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KIRBY CORPORATION

THE BANKS NAMED HEREIN,

and
 
JPMORGAN CHASE BANK, N.A.,
as Funds Administrator, Issuer and Administrative Agent

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$250,000,000
Amended and Restated Credit Agreement

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June 14, 2006

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WELLS FARGO BANK, N.A. and BANK OF AMERICA, N.A.,
as Syndication Agents
 

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.
and
DnB NOR BANK ASA,
as Documentation Agents
 

J.P. MORGAN SECURITIES, INC.
and
BANC OF AMERICA SECURITIES LLC,
as Co-Lead Arrangers and Joint Bookrunners
 

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TABLE OF CONTENTS
 
ARTICLE I. DEFINITIONS, ETC.
1
   
 
SECTION 1.01
CERTAIN DEFINED TERMS
1
SECTION 1.02
ACCOUNTING TERMS
2
SECTION 1.03
COMPUTATION OF TIME PERIODS
2
SECTION 1.04
REFERENCES, ETC
2
 
 
 
ARTICLE II. COMMITMENTS AND TERMS OF CREDIT
2
   
 
SECTION 2.01
COMMITMENTS; LOANS AND BORROWINGS
2
SECTION 2.02
REVOLVING BORROWING PROCEDURES; CONVERSIONS
3
SECTION 2.03
SWINGLINE LOANS
4
SECTION 2.04
THE NOTES
5
SECTION 2.05
REDUCTION OF THE COMMITMENTS
5
SECTION 2.06
REPAYMENT OF LOANS
6
SECTION 2.07
INTEREST ACCRUAL, PAYMENTS, ETC
6
SECTION 2.08
PREPAYMENTS
8
SECTION 2.09
PAYMENTS AND COMPUTATIONS
9
SECTION 2.10
FEES
10
SECTION 2.11
SETOFF, COUNTERCLAIMS AND TAXES
11
SECTION 2.12
FUNDING LOSSES
13
SECTION 2.13
CHANGE OF LAW
13
SECTION 2.14
INCREASED COSTS
14
SECTION 2.15
SUBSTITUTION OF BANKS
15
SECTION 2.16
LETTERS OF CREDIT.
16
SECTION 2.17
INCREASE OF COMMITMENTS.
18
   
 
ARTICLE III. CONDITIONS OF CREDIT
19
   
 
SECTION 3.01
CONDITIONS PRECEDENT TO THE INITIAL BORROWING
19
SECTION 3.02
CONDITIONS PRECEDENT TO ALL BORROWINGS
21
   
 
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
21
   
 
SECTION 4.01
CORPORATE EXISTENCE; ETC
21
SECTION 4.02
CORPORATE AUTHORITY; BINDING OBLIGATIONS
22
SECTION 4.03
NO CONFLICT
22
SECTION 4.04
NO CONSENT
22
SECTION 4.05
NO DEFAULTS OR VIOLATIONS OF LAW
22
SECTION 4.06
FINANCIAL POSITION
23
SECTION 4.07
LITIGATION
23
SECTION 4.08
USE OF PROCEEDS
23
SECTION 4.09
GOVERNMENTAL REGULATION
24
SECTION 4.10
DISCLOSURE
24
SECTION 4.11
ERISA
24
SECTION 4.12
PAYMENT OF TAXES
24
SECTION 4.13
PROPERTIES; TITLE AND LIENS
24
SECTION 4.14
PARI PASSU RANKING
24
SECTION 4.15
ENVIRONMENTAL MATTERS
25
SECTION 4.16
NO UNDISCLOSED LIABILITIES
25
SECTION 4.17
LABOR MATTERS
25
   
 
ARTICLE V. AFFIRMATIVE COVENANTS
26
   
 
SECTION 5.01
REPORTING REQUIREMENTS
26
SECTION 5.02
TAXES; CLAIMS
28

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SECTION 5.03
COMPLIANCE WITH LAWS AND AGREEMENTS
28
SECTION 5.04
INSURANCE
28
SECTION 5.05
CORPORATE EXISTENCE; ETC
29
SECTION 5.06
INSPECTIONS; ETC
29
SECTION 5.07
MAINTENANCE OF PROPERTIES
29
SECTION 5.08
ACCOUNTING SYSTEMS; ETC
29
SECTION 5.09
USE OF LOAN PROCEEDS
29
SECTION 5.10
FURTHER ASSURANCES IN GENERAL
29
   
 
ARTICLE VI. NEGATIVE COVENANTS
30
   
 
SECTION 6.01
FINANCIAL COVENANTS
30
SECTION 6.02
RESTRICTIONS ON DEBT
30
SECTION 6.03
RESTRICTION ON LIENS
31
SECTION 6.04
CONSOLIDATED SUBSIDIARY DISPOSITIONS
32
SECTION 6.05
RESTRICTIONS ON CONSOLIDATED SUBSIDIARY DISTRIBUTIONS
32
SECTION 6.06
MERGERS AND ACQUISITIONS
32
SECTION 6.07
RESTRICTED INVESTMENTS
33
SECTION 6.08
LINES OF BUSINESS
33
SECTION 6.09
TRANSACTIONS WITH AFFILIATES
33
SECTION 6.10
RESTRICTED PAYMENTS
33
   
 
ARTICLE VII. DEFAULT
34
   
 
SECTION 7.01
EVENTS OF DEFAULT
34
SECTION 7.02
SETOFF IN EVENT OF DEFAULT
36
SECTION 7.03
NO WAIVER; REMEDIES
36
SECTION 7.04
NO PRESERVATION OF SECURITY FOR UNMATURED REIMBURSEMENT OBLIGATIONS
36
   
 
ARTICLE VIII. THE AGENTS AND THE FUNDS ADMINISTRATOR
37
   
 
SECTION 8.01
AUTHORIZATION AND ACTION
37
SECTION 8.02
RELIANCE, ETC
37
SECTION 8.03
CHASE AND AFFILIATES
38
SECTION 8.04
BANK CREDIT DECISION
39
SECTION 8.05
INDEMNIFICATION
39
SECTION 8.06
EMPLOYEES OF THE AGENT, ETC
40
SECTION 8.07
SUCCESSOR AGENT
40
SECTION 8.08
SUCCESSOR FUNDS ADMINISTRATOR
40
SECTION 8.09
NOTICE OF DEFAULT
41
SECTION 8.10
EXECUTION OF LOAN DOCUMENTS
41
SECTION 8.11
DUTIES OF SYNDICATION AGENT AND DOCUMENTATION AGENT
41
 
 
 
ARTICLE IX. MISCELLANEOUS
41
   
 
SECTION 9.01
AMENDMENTS, ETC
41
SECTION 9.02
PARTICIPATION AGREEMENTS AND ASSIGNMENTS
42
SECTION 9.03
NOTICES
45
SECTION 9.04
COSTS AND EXPENSES
46
SECTION 9.05
SUCCESSORS AND ASSIGNS
46
SECTION 9.06
INDEPENDENCE OF COVENANTS
46
SECTION 9.07
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
46
SECTION 9.08
SEPARABILITY
47
SECTION 9.09
CAPTIONS
47
SECTION 9.10
LIMITATION BY LAW
47
SECTION 9.11
COUNTERPARTS
47
SECTION 9.12
GOVERNING LAW
47
SECTION 9.13
LIMITATION ON INTEREST
47
SECTION 9.14
INDEMNIFICATION
48
SECTION 9.15
SUBMISSION TO JURISDICTION
49

 
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SECTION 9.16
WAIVER OF JURY TRIAL
49
SECTION 9.17
FINAL AGREEMENT OF THE PARTIES
49
SECTION 9.18
PATRIOT ACT
49
 
   

EXHIBIT 2.02(A)
FORM OF BORROWING REQUEST
 
EXHIBIT 2.02(C)
FORM OF CONVERSION NOTICE
 
EXHIBIT 2.04
FORM OF NOTE
 
EXHIBIT 2.17(A)
FORM OF COMMITMENT INCREASE AGREEMENT
 
EXHIBIT 2.17(B)
FORM OF NEW BANK AGREEMENT
 
EXHIBIT 9.02
FORM OF ASSIGNMENT AND ACCEPTANCE
 
 
   
SCHEDULE 2.01
ALLOCATION AND BANK NAMES
 
SCHEDULE 4.01
CONSOLIDATED SUBSIDIARIES (PART A) AND EXCLUDED AFFILIATES (PART B)
 
SCHEDULE 4.16
LIABILITIES
 

 
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AMENDED AND RESTATED CREDIT AGREEMENT
 
THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 14, 2006 (this
“Agreement”), is among KIRBY CORPORATION, a Nevada corporation (the “Borrower”),
the banks named on the signature pages hereto (together with their respective
successors and assigns in such capacity, the “Banks”), JPMORGAN CHASE BANK,
N.A., as Funds Administrator (the “Funds Administrator”) and as Administrative
Agent (the “Agent”), WELLS FARGO BANK, N.A. and BANK OF AMERICA, N.A., each as a
Syndication Agent and THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. and DNB NOR BANK
ASA, each as a Documentation Agent. Unless otherwise defined herein, all
capitalized terms used herein and defined in Article I are used herein as so
defined.
 
PRELIMINARY STATEMENT
 
Pursuant to that certain Credit Agreement dated as of September 19, 1997 (the
“Existing Credit Agreement”), among the Borrower, the banks named therein, the
Agent as the Funds Administrator and the Agent, the parties named therein as
Banks made a revolving credit facility available to the Borrower upon the terms
and conditions set forth therein. Said Existing Credit Agreement was amended by
that certain First Amendment to Credit Agreement dated as of January 30, 1998,
that certain Second Amendment to Credit Agreement dated November 30, 1998, that
certain Third Amendment to Credit Agreement dated November 5, 2001, that certain
Fourth Amendment to Credit Agreement dated January 31, 2003 and that certain
Fifth Amendment to Credit Agreement dated as of December 9, 2003, all of said
Amendments among the Borrower, the Banks named therein, the Agent, the Funds
Administrator and the other parties named therein as syndication agent or
documentation agent (said parties, in such capacities, together with the Agent,
the “Agents”).
 
The Borrower now requests that the Banks amend and restate the Existing Credit
Agreement and provide the Borrower with a credit facility pursuant to which the
Banks will commit to make Revolving Loans in a principal amount of up to
$250,000,000 outstanding at any time. The proceeds of the Revolving Loans shall
be used to refinance indebtedness, to finance working capital needs of the
Borrower and its Subsidiaries and for their general corporate purposes,
including permitted acquisitions.
 
In connection therewith, the Agent has agreed to serve in such capacity for the
Banks and the Agent and the Banks are agreeable to the Borrower’s request,
subject to the terms of this Agreement.
 
Accordingly, in consideration of the foregoing and the mutual covenants set
forth herein, the parties hereto agree as follows:
 
ARTICLE I.
DEFINITIONS, ETC.
 
Section 1.01 Certain Defined Terms. Capitalized terms used in this Agreement and
not otherwise defined herein shall have the respective meanings set forth in
Annex A hereto (such meanings to be equally applicable to both singular and
plural forms of the terms defined).
 
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Section 1.02 Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles consistent with those applied in the preparation of the consolidated
financial statements referred to in Section 4.06.
 
Section 1.03 Computation of Time Periods. In this Agreement in the computation
of periods of time from a specified date to a later specified date, unless
otherwise indicated, the word “from” means “from and including” and the words
“to” and “until” each means “to but excluding.”
 
Section 1.04 References, Etc. The words “hereof,” “herein” and “hereunder” and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. All
references herein to Sections, Annexes, Exhibits and Schedules shall, unless the
context requires a different construction, be deemed to be references to the
Sections of this Agreement and the Annexes, Exhibits and Schedules attached
hereto and made a part hereof. In this Agreement, unless a clear contrary
intention appears, the word “including” (and with correlative meaning “include”)
means including, without limiting the generality of any description preceding
such term. No provision of this Agreement shall be interpreted or construed
against any Person solely because that Person or its legal representative
drafted such provision.
 
ARTICLE II.
COMMITMENTS AND TERMS OF CREDIT
 
Section 2.01 Commitments; Loans and Borrowings. (a) Each Bank severally agrees,
on the terms and conditions hereinafter set forth, to make Revolving Loans to
the Borrower from time to time on any Business Day during the period from the
Effective Date up to, but excluding, the Termination Date in an aggregate
principal amount that will not result in such Bank’s Revolving Credit Exposure
exceeding at any time such Bank’s Commitment as set forth in Schedule 2.01.
Subject to the terms and conditions of this Agreement, the Borrower may borrow,
repay pursuant to Section 2.06 or prepay pursuant to Section 2.08 and reborrow
under this Section 2.01(a) the Revolving Loans.
 
(b)  Each Revolving Loan shall be made as part of a Borrowing consisting of
Revolving Loans made by the Banks ratably in accordance with their respective
Commitments. The failure of any Bank to make any Loan required to be made by it
shall not relieve any other Bank of its obligations hereunder; provided that the
Commitments of the Banks are several and no Bank shall be responsible for any
other Bank’s failure to make Loans as required.
 
(c)  Each Borrowing of a Revolving Loan shall be comprised entirely of Prime
Rate Loans or Fixed Rate Loans as the Borrower may request in accordance
herewith. Prime Rate Borrowing shall consist of Prime Rate Loans made on the
same day by the Banks ratably according to their respective Commitment
Percentages, and Prime Rate Borrowings may be in any amount. Each Fixed Rate
Borrowing shall be in an aggregate amount not less than $1,000,000 or an
integral multiple of $100,000 in excess thereof, and shall consist of Fixed Rate
Loans of the same Type made on the same day by the Banks ratably according to
their respective Commitment Percentages. Each Swingline Loan shall be in an
amount that is an integral multiple of $1,000 and not less than $100,000 and
shall accrue interest at a rate equal to the Federal Funds Rate plus the
Applicable Margin for Eurodollar Rate Loans. Borrowings of more than one Type
may be outstanding at the same time, but the Borrower shall not be entitled to
request any Borrowing or to Convert Loans comprising any Borrowing into
Revolving Loans of another Type, if after giving effect to such Borrowing or
Conversion, as the case may be, any Bank would have outstanding at any one time
more than six (6) different Types of Loans.
 
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(d)  Notwithstanding any other term or provision hereof no Loan shall be made if
after giving effect thereto the aggregate principal amount of Loans outstanding
would exceed the Total Commitment.
 
Section 2.02 Revolving Borrowing Procedures; Conversions. ii) Each Borrowing of
a Revolving Loan shall be made upon the written, telecopied or facsimile
transmitted request of the Borrower, given to the Funds Administrator not later
than 11:00 a.m. (Houston time) on (i) the third Business Day prior to the
proposed Borrowing Date in the case of a Eurodollar Rate Borrowing, (ii) the
second Business Day prior to the proposed Borrowing Date in the case of an
Adjusted CD Rate Borrowing or (iii) the Business Day immediately preceding the
proposed Borrowing Date in the case of a Prime Rate Borrowing, and upon receipt
the Funds Administrator shall give each other member of the Bank Group prompt
notice of such request by telecopier, telex or cable. Each request for a
Borrowing (a “Borrowing Request”) made by the Borrower shall be in substantially
the form of Exhibit 2.02(a), specifying therein (A) the Borrowing Date for such
Borrowing, (B) the Type of Loans comprising such Borrowing, (C) the aggregate
amount of such Borrowing, and (D) in the case of a Fixed Rate Borrowing, the
Interest Period for the Loans comprising such Borrowing. Each Bank shall, before
11:30 a.m. (Houston time) on the date of such Borrowing, make available for the
account of its Applicable Lending Office to the Funds Administrator at its
address referred to in Section 9.03, in same day funds, such Bank’s ratable
portion of such Borrowing. After the Funds Administrator’s receipt of such funds
and upon fulfillment of the applicable conditions set forth in Article III, the
Funds Administrator will make such funds available to the Borrower at the Funds
Administrator’s aforesaid address. Each Borrowing Request shall be irrevocable
and binding on the Borrower.
 
(b)  Unless the Funds Administrator shall have received notice from a Bank prior
to any Borrowing Date that such Bank will not make available to the Funds
Administrator such Bank’s ratable portion of such Borrowing, the Funds
Administrator may assume that such Bank has made such portion available to the
Funds Administrator on such Borrowing Date in accordance with Section 2.02(a)
and the Funds Administrator may, in reliance upon such assumption, make
available to the Borrower on such Borrowing Date a corresponding amount. If and
to the extent that such Bank shall not have so made such ratable portion
available to the Funds Administrator, such Bank and the Borrower severally agree
to repay to the Funds Administrator forthwith on demand such corresponding
amount, together with interest thereon for each day from the date such amount is
made available to the Borrower until the date such amount is repaid to the Funds
Administrator at (i) in the case of the Borrower, the interest rate applicable
at the time to the Revolving Loans comprising such Borrowing and (ii) in the
case of such Bank, the Federal Funds Rate. If such Bank shall repay to the Funds
Administrator such corresponding amount, such amount so repaid shall constitute
such Bank’s Loan as part of such Borrowing for purposes of this Agreement.

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(c)  The Borrower may, subject to the terms of this Agreement, on any Business
Day, upon written, telecopied or facsimile transmitted notice to the Funds
Administrator, given not later than 11:00 a.m. (Houston time) on (i) the third
Business Day prior to the proposed Conversion Date in the case of a Conversion
of Loans into Eurodollar Rate Loans, (ii) the second Business Day prior to the
proposed Conversion Date in the case of a Conversion of Loans into Adjusted CD
Rate Loans or (iii) the Business Day immediately preceding the proposed
Conversion Date in the case of a Conversion of Loans into Prime Rate Loans,
Convert all Loans comprising one or more Borrowings into Loans of another Type
comprising a single Borrowing, and the Funds Administrator shall promptly
transmit the contents of such notice to each other member of the Bank Group by
telecopier, telex or cable. Each notice of a Conversion (a “Conversion Notice”)
given by the Borrower shall be in substantially the form of Exhibit 2.02(c),
specifying therein (A) the Conversion Date for such Conversion, (B) the Loans to
be Converted, (C) the Type of Loans to which such Loans are to be Converted and
(D) in the case of a Conversion into Fixed Rate Loans, the Interest Period for
such Converted Loans. Notwithstanding any other term or provision hereof, after
giving effect to any such Conversion, the size of all Borrowings outstanding
hereunder and the number of different Types of Loans outstanding hereunder shall
conform to the requirements of Section 2.01. In the event of any Conversion of
Fixed Rate Loans on any day other than the last day of the Interest Period
applicable thereto, the Borrower shall be obligated to reimburse the Banks in
respect thereof pursuant to Section 2.12. If the Borrower shall fail to give a
timely Conversion Notice conforming to the requirements of this Agreement with
respect to any Fixed Rate Loans prior to the expiration of the Interest Period
applicable thereto, such Fixed Rate Loans shall, automatically on the last day
of such Interest Period, be Converted into Prime Rate Loans.
 
Section 2.03 Swingline Loans. iii) Subject to the terms and conditions set forth
herein, the Swingline Bank agrees to make Swingline Loans to the Borrower on any
Business Day during the period from the Effective Date up to, but excluding, the
Termination Date, in an aggregate principal amount at any time outstanding that
will not result in (i) the aggregate principal amount of outstanding Swingline
Loans exceeding $25,000,000 or (ii) the sum of the total Revolving Credit
Exposure exceeding the Total Commitment; provided that the Swingline Bank 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 Funds
Administrator of such request by telephone (confirmed by telecopy), not later
than 2:00 p.m. (Houston time), on the day of a 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 Funds
Administrator will promptly advise the Swingline Bank of any such notice
received from the Borrower. The Swingline Bank shall make each Swingline Loan
available to the Borrower by means of a credit to the general deposit account of
the Borrower with the Swingline Bank (or, in the case of a Swingline Loan made
to finance the reimbursement of a drawing under a Letter of Credit as provided
in Section 2.16(b)(iv), by remittance to the Issuing Bank) by 2:00 p.m. (Houston
time) on the requested date of such Swingline Loan.
 
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(c)  The Swingline Bank may by written notice given to the Administrative Agent
not later than 9:00 a.m. (Houston time) on any Business Day require the Bank
Group 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 Bank Group will participate. Promptly upon receipt of
such notice, the Funds Administrator will give notice thereof to each Bank,
specifying in such notice such Bank's Commitment Percentage of such Swingline
Loan or Loans. Each Bank hereby absolutely and unconditionally agrees, upon
receipt of notice as provided above, to pay to the Funds Administrator, for the
account of the Swingline Bank, such Bank's Commitment Percentage of such
Swingline Loan or Loans. Each Bank 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 Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever. Each Bank
shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.02 with
respect to Loans made by such Bank (and Section 2.02 shall apply, mutatis
mutandis, to the payment obligations of the Bank Group), and the Funds
Administrator shall promptly pay to the Swingline Bank the amounts so received
by it from the Bank Group. The Funds Administrator 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
Funds Administrator and not to the Swingline Bank. Any amounts received by the
Swingline Bank from the Borrower (or other party on behalf of the Borrower) in
respect of a Swingline Loan after receipt by the Swingline Bank of the proceeds
of a sale of participations therein shall be promptly remitted to the Funds
Administrator; any such amounts received by the Funds Administrator shall be
promptly remitted by the Funds Administrator to the Bank Group that shall have
made their payments pursuant to this paragraph and to the Swingline Bank, as
their interests may appear; provided that any such payment so remitted shall be
repaid to the Swingline Bank or to the Funds Administrator, as applicable, 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.
 
Section 2.04 The Notes. The Loans made by each Bank shall be evidenced by a
single Note issued to such Bank by the Borrower (a) dated the date of this
Agreement (or such other date as may be specified in Section 9.02), (b) payable
to the order of such Bank in a principal amount equal to such Bank’s Commitment
and (c) otherwise duly completed, substantially in the form of Exhibit 2.04.
Each Loan made by a Bank to the Borrower and all payments made on account of the
principal amount thereof shall be entered by such Bank in its records or on the
schedule (or a continuation thereof) attached to the Note of such Bank,
provided, however, that prior to any transfer of any such Note, such Bank shall
endorse the amount and maturity of any outstanding Loans on the schedule (or a
continuation thereof) attached to such Note.
 
Section 2.05 Reduction of the Commitments. The Borrower shall have the right,
upon at least three Business Days’ notice to the Funds Administrator to
terminate in whole or reduce ratably in part the unused portions of the
respective Commitments of the Banks, provided, that each partial reduction shall
be in the aggregate amount of $1,000,000 or an integral multiple of $1,000,000
in excess thereof.
 
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Section 2.06 Repayment of Loans. The Borrower hereby unconditionally promises to
pay (i) to the Funds Administrator for the account of each Bank the then unpaid
principal amount of each Revolving Loan on the Termination Date, together with
any unpaid interest accrued thereon and (ii) to the Swingline Bank the then
unpaid principal amount of each Swingline Loan on the earlier of the Termination
Date and the first date after such Swingline Loan is made that is the last day
of the calendar month and is at least two (2) Business Days after such Swingline
Loan is made; provided that on each date that a Borrowing of a Revolving Loan is
made, the Borrower shall repay all Swingline Loans then outstanding.
 
Section 2.07 Interest Accrual, Payments, Etc. (a) Subject to the provisions of
Section 9.13, the Borrower shall pay interest on the unpaid principal amount of
each Loan made by each Bank from the date of such Loan until such principal
amount shall be paid in full, on the dates and at the rates per annum specified
as follows:
 
(i)  if such Loan is a Prime Rate Loan, a rate per annum equal to the lesser of
(A) the Highest Lawful Rate and (B) the Prime Rate in effect from time to time
plus or minus, as applicable, the Applicable Margin in effect from time to time,
and unpaid accrued interest on such Loans shall be payable on each Quarterly
Payment Date and on the date such Prime Rate Loan shall be paid in full;
 
(ii)     if such Loan is an Adjusted CD Rate Loan, a rate per annum equal at all
times during the Interest Period for such Loan to the lesser of (A) the Highest
Lawful Rate and (B) the sum of the Adjusted CD Rate for such Interest Period
plus the Applicable Margin in effect as of the first day of such Interest
Period, and unpaid accrued interest on such Loans shall be payable on each
Quarterly Payment Date and on the last day of such Interest Period;
 
(iii)    if such Loan is a Eurodollar Rate Loan, a rate per annum equal at all
times during the Interest Period for such Loan to the lesser of (A) the Highest
Lawful Rate and (B) the sum of the Eurodollar Rate for such Interest Period plus
the Applicable Margin in effect as of the first day of such Interest Period, and
unpaid accrued interest on such Loans shall be payable on each Quarterly Payment
Date and on the last day of such Interest Period; or
 
(iv)    if such Loan is a Swingline Loan, a rate per annum equal to the Federal
Funds Rate plus the Applicable Margin for Eurodollar Rate Loans.
 
Any amount of principal or, to the extent permitted by applicable law, interest
which is not paid when due (whether at stated maturity, by acceleration or
otherwise) shall bear interest from the date on which such amount is due until
such amount is paid in full, at a rate per annum (the “Default Rate”) equal at
all times to the lesser of (A) the Highest Lawful Rate and (B) the Prime Rate in
effect from time to time during the applicable period plus or minus, as
applicable, the Applicable Margin in effect from time to time during such period
plus two percent (2%), payable on demand.
 
(b)  The Borrower shall pay to each Bank additional interest on the unpaid
principal amount of each Eurodollar Rate Loan of such Bank, from the date of
such Loan until such principal amount is paid in full, at an interest rate per
annum equal at all times to the remainder obtained by subtracting (i) the
Eurodollar Rate for the Interest Period for such Loan from (ii) the rate
obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus
the Eurodollar Rate Reserve Percentage of such Bank for such Interest Period,
payable on each date on which interest is payable on such Loan. Such additional
interest shall be calculated by such Bank and notified to the Borrower (together
with a copy of such Bank’s calculations) through the Funds Administrator.
 
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(c)  (i) The Agent shall give prompt notice to the Borrower and each other
member of the Bank Group of the applicable interest rate determined by the Agent
hereunder for each Borrowing. Each determination by the Agent (or, in the case
of Section 2.07(b), by a Bank) of an interest rate hereunder shall be conclusive
and binding for all purposes, absent manifest error.
 
(ii)  If one or more Banks holding aggregate Commitment Percentages of at least
fifty percent (50%) shall, at least one Business Day before the date of any
requested Eurodollar Rate Borrowing, notify the Agent and the Funds
Administrator that the Eurodollar Rate applicable to such Borrowing will not
adequately reflect the cost to such Banks of making, funding or maintaining
their respective Eurodollar Rate Loans for such Borrowing, the right of the
Borrower to select Eurodollar Rate Loans for such Borrowing or any subsequent
Borrowing shall be suspended until the Agent shall notify the Borrower and each
other member of the Bank Group that the circumstances causing such suspension no
longer exist, and each Loan comprising such Borrowing shall be made as, or
Converted into, as applicable, a Prime Rate Loan.
 
(iii)  If the Agent is unable to determine the Adjusted CD Rate in accordance
with the definition thereof for any Adjusted CD Rate Borrowing or the Eurodollar
Rate in accordance with the definition thereof for any Eurodollar Rate
Borrowing, (A) the Agent shall forthwith notify the Borrower and each other
member of the Bank Group that the interest rate cannot be determined for such
Adjusted CD Rate Borrowing or Eurodollar Rate Borrowing, as the case may be, (B)
each Adjusted CD Rate Borrowing or Eurodollar Rate Borrowing, as the case may
be, previously requested but not yet funded or Converted, as applicable, will
automatically be made as or Converted into, as applicable, a Prime Rate
Borrowing, and (C) the obligation of the Banks to make Adjusted CD Rate Loans or
Eurodollar Rate Loans, as the case may be, shall be suspended until the Agent
shall notify the Borrower and each other member of the Bank Group that the
circumstances causing such suspension no longer exist.
 
(d)  As used in this Agreement and the other Loan Documents, “Applicable Margin”
means, as to Loans consisting of a single Borrowing, a rate per annum determined
pursuant to the table set forth below by reference to the Borrower’s S&P Rating,
Moody’s Rating or Fitch Rating (individually, a “Rating” and collectively, the
“Ratings”) and the Type of Loans comprising such Borrowing, whereby (i) if
either Moody’s or S&P shall not have in effect a Rating (other than by reason of
the circumstances referred to in the last sentence of this Section 2.07(d)),
then such rating agency shall be deemed to have established a rating in the
lowest of the categories set forth in the table below; (ii) if the Moody’s
Rating and the S&P Rating shall differ by one level, the higher Rating shall
apply; (iii) if the Moody’s Rating and the S&P Rating differ by more than one
level and the Fitch Rating is equal to the higher of the Moody’s Rating and the
S&P Rating, the higher Rating shall apply; (iv) if the Moody’s Rating, the S&P
Rating and the Fitch Rating each differ by one level, and the Moody’s Rating and
the S&P Rating differ by more than one level, the rating which is the middle
rating shall apply; (v) if the Moody’s Rating and the S&P Rating differ by more
than one level, and the Fitch rating is equal to the lower of the Moody’s and
S&P Rating, the rating which is one level above the two lower Ratings shall
apply; (vi) if the Moody’s Rating and the S&P Rating differ by more than one
level, and the Borrower does not have a Fitch rating, the rating which is one
level below the higher of the Moody’s Rating or the S&P Rating Ratings shall
apply; and (vii) if the Moody’s Rating and the S&P Rating are the same, that
Rating shall apply. Each change in the Applicable Margin shall apply during the
period commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change. If the rating
system of Moody’s, S&P, or Fitch shall change, or if any such rating agency
shall cease to be in the business of rating corporate debt obligations, the
Borrower and the Banks shall negotiate in good faith to amend this definition to
reflect such changed rating system or the unavailability of ratings from such
rating agency and, pending the effectiveness of any such amendment, the
Applicable Margin shall be determined by reference to the rating most recently
in effect prior to such change or cessation.
 
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Pricing Grid

S&P/Fitch/
Moody’s Rating
 
Eurodollar
Rate
 
Prime
Rate
 
Commitment
Fee
 
Utilization
Fee
                     
Greater than or equal to BBB+/Baa1
   
0.300
%
 
0.000
%
 
0.008
%
 
0.100
%
Greater than or equal to BBB/Baa2
   
0.400
%
 
0.000
%
 
0.100
%
 
0.100
%
Greater than or equal to BBB-/Baa3
   
0.525
%
 
0.000
%
 
0.125
%
 
0.100
%
Greater than or equal to BB+/Ba1
   
0.775
%
 
0.000
%
 
0.175
%
 
0.100
%
Less than BB+/Ba1
   
0.900
%
 
0.000
%
 
0.225
%
 
0.100
%

Section 2.08 Prepayments. (a) The Borrower may, from time to time on any
Business Day, upon at least one Business Day’s notice to the Funds Administrator
stating the proposed date and aggregate principal amount thereof, and if such
notice is given, the Borrower shall, prepay the outstanding principal amount of
the Prime Rate Loans (including any Swingline Loan) comprising part of the same
Borrowing in whole or ratably in part; provided, that any partial prepayment of
such Prime Rate Loans shall be in an aggregate principal amount of not less than
$100,000. The Borrower may from time to time upon at least three Business Days’
notice to the Funds Administrator stating the proposed date and the aggregate
principal amount thereof, and if such notice is given, the Borrower shall,
prepay the outstanding principal amount of the Fixed Rate Loans comprising part
of the same Borrowing in whole or ratably in part; provided, that any partial
prepayment of such Fixed Rate Loans shall be in an aggregate principal amount of
not less than $2,000,000 or an integral multiple of $1,000,000 in excess
thereof. Subject to the preceding two sentences, Borrower may apply any optional
prepayment of the Loans to such portions of the Loans as the Borrower may elect.
 
(b)  The Borrower shall from time to time prepay the Loans comprising part of
the same Borrowing in such amounts as shall be necessary so that at all times
the aggregate amount of Loans outstanding shall not be in excess of the Total
Commitment. Any prepayment required by this Section 2.08(b) shall be due on the
date such prepayment accrues pursuant to the preceding sentence.
 
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(c)  Each prepayment of Fixed Rate Loans shall be accompanied by a prepayment of
accrued interest to the date of such prepayment on the principal amount prepaid.
In the event of any prepayment of a Fixed Rate Loan, the Borrower shall be
obligated to reimburse the Banks in respect thereof pursuant to Section 2.12.
Unless otherwise specified by the Borrower, all mandatory prepayments of the
Loans shall first be applied to Prime Rate Borrowings, and second to such Fixed
Rate Borrowings as the Funds Administrator may select.
 
Section 2.09 Payments and Computations. (a) All payments of principal, interest,
commitment fees and other amounts payable to the Banks under the Loan Documents
shall be made in Dollars to the Funds Administrator at its address specified in
Section 9.03 for the account of each of the Banks, in immediately available
funds not later than 12:00 Noon (Houston time) on the date when due. Upon
receipt of such payments, the Funds Administrator will promptly cause to be
distributed like funds relating to the payment of principal or interest or
commitment fees ratably (other than amounts payable pursuant to Section 2.07(b),
Section 2.11, Section 2.12, Section 2.13 or Section 2.14) to the Banks for the
account of their respective Applicable Lending Offices, and like funds relating
to the payment of any other amount payable to any Bank to such Bank for the
account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. In the event the Funds
Administrator receives any such payment in immediately available funds not later
than 12:00 Noon (Houston time) on any Business Day, but fails to distribute to
any Bank entitled thereto like funds relating to such payment by the close of
business on such Business Day, then the Funds Administrator shall pay such Bank
interest thereon at the Federal Funds Rate for each day from the date such
amount is received by the Funds Administrator until the date distributed to such
Bank.
 
(b)  Unless the Funds Administrator shall have received notice from the Borrower
prior to the date on which any payment is due to the Banks under the Loan
Documents that the Borrower will not make such payment in full, the Funds
Administrator may assume that the Borrower has made such payment in full to the
Funds Administrator on such date and the Funds Administrator may, in reliance
upon such assumption, cause to be distributed to each Bank on such due date an
amount equal to the amount then due such Bank. If and to the extent the Borrower
shall not have made such payment in full to the Funds Administrator each Bank
shall repay to the Funds Administrator forthwith on demand such amount
distributed to such Bank, together with interest thereon for each day from the
date such amount is distributed to such Bank until the date such Bank repays
such amount to the Funds Administrator at the Federal Funds Rate.
 
(c)  All payments by the Borrower of the fees payable to the Agent pursuant to
the Fee Letter shall be made in Dollars directly to the Agent at its address
specified in Section 9.03 in immediately available funds not later than 12:00
Noon (Houston time) on the date when due.
 
(d)  All computations of interest based on the Prime Rate shall be made on the
basis of a year of 365 or 366 days, as the case may be, and all computations of
interest based on the Adjusted CD Rate, the Eurodollar Rate, the Federal Funds
Rate, or Section 2.07(b), as well as commitment fees, shall be made on the basis
of a year of 360 days (unless use of a 360 day year would cause the interest
contracted for, charged or received hereunder to exceed the Highest Lawful Rate,
in which case such computations shall be made on the basis of a year of 365 or
366 days, as the case may be), in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest or commitment fees are payable.
 
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(e)  Whenever any payment under the Loan Documents shall be stated to be due on
a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; provided, however, if such extension would cause payment of
interest on or principal of Eurodollar Rate Loans to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
 
(f)  If any Bank shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of setoff, or otherwise) on account of the
Loans made by it (other than pursuant to Section 2.07(b), Section 2.11, Section
2.12, Section 2.13 or Section 2.14) in excess of its ratable share of payments
on account of the Loans obtained by all the Banks, such Bank shall forthwith
purchase from the other Banks such participations in the Loans made by such
other Banks as shall be necessary to cause such purchasing Bank to share the
excess payment ratably with each of them. The Borrower agrees that any Bank so
purchasing a participation from another Bank pursuant to this Section 2.09(f)
may, to the fullest extent permitted by law and this Agreement, exercise all its
rights of payment (including the right of setoff) with respect to such
participation as fully as if such Bank were the direct creditor of the Borrower
in the amount of such participation.
 
Section 2.10 Fees. (a) Subject to the provisions of Section 9.13, the Borrower
shall pay each Bank a commitment fee equal to the applicable percentage set
forth in the pricing grid in Section 2.07(d) on the average unused portion of
the Commitment of such Bank as in effect from time to time for the period from
the date hereof to, but excluding, the Termination Date. Accrued commitment fees
shall be due and payable in arrears on each Quarterly Payment Date in each year,
on the date of any reduction or termination of the Commitment of such Bank and
on the Termination Date, and shall be computed for the period commencing with
the day to which such fee was last paid (or, in the case of the first commitment
fee payment date, for the period commencing with and including the date hereof)
to the date such fee is due and payable.
 
(b)  Subject to the provisions of Section 9.13, the Borrower shall pay the Agent
the arrangement and administrative fees specified in that certain letter
agreement dated __________, 2006 between the Agent and the Borrower concerning
the same (the “Fee Letter”).
 
(c)  Subject to the provisions of Section 9.13, the Borrower shall pay to the
Agent for the pro-rata accounts of the Banks, a utilization fee equal to the
applicable percentage set forth in the grid contained in Section 2.07(d) on the
daily average outstanding balance of the Loans during all times for which the
principal balance of the Loans outstanding (including all outstanding, undrawn
Letters of Credit) exceeds 33% of the Total Commitment.
 
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Section 2.11 Setoff, Counterclaims and Taxes. (a) All payments of principal,
interest, expenses, reimbursements, compensation, commitment fees, letter of
credit fees, arrangement fees or administration fees and any other amount from
time to time due under any Loan Document shall be made by the Borrower without
setoff or counterclaim and shall be made free and clear of and without deduction
for any and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each member of the Bank Group, taxes imposed on its income (or a taxable base
in the nature of net income, or, in lieu of taxes so imposed or measured, on
overall gross receipts and capital), and franchise taxes imposed on it, by the
jurisdiction under the laws of which such member of the Bank Group is organized
or any political subdivision thereof and, in the case of each Bank, taxes
imposed on its income, and franchise taxes imposed on it, by the jurisdiction of
such Bank’s Applicable Lending Office or any political subdivision thereof (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as “Taxes”). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable under
any Loan Document to any member of the Bank Group, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.11) such member of the Bank Group 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 taxation authority or other authority in accordance with applicable
law; provided that the Borrower shall not be required to pay any increased
amount on account of Taxes to the extent that any such Bank shall not have
furnished the Borrower with such forms, or shall not have taken such other
action, as reasonably may be available to it under applicable tax laws and any
applicable tax treaty to obtain an exemption from, or reduction of, such Taxes.
 
(b)  In addition, the Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made under any Loan Document or from the
execution, delivery or registration of, or otherwise with respect to, any Loan
Document (hereinafter referred to as “Other Taxes”).
 
(c)  The Borrower will indemnify each member of the Bank Group for the full
amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this Section
2.11) paid by such member of the Bank Group (whether paid on its own behalf or
on behalf of any other member of the Bank Group) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
This indemnification shall be made within 30 days from the date such member of
the Bank Group makes written demand therefor.
 
(d)  Within 30 days after the date of any payment of Taxes, the Borrower will
furnish to the Agent, at its address referred to in Section 9.03, the original
or a certified copy of a receipt evidencing payment thereof. If no Taxes are
payable in respect of any payment made under any Loan Document, upon the request
of the Agent, the Borrower will furnish to the Agent and the Funds
Administrator, at its address referred to in Section 9.03, a certificate from
each appropriate taxing authority, or an opinion of counsel acceptable to the
Agent, in either case stating that such payment is exempt from or not subject to
Taxes.
 
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(e)  Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in this
Section 2.11 shall survive the payment in full of the Loans and all other
amounts owing under the other Loan Documents. The provisions of this Section
2.11 are in all respects subject to Section 9.13 hereof.
 
(f)  Each Bank represents and warrants to the Agent, the Funds Administrator and
the Borrower that such Bank is either (i) a corporation organized under the laws
of the United States, a state thereof or the District of Columbia, or (ii)
entitled to complete exemption from United States withholding tax imposed on or
with respect to any payments, including fees, to be made to it pursuant to this
Agreement and the other Loan Documents (x) under an applicable provision of a
tax convention or treaty to which the United States is a party or (y) because it
is acting through a branch, agency or office in the United States and any
payment to be received by it hereunder is effectively connected with a trade or
business in the United States. Upon becoming a party to this Agreement (whether
by assignment or as an original signatory hereto), and in any event, from time
to time upon the request of the Agent, the Funds Administrator or the Borrower,
each Bank which is not a corporation organized under the laws of the United
States or any state thereof or the District of Columbia shall deliver to the
Agent, the Funds Administrator and the Borrower such forms, certificates or
other instruments as may be required by the Agent and the Funds Administrator in
order to establish that such Bank is entitled to complete exemption from United
States withholding taxes imposed on or with respect to any payments, including
fees, to be made to such Bank under this Agreement and the other Loan Documents.
Each Bank also agrees to deliver to the Borrower, the Agent and the Funds
Administrator such other supplemental forms as may at any time be required as a
result of the passage of time or changes in applicable law or regulation in
order to confirm or maintain in effect its entitlement to exemption from United
States withholding tax on any payments hereunder; provided, that the
circumstances of the Bank at the relevant time and applicable laws permit it to
do so. If a Bank determines, as a result of any change in either (1) applicable
law, regulation or treaty, or in any official application thereof or (2) its
circumstances, that it is unable to submit any form or certificate that it is
obligated to submit pursuant to this Section 2.11(f), or that it is required to
withdraw or cancel any such form or certificate previously submitted, it shall
promptly notify the Borrower, the Agent and the Funds Administrator of such
fact. If a Bank is organized under the laws of a jurisdiction outside the United
States, and the Borrower, the Funds Administrator and the Agent have not
received forms, certificates or other instruments indicating to their
satisfaction that all payments to be made to such Bank hereunder are not subject
to United States withholding tax or the Agent otherwise has reason to believe
that such Bank is subject to U.S. withholding tax, the Borrower shall withhold
taxes from such payments at the applicable statutory rate. Each Bank shall
indemnify and hold the Borrower, the Funds Administrator and the Agent harmless
from any United States taxes, penalties, interest and other expenses, costs and
losses incurred or payable by them as a result of either (A) such Bank’s failure
to submit any form or certificate that it is required to provide pursuant to
this Section 2.11(f) or (B) reliance by the Borrower, the Funds Administrator or
the Agent on any such form or certificate which such Bank has provided to them
pursuant to this Section 2.11(f).
 
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(g)  Any Bank claiming any additional amounts payable pursuant to this Section
2.11 shall use reasonable efforts (consistent with legal and regulatory
restrictions) to file any certificate or document requested by the Borrower or
to change the jurisdiction of its Applicable Lending Office if such a filing or
change would avoid the need for or reduce the amount of any such additional
amounts which may thereafter accrue and would not, in the sole determination of
such Bank, be otherwise disadvantageous to such Bank.
 
Section 2.12 Funding Losses. The Borrower shall indemnify each member of the
Bank Group against any loss or reasonable expense (including, but not limited
to, any loss or reasonable expense sustained or incurred or to be sustained or
incurred in liquidating or reemploying deposits from third parties acquired to
effect or maintain a Loan or any part thereof as a Fixed Rate Loan) which such
Person may sustain or incur as a consequence of (a) any failure by the Borrower
to fulfill on the date of any Borrowing hereunder the applicable conditions set
forth in Article III, (b) any failure by the Borrower to borrow hereunder or to
Convert Loans hereunder after a Borrowing Request or Conversion Notice,
respectively, has been given, (c) any payment, prepayment or Conversion of a
Fixed Rate Loan required or permitted by any other provisions of this Agreement,
including, without limitation, payments made due to the acceleration of the
maturity of the Loans pursuant to Section 7.01, or otherwise made on a date
other than the last day of the applicable Interest Period, (d) any default in
the payment or prepayment of the principal amount of any Loan or any part
thereof or interest accrued thereon, as and when due and payable (at the due
date thereof, by notice of prepayment or otherwise) or (e) the occurrence of an
Event of Default. Such loss or reasonable expense shall include, without
limitation, an amount equal to the excess, if any, as determined by each Bank of
(i) its cost of obtaining the funds for the Loan being paid, prepaid or
Converted or not borrowed or Converted (based on the Fixed Rate applicable
thereto) for the period from the date of such payment, prepayment or Conversion
or failure to borrow or Convert to the last day of the Interest Period for such
Loan (or, in the case of a failure to borrow or Convert, the Interest Period for
the Loan which would have commenced on the date of such failure to borrow or
Convert) over (ii) the amount of interest (as estimated by such Bank) that would
be realized by such Bank in reemploying the funds so paid, prepaid or Converted
or not borrowed or Converted for such period or Interest Period, as the case may
be. A certificate of each member of the Bank Group setting forth any amount or
amounts which such Person is entitled to receive pursuant to this Section 2.12
shall be delivered to the Borrower (with a copy to the Agent and the Funds
Administrator) and shall be conclusive, if made in good faith, absent manifest
error. The Borrower shall pay to the Funds Administrator for the account of each
such Person the amount shown as due on any certificate within 30 days after its
receipt of the same. Notwithstanding the foregoing, in no event shall any Bank
be permitted to receive any compensation hereunder constituting interest in
excess of the Highest Lawful Rate. Without prejudice to the survival of any
other obligations of the Borrower hereunder, the obligations of the Borrower
under this Section 2.12 shall survive the termination of this Agreement and/or
the payment or assignment of any of the Notes.
 
Section 2.13 Change of Law. (a) If at any time any Bank determines in good faith
(which determination shall be conclusive) that any change in any applicable law,
rule or regulation or in the interpretation, application or administration
thereof makes it unlawful, or any central bank or other Governmental Authority
asserts that it is unlawful, for such Bank or its foreign branch or branches to
fund or maintain any Eurodollar Rate Loan (any of the foregoing determinations
being a “Eurodollar Event”), then, such Bank, at its option, may: (i) declare
that Eurodollar Rate Loans will no longer be made or maintained by such Bank,
whereupon the right of the Borrower to select Eurodollar Rate Loans for any
Borrowing shall be suspended until such Bank shall notify the Funds
Administrator and the Agent that the circumstances causing such Eurodollar Event
no longer exist; (ii) with respect to any Eurodollar Rate Loans of such Bank
then outstanding, require that all such Eurodollar Rate Loans be Converted to
Prime Rate Loans, in which event all such Eurodollar Rate Loans shall
automatically be Converted into Prime Rate Loans on the effective date of notice
of such Eurodollar Event and all payments or prepayments of principal that would
have otherwise been applied to repay such Converted Eurodollar Rate Loans shall
instead be applied to repay the Prime Rate Loans resulting from such Conversion;
and/or (iii) with respect to any Eurodollar Rate Loans requested of such Bank
but not yet made as or Converted into such, require that such Eurodollar Rate
Loans be made as or Converted into, as applicable, Prime Rate Loans.
 
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(b)  Upon the occurrence of any Eurodollar Event, and at any time thereafter so
long as such Eurodollar Event shall continue, such Bank may exercise its
aforesaid option by giving written notice thereof to the Funds Administrator,
the Agent and the Borrower, such notice to be effective upon receipt thereof by
the Borrower. Any Conversion of any Eurodollar Rate Loan which is required under
this Section 2.13 shall be made, together with accrued and unpaid interest and
all other amounts payable to such Bank under this Agreement with respect to such
Converted Loan (including, without limitation, amounts payable pursuant to
Section 2.12 hereof), on the date stated in the notice to the Borrower referred
to above.
 
Section 2.14 Increased Costs. (a) If, due to either (i) the introduction of or
any change in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline issued or request made after the Effective Date by
any central bank or other Governmental Authority (whether or not having the
force of law), there shall be any increase in the cost to any Bank of agreeing
to make or making, funding or maintaining Adjusted CD Rate Loans or Eurodollar
Rate Loans, then the Borrower shall from time to time, subject to the provisions
of Section 9.13, pay to the Funds Administrator for the account of such Bank
additional amounts sufficient to compensate such Bank for such increased cost
upon demand by such Bank.
 
(b)  If any Bank shall have determined in good faith that any law, rule,
regulation or guideline adopted pursuant to or arising out of the July 1988
report of the Basel Committee on Banking Regulations and Supervisory Practices
entitled “International Convergence of Capital Measurement and Capital
Standards” and becoming applicable to such Bank after the Effective Date, or
that the adoption after the Effective Date of any applicable law, rule,
regulation or guideline regarding capital adequacy, or any change in any of the
foregoing or in the interpretation or administration thereof by any central bank
or other Governmental Authority charged with the interpretation or
administration thereof, or compliance by such Bank (or any lending office of
such Bank) with any request or directive regarding capital adequacy (whether or
not having the force of law) issued after the Effective Date by any such
Governmental Authority or comparable agency, affects or would affect the amount
of capital required or expected to be maintained by such Bank or any corporation
controlling such Bank and that the amount of such capital is increased by or
based upon the existence of such Bank’s Commitment hereunder and other
commitments of this type, then the Borrower shall from time to time, subject to
the provisions of Section 9.13, pay to such Bank upon demand additional amounts
sufficient to compensate such Bank or such corporation in light of such
circumstances, to the extent that such Bank reasonably determines such increase
in capital to be allocable to the existence of such Bank’s Commitment hereunder
and similar amounts are being charged generally to other borrowers with similar
commitments from such Bank.
 
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(c)  Each Bank will notify the Borrower of any event occurring after the date of
this Agreement which will entitle such Bank to compensation pursuant to this
Section 2.14 as promptly as practicable after such Bank obtains knowledge of the
occurrence of such event. In no event will the Borrower be obligated to
compensate any Bank pursuant to this Section 2.14 for any amounts described in
paragraphs (a) or (b) above that accrued more than one hundred eighty (180) days
prior to the date the notice described in the preceding sentence is given by the
party requesting such compensation, but the foregoing shall in no way limit the
right of such Bank to request compensation for amounts accrued during such one
hundred eighty (180) day period or any future period. A certificate of such Bank
setting forth in reasonable detail (i) such amount or amounts as shall be
necessary to compensate such Bank (or participating banks or other entities
pursuant to Section 9.02) as specified above and (ii) the calculation of such
amount or amounts shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay to such Bank the amount shown as
due on any such certificate within thirty (30) days after its receipt of the
same. The failure of any Bank to demand compensation for any increased costs or
reduction in amounts received or receivable or reduction in return on capital
shall not constitute a waiver of the right of such Bank or any other Bank, to
demand compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital. The protection of this Section
2.14 shall be available to the Banks regardless of any possible contention of
invalidity or inapplicability of law, regulation or condition which shall have
been imposed.
 
Section 2.15 Substitution of Banks. If one or more Banks requests compensation
pursuant to Section 2.14 or declares a Eurodollar Event pursuant to Section 2.13
or the Borrower is required to deduct United States withholding taxes pursuant
to Section 2.11(f) from amounts payable to one or more Banks under the Loan
Documents (any such request, declaration or withholding is herein called a
“Substitution Event” and any such Bank is herein called an “Affected Bank”) the
Borrower may give notice to such Affected Bank (with a copy to the Agent and the
Funds Administrator) that it wishes to seek one or more Eligible Assignees
(which may be one or more of the other Banks) to assume the Commitment of such
Affected Bank and to purchase the Loans of such Affected Bank and the other
interests of such Affected Bank in the Loan Documents (collectively, the
“Affected Interests”). Each Affected Bank agrees to sell all of its Affected
Interests pursuant to Section 9.02 to any such Eligible Assignee for an amount
equal to the sum of the outstanding unpaid principal of and accrued interest on
the Loans of such Affected Bank and all commitment fees and other fees and
amounts due such Affected Bank under the Loan Documents, calculated, in each
case, to the date such Affected Interests are purchased, whereupon such Affected
Bank shall have no further Commitment or other obligation to the Borrower under
the Loan Documents. Notwithstanding the foregoing, the Borrower may not replace
any Affected Bank if (a) the Bank or Banks involved in such Substitution Event
have aggregate Commitment Percentages in excess of thirty five percent (35%) or
(b) the Borrower does not seek to replace each Bank involved in such
Substitution Event.

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Section 2.16 Letters of Credit.
 
(a)  Subject to the terms and conditions of this Agreement, and on the condition
that aggregate Letter of Credit Liabilities shall never exceed $25,000,000,
Borrower shall have the right to, in addition to the Loans provided for in
Section 2.01 hereof, utilize the Commitments from time to time during the term
hereof by obtaining the issuance of letters of credit for the account of
Borrower if Borrower shall so request in a form and with such accompanying
documentation as Issuer may reasonably require not less than five (5) Business
Days prior to the proposed date of issuance (such letters of credit, as any of
them may be amended, supplemented, extended or confirmed from time to time,
being herein collectively called the “Letters of Credit”). Upon the date of the
issuance of a Letter of Credit, the Issuer shall be deemed, without further
action by any party hereto, to have sold to each Bank, and each such Bank shall
be deemed, without further action by any party hereto, to have purchased from
the Issuer, a participation, to the extent of such Bank’s Commitment Percentage,
in such Letter of Credit and the related Letter of Credit Liabilities, which
participation shall terminate on the earlier of the expiration date of such
Letter of Credit or the Termination Date.
 
(b)  The following additional provisions shall apply to each Letter of Credit:
 
(i)       Borrower shall give Agent and the Issuer notice requesting each
issuance of a Letter of Credit hereunder as provided in Section 2.16(a) hereof
and shall furnish such additional information regarding such transaction as
Agent and the Issuer may reasonably request. Upon receipt of such notice, Issuer
shall promptly notify each Bank of the contents thereof and of such Bank’s
Commitment Percentage of the amount of such proposed Letter of Credit.
 
(ii)       No Letter of Credit may be issued if after giving effect thereto the
sum of (A) the aggregate outstanding principal amount of Loans plus (B) the
aggregate Letter of Credit Liabilities with respect to Letters of Credit would
exceed the Total Commitment. On each day during the period commencing with the
issuance of any Letter of Credit and until such Letter of Credit shall have
expired or been terminated, the Commitment of each Bank shall be deemed to be
utilized for all purposes hereof in an amount equal to such Bank’s Commitment
Percentage of the amount then available for drawings under such Letter of Credit
(or any unreimbursed drawings under such Letter of Credit).
 
(iii)      Upon receipt from the beneficiary of any Letter of Credit of any
demand for payment thereunder, the Issuer shall promptly notify Borrower and
each Bank as to the amount to be paid as a result of such demand and the payment
date therefor. If at any time prior to the earlier of the expiration date of a
Letter of Credit or the Termination Date, Issuer shall have made a payment to a
beneficiary of a Letter of Credit in respect of a drawing under such Letter of
Credit, each Bank will pay to Issuer promptly upon demand by Issuer at any time
during the period commencing after such payment until reimbursement thereof in
full by Borrower, an amount equal to such Bank’s Commitment Percentage of such
payment, together with interest on such amount for each day from the date of
demand for such payment (or, if such demand is made after 11:00 a.m. (Houston
time) on such date, from the next succeeding Business Day) to the date of
payment by such Bank of such amount at a rate of interest per annum equal to the
Federal Funds Rate for such period.
 
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(iv)      Borrower shall be irrevocably and unconditionally obligated forthwith
to reimburse Issuer, on the date on which Issuer notifies Borrower of the date
and amount of any payment by Issuer of any drawing under a Letter of Credit, for
the amount paid by Issuer upon such drawing, without presentment, demand,
protest or other formalities of any kind, all of which are hereby waived. Such
reimbursement may, subject to satisfaction of the conditions in Sections 3.01
and 3.02 hereof and to the limitations of the Total Commitment (after adjustment
in the same to reflect the elimination of the corresponding Letter of Credit
Liability), be made by a Borrowing of Loans. Issuer will pay to each Bank such
Bank’s Commitment Percentage of all amounts received from Borrower for
application in payment, in whole or in part, in respect of any Letter of Credit,
but only to the extent such Bank has made payment to Issuer in respect of such
Letter of Credit pursuant to clause (iii) above.
 
(v)       Borrower will pay to Agent for the account of each Bank a letter of
credit fee with respect to each Letter of Credit equal to the Eurodollar Rate
Applicable Margin per annum, multiplied by the face amount of each Letter of
Credit (and computed on the basis of the actual number of days elapsed in a year
composed of 360 days), in each case for the period from and including the date
of issuance of such Letter of Credit to and including the date of expiration or
termination thereof, such fee to be due and payable quarterly in arrears based
on the date of the issuance thereof. Agent will pay to each Bank, promptly after
receiving any payment in respect of letter of credit fees referred to in this
clause (v), an amount equal to the product of such Bank’s Commitment Percentage
times the amount of such fees. In addition to and cumulative of the above
described fees, Borrower shall pay to Issuer, quarterly in arrears, based on the
date of the issuance of the applicable Letter of Credit, a fee in an amount
equal to 0.125% per annum of the face amount of the applicable Letter of Credit
and shall pay reasonable and customary fees imposed and expenses incurred by
Issuer in connection with the issuance, administration, amendment, payment and
negotiation of said Letter of Credit (such fees and expense reimbursements to be
retained by Issuer for its own account).
 
(vi)        The issuance by Issuer of each Letter of Credit shall, in addition
to the conditions precedent set forth in Article III hereof, be subject to the
conditions precedent (A) that such Letter of Credit shall be in such form and
contain such terms as shall be reasonably satisfactory to Issuer and Agent, and
(B) that Borrower shall have executed and delivered such applications and other
instruments and agreements relating to such Letter of Credit as Issuer and Agent
shall have reasonably requested and which are not inconsistent with the terms of
this Agreement. In the event of a conflict between the terms of this Agreement
and the terms of any application, the terms of this Agreement shall control.
 
(vii)       Issuer will send to each Bank, immediately upon issuance of any
Letter of Credit a true and correct copy of such Letter of Credit.
 
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(viii)    Any Letter of Credit issued under this Agreement shall provide for an
expiry date which is not later than the earlier of five (5) days prior to the
Termination Date or twelve (12) months from the issuance date, provided,
Borrower may request, and Issuer agrees to issue, Letters of Credit with expiry
dates beyond five (5) days prior to the Termination Date if at the time of
issuance thereof Borrower pledges to the Agent cash collateral in an amount and
on such terms and conditions as Agent and Issuer may request. Each Letter of
Credit which is self-extending beyond its stated expiration date must be
cancelable upon no more than thirty (30) days’ written notice given by the
Issuer to the beneficiary of such Letter of Credit.
 
(ix)      The issuance of a Letter of Credit shall constitute the making of a
Loan except as otherwise expressly set forth herein, and each Letter of Credit
and all related applications and other documents executed or delivered in
connection with any Letter of Credit shall be considered Loan Documents.
 
Section 2.17 Increase of Commitments.
 
(a)  If no Default, Event of Default or Material Adverse Effect shall have
occurred and be continuing, the Borrower may at any time and from time to time
request an increase of the aggregate Commitments by notice to the Agent in
writing, in the amount of such proposed increase request, substantially in the
form of Exhibit 2.17(a) (such notice, a “Commitment Increase Notice”); provided,
however, that (i) each such increase shall be at least $5,000,000, (ii) the
cumulative increase in Commitments pursuant to this Section 2.17 shall not
exceed $75,000,000 without the approval of the Majority Banks, (iii) the
Commitment of any Bank may not be increased without such Bank’s consent, and
(iv) the aggregate amount of the Banks’ Commitments shall not exceed
$325,000,000 without the approval of the Majority Banks. Any such Commitment
Increase Notice must offer each Bank the opportunity to subscribe for its pro
rata share of the increased Commitment. If any portion of the increased
Commitment is not subscribed for by such Banks, the Borrower may, in its sole
discretion, but with the consent of the Agent as to any Person that is not at
such time a Bank (which consent shall not be unreasonably withheld or delayed),
offer to any existing Bank or to one or more additional banks or financial
institutions the opportunity to participate in all or a portion of such
unsubscribed portion of the increased Commitments pursuant to paragraph (b) or
(c) below, as applicable.
 
(b)  Any additional bank or financial institution that the Borrower selects to
offer participation in the increased Commitment shall become a party to this
Agreement by executing and delivering to the Agent an agreement, substantially
in the form of Exhibit 2.17(b) (a “New Bank Agreement”) setting forth its
Commitment, whereupon such bank or financial institution (a “New Bank”) shall
become a Bank for all purposes and to the same extent as if originally a party
hereto and shall be bound by and entitled to the benefits of this Agreement, and
the signature pages hereof shall be deemed to be amended to add the name of such
New Bank and the definition of Commitment in Annex A of the Credit Agreement
hereof shall be deemed amended to increase the aggregate Commitments of the
Banks by the Commitment of such New Bank, provided that the Commitment of any
New Bank shall be an amount not less than $5,000,000.
 
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(c)  Any Bank that accepts an offer to it by the Borrower to increase its
Commitment pursuant to this Section 2.17 shall, in each case, execute a
Commitment Increase Agreement with the Borrower and the Agent, whereupon such
Bank shall be bound by and entitled to the benefits of this Agreement with
respect to the full amount of its Commitment as so increased, and the definition
of Commitment in Annex A hereof shall be deemed to be amended to reflect such
increase.
 
(d)  The effectiveness of any New Bank Agreement or Commitment Increase
Agreement shall be contingent upon receipt by the Agent of such corporate
resolutions of the Borrower and legal opinions of counsel to the Borrower as the
Agent shall reasonably request with respect thereto, in each case in form and
substance reasonably satisfactory to the Agent.
 
(e)  If any bank or financial institution becomes a New Bank pursuant to Section
2.17(b) or any Bank’s Commitment is increased pursuant to Section 2.17(c),
additional Loans made on or after the effectiveness thereof (the “Re-Allocation
Date”) shall be made pro rata based on their respective Commitments in effect on
or after such Re-Allocation Date (except to the extent that any such pro rata
borrowings would result in any Bank making an aggregate principal amount of
Loans in excess of its Commitment, in which case such excess amount will be
allocated to, and made by, such New Bank and/or Banks with such increased
Commitments to the extent of, and pro rata based on, their respective
Commitments), and continuations of Loans outstanding on such Re-Allocation Date
shall be effected by repayment of such Loans on the last day of the Interest
Period applicable thereto and the making of new Loans of the same Type pro rata
based on the respective Commitments in effect on and after such Re-Allocation
Date.
 
(f)  If on any Re-Allocation Date there is an unpaid principal amount of Fixed
Rate Loans or Prime Rate Loans, (i) any such Prime Rate Loans shall be
reallocated immediately among the Banks (including any New Banks and any Banks
that have executed a Commitment Increase Agreement) so that all Borrowing and
Loans that are outstanding are pro rated based on each Bank’s Commitment, after
giving effect to the Re-Allocation Date, and (ii) any such Fixed Rate Loans
shall remain outstanding with the respective holders thereof until the
expiration of their respective Interest Periods (unless the Borrower elects to
prepay any thereof in accordance with the applicable provisions of this
Agreement), and interest on and repayments of all Loans will be paid thereon to
the respective Banks holding same pro rata based on the respective principal
amounts thereof outstanding.
 
ARTICLE III.
CONDITIONS OF CREDIT
 
Section 3.01 Conditions Precedent to the Initial Borrowing. The obligation of
each Bank to make its initial Loan on the occasion of the initial Borrowing
hereunder is subject to the conditions precedent that the Agent shall have
received on or before the date of such initial Borrowing all of the following,
each dated (unless otherwise indicated) the date hereof, in form and substance
reasonably satisfactory to the Bank Group and in such number of counterparts as
may be reasonably requested by the Agent:
 
(a)  The following Loan Documents duly executed by the Persons indicated below:
 
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(i)  this Agreement executed by the Borrower and each member of the Bank Group,
 
(ii)      the Notes executed by the Borrower, and
 
(iii)      the Fee Letter executed by the Borrower and the Agent.
 
(b)  A certificate of a Responsible Officer and of the secretary or an assistant
secretary of the Borrower certifying, inter alia, (i) true and correct copies of
resolutions adopted by the Board of Directors of the Borrower (A) authorizing
the execution, delivery and performance by the Borrower of the Loan Documents to
which it is or will be a party and the Borrowings to be made hereunder and the
consummation of the transactions contemplated thereby, (B) approving the forms
of the Loan Documents to which it is a party and which will be delivered at or
prior to the date of the initial Borrowing and (C) authorizing officers of the
Borrower to execute and deliver the Loan Documents to which it is or will be a
party and any related documents, (ii) true and correct copies of the articles of
incorporation and bylaws (or other similar charter documents) of the Borrower
and (iii) the incumbency and specimen signatures of the officers of the Borrower
executing any documents on behalf of it.
 
(c)  A certificate of a Responsible Officer of the Borrower certifying as to the
satisfaction of the conditions specified in this Article III.
 
(d)  The favorable, signed opinion of Fulbright & Jaworski L.L.P., special
counsel to the Borrower, addressed to the Bank Group, in form and substance
reasonably satisfactory to the Bank Group.
 
(e)  Certificates of appropriate public officials as to the existence and good
standing of the Borrower in the States of Nevada and Texas.
 
(f)  The payment to the Bank Group of the fees due to them as of such date under
the Loan Documents, the payment to the Agent of the fees due to it as of such
date under the Fee Letter, and the payment of all legal fees and expenses of
Andrews Kurth LLP, special counsel to the Agent, in connection with the
preparation of this Agreement and the other Loan Documents and the closing of
this transaction.
 
(g)  All governmental and third party approvals necessary or, in the discretion
of the Agent, advisable in connection with the financing contemplated hereby and
the continuing operations of the Borrower and its Subsidiaries shall have been
obtained and be in full force and effect.
 
(h)  The Bank Group shall have received (i) audited consolidated financial
statements of the Borrower for the two (2) most recent fiscal years ended prior
to the Effective Date as to which such financial statements are available and
(ii) satisfactory unaudited interim consolidated financial statements of the
Borrower for each fiscal quarterly period ended subsequent to the date of the
latest financial statements delivered pursuant to clause (i) of this paragraph
as to which such financial statements are available, which financial statements
shall not be materially inconsistent with the financial statements or forecasts
previously provided.
 
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(i)  There shall have been no Material Adverse Effect in regard to the financial
condition, business, affairs, operations or control of Borrower and no change or
event shall have occurred which would impair the ability of Borrower to perform
its obligations hereunder or under any of the Loan Documents to which it is a
party or of Agent or any Bank to enforce the obligations hereunder since the
date of its financial statements most recently delivered to Agent.
 
(j)  The Bank Group shall have received such documentation and certificates as
Agent may reasonably request confirming no action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any court, governmental agency or legislative body to enjoin, restrain or
prohibit, or to obtain damages in respect of, or which is related to or arises
out of this Agreement or the consummation of the transactions contemplated
hereby or which could reasonably be expected to have a Material Adverse Effect
on Borrower and its Subsidiaries taken as a whole, or in Agent’s judgment, would
make it inadvisable to consummate the transactions contemplated by this
Agreement or any of the other Loan Documents .
 
(k)  A certificate of a Responsible Officer of Borrower certifying that Borrower
and its Subsidiaries are in compliance with all existing Debt obligations.
 
(l)       Such other documents, certificates and opinions as the Agent may
reasonably request relating to this Agreement and the other Loan Documents.
 
Section 3.02 Conditions Precedent to All Borrowings. The obligation of each Bank
to make any Loan shall be subject to the further conditions precedent that (a)
on the Borrowing Date of such Loan the following statements shall be true, and
the Borrower, by virtue of its delivery of a Borrowing Request shall be deemed
to have certified to the Bank Group as of such Borrowing Date that (i) the
representations and warranties contained in Article IV are true and correct on
and as of such Borrowing Date, both before and after giving effect to such Loan,
and as though made on and as of such Borrowing Date and (ii) no Default has
occurred and is continuing, or would result from such Loan and (b) the Agent
shall have received on or before such Borrowing Date such other documents,
certificates and opinions as the Agent may reasonably request relating to this
Agreement and the other Loan Documents, each in form and substance reasonably
satisfactory to the Agent.
 
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
 
In order to induce the Bank Group to enter into this Agreement, the Borrower
hereby represents and warrants to the Bank Group as follows:
 
Section 4.01 Corporate Existence; Etc. Each of the Borrower and each of its
Material Subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, and is
duly qualified or licensed to transact business as a foreign corporation and is
in good standing under the laws of each jurisdiction in which the conduct of its
operations or the ownership or leasing of its properties requires such
qualification or licensing, except where the failure to be so qualified or
licensed will not have a Material Adverse Effect on either the Borrower
individually or the Borrower and its Subsidiaries taken as a whole.
Schedule 4.01 sets forth a complete list (including the Borrower’s percentage
equity interest therein) as of the date hereof of (a) all Consolidated
Subsidiaries (Part A), and (b) all Excluded Affiliates (Part B).
 
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Section 4.02 Corporate Authority; Binding Obligations. Each of the Borrower and
each of its Material Subsidiaries has all requisite power and authority,
corporate or otherwise, to conduct its business and own, operate and encumber
its property. Each of the Borrower and each of its Subsidiaries has all
requisite power and authority, corporate or otherwise, to execute, deliver and
perform all of its obligations under the Loan Documents executed by, or to be
executed by, such Person. The execution, delivery and performance of each of the
Loan Documents to which the Borrower or any of its Subsidiaries is a party and
the consummation of the transactions contemplated thereby, have been duly
authorized by all necessary corporate and shareholder action. Each of the Loan
Documents to which the Borrower or any of its Subsidiaries is a party has been
duly executed and delivered by such Person, is in full force and effect and
constitutes the legal, valid and binding obligation of such Person, enforceable
against it in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditor’s rights generally and general
principles of equity.
 
Section 4.03 No Conflict. The execution, delivery and performance by the
Borrower or any of its Subsidiaries of each Loan Document to which such Person
is a party and the consummation of each of the transactions contemplated thereby
do not and shall not, by the lapse of time, the giving of notice or otherwise:
(a) constitute a violation of any Requirement of Law or a breach of any
provision contained in the articles or certificate of incorporation or bylaws of
such Person, or any shareholder agreement pertaining to such Person, or
contained in any material agreement, instrument or document to which it is now a
party or by which it or its properties is bound, except for such violations or
breaches that will not have a Material Adverse Effect on either the Borrower
individually or the Borrower and its Subsidiaries taken as a whole; or (b)
result in or require the creation or imposition of any Lien whatsoever upon any
of the properties or assets of the Borrower or any of its Subsidiaries.
 
Section 4.04 No Consent. No authorization, consent, approval, license, or
exemption of or filing or registration with, any Governmental Authority or any
other Person, was, is or will be necessary for the valid execution, delivery or
performance by the Borrower or any of its Subsidiaries of any of the Loan
Documents to which it is a party and the consummation of each of the
transactions contemplated thereby other than those that the failure to obtain,
file or make will not have a Material Adverse Effect on either the Borrower
individually or the Borrower and its Subsidiaries taken as a whole.
 
Section 4.05 No Defaults or Violations of Law. No Default has occurred and is
continuing. No default (or event or circumstance occurred which, but for the
passage of time or the giving of notice, or both, would constitute a default)
has occurred and is continuing with respect to any note, indenture, loan
agreement, mortgage, lease, deed or other agreement to which the Borrower or any
of its Subsidiaries is a party or by which any of them or their properties is
bound, except for such defaults that will not have a Material Adverse Effect on
either the Borrower individually or the Borrower and its Subsidiaries taken as a
whole. Neither the Borrower nor any of its Subsidiaries is in violation of any
applicable Requirement of Law except for such violations that will not have a
Material Adverse Effect on either the Borrower individually or the Borrower and
its Subsidiaries taken as a whole.
 
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Section 4.06 Financial Position. (a) The consolidated balance sheet of the
Borrower and its Subsidiaries as at December 31, 2005, and the related
consolidated statements of income, retained earnings and cash flows for the
fiscal year then ended, audited by KPMG LLP, independent public accountants,
copies of which have been furnished to the Bank Group, fairly present the
consolidated financial condition of the Borrower and its Subsidiaries at such
date and the consolidated results of their operations and the consolidated cash
flows of the Borrower and its Subsidiaries for the fiscal period ended on such
date, all in accordance with generally accepted accounting principles applied on
a consistent basis.
 
(b)  The unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as at March 31, 2006, and the related unaudited consolidated
statements of income, retained earnings and cash flows for the three month
period then ended, copies of which have been furnished to the Bank Group, fairly
present the consolidated financial condition of the Borrower and its
Subsidiaries at such date and the consolidated results of their operations and
the consolidated cash flows of the Borrower and its Subsidiaries for the three
month period ended on such date, all in accordance with generally accepted
accounting principles applied on a consistent basis, subject to normal year-end
adjustments.
 
(c)  Since December 31, 2005, there has been no Material Adverse Effect in
regard to the consolidated financial condition or operations of the Borrower and
its Material Subsidiaries, taken as a whole.
 
Section 4.07 Litigation. There are no actions, suits or proceedings pending or,
to the knowledge of the Borrower, threatened against or affecting the Borrower
or any of its Subsidiaries, or the properties of any such Person, before or by
any Governmental Authority or other Person, which could reasonably be expected
to have a Material Adverse Effect on either the Borrower individually or the
Borrower and its Subsidiaries taken as a whole.
 
Section 4.08 Use of Proceeds. (a)  The Borrower’s uses of the proceeds of the
Loans are, and will continue to be, legal and proper corporate uses (duly
authorized by the Borrower’s board of directors), and such uses are permitted by
the terms of the Loan Documents, including, without limitation, Section 5.09,
and all Requirements of Law.
 
(b)  Neither the Borrower nor any of its Subsidiaries is engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U). No part of the proceeds of any Loan will
be used, directly or indirectly, (i) to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any margin
stock or (ii) for the purpose of purchasing, carrying or trading in any
securities, in either case under such circumstances as to involve any member of
the Bank Group in a violation of Regulation U or the Borrower or any of its
Subsidiaries in a violation of Regulation X. Following the application of the
proceeds of each Loan, not more than 25% of the value of the assets of the
Borrower, or of the Borrower and its Subsidiaries, which are subject to any
arrangement with any member of the Bank Group (herein or otherwise) whereby the
right or ability of the Borrower or its Subsidiaries to sell, pledge or
otherwise dispose of such assets is in any way restricted, will be such margin
stock.
 
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Section 4.09 Governmental Regulation. Neither the Borrower nor any of its
Subsidiaries is subject to regulation under the Interstate Commerce Act, as
amended, the Investment Company Act of 1940, as amended, or any other
Requirement of Law such that the ability of any such Person to incur
indebtedness is limited or its ability to consummate the transactions
contemplated by this Agreement, the other Loan Documents or any document
executed in connection therewith is impaired.
 
Section 4.10 Disclosure. The schedules, documents, exhibits, reports,
certificates and other written statements and information furnished by or on
behalf of the Borrower or any of its Subsidiaries to the Bank Group do not
contain any material misstatement of fact, or omit to state a material fact
necessary in order to make the statements contained therein, in light of the
circumstances under which they were made, not misleading. Neither the Borrower
nor any of its Subsidiaries has intentionally withheld any fact known to it
which has or is reasonably likely to have a Material Adverse Effect on either
the Borrower individually or the Borrower and its Subsidiaries taken as a whole.
 
Section 4.11 ERISA. The Borrower and its ERISA Affiliates are in compliance in
all material respects with ERISA and all Requirements of Law related thereto. No
Reportable Event has occurred and is continuing with respect to any Plan.
Neither the Borrower nor any of its ERISA Affiliates has any accumulated funding
deficiency (as defined in Section 302(a)(2) of ERISA) under any Plan.
 
Section 4.12 Payment of Taxes. The Borrower has filed, and has caused each of
its Material Subsidiaries to file, all federal, state and local tax returns and
other reports that the Borrower and each such Material Subsidiary are required
by law to file and have paid all taxes and other similar charges that are due
and payable pursuant to such returns and reports, except to the extent any of
the same may be contested in good faith by appropriate proceedings promptly
initiated and diligently conducted, and with respect to which adequate reserves
have been set aside on the books of such Person in accordance with generally
accepted accounting principles.
 
Section 4.13 Properties; Title and Liens. (a)  Each of the Borrower and its
Material Subsidiaries has good and marketable title to each of the material
properties and assets of such Person. All properties of the Borrower and its
Material Subsidiaries and such Person’s use thereof comply with applicable
zoning and use restrictions, except where the failure to so comply will not have
a Material Adverse Effect upon any such Person.
 
(b)  Each of the Borrower and its Subsidiaries owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Borrower and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringement that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
 
Section 4.14 Pari Passu Ranking. The obligations of the Borrower to pay the
principal of and interest on the Loans and all other amounts payable under the
Loan Documents will rank at least pari passu as to payment with all other Debt
of the Borrower now existing or hereafter incurred.
 
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Section 4.15 Environmental Matters. The Borrower and each of its Subsidiaries
possess all environmental, health and safety licenses, permits, authorizations,
registrations, approvals and similar rights necessary under law or otherwise for
such Person to conduct its operations as now being conducted, each of such
licenses, permits, authorizations, registrations, approvals and similar rights
is valid and subsisting, in full force and effect and enforceable by such
Person, and such Person is in compliance with all terms, conditions or other
provisions of such permits, authorizations, registrations, approvals and similar
rights except for such noncompliance that will not have a Material Adverse
Effect on either the Borrower individually or the Borrower and its Subsidiaries
taken as a whole. Neither the Borrower nor any of its Subsidiaries has received
any notices of any violation of, noncompliance with, or remedial obligation
under, Requirements of Environmental Laws, and there are no writs, injunctions,
decrees, orders or judgments outstanding, or lawsuits, claims, proceedings,
investigations or inquiries pending or, to the knowledge of the Borrower,
threatened, relating to the ownership, use, condition, maintenance, or operation
of, or conduct of business related to, any property owned, leased or operated by
the Borrower or any of its Subsidiaries, or other assets of the Borrower or any
of its Subsidiaries, other than those violations, instances of noncompliance,
obligations, writs, injunctions, decrees, orders, judgments, lawsuits, claims,
proceedings, investigations or inquiries that will not have a Material Adverse
Effect on either the Borrower individually or the Borrower and its Subsidiaries
taken as a whole. There are no material obligations, undertakings or liabilities
arising out of or relating to Environmental Laws to which the Borrower or any of
its Material Subsidiaries has agreed to, assumed or retained, or by which the
Borrower or any of its Material Subsidiaries is adversely affected, by contract
or otherwise. Neither the Borrower nor any of its Material Subsidiaries has
received a written notice or claim to the effect that such Person is or may be
liable to any Person as the result of a Release or threatened Release of a
Hazardous Material.
 
Section 4.16 No Undisclosed Liabilities. Except as set forth in Schedule 4.16,
the Borrower and its Subsidiaries have no liabilities or obligations of any
nature (whether known or unknown, and whether absolute, accrued, contingent or
otherwise) except for (i) liabilities or obligations reflected or reserved
against in the financial statements most recently delivered by the Borrower
pursuant to Section 5.01, (ii) current liabilities incurred in the ordinary
course of business since the date of such financial statements, (iii)
liabilities or obligations that are not required to be included in financial
statements prepared in accordance with generally accepted accounting principles,
and (iv) liabilities or obligations arising under governmental approvals or
contracts to which the Borrower or its Subsidiaries is a party or otherwise
subject.
 
Section 4.17 Labor Matters. As of the Effective Date, there are no strikes,
lockouts or slowdowns against the Borrower or its Subsidiaries pending or, to
the knowledge of the Borrower, threatened. The hours worked by and payments made
to employees of the Borrower and its Subsidiaries have not been in violation of
the Fair Labor Standards Act or any other Requirement of Law dealing with such
matters in any manner that could reasonably be expected to have a Material
Adverse Effect. All payments due from the Borrower or any Subsidiary, or for
which any claim may be made against any of them, on account of wages and
employee health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of the Borrower and its Subsidiaries. The
consummation of the transactions contemplated by the Loan Documents will not
give rise to any right of termination or right of renegotiation on the part of
any union under any collective bargaining agreement to which the Borrower or any
of its Subsidiaries is bound.
 
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ARTICLE V.
AFFIRMATIVE COVENANTS
 
So long as any principal amount of any Loan, any amount of interest accrued
under any Loan Document, or any commitment, facility or other fee, expense,
compensation or any other amount payable to any member of the Bank Group under
the Loan Documents shall remain unpaid or outstanding or any Bank shall have any
Commitment hereunder:
 
Section 5.01 Reporting Requirements. The Borrower shall deliver or cause to be
delivered to the Agent (with sufficient copies for the Agent to distribute the
same to the other members of the Bank Group):
 
(a)  As soon as available and in any event within forty five (45) days after the
end of each calendar quarter (other than the fourth quarter):
 
(i)      copies of the consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries as of the end of such period, and consolidated and
consolidating statements of income and retained earnings and a statement of cash
flows of the Borrower and its Subsidiaries for that fiscal period and for the
portion of the fiscal year ending with such period, in each case setting forth
in comparative form (on a consolidated, but not a consolidating basis) the
figures for the corresponding period of the preceding fiscal year, all in
reasonable detail; and
 
(ii)  a certificate of a Responsible Officer of the Borrower (A) stating that
such financial statements fairly present the consolidated financial position and
results of operations of the Borrower and its Subsidiaries in accordance with
generally accepted accounting principles consistently applied, subject to normal
year-end adjustments, (B) stating that no Default has occurred and is continuing
or, if any Default has occurred and is continuing, the action the Borrower is
taking or proposes to take with respect thereto, (C) setting forth calculations
demonstrating compliance by the Borrower with Section 6.01 and Section 6.07,
accompanied by a summary (on an entity-by-entity basis) of Investments in
Excluded Affiliates and Funded Debt of the Borrower and its Consolidated
Subsidiaries, as well as any Funded Debt resulting from a Guaranty of Debt of an
Excluded Affiliate, and (D) identifying any changes in the Consolidated
Subsidiaries and Excluded Affiliates since the date of the most recent
certificate delivered pursuant to this Section 5.01(a)(ii) or Section
5.01(b)(ii) (or in the case of the initial certificate, any changes from those
specified in Schedule 4.01).
 
(b)  As soon as available and in any event within ninety (90) days after the end
of each calendar year:
 
(i)       copies of the consolidated and consolidating balance sheet of the
Borrower and its Subsidiaries as of the close of such calendar year and
consolidated and consolidating statements of income and retained earnings and a
statement of cash flows of the Borrower and its Subsidiaries for such calendar
year, in each case setting forth in comparative form (on a consolidated basis)
the figures for the preceding calendar year, all in reasonable detail and
accompanied by an opinion thereon (which shall not be qualified by reason of any
limitation imposed by the Borrower) of independent accountants of recognized
national standing selected by the Borrower and reasonably satisfactory to the
Majority Banks, to the effect that such consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
consistently applied (except for changes in which such accountants concur) and
that the examination of such accounts in connection with such financial
statements has been made in accordance with generally accepted auditing
standards; and
 
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(ii)  a certificate of a Responsible Officer of the Borrower (A) stating that no
Default has occurred and is continuing or, if any Default has occurred and is
continuing, the action the Borrower is taking or proposes to take with respect
thereto, (B) setting forth calculations demonstrating compliance by the Borrower
with Section 6.01 and Section 6.07, accompanied by a summary (on an
entity-by-entity basis) of Investments in Excluded Affiliates and Funded Debt of
the Borrower and its Consolidated Subsidiaries, as well as any Funded Debt
resulting from a Guaranty of Debt of an Excluded Affiliate, and (C) identifying
any changes in the Consolidated Subsidiaries and Excluded Affiliates since the
date of the most recent certificate delivered pursuant to Section 5.01(a)(ii) or
this Section 5.01(b)(ii).
 
(c)  Promptly after the sending or filing thereof, copies of all proxy
statements and reports which the Borrower or any of its Subsidiaries sends to
any holders of its respective securities, and copies of all regular, periodic
and special reports and all registration statements which the Borrower or any of
its Subsidiaries files with the Securities and Exchange Commission or any
national securities exchange.
 
(d)  Promptly after the receipt thereof, copies of any reports or notices that
the Borrower may receive from the PBGC or the U. S. Department of Labor
indicating that a Reportable Event has occurred or an accumulated funding
deficiency (as defined in Section 302(a)(2) of ERISA) exists under any Plan or
that any such Person or its ERISA Affiliates has failed to comply in all
material respects with ERISA and all Requirements of Law related thereto.
 
(e)  As soon as possible and in any event within ten (10) days after a
Responsible Officer of the Borrower becomes aware of the occurrence of a
Default, a certificate of a Responsible Officer of the Borrower setting forth
details of such Default and the action which has been taken or is to be taken
with respect thereto.
 
(f)  As soon as possible and in any event within ten (10) days after a
Responsible Officer of the Borrower becomes aware thereof, written notice from a
Responsible Officer of the Borrower of (i) the institution of or threat of, any
action, suit, proceeding, governmental investigation or arbitration by any
Governmental Authority or other Person against or affecting the Borrower or any
of its Subsidiaries that could have a Material Adverse Effect on the Borrower or
any of its Material Subsidiaries and that has not previously disclosed in
writing to the Bank Group pursuant to this Section 5.01(f) or (ii) any material
development in any action, suit, proceeding, governmental investigation or
arbitration already disclosed to the Bank Group pursuant to this Section
5.01(f).
 
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(g)  Promptly upon a Responsible Officer of the Borrower obtaining knowledge
thereof, notice of (i) any violation of, noncompliance with, or remedial
obligations under, Requirements of Environmental Laws that could have a Material
Adverse Effect on the Borrower or any of its Material Subsidiaries, (ii) any
Release or threatened Release affecting any property owned, leased or operated
by the Borrower or any of its Subsidiaries that could have a Material Adverse
Effect on the Borrower or any of its Material Subsidiaries, (iii) the amendment
or revocation of any permit, authorization, registration, approval or similar
right that could have a Material Adverse Effect on the Borrower or any of its
Material Subsidiaries or (iv) new or proposed changes to Requirements of
Environmental Laws that could have a Material Adverse Effect on the Borrower or
any of its Material Subsidiaries.
 
(h)  Such other information as any member of the Bank Group may from time to
time reasonably request respecting the business, properties, operations or
condition, financial or otherwise, of the Borrower or any of its Subsidiaries.
 
Section 5.02 Taxes; Claims. The Borrower will pay and discharge, and will cause
each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon such Person or upon its income or
profits, or upon any properties belonging to such Person, prior to the date on
which penalties attach thereto, and all lawful claims which, if unpaid, might
become a Lien upon any properties of the Borrower or any of its Material
Subsidiaries, other than any such tax, assessment, charge, levy or claim which
is being contested in good faith by appropriate proceedings promptly initiated
and diligently conducted, and with respect to which adequate reserves are set
aside on the books of such Person in accordance with generally accepted
accounting principles.
 
Section 5.03 Compliance with Laws and Agreements. The Borrower will comply, and
will cause each of its Subsidiaries to comply, with all applicable Requirements
of Law imposed by any Governmental Authority and all indentures, notes, loan
agreements, mortgages, leases, material agreements and other material
instruments binding upon it or its property, noncompliance with which might have
a Material Adverse Effect on the Borrower or any of its Material Subsidiaries.
Without limitation of the foregoing, the Borrower shall, and shall cause each of
its Subsidiaries to, comply with all Requirements of Environmental Laws, operate
its properties and conduct its business in accordance with good environmental
practices, and handle, treat, store and dispose of Hazardous Materials in
accordance with such practices, except where the failure to do so will not have
a Material Adverse Effect on the Borrower or any of its Material Subsidiaries.
 
Section 5.04 Insurance. The Borrower will maintain, and will cause each of its
Subsidiaries to maintain, with financially sound, responsible and reputable
insurance companies or associations, insurance, or self-insure against such
risks, and in such amounts (and with co-insurance and deductibles), as are
usually insured against by Persons of established reputation engaged in the same
or similar businesses and similarly situated.
 
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Section 5.05 Corporate Existence; Etc. The Borrower will preserve and maintain,
and (except as otherwise permitted by Section 6.04 and 6.06) will cause each of
its Material Subsidiaries to preserve and maintain, its existence, rights,
franchises and privileges in the jurisdiction of its incorporation, and qualify
and remain qualified, and cause each of its Material Subsidiaries to qualify and
remain qualified, as a foreign corporation in each jurisdiction in which such
qualification is material to the business and operations of such Person or the
ownership or leasing of the properties of such Person. The Borrower will, and
will cause each of its Subsidiaries to, carry on and conduct its business in
substantially the same manner and in substantially the same lines of business as
it is presently conducted, provided that the Borrower may, in its reasonable
business judgment, dispose of any subsidiary or exit any line of business if it
determines it to be in the Borrower’s best interest to do so, subject to the
provisions of Sections 6.04 and 6.06.
 
Section 5.06 Inspections; Etc. From time to time during regular business hours
upon reasonable prior notice, the Borrower will permit, and will cause each of
its Subsidiaries to permit, any agents or representatives of any member of the
Bank Group to examine and make copies of and abstracts from the records and
books of account of, and visit the properties of, the Borrower and its
Subsidiaries and to discuss the affairs, finances and accounts of any such
Person with any of their respective independent public accountants, officers or
directors, all at the expense of the Borrower.
 
Section 5.07 Maintenance of Properties. The Borrower will maintain and preserve,
and will cause each of its Material Subsidiaries to maintain and preserve, all
of its material properties necessary for the proper conduct of its business in
good working order and condition, ordinary wear and tear excepted.
 
Section 5.08 Accounting Systems; Etc. The Borrower will keep, and will cause
each of its Subsidiaries to keep, adequate records and books of account in which
complete entries will be made in accordance with generally accepted accounting
principles consistently applied (subject to year end adjustments), reflecting
all financial transactions of such Person. The Borrower shall maintain or cause
to be maintained a system of accounting established and administered in
accordance with sound business practices to permit preparation of financial
statements in conformity with generally accepted accounting principles, and each
of the financial statements described herein shall be prepared from such system
and records.
 
Section 5.09 Use of Loan Proceeds. The Borrower will use the proceeds of all
Loans hereunder for the following purposes: (a) for general corporate purposes
of the Borrower and its Consolidated Subsidiaries, (b) payment of all amounts
owing by the Borrower under this Agreement, (c) to fund any cash consideration
payable by the Borrower or any of its Consolidated Subsidiaries in connection
with a merger or acquisition which is not prohibited by Section 6.06 or Section
6.07, or (d) to fund Investments in Excluded Affiliates permitted by Section
6.07; provided that such uses are, at the time made, otherwise consistent with
the terms of this Agreement and all Requirements of Law and no Default would
result therefrom.
 
Section 5.10 Further Assurances in General. The Borrower at its expense shall,
and shall cause each of its Subsidiaries to, promptly execute and deliver all
such other and further documents, agreements and instruments in compliance with
or accomplishment of the covenants and agreements of the Borrower or any of its
Subsidiaries in the Loan Documents, including, without limitation, the
accomplishment of any condition precedent that may have been waived by the Banks
prior to the initial Borrowing or any subsequent Borrowings.
 
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ARTICLE VI.
NEGATIVE COVENANTS
 
So long as any principal amount of any Loan, any amount of interest accrued
under any Loan Document, or any commitment, facility or other fee, expense,
compensation or any other amount payable to any member of the Bank Group under
the Loan Documents shall remain unpaid or outstanding or any Bank shall have any
Commitment hereunder:
 
Section 6.01 Financial Covenants. The Borrower will not:
 
(a)  Interest Coverage Ratio. Permit the ratio of (i) EBITDA to (ii) Interest
Expense, measured as of the last day of any calendar quarter for the twelve
month period then ended to be less than 2.5 to 1.0.
 
(b)  Debt to Capitalization Ratio. Permit the ratio of (i) Funded Debt as of the
last day of any calendar quarter to (ii) Total Capitalization for the twelve
month period then ended to equal or exceed 0.6 to 1.0.
 
Section 6.02 Restrictions on Debt. (a) The Borrower will not, and will not
permit any of its Consolidated Subsidiaries to, create, incur, assume or suffer
to exist, any Debt, including obligations in respect of Capital Leases, other
than:
 
(i)       Debt of the Borrower under the Loan Documents, and, prior to the
initial Borrowing hereunder, the loans outstanding under the Existing Credit
Agreement;
 
(ii)  unsecured Debt owing by the Borrower to any Consolidated Subsidiary;
 
(iii)     unsecured Debt owing by any Consolidated Subsidiary to the Borrower or
any other Consolidated Subsidiary so long as such Debt ranks pari passu with all
other Debt of such Consolidated Subsidiary;
 
(iv)     Debt (other than Derivative Obligations) of Consolidated Subsidiaries,
so long as (A) no Default or Event of Default exists on the date such Debt is
incurred or would result from the incurrence of such Debt, and (B) the aggregate
amount of such Debt does not exceed ten percent (10%) of Net Worth;
 
(v)      Debt (other than Derivative Obligations) of the Borrower, so long as
(A) such Debt is not Guaranteed by any Subsidiary of the Borrower and (B) no
Default or Event of Default exists on the date such Debt is incurred or would
result from the incurrence of such Debt; and
 
(vi)     Derivative Obligations of the Borrower and its Consolidated
Subsidiaries, so long as (A) no Default or Event of Default exists on the date
such Derivative Obligations are incurred or would result from the incurrence
thereof and (B) the aggregate amount of such Derivative Obligations does not
exceed ten percent (10%) of Net Worth.
 
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(b)  The Borrower will not, and will not permit any of its Consolidated
Subsidiaries to, create, incur, assume or suffer to exist, any Guaranties or
other contingent liabilities other than (i) Guaranties by Consolidated
Subsidiaries that constitute Debt permitted by Section 6.02(a)(iv), (ii)
Guaranties by the Borrower that constitute Debt permitted by Section 6.02(a)(v),
(iii) other contingent liabilities (including undrawn letters of credit not
issued under the Agreement) in an amount not exceeding $10,000,000 at any time,
and (iv) contingent liabilities arising under guaranties by the Borrower or its
Subsidiaries of the obligations of the Borrower’s Subsidiaries under
Environmental Laws, including the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, and the Oil Pollution Act of 1990,
as amended.
 
(c)  The Borrower will not permit any Excluded Affiliate to create, incur,
assume or suffer to exist any Debt unless the agreements evidencing or providing
for such Debt contain a provision to the effect that the holders of such Debt
shall have no recourse against the Borrower or any of its Consolidated
Subsidiaries, or any of their respective assets, for the payment of such Debt;
provided, however, that the foregoing shall not apply to any such Debt of an
Excluded Affiliate that is covered by a Guaranty from the Borrower or a
Consolidated Subsidiary permitted by Section 6.02(b).
 
Section 6.03 Restriction on Liens. The Borrower will not, and will not permit
any of its Consolidated Subsidiaries to, create, incur, assume or suffer to be
created, assumed or incurred or to exist, any Lien upon any of their property or
assets, whether now owned or hereafter acquired other than:
 
(a)  Liens against assets of the Borrower or a Consolidated Subsidiary securing
Debt of such Person, so long as (i) the aggregate amount of all such secured
Debt does not exceed $5,000,000, and (ii) such secured Debt is otherwise
permitted by Section 6.02(a)(v), in the case of the Borrower, or Section
6.02(a)(iv), in the case of a Consolidated Subsidiary;
 
(b)  Liens imputed to Capital Leases under which a Consolidated Subsidiary is
the lessee, so long as the Debt of such Consolidated Subsidiary in respect of
such Capital Lease is permitted by Section 6.02(a)(iv);
 
(c)  Liens on property of any Consolidated Subsidiary that attach concurrently
with such Consolidated Subsidiary’s purchase thereof, and securing only Debt of
such Consolidated Subsidiary permitted by Section 6.02(a)(iv) and incurred to
finance all or part of the purchase price of such property, and any extensions
and renewals of such Liens so long as the Debt secured thereby is not greater
than the Debt secured immediately prior to such extension and renewal and such
Debt is permitted by Section 6.02(a)(iv) at the time of such extension and
renewal;
 
(d)  Liens for taxes, assessments or governmental charges or levies if the same
shall at the time not be delinquent or thereafter may be paid without penalty,
or the validity of which are being contested in good faith by appropriate
proceedings promptly initiated and diligently conducted and as to which adequate
reserves shall have been set aside on the books of the Borrower in accordance
with generally accepted accounting principles;
 
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(e)  carriers’, warehousemen’s and mechanics’ liens and other similar Liens
which arise in the ordinary course of business, do not materially impair the use
or value of its properties or assets or the conduct of its business, and secure
obligations that are not yet due and payable or are being contested in good
faith by appropriate proceedings promptly initiated and diligently conducted and
as to which adequate reserves shall have been set aside on the books of the
Borrower in accordance with generally accepted accounting principles or as to
which adequate bonds shall have been obtained;
 
(f)  pledges or deposits to secure obligations under workmen’s compensation laws
or similar legislation or to secure public or statutory obligations of the
Borrower;
 
(g)  Liens created in favor of a Governmental Authority to secure partial,
progress, advance or other contractual payments pursuant to any agreement or
statute;
 
(h)  attachment, judgment and other similar Liens arising in connection with
court proceedings, provided the execution or other enforcement of such Liens is
effectively stayed and the claims secured thereby are being actively contested
in good faith and by appropriate proceedings in such manner as not to have the
property subject to such Liens forfeitable; and
 
(i)       easements, rights-of-way, reservations, exceptions, minor
encroachments, restrictions and similar charges created or incurred in the
ordinary course of business which in the aggregate do not materially interfere
with the business operations of the Borrower and its Subsidiaries taken as a
whole, and which were not incurred in connection with the borrowing of money.
 
Section 6.04 Consolidated Subsidiary Dispositions. The Borrower will not, and
will not permit any of its Subsidiaries to, sell, transfer or otherwise dispose
of (i) any capital stock or other equity interests of any Consolidated
Subsidiary or (ii) all or substantially all of the assets of any Consolidated
Subsidiary (whether in a single transaction or series of transactions), in
excess of ten percent (10%) of the Consolidated Net Worth of Borrower and its
Consolidated Subsidiaries during any rolling twelve (12) month period, other
than any such dispositions made to the Borrower or a wholly-owned Consolidated
Subsidiary.
 
Section 6.05 Restrictions on Consolidated Subsidiary Distributions. The Borrower
will not, and will not permit any of its Subsidiaries to, enter into any
agreement restricting the ability of any Consolidated Subsidiary to (a) pay
dividends or make other distributions on the capital stock or other equity
interests of such Consolidated Subsidiary or (b) make loans or advances to the
Borrower or any Subsidiary of the Borrower, other than this Agreement.
 
Section 6.06 Mergers and Acquisitions. The Borrower will not, and will not
permit any of its Consolidated Subsidiaries to, acquire (whether in one
transaction or a series of transactions) all or substantially all of the assets
of any Person or the capital stock or securities of any Person, or consolidate
with or merge into any Person or permit any Person to consolidate or merge into
it, unless: (a) any business acquired in such transaction is similar or related
to the businesses engaged in by the Borrower and its Consolidated Subsidiaries
on the date hereof; (b) in the case of a merger (i) if the Borrower is a party
to such merger, the Borrower is the surviving entity and the management of the
Borrower shall be substantially unchanged and (ii) if a Consolidated Subsidiary
is a party to such merger, either the Borrower or a Consolidated Subsidiary is
the surviving entity; and (d) immediately after giving effect and pro forma
effect thereto, no Default shall exist. The Agent shall have received (A) a
certificate of a Responsible Officer of the Borrower showing satisfaction of the
condition set forth in this Section 6.06, and (B) such other documents, opinions
and information that the Agent or the Majority Banks may reasonably request in
order to substantiate the same.
 
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Section 6.07 Restricted Investments. (a) The Borrower will not, and will not
permit any Consolidated Subsidiary to, make, or enter into any commitment to
make, any Restricted Investment if a Default exists either before or after
giving effect thereto.
 
(b)  The Borrower will not, and will not permit any Consolidated Subsidiary to,
make, or enter into any commitment to make, or permit to exist any Restricted
Investment other than Restricted Investments that do not in the aggregate exceed
twenty percent (20%) of Net Worth.
 
(c)  The Borrower will not permit the sum (without duplication) of (i) all
Restricted Investments, made by the Borrower and its Consolidated Subsidiaries,
plus (ii) all commitments by the Borrower and its Consolidated Subsidiaries to
make Restricted Investments, plus (iii) all Debt (other than Derivative
Obligations) of Consolidated Subsidiaries, to at any time exceed thirty-five
percent (35%) of Net Worth.
 
Section 6.08 Lines of Business. The Borrower will not, and will not permit any
of its Consolidated Subsidiaries to, directly or indirectly engage to a material
extent in any business other than those in which it is presently engaged or that
are directly related thereto, or discontinue any of its existing lines of
business or substantially alter its method of doing business.
 
Section 6.09 Transactions with Affiliates. Neither the Borrower, nor any of its
Consolidated Subsidiaries, will enter into any transaction with an Affiliate
other than (a) transactions entered into in the ordinary course of business and
upon terms no less favorable than those that the Borrower or its Consolidated
Subsidiary, as applicable, could obtain in an arms length transaction with a
Person that is not an Affiliate and (b) transactions between the Borrower and
any of its Consolidated Subsidiaries, or between such Consolidated Subsidiaries,
that do not and will not, either directly or indirectly, cause a Default.
 
Section 6.10 Restricted Payments. The Borrower will not, and will not permit any
of its Subsidiaries to, at any time, declare or make, any Restricted Payment
unless, immediately after giving effect to such action, no Default or Event of
Default would exist; provided, any Subsidiary may pay a dividend of any type to
the Borrower.
 
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ARTICLE VII.
DEFAULT
 
Section 7.01 Events of Default. If any of the following events (each an “Event
of Default”) shall occur and be continuing:
 
(a)  the Borrower shall fail to pay when due any installment of principal of the
Loans; or
 
(b)  the Borrower shall fail to pay any interest on any Loan or any arrangement
fee, commitment fee, administration fee, commission, expense, compensation,
reimbursement or other amount when due, or any Person (other than a member of
the Bank Group) shall fail to pay any amount payable by such Person hereunder or
under any other Loan Document or other agreement or security document
contemplated by or delivered pursuant to or in connection with this Agreement
when due, and, in either event, such failure shall continue for five (5)
Business Days; or
 
(c)  the Borrower shall fail to perform any term, covenant or agreement
contained in Article VI or Section 5.01(e) of this Agreement; or
 
(d)  the Borrower shall fail to perform any term, covenant or agreement
contained in this Agreement (other than those referenced in subsections (a), (b)
and (c) of this Section 7.01) and such failure shall not have been remedied
within ten (10) days after the earlier of (i) notice thereof from the Agent to
the Borrower or (ii) discovery thereof by the Borrower; or
 
(e)  any Person (other than a member of the Bank Group) shall fail to perform
any term, covenant or agreement contained in any Loan Document (other than those
referenced in subsections (a), (b), (c) and (d) of this Section 7.01) to which
it is a party and such failure shall not have been remedied within thirty (30)
days after the earlier of (i) notice thereof from the Agent to the Borrower or
(ii) discovery thereof by the Borrower; or
 
(f)  any representation or warranty made by any Person (other than a member of
the Bank Group), or any such Person’s officers, in any Loan Document to which it
is a party or in any certificate, agreement, instrument or statement
contemplated by or delivered pursuant to, or in connection with, any Loan
Document shall prove to have been incorrect in any material respect when made or
deemed made; or
 
(g)  the Borrower or any of its Subsidiaries shall (i) default in the payment of
any Debt (other than the amounts referred to in subsections (a) and (b) of this
Section 7.01) owing by such Person that constitutes Material Debt as of the date
of such default, or any interest or premium thereon, when due (or, if permitted
by the terms of the relevant document, within any applicable grace period),
whether such Debt shall become due by scheduled maturity, by required
prepayment, by acceleration, by demand or otherwise; or (ii) fail to perform any
term, covenant or condition on its part to be performed under any agreement or
instrument evidencing, securing or relating to any such Debt, when required to
be performed, and such failure shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such failure
is to accelerate, or to permit the holder or holders of such Debt to accelerate,
the maturity of such Debt; or
 
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(h)  any Loan Document shall (other than with the consent of the Banks required
pursuant to Section 9.02), at any time after its execution and delivery and for
any reason, cease to be in full force and effect (except for such provisions
that the Banks required to give consent pursuant to Section 9.02 determine are
not material either individually or in the aggregate), or shall be declared to
be null and void, or the validity or enforceability thereof shall be contested
by any Person party to the Loan Documents or any such Person shall deny that it
has any or further liability or obligation under any Loan Document; or
 
(i)        any Reportable Event that might constitute grounds for the
termination of any Plan, or for the appointment by an appropriate United States
district court of a trustee to administer any Plan, shall have occurred and be
continuing for at least thirty (30) days, or any Plan shall be terminated, or a
trustee shall be appointed by an appropriate United States district court to
administer any Plan, or the PBGC shall institute proceedings to terminate any
Plan or to appoint a trustee to administer any Plan, and, in any such event, the
then-current value of such Plan’s benefits guaranteed under Title IV of ERISA at
the time shall exceed by more than $5,000,000 the then-current value of such
Plan’s assets allocable to such benefits at such time; or
 
(j)        the Borrower or any of its Subsidiaries shall be adjudicated
insolvent, or shall make a general assignment for the benefit of creditors, or
any proceeding shall be instituted by any such Person seeking to adjudicate it
insolvent, seeking liquidation, winding-up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any substantial part of its
property, or the Borrower or any of its Subsidiaries shall take any action in
furtherance of any of the actions set forth above in this Section 7.01(j); or
 
(k)  any proceeding of the type referred to in Section 7.01(j) is filed, or any
such proceeding is commenced against the Borrower or any of its Subsidiaries or
any such Person by any act indicates its approval thereof, consent thereto or
acquiescence therein, or an order for relief is entered in an involuntary case
under the bankruptcy law of the United States, or an order, judgment or decree
is entered appointing a trustee, receiver, custodian, liquidator or similar
official or adjudicating any such Person insolvent, or approving the petition in
any such proceedings, and such order, judgment or decree remains in effect for
sixty (60) days; or
 
(l)        a final judgment or order for the payment of money in excess of
$5,000,000 (net of acknowledged, uncontested insurance coverage from a
financially sound, responsible and reputable insurance company or association)
shall be rendered against the Borrower or any of its Subsidiaries and either (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) a stay of enforcement of such judgment or order by
reason of a pending appeal or otherwise, shall not be in effect for any period
of thirty (30) consecutive days; or
 
(m)  a Change of Control occurs with respect to the Borrower;
 
then, (i) upon the occurrence of any Event of Default described in Section
7.01(j) or Section 7.01(k), (A) the Commitments shall automatically terminate
and (B) the entire unpaid principal amount of all Loans, all interest accrued
and unpaid thereon, and all other amounts payable by the Borrower or any other
Person under this Agreement, the Notes and the other Loan Documents shall
automatically become immediately due and payable, without presentment for
payment, demand, protest, notice of intent to accelerate, notice of acceleration
or further notice of any kind, all of which are hereby expressly waived by the
Borrower and each other Person, and (ii) upon the occurrence of any Event of
Default, the Agent may, and upon the direction of the Majority Banks shall, by
notice to the Borrower (A) declare the Commitments to be terminated, whereupon
the same shall forthwith terminate and (B) declare the entire unpaid principal
amount of all Loans, all interest accrued and unpaid thereon, and all other
amounts payable by the Borrower or any other Person under this Agreement, the
Notes and the other Loan Documents, to be forthwith due and payable, whereupon
all such amounts shall become and be forthwith due and payable, without
presentment for payment, demand, protest, notice of intent to accelerate, notice
of acceleration or further notice of any kind, all of which are hereby expressly
waived by the Borrower and each other Person.
 
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Section 7.02 Setoff in Event of Default. Upon the occurrence and during the
continuance of any Event of Default, each member of the Bank Group is hereby
authorized, at any time and from time to time, without notice to the Borrower
(any such notice being expressly waived by the Borrower) and to the fullest
extent permitted by applicable law, to setoff and apply any and all deposits at
any time held and other indebtedness at any time owing by such member of the
Bank Group (or any branch, subsidiary or affiliate of such member of the Bank
Group) to or for the credit or the account of the Borrower against any and all
of the obligations of the Borrower or any other Person, now or hereafter
existing under this Agreement, the Notes or the other Loan Documents,
irrespective of whether or not such member of the Bank Group shall have made any
demand for satisfaction of such obligations and although such obligations may be
unmatured. Any member of the Bank Group exercising such right agrees to notify
the Borrower promptly after any such setoff and application made by such Person;
provided, that the failure to give such notice shall not affect the validity of
such setoff and application. The rights of the Bank Group under this Section
7.02 are in addition to other rights and remedies (including, without
limitation, other rights of setoff) which the Bank Group may have hereunder or
under any applicable law.
 
Section 7.03 No Waiver; Remedies. No failure on the part of any member of the
Bank Group to exercise, or any delay in exercising, any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies provided in this Agreement are cumulative and
not exclusive of any remedies provided in any of the other Loan Documents or by
applicable law.
 
Section 7.04 No Preservation of Security for Unmatured Reimbursement
Obligations. In the event that, following (i) the occurrence and during the
continuation of an Event of Default and the exercise of any rights available to
Agent, Issuer or any Bank under the Loan Documents and (ii) payment in full of
the principal amount then outstanding of and the accrued interest on the Loans
and fees and all other amounts payable hereunder and under the Notes, any
Letters of Credit shall remain outstanding and undrawn, Agent shall be entitled
to hold (and Borrower hereby grants and conveys to Agent a security interest in
and to) all cash or other Property (“Proceeds of Remedies”) realized or arising
out of the exercise of any rights available under the Loan Documents, at law or
in equity, including, without limitation, the proceeds of any foreclosure, as
collateral for the payment of any amounts due or to become due under or in
respect of such outstanding Letters of Credit. Such Proceeds of Remedies shall
be held by the Agent for the ratable benefit of the Banks. The rights, titles,
benefits, privileges, duties and obligations of Agent with respect thereto shall
be governed by the terms and provisions of this Agreement. Agent may, but shall
have no obligation to, invest any such Proceeds of Remedies in such manner as
Agent, in the exercise of its sole discretion, deems appropriate. Such Proceeds
of Remedies shall be applied to amounts owing in respect of any such Letters of
Credit and/or the payment of Borrower’s or any Bank’s obligations under any such
Letter of Credit when such Letter of Credit is drawn upon. Nothing in this
Section 7.04 shall cause or permit an increase in the maximum amount permitted
to be outstanding from time to time under this Agreement.
 
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ARTICLE VIII.
THE AGENTS AND THE FUNDS ADMINISTRATOR
 
Section 8.01 Authorization and Action. Each Bank hereby appoints and authorizes
the Agent and the Funds Administrator to take such action in such capacity on
such Bank’s behalf and to exercise such powers under this Agreement and the
other Loan Documents as are delegated to the Agent and the Funds Administrator,
as the case may be, by the terms hereof and thereof, together with such powers
as are reasonably incidental thereto. As to any matters not expressly provided
for by this Agreement (including, without limitation, enforcement or collection
of the Notes or of amounts owing under the other Loan Documents), the Agent and
the Funds Administrator shall not be required to exercise any discretion or take
any action, but such Person shall be required to act or to refrain from acting
(and shall be fully protected in so acting or refraining from acting) upon the
instructions of the Majority Banks, and such instructions shall be binding upon
all Banks and any other holders of Notes; provided, however, that the Agent and
the Funds Administrator shall not be required to take any action which exposes
such Person to personal liability or which is contrary to the Loan Documents or
applicable law. Each of the Agent and the Funds Administrator is hereby
expressly authorized on behalf of the other members of the Bank Group, (a) to
receive on behalf of each of the other members of the Bank Group any payment of
principal of or interest on the Loans outstanding hereunder and all other
amounts accrued hereunder paid to such Persons, and promptly to distribute to
each other member of the Bank Group its proper share of all payments so
received; (b) in the case of the Agent only, to give notice within a reasonable
time on behalf of each other member of the Bank Group to the Borrower of any
Default of which the Agent has actual knowledge as provided in Section 8.09; (c)
to distribute to the other members of the Bank Group copies of all notices,
agreements and other material as provided for in this Agreement as received by
such Person; and (d) to distribute to the Borrower any and all requests, demands
and approvals received by such Person from any other member of the Bank Group.
Nothing herein contained shall be construed to constitute either the Agent or
the Funds Administrator as a trustee for any holder of the Notes or of a
participation therein, nor to impose on any such Person any duties or
obligations other than those expressly provided for in the Loan Documents.
 
Section 8.02 Reliance, Etc. The Agent, the Funds Administrator and their
respective directors, officers, agents or employees shall not be liable for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement, except for such acts or omissions of such Person constituting
gross negligence or willful misconduct on the part of such Person (IT BEING THE
EXPRESS INTENTION OF THE PARTIES THAT THE AGENT, THE FUNDS ADMINISTRATOR AND
THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS SHALL HAVE NO
LIABILITY FOR ACTIONS AND OMISSIONS HEREUNDER RESULTING THAT CONSTITUTE ORDINARY
NEGLIGENCE, WHETHER SOLE OR CONTRIBUTORY) OR RESULT IN STRICT LIABILITY. Without
limitation of the generality of the foregoing, each of the Agent and the Funds
Administrator: (a) may treat the payee of any Note as the holder thereof until
the Agent receives and accepts an Assignment and Acceptance entered into by the
Bank which is the payee of such Note, as assignor, and an Eligible Assignee, as
assignee, as provided in Section 9.02, and the Agent notifies such Person
thereof; (b) may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (c)
makes no warranty or representation to any Bank and shall not be responsible to
any Bank for any statements, warranties or representations (whether written or
oral) made in or in connection with this Agreement or the other Loan Documents;
(d) shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement or the
other Loan Documents on the part of the Borrower or any other Person or to
inspect the property (including the books and records) of the Borrower or any
other Person; (e) shall not be responsible to any Bank for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of any
Loan Document, any collateral provided for therein, or any other instrument or
document furnished pursuant thereto; and (f) shall incur no liability under or
in respect of this Agreement by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telecopier, telegram, cable or
telex) believed by it to be genuine and signed or sent by the proper party or
parties. The Agent, the Funds Administrator and their respective directors,
officers, employees or agents shall not have any responsibility to the Borrower
on account of the failure or delay in performance or breach by any Bank of any
of its obligations hereunder or to any Bank on account of the failure of or
delay in performance or breach by any other Bank or the Borrower of any of their
respective obligations hereunder or in connection herewith.
 
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Section 8.03 Chase and Affiliates. Without limiting the right of any other Bank
to engage in any business transactions with the Borrower or any of its
Affiliates, with respect to its Commitment, the Loans made by it, the Note
issued to it, and its interest in the Loan Documents, Chase shall have the same
rights and powers under this Agreement as any other Bank and may exercise the
same as though it were not the Funds Administrator or the Agent; and the term
“Bank” or “Banks” shall, unless otherwise expressly indicated, include Chase in
its individual capacity. Chase, or any of its Affiliates, may be engaged in, or
may hereafter engage in, one or more loan, letter of credit, leasing or other
financing activities not the subject of the Loan Documents (such financing
activities of Chase being, collectively, the “Other Financings”) with the
Borrower or any of its Affiliates, or may act as trustee on behalf of, or
depositary for, or otherwise engage in other business transactions with the
Borrower or any of its Affiliates (all Other Financings and other such business
transactions of Chase being, collectively, the “Other Activities”) with no
responsibility to account therefor to the Banks. Without limiting the rights and
remedies of the Banks specifically set forth in the Loan Documents, no other
Bank shall have any interest in (a) any Other Activities, (b) any present or
future guarantee by or for the account of the Borrower not contemplated or
included in the Loan Documents, (c) any present or future offset exercised by
the Agent or the Funds Administrator in respect of any such Other Activities,
(d) any present or future property taken as security for any such Other
Activities or (e) any property now or hereafter in the possession or control of
the Agent or the Funds Administrator which may be or become security for the
obligations of the Borrower under the Loan Documents by reason of the general
description of indebtedness secured, or of property, contained in any other
agreements, documents or instruments related to such Other Activities; provided,
however, that if any payment in respect of such guarantees or such property or
the proceeds thereof shall be applied to reduction of the obligations evidenced
hereunder and by the Notes, then each Bank shall be entitled to share in such
application according to its pro rata portion of such obligations.
 
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Section 8.04 Bank Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon any other member of the Bank Group and
based on the financial statements referred to in Section 4.06 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank also acknowledges
that it will, independently and without reliance upon any other member of the
Bank Group and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
 
Section 8.05 Indemnification. The Banks agree to indemnify each of the Agent and
the Funds Administrator (to the extent not reimbursed by the Borrower), ratably
according to their respective Commitment Percentages, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by, or asserted against the Agent or the Funds
Administrator, as the case may be, in any way relating to or arising out of this
Agreement or the other Loan Documents or any action taken or omitted by the
Agent or the Funds Administrator under this Agreement or the other Loan
Documents, provided, that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Person’s gross negligence
or willful misconduct. IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT
THE AGENT AND THE FUNDS ADMINISTRATOR SHALL BE INDEMNIFIED AND HELD HARMLESS
AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND ARISING
OUT OF OR RESULTING FROM THE ORDINARY NEGLIGENCE (WHETHER SOLE OR CONTRIBUTORY)
OR STRICT LIABILITY OF SUCH PERSON. The Agent and the Funds Administrator shall
not be required to do any act hereunder or under any other document or
instrument delivered hereunder or in connection herewith or take any action
toward the execution or enforcement of the agencies hereby created, or to
prosecute or defend any suit in respect of this Agreement or the Loan Documents
or any collateral security, unless indemnified to its satisfaction by the
holders of the Notes against loss, cost, liability, and expense. If any
indemnity furnished to the Agent or the Funds Administrator for any purpose is,
in the opinion of such Person insufficient or becomes impaired, such Person may
call for additional indemnity and not commence or cease to do the acts
indemnified against until such additional indemnity is furnished. Without
limitation of the foregoing, each Bank agrees to reimburse the Agent and the
Funds Administrator promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by such Person in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and the other Loan Documents, to the
extent that the Agent and the Funds Administrator are not reimbursed for such
expenses by the Borrower.
 
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Section 8.06 Employees of the Agent, Etc. Each of the Agent and the Funds
Administrator may execute any of their respective duties under this Agreement,
the other Loan Documents and any instrument, agreement or document executed,
issued or delivered pursuant hereto or thereto or in connection herewith or
therewith, by or through employees, agents and attorneys-in-fact, and shall not
be answerable for the default or misconduct of any such employee, agent or
attorney-in-fact selected by it with reasonable care. Each of the Agent and the
Funds Administrator may, and upon the written instruction of the Majority Banks
shall, enforce on behalf of the Banks any claims which the Agent, the Funds
Administrator and/or the Banks may have against any such employee, agent or
attorney-in-fact, and any recovery therefrom shall be applied for the pro rata
benefit of the Banks.
 
Section 8.07 Successor Agent. The Agent may resign at any time by giving written
notice thereof to the other members of the Bank Group and the Borrower and may
be removed at any time with or without cause by the Majority Banks. Upon any
such resignation or removal, the Majority Banks shall have the right to appoint
a successor Agent. If no successor Agent shall have been so appointed by the
Majority Banks, and shall have accepted such appointment, within thirty (30)
days after the retiring Agent’s giving of notice of resignation or the Majority
Banks’ removal of the retiring Agent, then the retiring Agent may, on behalf of
the Banks, appoint a successor Agent, which shall be a commercial bank organized
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement,
subject to the requirement that such retiring Agent will execute such documents
and take such actions as may be necessary or desirable to cause the successor
Agent to be vested with all such rights, powers, privileges and duties. After
any retiring Agent’s resignation or removal hereunder as Agent, the provisions
of this Article VIII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement. All costs and
expenses incurred by the Bank Group in connection with any amendments or other
documentation required by this Section 8.07 shall be paid by the Borrower
pursuant to Section 9.04 hereof.
 
Section 8.08 Successor Funds Administrator. The Funds Administrator may resign
at any time by giving written notice thereof to the other members of the Bank
Group and the Borrower and may be removed at any time with or without cause by
the Majority Banks. Upon any such resignation or removal, the Majority Banks
shall have the right to appoint a successor Funds Administrator. If no successor
Funds Administrator shall have been so appointed by the Majority Banks, and
shall have accepted such appointment, within thirty (30) days after the retiring
Funds Administrator’s giving of notice of resignation or the Majority Banks’
removal of the retiring Funds Administrator, then the retiring Funds
Administrator may, on behalf of the Banks, appoint a successor Funds
Administrator, which shall be a commercial bank organized under the laws of the
United States of America or of any State thereof and having a combined capital
and surplus of at least $500,000,000. Upon the acceptance of any appointment as
Funds Administrator hereunder by a successor Funds Administrator, such successor
Funds Administrator shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Funds Administrator, and
the retiring Funds Administrator shall be discharged from its duties and
obligations under this Agreement, subject to the requirement that such retiring
Funds Administrator will execute such documents and take such actions as may be
necessary or desirable to cause the successor Funds Administrator to be vested
with all such rights, powers, privileges and duties. After any retiring Funds
Administrator’s resignation or removal hereunder as Funds Administrator, the
provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Funds Administrator under this
Agreement. All costs and expenses incurred by the Bank Group in connection with
any amendments or other documentation required by this Section 8.08 shall be
paid by the Borrower pursuant to Section 9.04 hereof.
 
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Section 8.09 Notice of Default. Neither the Agent nor the Funds Administrator
shall be deemed to have knowledge or notice of the occurrence of any Default
unless such Person shall have received notice from a Bank or the Borrower
referring to this Agreement, describing such Default and stating that such
notice is a “notice of default” or “notice of event of default,” as applicable.
If the Agent receives such a notice from the Borrower, the Agent shall give
notice thereof to the other members of the Bank Group and, if such notice is
received from a Bank, the Agent shall give notice thereof to the other members
of the Bank Group and the Borrower. The Agent shall be entitled to take action
or refrain from taking action with respect to such Default as provided in this
Article VIII.
 
Section 8.10 Execution of Loan Documents. Each member of the Bank Group hereby
authorizes and directs the Agent and the Funds Administrator to execute and
deliver each Loan Document (including, without limitation, those specified in
Section 3.01) to be executed by the Agent or the Funds Administrator on or about
the Effective Date pursuant to the terms of this Agreement and the other Loan
Documents.
 
Section 8.11 Duties of Syndication Agent and Documentation Agent. The
Syndication Agent and the Document Agent shall have no duties under this
Agreement other than those of a Bank.
 
ARTICLE IX.
MISCELLANEOUS
 
Section 9.01 Amendments, Etc. No amendment or waiver of any provision of this
Agreement, any Note or any other Loan Document, or consent to any departure by
any Person herefrom or therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Borrower and the Majority Banks, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no amendment,
waiver or consent shall: (a) increase the Commitment of any Bank or subject a
Bank to any additional obligations without the written consent of such Bank,
(b) reduce the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, without the written consent of each Bank directly
affected thereby, (c) postpone any date fixed for any payment of principal of,
or interest on, the Notes or any fees or other amounts payable hereunder,
without the written consent of each Bank directly affected thereby, (d) release
the Borrower or any other Person from its payment obligations to the Bank Group,
regardless of whether such obligations are those of a primary obligor, a
guarantor or surety, or otherwise, without the consent of each Bank, (e) take
action which expressly requires the signing of all the Banks pursuant to the
terms of this Agreement, without the consent of each Bank, (f) change the
Commitment Percentages or the aggregate unpaid principal amount of the Notes, or
the number of Banks, as the case may be, required for the Agent, the Funds
Administrator or the Banks or any of them to take any action under this
Agreement or amend the definition of Majority Banks, without the consent of each
Bank or (g) amend Article II, without the written consent of each Bank directly
affected thereby or this Section 9.01, without the consent of each Bank;
provided, further, that no amendment, waiver or consent shall (1) unless in
writing and signed by the Agent in addition to the Banks required above to take
such action, affect the rights or duties of the Agent under this Agreement or
any other Loan Document, and (2) unless in writing and signed by the Funds
Administrator in addition to the Banks required above to take such action,
affect the rights or duties of the Funds Administrator under this Agreement or
any other Loan Document. No notice to or demand on Borrower or any other Person
in any case shall entitle them to any other or further notice or demand in
similar or other circumstances.
 
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Section 9.02 Participation Agreements and Assignments. (a) (1) Subject to
Section 9.02(a)(ii), each Bank may assign to one or more Eligible Assignees all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Loans owing to it
and the Note held by it) and the other Loan Documents by executing an Assignment
and Acceptance substantially in the form of Exhibit 9.02(a) (an “Assignment and
Acceptance”); provided, that (A) no such assignment shall be made unless such
assignment and assignee have been approved by the Agent and, so long as no
Default exists, the Borrower, such approvals not to be unreasonably withheld,
provided that such approvals shall not be required if the assignee is an
Affiliate of the assignor Bank, (B) each such assignment shall be of a constant,
and not a varying, percentage of all rights and obligations of the assignor
under this Agreement and the other Loan Documents, and no assignment shall be
made unless it covers a pro rata share of all rights and obligations of such
assignor under this Agreement and the other Loan Documents, (C) the amount of
the Commitment of the assigning Bank being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall, unless otherwise agreed to by the Agent, in
no event be less than $5,000,000 and shall be an integral multiple of
$1,000,000, (D) each such assignment shall be to an Eligible Assignee and (E)
the parties to each such assignment shall execute and deliver to the Agent, for
its acceptance and recording in the Register (defined below), an Assignment and
Acceptance, together with any Note subject to such assignment. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, (1) the assignee thereunder shall
be a party hereto and, to the extent that rights and obligations under the Loan
Documents have been assigned to it pursuant to such Assignment and Acceptance,
have the rights and obligations of a Bank under the Loan Documents and (2) the
assigning Bank thereunder shall, to the extent that rights and obligations under
the Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Loan Documents (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Bank’s rights and obligations under this
Agreement, such Bank shall cease to be a party hereto).
 
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(ii)  In the event any Bank desires to transfer all or any portion of its rights
and obligations under the Loan Documents to any Person other than an Affiliate
of such Bank, it shall give the Borrower and the Agent prior written notice of
the identity of such transferee and the terms and conditions of such transfer (a
“Transfer Notice”). So long as no Default has occurred and is continuing, the
Borrower may, no later than ten (10) days following receipt of such Transfer
Notice, designate an alternative transferee and such Bank shall thereupon be
obligated to sell the interests specified in such Transfer Notice to such
alternative transferee, subject to the following: (A) such transfer shall be
made on the same terms and conditions outlined in such Transfer Notice, (B) such
transfer shall otherwise comply with the terms and conditions of the Loan
Documents (including Section 9.02(a)(i)), and (C) such alternative transferee
must be an Eligible Assignee approved by the Agent. If the Borrower shall fail
to designate an alternative transferee within such ten (10) day period, such
Bank shall, subject to compliance with the other terms and provisions hereof, be
free to consummate the transfer described in such Transfer Notice.
 
(b)  By executing and delivering an Assignment and Acceptance, the assigning
Bank thereunder and the assignee thereunder confirm to and agree with each other
and the other parties hereto as follows: (i) other than as provided in such
Assignment and Acceptance, such assigning Bank makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or any other instrument or document furnished
pursuant hereto; (ii) such assigning Bank makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement and the other Loan Documents, together with copies of the
financial statements referred to in Section 4.06 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon any member of the Bank Group (including
such assigning Bank) and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Agent and the Funds Administrator to take such action on its behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
delegated to such Person by the terms thereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement and the other Loan Documents are required to be performed by
it as a Bank.
 
(c)  The Agent shall maintain at its address referred to in Section 9.03 a copy
of each Assignment and Acceptance delivered to and accepted by it and a register
for the recordation of the names and addresses of the Banks and the Commitment
of, and principal amount of the Loans owing to, each Bank from time to time (the
“Register”). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower and each member of the Bank
Group may treat each Person whose name is recorded in the Register as a Bank
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower or any member of the Bank Group at any reasonable
time and from time to time upon reasonable prior notice.
 
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(d)  Upon its receipt of an Assignment and Acceptance executed by an assigning
Bank and an assignee representing that it is an Eligible Assignee, together with
any Note subject to such assignment, the Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit 9.02
and satisfies all other requirements set forth in this Section 9.02, (i) accept
such Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the Borrower and the other
members of the Bank Group. Within five (5) Business Days after its receipt of
such notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for the surrendered Notes, new Notes to the order of such
Eligible Assignee in an amount corresponding to the Commitment assumed by such
Eligible Assignee pursuant to such Assignment and Acceptance and, if the
assigning Bank has retained a Commitment hereunder, new Notes to the order of
the assigning Bank in an amount corresponding to the Commitment retained by it
hereunder. Such new Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form prescribed by Section 2.04 hereto.
 
(e)  Each Bank may sell participations to one or more banks or other entities in
or to all or a portion of its rights and obligations under this Agreement and
the other Loan Documents (including, without limitation, all or a portion of its
Commitment and the Loans owing to it); provided, however, that (i) such Bank’s
obligations under this Agreement (including, without limitation, its Commitment
to the Borrower hereunder) and the other Loan Documents shall remain unchanged,
(ii) such Bank shall remain solely responsible to the other parties hereto for
the performance of such obligations, and the participating banks or other
entities shall not be considered a “Bank” for purposes of the Loan Documents,
(iii) the participating banks or other entities shall be entitled to the cost
protection provisions contained in Section 2.11 through Section 2.14 and the
rights of setoff contained in Section 7.02, in each case to the same extent that
the Bank from which such participating bank or other entity acquired its
participation would be entitled to the benefit of such cost protection
provisions and rights of setoff and (iv) the Borrower and the other members of
the Bank Group shall continue to deal solely and directly with such Bank in
connection with such Bank’s rights and obligations under this Agreement and the
other Loan Documents, and such Bank shall retain the sole right to enforce the
obligations of the Borrower relating to the Loans and to approve any amendment,
modification or waiver of any provision of this Agreement (other than
amendments, modifications or waivers with respect to the amounts of any fees
payable hereunder or the amount of principal of or the rate at which interest is
payable on the Loans, or the dates fixed for payments of principal or interest
on the Loans).
 
(f)  Anything in this Section 9.02 to the contrary notwithstanding, any Bank may
at any time, without the consent of the Borrower or the Agent, assign and pledge
all or any portion of its Commitment and the Loans owing to it to any Federal
Reserve Bank (and its transferees) as collateral security pursuant to Regulation
A of the Federal Reserve Board and any Operating Circular issued by such Federal
Reserve Bank. No such assignment shall release the assigning Bank from its
obligations hereunder.
 
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(g)  Any Bank may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 9.02, disclose to
the assignee or participant or proposed assignee or participant, any information
relating to the Borrower furnished to such Bank by or on behalf of the Borrower;
provided that prior to any such disclosure, each such assignee or participant or
proposed assignee or participant shall agree (subject to customary exceptions)
to preserve the confidentiality of any confidential information relating to the
Borrower received from such Bank.
 
Section 9.03 Notices. All correspondence, statements, notices, requests and
demands (collectively “Communications”) shall be in writing (including
telegraphic Communications) and mailed, telegraphed, telecopied, facsimile
transmitted or delivered as follows:
 
if to the Borrower --
 
Kirby Corporation
55 Waugh Drive, Suite 1000
Houston, Texas 77007
Attention: Chief Financial Officer
Telephone: (713) 435-1102
Telecopier: (713) 435-1011
 
if to the Funds Administrator or the Agent --
 
JPMorgan Chase Bank, N.A.
10 South Dearborn St., Floor 19
Chicago, Illinois 60603
Attention: Judy Warren
Telecopier: (312) 385-7096
Telephone: (312) 732-4860
Judy.a.warren@jpmchase.com

with a copy to --
 
JPMorgan Chase Bank, N.A.
707 Travis, Floor 8
Houston, Texas 77002
Attention: Janice Carter
Telecopier: (713) 216- 4651
Telephone: (713) 216-4383
Janice.Carter@Chase.com
 
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if to any Bank, at its Domestic Lending Office, or as to each such party, at
such other address as such party shall designate in a written Communication to
each of the other parties hereto. All such Communications shall be effective, in
the case of written or telegraphed Communications, when deposited in the mails
or delivered to the telegraph company, respectively, and, in the case of a
Communication by telecopy or facsimile transmission, when telecopied or
transmitted against receipt of a confirmation, in each case addressed as
aforesaid, except that Communications to any member of the Bank Group pursuant
to Article II and Article VIII shall not be effective until received by such
Persons.
 
Section 9.04 Costs and Expenses. The Borrower agrees to pay on demand (a) all
reasonable costs and expenses of the Agent and the Funds Administrator incurred
in connection with the preparation, execution, delivery, filing, administration
and recording of the Loan Documents and any other agreements or security
documents delivered in connection with or pursuant to any of the Loan Documents
and the syndication of this Agreement both before and after the date hereof,
including, without limitation, the reasonable fees and out-of-pocket expenses of
Andrews Kurth LLP, special counsel to the Agent, and local counsel who may be
retained by such special counsel, with respect thereto, and (b) all reasonable
costs and expenses of the Agent and the Funds Administrator, and during the
existence of an Event of Default any Bank, incurred in connection with the
enforcement of the Loan Documents and any other agreements or security documents
executed in connection with or pursuant to any of the Loan Documents, including,
but not limited to, the reasonable fees and out-of-pocket expenses of counsel to
the Agent, and local counsel who may be retained by such counsel, with respect
thereto, and the costs and expenses in connection with the custody,
preservation, use or operation of, or the sale of, or collection from, or other
realization upon the sale of, or collection from, or other realization upon any
collateral covered by any of the Loan Documents or any other documents executed
in connection with or pursuant to any of the Loan Documents. The agreements of
Borrower contained in this Section 9.04 shall survive the termination of the
Commitments and the payment of all other amounts owing hereunder or under any of
the other Loan Documents.
 
Section 9.05 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Agent, the Funds Administrator, the
Banks and their respective successors and assigns, except that the Borrower may
not assign or transfer its rights hereunder without the prior written consent of
the Banks.
 
Section 9.06 Independence of Covenants. All covenants contained in the Loan
Documents shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that such action
or condition would be permitted by an exception to, or otherwise be within the
limitations of, another covenant shall not avoid the occurrence of a Default or
an Event of Default if such action is taken or condition exists.
 
Section 9.07 Survival of Representations and Warranties. All representations and
warranties contained in this Agreement and the other Loan Documents or made in
writing by the Borrower in connection herewith or therewith, shall survive the
execution and delivery of this Agreement, the Notes and the other Loan Documents
and the repayment of the Loans. Any investigation by any member of the Bank
Group shall not diminish in any respect whatsoever its right to rely on such
representations and warranties.
 
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Section 9.08 Separability. Should any clause, sentence, paragraph, subsection,
Section or Article of this Agreement be judicially declared to be invalid,
unenforceable or void, such decision will not have the effect of invalidating or
voiding the remainder of this Agreement, and the parties hereto agree that the
part or parts of this Agreement so held to be invalid, unenforceable or void
will be deemed to have been stricken herefrom by the parties hereto, and the
remainder will have the same force and effectiveness as if such stricken part or
parts had never been included herein.
 
Section 9.09 Captions. The captions in this Agreement have been inserted for
convenience only and shall be given no substantive meaning or significance
whatsoever in construing the terms and provisions of this Agreement.
 
Section 9.10 Limitation by Law. All provisions of this Agreement and the other
Loan Documents are intended to be subject to all applicable mandatory provisions
of law which may be controlling and to be limited to the extent necessary so
that they will not render this Agreement or any other Loan Document invalid or
unenforceable, in whole or in part, or not entitled to be recorded, registered
or filed under the provisions of any applicable law.
 
Section 9.11 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original, and all of which taken
together shall constitute one and the same agreement.
 
Section 9.12 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Texas and applicable federal law;
provided, however, notwithstanding the foregoing or any other provision of this
Agreement, nothing in this Agreement, the Notes or the other Loan Documents
shall be deemed to constitute a waiver of any rights which any Bank may have
under federal legislation relating to the rate of interest which such Bank may
contract for, take, reserve, receive or charge in respect of any Debt owing to
such Bank hereunder. Chapter 15, Subtitle 3, Title 79, of the Revised Civil
Statutes of Texas, 1925, as amended (relating to revolving loan and revolving
triparty accounts), shall not apply to this Agreement or the Notes or the
transactions contemplated hereby.
 
Section 9.13 Limitation on Interest. Each provision in this Agreement and each
other Loan Document is expressly limited so that in no event whatsoever shall
the amount paid, or otherwise agreed to be paid, by the Borrower for the use,
forbearance or detention of the money to be loaned under this Agreement or any
other Loan Document or otherwise (including any sums paid as required by any
covenant or obligation contained herein or in any other Loan Document which is
for the use, forbearance or detention of such money), exceed that amount of
money which would cause the effective rate of interest thereon to exceed the
Highest Lawful Rate, and all amounts owed under this Agreement and each other
Loan Document shall be held to be subject to reduction to the effect that such
amounts so paid or agreed to be paid which are for the use, forbearance or
detention of money under this Agreement or such Loan Document shall in no event
exceed that amount of money which would cause the effective rate of interest
thereon to exceed the Highest Lawful Rate. To the extent that the Highest Lawful
Rate applicable to a Bank is at any time determined by Texas law, such rate
shall be the “indicated rate ceiling” described in the Texas Finance Code,
Chapter 303, as amended; provided, however, to the extent permitted by such
Finance Code, the Banks from time to time by notice from the Agent to Borrower
may revise the aforesaid election of such interest rate ceiling as such ceiling
affects the then-current or future balances of the Loans outstanding under the
Notes. Notwithstanding any provision in this Agreement or any other Loan
Document to the contrary, if the maturity of the Notes or the obligations in
respect of the other Loan Documents are accelerated for any reason, or in the
event of prepayment of all or any portion of the Notes or the obligations in
respect of the other Loan Documents by the Borrower or in any other event,
earned interest on the Loans and such other obligations of the Borrower may
never exceed the maximum amount permitted by applicable law, and any unearned
interest otherwise payable under the Notes or the obligations in respect of the
other Loan Documents that is in excess of the maximum amount permitted by
applicable law shall be cancelled automatically as of the date of such
acceleration or prepayment or other such event and, if theretofore paid, shall
be credited on the principal of the Notes or, if the principal of the Notes has
been paid in full, refunded to the Borrower. In determining whether or not the
interest paid or payable, under any specific contingency, exceeds the Highest
Lawful Rate, the Borrower and the Banks shall, to the maximum extent permitted
by applicable law, amortize, prorate, allocate and spread, in equal parts during
the period of the actual term of this Agreement, all interest at any time
contracted for, charged, received or reserved in connection with the Loan
Documents.
 
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Section 9.14 Indemnification. The Borrower agrees to indemnify, defend and hold
each member of the Bank Group, as well as their respective officers, employees,
agents, Affiliates, directors and shareholders (collectively, “Indemnified
Persons”) harmless from and against any and all loss, liability, damage,
judgment, claim, deficiency or reasonable expense (including interest,
penalties, reasonable attorneys’ fees and amounts paid in settlement) incurred
by or asserted against any Indemnified Person arising out of, in any way
connected with, or as a result of (i) the execution and delivery of this
Agreement and the other documents contemplated hereby, the performance by the
parties hereto and thereto of their respective obligations hereunder and
thereunder (including but not limited to the making of the Loans by each Bank)
and consummation of the transactions contemplated hereby and thereby, (ii) the
actual or proposed use of the proceeds of the Loans, (iii) any violation by the
Borrower or any of its Subsidiaries of any Requirement of Law, including but not
limited to Environmental Laws, (iv) any member of the Bank Group being deemed an
operator of any real or personal property of the Borrower or any of its
Subsidiaries in circumstances in which no member of the Bank Group is generally
operating or generally exercising control over such property, to the extent such
losses, liabilities, damages, judgments, claims, deficiencies or expenses arise
out of or result from any Hazardous Materials located in, on or under such
property or (v) any claim, litigation, investigation or proceeding relating to
any of the foregoing, whether or not any Indemnified Person is a party thereto;
provided that such indemnity shall not apply to any such losses, claims,
damages, liabilities or related expenses that are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of, or willful violation of the Loan
Documents by, such Indemnified Person. WITHOUT LIMITING ANY PROVISION OF THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, IT IS THE EXPRESS INTENTION OF THE
BORROWER THAT EACH INDEMNIFIED PERSON SHALL BE INDEMNIFIED AND HELD HARMLESS
AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DEFICIENCIES, JUDGMENTS OR
REASONABLE EXPENSES ARISING OUT OF OR RESULTING FROM THE ORDINARY NEGLIGENCE
(WHETHER SOLE OR CONTRIBUTORY) OR STRICT LIABILITY OF SUCH INDEMNIFIED PERSON.
Each Indemnified Person will attempt to consult with the Borrower prior to
entering into any settlement of any lawsuit or proceeding that could give rise
to a claim for indemnity under this Section 9.14, although nothing herein shall
give the Borrower the right to direct or control any such settlement
negotiations or any related lawsuit or proceeding on behalf of such Indemnified
Party. The obligations of the Borrower under this Section 9.14 shall survive the
termination of this Agreement.
 
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Section 9.15 Submission to Jurisdiction. The Borrower hereby irrevocably submits
to the jurisdiction of any Texas state or federal court sitting in Houston,
Texas over any action or proceeding arising out of or relating to this Agreement
or any of the other Loan Documents, and the Borrower irrevocably agrees that all
claims in respect of such action or proceeding may be heard and determined in
such Texas state or federal court; provided, however, nothing in this Section
9.15 is intended to waive the right of any member of the Bank Group to remove
any such action or proceeding commenced in any such Texas state court to an
appropriate Texas federal court to the extent the basis for such removal exists
under applicable law. The Borrower irrevocably consents to the service of any
and all process in any such action or proceeding by the mailing by certified
mail of copies of such process to it at its address specified herein. The
Borrower agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Section 9.15 shall affect
the right of any member of the Bank Group to serve legal process in any other
manner permitted by law or affect the right of any member of the Bank Group to
bring any action or proceeding against the Borrower, or its properties, in the
courts of any other jurisdiction.
 
Section 9.16 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, THE BORROWER AND THE BANK GROUP HEREBY IRREVOCABLY AND EXPRESSLY WAIVE ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE NOTES, OR ANY OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY OR THE ACTIONS OF THE BANK GROUP IN THE NEGOTIATION,
ADMINISTRATION, OR ENFORCEMENT THEREOF.
 
Section 9.17 FINAL AGREEMENT OF THE PARTIES. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS CONSTITUTE A LOAN AGREEMENT FOR PURPOSES OF SECTION 26.02(a) OF THE
TEXAS BUSINESS AND COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
 
Section 9.18 Patriot Act. Each Bank hereby notifies the Borrower that pursuant
to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the “Act”), it is required to obtain, verify and
record information that identifies the Borrower, which information includes the
name and address of the Borrower and other information that will allow such Bank
to identify the Borrower in accordance with the Act.
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of the date first
above written.
 

 
BORROWER
         
KIRBY CORPORATION
                   
By:
/s/ Norman W. Nolen
   
Name:
Norman W. Nolen
   
Title:
Executive Vice President and Chief
     
Financial Officer
 

 

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BANKS
         
JPMORGAN CHASE BANK, N.A., as Administrative Agent, Issuer and a Bank
                   
By:
/s/ H. David Jones
   
Name:
H. David Jones
   
Title:
Vice President
 

 

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BANK OF AMERICA, N.A., as Syndication Agent and as a Bank
                   
By:
/s/ David McCauley
   
Name:
David McCauley
   
Title:
Principal
 

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THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as Documentation Agent and as a Bank
                   
By:
/s/ D. Barnell
   
Name:
D. Barnell
   
Title:
Vice President and Manager
 

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DNB NOR BANK ASA, as Documentation Agent and as a Bank
                   
By:
/s/ Kevin O’Hara
   
Name:
Kevin O’Hara
   
Title:
Vice President
           
By:
/s/ Sanjiv Nayar
   
Name:
Sanjiv Nayar
   
Title:
Senior Vice President
 

 

--------------------------------------------------------------------------------

 

 
WELLS FARGO BANK, N.A., as Syndication Agent and as a Bank
                   
By:
/s/ Michael B. Sullivan
   
Name:
Michael B. Sullivan
   
Title:
Senior Vice President
 

 

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COMERICA BANK
                   
By:
/s/ Charles T. Johnson
   
Name:
Charles T. Johnson
   
Title:
Vice President
 

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THE NORTHERN TRUST COMPANY
               
By:
/s/ Paul H. Theiss
   
Name:
Paul H. Theiss
   
Title:
Vice President
 

 

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AMEGY BANK
               
By:
/s/ Gary Tolbert
   
Name:
Gary Tolbert
   
Title:
Senior Vice President
 

 

--------------------------------------------------------------------------------

ANNEX A
DEFINITIONS
 
“Acquisition” means a transaction resulting in (a) acquisition by the Borrower,
directly or indirectly, of all or substantially all of the assets of a Person,
or of any business or division of a Person, (b) acquisition by the Borrower of
in excess of 50% of the capital stock, partnership interests, or other equity of
any Person, or otherwise causing such Person to become a Subsidiary of the
Borrower, or (c) a merger or consolidation or other combination of the Borrower
with another Person.
 
“Adjusted CD Rate” means, for any Interest Period for each Adjusted CD Rate Loan
comprising part of the same Borrowing, an interest rate per annum equal to the
sum of: (a) the rate per annum obtained by dividing (i) the rate of interest
determined by the Agent to be the arithmetic average (rounded upward to the
nearest whole multiple of 1/100 of 1% per annum, if such average is not such a
multiple) of the consensus bid rate determined by the Agent for the bid rates
per annum, on or about 9:00 A.M. (Houston time) (or as soon thereafter as
practicable) one Business Day before the first day of such Interest Period, of
certificate of deposit dealers of recognized standing selected by the Agent for
the purchase at face value of certificates of deposit of the Agent in an amount
approximately equal to the Adjusted CD Rate Loan to be made by the Agent in its
capacity as a Bank and comprising part of such Borrowing and with a maturity
equal to such Interest Period, by (ii) a percentage equal to 100% minus the
Adjusted CD Rate Reserve Percentage for such Interest Period, plus (b) the
Assessment Rate in effect from time to time during such Interest Period.
 
“Adjusted CD Rate Borrowing” means a Borrowing consisting of Adjusted CD Rate
Loans.
 
“Adjusted CD Rate Loan” means a Loan that the Borrower has designated, or is
deemed to have designated, as such in accordance with Article II.
 
“Adjusted CD Rate Reserve Percentage” means, for the Interest Period for each
Adjusted CD Rate Loan comprising part of the same Borrowing, the reserve
percentage applicable one Business Day before the first day of such Interest
Period under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, but not limited to, any emergency, supplemental
or other marginal reserve requirement) for a member bank of the Federal Reserve
System in Houston, Texas with deposits exceeding one billion dollars with
respect to liabilities consisting of or including (among other liabilities) U.S.
dollar nonpersonal time deposits in the United States with a maturity equal to
such Interest Period.
 
“Adjusted Net Income” means, for any period, Net Income for such period; less,
to the extent otherwise included in such Net Income (a) any gain or loss arising
from the sale of capital assets of the Borrower and its Consolidated
Subsidiaries; (b) any gain arising from any write-up of assets of the Borrower
and its Consolidated Subsidiaries; (c) earnings of any other Person,
substantially all of the assets of which have been acquired by the Borrower or
any of its Consolidated Subsidiaries in any manner, to the extent that such
earnings were realized by such other Person prior to the date of such
acquisition; (d) net earnings of any Person (other than a Consolidated
Subsidiary) in which the Borrower or any of its Consolidated Subsidiaries has an
ownership interest, except for the portion of such net earnings that have been
distributed to the Borrower or a Consolidated Subsidiary; (e) the earnings of
any Person to which assets of the Borrower or any of its Consolidated
Subsidiaries shall have been sold, transferred or disposed of, to the extent
that such earnings arise after the date of such transaction; (f) the earnings of
any Person into which the Borrower or any of its Consolidated Subsidiaries shall
have merged, to the extent that such earnings arise prior to the date of such
merger; (g) any gain arising from the acquisition of any securities of the
Borrower or any of its Consolidated Subsidiaries; and (h) the taxes, if any,
included in the calculation of the consolidated net earnings, if any, described
in clauses (a) through (g); plus, to the extent not otherwise included in such
Net Income, all distributions, other than returns of capital, which have been
made to the Borrower or a Consolidated Subsidiary by any Person, other than a
Consolidated Subsidiary, in which Borrower or any of its Consolidated
Subsidiaries has an ownership interest.
 
Annex A - Page 1

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“Affected Bank” has the meaning specified in Section 2.15.
 
“Affected Interests” has the meaning specified in Section 2.15.
 
“Affiliate” means, when used with respect to any Person, (a) any other Person
(including any member of the immediate family of any such natural person) who
directly or indirectly beneficially owns or controls five percent (5%) or more
of the total voting power of shares of capital stock of such Person having the
right to vote for directors (or other individuals performing similar functions)
under ordinary circumstances, (b) any Person controlling, controlled by or under
common control with any such Person (within the meaning of Rule 405 under the
Securities Act of 1933) and (c) any director or executive officer of such
Person.
 
“Agent” has the meaning specified in the introduction to this Agreement.
 
“Agreement” means this Credit Agreement, as the same may from time to time be
amended, supplemented or modified and in effect.
 
“Applicable Lending Office” means, with respect to each Bank, such Bank’s
Domestic Lending Office in the case of a Prime Rate Loan, such Bank’s CD Lending
Office in the case of an Adjusted CD Rate Loan and such Bank’s Eurodollar
Lending Office in the case of a Eurodollar Rate Loan.
 
“Applicable Margin” has the meaning specified in Section 2.07(d).
 
“Assessment Rate” means, for any day, the annual assessment rate in effect on
such day which is payable by a member of the Bank Insurance Fund classified as
well capitalized and within supervisory subgroup “B” (or a comparable successor
assessment risk classification) within the meaning of 12 C.F.R. §327.4 (or any
successor provision) to the Federal Deposit Insurance Corporation (or any
successor thereto) for such Corporation’s (or such successor’s) insuring time
deposits at offices of such institution in the United States. The Adjusted CD
Rate shall be adjusted automatically on and as of the effective date of any
change in the Assessment Rate.
 
“Assignment and Acceptance” has the meaning specified in Section 9.02(a).
 
Annex A - Page 2

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“Bank Group” means, collectively, the Agent, the Funds Administrator and the
Banks.
 
“Banks” has the meaning specified in the introduction to this Agreement.
 
“Borrower” has the meaning specified in the introduction to this Agreement.
 
“Borrowing” means (a) a group of Revolving Loans of a single Type made by the
Banks, or Converted into such, as applicable, on a single date and as to which a
single Interest Period is in effect; or (b) a Swingline Loan.
 
“Borrowing Date” means, with respect to the initial funding of any Borrowing,
the date on which the proceeds of such Borrowing are to be made available to the
Borrower.
 
“Borrowing Request” has the meaning specified in Section 2.02(a).
 
“Business Day” means a day of the year on which banks are not required or
authorized to close in Houston, Texas and, if the applicable Business Day
relates to any Eurodollar Rate Loans, on which dealings are carried on in the
applicable eurodollar interbank market.
 
“Capital Lease” means, as to any Person, any lease or rental agreement in
respect of which such Person’s obligations as lessee under such lease or rental
agreement, constitute obligations which shall have been or should be, in
accordance with generally accepted accounting principles consistently applied,
capitalized on the balance sheet of such Person.
 
“CD Lending Office” means, with respect to any Bank, the office of such Bank
specified as its “CD Lending Office” on Schedule 2.01 (or, if no such office is
specified, its Domestic Lending Office), or such other office of such Bank as
such Bank may from time to time specify to the Borrower, the Agent and the Funds
Administrator.
 
“Change of Control” means any of (a) the acquisition by any Person or two or
more Persons (excluding underwriters in the course of their distribution of
voting stock in an underwritten public offering) acting in concert, of
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission) of 25% or more of the outstanding shares of voting stock of
the Borrower, (b) 30% or more of the members of the Board of Directors of the
Borrower on any date shall not have been (i) members of the Board of Directors
of the Borrower on the date 12 months prior to such date or (ii) approved by
Persons who constitute at least a majority of the members of the Board of
Directors of the Borrower as constituted on the date 12 months prior to such
date, (c) all or substantially all of the assets of the Borrower are sold in a
single transaction or series or related transactions to any Person or (d) the
Borrower merges or consolidates with or into any other Person, with the effect
that immediately after such transaction the stockholders of the Borrower
immediately prior to such transaction hold less than 75% of the total voting
power entitled to vote in the election of directors, managers or trustees of the
Person surviving such transaction.
 
“Chase” means JPMorgan Chase Bank, N.A.
 
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“Commitment” means as to any Bank, the amount of such Bank’s Commitment set
forth on Schedule 2.01, as the same may be increased pursuant to Section 2.17 or
reduced or terminated pursuant to Sections 2.05 or 7.01.
 
“Commitment Increase Agreement” means an Agreement, substantially in the form of
Exhibit 2.17A attached hereto, executed by a Bank that has increased its
Commitment pursuant to Section 2.17 hereof.
 
“Commitment Increase Notice” has the meaning specified in Section 2.17(a).
 
“Commitment Percentage” means, as to any Bank, a percentage determined pursuant
to the following formula: (C ÷ T) × 100 = CP; where C is such Bank’s Commitment
(without giving effect to any termination of the Commitments pursuant to Section
7.01), T is the Total Commitment (without giving effect to any termination of
the Commitments pursuant to Section 7.01) and CP is such percentage.
 
“Communications” has the meaning specified in Section 9.03.
 
“Consolidated Subsidiary” means, as of any date, any Subsidiary of the Borrower
that, in accordance with generally accepted accounting principles, would be
included in the consolidated financial statements of the Borrower prepared as of
such date.
 
“Conversion Date” means, when used with respect to the Conversion of any group
of Loans, the date such Loans are to be Converted into Loans of another Type
pursuant to Section 2.02 or otherwise in accordance with Article II.
 
“Conversion Notice” has the meaning specified in Section 2.02(c).
 
“Convert,” “Conversion” and “Converted” each refers to a conversion of Loans of
one Type into Loans of another Type pursuant to Section 2.02 or otherwise in
accordance with Article II.
 
“Current Liabilities” means, as of any date, all liabilities (including, without
limitation, accounts payable incurred for services rendered and property
purchased in the ordinary course of business) which would be reflected as
current liabilities on a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries prepared as of such date in accordance with generally
accepted accounting principles consistently applied, but excluding current
maturities of Funded Debt of the Borrower and its Consolidated Subsidiaries as
of such date.
 
“Debt” of any Person shall mean, without duplication: (a) any obligation of such
Person for borrowed money, (b) any obligation of such Person evidenced by bonds,
debentures, notes or other similar debt instruments, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property purchased by such Person, (d) any obligation of such Person for the
deferred purchase price of any property or services, except accounts payable
arising in the ordinary course of such Person’s business that have been
outstanding less than ninety (90) days since the date of the related invoice,
(e) the present value (discounted at the implicit rate, if known, or ten percent
(10%) per annum otherwise) of all Capital Leases of such Person, (f) any
Derivative Obligations of such Person, (g) any reimbursement obligations of such
Person in respect of drawings under a letter of credit or similar instrument,
and (h) any indebtedness or obligations of others of the type described in
clauses (a) through (g) that is Guaranteed by such Person or secured by a Lien
on any asset of such Person.
 
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“Default” means an Event of Default or an event which with the giving of notice
or the lapse of time or both could, unless cured or waived, become an Event of
Default.
 
“Default Rate” has the meaning specified in Section 2.07.
 
“Derivative Obligations” means, with respect to any Person, payment obligations
with respect to foreign exchange transactions and interest rate, currency and
commodity swaps, caps, floors, collars, forward sale contracts, other similar
obligations and combinations of the foregoing (collectively, “swaps”). For the
purposes of this Agreement, the amount of any Derivative Obligations shall be
the amount determined in respect thereof as of the end of the then most recently
ended fiscal quarter of such Person, based on the assumption that all swaps had
terminated at the end of such fiscal quarter, and in making such determination,
if any agreement relating to any such swap provides for the netting of amounts
payable by and to such Person thereunder or if any such agreement provides for
the simultaneous payment of amounts by and to such Person, then in each such
case, the amount of such obligation shall be the net amount so determined.
 
“Dollars” and “$” each means lawful money of the United States.
 
“Domestic Lending Office” means, with respect to any Bank, the office of such
Bank specified as its “Domestic Lending Office” on Schedule 2.01, or such other
office of such Bank as such Bank may from time to time specify to the Borrower,
the Agent and the Funds Administrator.
 
“EBITDA” means Adjusted Net Income plus, to the extent same caused a reduction
in Adjusted Net Income, Interest Expense, depreciation, amortization and income
tax expense.
 
“Effective Date” means the date on which the conditions to effectiveness set
forth in Article III to this Agreement are first satisfied.
 
“Eligible Assignee” means (a) any Bank or any Affiliate of any Bank; (b) a
commercial bank organized under the laws of the United States, or any state
thereof, and having total assets in excess of $1,000,000,000 and having deposits
rated in either of the two highest generic letter rating categories (without
regard to subcategories) from either Standard & Poor’s Rating Group or Moody’s
Investors Service, Inc.; (c) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation and
Development (“OECD”), or a political subdivision of any such country, and having
total assets in excess of $1,000,000,000, provided that such bank is acting
through a branch or agency located in the country in which it is organized or
another country which is also a member of the OECD; (d) the central bank of any
country which is a member of the OECD; and (e) any other financial institution
approved by the Agent.
 
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“Environmental Laws” means federal, state or local laws, rules or regulations,
and any judicial, arbitral or administrative interpretations thereof, including,
without limitation, any judicial, arbitral or administrative order, judgment,
permit, approval, decision or determination pertaining to health, safety or the
environment in effect at the time in question, including, without limitation,
the Clean Air Act, as amended, the Oil Pollution Act of 1990, as amended, the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, the Federal Water Pollution Control Act, as amended, the Occupational
Safety and Health Act, as amended, the Resource Conservation and Recovery Act,
as amended, the Safe Drinking Water Act, as amended, the Toxic Substances
Control Act, as amended, the Superfund Amendment and Reauthorization Act of
1986, as amended, the Hazardous Materials Transportation Act, as amended,
comparable state and local laws, and other environmental conservation and
protection laws.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, and any
successor statute of similar import, together with the regulations thereunder,
in each case as in effect from time to time. References to sections of ERISA
shall be construed to also refer to any successor sections.
 
“ERISA Affiliate” means any (i) corporation which is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Internal Revenue Code) as the Borrower, (ii) partnership or other trade or
business (whether or not incorporated) under common control (within the meaning
of Section 414(c) of the Internal Revenue Code) with the Borrower, (iii) member
of the same affiliated service group (within the meaning of Section 414(m) of
the Internal Revenue Code) as the Borrower, any corporation described in clause
(i) above or any partnership or trade or business described in clause (ii) above
or (iv) other Person required to be aggregated with the Borrower or an ERISA
Affiliate thereof, as defined above, pursuant to Section 414(o) of the Internal
Revenue Code.
 
“Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from time
to time.
 
“Eurodollar Event” has the meaning specified in Section 2.13.
 
“Eurodollar Lending Office” means, with respect to any Bank, the office of such
Bank specified as its “Eurodollar Lending Office” on Schedule 2.01 (or, if no
such office is specified, its Domestic Lending Office), or such other office of
such Bank as such Bank may from time to time specify to the Borrower, the Agent
and the Funds Administrator.
 
“Eurodollar Rate” means, for the Interest Period for each Eurodollar Rate Loan
comprising part of the same Borrowing, an interest rate per annum equal to the
average (rounded upward to the nearest whole multiple of 1/16 of 1% per annum,
if such average is not such a multiple) of the rates per annum at which deposits
in U.S. dollars are offered to the Agent by prime banks in whatever eurodollar
interbank market may be selected by the Agent in its sole discretion, acting in
good faith, on or about 9:00 a.m. (Houston time) (or as soon thereafter as
practicable) two Business Days before the first day of such Interest Period, and
in accordance with the then existing practice in such eurodollar interbank
market for delivery of such deposits on the first day of such Interest Period in
immediately available funds, in an amount substantially equal to the Eurodollar
Rate Loan to be made by the Agent in its capacity as a Bank and comprising part
of such Borrowing and for a period equal to such Interest Period.
 
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“Eurodollar Rate Borrowing” means a Borrowing consisting of Eurodollar Rate
Loans.
 
“Eurodollar Rate Loan” means a Loan that the Borrower has designated, or is
deemed to have designated, as such in accordance with Article II.
 
“Eurodollar Rate Reserve Percentage” means, as to any Bank for the Interest
Period for any Eurodollar Rate Loan, the reserve percentage applicable during
such Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for such Bank with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having a term equal
to such Interest Period.
 
“Events of Default” has the meaning specified in Section 7.01.
 
“Excluded Affiliate” means (a) any Subsidiary of the Borrower other than a
Consolidated Subsidiary, and (b) all Persons, other than Subsidiaries, in which
the Borrower, directly or indirectly, owns or controls five percent (5%) or more
of the equity interests of such Person.
 
“Existing Credit Agreement” has the meaning specified in the Preliminary
Statement to this Agreement.
 
“Fair Market Value” shall mean (a) with respect to any asset (other than
Dollars) the price at which a willing buyer would buy and a willing seller would
sell such asset in an arms’ length transaction and (b) with respect to Dollars,
the amount of such Dollars.
 
“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of Dallas, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
 
“Fee Letter” has the meaning specified in Section 2.10.
 
“Fitch Rating” means the rating classification of the Borrower’s senior debt,
classified according to risk, issued by Fitch, Inc.
 
“Fixed Rate” means the Adjusted CD Rate or the Eurodollar Rate.
 
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“Fixed Rate Borrowing” means an Adjusted CD Rate Borrowing or a Eurodollar Rate
Borrowing.
 
“Fixed Rate Loan” means an Adjusted CD Rate Loan or a Eurodollar Rate Loan.
 
“Funded Debt” means, as of any date, the sum of the following: (a) all Debt of
the Borrower and its Consolidated Subsidiaries on a consolidated basis as of
such date, less (b) to the extent included in the amount described in clause
(a), the sum of the following (without duplication): (i) all Current Liabilities
(other than Current Liabilities that represent Debt for borrowed money or
Capital Leases) on a consolidated basis as of such date, (ii) any Debt of any
Consolidated Subsidiary in excess of the Borrower’s proportionate share thereof
(based on its direct or indirect equity interest therein), (iii) all other
deferred long term liabilities that do not represent Debt for borrowed money or
Capital Leases, including deferred compensation, deferred revenue and other
deferred items classified as other liabilities of the Borrower and its
Consolidated Subsidiaries on a consolidated basis as of such date, and (iv) all
Derivative Obligations of the Borrower and its Consolidated Subsidiaries as of
such date; plus (c) to the extent not otherwise included in the amount described
in clause (a), the sum of the following (without duplication): (i) all Debt of
the Borrower and its Consolidated Subsidiaries outstanding under a revolving
credit or similar agreement, (ii) the present value (discounted at the implicit
rate, if known, or ten percent (10%) per annum otherwise) of all obligations in
respect of Capital Leases of the Borrower and its Consolidated Subsidiaries, and
(iii) all obligations of the Borrower and its Consolidated Subsidiaries under
Guaranties of Debt.
 
“Funds Administrator” has the meaning specified in the introduction to this
Agreement.
 
“Governmental Authority” means any nation or government, any federal, state,
province, city, town, municipality, county, local or other political subdivision
thereof or thereto and any court, tribunal, department, commission, board,
bureau, instrumentality, agency or other entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
 
“Guaranties” means, as to any Person, all obligations (other than endorsements
in the ordinary course of business of negotiable instruments for deposit or
collection) of such Person guaranteeing or, in effect, guaranteeing any Debt of
any other Person (the “primary obligor”) in any manner, whether directly or
indirectly, including all obligations incurred through an agreement, contingent
or otherwise, by such Person: (a) to purchase such Debt or any property or
assets constituting security therefor, (b) to advance or supply funds (i) for
the purchase or payment of such Debt or (ii) to maintain working capital or
other balance sheet conditions or otherwise to advance or make available funds
for the purchase or payment of such Debt, (c) to lease property or to purchase
securities or other property or services primarily for the purpose of assuring
the owner of such Debt of the ability of the primary obligor to make payment of
the Debt or (d) otherwise to assure the owner of the Debt of the primary obligor
against loss in respect thereof.
 
“Hazardous Materials” means any pollutant, contaminant, solid waste, asbestos,
petroleum product, crude oil or a fraction thereof, any toxic or hazardous
substance, material or waste, any flammable, explosive or radioactive material,
any chemical which causes cancer or reproductive effects, or any other material
or substance not mentioned above which is regulated under any Environmental Law.
 
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“Highest Lawful Rate” means, as to any Bank, at the particular time in question,
the maximum nonusurious rate of interest which, under applicable law, such Bank
is then permitted to charge the Borrower on the Loans or the other obligations
of the Borrower under the Loan Documents, and as to any other Person, at the
particular time in question, the maximum nonusurious rate of interest which,
under applicable law, such Person is then permitted to charge with respect to
the obligation in question. If the maximum rate of interest which, under
applicable law, the Banks are permitted to charge the Borrower on the Loans or
the other obligations of the Borrower under the Loan Documents shall change
after the date hereof, the Highest Lawful Rate shall be automatically increased
or decreased, as the case may be, as of the effective time of such change
without notice to the Borrower or any other Person.
 
“Interest Expense” means, for any period, the aggregate of all interest expense
deducted in the calculation of the Net Income of the Borrower for such period,
determined in accordance with generally accepted accounting principles.
 
“Interest Period” means, for each Loan comprising part of the same Borrowing,
the period commencing on the date of such Loan or the date of the Conversion of
such Loan, as applicable, and ending on the last day of the period selected by
the Borrower pursuant to the provisions below. The duration of each such
Interest Period shall be (a) in the case of an Adjusted CD Rate Loan, 30, 60, 90
or 180 days, (b) in the case of a Prime Rate Loan, a period ending on the
Termination Date, and (c) in the case of a Eurodollar Rate Loan, 1, 2, 3 or 6
months; provided, however, that:
 
(i)    the Borrower may not select any Interest Period for a Loan that ends
after the Termination Date;
 
(ii)   Interest Periods commencing on the same date for Loans comprising part of
the same Borrowing shall be of the same duration; and
 
(iii)   whenever the last day of any Interest Period would otherwise occur on a
day other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, provided, in the case of
any Interest Period for a Eurodollar Rate Loan, that if such extension would
cause the last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on the next
preceding Business Day.
 
“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from
time to time (or any successor statute), and the regulations promulgated
thereunder.
 
“Investment” means any direct or indirect investment by one Person (the
“investor”) in another Person (the “investee”), including, without limitation,
(a) any loan or advance, whether initially funded by the investor or acquired by
the investor from a third party, (b) any acquisition of equity interests by the
investor, whether directly from the investee or from a third party by way of
share purchase, merger or otherwise, (c) any capital or other contribution to
the investee, whether made in cash or other assets, or by contributing a
promissory note payable by the investor to the investee, (d) any Guarantee by
the investor of Debt of the investee, and (e) the Fair Market Value of any
assets or services transferred to the investee less the Fair Market Value of any
consideration received by the investor in exchange therefor; provided, however,
that the term “Investment” shall not include undistributed earnings on an
Investment; and the amount of an “Investment,” for purposes of Section 6.07
hereof, shall be reduced by the amount of capital returned to the investor by
the investee. The amount of any Investment that is made by transferring property
other than Dollars shall be the Fair Market Value of the property so
transferred.
 
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“Issuer” means JPMorgan Chase Bank, N.A. and its successors and assigns, or any
other Bank that agrees to be an issuer of a Letter of Credit hereunder.
 
“Letter of Credit” means a letter of credit issued pursuant to Section 2.16
hereof.
 
“Letter of Credit Liabilities” means, at any time and in respect of any Letter
of Credit, the sum of (i) the amount available for drawings under such Letter of
Credit plus (ii) the aggregate unpaid amount of all payments made by Issuer to
the beneficiary of a Letter of Credit that are not either repaid by Borrower or
added to the amounts outstanding under the Notes.
 
“Lien” means, when used with respect to any Person, any mortgage, lien, charge,
pledge, security interest or encumbrance of any kind (whether voluntary or
involuntary, and whether imposed or created by operation of law or otherwise)
upon, or pledge of, any of its property or assets, whether now owned or
hereafter acquired, or any conditional sale agreement, Capital Lease or other
title retention agreement.
 
“Loans” means the Loans made by the Banks to the Borrower pursuant to this
Agreement.
 
“Loan Documents” shall mean this Agreement, the Notes, the Fee Letter and all
other agreements, instruments and documents, including, without limitation,
security agreements, notes, warrants, guaranties, mortgages, deeds of trust,
subordination agreements, pledges, powers of attorney, consents, assignments,
collateral assignments, letter agreements, contracts, notices, leases,
amendments, financing statements, letter of credit applications and
reimbursement agreements, and all other writings heretofore, now, or hereafter
executed by or on behalf of the Borrower, any of its Affiliates or any other
Person in connection with or relating to this Agreement, together with all
agreements, instruments and documents referred to therein or contemplated
thereby.
 
“Majority Banks” means at any time Banks holding at least fifty-one percent
(51%) of the then aggregate unpaid principal amount of the Loans or, if no Loans
are outstanding, Banks having Commitment Percentages in the aggregate equal to
at least fifty-one percent (51%).
 
“Material Adverse Effect” means, as to any Person, the occurrence of any event
that has, or could reasonably be expected to have, a material adverse effect on
the business, property, assets, operations or condition, financial or otherwise,
of such Person or on the ability of such Person to perform its obligations under
the Loan Documents to which it is a party or to consummate the transactions
contemplated thereby.
 
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“Material Debt” means, as at any date, an amount equal to five percent (5%) of
the Borrower’s Funded Debt as of such date.
 
“Material Subsidiaries” means, collectively, each Consolidated Subsidiary of the
Borrower that meets any of the following conditions: (a) the aggregate
Investment of the Borrower and its other Consolidated Subsidiaries in such
Consolidated Subsidiary exceeds five percent (5%) of the total assets of the
Borrower and its Consolidated Subsidiaries as of the end of the most recently
completed calendar year; or (b) the Borrower and its other Consolidated
Subsidiaries’ proportionate share of the total assets (after intercompany
eliminations) of such Consolidated Subsidiary exceeds five percent (5%) of the
total assets of the Borrower and its Consolidated Subsidiaries as of the end of
the most recently completed calendar year; or (c) the Borrower and its other
Consolidated Subsidiaries’ equity in the income from continuing operations
before income taxes, extraordinary items and cumulative effect of a change in
accounting principle of such Consolidated Subsidiary exceeds five percent (5%)
of Net Income for the most recently completed calendar year.
 
“Moody’s Rating” means the rating classification of the Borrower’s senior debt,
classified according to risk, issued by Moody’s Investors Service.
 
“Net Income” means, for any period, the consolidated net earnings of the
Borrower and its Consolidated Subsidiaries for such period, determined in
accordance with generally accepted accounting principles.
 
“Net Worth” means, as of any date, the total shareholder’s equity (including
capital stock, additional paid-in capital and retained earnings after deducting
treasury stock) which would appear on a consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries prepared as of such date in
accordance with generally accepted accounting principles.
 
“New Bank” has the meaning specified in Section 2.17(b).
 
“New Bank Agreement” has the meaning specified in Section 2.17(b).
 
“Note” shall mean a Note issued pursuant to Section 2.04, together with all
modifications, extensions, renewals and rearrangements thereof from time to time
in effect.
 
“Other Activities” has the meaning specified in Section 8.03.
 
“Other Financings” has the meaning specified in Section 8.03
 
“Other Taxes” has the meaning specified in Section 2.11.
 
“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA and any successor thereto.
 
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“Person” means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture or other entity, or Governmental Authority.
 
“Plan” means any employee pension benefit plan which is covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the
Internal Revenue Code, and in respect of which the Borrower, or any ERISA
Affiliate is an “employer” as defined in Section 3(5) of ERISA.
 
“Prime Rate” means, as of any particular date, a rate per annum equal to the
highest of (a) the Federal Funds Rate plus one-half of one percent (½%), (b) the
secondary market rate for three-month Certificates of Deposit (adjusted for
statutory reserve requirements) plus one percent (1%), and (c) the prime rate
per annum most recently announced by the Agent as its prime rate of interest per
annum, automatically fluctuating upward or downward, as the case may be, on the
day of each announcement without special notice to the Borrower or any other
Person. The Borrower acknowledges that the prime rate referred to in clause (c)
of the preceding sentence may not be the Agent’s best or lowest rate, or favored
rate, and any statement, representation or warranty in that regard or to that
effect is hereby expressly disclaimed by the Agent.
 
“Prime Rate Borrowing” means a Borrowing consisting of Prime Rate Loans.
 
“Prime Rate Loan” means a Loan that the Borrower has designated, or is deemed to
have designated, as such in accordance with Article II.
 
“Proceeds of Remedies” has the meaning specified in Section 7.04.
 
“Quarterly Payment Date” means each of September 30, December 31, March 31 and
June 30 of each year.
 
“Re-Allocation Date” has the meaning specified in Section 2.17(e).
 
“Register” has the meaning specified in Section 9.02.
 
“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System (respecting margin credit extended by banks), as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
 
“Regulation X” means Regulation X of the Board of Governors of the Federal
Reserve System (respecting borrowers who obtain margin credit) as the same is
from time to time in effect, and all official rulings and interpretations
thereunder or thereof.
 
“Release” means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping or disposing into the
environment (including the abandonment or discarding of barrels, containers and
other closed receptacles).
 
“Reportable Event” means any of the events set forth in Section 4043(b) of ERISA
or the regulations thereunder.
 
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“Requirements of Environmental Laws” means the requirements of any applicable
Environmental Law relating to or affecting the Borrower or any of its
Subsidiaries or the condition or operation of such Person’s business or its
properties, both real and personal.
 
“Requirements of Law” shall mean any federal, state or local law, rule or
regulation, permit or other binding determination of any Governmental Authority.
 
“Responsible Officer” means, as to any Person, the Chief Executive Officer, the
President, the Chief Financial Officer or the Treasurer of such Person, or any
employee of such Person designated in writing as a Responsible Officer by the
Chief Executive Officer of such Person.
 
“Restricted Investment” means (a) any Investment by the Borrower or a
Consolidated Subsidiary in an Excluded Affiliate and (b) any payment by the
Borrower or any Consolidated Subsidiary of Debt of any Excluded Affiliate to the
extent the Borrower or such Consolidated Subsidiary is not legally obligated to
make such payment under the terms of such Debt.
 
“Restricted Payment” means any dividend or other distribution in respect of the
capital stock or other equity interest of the Borrower or any Subsidiary of the
Borrower (other than a distribution of capital stock or other equity interests
of a Subsidiary of the Borrower), including, without limitation, any
distribution resulting in the acquisition by the Borrower of securities which
would constitute treasury stock. For purposes of this Agreement, the amount of
any Restricted Payment made in property shall be the greater of (x) the Fair
Market Value of such property (as determined by good faith by the board of
directors (or equivalent governing body) of the person making such Restricted
Payment) and (y) the net book value thereof on the books of such Person, in each
case determined as of the date on which such Restricted Payment is made.
 
“Revolving Credit Exposure” means, with respect to any Bank at any time, the sum
of the outstanding principal amount of such Bank’s Revolving Loans and its
Letter of Credit Liabilities and Swingline Exposure at such time.
 
“Revolving Loan” means a Loan made pursuant to Section 2.02.
 
“S&P Rating” means the rating classification of the Borrower’s senior debt,
classified according to risk, issued by Standard & Poor’s Rating Services, a
division of The McGraw-Hill Companies, Inc.
 
“Subsidiary” means, with respect to any Person, each other Person of which or in
which such Person and its other Subsidiaries own, hold or control, directly or
indirectly, securities or other ownership interests having ordinary voting
power, in the absence of contingencies, to elect a majority of the board of
directors of such other Person, or other persons performing similar functions
for such Person, or, if there are no such directors or persons, having general
voting power with respect to the activities of such Person, it being understood
that the power to elect exactly 50% of the board of directors or such other
persons does not constitute a “majority” as used herein. Unless the context
otherwise requires, all references to a Subsidiary shall be considered to be
references to Subsidiaries of the Borrower.
 
Annex A - Page 13

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“Substitution Event” has the meaning specified in Section 2.15.
 
"Swingline Bank" means JPMorgan Chase Bank, in its capacity as lender of
Swingline Loans hereunder.
 
"Swingline Exposure" means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Bank at
any time shall be its Commitment Percentage of the total Swingline Exposure at
such time.
 
"Swingline Loan" means a Loan made pursuant to Section 2.03.
 
“Taxes” has the meaning specified in Section 2.11.
 
“Termination Date” means June 14, 2011, or the earlier termination in whole of
the Commitments pursuant to Sections 2.05 or 7.01.
 
“Total Capitalization” means the total capitalization of the Borrower, including
all debt and all equity, as determined in accordance with generally accepted
accounting principles.
 
“Total Commitment” means an amount equal to the sum of the Banks’ Commitments.
 
“Transfer Notice” has the meaning specified in Section 9.02.
 
“Type” means, with respect to any Loan, the type of interest rate applicable to
such Loan pursuant to this Agreement, and refers to an Adjusted CD Rate Loan, a
Prime Rate Loan or a Eurodollar Rate Loan, each of which shall is a “Type” of
Loan. Loans having different Interest Periods, regardless of whether they
commence on the same date or have the same type of interest rate, shall be
considered different Types of Loans.
 
Annex A - Page 14

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SCHEDULE 2.01
ALLOCATION AND BANK NAMES
 
1.
JPMorgan Chase Bank, N.A.
         
Allocation
$45,000,000.00

JPMorgan Chase Bank, N.A.
707 Travis Street, 8 CBBN 96
Houston, Texas 77002
Attention: John Stucker
Telecopier: (713) 216-3769
Telephone: (713) 216-2339
john.stucker@jpmchase.com

2.
Bank of America, N.A.
         
Allocation
$45,000,000.00

Bank of America, N.A.
Attention: David McCauley
901 Main Street, 66th Floor
Dallas, Texas 75202-3714
Telecopier: (214) 209-0985
Telephone: (214) 209-0940
david.l.mccauley@bankofamerica.com

3.
Wells Fargo Bank, N.A.
         
Allocation
$35,000,000.00

Wells Fargo Bank, N.A.
Wells Fargo U.S. Corporate Banking
1445 Ross Ave, Suite 2320
Dallas, Texas 75202
Attention: Stephen C. Melton
Telecopier (214) 969-0371
Telephone: (214) 661-1221
scmelton@wellsfargo.com

4.
DnB NOR Bank ASA
         
Allocation
$35,000,000.00

DnB NOR Bank ASA
200 Park Avenue, 31st Floor
New York, New York 10166
Attention: Kevin O’Hara
Telecopier: (212) 681-3900
Telephone: (212) 681-3860
 
Schedule 2.01 - Page 1

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5.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
         
Allocation
$35,000,000.00

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
2001 Ross Avenue, Suite 3150
Dallas, Texas 75201
Attention: Doug Barnell
Telecopier: (214) 954-1007
Telephone: (214) 954-1240
dbarnell@us.mufg.jp

6.
Comerica Bank
         
Allocation
$20,000,000.00

Comerica Bank
4100 Spring Valley Road, Suite 400
Dallas, Texas 75244
Attention: Bancroft Mattei
Telecopier: (972) 361-2550
Telephone: _____________
 
7.
The Northern Trust Company
         
Allocation
$20,000,000.00

The Northern Trust Company
50 South LaSalle Street B-2
Chicago, Illinois 60603
Attention: Paul H. Theiss
Telecopier: (312) 444-7028
Telephone: (312) 557-1791
Pht1@ntrs.com

8.
Amegy Bank
         
Allocation
$15,000,000.00

Amegy Bank
4400 Post Oak Parkway
Houston, Texas 77027
Attention: Preston Moore
Telecopier: (713) 571-5154
Telephone: _____________
 
 
Schedule 2.01 - Page 2

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