Document:

EXHIBIT 10.46

EXCHANGE AGREEMENT

This Exchange Agreement (this “Agreement”) is made and entered into as
of January 11, 2007, by and between TOWER GROUP, INC., a Delaware corporation (the “Company”),
and CASTLEPOINT MANAGEMENT CORP., a Delaware corporation (the “Purchaser”).

RECITALS

WHEREAS, the Purchaser currently owns
40,000 shares of Series A Preferred Stock of the Company.

WHEREAS, the Company has authorized
the issuance of up to an aggregate of 40,000 shares of its Series A-I Preferred
Stock (the “Shares”) to the Purchaser in exchange for the shares of Series A
Preferred Stock of the Company owned by the Purchaser; and

WHEREAS, the Purchaser and the Company desire that the Company shall exchange the Shares for
such shares of Series A Preferred Stock on the terms and conditions set forth
herein;

AGREEMENT

NOW, THEREFORE, in consideration of the
foregoing recitals and the mutual promises, representations, warranties, and covenants
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

1.             CERTAIN
DEFINITIONS.

For all purposes of this Agreement, the following
terms shall have the respective meanings set
forth in this Article 1 (such definitions to be equally applicable to both the
singular and plural forms of the terms herein defined):

“8-K Filing” has the meaning ascribed to
such term in Section 6.3.

“2005 Annual Report” has the meaning ascribed to
such term in Section 4.6(a).

“Action” means any legal, administrative,
arbitration or other similar suit, inquiry, notice of violation, investigation, proceeding,
claim, or action.

“Affiliate” means
any Person that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 144
under the Securities Act.

“Agreement” has the meaning
ascribed to such term in the Recitals.

“Applicable Law” means any federal,
state, local or foreign statute, law, ordinance, rule, regulation, order, writ,
injunction, judgment, decree, directive, principle of common law or 

 

interpretation
of any of the foregoing by a Governmental Authority applicable to a Person or
any such Person’s subsidiaries, properties, assets, officers, directors,
employees or agents.

“Certificate of Designations” has the meaning ascribed to such term in Section 2.1.  “Certificate of Incorporation” has the
meaning ascribed to such term in Section 2.1. 
“Closing” has the meaning ascribed to such term in Section 3.1.

“Closing Date” has the meaning
ascribed to such term in Section 3.1.

“Common Stock” has the meaning ascribed to such term
in Section 2.1.

“Contracts” shall mean all written agreements, contracts, commitments and undertakings, indentures,
notes, bonds, loans, instruments, treaties, leases, mortgages and other binding
arrangements.

“Conversion Shares” has the meaning ascribed to such
term in Section 2.1.

“Disclosure Schedule” has the meaning ascribed to
such term in the preamble to Article 4.

“Domiciliary Regulators” means the Governmental Authorities responsible
for regulating insurance companies in the Insurance Companies’
respective states of domicile.

“DTC” has the meaning ascribed to such Wm in Section
7.1.

“DTC Transfer Conditions” has the meaning ascribed
to such term in Section 7.1.

“Encumbrance” means any lien, pledge, security
interest, easement or encumbrance of any kind or nature whatsoever, and any
agreement to give or grant or permit any of the foregoing; provided that this definition of “Encumbrance”
shall not include: (i) liens for current Taxes and assessments not yet due and
payable, including, without limitation, liens for non-delinquent ad valorem
Taxes, non-delinquent statutory liens arising other than by reason of any default on the part of the Company or the
Subsidiaries and liens for Taxes being contested by the Company in good
faith, (ii) such liens, minor imperfections of title or easements on real property, leasehold estates or personal property as
do not in any material respect detract from the value thereof and do not
in any material respect interfere with the present use of the property subject
thereto, (iii) materialmen’s, mechanics’, workmen’s, repairmen’s, employees’,
carriers’, warehousemen’s and other like liens arising in the ordinary course
of business or relating to any construction,
rebuilding or repair of any property leased, so long as the obligations to
which such liens relate are not delinquent and also so long as any such
lien does not materially impair the value of such leased property, (iv) any
such lien, pledge, security interest, easement or encumbrance arising solely as
a result of any action taken by Purchaser or any of its Affiliates and (v) any
limitation or restriction imposed upon the transfer of the Securities by any
registration provision of the Securities Act of 1933, as amended, or any
applicable state securities law regulating the disposition of the Securities.

“Exchange Act” has the meaning ascribed to such term in Section 4.6.

 

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“GAAP” has the men g ascribed to such terra in
Section 4.6.

“Global Select Market” has the meaning ascribed to
such term in Section 4.13.

“Governmental Authority” means any nation or
government, any state or other political subdivision thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government or any self-regulatory agency,
commissioner or authority.

“Indemnities” has
the meaning ascribed to such term in Section 9.11.  “Indemnified
Liabilities” has the meaning ascribed to such term in Section 9.11.

“Insurance Company”
means any Subsidiary that is engaged in the business of issuing insurance
policies.

“Insurance Contract”
means any insurance policy, annuity contract, or guaranteed investment contract
entered into with a customer whether directly or by reinsurance.

“Investigation” means any governmental or regulatory
investigation.  “Lock-Up Period” has the
meaning ascribed to such term
in Section 7.5.  “Material Adverse Effect” has the meaning ascribed
to such term in Section 4.1.

“Non-Domiciliary
Regulators” means the Governmental Authorities responsible for regulating
insurance companies outside of the Insurance Companies’ respective states of
domicile.

“Permits” means all licenses, permits, orders,
consents, approvals, registrations, authorizations, qualifications and filings
with and under all Applicable Laws and Governmental Authorities and all
industry or other non-governmental self regulatory organizations.

“Person” means any individual, corporation, company,
partnership (limited or general), joint venture, limited liability company,
association, trust, a government, any department or agency thereof or any other
entity.

“Press Release” has
the meaning ascribed to such term in Section 6.3.

“Purchaser” has
the meaning ascribed to such term in the Recitals.

“Registration Rights Agreement”
has the meaning ascribed to such terra in Section 3.2.  “Regulation D” has the
meaning ascribed to such term in the Recitals.

“Required Minimum” means, as of any date, 125% of
the maximum aggregate number of shares of Common Stock then issuable in the
future pursuant to the Transaction Documents, including any Conversion Shares
issuable upon the exchange of all Shares, ignoring any exchange, conversion or
exercise limits set forth therein, determined on the basis of the Exchange Rate
(as defined in the Certificate of Designation), in each case as in effect on
the Trading Day immediately prior to the date of determination.

 

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“Rule 144” means Rule 144 promulgated by the SEC
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the SEC having
substantially the same effect as such Rule.

“SEC” has the meaning ascribed to such term in
Section 43(b).  “SEC Reports” has the
meaning ascribed to such term in Section 4.6. 
“Securities Act” has the meaning
ascribed to such tens’ in Section 4.6.

“Security”  and “Securities”
have the meaning ascribed to such terms in Section 2.1.  “Select SEC Reports”
has the meaning ascribed to such term in Section 4.6.  “Shares” has the meaning ascribed to such
term in the Recitals.  “Subsidiaries” has
the meaning ascribed to such term in Section 4.1.

“Tax” means (i) all federal, state, local and
foreign taxes, charges, fees, imposts, levies and other assessments, including,
without limitation, all income, gross receipts, capital, sales, use, ad
valorem, value added, transfer, franchise, profits, inventory, capital stock,
license, payroll, employment, social security, unemployment, excise, severance,
stamp, occupation, property and estimated taxes, all taxes which are required
to be withheld, customs duties, fees, assessments and charges of any kind
whatsoever, (ii) all interest, penalties, fines, additions to tax and additional amounts imposed by any Taxing
Authority in connection with any item described in clause (i), and (iii)
any transferee liability in respect of any items described in clauses (i) or
(ii) payable by reason of contract, assumption, transferee liability, operation
of law, Treasury Regulation Section 1.1502-6(a) (or any predecessor or
successor thereof of any analogous or similar provision under law) or
otherwise.

“Taxing Authority” means the Internal Revenue
Service or any other Governmental Authority responsible for the administration
of any Tax.

“Trading Day” means a day on which the Common Stock
is traded on the Global Select Market.

“Transaction Documents” has the meaning ascribed to
such term in Section 3.2.

2.             AGREEMENT
TO SELL AND PURCHASE.

2.1          Authorization of Shares.  The Company has authorized (a) the issuance to Purchaser of the Shares and (b) the
issuance of such shares of its common stock, par value $0.01 per share
(the “Common Stock”) to be issued upon conversion of the Shares (the “Conversion
Shares”).  The Shares and the Conversion
Shares are collectively referenced herein as
the “Securities” and each of them may individually be referred to herein as a “Security.”
The Securities have the rights, preferences, privileges and restrictions set
forth in the Amended and Restated
Certificate of Incorporation of the Company (the “Certificate of Incorporation”)
and the Certificate of Designations of
the Series A-1 Preferred Stock attached hereto as Exhibit A (the “Certificate
of Designations”).

2.2          Exchange.  Subject to the terms and conditions hereof, at the Closing (as hereinafter
defined), the Company and the Purchaser hereby agree to exchange the Shares for
the shares of Series A Preferred Stock of the Company held by the Purchaser.

 

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3.             CLOSING, DELIVERY AND PAYMENT.

3.1          Closing.  Subject to the satisfaction (or waiver) of the conditions
set forth in Article 8 hereof, the closing of the sale and purchase of the
Shares (the “Closing”) shall take place at 10:00 a.m., New York City time, on
the date hereof, at the offices of the Company, 120 Broadway, New York, New
York 10271 or at such other time or place as the Company and the Purchaser
shall mutually agree (such date is hereinafter referred to as the “Closing Date”).

3.2          Delivery.  At the Closing, subject to the terms and conditions
hereof, the Company will deliver to the Purchaser a certificate representing
the Shares, against delivery by the Purchaser
of the certificate or certificates representing 40,000 shares of Series A
Preferred Stock of the Company, duly endorsed for transfer and accompanied by
such instruments of transfer as the Company shall reasonably request, free and
clear of all liens, claims, charges, pledges,
encumbrances and security interests of any kind or nature whatsoever.  This Agreement, the Registration
Rights Agreement dated as of December 4, 2006 between the Company and the
Purchaser (as assignee of CastlePoint Reinsurance Company, Ltd.) (the “Registration Rights Agreement”) and the
Certificate of Designations are collectively referred to herein as the “Transaction
Documents.”

3.3          Registration Rights
Agreement.  The Company and the Purchaser agree that
the Shares and the Conversion Shares shall constitute “Registrable Securities”
as such terra is defined in the Registration Rights Agreement.

3.4          Fees and Expenses.  Subject to Section 3.3 or as otherwise set forth herein
or the Registration Rights
Agreement, the Company and the Purchaser shall each be responsible for the fees
and expenses incurred by it in connection with this Agreement and the
transactions contemplated hereby.

4.             REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.

Except as set forth under the corresponding section
of the disclosure schedule delivered to the Purchaser concurrently herewith
(the “Disclosure Schedule”), the Company hereby represents and warrants as of
the date hereof to Purchaser as follows:

4.1          Organization, Good
Standing and Qualification.  The Company and each of its direct and
indirect subsidiaries (collectively, the “Subsidiaries”) is a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction in which it is incorporated, and has all requisite
corporate power and authority to own and operate its properties and assets, to
carry on its business as presently conducted The Company and each of its
Subsidiaries is duly qualified to do business and is in good standing as a
foreign corporation in all jurisdictions in which the nature of its activities
and of its properties (both owned and leased) makes such qualification
necessary, except for those jurisdictions in which failure to do so would not have or
reasonably be expected to have a Material Adverse Effect.  For
purposes of this Agreement, “Material Adverse Effect” means any effect which,
individually or in the aggregate with all other effects, reasonably
would be expected to be materially adverse to (i) the legality, validity or
enforceability any of the Transaction Documents or the Securities, (ii) the ability of the Company to perform on a
timely basis its obligations under this Agreement or 

 

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any of the
other Transaction Documents or (iii) the business, operations, assets,
properties, prospects, reputation, financial condition or results of operations
of the Company and its Subsidies,
taken as a whole.

4.2          Authorization; Binding
Obligations.  (i) The Company has the requisite
corporate power and authority to execute and deliver this Agreement and the
other Transaction Documents, to issue and sell the Securities in accordance
with the terms thereof and to carry out the provisions of this Agreement and
the other Transaction Documents, and (ii) all corporate
action on the part of the Company, its officers, directors and stockholders
necessary for the authorization, execution and delivery of this
Agreement and each of the other Transaction Documents,
the performance of all obligations of the Company hereunder and thereunder and
the authorization, sale, issuance and delivery of the Shares pursuant
hereto and the Conversion Shares pursuant to the Certificate of Incorporation
and the Certificate of Designations has been taken.  Assuming that this Agreement and the
Registration Rights Agreement have been duly authorized, executed and delivered
by the Purchaser and constitute valid and binding obligations of the Purchaser,
this Agreement is, and the other Transaction Documents will be at the Closing,
valid and binding obligations of the Company enforceable in accordance with
their terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors’ rights, (b) general principles of equity that
restrict the availability of equitable remedies, and (c) to the extent that the
enforceability of the indemnification provisions in the Registration Rights
Agreement may be limited by Applicable Law.

4.3          Capitalization;
voting Rights.

(a)           The authorized
capital stock of the Company consists of 40 million shares of Common Stock and
two million shares of preferred stock, par value $0.01 per share (“Preferred
Stock”), of which 40,000 shares are (or upon filing of the Certificate of
Designation, will be) designated as Series A Preferred Stock.  As of November 1, 2006, 19,982,038 shares of
Common Stock were issued and outstanding and no shares of Preferred Stock were
issued and outstanding.

(b)           Except as provided
in the Company’s filings with the United States Securities and Exchange
Commission (the “SEC”), and except for the Securities, there are no outstanding
options, warrants, scrip, rights (including conversion, anti-dilution or
preemptive rights and rights of first refusal or similar rights), or contracts,
commitments, understandings or agreements of any kind by which the Company or any of its
Subsidiaries is or may become bound to issue any of its securities, nor are any
such issuances, contracts, commitments, understandings or arrangements
contemplated.

(c)           All issued and
outstanding shares of capital stock of the Company (i) have been duly
authorized and validly issued and are fully paid and nonassessable, and (ii)
were issued in compliance with all applicable state and federal laws concerning
the issuance of securities.

(d)           The Company does not
have any shareholder rights plan, “poison
pill” or other anti-takeover plans or similar arrangements.

 

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(e)           Except as set forth
i the Company’s filings with the SEC, there are no proxy, stockholder
agreements, voting agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or, to the knowledge of
the Company, between or among any of the Company’s stockholders.

(f)            The Company or one
of its Subsidiaries has the unrestricted right to vote, and (subject to
limitations imposed by Applicable Law) to receive dividends and distributions on,
all shares of capital stock of its Subsidiaries as owned by the Company or any
such Subsidiary.

(g)           The rights,
preferences, privileges and restrictions of the Securities are as stated in the
Certificate of Incorporation and the Certificate of Designations.  The Securities are duly authorized and when
issued in compliance with the provisions of this Agreement, the Certificate of
Designations and the Certificate of Incorporation, (i) the Securities will be
validly issued, fully paid and non-assessable, and will be free of any liens,
taxes, claims or other Encumbrances and (ii) will not be subject to preemptive
rights, rights of first refusal or other similar rights of stockholders of the
Company or any other person provided,
however, that the Shares and the Conversion Shares may be subject to
restrictions on transfer under the Registration Rights Agreement, state and/or
federal securities laws as set forth herein or as otherwise required by such
laws at the time a transfer is proposed. 
As of the Closing Date, the Company shall have reserved from its duly
authorized capital stock a number of shares of Common Stock for issuance of the
Conversion Shares at least equal to the Required Minimum on the date hereof.

4.4          Compliance with Other Instruments; Absence of
Conflicts.  Neither the Company nor any of its
Subsidiaries is in violation or default of, and the execution, delivery, and
performance of and compliance with this Agreement and the other Transaction Documents by the Company, and, assuming the
accuracy of the warranties and representations of the Purchaser herein,
the issuance and sale of the Shares pursuant hereto and of the Conversion
Shares pursuant to the Certificate of Incorporation and the Certificate of
Designations, will not, with or without the passage
of time or giving of notice, result in any violation of, or be in conflict
with or constitute a default under, (i) any term of the Certificate of
Incorporation or the Company’s bylaws as in effect on the date
hereof (the “Bylaws”) or the Subsidiaries’ organizational documents, (ii) any provision of any Contract to which the
Company or any of its Subsidiaries is party or by which it or any of them or
any of its or their respective properties is bound or affected, or (iii) any Applicable Law to which the Company or
any of its Subsidiaries is subject
(including United States federal and state securities laws, rules and
regulations and rules and regulations
of any self-regulatory organizations to which either the Company or its
securities  are  subject) or by which any property or asset of the Company or
any of its Subsidiaries is bound or
affected, other than, in the case of clauses (ii) and (iii), any such
violation, default, conflict that would not, individually or in the aggregate,
have a Material Adverse Effect.  The
execution, delivery, and performance by the Company of and compliance by the
Company with this Agreement and the other Transaction Documents, and the
issuance and sale of the Shares pursuant
hereto and of the Conversion Shares pursuant to the Certificate of
Incorporation and the Certificate of
Designations, will not, with or without the passage of time or giving of
notice, result in the creation of any Encumbrance or charge upon any of the
properties or assets of the Company or any of its Subsidiaries or the 

 

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suspension, revocation, impairment, forfeiture or nonrenewal of any Permit
applicable to the Company or any of its Subsidiaries or any of its or
their assets or properties, other than any such Encumbrances, charges,
suspensions, revocations, impairments, forfeitures or nonrenewals that would
not, individually or in the aggregate, have a Material Adverse Effect.

4.5          Consents.  No governmental orders, permissions, consents,
approvals or authorizations are required to be obtained by the Company and no
registrations or declarations are required to be fled by the Company in
connection with the execution and delivery of this Agreement or the issuance of
the Shares or the Conversion Shares, except such as have been duly and validly
obtained or filed, or with respect to
any filings that must be made after the Closing, as will be filed in a timely
manner.

4.6          SEC Reports; Financial Statements.  The Company has filed in a timely manner (within
applicable extension periods) all documents that the Company was required to
file with the SEC under the Securities Act of 1933, as amended (the “Securities
Act”) and the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
preceding the date of this Agreement (all of the foregoing filed prior to the
date hereof and all exhibits included therein and financial statements and
schedules thereto and documents incorporated by reference therein, the “SEC
Reports”).  The SEC Reports complied in
all material respects with the applicable requirements of the Exchange Act or
the Securities Act, as the case may be, and the rules and regulations of the
SEC as of their respective filing dates, and the information contained therein
as of the date thereof did not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading.  Except as
disclosed on Section 4.6 of the Disclosure Schedule, none of the statements
made in any such SEC Reports is, or has been, required to be amended or updated
under Applicable Law (except for such statements as have been amended or
updated in subsequent filings made prior to the date hereof).  As of their respective dates, the financial
statements of the Company included in the SEC Reports complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC applicable with respect thereto.  Such financial statements have been prepared
in accordance with U.S. generally accepted accounting principles (“GAAP”),
consistently applied, during the periods involved (except as may be otherwise indicated in such financial statements or the notes
thereto or, in the case of unaudited interim statements, to the extent they may
not include footnotes or may be condensed or summary statements) and fairly
present in all material respects the consolidated financial position of the Company
and its consolidated Subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments).  Except as set forth in the most recent
financial statements of the Company included in the Select SEC Reports, the
Company has no liabilities, contingent or otherwise, other than (i) liabilities
incurred in the ordinary course of business subsequent to the date of such
financial statements and (ii) liabilities incurred in the ordinary course of
business and not required under GAAP to be reflected in such financial
statements, which liabilities and obligations referred to in clauses (i) and
(ii), individually or in the aggregate, are not material to the financial
condition or operating results of the Company. 
For purposes of this Agreement, “Select SEC Reports” means the Company’s
(A) Proxy Statement for its 2006 Annual Meeting, (B) Annual Report on Form
10-K/A for the fiscal year ended December 31, 2005 (the “2005 Annual Report”),
(C) 

 

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Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 2006, June 30, 2006, September 30, 2006 and
(D) Current Reports on Form 8-K filed since September 30, 2006.

4.7          Absence of Certain Changes; No
Material Adverse Effect.  Except as set forth in the Select SEC
Reports, since December 31, 2005, there has been no event  or occurrence which has had or would
reasonably be expected to have a Material Adverse Effect.  The Company
has not taken any steps, and does not currently expect to take any steps, to
seek protection pursuant to any bankruptcy or receivership law, nor does the
Company or any of its Subsidiaries have any knowledge or reason to believe that
its creditors intend to initiate involuntary bankruptcy proceedings with
respect to the Company or any of its Subsidiaries.

4.8          Filings.  Except as set forth in the Select SEC Reports or in
Section 4.8 of the Disclosure Schedule, since January 1, 2004, (i) the Company
and the Subsidiaries have filed all material reports, statements, documents,
registrations, filings and submissions required to be filed with any
Governmental Authority, and all such reports, statements, documents,
registrations, filing and submissions complied in all material respects with
Applicable Law in effect when
filed, and (ii) no material deficiencies have been asserted in writing by, nor
have any material comments been received from, nor any material penalties
imposed by, any such Governmental Authorities with respect to such reports,
statements, documents, registrations, filings or submissions.

4.9          Permits.  The Company and its Subsidiaries have all
Permits in each of the jurisdictions in which the Company and the Subsidiaries
conduct or operate their respective businesses as now being conducted, and all
such Permits are in full force and effect, with such exceptions which
singularly and in the aggregate have not and would not reasonably be expected
to have a Material Adverse Effect, and the Company believes it or its
Subsidiaries can obtain, without undue burden or expense, any similar authority
for the conduct of their respective businesses as planned to be conducted.  The Company and the Subsidiaries are, and at
all times since January 1, 2004 have been, in compliance in all material
respects with the terms of the Permits.  No
event has occurred or circumstance exists that (with or without the giving of
notice or lapse of time or both) (1) constitutes or would reasonably be
expected to result in, directly or indirectly, a violation of, or a failure to
comply with any Permit, or (2) has resulted or would reasonably be expected to result, directly or indirectly, in the
revocation, withdrawal, suspension, cancellation, or termination of, or any
modification to, any Permit, except for such violations or failures to comply
or revocations, withdrawals, suspensions, cancellations, terminations or modifications that would not
reasonably be expected to have a Material Adverse Effect.  The consummation of the
transactions contemplated by this Agreement and the other Transaction Documents will not result in any
revocation, cancellation, suspension or nonrenewal of any such material Permit.

4.10        Litigation.

(a)           Except as disclosed
in the Select SEC Reports and other than Actions arising in the ordinary course
of business from or related to the obligations of the Company under any
Insurance Contract or similar contract written, assumed or reinsured by the Company, there are no pending or, to the knowledge
of the Company, threatened Actions against  and to 

 

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the knowledge of the Company, no pending or threatened Investigations of,
the Company,  any Subsidiary or any of their properties or assets
challenging the validity or propriety of, or that have the effect of
preventing, delaying, making illegal or otherwise interfering with any of the
transactions contemplated by this Agreement or the other Transaction Documents.

(b)           As of the date of
this Agreement, there are no pending Actions or, to the knowledge of the
Company, threatened material Actions against, and to the knowledge of the
Company, no pending or threatened Investigations of, any current or former
officer or director of any of the Company or the Subsidiaries in his or her
capacity as an officer or director of any of the Company or the Subsidiaries.

4.11        Registration Rights.  Except as required pursuant to the Registration Rights
Agreement and except as disclosed in the SEC Reports, the Company is presently not under any obligation, and has not
granted any rights, to register under the Securities Act, any of the
Company’s presently outstanding securities or any of its securities that may
hereafter be issued.

4.12        Broker’s Fees.  No agent, broker, investment banker, person or film acting on behalf of or under the authority of the Company is or will
be entitled to any fee or commission from the Purchaser directly or
indirectly in connection with the transactions contemplated herein.

4.13        Listing and Maintenance Requirements.  The Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and the Company
has taken no action designed to, or which to its knowledge is likely to have
the effect of, terminating the registration of the Common Stock under the
Exchange Act nor has the Company received any notification that the Commission
is contemplating terminating such registration. 
The Common Stock is currently listed for trading on the Nasdaq Global
Select Market (the “Global Select Market”). 
The Company has not received notice from the Global Select Market on
which the Common Stock is or has been listed
or quoted to the effect that the Company is not in compliance with the
listing or maintenance requirements of the Global Select Market.  The Company is, and has no reason to believe
that it will not continue to be, in compliance with all such listing and
maintenance requirements.  Prior to the
conversion of the Shares, the Company shall secure the listing of the Conversion Shares on the Global Select Market and on each
other national securities exchange, automated quotation system or
over-the-counter market upon which the shares
of Common Stock are then listed (subject to official notice of issuance).  The issuance and delivery of the Shares pursuant hereto and the
Conversion Shares pursuant to the Certificate of Incorporation and the
Certificate of Designations will not constitute a change of control under the
rules of the Global Select Market.

4.14        Anti-Takeover Provisions.  The Company and its board of directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under its Certificate of Incorporation or the laws of
the state of its incorporation (including §203 of the Delaware General
Corporation Law) which is or could become applicable to Purchaser as a result
of the transactions contemplated by this Agreement, including, without
limitation, the Company’s issuance of the Securities and Purchaser’s ownership
of the Securities.

 

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4.15        Private Placement.  Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section
5.3, no registration under the Securities Act or any state securities laws is required for the offer and sale of
the Securities by the Company to Purchaser as contemplated hereby.  The issuance and sale of the Securities
hereunder does not contravene the rules and regulations of the Global Select
Market or any state securities laws.

4.16        No General Solicitation
or Integrated Offering.  Neither the Company nor any distributor
participating on the Company’s behalf in the transactions contemplated hereby
(if any) nor any Person acting for the Company, or any such distributor, has
conducted any “general solicitation” (as such term is defined in
Regulation D) or general advertising with respect to any of the Securities
being offered hereby.  Neither the
Company nor any of its Affiliates, nor any person acting on its or their
behalf, has directly or indirectly made any offers or sales of any security or
solicited any offers to buy any security under circumstances that would require
registration of the Securities being offered hereby under the Securities Act or
cause this offering of Securities to be integrated with any prior offering of
securities of the Company for purposes of the Securities Act, which result of
such integration would require registration under the Securities Act, or that
would be integrated with the offer or sale of the Securities for the purpose of
the rules and regulations of the Global Select Market or any applicable
stockholder approval provisions.

5.             REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER.

The Purchaser hereby represents and warrants to the
Company as follows (provided that such representations and warranties do not
lessen or obviate the representations and warranties of the Company set forth
in this Agreement):

5.1          Organization and Good Standing.  The Purchaser is duly incorporated, validly existing
and in good standing under the laws of the State of Delaware.  The Purchaser has all requisite corporate
power and authority to own and operate its properties and assets, to carry on its business as presently
conducted, to execute and deliver this Agreement and Registration Rights Agreement.

5.2          Requisite Power and
Authority.  All corporate action on the part of the
Purchaser, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement and the Registration
Rights Agreement and the performance of all obligations of the Purchaser
hereunder and thereunder has been taken. 
Assuming that this Agreement and the Registration Rights Agreement have
been duly authorized, executed and delivered by the Company and constitute
valid and binding obligations of the Company, this Agreement is, and the
Registration Rights Agreement will be at the Closing, valid and binding
obligations of the Purchaser enforceable in accordance with their terms, except
(a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of
general application affecting enforcement of creditors’ rights, (b) general
principles of equity that restrict the availability of equitable
remedies, and (c) to the extent that the enforceability of the indemnification
provisions in the Registration Rights Agreement may be limited by applicable
laws.

 

11

 

5.3          Investment
Representations.  The Purchaser understands that neither
the Shares nor the Conversion Shares have been registered under the Securities
Act or under any state or non-U.S. securities law.  The Purchaser also understands that the
Shares are being offered and sold pursuant to an exemption from
registration contained in the Securities Act based in part upon the
Purchaser’s representations contained in this Agreement.  The Purchaser hereby represents and warrants
as follows:

(a)           The Purchaser Bears Economic Risk.  The Purchaser is knowledgeable, sophisticated and experienced in
making, and is qualified to make decisions with respect to investments
in shares presenting an investment decision like that involved in the purchase
of the Shares capable of evaluating the merits and risks of its investment in
the Company and has the capacity to protect its own interests.  The Purchaser understands that it must bear
the economic risk of this investment indefinitely unless the Shares (or the
Conversion Shares) are transferred in a transaction that is registered pursuant
to the Securities Act or exempt from registration.  The Purchaser understands that the Company
has no present intention of registering the Shares or the Conversion Shares
except as provided in the Registration Rights Agreement.  The Purchaser also understands that there is
no assurance that any exemption from registration under the Securities Act will
be available for any proposed transfer of the Shares or the Conversion Shares
and that, even if available, such exemption may not allow the Purchaser to
transfer all or any portion of the Shares or the Conversion Shares under the
circumstances, in the amounts or at the times the Purchaser aught propose.

(b)           Acquisition for Own Account.  The Purchaser is acquiring the
Shares and the Conversion Shares for the Purchaser’s own account for investment
only, and not with a view towards their distribution.

(c)           Accredited Investor. 
The Purchaser represents that it is an institutional “accredited
investor” within the meaning of Regulation D under the Securities Act.

(d)           Company Information. 
The Purchaser has received and read the SEC Reports and has
had an opportunity to discuss the Company’s business, management and financial
affairs with directors, officers and management of the Company and has had the
opportunity to review the Company’s operations and facilities.  The Purchaser has also had the opportunity to
ask questions of and receive answers from, the Company and its management
regarding the terms and conditions of this investment.  The Purchaser has, in connection with the
decisions to purchase the Shares, relied only upon the SEC Reports and the
representations and warranties of the Company set forth in the Transaction
Documents.

(e)           No Action Outside the United States.  The Purchaser acknowledges that
the Company has taken no action or will take any action in any jurisdiction
outside the United States to permit an offering of the Shares or the Conversion
Shares, or possession or distribution of offering materials in connection with the issuance of
the Shares or the Conversion Shares, in any jurisdiction outside the United
States where legal action by the Company for that purpose is required.  The Purchaser will comply with all applicable
laws and regulations in each jurisdiction outside the United States in which it purchases,
offers, sells or delivers Shares or
Conversion Shares or has in its possession or distributes any offering
material, in each case at its own expense.

 

12

 

5.4          Transfer Restrictions.  The Purchaser acknowledges and agrees that the Shares
and, if issued, the Conversion Shares are subject to restrictions on transfer
as set forth herein and in the Registration Rights Agreement.

5.5          Covering Short Positions.  The Purchaser will not use the Shares or the
Conversion Shares to cover any short position in the Common Stock if doing so
would be in violation of applicable securities laws.

5.6          No Legal, Tax or
Investment Advice.  The Purchaser understands that nothing in the SEC Reports, this Agreement,
the Registration Rights Agreement or any other materials presented to
the Purchaser in connection with the purchase and sale of the Shares
constitutes legal, tax or investment advice. 
The Purchaser has consulted such legal, tax and investment advisors as
it, in its sole discretion, has deemed necessary or appropriate in connection
with its purchase of the Shares.

5.7          Ownership of Company
Stock.  None of the Purchaser or the Purchaser’s subsidiaries beneficially owns (as such term is defined for
purposes of Section 13(d) of the Exchange Act) any shares of the Common
Stock of the Company or any other class or series of the Company’s
capital stock.

5.8          Broker’s Fees.  No agent, broker, investment banker, person or fern acting on behalf of or under the authority of
the Purchaser is or will be entitled to any fee or commission from the
Company directly or indirectly in connection with the transactions contemplated
herein.

5.9          Title to Shares of Series A Preferred Stock.  The Purchaser has, and immediately prior to the
Closing will have, legal and valid title to 40,000 shares of Series A Preferred
Stock of the Company free and clear of all liens, claims, charges, pledges, encumbrances and security interests of any kind or
nature whatsoever.  At the Closing the
Company will acquire legal and valid title to such shares of Series A Preferred
Stock of the Company, in each case free and clear of all liens, claims,
charges, encumbrances and security interests of any kind or nature whatsoever,
provided that no representation is made as to any of the foregoing resulting
from any action or omission by the Company.

6.             COVENANTS.

6.1          Best Efforts.  The parties shall use their respective best efforts
timely to satisfy each of the conditions described in Sections 8.1 and 8.2 of
this Agreement.

6.2          [Reserved]

6.3          Press Release; Form 8-K;
Publicity.  The Company may issue on or before the
next business day following the date hereof a press release (the “Press Release”)
announcing the entry into the transactions contemplated hereby and shall within
two days following the date hereof file a Current Report on Form 8-K with the
SEC concerning this Agreement and the transactions contemplated hereby (the “8-K
Filing”).  The Company and the Purchaser
shall consult with each other in issuing any other press releases with respect
to the transactions contemplated hereby, and neither the Company nor the
Purchaser shall issue any such press release or otherwise make any such public
statement without the prior consent of the Company, 

 

13

 

with respect to
any press release of the Purchaser, or without the prior consent of the
Purchaser, with respect to any press release of the Company, which consent
shall not unreasonably be withheld, except if
such disclosure is required by law, in which case the disclosing party shall
promptly provide the other party with prior notice of such public statement or
communication.

6.4          Reservation of Shares.  The Company shall, if applicable: (i) in the time and
manner required by the Global Select Market, but in any event prior to the
conversion of the Shares into Common Stock, prepare and file with the Global
Select Market an additional shares listing
application covering a number of shares of Common Stock at least equal
to the Required Minimum on the date of such application, (ii) take all steps
necessary to cause such shares of Common Stock to be approved for listing on the
Global Select Market as soon as possible thereafter, (iii) provide to the
Purchaser evidence of such listing, and (iv) from and after the conversion of
the Shares into Common Stock, maintain the listing of such Common Stock on the
Global Select Market.

6.5          No Integrated Offerings.  The Company shall not make any offers or sales of any
security (other than the Securities) under circumstances that would require
registration of the Securities being offered or sold hereunder under the
Securities Act or cause this offering of the Securities to be integrated with
any other offering of securities by the Company for purposes of any stockholder
approval provision applicable to the Company or its securities.

6.6          Legal Compliance.  The Company shall conduct its business and the
business of its Subsidiaries in compliance with all Applicable Laws, except
where the failure to do so would not have a Material Adverse Effect.

6.7          Information.  So long as Purchaser (or any of
its Affiliates) beneficially owns any of the Securities, the Company shall
furnish to Purchaser the information the Company must deliver to any
holder or to any prospective transferee of Securities in order to permit the sale or
other transfer of such Securities pursuant to Rule 144A of the SEC or any similar
rule then in effect.  The Company shall
keep at its principal executive office a true copy of this Agreement (as at the
time in effect), and cause the same to be available for inspection at such
office during normal business hours by any holder of Securities or any
prospective transferee of Securities designated by a holder thereof.

6.8          Pledge of Securities.  The Company acknowledges and agrees that the
Securities may be pledged by Purchaser in connection with a bona fide margin
agreement or other loan or financing arrangement that is secured by the
Securities.  The pledge of Securities
shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and if Purchaser effects a pledge
of Securities, it shall not be required to provide the Company with any  notice thereof or otherwise make any delivery to
the Company pursuant to this Agreement or any other Transaction Document.  The Company shall execute and deliver such
documentation as a pledgee of the Securities
may reasonably request in connection with a pledge of the Securities to
such pledgee by Purchaser.

 

14

 

6.9          Investment Company Act.  The Company shall conduct its business in a manner so
that it will not be required to register as an investment company under the
Investment Company Act.

7.             SECURITIES
TRANSFER MATTERS.

7.1          Conversion and Exercise.  Upon conversion of the Shares by any person, (i) if
the DTC Transfer Conditions (as defined below) are satisfied, the Company shall
cause its transfer agent to electronically transmit all Conversion Shares by
crediting the account of such person or its nominee with the Depository Trust
Company (“DTC”) through its Deposit Withdrawal Agent Commission system; or (ii)
if the DTC Transfer Conditions are not satisfied, the Company shall issue and deliver, or instruct its transfer agent to
issue and deliver, certificates  (subject
to the legend and other applicable provisions hereof and the Certificate of
Designation), registered in the name of such person its nominee,
physical certificates representing the Conversion Shares.  Even if the DTC Transfer Conditions are
satisfied, any person effecting a conversion
of Shares may instruct the Company to deliver to such person or its nominee
physical  certificates representing the
Conversion Shares, in lieu of delivering such shares by way of DTC
Transfer.  For purposes of this
Agreement, “DTC Transfer Conditions” means that (A) the Company’s
transfer agent is participating in the DTC Fast Automated Securities Transfer program and (B) the certificates for the Conversion
Shares required to be delivered do not bear a legend and the person
effecting such conversion or exercise is not then required to return such
certificate for the placement of a legend thereon.

7.2          Transfer or Resale. 
Purchaser
understands that (i) except as provided in the Registration Rights Agreement,
the sale or resale of the Securities have not been and are not being registered
under the Securities Act or any state securities laws, and the Securities may not be transferred unless (A) the
transfer is made pursuant to and as set forth in an  effective registration statement under the
Securities Act covering the Securities; or (B) Purchaser shall have delivered to the Company an opinion of
counsel reasonably satisfactory to the Company (which opinion shall be in form,
substance and scope customary for opinions of counsel in comparable transactions) to the effect that the Securities to
be sold or transferred may  be sold or transferred pursuant to an exemption
from such registration; or (C) sold or transferred  to an
affiliate of Purchaser that agrees to be bound by this .Article 7; and (ii)
neither the Company nor any other
person is under any obligation to register such Securities under the Securities
Act or any state securities laws (other than pursuant to the terms of the
Registration Rights Agreement).  Notwithstanding
the foregoing or anything else contained herein to the contrary, the Securities
may be pledged as collateral in connection with a bona fide margin account or
other lending arrangement, provided such pledge is consistent with Applicable
Laws.

7.3          Legends.  Purchaser understands that the Shares and, until such
time as the Conversion Shares have been registered under the Securities Act
(including registration pursuant to Rule 416 thereunder) as contemplated by the
Registration Rights Agreement or otherwise may be sold by such Purchaser under
Rule 144, the Certificates for the Conversion Shares may bear a restrictive
legend in substantially the following form:

 

15

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES OR IN ANY OTHER JURISDICTION.  THE SECURITIES REPRESENTED HEREBY MAY NOT BE
OFFERED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS UNLESS OFFERED, SOLD
OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION E ROM THE REGISTRATION
REQUIREMENTS OF THOSE LAWS.

The Company shall, immediately prior to a
registration statement covering the Securities (including, without limitation,
the Registration Statement contemplated by the Registration.  Rights Agreement) being declared effective,
deliver to its transfer agent an opinion letter of counsel, opining that at any
time such registration statement is effective, the transfer agent may issue, in
connection with the issuance of the Conversion Shares, certificates
representing such Conversion Shares without
the restrictive legend above, provided such Conversion Shares are to  be sold pursuant to the prospectus contained in
such registration statement.  Upon
receipt of such opinion, the Company shall cause the transfer agent to
confirm, for the benefit of the holders, that no further opinion of counsel is
required at the time of transfer in order to issue such shares without such
restrictive legend.

The legend set forth above shall be removed and the
Company shall issue a certificate without such legend to the holder of any
Security upon which it is stamped, if, unless otherwise required by state
securities laws, (i) the sale of such Security is registered under the
Securities Act (including registration pursuant to Rule 416 thereunder) or (ii)
such holder provides the Company with an opinion of counsel, in form, substance
and scope customary for opinions of counsel in comparable transactions, to the
effect that a public sale or transfer of such Security may be made without
registration under the Securities Act, If the holder of any Security is an
affiliate of the Company, the legend on any such Security shall not he so
removed.  In the event the above legend
is removed from any Security and thereafter the effectiveness of a registration
statement covering such Security is suspended or the Company determines that a
supplement or amendment thereto is required by applicable securities laws, then upon reasonable advance written
notice to Purchaser the Company may require that the above legend be placed on
any such Security that cannot then be sold pursuant to an effective
registration statement or under Rule 144 and Purchaser shall cooperate in the
replacement of such legend.  Such legend
shall thereafter be removed when such
Security may again be sold pursuant to an effective registration
statement or under Rule 144.

7.4          Transfer Agent
Instruction.  Upon compliance by Purchaser with the
provisions of this Article 7 with respect to the transfer of any Securities,
the Company shall permit the transfer of such Securities and, in the case of
the transfer of Conversion Shares, promptly
instruct its transfer agent to issue one or more certificates (or effect a DTC
Transfer) in such name and in such denominations as specified by
Purchaser.  The Company shall not give
any instructions to its transfer agent with respect to the Securities, other
than any permissible or required instructions provided in this Article 7, and
the Securities shall otherwise be freely 

 

16

 

transferable on
the books and records of the Company as and to the extent provided in this
Agreement.

7.5          Lock-Up Period.  During the period from the date hereof until 1 80 days
from November 13, 2006 (the “Lock-Up Period”), the Purchaser will not (a)
directly or indirectly, offer, sell, agree to offer
or sell, solicit offers to purchase, grant any call option or purchase
any put option with respect to, pledge, borrow or otherwise dispose of any
Registrable Security, as defined in the Registration Rights Agreement, (b)
establish or increase any “put equivalent position” or liquidate or
decrease any “call equivalent position” with respect to any Registrable Security (in each case within the
meaning of Section 16 of the Exchange Act and the  rules and regulations promulgated thereunder), or
(c) otherwise enter into any swap, derivative or other transaction or
arrangement that transfers to another, in whole or in part, any of the economic consequence of ownership of a Registrable
Security, whether or not such transaction is to be settled by delivery
of Registrable Securities, other securities, cash or other consideration.

8.             CONDITIONS
TO CLOSING.

8.1          Conditions to the
Purchaser’s Obligations to Purchase the Shares. 
The
Purchaser’s obligations to purchase the Shares at the Closing are subject to
the satisfaction or waiver on or prior to the Closing Date of the following
conditions:

(a)           Representations and Warranties True; Performance of
Obligations.  The
representations and warranties made by the Company in Article 4 shall be true
and correct in all material respects as of the Closing Date, with the same
force and effect as if they had been
made on and as of said date, and the Company shall have performed, satisfied and
complied with all obligations, covenants and conditions herein required to be
performed, satisfied or complied with by it on or prior to the Closing.

(b)           Legal Investment. 
On the Closing Date, the sale and issuance of the Shares and
the proposed issuance of the Conversion Shares shall be legally permitted by
all laws and regulations to which the Purchaser and the Company are subject,

(c)           Consents, Permits, Waivers and Approvals.  The Company and the Purchaser shall have obtained any and all
consents, permits, waivers and approvals necessary or appropriate for
consummation of the transactions contemplated by this Agreement and the other
Transaction Documents and such consents, permits, waivers and approvals shall
be in full force and effect.

(d)           Compliance Certificate.  The Company shall have delivered
to the Purchaser a Compliance Certificate, executed by the Senior Vice President
and CFO of the Company, dated the Closing Date to the effect that the
conditions specified in subsections (a) and (c) (as it pertains to the Company)
of this Section 8.1 have
been satisfied, except that such Compliance Certificate shall not be
required if the Closing Date is the date hereof or the Business Day immediately
following the date hereof.

(e)           Listing.  The
Common Stock shall be authorized for quotation and listed on the Global Select
Market and trading in the Common Stock (or on the Global Select Market
generally) shall not have been suspended by the SEC or the Global Select
Market.

 

17

 

(f)            Certificate of Designations.  The Certificate of Designations,
substantially in the form attached hereto as Exhibit A, shall have been
approved and adopted by the Company.

8.2          Conditions to
Obligations of the Company to Issue and Sell the Shares.  The Company’s obligation to issue and sell the Shares
to the Purchaser at the Closing is subject to the satisfaction or waiver of the
following conditions:

(a)           Representations and Warranties True.  The representations and warranties
in Article 5 made by the Purchaser shall be true and correct in all material respects as of the Closing Date, with the
same force and effect as if they had been made on and as of said date,
and the Purchaser shall have performed all obligations and conditions herein required
to be performed or observed by it on or prior to the Closing.

(b)           Consents, Permits, Waivers and Approvals.  The Company and the Purchaser
shall have obtained any and all consents, permits, waivers and approvals
necessary or appropriate for consummation of the transactions contemplated by
this Agreement and the other Transaction Documents and such consents, permits,
waivers and approvals shall be in full force and effect.

(c)           Compliance Certificate.  The Purchaser shall have delivered
to the Company a Compliance Certificate, executed by an executive officer of
the Purchaser, dated the Closing Date to the effect that the conditions
specified in subsections (a) and (b) (as it pertains to the Purchaser) of this
Section 8.2 have been satisfied, except that such Compliance Certificate shall
not be required if the Closing Date is the date hereof or the Business Day
immediately following the date hereof.

9.             MISCELLANEOUS.

9.1          Governing Law.  This Agreement shall be governed by and construed
under the laws of the State of Delaware. 
The parties agree that any action brought by either party under or in
relation to this Agreement, including without limitation to interpret or
enforce any provision of this Agreement, shall be brought in, and each party
agrees to and does hereby submit to the
jurisdiction and venue of, any state or federal court located in the County of
New Castle, State of Delaware.  The
Company irrevocably waives the defense of an inconvenient forum to the
maintenance of such suit or proceeding in such forum.  The Company further agrees that service of
process upon the Company mailed by first class mail shall be deemed in every
respect effective service of process upon the Company in any such suit or
proceeding.  Nothing herein shall affect
the right of Purchaser to serve process in any other manner permitted by law.  The Company agrees that a final
non-appealable judgment in any such suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on such judgment or in any other
lawful manner.

9.2          Successors and Assigns.  The Purchaser may assign its right to purchase the
Shares to any one or more direct or indirect majority-owned subsidiaries;
provided that no such assignment shall
relieve the Purchaser of its obligations hereunder to the extent that
the assignee fails to fulfill the same.  Upon
any such permitted assignment, the references in this 

 

18

 

Agreement to the
Purchaser shall also apply to any such assignee unless the context otherwise
requires.  Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of and be
binding upon the parties hereto and their respective successors, assigns,
heirs, executors and administrators; provided, however, that prior to the receipt by the
Company of adequate written notice of the transfer of any Shares specifying the
full name and address of the transferee, the Company may deem and treat the
person listed as the holder of such Shares in its records as the absolute owner
and holder of such Shares for all purposes.

9.3          Entire Agreement.  This Agreement, the Disclosure Schedule and the other
Transaction Documents and the other documents delivered pursuant hereto or
thereto constitute the full and entire
understanding and agreement between the parties with regard to the
subjects hereof.

9.4          Severability.  In the event one or more of the provisions of this
Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or enforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.

9.5          Amendment and Waiver.  This Agreement may be amended or modified, and the
rights and obligations of the Company and the Purchaser may be waived, only
upon the written consent of the Company and the holders of at least a majority
of the Shares purchased or agreed to be purchased pursuant to this Agreement.

9.6          Notices.  All notices or other communications
required or per fitted hereunder shall be in writing and shall be deemed
effectively given: (i) upon personal delivery to the party to be notified, (ii)
upon receipt, if sent by facsimile during normal business hours of the recipient or, if not sent by facsimile
during normal business hours of the recipient, then on the next business day;
(iii) three days after having been sent, if sent by registered or certified
mail, return receipt requested, postage prepaid, or (iv) one day after deposit
with a nationally recognized overnight courier, if sent by such a courier,
specifying next day delivery, with written verification of receipt.  Notices to the Company shall be addressed to:

Tower Group, Inc.

120 Broadway, 31st Floor

New York, New York 10271

Attention: Stephen L.  Kibblehouse, Esq.  Fax Number: (646) 514-8612

with
a copy to:

LeBoeuf, Lamb, Greene & MacRae LLP  

125 West 55th Street

New York, New York 10019

Attention: Matthew Ricciardi, Esq.  Fax Number: (212) 424-8500

 

19

 

Notices
to the Purchaser shall be addressed to:

CastlePoint Management Corp.  120 Broadway

New York, New York 10271 Attention: Roger A. 
Brown Fax Number: (212) 847-9549

9.7          Titles and Subtitles.  The titles of the sections and subsections of the
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.

9.8          Third Party
Beneficiaries.  This Agreement is intended for the benefit
of the parties hereto and their respective permitted successors and assigns,
and is not for the benefit of, nor may any provision hereof be enforced by, any
other person.

9.9          Survival.  The representations and warranties
of the Company axed the
agreements and covenants set forth in Sections 4, 6, 7 and 9 hereof shall
survive until the one  year anniversary
of the Closing notwithstanding any due diligence investigation conducted by or on behalf of Purchaser.  Moreover, none of the representations and, warranties
made by the Company herein shall act as a waiver of any rights or remedies
Purchaser may have under applicable U.S. 
federal or state securities laws.

9.10        Further Assurances. 
Each party
shall do and perform, or cause to be done and performed, all such further acts
and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably consummation of the transactions contemplated
hereby.

9.11        Indemnification.  In consideration of Purchaser’s execution and delivery
of this Agreement and the other Transaction Documents and purchase of the
Securities hereunder, and in addition to all of the Company’s other obligations
under this Agreement and the other
Transaction Documents, from and after the Closing, the Company shall defend,
protect, indemnify and hold harmless Purchaser and all of its officers,
directors and employees and any of the foregoing persons’ agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement, collectively, the “Indernnitees”) from and against any and all
actions, causes of action, suits, claims, losses, costs, penalties,
fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys’ fees
and disbursements (the “Indemnified Liabilities”), incurred by any Indemniee as
a result of, or arising out of, or relating to (i) any misrepresentation or
breach of any representation or warranty made by the Company in this Agreement,
any other Transaction Document or any other certificate, instrument or document
delivered by the Company at the Closing or (ii) any breach of any covenant,
agreement or obligation of the
Company contained in this Agreement, any other Transaction Document or any
other certificate, instrument or document delivered by the Company at the
Closing.  To the extent that the
foregoing undertaking by the Company may be unenforceable for any reason, the
Company shall make the maximum contribution to the payment and satisfaction of
each of the Indemnified Liabilities which is permissible under Applicable Law.  Except as otherwise set 

 

20

 

forth herein, the
procedures with respect to the rights and obligations under this Section 9.11
shall be the same as those set forth in Section 6 of the Registration Rights
Agreement.

9.12        Payment Set Aside.  To the extent that the Company makes a payment or
payments to Purchaser, or the Purchaser makes a payment or payments to the
Company, hereunder or pursuant to any of the other Transaction Documents or
Purchaser or the Company enforces or exercises its respective rights hereunder
or thereunder, and such payment or payments
or the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set
aside, recovered from, disgorged by or are required to be refunded, repaid or
otherwise restored to the Company or Purchaser, as applicable, a trustee,
receiver or any other person under any Applicable Law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then to the extent of any such restoration the obligation or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.

9.13        Joint Participation in
Drafting.  Each party to this Agreement has
participated in the negotiation and drafting of this Agreement and the other
Transaction Documents.  As such, the
language used herein and therein shall be deemed to be the language chosen by
the parties hereto to express their mutual intent, and no rule of strict
construction will be applied against any party to this Agreement.

9.14        Remedies.  No provision of this Agreement or any
other Transaction Document providing for any remedy to Purchaser shall limit
any other remedy which would otherwise be
available to Purchaser at law, in equity or otherwise.  Nothing in this Agreement
or any other Transaction Document shall limit any rights Purchaser may have
under any applicable federal or state securities laws with respect to the
investment contemplated hereby.

9.15        Knowledge.  As used in this Agreement, the term “knowledge” of any person or entity shall mean and include (i)
actual knowledge and (ii) that knowledge which a reasonably prudent
business person could have obtained in the management of his or her business
affairs after making due inquiry and exercising due diligence which a prudent
business person should have made or exercised, as applicable, with respect thereto.

9.16        Arms-Length Transaction.  Each of the Parties acknowledges and agrees that they
are acting on their own behalf and in the capacity of an arm’s-length purchaser
or seller, as applicable.  Each Party
further acknowledges and agrees that it has independently evaluated the merits
of the transactions contemplated by this Agreement and the other Transaction
Documents, that it has independently determined to enter into the transactions
contemplated hereby and thereby, that it is not relying on any advice from or
evaluation by any other person (other than its representatives), and that it is
not acting in concert with any other person in making its purchase of
securities hereunder or in monitoring its investment in the Company.

9.17        Counterparts.  This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.  Facsimile
signatures shall be as effective as original signatures.

 

21

 

IN WITNESS WHEREOF, the parties hereto have executed
this Exchange Agreement as of the date set forth in the first paragraph hereof.

 

TOWER
GROUP, INC.

By: /s/ Francis M. Colalucci                                             

Name: Francis M. Colalucci

Title:  Senior Vice President &CFO

CASTLEPOINT
MANAGEMENT CORP.

By:       /s/ Joel S. Weiner                        

Name: Joel S. Weiner

Title:  Senior Vice President &CFO

 

 

22

 

Exhibit A

Certificate of Designations

 

 

CERTIFICATE OF DESIGNATIONS

SERIES A-1 PREFERRED STOCK

OF

TOWER GROUP, INC.

____________________________

Pursuant to Section 151 of the General Corporation
Law
 of the State of Delaware

___________________________________

Tower Group, Inc., a Delaware corporation (the “Company”),
in accordance with the provisions of Sections
103 and 151 of the General Corporation Law of the State of Delaware (the
“DGCL”) thereof, does hereby make this Certificate of Designations and
DOES HEREBY CERTIFY:

That the board of directors of the Company (the “Board”)
has the authority, pursuant to the Amended and Restated Certificate of
Incorporation of the Company (the “Certificate of  Incorporation”)
and the DGCL, to adopt resolutions providing for the designations, preferences
and relative, participating, optional and other special rights, and
qualifications, limitations or restrictions of one or more series of preferred
stock, par value $0.01 per share, of the Company (the “Preferred Stock”).

That pursuant to resolutions of
the Board of Directors adopted on January 10, 2007, the  creation of the Series A-1 Preferred Stock, $0.01
par value per share (the  “Series
A-1 Preferred  Stock”),
was authorized and the designations, preferences and relative, participating,
optional and other special rights and qualifications, limitations and
restrictions of such Series A-1 Preferred Stock, in addition to those set forth
in the Certificate of Incorporation and Amended and Restated By-Laws (the “By-Laws”)
of the Company, were fixed as follows:

1.             Designation.

The designation of the Series A-1 Preferred Stock
shall be “Series A-1 Preferred Stock,” and the number of shares constituting
the Series A-1 Preferred Stock shall be 40,000. 
The Series A-1 Preferred Stock shall have a liquidation preference of
$1,000 per share.  The Company may from
time to time, without notice to or the consent of holders of the Series A-1
Preferred Stock, issue additional preferred stock, No such issuance shall
affect the due authorization of any issued and outstanding shares of the Series
A-1 Preferred Stock.

2.             Definitions.

“Board” shall mean the Board of Directors of
the Company or any duly authorized committee of the Board of Directors.

 

 

“Business Day” shall mean a day that is a
Monday, Tuesday, Wednesday, Thursday or Friday
and is not a day on which banking institutions in New York City generally are
authorized or obligated by law or executive order to close.

“Certificate of Designations”
shall mean this Certificate of Designations relating to the Series A-l
Preferred Stock, as amended from time to time.

“Change in Control” shall have the meaning
assigned to such term in Section 6(a).

“Common Stock” shall mean
the common stock, par value $0.01 per share, of the Company.

“Conversion” shall have the meaning set forth
in Section 5(a) hereof.  “Conversion Date” shall have the meaning set forth in Section 5(a) hereof.

“Dividend Payment Date”
shall have the meaning assigned to such teen in Section 3(a)(i).

“Dividend Period” shall have the meaning assigned to such term in Section 3(c).

“Dividend Rate” shall mean 8.66% per annum.

“Dividend Record Date” shall have the meaning
assigned to such term in Section 3(b).

“Issue Date” shall mean the initial date of
delivery of the Series A-1 Preferred Stock.

“Junior Stock” shall mean the Co=on Stock and any other class or series
of shares of the Company that ranks junior to the Series A-I Preferred Stock
either as to the payment of dividends or as
to the distribution of assets upon any liquidation, dissolution or winding up
of the Company.

“Liquidation Preference”
shall have the meaning assigned to such term in Section 8(b).

“Nonpayment” shall have the
meaning assigned to such term in Section 10(b).

“Optional Conversion Shares”
shall have the meaning assigned to such term in Section 5(a).

“Parity Stock” shall mean
any class or series of preferred shares of the Company that ranks equally
with the Series A-1 Preferred Stock in the payment of dividends and in the
distribution of assets on any liquidation, dissolution or winding up of the
Company.

“Person” shall mean any
individual, corporation, partnership, joint venture, trust, limited liability
company or corporation, unincorporated organization or government or any agency
or political subdivision thereof.

“Preferred Stock Director”
shall have the meaning assigned to such term in Section 10(b).

 

2

 

“solvent” shall have the meaning assigned to
such term in Section 3(a).

“Value of Consideration” shall have the
meaning assigned to such term in Section 6(a).

“Voting Preferred Stock” shall mean any other
class or series of preferred stock of the Company ranking equally with the
Series A-l Preferred Stock either as to dividends or the distribution of assets
upon liquidation, dissolution or winding up and upon which voting rights similar to those granted to the holders of the
Series A-1 Preferred Stock have been conferred and are exercisable.

3.             Dividends.

(a)           Dividend
Payment Dates.  The holders of
the Series A-1 Preferred Stock shall be entitled to receive cash 1) dividends
when, as and if declared by the Board or a duly authorized committee of the
Board, out of assets legally available for that purpose and to the extent the
Company is able to pay its debts as they fall due (“solvent”) after giving
effect thereto, at the applicable Dividend Rate set forth below in this Section
3.  Dividends on the Series A-1 Preferred
Stock shall be payable on a non-cumulative basis, quarterly in arrears on the
27th day of March, June, September and December of each year, the Mandatory
Conversion Date (except with respect to shares of Series A-1 Preferred Stock
that have been called for redemption pursuant to Section 4) and, if applicable,
the date of consummation of any Change in Control (each, a “Dividend Payment
Date”), subject to Section 3(e).

(b)           Dividend Record Date. 
Each such dividend shall be paid to the holders of record of
the Series A-1 Preferred Stock as they appear on the share register of the
Company on the applicable record date (each, a “Dividend Record Date”),
which shall be a record date fixed by the
Board that is not more than  60 nor less than 10 days prior to such Dividend
Payment Date or, if no such date is fixed by the Board, shall be 10 days
prior to such Dividend Payment Date.  The
Dividend Record Date shall apply regardless of whether any particular Dividend
Record Date is a Business Day.

(c)           Dividend Period. 
Each dividend period (a “Dividend Period”) shall
commence on and include a Dividend Payment Date and shall run to but excluding
the next Dividend Payment Date, except that the initial Dividend Period will
commence on and include December 27, 2006, and will run to and exclude the
first Dividend Payment Date thereafter.

(d)           Day Count Convention. 
The amount of dividends payable per she of Series A-1 Preferred Stock on each Dividend Payment Date
will be calculated using the per annum Dividend
Rate and on the basis of a 360-day year consisting of twelve 30-day months.

(e)           Business Day Convention.  If any Dividend Payment Date is
not a Business Day, then dividends will be
payable on the first Business Day following such Dividend Payment Date
unless such day is in the next calendar month, in which case dividends shall be
payable on the first Business Day preceding such Dividend Payment Date and
dividends, in each case, shall accrue to the actual payment date.

(f)            Junior Stock.  So
long as any shares of Series A-1 Preferred Stock remain outstanding for any Dividend Period, unless the full dividends for the
current Dividend Period 

 

3

 

on all
outstanding Series A-1 Preferred Stock and Parity
Stock have been declared and paid (or declared and a sum sufficient for
the payment thereof has been set aside): (i) no dividend whatsoever shall be paid or declared during such
Dividend Period on the  Common Stock or other  Junior Stock (other than a dividend payable solely in Common Stock or
other Junior Stock); and  (ii) no
Common Stock or other Junior Stock shall be purchased, redeemed or otherwise
acquired for consideration by the Company, directly or indirectly (other
than as a result of a reclassification of
such Junior Stock for or into other Junior Stock, or the exchange or conversion
of one share of Junior Stock for or into another share of Junior Stock) during
such Dividend Period.

(g)           Pro Rata
Adjustments.  ‘When dividends are not paid in full (or duly provided for) on any
Dividend Payment Date (or, in the case of Parity Stock having dividend payment
dates different from the Dividend Payment Dates, on a dividend payment date
falling within a Dividend Period) upon the Series A-1 Preferred Stock and any
Parity Stock, all dividends declared upon the
Series A-1 Preferred Stock and all such Parity Stock payable on such Dividend
Payment Date (or, in the case of Parity Stock having dividend payment dates
different from the Dividend Payment Dates, on a dividend payment date falling
within the Dividend Period related to such Dividend Payment Date) shall be
declared pro rata so that the
respective amounts of such dividends shall hear the same ratio to each other as
all accrued but unpaid dividends per share of
Series A-1 Preferred Stock and all Parity Stock payable on such Dividend
Payment Date (or, in the case of Parity Stock having dividend payment
dates different from the Dividend Payment Dates, on a dividend payment date
falling within the related Dividend Period) bear to each other.

(h)           Additional Series A-1 Preferred Stock.  In
the event that additional shares of the Series
A-1 Preferred Stock are issued after the original issue date, dividends on such
shares may accrue from the original issue date or any other date
specified by the Company at the time such additional
shares are issued.  These dividends will
accrue, with respect to each Dividend Period, in the manner set forth in
Sections 3(a)(i) and 3(b).

(i)            Non-Cumulative Dividends.  Dividends on Series A-1 Preferred
Stock shall be non-cumulative.  To the extent that any dividends payable on
the Series A-1 Preferred Stock on any Dividend Payment Date are not
declared and paid, in full or otherwise, on such Dividend Payment Date, then
such unpaid dividends shall not cumulate and shall cease to accrue and be
payable and the Company shall have no obligation to pay dividends accrued for
the applicable Dividend Period subsequent to such Dividend Payment Date or to
pay interest with respect to such dividends, whether or not dividends are
declared on Series A-1 Preferred Stock for any subsequent Dividend Period.

4.             Redemption.

(a)           The Company, at its
option, may redeem, in whole at any time or in part from time to time, the
Series A-i Preferred Stock at the time outstanding, upon notice given as
provided in Section 4(c) below, at a redemption price equal to $1,000 per share
of Series A-1 Preferred Stock, together with an amount equal to any dividends
that have been declared but not paid prior to the redemption date (but with no
amount in respect of any dividends that have not been declared prior to such
date).  The redemption price for the
Series A-1 Preferred Stock shall 

 

4

 

be payable on the
redemption date to the holder of such shares against surrender of the
certificate(s) evidencing such shares to the Company or its agent.  If the redemption date occurs subsequent to
the Dividend Record Date for a Dividend Period, any declared but unpaid
dividends payable on such redemption date shall not be paid to the holder
entitled to receive the redemption price on the redemption date, but rather
shall be paid to the holder of record of the redeemed shares on such Dividend
Record Date relating to the Dividend Payment Date as provided in Section 3.

(b)           Notice of redemption
shall be given to the holders of record of the Series A-l Preferred Stock in
accordance with Section 14(a) hereof at least one Business Day before the date
fixed for redemption.  Any notice
delivered as provided m Section 14(a) shall be conclusively presumed to have
been duly given, whether or not the holder receives such notice, but failure to
duly give such notice, or any defect in such notice or in the mailing thereof,
to any holder of Series A-1 Preferred Stock designated for redemption shall not
affect the validity of the proceedings for the redemption of any other Series
A-1 Preferred Stock.  Each such notice
given to a holder shall state: (i) the redemption date; (ii) the number of
shares of Series A-1 Preferred Stock to be redeemed and, if less than all the
shares of the Series A-1 Preferred Stock held by such holder are to be
redeemed, the number of such shares of Series A-I Preferred Stock to be redeemed
from such holder and whether the shares to be redeemed are Optional Conversion
Shares; (iii) the redemption price; and (iv) the place or places where holders
may surrender certificates evidencing the shares of Series A-1 Preferred Stock
for payment of the redemption price.

(c)           If notice of
redemption has been duly given and if on or before the redemption date
specified in the notice all funds necessary for the redemption have been set
aside by the Company for the benefit of the holders of the Series A-1 Preferred
Stock called for the redemption, then on and after the redemption date
dividends shall cease to accrue on such shares of Series A-i Preferred Stock so
called for redemption, all such shares of Series A-1 Preferred Stock so called
for redemption shall no longer be deemed outstanding and all rights with
respect to such shares of Series A-I Preferred Stock shall forthwith on such
redemption date cease and terminate, except only the right of the holders
thereof to receive the amount payable on such redemption, without interest.

(d)           In case of any
redemption of only part of the Series A-1 Preferred Stock at the time
outstanding, the shares to be redeemed shall be selected either pro rata or in
such other manner as the Board may determine to be fair and equitable.  Subject to the provisions hereof, the Board
shall have full power and authority to prescribe the terms and conditions upon
which the Series A-i Preferred Stock shall be redeemed from time to time.  In case fewer than all the shares of Series
A-1 Preferred Stock represented by any certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares without cost to
the holder thereof.

5.             Conversion in Connection with a Public
Offering.

(a)           Unless previously
called for redemption pursuant to Section 4, on the closing date of the Company’s
first underwritten public offering of its common stock after October 31, 2006
(other than offers made to employees, officers or directors of the Company
registered on a Fowl S-8 or offers made to agents of the Company pursuant to
shares registered on a Form S-3 filed 

 

5

 

with the United
States Securities and Exchange Commission (the “SEC”)) (the “Conversion Date”),
30,000 shares of Series A-1 Preferred Stock will automatically convert (the “Conversion”)
into a number of shares of Common Stock per share of Series A-1 Preferred Stock
equal to the liquidation preference amount of a share of Series A-1 Preferred
Stock divided by the offering price of the Common Stock in such offering or
private placement (the “Conversion Price”). 
The remaining 10,000 shares of Series A-1 Preferred Stock (the- “Optional
Conversion Shares”) shall be convertible on the Conversion Date at the election
of the holders of the shares of the Series A-1 Preferred Stock.  Such Optional Conversion Shares shall be
converted into a number of shares of Common Stock per Optional Conversion Share
based on the Conversion Price as defined above. 
Notice of such election shall be delivered to the Company in accordance
with the provisions of Section 14(a) not later than the date on which the
preliminary prospectus pertaining to the underwritten public offering is filed
with the SEC.

(b)           The holders of the
Series A-1 Preferred Stock to be converted on the Conversion Date shall have
the right to receive, in addition to the number of shares of Common Stock
specified in Section 5(a), an amount in cash equal to any dividends that have
been declared but not paid prior to the Conversion Date (but with no amount in
respect of any dividends that have not been declared prior to such date), such
amount to be paid at the time of the Conversion, to the extent that the Company
has sufficient lawful funds to pay such amount at such time.  If the Conversion Date occurs subsequent to
the Dividend Record Date for a Dividend Period, any declared but unpaid
dividends payable on the Conversion Date shall not be paid to the holder
entitled to receive the redemption price on the Mandatory Conversion Date, but
rather shall be paid to the holder of record of the redeemed shares on such
Dividend Record Date relating to the Dividend Payment Date as provided in
Section 3.

(c)           To the extent that
the Company does not have sufficient lawful funds to pay in cash the amount
equal to all of such dividends that have been declared but not paid prior to
the Conversion Date, the holders of Series A-1 Preferred Stock to be converted
on the Conversion Date shall be entitled to receive, upon conversion of such
Series A-1 Preferred Stock on the Conversion Date, an additional number of
shares of Common Stock per share of Series A-1 Preferred Stock equal to the
amount of such dividends that have been declared but not paid prior to the
Conversion Date in cash divided by the Conversion Price.  Any resulting fractional shares of Common
Stock shall be settled in cash as provided below, subject to the availability
of sufficient lawful funds to make such settlement.

(d)           From and after the
Conversion Date, all shares of Series A-1 Preferred Stock that have been
converted on such Conversion Date shall no longer be deemed outstanding and all
rights with respect to such shares of Series A-1 Preferred Stock shall
forthwith cease and terminate, except only the right of the holders thereof to
receive the Common Stock and any cash due and owing on conversion of the Series
A-I Preferred Stock, without interest.

(e)           No fractional shares
of Common Stock will be issued to holders of Series A-1 Preferred Stock as a
result of any Conversion of shares of Series A-1 Preferred Stock pursuant to
this Section 5.  In lieu of any
fractional share of Common Stock otherwise issuable in respect of any
Conversion pursuant to this Section 5, the Company shall pay an amount in cash
(computed to the nearest cent) equal to the same fraction of the Conversion
Price.

 

6

 

(f)            Notwithstanding
this Section 5, if the Conversion shall result in the issuance of shares of
common stock of the Company that would require the vote of the stockholders of
the outstanding shares of common stock pursuant to the listing rules of the
Nasdaq Global Select Market, the number of shares of Series A-1 Preferred Stock
to be initially converted into Common Stock shall be limited to a number that
would not require such a vote and the remaining shares of Series A-1 Preferred
Stock shall not be converted until the required stockholder vote is obtained.

(g)           The issuance of
certificates for shares of Common Stock on Conversion of the Series A-1
Preferred Stock pursuant to this Section 5 shall be made without charge to the
holder of the Series A-1 Preferred Stock for any documentary stamp or similar
taxes that may be payable in respect of the issue or delivery of such
certificate, provided that the Company shall not be required to pay any tax
that may be payable in respect of any transfer involved in the issuance and
delivery of any such certificate upon conversion in a name other than that of
the holder of such shares of Series A-1 Preferred Stock so converted and the
Company shall not be required to issue or deliver such certificates unless or
until the person or persons requesting the issuance thereof shall have paid to
the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.

6.             Conversion Upon Change in Control.

(a)           Immediately prior to
the consummation of any Change in Control (as defined below) that is
consummated at a time when CastlePoint Holdings, Ltd.  or one of its subsidiaries holds any shares
of Series A-1 Preferred Stock, each share of Series A-i Preferred Stock held by
CastlePoint Holdings, Ltd.  or one of its
subsidiaries shall be converted into a number of shares of Common Stock equal
to the liquidation preference amount of a share of Series A-1 Preferred Stock,
determined in accordance with Section 8(a), divided by the Value of the
Consideration (as defined below) per share of Common Stock in such Change in.  Control. 
A “Change in Control” means (i) any merger or consolidation of the
Company with and into another company, other than a merger or consolidation in
which (x) the Company is the surviving entity and (y) the holders of the
Company’s Common Stock immediately prior to the consummation of such merger or
consolidation own more than 50% of the voting equity interests of the surviving
entity immediately after the consummation of such merger or consolidation; (ii)
any transaction by which any person or group of persons (within the meaning of
Rule 13d-5 under the Securities Exchange Act of 1934, as amended, or any
successor or replacement rule) acquires beneficial ownership (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended, or any
successor or replacement rule) of securities of the Company representing more
than 50% of the voting power of the Company holder of at the time of such
Change in Control.  The “Value of
Consideration” means the value of any consideration paid per share of Common
Stock or value of the consideration into which a share of Common Stock is
converted in a Change in Control transaction or, if such Change in Control
Value does not involve a merger or consolidation of the Company or the
acquisition of shares of Common Stock, the equivalent value placed upon a share
of Common Stock in such transaction; provided, that (i) in the case of any
publicly traded securities payable per share of Common Stock or into which a
share of Common Stock shall be converted, the value of such securities shall be
the last price at which such securities are traded on a public market
immediately prior to the closing of the Change in Control and (ii) in the case
of any securities that are not publicly traded or any other property 

 

7

 

payable per share
of Common Stock or into which a share of Common Stock shall be converted, the
value of such securities shall be fixed in good faith by the Board.

(b)           The holders of the
Series A-1 Preferred Stock to be converted in connection with a Change in
Control shall have the right to receive, in addition to the number of shares of
Common Stock specified in Section 6(a), an amount in cash equal to any
dividends that have been declared but not paid prior to the consummation of
such Change in Control (but with no amount in respect of any dividends that
have not been declared prior to such date), such amount to be paid at the time
of the consummation of such Change in Control, to the extent that the Company
has sufficient lawful funds to pay such amount at such time.  If the consummation of such Change in Control
occurs subsequent to the Dividend Record Date for a Dividend Period, any
declared but unpaid dividends payable upon the consummation of such Change in
Control shall not be paid to the holder entitled to receive the redemption
price on the date of the consummation of such Change in Control, but rather
shall be paid to the holder of record of the redeemed shares on such Dividend
Record Date relating to the Dividend Payment Date as provided in Section 3.

(c)           To the extent that
the Company does not have sufficient lawful funds to pay in cash the amount
equal to all of such dividends that have been declared but not paid prior to
the consummation of a Change in Control, the holders of Series A-1 Preferred
Stock to be converted in connection with a Change in Control shall be entitled
to receive, upon conversion of such Series A-1 Preferred Stock upon the
consummation of such Change in Control, an additional number of shares of
Common Stock per share of Series A-1 Preferred Stock equal to the amount of
such dividends that have been declared but not paid prior to the consummation
of such Change in Control in cash divided by the Value of Consideration.  Any resulting fractional shares of Common
Stock shall be settled in cash as provided below, subject to the availability
of sufficient lawful funds to make such settlement.

(d)           From and after the
consummation of a Change in Control, all shares of Series A-l Preferred Stock
that have been converted in connection with such Change in Control shall no
longer be deemed outstanding and all rights with respect to such shares of
Series A-1 Preferred Stock shall forthwith cease and terminate, except only the
right of the holders thereof to receive the Common Stock and any cash due and
owing on conversion of the Series A-1 Preferred Stock, without interest.

(e)           No fractional shares
of Common Stock will be issued to holders of Series A-1 Preferred Stock as a
result of any conversion of shares of Series A-1 Preferred Stock pursuant to
this Section 6.  In lieu of any
fractional share of Coon Stock otherwise issuable in respect of any conversion
pursuant to this Section 6, the Company shall pay an amount in cash (computed
to the nearest cent) equal to the same fraction of the Value of Conversion.

(f)            The issuance of
certificates for shares of Common Stock on conversion of the Series A-1
Preferred Stock pursuant to this Section 6 shall be made without charge to the
holder of the Series A-1 Preferred Stock for any documentary stamp or similar
taxes that may be payable in respect of the issue or delivery of such
certificate, provided that the Company shall not be required to pay any tax
that may be payable in respect of any transfer involved in the issuance and
delivery of any such certificate upon conversion in a name other than that of
the 

 

8

 

holder of such
shares of Series A-1 Preferred Stock so converted and the Company shall not be required
to issue or deliver such certificates unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.

7.         Conversion Upon Regulatory Change.

If both (a) and (b) below occur:

(a)           after the date of
the issuance of the Series A-1 Preferred Stock, the criteria used by A.M.  Best Company, Inc.  for determining whether and to what extent a
security qualifies as permanent equity capital shall change such that the
Series A-1 Preferred Stock no longer qualifies for treatment as favorable as
the treatment afforded to the Series A-1 Preferred Stock on its date of
issuance, and

(b)           the Company
affirmatively elects to qualify the Series A-1 Preferred Stock for treatment as
permanent equity capital by A.M.  Best
Company, Inc.  without any sublimit or
other quantitative restriction on the inclusion of the Series A-1 Preferred
Stock in permanent equity capital (other than any limitation the Company elects
to accept and any limitation requiring that common equity or a specified form
of common equity constitute the dominant form of permanent equity capital)
under such criteria,

then, upon such affirmative election, the Series A-1 Preferred Stock
shall be convertible at the Company’s option into a new series of preferred
stock having terms and provisions substantially identical to those of the
Series A-1 Preferred Stock, except that such new series may have such additional
or modified rights, preferences, privileges and voting powers, and limitations
and restrictions thereof, as are necessary in the judgment of the Board (after
consultation with legal counsel of recognized standing) to comply with the
Required Equity Capital Provisions (as defined below), provided that the
Company will not cause any such conversion unless the Board determines that the
rights, preferences, privileges and voting powers, and the qualifications,
limitations and restrictions thereof, of such new series of preferred stock,
taken as a whole, are not materially less favorable to the holders thereof than
the rights, preferences, privileges and voting powers, and the qualifications,
limitations and restrictions thereof, of the Series A-1 Preferred Stock, taken
as a whole.

As used above, the term “Required Equity Capital Provisions” means such
terms and provisions as are, in the judgment of the Company (after consultation
with legal counsel of recognized standing), required for preferred stock to
qualify for equity capital treatment by A.M. 
Best Company, Inc.  that is as
favorable as the treatment afforded to the Series A-1 Preferred Stock on its
date of issuance, without any sublimit or other quantitative restriction on the
inclusion of such preferred stock in permanent equity capital (other than any
limitation the Company elects to accept and any limitation requiring that
common equity or a specified form of common equity constitute the dominant form
of permanent equity capital) pursuant to the applicable criteria used by A.M.  Best Company, Inc.

 

9

 

8.             Liquidation Rights.

(a)           Upon the voluntary
or involuntary dissolution, liquidation or winding up of the Company, the
holders of the Series A-1 Preferred Stock shall be entitled to receive and to
be paid out of the assets of the Company available for distribution to its
stockholders, before any payment or distribution shall be made on the Common
Stock or on any other Junior Stock the liquidation preference of $1,000 per
share of Series A-1 Preferred Stock, plus any declared and unpaid dividends for
the then-current Dividend Period, without accumulation of any undeclared
dividends.

(b)           If in any
distribution described in Section 5(a) above the assets of the Company or
proceeds thereof are not sufficient to pay the Liquidation Preferences (as
defined below) in full to all holders of the Series A-1 Preferred Stock and all
holders of any Parity Stock, the amounts paid to the holders of the Series A-1
Preferred Stock and to the holders of all such other Parity Stock shall be paid
pro rata in accordance with the respective aggregate Liquidation Preferences of
the holders of the Series A-1 Preferred Stock and the holders of Al such other
Parity Stock.  In any such distribution,
the “Liquidation Preference” of any holder of Series A-1 Preferred Stock
or Parity Stock shall mean the amount otherwise payable to such holder in such
distribution, including any declared but unpaid dividends (and, in the case of
any holder of shares other than Series A-1 Preferred Stock and on which
dividends accrue on a cumulative basis, an amount equal to any unpaid, accrued
cumulative dividends, whether or not declared, as applicable).

(c)           If the Liquidation
Preference has been paid in full to all holders of the Series A-1 Preferred
Stock, the holders of other shares of the Company shall be entitled to receive
all remaining assets of the Company according to their respective rights and
preferences and the holders of the Series A-1 Preferred Stock as such shall
have no right or claim to any of the remaining assets of the Company.

(d)           Neither the sale,
lease, exchange, transfer or conveyance of all or substantially all of the
assets of the Company for cash, securities or other property, nor the merger or
consolidation of the Company into or with any other corporation or the merger
or consolidation of any other corporation into or with the Company, shall be
deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this Section 8.

9.             Ranking.

The Series A-1 Preferred Stock
shall rank, with respect to the payment of dividends and distributions
prior to or upon the liquidation, dissolution or winding up of the Company:

(i)            senior
to all Common Stock outstanding and other Junior Stock, and each other series
of Junior Stock that the Company may later issue;

(ii)           equally
with Parity Stock and each other series of Parity Stock that the Company may
later issue; and

(iii)          junior
to any series of senior shares that the Company may later issue, subject to
compliance with Section 11(b).

 

10

 

10.          Voting and Certain Other Rights.

(a)           Except as set forth
herein or required by applicable law, holders of Series A-1 Preferred Stock
shall have no voting rights.

(b)           Whenever dividends
on any Series A-1 Preferred Stock shall have not been declared and paid for the
equivalent of six or more dividend payments, whether or not for consecutive
Dividend Periods (a “Nonpayment”), the holders of such Series A-1 Preferred
Stock, voting together as a single class with holders of any and all other
series of Voting Preferred Stock then outstanding, will be entitled to vote for
the election of a total of one additional member to the Board (the “Preferred
Stock Director”), provided that the election of any such director shall not
cause the Company to violate the corporate governance requirement of the Nasdaq
Global Select Market (or any other exchange on which the securities of the
Company may be listed) that listed companies must have a majority of
independent directors.  The Preferred
Stock Director shall be elected by simple majority at a special meeting called
at the request of the holders of record of at least 20% of the shares of Series
A-1 Preferred Stock or of any other series of Voting Preferred Stock then
outstanding (unless such request for a special meeting is received less than 90
days before the date fixed for the next annual meeting or special meeting of
the stockholders of the Company, in which event such election shall be held
only at such next annual or special meeting of stockholders), and at each
subsequent annual meeting of stockholders of the Company.  For this purpose, the Board shall reserve one
vacant place on the Board of the Company to accommodate such election and pass
such resolutions as are necessary to give effect to such election.

(c)           If the holders of
the Series A-1 Preferred Stock become entitled to elect a director to the
Board, the Company shall promptly give notice to all holders and take all
action necessary, including calling a meeting or circulating a consent to
permit the nomination and election of such director.  Applicable provisions of the Company’s
Certificate of Incorporation shall be applicable to the holders of Series A-1
Preferred Stock and any other Voting Preferred Stock as a class, provided that
any written consents approved by the holders of record of a majority of the
Series A-1 Preferred Stock and any other Voting Preferred Stock outstanding
shall be effective and shall bind all holders of Series A-1 Preferred Stock.  If and when dividends for at least four
Dividend Periods, whether or not consecutive, following a Nonpayment have been
paid in full (or declared and a sum.  sufficient
for such payment has been set aside), then the right of the holders of the
Series A-1 Preferred Stock to elect the Preferred Stock Director shall cease
(but subject to revesting of such voting rights in the event of any future
Nonpayment pursuant to this Section 10) and the number of Dividend Periods in
which dividends have not been declared and paid shall be reset to zero and, if
and when any rights of holders of the Series A-1 Preferred Stock to elect the
Preferred Stock Director shall have ceased, the terms of office of the
Preferred Stock Director shall terminate forthwith and the number of directors
constituting the Board shall automatically be reduced by one.

(d)           The Preferred Stock
Director may be removed at any time without cause by the holders of record of a
majority of the outstanding Series A-1 Preferred Stock and any other shares of
Voting Preferred Stock, when they have the voting rights described above
(voting together as a single class).  So
long as a Nonpayment shall continue, any vacancy in the office of the Preferred
Stock Director (other than prior to the initial election of a Preferred Stock
Director 

 

11

 

after a
Nonpayment) may be filled by a vote of the holders of record of a majority of
the shares of Series A-1 Preferred Stock outstanding and any other Voting
Preferred Stock then outstanding (voting together as a single class), when they
have the voting rights described above.  The
Preferred Stock Director shall be entitled to one vote on any matter.

(e)           Holders of the
Series A-1 Preferred Stock shall be entitled to vote on matters as described in
Section 11.

11.          Modification.

(a)           With the Consent of
Holders.  Except as provided below in
this Section 11(a), this Certificate of Designations may be amended, modified
or supplemented, and noncompliance in any particular instance with any provision
of this Certificate of Designations or the Series A-1 Preferred Stock may be
waived, in each case with the written consent or affirmative vote of the
holders of at least two-thirds of the shares of Series A-1 Preferred Stock at
the time outstanding, including any modification occurring in connection with
any merger or consolidation of the Company or otherwise.

Subject to Sections 6 and 7, without the written
consent or the affirmative vote or consent of the holders of at least
two-thirds of the outstanding shares of Series A-1 Preferred Stock, given in
person or by proxy, either in writing or at a meeting, an amendment or waiver
under this Section 11(a) may not:

(i)            amend,
alter or repeal the provisions of the Company’s Certificate of in corporation,
By-Laws or this Certificate of Designations so as to materially and adversely
affect the special rights, preferences, privileges and voting powers of the
Series A-1 Preferred Stock, taken as a whole; or

(ii)           consummate
a binding share exchange or reclassification involving the Series A-1 Preferred
Stock or a merger or consolidation of the Company with another entity, unless
in each case the Series A-1 Preferred Stock (x) remains outstanding or (y) in
the case of any such merger or consolidation with respect to which the Company
is not the surviving or resulting entity, is converted into or exchanged for
preference securities of the surviving or resulting entity or its ultimate
parent having such rights, preferences, privileges and voting powers, taken as
a whole, as are not materially Is favorable to the holders thereof than the
rights, preferences, privileges and voting powers of the Series A­1 Preferred
Stock, taken as a whole;

provided, however, that for all purposes of this Section 11(a), any
increase in the amount of the authorized or issued Series A-1 Preferred Stock,
or the creation and issuance, or an increase in the authorized or issued
amount, of any other series of preferred stock ranking equally with and/or
junior to the Series A-1 Preferred Stock with respect to the payment of dividends
(whether such dividends are cumulative or non-cumulative) and/or the
distribution of assets upon liquidation, dissolution or winding up of the
Company will not be deemed to adversely affect the special rights, preferences,
privileges or voting powers of the Series A-1 Preferred Stock.

 

12

 

(b)           Changes after
Provision for Redemption.  No vote or
consent of the holders of the Series A-1 Preferred Stock shall be required pursuant
to Sections 10(b) and 11(a) above if, at or prior to the time when any such
vote or consent would otherwise be required pursuant to such Section, all
outstanding Series A-1 Preferred Stock shall have been redeemed, or called for
redemption upon proper notice and sufficient funds shall have been set aside by
the Company for the benefit of holders of such Series A-1 Preferred Stock
called for redemption, in each case pursuant to Section 4 above.

12.          Currency of Payments.

Any cash payments with respect to the Series A-1
Preferred Stock shall be paid in United States dollars in immediately available
funds.

13.          No Preemptive Rights.

No holder of Series A-1 Preferred Stock shall have
any preemptive right as to any additional issue of shares of capital stock of
the Company, or to any security convertible, exercisable or exchangeable into
such shares.

14.          Miscellaneous.

(a)           Notices.  Any and all notices or other communications
or deliveries to be provided by the holders hereunder shall be in writing and
delivered personally, by facsimile, sent by a nationally recognized overnight
courier service, addressed to the Company, at 120 Broadway, 31st Floor, New
York, New York 10271, facsimile number (646) 514-8612, Attn: General Counsel,
or such other address or facsimile number as the Company may specify for such
purposes by notice to the holders delivered in accordance with this Section.  Any and all notices or other communications
or deliveries to be provided by the Company hereunder shall be in writing and
delivered personally, by facsimile, sent by a nationally recognized overnight
courier service addressed to each holder of record of the Series A-1 Preferred
Stock at the facsimile telephone number or address of such holder of record at
their respective last addresses or facsimile telephone number appearing on the
share register of the Company, or if no such facsimile telephone number or
address appears, at the principal place of business of the holder.  Any notice or other communication or
deliveries hereunder shall be deemed given and effective on the earliest of (i)
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in this Section prior to
5:30 p.m.  (New York City time), (ii) the
date after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile telephone number specified in this
Section later than 5:30 p.m.  (New York
City time) on any date and earlier than 11:59 p.m.  (New York City time) on such date, (iii) the
second Business Day following the date of mailing, if sent by nationally
recognized overnight courier service, or (iv) upon actual receipt by the party
to whom such notice is required to be given.

(b)           Lost or
Mutilated Preferred Stock Certificate.  If a holder’s Series A-1 Preferred Stock
certificate shall be mutilated, lost, stolen or destroyed, the Company shall
execute and deliver, in exchange and substitution for and upon cancellation of
a mutilated certificate, or in lieu of or in substitution for a lost, stolen or
destroyed certificate, a new certificate for the shares 

 

13

 

of Series A-1
Preferred Stock so mutilated, lost, stolen or destroyed but only upon receipt
of evidence of such loss, theft or destruction of such certificate, and of the
ownership hereof, and indemnity, if requested, all reasonably satisfactory to
the Company.

(c)           Waiver.  Any waiver by the Company or the holder of a
breach of any provision of this Certificate of Designations shall not operate
as or be construed to be a waiver of any other breach of such provision or of
any breach of any other provision of this Certificate of Designations.  The failure of the Company or the holder to
insist upon strict adherence to any term of this Certificate of Designations on
one or more occasions shall not be considered a waiver or deprive that party of
the right thereafter to insist upon strict adherence to that term or any other
term of this Certificate of Designations. 
Any waiver must be in writing.

(d)           Status of
Converted or Redeemed Preferred Stock.  In case any shares of Series A-1 Preferred
Stock shall be converted, redeemed or reacquired by the Company, such shares
shall resume the status of authorized but unissued shares of preferred stock
and shall no longer be designated as Series A-1 Preferred Stock.

(e)           Other Rights.  Except as provided in Sections 5, 6 and 7,
the Series A-1 Preferred Stock will not be convertible into, or exchangeable
for, any other class or series of securities of the Company, and holders of the
Series A-1 Preferred Stock will have no subscription rights to acquire
additional shares of the Company.  Holders
of the Series A-1 Preferred Stock shall have no right to require the redemption
or repurchase of the Series A-1 Preferred Stock.

[Signature
appears on subsequent page.]

 

14

 

IN WITNESS WHEREOF, the parties hereto have executed
this Exchange Agreement as of the date set forth ix1 the first paragraph
hereof.

TOWER
GROUP, INC.

By:  /s/ Steven G. Fauth__ 

Corporate SecretaryExhibit 10.1

 

$600,000,000

 

 

REVOLVING CREDIT AGREEMENT

 

 

Dated as of February 22,
2007

 

Among

 

BUILDING MATERIALS CORPORATION OF
AMERICA,

 

BMCA ACQUISITION INC.,

 

and

 

BMCA ACQUISITION SUB INC.,

 

as  Borrowers,

 

and

 

THE INITIAL
LENDERS, INITIAL ISSUING BANK AND

SWING LINE BANK NAMED HEREIN,

 

as  Initial  Lenders,
Initial  Issuing  Bank  and  Swing  Line  Bank,

 

and

 

DEUTSCHE BANK
AG NEW YORK BRANCH,

 

as  Collateral
Monitoring  Agent  and  Administrative  Agent,

 

and

 

DEUTSCHE BANK
SECURITIES INC.,

 

BEAR STEARNS & CO. INC.,

 

and

 

J.P. MORGAN SECURITIES INC.,

 

as  Joint
Lead  Arrangers  and  Joint  Book  Managers,

 

and

 

BEAR STEARNS & CO. INC.,

 

as  Syndication
Agent,

 

and

 

J.P. MORGAN SECURITIES INC.

 

as  Documentation
Agent

 

 

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

  

 

i

 

	
  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

  

 

ii

 

	
  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

  	
   

  
						

 

iii

 

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 

 

2

 

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

 

	
  Availability

  	
   

  	
  Eurodollar Rate:

  	
   

  	
  Base Rate:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less than or
  equal to $200 million

  	
   

  	
  1.75

  	
  %

  	
  0.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  $200 million and less than or equal to $300 million

  	
   

  	
  1.50

  	
  %

  	
  0.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  $300 million

  	
   

  	
  1.25

  	
  %

  	
  0.25

  	
  %

  

 

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).

 

3

 

“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) 1⁄2 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 

 

4

 

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.

 

5

 

“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 

 

6

 

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.

 

7

 

“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 

 

8

 

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 

 

9

 

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.

 

10

 

“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.

 

11

 

“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 

 

12

 

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;

 

13

 

(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;

 

14

 

(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

 

15

 

(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.

 

16

 

“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 

 

17

 

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.

 

18

 

“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.

 

19

 

“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, 

 

20

 

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.

 

21

 

“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.

 

22

 

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

 

“Inventory” has the
meaning specified in the Security Agreement.

 

“Investment” in any
Person means any loan or advance to such Person, any purchase or other
acquisition of any Equity Interests or Debt or the assets comprising a division
or business unit or a substantial part or all of the business of such Person,
any capital contribution to such Person or any other direct or indirect
investment in such Person, including any acquisition by way of a merger or
consolidation (or similar transaction) and any arrangement pursuant to which
the investor incurs Debt of the types referred to in clause (h) or (i) of
the definition of “Debt”
in respect of such Person.

 

“Issuing Bank” means
the Initial Issuing Bank and each Lender or an Affiliate of a Lender reasonably
acceptable to the Administrative Agent and BMCA that agrees to be bound by the
terms hereof applicable to the Initial Issuing Bank.

 

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

 

“L/C Collateral Account”
has the meaning specified in the Security Agreement.

 

“L/C Disbursement”
shall mean a payment or disbursement made by the Issuing Bank pursuant to a
Letter of Credit.

 

“L/C Related Documents”
has the meaning specified in Section 2.04(d)(ii).

 

“Lender Party” means
any Lender, the Issuing Bank or the Swing Line Bank.

 

“Lenders” means the
Initial Lenders and each Person that shall become a Lender hereunder pursuant
to Section 8.07 for so long as such Initial Lender or Person, as the case
may be, shall be a party to this Agreement.

 

“Letters of Credit”
has the meaning specified in Section 2.01(c).

 

“Letter of Credit Advance”
means an L/C Disbursement or an advance made by the Issuing Bank or any Lender
pursuant to Section 2.03(c) or (d), respectively.

 

“Letter of Credit Agreement”
has the meaning specified in Section 2.03(a).

 

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

 

23

 

“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 

 

24

 

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 

 

25

 

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).

 

26

 

“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).

 

27

 

“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.

 

28

 

“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.

 

29

 

“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.

 

30

 

“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.

 

31

 

“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.

 

32

 

“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).

 

33

 

“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.

 

34

 

“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.

 

35

 

“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 

 

36

 

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 

 

37

 

(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 

 

38

 

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 

 

39

 

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. 

 

40

 

(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 

 

41

 

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.

 

42

 

(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.

 

43

 

(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.

 

44

 

(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 

 

45

 

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 

 

46

 

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:

 

	
  Utilization:

  	
   

  	
  Rate:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than or equal to 50%.

  	
   

  	
  0.250

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than or equal to 25% and less than
  50%.

  	
   

  	
  0.300

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than 25%.

  	
   

  	
  0.375

  	
  %

  

 

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.

 

47

 

(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 issuing or maintaining or participating in Letters of Credit (excluding,
for purposes of this Section 2.10, any such increased costs resulting from
(x) Taxes or Other Taxes (as to which Section 2.12 shall govern) and
(y) changes in the basis of taxation of overall net income or overall
gross income by the United States or by the foreign jurisdiction or state under
the laws of which such Lender Party is organized or has its Applicable Lending
Office or any political 

 

48

 

subdivision thereof), then the Borrowers shall from
time to time, upon demand by such Lender Party (with a copy of such demand to
the Administrative Agent), pay to the Administrative Agent for the account of
such Lender Party additional amounts sufficient to compensate such Lender Party
for such increased cost; provided, however, that the Borrower shall not be responsible for
costs under this Section 2.10(a) arising more than 120 days prior to
receipt by the Borrower of the demand from the affected Lender Party pursuant
to this Section 2.10(a); provided
further that a Lender Party claiming additional amounts under this
Section 2.10(a) agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a different
Applicable Lending Office if the making of such a designation would avoid the
need for, or reduce the amount of, such increased cost that may thereafter
accrue and would not, in the reasonable judgment of such Lender Party, be
otherwise disadvantageous to such Lender Party. A certificate as to the amount
of such increased cost, submitted to the Borrower by such Lender Party, shall
be conclusive and binding for all purposes, absent manifest error.

 

(b)           If,
due to either (i) the introduction of or any change in or in the
interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
amount of capital required or expected to be maintained by any Lender Party or
any corporation controlling such Lender Party as a result of or based upon the
existence of such Lender Party’s commitment to lend or to issue or participate in
Letters of Credit hereunder and other commitments of such type or the issuance
or maintenance of or participation in the Letters of Credit (or similar
contingent obligations), then, upon demand by such Lender Party or such
corporation (with a copy of such demand to the Administrative Agent), the
Borrowers, jointly and severally, agree to pay to the Administrative Agent for
the account of such Lender Party, from time to time as specified by such Lender
Party, additional amounts sufficient to compensate such Lender Party in the
light of such circumstances, to the extent that such Lender Party reasonably
determines such increase in capital to be allocable to the existence of such
Lender Party’s commitment to lend or to issue or participate in Letters of Credit
hereunder or to the issuance or maintenance of or participation in any Letters
of Credit; provided, however,  that the Borrowers shall not be
responsible for costs under this Section 2.10(b) arising more than 180
days prior to receipt by the Borrowers of the demand from the affected Lender
Party pursuant to this Section 2.10(b). A certificate as to such amounts
submitted to the Borrowers by such Lender Party shall be conclusive and binding
for all purposes, absent manifest error.

 

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

 

49

 

(d)           Notwithstanding
any other provision of this Agreement, if the introduction of or any change in
or in the interpretation of any law or regulation shall make it unlawful, or
any central bank or other Governmental Authority shall assert that it is unlawful,
for any Lender or its Eurodollar Lending Office to perform its obligations
hereunder to make Eurodollar Rate Advances or to continue to fund or maintain
Eurodollar Rate Advances hereunder, then, on notice thereof and demand therefor
by such Lender to the Borrowers through the Administrative Agent, (i) each
Eurodollar Rate Advance will automatically, upon such demand, Convert into a
Base Rate Advance and (ii) the obligation of the Lenders to make, or to
Convert Advances into, Eurodollar Rate Advances shall be suspended until the
Administrative Agent shall notify the Borrowers that such Lender has determined
that the circumstances causing such suspension no longer exist; provided, however, that,
before making any such demand, such Lender agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
designate a different Eurodollar Lending Office if the making of such a
designation would allow such Lender or its Eurodollar Lending Office to
continue to perform its obligations to make Eurodollar Rate Advances or to
continue to fund or maintain Eurodollar Rate Advances and would not, in the
judgment of such Lender, be otherwise disadvantageous to such Lender.

 

(e)           In
the event that any Lender Party demands payment of costs or additional amounts
pursuant to Section 2.10 or Section 2.12 or asserts, pursuant to
Section 2.10(d), that it is unlawful for such Lender Party to make
Eurodollar Rate Advances or becomes a Defaulting Lender then (subject to such
Lender Party’s right to rescind such demand or assertion within 10 days after
the notice from the Borrowers referred to below) the Borrowers may, upon 20
days’ prior written notice to such Lender Party and the Administrative Agent,
elect to cause such Lender Party to assign its Advances and Commitments in full
to one or more Persons selected by the Borrowers so long as (a) each such
Person satisfies the criteria of an Eligible Assignee and is reasonably
satisfactory to the Administrative Agent, (b) such Lender Party receives
payment in full in cash of the outstanding principal amount of all Advances
made by it and all accrued and unpaid interest thereon and all other amounts
due and payable to such Lender Party as of the date of such assignment
(including amounts owing pursuant to Sections 2.10, 2.12, 2.15 and 8.04) and
(c) each such Lender Party assignee agrees to accept such assignment and to
assume all obligations of such Lender Party assignor hereunder in accordance
with Section 8.07.

 

                SECTION 2.11.      Payments and Computations. (a)  The Borrowers, jointly and severally, agree
to make each payment hereunder and under the Notes, irrespective of any right
of counterclaim or set-off (except as otherwise provided in Section 2.15),
not later than 12:30 P.M. (New York City time) on the day when due in
U.S. dollars to the Administrative Agent at the Administrative Agent’s Account
in same day funds, with payments being received by the Administrative Agent
after such time being deemed to have been received on the next succeeding Business
Day. The Administrative Agent will promptly thereafter cause like funds to be
distributed (i) if such payment by the Borrowers is in respect of
principal, interest, commitment fees or any other Obligation then payable
hereunder and under the Notes to more than one Lender Party, to such Lender
Parties for the account of their respective Applicable Lending Offices ratably
in accordance with the amounts of such respective Obligations then payable to
such Lender Parties and (ii) if such payment by the Borrowers is in
respect of any Obligation then payable hereunder to one Lender Party, to such
Lender Party for the account of its Applicable Lending Office, in each case to
be applied in accordance with the terms of this Agreement. Upon its acceptance
of an Assignment and Acceptance and recording of the information contained
therein in the 

 

50

 

Register pursuant to Section 8.07(d), from and
after the effective date of such Assignment and Acceptance, the Administrative
Agent shall make all payments hereunder and under the Notes in respect of the
interest assigned thereby to the Lender Party assignee thereunder, and the
parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves.

 

(b)           The
Borrowers hereby authorize each Lender Party and each of its Affiliates, if and
to the extent payment owed to such Lender Party is not made when due hereunder
or, in the case of a Lender, under the Note held by such Lender, to charge from
time to time, to the fullest extent permitted by law, against any or all of the
Borrowers’ accounts with such Lender Party or such Affiliate any amount so due.

 

(c)           All
computations of interest, fees and Letter of Credit commissions determined by
the Eurodollar Rate shall be made by the Administrative Agent on the basis of a
year of 360 days, and all computations of interest determined by the Base Rate
shall be made by the Administrative Agent on the basis of a year of 365/366
days, as the case may be, and in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period
for which such interest, fees or commissions are payable. Each determination by
the Administrative Agent of an interest rate, fee or commission hereunder shall
be conclusive and binding for all purposes, absent manifest error.

 

(d)           Whenever
any payment hereunder or under the Notes shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest or commitment or letter of credit fee or
commission, as the case may be; provided, however,
that, if such extension would cause payment of interest on or principal of
Eurodollar Rate Advances to be made in the next following calendar month, such
payment shall be made on the next preceding Business Day. All repayments of Advances
shall be applied first to repay such Advances that are Base Rate Advances and
then to repay such Advances that are Eurodollar Rate Advances.

 

(e)           Unless the Administrative Agent shall
have received notice from the Borrowers prior to the date on which any payment
is due to any Lender Party hereunder that the Borrowers will not make such
payment in full, the Administrative Agent may assume that the Borrowers have
made such payment in full to the Administrative Agent on such date and the
Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each such Lender Party on such due date an amount equal to the
amount then due such Lender Party. If and to the extent the Borrowers shall not
have so made such payment in full to the Administrative Agent, each such Lender
Party shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Lender Party together with interest thereon, for each day
from the date such amount is distributed to such Lender Party until the date
such Lender Party repays such amount to the Administrative Agent, at the
Federal Funds Rate.

 

(f)            Whenever
any payment received by the Administrative Agent under this Agreement or any of
the other Loan Documents is insufficient to pay in full all amounts due and
payable to the Agents and the Lender Parties under or in respect of this
Agreement and the other 

 

51

 

Loan Documents on any date, such payment
shall be distributed by the Administrative Agent and applied by the Agents and
the Lender Parties in the following order of priority:

 

(i)            first, to the payment of all of the fees,
indemnification payments, costs and expenses that are due and payable to the
Agents (solely in their respective capacities as Agents) under or in respect of
this Agreement and the other Loan Documents on such date, ratably based upon
the respective aggregate amounts of all such fees, indemnification payments,
costs and expenses owing to the Agents on such date;

 

(ii)           second, to the payment of all of the fees, indemnification
payments, costs and expenses that are due and payable to the Issuing Bank and
the Swing Line Bank (solely in their respective capacities as such) under or in
respect of this Agreement and the other Loan Documents on such date, ratably
based upon the respective aggregate amounts of all such fees, indemnification
payments, costs and expenses owing to the Issuing Bank and the Swing Line Bank
on such date;

 

(iii)          third, to the payment of all of the indemnification
payments, costs and expenses that are due and payable to the Lenders under
Sections 8.04 hereof and any similar section of any of the other Loan
Documents on such date, ratably based upon the respective aggregate amounts of
all such indemnification payments, costs and expenses owing to the Lenders on
such date;

 

(iv)          fourth, to the payment of all of the amounts that are due
and payable to the Administrative Agent and the Lender Parties under Sections
2.10 and 2.12 hereof on such date, ratably based upon the respective aggregate
amounts thereof owing to the Administrative Agent and the Lender Parties on
such date;

 

(v)           fifth,
to the payment of all of the fees that are due and payable to the Lenders under
Section 2.08 on such date, ratably based upon the respective aggregate
Commitments of the Lenders under the Facilities on such date;

 

(vi)          sixth, to the payment of all of the accrued and unpaid
interest on the Obligations of the Borrowers under or in respect of the Loan
Documents that is due and payable to the Administrative Agent and the Lender
Parties under Section 2.07 on such date, ratably based upon the respective
aggregate amounts of all such interest owing to the Administrative Agent and
the Lender Parties on such date;

 

(vii)         seventh, to the payment of all of the accrued and unpaid
interest on the Advances that is due and payable to the Administrative Agent
and the Lender Parties under Section 2.07 on such date, ratably based upon
the respective aggregate amounts of all such interest owing to the
Administrative Agent and the Lender Parties on such date;

 

(viii)        eighth, to the payment of the principal amount of all of the
outstanding Advances that is due and payable to the Administrative Agent and
the Lender Parties on such date, ratably based upon the respective aggregate
amounts of all such principal and Obligations owing to the Administrative Agent
and the Lender Parties on such date;

 

52

 

(ix)           ninth, to the payment of any and all
Obligations in respect of any Cash Management Services owing to DBNY, any
Lender or any of their respective Affiliates; and

 

(x)            tenth, to the payment of all other Obligations, including
under the Secured Hedge Agreements, of the Loan Parties owing under or in
respect of the Loan Documents or are secured pursuant to the Collateral
Documents that are due and payable to the Administrative Agent and the other
Secured Parties on such date, ratably based upon the respective aggregate
amounts of all such Obligations owing to the Administrative Agent and the other
Secured Parties on such date.

 

                SECTION 2.12.      Taxes. (a) 
Any and all payments by any Loan Party to or for the account of any
Lender Party or any Agent hereunder or under the Notes or any other Loan
Document shall be made, in accordance with Section 2.11 or the applicable
provisions of such other Loan Document, if any, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Lender Party and each Agent,
taxes that are imposed on its overall net income by the United States and taxes
that are imposed on its overall net income (and franchise taxes imposed in lieu
thereof) by the state or foreign jurisdiction under the laws of which such
Lender Party or such Agent, as the case may be, is organized or any political
subdivision thereof and, in the case of each Lender Party, taxes that are
imposed on its overall net income (and franchise taxes imposed in lieu thereof)
by the state or foreign jurisdiction of such Lender Party’s Applicable Lending
Office or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities in respect
of payments hereunder or under the Notes being hereinafter referred to as “Taxes”). If any Loan Party shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note or any other Loan Document to any Lender Party or
any Agent, (i) the sum payable by the Borrowers shall be increased as may
be necessary so that after such Loan Party and the Administrative Agent have
made all required deductions (including deductions applicable to additional
sums payable under this Section 2.12) such Lender Party or such Agent, as
the case may be, receives an amount equal to the sum it would have received had
no such deductions been made, (ii) such Loan Party shall make all such
deductions and (iii) such Loan Party shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with
applicable law.

 

(b)           In
addition, a Loan Party shall pay any present or future stamp, documentary,
excise, property, intangible, mortgage recording or similar taxes, charges or
levies that arise from any payment made by such Loan Party hereunder or under
any Notes or any other Loan Documents or from the execution, delivery or
registration of, performance under, or otherwise with respect to, this Agreement,
the Notes or the other Loan Documents (hereinafter referred to as “Other Taxes”).

 

(c)           The
Loan Parties shall indemnify each Lender Party and each Agent for and hold them
harmless against the full amount of Taxes and Other Taxes, and for the full
amount of taxes of any kind imposed or asserted by any jurisdiction on amounts
payable under this Section 2.12, imposed on or paid by such Lender Party
or such Agent (as the case may be) and any liability (including penalties,
additions to tax, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be made within 30 days from the date such 

 

53

 

Lender Party or such Agent (as the case may
be) makes written demand setting forth in reasonable detail its claim and the
basis for indemnification hereunder.

 

(d)           Within
30 days after the date of any payment of Taxes, the appropriate Loan Party
shall furnish to the Administrative Agent, at its address referred to in
Section 8.02, the original or a certified copy of a receipt evidencing
such payment, to the extent such a receipt is issued therefor, or other written
proof of payment thereof that is reasonably satisfactory to the Administrative
Agent. In the case of any payment hereunder or under the Notes or the other
Loan Documents by or on behalf of a Loan Party through an account or branch
outside the United States or by a payor that is not a United States person, if
such Loan Party determines that no Taxes are payable in respect thereof, such
Loan Party shall furnish, or shall cause such payor to furnish, to the
Administrative Agent, at such address, an opinion of counsel acceptable to the
Administrative Agent stating that such payment is exempt from Taxes.

 

(e)           Each
Lender Party organized under the laws of a jurisdiction outside the United
States shall, on or prior to the date of its execution and delivery of this
Agreement in the case of each Initial Lender Party and on the date of the
Assignment and Acceptance pursuant to which it becomes a Lender Party in the
case of each other Lender Party, and from time to time thereafter as reasonably
requested in writing by the Borrowers (but only so long thereafter as such
Lender Party remains lawfully able to do so), provide each of the Administrative
Agent and the Borrowers with two original Internal Revenue Service Forms W-8BEN
or W-8ECI (or in the case of a Lender Party that has certified in writing to
the Administrative Agent that it is not (i) a “bank” (as defined in
Section 881(c)(3)(A) of the Internal Revenue Code), (ii) a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Internal
Revenue Code) of the Borrowers or (iii) a controlled foreign corporation
related to the Borrowers (within the meaning of Section 864(d)(4) of the
Internal Revenue Code), Internal Revenue Service Form W-8BEN), as
appropriate, or any successor or other form prescribed by the Internal Revenue
Service, certifying that such Lender Party is exempt from or entitled to a
reduced rate of United States withholding tax on payments pursuant to this
Agreement or the Notes or any other Loan Document or, in the case of a Lender
Party that has certified that it is not a “bank” as described above, certifying
that such Lender Party is a foreign corporation, partnership, estate or trust
entitled to exemption from withholding as portfolio interest under
Section 871(h) or 881(c) of the Internal Revenue Code. If the forms
provided by a Lender Party at the time such Lender Party first becomes a party
to this Agreement indicate a United States interest withholding tax rate in
excess of zero, withholding tax at such rate shall be considered excluded from
Taxes unless and until such Lender Party provides the appropriate forms
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods governed by such
forms; provided, however, that if, at the effective date of
the Assignment and Acceptance pursuant to which a Lender Party becomes a party
to this Agreement, the Lender Party assignor was entitled to payments under
subsection (a) of this Section 2.12 in respect of United States
withholding tax with respect to interest paid at such date, then, to such
extent, the term Taxes shall include (in addition to withholding taxes that may
be imposed in the future or other amounts otherwise includable in Taxes) United
States withholding tax, if any, applicable with respect to the Lender Party
assignee on such date. If any form or document referred to in this subsection (e)
requires the disclosure of information, other than information necessary to
compute the tax payable and information required on the date hereof by Internal
Revenue Service Form W-8BEN or W-8EC1 or the related certificate described
above, 

 

54

 

that the applicable Lender Party reasonably
considers to be confidential, such Lender Party shall give notice thereof to
the Borrowers and shall not be obligated to include in such form or document
such confidential information. For purposes of subsections (d) and (e) of this
Section 2.12, the terms “United States” and “United States
person”
shall have the meanings specified in Section 7701 of the Internal Revenue
Code.

 

(f)            For
any period with respect to which a Lender Party has failed to provide the
Borrowers with the appropriate form, certificate or other document described in
subsection (e) above (other than
if such failure is due to a change in law, or in the interpretation or
application thereof, occurring after the date on which a form, certificate or
other document originally was required to be provided or if such form,
certificate or other document otherwise is not required under
subsection (e) above), such Lender Party shall not be entitled to indemnification
under subsection (a) or (c) of this Section 2.12 with respect to
Taxes imposed by the United States by reason of such failure; provided,
however, that should a Lender Party become subject to Taxes because
of its failure to deliver a form, certificate or other document required
hereunder, the Loan Parties shall take such steps as such Lender Party shall
reasonably request to assist such Lender Party to recover such Taxes.

 

(g)           Without
prejudice to the survival of any other agreement contained herein, the
agreements and obligations contained in this Section 2.12 shall survive
the payment in full of the principal and of interest on all Borrowings and
Advances made hereunder.

 

(h)           Notwithstanding
anything to the contrary in this Section 2.12, any Lender Party claiming
any additional amounts payable pursuant to this Section 2.12 shall use its
reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to change the jurisdiction of its Applicable Lending
Office if the making of such a change would avoid the need for, or reduce the
amount of, any such additional amounts that would be payable or may thereafter
accrue and would not, in the sole determination of such Lender, be otherwise
disadvantageous to such Lender Party.

 

(i)            If
BMCA determines in good faith that substantial authority exists for
successfully contesting any Taxes paid or otherwise indemnified against under
Section 2.12(c), and so long as the Borrowers, jointly and severally, agree in
writing to indemnify the relevant Lender, the Administrative Agent or any other
Agent against any damages or costs in connection with such contest, the
relevant Lender, the Administrative Agent or any other Agent, as applicable,
shall cooperate with the Borrowers in challenging such Taxes at the Borrowers’
expense, if so requested by the Borrowers, unless the relevant Lender, the
Administrative Agent or other Agent, as the case may be, determines in its
discretion that it would be adversely affected by such contest. If any Lender,
the Administrative Agent or any other Agent, as applicable, receives a refund
of a Tax previously paid by the Borrowers or otherwise indemnified against
under Section 2.12(c), which refund in the good faith judgment of such Lender,
the Administrative Agent or such other Agent, as the case may be, is
attributable to such payment made by the Borrowers, then the Lender, the
Administrative Agent or other Agent, as the case may be, shall reimburse the
Borrowers for such amount (together with any interest received thereon) as the
Lender, the Administrative Agent or other Agent, as the case may be, determines
to be the proportion of the refund as will leave it, after such reimbursement,
in no better or worse position (taking into account expenses or any Taxes imposed
on the refund) than it would have 

 

55

 

been in if the payment had not been required,
provided, however, that any such
reimbursement shall be made only after such refund has been finally determined
and cannot be adjusted and the Borrowers shall return such refund to such
Lender or Agent if erroneously made or otherwise changed. At the expense of the
Borrowers, the Lender, an Administrative Agent or other Agent shall claim any
refund involving a Tax against which it is indemnified by the Borrowers that
such Lender or Agent determines is available to it, unless such Lender or Agent
concludes in its discretion that it would be adversely affected by making such
a claim. The agreements in this clause (i) shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.

 

                SECTION 2.13.      Sharing of Payments, Etc. If any Lender
Party shall obtain at any time any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise, other than as a
result of an assignment pursuant to Section 8.07) (a) on account of
Obligations due and payable to such Lender Party hereunder and under the other
Loan Documents at such time in excess of its ratable share (according to the
proportion of (i) the amount of such Obligations due and payable to such
Lender Party at such time to (ii) the aggregate amount of the Obligations
due and payable to all Lender Parties hereunder and under the other Loan Documents
at such time) of payments on account of the Obligations due and payable to all
Lender Parties hereunder and under the Notes at such time obtained by all the
Lender Parties at such time or (b) on account of Obligations owing (but
not due and payable) to such Lender Party hereunder and under the other Loan
Documents at such time in excess of its ratable share (according to the
proportion of (i) the amount of such Obligations owing to such Lender
Party at such time to (ii) the aggregate amount of the Obligations owing
(but not due and payable) to all Lender Parties hereunder and under the Notes and
the other Loan Documents at such time) of payments on account of the
Obligations owing (but not due and payable) to all Lender Parties hereunder and
under the other Loan Documents at such time obtained by all of the Lender
Parties at such time, such Lender Party shall forthwith purchase from the other
Lender Parties such interests or participating interests in the Obligations due
and payable or owing to them, as the case may be, as shall be necessary to
cause such purchasing Lender Party to share the excess payment ratably with
each of them; provided, however,
that if all or any portion of such excess payment is thereafter recovered from
such purchasing Lender Party, such purchase from each other Lender Party shall
be rescinded and such other Lender Party shall repay to the purchasing Lender
Party the purchase price to the extent of such Lender Party’s ratable share
(according to the proportion of (i) the purchase price paid to such Lender
Party to (ii) the aggregate purchase price paid to all Lender Parties) of
such recovery together with an amount equal to such Lender Party’s ratable
share (according to the proportion of (i) the amount of such other Lender
Party’s required repayment to (ii) the total amount so recovered from the
purchasing Lender Party) of any interest or other amount paid or payable by the
purchasing Lender Party in respect of the total amount so recovered. The
Borrowers agree that any Lender Party so purchasing an interest or
participating interest from another Lender Party pursuant to this
Section 2.13 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such interest
or participating interest, as the case may be, as fully as if such Lender Party
were the direct creditor of the Borrowers in the amount of such interest or
participating interest, as the case may be.

 

                SECTION 2.14.      Use of Proceeds. The proceeds of the Advances
and issuances of Letters of Credit shall be available to provide financing for
working capital, capital expenditures and other general corporate purposes,
including to pay amounts owing to effect the Tender Offer or the Merger or 

 

56

 

the refinancing of the indebtedness of BMCA or Elk or
to pay any fees and expenses occurred in connection with the Transaction.

 

                SECTION 2.15.      Defaulting Lenders. (a)  In the
event that, at any one time, (i) any Lender Party shall be a Defaulting
Lender, (ii) such Defaulting Lender shall owe a Defaulted Advance to the
Borrowers and (iii) the Borrowers shall be required to make any payment
hereunder or under any other Loan Document to or for the account of such
Defaulting Lender, then the Borrowers may, so long as no Default shall occur or
be continuing at such time and to the fullest extent permitted by applicable
law, set off and otherwise apply the Obligation of the Borrowers to make such
payment to or for the account of such Defaulting Lender against the obligation
of such Defaulting Lender to make such Defaulted Advance. In the event that, on
any date, the Borrowers shall so set off and otherwise apply its obligation to
make any such payment against the obligation of such Defaulting Lender to make
any such Defaulted Advance on or prior to such date, the amount so set off and
otherwise applied by the Borrowers shall constitute for all purposes of this
Agreement and the other Loan Documents an Advance by such Defaulting Lender
made on the date of such setoff under the Facility pursuant to which such
Defaulted Advance was originally required to have been made pursuant to
Section 2.01. Such Advance shall be considered, for all purposes of this
Agreement, to comprise part of the Borrowing in connection with which such
Defaulted Advance was originally required to have been made pursuant to
Section 2.01, even if the other Advances comprising such Borrowing shall
be Eurodollar Rate Advances on the date such Advance is deemed to be made
pursuant to this subsection (a). The Borrowers shall notify the
Administrative Agent at any time the Borrowers exercise their right of set-off
pursuant to this subsection (a) and shall set forth in such notice
(A) the name of the Defaulting Lender and the Defaulted Advance required
to be made by such Defaulting Lender and (B) the amount set off and
otherwise applied in respect of such Defaulted Advance pursuant to this
subsection (a). Any portion of such payment otherwise required to be made
by the Borrowers to or for the account of such Defaulting Lender which is paid
by the Borrowers, after giving effect to the amount set off and otherwise
applied by the Borrowers pursuant to this subsection (a), shall be applied
by the Administrative Agent as specified in subsection (b) or (c) of this
Section 2.15.

 

(b)           In
the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted
Amount to any Agent or any of the other Lender Parties and (iii) the
Borrowers shall make any payment hereunder or under any other Loan Document to
the Administrative Agent for the account of such Defaulting Lender, then the
Administrative Agent may, on its behalf or on behalf of such other Agents or
such other Lender Parties and to the fullest extent permitted by applicable
law, apply at such time the amount so paid by the Borrowers to or for the
account of such Defaulting Lender to the payment of each such Defaulted Amount
to the extent required to pay such Defaulted Amount. In the event that the
Administrative Agent shall so apply any such amount to the payment of any such
Defaulted Amount on any date, the amount so applied by the Administrative Agent
shall constitute for all purposes of this Agreement and the other Loan
Documents payment, to such extent, of such Defaulted Amount on such date. Any
such amount so applied by the Administrative Agent shall be retained by the
Administrative Agent or distributed by the Administrative Agent to such other
Agents or such other Lender Parties, ratably in accordance with the respective
portions of such Defaulted Amounts payable at such time to the Administrative
Agent, such other Agents and such other Lender Parties and, if the amount of

 

57

 

such payment made by the Borrowers shall at
such time be insufficient to pay all Defaulted Amounts owing at such time to
the Administrative Agent, such other Agents and such other Lender Parties, in
the following order of priority:

 

(i)            first, to the Agents for any Defaulted
Amounts then owing to them, in their capacities as such, ratably in accordance
with such respective Defaulted Amounts then owing to the Agents;

 

(ii)           second, to the Issuing Bank and the Swing
Line Bank for any Defaulted Amounts then owing to them, respectively in their
capacities as such, ratably in accordance with such respective Defaulted
Amounts then owing to the Issuing Bank and the Swing Line Bank; and

 

(iii)          third, to any other Lender Parties for any
Defaulted Amounts then owing to such other Lender Parties, ratably in
accordance with such respective Defaulted Amounts then owing to such other
Lender Parties.

 

Any portion of such amount paid by the Borrowers for
the account of such Defaulting Lender remaining, after giving effect to the
amount applied by the Administrative Agent pursuant to this
subsection (b), shall be applied by the Administrative Agent as specified
in subsection (c) of this Section 2.15.

 

(c)           In
the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted
Advance or a Defaulted Amount and (iii) the Borrowers, any Agent or any
other Lender Party shall be required to pay or distribute any amount hereunder
or under any other Loan Document to or for the account of such Defaulting
Lender, then the Borrowers or such Agent or such other Lender Party shall pay
such amount to the Administrative Agent to be held by the Administrative Agent,
to the fullest extent permitted by applicable law, in escrow or the
Administrative Agent shall, to the fullest extent permitted by applicable law,
hold in escrow such amount otherwise held by it. Any funds held by the
Administrative Agent in escrow under this subsection (c) shall be
deposited by the Administrative Agent in an account with a bank (the “Escrow Bank”) selected by the
Administrative Agent, in the name and under the control of the Administrative
Agent, but subject to the provisions of this subsection (c). The terms
applicable to such account, including the rate of interest payable with respect
to the credit balance of such account from time to time, shall be the Escrow
Bank’s standard terms applicable to escrow accounts maintained with it. Any
interest credited to such account from time to time shall be held by the
Administrative Agent in escrow under, and applied by the Administrative Agent
from time to time in accordance with the provisions of, this
subsection (c). The Administrative Agent shall, to the fullest extent
permitted by applicable law, apply all funds so held in escrow from time to
time to the extent necessary to make any Advances required to be made by such
Defaulting Lender and to pay any amount payable by such Defaulting Lender
hereunder and under the other Loan Documents to the Administrative Agent or any
other Lender Party, as and when such Advances or amounts are required to be
made or paid and, if the amount so held in escrow shall at any time be
insufficient to make and pay all such Advances and amounts required to be made
or paid at such time, in the following order of priority:

 

58

 

(i)            first, to the Agents for any amounts then
due and payable by such Defaulting Lender to them hereunder, in their
capacities as such, ratably in accordance with such respective amounts then due
and payable to the Agents;

 

(ii)           second, to the Issuing Bank and the Swing
Line Bank for any amounts then due and payable to them hereunder, in their
capacities as such, by such Defaulting Lender, ratably in accordance with such
respective amounts then due and payable to the Issuing Bank and the Swing Line
Bank;

 

(iii)          third,  to
any other Lender Parties for any amount then due and payable by such Defaulting
Lender to such other Lender Parties hereunder, ratably in accordance with such
respective amounts then due and payable to such other Lender Parties; and

 

(iv)          fourth, to the Borrowers for any Advance
then required to be made by such Defaulting Lender pursuant to a Commitment of
such Defaulting Lender.

 

In the event that any Lender Party that is a
Defaulting Lender shall, at any time, cease to be a Defaulting Lender, any
funds held by the Administrative Agent in escrow at such time with respect to
such Lender Party shall be distributed by the Administrative Agent to such
Lender Party and applied by such Lender Party to the Obligations owing to such
Lender Party at such time under this Agreement and the other Loan Documents
ratably in accordance with the respective amounts of such Obligations
outstanding at such time.

 

(d)           The
rights and remedies against a Defaulting Lender under this Section 2.15
are in addition to other rights and remedies that the Borrowers may have
against such Defaulting Lender with respect to any Defaulted Advance and that
any Agent or any Lender Party may have against such Defaulting Lender with
respect to any Defaulted Amount.

 

                SECTION 2.16.      Evidence of Debt. (a)  Each Lender Party shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrowers to such Lender resulting from each Advance owing
to such Lender Party from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder. The
Borrowers agree that upon notice by any Lender Party to the Borrowers (with a
copy of such notice to the Administrative Agent) to the effect that a
promissory note or other evidence of indebtedness is required or appropriate in
order for such Lender Party to evidence (whether for purposes of pledge,
enforcement or otherwise) the Advances owing to, or to be made by, such Lender
Party, the Borrowers shall promptly execute and deliver to such Lender Party,
with a copy to the Administrative Agent, a Note, in substantially the form of
Exhibit A hereto, payable to the order of such Lender Party in a principal
amount equal to the Revolving Credit Commitment of such Lender Party. All
references to Notes in the Loan Documents shall mean Notes, if any, to the
extent issued hereunder.

 

(b)           The
Register maintained by the Administrative Agent pursuant to Section 8.07(d)
shall include a control account, and a subsidiary account for each Lender
Party, in which accounts (taken together) shall be recorded (i) the date
and amount of each Borrowing made hereunder, the Type of Advances comprising
such Borrowing and, if appropriate, the Interest Period applicable thereto,
(ii) the terms of each Assignment and Acceptance delivered to 

 

59

 

and accepted by it, (iii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrowers to each Lender Party hereunder, and (iv) the amount of any sum
received by the Administrative Agent from the Borrowers hereunder and each
Lender Party’s share thereof.

 

(c)           Entries
made in good faith by the Administrative Agent in the Register pursuant to
subsection (b) above, and by each Lender Party in its account or accounts
pursuant to subsection (a) above, shall be prima facie evidence of the amount of principal and interest
due and payable or to become due and payable from the Borrowers to, in the case
of the Register, each Lender Party and, in the case of such account or
accounts, such Lender Party, under this Agreement, absent manifest error; provided, however,
that the failure of the Administrative Agent or such Lender Party to make an
entry, or any finding that an entry is incorrect, in the Register or such
account or accounts shall not limit or otherwise affect the obligations of the
Borrowers under this Agreement.

 

SECTION 2.17. Increase in Revolving Credit
Commitments

 

(a)           Incremental
Commitments. Provided there exists no Default or Event of Default, the
Borrowers may from time to time, in accordance with this Section 2.17, elect to
increase the Revolving Credit Commitments by a written notice to the
Administrative Agent (each, an “Incremental
Revolving Credit Commitment Notice”), which Incremental
Revolving Credit Commitment Notice shall be promptly notified by the
Administrative Agent to the Lenders, by an amount (when aggregated with all
such Incremental Revolving Credit Commitments and all Incremental Term Loan
Borrowings under the Term Loan Facility (or any similar provision in any
successor agreement) not exceeding $350,000,000) (each such increase, an “Incremental Revolving Credit Commitment”)
; provided that any such increase shall be
in a minimum amount of $25,000,000. Such Incremental Revolving Credit
Commitment Notice shall specify the time period (to be determined by the
Borrowers upon consultation with the Administrative Agent, but in no event to
be less than ten Business Days from the date of delivery of such Incremental
Revolving Credit Commitment Notice to the Administrative Agent) within which
each Lender is required to inform the Borrowers and the Administrative Agent whether
such Lender desires to participate in such Incremental Revolving Credit
Commitment.

 

(b)           Lender
Elections to Increase. Each Lender shall notify the Borrowers and the
Administrative Agent within the prescribed time period whether or not it desires
(in its sole discretion) to participate in such Incremental Revolving Credit
Commitment and increase its Revolving Credit Commitment in connection therewith
and, if so, shall specify the amount of the additional Revolving Credit Commitment
of such Incremental Revolving Credit Commitment requested to be allocated to it.
Any Lender not responding within such time period shall be deemed to have
declined to participate in such Incremental Revolving Credit Commitment.

 

(c)           Notification by Administrative
Agent; Additional Lenders. The Administrative Agent shall notify the
Borrowers and each Lender of the Lenders’ responses to each Incremental
Revolving Credit Commitment Notice. To obtain commitments in an aggregate
amount equal to the Incremental Revolving Credit Commitment subject to each
Incremental Revolving Credit Commitment Notice, and subject to the approval of
the Administrative Agent and the Issuing Bank (which approvals shall not be
unreasonably withheld 

 

60

 

or
delayed), the Borrowers may obtain the commitments of additional Eligible
Assignees to become Lenders under this Agreement pursuant to a joinder
agreement in form and substance reasonably satisfactory to the Administrative
Agent.

 

(d)           Effective Date and Allocations.
If the Revolving Credit Commitments are increased in accordance with this
Section, the Administrative Agent and the Borrowers shall determine the effective
date (the “Revolving Credit Increase Effective Date”) and
the final allocation of the applicable Incremental Revolving Credit Commitment.
The Administrative Agent shall promptly notify the Borrowers and the Lenders of
the final allocation of such increase and the Revolving Credit Increase
Effective Date.

 

(e)           Conditions to Effectiveness of
Increase. As a condition precedent to each Incremental Revolving Credit
Commitment, (i) in respect of Incremental Revolving Credit Commitments up
to an aggregate of $100,000,000, BMCA shall coincidentally with the
effectiveness of such Incremental Revolving Credit Commitments prepay advances
under the Term Loan Facility in an amount equal to such Incremental Revolving
Credit Commitments (but not in excess of $100,000,000) and (ii) the
Borrowers shall deliver to the Administrative Agent a certificate of each Loan
Party dated as of the Revolving Credit Increase Effective Date signed by a
Responsible Officer of such Loan Party (A) certifying and attaching the
resolutions adopted by such Loan Party approving or consenting to such Incremental
Revolving Credit Commitment, and (B) in the case of the Borrowers, certifying
that, before and after giving effect to such Incremental Revolving Credit
Commitment, (1) the representations and warranties contained in Article IV and
the other Loan Documents are true and correct on and as of the relevant Revolving
Credit Increase Effective Date, except to the extent that such representations
and warranties specifically refer to an earlier date, in which case they are
true and correct as of such earlier date, and except that for purposes of this
Section 2.17(b), the representations and warranties contained in subsection (i)
of Section 4.01(g) shall be deemed to refer to the most recent statements furnished
pursuant to clause (b) of Section 5.03, (2) no Default or Event of Default
exists or would exist after giving effect to such Incremental Revolving Credit
Commitment and the application of any proceeds thereof, and (3) all accrued
fees and expenses of the Agents and the Lender Parties participating in such
Incremental Revolving Credit Commitment in connection with such Incremental Revolving
Credit Commitment (including the reasonable accrued fees and expenses of
counsel to the Administrative Agent as set forth in an invoice to be provided
to the Borrowers from the Administrative Agent) have been paid. The Borrowers
shall prepay any Revolving Credit Loans outstanding on the Revolving Credit
Increase Effective Date (and pay any additional amounts required pursuant to Section
2.10) to the extent necessary to keep the outstanding Revolving Credit Advances
ratable with any revised Pro Rata Shares in respect of Revolving Credit
Commitments arising from any nonratable increase in the Revolving Credit
Commitments under this Section.

 

SECTION 2.18.
Relationship Among the Borrowers.

 

(a)           Administrative
Borrower. BMCA Acquisition and BMCA Acquisition Sub hereby appoint BMCA,
and BMCA shall act under this Agreement, as the agent, attorney-in-fact and
legal representative of BMCA Acquisition and BMCA Acquisition Sub for all
purposes, including requesting Advances, issuing Notices of Borrowing or taking
any other action under the Loan Documents and receiving account statements and
other notices and 

 

61

 

communications to the Borrowers (or any of
them) from any Agent or any Lender. Any Agent and the Lenders may rely, and
shall be fully protected in relying, on any Notice of Borrowing, disbursement
instruction, report, information or any other notice or communication made or
given by BMCA, whether in its own name, as Borrowers’ agent, on behalf of BMCA
Acquisition and BMCA Acquisition Sub or on behalf of the Borrowers, and neither
any Agent nor any Lender shall have any obligation to make any inquiry or
request any confirmation from or on behalf of any other Borrower as to the
binding effect on it of any such notice, request, instruction, report,
information, other notice or communications, nor shall the joint and several
character of the Borrowers’ obligations hereunder be affected.

 

(b)           Joint
and Several Obligations. The obligations of the Borrowers pursuant to the
Loan Documents shall be joint and several as provided in the Guaranty. The
Borrowers shall be jointly and severally liable for the payment and performance
of all obligations and covenants required by this Agreement to be performed by
any of them, including BMCA acting as agent hereunder, and each Borrower shall
be bound by any notices (including notices of Borrowings, conversions and
continuations), consents or other actions furnished or taken by such Borrower
or any other Borrower hereunder.

 

(c)           Resignation.
BMCA may resign at any time by notifying the Administrative Agent, provided that such resignation shall not become effective
until the earlier of (i) the appointment by the Borrowers of another Borrower
as successor agent hereunder, and acceptance by such Borrower of such
appointment and (ii) the date that is 30 days after delivery of notice by BMCA
of its resignation. At any time that there is no Borrower acting as agent
hereunder or under any of the Loan Documents, all rights and obligations of the
Borrowers, including the delivery of such notices, requests, certificates,
statements and other documents, permitted to be exercised or performed by
Borrower as such agent on behalf of the Borrowers shall be performed by the
Borrowers in respect of the Loan Documents.

 

ARTICLE III

CONDITIONS OF LENDING AND

ISSUANCES OF LETTERS OF CREDIT

 

                SECTION 3.01.      Conditions Precedent to Effectiveness of Revolving
Credit Agreement. This Agreement shall become effective on and as of the date (the
“Closing Date”) on which each of the
following conditions precedent shall have been satisfied:

 

(a)           The Administrative Agent
shall have received on or before the Closing Date the following, each dated as
of such day (unless otherwise specified), in form and substance reasonably
satisfactory to the Administrative Agent and (except for the Notes) in
sufficient copies for each Lender Party:

 

(i)            counterparts of this Agreement
executed by each of the parties hereto;

 

(ii)           the Notes payable to the order of the
Lenders to the extent requested by the Lenders pursuant to the terms of
Section 2.16;

 

62

 

(iii)          a guaranty in substantially the form
of Exhibit J hereto (the “Guaranty”)
duly executed by BMCA and each domestic Subsidiary of BMCA;

 

(iv)          a security agreement in substantially
the form of Exhibit I hereto (the “Security
Agreement”), duly executed by the Collateral Monitoring Agent
and each Loan Party, together with:

 

(A)          copies of financing statements in form
appropriate for filing under the Uniform Commercial Code of all jurisdictions
that the Administrative Agent may deem necessary in order to perfect and
protect the first priority liens and security interests created under the
Security Agreement, covering the Collateral described in the Security
Agreement,

 

(B)           except as provided in Section
5.01(k)(iii), evidence that all other action that the Administrative Agent may
reasonably deem necessary in order to perfect and protect the first-priority
liens and security interests created under the Security Agreement has been or
will be taken (including receipt of duly executed payoff letter and UCC-3
termination statements in form appropriate for filing);

 

(v)           copies of reports in respect of
completed Lien searches (as of a recent date reasonably satisfactory to the
Administrative Agent), listing all effective financing statements that name any
Loan Party as debtor filed in any jurisdiction relevant to the perfection of
the Liens created under the Security Agreement in the Collateral described
therein and owned by such Loan Party;

 

(vi)          certified copies of the resolutions of
the Board of Directors or Board of Managers, as applicable, of each Loan Party
approving this Agreement and each Loan Document to which it is or is to be a
party, and copies of all documents evidencing other necessary corporate or
limited liability company action and governmental and other third party
approvals and consents, if any, with respect to the Transaction and each Loan
Document to which it is or is to be a party;

 

(vii)         a copy of a certificate of the
Secretary of State of the jurisdiction of organization of each Loan Party,
dated reasonably near the Closing Date, certifying (A) as to a true and
correct copy of the charter or other constituent document of such Loan Party
and each amendment thereto on file in such Secretary’s office and (B) that
(1) such amendments are the only amendments to such Loan Party’s charter
or other constituent document on file in such Secretary’s office, (2) such
Loan Party has paid all franchise taxes to the date of such certificate and
(3) such Loan Party is duly organized and in good standing or presently
subsisting under the laws of the State of the jurisdiction of its organization;

 

(viii)        a certificate of each Loan Party, signed
on behalf of such Loan Party by its Secretary or any Assistant Secretary, dated
as of the Closing Date (the 

 

63

 

statements made in which
certificate shall be true on and as of the Closing Date), certifying as to
(A) the absence of any amendments to the relevant certificate of
incorporation or other constituent document as certified by the Secretary of
State’s certificate referred to in Section 3.01(a)(vii) since the date of
such Secretary of State’s certificate, (B) a true and correct copy of the
bylaws, if any, of such Loan Party as in effect on the date on which the
resolutions referred to in Section 3.01(a)(vi) were adopted and on the
Closing Date, and (C) the due incorporation and good standing or valid
existence of such Loan Party as a corporation organized under the laws of the
jurisdiction of its incorporation, and the absence of any proceeding for the
dissolution or liquidation of such Loan Party;

 

(ix)           a certificate of each Loan Party,
signed on behalf of such Loan Party by its President or other Responsible
Officer acceptable to the Administrative Agent, dated as of the Closing Date
(the statements made in which certificate shall be true on and as of the
Closing Date), certifying as to the absence of any event occurring and
continuing, or resulting from the Closing Date, that constitutes a Default;

 

(x)            a certificate of the Secretary or an
Assistant Secretary of each Loan Party certifying the names and true signatures
of the officers of such Loan Party authorized to sign each Loan Document to
which it is or is to be a party and the other documents to be delivered
hereunder and thereunder;

 

(xi)           copy of the Merger Agreement, duly
executed by the parties thereto and, together with all agreements, instruments
and other documents delivered in connection therewith as the Administrative
Agent shall request, certified as being true, complete and correct by an
officer of BMCA;

 

(xii)          a certificate, in substantially the
form of Exhibit D, attesting to the Solvency of BMCA and its subsidiaries,
taken as a whole, before and after giving effect to the transactions
contemplated hereunder (and assuming that neither BMCA nor any of its Subsidiaries
is subject to asbestos-related liabilities), from the Chief Financial Officer
of BMCA;

 

(xiii)         evidence of insurance maintained by BMCA
and its respective subsidiaries as required under the Loan Documents, and the Collateral
Monitoring Agent shall be named as an additional insured and loss payee under
all insurance polices to be maintained with respect to properties constituting
Collateral;

 

(xiv)        a Borrowing Base Certificate
satisfactory to the Administrative Agent, updated as of a date not earlier than
January 28, 2007;

 

(xv)         evidence that not less than
$245,000,000 in aggregate principal amount of the 2007 Notes and the 2008 Notes
shall have been validly tendered, 

 

64

 

and not withdrawn, and
that holders thereof provided their consent to, and in accordance with the
requirements of, the tender offer and consent solicitation dated December 20,
2006, and that such notes have been accepted for payment by BMCA pursuant to
the respective supplemental indenture to the Existing Indentures and prior to
or coincidentally with the Closing Date, such notes will be repaid;

 

(xvi)        a favorable opinion of Weil, Gotshal
& Manges LLP, counsel for the Loan Parties, in substantially the form of
Exhibit G hereto;

 

(xvii)       a favorable opinion of Marc J. Kurzman, the
acting General Counsel to BMCA, in substantially the form of Exhibit H
hereto;

 

(xviii)      a Form U 1 referred to in Regulation U;

 

(xix)         the Intercreditor Agreement duly
executed by the parties thereto; and

 

(xx)          a Second Supplemented Indenture to the
2014 Indenture, duly executed by the parties thereto and in form and substance
satisfactory to the Administrative Agent.

 

(b)           Prior to or
coincidentally with the Closing Date, the Tender Offer shall have been
consummated in accordance in all material respects with the documentation
therefor after giving effect to any waivers or amendments to such documentation
that (i) are not materially adverse to the interests of the Lenders or (ii) to
which the Lead Arrangers have given their consent, such consent not to be
unreasonably withheld, conditional or delayed.

 

(c)           Prior to or coincidentally
with the Closing Date, BMCA shall have paid all of its outstanding obligations
and terminated the commitments under the Existing Credit Agreement and all
liens granted thereunder shall have been terminated or authorized to be
terminated and taken all other actions such that, after giving effect to the Tender
Offer, the Bridge Loan Facility and the Term Loan Facility, BMCA and its
Subsidiaries shall have no Debt outstanding other than (A) Debt under this
Agreement, (B) Debt under the Term Loan Facility, (C) Debt under the Existing
Indentures in an aggregate amount not in excess $260,000,000, (D) Debt under
the Bridge Loan Facility and (E) Debt listed on Schedule 4.01(o).

 

(d)           Prior to or coincidentally
with the Closing Date, the Borrowers shall have received $325,000,000 in gross
cash proceeds from the borrowings under the Bridge Loan Facility and not less
than $487,500,000 in gross cash proceeds from the borrowings under the Term
Loan Facility, which proceeds (after deduction of related costs and expenses
with respect thereto) shall have been used to make payments in connection with
the Transaction.

 

(e)           (a) Appropriate
notice shall have been duly provided in the bankruptcy case of G-I Holdings,
Inc. without any adverse action being take with respect thereto, or 

 

65

 

if any
objections are made in respect of such notice, the bankruptcy court has issued
an order (which has become final) satisfactory to the Administrative Agent
approving this Agreement as referred to Section 8.14 and (b) all required
filings in connection with the Transaction shall have been made and all
applicable waiting periods shall have expired without any action being taken by
any competent authority which prevents the consummation of the Transaction. Additionally,
there shall not exist any event or order arising in the bankruptcy case of G-I
Holdings, Inc., prohibiting or imposing materially adverse conditions upon the
Transaction or the transactions contemplated by this Agreement.

 

(f)            All costs, fees,
expenses (including legal fees and expenses) and other compensation
contemplated hereby, payable to the Joint Lead Arrangers and the Lenders or
otherwise payable in respect of the Transaction shall have been paid to the
extent due.

 

(g)           There has not
occurred any condition or circumstance constituting an Elk Material Adverse
Effect.

 

(h)           BMCA shall have used
reasonable efforts to receive ratings (of any level) for this Agreement from
S&P and Moody’s.

 

SECTION 3.02.      Conditions Precedent to Each Borrowing and
Issuance. The obligation of each Lender to make an Advance (other than a Letter
of Credit Advance made by the Issuing Bank or a Lender pursuant to
Section 2.03(c) and a Swing Line Advance made by a Lender pursuant to
Section 2.02(b)) on the occasion of each Borrowing (including the initial
Borrowing), and the obligation of the Issuing Bank to issue a Letter of Credit
(including the initial issuance) and the right of the Borrowers to request a
Swing Line Borrowing, shall be subject to the further conditions precedent that
on the date of such Borrowing or issuance (a) the following statements
shall be true and the Administrative Agent shall have received for the account
of such Lender or the Issuing Bank a certificate signed by a duly authorized
officer of BMCA, dated the date of such Borrowing or issuance, stating that
(and each of the giving of the applicable Notice of Borrowing, Notice of Swing
Line Borrowing, or Notice of Issuance and the acceptance by the Borrowers of
the proceeds of such Borrowing or of such Letter of Credit shall constitute a
representation and warranty by the Borrowers that both on the date of such
notice and on the date of such Borrowing or issuance such statements are true):

 

(i)            the representations
and warranties contained in each Loan Document and in the Merger Agreement are
correct in all material respects on and as of such date, before and immediately
after giving effect to such Borrowing or issuance and to the application of the
proceeds therefrom, as though made on and as of such date, other than any such
representations or warranties that, by their terms, refer to a specific date
other than the date of such Borrowing or issuance, in which case as of such
specific date, provided, that in
the case of the initial Borrowing, the representation and warranty set forth in
Section 4.01(g)(i)(B) shall not be brought down to the date thereof and provided, further,  however, that until the Merger the
representations and warranties in the Merger Agreement and the Loan Documents
in respect of Elk and its Subsidiaries, for purposes of this Section 3.02(a)
and Section 4.01, (A) in the case of Borrowings the proceeds of which are used
to purchase Company Stock, shall be limited to (1) those set forth in the 

 

66

 

Merger
Agreement as are material to the interests of the Lenders, but only to the
extent that BMCA Acquisition or BMCA Acquisition Sub has the right to terminate
their obligations under the Merger Agreement as a result of a breach of such
representations and (2) the Specified Representations and (B) in the case of
Borrowings the proceeds of which are not used to purchase Company Stock, shall
be true and correct to the best of the Borrowers’ knowledge and shall exclude
the accuracy of any Schedule insofar as it relates to Elk and its Subsidiaries.
For purposes hereof, “Specified
Representations” means the representations and warranties set
forth in the Merger Agreement as to the corporate power and authority of Elk
and its Subsidiaries and the execution, delivery and enforceability by Elk and
its Subsidiaries of the Merger Agreement and documents related thereto;

 

(ii)           no Default has
occurred and is continuing, or would result from such Borrowing or from the
application of the proceeds therefrom (except with respect to a breach of
representations that are not conditions to funding of any Borrowings the
proceeds of which are used to purchase Company Stock); and

 

(iii)          for each Revolving
Credit Advance or Swing Line Advance made by the Swing Line Bank or issuance or
renewal of any Letter of Credit, the Loan Value exceeds the aggregate principal
amount of the Revolving Credit Advances plus Swing Line Advances plus Letter of
Credit Advances to be outstanding plus the
aggregate Available Amount of all Letters of Credit to be outstanding after
giving effect to such Advance or issuance or renewal, respectively; and

 

(b) the Administrative Agent shall be satisfied in
its reasonable judgment that (i) no action adverse to the validity and
enforceability of the liens created in favor of the Collateral Monitoring Agent,
for the benefit of the Lender Parties, under the Collateral Documents or the
rights or remedies of the Agents or the Lenders under any of the Loan Documents
has been taken in or in connection with the G-I Holdings bankruptcy proceedings
(it being understood that the filings on June 30, 2003 of the Notice of Appeal
and the brief in support thereof by the Official Committee of Asbestos
Claimants in the G-I Holdings bankruptcy proceedings shall not, solely by
themselves, be deemed to be adverse actions for purposes of this clause (b)) or
(ii) if any such action has been taken, such action has been resolved in a
manner reasonably satisfactory to the Administrative Agent.

 

                SECTION 3.03.      Determinations Under Section 3.01. For
purposes of determining compliance with the conditions specified in
Section 3.01, each Lender Party shall be deemed to have consented to,
approved or accepted or to be satisfied with each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to the Lender Parties unless an officer of the Administrative Agent
responsible for the transactions contemplated by the Loan Documents shall have
received notice from such Lender Party prior to the Closing Date specifying its
objection thereto.

 

67

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

                SECTION 4.01.      Representations and Warranties of the
Borrowers. Each Borrower represents and warrants that the following statements
are true and correct, provided, however,
that until the Merger such representations and warranties with respect to Elk
and its Subsidiaries shall be limited as set forth in Section 3.02(a)(i):

 

(a)           Corporate Existence. Each Loan
Party and each of its Subsidiaries (i) is a corporation or limited
liability company duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (ii) is duly qualified
and in good standing as a foreign corporation or limited liability company in
each other jurisdiction in which it owns or leases property or in which the
conduct of its business requires it to so qualify or be licensed except where
the failure to so qualify or be licensed could not be reasonably expected to
have a Material Adverse Effect and (iii) has all requisite corporate or
limited liability company power and authority (including all Governmental
Authorizations) to own or lease and operate its properties and to carry on its
business as now conducted and as proposed to be conducted. All of the
outstanding Equity Interests in BMCA have been validly issued, are fully paid
and non-assessable and are owned by BMCA Holdings Corporation in the amounts
specified on Schedule 4.01(a) hereto free and clear of all Liens.

 

(b)           Subsidiaries. Set forth on
Schedule 4.01(b) hereto is a complete and accurate list of all
Subsidiaries of each Loan Party as of the date hereof, showing (as to each such
Subsidiary) the jurisdiction of its organization, the number of shares of each
class of its authorized Equity Interests, and the number outstanding on the
date hereof and the percentage of each such class of its Equity Interests owned
(directly or indirectly) by such Loan Party and the number of shares covered by
all outstanding options, warrants, rights of conversion or purchase and similar
rights at the date hereof. All of the outstanding Equity Interests in each Loan
Party’s Subsidiaries have been validly issued, are fully paid and non-assessable
and are owned by such Loan Party or one or more of its Subsidiaries free and
clear of all Liens, except those created under the Collateral Documents and to
secure Debt under the Term Loan Facility, the Existing Indentures, the Bridge
Loan Facility and, when issued, the Senior Notes.

 

(c)           Corporate Power; Authorization.
The execution, delivery and performance by each Loan Party of each Transaction
Document to which it is or is to be a party, and the consummation of the
transactions contemplated hereunder, are within such Loan Party’s corporate
powers, have been duly authorized by all necessary corporate action, and do not
(i) contravene such Loan Party’s charter or bylaws or other constituent
documents, (ii) violate any law, rule, regulation (including
Regulation X and Regulation U of the Board of Governors of the Federal
Reserve System), order, writ, judgment, injunction, decree, determination or
award, (iii) conflict with or result in the breach of, or constitute a
default or require any payment to be made under, any contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument binding on or
affecting any Loan Party, any of its Subsidiaries or any of their properties or
(iv) except for the Liens created under the Loan Documents and to secure
Debt under the Term Loan Facility, the Existing Indentures, the Bridge Loan
Facility and, when issued, the Senior Notes, result in or require the creation
or imposition of any Lien upon or with 

 

68

 

respect to any of the properties of any Loan Party or any of its
Subsidiaries. No Loan Party or any of its Subsidiaries is in violation of any such
law, rule, regulation, order, writ, judgment, injunction, decree, determination
or award or in breach of any such contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument, the violation or breach of
which could reasonably be expected to have a Material Adverse Effect. In making
the foregoing representation with respect to non-contravention of Regulations U
and X, the Borrowers are relying on each Lender Party having determined that
the good faith loan value of the Collateral securing its extensions of credit
pursuant to this Agreement is not less than the amount of such extensions of
credit.

 

(d)           Governmental Authorizations. No
Governmental Authorization, and no notice to or filing with, any Governmental
Authority or any other third party is required for (i) the due execution,
delivery, recordation, filing or performance by any Loan Party of any Loan
Document to which it is or is to be a party, or for the consummation of the
Transaction (except for the filing of a certificate of merger in connection
with the Merger), (ii) the grant by any Loan Party of the Liens granted by
it pursuant to the Collateral Documents, (iii) the perfection or
maintenance of the Liens created under the Collateral Documents (including the
first priority nature thereof (subject to Liens permitted under any Loan
Document)) or (iv) the exercise by any Agent or any Lender Party of its
rights under the Loan Documents or the remedies in respect of the Collateral
pursuant to the Collateral Documents, except for the authorizations, approvals,
actions, notices and filings which have been duly obtained, taken, given or
made on or prior to the date hereof and are in full force and effect or will be
made to perfect a security interest as contemplated by Section 3.01(a)(iv)
and Section 5.01(j). All applicable waiting periods in connection with the
Transaction have expired without any action having been taken by any competent
authority restraining, preventing or imposing materially adverse conditions
upon the Transaction or the rights of the Loan Parties or their Subsidiaries
freely to transfer or otherwise dispose of, or to create any Lien on, any
properties now owned or hereafter acquired by any of them.

 

(e)           Enforceable Obligations. This
Agreement has been, and each other Transaction Document when delivered
hereunder will have been, duly executed and delivered by each Loan Party party
thereto. This Agreement is, and each other Transaction Document when delivered
hereunder will be, the legal, valid and binding obligation of each Loan Party
party thereto, enforceable against such Loan Party in accordance with its
terms.

 

(f)            Litigation. Other than the
matters described on Schedule 4.01(f) hereto (the “Disclosed Litigation”), there is no action, suit,
investigation, litigation or proceeding affecting any Loan Party or any of its
Subsidiaries, including any Environmental Action, pending or to the knowledge
of BMCA, threatened before any Governmental Authority or arbitrator that
(i) could reasonably be expected to have a Material Adverse Effect (other
than the Disclosed Litigation), (ii) as of the Closing Date purports to
affect the legality, validity or enforceability of any Transaction Document or
the consummation of the Transaction or (iii) could reasonably be likely to materially
affect the legality, validity or enforceability of any Loan Document, and since
December 31, 2006, there has been no material adverse change in the status, or
financial effect on any Loan Party or any of its Subsidiaries, of the Disclosed
Litigation from that described on Schedule 4.01(f) hereto.

 

69

 

(g)           Financial Statements. (i) (A)
The Consolidated balance sheet of BMCA and its Subsidiaries as of December 31,
2006, and the related Consolidated statement of income and Consolidated
statement of cash flows of BMCA and its Subsidiaries for the Fiscal Year then
ended, accompanied by an unqualified opinion of Ernst & Young LLP,
independent public accountants, copies of which have been furnished to each Lender
Party, fairly present the Consolidated financial condition of BMCA and its
Subsidiaries as at such date and the Consolidated results of operations of BMCA
and its Subsidiaries for the period ended on such date, all in accordance with
GAAP, and (B) since December 31, 2006, there has been no Material Adverse
Change.

 

(ii)           The Consolidated
forecasted balance sheets, statements of income and statements of cash flows of
BMCA and its Subsidiaries delivered to the Lender Parties in February 2007, and
all other written information in connection therewith, or otherwise required to
be delivered pursuant to Section 5.03 were prepared in good faith on the
basis of the assumptions stated therein, which assumptions were fair in light
of the conditions existing at the time of delivery of such forecasts, and
represented, at the time of delivery, BMCA’s good faith and reasonable estimate
of the future financial performance of BMCA and its Subsidiaries.

 

(iii)          No written
information, exhibit or report delivered or furnished by or on behalf of any
Loan Party to any Agent or any Lender Party in connection with the negotiation
and syndication of the Loan Documents or pursuant to the terms of the Loan
Documents, including without limitation the Information Memorandum when delivered,
contained or will contain (when taken together) at the time such information
was or will be delivered or furnished any untrue statement of a material fact
or omitted to state a material fact necessary to make the statements made
therein at the time made not misleading.

 

(iv)          No Borrower is
engaged in the business of extending credit for the purpose of purchasing or
carrying Margin Stock, and except for the purchase of the shares of Elk, no
proceeds of any Advance or drawings under any Letter of Credit will be used to
purchase or carry any Margin Stock or to extend credit to others for the
purpose of purchasing or carrying any Margin Stock.

 

(h)           Investment Company Act; Public
Utility Holding Company Act. Neither any Loan Party nor any of its Subsidiaries
is an “investment company”, or an “affiliated person” of, or “promoter” or “principal
underwriter” for, an “investment company”, as such terms are defined in the
Investment Company Act of 1940, as amended. Neither any Loan Party nor any of
its Subsidiaries is a “holding company”, or a “subsidiary company” of a “holding
company”, or an “affiliate” of a “holding company” or of a “subsidiary company”
of a “holding company”, as such terms are defined in the Public Utility Holding
Company Act of 2005, as amended. Neither the making of any Advances, nor the
issuance of any Letters of Credit, nor the application of the proceeds or
repayment thereof by the Borrowers, nor the consummation of the other
transactions contemplated by the Loan Documents, will violate any provision of
any such Act or any rule, regulation or order of the Securities and Exchange
Commission thereunder.

 

70

 

(i)            No Burdensome Restrictions. Neither
any Loan Party nor any of its Subsidiaries is a party to any indenture, loan or
credit agreement or any lease or other agreement or instrument containing
restrictions, or subject to any charter or corporate restriction, that could be
reasonably expected to have a Material Adverse Effect.

 

(j)            Solvency. BMCA and its
Subsidiaries, taken as a whole are Solvent (assuming that neither BMCA nor any
of its Subsidiaries has any liability in respect of asbestos claims).

 

(k)           ERISA Matters. (i)  Set forth on Schedule 4.01(k) hereto, as
of the date hereof, is a complete and accurate list of all Plans and
Multiemployer Plans.

 

(ii)           No ERISA Event has
occurred or is reasonably expected to occur with respect to any Plan that would
result in a material liability.

 

(iii)          Schedule B
(Actuarial Information) to the most recent annual report (Form 5500
Series) for each Plan, copies of which have been filed with the Internal
Revenue Service and furnished to the Lender Parties, is complete and accurate
in all material respects and fairly presents the funding status of such Plan,
and since the date of such Schedule B there has been no material adverse
change in such funding status.

 

(iv)          Neither any Loan
Party nor any ERISA Affiliate has incurred or is reasonably expected to incur
any material Withdrawal Liability to any Multiemployer Plan which has not been
fully satisfied.

 

(v)           Neither any Loan
Party nor any ERISA Affiliate has been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in reorganization or has
been terminated, within the meaning of Title IV of ERISA, and no such
Multiemployer Plan is reasonably expected to be in reorganization or to be
terminated, within the meaning of Title IV of ERISA except to the extent
such reorganization or termination has not resulted, and is not reasonably expected
to result, in a material liability of any Loan Party or any ERISA Affiliate.

 

(l)            Environmental
Matters. Except as set forth on Schedule 4.01(l),

 

(i)            The operations and
properties of each Loan Party and each of its Subsidiaries comply in all
material respects with Environmental Laws and Environmental Permits, all past
non-compliance with such Environmental Laws and Environmental Permits has been
resolved or is expected to be resolved without material ongoing obligations or
costs, and, to the knowledge of the Loan Parties, no circumstances exist that
could be reasonably likely to (A) form the basis of an Environmental
Action against any Loan Party or any of its Subsidiaries or any of their
properties that could reasonably be likely to have a Material Adverse Effect or
(B) cause any such property to be subject to any restriction on ownership,
occupancy, use or transferability under any Environmental Law, assuming
continued use of the property for industrial purposes, that could reasonably be
likely to have a Material Adverse Effect.

 

71

 

(ii)           No properties
currently or, to the knowledge of the Loan Parties, formerly owned or operated
by any Loan Party or any of its Subsidiaries is listed or proposed for listing
on the NPL or on any analogous foreign, or state list and the liability which
such Loan Party or Subsidiary is reasonably likely to have in respect thereof
(net of insurance proceeds received (or to be received) or indemnification
agreements of the type referred to in clause (iv) below) is in excess of
$37,500,000 in the aggregate (when combined with the liabilities referred to in
clauses (iii), (iv), (v) and (vi) of this Section 4.01(l)).

 

(iii)          No properties owned
or operated by any Loan Party or any of its Subsidiaries is a treatment,
storage or disposal facility requiring a permit under the Resource Conservation
and Recovery Act, 42 U.S.C. §6901 et seq.,
the regulations thereunder or any state analogue and the liability which such
Loan Party or Subsidiary is reasonably likely to have in respect thereof (net
of insurance proceeds received (or to be received) or indemnification
agreements of the type referred to in clause (iv) below) is in excess of
$37,500,000 in the aggregate (when combined with the liabilities referred to in
clauses (ii), (iv), (v) and (vi) of this Section 4.01(l)).

 

(iv)          There are no facts
or circumstances or conditions arising out of the location and operation of any
underground or above ground storage tanks, surface impoundments, septic tanks,
pits, sumps or lagoons in which Hazardous Materials are being or have been
treated, stored or disposed of or the release, discharge or disposal of
Hazardous Materials on any property currently owned or operated by any Loan
Party or any of its Subsidiaries or, to the knowledge of any Loan Party, on any
property formerly owned or operated by any Loan Party or any of its
Subsidiaries that would reasonably be expected to cause the Loan Parties or any
of their Subsidiaries any liability ((I) excluding (A) liabilities incurred in
the ordinary cause of business, and (B) liabilities with respect to which the
applicable Loan Party is the beneficiary of a third party indemnification
agreement which is supported by a letter of credit or other credit facility, in
either case in form and substance acceptable to the Administrative Agent, and
which third party indemnification agreement is otherwise acceptable to the
Administrative Agent, and (II) in all cases, such liabilities shall be
determined net of insurance proceeds received (or to be received) by the
applicable Loan Party in connection with such liability) in excess of, together
with all other occurrences described in clauses (ii), (iii), (v) and (vi) of
this Section 4.01(l), $37,500,000 in the aggregate pursuant to
Environmental Laws or Environmental Permits.

 

(v)           Neither any Loan
Party nor any of its Subsidiaries is undertaking, and has not completed, either
individually or together with other potentially responsible parties, any
investigation or assessment or remedial or response action relating to any
actual or threatened release, discharge or disposal of Hazardous Materials at
any site, location or operation, pursuant to the order under Environmental Law
of any governmental or regulatory authority which would reasonably be expected
to result in liability ((I) excluding (A) liabilities incurred in the ordinary
cause of business, and (B) liabilities with respect to which the applicable
Loan Party is the beneficiary of a third party indemnification agreement which
is supported by a letter of credit or other credit facility, in either case in
form and substance acceptable to the Administrative Agent, and which third
party indemnification agreement is otherwise acceptable to the Administrative 

 

72

 

Agent, and
(II) in all cases, such liabilities shall be determined net of insurance
proceeds received (or to be received) by the applicable Loan Party in
connection with such liability) in excess of, together with all other
occurrences described in clauses (ii), (iii), (iv) and (vi) of this Section 4.01(l),
$37,500,000 in the aggregate.

 

(vi)          No wastes generated
at, stored at, or transported to or from any property currently or formerly
owned or operated by any Loan Party or any of its Subsidiaries have been
disposed of in a manner that would reasonably be expected to result in
liability ((I) excluding (A) liabilities incurred in the ordinary cause of
business, and (B) liabilities with respect to which the applicable Loan Party
is the beneficiary of a third party indemnification agreement which is
supported by a letter of credit or other credit facility, in either case in
form and substance acceptable to the Administrative Agent, and which third
party indemnification agreement is otherwise acceptable to the Administrative
Agent, and (II) in all cases, such liabilities shall be determined net of
insurance proceeds received (or to be received) by the applicable Loan Party in
connection with such liability) in excess of, together with all other
occurrences described in clauses (ii), (iii), (iv) and (v) of this Section 4.01(l),
$37,500,000 in the aggregate pursuant to Environmental Laws.

 

(m)          Tax Matters. (i)  Neither any Loan Party nor any of its
Subsidiaries is party to any tax sharing agreement other than the Tax
Agreement.

 

(ii)           Each Loan Party and
each of its Subsidiaries and Affiliates has filed, has caused to be filed or
has been included in all Federal income and other material tax returns required
to be filed by or on behalf of it and has paid or caused to be paid all taxes
shown thereon to be due for its account, together with all tax assessments
imposed on them plus any applicable interest and penalties except for those
taxes contested in good faith and for which reserves have been established in
accordance with GAAP.

 

(iii)          Set forth on
Part I of Schedule 4.01(m) hereto is a complete and accurate list, as
of the date hereof, of each taxable year of each Loan Party and each of its
Subsidiaries and Affiliates for which Federal income tax returns have been
filed on behalf of each Loan Party and for which the expiration of the
applicable statute of limitations for assessment or collection has not occurred
by reason of extension or otherwise (an “Open Year”). No issues have been
raised by the Internal Revenue Service in respect of Open Years that, in the
aggregate, could be reasonably expected to have a Material Adverse Effect.

 

(iv)          There are no
proposed tax adjustments or tax assessments in writing against BMCA or any of its
Subsidiaries in respect of Open Years that if paid, collected or otherwise
enforced on a Loan Party would be reasonably likely to have a Material Adverse
Effect.

 

(v)           The aggregate unpaid
amount, as of the date hereof, of adjustments to the state, local and foreign
tax liability of each Loan Party and its Subsidiaries and Affiliates proposed
in writing by all state, local and foreign taxing authorities (other than
amounts arising from adjustments to Federal income tax returns) does not exceed
$10,000,000. 

 

73

 

No issues have
been raised by such taxing authorities that, in the aggregate, could be
reasonably likely to have a Material Adverse Effect.

 

(vi)          Based on current
information and circumstances, neither BMCA nor any of its Subsidiaries expect
any of the Borrowings or Advances hereunder to be specifically identified (in
whole or in part) as a “reportable transaction” on Internal Revenue Service
Form 8886 filed with U.S. Federal tax returns filed by them or the G-I
Holdings Tax Group for purposes of Section 6011, 6111 or 6112 of the
Internal Revenue Code or the Treasury Regulations promulgated thereunder.

 

(n)           Labor Matters. Neither the
business nor the properties of any Loan Party or any of its Subsidiaries are
affected by any strike, lockout or other labor dispute, that could be
reasonably likely to have a Material Adverse Effect.

 

(o)           Surviving Debt. Set forth on
Schedule 4.01(o) hereto is a complete and accurate list of all Surviving
Debt as of the date hereof, showing the obligor and the principal amount
outstanding thereunder, the maturity date thereof and the amortization schedule
therefor.

 

(p)           Existing Liens. Set forth on
Schedule 4.01(p) hereto is a complete and accurate list as of the date
hereof of all Liens on the property or assets of any Loan Party or any of its
Subsidiaries, showing the lienholder thereof, the principal amount of the
obligations secured thereby and the property or assets of such Loan Party or
such Subsidiary subject thereto.

 

(q)           Leased Real Property. (1)  Set forth on Schedule 4.01(q)(1) hereto
is as of the date hereof a complete (except for non-material leases which (A)
provide for annual rental payments totaling in the aggregate (together with the
annual rental payments for all other leases not included on Schedule 4.01(q)(1)
or Schedule 4.01(q)(2)) not more than $1,000,000, and (B) have a term of not
longer than five years) and accurate list of all leases of real property under
which any Loan Party or any of its Subsidiaries is the lessee, showing the
street address, city or other relevant jurisdiction, state, lessor, lessee,
expiration date and annual rental cost thereof. To the knowledge of the
applicable Loan Party or Subsidiary that is the lessee, each such lease is the
legal, valid and binding obligation of the lessor thereof, enforceable in
accordance with its terms.

 

(2)           To the knowledge of the applicable
Loan Party or Subsidiary that is the lessor, set forth on Schedule 4.01(q)(2)
hereto is a complete (except for non-material leases which (A) provide for
annual rental payments totaling in the aggregate (together with the annual
rental payments for all other leases not included on Schedule 4.01(q)(1) or
Schedule 4.01(q)(2)) not more than $1,000,000, and (B) have a term of not
longer than five years) and accurate list as of the date hereof of all leases
of real property under which any Loan Party is the lessor, showing as of the
date hereof the street address, city or other relevant jurisdiction, state,
lessor, lessee, expiration date and annual rental cost thereof. To the
knowledge of the applicable Loan Party or Subsidiary that is the lessor, each
such lease is the legal, valid and binding obligation of the lessee thereof,
enforceable in accordance with its terms.

 

(r)            Investments. Set forth on
Schedule 4.01(r) hereto is a complete and accurate list as of the date
hereof of all Investments (other than Investments permitted under 

 

74

 

Section 5.02(f)(i) through (iv)) held by any Loan Party or any of its
Subsidiaries on the date hereof, showing the amount, obligor or issuer and
maturity, if any, thereof.

 

(s)           Intellectual Property. Set
forth on Schedule 4.01(s) hereto is a complete and accurate list as of the
date hereof of all registered patents, trademarks, trade names, service marks
and copyrights, and all applications therefor and licenses thereof, of each
Loan Party or any of its Subsidiaries, showing the jurisdiction in which
registered, the registration number, the date of registration and the
expiration date.

 

(t)            Material Contracts. Set forth
on Schedule 4.01(t) hereto is a complete and accurate list as of the date
hereof of all Material Contracts of each Loan Party and its Subsidiaries,
showing the parties and term thereof. Each such Material Contract has been duly
authorized, executed and delivered by each Loan Party party thereto, has not
been amended or otherwise modified, except as delivered prior to the date
hereof or in the case of modifications after the date of this Agreement, as
permitted under the Loan Documents, is in full force and effect and is binding
upon and enforceable against all parties thereto in accordance with its terms,
and there exists no default under any Material Contract that would give the counterparty
thereto the right to terminate such Material Contract (after the expiration of
any applicable cure period).

 

ARTICLE V

COVENANTS OF THE BORROWERS

 

                SECTION 5.01.      Affirmative Covenants. So long as any
Advance or any other Obligation of any Loan Party under any Loan Document shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, BMCA will (provided,
that until the consummation of the Merger, compliance with respect to Elk and
its Subsidiaries with the provisions of this Section 5.01 will not be
required, but BMCA will use commercially reasonable efforts to cause Elk and
its Subsidiaries to so comply except for Section 5.01(j) compliance with which
in respect of Elk and its Subsidiaries will only be required from and after the
consummation of the Merger):

 

(a)           Compliance with Laws, Etc. Comply,
and cause each of its Subsidiaries to comply, in all material respects, with
all applicable laws, rules, regulations and orders, such compliance to include,
without limitation, compliance with ERISA and the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act of 1970.

 

(b)           Payment of Taxes, Etc. Pay and
discharge, and cause each of its Subsidiaries to pay and discharge, before the
same shall become delinquent, (i) all Federal income and other material taxes,
assessments and governmental charges or levies lawfully imposed upon it or upon
its property and (ii) all lawful claims that, if unpaid, might by law
become a Lien upon its property; provided,
however, that neither BMCA nor
any of its Subsidiaries shall be required to pay or discharge any such Federal
income or other material tax, assessment, charge or claim that is being
contested in good faith and by proper proceedings and as to which appropriate
reserves are being maintained in conformity with GAAP, unless and 

 

75

 

until any Lien resulting therefrom attaches to its property and becomes
enforceable against its other creditors.

 

(c)           Compliance with Environmental Laws.
Comply, cause each of its Subsidiaries to comply, and use commercially
reasonable efforts to cause all lessees and other Persons operating or
occupying its properties to comply, in all material respects, with
Environmental Laws and Environmental Permits; obtain and renew, and cause each
of its Subsidiaries to obtain and renew, all material Environmental Permits
necessary for its operations and properties; and upon receipt of any
notification or otherwise obtaining knowledge of any release of Hazardous
Materials or other event that has a reasonable likelihood of causing any Loan
Party or any of its Subsidiaries to incur any material liability pursuant to
Environmental Laws, conduct, or pay for consultants to conduct, any
investigation, study, sampling and testing reasonably necessary to evaluate the
condition of the property, and undertake any cleanup, removal, further
investigation, and remedial or other action required by Environmental Laws; provided, however,
that neither BMCA nor any of its Subsidiaries shall be required to undertake
any such cleanup, removal, remedial or other action to the extent that its
obligation to do so is being contested in good faith and by proper proceedings
and appropriate reserves are being maintained with respect to such
circumstances.

 

(d)           Maintenance of Insurance. Maintain,
and cause each of its Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which BMCA or such
Subsidiary operates.

 

(e)           Preservation of Corporate
Existence, Etc. Preserve and maintain, and cause each of its Subsidiaries
to preserve and maintain, its existence, legal structure, legal name, rights
(charter and statutory), permits, licenses, approvals, privileges and
franchises; provided, however, that BMCA and its Subsidiaries
may consummate any merger or consolidation permitted under
Section 5.02(d); and provided further
that neither BMCA nor any of its Subsidiaries shall be required to preserve any
right, permit, license, approval, privilege or franchise if the Board of
Directors (or similar entity) of BMCA or such Subsidiary shall determine that
the preservation thereof is no longer desirable in the conduct of the business
of BMCA or such Subsidiary, as the case may be, and that the loss thereof is
not disadvantageous in any material respect to BMCA, such Subsidiary or the
Lender Parties; provided further
that any Guarantor may be dissolved, provided that (i) no Event of Default
shall then exist and be continuing, (ii) all of the property of such
Guarantor shall be transferred to BMCA or any other Guarantor, and
(iii) no such dissolution shall adversely affect the Collateral (including
the nature, status, quality or value thereof) or the interest of the Collateral
Agreement Agent therein; provided, further,
that any Loan Party which is now a corporation can convert into a limited
liability company, as long as (1)  no Event of Default shall then exist
and then be continuing, (2) no such conversion shall adversely affect the
obligations of such Loan Party under the Loan Documents or the Collateral (including
the nature, status, quality or value thereof) or the interest of the Collateral
Monitoring Agent therein and such Loan Party shall execute all documents and
take such actions in connection with such conversion prior to the effect
thereof as reasonably requested by the Administrative Agent.

 

76

 

(f)            Visitation Rights. At any
reasonable time and from time to time and in each case, during normal business
hours, permit the Administrative Agent or the Collateral Monitoring Agent, or
any agents or representatives thereof, to examine and make copies of and
abstracts from the records and books of account of, and visit the properties
of, BMCA and any of its Subsidiaries, to conduct appraisals and field
examinations and monitor the collateral as the Administrative Agent or the
Collateral Monitoring Agent may require, and to discuss the affairs, finances
and accounts of BMCA and any of its Subsidiaries with any of their officers or
directors and with their independent certified public accountants; provided, however,
that any such discussions shall be in the presence of a Responsible Officer of BMCA,
so long as the Responsible Officers of BMCA have made reasonable efforts to
make themselves available for such purpose.

 

(g)           Keeping of Books. Keep, and
cause each of its Subsidiaries to keep, proper books of record and account, in
which full and correct entries shall be made of all financial transactions and
the assets and business of BMCA and each such Subsidiary in accordance with
generally accepted accounting principles in effect from time to time.

 

(h)           Maintenance of Properties, Etc.
Maintain and preserve, and cause each of its Subsidiaries to maintain and
preserve, all of its properties that are used or useful in the conduct of its
business in good working order and condition, ordinary wear and tear excepted and
will from time to time make or cause to be made all appropriate repairs,
renewals and replacements thereof except where failure to do so would not
materially adversely affect the use of the related property.

 

(i)            Transactions with Affiliates.
Conduct, and cause each of its Subsidiaries to conduct, all transactions
otherwise permitted under the Loan Documents with any of their Affiliates
(including payments of any management fees) on terms that are fair and
reasonable and no less favorable to BMCA or such Subsidiary than it would
obtain in a comparable arm’s-length transaction with a Person not an Affiliate.

 

(j)            Covenant to Guarantee Obligations
and Give Security. Upon (x) the request of the Administrative Agent,
following the occurrence and during the continuance of a Default or (y) the
formation or acquisition of any new direct or indirect Subsidiaries by any Loan
Party, then in each case at BMCA’s reasonable expense:

 

(i)            in connection with
the formation or acquisition of a Subsidiary that is not (x) a CFC or
(y) a Subsidiary that is held directly or indirectly by a CFC, within 15
days after such formation or acquisition, cause each such Subsidiary, and cause
each direct and indirect parent of such Subsidiary owned by BMCA (if it has not
already done so), to duly execute and deliver to the Administrative Agent a
guaranty or guaranty supplement and a security agreement supplement, in form
and substance satisfactory to the Administrative Agent, guaranteeing the other
Loan Parties’ Obligations under the Loan Documents and providing security in
respect of such guaranty, except in the case of Elk and its Subsidiaries as of
the date of the Merger, deliver such documents on or prior to the date of the
Merger,

 

77

 

(ii)           within 30 days
after such request, formation or acquisition, take, and cause each Loan Party
and each newly acquired or newly formed Subsidiary (other than any Subsidiary
that is a CFC or a Subsidiary that is held directly or indirectly by a CFC) to
take, whatever action (including the filing of Uniform Commercial Code
financing statements and the giving of notices) may be necessary or reasonably
advisable in the opinion of the Collateral Monitoring Agent to vest in the Collateral
Monitoring Agent (or in any representatives of the Collateral Monitoring Agent
designated by such entity) valid and subsisting Liens on the properties purported
to be subject to the pledges, assignments, security agreement supplements and
security agreements delivered pursuant to this Section 5.01(j),
enforceable against all third parties in accordance with their terms,

 

(iii)          within 60 days
after such request, formation or acquisition or, in the case of Elk and its
Subsidiaries, 90 days after consummation of the Merger (or such later date as
may be agreed to by the Administrative Agent), deliver to the Administrative
Agent, upon the request of the Administrative Agent in its sole discretion,
exercised reasonably, a signed copy of a favorable opinion, addressed to the Administrative
Agent and the Lender Parties, of counsel for the Loan Parties acceptable to the
Administrative Agent as to (1) such guaranties, guaranty supplements,
pledges, assignments, security agreement supplements and security agreements
being legal, valid and binding obligations of each Loan Party party thereto
enforceable in accordance with their terms, (2) such recordings, filings,
notices, endorsements and other actions being sufficient to create valid
perfected Liens on such properties, and (3) such other matters as the
Administrative Agent may reasonably request, and

 

(iv)          at any time and from
time to time, promptly execute and deliver, and cause to execute and deliver,
each Loan Party and each newly acquired or newly formed Subsidiary (other than
any Subsidiary that is a CFC or a Subsidiary that is held directly or
indirectly by a CFC) any and all further instruments and documents and take,
and cause each Loan Party and each newly acquired or newly formed Subsidiary
(other than any Subsidiary that is a CFC or a Subsidiary that is held directly
or indirectly by a CFC) to take, all such other action as the Collateral
Monitoring Agent and/or the Administrative Agent may reasonably deem necessary
in obtaining the full benefits of, or in perfecting and preserving the Liens
of, such guaranties, assignments, security agreement supplements and security
agreements.

 

(k)           Further Assurances. (i)  Promptly upon request by the Administrative
Agent, correct, and cause each of its Subsidiaries promptly to correct, any material
defect or error that may be discovered in any Loan Document or in the
execution, acknowledgment, filing or recordation thereof, and

 

(ii)           Promptly upon
request by the Administrative Agent, do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register any and all such further
acts, deeds, conveyances, pledge agreements, assignments, financing 

 

78

 

statements and
continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments as the Administrative
Agent may reasonably require from time to time in order to (A) carry out
more effectively the purposes of the Loan Documents, (B) to the fullest
extent permitted by applicable law, subject any Loan Party’s or any of its
Subsidiaries’ properties, assets, rights or interests to the Liens now or
hereafter intended to be created by any of the Collateral Documents,
(C) perfect and maintain the validity, effectiveness and priority of any
of the Collateral Documents and any of the Liens intended to be created
thereunder and (D) assure, convey, grant, assign, transfer, preserve,
protect and confirm more effectively unto the Secured Parties the rights
granted or now or hereafter intended to be granted to the Secured Parties under
any Loan Document or under any other instrument executed in connection with any
Loan Document to which any Loan Party or any of its Subsidiaries is or is to be
a party, and cause each of its Subsidiaries to do so.

 

(iii)          On or prior to a
date that is 45 days following the Closing Date or such later date as the
Administrative Agent may determine in its sole discretion, BMCA and its
Subsidiaries shall have entered into one or more account control agreements in
form and substance satisfactory to the Administrative Agent in respect of
deposit accounts of BMCA and its Subsidiaries (other than Elk and its
Subsidiaries) and on or prior to a date that is 45 days following the date of
the Merger or such later date as the Administrative Agent may determine in its
sole discretion, Elk and its Subsidiaries shall have entered into one or more
account control agreements in form and substance satisfactory to the
Administrative Agent in respect of deposit accounts of Elk and its
Subsidiaries.

 

(iv)          With respect to Elk
and its Subsidiaries as of the date of the Merger, (A) on or prior to a date
that is 15 days following the date of the Merger or such later date as the
Administrative Agent may determine in is sole discretion, BMCA shall cause to
be delivered to the Administrative Agent resolutions and legal opinions, in
form and substance reasonably satisfactory to the Administrative Agent, with
respect to the supplements to the Security Agreement and the Guaranty delivered
on the date of the Merger by such entities organized under the laws of the
State of Delaware and on or prior to a date that is 90 days following the date
of the Merger or such later date as the Administrative Agent may determine in
its sole discretion, BMCA shall cause to be delivered to the Administrative
Agent such resolutions and legal opinions with respect to such supplements
delivered by each such entity organized under the laws of a jurisdiction in
which a mortgage is to be recorded pursuant to the Term Loan Facility and (B)
on or prior to a date that is 45 days following the date of the Merger or such
later date as the Administrative Agent may determine in its sole discretion,
BMCA shall cause to be delivered to the Collateral Monitoring Agent certificates
representing equity interests (accompanied by undated stock powers executed in
blank) and instruments evidencing Debt, indorsed in blank, in each case pledged
under the Security Agreement on the date of the Merger.

 

(l)            Performance of Tax Agreement.
Perform and observe, and cause each of its Subsidiaries to perform and observe,
all of the terms and provisions of the Tax Agreement to be performed or
observed by it, maintain the Tax Agreement in full force and effect, enforce the

 

79

 

Tax Agreement in accordance with its terms, and take all such action under
the Tax Agreement to such end as may be from time to time reasonably requested
by the Administrative Agent.

 

(m)          Compliance with Terms of Leaseholds.
Make all payments and otherwise perform all obligations in respect of all
leases of real property to which BMCA or any of its Subsidiaries is a party,
keep such leases in full force and effect and not allow such leases to lapse or
be terminated or any rights to renew such leases to be forfeited or cancelled,
notify the Administrative Agent of any material default of which it is aware by
any party with respect to such leases and cooperate with the Administrative
Agent in all respects to cure any such default by a Loan Party, and cause each
of its Subsidiaries to do so, except, in any case, where the failure to do so,
either individually or in the aggregate, could not be reasonably likely to have
a Material Adverse Effect.

 

(n)           Performance of Material Contracts.
Perform and observe all the terms and provisions of each Material Contract to
be performed or observed by it, maintain each such Material Contract in full
force and effect, enforce each such Material Contract in accordance with its
terms, take all such action to such end as may be from time to time requested
by the Administrative Agent, and cause each of its Subsidiaries to do so,
except, in any case, where the failure to do so, either individually or in the
aggregate, could not be reasonably likely to have a Material Adverse Effect.

 

(o)           G-I Holdings. Upon the
Administrative Agent’s reasonable request, but not more frequently than once
per month, make a senior officer of BMCA available to provide to the
Administrative Agent (i) an update of developments in (A) the G-I
Holdings bankruptcy proceedings, and (B) any proceedings related to
asserted Federal income tax liabilities in connection with the Rhone Poulenc
Transactions and (ii) any information relating thereto that the
Administrative Agent may reasonably request.

 

(p)           Reportable Transaction. BMCA will
notify the Administrative Agent promptly in the event that BMCA or any other
member of the G-I Holdings Tax Group specifically identifies any of the
Borrowings or Advances under this Agreement as a “reportable transaction” on
Internal Revenue Service Form 8886 filed with the U.S. Federal tax returns
for purposes of Sections 6011, 6111 or 6112 of the Internal Revenue Code or the
Treasury Regulations promulgated thereunder.

 

(q)           Tax Liabilities. BMCA (i)
shall immediately inform the Lenders with respect to the Rhone Poulenc
Transactions of (A) any court ruling determining tax liability or otherwise
addressing the merits of the case; (B) any proposed or actual assessment or
deficiency as to which any Loan Party or any member of the G-I Holdings Tax
Group has knowledge; or (C) any written demand for payment of taxes from a tax
authority, and (ii) shall provide any information available to them and
reasonably required by the Lenders to make a determination with respect to the
matters set forth in Section 6.01(h)(i).

 

                SECTION 5.02.      Negative Covenants. So long as any Advance
or any other Obligation of any Loan Party under any Loan Document shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender Party shall
have any Commitment hereunder, BMCA will not, at any time (provided,
that until the consummation of the Merger, compliance with respect to Elk and
its Subsidiaries with the 

 

80

 

provisions of this Section 5.02 will not be
required, but BMCA will use commercially reasonable efforts to cause Elk and
its Subsidiaries to so comply):

 

(a)           Liens, Etc. Create, incur,
assume or suffer to exist, or permit any of its Subsidiaries to create, incur,
assume or suffer to exist, any Lien on or with respect to any of its properties
of any character (including accounts) whether now owned or hereafter acquired,
or sign or file or suffer to exist, or permit any of its Subsidiaries to sign
or file or suffer to exist, under the Uniform Commercial Code of any
jurisdiction, a financing statement that names BMCA or any of its Subsidiaries
as debtor, or sign or suffer to exist, or permit any of its Subsidiaries to
sign or suffer to exist, any security agreement authorizing any secured party
thereunder to file such financing statement, or assign, or permit any of its
Subsidiaries to assign, any accounts or other right to receive income, except:

 

(i)            Liens created under
the Loan Documents and Liens securing the Term Loan Facility (and the other
Obligations referred to therein entitled to share in the collateral therefor),
the Bridge Loan Facility, the Existing Indentures and the Senior Notes;

 

(ii)           Permitted Liens;

 

(iii)          (A) Liens
existing on the date hereof and described on Schedule 4.01(p) hereto, (B)
after the consummation of the Merger, cash collateral to secure any outstanding
Elk Letters of Credit and (C) on or after the Closing Date, the Liens listed on
Schedule 5.02(a)(iii) hereto;

 

(iv)          purchase money Liens
upon or in real property or equipment acquired or held by BMCA or any of its
Subsidiaries in the ordinary course of business to secure the purchase price of
such property or equipment or to secure Debt incurred solely for the purpose of
financing the acquisition, construction or improvement of any such property or
equipment to be subject to such Liens, or Liens existing on any such property
or equipment at the time of acquisition (other than any such Liens created in
contemplation of such acquisition that do not secure the purchase price), or
extensions, renewals or replacements of any of the foregoing for the same or a
lesser amount, in each case, to the extent permitted under
Section 5.02(b)(iii)(B)(I); provided,
however, that no such Lien shall
extend to or cover any property other than the property or equipment being
acquired, constructed or improved, and no such extension, renewal or
replacement shall extend to or cover any property not theretofore subject to
the Lien being extended, renewed or replaced; and provided  further
that the aggregate principal amount of the Debt secured by Liens permitted by
this clause (iv) shall not exceed the amount permitted with respect
thereto under Section 5.02(b)(iii)(B) at any time outstanding;

 

(v)           Liens arising in
connection with Capitalized Leases permitted under
Section 5.02(b)(iii)(B)(II); provided,
however, that no such Lien shall extend
to or cover any Collateral or assets other than the assets subject to such
Capitalized Leases; and provided,
further that the aggregate principal
amount of 

 

81

 

the Debt
secured by Liens permitted by this clause (v) shall not exceed the amount
permitted with respect thereto under Section 5.02(b)(iii)(B) at any time
outstanding;

 

(vi)          Liens on fixed
assets to secure Debt permitted under Section 5.02(b)(iii)(B)(III); provided, however, that the aggregate
principal amount of the Debt secured by Liens permitted by this
clause (vi) shall not exceed the amount permitted with respect thereto under
Section 5.02(b)(iii)(B) at any time outstanding;

 

(vii)         Liens arising in
connection with sale-leaseback transactions permitted under
Section 5.02(b)(iii)(B)(IV); provided,
however, that no such Lien shall
extend to or cover any Collateral or assets other than the assets subject to
such sale-leaseback transactions; and provided,
further that the aggregate
principal amount of the Debt secured by Liens permitted by this
clause (vii) shall not exceed the amount permitted with respect thereto under
Section 5.02(b)(iii)(B) at any time outstanding;

 

(viii)        Liens to secure Debt
permitted under Section 5.02(b)(iii)(J);

 

(ix)           the replacement,
extension or renewal of any Lien permitted by clauses (iii) through (vii) above
upon or in the same property theretofore subject thereto or the replacement,
extension or renewal (without increase in the amount or change in any direct or
contingent obligor) of the Debt secured thereby; provided,  however, that
the aggregate principal amount of the Debt secured by Liens permitted by this
clause (ix) (excluding the replacement, extension or renewal of any Lien
permitted by clause (iii) above) shall not exceed the applicable amount
permitted with respect thereto under Section 5.02(b)(iii)(B) or (E), as
the case may be, at any time outstanding; and

 

(x)            Liens arising in
connection with operating leases to the extent such operating leases are
otherwise permitted hereunder; provided,
however, that no such Lien shall extend
to or cover any Collateral or assets other than the assets subject to such operating
leases.

 

(b)           Debt. Create, incur, assume or
suffer to exist, or permit any of its Subsidiaries to create, incur, assume or
suffer to exist, any Debt, except:

 

(i)            in the case of BMCA,
Debt owed to a wholly owned Subsidiary of BMCA which is a Guarantor;

 

(ii)           in the case of any
Subsidiary of BMCA, Debt owed to BMCA or to a wholly owned Subsidiary of BMCA, provided that, in each case, such Debt shall
be permitted under Section 5.02(f); and

 

82

 

(iii)          in the case of BMCA
and its Subsidiaries,

 

(A)          Debt under this Agreement, the Term
Loan Facility, the Existing Indentures, the Senior Notes, the Bridge Loan
Facility and the Elk Letters of Credit,

 

(B)           So long as (1) no Default has
occurred and is continuing (both at the time of such incurrence and after
giving pro forma effect thereto), and (2) after giving effect to such
incurrence, BMCA shall be in pro forma compliance with the provisions of
Section 5.04, if applicable (such compliance to be determined on the basis
of the required financial information most recently delivered to the
Administrative Agent and the Lender Parties as though such Debt had been
incurred as of the first day of the fiscal period covered thereby), (I) Debt
secured by Liens permitted by Section 5.02(a)(iv), (II) Capitalized Leases
permitted by Section 5.02(a)(v), (III) Debt secured by Liens on BMCA’s or
any of its Subsidiaries’ fixed assets, and (IV) Debt in respect of
sale-leaseback transactions permitted by Section 5.02(a)(vii), provided, however,
that (i) such Debt incurred pursuant to this Section 5.02(b)(iii)(B) shall
not have scheduled amortization payments prior to the fifth anniversary of the
Closing Date in an aggregate principal amount in any Fiscal Year (together with
the aggregate scheduled amortization payments in any Fiscal Year prior to the fifth
anniversary of the Closing Date of any Debt permitted pursuant to clauses (C),
(E) and (J)) greater than the Amortization Basket, and (ii) Debt incurred
pursuant to this Section 5.02(b)(iii)(B) shall not exceed $200,000,000 in the
aggregate during the term of this Agreement,

 

(C)           So long as (1) no Default has
occurred and is continuing (both at the time of such incurrence and after
giving pro forma effect thereto), and (2) after giving effect to such
incurrence, BMCA shall be in pro forma compliance with the provisions of
Section 5.04, if applicable (such compliance to be determined on the basis
of the required financial information most recently delivered to the
Administrative Agent and the Lender Parties as though such Debt had been
incurred as of the first day of the fiscal period covered thereby), Debt
extending the maturity of, or refunding or refinancing, in whole or in part
(without any increase in the principal amount thereof or any change in any
direct or contingent obligor thereof), any Debt under the 2014 Notes Indenture,
the Bridge Loan Facility, the Term Loan Facility or the Senior Notes, provided, however,
that (x) the terms and conditions of such extending, refunding or
refinancing Debt are market terms and conditions at the time of such extension,
refunding or refinancing, and (y) any security arrangements in respect of
such extended, refunded or refinanced Debt shall be no more onerous to the
Lender Parties than those set forth in the security documentation in effect at
such time; and, provided, further, that there are no remaining scheduled
amortization payments in respect of such 

 

83

 

extending, refunding or refinancing Debt
prior to December 31, 2012 that is more onerous than the remaining scheduled
amortization prior to December 31, 2012 applicable to the Debt being
refinanced; and, that any Net Cash Proceeds received by BMCA in connection with
any refinancing of such Debt and not applied for such refinancing shall be
applied as provided in Section 2.06.

 

(D)          The Surviving Debt and, on or after
the Closing Date, the Debt listed on Schedule 5.02(b)(iii)(D) hereto,

 

(E)           So long as (1) no Default has
occurred and is continuing (both at the time of such incurrence and after
giving pro forma effect thereto), and (2) after giving effect to such
incurrence, BMCA shall be in pro forma compliance with the provisions of
Section 5.04, if applicable (such compliance to be determined on the basis
of the required financial information most recently delivered to the
Administrative Agent and the Lender Parties as though such Debt had been
incurred as of the first day of the fiscal period covered thereby), Debt
extending the maturity of, or refunding or refinancing, in whole or in part
(without any increase in the principal amount thereof or any change in any
direct or contingent obligor thereof), any Debt described in clause (B)
above and any other Surviving Debt, provided that (x) there are no
remaining scheduled amortization payments in respect of such extending,
refunding or refinancing Debt prior to December 31, 2012 that is more onerous
than the remaining scheduled amortization prior to December 31, 2012, if any,
applicable to the Debt being extended, refunded or refinanced, (y) any
security arrangements in respect of such extended, refunded or refinanced Debt
shall be no more onerous to the Lender Parties than those set forth in the
security documentation in effect at such time, and (z) there are no scheduled
amortization payments of principal in respect of such Debt prior to the fifth
anniversary of the Closing Date in an aggregate principal amount in any Fiscal
Year (together with the aggregated scheduled amortization payments in any
Fiscal Year prior to the fifth anniversary of the Closing Date of any Debt
permitted pursuant to clauses (B) and (C) above and clause (J) below) greater
than the Amortization Basket; provided,
however, that the principal amount of such Debt being extended,
refunded or refinanced shall not be increased above the principal amount
thereof outstanding immediately prior to such extension, refunding or
refinancing and the direct and contingent obligors therefor shall not be
changed as a result of or in connection with such extension, refunding or
refinancing,

 

(F)           So long as (1) no Default has
occurred and is continuing (both at the time of such incurrence and after
giving pro forma effect thereto), and (2) after giving effect to such
incurrence, BMCA shall be in pro forma compliance, with the provisions of
Section 5.04, if applicable (such compliance to be determined on the basis
of the required financial information most recently delivered to the
Administrative Agent and the 

 

84

 

Lender Parties as though such Debt had been
incurred as of the first day of the fiscal period covered thereby), unsecured,
subordinated Debt owing to G-I Holdings or BMCA Holdings; provided, however,
that no payments shall be made with respect to Debt permitted under this clause
(F) unless after giving effect to each such payment, the Available Liquidity
(as certified to the Administrative Agent by a Responsible Financial Officer of
BMCA) shall be least $25,000,000,

 

(G)           Debt consisting of surety bonds or
similar instruments in favor of government agencies in connection with workers’
compensation liabilities, taxes, assessments or other obligations, provided, however, that such Debt is
incurred in the ordinary course of business,

 

(H)          Debt of any entity acquired by BMCA or its Subsidiaries in
accordance with the terms hereof so long as (i) such Debt was incurred prior to
such acquisition (and not in connection with or contemplation of, such
acquisition), (ii) both before and after giving effect to such acquisition, no
Default or Event of Default shall exist, and (iii) such Debt has no additional
direct, indirect or contingent obligor,

 

(I)            Debt of any Loan Party consisting of
Contingent Obligations in respect of Debt of other Loan Parties, so long as
such other Loan Parties are permitted to incur such Debt hereunder,

 

(J)            So long as (1) no Default has
occurred and is continuing (both at the time of such incurrence and after
giving pro forma effect thereto), and (2) after giving effect to such incurrence,
BMCA shall be in pro forma compliance, with the provisions of Section 5.04,
if applicable (such compliance to be determined on the basis of the required
financial information most recently delivered to the Administrative Agent and
the Lender Parties as though such Debt had been incurred as of the first day of
the fiscal period covered thereby), Debt ranked junior (in respect of any Liens
securing such Debt, which Liens shall be ranked junior to the Liens securing
this Revolving Credit Facility) , provided, however, that there are no scheduled amortization payments
of principal in respect of such Debt prior to the fifth anniversary of the
Closing Date in an aggregate principal amount in any Fiscal Year (together with
the aggregated scheduled amortization payments in any Fiscal Year prior to the fifth
anniversary of the Closing Date of any Debt permitted pursuant to clauses (B),
(C) and (E) above) greater than the Amortization Basket, and

 

(K)          At any time prior to the thirtieth
Business Day after the date of the Merger, the Elk Private Notes.

 

(c)           Change in Nature of Business. Make,
or permit any of its Subsidiaries to make, any material change in the nature of
its business as carried on at the date hereof (other 

 

85

 

than as a result of an Investment permitted by Section 5.02(f)(vii)(B) involving
complementary lines of business).

 

(d)           Mergers, Etc. Other than
pursuant to the Merger, merge into or consolidate with any Person or permit any
Person to merge into it, or permit any of its Subsidiaries to do so, except
that:

 

(i)            any Subsidiary of BMCA
may merge into or consolidate with any other Subsidiary of BMCA, provided, however,
that, in the case of any such merger or consolidation, the Person formed by such
merger or consolidation shall be a wholly owned Subsidiary of BMCA, and, provided further that, in the case of any
such merger or consolidation to which a Guarantor is a party, the Person formed
by such merger or consolidation shall be a Guarantor;

 

(ii)           in connection with
any acquisition permitted under Section 5.02(f), any Subsidiary of BMCA may
merge into or consolidate with any other Person or permit any other Person to
merge into or consolidate with it; provided,
however, that (x) the Person surviving
such merger shall be a wholly owned direct or indirect Subsidiary of BMCA and
(y) in the case of any such merger or consolidation to which a Guarantor
is a party, the Person formed by such merger or consolidation shall be a
Guarantor;

 

(iii)          in connection with
any sale or other disposition permitted under Section 5.02(e) (other than
clause (ii) thereof), any Subsidiary of BMCA may merge into or consolidate
with any other Person or permit any other Person to merge into or consolidate
with it; and

 

(iv)          any of BMCA’s
Subsidiaries may merge into BMCA; provided that the Person surviving such
merger shall be BMCA.

 

provided, however, that in
each case, immediately before and after giving effect thereto, no Event of
Default shall have occurred and be continuing and, in the case of any such
merger to which BMCA is a party, BMCA is the surviving corporation.

 

(e)           Sales, Etc., of Assets. Sell,
lease, transfer or otherwise dispose of, or permit any of its Subsidiaries to
sell, lease, transfer or otherwise dispose of, any assets, or grant any option
or other right to purchase, lease or otherwise acquire any assets, except:

 

(i)            Certain Permitted
Dispositions;

 

(ii)           in a transaction
authorized by Section 5.02(d) (other than subsection (iii) thereof)
or Section 5.02(f);

 

(iii)          the sale of any
(x) asset identified on Schedule 5.02(e) hereto (such assets being “Excluded Assets”)
or (y) any other assets in any Fiscal Year by BMCA or any Subsidiary, the
fair market value of which is not greater than $100,000,000; provided, however,
that any unused portion thereof may be carried forward to any succeeding year,
and provided further that the fair market
value of 

 

86

 

all assets
sold by BMCA or any Subsidiary during the term of this Agreement shall in no
event be greater than $300,000,000 in the aggregate (the foregoing asset sales
described in clauses (x) and (y) above being collectively, “Permitted Asset Sales”)
so long as in each case (A) the terms of any such sale shall be commercially
reasonable, (B) the purchase price paid to BMCA or such Subsidiary for
such asset shall be no less than the fair market value of such asset at the
time of such sale and (C) at least 66 2/3% of the purchase price for such
asset shall be paid to BMCA or such Subsidiary solely in cash;

 

(iv)          sales by means of a
lease or sublease of property of BMCA or any of its Subsidiaries, so long as
(x) such transaction is permitted pursuant to Section 5.02(b) and (y) BMCA or
such Subsidiary continues to reflect ownership of such property in its
financial statements in accordance with GAAP;

 

(v)           assignments and
licenses of intellectual property of BMCA and its Subsidiaries in the ordinary
course of business; and

 

(vi)          dispositions of
property not to exceed an aggregate fair market value of $10,000,000 in the
aggregate, which in the commercially reasonable opinion of BMCA or such
Subsidiary, and consistent with historic business practice, is obsolete;

 

provided that in the case of sales of
assets pursuant to clauses (i), (iii), (iv), and (vi) above, BMCA shall,
on the date of receipt by any Loan Party or any of its Subsidiaries of the Net
Cash Proceeds from such sale, prepay the Advances pursuant to, to the extent
and in the amount and order of priority set forth in, Section 2.06(b), as
specified therein.

 

(f)            Investments in Other Persons.
Make or hold, or permit any of its Subsidiaries to make or hold, any Investment
in any Person, except:

 

(i)            (A) equity
Investments by BMCA and its Subsidiaries in their Subsidiaries outstanding on
the date hereof, (B) additional Investments in Loan Parties and
(C) additional Investments by Subsidiaries of BMCA that are not Loan
Parties in other such Subsidiaries;

 

(ii)           so long as
(1) no Default or Event of Default has occurred and is continuing (both at
the time of such Investment and after giving pro forma effect thereto), and (2) after
giving effect to such Investment the Available Liquidity (as certified to the
Administrative Agent by a Responsible Financial Officer of BMCA) shall equal or
exceed the Specified Liquidity Amount, Investments in Non-Recourse Subsidiaries
or any other Persons that are not Loan Parties, excluding G-I Holdings and BMCA
Holdings (collectively, “Permitted Advances”);

 

(iii)          loans and advances
to employees in the ordinary course of the business of BMCA and its
Subsidiaries as presently conducted in an aggregate principal amount not to
exceed $2,500,000 at any time outstanding;

 

87

 

(iv)          Investments by BMCA and
its Subsidiaries in Cash Equivalents;

 

(v)           Investments existing
on the date hereof and described on Schedule 4.01(s) hereto;

 

(vi)          Investments by BMCA in
Hedge Agreements to the extent permitted under Section 5.02(s);

 

(vii)         the purchase or
other acquisition (a “Permitted
Acquisition”) of all of the Equity Interests in, or all or
substantially all of the property and assets of, any Person that, upon the
consummation thereof, will be wholly owned directly by BMCA or one or more of
its wholly owned Subsidiaries (including as a result of a merger or
consolidation); provided that, with respect to each purchase or other
acquisition made pursuant to this clause (vii):

 

(A)          any such newly created or acquired
Subsidiary shall comply with the requirements of Section 5.01(j);

 

(B)           the lines of business of the Person
to be (or the property and assets of which are to be) so purchased or otherwise
acquired shall be (a) substantially the same lines of business as, or (b) lines
of business complementary to, one or more of the principal businesses of BMCA and
its Subsidiaries in the ordinary course;

 

(C)           such purchase or other acquisition
shall not include or result in any contingent liabilities that could reasonably
be expected to result in a Material Adverse Change (as determined in good faith
by the board of directors (or the persons performing similar functions) of BMCA
or such Subsidiary if the board of directors is otherwise approving such
transaction;

 

(D)          (1) immediately before and
immediately after giving pro forma
effect to any such Permitted Acquisition, no Default or Event of Default shall
have occurred and be continuing, (2) immediately after giving effect to
such purchase or other acquisition, the Available Liquidity (as certified to
the Administrative Agent by a Responsible Financial Officer of BMCA) shall
equal or exceed the Specified Liquidity Amount, and (3) BMCA and its
Subsidiaries shall be in pro forma  compliance with the covenant set
forth in Section 5.04, if applicable (each of (1), (2) and (3) above to be
determined on the basis of the required financial information most recently
delivered to the Administrative Agent and the Lender Parties as though such
purchase or other acquisition had been consummated as of the first day of the
fiscal period covered thereby); and

 

(E)           BMCA shall have delivered to the
Administrative Agent, on behalf of the Lender Parties, at least three Business
Days prior to the date on which any such purchase or other acquisition is to be
consummated, a certificate of a Responsible Officer, in form and 

 

88

 

substance reasonably satisfactory to the
Administrative Agent, certifying that all of the requirements set forth in this
clause (vii) have been satisfied or will be satisfied on or prior to the
consummation of such Permitted Acquisition;

 

provided, however, that the property and
assets so purchased or acquired shall not be considered to be Eligible
Collateral until so determined by the Administrative Agent and the Collateral
Monitoring Agent after the performance of due diligence with results reasonably
satisfactory to the Administrative Agent and the Collateral Monitoring Agent
applying their customary criteria for determining eligibility;

 

(viii)        Investments in any “strategic
alliance” joint marketing arrangement, provided that such Investments do not
exceed $10,000,000 in the aggregate for any Fiscal Year;

 

(ix)           (a) Investments
consisting of Initial G-I Holdings Letters of Credit or substitutions thereof
(as described in, and subject to Section 5.02(g)) and (b) subject to Section
5.02(g), Investments consisting of Future G-I Letters of Credit and renewals
thereof;

 

(x)            So long as the
provisions of Section 5.02(g) are satisfied (determined as if such Investment
were a payment, dividend or distribution described in Section 5.02(g)), Investments
(other than Investments described in clause (ix) above) in G-I Holdings and
BMCA Holdings; and

 

(xi)           The purchase of the
remaining outstanding shares of Elk pursuant to the Merger or otherwise.

 

(g)           Restricted Payments. Declare
or pay any dividends, purchase, redeem, retire, defease or otherwise acquire
for value any of its Equity Interests now or hereafter outstanding, return any
capital to its stockholders, partners or members (or the equivalent Persons
thereof) as such, make any distribution of assets, Equity Interests,
obligations or securities to its stockholders, partners or members (or the
equivalent Persons thereof) as such or issue or sell any Equity Interests, or
permit any of its Subsidiaries to do any of the foregoing, or permit any of its
Subsidiaries to purchase, redeem, retire, defease or otherwise acquire for
value any Equity Interests in BMCA or to issue or sell any Equity Interests
therein, except that, so long as no Event of Default shall have occurred and be
continuing at the time of any action described below or would result therefrom:

 

(i)            BMCA may declare
and pay dividends and distributions payable only in common stock of BMCA;

 

(ii)           any Subsidiary of
BMCA may (A) declare and pay cash dividends to BMCA, (B) declare and
pay cash dividends to any other wholly owned Subsidiary of BMCA of which it is
a Subsidiary, and (C) accept capital contributions from its parent to the
extent permitted under Section 5.02(f);

 

89

 

(iii)          so long as
(a) both at the time of such payment, dividend or other distribution and
after giving pro forma effect thereto, no Default or Event of Default has
occurred and is continuing, and (b) after giving effect to such payment,
dividend or other distribution, the Available Liquidity (as certified to the
Administrative Agent by a Responsible Financial Officer of BMCA) shall equal or
exceed (i) so long
as, substantially simultaneously with such payment, dividend or other distribution,
a loan or contribution in an equal amount is made to BMCA, $25,000,000
or (ii) otherwise, the Specified Liquidity Amount (to be determined on the
basis of the required financial information most recently delivered to the
Administrative Agent and the Lender Parties as though such payment, dividend or
other distribution had been made as of the first day of the fiscal period
covered thereby), BMCA shall be permitted to make payments, dividends or other
distributions to G-I Holdings and BMCA Holdings Corporation in any calendar
year, and

 

(iv)          Investments
consisting of the Initial G-I Holdings Letters of Credit, or any substitution
of such Initial G-I Holdings Letter of Credit (simultaneously with the
cancellation, expiration or other termination of such Initial G-I Holdings
Letter of Credit) for a contribution of cash or the posting of a bond or
similar instrument by any Loan Party solely to the extent that cash, bond or
similar instrument is used to secure payment for the same obligation (and for the
benefit of the same beneficiary) as such Initial G-I Holdings Letter of Credit
so substituted.

 

(h)           Amendments of Constitutive
Documents. Amend, or permit any of its Subsidiaries to amend, its
certificate of incorporation or bylaws or other constitutive documents other
than amendments that could not be reasonably expected to have a Material
Adverse Effect.

 

(i)            Accounting Changes. Make or
permit, or permit any of its Subsidiaries to make or permit, any change in
(i) accounting policies or reporting practices, except as required or
permitted by generally accepted accounting principles, or (ii) such Person’s
Fiscal Year.

 

(j)            Prepayments, Etc., of Debt. Prepay,
redeem, purchase, defease, exchange or otherwise satisfy prior to the scheduled
maturity thereof in any manner, or make any payment in violation of any
subordination terms of, any Debt (each, a “prepayment”), except (i) the
prepayment of the Advances in accordance with the terms of this Agreement, (ii)
the mandatory prepayment of Debt under the Term Loan Facility in accordance
with the terms thereof, (iii) the repayment of Debt under the Bridge Loan
Facility with the proceeds of the issuance of the Senior Notes and the
mandatory prepayment of Debt under the Bridge Loan Facility in accordance with
the terms thereof, (iv) after the consummation of the Merger, prepayment of any
Debt of Elk or any of its Subsidiaries, (v) prepayment of the respective Debt
with proceeds of a refinancing of such Debt permitted under Section 5.02(b),
(vi) regularly scheduled or required repayments or redemptions of Surviving
Debt, and (vii) so long as, in each case, both at the time of such payment and
after giving pro forma effect thereto, (x) no Default or Event of Default shall
have occurred and be continuing, and (y) after giving effect to such
transaction, the Available Liquidity (as certified to the Administrative Agent
by a Responsible Financial Officer of BMCA) shall equal or exceed (A) in the
case of any prepayment of Debt owing to G-I Holdings or BMCA Holdings Corporation,
$25,000,000 or (B) otherwise, the Specified Liquidity Amount, prepayment of any
Debt (“Permitted Debt Repurchases”);
or, if the Loan Parties, the 

 

90

 

Administrative Agent or the Lenders will be materially and adversely
affected thereby, amend, modify or change in any material manner any term or
condition of any Surviving Debt or Subordinated Debt, or permit any of its
Subsidiaries to do any of the foregoing other than to prepay any Debt payable
to BMCA or any other Loan Party.

 

(k)           Amendment, Etc., of the Tax
Agreement. Except to the extent such action could not reasonably be
expected to result in a Material Adverse Effect, cancel or terminate the Tax
Agreement or consent to or accept any cancellation or termination thereof,
amend, modify or change in any manner any term or condition of any the Tax
Agreement or give any consent, waiver or approval thereunder, waive any default
under or any breach of any term or condition of the Tax Agreement, agree in any
manner to any other amendment, modification or change of any term or condition
of the Tax Agreement or take any other action in connection with the Tax
Agreement that would impair the value of the interest or rights of any Loan
Party thereunder or that would impair the rights or interests of any Agent or
any Lender Party, or permit any of its Subsidiaries to do any of the foregoing.

 

(l)            Negative Pledge. Enter into
or suffer to exist, or permit any of its Subsidiaries to enter into or suffer
to exist, any agreement prohibiting or conditioning the creation or assumption
of any Lien upon any of its property or assets except (i) in favor of the
Secured Parties or (ii) in connection with (A) any Surviving Debt, or
(B) the Term Loan Facility or (C) the Senior Notes Indenture, or
(D) the Bridge Loan Facility, (E) any purchase money Debt permitted by
Section 5.02(b)(iii)(B) solely to the extent that the agreement or
instrument governing such Debt prohibits a Lien on the property acquired with
the proceeds of such Debt, or (F) any Capitalized Lease permitted by
Section 5.02(b)(iii)(B) solely to the extent that such Capitalized Lease
prohibits a Lien on the property subject thereto.

 

(m)          Partnerships, Etc. Become a
general partner in any general or limited partnership or joint venture, or
permit any of its Subsidiaries to do so, other than any Subsidiary the sole
assets of which consist of its interest in such partnership or joint venture.

 

(n)           Speculative Transactions. Engage,
or permit any of its Subsidiaries to engage, in any transaction involving
commodity options or futures contracts or any similar speculative transactions.

 

(o)           Capital Expenditures. Make, or
permit any of its Subsidiaries to make, any Capital Expenditures that would
cause the aggregate of all such Capital Expenditures made by BMCA and its
Subsidiaries, in any calendar year commencing with calendar year 2007, to
exceed the sum of (A) in calendar year 2007, $125,000,000, and in each calendar
year thereafter, $150,000,000 (the “Base CAPEX Basket”), plus
(B) in each calendar year the amount
(if any) of the Base CAPEX Basket which was not used during any preceding
calendar year up to a maximum carry-over under this clause (B) of $75,000,000
plus (C) in each calendar year, such additional amount that after giving effect
to such Capital Expenditure made pursuant to this clause (C), the Available
Liquidity shall equal or exceed the Specified Liquidity Amount.

 

(p)           Formation of Subsidiaries. Organize
or invest, or permit any of its Subsidiaries to organize or invest, in any new
Subsidiary except as permitted under Section 5.02(f).

 

91

 

(q)           Payment Restrictions Affecting
Subsidiaries. Directly or indirectly, enter into or suffer to exist, or
permit any of its Subsidiaries to enter into or suffer to exist, any agreement
or arrangement limiting the ability of any of its Subsidiaries to declare or
pay dividends or other distributions in respect of its Equity Interests or
repay or prepay any Debt owed to, make loans or advances to, or otherwise
transfer assets to or invest in, BMCA or any Subsidiary of BMCA (whether
through a covenant restricting dividends, loans, asset transfers or
investments, a financial covenant or otherwise), except (i) the Loan
Documents, (ii) the Term Loan Facility, (iii) the Senior Notes Indenture, (iv)
the Bridge Loan Facility and (v) any agreement or instrument evidencing
Surviving Debt.

 

(r)            Amendment, Etc., of Material
Contracts. Except to the extent such action could not reasonably be expected
to result in a Material Adverse Effect, cancel or terminate any Material
Contract or consent to or accept any cancellation or termination thereof, amend
or otherwise modify any Material Contract or give any consent, waiver or
approval thereunder, waive any default under or breach of any Material
Contract, agree in any manner to any other amendment, modification or change of
any term or condition of any Material Contract or take any other action in
connection with any Material Contract that would impair the value of the
interest or rights of any Loan Party thereunder or that would impair the
interest or rights of any Agent or any Lender Party, or permit any of its
Subsidiaries to do any of the foregoing.

 

(s)           Hedge Agreements. Become a
party to any Hedge Agreements other than non-speculative Hedge Agreements
entered into in the ordinary course of business and consistent with prudent
business practice to hedge against fluctuations in interest rates, commodity
prices and foreign exchange rates.

 

SECTION 5.03.      Reporting
Requirements. So long as any Advance or any other Obligation of any Loan Party
under any Loan Document shall remain unpaid, any Letter of Credit shall be
outstanding or any Lender Party shall have any Commitment hereunder, BMCA will
furnish to the Agents and the Lender Parties; provided,
however, that the financial statements
required to be delivered by BMCA pursuant to clauses (b) and (c) below and the
reports and statements required to be delivered by BMCA pursuant to clause (g)
below shall be deemed to have been delivered on the date on which such reports
containing such financial statements or other materials are posted on the SEC’s
website on the internet at “www.sec.gov”; provided, further, that BMCA shall deliver paper copies of such financial
statements or other materials to any Lender who so requests until BMCA receives
written notice from such Lender to cease delivering paper copies:

 

(a)           Default Notice. As soon as
possible and in any event within two days after the occurrence of each Default
or any event, development or occurrence reasonably likely to have a Material
Adverse Effect continuing on the date of such statement, a statement of the
chief financial officer of BMCA setting forth details of such Default and the
action that BMCA has taken and proposes to take with respect thereto.

 

(b)           Annual Financials. As soon as
available and in any event within 95 days after the end of each Fiscal Year, a
copy of the annual audit report for such year for BMCA and its Subsidiaries,
including therein a Consolidated balance sheet of BMCA and its Subsidiaries as
of the end of such Fiscal Year and a Consolidated statement of income and a
Consolidated statement of cash flows of BMCA and its Subsidiaries for such
Fiscal Year, in each case 

 

92

 

accompanied by an opinion acceptable to the Administrative Agent of
Ernst & Young LLP or other independent public accountants of recognized
standing acceptable to the Administrative Agent, together with (i) a
schedule, certified by a Responsible Financial Officer of BMCA, in form
reasonably satisfactory to the Administrative Agent setting forth (x) the Interest
Coverage Ratio for such Fiscal Year, (y) the Capital Expenditures for such
Fiscal Year, and (z) the computations used by BMCA in determining compliance
with the covenant contained in Section 5.04, when applicable, provided that in the event of any change
in generally accepted accounting principles used in the preparation of such
financial statements, BMCA shall also provide, if necessary for the
determination of any of (w), (x), (y) or (z) above, a statement of
reconciliation conforming such financial statements to GAAP and (ii) a
certificate of a Responsible Financial Officer of BMCA stating that no Event of
Default has occurred and is continuing or, if an Event of Default has occurred
and is continuing, a statement as to the nature thereof and the action that BMCA
has taken and proposes to take with respect thereto.

 

(c)           Quarterly Financials. As soon
as available and in any event within 50 days after the end of each of the first
three quarters of each Fiscal Year (i) so long as BMCA is a reporting
company under the Securities Act of 1934, as amended (a “Reporting Company”), a copy
of BMCA’s Form 10-Q filed with the Securities and Exchange Commission for
each such fiscal quarter and (ii) if BMCA is not a Reporting Company at
such time, then BMCA shall provide to the Administrative Agent the unaudited Consolidated
balance sheet of BMCA and its Subsidiaries at the end of such quarter and the
related unaudited Consolidated statements of income and of cash flows for such
quarter and the portion of the Fiscal Year through end of such fiscal quarter,
setting forth in each case in comparative form the figures as of the end of and
for the corresponding period in the previous Fiscal Year, in each case duly
certified (subject to normal year-end audit adjustments) by a Responsible
Financial Officer of BMCA as having been prepared in accordance with GAAP,
together with (1) a certificate of said officer stating that no Event of
Default has occurred and is continuing or, if an Event of Default has occurred
and is continuing, a statement as to the nature thereof and the action that BMCA
has taken and proposes to take with respect thereto, and (2) a schedule to such
certificate in form reasonably satisfactory to the Administrative Agent setting
forth (y) the Interest Coverage Ratio for the four fiscal quarters of BMCA
ending on the last day of such fiscal quarter, and (z) the computations
used by BMCA in determining compliance with the covenant contained in
Section 5.04, when applicable, provided
that in the event of any change in generally accepted accounting principles
used in the preparation of such financial statements, BMCA shall also provide,
if necessary for the determination of any of (x), (y) or (z) above, a statement
of reconciliation conforming such financial statements to GAAP.

 

(d)           Monthly Financials. As soon as
available and in any event within (i) 45 days after the end of each of the
first three quarters of each Fiscal Year, (ii) 60 days after the end of the
last quarter of each Fiscal Year, and (iii) 30 days after the end of each
other fiscal month of BMCA, a Consolidated balance sheet of BMCA and its
Subsidiaries as of the end of such month and a Consolidated statement of income
and a Consolidated statement of cash flows of BMCA and its Subsidiaries for the
period commencing at the end of the previous month and ending with the end of
such month and a Consolidated statement of income and a Consolidated statement
of cash flows of BMCA and its Subsidiaries for the period commencing at the end
of the previous Fiscal Year and ending with the end of such month, setting
forth in each case in 

 

93

 

comparative form the corresponding figures for the corresponding month
of the preceding Fiscal Year, all in reasonable detail and duly certified by a Responsible
Financial Officer of BMCA.

 

(e)           Business Plans and Annual
Forecasts. As soon as available and in any event not later than 90 days
after the end of each Fiscal Year, an annual business plan and forecasts
prepared by management of BMCA, in form satisfactory to the Administrative
Agent, of balance sheets, income statements and cash flow statements and
projected borrowing base availability on a monthly basis for the Fiscal Year
immediately following such Fiscal Year, together with narratives outlining the
material operating, investing and financing assumptions incorporated in such
forecasts.

 

(f)            Tax and Asbestos Litigation
Reports. Promptly upon the occurrence of a material event in connection
with (i) any tax proceeding involving, or any Federal income tax
liability, contingent or actual, of BMCA, any Loan Party, or any other member
of the G-I Holdings Tax Group, in connection with or arising out of the Rhone
Poulenc Transactions and (ii) asbestos litigation involving BMCA or any of
its Subsidiaries, provide a summary in form and substance reasonably
satisfactory to the Administrative Agent of such event.

 

(g)           Litigation. Promptly after BMCA
becomes aware of the commencement thereof, notice of all actions, suits,
investigations, litigation and proceedings before any Governmental Authority
affecting any Loan Party or any of its Subsidiaries of the type described in
Section 4.01(f), and promptly after the occurrence thereof, notice of any
material adverse change in the status or the financial effect on any Loan Party
or any of its Subsidiaries of the Disclosed Litigation from that described on
Schedule 4.01(f) hereto.

 

(h)           Securities Reports. Promptly
after the sending or filing thereof, copies of all proxy statements, financial
statements and reports that any Loan Party or any of its Subsidiaries sends to
its stockholders and are publicly available, and copies of all regular,
periodic and special reports, and all registration statements, that any Loan
Party or any of its Subsidiaries files with the Securities and Exchange
Commission or any governmental authority that may be substituted therefor, or
with any national securities exchange.

 

(i)            Creditor Reports. Promptly
after the furnishing thereof, copies of any statement or report furnished to
any holder of Debt securities of any Loan Party or of any of its Subsidiaries
pursuant to the terms of any indenture, loan or credit or similar agreement and
not otherwise required to be furnished to the Lender Parties pursuant to any
other clause of this Section 5.03.

 

(j)            ERISA. (i)  ERISA
Events and ERISA Reports. (A) Promptly and in any event within 10 days
after any Loan Party or any ERISA Affiliate knows or has reason to know that
any ERISA Event has occurred, a statement of the Chief Financial Officer of BMCA
describing such ERISA Event and the action, if any, that such Loan Party or
such ERISA Affiliate has taken and proposes to take with respect thereto and
(B) on the date any records, documents or other information must be
furnished to the PBGC with respect to any Plan pursuant to Section 4010 of
ERISA, a copy of such records, documents and information.

 

94

 

(ii)           Plan
Terminations. Promptly and in any event within two Business Days after
receipt thereof by any Loan Party or any ERISA Affiliate, copies of each notice
from the PBGC stating its intention to terminate any Plan or to have a trustee
appointed to administer any Plan.

 

(iii)          Multiemployer
Plan Notices. Promptly and in any event within five Business Days after
receipt thereof by any Loan Party or any ERISA Affiliate from the sponsor of a
Multiemployer Plan, copies of each notice concerning (A) the imposition of
Withdrawal Liability by any such Multiemployer Plan, (B) the
reorganization or termination, within the meaning of Title IV of ERISA, of
any such Multiemployer Plan or (C) the amount of liability incurred, or
that may be incurred, by such Loan Party or any ERISA Affiliate in connection
with any event described in clause (A) or (B).

 

(k)           Environmental Conditions. Promptly
after the assertion or occurrence thereof, notice of (i) any Environmental
Action against or of any noncompliance by any Loan Party or any of its
Subsidiaries with any Environmental Law or Environmental Permit that could
reasonably be expected to have a Material Adverse Effect; or (ii) any
other matter or occurrence that may impact the number, scope, import or
substance of any Environmental Approval Action or the underlying circumstances
thereof.

 

(l)            Borrowing Base Certificate. A Borrowing Base Certificate (i) on the first
Business Day of each week, as at the last Business Day of the immediately
preceding week (x) at any time that the Available Liquidity is less than the
Specified Liquidity Amount or (y) at the option of BMCA; or (ii) if neither
clause (i)(x) or clause (i)(y) applies, no later than the seventh Business Day
of each month, as at the last Business Day of the immediately preceding month.

 

(m)          Access for Field Examinations. Provide
representatives of the Collateral Monitoring Agent sufficient access to the
properties and offices of BMCA and its Subsidiaries for such representatives to
conduct, at BMCA’s expense, (a) on or before the end of each fiscal quarter of BMCA,
a field examination and (b) from time to time, inventory appraisals.

 

(n)           Other Information. Such other
information respecting the business, properties, condition (financial or
otherwise) or operations of any Loan Party or any of its Subsidiaries as the
Administrative Agent, or any Lender Party through the Administrative Agent, may
from time to time reasonably request, including as referred to in clause (ii)
of the definition of Secured Hedge Agreement.

 

SECTION 5.04.      Financial
Covenant. So long as any Advance or any other Obligation of any Loan Party
under any Loan Document shall remain unpaid, any Letter of Credit shall be
outstanding or any Lender Party shall have any Commitment hereunder, BMCA
shall, if the Available Liquidity at any time during a fiscal quarter of BMCA
has been less than (a) the Specified Liquidity Amount for three consecutive
Business Days or (b) the greater of (i) $45,000,000 and (ii) the amount equal
to 7.5% of the aggregate Revolving Credit Commitment on any Business Day,
maintain an Interest Coverage Ratio for the most recently ended four fiscal
quarters of BMCA for which financial statements were required to be delivered
in accordance with Section 5.03(b) or (c), as applicable, of not less than the
minimum ratio set forth below opposite the reference to the last day of such
four fiscal quarters:  

 

95

 

	
  Fiscal Quarter Ending

  	
   

  	
  Minimum Interest

  Coverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  First Fiscal
  Quarter in Fiscal Year 2007

  	
   

  	
  1.75 to 1

  	
   

  
	
  Second Fiscal
  Quarter in Fiscal Year 2007

  	
   

  	
  1.75 to 1

  	
   

  
	
  Third Fiscal
  Quarter in Fiscal Year 2007

  	
   

  	
  1.75 to 1

  	
   

  
	
  Fourth Fiscal
  Quarter in Fiscal Year 2007

  	
   

  	
  1.75 to 1

  	
   

  
	
  First Fiscal
  Quarter in Fiscal Year 2008

  	
   

  	
  1.75 to 1

  	
   

  
	
  Second Fiscal
  Quarter in Fiscal Year 2008

  	
   

  	
  2.00 to 1

  	
   

  
	
  Third Fiscal
  Quarter in Fiscal Year 2008

  	
   

  	
  2.00 to 1

  	
   

  
	
  Fourth Fiscal
  Quarter in Fiscal Year 2008

  	
   

  	
  2.00 to 1

  	
   

  
	
  First Fiscal
  Quarter in Fiscal Year 2009

  	
   

  	
  2.25 to 1

  	
   

  
	
  Second Fiscal
  Quarter in Fiscal Year 2009

  	
   

  	
  2.50 to 1

  	
   

  
	
  Third Fiscal
  Quarter in Fiscal Year 2009

  	
   

  	
  2.50 to 1

  	
   

  
	
  Fourth Fiscal
  Quarter in Fiscal Year 2009

  	
   

  	
  2.75 to 1

  	
   

  
	
  First Fiscal
  Quarter in Fiscal Year 2010

  	
   

  	
  2.75 to 1

  	
   

  
	
  Second Fiscal Quarter
  in Fiscal Year 2010

  	
   

  	
  2.75 to 1

  	
   

  
	
  Third Fiscal
  Quarter in Fiscal Year 2010 and each Fiscal Quarter thereafter

  	
   

  	
  3.00 to 1

  	
   

  

 

ARTICLE VI

EVENTS OF DEFAULT

 

SECTION 6.01.      Events
of Default. If any of the following events (“Events
of Default”) shall occur and be continuing:

 

(a)           (i) any Borrower shall fail to
pay any principal of any Advance when the same shall become due and payable or
(ii) any Borrower shall fail to pay any interest on any Advance, or any
Loan Party shall fail to make any other payment under any Loan Document when
due and payable; or

 

(b)           any representation or warranty made
by any Loan Party (or any of its officers) under or in connection with any Loan
Document shall prove to have been incorrect in any material respect when made;
or

 

(c)           any Borrower shall fail to perform or
observe any term, covenant or agreement contained in Section 2.14,
5.01(e), (f), (i) or (j), 5.02, 5.03(a), (b), (c), (d) or (j) or 5.04; or

 

(d)           any Loan Party shall fail to perform
or observe any other term, covenant or agreement contained in any Loan Document
on its part to be performed or observed if such failure shall remain unremedied
for 15 days after the earlier of the date on which (i) a Responsible
Officer becomes aware of such failure or (ii) written notice thereof shall
have been given to BMCA by any Agent or any Lender Party; or

 

96

 

(e)           any Loan Party or any of its
Subsidiaries shall fail to pay any principal of, premium or interest on or any
other amount payable in respect of any Debt of such Loan Party or such
Subsidiary (as the case may be) that is outstanding in a principal amount of at
least $37,500,000 either individually or in the aggregate for all such Loan
Parties and Subsidiaries (but excluding Debt outstanding hereunder), when the
same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; or any other event shall occur or condition
shall exist under any agreement or instrument relating to any such Debt and
shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Debt or
otherwise to cause, or to permit the holder thereof to cause, such Debt to
mature; or any such Debt shall be declared to be due and payable or required to
be prepaid or redeemed (other than by a regularly scheduled required prepayment
or redemption), purchased or defeased, or an offer to prepay, redeem, purchase
or defease such Debt shall be required to be made, in each case prior to the
stated maturity thereof; or

 

(f)            any Loan Party or any of its
Subsidiaries shall generally not pay its debts as such debts become due, or
shall admit in writing its inability to pay its debts generally, or shall make
a general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against any Loan Party or any of its Subsidiaries seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee or other similar official for
it or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it) that is being
diligently contested by it in good faith, either such proceeding shall remain
undismissed or unstayed for a period of 60 days or any of the actions sought in
such proceeding (including the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar official for, it
or any substantial part of its property) shall occur; or any Loan Party or any
of its Subsidiaries shall take any corporate action to authorize any of the
actions set forth above in this subsection (f); or

 

(g)           any judgments or orders (other than
in respect of the alleged Federal income tax liabilities of BMCA relating to or
arising out of the Rhone Poulenc Transactions or relating to the alleged
asbestos liabilities of BMCA), either individually or in the aggregate, for the
payment of money in excess of $37,500,000 shall be rendered against any Loan
Party or any of its Subsidiaries and either (i) enforcement proceedings
shall have been commenced by any creditor upon such judgment or order or
(ii) there shall be any period of 15 consecutive days during which a stay
of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; provided,
however, that any such judgment
or order shall not give rise to an Event of Default under this
Section 6.01(g) if and for so long as (A) the amount of such judgment
or order is covered by a valid and binding policy of insurance between the
defendant and the insurer, which shall be rated at least “A” by A.M. Best
Company, covering full payment thereof and (B) such insurer has been
notified, and has not disputed the claim made for payment, of the amount of
such judgment or order; or

 

97

 

(h)           after the date hereof (i) any court
or governmental agency determines a tax liability or otherwise issues any
adverse ruling addressing the merits, proposes to or actually enters a
stipulated settlement or settlement notice, or makes or provides any
assessment, notice of intent to file a lien, or lien filing against any member
of the G-I Holdings Tax Group or any Loan Party with respect to the Rhone
Poulenc Transactions, and there shall be a period of 20 consecutive days after
the taking of such action during which time the Super Majority Lenders shall
not have determined that there shall not exist, because of such action, a
reasonable likelihood that one or more of the Loan Parties will pay, satisfy,
or receive demand for payment of any tax liabilities relating to or arising out
of the Rhone Poulenc Transactions (it being understood that during such 20
consecutive day period the Lender Parties shall not be required to make any
Advances hereunder), or (ii) any court renders a judgment or order against any
Loan Party related to or arising out of the alleged asbestos liabilities of BMCA
and as a result of which it is reasonable to conclude that the Loan Parties
might be liable for such asbestos liabilities (it being understood and agreed that
any adverse ruling by the court in the DJ Action shall not, solely by itself,
constitute an Event of Default under this clause 6.01(h)(ii)); or

 

(i)            any non-monetary judgment or order
shall be rendered against any Loan Party or any of its Subsidiaries that could
be reasonably likely to have a Material Adverse Effect, and there shall be any
period of 20 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or

 

(j)            any provision of any Loan Document
after delivery thereof pursuant to Section 3.01 or 5.01(j) shall for any
reason cease to be valid and binding on or enforceable against any Loan Party
party to it, or any such Loan Party shall so state in writing; or

 

(k)           any Collateral Document or financing
statement after delivery thereof pursuant to Section 3.01 or 5.01(j) shall
for any reason (other than pursuant to or permitted by the terms of any Loan
Document) cease to create a valid and perfected first priority lien subject to
any Liens permitted by Section 5.02 on and security interest in the
Collateral purported to be covered thereby; or

 

(l)            a Change of Control shall occur; or

 

(m)          any ERISA Event shall have occurred
with respect to a Plan and the sum (determined as of the date of occurrence of
such ERISA Event) of the Insufficiency of such Plan and the Insufficiency of
any and all other Plans with respect to which an ERISA Event shall have occurred
and then exist (or the liability of the Loan Parties and the ERISA Affiliates
related to such ERISA Event) exceeds (together with all other liabilities
described in Section 6.01(m), (n), and (o)) $10,000,000 in the aggregate; or

 

(n)           any Loan Party or any ERISA Affiliate
shall have been notified by the sponsor of a Multiemployer Plan that it has
incurred Withdrawal Liability to such Multiemployer Plan in an amount that,
when aggregated with all other amounts required to be paid to Multiemployer Plans
by the Loan Parties and the ERISA Affiliates as Withdrawal Liability
(determined as of the date of such notification), exceeds (together with all
other liabilities described in Section 6.01(m), (n), and (o)) $10,000,000 in
the aggregate; or

 

98

 

(o)          
any Loan Party or any ERISA Affiliate shall have been notified by the sponsor
of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is
being terminated, within the meaning of Title IV of ERISA, and as a result
of such reorganization or termination the aggregate annual contributions of the
Loan Parties and the ERISA Affiliates to all Multiemployer Plans that are then
in reorganization or being terminated have been or will be increased over the
amounts contributed to such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs by an amount exceeding (together with all
other liabilities described in Section 6.01(m), (n), and (o)) $10,000,000 in
the aggregate; or

 

(p)          
any Federal tax Liens in respect of the proposed Federal income tax liabilities
of BMCA or any other member of the G-I Holdings Tax Group relating to or
arising out of the Rhone Poulenc Transactions shall be created and be
enforceable against the assets of any Loan Party; or

 

(q)          
the existing stay of the asbestos-related litigation against BMCA granted in
the G-I Holdings bankruptcy proceedings shall have been terminated or amended
or modified in a manner not reasonably acceptable to the Administrative Agent,
or there shall have occurred a substantive consolidation of G-I Holdings with
the assets and liabilities of BMCA or any of the Guarantors in conjunction with
the G-I Holdings bankruptcy proceedings;

 

then, and in any such event, the Administrative Agent
(i) shall at the request, or may with the consent, of the Required
Lenders, by notice to BMCA, declare the Commitments of each Lender Party and
the obligation of each Lender Party to make Advances (other than Letter of
Credit Advances by the Issuing Bank or a Lender pursuant to
Section 2.03(c) and Swing Line Advances by a Lender pursuant to
Section 2.02(b)) and of the Issuing Bank to issue Letters of Credit to be
terminated, whereupon the same shall forthwith terminate, and (ii) shall
at the request, or may with the consent, of the Required Lenders, (A) by
notice to BMCA, declare the Notes, all interest thereon and all other amounts
payable under this Agreement and the other Loan Documents to be forthwith due
and payable, whereupon the Notes, all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest
or further notice of any kind, all of which are hereby expressly waived by
BMCA, (B) by notice to each party required under the terms of any
agreement in support of which a Standby Letter of Credit is issued, request
that all Obligations under such agreement be declared to be due and payable; provided,
however, that in the event of an actual or deemed entry of an order
for relief with respect to BMCA under the Federal Bankruptcy Code, (x) the
Commitments of each Lender Party and the obligation of each Lender Party to
make Advances (other than Letter of Credit Advances by the Issuing Bank or a
Lender pursuant to Section 2.03(c) and Swing Line Advances by a Lender
pursuant to Section 2.02(b)) and of the Issuing Bank to issue Letters of
Credit shall automatically be terminated and (y) the Notes, all such
interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by BMCA.

 

               
SECTION 6.02.      Actions in Respect of the
Letters of Credit upon Default. If any Event of Default shall have occurred and
be continuing, the Administrative Agent may, or shall at the request of the
Required Lenders, irrespective of whether it is taking any of the actions
described in Section 6.01 or otherwise, make demand upon any Borrower to,
and forthwith upon such 

 

 

99

 

demand such Borrower will, pay to the Collateral
Monitoring Agent on behalf of the Lender Parties in same day funds at the
Collateral Monitoring Agent’s office designated in such demand, for deposit in
the L/C Collateral Account, an amount equal to the aggregate Available Amount
of all Letters of Credit then outstanding. If at any time the Administrative
Agent determines that any funds held in the L/C Collateral Account are subject
to any right or claim of any Person other than the Agents and the Lender
Parties or that the total amount of such funds is less than the aggregate
Available Amount of all Letters of Credit, such Borrower will, forthwith upon
demand by the Administrative Agent, pay to the Collateral Monitoring Agent, as
additional funds to be deposited and held in the L/C Collateral Account, an
amount equal to the excess of (a) such aggregate Available Amount over
(b) the total amount of funds, if any, then held in the L/C Collateral
Account that the Administrative Agent determines to be free and clear of any
such right and claim. 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, to the extent permitted
by applicable law.

 

ARTICLE VII

THE AGENTS

 

               
SECTION 7.01.      Authorization and Action. Each
Lender Party (in its capacities as a Lender, the Swing Line Bank (if
applicable), and the Issuing Bank (if applicable)) hereby appoints and
authorizes each Agent to enter into such of the Loan Documents to which it is a
party and to take such action as agent on its behalf and to exercise such
powers and discretion under this Agreement and the other Loan Documents as are
delegated to such Agent by the terms hereof and thereof, together with such
powers and discretion as are reasonably incidental thereto. As to any matters
not expressly provided for by the Loan Documents (including enforcement or
collection of the Notes), no Agent shall be required to exercise any discretion
or take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Required Lenders, and such instructions shall be binding
upon all Lender Parties and all holders of Notes; provided, however,
that no Agent shall be required to take any action that exposes such Agent to
personal liability or that is contrary to this Agreement or applicable law.
Each Agent agrees to give to each Lender Party prompt notice of each notice
given to it by any Borrower pursuant to the terms of this Agreement.

 

               
SECTION 7.02.      Agents’ Reliance, Etc. Neither
any Agent nor any of their respective directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with the Loan Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, each Agent:  (a) may treat the payee of any Note as the
holder thereof until, in the case of the Administrative Agent, the
Administrative Agent receives and accepts an Assignment and Acceptance entered
into by the Lender that is the payee of such Note, as assignor, and an Eligible
Assignee, as assignee, or, in the case of any other Agent, such Agent has
received notice from the Administrative Agent that it has received and accepted
such Assignment and Acceptance, in each case as provided in Section 8.07;
(b) may consult with legal counsel (including counsel for any Loan Party),
independent public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts;
(c) makes no warranty or representation to any Lender Party and 

 

100

 

shall not be responsible to any Lender Party for any
statements, warranties or representations (whether written or oral) made in or
in connection with the Loan Documents; (d) shall not have any duty to
ascertain or to inquire as to the performance, observance or satisfaction of
any of the terms, covenants or conditions of any Loan Document on the part of
any Loan Party or the existence at any time of any Default under the Loan
Documents or to inspect the property (including the books and records) of any
Loan Party; (e) shall not be responsible to any Lender Party for the due
execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with, any Loan
Document or any other instrument or document furnished pursuant thereto; and
(f) shall incur no liability under or in respect of any Loan Document by
acting upon any notice, consent, certificate or other instrument or writing (which
may be by telecopy) believed by it to be genuine and signed or sent by the
proper party or parties.

 

               
SECTION 7.03.      DBNY and Affiliates. With
respect to its Commitments, the Advances made by it and the Notes issued to it,
DBNY shall have the same rights and powers under the Loan Documents as any
other Lender Party and may exercise the same as though it were not an Agent;
and the term “Lender Party” or “Lender Parties” shall, unless otherwise
expressly indicated, include DBNY in its individual capacity as such. DBNY and
its affiliates may accept deposits from, lend money to, act as trustee under
indentures of, accept investment banking engagements from and generally engage
in any kind of business with, any Loan Party, any of its Subsidiaries and any
Person that may do business with or own securities of any Loan Party or any
such Subsidiary, all as if DBNY was not an Agent and without any duty to
account therefor to the Lender Parties. No Agent shall have any duty to
disclose any information obtained or received by it or any of its Affiliates
relating to any Loan Party or any of its Subsidiaries to the extent such
information was obtained or received in any capacity other than as such Agent.

 

               
SECTION 7.04.      Lender Party Credit Decision.
Each Lender Party acknowledges that it has, independently and without reliance
upon any Agent or any other Lender Party and based on the financial statements
referred to in Section 4.01 and such other documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender Party also acknowledges that it will, independently
and without reliance upon any Agent or any other Lender Party and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.

 

               
SECTION 7.05.      Indemnification. (a) 
Each Lender Party severally agrees to indemnify each Agent (to the extent not
promptly reimbursed by the Borrowers) from and against such Lender Party’s
ratable share (determined as provided below) of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against such Agent in any way relating to or
arising out of the Loan Documents or any action taken or omitted by such Agent
under the Loan Documents (collectively, the “Indemnified Costs”); provided,
however, that no Lender Party shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from such Agent’s gross negligence
or willful misconduct. Without limitation of the foregoing, each Lender Party
agrees to reimburse each Agent promptly upon demand for its ratable share of
any costs and expenses (including fees and expenses of counsel) payable by the
Borrowers under Section 8.04, to the 

 

101

 

extent that such Agent is not promptly reimbursed for
such costs and expenses by the Borrowers. In the case of any investigation,
litigation or proceeding giving rise to any Indemnified Costs, this
Section 7.05 applies whether any such investigation, litigation or
proceeding is brought by any Lender Party or any other Person.

 

(b)          
Each Lender Party severally agrees to indemnify the Issuing Bank (to the extent
not promptly reimbursed by the Borrowers) from and against such Lender Party’s
ratable share (determined as provided below) of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against the Issuing Bank in any way relating to or
arising out of the Loan Documents or any action taken or omitted by the Issuing
Bank under the Loan Documents; provided, however, that no Lender Party shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Issuing Bank’s gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender Party agrees to reimburse the
Issuing Bank promptly upon demand for its ratable share of any costs and
expenses (including fees and expenses of counsel) payable by the Borrowers
under Section 8.04, to the extent that the Issuing Bank is not promptly
reimbursed for such costs and expenses by the Borrowers.

 

(c)          
For purposes of this Section 7.05, the Lender Parties’ respective ratable
shares of any amount shall be determined, at any time, according to the sum of
(i) the aggregate principal amount of the Advances outstanding at such
time and owing to the respective Lender Parties, (ii) their respective Pro
Rata Shares of the aggregate Available Amount of all Letters of Credit
outstanding at such time, and (iii) their respective Unused Revolving
Credit Commitments at such time; provided
that 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 shall be
considered to be owed to the Lenders ratably in accordance with their
respective Revolving Credit Commitments. The failure of any Lender Party to
reimburse any Agent or the Issuing Bank, as the case may be, promptly upon
demand for its ratable share of any amount required to be paid by the Lender
Parties to such Agent or the Issuing Bank, as the case may be, as provided
herein shall not relieve any other Lender Party of its obligation hereunder to
reimburse such Agent or the Issuing Bank, as the case may be, for its ratable
share of such amount, but no Lender Party shall be responsible for the failure
of any other Lender Party to reimburse such Agent or the Issuing Bank, as the
case may be, for such other Lender Party’s ratable share of such amount.
Without prejudice to the survival of any other agreement of any Lender Party
hereunder, the agreement and obligations of each Lender Party contained in this
Section 7.05 shall survive the payment in full of principal, interest and
all other amounts payable hereunder and under the other Loan Documents.

 

               
SECTION 7.06.      Successor Agents. Any Agent
may resign at any time by giving written notice thereof to the Lender Parties
and BMCA and may be removed at any time with or without cause by the Required
Lenders; provided, however, that any removal of the
Administrative Agent will not be effective until it has also been replaced as
Collateral Monitoring Agent, Swing Line Bank and Issuing Bank and released from
all of its obligations in respect thereof (other than obligations resulting
from its gross negligence or willful misconduct). Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required
Lenders, and shall have accepted such 

 

102

 

appointment, within 30 days after the retiring Agent’s
giving of notice of resignation or the Required Lenders’ removal of the
retiring Agent, then the retiring Agent may, on behalf of the Lender Parties,
appoint a successor Agent, which shall be a commercial bank organized under the
laws of the United States or of any State thereof and having a combined capital
and surplus of at least $250,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent and, in the case of a successor Collateral
Monitoring Agent, upon the execution and filing or recording of such financing
statements, or amendments thereto, and such other instruments or notices, as
may be necessary or desirable, or as the Required Lenders may request, in order
to continue the perfection of the Liens granted or purported to be granted by
the Collateral Documents, such successor Agent shall succeed to and become
vested with all the rights, powers, discretion, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under the Loan Documents (other than duties and obligations
resulting from its gross negligence or willful misconduct). If within 45 days
after written notice is given of the retiring Agent’s resignation or removal
under this Section 7.06, no successor Agent shall have been appointed and
shall have accepted such appointment, then on such 45th day
(a) the retiring Agent’s resignation or removal shall become effective,
(b) the retiring Agent shall thereupon be discharged from its duties and
obligations under the Loan Documents (other than duties and obligations
resulting from its gross negligence or willful misconduct) and (c) the
Required Lenders shall thereafter perform all duties of the retiring Agent
under the Loan Documents until such time, if any, as the Required Lenders
appoint a successor Agent as provided above. After any retiring Agent’s
resignation or removal hereunder as Agent shall have become effective, the
provisions of this Article VII shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.

 

               
SECTION 7.07.      Appointment of Supplemental
Collateral Monitoring Agents. (a)  It is the purpose of this
Agreement and the other Loan Documents that there shall be no violation of any
law of any jurisdiction denying or restricting the right of banking
corporations or associations to transact business as agent or trustee in such
jurisdiction. It is recognized that in case of litigation under this Agreement
or any of the other Loan Documents, and in particular in case of the
enforcement of any of the Loan Documents, or in case the Administrative Agent
deems that by reason of any present or future law of any jurisdiction it may
not exercise any of the rights, powers or remedies granted herein or in any of
the other Loan Documents or take any other action which may be desirable or
necessary in connection therewith, it may be necessary that the Administrative
Agent appoint an additional individual or institution as a separate trustee,
co-trustee, collateral monitoring agent, collateral agent, collateral sub-agent
or collateral co-agent (any such additional individual or institution being
referred to herein individually as a “Supplemental Collateral Monitoring Agent” and
collectively as “Supplemental
Collateral Monitoring Agents”).

 

(b)          
In the event that the Administrative Agent appoints a Supplemental Collateral
Monitoring Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to the Administrative
Agent with respect to such Collateral shall be exercisable by and vest in such
Supplemental Collateral Monitoring Agent to the extent, and only to the extent,
necessary to enable such Supplemental Collateral Monitoring Agent to exercise
such rights, powers and privileges with respect to such Collateral and to
perform such duties with respect to such Collateral, and every covenant and
obligation contained in the Loan Documents necessary to the exercise or
performance thereof by such Supplemental 

 

103

 

Collateral Monitoring Agent shall
run to and be enforceable by either the Administrative Agent or such
Supplemental Collateral Monitoring Agent, and (ii) the provisions of this
Article and of Section 8.04 that refer to the Administrative Agent shall
inure to the benefit of such Supplemental Collateral Monitoring Agent and all
references therein to the Administrative Agent shall be deemed to be references
to the Administrative Agent and/or such Supplemental Collateral Monitoring
Agent, as the context may require.

 

(c)          
Should any instrument in writing from any Loan Party be reasonably required by
any Supplemental Collateral Monitoring Agent so appointed by the Administrative
Agent for more fully and certainly vesting in and confirming to him or it such
rights, powers, privileges and duties, such Loan Party shall execute,
acknowledge and deliver any and all such instruments promptly upon request by
the Administrative Agent. In case any Supplemental Collateral Monitoring Agent,
or a successor thereto, shall die, become incapable of acting, resign or be
removed, all the rights, powers, privileges and duties of such Supplemental
Collateral Monitoring Agent, to the extent permitted by law, shall vest in and
be exercised by the Administrative Agent until the appointment of a new
Supplemental Collateral Monitoring Agent.

 

               
SECTION 7.08.      The Joint Lead Arrangers, the
Syndication Agent and the Documentation Agent. It is understood and agreed by
all parties hereto that neither the Joint Lead Arrangers, nor the Syndication
Agent, nor the Documentation Agent shall have any rights, powers, duties or
responsibilities in such capacity under this Agreement (nor shall any such
rights, powers, duties or responsibilities be read into this Agreement or any
other Loan Document), and shall have no liability for any actions taken or not
taken in such capacity in connection with this Agreement or the other Loan
Documents.

 

ARTICLE VIII

MISCELLANEOUS

 

               
SECTION 8.01.      Amendments, Etc.
(a)  No amendment or waiver of any provision of this Agreement or the
Notes or any other Loan Document (other than the Loan Documents referred to in
clause (v), (vi), (vii), (viii) and (ix) of the definition thereof which may be
amended by agreement of the parties thereto), nor consent to any departure by
any Loan Party therefrom, shall in any event be effective unless the same shall
be in writing and signed (or, in the case of the Guaranty or Collateral Documents,
consented to) by the Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or
consent shall, unless in writing and signed by the Super Majority Lenders
(other than any Lender Party that is, at such time, a Defaulting
Lender) amend or otherwise modify the definition of “Loan Value” or any
component thereof (including any advance rates included in such definition) so
as to increase the aggregate Loan Value of the Eligible Collateral or any
component of such Loan Value; provided
further, however, that
no amendment, waiver or consent shall, unless in writing and signed by all of
the Lender Parties (other than any Lender Party that is, at such time, a
Defaulting Lender), do any of the following at any time:  (i) waive
any of the conditions specified in Section 3.01 or 3.02 (in the case of
the initial extension of credit), (ii) change the number of Lenders or the
percentage of (x) the Commitments, (y) the aggregate unpaid principal
amount of the Advances or (z) the aggregate Available Amount of outstanding
Letters of Credit that, in each case, shall be required 

 

104

 

for the Lenders or any of them to take any action
hereunder, (iii) reduce or limit the obligations of any Guarantor under
Section 1 of the Guaranty issued by it or release such Guarantor or
otherwise limit such Guarantor’s liability with respect to the Obligations
owing to the Agents and the Lender Parties (other than, in the case of any
Guarantor, to the extent permitted under the Guaranty), (iv) release all
or substantially all of the Collateral in any transaction or series of related
transactions, (v) amend Section 2.13 or this Section 8.01,
(vi) increase the Commitments of the Lenders  (except in
accordance with the provisions of Section 2.17), (vii) reduce the
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, (viii) postpone any date scheduled for any payment of principal
of, or interest on, the Notes pursuant to Section 2.04 or 2.07 or any date
fixed for payment of fees or other amounts payable hereunder, or
(ix) limit the liability of any Loan Party under any of the Loan Documents;
provided further that no
amendment, waiver or consent shall, unless in writing and signed by the Swing
Line Bank or the Issuing Bank, as the case may be, in addition to the Lenders
required above to take such action, affect the rights or obligations of the
Swing Line Bank or of the Issuing Bank, as the case may be, under this
Agreement; and provided further
that no amendment, waiver or consent shall, unless in writing and signed by an
Agent in addition to the Lenders required above to take such action, affect the
rights or duties of such Agent under this Agreement or the other Loan
Documents.

 

(b)          
In the event that any Lender Party fails to consent to any amendment,
modification or waiver that requires the consent of all of the Lender Parties
(other than any Lender Party that is, at such time, a Defaulting Lender) where
the Super Majority Lenders have approved such amendment, modification or waiver
(a “Non-Consenting Lender”), then (subject to (i) such
Lender Party’s right to rescind such demand or assertion within five days after
the notice from the Borrowers referred to below or (ii) such Non-Consenting
Lender consenting to such amendment, modification or waiver within those five
days)  the Borrowers may,
upon five Business Days’ prior written notice to such Lender Party and the
Administrative Agent, elect to cause such Lender Party to assign its Advances
and Commitments in full to one or more Persons selected by the Borrowers so
long as (a) each such Person satisfies the criteria of an Eligible Assignee and
is reasonably satisfactory to the Administrative Agent, (b) such Lender Party
receives payment in full in cash of the outstanding principal amount of all
Advances made by it and all accrued and unpaid interest thereon and all other
amounts due and payable to such Lender Party as of the date of such assignment
(including amounts owing pursuant to Sections 2.10, 2.12, 2.15 and 8.04) and
(c) each such Lender Party assignee agrees to accept such assignment and to
assume all obligations of such Lender Party hereunder in accordance with
Section 8.07.

 

               
SECTION 8.02.      Notices, Etc.
(a)  Unless otherwise expressly provided herein, all notices and
other communications provided for hereunder shall be in writing (including by
facsimile transmission). All such written notices shall be mailed certified or
registered mail, faxed or delivered to the applicable address, facsimile number
or (subject to subsection (b) below) electronic mail address, and all notices
and other communications expressly permitted hereunder to be given by telephone
shall be made to the applicable telephone number, as follows:

 

(i)           
if to any Borrower, any Agent, the Collateral Agreement Agent, to the address,
facsimile number, electronic mail address or telephone number specified for
such Person on Schedule 8.02 or to such other address, facsimile number,
electronic mail 

 

105

 

address or telephone number as shall be designated by
such party in a written notice to the other parties; and

 

(ii)          
if to any other Lender, to the address, facsimile number, electronic mail
address or telephone number as shall be designated by such party in a notice to
BMCA or the Administrative Agent.

 

Notices sent by hand or
overnight courier service, or mailed by certified or registered mail, shall be
deemed to have been given when received; notices sent by facsimile shall be
deemed to have been given when sent (except that, if not given during normal
business hours for the recipient, shall be deemed to have been given at the
opening of business on the next business day for the recipient). Notices
delivered through electronic communications to the extent provided in
subsection (b) below, shall, unless the Administrative Agent otherwise
prescribes, be deemed to have been given (i) in the case of notices and other
communications sent to an email address, upon the sender’s receipt of an
acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return email or other written
acknowledgement), provided that if such notice or other communication is not
sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) in the case of notices or
communications posted to an Internet or intranet website, upon the deemed
receipt by the intended recipient at its email address as described in the foregoing
clause (i) of notification that such notice or communication is available and
identifying the website address therefor.

 

(b)          
Notices and other communications to the Lenders hereunder may be delivered or
furnished by electronic communication (including email and Internet or intranet
websites) pursuant to procedures approved by the Administrative Agent, provided
that the foregoing shall not apply to notices to any Lender if such Lender has
notified the Administrative Agent that it is incapable of receiving notices by
electronic communication. The Administrative Agent or BMCA may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it, provided that
approval of such procedures may be limited to particular notices or
communications.

 

(c)          
Loan Documents may be transmitted and/or signed by facsimile. The effectiveness
of any such documents and signatures shall, subject to applicable law, have the
same force and effect as manually-signed originals and shall be binding on all
Loan Parties, the Agents, the Collateral Agreement Agent, and the Lenders. The
Administrative Agent may also require that any such documents and signatures be
confirmed by a manually-signed original thereof; provided, however, that the
failure to request or deliver the same shall not limit the effectiveness of any
facsimile document or signature.

 

(d)          
Each Agent and the Lenders shall each be entitled to rely and act upon any
notices (including telephonic Notices of Borrowing) believed by it in good
faith to have been given by or on behalf of the Borrowers even if (i) such
notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof. The Borrowers, jointly and severally, shall indemnify each Agent and
each 

 

106

 

Lender from all losses, costs,
expenses and liabilities resulting from the reliance by such Person on each
notice believed by the respective such Person in good faith to have been given
by or on behalf of any Borrower or any other Loan Party. All telephonic notices
to and other communications with the Administrative Agent may be recorded by
the Administrative Agent, and each of the parties hereto hereby consents to
such recording. In addition, each Borrower hereby waives the right to dispute
the Administrative Agent’s record of the terms of such telephonic notice of
Borrowing or prepayment of Borrowings (absent manifest error).

 

               
SECTION 8.03.      No Waiver; Remedies. No
failure on the part of any Lender Party or any Agent to exercise, and no delay
in exercising, any right hereunder or under any Note or any other Loan Document
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

 

               
SECTION 8.04.      Costs and Expenses. (a) 
The Borrowers, jointly and severally, agree to pay on demand (i) all
reasonable out of pocket costs and expenses of the Administrative Agent and the
Collateral Monitoring Agent in connection with the preparation, execution,
delivery, administration, modification and amendment of, or any consent or
waiver under, the Loan Documents (including (A) all due diligence,
collateral review, syndication (including printing, distribution and bank
meetings), transportation, computer, duplication, messenger, appraisal, audit,
insurance, consultant, search, filing and recording fees and expenses and
(B) the reasonable fees and expenses of one set (including one main law
firm and such additional special or local counsel as may be reasonably
required) counsel for each Agent with respect thereto, with respect to advising
such Agent as to its rights and responsibilities, or the perfection, protection
or preservation of rights or interests, under the Loan Documents, with respect
to negotiations with any Loan Party or with other creditors of any Loan Party
or any of its Subsidiaries arising out of any Event of Default or any events or
circumstances that may give rise to an Event of Default and with respect to
presenting claims in or otherwise participating in or monitoring any
bankruptcy, insolvency or other similar proceeding involving creditors’ rights
generally and any proceeding ancillary thereto) and (ii) all out of pocket
costs and expenses of each Agent and each Lender Party in connection with the
enforcement of the Loan Documents, whether in any action, suit or litigation,
or any bankruptcy, insolvency or other similar proceeding affecting creditors’
rights generally (including the reasonable fees and expenses of counsel for the
Administrative Agent, the Collateral Monitoring Agent and each Lender Party
with respect thereto).

 

(b)          
The Borrowers, jointly and severally, agree to indemnify, defend and save and
hold harmless each Agent, each Lender Party and each of their Affiliates and
their respective officers, directors, employees, agents, advisors, attorneys
and representatives (each, an “Indemnified Party”) from and against,
and shall pay on demand, any and all claims, damages, losses, liabilities and
expenses (including fees and expenses of counsel), joint or several, that may
be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of (including in
connection with any investigation, litigation or proceeding or preparation of a
defense in connection therewith) (i) this Agreement, the actual or proposed
use of the proceeds of the Advances or the Letters of Credit, the Transaction
Documents or any of the transactions contemplated thereby, including any
acquisition or proposed acquisition (including the transactions contemplated
hereunder) by the Borrowers or any of their Subsidiaries or Affiliates of all
or any portion of the Equity Interests in 

 

107

 

or Debt securities or substantially
all of the assets of any Person or (ii) the actual or alleged presence of
Hazardous Materials on any property of any Loan Party or any of its
Subsidiaries or any Environmental Action relating in any way to any Loan Party
or any of its Subsidiaries, except to the extent such claim, damage, loss,
liability or expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party’s gross
negligence or willful misconduct. In the case of an investigation, litigation
or other proceeding to which the indemnity in this Section 8.04(b)
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by any Loan Party, its directors,
shareholders or creditors or an Indemnified Party or any other Person, whether
or not any Indemnified Party is otherwise a party thereto and whether or not
the transactions contemplated hereunder are consummated except to the extent
such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party’s gross negligence or willful misconduct. The
Borrowers also agree not to assert any claim against any Agent, any Lender
Party or any of their Affiliates, or any of their respective officers, directors,
employees, agents and advisors, on any theory of liability, for special,
indirect, consequential or punitive damages arising out of or otherwise
relating to the Facilities, the actual or proposed use of the proceeds of the
Advances or the Letters of Credit, the Transaction Documents or any of the
transactions contemplated by the Transaction Documents.

 

(c)          
No Indemnified Party shall have any liability (whether direct or indirect, in
contract, tort or otherwise) to any Borrower or its Subsidiaries, or any
shareholders or creditors of the foregoing for or in connection with
transactions contemplated hereby, except to the extent such liability is found
in a final non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party’s gross negligence or willful misconduct.
In no event, however, shall any Indemnified Party be liable on any theory of
liability for any special, indirect, consequential or punitive damages
(including any loss of profits, business or anticipated savings).

 

(d)          
If any payment of principal of, or Conversion of, any Eurodollar Rate Advance
is made by the Borrowers to or for the account of a Lender Party other than on
the last day of the Interest Period for such Advance, as a result of a payment
or Conversion pursuant to Section 2.06, 2.09(b)(i) or 2.10(d),
acceleration of the maturity of the Notes pursuant to Section 6.01 or for
any other reason, or if the Borrowers fail to make any payment or prepayment of
an Advance for which a notice of prepayment has been given or that is otherwise
required to be made, whether pursuant to Section 2.04, 2.06 or 6.01 or
otherwise, the Borrowers, jointly and severally, agree to, upon demand by such
Lender Party (with a copy of such demand to the Administrative Agent), pay to
the Administrative Agent for the account of such Lender Party any amounts
required to compensate such Lender Party for any additional losses, costs or
expenses that it may reasonably incur as a result of such payment or Conversion
or such failure to pay or prepay, as the case may be, 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 any
Lender Party to fund or maintain such Advance.

 

(e)          
If any Loan Party fails to pay when due any costs, expenses or other amounts
payable by it under any Loan Document, including fees and expenses of counsel
and 

 

108

 

indemnities, such amount may be
paid on behalf of such Loan Party by the Administrative Agent or any Lender
Party, in its sole discretion, exercised reasonably.

 

(f)           
Without prejudice to the survival of any other agreement of any Loan Party hereunder
or under any other Loan Document, the agreements and obligations of the
Borrowers contained in Sections 2.10 and 2.12 and this Section 8.04 shall
survive the payment in full of principal, interest and all other amounts
payable hereunder and under any of the other Loan Documents.

 

               
SECTION 8.05.      Right of Set-off. Upon (a) the
occurrence and during the continuance of any Event of Default and (b) the
making of the request or the granting of the consent specified by
Section 6.01 to authorize the Administrative Agent to declare the Notes
due and payable pursuant to the provisions of Section 6.01, each Agent and
each Lender Party and each of their respective Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and otherwise apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Agent, such Lender Party or such Affiliate to or for the
credit or the account of the Borrowers against any and all of the Obligations
of the Borrowers now or hereafter existing under the Loan Documents,
irrespective of whether such Agent or such Lender Party shall have made any
demand under this Agreement or such Note or Notes and although such Obligations
may be unmatured. Each Agent and each Lender Party agrees promptly to notify
the Borrowers after any such set-off and application; provided,
however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Agent and each
Lender Party and their respective Affiliates under this Section are in addition
to other rights and remedies (including other rights of set-off) that such
Agent, such Lender Party and their respective Affiliates may have.

 

               
SECTION 8.06.      Binding Effect. This Agreement
shall become effective when it shall have been executed by the Borrowers and
each Agent and the Administrative Agent shall have been notified by each
Initial Lender Party that such Initial Lender Party has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrowers,
each Agent and each Lender Party and their respective successors and assigns,
except that the Borrowers shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of each of
the Lender Parties.

 

               
SECTION 8.07.      Assignments and Participations.
(a)  Each Lender may, upon at least five Business Days’ notice to such
Lender and the Administrative Agent, assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitment, the Advances owing to it and the Note or
Notes held by it); provided, however, that (i) each such
assignment shall be of a uniform, and not a varying, percentage of all rights
and obligations under and in respect of any or all of the Facilities,
(ii) except in the case of an assignment to a Person that, immediately
prior to such assignment, was a Lender, an Affiliate of any Lender or an
Approved Fund of any Lender or an assignment of all of a Lender’s rights and
obligations under this Agreement, the aggregate amount of the Commitments or
Advances being assigned to such Eligible Assignee pursuant to such assignment
(determined as of the date of the Assignment and Acceptance with respect to
such assignment) shall in no event be less than $5,000,000 (or such lesser
amount as shall be approved by the Administrative Agent and, so long as no
Default shall have occurred and be continuing at the time of 

 

109

 

effectiveness of such assignment, the Borrowers),
(iii) each such assignment shall be to an Eligible Assignee,
(iv) except in the case of an assignment by a Person that, immediately
prior to such assignment, was a Lender, to one of its Affiliates, no such
assignments shall be permitted without the consent of the Administrative Agent
and, so long as no Default shall have occurred and be continuing at the time of
effectiveness of such assignment, BMCA (in each case, which consents shall not
be unreasonably withheld) and (v) the parties to each such assignment
shall execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any Note
or Notes subject to such assignment and a processing and recordation fee of
$3,500.

 

(b)          
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in such Assignment and Acceptance, (i) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender or Issuing Bank, as the
case may be, hereunder and (ii) the Lender or Issuing Bank assignor
thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights (other than its rights under Sections 2.10, 2.12 and 8.04 to the extent
any claim thereunder relates to an event arising prior to such assignment) and
be released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of the remaining portion of an assigning
Lender’s or Issuing Bank’s rights and obligations under this Agreement, such
Lender or Issuing Bank shall cease to be a party hereto).

 

(c)          
By executing and delivering an Assignment and Acceptance, each Lender Party
assignor thereunder and each assignee thereunder confirm to and agree with each
other and the other parties thereto and hereto as follows:  (i) other
than as provided in such Assignment and Acceptance, such assigning Lender Party
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
any Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any lien
or security interest created or purported to be created under or in connection
with, any Loan Document or any other instrument or document furnished pursuant
thereto; (ii) such assigning Lender Party makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any Loan Party or the performance or observance by any Loan Party of any of its
obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements referred to in Section 4.01 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee
will, independently and without reliance upon any Agent, such assigning Lender
Party or any other Lender Party and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v) such
assignee confirms that it is an Eligible Assignee; (vi) such assignee
appoints and authorizes each Agent to take such action as agent on its behalf
and to exercise such powers and discretion under the Loan Documents as are
delegated to such Agent by the terms hereof and thereof, together with such
powers and discretion as are reasonably incidental thereto; and (vii) such
assignee agrees that it 

 

110

 

will perform in accordance with
their terms all of the obligations that by the terms of this Agreement are
required to be performed by it as a Lender or Issuing Bank, as the case may be.

 

(d)          
The Administrative Agent acting for this purpose (but only for this purpose) as
the agent of the Borrowers, shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lender Parties and the Commitment under each Facility of, and principal
amount of the Advances owing under each Facility to, each Lender Party from
time to time (the “Register”). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and
the Borrowers, the Agents and the Lender Parties shall treat each Person whose
name is recorded in the Register as a Lender Party hereunder for all purposes
of this Agreement. The Register shall be available for inspection by the
Borrowers or any Agent or any Lender Party at any reasonable time and from time
to time upon reasonable prior notice.

 

(e)          
Notwithstanding anything to the contrary contained in clause (b) above,
the Advances (including the Notes evidencing such Advances) are registered
obligations and the right, title, and interest of the Lender Parties and their
assignees in and to such Advances shall be transferable only upon notation of
such transfer in the Register. A Note shall only evidence the Lender Party’s or
an assignee’s right title and interest in and to the related Advance, and in no
event is any such Note to be considered a bearer instrument or obligation. This
Section 8.07 shall be construed so that the Advances are at all times
maintained in “registered form”
within the meaning of sections 163(f), 871(h)(2) and 881(c)(2) of the Internal
Revenue Code and any related regulations (or any successor provisions of the
Internal Revenue Code or such regulations). Solely for purposes of this and for
tax purposes only, the Administrative Agent shall act as the Borrowers’ agent
for purposes of maintaining such notations of transfer in the Register.

 

(f)           
Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender Party and an assignee, together with any Note or Notes subject to such
assignment, the Administrative Agent shall, if such Assignment and Acceptance
has been completed and is in substantially the form of Exhibit C hereto,
(i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to BMCA and each other Agent. In the case of any assignment by a
Lender, within five Business Days after its receipt of such notice, the
Borrowers, at their own expense, shall, if requested by the assignee, execute
and deliver to the Administrative Agent in exchange for the surrendered Note or
Notes an amended and restated Note (which shall be marked “Amended and
Restated”) to the order of such Eligible Assignee in an amount equal to the
Commitment assumed by it under each Facility pursuant to such Assignment and
Acceptance and, if any assigning Lender has retained a Commitment hereunder
under such Facility and has requested a replacement Note, an amended and
restated Note to the order of such assigning Lender in an amount equal to the
Commitment retained by it hereunder. Such amended and restated Note or Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit A hereto.

 

111

 

(g)          
The Issuing Bank may assign to an Eligible Assignee all of its rights and
obligations under the undrawn portion of its Letter of Credit Commitment at any
time; provided, however, that (i) each such
assignment shall be to an Eligible Assignee and (ii) the parties to each
such assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance,
together with a processing and recordation fee of $3,500.

 

(h)          
Each Lender Party may sell participations to one or more Persons (other than
any Loan Party or any of its Affiliates) in or to all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitments, the Advances owing to it and the Note or Notes (if any) held by
it); provided, however, that (i) such Lender
Party’s obligations under this Agreement (including its Commitments) shall
remain unchanged, (ii) such Lender Party shall remain solely responsible
to the other parties hereto for the performance of such obligations,
(iii) such Lender Party shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrowers, the Agents and the other
Lender Parties shall continue to deal solely and directly with such Lender
Party in connection with such Lender Party’s rights and obligations under this
Agreement and (v) no participant under any such participation shall have
any right to approve any amendment or waiver of any provision of any Loan
Document, or any consent to any departure by any Loan Party therefrom, except
to the extent that such amendment, waiver or consent requires the consent of all
Lender Parties.

 

(i)           
Any Lender Party may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 8.07,
disclose to the assignee or participant or proposed assignee or participant any
information relating to the Borrowers furnished to such Lender Party by or on
behalf of the Borrowers; provided, however, that, prior to any such
disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Lender Party in accordance with the terms of Section
8.10.

 

(j)           
Notwithstanding any other provision set forth in this Agreement, any Lender
Party may at any time create a security interest in all or any portion of its
rights under this Agreement (including the Advances owing to it and the Note or
Notes held by it) in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve System.

 

(k)          
Notwithstanding anything to the contrary contained herein, any Lender that is a
fund that invests in bank loans may create a security interest in all or any
portion of the Advances owing to it and the Note or Notes held by it to the
trustee for holders of obligations owed, or securities issued, by such fund as
security for such obligations or securities, provided, that unless and until
such trustee actually becomes a Lender in compliance with the other provisions
of this Section 8.07, (i) no such pledge shall release the pledging
Lender from any of its obligations under the Loan Documents and (ii) such
trustee shall not be entitled to exercise any of the rights of a Lender under
the Loan Documents even though such trustee may have acquired ownership rights
with respect to the pledged interest through foreclosure or otherwise.

 

(l)           
Notwithstanding anything to the contrary contained herein, any Lender Party (a
“Granting Lender”) may grant to a special purpose funding vehicle
identified as such in 

 

112

 

writing from time to time by the
Granting Lender to the Administrative Agent and BMCA (an “SPC”) the option to
provide all or any part of any Advance that such Granting Lender would
otherwise be obligated to make pursuant to this Agreement, provided that (i) nothing herein
shall constitute a commitment by any SPC to fund any Advance, and (ii) if
an SPC elects not to exercise such option or otherwise fails to make all or any
part of such Advance, the Granting Lender shall be obligated to make such
Advance pursuant to the terms hereof. The making of an Advance by an SPC
hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Advance were made by such Granting Lender. Each party
hereto hereby agrees that (i) no SPC shall be liable for any indemnity or
similar payment obligation under this Agreement for which a Lender Party would
be liable, (ii) no SPC shall be entitled to the benefits of Sections 2.10
and 2.12 (or any other increased costs protection provision) and (iii) the
Granting Bank shall for all purposes, including the approval of any amendment
or waiver of any provision of any Loan Document, remain the Lender Party of
record hereunder. In furtherance of the foregoing, each party hereto hereby
agrees (which agreement shall survive the termination of this Agreement) that,
prior to the date that is one year and one day after the payment in full of all
outstanding commercial paper or other senior Debt of any SPC, it will not
institute against, or join any other person in instituting against, such SPC
any bankruptcy, reorganization, arrangement, insolvency, or liquidation
proceeding under the laws of the United States or any State thereof.
Notwithstanding anything to the contrary contained in this Agreement, any SPC
may (i) with notice to, but without prior consent of, BMCA and the
Administrative Agent and with the payment of a processing fee of $500 and
without paying any processing fee therefor, assign all or any portion of its
interest in any Advance to the Granting Lender and (ii) disclose on a
confidential basis any non-public information relating to its funding of
Advances to any rating agency, commercial paper dealer or provider of any
surety or guarantee or credit or liquidity enhancement to such SPC. This
subsection (k) may not be amended without the prior written consent of
each Granting Lender, all or any part of whose Advances are being funded by the
SPC at the time of such amendment.

 

               
SECTION 8.08.      Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute
one and the same agreement. Delivery by telecopier or electronic mail of an
executed counterpart of a signature page to this Agreement shall be effective
as delivery of an original executed counterpart of this Agreement.

 

               
SECTION 8.09.      No Liability of the Issuing
Bank. The Borrowers assume all risks of the acts or omissions of any
beneficiary or transferee of any Letter of Credit with respect to its use of
such Letter of Credit. Neither the Issuing Bank nor any of its officers or
directors shall be liable or responsible for:  (a) the use that may
be made of any Letter of Credit or any acts or omissions of any beneficiary or
transferee in connection therewith; (b) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient, fraudulent or
forged; (c) payment by the Issuing Bank against presentation of documents
that do not comply with the terms of a Letter of Credit, including failure of
any documents to bear any reference or adequate reference to the Letter of
Credit; or (d) any other circumstances whatsoever in making or failing to
make payment under any Letter of Credit, except that the Borrowers shall have a
claim against the Issuing Bank, and the Issuing Bank shall be liable to the
Borrowers, to the extent of any direct, but not consequential, damages suffered
by 

 

113

 

the Borrowers that the Borrowers proves were caused by
(i) the Issuing Bank’s willful misconduct or gross negligence as
determined in a final, non-appealable judgment by a court of competent
jurisdiction in determining whether documents presented under any Letter of
Credit comply with the terms of the Letter of Credit or (ii) the Issuing
Bank’s willful failure to make lawful payment under a Letter of Credit after
the presentation to it of a draft and certificates strictly complying with the
terms and conditions of the Letter of Credit. In furtherance and not in
limitation of the foregoing, the Issuing Bank may accept documents that appear
on their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary.

 

               
SECTION 8.10.      Confidentiality. Neither any
Agent nor any Lender Party shall disclose any Confidential Information to any
Person without the consent of BMCA, other than (a) to such Agent’s or such
Lender Party’s Affiliates and their officers, directors, employees,
accountants, attorneys, agents and other advisors (collectively, “Lender Representatives”)
and to actual or prospective Eligible Assignees and participants, and then only
on a confidential basis, (b) as required by any law, rule or regulation or
judicial process, (c) as requested or required by any state, Federal or
foreign authority or examiner (including the National Association of Insurance
Commissioners or any similar organization or quasi-regulatory authority) regulating
such Lender Party, (d) to any rating agency when required by it, provided that, prior to any such
disclosure, such rating agency shall undertake to preserve the confidentiality
of any Confidential Information relating to the Loan Parties received by it
from such Lender Party, (e) in connection with any litigation or
proceeding to which such Agent or such Lender Party or any of its Affiliates
may be a party to the extent required or requested to so disclose by the
applicable Governmental Authority or (f) in connection with the exercise
of any right or remedy under this Agreement or any other Loan Document.
Notwithstanding anything herein to the contrary, any Agent or Lender Party may
disclose to any and all persons, without limitation of any kind, the U.S. tax
treatment and tax structure of the transactions as contemplated hereunder and
all materials of any kind (including opinions or other tax analyses) that are
provided to such Agent or Lender Party, relating to such U.S. tax treatment and
tax structure.

 

               
SECTION 8.11.      Release or Subordination of
Collateral/Release of Guarantor. Upon the sale, lease, transfer or other
disposition of any item of Collateral or the incurrence of Liens permitted
under Sections 5.02(a)(iv) or 5.02(a)(v) (including as a result of the sale, in
accordance with the terms of the Loan Documents, of the Loan Party that owns
such Collateral and as a result of the designation by any Loan Party after the
Closing Date of any of its Subsidiaries as a Non-Recourse Subsidiary) in
accordance with the terms of the Loan Documents, the Administrative Agent will
authorize the Collateral Monitoring Agent to release its Lien on and security
interest in such Collateral (and release the guaranty by a Loan Party, if
applicable) or subordinate its Lien in case of Liens permitted as referred to
above, and, at BMCA’s expense, execute and deliver to such Loan Party such
documents as such Loan Party may reasonably request to evidence the release of
such item of Collateral from the assignment and security interest granted under
the Collateral Documents or release of such Loan Party from its obligations
under the Guaranty or subordinate the Lien of the Collateral Monitoring Agent
on such item of Collateral to such permitted Lien in accordance with the terms
of the Loan Documents.

 

               
SECTION 8.12.      Collateral Matters Relating to
Related Obligations. The benefit of the Loan Documents and of the provisions of
this Agreement relating to the Collateral shall extend to and be available in 

 

114

 

respect of any Obligation arising under any Hedging
Agreement or Cash Management Services (collectively, “Related Obligations”)
solely on the condition and understanding, as among the Agents and all Secured
Parties, that (a) the Related Obligations shall be entitled to the benefit of
the Loan Documents and the Collateral to the extent expressly set forth in this
Agreement and the other Loan Documents and to such extent the Collateral
Monitoring Agent and the Administrative Agent shall hold, and have the right
and power to act with respect to, the guarantee by any Guarantor and the
Collateral on behalf of and as agents for the holders of the Related
Obligations, but the Administrative Agent and the Collateral Monitoring Agent
are otherwise acting solely as agents for the Lender Parties and shall have no
fiduciary duty, duty of loyalty, duty of care, duty of disclosure or other
obligation whatsoever to any holder of Related Obligations, (b) all
matters, acts and omissions relating in any manner to the guarantee of any
Guarantor under the Guaranty, the Collateral, or the omission, creation,
perfection, priority, abandonment or release of any Lien, shall be governed
solely by the provisions of this Agreement and the other Loan Documents, (c)
each Secured Party shall be bound by all actions taken or omitted, in
accordance with the provisions of this Agreement and the other Loan Documents,
by the Collateral Monitoring Agent and the Administrative Agent and the Lenders
required to vote with respect thereto, each of whom shall be entitled to act at
its sole discretion and exclusively in its own interest given its own Revolving
Credit Commitments and its own interest in the Advances and other Obligations
to it arising under this Agreement or the other Loan Documents, without any
duty or liability to any other Secured Party or as to any Related Obligation
and without regard to whether any Related Obligation remains outstanding or is
deprived of the benefit of the Collateral or becomes unsecured or is otherwise
affected or put in jeopardy thereby and (d) no holder of Related Obligations
and no other Secured Party (except the Collateral Monitoring Agent, the
Administrative Agent, the Lenders and the Issuing Banks, to the extent set
forth in this Agreement and the other Loan Documents) shall have any right to
be notified of, or to direct, require or be heard with respect to, any action
taken or omitted in respect of the Collateral or under this Agreement or the
other Loan Documents.

 

               
SECTION 8.13.      Jurisdiction, Etc. (a) 
Each of the parties hereto hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in New York
City, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or any of the other Loan Documents
to which it is a party, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the fullest extent permitted
by law, in such Federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that any
party may otherwise have to bring any action or proceeding relating to this
Agreement or any of the other Loan Documents in the courts of any jurisdiction.

 

(b)          
Each of the parties hereto irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any of the other Loan Documents
to which it is a party in any New York State or Federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent 

 

115

 

permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

 

               
SECTION 8.14.      Governing Law. This Agreement
and the Notes shall be governed by, and construed in accordance with, the laws
of the State of New York.

 

               
SECTION 8.15.      Waiver of Jury Trial. Each of
the Borrower, the Agents and the Lender Parties irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to any of the Loan
Documents, the Advances, the Letters of Credit or the actions of any Agent or
any Lender Party in the negotiation, administration, performance or enforcement
thereof.

 

               
SECTION 8.16.      Agreement to Comply With Court
Order. Each of the Lender Parties hereby accepts and agrees to abide by all of
the terms of the order (the “Approval Order”) as set forth in Exhibit E hereto
entered by the bankruptcy court on February 20, 2007 in connection with the G-I
Holdings bankruptcy proceedings and further agrees not to take any action
(including appearing in certain litigation proceedings specified in the
Approval Order) which could result in the loss of any waivers, or other rights
granted in such Approval Order for the benefit of the Agents and/or the Lender
Parties.

 

               
SECTION 8.17.      Patriot Act Notice. Each
Lender Party and each Agent (for itself and not on behalf of any Lender Party)
hereby notifies the Loan Parties that pursuant to the requirements of the USA
PATRIOT ACT (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Patriot Act”),
it is required to obtain, verify and record information that identifies each
Loan Party, which information includes the name and address of such Loan Party
and other information that will allow such Lender Party or such Agent, as
applicable, to identify such Loan Party in accordance with the Patriot Act. In
such connection, any Lender Party or Agent may also request corporate formation
documents, or other forms of identification, to verify information provided.
The Borrowers shall, and shall cause each of their Subsidiaries to, provide
such information and take such actions as are reasonably requested by any Agent
or any Lender Party in order to assist the Agents and the Lender Parties in
maintaining compliance with the Patriot Act.

 

116

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed by their respective
officers thereunto duly authorized, as of the date first above written.

 

	
   

  	
  BUILDING MATERIALS 

  
	
   

  	
   

  	
  CORPORATION OF AMERICA

  
	
   

  	
  BMCA ACQUISITION INC.

  
	
   

  	
  BMCA ACQUISITION SUB
  INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ John M. Maitner

  	
   

  
	
   

  	
   

  	
  Name: John M. Maitner

  
	
   

  	
   

  	
  Title: Vice President
  and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DEUTSCHE BANK AG NEW
  YORK 

  BRANCH,

  
	
   

  	
   

  	
  as Administrative Agent
  and Collateral 

  Monitoring Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Marguerite Sutton

  	
   

  
	
   

  	
   

  	
  Name: Marguerite Sutton

  
	
   

  	
   

  	
  Title:Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Carin Keegan

  	
   

  
	
   

  	
   

  	
  Name: Carin Keegan

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DEUTSCHE BANK SECURITIES INC., as 

  
	
   

  	
   

  	
  a Joint Lead Arranger,
  a Joint Book 

  Running Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Stephen R. Lapidus

  	
   

  
	
   

  	
   

  	
  Name: Stephen R.
  Lapidus

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Mark E. Funk

  	
   

  
	
   

  	
   

  	
  Name: Mark E. Funk

  
	
   

  	
   

  	
  Title: Director

  

 

 

	
   

  	
  BEAR STEARNS & CO
  INC., as a Joint 

  
	
   

  	
   

  	
  Lead Arranger, a Joint
  Book Manager 

  and Syndication Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Richard Bram Smith

  	
   

  
	
   

  	
   

  	
  Name: Richard Bram
  Smith

  
	
   

  	
   

  	
  Title: Senior Managing
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  J.P. MORGAN SECURITIES
  INC., as a 

  
	
   

  	
   

  	
  Joint Lead Arranger, a
  Joint Book 

  Manager and Documentation Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ David Lynch

  	
   

  
	
   

  	
   

  	
  Name: David Lynch

  
	
   

  	
   

  	
  Title: Executive
  Director

  

 

 

	
   

  	
  Initial
  Lenders

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DEUTSCHE BANK AG NEW
  YORK 

  BRANCH

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Marguerite Sutton

  	
   

  
	
   

  	
   

  	
  Name: Marguerite Sutton

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Carin Keegan

  	
   

  
	
   

  	
   

  	
  Name: Carin Keegan

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BEAR STEARNS CORPORATE 

  LENDING INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Richard Bram Smith

  	
   

  
	
   

  	
   

  	
  Name: Richard Bram
  Smith

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK,
  N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ John M. Hariaczyi

  	
   

  
	
   

  	
   

  	
  Name: John M. Hariaczyi

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CITICORP USA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Jeffrey Nitz

  	
   

  
	
   

  	
   

  	
  Name: Jeffrey Nitz

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE CIT GROUP/BUSINESS
  CREDIT, 

  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Anthony Lavinio

  	
   

  
	
   

  	
   

  	
  Name: Anthony Lavinio

  
	
   

  	
   

  	
  Title: Vice President

  

 

 

	
   

  	
  WACHOVIA BANK, NATIONAL
  ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Harold K Wallace

  	
   

  
	
   

  	
   

  	
  Name: Harold K Wallace

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC
  CAPITAL 

  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Mark J. Dowling

  	
   

  
	
   

  	
   

  	
  Name: Mark J. Dowling

  
	
   

  	
   

  	
  Title: Duly Authorized
  Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  IXIS FINANCIAL PRODUCTS
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Matthew Burke

  	
   

  
	
   

  	
   

  	
  Name: Matthew Burke

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Christopher Hayden

  	
   

  
	
   

  	
   

  	
  Name: Christopher Hayden

  
	
   

  	
   

  	
  Title: Managing
  Director

  

 

 

	
   

  	
  Initial
  Issuing Bank and Initial Swing 

  Line Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DEUTSCHE BANK AG NEW
  YORK 

  BRANCH

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Marguerite Sutton

  	
   

  
	
   

  	
   

  	
  Name: Marguerite Sutton

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carin Keegan

  	
   

  
	
   

  	
   

  	
  Name: Carin Keegan

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  Issuing
  Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CITIBANK, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Jeffrey Nitz

  	
   

  
	
   

  	
   

  	
  Name: Jeffrey Nitz

  
	
   

  	
   

  	
  Title: Director

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00118-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00118-of-00352.parquet"}]]