TABLE OF CONTENTS

				Page
SECTION 1. DEFINITIONS				1
	1.1.	Defined Terms		1
	1.2.	Other Definitional Provisions		20
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS				20
	2.1.	Revolving Credit Commitments		20
	2.2.	Procedure for Revolving Credit Borrowing		21
	2.3.	Repayment of Revolving Credit Loans; Evidence of Debt		21
	2.4.	Termination, Reduction and Increase of Revolving Credit Commitments		22
	2.5.	Swing Line Commitment		24
SECTION 3. LETTERS OF CREDIT				26
	3.1.	Letters of Credit		26
	3.2.	Procedure for Issuance of Letters of Credit		27
	3.3.	Participating Interests		27
	3.4.	Payments		28
	3.5.	Further Assurances		28
	3.6.	Obligations Absolute		28
	3.7.	Letter of Credit Application		29
	3.8.	Purpose of Letters of Credit		29
SECTION 4. GENERAL PROVISIONS				29
	4.1.	Interest Rates and Payment Dates		29
	4.2.	Conversion and Continuation Options		30
	4.3.	Minimum Amounts of Tranches		31
	4.4.	Optional and Mandatory Prepayments		31
	4.5.	Commitment Fees; Other Fees		32
	4.6.	Computation of Interest and Fees		33
	4.7.	Inability to Determine Interest Rate		33
	4.8.	Pro Rata Treatment and Payments		34
	4.9.	Illegality		35
	4.10.	Increased Costs		36
	4.11.	Indemnity		37
	4.12.	Taxes		38
	4.13.	Use of Proceeds		39
	4.14.	Change in Lending Office; Replacement of Lender		40

 

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	4.15.	Break Funding Payments	40
SECTION 5. REPRESENTATIONS AND WARRANTIES			41
	5.1.	Financial Condition; Accuracy of Public Information	41
	5.2.	No Change	41
	5.3.	Corporate Existence; Compliance with Law	41
	5.4.	Corporate Power; Authorization; Enforceable Obligations	42
	5.5.	No Legal Bar	42
	5.6.	No Material Litigation	42
	5.7.	No Default	42
	5.8.	Ownership of Property; Liens	43
	5.9.	Intellectual Property	43
	5.10.	Taxes	43
	5.11.	Federal Regulations	44
	5.12.	ERISA	44
	5.13.	Investment Company Act; Other Regulations	44
	5.14.	Subsidiaries	44
	5.15.	Environmental Matters	44
	5.16.	Solvency	45
	5.17.	Security Documents	45
	5.18.	Insurance	46
	5.19.	Affiliate Transactions	46
	5.20.	Accuracy of Information	46
	5.21.	OFAC.	47
SECTION 6. CONDITIONS PRECEDENT			47
	6.1.	Conditions to Closing Date	47
	6.2.	Conditions to Each Extension of Credit	50
SECTION 7. AFFIRMATIVE COVENANTS			51
	7.1.	Financial Statements	51
	7.2.	Certificates; Other Information	52
	7.3.	Payment of Obligations	53
	7.4.	Maintenance of Existence	53
	7.5.	Maintenance of Property; Insurance	53
	7.6.	Inspection of Property; Books and Records; Discussions	53
	7.7.	Notices	54
	7.8.	Environmental Laws	54
	7.9.	Additional Subsidiaries; Additional Collateral	55
	7.10.	Post-Closing Obligations	56

 

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SECTION 8. NEGATIVE COVENANTS			57
	8.1.	Financial Condition Covenants	57
	8.2.	Limitation on Indebtedness	57
	8.3.	Limitation on Liens	59
	8.4.	Limitation on Guarantee Obligations	60
	8.5.	Limitation on Fundamental Changes	61
	8.6.	Limitation on Sale of Assets	62
	8.7.	Limitation on Dividends and Other Restricted Payments	62
	8.8.	Limitation on Capital Expenditures	62
	8.9.	Limitation on Investments, Loans and Advances	63
	8.10.	Limitation on Optional Payments and Modifications of Debt Instruments	64
	8.11.	Limitation on Transactions with Affiliates	65
	8.12.	Limitation on Sales and Leasebacks	65
	8.13.	Limitation on Changes in Fiscal Year	65
	8.14.	Limitation on Negative Pledge Clauses	65
	8.15.	Limitation on Lines of Business	66
	8.16.	Hedging Agreements	66
SECTION 9. EVENTS OF DEFAULT			66
SECTION 10. THE AGENTS AND THE ARRANGER			69
	10.1.	Appointment	69
	10.2.	Delegation of Duties	70
	10.3.	Exculpatory Provisions	70
	10.4.	Reliance by Agents	70
	10.5.	Notice of Default	71
	10.6.	Non-Reliance on Agents and Other Lenders	71
	10.7.	Indemnification	72
	10.8.	Agent in Its Individual Capacity	72
	10.9.	Successor Agents	72
	10.10.	Issuing Lender	73
SECTION 11. MISCELLANEOUS			73
	11.1.	Amendments and Waivers	73
	11.2.	Notices	74
	11.3.	No Waiver; Cumulative Remedies	76
	11.4.	Survival	76
	11.5.	Payment of Expenses and Taxes	76
	11.6.	Successors and Assigns; Participation and Assignments	77
	11.7.	Adjustments; Set-off	80
	11.8.	Counterparts	81
	11.9.	Severability	81

 

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	11.10.	Integration	81
	11.11.	GOVERNING LAW	81
	11.12.	Submission to Jurisdiction; Waivers	81
	11.13.	Acknowledgements	82
	11.14.	WAIVERS OF JURY TRIAL	82
	11.15.	Confidentiality	82
	11.16.	Designation of Senior Indebtedness	83
	11.17.	USA PATRIOT ACT	83

 

SCHEDULES :
	I	Revolving Commitments; Addresses
	II	Domestic Subsidiaries; Foreign Subsidiaries
	III	Existing Letters of Credit
	5.8	Real Property Owned and Leased
	5.10	Tax Filings and Payments
	5.18	Insurance
	7.10	Accounts
	8.2	Existing Indebtedness
	8.3	Existing Liens
	8.4	Existing Guarantee Obligations
	8.9(e)	Existing Investments
EXHIBITS :
	A-1	Form of Revolving Credit Note
	A-2	Form of Swing Line Note
	B	Form of Guarantee and Collateral Agreement
	C	Form of Swing Line Loan Participation Certificate
	D	Form of Assignment and Acceptance
	E-1	Form of Opinion of Milbank, Tweed, Hadley & McCloy LLP
	E-2	Form of Opinion of Irene Fisher, General Counsel to the Borrower
	F	Form of Closing Certificate
	G	Form of Administrative Questionnaire
	H	Form of Landlord’s Lien Waiver, Access Agreement and Consent
	I	Form of Revolving Increase Supplement

 

 

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CREDIT AGREEMENT, dated as of November 3, 2006 (this “ Credit Agreement ”) among NBTY, INC., a Delaware corporation (the “ Borrower ”), the several banks and other financial institutions from time to time parties hereto as lenders (the “ Lenders ”), JPMORGAN CHASE BANK, N.A., a national banking association organized and existing under the laws of the United States of America, as administrative agent and collateral agent for the Lenders hereunder (in such capacities, the “ Administrative Agent ” and the “ Collateral Agent ,” respectively), and BANK OF AMERICA, N.A., BNP PARIBAS, CITIBANK, N.A., and HSBC BANK USA, NATIONAL ASSOCIATION, each a national banking association organized and existing under the laws of the United States of America, as co-syndication agents for the Lenders hereunder (in such capacity, each a “ Co-Syndication Agent ”, and collectively, with the Administrative Agent and the Collateral Agent, the “ Agents ”).

W I T N E S S E T H :

WHEREAS, the Borrower is party to that certain credit agreement dated as of July 24, 2003, as amended and restated on December 19, 2003, as further amended and restated on August 1, 2005, and as amended from time to time to the date hereof among the Borrower, the several lenders from time to time party thereto, JPMorgan Chase Bank, N.A. as administrative agent and collateral agent and Bank of America, N.A. as syndication agent (the “ Existing Credit Agreement ”);

WHEREAS, the Borrower desires that the Lenders extend credit in the form of revolving credit loans in an aggregate principal amount of up to $325,000,000 on and after the Closing Date (x) for the purpose of repaying amounts outstanding under, and terminating any commitments and all other obligations under, the Existing Credit Agreement on the Closing Date (the “ Refinancing ”) and paying any fees, commissions and expenses in connection therewith, (y) for working capital and other general corporate purposes of the Borrower and its Subsidiaries, and (z) any Acquisitions consummated after the Closing Date;

WHEREAS, the Lenders are willing to enter into this Agreement on the terms and conditions hereof;

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

SECTION 1.  DEFINITIONS

1.1.   Defined Terms .  As used in this Agreement, the following terms shall have the following meanings:

“ ABR Loans ”:  Loans the rate of interest applicable to which is based upon the Alternate Base Rate.

 

“ Acquisition ”:  any transaction or series of related transactions by which the Borrower or any of its Subsidiaries (a) acquires any going business or all or substantially all of the assets of any Person, whether through purchase of assets, merger or otherwise or (b) directly or indirectly acquires (in one transaction or in a series of related transactions) at least (i) a majority (in number of votes) of the Capital Stock having ordinary voting power for the election of directors (or other managers) of any Person or (ii) a majority of the ownership interests in any Person.

“ Administrative Agent ”:  as defined in the preamble hereto, and shall include any successor appointed in accordance with subsection 10.9.

“ Administrative Questionnaire ”:  an administrative questionnaire substantially in the form attached hereto as Exhibit G .

“ Affiliate ”:  of any Person, (a) any other Person (other than a wholly owned Subsidiary of such Person) which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person or (b) any other Person who is a director or officer of (i) such Person, (ii) any Subsidiary of such Person or (iii) any Person described in clause (a) above.  For purposes of this definition, a Person shall be deemed to be “controlled by” such other Person if such other Person possesses, directly or indirectly, power either to (A) vote 10% or more of the securities having ordinary voting power for the election of directors of such first Person or (B) direct or cause the direction of the management and policies of such first Person whether by contract or otherwise.

“ Agents ”:  as defined in the preamble hereto.

“ Aggregate Available Revolving Credit Commitments ”:  as at any date of determination with respect to all Lenders, the Available Revolving Credit Commitments of all Lenders on such date.

“ Aggregate Revolving Credit Commitments ”:  the aggregate amount of the Revolving Credit Commitments of all the Lenders.

“ Aggregate Revolving Credit Outstanding ”:  as at any date of determination with respect to any Lender, the sum of (a) the aggregate unpaid principal amount of such Lender’s Revolving Credit Loans on such date and (b) such Lender’s Revolving Credit Commitment Percentage of the aggregate Letter of Credit Obligations and Swing Line Loans on such date.

“ Agreement ”:  this Credit Agreement, as the same may be amended, supplemented or otherwise modified from time to time.

“ Alternate Base Rate ”:  for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus ½ of 1%.  Any change in the Alternate Base Rate due to a change in the Prime

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Rate or the Federal Funds Effective Rate shall be effective from and including the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

“ Applicable Margin ”:  for Revolving Credit Loans and for purposes of subsection 4.5(a), the rate per annum set forth under the relevant column heading below based on the ratio of Consolidated Indebtedness to Consolidated EBITDA, as most recently determined in accordance with subsection 7.2(b), for any fiscal quarter of the Borrower:

 

Up to and including the date of delivery of financial statements and related compliance certificate of the Borrower for the first fiscal quarter ending after the Closing Date in accordance with subsection 7.1, the Applicable Margin for Revolving Loans shall be 1.00% per annum for Eurodollar Loans and 0.00% per annum for ABR Loans and the commitment fee shall be 0.20%.

If and in the event the financial statements required to be delivered pursuant to subsection 7.1(a) or 7.1(b), as applicable, and the related compliance certificate required to be delivered pursuant to subsection 7.2(b), are delivered on or prior to the date when due (or, in the case of the fourth quarterly period of each fiscal year of the Borrower, if financial statements which satisfy the requirements of, and are delivered within the time period specified in, subsection 7.1(b) and a related compliance certificate which satisfies the requirements of, and is delivered within the time period specified in, subsection 7.2(b), with respect to any such quarterly period are so delivered within such time periods), then the Applicable Margin for Revolving Credit Loans during the period that commences five  (5) Business Days after the date upon which such financial statements were due to be delivered shall be the Applicable Margin as set forth in the relevant column heading above which corresponds with the compliance certificate calculations delivered pursuant to subsection 7.2(b); provided , however , that in the event that the financial statements delivered pursuant to subsection 7.1(a) or 7.1(b), as applicable, and the related

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compliance certificate required to be delivered pursuant to subsection 7.2(b), are not delivered when due, then:

(a)           if such financial statements and certificate are delivered after the date such financial statements and certificate were required to be delivered (without giving effect to any applicable cure period) and the Applicable Margin increases from that previously in effect as a result of the delivery of such financial statements, then the Applicable Margin during the period from the date upon which such financial statements were required to be delivered (without giving effect to any applicable cure period) until the date upon which they actually are delivered shall, except as otherwise provided in clause (c) below, be the Applicable Margin as so increased;

(b)           if such financial statements and certificate are delivered after the date such financial statements and certificate were required to be delivered and the Applicable Margin decreases from that previously in effect as a result of the delivery of such financial statements, then such decrease in the Applicable Margin shall not become applicable until the date upon which such financial statements and certificate actually are delivered; and

(c)           if such financial statements and certificate are not delivered prior to the expiration of the applicable cure period, then, effective upon such expiration, for the period from the date upon which such financial statements and certificate were required to be delivered (after the expiration of the applicable cure period) until five (5) Business Days following the date upon which they actually are delivered, the Applicable Margin in respect of Revolving Credit Loans shall be the highest margins set forth on the preceding table and in the case of subsection 4.5(a), 0.375% per annum (it being understood that the foregoing shall not limit the rights of the Agents and the Lenders set forth in Section 9).

“ Approved Fund ”: as defined in subsection 11.6(b).

“ Arrangement Letter ”:  the arrangement letter dated August 31, 2006 among Borrower, JPMorgan Chase and J.P. Morgan Securities Inc.

“ Arranger ”:  J.P. Morgan Securities Inc.

“ Assignee ”:  as defined in subsection 11.6(b)(iii).

“ Assignment and Acceptance ”:  an assignment and acceptance agreement substantially in the form attached hereto as Exhibit D .

“ Available Revolving Credit Commitment ”:  as at any date of determination with respect to any Lender, an amount equal to the excess, if any, of (a) the amount of such Lender’s Revolving Credit Commitment in effect on such date over (b) the Aggregate Revolving Credit Outstanding of such Lender on such date.

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“ Benefited Lender ”:  as defined in subsection 11.7(a).

“ Board ”:  the Board of Governors of the Federal Reserve System of the United States of America (or any successor thereto).

“ Borrower ”:  as defined in the preamble hereto.

“ Borrowing Date ”:  any Business Day specified in a notice pursuant to subsection 2.2, 2.5(a), 2.7 or 3.2 as a date on which the Borrower requests the Lenders to make Loans hereunder or issue a Letter of Credit.

“ Business ”:  as defined in subsection 5.15(b).

“ Business Day ”:  (a) for all purposes other than as covered by clause (b) below, a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close and (b) with respect to all notices and determinations in connection with, and payments of principal and interest on, Eurodollar Loans, any day which is a Business Day described in clause (a) and which is also a London Banking Day.

“ Capital Expenditures ”:  direct or indirect (by way of the acquisition of securities of a Person or the expenditure of cash or the incurrence of Indebtedness) expenditures (other than expenditures in connection with Acquisitions permitted hereunder) in respect of the purchase or other acquisition of fixed or capital assets.

“ Capital Stock ”:  any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) (collectively, “ Underlying Equity Interests ”), and any and all warrants or options to purchase any of the foregoing.  For purposes of subsections 4.4(e) and 8.7 hereof, the term “Capital Stock” shall exclude options and warrants issued pursuant to employee stock option plans and Underlying Equity Interests issued upon the exercise thereof.

“ Cash Equivalents ”:  (a) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed or insured by the United States Government or any agency thereof, (b) certificates of deposit and eurodollar time deposits with maturities of one year or less from the date of acquisition and overnight bank deposits of any Lender or of any commercial bank having capital and surplus in excess of $500,000,000, (c) repurchase obligations of any Lender or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than 30 days with respect to securities issued or fully guaranteed or insured by the United States Government, (d) commercial paper of a domestic issuer rated at least A-2 by S&P or P-2 by Moody’s, (e) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are

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rated at least A by S&P or A by Moody’s (or the equivalent rating by either such rating agency for such type of securities), (f) securities with maturities of one year or less from the date of acquisition backed by standby letters of credit issued by any commercial bank satisfying the requirements of clause (b) of this definition or (g) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition.

“ Class ”:  the classification of loans as Revolving Credit Loans or Swing Line Loans, each of which categories shall be deemed to be a “Class” of Loans.

“ Closing Date ”:  November 3, 2006.

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

“ Collateral Agent ”:  as defined in the preamble hereto, and shall include any successor appointed in accordance with subsection 10.9.

“ Commercial Letters of Credit ”:  as defined in subsection 3.1(ii).

“ Commitments ”:  the collective reference to the Revolving Credit Commitments and the Swing Line Commitment.

 “ Consolidated EBITDA ”:  for any period of four consecutive fiscal quarters, the sum of (i) Trailing Consolidated Net Income for such period excluding the aggregate amount of all non-cash losses reducing Consolidated Net Income (excluding any non-cash losses that results in an accrual of a reserve for cash charges in any future period and the reversal thereof) for such period, (ii) Trailing Consolidated Interest Expense for such period and (iii) the Trailing amount of taxes, depreciation and amortization deducted from earnings in determining such Consolidated Net Income.

“ Consolidated Indebtedness ”:  at a particular date, all Indebtedness of the Borrower and its Subsidiaries, determined on a consolidated basis.

“ Consolidated Interest Coverage Ratio ”:  for any period of four consecutive fiscal quarters, the ratio of (i) Consolidated EBITDA of the Borrower and its Subsidiaries to (ii) Trailing Consolidated Interest Expense.

“ Consolidated Interest Expense ”:  for any fiscal period, the amount which would, in conformity with GAAP, be set forth opposite the caption “interest expense” (or any like caption) on a consolidated income statement of the Borrower and its Subsidiaries for such period.

“ Consolidated Net Income ”:  for any fiscal period, the consolidated net income (or deficit) of the Borrower and its Subsidiaries for such period (taken as a cumulative whole),

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determined on a consolidated basis in accordance with GAAP; provided that any non-cash extraordinary gains and losses shall be excluded in determining Consolidated Net Income.

“ Consolidated Senior Indebtedness ”:  all Indebtedness of the Borrower which is not by its terms expressly subordinated to the Loans under this Agreement.

“ Continuing Directors ”:  the directors of the Borrower on the Closing Date and each other director, if such other director’s nomination for election to the Board of Directors of the Borrower is recommended by a majority of the then Continuing Directors.

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

“ Co-Syndication Agent ”:  as defined in the preamble hereto, and shall include any successor appointed in accordance with subsection 10.9.

“ Default ”:  any of the events specified in Section 9, whether or not any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied.

“ Dollars ,” “ U.S. Dollars ” and “ $ ”:  dollars in lawful currency of the United States of America.

“ Domestic Subsidiary ”:  any Subsidiary other than a Foreign Subsidiary.

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

“ ERISA ”:  the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ ERISA Affiliate ”:  any trade or business (whether or not incorporated) that, together with the Borrower or any of its Subsidiaries, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

“ ERISA Event ”:  (a) any “reportable event,” as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) with respect to any Plan, failure to satisfy the minimum funding standard (as defined in Section 412 of the Code or Section 302 of ERISA), whether or

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not waived, (c) the failure to make by its due date a required installment under Section 412(m) of the Code (or Section 430(j) of the Code, as amended by the Pension Protection Act of 2006) with respect to any Plan or the failure to make any required contribution to a Multiemployer Plan; (d) the filing pursuant to Section 412of the Code or of an application for a waiver of the minimum funding standard with respect to any Plan; (e) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (f) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (g) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; (h) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, “insolvent” or in “reorganization”, within the meaning of Title IV of ERISA; or (i) the making of any amendment to any Plan which could result in the imposition of a lien or the posting of a bond or other security.

“ Eurodollar Loans ”:  Loans the rate of interest applicable to which is based upon the Eurodollar Rate.

“ Eurodollar Rate ”:  with respect to a Eurodollar Loan for the relevant Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

“ Event of Default ”:  any of the events specified in Section 9, provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied.

“ Exchange Act ”:  the Securities Exchange Act of 1934, as amended.

“ Excluded Taxes ”:  with respect to the Administrative Agent, any Lender, the Issuing Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) any Taxes imposed by any jurisdiction other than the United States (or any taxing authority thereof or therein), any jurisdiction in which the Borrower conducts business or claims an interest deduction with respect to this Agreement or any other taxing jurisdiction from or through which payments hereunder are made, (b) income or franchise taxes imposed on (or measured by) its net income or net profits by the United States of America, or by the jurisdiction under the laws of which such recipient is organized, in which such recipient conducts business (other than a business that is deemed to arise solely as a result of entering into this Agreement, receipt of payments hereunder or enforcement of its rights hereunder)) or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (c) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which the Borrower is located and (d) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under

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subsection 4.14(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Foreign Lender’s failure to comply with subsection 4.12(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to subsection 4.12(a).

“ Existing Credit Agreement ”:  as defined in the recitals hereto.

“ Existing Letter of Credit ”:  each letter of credit listed on Schedule III hereto.

 “ Existing Notes ”:  the Borrower’s 7-1/8% Senior Subordinated Notes due 2015.

“ Existing Notes Indenture ”:  as defined in subsection 6.1(p).

“ Extension of Credit ”:  as to any Lender, the making of a Loan by such Lender and, with respect to any Lender, the issuance of any Letter of Credit.

“ Federal Funds Effective Rate ”:  for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“ Fee Property ”:  as defined in subsection 5.8.

“ Financial Covenants ”: means the financial covenants set forth in subsection 8.1.

“ Financial Officer ”: means, with respect to any Person, the chief financial officer, principal accounting officer, treasurer, controller or senior vice president, finance of such Person.

“ Financing Lease ”:  (a) any lease of property, real or personal, the obligations under which are capitalized on a consolidated balance sheet of the Borrower and its Subsidiaries and (b) any other such lease to the extent that the then present value of the minimum rental commitment thereunder should, in accordance with GAAP, be capitalized on a balance sheet of the lessee.

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

“ Foreign Lender ”:  any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is located.  For purposes of this definition, the United

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States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“ Foreign Subsidiary ”:  as to any Person, any Subsidiary of such Person which is organized under the laws of any jurisdiction outside of the country of the jurisdiction of organization of such Person.

“ GAAP ”:  generally accepted accounting principles in the United States of America in effect from time to time.

“ Gel-Cap Facility ”:  the soft gelatin capsule manufacturing facility located at Cartwright Loop Industrial Park, Church Street, Bayport, New York.

“ Governmental Authority ”:  any nation or government, any state, province or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

“ Guarantee and Collateral Agreement ”:  the Guarantee and Collateral Agreement, substantially in the form attached hereto as Exhibit B , executed and delivered by the Borrower and each of its Domestic Subsidiaries, as the same may be amended, supplemented or otherwise modified.

“ Guarantee Obligation ”:  as to any Person, any obligation of such Person guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations (the “ primary obligations ”) of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, 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 (d) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided , however , that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business.  The amount of any Guarantee Obligation shall be deemed to be an amount equal to the value as of any date of determination of the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made (unless such Guarantee Obligation shall be expressly limited to a lesser amount, in which case such lesser amount shall apply) or, if not stated or determinable, the value as of any date of determination of the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith.

“ Hazardous Materials ”:  any solid wastes, toxic or hazardous substances, materials or wastes, defined, listed, classified or regulated as such in or under any Environmental Laws,

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including, without limitation, asbestos, petroleum or petroleum products (including gasoline, crude oil or any fraction thereof), polychlorinated biphenyls, and urea-formaldehyde insulation, and any other substance the presence of which may give rise to liability under any Environmental Law.

 “ Hedge Agreement ”:  any interest rate protection agreement, interest rate swap or other interest rate hedge arrangement, or currency swap or other currency hedge arrangement (other than any interest rate cap or other similar agreement or arrangement pursuant to which the Borrower has no credit exposure), to or under which the Borrower or any of its Subsidiaries is a party or a beneficiary.

“ Hedge Agreement Obligation ”:  any obligation of the Borrower under any one or more Hedge Agreements to make payments to the counterparties thereunder upon the occurrence of a termination event or similar event thereunder.

“ Holland & Barrett ”:  Holland & Barrett Holdings Limited.

“ Indebtedness ”:  of a Person, at a particular date, the sum (without duplication) at such date of (a) indebtedness for borrowed money or for the deferred purchase price of property or services in respect of which such Person is liable as obligor (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices of such Person), (b) indebtedness secured by any Lien on any property or asset owned or held by such Person regardless of whether the indebtedness secured thereby shall have been assumed by or is a primary liability of such Person, (c) obligations of such Person under Financing Leases, (d) the face amount of all letters of credit issued for the account of or upon the application of such Person and, without duplication, the unreimbursed amount of all drafts drawn thereunder and (e) obligations (in the nature of principal or interest) of such Person in respect of acceptances or similar obligations issued or created for the account of such Person.

“ Indemnified Taxes ”:  Taxes other than Excluded Taxes.

 “ Intellectual Property ”:  as defined in subsection 5.9.

“ Interest Payment Date ”:  (a) as to any ABR Loan, the last day of each March, June, September and December to occur while such Loan is outstanding, (b) as to any Eurodollar Loan having an Interest Period of three months or less, the last day of such Interest Period and (c) as to any Eurodollar Loan having an Interest Period longer than three months, (i) each day which is three months after the first day of such Interest Period and (ii) the last day of such Interest Period.

“ Interest Period ”:  with respect to any Eurodollar Loan:

(a)           initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three or six

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months (or nine or twelve months, if available to all Lenders) thereafter, as selected by the Borrower in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto; and

(b)           thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six months (or nine or twelve months, if acceptable to all Lenders) thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent not less than three Business Days prior to the last day of the then current Interest Period with respect thereto;

provided that all of the foregoing provisions relating to Interest Periods are subject to the following:

(i)      if any Interest Period pertaining to a Eurodollar Loan would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding Business Day;

(ii)     any Interest Period applicable to a Eurodollar Loan that would otherwise extend beyond the date final payment is due on such Loan shall end on such date of final payment; and

(iii)    any Interest Period pertaining to a Eurodollar Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month.

“ Issuing Lender ”:  JPMorgan Chase or any of its Affiliates, in its capacity as issuer of the Letters of Credit, and any other Lender which the Borrower, the Administrative Agent and the Majority Lenders shall have approved, in its capacity as issuer of the Letters of Credit.

“ JPMorgan Chase ”:  JPMorgan Chase Bank, N.A.

“ Landlord’s Lien Waiver, Access Agreement and Consent ”: a lien waiver, access agreement and consent substantially in the form attached hereto as Exhibit H .

 “ Leased Property ”:  as defined in subsection 5.8.

“ Legal Requirement ”:  as to (a) any Person, any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject, and (b) any property, any law, treaty, rule, regulation, requirement, judgment,

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decree or determination of any Governmental Authority applicable to or binding upon such property or to which such property is subject.

“ Lenders ”:  as defined in the preamble hereto.

“ Letter of Credit Applications ”:  (a) in the case of Standby Letters of Credit, a letter of credit application for a Standby Letter of Credit on the standard form of the applicable Issuing Lender for standby letters of credit, and (b) in the case of Commercial Letters of Credit, a letter of credit application for a Commercial Letter of Credit on the standard form of the applicable Issuing Lender for commercial letters of credit.

“ Letter of Credit Obligations ”:  at any particular time, all liabilities of the Borrower with respect to Letters of Credit, whether or not any such liability is contingent, including (without duplication) the sum of (a) the aggregate undrawn face amount of all Letters of Credit then outstanding plus (b) the aggregate amount of all unpaid Reimbursement Obligations at such time.

“ Letters of Credit ”:  as defined in subsection 3.1(ii).

“ LIBO Rate ”:  with respect to any Eurodollar Loan for any Interest Period, the rate appearing on Page 3750 of the Dow Jones Market Service (or on any successor or substitute page of such Service, or any successor to or substitute for such Service, providing rate quotations comparable to those currently provided on such page of such Service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to Dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for Dollar deposits with a maturity comparable to such Interest Period.  In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar Loan for such Interest Period shall be the rate at which Dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

“ Lien ”:  any mortgage, pledge, hypothecation, assignment, deposit arrangement (other than a bank or similar deposit account), encumbrance, lien (statutory or other), or preference, priority or other security interest or similar preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any Financing Lease having substantially the same economic effect as any of the foregoing, the filing of any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction in respect of any of the foregoing, and, in the case of securities, a third party’s right to purchase such securities).

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“ Loan Documents ”:  the collective reference to this Agreement, any Notes, any Revolving Increase Supplements, the Security Documents and any documents or instruments evidencing or governing the Security Documents.

“ Loan Parties ”:  the collective reference to the Borrower and each guarantor or grantor party to any Security Document.

“ Loans ”:  the collective reference to the Revolving Credit Loans and the Swing Line Loans.

“ London Banking Day ”:  any day on which banks in London are open for general banking business, including dealings in foreign currency and exchange.

“ Majority Lenders ”:  at any time, Lenders, the Total Loan Percentages of which aggregate more than 50%.

“ Material Adverse Effect ”:  a material adverse change in the business, assets, operations, properties, condition (financial or otherwise), contingent liabilities (including as to products, and whether such liabilities have been or yet may be asserted), prospects or material agreements of the Borrower and its Subsidiaries taken as a whole.

“ Material Environmental Amount ”:  $2,500,000 for a single occurrence and $10,000,000 in the aggregate at any time outstanding.

“ Material Foreign Subsidiary ”:  any Foreign Subsidiary accounting for 5% or more of the assets or revenues (computed for the most recent fiscal year) of the Borrower and its consolidated Subsidiaries, taken as a whole.

“ Moody’s ”:  Moody’s Investors Service, Inc. or any successor thereto.

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

“ Notes ”:  the collective reference to the Revolving Credit Notes and the Swing Line Notes.

“ Obligations ”:  collectively, the unpaid principal of and interest on the Loans, the Reimbursement Obligations and all other obligations and liabilities of the Borrower to any Agent, the Issuing Lender and the Lenders under or in connection with this Agreement, the other Loan Documents and any Hedge Agreement with any Lender or any Affiliate of a Lender (including in each case, without limitation, interest accruing at the then applicable rate provided in this Agreement or any other applicable Loan Document or Hedge Agreement after the maturity of the Loans and interest accruing at the then applicable rate provided in this Agreement or any other applicable Loan Document or Hedge Agreement after the filing of any petition in bank-

 

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ruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, the Notes, the Letters of Credit, the Letter of Credit Applications, the other Loan Documents or any Hedge Agreement with a Lender or any Affiliate of a Lender or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Agents or to the Lenders).

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

“ Participants ”:  as defined in subsection 11.6(c).

“ Participating Interest ”:  with respect to any Letter of Credit (a) in the case of the Issuing Lender, its interest in such Letter of Credit and any Letter of Credit Application relating thereto after giving effect to the granting of any participating interests therein pursuant hereto and (b) in the case of each Participating Lender, its undivided participating interest in such Letter of Credit and any Letter of Credit Application relating thereto.

“ Participating Lender ”:  any Lender (other than the Issuing Lender) with respect to its Participating Interest in a Letter of Credit.

“ Patriot Act ”:  as defined in subsection 11.17.

“ PBGC ”:  the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA or any successor thereto.

“ Person ”:  an individual, partnership, corporation, business trust, joint stock company, limited liability company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

“ Plan ”:  any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower, any of its Subsidiaries or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“ Pledged Stock ”:  as defined in the Guarantee and Collateral Agreement or any other Security Document.

 

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“ Pledgee ”:  as defined in subsection 11.15.

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

“ Pro Forma Balance Sheet ”:  as defined in subsection 5.1(b).

“ Properties ”:  as defined in subsection 5.15(a).

 “ Refinancing ”: as defined in the recitals hereto.

“ Refinancing Indebtedness ”:  Indebtedness that refinances, renews, extends, replaces, defeases or refunds, in whole or in part, any Indebtedness of the Borrower or any of its Subsidiaries; provided that

(i) other than in the case of Refinancing Indebtedness refinancing the Existing Notes or any Refinancing Indebtedness in respect thereof (the aggregate amount of which Refinancing Indebtedness (whether in respect of the Existing Notes or any Refinancing Indebtedness in respect thereof) will not be limited by this Agreement), any such Refinancing Indebtedness is in an aggregate principal amount not greater than the aggregate principal amount of the Indebtedness being renewed or refinanced, plus the amount of any premiums required to be paid thereon and reasonable fees and expenses associated therewith;

(ii) in the case of Refinancing Indebtedness refinancing the Existing Notes or any Refinancing Indebtedness in respect thereof, the subordination terms applicable to such Refinancing Indebtedness are in all material respects substantially identical to, or less favorable to the holders of such Refinancing Indebtedness than, those applicable to the Existing Notes ( provided that this provision shall not apply to any secured Indebtedness incurred pursuant to the proviso in subsection 8.10(a) and such Indebtedness shall be deemed “Refinancing Indebtedness” for all purposes hereunder);

(iii) any such Refinancing Indebtedness has a later or equal final maturity and longer or equal weighted average life than the Indebtedness being renewed or refinanced.

“ Refunded Swing Line Loans ”:  as defined in subsection 2.5(b).

“ Register ”:  as defined in subsection 11.6(b).

“ Reimbursement Obligation ”:  the obligation of the Borrower to reimburse the Issuing Lender in accordance with the terms of this Agreement and the related Letter of Credit Application for any payment made by the Issuing Lender under any Letter of Credit.

 

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

“ Release ”:  any spilling, leaking, pumping, pouring, emitting, emptying, discharging, escaping, leaking, dumping, disposing, spreading, depositing or dispersing of any Hazardous Materials in, unto or onto the environment.

“ Requirement of Law ”:  as to (a) any Person, the certificate of incorporation and by-laws or the partnership or limited partnership agreement or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject, and (b) any property, any law, treaty, rule, regulation, requirement, judgment, decree or determination of any Governmental Authority applicable to or binding upon such property or to which such property is subject, including, without limitation, any Environmental Laws.

“ Responsible Officer ”:  with respect to any Loan Party, the chief executive officer, the president, any Financial Officer, any vice president, the treasurer or the assistant treasurer of such Loan Party.

“ Restricted Payments ”:  as defined in subsection 8.7.

“ Revolving Credit Commitment ”:  as to any Lender at any time, its obligation to make Revolving Credit Loans, issue or participate in Letters of Credit issued for the account of the Borrower and/or make or participate in Swing Line Loans to the Borrower in an aggregate amount not to exceed at any time outstanding the amount set forth opposite such Lender’s name in Schedule I hereto under the heading “Revolving Credit Commitment,” or the amount set forth in the initial Revolving Increase Supplement executed and delivered by such Lender, the Borrower and the Administrative Agent, as such amount may be changed from time to time pursuant to subsection 2.4 and the other applicable provisions hereof.

“ Revolving Credit Commitment Percentage ”:  as to any Lender at any time, the percentage which such Lender’s Revolving Credit Commitment then constitutes of the Aggregate Revolving Credit Commitments (or, if the Revolving Credit Commitments have terminated or expired at such time, the percentage which (a) the Aggregate Revolving Credit Outstanding of such Lender at such time then constitutes of (b) the Aggregate Revolving Credit Outstanding of all Lenders at such time).

“ Revolving Credit Commitment Period ”:  the period from and including the Closing Date to but not including the Revolving Credit Termination Date, or such earlier date on which the Revolving Credit Commitments shall terminate as provided herein.

“ Revolving Credit Loan ”:  as defined in subsection 2.1(a).

 

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“ Revolving Credit Note ”:  as defined in subsection 2.3(e).

“ Revolving Credit Termination Date ”:  November 3, 2011.

“ Revolving Increase Supplement ”: means an increase supplement in substantially the form of Exhibit I .

“ S&P ”:  Standard & Poor’s Ratings Services or any successor thereto.

“ Security Documents ”:  the collective reference to the Guarantee and Collateral Agreement and each other pledge agreement, security document or similar agreement that may be delivered to the Administrative Agent as collateral security for any or all of the Obligations, in each case as amended, supplemented or otherwise modified from time to time.

“ Solvent ”:  with respect to any Person on a particular date, that on such date, (a) the fair value of the property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and mature, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature, (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small amount of capital and (e) such Person is able to pay its debts as they become due and payable.

“ Standby Letters of Credit ”:  as defined in subsection 3.1(i).

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

“ Subordinated Debt ”:  $188,442,812 in aggregate principal amount of Existing Notes.

“ Subsidiary ”:  as to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or

 

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such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly, through one or more intermediaries, or both, by such Person (exclusive of any Affiliate in which such Person has a minority ownership interest).  Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.

“ Swing Line Commitment ”:  the Swing Line Lender’s obligation to make Swing Line Loans pursuant to subsection 2.5.

“ Swing Line Lender ”:  JPMorgan Chase, in its capacity as lender of the Swing Line Loans.

“ Swing Line Loan Participation Certificate ”:  a certificate in substantially the form attached hereto as Exhibit C , as the same may be amended, supplemented or otherwise modified from time to time.

“ Swing Line Loans ”:  as defined in subsection 2.5(a).

“ Swing Line Note ”:  as defined in subsection 2.3(e).

“ Taxes ”:  any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.

“ Total Loan Percentage ”:  as to any Lender at any time, the percentage which such Lender’s Revolving Credit Commitment (or, if the Revolving Credit Commitments have terminated or expired at such time, the Aggregate Revolving Credit Outstanding of such Lender) at such time constitutes (ii) the Aggregate Revolving Credit Commitments (or, if the Revolving Credit Commitments have terminated or expired at such time, the Aggregate Revolving Credit Outstanding of all Lenders) for all Lenders at such time. !

“ Trailing ”:  with respect to the determination of any financial results for any period, the applicable financial result for the four fiscal quarters ended on such date.

“ Tranche ”:  the collective reference to Eurodollar Loans the then current Interest Periods with respect to which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day).

“ Transactions ”:  the Extensions of Credit made hereunder on the Closing Date, the Refinancing and the payment of fees, commissions and expenses in connection therewith.

“ Transferee ”:  as defined in subsection 11.15.

“ Type ”:  as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.

 

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

1.2.          Other Definitional Provisions .

(a)           Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the Notes, the other Loan Documents or any certificate or other document made or delivered pursuant hereto.

(b)           As used herein and in the Notes and any other Loan Document, and any certificate or other document made or delivered pursuant hereto or thereto, accounting terms relating to the Borrower and its Subsidiaries not defined in subsection 1.1 and accounting terms partly defined in subsection 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP; provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Majority Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

(c)           The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, subsection, Schedule and Exhibit references are to this Agreement unless otherwise specified.

(d)           The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

SECTION 2.  AMOUNT AND TERMS OF COMMITMENTS

2.1.          Revolving Credit Commitments .

(a)           Subject to the terms and conditions hereof, each Lender with a Revolving Credit Commitment severally agrees to make revolving credit loans (each, a “ Revolving Credit Loan ”) in U.S. Dollars to the Borrower from time to time during the Revolving Credit Commitment Period so long as after giving effect thereto (i) the Available Revolving Credit Commitment of each Lender with a Revolving Credit Commitment is greater than or equal to zero and (ii) the Aggregate Revolving Credit Outstanding of all Lenders does not exceed the Aggregate Revolving Credit Commitments.  During the Revolving Credit Commitment Period the Borrower may use the Revolving Credit Commitments by borrowing, prepaying the Revolving Credit

 

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Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof.

(b)           The Revolving Credit Loans may from time to time be (i) Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as determined by the Borrower and notified to the Administrative Agent in accordance with subsections 2.2 and 4.2, provided that no Revolving Credit Loan shall be made as a Eurodollar Loan after the day that is one month prior to the Revolving Credit Termination Date.

2.2.          Procedure for Revolving Credit Borrowing . The Borrower may borrow under the Revolving Credit Commitments during the Revolving Credit Commitment Period on any Business Day, provided that the Borrower shall give the Administrative Agent irrevocable notice (which notice must be received by the Administrative Agent prior to 11:00 A.M., (New York City time) at least (a) three Business Days prior to the requested Borrowing Date, if all or any part of the requested Revolving Credit Loans are to be initially Eurodollar Loans, or (b) one Business Day prior to the requested Borrowing Date, otherwise), specifying in each case (i) the amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether the borrowing is to be of Eurodollar Loans, ABR Loans or a combination thereof and (iv) if the borrowing is to be entirely or partly of Eurodollar Loans, the amount of such Type of Loan and the length of the initial Interest Periods therefor.  Each borrowing under the Revolving Credit Commitments shall be in an amount equal to (A) in the case of ABR Loans, $1,000,000 or a whole multiple of $1,000,000 in excess thereof (or, if the then Aggregate Available Revolving Credit Commitments are less than $1,000,000, such lesser amount) and (B) in the case of Eurodollar Loans, $5,000,000 or a whole multiple of $5,000,000 in excess thereof.  Upon receipt of any such notice from the Borrower, the Administrative Agent shall promptly notify each Lender thereof not later than 9:00 A.M., New York City time, on the requested Borrowing Date.  Not later than 12:00 Noon, New York City time, on each requested Borrowing Date each Lender shall make an amount equal to its Revolving Credit Commitment Percentage of the principal amount of the Revolving Credit Loans requested to be made on such Borrowing Date available to the Administrative Agent at its office specified in subsection 11.2 in U.S. Dollars and in immediately available funds.  The Administrative Agent shall on such date credit the account of the Borrower on the books of such office with the aggregate of the amounts made available to the Administrative Agent by the Lenders and in like funds as received by the Administrative Agent.

2.3.          Repayment of Revolving Credit Loans; Evidence of Debt .

(a)           The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Revolving Credit Loan of such Lender (whether made before or after the termination or expiration of the Revolving Credit Commitments) on the Revolving Credit Termination Date and on such other dates and in such other amounts as may be required from time to time pursuant to this Agreement.  The Borrower hereby further agrees to pay interest on the unpaid principal amount of the

 

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Revolving Credit Loans from time to time outstanding until payment thereof in full at the rates per annum, and on the dates, set forth in subsection 4.1.

(b)           Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of the Borrower to such Lender resulting from each Revolving Credit Loan of such Lender from time to time, including the amounts of principal and interest payable thereon and paid to such Lender from time to time under this Agreement.

(c)           The Administrative Agent shall maintain the Register pursuant to subsection 11.6(b), and a subaccount therein for each Lender, in which shall be recorded (i) the amount of each Revolving Credit Loan made hereunder, the Type thereof and each Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder in respect of the Revolving Credit Loans and (iii) both the amount of any sum received by the Administrative Agent hereunder from the Borrower in respect of the Revolving Credit Loans and each Lender’s share thereof.

(d)           The entries made in the Register and the accounts of each Lender maintained pursuant to subsection 2.3(b) shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided , however , that the failure of any Lender to maintain such account or the Administrative Agent to maintain the Register, or any error therein, shall not in any manner affect the obligation of the Borrower to repay (with applicable interest) the Revolving Credit Loans made to the Borrower by such Lender in accordance with the terms of this Agreement.

(e)           The Borrower agrees that it will, upon the request of any Lender, execute and deliver to such Lender (i) a promissory note of the Borrower evidencing the Revolving Credit Loans of such Lender, substantially in the form attached hereto as Exhibit A-1 with appropriate insertions as to date and principal amount (each, a “ Revolving Credit Note ”), and/or (ii) a promissory note of the Borrower evidencing the Swing Line Loans of such Lender, substantially in the form attached hereto as Exhibit A-2 with appropriate insertions as to date and principal amount (each, a “ Swing Line Note ”); provided that any Revolving Credit Note or Swing Line Note previously delivered to such Lender (or any predecessor thereof) has been returned to the Borrower and marked cancelled or an affidavit of lost or destroyed Note (in form acceptable to the Borrower) is executed and delivered by such requesting Lender in lieu of such Note.

2.4.          Termination, Reduction and Increase of Revolving Credit Commitments .

(a)           The Borrower shall have the right, upon not less than three Business Days’ notice to the Administrative Agent (which shall promptly notify each Lender thereof), to terminate the Revolving Credit Commitments or, from time to time, to reduce the amount of the Revolving Credit Commitments; provided that no such termination or reduction shall be permitted if, after giving effect thereto and to any prepayments of the Revolving Credit Loans made on the effective date thereof, the Available Revolving Credit Commitment of any Lender would not be

 

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greater than or equal to zero.  Any such permitted reduction shall be in an amount equal to $2,500,000 or a whole multiple of $1,000,000 in excess thereof and shall reduce permanently the Revolving Credit Commitments then in effect.

(b)           The Borrower may at any time and from time to time, at its sole cost, expense and effort, request any one or more of the Lenders, an Affiliate of a Lender or an Approved Fund of a Lender to increase its Revolving Credit Commitment or to provide a new Revolving Credit Commitment, as the case may be (the decision to be within the sole and absolute discretion of such Lender, Affiliate or Approved Fund), or any other Person reasonably satisfactory to the Administrative Agent and each Issuing Lender to provide a new Revolving Credit Commitment, by submitting a Revolving Increase Supplement duly executed by the Borrower and each such Lender, Affiliate, Approved Fund or other Person, as the case may be, to the Administrative Agent.  If such Revolving Increase Supplement is in all respects reasonably satisfactory to the Administrative Agent, the Administrative Agent shall execute such Revolving Increase Supplement and deliver a copy thereof to the Borrower and each such Lender, Affiliate, Approved Fund or other Person, as the case may be.  Upon execution and delivery of such Revolving Increase Supplement by the Administrative Agent, (i) in the case of each such Lender, such Lender’s Revolving Credit Commitment shall be increased to the amount set forth in such Revolving Increase Supplement, (ii) in the case of each such Affiliate, Approved Fund or other Person, such Affiliate, Approved Fund or other Person shall thereupon become a party hereto and shall for all purposes of the Loan Documents be deemed a “Lender” having a Revolving Credit Commitment as set forth in such Revolving Increase Supplement, and (iii) in each case, the Revolving Credit Commitment of such Lender, Affiliate, Approved Fund or such other Person, as the case may be, shall be as set forth in the applicable Revolving Increase Supplement; provided , however , that:

I.                  immediately after giving effect thereto, the sum of all increases in the aggregate Revolving Credit Commitments shall not exceed $150,000,000;

II.              each such increase shall be in an amount not less than $25,000,000 or such amount plus an integral multiple of $5,000,000;

III.          the Revolving Credit Commitments shall not be increased on more than three occasions;

IV.          if Revolving Credit Loans would be outstanding immediately after giving effect to each such increase, then simultaneously with such increase (1) each such Lender, each such Affiliate, Approved Fund or other Person and each other Lender shall be deemed to have entered into a master assignment and acceptance agreement, in form and substance substantially similar to Exhibit D , pursuant to which each such other Lender shall have assigned to each such Lender and each such Affiliate, Approved Fund or other Person a portion of its Revolving Credit Loans necessary to reflect proportionately the Revolving Credit Commitments as adjusted in accordance with this subsection (b), and (2) in con-

 

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nection with such assignment, each such Lender and each such Affiliate, Approved Fund or other Person shall pay to the Administrative Agent, for the account of the other Lenders, such amount as shall be necessary to appropriately reflect the assignment to it of Revolving Credit Loans, and in connection with such master assignment each such other Lender may treat the assignment of Eurodollar Loans as a prepayment of such Eurodollar Loans for purposes of Section 4.15;

V.              each such Affiliate, Approved Fund or other Person shall have delivered to the Administrative Agent and the Borrower all forms, if any, that are required to be delivered by such Affiliate, Approved Fund or other Person pursuant to Section 4.12; and

VI.          the Borrower shall have delivered to the Administrative Agent for further distribution to each Lender a certificate of a Financial Officer demonstrating compliance on a pro forma basis with the Financial Covenants through the Revolving Credit Termination Date and the Administrative Agent shall have received such customary certificates, legal opinions and other items as it shall reasonably request in connection with such increase.

2.5.          Swing Line Commitment .

(a)           Subject to the terms and conditions hereof, the Swing Line Lender agrees to make swing line loans (individually, a “ Swing Line Loan ”; collectively, the “ Swing Line Loans ”) to the Borrower from time to time during the Revolving Credit Commitment Period in an aggregate principal amount at any one time outstanding not to exceed $20,000,000; provided that the Swing Line Lender shall not make any Swing Line Loan if, after giving effect thereto, the sum of the Swing Line Loans, the Revolving Credit Loans and the Letter of Credit Obligations (in each case after giving effect to the Loans requested to be made and the Letters of Credit requested to be issued on such date) exceeds the Aggregate Revolving Credit Commitments.  During the Revolving Credit Commitment Period, the Borrower may use the Swing Line Commitment by borrowing, prepaying the Swing Line Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof.  All Swing Line Loans shall be made as ABR Loans and shall not be entitled to be converted into Eurodollar Loans.  The Borrower shall give the Swing Line Lender irrevocable notice (which notice must be received by the Swing Line Lender prior to 12:00 Noon, New York City time) on the requested Borrowing Date specifying the amount of the requested Swing Line Loan which shall be in a minimum amount of $100,000 or a whole multiple of $100,000 in excess thereof.  The proceeds of the Swing Line Loan will be made available by the Swing Line Lender to the Borrower at the Houston office of the Swing Line Lender set forth in subsection 11.2, or at such other address the Swing Line Lender shall designate in writing to the Borrower from time to time in accordance with subsection 11.2, by 3:00 P.M., New York City time, on the Borrowing Date by crediting the account of the Borrower at such office with such proceeds.  The Borrower may at any time and from time to time prepay

 

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the Swing Line Loans, in whole or in part, without premium or penalty, by notifying the Swing Line Lender prior to 12:00 Noon, New York City time, on any Business Day of the date and amount of prepayment.  If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein.  Partial prepayments shall be in an aggregate principal amount of $100,000 or a whole multiple of $100,000 in excess thereof.

(b)           The Swing Line Lender, at any time in its sole and absolute discretion, may, on behalf of the Borrower (which hereby irrevocably directs the Swing Line Lender to act on its behalf) request each Lender, including the Swing Line Lender, to make a Revolving Credit Loan which is an ABR Loan in an amount equal to such Lender’s Revolving Credit Commitment Percentage of the amount of the Swing Line Loans outstanding on the date such notice is given (the “ Refunded Swing Line Loans ”).  Unless any of the events described in paragraph (h) of Section 9 shall have occurred with respect to the Borrower (in which event the procedures of paragraph (d) of this subsection 2.5 shall apply), each Lender shall make the proceeds of such Revolving Credit Loan available to the Administrative Agent for the account of the Swing Line Lender at the office of the Administrative Agent specified in subsection 11.2 prior to 12:00 Noon (New York City time) in funds immediately available on the Business Day next succeeding the date such notice is given.  The proceeds of such Revolving Credit Loans shall be immediately applied to repay the Refunded Swing Line Loans.  Effective on the day such Revolving Credit Loans are made, the portion of the Swing Line Loans so paid shall no longer be outstanding as Swing Line Loans, shall no longer be due under any Swing Line Note and shall be due as the respective Revolving Credit Loans made by the Lenders in accordance with their respective Revolving Credit Commitment Percentages.  The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of the Swing Line Lender the then unpaid principal amount of each Swing Line Loan of the Swing Line Lender on the Revolving Credit Termination Date (to the extent such Swing Line Loan has not previously been repaid in full with the proceeds of Revolving Credit Loans).

(c)           Notwithstanding anything herein to the contrary, the Swing Line Lender shall not be obligated to make any Swing Line Loans if the conditions set forth in subsection 6.2 have not been satisfied in respect thereof.

(d)           If prior to the making of a Revolving Credit Loan pursuant to paragraph (b) of this subsection 2.5 one of the events described in paragraph (h) of Section 9 shall have occurred and be continuing with respect to the Borrower, each Lender with a Revolving Credit Commitment will, on the date such Revolving Credit Loan was to have been made pursuant to the notice in this subsection 2.5, purchase an undivided participating interest in the Refunded Swing Line Loans in an amount equal to (i) its Revolving Credit Commitment Percentage times (ii) the Refunded Swing Line Loans.  Each Lender will immediately transfer to the Swing Line Lender, in immediately available funds, the amount of its participation, and upon receipt thereof the Swing Line Lender will deliver to such Lender a Swing Line Loan Participation Certificate dated the date of receipt of such funds and in such amount.

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(e)           Whenever, at any time after any Lender has purchased a participating interest in a Swing Line Loan, the Swing Line Lender receives any payment on account thereof, the Swing Line Lender will distribute to such Lender its participating interest in such amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s participating interest was outstanding and funded); provided , however , that in the event that such payment received by the Swing Line Lender is required to be returned, such Lender will return to the Swing Line Lender any portion thereof previously distributed by the Swing Line Lender to it.

(f)            Each Lender’s obligation to make the Loans referred to in subsection 2.5(b) and to purchase participating interests pursuant to subsection 2.5(d) shall be absolute, irrevocable and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right which such Lender or the Borrower may have against the Swing Line Lender, the Borrower or any other Person for any reason whatsoever, (ii) the occurrence or continuance of a Default or an Event of Default; (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any other Loan Party; (iv) any breach of this Agreement or any other Loan Document by the Borrower or any of its Subsidiaries or any other Lender; or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

SECTION 3.  LETTERS OF CREDIT

3.1.          Letters of Credit .  Subject to the terms and conditions of this Agreement, the Issuing Lender agrees, on behalf of the Lenders, and in reliance on the agreement of the Lenders set forth in subsection 3.3, to issue for the account of the Borrower letters of credit in an aggregate face amount, together with any unpaid Reimbursement Obligations, not to exceed $25,000,000 at any time outstanding, as follows:

(i)      standby letters of credit (collectively, the “ Standby Letters of Credit ”) in a form reasonably satisfactory to the Issuing Lender and in favor of such beneficiaries as the Borrower shall specify from time to time (which shall be reasonably satisfactory to the Issuing Lender); and

(ii)     commercial letters of credit in the form of the Issuing Lender’s standard commercial letters of credit (“ Commercial Letters of Credit ”) in favor of sellers of goods or services to the Borrower or its Subsidiaries (the Standby Letters of Credit and Commercial Letters of Credit being referred to collectively as the “ Letters of Credit ”, it being understood that Existing Letters of Credit shall be deemed to be “Letters of Credit” for all purposes under the Loan Documents);

provided that on the date of the issuance of any Letter of Credit, and after giving effect to such issuance, the Aggregate Revolving Credit Outstanding of all Lenders does not exceed the Aggregate Revolving Credit Commitments at such time.  Each Standby Letter of Credit shall (i) have an expiry date no later than one year from the date of issuance thereof or, if earlier, five Business

 

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Days prior to the Revolving Credit Termination Date, (ii) be denominated in U.S. Dollars and (iii) be in a minimum face amount of $100,000.  Each Commercial Letter of Credit shall (i) provide for the payment of sight drafts when presented for honor thereunder, or of time drafts, in each case in accordance with the terms thereof and when accompanied by the documents described or when such documents are presented, as the case may be, (ii) be denominated in U.S. Dollars and (iii) have an expiry date no later than six months from the date of issuance thereof or, if earlier, five Business Days prior to the Revolving Credit Termination Date.  Upon the issuance of any Letter of Credit, the Administrative Agent shall promptly notify each Lender thereof.

3.2.          Procedure for Issuance of Letters of Credit .  The Borrower may from time to time request, upon at least three Business Days’ notice, the Issuing Lender to issue a Letter of Credit by delivering to the Issuing Lender at its address specified in subsection 11.2 a Letter of Credit Application, completed to the reasonable satisfaction of such Issuing Lender, together with such other certificates, documents and other papers and information as such Issuing Lender may reasonably request.  Upon receipt of any Letter of Credit Application, the Issuing Lender will process such Letter of Credit Application, and the other certificates, documents and other papers delivered in connection therewith, in accordance with its customary procedures and shall promptly issue such Letter of Credit (but in no event earlier than three Business Days after receipt by the Issuing Lender of the Letter of Credit Application relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof and by furnishing a copy thereof to the Borrower.  Prior to the issuance of any Letter of Credit, the Issuing Lender will confirm with the Administrative Agent that the issuance of such Letter of Credit is permitted pursuant to Section 3 and subsection 6.2.  Additionally, the Issuing Lender and the Borrower shall inform the Administrative Agent of any modifications made to outstanding Letters of Credit, of any payments made with respect to such Letters of Credit, and of any other information regarding such Letters of Credit as may be reasonably requested by the Administrative Agent, in each case pursuant to procedures established by the Administrative Agent.

3.3.          Participating Interests .  Effective as of the date of the issuance of each Letter of Credit (in the case of a Letter of Credit issued after the date hereof), the Issuing Lender agrees to allot, and does allot, to each other Lender with a Revolving Credit Commitment, and each such Lender severally and irrevocably agrees to take and does take, a Participating Interest in such Letter of Credit and the related Letter of Credit Application in a percentage equal to such Lender’s Revolving Credit Commitment Percentage.  On the date that any Participating Lender becomes a party to this Agreement in accordance with subsection 11.6, Participating Interests in any outstanding Letter of Credit held by the Lender from which such Participating Lender acquired its interest hereunder shall be proportionately reallocated between such Participating Lender and such transferor Lender.  Each Participating Lender hereby agrees that its obligation to participate in each Letter of Credit issued in accordance with the terms hereof and to pay or to reimburse the Issuing Lender in respect of such Letter of Credit for its participating share of the drafts drawn thereunder shall be irrevocable and unconditional; provided that no Participating Lender shall be liable for the payment of any amount under subsection 3.4(b) resulting solely from the Issuing Lender’s gross negligence or willful misconduct.

 

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3.4.          Payments .

(a)           The Borrower agrees (i) to reimburse the Administrative Agent for the account of the Issuing Lender, forthwith upon its demand and otherwise in accordance with the terms of the Letter of Credit Application, if any, relating thereto, for any payment made by the Issuing Lender under any Letter of Credit and (ii) to pay to the Administrative Agent for the account of such Issuing Lender, interest on any unreimbursed portion of any such payment from the date of such payment until reimbursement in full thereof at a fluctuating rate per annum equal to the rate then borne by Revolving Credit Loans that are ABR Loans pursuant to subsection 4.1(b) plus 2% per annum .

(b)           In the event that the Issuing Lender makes a payment under any Letter of Credit and is not reimbursed in full therefor, forthwith upon demand of the Issuing Lender, and otherwise in accordance with the terms hereof or of the Letter of Credit Application, if any, relating to such Letter of Credit, the Issuing Lender will promptly through the Administrative Agent notify each Participating Lender that acquired its Participating Interest in such Letter of Credit from the Issuing Lender or pursuant to an assignment as provided in subsection 11.6(c).  No later than (x) the close of business on the date such notice is given if such notice is given by 12:00 Noon (New York City time) on the date such notice is received or (y) 12:00 Noon (New York City time) on the following Business Day if such notice is not received by 12:00 Noon (New York City time), each such Participating Lender will transfer to the Administrative Agent, for the account of the Issuing Lender, in immediately available funds, an amount equal to such Participating Lender’s pro rata share of the unreimbursed portion of such payment.

(c)           Whenever, at any time, after the Issuing Lender has made payment under a Letter of Credit and has received from any Participating Lender such Participating Lender’s pro rata share of the unreimbursed portion of such payment, the Issuing Lender receives any reimbursement on account of such unreimbursed portion or any payment of interest on account thereof, the Issuing Lender will distribute to the Administrative Agent, for the account of such Participating Lender, its pro rata share thereof; provided , however , that in the event that the receipt by the Issuing Lender of such reimbursement or such payment of interest (as the case may be) is required to be returned, such Participating Lender will promptly return to the Administrative Agent, for the account of the Issuing Lender, any portion thereof previously distributed by the Issuing Lender to it.

3.5.          Further Assurances .  The Borrower hereby agrees, from time to time, to do and perform any and all acts and to execute any and all further instruments reasonably requested by the Issuing Lender more fully to effect the purposes of this Agreement and the issuance of the Letters of Credit issued hereunder.

3.6.          Obligations Absolute .  The payment obligations of the Borrower and each Participating Lender under subsection 3.4 shall be unconditional and irrevocable and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including, without limitation, the following circumstances:

 

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(a)           the existence of any claim, set-off, defense or other right which the Borrower may have at any time against any beneficiary, or any transferee, of any Letter of Credit (or any Persons for whom any such beneficiary or any such transferee may be acting), the Issuing Lender or any Participating Lender, or any other Person, whether in connection with this Agreement, the transactions contemplated herein, or any unrelated transaction;

(b)           any statement or any other document presented under any Letter of Credit opened for its account proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

(c)           payment by the Issuing Lender under any Letter of Credit against presentation of a draft or certificate which does not comply with the terms of such Letter of Credit, except payment resulting solely from the gross negligence or willful misconduct of the Issuing Lender; or

(d)           any other circumstances or happening whatsoever, whether or not similar to any of the foregoing, except circumstances or happenings resulting from the gross negligence or willful misconduct of the Issuing Lender.

3.7.          Letter of Credit Application .  To the extent not inconsistent with the terms of this Agreement (in which case the provisions of this Agreement shall prevail), provisions of any Letter of Credit Application related to any Letter of Credit are supplemental to, and not in derogation of, any rights and remedies of the Issuing Lender and the Participating Lenders under this Section 3 and applicable law.  The Borrower acknowledges and agrees that all rights of the Issuing Lender under any Letter of Credit Application shall inure to the benefit of each Participating Lender to the extent of its Revolving Credit Commitment Percentage as fully as if such Participating Lender was a party to such Letter of Credit Application.

3.8.          Purpose of Letters of Credit .  Each Standby Letter of Credit shall be used by the Borrower solely (a) to provide credit support for borrowings by the Borrower or its Subsidiaries, or (b) for other working capital purposes of the Borrower and Subsidiaries in the ordinary course of business.  Each Commercial Letter of Credit will be used by the Borrower and Subsidiaries solely to provide the primary means of payment in connection with the purchase of goods or services by the Borrower and its Subsidiaries in the ordinary course of business.

SECTION 4.  GENERAL PROVISIONS

4.1.          Interest Rates and Payment Dates .

(a)           Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for such Interest Period plus the Applicable Margin.

 

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(b)           Each ABR Loan shall bear interest for each day on which it is outstanding at a rate per annum equal to the Alternate Base Rate for such day plus the Applicable Margin.

(c)           If all or a portion of (i) the principal amount of any Loan, (ii) any interest payable thereon or (iii) any fee or other amount payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such amount shall bear interest for each day after the due date until such amount is paid in full at a rate per annum equal to (x) in the case of principal, the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this subsection plus 2% per annum or (y) in the case of any such overdue interest, fee or other amount, the rate described in paragraph (b) of this subsection plus 2% per annum .  If any Event of Default described in subsections 9(c) (with respect to subsection 8.1 only), (f), (h) or (j) shall occur and be continuing, and the Majority Lenders shall give notice to the Borrower that this sentence shall apply, then, until such Event of Default shall be cured or waived or such notice shall be withdrawn, the outstanding principal amount of all Loans shall bear interest at 2% per annum above the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this subsection 4.1 (other than the first sentence of this paragraph (c)).

(d)           Interest shall be payable in arrears on each Interest Payment Date, provided that interest accruing pursuant to paragraph (c) of this subsection 4.1 shall be payable from time to time on demand.

4.2.          Conversion and Continuation Options .

(a)           The Borrower may elect from time to time to convert outstanding Eurodollar Loans (in whole or in part) to ABR Loans by giving the Administrative Agent at least two Business Days’ prior irrevocable notice of such election, provided that any such conversion of Eurodollar Loans may only be made on the last day of an Interest Period with respect thereto.  The Borrower may elect from time to time to convert outstanding ABR Loans (in whole or in part) to Eurodollar Loans by giving the Administrative Agent at least three Business Days’ prior irrevocable notice of such election.  Any such notice of conversion to Eurodollar Loans shall specify the length of the initial Interest Period or Interest Periods therefor.  Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.  All or any part of outstanding Eurodollar Loans and ABR Loans may be converted as provided herein, provided that (i) no ABR Loan may be converted into a Eurodollar Loan when any Default or Event of Default has occurred and is continuing and the Administrative Agent or Lenders holding the majority of the outstanding principal amount of Loans of such Type have determined that such conversion is not appropriate, (ii) any such conversion may only be made if, after giving effect thereto, subsection 4.3 shall not have been violated, and (iii) no ABR Loan may be converted into a Eurodollar Loan after the date that is one month prior to the Revolving Credit Termination Date.

(b)           Any Eurodollar Loans may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Borrower giving notice to the Administrative Agent of the length of the next Interest Period to be applicable to such Loans determined

 

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in accordance with the applicable provisions of the term “Interest Period” set forth in subsection 1.1, provided that no Eurodollar Loan may be continued as such (i) when any Default or Event of Default has occurred and is continuing and the Administrative Agent or Lenders holding the majority of the outstanding principal amount of Loans of such Class have determined that such continuation is not appropriate, (ii) if, after giving effect thereto, subsection 4.3 would be contravened or (iii) after the date that is one month prior to the Revolving Credit Termination Date; and provided , further , that if the Borrower shall fail to give such notice or if such continuation is not permitted pursuant to the preceding proviso, such Eurodollar Loans shall, subject to the preceding proviso, be automatically continued as such, with the length of the next Interest Period to be 30 days.  Upon receipt of any notice pursuant to this subsection 4.2(b), the Administrative Agent shall promptly notify each Lender thereof.

4.3.          Minimum Amounts of Tranches .  All borrowings, conversions and continuations of Loans hereunder and all selections of Interest Periods hereunder shall be in such amounts and be made pursuant to such elections so that, after giving effect thereto, (i) the aggregate principal amount of the Eurodollar Loans comprising each Tranche shall be equal to $5,000,000 or a whole multiple of $5,000,000 in excess thereof and (ii) there shall not be more than (ten) 10 Tranches at any one time outstanding.

4.4.          Optional and Mandatory Prepayments .

(a)           The Borrower may at any time and from time to time prepay Revolving Credit Loans, in whole or in part, upon at least three Business Days’ irrevocable notice to the Administrative Agent (in the case of Eurodollar Loans) and at least one Business Day’s irrevocable notice to the Administrative Agent (in the case of ABR Loans), specifying the date and amount of prepayment and whether the prepayment is of Eurodollar Loans, ABR Loans or a combination thereof, and, in each case if a combination thereof, the amount allocable to each.  Upon the receipt of any such notice the Administrative Agent shall promptly notify each Lender thereof.  If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein.  Partial prepayments of the Loans shall be in an aggregate principal amount of $2,500,000 or a whole multiple of $1,000,000 in excess thereof.

(b)           If, at any time during the Revolving Credit Commitment Period, for any reason the Aggregate Revolving Credit Outstanding of all Lenders exceeds the Aggregate Revolving Credit Commitments then in effect, or the Aggregate Revolving Credit Outstanding of any Lender exceeds the Revolving Credit Commitment of such Lender then in effect, the Borrower shall, without notice or demand, immediately prepay the Revolving Credit Loans in an aggregate principal amount at least sufficient to eliminate any such excess.

(c)           Each prepayment of Loans pursuant to this subsection 4.4 shall be accompanied by accrued and unpaid interest on the amount prepaid to the date of prepayment and any amounts payable under subsection 4.11 or 4.15 in connection with such prepayment.

 

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(d)           The Revolving Credit Loans shall be prepaid and the Letters of Credit shall be cash collateralized or replaced to the extent such Extensions of Credit at any time exceed the amount of the Revolving Credit Commitments.

4.5.          Commitment Fees; Other Fees .

(a)           The Borrower agrees to pay to the Administrative Agent for the account of each Lender (other than any Lender which has defaulted in its obligation to fund a Loan under this Agreement), a commitment fee for the period from and including the Closing Date to but excluding the Revolving Credit Termination Date (or such earlier date on which the Revolving Credit Commitments shall terminate as provided herein) computed at the rate per annum set forth in the definition of “Applicable Margin” under the heading “Commitment Fee” on the average daily Available Revolving Credit Commitment of such Lender during the period for which payment is made, payable quarterly in arrears on the last Business Day of each calendar quarter and on the Revolving Credit Termination Date or such earlier date on which the Revolving Credit Commitments shall terminate as provided herein, commencing on the first such date to occur after the date hereof.

(b)           The Borrower shall pay (without duplication of any other fee payable under this subsection 4.5) to each Agent any and all fees separately agreed to by the Borrower and such Agents.

(c)           In lieu of any letter of credit commissions and fees provided for in any Letter of Credit Application relating to a Standby Letter of Credit (other than any standard issuance, amendment and negotiation fees), the Borrower will pay the Administrative Agent, (i) for the account of the Issuing Lender, a non-refundable fronting fee equal to 0.25 of 1% per annum and (ii) for the account of the Issuing Lender (with respect to its Participating Interest) and the Participating Lenders, a non-refundable Standby Letter of Credit fee equal to the Applicable Margin in respect of Eurodollar Revolving Credit Loans, in each case on the amount available to be drawn under such Standby Letter of Credit.  Such fees shall be payable quarterly in arrears on the last Business Day of each calendar quarter, and shall be calculated on the average daily amount available to be drawn under the Standby Letters of Credit.

(d)           In lieu of any letter of credit commissions and fees provided for in any Letter of Credit Application relating to a Commercial Letter of Credit (other than any standard issuance, amendment and negotiation fees), the Borrower will pay the Administrative Agent, (i) for the account of the Issuing Lender, a non-refundable fronting fee equal to 1/16 of 1% of the amount of such Commercial Letter of Credit, (ii) for the account of the Issuing Lender (with respect to its Participating Interest) and the Participating Lenders, a non-refundable Commercial Letter of Credit fee equal to 1/4 of 1% of the amount of such Letter of Credit.  Such fees shall be payable to the Administrative Agent on the date of issuance and shall be distributed by the Administrative Agent to the Issuing Lender or the Participating Lenders, as applicable, promptly thereafter and (iii) for the account of the Administrative Agent, the normal and customary Letter of Credit application and processing fees.

 

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(e)           The Borrower agrees to pay the Issuing Lender for its own account the customary administration, amendment, transfer and negotiation fees charged by the Issuing Lender in connection with its issuance and administration of Letters of Credit.

4.6.          Computation of Interest and Fees .

(a)           Interest and fees shall be calculated on the basis of a 360-day year for the actual days elapsed (including the first day but excluding the last day); provided that interest calculated at the Alternate Base Rate (based on the Prime Rate included therein) shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed (including the first day but excluding the last day).  The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of each determination of a Eurodollar Rate.  Any change in the interest rate on a Loan resulting from a change in the Alternate Base Rate shall become effective as of the opening of business on the day on which such change becomes effective.  The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of the effective date and the amount of each such change in the Alternate Base Rate.

(b)           Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the absence of manifest error.  The Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement showing in reasonable detail the calculations used by the Administrative Agent in determining any interest rate pursuant to subsection 4.1.

4.7.          Inability to Determine Interest Rate.  If prior to the first day of any Interest Period:

(a)        &