Termination Date in an amount for each such Advance not to exceed the lesser of (A) such Non-rollup Revolving Credit Lender’s Non-rollup Revolving Credit Commitment at such time and (B) such Non-rollup Revolving Credit Lender’s Pro Rata Share of Availability at such time; provided that the aggregate amount of Advances that may be made at any time shall not exceed the Availability at such time.

 

(ii) Each Rollup Revolving Credit Lender severally agrees, on the terms and conditions hereinafter set forth, to make advances (each, a “ Rollup Revolving Credit Advance ”) to the Borrower from time to time on any Business Day during the period from the Final Term Advance Date until the Termination Date in an amount for each such Advance not to exceed the lesser of (A) such Rollup Revolver Credit Lender’s Rollup Revolving Credit Commitment at such time and (B) such Rollup Revolving Credit Lender’s Pro Rata Share of Availability at such time; provided that the aggregate amount of Advances that may be made at any time shall not exceed the Availability at such time.

 

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(c)                                   Borrowings .  Each Borrowing shall be in a principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof (other than (x) a Borrowing the proceeds of which shall be used solely to repay or prepay in full outstanding Letter of Credit Advances and (y) a Borrowing in an amount equal to the aggregate unused principal amount of the Commitments under any Facility) and shall consist of Advances made simultaneously by the Lenders under the applicable Facility ratably according to the Lenders’ Commitments under such Facility.  Within the limits of each Lender’s Unused Non-rollup Revolving Credit Commitment in effect from time to time, the Borrower may borrow under Section 2.01(b)(i), prepay pursuant to Section 2.06, and reborrow under Section 2.01(b).  Within the limits of each Lender’s Unused Rollup Revolving Credit Commitment in effect from time to time, the Borrower may borrow under Section 2.01(b)(ii), prepay pursuant to Section 2.06, and reborrow under Section 2.01(b).

 

Section 2.02  Making the Advances .  (a)   Except as otherwise provided in Section 2.02(b), 2.03 or 2.21, each Borrowing shall be made on notice, given not later than 11:00 A.M. (New York City time) (or (5:30 P.M. (New York City time) in the case of any Base Rate Advance in the Initial Extension of Credit)) on the third Business Day prior to the date of the proposed Borrowing in the case of a Borrowing consisting of Eurodollar Rate Advances, or the first Business Day prior to the date of the proposed Borrowing in the case of a Borrowing consisting of Base Rate Advances, by the Borrower to the Administrative Agent, which shall give to each Lender prompt notice thereof by telex or telecopier.  Each such notice of a Borrowing (a “ Notice of Borrowing ”) shall be by telephone, confirmed promptly in writing, or telex or telecopier, in substantially the form of Exhibit B hereto, specifying therein the requested (i) date of such Borrowing, (ii) the Facility under which such Borrowing is to be made, (iii) Type of Advances comprising such Borrowing, (iv) aggregate amount of such Borrowing and (v) in the case of a Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for each such Advance.  Each Lender shall, before 11:00 A.M. (New York City time) on the date of such Borrowing, make available for the account of its Applicable Lending Office to the Administrative Agent at the Administrative Agent’s Account, in same day funds, such Lender’s ratable portion of such Borrowing in accordance with the respective Commitments of such Lender and the other Lenders.  After the Administrative Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Administrative Agent will make such funds available to the Borrower by crediting the Borrower’s Account or such other account as the Borrower shall request; provided , however , that, in the case of Non-rollup Revolving Credit Advances, the Administrative Agent shall first apply such funds to prepay ratably the aggregate principal amount of any Letter of Credit Advances outstanding on the date of such Borrowing, plus interest accrued and unpaid thereon to and as of such date.

 

(b)                                  Anything in subsection (a) above to the contrary notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for the initial Borrowing hereunder or for any Borrowing if the aggregate amount of such Borrowing is less than $5,000,000 or if the obligation of the Lenders to make Eurodollar Rate Advances shall then be suspended pursuant to Section 2.09 or 2.10, (ii) the Non-rollup Revolving Credit Advances may not be outstanding as part of more than 15 separate Borrowings and (iii) the Rollup Revolving Credit Advances may not be outstanding as part of more than 15 separate Borrowings.

 

(c)                                   Each Notice of Borrowing shall be irrevocable and binding on the Borrower.  In the case of any Borrowing that the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall indemnify each Lender against any loss, cost or expense incurred by such Lender as a result of any failure to fulfill on or before the date specified in such Notice of Borrowing for such Borrowing the applicable conditions set forth in Article III, including, without limitation, any loss (excluding loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Advance to be made by

 

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such Lender as part of such Borrowing when such Advance, as a result of such failure, is not made on such date.

 

(d)                                  Unless the Administrative Agent shall have received notice from any Lender prior to the date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s ratable portion of such Borrowing, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on the date of such Borrowing in accordance with subsection (a) of this Section 2.02 and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount.  If and to the extent that such Lender shall not have so made such ratable portion available to the Administrative Agent, such Lender and the Borrower severally agree to repay or pay to the Administrative Agent forthwith on demand such corresponding amount and to pay interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid or paid to the Administrative Agent, at (i) in the case of the Borrower, the interest rate applicable at such time under Section 2.07 to Advances comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate.  If such Lender shall pay to the Administrative Agent such corresponding amount, such amount so paid shall constitute such Lender’s Advance as part of such Borrowing for all purposes of this Agreement.

 

(e)                                   The failure of any Lender to make the Advance to be made by it shall not relieve any other Lender of its obligation, if any, hereunder to make its Advance or make available on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by it.

 

Section 2.03  Issuance of and Drawings and Reimbursement Under Non-rollup Letters of Credit .

 

(a)   The Letter of Credit Commitment .

 

(i)                                      Subject to the terms and conditions set forth herein, (A) each Issuing Bank agrees, in reliance upon the agreements of the other Non-rollup Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Effective Date until the Letter of Credit Expiration Date, to issue Non-rollup Letters of Credit for the account of the Borrower or any of its Subsidiaries, and to amend Non-rollup Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drafts under the Non-rollup Letters of Credit; and (B) the Non-rollup Revolving Credit Lenders severally agree to participate in Non-rollup Letters of Credit issued for the account of the Borrower or any of its Subsidiaries; provided that the Issuing Banks shall not be obligated to issue any Non-rollup Letter of Credit, and no Non-rollup Revolving Credit Lender shall be obligated to participate in any Non-rollup Letter of Credit, if as of the date of such issuance, (x) the Available Amount for all Letters of Credit issued by such Issuing Bank would exceed the lesser of the Letter of Credit Sublimit at such time and such Issuing Bank’s Letter of Credit Commitment at such time, (y) the Available Amount of such Non-rollup Letter of Credit would exceed the aggregate Unused Non-rollup Revolving Credit Commitments or (z) the Available Amount of such Non-rollup Letter of Credit would exceed the Availability at such time.  Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Non-rollup Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Non-rollup Letters of Credit to replace Non-rollup Letters of Credit that have expired or that have been drawn upon and reimbursed.

 

(ii)                                   No Issuing Bank shall be under any obligation to issue any Non-rollup Letter of Credit if:  (A) any order, judgment or decree of any governmental authority or arbitrator shall by its terms purport to enjoin or restrain such Issuing Bank from issuing such Non-rollup Letter of Credit, or any law applicable to such Issuing Bank or any request or directive (whether or not having the force of law) from

 

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any governmental authority with jurisdiction over such Issuing Bank shall prohibit, or request that such Issuing Bank refrain from, the issuance of letters of credit generally or such Non-rollup Letter of Credit in particular or shall impose upon such Issuing Bank any unreimbursed loss, cost or expense which such Issuing Bank in good faith deems material to it; (B) the expiry date of such requested Non-rollup Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Non-rollup Revolving Credit Lenders have approved such expiry date; (C) the issuance of such Non-rollup Letter of Credit would violate one or more policies of such Issuing Bank; or (D) such Non-rollup Letter of Credit is in an initial amount less than $100,000 (unless such Issuing Bank agrees otherwise), or is to be denominated in a currency other than U.S. dollars.

 

(iii)                                No Issuing Bank shall be under any obligation to amend any Non-rollup Letter of Credit if (A) such Issuing Bank would have no obligation at such time to issue such Non-rollup Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Non-rollup Letter of Credit does not accept the proposed amendment to such Non-rollup Letter of Credit.

 

(iv)                               Non-rollup Letters of Credit may be issued for the account of a Subsidiary that is not a Loan Party so long as such Subsidiary is primarily liable for its reimbursement obligations thereunder pursuant to a separate reimbursement agreement entered into between such Subsidiary and the applicable Issuing Bank, to the extent practicable (in the Issuing Bank’s sole discretion).

 

(v)                                  In addition to the other conditions precedent herein set forth, if any Non-rollup Lender becomes, and during the period it remains, a Defaulting Lender or a Potential Defaulting Lender, no Issuing Bank shall be required to issue any Non-rollup Letter of Credit or to amend any outstanding Non-rollup Letter of Credit to increase the face amount thereof, alter the drawing terms thereunder or extend the expiry date thereof, unless such Issuing Bank is satisfied that any exposure that would result therefrom is eliminated or fully covered by the Non-rollup Revolving Credit Commitments of the Non-Defaulting Lenders or by Cash Collateralization or a combination thereof reasonably satisfactory to such Issuing Bank.

 

(b)                                  Procedures for Issuance and Amendment of Non-rollup Letters of Credit .

 

(i)                                      Each Non-rollup Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the applicable Issuing Bank (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 the Borrower.  Such Letter of Credit Application must be received by the applicable Issuing Bank and the Administrative Agent not later than 11:00 a.m. at least two Business Days (or such later date and time as such Issuing Bank may agree in a particular instance in its 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 Non-rollup Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the applicable Issuing Bank: (A) the proposed issuance date of the requested Non-rollup Letter of Credit (which shall be a Business Day); (B) the amount 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; and (G) such other matters as such Issuing Bank may reasonably require.  In the case of a request for an amendment of any outstanding Non-rollup Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the applicable Issuing Bank (A) the Non-rollup Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as such Issuing Bank may reasonably require.

 

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(ii)                                   Promptly after receipt of any Letter of Credit Application for a Non-rollup Letter of Credit, the applicable Issuing Bank 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 Borrower and, if not, such Issuing Bank will provide the Administrative Agent with a copy thereof.  Upon receipt by such Issuing Bank of confirmation from the Administrative Agent that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, such Issuing Bank shall, on the requested date, issue a Non-rollup Letter of Credit for the account of the Borrower or enter into the applicable amendment, as the case may be, in each case in accordance with such Issuing Bank’s usual and customary business practices.  Immediately upon the issuance of each Non-rollup Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from such Issuing Bank a risk participation in such Non-rollup Letter of Credit in an amount equal to the product of such Lender’s Pro Rata Share in respect of the Non-rollup Revolving Credit Facility times the amount of such Non-rollup Letter of Credit.

 

(iii)                                Promptly after its delivery of any Non-rollup Letter of Credit or any amendment to a Non-rollup Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the applicable Issuing Bank will also deliver to the Borrower and the Administrative Agent a true and complete copy of such Non-rollup Letter of Credit or amendment.

 

(c)                                   Drawings and Reimbursements; Funding of Participations .

 

(i)                                      Upon receipt from the beneficiary of any Non-rollup Letter of Credit of any notice of a drawing under such Non-rollup Letter of Credit, the applicable Issuing Bank shall notify the Borrower and the Administrative Agent thereof.  Not later than 11:00 a.m. on the Business Day following the date of any payment by the applicable Issuing Bank under a Non-rollup Letter of Credit, so long as the Borrower has received notice of such drawing by 10:00 a.m. on such following Business Day (each such date, an “ Non-rollup Honor Date ”), the Borrower shall reimburse such Issuing Bank through the Administrative Agent in an amount equal to the amount of such drawing (together with interest thereon at the rate set forth in Section 2.07 for Non-rollup Revolving Credit Advances bearing interest at the Base Rate).  If the Borrower fails to so reimburse the applicable Issuing Bank by such time, the Administrative Agent shall promptly notify each Non-rollup Revolving Credit Lender of the Non-rollup Honor Date, the amount of the unreimbursed drawing (the “ Non-rollup Unreimbursed Amount ”), and the amount of such Non-rollup Revolving Credit Lender’s Pro Rata Share thereof.  In such event, the Borrower shall be deemed to have requested a Borrowing to be disbursed on the Non-rollup Honor Date in an amount equal to the Non-rollup Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Borrowings, but subject to the amount of the Unused Non-rollup Revolving Credit Commitments and the conditions set forth in Section 3.02 (other than the delivery of a Notice of Borrowing).  Any notice given by an Issuing Bank or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

 

(ii)                                   Each Non-rollup Revolving Credit Lender (including a Non-rollup Revolving Credit Lender acting as Issuing Bank) shall upon any notice pursuant to Section 2.03(c)(i) make funds available to the Administrative Agent for the account of the applicable Issuing Bank at the Administrative Agent’s Office in an amount equal to its Pro Rata Share of the Non-rollup Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Non-rollup Revolving Credit Lender that so makes funds available shall be deemed to have made a Non-rollup Letter of Credit Advance to the Borrower in such amount.  The Administrative Agent shall remit the funds so received to the applicable Issuing Bank.

 

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(iii)                                With respect to any Non-rollup Unreimbursed Amount that is not fully refinanced by a Borrowing because the conditions set forth in Section 3.02 cannot be satisfied or for any other reason, the Borrower shall be deemed to have incurred from the applicable Issuing Bank a Non-rollup Letter of Credit Advance in the amount of the Non-rollup Unreimbursed Amount that is not so refinanced, which Non-rollup Letter of Credit Advance shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate.  In such event, each Non-rollup Revolving Credit Lender’s payment to the Administrative Agent for the account of the applicable Issuing Bank pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such Non-rollup Letter of Credit Advance and shall constitute a Non-rollup Letter of Credit Advance from such Non-rollup Revolving Credit Lender in satisfaction of its participation obligation under this Section 2.03.

 

(iv)                               Until each Non-rollup Revolving Credit Lender funds its Non-rollup Revolving Credit Advance or Non-rollup Letter of Credit Advance pursuant to this Section 2.03(c) to reimburse the applicable Issuing Bank for any amount drawn under any Non-rollup Letter of Credit, interest in respect of such Non-rollup Revolving Credit Lender’s Pro Rata Share of such amount shall be solely for the account of such Issuing Bank.

 

(v)                                  Each Non-rollup Revolving Credit Lender’s obligation to make Non-rollup Letter of Credit Advances to reimburse the applicable Issuing Bank for amounts drawn under Non-rollup Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right which such Non-rollup Revolving Credit Lender may have against such Issuing Bank, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing.  No such making of a Non-rollup Letter of Credit Advance shall relieve or otherwise impair the obligation of the Borrower to reimburse the applicable Issuing Bank for the amount of any payment made by such Issuing Bank under any Non-rollup Letter of Credit, together with interest as provided herein.

 

(vi)                               If any Non-rollup Revolving Credit Lender fails to make available to the Administrative Agent for the account of the applicable Issuing Bank any amount required to be paid by such Non-rollup Revolving Credit Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii), such Issuing Bank shall be entitled to recover from such Non-rollup Revolving Credit Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the such Issuing Bank at a rate per annum equal to the Federal Funds Rate from time to time in effect.  A certificate of the applicable Issuing Bank submitted to any Non-rollup Revolving Credit Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.

 

(d)                                  Repayment of Participations .

 

(i)                                      At any time after any Issuing Bank has made a payment under any Non-rollup Letter of Credit and has received from any Non-rollup Revolving Credit Lender such Non-rollup Revolving Credit Lender’s Non-rollup Letter of Credit Advance in respect of such payment in accordance with Section 2.03(c), if the Administrative Agent receives for the account of the applicable Issuing Bank any payment in respect of the related Non-rollup Unreimbursed Amount or interest thereon (whether directly from the Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Non-rollup Revolving Credit Lender its Pro Rata Share thereof (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Non-rollup Revolving Credit Lender’s Non-rollup Letter of Credit Advance was outstanding) in the same funds as those received by the Administrative Agent.

 

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(ii)                                   If any payment received by the Administrative Agent for the account of the applicable Issuing Bank pursuant to Section 2.03(c)(i) is required to be returned under any circumstances (including pursuant to any settlement entered into by such Issuing Bank in its discretion), each Non-rollup Revolving Credit Lender shall pay to the Administrative Agent for the account of such Issuing Bank its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Non-rollup Revolving Credit Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect.

 

(e)                                   Obligations Absolute .   The obligation of the Borrower to reimburse any Issuing Bank for each drawing under each Non-rollup Letter of Credit and to repay each Non-rollup Letter of Credit Advance shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

 

(i)                                      any lack of validity or enforceability of such Non-rollup Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;

 

(ii)                                   the existence of any claim, counterclaim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of such Non-rollup Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), such Issuing Bank or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Non-rollup Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

 

(iii)                                any draft, demand, certificate or other document presented under such Non-rollup Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Non-rollup Letter of Credit;

 

(iv)                               any payment by the Issuing Bank under such Non-rollup Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Non-rollup Letter of Credit; or any payment made by such Issuing Bank under such Non-rollup Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Non-rollup Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or

 

(v)                                  any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower.

 

The Borrower shall promptly examine a copy of each Non-rollup Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s instructions or other irregularity, the Borrower will promptly notify the applicable Issuing Bank.  The Borrower shall be conclusively deemed to have waived any such claim against the applicable Issuing Bank and its correspondents unless such notice is given as aforesaid.

 

(f)                                     Role of Issuing Bank .   Each Non-rollup Revolving Credit Lender and the Borrower agree that, in paying any drawing under a Non-rollup Letter of Credit, no Issuing Bank shall have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Non-rollup Letter of Credit) or to ascertain or inquire as to the validity or

 

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accuracy of any such document or the authority of the Person executing or delivering any such document.  None of the Issuing Banks, any of their Related Parties nor any of the respective correspondents, participants or assignees of any Issuing Bank shall be liable to any Non-rollup Revolving Credit Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Non-rollup Revolving Credit Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Non-rollup Letter of Credit or Letter of Credit Application therefor.  The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Non-rollup Letter of Credit; provided , however , that this assumption is not intended to, and shall not, preclude the Borrower from pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement.  None of the Issuing Banks, any of their Related Parties, nor any of the respective correspondents, participants or assignees of any Issuing Bank, shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.03(e); provided , however , that anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against an Issuing Bank, any of its Related Parties, any of their respective correspondents, participants or assignees of such Issuing Bank or of their Related Parties, and they may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by such Issuing Bank’s, any such Related Party’s, or any of such respective correspondents, participants or assignees of such Issuing Bank or of any such Related Party’s willful misconduct or gross negligence or such Issuing Bank’s willful failure to pay under any Non-rollup Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Non-rollup Letter of Credit.  In furtherance and not in limitation of the foregoing, the applicable Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and such Issuing Bank shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Non-rollup Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

 

(g)                                  Cash Collateral; Defaulting Lenders .  (i) Upon the request of the Administrative Agent, if, as of the Letter of Credit Expiration Date, any Non-rollup Letter of Credit may for any reason remain outstanding and partially or wholly undrawn, the Borrower shall immediately Cash Collateralize the then Outstanding Amount of all Non-rollup L/C Obligations (in an amount equal to 105% of such Outstanding Amount determined as of the date of such Non-rollup Letter of Credit Advance or the Letter of Credit Expiration Date, as the case may be).  The Borrower hereby grants to the Administrative Agent, for the benefit of the Issuing Banks and the Non-rollup Revolving Credit Lenders, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing.  Such cash collateral shall be maintained in the L/C Cash Collateral Account.

 

(ii)                                   If any Lender becomes, and during the period it remains, a Defaulting Lender or a Potential Defaulting Lender, if any Non-rollup Letter of Credit is at the time outstanding, the Issuing Bank that issued such Non-rollup Letter of Credit may, by notice to the Borrower and such Defaulting Lender or Potential Defaulting Lender through the Administrative Agent, require the Borrower to Cash Collateralize the obligations of the Borrower to such Issuing Bank in respect of such Non-rollup Letter of Credit in amount equal to 105% of the aggregate amount of the Obligations (contingent or otherwise) of such Defaulting Lender or Potential Defaulting Lender in respect of such Non-rollup Letter of Credit, and the Borrower shall thereupon either Cash Collateralize such obligations or make other arrangements satisfactory to the Administrative Agent, and to such Issuing Bank, in their sole discretion to protect them against the risk of non-payment by such Defaulting Lender or Potential Defaulting Lender.

 

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(iii)                                In furtherance of the foregoing, if any Lender becomes, and during the period it remains, a Defaulting Lender or a Potential Defaulting Lender, each Issuing Bank is hereby authorized by the Borrower (which authorization is irrevocable and coupled with an interest) to give, in its discretion, through the Administrative Agent, Notices of Borrowing pursuant to Section 2.02 in such amounts and in such times as may be required to (A) reimburse an outstanding Non-rollup Unreimbursed Amount and/or (B) Cash Collateralize the Obligations of the Borrower in respect of outstanding Non-rollup Letters of Credit in an amount equal to 105% of the aggregate amount of the Obligations (contingent or otherwise) of such Defaulting Lender or Potential Defaulting Lender in respect of such Non-rollup Letters of Credit.

 

(h)                                  Applicability of ISP and UCP .   Unless otherwise expressly agreed by the applicable Issuing Bank and the Borrower when a Non-rollup Letter of Credit is issued, (i) the rules of the ISP shall apply to each standby Non-rollup Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce at the time of issuance shall apply to each commercial Non-rollup Letter of Credit.

 

(i)                                      Conflict with Letter of Credit Application .  In the event of any conflict between the terms hereof and the terms of any Letter of Credit Application, the terms hereof shall control.

 

Section 2.04  Repayment of Advances .  (a)  Term Advances .  The Borrower shall repay to the Administrative Agent for the ratable account of the Term Lenders on the Termination Date the aggregate outstanding principal amount of the Term Advances then outstanding together with exit fees then due and payable under Section 2.08(e).

 

(b)                                  Non-rollup Revolving Credit Advances .  The Borrower shall repay to the Administrative Agent for the ratable account of the Non-rollup Revolving Credit Lenders on the Termination Date the aggregate outstanding principal amount of the Non-rollup Revolving Credit Advances then outstanding.  In addition, on the Final Term Advance Date, the Borrower shall repay to the Administrative Agent for the ratable account of the Non-rollup Revolving Credit Lenders (other than those that are converting their Non-rollup Revolving Credit Advances into Term Advances pursuant to Section 2.01(a)) a principal amount of the Non-rollup Revolving Credit Advances owing to such Non-rollup Revolving Credit Lenders then outstanding such that after giving effect to such repayment, the amount of Non-rollup Revolving Credit Advances held by all Non-rollup Revolving Credit Lenders shall be ratable in accordance with their respective Non-rollup Revolving Credit Commitments.

 

(c)                                   Rollup Revolving Credit Advances .  The Borrower shall repay to the Administrative Agent for the ratable account of the Rollup Revolving Credit Lenders on the Termination Date the aggregate outstanding principal amount of the Rollup Revolving Credit Advances then outstanding.

 

(d)                                  Non-rollup Letter of Credit Advances .  The Borrower shall repay to the Administrative Agent for the account of the Issuing Banks and each Non-rollup Revolving Credit Lender that has made a Non-rollup Letter of Credit Advance the outstanding principal amount of each Non-rollup Letter of Credit Advance made by each of them on the earlier of (i) the date of demand therefor and (ii) the Termination Date.

 

(e)                                   Rollup Letter of Credit Advances .  The Borrower shall repay to the Administrative Agent for the account of the Issuing Banks and each Rollup Revolving Credit Lender that has made a Rollup Letter of Credit Advance the outstanding principal amount of each Rollup Letter of

 

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Credit Advance made by each of them on the earlier of (i) the date of demand therefor and (ii) the Termination Date.

 

Section 2.05  Termination, Reduction or Automatic Increase of Commitments .  (a)   Optional .  The Borrower may, upon at least three Business Days’ notice to the Administrative Agent, terminate in whole or reduce in part the unused portions of the Letter of Credit Sublimit or of the other Commitments (which shall be applied ratably to the Unused Term Commitments, Unused Non-rollup Revolving Credit Commitments and the Unused Rollup Revolving Credit Commitments (it being understood that such “unused” portion of any such Commitments shall include any portion that becomes unused as a result of any repayment occurring concurrently with such Commitment reduction or termination)); provided , however , that each partial reduction shall be in an aggregate amount of $10,000,000 or an integral multiple of $5,000,000 in excess thereof.

 

(b)                                  Mandatory .

 

(i)                                      Upon the making of the Term Advances pursuant to Section 2.01(a)(ii), the Term Commitments shall be automatically and permanently reduced to zero.

 

(ii)                                   The Non-rollup Revolving Credit Facility and the Rollup Revolving Credit Facility shall be automatically and permanently reduced on each date on which prepayment thereof is required to be made pursuant to Section 2.06(b)(i), by an amount equal to the Non-rollup Reduction Amount or the Rollup Reduction Amount, as applicable.

 

(iii)                                The Letter of Credit Sublimit shall be automatically and permanently reduced from time to time on the date of each reduction in the Non-rollup Revolving Credit Facility and the Rollup Revolving Credit Facility by the amount, if any, by which the amount of the Letter of Credit Sublimit exceeds the sum of the Non-rollup Revolving Credit Facility and the Rollup Revolving Credit Facility after giving effect to such reduction of the Non-rollup Revolving Credit Facility and the Rollup Revolving Credit Facility.

 

(c)                                   Application of Commitment Reductions .  Upon each reduction of the Rollup Revolving Credit Facility pursuant to this Section 2.05, the Rollup Revolving Credit Commitment of each of the Rollup Revolving Credit Lenders shall be reduced by such Rollup Revolving Credit Lender’s Pro Rata Share of the amount by which the Rollup Revolving Credit Facility is reduced in accordance with the Lenders’ respective Non-rollup Revolving Credit Commitments.  Upon each reduction of the Non-rollup Revolving Credit Facility pursuant to this Section 2.05, the Non-rollup Revolving Credit Commitment of each of the Non-rollup Revolving Credit Lenders shall be reduced by such Non-rollup Revolving Credit Lender’s Pro Rata Share of the amount by which the Non-rollup Revolving Credit Facility is reduced in accordance with the Lenders’ respective Non-rollup Revolving Credit Commitments; provided that this sentence shall not apply to any repayment of Non-rollup Revolving Credit Advances on the Final Term Advance Date pursuant to the second sentence of Section 2.04(b).

 

(d)                                  Rollup Revolving Credit Commitments.   Any reduction or termination of Rollup Revolving Credit Commitments pursuant to this Section 2.05 shall be made together with the payment of exit fees then due and payable under Section 2.08(c).

 

(e)                                   Non-rollup Revolving Credit Commitments .  Any reduction or termination of Non-rollup Revolving Credit Commitments pursuant to this Section 2.05 shall be made together with the payment of exit fees then due and payable under Section 2.08(e).

 

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(f)                                     Term Commitments .  Any reduction or termination of Term Commitments pursuant to Section 2.05(a) above shall be made together with the payment of exit fees then due and payable under Section 2.08(e).

 

(g)                                  Increase of Non-rollup Revolving Credit Commitments .  Upon the making of the Term Advances pursuant to Section 2.01(a)(ii), the Non-rollup Revolving Credit Commitments shall be automatically and permanently increased to an amount equal to $63,532,482 in accordance with Schedule I.

 

Section 2.06  Prepayments .  (a)   Optional .  The Borrower may, upon at least three Business Days’ notice in the case of Eurodollar Rate Advances and one Business Day’s notice in the case of Base Rate Advances, in each case to the Administrative Agent received not later than 11:00 A.M. (New York, New York time) stating the proposed date and aggregate principal amount of the prepayment, and if such notice is given the Borrower shall, prepay the outstanding aggregate principal amount of Advances, in whole or ratably in part, together with accrued interest to the date of such prepayment on the aggregate principal amount prepaid; provided , however , that each partial prepayment shall be (i) in the case of Term Advances, in an aggregate principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof or, if less, the aggregate outstanding principal amount of any Advance and (ii) in the case of Non-rollup Revolving Credit Advances and in the case of Rollup Revolving Credit Advances, in an aggregate principal amount of $1,000,000 or an integral multiple of $500,000 in excess thereof or, if less, the aggregate outstanding principal amount of any Advance.  Any prepayment of Advances pursuant to this Section 2.06(a) shall be applied to any one or more of the Facilities as directed by the Borrower.

 

(b)                                  Mandatory .

 

(i)                                      The Borrower shall, on the Business Day following the date of receipt of any Net Cash Proceeds by any Loan Party or any of its Subsidiaries, prepay an aggregate principal amount of the Advances equal to such Net Cash Proceeds; provided , however , that (A) the Borrower shall not be required to make any prepayment hereunder with Net Cash Proceeds unless and until the aggregate amount of all such Net Cash Proceeds (excluding Net Cash Proceeds from Extraordinary Receipts) that have not theretofore been applied to prepay the Advances pursuant to this Section 2.06(b)(i) exceeds $5,000,000 (at such time the Borrower shall be required to make a prepayment hereunder with all such excess Net Cash Proceeds except to the extent such prepayment is not required under clause (B), (C) or (D) of this proviso), (B) to the extent the aggregate amount of all Net Cash Proceeds (excluding Net Cash Proceeds from Extraordinary Receipts) received by the Loan Parties and their Subsidiaries shall exceed $10,000,000, only 75% of any amount of such excess amount of Net Cash Proceeds received shall be required to be applied to prepayment hereunder, (C) in the case of Net Cash Proceeds that are Extraordinary Receipts in respect of any casualty or condemnation event (“ Extraordinary Receipts Proceeds ”), to the extent such Extraordinary Receipts Proceeds are used to repair, restore or replace the assets that are the subject of such event in substantially the same location promptly after the receipt of such Extraordinary Receipts Proceeds by a Loan Party or any of its Subsidiaries, no such Extraordinary Receipts Proceeds shall be required to be applied to any prepayment hereunder, and (D) in the case of Extraordinary Receipts Proceeds received with respect to a casualty or condemnation event in respect of Inventory, no such Extraordinary Receipts Proceeds shall be required to be applied to any prepayment hereunder.  Each such prepayment shall be applied first ratably to the outstanding Term Advances, second ratably to the outstanding Non-rollup Revolving Credit Facility as set forth in clause (iv) below and the Rollup Revolving Credit Facility as set forth in clause (v) below, and third , if required under Section 2.03(g) or 2.21(g), deposited in the L/C Cash Collateral Account.

 

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(ii)                                   The Borrower shall, on each Business Day, if applicable, prepay an aggregate principal amount of the Non-rollup Revolving Credit Advances, the Rollup Revolving Credit Advances, the Non-rollup Letter of Credit Advances or the Rollup Letter of Credit Advances or deposit an amount in the L/C Collateral Account in an amount equal to the amount by which (A) the sum of (x) the Non-rollup Revolving Credit Advances, the Rollup Revolving Credit Advances, the Non-rollup Letter of Credit Advances and the Rollup Letter of Credit Advances then outstanding plus (y) the aggregate Available Amount of all Letters of Credit then outstanding exceeds (B) the lesser of (x) the sum of the aggregate Non-rollup Revolving Credit Commitments and the Rollup Revolving Credit Commitments and (y) (1) the Borrowing Base minus (2) the aggregate principal amount of the Term Advances then outstanding.

 

(iii)                                The Borrower shall, on each Business Day, if applicable, pay to the Administrative Agent for deposit in the L/C Cash Collateral Account an amount sufficient to cause the aggregate amount on deposit in such L/C Cash Collateral Account to equal the amount by which the aggregate Available Amount of all Letters of Credit then outstanding exceeds the Letter of Credit Sublimit on such Business Day.

 

(iv)                               Prepayments of the Non-rollup Revolving Credit Facility made pursuant to clauses (i) and (ii) above shall be first applied to prepay Non-rollup Letter of Credit Advances then outstanding, if any, until such Advances are paid in full, second applied ratably to prepay Non-rollup Revolving Credit Advances then outstanding, if any, until such Advances are paid in full and third , if required under Section 2.03(g), deposited in the L/C Cash Collateral Account; and, in the case of any prepayment of the Non-rollup Revolving Credit Facility pursuant to clause (i) above, the amount remaining, if any, from the Non-rollup Revolving Credit Facility’s ratable portion of such Net Cash Proceeds after the prepayment of the Non-rollup Letter of Credit Advances and the Non-rollup Revolving Credit Advances then outstanding and any required Cash Collateralization of Non-rollup Letters of Credit then outstanding (the sum of such prepayment amounts, cash collateralization amounts and remaining amounts being referred to herein as the “ Non-rollup Reduction Amount ”) may be retained by the Borrower for use in its business and operations.  Upon the drawing of any Non-rollup Letter of Credit for which funds are on deposit in the L/C Cash Collateral Account, such funds shall be applied to reimburse the applicable Issuing Bank or Non-rollup Revolving Credit Lenders, as applicable.

 

(v)                                  Prepayments of the Rollup Revolving Credit Facility made pursuant to clauses (i) and (ii) above shall be first applied to prepay Rollup Letter of Credit Advances then outstanding, if any, until such Advances are paid in full, second applied ratably to prepay Rollup Revolving Credit Advances then outstanding, if any, until such Advances are paid in full and third , if required under Section 2.21(g), deposited in the L/C Cash Collateral Account; and, in the case of any prepayment of the Rollup Revolving Credit Facility pursuant to clause (i) above, the amount remaining, if any, from the Rollup Revolving Credit Facility’s ratable portion of such Net Cash Proceeds after the prepayment of the Rollup Letter of Credit Advances and the Rollup Revolving Credit Advances then outstanding and any required Cash Collateralization of Rollup Letters of Credit then outstanding (the sum of such prepayment amounts, cash collateralization amounts and remaining amounts being referred to herein as the “ Rollup Reduction Amount ”) may be retained by the Borrower for use in its business and operations.  Upon the drawing of any Rollup Letter of Credit for which funds are on deposit in the L/C Cash Collateral Account, such funds shall be applied to reimburse the applicable Issuing Bank or Rollup Revolving Credit Lenders, as applicable.

 

(vi)                               All prepayments under this subsection (b) shall be made together with accrued interest to the date of such prepayment on the principal amount prepaid.

 

(vii)                            All prepayments of Term Advances under this Section 2.06 shall be made together with the payment of exit fees then due and payable under Section 2.08(e).

 

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Section 2.07  Interest .  (a)   Scheduled Interest .  The Borrower shall pay interest on each Term Advance, each Non-rollup Revolving Credit Advance and each Rollup Revolving Credit Advance owing to each Lender from the date of such Term Advance, Non-rollup Revolving Credit Advance and Rollup Revolving Credit Advance until such principal amount shall be paid in full, at the following rates per annum:

 

(i)                                      Base Rate Advances .  During such periods as such Advance is a Base Rate Advance, a rate per annum equal at all times to the sum of (A) the Base Rate in effect from time to time plus (B) the Applicable Margin in effect from time to time, payable in arrears monthly on the first Business Day of each month during such periods and on the date such Base Rate Advance shall be Converted or paid in full.

 

(ii)                                   Eurodollar Rate Advances .  During such periods as such Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during each Interest Period for such Advance to the sum of (A) the Eurodollar Rate for such Interest Period for such Advance plus (B) the Applicable Margin in effect on the first day of such Interest Period, payable in arrears on the last Business Day of such Interest Period and, if such Interest Period has a duration of more than one month, on the first Business Day of each month that occurs during such Interest Period every month from the first day of such Interest Period and on the date such Eurodollar Rate Advance shall be Converted or paid in full.

 

(b)                                  Default Interest .  Upon the occurrence and during the continuance of an Event of Default the Borrower shall pay interest on (i) the unpaid principal amount of each Advance owing to each Lender (whether or not due), payable in arrears on the dates referred to in clause (a) above and on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on such Advance pursuant to clause (a) and (ii) to the fullest extent permitted by law, the amount of any interest, fee or other amount payable hereunder that is not paid when due, from the date such amount shall be due until such amount shall be paid in full, payable in arrears on the date such amount shall be paid in full and on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on Advances pursuant to clause (a)(i) above.

 

(c)                                   Notice of Interest Rate .  Promptly after receipt of a Notice of Borrowing pursuant to Section 2.02(a), the Administrative Agent shall give notice to the Borrower and each Lender of the interest rate determined by the Administrative Agent for purposes of clause (a) above.

 

Section 2.08  Fees . (a)   Commitment Fees .  (i) The Borrower shall pay to the Administrative Agent for the account of the Non-rollup Revolving Credit Lenders a commitment fee, from the date hereof in the case of each such Initial Lender and from the effective date specified in the Assignment and Acceptance pursuant to which it became a Lender in the case of each other such Lender until the Termination Date, payable in arrears on the Effective Date, thereafter monthly on the first day of each month and on the Termination Date, at the rate of 1.5% per annum on the average daily unused portion of the Unused Non-rollup Revolving Credit Commitment of such Lender; provided , however , that no commitment fee shall accrue on any of the Commitments of a Defaulting Lender so long as such Lender shall be a Defaulting Lender.

 

(ii) The Borrower shall pay to the Administrative Agent for the account of the Rollup Revolving Credit Lenders a commitment fee, from the Final Term Advance Date in the case of each such Initial Lender and (if such date is later than the Final Term Advance Date) the effective date specified in the Assignment and Acceptance pursuant to which it became a Lender in the case of each other such Lender until the Termination Date, payable in arrears on the Effective Date, thereafter monthly on the first day of each month and on the Termination Date, at the rate of 1.5% per annum on the average daily

 

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unused portion of the Unused Rollup Revolving Credit Commitment of such Lender; provided , however , that no commitment fee shall accrue on any of the Commitments of a Defaulting Lender so long as such Lender shall be a Defaulting Lender.

 

(b)                                  Letter of Credit Fees, Etc .

 

(i)                                      The Borrower shall pay to the Administrative Agent for the account of each Non-rollup Revolving Credit Lender a commission, payable in arrears on the first Business Day of each month, on the earliest to occur of the full drawing, expiration, termination or cancellation of any such Non-rollup Letter of Credit and on the Termination Date, on such Non-rollup Revolving Credit Lender’s Pro Rata Share of the average daily aggregate Available Amount during such month of all Non-rollup Letters of Credit outstanding from time to time during such month at a rate per annum equal to the Applicable Margin for Eurodollar Rate Advances under the Non-rollup Revolving Credit Facility; provided , however , that no such commission shall accrue on any of the Non-rollup Revolving Credit Commitments of a Defaulting Lender so long as such Lender shall be a Defaulting Lender.

 

(ii)                                   The Borrower shall pay to the Administrative Agent for the account of each Rollup Revolving Credit Lender a commission, payable in arrears on the first Business Day of each month, on the earliest to occur of the full drawing, expiration, termination or cancellation of any such Rollup Letter of Credit and on the Termination Date, on such Rollup Revolving Credit Lender’s Pro Rata Share of the average daily aggregate Available Amount during such month of all Rollup Letters of Credit outstanding from time to time during such month at a rate per annum equal to the Applicable Margin for Eurodollar Rate Advances under the Rollup Revolving Credit Facility; provided , however , that no such commission shall accrue on any of the Rollup Revolving Credit Commitments of a Defaulting Lender so long as such Lender shall be a Defaulting Lender.

 

(iii)                                The Borrower shall pay to each Issuing Bank, for its own account, (A) a fronting fee, payable in arrears on the first Business Day of each month and on the Termination Date, on the average daily Available Amount during such month of all Letters of Credit issued by such Issuing Bank, at the rate of 0.25% per annum and (B) the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of such Issuing Bank.

 

(c)                                   Exit Fees for Rollup Revolving Credit Lenders .  (i) Concurrently with any reduction or termination of any amount of the Rollup Revolving Credit Commitments pursuant to Section 2.05, the Borrower shall pay to the Administrative Agent for the account of the Rollup Revolving Credit Lenders an exit fee equal to 2% of such amount so reduced or terminated and (ii) without duplication of the fees in clause (i), immediately upon the substantial consummation of a Reorganization Plan in any of the Cases, the Borrower shall pay to the Administrative Agent for the account of the Rollup Revolving Credit Lenders an exit fee equal to 2% of the aggregate outstanding principal amount of the Rollup Revolving Credit Advances; provided that the aggregate amount of exit fees payable under this Section 2.08(c) shall not exceed 2% of the aggregate principal amount of Rollup Revolving Credit Advances used to prepay the Pre-Petition Secured Indebtedness.

 

(d)                                  Initial Lender Fees .  The Borrower shall pay to the Administrative Agent for the account of the Initial Lenders (or their respective Affiliates) (i) that are Term Lenders an upfront fee equal to 3% of such Lenders’ Term Commitments on the Effective Date, (ii) that are Non-rollup Revolving Credit Lenders an upfront fee equal to 3% of such Lenders’ Non-rollup Revolving Credit Commitments on the Effective Date and (iii) such other fees as may be from time to time agreed among the Borrower and the Initial Lenders (or their respective Affiliates).

 

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(e)                                   Exit Fees for Term Lenders and Non-rollup Revolving Credit Lenders .  (i)(x) Concurrently with any reduction or termination of any amount of the Non-rollup Revolving Credit Commitments pursuant to Section 2.05, the Borrower shall pay to the Administrative Agent for the account of the Non-rollup Revolving Credit Lenders an exit fee equal to 3% of such amount so reduced or terminated and (y) without duplication of the fees in clause (x), immediately upon the substantial consummation of a Reorganization Plan in any of the Cases, the Borrower shall pay to the Administrative Agent for the account of the Non-rollup Revolving Credit Lenders an exit fee equal to 3% of the aggregate outstanding principal amount of the Non-rollup Revolving Credit Advances.

 

(ii)                                   (x) Concurrently with any repayment or prepayment of any amount of the Term Advances pursuant to Sections 2.04(a) or 2.06 or any reduction or termination of Term Commitments under Section 2.05(a), the Borrower shall pay to the Administrative Agent for the account of the Term Lenders an exit fee equal to 3% of such amount so repaid or prepaid and (y) without duplication of the fees in clause (x), immediately upon the substantial consummation of a Reorganization Plan in any of the Cases, the Borrower shall pay to the Administrative Agent for the account of the Term Lenders an exit fee equal to 3% of the aggregate outstanding principal amount of the Term Advances.

 

Section 2.09  Conversion of Advances .   (a)    Optional .  The Borrower may on any Business Day, upon notice given to the Administrative Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Conversion (or the Business Day prior to the date of the proposed Conversion, in the case of a Conversion of a Eurodollar Rate Advance to a Base Rate Advance) and subject to the provisions of Section 2.10, Convert all or any portion of the Advances of one Type comprising the same Borrowing into Advances of the other Type; provided , however , that any Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made only on the last day of an Interest Period for such Eurodollar Rate Advances, any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in an amount not less than the minimum amount specified in Section 2.02(c), no Conversion of any Advances shall result in more separate Borrowings than permitted under Section 2.02(c) and each Conversion of Advances comprising part of the same Borrowing shall be made ratably among the Lenders in accordance with their Commitments.  Each such notice of Conversion shall, within the restrictions specified above, specify (i) the date of such Conversion, (ii) the Advances to be Converted and (iii) if such Conversion is into Eurodollar Rate Advances, the duration of the initial Interest Period for such Advances.  Each notice of Conversion shall be irrevocable and binding on the Borrower.

 

(b)                                  Mandatory .

 

(i)                                      On the date on which the aggregate unpaid principal amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment or prepayment or otherwise, to less than $5,000,000, such Advances shall, at the end of the applicable Interest Period, automatically Convert into Base Rate Advances.

 

(ii)                                   If the Borrower shall fail to select the duration of any Interest Period for any Eurodollar Rate Advances in accordance with the provisions contained in the definition of “Interest Period” in Section 1.01, the Administrative Agent will forthwith so notify the Borrower and the Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance.

 

(iii)                                Upon the occurrence and during the continuance of any Event of Default, (x) each Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance and (y) the obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended.

 

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Section 2.10  Increased Costs, Etc .  (a)  If, due to either (i) the introduction of or any change in or in the interpretation of any law or regulation or (ii) the compliance with any guideline or request from any central bank or other governmental authority (whether or not having the force of law), there shall be any increase in the cost to any Lender Party of agreeing to make or of making, funding or maintaining Eurodollar Rate Advances or of agreeing to issue or of issuing or maintaining or participating in Letters of Credit or of agreeing to make or of making or maintaining Letter of Credit Advances (excluding, for purposes of this Section 2.10, any such increased costs resulting from (x) Taxes or Other Taxes (as to which Section 2.12 shall govern) and (y) changes in the basis of taxation of overall net income or overall gross income by the United States or by the foreign jurisdiction or state under the laws of which such Lender Party is organized or has its Applicable Lending Office or any political subdivision thereof), then the Borrower shall from time to time, upon demand by such Lender Party (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Lender Party additional amounts sufficient to compensate such Lender Party for such increased cost.  A certificate as to the amount of such increased cost, submitted to the Borrower by such Lender Party, shall be conclusive and binding for all purposes, absent manifest error.

 

(b)                                  If any Lender Party determines that compliance with any law or regulation or any guideline or request from any central bank or other governmental authority (whether or not having the force of law) affects or would affect the amount of capital required or expected to be maintained by such Lender Party or any corporation controlling such Lender Party and that the amount of such capital is increased by or based upon the existence of such Lender Party’s commitment to lend or to issue or participate in Letters of Credit hereunder and other commitments of such type or the issuance or maintenance of or participation in the Letters of Credit (or similar contingent obligations), then, upon demand by such Lender Party or such corporation (with a copy of such demand to the Administrative Agent), the Borrower shall pay to the Administrative Agent for the account of such Lender Party, from time to time as specified by such Lender Party, additional amounts sufficient to compensate such Lender Party in the light of such circumstances, to the extent that such Lender Party reasonably determines such increase in capital to be allocable to the existence of such Lender Party’s commitment to lend or to issue or participate in Letters of Credit hereunder or to the issuance or maintenance of or participation in any Letters of Credit.  A certificate as to such amounts submitted to the Borrower by such Lender Party shall be conclusive and binding for all purposes, absent manifest error.

 

(c)                                   If, with respect to any Eurodollar Rate Advances, the Required Lenders notify the Administrative Agent that the Eurodollar Rate for any Interest Period for such Advances will not adequately reflect the cost to such Lenders of making, funding or maintaining their Eurodollar Rate Advances for such Interest Period, the Administrative Agent shall forthwith so notify the Borrower and the Lenders, whereupon (i) each such Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended until the Administrative Agent shall notify the Borrower that such Lenders have determined that the circumstances causing such suspension no longer exist.

 

(d)                                  Notwithstanding any other provision of this Agreement, if the introduction of or any change in or in the interpretation of any law or regulation shall make it unlawful, or any central bank or other governmental authority shall assert that it is unlawful, for any Lender or its Eurodollar Lending Office to perform its obligations hereunder to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder, then, on notice thereof and demand therefor by such Lender to the Borrower through the Administrative Agent, (i) each Eurodollar Rate Advance will automatically, upon such demand, Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended until the

 

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Administrative Agent shall notify the Borrower that such Lender has determined that the circumstances causing such suspension no longer exist.

 

Section 2.11  Payments and Computations .  (a)  The Borrower shall make each payment hereunder and under the Notes, irrespective of any right of counterclaim or set-off (except as otherwise provided in Section 2.15), not later than 11:00 A.M. (New York, New York time) on the day when due (or, in the case of payments made by a Guarantor pursuant to Section 8.01, on the date of demand therefor) in U.S. dollars to the Administrative Agent at the Administrative Agent’s Account in same day funds.  The Administrative Agent will promptly thereafter cause like funds to be distributed (i) if such payment by the Borrower is in respect of principal, interest, commitment fees or any other Obligation then payable hereunder and under the Notes to more than one Lender Party, to such Lender Parties for the account of their respective Applicable Lending Offices ratably in accordance with the amounts of such respective Obligations then payable to such Lender Parties (except as set forth in the second sentence of Section 2.04(b)) and (ii) if such payment by the Borrower is in respect of any Obligation then payable hereunder to one Lender Party, to such Lender Party for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement.  Upon its acceptance of an Assignment and Acceptance and recording of the information contained therein in the Register pursuant to Section 10.07(d), from and after the effective date of such Assignment and Acceptance, the Administrative Agent shall make all payments hereunder and under the Notes in respect of the interest assigned thereby to the Lender Party assignee thereunder, and the parties to such Assignment and Acceptance shall make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves.

 

(b)                                  If the Administrative Agent receives funds for application to the Obligations under the Loan Documents under circumstances for which the Loan Documents do not specify the Advances to which, or the manner in which, such funds are to be applied, the Administrative Agent may, but shall not be obligated to, elect to distribute such funds to each Lender Party ratably in accordance with such Lender Party’s proportionate share of the principal amount of all outstanding Advances and the Available Amount of all Letters of Credit then outstanding, in repayment or prepayment of such of the outstanding Advances or other Obligations owed to such Lender Party, and for application to such principal installments, as the Administrative Agent shall direct.

 

(c)                                   The Bor