10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2010

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number 1-8864

USG CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	36-3329400
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

550 West Adams Street, Chicago, Illinois	60661-3676
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code (312) 436-4000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act).

Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes o No o Not applicable. Although the registrant was involved in bankruptcy proceedings during the preceding five years, it did not distribute securities under its confirmed plan of reorganization.

The number of shares of the registrant’s common stock outstanding as of September 30, 2010 was 102,871,866.

Table of Contents

	Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Statements of Operations: Three Months and Nine Months Ended September 30, 2010 and 2009		3
Condensed Consolidated Balance Sheets: As of September 30, 2010 and December 31, 2009		4
Condensed Consolidated Statements of Cash Flows: Nine Months Ended September 30, 2010 and 2009		5
Notes to Condensed Consolidated Financial Statements		6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		23
Item 3. Quantitative and Qualitative Disclosures about Market Risks		41
Item 4. Controls and Procedures		42
PART II OTHER INFORMATION
Item 1. Legal Proceedings		42
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		42
Item 6. Exhibits		43
Signatures		44
EX-10.1
EX-10.2
EX-10.3
EX-10.4
EX-10.5
EX-10.6
EX-10.7
EX-10.8
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT

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PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

USG CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	Three Months						Nine Months
(millions, except per-share and share data)	ended September 30,						ended September 30,
	2010			2009			2010			2009
Net sales	$	758		$	822		$	2,243		$	2,515
Cost of products sold		707			784			2,123			2,378
Gross profit		51			38			120			137
Selling and administrative expenses		74			67			231			219
Restructuring and long-lived asset impairment charges		35			22			54			51
Goodwill and other intangible asset impairment charges		—			41			—			41
Operating loss		(58	)		(92	)		(165	)		(174	)
Interest expense		45			42			134			120
Interest income		(1	)		(2	)		(3	)		(3	)
Other income, net		—			(1	)		—			(10	)
Loss before income taxes		(102	)		(131	)		(296	)		(281	)
Income tax benefit		(2	)		(37	)		(12	)		(92	)
Net loss	$	(100	)	$	(94	)	$	(284	)	$	(189	)
Basic loss per common share	$	(1.00	)	$	(0.96	)	$	(2.85	)	$	(1.91	)
Diluted loss per common share	$	(1.00	)	$	(0.96	)	$	(2.85	)	$	(1.91	)
Average common shares		100,108,673			99,254,483			99,671,209			99,219,560
Average diluted common shares		100,108,673			99,254,483			99,671,209			99,219,560

See accompanying Notes to Condensed Consolidated Financial Statements.

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USG CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

	As of			As of
	September 30,			December 31,
(millions)	2010			2009
Assets
Current Assets:
Cash and cash equivalents	$	400		$	690
Short-term marketable securities		77			—
Restricted cash		3			2
Receivables (net of reserves — $17 and $16)		411			357
Inventories		297			289
Income taxes receivable		5			20
Deferred income taxes		2			2
Other current assets		67			71
Total current assets		1,262			1,431
Long-term marketable securities		67			—
Property, plant and equipment (net of accumulated depreciation and depletion — $1,568 and $1,558)		2,300			2,427
Other assets		228			239
Total assets	$	3,857		$	4,097
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	223		$	205
Accrued expenses		276			273
Current portion of long-term debt		7			7
Income taxes payable		9			7
Total current liabilities		515			492
Long-term debt		1,952			1,955
Deferred income taxes		22			17
Other liabilities		666			703
Commitments and contingencies
Stockholders’ Equity:
Preferred stock		—			—
Common stock		10			10
Treasury stock		(55	)		(194	)
Capital received in excess of par value		2,562			2,640
Accumulated other comprehensive income (loss)		(85	)		(80	)
Retained earnings (deficit)		(1,730	)		(1,446	)
Total stockholders’ equity		702			930
Total liabilities and stockholders’ equity	$	3,857		$	4,097

See accompanying Notes to Condensed Consolidated Financial Statements.

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USG CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Nine Months
(millions)	ended September 30,
	2010			2009
Operating Activities
Net loss	$	(284	)	$	(189	)
Adjustments to reconcile net loss to net cash:
Depreciation, depletion and amortization		134			157
Intangible and long-lived asset impairment charges		28			41
Share-based compensation expense		20			17
Deferred income taxes		2			(89	)
Noncash income tax benefit		(19	)		—
Gain on assets dispositions		(1	)		(8	)
Convertible debt embedded derivative		—			(10	)
(Increase) decrease in working capital:
Receivables		(54	)		58
Income taxes receivable		15			12
Inventories		(8	)		82
Payables		18			26
Accrued expenses		(5	)		(34	)
Decrease in other assets		11			7
Increase (decrease) in other liabilities		19			(16	)
Other, net		(2	)		16
Net cash (used for) provided by operating activities		(126	)		70
Investing Activities
Purchases of marketable securities		(188	)		—
Sales or maturities of marketable securities		44			—
Capital expenditures		(18	)		(36	)
Net proceeds from assets dispositions		3			10
Deposit of restricted cash		(1	)		(1	)
Investment in joint venture		—			(7	)
Net cash used for investing activities		(160	)		(34	)
Financing Activities
Issuance of debt		—			319
Repayment of debt		(5	)		(194	)
Issuances of common stock		1			—
Payment of debt issuance fees		—			(15	)
Excess tax benefits from share-based compensation		—			(1	)
Repurchases of common stock		(2	)		—
Net cash (used for) provided by financing activities		(6	)		109
Effect of exchange rate changes on cash		2			5
Net (decrease) increase in cash and cash equivalents		(290	)		150
Cash and cash equivalents at beginning of period		690			471
Cash and cash equivalents at end of period	$	400		$	621
Supplemental Cash Flow Disclosures:
Interest paid	$	129		$	98
Income taxes refunded, net	$	(11	)	$	(4	)

See accompanying Notes to Condensed Consolidated Financial Statements.

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USG CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

In the following Notes to Condensed Consolidated Financial Statements, “USG,” “we,” “our” and “us” refer to USG Corporation, a Delaware corporation, and its subsidiaries included in the condensed consolidated financial statements, except as otherwise indicated or as the context otherwise requires.

1. Preparation of Financial Statements

We prepared the accompanying unaudited condensed consolidated financial statements of USG Corporation in accordance with applicable United States Securities and Exchange Commission, or SEC, guidelines pertaining to interim financial information. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from those estimates. In the opinion of our management, the financial statements reflect all adjustments, which are of a normal recurring nature except as noted, necessary for a fair presentation of our financial results for the interim periods. The results of operations for the three months and nine months ended September 30, 2010 are not necessarily indicative of the results of operations to be expected for the entire year. These financial statements and notes are to be read in conjunction with the financial statements and notes included in USG’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 which we filed with the SEC on February 12, 2010.

2. Recent Accounting Pronouncement

In July 2010, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2010-20 “Disclosures about the Credit Quality of Financing Receivables and Allowance for Credit Losses.” The new disclosure guidance expands the existing requirements. The enhanced disclosures provide information on the nature of credit risk in a company’s financing receivables, how that risk is analyzed in determining the related allowance for credit losses, and changes to the allowance during the reporting period. The new disclosures will become effective for both our interim and annual reporting periods ending after December 15, 2010. We are currently reviewing this update to determine the impact, if any, that it may have on our financial disclosures, and we will adopt its provisions when they become effective.

3. Restructuring and Long-Lived Asset Impairment Charges

As a result of continuing adverse market conditions, we recorded additional restructuring and long-lived asset impairment charges totaling $54 million during the first nine months of 2010. On a segment basis, $40 million of the charges related to North American Gypsum and $14 million to Building Products Distribution.

     Third quarter 2010 restructuring and long-lived asset impairment charges totaled $35 million. These charges included $6 million for lease obligations and $1 million for severance related to prior-period restructuring activities. The charges for the quarter also included $28 million for long-lived asset impairments related to the write-down of the carrying values of machinery, equipment and buildings at the temporarily idled gypsum wallboard production facilities in Baltimore, Md., and Stony Point, N.Y., one of the temporarily idled gypsum wallboard production facilities in Jacksonville, Fla. and the temporarily idled paper production facility in Jacksonville, Fla. The carrying value of the machinery, equipment and buildings exceeded the estimated future undiscounted cash flows for their remaining useful lives due to the extended downturn in our markets and our forecasts regarding the timing and rate of recovery in those markets.

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     Second quarter 2010 restructuring and long-lived asset impairment charges totaled $7 million and related to the curtailment of operations at a mining facility in Canada, the closure of one distribution center, the closure of an office and warehouse in Europe and continuing charges and adjustments related to prior-period restructuring initiatives. The total amount of the charges included $4 million for severance, $1 million for asset impairments and lease obligations and $2 million for other exit costs.

     First quarter 2010 restructuring and long-lived asset impairment charges totaled $12 million and related to the closure of four distribution centers, a gypsum wallboard production facility in Southard, Okla., that was permanently closed in April 2010 and a gypsum wallboard production facility in Stony Point, N.Y., that was temporarily idled later in the second quarter of 2010. The total amount of the charges included $5 million for severance, $5 million for asset impairments and lease obligations and $2 million for other exit costs.

RESTRUCTURING RESERVES

Restructuring reserves totaling $33 million were included in accrued expenses and other liabilities on the condensed consolidated balance sheet as of September 30, 2010. Restructuring-related payments totaled $28 million in the first nine months of 2010. We expect future payments to be approximately $10 million during the remainder of 2010, $14 million in 2011 and $9 million after 2011. All restructuring-related payments in 2010 were funded with cash from operations or cash on hand. We also expect that the future payments will be funded with cash from operations or cash on hand. The restructuring reserve is summarized as follows:

	Balance		2010 Activity								Balance
	as of				Cash			Asset			as of
(millions)	12/31/09		Charges		Payments			Impairment			9/30/10
Severance	$	4	$	10	$	(12	)	$	—		$	2
Lease obligations		34		7		(11	)		—			30
Asset impairments		—		33		—			(33	)		—
Other exit costs		2		4		(5	)		—			1
Total	$	40	$	54	$	(28	)	$	(33	)	$	33

4. Segments

Our operations are organized into three reportable segments: North American Gypsum, Building Products Distribution and Worldwide Ceilings. Segment results were as follows:

	Three Months						Nine Months
	ended September 30,						ended September 30,
(millions)	2010			2009			2010			2009
Net Sales:
North American Gypsum	$	413		$	443		$	1,265		$	1,363
Building Products Distribution		281			329			811			1,019
Worldwide Ceilings		174			173			511			517
Eliminations		(110	)		(123	)		(344	)		(384	)
Total	$	758		$	822		$	2,243		$	2,515
Operating Profit (Loss):
North American Gypsum	$	(43	)	$	(31	)	$	(89	)	$	(72	)
Building Products Distribution		(24	)		(73	)		(85	)		(109	)
Worldwide Ceilings		21			21			62			57
Corporate		(13	)		(12	)		(50	)		(53	)
Eliminations		1			3			(3	)		3
Total	$	(58	)	$	(92	)	$	(165	)	$	(174	)

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     The total operating losses for the third quarter and first nine months of 2009 included goodwill and other intangible asset impairment charges of $41 million related to Building Products Distribution. Restructuring and long-lived asset impairment charges by segment were as follows:

	Three Months				Nine Months
	ended September 30,				ended September 30,
(millions)	2010		2009		2010		2009
North American Gypsum	$	30	$	11	$	40	$	24
Building Products Distribution		5		8		14		14
Worldwide Ceilings		—		2		—		3
Corporate		—		1		—		10
Total	$	35	$	22	$	54	$	51

     See Note 3 for information related to restructuring and long-lived asset impairment charges and the restructuring reserve as of September 30, 2010.

5. Earnings (Loss) Per Share

Basic earnings (loss) per share are based on the weighted average number of common shares outstanding. Diluted earnings per share are based on the weighted average number of common shares outstanding, the dilutive effect, if any, of restricted stock units, or RSUs, and performance shares, the potential exercise of outstanding stock options and the potential conversion of our $400 million of 10% convertible senior notes. The reconciliation of basic earnings (loss) per share to diluted earnings (loss) per share is shown in the following table:

						Weighted
						Average
	Net			Shares		Per-Share
(millions, except per-share and share data)	Loss			(000)		Amount
Three Months Ended September 30, 2010:
Basic loss	$	(100	)		100,109	$	(1.00	)
Diluted loss	$	(100	)		100,109	$	(1.00	)
Three Months Ended September 30, 2009:
Basic loss	$	(94	)		99,254	$	(0.96	)
Diluted loss	$	(94	)		99,254	$	(0.96	)
Nine Months Ended September 30, 2010:
Basic loss	$	(284	)		99,671	$	(2.85	)
Diluted loss	$	(284	)		99,671	$	(2.85	)
Nine Months Ended September 30, 2009:
Basic loss	$	(189	)		99,220	$	(1.91	)
Diluted loss	$	(189	)		99,220	$	(1.91	)

     The diluted losses per share for the third quarter and the first nine months of 2010 and 2009 were computed using the weighted average number of common shares outstanding during those periods. The approximately 35.1 million shares issuable upon conversion of our 10% convertible senior notes were not included in the computation of diluted loss per share for those periods because their inclusion was anti-dilutive. Options, RSUs and performance shares with respect to 6.5 million common shares for the third quarter of 2010, 6.7 million common shares for the first nine months of 2010, 5.4 million common shares for the third quarter of 2009 and 5.2 million common shares for the first nine months of 2009 were not included in the computation of diluted loss per share for those periods because their inclusion was anti-dilutive.

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6. Marketable Securities

We have been investing in marketable securities in 2010. These securities are classified as available-for-sale securities and reported at fair value with unrealized gains and losses excluded from earnings and reported in accumulated other comprehensive income (loss), or AOCI, on our condensed consolidated balance sheet. The realized and unrealized gains and losses for the nine months ended September 30, 2010 were immaterial. Proceeds received from sales and maturities of marketable securities were $44 million for the first nine months of 2010.

     Our investments in marketable securities as of September 30, 2010 consisted of the following:

	Amortized		Fair
(millions)	Cost		Value
Corporate debt securities	$	62	$	62
U.S. government and agency debt securities		30		30
Asset-backed debt securities		20		20
Non-U.S. government debt securities		10		10
Certificates of deposit		22		22
Total marketable securities	$	144	$	144

     Contractual maturities of marketable securities as of September 30, 2010 were as follows:

	Amortized		Fair
(millions)	Cost		Value
Due in 1 year or less	$	77	$	77
Due in 1-5 years		47		47
Asset-backed debt securities		20		20
Total marketable securities	$	144	$	144

7. Intangible Assets

Intangible assets, which are included in other assets on the condensed consolidated balance sheets, are summarized as follows:

	As of September 30, 2010										As of December 31, 2009
	Gross										Gross
	Carrying		Impairment			Accumulated					Carrying		Impairment			Accumulated
(millions)	Amount		Charges			Amortization			Net		Amount		Charges			Amortization			Net
Intangible Assets with Definite Lives:
Customer relationships	$	70	$	—		$	(25	)	$	45	$	70	$	—		$	(20	)	$	50
Other		9		—			(4	)		5		9		—			(4	)		5
Total		79		—			(29	)		50		79		—			(24	)		55
Intangible Assets with Indefinite Lives:
Trade names		22		—			—			22		53		(31	)		—			22
Other		9		(1	)		—			8		9		—			—			9
Total		31		(1	)		—			30		62		(31	)		—			31
Total Other Intangible Assets	$	110	$	(1	)	$	(29	)	$	80	$	141	$	(31	)	$	(24	)	$	86

     Intangible assets with definite lives are amortized. Total amortization expense was $5 million for the first nine months of 2010 and $6 million for the first nine months of 2009. Estimated annual amortization expense for intangible assets is $8 million for each of the years 2010 through 2012 and $7 million for each of the years 2013 through 2015. Intangible assets with indefinite lives are not amortized.

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8. Debt

Total debt, including the current portion of long-term debt, consisted of the following:

	As of		As of
	September 30,		December 31,
(millions)	2010		2009
6.3% senior notes	$	500	$	500
7.75% senior notes, net of discount		499		499
9.75% senior notes, net of discount		296		295
10% convertible senior notes, net of discount		381		380
Ship mortgage facility		44		49
Industrial revenue bonds		239		239
Total	$	1,959	$	1,962

CREDIT FACILITY

Our credit facility allows for revolving loans and letters of credit (up to $250 million) in an aggregate principal amount not to exceed the lesser of (i) $500 million or (ii) a borrowing base determined by reference to the trade receivables and inventory of USG and its significant domestic subsidiaries. The credit facility is guaranteed by our significant domestic subsidiaries and secured by their and USG Corporation’s trade receivables and inventory. This facility is available to fund working capital needs and for other general corporate purposes. Borrowings under the credit facility bear interest at a floating rate based on an alternate base rate or, at our option, at adjusted LIBOR plus 3.00%. We are also required to pay annual facility fees of 0.75% on the entire facility, whether drawn or undrawn, and fees on outstanding letters of credit. We have the ability to repay amounts outstanding under the credit agreement at any time without prepayment premium or penalty. The credit facility matures on August 2, 2012.

     The credit agreement contains a single financial covenant that would require us to maintain a minimum fixed charge coverage ratio of 1.1 to 1.0 if and for so long as the excess of the borrowing base over the outstanding borrowings under the credit agreement is less than $75 million. As of the date of this report, our fixed charge coverage ratio was 0.15 to 1. Because we do not currently satisfy the required fixed charge coverage ratio, we must maintain borrowing availability of at least $75 million under the credit facility. The credit agreement contains other covenants and events of default that are customary for similar agreements and may limit our ability to take various actions.

     Taking into account the most recent borrowing base calculation delivered under the credit facility, which reflects trade receivables and inventory as of September 30, 2010, outstanding letters of credit of $80 million and the $75 million availability requirement for the fixed charge coverage ratio not to apply, borrowings available under the credit facility were approximately $115 million as of September 30, 2010. As of that date and during the nine months then-ended, there were no borrowings under the facility. Had there been any borrowings as of that date, the applicable interest rate would have been 3.29%.

SENIOR NOTES

We have $300 million in aggregate principal amount of 9.75% senior notes due 2014 that are recorded on the condensed consolidated balance sheets at $296 million, which is net of debt discount of $4 million. Our obligations under the notes are guaranteed on a senior unsecured basis by certain of our domestic subsidiaries.

     We have $500 million of 7.75% senior notes due 2018 that are recorded on the condensed consolidated balance sheets at $499 million, which is net of debt discount of $1 million. The interest rate payable on these notes is subject to adjustment from time to time by up to 2% in the aggregate if the debt ratings assigned to the notes decrease or thereafter increase. At our current credit ratings, the interest rate on these notes is 9.5%. We also have $500 million of 6.3% senior notes due 2016.

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     The 9.75% senior notes, 7.75% senior notes and 6.3% senior notes are senior unsecured obligations and rank equally with all of our other existing and future unsecured senior indebtedness. The indentures governing the notes contain events of default, covenants and restrictions that are customary for similar transactions, including a limitation on our ability and the ability of certain of our subsidiaries to create or incur secured indebtedness. The 9.75% senior notes also contain a provision requiring us to offer to purchase those notes at a premium of 101% of their principal amount (plus accrued and unpaid interest) in the event of a change in control. The 7.75% senior notes and the 6.3% senior notes contain a provision requiring us to offer to purchase those notes at a premium of 101% of their principal amount (plus accrued and unpaid interest) in the event of a change in control and a related downgrade of the rating on the notes to below investment grade by both Moody’s Investors Service and Standard & Poor’s Financial Services LLC. All three series of notes also contain a provision that allows us to redeem the notes in whole at any time, or in part from time to time, at our option, at a redemption price equal to the greater of (1) 100% of the principal amount of the notes being redeemed and (2) the sum of the present value of the remaining scheduled payments of principal and interest on the notes being redeemed discounted to the redemption date on a semi-annual basis at the applicable U.S. Treasury rate plus a spread (as outlined in the respective indentures), plus, in each case, any accrued and unpaid interest on the principal amount being redeemed to the redemption date.

CONVERTIBLE SENIOR NOTES

We have $400 million aggregate principal amount of 10% convertible senior notes due 2018 that are recorded on the condensed consolidated balance sheets at $381 million as of September 30, 2010 and $380 million as of December 31, 2009, which are net of debt discount of $19 million and $20 million, respectively, as a result of an embedded derivative. The notes bear cash interest at the rate of 10% per year until maturity, redemption or conversion. The notes are convertible into 87.7193 shares of our common stock per $1,000 principal amount of notes which is equivalent to an initial conversion price of $11.40 per share, or a total of 35.1 million shares. The notes contain anti-dilution provisions that are customary for convertible notes issued in transactions similar to that in which the notes were issued. The notes mature on December 1, 2018 and are not callable until December 1, 2013, after which we may elect to redeem all or part of the notes at stated redemption prices, plus accrued and unpaid interest.

     The notes are senior unsecured obligations and rank equally with all of our other existing and future unsecured senior indebtedness. The indenture governing the notes contains events of default, covenants and restrictions that are customary for similar transactions, including a limitation on our ability and the ability of certain of our subsidiaries to create or incur secured indebtedness. The notes also contain a provision requiring us to offer to purchase the notes at a premium of 105% of their principal amount (plus accrued and unpaid interest) in the event of a change in control or the termination of trading of our common stock on a national securities exchange.

SHIP MORTGAGE FACILITY

Our subsidiary, Gypsum Transportation Limited, or GTL, has a secured loan facility agreement with DVB Bank SE, as lender, agent and security trustee. As of September 30, 2010, both advances provided for under the secured loan facility had been drawn, and the total outstanding loan balance under the secured loan facility was $44 million. Of the total amount outstanding, $7 million was classified as current portion of long-term debt on our condensed consolidated balance sheets.

     The loan balance under the secured loan facility bears interest at a floating rate based on LIBOR plus a margin of 1.65%. The interest rate was 2.48% as of September 30, 2010. Each advance is repayable in quarterly installments in amounts determined in accordance with the secured loan facility agreement, with the balance of each advance repayable eight years after the date it was advanced, or October 31, 2016 and May 22, 2017. The secured loan facility agreement contains affirmative and negative covenants affecting GTL and certain customary events of default. GTL has granted DVB Bank SE a security interest in the Gypsum Centennial and Gypsum Integrity ships and related insurance, contract, account and other rights as security for borrowings under the secured loan facility. USG Corporation has guaranteed the obligations of GTL under the secured loan facility and has agreed to maintain liquidity of at least $175 million.

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CGC CREDIT FACILITY

Our Canadian subsidiary, CGC Inc., or CGC, has a Can. $30 million credit agreement with The Toronto-Dominion Bank. The credit agreement allows for revolving loans and letters of credit (up to Can. $3 million in aggregate) in an aggregate principal amount not to exceed Can. $30 million. The credit agreement is available for the general corporate purposes of CGC, excluding hostile acquisitions. The credit agreement is secured by a general security interest in substantially all of CGC’s assets other than intellectual property.

     Revolving loans under the agreement may be made in Canadian dollars or U.S. dollars. Revolving loans made in Canadian dollars bear interest at a floating rate based on the prime rate plus 1.50% or the Bankers’ Acceptance Discount Rate plus 3.00%, at the option of CGC. Revolving loans made in U.S. dollars bear interest at a floating rate based upon a base rate plus 1.50% or the LIBOR rate plus 3.00%, at the option of CGC. CGC may prepay the revolving loans at its discretion without premium or penalty and may be required to repay revolving loans under certain circumstances. The credit agreement matures on June 1, 2012, unless terminated earlier in accordance with its terms. The credit agreement contains customary representations and warranties, affirmative and negative covenants that may limit CGC’s ability to take certain actions and events of default. Borrowings under the credit agreement are subject to acceleration upon the occurrence of an event of default.

     As of September 30, 2010 and during the nine months then-ended, there were no borrowings outstanding under this credit agreement. Had there been any borrowings as of that date, the applicable interest rate would have been 4.29%. As of September 30, 2010, outstanding letters of credit totaled Can. $0.4 million. The U.S. dollar equivalent of borrowings available under this agreement as of September 30, 2010 was $29 million.

INDUSTRIAL REVENUE BONDS

Our $239 million of industrial revenue bonds have fixed interest rates ranging from 5.5% to 6.4%. The weighted average rate of interest on our industrial revenue bonds is 5.875%. The average maturity of these bonds is 21 years.

OTHER INFORMATION

The fair value of our debt was $2.126 billion as of September 30, 2010 and $2.211 billion as of December 31, 2009. The fair value was based on quoted market prices of our debt or, where quoted market prices were not available, on quoted market prices of instruments with similar terms and maturities or internal valuation models.

     As of September 30, 2010, we were in compliance with the covenants contained in our credit facilities.

9. Derivative Instruments

We use derivative instruments to manage selected commodity price and foreign currency exposures as described below. We do not use derivative instruments for speculative trading purposes, and we typically do not hedge beyond five years. Cash flows from derivative instruments are included in net cash (used for) provided by operating activities in the condensed consolidated statements of cash flows.

COMMODITY DERIVATIVE INSTRUMENTS

We had swap and option contracts to hedge $83 million notional amounts of natural gas as of September 30, 2010 and $105 million notional amounts of natural gas as of December 31, 2009. All of these contracts mature by December 31, 2012. For contracts designated as cash flow hedges, the unrealized loss that remained in AOCI as of September 30, 2010 was $27 million. AOCI also includes $1 million of losses related to closed derivative contracts hedging underlying transactions that have not yet affected earnings. No ineffectiveness was recorded on contracts designated as cash flow hedges in the first nine months of 2010. Gains and losses on contracts designated as cash flow hedges are reclassified into earnings when the underlying forecasted transactions affect earnings. For contracts designated as cash flow hedges, we reassess the probability of the forecasted transactions occurring on a regular basis. Changes in fair value on contracts not designated as hedges are recorded to earnings. The fair value of those contracts not designated as cash flow hedges was a $1 million asset as of September 30, 2010.

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FOREIGN EXCHANGE DERIVATIVE INSTRUMENTS

We have foreign exchange forward contracts in place to hedge changes in the value of intercompany loans to certain foreign subsidiaries due to changes in foreign exchange rates. The notional amounts of these hedges were $21 million as of September 30, 2010 and $33 million as of December 31, 2009, and all contracts mature by December 31, 2010. We do not apply hedge accounting for these hedges and all changes in their fair value are recorded to earnings. As of September 30, 2010, the fair value of these hedges was a $1 million unrealized loss.

     We have foreign exchange forward contracts to hedge purchases of products and services denominated in non-functional currencies. The notional amount of these hedges was $117 million as of September 30, 2010, and they mature by March 28, 2012. As of December 31, 2009, the notional amount of these hedges was $23 million, and they matured by September 27, 2010. These forward contracts are designated as cash flow hedges and no ineffectiveness was recorded in the first nine months of 2010. Gains and losses on the contracts are reclassified into earnings when the underlying transactions affect earnings. The fair value of these hedges that remained in AOCI was a $1 million unrealized loss as of September 30, 2010.

COUNTERPARTY RISK

We are exposed to credit losses in the event of nonperformance by the counterparties to our derivative instruments. All of our counterparties have investment grade credit ratings; accordingly, we anticipate that they will be able to fully satisfy their obligations under the contracts. Additionally, the derivatives are governed by master netting agreements negotiated between us and the counterparties that reduce our counterparty credit exposure. The agreements outline the conditions (such as credit ratings and net derivative fair values) upon which we, or the counterparties, are required to post collateral. As of September 30, 2010, our derivatives were in a net liability position of $28 million, and we provided $22 million of collateral to our counterparties related to our derivatives. We have not adopted an accounting policy to offset fair value amounts related to derivative contracts under our master netting arrangements. Amounts paid as cash collateral are included in receivables on our condensed consolidated balance sheets.

FINANCIAL STATEMENT INFORMATION

The following are the pretax effects of derivative instruments on the condensed consolidated statements of operations for the three months ended September 30, 2010 and 2009 (dollars in millions):

	Amount of Gain or (Loss)
	Recognized in						Location of Gain or (Loss)	Amount of Gain or (Loss)
Derivatives in	Other Comprehensive						Reclassified from	Reclassified from
Cash Flow Hedging	Income on Derivatives						AOCI into Income	AOCI into Income
Relationships	(Effective Portion)						(Effective Portion)	(Effective Portion)
	2010			2009				2010			2009
Commodity contracts	$	(6	)	$	5		Cost of products sold	$	(5	)	$	(19	)
Foreign exchange contracts		(1	)		(1	)	Cost of products sold		—			(1	)
Total	$	(7	)	$	4			$	(5	)	$	(20	)

Derivatives Not	Location of Gain or (Loss)	Amount of Gain or (Loss)
Designated as Hedging	Recognized in Income	Recognized in Income
Instruments	on Derivatives	on Derivatives
		2010			2009
Commodity contracts	Cost of products sold	$	(2	)	$	(4	)
Foreign exchange contracts	Other expense (income), net		—			4
Total		$	(2	)	$	—

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     The following are the pretax effects of derivative instruments on the condensed consolidated statements of operations for the nine months ended September 30, 2010 and 2009 (dollars in millions):

	Amount of Gain or (Loss)
	Recognized in						Location of Gain or (Loss)	Amount of Gain or (Loss)
Derivatives in	Other Comprehensive						Reclassified from	Reclassified from
Cash Flow Hedging	Income on Derivatives						AOCI into Income	AOCI into Income
Relationships	(Effective Portion)						(Effective Portion)	(Effective Portion)
	2010			2009				2010			2009
Commodity contracts	$	(18	)	$	(24	)	Cost of products sold	$	(15	)	$	(50	)
Foreign exchange contracts		—			(2	)	Cost of products sold		—			(1	)
Total	$	(18	)	$	(26	)		$	(15	)	$	(51	)

Derivatives Not	Location of Gain or (Loss)	Amount of Gain or (Loss)
Designated as Hedging	Recognized in Income	Recognized in Income
Instruments	on Derivatives	on Derivatives
		2010			2009
Commodity contracts	Cost of products sold	$	(3	)	$	(4	)
Foreign exchange contracts	Other expense (income), net		(2	)		2
Interest rate contracts	Interest expense		—			(1	)
Interest rate contracts	Other expense (income), net		—			1
Total		$	(5	)	$	(2	)

     As of September 30, 2010 and December 31, 2009, we had no derivatives designated as net investment or fair value hedges. The following are the fair values of derivative instruments on the condensed consolidated balance sheets as of September 30, 2010 and December 31, 2009 (dollars in millions):

Derivatives	Assets					Liabilities
Designated as Hedging	Balance Sheet					Balance Sheet
Instruments	Location	Fair Value				Location	Fair Value
		9/30/10		12/31/09			9/30/10		12/31/09
Commodity contracts	Other current assets	$	1	$	2	Accrued expenses	$	19	$	13
Commodity contracts	Other assets		—		2	Other liabilities		9		13
Foreign exchange contracts	Other current assets		—		—	Accrued expenses		1		—
Total		$	1	$	4		$	29	$	26

Derivatives Not	Assets					Liabilities
Designated as Hedging	Balance Sheet					Balance Sheet
Instruments	Location	Fair Value				Location	Fair Value
		9/30/10		12/31/09			9/30/10		12/31/09
Commodity contracts	Other current assets	$	—	$	1	Accrued expenses	$	—	$	—
Commodity contracts	Other assets		1		—	Other liabilities		—		—
Foreign exchange contracts	Other current assets		—		—	Accrued expenses		1		—
Total		$	1	$	1		$	1	$	—
Total derivatives		$	2	$	5		$	30	$	26

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10. Fair Value Measurements

Certain assets and liabilities are required to be recorded at fair value. There are three levels of inputs that may be used to measure fair value. Level 1 is defined as quoted prices for identical assets and liabilities in active markets. Level 2 is defined as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3 is defined as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

     The cash equivalents shown in the table below primarily consist of money market funds that are valued based on quoted prices in active markets and as a result are classified as Level 1. We use quoted prices, other readily observable market data and internally developed valuation models when valuing our derivatives and marketable securities and have classified them as Level 2. Derivatives are valued using the income approach including discounted-cash-flow models or a Black-Scholes option pricing model and readily observable market data. The inputs for the valuation models are obtained from data providers and include end-of-period spot and forward natural gas prices and foreign currency exchange rates, natural gas price volatility and LIBOR and swap rates for discounting the cash flows implied from the derivative contracts. Marketable securities are valued using income and market value approaches and values are based on quoted prices or other observable market inputs received from data providers. The valuation process may include pricing matrices, or prices based upon yields, credit spreads or prices of securities of comparable quality, coupon, maturity and type. Our assets and liabilities measured at fair value on a recurring basis were as follows:

	Quoted Prices
	In Active		Significant
	Markets for		Other			Significant
	Identical		Observable			Unobservable
	Assets		Inputs			Inputs
(millions)	(Level 1)		(Level 2)			(Level 3)		Total
As of September 30, 2010:
Cash equivalents	$	215	$	5		$	—	$	220
Marketable securities:
Corporate debt securities		—		62			—		62
U.S. government and agency debt securities		—		30			—		30
Asset-backed debt securities		—		20			—		20
Non-U.S. government debt securities		—		10			—		10
Certificates of deposit		—		22			—		22
Derivative assets		—		2			—		2
Derivative liabilities		—		(30	)		—		(30	)
As of December 31, 2009:
Derivative assets		—		5			—		5
Derivative liabilities		—		(26	)		—		(26	)

     Certain assets and liabilities are measured at fair value on a nonrecurring basis rather than on an ongoing basis, but are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment or when a new liability is being established that requires fair value measurement. During the third quarter of 2010, we reviewed our property, plant and equipment for potential impairment by comparing the carrying values of those assets with their estimated future undiscounted cash flows for their remaining useful lives and determined that impairment existed for machinery, equipment and buildings at three gypsum wallboard production facilities and one paper production facility that were previously idled. We measured the fair value of that machinery and equipment and those buildings as of September 30, 2010 using measurements classified as Level 3. As a result, as discussed in Note 3, we recorded long-lived asset impairment charges of $28 million that are included in restructuring and long-lived asset impairment charges in the condensed consolidated statements of operations for three months and nine months ended September 30, 2010.

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11. Comprehensive Income (Loss)

The components of comprehensive income (loss) are summarized in the following table:

	Three Months						Nine Months
	ended September 30,						ended September 30,
(millions)	2010			2009			2010			2009
Net loss	$	(100	)	$	(94	)	$	(284	)	$	(189	)
Derivatives, net of tax		(2	)		14			(3	)		15
Pension and postretirement benefit plans, net of tax		(2	)		(3	)		(10	)		42
Foreign currency translation, net of tax		21			23			8			44
Total comprehensive income (loss)	$	(83	)	$	(60	)	$	(289	)	$	(88	)

     AOCI consisted of the following:

	As of			As of
	September 30,			December 31,
(millions)	2010			2009
Unrecognized loss on pension and postretirement benefit plans, net of tax	$	(120	)	$	(110	)
Gain (loss) on derivatives, net of tax		(2	)		1
Foreign currency translation, net of tax		37			29
Total	$	(85	)	$	(80	)

     After-tax loss on derivatives reclassified from AOCI to earnings was $5 million during the third quarter of 2010. We estimate that we will reclassify a net $18 million after-tax loss on derivatives from AOCI to earnings within the next 12 months.

12. Employee Retirement Plans

The components of net pension and postretirement benefits costs are summarized in the following table:

	Three Months						Nine Months
	ended September 30,						ended September 30,
(millions)	2010			2009			2010			2009
Pension:
Service cost of benefits earned	$	7		$	7		$	20		$	20
Interest cost on projected benefit obligation		16			17			48			51
Expected return on plan assets		(16	)		(17	)		(49	)		(51	)
Net amortization		3			1			11			3
Net pension cost	$	10		$	8		$	30		$	23
Postretirement:
Service cost of benefits earned	$	1		$	2		$	5		$	6
Interest cost on projected benefit obligation		4			3			13			14
Net amortization		(4	)		(4	)		(13	)		(9	)
Net postretirement cost	$	1		$	1		$	5		$	11

     During the first nine months of 2010, we made contributions to our pension plans that were recorded on the condensed consolidated balance sheet at $43.5 million. These contributions consisted of approximately $0.9 million in cash and 3,271,405 shares of our common stock held in treasury, or the Contributed Shares. The Contributed Shares were contributed to the USG Corporation Retirement Plan Trust, or the Trust, and recorded on the condensed consolidated balance sheet at the September 7, 2010 closing price of $13.03 per share, or approximately $42.6

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million in the aggregate. The Contributed Shares are not reflected on the condensed consolidated statement of cash flows because they were treated as a noncash financing activity. The Contributed Shares were valued for purposes of crediting the contribution to the Trust at a discounted value of $12.38 per share ($13.03 less 5%), or approximately $40.5 million in the aggregate, by an independent appraiser retained by Evercore Trust Company, N.A., or Evercore, an independent fiduciary that has been appointed as investment manager with respect to the Contributed Shares. Resale of the Contributed Shares is registered, and Evercore has authority to sell some or all of them at its discretion as fiduciary.

     As of the date of this report, we believe that the Patient Protection and Affordable Care Act and a reconciliation measure, the Health Care and Education Reconciliation Act of 2010, (collectively, the Act) will not have a material impact on our results of operations, financial position or cash flows. However, we are continuing to evaluate the provisions of the Act and ongoing, related regulatory activity to determine their potential impact, if any, on our health care benefit costs.

13. Share-Based Compensation

During 2010, we granted share-based compensation to eligible participants under our Long-Term Incentive Plan. We recognize expense on all share-based grants over the service period, which is the shorter of the period until the employees’ retirement eligibility dates or the service period of the award for awards expected to vest. Expense is generally reduced for estimated forfeitures.

STOCK OPTIONS

We granted stock options to purchase 1,006,012 shares of common stock during the first quarter of 2010 with an exercise price equal to the closing price of our common stock on the date of the grants. The stock options generally become exercisable in four equal annual installments beginning one year from the date of grant, although they may become exercisable earlier in the event of death, disability, retirement or a change in control, except that 46,000 of the stock options were granted as special retention awards that generally will vest 100% after three years. The stock options generally expire 10 years from the date of grant, or earlier in the event of death, disability or retirement.

     We estimated the fair value of each stock option granted to be $5.92 on the date of grant using a Black-Scholes option valuation model that uses the assumptions noted below. We based expected volatility on a 50% weighting of peer volatilities and 50% weighting of implied volatilities. We did not consider historical volatility of our common stock price to be an appropriate measure of future volatility because of the impact that our Chapter 11 proceedings completed in 2006 had on our historical stock price. The risk-free rate was based on zero-coupon U.S. government issues at the time of grant. The expected term was developed using the simplified method, as permitted by the SEC because there is not sufficient historical stock option exercise experience available.

     The assumptions used in the valuation were as follows: expected volatility 46.90%, risk-free rate 2.97%, expected term (in years) 6.25 and expected dividends 0.

RESTRICTED STOCK UNITS

We granted RSUs with respect to 125,000 shares of common stock during the third quarter of 2010 that generally will vest 100% after four years from the date of grant. During the third quarter of 2010, we also granted RSUs with respect to 25,000 shares of common stock that will vest on the earlier of (1) May 1, 2013 or (2) with approval of USG Corporation’s Board of Directors, the retirement of the holder of the RSUs and RSUs with respect to an additional 25,000 shares that will vest upon the satisfaction of specified associate development goals. We granted RSUs with respect to 697,249 shares of common stock during the first quarter of 2010. These RSUs generally vest in four equal annual installments beginning one year from the date of grant, except that 21,356 of these RSUs were granted as special awards that generally will vest 100% after three to five years.

     Generally, RSUs may vest earlier in the case of death, disability, retirement or a change in control. Each RSU is settled in a share of our common stock after the vesting period. The fair value of each RSU granted is equal to the

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closing price of our common stock on the date of grants. RSUs granted in the third quarter of 2010 had an average fair value of $12.95 and virtually all RSUs granted in the first quarter of 2010 had a fair value of $11.98.

PERFORMANCE SHARES

We granted 332,716 performance shares during the first quarter of 2010. The performance shares generally vest after a three-year period based on our total stockholder return relative to the performance of the Dow Jones U.S. Construction and Materials Index, with adjustments to that index in certain circumstances, for the three-year period. The number of performance shares earned will vary from 0 to 200% of the number of performance shares awarded depending on that relative performance. Vesting will be prorated based on the number of full months employed during the performance period in the case of death, disability, retirement or a change-in-control, and pro-rated awards earned will be paid at the end of the three-year period. Each performance share earned will be settled in a share of our common stock.

     We estimated the fair value of each performance share granted to be $15.59 on the date of grant using a Monte Carlo simulation that uses the assumptions noted below. Expected volatility is based on implied volatility of our traded options and the daily historical volatilities of our peer group. The risk-free rate was based on zero-coupon U.S. government issues at the time of grant. The expected term represents the period from the grant date to the end of the three-year performance period.

     The assumptions used in the valuation were as follows: expected volatility 73.34%, risk-free rate 1.24%, expected term (in years) 2.89 and expected dividends 0.

14. Supplemental Balance Sheet Information

INVENTORIES

Total inventories consisted of the following:

	As of		As of
	September 30,		December 31,
(millions)	2010		2009
Finished goods and work in progress	$	237	$	232
Raw materials		60		57
Total	$	297	$	289

ASSET RETIREMENT OBLIGATIONS

Changes in the liability for asset retirement obligations consisted of the following:

	Nine Months
	ended September 30,
(millions)	2010			2009
Balance as of January 1	$	101		$	89
Accretion expense		5			4
Liabilities incurred/adjusted		(1	)		6
Liabilities settled		(1	)		—
Asset retirements		(1	)		(1	)
Foreign currency translation		—			2
Balance as of September 30	$	103		$	100

PROPERTY, PLANT AND EQUIPMENT

As of September 30, 2010 and December 31, 2009, $23 million of net property, plant and equipment included in other current assets on the condensed consolidated balance sheets was classified as “assets held for sale.“These assets are primarily owned by United States Gypsum Company and are anticipated to be sold in the next 12 months.

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15. Income Taxes

An income tax benefit of $2 million was recorded in the third quarter of 2010. The effective tax benefit rate for the quarter was 1.5%.

     ASC 740, “Accounting for Income Taxes,” requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance if, based on the available evidence, it is more likely than not that such assets will not be realized. The need to establish valuation allowances for deferred tax assets is assessed periodically. In assessing the requirement for, and amount of, a valuation allowance in accordance with the more-likely-than-not standard, we give appropriate consideration to all positive and negative evidence related to the realization of the deferred tax assets. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, our experience with loss carryforwards not expiring unused and tax planning alternatives. A history of cumulative losses for a certain threshold period is a significant form of negative evidence used in the assessment, and the accounting rules require that we have a policy regarding the duration of the threshold period. If a cumulative loss threshold is met, forecasts of future profitability may not be used as positive evidence related to the realization of the deferred tax assets in the assessment. Consistent with practices in the home building and related industries, we have a policy of four years as our threshold period for cumulative losses.

     As of September 30, 2010, we had federal net operating loss, or NOL, carryforwards of approximately $1.401 billion that are available to offset future federal taxable income and will expire in the years 2026-2030. In addition, as of that date, we had federal alternative minimum tax credit carryforwards of approximately $51 million that are available to reduce future regular federal income taxes over an indefinite period. In order to fully realize the U.S. federal net deferred tax assets, taxable income of approximately $1.548 billion would need to be generated during the period before their expiration. In addition, we had federal foreign tax credit carryforwards of $6 million that will expire in 2015. As of September 30, 2010, we had gross deferred tax assets related to our state NOLs and tax credit carryforwards of approximately $264 million which expire in the years 2011-2030. In addition, we had gross deferred tax assets related to our foreign NOLs of approximately $6 million which do not expire.

     During periods prior to 2010, we established a valuation allowance against our deferred tax assets totaling $772 million. Based upon an evaluation of all available evidence and our losses for the first nine months of 2010, we recorded additional valuation allowances of $32 million in the first quarter and $25 million in the second quarter and $44 million in the third quarter against our deferred tax assets. Our cumulative loss position over the last four years was significant evidence supporting the recording of the additional valuation allowance. As a result, as of September 30, 2010, our deferred tax assets valuation allowance was $873 million. In future periods, the allowance could be reduced based on sufficient evidence indicating that it is more likely than not that a portion or all of our deferred tax assets will be realized.

     A noncash income tax benefit of $19 million was recorded during the first quarter of 2010 that related to the fourth quarter of 2009. Under current accounting rules, we are required to consider all items (including items recorded in other comprehensive income) in determining the amount of income tax benefit that results from a loss from continuing operations. As a result of reviewing the application of this requirement to our loss from continuing operations for 2009, during the first quarter of 2010 we recorded an additional income tax benefit related to the fourth quarter of 2009. This income tax benefit was exactly offset by income tax expense on other comprehensive income. However, while the income tax benefit is reported on the condensed consolidated statement of operations and reduced our net loss, the income tax expense on other comprehensive income is recorded directly to AOCI, which is a component of stockholders’ equity. Because the income tax expense on other comprehensive income is equal to the income tax benefit, our net deferred tax position is not impacted.

     Section 382 of the Internal Revenue Code, or Section 382, imposes limitations on a corporation’s ability to utilize NOLs if it experiences an “ownership change.” In general terms, an ownership change may result from

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transactions increasing the cumulative ownership of certain stockholders in the stock of a corporation by more than 50 percentage points over a three-year period. If we were to experience an “ownership change,” utilization of our NOLs would be subject to an annual limitation under Section 382 determined by multiplying the market value of our outstanding shares of stock at the time of the ownership change by the applicable long-term tax-exempt rate. If an ownership change had occurred as of September 30, 2010, our annual NOL utilization would have been limited to approximately $54 million per year. Any unused annual limitation may be carried over to later years within the allowed NOL carryforward period. The amount of the limitation may, under certain circumstances, be increased or decreased by built-in gains or losses held by us at the time of the change that are recognized in the five-year period after the change.

     We classify interest expense and penalties related to unrecognized tax benefits and interest income on tax overpayments as components of income taxes (benefit). As of September 30, 2010, the total amount of interest expense and penalties recognized on our condensed consolidated balance sheet was $4 million and $1 million, respectively. The total amount of unrecognized tax benefit that, if recognized, would affect our effective tax rate, was $33 million.

     Our federal income tax returns for 2006 and prior years have been examined by the Internal Revenue Service, or IRS. The U.S. federal statute of limitations remains open for the year 2004 and later years. For the years 2007 and 2008, we are currently under audit by the IRS. We are also under examination in various U.S. state and foreign jurisdictions. It is possible that these examinations may be resolved within the next 12 months. Due to the potential for resolution of the federal, state and foreign examinations and the expiration of various statutes of limitation, it is reasonably possible that our gross unrecognized tax benefit may change within the next 12 months by a range of $20 million to $25 million.

     Under the Act, beginning with 2013, we will be required to include the Medicare Part D subsidy we receive for providing prescription drug benefits to retirees in our taxable income for federal income tax purposes. Although this requirement does not become effective until 2013, we were required by accounting rules to record a charge of $20 million in the first quarter of 2010 for the expected effect of this requirement. This charge was offset by our valuation allowance and will not impact our income tax expense unless our judgment on the realizability of the deferred tax assets changes.

16. Litigation

CHINESE-MANUFACTURED DRYWALL LAWSUITS

L&W Supply Corporation is one of many defendants in lawsuits relating to Chinese-made wallboard installed in homes primarily in the southeastern United States during 2006 and 2007. The wallboard was made in China by a number of manufacturers, including Knauf Plasterboard (Tianjin) Co., and was sold or used by hundreds of distributors, contractors, and homebuilders. Knauf Tianjin is an affiliate or indirect subsidiary of Knauf Gips KG, a multinational manufacturer of building materials headquartered in Germany. The plaintiffs in these lawsuits, most of whom are homeowners, claim that the Chinese-made wallboard is defective and emits elevated levels of sulfur gases causing a bad smell and corrosion of copper or other metal surfaces. Plaintiffs also allege that the Chinese-made wallboard causes health problems such as respiratory problems and allergic reactions. The plaintiffs seek damages for the costs of removing and replacing the Chinese-made wallboard and other allegedly damaged property as well as damages for bodily injury, including medical monitoring in some cases. Most of the lawsuits against L&W Supply are part of the consolidated multi-district litigation titled In re Chinese-Manufactured Drywall Products Liability Litigation, MDL No. 2047, pending in New Orleans, Louisiana. The focus of the multi-district litigation to date has been on plaintiff’s property damage claims and not their alleged bodily injury claims.

     L&W Supply’s sales of the allegedly defective Knauf Tianjin wallboard, which were confined to the Florida region in 2006, were relatively limited. The amount of Knauf Tianjin wallboard potentially sold by L&W Supply Corporation could completely furnish approximately 250-300 average-size houses; however, the actual number of

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homes involved is greater because many homes contain a mixture of different brands of wallboard. Our records contain the addresses of the homes and other construction sites to which L&W Supply delivered wallboard, but do not specifically identify the manufacturer of the wallboard delivered. Therefore, where Chinese-made wallboard is identified in a home, we can determine from our records whether L&W Supply delivered wallboard to that home.

     To date, of the claims asserted where our records indicate we delivered wallboard to the home, we have identified approximately 210 homes where we have confirmed the presence of Knauf Tianjin wallboard or, based on the date and location, the wallboard in the home could be Knauf Tianjin wallboard. We have resolved the property damage claims relating to approximately 78 of those homes. Although the rate of new claims has slowed, we expect to receive additional Chinese-made wallboard claims but do not have sufficient information to estimate the likely number of additional claims.

     The vast majority of Chinese drywall claims made against L&W Supply Corporation relate to Knauf Tianjin board. However, we have received a few claims relating to other Chinese-made wallboard delivered by L&W Supply Corporation. Most, but not all, of this other Chinese-made wallboard was manufactured by Knauf at two other plants in China. We are not aware of any instances in which the wallboard from the other Knauf Chinese plants has been determined to cause odor or corrosion problems. If, however, the other Knauf Chinese-made wallboard is determined to cause such problems, claims against L&W Supply Corporation and its potential liability could increase.

     As of September 30, 2010, our accrual was $10 million for the estimated costs of resolving the Chinese wallboard property damage claims that have been asserted against L&W Supply. Our accrual is based on, among other things, the number of homes for which claims have been asserted against L&W Supply Corporation, the costs of resolving the claims for which an agreement has been reached, and our estimated costs of resolving the remaining property damage claims that have been asserted to date. Our accrual does not take into account legal fees and costs or the costs of resolving claims for bodily injury arising from exposure to Chinese wallboard. It also does not take into account potential future claims relating to Knauf Tianjin wallboard because we do not have sufficient information at this time to estimate the number of future claims that might be asserted. Our accrual also does not take into account any set-off for potential insurance recoveries or potential recoveries from the manufacturer of the wallboard, although we believe such recoveries are likely to offset a substantial portion of our costs for resolving claims. Considering all factors known to date, we do not believe that these claims and other similar claims that might be asserted will have a material adverse effect on our results of operations, financial position or cash flows. However, there can be no assurance that the lawsuits will not have such an effect.

DOMESTIC WALLBOARD LITIGATION

In the second quarter, two class action lawsuits were filed against United States Gypsum Company alleging that our wallboard, which is manufactured in the United States, has the same problems associated with some Chinese-made wallboard. Both of these lawsuits were voluntarily dismissed by the plaintiffs in the third quarter.

ENVIRONMENTAL LITIGATION

We have been notified by state and federal environmental protection agencies of possible involvement as one of numerous “potentially responsible parties” in a number of Superfund sites in the United States. As a potentially responsible party, we may be responsible to pay for some part of the cleanup of hazardous waste at those sites. In most of these sites, our involvement is expected to be minimal. In addition, we are involved in environmental cleanups of other property that we own or owned. We believe that we have properly accrued for our potential liability in connection with these matters. Our accruals take into account all known or estimated undiscounted costs associated with these sites, including site investigations and feasibility costs, site cleanup and remediation, certain legal costs, and fines and penalties, if any. However, we continue to review these accruals as additional information becomes available and revise them as appropriate.

OTHER LITIGATION

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We are named as defendants in other claims and lawsuits arising from our operations, including claims and lawsuits arising from the operation of our vehicles, product warranties, personal injury and commercial disputes. We believe that we have properly accrued for our potential liability in connection with these claims and suits, taking into account the probability of liability, whether our exposure can be reasonably estimated and, if so, our estimate of our liability or the range of our liability. We do not expect these or any other litigation matters involving USG to have a material adverse effect upon our results of operations, financial position or cash flows.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In the following Management’s Discussion and Analysis of Financial Condition and Results of Operations, “USG,” “we,” “our” and “us” refer to USG Corporation, a Delaware corporation, and its subsidiaries included in the condensed consolidated financial statements, except as otherwise indicated or as the context otherwise requires.

Overview

SEGMENTS

Through our subsidiaries, we are a leading manufacturer and distributor of building materials. We produce a wide range of products for use in new residential, new nonresidential, and residential and nonresidential repair and remodel construction as well as products used in certain industrial processes. We estimate that during the first nine months of 2010

• residential and nonresidential repair and remodel activity accounted for approximately 54% of our net sales,

• new nonresidential construction accounted for approximately 23% of our net sales,

• new residential construction accounted for approximately 21% of our net sales, and

• other activities accounted for approximately 2% of our net sales.

     Our operations are organized into three reportable segments: North American Gypsum, Building Products Distribution and Worldwide Ceilings.

North American Gypsum: North American Gypsum manufactures and markets gypsum and related products in the United States, Canada and Mexico. It includes United States Gypsum Company, or U.S. Gypsum, in the United States, the gypsum business of CGC Inc., or CGC, in Canada, and USG Mexico, S.A. de C.V., or USG Mexico, in Mexico. North American Gypsum’s products are used in a variety of building applications to finish the walls, ceilings and floors in residential, commercial and institutional construction and in certain industrial applications. Its major product lines include SHEETROCK^® brand gypsum wallboard, a line of joint compounds used for finishing wallboard joints also sold under the SHEETROCK^® brand name, DUROCK^® brand cement board, FIBEROCK^® brand gypsum fiber panels and SECUROCK^® brand glass mat sheathing used for building exteriors and gypsum fiber panels used as roof cover board.

Building Products Distribution: Building Products Distribution consists of L&W Supply Corporation and its subsidiaries, or L&W Supply, the leading specialty building products distribution business in the United States. It is a service-oriented business that stocks a wide range of construction materials. It delivers less-than-truckload quantities of construction materials to job sites and places them in areas where work is being done, thereby reducing the need for handling by contractors.

Worldwide Ceilings: Worldwide Ceilings manufactures and markets interior systems products worldwide. It includes USG Interiors, Inc., or USG Interiors, the international interior systems business managed as USG International, and the ceilings business of CGC. Worldwide Ceilings is a leading supplier of interior ceilings products used primarily in commercial applications. Worldwide Ceilings manufactures ceiling tile in the United States and ceiling grid in the United States, Canada, Europe and the Asia-Pacific region. It markets ceiling tile and ceiling grid in the United States, Canada, Mexico, Europe, Latin America and the Asia-Pacific region. It also manufactures and markets joint compound in Europe, Latin America and the Asia-Pacific region.

Geographic Information: For the first nine months of 2010, approximately 77% of our net sales were attributable to the United States, Canada accounted for approximately 12% of our net sales and other foreign countries accounted for the remaining 11%.

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FINANCIAL INFORMATION

Consolidated net sales in the third quarter of 2010 were $758 million, down 8% from the third quarter of 2009. An operating loss of $58 million and a net loss of $100 million, or $1.00 per diluted share, were incurred in the third quarter of 2010. These results compared with an operating loss of $92 million and a net loss of $94 million, or $0.96 per diluted share, in the third quarter of 2009.

     As of September 30, 2010, we had $544 million of cash and cash equivalents and marketable securities compared with $555 million as of June 30, 2010 and $690 million as of December 31, 2009. Uses of cash during the first nine months of 2010 included $129 million for interest, $28 million for severance and other obligations associated with restructuring activities and $18 million for capital expenditures. See Liquidity below for additional information related to our liquidity and expected cash requirements.

MARKET CONDITIONS AND OUTLOOK

Our businesses are cyclical in nature and sensitive to changes in general economic conditions, including, in particular, conditions in the North American housing and construction-based markets, which are our most significant markets. Those markets remained weak during the first nine months of 2010, although there were signs of stabilization in some sectors of them.

     Housing starts in the United States are a major source of demand for our products. As reported by the U.S. Census Bureau, housing starts were approximately 134,300 in the first quarter of 2010, 172,000 in the second quarter of 2010 and 161,000 in the third quarter of 2010, which are near the lowest levels recorded in the last 50 years. Industry analysts’ forecasts for new home construction in the United States in 2010 are for a range that does not exceed 630,000 units. The seasonally-adjusted annualized rate of housing starts reported by the U.S. Census Bureau increased to 608,000 units in August and 610,000 units in September after falling below 600,000 units in each of the first three months following expiration of the federal home buyer tax credit at the end of April 2010. We believe 2010 housing starts will be approximately 600,000 units. For 2011, industry analysts’ forecasts for new home construction in the United States are for a range of from 630,000 to 850,000 units. We currently estimate that 2011 housing starts will be approximately 750,000 units.

     As a result of the declines in new home construction, the repair and remodel market, which includes renovation of both residential and nonresidential buildings, currently accounts for the largest portion of our sales. Many buyers begin to remodel an existing home within two years of purchase. According to the National Association of Realtors, sales of existing homes in the United States increased to 5.2 million units in 2009 after decreasing in each of the previous two years from a high of 6.5 million units in 2006. The declines in existing home sales in the years before 2009 and continued concerns regarding home resale values have contributed to a decrease in demand for our products from the residential repair and remodel market. Nonresidential repair and remodel activity is driven by factors including lease turnover rates, discretionary business investment, job growth and governmental building-related expenditures. A number of industry analysts forecast that residential repair and remodel spending will begin to increase in the fourth quarter of 2010. We currently estimate that overall repair and remodel spending in 2010 will be approximately 2% above the 2009 level and that overall repair and remodel spending in 2011 will be approximately 5% above the 2010 level.

     Demand for our products from new nonresidential construction is determined by floor space for which contracts are signed. Installation of gypsum and ceilings products typically follows signing of construction contracts by about a year. According to McGraw-Hill Construction, total floor space for which new nonresidential construction contracts in the United States were signed declined 44% in 2009 compared with 2008. This followed an 18% decrease in 2008 compared with 2007. Floor space for which new nonresidential construction contracts were signed declined in the first nine months of 2010 compared with the first nine months of 2009. McGraw-Hill Construction forecasts that total floor space for which new nonresidential construction contracts in the United States are signed will decline approximately 14% in 2010 from the 2009 level and will increase 13% in 2011 from the 2010 level.

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     The markets that we serve, including, in particular, the housing and construction-based markets, are affected by economic conditions, the availability of credit, lending practices, interest rates, the unemployment rate and consumer confidence. An increase in interest rates, continued high levels of unemployment, continued restrictive lending practices, a decrease in consumer confidence or other adverse economic conditions could have a material adverse effect on our business, financial condition and results of operations. Our businesses are also affected by a variety of other factors beyond our control, including the inventory of unsold homes, which remains at an historically high level, the level of foreclosures, home resale rates, housing affordability, office and retail vacancy rates and foreign currency exchange rates. Since we operate in a variety of geographic markets, our businesses are subject to the economic conditions in each of these geographic markets. Those conditions vary regionally, with emerging markets generally recovering from the economic downturn more rapidly than developed regions. General economic downturns or localized downturns in the regions where we have operations may have a material adverse effect on our business, results of operations and financial condition.

     Our results of operations have been adversely affected by the economic downturn, the continued lack of availability of nonconforming mortgages and illiquidity in commercial construction markets. During the first nine months of 2010, our North American Gypsum segment continued to be adversely affected by the extended downturn in the residential housing market and other construction activity. Our Building Products Distribution segment, which serves both the residential and commercial markets, and our Worldwide Ceilings segment, which primarily serves the commercial markets, have been adversely affected by lower product shipments and selling prices resulting from the significant reduction in commercial construction activity.

     Industry shipments of gypsum wallboard in the United States (including imports) were an estimated 13.3 billion square feet in first nine months of 2010, down approximately 6% compared with 14.2 billion square feet in the first nine months of 2009. We are now estimating that industry shipments in the United States for all of 2010 will be below 18.0 billion square feet.

     U.S. Gypsum shipped 3.25 billion square feet of SHEETROCK^® brand gypsum wallboard in the first nine months of 2010, an 11% decrease from 3.66 billion square feet in the first nine months of 2009. The percentage decline of U.S. Gypsum’s wallboard shipments in the first nine months of 2010 compared with the first nine months of 2009 exceeded the decline for the industry primarily due to our efforts to maximize realization of the wallboard price increases we implemented earlier this year and to improve profitability. U.S. Gypsum’s share of the gypsum wallboard market in the United States was approximately 25% in the first nine months of 2010 compared to 27% in the first nine months of 2009. Its share of the gypsum wallboard market in the United States was approximately 25% in the third quarter of 2010, unchanged from the second quarter of 2010 and down from 26% in the third quarter of 2009.

     Currently, there is significant excess wallboard production capacity industry-wide in the United States. Industry capacity in the United States was approximately 34.4 billion square feet as of January 1, 2010. We estimate that the industry capacity utilization rate was approximately 51% during the first nine months of both 2010 and 2009. We project that the industry capacity utilization rate will remain at approximately that level for the balance of 2010. Despite our realization of some price improvement since the latter part of the first quarter, at such a low level of capacity utilization, there could be continued pressure on gypsum wallboard selling prices and gross margins.

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RESTRUCTURING AND OTHER INITIATIVES

We have been scaling back our operations in response to market conditions since the downturn began in 2006. Since mid-2006, we have temporarily idled or permanently closed approximately 3.6 billion square feet of our highest-cost wallboard manufacturing capacity.

     Since January 1, 2007, we have eliminated approximately 4,240 salaried and hourly positions, including 395 positions eliminated during the first nine months of 2010. As part of L&W Supply’s efforts to reduce its cost structure in light of market conditions, it has closed a total of 101 distribution centers since January 1, 2007. It re-opened two distribution centers during the third quarter of 2010 and served its customers from 163 centers in the United States as of September 30, 2010.

     We did not initiate any restructuring activities during the third quarter of 2010. We will continue to adjust our operations to the conditions in our markets.

     Historically, the housing and other construction markets that we serve have been deeply cyclical. Downturns in demand are typically steep and last several years, but they have typically been followed by periods of strong recovery. If the recovery from this cycle results in increases in demand similar to those realized in recoveries from past cycles, we believe we will generate significant cash flows when our markets recover. We regularly monitor forecasts prepared by external economic forecasters and review our facilities and other assets to determine which of them, if any, are impaired under applicable accounting rules. In the third quarter of 2010, we recorded long-lived asset impairment charges of $28 million related to three gypsum wallboard production facilities and one paper production facility that were previously idled. During the first six months of 2010, we recorded long-lived asset impairment charges of $5 million related to distribution centers that we closed and a gypsum wallboard production facility that we permanently closed during that period. We recorded these impairment charges because the carrying value of these facilities exceeded the estimated future undiscounted cash flows for their remaining useful lives due to the extended downturn in our markets and our forecasts regarding the timing and rate of the recovery in those markets. Because we believe that a significant recovery in the housing and other construction markets we serve is likely to begin in the next two to three years, we determined that there were no other impairments of our long-lived assets during the first nine months of 2010.

     However, if the downturn in our markets does not reverse or the downturn is significantly further extended, material write-downs or impairment charges may be required in the future. If these conditions were to materialize or worsen, or if there is a fundamental change in the housing and other construction markets we serve, which individually or collectively lead to a significantly extended downturn or decrease in demand, we may permanently close production and distribution facilities and material restructuring and impairment charges may be necessary. The magnitude and timing of those possible charges would be dependent on the severity and duration of the extended downturn, should it materialize, and cannot be determined at this time. Any material cash or noncash restructuring or impairment charges, including write-downs of property, plant and equipment, would have a material adverse effect on our results of operations and financial condition. We will continue to monitor economic forecasts and their effect on our facilities to determine whether any of our assets are impaired.

     Our focus on costs and efficiencies, including capacity closures and overhead reductions, has helped to mitigate the effects of the downturn in all of our markets. As economic and market conditions warrant, we will evaluate alternatives to further reduce costs, improve operational efficiency and maintain adequate liquidity. Actions to reduce costs and improve efficiencies could require us to record additional restructuring charges. See the discussion under Liquidity and Capital Resources below for information regarding our cash position and credit facilities. See Part I, Item 1A, Risk Factors, in our 2009 Annual Report on Form 10-K for additional information regarding conditions affecting our businesses, the possibility that additional capital investment would be required to address future environmental laws and regulations and the effects of climate change and other risks and uncertainties that affect us.

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KEY OBJECTIVES AND STRATEGIES

While adjusting our operations during this challenging business cycle, we are continuing to focus on the following key objectives and strategic priorities:

Objectives:

• extend our customer satisfaction leadership;

• improve operating efficiencies and reduce costs;

• maintain financial flexibility;

Strategic Priorities:

• strengthen our core businesses;

• expand internationally;

• grow product adjacencies by expanding our current product lines; and

• accelerate innovation.

Consolidated Results of Operations

							% Increase
(dollars in millions, except per-share data)	2010			2009			(Decrease)
Three Months ended September 30:
Net sales	$	758		$	822			(8	)%
Cost of products sold		707			784			(10	)%
Gross profit		51			38			34	%
Selling and administrative expenses		74			67			10	%
Restructuring and long-lived asset impairment charges		35			22			59	%
Goodwill and other intangible asset impairment charges		—			41			—
Operating loss		(58	)		(92	)		(37	)%
Interest expense		45			42			7	%
Interest income		(1	)		(2	)		(50	)%
Other income, net		—			(1	)		—
Income tax benefit		(2	)		(37	)		(95	)%
Net loss		(100	)		(94	)		6	%
Diluted loss per share		(1.00	)		(0.96	)		4	%
Nine Months ended September 30:
Net sales	$	2,243		$	2,515			(11	)%
Cost of products sold		2,123			2,378			(11	)%
Gross profit		120			137			(12	)%
Selling and administrative expenses		231			219			5	%
Restructuring and long-lived asset impairment charges		54			51			6	%
Goodwill and other intangible asset impairment charges		—			41			—
Operating loss		(165	)		(174	)		(5	)%
Interest expense		134			120			12	%
Interest income		(3	)		(3	)		—
Other income, net		—			(10	)		—
Income tax benefit		(12	)		(92	)		(87	)%
Net loss		(284	)		(189	)		50	%
Diluted loss per share		(2.85	)		(1.91	)		49	%

NET SALES

Consolidated net sales in the third quarter of 2010 were down $64 million, or 8%, compared with the third quarter of 2009. This decrease reflected a 7% decline in net sales for North American Gypsum, a 15% decline in net sales for Building Products Distribution and slightly higher net sales for Worldwide Ceilings. The lower level of net sales in the third quarter of 2010 for North American Gypsum was largely attributable to a 12% decline in U.S. Gypsum’s SHEETROCK^® brand gypsum wallboard volume and a 1% decrease in average gypsum wallboard selling prices compared with the third quarter of 2009. Net sales for Building Products Distribution were down primarily due to a 24% decrease in gypsum wallboard volume, partially offset by 6% higher gypsum wallboard selling prices, and a 12% decrease in sales of other products. Net sales for Worldwide Ceilings were up slightly reflecting increased shipments of ceiling tile (up 9%) in the United States, partially offset by lower demand for several product lines in

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Europe and Latin America.

     Consolidated net sales in the first nine months of 2010 were down $272 million, or 11%, compared with the first nine months of 2009. This decrease reflected a 7% decline in net sales for North American Gypsum, a 20% decline in net sales for Building Products Distribution and a 1% decline in net sales for Worldwide Ceilings. The lower level of net sales in the first nine months of 2010 for North American Gypsum was largely attributable to an 11% decline in U.S. Gypsum’s SHEETROCK^® brand gypsum wallboard volume and a 6% decrease in average gypsum wallboard selling prices. Net sales for Building Products Distribution were down primarily due to a 21% decrease in gypsum wallboard volume, 4% lower gypsum wallboard selling prices and a 19% decrease in sales of other products. Net sales for Worldwide Ceilings were down primarily due to lower volumes in the United States for ceiling grid (down 2%) and ceiling tile (down 4%), partially offset by increased demand for several product lines in Europe and Latin America.

COST OF PRODUCTS SOLD

Cost of products sold for the third quarter of 2010 decreased $77 million, or 10%, compared with the third quarter of 2009 primarily reflecting lower product volumes. Manufacturing costs per unit for U.S. Gypsum’s SHEETROCK^® brand gypsum wallboard were down 2% in the third quarter of 2010 compared with the third quarter of 2009. A 14% decrease in per unit costs for energy was partially offset by a 4% increase in per unit costs for raw materials, primarily wastepaper, and a 2% increase in per unit fixed costs due to lower gypsum wallboard production volume. Compared to the second quarter of 2010, SHEETROCK^® brand gypsum wallboard manufacturing costs per unit decreased 1%.

     Cost of products sold for the first nine months of 2010 decreased $255 million, or 11%, compared with the first nine months of 2009 primarily reflecting lower product volumes. Manufacturing costs per unit for U.S. Gypsum’s SHEETROCK^® brand gypsum wallboard were down 3% in the first nine months of 2010 compared with the first nine months of 2009. A 15% decrease in per unit costs for energy was partially offset by a 5% increase in per unit fixed costs due to lower gypsum wallboard production volume.

     For USG Interiors, third quarter 2010 manufacturing costs per unit for ceiling grid increased compared to the third quarter of 2009 primarily due to increasing steel costs during the quarter, but remained favorable for the first nine months of 2010 compared to first nine months of 2009. Manufacturing costs per unit for ceiling tile decreased in the third quarter of 2010, but were higher for first nine months of 2010 compared to the first nine months of 2009 primarily due to higher per unit costs for raw materials, primarily wool and wastepaper, and higher per unit fixed costs due to lower ceiling tile production volume. These unfavorable factors were partially offset by lower per unit costs for energy.

GROSS PROFIT

Gross profit for the third quarter of 2010 increased $13 million, or 34%, compared with the third quarter of 2009. Gross profit as a percentage of net sales was 6.7% for the third quarter of 2010 compared with 4.6% for the third quarter of 2009. The higher percentage for the third quarter of 2010 was primarily due to lower product costs for many product lines that more than offset the impact of lower volume.

     Gross profit for the first nine months of 2010 decreased $17 million, or 12%, compared with the first nine months of 2009. Gross profit as a percentage of net sales was 5.3% for the first nine months of 2010 compared with 5.4% for the first nine months of 2009. The lower percentage for the first nine months of 2010 was primarily due to lower volume and gross margin for gypsum wallboard.

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SELLING AND ADMINISTRATIVE EXPENSES

Selling and administrative expenses totaled $74 million in the third quarter of 2010 compared with $67 million in the third quarter of 2009, an increase of $7 million, or 10%, primarily reflecting higher expenses associated with our marketing programs and our employee retirement plans. As a percentage of net sales, selling and administrative expenses were 9.8% for the third quarter of 2010 and 8.2% for the third quarter of 2009.

     Selling and administrative expenses totaled $231 million in the first nine months of 2010 compared with $219 million in the first nine months of 2009, an increase of $12 million, or 5%, primarily reflecting higher expenses associated with our employee retirement plans and long-term, share-based incentive compensation plan. As a percentage of net sales, selling and administrative expenses were 10.3% for the first nine months of 2010 and 8.7% for the first nine months of 2009.

RESTRUCTURING AND LONG-LIVED ASSET IMPAIRMENT CHARGES

Third quarter 2010 restructuring and long-lived asset impairment charges totaled $35 million. These charges included $6 million for lease obligations and $1 million for severance related to prior-period restructuring activities. The charges for the quarter also included $28 million for long-lived asset impairments related to the write-down of the carrying values of machinery, equipment and buildings at the temporarily idled gypsum wallboard production facilities in Baltimore, Md., and Stony Point, N.Y., one of the temporarily idled gypsum wallboard production facilities in Jacksonville, Fla. and the temporarily idled paper production facility in Jacksonville, Fla. The carrying value of the machinery, equipment and buildings exceeded the estimated future undiscounted cash flows for their remaining useful lives due to the extended downturn in our markets and our forecasts regarding the timing and rate of recovery in those markets.

     Total restructuring and long-lived asset impairment charges for the first nine months of 2010 were $54 million. This amount included (1) the $35 million of third quarter charges described above, (2) $7 million of second quarter charges, of which $4 million was for severance, $1 million was for long-lived asset impairments and lease terminations and $2 million was for other exit costs related to the curtailment of operations at a mining facility in Canada, the closure of one distribution center, the closure of an office and warehouse in Europe and continuing charges and adjustments related to prior-period restructuring initiatives and (3) $12 million of first quarter charges, of which $5 million was for severance, $5 million was for long-lived asset impairments and lease terminations and $2 million was for other exit costs related to the closure of four distribution centers, a gypsum wallboard production facility in Southard, Okla., that was permanently closed in April 2010 and the gypsum wallboard production facility in Stony Point, N.Y., that was temporarily idled in June 2010.

     Third quarter 2009 restructuring and long-lived asset impairment charges totaled $22 million and consisted of $10 million for asset impairments, $6 million for lease terminations, $4 million for severance and $2 million for other exit costs. Total restructuring and long-lived asset impairment charges for the first nine months of 2009 were $51 million. This amount included the (1) $22 million of third quarter charges described above, (2) $19 million of second quarter charges, of which $6 million was for severance, $5 million was for lease terminations, $3 million was for asset impairments and $5 million was for the write-off of repair parts and other exit costs and (3) $10 million of first quarter charges, of which $7 million related to leased space that we no longer occupy in our corporate headquarters, $2 million was for severance and $1 million was for costs related to production facilities that were temporarily idled or permanently closed prior to 2009.

     Restructuring-related payments totaled $28 million in the first nine months of 2010. We expect future payments to be approximately $10 million during the remainder of 2010, $14 million in 2011 and $9 million after 2011. All restructuring-related payments in 2010 were funded with cash from operations or cash on hand. We also expect that the future payments will be funded with cash from operations or cash on hand. See Note 3 to the condensed consolidated financial statements for additional information related to our restructuring reserve.

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GOODWILL AND OTHER INTANGIBLE ASSET IMPAIRMENT CHARGES

In the third quarter of 2009, we recorded noncash impairment charges totaling $41 million associated with the goodwill and other intangible assets of L&W Supply. Of this amount, $12 million related to L&W Supply’s remaining goodwill balance and $29 million related to its intangible assets associated with trade names.

INTEREST EXPENSE

Interest expense was $45 million in the third quarter of 2010 compared with $42 million in the third quarter of 2009. For the first nine months of 2010, interest expense was $134 million compared with $120 million for the first nine months of 2009. Interest expense was higher in the 2010 periods primarily due to higher levels of borrowings.

OTHER INCOME, NET

Other income, net was zero in the third quarter of 2010 compared with $1 million in the third quarter of 2009. Other income, net was zero in the first nine months of 2010, while other income, net of $10 million in the first nine months of 2009 reflected the reversal of the remaining $10 million of embedded derivative liability related to our $400 million of 10% convertible senior notes as a result of the approval of the conversion feature of the notes by our stockholders in February 2009.

INCOME TAX BENEFIT

Income tax benefit was $2 million in the third quarter of 2010, and our income tax benefit was $37 million in the third quarter of 2009. We had an effective tax benefit rate of 1.5% for the third quarter of 2010 and a tax benefit rate of 28.3% for the third quarter of 2009. Income tax benefit was $12 million for the first nine months of 2010 and $92 million for the first nine months of 2009. Our effective tax benefit rates were 4.0% for the first nine months of 2010 and 32.8% for the first nine months of 2009. Since recording a full valuation allowance against the federal and most state deferred tax assets, the effective tax rate in 2010 is lower as we do not benefit losses in those jurisdictions and have a provision in foreign and some state jurisdictions. In addition, during the first quarter of 2010, we recorded a noncash income tax benefit of $19 million related to the fourth quarter of 2009 resulting from the requirement to consider all items (including items recorded in other comprehensive income) in determining the amount of income tax benefit that results from a loss from continuing operations. This income tax benefit was offset by income tax expense on other comprehensive income.

NET LOSS

A net loss of $100 million, or $1.00 per diluted share, was recorded in the third quarter of 2010 compared with a net loss of $94 million, or $0.96 per diluted share, in the third quarter of 2009. A net loss of $284 million, or $2.85 per diluted share, was recorded for the first nine months of 2010 compared with a net loss of $189 million, or $1.91 per diluted share, for the first nine months of 2009.

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Core Business Results of Operations

	Three Months						Nine Months
	ended September 30,						ended September 30,
(millions)	2010 (a)			2009 (b)			2010 (a)			2009 (b)
Net Sales:
North American Gypsum:
United States Gypsum Company	$	325		$	354		$	993		$	1,117
CGC Inc. (gypsum)		70			69			221			194
USG Mexico, S.A. de C.V.		37			37			110			106
Other (c)		7			10			22			30
Eliminations		(26	)		(27	)		(81	)		(84	)
Total		413			443			1,265			1,363
Building Products Distribution:
L&W Supply Corporation		281			329			811			1,019
Worldwide Ceilings:
USG Interiors, Inc.		114			108			328			339
USG International		59			60			173			167
CGC Inc. (ceilings)		15			14			48			42
Eliminations		(14	)		(9	)		(38	)		(31	)
Total		174			173			511			517
Eliminations		(110	)		(123	)		(344	)		(384	)
Total	$	758		$	822		$	2,243		$	2,515
Operating Profit (Loss):
North American Gypsum:
United States Gypsum Company	$	(46	)	$	(31	)	$	(99	)	$	(77	)
CGC Inc. (gypsum)		3			1			16			2
USG Mexico, S.A. de C.V.		5			4			12			9
Other (c)		(5	)		(5	)		(18	)		(6	)
Total		(43	)		(31	)		(89	)		(72	)
Building Products Distribution:
L&W Supply Corporation		(24	)		(73	)		(85	)		(109	)
Worldwide Ceilings:
USG Interiors, Inc.		17			16			47			48
USG International		3			2			8			4
CGC Inc. (ceilings)		1			3			7			5
Total		21			21			62			57
Corporate		(13	)		(12	)		(50	)		(53	)
Eliminations		1			3			(3	)		3
Total	$	(58	)	$	(92	)	$	(165	)	$	(174	)

(a)	The total operating loss for the third quarter of 2010 included restructuring and long-lived asset impairment charges totaling $35 million. On a segment basis, $30 million of the charges related to North American Gypsum and $5 million to Building Products Distribution. The total operating loss for the first nine months of 2010 included restructuring and long-lived asset impairment charges totaling $54 million. On a segment basis, $40 million of the charges related to North American Gypsum and $14 million to Building Products Distribution.
(b)	The total operating loss for the third quarter of 2009 included restructuring and long-lived asset impairment charges totaling $22 million. On a segment basis, $11 million of the charges related to North American Gypsum, $8 million to Building Products Distribution, $2 million to Worldwide Ceilings and $1 million to Corporate. The total operating loss for the first nine months of 2009 included restructuring and long-lived asset impairment charges totaling $51 million. On a segment basis, $24 million of the charges related to North American Gypsum, $14 million to Building Products Distribution, $3 million to Worldwide Ceilings and $10 million to Corporate. The total operating losses for the third quarter and first nine months of 2009 also included goodwill and other intangible asset impairment charges of $41 million related to Building Products Distribution.
(c)	Includes a shipping company in Bermuda and a mining operation in Nova Scotia, Canada.

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NORTH AMERICAN GYPSUM

Net sales for North American Gypsum were $413 million in the third quarter of 2010 compared with $443 million in the third quarter of 2009, a decline of $30 million, or 7%. An operating loss of $43 million was incurred in the third quarter of 2010 compared with an operating loss of $31 million in the third quarter of 2009. Net sales were $1.265 billion in the first nine months of 2010 compared with $1.363 billion in the first nine months of 2009, a decline of $98 million, or 7%. An operating loss of $89 million was incurred in the first nine months of 2010 compared with an operating loss of $72 million in the first nine months of 2009.

United States Gypsum Company: Net sales in the third quarter of 2010 declined $29 million, or 8%, compared with the third quarter of 2009. Approximately $17 million of the decrease was attributable to a 12% decline in SHEETROCK^® brand gypsum wallboard volume and approximately $1 million of the decrease was attributable to a 1% decrease in average gypsum wallboard selling prices. Net sales for SHEETROCK^® brand joint treatment products declined $6 million, while net sales of other complementary products were down $5 million compared with the third quarter of 2009.

     An operating loss of $46 million was recorded in the third quarter of 2010 compared with an operating loss of $31 million in the third quarter of 2009. The $15 million unfavorable change in operating loss reflected a $19 million increase in restructuring and long-lived asset impairment charges and a $4 million decrease in gross profit for SHEETROCK^® brand joint treatment products, partially offset by an aggregate operating profit improvement of $8 million primarily due to increased gross profit for several complementary product lines, including DUROCK^® brand cement board and FIBEROCK^® brand gypsum fiber panels. A $2 million decrease due to the lower gypsum wallboard volume was offset by a $2 million increase due to a higher gypsum wallboard gross margin as a result of 2% lower per unit costs.

     New housing construction remained weak through the third quarter of 2010, resulting in reduced demand for gypsum wallboard compared to the third quarter of 2009. U.S. Gypsum shipped 1.03 billion square feet of SHEETROCK^® brand gypsum wallboard in the third quarter of 2010, a 12% decrease from 1.17 billion square feet in the third quarter of 2009. We estimate that the industry capacity utilization rate averaged approximately 50% for the third quarter of 2010. The capacity utilization rate was approximately 42% for U.S. Gypsum during that quarter.

     In the third quarter of 2010, our nationwide average realized selling price for SHEETROCK^® brand gypsum wallboard was $114.45 per thousand square feet, down 1% from $115.33 in the third quarter of 2009 and up slightly from $114.17 in the second quarter 2010.

     Manufacturing costs per unit for U.S. Gypsum’s SHEETROCK^® brand gypsum wallboard were down 2% in the third quarter of 2010 compared with the third quarter of 2009. A 14% decrease in per unit costs for energy was partially offset by a 4% increase in per unit costs for raw materials, primarily wastepaper, and a 2% increase in per unit fixed costs due to lower gypsum wallboard production volume. Compared to the second quarter of 2010, SHEETROCK^® brand gypsum wallboard manufacturing costs per unit decreased 1%.

     Net sales and gross profit for SHEETROCK^® brand joint treatment products declined $6 million and $4 million, respectively, for the third quarter of 2010 compared with the third quarter of 2009. These results reflected 8% lower joint compound volume partially offset by 2% higher average realized selling prices. Manufacturing costs per unit for joint compound products increased 6%, primarily due to increased packaging costs. Net sales of DUROCK^® brand cement board increased in the third quarter of 2010 compared with the third quarter of 2009 due to 4% higher selling prices, while volume was unchanged. Gross profit for cement board also benefited from 3% lower per unit manufacturing costs. Net sales for FIBEROCK^® brand gypsum fiber panels also increased in the third quarter of 2010 compared with the third quarter of 2009 reflecting a 6% increase in volume partially offset by a 5% decrease in selling prices. Gross profit for gypsum fiber panels increased due to the increased volume and 8% lower per unit manufacturing costs.

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CGC Inc.: Net sales increased $1 million, or 1%, in the third quarter of 2010 compared with the third quarter of 2009. The favorable effects of currency translation increased net sales by $4 million, while net sales of SHEETROCK^® brand gypsum wallboard declined $1 million and net sales of nonwallboard products decreased $2 million. Operating profit increased to $3 million in the third quarter of 2010 compared with $1 million in the third quarter of 2009 primarily due to an aggregate $2 million increase in gross profit for nonwallboard products.

USG Mexico, S.A. de C.V.: Net sales in the third quarter of 2010 for our Mexico-based subsidiary were $37 million, unchanged from the third quarter of 2009. A $2 million decrease in sales of SHEETROCK^® brand gypsum wallboard was offset by an aggregate $2 million increase in net sales of complementary products. The lower level of gypsum wallboard sales reflected a 27% decrease in volume, partially offset by a 5% increase in selling prices. Operating profit was $5 million in the third quarter of 2010 compared with $4 million in the third quarter of 2009.

BUILDING PRODUCTS DISTRIBUTION

L&W Supply’s net sales in the third quarter of 2010 were $281 million, down $48 million, or 15%, compared with the third quarter of 2009. A 24% decrease in gypsum wallboard shipments, which adversely affected net sales by $26 million, was partially offset by a 6% increase in average gypsum wallboard selling prices which favorably affected sales by $5 million. Net sales of construction metal products decreased $7 million, or 10%, while net sales of ceilings products increased $1 million, or 2%. Net sales of all other nonwallboard products decreased $21 million, or 23%. As a result of lower product volumes, same-location net sales for the third quarter of 2010 were down 5% compared with the third quarter of 2009.

     An operating loss of $24 million was incurred in the third quarter of 2010 compared with an operating loss of $73 million in the third quarter of 2009. The $49 million favorable change in operating loss primarily reflected a $41 million charge recorded in the third quarter of 2009 for goodwill and other intangible asset impairment, a $15 million decrease in operating expenses and a $3 million decrease in restructuring charges. The lower gypsum wallboard shipments adversely affected operating profit by $5 million. A 6% decline in gypsum wallboard gross margin reduced operating profit by $1 million. The decline in wallboard gross margin was attributable to a reduction in vendor rebates as a result of the decrease in volume. Gross profit for other product lines decreased $4 million.

     For the first nine months of 2010, L&W Supply’s net sales were $811 million compared with $1.019 billion for the first nine months of 2009, a decline of 20%. An operating loss of $85 million was incurred in the first nine months of 2010 compared with an operating loss of $109 million in the first nine months of 2009.

     L&W Supply re-opened two distribution centers and opened one new center during the third quarter of 2010 and served its customers from 163 centers in the United States as of September 30, 2010. L&W Supply operated 164 centers as of December 31, 2009 and 184 centers as of September 30, 2009.

WORLDWIDE CEILINGS

Net sales for Worldwide Ceilings were $174 million in the third quarter of 2010 compared with $173 million in the third quarter of 2009. Operating profit in the third quarter of 2010 was $21 million, unchanged from the third quarter of 2009. For the first nine months of 2010, net sales were $511 million compared with $517 million in the first nine months of 2009, a decrease of 1%. However, operating profit increased $5 million, or 9%, to $62 million compared with $57 million for first nine months of 2009.

USG Interiors, Inc.: Net sales in the third quarter of 2010 for our domestic ceilings business were $114 million and its operating profit was $17 million. These results compared with net sales of $108 million and operating profit of $16 million for the third quarter of 2009.

     Net sales of ceiling tile increased $3 million in the third quarter of 2010 compared with the third quarter of 2009 reflecting a 9% increase in volume, partially offset by 2% lower selling prices. Sales of ceiling grid were virtually unchanged as 2% higher selling prices were offset by 2% lower volume. Sales of other products increased $3 million.

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     Gross profit for ceiling tile and other products increased an aggregate of $1 million, while gross profit for ceiling grid was unchanged in the third quarter of 2010 compared with the third quarter of 2009. A modest increase in gross margin for ceiling grid was offset by the lower volume.

USG International: USG International reported net sales of $59 million in the third quarter of 2010 compared with $60 million in the third quarter of 2009. Operating profit was $3 million in the third quarter of 2010 compared with $2 million in the third quarter of 2009 which included $2 million in restructuring charges. These results reflected reduced demand for ceiling grid in Europe and complementary gypsum products in Latin America.

CGC Inc.: Net sales were $15 million in the third quarter of 2010, an increase of $1 million compared with the third quarter of 2009. Operating profit declined to $1 million compared with $3 million in the third quarter of 2009 primarily due to lower grid volume and higher ceiling tile and grid costs.

Liquidity and Capital Resources

LIQUIDITY

As of September 30, 2010, we had $544 million of cash and cash equivalents and marketable securities compared with $555 million as of June 30, 2010 and $690 million as of December 31, 2009. Uses of cash during the first nine months of 2010 included $129 million for interest, $28 million for severance and other obligations associated with restructuring activities and $18 million for capital expenditures. Our total liquidity as of September 30, 2010 was $688 million, including $144 million in borrowing availability under our revolving credit facilities.

     Our cash and marketable securities are invested pursuant to an investment policy that has preservation of principal as its primary objective. The policy includes provisions regarding diversification, credit quality and maturity profile that are designed to minimize the overall risk profile of our investment portfolio. The securities in the portfolio are subject to normal market fluctuations. See Note 6 to the condensed consolidated financial statements for additional information regarding our investments in marketable securities.

     Our credit facility, which is guaranteed by, and secured by trade receivables and inventory of, our significant domestic subsidiaries, matures in August 2012 and provides for revolving loans of up to $500 million based upon a borrowing base determined by reference to the levels of trade receivables and inventory securing the facility. Availability under the credit facility will increase or decrease depending on changes to the borrowing base over time. The facility has a single financial covenant — a minimum fixed charge coverage ratio — that will only apply if borrowing availability under the facility is less than $75 million. We do not satisfy the fixed charge coverage ratio as of the date of this report. As of the most recent borrowing base report delivered under the credit facility, which reflects trade receivables and inventory as of September 30, 2010, our borrowing availability under the credit facility, taking into account outstanding letters of credit of $80 million and the $75 million availability requirement for the minimum fixed charge coverage ratio not to apply, was $115 million. We also have Can. $30 million available for borrowing under CGC’s credit facility. The U.S. dollar equivalent of borrowings available under CGC’s credit facility as of September 30, 2010 was $29 million.

     We expect that our total capital expenditures for 2010 may increase to $50 million, depending on the timing of several projects, compared with $44 million for 2009. In the first nine months of 2010, our capital expenditures totaled $18 million. Interest payments will increase to approximately $170 million in 2010 compared with $139 million in 2009 due to the higher level of debt outstanding. We have no term debt maturities until 2014, other than approximately $7 million of annual debt amortization under our ship mortgage facility.

     We believe that cash on hand, including marketable securities, cash available from future operations and our credit facilities will provide sufficient liquidity to fund our operations for at least the next 12 months. Cash requirements include, among other things, interest, capital expenditures, working capital needs, debt amortization and other contractual obligations. Additionally, we may consider selective strategic transactions and alliances that we believe create value, including mergers and acquisitions, joint ventures, partnerships or other business

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combinations, restructurings and dispositions. Transactions of these types, if any, may result in material cash expenditures or proceeds.

     Despite our present liquidity position, an uncertainty exists as to whether we will have sufficient cash flows to weather a significantly extended downturn or further significant decrease in demand for our products. As discussed above, during the last several years, we took actions to reduce costs and increase our liquidity. We will continue our efforts to maintain our financial flexibility, but there can be no assurance that our efforts will be sufficient to withstand the impact of extended negative economic conditions. Under those conditions, our funds from operations and the other sources referenced above may not be sufficient to fund our operations. Due to the extended downturn in our markets and uncertainty concerning the timing and pace of the expected recovery, we are considering accessing the financial markets to obtain additional financing to enhance our liquidity. There can be no assurance that we will be able to obtain financing on acceptable terms, or at all.

CASH FLOWS

The following table presents a summary of our cash flows:

	Nine Months
	ended September 30,
(millions)	2010			2009
Net cash provided by (used for):
Operating activities	$	(126	)	$	70
Investing activities		(160	)		(34	)
Financing activities		(6	)		109
Effect of exchange rate changes on cash		2			5
Net (decrease) increase in cash and cash equivalents	$	(290	)	$	150

Operating Activities: The variation between the first nine months of 2010 and the first nine months of 2009 was largely attributable to a $54 million increase in receivables in the 2010 period compared with a $58 million decrease in the 2009 period. The variation in receivables largely reflected 5% higher net sales in the third quarter of 2010 compared with the fourth quarter of 2009, while net sales declined 16% in the third quarter of 2009 compared with the fourth quarter of 2008. In addition, inventories increased $8 million in the first nine months of 2010 compared with an $82 million decrease in the same prior-year period. The decrease in the 2009 period primarily reflected a company-wide initiative to optimize inventory levels relative to business conditions.

Investing Activities: The variation between the first nine months of 2010 and the first nine months of 2009 reflects a net increase of $144 million in marketable securities during the 2010 period, partially offset by an $18 million decrease in capital spending.

Financing Activities: The variation between the first nine months of 2010 and the first nine months of 2009 primarily reflects a lower level of financing activities during the 2010 period compared with our completion of an offering of $300 million of 9.75% senior notes in the third quarter of 2009, the effect of which was partially offset by our first quarter 2009 repayment of $190 million of outstanding borrowings under our revolving credit facility.

CAPITAL EXPENDITURES

Capital spending amounted to $18 million in the first nine months of 2010 compared with $36 million in the first nine months of 2009. Because of the high level of investment that we made in our operations in 2006 through 2008 and the current market environment, we plan to limit our capital spending in 2010 to no more than approximately $50 million depending on the timing of several projects. Approved capital expenditures for the replacement, modernization and expansion of operations totaled $246 million as of September 30, 2010 compared with $242 million as of December 31, 2009. Approved expenditures as of September 30, 2010 included $210 million for construction of a new, low-cost gypsum wallboard plant in Stockton, Calif. Because of the current market

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environment, commencement of construction of this plant has been delayed at least until 2012. We expect to fund our capital expenditures program with cash from operations or cash on hand and, if determined to be appropriate and they are available, borrowings under our revolving credit facility or other financings.

WORKING CAPITAL

As of September 30, 2010, working capital (current assets less current liabilities) amounted to $747 million, and the ratio of current assets to current liabilities was 2.45-to-1. As of December 31, 2009, working capital amounted to $939 million, and the ratio of current assets to current liabilities was 2.91-to-1.

Cash and Cash Equivalents and Marketable Securities: As of September 30, 2010, we had $544 million of cash and cash equivalents and marketable securities compared with $555 million as of June 30, 2010 and $690 million as of December 31, 2009. Uses of cash during the first nine months of 2010 included $129 million for interest, $28 million for severance and other obligations associated with restructuring activities and $18 million for capital expenditures.

Receivables: As of September 30, 2010, receivables were $411 million, up $54 million, or 15%, from $357 million as of December 31, 2009. This increase primarily reflected a $52 million, or 18%, increase in customer receivables primarily due to a 10% increase in consolidated net sales in September 2010 compared with December 2009 and a reduction in customer rebate accruals during the first nine months of 2010.

Inventories: As of September 30, 2010, inventories were $297 million, up $8 million, or 3%, from $289 million as of December 31, 2009 reflecting an increase of $5 million in finished goods and work-in-progress and an increase of $3 million in raw materials.

Accounts Payable: As of September 30, 2010, accounts payable were $223 million, up $18 million, or 9%, from $205 million as of December 31, 2009 primarily due to a 2% increase in cost of goods sold in September 2010 compared with December 2009 and our continued efforts to extend payment terms with a substantial number of our suppliers.

Accrued Expenses: As of September 30, 2010, accrued expenses were $276 million, up $3 million, or 1% from $273 million as of December 31, 2009. The higher level of accrued expenses primarily reflected an increase in accruals of $7 million for derivatives related to our natural gas and foreign exchange hedging activity, $2 million for property taxes and $1 million for group health insurance, partially offset by a decrease of $8 million in accruals for incentive compensation plans.

MARKETABLE SECURITIES

We have been investing in marketable securities in 2010. These securities are classified as available-for-sale securities and reported at fair value with unrealized gains and losses excluded from earnings and reported in accumulated other comprehensive income (loss) on our condensed consolidated balance sheet. The realized and unrealized gains and losses for the nine months ended September 30, 2010 were immaterial. See Note 6 to the condensed consolidated financial statements for additional information regarding our investments in marketable securities.

DEBT

Total debt, consisting of senior notes, convertible senior notes, industrial revenue bonds and outstanding borrowings under our ship mortgage facility, amounted to $1.959 billion as of September 30, 2010 compared with $1.962 billion as of December 31, 2009. There were no borrowings outstanding under our revolving credit facilities as of September 30, 2010. See Note 8 to the condensed consolidated financial statements for additional information regarding our debt.

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Realization of Deferred Tax Asset

An income tax benefit of $2 million was recorded in the third quarter of 2010. The effective tax benefit rate for the quarter was 1.5%.

     ASC 740, “Accounting for Income Taxes,” requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance if, based on the available evidence, it is more likely than not that such assets will not be realized. The need to establish valuation allowances for deferred tax assets is assessed periodically. In assessing the requirement for, and amount of, a valuation allowance in accordance with the more-likely-than-not standard, we give appropriate consideration to all positive and negative evidence related to the realization of the deferred tax assets. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, our experience with loss carryforwards not expiring unused and tax planning alternatives. A history of cumulative losses for a certain threshold period is a significant form of negative evidence used in the assessment, and the accounting rules require that we have a policy regarding the duration of the threshold period. If a cumulative loss threshold is met, forecasts of future profitability may not be used as positive evidence related to the realization of the deferred tax assets in the assessment. Consistent with practices in the home building and related industries, we have a policy of four years as our threshold period for cumulative losses.

     As of September 30, 2010, we had federal net operating loss, or NOL, carryforwards of approximately $1.401 billion that are available to offset future federal taxable income and will expire in the years 2026-2030. In addition, as of that date, we had federal alternative minimum tax credit carryforwards of approximately $51 million that are available to reduce future regular federal income taxes over an indefinite period. In order to fully realize the U.S. federal net deferred tax assets, taxable income of approximately $1.548 billion would need to be generated during the period before their expiration. In addition, we had federal foreign tax credit carryforwards of $6 million that will expire in 2015. As of September 30, 2010, we had gross deferred tax assets related to our state NOLs and tax credit carryforwards of approximately $264 million which expire in the years 2011-2030. In addition, we had gross deferred tax assets related to our foreign NOLs of approximately $6 million which do not expire. During periods prior to 2010, we established a valuation allowance against our deferred tax assets totaling $772 million. Based upon an evaluation of all available evidence and our losses for the first nine months of 2010, we recorded additional valuation allowances of $32 million in the first quarter, $25 million in the second quarter and $44 million in the third quarter against our deferred tax assets. Our cumulative loss position over the last four years was significant evidence supporting the recording of the additional valuation allowance. As a result, as of September 30, 2010, our deferred tax assets valuation allowance was $873 million. Recording this allowance will have no impact on our ability to utilize our U.S. federal and state NOL and tax credit carryforwards to offset future U.S. profits. We continue to believe that we ultimately will have sufficient U.S. profitability during the remaining NOL and tax credit carryforward periods to realize substantially all of the economic value of the federal NOLs and some of the state NOLs before they expire. In future periods, the allowance could be reduced based on sufficient evidence indicating that it is more likely than not that a portion or all of our deferred tax assets will be realized.

     A noncash income tax benefit of $19 million was recorded during the first quarter of 2010 that related to the fourth quarter of 2009. Under current accounting rules, we are required to consider all items (including items recorded in other comprehensive income) in determining the amount of income tax benefit that results from a loss from continuing operations. As a result of reviewing the application of this requirement to our loss from continuing operations for 2009, during the first quarter of 2010 we recorded an additional income tax benefit related to the fourth quarter of 2009. This income tax benefit was exactly offset by income tax expense on other comprehensive income. However, while the income tax benefit is reported on the condensed consolidated statement of operations and reduced our net loss, the income tax expense on other comprehensive income is recorded directly to AOCI, which is a component of stockholders’ equity. Because the income tax expense on other comprehensive income is equal to the income tax benefit, our net deferred tax position is not impacted.

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     Section 382 of the Internal Revenue Code, or Section 382, imposes limitations on a corporation’s ability to utilize NOLs if it experiences an “ownership change.” In general terms, an ownership change may result from transactions increasing the cumulative ownership of certain stockholders in the stock of a corporation by more than 50 percentage points over a three-year period. If we were to experience an “ownership change,” utilization of our NOLs would be subject to an annual limitation under Section 382 determined by multiplying the market value of our outstanding shares of stock at the time of the ownership change by the applicable long-term tax-exempt rate. If an ownership change had occurred as of September 30, 2010, our annual NOL utilization would have been limited to approximately $54 million per year. Any unused annual limitation may be carried over to later years within the allowed NOL carryforward period. The amount of the limitation may, under certain circumstances, be increased or decreased by built-in gains or losses held by us at the time of the change that are recognized in the five-year period after the change.

     We classify interest expense and penalties related to unrecognized tax benefits and interest income on tax overpayments as components of income taxes (benefit). As of September 30, 2010, the total amount of interest expense and penalties recognized on our condensed consolidated balance sheet was $4 million and $1 million, respectively. The total amount of unrecognized tax benefit that, if recognized, would affect our effective tax rate, was $33 million.

     Our federal income tax returns for 2006 and prior years have been examined by the Internal Revenue Service, or IRS. The U.S. federal statute of limitations remains open for the year 2004 and later years. For the years 2007 and 2008, we are currently under audit by the IRS. We are also under examination in various U.S. state and foreign jurisdictions. It is possible that these examinations may be resolved within the next 12 months. Due to the potential for resolution of the federal, state and foreign examinations and the expiration of various statutes of limitation, it is reasonably possible that our gross unrecognized tax benefit may change within the next 12 months by a range of $20 million to $25 million.

     Under the Patient Protection and Affordable Care Act and a related reconciliation measure, the Health Care and Education Reconciliation Act of 2010, beginning with 2013, we will be required to include the Medicare Part D subsidy we receive for providing prescription drug benefits to retirees in our taxable income for federal income tax purposes. Although this requirement does not become effective until 2013, we were required by accounting rules to record a charge of $20 million in the first quarter of 2010 for the expected effect of this requirement. This charge was offset by our valuation allowance and will not impact our income tax expense unless our judgment on the realizability of the deferred tax assets changes.

Legal Contingencies

We are named as defendants in litigation arising from our operations, including claims and lawsuits arising from the operation of our vehicles and claims arising from product warranties, workplace or job site injuries, and general commercial disputes. This litigation includes multiple lawsuits, including class actions relating to Chinese-manufactured drywall distributed by L&W Supply Corporation in the southeastern United States in 2006 and 2007. In those cases, the plaintiffs allege that the Chinese-manufactured drywall is defective and emits excessive sulfur compounds which have caused property damage to the homes in which the drywall was installed and potential health hazards to the residents of those homes.

     We have also been notified by state and federal environmental protection agencies of possible involvement as one of numerous “potentially responsible parties” in a number of Superfund sites in the United States. As a potentially responsible party, we may be responsible to pay for some part of the cleanup of hazardous waste at those sites. In most of these sites, our involvement is expected to be minimal. In addition, we are involved in environmental cleanups of other property that we own or owned.

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     We believe that appropriate accruals have been established for our potential liability in connection with these matters, taking into account the probability of liability, whether our exposure can be reasonably estimated and, if so, our estimate of our liability or the range of our liability. However, we continue to review these accruals as additional information becomes available and revise them as appropriate. We do not expect the environmental matters or any other litigation matters involving USG to have a material adverse effect upon our results of operations, financial position or cash flows.

     See Note 16 to the condensed consolidated financial statements for additional information regarding litigation matters.

Mine Safety

The operation of our nine mines and quarries in the United States is subject to regulation and inspection under the Federal Mine Safety and Health Act of 1977, or Safety Act. From time to time, inspection of our mines and quarries and their operation results in our receipt of citations or orders alleging violations of health or safety standards or other violations under the Safety Act. We are usually able to resolve the matters identified in the citations or orders with little or no assessments or penalties.

     During the quarter ended September 30, 2010, we received 35 citations alleging health and safety violations that could significantly and substantially contribute to the cause and effect of a mine safety or health hazard under the Safety Act. The total dollar value of proposed assessments from the Mine Safety and Health Administration under the Act with respect to those citations, some of which are being contested, was approximately $16,600. However, no assessment has yet been made with respect to 20 of the citations. During the quarter ended September 30, 2010, no assessments or penalties were paid with respect to citations received in prior quarters.

     Set forth below is information with respect to the gypsum mines with respect to which citations were received during the quarter ended September 30, 2010:

			Proposed Assessments
Location of Mine/Quarry	Number of Citations		to Date
Empire, Nevada		2
Fort Dodge, Iowa		5
Plaster City, California		9	$	15,249
Shoals, Indiana		1		162
Southard, Oklahoma		3		918
Sperry, Iowa		12
Sweetwater, Texas		3		262

     We did not receive any citations for unwarrantable failure to comply with health and safety standards under the Safety Act, any orders under the Safety Act regarding withdrawal from a mine as a result of failure to abate in a timely manner a health and safety violation for which a citation was issued or any imminent danger orders under the Safety Act during the quarter ended September 30, 2010. Also, there were no flagrant violations and no mining-related fatalities during that quarter.

Critical Accounting Policies

The preparation of our financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses during the periods presented. Our Annual Report on Form 10-K for the fiscal year ended December 31, 2009, which we filed with the Securities and Exchange Commission on February 12, 2010, includes a summary of the critical accounting policies we believe are the most important to aid in understanding our financial results. There have been no changes to those critical accounting policies that have had a material impact on our reported amounts of assets, liabilities, revenues or expenses during the first nine months of 2010.

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Recent Accounting Pronouncement

In July 2010, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2010-20 “Disclosures about the Credit Quality of Financing Receivables and Allowance for Credit Losses.” The new disclosure guidance expands the existing requirements. The enhanced disclosures provide information on the nature of credit risk in a company’s financing receivables, how that risk is analyzed in determining the related allowance for credit losses, and changes to the allowance during the reporting period. The new disclosures will become effective for both our interim and annual reporting periods ending after December 15, 2010. We are currently reviewing this update to determine the impact, if any, that it may have on our financial disclosures, and we will adopt its provisions when they become effective.

Forward-Looking Statements

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 related to management’s expectations about future conditions. Actual business, market or other conditions may differ from management’s expectations and, accordingly, may affect our sales and profitability or other results and liquidity. Actual results may differ due to various other factors, including:

• economic conditions, such as the levels of new home and other construction activity, employment levels, the availability of mortgage, construction and other financing, mortgage and other interest rates, housing affordability and supply, the levels of foreclosures and home resales, currency exchange rates and consumer confidence;

• capital markets conditions and the availability of borrowings under our credit agreement or other financings;

• competitive conditions, such as price, service and product competition;

• shortages in raw materials;

• changes in raw material, energy, transportation and employee benefit costs;

• the loss of one or more major customers and our customers’ ability to meet their financial obligations to us;

• capacity utilization rates;

• changes in laws or regulations, including environmental and safety regulations;

• the outcome in contested litigation matters;

• the effects of acts of terrorism or war upon domestic and international economies and financial markets; and

• acts of God.

We assume no obligation to update any forward-looking information contained in this report.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We use derivative instruments to manage selected commodity price and foreign currency exposures. We do not use derivative instruments for speculative trading purposes, and we typically do not hedge beyond five years.

COMMODITY PRICE RISK

We use swap and option contracts to manage our exposure to fluctuations in commodity prices associated with anticipated purchases of natural gas. Currently, a portion of our anticipated purchases of natural gas are hedged for 2010, 2011 and 2012 and the notional amount of these hedge contracts was $83 million as of September 30, 2010. We review our positions regularly and make adjustments as market and business conditions warrant. A sensitivity analysis was prepared to estimate the potential change in the fair value of our natural gas hedge contracts assuming a hypothetical 10% change in market prices. Based on the results of this analysis, which may differ from actual results, the potential change in the fair value of our natural gas hedge contracts as of September 30, 2010 was $4 million. This analysis does not consider the underlying exposure.

FOREIGN CURRENCY EXCHANGE RISK

We have foreign exchange forward contracts in place to hedge changes in the value of intercompany loans to certain foreign subsidiaries due to changes in foreign exchange rates. The notional amount of these hedges is $21 million, and they all mature by December 31, 2010. As of September 30, 2010, the fair value of these hedges was a $1 million unrealized loss.

     We also have foreign exchange forward contracts to hedge purchases of products and services denominated in non-functional currencies. The notional amount of these contracts is $117 million and they mature by March 28, 2012. The fair value of these contracts was a $1 million unrealized loss as of September 30, 2010. A sensitivity analysis was prepared to estimate the potential change in the fair value of our foreign exchange forward contracts assuming a hypothetical 10% change in foreign exchange rates. Based on the results of this analysis, which may differ from actual results, the potential change in the fair value of our foreign exchange forward contracts as of September 30, 2010 was $10 million. This analysis does not consider the underlying exposure.

INTEREST RATE RISK

As of September 30, 2010, most of our outstanding debt was fixed-rate debt. A sensitivity analysis was prepared to estimate the potential change in interest expense assuming a hypothetical 100-basis-point increase in interest rates. Based on the results of this analysis, which may differ from actual results, the potential change in interest expense would be immaterial.

See Note 9 to the condensed consolidated financial statements for additional information regarding our financial exposures.

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ITEM 4. CONTROLS AND PROCEDURES

(a)	Evaluation of disclosure controls and procedures.
	Our Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, or the Act), have concluded that, as of the end of the quarter covered by this report, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
(b)	Changes in internal control over financial reporting.
	There were no changes in our “internal control over financial reporting” (as defined in Rule 13a-15(f) promulgated under the Act) identified in connection with the evaluation required by Rule 13a-15(d) promulgated under the Act that occurred during the fiscal quarter ended September 30, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See Part I, Item 1, Note 16 to the condensed consolidated financial statements for additional information regarding legal proceedings.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) Pursuant to our Deferred Compensation Program for Non-Employee Directors, two of our non-employee directors deferred their quarterly retainers for service as directors that were payable on September 30, 2010 into a total of approximately 3,255 deferred stock units. These units will increase or decrease in value in direct proportion to the market value of our common stock and will be paid in cash or shares of common stock, at the director’s option, following termination of service as a director. The issuance of these deferred stock units was effected through a private placement under Section 4(2) of the Securities Act of 1933, as amended, and was exempt from registration under Section 5 of that Act.

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ITEM 6. EXHIBITS

4.1 Registration Rights Agreement, dated as of September 8, 2010, between USG Corporation and Evercore Trust Company, N.A. (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated September 13, 2010)

10.1 Second Amendment and Restatement Agreement dated as of January 7, 2009, among USG Corporation, the Lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (Exhibit A to this agreement is filed as Exhibit 10.2 to this Report) *

10.2 Second Amendment and Restated Credit Agreement dated as of January 7, 2009, among USG Corporation, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and Goldman Sachs Credit Partners, L.P., as Syndication Agent * **

10.3 Guarantee Agreement dated as of January 7, 2009 among USG Corporation, the subsidiary guarantors party thereto and JPMorgan Chase Bank, N.A.

10.4 Pledge and Security Agreement dated as of January 7, 2009 among USG Corporation, the other grantors party thereto and JPMorgan Bank, N.A., as administrative agent * **

10.5 Secured Loan Facility Agreement, dated October 21, 2008, between Gypsum Transportation Limited and DVB Bank SE, as lender, agent and security trustee *

10.6	Credit Agreement, dated as of June 30, 2009, between CGC Inc. and The Toronto-Dominion Bank * **
10.7	Form of Restricted Stock Units Agreement *
10.8	Form of Performance Based Restricted Stock Units Agreement *
31.1	Rule 13a-14(a) Certifications of USG Corporation’s Chief Executive Officer *
31.2	Rule 13a-14(a) Certifications of USG Corporation’s Chief Financial Officer *
32.1	Section 1350 Certifications of USG Corporation’s Chief Executive Officer *
32.2	Section 1350 Certifications of USG Corporation’s Chief Financial Officer *

101 The following financial information from USG Corporation’s Quarterly Report on Form 10-Q for the three months and nine months ended September 30, 2010, formatted in XBRL (Extensible Business Reporting Language): (1) the condensed consolidated statements of operations for the three months and nine months ended September 30, 2010 and 2009, (2) the condensed consolidated balance sheets as of September 30, 2010 and December 31, 2009, (3) the condensed consolidated statements of cash flows for the nine months ended September 30, 2010 and 2009 and (4) notes to the condensed consolidated financial statements, tagged as blocks of text. *

*	Filed or furnished herewith
**	Portions of this exhibit have been omitted pursuant to a request for confidential treatment.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

USG CORPORATION
By	/s/ William C. Foote
	William C. Foote,
	Chairman and Chief Executive Officer
By	/s/ Richard H. Fleming
	Richard H. Fleming,
	Executive Vice President and Chief Financial Officer
By	/s/ William J. Kelley Jr.
	William J. Kelley Jr.,
	Vice President and Controller

October 29, 2010

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EXHIBIT INDEX

Exhibit
Number	Exhibit
4.1	Registration Rights Agreement, dated as of September 8, 2010, between USG Corporation and Evercore Trust Company, N.A. (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated September 13, 2010)
10.1	Second Amendment and Restatement Agreement dated as of January 7, 2009, among USG Corporation, the Lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (Exhibit A to this agreement is filed as Exhibit 10.2 to this Report) *
10.2	Second Amended and Restated Credit Agreement dated as of January 7, 2009, among USG Corporation, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and Goldman Sachs Credit Partners, L.P., as Syndication Agent * **
10.3	Guarantee Agreement dated as of January 7, 2009 among USG Corporation, the subsidiary guarantors party thereto and JPMorgan Chase Bank, N.A. *
10.4	Pledge and Security Agreement dated as of January 7, 2009 among USG Corporation, the other grantors party thereto and JPMorgan Bank, N.A., as administrative agent * **
10.5	Secured Loan Facility Agreement, dated October 21, 2008, between Gypsum Transportation Limited and DVB Bank SE, as lender, agent and security trustee *
10.6	Credit Agreement, dated as of June 30, 2009, between CGC Inc. and The Toronto-Dominion Bank * **
10.7	Form of Restricted Stock Units Agreement *
10.8	Form of Performance Based Restricted Stock Units Agreement *
31.1	Rule 13a-14(a) Certifications of USG Corporation’s Chief Executive Officer *
31.2	Rule 13a-14(a) Certifications of USG Corporation’s Chief Financial Officer *
32.1	Section 1350 Certifications of USG Corporation’s Chief Executive Officer *
32.2	Section 1350 Certifications of USG Corporation’s Chief Financial Officer *
101	The following financial information from USG Corporation’s Quarterly Report on Form 10-Q for the three months and nine months ended September 30, 2010, formatted in XBRL (Extensible Business Reporting Language): (1) the condensed consolidated statements of operations for the three months and nine months ended September 30, 2010 and 2009, (2) the condensed consolidated balance sheets as of September 30, 2010 and December 31, 2009, (3) the condensed consolidated statements of cash flows for the nine months ended September 30, 2010 and 2009 and (4) notes to the condensed consolidated financial statements, tagged as blocks of text. *

*	Filed or furnished herewith
**	Portions of this exhibit have been omitted pursuant to a request for confidential treatment.

EX-10.1

Exhibit 10.1

EXECUTION VERSION

     SECOND AMENDMENT AND RESTATEMENT AGREEMENT (this “ Agreement ”) dated as of January 7, 2009, among USG CORPORATION, a Delaware corporation (the “ Borrower ”), the LENDERS party hereto and JPMORGAN CHASE BANK, N.A., as administrative agent under the Amended and Restated Credit Agreement dated as of July 31, 2007, among the Borrower, the Lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent (the “ Administrative Agent ”), and Goldman Sachs Credit Partners, L.P., as syndication agent (as amended by Amendment No. 1 thereto dated as of February 14, 2008, the “ Existing Credit Agreement ”).

          WHEREAS the Borrower has requested, and the undersigned Lenders (such term and each other capitalized term used but not defined in these recitals having the meaning assigned to such term in Section 1 hereof) and the Administrative Agent have agreed, upon the terms and subject to the conditions set forth herein and in the Restated Credit Agreement (as defined below), that (a) the Existing Credit Agreement will be amended and restated as provided herein and (b) the Subsidiary Loan Parties (as defined in the Existing Credit Agreement) will be released from their guarantees under the Guarantee Agreement dated as of November 11, 2008 (as amended, supplemented or otherwise modified prior to the Restatement Effective Date, the “ Existing Guarantee Agreement ”), among the Borrower, the Subsidiary Loan Parties and the Administrative Agent.

          NOW, THEREFORE, the Borrower, the undersigned Lenders and the Administrative Agent hereby agree as follows:

          SECTION 1. Defined Terms . Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Restated Credit Agreement referred to below.

          SECTION 2. Restatement Effective Date. (a) The transactions provided for in Sections 3 and 4 hereof shall be consummated at a closing to be held on the Restatement Effective Date at the offices of Cravath, Swaine & Moore LLP, or at such other time and place as the parties hereto shall agree upon.

          (b) The “ Restatement Effective Date ” shall be specified by the Borrower, and shall be a date not later than January 7, 2009, as of which date all the conditions set forth or referred to in Section 5 hereof shall have been satisfied.

          SECTION 3. Termination of the Existing Guarantee Agreement. By execution and delivery of this Agreement, each of the undersigned Lenders hereby agrees that upon the satisfaction of the conditions set forth in Section 5 hereof, all guarantees provided by the Subsidiary Loan Parties under the Existing Guarantee Agreement shall be released and the Existing Guarantee Agreement shall be terminated and have no

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further force or effect (it being understood and agreed that, as of the Restatement Effective Date, the Loan Parties shall enter into the Guarantee Agreement (as such term is defined in the Restated Credit Agreement)).

          SECTION 4. Amendment and Restatement of the Existing Credit Agreement. (a) Effective on the Restatement Effective Date, the Existing Credit Agreement is hereby amended and restated to read in its entirety as set forth in Exhibit A hereto (the “ Restated Credit Agreement ”). From and after the effectiveness of such amendment and restatement, the term “Credit Agreement” shall mean the Restated Credit Agreement.

          (b) The aggregate principal amount of all Revolving Loans, Swingline Loans and Letters of Credit outstanding under the Existing Credit Agreement on the Restatement Effective Date shall continue to be outstanding under the Restated Credit Agreement and from and after such date, the terms of the Restated Credit Agreement will govern the rights of the Lenders and the Issuing Bank with respect thereto, including, without limitation, the Applicable Rate applicable to such outstanding Loans.

          SECTION 5. Conditions. The consummation of the transactions set forth in Sections 3 and 4 of this Agreement shall be subject to the satisfaction of the following conditions precedent:

          (a) Loan Documents. The Administrative Agent (or its counsel) shall have received (i) from each of the Borrower and the Required Lenders a counterpart of this Agreement signed on behalf of such party (or written evidence reasonably satisfactory to the Administrative Agent (which may include telecopy or Adobe pdf file transmission of a signed signature page) that such party has signed a counterpart of this Agreement), (ii) from each party thereto duly executed copies of the other Loan Documents (or written evidence reasonably satisfactory to the Administrative Agent (which may include telecopy or Adobe pdf file transmission of a signed signature page) that such party has signed a counterpart of such other Loan Documents) and such other certificates, documents, instruments and agreements as the Administrative Agent shall reasonably request in connection with the transactions contemplated by this Agreement and the other Loan Documents, including any promissory notes requested by a Lender pursuant to Section 2.09 of the Restated Credit Agreement, payable to the order of each such requesting Lender and (iii) a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Restatement Effective Date) of each of (A) Jones Day, counsel for the Borrower and the other Loan Parties, substantially in the form of Exhibit B hereto, and (B) local counsel in each jurisdiction where a Loan Party is organized (other than any such jurisdiction covered by the opinion given pursuant to the immediately preceding clause (A)), in each case covering such matters relating to the Loan Parties, the Loan Documents or the Transactions as the Administrative Agent shall reasonably request.

          (b) Closing Certificates; Certified Certificate of Incorporation; Good Standing Certificates. The Administrative Agent shall have received (i) a certificate of each Loan Party, dated the Restatement Effective Date and executed by its Secretary or

3

Assistant Secretary, which shall (A) certify the resolutions of its Board of Directors, members or other body authorizing the execution, delivery and performance of the Loan Documents to which it is a party, (B) identify by name and title and bear the signatures of the Financial Officers and any other officers of such Loan Party authorized to sign the Loan Documents to which it is a party and (C) contain appropriate attachments, including the certificate or articles of incorporation or organization of each Loan Party certified by the relevant authority of the jurisdiction of organization of such Loan Party and a true and correct copy of its by-laws or operating, management or partnership agreement, and (ii) a long-form good standing certificate for each Loan Party from its jurisdiction of organization (and, to the extent that such long-form good standing certificate is not dated as of the Restatement Effective Date, a bring-down good standing certificate dated as of the Restatement Effective Date).

          (c) Field Examination; Inventory Appraisal; No Default Certificate. The Administrative Agent shall have received (i) a field examination report with respect to the Inventory of the Collateral Parties (it being understood and agreed that the receipt of the examination of FTI Consulting, Inc. dated December 5, 2008, with respect to the Inventory of the Collateral Parties shall satisfy the condition precedent set forth in this clause (i)), (ii) an appraisal reasonably satisfactory to the Administrative Agent with respect to the Inventory of the Collateral Parties from an appraiser selected and engaged by the Administrative Agent (it being understood and agreed that the receipt of the appraisal of AccuVal Associates, Incorporated dated October 31, 2008, with respect to the Inventory of the Collateral Parties shall satisfy the condition precedent set forth in this clause (ii)) and (iii) a certificate, signed by the chief financial officer or treasurer of the Borrower, (A) stating that no Default or Event of Default has occurred and is continuing and (B) stating that the representations and warranties contained in the Loan Documents are true and correct in all material respects as of such date, other than those that speak expressly to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date.

          (d) Fees. The Administrative Agent shall have received all fees and other amounts due and payable by any Loan Party on or prior to the Restatement Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel), in each case, required to be reimbursed or paid by any Loan Party under any Loan Document or any other written agreement relating to any Loan Document entered into by the Borrower and the Administrative Agent.

          (e) Perfection Certificate; Lien Searches. The Administrative Agent shall have received (i) a completed Perfection Certificate, dated the Restatement Effective Date, together with all attachments contemplated thereby, and (ii) the results of a recent lien search in the jurisdictions requested by the Administrative Agent based on the Perfection Certificate, and such search shall reveal no Liens on any of the assets of the Loan Parties except for Liens permitted by Section 6.02 or discharged on or prior to the Restatement Effective Date pursuant to a pay-off letter or other documentation reasonably satisfactory to the Administrative Agent.

4

          (f) Borrowing Base Certificate. The Administrative Agent shall have received a Borrowing Base Certificate dated as of the Restatement Effective Date that calculates the Borrowing Base as of November 30, 2008.

          (g) Filings, Registrations and Recordings. Each document (including any Uniform Commercial Code financing statement) required by the Collateral Documents or under law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a perfected Lien on the Collateral described therein, prior to and superior in right to any other Person (other than with respect to Liens expressly permitted by clauses (ii) through (iv), (vi) and (xi) of Section 6.02 of the Restated Credit Agreement), shall be in proper form for filing, registration or recordation.

          (h) Compliance with Laws; Consents. The Borrower and the Material Subsidiaries shall be in compliance, in all material respects, with all applicable foreign and U.S. federal, state and local laws and regulations, including all applicable Environmental Laws. All necessary material governmental and material third party approvals in connection with the Loan Documents shall have been obtained and shall be in effect.

          (i) No Litigation. Other than the Disclosed Matters, there shall be no litigation, administrative proceeding or governmental investigation that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

          (j) “Know Your Customer” Requirements. The Lenders shall have received all documentation and other information requested by the Administrative Agent and required under applicable “know your customer” rules and regulations, including all information required to be delivered pursuant to Section 9.13 of the Restated Credit Agreement.

          (k) Excess Availability. Excess Availability on the Restatement Effective Date shall be equal to (i) the Borrowing Base as set forth in the Borrowing Base Certificate delivered pursuant to paragraph (f) of this Section less (ii) the aggregate face amount of the Existing Letters of Credit immediately prior to the Restatement Effective Date.

          (l) Existing ABL Facility. All commitments under the Credit Agreement dated as of September 9, 2008 (the “ Existing ABL Credit Agreement ”), among the Borrower, the Subsidiaries party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, shall have been terminated, and all loans, interest and other amounts accrued or owing thereunder shall have been repaid in full and all guarantees and liens granted in respect thereof shall have been released and the terms and conditions of any such release shall be satisfactory to the Administrative Agent. The Administrative Agent shall have received a payoff and release letter with respect to the Existing ABL Credit Agreement in form and substance reasonably satisfactory to the Administrative Agent.

5

          (m) Evidence of Insurance. The Administrative Agent shall have received evidence that the insurance required by Section 5.06 of the Restated Credit Agreement is in effect.

          SECTION 6. Effectiveness; Counterparts; Amendments. This Agreement shall become effective when copies hereof that, when taken together, bear the signatures of the Borrower, the Administrative Agent and the Required Lenders shall have been received by the Administrative Agent. This Agreement may not be amended nor may any provision hereof be waived except pursuant to a writing signed by the Borrower, the Administrative Agent and the Required Lenders. This Agreement may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or Adobe pdf file transmission shall be effective as delivery of a manually executed counterpart of this Agreement.

          SECTION 7. No Novation. This Agreement shall not extinguish the Loans outstanding under the Existing Credit Agreement. Nothing herein contained shall be construed as a substitution or novation of the Loans outstanding under the Existing Credit Agreement, which shall remain outstanding after the Restatement Effective Date as modified hereby. Notwithstanding any provision of this Agreement, the provisions of Sections 2.15, 2.16, 2.17 and 9.03 of the Existing Credit Agreement as in effect immediately prior to the Restatement Effective Date will continue to be effective as to all matters arising out of or in any way related to facts or events existing or occurring prior to the Restatement Effective Date.

          SECTION 8. Notices. All notices hereunder shall be given in accordance with the provisions of Section 9.01 of the Restated Credit Agreement.

          SECTION 9. Applicable Law; Waiver of Jury Trial. (A) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

          (B) EACH PARTY HERETO HEREBY AGREES AS SET FORTH IN SECTIONS 9.09 AND 9.10 OF THE RESTATED CREDIT AGREEMENT AS IF SUCH SECTIONS WERE SET FORTH IN FULL HEREIN.

[Remainder of page intentionally left blank]

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

USG CORPORATION,
by	/s/ Karen L. Leets Name: Karen L. Leets
	Title: Vice President & Treasurer

7

JPMORGAN CHASE BANK, N.A., Individually and as Administrative Agent, Swingline Lender and Issuing Bank,
by	/s/ Peter S. Predun Name: Peter S. Predun
	Title: Executive Director

8

SIGNATURE PAGE TO THE AMENDMENT AND RESTATEMENT AGREEMENT DATED JANUARY 7, 2009, AMONG USG CORPORATION, THE LENDERS PARTY THERETO AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT
Wells Fargo Bank, N.A.
Name of Institution
By:	/s/ James R. Bednark Name: James R. Bednark
	Title: Senior Vice President
By:
	Name:
	Title:

9

SIGNATURE PAGE TO THE AMENDMENT AND RESTATEMENT AGREEMENT DATED JANUARY 7, 2009, AMONG USG CORPORATION, THE LENDERS PARTY THERETO AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Name of Institution
By:	/s/ Victor Pierzchalski Name: Victor Pierzchalski
	Title: Authorized Signatory

10

SIGNATURE PAGE TO THE AMENDMENT AND RESTATEMENT AGREEMENT DATED JANUARY 7, 2009, AMONG USG CORPORATION, THE LENDERS PARTY THERETO AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT
Sumitomo Mitsui Banking Corporation
Name of Institution
By:	/s/ Yoshihiro Hyakutome Name: Yoshihiro Hyakutome
	Title: General Manager
By:
	Name:
	Title:

11

SIGNATURE PAGE TO THE AMENDMENT AND RESTATEMENT AGREEMENT DATED JANUARY 7, 2009, AMONG USG CORPORATION, THE LENDERS PARTY THERETO AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT
PNC Bank, National Association
Name of Institution
By:	/s/ Jennifer L. Loew Name: Jennifer L. Loew
	Title: Vice President
By:
	Name:
	Title:

12

SIGNATURE PAGE TO THE AMENDMENT AND RESTATEMENT AGREEMENT DATED JANUARY 7, 2009, AMONG USG CORPORATION, THE LENDERS PARTY THERETO AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT
The Bank of Nova Scotia
Name of Institution
By:	/s/ Paula Czach Name: Paula Czach
	Title: Director
By:
	Name:
	Title:

13

SIGNATURE PAGE TO THE AMENDMENT AND RESTATEMENT AGREEMENT DATED JANUARY 7, 2009, AMONG USG CORPORATION, THE LENDERS PARTY THERETO AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT
Calyon
Name of Institution
By:	/s/ David Cagle Name: David Cagle
	Title: Managing Director
By:	/s/ Brian Myers Name: Brian Myers
	Title: Managing Director

14

SIGNATURE PAGE TO THE AMENDMENT AND RESTATEMENT AGREEMENT DATED JANUARY 7, 2009, AMONG USG CORPORATION, THE LENDERS PARTY THERETO AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT
The Northern Trust Company
Name of Institution
By:	/s/ John E. Burdu Name: John E. Burdu
	Title: Senior Vice President

15

SIGNATURE PAGE TO THE AMENDMENT AND RESTATEMENT AGREEMENT DATED JANUARY 7, 2009, AMONG USG CORPORATION, THE LENDERS PARTY THERETO AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT
U.S. Bank, National Assoc.
Name of Institution
By:	/s/ Ronald Giblin Name: Ronald Giblin
	Title: Vice President
By:
	Name:
	Title:

16

SIGNATURE PAGE TO THE AMENDMENT AND RESTATEMENT AGREEMENT DATED JANUARY 7, 2009, AMONG USG CORPORATION, THE LENDERS PARTY THERETO AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT
Fifth Third Bank
Name of Institution
By:	/s/ Joseph A. Wernhoff Name: Joseph A. Wernhoff
	Title: Vice President
By:
	Name:
	Title:

17

SIGNATURE PAGE TO THE AMENDMENT AND RESTATEMENT AGREEMENT DATED JANUARY 7, 2009, AMONG USG CORPORATION, THE LENDERS PARTY THERETO AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT
Bank of Montreal, Chicago Branch
Name of Institution
By:	/s/ M. Latta Name: M. Latta
	Title: Director
By:
	Name:
	Title:

18

SIGNATURE PAGE TO THE AMENDMENT AND RESTATEMENT AGREEMENT DATED JANUARY 7, 2009, AMONG USG CORPORATION, THE LENDERS PARTY THERETO AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT
Goldman Sachs Credit Partners, L.P.
Name of Institution
By:	/s/ Andrew Caditz Name: Andrew Caditz
	Title: Authorized Signatory
By:
	Name:
	Title:

19

SIGNATURE PAGE TO THE AMENDMENT AND RESTATEMENT AGREEMENT DATED JANUARY 7, 2009, AMONG USG CORPORATION, THE LENDERS PARTY THERETO AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT
Morgan Stanley Bank, N.A.
Name of Institution
By:	/s/ Charles C. O’Brien Name: Charles C. O’Brien
	Title: Chief Credit Officer
By:
	Name:
	Title:

20

SIGNATURE PAGE TO THE AMENDMENT AND RESTATEMENT AGREEMENT DATED JANUARY 7, 2009, AMONG USG CORPORATION, THE LENDERS PARTY THERETO AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT
Citicorp USA, Inc.
Name of Institution
By:	/s/ George F. Van Name: George F. Van
	Title: Managing Director
By:
	Name:
	Title:

21

SIGNATURE PAGE TO THE AMENDMENT AND RESTATEMENT AGREEMENT DATED JANUARY 7, 2009, AMONG USG CORPORATION, THE LENDERS PARTY THERETO AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT
Bank of America, N.A.
Name of Institution
By:	/s/ Monirah Masud Name: Monirah Masud
	Title: Senior Vice President
By:
	Name:
	Title:

22

SIGNATURE PAGE TO THE AMENDMENT AND RESTATEMENT AGREEMENT DATED JANUARY 7, 2009, AMONG USG CORPORATION, THE LENDERS PARTY THERETO AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT
Commerzbank AG, New York and Grand Cayman Branches
Name of Institution
By:	/s/ Anthony Giraldi Name: Anthony Giraldi
	Title: Vice President
By:	/s/ Gerard A. Araw Name: Gerard A. Araw
	Title: Assistant Vice President

Exhibit A

Credit Agreement

Exhibit B

Form of Jones Day Opinion

See attached

EXHIBIT B

Form of Jones Day Opinion

[Date of Credit Agreement]

JPMorgan Chase Bank, N.A., as
  administrative agent under, and
  the lenders party to, the Credit
  Agreement referred to below

Re: [Borrower]

Ladies and Gentlemen:

          We have acted as special counsel to [_________________] (collectively, the “Delaware Opinion Parties”), [_______________________] (collectively, the “Excepted Opinion Parties”, and the Excepted Opinion Parties together with the Delaware Opinion Parties, the “Opinion Parties”) in connection with (x) the [Credit Agreement] (the “Credit Agreement”) dated as of [__________], among [Borrowers], the various financial institutions party thereto as lenders (the “Lenders”) and JPMorgan Chase Bank, N.A., as Administrative Agent (the “Administrative Agent”), and (y) the [Additional Credit Documents to be listed] (each as defined below), each entered into in connection with the Credit Agreement. As used herein with respect to a reference to any Transaction Document (as defined below), “Applicable Opinion Party” (or any variation thereof) means the Opinion Party(ies) party to such Transaction Document.

          This opinion is delivered to you pursuant to Section [__] of the Credit Agreement. Capitalized terms used herein, but not otherwise defined herein, have the meanings set forth for such terms in the Credit Agreement. The Uniform Commercial Code, as amended and in effect in the State of Delaware on the date hereof, is referred to as the “DE UCC”. The Uniform Commercial Code, as amended and in effect in the State of New York on the date hereof, is referred to as the “NY UCC”. The Uniform Commercial Code, as amended and in effect in the State of Illinois on the date hereof, is referred to as the “IL UCC”. The DE UCC, NY UCC and the IL UCC are collectively referred to as the “UCC”. With your permission, all assumptions and statements of reliance herein have been made without any independent investigation or verification on our part except to the extent, if any, otherwise expressly stated, and we express no opinion with respect to the subject matter or accuracy of the assumptions or items upon which we have relied.

[Date of Opinion]
Page 2

          In connection with the opinions expressed herein, we have examined such documents, records and matters of law as we have deemed necessary for the purposes of this opinion. We have examined, among other documents, the following:

(a)	[Transaction Documents to be listed];
(b)	[[State] DACAs to be listed];
(c)	[[State] DACAs to be listed]; and
(d)	[Organizational Documents to be listed].

          The documents referred to in items (__) through (__), inclusive, above are referred to as the “Credit Documents”. The documents referred to in items (__) through (__), inclusive, above are referred to as the “Transaction Documents”. The documents referred to in items (__) through (__), inclusive, above are referred to as the “[State] Enforceable DACAs”. The documents referred to in items (__) and (__) above are referred to as the “[State] Enforceable DACAs”. The documents referred to in items (__) and (__) above are referred to as the “[State] Perfection DACAs”. The documents referred to in items (__) through (__), inclusive, above are referred to collectively as the “DACAs”. The documents referred to in items (__) through (__) above are referred to as the “Organizational Documents”.

          [Assumptions, qualifications and reliances to be agreed upon]

          Based on the foregoing, and subject to the limitations, qualifications and assumptions set forth in this letter, we are of the opinion that:

(1)	Each Opinion Party is an organization existing and in good standing under the laws of the jurisdiction of its organization. Each Applicable Delaware Opinion Party has the organizational power and authority to execute and deliver the Transaction Documents and perform its obligations thereunder.
(2)	The execution and delivery by each Applicable Opinion Party of the Transaction Documents, the performance by such Opinion Party of its obligations thereunder and the granting by such Opinion Party of the security interests provided for in the [Security Document]:

(i) do not violate any agreement, instrument, order, writ, judgment, injunction, decree, determination, or award binding upon such Opinion Party or its property (this opinion being limited (x) to those agreements, instruments, orders, writs, judgments, injunctions, decrees, determinations and awards that have been identified to us in the [Officer’s Certificate] (collectively, the “Reviewed Agreements”) and (y) in that we express no opinion with respect to any violation not readily ascertainable from the face of any such Reviewed Agreement or arising under or based upon any cross default provision insofar as it relates to a default under an agreement, instrument, order, writ, judgment, injunction, decree,

[Date of Opinion]
Page 3

	determination, or award not so identified to us, or arising under or based upon any covenant of a financial or numerical nature or requiring computation),
(ii)	will not result in or require the creation or imposition of any security interest or lien upon any of the properties of such Opinion Party pursuant to the provisions of any agreement binding upon such Opinion Party or its properties other than security interests or liens created by the Transaction Documents and any other security interests or liens in favor of the Administrative Agent or the Lenders arising under any of the Transaction Documents or applicable law (this opinion being limited to the Reviewed Agreements) and
(iii)	do not contravene any provision of any Organizational Document of such Opinion Party.

(3) The execution and delivery by each Applicable Delaware Opinion Party of the Transaction Documents, the performance by such Opinion Party of its obligations thereunder and the granting by such Opinion Party of the security interests provided for in the [Security Document]:

(i)	have been duly authorized by all necessary organizational action by such Opinion Party,
(ii)	do not require under the Delaware General Corporation Law or the Delaware Limited Liability Company Act (as amended, collectively, “Applicable Delaware Law”) any filing or registration by such Opinion Party with, or notice to, or approval or consent of, any governmental agency or authority, that has not been made or obtained except:

(A)	those required in the ordinary course of business in connection with the performance by such Opinion Party of its obligations under certain covenants contained in the Transaction Documents,
(B)	to perfect security interests granted by such Opinion Party under the [Security Document],
(C)	pursuant to securities and other laws that may be applicable to the disposition of any collateral subject thereto, and
(D)	other filings under securities laws and filings, registrations, consents or approvals, in each case, not required to be made or obtained by the date hereof, and

(iii) do not violate Applicable Delaware Law applicable to such Opinion Party or its property.

(4) The execution and delivery by each Applicable Opinion Party of the Credit Documents and the [State] Enforceable DACAs, the performance by such Opinion Party of its

[Date of Opinion]
Page 4

obligations thereunder and the granting by such Opinion Party of the security interests provided for in the Security Agreement:

(i) do not require under present law or present regulation of any governmental agency or authority of the State of [______] or of the United States of America any filing or registration by such Opinion Party with, or notice to, or approval or consent of, any governmental agency or authority of the State of [______] or the United States of America that has not been made or obtained except:

(A)	those required in the ordinary course of business in connection with the performance by such Opinion Party of its obligations under certain covenants contained in the Credit Documents and the [State] Enforceable DACAs,
(B)	pursuant to securities and other laws that may be applicable to the disposition of any collateral subject thereto, and
(C)	other filings under securities laws and filings, registrations, consents or approvals, in each case, not required to be made or obtained by the date hereof, and

(ii) do not violate any present law, or present regulation of any governmental agency or authority, of the State of [_______] or the United States of America applicable to such Opinion Party or its property.¹

(5)	Each Transaction Document has been duly executed and delivered on behalf of each Applicable Delaware Opinion Party. Each Credit Document, [State] Enforceable DACA [and [State] Enforceable DACA] constitutes a valid and binding obligation of each Applicable Opinion Party, enforceable against each such Opinion Party in accordance with its terms.
(6)	No Opinion Party is required to register as an “investment company” (under, and as defined in, the Investment Company Act of 1940, as amended (the “1940 Act”)) and no Opinion Party is a company controlled by a company required to register as such under the 1940 Act.
(7)	The [Security Document] creates in favor of the Administrative Agent, for the benefit of the Secured Parties, as security for the Secured Obligations, a security interest in each Opinion Party’s rights in the Collateral to which Article 9 of the [____] UCC is applicable (the “Article 9 Collateral”).
(8)	The [Security Document] and the [State] Perfection DACAs together create in favor of the Administrative Agent, as security for the Secured Obligations, a perfected security interest in each of the following Applicable Opinion Party’s deposit accounts [list to be provided] (the “[State] Governed Deposit Accounts”).

¹ Repeat as necessary for DACAs in other states.

[Date of Opinion]
Page 5

(9)	Upon the effective filing of the Financing Statements with the Delaware Filing Office, the Administrative Agent, for the benefit of the Secured Parties, will have a perfected security interest in that portion of the Article 9 Collateral in which a security interest may be perfected by filing the Financing Statements against each Delaware Opinion Party with the Filing Office under the DE UCC.
(10)	The borrowings by the Parent under the Credit Agreement and the application of the proceeds thereof as provided therein will not result in a violation of Regulation T, U or X of the Board of Governors of the Federal Reserve System (the “Margin Regulations”).

The opinions set forth above are subject to the following qualifications:
(A)	[Qualifications to be agreed upon]
The opinions expressed herein are limited to [ Limitations on law to be agreed upon ].

          Our opinions as to matters governed by the DE UCC are based solely upon our review of the DE UCC set forth in the CCH Secured Transactions Guide as of December 9, 2008, without any review or consideration of any decisions or opinions of courts or other adjudicative bodies or governmental authorities of the State of Delaware, whether or not reported or summarized in the foregoing publication.

          The opinions expressed herein are for the benefit of the addressees hereof and their respective successors and assigns in connection with the transaction referred to herein and may not be relied on by such Person for any other purpose or in any manner or for any purpose by any other person or entity.

Very truly yours,

Jones Day

EX-10.2

Exhibit 10.2

CONFIDENTIAL TREATMENT REQUESTED BY USG CORPORATION — CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION

EXHIBIT A TO
SECOND AMENDMENT AND
RESTATEMENT AGREEMENT

SECOND AMENDED AND RESTATED
CREDIT AGREEMENT

dated as of January 7, 2009,

among

USG CORPORATION,
as Borrower,

The Lenders Party Hereto,

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent,

and

GOLDMAN SACHS CREDIT PARTNERS, L.P.,
as Syndication Agent

J.P. MORGAN SECURITIES INC.,
as Sole Bookrunner and Lead Arranger

[CS&M Ref.: 6701-778]

TABLE OF CONTENTS

	Page
ARTICLE I
Definitions
SECTION 1.01. Defined Terms		1
SECTION 1.02. Classification of Loans and Borrowings		26
SECTION 1.03. Terms Generally		26
SECTION 1.04. Accounting Terms; GAAP		26
SECTION 1.05. Pro Forma Calculations		26
ARTICLE II
The Credits
SECTION 2.01. Revolving Commitments		27
SECTION 2.02. Loans and Borrowings		27
SECTION 2.03. Requests for Borrowings		28
SECTION 2.04. Swingline Loans and Overadvances		28
SECTION 2.05. Letters of Credit		30
SECTION 2.06. Funding of Borrowings		34
SECTION 2.07. Interest Elections		34
SECTION 2.08. Termination and Reduction of Revolving Commitments		35
SECTION 2.09. Repayment of Loans; Evidence of Debt		36
SECTION 2.10. Prepayment of Loans		37
SECTION 2.11. Fees		37
SECTION 2.12. Interest		38
SECTION 2.13. Alternate Rate of Interest		39
SECTION 2.14. Increased Costs		39
SECTION 2.15. Break Funding Payments		40
SECTION 2.16. Taxes		41
SECTION 2.17. Payments Generally; Allocation of Proceeds; Sharing of Setoffs		43
SECTION 2.18. Mitigation Obligations; Replacement of Lenders		45
SECTION 2.19. Revolving Commitment Increases		46
SECTION 2.20. Defaulting Lenders		47
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers		47
SECTION 3.02. Authorization; Enforceability		47
SECTION 3.03. Governmental Approvals; No Conflicts		48
SECTION 3.04. Financial Condition; No Material Adverse Change		48
SECTION 3.05. Properties		48
SECTION 3.06. Litigation and Environmental Matters		49
SECTION 3.07. Compliance with Laws and Agreements		49
SECTION 3.08. Investment Company Status		49

i

	Page
SECTION 3.09. Taxes		49
SECTION 3.10. ERISA		49
SECTION 3.11. Disclosure		49
SECTION 3.12. Insurance		50
SECTION 3.13. Security Interest in Collateral		50
SECTION 3.14. Labor Matters		50
ARTICLE IV
Conditions
SECTION 4.01. [Intentionally Omitted]		50
SECTION 4.02. Each Credit Event		50
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements; Borrowing Base and Other Information		51
SECTION 5.02. Notices of Material Events		53
SECTION 5.03. Existence; Conduct of Business		53
SECTION 5.04. Payment of Taxes		53
SECTION 5.05. Maintenance of Properties		54
SECTION 5.06. Insurance		54
SECTION 5.07. Books and Records; Inspection Rights; Field Examinations; Inventory Appraisals		54
SECTION 5.08. Compliance with Laws		55
SECTION 5.09. Use of Proceeds and Letters of Credit		55
SECTION 5.10. Further Assurances		55
SECTION 5.11. Control Agreements; Collateral Access Agreements		56
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness		56
SECTION 6.02. Liens		58
SECTION 6.03. Fundamental Changes		59
SECTION 6.04. Investments		60
SECTION 6.05. Sale and Leaseback Transactions		61
SECTION 6.06. Swap Agreements		61
SECTION 6.07. Restricted Payments		61
SECTION 6.08. Transactions with Affiliates		62
SECTION 6.09. Restrictive Agreements		62
SECTION 6.10. Amendment of Material Documents		63
SECTION 6.11. Changes in Fiscal Periods		63
SECTION 6.12. Fixed Charge Coverage Ratio		63

ii

	Page
ARTICLE VII
Events of Default
ARTICLE VIII
The Administrative Agent
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices		68
SECTION 9.02. Waivers; Amendments		69
SECTION 9.03. Expenses; Indemnity; Damage Waiver		71
SECTION 9.04. Successors and Assigns		72
SECTION 9.05. Survival		75
SECTION 9.06. Counterparts; Integration; Effectiveness		75
SECTION 9.07. Severability		75
SECTION 9.08. Right of Setoff		76
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process		76
SECTION 9.10. WAIVER OF JURY TRIAL		76
SECTION 9.11. Headings		77
SECTION 9.12. Confidentiality		77
SECTION 9.13. USA PATRIOT Act		78
SECTION 9.14. Disclosure		78
SECTION 9.15. Appointment for Perfection		78
SECTION 9.16. Interest Rate Limitation		78
SECTION 9.17. Existing Credit Agreement; Effectiveness of Amendment and Restatement		78

SCHEDULES:

Schedule 1.01(a)	—	Existing Letters of Credit
Schedule 1.01(b)	—	Investment Objective and Guidelines
Schedule 1.01(c)	—	Borrowing Base Supplemental Documentation
Schedule 2.01	—	Commitments
Schedule 3.06	—	Disclosed Matters
Schedule 3.12	—	Insurance
Schedule 6.01	—	Existing Indebtedness
Schedule 6.02	—	Existing Liens
Schedule 6.04	—	Existing Investments
Schedule 6.09	—	Existing Restrictions

iii

EXHIBITS:

Exhibit A	—	Form of Assignment and Assumption
Exhibit B	—	Form of Borrowing Base Certificate
Exhibit C	—	Form of Borrowing Request
Exhibit D	—	Form of Interest Election Request
Exhibit E	—	Form of Compliance Certificate
Exhibit F	—	Form of Administrative Questionnaire
Exhibit G	—	Form of Perfection Certificate
Exhibit H	—	Form of Revolving Note

iv

     SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of January 7, 2009 (this “Agreement”), among USG CORPORATION, a Delaware corporation, the LENDERS party hereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent, and GOLDMAN SACHS CREDIT PARTNERS, L.P., as Syndication Agent.

          Subject to satisfaction of the conditions set forth in the Amendment and Restatement Agreement dated as of January 7, 2009 (the “Amendment and Restatement Agreement”), among the Borrower, the Required Lenders (as defined in the Existing Credit Agreement referred to below) and the Administrative Agent, the Amended and Restated Credit Agreement dated as of July 31, 2007, among the Borrower, the Lenders party thereto, the Administrative Agent and Goldman Sachs Credit Partners, L.P., as syndication agent (as amended by Amendment No. 1 dated as of February 14, 2008, the “Existing Credit Agreement”), is amended and restated in its entirety to read as provided herein.

ARTICLE I

Definitions

          SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

          “ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.

          “Account” has the meaning assigned to such term in the Security Agreement.

          “Account Debtor” means any Person obligated on an Account.

          “Act” has the meaning assigned to such term in Section 9.13.

          “Adjusted Eligible Accounts” means, at any time, the Eligible Accounts at such time minus the Dilution Reserve at such time.

          “Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum (except in the case of the determination of the Adjusted LIBO Rate for purposes of clause (c) of the definition of the term “Alternate Base Rate”, rounded upwards, if necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

          “Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders hereunder, and its successors in such capacity as provided in Article VIII.

          “Administrative Questionnaire” means an administrative questionnaire, substantially in the form of Exhibit F or any other form approved by the Administrative Agent.

          “Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified; provided, however, that for purposes of (a) Section 9.04(b)(i), the term

“Affiliate” shall also include any person that directly, or indirectly through one or more intermediaries, owns 10% or more of any class of Equity Interests of the Person specified or that is an officer or director of the Person specified and (b) the definition of the term “Eligible Accounts”, an “Affiliate” of the Collateral Parties shall not be deemed to include (i) Berkshire (or any of its Affiliates, other than the Borrower or any of the Subsidiaries), (ii) Gebr. Knauf Verwaltungsgesellschaft KG (or any of its Affiliates, other than the Borrower or any of the Subsidiaries) and (iii) with respect to Accounts in an amount less than $100,000 per person at any time outstanding arising in the ordinary course of business of the Collateral Parties, any officer, director or employee of any Loan Party. For purposes of the foregoing, the parties hereto acknowledge that, as of the Restatement Effective Date, neither Berkshire nor Gebr. Knauf Verwaltungsgesellschaft KG is an Affiliate of the Borrower or any of the Subsidiaries, except as provided in clause (a) of the immediately-preceding proviso as a result of such entity’s ownership of Equity Interests of the Borrower.

          “Affiliated Account Debtor” means, with respect to any Account Debtor and solely to the extent that any Loan Party has knowledge of such ownership, another Person (a) that directly, or indirectly through one or more intermediaries, owns 25% or more of the voting Equity Interests of such Account Debtor or (b) of which 25% or more of the voting Equity Interests of such Person is directly, or indirectly through one or more intermediaries, owned by such Account Debtor or by any Person described in clause (a) of this definition.

          “Agreement” has the meaning assigned to such term in the preamble to this Agreement.

          “Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus ¹/2 of 1% and (c) the Adjusted LIBO Rate announced on such day (or if such day is not a Business Day, the immediately preceding Business Day) for a one-month interest period beginning two Business Days after such day plus 1%, provided that, for the avoidance of doubt, the LIBO Rate used to determined the Adjusted LIBO Rate announced on any day (as referenced in the immediately preceding clause (c)) shall be based on the rate appearing on the Reuters “LIBOR01” screen displaying British Bankers’ Association Settlement Rates (or on any successor or substitute screen provided by Reuters, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such screen, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, on such day (or, if such day is not a Business Day in connection with a Eurocurrency Loan, on the immediately preceding Business Day) for a one-month interest period beginning two Business Days after such day. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.

          “Amendment and Restatement Agreement” has the meaning assigned to such term in the preamble hereto.

          “Applicable Percentage” means, at any time with respect to any Revolving Lender, the percentage of the aggregate Revolving Commitments represented by such Lender’s Revolving Commitment at such time. If the Revolving Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Revolving Commitments most recently in effect, giving effect to any assignments of Revolving Loans, LC Exposures and Swingline Exposure that occur after such termination or expiration.

          “Applicable Rate” means, for any day with respect to any ABR Loan or Eurodollar Loan, 3.00% per annum.

2

          “Approved Fund” has the meaning assigned to such term in Section 9.04(b).

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

          “Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

          “Augmenting Lender” has the meaning assigned to such term in Section 2.19(a).

          “Available Finished Good Inventory” means, at any time, the lesser of (a) 60% of an amount equal to (x) the Eligible Finished Goods Inventory (valued at the lower of cost (determined on a first-in, first-out basis) or market value) at such time less (y) Inventory Reserves applicable thereto and (b) 85% of the product of (i) the Net Orderly Liquidation Value percentage identified in the most recent Inventory appraisal provided to the Administrative Agent in accordance with the terms hereof multiplied by (ii) an amount equal to (x) the Eligible Finished Goods Inventory (valued at the lower of cost (determined on a first-in, first-out basis) or market value) at such time less (y) any Inventory Reserves applicable thereto.

          “Available Raw Materials Inventory” means, at any time, the lesser of (a) 60% of an amount equal to (x) the Eligible Raw Materials Inventory (valued at the lower of cost (determined on a first-in, first-out basis) or market value) at such time less (y) Inventory Reserves applicable thereto and (b) 85% of the product of (i) the Net Orderly Liquidation Value percentage identified in the most recent Inventory appraisal provided to the Administrative Agent in accordance with the terms hereof multiplied by (ii) an amount equal to (x) the Eligible Raw Materials Inventory (valued at the lower of cost (determined on a first-in, first-out basis) or market value) at such time less (y) any Inventory Reserves applicable thereto.

          “Available WIP Inventory” means, at any time, the lesser of (a) 60% of an amount equal to (x) the Eligible WIP Inventory (valued at the lower of cost (determined on a first-in, first-out basis) or market value) at such time less (y) Inventory Reserves applicable thereto and (b) 85% of the product of (i) the Net Orderly Liquidation Value percentage identified in the most recent Inventory appraisal provided to the Administrative Agent in accordance with the terms hereof multiplied by (ii) an amount equal to (x) the Eligible WIP Inventory (valued at the lower of cost (determined on a first-in, first-out basis) or market value) at such time less (y) any Inventory Reserves applicable thereto.

          “Availability Period” means the period from and including the Business Day immediately following the Effective Date to but excluding the earlier of the Maturity Date and the date of termination of the Revolving Commitments.

          “Banking Services” means each and any of the following bank services provided to any Loan Party by any Lender or any of its Affiliates: (a) commercial credit cards and cardless e-payables services, (b) stored value cards and (c) treasury management services (including controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services).

          “Banking Services Obligations” of the Loan Parties means any and all obligations (including obligations existing as of the Restatement Effective Date) of the Loan Parties, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), in connection with Banking Services.

3

          “Berkshire” means Berkshire Hathaway Inc., a Delaware corporation.

          “Board” means the Board of Governors of the Federal Reserve System of the U.S.

          “Borrower” means USG Corporation, a Delaware corporation.

          “Borrowing” means (a) Revolving Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect, (b) a Swingline Loan and (c) an Overadvance.

          “Borrowing Base” means, at any time, an amount equal to the sum of (a) 85% of the Adjusted Eligible Accounts at such time plus (b) the sum of (i) Available Finished Goods Inventory, (ii) Available Raw Materials Inventory and (iii) Available WIP Inventory, in each case at such time, less (c) without duplication of other Reserves included in the foregoing components of the Borrowing Base, the amount of any other Reserves established by the Administrative Agent in its Permitted Discretion at such time. The Administrative Agent may, in its Permitted Discretion and based on new information or a change in circumstances, adjust Reserves, with any such change to be effective three Business Days after delivery of notice thereof to the Borrower and the Lenders. Subject to the immediately preceding sentence, the Borrowing Base at any time shall be determined by reference to the Borrowing Base Certificate most recently delivered to the Administrative Agent pursuant to Section 5.01(e) (or, in the case of the initial Borrowing Base Certificate delivered in connection with this Agreement, pursuant to Section 5(f) of the Amendment and Restatement Agreement), subject to adjustments made by the Administrative Agent in its Permitted Discretion to address any events or conditions relating to any of the Collateral occurring on or after the date with respect to which such Borrowing Base Certificate relates.

          “Borrowing Base Certificate” means a certificate, signed and certified as accurate and complete by a Financial Officer, in substantially the form of Exhibit B or another form which is reasonably acceptable to each of the Administrative Agent and the Borrower.

          “Borrowing Base Supplemental Documentation” means the documentation listed on Schedule 1.01(c).

          “Borrowing Request” means a request by the Borrower for a Borrowing in accordance with Section 2.03.

          “Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed, provided that, when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

          “Capital Expenditures” means, for any period, without duplication, any expenditure for any purchase or other acquisition of any asset that would be classified as a capital expenditure in the financial statements of the Borrower and the Subsidiaries for such period, prepared in accordance with GAAP.

          “Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

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          “Cash Dominion Period” means any period in which full cash dominion is in effect pursuant to Section 7.03 of the Security Agreement (which, for purposes of clarity, shall be during any of (a) each period beginning on the date on which Excess Availability shall have been less than the Threshold Amount for five consecutive Business Days and ending on the first date thereafter on which Excess Availability shall have been equal to or greater than the Threshold Amount for 30 consecutive calendar days and (b) the continuation of any Event of Default). As contemplated by Section 7.03 of the Security Agreement, the Cash Dominion Period, if any, that commences during the second Cash Dominion Termination Period (as such term is defined in the Security Agreement), or after the acceleration of the Loans and/or the termination of the Commitments in accordance with Article VII, shall be deemed to continue until such time as the Security Agreement is terminated in accordance with the terms thereof.

          “Cdn$” refers to lawful money of Canada.

          “Change in Control” means (a) the ownership, directly or indirectly, beneficially or of record, by any Person or group (in each case, within the meaning of the Securities Exchange Act and the rules of the SEC thereunder as in effect on the Effective Date) other than the Restricted Group (or any of them) of Equity Securities representing more than 25% of the aggregate ordinary voting power represented by Voting Securities of the Borrower (determined on a Fully Diluted Basis) or (b) the ownership, directly or indirectly, beneficially or of record, by the Restricted Group (or any of them) of Equity Securities representing more than 40% of the aggregate ordinary voting power represented by the Voting Securities of the Borrower (determined on a Fully Diluted Basis).

          “Change in Law” means (a) the adoption of any law, rule or regulation after the Effective Date, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the Effective Date or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.14(b), by any lending office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the Effective Date.

          “CLO” has the meaning assigned to such term in Section 9.04(b).

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

          “Collateral” has the meaning assigned to such term in the Security Agreement.

          “Collateral Access Agreement” has the meaning assigned to such term in the Security Agreement.

          “Collateral Documents” means, collectively, the Security Agreement, the Deposit Account Control Agreements, the Collateral Access Agreements and each other security agreement or other instrument or document executed and delivered pursuant to Section 5.10 to secure any of the Secured Obligations.

          “Collateral Parties” means, collectively, the Loan Parties (other than any Subsidiary that is not a wholly-owned Subsidiary).

          “Collection Account” has the meaning assigned to such term in the Security Agreement.

          “Commitment” means (a) with respect to any Revolving Lender, such Lender’s Revolving Commitment and (b) with respect to the Swingline Lender, its Swingline Commitment.

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          “Commitment Increase Amendment” has the meaning assigned to such term in Section 2.19(b).

          “Consolidated Cash Interest Expense” means, for any period, the sum, without duplication, of (a) the total net consolidated interest expense of the Borrower and the Subsidiaries for such period (as shown on a consolidated income statement of the Borrower for such period) plus (b) all cash dividends paid or payable during such period in respect of Disqualified Equity Interests of the Borrower or any Subsidiary (but expressly excluding any such dividends paid or payable to the Borrower or any Subsidiary).

          “Consolidated EBITDA” means, for any period, Consolidated Net Income for such period before interest, taxes, depreciation, amortization and other non-cash adjustments (other than adjustments relating to minority interest expense) to Consolidated Net Income for such period, provided that Consolidated EBITDA shall be decreased by the amount of any cash expenditures in such period relating to non-cash adjustments added back to Consolidated EBITDA in any prior period.

          “Consolidated Net Income” means, for any period, the net income or loss of the Borrower and the Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, excluding any extraordinary gains or losses of the Borrower and the Subsidiaries for such period.

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

          “Convertible Securities” means securities of the Borrower that are convertible or exchangeable (whether presently convertible or exchangeable or not) into Voting Securities.

          “Default” means any event or condition that constitutes an Event of Default or that upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

          “Defaulting Lender” means any Revolving Lender, as determined by the Administrative Agent, that has (a) failed to fund any portion of its Loans or participations in Letters of Credit, Swingline Loans or Overadvances within three Business Days of the date required to be funded by it hereunder, (b) notified the Borrower, the Administrative Agent, the Issuing Bank or the Swingline Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or generally under other agreements in which it commits to extend credit, (c) failed, within three Business Days after request by the Administrative Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund prospective Loans and participations in then outstanding Letters of Credit, Swingline Loans and Overadvances, (d) otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within three Business Days of the date when due, unless the subject of a good faith dispute, or (e) (i) become or is insolvent or has a parent company that has become or is insolvent or (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment.

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          “Deposit Account Control Agreement” has the meaning assigned to such term in the Security Agreement.

          “Dilution Factors” means, without duplication of any reduction to the balance of any Account, with respect to any period, the aggregate amount of all deductions, credit memos, returns, adjustments, allowances, bad debt write-offs and other non-cash credits (including all volume discounts, trade discounts and rebates) that are recorded to reduce Accounts of the Collateral Parties in a manner consistent with current and historical accounting practices of the Collateral Parties.

          “Dilution Ratio” means, at any time, the amount (expressed as a percentage), calculated in connection with the delivery of the Borrowing Base Certificate for the calendar month most recently ended, equal to (a) the aggregate amount of the applicable Dilution Factors in respect of the Accounts of the Collateral Parties for the twelve-calendar-month period ended as of the last day of such calendar month divided by (b) total gross invoices of the Collateral Parties for such twelve-calendar-month period.

          “Dilution Reserve” means, at any time, the product of (a) the excess of (i) the applicable Dilution Ratio at such time over (ii) 5.00%, multiplied by (b) the aggregate amount of Eligible Accounts at such time.

          “Disclosed Matters” means the actions, suits and proceedings and the environmental matters disclosed in Schedule 3.06 or in any SEC Filing.

          “Disqualified Equity Interests” means Equity Interests that (a) mature or are mandatorily redeemable or subject to mandatory repurchase or redemption or repurchase at the option of the holders thereof (including those Equity Interests that may be required to be redeemed upon the failure to maintain or achieve any financial performance standards), in each case in whole or in part and whether upon the occurrence of any event, pursuant to a sinking fund obligation on a fixed date or otherwise, prior to the date that is 180 days after the Maturity Date (other than (i) upon payment in full of the Obligations, reduction of the LC Exposure to zero and termination of the Commitments or (ii) upon a “change in control”, provided that any payment required pursuant to this clause (ii) is contractually subordinated in right of payment to the Obligations on terms reasonably satisfactory to the Administrative Agent and such requirement is applicable only in circumstances that are market on the date of issuance of such Equity Interests) or (b) are convertible or exchangeable, automatically or at the option of any holder thereof, into any Indebtedness or Equity Interests or other assets, in each case, other than Qualified Equity Interests prior to the date that is 180 days after the Maturity Date (other than (i) upon payment in full of the Obligations, reduction of the LC Exposure to zero and termination of the Commitments or (ii) upon a “change in control”, provided that any conversion or exchange required pursuant to this clause (ii) is contractually subordinated in right of payment to the Obligations on terms reasonably satisfactory to the Administrative Agent and such requirement is applicable only in circumstances that are market on the date of issuance of such Equity Interests).

          “dollars” or “$” refers to lawful money of the U.S.

          “Domestic Material Subsidiary” means any Material Subsidiary that is organized under the laws of the U.S., any State thereof or the District of Columbia.

          “Domestic Subsidiary” means any Subsidiary that is organized under the laws of the U.S., any State thereof or the District of Columbia.

          “Effective Date” means August 2, 2006.

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          “Eligible Accounts” means, at any time, the Accounts of the Collateral Parties, but excluding any Account:

     (a) that is not subject to a first-priority perfected security interest in favor of the Administrative Agent;

     (b) that is subject to any Lien other than (i) a Lien in favor of the Administrative Agent and (ii) a Lien permitted under clauses (i) through (iv), (vi) or (xi) of Section 6.02 that does not have priority over the Lien in favor of the Administrative Agent;

     (c) with respect to which the scheduled due date is more than 60 days after the original invoice date, is unpaid more than 90 days after the date of the original invoice therefor or more than 30 days after the original due date, or which has been written off the books of the applicable Collateral Party or otherwise designated as uncollectible (in determining the aggregate unpaid amount owing from each Account Debtor with respect to Accounts that are unpaid either more than 90 days after the date of the original invoice therefor or more than 30 days after the original due date, such aggregate amount shall not be reduced to give effect to any credits extended by, or amounts owing from, the Collateral Parties to such Account Debtor);

     (d) that is owing by an Account Debtor for which more than 50% of the Accounts owing from such Account Debtor and its Affiliated Account Debtors are ineligible under clause (c) of this definition;

     (e) that is owing by an Account Debtor to the extent the aggregate amount of Accounts owing from such Account Debtor and its Affiliated Account Debtors to all Collateral Parties exceeds (i) if the corporate credit rating of such Account Debtor is BBB- or higher by S&P and the corporate family rating of such Account Debtor is Baa3 or higher by Moody’s, 20% of the aggregate amount of all Eligible Accounts at such time or (ii) if the corporate credit rating and the corporate family rating of such Account Debtor are otherwise (or if such Account Debtor does not have a corporate credit rating or a corporate family rating from S&P and Moody’s, respectively), 15% of the aggregate amount of all Eligible Accounts at such time;

     (f) with respect to which any covenant, representation, or warranty contained in any Loan Document has been breached or is not true;

     (g) that (i) does not arise from the sale of goods or performance of services in the applicable Collateral Party’s ordinary course of business, (ii) is not evidenced by an invoice or other documentation reasonably satisfactory to the Administrative Agent that has been sent to the Account Debtor, (iii) represents a progress billing, (iv) is contingent upon any Collateral Party’s completion of any further performance, (v) represents a sale on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment, cash-on-delivery or any other repurchase or return basis or (vi) relates to payments of interest;

     (h) for which the goods giving rise to such Account have not been shipped or delivered to the Account Debtor (or its designee) or for which the services giving rise to such Account have not been performed by any Collateral Party or if such Account was invoiced more than once, provided that any Account for which the invoice has been corrected due to billing errors and resent to the applicable Account Debtor shall not be deemed to have been invoiced more than once for purposes of this clause (h);

     (i) with respect to which any check or other instrument of payment therefor has been returned uncollected for any reason;

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     (j) that is owed by an Account Debtor that has (i) applied for, suffered, or consented to the appointment of any receiver, custodian, trustee or liquidator of its assets, (ii) had possession of all or a material part of its property taken by any receiver, custodian, trustee or liquidator, (iii) filed, or had filed against it, any request or petition for liquidation, reorganization, arrangement, adjustment of debts, adjudication as bankrupt, winding-up or voluntary or involuntary case under any state or federal bankruptcy laws, (iv) admitted in writing its inability, or is generally unable to, pay its debts as they become due, (v) become insolvent or (vi) ceased operation of its business;

     (k) that is owed by any Account Debtor that has sold all or substantially all of its assets (it being understood, for purposes of clarity, that any Account that is transferred to the purchaser of all or substantially all of an Account Debtor’s assets in connection with any such sale shall be an Account owed by such purchaser and shall not be deemed to be ineligible as a result of the application of this clause (k));

     (l) that is owed by an Account Debtor that (i) does not maintain its chief executive office in the U.S. (including any State thereof, the District of Columbia and, at the Administrative Agent’s discretion following a request therefor by the Borrower (and following the completion of, and the Administrative Agent’s satisfaction with, due diligence deemed to be necessary by the Administrative Agent), any territory thereof (including Puerto Rico, the U.S. Virgin Islands and Guam)), (ii) is not otherwise a resident of the U.S. (including any State thereof, the District of Columbia and, at the Administrative Agent’s discretion following a request therefor by the Borrower (and following the completion of, and the Administrative Agent’s satisfaction with, due diligence deemed to be necessary by the Administrative Agent), any territory thereof (including Puerto Rico, the U.S. Virgin Islands and Guam)) for purposes of establishing jurisdiction in the U.S. over such Account Debtor and (iii) is not organized under the applicable law of (A) the U.S. or any State or territory thereof (including Puerto Rico, the U.S. Virgin Islands and Guam) or the District of Columbia or (B) Canada or any province thereof, in each case unless such Account is backed by a letter of credit, bankers acceptance or other credit support that is acceptable to the Administrative Agent and that is in the possession of, has been assigned to and is drawable directly by the Administrative Agent;

     (m) that is owed in any currency other than dollars;

     (n) that is owed by (i) the government (or any department, agency, public corporation, or instrumentality thereof) of any country other than the U.S. unless such Account is backed by a letter of credit, bankers acceptance or other credit support that is acceptable to the Administrative Agent and that is in the possession of, has been assigned to and is drawable directly by the Administrative Agent, or (ii) the government of the U.S., or any department, agency, public corporation, or instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.), and any other steps necessary to perfect the Lien of the Administrative Agent in such Account, have been complied with to the Administrative Agent’s reasonable satisfaction;

     (o) that is owed by (i) any Affiliate of any Collateral Party or (ii) to the extent not otherwise constituting an Affiliate of any Collateral Party, any employee, officer, director or agent of any Collateral Party (other than, in the case of this clause (ii), any Account in an amount less than $100,000 per person at any time outstanding arising in the ordinary course of business of the Collateral Parties);

     (p) that is owed by an Account Debtor to which (or to whose Affiliated Account Debtor) any Collateral Party is indebted, but only to the extent of such indebtedness or is subject

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to any security, deposit, progress payment, retainage or other similar advance made by or for the benefit of an Account Debtor, in each case to the extent thereof;

     (q) that is subject to any counterclaim, deduction, defense, setoff or dispute but only to the extent of any such counterclaim, deduction, defense, setoff or dispute;

     (r) that is evidenced by any promissory note, chattel paper, or instrument;

     (s) that is owed by an Account Debtor located in any jurisdiction which requires filing of a “Notice of Business Activities Report” or other similar report in order to permit the applicable Collateral Party to seek judicial enforcement in such jurisdiction of payment of such Account, unless such Collateral Party has filed such report or qualified to do business in such jurisdiction, provided that any Account that would be an Eligible Account but for a failure to file such report or qualify to do business in the applicable jurisdiction shall be deemed to be an Eligible Account if such failure to file or qualify may be retroactively cured by the payment of a nominal amount;

     (t) with respect to which the applicable Collateral Party has made any agreement with the Account Debtor for any reduction thereof, other than discounts and adjustments given in the ordinary course of business, or any Account which was partially paid and such Collateral Party created a new receivable for the unpaid portion of such Account;

     (u) that does not comply in all material respects with the requirements of all applicable laws and regulations, whether Federal, state or local, including without limitation the Federal Consumer Credit Protection Act, the Federal Truth in Lending Act and Regulation Z of the Board;

     (v) that is for goods that have been sold under a purchase order or pursuant to the terms of a contract or other agreement or understanding (written or oral) that indicates or purports that any Person other than a Collateral Party has an ownership interest in such goods, or which indicates any party other than a Collateral Party as payee or remittance party;

     (w) that was created on cash on delivery terms; or

     (x) that the Administrative Agent determines in its Permitted Discretion may not be collectible from the Account Debtor for any reason.

          In determining the amount of an Eligible Account, the face amount of an Account may, in the Administrative Agent’s Permitted Discretion, be reduced by, without duplication, to the extent not reflected in such face amount, (i) the amount of all accrued and actual discounts, claims, credits or credits pending, promotional program allowances, price adjustments, finance charges or other allowances (including any amount that such Collateral Party may be obligated to rebate to an Account Debtor pursuant to the terms of any agreement or understanding (written or oral)) and (ii) the aggregate amount of all cash received in respect of such Account but not yet applied by such Collateral Party to reduce the amount of such Account.

          “Eligible Finished Goods Inventory” means Eligible Inventory consisting of finished goods available for sale (as determined in a manner acceptable to the Administrative Agent in its Permitted Discretion and consistent with past practices).

          “Eligible Inventory” means, at any time, the Inventory of the Collateral Parties, but excluding any Inventory:

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     (a) that is not subject to a first priority perfected Lien in favor of the Administrative Agent;

     (b) that is subject to any Lien other than (i) a Lien in favor of the Administrative Agent and (ii) any Lien permitted under clauses (i) through (iv), (vi) or (xi) of Section 6.02 that does not have priority over the Lien in favor of the Administrative Agent;

     (c) with respect to which any covenant, representation, or warranty contained in any Loan Document has been breached or is not true and which does not conform to all standards imposed by any applicable Governmental Authority;

     (d) in which any Person other than any Collateral Party shall (i) have any direct or indirect ownership, interest or title to such Inventory or (ii) be indicated on any purchase order or invoice with respect to such Inventory as having or purporting to have an interest therein;

     (e) that constitutes spare or replacement parts (other than those held for sale in the ordinary course of business), packaging and shipping material, manufacturing supplies, samples, prototypes, displays or display items, goods that are returned or marked for return, repossessed goods, defective or damaged goods, goods held on consignment (other than those on consignment with customers and subject to a Collateral Access Agreement) or goods that are not of a type held for sale in the ordinary course of business;

     (f) that is not located in the U.S. or is in transit with a common carrier from vendors and suppliers;

     (g) that is located in any location leased by a Collateral Party unless (i) the lessor has delivered to the Administrative Agent a Collateral Access Agreement and such other documentation as the Administrative Agent may reasonably request or (ii) a Rent Reserve has been established by the Administrative Agent with respect to such Inventory, provided that any Inventory located at any such location where Inventory on-hand has a book value of less than $100,000 shall not constitute Eligible Inventory;

     (h) that is located in any third party warehouse or other storage facility or is in the possession of a bailee (other than a third party processor) and is not evidenced by a document (other than bills of lading to the extent permitted by clause (f) above), unless (i) such warehouseman or bailee has delivered to the Administrative Agent a Collateral Access Agreement and such other documentation as the Administrative Agent may reasonably request or (ii) a Rent Reserve has been established by the Administrative Agent with respect to such Inventory, provided that any Inventory located at any such location where Inventory on-hand has a book value of less than $100,000 shall not constitute Eligible Inventory;

     (i) that is being processed offsite at a third party location or outside processor unless (i) such bailee has delivered to the Administrative Agent a Collateral Access Agreement and such other documentation as the Administrative Agent may reasonably request or (ii) a Rent Reserve has been established by the Administrative Agent with respect to such Inventory, provided that any Inventory located at any such location where Inventory on-hand has a book value of less than $100,000 shall not constitute Eligible Inventory;

     (j) that is a discontinued product or component thereof;

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     (k) that is the subject of a consignment by such Collateral Party as consignor;

     (l) that is not reflected in a current perpetual inventory report of the applicable Collateral Party;

     (m) for which reclamation rights have been asserted by the seller;

     (n) that consists of detonators, explosives or any similar device; or

     (o) that the Administrative Agent determines in its Permitted Discretion is unacceptable.

          In determining the value of the Inventory (on a cost basis) at any time, there shall be deducted (x) the aggregate amount of restocking and delivery fees associated with such Inventory and (y) that portion of the cost of such Inventory attributable to intercompany profits among the applicable Collateral Party and its Affiliates.

          “Eligible Raw Material Inventory” means Eligible Inventory consisting of raw materials (as determined in a manner acceptable to the Administrative Agent in its Permitted Discretion and consistent with past practices).

          “Eligible WIP Inventory” means Eligible Inventory consisting of work-in-process related to manufacturing of Inventory sold by any Collateral Party in the ordinary course of its business (as determined in a manner acceptable to the Administrative Agent in its Permitted Discretion and consistent with past practices).

          “Environmental Laws” means all treaties, laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by or with any Governmental Authority, relating in any way to the environment, the preservation or reclamation of natural resources, the generation, management, use, presence, Release or threatened Release of, or exposure to, any Hazardous Material or to health and safety matters.

          “Environmental Liability” means liabilities, obligations, claims, actions, suits, judgments, or orders under or relating to any Environmental Law for any damages, injunctive relief, losses, fines, penalties, fees, expenses (including reasonable fees and expenses of attorneys and consultants) or costs, whether contingent or otherwise, including those arising from or relating to (a) any actual or alleged violation of any Environmental Law or permit, license or approval issued thereunder, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

          “Equity Commitment Agreement” means the Equity Commitment Agreement between the Borrower and Berkshire dated January 30, 2006, as amended by Amendment No. 1 thereto dated February 23, 2006.

          “Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person.

          “Equity Securities” means, collectively, Voting Securities, Convertible Securities and Rights to Purchase Voting Securities.

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

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

          “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) any failure by any Plan to satisfy the minimum funding standard (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Plan, whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

          “Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.

          “Event of Default” has the meaning assigned to such term in Article VII.

          “Excess Availability” means, at any time, an amount equal to (a) the lesser of (i) the aggregate Revolving Commitments of all Revolving Lenders and (ii) the Borrowing Base, in each case at such time, minus (b) the aggregate Revolving Exposure of all Revolving Lenders at such time.

          “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the U.S., or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the U.S. or any similar tax imposed by any other jurisdiction described in clause (a) above and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 2.18(b)), any U.S. withholding tax that (i) is in effect and would apply to amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office), except to the extent that such Foreign Lender (or its assignor, if any, or, in the case of an SPV, its Granting Lender) was entitled, at the time of designation of a new lending office (or assignment or grant, as applicable), to receive additional amounts from the Borrower with respect to any withholding Tax pursuant to Section 2.16(a), or (ii) is attributable to such Foreign Lender’s failure to comply with Section 2.16(f).

          “Existing Credit Agreement” has the meaning assigned to such term in the preamble hereto.

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          “Existing Letters of Credit” means the letters of credit previously issued for the account of the Borrower or any Subsidiary pursuant to the Existing Credit Agreement and listed on Schedule 1.01(a).

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

          “Financial Officer” means the chief financial officer, principal accounting officer, treasurer, assistant treasurer or controller of the Borrower.

          “Fixed Charges” means, with reference to any period, without duplication, (a) the sum of (i) Consolidated Cash Interest Expense for such period and (ii) any interest accrued and paid in cash during such period in respect of Indebtedness of the Borrower or any Subsidiary that is required to be capitalized rather than included in total net consolidated interest expense for such period in accordance with GAAP, plus (b) principal payments scheduled to be made by the Borrower or any Subsidiary on Indebtedness during such period (regardless of whether such payment is actually made in such period, but giving effect to any reductions thereof resulting from any prepayment thereof in any earlier period), plus (c) prepayments of principal made by the Borrower or any Subsidiary on Indebtedness during such period that reduce the scheduled principal payments in respect of such Indebtedness required to be paid in any subsequent period, plus (d) expense for Taxes paid in cash during such period, plus (e) Restricted Payments paid in cash during such period by the Borrower or any Subsidiary (other than any such Restricted Payments paid to the Borrower or any Subsidiary), plus (f) cash contributions during such period to any Plan, plus (g) Capital Lease Obligation payments made during such period, all calculated for the Borrower and the Subsidiaries on a consolidated basis in accordance with GAAP.

          “Fixed Charge Coverage Ratio” means the ratio, determined as of the end of each fiscal quarter of the Borrower for the most-recently ended four fiscal quarters, of (a) Consolidated EBITDA for such four-fiscal-quarter period plus the aggregate amount of Transaction Costs incurred or accrued during such four-fiscal-quarter period minus the unfinanced portion of Capital Expenditures for such four-fiscal-quarter period to (b) Fixed Charges for such four-fiscal-quarter period, all calculated for the Borrower and the Subsidiaries on a consolidated basis in accordance with GAAP.

          “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is located. For purposes of this definition, the U.S., each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

          “Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

          “Fully Diluted Basis” means, with respect to the determination of whether a Change in Control has occurred, the Voting Securities that would be outstanding after giving effect to the conversion or exchange of all outstanding Convertible Securities and the exercise of all outstanding Rights to Purchase Voting Securities, in each case, whether or not presently convertible, exchangeable or exercisable.

          “GAAP” means generally accepted accounting principles in the U.S.

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          “Governmental Authority” means the government of the U.S., any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank) having jurisdiction over the Borrower, any Subsidiary or any Lender as the context may require.

          “Granting Lender” has the meaning assigned to such term in Section 9.04(e).

          “Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation, provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

          “Guarantee Agreement” means the Guarantee Agreement, dated as of the date hereof, among the Loan Parties and the Administrative Agent, for the benefit of the Secured Parties.

          “Hazardous Materials” means (a) any petroleum products or byproducts and all other hydrocarbons, radon gas, asbestos or asbestos-containing materials, urea formaldehyde foam insulation, polychlorinated biphenyls, chlorofluorocarbons and all other ozone-depleting substances; or (b) any chemical, material, substance or waste that is prohibited, limited or regulated by or pursuant to any Environmental Law.

          “Incur” means create, incur, assume, Guarantee or otherwise become responsible for, and “Incurred” and “Incurrence” shall have correlative meanings.

          “Indebtedness” of any Person means, without duplication and excluding trade accounts payable incurred in the ordinary course of business, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services, (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed; provided, however, that so long as such Person is not obligated under such Indebtedness other than with respect to such Lien, such Indebtedness shall be considered to be Indebtedness of such Person only to the extent of the lesser of the value of (i) any limit in value of the Lien or (ii) the value of the property that is subject to any such Lien, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances and (k) all Disqualified Equity Interests. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such

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Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. Notwithstanding the foregoing, in connection with any acquisition, the term “Indebtedness” shall not include contingent post-closing purchase price adjustments, non-compete payments or earn-outs to which the seller in such acquisition may become entitled.

          “Indemnified Taxes” means Taxes other than Excluded Taxes.

          “Interest Election Request” means a request by the Borrower to convert or continue a Revolving Borrowing in accordance with Section 2.07.

          “Interest Payment Date” means (a) with respect to any ABR Loan (including a Swingline Loan), the last day of each March, June, September and December and the Maturity Date and (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period.

          “Interest Period” means with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter (or nine or twelve months thereafter if, at the time of the relevant Borrowing, all Lenders participating therein agree to make an interest period of such duration available), as the Borrower may elect, provided that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

          “Inventory” has the meaning assigned to such term in the Security Agreement.

          “Inventory Reserves” shall mean, without duplication of any other applicable Reserves or eligibility exclusions, reserves against Inventory equal to the sum of the following:

     (a) a reserve for shrink, or discrepancies that arise pertaining to Inventory quantities on hand between a Collateral Party’s perpetual accounting system, and physical counts of the Inventory which will be based on the applicable Collateral Party’s historical practice and experience and in an amount acceptable to the Administrative Agent in its Permitted Discretion;

     (b) a reserve determined by the Borrower in accordance with GAAP and satisfactory to the Administrative Agent in its Permitted Discretion for Inventory that is discontinued, obsolete, slow-moving, unmerchantable, defective or unfit for sale;

     (c) the lower of the cost or market reserve for any differences between the applicable Collateral Party’s actual cost to produce such Inventory and the selling price of such Inventory to third parties;

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     (d) a reserve whereby capitalized favorable variances under the standard cost method of accounting shall be deducted from Eligible Inventory and unfavorable variances thereunder shall not be added to Eligible Inventory;

     (e) a reserve for vendor rebates owed to a Collateral Party; and

     (f) any other reserve as deemed appropriate by the Administrative Agent in its Permitted Discretion from time to time.

          “Issuing Bank” means, as the context may require, (a) (i) JPMCB and (ii) any other consenting Revolving Lender, in each case satisfactory to the Borrower and the Administrative Agent, in each case in its capacity as the issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.05(i), and (b) with respect to each Existing Letter of Credit, the Lender that issued such Existing Letter of Credit. The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank reasonably acceptable to the Borrower, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.

          “JPMCB” means JPMorgan Chase Bank, N.A., a national banking association, in its individual capacity, and its successors.

          “LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter of Credit.

          “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time and (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the aggregate LC Exposure at such time.

          “Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to Section 2.19 or Section 9.04, other than any such Person that ceases to be a party hereto pursuant to Section 9.04. Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender.

          “Letter of Credit” means any letter of credit issued pursuant to this Agreement (including each Existing Letter of Credit).

          “LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on the Reuters “LIBOR01” screen displaying British Bankers’ Association Interest Settlement Rates (or on any successor or substitute screen provided by Reuters, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such screen, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which dollar deposits of an amount comparable to the amount of such Eurodollar Borrowing and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

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          “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

          “Loan Documents” means this Agreement, any promissory notes issued pursuant to this Agreement, the Amendment and Restatement Agreement, the Collateral Documents, the Guarantee Agreement and all other agreements, instruments, documents and certificates identified in Section 5 of the Amendment and Restatement Agreement executed and delivered to, or in favor of, the Administrative Agent, the Issuing Bank or any Lender and including all other pledges, powers of attorney, consents, assignments, contracts, notices, and all other written matter whether heretofore, now or hereafter executed by or on behalf of any Loan Party, or any employee of any Loan Party, and delivered to the Administrative Agent, the Issuing Bank or any Lender in connection with this Agreement or the transactions contemplated hereby. Any reference in this Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to this Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.

          “Loan Party” means (a) the Borrower, (b) each Domestic Material Subsidiary, other than any Domestic Material Subsidiary that is not required to become a Loan Party in accordance with Section 5.10(a), and (c) each other Domestic Subsidiary designated by the Borrower, on or after the Restatement Effective Date, in writing to the Administrative Agent to be a “Loan Party” hereunder to the extent that the requirements of Section 5.10 have been satisfied with respect to such Domestic Subsidiary as if such Domestic Subsidiary were a Domestic Material Subsidiary (it being understood that any such Subsidiary so designated shall be deemed to be a Material Subsidiary for purposes of the Loan Documents).

          “Loans” means the loans made by the Administrative Agent or the Lenders to the Borrower pursuant to this Agreement, including Swingline Loans and Overadvances, as well as any loans made by the Lenders to the Borrower that are outstanding under the Existing Credit Agreement on the Restatement Effective Date (which loans shall remain outstanding hereunder on the terms set forth herein).

          “Material Adverse Effect” means a material adverse effect on (a) the business, assets or condition, financial or otherwise, of the Borrower and the Subsidiaries, taken as a whole, (b) the ability of any Loan Party to perform its material obligations under any Loan Document or (c) the material rights of or benefits available to the Lenders under any Loan Document.

          “Material Indebtedness” means Indebtedness (other than the Loans and the Letters of Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the Borrower and the Subsidiaries in an aggregate principal amount exceeding $50,000,000. For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time.

          “Material Subsidiary” means, at any time, (a) United States Gypsum Company, a Delaware corporation, (b) USG Interiors, Inc., a Delaware corporation, (c) L&W Supply Corporation, a Delaware corporation, (d) California Wholesale Material Supply, LLC, a Delaware limited liability company, (e) Otsego Paper, Inc., a Delaware corporation, (f) USG Foreign Investments, Ltd., a Delaware corporation, (g) Livonia Building Materials, LLC, a Michigan limited liability company, (h) River City

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Materials, Inc., an Arkansas corporation, and (i) each other Subsidiary that is, on or after the Restatement Effective Date, determined to be a “significant subsidiary” (as such term is defined in Regulation S-X) of the Borrower as and when required to be determined in accordance with the periodic and current reporting requirements under the Securities Exchange Act as well as Regulation S-X (it being understood that the determination as to whether any Subsidiary is a “significant subsidiary” shall be made at least annually in connection with the preparation of the annual financial statements of the Borrower).

          “Maturity Date” means August 2, 2012, or any earlier date on which the Revolving Commitments are reduced to zero or are otherwise terminated pursuant to the terms hereof.

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

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

          “Net Orderly Liquidation Value” means, with respect to Inventory of any Person, the orderly liquidation value thereof as determined in a manner acceptable to the Administrative Agent by an appraiser acceptable to the Administrative Agent in its Permitted Discretion (including pursuant to an appraisal requested by the Borrower in accordance with Section 5.07(c)), net of all costs of liquidation thereof.

          “Non-Consenting Lender” has the meaning assigned to such term in Section 9.02(c).

          “Obligations” means (a) the due and punctual payment by the Borrower of (i) the principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (ii) each payment required to be made by the Borrower under this Agreement in respect of any Letter of Credit, when and as due, including payments in respect of reimbursement of disbursements, interest thereon and obligations to provide cash collateral, and (iii) all other monetary obligations of the Borrower to any of the Secured Parties under any Loan Document, including obligations to pay fees, expense reimbursement obligations and indemnification obligations, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), (b) the due and punctual performance of all other obligations of the Borrower under or pursuant to any Loan Document and (c) the due and punctual payment and performance of all the obligations of each other Loan Party under or pursuant to each Loan Document.

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

          “Overadvance” has the meaning assigned to such term in Section 2.04(d).

          “Participant” has the meaning assigned to such term in Section 9.04(c)(i).

          “Participant Register” has the meaning assigned to such term in Section 9.04(c)(ii).

          “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

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          “Perfection Certificate” means a certificate, dated as of the Restatement Effective Date, delivered by the Borrower on behalf of the Collateral Parties and in the form of Exhibit G.

          “Permitted Discretion” means a determination made in good faith and in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment.

          “Permitted Encumbrances” means:

     (a) Liens imposed by law for taxes, assessments or other governmental charges that are not yet due or are being contested in compliance with Section 5.04;

     (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, landlords’ and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in compliance with Section 5.04;

     (c) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;

     (d) pledges and deposits to secure the performance of bids, trade contracts, leases, tenders, statutory obligations, surety stay, customs and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

     (e) judgment liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII;

     (f) easements, zoning restrictions, rights-of-way, covenants and similar encumbrances on real property that do not secure any monetary obligations and do not materially detract from the value of the affected property or materially interfere with the ordinary conduct of business of the Borrower or any Subsidiary;

     (g) Liens created by sale contracts documenting unconsummated asset dispositions permitted pursuant to this Agreement, provided that such liens attach only to assets subject to such sales contracts;

     (h) Liens consisting of the interest of the lessee under any lease or sublease granted to others by the Borrower or its Subsidiaries in its ordinary course of business, provided that such liens attach only to the assets subject to such lease or sublease;

     (i) customary rights of setoff, revocation, refund or chargeback under deposit agreements or under the UCC of banks or other financial institutions where the Borrower or any Subsidiary maintains deposits in the ordinary course of business;

     (j) Liens arising from the granting of a license to any Person in the ordinary course of business of the Borrower or any Subsidiary, provided that such liens attach only to the assets subject to such license and the granting of such license is permitted hereunder;

     (k) Liens attaching to cash earnest money deposits made by the Borrower or any Subsidiary in connection with any letter of intent or purchase agreement permitted under Section 6.04;

     (l) Liens arising by operation of law or contract on insurance policies and the proceeds thereof to secure premiums thereunder;

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     (m) Liens incurred with respect to rights of agents for collection for the Borrower and the Subsidiaries under assignments of chattel paper, accounts, instruments or general intangibles for purposes of collection in the ordinary course of business; and

     (n) Liens in favor of customs and revenues authorities that secure payment of customs duties in connection with the importation of goods, provided that such Liens attach solely to such goods being so imported and in respect of which such duties are owing,

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.

          “Permitted Investments” means any investment permitted pursuant to the Borrower’s Statement of Investment Objective and Guidelines in effect on the Restatement Effective Date as set forth on Schedule 1.01(b), as the same may be amended from time to time in a manner not adverse to the Lenders unless otherwise consented to in writing by the Administrative Agent (such consent not to be unreasonably withheld).

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

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

          “Poison Pill” means the Existing Shareholder Rights Plan, the Reorganization Rights Plan (in each case, as defined in the Equity Commitment Agreement) or any subsequent plan, agreement, rights, securities or instruments that are commonly referred to as a “poison pill” because they have the effect of diluting or otherwise discriminating against a particular “acquiring person” (or any similar term) by reason of such person’s ownership of a particular amount of Voting Securities.

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

          “Pro Forma Basis” means, with respect to the determination of Consolidated EBITDA as of any date, that such calculation shall give pro forma effect to all acquisitions, all issuances, incurrences or assumptions of Indebtedness (with any such Indebtedness being deemed to be amortized over the applicable testing period in accordance with its terms) and all sales, transfers or other dispositions of any material assets outside the ordinary course of business that have occurred during the four consecutive fiscal quarter period of the Borrower most-recently ended on or prior to such date as if they occurred on the first day of such four consecutive fiscal quarter period (including cost savings to the extent such cost savings would be permitted to be reflected in pro forma financial information complying with the requirements of GAAP and Article XI of Regulation S-X, as interpreted by the Staff of the SEC, and as certified by a Financial Officer).

          “Qualified Equity Interests” means Equity Interests of the Borrower other than Disqualified Equity Interests.

          “Register” has the meaning assigned to such term in Section 9.04(b)(iv).

          “Regulation S-X” means Regulation S-X as promulgated by the SEC.

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

          “Release” means any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or within or upon any building, structure, facility or fixture.

          “Rent Reserve” means, with respect to any warehouse, distribution center or other location not owned by a Collateral Party where Inventory on-hand having a book value of at least $100,000 is located and with respect to which no Collateral Access Agreement is in effect, a reserve equal to (a) three months’ rent in the case of leased facilities and (b) three months of fees in the case of third-party warehouses and outside processors.

          “Report” means reports prepared by the Administrative Agent or another Person showing the results of appraisals, field examinations or audits with respect to the Inventory of the Collateral Parties or the books and records relating to the Accounts of the Collateral Parties from information furnished by or on behalf of the Collateral Parties, after the Administrative Agent has exercised its rights of inspection, field examination or appraisal pursuant to this Agreement, which Reports may be distributed to the Lenders by the Administrative Agent.

          “Required Lenders” means, at any time, Lenders having Revolving Exposure and unused Revolving Commitments representing more than 50% of the aggregate Revolving Exposure and unused Revolving Commitments at such time.

          “Requirement of Law” means, with respect to any Person, (a) the charter, articles or certificate of organization or incorporation and bylaws or other organizational or governing documents of such Person and (b) any statute, law, treaty, rule, regulation, order, decree, writ, injunction or determination of any arbitrator or court or other Governmental Authority (including Environmental Laws), in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

          “Reserves” means Rent Reserves and any other reserves that the Administrative Agent deems necessary, in its Permitted Discretion, to maintain with respect to the Collateral or any Collateral Party, provided that such reserves have been established upon not less than three Business Days’ notice to the Borrower.

          “Restatement Effective Date” has the meaning assigned to such term in the Amendment and Restatement Agreement.

          “Restatement Transactions” means the execution and delivery of the Amendment and Restatement Agreement by each Person party thereto and the satisfaction of the conditions to the effectiveness thereof.

          “Restricted Collateral Party” means each of L&W Supply Corporation, a Delaware corporation, United States Gypsum Company, a Delaware corporation, USG Interiors, Inc., a Delaware corporation, and California Wholesale Material Supply, LLC, a Delaware limited liability company.

          “Restricted Group” means, collectively, (a) Berkshire, (b) any Controlled Affiliate of Berkshire and (c) any group (that would be deemed to be a “person” by Section 13(d)(3) of the Securities Exchange Act with respect to the securities of the Borrower) of which Berkshire or any Person directly or

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indirectly Controlling, Controlled by or under common Control with Berkshire is a member. For purposes of this definition, “Affiliate” and “Control” have the respective meanings given to such terms under Rule 405 under the Securities Act of 1933, as amended (and “Controlled” and “Controlling” shall have correlative meanings), provided that no Person shall be deemed to Control another Person solely by his or her status as a director of such other Person.

          “Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancelation or termination of any Equity Interests in the Borrower or any Subsidiary or any option, warrant or other right to acquire any such Equity Interests in the Borrower or any Subsidiary, or any other payment (including any payment under any equity Swap Agreement) that has a substantially similar effect to any of the foregoing.

          “Revolving Borrowing” means a Borrowing comprised of Revolving Loans.

          “Revolving Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make Revolving Loans and to acquire participations in Letters of Credit, Swingline Loans and Overadvances hereunder, expressed as an amount representing the maximum possible aggregate amount of such Lender’s Revolving Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.08, Section 2.18(b) or Section 9.02(c), (b) reduced or increased from time to time pursuant to assignments by or to such Lender, respectively, pursuant to Section 9.04 and (c) increased from time to time pursuant to Revolving Commitment Increases made pursuant to Section 2.19. The initial amount of each Lender’s Revolving Commitment is set forth on the Schedule 2.01, or in the Assignment and Assumption or Commitment Increase Amendment pursuant to which such Lender shall have assumed its Revolving Commitment, as the case may be. The initial aggregate amount of the Lenders’ Revolving Commitments on the Restatement Effective Date is $500,000,000.

          “Revolving Commitment Increase” has the meaning assigned to such term in Section 2.19(b).

          “Revolving Exposure” means, with respect to any Lender at any time, (a) the sum of the outstanding principal amount of such Lender’s Revolving Loans and its LC Exposure and Swingline Exposure at such time plus (b) an amount equal to its Applicable Percentage, if any, of the aggregate principal amount of Overadvances at such time.

          “Revolving Lender” means a Lender with a Revolving Commitment or, if the Revolving Commitments have terminated or expired, a Lender with Revolving Exposure.

          “Revolving Loan” means a Loan made pursuant to Section 2.01.

          “Rights to Purchase Voting Securities” means options, warrants and rights issued by the Borrower (whether presently exercisable or not) to purchase Voting Securities or Convertible Securities, excluding any rights issued under any Poison Pill.

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

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

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          “SEC Filing” has the meaning assigned to such term in Section 3.11.

          “Secured Obligations” means all Obligations, together with (a) Banking Services Obligations and (b) Swap Obligations owing to one or more Lenders or their respective Affiliates, provided that, except with respect to Swap Obligations owing to one or more of the Lenders or their respective Affiliates as of the Restatement Effective Date, not later than the date that is ten calendar days after the date that any transaction relating to such Swap Obligation is executed (or amended, supplemented or otherwise modified to designate such Swap Obligations as Secured Obligations), the Lender (or the applicable Affiliate) party thereto (other than JPMCB) shall have delivered written notice to the Administrative Agent that such a transaction has been entered into (or has been amended, supplemented or otherwise modified, as the case may be) and that it constitutes a Secured Obligation entitled to the benefits of the Collateral Documents. Notwithstanding the foregoing, for purposes of clause (b) of this defined term, the amount of Swap Obligations owing to one or more of the Lenders or their respective Affiliates at any time shall be deemed to be reduced by the aggregate amount of cash collateral provided in respect of such Swap Obligations at such time pursuant to cash collateralization terms agreed to by the applicable counterparties to such Swap Obligations.

          “Secured Parties” means (a) the Lenders, (b) the Administrative Agent, (c) the Issuing Bank, (d) each counterparty to any Swap Agreement with a Loan Party the obligations under which constitute Secured Obligations, (e) each provider of Banking Services which constitute Secured Obligations, (f) the beneficiaries of each indemnification obligation undertaken by any Loan Party under any Loan Document and (g) the successors and assigns of each of the foregoing.

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

          “Security Agreement” means that certain Pledge and Security Agreement, dated as of the date hereof, among the Collateral Parties and the Administrative Agent, for the benefit of the Secured Parties.

          “SPV” has the meaning assigned to such term in Section 9.04(e).

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

          “subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP, as well as any other corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held.

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          “Subsidiary” means any direct or indirect subsidiary of the Borrower.

          “Swap Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions, provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.

          “Swap Obligations” of a Loan Party means any and all obligations (including obligations existing as of the Restatement Effective Date) of such Loan Party, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all Swap Agreements and (b) any and all cancelations, buy backs, reversals, terminations or assignments of any Swap Agreement transaction.

          “Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any Lender at any time shall be its Applicable Percentage of the Swingline Exposure at such time.

          “Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as lender of Swingline Loans hereunder.

          “Swingline Loan” means a Loan made pursuant to Section 2.04.

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

          “Threshold Amount” means, at any time, an amount equal to the greater of (a) $75,000,000 and (b) 20% of the aggregate Revolving Commitments at such time.

          “Transaction Costs” means all fees, costs and expenses incurred or payable by the Borrower or any Subsidiary in connection with the Transactions, including fees payable on the Restatement Effective Date pursuant to fee letters between the Administrative Agent and the Borrower.

          “Transactions” means (a) the execution, delivery and performance by the Loan Parties of this Agreement and the other Loan Documents to which they are party, the borrowing of Loans, the use of the proceeds thereof and the issuance of Letters of Credit hereunder (including the Restatement Transactions) and (b) the payment of the Transaction Costs.

          “Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

          “UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York or any other state the laws of which are required to be applied in connection with the issue of perfection of security interests.

          “U.S.” means the United States of America.

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          “Vessel Loan Agreement” means the US$90,000,000 Secured Loan Agreement dated October 21, 2008, among Gypsum Transportation Limited, the lenders from time to time party thereto and DVB Bank SE, as agent and security trustee.

          “Voting Securities” means the common stock and any other securities of the Borrower of any kind or class having power generally to vote for the election of directors of the Borrower.

          “wholly-owned Subsidiary” means, with respect to any Person at any date, a subsidiary of such Person of which securities or other ownership interests representing 100% of the Equity Interests (other than directors’ qualifying shares) are, as of such date, owned, controlled or held by such Person or one or more wholly-owned Subsidiaries of such Person or by such Person and one or more wholly-owned Subsidiaries of such Person. Unless otherwise specified, “wholly-owned Subsidiary” means a wholly-owned Subsidiary of the Borrower.

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

          SECTION 1.02. Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Type (e.g., a “Eurodollar Loan”). Borrowings also may be classified and referred to by Type (e.g., a “Eurodollar Borrowing”).

          SECTION 1.03. Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document herein (other than the Existing Credit Agreement) shall be construed as referring to such agreement, instrument or other document as from time to time amended, amended and restated, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

          SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time, provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision (including any definition) hereof to eliminate the effect of any change occurring after the Effective Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

          SECTION 1.05. Pro Forma Calculations. With respect to any period during which any acquisition, sale, transfer or other disposition of any material assets outside the ordinary course of

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business occurs, for purposes of determining Consolidated EBITDA, calculations with respect to such period shall be made on a Pro Forma Basis.

ARTICLE II

The Credits

          SECTION 2.01. Revolving Commitments. Subject to the terms and conditions set forth herein, each Lender agrees to make Revolving Loans to the Borrower from time to time during the Availability Period in an aggregate principal amount that will not result in (a) such Lender’s Revolving Exposure exceeding such Lender’s Revolving Commitment or (b) the aggregate Revolving Exposures exceeding the lesser of (x) the aggregate Revolving Commitments and (y) the Borrowing Base, in each case at such time, subject to the Administrative Agent’s authority, in its sole discretion, to make Overadvances pursuant to the terms of Section 2.04. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans. All Loans shall be made in dollars. All Revolving Loans, Swingline Loans and Letters of Credit outstanding under the Existing Credit Agreement on the Restatement Effective Date shall remain outstanding hereunder on the terms set forth herein.

          SECTION 2.02. Loans and Borrowings. (a) Each Loan (other than a Swingline Loan or Overadvance) shall be made as part of a Borrowing consisting of Loans of the same Type made by the Lenders ratably in accordance with their respective Revolving Commitments. Any Overadvance and any Swingline Loan shall be made in accordance with the procedures set forth in Section 2.04. The failure of any Lender to make any Loan required to be made by it hereunder shall not relieve any other Lender of its obligations hereunder, provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.

          (b) Subject to Section 2.13, each Revolving Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith. Each Swingline Loan and Overadvance shall be an ABR Loan. Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan, provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.

          (c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $5,000,000. At the time that each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $1,000,000. Each Swingline Loan shall be in an amount that is not less than $500,000. Borrowings of more than one Type may be outstanding at the same time, provided that there shall not at any time be more than a total of ten Eurodollar Borrowings outstanding. Notwithstanding anything to the contrary in this Section 2.02(c), an ABR Revolving Borrowing or a Swingline Loan may be in an aggregate amount that is equal to the entire unused balance of the aggregate Revolving Commitments or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.05(e).

          (d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.

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          SECTION 2.03. Requests for Borrowings. To request a Revolving Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 a.m., New York City time, one Business Day before the date of the proposed Borrowing, provided that any such notice of an ABR Revolving Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.05(e) may be given not later than 10:00 a.m., New York City time, on the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy or Adobe pdf file to the Administrative Agent of a written Borrowing Request substantially in the form of Exhibit C signed by the Borrower. Each such telephonic and written Borrowing Request shall specify the following information:

     (i) the aggregate amount of such Borrowing;

     (ii) the date of such Borrowing, which shall be a Business Day;

     (iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

     (iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”;

     (v) the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.06; and

     (vi) that as of such date the conditions set forth in Sections 4.02(a) and (b) are satisfied.

If no election as to the Type of Revolving Borrowing is specified, then the requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Revolving Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

          SECTION 2.04. Swingline Loans and Overadvances. (a) Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the Borrower from time to time during the Availability Period, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding $40,000,000 or (ii) the aggregate Revolving Exposures exceeding the lesser of (x) the aggregate Revolving Commitments and (y) the Borrowing Base, in each case at such time, provided that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.

          (b) To request a Swingline Loan, the Borrower shall notify the Administrative Agent of such request by telephone (confirmed by telecopy or by Adobe pdf file), not later than 12:00 noon, New York City time, on the day of such proposed Swingline Loan. Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan. The Administrative Agent will promptly advise the Swingline Lender of any such notice received from the Borrower. The Swingline Lender shall make each Swingline Loan available to the Borrower by means of a credit to the general deposit account of the Borrower maintained with the Swingline Lender (or (i) in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.05(e), by remittance to the Issuing Bank or, to the extent that the Revolving Lenders

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have made payments pursuant to Section 2.05(e) to reimburse the Issuing Bank, to such Lenders and the Issuing Bank as their interests may appear and (ii) in the case of a Swingline Loan made to finance the repayment of another Loan or fees or expenses as provided by Section 2.17(c), by remittance to the Administrative Agent to be distributed to the Lenders as their interests may appear) by 3:00 p.m., New York City time, on the requested date of such Swingline Loan.

          (c) The Swingline Lender may by written notice given to the Administrative Agent not later than 12:00 noon, New York City time, on any Business Day require the Revolving Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such notice shall specify the aggregate amount of Swingline Loans in which Revolving Lenders will participate. Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Revolving Lender, specifying in such notice such Lender’s Applicable Percentage of such Swingline Loan or Swingline Loans. Each Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such Lender’s Applicable Percentage of such Swingline Loan or Swingline Loans. Each Revolving Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Revolving Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Revolving Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Revolving Lenders. The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from the Borrower (or other party on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Revolving Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear, provided that any such payment so remitted shall be repaid to the Swingline Lender or the Administrative Agent, as the case may be, if and to the extent such payment is required to be refunded to the Borrower for any reason. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower of any default in the payment thereof.

          (d) Any provision of this Agreement to the contrary notwithstanding, at the request of the Borrower, the Administrative Agent may in its sole discretion (but with absolutely no obligation) make Loans to the Borrower, on behalf of the Revolving Lenders, in amounts that exceed the Excess Availability immediately prior to the making of such Loans (any such excess Loans are herein referred to collectively as “Overadvances”), provided that no Overadvance shall result in a Default due to the Borrower’s failure to comply with Section 2.01 for so long as such Overadvance remains outstanding in accordance with the terms of this paragraph, but solely with respect to the amount of such Overadvance. In addition, Overadvances may be made even if the conditions precedent set forth in Section 4.02 have not been satisfied. All Overadvances shall be ABR Borrowings. The authority of the Administrative Agent to make Overadvances is limited to an aggregate amount not to exceed $25,000,000 at any time, no Overadvance may remain outstanding for more than 30 days and no Overadvance shall cause any Lender’s Revolving Exposure to exceed its Revolving Commitment, provided that the Required Lenders may at any time revoke the Administrative Agent’s authorization to make Overadvances. Any such

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revocation must be in writing and shall become effective prospectively upon the Administrative Agent’s receipt thereof.

          (e) Upon the making of an Overadvance by the Administrative Agent, each Revolving Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the Administrative Agent without recourse or warranty, an undivided interest and participation in such Overadvance in proportion to its Applicable Percentage of the Revolving Commitment. The Administrative Agent may, at any time, require the Revolving Lenders to fund their participations in any Overadvance. From and after the date, if any, on which any Revolving Lender is required to fund its participation in any Overadvance purchased hereunder, the Administrative Agent shall promptly distribute to such Lender, such Lender’s Applicable Percentage of all payments of principal and interest and all proceeds of Collateral received by the Administrative Agent in respect of such Overadvance.

          SECTION 2.05. Letters of Credit. (a) General. As of the Restatement Effective Date, each Existing Letter of Credit, automatically and without any action on the part of any Person, has been deemed to be a Letter of Credit issued hereunder for all purposes of this Agreement and the other Loan Documents. Subject to the terms and conditions set forth herein, the Borrower may request the issuance of Letters of Credit for its own account (or for the account of any Subsidiary so long as the Borrower and such Subsidiary are co-applicants), in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to time during the Availability Period. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

          (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank (except that the Issuing Bank in respect of Existing Letters of Credit shall not issue additional Letters of Credit and, unless agreed by it, shall not be required to amend, renew or extend an Existing Letter of Credit) and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the Issuing Bank, the Borrower also shall submit a letter of credit application on the Issuing Bank’s standard form in connection with any request for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension, (i) the LC Exposure shall not exceed $250,000,000 and (ii) the aggregate Revolving Exposures shall not exceed the lesser of (x) the aggregate Revolving Commitments and (y) the Borrowing Base, in each case at such time.

          (c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date that is one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the date that is five Business Days prior to the Maturity Date; provided, however, that a Letter of Credit may, upon the request of the Borrower and with the consent of the Issuing Bank, include a

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provision whereby such Letter of Credit shall be renewed automatically for additional consecutive periods of one year or less (but not beyond the date that is five Business Days prior to the Maturity Date) unless the Issuing Bank, in its discretion, notifies the beneficiary thereof at least 30 days prior to the then-applicable expiration date that such Letter of Credit will not be renewed.

          (d) Participations. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Revolving Lender, and each Revolving Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to the Borrower for any reason. Each Revolving Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.

          (e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 3:00 p.m., New York City time, on the date that such LC Disbursement is made, if the Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such notice has not been received by the Borrower prior to such time on such date, then not later than (i) 3:00 p.m., New York City time, on the Business Day that the Borrower receives such notice, if such notice is received prior to 10:00 a.m., New York City time, on the day of receipt, or (ii) 12:00 noon, New York City time, on the Business Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to 10:00 a.m., New York City time, on the day of receipt, provided that, if such LC Disbursement is not less than $250,000, the Borrower may, subject to the conditions to borrowing set forth herein (other than the minimum borrowing amount requirements set forth in Section 2.02(c)), request in accordance with Section 2.03 or 2.04 that such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Revolving Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such Lender’s Applicable Percentage thereof. Promptly following receipt of such notice, each Revolving Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the Borrower, in the same manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Revolving Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that Revolving Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their interests may appear. Any payment made by a Revolving Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan as contemplated above) shall not

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constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement.

          (f) Obligations Absolute. The Borrower’s obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank, provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or wilful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof (and except as otherwise required by applicable law), the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit, and any such acceptance or refusal shall be deemed not to constitute gross negligence or wilful misconduct.

          (g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The Issuing Bank shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by telecopy) of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder, provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement in accordance with paragraph (e) of this Section.

          (h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans, provided that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then

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Section 2.12(d) shall apply. Interest accrued pursuant to this paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Revolving Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment.

          (i) Replacement of the Issuing Bank. The Issuing Bank may be replaced at any time by written agreement among the Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement of the Issuing Bank. At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.11(d). From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.

          (j) Cash Collateralization. If any Event of Default shall occur and be continuing, on or after the Business Day on which the Borrower receives notice from the Administrative Agent or the Required Lenders that the maturity of the Loans has been accelerated and the Revolving Commitments have been terminated, Revolving Lenders with LC Exposure representing greater than 50% of the LC Exposure may demand the deposit of cash collateral pursuant to this paragraph, and the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders, an amount in cash equal to the LC Exposure as of such date plus any accrued and unpaid interest thereon, provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in paragraph (h) or (i) of Article VII. The Borrower also shall deposit cash collateral pursuant to this paragraph as and to the extent required by Section 2.10(b). Each such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Revolving Lenders with LC Exposure representing greater than 50% of the LC Exposure), be applied to satisfy other obligations of the Borrower under this Agreement. If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default and acceleration of the maturity of the Loans, as described above, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after all Events of Default have been cured or waived. If the Borrower is required to provide an amount of cash collateral hereunder pursuant to Section 2.10(b), such amount (to the extent not applied as aforesaid) shall be returned to the Borrower as and to the extent that, after giving effect to such return, the Borrower would remain in compliance with Section 2.10(b) and no Default shall have occurred and be continuing.

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          SECTION 2.06. Funding of Borrowings. (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 12:00 noon, New York City time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders, provided that Swingline Loans shall be made as provided in Section 2.04. The Administrative Agent will make such Loans available to the Borrower by promptly, and in no event later than 3:00 p.m., New York City time, crediting the amounts so received, in like funds, to an account of the Borrower maintained with the Administrative Agent in New York City and designated by the Borrower in the applicable Borrowing Request, provided that ABR Revolving Loans made to finance the reimbursement of (i) an LC Disbursement as provided in Section 2.05(e) shall be remitted by the Administrative Agent to the Issuing Bank or, to the extent that the Revolving Lenders have made payments pursuant to Section 2.05(e) to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their interests may appear or (ii) an Overadvance shall be retained by the Administrative Agent or, to the extent that the Revolving Lenders have made payments pursuant to Section 2.04(e) to reimburse the Administrative Agent in respect of any such Overadvance, remitted by the Administrative Agent to such Revolving Lenders as their interests may appear.

          (b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption and in its sole discretion, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest rate applicable to such Loan. If such Lender pays such amount to the Administrative Agent, then such amount (less interest) shall constitute such Lender’s Loan included in such Borrowing.

          SECTION 2.07. Interest Elections. (a) Each Revolving Borrowing initially shall be of the Type specified in the applicable Borrowing Request or designated by Section 2.03 and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request or designated by Section 2.03. Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. This Section shall not apply to Swingline Borrowings or Overadvances, which may not be converted or continued.

          (b) To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Revolving Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy or by Adobe pdf file to the Administrative Agent of a written Interest Election Request substantially in the form of Exhibit D signed by the Borrower.

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          (c) Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:

     (i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

     (ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

     (iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and

     (iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

          (d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

          (e) If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

          SECTION 2.08. Termination and Reduction of Revolving Commitments. (a) Unless previously terminated, the Revolving Commitments shall terminate on the Maturity Date.

          (b) The Borrower may at any time terminate, or from time to time reduce, in either case, without premium or penalty (other than, with respect to Eurodollar Borrowings, payments that may become due under Section 2.15), the Revolving Commitments, provided that (i) each reduction of the Revolving Commitments shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not terminate or reduce the Revolving Commitments if, after giving effect to any concurrent prepayment of the Revolving Loans in accordance with Section 2.10, the aggregate Revolving Exposure (excluding, in the case of any termination of the Revolving Commitments, the portion of the Revolving Exposure attributable to outstanding Letters of Credit if and to the extent that the Borrower has made arrangements satisfactory to the Administrative Agent and the Issuing Bank with respect to such Letters of Credit) would exceed the aggregate Revolving Commitments.

          (c) The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Revolving Commitments under paragraph (b) of this Section at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be

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irrevocable, provided that a notice of termination or reduction of Revolving Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities or the receipt of the proceeds from the issuance of other Indebtedness or any other event, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Revolving Commitments shall be permanent. Each reduction of the Revolving Commitments shall be made ratably among the Lenders in accordance with their respective Revolving Commitments.

          SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) The Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Revolving Loan of such Lender on the Maturity Date, (ii) to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the Maturity Date, provided that on each date that a Revolving Borrowing is made, the Borrower shall repay all Swingline Loans that were outstanding on the date such Borrowing was requested, and (iii) to the Administrative Agent the then unpaid principal amount of each Overadvance on the earliest of (x) the Maturity Date, (y) the day that is 30 days after the making of such Overadvance and (z) demand by the Administrative Agent.

          (b) On each Business Day during any Cash Dominion Period, the Administrative Agent shall apply all immediately available funds credited to the Collection Account, first to prepay any Overadvances that may be outstanding, pro rata, second to prepay any Swingline Loans and to reimburse any LC Disbursements that may be outstanding, pro rata, and third to prepay any Revolving Loans that may be outstanding and, if no such Loans are outstanding, to cash collateralize outstanding Letters of Credit on terms reasonably acceptable to the Administrative Agent and the Issuing Bank, it being understood that any prepayments of Revolving Loans shall be applied in accordance with the penultimate sentence of Section 2.17(b).

          (c) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

          (d) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

          (e) The entries made in the accounts maintained pursuant to paragraph (c) or (d) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein, provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans and pay interest thereon in accordance with the terms of this Agreement.

          (f) Any Lender may request that Revolving Loans made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note, substantially in the form of Exhibit H, payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns). Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).

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          SECTION 2.10. Prepayment of Loans. (a) The Borrower shall have the right at any time and from time to time to prepay without premium or penalty (other than, with respect to Eurodollar Borrowings, payments that may become due under Section 2.15) any Borrowing in whole or in part, subject to the requirements of this Section.

          (b) Except for Overadvances permitted under Section 2.04, in the event and on such occasion that the aggregate Revolving Exposure exceeds the lesser of (x) the aggregate Revolving Commitments and (y) the Borrowing Base, in each case as of the applicable date of determination, the Borrower shall prepay Revolving Borrowings and/or Swingline Borrowings (or, if no such Borrowings are outstanding, deposit cash collateral in an account with the Administrative Agent to be retained pursuant to Section 2.05(j) for so long as such condition exists) in an aggregate amount equal to such excess.

          (c) Prior to any optional prepayment or mandatory prepayment of Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid and shall specify such selection in the notice of such prepayment pursuant to paragraph (d) of this Section.

          (d) The Borrower shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy or by Adobe pdf file) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time, one Business Day before the date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 12:00 noon, New York City time, on the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date, the principal amount of each Borrowing or portion thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably detailed calculation of the amount of such prepayment, provided that a notice of optional prepayment may state that such notice is conditioned upon the effectiveness of other credit facilities or the receipt of the proceeds from the issuance of other Indebtedness or any other event, in which case such notice of prepayment may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified date) if such condition is not satisfied. Promptly following receipt of any such notice (other than a notice relating solely to Swingline Loans) the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Revolving Borrowing shall be in an amount that would be permitted in the case of an advance of a Revolving Borrowing of the same Type as provided in Section 2.02, except as necessary to apply fully the required amount of a mandatory prepayment. Each prepayment of a Revolving Borrowing shall be applied ratably to the Revolving Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.12.

          SECTION 2.11. Fees. (a) The Borrower agrees to pay to the Administrative Agent for the account of each Lender a facility fee, which shall accrue at the rate of 0.75% per annum (or, for that portion of any facility fee accruing prior to the Restatement Effective Date, at the rate per annum specified in Section 2.12(a) of the Existing Credit Agreement) on the Revolving Commitment of such Lender during the period from and including the Effective Date to but excluding the date on which the Revolving Commitments terminate. Accrued facility fees shall be payable in arrears on the third Business Day following the last day of each March, June, September and December of each year and on the date on which the Revolving Commitments terminate, commencing on the first such date to occur after the Effective Date. All facility fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

          (b) The Borrower agrees to pay (i) to the Administrative Agent for the account of each Revolving Lender a participation fee with respect to its participations in Letters of Credit, which shall

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accrue at the same Applicable Rate used to determine the interest rate applicable to Eurodollar Revolving Loans (or, for that portion of any participation fee accruing prior to the Restatement Effective Date, at the rate specified in Section 2.12(d)(i) of the Existing Credit Agreement) on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such Lender’s Revolving Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at a rate equal to 0.25% per annum (or, for that portion of any fronting fee accruing prior to the Restatement Effective Date, at the rate per annum specified in Section 2.12(d)(ii) of the Existing Credit Agreement) on the average daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date of termination of the Revolving Commitments and the date on which there ceases to be any LC Exposure, as well as the Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees accrued through and including the last day of March, June, September and December of each year shall be payable on the third Business Day following such last day, commencing on the first such date to occur after the Effective Date, provided that all such fees shall be payable on the date on which the Revolving Commitments terminate and any such fees accruing after the date on which the Revolving Commitments terminate shall be payable on demand. Any other fees payable to the Issuing Bank pursuant to this paragraph shall be payable within 10 days after demand. All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

          (c) The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon in writing between the Borrower and the Administrative Agent.

          (d) All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for distribution, in the case of commitment fees and participation fees, to the Lenders entitled thereto. Fees paid shall not be refundable under any circumstances.

          (e) For purposes of clarification, (i) any fee required to be paid under this Section 2.11 for a payment period ending prior to the Restatement Effective Date shall be deemed to have been paid for purposes of this Section 2.11 to the extent that such fee was paid under, and in accordance with the terms of, the Existing Credit Agreement and (ii) any fee required to be paid under this Section 2.11 for any portion of a payment period that occurs prior to the Restatement Effective Date shall, solely with respect to such portion of such payment period, be determined in the manner and in accordance with the terms set forth in Section 2.12 of the Existing Credit Agreement.

          SECTION 2.12. Interest. (a) The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate.

          (b) The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

          (c) Each Overadvance shall bear interest at the Alternate Base Rate plus the Applicable Rate plus 2.00%.

          (d) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment,

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at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2.00% plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount, 2.00% plus the rate applicable to ABR Revolving Loans as provided in paragraph (a) of this Section.

          (e) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and upon termination of the Revolving Commitments, provided that (i) interest accrued pursuant to paragraph (c) or (d) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

          (f) All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

          (g) For purposes of clarification, (i) any interest required to be paid under this Section 2.12 for a payment period ending prior to the Restatement Effective Date shall be deemed to have been paid for purposes of this Section 2.12 to the extent that such interest was paid under, and in accordance with the terms of, the Existing Credit Agreement and (ii) any interest required to be paid under this Section 2.12 for any portion of a payment period that occurs prior to the Restatement Effective Date shall, solely with respect to such portion of such payment period, be determined in the manner and in accordance with the terms set forth in Section 2.13 of the Existing Credit Agreement.

          SECTION 2.13. Alternate Rate of Interest. If prior to the commencement of any Interest Period for a Eurodollar Borrowing:

     (a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or

     (b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Loans included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy or by Adobe pdf file as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing, provided that following the first day that such condition shall cease to exist, such Borrowings may be made as or converted to Eurodollar Borrowings at the request of and in accordance with the elections of the Borrower.

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          SECTION 2.14. Increased Costs. (a) If any Change in Law shall:

     (i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender or the Issuing Bank (except any such reserve requirement reflected in the Adjusted LIBO Rate); or

     (ii) impose on any Lender or the Issuing Bank or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or the Issuing Bank hereunder (whether of principal, interest or otherwise), then, upon the request of such Lender or the Issuing Bank, as applicable, the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered.

          (b) If any Lender or the Issuing Bank determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered.

          (c) A certificate of a Lender or the Issuing Bank setting forth in reasonable detail calculations of the amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.

          (d) Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing Bank’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

          SECTION 2.15. Break Funding Payments. In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan (or to convert any ABR Loan into a Eurodollar Loan) on the date specified in any notice

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delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.10(d) and is revoked in accordance therewith) or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower to replace a Lender pursuant to Section 2.18(b) or Section 9.02(c), then, in any such event, the Borrower shall compensate each Lender for the loss, cost and reasonable expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest that would have accrued on the principal amount of such Loan had such event not occurred, at the LIBO Rate (without consideration of the Applicable Rate) that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest that would accrue on such principal amount for such period at the interest rate that such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market (without consideration of the Applicable Rate). A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after the Borrower’s receipt thereof.

          SECTION 2.16. Taxes. (a) Any and all payments by or on account of any obligation of the Borrower under any Loan Document shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes, provided that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

          (b) Without limiting the provisions of paragraph (a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

          (c) The Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Bank, within 10 days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower under any Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or the Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive absent manifest error.

          (d) Each Lender shall indemnify the Administrative Agent within 10 days after demand therefor, for the full amount of any Excluded Taxes attributable to such Lender that are payable by the Administrative Agent, and reasonable expenses arising therefrom or with respect thereto, whether or not such Excluded Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.

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          (e) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority pursuant to Section 2.16(a), the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

          (f) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate. In addition, any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.

          Without limiting the generality of the foregoing, in the event that the Borrower is resident for tax purposes in the U.S., any Foreign Lender shall deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of the Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:

     (i) duly completed copies of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the U.S. is a party,

     (ii) duly completed copies of Internal Revenue Service Form W-8ECI,

     (iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (x) a certificate to the effect that such Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue Service Form W-8BEN, or

     (iv) any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. Federal withholding Tax duly completed together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower to determine the withholding or deduction required to be made.

          Each Lender agrees that if any form or certification previously delivered by such Lender pursuant to this paragraph (f) expires or becomes obsolete or inaccurate in any material respect, such Lender shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of such Lender’s legal inability to do so.

          (g) If the Administrative Agent, a Lender or the Issuing Bank determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.16, it shall pay to the Borrower an amount equal to such refund. This paragraph shall not be

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construed to require the Administrative Agent, any Lender or the Issuing Bank to make available its Tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.

          SECTION 2.17. Payments Generally; Allocation of Proceeds; Sharing of Setoffs. (a) The Borrower shall make each payment required to be made by it under any Loan Document (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.14, 2.15, 2.16 or 9.03, or otherwise) at or prior to the time expressly required hereunder or under such other Loan Document for such payment (or, if no such time is expressly required, prior to 12:00 noon, New York City time), on the date when due, in immediately available funds, without setoff or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at 270 Park Avenue, New York, New York or at such other address that the Administrative Agent shall advise the Borrower in writing, except payments to be made directly to the Issuing Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Sections 2.14, 2.15, 2.16 and 9.03 shall be made directly to the Persons entitled thereto and payments pursuant to other Loan Documents shall be made to the Persons specified therein. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment under any Loan Document shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments under each Loan Document shall be made in dollars.

          (b) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal and unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties. Notwithstanding the immediately preceding sentence, any proceeds of Collateral received by the Administrative Agent (i) not constituting either (A) a specific payment of principal, interest, fees, reimbursement of LC Disbursements or other sum payable under the Loan Documents (which shall be applied as specified by the Borrower in accordance with the terms hereof), (B) a mandatory prepayment (which shall be applied in accordance with Section 2.10) or (C) amounts to be applied from the Collection Account during any Cash Dominion Period (which shall be applied in accordance with Section 2.09(b)) or (ii) after an Event of Default has occurred and is continuing and the Administrative Agent so elects or the Required Lenders so direct, shall be applied (in each case ratably as interests may appear) first, to pay any fees, indemnities, or expense reimbursements then due to the Administrative Agent from the Loan Parties (other than in connection with Banking Services Obligations or Swap Obligations), second, to pay any fees or expense reimbursements then due to the Lenders from the Loan Parties (other than in connection with Banking Services Obligations or Swap Obligations), third, to pay interest due in respect of the Overadvances, fourth, to pay the principal of the Overadvances, fifth, to pay interest then due and payable on the Loans (other than the Overadvances), sixth, to prepay principal on the Loans (other than the Overadvances) and unreimbursed LC Disbursements, seventh, to pay an amount to the Administrative Agent equal to 105% of the aggregate undrawn face amount of all outstanding Letters of Credit to be held as cash collateral for such Obligations, eighth, to the payment of any other Secured Obligation (other than Banking Services Obligations and Swap Obligations) due to the Administrative Agent or any Lender by the Loan Parties, and ninth, to pay any amounts owing with respect to Banking Services Obligations and Swap Obligations that are Secured Obligations. Notwithstanding anything to the contrary contained in this

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Agreement, unless so directed by the Borrower, or unless an Event of Default has occurred and is continuing, neither the Administrative Agent nor any Lender shall apply any payment that it receives to a Eurodollar Loan, except (x) on the expiration date of the Interest Period applicable to any such Eurodollar Loan or (y) in the event, and only to the extent, that there are no outstanding ABR Loans and, in any such event, the Borrower shall pay the break funding payment required in accordance with Section 2.15. The Administrative Agent and the Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Secured Obligations in accordance with the terms of this Agreement.

          (c) At the election of the Administrative Agent, all payments of principal, interest, fees, premiums, reimbursable expenses (including, without limitation, all reimbursement for fees and expenses pursuant to Section 9.03) and other sums payable under the Loan Documents that are not paid when due in accordance with the Loan Documents (after giving effect to any applicable grace period(s)) may be paid from the proceeds of Borrowings made hereunder whether made following a request by the Borrower pursuant to Section 2.03 or a deemed request as provided in this Section or may be deducted from any deposit account of the Borrower maintained with the Administrative Agent. The Borrower hereby irrevocably authorizes (i) the Administrative Agent to make a Borrowing in the name of the Borrower for the purpose of paying each payment of principal, interest and fees payable by the Borrower as it becomes due hereunder or any other amount due under the Loan Documents and agrees that all such amounts charged shall constitute Loans (including Swingline Loans and Overadvances, as the case may be) and that all such Borrowings shall be deemed to have been requested pursuant to Sections 2.03 or 2.04, as applicable, and (ii) the Administrative Agent to charge any deposit account of the Borrower maintained with the Administrative Agent for each payment of principal, interest and fees payable by such Borrower as it becomes due hereunder or any other amount due under the Loan Documents.

          (d) If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Revolving Loans or participations in LC Disbursements, Swingline Loans or Overadvances resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Revolving Loans and participations in LC Disbursements, Swingline Loans and Overadvances and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Revolving Loans and participations in LC Disbursements, Swingline Loans and Overadvances of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Revolving Loans and participations in LC Disbursements, Swingline Loans and Overadvances, provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to any assignee or participant, other than to the Borrower or any Subsidiary or other Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

          (e) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent

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may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption and in its sole discretion, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or the Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

          (f) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.04(c) or (e), 2.05 (d) or (e), 2.06(a) or (b), 2.17(e) or 9.03(c), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.

          SECTION 2.18. Mitigation Obligations; Replacement of Lenders. (a) If any Lender requests compensation under Section 2.14, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.14 or 2.16, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not be inconsistent with its internal policies or otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

          (b) If any Lender requests compensation under Section 2.14, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, or if any Lender becomes a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights and obligations under this Agreement to an assignee acceptable to the Borrower that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent (and, if a Revolving Commitment is being assigned, the Issuing Bank and the Swingline Lender), which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and funded participations in LC Disbursements, Swingline Loans and Overadvances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts), (iii) the Borrower or such assignee shall have paid to the Administrative Agent the processing and recordation fee specified in Section 9.04(b) and (iv) in the case of any such assignment resulting from a claim for compensation under Section 2.14 or payments required to be made pursuant to Section 2.16, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise (including as a result of any action taken by such Lender under paragraph (a) above), the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

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          SECTION 2.19. Revolving Commitment Increases. (a) The Borrower may from time to time (and more than one time), by written notice to the Administrative Agent (which shall promptly deliver a copy to each of the Lenders), request that the aggregate Revolving Commitments be increased by an amount not less than $15,000,000 for any such increase, except to the extent necessary to utilize the remaining unused amount of increase permitted under this Section 2.19(a), provided that after giving effect to any such increase the sum of the total Revolving Commitments shall not exceed $600,000,000. Such notice shall set forth the amount of the requested increase in the Revolving Commitments and the date on which such increase is requested to become effective (which shall be not less than ten Business Days or more than 60 days after the date of such notice), and shall offer each Lender (provided that such Lender shall be reasonably satisfactory to the Administrative Agent) the opportunity to increase its Revolving Commitment by such Lender’s Applicable Percentage of the proposed increased amount. Each Lender shall, by notice to the Borrower and the Administrative Agent given not more than ten days after the date of the Borrower’s notice, either agree to increase its applicable Revolving Commitment by all or a portion of the offered amount or decline to increase its applicable Commitment (and any Lender that does not deliver such a notice within such period of ten days shall be deemed to have declined to increase its Commitment). In the event that, on the tenth day after the Borrower shall have delivered a notice pursuant to the first sentence of this paragraph, the Lenders shall have declined to increase their Revolving Commitments or have agreed pursuant to the preceding sentence to increase their Revolving Commitments by an aggregate amount less than the increase in the total Revolving Commitments requested by the Borrower, the Borrower may arrange for one or more banks or other financial institutions (any such bank or other financial institution, together with any existing Lender that agrees to increase its applicable Revolving Commitment pursuant to the immediately preceding sentence, being called an “Augmenting Lender”) to provide Revolving Commitments or increase their existing Revolving Commitments in an aggregate amount equal to the unsubscribed amount, provided that each Augmenting Lender shall be subject to the approval of the Administrative Agent (which approval shall not be unreasonably withheld) and shall not be subject to the approval of any other Lenders, and the Borrower and each Augmenting Lender shall execute all such documentation as the Administrative Agent shall reasonably specify to evidence the Revolving Commitment of such Augmenting Lender and/or its status as a Lender hereunder. Any increase in the aggregate Revolving Commitments may be made in an amount that is less than the increase requested by the Borrower if the Borrower is unable to arrange for, or chooses not to arrange for, Augmenting Lenders.

          (b) Each of the parties hereto hereby agrees that, upon the effectiveness of any increase in the aggregate Revolving Commitments pursuant to this Section 2.19 (the “Revolving Commitment Increase”), this Agreement may be amended (such amendment, a “Commitment Increase Amendment”) without the consent of any Lenders to the extent (but only to the extent) necessary to reflect the existence and terms of the Revolving Commitment Increase evidenced thereby as provided for in Section 9.02(b). Upon each Revolving Commitment Increase pursuant to this Section, (i) each Lender immediately prior to such increase will automatically and without further act be deemed to have assigned to each Augmenting Lender providing a portion of such Revolving Commitment Increase, and each such Augmenting Lender will automatically and without further act be deemed to have assumed, a portion of such Lender’s participations hereunder in outstanding Letters of Credit, Swingline Loans and Overadvances such that, after giving effect to such Revolving Commitment Increase and each such deemed assignment and assumption of participations, the percentage of the aggregate outstanding (A) participations hereunder in Letters of Credit, (B) participations hereunder in Swingline Loans and (C) participations hereunder in Overadvances held by each Lender (including each such Augmenting Lender) will equal such Lender’s Applicable Percentage and (ii) if, on the date of such Revolving Commitment Increase, there are any Revolving Loans outstanding, such Revolving Loans shall on or prior to the effectiveness of such Revolving Commitment Increase be prepaid from the proceeds of additional Revolving Loans made hereunder (reflecting such Revolving Commitment Increase), which prepayment shall be accompanied by accrued interest on the Revolving Loans being prepaid and any

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costs incurred by any Lender in accordance with Section 2.15. The Administrative Agent and the Lenders hereby agree that the minimum borrowing, pro rata borrowing and pro rata payment requirements contained elsewhere in this Agreement shall not apply to the transactions effected pursuant to the immediately preceding sentence.

          (c) Increases and new Revolving Commitments created pursuant to this Section 2.19 shall become effective on the date specified in the notice delivered by the Borrower pursuant to the first sentence of paragraph (a) above or on such other date as agreed upon by the Borrower, the Administrative Agent and the applicable Augmenting Lenders.

          (d) Notwithstanding the foregoing, no increase in the Revolving Commitments (or in any Commitment of any Lender) or addition of an Augmenting Lender shall become effective under this Section unless on the date of such increase, the conditions set forth in paragraphs (a) and (b) of Section 4.02 shall be satisfied as of such date (as though the effectiveness of such increase were a Borrowing) and the Administrative Agent shall have received a certificate to that effect dated such date and executed by a Financial Officer.

          SECTION 2.20. Defaulting Lenders. Notwithstanding any provision of this Agreement to the contrary, if any Revolving Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

          (a) if any Swingline Exposure or LC Exposure exists, or any Overadvance is outstanding, at the time a Revolving Lender is a Defaulting Lender, the Borrower shall within one Business Day following notice by the Administrative Agent (i) prepay such Swingline Exposure or, if agreed by the Swingline Lender, cash collateralize the Swingline Exposure of the Defaulting Lender on terms satisfactory to the Swingline Lender, (ii) cash collateralize such Defaulting Lender’s LC Exposure in accordance with the procedures set forth in Section 2.05(j) for so long as such LC Exposure is outstanding and (iii) prepay such Overadvance or, if agreed by the Administrative Agent, cash collateralize that portion of such Overadvance attributable to such Defaulting Lender’s participation interest therein on terms satisfactory to the Administrative Agent; and

          (b) the Administrative Agent shall not be required to fund any Overadvance, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit unless it is satisfied that cash collateral will be provided by the Borrower in accordance with Section 2.20(a).

ARTICLE III

Representations and Warranties

          The Borrower represents and warrants to the Lenders that:

          SECTION 3.01. Organization; Powers. The Borrower and each of the Material Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and as proposed to be conducted, to execute, deliver and perform its obligations under each Loan Document to which it is a party and to effect the Transactions and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.

          SECTION 3.02. Authorization; Enforceability. The Transactions to be entered into by each Loan Party have been duly authorized by all necessary corporate or other action and, if required,

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action by the holders of such Loan Party’s Equity Interests. This Agreement has been duly executed and delivered by the Borrower and constitutes, and each other Loan Document to which any Loan Party is to be a party, when executed and delivered by such Loan Party, will constitute, a legal, valid and binding obligation of the Borrower or such Loan Party (as the case may be), enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

          SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (i) filings with any Governmental Authority necessary to perfect Liens created under the Loan Documents and (ii) such as have been obtained or made and are in full force and effect, except such consents, approvals, registrations or filings, the failure of which to have been obtained, received or made will not materially impair the effectiveness of the Transactions or materially adversely affect the operations of the Borrower and the Subsidiaries, taken as a whole, (b) will not violate any material Requirement of Law applicable to the Borrower or any Material Subsidiary, (c) will not violate or result in a material default under any material indenture, agreement or other instrument binding upon the Borrower or any Material Subsidiary or their respective assets, or give rise to a right thereunder to require any material payment to be made by the Borrower or any Material Subsidiary or give rise to a right of, or result in, termination, cancelation or acceleration of any material obligation thereunder, and (d) will not result in the creation or imposition of any Lien (other than a Lien permitted under Section 6.02) on any asset of the Borrower or any Material Subsidiary.

          SECTION 3.04. Financial Condition; No Material Adverse Change. (a) The Borrower has heretofore furnished to the Lenders its consolidated balance sheet and consolidated statements of income, stockholders’ equity and cash flows (i) as of and for the fiscal year ended December 31, 2007, reported on by Deloitte & Touche LLP, independent public accountants, and (ii) as of and for the fiscal quarters and the portions of the fiscal year ended March 31, 2008, June 30, 2008, and September 30, 2008 (and comparable period for the prior fiscal year). Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and the Subsidiaries as of such dates and for such periods in accordance with GAAP consistently applied, subject to year end audit adjustments and the absence of footnotes in the case of the statements referred to in clause (ii) above.

          (b) On and as of the Restatement Effective Date, no event, change or condition has occurred that has had, or could reasonably be expected to have, a material adverse effect on the business, operations, properties, assets, condition (financial or otherwise), liabilities (including contingent liabilities) or prospects of the Borrower and the Subsidiaries, taken as a whole, since December 31, 2007, provided that it is understood that the Lenders are satisfied with (and no such material adverse effect shall be deemed to have occurred with respect to) the results of operations and financial conditions set forth in the financial statements for the period ended September 30, 2008, as set forth in the Borrower’s 10-Q filed with the SEC on October 28, 2008, and the projected “Base Case” and “Downside Case” for fiscal year 2008 as set forth in the Lender Discussion — Amendment Proposal dated December 17, 2008, delivered by the Borrower to the Administrative Agent and the Lenders.

          SECTION 3.05. Properties. (a) The Borrower and each of the Material Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property, except for any defects that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

          (b) The Borrower and each of the Material Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, and

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the use thereof by the Borrower and the Material Subsidiaries does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

          SECTION 3.06. Litigation and Environmental Matters. (a) There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower or any Material Subsidiary, threatened against or affecting the Borrower or any Material Subsidiary (i) as to which there is a reasonable likelihood of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve any of the Loan Documents or the Transactions.

          (b) Except for the Disclosed Matters and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any Material Subsidiary (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.

          SECTION 3.07. Compliance with Laws and Agreements. The Borrower and each of the Material Subsidiaries is in compliance with (a) all Requirements of Law applicable to it or its property and (b) all indentures, agreements and other instruments binding upon it or its property, except, in each of the cases of (a) and (b) above, where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

          SECTION 3.08. Investment Company Status. Neither the Borrower nor any Subsidiary is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

          SECTION 3.09. Taxes. The Borrower and each of the Subsidiaries (a) has timely filed or caused to be filed all Tax returns and reports required to have been filed, except to the extent that failure to do so could not reasonably be expected to result in a Material Adverse Effect, and (b) has paid or caused to be paid all Taxes required to have been paid by it, except any Taxes that are being contested in good faith by appropriate proceedings, provided that the Borrower or such Subsidiary, as the case may be, has set aside on its books adequate reserves therefor and the failure to pay such Taxes would not reasonably be expected to result in a Material Adverse Effect.

          SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.

          SECTION 3.11. Disclosure. None of (i) the Borrower’s Quarterly Reports on Form 10-Q for the periods ended March 31, 2008, June 30, 2008, and September 30, 2008, its Annual Report on Form 10-K for the fiscal year ended December 31, 2007 (collectively, the “SEC Filings”), and the other filings of the Borrower made with the SEC in 2008 and 2009 (but prior to the Restatement Effective Date) nor (ii) any of the other reports, financial statements, certificates or other information furnished by or on behalf of the Borrower to the Administrative Agent or any Lender pursuant to any Loan Document or delivered thereunder (as modified or supplemented by other information furnished by or on behalf of the Borrower to the Administrative Agent in connection herewith), as of the date such disclosures are delivered, contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading,

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provided that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed by it to be reasonable at the time delivered (unless otherwise updated subsequent thereto, in which case such information was prepared in good faith based upon assumptions believed by it to be reasonable at the time updated).

          SECTION 3.12. Insurance. Schedule 3.12 sets forth a description of all insurance maintained by or on behalf of the Loan Parties and the Material Subsidiaries as of the Restatement Effective Date. As of the Restatement Effective Date, all premiums due in respect of such insurance have been paid.

          SECTION 3.13. Security Interest in Collateral. The provisions of this Agreement and the other Loan Documents create legal and valid Liens on all the Collateral in favor of the Administrative Agent, for the benefit of the Secured Parties, and, for so long as UCC financing statements or Deposit Account Control Agreements, as the case may be, with respect to such Collateral have not been terminated by the Administrative Agent (or otherwise amended by the Administrative Agent in a manner that adversely affects the Lien in favor of the Secured Parties thereby perfected), such Liens constitute perfected and continuing Liens on the Collateral, securing the Secured Obligations, enforceable against the applicable Loan Party and all third parties, and having priority over all other Liens on the Collateral except in the case of Liens permitted under clauses (ii) through (iv), (vi) and (xi) of Section 6.02, to the extent any such Liens would have priority over the Liens in favor of the Administrative Agent pursuant to any applicable law.

          SECTION 3.14. Labor Matters. As of the Restatement Effective Date, there are no material strikes, lockouts or slowdowns or any other material labor disputes against the Borrower or any Material Subsidiary pending or, to the knowledge of the Borrower or any Material Subsidiary, threatened or planned.

ARTICLE IV

Conditions

          SECTION 4.01. [Intentionally Omitted]

          SECTION 4.02. Each Credit Event. The obligation of each Lender to make a Loan on the occasion of any Borrowing (other than a deemed Borrowing under Section 2.17(c) and an Overadvance made under Section 2.04), and of the Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the receipt by the Administrative Agent of the request therefor in accordance herewith and to the satisfaction of the following conditions:

     (a) Other than the representation and warranty set forth in Section 3.04(b), the representations and warranties of the Loan Parties set forth in the Loan Documents that are qualified by materiality shall be true and correct and the representations and warranties that are not so qualified shall be true and correct in all material respects on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as the case may be, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct as of such earlier date).

     (b) At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as the case may be, no Default shall have occurred and be continuing.

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Each Borrowing (provided that a conversion or a continuation of a Borrowing shall not constitute a “Borrowing” for purposes of this Section) and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section.

ARTICLE V

Affirmative Covenants

          Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees, expenses and other amounts (other than contingent amounts not yet due) payable under any Loan Document shall have been paid in full and all Letters of Credit shall have expired or been terminated (or cash collateralized in an amount equal to 105% of the aggregate undrawn amount of all outstanding Letters of Credit) and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that:

          SECTION 5.01. Financial Statements; Borrowing Base and Other Information. The Borrower will furnish to the Administrative Agent for prompt delivery to each Lender:

     (a) within 90 days after the end of each fiscal year of the Borrower, the Borrower’s audited consolidated balance sheet and audited consolidated statements of operations, stockholders’ equity and cash flows as of the end of and for such year, and related notes thereto, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Deloitte & Touche LLP or other independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and the Subsidiaries on a consolidated basis in accordance with GAAP consistently applied;

     (b) within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, the Borrower’s unaudited consolidated balance sheet and unaudited consolidated statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by a Financial Officer as presenting fairly in all material respects the financial condition and results of operations of the Borrower and the Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

     (c) concurrently with any delivery or deemed delivery of financial statements under paragraph (a) or (b) above, a certificate of a Financial Officer substantially in the form of Exhibit E (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations of the financial covenant (and the components thereof) contained in Section 6.12 and (iii) stating whether any change in GAAP or in the application thereof has occurred since the later of the date of the Borrower’s most recent audited financial statements referred to in Section 3.04 and the date of the prior certificate delivered pursuant to this paragraph (c) indicating such a change and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate;

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     (d) not later than 90 days subsequent to the commencement of each fiscal year of the Borrower, a detailed consolidated budget for such fiscal year (including a projected consolidated balance sheet and consolidated statements of projected operations, comprehensive income and cash flows as of the end of and for such fiscal year and setting forth the assumptions used for purposes of preparing such budget) and, promptly when available, any significant revisions of such budget;

     (e) as soon as available but in any event within 13 Business Days of the end of each calendar month, as of the last day of the preceding calendar month, a Borrowing Base Certificate and supporting information in connection therewith, together with any additional reports with respect to the Borrowing Base as the Administrative Agent may reasonably request. Notwithstanding any provision of this Agreement to the contrary, subsequent to each date on which Excess Availability is less than the Threshold Amount (or if a Borrowing or the issuance of a Letter of Credit would cause Excess Availability to fall below the Threshold Amount), the Borrower shall not be permitted to make any additional Borrowings or such Borrowing or request the issuance of additional Letters of Credit or such Letter of Credit, as the case may be (provided that a conversion or a continuation of a Borrowing shall not constitute a “Borrowing” for purposes of this sentence), unless the Borrower shall have delivered to the Administrative Agent a Borrowing Base Certificate as of a date no earlier than three Business Days prior to the date of such Borrowing or the issuance of such Letter of Credit; provided, however, the Borrower shall not be required to deliver a Borrowing Base Certificate pursuant to the second sentence of this paragraph if Excess Availability shall have exceeded the Threshold Amount for a period of five consecutive Business Days prior to the date of such Borrowing or the issuance of such Letter of Credit;

     (f) concurrently with the delivery of each Borrowing Base Certificate, and at such other times as may be reasonably requested by the Administrative Agent, all Borrowing Base Supplemental Documentation for the month (or such shorter period as contemplated by clause (e) of this Section) then ended;

     (g) promptly as reasonably practicable after the request therefor, such additional information concerning the Accounts and Inventory of the Collateral Parties or adjustments thereto as may be reasonably requested by the Administrative Agent from time to time;

     (h) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Borrower or any Subsidiary with the SEC or with any national securities exchange, or distributed by the Borrower to the holders of its Equity Interests generally, as the case may be;

     (i) promptly upon obtaining knowledge of any such event, circumstance or change, a written notice of any event, circumstance or change that has occurred since the delivery of the most recent Borrowing Base Certificate in accordance with the terms of this Agreement that would materially reduce the aggregate amount of the Eligible Accounts or the Eligible Inventory or result in a material portion of the Eligible Accounts ceasing to be Eligible Accounts or a material portion of the Eligible Inventory ceasing to be Eligible Inventory; and

     (j) promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any Subsidiary, or compliance with the terms of any Loan Document, as the Administrative Agent (on behalf of any Lender) may reasonably request.

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Information required to be delivered pursuant to Sections 5.01(a), (b) and (h) shall be deemed to have been delivered on the date on which the Borrower provides notice to the Administrative Agent that such information has been posted on the SEC website on the Internet at www.sec.gov, or through a link on the Borrower’s website at www.usg.com, or at another website identified in such notice and accessible by the Lenders without charge, provided that such notice may be included in a certificate delivered pursuant to Section 5.01(c).

          SECTION 5.02. Notices of Material Events. The Borrower will furnish to the Administrative Agent (for prompt distribution to each Lender through the Administrative Agent) written notice promptly, but in any event within five Business Days of, when any of the Chief Executive Officer, the President or the General Counsel of the Borrower or any Financial Officer obtains actual knowledge of the following:

     (a) the occurrence of any Default;

     (b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or, to the knowledge of a Financial Officer or another executive officer of the Borrower or any Subsidiary, affecting the Borrower or any Affiliate thereof that has a reasonable likelihood of being adversely determined, and, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;

     (c) any Lien (other than Liens permitted by clauses (i) through (iv), (vi) or (xi) of Section 6.02) or claim made or asserted against any of the Collateral;

     (d) the occurrence of any ERISA Event or any fact or circumstance that gives rise to a reasonable expectation that any ERISA Event will occur that, in either case, alone or together with any other ERISA Events that have occurred or are reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect;

     (e) any change in the Borrower’s corporate credit rating by S&P or Moody’s, or any notice from either such agency indicating its intent to effect such a change or to place the credit facilities on a “CreditWatch” or “WatchList” or any similar list, in each case with negative implications, or its cessation of, or its intent to cease, issuing a corporate credit rating for the Borrower; and

     (f) any other development (including notice of any Environmental Liability) that results in, or could reasonably be expected to result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a written statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

          SECTION 5.03. Existence; Conduct of Business. The Borrower will, and will cause each Subsidiary to, do or cause to be done all things necessary to obtain, preserve, renew and keep in full force and effect its legal existence and, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect, the rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names material to the conduct of its business, provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03.

          SECTION 5.04. Payment of Taxes. The Borrower will, and will cause each Subsidiary to, pay its liabilities for Taxes, the amounts of which are material to the Borrower and its Subsidiaries taken as a whole, before such liabilities shall become delinquent or in default, except where (a) the

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validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP, (c) such contest effectively suspends collection of the contested obligation and the enforcement of any Lien securing such obligation and (d) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.

          SECTION 5.05. Maintenance of Properties. The Borrower will, and will cause each Subsidiary to, keep and maintain all property used in the conduct of its business in good working order and condition, ordinary wear and tear excepted, except for properties, the failure of which to maintain, could not reasonably be expected to result in a Material Adverse Effect.

          SECTION 5.06. Insurance. (a) The Borrower will, and will cause each Material Subsidiary to, maintain, with financially sound and reputable insurance companies, (i) insurance in such amounts (with no greater risk retention) and against such risks as is (A) customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations and (B) considered adequate by the Borrower and (ii) all other insurance as may be required by law, provided that self-insurance through any captive insurance Subsidiary or through deductibles or copayments shall not be deemed a violation of this covenant to the extent that companies engaged in similar businesses similarly self-insure. The Borrower will furnish to the Lenders, upon the reasonable request of the Administrative Agent, information in reasonable detail as to the insurance so maintained.

          (b) All insurance policies required under paragraph (a) of this Section 5.06, to the extent such insurance policies insure any portion of the Collateral, shall name the Administrative Agent (for the benefit of the Secured Parties) as an additional insured or as loss payee, as applicable, and shall contain loss payable clauses or mortgagee clauses, through endorsements in form and substance reasonably satisfactory to the Administrative Agent, that provide that (i) all proceeds thereunder with respect to any Collateral shall be payable to the Administrative Agent and (ii) such policy and loss payable or mortgagee clauses may be canceled, amended or terminated only upon at least 30 days’ prior written notice given to the Administrative Agent.

          (c) If the Borrower or any Material Subsidiary shall fail to obtain any insurance as required by paragraph (a) of this Section 5.06, the Administrative Agent may obtain such insurance at the Borrower’s expense. By purchasing such insurance, the Administrative Agent shall not be deemed to have waived any Default arising from the Borrower’s or such Material Subsidiary’s failure to maintain such insurance.

          SECTION 5.07. Books and Records; Inspection Rights; Field Examinations; Inventory Appraisals. (a) The Borrower will, and will cause each Subsidiary to, keep proper books of record and account in which entries that are full, true and correct in all material respects are made of all material dealings and transactions in relation to its business and activities. The Borrower will, and will cause each Loan Party to, permit any representatives designated by the Administrative Agent (who may be accompanied by a representative of any Lender at such Lender’s expense), upon reasonable prior notice and during normal workings hours, periodically (but no more frequently than annually, except if an Event of Default shall be continuing), to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants.

          (b) The Administrative Agent shall be entitled to conduct, at its reasonable discretion, on reasonable prior notice and during normal working hours, periodic field examinations of the books and records relating to the Accounts of the Collateral Parties and the Inventory of the Collateral Parties, in each case to ensure the adequacy of the Collateral that constitutes the Borrowing Base and the related

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reporting and control systems; provided, however, that so long as no Event of Default has occurred and is continuing, (x) if no Loans are then outstanding hereunder, the Administrative Agent shall be limited in any twelve-calendar-month period to one such field examination and (y) if any Loans are then outstanding hereunder, then the Administrative Agent shall be entitled to two such field examinations during any twelve-calendar-month period.

          (c) At any time that the Administrative Agent requests, each of the Collateral Parties will provide the Administrative Agent with appraisals or updates thereof of its Inventory from an appraiser selected and engaged by the Administrative Agent, and prepared on a basis satisfactory to the Administrative Agent, and such appraisals or updates, as the case may be, will include information required by applicable law and regulations; provided, however, that (unless the Borrower otherwise requests in writing to the Administrative Agent that additional appraisals of Inventory be conducted in the relevant twelve-calendar-month period) so long as no Event of Default has occurred and is continuing (x) if no Loans are then outstanding hereunder, the Administrative Agent shall be limited in any twelve-calendar-month period to one such appraisal and (y) if any Loans are then outstanding hereunder, then the Administrative Agent shall be entitled to two such appraisals during any twelve-calendar-month period. Each such appraisal shall be at the sole expense of the Collateral Parties.

          (d) The Borrower acknowledges that the Administrative Agent, after exercising its rights of inspection, field examination or appraisal pursuant to this Section 5.07, may prepare and distribute to the Lenders certain Reports pertaining to the Loan Parties’ assets for internal use by the Administrative Agent and the Lenders.

          SECTION 5.08. Compliance with Laws. The Borrower will, and will cause each Subsidiary to, comply with all Requirements of Law with respect to it or its property, except where non-compliance could not reasonably be expected to result in a Material Adverse Effect or where the necessity of compliance therewith is contested in good faith by appropriate proceedings.

          SECTION 5.09. Use of Proceeds and Letters of Credit. The proceeds of the Loans will be used only to finance general working capital needs and for other general corporate purposes (including acquisitions), in each case of the Borrower and the Subsidiaries. No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X. Letters of Credit will be used only for general corporate purposes.

          SECTION 5.10. Further Assurances. (a) The Borrower shall cause (i) (A) each Domestic Material Subsidiary formed or acquired on or after the date of this Agreement in compliance with the terms of this Agreement and (B) each Subsidiary that otherwise qualifies as a Domestic Material Subsidiary on or after the date of this Agreement, in each case, to become a Loan Party by executing a supplement to the Guarantee Agreement in the form attached to the Guarantee Agreement and (ii) (A) each Domestic Material Subsidiary that is a wholly-owned Subsidiary and formed or acquired on or after the date of this Agreement in compliance with the terms of this Agreement and (B) each Subsidiary that otherwise qualifies as a Domestic Material Subsidiary that is a wholly-owned Subsidiary on or after the date of this Agreement, in each case, to become a Collateral Party by executing a supplement to the Security Agreement in the form attached to the Security Agreement, provided that the terms of this Section 5.10(a) shall not be required to be satisfied with respect to any Subsidiary (x) that is subject to any legal or any contractual restriction (to the extent such restriction does not violate any of the terms of any Loan Document) preventing or prohibiting it from satisfying such requirement or (y) with respect to which the Administrative Agent determines that the cost of satisfaction of such requirement with respect thereto exceeds the value afforded thereby (and any such Subsidiary that does not so satisfy the terms of this Section 5.10(a) shall not become a Loan Party and/or a Collateral Party hereunder).

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          (b) Subject to the limitations set forth in the Security Agreement, the Borrower will, and will cause each Loan Party to, execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements and other documents), that may be required under any applicable law, or that the Administrative Agent or the Required Lenders may reasonably request, to carry out the terms and conditions of this Agreement and the other Loan Documents, and to ensure perfection and priority of the Liens created or intended to be created by the Collateral Documents, all at the expense of the Loan Parties. The Borrower also agrees to provide to the Administrative Agent, from time to time upon request, evidence reasonably satisfactory to the Administrative Agent as to the perfection and priority of the Liens created or intended to be created by the Collateral Documents.

          SECTION 5.11. Control Agreements; Collateral Access Agreements. (a) The Borrower will, and will cause each applicable Collateral Party to, (a) enter into the Deposit Account Control Agreements required to be provided pursuant to Section 7.01 of the Security Agreement and (b) open the Collection Account with the Administrative Agent, in each case no later than the date that is 60 days (or such longer period as the Administrative Agent, in its sole discretion, may agree) after the Restatement Effective Date. In connection with the foregoing, the Borrower shall deliver to the Administrative Agent a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated as of the date on which the obligations set forth in this Section 5.11 have been satisfied) of Jones Day, counsel for the Borrower and the Domestic Material Subsidiaries, in form and substance reasonably satisfactory to the Administrative Agent and covering such customary matters relating to such Deposit Account Control Agreements governed by the laws of, or (solely with respect to the opinion relating to perfection of a security interest) entered into by a depositary bank whose jurisdiction (for purposes of Section 9-304 of the UCC and as designated in the applicable Deposit Account Control Agreement) is in a State in which, Jones Day is then licensed to practice.

          (b) The Borrower will, and will cause each applicable Collateral Party to, use its commercially reasonable efforts to enter into Collateral Access Agreements required to be provided pursuant to Section 4.05 of the Security Agreement no later than the date that is 90 days (or such longer period as the Administrative Agent, in its sole discretion, may agree) after the Restatement Effective Date.

ARTICLE VI

Negative Covenants

          Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees, expenses and other amounts payable (other than contingent amounts not yet due) under any Loan Document have been paid in full and all Letters of Credit have expired or been terminated (or cash collateralized in an amount equal to 105% of the aggregate undrawn amount of all outstanding Letters of Credit) and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that:

          SECTION 6.01. Indebtedness. (a) Neither the Borrower nor any of the Subsidiaries shall directly or indirectly create, incur, assume or otherwise become or remain directly or indirectly liable with respect to any Indebtedness, the incurrence of which would cause the Borrower to violate the financial covenant set forth in Section 6.12 (giving effect to such incurrence of Indebtedness on a pro forma basis as if such incurrence (and the application of any proceeds therefrom, including the repayment of any Indebtedness with the proceeds of the Indebtedness being so incurred) occurred on the first day of the applicable four fiscal quarter period ended immediately prior to such incurrence) to the extent such Section is in effect as of the date of such determination (or would be in effect after giving effect to such

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incurrence of Indebtedness). It is understood and agreed that any Indebtedness incurred under Section 6.01(a) of the Existing Credit Agreement, to the extent such Indebtedness was, at the time of such incurrence, permitted to be so incurred thereunder, shall be deemed to have been incurred under, and in compliance with, this Section 6.01(a) as of the Restatement Effective Date.

          (b) Neither the Borrower nor any of its Subsidiaries shall at any time permit the sum, without duplication, of (i) all Indebtedness of the Borrower and the Subsidiaries secured by Liens plus (ii) all Indebtedness of the Subsidiaries (including Subsidiaries acquired after the Effective Date) to exceed $500,000,000 at any time outstanding.

          (c) Notwithstanding anything to the contrary in paragraph (b) of this Section 6.01, the following Indebtedness of the Borrower and the Subsidiaries (including Subsidiaries acquired after the Effective Date) shall not be prohibited by Section 6.01(b) and shall not be included in calculating the levels of Indebtedness permitted under Section 6.01(b) regardless of whether such Indebtedness is secured as permitted by Section 6.02:

     (i) (x) Indebtedness created under the Loan Documents and (y) other Indebtedness existing on the Effective Date and set forth in Schedule 6.01 and extensions, renewals and replacements of any such Indebtedness, provided that such extending, renewal or replacement Indebtedness (A) shall not be Indebtedness of an obligor that was not an obligor with respect to the original Indebtedness being extended, renewed or replaced (other than in the case of Guarantees otherwise permitted by clause (iii) of this Section 6.01(c)), (B) shall not be in a principal amount that exceeds the principal amount of the Indebtedness being extended, renewed or replaced (plus any accrued but unpaid interest and redemption premium thereon), (C) shall not have an earlier maturity date or shorter weighted average life to maturity than the Indebtedness being extended, renewed or replaced and (D) shall be subordinated to the Obligations to the same extent as the Indebtedness being extended, renewed or replaced, if applicable;

     (ii) Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary, provided that (A) Indebtedness of any Subsidiary (other than a Loan Party) owing to any Loan Party shall be subject to Section 6.04 and (B) Indebtedness of the Borrower to any Subsidiary or of any other Loan Party to any other Subsidiary (other than a Loan Party) shall be subordinated to the Obligations on terms reasonably satisfactory to the Administrative Agent;

     (iii) Guarantees by the Borrower of Indebtedness of any Subsidiary, and by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary, provided that (A) the Indebtedness so Guaranteed shall not be prohibited by this Section (other than clause (c)(ii)) and (B) Guarantees by any Loan Party of Indebtedness of any Subsidiary (other than a Loan Party) shall be subject to Section 6.04;

     (iv) (A) Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations and any Indebtedness that is assumed by the Borrower or any Subsidiary or that remains Indebtedness of an acquired entity in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, provided that such Indebtedness is incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement, and (B) extensions, renewals and replacements of any such Indebtedness so long as the outstanding principal amount of such extensions, renewals and replacements does not exceed the principal of the Indebtedness being extended, renewed or replaced (plus any

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accrued but unpaid interest and premium thereon), provided that the aggregate principal amount of Indebtedness permitted by this clause (iv) incurred after the Effective Date shall not exceed $100,000,000 at any time outstanding;

     (v) Indebtedness in respect of Swap Agreements permitted by Section 6.06; and

     (vi) Indebtedness in respect of any financing or capital lease financing relating to the Borrower’s or the Subsidiaries’ sea vessels in an amount not to exceed $75,000,000 at any time outstanding.

          SECTION 6.02. Liens. The Borrower will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except:

     (i) Liens created pursuant to any Loan Document;

     (ii) Permitted Encumbrances;

     (iii) any Lien on any property or asset of the Borrower or any Subsidiary existing on the Effective Date and set forth in Schedule 6.02, provided that (A) such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary (other than assets financed by the same financing source pursuant to the same financing scheme in the ordinary course of business) and (B) such Lien shall secure only those obligations that it secured on the Effective Date and extensions, renewals and replacements thereof so long as the principal amount of such extensions, renewals and replacements does not exceed the principal amount of the obligations being extended, renewed or replaced (plus any accrued but unpaid interest and premium thereon);

     (iv) any Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the Effective Date prior to the time such Person becomes a Subsidiary, provided that (A) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (B) such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary (other than assets financed by the same financing source pursuant to the same financing scheme in the ordinary course of business) and (C) such Lien shall secure only those obligations that it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be, and extensions, renewals and replacements thereof so long as the principal amount of such extensions, renewals and replacements does not exceed the principal amount of the obligations being extended, renewed or replaced (plus any accrued but unpaid interest and premium thereon);

     (v) Liens on fixed or capital assets acquired, constructed or improved (including any such assets made the subject of a Capital Lease Obligation incurred) by the Borrower or any Subsidiary after the Effective Date, provided that (A) such Liens secure Indebtedness incurred to finance such acquisition, construction or improvement and permitted by clause (iv)(A) of Section 6.01(c) or to extend, renew or replace such Indebtedness and permitted by clause (iv)(B) of Section 6.01(c), (B) such Liens and the Indebtedness secured thereby are incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement (provided that this clause (B) shall not apply to any Indebtedness permitted by clause (iv)(B) of Section 6.01(c) or any Lien

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securing such Indebtedness), (C) the Indebtedness secured thereby does not exceed the lesser of the cost of acquiring, constructing or improving such fixed or capital asset or, in the case of Indebtedness permitted by clause (iv)(A) of Section 6.01(c), its fair market value at the time such security interest attaches, and in any event, the aggregate principal amount of such Indebtedness does not exceed $100,000,000 at any time outstanding and (D) such Liens shall not apply to any other property or assets of the Borrower or any Subsidiary (except assets financed by the same financing source pursuant to the same financing scheme in the ordinary course of business);

     (vi) Liens of a collecting bank arising in the ordinary course of business under Section 4-208 of the Uniform Commercial Code in effect in the relevant jurisdiction covering only the items being collected upon;

     (vii) Liens granted by a Subsidiary in respect of Indebtedness permitted by Section 6.01;

     (viii) Liens securing obligations under Swap Agreements (and related netting agreements) entered into after the Effective Date and permitted under Section 6.06 in an amount not to exceed $150,000,000 on a marked-to-market basis at any time outstanding;

     (ix) Liens existing or deemed to exist securing the ship financing Indebtedness described in Section 6.01(c)(vi) in an amount not to exceed $75,000,000, provided that such Liens shall apply only to those assets and rights of the type pledged under the Vessel Loan Agreement and the collateral documents entered into in connection therewith (as the Vessel Loan Agreement and such other documents are in effect on the Restatement Effective Date) and shall not apply to any other property or asset of the Borrower or any Subsidiary;

     (x) Liens not otherwise permitted by this Section to the extent that the aggregate outstanding principal amount of the obligations secured thereby does not at any time exceed $100,000,000; and

     (xi) Liens created by sales contracts documenting unconsummated asset dispositions permitted hereby, provided that such Liens attach only to those assets that are the subject of the applicable sales contract.

Notwithstanding the foregoing, none of the Liens permitted pursuant to this Section 6.02 may at any time attach to any Collateral, other than those permitted under clauses (i) through (iv), (vi) and (xi) of this Section 6.02.

          SECTION 6.03. Fundamental Changes. (a) The Borrower will not, and will not permit any Material Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing (i) any Person may merge into the Borrower in a transaction in which the Borrower is the surviving corporation and (ii) any Person (other than the Borrower) may merge into any Subsidiary in a transaction in which the surviving entity is a Subsidiary and (if any party to such merger is a Restricted Collateral Party, a Collateral Party or a Loan Party) is a Restricted Collateral Party, a Collateral Party or a Loan Party, as the case may be, provided that any such merger involving a Person that is not a wholly-owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 6.04.

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          (b) The Borrower will not, and will not permit any Material Subsidiary to, engage to any material extent in any business other than businesses of the type conducted by the Borrower and the Subsidiaries on the Effective Date and businesses reasonably related thereto.

          (c) The Borrower will not, and will not permit any other Loan Party, to sell, transfer, lease or otherwise dispose of all or substantially all its assets, provided that this clause (c) shall not prohibit any such sale, transfer, lease or other disposition (i) by any Collateral Party to any other Collateral Party, (ii) by any wholly-owned Subsidiary (other than a Collateral Party) to the Borrower or any other wholly-owned Subsidiary or (iii) of assets the aggregate fair value of which, determined as of the date of such sale, transfer, lease or other disposition and when combined with the aggregate fair value of all assets sold, transferred, leased or otherwise disposed of pursuant to this clause (iii) (in each case, determined as of the date of the sale, transfer, lease or other disposition of the applicable assets), does not exceed 15% of the consolidated assets of the Loan Parties as determined on such date. Notwithstanding the foregoing, (A) no Restricted Collateral Party may issue any Equity Interests (other than to the Borrower or to another wholly-owned Subsidiary), (B) neither the Borrower nor any other Subsidiary may sell, transfer or otherwise dispose of any Equity Interests of any Restricted Collateral Party (other than to the Borrower or to any wholly-owned Subsidiary) except in a transaction pursuant to clause (iii) of this paragraph (c) in which 100% of the Equity Interests of such Restricted Collateral Party are sold, transferred or otherwise disposed of and (C) neither the Borrower nor any Restricted Collateral Party may sell, transfer, lease or otherwise dispose of all or substantially all its assets (other than to the Borrower or to another Restricted Collateral Party) except in a transaction pursuant to clause (iii) of this paragraph (c).

          SECTION 6.04. Investments. The Borrower will not, and will not permit any Loan Party to, purchase or acquire (including pursuant to any merger with such Person) any Equity Interests in or evidences of Indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make any loans or advances to, or Guarantee any Indebtedness of, any other Person (other than a Loan Party), or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit, or incur an obligation (contingent or otherwise) to do any of the foregoing (each, an “Investment”), at any time when (x) the Excess Availability is less than the Threshold Amount at such time or (y) a Default or Event of Default has occurred and is continuing, provided that, without limiting the foregoing, so long as no Default or Event of Default shall have occurred and is continuing, the Borrower may make Investments in an aggregate amount (each such Investment being valued at the amount determined therefor at the date made net of any return of capital or sale proceeds actually received in cash (which shall not exceed the cost of such Investment) in respect of such Investment) not to exceed $150,000,000 at any time outstanding; provided further that the Borrower shall not, nor shall it permit any Loan Party to, make an Investment that would otherwise be permitted by this Section if, in the Borrower’s reasonable business judgment (taking into account, among other things, the likelihood that the Borrower or any other Loan Party would be required to make a cash payment in respect of such Investment as well as alternate sources of cash (other than proceeds from Borrowings hereunder) that are reasonably likely to be available for the funding of such Investment at the time a cash payment in respect of such Investment would become due), such Investment (when taken together with each other Investment made pursuant to this Section 6.04, excluding clauses (a) through (j) of this Section 6.04) would result in Excess Availability being less than $50,000,000 (after giving effect to any cash payments, and any Borrowings hereunder, made (or to be made) in connection with such Investments). Notwithstanding the foregoing, the following Investments shall be deemed not to be covered or restricted by this Section:

     (a) Investments existing on the Restatement Effective Date and set forth on Schedule 6.04 and Permitted Investments;

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     (b) payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses of the Borrower or any Subsidiary for accounting purposes and that are made in the ordinary course of business;

     (c) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business;

     (d) Investments in the form of Swap Agreements permitted by Section 6.06;

     (e) Investments of any Person existing at the time such Person becomes a Subsidiary or consolidates or merges with the Borrower or any Subsidiary so long as such Investments were not made in contemplation of such Person becoming a Subsidiary or of such consolidation or merger;

     (f) Investments resulting from pledges or deposits described in clause (c) or (d) of the definition of the term “Permitted Encumbrance”;

     (g) Investments received in connection with the disposition of any asset permitted by Section 6.03(c);

     (h) receivables or other trade payables owing to the Borrower or a Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms, provided that such trade terms may include such concessionary trade terms as the Borrower or any Subsidiary deems reasonable under the circumstances;

     (i) Investments in or to any Loan Party; and

     (j) Investments to the extent funded with the proceeds of any substantially concurrent issuance of Qualified Equity Interests to the extent that such issuance does not result in a Change in Control.

          SECTION 6.05. Sale and Leaseback Transactions. Neither the Borrower nor any of the Subsidiaries shall become liable, directly or by way of a Guarantee, with respect to any lease, whether or not such lease results in a Capital Lease Obligation, of any property (whether real or personal or mixed) whether now owned or hereafter acquired, that the Borrower or any Subsidiary has sold or transferred or is to sell or transfer to any other Person after the Effective Date (a “Sale and Leaseback Transaction”), provided that the Borrower or a Subsidiary may enter into a Sale and Leaseback Transaction if (a) at the time of such Sale and Leaseback Transaction, no Event of Default is continuing, (b) the proceeds from the sale of the subject property shall be at least equal to 80% of its fair market value and (c) if such Sale and Leaseback Transaction results in a Capital Lease Obligation, such Capital Lease Obligation is not prohibited by Section 6.01 and any Lien made the subject of such Capital Lease Obligation is not prohibited by Section 6.02.

          SECTION 6.06. Swap Agreements. The Borrower will not, and will not permit any Subsidiary to, enter into any Swap Agreement for speculative purposes.

          SECTION 6.07. Restricted Payments. (a) The Borrower will not, and will not permit any Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, if (i) a Default has occurred and is continuing or would result therefrom or (ii) such Restricted Payment is not at the time permitted by a Requirement of Law or any agreement or instrument applicable to the Borrower or such Subsidiary, provided that this paragraph (a) shall not restrict dividends or similar distributions payable solely in

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Qualified Equity Interests or made by Subsidiaries to wholly-owned Subsidiaries or to the Borrower (it being understood that this proviso shall not permit any such dividend or similar distribution (A) from a Domestic Subsidiary to a Foreign Subsidiary or (B) in the case of any such dividend or distribution comprised of Collateral, from a Collateral Party to an entity that is not a Collateral Party).

          (b) Notwithstanding anything in Section 6.07(a) to the contrary, the aggregate amount of Restricted Payments permitted to be made (or with respect to which obligations (contingent or otherwise) to do so are permitted to be incurred) by the Borrower and the Subsidiaries pursuant to this Section 6.07 (excluding any Restricted Payments made (or with respect to which obligations (contingent or otherwise) to do so have been entered into) by the Borrower or any Subsidiary at any time when (x) Excess Availability at such time is equal to or greater than the Threshold Amount, (y) the Fixed Charge Coverage Ratio at such time, determined for the period of four consecutive fiscal quarters most recently ended at or prior to such time, is equal to or greater than 1.10 to 1.00 and (z) no Default or Event of Default has occurred and is continuing) shall not exceed (i) $25,000,000 in any calendar year and (ii) $50,000,000 in the aggregate for the term of this Agreement, provided that this paragraph (b) shall not restrict dividends or similar distributions payable solely in Qualified Equity Interests or made by Subsidiaries to wholly-owned Subsidiaries or to the Borrower (it being understood that this proviso shall not permit any such dividend or similar distribution (A) from a Domestic Subsidiary to a Foreign Subsidiary or (B) in the case of any such dividend or distribution comprised of Collateral, from a Collateral Party to an entity that is not a Collateral Party).

          SECTION 6.08. Transactions with Affiliates. The Borrower shall not, and shall not suffer or permit any Material Subsidiary to, enter into any transaction with any Affiliate (other than the Borrower or a wholly-owned Subsidiary) of the Borrower, except transactions (a) entered into in good faith and (b) at prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties.

          SECTION 6.09. Restrictive Agreements. The Borrower will not, and will not permit any Material Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the Borrower or any Material Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets or (b) the ability of any Material Subsidiary to pay dividends or other distributions with respect to any of its Equity Interests or to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary, provided that (i) the foregoing shall not apply to restrictions and conditions imposed by (A) law or (B) any Loan Document, (ii) the foregoing shall not apply to restrictions or conditions existing on the Effective Date and identified on Schedule 6.09 (but shall apply to any extension or renewal of, or any amendment, modification or replacement expanding the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary or any assets pending such sale, provided that such restrictions and conditions apply only to the Subsidiary or assets that is or are to be sold and such sale is permitted hereunder, (iv) paragraph (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness, (v) paragraph (a) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof, (vi) paragraph (a) of the foregoing shall not apply to any existing or future joint venture agreement that restricts the ability of any party to such agreement to create, incur or permit a Lien on the equity interests in the joint venture, provided that the Borrower and any Material Subsidiary party to such agreement collectively own no more than 81 percent of the equity interests in such joint venture and (vii) paragraph (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement if the terms of such agreement expressly permit the creation, incurrence and existence of Liens to secure Indebtedness or other Secured Obligations under this

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Agreement and extensions, renewals and replacements of any such Indebtedness or other Secured Obligations.

          SECTION 6.10. Amendment of Material Documents. The Borrower will not, and will not permit any Subsidiary to, amend, modify, waive, terminate or release its certificate of incorporation, by-laws or other organizational documents, if the effect of such amendment, modification, waiver, termination or release is materially adverse to the Borrower and the Subsidiaries, taken as a whole, or the Lenders.

          SECTION 6.11. Changes in Fiscal Periods. Without the prior consent of the Administrative Agent, the Borrower will neither (a) permit its fiscal year or the fiscal year of any Subsidiary to end on a day other than December 31, nor (b) change its method of determining fiscal quarters.

          SECTION 6.12. Fixed Charge Coverage Ratio. If, at any time, Excess Availability is less than the greater of (a) $50,000,000 and (b) 15% of the aggregate Revolving Commitments at such time, then the Borrower will not permit the Fixed Charge Coverage Ratio at such time, determined for the period of four consecutive fiscal quarters most recently ended at or prior to such time, to be less than 1.10 to 1.00.

ARTICLE VII

Events of Default

          If any of the following events (any such event, an “Event of Default”) shall occur:

     (a) the Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

     (b) the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in paragraph (a) of this Article) payable under any Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five Business Days;

     (c) any representation or warranty made or deemed made by or on behalf of the Borrower or any Material Subsidiary in or in connection with the Existing Credit Agreement (to the extent made prior to the Restatement Effective Date and not waived), any Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder that is qualified by materiality shall prove to have been incorrect or any representation or warranty that is not so qualified shall prove to have been incorrect in any material respect when made or deemed made;

     (d) the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02, 5.03 (with respect to the existence of the Borrower) or 5.09 or in Article VI of this Agreement or any Collateral Party shall fail to observe or perform any covenant, condition or agreement contained in Section 4.01(j) or Article VII, in each case of the Security Agreement; provided, however, that, without limiting the effect of any other Default or Event of Default under this Article VII, any Default arising under Section 5.02 (or any Default arising under a failure of the conditions set forth in Section 4.02 arising solely as a result of a

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failure to comply with Section 5.02) shall be deemed to be cured upon the giving of such notice by the Borrower;

     (e) the Borrower or any other Loan Party shall fail to observe or perform any covenant, condition or agreement contained in any Loan Document (other than those specified in paragraph (a), (b) or (d) of this Article), and, except as otherwise provided in such Loan Document, such failure shall continue unremedied for a period of 30 days after notice thereof from any Lender or the Administrative Agent to the Borrower;

     (f) the Borrower or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable after the expiration of any applicable grace periods;

     (g) any event or condition occurs (including the triggering of any change in control or similar event with respect to the Borrower) (i) that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with all applicable grace periods having expired, provided that, during the applicable grace period, no additional consideration is paid or additional rights are granted in respect of such Material Indebtedness) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity or (ii) the effect of which event or condition is to cause, or to permit the holder or holders of any Material Indebtedness (or a trustee or agent on behalf of such holder or holders) to require, with the giving of notice if required, any Material Indebtedness to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), prior to its stated maturity, provided that this paragraph (g) shall not apply to secured Indebtedness that becomes due as a result of the sale, transfer or other disposition (including as a result of a casualty or condemnation event) of the property or assets securing such Indebtedness (to the extent such sale, transfer or other disposition is not prohibited under this Agreement);

     (h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any Material Subsidiary or their debts, or of a substantial part of their assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Material Subsidiary or for a substantial part of their assets, and, in any such case, such proceeding or petition shall continue undismissed or unstayed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

     (i) the Borrower or any Material Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in paragraph (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Material Subsidiary or for a substantial part of their assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

     (j) the Borrower or any Material Subsidiary shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;

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     (k) one or more judgments for the payment of money in an aggregate amount in excess of $50,000,000 shall be rendered against the Borrower, any Material Subsidiary or any combination thereof (provided that in determining whether the foregoing threshold is satisfied, there shall be excluded any portion of such judgments that is fully covered by a third party insurance company rated not less that “B++” by A.M. Best (less any applicable deductible) and as to which the insurer has not disputed, in writing, its responsibility to cover such judgment) and the same shall remain unpaid or undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any Material Subsidiary to enforce any such judgment;

     (l) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to have a Material Adverse Effect;

     (m) any Loan Document shall for any reason be asserted by the Borrower not to be a legal, valid and binding obligation of the Borrower;

     (n) a Change in Control shall occur;

     (o) the Guarantee Agreement shall fail to remain in full force or effect or any action shall be taken by any Loan Party to discontinue or to assert the invalidity or unenforceability of the Guarantee Agreement, or any Loan Party shall deny that it has any further liability under the Guarantee Agreement to which it is a party, or shall give notice to such effect; or

     (p) any Collateral Document shall for any reason fail to create a valid and perfected first priority security interest in any Collateral purported to be covered thereby, except as permitted by the terms of any Collateral Document, or any Collateral Document shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of any Collateral Document,

then, and in every such event (other than an event with respect to the Borrower described in paragraph (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in paragraph (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

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ARTICLE VIII

The Administrative Agent

          Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf, including execution of the other Loan Documents, and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Bank, and the Borrower shall not have rights as a third party beneficiary of any of such provisions.

          The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.

          The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary or believed by the Administrative Agent in good faith to be necessary under the circumstances as provided in Section 2.05(j) or Section 9.02), and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any Subsidiary that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 2.05(j) or Section 9.02 or believed by the Administrative Agent in good faith to be necessary) or in the absence of its own gross negligence or wilful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, (v) the creation, perfection or priority of Liens on the Collateral or the existence of the Collateral, or (vi) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

          The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Adobe pdf file, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed or sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by

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telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the Loan Parties), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

          The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent, provided that the Administrative Agent shall remain liable for the performance of such obligations and duties. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers by or through their respective Related Parties, provided that the Administrative Agent shall remain liable for the performance of such obligations and duties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

          In determining compliance with any condition hereunder to the making of a Loan, or the issuance, amendment, renewal or extension of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the Issuing Bank, the Administrative Agent may presume that such condition is satisfactory to such Lender or the Issuing Bank unless the Administrative Agent shall have received notice to the contrary from such Lender or the Issuing Bank prior to the making of such Loan or the issuance, amendment, renewal or extension of such Letter of Credit.

          Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time upon notice to the Lenders, the Issuing Bank and the Borrower. Upon any such resignation, the Required Lenders shall have the right, with the consent of the Borrower in the absence of a continuing Event of Default, to appoint a successor. If no successor shall have been so appointed by the Borrower and the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent that shall be a commercial bank with an office in New York, New York, or an Affiliate of any such commercial bank, in either case, acceptable to the Borrower in the absence of a continuing Event of Default (such acceptance not to be unreasonably withheld or delayed). Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from all its duties and obligations under the Loan Documents. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed in writing between the Borrower and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

          Each Lender and the Issuing Bank acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and the Issuing Bank also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon any Loan Document or any related agreement or any document furnished thereunder.

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          Notwithstanding anything herein to the contrary, none of the agents listed on the cover page hereof shall have any powers, duties or responsibilities under any Loan Document, except in its capacity, as applicable, as the Administrative Agent, a Lender or the Issuing Bank hereunder.

          Each Lender hereby agrees that (a) it has requested a copy of each Report prepared by or on behalf of the Administrative Agent; (b) the Administrative Agent (i) makes no representation or warranty, express or implied, as to the completeness or accuracy of any Report or any of the information contained therein or any inaccuracy or omission contained in or relating to a Report and (ii) shall not be liable for any information contained in any Report; (c) the Reports are not comprehensive audits or examinations, and that any Person performing any field examination will inspect only specific information regarding the Loan Parties and will rely significantly upon the Loan Parties’ books and records, as well as on representations of the Loan Parties’ personnel and that the Administrative Agent undertakes no obligation to update, correct or supplement the Reports; (d) it will keep all Reports confidential and strictly for its internal use, not share the Report with any Loan Party or any other Person except as otherwise permitted pursuant to this Agreement; and (e) without limiting the generality of any other indemnification provision contained in this Agreement, it will pay and protect, and indemnify, defend, and hold the Administrative Agent and any such other Person preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including reasonable attorney fees) incurred by such Person as the direct or indirect result of disclosure of any such Report to a third party by such indemnifying Lender in violation of the terms hereof.

ARTICLE IX

Miscellaneous

          SECTION 9.01. Notices. (a) Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy or Adobe pdf file, as follows:

               (i) if to the Borrower or any Loan Party, to the Borrower at:

550 West Adams Street
Chicago, IL 60661
Attention: Vice President and Treasurer
Telecopy No.: (312) 672-3883

with a copy to:

Corporate Secretary
Telecopy No.: (312) 672-7748;

               (ii) if to the Administrative Agent, the Issuing Bank or the Swingline Lender, to:

JPMorgan Chase Bank, N.A.
1111 Fannin, 10th Floor
Houston, Texas 77002
Attention: Marshella B. Williams
Telecopy No.: (713) 427-6307
email: Marshella.B.Williams@chase.com

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with a copy to:

JPMorgan Chase Bank, N.A.
270 Park Avenue,
New York, NY 10017
Attention: Peter Predun
Telecopy No.: (212) 270-5100
email: peter.predun@jpmorgan.com; and

     (iii) if to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.

All such notices and other communications (i) sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received or (ii) sent by telecopy or by Adobe pdf file shall be deemed to have been given when sent, provided 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.

          (b) Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. Notices and other communications to the Lenders and the Issuing Bank hereunder may also be delivered or furnished by electronic communication (including e-mail, Adobe pdf file 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 or the Issuing Bank pursuant to Article II if such Lender or the Issuing Bank, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower (on behalf of the Loan Parties) 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. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

          SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in exercising any right or power under any Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or the issuance, amendment, renewal or extension of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default at the time. No notice to or demand on the Borrower or any other Loan Party in any case shall entitle the Borrower or any other Loan Party to any other or further notice or demand in similar or other circumstances.

          (b) Except as provided in Section 2.19 with respect to any Revolving Commitment Increase, neither any Loan Document nor any provision thereof may be waived, amended or modified except, in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or, in the case of any other Loan Document, pursuant to an

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agreement or agreements in writing entered into by the Administrative Agent and the applicable Loan Parties, in each case with the consent of the Required Lenders, provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce or forgive any fees payable hereunder, without the written consent of each Lender affected thereby, (iii) postpone the maturity of any Loan, or the required date of reimbursement of any LC Disbursement, or any date for the payment of any interest or fees payable hereunder, or reduce or forgive the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender affected thereby, (iv) change Section 2.17(b) or (d) or any other provision of this Agreement in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender adversely affected thereby, (v) change any of the provisions of this Section or the percentage set forth in the definition of “Required Lenders” or any other provision of any Loan Document specifying the number or percentage of Lenders required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender (it being understood that, with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Required Lenders on substantially the same basis as the Revolving Commitments on the Restatement Effective Date), (vi) modify the protections afforded to an SPV pursuant to the provisions of Section 9.04(e) without the written consent of such SPV, (vii) release any material Loan Party from its Guarantee under the Guarantee Agreement (except as expressly provided in the Guarantee Agreement), or limit its liability in respect of such Guarantee, without the written consent of each Lender, (viii) release all or substantially all the Collateral from the Liens of the Collateral Documents, without the written consent of each Lender or (ix) change any of the provisions of the definitions of “Eligible Accounts”, “Eligible Inventory” or “Borrowing Base” (including the advance rates referenced therein and any defined term used therein relevant to the determination of the Borrowing Base), without the written consent of Lenders having Revolving Exposure and unused Revolving Commitments, if any, representing more than 75% of the sum of the total Revolving Exposure and unused Revolving Commitments at such time; provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Issuing Bank or the Swingline Lender without the prior written consent of the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be.

          (c) In connection with any proposed amendment, modification, waiver or termination (a “Proposed Change”) requiring the consent of all Lenders or all affected Lenders, if the consent of the Required Lenders to such Proposed Change is obtained, but the consent to such Proposed Change of other Lenders whose consent is required is not obtained (any such Lender whose consent is not obtained as described in paragraph (b) of this Section being referred to as a “Non-Consenting Lender”), then, so long as the Lender that is acting as Administrative Agent is not a Non-Consenting Lender, the Borrower may, at its sole expense and effort, upon notice to such Non-Consenting Lender and the Administrative Agent, require such Non-Consenting Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent, the Issuing Bank and the Swingline Lender, which consent shall not unreasonably be withheld or delayed, (ii) such Non-Consenting Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements, Swingline Loans and Overadvances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Loan Parties (in the case of all other amounts) and (iii) the Loan Parties or such assignee shall have paid to the Administrative Agent the processing and recordation fee specified in Section 9.04(b).

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          SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower shall pay (i) all reasonable out-of-pocket expenses (including reasonable expenses incurred in connection with due diligence) incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, in connection with the syndication of the credit facilities provided for herein, the preparation and administration of the Loan Documents or any amendments, modifications or waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent, the Issuing Bank or any Lender, in connection with the enforcement or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such reasonable out-of-pocket expenses incurred during any workout or restructuring (and related negotiations) in respect of such Loans or Letters of Credit.

          (b) The Borrower shall indemnify the Administrative Agent, the Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all out-of-pocket losses, claims, damages, liabilities and related reasonable expenses, including the reasonable fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee by any third party or by the Borrower or any Subsidiary arising out of, in connection with, or as a result of (i) the execution or delivery of any Loan Document or any other agreement or instrument contemplated thereby, the performance by the parties to the Loan Documents of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated thereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or Release of Hazardous Materials on, at, to or from any property currently or formerly owned or operated by the Borrower or any Subsidiary, or any other Environmental Liability related in any way to the Borrower or any Subsidiary or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any Subsidiary and regardless of whether any Indemnitee is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final, non-appealable judgment to have resulted from the gross negligence or wilful misconduct of such Indemnitee.

          (c) To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent, the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this Section and without limiting the Borrower’s obligation to do so, each Lender severally agrees to pay to the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent, the Issuing Bank or the Swingline Lender in its capacity as such. The obligations of the Lenders under this paragraph (c) are subject to the last sentence of Section 2.02(a) (which shall apply mutatis mutandis to the Lenders’ obligations under this paragraph (c)).

          (d) To the fullest extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect,

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consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, any Loan Document or any agreement or instrument contemplated thereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

          (e) All amounts due under this Section shall be payable not later than three Business Days after written demand therefor setting forth the basis for such claim in reasonable detail.

          SECTION 9.04. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

          (b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of (A) the Borrower, provided that no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund (as defined below) or, if an Event of Default has occurred and is continuing, any other assignee; (B) the Administrative Agent; and (C) the Issuing Bank.

     (ii) Assignments shall be subject to the following additional conditions: (A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the trade date specified in the Assignment and Assumption with respect to such assignment or, if no date is so specified, as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower and the Administrative Agent otherwise consent (such consent not to be unreasonably withheld or delayed), provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing; (B) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement; (C) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500, provided that assignments made pursuant to Section 2.18(b) or Section 9.02(c) shall not require the signature of the assigning Lender to become effective; and (D) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent any Tax forms required by Section 2.16(f) and an Administrative Questionnaire in which the assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Loan Parties and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the assignee’s compliance procedures and applicable laws, including Federal and state securities laws.

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          For purposes of paragraph (b) of this Section, the term “Approved Fund” and “CLO” have the following meanings:

          “Approved Fund” means (a) a CLO and (b) with respect to any Lender that is a fund that invests in bank loans and similar extensions of credit, any other fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

          “CLO” means an entity (whether a corporation, partnership, trust or otherwise) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by a Lender or an Affiliate of such Lender.

     (iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.14, 2.15, 2.16 and 9.03) and to any fees payable hereunder that have accrued for such Lender’s account but have not yet been paid Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.

     (iv) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent, the Issuing Bank and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower, the Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

     (v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire and any Tax forms required by Section 2.16(f) (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

     (vi) The words “execution”, “signed”, “signature” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system,

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as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act or any other similar state laws based on the Uniform Electronic Transactions Act.

          (c) (i) Any Lender may, without the consent of the Borrower, the Administrative Agent, the Issuing Bank or the Swingline Lender, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it), provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.

     (ii) Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce the Loan Documents and to approve any amendment, modification or waiver of any provision of the Loan Documents, provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant. Subject to paragraph (c)(iii) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 (subject to the requirements and limitations therein) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section, provided that such Participant shall be subject to Section 2.18 as though it were a Lender. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided that such Participant shall be subject to Section 2.17(d) as though it were a Lender.

     (iii) A Participant shall not be entitled to receive any greater payment under Section 2.14, 2.15 or 2.16 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.16 unless the Borrower is notified of the participation sold to such Participant and such Participant complies with Section 2.16(f) as though it were a Lender.

          (d) Any Lender may at any time, without the consent of the Borrower or the Administrative Agent, pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest, provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

          (e) Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle (an “SPV”), identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower, the option to provide to the Borrower all or any part of any Loan that such Granting Lender would otherwise be obligated to make to the Borrower pursuant to this Agreement, provided that (i) nothing herein shall constitute a commitment by any SPV to make any Loan and (ii) if an SPV elects not to exercise such option or otherwise fails to provide all or any part of such Loan, the Granting Lender shall be obligated to make

74

such Loan pursuant to the terms hereof. The making of a Loan by an SPV hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender. Each party hereto hereby agrees that no SPV shall be liable for any indemnity or similar payment obligation under this Agreement (all liability for which is hereby assumed by and shall remain with the Granting Lender). 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 indebtedness of any SPV, such party will not institute against, or join any other person in instituting against, such SPV any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the U.S. or any State thereof. In addition, notwithstanding anything to the contrary contained in this Section 9.04, any SPV may (i) with notice to, but without the prior written consent of, the Borrower and the Administrative Agent and without paying any processing fee therefor, assign all or a portion of its interests in any Loans to the Granting Lender or to any financial institutions (consented to by the Borrower and Administrative Agent) providing liquidity or credit support to or for the account of such SPV to support the funding or maintenance of Loans and (ii) disclose on a confidential basis any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancement to such SPV.

          SECTION 9.05. Survival. All covenants, agreements, representations and warranties made by the Borrower and the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and the issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other Obligation (as distinguished from the Secured Obligations) under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Revolving Commitments have not expired or terminated. The provisions of Sections 2.14, 2.15, 2.16 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.

          SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent or the syndication of the Loans and Commitments constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or by Adobe pdf file shall be effective as delivery of a manually executed counterpart of this Agreement.

          SECTION 9.07. Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the

75

remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

          SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender, the Issuing Bank 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 apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, the Issuing Bank or any such Affiliate to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement held by such Lender or the Issuing Bank, irrespective of whether or not such Lender or the Issuing Bank shall have made any demand under this Agreement and although such obligations may be unmatured or are owed to a branch or office of such Lender or the Issuing Bank different from the branch or office holding such deposit or obligated on such Indebtedness. The applicable Lender and the Issuing Bank shall notify the Borrower and the Administrative Agent of such setoff and application, provided that any failure to give or any delay in giving such notice shall not affect the validity of any such setoff and application under this Section. The rights of each Lender, the Issuing Bank and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the Issuing Bank and their respective Affiliates may have.

          SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process. (a) This Agreement shall be construed in accordance with and governed by the law of the State of New York.

          (b) Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the U.S. District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to any Loan Document, 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 such New York State or, to the 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.

          (c) Each party hereto hereby 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 any Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

          (d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in any Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

          SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,

76

THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

          SECTION 9.11. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

          SECTION 9.12. Confidentiality. Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to any Loan Document or the enforcement of rights thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any Swap Agreement relating to the Loan Parties and their obligations under the Loan Documents, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis from a source other than a Loan Party. For the purposes of this Section, “Information” means all information received from a Loan Party and/or its Related Parties or representatives relating to any Loan Party, its Subsidiaries or their respective businesses, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by any Loan Party and/or its Related Parties or representatives, provided that, in the case of information received from the Borrower and/or its Related Parties or any Subsidiary after the Effective Date, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

          (b) Each Lender acknowledges that information as defined in Section 9.12(a) furnished to it pursuant to this Agreement may include material non-public Information concerning the Loan Parties and their Related Parties or their respective securities, and confirms that it has developed compliance procedures regarding the use of material non-public Information and that it will handle such material non-public Information in accordance with those procedures, applicable law, including Federal and state securities laws, and the terms hereof.

          (c) All information, including waivers and amendments, furnished by the Loan Parties, their Related Parties or representatives or the Administrative Agent pursuant to, or in the course of administering, this Agreement will be syndicate-level information, which may contain material non-public Information about the Loan Parties and their Related Parties or their respective securities and its securities. Accordingly, each Lender represents to the Borrower (on behalf of the Loan Parties) and the Administrative Agent that it has identified in its Administrative Questionnaire a credit contact who may receive Information that may contain material non-public Information in accordance with its compliance procedures, applicable law and the terms hereof.

77

          SECTION 9.13. USA PATRIOT Act. Each Lender that is subject to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) hereby notifies the Borrower that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies the Loan Parties, which information includes the names and addresses of the Loan Parties and other information that will allow such Lender to identify the Borrower in accordance with the Act.

          SECTION 9.14. Disclosure. The Borrower and each Lender hereby acknowledges and agrees that the Administrative Agent and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with any of the Loan Parties and their respective Affiliates.

          SECTION 9.15. Appointment for Perfection. Each Lender hereby appoints each other Lender as its agent for the purpose of perfecting Liens, for the benefit of the Administrative Agent and the Lenders, in assets which, in accordance with Article 9 of the UCC or any other applicable law, can be perfected only by possession. Should any Lender (other than the Lender serving hereunder as the Administrative Agent) obtain possession of any such Collateral, such Lender shall notify the Administrative Agent thereof, and, promptly upon the Administrative Agent’s request therefor shall deliver such Collateral to the Administrative Agent or otherwise deal with such Collateral in accordance with the Administrative Agent’s instructions.

          SECTION 9.16. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan or participation in any LC Disbursement, together with all fees, charges and other amounts that are treated as interest on such Loan or LC Disbursement or participation therein under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) that may be contracted for, charged, taken, received or reserved by the Lender holding such Loan or LC Disbursement or participation therein in accordance with applicable law, the rate of interest payable in respect of such Loan or LC Disbursement or participation therein hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan or LC Disbursement or participation therein but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or LC Disbursements or participation therein or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

          SECTION 9.17. Existing Credit Agreement; Effectiveness of Amendment and Restatement. Until this Agreement becomes effective in accordance with the terms of the Amendment and Restatement Agreement, the Existing Credit Agreement shall remain in full force and effect and shall not be affected hereby. After the Restatement Effective Date, all obligations of the Borrower under the Existing Credit Agreement shall become obligations of the Borrower hereunder and the provisions of the Existing Credit Agreement shall be superseded by the provisions hereof.

78

SCHEDULE 1.01(a)

Existing Letters of Credit

ID NUMBER	BENEFICIARY	PURPOSE	AMOUNT
***
***	***	***	***
***	***	***	***
***	***	***	***
***	***	***	***
***	***	***	***
***	***	***	***
***	***	***	***
***	***	***	***
***	***	***	***
***	***	***	***
***	***	***	***
***	***	***	***
***	***	***	***
***	***	***	***
***	***	***	***

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

ID NUMBER	BENEFICIARY	PURPOSE	AMOUNT
***	***	***	***
***	***	***	***
***	***	***	***
***	***	***	***
***	***	***	***
***			***
***
***	***	***	***
***	***	***	***
***	***	***	***
***	***	***	***
***			***
TOTAL LCS			***

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

SCHEDULE 1.01(b)

USG CORPORATION
STATEMENT OF INVESTMENT OBJECTIVE AND GUIDELINES

INVESTMENT OBJECTIVE:

The investment objective of the Portfolio is to seek to maximize total return (or after-tax total return adjusted for Federal taxes) to the extent consistent with the preservation of capital, maintenance of liquidity and the investment guidelines set forth below:

INVESTMENT GUIDELINES:

1. Eligible Investments:

a. Obligations issued or guaranteed by the U.S. Government, its agencies and custodial receipts with respect thereto for collateral purposes.

b. Obligations of domestic or foreign commercial banks (or branches thereof where deposits with branches are general obligations of the parent bank) and bank holding companies, including, but not limited to, commercial paper, bankers’ acceptances, certificates of deposit, time deposits, notes and bonds.

c. Obligations of domestic or foreign corporations, including, but not limited to, commercial paper, notes, bonds and debentures.

d. Obligations issued by any state or political subdivision of the U.S. (including the District of Columbia and any possession of the United States).

e. Mortgage and other asset backed securities.

f. U.S. dollar denominated money market funds.

g. Overnight sweep accounts.

h. Repurchase agreements with counterparties listed in (1) or (2) below collateralized fully by investments described in paragraph a. above which have a market value, including accrued interest, of at least 102% of the amount invested in the repurchase agreement.

1) Banks in the credit facility which are approved for investment at the time of purchase; and

2) Broker-dealers which are approved as repurchase agreement counterparties by the Treasurer and CFO of USG.

i. In the case of any investment under a. through h. above:

1) All investments shall be denominated in U.S. dollars; and

2) Investments may include fixed and floating rate instruments.

2. Credit Quality:

a. With respect to commercial paper and other short-term obligations, money market funds, investments and reinvestments shall be limited to obligations rated (or issued by an issuer that has been rated) at the time of purchase in one of the two highest rating categories (within which there may be sub-categories or gradations indicating relative standing) by one or more nationally recognized statistical rating organizations (“NRSRSOs”).

b. With respect to bonds and other long-term obligations, investment and reinvestment shall be limited to obligations rated at the time of purchase in one of the two highest rating categories (within which there

may be subcategories or gradations indicating relative standing) by the NRSROs.

3. Diversification:

a. Except for obligations issued or guaranteed by the U.S. government, its agencies or instrumentalities, money market funds, and repurchase agreements collateralized fully by such obligations, a maximum of 10% of the value of the total assets of the Portfolio may be invested in securities of any one issuer.

b. A maximum of 20% of the value of the total assets of the Portfolio may be invested in repurchase agreements with one counterparty.

c. A maximum of 30% may be invested in any single money market fund, except when:

• USG’s investable cash is below $50,000,000, or

• USG has 3 or fewer approved money market funds

d. Compliance with the diversification requirements of these guidelines shall be determined on the basis of values immediately after the acquisition of any security.

4. Maturity/Liquidity:

All securities held in the Portfolio must have a duration of less than two years. At no time will the portfolio weighted average duration exceed 180 days.

5. Review and Performance:

For purposes of evaluating performance, the relevant standards will be the iMoneyNet taxable money market fund average.

Schedule 1.01 ( c )
to Credit Agreement

USG Corporation
Schedule of Borrowing Base Supplemtal Documents
Documents to be Submitted to the Administrative Agent

The following information is to be submitted, pursuant to Section 5.01 of the Credit Agreement, for USG Corporation as noted below:

			Semi-Annually
		Monthly Reporting: Due	(per the terms of	Weekly Reporting:
		within Fifteen (15)	the Credit	Due within Three (3)
	Reporting Frequency	Business Days	Agreement)	Business Days
	Borrowing Base Certificate in the form of Exhibit .	X		X
	Accounts Receivable Supporting Documents:
1.	Accounts receivable summary aging aged by invoice date or due date, as applicable, by operating division in an electronic format suitable to the Administrative Agent	X		X
2.	Accounts receivable rollforward by operating division in a format suitable to the Administrative Agent	X
3.	Top 10 accounts receivable balances aged per the most recent summary aging by operating division	X
4.	Reconciliation of A/R aging report to the general ledger and financial statements by operating division	X
5.	Top 10 Sales Concentration for Prior Twelve months by operating division	X
6.	Supporting documentation (system generated extract report where applicable) for the A/R ineligibles/ reserves reported on the Borrowing Base Certificate by operating division	X		X
7.	U.S. updated customer list by operating division		X
	Inventory Supporting Documents:
1.	An inventory perpetual report and schedules detailing each operating division’s inventory, in a form satisfactory to the Administrative Agent, (i) by summarized locations, (ii) by department, (iii) by volume on hand and (iv) other schedules as reasonably requested	X
2	Gross margin and turnover by product segment by operating division	X
3	Reconciliation of perpetual inventory reports to the general ledger and financial statements by operating division	X
4	Schedule of monthly rent or unpaid fees related to leased or unowned locations (eg: outside processors, third party warehouses or other locations for which landlord waivers or bailee letters have not been received)	X
5	Inventory value stated at cost by location for each operating division	X
6	Supporting documentation (system generated extract report where applicable) for the inventory ineligibles/ reserves reported on the Borrowing Base Certificate by operating division	X		X
	Other Supporting Documents:
1.	Accounts payable summary aging by vendor and by operating division in a format suitable to the Administrative Agent	X
2.	Top 10 accounts payable vendor balances by aging category and operating division	X
3.	Year-to-date top 10 purchases concentration by vendor and operating division	X
4.	Reconciliation of A/P aging to general ledger and financial statements per operating division	X
5.	Cash and Cash Equivalents Balance			X

Submit to:

JPMorgan Chase Bank, N.A.
CBC Structuring & Portfolio Group
Attn: Asita H. Mamlatdarna
270 Park Avenue, 44th Floor
New York, NY 10017
Phone: (212) 270 — 0287
Fax: (646) 534 — 2288
E-Mail: asita.h.mamlatdarna@jpmchase.com

Schedule 2.01

Institution	Commitment
Bank of America, N.A.	$	97,826,086.95
JPMorgan Chase Bank, N.A.		55,217,391.29
Citigroup USA, Inc.		48,913,043.48
Goldman Sachs Credit Partners, L.P.		35,117,056.85
The Royal Bank of Scotland PLC		32,608,695.65
Bank of Montreal, Chicago Branch		21,739,130.44
Calyon		21,739,130.44
Fifth Third Bank		21,739,130.44
The Northern Trust Company		21,739,130.44
Sumitomo Mitsui Banking Corporation		21,739,130.44
Wells Fargo Bank, N.A.		21,739,130.44
Mizuho Corporate Bank, Ltd.		19,230,769.23
Bank of Tokyo — Mitsubishi UFJ, Ltd.		10,869,565.22
Morgan Stanley Bank, N.A.		10,869,565.22
PNC Bank, National Association		10,869,565.22
Union Bank of California		10,869,565.22
U.S. Bank National Association		10,869,565.22
Natexis Banques Populaires		8,913,043.47
The Bank of Nova Scotia		8,695,652.17
Commerzbank AG		8,695,652.17
Total	$	500,000,000.00

Schedule 3.06
Disclosed Matters

The inclusion of the following information in this Schedule 3.06 shall not constitute an admission of liability with respect to any such matter or that any such matter will have, or could reasonably be expected to have, a Material Adverse Effect.

We are named as defendants in litigation arising from our operations, including claims and lawsuits arising from the operation of our vehicles, product warranties, personal injury and commercial disputes. We have also been notified by state and federal environmental protection agencies of possible involvement as one of numerous “potentially responsible parties” in a number of so-called “Superfund” sites in the United States. As a potentially responsible party, we may be responsible to pay for some part of the cleanup of hazardous waste at these sites. In most of these sites, our involvement is expected to be minimal. In addition, we are involved in environmental cleanups of other property that we own or owned. We believe that appropriate reserves have been established for our potential liability in connection with these matters, taking into account the probability of liability, whether our exposure can be reasonably estimated and, if so, our estimate of our liability on the range of our liability. However, we continue to review our accruals as additional information becomes available.

We do not expect the environmental or any other litigation matters involving USG to have a material adverse effect upon our results of operations, financial position or cash flows.

Schedule 3.12
Insurance

Expiration							Annual
Date*	Insured	Coverage	Company	Broker	Limit	Deductible/SIR	Premium (US)	Policy Number
***	USG & All Subsidiaries	***	***	***	***	***	***	***
***	USG & US Subsidiaries	***	***	***	***	***	***	***
***	USG & Foreign Subsidiaries except Canada	***	***	***	***	***	***	***
***	US Gypsum	***	***	***	***	***	***
***	USG & US Gypsum	***	***	***	***	***	***	***
***	USG & GTL	***	***	***	***	***	***	***
***	USG & CGC	***	***	***	***	***	***	***
***	USG & GTL	***	***	***	***	***	***	***
***	USG (Including Domestic and Canadian Subsidiaries)	***	***	***	***	***	***	***
***	C&G RR (Interiors)	***	***	***	***	***	***	***
***	Chicago, Central and Pacific RR	***	***	***	***	***	***	***
***	USG & All US Subsidiaries	***	***	***	***	***	***	***
***	All Foreign Subsidiaries except Canada & South America	***	***	***	***	***	***	***
***	USG & All Domestic and Canadian Subsidiaries	***	***	***	***	***	***	***

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

Expiration							Annual
Date*	Insured	Coverage	Company	Broker	Limit	Deductible/SIR	Premium (US)	Policy Number
***	USG & US Subsidiaries	***	***	***	***	***	***	***
***	USG & All Subsidiaries	***	***	***	***	***	***	***
***	USG & All Subsidiaries	***	***	***	***	***	***	***
***	USG & All Subsidiaries	***	***	***	***	***	***	***
***	USG & All Subsidiaries	***	***	***	***	***	***	***
***	USG & All Subsidiaries	***	***	***	***	***	***	***
***	USG & All Subsidiaries	***	***	***	***	***	***	***
***	USG, GTL & CGC	***	***	***	***	***	***	***
***	USG, GTL and USG	***	***	***	***	***	***	***
***	USG & CGC	***	***	***		***	***	***
***	USG & All Subsidiaries	***	***	***	***	***	***	***
***	USG & All Subsidiaries	***	***	***	***	***	***	***
***	USG & All Subsidiaries	***	***	***	***	***	***	***
***	Interiors	***	***	***	***	***	***	***
***	USG & All Subsidiaries	***	***	***	***	***	***	***
***	USG & All Subsidiaries	***	***	***	***	***	***	***
***	USG & All Subsidiaries (Master Policy)	***	***	***	***	***	***	***
***	USG — Europe	***	***	***	***	***	***	***
***	USG — Malaysia	***	***	***	***	***	***	***
***	USG — Australia/NZ	***	***	***	***	***	***	***
***	USG — Mexico	***	***	***	***	***	***	***

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

Expiration							Annual
Date*	Insured	Coverage	Company	Broker	Limit	Deductible/SIR	Premium (US)	Policy Number
***	USG — U.S. Only	***	***	***	***	***	***	***
***	USG — Russia	***	***	***	***	***	***	***
***	USG & All Subsidiaries	***	***	***	***	***	***	***
***	USG & All Subsidiaries	***	***	***	***	***	***	***
***	USG & All Subsidiaries	***	***	***	***	***	***	***
***	USG & All Subsidiaries	***	***	***	***		***	***
***	USG & All Subsidiaries	***	***	***	***	***	***	***
***	USG & All Subsidiaries	***	***	***	***		***	***
***	USG & All Subsidiaries	***	***	***	***		***	***
***	USG & All Subsidiaries	***	***	***	***		***	***
***	USG & All Subsidiaries	***	***	***	***		***	***
***	USG & All Subsidiaries	***	***	***	***		***	***
***	L & W	***	***	***	***	***	***	***
***	USG & All Subsidiaries	***	***	***	***	***	***	***
***	USG & All Subsidiaries	***	***	***	***	***	***	***
***	USG & All Subsidiaries	***	***	***	***	***	***	***
***	USG & All Subsidiaries	***	***	***	***	***	***	***
***	USG & All Subsidiaries	***	***	***	***	***	***	***
***	US Gypsum	***	***	***	***	***	***	***
***	US Gypsum	***	***	***	***	***	***	***
***	Interiors	***	***	***	***	***	***	***

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

Expiration							Annual
Date*	Insured	Coverage	Company	Broker	Limit	Deductible/SIR	Premium (US)	Policy Number
***	USG & All Subsidiaries	***	***	***	***	***	***	***
***	Beadex	***	***	***	***	***	***
***	CGC	***	***	***	***	***	***	***

• All Policies are 1 year term with the exception of *** and ***. Premiums shown for the *** policies noted are full term premiums.

• All Policies include Brokerage Fee and or Commission

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

Schedule 6.01

Existing Indebtedness

Obligor(s)	Description of Indebtedness		Amount
USG Corporation	Industrial Revenue Bonds
	Ohio Air Quality Development Authority		$	45,000,000
	Ohio Air Quality Development Authority		$	44,400,000
	Ohio Air Quality Development Authority		$	9,000,000
	City of East Chicago, Indiana		$	10,000,000
	City of East Chicago, Indiana		$	10,000,000
	Pennsylvania Economic Development Financing Authority		$	110,000,000
	Oregon Economic & Community Development Commission		$	11,000,000
CGC, Inc.	Windsor & Hantsport Railroad Guaranty	CAN	$	7,000,000
USG Deutschland GmbH	Secured Credit Line Agreement with Commerzbank		€	8,600,000
	Indebtedness of the following Joint Venture entities has been guaranteed by indirect subsidiaries of USG Corporation
USG Middle East Ltd. (Saudi Arabia)	Loans of Saudi-French Bank and Saudi Industrial Development Fund, guaranteed in proportion to equity ownership (i.e. 45%) but limited to value of investment in USG Manufacturing Worldwide Ltd.		$	8,900,000
MRC Duracrete Ltd. (Japan)	Loans of related party (MRC Finance Co., Ltd.) limited to total investment	<	$	100,000

Schedule 6.02

Existing Liens

1. Mortgage on the land and buildings comprising the Viersen, Germany plant owned by USG Deutschland GmbH securing obligation

Schedule 6.04

Existing Investments

1.	Beltship Management Ltd., a joint venture — 50% owned by Gypsum Transportation, Limited
2.	USG Middle East, Ltd., a joint venture — 45% owned by USG Manufacturing Worldwide, Ltd.
3.	Donn South Africa (PTY) Ltd., a joint venture — 33% owned by USG Interiors International, Inc.
4.	Knauf/USG Systems GmbH & Co. KG, a joint venture — 50% owned by USG Ventures-Europe GmbH.
5.	Knauf-USG Verwaltungs GmbH, a joint venture — 50% owned by USG Ventures-Europe GmbH.
6.	Knauf USG Building Systems ABEE, LLC — 99% owned by Knauf/USG Systems GmbH & Co. KG.
7.	MRC Duracrete Co., Ltd. — 10% owned by Gypsum Engineering Company.
8.	STAR-USG Building Materials Co., Ltd. — 50% owned by USG China Lux S.ar.l.

Schedule 6.09

Existing Restrictions

The equity ownership of the Borrower or a Subsidiary in the following joint venture entities is subject to provisions which either (1) provide the other parties to the joint ventures with rights of first refusal or buy/sell rights with respect to such equity ownership, or (2) prohibit using such equity ownership as security for indebtedness:

1.	Knauf/USG Systems GmbH & Co. KG and Knauf-USG Verwaltungs GmbH, its general partner
2.	USG Middle East, Ltd. (Saudi Arabia)
3.	Donn South Africa (PTY) Ltd. (South Africa)
4.	MRC Duracrete Co., Ltd. (Japan)
5.	Beltship Management Limited (Bermuda)

EXHIBIT A

[FORM OF]

ASSIGNMENT AND ASSUMPTION

          This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

          For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including guarantees and swingline loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

1.	Assignor:
2.	Assignee:
		[and is an Affiliate/Approved Fund of [identify Lender]1]
3.	Borrower:	USG Corporation, a Delaware corporation
4.	Administrative Agent: JPMorgan Chase Bank, N.A.

¹ Select as applicable.

Exhibit A

5.	Credit Agreement:	The $500,000,000 Second Amended and Restated Credit Agreement dated as of January [ ], 2009, among USG Corporation, a Delaware corporation, the Lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and [ ], as Syndication Agent
6.		Assigned Interest:

Aggregate Amount of	Amount of
Commitment/Loans for all	Commitment/Loans	Percentage Assigned of
Lenders	Assigned	Commitment/Loans2
$	$		%

Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The Assignee agrees to deliver to the Administrative Agent a completed Administrative Questionnaire in which the Assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Parent Borrower, the Loan Parties and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the Assignee’s compliance procedures and applicable laws, including U.S. Federal and State securities laws.

The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR [NAME OF ASSIGNOR]
By:
	Title:
ASSIGNEE [NAME OF ASSIGNEE]
By:
	Title:

² Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

Exhibit A

2

Consented to and Accepted: JPMORGAN CHASE BANK, N.A., as Administrative Agent
By
	Title:
[Consented to: USG CORPORATION
By
	Title:]3

³ To the extent required pursuant to Section 9.04(b)(i) of the Credit Agreement.

Exhibit A

3

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

     1. Representations and Warranties.

          1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of their Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

          1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached to this Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, 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 the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

Exhibit A

          2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.

          3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

Exhibit A

3

EXHIBIT B

FORM OF
BORROWING BASE CERTIFICATE

Exhibit B

Exhibit B
Page 1 of 3

USG Corporation
Borrowing Base Certificate
For the period ended ______________ (in $000’s)

A.	Available Accounts Receivable (page 2 of 3 )	$	—
B.	Available Raw Materials (page 3 of 3 )	$	—
C.	Available Work-In-Process (page 3 of 3)	$	—
D.	Available Finished Goods (page 3 of 3 )	$	—
E.	Less Reserves:
	Rent Reserve and Reserves for Bailee’s Charges		—
	Other Reserves (per terms of Credit Agreement)		—
F.	Borrowing Base (lines A+B+C+D-E)			$	—
G.	Lower of:
	(i) Borrowing Base	$	—
	(ii) Revolving Commitment	$	—	$	—
H.	Revolving Exposure:
	Aggregate principal amount of Loans outstanding:
	LC Exposure Outstanding
	Swingline Exposure Outstanding
	Total Revolving Exposure			$	—
I.	Excess Availability (lines G-H)			$	—

Officer’s Certification:

Pursuant to the Second Amended and Restated Credit Agreement dated as of January 7, 2009, the undersigned Financial Officer of USG Corporation certifies that the information provided in this certificate to JPMorgan Chase Bank, N.A. as Collateral Agent, is true and correct based on the accounting records of USG Corporation.

USG Corporation

Name	Date
Title

Exhibit B
Page 2 of 3

USG Corporation
Borrowing Base Certificate
For the period ended ______________ (in $000’s)

	Gypsum		Interiors		L&W		Consolidated
Net Aging Balance	$	—	$	—	$	—	$	—
Addback: General Accrual Reserves included in Aging		—		—		—		—
Total Aging Balance (including Accrual Reserves)	$	—	$	—	$	—	$	—
Less ineligibles:
Affiliate Receivables		—		—		—		—
Concentration Limit 15% (20% if investment rated)		—		—		—		—
Defaulted Receivables		—		—		—		—
Deductions		—		—		—		—
Foreign Obligors		—		—		—		—
Payment Terms Greater than 60 Days		—		—		—		—
Rebate Accrual Amount		—		—		—		—
Credits Greater than 30 days past due, 90 days past invoice		—		—		—		—
Cross-Aged Receivables (50%)		—		—		—		—
Obligors with Cash in Advance terms		—		—		—		—
Accrued Sales & Use Taxes		—		—		—		—
Unbilled receivables		—		—		—		—
A/R Reconciliation Items		—		—		—		—
Notes Receivable		—		—		—		—
Receivables Subject to Offset or Claim		—		—		—		—
A/R not Denominated / Payable in USD		—		—		—		—
Government Receivables		—		—		—		—
Bankrupt Obligors		—		—		—		—
Bill and hold receivables		—		—		—		—
Progress billing receivables		—		—		—		—
Other (per terms of Credit Agreement)		—		—		—		—
Total ineligibles:	$	—	$	—	$	—	$	—
Eligible Accounts Receivable before dilution reserve	$	—	$	—	$	—	$	—
Dilution Percentage (>5%)
Dilution Reserve $	$	—	$	—	$	—	$	—
Adjusted Eligible Accounts Receivable:							$	—
Advance rate								85.0	%
Available Accounts Receivable							$	—

Exhibit B
Page 3 of 3

USG Corporation
Borrowing Base Certificate
For the period ended ______________ (in $000’s)

	Gypsum			Interiors			L&W			Consolidated
Raw Materials Inventory
Raw Materials Per Perpetual	$	—		$	—		$	—		$	—
Less Ineligibles and Inventory Reserves:
Spare parts, packaging, supplies		—			—			—			—
Damaged, defective, return to vendor, discontinued, nonsalable		—			—			—			—
Inventory locations <$100,000 (b)		—			—			—			—
Subject to consignment		—			—			—			—
Detonators & Explosives		—			—			—			—
Items without assigned product class		—			—			—			—
Intercompany profits included in inventory		—			—			—			—
Re-stocking and delivery fees included in inventory		—			—			—			—
Testing prototypes display items		—			—			—			—
Shrink reserve (a)		—			—			—			—
Slow moving and obsolete reserve		—			—			—			—
Lower of cost or market reserve		—			—			—			—
Capitalized favorable variances		—			—			—			—
Vendor rebate reserve		—			—			—			—
Other (per terms of the Credit Agreement)		—			—			—			—
Total Ineligible		—			—			—			—
Eligible Raw Materials		—			—			—			—
Lesser of:
(i) Advance Rate		60.0	%		60.0	%		60.0	%
NOLV %
(ii) 85% of Net Orderly Liquidation Rate		0.0	%		0.0	%		0.0	%
Available Raw Materials	$	—		$	—		$	—		$	—
Work In Process Inventory
Work In Process Per Perpetual	$	—		$	—		$	—		$	—
Less Ineligibles and Inventory Reserves:
Spare parts, packaging, supplies		—			—			—			—
Damaged, defective, return to vendor, discontinued, nonsalable		—			—			—			—
Inventory locations <$100,000 (b)		—			—			—			—
Detonators & Explosives		—			—			—			—
Items without assigned product class		—			—			—			—
Intercompany profits included in inventory		—			—			—			—
Re-stocking and delivery fees included in inventory		—			—			—			—
Testing prototypes display items		—			—			—			—
Shrink reserve (a)		—			—			—			—
Slow moving and obsolete reserve		—			—			—			—
Lower of cost or market reserve		—			—			—			—
Capitalized favorable variances		—			—			—			—
Vendor rebate reserve		—			—			—			—
Other (per terms of the Credit Agreement)		—			—			—			—
Total Ineligibles		—			—			—			—
Eligible Work In Process Inventory		—			—			—			—
Lesser of:
(i) Advance Rate		60.0	%		60.0	%		60.0	%
NOLV %
(ii) 85% of Net Orderly Liquidation Rate		0.0	%		0.0	%		0.0	%
Available Work In Process Inventory	$	—		$	—		$	—		$	—
Finished Goods Inventory
Finished Goods Per Perpetual	$	—		$	—		$	—		$	—
Less Ineligibles and Inventory Reserves:
Spare parts, packaging, supplies		—			—			—			—
Damaged, defective, return to vendor, discontinued, nonsalable		—			—			—			—
Inventory locations <$100,000 (b)		—			—			—			—
Subject to consignment		—			—			—			—
Detonators & Explosives		—			—			—			—
Items without assigned product class		—			—			—			—
Intercompany profits included in inventory		—			—			—			—
Re-stocking and delivery fees included in inventory		—			—			—			—
Testing prototypes display items		—			—			—			—
Shrink reserve (a)		—			—			—			—
Slow moving and obsolete reserve		—			—			—			—
Lower of cost or market reserve		—			—			—			—
Capitalized favorable variances		—			—			—			—
Vendor rebate reserve		—			—			—			—
Other (per terms of the Credit Agreement)		—			—			—			—
Total Ineligibles		—			—			—			—
Eligible Finished Goods		—			—			—			—
Lesser of:
Advance Rate		60.0	%		60.0	%		60.0	%
NOLV %
85% of Net Orderly Liquidation Rate		0.0	%		0.0	%		0.0	%
Available Finished Goods Inventory	$	—		$	—		$	—		$	—

(a)	Shrink reserve will represent % of physical inventory discrepancy observed from most recent field exam.
(b)	Provided that the aggregate value of RM, WIP, and FG stated at cost is less than $100,000 at a location.

EXHIBIT C

[FORM OF]

BORROWING REQUEST

[Date]          

JPMorgan Chase Bank, N.A.,
    as Administrative Agent
     for the Lenders referred to below
Loan and Agency Services Group
1111 Fannin, 10th Floor
Houston, Texas 77002

Attention: Marshella B. Williams
Telecopy No.: (713) 427-6307

Ladies and Gentlemen:

          The undersigned Borrower refers to the Second Amended and Restated Credit Agreement dated as of January [    ], 2009, as amended, supplemented or otherwise modified from time to time, (the “Credit Agreement”), among USG Corporation, a Delaware corporation, the Lenders from time to time party thereto (the “Lenders”), JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”), and [     ], as syndication agent. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement. The undersigned Borrower hereby gives you notice pursuant to Section 2.03 of the Credit Agreement that it requests a Borrowing under the Credit Agreement and in that connection sets forth below the terms on which such Borrowing is requested to be made:

1.	Aggregate Amount of Borrowing4:
2.	Date of Borrowing5:

4	In the case of a Eurodollar Borrowing, not less than $5,000,000 and in an integral multiple of $1,000,000. In the case of an ABR Borrowing, not less than $1,000,000 and in an integral multiple of $1,000,000.
5	This date must be (a) a Business Day and (b)(i) in the case of a Eurodollar Borrowing, a date not earlier than three Business Days after telephonic notice of the related Borrowing Request or (ii) in the case of an ABR Borrowing, a date not earlier than one Business Day after telephonic notice of the related Borrowing Request, in each case delivered before 11:00 a.m., New York City time.

Exhibit C

EXHIBIT C

[FORM OF]

BORROWING REQUEST

[Date]          

JPMorgan Chase Bank, N.A.,
    as Administrative Agent
     for the Lenders referred to below
Loan and Agency Services Group
1111 Fannin, 10th Floor
Houston, Texas 77002

Attention: Marshella B. Williams
Telecopy No.: (713) 427-6307

Ladies and Gentlemen:

          The undersigned Borrower refers to the Second Amended and Restated Credit Agreement dated as of January [    ], 2009, as amended, supplemented or otherwise modified from time to time, (the “Credit Agreement”), among USG Corporation, a Delaware corporation, the Lenders from time to time party thereto (the “Lenders”), JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”), and [     ], as syndication agent. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement. The undersigned Borrower hereby gives you notice pursuant to Section 2.03 of the Credit Agreement that it requests a Borrowing under the Credit Agreement and in that connection sets forth below the terms on which such Borrowing is requested to be made:

1.	Aggregate Amount of Borrowing4:
2.	Date of Borrowing5:

4	In the case of a Eurodollar Borrowing, not less than $5,000,000 and in an integral multiple of $1,000,000. In the case of an ABR Borrowing, not less than $1,000,000 and in an integral multiple of $1,000,000.
5	This date must be (a) a Business Day and (b)(i) in the case of a Eurodollar Borrowing, a date not earlier than three Business Days after telephonic notice of the related Borrowing Request or (ii) in the case of an ABR Borrowing, a date not earlier than one Business Day after telephonic notice of the related Borrowing Request, in each case delivered before 11:00 a.m., New York City time.

Exhibit C

EXHIBIT C

[FORM OF]

BORROWING REQUEST

[Date]          

JPMorgan Chase Bank, N.A.,
    as Administrative Agent
     for the Lenders referred to below
Loan and Agency Services Group
1111 Fannin, 10th Floor
Houston, Texas 77002

Attention: Marshella B. Williams
Telecopy No.: (713) 427-6307

Ladies and Gentlemen:

          The undersigned Borrower refers to the Second Amended and Restated Credit Agreement dated as of January [    ], 2009, as amended, supplemented or otherwise modified from time to time, (the “Credit Agreement”), among USG Corporation, a Delaware corporation, the Lenders from time to time party thereto (the “Lenders”), JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”), and [     ], as syndication agent. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement. The undersigned Borrower hereby gives you notice pursuant to Section 2.03 of the Credit Agreement that it requests a Borrowing under the Credit Agreement and in that connection sets forth below the terms on which such Borrowing is requested to be made:

1.	Aggregate Amount of Borrowing4:
2.	Date of Borrowing5:

4	In the case of a Eurodollar Borrowing, not less than $5,000,000 and in an integral multiple of $1,000,000. In the case of an ABR Borrowing, not less than $1,000,000 and in an integral multiple of $1,000,000.
5	This date must be (a) a Business Day and (b)(i) in the case of a Eurodollar Borrowing, a date not earlier than three Business Days after telephonic notice of the related Borrowing Request or (ii) in the case of an ABR Borrowing, a date not earlier than one Business Day after telephonic notice of the related Borrowing Request, in each case delivered before 11:00 a.m., New York City time.

Exhibit C

3.	Type of Borrowing6:
4.	Interest Period7:
5.	Location and number of the undersigned Borrower’s account to which funds
	are to be disbursed:

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

6	Eurodollar Borrowing or ABR Borrowing.
7	Applicable only to a Eurodollar Borrowing, and subject to the definition of “Interest Period”.

Exhibit C

2

          The undersigned Borrower hereby represents and warrants to the Administrative Agent and the Lenders that, on the date of this Borrowing Request and on the date of the related Borrowing, the conditions to lending specified in Section 4.02 of the Credit Agreement are and shall be satisfied.

Very truly yours, USG CORPORATION,
By:
	Name:
	Title:

Exhibit C

3

EXHIBIT D

[FORM OF]

INTEREST ELECTION REQUEST

[Date]          

JPMorgan Chase Bank, N.A.,
    as Administrative Agent
    for the Lenders referred to below
Loan and Agency Services Group
1111 Fannin, 10th Floor
Houston, Texas 77002

Attention: Marshella B. Williams
Telecopy No.: (713) 427-6307

Ladies and Gentlemen:

          The undersigned Borrower refers to the Second Amended and Restated Credit Agreement dated as of January [     ], 2009, as amended, supplemented or otherwise modified from time to time, (the “Credit Agreement”), among USG Corporation, a Delaware corporation, the Lenders from time to time party thereto (the “Lenders”), JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”), and [     ], as syndication agent. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement. This notice constitutes a notice of conversion or notice of continuation, as applicable, under Section 2.07 of the Credit Agreement, and the undersigned Borrower hereby irrevocably notifies the Administrative Agent of the following information with respect to the conversion or continuation requested hereby:

1.	Borrowing to which this request applies8:
2.	Principal amount of Borrowing to be converted/continued9:
3.	Effective date of election10:

8	Specify last day of current Interest Period.
9	If different options are being elected with respect to different portions of the Borrowing, indicate the portions thereof to be allocated to each resulting Borrowing.
10	This date must be (a) a Business Day and (b)(i) in the case of a resulting Eurodollar Borrowing, a date not earlier than three Business Days after telephonic notice of the related Interest Election Request or (ii) in the case of a resulting ABR Borrowing, a date not earlier than one Business Day after telephonic notice of the related Interest Election Request, in each case delivered before 11:00 a.m., New York City time.

Exhibit D

4.	Type of resulting Borrowing(s)11:
5.	Interest Period of resulting Borrowing(s)12:

Very truly yours, USG CORPORATION,
By:
	Name:
	Title:

11	Eurodollar Borrowing or ABR Borrowing. If different options are being elected with respect to different portions of the Borrowing, specify type for each resulting Borrowing.
12	Applicable only if the resulting Borrowing is to be a Eurodollar Borrowing, and subject to the definition of “Interest Period”. Must comply with the definition of “Interest Period” and end not later than the Maturity Date. If different options are being elected with respect to different portions of the Borrowing, specify for each resulting Borrowing.

Exhibit D

2

EXHIBIT E

[FORM OF]

COMPLIANCE CERTIFICATE

[For the fiscal Quarter ending]
[For the fiscal Year ending]

          The undersigned, duly authorized, qualified and acting Financial Officer of USG Corporation, a corporation organized under the laws of Delaware (“USG”), hereby certifies that:

          (a) This certificate (“Certificate”) is furnished pursuant to Section 5.01(c) of the Second Amended and Restated Credit Agreement dated as of January [     ], 2009 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among USG, a Delaware corporation, the Lenders from time to time party thereto (the “Lenders”), JPMorgan Chase Bank, N.A., as administrative agent, and [     ], as syndication agent. Capitalized terms used herein have the meanings attributed thereto in the Credit Agreement unless otherwise defined herein.

          (b) As of the date hereof, no Default has occurred [except as follows:].

          (c) No change in GAAP or in the application of GAAP, in either case, that would be required to be disclosed to the Securities and Exchange Commission, has occurred that has affected the financial statements accompanying this Certificate since the later of December 31, 2007, and the date of the prior certificate delivered under Section 5.01(c) of the Credit Agreement, except for those changes disclosed in the report of USG on Form 10-Q or 10-K, as applicable, for the period ending ___________, attached hereto as Exhibit A (the “Current Report”)[.] [except as follows:]

          (d) The financial statements referred to in Section 5.01[(a)][(b)] of the Credit Agreement which are delivered concurrently with the delivery of this Compliance Certificate, together with the footnotes and supplemental information related thereto disclosed in the Current Report, fairly present in all material respects the financial condition and results of operations of USG and its Subsidiaries on a consolidated basis for the fiscal [year][quarter] then ended [(subject to normal year-end audit adjustments and the absence of footnote disclosure)]. Such financial statements have been prepared in accordance with GAAP applied consistently throughout the period involved.

          (e) The covenant listed and calculated below is based on the financial statements referred to in Section 5.01[(a)][(b)] of the Credit Agreement which are delivered concurrently with the delivery of this Certificate, together with the financial statements previously delivered pursuant to Section 5.01(a) or (b) that are necessary to determine compliance with such covenant under the Credit Agreement.

Exhibit E

          Fixed Charge Coverage Ratio (Section 6.12)

          The ratio of

(i) Consolidated EBITDA (plus the aggregate amount of Transaction Costs incurred or accrued, minus the unfinanced portion of Capital Expenditures) for the period of four consecutive fiscal quarters most recently ended at or prior to the date of this certificate (the “Measurement Period”)	$	___________
To
(ii) Fixed Charges for the Measurement Period	$	___________
Ratio:		___________
must not exceed:		1.10 to 1.00

Please refer to Schedule 1 for a detailed calculation of the amounts set forth above.

Exhibit E

2

          IN WITNESS WHEREOF, I have hereto set my name.

Dated:

By:
	Name:
	Title:	[Financial Officer of USG]

Exhibit E

3

Schedule 1 to
Compliance Certificate

Format to be agreed between JPMorgan and USG.

EXHIBIT F

[FORM OF]

ADMINISTRATIVE QUESTIONNAIRE

USG CORPORATION

Agent Address:	JPMorgan Chase Bank, N.A.	Return form to:
	JPMorgan Loan Services	Telephone:
	1111 Fannin Street, 10th Fl.	Facsimile:
	Houston, TX 77002	E-mail:

It is very important that all of the requested information be completed accurately and that this questionnaire be returned promptly. If your institution is sub-allocating its allocation, please fill out an administrative questionnaire for each legal entity.

Legal Name of Lender to appear in Documentation:

Signature Block Information: 

•	Signing Credit Agreement	Yes	No
•	Coming in via Assignment	Yes	No

Type of Lender:

Bank | Asset Manager | Broker/Dealer | CLO/CDO | Finance Company | Hedge Fund | Insurance | Mutual Fund | Pension Fund | Other Regulated Investment Fund | Special Purpose Vehicle | Other-please specify) |

Lender Parent: 

Domestic Address Eurodollar Address

Exhibit F

Contacts/Notification Methods: Borrowings, Paydowns, Interest, Fees, etc.

Syndicate-level information (which may contain material non-public information about the Borrower and its related parties or their respective securities) will be made available to the Credit Contact(s). The Credit Contacts identified must be able to receive such information in accordance with his/her institution’s compliance procedures and applicable laws, including Federal and state securities laws.

	Primary Credit Contact	Secondary Credit Contact
Name:
Company:
Title
Address:
Telephone:
Facsimile:
Email Address:

	Primary Operations Contact	Secondary Operations Contact
Name:
Company:
Title
Address:
Telephone:
Facsimile:
Email Address:

	Bid Contact
Name:
Company:
Title
Address:
Telephone:
Facsimile:
Email Address:

Exhibit F

2

Lender’s Domestic Wire Instructions

Bank Name:

ABA/Routing No.:

Account Name:

Account No.:

FFC Account Name:

FFC Account No.:

Attention:

Reference:

Agent’s Wire Instructions

Bank Name:

ABA/Routing No.:

Account Name:

Account No.:

FFC Account Name:

FFC Account No.:

Attention:

Reference:

Exhibit F

3

Tax Documents

NON-U.S. LENDER INSTITUTIONS:

I. Corporations:

If your institution is incorporated outside of the United States for U.S. federal income tax purposes, and is the beneficial owner of the interest and other income it receives, you must complete one of the following three tax forms, as applicable to your institution: a.) Form W-8BEN (Certificate of Foreign Status of Beneficial Owner), b.) Form W-8ECI (Income Effectively Connected to a U.S. Trade or Business), or c.) Form W-8EXP (Certificate of Foreign Government or Governmental Agency).

A U.S. taxpayer identification number is required for any institution submitting Form W-8ECI. It is also required on Form W-8BEN for certain institutions claiming the benefits of a tax treaty with the U.S. Please refer to the instructions when completing the form applicable to your institution. In addition, please be advised that U.S. tax regulations do not permit the acceptance of faxed forms. An original tax form must be submitted.

II. Flow-Through Entities:

If your institution is organized outside the U.S., and is classified for U.S. federal income tax purposes as either a Partnership, Trust, Qualified or Non-Qualified Intermediary, or other non-U.S. flow-through entity, an original Form W-8IMY (Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding) must be completed by the intermediary together with a withholding statement. Flow-through entities other than Qualified Intermediaries are required to include tax forms for each of the underlying beneficial owners.

Please refer to the instructions when completing this form. In addition, please be advised that U.S. tax regulations do not permit the acceptance of faxed forms. Original tax form(s) must be submitted.

U.S. LENDER INSTITUTIONS:

If your institution is incorporated or organized within the United States, you must complete and return Form W-9 (Request for Taxpayer Identification Number and Certification). Please be advised that we request that you submit an original Form W-9.

Pursuant to the language contained in the tax section of the Credit Agreement, the applicable tax form for your institution must be completed and returned prior to the first payment of income. Failure to provide the proper tax form when requested may subject your institution to U.S. tax withholding.

Exhibit F

4

Exhibit G

Perfection Certificate

See Attached

Exhibit G

PERFECTION CERTIFICATE

          Reference is made to the Second Amended and Restated Credit Agreement dated as of January 7, 2009 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among USG Corporation, a Delaware corporation (the “Borrower”), the Lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent (in such capacity, the “Administrative Agent”), and Goldman Sachs Credit Partners L.P., as Syndication Agent. Capitalized terms used but not defined herein have the meanings assigned in the Credit Agreement or the Security Agreement referred to therein, as applicable. For purposes of this Perfection Certificate (this “Certificate”), “Grantors” shall mean the Borrower and each Loan Party that is a wholly-owned Subsidiary.

          The undersigned, a Financial Officer of the Borrower, hereby certifies to the Administrative Agent and each other Secured Party as follows:

1. Names. (a) The exact legal name of each Grantor, as such name appears in its respective certificate of formation, is as follows:

USG Corporation

United States Gypsum Company

USG Interiors, Inc.

L & W Supply Corporation

California Wholesale Material Supply, LLC

Livonia Building Materials, LLC

River City Materials, Inc.

USG Foreign Investments, Ltd.

Otsego Paper, Inc.

(b) Set forth below is each other legal name each Grantor has had in the past two years, together with the date of the relevant change:

USG Corporation – None

United States Gypsum Company – None

USG Interiors, Inc. – None

L & W Supply Corporation – None

California Wholesale Material Supply, LLC – None

Livonia Building Materials, LLC – None

River City Materials, Inc. – None

USG Foreign Investments, Ltd. – None

Otsego Paper, Inc. – None

(c) Except as set forth in Schedule 1 hereto, no Grantor has changed its identity or corporate structure in any way within the past two years. Changes in identity or corporate structure would include mergers, consolidations and acquisitions, as well as any change in the form, nature or jurisdiction of organization. If any such change has occurred, include in Schedule 1 the information required by Sections 1 and 2 of this certificate as to each acquiree or constituent party to a merger or consolidation.

(d) The following is a list of all other names (including trade names or similar appellations) used by each Grantor or any of its divisions or other business units in connection with the conduct of its business or the ownership of its properties at any time during the past two years:

	States
	(where applicable)
USG Corporation
None
United States Gypsum Company
None
USG Interiors, Inc.
None
L & W Supply Corporation
Alabama Drywall	AL
Acoustical Drywall & Supply	KY
Alltex Interior Supply Building Specialties	TX
AMS/Building Specialties	TX
Arch City Drywall Supply	MO
Architectural Stone Products	UT,
Arrowhead Drywall Supply	MO, KS
Barnett Drywall Supply	TX
Builders Supply	WI
	PA, CO, TX, MD,
	NJ, WA, OK, GA,
Building Specialties	WY, NY, OH,
	VA,MS, ID, MO,
	OR, DE, CT

2

	States
	(where applicable)
C&A Drywall Supply	OH
Cal-Wal Gypsum Supply	CA
Capitol Drywall Supply	UT, NV, OH
Casa Grande	AZ
Cascade Gypsum & Building Supply	OR
Ceiling & Building Specialties	IL
Cen-Cal Wallboard Supply	CA
Chesapeake Drywall	MD
C-K Supply	NC, SC, TN, GA
Dekalb Supply	IL
Desert Building Materials	AZ
Drywall Supply	TX
E-C Drywall Supply	WI
E-Foam	NV
Gem State Acoustical & Drywall	ID
Great Lakes Gypsum Supply	MI
Gypsum Drywall Supply	CA
Gypsum Services	NY, PA
Indianapolis Drywall Supply	IN
Kennell/Arrowhead Co.	MO
M&S Drywall Supply	MN
Plainfield Supply	IL
Ponderosa Wholesale	NV
River City Materials	TN, MS, AR
Rose City Building Materials	OR
Roselle Building Materials	IL
Scharpfs Twinoaks Builders Supply	OR
Seacoast Supply	FL, LA, GA, AL
Sierra Building Materials	CA
South County Gypsum & Roofing	IN
State Line Drywall	IL
Thunderbird Building Materials	AZ
Toledo Drywall Supply	OH
Wabash Valley Supply	IN
Wausau Brick & Gypsum	WI
Wisconsin Drywall	WI
Zechman Supply	IL
Livonia Holdings, Inc.	MI, OH
Livingston Building Materials, LLC	MI
Frames, Doors & Hardware, Inc.	MI
Oakland Building Materials Co.	MI
Ceilings & Walls, Inc.	MI
Progressive Building Materials, Inc.	MI
East Side Building Materials Co.	MI
Acoustical Services, Inc.	MI
Specialty Distributors, Inc.	MI
Jackson Building Materials Co.	MI
Preferred Building Materials Co., Inc.	MI
Great Lakes Gypsum & Supply	MI, OH

3

	States
	(where applicable)
California Wholesale Material Supply
	NM, CA, TX, AZ,
	UT,NV,ID, CO,
Calply	OK
Capitol Building Materials	UT, NV
Gem State Acoustical & Drywall Supply	ID
Coyote Building Materials	AZ
Desert Building Materials	AZ
Thunderbird Building Materials	AZ
Sierra Building Materials	CA
Architectural Stone Products	UT, NV
Gypsum Drywall Supply	CA
Cal-Wal Gypsum Supply	CA
Heartland Building Materials	CA
Cen-Cal Wallboard Supply	CA
Ponderosa Wholesale	NV
Building Specialties	TX
Livonia Building Materials, LLC
Livonia Newco, LLC	MI
Livonia Building Materials Co.	MI
Great Lakes Gypsum & Supply	MI
River City Materials, Inc.	AR, TN
None
USG Foreign Investments, Ltd.
None
Otsego Paper, Inc.	MI
None

(e) Set forth below is the Organizational Identification Number, if any, issued by the jurisdiction of formation of each Grantor that is a registered organization:

Grantor:	Organizational Identification Number:
USG Corporation	File No. 2046782
United States Gypsum Company	File No. 0636722
USG Interiors, Inc.	File No. 2048399
L & W Supply Corporation	File No. 0771121

4

Grantor:	Organizational Identification Number:
California Wholesale Material Supply, LLC	File No. 448177
Livonia Building Materials, LLC	D0453H
River City Materials, Inc.	File No. 43973
USG Foreign Investments, Ltd.	File No. 0904059
Otsego Paper, Inc.	File No. 4123529

5

(f) Set forth below is the Federal Taxpayer Identification Number of each Grantor:¹

Grantor:	FEIN:
USG Corporation	***
United States Gypsum Company	***
USG Interiors, Inc.	***
L & W Supply Corporation	***
California Wholesale Material Supply, LLC	***
Livonia Building Materials, LLC	***
River City Materials, Inc.	***
USG Foreign Investments, Ltd.	***
Otsego Paper, Inc.	***

2. Current Locations. (a) The chief executive office of each Grantor is located at the address set forth opposite its name below:

Grantor	Mailing Address	County	State
USG Corporation	550 West Adams Street	Cook	Illinois
	Chicago, IL 60661
United States	550 West Adams Street	Cook	Illinois
Gypsum Company	Chicago, IL 60661
USG Interiors, Inc.	550 West Adams Street	Cook	Illinois
	Chicago, IL 60661
L & W Supply	550 West Adams Street	Cook	Illinois
Corporation	Chicago, IL 60661
California	8535 E. Florence	Los Angeles	California
Wholesale Material	Avenue Downey, CA 90240
Supply, LLC

¹ Necessary only for Grantors organized under the laws of North Dakota or South Dakota.

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

6

Grantor	Mailing Address	County	State
Livonia Building	550 West Adams Street	Cook	Illinois
Materials, LLC	Chicago, IL 60661
River City	925 Bond Street,	Pulaski	Arkansas
Materials, Inc.	Little Rock, AR 72202
USG Foreign	550 West Adams Street	Cook	Illinois
Investments, Ltd.	Chicago, IL 60661
Otsego Paper, Inc.	320 N. Farmer St	Allegan	Michigan
	Otsego, MI 49078-1150

(b) Set forth below opposite the name of each Grantor are all locations where such Grantor maintains any books or records relating to any Accounts:

Grantor	Mailing Address	County	State
USG Corporation	No Accounts N/A	N/A	N/A
United States Gypsum Company	550 West Adams Street Chicago, IL 60661	Cook	Illinois
USG Interiors, Inc.	550 West Adams Street Chicago, IL 60661	Cook	Illinois
L & W Supply Corporation	303 W. Irving Park Rd. Roselle, IL 60172	Du Page	Illinois
	12450 Beard Ave., S. Burnsville, MN 55337	Dakota	Minnesota
	2646 Byington Solway Rd. Knoxville, TN 37931	Knox	Tennessee
	2639 Lombardy Lane Dallas, TX 75220	Dallas	Texas
	6545 Burlington North Drive Houston, TX 77092	Harris	Texas
	3018 Shader Rd. Orlando, FL 32808	Orange	Florida
	21195 Boca Rio Road Boca Raton, FL 33433	Palm Beach	Florida
	126 Route 94 Blairstown, NJ 07825	Warren	New Jersey
	9714 Pulaski Highway Baltimore, MD 21220	Baltimore	Maryland
	4311 Dorchester Rd.	Charleston	South Carolina
	Charleston, SC 29405

7

Grantor	Mailing Address	County	State
	1303 Hightower Trail Atlanta, GA 30350	Fulton	Georgia
	8200 Henderson Rd. Charlotte, NC 28269	Mecklenburg	North Carolina
	7220 SW Bonita Rd. Tigard, OR 97224	Washington	Oregon
	17608 E. 24th Drive Aurora, CO 80011	Adams	Colorado
	33900 Concord Livonia, MI 48150	Wayne	Michigan
California Wholesale Material Supply, LLC	8535 E. Florence Ave. Downey, CA 90240	Los Angeles	California
	2180 N Glassell St. Orange, CA 92865	Orange	California
	1300 S. River Road West Sacramento, CA 95961	Yuba	California
	657 W 8th Ave. Midvale, UT 84047	Salt Lake	Utah
Livonia Building Materials, LLC	33900 Concord Livonia, MI 48150	Wayne	Michigan
River City Materials, Inc.	2646 Byington Solway Rd. Knoxville, TN 37931	Knox	Tennessee
USG Foreign Investments, Ltd.	No Accounts N/A	N/A	N/A
Otsego Paper, Inc.	No Accounts N/A	N/A	N/A

(c) Set forth below opposite the name of each Grantor are all locations where such Grantor maintains any Collateral other than that referred to in Section 2(b):

Grantor	Mailing Address	County	State
USG Corporation	None
United States	1550 Gypsum Road Tawas City, MI 48763-9467	Iosco	Michigan
Gypsum Company
	4859 New Peachtree Rd	DeKalb	Georgia
	Chamblee, GA
	30341-3120

8

Grantor	Mailing Address	County	State
	2148 American Industrial Way	DeKalb	Georgia
	Chamblee, GA 30341
	1115 Armour Road	Clay	Missouri
	North Kansas City, MO 64116-3783
	81 N. State	Sevier	Utah
	Sigurd, UT 84657-0160
	6825 Evergreen Avenue Jacksonville, FL 32208-4996	Duval	Florida
	1414 Lindrose St.	Duval	Florida
	Jacksonville, FL 32206
	Highway 51 A	Blaine	Oklahoma
	Southard, OK 73770-0100
	70 E Main Street	Rockland	New York
	Stony Point, NY 10980-1629
	29073 Dike Road	Columbia	Oregon,
	Rainier, OR 97048-0037
	401 Van Ness Avenue Torrance, CA 90501-1422	Los Angeles	California
	9306 Sorensen Avenue Santa Fe Springs, CA 90670-2688	Los Angeles	California
	3810 W. Evan Hewes Highway	Imperial	California
	El Centro, CA 92244-2450
	14370 Gannet St	Los Angeles	California
	La Mirada, CA 90638-5221
	37887 Shinn St	Alameda	California
	Fremont, CA 94536-4047
	1201 Mayo Shell Rd	Harris	Texas
	Galena Park, TX 77547-0525
	255 Regal Row	Dallas	Texas
	Dallas, TX 75247-5201
	Route 650 Shoals, IN 47581-1377	Martin	Indiana

9

Grantor	Mailing Address	County	State
	1255 Raritan Rd	Union	New Jersey
	Clark, NJ 07066-1257
	1001 Buchanan St	Norfolk City	Virginia
	Norfolk, VA 23523-1254
	5701 Lewis Rd	Orleans	Louisiana
	New Orleans, LA 70126-2500
	2110 Paragon Ave	Webster	Iowa
	Fort Dodge, IA 50501-8404
	13425 210th St	Des Moines	Iowa
	Mediapolis, IA 52637-0219
	300 Markley St	Middlesex	New Jersey
	Port Reading, NJ 07064-1819
	Highway 447	Washoe	Nevada
	Empire, NV 89405-0130
	722 Altapass	Mitchell	North Carolina
	Hwy Spruce Pine, NC 28777-8927
	301 Riley Rd	Lake	Indiana
	East Chicago, IN 46312-1697
	401 C St NW	King	Washington
	Auburn, WA 98001-3908
	2898 Birch Dr	Hancock	West Virginia
	Weirton, WV 26062-5142
	5061 N 51st Ave,	Maricopa	Arizona
	Glendale, AZ 85301-7602
	Lake Street	Ottawa	Ohio
	Gypsum, OH 43433-0121
	60 PPL Road	Montour	Pennsylvania
	Danville, PA 17821
	1 Woodlawn Rd	Beaver	Pennsylvania
	Aliquippa, PA 15001-5413
USG Interiors, Inc.	35 Arch Street	Carlton	Minnesota
	Cloquet, MN 55720-1570

10

Grantor	Mailing Address	County	State
	27384 Highway 61 Blvd	Goodhue	Minnesota
	Red Wing, MN
	55066-5525
	208 Adeline St	Walworth	Wisconsin
	Walworth, WI
	53184-9532
	1000 Crocker Rd	Cuyahoga	Ohio
	Westlake, OH
	44145-1031
	2575 Loomis Rd	San Joaquin	California
	Stockton, CA
	95205-8045
	1000 Donn Dr	Bartow	Georgia
	Cartersville, GA
	30120-2668
	850 N Broadway St	Washington	Mississippi
	Greenville, MS
	38701-2305
	5500 Quarantine Rd	Anne Arundel	Maryland
	Baltimore, MD
	21226-1621
	4500 Ardine St	Los Angeles	California
	South Gate, CA 90280
	100 D J Nootens Dr	Jackson	Alabama
	Bridgeport, AL
	35740-7054
	200 Terminal St	Suffolk	Massachusetts
	Charlestown, MA
	02129-1981
	1 USG Rd	Nolan	Texas
	Sweetwater, TX
	79556-2880
	2 Division St	Wayne County	Michigan
	River Rouge, MI
	48218-1352
	2750 Maple Ave	Genesee	New York
	Oakfield, NY
	14125-9722

11

Grantor	Mailing Address	County	State
L & W Supply	1032 11th Court,	Jefferson	Alabama
Corporation	West Birmingham, AL 35231
	801 Second Avenue SE	Morgan	Alabama
	Decatur, AL 35602
	4930 University Square	Madison	Alabama
	Huntsville, AL 35816
	661 Western Drive	Mobile	Alabama
	Mobile, AL 36607
	17655 Ashley Drive	Bay	Florida
	Panama City, FL 32413
	206 W. Herman Street	Escambia	Florida
	Pensacola, FL
	3960 Woodville Highway	Leon	Florida
	Tallahassee, FL 32301
	New BTS	Leon	Florida
	Tallahassee, FL
	1303 Hightower Trail	DeKalb	Georgia
	Atlanta, GA 30350
	23 Sand Hill Shady Grove	Carroll	Georgia
	Carrollton, GA 30116
	111 Kelli Clark Court	Bartow	Georgia
	Cartersville, GA 30121
	5155 Cash Industrial Pk.	Forsyth	Georgia
	Cumming, GA 30040
	2394 Weaver Way	DeKalb	Georgia
	Doraville, GA 30340
	434 Old Evans Road	Columbia	Georgia
	Evans, GA 30809
	101 Jonesboro Road	Henry	Georgia
	McDonough, GA 30253
	130 Amlajack Way	Coweta	Georgia
	Newnan, GA 30265
	3 Patton Road	Chatham	Georgia
	Savannah, GA 31405
	4755 N Church Lane, SE	Cobb	Georgia
	Smyrna, GA 30080
	970 Patrick Industrial Ct.	Cobb	Georgia
	Winder, GA C

12

Grantor	Mailing Address	County	State
	7842 Georgia Hwy 140	Cherokee County	Georgia
	Woodstock, GA 30588
	120 Tavistock Road	Buncombe	North Carolina
	Arden, NC 28704
	8200 Henderson Road	Mecklenburg	North Carolina
	Charlotte, NC 28269
	647 Michael Wylie Drive	Mecklenburg	North Carolina
	Charlotte, NC 28217
	7712 Boeing Drive	Guilford	North Carolina
	Greensboro, NC 27409
	3540 Diamond Drive	Pitt	North Carolina
	Greenville, NC 27834
	4525 First Avenue, S.W.	Burke	North Carolina
	Hickory, NC 28637
	3931 Smith Farm Road	Mecklenburg	North Carolina
	Matthews, NC 28105
	5000 Trademark Drive	Wake	North Carolina
	Raleigh, NC 27610
	4205 Emerson Street	New Hanover	North Carolina
	Wilmington, NC 28403
	382 Buck Island Rd.	Beaufort	South Carolina
	Bluffton, SC 29910
	4311 Dorchester Road	Charleston	South Carolina
	Charleston, SC 29405
	4311 Dorchester Road	Charleston	South Carolina
	Charleston, SC 29405
	4311 Dorchester Road	Charleston	South Carolina
	Charleston, SC 29405
	738 Mauney Drive	Greenville	South Carolina
	Columbia, SC 29211
	Old Stage Road	Horry	South Carolina
	Simpsonville, SC 29681
	3014 Drywall Drive	Polk	South Carolina
	Myrtle Beach, SC 29577
	408 Dixie Highway	Palm Beach	Florida
	Auburndale, FL 33823
	21195 Boca Rio Road	Lee	Florida
	Boca Raton, FL 33433
	24263 Production Circle	Manatee	Florida
	Bonita Springs, FL 34135
	2510 Manatee Ave. East	Charlotte	Florida
	Bradenton, FL 34208

13

Grantor	Mailing Address	County	State
	3045 South McCall Rd.	Charlotte	Florida
	Englewood, FL 34224
	3045 South McCall Road	Charlotte	Florida
	Englewood, FL 34224
	2912 Warehouse Road	Lee	Florida
	Ft. Myers, FL 33916
	1751 N. Nova Rd.	Volusia	Florida
	Holly Hill, FL
	32117-1903
	9410 Eden Avenue	Pasco	Florida
	Hudson, FL 34667
	2919 Dawn Road	Duval
	Jacksonville, FL 32207		Florida
	2853 Dawn Road	Duval	Florida
	Jacksonville, FL 32207
	700 Commerce Way W.	Palm Beach	Florida
	Jupiter, FL 33458
	2655 Irlo Bronson	Osceola	Florida
	Kissimmee, FL 34744
	7611 N.W. 74th Avenue	Miami-Dade	Florida
	Medley, FL 33166
	3181 Skyway Circle	Brevard	Florida
	Melbourne, FL 32935
	6190 Shirley Street	Collier	Florida
	Naples, FL 34109
	1425 S.W. 15TH Ave.	Marion	Florida
	Ocala, FL 34474
	3018 Shader Rd.	Orange	Florida
	Orlando, FL 32808
	1771 S.W. Biltmore St.	Saint Lucie	Florida
	Port St. Lucie, FL 34984
	250 Carmalita St.	Charlotte	Florida
	Punta Gorda, FL 33951
	3515 Heid Rd.	Highlands	Florida
	Sebring, FL 33872
	2210 Dobbs Rd.	Saint Johns	Florida
	St. Augustine, FL 32086
	2817 N. 36th Street	Hillsborough	Florida
	Tampa, FL 33605-3127
	3615 21st Avenue East	Hillsborough	Florida
	Tampa, FL 33605

14

Grantor	Mailing Address	County	State
	1971 Commerce Ave.	Indian River	Florida
	Vero Beach, FL 32960
	4811 Dyer Blvd.	Palm Beach	Florida
	W. Palm B., FL 33407
	1871 East Kings Ave.	Camden	Georgia
	Kingsland, GA 31548
	114 N. Main Street	Washtenaw	Michigan
	Chelsea, MI 48118
	2318 Cass Road	Grand Traverse	Michigan
	Traverse City, MI 49684
	3470 Roger B. Chaffee	Kent	Michigan
	Wyoming, MI 49548
	330 Baker St.	Ingham	Michigan
	Lansing, MI 48910
	596 E. Highland Road	Summit	Ohio
	Macedonia, OH 44056
	6287 Lear Nagle Rd.	Lorain	Ohio
	N. Ridgeville, OH 44039
	26675 Eckel Road	Wood	Ohio
	Perrysburg, OH 43552
	26470 Southpoint	Wood	Ohio
	Perrysburg, OH 43551
	15660 S. Keeler Terrace	Johnson	Kansas
	Olathe, KS 66062
	117 South Smothers	Pulaski	Arkansas
	N. Little Rock, AR 72114
	3915 Business Park Dr.	Jefferson	Kentucky
	Louisville, KY 40213
	4961 River Road	Jefferson	Louisiana
	Jefferson, LA 70121
	390 N. Valley Dell Drive	Saint Louis	Missouiri
	Fenton, MO 63026
	207 N. Ranson Road	Jackson	Missouri
	Greenwood, MO 64034
	1002 S. Moffett	Jasper	Missouri
	Joplin, MO 64802
	5030 Waukomis Drive	Platte	Missouri
	Northmoor, MO 64151
	2650 N. Westgate Ave.	Greene	Missouri
	Springfield, MO 65803
	12346 Intraplex Parkway	Harrison	Mississippi
	Gulfport, MS 39503

15

Grantor	Mailing Address	County	State
	300 West Monument St.	Hinds	Mississippi
	Jackson, MS 39203
	1279 Road 681	Lee	Mississippi
	Tupelo, MS 38801
	1150 McKinley Ave.	Franklin	Ohio
	Columbus, OH 43222
	3393 Needmore Road Dayton,	Montgomery	Ohio
	OH 45414
	11906 Tramway Drive	Hamilton	Ohio
	Sharonville, OH 45241
	11481 Gulfstream Drive	Shelby	Trnnessee
	Arlington, TN 38002”
	4275 Shallowford Road	Hamilton	Tennessee
	Chattanooga, TN 37422
	75 United Drive	Madison	Tennessee
	Jackson, TN 38305
	8 Wesley Street	Washington	Tennessee
	Johnson City, TN 37602
	2646 Byington Solway Rd	Knox	Tennessee
	Knoxville, TN 37931
	285 Main Street	Lake	Illinois
	Antioch, IL 60002
	2017 West Hubbard St.	Cook	Illinois
	Chicago, IL
	430 N. Damen Ave.	Cook	Illinois
	Chicago, IL 60622
	275 Harvestore Drive	DeKalb	Illinois
	DeKalb, IL 60115
	235 Industrial Drive	Kane	Illinois
	Hampshire, IL 60140
	8845 West 192nd St.	Will	Illinois
	Mokena, IL 60448
	221 W. Jefferson Ave.	DuPage	Illinois
	Naperville, IL 60540
	303 W. Irving Park Road	DuPage	Illinois
	Roselle, IL 60172
	303 W. Irving Park Rd.	DuPage	Illinois
	Roselle, IL 60172
	(Railroad land lease)
	201 Messner Drive	Cook	Illinois
	Wheeling, IL 60090

16

Grantor	Mailing Address	County	State
	11130 Delaware Parkway	Lake	Indiana
	Crown Point, IN 46307
	1050 S. Emerson Ave.	Marion	Indiana
	Indianapolis, IN 46203
	2119 S. 3rd Street	Vigo	Indiana
	Terre Haute, IN 47802
	13586 Thrush St. NW	Anoka	Minnesota
	Andover, MN 55304
	12450 Beard Ave., South	Dakota	Minnesota
	Burnsville, MN 55337
	3603 Hogarth St.	Eau Claire	Wisconsin
	Eau Claire, WI 54703
	215 N. Henry Street	Brown	Wisconsin
	Green Bay, WI 54308
	2155 W. Nordale Drive	Outagamie	Wisconsin
	Appleton, WI 54912
	4701 McFarland Ct.	Dane	Wisconsin
	McFarland, WI 53558
	4786 McFarland Ct.	Dane	Wisconsin
	McFarland, WI 53558
	4949 N. 119th Street	Milwaukee	Wisconsin
	Milwaukee, WI 53225
	739 Washington St.	Marathon	Wisconsin
	Wausau, WI 54403
	12595 E. 61st Street	Tulsa	Oklahoma
	Broken Arrow, OK 74012
	1500 Exchange Ave.	Oklahoma	Oklahoma
	Oklahoma City, OK 73108
	503 Industrial Blvd.	Travis	Texas
	Austin, TX 78760
	2802 Flintrock Trace	Travis	Texas
	Austin, TX 78738
	7420 Wespark Drive	Jefferson	Texas
	Beaumont, TX 77705
	420 Industrial Blvd.	Brazos	Texas
	Bryan, TX 77803
	2302 Pollex	Nueces	Texas
	Corpus Christi, TX 78415

17

Grantor	Mailing Address	County	State
	2639 Lombardy Lane Dallas,	Dallas	Texas
	TX 75220
	1401 Meacham Blvd.	Tarrant	Texas
	Ft. Worth, TX 76106
	10750 John W. Eliot Road	Collin	Texas
	Frisco, TX 75034
	3302 Spur 54	Cameron	Texas
	Harlingen, TX 78550
	6545 Burlington N. Drive	Harris	Texas
	Houston, TX 77092
	1010 Rankin Rd.	Harris	Texas
	Houston, TX 77073
	1415 E. Broadway	Brazoria	Texas
	Pearland, TX 77581
	6124 Reading Road	Fort Bend	Texas
	Rosenberg, TX 77471
	2100 Mannix	Bexar	Texas
	San Antonio, TX 78217
	New BTS,	Guadalupe	Texas
	Schertz , TX
	6696 Doniphan	El Paso	Texas
	Canutillo, TX 79835
	905 Hawkins Blvd.	El Paso	Texas
	El Paso, TX 79915
	1203 N. Schultz, Bldg. #2	Pinal	Arizona
	Casa Grande, AZ 85222
	2808 N. 27th Ave.	Maricopa	Arizona
	Phoenix, AZ 85009
	2850 N. Enterprise Pkwy	Yavapai	Arizona
	Prescott Valley, AZ 86314
	4119 E. Anderson Street	Cochise	Arizona
	Sierra Vista, AZ 85650
	2310 Gardner Lane	Pima	Arizona
	Tucson, AZ 85705
	549 Commerce Circle	Clark	Nevada
	Mesquite, NV 89027
	1818 Losee Road	Clark	Nevada
	N. Las Vegas, NV 89030
	17608 E. 24th Drive	Adams	Colorado
	Aurora, CO 80011

18

Grantor	Mailing Address	County	State
	2820 N. Prospect	El Paso	Colorado
	Colo. Springs, CO 80907
	1401 Academy Court	Larimer	Colorado
	Ft. Collins, CO 80521
	1249 Boeing Street	Ada	Idaho
	Boise, ID 83705
	4132 Haroldsen Drive	Bonneville	Idaho
	Idaho Falls, ID 83401
	318 E. Karcher Rd.	Canyon	Idaho
	Nampa, ID 83687
	408 E. Karcher Rd.	Canyon	Idaho
	Nampa, ID 83687
	483 Eastland Drive South	Twin Falls	Idaho
	Twin Falls, ID 83301
	689 SE Glenwood Drive	Deschutes	Oregon
	Bend, OR 97702
	3919 West 1st Ave.	Lane	Oregon
	Eugene, OR 97402
	21375 NW Cherry Lane	Washington	Oregon
	Hillsboro, OR 97124
	365 Ehrman Way	Jackson	Oregon
	Medford, OR
	100 SE 111th Ave.	Multnomah	Oregon
	Portland, OR 97266
	7220 SW Bonita Road	Washington	Oregon
	Tigard, OR 97224
	485 N. Main St.	Davis	Utah
	Layton, UT 84041
	255 North 1000 W.	Cache	Utah
	Logan, UT 84341
	657 W. 8th Ave.	Salt Lake	Utah
	Midvale, UT 84047
	3125 Grant Ave.	Weber	Utah
	Ogden, UT 84401
	48 N. 1330 W.	Utah	Utah
	Orem, UT 84057
	1364 West State Road	Utah	Utah
	Pleasant Grove, UT 84062
	9192 South 300 West	Salt Lake	Utah
	Sandy, UT 84070

19

Grantor	Mailing Address	County	State
	708 N. 3050, Suite A	Washington	Utah
	St. George, UT 84770
	4058 South River Rd., #4	Washington	Utah
	St. George, UT 84770
	376 East 400 South #4	Utah	Utah
	Springville, UT 84663
	3663 Chico Way NW	Kitsap	Utah
	Bremerton, WA 98310
	15102 Smokey Point	Snohomish	Washington
	Marysville, WA 98271
	14980 NE 90th St.	King	Washington
	Redmond, WA 98052
	East 6819 Mission	Spokane	Washington
	Spokane, WA 99212
	7416 E. Broadway Ave.	Spokane	Washington
	Spokane Valley, WA 99212
	4400 A Industry Drive E.	Pierce	Washington
	Tacoma, WA 98421
	2508 East Fox Farm Rd.	Laramie	Washington
	Cheyenne, WY 82007
	1087/1099 Doris	Oakland	Michigan
	Auburn Hills, MI 48326
	1055 Doris	Oakland	Michigan
	Auburn Hills, MI 48326
	28187 Kehrig Drive	Macomb	Michigan
	Chesterfield, MI 48047
	28377 Kehrig Drive	Macomb	Michigan
	Chesterfield, MI 48047
	2632 Lippencott	Genesee	Michigan
	Flint, MI 48507
	4100 Lambert Drive	Livingston	Michigan
	Howell, MI 48855
	118 Rosehill #A	Jackson	Michigan
	Jackson, MI 49202
	118 Rosehill #D	Jackson	Michigan
	Jackson, MI 49202
	120 Rosehill	Jackson	Michigan
	Jackson, MI 49202
	33026 Capitol	Wayne	Michigan
	Livonia, MI 48150
	12770 Farmington	Wayne	Michigan
	Livonia, MI 48150

20

Grantor	Mailing Address	County	State
	615 Harbor	Monroe	Michigan
	Monroe, MI 48162
	4315 Corporate Drive	Isabella	Michigan
	Mt. Pleasant, MI 48858
	4180 Dove Road	Saint Clair	Michigan
	Port Huron, MI 48060
	3725 East Washington	Saginaw	Michigan
	Saginaw, MI 48601
	1255 W. Michigan Ave.	Washtenaw	Michigan
	Ypsilanti, MI 48197
	10559 Geiser Road	Lucas	Ohio
	Holland, OH 43528
	33000 Capitol	Wayne	Michigan
	Livonia, MI 48150
	33900 Concord	Wayne	Michigan
	Livonia, MI 48150
	195 Sackett Point Rd.	New Haven	Connecticut
	North Haven, CT 06473
	573 Bellevue Road	New Castle	Delaware
	Newark, DE 19713
	20 Railroad Ave.	Sussex	Delaware
	Selbyville, DE 19975
	9714 Pulaski Highway	Baltimore	Maryland
	Baltimore, MD 21220
	West 4661 Hollins Ferry Road	Baltimore	Maryland
	Baltimore, MD 21227
	3 Washington Street	Dorchester	Maryland
	Cambridge, MD 21613
	16608 Huntersgreen	Washington	Maryland
	Hagerstown, MD 21740
	28895 Three Notch Rd.	Saint Mary’s	Maryland
	Mechanicsville, MD
	301 Serendipity Drive	Anne Arundel	Maryland
	Millersville, MD 21108
	8830 Orchard Tree Lane
	Towson, MD 21286	Baltimore	Maryland

21

Grantor	Mailing Address	County	State
	193 Fairfield Rd.
	Fairfield, NJ 07004	Essex	New Jersey
	163 Garfield Ave.
	Kearney, NJ 07032	Hudson	New Jersey
	172-174 Garfield Ave.
	Kearney, NJ 07032	Hudson	New Jersey
	39 Colonial Drive
	Piscataway, NJ 08854	Middlesex	New Jersey
	14 Central Blvd.
	S. Hackensack, NJ 07606	Bergen	New Jersey
	1351 Route 37 West
	Toms River, NJ 08755	Ocean	New Jersey
	315 N. Clinton Ave.
	Trenton, NJ 08638	Mercer	New Jersey
	675 Duke Road.
	Buffalo, NY 14225	Erie	New York
	36A Green Mountain Dr.
	Cohoes, NY 12047	Albany	New York
	500 Beach Rd.
	W. Haverstraw, NY 10993	Rockland	New York
	657 Route 17K
	Montgomery, NY 12549	Orange	New York
	7330 Townline Road
	N. Tonawanda, NY 14120	Niagara	New York
	200 Pixley Rd.
	Rochester, NY 14624	Monroe	New York
	1635 Airport Road Suite 7
	Allentown, PA 18103	Lehigh	Pennsylvania
	2011 West 12th Street
	Erie, PA 16505	Erie	Pennsylvania

22

Grantor	Mailing Address	County	State
	111 Titus Ave.
	Warrington, PA 18976	Bucks	Pennsylvania
	556 Dettor Road
	Charlottesville, VA 22903	Charlottesville	Virginia
	10951 Pierson Drive
	Fredericksburg, VA 22408	Spotsylvania	Virginia
	401 E. Street
	Hampton, VA 23661	Hampton City	Virginia
	11460 Balls Ford Road
	Manassas, VA 20109	Prince William	Virginia
	5600 E. Virginia Beach
	Norfolk, VA 23502	Norfolk City	Virginia
	2001 Magnolia St.
	Richmond, VA 23223	Richmond City	Virginia
	1639 Eastern Ave., NE
	Roanoke, VA 24012	Roanoke City	Virginia
	4551 John Tyler Highway
	Williamsburg, VA 23185	James City	Virginia
	126 Route 94
	Blairstown, NJ 07825	Warren	New Jersey
	128 Route 94
	Blairstown, NJ 07825	Warren	New Jersey
	2180 N Glassell St.
	Orange, CA 92865	Orange	California
	1300 S. River Road
	West Sacramento, CA 95961	Yuba	California
California	5812 Trade Center Drive	Travis	Texas
Wholesale Material Supply, LLC	Austin, TX 78744
	16820 Calply Drive	Travis	Texas
	Pflugerville, TX 78660
	17100 I.H. 10 West	Bexar	Texas
	San Antonio, TX 78257
	4900 Calvert Street	Dallas	Texas
	Dallas, TX 75247

23

Grantor	Mailing Address	County	State
	2929 S. 38th Street	Maricopa	Arizona
	Phoenix, AZ 85040
	302 S. 30th Street	Maricopa	Arizona
	Phoenix, AZ 85034
	2450 N. Flowing Wells	Pima	Arizona
	Tucson, AZ 85705
	5131 Edith Blvd., NE	Bernalillo	New Mexico
	Albuquerque, NM 87107
	7490 Commercial Way	Clark	Nevada
	Henderson, NV 89015
	4450 McGuire Street	Clark	Nevada
	Las Vegas, NV
	4611 Mitchell Street	Clark	Nevada
	N. Las Vegas, NV 89081
	4330 Production Court	Clark	Nevada
	N. Las Vegas, NV 89115
	1442 West Center Street	Utah	Utah
	Orem, UT 84057
	9255 S. 255 West	Salt Lake County	Utah
	Sandy, UT 84070
	1400 E. Cerritos Ave.	Orange County	California
	Anaheim, CA 92805
	5601 Aldrin Court	Kertn	California
	Bakersfield, CA 93313
	7901 Deering Ave.	Los Angeles	California
	Canoga Park, CA 91304
	8531 E. Florence Ave.	Los Angeles	California
	Downey, CA
	31625 Hayman Street	Alameda	California
	Hayward, CA 94544
	42-805 Madio Street	Riverside	California
	Indio, CA 92201
	2511 E. 115th Place	Los Angeles	California
	Los Angles, CA 90059
	1860 S. Milliken Ave. #E	San Bernardino	California
	Ontario, CA 95407
	7330 S. Crider Ave.	Los Angeles	California
	Pico Rivera, CA 90660
	251 East 4th Street	San Joaquin	California
	Ripon, CA 95366
	616 S. Iowa Street	San Bernardino	California
	Redlands, CA

24

Grantor	Mailing Address	County	State
	7750 Convoy Court	San Diego	California
	San Diego, CA 92111
	3600 Third Street	San Francisco	California
	San Francisco, CA 94124
	914 W. Boone Street	Santa Barbara	California
	Santa Maria, CA 93458
	3420 Dutton Ave.	Sonoma	California
	Santa Rosa, CA 95407
	1540 S. River Road	Yolo	California
	W. Sacramento, CA 95691
	333 Glendale Ave.	Washoe	Nevada
	Sparks, NV 89431
Livonia Building	33900 Concord	Wayne	Michigan
Materials, LLC	Livonia, MI 48150
River City	825 Bond Street	Pulaski	Arkansas
Materials, Inc.	Little Rock, AR 72202
	1504 N. 35th Street	Benton	Arkansas
	Rogers, AR 72756
	1755 Airways Blvd.	Shelby	Tennessee
	Memphis, TN 38114
	300 W. Monument	Hinds	Mississippi
	Jackson, MS 39203
USG Foreign Investments, Ltd.	None
Otsego Paper, Inc.	320 N. Farmer St	Allegan	Michigan
	Otsego, MI 49078-1150

(d) The jurisdiction of formation of each Grantor that is a registered organization is set forth opposite its name below:

Grantor:	Jurisdiction:
USG Corporation	Delaware
United States Gypsum Company	Delaware

25

Grantor:	Jurisdiction:
USG Interiors, Inc.	Delaware
L & W Supply Corporation	Delaware
California Wholesale Material Supply, LLC	Delaware
Livonia Building Materials, LLC	Michigan
River City Materials, Inc.	Arkansas
USG Foreign Investments, Ltd.	Delaware
Otsego Paper, Inc.	Delaware

(e) Set forth below opposite the name of each Grantor are all the places of business of such Grantor not identified in paragraph (a), (b), (c) or (d) above:

Grantor	Mailing Address	County	State
USG Corporation	None
United States Gypsum Company	None
USG Interiors, Inc.	None
L & W Supply Corporation	None
California Wholesale Material Supply, LLC	None
Livonia Building Materials, LLC	None
River City Materials, Inc.	None
USG Foreign Investments, Ltd.	None
Otsego Paper, Inc.	None

26

(f) Set forth below opposite the name of each Grantor are the names and addresses of all Persons other than such Grantor that have possession of any of the Collateral of such Grantor:

Grantor	Collateral Possessor	Mailing Address	County	State
USG Corporation	Precision Components	1820 South 35th Ave Phoenix, AZ 85009	Maricopa	Arizona
	Texas Star Warehouse & Distribution, Inc.	5200 East Grand Avenue, Ste 400 Dallas, TX 75223-2216	Dallas	Texas
	Osterkamp Trucking Inc.	1350 E. Philadelphia Pomona, CA 91769	Los Angeles	California
	TriPak, Inc.	13615 Pioneer Way E. Puyallup, WA	Pierce	Washington
	TriPak, Inc.	1209 St. Paul Ave Tacoma, WA	Pierce	Washington
	American Warehouse Company, Inc.	4900 Dahlia St Denver, CO 80216	Denver	Colorado
	Lewis C. Howard Inc.	760 East Vine Street Kalamazoo, MI 49001	Kalamazoo	Michigan
	Oregon Metal Slitters. Inc.	7227 N. Leadbetter Rd. Portland, OR 97015	Clackamas	Oregon
	255 Blair Road LLC	255 Blair Road Avenel, NJ 07001	Middlesex	New Jersey
	11111 Santa Monica Boulevard, Ste 950 Los Angeles, CA 90025	National Industrial Portfolio Borrower, LLC	Los Angeles	California
	Hilltop	1555 1/2 Harvard Ave. Cleveland, OH 44105	Cuyahoga	Ohio
	Coil Slitting International	624 Hamilton Road Weirton, WV 26062	Hancock	West Virginia
	Feroleto Steel Company Inc	Half Moon Industrial Park Weirton, WV 26062	Hancock	West Virginia
	Wymore Transfer Co.	12651 SE Capps Rd Clackamas, OR 97015	Clackamas	Oregon

27

Grantor	Collateral Possessor	Mailing Address	County	State
	ALL METALS SERVICE & WAREHOUSING, INC.	100 All Metals Drive Cartersville, GA 30120	Bartow	Georgia
	COLONA TRANSFER L.P.	1755 Pennsylvania Ave Monaca, PA 15061	Beaver	Pennslyvania
	LANDFILL SERVICES (NORTHERN STATES POWER RED WING STEAM PLANT)	801 East Fifth Street Red Wing, MN 55066	Goodhue	Minnesota
	San Joanquin Steel Inc	2012 Sanguinetti Lane Stockton, CA 95025	San Joaquin	California
	Metal Coaters of California, Inc	9123 Center Ave Rancho Cucanmonga, CA 91730	San Bernardino	California
United States Gypsum Company	None
USG Interiors, Inc.	None
L & W Supply Corporation	None
California Wholesale Material Supply, LLC	None
Livonia Building Materials, LLC	None
River City Materials, Inc.	None
USG Foreign Investments, Ltd.	None
Otsego Paper, Inc.	None

28

3. Unusual Transactions. All Accounts have been originated by the Grantors in the ordinary course of business.

4. File Search Reports. File search reports have been obtained from each Uniform Commercial Code filing office identified with respect to such Grantor in Section 2 hereof, and such search reports reflect no liens against any of the Collateral other than those permitted under the Credit Agreement.

5. UCC Filings. Financing statements in substantially the form of Schedule 5 hereto have been prepared for filing in the proper Uniform Commercial Code filing office in the jurisdiction in which each Grantor is located.

6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule setting forth, with respect to the filings described in Section 5 above, each filing and the filing office in which such filing is to be made.

7. Deposit Accounts. Attached hereto as Schedule 7 is a true and correct list of Collateral Deposit Accounts maintained by each Grantor, including the name and address of the depositary institution, the type of account and the account number.

29

     IN WITNESS WHEREOF, the undersigned have duly executed this Certificate on this ___ day of January, 2009.

USG CORPORATION,
by
	Name:
	Title:	Financial Officer

30

Schedule 1

     Changes in identity or corporate structure of Grantors within the past two years.

California Wholesale Material Supply, LLC

     Merger with: California Wholesale Material Supply, Inc. December 31, 2007

          1.  (a) Exact Legal Name of prior entity: California Wholesale Material Supply, Inc.

               (b) Prior Legal Names — None

               (c) Corporate Changes — N/A

               (d) Other Names — None

               (e) Organizational Identification Number — not known

               (f) FEIN — N/A

          2.  (a) Most Recent Location

California	8535 E. Florence Avenue	Los Angeles	California
Wholesale Material Supply, Inc.	Downey, CA 90240

               (b) Location of books and records for prior 2 years

California	8535 E. Florence Avenue	Los Angeles	California
Wholesale Material Supply, Inc.	Downey, CA 90240

               (c) Location of other collateral for prior 2 years

California
Wholesale Material
Supply, Inc. See California Wholesale Material
Supply, LLC list above

               (d) Jurisdiction of formation — California

               (e) Other business locations for prior 2 years

California
Wholesale Material
Supply, Inc. None

               (f) Location of collateral in possession of another party for prior 2 years

California
Wholesale Material
Supply, Inc. None

L & W Supply Corporation

     Merger with: Livonia Holdings, Inc. January 1, 2009

1. (a) Exact Legal Name of prior entity: Livonia Holdings, Inc.

               (b) Prior Legal Names — None

               (c) Corporate Changes — N/A

               (d) Other Names

Livonia Holdings, Inc.	MI, OH
Livingston Building Materials, LLC	MI
Frames, Doors & Hardware, Inc.	MI
Oakland Building Materials Co.	MI
Ceilings & Walls, Inc.	MI
Progressive Building Materials, Inc.	MI
East Side Building Materials Co.	MI
Acoustical Services, Inc.	MI
Specialty Distributors, Inc.	MI
Jackson Building Materials Co.	MI
Preferred Building Materials Co., Inc.	MI

               (e) Organizational Identification Number — 4125260

               (f) FEIN — ***

          2. (a) Most Recent Location

Livonia Holdings, Inc. 550 West Adams Street
Chicago, IL 60661 Cook Illinois

              (b) Location of books and records for prior 2 years

Livonia Holdings, Inc. 33900 Concord
Livonia, MI 48150 Wayne Michigan

              (c) Location of other collateral for prior 2 years

Livonia Holdings, Inc.	1087/1099Doris Auburn Hills, MI 48326	Oakland	Michigan
	1055 Doris Auburn Hills, MI 48326	Oakland	Michigan
	28187 Kehrig Drive Chesterfield, MI 48047	Macomb	Michigan
	28377 Kehrig Drive Chesterfield, MI 48047	Macomb	Michigan
	2632 Lippencott Flint, MI 48507	Genesee	Michigan
	4100 Lambert Drive Howell, MI 48855	Livingston	Michigan
	118 Rosehill #A Jackson, MI 49202	Jackson	Michigan

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

32

118 Rosehill #D Jackson, MI 49202	Jackson	Michigan
120 Rosehill Jackson, MI 49202	Jackson	Michigan
33026 Capitol Livonia, MI 48150	Wayne	Michigan
12770 Farmington Livonia, MI 48150	Wayne	Michigan
615 Harbor Monroe, MI 48162	Monroe	Michigan
4315 Corporate Drive Mt. Pleasant, MI 48858	Isabella	Michigan
4180 Dove Road Port Huron, MI 48060	Saint Clair	Michigan
3725 East Washington Saginaw, MI 48601	Saginaw	Michigan
1255 W. Michigan Ave. Ypsilanti, MI 48197	Washtenaw	Michigan
10559 Geiser Road Holland, OH 43528	Lucas	Ohio
33000 Capitol Livonia, MI 48150	Wayne	Michigan
33900 Concord Livonia, MI 48150	Wayne	Michigan

          (d) Jurisdiction of formation — Delaware

          (e) Other business locations for prior 2 years

Livonia Holdings, Inc. None

          (f) Location of collateral in possession of another party for prior 2 years

Livonia Holdings, Inc. None

Livonia Holdings, Inc.

     Merger with: Livonia Operating, Inc. December 31, 2008

          1. (a) Exact Legal Name of prior entity: Livonia Operating, Inc.

               (b) Prior Legal Names — None

               (c) Corporate Changes — N/A

33

               (d) Other Names — None

               (e) Organizational Identification Number — 4125261

               (f) FEIN — N/A

          2. (a) Most Recent Location

Livonia Operating, Inc. 550 West Adams Street
Chicago, IL 60661 Cook Illinois

          (b) Location of books and records for prior 2 years

Livonia Operating, Inc. 550 West Adams Street
Chicago, IL 60661 Cook Illinois

          (c) Location of other collateral for prior 2 years

Livonia Operating, Inc. None

          (d) Jurisdiction of formation — Delaware

          (e) Other business locations for prior 2 years

Livonia Operating, Inc. None

          (f) Location of collateral in possession of another party for prior 2 years

Livonia Operating, Inc. None

34

Schedule 5
UCC Financing Statements

Schedule 6
Filing Locations

Grantor:	Jurisdiction of Filing Office:
USG Corporation	Delaware
United States Gypsum Company	Delaware
USG Interiors, Inc.	Delaware
L & W Supply Corporation	Delaware
California Wholesale Material Supply, LLC	Delaware
Livonia Building Materials, LLC	Michigan
River City Materials, Inc.	Arkansas
USG Foreign Investments, Ltd.	Delaware
Otsego Paper, Inc.	Delaware

Schedule 7
Collateral Deposit Accounts maintained by each Grantor, including the name and address of the
depositary institution, the type of account and the account number

	Name and Address of	Type of Account
	Depositary	(all accounts are		Related Lockbox
Name of Grantor	Institution	checking accounts)	Account Number	number, if any
US Gypsum Company	***		***	***
	***		***	***
			***
USG Interiors, Inc.	***		***	***
	***		***	***
			***
L & W Supply Corporation	***		***
			***
			***
			***
			***
			***
			***
	***		***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

	Name and Address of	Type of Account
	Depositary	(all accounts are		Related Lockbox
Name of Grantor	Institution	checking accounts)	Account Number	number, if any
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***	***
			***
			***
			***
			***
			***
			***
			***
			***
	***		***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
	***		***
			***
	***		***
			***	***
	***		***
			***

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

3

	Name and Address of	Type of Account
	Depositary	(all accounts are		Related Lockbox
Name of Grantor	Institution	checking accounts)	Account Number	number, if any
			***
	***		***
			***
			***
			***
			***
			***
	***		***	***
			***	***
			***
			***
			***	***
California	***		***
Wholesale Material Supply, LLC	***		***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
			***
	***		***
			***
			***
			***
			***	***
			***
River City	***		***
Materials, Inc.			***
			***
	***		***
			***
			***
L & W Supply	***		***
Corporation (formerly held by Livonia Holdings, Inc., a Delaware corporation which merged into L & W Supply Corporation)			*** *** *** *** *** *** *** *** ***

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

4

	Name and Address of	Type of Account
	Depositary	(all accounts are		Related Lockbox
Name of Grantor	Institution	checking accounts)	Account Number	number, if any
Livonia Building	***		***
Materials, LLC
Otsego Paper, Inc.	***

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

5

EXHIBIT H

[FORM OF]

REVOLVING NOTE

$[Amount] New York, New York

          FOR VALUE RECEIVED, the undersigned (the “Borrower”) hereby unconditionally promises to pay to the order of [LENDER NAME] or its registered assigns (the “Lender”), at the offices of JPMorgan Chase Bank, N.A. (“Administrative Agent”) at 270 Park Avenue, New York, NY 10017 or such other place as Administrative Agent shall have specified, in dollars and in immediately available funds, in accordance with Section 2.09(f) of the Credit Agreement (as defined below) on the Maturity Date (capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement), the principal amount of [ Amount in - -words ] dollars and 0/100 ($[Amount ]) or, if less, the then unpaid principal amount of all Revolving Loans made by the Lender to the Borrower pursuant to the Credit Agreement.

          The Borrower further unconditionally promises to pay interest on the unpaid principal amount of each Revolving Loan made by the Lender to the Borrower in like money at said office until paid at the rate or rates per annum, from the dates and payable on the dates set forth in the Credit Agreement.

          This revolving note (this “Note”) is one of the promissory notes referred to in Section 2.09(f) of the Second Amendment and Restated Credit Agreement dated as of January [ ], 2009 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among USG Corporation, a Delaware corporation, the Lenders from time to time party thereto (the “Lenders”), JPMorgan Chase Bank, N.A., as Administrative Agent, and [      ], as Syndication Agent, and is entitled to the benefits thereof and of the other Loan Documents.

          In case an Event of Default shall occur and be continuing, the principal of and accrued interest on this Note may be declared to be due and payable in the manner and with the effect provided in the Credit Agreement.

          The Borrower hereby waives presentment, demand, protest or notice of any kind in connection with this Note.

Exhibit H

          THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

USG CORPORATION
by
	Name:
	Title:

Exhibit H

2 

EX-10.3

Exhibit 10.3

GUARANTEE AGREEMENT

dated as of

January 7, 2009

among

USG CORPORATION,

THE SUBSIDIARIES OF USG CORPORATION
IDENTIFIED HEREIN

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

TABLE OF CONTENTS

ARTICLE I
Definitions
SECTION 1.01. Credit Agreement	1
SECTION 1.02. Other Defined Terms	1
ARTICLE II
Guarantee
SECTION 2.01. Guarantee	2
SECTION 2.02. Guarantee of Payment	2
SECTION 2.03. No Limitations	2
SECTION 2.04. Reinstatement	3
SECTION 2.05. Agreement To Pay; Subrogation	3
SECTION 2.06. Information	3
ARTICLE III
Indemnity, Subrogation and Subordination
SECTION 3.01. Indemnity and Subrogation	4
SECTION 3.02. Contribution and Subrogation	4
SECTION 3.03. Subordination	4
ARTICLE IV
Miscellaneous
SECTION 4.01. Notices	5
SECTION 4.02. Waivers; Amendment	5
SECTION 4.03. Administrative Agent’s Fees and Expenses; Indemnification	5
SECTION 4.04. Successors and Assigns	6
SECTION 4.05. Survival of Agreement	6
SECTION 4.06. Counterparts; Effectiveness; Several Agreement	6
SECTION 4.07. Severability	7
SECTION 4.08. Right of Set-Off	7
SECTION 4.09. Governing Law; Jurisdiction; Consent to Service of Process	7
SECTION 4.10. WAIVER OF JURY TRIAL	8
SECTION 4.11. Headings	8
SECTION 4.12. Guarantee Absolute	8
SECTION 4.13. Termination or Release	9
SECTION 4.14. Additional Subsidiaries	9

Schedules
Schedule I	Guarantors

Exhibits
Exhibit I	Form of Supplement

     GUARANTEE AGREEMENT dated as of January 7, 2009 (this “Agreement”), among USG CORPORATION, a Delaware corporation (the “Borrower”), each Subsidiary of the Borrower from time to time party hereto and JPMORGAN CHASE BANK, N.A., as Administrative Agent.

          Reference is made to the Second Amended and Restated Credit Agreement dated as of January 7, 2009 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and Goldman Sachs Credit Partners, L.P., as Syndication Agent. The Lenders have agreed to extend credit to the Borrower subject to the terms and conditions set forth in the Credit Agreement. The obligations of the Lenders to extend such credit are conditioned upon, among other things, the execution and delivery of this Agreement. The Subsidiaries party hereto are affiliates of the Borrower, will derive substantial benefits from the extension of credit to the Borrower pursuant to the Credit Agreement and are willing to execute and deliver this Agreement in order to induce the Lenders to extend such credit. Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

          SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this Agreement and not otherwise defined herein have the meanings specified in the Credit Agreement.

          (b) The rules of construction specified in Section 1.03 of the Credit Agreement also apply to this Agreement.

          SECTION 1.02. Other Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

          “Borrower” has the meaning assigned to such term in the preliminary statement of this Agreement.

          “Claiming Party” has the meaning assigned to such term in Section 3.02.

          “Contributing Party” has the meaning assigned to such term in Section 3.02.

          “Credit Agreement” has the meaning assigned to such term in the preliminary statement of this Agreement.

          “Guaranteed Parties” has the meaning assigned to the term “Secured Parties” in the Credit Agreement.

          “Guarantors” means (a) the Borrower, (b) the Subsidiaries identified on Schedule I hereto and (c) each other Subsidiary that becomes a party to this Agreement after the Restatement Effective Date, in each case except with respect to the Secured Obligations of such Person (other than the Obligations of such Person described in clause (c) of the definition of the term “Obligations”).

ARTICLE II

Guarantee

          SECTION 2.01. Guarantee. Each Guarantor unconditionally guarantees, jointly with the other Guarantors and severally, as a primary obligor and not merely as a surety, the due and punctual payment and performance of the Secured Obligations. Each of the Guarantors further agrees that the Secured Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any Secured Obligation. Each of the Guarantors waives presentment to, demand of payment from and protest to the Borrower or any other Loan Party of any of the Secured Obligations, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment.

          SECTION 2.02. Guarantee of Payment. Each of the Guarantors further agrees that its guarantee hereunder constitutes a guarantee of payment when due and not of collection, and waives any right to require that any resort be had by the Administrative Agent or any other Guaranteed Party to any security held for the payment of the Secured Obligations or to any balance of any deposit account or credit on the books of the Administrative Agent or any other Guaranteed Party in favor of the Borrower or any other Person.

          SECTION 2.03. No Limitations. (a) Except for termination of a Guarantor’s obligations hereunder as expressly provided in Section 4.13, the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Secured Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor hereunder shall not be discharged or impaired or otherwise affected by (i) the failure of the Administrative Agent or any other Guaranteed Party to assert any claim or demand or to enforce any right or remedy under the provisions of any Loan Document or otherwise; (ii) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, any Loan Document or any other agreement, including with respect to any other Guarantor under this Agreement; (iii) the release of any security, if any, held by the Administrative Agent or any other Guaranteed Party for the Secured Obligations or any of them; (iv) any default, failure or delay, wilful or otherwise, in the performance of the Secured Obligations; or (v) any other act or omission that may or might in any manner or to any extent vary the risk of any Guarantor or otherwise operate as a discharge of any

2

Guarantor as a matter of law or equity (other than the payment in full in cash of all the Secured Obligations).

          (b) To the fullest extent permitted by applicable law, each Guarantor waives any defense based on or arising out of any defense of the Borrower or any other Loan Party or the unenforceability of the Secured Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Borrower or any other Loan Party, other than the payment in full in cash of all the Secured Obligations. The Administrative Agent may, at its election, foreclose on any security held by it by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Secured Obligations, make any other accommodation with the Borrower or any other Loan Party or exercise any other right or remedy available to it against the Borrower or any other Loan Party, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Secured Obligations have been paid in full in cash. To the fullest extent permitted by applicable law, each Guarantor waives any defense arising out of any such election even though such election may operate, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against the Borrower or any other Loan Party, as the case may be, or any security.

          SECTION 2.04. Reinstatement. Each of the Guarantors agrees that its guarantee hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Secured Obligation is rescinded or must otherwise be restored by the Administrative Agent or any other Guaranteed Party upon the bankruptcy or reorganization of the Borrower, any other Loan Party or otherwise.

          SECTION 2.05. Agreement To Pay; Subrogation. In furtherance of the foregoing and not in limitation of any other right that the Administrative Agent or any other Guaranteed Party has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Borrower or any other Loan Party to pay any Secured Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the Administrative Agent for distribution to the applicable Guaranteed Parties in cash the amount of such unpaid Secured Obligation. Upon payment by any Guarantor of any sums to the Administrative Agent as provided above, all rights of such Guarantor against the Borrower or any other Loan Party arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subject to Article III.

          SECTION 2.06. Information. Each Guarantor assumes all responsibility for being and keeping itself informed of the Borrower’s and each other Loan Party’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Secured Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that none of the Administrative Agent or the other Guaranteed Parties will have any duty to advise such Guarantor of information known to it or any of them regarding such circumstances or risks.

3

ARTICLE III

Indemnity, Subrogation and Subordination

          SECTION 3.01. Indemnity and Subrogation. In addition to all such rights of indemnity and subrogation as the Guarantors may have under applicable law (but subject to Section 3.03), each Guarantor agrees that in the event a payment of a Secured Obligation of such Guarantor shall be made by any other Guarantor under this Agreement, such Guarantor shall indemnify such other Guarantor for the full amount of such payment and such other Guarantor shall be subrogated to the rights of the Person to whom such payment shall have been made to the extent of such payment.

          SECTION 3.02. Contribution and Subrogation. Each Guarantor (a “Contributing Party”) agrees (subject to Section 3.03) that, in the event a payment shall be made by any other Guarantor hereunder in respect of any Secured Obligation and such other Guarantor (the “Claiming Party”) shall not have been fully indemnified by the applicable Guarantor as provided in Section 3.01, the Contributing Party shall indemnify the Claiming Party in an amount equal to the amount of such payment multiplied by a fraction of which the numerator shall be the net worth of the Contributing Party on the date hereof (or, in the case of any Guarantor becoming a party hereto pursuant to Section 4.14, the date of the supplement hereto executed and delivered by such Guarantor) and the denominator shall be the aggregate net worth of all the Guarantors on the date hereof (or, in the case of any Guarantor becoming a party hereto pursuant to Section 4.14, the date of the supplement hereto executed and delivered by such Guarantor). Any Contributing Party making any payment to a Claiming Party pursuant to this Section 3.02 shall be subrogated to the rights of such Claiming Party under Section 3.01 to the extent of such payment.

          SECTION 3.03. Subordination. (a) Notwithstanding any provision of this Agreement to the contrary, all rights of the Guarantors under Sections 3.01 and 3.02 and all other rights of indemnity, contribution or subrogation under applicable law or otherwise shall be fully subordinated to the payment in full in cash of the Secured Obligations. No failure on the part of any Guarantor to make the payments required by Sections 3.01 and 3.02 (or any other payments required under applicable law or otherwise) shall in any respect limit the obligations and liabilities of any Guarantor with respect to its obligations hereunder, and each Guarantor shall remain liable for the full amount of the obligations of such Guarantor hereunder.

          (b) Each Guarantor hereby agrees that all Indebtedness owed by it to any other Subsidiary that is not a Loan Party shall be fully subordinated to the payment in full in cash of the Secured Obligations.

4

ARTICLE IV

Miscellaneous

          SECTION 4.01. Notices. All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Section 9.01 of the Credit Agreement. All communications and notices hereunder to any Guarantor shall be given to it in care of the Borrower as provided in Section 9.01 of the Credit Agreement.

          SECTION 4.02. Waivers; Amendment. (a) No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any Guarantor therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 4.02, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default at the time. No notice or demand on any Guarantor in any case shall entitle any Guarantor to any other or further notice or demand in similar or other circumstances.

          (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Guarantor or Guarantors with respect to which such waiver, amendment or modification is to apply, subject to any consent required in accordance with Section 9.02 of the Credit Agreement.

          SECTION 4.03. Administrative Agent’s Fees and Expenses; Indemnification. (a) The parties hereto agree that the Administrative Agent shall be entitled to reimbursement of its expenses incurred hereunder as provided in Section 9.03 of the Credit Agreement.

          (b) Without limitation of its indemnification obligations under the other Loan Documents, each Guarantor jointly and severally agrees to indemnify the Administrative Agent and the other Indemnitees (as defined in Section 9.03 of the Credit Agreement) against, and hold each Indemnitee harmless from, any and all out-of-pocket losses, claims, damages, liabilities and related reasonable expenses, including the reasonable fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of,

5

the execution, delivery or performance of this Agreement or any claim, litigation, investigation or proceeding relating to this Agreement or any instrument contemplated hereby, whether or not any Indemnitee is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or wilful misconduct of such Indemnitee.

          (c) Any such amounts payable as provided hereunder shall be additional Secured Obligations guaranteed hereby. The provisions of this Section 4.03 shall remain operative and in full force and effect regardless of the termination of this Agreement or any other Loan Document, the consummation of the transactions contemplated hereby, the repayment of any of the Secured Obligations, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document, or any investigation made by or on behalf of the Administrative Agent or any other Guaranteed Party. All amounts due under this Section 4.03 shall be payable not later than three Business Days after written demand therefor setting forth the basis for such claim in reasonable detail.

          SECTION 4.04. Successors and Assigns. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of any Guarantor or the Administrative Agent that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns.

          SECTION 4.05. Survival of Agreement. All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the Lenders and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any Lender or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended under the Credit Agreement, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under any Loan Document is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated.

          SECTION 4.06. Counterparts; Effectiveness; Several Agreement. This Agreement may be executed in counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract. Delivery of an executed signature page to this Agreement by facsimile or other electronic transmission shall be as effective as delivery of a manually signed counterpart of this Agreement. This Agreement shall become effective as to any Guarantor when a counterpart hereof executed on behalf of such Guarantor shall have been delivered to the Administrative Agent and a counterpart hereof shall have been executed on behalf of the Administrative

6

Agent, and thereafter shall be binding upon such Loan Party and the Administrative Agent and their respective permitted successors and assigns, and shall inure to the benefit of such Guarantor, the Administrative Agent and the other Guaranteed Parties and their respective successors and assigns, except that no Guarantor shall have the right to assign or transfer its rights or obligations hereunder or any interest herein (and any such assignment or transfer shall be void) except as expressly contemplated by this Agreement or the Credit Agreement. This Agreement shall be construed as a separate agreement with respect to each Guarantor and may be amended, modified, supplemented, waived or released with respect to any Guarantor without the approval of any other Guarantor and without affecting the obligations of any other Guarantor hereunder.

          SECTION 4.07. Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

          SECTION 4.08. Right of Set-Off. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of any Guarantor against any of and all the obligations of such Guarantor now or hereafter existing under this Agreement owed to such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of each Lender under this Section 4.08 are in addition to other rights and remedies (including other rights of set-off) which such Lender may have.

          SECTION 4.09. Governing Law; Jurisdiction; Consent to Service of Process. (a) This Agreement shall be construed in accordance with and governed by the law of the State of New York.

          (b) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Loan Document, 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 such New York State or, to the 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

7

enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

          (c) Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which 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 other Loan Document in any court referred to in paragraph (b) of this Section 4.09. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

          (d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 4.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

          SECTION 4.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 4.10.

          SECTION 4.11. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.

          SECTION 4.12. Guarantee Absolute. All rights of the Administrative Agent hereunder and all obligations of each Guarantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Credit Agreement, any other Loan Document, any agreement or instrument governing or evidencing any of the Secured Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement, any other Loan Document or any other agreement or instrument governing or evidencing any Secured Obligations, (c) any release or amendment or waiver of or consent under or departure from any guarantee guaranteeing all or any of the Secured Obligations, or (d) any other

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circumstance that might otherwise constitute a defense available to, or a discharge of, any Guarantor in respect of the Secured Obligations or this Agreement (other than the payment in full, in cash, of the Secured Obligations).

          SECTION 4.13. Termination or Release. (a) Subject to Section 2.04, this Agreement and the Guarantees made herein shall terminate when all the Obligations (as distinguished from the Secured Obligations) have been paid in full, in cash, and the Lenders have no further commitment to lend under the Credit Agreement, the LC Exposure has been reduced to zero and the Issuing Bank has no further obligations to issue Letters of Credit under the Credit Agreement.

          (b) A Guarantor shall automatically be released from its obligations hereunder upon the consummation of any transaction permitted by, or that would not otherwise result in a Default under, the Credit Agreement as a result of which such Guarantor ceases to be a Subsidiary, provided that the Required Lenders shall have consented to such transaction (to the extent required by the Credit Agreement) and the terms of such consent did not provide otherwise.

          (c) In connection with any termination or release pursuant to paragraph (a) or (b) of this Section 4.13, the Administrative Agent shall execute and deliver to any Guarantor, at such Guarantor’s expense, all documents that such Guarantor shall reasonably request to evidence such termination or release. Any execution and delivery of documents pursuant to this Section 4.13 shall be without recourse to or warranty by the Administrative Agent.

          SECTION 4.14. Additional Subsidiaries. Pursuant to the Credit Agreement, certain Domestic Material Subsidiaries that were not in existence or not Domestic Material Subsidiaries on the date of the Credit Agreement (as well as certain other Domestic Subsidiaries specified by the Borrower) are required to enter in this Agreement as a Guarantor upon becoming such a Domestic Material Subsidiary (or upon such designation). Upon execution and delivery by the Administrative Agent and a Subsidiary of an instrument in the form of Exhibit I hereto, such Subsidiary shall become a Guarantor hereunder with the same force and effect as if originally named as a Guarantor herein. The execution and delivery of any such instrument shall not require the consent of any other Guarantor hereunder. The rights and obligations of each Guarantor hereunder shall remain in full force and effect notwithstanding the addition of any new Guarantor as a party to this Agreement.

          SECTION 4.15. Existing Guarantee Agreement. Each Guarantor that was party to the Guarantee Agreement dated as of November 11, 2008 (the “Existing Guarantee Agreement”), among the Borrower, the Subsidiaries party thereto and the Administrative Agent, hereby consents to the termination of the Existing Guarantee Agreement in accordance with Section 3 of the Amendment and Restatement Agreement and acknowledges that this Agreement shall supersede the Existing Guarantee Agreement on and after the Restatement Effective Date.

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[Signature Pages Follow]

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          IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

USG CORPORATION,
by	/s/ Karen L. Leets
	Name:	Karen L. Leets
	Title:	Vice President & Treasurer

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EACH OF THE SUBSIDIARIES LISTED ON SCHEDULE I HERETO,
by	/s/ Karen L. Leets
	Name:	Karen L. Leets
	Title:	In the capacity listed on Schedule I corresponding to such Subsidiary

12

JPMORGAN CHASE BANK, N.A., as Administrative Agent,
by	/s/ Peter S. Predun
	Name:	Peter S. Predun
	Title:	Executive Director

13

Schedule I to the
Guarantee Agreement

GUARANTORS

	Title of Karen L. Leets with
Company	respect to such Company
L&W Supply Corporation	Vice President and Treasurer
United States Gypsum Company	Vice President and Treasurer
USG Foreign Investments, Ltd.	Vice President and Treasurer
USG Interiors, Inc.	Vice President and Treasurer
California Wholesale Material Supply, LLC	Vice President and Treasurer
Livonia Building Materials, LLC	Vice President and Treasurer of L & W Supply Corporation, the Sole Member of Livonia Building Materials, LLC.
Otsego Paper, Inc.	Vice President and Treasurer
River City Materials, Inc.	Vice President and Treasurer

Exhibit I to the
Guarantee Agreement

     SUPPLEMENT NO. __ dated as of _________, 20__ (this “Supplement”), to the Guarantee Agreement dated as of January 7, 2009 (as amended, supplemented or otherwise modified from time to time, the “Guarantee Agreement”), among USG CORPORATION, a Delaware corporation (the “Borrower”), the Subsidiaries of the Borrower from time to time party thereto (together with the Borrower, the “Guarantors”) and JPMORGAN CHASE BANK, N.A., as Administrative Agent (in such capacity, the “Administrative Agent”).

          A. Reference is made to the Second Amended and Restated Credit Agreement dated as of January 7, 2009 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, the lenders from time to time party thereto, the Administrative Agent, and Goldman Sachs Credit Partners, L.P., as Syndication Agent.

          B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement and the Guarantee Agreement referred to therein.

          C. The Guarantors have entered into the Guarantee Agreement in order to induce the Lenders to make Loans and the Issuing Bank to issue Letters of Credit. Section 4.14 of the Guarantee Agreement provides that additional Subsidiaries may become Guarantors under the Guarantee Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned Subsidiary (the “New Subsidiary”) is executing this Supplement in accordance with the requirements of the Credit Agreement to become a Guarantor under the Guarantee Agreement in order to induce the Lenders to make additional Loans and the Issuing Bank to issue additional Letters of Credit and as consideration for Loans previously made and Letters of Credit previously issued.

          Accordingly, the Administrative Agent and the New Subsidiary agree as follows:

          SECTION 1. In accordance with Section 4.14 of the Guarantee Agreement, the New Subsidiary by its signature below becomes a Guarantor under the Guarantee Agreement with the same force and effect as if originally named therein as a Guarantor and the New Subsidiary hereby (a) agrees to all the terms and provisions of the Guarantee Agreement applicable to it as a Guarantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Guarantor thereunder are true and correct on and as of the date hereof. Each reference to a “Guarantor” in the Guarantee Agreement shall be deemed to include the New Subsidiary. The Guarantee Agreement is hereby incorporated herein by reference.

          SECTION 2. The New Subsidiary represents and warrants to the Administrative Agent and the other Guaranteed Parties that this Supplement has been

duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

          SECTION 3. This Supplement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Administrative Agent shall have received a counterpart of this Supplement that bears the signature of the New Subsidiary and the Administrative Agent has executed a counterpart hereof. Delivery of an executed signature page to this Supplement by facsimile or other electronic transmission shall be as effective as delivery of a manually signed counterpart of this Supplement.

          SECTION 4. Except as expressly supplemented hereby, the Guarantee Agreement shall remain in full force and effect.

          SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

          SECTION 6. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Guarantee Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

          SECTION 7. All communications and notices hereunder shall be in writing and given as provided in Section 4.01 of the Guarantee Agreement.

          SECTION 8. The New Subsidiary agrees to reimburse the Administrative Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Administrative Agent.

[Signature Pages Follow]

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          IN WITNESS WHEREOF, the New Subsidiary and the Administrative Agent have duly executed this Supplement to the Guarantee Agreement as of the day and year first above written.

[NAME OF NEW SUBSIDIARY],
by
	Name:
	Title:

JPMORGAN CHASE BANK, N.A., as Administrative Agent,
by
	Name:
	Title:

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EX-10.4

Exhibit 10.4

CONFIDENTIAL TREATMENT REQUESTED BY USG CORPORATION — CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION

EXECUTION COPY

PLEDGE AND SECURITY AGREEMENT

dated as of January 7, 2009

among

USG CORPORATION,

as Borrower,

The Other Grantors Party Hereto

and

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent

TABLE OF CONTENTS

ARTICLE I
DEFINITIONS
SECTION 1.01. Terms Defined in Credit Agreement	1
SECTION 1.02. Terms Defined in UCC	1
SECTION 1.03. Definitions of Certain Terms Used Herein	1
ARTICLE II
GRANT OF SECURITY INTEREST
SECTION 2.01. Security Interest	4
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Title, Perfection and Priority	5
SECTION 3.02. Type and Jurisdiction of Organization, Organizational and Identification Numbers	5
SECTION 3.03. Principal Location	5
SECTION 3.04. Collateral Locations	5
SECTION 3.05. Deposit Accounts	6
SECTION 3.06. Exact Names	6
SECTION 3.07. Perfection Certificate	6
SECTION 3.08. Validity of Security Interest	6
SECTION 3.09. Security Interest as Security Only	6
SECTION 3.10. Accounts	6
SECTION 3.11. Inventory	7
SECTION 3.12. Intellectual Property	7
SECTION 3.13. Filing Requirements	8
SECTION 3.14. No Financing Statements, Security Agreements	8
ARTICLE IV
COVENANTS
SECTION 4.01. General	8
SECTION 4.02. Accounts	10
SECTION 4.03. Inventory	11
SECTION 4.04. Intellectual Property	11
SECTION 4.05. Collateral Access Agreements	11
SECTION 4.06. Change of Name or Location; Change of Fiscal Year	12

ARTICLE V
REMEDIES
SECTION 5.01. Remedies	13
SECTION 5.02. Grantor’s Obligations Upon an Event of Default	14
SECTION 5.03. Grant of Intellectual Property License	14
ARTICLE VI
ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY
SECTION 6.01. Account Verification	15
SECTION 6.02. Authorization for Secured Party to Take Certain Action	15
ARTICLE VII
COLLECTION AND APPLICATION OF COLLATERAL PROCEEDS; DEPOSIT ACCOUNTS
SECTION 7.01. Collection of Accounts	17
SECTION 7.02. Covenant Regarding New Deposit Accounts	18
SECTION 7.03. Cash Dominion Periods; Application of Proceeds	18
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.01. Waivers	20
SECTION 8.02. Limitation on Administrative Agent’s and Lenders’ Duty with Respect to the Collateral	20
SECTION 8.03. Compromises and Collection of Collateral	21
SECTION 8.04. Secured Party Performance of Debtor Obligations	21
SECTION 8.05. Specific Performance of Certain Covenants	22
SECTION 8.06. Dispositions Not Authorized	22
SECTION 8.07. No Waiver; Amendments; Cumulative Remedies	22
SECTION 8.08. Limitation by Law; Severability of Provisions	22
SECTION 8.09. Reinstatement	23
SECTION 8.10. Benefit of Agreement	23
SECTION 8.11. Survival of Representations	23
SECTION 8.12. Headings	23
SECTION 8.13. Termination	23
SECTION 8.14. Additional Subsidiaries	24
SECTION 8.15. Right of Setoff	24
SECTION 8.16. Lien Absolute	25
SECTION 8.17. Release	25
SECTION 8.18. Entire Agreement	26

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SECTION 8.19. Governing Law; Jurisdiction; Consent to Service of Process	26
SECTION 8.20. WAIVER OF JURY TRIAL	26
SECTION 8.21. Taxes and Expenses; Indemnity	27
SECTION 8.22. Counterparts	28
ARTICLE IX
NOTICES
SECTION 9.01. Sending Notices	28
ARTICLE X
THE ADMINISTRATIVE AGENT

Schedule 1	Subsidiary Grantors
Exhibit A	Information for each Grantor
Exhibit B	Collateral Deposit Accounts
Exhibit C	Financing Statement Filing Offices
Exhibit D	Form of New Subsidiary Supplement

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PLEDGE AND SECURITY AGREEMENT

          THIS PLEDGE AND SECURITY AGREEMENT (this “Agreement”) is entered into as of January 7, 2009, among USG Corporation, a Delaware corporation (the “Borrower”), each Subsidiary identified on Schedule I hereto and each other Subsidiary that becomes a party to this Agreement after the Restatement Effective Date pursuant to Section 8.14 hereof (each such Subsidiary and the Borrower, a “Grantor” and, collectively, the “Grantors”) and JPMorgan Chase Bank, N.A., in its capacity as administrative agent (the “Administrative Agent”) for the lenders party to the Credit Agreement referred to below.

PRELIMINARY STATEMENT

          Reference is made to the Second Amended and Restated Credit Agreement dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, the Lenders from time to time party thereto, the Administrative Agent and Goldman Sachs Credit Partners, L.P., as syndication agent. Each Grantor is entering into this Agreement in order to induce the Lenders to enter into and extend credit to the Borrower under the Credit Agreement and to secure the Secured Obligations.

          ACCORDINGLY, the Grantors and the Administrative Agent, on behalf of the Lenders, hereby agree as follows:

ARTICLE I

DEFINITIONS

          SECTION 1.01. Terms Defined in Credit Agreement. All capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement.

          SECTION 1.02. Terms Defined in UCC. Terms defined in the UCC which are not otherwise defined in this Agreement are used herein as defined in the UCC.

          SECTION 1.03. Definitions of Certain Terms Used Herein. As used in this Agreement, in addition to the terms defined in the preamble hereto and in the Preliminary Statement, the following terms shall have the following meanings:

          “Accounts” means all rights to payment, whether or not earned by performance, for the sale or lease of goods or the rendition of services, in each case in the ordinary course of the Grantors’ business, whether such rights constitute or are evidenced by any Account (as defined in Article 9 of the UCC), Chattel Paper, Instrument or General Intangible.

          “Article” means a numbered article of this Agreement, unless another document is specifically referenced.

          “Cash Dominion Period” means any of (a) a period commencing on the date on which Excess Availability shall have been less than the Threshold Amount for five (5) consecutive Business Days and ending on the first date thereafter on which Excess Availability shall have been equal to or greater than the Threshold Amount for thirty (30) consecutive calendar days and (b) a period during which an Event of Default has occurred and is continuing. For purposes of clarity, if, during the continuance of a Cash Dominion Period triggered by an event described in either clause (a) or (b) of this definition, an event described in clause (a) or (b) of this definition shall occur, then such Cash Dominion Period shall be deemed not to have terminated until such time as a Cash Dominion Period would no longer exist under both clauses (a) and (b) of this definition.

          “Cash Dominion Period Notice” shall have the meaning set forth in Section 7.03(a).

          “Cash Dominion Termination Notice” shall have the meaning set forth in Section 7.03(a).

          “Cash Dominion Termination Period” shall have the meaning set forth in Section 7.03(a).

          “Collateral” shall have the meaning set forth in Article II.

          “Collateral Access Agreement” means any landlord waiver or other agreement (as such waiver or agreement may be amended, restated or otherwise modified from time to time), in form and substance reasonably satisfactory to the Administrative Agent, pursuant to which a mortgagee or lessor of real property on which Collateral is stored or otherwise located, or a bailee, consignee or similar Person with respect to any warehouse, processor or converter facility or other location where Collateral is stored or located, (a) acknowledges the Lien of the Administrative Agent, on behalf of the Secured Parties, in respect of such Collateral, (b) waives or, in the reasonable discretion of the Administrative Agent, subordinates on terms reasonably acceptable to the Administrative Agent any Lien or other claim that such Person may assert against such Collateral and (c) where applicable, grants to the Administrative Agent reasonable access to and use of such real property or facility, as the case may be, following the occurrence and during the continuance of an Event of Default, to assemble, complete and sell such Collateral.

          “Collateral Access Agreement Deadline” means the date that is 90 days (or such longer period as the Administrative Agent, in its sole discretion, may agree) after the Restatement Effective Date.

          “Collateral Deposit Account” means, with respect to each Grantor, any lockbox account maintained by such Grantor to which any cash, checks or other similar payments constituting payments made in respect of Accounts and/or proceeds of Inventory are or are to be remitted and all Deposit Accounts maintained by such Grantor into which any such payments are directed to be deposited, as well as any other Deposit

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Accounts maintained by such Grantor into which any cash, checks or other similar payments constituting payments made in respect of Accounts and/or proceeds of Inventory are or are to be deposited.

          “Collateral Deposit Account Bank” means each bank or other financial institution at which any Grantor maintains a Collateral Deposit Account.

          “Collateral Report” means any certificate (including any Borrowing Base Certificate), report or other document delivered by any Grantor to the Administrative Agent relating to the Collateral pursuant to any Loan Document.

          “Collection Account” shall have the meaning set forth in Section 7.03(a).

          “Control” shall have the meaning set forth in Section 9-104 or Section 9-105, as applicable, of Article 9 of the UCC.

          “Control Agreement Deadline” shall have the meaning set forth in Section 7.01(a).

          “Copyrights” means, with respect to any Person, all of such Person’s right, title and interest in and to the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, and copyright applications; (b) all renewals of any of the foregoing; (c) all licenses of the foregoing; and (d) the rights corresponding to the use or sublicense of any of the foregoing throughout the world.

          “Deposit Account Control Agreement” means an agreement, in form and substance reasonably satisfactory to the Administrative Agent, among any Grantor, a Collateral Deposit Account Bank and the Administrative Agent with respect to Control of the Collateral Deposit Accounts listed therein and the disposition of funds on deposit in such Collateral Deposit Accounts.

          “Exhibit” refers to a specific exhibit to this Agreement (as amended or supplemented from time to time in accordance with this Agreement or any Supplement), unless another document is specifically referenced.

          “Financing Statement” means, with respect to any Grantor, each UCC financing statement naming the Administrative Agent as secured party and such Grantor as debtor and describing the Collateral in a manner consistent with the requirements set forth in Section 4.01(b).

          “Intellectual Property” means the collective reference to all intellectual and similar property of every kind and nature, including inventions, designs, Patents, Copyrights, Trademarks, trade secrets, domain names, confidential or proprietary technical and business information, know how or other data or information, software and databases and all embodiments or fixations thereof and related documentation, registrations and franchises, and all additions, improvements and accessions to, and books and records describing or used in connection with, any of the foregoing.

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          “Inventory” shall have the meaning set forth in Article 9 of the UCC.

          “Patents” means, with respect to any Person, all of such Person’s right, title and interest in and to: (a) any and all patents and patent applications; (b) all inventions and improvements described and claimed therein; (c) all reissues, divisions, continuations, renewals, extensions and continuations-in-part thereof; (d) all licenses of the foregoing; and (e) all rights corresponding to the use or sublicense of any of the foregoing throughout the world.

          “Proceeds” shall have the meaning set forth in Article 9 of the UCC.

          “Section” means a numbered section of this Agreement, unless another document is specifically referenced.

          “Security Interest” has the meaning assigned to such term in Section 2.01.

          “Specified L&W Grantors” means, collectively, each of L & W Supply Corporation, a Delaware corporation, California Wholesale Material Supply, LLC, a Delaware limited liability company, Livonia Building Materials, LLC, a Michigan limited liability company, and River City Materials, Inc., an Arkansas corporation, in each case for so long as such entity is required to be a Grantor hereunder.

          “Supplement” shall have the meaning set forth in Section 8.14.

          “Trademarks” means, with respect to any Person, all of such Person’s right, title and interest in and to the following: (a) all trademarks (including service marks), trade names, trade dress and trade styles and the registrations and applications for registration thereof; (b) all licenses of the foregoing, whether as licensee or licensor; (c) all renewals of the foregoing; and (d) all rights corresponding to the use or sublicense of any of the foregoing throughout the world.

          The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.

ARTICLE II

GRANT OF SECURITY INTEREST

          SECTION 2.01. Security Interest. As security for the payment or performance, as the case may be, in full of the Secured Obligations, each Grantor hereby pledges, assigns and grants to the Administrative Agent, its successors and permitted assigns, on behalf of and for the benefit of the Secured Parties, a security interest in all of such Grantor’s right, title and interest in (a) Accounts, and Proceeds in respect thereof, whether now owned by or owing to, or hereafter acquired by or arising in favor of, such Grantor (including under any trade name or derivations thereof), and regardless of where located, (b) Inventory, and Proceeds in respect thereof, whether now owned by, or hereafter acquired by, such Grantor (including under any trade name or derivations thereof), and regardless of where located, and (c) all Collateral Deposit Accounts of such

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Grantor (all of the assets referenced in the immediately preceding clauses (a), (b) and (c), and all such right, title and interest therein, are collectively referred to as the “Collateral”; the security interest in the Collateral granted pursuant to this Section 2.01 is referred to as the “Security Interest”).

ARTICLE III

REPRESENTATIONS AND WARRANTIES

          Each Grantor represents, warrants and covenants to and with the Secured Parties that:

          SECTION 3.01. Title, Perfection and Priority. Such Grantor has good and valid rights in or the power to transfer the Collateral and title to the Collateral with respect to which it has purported to grant the Security Interest hereunder, free and clear of all Liens except for Liens permitted under Section 4.01(g), and has full power and authority to grant to the Administrative Agent, for the benefit of the Secured Parties, the Security Interest pursuant hereto and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other Person other than any consent or approval that has been obtained, except such consents or approvals the failure of which to have been obtained will not impair the Security Interest. When a properly completed Financing Statement has been filed in the appropriate office against such Grantor in the applicable location listed on Exhibit C (or, in the case of any Grantor that becomes a party hereto after the Restatement Effective Date, in the jurisdiction of organization of such Grantor specified in Schedule I to the Supplement for such Grantor) and any applicable filing fees or taxes are paid in connection with such filing, the Administrative Agent will have a fully perfected first priority security interest in that Collateral of such Grantor in which a security interest may be perfected by filing a UCC financing statement, subject only to Liens permitted under Section 4.01(g).

          SECTION 3.02. Type and Jurisdiction of Organization, Organizational and Identification Numbers. The type of entity of such Grantor, its state of organization, the organizational number issued to it by its state of organization and its federal employer identification number are set forth on Exhibit A.

          SECTION 3.03. Principal Location. The location of such Grantor’s place of business (if it has only one) or its chief executive office (if it has more than one place of business) is disclosed in Exhibit A. In addition, such Grantor has no other places of business where books and records with respect to the Collateral are maintained, except those set forth in Exhibit A.

          SECTION 3.04. Collateral Locations. All of such Grantor’s locations where Collateral is located are listed on Exhibit A. All of said locations are owned by such Grantor except for locations (a) which are leased by the Grantor as lessee and designated in Exhibit A and (b) at which Inventory is held in a public warehouse or is otherwise held by a bailee or on consignment as designated in Exhibit A.

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          SECTION 3.05. Deposit Accounts. Exhibit B sets forth a complete list of the Collateral Deposit Accounts of such Grantor, including, with respect to each such Collateral Deposit Account, each depositary institution’s name and location and such Grantor’s account number.

          SECTION 3.06. Exact Names. Such Grantor’s name, as set forth on Exhibit A, is the exact name as it appears in such Grantor’s organizational documents, as amended, as filed with such Grantor’s jurisdiction of organization. Such Grantor has not, during the past two years prior to the Restatement Effective Date, been known by or used any other corporate or fictitious name, or been a party to any merger or consolidation, or been a party to any acquisition, in each case except as otherwise specified in the Perfection Certificate or any certificate delivered to the Administrative Agent pursuant to Section 4.01(f).

          SECTION 3.07. Perfection Certificate. The Perfection Certificate has been duly prepared, completed and executed by the Borrower and the information set forth therein with respect to each Grantor is correct and complete as of the Restatement Effective Date, and the Financing Statements (including any amendments thereto) prepared by the Administrative Agent based upon the information provided to the Administrative Agent in the Perfection Certificate for filing in each governmental, municipal or other office specified in Section 2(d) to the Perfection Certificate (or specified by notice from the Borrower to the Administrative Agent after the Restatement Effective Date in the case of filings, recordings or registrations required by Section 5.10 of the Credit Agreement or Sections 4.01 and 4.06 hereof) are all the filings, recordings and registrations that are necessary to perfect a security interest in favor of the Administrative Agent (for the benefit of the Secured Parties) in respect of all the Collateral in which the Security Interest may be perfected by filing, recording or registering in the U.S. (or any political subdivision thereof), and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary in any such jurisdiction, except as provided under applicable law with respect to the filing of continuation statements.

          SECTION 3.08. Validity of Security Interest. The Security Interest constitutes a legal and valid security interest in all the Collateral securing the payment and performance of the Secured Obligations.

          SECTION 3.09. Security Interest as Security Only. The Security Interest granted by such Grantor is granted as security only and shall not subject the Administrative Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of any Grantor with respect to or arising out of the Collateral.

          SECTION 3.10. Accounts. (a) The names of the Account Debtors, amounts owing, due dates and other information with respect to such Grantor’s Accounts are and will be complete, true and correct in all material respects in the records of such Grantor relating thereto and in all invoices and Collateral Reports with respect thereto furnished to the Administrative Agent pursuant to the Loan Documents from time to time. As of the time when each Account arises, such Grantor shall be deemed to have

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represented and warranted that such Account and all records relating thereto are genuine and in all respects what they purport to be.

          (b) In addition, with respect to all of its Accounts, except as disclosed in the most recent Collateral Report, (i) the amounts shown on all invoices, statements and Collateral Reports with respect thereto are actually and absolutely owing to such Grantor as indicated thereon and are not in any way contingent (other than with respect to discounts, rebates, billing errors, setoffs, counterclaims and other Dilution Factors); (ii) no payments have been or shall be made thereon except payments delivered or to be delivered to a Collateral Deposit Account as required pursuant to Section 7.01; and (iii) to such Grantor’s knowledge, all Account Debtors relating to such Accounts have the capacity to contract.

          SECTION 3.11. Inventory. With respect to any of its Inventory represented as being Eligible Inventory on the most recent Collateral Report, (a) as of the last day of the period covered by such Collateral Report, such Inventory (other than Inventory in transit) is located at one of such Grantor’s locations set forth on Exhibit A and such Inventory (other than Inventory in transit and other than Inventory that has subsequently been sold, transferred or otherwise disposed of by such Grantor (other than to another Grantor) in the ordinary course of business) shall not be stored at any other location except as permitted by Section 4.01(j), (b) other than any Inventory that has subsequently been sold, transferred or otherwise disposed of by such Grantor (other than to another Grantor) in the ordinary course of business, such Grantor has good and merchantable title to such Inventory and such Inventory is not subject to any Lien, except for Liens permitted by Section 4.01(g), (c) except as specifically disclosed in such Collateral Report (or in any notification provided to the Administrative Agent subsequent to the last day of the period covered by such Collateral Report in accordance with Section 5.01(i) of the Credit Agreement), such Inventory (except for de minimis portions of such Inventory) is Eligible Inventory of good and merchantable quality, free from any defects, (d) such Inventory is not subject to any licensing, patent, royalty, trademark, trade name or copyright agreements with any third parties which would require any consent of any third party upon sale or disposition of that Inventory or the payment of any monies to any third party upon such sale or other disposition (other than any such consent that has already been obtained or any such payment obligation that has already been waived), (e) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunder and (f) the preparation for sale, marketing or sale of such Inventory by the Administrative Agent after the occurrence and during the continuance of an Event of Default shall not require the consent of any Person (except as required by applicable law) and shall not constitute a breach or default under any contract or agreement to which such Grantor is a party or to which such Inventory is subject.

          SECTION 3.12. Intellectual Property. Such Grantor owns, or is licensed to use, all Patents, Trademarks, Copyrights or other Intellectual Property material to its business, and the use thereof by such Grantor does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, and no such

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Intellectual Property is subject to any Lien or other restriction (other than any such Lien or other restriction with respect to which a waiver or release has been obtained) that would materially interfere with the exercise of the Administrative Agent’s rights with respect to such Intellectual Property to prepare for sale, market and sell any Eligible Inventory under Section 5.03.

          SECTION 3.13. Filing Requirements. None of the Collateral owned by it is of a type for which security interests or liens may be perfected by filing under any Federal statute. Notwithstanding anything in any Loan Document to the contrary, the Administrative Agent agrees that the Grantors shall not be required to make filings under the Assignment of Claims Act of 1940, 31 U.S.C. §3727 and 41 U.S.C. § 15.

          SECTION 3.14. No Financing Statements, Security Agreements. No financing statement or security agreement describing all or any portion of the Collateral which has not lapsed or been terminated naming such Grantor as debtor has been filed or is of record in any jurisdiction except (a) for the Financing Statements and (b) as permitted under Section 4.01(g).

ARTICLE IV

COVENANTS

          From the date of this Agreement, and thereafter until this Agreement is terminated, each Grantor agrees that:

          SECTION 4.01. General. (a) Collateral Records. Such Grantor will maintain books and records with respect to the Collateral owned by it in accordance Section 5.07 of the Credit Agreement, and furnish to the Administrative Agent, with sufficient copies for each of the Lenders, such reports relating to such Collateral as the Administrative Agent may from time to time reasonably request.

          (b) Authorization to File Financing Statements; Ratification. Such Grantor hereby authorizes the Administrative Agent to file, and if requested will deliver to the Administrative Agent, all Financing Statements and other documents and take such other actions as may from time to time be reasonably requested by the Administrative Agent in order to maintain, subject to any Liens permitted under Section 4.01(g), a first priority perfected security interest in and, if applicable and contemplated by the terms hereof, Control of, the Collateral owned by such Grantor. Any Financing Statement (or amendment thereto) filed by the Administrative Agent shall (i) indicate such Grantor’s Collateral by any description that reasonably approximates the description of such Collateral contained in this Agreement and (ii) contain any other information required by part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of such Financing Statement (or amendment thereto). Such Grantor agrees to furnish any such information to the Administrative Agent promptly upon request. Such Grantor also ratifies its authorization for the Administrative Agent to have filed any initial Financing Statements if filed prior to the Restatement Effective Date.

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          (c) Further Assurances. Such Grantor agrees to take any and all actions that it shall reasonably deem necessary to defend title to the Collateral against all persons and to defend the Security Interest of the Administrative Agent in its Collateral and the priority thereof against any Lien not expressly permitted under Section 4.01(g).

          (d) Disposition of Collateral. Such Grantor will not sell, lease or otherwise dispose of the Collateral owned by it except for dispositions not otherwise prohibited by Section 6.03 of the Credit Agreement.

          (e) Maintaining Perfection of Security Interest. Each Grantor agrees, at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions as the Administrative Agent may from time to time reasonably request to preserve, protect and perfect the Security Interest and the rights and remedies created hereby, including the payment of any fees and taxes required in connection with the execution and delivery of this Agreement, the granting of the Security Interest and the filing of any Financing Statements or other documents in connection herewith or therewith. If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any promissory note or other instrument (other than any promissory note or other instrument in an aggregate principal amount of less than $500,000 owed to the applicable Grantor by any Person that is not the Borrower or any Subsidiary, provided that the aggregate principal amount of promissory notes that may be excluded from the delivery requirements of this paragraph (e) may not exceed $2,000,000 at any one time), such note or instrument shall be immediately pledged and delivered to the Administrative Agent, duly endorsed in a manner satisfactory to the Administrative Agent.

          (f) Annual Confirmation of Perfection Certificate. Each year, at the time of delivery of annual financial statements with respect to the preceding fiscal year pursuant to Section 5.01(a) of the Credit Agreement, the Borrower shall deliver to the Administrative Agent a certificate executed by a Financial Officer (i) setting forth any changes to the information required pursuant to the Perfection Certificate, or confirming that there has been no change in such information, in each case since the date of the Perfection Certificate or the date of the most recent certificate delivered pursuant to this Section 4.01(f) and (ii) certifying that all initial UCC financing statements or other appropriate filings, recordings or registrations, including all refilings, rerecordings, reregistrations and amendments to the initial UCC financing statements, containing a description of the Collateral have been filed of record in each governmental, municipal or other appropriate office in the jurisdiction identified pursuant to Section 4.06 to the extent necessary to protect and perfect the Security Interest as of the date of such certificate.

          (g) Liens. Such Grantor will not create, incur, or suffer to exist any Lien on the Collateral owned by it except Liens permitted under clauses (i) through (iv), (vi) and (xi) of Section 6.02 of the Credit Agreement.

          (h) Other Financing Statements. Such Grantor will not authorize the filing of any financing statement naming it as debtor covering all or any portion of the Collateral owned by it, except with respect to any Lien permitted under Section 4.01(g).

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Such Grantor acknowledges that it is not authorized to file (i) any financing statement with respect to the Collateral, except with respect to any Lien permitted under Section 4.01(g), without providing prior written notice to the Administrative Agent or (ii) any amendment or termination statement with respect to any Financing Statement filed in accordance with the terms hereof without the prior written consent of the Administrative Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of the UCC.

          (i) Compliance with Terms. Such Grantor shall observe, perform and comply with all obligations in respect of the Collateral owned by it (in each case, in a manner consistent with past business practices of such Grantor), unless the failure to observe, perform or comply with such obligations would not adversely affect the validity, perfection and priority of the Security Interest.

          (j) Locations. Such Grantor will not maintain any Collateral owned by it at any location other than those locations listed on Exhibit A (or any other location with respect to which advance written notice has been provided as contemplated by Section 4.05).

          SECTION 4.02. Accounts. (a) Certain Agreements on Accounts. No Grantor will make or agree to make any discount, credit, rebate or other reduction in the original amount owing on an Account or accept in satisfaction of an Account less than the original amount thereof, except that, for so long as no Event of Default is continuing, such Grantor may reduce the amount owing on Accounts arising from the sale of Inventory in accordance with its past business practices.

          (b) Collection of Accounts. Except as otherwise provided in this Agreement, each Grantor will, consistent with its past business practices, collect and enforce, at no expense to any Secured Party, all amounts due or hereafter due to such Grantor under the Accounts owned by it.

          (c) Security Interest in Property to Satisfy Account Debt. If at any time any Grantor shall take a security interest in any property of an Account Debtor or any other Person to secure payment and performance of an Account, such Grantor shall promptly assign such security interest to the Administrative Agent. Such assignment need not be filed of public record unless necessary to continue the perfected status of the security interest against creditors of and transferees from the Account Debtor or other Person granting the security interest.

          (d) Delivery of Invoices. Such Grantor will deliver to the Administrative Agent, immediately upon its request after the occurrence and during the continuation of an Event of Default, duplicate invoices with respect to each Account owned by it bearing such language of assignment as the Administrative Agent shall specify.

          (e) Disclosure of Material Reductions in Accounts. Such Grantor, promptly upon obtaining knowledge of any event, circumstance or change that has occurred since the most recent date on which a Borrowing Base Certificate was required to be delivered pursuant to Section 5.01(e) of the Credit Agreement that would materially

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reduce the aggregate amount of Eligible Accounts or result in a material portion of the Eligible Accounts ceasing to be Eligible Accounts, shall cause the Borrower to promptly disclose such fact to the Administrative Agent in writing.

          SECTION 4.03. Inventory. (a) Maintenance of Goods. Such Grantor will maintain, preserve, protect and keep its Inventory in a manner consistent with its past business practices.

          (b) Returned Inventory. If an Account Debtor returns any Inventory to such Grantor when no Event of Default exists, then such Grantor shall promptly determine the reason for such return and, if reasonably deemed appropriate by such Grantor, shall issue a credit memorandum to the Account Debtor in the appropriate amount and in a manner consistent with its past business practices. Such Grantor shall promptly report to the Administrative Agent any return of Inventory involving an amount in excess of $2,000,000. Each such report shall indicate each applicable Account Debtor’s stated reasons for the returns and the locations and condition of the returned Inventory. In the event any Account Debtor returns Inventory to such Grantor when an Event of Default exists, such Grantor, upon the request of the Administrative Agent, shall: (i) hold the returned Inventory in trust for the Administrative Agent; (ii) segregate all returned Inventory from all of its other property; (iii) dispose of the returned Inventory solely according to the Administrative Agent’s written instructions; and (iv) not issue any credits or allowances with respect thereto without the Administrative Agent’s prior written consent. All returned Inventory shall be subject to the Administrative Agent’s Liens thereon. Whenever any Inventory is returned, the related Account shall be deemed not to be an Eligible Account to the extent of the amount owing by the Account Debtor with respect to such returned Inventory.

          (c) Inventory Count; Perpetual Inventory System. Such Grantor will conduct cycle counts of its Inventory in a manner consistent with past business practices and reasonably acceptable to such Grantor’s auditors. Upon the request of the Administrative Agent in connection with any field examination conducted in accordance with Section 5.07(b) of the Credit Agreement, such Grantor, at its own expense, shall deliver to the Administrative Agent the results of each physical verification which such Grantor has made, or has caused any other Person to make on its behalf, of all or any portion of its Inventory. Such Grantor will maintain a perpetual inventory reporting system at all times.

          SECTION 4.04. Intellectual Property. Such Grantor will use commercially reasonable efforts to secure all consents, waivers and approvals necessary or appropriate to ensure the ability of the Administrative Agent to fully exercise the rights granted to it in Section 5.03.

          SECTION 4.05. Collateral Access Agreements. Such Grantor shall use commercially reasonable efforts to obtain a Collateral Access Agreement from the lessor of each leased property, mortgagee of each owned property and bailee, consignee or similar Person with respect to any warehouse, processor or converter facility or other location, in each case where Collateral is or is to be stored or located as of the

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Restatement Effective Date or at any time thereafter, provided that (a) no Grantor shall be required to obtain a Collateral Access Agreement with respect to any location at which the Inventory on-hand has a book value of less than $100,000 and (b) in accordance with Section 5.11(b) of the Credit Agreement, no Collateral Access Agreement shall be required to be in effect prior to the Collateral Access Agreement Deadline. For purposes of clarity, it is understood and agreed that any Grantor’s failure, after having used commercially reasonable efforts, to obtain a Collateral Access Agreement with respect to any such location where Collateral is stored or located shall not constitute an Event of Default. With respect to any such location where Inventory is stored or located as of the Restatement Effective Date or at any time thereafter, if the Administrative Agent has not received a Collateral Access Agreement with respect to such location, the Borrower’s Eligible Inventory at such location shall be subject to such Reserves as may be established by the Administrative Agent in accordance with the terms of the Credit Agreement. Such Grantor shall provide to the Administrative Agent reasonable (but in no event less than three Business Days’) advance written notice of (i) any arrangement or agreement entered into by such Grantor to lease or mortgage real property or any warehouse or similar location at which Collateral is to be stored or located, unless a Collateral Access Agreement that would cover such Collateral is in effect with respect to such location and (ii) any arrangement or agreement to ship or otherwise transfer any Collateral to any mortgaged or leased real property, or to any warehouse, processor or converter facility or other location, in each case unless a Collateral Access Agreement that would cover such Collateral is in effect with respect to such location, and such Grantor shall provide to the Administrative Agent prompt written notice of the termination of any such existing arrangement or agreement with respect to any location at which Collateral is stored or located at the time of such termination. Not later than the last day of the calendar quarter during which any arrangement, agreement or termination referenced in the immediately preceding sentence is established or occurs, the Borrower shall deliver to the Administrative Agent a supplement to Exhibit A, setting forth the information with respect to the locations applicable to any such new arrangement or agreement required therein or indicating the termination of any such arrangement or agreement, as the case may be. Such Grantor shall timely and fully pay and perform its obligations under all leases and other agreements with respect to each location where any Collateral is or may be stored or located.

          SECTION 4.06. Change of Name or Location; Change of Fiscal Year. Such Grantor shall not (a) change its name as it appears in official filings in the state of its incorporation or organization, (b) change its chief executive office, principal place of business or corporate offices, or the location of its records concerning the Collateral as set forth in the Security Agreement, (c) change the type of entity that it is, (d) change its organization identification number, if any, issued by its state of incorporation or other organization or (e) change its state of incorporation or organization, in each case, unless the Administrative Agent shall have received at least ten days prior written notice of such change and such Grantor (or the Administrative Agent on behalf of such Grantor) shall have taken all action reasonably requested by the Administrative Agent to continue the validity, perfection and priority of any Liens in favor of the Administrative Agent, on behalf of the Secured Parties, in any Collateral, provided that any new jurisdiction of organization shall be in the U.S., any State thereof or the District of Columbia. In

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connection with any such change permitted under this Section 4.06, Exhibit A hereto shall be deemed to be amended to reflect such change (effective as of the date of such change).

ARTICLE V

REMEDIES

          SECTION 5.01. Remedies. (a) Upon the occurrence, and during the continuance, of an Event of Default, the Administrative Agent may exercise any or all of the following rights and remedies:

          (i) those rights and remedies provided in this Agreement, the Credit Agreement or any other Loan Document, provided that this Section 5.01(a) shall not be understood to limit any rights or remedies available to the Secured Parties prior to an Event of Default;

          (ii) those rights and remedies available to a secured party under the UCC (whether or not the UCC applies to the affected Collateral) or under any other applicable law (including, without limitation, any law governing the exercise of a bank’s right of setoff or bankers’ lien) when a debtor is in default under a security agreement;

          (iii) institute a Cash Dominion Period as per the terms of Section 7.03; and

          (iv) without notice (except as specifically provided in Section 8.01 or elsewhere herein), demand or advertisement of any kind to any Grantor or any other Person, enter the premises of any Grantor where any Collateral is located (through self-help and without judicial process) to collect, receive, assemble, process, appropriate, sell, lease, assign, grant an option or options to purchase or otherwise dispose of, deliver or realize upon, the Collateral or any part thereof in one or more parcels at public or private sale or sales (which sales may be adjourned or continued from time to time with or without notice and may take place at any Grantor’s premises or elsewhere), for cash, on credit or for future delivery without assumption of any credit risk, and upon such other terms as the Administrative Agent may deem commercially reasonable.

          (b) The Administrative Agent, on behalf of the Secured Parties, may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and such compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

          (c) The Administrative Agent shall have the right upon any such public sale or sales and, to the extent permitted by law, upon any such private sale or sales, to purchase for the benefit of the Secured Parties, the whole or any part of the Collateral so sold, free of any right of equity redemption, which equity redemption the Grantor hereby expressly releases.

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          (d) Until the Administrative Agent is able to effect a sale, lease, or other disposition of Collateral, the Administrative Agent shall have the right to hold or use Collateral, or any part thereof, to the extent that it deems appropriate for the purpose of preserving Collateral or its value or for any other purpose deemed appropriate by the Administrative Agent. The Administrative Agent may, if it so elects, seek the appointment of a receiver or keeper to enforce any of the Administrative Agent’s remedies (for the benefit of the Secured Parties) with respect to such appointment without prior notice or hearing as to such appointment.

          (e) Notwithstanding the foregoing, no Secured Party shall be required to (i) make any demand upon, or pursue or exhaust any of their rights or remedies against, any Grantor, any other obligor, guarantor, pledgor or any other Person with respect to the payment of the Secured Obligations or to pursue or exhaust any of their rights or remedies with respect to any Collateral therefor or any direct or indirect guarantee thereof, (ii) marshal the Collateral or any guarantee of the Secured Obligations or resort to the Collateral or any such guarantee in any particular order or (iii) effect a public sale of any Collateral.

          SECTION 5.02. Grantor’s Obligations Upon an Event of Default. Without limiting the foregoing or any other inspection rights the Administrative Agent may have under the Loan Documents, upon the request of the Administrative Agent after the occurrence and during the continuance of an Event of Default, each Grantor will:

          (a) assemble and make available to the Administrative Agent all books and records relating to the Collateral at any place or places specified by the Administrative Agent, whether at a Grantor’s premises or elsewhere;

          (b) permit the Administrative Agent, by the Administrative Agent’s representatives and agents, to enter, occupy and use any premises where all or any part of the Collateral, or the books and records relating thereto, or both, are located, to take possession of and/or remove all or any part of the Collateral or make copies of the books and records relating thereto, or both, and to conduct sales of the Collateral in accordance with the terms hereof, any applicable Collateral Access Agreements and applicable law, without any obligation to pay the Grantor for such use and occupancy; and

          (c) at its own expense, cause the independent certified public accountants then engaged by each Grantor to prepare and deliver to the Administrative Agent, promptly upon the Administrative Agent’s request, the following reports with respect to the Accounts of such Grantor: (i) a reconciliation of all such Accounts; (ii) an aging of all such Accounts; (iii) trial balances; and (iv) a test verification of all such Accounts.

          SECTION 5.03. Grant of Intellectual Property License. Solely for the purpose of enabling, and solely to the extent necessary to enable, the Administrative Agent to exercise the rights and remedies to prepare for sale, market and sell Inventory under this Article V at such time as the Administrative Agent shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby (a) grants to the Administrative Agent, for the benefit of the Secured Parties, an irrevocable, nonexclusive license

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(exercisable without payment of royalty or other compensation to any Grantor) to use, license or sublicense any Intellectual Property now owned or hereafter acquired by such Grantor, and wherever the same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof and (b) irrevocably agrees that the Administrative Agent may sell any of such Grantor’s Inventory directly to any person, and, in connection with any such sale or other enforcement of the Administrative Agent’s rights under this Agreement, may sell Inventory which bears any Trademark owned by or licensed to such Grantor and any Inventory that is covered by any Copyright owned by or licensed to such Grantor, and the Administrative Agent may finish any work in process using any Patent (or other Intellectual Property) owned by or licensed to such Grantor and affix any appropriate Trademark owned by or licensed to such Grantor and sell such Inventory as provided herein. The use of such license by the Administrative Agent may be exercised, at the option of the Administrative Agent, only upon the occurrence and during the continuance of an Event of Default, provided that any license, sublicense or other transaction entered into by the Administrative Agent in accordance herewith shall be binding upon the Grantors notwithstanding any subsequent cure of such Event of Default. All actions taken by the Administrative Agent pursuant to this Article V, as well as the Administrative Agent’s use of any trade secrets or other Intellectual Property pursuant to this Agreement, shall be subject to the confidentiality restrictions set forth in Section 9.12 of the Credit Agreement.

ARTICLE VI

ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY

          SECTION 6.01. Account Verification. The Administrative Agent may at any time, in the name of the applicable Grantor or, after the occurrence, and during the continuance, of an Event of Default, in the Administrative Agent’s own name or in the name of a nominee of the Administrative Agent, communicate (by mail, telephone, facsimile or otherwise) with the Account Debtors of any such Grantor to verify with such Account Debtors, to the Administrative Agent’s reasonable satisfaction, any information relating to the existence, amount, terms of, and any other material matter relating to, the Accounts of such Account Debtors.

          SECTION 6.02. Authorization for Secured Party to Take Certain Action. (a) Each Grantor hereby appoints the Administrative Agent the attorney-in-fact of such Grantor for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that the Administrative Agent may reasonably deem necessary or advisable to accomplish the purposes hereof, which appointment is irrevocable and coupled with an interest. Without limiting the generality of the foregoing, the Administrative Agent shall have the right with full power of substitution either in the name of such Grantor or, after the occurrence, and during the continuance, of an Event of Default, in the Administrative Agent’s name, to (i) file Financing Statements necessary or desirable in the Administrative Agent’s sole discretion to perfect and to maintain the perfection and priority of the Administrative Agent’s security interest in the

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Collateral, (ii) endorse and collect any cash proceeds of the Collateral of such Grantor, (iii) file a carbon, photographic or other reproduction of this Agreement or any Financing Statement as a financing statement and to file any other financing statement or amendment of a financing statement (which does not add new collateral or add a debtor) in such offices as the Administrative Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the Security Interest, (iv) apply the proceeds of any Collateral of such Grantor received by the Administrative Agent to the Secured Obligations as provided in Section 2.09(b) or Section 2.17(b) of the Credit Agreement, as applicable, (v) discharge past due taxes, assessments, charges, fees or Liens on the Collateral (except for such Liens as are specifically permitted under Section 4.01(g)), (vi) contact the Account Debtors of such Grantor for any reason, (vii) demand payment or enforce payment of the Accounts in the name of the Administrative Agent or such Grantor, (viii) endorse any and all checks, drafts and other instruments for the payment of money relating to the Accounts, (ix) sign such Grantor’s name on any invoice or bill of lading relating to the Accounts, drafts against any Account Debtor or assignments and verifications of Accounts, (x) exercise all of such Grantor’s rights and remedies with respect to the collection of the Accounts and any other Collateral, (xi) settle, adjust, compromise, extend or renew the Accounts or any legal proceedings brought to collect Accounts, (xii) prepare, file and sign such Grantor’s name on a proof of claim in bankruptcy or similar document against any Account Debtor of such Grantor, (xiii) prepare, file and sign such Grantor’s name on any notice of Lien, assignment or satisfaction of Lien or similar document in connection with the Accounts, (xiv) change the address for delivery of mail relating to the Accounts of such Grantor to such address as the Administrative Agent may designate and to receive, open and dispose of all such mail addressed to such Grantor, (xv) use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of the Collateral and (xvi) do all other acts and things necessary to carry out the purposes of this Agreement, as fully and completely as though the Administrative Agent were the absolute owner of the Collateral for all purposes, provided that (A) nothing herein contained shall be construed as requiring or obligating the Administrative Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Administrative Agent, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby and such Grantor agrees to reimburse the Administrative Agent on demand for any payment made or any expense incurred by the Administrative Agent in connection with any of the foregoing and (B) this authorization shall not relieve such Grantor of any of its obligations under this Agreement or under the Credit Agreement. The Administrative Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or wilful misconduct. Notwithstanding the foregoing, if the Administrative Agent or a Secured Party determines (after being given notice of such) that any portion of a payment from an Account Debtor received by it constitutes the excess portion of a joint remittance from such Account Debtor (which such portion was not owed to a Grantor but paid to the joint order of a Grantor and a non-Affiliated

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contractor or sub-contractor in respect of an Account), the Administrative Agent or other Secured Party, as applicable, shall promptly remit such excess portion of the payment to the Grantors.

          (b) All acts of said attorney or designee are hereby ratified and approved. The powers conferred on the Administrative Agent, for the benefit of the Secured Parties, under this Section 6.02 are solely to protect the Administrative Agent’s interests in the Collateral and shall not impose any duty upon the Administrative Agent or any other Secured Party to exercise any such powers. The Administrative Agent agrees that, except for the powers granted in Sections 6.02(a)(i), (a)(iii) or (a)(v), it shall not exercise any power or authority granted to it unless an Event of Default has occurred and is continuing, provided, however, that the Administrative Agent may exercise the powers granted in Sections 6.02(a)(ii), (a)(iv) and (a)(viii) at any time during the continuance of a Cash Dominion Period.

ARTICLE VII

COLLECTION AND APPLICATION OF COLLATERAL PROCEEDS; DEPOSIT ACCOUNTS

          SECTION 7.01. Collection of Accounts. (a) Each Grantor shall execute and deliver to the Administrative Agent (no later than the date (the “Control Agreement Deadline”) specified in, or determined in accordance with, Section 5.11(a) of the Credit Agreement) Deposit Account Control Agreements for each Collateral Deposit Account maintained by such Grantor as of the Restatement Effective Date. After the Restatement Effective Date, each Grantor will comply with the terms of Section 7.02.

          (b) Within 45 days after the Restatement Effective Date, each Grantor shall direct all of its Account Debtors to forward payments directly to one or more of the Collateral Deposit Accounts of such Grantor; provided, however, that with respect to the Account Debtors of the Specified L&W Grantors, the Specified L&W Grantors shall not be required to so direct such Account Debtors (and, accordingly, shall not be deemed to have breached this Section 7.01(b)) so long as the Specified L&W Grantors each deposit any cash, checks or other similar payments constituting payments made with respect to any Account of such Account Debtors into a Collateral Deposit Account in accordance with the last sentence of this Section 7.01(b). If any Grantor (other than a Specified L&W Grantor) should refuse or neglect to notify any Account Debtor to forward payments with respect to such Account Debtor’s Accounts directly to a Collateral Deposit Account following its receipt of a written request to do so from the Administrative Agent, the Administrative Agent shall, notwithstanding the language set forth in Section 6.02(b), be entitled to make such notification directly to Account Debtor. If notwithstanding the foregoing instructions, any Grantor receives any cash, checks or other similar payments constituting payments made with respect to any Account, such Grantor shall receive such cash, checks or other similar payments as the Administrative Agent’s trustee and shall promptly (but in no event later than two Business Days after receipt thereof) deposit all such cash, checks or other similar payments into a Collateral Deposit Account.

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          SECTION 7.02. Covenant Regarding New Deposit Accounts. (a) No Grantor may open a Collateral Deposit Account unless the bank or financial institution at which such Grantor seeks to open such Collateral Deposit Account has entered into a Deposit Account Control Agreement in order to give the Administrative Agent Control of such Collateral Deposit Account, provided that (a) no such Deposit Account Control Agreement will be required to be effective prior to the Control Agreement Deadline and (b) after the Control Agreement Deadline, the Administrative Agent may, in its discretion, with respect to the Collateral Deposit Accounts of any Collateral Deposit Account Bank that is not subject to a Deposit Account Control Agreement, (i) defer delivery of a Deposit Account Control Agreement with respect to such Collateral Deposit Accounts and (ii) require such Grantor to replace such Collateral Deposit Accounts with one or more new Collateral Deposit Accounts opened and maintained with a bank or financial institution that is subject to an existing Deposit Account Control Agreement (it being understood and agreed that, prior to the opening of such new Collateral Deposit Accounts referenced in the immediately preceding clause (ii) (but only after the Control Agreement Deadline), the Administrative Agent shall be entitled to establish a Reserve with respect to those Collateral Deposit Account referenced in the immediately preceding clause (i) for which a Deposit Account Control Agreement has not yet been executed and delivered).

          (b) Promptly following a Grantor’s opening of any new Collateral Deposit Account in accordance with this Section 7.02 or such Grantor’s closing of a Collateral Deposit Account, but in each case no later than the end of the calendar quarter during which such Collateral Deposit Account is opened or closed, as the case may be, the Borrower shall deliver to the Administrative Agent a supplement to Exhibit B, setting forth the applicable information with respect to such new Collateral Deposit Account required therein or indicating the closing of such Collateral Deposit Account, as the case may be.

          (c) In the case that any Grantor opens an additional Collateral Deposit Account with a Collateral Deposit Account Bank that is already party to a Deposit Account Control Agreement or such Grantor transfers or otherwise assigns any Collateral Deposit Account subject to an existing Deposit Account Control Agreement to a different Grantor party to such Deposit Account Control Agreement, the Borrower shall promptly notify the Administrative Agent thereof and the Administrative Agent shall have the authority to enter into, on behalf of itself and the applicable Grantor or Grantors, an amendment, supplement or other modification to such Deposit Account Control Agreement to reflect the addition or change in ownership, as the case may be, of such Collateral Deposit Account for the purpose of ensuring that such Collateral Deposit Account is subject to the control arrangement evidenced thereby.

          (d) In the case of Collateral Deposit Accounts maintained with any Lender, the terms of each Deposit Account Control Agreement entered into with such Lender shall be subject to the provisions of the Credit Agreement regarding setoff.

          SECTION 7.03. Cash Dominion Periods; Application of Proceeds. (a) Pursuant to each Deposit Account Control Agreement entered into pursuant to

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Section 7.01 or 7.02, the Administrative Agent shall have Control of the relevant Collateral Deposit Account. The applicable Grantor may operate and transact business through its Collateral Deposit Accounts in its normal fashion at all times (except as provided below), including making withdrawals (whether via wire transfer, ACH transfer, check or otherwise), provided that (i) upon the commencement and during the continuation of any Cash Dominion Period, the Administrative Agent may (A) send a notice (a “Cash Dominion Period Notice”) to each Collateral Deposit Account Bank instructing such Collateral Deposit Bank to cease complying with any instructions originated by the applicable Grantor regarding the disposition of funds in the related Collateral Deposit Account and to begin complying with instructions originated by the Administrative Agent directing the sweep of available funds from the applicable Collateral Deposit Account on a daily basis into a collection account maintained by the Borrower with the Administrative Agent (such account, the “Collection Account”), without further consent of the applicable Grantor and subject to the terms of the applicable Deposit Account Control Agreement and (B) apply (and allocate) the funds in the Collection Account in accordance with Section 2.09(b) or Section 2.17(b) of the Credit Agreement, as applicable, and (ii) except as otherwise provided below, upon the termination of each Cash Dominion Period (the timing of such termination to be determined by reference to the definition of the term “Cash Dominion Period” set forth in Section 1.03), the Administrative Agent shall send a notice to each Collateral Deposit Account Bank (a “Cash Dominion Termination Notice”) terminating such Cash Dominion Period and commencing a period (each such period, a “Cash Dominion Termination Period”) in which each Grantor may again transact business through each Collateral Deposit Account in its normal fashion, including making withdrawals from each Collateral Deposit Account (whether via wire transfer, ACH transfer, check or otherwise); provided, however, that following (x) the commencement of the first Cash Dominion Period occurring during the second Cash Dominion Termination Period, (y) the termination of the Revolving Commitments as contemplated by Article VII of the Credit Agreement or (z) a declaration, as contemplated by Article VII of the Credit Agreement, that the outstanding Loans have become due and payable, the Administrative Agent shall not be required to give any further Cash Dominion Termination Notices and shall be entitled to permanently maintain such Cash Dominion Period and exercise the rights attendant thereto as set forth above.

          (b) All amounts deposited in the Collection Account pursuant to this Section 7.03 shall be deemed received by the Administrative Agent for purposes of Section 2.17(b) of the Credit Agreement, provided that, notwithstanding the foregoing, if the Administrative Agent or a Secured Party determines (after being given notice of such) that any portion of a payment from an Account Debtor received by it constitutes the excess portion of a joint remittance from such Account Debtor (which such portion was not owed to a Grantor but paid to the joint order of a Grantor and a non-Affiliated contractor or sub-contractor in respect of an Account), the Administrative Agent or other Secured Party, as applicable, shall promptly remit such excess portion of the payment to the Grantors. The balance, if any, in the Collection Account after all the Secured Obligations on any day during a Cash Dominion Period have been satisfied shall be deposited by the Administrative Agent into the Borrower’s general operating account as instructed by the Borrower. If, at the time any Cash Dominion Termination Period

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commences, the Collection Account has a balance, such balance shall be deposited by the Administrative Agent into the Borrower’s general operating account as instructed by the Borrower.

          (c) To the extent that the terms of any Deposit Account Control Agreement are inconsistent with the terms of this Section 7.03 with respect to the rights of the Administrative Agent and the Grantors, the terms of this Section 7.03 shall control.

ARTICLE VIII

GENERAL PROVISIONS

          SECTION 8.01. Waivers. Each Grantor hereby waives notice of the time and place of any public sale or the time after which any private sale or other disposition of all or any part of the Collateral may be made. To the extent such notice may not be waived under applicable law, any notice made shall be deemed reasonable if sent to the Grantors, addressed as set forth in Article IX, at least ten (10) days prior to (a) the date of any such public sale or (b) the time after which any such private sale or other disposition may be made. To the maximum extent permitted by applicable law, each Grantor waives all claims, damages and demands against any Secured Party arising out of the repossession, retention or sale of the Collateral, except as may arise solely out of the gross negligence or wilful misconduct of such Secured Party as finally determined by a court of competent jurisdiction. To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against any Secured Party, any valuation, stay, appraisal, extension, moratorium, redemption or similar laws and any and all rights or defenses it may have as a surety now or hereafter existing which, but for this provision, might be applicable to the sale of any Collateral made under the judgment, order or decree of any court, or privately under the power of sale conferred by this Agreement, or otherwise. Except as otherwise specifically provided herein, each Grantor hereby waives presentment, demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind in connection with this Agreement or any Collateral.

          SECTION 8.02. Limitation on Administrative Agent’s and Lenders’ Duty with Respect to the Collateral. Except as imposed under applicable law, no Secured Party shall have any other duty as to any Collateral in its possession or control or in the possession or control of any agent or nominee of such Secured Party, or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. To the extent that applicable law imposes duties on the Administrative Agent to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is commercially reasonable for the Administrative Agent (a) to fail to incur expenses deemed significant by the Administrative Agent to prepare Collateral for disposition or otherwise to transform raw material or work in process into finished goods or other finished products for disposition, (b) to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (c) to fail to exercise collection remedies against Account Debtors or other Persons obligated on Collateral or to remove

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Liens on or any adverse claims against Collateral, (d) to exercise collection remedies against Account Debtors and other Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (e) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (f) to contact other Persons, whether or not in the same business as such Grantor, for expressions of interest in acquiring all or any portion of such Collateral, (g) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature, (h) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets, (i) to dispose of assets in wholesale rather than retail markets, (j) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (k) to purchase insurance or credit enhancements to insure the Administrative Agent against risks of loss, collection or disposition of Collateral or to provide to the Administrative Agent a guaranteed return from the collection or disposition of Collateral, or (l) to the extent deemed appropriate by the Administrative Agent, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Administrative Agent in the collection or disposition of any of the Collateral. Each Grantor acknowledges that the purpose of this Section 8.02 is to provide non-exhaustive indications of what actions or omissions by the Administrative Agent would be commercially reasonable in the Administrative Agent’s exercise of remedies against the Collateral and that other actions or omissions by the Administrative Agent shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 8.02. Without limitation upon the foregoing, nothing contained in this Section 8.02 shall be construed to grant any rights to any Grantor or to impose any duties on the Administrative Agent that would not have been granted or imposed by this Agreement or by applicable law in the absence of this Section 8.02.

          SECTION 8.03. Compromises and Collection of Collateral. The Grantors and the Administrative Agent recognize that setoffs, counterclaims, defenses and other claims may be asserted by obligors with respect to certain of the Accounts, that certain of the Accounts may be or become uncollectible in whole or in part and that the expense and probability of success in litigating a disputed Account may exceed the amount that reasonably may be expected to be recovered with respect to an Account. In view of the foregoing, each Grantor agrees that the Administrative Agent may at any time and from time to time, if an Event of Default has occurred and is continuing, and subject to applicable law, compromise with the obligor on any Account, accept in full payment of any Account such amount as the Administrative Agent in its sole discretion shall determine or abandon any Account, and any such action by the Administrative Agent shall be commercially reasonable so long as the Administrative Agent acts in good faith based on information known to it at the time it takes any such action.

          SECTION 8.04. Secured Party Performance of Debtor Obligations. Without having any obligation to do so, and, except after the occurrence and during the continuance of an Event of Default, after having made a request of a Grantor to do so and the Grantor having not complied with such request to do so as promptly as practicable after receipt of such request, the Administrative Agent may perform or pay any obligation

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which any Grantor has agreed to perform or pay in this Agreement and the Grantors shall reimburse the Administrative Agent for any amounts paid by the Administrative Agent pursuant to this Section 8.04. The Grantors’ obligation to reimburse the Administrative Agent pursuant to the preceding sentence shall be a Secured Obligation payable on demand.

          SECTION 8.05. Specific Performance of Certain Covenants. Each Grantor acknowledges and agrees that a breach of any of the covenants contained in Sections 4.01(d), 4.01(e), 4.01(g), 4.05, 4.06, 5.02, or 8.07 or in Article VII will cause irreparable injury to the Secured Parties, that the Secured Parties have no adequate remedy at law in respect of such breaches and therefore agrees, without limiting the right of the Secured Parties to seek and obtain specific performance of other obligations of the Grantors contained in this Agreement, that the covenants of the Grantors contained in the Sections referred to in this Section 8.05 shall be specifically enforceable against the Grantors.

          SECTION 8.06. Dispositions Not Authorized. No Grantor is authorized to sell or otherwise dispose of the Collateral except as set forth in Section 4.01(d) and notwithstanding any course of dealing between any Grantor and the Administrative Agent or other conduct of the Administrative Agent, no authorization to sell or otherwise dispose of the Collateral (except as set forth in Section 4.01(d)) shall be binding upon the Secured Parties unless such authorization is in writing signed by the Administrative Agent.

          SECTION 8.07. No Waiver; Amendments; Cumulative Remedies. No failure, delay or omission of any Secured Party to exercise any right or remedy granted under this Agreement shall impair such right or remedy or be construed to be a waiver of any Default or an acquiescence therein, and any single or partial exercise of any such right or remedy shall not preclude any other or further exercise thereof or the exercise of any other right or remedy. No waiver, amendment or other variation of the terms, conditions or provisions of this Agreement whatsoever shall be valid unless in writing signed by the Administrative Agent with the concurrence or at the direction of the Lenders required under Section 9.02 of the Credit Agreement and then only to the extent in such writing specifically set forth. All rights and remedies contained in this Agreement or by law afforded shall be cumulative and all shall be available to the Secured Parties until the Secured Obligations have been paid and performed in full.

          SECTION 8.08. Limitation by Law; Severability of Provisions. All rights, remedies and powers provided in this Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions of this Agreement are intended to be subject to all applicable mandatory provisions of law that may be controlling and to be limited to the extent necessary so that they shall not render this Agreement invalid, unenforceable, illegal or not entitled to be recorded or registered, in whole or in part. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the

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invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

          SECTION 8.09. Reinstatement. This Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against any Grantor for liquidation or reorganization, should any Grantor become insolvent or make an assignment for the benefit of any creditor or creditors or should a receiver or trustee be appointed for all or any significant part of any Grantor’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Secured Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Secured Obligations, whether as a “voidable preference”, “fraudulent conveyance” or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

          SECTION 8.10. Benefit of Agreement. The terms and provisions of this Agreement shall be binding upon and inure to the benefit of the Grantors, the Secured Parties and their respective successors and assigns (including all persons who become bound as a debtor to this Agreement), except that no Grantor shall have the right to assign its rights or delegate its obligations under this Agreement or any interest herein, without the prior written consent of the Administrative Agent. No sales of participations, assignments, transfers or other dispositions of any agreement governing the Secured Obligations or any portion thereof or interest therein shall in any manner impair the Lien granted to the Administrative Agent, for the benefit of the Secured Parties.

          SECTION 8.11. Survival of Representations. All representations and warranties of the Grantors contained in this Agreement shall survive the execution and delivery of this Agreement.

          SECTION 8.12. Headings. The title of and section headings in this Agreement are for convenience of reference only, and shall not govern the interpretation of any of the terms and provisions of this Agreement.

          SECTION 8.13. Termination. (a) Subject to Section 8.09, this Agreement shall continue in effect (notwithstanding the fact that from time to time there may be no Secured Obligations outstanding) until (i) the Credit Agreement has terminated pursuant to its express terms and (ii) all of the Obligations (as distinguished from the Secured Obligations) have been paid and performed in full and no commitments of the Administrative Agent or the Lenders which would give rise to any Obligations are outstanding.

          (b) A Grantor shall automatically be released from its obligations hereunder and the Security Interest in the Collateral of such Grantor shall be automatically released upon the consummation of any transaction permitted by, or that would not otherwise result in a Default under, the Credit Agreement as a result of which

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such Grantor ceases to be a wholly-owned Subsidiary, provided that the Required Lenders shall have consented to such transaction (to the extent required by the Credit Agreement) and the terms of such consent did not provide otherwise.

          (c) Upon any sale or other transfer by any Grantor of any Collateral that is permitted under the Credit Agreement (other than a sale or other transfer to a Grantor), or upon the effectiveness of any written consent to the release of the Security Interest granted hereby in any Collateral pursuant to Section 9.02 of the Credit Agreement, the Security Interest in such Collateral shall be automatically released.

          (d) In connection with any termination or release pursuant to paragraph (a), (b) or (c) of this Section 8.13, the Administrative Agent shall (i) execute and deliver to any Grantor, at such Grantor’s expense, all documents that such Grantor shall reasonably request to evidence such termination or release and (ii) with respect to any Collateral Deposit Account of any Grantor that is so released from its obligations hereunder, deliver to each Collateral Deposit Account Bank that has entered into a Deposit Account Control Agreement with respect to the Collateral Deposit Accounts of such Grantor a written notice of termination of each such Deposit Account Control Agreement in accordance with the terms of such Deposit Account Control Agreement. The Administrative Agent hereby consents to the applicable Grantor filing all UCC termination statements corresponding to any Collateral that is so released if the Administrative Agent has failed to file such UCC termination statements within 5 Business Days of notice of such release delivered by such Grantor to the Administrative Agent. Any execution and delivery of documents pursuant to this Section 8.13 shall be without recourse to or warranty by the Administrative Agent.

          SECTION 8.14. Additional Subsidiaries. Pursuant to the Credit Agreement, certain Domestic Material Subsidiaries that were not in existence or not Domestic Material Subsidiaries as of the Restatement Effective Date (as well as certain other Domestic Subsidiaries specified by the Borrower) are required to enter into this Agreement as a Grantor upon becoming such a Domestic Material Subsidiary (or upon such designation). Upon execution and delivery by the Administrative Agent and a Subsidiary of an instrument in the form of Exhibit D hereto (each such instrument, a “Supplement”), such Subsidiary shall become a Grantor hereunder with the same force and effect as if originally named as a Grantor herein. The execution and delivery of any such Supplement shall not require the consent of any other Grantor hereunder. The rights and obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor as a party to this Agreement.

          SECTION 8.15. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender 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 apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender or any such Affiliate to or for the credit or the account of any Grantor against any of and all obligations of such Grantor now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such

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Lender shall have made any demand hereunder and although such obligations may be unmatured or are owed to a branch or office of such Lender different from the branch or office holding such deposit or obligation. The applicable Lender shall notify the Borrower and the Administrative Agent of such set-off or application, provided that any failure to give or any delay in giving such notice shall not affect the validity of any such set-off or application under this Section 8.15. The rights of each Lender under this Section 8.15 are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

          SECTION 8.16. Lien Absolute. All rights of the Administrative Agent hereunder, and all obligations of each Grantor hereunder, shall be absolute and unconditional irrespective of:

          (a) any lack of validity or enforceability of the Credit Agreement, any other Loan Document or any other agreement or instrument governing or evidencing any Secured Obligations;

          (b) any change in the time, manner or place of payment of, or in any other term of, all or any part of the Secured Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement, any other Loan Document or any other agreement or instrument governing or evidencing any Secured Obligations;

          (c) any exchange, release or non-perfection of any other Collateral, or any release or amendment or waiver of or consent to departure from any guaranty, for all or any of the Secured Obligations;

          (d) the insolvency of any Person; or

          (e) any other circumstance which might otherwise constitute a defense available to, or a discharge of, any Grantor.

          SECTION 8.17. Release. Each Grantor consents and agrees that the Administrative Agent may at any time, or from time to time, in its discretion:

          (a) as contemplated by the Credit Agreement and in conformance therewith, renew, extend or change the time of payment, and/or the manner, place or terms of payment, of all or any part of the Secured Obligations; and

          (b) exchange, release and/or surrender all or any of the Collateral or any part thereof, by whomsoever deposited, which is now or may hereafter be held by the Administrative Agent in connection with all or any of the Secured Obligations; all in such manner and upon such terms as the Administrative Agent may deem proper, and without notice to or further assent from any Grantor, it being hereby agreed that each Grantor shall be and remain bound upon this Agreement, irrespective of the value or condition of any of the Collateral, and notwithstanding any such change, exchange, settlement, compromise, surrender, release, renewal or extension, and notwithstanding also that the Secured Obligations may, at any time, exceed the aggregate principal amount thereof set

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forth in the Credit Agreement, or any other agreement governing any Secured Obligations.

          SECTION 8.18. Entire Agreement. This Agreement and the other Loan Documents embody the entire agreement and understanding between the Grantors and the Administrative Agent relating to the Collateral and supersede all prior agreements and understandings between the Grantors and the Administrative Agent relating to the Collateral.

          SECTION 8.19. Governing Law; Jurisdiction; Consent to Service of Process.

          (a) This Agreement shall be construed in accordance with and governed by the law of the State of New York.

          (b) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Loan Document, 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 such New York State or, to the 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.

          (c) Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which 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 other Loan Document in any court referred to in paragraph (b) of this Section 8.19. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

          (d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

          SECTION 8.20. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON

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CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.20.

          SECTION 8.21. Taxes and Expenses; Indemnity. (a) Any taxes (including income taxes but excluding any Excluded Taxes) payable or ruled payable by Federal or State authority in respect of this Agreement shall be paid by the Grantors, together with interest and penalties, if any. The parties hereto agree that the Administrative Agent and each of the other Secured Parties shall be entitled to reimbursement of its reasonable expenses incurred hereunder as provided in and subject to the limitations set forth in Section 9.03(a) of the Credit Agreement.

          (b) Without limitation of any of its indemnification obligations under the other Loan Documents, each Grantor shall, jointly and severally with each other Grantor, indemnify each Indemnitee against, and hold each Indemnitee harmless from, any and all out-of-pocket losses, claims, damages, liabilities and related reasonable expenses, including the reasonable fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee by any third party or by any Grantor arising out of, in connection with, or as a result of (i) the execution and delivery of this Agreement or any other agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or the consummation of any transactions contemplated hereby or (ii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing or to the Collateral, whether based on contract, tort or any other theory, whether brought by a third party or by any Grantor and regardless of whether any Indemnitee is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final judgment to have resulted from the gross negligence or wilful misconduct of such Indemnitee.

          (c) Any amounts payable pursuant to this Section 8.21 shall be additional Secured Obligations secured hereby and by the other Collateral Documents. The provisions of this Section 8.21 shall remain operative and in full force and effect regardless of the termination of this Agreement or any other Loan Document, the consummation of the transactions contemplated hereby, the repayment of any of the Secured Obligations, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document or any investigation made by or on behalf of the Administrative Agent or any other Secured Party. All amounts due under this Section 8.21 shall be payable not later than three Business Days after written demand therefor setting forth the basis for such claim in reasonable detail.

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          SECTION 8.22. Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Agreement by signing any such counterpart. Delivery of an executed signature page to this Agreement by facsimile or other electronic transmission (including Adobe PDF file) shall be as effective as delivery of a manually signed counterpart of this Agreement.

ARTICLE IX

NOTICES

          SECTION 9.01. Sending Notices. Any notice required or permitted to be given under this Agreement shall be made in accordance with, and deemed to be received pursuant to the terms of, Section 9.01 of the Credit Agreement, in each case addressed to the Borrower (with respect to notices to any Grantor) and to the Administrative Agent and the Lenders at the addresses set forth in accordance with Section 9.01 of the Credit Agreement.

ARTICLE X

THE ADMINISTRATIVE AGENT

          JPMorgan Chase Bank, N.A. has been appointed Administrative Agent for the Lenders hereunder pursuant to Article VIII of the Credit Agreement. It is expressly understood and agreed by the parties to this Agreement that any authority conferred upon the Administrative Agent hereunder is subject to the terms of the delegation of authority made by the Lenders to the Administrative Agent pursuant to the Credit Agreement, and that the Administrative Agent has agreed to act (and any successor Administrative Agent shall act) as such hereunder only on the express conditions contained in such Article VIII. Any successor Administrative Agent appointed pursuant to Article VIII of the Credit Agreement shall be entitled to all the rights, interests and benefits of the Administrative Agent hereunder.

[Signature Page Follows]

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          IN WITNESS WHEREOF, the Grantors and the Administrative Agent have executed this Agreement as of the date first above written.

USG CORPORATION,
by	/s/ Karen L. Leets
	Name:	Karen L. Leets
	Title:	Vice President & Treasurer
EACH OF THE SUBSIDIARIES LISTED ON SCHEDULE I HERETO,
by	/s/ Karen L. Leets
	Name:	Karen L. Leets
	Title:	Vice President
JPMORGAN CHASE BANK, N.A., as Administrative Agent
by	/s/ Peter S. Predun
	Name:	Peter S. Predun
	Title:	Executive Director

Schedule I to the Pledge
and Security Agreement

SUBSIDIARY GRANTORS

	Title of Karen L. Leets with respect
Company	to such Company
California Wholesale Material Supply, LLC	Vice President and Treasurer
L & W Supply Corporation	Vice President and Treasurer
Livonia Building Materials, LLC	Vice President and Treasurer of L & W Supply Corporation, the Sole Member of Livonia Building Materials, LLC
Otsego Paper, Inc.	Vice President and Treasurer
River City Materials, Inc.	Vice President and Treasurer
United States Gypsum Company	Vice President and Treasurer
USG Foreign Investments, Ltd.	Vice President and Treasurer
USG Interiors, Inc.	Vice President and Treasurer

EXHIBIT A

NOTICE ADDRESS FOR ALL GRANTORS

550 West Adams Street
Chicago, IL 60661
Attention: Vice President and Treasurer
Telecopy No.: (312) 672-3883
with a copy to:
Corporate Secretary
Telecopy No.: (312) 672-7748

INFORMATION OF USG CORPORATION

I.	Name of Grantor: USG Corporation
II.	State of Incorporation or Organization: Delaware
III.	Type of Entity: Corporation
IV.	Organizational Number assigned by State of Incorporation or Organization: 2046782
V.	Federal Identification Number: ***
VI.	Place of Business (if it has only one) or Chief Executive Office (if more than one place of business): 550 W. Adams Street Chicago, IL 60661
VII.	Other Places of Business: None
VIII.	Locations of Collateral:

(a)	Properties Owned by the Grantor: None
(b)	Properties Leased by the Grantor (Include Landlord’s Name): None
(c)	Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements (include name of Warehouse Operator or other Bailee or Consignee): None

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

INFORMATION OF UNITED STATES GYPSUM COMPANY

I.	Name of Grantor: United States Gypsum Company
II.	State of Incorporation or Organization: Delaware
III.	Type of Entity: Corporation
IV.	Organizational Number assigned by State of Incorporation or Organization: 0636722
V.	Federal Identification Number: ***
VI.	Place of Business (if it has only one) or Chief Executive Office (if more than one place of business): 550 W. Adams Street Chicago, IL 60661
VII.	Other Places of Business: See Below
VIII.	Locations of Collateral:

(a) Properties Owned by the Grantor:

1550 Gypsum Road
Tawas City, MI
48763-9467

4859 New Peachtree Rd
Chamblee, GA
30341-3120

1115 Armour Road
North Kansas City, MO
64116-3783

81 N. State
Sigurd, UT 84657-0160

6825 Evergreen Avenue
Jacksonville, FL
32208-4996

Highway 51 A
Southard, OK
73770-0100

70 E Main Street
Stony Point, NY
10980-1629

29073 Dike Road
Rainier, OR 97048-0037

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

401 Van Ness Avenue
Torrance, CA
90501-1422

9306 Sorensen Avenue
Santa Fe Springs, CA
90670-2688

3810 W. Evan Hewes
Highway
El Centro, CA
92244-2450

37887 Shinn St
Fremont, CA 94536-4047

14370 Gannet St
La Mirada, CA
90638-5221

1201 Mayo Shell Rd
Galena Park, TX
77547-0525

255 Regal Row
Dallas, TX 75247-5201

Route 650
Shoals, IN 47581-1377

1255 Raritan Rd
Clark, NJ 07066-1257

1001 Buchanan St
Norfolk, VA 23523-1254

5701 Lewis Rd
New Orleans, LA
70126-2500

2110 Paragon Ave
Fort Dodge, IA
50501-8404

13425 210th St
Mediapolis, IA
52637-0219

300 Markley St
Port Reading, NJ
07064-1819

Highway 447
Empire, NV 89405-0130

722 Altapass Hwy
Spruce Pine, NC
28777-8927

301 Riley Rd
East Chicago, IN
46312-1697

401 C St NW
Auburn, WA
98001-3908

2898 Birch Dr
Weirton, WV
26062-5142

Lake Street
Gypsum, OH
43433-0121

60 PPL Road
Danville, PA 17821

1 Woodlawn Rd
Aliquippa, PA
15001-5413

(b) Properties Leased by the Grantor (Include Landlord’s Name):

550 W. Adams Street	SEB Immoinvest GmbH
Chicago, IL 60661	Chicago 550 W. Adams
5061 N 51st Ave,	Coneen Family Trust
Glendale, AZ 85301-7602
1414 Lindrose St.	Cypress Truck Lines Inc
Jacksonville, FL 32206
2148 American Industrial	2148 American Industrial
Way	Way, LLC
Chamblee, GA 30341

(c) Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements (include name of Warehouse Operator or other Bailee or Consignee):

1820 South 35th Ave	Precision Components
Phoenix, AZ 85009
5200 East Grand Avenue,	Texas Star Warehouse &
Ste 400	Distribution, Inc.
Dallas, TX 75223-2216
1350 E. Philadelphia	Osterkamp Trucking Inc.
Pomona, CA 91769
13615 Pioneer Way	TriPak, Inc.
E. Puyallup, WA

1209 St. Paul Ave	TriPak, Inc.
Tacoma, WA
4900 Dahlia St	American Warehouse Company, Inc.
Denver, CO 80216
760 East Vine Street	Lewis C. Howard Inc.
Kalamazoo, MI 49001
7227 N. Leadbetter Rd.	Oregon Metal Slitters. Inc.
Portland, OR 97015
255 Blair Road	255 Blair Road LLC
Avenel, NJ 07001
11111 Santa Monica	National Industrial Portfolio
Boulevard, Ste 950	Borrower, LLC
Los Angeles, CA 90025
1555 1/2 Harvard Ave.	Hilltop
Cleveland, OH 44105
624 Hamilton Road	Coil Slitting International
Weirton, WV 26062
Half Moon Industrial	Feroleto Steel Company Inc
Park Weirton, WV 26062
12651 SE Capps Rd	Wymore Transfer Co.
Clackamas, OR 97015
100 All Metals Drive	ALL METALS SERVICE &
Cartersville, GA 30120	WAREHOUSING, INC.
1755 Pennsylvania Ave	COLONA TRANSFER L.P.
Monaca, PA 15061
801 East Fifth Street	LANDFILL SERVICES
Red Wing, MN 55066	(NORTHERN STATES
	POWER RED WING
	STEAM PLANT)
2012 Sanguinetti Lane	San Joanquin Steel Inc
Stockton, CA 95025
9123 Center Ave	Metal Coaters of California, Inc
Rancho Cucanmonga, CA 91730

INFORMATION OF USG INTERIORS, INC.

I.	Name of Grantor: USG Interiors, Inc.
II.	State of Incorporation or Organization: Delaware
III.	Type of Entity: Corporation
IV.	Organizational Number assigned by State of Incorporation or Organization: 208442
V.	Federal Identification Number: ***
VI.	Place of Business (if it has only one) or Chief Executive Office (if more than one place of business): 550 W. Adams Street Chicago, IL 60661
VII.	Other Places of Business: See Below
VIII.	Locations of Collateral:

(a) Properties Owned by the Grantor:

35 Arch Street
Cloquet, MN 55720-1570

27384 Highway 61 Blvd
Red Wing, MN
55066-5525

208 Adeline St
Walworth, WI
53184-9532

1000 Crocker Rd
Westlake, OH
44145-1031

2575 Loomis Rd
Stockton, CA
95205-8045

1000 Donn Dr
Cartersville, GA
30120-2668

850 N Broadway St
Greenville, MS
38701-2305

5500 Quarantine Rd
Baltimore, MD
21226-1621

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

4500 Ardine St
South Gate, CA 90280

100 D J Nootens Dr
Bridgeport, AL
35740-7054

200 Terminal St
Charlestown, MA
02129-1981

1 USG Rd
Sweetwater, TX
79556-2880

2 Division St
River Rouge, MI
48218-1352

2750 Maple Ave
Oakfield, NY
14125-9722

(b) Properties Leased by the Grantor (Include Landlord’s Name):

550 W. Adams Street	SEB Immoinvest GmbH —
Chicago, IL 60661	Chicago 550 W. Adams

(c) Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements (include name of Warehouse Operator or other Bailee or Consignee): None

INFORMATION OF L & W SUPPLY CORPORATION

I.	Name of Grantor: L & W Supply Corporation
II.	State of Incorporation or Organization: Delaware
III.	Type of Entity: Corporation
IV.	Organizational Number assigned by State of Incorporation or Organization: 0771121
V.	Federal Identification Number: ***
VI.	Place of Business (if it has only one) or Chief Executive Office (if more than one place of business): 550 W. Adams Street Chicago, IL 60661
VII.	Other Places of Business: See Below
VIII.	Locations of Collateral:

(a) Properties Owned by the Grantor:

126 Route 94
Blairstown, NJ 07825

675 Duke Road
Buffalo, NY 14225

11460 Balls Ford Road
Manassas, VA 20109

4311 Dorchester Road
Charleston, SC 29405

2919 Dawn Road
Jacksonville, FL 32207

596 E. Highland Road
Macedonia, OH 44056

26470 Southpoint
Perrysburg, OH 43551

15660 S. Keeler Terrace
Olathe, KS 66062

117 South Smothers
N. Little Rock, AR
72114

1150 McKinley Ave.
Columbus, OH 43222

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

3393 Needmore Road
Dayton, OH 45414

11906 Tramway Drive
Sharonville, OH 45241

4275 Shallowford Road
Chattanooga, TN 37422

1050 S. Emerson Ave.
Indianapolis, IN 46203

12450 Beard Ave., South
Burnsville, MN 55337

12595 E. 61st Street
Broken Arrow, OK 74012

2302 Pollex
Corpus Christi, TX 78415

2639 Lombardy Lane
Dallas, TX 75220

6545 Burlington N. Drive
Houston, TX 77092

2310 Gardner Lane
Tucson, AZ 85705

2394 Weaver Way
Doraville, GA 30340

(b) Properties Leased by the Grantor (Include Landlord’s Name):

1032 11th Court, West Birmingham, AL 35231	Charles Kemp
801 Second Avenue SE Decatur, AL 35602	G. Ralph Jones & Glenna Dee Jones, d/b/a Dee & J Properties
4930 University Square Huntsville, AL 35816	Putnam Construction & Realty Co., Inc.
661 Western Drive Mobile, AL 36607	Cinted Corporation
17655 Ashley Drive Panama City, FL 32413	BoCat, Inc.
206 W. Herman Street Pensacola, FL	Marquis Investments, LLC
3960 Woodville Highway Tallahassee, FL 32301	CMC Incorporated

New BTS Tallahassee, FL	Becknell Development L.L.C.
1303 Hightower Trail Atlanta, GA 30350	Northridge Pavilion III & IV, LLC
23 Sand Hill Shady Grove Carrollton, GA 30116	Thocker West, Inc.
111 Kelli Clark Court Cartersville, GA 30121	Pine Ridge Properties & Development, LLC
5155 Cash Industrial Pk. Cumming, GA 30040	George R. Davidson, Frank E. Flowers, James R. Sentell
434 Old Evans Road Evans, GA 30809	Evans Rental, LLLP
101 Jonesboro Road McDonough, GA 30253	Estate of Lloyd J. Hester, Jr.
130 Amlajack Way Newnan, GA 30265	Windjammer Holdings, Inc.
3 Patton Road Savannah, GA 31405	Stewart Dockery Development, LLC
4755 N Church Lane, SE Smyrna, GA 30080	George R. Davidson, Frank E. Flowers, James R. Sentell
970 Patrick Industrial Ct. Winder, GA	Patrick Road Associates, LLC
7842 Georgia Hwy 140 Woodstock, GA 30588	Albors Properties, Georgia, LLC
120 Tavistock Road Arden, NC 28704	Slosman Family Limited Partnership
8200 Henderson Road Charlotte, NC 28269	RT Goldey Investments II, LLC d/b/a First Industrial Buildings Land
647 Michael Wylie Drive Charlotte, NC 28217	The MTN Corporation
7712 Boeing Drive Greensboro, NC 27409	Jonathan Jones, Michael Jones
3540 Diamond Drive Greenville, NC 27834	Diamond Drive LLC
4525 First Avenue, S.W. Hickory, NC 28637	Cooger, LLC
3931 Smith Farm Road Matthews, NC 28105	Jerry Smith, Jimmy Smith

5000 Trademark Drive Raleigh, NC 27610	Trademark Drive Associates, LLC
4205 Emerson Street Wilmington, NC 28403	Marvin E. Harris, Sandra P. Harris
382 Buck Island Rd. Bluffton, SC 29910	Jerry Parker
4311 Dorchester Road Charleston, SC 29405	Warehouse Investors, Inc.
4311 Dorchester Road Charleston, SC 29405	Warehouse Investors, Inc.
738 Mauney Drive Columbia, SC 29211	Mauney Drive Associates, LLC
Old Stage Road Simpsonville, SC 29681	Old Stage Road Associates, LLC
3014 Drywall Drive Myrtle Beach, SC 29577	Jacquelyn S. Hoke
408 Dixie Highway Auburndale, FL 33823	John Durham, Susan Durham
21195 Boca Rio Road Boca Raton, FL 33433	Howell & Howell, Inc.
24263 Production Circle Bonita Springs, FL 34135	Jim Swing
2510 Manatee Ave. East Bradenton, FL 34208	RNR of Sarasota, INC.
3045 South McCall Rd. Englewood, FL 34224	CRY of Sarasota, INC.
3045 South McCall Road Englewood, FL 34224	CRY of Sarasota, INC.
2912 Warehouse Road Ft. Myers, FL 33916	Glades Lumber & Wood Treating Co., INC.
1751 N. Nova Rd. Holly Hill, FL 32117-1903	Nova Ventures, INC.
9410 Eden Avenue Hudson, FL 34667	Workman Properties, Inc.
2853 Dawn Road Jacksonville, FL 32207	Monticello Realty Investments, LLC
700 Commerce Way W. Jupiter, FL 33458	JOH Corporation
2655 Irlo Bronson Kissimmee, FL 34744	Salvatore D. & Joyce M. Vacanit

7611 N.W. 74th Avenue Medley, FL 33166	Harry Reckon
3181 Skyway Circle Melbourne, FL 32935	Skyway Properties, Inc.
6190 Shirley Street Naples, FL 34109	Larry R. Andrews
1425 S.W. 15TH Ave. Ocala, FL 34474	Ocala Industrial Properties
3018 Shader Rd. Orlando, FL 32808	Scannell Properties #15, LLC
1771 S.W. Biltmore St. Port St. Lucie, FL 34984	Bayshore Industrial Properties, Inc.
250 Carmalita St. Punta Gorda, FL 33951	The Richard T. Stern Revocable Trust Agreement
3515 Heid Rd. Sebring, FL 33872	John S. Durham, Susan E. Durham
2210 Dobbs Rd. St. Augustine, FL 32086	James Rink, Keith Kimball
2817 N. 36th Street Tampa, FL 33605-3127	ML Tampa Warehouse, Inc.
3615 21st Avenue East Tampa, FL 33605	A.C. Dutton Lamer Corporation
1971 Commerce Ave. Vero Beach, FL 32960	Florida East Coast Railway, L.L.C.
4811 Dyer Blvd. W. Palm B., FL 33407	Four C Properties, LLC
1871 East Kings Ave. Kingsland, GA 31548	Jesse Eason
114 N. Main Street Chelsea, MI 48118	Sylvan Building, LLC
2318 Cass Road Traverse City, MI 49684	RJA Properties, Inc.
3470 Roger B. Chaffee Wyoming, MI 49548	Roger B. Chaffee Partners, LLC
330 Baker St. Lansing, MI 48910	Janie Y. Van Buren
6287 Lear Nagle Rd. N. Ridgeville, OH 44039	Mould Development Co. L.L.C.
26675 Eckel Road Perrysburg, OH 43552	MJM Properties

3915 Business Park Dr. Louisville, KY 40213	Gault Development LLC
4961 River Road Jefferson, LA 70121	Vincent P. Saia
390 N. Valley Dell Drive Fenton, MO 63026	Douglas G. Draper
207 N. Ranson Road Greenwood, MO 64034	Kenell Drywall Supplies, Inc.
1002 S. Moffett Joplin, MO 64802	William J. Moritz Revocable Trust
5030 Waukomis Drive Northmoor, MO 64151	Don Alexander
2650 N. Westgate Ave. Springfield, MO 65803	Forerunner, LLC, Javalina, LLC
12346 Intraplex Parkway Gulfport, MS 39503	Dauphin Development, LLC
300 West Monument St. Jackson, MS 39203	Cohea Investments, LLC
1279 Road 681 Tupelo, MS 38801	Tommy Morgan, Inc.
11481 Gulfstream Drive Arlington, TN 38002	Covington Furniture Manufacturing Co. Inc.
75 United Drive Jackson, TN 38305	Old Forest Properties, LLC
8 Wesley Street Johnson City, TN 37602	TCT Leasing Company
2646 Byington Solway Rd Knoxville, TN 37931	Micahel E. Schaad, Louis E. Schaad, Jr.
285 Main Street Antioch, IL 60002	Brian Zimmerman, Dwight Zimmerman, Germantown Investors
2017 West Hubbard St. Chicago, IL	WK Properties
430 N. Damen Ave. Chicago, IL 60622	Michael Auriemma
275 Harvestore Drive DeKalb, IL 60115	CST Industries, Inc
235 Industrial Drive Hampshire, IL 60140	Downers-Hampshire Partnership
8845 West 192nd St. Mokena, IL 60448	George Hiotis Trust Agreement

221 W. Jefferson Ave. Naperville, IL 60540	JR&K Properties, LLC
303 W. Irving Park Road Roselle, IL 60172	Value Enterprises, Ltd
201 Messner Drive Wheeling, IL 60090	Kiwi Coders, INC.
303 W. Irving Park Rd. Roselle, IL 60172 (Railroad land lease)	Northeast Illinois Railroad
11130 Delaware Parkway Crown Point, IN 46307	Cinega Partnership
2119 S. 3rd Street Terre Haute, IN 47802	Mary Feiler
13586 Thrush St. NW Andover, MN 55304	Gary T. Mulcahy
3603 Hogarth St. Eau Claire, WI 54703	HUB Management Co., Inc.
215 N. Henry Street Green Bay, WI 54308	Reines Family Limited Partnership
2155 W. Nordale Drive Appleton, WI 54912	P&B Investments, LLC
4701 McFarland Ct. McFarland, WI 53558	BHRS Properties, L.L.C.
4786 McFarland Ct. McFarland, WI 53558	Badger Terminal, LLC
4949 N. 119th Street Milwaukee, WI 53225	Gauss Capital Investment Company, LLC
739 Washington St. Wausau, WI 54403	George R. & Jacqueline E. Tetzlafk
1500 Exchange Ave. Oklahoma City, OK 73108	Hendricks Commercial Properties
503 Industrial Blvd. Austin, TX 78760	Alden B. Smith, ALBAR Properties, L.P.
2802 Flintrock Trace Austin, TX 78738	Systems Holding, Ltd.
7420 Wespark Drive Beaumont, TX 77705	Willow Creek Industrial Park
420 Industrial Blvd. Bryan, TX 77803	All-Tex Interior Supply, Inc.
1401 Meacham Blvd. Ft. Worth, TX 76106	Fort Worth Local Development Corp.

10750 John W. Eliot Road Frisco, TX 75034	Cinega Enterprises
3302 Spur 54 Harlingen, TX 78550	Patrick Melton
1010 Rankin Rd. Houston, TX 77073	1010 Rankin Road Ltd.
1415 E. Broadway Pearland, TX 77581	Barnett Drywall & Supply Co.,
6124 Reading Road Rosenberg, TX 77471	Inc. Reading, L.L.C.
2100 Mannix San Antonio, TX 78217	Mannix Bexar, L.P.
New BTS, Schertz , TX	Becknell Development L.L.C.
6696 Doniphan Canutillo, TX 79835	Maryanne Radecki
905 Hawkins Blvd. El Paso, TX 79915	Valerie Holguin
1203 N. Schultz, Bldg. #2 Casa Grande, AZ 85222	RCR Properties, L.L.C.
2808 N. 27th Ave. Phoenix, AZ 85009	I & S Enterprises
2850 N. Enterprise Pkwy Prescott Valley, AZ 86314	Prescott Valley Commercial Dev. Group LLC
4119 E. Anderson Street Sierra Vista, AZ 85650	Ivan Hardt
549 Commerce Circle Mesquite, NV 89027	NDKMT, LLC
1818 Losee Road N. Las Vegas, NV 89030	Coyote Land & Management, L.L.C.
17608 E. 24th Drive Aurora, CO 80011	SaySky Properties, LLC
2820 N. Prospect Colo. Springs, CO 80907	C. Lee Goodbar, Jr.
1401 Academy Court Ft. Collins, CO 80521	Lockman Enterprises, LLLP
1249 Boeing Street Boise, ID 83705	Ronald W. Van Auker
4132 Haroldsen Drive Idaho Falls, ID 83401	Haroldsen Investments, LLC

318 E. Karcher Rd. Nampa, ID 83687	Ronald W. Van Auker, Inc.
408 E. Karcher Rd. Nampa, ID 83687	Ronald W. Van Auker, Inc.
483 Eastland Drive South Twin Falls, ID 83301	Grand Jr., L.L.C.
689 SE Glenwood Drive Bend, OR 97702	Weigand Investments, Inc.
3919 West 1st Ave. Eugene, OR 97402	Becknell Development L.L.C.
21375 NW Cherry Lane Hillsboro, OR 97124	Cherry Lane Development, LLC
365 Ehrman Way Medford, OR	Merlin & JoAnn Fjarli
100 SE 111th Ave. Portland, OR 97266	The Ehlen Trust
7220 SW Bonita Road Tigard, OR 97224	National Safety Company
485 N. Main St. Layton, UT 84041	Marvin McAllister d/b/a McAllister Properties
255 North 1000 W. Logan, UT 84341	Watts Holding Company
657 W. 8th Ave. Midvale, UT 84047	Jerry and Lee Sorenson, LLC
3125 Grant Ave. Ogden, UT 84401	M&N Investments
48 N. 1330 W. Orem, UT 84057	Amastco Investment Company, L.C.
1364 West State Road Pleasant Grove, UT 84062	TBL, LLC
9192 South 300 West Sandy, UT 84070	KMK Properties, LLC
708 N. 3050, Suite A St. George, UT 84770	White Hills, L.C.
4058 South River Rd., #4 St. George, UT 84770	Architectural Stone Products Corp.
376 East 400 South #4 Springville, UT 84663	Nauvoo Properties, L.L.C.
3663 Chico Way NW Bremerton, WA 98310	James L. Reed

15102 Smokey Point Marysville, WA 98271	Beta-Marysville Warehouse, L.L.C.
14980 NE 90th St. Redmond, WA 98052	Wallace/Knutsen Partnership
East 6819 Mission Spokane, WA 99212	East 6815 Mission Associates, L.L.C.
7416 E. Broadway Ave. Spokane Valley, WA 99212	Becknell Development L.L.C.
4400 A Industry Drive E. Tacoma, WA 98421	AMB Partners II, L.P.
2508 East Fox Farm Rd. Cheyenne, WY 82007	Dale D. Trefre, Revocable Trust
1087/1099 Doris Auburn Hills, MI 48326	OBM LLC
1055 Doris Auburn Hills, MI 48326	OBM LLC
28187 Kehrig Drive Chesterfield, MI 48047	East Side Investment Group Co.
28377 Kehrig Drive Chesterfield, MI 48047	George E. Schena
2632 Lippencott Flint, MI 48507	Acoustical Land, LLC
4100 Lambert Drive Howell, MI 48855	H & W Land Co.
118 Rosehill #A Jackson, MI 49202	JBM Land, LLC
118 Rosehill #D Jackson, MI 49202	JBM Land, LLC
120 Rosehill Jackson, MI 49202	JBM Land, LLC
33026 Capital Livonia, MI 48150	Capital Investments, LLC
12770 Farmington Livonia, MI 48150	LBM Co.
615 Harbor Monroe, MI 48162	PBM, LLC
4315 Corporate Drive Mt. Pleasant, MI 48858	Acoustical Land, LLC
4180 Dove Road Port Huron, MI 48060	East Side Investment Group Co
3725 East Washington Saginaw, MI 48601	Acoustical Land, LLC

1255 W. Michigan Ave. Ypsilanti, MI 48197	H & W Land Co.
10559 Geiser Road Holland, OH 43528	PBM II, LLC
33000 Capital Livonia, MI 48150	Capital Investments, LLC
33900 Concord Livonia, MI 48150	Concord Properties, LLC
195 Sackett Point Rd. North Haven, CT 06473	Sackett Point Road Associates, LLC
573 Bellevue Road Newark, DE 19713	Adriatic Associates
20 Railroad Ave. Selbyville, DE 19975	Coastal Investments, LLC
9714 Pulaski Highway Baltimore, MD 21220	Pulaski Associates Limited Partnership
West 4661 Hollins Ferry Road Baltimore, MD 21227	Hollins Associates LLC
3 Washington Street Cambridge, MD 21613	Choptank Properties, LLC
16608 Huntersgreen Hagerstown, MD 21740	Hagerstown NI Industrial Owner LLC
28895 Three Notch Rd. Mechanicsville, MD	Richard W. Schmidt, Gabriel A. Schmidt
301 Serendipity Drive Millersville, MD 21108	Broadwater Properties, LLC
8830 Orchard Tree Lane Towson, MD 21286	Execuhome Realty, LLC
128 Route 94 Blairstown, NJ 07825	Lane Enterprises, Inc.
193 Fairfield Rd. Fairfield, NJ 07004	Fairfield Professorial Office Building, L.L.C.
163 Garfield Ave. Kearney, NJ 07032	Mickath Realty Company, Inc.
172-174 Garfield Ave. Kearney, NJ 07032	172 Garfield, LLC
39 Colonial Drive Piscataway, NJ 08854	H. Harding Brown, David J Frischman, Douglas Friedrich, Robert K Brown
14 Central Blvd. S. Hackensack, NJ 07606	Alsan Realty Company, L.P.

1351 Route 37 West Toms River, NJ 08755	Vincent B Wilt, John T. Larsen
315 N. Clinton Ave. Trenton, NJ 08638	L & F Urban Renewal Properties
36A Green Mountain Dr. Cohoes, NY 12047	P & R Holdings LLC
500 Beach Rd. W. Haverstraw, NY 10993	The Kennedy Family, LLC
657 Route 17K Montgomery, NY 12549	Hudson West Realty, Inc.
7330 Townline Road N. Tonawanda, NY 14120	Robert Ludwig, James Staggers
200 Pixley Rd. Rochester, NY 14624	1635 Brooks Avenue, LLC
1635 Airport Road Suite 7 Allentown, PA 18103	Airport Center, LP
2011 West 12th Street Erie, PA 16505	Austin Real Estate, INC.
111 Titus Ave. Warrington, PA 18976	Martin Kanter
556 Dettor Road Charlottesville, VA 22903	Virginia Land Holdings, LLC
10951 Pierson Drive Fredericksburg, VA 22408	FBP Warehouse I, LLC
401 E. Street Hampton, VA 23661	J.Z. Management Company, Inc.
5600 E. Virginia Beach Norfolk, VA 23502	Snyder Associates
2001 Magnolia St. Richmond, VA 23223	Magnolia Development, LLC
1639 Eastern Ave., NE Roanoke, VA 24012	Robert C. Hunt
4551 John Tyler Highway Williamsburg, VA 23185	Henry S. & Lavell M. Branscorne

2180 N Glassell St. Orange, CA 92865	Frank C. Ramos & Joanne M. Ramos
1300 S. River Road West Sacramento, CA 95961	Jerry and Lee Sorenson, LLC

(c) Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements (include name of Warehouse Operator or other Bailee or Consignee): None

INFORMATION OF CALIFORNIA WHOLESALE MATERIAL SUPPLY, LLC

I.	Name of Grantor: California Wholesale Material Supply, LLC
II.	State of Incorporation or Organization: Delaware
III.	Type of Entity: Limited Liability Company
IV.	Organizational Number assigned by State of Incorporation or Organization: 4481717
V.	Federal Identification Number: ***
VI.	Place of Business (if it has only one) or Chief Executive Office (if more than one place of business): 8535 E. Florence Avenue Downey, CA 90240
VII.	Other Places of Business: See Below
VIII.	Locations of Collateral:

(a)	Properties Owned by the Grantor: None
(b)	Properties Leased by the Grantor (Include Landlord’s Name):

5812 Trade Center Drive Austin, TX 78744	PW Commerce Center, LP
16820 Calply Drive Pflugerville, TX 78660	Picadilly 2006, LLP
17100 I.H. 10 West San Antonio, TX 78257	San Antonio 2005, LLP
4900 Calvert Street Dallas, TX 75247	Calvert Properties LTD
2929 S. 38th Street Phoenix, AZ 85040	38th Street Partners
302 S. 30th Street Phoenix, AZ 85034	The Hopper Company, Inc.
2450 N. Flowing Wells Tucson, AZ 85705	Winged Foot Associates
5131 Edith Blvd., NE Albuquerque, NM 87107	John & Nora Wright
7490 Commercial Way Henderson, NV 89015	Calmart Limited Partnership McGuire Street Partners
4450 McGuire Street Las Vegas, NV

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

4611 Mitchell Street N. Las Vegas, NV 89081	James A. Dodge, Jr.
4330 Production Court N. Las Vegas, NV 89115	RSZ Limited Partnership
1442 West Center Street Orem, UT 84057	Brown Management, L.C.
9255 S. 255 West Sandy, UT 84070	KMK Properties, LLC
1400 E. Cerritos Ave. Anaheim, CA 92805	Cerritos Street 2005, LP
5601 Aldrin Court Bakersfield, CA 93313	Aldrin Partners — 1994
7901 Deering Ave. Canoga Park, CA 91304	7901 Deering-2003, LP
8531 E. Florence Ave. Downey, CA	Charlotte S. Cuerto Trust
31625 Hayman Street Hayward, CA 94544	Elaine F. Pector
42-805 Madio Street Indio, CA 92201	Indio Boulevard 2003, LP
2511 E. 115th Place Los Angeles, CA 90059	Dan Baugh
1860 S. Milliken Ave. #E Ontario, CA 95407	Kathleen N. Nitta
7330 S. Crider Ave. Pico Rivera, CA 90660	Crider Partners — 1991
251 East 4th Street Ripon, CA 95366	David & Lori Sanders
616 S. Iowa Street Redlands, CA	Iowa Partners — 1996
7750 Convoy Court San Diego, CA 92111	Ostrow Partners — 1994
3600 Third Street San Francisco, CA 94124	Meyer Joint Venture
914 W. Boone Street Santa Maria, CA 93458	Beck Family Trust
3420 Dutton Ave. Santa Rosa, CA 95407	Eugene & Teri Crozat
1540 S. River Road W. Sacramento, CA 95691	River Road Partners — 2000, LP
333 Glendale Ave. Sparks, NV 89431	Narom Development Co., LLC

8535 E. Florence Ave. Downey, CA 90240	R AND N, LLC.
2180 N Glassell St. Orange, CA 92865	Hamilton Family Partnership, Ltd.*
1300 S. River Road West Sacramento, CA 95961	Frank C. Ramos & Joanne M. Ramos*
657 W 8th Ave. Midvale, UT 84047	Jerry and Lee Sorenson, LLC*

(c) Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements (include name of Warehouse Operator or other Bailee or Consignee): None

* Lease with L & W Supply Corporation

INFORMATION OF LIVONIA BUILDING MATERIALS, LLC

I.	Name of Grantor: Livonia Building Materials, LLC
II.	State of Incorporation or Organization: Michigan
III.	Type of Entity: Domestic Limited Liability Company
IV.	Organizational Number assigned by State of Incorporation or Organization: D0453H
V.	Federal Identification Number: ***
VI.	Place of Business (if it has only one) or Chief Executive Office (if more than one place of business): 550 W. Adams Street Chicago, IL 60661
VII.	Other Places of Business: See Below
VIII.	Locations of other Collateral:

(a)	Properties Owned by the Grantor: None
(b)	Properties Leased by the Grantor (Include Landlord’s Name):

33900 Concord
Livonia, MI 48150 Concord Properties, LLC^*

(c) Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements (include name of Warehouse Operator or other Bailee or Consignee): None

* Lease with L & W Supply Corporation

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

INFORMATION OF RIVER CITY MATERIALS, INC.

I.	Name of Grantor: River City Materials, Inc.
II.	State of Incorporation or Organization: Arkansas
III.	Type of Entity: For Profit Corporation
IV.	Organizational Number assigned by State of Incorporation or Organization: 100043973
V.	Federal Identification Number: ***
VI.	Place of Business (if it has only one) or Chief Executive Office (if more than one place of business): 925 Bond Street Little Rock, AR 72202
VII.	Other Places of Business: See below
VIII.	Locations of Collateral:

(a)	Properties Owned by the Grantor: None
(b)	Properties Leased by the Grantor (Include Landlord’s Name):

825 Bond Street
Little Rock, AR 72202

1504 N. 35th Street
Rogers, AR 72756

1755 Airways Blvd.
Memphis, TN 38114

300 W. Monument
Jackson, MS 39203

2646 Byington Solway Rd.
Knoxville, TN 37931 The Natural, LLC


Gypsum Investments, LLC


Bluff City, LLC


Cohea Investments, LLC


Michael E. Schaad, Louis E. Schaad, Jr.^*

(c) Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements (include name of Warehouse Operator or other Bailee or Consignee): None

* Lease with L & W Supply Corporation

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

INFORMATION OF USG FOREIGN INVESTMENTS, LTD.

I.	Name of Grantor: USG Foreign Investments, Ltd.
II.	State of Incorporation or Organization: Delaware
III.	Type of Entity: Corporation
IV.	Organizational Number assigned by State of Incorporation or Organization: 0904059
V.	Federal Identification Number: ***
VI.	Place of Business (if it has only one) or Chief Executive Office (if more than one place of business) 550 W. Adams Street Chicago, IL 60661
VII.	Other Places of Business: None
VIII.	Locations of Collateral:

(a)	Properties Owned by the Grantor: None
(b)	Properties Leased by the Grantor (Include Landlord’s Name): None
(c)	Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements (include name of Warehouse Operator or other Bailee or Consignee): None

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

INFORMATION OF OTSEGO PAPER, INC.

I.	Name of Grantor: Otsego Paper, Inc.
II.	State of Incorporation or Organization: Delaware
III.	Type of Entity: Corporation
IV.	Organizational Number assigned by State of Incorporation or Organization: 4123529
V.	Federal Identification Number: ***
VI.	Place of Business (if it has only one) or Chief Executive Office (if more than one place of business) 320 N. Farmer St Otsego, MI 49078-1150
VII.	Other Places of Business: None
VIII.	Locations of Collateral:

(a)	Properties Owned by the Grantor: 320 N. Farmer St Otsego, MI 49078-1150
(b)	Properties Leased by the Grantor (Include Landlord’s Name): None
(c)	Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements (include name of Warehouse Operator or other Bailee or Consignee): None

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

EXHIBIT B

COLLATERAL DEPOSIT ACCOUNTS

	Name and Address		Related
Name of	of Depositary		Lockbox
Grantor	Institution	Account Number	number, if any
US Gypsum Company	***	***	***, ***
	***	***	***, ***
		***
USG Interiors, Inc.	***	***	***, ***
	***	***	***
		***
L & W Supply Corporation	***	***
		***
		***
		***
		***
		***
		***
	***	***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

B-1

	Name and Address		Related
Name of	of Depositary		Lockbox
Grantor	Institution	Account Number	number, if any
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***	***
		***
		***
		***
		***
		***
		***
		***
		***
	***	***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
	***	***
		***
	***	***
		***	***
	***	***

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

B-2

	Name and Address		Related
Name of	of Depositary		Lockbox
Grantor	Institution	Account Number	number, if any
		***
		***
	***	***
		***
		***
		***
		***
		***
	***	***	***
		***	***
		***
		***
		***	***
California Wholesale Material Supply, LLC	***	***
	***	***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
		***
	***	***
		***
		***
		***
		***	***
		***
River City Materials, Inc.	***	***
		***
		***
	***	***
		***
		***
L & W Supply Corporation (formerly held by Livonia Holdings, Inc., a Delaware corporation which merged into L & W Supply Corporation)	***	***
		***
		***
		***
		***
		***
		***
		***
		***
		***

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

B-3

	Name and Address		Related
Name of	of Depositary		Lockbox
Grantor	Institution	Account Number	number, if any
Livonia Building Materials, LLC	***	***
Otsego Paper, Inc.	None

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

B-4

EXHIBIT C
(See Section 3.01 of Security Agreement)

OFFICES IN WHICH FINANCING STATEMENTS HAVE BEEN FILED

Company	Secretary of State Office
USG Corporation	Delaware
California Wholesale Material Supply, LLC	Delaware
L & W Supply Corporation	Delaware
Livonia Building Materials, LLC	Michigan
Otsego Paper, Inc.	Delaware
River City Materials, Inc.	Arkansas
United States Gypsum Company	Delaware
USG Foreign Investments, Ltd.	Delaware
USG Interiors, Inc.	Delaware

EXHIBIT D

                    SUPPLEMENT NO. __ dated as of [    ] (this “Supplement”), to the Pledge and Security Agreement dated as of January 7, 2009 (as amended, supplemented or otherwise modified from time to time, the “Security Agreement”), among USG Corporation, a Delaware corporation (the “Borrower”), the Subsidiaries of USG Corporation from time to time party thereto (each such Subsidiary and the Borrower, a “Grantor” and, collectively, the “Grantors”) and JPMorgan Chase Bank, N.A., in its capacity as administrative agent (the “Administrative Agent”) for the lenders party to the Credit Agreement referred to below.

          A. Reference is made to the Second Amended and Restated Credit Agreement dated as of January 7, 2009 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, the Lenders from time to time party thereto, the Administrative Agent and Goldman Sachs Credit Partners, L.P., as syndication agent.

          B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement or the Security Agreement, as applicable.

          C. The Grantors have entered into the Security Agreement in order to induce the Lenders to make Loans. Section 8.14 of Security Agreement provides that certain Subsidiaries must become Grantors under the Security Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned such Subsidiary (the “New Subsidiary”) is executing this Supplement in accordance with the requirements of the Credit Agreement to become a Grantor under the Security Agreement in order to induce the Lenders to make additional Loans and as consideration for Loans previously made.

          Accordingly, the Administrative Agent and the New Subsidiary agree as follows:

          SECTION 1. In accordance with Section 8.14 of the Security Agreement, the New Subsidiary by its signature below becomes a Grantor under the Security Agreement with the same force and effect as if originally named therein as a Grantor and the New Subsidiary hereby (a) agrees to all the terms and provisions of the Security Agreement applicable to it as a Grantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Grantor thereunder are true and correct on and as of the date hereof. In furtherance of the foregoing, the New Subsidiary, as security for the payment and performance in full of the Secured Obligations, does hereby create and grant to the Administrative Agent, its successors and assigns, for the benefit of the Secured Parties, their successors and assigns, a security interest in and Lien on all of the New Subsidiary’s right, title and interest in and to the Collateral of the New

Subsidiary. Each reference to a “Grantor” in the Security Agreement shall be deemed to include the New Subsidiary. The Security Agreement is hereby incorporated herein by reference.

          SECTION 2. The New Subsidiary represents and warrants to the Administrative Agent and the other Secured Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

          SECTION 3. This Supplement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Administrative Agent shall have received a counterpart of this Supplement that bears the signature of the New Subsidiary and the Administrative Agent has executed a counterpart hereof. Delivery of an executed signature page to this Supplement by facsimile or electronic transmission (including Adobe PDF file) shall be as effective as delivery of a manually signed counterpart of this Supplement.

          SECTION 4. The New Subsidiary hereby represents and warrants that (a) set forth on Schedule I attached hereto is the true and correct legal name of the New Subsidiary, its state of organization, the organizational number issued to it by its state of organization, its federal employer identification number and the location of its place of business (if it has only one) or its chief executive office (if it has more than one place of business), the location of any other place of business of such New Subsidiary and the location of any and all Collateral of the New Subsidiary and (b) set forth on Schedule II attached hereto is a complete list of all Collateral Deposit Accounts maintained by such New Subsidiary, together with applicable identifying information for such Collateral Deposit Accounts . The information set forth on such Schedule I shall be deemed to supplement Exhibit A to the Security Agreement, effective as of the date hereof. The information set forth on such Schedule II in respect of Collateral Deposit Accounts shall be deemed to supplement Exhibit B to the Security Agreement, effective as of the date hereof.

          SECTION 5. Except as expressly supplemented hereby, the Security Agreement shall remain in full force and effect.

          SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

          SECTION 7. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON

CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.

          SECTION 8. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Security Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

          SECTION 9. All communications and notices hereunder shall be in writing and given as provided in Section 9.01 of the Security Agreement.

          SECTION 10. The New Subsidiary agrees to reimburse the Administrative Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Administrative Agent.

          IN WITNESS WHEREOF, the New Subsidiary and the Administrative Agent have duly executed this Supplement to the Security Agreement as of the day and year first above written.

[NAME OF NEW SUBSIDIARY],
by
	Name:
	Title:

JPMORGAN CHASE BANK, N.A., as Administrative Agent,
by
	Name:
	Title:

Schedule I to
Supplement No. __ to
the Pledge and Security
Agreement

INFORMATION OF {Insert name of New Subsidiary}

I. Name of Grantor: _____________________________________

II. State of Incorporation or Organization: _______________________________

III. Type of Entity: _______________________________________

IV. Organizational Number assigned by State of Incorporation or Organization: ____________

V. Federal Identification Number: ________________________________

VI. Place of Business (if it has only one) or Chief Executive Office (if more than one place of business):

       Attention: ________________________________

VII. Other Places of Business:

VIII. Locations of Collateral:

(a) Properties Owned by the Grantor:

(b) Properties Leased by the Grantor (Include Landlord’s Name):

(c) Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements (include name of Warehouse Operator or other Bailee or Consignee):

Schedule II to
Supplement No. __ to
the Pledge and Security
Agreement

COLLATERAL DEPOSIT ACCOUNTS

		Location of
Name of Grantor	Name of Institution	Institution	Account Number

EX-10.5

Exhibit 10.5

EXECUTION VERSION

DATED 21 October 2008

GYPSUM TRANSPORTATION LIMITED
(as borrower)

- and -

DVB BANK SE
and others
(as lenders)

- and -

DVB BANK SE
(as agent and security trustee)

US$90,000,000 SECURED
LOAN FACILITY AGREEMENT

STEPHENSON HARWOOD
One St. Paul’s Churchyard
London EC4M 8SH
Tel: 020 7329 4422
Fax: 020 7329 7100
Ref: 819

CONTENTS

	Page
1   Definitions and Interpretation	1
2   The Loan and its Purpose	17
3   Conditions Precedent and Subsequent	19
4   Representations and Warranties	25
5   Repayment and Prepayment	28
6   Interest	30
7   Fees	33
8   Security Documents	33
9   Agency and Trust	34
10 Covenants	43
11 Earnings Account	49
12 Events of Default and Application of Monies	51
13 Set-Off and Lien	56
14 Assignment and Sub-Participation	57
15 Payments, Mandatory Prepayment, Reserve Requirements and Illegality	59
16 Communications	64
17 General Indemnities	65
18 Miscellaneous	67
19 Law and Jurisdiction	71
SCHEDULE 1	74
The Banks and the Commitments	74

	Page
SCHEDULE 2	75
Form of Mortgage	75
SCHEDULE 3	76
Form of Assignment	76
SCHEDULE 4	77
Form of Managers’ Undertaking	77
SCHEDULE 5	78
Form of Compliance Certificate	78
APPENDIX A	80
Form of Drawdown Notice	80
APPENDIX B	81
Form of Transfer Certificate	81
APPENDIX C	84
Form of Loan Administration Form	84

LOAN AGREEMENT

Dated: 21 October 2008

BETWEEN:-

(1)	GYPSUM TRANSPORTATION LIMITED, a company incorporated according to the law of Bermuda, with registered office at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda (“the Borrower”); and
(2)	the banks listed in Schedule 1, each acting through its office at the address indicated against its name in Schedule 1 (together “the Banks” and each a “Bank”); and
(3)	DVB BANK SE, with its registered office in Frankfurt and acting as agent and security trustee through its office at Parklaan 2, 3016BB Rotterdam, The Netherlands (in that capacity “the Agent”).

WHEREAS:-

(A)	The Borrower is the registered owner of Vessel A and is to be the registered owner of Vessel B upon Vessel B’s Delivery under the Building Contract.
(B)	Each of the Vessels will be registered in the ownership of the Borrower under the flag of Bermuda.
(C)	Each of the Banks has agreed to advance to the Borrower its respective Commitment of an aggregate amount not exceeding the total of (i) the lesser of forty million Dollars ($40,000,000) and fifty per cent of the Market Value of Vessel A (in respect of Tranche A) and (ii) the lesser of fifty million dollars ($50,000,000) and fifty per cent of the Market Value of Vessel B (in respect of Tranche B).

IT IS AGREED as follows:-

1 Definitions and Interpretation

1.1	Definitions
	In this Agreement:-

1.1.1 “Accounts” means the Earnings Account and the Retention Account (each an “Account”).

1.1.2	“Account Holder” means Bank of Bermuda Limited or such other bank as may be nominated by the Borrower and acceptable to the Agent.
1.1.3	“Account Security Deed” means the account security deed referred to in Clause 8.3.
1.1.4	“Address for Service” means c/o USG (U.K.) Ltd, 1 Swan Road, South West Industrial Estate, Peterlee, County Durham, SR8 2HS, Attention: Secretary or, in relation to any of the Security Parties, such other address in England and Wales as that Security Party may from time to time designate by no fewer than ten days’ written notice to the Agent.
1.1.5	“Administration” has the meaning given to it in paragraph 1.1.3 of the ISM Code.
1.1.6	“Advance Date”, in relation to any Drawing, means the date on which that Drawing is advanced by the Banks to the Borrower pursuant to Clause 2.
1.1.7	“Annex VI” means Annex VI (Regulations for the Prevention of Air Pollution from Ships) to the International Convention for the Prevention of Pollution from Ships 1973 (as modified in 1978 and 1997).
1.1.8	“Assignments” means the deeds of assignment of the Insurances, Earnings, Requisition Compensation and CoA Rights in respect of each Vessel referred to in Clause 8.2 (each an “Assignment”) to be substantially in the form attached as Schedule 3.
1.1.9	“Availability Termination Date” means 31 December 2008 (in the case of Tranche A) and 31 March 2009 (in the case of Tranche B) or such later date as the Banks may in their discretion agree.
1.1.10	“Borrowings” means in respect of any person the obligations of such person, at any time, in the aggregate principal amount, but without double counting, of:

(a)	moneys borrowed;
(b)	bonds, notes, loan stock, debentures, commercial paper or other debt securities;

2

(c)	sums outstanding under acceptances (not being acceptances of trade bills in respect of the purchase or sale of goods in the ordinary course or trading) by such person or by any agent or acceptance house under acceptance credits opened on behalf of such person;
(d)	deferred indebtedness for payment of the acquisition or construction price for assets or services acquired or constructed other than normal trade credit from suppliers for a period not exceeding 180 days;
(e)	the capital element of obligations under finance leases;
(f)	receivables sold or discounted to the extent of recourse to such person;
(g)	any other liability arising from a transaction having the commercial effect of a borrowing to the extent shown as a liability on the balance sheet of the Borrower in accordance with GAAP;
(h)	obligations under guarantees in respect of the obligations of any other person which would fall within paragraphs (a) — (g) above.

1.1.11	“Break Costs” means all costs, losses, premiums or penalties incurred by the Agent or any Bank in the circumstances contemplated by Clause 17.4, or as a result of it receiving any prepayment of all or any part of the Loan (whether pursuant to Clause 5 or otherwise), or any other payment under or in relation to the Security Documents on a day other than the due date for payment of the sum in question, and includes (without limitation) any losses or costs incurred in liquidating or re-employing deposits from third parties acquired to effect or maintain the Loan.
1.1.12	“Builder” means Estaleiro Ilha S.A. of Brazil.
1.1.13	“Building Contract” means the shipbuilding contract dated 5 December 2005 and made between the Builder and the Borrower as amended or supplemented from time to time, in respect of Vessel B.
1.1.14	“Business Day” means a day on which banks are open for the transaction of business of the nature contemplated by this Agreement (and not authorised

3

	by law to close) in New York, New York, United States of America; London, England; Frankfurt, Germany; and Rotterdam, The Netherlands.
1.1.15	“Cash” means cash in hand which is not subject to any charge back or other Encumbrance (other than in favour of the Agent) and to which the Borrower has free, immediate and direct access.
1.1.16	“Cash Equivalents” means the following where the Borrower has free, immediate and direct access:

(a)	any security issued directly or fully guaranteed or insured by the United States of America or any OECD government whose securities are readily marketable in London, Paris, Frankfurt or New York City, or any agency or instrumentality thereof;
(b)	other readily marketable securities or other easily realisable investments having a rating of at least A from Standard and Poor’s Ratings Group or Moody’s Investors Service, Inc;
(c)	any Eurodollar time deposit, overnight deposit or banker’s acceptance, issued by, or time deposit of a commercial banking institution which has, on a combined basis, capital, surplus and undivided profit of not less than $250,000,000 and has a Moody’s Agent Credit Service rating for short term bank deposits of at least P2;
(d)	repurchase obligations with a term of not more than ninety (90) days for underlying securities of the types described in paragraph (a) above entered into with any commercial banking institution meeting the qualifications specified in paragraph (c) above;
(e)	short term commercial paper issued by any person, having one of the top two investment ratings from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc;
(f)	investments in money market funds substantially all of whose assets are comprised of securities of the types described in paragraphs (a) to (e) above;

4

(g)	deposits which are unrestricted as to withdrawal with commercial banking institutions meeting the criteria set forth in paragraph (c) above; and
(h)	undrawn committed credit lines.

1.1.17	“Cash Reserves” means Cash and Cash Equivalents.
1.1.18	“Change of Control” means either

(a)	the Guarantor ceasing to be the direct or indirect legal and beneficial owner of all of the shares in the Borrower; or
(b)	the consummation of any transaction or a series of related transactions (including, without limitation, any merger or consolidation) the result of which is that any person becomes the owner of more than 50% of the then outstanding shares of the Guarantor’s voting stock entitled to vote generally for the election of directors, measured by voting power rather than number of shares.

1.1.19 “CoAs” means each of:-

(a)	the contract of affreightment commencing as of January 1, 2008 made between the Borrower and United States Gypsum Company;
(b)	the contract of affreightment dated 30 October 2007 made between the Borrower and Public Service of New Hampshire Company;
(c)	the contract of affreightment dated 18 April 2008 made between the Borrower and Mt. Tom Generating Co. LLC; and
(d)	any future contracts of affreightment to be entered into by the Borrower in respect of the Vessels

	(each a “COA”).
1.1.20	“CoA Rights” means all of the rights of the Borrower under or pursuant to the CoAs.

5

1.1.21	“Commitment” means, in relation to each Bank, the amount of the Maximum Loan Amount which that Bank agrees to advance to the Borrower as its several liability as indicated against the name of that Bank in Schedule 1 and/or, where the context permits, the amount of the Loan advanced by that Bank and remaining outstanding.
1.1.22	“Commitment Commission” means the commitment commission to be paid by the Borrower to the Agent pursuant to Clause 7.2.
1.1.23	a “Communication” means any notice, approval, demand, request or other communication from one party to this Agreement to any other party to this Agreement.
1.1.24	“Communications Address” means:
	Gypsum Transportation Limited c/o Beltship Management Limited USG Corporation 550 West Adams Street Chicago, Illinois 60661 USA Attention: Vice President and Treasurer Fax No.: +1-312-672-5415
1.1.25	“Confidential Information” means information that any Security Party furnishes to the Agent or to any Bank in writing, designated as confidential, but does not include any such information that is or becomes generally available to the public or that is or becomes available to the Agent or such Bank from a source other than the Security Parties.
1.1.26	“Currency of Account” means, in relation to any payment to be made to the Agent or a Bank under or pursuant to any of the Security Documents, the currency in which that payment is required to be made by the terms of the relevant Security Document.

6

1.1.27	“Debt Service” means the aggregate of principal and interest payments due from the Borrower in the immediately following twelve month period under any Borrowings.
1.1.28	“Default Rate” means the rate of two per centum (2%) per annum above the aggregate of (a) the Margin and (b) the cost to the Banks of obtaining funds in amount similar to the amount of the Indebtedness or any relevant part of the Indebtedness for such periods as the Agent shall determine in its discretion.
1.1.29	“Delivery” means the delivery of Vessel B by the Builder to, and acceptance of Vessel B by, the Borrower pursuant to the Building Contract.
1.1.30	“DOC” means, in relation to the ISM Company, a valid Document of Compliance issued for the ISM Company by the Administration pursuant to paragraph 13.2 of the ISM Code.
1.1.31	“Dollars” and “$” each means available and freely transferable and convertible funds in lawful currency of the United States of America.
1.1.32	“Drawdown Notice” means a notice complying with Clause 2.3.
1.1.33	“Drawing” means a part of the Loan advanced by the Banks to the Borrower in accordance with Clause 2.2.
1.1.34	“EBITDA” means earnings before interest expenses, taxes, depreciation and amortization of the Borrower for the previous period of twelve months.
1.1.35	“Earnings” means all hires, freights, pool income and other sums payable to or for the account of the Borrower in respect of the Vessels including (without limitation) payments under the CoAs, all remuneration for salvage and towage services, demurrage and detention moneys, contributions in general average, compensation in respect of any requisition for hire, and damages and other payments (whether awarded by any court or arbitral tribunal or by agreement or otherwise) for breach, termination or variation of any contract for the operation, employment or use of the Vessels.

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1.1.36	“Earnings Account” means the bank account in respect of both Vessels to be opened in the name of the Borrower with the Account Holder and designated “GTL Vessels — Earnings Account”.
1.1.37	“Encumbrance” means any mortgage, charge (fixed or floating), pledge, lien, assignment, hypothecation, preferential right, option, title retention or trust arrangement or any other agreement or arrangement which has the effect of creating security or payment priority.
1.1.38	“Event of Default” means any of the events set out in Clause 12.2.
1.1.39	“Facility Period” means the period beginning on the date of this Agreement and ending on the date when the whole of the Indebtedness has been repaid in full and the Borrower has ceased to be under any further actual or contingent liability to the Banks or to the Agent under or in connection with the Security Documents.
1.1.40	“Fee Letter” means a letter from the Agent to the Borrower setting out certain fees, commissions and other sums payable by the Borrower to the Agent in connection with the Loan.
1.1.41	“Finance Parties” means the Banks and the Agent and “Finance Party” means any of them.
1.1.42	“Group” means the Guarantor and all of its Subsidiaries (direct or indirect).
1.1.43	“Guarantee” means the guarantee and indemnity of the Guarantor referred to in Clause 8.4.
1.1.44	“Guarantor” means USG Corporation of Delaware and/or (where the context permits) any other person or company who shall at any time during the Facility Period give to the Banks or to the Agent on the Banks behalf a guarantee and/or indemnity for the repayment of all or part of the Indebtedness.
1.1.45	“IAPPC” means a valid international air pollution prevention certificate for each Vessel issued under Annex VI.

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1.1.46	“Indebtedness” means the Loan; all other sums of any nature (together with all interest on any of those sums) which from time to time may be payable by the Borrower to the Banks or to the Agent pursuant to the Security Documents; any damages payable as a result of any breach by the Borrower of any of the Security Documents; and any damages or other sums payable as a result of any of the obligations of the Borrower under or pursuant to any of the Security Documents being disclaimed by a liquidator or any other person, or, where the context permits, the amount thereof for the time being outstanding.
1.1.47	“Instructing Group” means any one or more Banks whose combined Proportionate Shares exceed fifty per centum (50%), such group of Banks always to include the Agent.
1.1.48	“Insurances” means all policies and contracts of insurance (including all entries in protection and indemnity or war risks associations) which are from time to time taken out or entered into in respect of or in connection with the Vessels or their increased value or the Earnings and (where the context permits) all benefits thereof, including all claims of any nature and returns of premium.
1.1.49	“Interest Payment Date” means each date for the payment of interest in accordance with Clause 6.
1.1.50	“Interest Period” means each interest period selected by the Borrower or agreed by the Agent pursuant to Clause 6.
1.1.51	“ISM Code” means the International Management Code for the Safe Management of Ships and for Pollution Prevention, as adopted by the Assembly of the International Maritime Organisation on 4 November 1993 by resolution A.741 (18) and incorporated on 19 May 1994 as chapter IX of the Safety of Life at Sea Convention 1974.
1.1.52	“ISM Company” means, at any given time, the company responsible for the Vessels’ compliance with the ISM Code under paragraph 1.1.2 of the ISM Code.
1.1.53	“ISPS Code” means the International Ship and Port Security Code.

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1.1.54	“ISPS Company” means at any time, the Company responsible for the Vessels compliance with the ISPS Code.
1.1.55	“ISSC” means a valid international ship security certificate for each of the Vessels issued under the ISPS Code.
1.1.56	“Law” means any law, statute, treaty, convention, regulation, instrument or other subordinate legislation or other legislative or quasi-legislative rule or measure, or any order or decree of any government, judicial or public or other body or authority, or any directive, code of practice, circular, guidance note or other direction issued by any competent authority or agency of government (whether or not having the force of law).
1.1.57	“LIBOR” means the rate, rounded to the nearest four decimal places downwards (if the digit displayed in the fifth decimal place is 1,2,3 or 4) or upwards (if the digit displayed in the fifth decimal place is 5,6,7,8 or 9) displayed as the British Bankers’ Association Interest Settlement Rate on any information service selected by the Agent on which that rate is displayed, for deposits in Dollars of amounts equal to the amount of the Loan or any relevant part of the Loan for a period equal in length to the relevant Interest Period, or (if the Agent is for any reason unable to ascertain that rate) the rate (rounded upwards to the nearest whole multiple of one-sixteenth of one per centum) at which deposits in Dollars of amounts comparable to the amount of the Loan (or any relevant part of the Loan) are offered to the Agent in the London Interbank market for a period equal in length to the relevant Interest Period.
	If there is a discrepancy between the rate that is displayed on the information service screen selected by the Agent and the “actual” rate at which funds are available to the Agent in the London Interbank Market, then the Agent will (on request) provide evidence of the discrepancy between the Agent’s cost of funds and the screen rate for LIBOR to the Borrower and the actual rate at which funds are available shall be the rate that applies.

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1.1.58	“Loan” means the aggregate amount from time to time advanced by the Banks to the Borrower pursuant to Clause 2 or, where the context permits, the amount advanced and for the time being outstanding.
1.1.59	“Loan Administration Form” means a form substantially in the form of Appendix C.
1.1.60	“Managers” means Beltship Management Limited, a company incorporated under the International Business Companies Act of the British Virgin Islands, or such other commercial and/or technical managers of the Vessels nominated by the Borrower as the Agent may in its reasonable discretion approve.
1.1.61	“Managers’ Undertakings” means the undertakings to be given by the Managers in respect of each Vessel referred to in Clause 8.5, to be substantially in the form of Schedule 4.
1.1.62	“Margin” means one point six five per centum (1.65%) per annum.
1.1.63	“Market Adjusted Net Worth” means Value Adjusted Total Assets less Value Adjusted Total Liabilities;
1.1.64	“Market Value” means the valuation of the Vessels from an independent and reputable sale and purchase broker, acceptable to the Agent and the Borrower, such valuation to be made with or without physical inspection (as the Agent may require) on the basis of a sale for prompt delivery for cash at arm’s length on normal commercial terms as between a willing buyer and a willing seller and free of any existing charter or other contract of employment.
1.1.65	“Material Adverse Effect” means a material adverse effect on (a) the business, assets or condition, financial or otherwise, of the Borrower and its Subsidiaries, taken as a whole, (b) the ability of a Security Party to perform its material obligations under the Security Documents to which it is a party or (c) the material rights of or benefits available to the Agent and/or the Banks under the Security Documents.

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1.1.66	“Maximum Loan Amount” means the total of (i) the lesser of forty million Dollars ($40,000,000) and fifty per cent of the Market Value of Vessel A (in respect of Tranche A) and (ii) the lesser of fifty million Dollars ($50,000,000) and fifty per cent of the Market Value of Vessel B (in respect of Tranche B).
1.1.67	“Maximum Tranche Amount” means:-

(a)	in relation to Tranche A, the lesser of (i) forty million Dollars ($40,000,000) and (ii) fifty per centum (50%) of the Market Value of Vessel A ; and
(b)	in relation to Tranche B, the lesser of (i) fifty million Dollars ($50,000,000) and (ii) fifty per centum (50%) of the Market Value of Vessel B.

1.1.68	“Mortgagees’ Insurances” means all policies and contracts of mortgagees’ interest insurance, mortgagees’ additional perils (oil pollution) insurance and any other insurance from time to time taken out by the Agent on behalf of the Banks in relation to the Vessels.
1.1.69	“Mortgages” means the first priority mortgages over the Vessels together with collateral deeds of covenants thereto referred to in Clause 8.1 to be in the forms attached as Schedule 2.
1.1.70	“Permitted Encumbrances” means any Encumbrances created pursuant to the Security Documents or reasonably incurred in the ordinary course of business and any Encumbrance which has the prior written approval of the Agent.
1.1.71	“Potential Event of Default” means any event which, with the giving of notice and/or the passage of time and/or the satisfaction of any materiality test, would constitute an Event of Default.
1.1.72	“Proceedings” means any suit, action or proceedings begun by the Agent or any Bank arising out of or in connection with the Security Documents.

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1.1.73	“Proportionate Share” means, at any time, the proportion which that Bank’s Commitment (whether or not advanced) then bears to the aggregate Commitments of all the Banks (whether or not advanced).
1.1.74	“Repayment Date” means the date for payment of any Repayment Instalment in accordance with Clause 5.
1.1.75	“Repayment Instalment” means any instalment of the Loan to be repaid by the Borrower pursuant to Clause 5.
1.1.76	“Requisition Compensation” means all compensation or other money which may from time to time be payable to the Borrower as a result of a Vessel being requisitioned for title or in any other way compulsorily acquired (other than by way of requisition for hire).
1.1.77	“Retention Account” means the account to be opened in the name of the Borrower with the Account Holder and designated “GTL — Retention Account”.
1.1.78	“Security Documents” means this Agreement, the Mortgages, the Assignments, the Guarantee, the Account Security Deed, the Managers’ Undertakings or (where the context permits) any one or more of them, and any other agreement or document which may at any time be executed by any person as security for the payment of all or any part of the Indebtedness.
1.1.79	“Security Parties” means the Borrower, the Guarantor and any other person or company who may at any time during the Facility Period be liable for, or provide security for, all or any part of the Indebtedness, and “Security Party” means any one of them.
1.1.80	“SMC” means a valid safety management certificate issued for the Vessels by or on behalf of the Administration pursuant to paragraph 13.4 of the ISM Code.
1.1.81	“SMS” means a safety management system for the Vessels developed and implemented in accordance with the ISM Code and including the functional requirements, duties and obligations required by the ISM Code.

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1.1.82	“Subsidiary” means a subsidiary undertaking, as defined in Section 736 Companies Act 1985 or any analogous definition under any other relevant system of law.
1.1.83	“Taxes” means all taxes, levies, imposts, duties, charges, fees, deductions and withholdings (including any related interest, fines, surcharges and penalties) imposed by any governmental authority or other taxing authority, other than taxes on the overall net income of the Agent or of a Bank, and “Tax” and “Taxation” shall be interpreted accordingly.
1.1.84	“Total Loss” means, in respect of each Vessel:-

(a)	an actual, constructive, arranged, agreed or compromised total loss of that Vessel; or
(b)	the requisition for title or compulsory acquisition of that Vessel by or on behalf of any government or other authority (other than by way of requisition for hire); or
(c)	the capture, seizure, arrest, detention or confiscation of that Vessel, unless the Vessel is released and returned to the possession of the Borrower within six months after the capture, seizure, arrest, detention or confiscation in question.

1.1.85	“Tranche A” means that part of the Loan relating to Vessel A.
1.1.86	“Tranche B” means that part of the Loan relating to Vessel B.
1.1.87	“Tranches” means Tranche A and Tranche B (each a “Tranche”).
1.1.88	“Transfer Certificate” means a certificate materially in the form of Appendix B.
1.1.89	“Transfer Date”, in relation to a transfer of any of a Bank’s rights and/or obligations under or pursuant to this Agreement, means the fifth Business Day after the date of delivery of the relevant Transfer Certificate to the Agent, or such later Business Day as may be specified in the relevant Transfer Certificate.

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1.1.90	“Transferee” means a first class international bank or financial institution to which a Bank transfers any of its rights and/or obligations under or pursuant to this Agreement.
1.1.91	“Trust Property” means:-

(a)	the benefit of the covenant contained in Clause 8; and
(b)	all benefits arising under (including, without limitation, all proceeds of the enforcement of) each of the Security Documents (other than this Agreement), with the exception of any benefits arising solely for the benefit of the Agent.

1.1.92	“Valuations” means the valuation from an independent and reputable sale and purchase broker, selected by the Agent and the Borrower, certifying the Market Value of the Vessels such valuations to be made semi-annually, at the Borrower’s expense, and with or without physical inspection (as the Agent may require) on the basis of a sale for prompt delivery for cash at arm’s length on normal commercial terms as between a willing buyer and willing seller and free of any existing charter or other contract of employment.
1.1.93	“Value Adjusted Equity” means the amount which is equal to the Value Adjusted Total Assets of the Borrower less the total liabilities of the Borrower as shown in the Borrower’s latest balance sheet delivered pursuant to Clause 10.2.3 of this Agreement.
1.1.94	“Value Adjusted Total Assets” means the amount which is equal to the total assets of the Borrower as shown in the Borrower’s latest balance sheet delivered pursuant to Clause 10.2.3 of this Agreement less the goodwill (if any) of the Borrower as shown in such balance sheet, with the value of the Vessels adjusted to reflect their most recent Valuations.
1.1.95	“Value Adjusted Total Liabilities” means the amount which is equal to the total liabilities of the Borrower as shown in the Borrower’s latest balance sheet delivered pursuant to Section 10.2.3 of this Agreement as adjusted to reflect any contingent liabilities of the Borrower which the Agent reasonably considers should be taken into account.

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	1.1.96	“Vessel A” means the 47,761 dwt bulk carrier named “GYPSUM CENTENNIAL” registered in the name of the Borrower and having IMO Number 9228734.
	1.1.97	“Vessel A Security Documents” means the Mortgage and Assignment relating to Vessel A.
	1.1.98	“Vessel B” means approximately 48,000 dwt bulk carrier built by the Builder pursuant to the Building Contract having Hull No. E1-492 at the Builder’s yard and to be named “GYPSUM INTEGRITY”.
	1.1.99	“Vessel B Security Documents” means the Mortgage and Assignment relating to Vessel B.
	1.1.100	“Vessels” means Vessel A and Vessel B and everything now or in the future belonging to them on board and ashore (each a “Vessel”).
1.2	Interpretation
		In this Agreement:-
	1.2.1	words denoting the plural number include the singular and vice versa;
	1.2.2	words denoting persons include corporations, partnerships, associations of persons (whether incorporated or not) or governmental or quasi-governmental bodies or authorities and vice versa;
	1.2.3	references to Recitals, Clauses and Appendices are references to recitals and clauses of, and appendices to, this Agreement;
	1.2.4	references to this Agreement include the Recitals and the Appendices;
	1.2.5	the headings and contents page(s) are for the purpose of reference only, have no legal or other significance, and shall be ignored in the interpretation of this Agreement;
	1.2.6	references to any document (including, without limitation, to all or any of the Security Documents) are, unless the context otherwise requires, references to that document as amended, supplemented, novated or replaced from time to time;

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1.2.7	references to statutes or provisions of statutes are references to those statutes, or those provisions, as from time to time amended, replaced or re-enacted;
1.2.8	references to the Agent or to a Bank include its successors, transferees and assignees;
1.2.9	references to times of day are to London time.

1.3	Offer letter
	This Agreement supersedes the terms and conditions contained in any correspondence relating to the subject matter of this Agreement exchanged between the Agent or any Bank and the Borrower or their representatives prior to the date of this Agreement.

2 The Loan and its Purpose

2.1	Agreement to lend Subject to the terms and conditions of this Agreement, and in reliance on each of the representations and warranties made or to be made in or in accordance with each of the Security Documents, each of the Banks agrees to advance to the Borrower, to provide post-delivery financing on the Vessels.
2.2	Drawings Subject to satisfaction by the Borrowers of the conditions precedent set out in Clause 3.1 and 3.2, and subject to Clause 2.3, the Loan shall be advanced to the Borrower in no more than two (2) Drawings, one per Tranche, in each case by the Agent transferring the Tranches to the Borrower by such method of funds transfer as the Agent and the Borrower shall agree.
2.3	Advance of Drawings Each Drawing shall be advanced in Dollars on a Business Day, provided that the Borrower shall have given to the Agent not more than ten and not fewer than three Business Days’ notice in writing materially in the form set out in Appendix A (such notice a “Drawdown Notice”) of the required Advance Date of the Drawing in question. Each Drawdown Notice once given shall be irrevocable and shall constitute a warranty by the Borrower that:-

2.3.1 all conditions precedent to the advance of the Drawing requested in that Drawdown Notice will have been satisfied on or before the Advance Date requested;

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2.3.2	no Event of Default or Potential Event of Default will then have occurred and be continuing;
2.3.3	no Event of Default or Potential Event of Default will result from the advance of the Drawing in question; and
2.3.4	there has been no material adverse change in the business, affairs or financial condition of the Borrower or the Guarantor from that pertaining at the date of this Agreement.

	The Agent shall promptly notify each Bank of the receipt of each Drawdown Notice, following which each Bank will make its Proportionate Share of the amount of the requested Drawing available to the Borrower through the Agent on the Advance Date requested.
2.4	Restrictions on Drawings The Borrower shall not be entitled to make more than one Drawing on any Business Day and each Drawing shall be of an amount of not less than one million Dollars ($1,000,000).
2.5	Availability Termination Date No Bank shall be under any obligation to advance all or any part of its Commitment after the relevant Availability Termination Date.
2.6	Several obligations The obligations of the Banks under this Agreement are several. The failure of a Bank to perform its obligations under this Agreement shall not affect the obligations of the Borrower to the Agent or to the other Banks, nor shall the Agent or any other Bank be liable for the failure of a Bank to perform any of its obligations under or in connection with this Agreement.
2.7	Application of Loan Without prejudice to the obligations of the Borrower under this Agreement, neither the Banks nor the Agent shall be obliged to concern themselves with the application of the Loan by the Borrower.
2.8	Secured UK Tax Lease The Banks confirm that subject to compliance with the following terms and conditions the Borrower shall have the option, at its sole discretion, but shall have no obligation to utilise all or part of the Loan in connection with a secured UK lease structure (the “Tax Lease Transfer”):-

2.8.1 there being no Event of Default or Potential Event of Default existing at the date of the Tax Lease Transfer or resulting from the Tax Lease Transfer;

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2.8.2	following the Tax Lease Transfer, the Banks being in a position substantially equivalent to their intended position under the Security Documents prior to the Tax Lease Transfer;
2.8.3	the Tax Lease Transfer being acceptable to and approved by all of the Banks in all respects in their absolute discretion; and
2.8.4	the satisfaction of all conditions precedent required by the Banks in connection with the Tax Lease Transfer (including but not limited to certified copies of all relevant lease documentation, acceptable intercreditor arrangements with the lessor and acceptable legal opinions)

provided that the Banks agree to consider all the issues arising out of a proposed Tax Lease Transfer in good faith and with a view to finding solutions acceptable to all parties. It is also agreed that the Agent has the right of first refusal to arrange any Tax Lease Transfer.

3 Conditions Precedent and Subsequent

3.1 Conditions precedent Drawing of Tranche A Before any Bank shall have any obligation to advance any part of Tranche A, the Borrower shall deliver or cause to be delivered to or to the order of the Agent the following documents and evidence:-

3.1.1

Evidence of incorporation Such evidence as the Agent may reasonably require that each Security Party was duly incorporated in its country of incorporation and remains in existence and, where appropriate, in good standing, with power to enter into, and perform its obligations under, those of the Security Documents to which it is, or is intended to be, a party, including (without limitation) a copy, certified by a director or the secretary of the Security Party in question as true, complete, accurate and unamended, of all documents establishing or limiting the constitution of each Security Party.

3.1.2

Corporate authorities A copy, certified by a director or the secretary of the Security Party in question as true, complete, accurate and neither amended nor revoked, of a resolution of the directors (together, where appropriate, with signed waivers of notice of any directors’ meeting) approving, and authorising or ratifying the execution of, those of the Security Documents to

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	which that Security Party is or is intended to be a party and all matters incidental thereto.
3.1.3	Officer’s certificate A certificate signed by a duly authorised officer of each of the Security Parties setting out the names of the directors, officers and (in respect of the Borrower only) shareholders of that Security Party.
3.1.4	Security Documents This Agreement, the Vessel A Security Documents, the Account Security Deed and the Guarantee together with all notices and other documents required by any of them, duly executed.
3.1.5	Notices of assignment The notices of assignment required by the Assignment for Vessel A duly executed by the Borrower and the required form of acknowledgements approved by the relative recipients.
3.1.6	Drawdown Notice A Drawdown Notice.
3.1.7	Process agent A letter from USG (U.K.) Ltd. accepting their appointment by each of the Security Parties as agent for service of Proceedings pursuant to the Security Documents.
3.1.8	Mandates Such duly signed forms of mandate, and/or other evidence of the opening of the Accounts, as the Account Bank may require.
3.1.9	The Fee Letter The Fee Letter countersigned on behalf of the Borrower by way of acceptance of its terms.
3.1.10	Legal opinions Confirmation satisfactory to the Agent that legal opinions on the laws of England and Wales, the State of Delaware and Bermuda will be given substantially in the form required by the Agent.
3.1.11	Market Value A Valuation of Vessel A addressed to the Agent and dated no more than one month prior to the Tranche A Advance Date, from brokers acceptable to the Agent.
3.1.12	Miscellaneous Such further documents and evidence as the Agent shall reasonably require in order that each Bank can be satisfied with the results of all necessary “Know your Client” or other checks it is required to carry out or comply with in relation to the transactions contemplated by the

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	Security Documents and to the identity of any parties to the Security Documents (other than the Banks and the Agent) and their directors and officers.
3.1.13	Vessel documents Photocopies, certified as true, accurate and complete by a director or the secretary of the Borrower, of (in respect of Vessel A):-

(a)	each of the CoAs and any other charterparty or contract of employment of Vessel A which will be in force on the Advance Date;
(b)	Vessel A’s current Safety Construction, Safety Equipment, Safety Radio and Load Line Certificates;
(c)	Vessel A’s current Certificate of Financial Responsibility issued pursuant to the United States Oil Pollution Act 1990;
(d)	Vessel A’s current SMC;
(e)	the ISM Company’s current DOC; and
(f)	Vessel A’s current ISSC

in each case together with all addenda, amendments or supplements.

3.1.14	Evidence of ownership Evidence that on the Advance Date (i) Vessel A is registered under the Bermuda flag in the ownership of the Borrower and (ii) the Mortgage will be capable of being registered against Vessel A with first priority.
3.1.15	Evidence of insurance Evidence that Vessel A is or will from the Advance Date be insured in the manner required by the Security Documents and that letters of undertaking will be issued in the manner required by the Security Documents, together with the written approval of the Insurances of the Agent’s insurance adviser, which approval shall not be unreasonably withheld or delayed.
3.1.16	Confirmation of class A Certificate of Confirmation of Class for hull and machinery confirming that Vessel A is classed with the highest class

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	applicable to vessels of her type with a classification society as may be acceptable to the Agent.
3.1.17	Survey reports Reports by surveyors instructed by the Agent to inspect Vessel A as to the condition of Vessel A, which shall be in all material respects acceptable to the Agent (acting reasonably).
3.1.18	Managers’ confirmation The written confirmation of the Managers that, throughout the Facility Period unless otherwise agreed by the Agent, they will remain the commercial and technical managers of Vessel A and that they will not, without the prior written consent of the Agent, sub-contract or delegate the commercial or technical management of Vessel A to any third party.
3.1.19	Fees The Borrower shall have paid all fees due hereunder or under the Fee Letter.
3.1.20	Loan Administration Form A duly completed Loan Administration Form.

3.2 Conditions precedent to Drawing of Tranche B Before any Bank shall have an obligation to advance any part of Tranche B, the Borrower shall deliver or cause to be delivered to the Agent the following documents and evidence:-

3.2.1

Bringdown Certificate A certificate dated no more than five Business Days prior to the Advance Date in question, signed by a director or duly authorised officer of each of the Security Parties confirming that none of the documents and evidence delivered to or to the order of the Agent pursuant to Clauses 3.1.1 to 3.1.3 have been modified, amended or revoked since their delivery to or to the order of the Agent except as set forth in such certificate.

3.2.2

Vessel documents Photocopies, certified as true, accurate and complete by a director or the secretary of the Borrower, of (in respect of Vessel B):-

(a) any charterparty or other contract of employment (other than the CoAs) of Vessel B which will be in force on the Tranche B Advance Date;

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(b)	Vessel B’s current Safety Construction, Safety Equipment, Safety Radio and Load Line Certificates;
(c)	Vessel B’s current Certificate of Financial Responsibility issued pursuant to the United States Oil Pollution Act 1990;
(d)	Vessel B’s current SMC;
(e)	the ISM Company’s current DOC; and
(f)	Vessel B’s current ISSC

in each case together with all addenda, amendments or supplements.

3.2.3	Evidence of ownership Evidence that on the Advance Date (i) Vessel B is registered under the Bermuda flag in the ownership of the Borrower and (ii) the Mortgage will be capable of being registered against Vessel B with first priority.
3.2.4	Evidence of insurance Evidence that Vessel B is or will from the Tranche B Advance Date be insured in the manner required by the Security Documents and that letters of undertaking will be issued in the manner required by the Security Documents, together with the written approval of the Insurances by an insurance adviser appointed by the Agent.
3.2.5	Confirmation of class An interim Certificate of Confirmation of Class for hull and machinery confirming that Vessel B is classed with the highest class applicable to vessels of her type with a classification society as may be acceptable to the Agent.
3.2.6	Survey reports Reports by surveyors instructed by the Agent to inspect Vessel B as to the condition of Vessel B which shall be in all material respects acceptable to the Agent (acting reasonably).
3.2.7	Market Value A Valuation of Vessel B addressed to the Agent and dated no more than one month prior to the Tranche B Advance Date.
3.2.8	The Security Documents The Vessel B Security Documents, together with all notices and other documents required by any of them, duly executed and,

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	in the case of the Mortgage, registered with first priority through the Registrar of Ships (or equivalent official) at the port of registry of Vessel B.
3.2.9	A Drawdown Notice A Drawdown Notice.
3.2.10	Managers’ confirmation The written confirmation of the Managers that, throughout the Facility Period unless otherwise agreed by the Agent, they will remain the commercial and technical managers of Vessel B and that they will not, without the prior written consent of the Agent, sub-contract or delegate the commercial or technical management of Vessel B to any third party.
3.2.11	Legal opinions Confirmation satisfactory to the Agent that legal opinions on the laws of England and Wales and Bermuda will be given substantially in the form required by the Agent.
3.2.12	Fees The Borrower shall have paid all fees due hereunder or under the Fee Letter.

3.3 Conditions Subsequent The Borrower undertakes to deliver or to cause to be delivered to the Agent on, or as soon as practicable after, each Advance Date, the following additional documents and evidence:-

3.3.1	Evidence of registration Evidence of registration of the relevant Mortgage, (with first priority), with the Registrar of Ships (or equivalent official) at the Vessel’s port of registry.
3.3.2	Letters of undertaking Letters of undertaking as required by the relevant Security Documents in form and substance acceptable to the Agent.
3.3.3	Legal opinions The original legal opinions specified in this Clause 3.

3.4 No waiver If the Banks in their sole discretion agree to advance any part of the Loan to the Borrower before all of the documents and evidence required by Clauses 3.1 or 3.2 have been delivered to or to the order of the Agent, the Borrower undertakes to deliver all outstanding documents and evidence to or to the order of the Agent no later than the date specified by the Agent, and the advance of any part of the Loan shall not be taken as a waiver of the Agent’s right to require production of all the documents and evidence required by Clauses 3.1 and 3.2.

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3.5 Form and content All documents and evidence delivered to the Agent pursuant to this Clause shall:-

3.5.1	be in form and substance reasonably acceptable to the Agent;
3.5.2	be accompanied, if required by the Agent, by translations into the English language, certified in a manner reasonably acceptable to the Agent;
3.5.3	if reasonably required by the Agent, be certified, notarised, apostilled or attested in a manner reasonably acceptable to the Agent.

3.6 Event of Default No Bank shall be under any obligation to advance any part of its Commitment nor to act on any Drawdown Notice if, at the date of the Drawdown Notice or at the date on which a Drawing is requested in the Drawdown Notice, an Event of Default or Potential Event of Default shall have occurred, or if an Event of Default or Potential Event of Default would result from the advance of the Drawing in question.

4 Representations and Warranties

4.1 The Borrower represents and warrants to the Agent and each Bank at the date of this Agreement and (by reference to the facts and circumstances then pertaining) at the date of each Drawdown Notice, at each Advance Date and, except for Clauses 4.1.2, 4.1.6 and 4.1.9, at each Interest Payment Date as follows:-

4.1.1

Incorporation and capacity Each of the Security Parties is a body corporate duly constituted and existing and (where applicable) in good standing under the law of its country of incorporation, in each case with perpetual corporate existence and the power to sue and be sued, to own its assets and to carry on its business except where the failure to do so would not reasonably be expected to result in a Material Adverse Effect.

4.1.2

Solvency The Borrower is not insolvent or in liquidation or administration or subject to any other insolvency procedure, and no receiver, administrative receiver, administrator, liquidator, trustee or analogous officer has been appointed in respect of the Borrower or all or any part of its assets.

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4.1.3	Binding obligations The Security Documents when duly executed and delivered will constitute the legal, valid and binding obligations of the Security Parties enforceable against the Security Parties in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganisation, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity.
4.1.4	Satisfaction of conditions All acts, conditions and things required to be done and satisfied by the Security Parties prior to the execution and delivery of the Security Documents in order to constitute the Security Documents the legal, valid and binding obligations of the Security Parties in accordance with their respective terms have been done and satisfied in compliance with all applicable laws.
4.1.5	Registrations and consents With the exception only of the registrations referred to in Clause 3.3, all (if any) consents, licences, approvals and authorisations of, or registrations with or declarations to, any governmental authority, bureau or agency which may be required by the Borrower in connection with the execution, delivery, performance, validity or enforceability of the Security Documents have been obtained or made and remain in full force and effect and the Borrower is not aware of any event or circumstance which could reasonably be expected adversely to affect the right of any of the Security Parties to hold and/or obtain renewal of any such consents, licences, approvals or authorisations.
4.1.6	Disclosure of material facts The Borrower, subject to not being in contravention of U.S. laws and excluding general market conditions, is not aware of any material facts or circumstances which have not been disclosed to the Agent and which the Borrower reasonably believes might, if disclosed as at the date hereof, have adversely affected the decision of a person considering whether or not to make loan facilities of the nature contemplated by this Agreement available to the Borrower.
4.1.7	No material litigation There is no action, suit, arbitration or administrative proceeding pending or to its knowledge about to be pursued before any court, tribunal or governmental or other authority which would, or would be likely to, have a Material Adverse Effect.

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4.1.8	No breach of law or contract The execution, delivery and performance of the Security Documents will not contravene any material contractual restriction or any material law binding on any of the Security Parties or on any shareholder (whether legal or beneficial) of any of the Security Parties, or the constitutional documents of any of the Security Parties, nor result in the creation of, nor oblige any of the Security Parties to create, any Encumbrance over all or any of its assets, with the exception of the Encumbrances created by or pursuant to the Security Documents and, in entering into those of the Security Documents to which it is, or is to be, a party, and in borrowing the Loan, the Borrower is acting for its own account and none of the foregoing activities will involve or lead to a contravention of any law, official requirement or other regulatory measure or procedure which has been implemented to combat “money laundering” (as defined in each of Article 1 of Directive 91/308/EEC issued by the Council of the European Community and the USA Patriot Act 2001, Publ. L. No. 107-56).
4.1.9	No deductions The Borrower is not required to make any deduction or withholding from any payment which it may be obliged to make to the Agent or any Bank under or pursuant to the Security Documents.
4.1.10	No established place of business in the United Kingdom or United States The Borrower does not have, nor will it have during the Facility Period, an established place of business in the United Kingdom or the United States of America.
4.1.11	Use of Loan The Loan will be used for the purpose specified in Clause 2.1.
4.1.12	No material adverse change As of the date of this Agreement, no event, change or condition has occurred since 30 June 2008 that has had, or would reasonably be expected to have, a Material Adverse Effect.
4.1.13	No Event of Default No Event of Default exists and is continuing.

4.2 Each Bank severally represents and warrants to the Borrower that no part of the bonds to be used by it to make any advance hereunder shall constitute assets of an employee pension plan.

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5 Repayment and Prepayment

5.1 Repayment Subject to Clause 5.2, the Borrower agrees to repay each Tranche to the Agent as agent for the Banks as follows:-

5.1.1	Tranche A Repayment
	By sixteen (16) consecutive quarterly Repayment Instalments each in the sum of one million Dollars ($1,000,000) followed by sixteen (16) consecutive Repayment Instalments each in the sum of five hundred thousand Dollars ($500,000).
5.1.2	Tranche B Repayment
	By sixteen (16) consecutive quarterly Repayment Instalments each in the sum of one million three hundred thousand Dollars ($1,300,000) followed by sixteen (16) consecutive quarterly Repayment Instalments each in the sum of eight hundred and twenty five thousand Dollars ($825,000).

	The first Repayment Date for each Tranche shall be the date which is three calendar months after the Advance Date for that Tranche and subsequent Repayment Dates shall be at consecutive intervals of three calendar months thereafter. A balloon payment of the lesser of sixteen million Dollars ($16,000,000) and the unpaid principal amount of each Tranche (“the Balloon”) shall be payable together with the thirty second and final Repayment Instalment of each Tranche. In any event each Tranche shall be repaid in full on or before the date falling eight (8) years after the Advance Date for that Tranche.
5.2	Reduction of Repayment Instalments If the aggregate amount advanced to the Borrower for a Tranche is less than the relevant Maximum Tranche Amount, then the amount of the Repayment Instalments relating to that Tranche shall be reduced pro rata to the amount actually advanced.
5.3	Prepayment The Borrower may voluntarily prepay either Tranche in whole or in part in an amount equal to one hundred thousand Dollars ($100,000) or an integral multiple of that amount (or as allowed pursuant to Clause 5.6 and Clause 10.2.2 or as otherwise may be agreed by the Agent) provided that it has first given to the Agent not fewer than five Business Days’ prior written notice expiring on a

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	Business Day (being the last day of an Interest Period) of its intention to do so, and provided that it pays to the Agent on behalf of the Banks, in addition to the amount voluntarily prepaid, a prepayment fee of an amount equal to zero point two five per centum (0.25%) of the amount prepaid (which is a genuine pre-estimate of loss and not a penalty) (it being understood that such prepayment fee is not applicable to prepayments made pursuant to Clause 10.2.2). Any notice pursuant to this Clause once given shall be irrevocable and shall oblige the Borrower to make the prepayment referred to in the notice on the Business Day specified in the notice, together with all interest accrued on the amount prepaid up to and including that Business Day.
5.4	Prepayment indemnity If the Borrower shall, subject always to Clause 5.3, make a voluntary prepayment on a Business Day other than the last day of an Interest Period in respect of the whole of the Loan, it shall, in addition to the amount prepaid, the fee payable pursuant to Clause 5.3 and accrued interest, pay to the Agent on behalf of the Banks any amount which the Agent may certify is necessary to compensate the Banks for any Break Costs incurred by the Agent or any of the Banks as a result of the making of the prepayment in question. The Agent will give a non-binding estimate of Break Costs within three days of receipt of any request from the Borrower for such an estimate but the Break Costs payable will be those actually incurred on the date of prepayment.
5.5	Application of prepayments Any prepayment, other than pursuant to Clause 5.6, in an amount less than the Indebtedness shall be applied in satisfaction or reduction first of any costs and other amounts outstanding; secondly of all interest outstanding; thirdly of the Balloon of the relevant Tranche; and fourthly of the Repayment Instalments of the relevant Tranche in inverse order of maturity.
5.6	Application of prepayment on sale On any prepayment resulting from the sale or Total Loss of a Vessel prior to the occurrence of an Event of Default, the net sale proceeds or net Total Loss moneys (as the case may be) shall be applied in repayment of the relevant Tranche (firstly against the relevant Balloon and secondly against all other amounts outstanding in respect of the relevant Tranche) at the date of such sale or within one (1) Business Day of receipt of the net Total Loss moneys together with such additional amount (if any) as may be required to

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	ensure that, immediately following the prepayment, the Borrower complies with Clause 10.2.2.
5.7	No reborrowing No amount repaid or prepaid pursuant to this Agreement may in any circumstances be reborrowed.

6 Interest

6.1	Interest Periods The period during which the Loan shall be outstanding pursuant to this Agreement shall (subject to clauses 6.2 and 6.9) be divided into consecutive Interest Periods of three months’ duration or such other duration as the Borrower may request which may be agreed by the Banks in their discretion.
6.2	Beginning and end of Interest Periods For each of Tranche A and Tranche B, the first Interest Period for each Tranche shall begin on the first Advance Date for that Tranche and the final Interest Period for each Tranche shall end on the Repayment Date applicable to the final Repayment Instalment for such Tranche.
6.3	Interest Periods to meet Repayment Dates If the Borrower and the Banks shall agree an Interest Period which does not expire on the next Repayment Date, there shall, in respect of each part of the Loan equal to a Repayment Instalment falling due for payment before the expiry of that Interest Period, be a separate Interest Period which shall expire on the relevant Repayment Date, and the Interest Period selected or agreed shall apply to the balance of the Loan only.
6.4	Interest rate During each Interest Period interest shall accrue on the Loan at the rate determined by the Agent to be the aggregate of (a) the Margin and (b) LIBOR determined at or about 11.00 a.m. on the second Business Day prior to the beginning of that Interest Period.
6.5	Accrual and payment of interest Interest shall accrue from day to day, shall be calculated on the basis of a 360 day year and the actual number of days elapsed and shall be paid by the Borrower to the Agent on behalf of the Banks on the last day of each Interest Period and additionally, during any Interest Period exceeding six months, on the last day of each successive six month period after the beginning of that Interest Period.

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6.6 Ending of Interest Periods Each Interest Period shall, subject to Clauses 6.2 and 6.3, end on the date which numerically corresponds to the date on which the immediately preceding Interest Period ended (or, in the case of the first Interest Period, to the first Advance Date) in the calendar month which is the number of months selected or agreed after the calendar month in which the immediately preceding Interest Period ended (or, in the case of the first Interest Period, in which the first Advance Date occurred), except that:-

6.6.1	if there is no numerically corresponding date in the calendar month in which the Interest Period ends, the Interest Period shall end on the last Business Day in that calendar month; and
6.6.2	if any Interest Period would end on a day which is not a Business Day, that Interest Period shall end on the next succeeding Business Day (unless the next succeeding Business Day falls in the next calendar month, in which event the Interest Period in question shall end on the next preceding Business Day).

	Any adjustment made pursuant to Clause 6.6.1 or 6.6.2 shall be ignored for the purpose of determining the date on which any subsequent Interest Period shall end.
6.7	Default Rate If an Event of Default shall occur, the whole of the Indebtedness shall, during the continuance of the Event of Default, bear interest up to the date of actual payment (both before and after judgment) at the Default Rate, which interest shall be payable from time to time by the Borrower to the Agent on behalf of the Banks on demand.
6.8	Changes in market circumstances If at any time the Agent determines (which determination shall be final and conclusive and binding on the Borrower) that in the London interbank market either adequate and fair means do not exist for determining the rate of interest on the Loan for any Interest Period or the cost to a Bank or Banks of obtaining matching deposits for any Interest Period would be in excess of LIBOR:

6.8.1 the Agent shall give notice to the Banks and the Borrower of the occurrence of such event; and

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6.8.2 the rate of interest on each Bank’s Commitment for that Interest Period shall be the rate per annum which is the sum of:

(a)	the Margin; and
(b)	the rate notified to the Agent by that Bank as soon as practicable, and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Bank of funding its Commitment from whatever source it may reasonably select,

PROVIDED THAT if the resulting rate of interest on any Commitment is not acceptable to the Borrower:

6.8.3	the Agent on behalf of the Banks will negotiate with the Borrower in good faith with a view to modifying this Agreement to provide a substitute basis for determining the rate of interest which is financially a substantial equivalent to the basis provided for in this Agreement;
6.8.4	any substitute basis agreed pursuant to Clause 6.8.3 shall be binding on all the parties to this Agreement and shall apply to all Commitments; and
6.8.5	if, within thirty (30) days of the giving of the notice referred to in Clause 6.8.1, the Borrower and the Agent fail to agree in writing on a substitute basis for determining the rate of interest, the Borrower will immediately prepay the relevant Commitment, together with any Break Costs, and the remaining Repayment Instalments shall be reduced pro rata.

6.9 Long Interest Periods The Borrower may request the Agent to arrange long Interest Periods (for all or a substantial part of the Loan) of greater than twelve (12) months’ duration. Any such request must be given at least (5) Business Days prior to commencement of the Interest Period in question. The Banks shall not be obliged to grant such long Interest Periods, but if they elect to do so then the Interest Rate for such period shall be calculated as the aggregate of (a) the Banks’ cost of funds for obtaining the relevant amount for the relevant period and (b) the Margin.

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6.10 Determinations conclusive Each determination of an interest rate made by the Agent in accordance with Clause 6 shall (save in the case of manifest error or on any question of law) be final and conclusive.

7 Fees

7.1

Fee Letter The Borrower shall pay to the Agent the fees, commissions and other sums as set out in the Fee Letter.

7.2

Commitment commission The Borrower shall pay to the Agent for distribution to the Banks a commitment commission calculated at the rate of zero point three per centum (0.3%) per annum on the undrawn amount of the Commitment from time to time from the date of this Agreement to the earlier to occur of the final Advance Date and the final Availability Termination Date, both dates inclusive. The Commitment Commission will accrue from day to day on the basis of a 360 day year and the actual number of days elapsed, and shall be paid quarterly (at the same time as payment of interest pursuant to Clause 6.5) in arrears with a final pro rata payment on the earlier to occur of the final Advance Date and the final Availability Termination Date.

8	Security Documents
	As security for the repayment of the Indebtedness, the Borrower shall execute and deliver to the Agent or cause to be executed and delivered to the Agent, on or before the first Advance Date (or, in respect of the documents listed at 8.1, 8.2 and 8.5, the relevant Advance Date), the following Security Documents:-

8.1	the Mortgages a first priority mortgage together with collateral deed of covenants thereto over each Vessel;
8.2	the Assignments a deed of assignment of the Insurances, Earnings, Requisition Compensation and CoA Rights in respect of each Vessel;
8.3	the Accounts Security Deed an account security deed in respect of all amounts from time to time standing to the credit of each Account;
8.4	the Guarantee the guarantee and indemnity of the Guarantor; and

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8.5 the Managers’ Undertakings an undertaking from the Managers relating to each Vessel.

9 Agency and Trust

9.1	Appointment Each of the Banks appoints the Agent its agent for the purpose of administering the Loan and the Security Documents.
9.2	Authority Each of the Banks irrevocably authorises the Agent (subject to Clauses 9.4 and 9.19):-

9.2.1	to execute the Security Documents (other than this Agreement) on its behalf;
9.2.2	to collect, receive, release or pay any money on its behalf;
9.2.3	acting on the instructions from time to time of an Instructing Group to give or withhold any waivers, consents or approvals under or pursuant to any of the Security Documents;
9.2.4	acting on the instructions from time to time of the Instructing Group to exercise, or refrain from exercising, any discretions under or pursuant to any of the Security Documents; and
9.2.5	to enforce the Security Documents on its behalf.

The Agent shall have no duties or responsibilities as agent or as security trustee other than those expressly conferred on it by the Security Documents and shall not be obliged to act on any instructions from the Banks or an Instructing Group if to do so would, in the opinion of the Agent, be contrary to any provision of the Security Documents or to any law, or would expose the Agent to any actual or potential liability to any third party.

9.3

Trust The Agent agrees and declares, and each of the Banks acknowledges, that, subject to the terms and conditions of this Clause, the Agent holds the Trust Property on trust for the Banks, in accordance with their respective Proportionate Shares absolutely. Each of the Banks agrees that the obligations, rights and benefits vested in the Agent in its capacity as security trustee shall be performed and exercised in accordance with this Clause. The Agent in its capacity as security trustee shall have the benefit of all of the provisions of this Agreement benefiting it in its capacity as

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agent for the Banks, and all the powers and discretions conferred on trustees by the Trustee Act 1925 (to the extent not inconsistent with this Agreement). In addition:-

9.3.1	the Agent (and any attorney, agent or delegate of the Agent) may indemnify itself or himself out of the Trust Property against all liabilities, costs, fees, damages, charges, losses and expenses sustained or incurred by it or him in relation to the taking or holding of any of the Trust Property or in connection with the exercise or purported exercise of the rights, trusts, powers and discretions vested in the Agent or any other such person by or pursuant to the Security Documents or in respect of anything else done or omitted to be done in any way relating to the Security Documents unless such liabilities, costs, fees, damages, charges, changes, losses and expenses arise from the Agent’s wilful misconduct or gross negligence; and
9.3.2	the Banks acknowledge that the Agent shall be under no obligation to insure any property nor to require any other person to insure any property and shall not be responsible for any loss which may be suffered by any person as a result of the lack or insufficiency of any insurance; and
9.3.3	the Agent and the Banks agree that the perpetuity period applicable to the trusts declared by this Agreement shall be the period of eighty years from the date of this Agreement.

9.4 Limitations on authority Except with the prior written consent of each of the Banks, the Agent shall not be entitled to :-

9.4.1	release or vary any security given for the Borrower’s obligations under this Agreement; nor
9.4.2	waive the payment of any sum of money payable by any of the Security Parties under the Security Documents; nor
9.4.3	change the meaning of the expressions “Instructing Group” or “Margin”; nor
9.4.4	exercise, or refrain from exercising, any discretion, or give or withhold any consent, the exercise or giving of which is, by the terms of this Agreement, expressly reserved to the Banks; nor

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9.4.5	extend the due date for the payment of any sum of money payable by any of the Security Parties under the Security Documents; nor
9.4.6	take or refrain from taking any step if the effect of such action or inaction may lead to the increase of the obligations of a Bank under any of the Security Documents; nor
9.4.7	agree to change the currency in which any sum is payable under the Security Documents (other than in accordance with the terms of the Security Documents); nor
9.4.8	agree to amend this Clause 9.4.

9.5	Liability Neither the Agent nor any of its directors, officers, employees or agents shall be liable to the Banks for anything done or omitted to be done by the Agent under or in connection with the Security Documents unless as a result of the Agent’s wilful misconduct or gross negligence.
9.6	Acknowledgement Each of the Banks acknowledges that:-

9.6.1	it has not relied on any representation made by the Agent or any of the Agent’s directors, officers, employees or agents or by any other person acting or purporting to act on behalf of the Agent to induce it to enter into any of the Security Documents;
9.6.2	it has made and will continue to make without reliance on the Agent, and based on such documents and other evidence as it considers appropriate, its own independent investigation of the financial condition and affairs of the Security Parties in connection with the making and continuation of the Loan;
9.6.3	it has made its own appraisal of the creditworthiness of the Security Parties;
9.6.4	the Agent shall not have any duty or responsibility at any time to provide it with any credit or other information relating to any of the Security Parties unless that information is received by the Agent pursuant to the express terms of the Security Documents.

Each of the Banks agrees that it will not assert nor seek to assert against any director, officer, employee or agent of the Agent or against any other person acting or

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purporting to act on behalf of the Agent any claim which it might have against them in respect of any of the matters referred to in this Clause.

9.7 Limitations on responsibility The Agent shall have no responsibility to any of the Security Parties or to the Banks on account of:-

9.7.1	the failure of a Bank or of any of the Security Parties to perform any of their respective obligations under the Security Documents;
9.7.2	the financial condition of any of the Security Parties;
9.7.3	the completeness or accuracy of any statements, representations or warranties made in or pursuant to any of the Security Documents, or in or pursuant to any document delivered pursuant to or in connection with any of the Security Documents;
9.7.4	the negotiation, execution, effectiveness, genuineness, validity, enforceability, admissibility in evidence or sufficiency of any of the Security Documents or of any document executed or delivered pursuant to or in connection with any of the Security Documents.

9.8 The Agent’s rights The Agent may:-

9.8.1	assume that all representations or warranties made or deemed repeated by any of the Security Parties in or pursuant to any of the Security Documents are true and complete, unless, in its capacity as the Agent, it has acquired actual knowledge to the contrary; and
9.8.2	assume that no Event of Default or Potential Event of Default has occurred unless, in its capacity as the Agent, it has acquired actual knowledge to the contrary; and
9.8.3	rely on any document or Communication reasonably believed by it to be genuine; and
9.8.4	rely as to legal or other professional matters on opinions and statements of any legal or other professional advisers selected or approved by it; and

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9.8.5	rely as to any factual matters which might reasonably be expected to be within the knowledge of any of the Security Parties on a certificate signed by or on behalf of that Security Party; and
9.8.6	refrain from exercising any right, power, discretion or remedy unless and until instructed to exercise that right, power, discretion or remedy and as to the manner of its exercise by the Banks (or, where applicable, by an Instructing Group) and unless and until the Agent has received from the Banks any payment which the Agent may require on account of, or any security which the Agent may require for, any costs, claims, expenses (including legal and other professional fees) and liabilities which it considers it may incur or sustain in complying with those instructions.
9.8.7	request a Bank to transfer its rights and/or obligations under or pursuant to this Agreement to another bank or financial institution if at any time during the Facility Period there is a conflict between the Agent and that Bank.

9.9 The Agent’s duties The Agent shall:-

9.9.1	if requested in writing to do so by a Bank, make enquiry and advise the Banks as to the performance or observance of any of the provisions of the Security Documents by any of the Security Parties or as to the existence of an Event of Default;
9.9.2	inform the Banks promptly of any Event of Default of which the Agent has actual knowledge; and
9.9.3	promptly forward to the Bank concerned the original or copy of any document which is delivered to the Agent for that Bank.

9.10 No deemed knowledge The Agent shall not be deemed to have actual knowledge of the falsehood or incompleteness of any representation or warranty made or deemed repeated by any of the Security Parties or actual knowledge of the occurrence of any Event of Default or Potential Event of Default unless a Bank or any of the Security Parties shall have given written notice thereof to the Agent in its capacity as the Agent. Any information acquired by the Agent other than specifically in its capacity as the Agent shall not be deemed to be information acquired by the Agent in its capacity as the Agent.

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9.11	Other business The Agent may, without any liability to account to the Banks, generally engage in any kind of banking or trust business with any of the Security Parties or any of their respective subsidiaries or associated companies or with a Bank as if it were not the Agent.
9.12	Indemnity The Banks shall, promptly on the Agent’s request, reimburse the Agent in their respective Proportionate Shares, for, and keep the Agent fully indemnified in respect of:-

9.12.1

all amounts payable by the Borrower to the Agent pursuant to Clause 17 to the extent that those amounts are not paid by the Borrower;

9.12.2

all liabilities, damages, costs and claims sustained or incurred by the Agent in connection with the Security Documents, or the performance of its duties and obligations, or the exercise of its rights, powers, discretions or remedies under or pursuant to any of the Security Documents; or in connection with any action taken or omitted by the Agent under or pursuant to any of the Security Documents, unless in any case those liabilities, damages, costs or claims arise solely from the Agent’s wilful misconduct or gross negligence.

9.13

Employment of agents In performing its duties and exercising its rights, powers, discretions and remedies under or pursuant to the Security Documents, the Agent shall be entitled to employ and pay agents to do anything which the Agent is empowered to do under or pursuant to the Security Documents (including the receipt of money and documents and the payment of money) and to act or refrain from taking action in reliance on the opinion of, or advice or information obtained from, any lawyer, banker, broker, accountant, valuer or any other person believed by the Agent in good faith to be competent to give such opinion, advice or information.

9.14

Distribution of payments The Agent shall pay promptly to the order of each of the Banks that Bank’s Proportionate Share of every sum of money received by the Agent pursuant to the Security Documents or the Mortgagees’ Insurances (with the exception of any amounts payable pursuant to Clause 7 and/or the Fee Letter and any amounts which, by the terms of the Security Documents, are paid to the Agent for the account of the Agent alone or specifically for the account of one or more Banks alone) and until so paid such amount shall be held by the Agent on trust absolutely for that Bank.

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9.15

Reimbursement The Agent shall have no liability to pay any sum to a Bank until it has itself received payment of that sum. If, however, the Agent does pay any sum to a Bank on account of any amount prospectively due to that Bank pursuant to Clause 9.14 before it has itself received payment of that amount, and the Agent does not in fact receive payment within five Business Days after the date on which that payment was required to be made by the terms of the Security Documents or the Mortgagees’ Insurances, each Bank receiving any such payment will, on demand by the Agent, refund to the Agent an amount equal to the amount received by it, together with an amount sufficient to reimburse the Agent for any amount which the Agent may certify that it has been required to pay by way of interest on money borrowed to fund the amount in question during the period beginning on the date on which that amount was required to be paid by the terms of the Security Documents or the Mortgagees’ Insurances and ending on the date on which the Agent receives reimbursement.

9.16

Redistribution of payments Unless otherwise agreed between the Banks and the Agent, if at any time a Bank receives or recovers by way of set-off, the exercise of any lien or otherwise (other than from any assignee or transferee of or sub-participant in that Bank’s Commitment), an amount greater than that Bank’s Proportionate Share of any sum due from any of the Security Parties under the Security Documents (the amount of the excess being referred to in this Clause as the “Excess Amount”) then:-

9.16.1	that Bank shall promptly notify the Agent (which shall promptly notify each other Bank);
9.16.2	that Bank shall pay to the Agent an amount equal to the Excess Amount within ten days of its receipt or recovery of the Excess Amount; and
9.16.3	the Agent shall treat that payment as if it were a payment by the Security Party in question on account of the sum owed to the Banks as aforesaid and shall account to the Banks in respect of the Excess Amount in accordance with the provisions of this Clause.

However, if a Bank has commenced any Proceedings to recover sums owing to it under the Security Documents and, as a result of, or in connection with, those Proceedings has received an Excess Amount, the Agent shall not distribute any of that Excess Amount to any other Bank which had been notified of the Proceedings

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	and had the legal right to, but did not, join those Proceedings or commence and diligently prosecute separate Proceedings to enforce its rights in the same or another court.
9.17	Rescission of Excess Amount If all or any part of any Excess Amount is rescinded or must otherwise be restored to any of the Security Parties or to any other third party, the Banks which have received any part of that Excess Amount by way of distribution from the Agent pursuant to this Clause shall repay to the Agent for the account of the Bank which originally received or recovered the Excess Amount, the amount which shall be necessary to ensure that the Banks share rateably in accordance with their Proportionate Shares in the amount of the receipt or payment retained, together with interest on that amount at a rate equivalent to that (if any) paid by the Bank receiving or recovering the Excess Amount to the person to whom that Bank is liable to make payment in respect of such amount, and Clause 9.16.3 shall apply only to the retained amount.
9.18	Proceedings Each of the Banks and the Agent shall notify one another of the proposed commencement of any Proceedings under any of the Security Documents prior to their commencement.
9.19	Instructions Where the Agent is authorised or directed to act or refrain from acting in accordance with the instructions of the Banks or of an Instructing Group, each of the Banks shall provide the Agent with instructions within two calendar weeks of the Agent’s request (which request may be made orally or in writing). If a Bank does not provide the Agent with instructions within that period, that Bank shall be bound by the decision of the Agent. Nothing in this Clause shall limit the right of the Agent to take, or refrain from taking, any action without obtaining the instructions of the Banks or an Instructing Group if the Agent in its discretion considers that the situation is sufficiently urgent and reasonably believes it necessary or appropriate to take, or refrain from taking, such action in order to preserve the rights of the Banks under or in connection with the Security Documents. In that event, the Agent will notify the Banks of the action taken by it as soon as reasonably practicable, and the Banks agree to ratify any action taken by the Agent pursuant to this Clause.
9.20	Communications Any Communication under this Clause shall be given, delivered, made or served, in the case of the Agent (in its capacity as Agent or as one of the

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	Banks), and in the case of the other Banks, at the address or fax number indicated in Schedule 1.
9.21	Payments All amounts payable to a Bank under this Clause shall be paid to such account at such bank as that Bank may from time to time direct in writing to the Agent.
9.22	Retirement Subject to a successor being appointed in accordance with this Clause, the Agent may retire as agent and/or security trustee at any time without assigning any reason by giving to the Borrower and the Banks notice of its intention to do so, in which event the following shall apply:-

9.22.1	the Banks may within thirty days after the date of the Agent’s notice appoint a successor to act as agent and/or security trustee or, if they fail to do so, the Agent may appoint any other bank or financial institution as its successor, in each case with the consent of the Borrower in the absence of a continuing Event of Default;
9.22.2	the resignation of the Agent shall take effect simultaneously with the appointment of its successor (and acceptance of such appointment by its successor) on written notice of that appointment and acceptance being given to the Borrower and the Banks;
9.22.3	the Agent shall thereupon be discharged from all further obligations as agent and/or security trustee but shall remain entitled to the benefit of the provisions of this Clause;
9.22.4	the Agent’s duly appointed successor and each of the other parties to this Agreement shall have the same rights and obligations amongst themselves as they would have had if that successor had been a party to this Agreement.

9.23 No fiduciary relationship Except as provided in Clauses 9.3 and 9.14, the Agent shall not have any fiduciary relationship with or be deemed to be a trustee of or for a Bank and nothing contained in any of the Security Documents shall constitute a partnership between any two or more Banks or between the Agent and any Bank.

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9.24	The Agent as a Bank The expression “the Banks” when used in the Security Documents includes the Agent in its capacity as one of the Banks. The Agent shall be entitled to exercise its rights, powers, discretions and remedies under or pursuant to the Security Documents in its capacity as one of the Banks in the same manner as any other Bank and as if it were not also the Agent.
9.25	The Agent as security trustee Unless the context otherwise requires, the expression “the Agent” when used in the Security Documents includes the Agent acting in its capacities both as agent and security trustee.

10 Covenants

10.1 Negative covenants

The Borrower will not without the Agent’s prior written consent (which consent will not be unreasonably withheld or delayed in the case of Clauses 10.1.2, 10.1.4, 10.1.6, 10.1.7, 10.1.10, 10.1.12 or 10.1.13):-

10.1.1	no disposals or third party rights other than the Permitted Encumbrances, dispose of or create or permit to arise or continue any Encumbrance or other third party right on or over all or any part of the Vessels or any other present or future assets or undertaking pledged to the Banks (or to the Agent on the Banks’ behalf) pursuant to the Security Documents; nor
10.1.2	no borrowings other than in the ordinary course of business borrow any money or incur any obligations under leases; nor
10.1.3	no repayments repay any loans made to it other than the Loan, during the continuance of an Event of Default or if notice of repayment is not given to the Agent; nor
10.1.4	no substantial liabilities except in the ordinary course of business, incur any liability to any third party which is in the opinion of the Agent of a substantial nature; nor
10.1.5	no other business engage to any material extent in any business other than the ownership, operation, chartering and management of the Vessels and other vessels and businesses reasonably related thereto; nor

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10.1.6	transactions with affiliates other than transactions reasonably entered into in the ordinary course of business, enter into any transactions with other companies in the Group; nor
10.1.7	no loans or other financial commitments except in the ordinary course of business, make any loan nor enter into any guarantee or indemnity or otherwise voluntarily assume any actual or contingent liability in respect of any obligation of any other person (other than loans to companies within the Group); nor
10.1.8	no dividends at any time following an Event of Default which has not been cured or whilst a breach of covenant hereunder remains uncured, pay any dividends or make any other distributions of a revenue or capital nature to shareholders; nor
10.1.9	no sale of Vessels sell or otherwise dispose of the Vessels or any shares in the Vessels nor agree to do so, unless if the Borrower complies with Clause 5.6; nor
10.1.10	chartering charter a Vessel other than to a first class charterer, or enter into any bareboat charter, or time charter of more than twelve months’ duration; nor
10.1.11	no chartering after Event of Default during the continuation of an Event of Default let any Vessel on charter (other than a pre-existing charter) or renew or extend any charter or other contract of employment of a Vessel (nor agree to do so); nor
10.1.12	no change in management appoint anyone other than the Managers as commercial or technical managers of the Vessels, nor terminate or materially vary the arrangements for the commercial or technical management of the Vessels, nor permit the Managers to sub-contract or delegate the commercial or technical management of the Vessels to any third party; nor
10.1.13	no purchase of additional vessels purchase nor agree to purchase any additional vessels.

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10.2 Positive covenants

10.2.1

Registration of Vessels The Borrower undertakes to maintain the registration of the Vessels under the Bermuda flag or any other flag reasonably acceptable to the Agent for the duration of the Facility Period.

10.2.2

Additional security If and so often as the aggregate of the Valuations of the Vessels plus the value of any additional security for the time being provided to the Banks (or to the Agent on their behalf) pursuant to this Clause shall be less than one hundred and twenty five per centum (125%) of the amount of the Loan (the “Relevant Percentage”), the Borrower will, within thirty days of the request of the Agent to do so, at the Borrower’s option:-

(a)	pay to the Agent or to its nominee a cash deposit in the amount of the shortfall to be secured in favour of the Banks or the Agent on their behalf as additional security for the payment of the Indebtedness; or
(b)	give to the Banks or the Agent on their behalf other additional security in amount and form reasonably acceptable to the Agent in its discretion; or
(c)	prepay the amount of the Indebtedness which will ensure that the aggregate of the Valuations of the Vessels plus the value of any such additional security is not less than the Relevant Percentage of the amount of the Loan.

Clauses 5.4, 5.5, 5.6 and 5.7 shall apply, mutatis mutandis, to any prepayment made pursuant to this Clause and the value of any additional security provided pursuant to this Clause shall be determined by the Agent in its reasonable discretion.

10.2.3 Financial statements The Borrower will supply to the Agent, without request, the semi-annual unaudited management accounts of the Borrower for each six month period ending on 30 June and 31 December in each year during the Facility Period, containing (amongst other things) the Borrower’s profit and loss account for, and balance sheet at the end of, each such

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	financial period, prepared in accordance with generally accepted accounting principles and practices applicable to companies incorporated in the United States of America consistently applied, in each case within one hundred and eighty (180) days of the end of the financial half year to which they relate. Such annual financial statements are to be accompanied by updated details of all off balance sheet and time charter hire commitments.
10.2.4	Other information The Borrower will promptly supply to the Agent such information and explanations as the Agent may from time to time reasonably require in connection with the operation of the Vessels and the Borrower’s profit and liquidity, and will procure that the Agent be given the like information and explanations relating to all other Security Parties.
10.2.5	Evidence of goodstanding The Borrower will from time to time on the request of the Agent provide the Agent with evidence in form and substance reasonably satisfactory to the Agent that the Security Parties remain in good standing.
10.2.6	Evidence of current COFR Without limiting the Borrower’s obligations under Clause 10.2.4, the Borrower will from time to time on the request of the Agent provide the Agent with such evidence as the Banks may reasonably require that the Vessels have a valid and current Certificate of Financial Responsibility pursuant to the United States Oil Pollution Act 1990.
10.2.7	ISM Code compliance The Borrower will:-

(a)	procure that the Vessels remain for the duration of the Facility Period subject to a SMS;
(b)	maintain a valid and current SMC for the Vessels throughout the Facility Period;
(c)	if not itself the ISM Company, procure that the ISM Company maintains a valid and current DOC throughout the Facility Period;

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(d)	promptly notify the Agent in writing of any actual or threatened withdrawal, suspension, cancellation or modification of any Vessel’s SMC or of the ISM Company’s DOC;
(e)	promptly notify the Agent in writing of any “accident” or “major non-conformity”, as each of those terms is defined in the Guidelines on the Implementation of the International Safety Management Code by Administrations adopted by the Assembly of the International Maritime Organisation pursuant to Resolution A.788(19), affecting a Vessel and of the steps being taken to remedy the situation; and
(f)	not without the prior written consent of the Agent (which will not be unreasonably withheld) change the identity of the ISM Company,

	PROVIDED ALWAYS that the provisions of this Clause only apply to Vessel B following its Delivery.
10.2.8	ISPS Code compliance The Borrower will:-

(a)	for the duration of the Facility Period comply with the ISPS Code in relation to each of the Vessels and procure that each of the Vessels and the ISPS Company comply with the ISPS Code;
(b)	maintain a valid and current ISSC for each of the Vessels throughout the Facility Period and provide a copy to the Agent; and
(c)	promptly notify the Agent in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC,

	PROVIDED ALWAYS that the provisions of this Clause only apply to Vessel B following its Delivery.
10.2.9	Annex VI compliance The Borrower will:

(a) for the duration of the Facility Period comply with Annex VI in relation to each Vessel and procure that each Vessel’s master and

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	crew are familiar with, and that each Vessel complies with, Annex VI;
(b)	maintain a valid and current IAPPC for each of the Vessels throughout the Facility Period and provide a copy to the Agent; and
(c)	promptly notify the Agent in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the IAPPC,

	PROVIDED ALWAYS that the provisions of this Clause only apply to Vessel B following its Delivery.
10.2.10	Inspection of records The Borrower will permit the inspection of its financial records and accounts from time to time by the Agent or its nominee during normal business hours PROVIDED ALWAYS that the Agent will give the Borrower three (3) Business Days prior written notice of its intention to inspect the records and will use its reasonable endeavours to ensure that the inspection causes as little unnecessary disruption to the Borrower’s business operations as possible, provided however that, save if a continuing Event of Default is in existence, such inspections shall not occur more than twice in any calendar year.
10.2.11	Pari passu obligations The Borrower will ensure that, throughout the Facility Period, the obligations of the Borrower under or pursuant to the Security Documents rank at least pari passu with all other existing or future indebtedness, obligations or liabilities of the Borrower, other than any mandatorily preferred by law.
10.2.12	Notification of Event of Default The Borrower will promptly notify the Agent in writing of the occurrence of any Event of Default or Potential Event of Default.
10.2.13	Class The Borrower will ensure that each Vessel maintains highest class, free of recommendations and qualifications affecting class unless otherwise agreed by the Agent in writing, and will notify the Agent of the class notation and the classification society for Vessel B at least fifteen days prior to the Tranche B Advance Date.

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10.3 Financial covenants The Borrower covenants that, throughout the Facility Period (with such covenants being assessed on a group basis to include all subsidiaries of the Borrower whose results are consolidated into the results of the Borrower):-

10.3.1	its Market Adjusted Net Worth will be, at all times, at least fifty five million Dollars ($55,000,000);
10.3.2	its ratio of Borrowings to Value Adjusted Equity shall not exceed 2.5:1;
10.3.3	it will maintain Cash Reserves equal to the higher of (a) four million Dollars ($4,000,000) and (b) five per cent (5%) of its bank debt; and
10.3.4	its ratio of EBITDA to Debt Service will be not less than 1:1.

10.4 Compliance certificate The Borrower covenants, on a semi annual basis, to deliver to the Agent a compliance certificate substantially in the form of Schedule 5, duly signed by a director of the Borrower, evidencing compliance with the covenants contained in clause 10.3.

11 Earnings Account

11.1	Maintenance of Accounts The Borrower shall maintain the Accounts with the Account Holder for the duration of the Facility Period free of Encumbrances and rights of set off other than as created by or pursuant to the Security Documents.
11.2	Earnings The Borrower shall procure that there is credited to the Earnings Account all Earnings and any Requisition Compensation in respect of each Vessel.
11.3	Transfers to Retention Account On the day in each calendar month during the Facility Period which numerically corresponds to the Advance Date for each Tranche (or, in any month in which there is no such day, on the last Business Day of that month), the Borrower shall procure that there is transferred from the Earnings Account and irrevocably authorises the Agent to instruct the Account Holder to transfer from the Earnings Account to the Retention Account:-

11.3.1 one-third of the amount of the Repayment Instalment due on the next Repayment Date in respect of that Tranche; and

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11.3.2 the amount of interest due in respect of that Tranche on the next Interest Payment Date divided by the number of months between the last Interest Payment Date and the Interest Payment Date in question.

11.4

Additional payments to Retention Account If for any reason the amount standing to the credit of the Earnings Accounts shall be insufficient to make any transfer to the Retention Account required by Clause 11.3, the Borrower shall, without demand, procure that there is credited to the Retention Account, on the date on which the relevant amount would have been transferred from the Earnings Account, an amount equal to the amount of the shortfall.

11.5

Application of Retention Account The Borrower shall procure that there is transferred from the Retention Account and irrevocably authorises the Agent to instruct the Account Holder to transfer from the Retention Account to the Agent on behalf of the Banks:-

11.5.1	on each Repayment Date, the amount of the Repayment Instalment then due in respect of each Tranche; and
11.5.2	on each Interest Payment Date, the amount of interest then due in respect of each Tranche.

11.6	Borrower’s obligations not affected If for any reason the amount standing to the credit of the Retention Account shall be insufficient to pay any Repayment Instalment or to make any payment of interest when due, the Borrower’s obligation to pay that Repayment Instalment or to make that payment of interest shall not be affected.
11.7	Release of surplus Any amount standing to the credit of the Earnings Account shall (unless an Event of Default or Potential Event of Default shall have occurred and be continuing) be released to or to the order of the Borrower.
11.8	Relocation of Accounts At any time during the continuation of an Event of Default, the Agent may without the consent of the Borrower relocate the Accounts, without prejudice to the continued application of this Clause and the rights of the Banks under or pursuant to the Security Documents. Following the cure of any such Event of Default pursuant to which the Accounts were relocated by the Agent,

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the Borrower may request, but the Agent shall not be obliged, to restore the Accounts to the Account Holder.

11.9

Access to information Subject to Clause 18.20, the Borrower agrees that the Agent (and its nominees) may from time to time during the Facility Period (and in the case of the Earning Account after having given three (3) Business Days notice to the Borrower of its intention to do so) review the records held by the Account Holder (whether in written or electronic form) in relation to the Accounts, and irrevocably waives any right of confidentiality which may exist in relation to those records.

11.10

Statements Without prejudice to the rights of the Agent under Clause 11.9, the Borrower will procure that the Account Holder provides to the Agent, no less frequently than each calendar month during the Facility Period, written statements of account showing all entries made to the credit and debit of each of the Accounts during the immediately preceding calendar month.

12 Events of Default and Application of Monies

12.1

The Agent’s rights If any of the events set out in Clause 12.2 occurs, the Agent may (and, if instructed to do so by an Instructing Group, shall) by notice to the Borrower declare the Banks to be under no further obligation to the Borrower under or pursuant to this Agreement and may (and, if instructed to do so by an Instructing Group, shall) declare all or any part of the Indebtedness (including such unpaid interest as shall have accrued) to be immediately payable, in which event the Indebtedness (or the part of the Indebtedness referred to in the Agent’s notice) shall immediately become due and payable without any further demand or notice of any kind.

12.2

Events of Default The events referred to in Clause 12.1 are:-

12.2.1 payment default if the Borrower defaults in the payment of any part of the Indebtedness when due PROVIDED ALWAYS that if the Borrower can demonstrate to the satisfaction of the Agent that it has given all necessary instructions to effect payment and the non-receipt thereof is attributable to an error in the banking system, such Event of Default shall only occur two (2) Business Days after payment fell due; or

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12.2.2	other default if any of the Security Parties fails to observe or perform any of the covenants, conditions, undertakings, agreements or obligations on its part contained in any of the Security Documents (and, if such breach is in the reasonable opinion of the Agent remediable and does not in any way relate either to (i) the insurances or (ii) the covenants of the Borrower contained in clause 10.2.2 or clause 10.3, it remains unremedied for a period of twenty (20) Business Days) or shall in any other way be in breach of or do or cause to be done any act repudiating or evidencing an intention to repudiate any of the Security Documents in each case after notice to the Borrower; or
12.2.3	misrepresentation or breach of warranty if any representation or warranty made or repeated, or any other written information given, by any of the Security Parties to the Banks or to the Agent in or leading up to or during the currency of any of the Security Documents, or in or pursuant to any notice or other document delivered to the Agent under or pursuant to any of the Security Documents, shall prove to have been false or incorrect or misleading in any material respect when made, repeated or given and is detrimental to the Agent and/or the Banks, and such misrepresentation remains uncured for a period of fifteen (15) Business Days after notice from the Agent; or
12.2.4	execution if a distress or execution or other process of a court or authority is levied on any of the property of any of the Security Parties before or after final judgment or by order of any competent court or authority and is not satisfied within seven days of levy and a Material Adverse Effect results; or
12.2.5	ceasing to trade if any of the Security Parties ceases trading or threatens to cease trading; or
12.2.6	insolvency proceedings

(i) if any Security Party shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a

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bankrupt or insolvent, or seeking reorganisation, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts generally, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets, or any Security Party shall make a general assignment for the benefit of its creditors; or

(ii)	if there shall be a commenced against any Security Party any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded or unstayed for a period of 60 days; or
(iii)	if there shall be commenced against any Security Party any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or
(iv)	if any Security Party shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii) or (iii) above; or
(v)	if any Security Party shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts generally as they become due; or

12.2.7	impossibility or illegality if any event occurs which would, or would with the passage of time, render performance of any of the Security Documents by any of the Security Parties impossible, unlawful or unenforceable by the Banks or the Agent; or
12.2.8	conditions subsequent if any of the conditions set out in Clause 3.3 is not satisfied within the time reasonably required by the Agent; or

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12.2.9	revocation or modification of consents etc. if any consent, licence, approval, authorisation, filing, registration or other requirement of any governmental, judicial or other public body or authority which is now, or which at any time during the Facility Period becomes, necessary to enable any of the Security Parties to comply with any of their obligations in or pursuant to any of the Security Documents is not obtained or is revoked, suspended, withdrawn or withheld, or is modified in a manner which is materially prejudicial to the interests of the Banks; or
12.2.10	curtailment of business if the business of any of the Security Parties is wholly or partially curtailed or suspended by any intervention by or under authority of any government, or if all or a substantial part of the undertaking, property or assets of any of the Security Parties is seized, nationalised, expropriated or compulsorily acquired by or under authority of any government and such event would, or would be likely to, have a Material Adverse Effect; or
12.2.11	loss of Vessel if any Vessel or any other vessel which may from time to time be mortgaged to the Banks (or to the Agent on their behalf) as security for the repayment of all or any part of the Indebtedness is destroyed, abandoned, confiscated, forfeited, condemned as prize or becomes a Total Loss, except that none of the foregoing shall be an Event of Default if:-

(a)	the Vessel or other vessel is insured in accordance with the Security Documents; and
(b)	no insurer has refused to meet or has disputed the claim with respect to such event or any such refusal or dispute that does arise is resolved within thirty (30) days from the date on which the claim is made; and
(c)	payment of all insurance proceeds in respect thereof is made in full to the Agent on behalf of the Banks within thirty days from the date upon which leading underwriters agree to settle the claim or such longer period as the Agent may in its reasonable discretion agree; or

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12.2.12	arrest or detention of Vessel if any Vessel or any other vessel which may from time to time be mortgaged to the Banks (or to the Agent on their behalf) as security for repayment of all or any part of the Indebtedness is arrested or detained and is not released within twenty (20) Business Days; or
12.2.13	acceleration of other indebtedness (a) if any other material financial indebtedness or obligation for borrowed money (which shall include obligations under capitalized leases, foreign exchange contracts or other derivatives contracts) of a Security Party becomes due prior to its stated maturity by reason of default on the part of that Security Party, provided always that this shall only constitute an Event of Default in respect of the Guarantor if it is for a principal amount in excess of fifty million Dollars ($50,000,000); or
12.2.14	challenge to registration if the registration of any Vessels or the Mortgage is contested by the Borrower, the Guarantor or a company within the Group, or becomes void or terminated, or if the validity or priority of the Mortgage is contested; or
12.2.15	war if the country of registration of the Vessels becomes involved in war (whether or not declared) or civil war or is occupied by any other power and the Agent in its reasonable discretion considers that, as a result, the security conferred by the Security Documents is materially prejudiced; or
12.2.16	notice of termination if the Guarantor gives notice to the Agent to limit its obligations under the Guarantee; or
12.2.17	material adverse change etc. if there occurs (in the opinion of the Agent acting reasonably) any material adverse change in the business, affairs or financial condition of the Guarantor (considered together with its Subsidiaries) or the Borrower from that pertaining at the date of this Agreement which jeopardises their ability to meet their respective obligations under the Security Documents as they fall due; or
12.2.18	change of control if any Change of Control occurs; or

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12.2.19	CoAs if any of the CoAs is terminated by reason of default by the Borrower during the Facility Period; or
12.2.20	analogous events if any event which is analogous to any of the events set out in Clauses 12.2.4 or 12.2.6 above shall occur.

12.3 Application of moneys The Agent is irrevocably authorised to apply all sums which it may receive:

12.3.1	pursuant to a sale or other disposition of a Vessel or any right, title or interest in a Vessel; or
12.3.2	by way of payment of any sum in respect of the Insurances, Earnings or Requisition Compensation; or
12.3.3	otherwise arising under or in connection with any Security Document,
	in accordance with Clause 5.6 (if relevant) or otherwise in or towards satisfaction, or by way of retention on account, of the Indebtedness as follows:-

(i)	first in payment of all outstanding fees and expenses of the Agent;
(ii)	secondly in or towards payment of all outstanding interest hereunder;
(iii)	thirdly in or towards payment of all outstanding principal hereunder;
(iv)	fourthly in or towards payment of all other Indebtedness hereunder; and
(v)	fifthly the balance, if any, shall be remitted to the Borrower or whoever may be entitled thereto.

13 Set-Off and Lien

13.1 Set-off The Borrower irrevocably authorises the Agent and the Banks at any time after all or any part of the Indebtedness shall have become due and payable to set off without notice any liability of the Borrower to any of the Banks or the Agent

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(whether present or future, actual or contingent, and irrespective of the branch or office, currency or place of payment) against any credit balance from time to time standing on any account of the Borrower (whether current or otherwise and whether or not subject to notice) with any branch of the Agent or that Bank in or towards satisfaction of the Indebtedness and, in the name of the Agent or that Bank or the Borrower, to do all acts (including, without limitation, converting or exchanging any currency) and execute all documents which may be required to effect such application.

13.2

Lien The Agent and each Bank shall have a lien on and be entitled to retain and realise as additional security for the repayment of the Indebtedness any cheques, drafts, bills, notes or negotiable or non-negotiable instruments and any stocks, shares or marketable or other securities and property of any kind of the Borrower (or of the Agent or that Bank as agent or nominee of the Borrower) from time to time held by the Agent or that Bank, whether for safe custody or otherwise.

13.3

Restrictions on withdrawal Despite any term to the contrary in relation to any deposit or credit balance at any time on any account of the Borrower with the Agent or with any of the Banks, no such deposit or balance shall be repayable or capable of being assigned, mortgaged, charged or otherwise disposed of or dealt with by the Borrower during the Facility Period except in accordance with the Security Documents, but the Agent or any Bank may from time to time permit the withdrawal of all or any part of any such deposit or balance without affecting the continued application of this Clause.

14 Assignment and Sub-Participation

14.1

Right to assign Subject to the prior written consent of the Borrower, such consent not to be unreasonably withheld or delayed, each of the Banks may assign or transfer all or any of its rights under or pursuant to the Security Documents to any other branch of that Bank or to any other bank or financial institution, and may grant sub-participations in all or any part of its Commitment provided that the Agent’s prior written approval has been obtained.

14.2

Borrower’s co-operation The Borrower will co-operate fully with the Banks in connection with any assignment, transfer or sub-participation permitted by this Agreement; will execute and procure the execution of such documents as the Banks

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may reasonably require in connection therewith; and irrevocably authorises the Agent to sign any Transfer Certificate on its behalf in connection with such an assignment, transfer or sub-participation; and, subject to Clause 18.20, irrevocably authorises the Agent and the Banks to disclose to any proposed assignee, transferee or sub-participant (whether before or after any assignment, transfer or sub-participation and whether or not any assignment, transfer or sub-participation shall take place) all information relating to the Security Parties, the Loan or the Security Documents which the Agent or that Bank may in its discretion consider necessary or desirable.

14.3	Rights of assignee Any permitted assignee or transferee of a Bank shall (unless limited by the express terms of the assignment or transfer) take the full benefit of every provision of the Security Documents benefiting that Bank.
14.4	Transfer Certificates If any Bank wishes to transfer any of its rights and/or obligations under or pursuant to this Agreement, it may do so in accordance with the other terms of this Agreement by delivering to the Agent a duly completed Transfer Certificate, in which event on the Transfer Date:-

14.4.1	to the extent that that Bank seeks to transfer its rights and/or obligations, the Borrower (on the one hand) and the Bank in question (on the other) shall be released from all further obligations towards the other(s);
14.4.2	the Borrower (on the one hand) and the Transferee (on the other) shall assume obligations towards the other(s) identical to those released pursuant to Clause 14.4.1;
14.4.3	the Agent, each of the Banks and the Transferee shall have the same rights and obligations between themselves as they would have had if the Transferee had been an original party to this Agreement as a Bank; and
14.4.4	the Transferee shall pay to the Agent for its own account a transfer fee of five thousand Dollars.

Each Bank and the Borrower irrevocably authorises the Agent to sign on its behalf any Transfer Certificate relating to the permitted transfer of any of the rights and/or obligations of any other Bank.

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14.5

Security Documents Unless otherwise expressly provided in any Security Document or otherwise expressly agreed between a Bank and any proposed Transferee and notified by that Bank to the Agent on or before the relevant Transfer Date, there shall automatically be assigned to the Transferee with any transfer of a Bank’s rights and/or obligations under or pursuant to this Agreement the rights of that Bank under or pursuant to the Security Documents (other than this Agreement) which relate to the portion of the Bank’s rights and/or obligations transferred by the relevant Transfer Certificate.

14.6

No increased costs Notwithstanding any other provision of this Agreement or any other Security Document no assignment or transfer by a Bank of all or any of its interest in the Loan, and no grant by a Bank of a sub-participation in the Loan, shall increase the obligations of the Borrower under any Security Document or subject the Borrower to any increased or additional tax, cost or liability under any Security Document, determined by reference to the laws in effect at the time of such assignment, transfer or grant of a sub-participation.

15 Payments, Mandatory Prepayment, Reserve Requirements and Illegality

15.1

Payments All amounts payable by the Borrower under or pursuant to any of the Security Documents shall be paid to such accounts at such banks as the Agent may from time to time direct to the Borrower, and (unless payable in any other Currency of Account) shall be paid in Dollars in same day funds (or such funds as are required by the authorities in the United States of America for settlement of international payments for immediate value). Payments shall be deemed to have been received by the Agent on the date on which the Agent receives authenticated advice of receipt, unless that advice is received by the Agent on a day other than a Business Day or at a time of day (whether on a Business Day or not) when the Agent in its discretion considers that it is impossible or impracticable for the Agent to utilise the amount received for value that same day, in which event the payment in question shall be deemed to have been received by the Agent on the Business Day next following the date of receipt of advice by the Agent.

15.2

No deductions or withholdings All payments (whether of principal or interest or otherwise) to be made by the Borrower pursuant to the Security Documents shall, subject only to Clause 15.3, be made free and clear of and without deduction for or

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on account of any Taxes or other deductions, withholdings, restrictions, conditions or counterclaims of any nature.

15.3	Grossing-up If at any time any law requires (or is interpreted to require) the Borrower to make any deduction or withholding from any payment, or to change the rate or manner in which any required deduction or withholding is made, the Borrower will promptly notify the Agent and, simultaneously with making that payment, will pay to the Agent whatever additional amount (after taking into account any additional Taxes on, or deductions or withholdings from, or restrictions or conditions on, that additional amount) is necessary to ensure that, after making the deduction or withholding, the Agent and the Banks receive a net sum equal to the sum which they would have received had no deduction or withholding been made.
15.4	Evidence of deductions If at any time the Borrower is required by law to make any deduction or withholding from any payment to be made by it pursuant to any of the Security Documents, the Borrower will pay the amount required to be deducted or withheld to the relevant authority within the time allowed under the applicable law and will, no later than thirty days after making that payment, deliver to the Agent an original receipt issued by the relevant authority, or other evidence acceptable to the Agent, evidencing the payment to that authority of all amounts required to be deducted or withheld.
15.5	Rebate If the Borrower pays any additional amount under Clause 15.3, and a Finance Party subsequently receives a refund or allowance from any tax authority which that Finance Party identifies as being referable to that increased amount so paid by the Borrower, that Finance Party shall, as soon as reasonably practicable, pay to the Borrower an amount equal to the amount of the refund or allowance received, if and to the extent that it may do so without prejudicing its right to retain that refund or allowance and without putting itself in any worse financial position than that in which it would have been had the relevant deduction or withholding not been required to have been made. Nothing in this Clause 15.5 shall be interpreted as imposing any obligation on any Finance Party to apply for any refund or allowance nor as restricting in any way the manner in which any Finance Party organises its tax affairs, nor as imposing on any Finance Party any obligation to

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disclose to the Borrower any information regarding its tax affairs or tax computations.

15.6	U.S. Forms Each Bank which is organised under the laws of a jurisdiction outside the United States of America shall deliver to the Borrower at or before the time such Bank acquires its interest in the Loan (and from time to time thereafter upon the reasonable written request of the Borrower, but only if such Bank is legally entitled to do so) a completed, executed and valid United States Internal revenue Service Form W-8BEN, 2-8ECI, or W-8EXP (or applicable successor form).
15.7	Adjustment of due dates If any payment or transfer of funds to be made under any of the Security Documents, other than a payment of interest on the Loan, shall be due on a day which is not a Business Day, that payment shall be made on the next succeeding Business Day (unless the next succeeding Business Day falls in the next calendar month in which event the payment shall be made on the next preceding Business Day). Any such variation of time shall be taken into account in computing any interest in respect of that payment.
15.8	Change in law If, by reason of the introduction of any law, or any change in any law, or the interpretation or administration of any law, or in compliance with any request or requirement from any central bank or any fiscal, monetary or other authority:-

15.8.1	any Bank or the Agent (or the holding company of any Bank or the Agent) shall be subject to any Tax with respect to payments of all or any part of the Indebtedness; or
15.8.2	the basis of Taxation of payments to any Bank or to the Agent in respect of all or any part of the Indebtedness shall be changed; or
15.8.3	any reserve requirements shall be imposed, modified or deemed applicable against assets held by or deposits in or for the account of or loans by any branch of any Bank; or
15.8.4	the manner in which any Bank or the Agent allocates capital resources to its obligations under this Agreement or any ratio (whether cash, capital adequacy, liquidity or otherwise) which any Bank or the Agent is required or requested to maintain shall be affected; or

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15.8.5 there is imposed on any Bank or on the Agent (or on the holding company of any Bank or the Agent) any other condition in relation to the Indebtedness or the Security Documents;

	and the result of any of the above shall be to increase the cost to any Bank (or to the holding company of any Bank) of that Bank making or maintaining its Commitment, or to cause any Bank to suffer (in its opinion) a material reduction in the rate of return on its overall capital below the level which it reasonably anticipated at the date of this Agreement and which it would have been able to achieve but for its entering into this Agreement and/or performing its obligations under this Agreement, the Bank affected shall notify the Agent and the Borrower shall from time to time pay to the Agent on demand for the account of the Bank affected the amount which shall compensate that Bank or the Agent (or the holding company) for such additional cost or reduced return. A certificate signed by an authorised signatory of the Agent or of the Bank affected setting out the amount of that payment and the basis of its calculation shall be submitted to the Borrower and shall be conclusive evidence of such amount save for manifest error or on any question of law.
15.9	Illegality Notwithstanding anything contained in the Security Documents, the obligations of a Bank to advance or maintain its Commitment shall terminate in the event that a change in any law or in the interpretation of any law by any authority charged with its administration shall make it unlawful for that Bank to advance or maintain its Commitment. In that event the Bank affected shall notify the Agent and the Agent shall, by written notice to the Borrower, declare the Banks’ obligations to be immediately terminated. If all or any part of the Loan shall have been advanced by the Bank to the Borrower, the Indebtedness (including all accrued interest) shall be prepaid within thirty days from the date of such notice. Clause 5.4 shall not apply to that prepayment if it is made on a day other than the last day of an Interest Period.
15.10	Changes in market circumstances If at any time a Bank determines (which determination shall be final and conclusive and binding on the Borrower) that, by reason of changes affecting the London Interbank market, either adequate and fair means do not exist for ascertaining the rate of interest on the Loan pursuant to this

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Agreement or the cost to one or more Banks of obtaining matching deposits for any Interest Period would be in excess of LIBOR:-

15.10.1	that Bank shall give notice to the Agent and the Agent shall give notice to the Borrower of the occurrence of such event; and
15.10.2	the Agent shall as soon as reasonably practicable certify to the Borrower in writing the effective cost to the Bank of maintaining the Loan for such further period as shall be selected by the Bank and the rate of interest payable by the Borrower for that period; or, if that is not acceptable to the Borrower; and
15.10.3	the Agent on behalf of the Bank will negotiate with the Borrower in good faith with a view to modifying this Agreement to provide a substitute basis for the Loan which is financially a substantial equivalent to the basis provided for in this Agreement.

If, within thirty days of the giving of the notice referred to in Clause 15.10.1, the Borrower and the Agent fail to agree in writing on a substitute basis for the Loan, the Borrower will compensate the Banks for their additional costs or the Borrower will immediately prepay the Indebtedness. Clause 5.4 shall apply to that prepayment if it is made on a day other than the last day of an Interest Period.

15.11

Non-availability of currency If a Bank is for any reason unable to obtain Dollars in the London Interbank market and is, as a result, or as a result of any other contingency affecting the London Interbank market, unable to advance or maintain its Commitment in Dollars, that Bank shall give notice to the Agent and the Agent shall give notice to the Borrower and that Bank’s obligations to make the Loan available shall immediately cease. In that event, if all or any part of the Loan shall have been advanced by that Bank to the Borrower, the Agent on behalf of that Bank will negotiate with the Borrower in good faith with a view to establishing a mutually acceptable basis for funding the Loan from an alternative source. If the Agent and the Borrower have failed to agree in writing on a basis for funding the Loan from an alternative source by 11.00 a.m. on the second Business Day prior to the end of the then current Interest Period, the Borrower will (without prejudice to its other obligations under or pursuant to this Agreement, including, without limitation, its obligation to pay interest on the Loan, arising on the expiry of the

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then current Interest Period) prepay that Bank’s portion of the Indebtedness to the Agent on behalf of that Bank on the expiry of the then current Interest Period.

16 Communications

16.1 Method Except for Communications pursuant to Clause 9, which shall be made or given in accordance with Clause 9.20, any Communication may be given, delivered, made or served (as the case may be) under or in relation to this Agreement by letter or fax and shall be in the English language and sent addressed:-

16.1.1	in the case of the Banks or the Agent to the Agent at its address at the head of this Agreement (fax no: +31 10 436 2957) marked for the attention of: Doina van Tooren-Rotari; and
16.1.2	in the case of the Borrower to the Communications Address;

	or to such other address or fax number as the Banks, the Agent or the Borrower may designate for themselves by written notice to the others.
16.2	Timing A Communication shall be deemed to have been duly given, delivered, made or served to or on, and received by, the other party:-

16.2.1	in the case of a fax when the sender receives one or more transmission reports showing the whole of the Communication to have been transmitted to the correct fax number;
16.2.2	if delivered to an officer of the recipient or left at the address specified in Clause 16.1 at the time of delivery or leaving; or
16.2.3	if posted, upon receipt.

16.3 Indemnity The Borrower shall indemnify the Agent and each Bank against any cost, claim, liability, loss or expense (including legal fees and any Value Added Tax or any similar or replacement tax (if applicable)) which the Agent or any Bank may sustain or incur as a consequence of any Communication sent by or on behalf of the Borrower by fax not being received by its intended recipient, or being received incomplete, or by reason of any Communication purportedly having been sent by or on behalf of the Borrower having been sent fraudulently.

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16.4 Loans Administration Form The Borrower undertakes to provide a completed Loans Administration Form (as provided by the Agent) which, amongst other things, shall provide the Agent with the list of authorised persons (“Authorised Persons”) who, on behalf of the Borrower, may make information requests or communicate generally with the Agent in relation to the ongoing administration of the Facility by the Agent throughout the Facility Period. The Authorised Persons shall also be the point of first contact with the Borrower for the Agent in relation to the administration of the Facility. The list of Authorised Persons may only be amended or varied by an Authorised Person or a director of the Borrower.

17 General Indemnities

17.1

Currency In the event of the Agent or a Bank receiving or recovering any amount payable under any of the Security Documents in a currency other than the Currency of Account, and if the amount received or recovered is insufficient when converted into the Currency of Account at the date of receipt to satisfy in full the amount due, the Borrower shall, on the Agent’s written demand, pay to the Agent such further amount in the Currency of Account as is sufficient to satisfy in full the amount due and that further amount shall be due to the Agent on behalf of the Banks as a separate debt under this Agreement.

17.2

Costs and expenses The Borrower will, within fourteen days of the Agent’s written demand, reimburse the Agent on behalf of itself and the Banks for all reasonable costs and expenses (including Value Added Tax or any similar or replacement tax if applicable) of and incidental to:-

17.2.1	the negotiation, preparation, execution and registration of the Security Documents (whether or not any of the Security Documents are actually executed or registered and whether or not all or any part of the Loan is advanced);
17.2.2	any amendments, addenda or supplements to any of the Security Documents (whether or not completed);
17.2.3	any other documents which may at any time be required by any Bank or by the Agent to give effect to any of the Security Documents or which any Bank or the Agent is entitled to call for or obtain pursuant to any of the

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Security Documents (including, without limitation, all premiums and other sums from time to time payable by the Agent in relation to the Mortgagees’ Insurances); and

17.2.4 the exercise of the rights, powers, discretions and remedies of the Banks and/or the Agent under or pursuant to the Security Documents.

17.3	Events of Default The Borrower shall indemnify the Banks and the Agent from time to time on demand against all losses and costs incurred or sustained by any Bank or by the Agent as a consequence of any Event of Default, including (without limitation) any Break Costs.
17.4	Funding costs The Borrower shall indemnify the Banks and the Agent from time to time on demand against all losses and costs incurred or sustained by any Bank or by the Agent if, for any reason, any Drawing is not advanced to the Borrower after the relevant Drawdown Notice has been given to the Agent, or is advanced on a date other than that requested in the Drawdown Notice (unless, in either case, as a result of any default by the Agent or by any of the Banks), including (without limitation) any Break Costs.
17.5	Protection and enforcement The Borrower shall indemnify the Banks and the Agent from time to time on demand against all losses, costs and liabilities which any Bank or the Agent may from time to time sustain, incur or become liable for in or about the protection, maintenance or enforcement of the rights conferred on the Banks and/or the Agent by the Security Documents or in or about the exercise or purported exercise by the Banks and/or the Agent of any of the rights, powers, discretions or remedies vested in them under or arising out of the Security Documents, or in connection with any third party liability claims (including but not limited to environmental or pollution claims) including (without limitation) any losses, costs and liabilities which any Bank or the Agent may from time to time sustain, incur or become liable for by reason of the Banks or the Agent being mortgagees of the Vessels and/or a lender to the Borrower, or by reason of any Bank or the Agent being deemed by any court or authority to be an operator or controller, or in any way concerned in the operation or control, of a Vessel.
17.6	Liabilities of Banks and Agent The Borrower will from time to time reimburse the Banks and the Agent on demand for all sums which any Bank or the Agent may

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pay or become actually or contingently liable for on account of the Borrower or in connection with the Vessels (whether alone or jointly or jointly and severally with any other person) including (without limitation) all sums which the Bank may pay or guarantees which any Bank or the Agent may give in respect of the Insurances, any expenses incurred by any Bank or by the Agent in connection with the maintenance or repair of any Vessel or in discharging any lien, bond or other claim relating in any way to any Vessel, and any sums which any Bank or the Agent may pay or guarantees which they may give to procure the release of any Vessel from arrest or detention.

17.7 Taxes The Borrower shall pay all Taxes to which all or any part of the Indebtedness or any of the Security Documents may be at any time subject and shall indemnify the Agent and the Banks on demand against all liabilities, costs, claims and expenses resulting from any omission to pay or delay in paying any such Taxes.

18 Miscellaneous

18.1	Waivers No failure or delay on the part of the Agent or a Bank in exercising any right, power, discretion or remedy under or pursuant to any of the Security Documents, nor any actual or alleged course of dealing between the Agent and any Bank and the Borrower, shall operate as a waiver of, or acquiescence in, any default on the part of any Security Party, unless expressly agreed to do so in writing by the Agent, nor shall any single or partial exercise by the Agent or a Bank of any right, power, discretion or remedy preclude any other or further exercise of that right, power, discretion or remedy, or the exercise by the Agent or a Bank of any other right, power, discretion or remedy.
18.2	No oral variations No variation or amendment of any of the Security Documents shall be valid unless in writing and signed on behalf of the Borrower and the Agent.
18.3	Severability If at any time any provision of any of the Security Documents is invalid, illegal or unenforceable in any respect that provision shall be severed from the remainder and the validity, legality and enforceability of the remaining provisions shall not be affected or impaired in any way.

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18.4	Successors etc. The Security Documents shall be binding on the Security Parties and on their successors and permitted transferees and assignees, and shall inure to the benefit of the Banks and the Agent and their respective successors, transferees and assignees. The Borrower may not assign nor transfer any of its rights under or pursuant to any of the Security Documents without the prior written consent of the Agent.
18.5	Further assurance If any provision of the Security Documents shall be invalid or unenforceable in whole or in part by reason of any present or future law or any decision of any court, or if the documents at any time held by the Banks or by the Agent on their behalf are considered by the Banks for any reason insufficient to carry out the terms of this Agreement, then from time to time the Borrower will promptly, on demand by the Agent, execute or procure the execution of such further documents as in the reasonable opinion of the Agent are necessary to provide adequate security for the repayment of the Indebtedness.
18.6	Other arrangements The Banks and the Agent may, without prejudice to their rights under or pursuant to the Security Documents, at any time and from time to time, on such terms and conditions as they may in their discretion determine, and without notice to the Borrower, grant time or other indulgence to, or compound with, any other person liable (actually or contingently) to the Banks and/or the Agent in respect of all or any part of the Indebtedness, and may release or renew negotiable instruments and take and release securities and hold funds on realisation or suspense account without affecting the liabilities of the Borrower or the rights of the Banks and the Agent under or pursuant to the Security Documents.
18.7	Advisers The Borrower irrevocably authorises the Agent, at any time and from time to time during the Facility Period, to consult insurance advisers on any matters relating to the Insurances, including, without limitation, the collection of insurance claims, and from time to time to consult or retain advisers or consultants to monitor or advise on any other claims relating to the Vessels. Subject to such confidentiality agreements as the Borrower may reasonably require, the Borrower will provide such advisers and consultants with all information and documents which they may from time to time reasonably require and will reimburse the Agent on demand for all reasonable costs and expenses incurred by the Agent in connection with the consultation or retention of such advisers or consultants.

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18.8	Delegation The Banks and the Agent may at any time and from time to time delegate to any person any of their rights, powers, discretions and remedies pursuant to the Security Documents on such terms as they may consider appropriate (including the power to sub-delegate).
18.9	Rights etc. cumulative Every right, power, discretion and remedy conferred on the Banks and/or the Agent under or pursuant to the Security Documents shall be cumulative and in addition to every other right, power, discretion or remedy to which they may at any time be entitled by law or in equity. The Banks and the Agent may exercise each of their rights, powers, discretions and remedies as often and in such order as they deem appropriate. The exercise or the beginning of the exercise of any right, power, discretion or remedy shall not be interpreted as a waiver of the right to exercise that or any other right, power, discretion or remedy either simultaneously or subsequently.
18.10	No enquiry The Banks and the Agent shall not be concerned to enquire into the powers of the Security Parties or of any person purporting to act on behalf of any of the Security Parties, even if any of the Security Parties or any such person shall have acted in excess of their powers or if their actions shall have been irregular, defective or informal, whether or not any Bank or the Agent had notice thereof.
18.11	Continuing security The security constituted by the Security Documents shall be continuing and shall not be satisfied by any intermediate payment or satisfaction until the Indebtedness shall have been repaid in full and neither the Banks nor the Agent shall be under any further actual or contingent liability to any third party in relation to the Vessels, the Insurances, Earnings or Requisition Compensation or any other matter referred to in the Security Documents.
18.12	Security cumulative The security constituted by the Security Documents shall be in addition to any other security now or in the future held by the Banks or by the Agent for or in respect of all or any part of the Indebtedness, and shall not merge with or prejudice or be prejudiced by any such security or any other contractual or legal rights of the Banks or the Agent, nor affected by any irregularity, defect or informality, or by any release, exchange or variation of any such security. Section 93 of the Law of Property Act 1925 and all provisions which the Agent considers analogous thereto under the law of any other relevant jurisdiction shall not apply to the security constituted by the Security Documents.

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18.13	No liability Neither the Banks nor the Agent nor any agent or employee of any Bank or of the Agent, nor any receiver and/or manager appointed by the Agent, shall be liable for any losses which may be incurred in or about the exercise of any of the rights, powers, discretions or remedies of the Banks and/or the Agent under or pursuant to the Security Documents nor liable as mortgagee in possession for any loss on realisation or for any neglect or default of any nature for which a mortgagee in possession might otherwise be liable except for the consequences of gross negligence or wilful misconduct.
18.14	Rescission of payments etc. Any discharge, release or reassignment by the Banks and/or the Agent of any of the security constituted by, or any of the obligations of any Security Party contained in, any of the Security Documents shall be (and be deemed always to have been) void if any act (including, without limitation, any payment) as a result of which such discharge, release or reassignment was given or made is subsequently wholly or partially rescinded or avoided by operation of any law.
18.15	Subsequent Encumbrances If the Agent receives notice of any subsequent Encumbrance (other than a Permitted Encumbrance) affecting any Vessel or all or any part of the Insurances, Earnings or Requisition Compensation or the Accounts, the Agent may open a new account in its books for the Borrower. If the Agent does not open a new account, then (unless the Agent gives written notice to the contrary to the Borrower) as from the time of receipt by the Agent of notice of such subsequent Encumbrance, all payments made to the Agent shall be treated as having been credited to a new account of the Borrower and not as having been applied in reduction of the Indebtedness.
18.16	Releases If any Bank or the Agent shall at any time release any party from all or any part of any of the Security Documents, the liability of any other party to the Security Documents shall not be varied or diminished.
18.17	Discretions Unless otherwise expressly indicated, where any Bank or the Agent is stated in the Security Documents to have a discretion and/or where the opinion of any Bank or the Agent is referred to and/or where the consent, agreement or approval of any Bank or the Agent is required for any course of action, or where anything is required to be acceptable to any Bank or the Agent, the Banks and the Agent shall have a sole, absolute and unfettered discretion and/or may give or

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withhold its consent, agreement or approval at their sole, absolute and unfettered discretion.

18.18	Certificates Any certificate or statement signed by an authorised signatory of the Agent purporting to show the amount of the Indebtedness (or any part of the Indebtedness) or any other amount referred to in any of the Security Documents shall, save for manifest error or on any question of law, be conclusive evidence as against the Borrower of that amount.
18.19	Survival of representations and warranties The representations and warranties on the part of the Borrower contained in this Agreement shall survive the execution of this Agreement and the advance of the Loan.
18.20	Confidentiality Neither the Agent nor any Bank shall disclose any Confidential Information to any person without the consent of the Borrower, other than (a) to the Agent’s or such Bank’s affiliates and their officers, directors, employees, agents and advisors and to actual or prospective 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 governmental authority or examiner regulating such Bank, (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 Security Parties received by it from such Bank, (e) in connection with any litigation or proceeding to which the Agent or such bank or any of its affiliates may be a party or (f) in connection with the exercise of any right or remedy under this Agreement or any other Security Document.
18.21	Counterparts This Agreement may be executed in any number of counterparts each of which shall be original but which shall together constitute the same instrument.
18.22	Contracts (Rights of Third Parties) Act 1999 No term of this Agreement is enforceable by a person who is not a party to it.

19 Law and Jurisdiction

19.1 Governing law This Agreement shall in all respects be governed by and interpreted in accordance with English law.

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19.2	Jurisdiction For the exclusive benefit of the Banks and the Agent, the parties to this Agreement irrevocably agree that the courts of England are to have jurisdiction to settle any disputes which may arise out of or in connection with this Agreement and that any Proceedings may be brought in those courts.
19.3	Alternative jurisdictions Nothing contained in this Clause shall limit the right of the Banks or the Agent to commence any Proceedings against the Borrower in any other court of competent jurisdiction nor shall the commencement of any Proceedings against the Borrower in one or more jurisdictions preclude the commencement of any Proceedings in any other competent jurisdiction, whether concurrently or not.
19.4	Waiver of objections The Borrower irrevocably waives any objection which it may now or in the future have to the laying of the venue of any Proceedings in any court referred to in this Clause, and any claim that those Proceedings have been brought in an inconvenient or inappropriate forum, and irrevocably agrees that a judgment in any Proceedings commenced in any such court shall be conclusive and binding on it and may be enforced in the courts of any other competent jurisdiction.
19.5	Service of process Without prejudice to the right of the Agent and the Banks to use any other method of service permitted by law, the Borrower irrevocably agrees that any writ, notice, judgment or other legal process shall be sufficiently served on it if addressed to it and left at or sent by post to the Address for Service, and in that event shall be conclusively deemed to have been served at the time of leaving or if posted, upon receipt.

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IN WITNESS of which the parties to this Agreement have executed this Agreement the day and year first before written.

SIGNED by	)	/s/ Jeffrey D. Barth
duly authorised for and on behalf	)	Jeffrey D. Barth
of GYPSUM TRANSPORTATION	)
LIMITED	)
SIGNED by Ian Mace	)	/s/ Ian Mace
duly authorised for and on behalf	)	Attorney-in-fact
of DVB BANK SE	)
(as a Bank)	)
SIGNED by Ian Mace	)	/s/ Ian Mace
duly authorised for and on behalf	)	Attorney-in-fact
of DVB BANK SE	)
(as Agent and Security Trustee)	)

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SCHEDULE 1

The Banks and the Commitments

The Banks	The Commitments
DVB Bank SE	US$90,000,000
Parklaan 2
3016BB Rotterdam
The Netherlands
Fax no: +31 10 436 2957
Attn: Doina van Tooren-Rotari

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SCHEDULE 2

Form of Mortgage

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Bermuda Government
Department of Maritime Administration

THE MERCHANT SHIPPING (REGISTRATION OF SHIPS) REGULATIONS 2003

MORTGAGE OF A SHIP
to secure Account Current etc.

The mortgage reference No. (issued by the mortgagee) is:

SECTION 1: DETAILS OF THE SHIP
Name of ship	Gypsum Centennial
Official number	733699
IMO number	9228734
Number, year and port of registry	20/2001, Hamilton

SECTION 2: THE MORTGAGE

Whereas there is

an account current

(State “an account current” or write in a short description)

Between

Gypsum Transportation Limited, a company incorporated in Bermuda and having its registered office at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda

*as joint mortgagor(s) (hereinafter called “the mortgagor”)

(Give full name and address with place of business in respect of a company).

and

DVB Bank SE, an institution incorporated under the laws of Germany acting through its place of business at Parklaan 2, 3016BB Rotterdam, The Netherlands

*as joint mortgagee(s) (hereinafter called “the mortgagee”)

(Give full name and address with place of business in respect of a company).

regulated by (i) a secured loan facility agreement dated [  ] 2008 and entered into between (i) the Mortgagor as borrower, (2) the banks listed in Schedule 1 therein as lenders and (3) the Mortgagee acting as agent and security trustee (which said secured loan facility agreement may from time to time be amended, varied and/or supplemented are hereinafter called the “Loan Agreement”) and (ii) a deed of covenants collateral to this Mortgage dated [  ] 2008 (hereinafter as the same may from time to time be amended, varied and/or supplemented called the “Deed of Covenants”) made between (1) the Mortgagor and (2) the Mortgagee and whereas pursuant to the Loan Agreement the Mortgagor has agreed to execute this Mortgage for the purpose of securing payment by the Mortgagor to the Mortgagee of all sums for the time being and from time to time owing to the Mortgagee in the manner and at the times set forth in the Loan Agreement and the Deed of Covenants and in order to secure the performance of all the obligations of the Mortgagor under the Loan Agreement and the Deed of Covenants and whereas the amount of principal and interest and any other moneys due at any given time can be ascertained by reference to the Loan Agreement and the Deed of Covenants and/or the books of account (or other accounting records) of the Mortgagee.

(Describe fully the nature of the liabilities secured. You may refer to another document.)

*Delete as necessary

ROSF. C203 (Rev. 04/03)	Page 1 of 4
Prescribed by the Minister of Transport

SECTION 2: THE MORTGAGE (continued)

*Complete in respect of “account current” :

Now *I/we the mortgagor in consideration of the advance made or to be made to *me/us by the mortgagee, bind *myself/ourselves to pay to the mortgagee the sums for the time being due on this security whether by way of principal interest or otherwise at the time(s) and in the manner mentioned above.

For the purpose of better securing to the mortgagee the *sums/obligation mentioned above. *I/we hereby mortgage to the mortgagee(s) 64/64^th (sixty four/sixty fourth) (figures and words)

Shares of which *I am/we are the owners in the ship described above and in its appurtenances.

Lastly, *I/we for *myself/ourselves, hereby declare that *I/we have the power to mortgage in the manner aforesaid the above-mentioned shares and that they are free from encumbrances *save as appears by the registry of the above ship.

COMPLETE IF THE MORTGAGOR IS A COMPANY

Executed by the mortgagor(s) as a deed on this                            day		of                                         20                     by:
	(a)   the affixing of the common seal of the mortgagor in the presence of the following persons signing; or
	(b)   signing by the following persons;
	Director
	*Director/Secretary
	Authorised Signatory	*Authorised Signatory
	Witnessed by	Witness Name
	Witness Address

     Note: In Scotland — signature may be by two directors: or by a director and the secretary of the company; or by any two persons authorized to sign and subscribe the documents on behalf of the company.

Except in Scotland — signature may be by two directors: or by a director and the secretary of the company; If the common seal is affixed, any special requirements of the company’s articles about signing must be complied with.

FOR OFFICIAL USE ONLY:
Entry in Register made	(date)	Registrar of Shipping
	(time)	Hamilton, Bermuda

COMPLETE IF THE MORTGAGOR IS/ARE ONE OR MORE INDIVIDUAL

*Executed as a deed (in England or Wales) * Signed (in Scotland) *Signed, sealed and delivered (in Northern Ireland)

on this                                          day of                                          20                    

by the following person(s) signing as mortgagor

Signature of mortgagor

Full name of witness(es)

Signature of witness(es)

Occupation of witness(es)

Address of witness(es)

ROSF. C203 (Rev. 04/03)	Page 2 of 4
Prescribed by the Minister of Transport

SECTION 3: TRANSFER OF MORTGAGE

*I/we, the above-mentioned mortgagee, in consideration of

(Enter the sum of money or the nature of the obligation).

this day

(Enter “paid to *me/us,” or narrative suitable to the obligation.

by

(Give full name and address of the transferee, with the place of business in respect of a company).

hereby transfer to *him/her/them the benefit of the within written security. *Delete as necessary

COMPLETE IF THE TRANSFEROR IS A COMPANY

Executed by the transferor as a deed on this                             day                                          20                     by:
	(a)   the affixing of the common seal of the transferor in the presence of the following persons signing; or
	(b)   signing by the following persons;
	Director
	*Director/Secretary
	Authorised Signatory	*Authorised Signatory
	Witnessed by	Witness Name
	Witness Address

Note: In Scotland — signature may be by two directors: or by a director and the secretary of the company; or by any two persons authorized to sign and subscribe the documents on behalf of the company.

Except in Scotland — signature may be by two directors: or by a director and the secretary of the company; If the common seal is affixed, any special requirements of the company’s articles about signing must be complied with.

FOR OFFICIAL USE ONLY:
Entry in Register made	(date)	Registrar of Shipping
	(time)	Hamilton, Bermuda

COMPLETE IF THE TRANSFEROR IS/ARE ONE OR MORE INDIVIDUAL

*Executed as a deed (in England or Wales) * Signed (in Scotland) *Signed, sealed and delivered (in Northern Ireland)

on this                                     day of                                          20                    by

the following person(s) signing as transferor

Signature of transferor

Full name of witness(es)

Signature of witness(es)

Occupation of witness(es)

Address of witness(es)

ROSF. C203 (Rev. 04/03)	Page 3 of 4
Prescribed by the Minister of Transport

SECTION 4: DISCHARGE OF MORTGAGE

* Received by the within-mentioned *mortgagee/transferee of the mortgage,

(Enter “the sum of                                           ”, or narrative suitable to the obligation).

This within written security is now discharged.

*The within mentioned *mortgagee/transferee have agreed to discharge this within written security and it is therefore discharged.

COMPLETE IF THE DISCHARGE IS GIVEN BY A COMPANY

Executed by the * mortgagee/transferee as a deed on this                             day of                                          20                     by:
	(a)   the affixing of the common seal of the *mortgagee/transferee in the presence of the following persons signing; or
	(b)   signing by the following persons;
	Director
	*Director/Secretary
	Authorised Signatory	*Authorised Signatory
	Witness	Witness Name
	Witness Address

Note: In Scotland — signature may be by two directors: or by a director and the secretary of the company; or by any two persons authorized to sign and subscribe the documents on behalf of the company.

Except in Scotland — signature may be by two directors: or by a director and the secretary of the company; If the common seal is affixed, any special requirements of the company’s articles about signing must be complied with.

FOR OFFICIAL USE ONLY:
Entry in Register made	(date)	Registrar of Shipping,
	(time)	Hamilton, Bermuda

COMPLETE IF THE DISCHARGE IS GIVEN BY ONE OR MORE INDIVIDUALS

*Executed as a deed (in England or Wales) * Signed (in Scotland) *Signed, sealed and delivered (in Northern Ireland)

on this                                          day of                                            20                      by

the following person(s) signing as *mortgagee(s)/transferee

Signature of *mortgagee/transferee(s)

Full name of witness(es)

Signature of witness(es)

Occupation of witness(es)

Address of witness(es)

Please send this completed form and relevant fee to the Registrar.

Department of Maritime Administration
P.O. Box HM 1628
Hamilton HM GX
Bermuda

ROSF. C203 (Rev. 04/03)	Page 4 of 4
Prescribed by the Minister of Transport

EXECUTION VERSION

DATED                2008

GYPSUM TRANSPORTATION LIMITED

- and -

DVB BANK SE

DEED OF COVENANTS
m.v. “GYPSUM CENTENNIAL”

STEPHENSON HARWOOD
One St. Paul’s Churchyard
London EC4M 8SH
Tel: +44 (0)20-7329 4422
Fax: +44 (0)20-7329 7100
Ref: 819/1575/47-00986

CONTENTS

	Page
1   Definitions and Interpretation		2
2   Representations and Warranties		3
3   Covenant to Pay and Perform		4
4   Mortgage and Amount Secured		4
5   Insurance		5
6   Operation and Maintenance		10
7   Mortgagee’s Powers		16
8   Ancillary Provisions		17
9   Receiver		19
10 Application of Moneys		20
11 Power of Attorney		20
12 Partial Invalidity		21
13 Further Assurance		21
14 Miscellaneous		21
15 Discharge of Security		22
16 Notices		22
17 Counterparts		22
18 Law and Jurisdiction		22

DEED OF COVENANTS

Dated:                 2008

BETWEEN:

(1) GYPSUM TRANSPORTATION LIMITED, a company incorporated according to the law of Bermuda whose registered office is at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda (the “Owner”).

(2) DVB BANK SE with its registered office in Frankfurt and acting through its office at Parklaan 2, 3016BB Rotterdam, The Netherlands (the “Mortgagee”).

WHEREAS:

(A) Each of the banks listed in Schedule 1 to the Loan Agreement (as defined below) (collectively the “Lenders”) has agreed to advance to the Owner its respective Commitment of an aggregate amount not exceeding the total of (i) the lesser of forty million Dollars ($40,000,000) and fifty per centum (50%) of the Market Value of Vessel A (in respect of Tranche A) and (ii) the lesser of fifty million Dollars ($50,000,000) and fifty per centum (50%) of the Market Value of Vessel B (in respect of Tranche B) (the “Loan”) on the terms and subject to the conditions set out in a loan agreement dated                   2008 made between the Owner (as borrower), the Lenders (as lenders), the Mortgagee as agent for the Lenders (the “Agent”) and the Mortgagee as security trustee for the Lenders (the “Security Trustee”) (the “Loan Agreement”).

(B) Pursuant to the Loan Agreement, and as a condition precedent to the several obligations of the Lenders to make the Loan available to the Owner, the Owner has, amongst other things, agreed to execute and deliver in favour of the Mortgagee as Security Trustee for the Finance Parties a first priority statutory mortgage of all the shares in the Vessel, together with this Deed, as security for the payment of the Indebtedness.

(C) The Owner is the legal and beneficial owner of all the shares in the Vessel and has executed, delivered and registered in favour of the Mortgagee a statutory mortgage with first priority bearing the same date as this Deed over all the shares in the Vessel (the “Mortgage”).

THIS DEED WITNESSES as follows:

1 Definitions and Interpretation

1.1 In this Deed:

“Assigned Property” means the Insurances, the Earnings and the Requisition Compensation.

“Indebtedness” means the aggregate from time to time of: the amount of the Loan outstanding; all accrued and unpaid interest on the Loan; and all other sums of any nature (together with all accrued and unpaid interest on any of those sums) payable by the Owner to any of the Finance Parties under all or any of the Security Documents.

“Mortgagees’ Insurances” means all policies and contracts of mortgagees’ interest insurance, mortgagees’ additional perils (oil pollution) insurance and any other insurance from time to time taken out by the Mortgagee in relation to the Vessel.

“Obligatory Insurances” means the insurances and entries referred to in Clause 5.1 and, where applicable, those referred to in Clauses 5.2, 5.5 and/or 6.16.

“Threshold Amount” means five hundred thousand Dollars ($500,000).

“Vessel” means the motor vessel “GYPSUM CENTENNIAL” registered in the ownership of the Owner under the flag of Bermuda with Official Number 733699 together with all her engines, machinery, boats, tackle, outfit, fuels, spares, consumable and other stores, belongings and appurtenances, whether on board or ashore, including any which may in the future be put on board or may in the future be intended to be used for the Vessel if on shore.

1.2 Unless otherwise specified in this Deed, or unless the context otherwise requires, all words and expressions defined in the Loan Agreement shall have the same meaning when used in this Deed.

1.3 In this Deed:

1.3.1 words denoting the plural number include the singular and vice versa;

2

1.3.2 words denoting persons include corporations, partnerships, associations of persons (whether incorporated or not) or governmental or quasi-governmental bodies or authorities and vice versa;

1.3.3 references to Clauses are references to clauses of this Deed;

1.3.4 references to this Deed include the recitals to this Deed;

1.3.5 the headings and contents page(s) are for the purpose of reference only, have no legal or other significance, and shall be ignored in the interpretation of this Deed;

1.3.6 references to any document (including, without limitation, to any of the Security Documents) are, unless the context otherwise requires, references to that document as amended, supplemented, novated or replaced from time to time;

1.3.7 references to statutes or provisions of statutes are references to those statutes, or those provisions, as from time to time amended, replaced or re-enacted; and

1.3.8 references to any Finance Party include its successors, transferees and assignees.

1.4 In the Mortgage:

1.4.1 references to “interest” means interest covenanted to be paid in accordance with Clauses 3, 5.15 and 8.4;

1.4.2 references to “principal” means all other sums of money for the time being comprised in the Indebtedness; and

1.4.3 the expression “the sums for the time being due on this security” means the whole of the Indebtedness.

2	Representations and Warranties
	The Owner represents and warrants to the Mortgagee that:

3

2.1 it is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of the Mortgage or this Deed that either of them be filed, recorded or enrolled with any governmental authority or agency or stamped with any stamp or similar transaction tax, except for the registration of the Mortgage with the Registrar of Ships (or equivalent official) at the Vessel’s port of registry; and

2.2 it is the sole legal and beneficial owner of all the shares in the Vessel and (with the exception of the Mortgage, this Deed, crew’s wages and Permitted Encumbrances) the Vessel is free from any Encumbrance and is not under arrest or in the possession of any person (other than her master and crew) who may become entitled to assert a maritime or possessory lien on her; and

2.3 the Vessel is insured and classed in accordance with the requirements of this Deed.

3	Covenant to Pay and Perform
	The Owner agrees to pay to the Finance Parties all moneys comprised in the Indebtedness and to perform all its other obligations arising out of the Security Documents as and when the same shall be due for payment or performance.

4 Mortgage and Amount Secured

4.1 In order to secure the payment of the Indebtedness and the performance by the Owner of all its other obligations under or arising out of the Security Documents the Owner, by the Mortgage and this Deed, mortgages and charges the Vessel to the Mortgagee as security agent for the Finance Parties with full title guarantee.

4.2 The security constituted by the Mortgage and this Deed shall be continuing and shall not be satisfied by any intermediate payment or satisfaction until the Indebtedness shall have been paid in full and none of the Finance Parties shall be under any further actual or contingent liability to any third party in relation to the Vessel, the Assigned Property or any other matter referred to in the Security Documents. The security constituted by the Mortgage and this Deed shall be in addition to any other security now or in the future held by any of the Finance Parties for or in respect of the Indebtedness, and shall not merge with or prejudice or be prejudiced by any such security or any other contractual or legal rights of any of the Finance Parties nor be affected by any irregularity, defect or informality or by any release, exchange or variation of any such security. Section 93 of the Law

4

of Property Act 1925, or any provision which the Mortgagee considers analogous to that provision under the law of any other relevant jurisdiction, shall not apply to the security constituted by the Mortgage and/or this Deed.

5 Insurance

5.1 The Owner covenants to ensure at its own expense throughout the Facility Period that:

5.1.1 the Vessel remains insured against marine risks and war risks on an agreed value basis for an amount which is the greater from time to time of (a) her full market value and (b) an amount which (when aggregated with the amounts for which any other vessels providing first priority security for the Indebtedness are insured for such risks) equals one hundred and twenty per cent (120%) of the amount of the Loan outstanding; and

5.1.2 the Vessel remains entered in a protection and indemnity association in both P&I and FD&D, or remains otherwise insured against protection and indemnity risks and liabilities (including, without limitation, protection and indemnity war risks); and

5.1.3 the Vessel remains insured against oil pollution caused by the Vessel for not less than one billion Dollars ($1,000,000,000) unless that risk is covered to the satisfaction of the Mortgagee by the Vessel’s protection and indemnity entry or insurance.

5.2 The Mortgagee agrees that, if and for so long as the Vessel may be laid up with notification to the Mortgagee, the Owner may at its own expense take out port risk insurance on the Vessel in place of hull and machinery insurance.

5.3 The Owner undertakes to place the Obligatory Insurances in such markets, in such currency, on such terms and conditions, and with such brokers, underwriters and associations as the Mortgagee shall have previously approved in writing. The Owner shall not alter the terms of any of the Obligatory Insurances such that coverage is reduced nor allow any person other than the Managers and any entity that is part of the Group to be co-assured under any of the Obligatory Insurances without the prior written consent of the Mortgagee which consent will not be unreasonably withheld, and will supply the Mortgagee from time to time on request

5

with such information as the Mortgagee may in its reasonable discretion require with regard to the Obligatory Insurances and the brokers, underwriters or associations through or with which the Obligatory Insurances are placed.

5.4 The Owner undertakes duly and punctually to pay all premiums, calls and contributions, and all other sums at any time payable in connection with the Obligatory Insurances, and, at its own expense, to arrange and provide any guarantees from time to time required by any protection and indemnity or war risks association. From time to time at the Mortgagee’s request, the Owner will provide the Mortgagee with evidence satisfactory to the Mortgagee that such premiums, calls, contributions and other sums have been duly and punctually paid; that any such guarantees have been duly given; and that all declarations and notices required by the terms of any of the Obligatory Insurances to be made or given by or on behalf of the Owner to brokers, underwriters or associations have been duly and punctually made or given.

5.5 The Owner will comply in all respects with all terms and conditions of the Obligatory Insurances and will make all such declarations to brokers, underwriters and associations as may be required to enable the Vessel to operate in accordance with the terms and conditions of the Obligatory Insurances. The Owner will not do, nor permit to be done, any act, nor make, nor permit to be made, any omission, as a result of which any of the Obligatory Insurances may become liable to be suspended, cancelled or avoided, or may become unenforceable, or as a result of which any sums payable under or in connection with any of the Obligatory Insurances may be reduced or become liable to be repaid or rescinded in whole or in part. In particular, but without limitation, the Owner will not permit the Vessel to be employed other than in conformity with the Obligatory Insurances without first taking out additional insurance cover in respect of that employment, and the Owner will promptly notify the Mortgagee of any new requirement imposed by any broker, underwriter or association in relation to any of the Obligatory Insurances. This notification shall not include notices of cancellation to amend War Risk Navigation Limits.

5.6 The Owner will, no later than fourteen days (or, in the case of war risks, no later than seven days), before the expiry of any of the Obligatory Insurances renew them

6

and shall promptly give the Mortgagee such details of those renewals as the Mortgagee may require.

5.7 The Mortgagee shall be at liberty to take out Mortgagees’ Insurances in relation to the Vessel for such amounts and on such terms and conditions as the Mortgagee may from time to time decide, and the Owner shall from time to time on demand reimburse the Mortgagee for all costs, premiums and expenses paid or incurred by the Mortgagee in connection with any Mortgagees’ Insurances. All Mortgagees’ Insurances shall be placed with brokers and clubs on terms reasonably acceptable to the Owner

5.8 The Owner shall deliver to the Mortgagee copies of all policies, certificates of entry and other documents relating to the Insurances (including, without limitation, receipts for premiums, calls or contributions) requested by the Mortgagee and shall procure that letters of undertaking in such form as the Mortgagee may reasonably approve shall be issued to the Mortgagee by the brokers through which the Insurances are placed (or, in the case of protection and indemnity or war risks associations, by their managers).

5.9 The Owner shall promptly provide the Mortgagee with full information regarding any casualty or other accident or damage to the Vessel which in the reasonable opinion of the Owner is in excess of the Threshold Amount.

5.10 The Owner agrees that, at any time after the occurrence and during the continuation of an Event of Default, the Mortgagee shall be entitled to collect, sue for, recover and give a good discharge for all claims in respect of any of the Insurances; to pay collecting brokers the customary commission on all sums collected in respect of those claims; to compromise all such claims or refer them to arbitration or any other form of judicial or non-judicial determination; and otherwise to deal with such claims in such manner as the Mortgagee shall in its discretion think fit.

5.11 Whether or not an Event of Default shall have occurred or be continuing, the proceeds of any claim under any of the Insurances in respect of a Total Loss shall be paid to the Mortgagee and applied by the Mortgagee in accordance with Clause 10.

7

5.12 In the event of any claim in respect of any of the Insurances (other than in respect of a Total Loss or a claim less than the Threshold Amount), if the Owner shall fail to reach agreement with any of the brokers, underwriters or associations for the restoration of the Vessel, or for payment to third parties, within such time as the Mortgagee may reasonably stipulate, the Mortgagee shall be entitled, if an Event of Default has occurred and is continuing, to require payment to itself with respect to hull and machinery claims, and with respect to protection and indemnity claims, to the person entitled thereto or to other parties if and when designated by the Mortgagee.

In the event of any dispute arising between the Owner and any broker, underwriter or association with respect to any obligation to make any payment in an amount greater than the Threshold Amount to the Owner or to the Mortgagee under or in connection with any of the Insurances, or with respect to the amount of any such payment relating to a claim in excess of the Threshold Amount, the Mortgagee shall be entitled, but after a reasonable time frame set by the Mortgagee and after which still no agreement is achieved, to settle that dispute with participation of the Owner with the broker, underwriter or association concerned. Any such settlement shall be binding on the Owner.

5.13 The Mortgagee agrees that any amounts which may become due under any protection and indemnity entry or insurance shall be paid to the Owner to reimburse the Owner for, and in discharge of, the loss, damage or expense in respect of which they shall have become due, unless, at the time the amount in question becomes due, an Event of Default shall have occurred and be continuing, in which event the Mortgagee shall be entitled to receive the amounts in question and to apply them either in reduction of the Indebtedness or, at the option of the Mortgagee, to the discharge of the liability in respect of which they were paid.

5.14 The Owner shall not settle, compromise or abandon any claim under or in connection with any of the Insurances (other than a claim of less than the Threshold Amount arising other than from a Total Loss) without the prior written consent of the Mortgagee, which consent will not be unreasonably withheld or delayed.

5.15 If the Owner fails to effect or keep in force the Obligatory Insurances, the Mortgagee may (but shall not be obliged to) effect and/or keep in force such insurances on the Vessel and such entries in protection and indemnity or war risks

8

associations as the Mortgagee in its discretion considers desirable, and the Mortgagee may (but shall not be obliged to) pay any unpaid premiums, calls or contributions. The Owner will reimburse the Mortgagee from time to time on demand for all such premiums, calls or contributions paid by the Mortgagee, together with interest at the Default Rate from the date of payment by the Mortgagee until the date of reimbursement.

5.16 The Owner shall comply strictly with the requirements of any legislation relating to pollution or protection of the environment which may from time to time be applicable to the Vessel in any jurisdiction in which the Vessel shall trade and in particular (if the Vessel is to trade in the United States of America and Exclusive Economic Zone (as defined in the Act)) the Owner shall comply strictly with the requirements of the United States Oil Pollution Act 1990 (the “Act”). Before any such trade is commenced and during the entire period during which such trade is carried on, the Owner shall:

5.16.1 pay any additional premiums required to maintain protection and indemnity cover for oil pollution in amounts of up to one billion Dollars ($1,000,000,000); and

5.16.2 make all such quarterly or other voyage declarations as may from time to time be required by the Vessel’s protection and indemnity association in order to maintain such cover, and promptly deliver to the Mortgagee copies of such declarations; and

5.16.3 submit the Vessel to such additional periodic, classification, structural or other surveys which may be required by the Vessel’s protection and indemnity insurers to maintain cover for such trade and promptly deliver to the Mortgagee copies of reports made in respect of such surveys; and

5.16.4 implement any recommendations contained in the reports issued following the surveys referred to in Clause 5.16.3 within the relevant time limits, and provide evidence satisfactory to the Mortgagee that the protection and indemnity insurers are satisfied that this has been done; and

5.16.5 in addition to the foregoing (if such trade is in the United States of America and Exclusive Economic Zone):

9

(aa) obtain and retain a certificate of financial responsibility under the Act in form and substance satisfactory to the United States Coast Guard and provide the Mortgagee with a copy; and

(bb) procure that the protection and indemnity insurances do not contain a US Trading Exclusion Clause or any other analogous provision and provide the Mortgagee with evidence that this is so; and

(cc) comply strictly with any operational or structural regulations issued from time to time by any relevant authorities under any act or convention relating to oil pollution so that at all times the Vessel falls within the provisions which limit strict liability under that act for oil pollution.

5.17 The Mortgagee agrees and covenants that after an Event of Default has been cured or remedied and provided that (i) no other Event of Default has occurred and is continuing and/or (ii) the Finance Parties have not exercised their nights under clause 12.1 of the Loan Agreement, that it will promptly rescind any and all notices given to any broker, underwriter or association to make all insurance payments to the Mortgagee.

6	Operation and Maintenance
	The Owner covenants with the Mortgagee:

6.1 to keep the Vessel seaworthy and in a state of repair and in compliance with the requirements from time to time of all applicable laws, conventions and regulations and of her insurers; and

6.2 to maintain the registration of the Vessel under its current flag or a flag approved by the Mortgagee; to effect and maintain registration of the Mortgage at the Vessel’s ship registry; and not cause nor permit to be done any act or omission as a result of which either of those registrations might be defeated or imperilled; and

6.3 to maintain the Vessel in a condition entitling the Vessel to the highest class applicable to vessels of her type with a classification society as required by the Loan Agreement and free of recommendations affecting class; and

10

6.4 to comply in all material respects with all laws, conventions and regulations applicable to the Owner or to the Vessel and to carry on board the Vessel all certificates and other documents which may from time to time be required to evidence such compliance; and

6.5 not without the prior written consent of the Mortgagee, which consent will not be unreasonably withheld or delayed, to make, nor permit nor cause to be made, any material change in the structure, type or speed of the Vessel; and

6.6 to procure that all repairs to the Vessel or replacements of parts or equipment of the Vessel are effected in such a way as not to materially diminish the value of the Vessel and with replacement parts or equipment the property of the Owner and free of all Encumbrances (other than Permitted Encumbrances, the Mortgage and this Deed); and

6.7 to permit the Mortgagee and all persons appointed by the Mortgagee to board the Vessel from time to time during the Facility Period to inspect the Vessel’s state and condition, upon reasonable advance notice and without interfering with the Vessel’s operation and, if the Vessel shall not be in a state and condition which complies with the requirements of this Deed, after giving to the Owner reasonably detailed notice of the noncompliance and a reasonable opportunity to complete required repairs to effect such repairs as shall in the opinion of the Mortgagee be desirable to ensure such compliance, without prejudice to the Mortgagee’s other rights under or pursuant to the Mortgage or this Deed; and

6.8 promptly to notify the Mortgagee of any arrest or detention of the Vessel, and to cause the Vessel to be released from arrest or detention as quickly as possible, and in any event within fourteen days from the date of arrest or detention, and promptly to notify the Mortgagee in the same manner of the release of the Vessel; and

6.9 from time to time on request of the Mortgagee to produce to the Mortgagee written evidence satisfactory to the Mortgagee confirming that the master and crew of the Vessel have no claims for wages beyond the ordinary arrears and that the master has no claim for disbursements other than those properly incurred by him in the ordinary course of trading of the Vessel; and

11

6.10 not during the Facility Period to sell, agree to sell, or otherwise dispose of, or agree to dispose of, any shares in the Vessel unless the Owner complies with clause 5.6 of the Loan Agreement; and

6.11 not during the Facility Period to change the name of the Vessel without notice to the Mortgagee; and

6.12 in the event of any requisition or seizure of the Vessel, to take all lawful and reasonable steps to recover possession of the Vessel as soon as it is entitled to do so; and

6.13 to give to the Mortgagee from time to time during the Facility Period on request such information as the Mortgagee may reasonably require with regard to the Vessel’s employment, position and state of repair and, on the Mortgagee’s reasonable request, to supply the Mortgagee with copies of all charterparties and other contracts of employment relating to the Vessel; and

6.14 to comply with all requirements from time to time of the Vessel’s classification society and to give to the Mortgagee from time to time during the Facility Period on request copies of all classification certificates of the Vessel and reports of surveys required by the Vessel’s classification society (the Owner by its execution of this Deed irrevocably authorising the Mortgagee to obtain such information and documents from the Vessel’s classification society as the Mortgagee may from time to time require), and to notify the Mortgagee promptly of any requirement or recommendation imposed by the Vessel’s classification society; and

6.15 not during hostilities (whether or not a state of war shall formally have been declared and including, without limitation, any civil war) to permit the Vessel to be employed in carrying any goods which may be declared to be contraband of war or which may render the Vessel liable to confiscation, seizure, detention or destruction, nor to permit the Vessel to enter any area which is declared a war zone by any governmental authority or by the Vessel’s insurers unless the Mortgagee shall have consented to that employment or voyage in writing, which consent (if given) shall be conditional on the Owner effecting at its own expense such additional insurances as the Mortgagee shall consider necessary or desirable and, if required by the Mortgagee, specifically assigning those insurances to the Mortgagee by such documents as the Mortgagee may require; and

12

6.16 not without the prior written consent of the Mortgagee to let the Vessel on any demise charter or on any time charter, consecutive voyage charter or other contract of employment which (inclusive of any extension option) is capable of exceeding twelve months nor to employ the Vessel in any way which might impair the security created by the Security Documents; and

6.17 not without the prior written consent of the Mortgagee to enter into any agreement or arrangement for sharing the Earnings; and

6.18 duly to perform (unless prevented by force majeure), and to take all necessary steps to enforce the performance by charterers and shippers of all material provisions of charterparties and other contracts of employment and all bills of lading and other contracts relating to the Vessel; and

6.19 not following the occurrence and during the continuation of an Event of Default to let the Vessel on charter or renew or extend any charter or other contract of employment of the Vessel, nor agree to do so, without the prior written consent of the Mortgagee; and

6.20 to pay and discharge when due from time to time all taxes, levies, duties, fines and penalties imposed on the Vessel or the Earnings, or on the Owner, its income, profits, capital gains or any of its property, except those amounts that are being contested in good faith by appropriate proceedings and where the Owner has set aside sufficient reserves therefor, and where the failure to pay such amounts would not reasonably be expected to result in a Material Adverse Effect; and

6.21 not at any time during the Facility Period without the prior written consent of the Mortgagee (and then subject to such conditions as the Mortgagee may reasonably impose) to create nor grant nor permit to exist any Encumbrance over the Vessel or any share in the Vessel or any of the Assigned Property other than any Permitted Encumbrances existing from time to time; and

6.22 to notify the Mortgagee promptly after the Owner becomes aware of any legal proceedings or arbitration involving the Vessel or the Owner where the amount claimed by any party (ignoring any counterclaim or defence of set-off) exceeds or may reasonably be expected to exceed the Threshold Amount; and

13

6.23 not without the prior written consent of the Mortgagee to put the Vessel into the possession of any person for the purpose of work or repairs estimated to cost more than the Threshold Amount (except for repairs the cost of which is recoverable under the Insurances, except for applicable deductibles, and in respect of which the insurers have agreed to make payment in accordance with any applicable loss payable clause); and

6.24 to keep proper books of account in respect of the Vessel and the Earnings and as and when reasonably required by the Mortgagee to make such books available for inspection on behalf of the Mortgagee provided there shall be no disruption or interference to the Owner’s business or operations; and

6.25 not without the prior written consent of the Mortgagee, which consent will not be unreasonably withheld or delayed, to appoint anyone as commercial or technical managers of the Vessel, nor to terminate nor materially vary the arrangements for the commercial or technical management of the Vessel, nor to permit the commercial or technical management of the Vessel to be sub-contracted or delegated to any third party; and

6.26 to take all reasonable precautions to prevent any infringements by the Owner of any anti drug legislation in any jurisdiction in which the Vessel shall trade and in particular (if the Vessel is to trade in the United States of America) to take all reasonable precautions to prevent any infringements of the Anti-Drug Abuse Act of 1986 of the United States of America and for this purpose, if required, to enter into a “Carrier Initiative Agreement” with the United States’ Customs Service and, if required, to procure that the same or a similar agreement is maintained in full force and effect and that the Owner’s obligations under that agreement are performed in all material respects in respect of the Vessel; and

6.27 to comply, or procure that the operator of the Vessel will comply in all material respects, with the International Management Code for the Safe Management of Ships and for Pollution Prevention adopted by the International Maritime Organisation (as the same may be amended from time to time) (the “ISM Code”) or any replacement of the ISM Code and in particular, without limitation, to:

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6.27.1 procure that the Vessel remains for the duration of the Facility Period subject to a safety management system developed and implemented in accordance with the ISM Code;

6.27.2 maintain for the Vessel throughout the Facility Period a valid and current safety management certificate issued under paragraph 13.7 of the ISM Code (“SMC”) and provide a copy to the Mortgagee;

6.27.3 procure that the company responsible for the Vessel’s compliance with the ISM Code under paragraph 1.1.2 of the ISM Code (“ISM Company”) maintains throughout the Facility Period a valid and current Document of Compliance issued for the ISM Company under paragraph 13.2 of the ISM Code (“DOC”) and provide a copy to the Mortgagee; and

6.27.4 notify the Mortgagee promptly in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the SMC of the Vessel or of the DOC of the ISM Company; and

6.28 to comply in relation to the Vessel with the International Ship and Port Facility Security Code adopted by the International Maritime Organisation (as the same may be amended from time to time) (the “ISPS Code”) or any replacement of the ISPS Code and in particular, without limitation, to:

6.28.1 procure that the Vessel and the company responsible for the Vessel’s compliance with the ISPS Code comply with the ISPS Code;

6.28.2 maintain for the Vessel throughout the Facility Period a valid and current International Ship Security Certificate issued under the ISPS Code (“ISSC”) and provide a copy to the Mortgagee;

6.28.3 notify the Mortgagee immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC; and

6.29 to comply in relation to the Vessel with Annex VI (Regulations for the Prevention of Air Pollution from Ships) to the International Convention for the Prevention of Pollution from Ships 1973 (as modified in 1978 and 1997) (as the same may be amended from time to time) (“Annex VI”) or any replacement of Annex VI and in particular, without limitation, to:

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6.29.1 procure that the Vessel’s master and crew are familiar with, and that the Vessel complies with, Annex VI; and

6.29.2 maintain for the Vessel throughout the Facility Period a valid and current International Air Pollution Prevention Certificate issued under Annex VI (“IAPPC”) and provide a copy to the Mortgagee; and

6.29.3 notify the Mortgagee promptly in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the IAPPC.

7 Mortgagee’s Powers

7.1 If an Event of Default shall occur and be continuing, and the Agent shall demand payment of all or any part of the Indebtedness, the security constituted by the Mortgage and this Deed shall become immediately enforceable and the Mortgagee shall be entitled to exercise all or any of the rights, powers, discretions and remedies vested in the Mortgagee by this Clause without any requirement for any court order or declaration that an Event of Default has occurred. The Mortgagee’s right to exercise those rights, powers, discretions and remedies shall be in addition to and without prejudice to all other rights, powers, discretions and remedies to which it may be entitled, whether by statute or otherwise. The Mortgagee shall be entitled to exercise its rights, powers, discretions and remedies, and whether or not any previous default shall have been waived, and in particular without the limitations contained in Section 103 of the Law of Property Act 1925 or any statutory provision which the Mortgagee considers analogous to that section under the law of any other relevant jurisdiction.

7.2 In the circumstances described in Clause 7.1, the Mortgagee shall be entitled (but not obliged) to:

7.2.1 take possession of the Vessel wherever she may be; and/or

7.2.2 discharge the master and crew of the Vessel and employ a new master and crew; and/or

7.2.3 navigate the Vessel to such places as the Mortgagee may decide or detain or lay up the Vessel; and/or

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7.2.4 in the name of the Mortgagee or the name of the Owner, demand, sue for, receive and give a good receipt for all sums due to the Owner in connection with the Vessel and, in the name of the Mortgagee or the name of the Owner or the name of the Vessel, commence such legal proceedings as it may consider appropriate, or conduct the defence of any legal proceedings commenced against the Vessel or the Owner in its capacity as owner of the Vessel; and/or

7.2.5 sell or dispose of all or any shares in the Vessel either by private treaty or auction, on such terms as the Mortgagee shall think fit (including deferred payment terms and with or without the benefit of any charterparty or other contract of employment), with the power to make a loan on such terms as the Mortgagee may decide to any prospective purchaser to assist in the purchase of the Vessel, and the power to postpone any sale, without being liable for any loss caused by any such sale or the postponement of any such sale; and/or

7.2.6 replace or repair any part of the Vessel or alter her to suit the Mortgagee’s requirements and put her through all appropriate surveys; and/or

7.2.7 employ agents, servants and others on such terms as the Mortgagee may in its discretion determine; and/or

7.2.8 charter or load the Vessel on such terms and for the carriage of such cargoes as the Mortgagee may in its discretion determine.

7.3 For the avoidance of doubt, if the Mortgagee takes any action or enters into or completes any transaction pursuant to Clause 7.2 after an Event of Default has been remedied, that action or transaction shall not be affected by the remedying of the Event of Default.

8 Ancillary Provisions

8.1 In connection with the exercise of its rights, powers, discretions and remedies under Clause 7 or otherwise as mortgagee of the Vessel, the Mortgagee shall have power to buy in, rescind or vary any contract for sale of the Vessel and generally to do all things in connection with the sale of the Vessel as it shall think fit.

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8.2 On any sale of the Vessel by the Mortgagee, the purchaser shall not be bound to enquire whether the Mortgagee’s power of sale has become exercisable or whether its exercise has become expedient, and the purchaser shall not be affected by any notice that the sale was or may have been irregular in any way. The receipt of the Mortgagee for any amounts paid to it shall be a complete discharge to the purchaser who shall not be concerned with the application of the payment or be answerable for any misapplication. As regards any purchaser, any such sale shall be deemed to be within the power of sale conferred on the Mortgagee by this Deed and at law and any remedy of the Owner in respect of any irregularity or impropriety shall be in damages only.

8.3 If the Mortgagee takes possession of the Vessel and until sale the Mortgagee shall be entitled to deal with the Vessel in all respects as if it were the owner of the Vessel.

8.4 The Mortgagee shall be entitled to recover from the Owner on demand all losses, expenses, payments and disbursements incurred by the Mortgagee in or about or incidental to the exercise by it of any of its rights, powers, discretions and remedies under Clause 7 or otherwise as mortgagee of the Vessel together with interest at the Default Rate.

8.5 No failure to exercise, nor any delay in exercising, on the part of the Mortgagee, any right or remedy under Clause 7 or otherwise as mortgagee of the Vessel shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Deed are cumulative and not exclusive of any rights or remedies provided by law.

8.6 The Mortgagee may at any time and from time to time delegate to any person all or any of its rights, powers, discretions and remedies pursuant to the Security Documents on such terms as the Mortgagee may consider appropriate (including the power to sub-delegate).

8.7 Every right, power, discretion and remedy conferred on the Mortgagee under or pursuant to the Security Documents shall be cumulative and in addition to every other right, power, discretion or remedy to which the Mortgagee may at any time be

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entitled by law or in equity. The Mortgagee may exercise each of its rights, powers, discretions and remedies as often and in such order as it deems appropriate.

8.8 Neither the Mortgagee nor any agent or employee of the Mortgagee shall be liable for any losses which may be incurred in or about the exercise of any of the rights, powers, discretions or remedies of the Mortgagee under or pursuant to the Mortgage or this Deed, nor liable as mortgagee in possession for any loss on realisation or for any neglect or default of any nature for which a mortgagee in possession might otherwise be liable other than any loss resulting from the wilful misconduct or gross negligence of the Mortgagee.

9 Receiver

9.1 At any time after the occurrence and during the continuation of an Event of Default the Mortgagee may (but shall not be obliged to) appoint any person to be receiver and/or manager of the Vessel and/or any of the Assigned Property.

9.2 The appointment of a receiver and/or manager by the Mortgagee may be made in writing under the hand of any authorised signatory of the Mortgagee.

9.3 The Mortgagee shall have the power to authorise any joint receiver and/or manager to exercise any or all of his powers independently of any other joint receiver and/or manager.

9.4 The Mortgagee may at any time and from time to time remove any receiver and/or manager from office and appoint a replacement.

9.5 The Mortgagee shall have the power from time to time to fix the remuneration of any receiver and/or manager on the basis of charging from time to time adopted by him or his firm and any receiver and/or manager shall not be limited to any maximum amount or rate specified by law.

9.6 Any receiver and/or manager appointed pursuant to this Clause shall be the agent of the Owner and the Owner shall be solely responsible for his acts and defaults and for the payment of his remuneration.

9.7 Any receiver and/or manager appointed pursuant to this Clause shall have all the powers provided for in Schedule 1 of the Insolvency Act 1986 without restriction, and in particular without the restrictions contained in Section 103 of the Law of

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	Property Act 1925 or any other statutory or other restriction which the Mortgagee may consider analogous under the laws of any other jurisdiction.
9.8	Without limitation, any receiver and/or manager shall have power on behalf of the Owner (and at the Owner’s expense) to do or omit to do anything which the Owner could do or omit to do in relation to the Vessel or any of the Assigned Property and may exercise all or any of the rights, powers, discretions and remedies conferred on the Mortgagee by the Security Documents or at law.
9.9	No receiver and/or manager shall be liable as mortgagee in possession to account or be liable for any loss on realisation of, or any default of any nature in connection with, the Vessel or any of the Assigned Property or the exercise of any of the rights, powers, discretions and remedies vested in the receiver and/or manager by virtue of the Security Documents or at law.

10	Application of Moneys
	All amounts received by the Mortgagee arising from the exercise by the Mortgagee of its rights, powers, discretions and remedies under or pursuant to the Mortgage and this Deed (including, without limitation, all amounts received by the Mortgagee in connection with the taking possession and/or sale of the Vessel, any chartering or other use of the Vessel by the Mortgagee, and any claims for damages or claims on any insurance received by the Mortgagee while in possession of or while chartering or using the Vessel) shall, unless otherwise agreed by the Mortgagee or otherwise expressly provided in the Loan Agreement, be applied by the Mortgagee in or towards satisfaction, or by way of retention on account, of the Indebtedness, in accordance with clause 12.3 of the Loan Agreement.
11	Power of Attorney

11.1 The Owner by way of security irrevocably appoints the Mortgagee and any receiver and/or manager appointed by the Mortgagee severally to be its attorney (with unlimited power of substitution and delegation) with power (in the name of the Owner or otherwise) to do all acts which the Owner could do in connection with the Vessel or the Assigned Property including, without limitation, to execute and deliver a bill of sale transferring title in the Vessel to a third party and to give a good receipt for any purchase price.

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11.2	The Mortgagee agrees that it will not, nor permit any receiver and/or manager appointed by it to, exercise any of its powers as attorney of the Owner unless an Event of Default shall have occurred and be continuing, but the exercise of any such powers by the Mortgagee shall not put any person dealing with the Mortgagee on enquiry as to whether an Event of Default has occurred.
11.3	The exercise by the Mortgagee or by any receiver and/or manager of any of their powers as attorney of the Owner shall be conclusive evidence (as between the Mortgagee and any third party) of their right to do so.

12	Partial Invalidity
	If, at any time, any provision of the Mortgage or this Deed is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
13	Further Assurance
	The Owner agrees that from time to time on the written request of the Mortgagee it will promptly execute and deliver to the Mortgagee all further documents which the Mortgagee may require for the purpose of perfecting or protecting the security intended to be created by the Mortgage and this Deed.
14	Miscellaneous

14.1	In the event of there being any conflict between this Deed and the Loan Agreement, the Loan Agreement shall prevail.
14.2	All the covenants and agreements of the Owner in this Deed shall bind the Owner and its successors and permitted assignees and shall inure to the benefit of the Finance Parties and their respective successors, transferees and assignees.
14.3	The representations and warranties on the part of the Owner contained in this Deed shall survive the execution of the Mortgage and this Deed and the registration of the Mortgage.

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14.4	The rights of the Mortgagee under the Mortgage and this Deed shall not be affected by any change in the constitution of the Owner or by the liquidation, bankruptcy or insolvency of the Owner.
14.5	No variation or amendment of this Deed shall be valid unless in writing and signed on behalf of the Owner and the Mortgagee.
14.6	Other than the Finance Parties, a person who is not a party to this Deed has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Deed.

15 Discharge of Security

15.1

Following the expiry of the Facility Period the Mortgagee will, at the cost of and on the request of the Owner, promptly execute and deliver to the Owner a discharge, release or reassignment of the Mortgage.

15.2

Any discharge, release or reassignment by the Mortgagee of any of the security constituted by, or any of the obligations of the Owner contained in, any of the Security Documents shall be (and be deemed always to have been) void if any act (including, without limitation, any payment) as a result of which such discharge, release or reassignment was given or made is subsequently wholly or partially rescinded or avoided by operation of any law.

16	Notices
	The provisions of clause 16 of the Loan Agreement shall apply (mutatis mutandis) to this Deed as if it were set out in full with references to this Deed substituted for references to the Loan Agreement.
17	Counterparts
	This Deed may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Deed.
18	Law and Jurisdiction

18.1 This Deed shall in all respects be governed by and interpreted in accordance with English law.

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18.2	For the exclusive benefit of the Mortgagee, the Owner irrevocably agrees that the courts of England are to have jurisdiction to settle any disputes which may arise out of or in connection with this Deed and that any proceedings may be brought in those courts.
18.3	Nothing contained in this Clause shall limit the right of the Mortgagee to commence any proceedings against the Owner in any other court of competent jurisdiction nor shall the commencement of any proceedings against the Owner in one or more jurisdictions preclude the commencement of any proceedings in any other jurisdiction, whether concurrently or not.
18.4	The Mortgagee shall in addition have the right to arrest and take action against the Vessel and/or any other vessel for the time being belonging to the Owner wherever it or they may be, for which purpose the Owner irrevocably agrees that any claim form, notice, judgment or other legal process may be served on the Owner in the manner set out in Clause 18.6 or on the Vessel or on the master (or anyone acting as the master) of the Vessel or of the vessel against which the action is taken, which shall be deemed good service on the Owner, the Vessel or such other vessel for all purposes.
18.5	The Owner irrevocably waives any objection which it may now or in the future have to the laying of the venue of any proceedings in any court referred to in this Clause and any claim that those proceedings have been brought in an inconvenient or inappropriate forum, and irrevocably agrees that a judgment in any proceedings commenced in any such court shall be conclusive and binding on it and may be enforced in the courts of any other jurisdiction.
18.6	Without prejudice to any other mode of service allowed under any relevant law, the Owner:

18.6.1	irrevocably appoints USG (U.K.) Ltd, 1 Swan Road, South West Industrial Estate, Peterlee, County Durham, SR8 2HS, Attention: Secretary, as its agent for service of process in relation to any proceedings before the English courts; and
18.6.2	agrees that failure by a process agent to notify the Owner of the process will not invalidate the proceedings concerned.

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IN WITNESS of which this Deed has been duly executed and delivered the day and year first before written.

SIGNED SEALED and DELIVERED	)
as a DEED	)
by GYPSUM TRANSPORTATION	)
LIMITED	)
acting by	)
	)
its duly authorised	)
	)
in the presence of:	)
SIGNED and DELIVERED	)
as a DEED	)
by DVB BANK SE	)
acting by	)
	)
its duly authorised	)
	)
in the presence of:	)

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SCHEDULE 3

Form of Assignment

76

EXECUTION VERSION

DATED                                2008

GYPSUM TRANSPORTATION LIMITED

— to —

DVB BANK SE

DEED OF ASSIGNMENT
m.v. “GYPSUM CENTENNIAL”

STEPHENSON HARWOOD
One, St. Paul’s Churchyard
London EC4M 8SH
Tel: 020 7329 4422
Fax: 020 7329 7100
Ref: 819/1575/47-00986

CONTENTS

Page

1  Definitions and Interpretation	2
2  Covenant to Pay and Perform	4
3  Assignment	4
4  Ancillary Provisions	6
5  Application of Moneys	6
6  Power of Attorney	7
7  Partial Invalidity	7
8  Further Assurance	7
9  Miscellaneous	7
10  Re-Assignment	8
11  Notices	8
12  Counterparts	8
13  Law and Jurisdiction	8
APPENDIX A	11
APPENDIX B	12
APPENDIX C	13
APPENDIX D	15
Acknowledgement	17

DEED OF ASSIGNMENT

Dated:       2008

BY:

(1) GYPSUM TRANSPORTATION LIMITED, a company incorporated according to the law of Bermuda whose registered office is at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda (the “Owner”)

IN FAVOUR OF:

(2) DVB BANK SE with its registered office in Frankfurt and acting through its office at Parklaan 2, 3016BB Rotterdam, The Netherlands (the “Assignee”).

WHEREAS:

(A) Each of the banks listed in Schedule 1 to the Loan Agreement (as defined below) (collectively the “Banks”) has agreed to advance to the Owner its respective Commitment of an aggregate amount not exceeding the total of (i) the lesser of forty million Dollars ($40,000,000) and fifty per centum (50%) of the Market Value of Vessel A (in respect of Tranche A) and (ii) the lesser of fifty million Dollars ($50,000,000) and fifty per centum (50%) of the Market Value of Vessel B (in respect of Tranche B) (the “Loan”) on the terms and subject to the conditions set out in a loan agreement dated                 2008 made between the Owner (as borrower), the Banks (as lenders), and the Assignee as agent and security trustee for the Banks (the “Loan Agreement”).

(B) Pursuant to the Loan Agreement, and as a condition precedent to the several obligations of the Banks to make the Loan available to the Owner, the Owner has, amongst other things, agreed to execute and deliver in favour of the Assignee as security trustee for the Finance Parties a first priority statutory mortgage of the Owner’s Bermuda flag vessel m.v. “GYPSUM CENTENNIAL” (the “Vessel” and together with the m.v. “GYPSUM INTEGRITY” the “Vessels”) together with a collateral deed of covenants (together the “Mortgage”) and this Deed as security for the payment of the Indebtedness.

(C) The Owner is the legal and beneficial owner of the Vessel and the Assigned Property and has executed the Mortgage on the same date as this Deed.

THIS DEED WITNESSES as follows:

1 Definitions and Interpretation

1.1	In this Deed:
	“Assigned Property” means the Insurances, the Earnings and the Requisition Compensation and the CoA Rights.
	“CoAs” means each of:-

(a)	the contract of affreightment commencing as of January 1, 2008 made between the Borrower and United States Gypsum Company;
(b)	the contract of affreightment dated 30 October 2007 made between the Borrower and Public Service of New Hampshire Company;
(c)	the contract of affreightment dated 18 April 2008 made between the Borrower and Mt. Tom Generating Co. LLC; and
(d)	any future contracts of affreightment to be entered into by the Borrower in respect of the Vessel

(each a “COA”).

“CoA Rights” means all of the rights of the Borrower under or pursuant to the CoAs.

“Earnings” means all hires, freights, pool income and other sums payable to or for the account of the Owner in respect of the Vessel including (without limitation) all payments under the CoAs remuneration for salvage and towage services, demurrage and detention moneys, contributions in general average, compensation in respect of any requisition for hire, and damages and other payments (whether awarded by any court or arbitral tribunal or by agreement or otherwise) for breach, termination or variation of any contract for the operation, employment or use of the Vessel.

“Finance Parties” means the Assignee and the Banks and “Finance Party” means any one of them.

“Indebtedness” means the Loan; all other sums of any nature (together with all interest on any of those sums) which from time to time may be payable by the Owner to the Banks or to the Assignee pursuant to the Security Documents; any

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damages payable as a result of any breach by the Owner of any of the Security Documents; and any damages or other sums payable as a result of any of the obligations of the Owner under or pursuant to any of the Security Documents being disclaimed by a liquidator or any other person, or, where the context permits, the amount thereof for the time being outstanding.

“Insurances” means all policies and contracts of insurance (including all entries in protection and indemnity or war risks associations) which are from time to time taken out or entered into in respect of or in connection with the Vessel or her increased value or the Earnings and (where the context permits) all benefits under such contracts and policies, including all claims of any nature and returns of premium.

“Requisition Compensation” means all compensation or other money which may from time to time be payable to the Owner as a result of the Vessel being requisitioned for title or in any other way compulsorily acquired (other than by way of requisition for hire).

“Security Documents” means the Loan Agreement, the Mortgages, the Assignments, the Guarantee, the Account Security Deed, the Managers’ Undertakings or (where the context permits) any one or more of them, and any other agreement or document which may at any time be executed by any person as security for the payment of all or any part of the Indebtedness.

1.2	Unless otherwise specified in this Deed, or unless the context otherwise requires, all words and expressions defined in the Loan Agreement shall have the same meaning when used in this Deed.
1.3	In this Deed:

1.3.1	words denoting the plural number include the singular and vice versa;
1.3.2	words denoting persons include corporations, partnerships, associations of persons (whether incorporated or not) or governmental or quasi-governmental bodies or authorities and vice versa;
1.3.3	references to Clauses are references to clauses of this Deed;
1.3.4	references to this Deed include the recitals to this Deed;

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1.3.5	the headings and contents page(s) are for the purpose of reference only, have no legal or other significance, and shall be ignored in the interpretation of this Deed;
1.3.6	references to any document (including, without limitation, to any of the Security Documents) are, unless the context otherwise requires, references to that document as amended, supplemented, novated or replaced from time to time;
1.3.7	references to statutes or provisions of statutes are references to those statutes, or those provisions, as from time to time amended, replaced or re-enacted; and
1.3.8	references to any Finance Party include its successors, transferees and assignees.

2	Covenant to Pay and Perform
	The Owner agrees to pay to the Finance Parties all moneys comprised in the Indebtedness and to perform all its other obligations arising out of the Security Documents as and when the same shall be due for payment or performance.
3	Assignment

3.1	In order to secure the payment of the Indebtedness and the performance by the Owner of all its other obligations under or arising out of the Security Documents the Owner with full title guarantee assigns and agrees to assign absolutely and unconditionally to the Assignee as security trustee for the Finance Parties all the Owner’s right, title and interest, present and future, in and to the Assigned Property.
3.2	The Owner warrants that it has not disposed of, nor created or permitted any Encumbrance or other third party right to arise on or over, any of the Assigned Property other than Permitted Encumbrances.
3.3	The Owner undertakes:

3.3.1 immediately following the execution of this Deed and at any other time reasonably required by the Assignee during the Facility Period, to give written notice (materially in the form set out in Appendix A or in such other

4

	form as the Assignee may require) to the underwriters (or, in the case of entries in protection and indemnity or war risks associations or clubs, to the managers of those associations or clubs) of the assignment of the Insurances contained in this Deed; and
3.3.2	immediately following the execution of this Deed and at any other time required by the Assignee during the Facility Period, to give to the Assignee a written authority (materially in the form set out in Appendix B or in such other form as the Assignee may require) addressed to the managers of each protection and indemnity or war risks association or club in which the Vessel is entered irrevocably authorising those managers to give to the Assignee or its agents such information and documents relating to the entry of the Vessel in the association or club as the Assignee may from time to time reasonably require; and
3.3.3	to procure that a loss payable clause materially in the form set out in Appendix C (or in such other form as the Assignee may approve) or, in the case of entries in a protection and indemnity association, a note of the Assignee’s interest in such form as the Assignee may approve, shall be endorsed on or attached to the policies, cover notes or certificates of entry relating to the Insurances and that letters of undertaking in such form as the Assignee may approve shall be issued to the Assignee by the brokers through whom the Insurances are placed (or, in the case of entries in protection and indemnity or war risks associations, by their managers); and
3.3.4	immediately following the execution of this Deed in respect of the existing COAs and immediately following the execution of any future COAs to give written notice (materially in the form of Appendix D or in such other form as the Assignee may require) to the counterparties to each CoA of the assignment of the Earnings contained in this Deed, and to procure the acknowledgement of that notice by such counterparties in the manner provided in the notice; and
3.3.5	from time to time immediately on the written request of the Assignee to give such further written notice in such form as the Assignee shall reasonably require of the assignment of the Earnings and/or the Requisition Compensation contained in this Deed.

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4 Ancillary Provisions

4.1	The Owner undertakes to reimburse the Assignee on demand for all reasonable sums which the Assignee may from time to time pay or become liable for in or about the protection, maintenance or enforcement of the rights created in favour of the Assignee by this Deed or in or about the exercise by the Assignee of any of the powers vested in it under or pursuant to this Deed, together in each case with interest at the Default Rate from the date when those sums were paid by the Assignee until the date of actual receipt, before or after any relevant judgment, and to keep the Assignee fully and effectually indemnified from and against all actions, losses, claims, proceedings, costs, demands and liabilities which the Assignee may suffer or incur under or in connection with the Assigned Property, except when due to the Assignee’s wilful misconduct or gross negligence.
4.2	Notwithstanding the assignments contained in this Deed, the Assignee shall not be obliged to make any enquiry as to the nature or sufficiency of any payment received by it under or in connection with this Deed nor to make any claim or take any other action to collect any money or to enforce any rights or benefits assigned to the Assignee by this Deed or to which the Assignee may at any time be entitled under or pursuant to this Deed.
4.3	The Owner shall remain liable to perform all the obligations assumed by it in relation to the Assigned Property and the Assignee shall be under no obligation of any kind in respect of the Assigned Property nor under any liability in the event of any failure by the Owner to perform, or breach by the Owner of, any of those obligations.
4.4	The Owner undertakes to hold the original copies of any and all documents in connection with any of the Assigned Property to the order of the Assignee.

5 Application of Moneys

5.1	The benefits and proceeds of any of the Insurances shall be distributed in accordance with the terms of any relevant loss payable clause referred to in Clause 3.3.3.
5.2	Subject to Clause 5.1, the benefits and proceeds of any of the Assigned Property shall, unless otherwise agreed by the Assignee or otherwise expressly provided in

6

the Loan Agreement, be applied by the Assignee in or towards satisfaction, or by way of retention on account, of the Indebtedness, in such manner as the Assignee may in its discretion determine.

6	Power of Attorney
	So far as may be necessary to give effect to this Deed the Owner hereby irrevocably appoints the Assignee its attorney (with unlimited power of substitution and delegation) for the purpose of doing in the name of the Owner all acts which the Owner could do in relation to the Assigned Property. Such power of attorney shall only be exercisable during the continuance of an Event of Default. The Assignee shall advise the Owner of the exercise of such power of attorney pursuant to this Clause, promptly following the exercise of such power of attorney.
7	Partial Invalidity
	If, at any time, any provision of this Deed is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
8	Further Assurance
	The Owner agrees that from time to time on the written request of the Assignee it will immediately execute and deliver to the Assignee all further documents which the Assignee may reasonably require for the purpose of obtaining the full benefits of this Deed.
9	Miscellaneous

9.1	In the event of there being any conflict between this Deed and the Loan Agreement or the Mortgage, the Loan Agreement or the Mortgage (as the case may be) shall prevail.
9.2	All the covenants and agreements of the Owner in this Deed shall bind the Owner and its successors and permitted assignees and shall inure to the benefit of the Finance Parties and their respective successors, transferees and assignees.
9.3	The representations and warranties on the part of the Owner contained in this Deed shall survive the execution of this Deed.

7

9.4	The rights of the Assignee under this Deed shall not be affected by any change in the constitution of the Owner or by the liquidation, bankruptcy or insolvency of the Owner.
9.5	No variation or amendment of this Deed shall be valid unless in writing and signed on behalf of the Owner and the Assignee.
9.6	Other than the Finance Parties, a person who is not a party to this Deed has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Deed.

10	Re-Assignment
	Following the expiry of the Facility Period the Assignee will, at the cost of and on the request of the Owner, promptly execute and deliver a re-assignment to the Owner of the Assigned Property, to the extent then still subsisting and capable of re-assignment.
11	Notices
	The provisions of clause 16 of the Loan Agreement shall (mutatis mutandis) apply to this Deed as if it were set out in full with references to this Deed substituted for references to the Loan Agreement.
12	Counterparts
	This Deed may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Deed.
13	Law and Jurisdiction

13.1	This Deed shall in all respects be governed by and interpreted in accordance with English law.
13.2	For the exclusive benefit of the Assignee, the Owner irrevocably agrees that the courts of England are to have jurisdiction to settle any disputes which may arise out of or in connection with this Deed and that any proceedings may be brought in those courts.
13.3	Nothing contained in this Clause shall limit the right of the Assignee to commence any proceedings against the Owner in any other court of competent jurisdiction nor

8

	shall the commencement of any proceedings against the Owner in one or more jurisdictions preclude the commencement of any proceedings in any other jurisdiction, whether concurrently or not.
13.4	The Owner irrevocably waives any objection which it may now or in the future have to the laying of the venue of any proceedings in any court referred to in this Clause and any claim that those proceedings have been brought in an inconvenient or inappropriate forum, and irrevocably agrees that a judgment in any proceedings commenced in any such court shall be conclusive and binding on it and may be enforced in the courts of any other jurisdiction.
13.5	Without prejudice to any other mode of service allowed under any relevant law, the Owner:

13.5.1	irrevocably appoints USG (U.K.) Ltd, 1 Swan Road, South West Industrial Estate, Peterlee, County Durham, SR8 2HS, Attention: Secretary, as its agent for service of process in relation to any proceedings before the English courts; and
13.5.2	agrees that failure by a process agent to notify the Owner of the process will not invalidate the proceedings concerned.

9

IN WITNESS of which this Deed has been duly executed and delivered the day and year first before written.

SIGNED and DELIVERED	)
as a DEED	)
by GYPSUM TRANSPORTATION	)
LIMITED	)
acting by	)
	)
its duly authorised	)
	)
in the presence of:	)
SIGNED and DELIVERED	)
as a DEED	)
by DVB BANK SE	)
acting by	)
	)
its duly authorised	)
	)
in the presence of:	)

10

APPENDIX A

NOTICE OF ASSIGNMENT

(For attachment by way of endorsement to all policies, contracts and cover notes)

We, Gypsum Transportation Limited of Clarendon House, 2 Church Street, Hamilton HM11, Bermuda, the owner of the m.v. “Gypsum Centennial” (the “Vessel”) GIVE NOTICE that, by an assignment in writing dated                  2008, we assigned to DVB Bank SE with its registered office in Frankfurt, acting through its office at Parklaan 2, 3016BB Rotterdam, The Netherlands (as security trustee for itself and others) all our right, title and interest in and to all insurances effected or to be effected in respect of the Vessel, including the insurances constituted by the policy on which this notice is endorsed, and including all money payable and to become payable thereunder or in connection therewith (including return of premiums).

Signed:
	For and on behalf of Gypsum Transportation Limited

Dated:             2008

11

APPENDIX B

To:    Willis

We, Gypsum Transportation Limited of Clarendon House, 2 Church Street, Hamilton HM11, Bermuda, the owner of the m.v. “Gypsum Centennial” (the “Vessel”) irrevocably authorise you to disclose to DVB Bank SE (the “Assignee”) or its agents all information and documents relating to the entry of the Vessel in [name of association or club] as the Assignee or its agents may from time to time require.

Please note that this authority may not be varied or revoked without the prior written consent of the Assignee.

Signed:
	For and on behalf of Gypsum Transportation Limited

Dated:             2008

12

APPENDIX C

Loss Payable Clause

It is noted that, by an assignment in writing collateral to a first priority statutory mortgage and deed of covenants both dated                           2008 (together the “Mortgage”), Gypsum Transportation Limited of Clarendon House, 2 Church Street, Hamilton HM11, Bermuda (the “Owner”), owner of the vessel m.v. “GYPSUM CENTENNIAL” (the “Vessel”), assigned absolutely to DVB Bank SE with its registered office in Frankfurt, acting through its office at Parklaan 2, 3016BB Rotterdam, The Netherlands (as security trustee for itself and others) (the “Mortgagee”) this policy and all benefits of this policy, including all claims of any nature (including return of premiums) under this policy.

Claims payable under this policy in respect of a total or constructive total or an arranged or agreed or compromised total loss or unrepaired damage and all claims which (in the opinion of the Mortgagee) are analogous thereto shall be payable to the Mortgagee up to the Mortgagee’s mortgage interest.

Subject thereto, all other claims, unless and until underwriters have received notice from the Mortgagee of an event of default under the Mortgage, in which event all claims under this policy shall be payable directly to the Mortgagee up to the Mortgagee’s mortgage interest, shall be payable as follows:

(i)

a claim in respect of any one casualty where the aggregate claim against all insurers does not exceed FIVE HUNDRED THOUSAND UNITED STATES DOLLARS (US$500,000) or the equivalent in any other currency, prior to adjustment for any franchise or deductible under the terms of the policy, shall be paid directly to the Owner for the repair, salvage or other charges involved or as a reimbursement if the Owner has fully repaired the damage and paid all of the salvage or other charges;

(ii)

a claim in respect of any one casualty where the aggregate claim against all insurers exceeds FIVE HUNDRED THOUSAND UNITED STATES DOLLARS (US$500,000) or the equivalent in any other currency prior to adjustment for any franchise or deductible under the terms of the policy, shall, subject to the prior written consent of the Mortgagee, be paid to the Owner as and when the Vessel is restored to her former state and condition and the liability in respect of which the insurance loss is payable is discharged, and provided that the insurers may with such consent make payment on account of repairs in the course of being effected, but, in the absence of such prior written consent shall be payable directly to the Mortgagee up to the Mortgagee’s mortgage interest.

13

APPENDIX D

Notice of Assignment of Contract of Affreightment

To:

Dear Sirs

We hereby notify you that we have assigned in favour of DVB Bank SE (the “Lender”) pursuant to an assignment of created by us in favour of the Lender dated                                2008, as security for a loan made to us, all our right, title and interest in and to the Contract of Affreightment made between ourselves and yourselves dated [                ] (the “Contract”) including all monies payable by you to us in respect of the Contract.

With effect from the date you receive this notice:

(a)	all payments to be made by you to us under or in respect of the Contract should be made to our account number [                     ] held with [                     ] or as the Lender may otherwise specify in writing from time to time;
(b)	we remain liable to perform all the obligations assumed by us under the Contract;
(c)	no changes may be made to the Contract and no rights of termination may be exercised by us without the reasonable consent of the Lender; and
(d)	you are hereby authorised and instructed to provide to the Lender such information relating to the Contract as the Lender may request and to send to it copies of all notices issued by you under the Contract, and to provide us with copies of such request and notices.

These instructions may not be revoked or varied without the prior written consent of the Lender.

Please acknowledge receipt of this notice by signing and returning the enclosed copy of this notice to the Lender at Parklaan 2, 3016BB Rotterdam, The Netherlands.

14

Yours faithfully

For and on behalf of
GYPSUM TRANSPORTATION LIMITED
 

Date:           2008

15

Acknowledgement

of Assignment of Contract of Affreightment

To:	(i)	DVB Bank SE (the “Lender”)
	(ii)	Gypsum Transportation Limited (the “Company”)

We acknowledge receipt of the notice set out above and confirm that:

(a)	we shall comply with the terms of the notice;
(b)	we have not received notice of any other interest in respect of the Contract;
(c)	no amendment, waiver or release of any right, interest or benefit under the Contract shall be effective without the prior written consent of the Lender;
(d)	we shall not exercise any right to terminate the Contract or enforce any of our rights unless we have given 30 days’ prior written notice to the Lender of the proposed exercise or enforcement;
(e)	no default by the Company of any of the terms of the Contract shall be deemed to have occurred until the expiry of 30 days after the date notice of that default is given to the Lender with details of the steps required to remedy that default;
(f)	we consent to the assignment reflected in the notice; and
[(g)	we waive the requirement that the Lender as assignee assume in writing the obligations of the Company as assignor under the Contract, as required pursuant to paragraph 27 of the Contact and confirm that we may look only to the Company for performance under the Contract] [COA dated 1 January 2008 only.]

This acknowledgement shall be governed by English law and is executed and delivered as a deed.

16

For and on behalf of
[                                     ]
 

Date:            2008

17

SCHEDULE 4

Form of Managers’ Undertaking

77

To:  DVB BANK SE
Parklaan 2
3016BB Rotterdam
The Netherlands

2008

Dear Sirs

m.v. “GYPSUM CENTENNIAL” (the “Vessel”)

We refer to a loan agreement dated                      2008 (hereinafter as the same may from time to time be as amended, supplemented, novated or replaced called the “Loan Agreement”) made between the owner of the Vessel, Gypsum Transportation Limited (the “Owner”), as borrower, the banks listed in Schedule 1 to the Loan Agreement (the “Lenders”) as lenders and yourselves as agent and security trustee for the Lenders (the “Agent”), whereby the Lenders have agreed to make available to the Owner a loan of up to the lesser of ninety million Dollars ($90,000,000) and fifty per cent of the Market Value of the Vessels. The Lenders, the Agent and their respective successors, transferees and assignees are together called the “Finance Parties”.

It was a condition of the Loan Agreement that we would give you this letter in your capacity as the Agent. We therefore agree and undertake with you that, unless otherwise agreed by you, we will remain the commercial and technical managers of the Vessel and will not, without your prior written consent, sub-contract or delegate the commercial or technical management of the Vessel to any third party.

We also agree and undertake with you that we will not without your prior written consent, following your notifying us in writing that an Event of Default has occurred under the Loan Agreement and for so long as any moneys remain owing to any of the Finance Parties under the Loan Agreement:

(a) demand or accept payment in whole or in part of any moneys owing to us by the Owner in relation to our appointment as manager of the Vessel or under any agreement entered into by us with the Owner providing for such appointment; or

(b)	take any steps to enforce our rights to recover any moneys owing to us by the Owner and more particularly (but without limitation) take or issue any judicial or other legal proceedings against the Owner or any of its property or assets (including, but without limitation, the Vessel or any share or interest in the Vessel); or
(c)	prove in the liquidation or other dissolution of the Owner in competition with any of the Finance Parties.

Any notice to be sent to us in connection with this letter should be sent to us at ([telex no.                 ] fax no.                      ).

This letter shall be governed by and construed in accordance with English law and for the exclusive benefit of the Finance Parties we hereby submit to the jurisdiction of the English courts. We hereby irrevocably appoint USG (U.K.) Limited, 1 Swan Road, South West Industrial Estate, Peterlee, County Durham, SR8 2HS as our agent to accept service of all proceedings hereunder on our behalf.

Yours faithfully

BELTSHIP MANAGEMENT LIMITED
Signed:
	Name:
	Title:

In the presence of:

2

SCHEDULE 5

Form of Compliance Certificate

To:    DVB Bank SE (as agent and security trustee)

Dear Sirs

We refer to the loan agreement dated [            ] (the “Agreement”) made between (inter alia) yourselves and ourselves. Words and expressions defined in the Agreement shall bear the same meanings when used herein.

We hereby certify, as at [            ], that

1.	Our Value Adjusted Total Assets are [            ]; Our Value Adjusted Total Liabilities are [            ]; and our Market Adjusted Net Worth is therefore [            ].
2.	Our Borrowings are [            ]; and our Value Adjusted Equity is [            ]. Our ratio of Borrowings to Value Adjusted Equity is therefore [            ].
3.	Our Cash Reserves are [            ].
4.	Our EBITDA is [            ]; and our Debt Service is [            ]. Our ratio of EBITDA to Debt Service is therefore [            ].
5.	The current Valuations of the Vessels show an aggregate value of [            ].

As such, we are in compliance with each of the covenants set out in Clause 10.2.2 and 10.3 of the Agreement.

78

We further confirm that the charters or contracts of affreightment under which the Vessels operate, which are of twelve months duration or more, are as follows:-

[Brief details to be inserted]

Yours faithfully

For and on behalf of
Gypsum Transportation Limited

79

APPENDIX A

Form of Drawdown Notice

To:     DVB Bank SE

From:     Gypsum Transportation Limited

[Date]

Dear Sirs,

Drawdown Notice

     We refer to the Loan Agreement dated         2008 made between, amongst others, ourselves and yourselves (“the Agreement”).

     Words and phrases defined in the Agreement have the same meaning when used in this Drawdown Notice.

     Pursuant to Clause 2.2 of the Agreement, we irrevocably request that you advance a Drawing of [                ] to us on           200    , which is a Business Day, by paying the amount of the Drawing to [                ].

     We warrant that the representations and warranties contained in Clause 4 of the Agreement are true and correct at the date of this Drawdown Notice and will be true and correct on          200    ; that no Event of Default nor Potential Event of Default has occurred and is continuing, and that no Event of Default or Potential Event of Default will result from the advance of the Drawing requested in this Drawdown Notice.

     We select the period of [   ] months as the first Interest Period.

Yours faithfully

For and on behalf of
Gypsum Transportation Limited

80

APPENDIX B

Form of Transfer Certificate

To:    DVB BANK SE

TRANSFER CERTIFICATE

This transfer certificate relates to a secured loan facility agreement (as from time to time amended, varied, supplemented or novated “the Loan Agreement”) dated             2008, on the terms and subject to the conditions of which a secured loan facility was made available to Gypsum Transportation Limited as borrower, by a syndicate of banks on whose behalf you act as agent and security trustee.

1	Terms defined in the Loan Agreement shall, unless otherwise expressly indicated, have the same meaning when used in this certificate. The terms “Transferor” and “Transferee” are defined in the schedule to this certificate.
2	The Transferor:-

2.1	confirms that the details in the Schedule under the heading “Transferor’s Commitment” accurately summarise its Commitment; and
2.2	requests the Transferee to accept by way of novation the transfer to the Transferee of the amount of the Transferor’s Commitment specified in the Schedule by counter-signing and delivering this certificate to the Agent at its address for Communications specified in the Loan Agreement.

3	The Transferee requests the Agent to accept this certificate as being delivered to the Agent pursuant to and for the purposes of clause 14.4 of the Loan Agreement so as to take effect in accordance with the terms of that clause on the Transfer Date specified in the Schedule.
4	The Agent (on its own behalf and on behalf of each of the Borrowers and each of the Banks other than the Transferor) confirms its acceptance of this certificate for the purposes of clause 14.4 of the Loan Agreement.
5	The Transferee confirms that:-

5.1	it has received a copy of the Loan Agreement together with all other information which it has required in connection with this transaction;
5.2	it has not relied and will not in the future rely on the Transferor or any other party to the Loan Agreement to check or enquire on its behalf into the legality, validity, effectiveness, adequacy, accuracy or completeness of any such information; and
5.3	it has not relied and will not in the future rely on the Transferor or any other party to the Loan Agreement to keep under review on its behalf the financial condition, creditworthiness, condition, affairs, status or nature of any of the Security Parties.

6 Execution of this certificate by the Transferee constitutes its representation to the Transferor and to all other parties to the Loan Agreement that it has the power to become a

81

	party to the Loan Agreement as a Bank on the terms of the Loan Agreement and has taken all steps to authorise execution and delivery of this certificate.
7	The Transferee undertakes with the Transferor and each of the other parties to the Loan Agreement that it will perform in accordance with their terms all those obligations which by the terms of the Loan Agreement will be assumed by it after delivery of this certificate to the Agent and the satisfaction of any conditions subject to which this certificate is expressed to take effect.
8	The Transferor makes no representation or warranty and assumes no responsibility with respect to the legality, validity, effectiveness, adequacy or enforceability of any of the Security Documents or any document relating to any of the Security Documents, and assumes no responsibility for the financial condition of any of the Security Parties or for the performance and observance by the Security Parties of any of their obligations under any of the Security Documents or any document relating to any of the Security Documents and any conditions and warranties implied by law are expressly excluded.
9	The Transferee acknowledges that nothing in this certificate or in the Loan Agreement shall oblige the Transferor to:-

9.1	accept a re-transfer from the Transferee of the whole or any part of the rights, benefits and/or obligations transferred pursuant to this certificate; or
9.2	support any losses directly or indirectly sustained or incurred by the Transferee for any reason including, without limitation, the non-performance by any party to any of the Security Documents of any obligations under any of the Security Documents.

10	The address and fax number of the Transferee for the purposes of clause 9.20 of the Loan Agreement are set out in the Schedule.
11	This certificate may be executed in any number of counterparts each of which shall be original but which shall together constitute the same instrument.
12	This certificate shall be governed by and interpreted in accordance with English law.
13	The Transferee represents and warrants, for the benefit of the Borrower and the Guarantor, that no part of the funds to be used by the Transferee to acquire its interest in the Loan shall constitute assets of an employee pension plan.
14	The Transferee attaches hereto the form (if any) required by Clause 15.6 of the Loan Agreement.

THE SCHEDULE

1	Transferor:
2	Transferee:
3	Transfer Date (not earlier that the fifth Business Day after the date of delivery of the Transfer Certificate to the Agent):
4	Transferor’s Commitment:
5	Amount transferred:

82

6 Transferee’s address and fax number for the purposes of clause 9.20 of the Loan Agreement:

[name of Transferor]	[name of Transferee]
By:	By:
Date:	Date:

DVB BANK SE as Agent

for and on behalf of itself, the Borrower and each of the Banks (other than the Transferor)

By:

Date:

83

APPENDIX C

Form of Loan Administration Form

To:  DVB Bank SE

We hereby appoint the following persons to act as our point of contact with regards to any issue arising in connection with the administration to the agreement dated [               ] made between (inter alia) yourselves and ourselves (the “Facility Agreement”) or any other documents related to the Loan:

1.	Karen Leets, 550 West Adams Street, Chicago, IL. 60661, USA, Tel: +1 312 436 5415, Mobile +1 630 606 3432, e-mail: kleets@usg.com.
2.	Ian Vallender, Le Patio Palace, 41 Ave. Hector Otto, MC98000, Monaco, Tel: +377 97978096, Fax: +377 97 97 71 50, Mobile +33 678 633725, e-mail: ivallender@beltship.com.
3.	Brian Misiunas, 550 West Adams Street, Chicago, IL. 60661, USA, Tel: +1 312 436 4549, Mobile +1 708 704 6761, e-mail: bmisiunas@usg.com.

No other persons other than the Directors of the Borrower or the persons listed above (the “Authorised Persons”) are hereby authorised to request any information from you regarding the Facility Agreement or any other matter related to the Loan or the Borrower or communicate with you in any way regarding the foregoing in and under any circumstances.

For the avoidance of doubt, the following are the Directors of the Company:

1.	Jeffrey D. Barth, 550 West Adams Street, Chicago, IL, 60661, USA, Tel: +1 312 436 5378, Mobile +1 312 804 6620, e-mail: jbarth@usg.com.
2.	Michael Ensminger, 550 West Adams Street, Chicago, IL, 60661, USA, Tel: +1 312 436 5303, Mobile +1 630 730 0102, e-mail: MEnsminger@usg.com.
3.	Ian Vallender, Le Patio Palace, 41 Ave, Hector Otto, MC98000, Monaco, Tel: +377 97978096, Fax: +377 97 97 71 50, Mobile +33 678 633725, e-mail: ivallender@beltship.com.
4.	Dominc Dannessa, 550 West Adams Street, Chicago, IL, 60661, USA, Tel: + 312 436 4316, e-mail: ddannessa@usg.com.
5.	David Doyle, Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda, Tel: +441 295 1422, e-mail: David.Doyle@conyersdillandpearman.com.

This list of authorised persons may only be amended, modified or varied in writing by an Authorised Person with copy to the other Authorised Persons.

We agree to indemnify you and hold you harmless in relation to any information you provide to any Authorised Person.

84

Words and expressions defined in the Facility Agreement shall bear the same meanings when used herein.

This letter shall be governed and construed in accordance with English law.

Yours sincerely

85

EX-10.6

Exhibit 10.6

CONFIDENTIAL TREATMENT REQUESTED BY USG CORPORATION — CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.

EXECUTION COPY

CGC INC.
as Borrower

- and -

THE TORONTO-DOMINION BANK
as Lender

CREDIT AGREEMENT

Dated as of June 30, 2009

TABLE OF CONTENTS

ARTICLE 1
INTERPRETATION	1
1.1 Definitions	1
1.2 Gender and Number	15
1.3 Certificate of the Lender as to Rates, etc.	15
1.4 Interest Act	15
1.5 Invalidity, etc.	16
1.6 Headings, etc.	16
1.7 Governing Law	16
1.8 Attornment	16
1.9 References	16
1.10 Currency	16
1.11 This Agreement to Govern	16
1.12 Generally Accepted Accounting Principles	17
1.13 Determination of Amount of Loans	17
1.14 Computation of Time Periods	17
1.15 Actions on Days Other Than Banking Days	17
1.16 Oral Instructions	17
1.17 Incorporation of Schedules	17
ARTICLE 2
CREDIT FACILITY	18
2.1 Establishment of Credit Facility	18
2.2 Revolving Nature of Credit Facility	18
2.3 Repayment under Credit Facility	18
2.4 Voluntary Reduction in Commitment	18
2.5 Advances by Overdraft Availments	19
ARTICLE 3
GENERAL PROVISIONS RELATING TO THE CREDIT FACILITY	19
3.1 Advances	19
3.2 Selection of Interest Periods and BA Periods	19
3.3 Rollover and Conversion	20
3.4 Mandatory Prepayments	20
3.5 Mandatory Repayment for Currency Excess	23
3.6 Payments Generally	23
3.7 Disturbance of Libor Market	23
3.8 Change in Circumstances	24
3.9 Illegality	25

3.10 Indemnities	25
3.11 Evidence of Indebtedness	26
ARTICLE 4
BANKERS’ ACCEPTANCES	26
4.1 Procedure for Drawing	26
4.2 Form of Bankers’ Acceptance	26
4.3 Degree of Care	27
4.4 Advance of Bankers’ Acceptances	27
4.5 Payment at Maturity	27
4.6 Circumstances Making Bankers’ Acceptances Unavailable	27
4.7 Waiver	27
4.8 Obligations Absolute	28
ARTICLE 5
LETTERS OF CREDIT	28
5.1 Procedures Relating to Letters of Credit	28
5.2 Reimbursement	28
5.3 Lender Not Liable	28
5.4 Letter of Credit Fees	29
5.5 Acceleration	29
5.6 Conflict	30
ARTICLE 6
INTEREST AND FEES	30
6.1 Interest Rates	30
6.2 Calculation and Payment of Interest	30
6.3 Commitment Fee	31
6.4 Upfront Fee	31
6.5 Payment of Costs and Expenses	31
6.6 Interest on Overdue Amounts	31
ARTICLE 7
REPRESENTATIONS AND WARRANTIES	32
7.1 Representations and Warranties	32
7.2 Survival of Representations and Warranties	36
ARTICLE 8
COVENANTS	36
8.1 Affirmative Covenants	36

- ii -

8.2 Negative Covenants	41
ARTICLE 9
CONDITIONS PRECEDENT	43
9.1 Conditions Precedent to Availability of the Credit Facility	43
9.2 Conditions Precedent to Subsequent Advances	45
ARTICLE 10
EVENTS OF DEFAULT AND REMEDIES	46
10.1 Events of Default	46
10.2 Remedies Upon Default	48
10.3 Distributions	49
ARTICLE 11
SECURITY	49
11.1 Form of Security	49
11.2 After Acquired Assets and Further Assurances	50
11.3 Release/Subordination of Security	50
11.4 Security Charging Real Assets	50
ARTICLE 12
GENERAL	50
12.1 Reliance and Non — Merger	50
12.2 Credit Information	51
12.3 No Set-Off by the Borrower	51
12.4 Set-Off by the Bank	51
12.5 Employment of Experts	51
12.6 Reliance by the Lender	51
12.7 Notices	51
12.8 Time	52
12.9 Further Assurances	53
12.10 Assignment	53
12.11 Currency Conversion and Indemnity	53
12.12 Counterparts	54
12.13 Entire Agreement	54

Schedule 1.1.1.20 — Borrowing Notice

- iii -

Schedule 1.1.31 — Compliance Certificate
Schedule 3.4.1(iii) — Disposition of Land
Schedule 7.1.9 — Subsidiaries
Schedule 7.1.10 — Litigation
Schedule 7.1.15 — Pension Plans
Schedule 7.1.16 — Insurance
Schedule 7.1.18 — Real Property
Schedule 7.1.19 — Relevant Jurisdictions
Schedule 7.1.20 — Intellectual Property
Schedule 7.1.21 — Bank Accounts

- iv -

CREDIT AGREEMENT

          THIS AGREEMENT is dated as of June 30, 2009

AMONG:

CGC INC., as Borrower

- and -

THE TORONTO-DOMINION BANK, as Lender

RECITALS:

A. The Borrower has requested that the Lender make available the Credit Facility for the purposes set out herein.

B. The Lender has agreed to provide the Credit Facility to the Borrower on the terms and conditions set forth herein.

          NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the covenants and agreements herein contained, the parties hereto agree as follows:

ARTICLE 1

INTERPRETATION

1.1 Definitions

          For the purposes of this Agreement:

1.1.1 “Acquisition” shall mean, with respect to the Borrower or any of its Subsidiaries, any purchase or other acquisition, regardless of how accomplished or effected (including any such purchase or other acquisition effected by way of amalgamation, merger, arrangement, business combination or other form of corporate reorganization or by way of purchase, lease or other acquisition arrangements), of (a) any other Person (including any purchase or acquisition of such number of the issued and outstanding securities of, or such portion of an equity interest in, such other Person that such other Person becomes a Subsidiary of the Borrower) or of all or substantially all of the Assets of any other Person, or (b) any division, business, operation or undertaking of any other Person or of all or substantially all of the Assets of any division, business, operation or undertaking of any other Person.

1.1.2 “Advance” means any utilization of the Credit Facility by the Borrower (other than by way of Rollover or Conversion of a Loan already outstanding), whether by way of advance of a Prime Rate Loan, Base Rate Loan or Libor Loan or by way of issuance of Bankers’ Acceptance or a Letter of Credit.

1.1.3 “Affiliate” means, in respect of any corporation, any Person which, directly or indirectly, controls or is controlled by or is under common control with the corporation; and for the purpose of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) means the power to direct, or cause to be directed, the management

and policies of a corporation whether through the ownership of Voting Shares or by contract or otherwise.

1.1.4 “Agreement” means this agreement and all schedules attached to this agreement, in each case as they may be amended, restated or supplemented from time to time; the expressions “hereof”, “herein”, “hereto”, “hereunder”, “hereby” and similar expressions refer to this Agreement as a whole and not to any particular article, section, schedule or other portion hereof, and the expression “article” and “section” followed by a number or by a number and letter, and “schedule” followed by a letter, mean and refer to the specified article or section of or schedule to this Agreement, except as otherwise specifically provided herein.

1.1.5 “Annual Business Plan” for a Fiscal Year means the annual business plan of the Borrower, prepared on a consolidated basis, with detailed financial projections and budgets prepared on a quarterly basis for that Fiscal Year in each case consisting of a balance sheet, statement of income, statement of changes in financial position (including proposed capital expenditures).

1.1.6 “Applicable Law” means, in respect of any Person, assets, transaction, event or circumstance, all applicable laws, statutes, rules, by-laws, regulations and all applicable permits, certificates, approvals, registrations, licenses, consents, authorizations, directives, orders, judgments, decrees and policies or guidelines of (or issued by) Governmental Bodies, having the force of law.

1.1.7 “Applicable Margin” means (i) with respect to any Advance by way of Prime Rate Loan or Base Rate Loan, 150 basis points and (ii) with respect to any Advance by way of Libor Loan or Banker’s Acceptance, 300 basis points.

1.1.8 “Arms Length” has the meaning ascribed to such term in the Income Tax Act (Canada), as in effect on the date hereof.

1.1.9 “Assets” means, with respect to the Borrower and the Subsidiaries, all property, assets and undertaking of the Borrower that are used to carry on the Business (including all shares in the capital of the Subsidiaries) and all property, assets and undertaking of the Subsidiaries, of every nature and kind, wherever situated, both present and future, real and personal, tangible and intangible.

1.1.10 “Bankers’ Acceptance” means a depository bill (as defined in the Depository Bills and Notes Act (S.C. 1998 c. 13)) in Canadian dollars signed by or on behalf of the Borrower and accepted by the Lender pursuant to this Agreement.

1.1.11 “Bankers’ Acceptance Discount Rate” means, in respect of any Bankers’ Acceptance purchased on any Borrowing Date pursuant to Article 4, the rate for the Lender quoted on the Reuters screen CDOR page determined at 10:00 a.m. (Toronto time) on such Borrowing Date for bankers’ acceptances with a term to maturity the same as such Bankers’ Acceptance. If such rate is not available as of such time, then the discount rate in respect of such Bankers’ Acceptance shall be the rate applicable to bankers’ acceptances issued by the Lender with the applicable term quoted by the Lender as at 10:00 a.m. (Toronto Time) on such date.

1.1.12 “Bankers’ Acceptance Fee” means, in respect of any Bankers’ Acceptance to be purchased by the Lender, the product of (i) the Face Amount of such Bankers’ Acceptance; (ii) the

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Applicable Margin; and (iii) a fraction the numerator of which is the number of days comprising the term to maturity of such Bankers’ Acceptance and the denominator of which is 365.

1.1.13 “Bankers’ Acceptance Proceeds” means, on any Borrowing Date, in respect of a Bankers’ Acceptance to be purchased by the Lender on such Borrowing Date, the difference between (i) the result (rounded to the nearest whole cent, with one-half of one cent being rounded up) obtained by dividing the aggregate Face Amount of such Bankers’ Acceptance by the sum of one plus the product of (x) the Bankers’ Acceptance Discount Rate; and (y) a fraction the numerator of which is the number of days comprising the term to maturity of such Bankers’ Acceptance and the denominator of which is 365; and (ii) the applicable aggregate Banker’s Acceptance Fee.

1.1.14 “BA Period” means, with respect to a Bankers’ Acceptance, the term thereof as selected by the Borrower in the applicable Borrowing Notice, in each case commencing on the Borrowing Date of the Bankers’ Acceptance and expiring one, two, three or six months after such Borrowing Date.

1.1.15 “Banking Day” means a day, other than a Saturday or Sunday, on which banks are generally open for business in Toronto, Canada.

1.1.16 “Base Rate” means, for any day, the annual rate of interest, expressed on the basis of a year of 365 or 366 days, as the case may be, equal to the greater of (i) the rate which the Lender establishes at its principal office in Toronto as the reference rate of interest in order to determine interest rates it will charge on such day for commercial loans in U.S. dollars made to its customers in Canada and which it refers to as its “U.S. Base Rate”, and (ii) the Federal Funds Effective Rate on such day plus 0.5% per annum, such rate to be adjusted automatically and without the necessity of any notice to the Borrower upon each change to such rate.

1.1.17 “Base Rate Loan” means, at any time, any Loan which is outstanding at such time and in respect of which interest is calculated based on the Base Rate and “Base Rate Loans” means, at any time, all Base Rate Loans at such time.

1.1.18 “Borrower” means CGC Inc., a corporation existing under the laws of the Province of New Brunswick and includes its successors and assigns.

1.1.19 “Borrowing Date” means any Banking Day on which an Advance is made, or is to be made in accordance with a request of the Borrower.

1.1.20 “Borrowing Notice” means a notice substantially in the form of Schedule 1.1.20.

1.1.21 “Branch of Account” means the Lender’s main branch located at The Toronto-Dominion Centre, Toronto, Ontario, or such other branch of the Lender in the City of Toronto as the Lender may designate in writing to the Borrower.

1.1.22 “Business” means, with respect to the Borrower, the business of marketing, manufacturing and distributing building materials and businesses related thereto.

1.1.23 “Canadian Dollar Value” means, in relation to any particular amount of money at any time, the value thereof at such time in Canadian dollars, determined as follows:

(a) for that portion of such amount which is Canadian dollars, the face amount thereof; and

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(b) for that portion of such amount which is U.S. dollars, the Canadian dollar equivalent thereof converted for such purposes at the Conversion Rate.

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

1.1.25 “Canadian Taxes” means all Taxes imposed, levied, collected, withheld or assessed by any Governmental Body of or within Canada or any political subdivision thereof.

1.1.26 “Capital Expenditures” means, for any period, any expenditure made by any Person, on a consolidated basis, for the purchase, acquisition, development, improvement, construction, repair or replacement of capital assets, and any expenditure related to a Capital Lease or any other expenditure required to be capitalized, all as determined in accordance with GAAP.

1.1.27 “Capital Lease” means a capital lease or lease which should be treated as a capital lease under GAAP.

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

(a) the acquisition by any Person or a combination of Persons acting jointly or in concert of a direct or indirect interest in more than 50% of the voting power of the voting shares of the Borrower by way of purchase, merger, consolidation or otherwise (other than a creation of a holding company or other transaction that does not involve a change in the aggregate beneficial ownership, directly or indirectly, of the Borrower as a result of the transaction);

(b) the amalgamation, merger, or consolidation of the Borrower with or into another Person or the amalgamation or merger of another Person into the Borrower with the effect that, immediately after such a transaction, the shareholders of the Borrower (or their respective Affiliates) immediately prior to such a transaction hold less than 50% of the total voting power of all securities generally entitled to vote in the election of directors, managers or trustees of the Person surviving such amalgamation, merger or consolidation.

1.1.29 “Closing Date” means June 30, 2009.

1.1.30 “Commitment” means, at any time, $30,000,000 or the U.S. Dollar Equivalent thereof, subject to all reductions effected from time to time pursuant to sections 2.4, 3.4 or 3.9.

1.1.31 “Compliance Certificate” means a certificate of the Borrower in substantially the form attached as Schedule 1.1.31 signed on the Borrower’s behalf by its Vice President Finance, chief financial officer, or any other officer acceptable to the Lender, (i) stating that the financial statements delivered pursuant to sections 8.1.10 or 8.1.11, as applicable, present fairly, in all material respects, the financial position, results of operations and cash flows of the Borrower in accordance with GAAP subject to normal year-end audit adjustments and the absence of notes in the case of financial statements delivered to the Lender pursuant to section 8.1.10; (ii) stating that the representations and warranties contained in the Credit Documents are true and correct in all material respects on and as of such date; (iii) stating that no Default or Event of Default has occurred and is continuing (or describing the details of any existing Default or Event of Default and the action which the Borrower proposes to take or has taken with respect thereto) (iv) providing, in reasonable detail, evidence of compliance, at the end of each Fiscal Quarter, with section 8.1.21; and (v) listing any Liens on its Intellectual Property described in paragraph (v) of

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the definition of Permitted Encumbrances and any Guarantee Obligations provided by the Borrower or any Subsidiary to any Person of which the Borrower is aware.

1.1.32 “Conversion” means a conversion of a Prime Rate Loan or a Base Rate Loan or Libor Loan into one or more of the other thereof, or a conversion of any of the foregoing to a Bankers’ Acceptance or the conversion of a Bankers’ Acceptance to any of the foregoing.

1.1.33 “Conversion Date” means, in respect of any Loan, the Banking Day on which a Conversion thereof is made.

1.1.34 “Conversion Rate” means, in relation to the quantification in one Currency of an amount denominated in the other Currency, the Bank of Canada noon rate of exchange for such Currencies on the day of calculation.

1.1.35 “Credit Documents” means this Agreement, the Security Documents and any guarantees in respect hereof which may exist from time to time and “Credit Document” means any one of them.

1.1.36 “Credit Facility” means the revolving credit facility made available to the Borrower by the Lender pursuant to section 2.1.1.

1.1.37 “Currency” means either Canadian dollars or U.S. dollars.

1.1.38 “Current Assets” means, as at the end of any Fiscal Quarter, all assets of the Borrower and its Subsidiaries on a consolidated basis which in accordance with GAAP, would be classified on a consolidated balance sheet of the Borrower and its Subsidiaries as current assets.

1.1.39 “Current Liabilities” means, as at the end of any Fiscal Quarter, all liabilities of the Borrower and its Subsidiaries on a consolidated basis which, in accordance with GAAP, would be classified on a consolidated balance sheet of the Borrower and its Subsidiaries as current liabilities.

1.1.40 “Current Ratio” means at the end of any Fiscal Quarter the ratio of (i) Current Assets to (ii) Current Liabilities, as at the end of such Fiscal Quarter. The Current Ratio is to be calculated without regard for intercompany (i.e. between any of the Borrower and its Affiliates) assets and liabilities. For greater certainty, all rebates are to be deducted from accounts receivable for the purposes of testing and, notwithstanding the foregoing, prepaid accounts payable to Affiliates are to be included in Current Assets to the extent they may be classified as current prepaid expenses under GAAP.

1.1.41 “Debt” of any Person means (without duplication) (i) all indebtedness of such Person for borrowed money (even though the rights and remedies of the holder of such indebtedness in the event of default may be limited to the foreclosure or sale of specific property), including borrowings of commodities, bankers’ acceptances, letters of credit or letters of guarantee; (ii) all indebtedness of such Person for the deferred purchase price of property or services, other than for goods and services purchased in the ordinary course of business; (iii) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to assets acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such assets); (iv) all current liabilities of such Person represented by a note, bond, debenture or other evidence of Debt; (v) all obligations under Capital Leases in respect of which such Person is liable as lessee; (vi) the aggregate amount at which any shares in the capital of such Person which are redeemable or retractable at the option

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of the holder thereof may be retracted or redeemed; (vii) all indebtedness of such Person secured by a Purchase Money Security Interest; (viii) trade accounts payable not incurred in the ordinary and usual course of business and made on extended payment terms, and (ix) all Guarantee Obligations of such Person.

1.1.42 “Default” means any event which, but for the lapse of time, giving of notice or both, would constitute an Event of Default.

1.1.43 “Depreciation Expense” means, for any period with respect to any Person, depreciation, amortization, depletion and other like reductions to income of such Person for such period not involving any outlay of cash, determined, without duplication, on a consolidated basis in accordance with GAAP.

1.1.44 “Disposition” means any sale, assignment, transfer, conveyance, permanent user license or other disposition of any nature or kind whatsoever of any Assets or of any right, title or interest in or to any Assets, and the verb “Dispose” shall have a correlative meaning. In the case of Section 8.2.2 “Disposition” shall, in addition to the preceding sentence, also include any lease or license of any Assets or of any right, title or interest in or to any Assets

1.1.45 “EBITDA” means, for any period with respect to the Borrower, determined on a consolidated basis in accordance with GAAP, the Net Income of the Borrower for such period:

(a) increased by the sum of (without duplication):

(i) Interest Expense for such period;

(ii) provisions and payments made for taxes based on income for such period;

(iii) other non-cash charges for such period which have been deducted in determining Net Income, to the extent not included in Depreciation Expenses;

(iv) Depreciation Expense for such period;

(v) extraordinary and unusual expenses incurred for such period; and

(vi) other non-recurring expenses incurred for such period that the Lender and the Borrower may agree from time to time, acting reasonably

in each case to the extent that such amounts were deducted in the calculation of Net Income for such period, and

(b) decreased by the sum of:

(i) extraordinary and unusual non-recurring gains to the extent that such amounts were added in the calculation of Net Income for such period,

(ii) other non-recurring gains incurred for such period that the Lender and the Borrower may agree from time to time, acting reasonably; and

(iii) interest income for such period;

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(iv) any other non-cash gains for such period which have been added in determining Net Income;

1.1.46 “Environmental Laws” mean all Applicable Laws to the extent such relate to environmental or public or occupational health and safety matters including, without limitation, Environmental Permits and Environmental Orders.

1.1.47 “Environmental Orders” includes applicable orders, directives, decisions, or the like rendered by any Governmental Body pursuant to or under any Environmental Laws.

1.1.48 “Environmental Permits” includes all permits, certificates, approvals, consents, authorizations, registrations and licenses issued by, and registrations with, any Governmental Body pursuant to or required for the Business to be in compliance with all Environmental Laws and Environmental Orders.

1.1.49 “Event of Default” has the meaning attributed to such term in section 10.1.

1.1.50 “Excluded Taxes” means in relation to the Lender, those Canadian Taxes which are imposed or levied on or measured by the overall net income or capital of such Person or any of its applicable lending offices, and all franchise taxes, taxes on doing business or taxes measured by capital or net worth imposed on the Lender or any of its applicable lending offices, whether collected by withholding or otherwise, as a result of the Lender (i) carrying on a trade or business in Canada or having a permanent establishment in Canada, (ii) being organized under the laws of Canada or any political subdivision thereof, (iii) being or being deemed to be resident or non-resident in Canada for income tax purposes, or (iv) not dealing at Arm’s Length with the Borrower; but for greater certainty shall not include any sales, goods or services taxes payable under the laws of Canada or any political subdivision thereof with respect to any goods or services made available by the Lender to the Borrower hereunder.

1.1.51 “Expiry Date” means the last day of an Interest Period or a BA Period or the expiry date of a Letter of Credit (as applicable).

1.1.52 “Face Amount” means in respect of a Bankers’ Acceptance, the amount payable to the holder thereof on its maturity.

1.1.53 “Federal Funds Effective Rate” means, for any day, the annual rate of interest equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Banking Day, for the next preceding Banking Day) by the Federal Reserve Bank of New York, or if such rate is not so published for any day which is a Banking Day, the average of the quotations for such day on such transactions received by the Lender from three United States federal funds brokers of recognized standing selected by it.

1.1.54 “Fiscal Year” means the fiscal year of the Borrower, being January 1 to December 31.

1.1.55 “Fiscal Quarter” means a period of three consecutive months ending on March 31, June 30, September 30 and December 31, as the case may be, of each Fiscal Year.

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1.1.56 “GAAP” means those accounting principles which are recognized as being generally accepted in the United States from time to time and for periods commencing after the Parent adopts International Financial Reporting Standards, International Financial Reporting Standards as issued by the International Accounting Standards Board, consistently applied and as in effect from time to time.

1.1.57 “Governmental Body” means any government, parliament, legislature, or any regulatory authority, agency, commission or board of any government, parliament or legislature, or any court or (without limitation to the foregoing) any other law, regulation or rule-making entity (including, without limitation, any central bank, fiscal or monetary authority or authority regulating banks), having or purporting to have jurisdiction in the relevant circumstances, or any Person (including, without limitation, any arbitrator) acting or purporting to act under the authority of any of the foregoing.

1.1.58 “Guarantee Obligations” means, with respect to any Person, all guarantees, indemnities or contingent obligations made by such Person in respect of the Debt of any other Person, including without limitation, letters of guarantee, letters of credit, legally binding comfort letters or indemnities issued in connection therewith, endorsements of bills of exchange (other than for deposit or collection in the ordinary course of business) and obligations to purchase assets regardless of the delivery or non-delivery thereof.

1.1.59 “Hedging Arrangements” means any agreement (including any transaction contemplated thereby) now existing or hereafter entered into between the Borrower and the Lender which is an interest rate swap, cap, floor or collar agreement, interest rate forward, future or option contract, cross currency interest rate swap agreement or interest rate future or option contract, a spot or forward foreign exchange contract or any other derivative agreement relative to interest rates, foreign exchange, debt obligations, equities, commodities or other indices.

1.1.60 “Intellectual Property” means the intellectual property in patents, patent applications, trade-marks, trade-mark applications, trade names, service marks, copyrights, copyright registrations, trade secrets, industrial designs, technology and other similar intellectual property rights.

1.1.61 “Interest Coverage Ratio” means at the end of any Fiscal Quarter, the ratio of (i) EBITDA less Capital Expenditures for the most recent four Fiscal Quarters then ended to (ii) cash Interest Expense for the most recent four Fiscal Quarters then ended.

1.1.62 “Interest Expense” means, for any period and on a consolidated basis, without duplication, the aggregate amount of interest and other financing charges expensed by the Borrower and its Subsidiaries in such period with respect to Debt including interest, discount and financing fees, commissions, discounts, the interest or time value of money component of costs related to factoring or securitizing receivables or monetizing inventory and other fees and charges payable with respect to letters of credit and bankers’ acceptance financing, standby fees, the interest component of Capital Leases and net payments (if any) pursuant to hedge arrangements involving interest, net of any interest income earned in such period and net receipts (if any) pursuant to hedge arrangements involving interest and permitted pursuant to this Agreement, all as determined in accordance with GAAP.

1.1.63 “Interest Period” means, with respect to each Libor Loan, the period selected by the Borrower in accordance with the provisions hereof and being of a duration of one, two, three or six

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months, subject to availability, commencing on the Borrowing Date, Rollover Date or Conversion Date (as the case may be) of such Loan.

1.1.64 “Letter of Credit” means a letter of credit or letter of guarantee issued in accordance with the provisions hereof.

1.1.65 “Letter of Credit Fee” means, in respect of each Letter of Credit, a fee calculated on the basis of a 365 day year for the period from the date of issue thereof to the expiry date thereof, at the rate per annum equal to the Applicable Margin for Bankers’ Acceptances.

1.1.66 “Libor” for each Interest Period of each Libor Loan means the percentage rate per annum which appears on the page of the Reuters Screen which displays or publishes the British Bankers’ Association Interest Settlement Rate for U.S. dollar deposits (being currently “LIBOR01”) for such Interest Period as of 11:00 a.m. (London, England time) on the Quotation Date for such Interest Period and for a period similar to such Interest Period or, if such page or such service shall cease to be displayed or published, such other page or such other service for the purpose of displaying or publishing the British Bankers’ Association Interest Settlement Rate for U.S. dollar deposits as the Lender shall select. If no quotation for U.S. dollar deposits for any Interest Period is displayed or published to permit the Lender to determine Libor in accordance with the foregoing, Libor will be determined by the Lender with reference to the rate of interest quoted by the Lender as the rate at which the Lender was offering U.S. dollar deposits in a representative amount to prime banks in the London interbank market for such Interest Period as of 11:00 a.m. (London, England time) on the Quotation Date for such Interest Period. For the purposes of this definition, “Quotation Date” means, in relation to any Interest Period, the day on which quotations would ordinarily be given by prime banks in the London interbank market for deposits in U.S. dollars for delivery on the first day of that Interest Period. As of the Closing Date, the Quotation Date for an Interest Period relating to a Libor Loan is two (2) London Banking Days prior to the first day of that Interest Period.

1.1.67 “Libor Loan” means, at any time, any Loan which is outstanding at such time in U.S. dollars and in respect of which interest is calculated at a rate calculated by reference to Libor, and “Libor Loans” means, at any time, all Libor Loans at such time.

1.1.68 “Lien” means any mortgage, lien, pledge, assignment, charge, security interest, lease intended as security, title retention agreement, registered lease of real property, hypothec, levy, execution, seizure, attachment, garnishment or other similar encumbrance.

1.1.69 “Loan” means, at any time, the principal amount of all Prime Rate Loans, Base Rate Loans, Libor Loans, Bankers’ Acceptance or Letters of Credit then outstanding under the Credit Facility, denominated in the same Currency, and,

(a) in the case of a Loan made through the issuance of Bankers’ Acceptance, relating to all Bankers’ Acceptance issued in respect of a single Borrowing Notice;

(b) in the case of a Libor Loan, pursuant to an Advance, Rollover or Conversion made on the same date and having the same Expiry Date; and

(c) in the case of a Letter of Credit, relating to a single Letter of Credit;

and “Loans” means, at any time, each and every Loan then outstanding under the Credit Facility at such time.

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1.1.70 “London Banking Days” means a day which is not a Saturday or Sunday on which dealings by and between banks in U.S. dollar deposits may be transacted in the London interbank market.

1.1.71 “Material Adverse Effect” means a material adverse effect on (i) the Business, Assets or, financial condition of the Borrower and its Subsidiaries taken as a whole, or (ii) the ability of the Borrower or any Subsidiary that becomes a guarantor pursuant to Section 8.1.19 to perform its obligations under any Credit Document, or (iii) the validity or enforceability of any Credit Document.

1.1.72 “Material Authorization” means any approval, permit, licence or similar authorization (including any trademark, trade name or patent) from, and any filing or registration with, any Governmental Body required by the Borrower or any Subsidiary to own the Assets or to carry on its Business where the failure to have such approval, permit, licence, authorization, filing or registration would reasonably be expected to have a Material Adverse Effect.

1.1.73 “Material Subsidiary” means any Subsidiary that either (A) has provided any Security or (B) (i) directly accounts for 10% or more of consolidated revenue or 10% or more of the consolidated Asset value of the Borrower and its Subsidiaries; and (ii) where the Borrower and its Subsidiaries have a direct or indirect economic interest or voting rights of greater than 50%.

1.1.74 “Maturity Date” means June 1, 2012 or such earlier date as the entire balance of the Loans becomes due hereunder pursuant to sections 2.4, 3.4 or 3.9 or following an Event of Default.

1.1.75 “Net Income” means, for any period, the net income of the Borrower, on a consolidated basis, for such period, all as determined in accordance with GAAP.

1.1.76 “Obligations” means all indebtedness, liabilities and other obligations of the Borrower to the Lender hereunder and of the Borrower or any Subsidiary under the Credit Documents (including any amendments or supplements thereto) or under any other document (including any amendments or supplements thereto) delivered pursuant to, or otherwise in respect of this Agreement, whether actual or contingent, direct or indirect, matured or not, now existing or arising hereafter.

1.1.77 “Officers’ Certificate” means, in respect of any Person, a certificate signed by any senior officer of the Person.

1.1.78 “Parent” means USG Corporation, a Delaware corporation, and its successors and permitted assigns.

1.1.79 “Permitted Debt” means:

(a) Debt under this Agreement;

(b) additional Debt in an amount not in excess of $50,000,000 in the aggregate outstanding at any time;

(c) other Debt not included in any other paragraph of this definition, consented to in writing by the Lender from time to time; and

(d) Guarantee Obligations in respect of any of the Parent and its Subsidiaries.

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1.1.80 “Permitted Encumbrances” means:

(a) Liens for taxes, assessments or governmental charges incurred in the ordinary course of business that are not yet past due or delinquent by more than 30 days or the validity of which is being actively and diligently contested in good faith by the Borrower or a Subsidiary, as the case may be, in respect of which the Borrower or Subsidiary has established on its books reserves considered by it and its auditors to be adequate therefor, all enforcement proceedings have been stayed;

(b) rights reserved to or vested in any Governmental Body by the terms of any lease, licence, franchise, grant or permit, or by any statutory provision, to terminate the same, to take action which results in an expropriation, to designate a purchaser of any Assets or to require annual or other payments as a condition to the continuance thereof;

(c) construction, mechanics’, carriers’, warehousemen’s and materialmen’s Liens and Liens in respect of vacation pay, workers’ compensation, employment insurance, Canada Pension Plan, Quebec Pension Plan or similar statutory obligations, provided the obligations secured by such Liens are not yet due or delinquent by more than 30 days and, in the case of construction Liens, which would not reasonably be expected to result in a Material Adverse Effect;

(d) Liens arising from court or arbitral proceedings, provided that they are either (A) Liens securing an amount (alone or in aggregate with other such Liens) less than $5,000,000 (or its equivalent in the relevant covering of payment) or (B) (i) claims secured thereby are being contested in good faith by the Borrower or a Subsidiary; (ii) execution thereon has been stayed and continues to be stayed; and (iii) such Liens would not reasonably be expected to result in a Material Adverse Effect;

(e) good faith deposits made in the ordinary course of business to secure the performance of bids, tenders, contracts (other than for the repayment of borrowed money), leases, surety, customs, performance bonds and other similar obligations;

(f) deposits to secure public or statutory obligations or in connection with any matter giving rise to a Lien described in (c) above;

(g) deposits of cash or securities in connection with any appeal, review or contestation of any Lien or any matter giving rise to a Lien described in (a) or (d) above;

(h) easements, servitudes, party wall agreements, rights of way, licenses, restrictions that run with land and other similar rights and agreements (including, without limiting the generality of the foregoing, easements, rights of way and agreements for sewers, drains, gas and water mains or electric light and power or telephone, telecommunications or cable conduits, poles, wires and cables) which do not and will not, in the aggregate, result in, or reasonably be expected to have, a Material Adverse Effect;

(i) security given by the Borrower or a Subsidiary to a public utility or any Governmental Body, when required by such utility or Governmental Body in connection with the operations of the Borrower or Subsidiary, as the case may be, in the ordinary course of its business, which singly or in the aggregate do not result in, or are reasonably expected to have, a Material Adverse Effect;

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(j) reservations, limitations, provisos and conditions expressed in any original grants from the Crown of any land or interest therein and statutory exceptions to title;

(k) defects, if any, in survey and surveying matters generally and defects which are or would be disclosed by proper and up-to-date surveys of any real property;

(l) any Lien, other than a construction Lien, payment of which has been provided for by deposit with the Lender of an amount in cash, or the obtaining of a surety bond or letter of credit satisfactory to the Lender, sufficient in either case to pay or discharge such Lien or upon other terms satisfactory to the Lender;

(m) applicable municipal by-laws, development agreements, subdivision agreements, site plan agreements and building restrictions which do not in the aggregate result in, or are reasonably expected to have, a Material Adverse Effect and provided that the same have been complied with in all material respects;

(n) banker’s liens, rights of combination of accounts or similar rights in the ordinary course of conducting day-to-day banking business in relation to deposit accounts or other funds maintained with a creditor depository institution (collectively, “Banker’s Liens”); provided that such Banker’s Liens (A) do not relate to any deposit account that is a dedicated cash collateral account which is, or is conditionally, subject to restrictions against access by the depositor or account holder, (B) do not relate to any deposit account intended by the depositor or account holder to provide collateral to the depository institution, and (C) are not intended directly or indirectly to secure the payment or performance of specified Debt;

(o) the reversionary interests of landlords under operating leases of real property (that are not Capital Leases) with the Borrower or a Subsidiary as tenant;

(p) the tenancy rights of tenants under operating leases of real property (that are not Capital Leases) with the Borrower or a Subsidiary as landlord;

(q) the interests (including Liens in the property leased and any insurance related thereto) of lessors under operating leases of property (that are not Capital Leases);

(r) Liens arising from the granting of a license to any Person in the ordinary course of business of the Borrower or its Subsidiaries, provided that such Liens attach only to the assets subject to such license and the granting of such license is permitted hereunder;

(s) Liens of a collecting bank arising in the ordinary course of business for the purposes of collection under applicable law in effect in the relevant jurisdiction covering only the items being collected upon;

(t) Liens created by sales contracts documenting unconsummated Asset Dispositions provided that such Liens attach only to those Assets that are the subject of the applicable sales contract;

(u) Liens arising by operation of law or contract on insurance policies and the proceeds thereof to secure premiums thereunder;

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(v) Liens (other than those described in paragraph (a) above) on Intellectual Property of the Borrower, securing amounts not exceeding $35,000,000 (or equivalent in foreign currency) in the aggregate at any time;

(w) Liens on cash or marketable securities pledged to counterparties (other than the Lender) under derivative contracts to secure out of the money mark-to-market exposure under such derivative agreements so long the aggregate total value of all cash or marketable securities pledged does not exceed $35,000,0000 (or equivalent in foreign currency) in the aggregate at any time;

(x) Liens on capital assets not referred to in any of paragraphs (a) to (v) inclusive above or paragraphs (y) and (z) below securing amounts not exceeding $35,000,000 (or equivalent in foreign currency) in the aggregate at any time (for the avoidance of doubt, (i) such $35,000,000 basket will be reduced by the aggregate amount of all cash and marketable securities pledged as referred to in paragraph (w) above at that time and (ii) the liabilities under the derivative agreements secured by such cash and marketable securities shall not be taken into account in computing the maximum amount of the liabilities permitted to be secured by such $35,000,000 basket);

(y) the Security and any other Liens granted to or for the benefit of the Lender; and

(z) such other Liens as the Lender may consent to in writing from time to time.

1.1.81 “Person” means any individual, partnership, limited partnership, limited liability company, joint venture, syndicate, sole proprietorship, company or corporation with or without share capital, unincorporated association, trust, trustee, executor, administrator or other legal personal representative or Governmental Body.

1.1.82 “Prime Rate” means, at any time, the annual rate of interest expressed on the basis of a year of 365 or 366 days, as the case may be, equal to the greater of (i) the rate which the Lender establishes at its principal office in Toronto as the reference rate of interest to determine interest rates it will charge on such day for commercial loans in Canadian dollars made to its customers in Canada and which it refers to as its “prime rate of interest”, and (ii) the rate for Canadian dollar bankers’ acceptances of the Lender having a term to maturity of one month that appears on the Reuters Screen CDOR Page (or such other page as is a replacement therefor) at 10:00 a.m. (Toronto time) on such day plus 1.0% per annum, such rate to be adjusted automatically and without the necessity of any notice too the Borrower upon each change to such rate.

1.1.83 “Prime Rate Loan” means, at any time, any Loan which is outstanding at such time and in respect of which interest is calculated based on the Prime Rate and “Prime Rate Loans” means, at any time, all Prime Rate Loans at such time.

1.1.84 “Purchase Money Security Interest” means any Lien given to provide or secure, or to provide the obligor with funds to pay, the whole or any part of the consideration for the acquisition of property where (i) the principal amount of the obligation secured by such Lien is not in excess of the cost to the obligor of such property, together with all costs of delivery, set-up, service, maintenance and insurance related thereto and Taxes, and (ii) such Lien extends only by the property being acquired by the obligor and all proceeds thereof and all insurance related thereto, and includes the renewal, replacement or refinancing of any such Lien upon the same property provided that the indebtedness secured and the security therefor are not increased thereby.

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1.1.85 “Relevant Jurisdiction” means, from time to time, with respect to a Person that is granting Security hereunder, any province or territory of Canada, any state of the United States or any other country or political subdivision thereof, which constitutes such Person’s jurisdiction of formation or in which such Person maintains its chief executive office or chief place of business or in which it has Assets (other than motor vehicles) with an aggregate market value in excess of $2,000,000 and, for greater certainty, at the Closing Date includes the provinces and states set forth in Schedule 7.1.19.

1.1.86 “Rollover” means, in respect of a Libor Loan or Bankers’ Acceptance, the continuation of all or any portion thereof for a succeeding Interest Period or BA Period, as the case may be, in accordance with the provisions hereof.

1.1.87 “Rollover Date” means, in respect of a Libor Loan or Bankers’ Acceptance, a Banking Day on which a Rollover thereof occurs.

1.1.88 “Security” means all security (including guarantees) held from time to time by or on behalf of the Lender, securing or intended to secure directly or indirectly repayment of the Obligations and includes, without limitation, all security described in Article 11 and Section 8.1.19 (Additional Security).

1.1.89 “Security Documents” means the documents referred to in Article 11 and Section 8.1.19 (Additional Security).

1.1.90 “Senior Credit Agreement” means the credit agreement dated as of January 7, 2009 among the Parent, as borrower, the lenders party thereto, as lenders, JPMorgan Chase Bank, N.A., as administrative agent, Goldman Sachs Credit Partners L.P., as syndication agent and J.P. Morgan Securities Inc., as sole bookrunner and lead arranger.

1.1.91 “Subsidiary” with respect to any Person means, any corporation, partnership, limited liability company, association or other business entity of which more than 50% of the Voting Shares, or other similar voting units or interests, of which are owned, directly or indirectly, by such Person or by one or more Subsidiaries of such Person or by such Person and one or more of such Person’s other Subsidiaries. Unless the context otherwise requires, reference to a Subsidiary means a Subsidiary of the Borrower.

1.1.92 “Tangible Net Worth” means, as at the end of any Fiscal Quarter, (i) all items which in conformity with GAAP would be included under shareholders’ equity on a consolidated balance sheet of the Borrower, plus (ii) all loans and advances owing by the Borrower and/or its Subsidiaries to any other Affiliates of the Borrower payment of which is postponed to the prior payment of the Obligations and the Hedging Arrangements on terms agreed with the Lender, less (iii) the sum (without duplication) of (A) (iii) all loans and advances made by the Borrower and/or its Subsidiaries to other Affiliates of the Borrower, which for greater certainty shall include accounts payable prepaid by the Borrower or its Subsidiaries to Parent or Affiliates and any Guarantee Obligations of the Borrower or its Subsidiaries with respect to liabilities of the Parent or Affiliates, plus (B) goodwill and other intangible assets, plus (C) investments (other than loans and advances) as they would be shown on the consolidated balance sheet of the Borrower, in the Parent or entities in which the Borrower or its Affiliates directly or indirectly owns more than 10% of the Voting Shares and plus (D) investments, other than those referred to in (C), as they would be shown on the consolidated balance sheet of the Borrower, in securities that are not (a) publicly traded on the Toronto Stock Exchange or on some other recognized exchange in Canada or the United States or (b) treasury bills, certificates of deposit or other deposits held at any bank, trust

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company or other financial institution organized under the laws of any Group of Eight nation, bonds with a current rating of at least investment grade by any of Standard & Poor’s Rating Service, Moody’s Investors Service, Fitch Ratings and DBRS Ltd (an “Investment Grade Rating”) commercial paper with a current rating of at least Investment Grade Rating, or public related debt securities issued by or whose principal is 100% unconditionally guaranteed by Canada or any province of Canada, or by Canadian chartered banks listed on Schedule I, II or III of the Bank Act (Canada);

1.1.93 “Taxes” means all taxes of any kind or nature whatsoever including, without limitation, income taxes, sales or value-added taxes, levies, stamp taxes, royalties, duties, and all fees, deductions, compulsory loans and withholdings imposed, levied, collected, withheld or assessed as of the date hereof or at any time in the future, by any Governmental Body of or within Canada, together with penalties, fines, additions to tax and interest thereon.

1.1.94 “U.S. dollars” and “U.S.$” means lawful money of the United States of America.

1.1.95 “U.S. Dollar Equivalent” means, in relation to any particular amount of money in Canadian dollars at any particular time, the value thereof at such time in U.S. dollars determined at the Conversion Rate.

1.1.96 “Voting Shares” means capital stock of any class of a corporation which carries voting rights for election of directors under any circumstances, provided that shares which carry the right to vote for election of directors conditionally upon the happening of an event shall not be considered Voting Shares until the occurrence of such event and then only during the continuance of such event.

1.2 Gender and Number

          Words importing the singular include the plural and vice versa and words importing gender include all genders.

1.3 Certificate of the Lender as to Rates, etc.

          A certificate of the Lender certifying the amount of the Applicable Margin, the Banker’s Acceptance Discount Rate, the Base Rate, the Prime Rate, the Banker’s Acceptance Fee, the Letter of Credit Fee, the Federal Funds Effective Rate or Libor at any particular time in respect of any Loan made or maintained or to be made or maintained hereunder or the Conversion Rate in respect of any calculation hereunder shall be prima facie evidence thereof for all purposes, absent manifest error. Unless expressly provided otherwise, no provision hereof shall be construed so as to require the Lender to issue a certificate at any particular time.

1.4 Interest Act

          For purposes of the Interest Act (Canada), where in any Credit Document (i) a rate of interest is to be calculated on the basis of a year of 360 days, the yearly rate of interest to which the 360 day rate is equivalent is such rate multiplied by the number of days in the year for which such calculation is made and divided by 360, or (ii) an annual rate of interest is to be calculated during a leap year, the yearly rate of interest to which such rate is equivalent is such rate multiplied by 366 and divided by 365.

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1.5 Invalidity, etc.

          Each of the provisions contained in any Credit Document is distinct and severable and a declaration of invalidity, illegality or unenforceability of any such provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision of such Credit Document or of any other Credit Document. Without limiting the generality of the foregoing, if any amounts on account of interest or fees or otherwise payable by the Borrower to the Lender hereunder exceed the maximum amount recoverable under Applicable Law, the amounts so payable hereunder shall be reduced to the maximum amount recoverable under Applicable Law.

1.6 Headings, etc.

          The division of a Credit Document into articles, sections and clauses, the inclusion of a table of contents and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of such Credit Document.

1.7 Governing Law

          Except as otherwise specifically provided, the Credit Documents shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein.

1.8 Attornment

          The parties hereto irrevocably submit and attorn to the non-exclusive jurisdiction of the courts of the Province of Ontario for all matters arising out of or in connection with this Agreement and the other Credit Documents.

1.9 References

          Except as otherwise specifically provided, reference in any Credit Document to any contract, agreement or any other instrument (including, without limitation, any other Credit Document) shall be deemed to include references to the same as varied, amended, restated, supplemented or replaced from time to time and reference in any Credit Document to any enactment, including without limitation, any statute, law, by-law, regulation, ordinance or order, shall be deemed to include references to such enactment as re-enacted, amended or extended from time to time.

1.10 Currency

          Except as otherwise specifically provided herein, all monetary amounts in this Agreement are stated in Canadian dollars.

1.11 This Agreement to Govern

          If the terms of any other Credit Document or any other agreement delivered pursuant hereto are inconsistent with the terms of this Agreement, the provisions hereof shall prevail to the extent of the inconsistency.

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1.12 Generally Accepted Accounting Principles

          Except as otherwise specifically provided herein, all accounting terms shall be applied and construed in accordance with GAAP.

1.13 Determination of Amount of Loans

          For the purpose of determining the amount of Loans or any Loan at any time, there, shall be deemed to be outstanding and advanced in addition to amounts outstanding and directly advanced, without duplication and without affecting other provisions hereof regarding the basis for the calculation of interest or fees, (i) the face amount of all Bankers’ Acceptances then outstanding, and (ii) the maximum amount of all contingent liabilities of the Lender pursuant to Letters of Credit then outstanding. Where any amount denominated in U.S. dollars is or is deemed to be outstanding, the applicable rate of exchange for purposes of calculating the total Canadian dollar amount of the Loans or any Loan at any time shall be the then most recently available Conversion Rate.

1.14 Computation of Time Periods

          Except as otherwise specifically provided herein, in the computation of a period 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”.

1.15 Actions on Days Other Than Banking Days

          Except as otherwise specifically provided herein, where any payment is required to be made or any other action is required to be taken on a particular day and such day is not a Banking Day and, as a result, such payment cannot be made or action cannot be taken on such day, then this Agreement shall be deemed to provide that such payment shall be made or such action shall be taken on the first Banking Day after such day; provided that, with respect to payments of principal, if such deferral would cause such payment to be made or such action to be taken in the following calendar month, such payment shall be made or such action shall be taken on the next preceding Banking Day and interest and fees shall be calculated accordingly. If the payment of any amount is deferred for any period under this section, then such period shall, unless otherwise provided herein, be included for purposes of the computation of any interest or fees payable hereunder.

1.16 Oral Instructions

          Notwithstanding any other provision herein regarding the delivery of notices, including Borrowing Notices, by the Borrower, the Lender shall in its sole discretion be entitled to act upon the oral instructions of the Borrower, or any Person reasonably believed by it to be a Person authorized by the Borrower to give instructions, regarding any request for an Advance, Rollover, Conversion, completion and issuance of Bankers’ Acceptances or issuance of Letters of Credit. All such oral instructions shall be at the risk of the Borrower and must be confirmed in writing by the Borrower on the same Banking Day as the oral instruction is given. The Lender shall not be responsible for any error or omission in such instructions or in the performance thereof except in the case of its own gross negligence, willful misconduct, fraud or illegal act.

1.17 Incorporation of Schedules

          The schedules annexed to this Agreement shall, for all purposes hereof, form part of this Agreement.

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ARTICLE 2

CREDIT FACILITY

2.1 Establishment of Credit Facility

2.1.1 Subject to the terms and conditions of this Agreement, the Lender hereby establishes a revolving credit facility (the “Credit Facility”) in favour of the Borrower in the amount of the Commitment.

2.1.2 The Credit Facility shall be available, at the option of the Borrower, by way of Advances of: (i) Prime Rate Loans in Canadian dollars; (ii) Base Rate Loans in U.S. dollars; (iii) Bankers’ Acceptance in Canadian dollars; (iv) Libor Loans in U.S. dollars; and (v) Letters of Credit in Canadian dollars or U.S. dollars.

2.1.3 Letters of Credit outstanding under the Credit Facility at any one time may not exceed an aggregate face value of $3,000,000 or the U.S. Dollar Equivalent.

2.1.4 Notwithstanding any other provision of this Agreement, the Lender shall not be obligated to make any Advance to the extent that on any relevant Borrowing Date, after giving effect to any Advance requested, the Canadian Dollar Value of all Loans under the Credit Facility would exceed the Commitment at such time or a mandatory prepayment has been made or is required to be made under item (i) or (ii) of section 3.4.1 of this Agreement.

2.1.5 The Credit Facility is to be used for the general corporate purposes of the Borrower, including, without limitation, acquisitions, but excluding hostile acquisitions, unless the Lender consents (such consent not to be unreasonably withheld).

2.2 Revolving Nature of Credit Facility

          The Borrower may, until the Maturity Date, increase or decrease the Loans under the Credit Facility by requesting and receiving Advances, making repayments and requesting and receiving further Advances up to the Commitment from time to time. The Commitment shall be reduced to nil on the Maturity Date, and the Borrower shall repay to the Lender on the Maturity Date all Obligations then outstanding under the Credit Facility.

2.3 Repayment under Credit Facility

          The Borrower may from time to time (without premium or penalty) on any Banking Day repay to the Lender Loans or portions thereof under the Credit Facility. Loans under the Credit Facility made by way of Bankers’ Acceptance may not be prepaid prior to the Expiry Date of such Bankers’ Acceptance.

2.4 Voluntary Reduction in Commitment

          The Borrower shall have the right at any time and from time to time, by giving at least 3 Banking Days’ notice to the Lender which notice, once given, shall be irrevocable and binding upon the Borrower, to reduce the then applicable Commitment to a lower amount which is not less than the aggregate amount of all Loans then outstanding under the Credit Facility. Such notice shall specify the amount of the reduction, which shall be in an integral multiple of $1,000,000. The amount of any such reduction so made by the Borrower shall be permanent and irrevocable.

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2.5 Advances by Overdraft Availments

          At any time that the Borrower would be entitled to obtain an Advance, the Borrower shall be permitted to incur overdrafts in its Can.$ or U.S.$ concentration accounts (or equivalent) maintained pursuant to a mirror accounting agreement (or equivalent) at the Lender’s branch through which it carries on its day to day banking business by issuing cheques, giving wire transfer instructions or processing pre-authorized debit transactions denominated in Canadian dollars or U.S. dollars under the Credit Facility which shall be drawn on any accounts subject to such mirror accounting agreement (or equivalent). The debit balance from time to time in either such concentration account shall be deemed to be a Prime Rate Loan or a Base Rate Loan, as applicable, outstanding to Borrower from the Lender. Overdraft availments may only be drawn by way of Prime Rate Loans or Base Rate Loans. No notice is required in relation to any overdraft availment and there shall be no minimum amount of drawdown by way of overdraft availment.

ARTICLE 3

GENERAL PROVISIONS RELATING TO THE CREDIT FACILITY

3.1 Advances

3.1.1 Except for overdraft availments provided in accordance with section 2.5 of this Agreement, each request by the Borrower for an Advance under the Credit Facility shall be made by the delivery of a duly completed and executed Borrowing Notice to the Lender at its Branch of Account:

3.1.1.1 in the case of Advances (other than Bankers’ Acceptance, Libor Loans and Letters of Credit) on any proposed Borrowing Date, not later than 4:00 p.m. (Toronto time) one Banking Day prior to the proposed Borrowing Date;

3.1.1.2 in the case of Advances by way of Letters of Credit, not later than 4:00 p.m., (Toronto time) two Banking Days prior to the proposed Borrowing Date;

3.1.1.3 in the case of Advances of Libor Loans, not later than 4:00 p.m. (Toronto time) three London Banking Days prior to the proposed Borrowing Date; and

3.1.1.4 in the case of Advances of Bankers’ Acceptance, not later than 4:00 p.m. (Toronto Time) on the Banking Day prior to the proposed Borrowing Date.

3.1.2 Any Borrowing Notice shall be irrevocable and binding on the Borrower.

3.2 Selection of Interest Periods and BA Periods

          Notwithstanding any other provision hereof:

3.2.1 the Borrower may not select any Interest Period or BA Period in respect of a Loan with a Expiry Date which is later than the Maturity Date; and

3.2.2 the number of Interest Periods and BA Periods in effect at any time shall not exceed 10 in the aggregate.

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3.3 Rollover and Conversion

3.3.1 Subject to the terms and conditions of this Agreement and provided that no declaration has been made by the Lender under section 10.2, the Borrower may from time to time request that a Loan or any portion thereof be rolled over or converted to another form of Loan in accordance with the provisions hereof.

3.3.2 The Borrower shall repay to the Lender the full amount of each Bankers’ Acceptance and Libor Loan on the Expiry Date of the BA Period or Interest Period applicable thereto, in accordance with the provisions hereof governing repayment and prepayment, unless such Loan shall be rolled over or converted to another form of Loan on such Expiry Date in accordance with the provisions hereof.

3.3.3 Each request by the Borrower for a Rollover or Conversion shall be made by the delivery of a duly completed and executed Borrowing Notice to the Lender at the Branch of Account, and the provisions of section 3.1 shall apply to the Rollover or Conversion as if such Rollover or Conversion were an Advance.

3.3.4 Each Rollover or Conversion of a Libor Loan or Bankers’ Acceptance shall be made effective as of the Expiry Date of the Interest Period or BA Period applicable thereto.

3.3.5 If the Borrower does not deliver a Borrowing Notice at or before the time required by section 3.3.3; and

3.3.5.1 in the case of a Bankers’ Acceptance, does not pay to the Lender the Face Amount thereof on the Expiry Date of the relevant BA Period; or

3.3.5.2 in the case of a Libor Loan, does not pay to the Lender the principal amount thereof on the Expiry Date of the relevant Interest Period,

such Loan shall be converted to a Prime Rate Loan (if the maturing Loan is denominated in Canadian dollars) or a Base Rate Loan (if the maturing Loan is denominated in U.S. dollars), and all of the provisions hereof applicable to Prime Rate Loans and Base Rate Loans, as the case may be, shall apply thereto.

3.3.6 A Rollover or Conversion shall not constitute a repayment of the relevant Loan but shall result in a change in the basis of calculation of interest or fees (as the case may be) for such Loan and, where applicable, the Currency of the Loan, in accordance with the provisions hereof.

3.4 Mandatory Prepayments

3.4.1 Subject to section 3.4.2, in addition to any other principal repayments required hereunder, the Borrower shall make the following mandatory prepayments:

(i) if the Borrower or any Subsidiary has provided a Guarantee Obligation to any Person or Persons (other than a Guarantee Obligation to the Lender) which is not limited in amount, or if limited in amount at any time such limit when added to both the total outstanding Debt included in section 1.1.79(b) and the total outstanding Debt otherwise included in section 1.1.79(d) herein exceeds $50,000,000, then the Borrower shall forthwith repay in full all Obligations,

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interest, fees and any other amounts owing to the Lender hereunder at the time of or prior to the issuance of such Guarantee Obligation;

(ii) if the Borrower has provided any Lien on its Intellectual Property in favour of any Person or Persons (other than the Lender) securing an outstanding principal amount exceeding $35,000,000 in the aggregate at any time, then the Borrower shall, within 30 days of the incurrence of such Lien, repay in full all Obligations due, interest, fees and any other amounts owing to the Lender at such time; provided that the Borrower shall not be obliged to prepay the Obligations pursuant to this clause (ii) if the amount so secured is reduced below $35,000,000 within 30 days of request by the Lender;

(iii) Within 10 Business Days after any Disposition by the Borrower of Assets where the value of such Assets Disposed of exceeds $10,000,000 or the value of all Assets Disposed of in any Fiscal Year by the Borrower exceeds $10,000,000, an amount equal to the amount by which the Net Proceeds of such Disposition together with the Net Proceeds of all prior Dispositions made in such Fiscal Year, exceeds $10,000,000 shall to the extent there are Obligations outstanding as that time be paid by the Borrower to the Lender and shall be applied in repayment of outstanding Advances under the Credit Facility; provided that the Borrower shall not be required to make such payment to the Lender in accordance with this section 3.4.1(iii) in the case of:

(A)	Dispositions of inventory in the normal course of its Business;
(B)	a Disposition of capital assets for fair market value in accordance with customary trade terms where it intends to (and does) purchase replacement Assets with an amount at least equal to the Net Proceeds within 180 days of the Disposition of the Assets, inclusive of all bona fide reasonable direct transaction fees, cost, sales taxes and commissions incurred by the Borrower. Any such replacement Assets so purchased must be subject to the Security and otherwise be in compliance with all of the terms contained herein. If it is not the intention of the Borrower to purchase replacement Assets within such 180 day time period or such replacement property is not purchased, the amount of such Net Proceeds not intended to be so used shall be paid to the Lender to the extent otherwise as provided herein;
(C)	so long as an Event of Default has not occurred and is not continuing at the time of such Dispositions, (A) the Disposition of the Capital Stock of CNG Distribution Limited, (B) the Disposition of the Borrower’s surplus lands located in Oakville and Montreal and described in Schedule 3.4.1(iii) and (C) the Borrower’s lands and facilities located in Surrey; and
(D)	so long as an Event of Default has not occurred and is not continuing at the time of such Dispositions, Dispositions of any Assets, that are tangible personal property that are obsolete, redundant or no longer used or useful in the Business Disposed of in the ordinary course of business, for fair market value (other

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than obsolete Assets), subject to the value of such property Disposed of in any Fiscal Year not exceeding $10,000,000;

Dispositions made in accordance with items (A), (B) and (C) above shall not constitute Dispositions for the purposes of this Section 3.4(iii); and

(iv) If the Borrower receives proceeds of insurance compensating for any loss or damage to Assets in an amount up to $10,000,000, the Borrower may retain such proceeds. If the Borrower receives proceeds of insurance in an amount greater than $10,000,000 for any individual incident or in the aggregate for any Fiscal Year compensating for any loss or damage to Assets, the Borrower may retain such excess proceeds provided that the Borrower replaces, repairs or rebuilds the asset to which such proceeds relate within 180 days. Following such 180 day period, or to the extent the amount of such excess proceeds is not so spent to replace, repair or rebuild such assets, the excess shall be promptly paid to the Lender to the extent that there are Obligations outstanding at such time and shall be applied by the Lender against the Obligations. If the Borrower receives proceeds of insurance in the aggregate in a Fiscal Year in excess of $20,000,000, the Lender shall, in its sole discretion, determine whether the proceeds in excess of $20,000,000 shall be applied against outstanding Obligations or be returned to the Borrower to be used to replace, repair or rebuild assets within the time period prescribed by the Lender. Notwithstanding anything contained herein, the Borrower shall not be entitled to any proceeds of insurance until all the Obligations and the obligations of the Borrower under the Hedging Arrangements have been paid in full and the Lender has no further obligations under the Credit Documents or the Hedging Arrangements (including, but not limited to, any obligation or commitment to make further Advances) if an Event of Default has occurred and is continuing.

3.4.2 Any prepayment to the Lender pursuant to section 3.4.1 (i) or (ii), shall result in full and permanent reduction of the Commitment. If immediately following a Disposition described in Section 3.4.1(iii) or the receipt of insurance proceeds described in Section 3.4.1 (iv) the Borrower’s Tangible Net Worth calculated on a pro forma basis based on the last quarterly Compliance Certificate is less than $150,000,000, the Commitment shall be permanently reduced by an amount equal to any prepayment required pursuant to either such Sections or, if greater, by an amount which would have been required to be prepaid but for the amount of the outstanding Obligations.

3.4.3 For the purposes of this Section 3.4, “Net Proceeds” means the gross proceeds in cash including any cash received by way of deferred payment pursuant to a note receivable or other non-cash consideration, but only as and when such cash is received on such note receivable or other non-cash consideration, received by the Borrower on Disposition of any Assets less all (i) costs of disposal, including legal, accounting, and investment banking fees and brokerage and sales commissions, (ii) any relocation expense incurred as a result thereof, (iii) all Taxes (to the extent such Taxes will actually be paid in cash (after applying any available tax credits, loss carryforwards or deductions and any tax sharing agreements) during or in respect of the Fiscal Year in which such disposal took place) paid or estimated to be paid in respect of such Disposition and (iv) the amount of any Debt (excluding Obligations) secured by a Permitted Encumbrance described in paragraph (x) of the definition Permitted Encumbrances which is paid or required to be paid under the agreement governing the repayment of such Debt by reason of such Disposition.

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3.5 Mandatory Repayment for Currency Excess

          If and each time the Lender determines (which determination shall be conclusive and bind the Borrower, absent manifest error) that the Canadian Dollar Value of all Loans under the Credit Facility exceeds the Commitment by more than two percent (2%) by reason of fluctuations in exchange rates, the Lender may request (or shall request if such excess is more than five percent (5%) of the Commitments) the Borrower to repay the entire excess above the Commitment (the “Excess Borrowing”) and the Borrower shall, on the next Banking Day, pay the amount of the Excess Borrowing to the Lender, for application against such of the Loans outstanding as shall be specified by the Borrower or, in the absence of such specification, by the Lender.

3.6 Payments Generally

          All payments in respect of the Credit Facility (in respect of principal, interest, fees or otherwise) shall be made by the Borrower to the Lender no later than 12:00 noon (Toronto time) on the maturity date thereof to the account specified therefor by the Lender at its Branch of Account or to such other accounts as may be specified by the Lender to the Borrower from time to time. Any payments received after such time, other than payments on the overdrafts referred to in section 2.5 which shall be made for value in accordance with the operation of account documentation governing such overdraft accounts, shall be considered for all purposes as having been made on the next following Banking Day unless the Lender otherwise agrees in writing. All payments shall be made by way of immediate transfers from accounts of the Borrower with the Lender or other immediately available funds in the same Currency as the Currency of the Obligations to which such payments relate. Any voluntary or mandatory prepayment of a Base Rate Loan, Prime Rate Loan or Libor Loan shall be accompanied by payment of all other amounts due and payable on the date of payment in respect of such principal amount being so paid (including, without limitation, amounts due and owing under section 3.10, if any). All interest accrued on any Prime Rate Loan or Base Rate Loan which is prepaid shall be paid to the Lender on the third Banking Day of the following calendar month. Any voluntary or mandatory prepayment in respect of a Libor Loan or a Loan made by Bankers’ Acceptance shall be accompanied by all interest accrued thereon (in the case of Libor Loans) and made on the Expiry Date applicable thereto.

3.7 Disturbance of Libor Market

          Notwithstanding any other provision hereof, if at any time prior to the commencement of an Interest Period in respect of any proposed Libor Loan, the Lender determines in good faith (which determination shall be conclusive and binding), that with respect to such Libor Loan:

3.7.1 Libor will not adequately and fairly reflect the cost to the Lender of funding such Libor Loan for the relevant Interest Period, or

3.7.2 deposits in U.S. dollars are not available to the Lender in the London interbank market in sufficient amounts in the ordinary course of business, or

3.7.3 by reason of circumstances affecting the London interbank market, adequate and fair means do not exist for ascertaining Libor for the relevant Interest Period;

then the Lender shall forthwith give notice of such determination to the Borrower, and from and after the date of commencement of such Interest Period and for so long as such conditions shall continue to exist, the Borrower shall not have the right to obtain such Libor Loan from the Lender, and the Borrowing Notice received by the Lender in respect of such Libor Loan shall be deemed to be a request of the Borrower for a Base Rate Loan.

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3.8 Change in Circumstances

          If subsequent to the date hereof, the introduction of or any change in any Applicable Law relating to the Lender, or any change in the interpretation or application thereof by any Governmental Body or compliance by the Lender with any request or direction of any Governmental Body given after the date hereof:

3.8.1 subjects the Lender to, or causes the withdrawal or termination of a previously granted exemption with respect to, any Taxes or changes the basis of taxation of payments due to the Lender or increases any existing Taxes on payments of the Obligations (in each case other than Excluded Taxes);

3.8.2 imposes, modifies or deems applicable any reserve, liquidity, cash margin, capital, special deposit, deposit insurance or assessment, or any other regulatory or similar requirement against assets held by, or deposits in or for the account of, or loans by, or any other acquisition of funds for loans by, the Lender;

3.8.3 imposes any Taxes on reserves or deemed reserves in respect of the undrawn portion of the Lender’s Rateable Portion of either Credit Facility;

3.8.4 imposes on the Lender or requires there to be maintained by the Lender any capital adequacy or additional capital requirement (including, without limitation, a requirement which affects the Lender’s allocation of capital resources to its obligations) in respect of the Lender’s obligations hereunder or imposes any other condition or requirement with respect to the maintenance by the Lender of a contingent liability with respect to any Bankers’ Acceptance issued by it hereunder; or

3.8.5 imposes on the Lender any other condition or requirement with respect to this Agreement or either of the Credit Facilities (other than Excluded Taxes);

and such occurrence has the effect of:

3.8.6 increasing the cost to the Lender of agreeing to make or making, maintaining or funding the Credit Facility, any Advance, any Loan or any portion thereof;

3.8.7 reducing the amount of the Obligations;

3.8.8 directly or indirectly reducing the effective return to the Lender under this Agreement or on its overall capital as a result of entering into this Agreement or as a result of any of the transactions or obligations contemplated by this Agreement (other than a reduction resulting from any Excluded Taxes); or

3.8.9 except to the extent resulting from compliance with section 347 of the Criminal Code (Canada), causing the Lender to make any payment or to forego any interest, fees or other return on or calculated by reference to any sum received or receivable by the Lender hereunder;

then the Lender shall in each case forthwith advise the Borrower accordingly and the Borrower shall promptly upon demand by the Lender pay or cause to be paid to the Lender such additional amounts as shall be sufficient to fully indemnify the Lender for such additional cost, reduction, payment, foregone interest or other return. A certificate of the Lender documenting the relevant calculations and submitted to the Borrower by the Lender shall be prima facie evidence thereof, absent manifest error. In computing

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any compensation payable by the Borrower under this section 3.8 the Lender shall use reasonable averaging and attribution rules of application. Notwithstanding the foregoing provisions of this section 3.8, the Lender may not claim compensation from the Borrower under this section 3.8 unless the Lender is generally claiming compensation to the same extent from its other customers affected by the relevant occurrence (to the extent it is entitled to do so under its agreements with those customers).

3.9 Illegality

          If the introduction of or change to any present or future Applicable Law, or any change in the interpretation or application thereof by any Governmental Body, shall make it illegal for the Lender to make or maintain any Loan or any relevant portion thereof or to give effect to its obligations in respect of such Loan as contemplated hereby, the Lender may, by notice to the Borrower, declare that its obligations hereunder in respect of such Loan shall be terminated, and thereupon the Borrower shall, subject to the last sentence of this section, prepay to the Lender forthwith (or at the end of such period to which the Lender shall in its discretion have agreed) all of the Obligations to the Lender in respect of such Loan including all amounts payable in connection with such prepayment pursuant to section 3.10. The Commitment shall be correspondingly permanently reduced by the amount and at the time of any prepayments so required to be made. If there are any types of Loans hereunder that are not so affected, the Borrower may convert the Loans which are affected into one of the types of Loans that are not affected.

3.10 Indemnities

3.10.1 The Borrower shall indemnify the Lender for all losses (excluding lost profits), costs, expenses, damages and liabilities (including, without limitation, any loss, cost, expense, damage or liability sustained by the Lender in connection with the liquidation or re-employment in whole or in part of deposits or funds borrowed or acquired by it to make any Loan, but excluding any costs, expenses, damages or liabilities attributable to the gross negligence, wilful misconduct, fraud or illegal act of the Lender), which the Lender may sustain or incur: (i) in connection with the use of the proceeds of the Credit Facility; (ii) if for any reason an Advance by way of LIBOR loan is not obtained on the date specified therefor in any Borrowing Notice, (iii) if the Borrower fails to give any notice required to be given by it hereunder, in the manner and at the time specified herein, (iv) if for any reason any payment of any Libor Loan or Bankers’ Acceptance, or any portion thereof, occurs on a date which is not a Expiry Date in respect thereof, (v) with respect to any Bankers’ Acceptance dealt with by the Lender in accordance with the provisions hereof, or (vi) as a consequence of any other default by the Borrower to repay any Obligations when required by the terms of this Agreement. A certificate of the Lender setting forth the amounts necessary to indemnify the Lender in respect of such losses, costs, expenses, damages or liabilities shall be prima facie evidence, in the absence of manifest error, of the amounts owing under this section 3.10. The Borrower shall pay the Lender the amount shown on such certificate within ten Banking Days of receipt thereof.

3.10.2 Without limiting the generality of the indemnity set out in section 3.10.1, the Borrower hereby further agrees to indemnify, exonerate and hold the Lender free and harmless from and against any and all claims, demands, actions, causes of action, suits, losses, costs, charges, liabilities and damages, and expenses in connection therewith, including, without limitation, reasonable legal fees and reasonable out of pocket disbursements, and amounts paid in settlement of any and every kind whatsoever paid, incurred or suffered by, or asserted against, the Lender for, with respect to, or as a direct or indirect result of, (i) the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission or release from, any real property legally or beneficially owned (or any estate or interest which is owned), leased, used, operated, managed or controlled by the Borrower or any Subsidiary of any hazardous substance or (ii) the breach or

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violation of any Environmental Laws by the Borrower or any Subsidiary regardless of whether caused by, or within the control of, the Borrower or any Subsidiary, except for any such liabilities which a court of competent jurisdiction determined arose on account of the Lender’s gross negligence, wilful misconduct, fraud or illegal act.

3.11 Evidence of Indebtedness

          The Lender shall maintain and keep, at its Branch of Account, accounts showing the amount of all Loans advanced by the Lender, from time to time and the dates thereof and the interest, fees and other charges accrued thereon or applicable thereto from time to time, and all payments of principal (including prepayments), interest and fees and other payments made by the Borrower to the Lender from time to time under the Credit Facility. Such accounts maintained by the Lender shall, at all times and for all purposes, constitute prima facie evidence, in the absence of manifest error, of the matters recorded therein.

ARTICLE 4

BANKERS’ ACCEPTANCES

4.1 Procedure for Drawing

          Each Advance by way of Bankers’ Acceptance shall be made pursuant to a Borrowing Notice given by the Borrower to the Lender not later than 4:00 p.m. (Toronto time), on the Banking Day prior to the date of the proposed Advance. Each Borrowing Notice shall be in substantially the form of Schedule 1.1.20.

4.2 Form of Bankers’ Acceptance

4.2.1 Each Bankers’ Acceptance shall (i) be in an aggregate Face Amount of not less than $500,000, (ii) be in an integral multiple of $100,000; (ii) be dated the date of the Borrowing Date; (iii) mature (in common with all other Bankers’ Acceptances included in such Advance) one, two, three, six or twelve months after the Borrowing Date or such other period of time as the Borrower may request and the Lender may, in its sole discretion, agree to; and (iv) be in a form approved by the Lender.

4.2.2 No Bankers’ Acceptance will be accepted by the Lender if the Face Amount of such Bankers’ Acceptance, when aggregated with the Face Amount of any other Bankers’ Acceptances and all other Advances outstanding under the Credit Facility, would exceed the Commitment at the time of issuance thereof.

4.2.3 In order to facilitate the issuance of Bankers’ Acceptances pursuant to this Agreement, the Borrower hereby authorizes the Lender to complete, sign and endorse drafts on its behalf in handwritten form or by facsimile or mechanical signature or otherwise and, once so completed, signed and endorsed, to accept them as Bankers’ Acceptances under this Agreement and then purchase, discount or negotiate them in accordance with the provisions of this Article 4. Drafts so completed, signed, endorsed and negotiated on behalf of the Borrower by the Lender shall bind the Borrower as fully and effectively as if those acts were performed by an authorized officer of the Borrower. Each draft completed, signed or endorsed by the Lender shall mature on the last day of the period selected by the Borrower with respect thereto.

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4.3 Degree of Care

          Any executed drafts to be used for Bankers’ Acceptances which are held by the Lender need only be held in safekeeping with the same degree of care as if they were the Lender’s own property and the Lender was keeping them at the place at which they are to be held. The Borrower shall, by written notice to the Lender, designate the Persons authorized to give the Lender instructions regarding the manner in which the drafts are to be completed and the times at which they are to be issued. Subject to the first sentence of this section 4.3, the Lender and its directors, officers, employees or representatives shall not be liable for any action taken or omitted to be taken by it under this Article except for its own negligence or willful misconduct.

4.4 Advance of Bankers’ Acceptances

          Upon the timely fulfillment of all applicable conditions as set forth in this Agreement, the Lender shall deposit to the Borrower’s Account on each Borrowing Date for Bankers’ Acceptances immediately available Canadian Dollars in an aggregate amount equal to the Bankers’ Acceptance Proceeds of all Bankers’ Acceptances accepted by it on such Borrowing Date (which for greater clarity, shall be net of the applicable Bankers’ Acceptance Fee in respect of such Bankers’ Acceptances).

4.5 Payment at Maturity

4.5.1 The Borrower shall pay to the Lender and there shall become due and payable at 12:00 noon (Toronto time) on the maturity date for each Bankers’ Acceptance, an amount in Canadian Dollars in same day funds equal to the Face Amount of such Bankers’ Acceptance (notwithstanding that the Lender may be the holder thereof at maturity), unless such Bankers’ Acceptances shall be rolled over or converted to another form of Loan in accordance with the provisions hereof. The Borrower’s payment in accordance with this section 4.5 shall satisfy the Borrower’s obligations under any Bankers’ Acceptance to which it relates.

4.5.2 If the Borrower shall fail to make a payment pursuant to section 4.5 in respect of any Bankers’ Acceptance, the Borrower shall be deemed to have issued a Borrowing Notice requesting a Prime Rate Loan to be made on the related Expiry Date for an amount equivalent to the unpaid amount due and payable in respect of such Bankers’ Acceptance.

4.5.3 Except as required by Article 10 or section 3.4.1, no repayment of a Bankers’ Acceptance shall be made by the Borrower to the Lender prior to the Expiry Date thereof.

4.6 Circumstances Making Bankers’ Acceptances Unavailable

          If the Lender determines in good faith and notifies the Borrower that by reason of circumstances affecting the money market in Canada (i) there is no market for Bankers’ Acceptances; or (ii) the demand for Bankers’ Acceptances is insufficient to allow the Lender to sell or trade the Bankers’ Acceptances created and purchased by them, then, (x) the right of the Borrower to request an Advance by Bankers’ Acceptance shall be suspended until the Lender determines that the circumstances causing such suspension no longer exist; and (y) any Borrowing Notice for a Banker’s Acceptance which is outstanding shall be deemed to be a Borrowing Notice for a Prime Rate Loan.

4.7 Waiver

          The Borrower shall not claim from the Lender any days of grace for the payment at maturity of any Bankers’ Acceptances presented and accepted by the Lender pursuant to this Agreement.

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The Borrower waives any defence to payment which might otherwise exist if for any reason a Bankers’ Acceptance shall be held by the Lender in its own right at the maturity thereof, and the doctrine of merger shall not apply to any Bankers’ Acceptance that is at any time held by the Lender in its own right.

4.8 Obligations Absolute

          The obligations of the Borrower with respect to Bankers’ Acceptances under this Agreement shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following circumstances:

4.8.1 any lack of validity or enforceability of any draft accepted by the Lender as a Bankers’ Acceptance; or

4.8.2 the existence of any claim, set-off, defence or other right which the Borrower may have at any time against the holder of a Bankers’ Acceptance, the Lender or any other Person or entity, whether in connection with this Agreement or otherwise.

ARTICLE 5

LETTERS OF CREDIT

5.1 Procedures Relating to Letters of Credit

5.1.1 Notwithstanding any other provision hereof, the Borrower may not request the issuance of any Letter of Credit having a term which would extend beyond the Maturity Date, (unless otherwise specifically agreed to by the Lender in writing) having a term in excess of one year or which would result in the Letters of Credit outstanding under the Credit Facility exceeding an aggregate face value of $3,000,000 or the U.S. Dollar Equivalent.

5.2 Reimbursement

5.2.1 The Borrower unconditionally and irrevocably authorizes the Lender to pay the amount of any demand made on the Lender under and in accordance with the terms of any Letter of Credit on demand without requiring proof of the Borrower’s agreement that the amount so demanded was due and notwithstanding that the Borrower may dispute the validity of any such demand or payment.

5.2.2 The Borrower shall reimburse the Lender on demand for any amounts paid by it from time to time as contemplated by section 5.2.1 and, without limiting the foregoing, the Borrower shall indemnify and save the Lender harmless on demand from and against any and all other losses (other than lost profits), costs, damages, expenses, claims, demands or liabilities which it may suffer or incur arising in any manner whatsoever in connection with the making of any such payments as contemplated by section 5.2.1 (including, without limitation, in connection with proceedings to restrain the Lender from making, or to compel the Lender to make, any such payment).

5.3 Lender Not Liable

5.3.1 The Lender shall not have any responsibility or liability for, or duty to inquire into, the authorization, execution, signature, endorsement, correctness, genuineness or legal effect of any certificate or other document presented to the Lender pursuant to any Letter of Credit, and the

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Borrower fully and unconditionally assumes all risks with respect to the same and, without limiting the generality of the foregoing, all risks of the acts or omissions of any beneficiary of any Letter of Credit with respect to the use by any beneficiary of any Letter of Credit. The Lender shall not be responsible:

5.3.1.1 for the validity of certificates or other documents delivered under or in connection with any Letter of Credit that appear on their face to be in order, even if such certificates or other documents should in fact prove to be invalid, fraudulent or forged;

5.3.1.2 for errors, omissions, interruptions or delays in transmission or delivery of any messages by mail, cable, telegraph, telefax or otherwise, whether or not they are in code;

5.3.1.3 for errors in translation or for errors in interpretation of technical terms or for errors in the calculation of amounts demanded under any Letter of Credit;

5.3.1.4 for any failure or inability of the Lender or any other Person to make payment under any Letter of Credit as a result of any Applicable Law or by reason of any control or restriction rightfully or wrongfully exercised by any Person asserting or exercising governmental or paramount powers; or

5.3.1.5 for any other consequences arising in respect of a failure by the Lender to honour a Letter of Credit due to causes beyond the control of the Lender,

and none of the above shall affect or impair any of the rights or powers of the Lender hereunder or the obligations of the Borrower under section 5.2.2. In furtherance and not in limitation of the foregoing provisions, it is agreed that any payment made by the Lender in good faith under and in accordance with the terms of a Letter of Credit shall be binding upon the Borrower and shall not result in any liability of the Lender to the Borrower and shall not lessen the obligations of the Borrower under section 5.2.2.

5.3.2 Notwithstanding the provisions of this section 5.3, the Borrower shall not be responsible for, and the Lender shall not be relieved of responsibility for, any willful misconduct, gross negligence, fraud or illegal act of or by the Lender.

5.4 Letter of Credit Fees

5.4.1 The Borrower shall pay the Letter of Credit Fee to the Lender quarterly in arrears on each Letter of Credit, such fee to be calculated on the average daily undrawn balance of the Letter of Credit. Such Letter of Credit Fee shall be payable in the Currency in which the applicable Letter of Credit is denominated.

5.5 Acceleration

          Upon the Lender making a declaration under section 10.2 or reduction of the Commitment pursuant to section 3.4, the Borrower shall deposit with the Lender an amount equal to the maximum amount of the contingent liability of the Lender under each Letter of Credit which is then outstanding notwithstanding that the Lender has not at such date been required to make payment under any such Letter of Credit. If the undrawn Commitment is reduced below the aggregate stated amount of all Letters of Credit which are then outstanding, the Borrower shall deposit with the Lender an amount equal to the excess of the latter aggregate amount over the amount of the undrawn Commitment. Any

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such amount deposited with the Lender shall be held by the Lender in a separate interest-bearing collateral account in the name of the Borrower as security for the repayment of future indebtedness of the Borrower to the Lender in respect of Letters of Credit which are drawn down, and, pending the expiry of all outstanding Letters of Credit, any amounts deposited with the Lender shall bear interest at the rate established by the Lender from time to time as that payable in respect of 30 day certificates of deposit of the Lender for monies of like amount and the Borrower will execute an assignment of credit balances (or equivalent) or “control agreements” as required by the Lender and in form and substance reasonably acceptable by the Lender regarding such deposits. Upon the expiry of each such Letter of Credit the Lender shall promptly release and pay over to the Borrower an amount equal to any undrawn amount of such Letter of Credit, together with all accrued interest earned on the deposit of the amount of such Letter of Credit referred to above.

5.6 Conflict

          Each Letter of Credit shall be subject to the Lender’s customary letter of credit terms and procedures from time to time in effect and shall be in a form acceptable to the Lender. The Borrower shall execute and deliver such standard form applications, agreements, indemnities and other assurances as the Lender may reasonably require from time to time with respect to Letters of Credit. A Letter of Credit shall in no event contain provisions requiring the Lender to satisfy itself, prior to payment thereunder, as to any conditions for a drawing thereunder other than the presentation of prescribed documents. If the provisions set forth in the Lender’s customary letter of credit terms and procedures are beyond or inconsistent with those set forth herein, the provisions of this Agreement in respect thereof shall prevail.

ARTICLE 6

INTEREST AND FEES

6.1 Interest Rates

6.1.1 Prime Rate Loans shall bear interest at the Prime Rate plus the Applicable Margin.

6.1.2 Base Rate Loans shall bear interest at the Base Rate plus the Applicable Margin.

6.1.3 Libor Loans shall bear interest at Libor plus the Applicable Margin.

6.2 Calculation and Payment of Interest

6.2.1 Interest on Prime Rate Loans shall accrue from day to day, both before and after default, demand, maturity and judgment, shall be calculated on the basis of the actual number of days elapsed and on the basis of a year of 365 or 366 days, as the case may be, and shall accrue and be payable to the Lender in Canadian dollars monthly in arrears on the third Banking Day of the following calendar month. For greater certainty, where the rate applicable to a Prime Rate Loan is changed, interest shall be charged for the day on which such change is effective on the basis of the new rate.

6.2.2 Interest on Base Rate Loans shall accrue from day to day, both before and after default, demand, maturity and judgment, shall be calculated on the basis of the actual number of days elapsed and on the basis of a year of 365 or 366 days, as the case may be, and shall accrue and be payable to the Lender in U.S. dollars monthly in arrears on the third Banking Day of the following calendar month. For greater certainty, where the rate applicable to a Base Rate Loan is changed, interest shall be charged for the day on which such change is effective on the basis of the new rate.

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6.2.3 Interest on Libor Loans shall accrue from day to day, both before and after default, demand, maturity and judgment, shall be calculated on the basis of the actual number of days elapsed and on the basis of a year of 360 days, and shall accrue and be payable to the Lender in U.S. dollars in arrears on the last day of the relevant Interest Period.

6.3 Commitment Fee

          Commencing upon execution of this Agreement, the Borrower shall pay to the Lender on the third Banking Day following the end of each Fiscal Quarter, in arrears, a commitment fee equal to 75 basis points per annum calculated daily (and based on a year of 365 days) on the amount of the Commitment on each day in such quarter.

6.4 Upfront Fee

          The Borrower shall pay to the Lender fees of $100,000 on the Closing Date and $150,000 on January 2, 2010 .

6.5 Payment of Costs and Expenses

          Whether or not the Borrower takes advantage of the Credit Facility, the Borrower shall pay the following costs and expenses:

6.5.1 on closing, all reasonable invoiced costs and out-of-pocket expenses of the Lender in connection with the preparation, negotiation, execution and delivery of the Credit Documents, any actual or proposed amendment or modification thereto or any waiver thereunder and all instruments supplemental or ancillary thereto;

6.5.2 promptly following request therefor, all reasonable invoiced costs and out-of-pocket expenses of the Lender in connection with obtaining advice as to the rights and responsibilities of the Lender under the Credit Documents; and

6.5.3 promptly following request therefor, all reasonable invoiced costs and out-of-pocket expenses of the Lender in connection with the defence, establishment, protection or enforcement of any of the rights or remedies of the Lender under any of the Credit Documents including, without limitation, all reasonable costs and expenses of establishing the validity and enforceability of, or of collection of amounts owing under, any of the Credit Documents;

including, without limitation, all of the reasonable fees, expenses and disbursements of counsel on a solicitor and client basis incurred in connection therewith, and including all sales or value-added taxes payable (whether refundable or not) on all such fees, expenses and disbursements.

6.6 Interest on Overdue Amounts

6.6.1 If any Obligations are not paid when due, whether in respect of principal, interest, fees, expenses or otherwise, both before and after judgment, such Obligations shall bear interest at a rate per annum determined on a daily basis that is equal to the Prime Rate (in the case of amounts denominated in Canadian dollars) or the Base Rate (in the case of amounts denominated in U.S. dollars) plus (in each case) the Applicable Margin, in each case calculated on the basis of the actual number of days elapsed in a year of 365 days. Such interest shall accrue from day to day, be payable in arrears on demand and shall be compounded monthly on the last Banking Day of each calendar month.

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6.6.2 In addition to the interest described in section 6.6.1, if any Obligations are not paid when due, whether in respect of principal, interest, fees, expenses or otherwise, both before and after judgment, such Obligations shall bear additional interest at 2% per annum calculated on the basis of the actual number of days elapsed in a year of 365 days. Such interest shall accrue from day to day, be payable in arrears on demand and shall be compounded monthly on the last Banking Day of each calendar month.

ARTICLE 7

REPRESENTATIONS AND WARRANTIES

7.1 Representations and Warranties

          The Borrower represents and warrants to the Lender, acknowledging and confirming that the Lender is relying thereon without independent inquiry in entering into this Agreement, that:

7.1.1 Incorporation and Qualification. Each of the Borrower and the Parent and each Material Subsidiary that has provided any Security is a corporation, limited liability company, limited partnership or partnership duly organized, validity existing and in good standing under the laws of the jurisdiction where it is organized and except where the failure to do so would not reasonably be expected to have a Material Adverse Effect each other jurisdiction where it has property or Assets or carries on business. Each of the Borrower and each Material Subsidiary that has provided any Security has the corporate power and authority to carry on its business, own property, borrow monies and enter into agreements therefor, execute and deliver the Credit Documents to which it is a party and observe and perform the terms and provisions thereof.

7.1.2 Conflict With Other Instruments. The execution and delivery by the Borrower and each Material Subsidiary (that has provided any Security) of the Credit Documents to which it is a party and the performance by the Borrower and each such Material Subsidiary of its obligations thereunder and compliance with the terms, conditions and provisions thereof, will not (i) conflict with or result in a breach of any of the terms, conditions or provisions of (a) the Borrower’s or such Material Subsidiary’s constating documents or by-laws, (b) any applicable law, rule or regulation having the force of law in any way that would be material to the rights or interests of the Lender, (c) any material contractual restriction binding on or affecting the Borrower or such Material Subsidiary or the Borrower’s or such Material Subsidiary’s material properties including for greater certainty that none of the Credit Documents results or will result in a breach of the Senior Credit Agreement; or (d) any judgment, injunction, determination or award which is binding on it and which would materially effect its material Assets or Business; or (ii) result in, require or permit the imposition of any Lien (other than Permitted Encumbrances) or Guarantee Obligation, in, on or with respect to the assets now owned or hereafter acquired by it.

7.1.3 Authorization, Governmental Approvals, etc. The execution and delivery by the Borrower and each Material Subsidiary (that has provided any Security) of each of the Credit Documents to which it is a party and the performance by the Borrower and each such Material Subsidiary of its respective obligations thereunder have been duly authorized by all necessary corporate action and no consent, approval, authorization, under any applicable law or otherwise, and no registration, qualification, designation, declaration or filing with any Governmental Body or otherwise (except for registrations or filings which may be required in respect of the Security Documents), is or was necessary therefor or to perfect the same and to consummate the transactions contemplated in the Credit Documents, except as may become necessary subsequent to the date hereof.

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7.1.4 Execution and Binding Obligation. This Agreement and the other Credit Documents have been duly executed and delivered by the Borrower and each Material Subsidiary (that has provided any Security) party thereto and constitute legal, valid and binding obligations of the Borrower and each such Material Subsidiary, enforceable against it in accordance with their respective terms, subject only to any limitation under applicable laws relating to (i) bankruptcy, insolvency, reorganization, moratorium or creditors’ rights generally; and (ii) the discretion that a court may exercise in the granting of equitable remedies.

7.1.5 Authorizations, etc. The Borrower and each Material Subsidiary that has provided any Security possesses all Material Authorizations, and all such Material Authorizations are in full force and effect.

7.1.6 Ownership of Assets. Each of the Borrower and each Subsidiary owns its Assets with good (and, with respect to any real property, freehold or leasehold marketable) title thereto, free and clear of all Liens, except for Permitted Encumbrances and title defects that would not reasonably be expected to result in a Material Adverse Effect.

7.1.7 Compliance with Laws. Subject to the next following sentence, each of the Borrower and each Material Subsidiary that has provided Security is in compliance with all Applicable Laws, including Environmental Laws, non-compliance with which would reasonably be expected to have a Material Adverse Effect. Except as set forth in Schedule 7.1.10 or after the date hereof as disclosed in writing to the Lender and which would not otherwise reasonably be expected to have a Material Adverse Effect, the Business, real properties owned or leased by the Borrower and each Material Subsidiary that has provided Security, and other Assets (i) are in compliance with all Environmental Laws; (ii) possess and are operated in compliance with all Environmental Permits which are required for the operation of the Business, real properties owned or leased by the Borrower or any Subsidiary and any other Assets; and (iii) to the best of its knowledge are not subject to any past or present fact, condition or circumstance that could result in any liability under any Environmental Laws or with respect to any environmental or public or occupational health and safety matters. Except as set forth in Schedule 7.1.10 or after the date hereof as disclosed in writing to the Lender, it is not party nor any Material Subsidiary that has provided Security party to any litigation or administrative proceeding, nor, to its knowledge, is any litigation or administrative proceeding threatened or pending against it, which in either case (i) asserts or alleges that it has violated, contravened, or is otherwise not in compliance with Environmental Laws, (ii) asserts or alleges that it is required to clean up, remove or take remedial or other response action due to the disposal, depositing, discharge, leaking or other release of any hazardous substances or materials, or (iii) asserts or alleges that it is required to pay all or a portion of the cost of any past, present or future such clean up, removal or remedial or other response; in each case which would reasonably be expected to have a Material Adverse Effect.

7.1.8 No Default. There is no Default or Event of Default that has occurred and is continuing.

7.1.9 Subsidiaries, etc. As of the date hereof, the Borrower does not own or hold any shares of, or any other ownership interest in, any Person, except CNG Distributions Limited and the Parent is the indirect owner of all issued and outstanding shares of the Borrower. CNG Distributions Limited is not a Material Subsidiary on the date hereof and except as previously notified to the Lender, the Borrower has no Material Subsidiary.

7.1.10 No Litigation. Except as set out in Schedule 7.1.10 or, after the date hereof, disclosed in writing to the Lender, there are no actions, suits or proceedings pending, taken or, to the Borrower’s knowledge, threatened, before or by any Governmental Body or by any elected or

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appointed public official or private person in Canada or elsewhere, whether or not having the force of law, which would reasonably be expected to have a Material Adverse Effect.

7.1.11 Material Agreements and Material Licences: Neither the Borrower nor any Material Subsidiary, or to the Borrower’s knowledge, any other party to any agreement binding on the Borrower or any Material Subsidiary or any of their respective assets is in default under such agreement, except where such default would not reasonably be expected to have a Material Adverse Effect.

7.1.12 Books and Records. All books and records of the Borrower and the Subsidiaries have been fully, properly and accurately kept and completed in all material respects in accordance with GAAP in effect at the time of preparation of such books and records (to the extent applicable) and there are no material inaccuracies or discrepancies of any kind contained or reflected therein of which the Borrower is aware.

7.1.13 Tax Liability. The Borrower and, to its knowledge, each Material Subsidiary that has provided Security have filed all material tax returns which are required to be filed and has in all material respects paid all taxes, interest and penalties, if any, which have become due pursuant to such returns or pursuant to any assessment received by it, except any such assessment which is being contested in good faith by proper legal proceedings. Without limiting the foregoing all employee source deductions (including income taxes, employment insurance and Canada Pension Plan) payroll taxes and workers’ compensation dues are currently paid and up to date.

7.1.14 Financial Statements. The annual consolidated management prepared financial statements of the Borrower dated as of and for the period ending December 31, 2008 have been prepared in accordance with GAAP, subject to year-end audit adjustments and the absence of notes, and fairly present in all material respects the financial condition of the Borrower and the financial information presented therein for the period and as at the date thereof. To the knowledge of the Borrower, neither the Borrower nor any of its Subsidiaries has on the date hereof any material contingent liabilities, liabilities for taxes, long-term commitments or unrealized or forward anticipated losses from any unfavorable commitments which have not been provided for in said financial statements to the extent required by GAAP. All financial statements delivered to the Lender after the date of this Agreement pursuant to sections 8.1.10 and 8.1.11 will present fairly and in all material respects the financial position of the Borrower on a consolidated basis in accordance with GAAP, subject in the case of unaudited financial statements to year-end audit adjustments and the absence of notes, as of the dates thereof and for the Fiscal Years or Fiscal Quarters, as the case may be, then ended. Since the date of the last financial statements delivered to the Lender, other than has been disclosed in writing to the Lender, there has been no development which has had or would reasonably be expected to have a Material Adverse Effect.

7.1.15 Pension Plans. As of the date hereof, the only pension plans (the “plans”) provided by the Borrower are those listed in Schedule 7.1.15. The plans are registered under, and are in compliance with, the Income Tax Act (Canada), the Pension Benefits Act (Ontario) and all other Applicable Laws and all reports, returns and filings required to be made thereunder have been made, except where the failure to so comply or make a report, return or filing would not reasonably be expected to have a Material Adverse Effect. Those plans have been at all times administered in accordance with their terms and the provisions of all Applicable Laws, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect.

7.1.16 Insurance. As of the date hereof, the Borrower and each of the Material Subsidiaries maintains insurance coverage in compliance with the requirements of section 8.1.17. Schedule

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7.1.16 identifies, either by description of specific policies or by attached certificate summarizing insurance coverages, all existing insurance policies maintained by the Borrower as of the date hereof.

7.1.17 Debt, Guarantee Obligations and Liens. As of the date hereof, (a) the Borrower and each of the Subsidiaries has not issued any Guarantee Obligations except for the guarantee dated April 12, 2006 granted by USG Canadian Mining Ltd. (subsequently amalgamated into the Borrower) in favour of Infinity Rail, LLC, (b) the Assets of the Borrower and its Subsidiaries are not subject to any Liens, except for Permitted Encumbrances and (c) the Borrower and each of its Subsidiaries has no Debt except for Permitted Debt.

7.1.18 Description of Real Assets. Schedule 7.1.18 contains a description as of the date hereof, of (a) all real property owned by the Borrower (including municipal addresses, legal description (to the extent available), the name of the Person which owns such property and a brief description of such property and its use), (b) all real property leased by the Borrower (including municipal addresses, legal description (to the extent available), the name of the Person which leases such property, the name of the landlord, the term and any renewal rights under the applicable lease and a brief description of such property and its use), and (c) all real property not owned or leased by the Borrower at which any of its inventory or other Assets may from time to time be stored or located (including municipal addresses and the name of the bailee, processor or other third party holding such inventory at such property), other than real property at which Assets which have an aggregate market value of less than an amount of $2,000,000 is stored or located.

7.1.19 Relevant Jurisdictions. Schedule 7.1.19 identifies in respect of the Borrower, the Relevant Jurisdictions as of the date hereof including the Borrower’s jurisdiction of formation, jurisdiction in which it has Property with an aggregate market value in excess of $2,000,000, the full address (including postal code or zip code) of the Borrower’s chief executive office and all of the Borrower’s places of business and, if the same is different, the address at which the books and records of the Borrower are located, the address at which senior management of the Borrower are located and conduct their deliberations and make their decisions with respect to the business of the Borrower, and the address from which the invoices and accounts of the Borrower are issued.

7.1.20 Intellectual Property. The Borrower has rights sufficient for it to use all the Intellectual Property reasonably necessary for the conduct of its business; and all patents, trade-marks or industrial designs which have been either registered or in respect of which a registration application has been filed by it as of the date hereof are listed on Schedule 7.1.20. The Borrower is not infringing upon or misappropriating or is alleged to be infringing upon or misappropriating the intellectual property rights of any other Person material to the Business.

7.1.21 Bank Accounts. All of the lock boxes, deposit accounts, investment accounts or other accounts in the name of or used by Borrower maintained at any bank or other financial institution as at the date hereof are set forth on Schedule 7.1.21 and such Schedule correctly identifies the name of each depository, the name in which the lock box or account is held, the type of account, and the complete lock box address or account number therefor.

7.1.22 Compliance with Anti-money Laundering Laws. The Borrower has taken, and agrees that it shall continue to take, reasonable measures appropriate to the circumstances (in any event as required by Applicable Law), to ensure that it is and shall be in compliance with all current and future anti-money laundering laws and applicable laws, regulations and governmental guidance for the prevention of terrorism, terrorist financing and drug trafficking.

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7.2 Survival of Representations and Warranties

          The Borrower covenants that the representations and warranties set out in section 7.1 shall be true and correct on each day that an Advance is made and on the date of each Compliance Certificate with the same effect as if such representations and warranties had been made and given on and as of such day, notwithstanding any investigation made at any time by the Lender or on its behalf; except that (a) if any such representation and warranty is specifically given in respect of a particular date or particular period of time and relates only to such date or period of time, then such representation and warranty shall continue to be given as at such date or for such period of time and (b) to the extent any matter addressed in any such representation and warranty changes in a manner permitted by this Agreement, or compliance therewith is waived by the Lender in accordance with the provisions of this Agreement, such repeated representation and warranty shall be revised to reflect those changes and/or waivers.

ARTICLE 8

COVENANTS

8.1 Affirmative Covenants

          So long as any Obligations remain outstanding (other than those Obligations which by their terms survive termination of this Agreement) or so long as the Borrower has the right to utilize the Credit Facility, and unless the Lender otherwise consents in writing, the Borrower covenants and agrees that:

8.1.1 Punctual Payment. The Borrower shall pay or cause to be paid all Obligations falling due hereunder on the dates and in the manner specified herein.

8.1.2 Conduct of Business. The Borrower shall, and shall cause each Material Subsidiary to, do or cause to be done all things necessary or desirable to maintain its corporate existence in its present jurisdiction of incorporation or amalgamation, to maintain its corporate power and capacity to own its properties and assets, and to carry on its business, including the Business, in a commercially reasonable manner; provided that the foregoing shall not prohibit any merger, amalgamation, consolidation, liquidation or dissolution permitted under any other provision of this Agreement.

8.1.3 Preservation of Material Authorizations. The Borrower shall, and shall cause each Subsidiary to, preserve and maintain all Material Authorizations.

8.1.4 Compliance with Applicable Law and Contracts.

8.1.4.1 The Borrower shall, and shall cause each Subsidiary to, comply and operate all of its facilities and properties in compliance with the requirements of all provisions of Applicable Laws, including Environmental Laws, which, if contravened, would reasonably be expected to have a Material Adverse Effect and all insurance policies and all contracts to which it is a party or by which it or its properties are bound, non-compliance with which would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

8.1.4.2 The Borrower shall and shall ensure that each Subsidiary: (i) keep all material Environmental Permits in full force and effect and remain in compliance in all material

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respects therewith; (ii) as soon as practicable notify the Lender and provide copies upon receipt of all written claims, proceedings, actions, complaints or notices regarding environmental, health or safety matters in any way relating to the Business, real properties owned or leased by the Borrower or a Subsidiary and other Assets, or regarding compliance with Environmental Laws, which claims, proceedings, actions, complaints or notices relate to matters which would reasonably be expected to have a Material Adverse Effect; (iii) proceed diligently to resolve any such claims, proceedings, actions, complaints or notices; (iv) provide such information and certifications which the Lender may reasonably request from time to time to evidence compliance with section 8.1.4.1 or this section 8.1.4.2; and (v) maintain the Borrower’s current environmental, health and safety management system (updated from time to time to reflect changes hereafter adopted by the Borrower) that, among other things, establishes and monitors environmental compliance and health and safety performance goals, outlines responsibilities for environmental, health and safety matters within the Borrower, describes the Borrower’s environmental, health and safety training and awareness programs, contains procedures for responding to spills, environmental, health and safety emergencies and establishes a procedure to evaluate the Borrower’s compliance with this system.

8.1.5 Accounting Methods and Financial Records. The Borrower shall, and shall cause each Subsidiary to, maintain a system of accounting which is established and administered in accordance with GAAP, keep adequate records and books of account in which entries that are accurate and complete in all material respects shall be made in accordance with such accounting principles reflecting all transactions required to be reflected by such accounting principles and keep records of any Assets owned by it that are accurate and complete in all material respects.

8.1.6 Maintenance of Assets. The Borrower shall, and shall cause each Material Subsidiary to, maintain its Assets in good repair, working order and condition (reasonable wear and tear excepted) and from time to time make or cause to be made all necessary and appropriate repairs, renewals, replacements, additions and improvements thereto in accordance with past practices and standards of the Borrower.

8.1.7 Payment of Taxes and Claims. The Borrower shall, and shall cause each Subsidiary to:

8.1.7.1 pay and discharge all lawful claims due and payable for labour, material and supplies which, if unpaid, would reasonably be expected to become a Lien on any of the Assets;

8.1.7.2 pay and discharge all Taxes due and payable by it;

8.1.7.3 withhold and collect all Taxes required to be withheld and collected by it and remit such Taxes to the appropriate Governmental Body at the time and in the manner required; and

8.1.7.4 pay and discharge all obligations incidental to any trust imposed upon it by statute which, if unpaid, would reasonably be expected to become a Lien upon any of the Assets;

except (i) to the extent all such Taxes, obligations and claims do not in the aggregate exceed $1 million at any time and would not reasonably be expected to result in a Material Adverse Effect; or (ii) that no such claim, Taxes (other than Taxes required to be withheld and remitted pursuant to the

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Income Tax Act (Canada) or any provincial income tax legislation) or obligations need be paid, collected or remitted if (i) it is being diligently contested in good faith by appropriate proceedings, (ii) reserves considered adequate by the Borrower and its auditors shall have been set aside therefor on its books, (iii) such claim, Taxes, or obligation shall not have resulted in a Lien other than a Permitted Encumbrance, and (iv) to the extent such proceedings are material to the Business of the Borrower or Subsidiary (A) all enforcement proceedings in respect thereof shall have been stayed and appropriate security shall have been given, if required, to prevent the commencement or continuation of proceedings, or (B) prepayment shall have been made pending settlement or contestation.

8.1.8 Inspections. The Borrower shall, and shall cause each Subsidiary to, permit the Lender, to (i) visit, inspect, and if requested, investigate its properties during normal business hours, but without disrupting normal business operations, (ii) inspect and make extracts from and copies of its books and records, and (iii) discuss with senior management of the Borrower its Business, Assets, and financial condition and prospects. The Borrower shall forthwith reimburse the Lender for its reasonable out-of-pocket expenses incurred in connection with such inspections. Such inspections and discussions will require at least three (3) Business Days’ prior written notice and may not be more frequent than once per year unless an Event of Default has occurred that is continuing or the Lender (acting reasonably) believes a Material Adverse Effect has occurred that is continuing.

8.1.9 Notice of Litigation and Other Matters. The Borrower shall, as soon as practicable after it shall become aware of the same, give notice to the Lender of the following events:

8.1.9.1 the commencement of any action, proceeding, arbitration or investigation against or in any other way relating adversely to the Borrower or any of the Subsidiaries or any of their respective properties, assets or businesses which would, individually or when aggregated with all other such actions, proceedings, arbitrations and investigations, reasonably be expected to have a Material Adverse Effect;

8.1.9.2 any amendment of its articles;

8.1.9.3 any issuance by the Borrower or any Subsidiary of a Guarantee Obligation, or any Lien which is not a Permitted Encumbrance, or any Debt which is not Permitted Debt;

8.1.9.4 any Event of Default (as defined in the Senior Credit Agreement) occurs;

8.1.9.5 any development which has had or would reasonably be expected to have a Material Adverse Effect; and

8.1.9.6 any new Subsidiaries and Material Subsidiaries of the Borrower.

8.1.10 Quarterly Financial Reports. The Borrower shall, as soon as practicable and in any event within 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year, deliver to the Lender, in hard copy or electronic format, management prepared consolidated financial statements of the Borrower, prepared in accordance with GAAP, subject to normal year-end audit adjustments and the absence of notes, and on a consolidated basis, consisting of (w) balance sheets as at the end of the Fiscal Quarter with comparative amounts at the end of the previous Fiscal Year, and (x) statements of operations, stockholders’ equity and cash flows for the period from the end of the previous Fiscal Year to the end of the Fiscal Quarter with comparative amounts for the corresponding period in the previous Fiscal Year.

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8.1.11 Annual Financial Statements. The Borrower shall, as soon as practicable and in any event within 120 days after the end of each Fiscal Year, deliver to the Lender, in hard copy or electronic format, (i) minimum review engagement report (in the case of Fiscal Year 2009 and thereafter) and annual consolidated management prepared financial statements of the Borrower, in each case prepared in accordance with GAAP, as referred to in section 8.1.10 hereof, in respect of such Fiscal Year and (ii) if not publicly available, audited consolidated financial statements of the Parent, prepared in accordance with GAAP as referred to in Section 8.1.10 hereof, in respect of such Fiscal Year.

8.1.12 Compliance Certificates. The Borrower shall deliver or cause to be delivered to the Lender, together with the report and financial statements in sections 8.1.10 and 8.1.11, a Compliance Certificate.

8.1.13 Annual Business Plan. The Borrower shall, as soon as available and in any event not later than 90 days after the end of each Fiscal Year, provide to the Lender, the Annual Business Plan.

8.1.14 Accounts Receivable and Inventory Listings. The Borrower shall, within 30 days of the end of each Fiscal Year, furnish to the Lender aged accounts receivable reports and inventory listings of the Borrower as of the end of the Fiscal Year just ended.

8.1.15 Other Financial Information. As soon as practicable following a request therefor from the Lender, the Borrower shall furnish to the Lender such other financial information and projections as the Lender may reasonably request from time to time.

8.1.16 Use of Proceeds. The Borrower shall use the proceeds of the Credit Facility solely for the purposes permitted by section 2.1.5.

8.1.17 Insurance. The Borrower shall maintain or cause to be maintained, and shall cause its Material Subsidiaries to maintain or cause to be maintained in all material respects, (i) insurance policies, in such form and amounts, with such deductibles and against such risks as are usually carried by prudent owners of similar businesses and properties located in the same general geographical areas, and (ii) such other material insurance as the Borrower or its Material Subsidiaries may be required to maintain by any Applicable Law or any contract by which the Borrower or any Subsidiary is bound. The Borrower will cause the Lender to be indicated as loss payee and mortgagee (with such standard mortgagee clauses as the Lender shall reasonably require for its protection) on all insurance policies on the Assets of the Borrower (other than the vessel Spanish Mist) and each Material Subsidiary providing security (including, without limitation, all property, boiler and machinery and builder’s risk policies) and as an additional insured on all liability policies (other than professional liability) of the Borrower and each Material Subsidiary providing Security. The Borrower will furnish to the Lender, upon reasonable request of the Lender, information in reasonable detail as to the insurance maintained. If the Borrower or any Material Subsidiary shall fail to obtain any insurance as required by this Section 8.1.17 the Lender may obtain such insurance at the Borrower’s expense. By purchasing such insurance, the Lender shall not be deemed to have waived any Default or Event of Default arising from the Borrower’s or such Material Subsidiary’s failure to maintain such insurance.

8.1.18 Security. With respect to the Security, the Borrower will and procure that each Material Subsidiary that has provided Security will:

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(a)	provide to the Lender the Security required from time to time pursuant to Article 11 in accordance with the provisions of such Article, accompanied by supporting resolutions, certificates and opinions in form and substance satisfactory to the Lender acting reasonably; and
(b)	do, execute and deliver all such things, documents, security, agreements and assurances as may from time to time be reasonably requested by the Lender to ensure that the Lender holds at all times valid, enforceable, perfected first priority Liens (subject only to Permitted Encumbrances) from the Borrower meeting the requirements of Article 11.

For the avoidance of doubt, the Borrower shall not be required to deliver a ship mortgage on the vessel Spanish Mist to the Lender.

8.1.19 Additional Security. The Borrower shall ensure that the Assets and revenues subject to the Security at all times constitute at least 80% of the consolidated assets and revenues of the Borrower and all its Subsidiaries (in accordance with GAAP) and shall, to the extent necessary to maintain such minimum ratio, cause one or more of its Subsidiaries (that have not provided Security) to become a guarantor hereunder and deliver to the Lender such general security agreements, security documents, officer’s certificates, additional joinder documents, legal opinions of counsel in connection therewith and such other related or ancillary documents, including evidence of registration, filing or recording of any liens created by such security documents and their first ranking priority (subject to Permitted Encumbrances), as the Lender may reasonably request, in each case, in form and substance satisfactory to the Lender, acting reasonably.

8.1.20 Landlord Consents. Use commercially reasonable efforts to obtain a collateral access agreement from each landlord of premises that are leased at any time and from time to time by the Borrower and at which Assets with an aggregate market value of more than $2,000,000 are located. If inventory of the Borrower with an aggregate market value of more than $2,000,000 is in the possession of a bailee use commercially reasonable efforts to have such bailee execute and deliver to the Lender, a collateral access agreement. If the Borrower after the Closing Date enters into any lease arrangement in respect to a premises where its Assets are or will at any time be held or enters into any bailee arrangement with respect to any of its Assets, the Borrower will deliver to the Lender an executed collateral access agreement concurrently upon entering into such lease or bailee arrangement. For the purposes of this section 8.1.20, a “collateral access agreement” means any landlord waiver or other agreement (as such waiver or agreement may be amended, restated or otherwise modified from time to time), in form and substance reasonably satisfactory to the Lender, pursuant to which a mortgagee or lessor of real property on which Assets are stored or otherwise located, or a bailee, consignee or similar Person with respect to any warehouse, processor or converter facility or other location where Assets are stored or located, (a) acknowledges the Security in respect of such Assets, (b) waives or, in the reasonable discretion of the Lender, subordinates on terms reasonably acceptable to the Lender any Lien or other claim that such Person may assert against such Assets, (c) confirms that such Person does not have title to any such Assets of the Borrower, nor does such Person have any claim to or lien upon such Assets other than for customary storage, shipping and handling charges, (d) agreeing that such Person will not move any of the Assets to a location outside of the facility without first giving the Lender 30 days prior written notice (other than inventory shipped in the normal course of business pursuant to instructions of the Borrower) and not issue warehouse receipts or other documents of title with respect to such Assets without the Lender’s written consent and (e) where applicable, grants to the Lender reasonable access to and use of such real property or facility, as the case may be, following

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the occurrence and during the continuance of an Event of Default, to assemble, complete and sell such Assets.

8.1.21 Financial Covenants. The Borrower shall:

8.1.21.1 Tangible Net Worth. (a) Maintain a Tangible Net Worth of no less than $150,000,000 to be tested at the end of each Fiscal Quarter;

8.1.21.2 Current Ratio. Maintain a Current Ratio of no less than 1.50:1.0 to be tested at the end of each Fiscal Quarter; and

8.1.21.3 Interest Coverage Ratio. Maintain an Interest Coverage Ratio of no less than 2.0:1.0 to be tested at the end of each Fiscal Quarter on a rolling four quarter basis, provided that the requirements of this Section 8.1.21.3 shall not apply as of the end of any Fiscal Quarter as of which, on a consolidated basis for the Borrower and its Subsidiaries, interest income earned exceeds the aggregate amount of Interest Expense on a rolling four quarter basis.

8.2 Negative Covenants

          So long as any Obligations remain outstanding (other than those Obligations which by their terms survive termination of this Agreement) or so long as the Borrower has the right to utilize the Credit Facility, and unless the Lender otherwise consents in writing, the Borrower covenants and agrees that it shall not, and shall not permit any of its Subsidiaries or Material Subsidiaries, as indicated below, to do any of the following:

8.2.1 Limitation on Debt. The Borrower will not, and will not permit any of the Subsidiaries to, create, assume, incur or in any manner become liable in respect of any Debt other than Permitted Debt.

8.2.2 Limitation on Mergers and Consolidations. The Borrower will not, and will not permit any of its Subsidiaries that have granted Security to, wind-up, merge, consolidate or amalgamate, or to carry out a consolidation, reorganization, reconstruction or arrangement, with or into any other Person or permit any other Person to wind-up, merge, consolidate or amalgamate, to be consolidated, or to enter into a reorganization, reconstruction or arrangement with or into it, and the Borrower will not, and will not permit any of its Subsidiaries that have granted Security, to, Dispose all or substantially all of its Assets in a single transaction or series of transactions to any Person, unless either:

(a)

the Borrower is the survivor (or in the case of any such Disposition by such a Subsidiary, the Borrower or another Subsidiary that has granted Security is the acquiror) and the Lender shall be satisfied that it has a continuing perfected security interest in all present and after-acquired property of the survivor Borrower (or in the case of any such Disposition by such Subsidiary, the Assets so Disposed) with the priorities contemplated under this Agreement and the Lender shall have been granted such documentation, in form and substance satisfactory to the Lender, acting reasonably, as may be required to confirm the same; or

(b)

the successor corporation or acquiror is solvent and is organized under the laws of Canada or any province thereof, and

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(i)

in any case involving the Borrower, has executed and delivered to the Lender a written confirmation of its assumption of the due and punctual performance of each covenant and condition on the part of the Borrower contained in this Agreement and any other Credit Documents to which it is party and the Lender being satisfied that the Security shall attach to all present and after-acquired Assets of the successor corporation or acquiror, perfected and with the priority contemplated under this Agreement; or

(ii)

in the case of a Subsidiary which has provided any Credit Document, has executed and delivered to the Lender a written confirmation of such Credit Document on terms and conditions acceptable to the Lender acting reasonably and the Lender being satisfied that the Security shall attach to all present and after-acquired Assets of the successor corporation or acquiror, perfected and with the priority contemplated under this Agreement,

and upon request of the Lender, the Borrower causes to be delivered to the Lender an opinion of the Borrower’s counsel regarding such assumption or Credit Document and Security in form and substance satisfactory to the Lender acting reasonably.

8.2.3 Transactions with Affiliates. The Borrower will not, and will not permit any of the Subsidiaries to, enter into any transaction or arrangement with any other Affiliate of the Borrower or the Parent (including, without limitation, the purchase from, sale to or exchange of assets with, or the rendering of any service by or for, any such Affiliate), other than on terms substantially as favourable to the Borrower or such Subsidiary as would be obtainable in a comparable arm’s length transaction with a Person other than such an Affiliate. Nothing in this Section 0 shall prohibit the creation of any intercorporate Debt between the Borrower or any Subsidiary and any other Affiliates of the Borrower consistent with the Parent’s policies applicable to such Debt and otherwise permitted under this Agreement.

8.2.4 Change in Business. The Borrower will not, and will not permit any Subsidiary to, engage to any material extent in any business other than the Businesses.

8.2.5 Lease-Back. The Borrower will not enter into or permit any of its Subsidiaries to enter into any arrangements, directly or indirectly, with any Person, whereby the Borrower or such Subsidiary, as the case may be, shall sell or transfer any property, whether now owned or hereafter acquired, used or useful in the Business, and then rent or lease the property so sold or transferred for substantially the same purpose or purposes as the property so sold or transferred, provided that so long as section 3.4 (Mandatory Prepayments) is complied with this section 8.2.5 shall not prohibit any such transaction that qualifies under item (x) of the definition of Permitted Encumbrances.

8.2.6 Maintenance and Ownership of Material Subsidiaries. The Borrower will not sell or otherwise dispose of any shares of any of its Material Subsidiaries or permit any of such Material Subsidiaries to issue, sell or otherwise dispose of any of their shares or the shares of any other Material Subsidiary, except to the Borrower or another Material Subsidiary.

8.2.7 Swaps. The Borrower will not enter into any interest rate swap, basis swap, forward transaction, currency hedging or swap transaction, cap transaction, floor transaction, collar transaction or other derivative of hedging transaction, whether with respect to interest rates, currencies, commodities or otherwise, or any option with respect to such a transaction or any combination of any such transactions except for the purpose of paying or hedging its actual or

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anticipated normal business capital expenditures and operating revenues and expenses, hedging its interest rate or currency exposure on its Debt or loan receivables and hedging transactions in the ordinary course of the Business that are not for speculative purposes

8.2.8 Acquisitions. The Borrower will not make any Acquisition in any Fiscal Year, unless the Acquisition (i) is in a business substantially similar to the Business, (ii) based on information provided to the Lender by the Borrower, is demonstrated to the Lender, acting reasonably, to be accretive to the EBITDA of the Borrower on a pro forma basis and (iii) would not result in a Default or Event of Default.

8.2.9 Location of Assets in Other Jurisdictions. Except for Assets in transit to the Borrower or temporarily with repairers or any Assets being delivered to a customer in the ordinary course of business of the Borrower as part of the performance of its obligations, the Borrower will not: (A) locate or store any Assets with a market value (either individually or in the aggregate) of more than $2,000,000 in any single jurisdiction not identified in Schedule 7.1.19 or (B) move any Assets from one jurisdiction to another jurisdiction where the location, storage, acquisition or movement, as the case may be, of such Assets to that jurisdiction would result in (1) Assets being located in a single jurisdiction with a market value (either individually or in aggregate) of more than $2,000,000 that are not subject to the Lien of the Security or (2) cause the Lien of Security over such Assets to cease to be perfected under Applicable Law, unless (x) the Borrower has first given thirty (30) days prior written notice thereof to the Lender, and (y) the Borrower has first executed and delivered to the Lender all Security and all financing or registration statements in form and substance satisfactory to the Lender which the Lender or its counsel, acting reasonably, from time to time deem necessary or advisable to ensure that the Security at all times constitutes a perfected first priority Lien (subject only to Permitted Encumbrances) over such Assets notwithstanding the storage, movement or location of such Assets as aforesaid together with such supporting certificates, resolutions, opinions and other documents as the Lender (acting reasonably) may deem necessary or desirable in connection with such security and registrations.

8.2.10 No Change of Name. The Borrower shall not change its name, adopt a French form of name or change its jurisdiction of incorporation or formation in each case without providing the Lender with thirty (30) days’ prior written notice thereof.

8.2.11 No Liens. The Borrower shall not create, incur, assume or permit to exist any Lien upon any of its Assets except Permitted Encumbrances.

8.2.12 No Action. The Borrower will not knowingly take any action that would result in the Borrower failing to maintain: (a) a Tangible Net Worth of no less than $150,000,000 at all times; or (b) a Current Ratio of no less than 1.50:1.0 at all times.

ARTICLE 9

CONDITIONS PRECEDENT

9.1 Conditions Precedent to Availability of the Credit Facility

          The obligations of the Lender to make available the Credit Facility or any part thereof to the Borrower are subject to compliance, on or before the Closing Date, with each of the following

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conditions precedent, which conditions precedent are for the sole and exclusive benefit of the Lender and may be waived in writing by the Lender in its sole discretion:

9.1.1 the representations and warranties set out in Article 7 shall be true and correct on the Closing Date;

9.1.2 no Default or Event of Default shall have occurred and be continuing nor shall it be reasonably anticipated that there will be any Default or Event of Default immediately after and as a result of giving effect to the Closing Date;

9.1.3 the Lender shall have received the following in form and substance satisfactory to the Lender:

(a) Officers’ Certificates of the Borrower dated the Closing Date certifying that attached thereto are true and correct copies of the following documents, and that such documents are in full force and effect:

(i)	the articles or other constating documents of the Borrower (including, but not limited to, articles of amalgamation of USG Canadian Mining and the Borrower);
(ii)	the by-laws or other organizational documents of the Borrower;
(iii)	a certificate of incumbency including sample signatures of officers of the Borrower;
(iv)	the resolutions or other documentation evidencing that all necessary action, corporate or otherwise, has been taken by each of the Borrower to authorize the execution, delivery and performance, of the Credit Documents; and
(v)	the corporate structure of the Borrower as of the date hereof,

(b)	a certificate of status, certificate of good standing or similar certificate for all Relevant Jurisdictions of the Borrower in which the nature of the Borrower’s business requires the Borrower to be registered under Applicable Law shall have been delivered to the Lender;
(c)	releases, discharges (or written authorizations to discharge from the applicable Lien holder in form acceptable to the Lender) and postponements (in registerable form where appropriate) with respect to all Liens affecting the collateral encumbered by the Security which are not Permitted Encumbrances, if any, shall have been delivered to the Lender;
(d)	opinions of external counsel to the Borrower (along with the opinions of local counsel) dated the Closing Date in form and substance satisfactory to the Lender (including without limitation an opinion that the execution, delivery and performance of the Credit Documents do not breach the Senior Credit Agreement); and
(e)	such other documentation or information as the Lender shall have reasonably requested;

9.1.4 the Lender shall have received and be satisfied with the latest available quarterly financial statements for the Borrower and the Parent, as well as a Compliance Certificate for the Borrower;

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9.1.5 the Lender shall have received payment in full of all fees payable by the Borrower on or prior to the Closing Date under any Credit Document, including payment of all reasonable invoiced fees, charges and out-of-pocket expenses of counsel to the Lender;

9.1.6 no material adverse change has occurred in the operations or financial position of the Borrower since the preparation date of the financial statements referred to in section 9.1.4;

9.1.7 the Borrower shall have obtained all necessary government and third party consents necessary to enter into the Credit Documents and perform its obligations under the Credit Documents;

9.1.8 the Lender shall have received a completed environmental questionnaire in form and substance satisfactory to the Lender;

9.1.9 the Borrower shall have delivered to the Lender certificates of insurance acceptable to the Lender showing the Lender as a loss payee and mortgagee as its interest may appear on all insurance policies that insure the Assets to be secured by the Security and as an additional insured on all liability policies (other than professional liability) of the Borrower and in each case containing (i) provisions that such policies will not be cancelled without 15 days prior written notice having been given by the insurance company to the Lender, and (ii) with respect to the property insurance policy only, a standard non-contributory “mortgagee”, “lender” or “secured party” clause, as well as such other provisions as the Lender may reasonably require to fully protect (to the extent reasonably practicable) the Lender’s interest in the Assets subject to the Security and to any payments to be made under such policies;

9.1.10 duly executed copies of the Security Documents shall have been signed and tabled in escrow (along with certificates, if any, representing all shares or other securities pledged, together with related stock powers duly executed in blank) and such financing statements or other registrations of such Security, or notice thereof, shall have been filed, registered, entered or recorded in all offices of public record necessary or desirable in the opinion of the Lender to preserve or protect the charges and security interests created thereby in all applicable jurisdictions (including by way of control, where applicable); and

9.1.11 the Lender shall have received executed Credit Documents in form and substance satisfactory to the Lender.

9.2 Conditions Precedent to Subsequent Advances

          The obligation of the Lender to make any Advances is subject to compliance, on or before the relevant Borrowing Date, with each of the following conditions precedent, which conditions precedent are for the sole and exclusive benefit of the Lender and may be waived in writing by the Lender in its sole discretion):

9.2.1 the representation and warranties shall be true and correct on the relevant Borrowing Date as if made on and as of such date, except that (a) if any such representation and warranty is specifically given in respect of a particular date or particular period of time and relates only to such date or period of time, then such representation and warranty shall continue to be given as at such date or such period of time and (b) to the extent any matter addressed in any such representation and warranty changes in a manner specifically permitted by such warranty, or compliance therewith is waived by the Lender in accordance with the provisions of this Agreement, such repeated representation and warranty shall be revised to reflect those changes and/or waivers.

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9.2.2 no Default or Event of Default shall have occurred and be continuing nor shall it be reasonably anticipated that there will be any Default or Event of Default immediately after and as a result of giving effect to the proposed Advance;

9.2.3 the Borrower shall have executed and delivered such standard form letter of credit or other agreements of the Lender as the Lender shall require in respect of the issuance of letters of credit if the Advance is the issuance of a letter of Credit; and

9.2.4 the Lender shall have received a Borrowing Notice as required hereunder (except for overdraft availability); and

9.2.5 there shall not have been, and prior to delivery of the next report referred to in either section 8.1.10 or 8.1.11 above there shall not reasonably be expected to be, any mandatory prepayment as contemplated in items (i) or (ii) of section 3.4.1.

ARTICLE 10

EVENTS OF DEFAULT AND REMEDIES

10.1 Events of Default

The occurrence of any of the following events shall constitute an Event of Default (provided that the occurrence of any event referred to in any of sections 10.1.9 to 10.1.12 inclusive relative to the Parent only which does not result in a termination or material disruption in the supply of inventory by the Parent to the Borrower shall not constitute an Event of Default):

10.1.1 the Borrower shall fail to pay the principal amount of any Loan when such amount becomes due and payable;

10.1.2 the Borrower shall fail to pay any interest or fees hereunder when the same become due and payable hereunder and such failure shall remain unremedied for five (5) Banking Days;

10.1.3 any representation or warranty or certification made or deemed to be made by the Borrower or any of its directors or officers in this Agreement or any other Credit Document or the Hedging Arrangements to which it is a party shall prove to have been incorrect in any material and adverse respect when made or deemed to be made and, if the circumstances, facts or effects giving rise to or resulting from such inaccurate representation or warranty are capable of rectification (such that in relation to time periods thereafter, the representation or warranty would be correct), the representation and warranty remains uncorrected for a period of 30 days after the Borrower learns of the occurrence of such event.

10.1.4 the Borrower shall fail to perform, observe or comply with:

(a)	any of the covenants contained in sections 8.1.18, 8.1.19, 8.1.20, 8.2.1, 8.2.7, 8.2.10 or 8.2.11, provided that the Borrower will have 30 days to remedy any such failure after the Borrower learns of the existence of such Default so long as there has not been a previous failure to perform, observe or comply with such covenant in the prior 12 months;
(b)	any of the covenants contained in sections 8.1.21.1 or 8.1.21.2, provided that the Borrower will have 10 days to remedy any such failure after the Borrower learns of the

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existence of such Default so long as there has not been a previous failure to perform, observe or comply with such covenant in the prior 12 months; or

(c) any of the covenants contained in sections 3.4, 8.1.21.3, 8.2.2, 8.2.3, 8.2.4, 8.2.5, 8.2.6, 8.2.8 or 8.2.12.

10.1.5 the Borrower shall fail to perform, observe or comply with any of the covenants contained in this Agreement or any other Credit Document or the Hedging Arrangements except as specifically set out in section 10.1.4 above and such failure shall remain unremedied for 30 days after the Borrower learns of the existence of such Default.

10.1.6 (i) the Borrower is in default in the performance of or compliance with any term of any evidence of any Debt in an aggregate outstanding principal amount of at least U.S. $10,000,000 (or its equivalent in the relevant currency of payment) or of any mortgage, indenture or other agreement relating thereto or the Hedging Arrangements or any other condition exists, and as a consequence of such default or condition the holder of such Debt is permitted to cause such Debt in whole or in part to become due prior to its stated maturity or such Debt in whole or in part has become, or has been declared due and payable before its stated maturity or before its regularly scheduled dates of payment, (ii) the Parent is in default in the performance of or compliance with any term of any evidence of any Debt in an aggregate outstanding principal amount of at least U.S. $50,000,000 (or its equivalent in the relevant currency of payment) or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Debt in whole or in part has become, or has been declared due and payable before its stated maturity or before its regularly scheduled dates of payment, or (iii) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Debt to convert such Debt into equity interests), either the Borrower of the Parent becomes obligated to purchase or repay Debt before its original maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least U.S. $10,000,000 except in the case of the Parent for which the limit will be U.S. $50,000,000 (or its equivalent in the relevant currency of payment) provided that this section 10.1.6 shall not apply to Debt which is secured by a Permitted Encumbrance that becomes due solely as a result of the sale, transfer or other disposition (including as a result of a casualty or condemnation event) of the Assets secured by the Permitted Encumbrance and not due to any other default or other mandatory prepayment provision and provided any Debt secured by such Permitted Encumbrance becomes so due by reason of such disposition;

10.1.7 any judgment or order, for the payment of money in excess of U.S. $10,000,000, shall be rendered against the Borrower (provided that in determining whether the foregoing threshold is satisfied, there shall be excluded any portion of such judgment that is fully covered by a third party insurance company rated not less than “B++” by A.M. Best (less any applicable deductible) and as to which the insurer has not disputed, in writing, its responsibility to cover such judgment) and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order upon the assets of the Borrower or Parent; or (ii) there shall be any period of 30 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;

10.1.8 there shall be any Change of Control;

10.1.9 the Borrower, any of the Material Subsidiaries or the Parent admits its inability to pay its respective debts as they become due or otherwise acknowledges its insolvency;

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10.1.10 the Borrower, any of the Material Subsidiaries or the Parent institutes any proceeding or takes any corporate action or executes any agreement to authorize its participation in or commencement of any proceeding:

10.1.10.1 seeking to adjudicate it a bankrupt or insolvent, or

10.1.10.2 seeking liquidation, dissolution, winding up, reorganization, arrangement, protection, relief or composition of it or any of its property or debt or making a proposal with respect to it under any law relating to bankruptcy, insolvency, reorganization or compromise of debts or other similar laws (including, without limitation, any application under the Companies’ Creditors Arrangement Act (Canada) or proposal under the Bankruptcy and Insolvency Act (Canada) or any reorganization, arrangement or compromise of debt under the laws of its jurisdiction of incorporation);

provided that it will not constitute an Event of Default if the Borrower or a Material Subsidiary or the Parent takes steps to liquidate, dissolve or wind-up a Material Subsidiary or to reorganize the Borrower or a Material Subsidiary or the Parent as otherwise permitted hereunder;

10.1.11 any proceeding is commenced against or affecting the Borrower, any of the Material Subsidiaries or the Parent;

10.1.11.1 seeking liquidation, dissolution, winding up, reorganization, arrangement, protection, relief or composition of it or any of its Assets or Debt or making a proposal with respect to it under any law relating to bankruptcy, insolvency, reorganization or compromise of debts or other similar laws (including, without limitation, any reorganization, arrangement, or compromise of debt under the Bankruptcy and Insolvency Act (Canada) or the laws of its jurisdiction of incorporation), but excluding a solvent arrangement or other reorganization permitted by section 8.2.2; or

10.1.11.2 seeking appointment of a receiver, trustee, agent, custodian or other similar official for it or for any substantial part of its Assets;

and such proceeding is not being contested in good faith by appropriate proceedings or, if so contested remains outstanding, undismissed and unstayed more than 60 days from the institution of such first mentioned proceeding;

10.1.12 any creditor of the Borrower, any of the Material Subsidiaries, the Parent or any other Person, shall privately appoint a receiver, trustee or similar official for any substantial part of the Assets of the Borrower, any of the Material Subsidiaries, or the Parent and such appointment is not being contested in good faith and by appropriate proceedings or, if so contested, such appointment continues for more than 60 days; or

10.1.13 if any of the Security shall cease to be a valid and perfected first priority security interest subject only to Permitted Encumbrances and the Borrower shall have failed to remedy such default within ten (10) Business Days of the Borrower becoming aware of such fact and being provided by the Lender with any documentation required to be executed to remedy such default.

10.2 Remedies Upon Default

          Upon the occurrence of any Event of Default which is continuing, the Lender may, by notice given to the Borrower:

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10.2.1 declare the unutilized portion (if any) of the Commitment to be terminated (whereupon the Lender shall not be required to make any further Advances);

10.2.2 declare all Obligations to be immediately due and payable; and

10.2.3 take such actions and commence such proceedings as may be permitted at law or in equity and proceed to exercise any and all rights hereunder and under the Security at such times and in such manner as the Lender in its sole discretion may consider expedient,

all without, except as may be required by Applicable Law, any additional notice, presentment, demand, protest, notice of protest, dishonour or any other action. The rights and remedies of the Lender hereunder and the Security are cumulative and are in addition to and not in substitution for any other rights or remedies provided by Applicable Law.

10.3 Distributions

          All distributions under or in respect of any other Credit Document shall be held by the Lender on account of the Obligations without prejudice to any claim by the Lender for any deficiency after such distributions are received by the Lender and the Borrower shall remain liable for any such deficiency. All such distributions may be applied to such part of the Obligations as the Lender may see fit in its sole discretion. The Lender may at any time change any appropriation of any such distributions or other moneys received by the Lender and may reapply the same to any other part of the Obligations as the Lender may from time to time in its sole discretion see fit, notwithstanding any previous application.

ARTICLE 11

SECURITY

11.1 Form of Security

          On the Closing Date, as continuing collateral security for the payment and satisfaction of all Obligations of the Borrower to the Lender, the Borrower shall deliver or cause to be delivered to the Lender the following Security, all of which shall be in form and substance satisfactory to the Lender:

(a)	a general security agreement from the Borrower in favour of the Lender constituting a first-priority Lien (subject only to Permitted Encumbrances) on all of the present and future Assets of the Borrower (other than the present and future Intellectual Property of the Borrower);
(b)	a license agreement in favour of the Lender and relating to all Intellectual Property of the Borrower;
(c)	a moveable hypothec from the Borrower in favour of the Lender constituting a first-priority Lien (subject only to Permitted Encumbrances) on all of the present and future moveable Assets of the Borrower (other than the present and future Intellectual Property of the Borrower); and
(d)	a Bank Act assignment from the Borrower in favour of the Lender constituting a first priority Lien (subject to Permitted Encumbrances) on all Assets subject thereto.

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11.2 After Acquired Assets and Further Assurances

          The Borrower shall from time to time and, at the request of the Lender, execute and deliver all such further documents, deeds or other instruments of conveyance, assignment, transfer, mortgage, pledge or charge in connection with any of its Assets, whether now existing or acquired by the Borrower after the date hereof and intended to be subject to the security interests created hereby including any insurance thereon.

11.3 Release/Subordination of Security

          Notwithstanding anything to the contrary in any other provision of any Credit Document, the Lender shall not be required to provide a release of the Security over all the Assets until all Obligations (other than contingent and unclaimed Obligations under indemnity provisions which are expressed to survive the termination of this Agreement) and obligations under the Hedging Arrangements have been repaid in full and there remains no further commitment or obligation of the Lender to advance funds under this Agreement and no Hedging Arrangements are outstanding. Notwithstanding the foregoing, the Lender shall, at the cost of the Borrower, promptly, upon written request by the Borrower execute and deliver such documents that are in a form and substance acceptable to the Lender, acting reasonably, as the Borrower may from time reasonably request in writing to (a) discharge the Security over any Assets Disposed of by the Borrower or any Subsidiary from time to time unless an Event of Default has occurred and is continuing or the Lender believes (acting reasonably) that such Disposition has resulted in or would result in a Default or Event of Default and (b) subordinate the Security to any Permitted Encumbrances described in paragraph (x) of the definition of Permitted Encumbrances so long as (i) all such Permitted Encumbrances are limited to specific capital assets of the Borrower, the proceeds arising from such specific capital assets and insurance proceeds specifically relating to such capital assets, (ii) the aggregate total of all amounts secured by such encumbrances do not exceed the amount permitted pursuant to paragraph (x) of the definition of Permitted Encumbrances and (iv) such subordination does not in any way limit or impact (A) the priority, perfection or enforcement of the Lender’s Security over the other Assets of the Borrower or the Material Subsidiaries, (B) the priority, perfection or enforcement of the Obligations or the Borrower’s obligations under the Hedging Arrangements or (C) the rights and remedies of the Lender under the Credit Documents (other than in respect of the specific capital assets subject to such Permitted Lien, the proceeds arising from such specific capital assets and insurance proceeds specifically relating to such capital assets).

11.4 Security Charging Real Assets

          Notwithstanding anything to the contrary contained in any other provision of any Credit Document, to the extent that the charges and security interests created by the Security charge real property or any interest therein such charges and security interests shall secure interest after the occurrence of an Event of Default at the same rates as those in effect prior to such occurrence.

ARTICLE 12

GENERAL

12.1 Reliance and Non-Merger

          All covenants, agreements, representations and warranties of the Borrower made herein or in any other Credit Document or in any certificate or other document signed by any of its directors or officers and delivered by or on behalf of any of them pursuant hereto or thereto are material, shall be deemed to have been relied upon by the Lender notwithstanding any investigation heretofore or hereafter

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made by the Lender or its counsel or any employee or other representative of any of them and shall survive the execution and delivery of this Agreement and the other Credit Documents until the Borrower shall have satisfied and performed all of its obligations hereunder (other than those obligations which by their express terms survive termination of this Agreement) and the Lender shall have no further obligation to make Advances hereunder.

12.2 Credit Information

          To the extent required by Applicable Law, the Lender shall be entitled from time to time to obtain, provide and exchange credit information relating to the Borrower, its Subsidiaries, directly or indirectly, from, to and with any credit reporting agency, credit bureau or any Person with whom the Borrower has or may have financial relations, and Lender shall be not liable to the Borrower by reason of any act or omission of any of it or any other Person in obtaining, providing and exchanging such credit information or declining or failing to do so.

12.3 No Set-Off by the Borrower

          The amounts payable by the Borrower hereunder shall not be subject to any deduction, withholding, set-off or counterclaim by the Borrower or a Guarantor for any reason whatsoever.

12.4 Set-Off by the Bank

          The Lender may at any time and from time to time following the occurrence of an Event of Default which is continuing, without notice to the Borrower, combine, consolidate or merge all or any of the accounts of the Borrower with, and liabilities to, the Lender and may set off, appropriate and apply any and all deposits by or for the benefit of the Borrower with any branch of the Lender, general or special, matured or unmatured, and any other indebtedness and liability of the Lender to the Borrower matured or unmatured, against and on account of the Obligations when due, notwithstanding that the balances of the accounts, deposits or Obligations may or may not be expressed in the same currency.

12.5 Employment of Experts

          The Lender may, at any time and from time to time, retain and employ legal counsel, independent accountants, environmental consultants and other experts in order to perform or assist it in the performance of its rights and powers under this Agreement or the other Credit Documents, and neither it nor its directors, officers, employees or agents shall be responsible to the Borrower or any other Person for or in respect of the negligence or misconduct of any such accountant, consultant or other expert selected by it in good faith and with reasonable care.

12.6 Reliance by the Lender

          The Lender shall be entitled to rely upon any schedule, certificate, statement, report, notice or other document or written communication (including any facsimile, telex or other means of electronic communication) believed by it to be genuine and correct, and upon the advice and statements of agents, legal counsel, accountants, appraisers, consultants and other experts selected by them.

12.7 Notices

12.7.1 Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be given by facsimile or other means of electronic communication or by hand-delivery as hereinafter provided. Any such notice, if sent by facsimile or other means of electronic

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communication, shall be deemed to have been received on (a) the Banking Day sent, if sent prior to 4:00 p.m. on a Banking Day, or (b) if not sent before 4:00 p.m. on a Banking Day, on the Banking Day next following the day of sending,; or if delivered by hand shall be deemed to have been received at the time it is delivered to the applicable address noted below, provided in each case that if such day is not a Banking Day such notice shall be deemed to have been received on the next succeeding Banking Day. Notice of change of address shall also be governed by this section. Notices and other communications shall be addressed as follows:

(a)	if to the Borrower:
	CGC Inc.
	350 Burnhamthorpe Rd.
	5th Floor
	Mississauga, Ontario
	L5B 3J1

Attention:	Vice President, Finance
Facsimile Number:	(905) 803-5652
with a copy to:
USG Corporation
550 West Adams Street
Chicago, IL 60661
Attention:	Vice President and Treasurer
Facsimile Number:	(312) 672 3883
and
Attention:	Corporate Secretary
Facsimile Number:	(312) 672-7748

(b)	if to the Lender:
	The Toronto-Dominion Bank,
	100 Wellington Street West
	Canadian Pacific Tower
	26th Floor
	Toronto, Ontario
	M5K 1A2

Attention:	Senior Manager, Commercial National Accounts
Facsimile Number:	(416) 982-6076

12.8 Time

          Time is of the essence for all purposes of the Credit Documents.

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12.9 Further Assurances

          Whether before or after the happening of an Event of Default, the Borrower shall at its own expense do, make, execute or deliver, or cause to be done, made, executed or delivered all such further acts, documents, agreements and things in connection with the Credit Facility and the Credit Documents as the Lender may reasonably require from time to time for the purpose of giving effect to the Credit Documents all within a reasonable period of time after the request of the Lender.

12.10 Assignment

12.10.1 This Agreement and the other Credit Documents shall enure to the benefit of and be binding on the parties hereto and thereto, their respective successors and any assignee or transferee of some or all of the parties’ rights or obligations under this Agreement and the other Credit Documents as permitted under this section 12.10.

12.10.2 The Borrower shall not assign or transfer all or any part of its rights or obligations under this Agreement or any of the other Credit Documents without the prior written consent of the Lender, which consent may be arbitrarily withheld.

12.10.3 The Lender may at any time assign or transfer all or a portion of its rights and obligations under the Credit Facility and the Credit Documents to, and may have its corresponding obligations in respect thereof assumed by, any other Person at such times and upon such terms as it may deem fit, provided that any assignment must be approved by the Borrower (such approval not to be unreasonably withheld or delayed) unless:

(A) the assignment is by the Lender to an Affiliate of the Lender or to any other person who is a lender under this agreement or an Affiliate of such lender; or

(B) an Event of Default has occurred and is continuing,

in which case no such approval or consent is required.

12.11 Currency Conversion and Indemnity

          If, in connection with any action or proceeding brought in connection with this Agreement or any of the Credit Documents or any judgment or order obtained as a result thereof, it becomes necessary to convert any amount due hereunder in one Currency (the “first Currency”) into another Currency (the “second Currency”), then the conversion shall be made at the Conversion Rate on the first Banking Day prior to the day on which payment is received.

          If the conversion is not able to be made in the manner contemplated by the preceding paragraph in the jurisdiction in which the action or proceeding is brought, then the conversion shall be made at the Conversion Rate on the day on which the judgment is given.

          If the Conversion Rate on the date of payment is different from the Conversion Rate on such first Banking Day or on the date of judgment, as the case may be, the Borrower shall pay such additional amount (if any) in the second Currency as may be necessary to ensure that the amount paid on such payment date is the aggregate amount in the second Currency which, when converted at the Conversion Rate on the date of payment, is the amount due in the first Currency, together with all costs, charges and expenses of conversion. Any additional amount owing by the Borrower to the Lender pursuant to the provisions of this section shall be due as a separate debt and shall give rise to a separate

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cause of action and shall not be affected by or merged into any judgment obtained for any other amounts due under or in respect of this Agreement or any of the other Credit Documents.

12.12 Counterparts

          This Agreement may be signed in any number of counterparts, each of which shall be deemed to be an original, but all such separate counterparts shall together constitute one and the same instrument.

12.13 Entire Agreement

          The Credit Documents constitute the entire agreement between the parties hereto pertaining to the matters therein set forth. There are no warranties, representations or agreements between the parties in connection with such matters except as specifically set forth or referred to in the Credit Documents.

[Remainder of page left intentionally blank; signature page on the following page]

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IN WITNESS WHEREOF this Agreement has been executed by the parties hereto as of the date first written above.

CGC INC., as Borrower
By:	/s/ James McEwen
	Title: Vice President Finance and Secretary
By:	/s/ Christopher Macey
	Title: Vice President and General Manager

THE TORONTO-DOMINION BANK, as Lender
By:	/s/ Susan Schler
	Title: Associate Vice President, National Accounts
By:	/s/ Scott Galbraith
	Title: Senior Manager, National Accounts

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SCHEDULE 1.1.20

Borrowing Notice

TO:	The Toronto-Dominion Bank, as Lender
	Re:            CGC Inc.

          Reference is made to a credit agreement (the “Credit Agreement”) dated as of June 30, 2009 between CGC Inc. and the Lender. All terms used in this Borrowing Notice which are defined in the Credit Agreement have the meanings attributed thereto in the Credit Agreement.

          The Borrower hereby requests a Loan as follows:

1.	Type of Loan:
2.	Amount of Loan:
3.	Currency of Loan:
4.	Borrowing Date:
5.	Interest Period, BA Period or
	Letter of Credit term, as applicable:
6.	Payment instructions (if any):
7.	If Rollover or Conversion of another Loan, provide details of other Loan:
	(a) Type:
	(b) Amount:
	(c) Expiry Date:

          Except where this notice is provided in respect of a Rollover or Conversion; all of the representations and warranties contained in the Credit Agreement are true and correct on the date hereof as if made on and as of the date hereof subject to the same exceptions set out in Section 7.2(a) and 7.2(b) of the Credit Agreement;

          Except where this notice is provided in respect of a Rollover or Conversation, no Default or Event of Default has occurred or is continuing nor is it reasonably anticipated that there will be any Default or Event of Default immediately after and as a result of giving effect to the Loan requested above.

     DATED this n day of n, n.

CGC INC.
By:
	Title
By:
	Title

- ii -

SCHEDULE 1.1.31

Compliance Certificate

TO:	The Toronto-Dominion Bank, as Lender
	Re:            CGC Inc.

          This compliance certificate is delivered to you in connection with a credit agreement (the “Credit Agreement”) dated as of June 30, 2009 between CGC Inc. and the Lender. All terms used in this Compliance Certificate which are defined in the Credit Agreement have the meanings attributed thereto in the Credit Agreement.

          I am the duly appointed Chief Financial Officer of the Borrower and as such have knowledge of the matters hereafter expressed, and I hereby certify in such capacity, and without personal liability, that:

1.	I am familiar with and have examined the provisions of the Credit Agreement.
2.	The financial statements delivered pursuant to sections ý8.1.10 or ý8.1.11, as applicable, present fairly the financial position, results of operations and changes in financial position of the Borrower and the Parent, as applicable, in accordance with GAAP.
3.	The representations and warranties contained in the Credit Documents are true and correct in all material respects on and as of the date hereof.
4.	No Default or Event of Default has occurred and is continuing [,except]. [If any Default or Event of Default has occurred, please specify the relevant particulars and the period of existence thereof and the action which the Borrower proposes to take or has taken with respect thereto].
5.	The material attached to this Compliance Certificate demonstrate the following financial tests for the relevant fiscal period ending on the date as of which the financial statements referred to above were prepared:

(a)	the Tangible Net Worth was $_____________________;
(b)	the Current Ratio was _____________:1;
(c)	the Interest Coverage Ratio was _____________:1.

6.	Attached, in reasonable detail, are calculations showing compliance (or, as the case may be, non-compliance) at the end of the relevant Fiscal Quarter with the covenants referenced in paragraph 5 above.
7.	None of the Borrower or any Subsidiary has issued any Lien (other than Permitted Encumbrances) or Guarantee Obligation to any Person except n.
	DATED this n day of n, n.

CGC INC.
By:
	Title
By:
	Title

- ii -

SCHEDULE 3.4.1(iii)

Disposition of Land

1.	Approx. 3.09 acres part of 735 Fourth Line, Oakville Ontario PT LT 20, CON 3 TRAFALGAR, South of Dundas St., as in 333090 & 333091; T/W 333090; OAKVILLE
2.	Approx. 10 acres at 7200 Notre Dame St., Montreal, Quebec

SCHEDULE 7.1.9

Subsidiaries

1. CNG Distribution Limited

- 2 -

SCHEDULE 7.1.10

Litigation

None

Schedule 7.1.15

Pension Plans

Name:	CGC Inc. Retirement Plan
Type of Plan:	Defined Benefit
Trustee:	RBC Dexia
	77 King Street West
	Toronto, ON, M5W 1P9
Trustee Contact:	Brian Bagley Trustee
Account Number:	125170002
Name:	CGC Inc. Supplemental Pension Plan
Type of Plan:	Supplemental Employee Retirement Plan
Trustee:	Royal Trust
	77 King Street West
	Toronto, ON, M5W 1P9
Trustee Contact:	Yasmin Remutulla
Account Number:	109700001

Schedule 7.1.16

Insurance

Expiration Date*	Insured	Coverage	Company	Broker	Limit	Deductible/SIR	Annual Premium (US)	Policy Number
***	CGC	*** ***	***	***	***	***	***	*** ***
***	USG & All Subsidiaries (Master Policy)	***	***	***	***	***	***	***
***	CGC	***	***	***	***	***	***	***

• All Policies are 1 year term.

• All Policies include Brokerage Fee and or Commission.

• CGC as a subsidiary of USG Corporation is covered by blanket policy issued to the parent.

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

Expiration Date*	Insured	Coverage	Company	Broker	Limit	Deductible/SIR	Annual Premium (US)	Policy Number
***	USG & All Subsidiaries (Master Policy)	***	***	***	***	***	***		***
***	CGC	***	***	***	***	—			***

• All Policies are 1 year term.

• All Policies include Brokerage Fee and or Commission.

• CGC as a subsidiary of USG Corporation is covered by blanket policies issued to the parent.

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

Schedule 7.1.18

Real Property

(see attached)

Properties (Leased & Owned)

CGC, INC.

Leased Properties

											BUILDING
		RENT PER	SECURITY	RENEWAL	RENEWAL	NOTICE IN	ACTION				SQUARE
LOCATION	EXP. DATE	MONTH	DEPOSIT	DATE	YRS	DAYS	DATE	COMMENTS	CENTER NAME AND ADDRESS	LANDLORDS NAME AND ADDRESS	FOOTAGE
B.C., Port Kells ((Distribution only)	***	***	***	***	***	***	***	***	***	***	***
Alberta, Calgary (Mfg and Distribution)	***	***	***	***	***	***	***	***	***	***
Manitiba, Winnipeg (DeBaets) (Distribution only)	***	***	***	***	***	***	***	***	***	***
Newfoundland, Mt. Pearl (Economy Drywall)	***	***	***	***	***	***	***	***	***	***
ON, Mississauga (Head Office)	***	***	***	***	***	***	***	***	***	***
Quebec, Ville d’Anjou (Customer Service Office)	***	***	***	***	***	***	***	***	***	***
Owned Properties
Surrey									CGC Inc 11105 Bridge Road. Surrey, BC
Little Narrows									CGC Inc 79 Little Narrow Road Little Narrows, Nova Scotia
Windsor									CGC Inc 699 Wentworth Road. Windsor, Ontario
Hagersville									CGC Inc 55 Third Line Road, Highway #6 Hagersville, Ontario
Oakville									CGC Inc 735 Fourth Line Road Oakville, Ontario
Montreal									CGC Inc 7200 Notre Dame St. Montreal, Quebec

	LIABILITY INSURANCE
	LIABILITY INSURANCE			NOTICE OF
	RESPONSIBILITY		ADDITIONAL INSURANCE NEEDED	CANCELLATION	WAIVER OF
LOCATION	(LANDLORD/TENANT)	LIMIT REQUIRED	(YES/NO)	(# OF DAYS)	SUBROGATION
B.C., Port Kells ((Distribution only)	***	***		***
Alberta, Calgary (Mfg and Distribution)	***	***	***	***
Manitiba, Winnipeg (DeBaets) (Distribution only)	***	***			***
Newfoundland, Mt. Pearl (Economy Drywall)	***	***
ON, Mississauga (Head Office)	***	***
Quebec, Ville d’Anjou (Customer Service Office)	***	***		***	***
Owned Properties
Surrey
Little Narrows
Windsor
Hagersville
Oakville
Montreal

	PROPERTY INSURANCE
	BUILDING INSURANCE			IF TENANT (ALL RISK	IF TENANT, SPECIAL TREATMENT OF
	TO BE PROVIDED BY:		IF TENANT (ALL	INCLUDING	LANDLORD (LOSS PAYEE/ADDITIONAL	IF TENANT VALUE OF	WAIVER OF
LOCATION	(LANDLORD/TENANT)	IF TENANT (F&EC)	RISK)	EARTHQUAKE & FLOOD)	INSURED)	BUILDING	SUBROGATION
B.C., Port Kells ((Distribution only)	***
Alberta, Calgary (Mfg and Distribution)	***
Manitiba, Winnipeg (DeBaets) (Distribution only)	***	***			***	***
Newfoundland, Mt. Pearl (Economy Drywall)	***						***
ON, Mississauga (Head Office)	***
Quebec, Ville d’Anjou (Customer Service Office)	***	***	***		***	***
Owned Properties
Surrey
Little Narrows
Windsor
Hagersville
Oakville
Montreal

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

Schedule 7.1.19

Relevant Jurisdictions

Newfoundland and Labrador

Nova Scotia

Quebec

Ontario

Manitoba

Alberta

British Columbia

Schedule 7.1.20

Intellectual Property

CANADIAN TRADEMARK REGISTRATIONS	REGISTRATION NUMBER	REGISTRATION DATE
A BAND FORMED OF RED, WHITE AND BLUE...GOODS	UCA42315	16-Jan-52
A RED BAND AND A BLUE BAND...THEREON	UCA41875	16-Jan-52
ACOUSTIBOND	TMA464,788	25-Oct-96
ACOUSTIFLEX	TMA404,942	13-Nov-92
ACOUSTIPAD	TMA109,828	28-Mar-58
AGRI GYPSUM	TMA512,091	20-May-99
ARM & HAMMER & Design	TMDA56694	1-Sep-87
BONDCRETE	TMDA46051	17-Apr-29
BUILDING FOR A CENTURY	TMA702,932	12-Dec-07
BUILDING NEWS	UCA50080	3-Jun-54
CEILING CENTRE	TMA500,616	15-Sep-98
CELEBRATION	TMA415,396	13-Aug-93
CENTRICITEE	TMA376,961	7-Dec-90
CGC & Design	TMA238,765	28-Dec-79
CGC & Design	TMA286,926	13-Jan-84
CGC ACTION	TMA464,983	25-Oct-96
CGC Design	TMA390,155	15-Nov-91
CGC Design	TMA386,892	26-Jul-91
CGC DESIGN (2nd appl’n.)	TMA380,477	22-Feb-91
CGC Design (ENGLISH)	TMA424,053	4-Mar-94
CGC Design (FRENCH)	TMA424,052	4-Mar-94

CANADIAN TRADEMARK REGISTRATIONS	REGISTRATION NUMBER	REGISTRATION DATE
CGC DESIGN (NEW)	TMA553,806	15-Nov-01
CGC INTERIORS	TMA383,625	26-Apr-91
CGC; DRYWALL COVE, COVE SHADOW LINE & Design	TMA452,201	22-Dec-95
CGC; LA MARQUE DES PROS & Design	TMA451,054	1-Dec-95
CGC; LA MARQUE DES PROS	TMA615,795	27-Jul-04
CGC; LA MARQUE DES PROS	TMA664,890	24-May-06
CGC; MOULURE CREUSE, BAGUETTED’OMBRAGE & Design	TMA455,924	22-Mar-96
CGC; THE NAME PROS TRUST & Design	TMA451,055	1-Dec-95
CGC; THE NAME PROS TRUST & Design	TMA652,472	08-Nov-05
CGC; THE NAME PROS TRUST	TMA616,110	02-Aug-04
CHAMPION	TMDA46052	17-Apr-29
CLASSIC	TMA588,708	03-Sep-04
CLASSIC	TMA609,421	05-May-04
CLASSIC	TMA589,321	09-Sep-03
CONTROLE POUSSIERE COMPOSE A JOINT & DESIGN	TMA722,463	27-Sep-08
DJR	TMA593,987	5-Nov-03
DUR-A-BEAD	TMA106,726	24-May-57
DURABOND	TMA200,932	2-Aug-74
DURACRETE	TMA398,735	29-May-92
DURACRETE	TMA155,137	19-Jan-68
DURAPATCH	TMA286,450	30-Dec-83
DUST CONTROL DRYWALL COMPOUND & DESIGN	TMA730,443	09-Dec-08
ELEGANCE	TMA653,862	29-Nov-05
EASY SAND	TMA558,302	21-Feb-02

- 8 -

CANADIAN TRADEMARK REGISTRATIONS	REGISTRATION NUMBER	REGISTRATION DATE
F1 FORMULA 1	TMA703,557	19-Dec-07
F1 FORMULE 1	TMA703,560	19-Dec-07
FAST-LOC	TMA281,956	29-Jul-83
FIRECODE	TMA119,233	26-Aug-60
FORMULA 1	TMA703,559	19-Dec-07
FORMULE 1	TMA703,558	19-Dec-07
GALVAGREY	TMA374,036	5-Oct-90
GRAND PRIX	TMA343,070	22-Jul-88
GRAND PRIZE Design	TMDA46055	17-Apr-29
GRIDWORKS	TMA393,994	7-Feb-92
GYPLAP	TMA285,195	25-Nov-83
GYP-LAP	TMDA39516	23-Mar-26
HAMMER	TMDA56698	1-Sep-87
HAMMER BRAND Design	TMDA42583	12-Oct-27
INT-A-GRID	TMA291,750	8-Jun-84
IVORY	UCA38853	14-Oct-50
KAL-TEX	TMA246,358	13-Jun-80
LA TOURNEE DES CHANTIERS	TMA688,497	29-May-07
LE CENTRE DES PLAFONDS	TMA500,618	15-Sep-98
LE CHOIX DES PROS	TMA490,999	5-Mar-98
MACHINE MUD	TMA532,629	13-Sep-00
MACHINE MUD & Design	TMA538,744	15-Dec-00
MACHINE MUD & Design	TMA553,687	13-Nov-01
MACHINE MUD & Design (Bilingual)	TMA543,271	2-Apr-01

- 9 -

CANADIAN TRADEMARK REGISTRATIONS	REGISTRATION NUMBER	REGISTRATION DATE
MACHINE MUD & Design (FRENCH)	TMA541,460	22-Feb-01
MAGIC MUD	TMA541,442	22-Feb-01
MAGIC MUD & Design	TMA549,151	2-Aug-01
MARS	TMA561,300	2-May-02
MERIDIAN	TMA377,854	4-Jan-91
MOIRE	TMA703196	14-Dec-07
ON SITE WITH THE PROS	TMA681,083	05-Feb-07
PANZ	TMA486,779	11-Dec-97
PARALINE	TMA253,146	28-Nov-80
PARALINE PLUS	TMA343,476	5-Aug-88
PARALITE	TMA256,769	13-Mar-81
PARALOCK	TMA255,337	30-Jan-81
PERF-A-BEAD	TMA106,727	24-May-57
PERF-A-TAPE	UCA17403	20-Oct-42
PLUS 3	TMA306,997	13-Sep-85
PRO BEAD	TMA396,747	3-Apr-92
PYROBAR	TMDA54132	8-Apr-87
QUADRA	TMA209,108	29-Aug-75
QUADRADOME	TMA382,133	22-Mar-91
QUICK-LOC	TMA355,333	5-May-89
READY-TEX	TMA549,189	2-Aug-01
RED BAND Design	TMDA51689	3-Mar-31
RED TOP	TMDA035599	14-May-24
ROCKLATH	TMDA46172	29-Apr-29

- 10 -

CANADIAN TRADEMARK REGISTRATIONS	REGISTRATION NUMBER	REGISTRATION DATE
RUFF-TEX	TMA222,183	29-Jul-77
RUF-TEX	TMA223,149	23-Sep-77
SHOWERGLIDE	TMA286,201	23-Dec-83
SNAP-LOC	TMA387,688	16-Aug-91
SNOW-TEX	TMA220,518	6-May-77
SOFTCORE	TMA531,744	24-Aug-00
SPEED-LOC	TMA363,236	10-Nov-89
STRAIGHT-LOC	TMA387,687	16-Aug-91
STRUCTO-LITE	TMA106,886	7-Jun-57
SUR PLACE AVEC LE PROS	TMA681082	15-Feb-07
SYNKO & Design	TMA566,802	3-Sep-02
SYNKO & Design	TMA227,768	12-May-78
SYNKO PRO-SET	TMA406,986	15-Jan-93
SYNKO SUPER-LITE	TMA382,961	12-Apr-91
SYNKOLOID	TMA210,024	10-Oct-75
TAPE-ON	TMA399,513	26-Jun-92
TASK 1	TMA255,338	30-Jan-81
TEXTONE	TMA232,600	6-Apr-79
TEXTURA	TMA248,811	1-Aug-80
TEXTURE FRESH	TMA312,779	28-Mar-86
THE MUD TOUR	TMA688,496	29-May-07
THE PROFESSIONAL’S CHOICE	TMA491,000	5-Mar-98
TRANSPARENCIES	TMA387,089	26-Jul-91
TUFF-HIDE	TMA647,222	01-Sep-05

- 11 -

CANADIAN TRADEMARK REGISTRATIONS	REGISTRATION NUMBER	REGISTRATION DATE
TUFF-HIDE & DESIGN	TMA638,899	03-May-05
TUFF-HIDE PRIMER-SURFACER	TMA646,436	23-May-05
VALUTEX	TMA490,805	3-Mar-98
VERSATEX	TMA292,424	29-Jun-84
VISTA	TMA288,357	24-Feb-84

CANADIAN TRADEMARK APPLICATIONS	APPLICATION NUMBER	DATE OF FILING
CGC	1,327,312	07-Dec-06
CONTROLE POUSSIERE COMPOSE A JOINT & DESIGN	1,433,399	02-May-09
DUST CONTROL DRYWALL COMPOUND & DESIGN	1,433,398	06-May-09
PAIL DESIGN	1,434,044	08-Apr-09
UN SIENCLE A BATIR	1308176	07-Jul-06

U. S. TRADEMARK REGISTRATIONS	REGISTRATION NUMBER	REGISTRATION DATE
ACOUSTIBOND	2078265	15-Jul-97
PANZ	2192934	6-Oct-98

- 12 -

SCHEDULE 7.1.21

Bank Accounts

(see attached)

Canadian Entities

Preparer:
Date:

				Account
			Bank Account	Balances as of	SWIFT	ABA
Entity Name	Bank Name	Bank Address	Number	30-Apr-2009	CODE	#	Type of Account	Currency	Authorized Signers		Limits
CGC Inc.	***	*** *** *** ***	***	***	***	***	*** *** ***	***	*** *** *** *** *** *** ***	*** *** *** *** *** ***	***
CGC Inc.	***	*** *** *** ***	***	***	***	***	*** *** ***	***	*** *** ***	*** *** ***	***
CGC Inc.	***	*** *** *** ***	***	***	***	***	*** ***	***	*** *** ***	*** ***	***
CNG Distribution Limited	***	*** *** *** ***	***	***	***	***	*** ***	***	*** *** ***	*** ***	***
USG Canadian Mining Ltd	***	*** *** *** ***	***	***	***	***	*** *** ***	***	*** *** *** *** *** ***	*** *** *** *** ***	***
USG Canadian Mining Ltd.	***	*** *** *** ***	***	***	***	***	*** ***	***	*** *** ***	*** ***	***
USG Canadian Mining Ltd.	***	*** *** *** ***	***	***	***	***	*** *** ***	***	*** *** ***	*** ***	***
CGC Inc.	***	*** *** ***	*** ***		***	***	*** *** ***	***	***		***
CGC Charitable Foundation	***	*** ***	***	***	***	***	*** ***	***	***	***	***

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

Canadian Entities

Preparer:
Date:

				Account
			Bank Account	Balances as of	SWIFT	ABA
Entity Name	Bank Name	Bank Address	Number	30-Apr-2009	CODE	#	Type of Account	Currency	Authorized Signers		Limits
CGC Inc. (formerly for DONN Canada Ltd.)	***	*** *** *** ***	***	***	***	***	*** *** ***	***	*** *** *** *** ***	*** *** ***	***
CGC Inc. (formerly for DONN Canada Ltd.)	***	*** *** *** ***	***	***	***	***	*** *** ***	***	*** *** *** *** ***	*** *** ***	***
CGC Inc.	***	*** *** *** ***	***	***	***	***	*** ***	***	***		***
CNG Distribution Limited	***	*** *** ***	***	***	***	***	*** *** ***	***	*** ***	***	***
CGC Inc.	***	*** *** ***	*** ***	***	***	***	*** *** ***	***	*** ***	***	***
CGC Inc.	***	*** ***	***	***	***	***	***	***	*** ***	*** ***	***
CGC Inc.	***	*** *** ***	***	***	***	***	*** *** ***	***	***		***
CGC Inc.	***	*** *** *** ***	***	***	***	***	*** ***	***	***		***
CGC Inc.	***	*** *** ***	***	***				*** ***	*** *** *** ***

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION***

EX-10.7

EXHIBIT 10.7

USG CORPORATION

RESTRICTED STOCK UNITS AGREEMENT

     WHEREAS, the “Grantee” is an employee of USG Corporation, a Delaware corporation (the “Company”) or a Subsidiary;

     WHEREAS, the Board of Directors of the Company (the “Board”) has granted to the Grantee, as set forth in the Award Summary on the Morgan Stanley Smith Barney website on the “Date of Grant”, Restricted Stock Units (as defined in the Plan) (the “RSUs”) pursuant to the Company’s Long-Term Incentive Plan, as amended (the “Plan”), subject to the terms and conditions of the Plan and the terms and conditions hereinafter set forth; and

     WHEREAS, the execution of this Restricted Stock Units Agreement to evidence the RSUs (the “Agreement”) has been authorized by a resolution of the Board.

     NOW, THEREFORE, the Company and the Grantee agree as follows:

1.	Payment of RSUs. The RSUs covered by this Agreement shall become payable to the Grantee if they become nonforfeitable in accordance with Section 2, Section 3, or Section 4 hereof.
2.	Vesting of RSUs. Subject to the terms and conditions of Sections 3, 4 and 5 hereof, the Grantee’s right to receive the Common Shares subject to the RSUs shall become nonforfeitable if the Grantee remains continuously employed until May 1, 2013, or if the Board determines prior to May 1, 2013 and prior to the termination of the Grantee’s employment that the RSUs shall be nonforfeitable.
3.	Effect of Change in Control. In the event of a Change in Control prior to the RSUs becoming nonforfeitable as provided in Section 2 above, a pro rata number of the RSUs covered by this Agreement shall become nonforfeitable and payable to the Grantee, and the remaining RSUs shall be forfeited. Such pro rata number shall be based on the number of days that have elapsed between the Date of Grant and the Change in Control (as compared to the number of days between the Date of Grant and May 1, 2013). However, if the Change in Control does not constitute a “change in control” for purposes of Section 409A(a)(2)(A)(v) of the Code, then issuance of the Common Shares underlying the RSUs that become nonforfeitable upon the Change in Control (or payment of any other form of consideration into which the Common Shares underlying such RSUs may have been converted in connection with the Change in Control) will be made upon the earliest of (a) the Grantee’s “separation from service” with the Company and its Subsidiaries (determined in accordance with Section 409A(a)(2)(A)(i) of the Code) (or, if the Grantee is a “specified employee” as determined pursuant to procedures adopted by the Company in compliance with Section 409A of the Code, the date of issuance or payment shall be the first day of the seventh month after the date of the Grantee’s separation from service with

1

	the Company and its Subsidiaries within the meaning of Section 409A(a)(2)(A)(i) of the Code), (b) May 1, 2013, (c) the Grantee’s death, or (d) the Grantee’s permanent and total disability as determined under Section 4 hereof.
4.	Effect of Death or Disability. Notwithstanding Section 2 above, if the Grantee should die or become permanently and totally disabled while in the employ of the Company or any Subsidiary and at a time when the RSUs remain forfeitable, a pro rata number of the RSUs covered by this Agreement shall immediately become nonforfeitable and payable to the Grantee, and the remaining RSUs shall be forfeited. Such pro rata number shall be based on the number of days that have elapsed between the Date of Grant and the date of the Grantee’s death or disability (as compared to the number of days between the Date of Grant and May 1, 2013). The Grantee shall be considered to have become permanently and totally disabled if the Grantee has suffered a total disability within the meaning of the Company’s Long Term Disability Plan for Salaried Employees and is “disabled” within the meaning of Section 409A(a)(2)(C) of the Code.
5.	Forfeiture. In the event (i) that the Grantee’s employment shall, at a time when the RSUs remain forfeitable, terminate in a manner other than any specified in Section 4 hereof or (ii) of a finding by the Board (or a committee of the Board) that the Grantee has engaged in any fraud or intentional misconduct as described in Section 20 hereof, the Grantee shall forfeit any RSUs that have not become nonforfeitable by such Grantee at the time of such termination or finding, as applicable.
6.	Form and Time of Payment of RSUs. Except as otherwise provided for in Section 9, payment for the RSUs, after and to the extent they have become nonforfeitable, shall be made in the form of Common Shares. Payment shall be made upon the first to occur of the following: (a) the Grantee’s “separation from service” with the Company and its Subsidiaries (determined in accordance with Section 409A(a)(2)(A)(i) of the Code) (or, if the Grantee is a “specified employee” as determined pursuant to procedures adopted by the Company in compliance with Section 409A of the Code, the date of issuance or payment shall be the first day of the seventh month after the date of the Grantee’s separation from service with the Company and its Subsidiaries within the meaning of Section 409A(a)(2)(A)(i) of the Code), (b) May 1, 2013, (c) the Grantee’s death, or (d) the Grantee’s permanent and total disability as determined under Section 4 hereof. To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with the delivery of Common Shares to the Grantee or any other person under this Agreement, the number of Common Shares to be delivered to the Grantee or such other person shall be reduced (based on the Market Value per Share as of the date Common Shares are delivered to the Grantee) to provide for the minimum amount of taxes required to be withheld, with any fractional shares that would otherwise be delivered being rounded up to the next nearest whole share. The Board (or a committee of the Board) may, at its discretion, adopt any alternative method of providing for taxes to be withheld.
7.	Payment of Dividend Equivalents. From and after the Date of Grant and until the earlier of (a) the time when the RSUs become nonforfeitable and payable in accordance with the terms hereof or (b) the time when the Grantee’s right to receive Common Shares upon payment of RSUs is forfeited, on the date that the Company pays a cash dividend (if any) to

2

	holders of Common Shares generally, the Grantee shall be entitled to a number of additional whole RSUs determined by dividing (i) the product of (A) the dollar amount of the cash dividend paid per Common Share on such date and (B) the total number of RSUs (including dividend equivalents paid thereon) previously credited to the Grantee as of such date, by (ii) the Market Value per Share on such date. Such dividend equivalents (if any) shall be subject to the same terms and conditions and shall be settled or forfeited in the same manner and at the same time as the RSUs to which the dividend equivalents were credited.
8.	RSUs Nontransferable. Neither the RSUs granted hereby nor any interest therein or in the Common Shares related thereto shall be transferable other than by will or the laws of descent and distribution prior to payment.
9.	Adjustments. In the event of any change in the aggregate number of outstanding Common Shares by reason of (a) any stock dividend, extraordinary dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company, or (b) any Change in Control, merger, consolidation, spin-off, split-off, spin-out, split-up, reorganization or partial or complete liquidation, or other distribution of assets, issuance of rights or warrants to purchase securities, or (c) any other corporate transaction or event having an effect similar to any of the foregoing, then the Board (or a committee of the Board) shall adjust the number of RSUs then held by the Grantee in such manner as to prevent dilution or enlargement of the rights of the Grantee that otherwise would result from such event. Moreover, in the event of any such transaction or event, the Board (or a committee of the Board), in its discretion, may provide in substitution for any or all of the Grantee’s rights under this Agreement such alternative consideration as it may determine to be equitable in the circumstances.
10.	Compliance with Section 409A of the Code. To the extent applicable, it is intended that this Agreement and the Plan comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to the Grantee. This Agreement and the Plan shall be administered in a manner consistent with this intent. Reference to Section 409A of the Code is to Section 409A of the Internal Revenue Code of 1986, as amended, and will also include any regulations or any other formal guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.
11.	No Right to Future Grants; No Right of Employment; Extraordinary Item: In accepting the grant, Grantee acknowledges that: (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, suspended or terminated by the Company at any time, as provided in the Plan and this Award Agreement; (b) the grant of the RSUs is voluntary and occasional and does not create any contractual or other right to receive future grants of RSUs, or benefits in lieu of RSUs, even if RSUs have been granted repeatedly in the past; (c) all decisions with respect to future grants, if any, will be at the sole discretion of the Company; (d) Grantee’s participation in the Plan is voluntary; (e) the RSUs are an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company, its Affiliates and/or Subsidiaries, and which is outside the scope of Grantee’s employment contract, if any; (f) the RSUs are not

3

part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; (g) in the event that Grantee is an employee of an Affiliate or Subsidiary of the Company, the grant will not be interpreted to form an employment contract or relationship with the Company; and furthermore, the grant will not be interpreted to form an employment contract with the Affiliate or Subsidiary that is Grantee’s employer; (h) the future value of the underlying Shares is unknown and cannot be predicted with certainty; (i) no claim or entitlement to compensation or damages arises from forfeiture or termination of the RSUs or diminution in value of the RSUs or the Common Shares and Grantee irrevocably releases the Company, its Affiliates and/or its Subsidiaries from any such claim that may arise; and (j) notwithstanding any terms or conditions of the Plan to the contrary, in the event of involuntary termination of Grantee’s employment, Grantee’s right to receive RSUs and vest in RSUs under the Plan, if any, will terminate effective as of the date that Grantee is no longer actively employed and will not be extended by any notice period mandated under local law (e.g., active employment would not include a period of “garden leave” or similar period pursuant to local law); furthermore, in the event of involuntary termination of employment, Grantee’s right to vest in the RSUs after termination of employment, if any, will be measured by the date of termination of Grantee’s active employment and will not be extended by any notice period mandated under local law.

12.

Employee Data Privacy: Grantee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Grantee’s personal data as described in this document by and among, as applicable, the Company, its Affiliates and its Subsidiaries (“the Company Group”) for the exclusive purpose of implementing, administering and managing Grantee’s participation in the Plan. Grantee understands that the Company Group holds certain personal information about Grantee, including, but not limited to, Grantee’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Shares of stock or directorships held in the Company, details of all RSUs or any other entitlement to Shares of stock awarded, canceled, exercised, vested, unvested or outstanding in Grantee’s favor, for the purpose of implementing, administering and managing the Plan (“Data”). Grantee understands that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in Grantee’s country or elsewhere, and that the recipient’s country may have different data privacy laws and protections than Grantee’s country. Grantee understands that Grantee may request a list with the names and addresses of any potential recipients of the Data by contacting Grantee’s local human resources representative. Grantee authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing Grantee’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom Grantee may elect to deposit any Shares acquired. Grantee understands that Data will be held only as long as is necessary to implement, administer and manage Grantee’s participation in the Plan. Grantee understands that Grantee may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the

4

	consents herein, in any case without cost, by contacting in writing Grantee’s local human resources representative. Grantee understands, however, that refusing or withdrawing Grantee’s consent may affect Grantee’s ability to participate in the Plan. For more information on the consequences of Grantee’s refusal to consent or withdrawal of consent, Grantee understand that Grantee may contact Grantee’s local human resources representative.
13.	Continuous Employment. For purposes of this Agreement, the continuous employment of the Grantee with the Company or a Subsidiary shall not be deemed to have been interrupted, and the Grantee shall not be deemed to have ceased to be an employee of the Company or Subsidiary, by reason of (a) the transfer of the Grantee’s employment among the Company and its Subsidiaries or (b) an approved leave of absence.
14.	Relation to Plan. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. All terms used herein with initial capital letters and not otherwise defined herein that are defined in the Plan shall have the meanings assigned to them in the Plan. The Board (or a committee of the Board) acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein, have the right to determine any questions which arise in connection with the grant of the RSUs.
15.	Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, that no amendment shall adversely affect the rights of the Grantee under this Agreement without the Grantee’s consent. Notwithstanding the foregoing, the limitation requiring the consent of a Grantee to certain amendments shall not apply to any amendment that is deemed necessary by the Company to ensure compliance with Section 409A of the Code.
16.	Severability. Subject to Section 20, if any provision of this Agreement or the application of any provision hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, the remainder of this Agreement and the application of such provision to any other person or circumstances shall not be affected, and the provisions so held to be invalid, unenforceable or otherwise illegal shall be reformed to the extent (and only to the extent) necessary to make it enforceable, valid and legal.
17.	Successors and Assigns. Without limiting Section 8 hereof, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Grantee, and the successors and assigns of the Company.

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18.	Governing Law. This Agreement shall be governed by and construed in accordance with the internal substantive laws of the State of Delaware, without giving effect to any principle of law that would result in the application of the law of any other jurisdiction.
19.	The Grantee acknowledges that by clicking on the “Accept” button on the Morgan Stanley Smith Barney web page titled “Step 3: Confirm the Review/Acceptance of your Award,” the Grantee agrees to be bound by the electronic execution of this Award Agreement.
20.	In accordance with Section 20(d) of the Plan, if the Board (or a committee of the Board) has determined that any fraud or intentional misconduct by the Grantee was a significant contributing factor to the Company having to restate all or a portion of its financial statement(s), to the extent permitted by applicable law the Grantee shall: (a) return to the Company all Common Shares that the Grantee has not disposed of that were paid out pursuant to this Agreement; and (b) with respect to any Common Shares that the Grantee has disposed of that were paid out pursuant to this Agreement, pay to the Company in cash the value of such Common Shares on the date such Common Shares were paid out. The remedy specified herein shall not be exclusive, and shall be in addition to every other right or remedy at law or in equity that may be available to the Company. Notwithstanding any other provision of this Agreement or the Plan to the contrary, if this Section 20 is held invalid, unenforceable or otherwise illegal, the remainder of this Agreement shall be deemed to be unenforceable due to a failure of consideration, and the Grantee’s rights to the RSUs that would otherwise be granted under this Agreement shall be forfeited.

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     Executed in the name and on behalf of the Company at Chicago, Illinois as of the 24th day of September, 2010.

USG CORPORATION
/s/ Brian J. Cook
Name:	Brian J. Cook
Title:	Senior Vice President, Human Resources

     The undersigned Grantee hereby accepts the award of RSUs evidenced by this Restricted Stock Units Agreement on the terms and conditions set forth herein and in the Plan.

PLEASE PRINT AND KEEP A COPY FOR YOUR RECORDS.

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EX-10.8

EXHIBIT 10.8

USG CORPORATION
PERFORMANCE BASED
RESTRICTED STOCK UNITS AGREEMENT

     WHEREAS, the “Grantee” is an employee of USG Corporation, a Delaware corporation (the “Company”) or a Subsidiary;

     WHEREAS, the Board of Directors of the Company (the “Board”) has granted to the Grantee, as set forth in the Award Summary on the Morgan Stanley Smith Barney website on the “Date of Grant”, performance based Restricted Stock Units (as defined in the Plan) (the “PBRSUs”) pursuant to the Company’s Long-Term Incentive Plan, as amended (the “Plan”), subject to the terms and conditions of the Plan and the terms and conditions hereinafter set forth; and

     WHEREAS, the execution of this Performance Based Restricted Stock Units Agreement to evidence the PBRSUs (the “Agreement”) has been authorized by a resolution of the Board.

     NOW, THEREFORE, the Company and the Grantee agree as follows:

1.	Payment of PBRSUs. The PBRSUs covered by this Agreement shall become payable to the Grantee if they become nonforfeitable in accordance with Section 2 hereof.
2.	Vesting of PBRSUs. Subject to the terms and conditions of Section 3 hereof, the Grantee’s right to receive the Common Shares subject to the PBRSUs shall become nonforfeitable if, on or prior to May 1, 2013 and at a time when the Grantee shall remain employed by the Company, the Grantee shall have completed successfully the management objectives set forth in the CFO Succession Plan previously provided to the Grantee for the Grantee’s recruitment and development of a successor chief financial officer of the Company (the “CFO Succession Plan”). If the Grantee shall not have completed successfully the steps set forth in the CFO Succession Plan on or prior to May 1, 2013 and prior to the termination of the Grantee’s employment by the Company, the PBRSUs shall be forfeited. The nonforfeitability of the PBRSUs pursuant to this Section 2 shall be contingent upon a determination of the Board (or a committee of the Board) that the performance objectives described in this Section 2 have been satisfied.
3.	Forfeiture. In the event (i) that the Grantee’s employment shall terminate at a time when the PBRSUs remain forfeitable or (ii) of a finding by the Board (or a committee of the Board) that the Grantee has engaged in any fraud or intentional misconduct as described in Section 18 hereof, the Grantee shall forfeit any PBRSUs that have not become nonforfeitable by such Grantee at the time of such termination or finding, as applicable.
4.	Form and Time of Payment of PBRSUs. Except as otherwise provided for in Section 7, payment for the PBRSUs, after and to the extent they have become nonforfeitable, shall be made in the form of Common Shares. Payment shall be made within ten (10) days

	following the date that the PBRSUs become nonforfeitable pursuant to Section 2. To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with the delivery of Common Shares to the Grantee or any other person under this Agreement, the number of Common Shares to be delivered to the Grantee or such other person shall be reduced (based on the Market Value per Share as of the date the Common Shares are delivered to the Grantee) to provide for the minimum amount of taxes required to be withheld, with any fractional shares that would otherwise be delivered being rounded up to the next nearest whole share. The Board (or a committee of the Board) may, at its discretion, adopt any alternative method of providing for taxes to be withheld.
5.	Payment of Dividend Equivalents. From and after the Date of Grant and until the earlier of (a) the time when the PBRSUs become nonforfeitable and payable in accordance with the terms hereof or (b) the time when the Grantee’s right to receive Common Shares upon payment of PBRSUs is forfeited, on the date that the Company pays a cash dividend (if any) to holders of Common Shares generally, the Grantee shall be entitled to a number of additional whole PBRSUs determined by dividing (i) the product of (A) the dollar amount of the cash dividend paid per Common Share on such date and (B) the total number of PBRSUs (including dividend equivalents paid thereon) previously credited to the Grantee as of such date, by (ii) the Market Value per Share on such date. Such dividend equivalents (if any) shall be subject to the same terms and conditions and shall be settled or forfeited in the same manner and at the same time as the PBRSUs to which the dividend equivalents were credited.
6.	PBRSUs Nontransferable. Neither the PBRSUs granted hereby nor any interest therein or in the Common Shares related thereto shall be transferable other than by will or the laws of descent and distribution prior to payment.
7.	Adjustments. In the event of any change in the aggregate number of outstanding Common Shares by reason of (a) any stock dividend, extraordinary dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company, or (b) any Change in Control, merger, consolidation, spin-off, split-off, spin-out, split-up, reorganization or partial or complete liquidation, or other distribution of assets, issuance of rights or warrants to purchase securities, or (c) any other corporate transaction or event having an effect similar to any of the foregoing, then the Board (or a committee of the Board) shall adjust the number of PBRSUs then held by the Grantee in such manner as to prevent dilution or enlargement of the rights of the Grantee that otherwise would result from such event. Moreover, in the event of any such transaction or event, the Board (or a committee of the Board), in its discretion, may provide in substitution for any or all of the Grantee’s rights under this Agreement such alternative consideration as it may determine to be equitable in the circumstances.
8.	Compliance with Section 409A of the Code. To the extent applicable, it is intended that this Agreement and the Plan comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to the Grantee. This Agreement and the Plan shall be administered in a manner consistent with this intent. Reference to Section 409A of the Code is to Section 409A of the Internal Revenue Code of 1986, as amended, and will also include any regulations or any other

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	formal guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.
9.	No Right to Future Grants; No Right of Employment; Extraordinary Item: In accepting the grant, Grantee acknowledges that: (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, suspended or terminated by the Company at any time, as provided in the Plan and this Award Agreement; (b) the grant of the PBRSUs is voluntary and occasional and does not create any contractual or other right to receive future grants of PBRSUs, or benefits in lieu of PBRSUs, even if PBRSUs have been granted in the past; (c) all decisions with respect to future grants, if any, will be at the sole discretion of the Company; (d) Grantee’s participation in the Plan is voluntary; (e) the PBRSUs are an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company, its Affiliates and/or Subsidiaries, and which is outside the scope of Grantee’s employment contract, if any; (f) the PBRSUs are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; (g) in the event that Grantee is an employee of an Affiliate or Subsidiary of the Company, the grant will not be interpreted to form an employment contract or relationship with the Company; and furthermore, the grant will not be interpreted to form an employment contract with the Affiliate or Subsidiary that is Grantee’s employer; (h) the future value of the underlying Shares is unknown and cannot be predicted with certainty; (i) no claim or entitlement to compensation or damages arises from forfeiture or termination of the PBRSUs or diminution in value of the PBRSUs or the Common Shares and Grantee irrevocably releases the Company, its Affiliates and/or its Subsidiaries from any such claim that may arise; and (j) notwithstanding any terms or conditions of the Plan to the contrary, in the event of involuntary termination of Grantee’s employment, Grantee’s right to receive PBRSUs and vest in PBRSUs under the Plan, if any, will terminate effective as of the date that Grantee is no longer actively employed and will not be extended by any notice period mandated under local law (e.g., active employment would not include a period of “garden leave” or similar period pursuant to local law); furthermore, in the event of involuntary termination of employment, Grantee’s right to vest in the PBRSUs after termination of employment, if any, will be measured by the date of termination of Grantee’s active employment and will not be extended by any notice period mandated under local law.
10.	Employee Data Privacy: Grantee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Grantee’s personal data as described in this document by and among, as applicable, the Company, its Affiliates and its Subsidiaries (“the Company Group”) for the exclusive purpose of implementing, administering and managing Grantee’s participation in the Plan. Grantee understands that the Company Group holds certain personal information about Grantee, including, but not limited to, Grantee’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Shares of stock or directorships held in the Company, details of all PBRSUs or any other entitlement to Shares of stock awarded, canceled, exercised, vested, unvested or outstanding in Grantee’s favor, for the purpose of implementing, administering and

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	managing the Plan (“Data”). Grantee understands that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in Grantee’s country or elsewhere, and that the recipient’s country may have different data privacy laws and protections than Grantee’s country. Grantee understands that Grantee may request a list with the names and addresses of any potential recipients of the Data by contacting Grantee’s local human resources representative. Grantee authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing Grantee’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom Grantee may elect to deposit any Shares acquired. Grantee understands that Data will be held only as long as is necessary to implement, administer and manage Grantee’s participation in the Plan. Grantee understands that Grantee may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing Grantee’s local human resources representative. Grantee understands, however, that refusing or withdrawing Grantee’s consent may affect Grantee’s ability to participate in the Plan. For more information on the consequences of Grantee’s refusal to consent or withdrawal of consent, Grantee understand that Grantee may contact Grantee’s local human resources representative.
11.	Continuous Employment. For purposes of this Agreement, the continuous employment of the Grantee with the Company or a Subsidiary shall not be deemed to have been interrupted, and the Grantee shall not be deemed to have ceased to be an employee of the Company or Subsidiary, by reason of (a) the transfer of the Grantee’s employment among the Company and its Subsidiaries or (b) an approved leave of absence.
12.	Relation to Plan. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. All terms used herein with initial capital letters and not otherwise defined herein that are defined in the Plan shall have the meanings assigned to them in the Plan. The Board (or a committee of the Board) acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein, have the right to determine any questions which arise in connection with the grant of the PBRSUs.
13.	Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, that no amendment shall adversely affect the rights of the Grantee under this Agreement without the Grantee’s consent. Notwithstanding the foregoing, the limitation requiring the consent of a Grantee to certain amendments shall not apply to any amendment that is deemed necessary by the Company to ensure compliance with Section 409A of the Code.
14.	Severability. Subject to Section 18, if any provision of this Agreement or the application of any provision hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, the remainder of this Agreement and the application of such provision to any other person or circumstances shall not be affected, and the provisions so held to be

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	invalid, unenforceable or otherwise illegal shall be reformed to the extent (and only to the extent) necessary to make it enforceable, valid and legal.
15.	Successors and Assigns. Without limiting Section 6 hereof, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Grantee, and the successors and assigns of the Company.
16.	Governing Law. This Agreement shall be governed by and construed in accordance with the internal substantive laws of the State of Delaware, without giving effect to any principle of law that would result in the application of the law of any other jurisdiction.
17.	The Grantee acknowledges that by clicking on the “Accept” button on the Morgan Stanley Smith Barney web page titled “Step 3: Confirm the Review/Acceptance of your Award,” the Grantee agrees to be bound by the electronic execution of this Award Agreement.
20.	In accordance with Section 20(d) of the Plan, if the Board (or a committee of the Board) has determined that any fraud or intentional misconduct by the Grantee was a significant contributing factor to the Company having to restate all or a portion of its financial statement(s), to the extent permitted by applicable law the Grantee shall: (a) return to the Company all Common Shares that the Grantee has not disposed of that were paid out pursuant to this Agreement; and (b) with respect to any Common Shares that the Grantee has disposed of that were paid out pursuant to this Agreement, pay to the Company in cash the value of such Common Shares on the date such Common Shares were paid out. The remedy specified herein shall not be exclusive, and shall be in addition to every other right or remedy at law or in equity that may be available to the Company. Notwithstanding any other provision of this Agreement or the Plan to the contrary, if this Section 18 is held invalid, unenforceable or otherwise illegal, the remainder of this Agreement shall be deemed to be unenforceable due to a failure of consideration, and the Grantee’s rights to the PBRSUs that would otherwise be granted under this Agreement shall be forfeited.

     Executed in the name and on behalf of the Company at Chicago, Illinois as of the 24th day of September, 2010.

USG CORPORATION
/s/ Brian J. Cook
Name:	Brian J. Cook
Title:	Senior Vice President, Human Resources

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     The undersigned Grantee hereby accepts the award of PBRSUs evidenced by this Restricted Stock Units Agreement on the terms and conditions set forth herein and in the Plan.

PLEASE PRINT AND KEEP A COPY FOR YOUR RECORDS.

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EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, William C. Foote, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of USG Corporation (the “Corporation”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Corporation as of, and for, the periods presented in this report;
4.	The Corporation’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act rules 13a-15(f) and 15(d)-15(f)) for the Corporation and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Corporation, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the Corporation’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the Corporation’s internal control over financial reporting that occurred during the Corporation’s most recent fiscal quarter (the Corporation’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Corporation’s internal control over financial reporting; and

5. The Corporation’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Corporation’s auditors and the audit committee of the Corporation’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Corporation’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Corporation’s internal control over financial reporting.

October 29, 2010	/s/ William C. Foote
	William C. Foote
	Chairman and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Richard H. Fleming, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of USG Corporation (the “Corporation”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Corporation as of, and for, the periods presented in this report;
4.	The Corporation’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act rules 13a-15(f) and 15(d)-15(f)) for the Corporation and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Corporation, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the Corporation’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the Corporation’s internal control over financial reporting that occurred during the Corporation’s most recent fiscal quarter (the Corporation’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Corporation’s internal control over financial reporting; and

5. The Corporation’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Corporation’s auditors and the audit committee of the Corporation’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Corporation’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Corporation’s internal control over financial reporting.

October 29, 2010	/s/ Richard H. Fleming
	Richard H. Fleming
	Executive Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

SECTION 1350 CERTIFICATIONS

In connection with the Quarterly Report of USG Corporation (the “Corporation”) on Form 10-Q, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William C. Foote, Chairman and Chief Executive Officer of the Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

October 29, 2010	/s/ William C. Foote
	William C. Foote
	Chairman and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

SECTION 1350 CERTIFICATIONS

In connection with the Quarterly Report of USG Corporation (the “Corporation”) on Form 10-Q, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard H. Fleming, Executive Vice President and Chief Financial Officer of the Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

October 29, 2010	/s/ Richard H. Fleming
	Richard H. Fleming
	Executive Vice President and Chief Financial Officer