TABLE OF CONTENTS

 

Section		Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms		2
SECTION 1.02. Computation of Time Periods; Other Definitional Provisions		36
SECTION 1.03. Accounting Terms		36
SECTION 1.04. Currency Equivalents Generally		36
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances and the Letters of Credit		37
SECTION 2.02. Making the Advances		38
SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit		40
SECTION 2.04. Repayment of Advances		42
SECTION 2.05. Termination or Reduction of the Commitments		43
SECTION 2.06. Prepayments		44
SECTION 2.07. Interest		45
SECTION 2.08. Fees		46
SECTION 2.09. Conversion of Advances		48
SECTION 2.10. Increased Costs, Etc		48
SECTION 2.11. Payments and Computations		50
SECTION 2.12. Taxes		53
SECTION 2.13. Sharing of Payments, Etc		56
SECTION 2.14. Use of Proceeds		56
SECTION 2.15. Defaulting Lenders		57
SECTION 2.16. Evidence of Debt		59
SECTION 2.17. Increase in Revolving Credit Commitments		60
SECTION 2.18. Relationship Among the Borrowers		61
ARTICLE III
CONDITIONS OF LENDING AND
ISSUANCES OF LETTERS OF CREDIT
SECTION 3.01. Conditions Precedent to Effectiveness of Revolving Credit Agreement		62
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance		66
SECTION 3.03. Determinations Under Section 3.01		67

 

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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrowers		68
ARTICLE V
COVENANTS OF THE BORROWERS
SECTION 5.01. Affirmative Covenants		75
SECTION 5.02. Negative Covenants		80
SECTION 5.03. Reporting Requirements		92
SECTION 5.04. Financial Covenant		95
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default		96
SECTION 6.02. Actions in Respect of the Letters of Credit upon Default		99
ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action		100
SECTION 7.02. Agents’ Reliance, Etc		100
SECTION 7.03. DBNY and Affiliates		101
SECTION 7.04. Lender Party Credit Decision		101
SECTION 7.05. Indemnification		101
SECTION 7.06. Successor Agents.		102
SECTION 7.07. Appointment of Supplemental Collateral Monitoring Agents		103
SECTION 7.08. The Joint Lead Arrangers, the Syndication Agent and the Documentation Agent		104
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc		104
SECTION 8.02. Notices, Etc		105
SECTION 8.03. No Waiver; Remedies		107
SECTION 8.04. Costs and Expenses		107
SECTION 8.05. Right of Set-off		109
SECTION 8.06. Binding Effect		109
SECTION 8.07. Assignments and Participations		109
SECTION 8.08. Execution in Counterparts		113

 

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SECTION 8.09. No Liability of the Issuing Bank		113
SECTION 8.10. Confidentiality		114
SECTION 8.11. Release or Subordination of Collateral/Release of Guarantor		114
SECTION 8.12. Collateral Matters Relating to Related Obligations		114
SECTION 8.13. Jurisdiction, Etc.		115
SECTION 8.14. Governing Law		116
SECTION 8.15. Waiver of Jury Trial		116
SECTION 8.16. Agreement to Comply With Court Order		116
SECTION 8.17. Patriot Act Notice		116

 

SCHEDULES
Schedule I			-	Commitments and Applicable Lending Offices
Schedule II			-	Guarantors
Schedule III			-	Eligible Receivables Matters
Schedule IV			-	Receivable Obligor Matters
Schedule 1.01			-	Existing Letters of Credit
Schedule 4.01(a)			-	Equity Investors
Schedule 4.01(b)			-	Subsidiaries
Schedule 4.01(f)			-	Disclosed Litigation
Schedule 4.01(k)			-	Plans, Multiemployer Plans and Welfare Plans
Schedule 4.01(l)			-	Environmental Disclosure
Schedule 4.01(m)			-	Open Years
Schedule 4.01(o)			-	Surviving Debt
Schedule 4.01(p)			-	Liens
Schedule 4.01(q)(1)			-	Leased Real Property (Lessee)
Schedule 4.01(q)(2)			-	Leased Real Property (Lessor)
Schedule 4.01(r)			-	Investments
Schedule 4.01(s)			-	Intellectual Property
Schedule 4.01(t)			-	Material Contracts
Schedule 5.02(a)(iii)				Elk Liens
Schedule 5.02(b)(iii)(D)				Elk Debt
Schedule 5.02(e)			-	Excluded Assets
Schedule 8.02			-	Addresses
EXHIBITS
Exhibit A	-	Form of Revolving Credit Note
Exhibit B	-	Form of Notice of Borrowing
Exhibit C	-	Form of Assignment and Acceptance
Exhibit D	-	Form of Solvency Certificate
Exhibit E	-	Approval Order
Exhibit F	-	Form of Borrowing Base Certificate
Exhibit G	-	Form of Opinion of Counsel to the Loan Parties
Exhibit H	-	Form of Opinion of General Counsel to BMCA
Exhibit I	-	Form of Security Agreement
Exhibit J	-	Form of Guaranty

 

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REVOLVING CREDIT AGREEMENT

 

CREDIT AGREEMENT (this “ Agreement ”) dated as of February 22, 2007 among BUILDING MATERIALS CORPORATION OF AMERICA, a Delaware corporation (the “ BMCA ”), BMCA ACQUISITION INC., a Delaware corporation (“ BMCA Acquisition ”) and BMCA ACQUISITION SUB INC., a Delaware corporation (“ BMCA Acquisition Sub ” and together with BMCA and BMCA Acquisition, collectively, the “ Borrowers ” and each a “ Borrower ”), the banks, financial institutions and other institutional lenders listed on the signature pages hereof as Initial Lenders (the “ Initial Lenders ”), the financial institution listed on the signature pages hereof as the Initial Issuing Bank (the “ Initial Issuing Bank ”) and the financial institution listed on the signature pages hereof as the Initial Swing Line Bank (the “ Initial Swing Line Bank ” and, together with the Initial Lenders and the Initial Issuing Bank, the “ Initial Lender Parties ”), DEUTSCHE BANK AG NEW YORK BRANCH (“ DBNY ”), as agent for the Secured Parties (as hereinafter defined) (in such capacity, together with any successor collateral agent appointed pursuant to Article VII, the “ Collateral Monitoring Agent ”), and as administrative agent (in such capacity, together with any successor administrative agent appointed pursuant to Article VII, the “ Administrative Agent ”), DEUTSCHE BANK SECURITIES INC., BEAR STEARNS & CO. INC. and J.P. MORGAN SECURITIES INC., as joint lead arrangers (in such capacities, the “ Joint Lead Arrangers ”) and joint book managers, BEAR STEARNS & CO. INC., as syndication agent (the “ Syndication Agent ”), and J.P. MORGAN SECURITIES INC., as documentation agent (the “ Documentation Agent ”, and together with the Collateral Monitoring Agent, the Administrative Agent, the Joint Lead Arrangers and the Syndication Agent, collectively the “ Agents ”), for the Lender Parties (as hereinafter defined).

 

PRELIMINARY STATEMENTS:

 

(1)           The Borrowers have requested and the Initial Lenders have agreed to establish a $600,000,000 revolving credit facility on the terms and conditions set forth therein. The Borrowers are concurrently (a) entering into a $975,000,000 Term Loan Agreement (such Term Loan Agreement, as amended, restated, supplemented or otherwise modified, replaced or refinanced, the “ Term Loan Facility ”) with Deutsche Bank AG New York Branch, as administrative agent, and the other financial institutions party thereto and (b) entering into a $325,000,000 Bridge Loan Agreement (such Bridge Loan Agreement, as amended, restated, supplemented or otherwise modified, replaced or refinanced the “ Bridge Loan Facility ”) with Deutsche Bank AG Cayman Islands Branch, as collateral agent and as administrative agent, and the other financial institutions party thereto. A substantial portion of the proceeds of the Revolving Credit Facility (as hereinafter defined), the Term Loan Facility and the Bridge Loan Facility will be used to finance the acquisition, including through a tender offer (the “ Tender Offer ”), by BMCA Acquisition Sub, a wholly-owned Subsidiary of BMCA Acquisition, which is a wholly-owned Subsidiary of BMCA, of not less than a majority of the common stock, $1.00 par value (the “ Company Stock ”), of ElkCorp, a Delaware corporation (“ Elk ”), and the refinancing of substantially all the indebtedness of BMCA. Following the consummation of the Tender Offer, BMCA will cause BMCA Acquisition Sub to merge into Elk (the “ Merger ”) thereby acquiring the balance of the Company Stock and will refinance substantially all of the outstanding indebtedness of Elk (collectively, the Revolving Credit Facility, the Term Loan

 

 

Facility, the Bridge Loan Facility, the Tender Offer, the acquisition of the Option Stock (as hereinafter defined), such refinancings and the Merger, the “ Transaction ”).

 

(2)           BMCA currently has certain outstanding Debt (as hereinafter defined), including, (i) Debt under the Existing Credit Agreement (as hereinafter defined), (ii) certain 8% senior notes due 2007 (the “ 2007 Notes ”), (iii) certain 8% senior notes due 2008 (the “ 2008 Notes ”) and (iv) certain 7.75% senior notes due 2014 (the “ 2014 Notes ”).

 

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

 

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

 

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

 

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

 

“ Administrative Agent’s Account ” means the account of the Administrative Agent as the Administrative Agent shall specify in writing to the Lender Parties from time to time.

 

“ Advance ” means a Revolving Credit Advance, a Swing Line Advance or a Letter of Credit Advance.

 

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

 

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

 

“ Amortization Basket ” means $25,000,000 in the aggregate in each Fiscal Year.

 

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

 

“ Applicable Margin ” means (a) as of any date during the period commencing on the Closing Date and ending on June 30, 2007, equal to (i) 0.50% per annum in the case of Base Rate Advances and (ii) 1.50% per annum in the case of Eurodollar Rate

 

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Advances and (b) as of any date thereafter, a rate per annum equal to the rate set forth below opposite the average daily Availability for the four fiscal quarters ending on the last day of the fiscal quarter preceding such date (with the Applicable Margin as of June 30, 2007, September 30, 2007 and December 31, 2007 being determined on the basis of the average daily Availability from the Closing Date to the date of determination):

 

Applicable Margin

 

 

If the Revolving Credit Commitments are increased pursuant to Section 2.17, the amounts set forth above shall ratably increase with such increase, and if the Revolving Credit Commitments shall thereafter be decreased pursuant to Section 2.05, the amounts set forth above shall ratably decrease with such decrease but not below the levels set forth above.

 

“ Applied Credits ” means credit balances that reduce the principal balance of non-delinquent Receivables of the Loan Parties owed by a particular obligor, to offset delinquent Receivables from such obligor which have been disputed and determined not to be owed by such obligor.

 

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

 

“ Assignment and Acceptance ” means an assignment and acceptance entered into by a Lender Party and an Eligible Assignee, and accepted by the Administrative Agent, in accordance with Section 8.07 and in substantially the form of Exhibit C hereto.

 

“ Availability ” means, as of any date of determination, (a) the lesser of (i) the aggregate Revolving Credit Commitments or (ii) the Loan Value (as most recently reported by the Borrowers to the Administrative Agent), minus (b) the sum of (x) the aggregate amount of outstanding Advances and (y) the aggregate Available Amount of all outstanding Letters of Credit.

 

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

 

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“ Available Liquidity ” means, on any date of determination, the sum of (i) the Availability, and (ii) cash and Cash Equivalents held by BMCA and its Subsidiaries (so long as such cash and Cash Equivalents are under the control of, and subject to a first priority perfected security interest in favor of, the Collateral Monitoring Agent for the benefit of the Secured Parties).

 

“ Base Rate ” means a fluctuating interest rate per annum in effect from time to time, which rate per annum shall at all times be equal to the higher of (i) the Prime Lending Rate and (ii) ½ of 1% per annum in excess of the overnight Federal Funds Rate at such time.

 

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

 

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

 

“ BMCA Acquisition Sub ” has the meaning specified in the recital of parties to this Agreement.

 

“ BMCA Holdings ” means BMCA Holdings Corporation, a Delaware corporation.

 

“ Board of Directors ” means, with respect to any Person, (i) in the case of any corporation, the board of directors of such Person, (ii) in the case of any limited liability company, the managers of such person, (iii) in the case of any limited partnership with a corporate general partner, the Board of Directors of the general partner of such Person and (iv) in any other case, the functional equivalent of the foregoing.

 

“ Borrower ” and “ Borrowers ” have the meaning specified in the recital of parties to this Agreement and shall include after the date of the Merger, Elk as the successor to BMCA Acquisition Sub.

 

“ Borrowers’ Account ” means the account of BMCA maintained by BMCA with Citibank, N.A. at its office at 399 Park Avenue, New York, New York 10043, Account No. NY DDA 30541035 Building Material Corporation of America, or such other account as BMCA shall specify in writing to the Administrative Agent.

 

“ Borrowing ” means a Revolving Credit Borrowing or a Swing Line Borrowing.

 

“ Borrowing Base Certificate ” means a certificate in substantially the form of Exhibit F hereto, duly certified by a Responsible Financial Officer of BMCA.

 

“ Bridge Loan Facility ” has the meaning specified in the preliminary statements to this Agreement.

 

“ Business Day ” means a day of the year on which banks are not required or authorized by law to close in New York City and, if the applicable Business Day relates

 

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to any Eurodollar Rate Advances, on which dealings are carried on in the London interbank market.

 

“ Capital Expenditures ” means, for any Person for any period, all expenditures made, directly or indirectly, by such Person or any of its Subsidiaries during such period for equipment, fixed assets, real property or improvements, or for replacements or substitutions therefor or additions thereto, that have been or should be, in accordance with GAAP, reflected as additions to property, plant or equipment on a Consolidated balance sheet of such Person, provided, however , that with respect to BMCA or any of its Subsidiaries as of the date hereof and prior to giving effect to the Tender Offer, Capital Expenditures shall not include such additions for an aggregate purchase price of up to $40,000,000 attributable to the purchase of assets that are subject to operating leases in effect as of the date hereof.

 

“ Capital Stock ” of any Person means, for use in the definition of “Wholly-Owned Non Recourse Subsidiary, any and all shares, interests (including partnership interests), warrants, rights, options or other interests, participations or other equivalents of or interests in (however designated) equity of such Person, including common or preferred stock, whether now outstanding or issued after July 26, 2004, but excluding any debt securities convertible into or exchangeable for such equity.

 

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

 

“ Cash Collateral Account ” has the meaning specified in the Security Agreement.

 

“ Cash Discount Reserves ” means those reserves against the principal balance of Receivables of the Loan Parties which represents anticipated cash discounts, as such reserves are reflected in the general ledger of such Loan Parties in accordance with their customary practice and otherwise acceptable to the Administrative Agent.

 

“ Cash Equivalents ” means any of the following, to the extent owned by BMCA or any of its Subsidiaries free and clear of all Liens other than Liens created under the Collateral Documents or to secure Debt under the Term Loan Facility, the Bridge Loan Facility, the Existing Indentures or the Senior Notes Indenture (a) securities issued or fully guaranteed or insured by the United States government or any agency thereof, (b) certificates of deposit, eurodollar time deposits, overnight bank deposits and bankers’ acceptances of any commercial bank organized under the laws of the United States, any state thereof, the District of Columbia, any foreign bank, or its branches or agencies that, at the time of acquisition, are rated at least “A-1” by S&P or “P-1” by Moody’s, (c) commercial paper of an issuer rated at least “A-1” by S&P or “P-1” by Moody’s or (d) shares of any money market fund that (i) has at least 95% of its assets invested continuously in the types of investments referred to in clauses (a), (b) and (c) above, (ii) has net assets of not less than $500,000,000 and (iii) is rated at least “A-1” by S&P or “P-1” by Moody’s; provided, however , that the maturities of all obligations of the type specified in clauses (a), (b) and (c) above shall not exceed 360 days.

 

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“ Cash Management Services ” means any credit card services and any services arising under any agreement governing the provision of any treasury management services, any service terms or any service agreements, including electronic payment service terms and/or automated clearing house agreements, and all overdrafts on any account which BMCA or any of its Subsidiaries maintains with DBNY, any of the Lenders or any of their Affiliates.

 

“ Casualty Event ” means the disposition of property pursuant to a condemnation proceeding or the destruction of property as a result of casualty.

 

“ CERCLA ” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. 9601 et seq., as it may be as amended from time to time during the term of this Agreement.

 

“ Certain Permitted Dispositions ” means, with respect to any assets of any Loan Party, any sale, lease, transfer or other disposition in connection with the following: (i) sales of Inventory in the ordinary course of its business and the granting of any option or other right to purchase, lease or otherwise acquire Inventory in the ordinary course of its business; (ii) sales, transfers or other dispositions of assets among Loan Parties; (iii) any such transaction that constitutes an investment in a Non-Recourse Subsidiary or other Person that is not a Loan Party permitted under Section 5.02(f)(ii), (iv) any cash payment made by any Loan Party in the ordinary course of business; and (v) any Casualty Event.

 

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

 

“ Change of Control ” means the occurrence of any of the following:

 

(a)           prior to the time that at least 15% of the then outstanding Voting Interests of the Parent, BMCA, or any Subsidiary of the Parent of which BMCA is also a Subsidiary is publicly traded on a national securities exchange or in the NASDAQ (national market system), the Permitted Holders cease to be the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 of the Securities and Exchange Commission under the Securities Act of 1934, as amended), directly or indirectly, of majority voting power of the Voting Interests of BMCA, whether as a result of issuance of securities of BMCA or any of its Affiliates, any merger, consolidation, liquidation or dissolution of BMCA or any of its Affiliates, any direct or indirect transfer of securities by any Permitted Holder or by the Parent or any of its Subsidiaries or otherwise (for purposes of this clause (a) and clause (b) below, the Permitted Holders shall be deemed to beneficially own any Voting Interests of a corporation (the “specified corporation”) held by any other corporation (the “parent corporation”) so long as the Permitted Holders beneficially own (as so defined), directly or indirectly, a majority of the Voting Interests of the parent corporation);

 

(b)           any “Person” (as such term is used in sections 13(d) and 14(d) of the Securities and Exchange Commission under the Securities Exchange Act of

 

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1934, as amended), other than one or more Permitted Holders, is or becomes the beneficial owner (as defined in clause (a) above, except that a Person shall be deemed to have “beneficial ownership” of all shares that any such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 35% of the Voting Interest or Parent or BMCA; provided that the Permitted Holders beneficially own (as defined in clause (a) above), directly or indirectly, in the aggregate a lesser percentage of the Voting Interests of the Parent or BMCA than such other Person and do not have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the Board of Directors of Parent or BMCA; or

 

(c)           during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of BMCA (together with any new directors whose election by such Board or whose nomination for election by the shareholders of BMCA including predecessors, was approved by a vote of a majority of the directors of BMCA then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of BMCA then in office.

 

“ Closing Date ” has the meaning specified in Section 3.01.

 

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

 

“ Collateral Agency Agreement ” means the Collateral Agency Agreement dated as of the date hereof among DBNY, as administrative agent under the Term Loan Facility, each trustee under the Existing Indentures, and the Collateral Agreement Agent, as the same may be amended, restated, supplemented, replaced or otherwise modified.

 

“ Collateral Agreement Agent ” means DBTCA, in its capacity as agent under the Collateral Agency Agreement, and any successor thereof in such capacity.

 

“ Collateral Documents ” means the Security Agreement, each of the collateral documents, instruments and agreements delivered pursuant to Section 3.01 or Section 5.01(j), and each other agreement that creates or purports to create a Lien in favor of the Collateral Monitoring Agent for the benefit of the Secured Parties as the same may be amended, restated, supplemented, replaced or otherwise modified.

 

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

 

“ Commitment ” means a Revolving Credit Commitment or a Letter of Credit Commitment.

 

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“ Company Stock ” has the meaning specified in the preliminary statements to this Agreement.

 

“ Confidential Information ” means information that any Loan Party furnishes to any Agent or any Lender Party on a confidential basis, but does not include any such information that is or becomes generally available to the public other than as a result of a breach by such Agent or any Lender Party of its obligations hereunder or that is or becomes available to such Agent or such Lender Party from a source other than the Loan Parties that is not, to the best of such Agent’s or such Lender Party’s knowledge, acting in violation of a confidentiality agreement with a Loan Party.

 

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

 

“ Consolidated Net Income (Loss) ” means, with respect to BMCA, the consolidated net income (or loss) of BMCA and its Consolidated Subsidiaries (which shall include for the purpose of this definition, any Non-Material Subsidiary and any Non-Recourse Subsidiary) for such period as determined in accordance with GAAP, adjusted to the extent included in calculating such net income (or loss), by excluding: (i) all extraordinary gains or losses in such period; (ii) net income (or loss) of any other Person attributable to any period prior to the date of combination of such other Person with such Person or any of its Subsidiaries on a “pooling of interests” basis; (iii) net gains or losses in respect of dispositions of assets by such Person or any of its Subsidiaries (including pursuant to a sale-and-leaseback arrangement) other than in the ordinary course of business; (iv) the net income (loss) of any Subsidiary of such Person to the extent that the declaration of dividends or distributions by that Subsidiary of that income is not at the time permitted, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its shareholders; (v) the net income (or net loss) of any other Person that is not a Subsidiary of the first Person with respect to which Consolidated Net Income is being calculated (the “first Person”) and in which any other Person (other than such first Person and/or any of its Subsidiaries) has an equity interest or of a Non-Recourse Subsidiary of such first Person, except to the extent of the amount of dividends or other distributions actually paid or made to such first Person or any of its Subsidiaries by such other Person during such period (subject, in the case of a dividend or distribution received by a Subsidiary of such first Person, to the limitations contained in clause (iv) above); (vi) any interest income resulting from loans or investments in Affiliates (other than Subsidiaries), other than cash interest income actually received; (vii) costs and expenses incurred in connection with or as a result of the consummation of the Tender Offer or the Merger; (viii) non-recurring, non cash charges, including any write-offs, write-downs or impairment charges; and (ix) the cumulative effect of a change in accounting principles. In determining Consolidated Net Income (Loss), gains or losses resulting from the early retirement, extinguishment or refinancing of indebtedness for money borrowed, including any fees and expenses associated therewith, shall be deducted or added back, respectively.

 

“ Contingent Obligation ” means, with respect to any Person, any Obligation or arrangement of such Person to guarantee or with the effect of guaranteeing any

 

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Obligations constituting Debt (“ primary obligations ”) of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly. The amount of any such Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the anticipated liability in respect thereof (assuming such Person is required to perform thereunder), as determined by such Person in accordance with generally accepted accounting principles.

 

“ Conversion ”, “ Convert ” and “ Converted ” each refer to a conversion of Advances of one Type into Advances of the other Type pursuant to Section 2.09 or 2.10.

 

“ Creditors’ Committee ” means any official committee of creditors appointed in G-I Holdings’ bankruptcy proceedings.

 

“ Current Assets ” of any Person means all assets of such Person that would, in accordance with GAAP, be classified as current assets of a company conducting a business the same as or similar to that of such Person, after deducting adequate reserves in each case in which a reserve is proper in accordance with GAAP.

 

“ DBCA ” means Deutsche Bank AG Cayman Islands Branch.

 

“ DBNY ” has the meaning specified in the recitals of parties to this Agreement.

 

“ DBTCA ” means Deutsche Bank Trust Company Americas.

 

“ Debt ” of any Person means, without duplication, (a) all Debt for Borrowed Money, (b) all Obligations of such Person for the deferred purchase price of property or services (other than trade payables and other accrued current liabilities incurred in the ordinary course of such Person’s business and either (i) not overdue (to the knowledge of BMCA exercising reasonable diligence) by more than the later to occur of (A) 90 days from the due date thereof and (B) 30 days from the date BMCA becomes aware (exercising reasonable diligence) that such liability is overdue, or (ii) are being contested in good faith in an appropriate manner), (c) all Obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all Obligations of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person, (e) all Obligations of such Person as lessee under Capitalized Leases, (f) all Obligations of such Person under acceptance, letter of credit or similar facilities, (g) all Obligations (other than pursuant to the 2001 Long Term Incentive Plan in effect on the date hereof or similar plans) of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interests in such Person or any other Person or any warrants, rights or options to acquire such Equity Interests on or prior to the fifth anniversary of the Closing Date, valued, in the case of Redeemable Preferred Interests, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, (h) all Contingent Obligations and Off-Balance Sheet Obligations of such Person, and (i) all indebtedness and other

 

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payment Obligations referred to in clauses (a) through (h) above of another Person secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property (including accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness or other payment Obligations.

 

“ Debt for Borrowed Money ” of any Person means, at any date of determination, all items that, in accordance with GAAP, would be classified as long term debt (and current portions thereof) on a Consolidated balance sheet of such Person at such date.

 

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

 

“ Default Interest ” has the meaning set forth in Section 2.07(b).

 

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

 

“ Defaulted Amount ” means, with respect to any Lender Party at any time, any amount required to be paid by such Lender Party to any Agent or any other Lender Party hereunder or under any other Loan Document at or prior to such time that has not been so paid as of such time, including any amount required to be paid by such Lender Party to (a) the Swing Line Bank pursuant to Section 2.02(b) to purchase a portion of a Swing Line Advance made by the Swing Line Bank, (b) the Issuing Bank pursuant to Section 2.03(c) to purchase a portion of a Letter of Credit Advance made by the Issuing Bank, (c) the Administrative Agent pursuant to Section 2.02(e) to reimburse the Administrative Agent for the amount of any Advance made by the Administrative Agent for the account of such Lender Party, (d) any other Lender Party pursuant to Section 2.13 to purchase any participation in Advances owing to such other Lender Party and (e) any Agent or the Issuing Bank pursuant to Section 7.05 to reimburse such Agent or the Issuing Bank for such Lender Party’s ratable share of any amount required to be paid by the Lender Parties to such Agent or the Issuing Bank as provided therein. In the event that a portion of a Defaulted Amount shall be deemed paid pursuant to Section 2.15(b), the remaining portion of such Defaulted Amount shall be considered a Defaulted Amount originally required to be paid hereunder or under any other Loan Document on the same date as the Defaulted Amount so deemed paid in part.

 

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“ Defaulting Lender ” means, at any time, any Lender Party that, at such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall take any action or be the subject of any action or proceeding of a type described in Section 6.01(f).

 

“ Dilution Reserves ” means reserves against the principal balance of Receivables of the Loan Parties, reflecting a variety of items including expected pricing disputes, returned goods, short shipments, freight claims, bad debts, and warranty deductions that exceed an amount equal to 5% of the aggregate balance at such time of all Eligible Receivables prior to giving effect to such Dilution Reserves.

 

“ Disclosed Litigation ” has the meaning specified in Section 4.01(f).

 

“ DJ Action ” means (a) the adversary proceeding filed by G-I Holdings in the United States Bankruptcy Court for the District of New Jersey on February 27, 2001 against the Creditors’ Committee in the G-I Holdings bankruptcy proceedings, consisting of an action seeking declaratory judgment that BMCA has no successor liability for asbestos claims against G-I Holdings and that BMCA is not the alter ego of G-I Holdings, and (b) the subsequent litigation associated with such action.

 

“ Documentation Agent ” has the meaning specified in the recital of parties to this Agreement and collectively includes such other entities as hereafter may be designated as such by the Joint Lead Arrangers after consulting with BMCA.

 

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

 

“ EBITDA ” means with respect to BMCA and its Consolidated Subsidiaries (which shall include for the purpose of this definition, any Non-Material Subsidiary and any Non-Recourse Subsidiary), at any date of determination, Consolidated Net Income (Loss):

 

(a) plus determined on a Consolidated basis for BMCA, without duplication, the sum of (i) interest expense, (ii) income tax expense, (iii) depreciation expense, and (iv) amortization expense,

 

(b)  plus restructuring, integration and other non-recurring costs and expenses which were not previously included as an adjustment to Consolidated Net Income (Loss), provided, however , that the amount of such costs and expenses are set forth in reasonable detail in a certificate to the Administrative Agent,

 

(c) plus any minority interest in any non-Wholly-Owned Recourse Subsidiary that is otherwise Consolidated in the financial statements of BMCA.

 

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“ Eligible Assignee ” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; (d) a commercial bank organized under the laws of the United States, or any State thereof, and having total assets in excess of $2,000,000,000; (e) a savings and loan association or savings bank organized under the laws of the United States, or any State thereof, and having total assets in excess of $2,000,000,000; (f) a commercial bank organized under the laws of any other country that is a member of the OECD or has concluded special lending arrangements with the International Monetary Fund associated with its General Arrangements to Borrow or of the Cayman Islands, or a political subdivision of any such country, and having total assets in excess of $2,000,000,000, so long as such bank is acting through a branch or agency located in the country in which it is organized or another country that is described in this clause (f); (g) the central bank of any country that is a member of the OECD; (h) a finance company, insurance company or other financial institution or fund (whether a corporation, partnership, trust or other entity) that is engaged in making, purchasing or otherwise investing in commercial loans in the ordinary course of business and having a combined capital and surplus of at least $250,000,000 and (i) any other Person (other than a natural person) approved by the Administrative Agent, the Issuing Bank and, so long as no Event of Default shall have occurred and be continuing at the time of effectiveness of such assignment, BMCA (which approvals shall not be unreasonably withheld); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include BMCA or any of its Affiliates or Subsidiaries or any of its competitors.

 

“ Eligible Collateral ” means, collectively, Eligible Inventory, Eligible Precious Metals and Eligible Receivables, provided, however , that no such assets of Elk and its Subsidiaries shall be included as Eligible Collateral until the Merger has been consummated and the Joint Lead Arrangers have received a reasonably satisfactory field examination and inventory appraisal with respect to such assets of Elk and its Subsidiaries.

 

“ Eligible Inventory ” means the Inventory of the Loan Parties including raw materials, work-in-process, finished goods, parts and supplies (a) that is owned by a Loan Party, (b) with respect to which the Collateral Monitoring Agent has a valid, perfected and enforceable Lien, (c) with respect to which the representations and warranties applicable to such Inventory contained in any Loan Document are true and correct in all material respects, (d) that is not obsolete, unmerchantable, unusable or otherwise unavailable for sale, and (e) with respect to which (in respect of any Inventory labeled with a brand name or trademark and sold by the applicable Loan Party pursuant to a trademark owned by such Loan Party or a license granted to such Loan Party) the Collateral Monitoring Agent would have rights under such trademark or license pursuant to the Security Agreement or other agreement satisfactory to the Administrative Agent to sell such Inventory in connection with a liquidation thereof and, in each case, that the Administrative Agent deems to be Eligible Inventory based on such credit and collateral considerations as the Administrative Agent may, in its sole discretion exercised reasonably, deem appropriate for this transaction. The value of such Inventory shall be determined by the Administrative Agent in its sole discretion taking into consideration, among other factors, the lowest of its cost, its book value determined in accordance with GAAP and its Net Orderly Liquidation Value. By way of example only, and without

 

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limiting the discretion of the Administrative Agent to consider any Inventory not to be Eligible Inventory, the Administrative Agent will consider any of the following classes of Inventory not to be Eligible Inventory;

 

(i)            Inventory located on leaseholds as to which the lessor has not entered into a consent and agreement providing the Collateral Monitoring Agent with the right to receive notice of default, the right to repossess such Inventory at any time and such other rights as may be acceptable to the Collateral Monitoring Agent unless a reserve satisfactory to the Administrative Agent shall have been established with respect thereto;

 

(ii)           Inventory consisting of promotional, marketing, packaging or shipping materials and supplies;

 

(iii)          Inventory that fails to meet all standards imposed by any governmental agency, or department or division thereof, having regulatory authority over such Inventory or its use or sale;

 

(iv)          Inventory located outside the United States and Canada;

 

(v)           Subject to clause (i) above, Inventory that is not in the possession of or under the sole control of the Loan Parties; and

 

(vi)          Inventory in respect of which the Security Agreement, after giving effect to the related filings of financing statements that have then been made, if any, does not or has ceased to create a valid and perfected first priority lien or security interest in favor of the Collateral Monitoring Agent for the benefit of the Secured Parties securing the Secured Obligations.

 

“ Eligible Precious Metals ” means the platinum and rhodium of the Loan Parties (a) that is owned by a Loan Party, (b) with respect to which the representations and warranties applicable to such platinum and rhodium contained in any Loan Document are true and correct in all material respects, (c) with respect to which the Loan Parties have maintained reporting requirements and controls as to the custody of such metals that are satisfactory to the Administrative Agent, and, in each case, that the Administrative Agent deems to be Eligible Precious Metals based on such credit and collateral considerations as the Administrative Agent may, in its sole discretion exercised reasonably, deem appropriate for this transaction and for such assets. The value of such precious metals shall be determined by the Administrative Agent in its sole discretion taking into consideration any and all factors the Administrative Agent may deem appropriate for such purposes. By way of example only, and without limiting the discretion of the Administrative Agent to consider any precious metals not to be Eligible Precious Metals, the Administrative Agent will consider any of the following classes of precious metals not to be Eligible Precious Metals:

 

(i)            precious metals located anywhere other than on property owned by a Loan Party at its Nashville, Tennessee plant;

 

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(ii)           precious metals that are not in the possession of or under the sole control of the Loan Parties; and

 

(iii)          precious metals in respect of which the Security Agreement, after giving effect to the related filings of financing statements that have then been made, if any, does not or has ceased to create a valid and perfected first priority lien or security interest in favor of the Collateral Monitoring Agent for the benefit of the Secured Parties securing the Secured Obligations.

 

“ Eligible Receivables ” means only such Receivables of the Loan Parties as the Administrative Agent, in its sole discretion, exercised reasonably based on credit and collateral considerations appropriate for this transaction, shall from time to time elect to consider Eligible Receivables for purposes of this Agreement. The value of such Receivables shall be determined by the Administrative Agent in its sole discretion taking into consideration, among other factors, their book value determined in accordance with GAAP, subject to such reserves as may be established by the Administrative Agent using criteria customary for Receivables of a similar nature (including Specified Deductions), and deemed appropriate for this transaction by the Administrative Agent using criteria customary for Receivables of a similar nature. By way of example only, and without limiting the discretion of the Administrative Agent to consider any Receivables not to be Eligible Receivables, the Administrative Agent will consider any of the following classes of Receivables not to be Eligible Receivables:

 

(a)           Receivables that do not arise out of sales of goods or rendering of services in the ordinary course of the business of the Loan Parties;

 

(b)           Receivables on terms other than those normal or customary in the business of the Loan Parties;

 

(c)           Receivables owing from any Person that is an Affiliate of any Loan Party or any of its Subsidiaries;

 

(d)           Receivables more than 105 days past the original invoice date or more than 30 days past the date due; except as specified on Schedule III hereto;

 

(e)           Receivables that are extended, rewritten, waived, restructured, or otherwise modified from time to time;

 

(f)            Receivables owing from any Person from which an aggregate amount of more than 25% of the Receivables owing is more than 30 days past due;

 

(g)           Receivables owing from any Person that (i) has disputed liability for any Receivable owing from such Person or (ii) has otherwise asserted any claim, demand or liability against any Loan Party or any of its Subsidiaries, whether by action, suit, counterclaim or otherwise, but only to the extent of such claim, demand or liability;

 

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(h)           Receivables owing from any Person that shall take or be the subject of any action or proceeding of a type described in Section 6.01(f);

 

(i)            Receivables (i) owing from any Person that is also a supplier to or creditor of any Loan Party to the extent of the amount of any right of set-off, unless such Person has waived all rights of set-off in a manner acceptable to the Administrative Agent or (ii) representing any manufacturer’s or supplier’s credits, discounts, incentive plans or similar arrangements entitling any Loan Party to discounts on future purchase therefrom;

 

(j)            Receivables arising out of sales to account debtors outside the United States or Canada unless the sale is on letter of credit or acceptance terms reasonably acceptable to the Administrative Agent;

 

(k)           Receivables arising out of sales on a bill-and-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis or subject to any right of return, set-off or charge-back;

 

(l)            Receivables owing from an account debtor that is an agency, department or instrumentality of the United States or any State thereof unless the Borrowers shall have satisfied the requirements of the Assignment of Claims Act of 1940, as amended, and any similar state legislation;

 

(m)          Receivables the full and timely payment of which the Administrative Agent in accordance with its customary criteria and in its sole discretion believes is likely not to occur;

 

(n)           Receivables not evidenced by an invoice or other writing in form and substance reasonably satisfactory to the Administrative Agent;

 

(o)           Receivables with respect to which the representations and warranties set forth in the Transaction Documents applicable to Receivables are not true and correct;

 

(p)           (i) Except as set forth on Schedule IV, so long as Home Depot or any other Receivables Obligor has long-term unsecured debt ratings of at least “BBB-” and “Baa3” (in each case with stable outlooks) from S&P and Moody’s, respectively, Receivables owing from such Receivables Obligor in excess of 25% of all Eligible Receivables, and (ii) in any circumstance where clause (i) is not applicable, Receivables owing from such Receivables Obligor in excess of 15% of all Eligible Receivables;

 

(q)           Receivables in respect of which the Collateral Documents, after giving effect to the related filings of financing statements that have then been made, if any, do not or have ceased to create a valid and perfected first priority lien or security interest in favor of the Collateral Monitoring Agent for the benefit of the Secured Parties securing the Secured Obligations; and

 

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(r)            Receivables owing from an account debtor located in New Jersey unless, at such time, the Loan Party to which such Receivables are owed has provided satisfactory evidence to the Administrative Agent of such Loan Party’s qualification to do business as a corporation in such state.

 

“ Elk ” has the meaning specified in the preliminary statements to this Agreement.

 

“ Elk Letters of Credit ” means the letters of credit issued for the account of Elk or any of its Subsidiaries which are outstanding as of the date of the Merger.

 

“ Elk Material Adverse Effect ” means any fact, circumstance, event, change, effect or occurrence since June 30, 2006 that has or would be reasonably likely to have a material adverse effect on the business, results of operation or financial condition of Elk and its Subsidiaries, taken as a whole, but, in any case, shall not include facts, circumstances, events, changes, effects or occurrences (a) generally affecting the industries in which Elk and its Subsidiaries operate (including general pricing changes), or the economy or the financial or securities markets in the United States or elsewhere in the world (including any regulatory and political conditions or developments, or any outbreak or escalation of hostilities, declared or undeclared acts of war or terrorism), except to the extent any fact, circumstance, event, change, effect or occurrence that, relative to other industry participants, disproportionately impacts the assets, properties, business, results of operation or financial condition of Elk and its Subsidiaries, taken as a whole, (b) resulting from the announcement of (i) the proposal of the Tender Offer or (ii) the Transaction or (c) resulting from any litigation related to the proposed Tender Offer or the Transaction and provided , that any failure to meet internal or published projections, forecasts or revenue or earning predictions for any period shall not, in and of itself, constitute an Elk Material Adverse Effect.

 

“ Elk Private Notes ” means the 4.69% Senior Notes due 2007, the 6.28% Senior Notes due 2014, the 6.99% Senior Notes, Series A, due 2009 and the 7.49% Senior Notes, Series B, due 2012 issued by Elk in private placement offerings.

 

“ Environmental Action ” means any action, suit, written demand, demand letter, written claim, notice of non-compliance or violation, written notice of liability or potential liability, investigation, proceeding, consent order or consent agreement relating to any Environmental Laws or Environmental Permits or arising from alleged injury or threat to human health, safety or the environment, including (a) by any governmental or regulatory authority for enforcement, cleanup, removal, response, remedial or other actions or damages and (b) by any governmental or regulatory authority or third party for damages, contribution, indemnification, cost recovery, compensation or injunctive relief.

 

“ Environmental Law ” means any applicable international, Federal, state, local or foreign statute, law, ordinance, rule, regulation, code, order, writ, judgment, injunction, decree or judicial or enforceable administrative agency interpretation, policy or guidance relating to pollution or protection of the environment, human health, safety or natural resources, including those relating to the use, handling, transportation, treatment, manufacture, generation, storage, disposal, release or discharge of Hazardous Materials.

 

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

 

“ Equity Interests ” means, with respect to any Person, any and all shares, interests (including preferred interests), warrants, rights, options or other interests, participations or other equivalents of or interests in (however designated) equity of such Person, including common or preferred stock, whether now outstanding or issued after the date hereof, but excluding any debt securities convertible into or exchangeable for such equity.

 

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

 

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

 

“ ERISA Event ” means (a)(i) the occurrence of a reportable event, within the meaning of Section 4043 of ERISA, with respect to any Plan unless the 30-day notice requirement with respect to such event has been waived by the PBGC or by ERISA or (ii) the requirements of Section 4043(b) of ERISA apply with respect to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably expected to occur with respect to such Plan within the following 30 days; (b) the application for a minimum funding waiver with respect to a Plan; (c) the provision by the administrator of any Plan of a notice of intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA); (d) the cessation of operations at a facility of any Loan Party or any ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (e) the withdrawal by any Loan Party or any ERISA Affiliate from a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions for imposition of a lien under Section 302(f) of ERISA shall have been met with respect to any Plan; (g) the adoption of an amendment to a Plan requiring the provision of security to such Plan pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence of any event or condition described in Section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, such Plan.

 

“ Escrow Bank ” has the meaning specified in Section 2.15(c).

 

“ Eurocurrency Liabilities ” has the meaning specified in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

 

“ Eurodollar Lending Office ” means, with respect to any Lender Party, the office of such Lender Party specified as its “Eurodollar Lending Office” opposite its name on

 

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Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender Party (or, if no such office is specified, its Domestic Lending Office), or such other office of such Lender Party as such Lender Party may from time to time specify to BMCA and the Administrative Agent.

 

“ Eurodollar Rate ” means the rate per annum obtained by dividing (i)(a) the per annum rate that appears on page 3750 of the Dow Jones Market Screen (or any successor page) for Dollar deposits with maturities comparable to the Interest Period applicable to the Eurodollar Rate Advance subject to the respective Borrowing commencing two Business Days thereafter as of 10:00 A.M. (New York time) on the date which is two Business Days prior to the commencement of the respective Interest Period or (b) if such rate does not appear on page 3750 of the Dow Jones Markets Screen (or any successor page), the offered quotations to first-class banks in the New York interbank Eurodollar market by the Administrative Agent for Dollar deposits of amounts in immediately available funds comparable to the outstanding principal amount of the applicable Eurodollar Rate Advance (or as reasonably selected by the Administrative Agent) for which the Eurodollar Rate is being determined with maturities comparable to the Interest Period applicable to such Eurodollar Rate Advance commencing two Business Days thereafter as of 10:00 A.M. (New York time) on the applicable Interest Determination Date, divided (and rounded upward to the nearest 1/16 of 1%) by (ii) a percentage equal to 100% minus then stated maximum rate of all reserve requirements (including any marginal, emergency, supplemental, special or other reserves required by applicable law) applicable to any member bank of the Federal Reserve System in respect of Eurocurrency funding or liabilities as defined in Regulation D (or any successor category of liabilities under Regulation D).

 

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

 

“ Eurodollar Rate Reserve Percentage ” for any Interest Period for all Eurodollar Rate Advances comprising part of the same Borrowing means the reserve percentage applicable two Business Days before the first day of such Interest Period under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to any other category of liabilities that includes deposits by reference to which the interest rate on Eurodollar Rate Advances is determined) having a term equal to such Interest Period.

 

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

 

“ Excluded Assets ” has the meaning specified in Section 5.02(e)(iii).

 

“ Existing Credit Agreement ” means the Amended and Restated Credit Agreement, dated as of September 28, 2006, among BMCA and Citicorp USA, Inc., as administrative agent, and the financial institutions party thereto.

 

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“ Existing Indentures ” means collectively, (a) the Indenture, dated as of October 20, 1997, between BMCA and The Bank of New York (“ BNY ”), as trustee, pursuant to which the 2007 Notes were issued, (b) the Indenture, dated as of December 3, 1998, between BMCA and BNY, as trustee, pursuant to which the 2008 Notes were issued, and (c) the 2014 Notes Indenture, as each indenture described in the foregoing clauses (a) through (c) above has been amended, supplemented or otherwise modified from time to time as of the date hereof, and as each such indenture may be further amended, supplemented or otherwise modified from time to time as permitted under the Loan Documents.

 

“ Existing Letters of Credit ” means the letters of credit issued under the Existing Credit Agreement and that shall remain outstanding after the Closing Date and are listed on Schedule 1.01.

 

“ Extraordinary Receipt ” means any cash received by or paid to or for the account of any Person not in the ordinary course of business, including tax refunds, pension plan reversions, proceeds of insurance (including any key man life insurance but excluding proceeds of business interruption insurance to the extent such proceeds constitute compensation for lost earnings), condemnation awards (and payments in lieu thereof), indemnity payments and any purchase price adjustment received in connection with any purchase agreement.

 

“ Facility ” means the Revolving Credit Facility, the Swing Line Facility or the Letter of Credit Facility.

 

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

 

“ Federal Reserve Board ” means the Board of Governors of the United States Federal Reserve System, or any successor thereto.

 

“ Fee Letters ” means, collectively, (a) the senior secured financing fee letter dated January 26, 2007 among the Borrowers and Deutsche Bank AG New York Branch, Deutsche Bank Securities Inc., Bear Stearns Corporate Lending Inc., Bear Stearns & Co. Inc., JPMorgan Chase Bank, N.A. and J.P. Morgan Securities Inc., and (b) the senior secured financing agency fee letter dated January 26, 2007 between the Borrowers and Deutsche Bank AG New York Branch and Deutsche Bank Securities Inc., in each case as amended or superseded.

 

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“ Fiscal Year ” means a fiscal year of BMCA and its Consolidated Subsidiaries ending on December 31 in any calendar year.

 

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

 

“ Future G-I Letters of Credit ” means the Letters of Credit to be issued after the Closing Date for the benefit of G-I Holdings that do not constitute Initial G-I Holdings Letters of Credit. For the avoidance of doubt, issuances of Future G-I Letters of Credit, as well as renewals of Future G-I Letters of Credit (to the extent such renewals increase the stated amount of such Future G-I Letters of Credit), shall be deemed to be restricted distributions for purposes of Section 5.02(g).

 

“ GAAP ” has the meaning specified in Section 1.03.

 

“ G-I Holdings ” means G-I Holdings, Inc. a Delaware corporation.

 

“ G-I Holdings Tax Group ” means G-I Holdings and the corporations that in any tax year (ending before or after the Closing Date) join with G-I Holdings, BMCA, or any successor or predecessor thereof in filing a consolidated U.S. Federal income tax return as members of an affiliated group within the meaning of Section 1504(a)(1) of the Internal Revenue Code.

 

“ Governmental Authority ” means any nation or government, any state, province, city, municipal entity or other political subdivision thereof, and any governmental, executive, legislative, judicial, administrative or regulatory agency, department, authority, instrumentality, commission, board, bureau or similar body, whether Federal, state, provincial, territorial, local or foreign.

 

“ Governmental Authorization ” means any authorization, approval, consent, franchise, license, covenant, order, ruling, permit, certification, exemption, notice, declaration or similar right, undertaking or other action of, to or by, or any filing, qualification or registration with, any Governmental Authority.

 

“ Guarantors ” means BMCA and the Subsidiaries of BMCA listed on Schedule II hereto and each other Subsidiary of BMCA that shall be required to execute and deliver a guaranty pursuant to Section 5.01(j); provided, however , that neither Elk nor any of its Subsidiaries shall be required to be a Guarantor at any time prior to the consummation of the Merger; provided, further, that in any event any Subsidiary which is a guarantor with respect to the Existing Indentures or the Senior Notes shall be required to be a Guarantor hereunder.

 

“ Guaranty ” means the guaranty referred to in Section 3.01(a)(iii) as such guaranty may be amended, supplemented or otherwise modified from time to time.

 

“ Hazardous Materials ” means (a) petroleum or petroleum products, by-products or breakdown products, radioactive materials, asbestos-containing materials,

 

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polychlorinated biphenyls and radon gas and (b) any other chemicals, materials or substances designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant under any Environmental Law.

 

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

 

“ Hedge Bank ” means any Lender Party or an Affiliate of a Lender Party in its capacity as a party to a Hedge Agreement with BMCA or any other Loan Party, with the determination of whether a Person is a Lender Party or Affiliate of Lender Party being made at the later of the Closing Date or the date the Hedge Agreement is entered into.

 

“ Incremental Revolving Credit Commitment ” has the meaning specified in Section 2.17(a).

 

“ Incremental Revolving Credit Commitment Notice ” has the meaning specified in Section 2.17(a).

 

“ Indemnified Party ” has the meaning specified in Section 8.04(b).

 

“ Information Memorandum ” means an information memorandum to be delivered by BMCA in connection with the syndication of this Revolving Credit Facility after the Closing Date.

 

“ Initial G-I Holdings Letters of Credit ” means the Letters of Credit issued under the Existing Credit Agreement and any Letter of Credit to be issued on the Closing Date for the benefit of G-I Holdings, in an aggregate stated amount not to exceed $12,000,000, together with any renewals (so long as all requirements for renewal shall have been met) or replacement Letters of Credit, in each case, made simultaneously with the expiration, cancellation or other termination of the Initial G-I Holdings Letter of Credit so renewed or replaced, and made for the same purpose and for the same beneficiary as such Initial G-I Holdings Letter of Credit so renewed or replaced, provided that at no time shall the aggregate stated amount of all outstanding Initial G-I Holdings Letters of Credit exceed $12,000,000. For the avoidance of doubt, no Initial G-I Holdings Letter of Credit shall be deemed to be a restricted distribution for purposes of Section 5.02(g).

 

“ Initial Issuing Bank ”, “ Initial Lender Parties ”, “ Initial Lenders ” and “ Initial Swing Line Bank ” each has the meaning specified in the recital of parties to this Agreement.

 

“ Insufficiency ” means, with respect to any Plan, the amount, if any, of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.

 

“ Intercreditor Agreement ” means the Revolver Intercreditor Agreement, referred to in Section 3.01(a)(xix) among DBCA, as collateral agent under the Bridge Loan Facility, DBTCA, as Collateral Agreement Agent, and DBNY, as the Collateral Monitoring Agent, in each case as amended, supplemented or otherwise modified or replaced from time to time.

 

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“ Interest Coverage Ratio ” means, at any date of determination, the ratio of (a) EBITDA to (b) cash interest paid or required to be paid on, all Debt for Borrowed Money, in each case, of or by BMCA and its Consolidated Subsidiaries for the period of four consecutive fiscal quarters most recently ended with respect to which financial statements are required to have been delivered pursuant to this Agreement.

 

“ Interest Determination Date ” means, with respect to any Eurodollar Rate Advance, the second Business Day prior to the commencement of any Interest Period relating to such Eurodollar Rate Advance.

 

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

 

(a)           BMCA may not select any Interest Period with respect to any Eurodollar Rate Advance under a Facility that ends after any principal repayment installment date for such Facility unless, after giving effect to such selection, the aggregate unpaid principal amount of Advances having Interest Periods that end on or prior to such principal repayment installment date for such Facility shall be at least equal to the aggregate principal amount of Advances under such Facility due and payable on or prior to such date;

 

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

 

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

 

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

 

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“ Letter of Credit Facility ” means a sub-limit available under the Revolving Credit Facility for the issuance of Letters of Credit in an aggregate amount not to exceed $150,000,000, as such sub-limit may be reduced from time to time pursuant to the terms hereof.

 

“ Lien ” means any lien, security interest or other charge or encumbrance of any kind, or any other type of preferential arrangement, including the lien or retained security title of a conditional vendor and any easement, right of way or other encumbrance on title to real property.

 

“ Loan Documents ” means (i) this Agreement, (ii) the Notes (if any), (iii) the Guaranty, (iv) the Collateral Documents, (v) the Fee Letters, (vi) each Letter of Credit Agreement, (vii) the Secured Hedge Agreements, (viii) the Intercreditor Agreement, and (ix) each agreement for Cash Management Services, in each case as amended, supplemented, replaced or otherwise modified from time to time.

 

“ Loan Parties ” means the Borrowers and the Guarantors.

 

“ Loan Value ” means at any time, an amount determined by the Administrative Agent in its sole discretion, exercised reasonably, equal to (a) the sum of (i) up to 85% of the value of Eligible Receivables; (ii) up to 85% of the Net Orderly Liquidation Value of Eligible Inventory; and (iii) subject to satisfactory reporting requirements and controls, up to 80% of the fair market value of Eligible Precious Metals, minus (b) such reserves as the Administrative Agent, in its sole discretion exercised reasonably, deems appropriate to reflect risks or contingencies that may affect any one or more class of such items or that may affect the services (including, but not limited to, Cash Management Services and services relating to Secured Hedge Agreements) to be provided in connection with this transaction or as referred to in this Agreement. For the avoidance of doubt, advance rates, eligibility criteria and reserves shall be determined on a consistent basis with the Administrative Agent’s customary practices applicable to similar financings and services, but with adjustments appropriate for this transaction based on factors which include, without limitation, risks applicable to this transaction.

 

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

 

“ Marketing Program Reserves ” means reserves against the principal balance of Receivables of the Loan Parties reflecting expected amounts to be offered to customers through various rebates and marketing programs, as reflected on the weekly roll-forward or the general ledger in accordance with customary practices.

 

“ Material Adverse Change ” means any material adverse change in the business, condition (financial or otherwise), operations, performance, properties or prospects of BMCA and its Subsidiaries, taken as a whole, except for such material adverse change as may arise solely and directly as a result of the Disclosed Litigation related to or arising out of the alleged asbestos liabilities of BMCA.

 

Material Adverse Effect ” means a material adverse effect on (a) the business, condition (financial or otherwise), operations, performance, properties or prospects of

 

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BMCA and its Subsidiaries, taken as a whole, (b) the rights and remedies of any Agent or any Lender under any Loan Document or (c) the ability of any Loan Party to perform its Obligations under any Loan Document to which it is or is to be a party, except for such material adverse effect as may arise solely and directly as a result of the Disclosed Litigation related to or arising out of the alleged asbestos liabilities of BMCA.

 

“ Material Contract ” means, with respect to any Person, each contract to which such Person is a party involving aggregate consideration payable to or by such Person of $50,000,000 or more in any year and, in the case of BMCA or any of its Subsidiaries, is a material contract which is required to be filed pursuant to Item 601(a)(10) of Regulation S-K under the Securities Act of 1933.

 

“ Merger ” shall have the meaning described in the preliminary statements to this Agreement.

 

“ Merger Agreement ” means the merger agreement dated as of February 9, 2007, among BMCA Acquisition, BMCA Acquisition Sub and Elk.

 

“ Miscellaneous Deductions ” means collectively, (a) deductions to the principal balance of Receivables of the Loan Parties relating to pricing disputes, short shipments, collection disputes, returned goods, and (b) other miscellaneous deductions.

 

“ Moody’s ” means Moody’s Investors Service, Inc.

 

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

 

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

 

“ Net Cash Proceeds ” means, with respect to (A) any sale, lease, transfer or other disposition including any and all involuntary dispositions, whether by Casualty Event or otherwise, of any assets other than the sale or issuance of any Equity Interest of BMCA or (B) the incurrence or issuance of any Debt or (C) any Extraordinary Receipt received by or paid to or for the account of any Loan Party, the aggregate amount of cash received from time to time (whether as initial consideration or through payment or disposition of deferred consideration) by or on behalf of a Loan Party in connection with such transaction, in each case, after deducting therefrom only (without duplication) (a) reasonable and customary brokerage commissions, underwriting fees and discounts, legal fees, finder’s fees and other similar fees and commissions, (b) the amount of taxes paid or payable in connection with or as a result of such transaction, (c) the amount of liability reserves established in accordance with GAAP, (d) a reasonable reserve for the

 

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after tax cost of any indemnification obligations (fixed or contingent) attributable to sellers indemnities for the purchases undertaken by BMCA and/or its Subsidiaries in connection with such disposition, and (e) the amount of any Debt secured by a Lien on such assets that, by the terms of the agreement or instrument governing such Debt, is required to be repaid upon such disposition, in each case to the extent, but only to the extent, that the amounts so deducted are, at the time of receipt of such cash, actually paid to a Person that is not an Affiliate of such Person or any Loan Party or any Affiliate of any Loan Party; provided , however , that in the case of taxes that are deductible under clause (b) above but for the fact that, at the time of receipt of such cash, such taxes have not been actually paid or are not then payable, such Loan Party or such Subsidiary may deduct an amount (the “ Reserved Amount ”) equal to the amount reserved in accordance with GAAP for such Loan Party’s or such Subsidiary’s reasonable estimate of such taxes, other than taxes for which such Loan Party or such Subsidiary is indemnified, provided further , however , that, at the time such taxes are paid, an amount equal to the amount, if any, by which the Reserved Amount for such taxes exceeds the amount of such taxes actually paid shall constitute “Net Cash Proceeds” of the type for which such taxes were reserved for all purposes hereunder.

 

“ Net Orderly Liquidation Value ” has the meaning customarily given to such term by third-party appraisers.

 

“ Non-Material Subsidiary ” means, at any time of determination, any Subsidiary of BMCA other than a Loan Party (a) whose aggregate assets, when combined with the assets of all other Subsidiaries of BMCA which qualify as a Non-Material Subsidiary for purposes of this Agreement, at the last day of the most recently ended fiscal quarter of BMCA were less than 1% of the Consolidated total assets of BMCA at such date or (b) whose aggregate revenues, when combined with the revenues of all other Subsidiaries of BMCA which qualify as a Non-Material Subsidiary for purposes of this Agreement, for the most recently ended fiscal quarter of BMCA were less than 1% of the Consolidated aggregate revenues of BMCA for such period, in each case determined in accordance with GAAP.

 

“ Non-Recourse Subsidiary ” means a Subsidiary of any Loan Party (A) which has been designated a “Non-Recourse Subsidiary” by such Loan Party, (B) which is not a Loan Party or otherwise party to this Revolving Credit Agreement, the Term Loan Facility or any other Loan Document, (C) which is not capitalized at any time by any investment by a Loan Party, except to the extent permitted under Section 5.02(f), and (D) the Debt of which is completely non-recourse to the Loan Parties or any of their Subsidiaries.

 

“ Note ” means each promissory note, if any, of the Borrowers payable to the order of any Lender, in substantially the form of Exhibit A hereto, evidencing the aggregate indebtedness of the Borrowers to such Lender resulting from the Revolving Credit Advances, Letter of Credit Advances and Swing Line Advances made by such Lender, as amended.

 

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

 

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“ Notice of Issuance ” has the meaning specified in Section 2.03(a).

 

“ Notice of Swing Line Borrowing ” has the meaning specified in Section 2.02(b).

 

“ NPL ” means the National Priorities List under CERCLA.

 

“ Obligation ” means, with respect to any Person, any payment, performance or other obligation of such Person of any kind, including any liability of such Person on any claim, whether or not the right of any creditor to payment in respect of such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed, legal, equitable, secured or unsecured, and whether or not such claim is discharged, stayed or otherwise affected by any proceeding referred to in Section 6.01(f). Without limiting the generality of the foregoing, the Obligations of any Loan Party under the Loan Documents include (a) the obligation to pay principal, interest, Letter of Credit commissions, charges, expenses, fees, attorneys’ fees and disbursements, indemnities and other amounts payable by such Loan Party under any Loan Document, (b) the obligation of such Loan Party to reimburse any amount in respect of any of the foregoing that any Lender Party, in its sole discretion, may elect to pay or advance on behalf of such Loan Party and (c) the obligation of any Loan Party in respect of any Cash Management Services.

 

“ OECD ” means the Organization for Economic Cooperation and Development.

 

“ Off Balance Sheet Obligation ” means, with respect to any Person, any Obligation of such Person under a synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing classified as an operating lease in accordance with GAAP, if, and only to the extent that, such Obligations would give rise to a claim against such Person in a proceeding referred to in Section 6.01(f) (it being understood that this definition of “Off Balance Sheet Obligation” shall not include operating leases entered into in the ordinary course of business).

 

“ Open Year ” has the meaning specified in Section 4.01(m)(iii).

 

“ Option Shares ” means the shares of Company Stock subject to the letter dated August 28, 2006 from the general partner of Heyman Investment Associates Limited Partnership, to the chief executive officer of BMCA.

 

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

 

“ Parent ” means G-I Holdings so long as it owns, and any other Person that acquires or owns, directly or indirectly, 80% or more of the Voting Interests of BMCA.

 

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

 

“ Permitted Acquisitions ” has the meaning specified in Section 5.02(f)(vii).

 

“ Permitted Advances ” has the meaning specified in Section 5.02(f)(ii).

 

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“ Permitted Debt Repurchases ” has the meaning specified in Section 5.02(j)(iii).

 

“ Permitted Holders ” means (a) Samuel J. Heyman, his heirs, administrators, executors and entities of which a majority of the Voting Interests is owned by Samuel J. Heyman, his heirs, administrators or executors and (b) any Person controlled, directly or indirectly, by Samuel J. Heyman or his heirs, administrators or executors.

 

“ Permitted Liens ” means such of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced:  (a) Liens for taxes, assessments and governmental charges or levies to the extent not required to be paid under Section 5.01(b); (b) Liens imposed by operation of law, such as materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar Liens arising in the ordinary course of business securing obligations that (i) are not overdue for a period of more than 30 days, and (ii) are being contested in good faith by appropriate proceedings and with respect to which appropriate reserves have been established in accordance with GAAP; (c) pledges or deposits to secure obligations under workers’ compensation laws, employment insurance or other social security obligations or similar legislation or to secure public or statutory obligations, appeal bonds, performance bonds or other obligations of a like nature; (d) encumbrances on any of the respective Person’s properties permitted by any mortgage or deed of trust thereon; (e) easements, rights of way and other encumbrances on title to real property that were not incurred in connection with and do not secure Debt and do not render title to the property encumbered thereby uninsurable or materially adversely affect the use of such property for its intended purposes; (f) financing statements with respect to lessor’s rights or interests in and to the personal property leased to such Person in the ordinary course of such Person’s business other than through a Capitalized Lease; (g) Liens arising out of judgments or decrees which are being contested in good faith, provided that enforcement of such Liens is stayed pending such contest; (h) broker’s liens securing the payment of commissions and management fees in the ordinary course of business; (i) Liens arising solely from the filing of UCC financing statements for precautionary purposes in connection with leases or conditional sales of property that are otherwise permitted under the Loan Documents; (j) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of non-delinquent customs duties in connection with the importation of goods; (k) leases or subleases granted to others not interfering in any material respect with the business of BMCA and its Subsidiaries, taken as a whole; (l) Liens encumbering deposits made in the ordinary course of business to secure obligations arising from statutory, regulatory, contractual or warranty requirements of BMCA or any of its Subsidiaries for which a reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made.

 

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

 

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

 

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“ Pledged Debt ” has the meaning specified in the Security Agreement.

 

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

 

“ Prepayment Date ” means with respect to any cash receipts from a transaction described in the definition of “Net Cash Proceeds”, the third Business Day following the date of the receipt of such Net Cash Proceeds by any Loan Party or any of its Subsidiaries.

 

“ Prime Lending Rate ” means the rate which the Administrative Agent announces from time to time as its prime lending rate, the Prime Lending Rate to change when and as such prime lending rate changes. The Prime Lending Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer by the Administrative Agent, which may make commercial loans or other loans at rates of interest at above or below the Prime Lending Rate.

 

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

 

“ Receivables ” means all Receivables referred to in Section 1.1 of the Security Agreement.

 

“ Receivables Obligor ” means, collectively, an obligor under any Receivable, together with any and all Affiliates of such obligor.

 

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

 

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

 

“ Register ” has the meaning specified in Section 8.07(d).

 

“ Regulation D ” means Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements.

 

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

 

“ Related Documents ” means the Merger Agreement and the Tax Agreement.

 

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

 

“ Reserve Deductions ” means deductions to the outstanding principal balance of Receivables in an amount equal to the aggregate of Dilution Reserves, Cash Discount Reserves, Applied Credits, Warranty Reserves, and Marketing Program Reserves.

 

“ Responsible Financial Officer ” means the Chief Financial Officer, Treasurer, and/or Controller (so long as such Person is also a Responsible Officer of any Loan Party or any of its Subsidiaries).

 

“ Responsible Officer ” means any officer of any Loan Party or any of its Subsidiaries.

 

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

 

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

 

“ Revolving Credit Commitment ” means, with respect to any Lender at any time, the amount set forth opposite such Lender’s name on Schedule I hereto under the caption “Revolving Credit Commitment” or, if such Lender has entered into one or more Assignment and Acceptances, set forth for such Lender in the Register maintained by the Administrative Agent pursuant to Section 8.07(d) as such Lender’s “Revolving Credit Commitment”, as such amount may be reduced at or prior to such time pursuant to Section 2.05 or increased pursuant to Section 2.17.

 

“ Revolving Credit Facility ” means the Revolving Credit Commitments and the provisions herein related to the Advances.

 

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“ Revolving Credit Increase Effective Date ” has the meaning specified in Section 2.17(d).

 

“ Rhone Poulenc Transactions ” means the factual elements and events involved in or otherwise related to the formation of Rhone-Poulenc Surfactants and Specialties, L.P. (“ RPSS ”) in 1990, the contributions thereto and operation thereof, the dissolution, liquidation, and distribution of RPSS assets in 1999 and the pledge of those assets by one or more members of the G-I Holdings Tax Group, in each case as further described in the documents either (i) docketed at Docket Numbers 1028 and 1383 on the docket of the cases pending in the United States Bankruptcy Court for the District of New Jersey under the jointly administered Case No. 01-30135 (RG) or (ii) filed with the court in connection with the case currently pending in the United States District Court for the District of New Jersey, Case No. 02-CV-03082 (WGB).

 

“ Secured Hedge Agreement ” means any Hedge Agreement that is entered into between BMCA and any Hedge Bank prior to, on or after the date hereof that expressly states that (x) it constitutes a “Secured Hedge Agreement” for purposes of this Agreement and the other Loan Documents and (y) does not constitute a “Secured Hedge Agreement” for purposes of the Term Loan Facility or the collateral granted in respect thereof, provided , however, that (i) BMCA shall have delivered to the Collateral Monitoring Agent and the Administrative Agent a written notice specifying that such Hedge Agreement (x) constitutes a “Secured Hedge Agreement” for purposes of this Agreement and the other Loan Documents, (y) does not constitute a “Secured Hedge Agreement” for purposes of the Term Loan Facility or the collateral granted in respect thereof and (ii) on the effective date of such Hedge Agreement and from time to time thereafter, at the request of the Collateral Monitoring Agent, BMCA and the other parties thereto shall have notified the Administrative Agent of the aggregate amount of exposure of the Loan Parties under such Hedge Agreement.

 

“ Secured Obligations ” means Secured Debt, as defined in the Security Agreement.

 

“ Secured Parties ” means the Agents, the Collateral Monitoring Agent, the Lender Parties, the Hedge Banks, any Person that is a Lender or an Affiliate of a Lender that provides Cash Management Services, and each other secured party specified in the Collateral Documents.

 

“ Security Agreement ” means the Security Agreement referred to in Section 3.10(a)(iv) by and among BMCA, each of the other grantors party thereto and the Collateral Monitoring Agent, as amended, supplemented or otherwise modified from time to time.

 

“ Senior Facility ” means the Facilities hereunder, excluding any Incremental Revolving Credit Commitment.

 

“ Senior Notes ” means the Senior Notes in an aggregate principal amount not less than $325,000,000 to be issued pursuant to the Senior Notes Indenture.

 

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“ Senior Notes Indenture ” means an Indenture pursuant to which BMCA or any Subsidiary thereof may issue senior notes, the net proceeds of which will be used to refinance the Bridge Loan Facility and as otherwise permitted hereunder, which indenture will not require the issuer thereof to make any amortization payments on any date prior to any date earlier than eight years after the Closing Date, and will otherwise contain terms consistent with the terms set forth in the letter agreement dated January 26, 2007, among the Borrowers, Deutsche Bank AG Cayman Islands Branch, Deutsche Bank Securities, Inc., Bear Stearns Lending Inc. and Bear Stearns & Co. Inc., relating to the Senior Notes.

 

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

 

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

 

“ S&P ” means Standard & Poor’s, a division of the McGraw Hill Companies, Inc.

 

“ Specified Deductions ” means, collectively, Reserve Deductions, and Miscellaneous Deductions.

 

“ Specified Liquidity Amount ” means, on any date, the greater of (a) $60,000,000 and (b) the amount equal to 10% of the aggregate Revolving Credit Commitments.

 

“ Specified Representations ” has the meaning specified in Section 3.02(i)

 

“ Standby Letter of Credit ” means any Letter of Credit issued under the Letter of Credit Facility, other than a Trade Letter of Credit.

 

“ Stated Maturity ” means, when used with respect to any Debt, the date specified in the instrument governing such Debt as the fixed date on which the principal of such Debt or any installment of interest is due and payable.

 

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“ Subordinated Debt ” means any Debt of any Loan Party that is (i) subordinated to the Obligations of such Loan Party under the Loan Documents (ii) or permitted by Section 5.02(b)(iii)(F) or (J).

 

“ Subordinated Debt Documents ” means all agreements, indentures and instruments pursuant to which Subordinated Debt is issued, in each case as amended, to the extent permitted under the Loan Documents.

 

“ Subsidiary ” of any Person means any corporation, partnership, joint venture, limited liability company, trust or estate of which (or in which) more than 50% of (a) the issued and outstanding capital stock having ordinary voting power to elect a majority of the Board of Directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (b) the interest in the capital or profits of such partnership, joint venture or limited liability company or (c) the beneficial interest in such trust or estate is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries. Notwithstanding anything to the contrary in the foregoing, the term “Subsidiary” shall not include any Non-Recourse Subsidiary or, unless otherwise provided herein, all Non-Material Subsidiaries.

 

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

 

“ Supplemental Collateral Monitoring Agent ” has the meaning specified in Section 7.07 and “Supplemental Collateral Monitoring Agents” shall have the corresponding meaning.

 

“ Surviving Debt ” means the principal amount of Debt of BMCA and its Subsidiaries as of the Closing Date outstanding immediately before and after the Closing Date.

 

“ Swing Line Advance ” means an advance made by (a) the Swing Line Bank pursuant to Section 2.01(b) or (b) any Lender pursuant to Section 2.02(b).

 

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“ Swing Line Bank ” means the Initial Swing Line Bank and any Eligible Assignee to which the Swing Line Commitment hereunder has been assigned pursuant to Section 8.07 so long as such Eligible Assignee expressly agrees to perform in accordance with their terms all obligations that by the terms of this Agreement are required to be performed by it as a Swing Line Bank and notifies the Administrative Agent of its Applicable Lending Office and the amount of its Swing Line Commitment (which information shall be recorded by the Administrative Agent in the Register), for so long as such Initial Swing Line Bank or Eligible Assignee, as the case may be, shall have a Swing Line Commitment.

 

“ Swing Line Borrowing ” means a borrowing consisting of a Swing Line Advance made by the Swing Line Bank pursuant to Section 2.01(b) or the Lenders pursuant to Section 2.02(b).

 

“ Swing Line Commitment ” means, with respect to the Swing Line Bank at any time, the amount set forth opposite the Swing Line Bank’s name on Schedule I hereto under the caption “Swing Line Commitment” which shall be in aggregate amount of $25,000,000 or, if the Swing Line Bank has entered into an Assignment and Acceptance, set forth for the Swing Line Bank in the Register maintained by the Administrative Agent pursuant to Section 8.07(d) as the Swing Line Bank’s “Swing Line Commitment”, as such amount may be reduced at or prior to such time pursuant to Section 2.05.

 

“ Swing Line Facility ” means, at any time, an amount equal to the amount of the Swing Line Bank’s Swing Line Commitment at such time, as such amount may be reduced at or prior to such time pursuant to Section 2.05.

 

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

 

“ Tax Agreement ” means the Tax Sharing Agreement dated as of January 31, 1994, by and among BMCA, GAF Corporation (a predecessor-in-interest to G-I Holdings), as amended as of March 19, 2001, and as further amended to the extent permitted under the Loan Documents.

 

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

 

“ Tender Offer ” has the meaning specified in the preliminary statements of this Agreement.

 

“ Termination Date ” means the earliest of (a) the fifth anniversary of the Closing Date, and (b) the date of termination in whole of the Revolving Credit Commitments, the Letter of Credit Commitment and the Swing Line Commitment, pursuant to Section 2.05 or 6.01.

 

“ Trade Letter of Credit ” means any Letter of Credit that is issued under the Letter of Credit Facility for the benefit of a supplier of Inventory to BMCA or any of its Subsidiaries to effect payment for such Inventory.

 

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“ Transaction ” shall have the meaning specified in the preliminary statements of this Agreement.

 

“ Transaction Documents ” means, collectively, the Loan Documents and the Related Documents.

 

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

 

“ Unused Revolving Credit Commitment ” means, with respect to any Lender at any time, (a) such Lender’s Revolving Credit Commitment at such time minus (b) the sum of (i) the aggregate principal amount of all Revolving Credit Advances, Swing Line Advances and Letter of Credit Advances made by such Lender (in its capacity as a Lender) and outstanding at such time plus (ii) such Lender’s Pro Rata Share of (A) the aggregate Available Amount of all Letters of Credit outstanding at such time, (B) the aggregate principal amount of all Letter of Credit Advances made by the Issuing Bank pursuant to Section 2.03(c) and outstanding at such time and (C) the aggregate principal amount of all Swing Line Advances made by the Swing Line Bank pursuant to Section 2.01(c) and outstanding at such time.

 

“ Utilization ” means, for any period, the average percentage for each day in such period equal to the sum of the aggregate amount of outstanding Advances and the aggregate Available Amount of all outstanding Letters of Credit, in each case on such day, divided by the aggregate Revolving Credit Commitments on such day.

 

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

 

“ Warranty Reserve ” means a reserve established by the Administrative Agent in its reasonable discretion against the principal balance of Receivables of the Loan Parties which represents 60 days of average warranty claims, as determined by the Administrative Agent in connection with its quarterly review.

 

“ Welfare Plan ” means a welfare plan, as defined in Section 3(1) of ERISA, that is maintained for employees of any Loan Party or in respect of which any Loan Party could have liability.

 

“ Wholly-Owned Recourse Subsidiary ” means a Subsidiary of a Person (other than a Non-Recourse Subsidiary) all the Capital Stock of which (other than directors’ qualifying shares) is owned by such Person or another Wholly-Owned Recourse Subsidiary of such Person.

 

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

 

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“ 2001 Long Term Incentive Plan ” means that certain incentive compensation plan known as the Building Materials Corporation of America 2001 Long Term Incentive Plan, effective as of December 31, 2000, pursuant to which BMCA grants Incentive Units (as defined therein) to eligible employees of BMCA and its Subsidiaries.

 

“ 2007 Notes ” has the meaning specified in the preliminary statements to this Agreement.

 

“ 2008 Notes ” has the meaning specified in the preliminary statements to this Agreement.

 

“ 2014 Notes ” has the meaning specified in the preliminary statements to this Agreement.

 

“ 2014 Notes Indenture ” means the Indenture dated as of July 26, 2004, among BMCA, certain of its subsidiaries party thereto as guarantors and Wilmington Trust Company, as trustee, pursuant to which the 2014 Notes were issued, as most recently supplemented by the Fourth Supplemental Indenture dated as of February 21, 2007 and the Fifth Supplemental Indenture dated as of February 22, 2007, and as further amended, supplemented or otherwise modified from time to time.

 

SECTION 1.02.      Computation of Time Periods; Other Definitional Provisions. In this Agreement and the other Loan Documents in the computation of periods of time from a specified date to a later specified date, the word “ from ” means “from and including” and the words “ to ” and “ until ” each mean “to but excluding”. References in the Loan Documents to any agreement or contract “ as amended ” shall mean and be a reference to such agreement or contract as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with its terms. The term “ including ,” when used in any Loan Document, means “including, without limitation”.

 

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

 

(b)           If any change in the accounting principles used in the preparation of the financial statements referred to in Section 4.01(g) is hereafter required or permitted by the rules, regulations, pronouncements and opinions of the Financial Accounting Standards Board or the American Institute of Certified Public Accountants (or any successor to either thereof) and such change is adopted by each of the Borrowers with the agreement of each of the Borrowers’ independent public accountants and results in a change in any of the calculations required by Section 5.02 or Section 5.04 that would not have resulted had such accounting change not occurred, the parties hereto agree to enter into negotiations in order to amend such provisions so as to equitably reflect such change such that the criteria for evaluating compliance with such covenants by each of the Borrowers shall be the same after such change as if such change had not been made; provided , however , that no change in GAAP that would affect a calculation that measures compliance with any covenant contained in Section 5.02 or Section 5.04 shall be given effect until such provisions are amended to reflect such changes in GAAP.

 

SECTION 1.04.      Currency Equivalents Generally. Any amount specified in this Agreement (other than in Articles II, VII and VIII) or any of the other Loan Documents to be in U.S. dollars shall

 

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also include the equivalent of such amount in any currency other than U.S. dollars, such equivalent amount to be determined at the rate of exchange quoted by DBNY in New York, New York at the close of business on the Business Day immediately preceding any date of determination thereof, to prime banks in New York, New York for the spot purchase in the New York foreign exchange market of such amount in U.S. dollars with such other currency.

 

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT

 

SECTION 2.01.      The Advances and the Letters of Credit. (a)  The Revolving Credit Advances . Each Lender severally agrees, on the terms and conditions hereinafter set forth, to make advances (each a “ Revolving Credit Advance ”) to the Borrowers from time to time on any Business Day during the period from the Closing Date until the Termination Date in an amount for each such Advance not to exceed such Lender’s Unused Revolving Credit Commitment at such time. Each Revolving Credit Borrowing shall be in an aggregate amount of $5 million or an integral multiple of $1 million in excess thereof (other than a Borrowing the proceeds of which shall be used solely to repay or prepay in full outstanding Swing Line Advances or outstanding Letter of Credit Advances in accordance with the terms hereof) and shall consist of Revolving Credit Advances made simultaneously by the Lenders ratably according to their Revolving Credit Commitments. Within the limits of each Lender’s Unused Revolving Credit Commitment in effect from time to time, the Borrowers may borrow under this Section 2.01(a), prepay pursuant to Section 2.06(a) and reborrow under this Section 2.01(a).

 

(b)           The Swing Line Advances . The Swing Line Bank agrees on the terms and conditions hereinafter set forth, to make Swing Line Advances to the Borrowers from time to time on any Business Day during the period from the Closing Date until the Termination Date (i) in an aggregate amount not to exceed at any time outstanding the Swing Line Commitment (the “ Swing Line Facility ”) and (ii) in an amount for each such Swing Line Borrowing not to exceed the aggregate of the Unused Revolving Credit Commitments of the Lenders at such time. No Swing Line Advance shall be used for the purpose of funding the payment of principal of any other Swing Line Advance. Each Swing Line Borrowing shall be made as a Base Rate Advance. Within the limits of the Swing Line Facility and within the limits referred to in clause (ii) above, the Borrowers may borrow under this Section 2.01(b), repay pursuant to Section 2.04(c) or prepay pursuant to Section 2.06(a) and reborrow under this Section 2.01(b).

 

(c)           The Letters of Credit . Prior to the Closing Date, Citibank, N.A. has issued the Existing Letters of Credit, which, from and after the Closing Date, shall constitute Letters of Credit hereunder. The Issuing Bank agrees, on the terms and conditions hereinafter set forth, to issue (or cause its Affiliate that is a commercial bank to issue on its behalf) letters of credit (the letters of credit issued on or after the Closing Date pursuant to this Agreement, together with the Existing Letters of Credit, collectively, the “ Letters of Credit ”) in U.S. Dollars for the account of the Borrowers or, subject to the second proviso in this sentence below, for the benefit of G-I Holdings from time to time on any Business Day during the period from the Closing Date until 30 days before the fifth anniversary of the Closing Date in respect of the Revolving Credit Facility in an aggregate Available Amount, after giving effect to the proposed Letter of Credit

 

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(i) for all Letters of Credit not to exceed at any time the amount of the Letter of Credit Facility at such time and (ii) for each such Letter of Credit not to exceed the Unused Revolving Credit Commitments of the Lenders at such time; provided , however , that in no event shall the aggregate Available Amount for all Letters of Credit exceed $150,000,000; and provided , further , however , that the issuance of any Future G-I Letter of Credit, and the renewal of any Future G-I Letter of Credit which increases the stated amount of such Future G-I Letter of Credit, shall be subject to compliance with Section 5.02(g). No Letter of Credit shall have an expiration date later than the date agreed to by the Issuing Bank and the Borrowers in respect of such Letter of Credit and (A) in the case of a Standby Letter of Credit, shall not have an expiration date later than the earlier of (1) ten days prior to the fifth anniversary of the Closing Date and (2) the date which is one year from the date of issuance of such Standby Letter of Credit, provided that the immediately preceding clause (2) shall not prevent any Issuing Bank from agreeing that a Standby Letter of Credit will automatically be extended for one or more successive periods not to exceed one year each unless such Issuing Bank elects not to extend for any such additional period; and provided, further , that such Issuing Lender shall elect not to extend any such Standby Letter of Credit if it has knowledge that a Default or Event of Default has occurred and is continuing at the time such Issuing Bank must elect whether or not to allow such extension, and (B) in the case of a Trade Letter of Credit, shall not have an expiration date later than 180 days after the date of issuance thereof. Within the limits of the Letter of Credit Facility, and subject to the limits referred to above, the Borrowers may request the issuance of Letters of Credit under this Section 2.01(c), repay any Letter of Credit Advances resulting from drawings thereunder pursuant to Section 2.03(c) and request the issuance of additional Letters of Credit under this Section 2.01(c). The Borrowers agree that, on or prior to the fourteenth day before the Termination Date, the Borrowers shall deposit (on terms and conditions reasonably satisfactory to the respective Issuing Bank) in a collateral account designated by such Issuing Bank an amount equal to 103% of the aggregate Available Amount of all Letters of Credit (if any are issued by such Issuing Bank and then outstanding) which have an expiration date later than the fifth anniversary of the Closing Date.

 

SECTION 2.02.      Making the Advances. (a)  Except as otherwise provided in the last sentence of this subsection, Section 2.02(b) or 2.03, each Borrowing shall be made on notice, given not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Borrowing in the case of a Borrowing consisting of Eurodollar Rate Advances, or the first Business Day prior to the date of the proposed Borrowing in the case of a Borrowing consisting of Base Rate Advances, by any Borrower to the Administrative Agent, which shall give to each Lender prompt notice thereof by email or facsimile. Each such notice of a Borrowing (a “ Notice of Borrowing ”) shall be by telephone, confirmed immediately in writing, or by email or facsimile, in substantially the form of Exhibit B hereto, specifying therein the requested (i) date of such Borrowing, (ii) Type of Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing and (iv) in the case of a Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for each such Advance. Each Lender shall, before 11:00 A.M. (New York City time) on the date of such Borrowing, make available for the account of its Applicable Lending Office to the Administrative Agent at the Administrative Agent’s Account, in same day funds, such Lender’s ratable portion of such Borrowing in accordance with the respective Revolving Credit Commitments of such Lender and the other Lenders. After the Administrative Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Administrative Agent will make such funds available to the Borrowers by crediting the

 

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Borrowers’ Account; provided , however , that, in the case of any Revolving Credit Borrowing, the Administrative Agent shall first make a portion of such funds equal to the aggregate principal amount of any Swing Line Advances and Letter of Credit Advances made by the Swing Line Bank or the Issuing Bank, as the case may be, and by any other Lender and outstanding on the date of such Revolving Credit Borrowing, plus interest accrued and unpaid thereon to and as of such date, available to the Swing Line Bank or the Issuing Bank, as the case may be, and such other Lenders for repayment of such Swing Line Advances and Letter of Credit Advances. Provided that BMCA has delivered a customary indemnity letter and that notice of the initial Revolving Credit Borrowing is received prior to 9:00 A.M. (New York time) on the date of the proposed initial Revolving Credit Borrowing (which shall be a Business Day), the initial Revolving Credit Borrowing may be made on such Business Day and may consist of Eurodollar Rate Advances.

 

(b)           Each Swing Line Borrowing shall be made on notice, given not later than 11:00 A.M. (New York City time) on the date of the proposed Swing Line Borrowing, by the Borrowers to the Swing Line Bank and the Administrative Agent. Each such notice of a Swing Line Borrowing (a “ Notice of Swing Line Borrowing ”) shall be by telephone, confirmed immediately in writing, or by email or facsimile, specifying therein the requested (i) date of such Borrowing, (ii) amount of such Borrowing and (iii) maturity of such Borrowing (which maturity shall be no later than the seventh day after the requested date of such Borrowing). The Swing Line Bank will make the amount of the requested Swing Line Advances available to the Administrative Agent at the Administrative Agent’s Account, in same day funds. After the Administrative Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Administrative Agent will make such funds available to any Borrower by crediting the Borrowers’ Account. Upon written demand by the Swing Line Bank, with a copy of such demand to the Administrative Agent, each other Lender shall purchase from the Swing Line Bank, and the Swing Line Bank shall sell and assign to each such other Lender, such other Lender’s Pro Rata Share of such outstanding Swing Line Advance as of the date of such demand, by making available for the account of its Applicable Lending Office to the Administrative Agent for the account of the Swing Line Bank, by deposit to the Administrative Agent’s Account, in same day funds, an amount equal to the portion of the outstanding principal amount of such Swing Line Advance to be purchased by such Lender. The Borrowers, jointly and severally, hereby agree to each such sale and assignment. Each Lender agrees to purchase its Pro Rata Share of an outstanding Swing Line Advance on (i) the Business Day on which demand therefor is made by the Swing Line Bank, provided that notice of such demand is given not later than 11:00 A.M. (New York City time) on such Business Day or (ii) the first Business Day next succeeding such demand if notice of such demand is given after such time. Upon any such assignment by the Swing Line Bank to any other Lender of a portion of a Swing Line Advance, the Swing Line Bank represents and warrants to such other Lender that the Swing Line Bank is the legal and beneficial owner of such interest being assigned by it, but makes no other representation or warranty and assumes no responsibility with respect to such Swing Line Advance, the Loan Documents or any Loan Party. If and to the extent that any Lender shall not have so made the amount of such Swing Line Advance available to the Administrative Agent, such Lender agrees to pay to the Administrative Agent forthwith on demand such amount together with interest thereon, for each day from the date of demand by the Swing Line Bank until the date such amount is paid to the Administrative Agent, at the Federal Funds Rate. If such Lender shall pay to the Administrative Agent such amount for the account of the Swing

 

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Line Bank on any Business Day, such amount so paid in respect of principal shall constitute a Swing Line Advance made by such Lender on such Business Day for purposes of this Agreement, and the outstanding principal amount of the Swing Line Advance made by the Swing Line Bank shall be reduced by such amount on such Business Day.

 

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

 

(d)           Each Notice of Borrowing and each Notice of Swing Line Borrowing shall be irrevocable and binding on the Borrowers. In the case of any Borrowing that the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate Advances, the Borrowers jointly and severally agree to indemnify each Lender against any loss, cost or expense incurred by such Lender as a result of any failure to fulfill on or before the date specified in such Notice of Borrowing for such Borrowing the applicable conditions set forth in Article III, including any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Advance to be made by such Lender as part of such Borrowing when such Advance, as a result of such failure, is not made on such date.

 

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

 

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

 

SECTION 2.03.      Issuance of and Drawings and Reimbursement Under Letters of Credit. (a)  Request for Issuance . Each Letter of Credit shall be issued upon notice, given not later than 11:00 A.M.

 

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(New York City time) on the fourth Business Day prior to the date of the proposed issuance of such Letter of Credit, by the Borrowers to the Issuing Bank, which shall give to the Administrative Agent and each Lender prompt notice thereof by telecopier or electronic communication. Each such notice of issuance of a Letter of Credit (a “ Notice of Issuance ”) shall be by telephone, confirmed immediately in writing, or telecopier electronic communication, specifying therein the requested (A) date of such issuance (which shall be a Business Day), (B) Available Amount of such Letter of Credit, (C) expiration date of such Letter of Credit, (D) name and address of the beneficiary of such Letter of Credit and (E) form of such Letter of Credit, and shall be accompanied by such application and agreement for letter of credit as the Issuing Bank may specify to the Borrowers for use in connection with such requested Letter of Credit (a “ Letter of Credit Agreement ”). If (x) the requested form of such Letter of Credit is acceptable to the Issuing Bank in its sole discretion exercised reasonably and (y) it has not received notice of objection to such issuance from the Required Lenders, the Issuing Bank will, upon fulfillment of the applicable conditions set forth in Article III, make such Letter of Credit available to any Borrower at its office referred to in Section 8.02 or as otherwise agreed with such Borrower in connection with such issuance. In the event and to the extent that the provisions of any Letter of Credit Agreement shall conflict with this Agreement, the provisions of this Agreement shall govern.

 

(b)           Letter of Credit Reports . The Issuing Bank shall furnish (i) to the Administrative Agent, any Borrower and each Lender on the first Business Day of each month a written report summarizing issuance and expiration dates of Letters of Credit issued during the preceding month and drawings during such month under all Letters of Credit and, (ii) to the Administrative Agent and each Lender on the first Business Day of each calendar quarter a written report setting forth the average daily aggregate Available Amount during the preceding calendar quarter of all Letters of Credit.

 

(c)           Participations in Letters of Credit . Upon the issuance of a Letter of Credit by the Issuing Bank under Section 2.03(a), the Issuing Bank shall be deemed, without further action by any party hereto, to have sold to each Lender, and each such Lender shall be deemed, without further action by any party hereto, to have purchased from the Issuing Bank, a participation in such Letter of Credit in an amount for each Lender equal to such Lender’s Pro Rata Share of the Available Amount of such Letter of Credit, effective upon the issuance of such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay such Lender’s Pro Rata Share of each L/C Disbursement made by the Issuing Bank and not reimbursed by the Borrowers forthwith on the date due as provided in Section 2.04(d) by making available for the account of its Applicable Lending Office to the Administrative Agent for the account of the Issuing Bank by deposit to the Administrative Agent’s Account, in same day funds, an amount equal to such Lender’s Pro Rata Share of such L/C Disbursement. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this Section 2.03(c) in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or an Event of Default or the termination of the Commitments, and that each such payment shall be made without any off-set, abatement, withholding or reduction whatsoever. If and to the extent that any Lender shall not have so made the amount of such L/C Disbursement available to the Administrative Agent, such Lender agrees to pay to the Administrative Agent forthwith on demand such amount together with interest

 

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thereon, for each day from the date such L/C Disbursement is due pursuant to Section 2.04(b) until the date such amount is paid to the Administrative Agent, at the Federal Funds Rate for its account or the account of the Issuing Bank, as applicable. If such Lender shall pay to the Administrative Agent such amount for the account of the Issuing Bank on any Business Day, such amount so paid in respect of principal shall constitute a Letter of Credit Advance made by such Lender on such Business Day for purposes of this Agreement, and the outstanding principal amount of the respective Letter of Credit Advance made by the Issuing Bank shall be reduced by such amount on such Business Day.

 

(d)           Drawing and Reimbursement . The payment by the Issuing Bank of a draft drawn under any Letter of Credit shall constitute for all purposes of this Agreement the making by the Issuing Bank of a Letter of Credit Advance, which shall be a Base Rate Advance, in the amount of such draft.

 

(e)           Failure to Make Letter of Credit Advances . The failure of any Lender to make the Letter of Credit Advance to be made by it on the date specified in Section 2.03(c) shall not relieve any other Lender of its obligation hereunder to make its Letter of Credit Advance on such date, but no Lender shall be responsible for the failure of any other Lender to make the Letter of Credit Advance to be made by such other Lender on such date.

 

SECTION 2.04.      Repayment of Advances. (a)  Daily Repayments Upon Default . On each Business Day after the occurrence and during the continuance of a Default, the Administrative Agent shall apply all amounts on deposit in the Cash Collateral Account first, to the prepayment of the Letter of Credit Advances then outstanding until such Advances are paid in full, second to the prepayment of the Swing Line Advances then outstanding until such Advances are paid in full, third to the prepayment of the Revolving Credit Advances until such Advances are paid in full and fourth to be deposited in the L/C Collateral Account to cash collateralize 103% of the Available Amount of the Letters of Credit then outstanding.

 

(b)           Revolving Credit Advances . The Borrowers, jointly and severally, agree to repay to the Administrative Agent for the ratable account of the Lenders on the Termination Date the aggregate principal amount of the Revolving Credit Advances then outstanding.

 

(c)           Swing Line Advances . The Borrowers, jointly and severally, agree to repay to the Administrative Agent for the account of the Swing Line Bank and each other Lender that has made a Swing Line Advance the outstanding principal amount of each Swing Line Advance made by each of them on the earlier of the maturity date specified in the applicable Notice of Swing Line Borrowing (which maturity shall be no later than the seventh day after the requested date of such Borrowing) and the Termination Date.

 

(d)           Letter of Credit Advances . (i)  The Borrowers, jointly and severally, agree to repay to the Administrative Agent for the account of the Issuing Bank and each other Lender that has made a Letter of Credit Advance on the earlier of demand (accompanied by written notice from the Issuing Bank that a payment has been made under such Letter of Credit) and the Termination Date the outstanding principal amount of each Letter of Credit Advance made by each of them.

 

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(ii)           The Obligations of any Borrower under this Agreement, any Letter of Credit Agreement and any other agreement or instrument relating to any Letter of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement, such Letter of Credit Agreement and such other agreement or instrument under all circumstances, including the following circumstances (it being understood that any such payment by any Borrower is without prejudice to, and does not constitute a waiver of, any rights the Borrowers might have or might acquire as a result of the payment by the Issuing Bank of any draft or the reimbursement by any Borrower thereof):

 

(A)          any lack of validity or enforceability of any Loan Document, any Letter of Credit Agreement, any Letter of Credit or any other agreement or instrument relating thereto (all of the foregoing being, collectively, the “ L/C Related Documents ”);

 

(B)           any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations of any Borrower in respect of any L/C Related Document or any other amendment or waiver of or any consent to departure from all or any of the L/C Related Documents;

 

(C)           the existence of any claim, set-off, defense or other right that the Borrowers may have at any time against any beneficiary or any transferee of a Letter of Credit (or any Persons for which any such beneficiary or any such transferee may be acting), the Issuing Bank or any other Person, whether in connection with the transactions contemplated by the L/C Related Documents or any unrelated transaction;

 

(D)          any statement or any other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

 

(E)           payment by the Issuing Bank under a Letter of Credit against presentation of a draft, certificate or other document that does not strictly comply with the terms of such Letter of Credit;

 

(F)           any non-perfection of any Collateral or any release or amendment or waiver of or consent to departure from the Guaranty for all or any of the Obligations of the Borrowers in respect of the L/C Related Documents; or

 

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

 

SECTION 2.05.      Termination or Reduction of the Commitments. (a)   Optional . Any Borrower may, upon at least three Business Days’ notice to the Administrative Agent, and without premium or penalty, terminate in whole or reduce in part the unused portions of the Letter of Credit Facility and/or the Unused Revolving Credit Commitments; provided , however , that each partial reduction of a Facility (i) shall be in an aggregate amount of $5 million or an integral multiple of $1 million in excess thereof and (ii) shall be made ratably among the Lenders in accordance with their Commitments with respect to such Facility.

 

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(b)           Mandatory . (i)  The Letter of Credit Facility shall be permanently reduced from time to time on the date of each reduction in the Revolving Credit Facility by the amount, if any, by which the amount of the Letter of Credit Facility exceeds the Revolving Credit Facility after giving effect to such reduction of the Revolving Credit Facility.

 

(ii)           The Swing Line Facility shall be permanently reduced from time to time on the date of each reduction in the Revolving Credit Facility by the amount, if any, by which the amount of the Swing Line Facility exceeds the Revolving Credit Facility after giving effect to such reduction of the Revolving Credit Facility.

 

SECTION 2.06.      Prepayments. (a)  Optional . The Borrowers may, upon at least one Business Day’s notice in the case of Base Rate Advances and three Business Days’ notice in the case of Eurodollar Rate Advances, in each case to the Administrative Agent stating the proposed date and aggregate principal amount of the prepayment, and, if such notice is given, the Borrowers shall, prepay the outstanding aggregate principal amount of the Advances comprising part of the same Borrowing in whole or ratably in part, together with accrued interest to the date of such prepayment on the aggregate principal amount so prepaid; provided , however , that (x) each partial prepayment shall be in an aggregate principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof and (y) if any prepayment of a Eurodollar Rate Advance is made on a date other than the last day of an Interest Period for such Advance, the Borrowers shall also pay any amounts owing pursuant to Section 8.04(d).

 

(b)           Mandatory . (i)  The Net Cash Proceeds from the sale of Collateral (other than as set forth in clauses (i) or (ii) of the definition of Certain Permitted Dispositions) shall be applied to repay the Revolving Credit Advances (but not reduce the Revolving Credit Commitment).

 

(ii) In each case the Net Cash Proceeds referred to in this subsection are not applied to repay advances under the Term Loan Facility, the Borrowers shall, on the applicable Prepayment Date with respect to Net Cash Proceeds received by any Loan Party from (A) the sale, lease, transfer or other disposition including any and all involuntary dispositions, whether by condemnation, casualty loss or otherwise, of any assets of any Loan Party or any of its Subsidiaries (other than (w) any sale, lease, transfer or other disposition of assets referred to in clause (i), (ii), (iii) or (iv) of the definition of Certain Permitted Dispositions and (x) and sale, lease transfer or other disposition of assets the Net Cash Proceeds of which are reinvested in assets used in the operation of the business within 18 months of receipt of such proceeds), (B) the incurrence or issuance by any Loan Party or any of its Subsidiaries of any Debt (other than Debt permitted to be incurred or issued pursuant to Section 5.02(b)) and (C) any Extraordinary Receipt received by or paid to or for the account of any Loan Party or any of its Subsidiaries and not otherwise included in clause (A) or (B) above (other than any Extraordinary Receipts which are reinvested in assets used in the operation of the business within 18 months of receipt of such proceeds), prepay an aggregate principal amount of the Advances comprising part of the same Borrowings (with application to be made in accordance with clause (v) of this Section 2.06(b)), in an aggregate amount equal to the amount of such Net Cash Proceeds. Each such prepayment shall be applied to the Revolving Credit Facility as set forth in clause (v) below. For the avoidance of doubt, mandatory prepayments shall not permanently reduce the Commitments.

 

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(iii)          The Borrowers shall, on each Business Day, prepay an aggregate principal amount of the Revolving Credit Advances comprising part of the same Borrowings, the Letter of Credit Advances and the Swing Line Advances (with application to be made in accordance with clause (v) of this Section 2.06(b)) in an amount equal to the amount by which (A) the sum of (I) the aggregate principal amount of (x) the Revolving Credit Advances, (y) the Letter of Credit Advances and (z) the Swing Line Advances then outstanding plus (II) the aggregate Available Amount of all Letters of Credit then outstanding, exceeds (B) the lesser of the Revolving Credit Facility and the Loan Value on such Business Day.

 

(iv)          The Borrowers, jointly and severally, agree to, on each Business Day, pay to the Administrative Agent for deposit in the L/C Collateral Account an amount sufficient to cause the aggregate amount on deposit in the L/C Collateral Account to equal the amount by which the aggregate Available Amount of all Letters of Credit then outstanding exceeds the Letter of Credit Facility on such Business Day.

 

(v)           Prepayments of the Revolving Credit Facility made pursuant to clause (i), (ii), (iii) or (iv) above shall be first applied to prepay Letter of Credit Advances then outstanding until such Advances are paid in full, second applied to prepay Swing Line Advances then outstanding until such Advances are paid in full, and third applied to prepay Revolving Credit Advances then outstanding comprising part of the same Borrowings until such Advances are paid in full; and, in the case of prepayments of the Revolving Credit Facility required pursuant to clause (ii) or (iii) above, the amount remaining (if any) after the prepayment in full of the Advances then outstanding (the sum of such prepayment amounts in respect of Revolving Credit Advances, Letter of Credit Advances and Swing Line Advances, and remaining amount being referred to herein as the “ Reduction Amount ”) may be retained by the Borrowers. Upon the drawing of any Letter of Credit for which funds are on deposit in the L/C Collateral Account, such funds shall be applied to reimburse the Issuing Bank or Lenders, as applicable.

 

(vi)          All prepayments under this subsection (b) shall be made together with accrued interest thereof to the date of such prepayment on the principal amount prepaid, together with any amounts owing pursuant to Section 8.04. If any payment of Eurodollar Rate Advances otherwise required to be made under this Section 2.06(b) would be made on a day other than the last day of the applicable Interest Period thereon, each Borrower may direct the Administrative Agent to (and if so directed, the Administrative Agent shall) deposit such payment in an account maintained with the Administrative Agent until the last day of the applicable Interest Period at which time the Administrative Agent shall apply the amount of such payment to the prepayment of such Advances; provided , however , that such Advances shall continue to bear interest as set forth in Section 2.07 until the last day of the applicable Interest Period therefor.

 

SECTION 2.07.      Interest. (a)  Scheduled Interest . The Borrowers, jointly and severally, agree to pay interest on the unpaid principal amount of each Advance owing to each Lender from the date of such Advance until such principal amount shall be paid in full, at the following rates per annum:

 

(i)            Base Rate Advances . During such periods as such Advance is (A) a Base Rate Advance, a rate per annum equal at all times to the Base Rate in effect from time to time plus (B) the Applicable Margin, payable in arrears monthly on the first day of each

 

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month during such periods and on the date such Base Rate Advance shall be Converted or paid in full.

 

(ii)           Eurodollar Rate Advances . During such periods as such Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during each Interest Period for such Advance to the sum of (A) the Eurodollar Rate (adjusted for maximum reserves) for such Interest Period for such Advance plus (B) the Applicable Margin, payable in arrears on the last day of such Interest Period and, if such Interest Period has a duration of more than three months, on each day that occurs during such Interest Period every three months from the first day of such Interest Period and on the date such Eurodollar Rate Advance shall be Converted or paid in full; provided, however, that until the earlier to occur of (i) the 60th day following the Closing Date or (ii) the date upon which the Joint Lead Arrangers shall determine in their sole discretion that the primary syndication of this Agreement has been completed, Eurodollar Advances shall be restricted to a single one month interest period at all times.

 

(b)           Default Interest . Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent may, and upon the request of the Required Lenders shall, require that the Borrowers pay interest (“ Default Interest ”) on (i) the outstanding and unpaid principal amount of each Advance owing to each Lender Party, payable in arrears on the dates referred to in clause (i) or (ii) of Section 2.07(a), as applicable, or otherwise on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on such Advance pursuant to clause (i) or (ii) of Section 2.07(a), as applicable, and (ii) to the fullest extent permitted by applicable law, the amount of any interest, fee or other amount payable under this Agreement or any other Loan Document to any Agent or any Lender Party that is not paid when due, from the date such amount shall be due until such amount shall be paid in full, payable in arrears on the date such amount shall be paid in full or otherwise on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid, in the case of interest, on the Type of Advance on which such interest has accrued pursuant to clause (i) or (ii) of Section 2.07(a), as applicable, and, in all other cases, on Base Rate Advances pursuant to clause (i) of Section 2.07(a); provided , however , that following the acceleration of the Advances, or the giving of notice by the Agent to accelerate the Advances that has not been revoked or rescinded, pursuant to Section 6.01, Default Interest shall accrue and be payable hereunder whether or not previously required by the Administrative Agent.

 

(c)           Notice of Interest Period and Interest Rate . Promptly after receipt of a Notice of Borrowing pursuant to Section 2.02(a), a notice of Conversion pursuant to Section 2.09 or a notice of selection of an Interest Period pursuant to the terms of the definition of “Interest Period”, the Administrative Agent shall give notice to the Borrowers and each Lender of the applicable Interest Period and the applicable interest rate determined by the Administrative Agent for purposes of clause (a)(i) or (a)(ii) above.

 

SECTION 2.08.      Fees. (a)  Commitment Fee . The Borrowers, jointly and severally, agree to pay to the Administrative Agent for the account of the Lenders a commitment fee, from the date hereof in the case of each Initial Lender and from the effective date specified in the Assignment and Acceptance pursuant to which it became a Lender in the case of each other Lender until the Termination Date, payable in arrears monthly on the first day of each month (or if such day is

 

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not a Business Day, on the next succeeding Business Day), commencing on the first Business Day of the first month commencing after the Closing Date, and on the Termination Date, at the rate per annum, on the sum of the daily Unused Revolving Credit Commitment of such Lender plus their Pro Rata Share of the daily outstanding Swing Line Advances during such month or portion thereof, of (i) for an initial period commencing on the Closing Date and ending on February 28, 2007, 0.30%, and (ii) as of any date thereafter, a rate per annum equal to the rate set forth below opposite the Utilization for the immediately preceding month or portion thereof:

 

 

provided , however , that any commitment fee accrued with respect to any of the Commitments of a Defaulting Lender during the period prior to the time such Lender became a Defaulting Lender and unpaid at such time shall not be payable by the Borrowers so long as such Lender shall be a Defaulting Lender except to the extent that such commitment fee shall otherwise have been due and payable by the Borrowers prior to such time; and provided further that no commitment fee shall accrue on any of the Commitments of a Defaulting Lender so long as such Lender shall be a Defaulting Lender.

 

(b)           Letter of Credit Fees, Facing Fee, Etc . (i)  The Borrowers, jointly and severally, agree to pay to the Administrative Agent for the account of each Lender a commission, payable in arrears quarterly on the first day of each quarter (or if such day is not a Business Day, on the next succeeding Business Day), commencing on the first Business Day of the first calendar quarter commencing after the Closing Date, and on the termination or expiration of all Letters of Credit, on such Lender’s Pro Rata Share of the average daily aggregate stated amount during such quarter of Letters of Credit outstanding from time to time at the rate of the Applicable Margin for Eurodollar Rate Advances. Upon the occurrence and during the continuance of an Event of Default, the amount of commission payable by the Borrowers under this clause (b)(i) shall be increased by 2% per annum.

 

(ii)           The Borrowers, jointly and severally, agree to pay to the respective Issuing Bank, for its own account, (x) an issuance fee for each Letter of Credit issued by such Issuing Bank in an amount equal to 0.25% per annum of the Available Amount of such Letter of Credit (but in no event less than $500 per annum for each Letter of Credit) (the “ Facing Fee ”); the Facing Fee shall be payable in arrears quarterly on the first day of each quarter (or if such day is not a Business Day, on the next succeeding Business Day) commencing on the first Business Day of the first calendar quarter commencing after the Closing Date and on the termination or expiration of such Letter of Credit and (y) such other commissions, fronting fees, transfer fees and other customary fees and charges in connection with the issuance or administration of each Letter of Credit as the Borrowers and the Issuing Bank shall agree.

 

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(c)           Agents’ Fees . The Borrowers, jointly and severally, agree to pay to each Agent for its own account such fees as may from time to time be agreed between the Borrowers and such Agent.

 

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

 

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

 

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

 

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

 

SECTION 2.10.      Increased Costs, Etc. (a)  If, due to either (i) the introduction of or any change (other than any change by way of imposition or increase of reserve requirements included in the Eurodollar Rate Reserve Percentage) in or in the interpretation of any law or regulation or (ii) the compliance with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to any Lender Party of agreeing to make or of making, funding or maintaining Eurodollar Rate Advances or of agreeing to issue or of issu