8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  June 9, 2008 (June  6, 2008)

GEORGIA GULF CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-09753	58-1563799
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
115 Perimeter Center Place, Suite 460, Atlanta, GA		30346
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code:     (770) 395 - 4500

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))

Item 8.01 Other Events.

Georgia Gulf Corporation (the “Company”) has received notice and a letter of transmittal (collectively, the “Notice”) from persons (“Claimants”) claiming to own at least 25% of the Company’s 7 1/8% notes due 2013 (the “Notes”) which were issued under an indenture dated December 3, 2003 (the “Indenture”) between the Company and U.S. Bank National Association (as successor to SunTrust Bank, the “Trustee”).  The Notice asserts that borrowings under the Company’s senior credit facility resulted in the incurrence of debt obligations in excess of the amount permitted under Section 3.3 of the Indenture.  The Company has sent a response letter dated June 8, 2008 (the “Response Letter”).  Copies of the  Notice and the Response Letter are attached hereto as Exhibits 99.1, and 99.2, respectively, and incorporated herein by reference.

The Company believes that all existing indebtedness was incurred in compliance with the provisions of the Indenture.  As more fully set forth in the Response Letter, the Company has carefully considered the allegations set forth in the Notice and has concluded that no default has occurred under the Indenture and the Company has been, and continues to be, in full compliance with all of its obligations thereunder. 

The Company has also filed a complaint in the Court of Chancery of the State of Delaware seeking to enjoin the Claimants and seeking a declaratory judgment to the effect that the Company is not in default under Section 3.3 of the Indenture.  The Company has asked the Delaware Court of Chancery to expedite review of the case.

While the Company disputes the claims advanced in the Notice and expressly denies that the Claimants have a valid basis for declaring a default under the Indenture or seeking acceleration of the amounts owed on the Notes, the Company describes below the risk factors associated with claims made in the Notice.

The default provisions of the Indenture provide that if the Company has incurred indebtedness other than in compliance with the Indenture and thereafter receives written notice of default from either the Trustee or holders representing 25% or more of the aggregate principal amount of the Notes then outstanding, the failure of the Company to cure such default within 30 days after receipt by the Company of such written notice would constitute an “Event of Default” under the Indenture.  If an Event of Default occurs, the Trustee, or the holders of at least 25% of the Notes, may, by a further notice, declare all principal, premium, if any, and accrued and unpaid interest on the Notes to be immediately due and payable.

If such an Event of Default occurs and is continuing, and the Trustee or holders representing 25% or more of the aggregate principal amount of the Notes then outstanding declare all principal, premium, if any, and accrued and unpaid interest on the Notes to be immediately due and payable, then such declaration could lead to the occurrence of an “Event of Default” under each of (i) the Company’s indenture, dated October 3, 2006, relating to its unsecured 9.5% senior notes and (ii) the Company’s indenture, dated October 3, 2006, relating to its unsecured 10.75% senior subordinated notes.  Upon and after the occurrence of any such Event of Default, all principal, premium, if any, and accrued interest on the respective notes issued under each indenture could be declared immediately due and payable by the action of the applicable trustee or the applicable holders of at least 25% of the respective notes.

In addition, an Event of Default under the Indenture could lead to the declaration of an “Event of Default” under the Company’s Credit Agreement, dated October 3, 2006, as amended, (the “Credit Agreement”).  Upon an Event of Default under the Credit Agreement, the agent may, with the consent of the lenders holding more than half of the loans, or is required, at the request of lenders holding more than half of the loans, to declare the commitments to make further loans terminated, require cash collateral for letter of credit obligations, declare the loans to be immediately due and payable and/or exercise any other available remedies.

An Event of Default under the Indenture could lead to the occurrence of a Liquidation Event under the Company’s securitization program.  Upon a Liquidation Event, either Wachovia Bank, National Association (“Wachovia”) or Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch (“BTM”) (in their capacities as purchaser agents) may declare the “Purchase Termination Date” to have occurred and the “Liquidation Period” to have commenced.  From the Purchase Termination Date, the related purchasers will not be required to purchase any additional receivables, no additional payments may be made on the related subordinated note, and, effectively, all of the collections on the receivables will be diverted to pay amounts owed to the related purchasers and/or their agents under the securitization facility.  This would, effectively, terminate the Company’s receivables financing.

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Item 9.01	Financial Statements and Exhibits.
(d)	Exhibits.

Number	Exhibit
99.1	Notice of Default and Letter of Transmittal
99.2	Letter of Response

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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 hereunto duly authorized.

GEORGIA GULF CORPORATION
By:	/s/ Joel I. Beerman
Name:  Joel I. Beerman
Title:   Vice President, General Counsel and Secretary

Date:  June 9, 2008

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EX-99.1

Exhibit 99.1

June 6, 2008

Via Email, Facsimile and FedEx

Georgia Gulf Corporation
and
Georgia Gulf Corporation, on behalf of each of the Subsidiary Guarantors
400 Perimeter Center Place

Suite 595

Atlanta, GA 30346

Attention: Joel I. Beerman, Vice President, General Counsel and Secretary

Re:	NOTICE OF DEFAULT
	Indenture, dated as of December 3, 2003, by and among Georgia Gulf Corporation (the “Company”), the Subsidiary Guarantors party thereto, and US Bank, as Trustee (the “Indenture”)

Ladies and Gentlemen:

Reference is made to Sections 3.3 and 6.1 of the Indenture and to the attached transmittal letter that more fully sets forth the basis on which this Notice is delivered. Capitalized terms used herein and not defined shall have the meanings ascribed to them in the Indenture.

The undersigned represents either that (i) it is a Holder of Notes in the principal amount indicated below or (ii) it is the investment manager with discretionary authority in respect of the Notes identified below that are held by the Holder identified below.

This notice, from Holders who hold at least 25% in aggregate principal amount of Notes outstanding, shall constitute a written “Notice of Default” of the type referred to in Section 6.1 with respect to the Company’s failure to comply with Section 3.3 of the Indenture, as more fully described in the attached letter.

This notice is without prejudice to the right (i) to provide notice of other Defaults or Events of Default in respect of the matters described herein, (ii) to provide notice of any other Defaults or Events of Default that may exist under the Indenture, (iii) to pursue any and all rights in respect of the Notes, or (iv) to pursue any other rights or remedies against the Company and each Subsidiary Guarantor that may exist in law or in equity.

[Remainder of page intentionally blank; next page is signature page]

Sincerely,

[IF SIGNED BY HOLDER]

Holder:
By:
	Name:
	Its:
Principal Amount of Securities Held:
Held in DTC Participant Code:

[IF SIGNED BY INVESTMENT MANAGER]

Investment Manager    Sandelman Partners, LP

By:	/s/ Peter Bio
		Name: Peter Bio
		Its: Head of Capital Structure

In its capacity as investment manager with discretionary authority in respect of:

Holder:   SANDELMAN PARTNERS MULTI-STRATEGY MASTER FUND, LTD.

Holder:

Principal Amount of Securities Held:   $40,871,000.00

Held in DTC Participant Code:   573

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  [IF SIGNED BY INVESTMENT MANAGER]

Investment Manager    Sandelman Partners, LP

By:	/s/ Peter Bio
		Name: Peter Bio
		Its: Head of Capital Structure

In its capacity as investment manager with discretionary authority in respect of:

Holder:   SANDELMAN PARTNERS EVENT-DRIVEN MASTER FUND, LP

Principal Amount of Securities Held:   $3,314,000.00

Held in DTC Participant Code:   050

Cc:	Jones Day LLP, Attn:	John Zamer
		Greg Gorospe
Courtesy cc (via e-mail):
	US Bank
	2 Midtown Plaza
	1349 West Peachtree, Suite 1050
	Atlanta, GA 30309
	Attn: Corporate Trust Division
	Powell, Goldstein, Frazer & Murphy LLP
	191 Peachtree Street, NE
	16th Floor
	Atlanta, GA 30303
	Attn: Gregory H. Worthy, Esq.

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June 6, 2008

Via Email, Facsimile and FedEx

Georgia Gulf Corporation

and

Georgia Gulf Corporation, on behalf of each of the Subsidiary Guarantors
115 Perimeter Center Place

Suite 595

Atlanta, GA 30346

Attention: Joel I. Beerman, Vice President, General Counsel and Secretary

Re:	ATTACHED NOTICE OF DEFAULT
	Indenture, dated as of December 3, 2003, by and among Georgia Gulf Corporation (the “Company”), the Subsidiary Guarantors party thereto, and US Bank, as Trustee (the “indenture”)

Ladies and Gentlemen:

Accompanying this letter is a Notice of Default (the “Default Notice”) we are delivering to you today, which Default Notice refers to the Company’s failure to comply with Section 3.3 of the Indenture (the “Section 3.3 Default”). The purpose of this letter is to provide context both for our belief that the Section 3.3 Default has occurred and for the series of events that has led us to conclude that it is necessary for us to issue the Default Notice in order to protect our rights and remedies as holders of Notes issued pursuant to the Indenture. Capitalized terms used herein and not defined shall have the meanings ascribed to them in the Indenture. Information discussed in this letter is based upon publicly available information filed with the Securities and Exchange Commission and other public disclosure provided by the Company, including on its most recent quarterly earnings call.

Relevant History

The Company’s Form 10-Q for the quarter ended March 31, 2008 reports on page 34 that, as of the end of the quarter, there was outstanding under the Senior Credit Agreement $423.2 million in principal amount of term loan Indebtedness, $50.0 million in principal amount of revolver Indebtedness and $64.6 million in face amount of letters of credit outstanding. Additionally, it is likely that the Company incurred incremental Indebtedness from time to time under its Senior Credit Agreement since March 31, 2008 in order, among other things, to make approximately $35.0 million in April 2008 interest payments on its 9.5% Notes and 10.75% Notes. The Company has further disclosed that it has, since the date of the acquisition of Royal Group Technologies Limited (“Royal Group”), applied Asset Disposition proceeds in the approximate amount of $361 million to repay Indebtedness under the Senior Credit Agreement.

In light of the foregoing, we informed you by email sent on May 8, 2008 of our belief that the Section 3.3 Default had occurred.

On May 12, 2008, we received an email from the Company denying the occurrence of the Section 3.3 Default. The Company’s counsel, Jones Day LLP (“Jones Day”), further responded to our email by telephoning our counsel, Bracewell & Giuliani LLP (“Bracewell”), on May 13, 2008. Neither the Company nor Jones Day disputed any of the facts or our analysis regarding the level of Indebtedness outstanding but instead relied on technical readings of the Indenture in arguing that the Company was not in default.

By letter dated May 15, 2008, Bracwell set forth in detail our factual and contractual analysis refuting the Company’s position and reasserting the existence of the Section 3.3 Default. On May 21, 2008, Jones Day sent a letter to Bracewell which expanded the same legal arguments first outlined in the telephone conversation of the prior week, asserting again that Jones Day did not believe the Company was in default. Our counsel informed Jones Day that we continued to find these arguments to be unpersuasive and contrary to both the plain language of the Indenture and to the generally accepted interpretation in the high yield market of similar provisions in other indentures.

On May 23, 2008, we were telephoned by a banker at Banc of America Securities (“Banc of America”), the administrative agent on the Company’s Senior Credit Agreement, who indicated that the Company had asked him to contact us. We subsequently met with him and a colleague on May 27, 2008. In that meeting, we emphasized, as we had previously communicated to the Company and Jones Day, that we were willing to engage in a constructive dialogue and to that end we raised several specific proposals for resolving the Default. At that meeting, the Banc of America representatives indicated that, although they were not authorized to make any specific proposals on the Company’s behalf, they were considering, among other things, exploring a refinancing of the Company’s Senior Credit Agreement and could possibly help resolve our Default in connection with such a refinancing. In the same meeting, the Banc of America representatives asked that we refrain from taking any action or pursuing any remedies while it and the Company considered various alternatives. We responded that we would consider forbearing if the Company were willing to engage in constructive negotiations that would result in a near-term consensual resolution of the Default.

On June 2, 2008, Jones Day informed Bracewell that the Board of Directors of the Company would meet the following day to discuss the Default and again requested we take no action before that time. On June 4, 2008, Jones Day informed Bracewell that the Board of Directors would not pursue any of the possible solutions we had raised with Banc of America and that no alternative proposals from the Company would be forthcoming.

In sum, since we first contacted the Company more than four weeks ago regarding our concerns over the Section 3.3 Default, the Company (either directly or through its advisors) has failed to engage in a meaningful negotiation with us or taken any concrete step to address our concerns other than to repeatedly request that we refrain from taking any further action.

Summary of Relevant Indenture Provisions

Section 3.3(a) of the Indenture provides the general limitation that the Company may incur Indebtedness only for so long as its Consolidated Coverage Ratio is at least 2.00 to 1.00 (the “Section 3.3(a)

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Limitation”), a condition which the Company has been unable to satisfy since at least the second half of 2007.

Section 3.3(b) of the Indenture sets forth certain limited exceptions to the Section 3.3(a) Limitation (the “Section 3.3(b) Debt Baskets”), including, as relevant here, “(1) Indebtedness Incurred pursuant to the Senior Credit Agreement in an aggregate principal amount of up to $525 million less the aggregate principal amount of all principal repayments made with the proceeds of Asset Dispositions” and “(10) Indebtedness which will not exceed $75 million outstanding.”

Of the $525 million basket provided under Section 3.3(b)(1), $200 million was outstanding under the Company’s Senior Credit Agreement on the date of the Indenture, which, under Section 3.3(d) of the Indenture, was “deemed initially Incurred [pursuant to the Senior Credit Agreement] on the Issue Date under clause (1) of Section 3.3(b) and not Section 3.3(a) or clause (4) of Section 3.3(b).”

The Section 3.3 Default Discussion

Because the Company was (and remains) unable to incur Indebtedness as a result of the Section 3.3(a) Limitation, the Company was able only to incur incremental Indebtedness in general under the Section 3.3(b) Debt Baskets. Specifically, the Company was only able to incur incremental Indebtedness under the Senior Credit Agreement, including incremental revolver borrowings or any new or renewed letters of credit, pursuant either to Section 3.3(b)(1) or to Section 3.3(b)(10), if available. The calculation of what has been incurred and what is available is as follows:

· The original $525 million level of debt incurrence permitted under Section 3.3(b)(1) of the Indenture has been reduced to the floor of $175 million as a result of repayments of the term debt portion of the Senior Credit Agreement from Asset Disposition proceeds received since the completion of the Royal Group acquisition in the approximate amount of $361 million.

· Additionally, the Company has the ability to incur $75 million of Indebtedness pursuant to Section 3.3(b)(10) of the Indenture.

· Combining the foregoing, the Company had the ability to incur incremental Indebtedness of no more than $250 million.

· Pursuant to Section 3.3(d)(2) of the Indenture, the $200 million of Indebtedness outstanding under the Senior Credit Agreement on the date of the Indenture (which amount remains outstanding under the current Senior Credit Agreement) is deemed to have been incurred pursuant to Section 3.3(b)(1). After deducting this amount from the $250 million noted above, the Company was left with $50 million of incremental debt incurrence capacity.

· The Company has disclosed $30 million of incremental revolver borrowings for the period beginning January 1, 2008 and ending March 31, 2008, and has likely made additional borrowings that were necessary from time to time, in order, among other things, to make approximately $35 million in April 2008 interest payments on its 9.5% notes and 10.75% notes

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Based on the foregoing and on the Company’s public disclosures, the Company is not in compliance with Section 3.3 of the Indenture because it has exceeded all availability under the Section 3.3(b) Debt Baskets at a time when the Section 3.3(a) Limitation was in effect. This Default is non-curable. Furthermore, the Company may be continuing to incur yet more incremental Indebtedness under the revolving portion of the Senior Credit Agreement. Finally, we note that the Company’s recent filings under the Exchange Act materially overstate the Company’s available borrowing capacity by failing to take into consideration the limitations imposed by Section 3.3 of the Indenture. Because they have overstated the Company’s borrowing capacity, those filings contain both material misstatements and material omissions.

Conclusion

As discussed above, due to the Company’s unwillingness to engage meaningfully with us or to provide us with appropriate assurances that the present Default will be timely resolved, we are compelled to take action in the form of the Default Notice before the situation deteriorates further. Even under these circumstances, however, we remain willing to engage in a constructive dialogue with the Company while the “grace period” runs with respect to the Section 3.3 Default. Please understand, however, that we issued the Default Notice because we are prepared to pursue all of the rights and remedies available to us upon the expiry of the grace period.

Sincerely,

/s/ Peter Bio

Peter Bio

Head of Capital Structure
Sandelman Partners, LP

Cc:	Jones Day LLP, Attn:	John Zamer
		Greg Gorospe
Courtesy cc (via e-mail):
	US Bank
	2 Midtown Plaza
	1349 West Peachtree, Suite 1050
	Atlanta, GA 30309
	Attn: Corporate Trust Division
	Powell, Goldstein, Frazer & Murphy LLP
	191 Peachtree Street, NE
	16th Floor
	Atlanta, GA 30303
	Attn: Gregory H. Worthy. Esq.

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EX-99.2

Exhibit 99.2

GEORGIA GULF CORPORATION

115 Perimeter Center Place

Suite 460

Atlanta, Georgia  30346

June 8, 2008

VIA U.S. MAIL and EMAIL

Sandelman Partners, LP

500 Park Avenue

3^rd Floor

New York, New York  10022

Attn.: Mr. Peter Bio

Re:Indenture dated as of December 3, 2003, as amended, among Georgia Gulf Corporation (the “Company”), the Subsidiary Guarantors party thereto, and U.S. Bank National Association, as successor to SunTrust Bank, as Trustee (the “Indenture”)

Ladies and Gentlemen:

The Company is in receipt of your notice and letter of transmittal, each dated June 6, 2008 (collectively, the “Notice”), allegedly constituting a Notice of Default pursuant to Section 6.1(4) of the Indenture.  Capitalized terms not otherwise defined are used in this letter as defined in the Indenture.

Response

As we have discussed with you and your counsel on a number of occasions, no Default has occurred under the Indenture and the Company has been, and continues to be, in full compliance with all of its obligations thereunder.  We note that we have previously provided an explanation to you through your counsel in a conference call held with our lawyers on May 13, 2008.  Further, the Company provided a detailed statement of its position that it was not in Default, as you allege, in a letter dated May 21, 2008 from our lawyers.

You contend that borrowings made by the Company in the ordinary course and outstanding under its senior credit facility are in excess of the amount permitted under Section 3.3 of the Indenture which imposes certain limits on debt incurrence.  Specifically, you assert that (i) the $200 million borrowed in 2003 as a term loan by the Company on the date of the Indenture, and subsequently retired in full, nevertheless effectively operates to permanently decrease a “debt incurrence basket” provided in Section 3.3(b)(1) of the Indenture for incurrences of debt under the Company’s senior credit agreement (the “Senior Credit Ag’t Basket”), although no plausible reading of the Indenture supports such a view; and (ii) the Company’s principal repayment of term debt with proceeds from the asset sales made in the last two years also reduces available capacity under the Senior Credit Ag’t Basket, even though an

express condition to such a reduction has, in fact, not been met.  To support a claim of Default, you must be correct as to both of these assertions, though neither has any merit whatsoever.

The Company disputes the claims advanced in your Notice and expressly denies that you have a valid basis for declaring a Default under the Indenture or seeking acceleration of the amounts owed on the Notes.

Issue #1

Relative to the first issue you raise, Section 3.3(d)(2) of the Indenture provides: “[A]ll Indebtedness outstanding on the date of the Indenture under the Senior Credit Agreement shall be deemed initially Incurred [under the Senior Credit Ag’t Basket]” (emphasis supplied).  By its plain terms, Section 3.3(d)(2) merely requires that certain indebtedness – in this case, the $200 million term loan outstanding on the date the Company entered into the Indenture be included within the Senior Credit Ag’t Basket.

You assert that, because the $200 million term loan was outstanding on the date of the Indenture, and notwithstanding the fact that such debt was retired in full by late 2004, the first $200 million of any and all future indebtedness incurred under a Senior Credit Agreement must also be included in the Senior Credit Ag’t Basket, thereby automatically (and forever) reducing the Company’s debt incurrence capacity under that basket by $200 million, effectively rendering it a $325 million basket.

Once the $200 million term loan was no longer outstanding, it no longer applied against the Senior Credit Ag’t Basket, and the Company’s debt incurrence capacity under the Senior Credit Ag’t Basket was fully restored.  Your assertion – i.e., that the Company’s debt incurrence capacity under the Senior Credit Ag’t Basket has been effectively reduced by $200 million to the extent the Company has $200 million of borrowings under the Senior Credit Agreement, even if such new debt could have been (and was) incurred under the 2 to 1 “consolidated coverage ratio” test of Section 3.3(a) of the Indenture – is contrary to the express words, and logic, of Section 3.3(d)(2).

Simply put, the Indenture does not require that any debt incurred under any Senior Credit Agreement after the date of the Indenture (i.e., December 3, 2003) be placed in the Senior Credit Ag’t Basket; instead, the Indenture merely requires that any such debt incurred “on the date of the Indenture” be placed in that basket.  Later debt incurrences (i.e., those occurring after the date of the Indenture), whether under the Senior Credit Agreement or otherwise may, in the Company’s discretion, be classified under the 2 to 1 consolidated coverage ratio test or placed in any other available basket.  Section 3.3(d)(1) (which you ignore), provides – without limitation – that the Company expressly retains sole discretion as to whether amounts borrowed under the Senior Credit Agreement should be incurred under the 2 to 1 consolidated coverage ratio test, the Senior Credit Ag’t Basket or any other available basket:

[I]n the event that Indebtedness meets the criteria of more than one of the types of Indebtedness described in Section 3.3(a) or (b), the Company, in its sole discretion, will classify such item of Indebtedness on the date of Incurrence and

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only be required to include the amount and type of such Indebtedness in one of such clauses.

Nowhere in Section 3.3 is the Company’s discretion under Section 3.3(d)(1) limited, and nothing in Section 3.3 states that future indebtedness incurred under a Senior Credit Agreement or otherwise must be applied against the Senior Credit Ag’t Basket in the manner you advocate.

Issue #2

You also assert that repayment of the Company’s term debt with proceeds of asset dispositions operates to reduce the Senior Credit Ag’t Basket.  You are again incorrect.

Section 3.3(b)(1) states (emphasis supplied):

Section 3.3(a) will not prohibit the Incurrence of the following Indebtedness: (1) Indebtedness incurred pursuant to the Senior Credit Agreement in an aggregate principal amount of up to $525 million less the aggregate principal amount of all principal repayments made with the proceeds of Asset Dispositions permanently reducing the commitments thereunder . . .

By its plain terms, Section 3.3(b)(1) requires principal repayments to be applied against the Senior Credit Ag’t Basket if such principal repayments (i) are derived from Asset Dispositions, and (ii) cause a permanent reduction of a commitment “thereunder” (i.e., under the Senior Credit Agreement).  Unless both of these elements are met, such principal repayments do not reduce the debt incurrence capacity under the Senior Credit Ag’t Basket.

Your Notice and other communications, however, do not address the explicit causal requirement contained in Section 3.3(b)(1) – i.e., that a principal repayment derived from proceeds of an Asset Disposition must also cause the permanent reduction of a commitment under a Senior Credit Agreement.

The Company, like many businesses, generally relies upon two forms of debt – term debt and revolving debt.  Term debt is a fixed sum borrowed on a certain date and repaid over time with interest.  Revolving debt, by contrast, is a fixed sum made available for borrowing over a certain period, which can be borrowed, repaid, and re-borrowed up to the limit of the lender’s “commitment.”  It is axiomatic that there is no “commitment” associated with an outstanding term loan, while there is a “commitment” associated with revolving debt.

Because principal prepayments made against term debt do not “permanently reduc[e] a commitment,” Section 3.3(b)(1) does not require that such payments reduce the available capacity under the Senior Credit Ag’t  Basket.

Your position concerning the operation of Section 3.3(b)(1) also conflicts with Section 3.6(a) of the Indenture, which requires the Company, in connection with any prepayment, repayment, or purchase of Indebtedness made with the proceeds of any Asset Disposition, to “retire such Indebtedness and . . . cause the related commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased[.]”

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The modifier “if any” in the phrase “cause the related commitment (if any) to be permanently reduced” demonstrates that the parties to the Indenture understood that principal repayments are of two types: those that reduce commitments (i.e., repayment of a revolver under these circumstances) and those that do not (i.e., repayment of a term loan).

Because the principal prepayments of the Company’s term debt at issue did not cause the permanent reduction of a commitment, there was no reduction thereby in the debt incurrence capacity available under the Senior Credit Ag’t Basket.

Conclusion

No Default exists under the Indenture.  Showing incredible flexibility, and ignoring basic rules of contract construction, under Issue #1, you make up a non-existent term; and as to Issue #2, you ignore a term expressly provided in the Indenture.  Notably, your Notice and other communications fail to dispute either of these points.

Further, we reserve our right to determine your assertion that you are a registered Holder under the Indenture, holding the requisite amount of Notes that would permit you to issue the Notice, and that your Notice was properly given under the Indenture.  Also, we do not provide all of our supporting arguments in this letter, and we reserve our right to do so without prejudice by  reason of this response.

Finally, as we have told you previously, Georgia Gulf intends to vigorously defend its interests relative to your meritless claim.  To this end, contemporaneously with this response, Georgia Gulf has filed a lawsuit against you in a Delaware court seeking (i) an injunction (a) requiring you to withdraw your Notice; (b) enjoining you and/or the Trustee from asserting that an Event of Default had occurred under the circumstances set forth in the Notice; and (c) preventing you and/or the Trustee from declaring an acceleration of the Notes under the circumstances set forth in the Notice; and (ii) a declaration that the Company is not in default under Section 3.3 of the Indenture as you allege in your Notice.  Also, we assume that you will cooperate in permitting, and will not take steps to frustrate or delay, an expedited resolution by this court of our dispute.

Sincerely,

GEORGIA GULF CORPORATION

/s/ Joel I. Beerman

Joel I. Beerman

Vice President, General Counsel and Secretary

cc:Robert T. Carey, Bracewell & Giuliani (via email)
John E. Zamer, Jones Day (via email)

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