exv10w11



 



EXHIBIT 10.11












AMENDED AND RESTATED

CREDIT AGREEMENT



dated as of August 13, 2001

and amended and restated as of

July 2, 2002



among



UNITED DEFENSE INDUSTRIES, INC.,



VARIOUS LENDING INSTITUTIONS,



DEUTSCHE BANK SECURITIES INC.



and



LEHMAN BROTHERS INC.,

as CO-LEAD ARRANGERS,



DEUTSCHE BANK TRUST COMPANY AMERICAS,

as ADMINISTRATIVE AGENT,



LEHMAN COMMERCIAL PAPER INC.,

as SYNDICATION AGENT,



and



CITICORP USA, INC.,



THE BANK OF NOVA SCOTIA



and



CREDIT LYONNAIS NEW YORK BRANCH,

as DOCUMENTATION AGENTS















 



TABLE OF CONTENTS




	 	 	 	 	 	 
	 	 	 	Page
	 	 	 	

	SECTION 1. Amount and Terms of Credit
	 	 	1	 
	 	1.01 Commitment
	 	 	1	 
	 	1.02 Minimum Borrowing Amounts, etc.
	 	 	3	 
	 	1.03 Notice of Borrowing
	 	 	3	 
	 	1.04 Disbursement of Funds
	 	 	4	 
	 	1.05 Notes
	 	 	4	 
	 	1.06 Conversions
	 	 	5	 
	 	1.07 Pro Rata Borrowings
	 	 	5	 
	 	1.08 Interest
	 	 	6	 
	 	1.09 Interest Periods
	 	 	6	 
	 	1.10 Increased Costs, Illegality, etc.
	 	 	7	 
	 	1.11 Compensation
	 	 	9	 
	 	1.12 Change of Lending Office
	 	 	10	 
	 	1.13 Replacement of Lenders
	 	 	10	 
	SECTION 2. Letters of Credit
	 	 	11	 
	 	2.01 Letters of Credit
	 	 	11	 
	 	2.02 Letter of Credit Requests; Notices of Issuance
	 	 	12	 
	 	2.03 Agreement to Repay Letter of Credit Drawings
	 	 	12	 
	 	2.04 Letter of Credit Participations
	 	 	13	 
	 	2.05 Increased Costs
	 	 	15	 
	SECTION 3. Fees; Commitments
	 	 	16	 
	 	3.01 Fees
	 	 	16	 
	 	3.02 Reduction of Revolving Commitments
	 	 	17	 
	SECTION 4. Payments
	 	 	17	 
	 	4.01 Voluntary Prepayments
	 	 	17	 
	 	4.02 Mandatory Prepayments
	 	 	18	 
	 	4.03 Method and Place of Payment
	 	 	22	 
	 	4.04 Net Payments
	 	 	22	 
	SECTION 5. Conditions Precedent
	 	 	24	 
	 	5.01 Conditions Precedent to All Credit Events
	 	 	24	 
	SECTION 6. Representations, Warranties and Agreements
	 	 	24	 
	 	6.01 Corporate Status
	 	 	24	 
	 	6.02 Corporate Power and Authority
	 	 	25	 
	 	6.03 No Violation
	 	 	25	 
	 	6.04 Litigation
	 	 	25	 




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	 	 	 	Page
	 	 	 	

	 	6.05 Margin Regulations
	 	 	25	 
	 	6.06 Governmental Approvals
	 	 	25	 
	 	6.07 Investment Company Act
	 	 	26	 
	 	6.08 Public Utility Holding Company Act
	 	 	26	 
	 	6.09 True and Complete Disclosure
	 	 	26	 
	 	6.10 Financial Condition; Financial Statements
	 	 	26	 
	 	6.11 Security Interests
	 	 	27	 
	 	6.12 Tax Returns and Payments
	 	 	27	 
	 	6.13 Compliance with ERISA
	 	 	28	 
	 	6.14 Subsidiaries
	 	 	29	 
	 	6.15 Intellectual Property
	 	 	29	 
	 	6.16 Environmental Matters
	 	 	29	 
	 	6.17 Properties
	 	 	30	 
	 	6.18 Labor Relations
	 	 	30	 
	 	6.19 Compliance with Statutes, etc.
	 	 	30	 
	SECTION 7. Affirmative Covenants
	 	 	31	 
	 	7.01 Information Covenants
	 	 	31	 
	 	7.02 Books, Records and Inspections
	 	 	33	 
	 	7.03 Insurance
	 	 	33	 
	 	7.04 Payment of Taxes
	 	 	33	 
	 	7.05 Corporate Franchises
	 	 	34	 
	 	7.06 Compliance with Statutes, etc.
	 	 	34	 
	 	7.07 ERISA
	 	 	34	 
	 	7.08 Good Repair
	 	 	35	 
	 	7.09 End of Fiscal Years; Fiscal Quarters
	 	 	35	 
	 	7.10 Additional Security; Further Assurances
	 	 	35	 
	 	7.11 Use of Proceeds
	 	 	37	 
	 	7.12 Interest Rate Agreement
	 	 	37	 
	 	7.13 Compliance with Environmental Laws
	 	 	37	 
	 	7.14 Notices of Assignment
	 	 	38	 
	SECTION 8. Negative Covenants
	 	 	38	 
	 	8.01 Changes in Business
	 	 	39	 
	 	8.02 Consolidation, Merger, Sale or Purchase of Assets, etc.
	 	 	39	 
	 	8.03 Liens
	 	 	40	 
	 	8.04 Indebtedness
	 	 	41	 
	 	8.05 Capital Expenditures
	 	 	42	 
	 	8.06 Advances, Investments and Loans
	 	 	42	 
	 	8.07 Limitation on Creation of Subsidiaries
	 	 	44	 
	 	8.08 Modifications
	 	 	44	 
	 	8.09 Dividends, etc.
	 	 	44	 
	 	8.10 Transactions with Affiliates
	 	 	45	 
	 	8.11 Interest Coverage Ratio
	 	 	46	 
	 	8.12 Leverage Ratio
	 	 	46	 
	 	8.13 Minimum Consolidated Net Worth
	 	 	47	 



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	 	 	 	Page
	 	 	 	

	 	8.14 Limitation On Issuance of Stock
	 	 	47	 
	SECTION 9. Events of Default
	 	 	47	 
	 	9.01 Payments
	 	 	47	 
	 	9.02 Representations, etc.
	 	 	47	 
	 	9.03 Covenants
	 	 	47	 
	 	9.04 Default Under Other Agreements
	 	 	47	 
	 	9.05 Bankruptcy, etc.
	 	 	48	 
	 	9.06 ERISA
	 	 	48	 
	 	9.07 Security Documents
	 	 	49	 
	 	9.08 Guaranty
	 	 	49	 
	 	9.09 Judgments
	 	 	49	 
	 	9.10 Change of Control
	 	 	49	 
	SECTION 10. Definitions
	 	 	50	 
	SECTION 11. The Agent
	 	 	74	 
	 	11.01 Appointment
	 	 	74	 
	 	11.02 Nature of Duties
	 	 	74	 
	 	11.03 Lack of Reliance on the Agents
	 	 	75	 
	 	11.04 Certain Rights of the Agents
	 	 	75	 
	 	11.05 Reliance
	 	 	75	 
	 	11.06 Indemnification
	 	 	75	 
	 	11.07 The Agents in Their Individual Capacity
	 	 	76	 
	 	11.08 Holders
	 	 	76	 
	 	11.09 Resignation by the Administrative Agent
	 	 	76	 
	SECTION 12. Miscellaneous
	 	 	77	 
	 	12.01 Payment of Expenses, etc.
	 	 	77	 
	 	12.02 Right of Setoff
	 	 	77	 
	 	12.03 Notices
	 	 	78	 
	 	12.04 Benefit of Agreement
	 	 	78	 
	 	12.05 No Waiver; Remedies Cumulative
	 	 	80	 
	 	12.06 Payments Pro Rata
	 	 	80	 
	 	12.07 Calculations; Computations
	 	 	81	 
	 	12.08 Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial
	 	 	81	 
	 	12.09 Counterparts
	 	 	82	 
	 	12.10 Effectiveness
	 	 	82	 
	 	12.11 Headings Descriptive
	 	 	82	 
	 	12.12 Amendment or Waiver
	 	 	82	 
	 	12.13 Survival
	 	 	83	 
	 	12.14 Domicile of Loans
	 	 	83	 
	 	12.15 Confidentiality
	 	 	83	 
	 	12.16 Lender Register
	 	 	84	 







(iii)






 




	 	 	 	 	 
	ANNEX I	 	
—
	 	Commitments
	ANNEX II	 	
—
	 	Addresses
	ANNEX III	 	
—
	 	Subsidiaries
	ANNEX IV	 	
—
	 	Real Properties
	ANNEX V	 	
—
	 	Existing Indebtedness
	ANNEX VI	 	
—
	 	ERISA
	ANNEX VII	 	
—
	 	Liens
	ANNEX VIII	 	
—
	 	Existing Investments
	ANNEX IX	 	
—
	 	COLIs
	ANNEX X	 	
—
	 	USMR Letters of Credit
	 	 	 	 	 
	EXHIBIT A	 	
—
	 	Form of Notice of Borrowing
	EXHIBIT B	 	
—
	 	Form of Letter of Credit Request
	EXHIBIT C	 	
—
	 	Form of Section 4.04 Certificate
	EXHIBIT D	 	
—
	 	Form of Subsidiary Guaranty
	EXHIBIT E	 	
—
	 	Form of Pledge Agreement
	EXHIBIT F	 	
—
	 	Form of Security Agreement
	EXHIBIT G	 	
—
	 	Form of Assignment Agreement



(iv)






 



          AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 13, 2001 and
amended and restated as of July 2, 2002, among UNITED DEFENSE INDUSTRIES,
INC., a Delaware corporation, the lenders from time to time party hereto
(each, a “Lender” and, collectively, the “Lenders”), DEUTSCHE BANK TRUST
COMPANY AMERICAS (f/k/a Bankers Trust Company), as Administrative Agent (the
“Administrative Agent”), LEHMAN COMMERCIAL PAPER INC., as Syndication Agent
(the “Syndication Agent”) and CITICORP USA, INC., THE BANK OF NOVA SCOTIA and
CREDIT LYONNAIS NEW YORK BRANCH, as Documentation Agents (the “Documentation
Agents” and together with the Administrative Agent and the Syndication Agent,
collectively, the “Agents”). Unless otherwise defined herein, all capitalized
terms used herein and defined in Section 10 are used herein as so defined.



W I T N E S S E T H:



          WHEREAS, subject to and upon the terms and conditions herein set forth,
the Lenders are willing to make available to the Borrower the credit
facilities provided for herein;



          NOW, THEREFORE, IT IS AGREED:



          SECTION 1. Amount and Terms of Credit.



          1.01 Commitment. Subject to and upon the terms and conditions herein set
forth, each Lender severally agrees to make or continue a loan or loans (each,
a “Loan” and, collectively, the “Loans”) to the Borrower, as set forth below:



          (a) Loans designated as “A Term Loans” were made (i) on the Initial
Borrowing Date by each Lender with an A Term Loan Commitment under and as defined in
the Original Credit Agreement in the amount of such A Term Commitment and (ii) to the
extent made under Section 3 of the Agreement to Amend, on the Extended Cut-Off Date as
Replacement A Term Loans, with the principal amount of each such A Term Loan outstanding on
the Restatement
Effective Date to continue to remain outstanding hereunder as A Term Loans
I (collectively, the
“A Term Loans I”) subject to the same Interest Periods as theretofore
applicable to them. On the
Restatement Effective Date, each Additional Lender shall have made
available to the Borrower
an additional term loan (each an “A Term Loan II” and collectively the “A
Term Loans II”) in
the amount specified for such Additional Lender under the heading
“Additional A Term Loans”
on Schedule I to the Agreement to Amend. Once repaid, A Term Loans may not
be reborrowed.



          (b) Loans designated as “B Term Loans” were made (i) on the Initial
Borrowing Date by each Lender with a B Term Loan Commitment under and as defined in
the Original Credit Agreement in the amount of such B Term Commitment and (ii) to the
extent made under Section 3 of the Agreement to Amend, on the Extended Cut-Off Date as
Replacement B Term Loans, with the principal amount of each such B Term Loan outstanding on
the Restatement Effective Date to continue to remain outstanding hereunder as B Term Loans
I (collectively, the “B Term Loans I”) subject to the same Interest Periods as theretofore
applicable to them. On the Restatement Effective Date, each Additional Lender shall have made
available to the Borrower an additional term loan (each a “B Term Loan II” and collectively the “B
Term Loans II”) in the



 






 



amount specified for such Additional Lender under the heading “Additional B
Term Loans” on Schedule I to the Agreement to Amend. Once repaid, B Term Loans
may not be reborrowed.


          (c) Loans under the Revolving Facility (each, a “Revolving Loan” and,
collectively, the “Revolving Loans”) (i) that were outstanding on the
Restatement Effective Date shall continue to remain outstanding hereunder as Revolving Loans subject to the
same Interest Periods as were applicable to them immediately prior to the Restatement
Effective Date, (ii) may thereafter be made at any time and from time to time prior to the A/RF
Maturity Date, (iii) except as hereinafter provided, may, at the option of the Borrower, be
incurred and maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans provided
that all Revolving Loans made as part of the same Borrowing shall, unless otherwise
specifically provided herein, consist of Revolving Loans of the same Type, (iv) may be repaid and
reborrowed in accordance with the provisions hereof and (v) shall not exceed (giving effect to any
incurrence thereof and the use of the proceeds of such incurrence) for any Lender in aggregate
principal amount at any time outstanding that amount which, when combined with such Lender’s
Adjusted RF Percentage of the sum of (x) the Letter of Credit Outstandings at such time and (y)
the outstanding principal amount of Swingline Loans at such time, equals the Revolving Commitment of
such Lender.



          (d) Subject to and upon the terms and conditions herein set forth, the
Swingline Lender agrees to make at any time and from time to time after the Initial
Borrowing Date and prior to the Swingline Expiry Date, a loan or loans to the Borrower (each,
a “Swingline Loan” and, collectively, the “Swingline Loans”), which Swingline Loans (i) shall
be made and maintained as Base Rate Loans, (ii) may be repaid and reborrowed in accordance
with the provisions hereof and (iii) shall not exceed (giving effect to any incurrence thereof
and the use of the proceeds of such incurrence) in aggregate principal amount at any time
outstanding that amount which, when combined with the aggregate principal amount of all Revolving
Loans made by Non-Defaulting Lenders then outstanding and the Letter of Credit
Outstandings at such time, equals the Adjusted Total Revolving Commitment then in effect (after
giving effect to any changes thereto on such date). The Swingline Lender will not make a
Swingline Loan after it has received written notice from the Required Lenders that one or more of
the applicable conditions to Credit Events specified in Section 5.01 are not then
satisfied until such conditions are satisfied.



          (e) On any Business Day, the Swingline Lender may, in its sole discretion,
give notice to the RF Lenders that its outstanding Swingline Loans shall be
funded with a Borrowing of Revolving Loans (provided that each such notice shall be deemed to have
been automatically given upon the occurrence of an Event of Default under Section 9.05 or
upon the exercise of any of the remedies provided in the last paragraph of Section 9), in which
case a Borrowing of Revolving Loans constituting Base Rate Loans (each such Borrowing,
a “Mandatory Borrowing”) shall be made on the immediately succeeding Business Day by
all RF Lenders pro rata based on each RF Lender’s Adjusted RF Percentage, and the proceeds
thereof shall be applied directly to repay the Swingline Lender for such outstanding
Swingline Loans. Each RF Lender hereby irrevocably agrees to make Base Rate Loans upon one Business
Day’s notice pursuant to each Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the date specified in writing by the Swingline Lender
notwithstanding: (i) that the amount of the Mandatory Borrowing may not comply with the Minimum
Borrowing Amount otherwise required hereunder, (ii) whether any conditions specified
in Section 5.01 are




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then satisfied, (iii) whether a Default or an Event of Default has occurred and
is continuing, (iv) the date of such Mandatory Borrowing and (v) the amount of
the Total Revolving Commitment at such time. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code in respect of the Borrower), each RF Lender (other
than the Swingline Lender) hereby agrees that it shall forthwith purchase from
the Swingline Lender (without recourse or warranty) such assignment of the
outstanding Swingline Loans as shall be necessary to cause the RF Lenders to
share in such Swingline Loans ratably based upon their respective Adjusted RF
Percentages, provided that all interest payable on the Swingline Loans shall be
for the account of the Swingline Lender until the date the respective assignment
is purchased and, to the extent attributable to the purchased assignment, shall
be payable to the RF Lender purchasing same from and after such date of
purchase.


          1.02 Minimum Borrowing Amounts, etc. The aggregate principal
amount of each Borrowing shall not be less than the Minimum Borrowing Amount.
More than one Borrowing may be incurred on any day, provided that at no time
shall there be outstanding more than fifteen Borrowings of Eurodollar Loans.



          1.03 Notice of Borrowing. (a) Whenever the Borrower desires to
incur Revolving Loans (excluding Mandatory Borrowings), it shall give the
Administrative Agent at its Notice Office, prior to 12:00 Noon (New York time),
at least three Business Days’ prior written notice (or telephonic notice
promptly confirmed in writing) of each proposed incurrence of Eurodollar Loans
and at least one Business Day’s prior written notice (or telephonic notice
promptly confirmed in writing) of each proposed incurrence of Base Rate Loans.
Each such notice (each, a “Notice of Borrowing”) shall be in the form of Exhibit
A and shall be irrevocable and shall specify (i) the aggregate principal amount
of the Revolving Loans to be made pursuant to such incurrence, (ii) the date of
incurrence (which shall be a Business Day) and (iii) whether the respective
Borrowing shall consist of Base Rate Loans or Eurodollar Loans and, if
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall promptly give each RF Lender written notice (or
telephonic notice promptly confirmed in writing) of each proposed incurrence of
Revolving Loans of such RF Lender’s proportionate share thereof and of the other
matters covered by the Notice of Borrowing.



          (b) (i) Whenever the Borrower desires to make a Borrowing of
Swingline Loans hereunder, it shall give the Swingline Lender, prior to 2:00
P.M. (New York time) on the day such Swingline Loan is to be made, written
notice (or telephonic notice promptly confirmed in writing) of each Swingline
Loan to be made hereunder. Each such notice shall be irrevocable and shall
specify in each case (x) the date of such Borrowing (which shall be a Business
Day) and (y) the aggregate principal amount of the Swingline Loan to be made
pursuant to such Borrowing.



          (ii) Mandatory Borrowings shall be made upon the notice
specified in Section 1.01(e), with the Borrower irrevocably agreeing, by its
incurrence of any Swingline Loan, to the making of Mandatory Borrowings as set
forth in such Section 1.01(e).



          (c) Without in any way limiting the obligation of the Borrower
to confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent, the




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Swingline Lender (in the case of a Borrowing of Swingline Loans), or the Letter
of Credit Issuer (in the case of the issuance of Letters of Credit), as the case
may be, may prior to receipt of written confirmation act without liability upon
the basis of and consistent with such telephonic notice, believed by the
Administrative Agent, the Swingline Lender or the Letter of Credit Issuer in
good faith to be from an Authorized Officer of the Borrower. In each such case,
the Borrower hereby waives the right to dispute the Administrative Agent’s, the
Swingline Lender’s or the Letter of Credit Issuer’s record of the terms of such
telephonic notice, unless such record reflects gross negligence or willful
misconduct on the part of the Administrative Agent, the Swingline Lender or the
Letter of Credit Issuer, as the case may be.


          1.04 Disbursement of Funds, (a) No later than 1:00 P.M. (New
York time) on the date specified in each Notice of Borrowing or 2:00 P.M. (New
York time) on the date specified in a notice described in Section 1.03(b)(i),
each RF Lender will make available its pro rata share of each Borrowing
requested to be made on such date or in the case of Swingline Loans, the
Swingline Lender shall make available the full amount thereof in the manner
provided below. All such amounts shall be made available to the Administrative
Agent in Dollars and immediately available funds at the Payment Office and the
Administrative Agent promptly will make available to the Borrower by depositing
to its account at the Payment Office or as otherwise directed in the applicable
Notice of Borrowing the aggregate of the amounts so made available in the type
of funds received. Unless the Administrative Agent shall have been notified by
any RF Lender prior to the date of the proposed incurrence that such RF Lender
does not intend to make available to the Administrative Agent its portion of the
Revolving Loans to be made on such date, the Administrative Agent may assume
that such RF Lender has made such amount available to the Administrative Agent
on such date, and the Administrative Agent, in reliance upon such assumption,
may (in its sole discretion and without any obligation to do so) make available
to the Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Administrative Agent by such RF Lender and the
Administrative Agent has made available same to the Borrower, the Administrative
Agent shall be entitled to recover such corresponding amount from such RF
Lender. If such RF Lender does not pay such corresponding amount forthwith upon
the Administrative Agent’s demand therefor, the Administrative Agent may notify
the Borrower, and, upon receipt of such notice, the Borrower shall promptly pay
such corresponding amount to the Administrative Agent. The Administrative Agent
shall also be entitled to recover on demand from such RF Lender or the Borrower,
as the case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the Administrative
Agent to the Borrower to the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (x) if paid by such RF
Lender, the overnight Federal Funds Effective Rate or (y) if paid by the
Borrower, the then applicable rate of interest, calculated in accordance with
Section 1.08, for the respective Loans.



          (b) Nothing herein shall be deemed to relieve any Lender from
its obligation to fulfill its commitments hereunder or to prejudice any rights
which the Borrower may have against any Lender as a result of any default by
such Lender hereunder.



          1.05 Notes. (a) On the Initial Borrowing Date, the Borrower
issued (i) to each Lender that made an A Term Loan on such date an A Term Note,
(ii) to each Lender that made a B Term Loan on such date a B Term Note, (iii) to
each Lender with a Revolving Commitment on



-4-






 



such date a Revolving Note and (iv) to the Swingline Lender a Swingline Note.
The Borrower has (i) from time to time thereafter, in connection with
assignments made pursuant to Section 12.04 hereof, issued new Notes as required
by such Section to the respective assignees, (ii) on the Extended Cut-Off Date,
issued to each Lender making a Replacement A Term Loan and/or a Replacement B
Term Loan that has requested same an A Term Note and/or B Term Note to evidence
same, in each case modified as provided in the Agreement to Amend, and (iii) on
the Restatement Effective Date, issued to each Additional Lender an A Term Note
II and/or a B Term Note II to evidence the A Term Loan II and/or B Term Loan II
made by such Additional Lender on such date. The Borrower and each Lender
holding an A Term Note and/or a B Term Note evidencing A Term Loans and/or B
Term Loans made prior to the Extended Cut-Off Date hereby agree that all
references therein to “A Term Loans” or “B Term Loans”, as the case may be,
shall be deemed, on and after the Restatement Effective Date to be references to
“A Term Loans I” or “B Term Loans I”, as the case may be.


          (b) Each Lender will note on its internal records the amount
of each Loan made by it and each payment in respect thereof and will, prior to
any transfer of any of its Notes, endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby. Failure to make any
such notation shall not affect the Borrower’s obligations in respect of such
Loans.



          1.06 Conversions. The Borrower shall have the option to
convert on any Business Day all or a portion at least equal to the applicable
Minimum Borrowing Amount of the outstanding principal amount of the Loans (other
than Swingline Loans which at all times shall be maintained as Base Rate Loans)
owing pursuant to a single Facility into a Borrowing or Borrowings pursuant to
such Facility of another Type of Loan provided that (i) no partial conversion of
a Borrowing of Eurodollar Loans shall reduce the outstanding principal amount of
the Eurodollar Loans made pursuant to such Borrowing to less than the Minimum
Borrowing Amount applicable thereto, (ii) Base Rate Loans may not be converted
into Eurodollar Loans when a Default under Section 9.01 or an Event of Default
is in existence on the date of the proposed conversion if the Administrative
Agent or the Required Lenders shall have determined in its or their sole
discretion not to permit such conversion and (iii) Borrowings of Eurodollar
Loans resulting from this Section 1.06 shall be limited in number as provided in
Section 1.02. Each such conversion shall be effected by the Borrower giving the
Administrative Agent at its Notice Office, prior to 12:00 Noon (New York time),
at least three Business Days’ (or one Business Day’s, in the case of a
conversion into Base Rate Loans) prior written notice (or telephonic notice
promptly confirmed in writing) (each, a “Notice of Conversion”) specifying the
Loans to be so converted (including the relevant Facility), the Type of Loans to
be converted into and, if to be converted into a Borrowing of Eurodollar Loans,
the Interest Period to be initially applicable thereto. The Administrative Agent
shall give each Lender prompt notice of any such proposed conversion affecting
any of its Loans.



          1.07 Pro Rata Borrowings. All Revolving Loans under this
Agreement shall be made by the RF Lenders pro rata on the basis of their
Revolving Commitments, provided that each Mandatory Borrowing shall be funded on
the basis of their Adjusted RF Percentages, if any. It is understood that no
Lender shall be responsible for any default by any other Lender in its
obligation to make Loans hereunder and that each Lender shall be obligated to
make the Loans



-5-






 



provided to be made by it hereunder, regardless of the failure of any other
Lender to fulfill its commitments hereunder.


          1.08 Interest. (a) The unpaid principal amount of each Base
Rate Loan shall bear interest from the date of the Borrowing thereof until the
earlier of repayment or conversion thereof and maturity (whether by acceleration
or otherwise) at a rate per annum which shall at all times be the Applicable
Base Rate Margin plus the Base Rate in effect from time to time.



          (b) The unpaid principal amount of each Eurodollar Loan shall
bear interest from the date of the Borrowing thereof until the earlier of
repayment or conversion thereof and maturity (whether by acceleration or
otherwise) at a rate per annum which shall at all times be the Applicable
Eurodollar Margin plus the relevant Eurodollar Rate.



          (c) All overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount payable
hereunder shall bear interest at a rate per annum equal to the Base Rate in
effect from time to time plus the sum of (i) 2% and (ii) the Applicable Base
Rate Margin provided that principal in respect of Eurodollar Loans shall bear
interest from the date the same becomes due (whether by acceleration or
otherwise) until the end of the Interest Period then applicable to such
Eurodollar Loan at a rate per annum equal to 2% in excess of the rate of
interest applicable thereto on such date.



          (d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (A) if in respect of any Term Loans refinanced under Section 3 of the
Agreement to Amend, as provided therein and (B) otherwise (i) in respect of each
Base Rate Loan, quarterly in arrears on the last Business Day of each January,
April, July and October, (ii) in respect of each Eurodollar Loan, on the last
day of each Interest Period applicable thereto and, in the case of an Interest
Period in excess of three months, on each date occurring at three month
intervals after the first day of such Interest Period and (iii) in respect of
each Loan, on any prepayment or conversion (on the amount prepaid or converted),
at maturity (whether by acceleration or otherwise) and, after such maturity, on
demand.



          (e) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).



          (f) The Administrative Agent, upon determining the interest
rate for any Borrowing of Eurodollar Loans for any Interest Period, shall
promptly notify the Borrower and the Lenders thereof.



          1.09 Interest Periods. (a) At the time the Borrower gives a
Notice of Borrowing or Notice of Conversion in respect of the making of, or
conversion into, a Borrowing of Eurodollar Loans (in the case of the initial
Interest Period applicable thereto) or prior to 12:00 Noon (New York time) on
the third Business Day prior to the expiration of an Interest Period applicable
to a Borrowing of Eurodollar Loans, it shall have the right to elect by giving
the Administrative Agent written notice (or telephonic notice promptly confirmed
in writing) of the Interest Period applicable to such Borrowing, which Interest
Period shall, at the option of the Borrower, be a one, two, three, six or, to
the extent available to all Lenders making or holding



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the Loans subject to such Borrowing and so long as the Administrative Agent
consents thereto, nine or twelve month period. Notwithstanding anything to the
contrary contained above:


          (i) the initial Interest Period for any Borrowing of
Eurodollar Loans shall commence on the date of such Borrowing (including the
date of any conversion from a Borrowing of Base Rate Loans) and each Interest
Period occurring thereafter in respect of such Borrowing shall commence on the
day on which the next preceding Interest Period expires;



          (ii) if any Interest Period begins on a day for which there is
no numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last Business Day of such
calendar month;



          (iii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided that if any Interest Period would otherwise
expire on a day which is not a Business Day but is a day of the month after
which no further Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day;



          (iv) no Interest Period with respect to a Borrowing of
Revolving Loans shall extend beyond the A/RF Maturity Date;



          (v) no Interest Period with respect to any Term Loans under a
Facility may be elected that would extend beyond any date upon which a Scheduled
Repayment is required to be made in respect of such Term Loans if, after giving
effect to the selection of such Interest Period, the aggregate principal amount
of Term Loans maintained under the respective Facility as Eurodollar Loans with
Interest Periods ending after such date would exceed the aggregate principal
amount of Term Loans under such Facility permitted to be outstanding after such
Scheduled Repayment;



          (vi) no Interest Period may be elected at any time when a
Default under Section 9.01 or an Event of Default is then in existence if the
Administrative Agent or the Required Lenders shall have determined in its or
their sole discretion not to permit such election; and



          (vii) Interest Periods applicable to the Additional Term Loans
of one or two weeks ending no later than the 60th day following the Restatement
Effective Date (or if earlier and known at the time, the Syndication Date) may
be elected by the Borrower at any time prior to the Syndication Date.



          (b) If upon the expiration of any Interest Period, the
Borrower has failed to (or may not) elect a new Interest Period to be applicable
to the respective Borrowing of Eurodollar Loans as provided above, the Borrower
shall be deemed to have elected to convert such Borrowing into a Borrowing of
Base Rate Loans effective as of such expiration.



          1.10 Increased Costs, Illegality, etc, (a) In the event that
(x) in the case of clause (i) below, the Administrative Agent or (y) in the case
of clauses (ii) and (iii) below, any Lender shall have determined (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto):



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          (i) on any date for determining the Eurodollar Rate for any
Interest Period that, by reason of any changes arising after the date of this
Agreement affecting the interbank Eurodollar market, adequate and fair means do
not exist for ascertaining the applicable interest rate on the basis provided
for in the definition of Eurodollar Rate or the making or continuance of any
Eurodollar Loan has become impracticable as a result of a contingency occurring
after the Effective Date which materially and adversely affects the interbank
Eurodollar market;



          (ii) at any time, that such Lender shall incur increased costs
or reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loans (other than taxes covered by Section 4.04 and any increased
cost or reduction in the amount received or receivable resulting from the
imposition of or a change in the rate of taxes or similar charges) because of
(x) any change since the Effective Date in any applicable law, governmental
rule, regulation, guideline or order (or in the interpretation or administration
thereof and including the introduction of any new law or governmental rule,
regulation, guideline or order) (such as, for example, but not limited to, a
change in official reserve requirements, but, in all events, excluding reserves
required under Regulation D to the extent included in the computation of the
Eurodollar Rate) and/or (y) other circumstances first arising after the date
hereof affecting the interbank Eurodollar market or the position of such Lender
in such market; or



          (iii) at any time, that the making or continuance of any
Eurodollar Loan has become unlawful by compliance by such Lender in good faith
with any law, governmental rule, regulation, guideline or order (or would
conflict with any such governmental rule, regulation, guideline or order not
having the force of law but with which such Lender customarily complies even
though the failure to comply therewith would not be unlawful);



then, and in any such event, such Lender (or the Administrative Agent in the
case of clause (i) above) shall (x) on such date and (y) within ten Business
Days of the date on which such event no longer exists give notice (by telephone
confirmed in writing) to the Borrower and to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Lenders). Thereafter (x) in the case of clause (i) above,
Eurodollar Loans shall no longer be available until such time as the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice by the Administrative Agent no longer
exist, and any Notice of Borrowing or Notice of Conversion given by the Borrower
with respect to Eurodollar Loans which have not yet been incurred shall be
deemed rescinded by the Borrower, (y) in the case of clause (ii) above, the
Borrower shall pay to such Lender, within 10 Business Days after Borrower’s
receipt of written demand therefor, such additional amounts (in the form of an
increased rate of, or a different method of calculating, interest or otherwise
as such Lender in its reasonable discretion shall determine after consultation
with the Borrower) as shall be required to compensate such Lender for such
increased costs or reductions in amounts receivable hereunder (a written notice
as to the additional amounts owed to such Lender, describing the basis for such
increased costs and showing the calculation thereof, submitted to the Borrower
by such Lender shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) and (z) in the case of clause (iii) above, the Borrower
shall take one of the actions specified in Section 1.10(b) as promptly as
possible and, in any event, within the time period required by law.



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          (b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii), the Borrower may (and in the
case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii), the
Borrower shall within the time period required by law) either (x) if the
affected Eurodollar Loan is then being made pursuant to a Borrowing, cancel said
Borrowing by giving the Administrative Agent telephonic notice (confirmed
promptly in writing) thereof on the same date that the Borrower was notified by
a Lender pursuant to Section 1.10(a)(ii) or (iii), or (y) if the affected
Eurodollar Loan is then outstanding, upon at least three Business Days’ notice
to the Administrative Agent, require the affected Lender to convert each such
Eurodollar Loan into a Base Rate Loan (which conversion, in the case of the
circumstances described in Section 1.10(a)(iii), shall occur no later than the
last day of the Interest Period then applicable to such Eurodollar Loan (or such
earlier date as shall be required by applicable law)); provided that if more
than one Lender is affected at any time, then all affected Lenders must be
treated the same pursuant to this Section 1.10(b). Each Lender, upon determining
in good faith that any additional amounts will be payable pursuant to this
Section 1.10(b), will give prompt written notice thereof to the Borrower, which
notice shall set forth the basis of the calculation of such additional amounts,
although the failure to give any such notice shall not release or diminish the
Borrower’s obligations to pay additional amounts pursuant to this Section
1.10(b) upon the subsequent receipt of such notice.



          (c) If any Lender shall have determined that the adoption or
effectiveness of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, in each case
after the Effective Date, or compliance by such Lender or its parent corporation
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency first
made after the Effective Date, has or would have the effect of reducing the rate
of return on such Lender’s or its parent corporation’s capital or assets as a
consequence of its commitments or obligations hereunder to a level below that
which such Lender or its parent corporation could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration such
Lender’s or its parent corporation’s policies with respect to capital adequacy),
then from time to time, within 10 Business Days after demand by such Lender
(with a copy to the Administrative Agent), the Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender or its parent
corporation for such reduction. Each Lender, upon determining in good faith that
any additional amounts will be payable pursuant to this Section 1.10(c), will
give prompt written notice thereof to the Borrower, which notice shall describe
the basis for such claim and set forth in reasonable detail the calculation of
such additional amounts, although the failure to give any such notice shall not
release or diminish any of the Borrower’s obligations to pay additional amounts
pursuant to this Section 1.10(c) upon the subsequent receipt of such notice.



          1.11 Compensation. (a) The Borrower shall compensate each
Lender, upon its written request (which request shall set forth the basis for
requesting such compensation and reasonably detailed calculations thereof), for
all reasonable losses, expenses and liabilities (including, without limitation,
any loss, expense or liability incurred by reason of the liquidation or
reemployment of deposits or other funds required by such Lender to fund its
Eurodollar Loans but excluding in any event the loss of anticipated profits)
which such Lender may actually




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sustain: (i) if for any reason (other than a default by such Lender or the
Administrative Agent) a Borrowing of Eurodollar Loans does not occur on a date
specified therefor in a Notice of Borrowing or Notice of Conversion (whether or
not withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.10(a));
(ii) if any prepayment, repayment or conversion of any of its Eurodollar Loans
occurs on a date which is not the last day of an Interest Period applicable
thereto; (iii) if any prepayment of any of its Eurodollar Loans is not made on
any date specified in a notice of prepayment given by the Borrower; or (iv) as a
consequence of (x) any other default by the Borrower to repay its Eurodollar
Loans when required by the terms of this Agreement, (y) an election made
pursuant to Section 1.10(b) or (z) the early termination of an, or the funding
of a shortened, Interest Period (other than an Interest Period elected pursuant
to Section 1.09(a)(vii)) which may be required by any Lender in connection with
any assignment effected after the Initial Borrowing Date and prior to the
Syndication Date.


          (b) Notwithstanding anything in this Agreement to the
contrary, to the extent any notice or request required by Section 1.10, 1.11,
2.05 or 4.04 is given by any Lender more than 180 days after such Lender
obtained, or reasonably should have obtained, knowledge of the occurrence of the
event giving rise to the additional costs, reductions in amounts, losses, taxes
or other additional amounts of the type described in such Section, such Lender
shall not be entitled to compensation under Section 1.10, 1.11, 2.05 or 4.04 for
any amounts incurred or accruing prior to the giving of such notice to the
Borrower.



          1.12 Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 1.10(a)(ii)
or (iii), 1.10(c), 2.05 or 4.04 with respect to such Lender, it will, if
requested by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any Loans
or Letter of Credit participations affected by such event, provided that such
designation is made on such terms that such Lender and its lending office suffer
no material economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of any such
Section. Nothing in this Section 1.12 shall affect or postpone any of the
obligations of the Borrower or the right of any Lender provided in Section
1.10,2.05 or 4.04.



          1.13 Replacement of Lenders. (x) Upon the occurrence of any
event giving rise to the operation of Section 1.10(a)(ii) or (iii), Section
1.10(c), Section 1.11, Section 2.05 or Section 4.04 with respect to any Lender
which results in such Lender charging to the Borrower increased costs materially
in excess of those being charged generally by the Lenders, (y) if a Lender
becomes a Defaulting Lender and/or (z) in the case of a refusal by a Lender to
consent to a proposed change, waiver, discharge or termination with respect to
this Agreement which has been approved by the Required Lenders, the Borrower
shall have the right, if no Default under Section 9.01 or Event of Default then
exists, to replace such Lender (the “Replaced Lender”) with one or more other
Eligible Transferee or Transferees, none of whom shall constitute a Defaulting
Lender at the time of such replacement (collectively, the “Replacement Lender”)
reasonably acceptable to the Administrative Agent, provided that (i) at the time
of any replacement pursuant to this Section 1.13, the Replacement Lender shall
enter into one or more Assignment Agreements pursuant to Section 12.04(b) (and
with all fees payable pursuant to said Section 12.04(b) to be paid by the
Replacement Lender) pursuant to which the Replacement Lender shall acquire all
of the Commitments and outstanding Loans of, and in each case participations in
Letters of Credit by, the Replaced Lender and, in connection therewith, shall



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pay to (x) the Replaced Lender an amount equal to the sum of (A) an amount equal
to the principal of, and all accrued and unpaid interest on, all outstanding
Loans of the Replaced Lender, (B) an amount equal to all Unpaid Drawings that
have been funded by (and not reimbursed to) such Replaced Lender, together with
all accrued and unpaid interest with respect thereto at such time and (C) an
amount equal to all accrued and unpaid Fees owing to the Replaced Lender
pursuant to Section 3.01, (y) each Letter of Credit Issuer an amount equal to
such Replaced Lender’s Adjusted RF Percentage (for this purpose, and for the
purposes of clause (z) below, determined as if the adjustment described in
clause (y) of the immediately succeeding sentence had been made with respect to
such Replaced Lender) of any Unpaid Drawing (which at such time remains an
Unpaid Drawing) to the extent such amount was not theretofore funded by such
Replaced Lender and (z) the Swingline Lender, any portion of a Mandatory
Borrowing as to which the Replaced Lender is then in default, and (ii) all
obligations of the Borrower owing to the Replaced Lender (other than those
specifically described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being, paid) shall be paid in full
to such Replaced Lender by the Borrower concurrently with such replacement. Upon
the execution of the respective Assignment Agreements, the payment of amounts
referred to in clauses (i) and (ii) above and, if so requested by the
Replacement Lender, delivery to the Replacement Lender of the appropriate Note
or Notes executed by the Borrower, (x) the Replacement Lender shall become a
Lender hereunder and the Replaced Lender shall cease to constitute a Lender
hereunder, except with respect to indemnification provisions applicable to the
Replaced Lender under this Agreement, which shall survive as to such Replaced
Lender and (y) in the case of a replacement of a Defaulting Lender with a
Non-Defaulting Lender, the Adjusted RF Percentages of the respective Lenders and
the Adjusted Total Revolving Commitment shall be automatically adjusted at such
time to give effect to such replacement.


          SECTION 2. Letters of Credit.



          2.01 Letters of Credit. (a) Each Letter of Credit (including
Existing Letters of Credit) issued pursuant to Section 2.01 (a) of the Original
Credit Agreement and outstanding on the Restatement Effective Date (to the
extent listed on Annex X, Part I, each an “OCA Letter of Credit”) shall continue
to remain outstanding as a Letter of Credit hereunder on and after such Date on
the same terms as applicable to it immediately prior to such Date. [Each
Existing USMR Letter of Credit outstanding on the Restatement Effective Date
shall continue to remain outstanding as a Letter of Credit hereunder on and
after such Date on the same terms as applicable to it immediately prior to such
Date.] Subject to and upon the terms and conditions herein set forth, the
Borrower may request that the Letter of Credit Issuer at any time and from time
to time on or after the Restatement Effective Date and prior to the fifth
Business Day prior to the A/RF Maturity Date to issue, for the account of the
Borrower and in support of (x) trade obligations of the Borrower and its
Subsidiaries incurred in the ordinary course of business (letters of credit
issued for such purposes, “Trade Letters of Credit”) and (y) any other lawful
purposes of the Borrower and its Subsidiaries (letters of credit issued for such
purposes, “Standby Letters of Credit”), and subject to and upon the terms and
conditions herein set forth, the Letter of Credit Issuer agrees to issue from
time to time, irrevocable letters of credit denominated in Dollars and issued on
a sight basis only, in such form as may be approved by the Letter of Credit
Issuer and the Administrative Agent. “Letters of Credit” shall include Trade
Letters of Credit and Standby Letters of Credit, in each case issued pursuant to
this Section 2, the OCA Letters of Credit, including any Existing Letters of
Credit included therein (each of which




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Existing Letters of Credit shall be deemed issued as Letters of Credit for all
purposes of this Agreement on the Initial Borrowing Date) [and all Existing USMR
Letters of Credit (each of which Existing USMR Letter of Credit shall be deemed
issued as Letters of Credit for all purposes of this Agreement on the
Restatement Effective Date].


          (b) Notwithstanding the foregoing, (i) no Letter of Credit
shall be issued if after giving effect thereto the sum of the Letter of Credit
Outstandings plus the aggregate principal amount of all Revolving Loans made by
Non-Defaulting Lenders then outstanding and Swingline Loans then outstanding
would exceed the Adjusted Total Revolving Commitment at such time; (ii) each
Standby Letter of Credit shall have an expiry date occurring not later than
three years after such Letter of Credit’s date of issuance although (x) Standby
Letters of Credit issued to replace and/or support letters of credit existing on
the Initial Borrowing Date shall have an expiry date equal to the then expiry
date of the letter of credit being replaced or supported, (y) any Standby Letter
of Credit may be extendible for successive periods of up to 12 months, but not
beyond the third Business Day next preceding the A/RF Maturity Date, on terms
acceptable to the Letter of Credit Issuer and in no event shall any Standby
Letter of Credit have an expiry date occurring later than the third Business Day
next preceding the A/RF Maturity Date and (z) Letters of Credit in an aggregate
Stated Amount of up to $100,000,000 may be issued with an initial expiry date
occurring more than three years after the respective dates of issuance thereof
provided that in each case such expiry date shall not be later than the date
three months prior to A/RF Maturity Date; and (iii) each Trade Letter of Credit
shall have an expiry date occurring not later than (x) 180 days after such Trade
Letter of Credit’s date of issuance or (y) the date three Business Days prior to
the A/RF Maturity Date.



          2.02 Letter of Credit Requests; Notices of Issuance. (a)
Whenever it desires that an Letter of Credit be issued, the Borrower shall give
the Administrative Agent and the Letter of Credit Issuer written notice
(including by way of facsimile transmission) in the form of Exhibit B thereof
prior to 1:00 P.M. (New York time) at least three Business Days (or such shorter
period as may be acceptable to the Letter of Credit Issuer) prior to the
proposed date of issuance (which shall be a Business Day) (each, a “Letter of
Credit Request”), which Letter of Credit Request shall include any other
documents that the Letter of Credit Issuer customarily requires in connection
therewith.



          (b) The Letter of Credit Issuer shall, promptly after the
issuance of or amendment to a Standby Letter of Credit by it pursuant to this
Section 2, give the Administrative Agent and the Borrower, written notice of
such issuance or amendment and such notice shall be accompanied by a copy of
such issuance or amendment. Upon receipt of such notice, the Administrative
Agent shall promptly give each RF Lender a written notice of such issuance or
amendment. If any RF Lender should so request, the Administrative Agent shall
provide copies of such issuance or amendment to such RF Lender. With regards to
Trade Letters of Credit, the Letter of Credit Issuer shall on the first Business
Day of each week provide the Administrative Agent, by facsimile, with a report
of the daily aggregate outstanding Trade Letters of Credit issued by the Letter
of Credit Issuer for the previous calendar week.



          2.03 Agreement to Repay Letter of Credit Drawings, (a) The
Borrower hereby agrees to reimburse the Letter of Credit Issuer, by making
payment to the Administrative Agent at the Payment Office, for any payment or
disbursement made by the Letter of Credit Issuer



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under any Letter of Credit (each such amount so paid or disbursed until
reimbursed, an “Unpaid Drawing”) promptly after, and in any event within three
Business Days after the date on which, the Borrower is notified by the Letter of
Credit Issuer of such payment or disbursement with interest on the amount so
paid or disbursed by the Letter of Credit Issuer, to the extent not reimbursed
prior to 1:00 P.M. (New York time) on the date of such payment or disbursement,
from and including the date paid or disbursed to but not including the date the
Letter of Credit Issuer is reimbursed therefor at a rate per annum which shall
be the Base Rate plus the Applicable Base Rate Margin as in effect from time to
time (plus an additional 2% per annum if not reimbursed by the third Business
Day after the date of such notice of payment or disbursement), such interest
also to be payable on demand.


          (b) The Borrower’s obligation under this Section 2.03 to
reimburse the Letter of Credit Issuer with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower may have or have had against the Letter of
Credit Issuer, the Administrative Agent or any Lender, including, without
limitation, any defense based upon the failure of any drawing under a Letter of
Credit to conform substantially to the terms of the Letter of Credit or any
non-application or misapplication by the beneficiary of the proceeds of such
drawing provided that the Borrower shall not be obligated to reimburse the
Letter of Credit Issuer for any wrongful payment made by the Letter of Credit
Issuer under a Letter of Credit as a result of acts or omissions constituting
willful misconduct or gross negligence on the part of the Letter of Credit
Issuer as determined by a court of competent jurisdiction.



          2.04 Letter of Credit Participations. (a) Immediately upon the
issuance by the Letter of Credit Issuer of any Letter of Credit, the Letter of
Credit Issuer shall be deemed to have sold and transferred to each other RF
Lender, and each such RE Lender (each, a “Participant”) shall be deemed
irrevocably and unconditionally to have purchased and received from such Letter
of Credit Issuer, without recourse or warranty, an undivided interest and
participation, to the extent of such Participant’s Adjusted RF Percentage, in
such Letter of Credit, each substitute letter of credit, each drawing made
thereunder and the obligations of the Borrower under this Agreement with respect
thereto (although the Letter of Credit Fee shall be payable directly to the
Administrative Agent for the account of the RF Lenders as provided in Section
3.01(b) and the Participants shall have no right to receive any portion of any
Facing Fees) and any security therefor or guaranty pertaining thereto. Upon any
change in the Adjusted RF Percentages pursuant to Section 1.13 and/or 12.04(b)
and/or as a result of a Lender Default, it is hereby agreed that, with respect
to all outstanding Letters of Credit and Unpaid Drawings, there shall be an
automatic adjustment to the participations pursuant to this Section 2.04 to
reflect the new Adjusted RF Percentages of all of the Lenders with RF
Commitments as a result thereof.



          (b) In determining whether to pay under any Letter of Credit,
the Letter of Credit Issuer shall not have any obligation relative to the
Participants other than to determine that any documents required to be delivered
under such Letter of Credit have been delivered and that they substantially
comply on their face with the requirements of such Letter of Credit. Any action
taken or omitted to be taken by the Letter of Credit Issuer under or in
connection with any Letter of Credit if taken or omitted in the absence of gross
negligence or willful misconduct as



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determined by a court of competent jurisdiction, shall not create for the Letter
of Credit Issuer any resulting liability.


          (c) In the event that the Letter of
Credit Issuer makes any payment under any Letter of Credit and the Borrower
shall not have reimbursed such amount in full to the Letter of Credit Issuer
pursuant to Section 2.03 (a), the Letter of Credit Issuer shall promptly notify
the Administrative Agent, and the Administrative Agent shall promptly notify
each Participant of such failure, and each Participant shall promptly and
unconditionally pay to the Administrative Agent for the account of the Letter of
Credit Issuer, the amount of such Participant’s Adjusted RF Percentage of such
payment in Dollars and in same day funds provided that no Participant shall be
obligated to pay to the Administrative Agent its Adjusted RF Percentage of such
unreimbursed amount for any wrongful payment made by the Letter of Credit Issuer
under a Letter of Credit as a result of acts or omissions constituting willful
misconduct or gross negligence as determined by a court of competent
jurisdiction on the part of the Letter of Credit Issuer. If the Administrative
Agent so notifies any Participant prior to 11:00 A.M. (New York time) on any
Business Day, such Participant shall make available to the Administrative Agent,
such Participant’s Adjusted RF Percentage of the amount of such payment on such
Business Day in same day funds. If and to the extent such Participant shall not
have so made its Adjusted RF Percentage of the amount of such Unpaid Drawing
available to the Administrative Agent, such Participant agrees to pay to the
Administrative Agent for the account of the Letter of Credit Issuer, forthwith
on demand such amount, together with interest thereon, for each day from such
date until the date such amount is so paid to the Administrative Agent at the
overnight Federal Funds Effective Rate. The failure of any Participant to so pay
to the Administrative Agent its Adjusted RF Percentage of any Unpaid Drawing
shall not relieve any other Participant of its obligation hereunder to so pay to
the Administrative Agent its Adjusted RF Percentage of any Unpaid Drawing on the
date required, as specified above, but no Participant shall be responsible for
the failure of any other Participant to so pay to the Administrative Agent such
other Participant’s Adjusted RF Percentage of any such payment.



          (d) Whenever the Letter of Credit Issuer receives a payment of
a reimbursement obligation as to which the Administrative Agent has received for
the account of the Letter of Credit Issuer any payments from the Participants
pursuant to clause (c) above, the Letter of Credit Issuer shall pay to the
Administrative Agent and the Administrative Agent shall promptly pay to each
Participant which has paid its Adjusted RF Percentage thereof, in Dollars and in
same day funds, an amount equal to such Participant’s Adjusted RF Percentage of
the principal amount thereof and interest thereon accruing after the purchase of
the respective participations.



          (e) The obligations of the Participants to make
payments to the Administrative Agent for the account of the Letter of Credit
Issuer with respect to Letters of Credit shall be irrevocable and not subject
to counterclaim, set-off or other defense or any other qualification or
exception whatsoever (provided that no Participant shall be required to make
payments resulting from the Administrative Agent’s gross negligence or willful
misconduct as determined by a court of competent jurisdiction) and shall be made
in accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following circumstances:



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          (i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;



          (ii) the existence of any claim, set-off, defense or other
right which any Credit Party or any of their Subsidiaries may have at any time
against a beneficiary named in a Letter of Credit, any transferee of any Letter
of Credit (or any Person for whom any such transferee may be acting), any Agent,
the Letter of Credit Issuer, any Lender or other Person, whether in connection
with this Agreement, any Letter of Credit, the transactions contemplated herein
or any unrelated transactions (including any underlying transaction between the
Borrower and the beneficiary named in any such Letter of Credit);



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



          (iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit Documents; or



          (v) the occurrence of any Default or Event of Default.



          (f) To the extent the Letter of Credit Issuer is not
indemnified by the Borrower, the Participants will reimburse and indemnify the
Letter of Credit Issuer, in proportion to their respective RF Percentages, for
and against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, costs, expenses or disbursements of whatsoever kind
or nature which may be imposed on, asserted against or incurred by the Letter of
Credit Issuer in performing its respective duties in any way relating to or
arising out of its issuance of Letters of Credit; provided that no Participants
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Letter of Credit Issuer’s gross negligence or willful
misconduct as determined by a court of competent jurisdiction.



          2.05 Increased Costs. If at any time after the Effective Date,
the adoption or initial effectiveness of any applicable law, rule or regulation,
or any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by the Letter
of Credit Issuer or any Participant with any request or directive (whether or
not having the force of law) first made by any such authority, central bank or
comparable agency, in each case after the Effective Date, shall either (i)
impose, modify or make applicable any reserve, deposit, capital adequacy or
similar requirement against Letters of Credit issued by the Letter of Credit
Issuer or such Participant’s participation therein, or (ii) shall impose on the
Letter of Credit Issuer or any Participant any other conditions affecting this
Agreement, any Letter of Credit or such Participant’s participation therein; and
the result of any of the foregoing is to increase the cost to the Letter of
Credit Issuer or such Participant of issuing, maintaining or participating in
any Letter of Credit, or to reduce the amount of any sum received or receivable
by the Letter of Credit Issuer or such Participant hereunder (other than any
increased cost or reduction in the amount received or receivable resulting from
the imposition of or a change in the rate of taxes or similar charges), then,
within 10 Business Days of Borrower’s receipt of a written




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demand to the Borrower by the Letter of Credit Issuer or such Participant (a
copy of which notice shall be sent by the Letter of Credit Issuer or such
Participant to the Administrative Agent), the Borrower shall pay to the Letter
of Credit Issuer or such Participant such additional amount or amounts as will
compensate the Letter of Credit Issuer or such Participant for such increased
cost or reduction. A certificate submitted to the Borrower by the Letter of
Credit Issuer or such Participant, as the case may be (a copy of which
certificate shall be sent by the Letter of Credit Issuer or such Participant to
the Administrative Agent), setting forth the basis for, and reasonably detailed
calculations of, the determination of such additional amount or amounts
necessary to compensate the Letter of Credit Issuer or such Participant as
aforesaid shall be conclusive and binding on the Borrower absent manifest error,
although the failure to deliver any such certificate shall not release or
diminish any of the Borrower’s obligations to pay additional amounts pursuant to
this Section 2.05 upon the subsequent receipt thereof.


          SECTIONS.
Fees; Commitments.



          3.01 Fees. (a) The Borrower agrees to pay to the
Administrative Agent a commitment commission (“Commitment Commission”) for the
account of each RF Lender that is a Non-Defaulting Lender for the period from
and including the Initial Borrowing Date to but not including the date upon
which the Total Revolving Commitment has been terminated, computed for each day
at the rate per annum equal to the Applicable Percentage for such day on the
Unutilized Revolving Commitment on such day of such Lender. Such Commitment
Commission shall be due and payable in arrears on the last Business Day of each
January, April, July and October and on the date upon which the Total Revolving
Commitment is terminated.



          (b) The Borrower agrees to pay to the Administrative Agent,
for the account of each RF Lender that is a Non-Defaulting Lender, pro rata on
the basis of their respective Adjusted RF Percentages, a fee in respect of all
Letters of Credit (the “Letter of Credit Fee”) computed for each day at a per
annum rate equal to 50% of the Applicable Eurodollar Margin for Revolving Loans
on such day multiplied by the Stated Amount of all Letters of Credit outstanding
on such day. Accrued Letter of Credit Fees shall be due and payable quarterly in
arrears on the last Business Day of each January, April, July and October of
each year and on the date upon which the Total Revolving Commitment is
terminated.



          (c) The Borrower agrees to pay to the Letter of Credit Issuer
a fee in respect of each Letter of Credit issued by it (the “Facing Fee”)
computed for each day at the rate of 1/4 of 1% per annum on the Stated Amount of
all Letters of Credit outstanding on such day, provided that in no event shall
the annual Facing Fee with respect to any Letter of Credit be less than $500.
Accrued Facing Fees shall be due and payable quarterly in arrears on the last
Business Day of each January, April, July and October of each year and on the
date upon which the Total Revolving Commitment is terminated.



          (d) The Borrower agrees to pay directly to the Letter of
Credit Issuer upon each issuance of, payment under, and/or amendment of, a
Letter of Credit such amount as shall at the time of such issuance, payment or
amendment be the administrative charge which the Letter of Credit Issuer is
customarily charging for issuances of, payments under or amendments of, letters
of credit issued by it.



-16-






 



          (e) The Borrower shall pay to (x) each Agent on the
Restatement Effective Date, for its own account and/or for distribution to the
Lenders, such fees as heretofore agreed by the Borrower and the Agents and (y)
the Administrative Agent, for its own account, such other fees as agreed to
between the Borrower and the Administrative Agent, when and as due.


          (f) All
computations of Fees shall be made in accordance with Section 12.07(b).



          3.02 Reduction of Revolving Commitments. (a) Upon at least one
Business Day’s prior written notice (or telephonic notice confirmed in writing)
to the Administrative Agent at its Notice Office (which notice shall be deemed
to be given on a certain day only if given before 2:00 P.M. (New York time) on
such day and shall be promptly transmitted by the Administrative Agent to each
of the Lenders), the Borrower shall have the right, without premium or penalty,
to terminate or partially reduce the Total Unutilized Revolving Commitment
provided that (x) any such partial reduction shall apply to proportionately and
permanently reduce the Revolving Commitment of each Lender, (y) no such
reduction shall reduce any Non-Defaulting Lender’s Revolving Commitment in an
amount greater than the then Unutilized Revolving Commitment of such Lender and
(z) any partial reduction pursuant to this Section 3.02 shall be in the amount
of at least $1,000,000.



          (b) The Total Revolving Commitment shall terminate in its
entirety on the A/RF Maturity Date.



          SECTION 4. Payments.



          4.01 Voluntary Prepayments. The Borrower shall have the right
to prepay Loans in whole or in part, without premium or penalty, from time to
time on the following terms and conditions: (i) the Borrower shall give the
Administrative Agent at the Payment Office written notice (or telephonic notice
promptly confirmed in writing) of its intent to prepay the Loans, whether such
Loans are A Term Loans, B Term Loans, Revolving Loans or Swingline Loans, the
amount of such prepayment and (in the case of Eurodollar Loans) the specific
Borrowing(s) pursuant to which made, which notice shall be given by the Borrower
prior to 3:00 P.M. (New York time) on the Business Day prior to the date of such
prepayment (or in the case of Swingline Loans on the day of prepayment), and
which notice shall promptly be transmitted by the Administrative Agent to each
of the Lenders; (ii) (x) each partial prepayment of any Loans (other than of
Swingline Loans) shall be in an aggregate principal amount of at least
$1,000,000 and (y) each partial prepayment of Swingline Loans shall be in an
aggregate principal amount of at least $250,000, provided that no partial
prepayment of Eurodollar Loans made pursuant to a Borrowing shall reduce the
aggregate principal amount of the Loans outstanding pursuant to such Borrowing
to an amount less than the Minimum Borrowing Amount applicable thereto; (iii)
each prepayment in respect of A Term Loans or B Term Loans shall be applied pro
rata among all the then outstanding A Term Loans or B Term Loans, as the case
may be, and each prepayment in respect of any Loans made pursuant to a Borrowing
shall be applied pro rata among such Loans provided that at the Borrower’s
election in connection with any prepayment of Revolving Loans pursuant to this
Section 4.01, such prepayment shall not be applied to any Revolving Loans of a
Defaulting Lender; and (iv) each prepayment of Term Loans pursuant to this
Section 4.01 shall be applied between the A Term Loans on the one hand and B
Term Loans on the other as the Borrower may elect, with any such prepayments to
be allocated (I) first, in




-17-






 



direct order of maturity to those Scheduled Repayments applicable to the Term
Loans being repaid which will be due and payable within 12 months after the date
of the respective payment and (II) second, to the extent in excess thereof, on a
pro rata basis (based upon the then remaining principal amount thereof) to all
remaining Scheduled Repayments applicable to the Term Loans being repaid.


          4.02 Mandatory Prepayments.



          (A) Requirements:



          (a) (i) If on any date (and after giving effect to all other
repayments on such date) the sum of the aggregate outstanding principal amount
of Revolving Loans made by Non-Defaulting Lenders, the principal amount of
Swingline Loans and the Letter of Credit Outstandings exceeds the Adjusted Total
Revolving Commitment as then in effect, the Borrower shall repay on such date
the principal of outstanding Swingline Loans and, after all Swingline Loans have
been repaid in full, Revolving Loans of Non-Defaulting Lenders in an aggregate
amount equal to such excess. If after giving effect to the repayment of all
outstanding Swingline Loans and Revolving Loans of Non-Defaulting Lenders, the
Letter of Credit Outstandings exceeds the Adjusted Total Revolving Commitment
then in effect, the Borrower shall pay to the Administrative Agent an amount in
cash and/or Cash Equivalents equal to such excess and the Administrative Agent
shall hold such payment as security for the obligations of the Borrower in
respect of Letters of Credit pursuant to a cash collateral agreement to be
entered into in form and substance reasonably satisfactory to the Administrative
Agent (which shall permit certain investments in Cash Equivalents reasonably
satisfactory to the Administrative Agent, until all proceeds are applied to the
secured obligations or until all Letters of Credit so secured expire undrawn or
are otherwise terminated or all drawings thereunder are paid, at which time such
amount shall be returned to the Borrower).



          (ii) If on any date the aggregate outstanding principal amount
of the Revolving Loans made by a Defaulting Lender exceeds the Revolving
Commitment of such Defaulting Lender, the Borrower shall repay principal of
Revolving Loans of such Defaulting Lender in an amount equal to such excess.



          (b) (i) On each date set forth below, the Borrower shall repay
the principal amount of A Term Loans set forth opposite such date (each such
repayment, together with each repayment of B Term Loans required by clause
(b)(ii) below, as the same may be reduced as provided in Sections 4.01 and
4.02(B), a “Scheduled Repayment”):




	 	 	 	 	 
	Date	 	Amount
	
	 	

	March 31, 2003
	 	$	6,471,740.60	 
	June 30, 2003
	 	$	6,471,740.60	 
	September 30, 2003
	 	$	6,471,740.60	 
	December 31, 2003
	 	$	6,471,740.60	 
	March 31, 2004
	 	$	6,471,740.60	 
	June 30, 2004
	 	$	6,471,740.60	 



-18-






 




	 	 	 	 	 
	September 30, 2004
	 	$	6,471,740.60	 
	December 31, 2004
	 	$	6,471,740.60	 
	March 31, 2005
	 	$	6,471,740.60	 
	June 30, 2005
	 	$	6,471,740.60	 
	September 30, 2005
	 	$	6,471,740.60	 
	December 31, 2005
	 	$	6,471,740.60	 
	March 31, 2006
	 	$	6,471,740.60	 
	June 30, 2006
	 	$	6,471,740.60	 
	September 30, 2006
	 	$	6,471,740.60	 
	December 31, 2006
	 	$	6,471,740.60	 
	March 31, 2007
	 	$	6,471,740.60	 
	A/RF Maturity Date
	 	$	6,471,740.60	 



          (ii) On each date set forth below, the Borrower shall repay
the principal amount of B Term Loans set forth opposite such date:




	 	 	 	 	 
	Date	 	Amount
	
	 	

	March 31, 2003
	 	$	7,851,062.00	 
	June 30, 2003
	 	$	7,851,062.00	 
	September 30, 2003
	 	$	7,851,062.00	 
	December 31, 2003
	 	$	7,851,062.00	 
	March 31, 2004
	 	$	7,851,062.00	 
	June 30, 2004
	 	$	7,851,062.00	 
	September 30, 2004
	 	$	7,851,062.00	 
	December 31, 2004
	 	$	7,851,062.00	 
	March 31, 2005
	 	$	7,851,062.00	 
	June 30, 2005
	 	$	7,851,062.00	 
	September 30, 2005
	 	$	7,851,062.00	 
	December 31, 2005
	 	$	7,851,062.00	 
	March 31, 2006
	 	$	7,851,062.00	 
	June 30, 2006
	 	$	7,851,062.00	 
	September 30, 2006
	 	$	7,851,062.00	 
	December 31, 2006
	 	$	7,851,062.00	 
	March 31, 2007
	 	$	7,851,062.00	 
	June 30, 2007
	 	$	7,851,062.00	 
	September 30, 2007
	 	$	58,097,858.80	 
	December 31, 2007
	 	$	58,097,858.80	 
	March 31, 2008
	 	$	58,097,858.80	 




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	June 30, 2008
	 	$	58,097,858.80	 
	September 30, 2008
	 	$	58,097,858.80	 
	December 31, 2008
	 	$	58,097,858.80	 
	March 31, 2009
	 	$	58,097,858.80	 
	B Maturity Date
	 	$	58,097,858.75	 



          (c) On the third Business Day following the date of receipt
thereof by the Borrower and/or any of its Subsidiaries of the Net Cash Proceeds
from any Asset Sale, an amount equal to 100% of the Net Cash Proceeds from such
Asset Sale shall be applied as a mandatory repayment of principal of the then
outstanding Term Loans, provided that up to an aggregate of $20,000,000 per year
(but no more than $50,000,000 in the aggregate for all Asset Sales after the
Initial Borrowing Date) of the Net Cash Proceeds from Asset Sales shall not be
required to be used to so repay Term Loans to the extent the Borrower elects,
as hereinafter provided, to cause such Net Cash Proceeds to be reinvested in
Reinvestment Assets (a “Reinvestment Election”). The Borrower may exercise its
Reinvestment Election (within the parameters specified in the preceding
sentence) with respect to an Asset Sale if (x) no Default or Event of Default
exists and (y) the Borrower delivers a Reinvestment Notice to the Administrative
Agent no later than three Business Days following the date of the consummation
of the respective Asset Sale, with such Reinvestment Election being effective
with respect to the Net Cash Proceeds of such Asset Sale equal to the
Anticipated Reinvestment Amount specified in such Reinvestment Notice.



          (d) On the date of the receipt thereof by the Borrower and/or
any of its Subsidiaries, an amount equal to 100% of the proceeds (net of
underwriting discounts and commissions and other reasonable costs associated
therewith) of the incurrence of Indebtedness by the Borrower or any of its
Subsidiaries (other than Indebtedness permitted by Section 8.04), shall be
applied as a mandatory repayment of principal of the then outstanding Term
Loans.



          (e) On the date of the receipt thereof by the Borrower, an amount equal
to the EP Percentage of the proceeds (net of underwriting discounts and
commissions and other reasonable costs associated therewith) of any sale or
issuance of its equity or any equity contribution (other than equity issued to
management and other employees of the Borrower and its Subsidiaries) shall be
applied as a mandatory repayment of principal of the then outstanding Term
Loans.



          (f) On each date which is 120 days after the last day of each fiscal year
of the Borrower (commencing with the fiscal year ending on December 31, 2002),
an amount equal to 75% (or, if the Leverage Ratio on the last day of such fiscal
year is less than 3.0:1.0, 50%) of Excess Cash Flow for the fiscal year then
last ended (if positive) shall be applied as a mandatory repayment of principal
of the then outstanding Term Loans.



          (g) On the Reinvestment Prepayment Date with respect to a
Reinvestment Election, an amount equal to the Reinvestment Prepayment Amount, if
any, for such Reinvestment Election shall be applied as a repayment of the
principal amount of the then outstanding Term Loans.



-20-






 



          (h) To the extent not theretofore repaid pursuant to the
provisions of this Agreement, (i) all then outstanding Swingline Loans shall be
repaid in full on the Swingline Expiry Date and (ii) all outstanding Swingline
Loans and Revolving Loans shall be repaid in full upon the termination of the
Total Revolving Commitment.



          (B) Application:



          (a) Each mandatory repayment of Term Loans required to be made
pursuant to Sections 4.02(A)(c) through (g) shall be applied to the outstanding
A Term Loans, if any, pro rata among same in an amount equal to the A TF
Percentage of such prepayment and to the outstanding B Term Loans, if any, pro
rata among same in an amount equal to the B TF Percentage of such prepayment,
with any such prepayments to be allocated to reduce the then remaining Scheduled
Repayments applicable to the Term Loans being repaid (I) first, in direct order
of maturity to those Scheduled Repayments which will be due and payable within
12 months after the date of the respective payment and (II) second, to the
extent in excess thereof, on a pro rata basis (based upon the then remaining
principal amount of each such Scheduled Repayment).



          (b) With respect to each prepayment of Loans required by
Section 4.02, the Borrower may designate the Types of Loans which are to be
prepaid and the specific Borrowing(s) under the affected Facility pursuant to
which made provided that (i) if any prepayment of Eurodollar Loans made pursuant
to a single Borrowing shall reduce the outstanding Loans made pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount for such
Borrowing, such Borrowing shall be immediately converted into Base Rate Loans;
(ii) each prepayment of any Loans under a Facility shall be applied pro rata
among such Loans; and (iii) except for the differing treatments of Defaulting
Lenders and Non-Defaulting Lenders as expressly provided in Section 4.02(A)(a),
each prepayment of any Eurodollar Loans made pursuant to a Borrowing shall be
applied pro rata among such Eurodollar Loans. In the absence of a designation by
the Borrower as described in the preceding sentence, the Administrative Agent
shall, subject to the above, make such designation in its sole discretion with a
view, but no obligation, to minimize breakage costs owing under Section 1.11.



          (c) Notwithstanding anything to the contrary contained in
Section 4.02(B)(a), with respect to any mandatory repayments of B Term Loans
otherwise required pursuant to Section 4.02(A), if on or prior to the date the
respective mandatory repayment is otherwise required to be made pursuant to such
Section, the Borrower has given the Administrative Agent written notification
that the Borrower has elected, in its sole discretion, to give each Lender with
a B Term Loan the right to waive such Lender’s rights to receive its pro rata
percentage of such repayment (any such repayment, a “Specified Repayment”), the
Administrative Agent shall notify such Lenders thereof and the amount required
to be applied to each such Lender’s B Term Loans pursuant to the Specified
Repayment. In the event any such Lender desires to waive its right to receive
any or all of its percentage of the Specified Repayment, such Lender shall so
advise in writing the Administrative Agent no later than 5:00 P.M. (New York
time) two Business Days after the date of such notice from the Administrative
Agent, which reply shall also include the amount, if any, of its portion of the
Specified Repayment that such Lender still desires to receive. If any such
Lender does not reply to the Administrative Agent within the two Business Day
period or responds but does not specify the amount of the Specified Repayment



-21-






 



that such Lender wishes to receive, if any, such Lender will be deemed to have
elected to receive 100% of the Specified Repayment. In the event that any such
Lender waives its right to any such Specified Repayment, the Administrative
Agent shall apply 100% of the amount so waived by such Lenders to repay the A
Term Loans as otherwise provided in this Section 4.02(B). All payments of the B
Term Loans shall be made pro rata among same reduced for any Lender who has
waived any of its portion of a Specified Repayment by the amount so waived.


          4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement shall be made to
the Administrative Agent for the ratable account of the Lenders entitled
thereto, not later than 1:00 P.M. (New York time) on the date when due and shall
be made in immediately available funds and in Dollars at the Payment Office, it
being understood that written notice by the Borrower to the Administrative Agent
to make a payment from the funds in the Borrower’s account at the Payment Office
shall constitute the making of such payment to the extent of such funds held in
such account. Any payments under this Agreement which are made later than 1:00
P.M. (New York time) shall be deemed to have been made on the next succeeding
Business Day. Whenever any payment to be made here- under shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.



          4.04
Net Payments. (a) All payments made by any Credit Party
hereunder or under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 4.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding, except as provided in the second succeeding sentence, any tax
imposed on or measured by the net income or net profits of a Lender pursuant to
the laws of the jurisdiction in which it is organized or the jurisdiction in
which the principal office or applicable lending office of such Lender is
located or any subdivision thereof or therein) and all interest, penalties or
similar liabilities with respect to such non-excluded taxes, levies, imposts,
duties, fees, assessments or other charges (all such non-excluded taxes, levies,
imposts, duties, fees, assessments or other charges being referred to
collectively as “Taxes”). If any Taxes are so levied or imposed, the Borrower
agrees to pay the full amount of such Taxes, and such additional amounts as may
be necessary so that every payment of all amounts due under this Agreement or
under any Note, after withholding or deduction for or on account of any Taxes,
will not be less than the amount provided for herein or in such Note. If any
amounts are payable in respect of Taxes pursuant to the preceding sentence, the
Borrower agrees to reimburse each Lender, upon the written request of such
Lender, for taxes imposed on or measured by the net income or net profits of
such Lender pursuant to the laws of the jurisdiction in which such Lender is
organized or in which the principal office or applicable lending office of such
Lender is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which such Lender is organized or in which
the principal office or applicable lending office of such Lender is located and
for any withholding of taxes as such Lender shall determine are payable by, or
withheld from, such Lender, in respect of such amounts so paid to or on behalf
of such Lender pursuant to the preceding sentence and in respect of any amounts
paid to or on behalf of such Lender



-22-






 



pursuant to this sentence. The Borrower will furnish to the Administrative Agent
within 45 days after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts evidencing such payment by the
Borrower. The Borrower agrees to indemnify and hold harmless each Lender, and
reimburse such Lender upon its written request, for the amount of any Taxes so
levied or imposed and paid by such Lender.


          (b) Each Lender that is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes agrees to deliver to the Borrower and the Administrative Agent on or
prior to the Effective Date, or in the case of a Lender that is an assignee or
transferee of an interest under this Agreement pursuant to Section 1.13 or 12.04
(unless the respective Lender was already a Lender hereunder immediately prior
to such assignment or transfer), on the date of such assignment or transfer to
such Lender, (i) two accurate and complete original signed copies of Internal
Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption
under an income tax treaty) (or successor forms) certifying to such Lender’s
entitlement to a complete exemption from United States withholding tax with
respect to payments to be made under this Agreement and under any Note, or (ii)
if the Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the
Code and cannot deliver either Internal Revenue Service Form W-8ECI or Form
W-8BEN (with respect to a complete exemption under an income tax treaty)
pursuant to clause (i) above, (x) a certificate substantially in the form of
Exhibit C (or Exhibit C-l if on or after the Restatement Effective Date) (any
such certificate, a “Section 4.04 Certificate”) and (y)two accurate and complete
original signed copies of Internal Revenue Service Form W-8BEN (with respect to
the portfolio interest exception) (or successor form) certifying to such
Lender’s entitlement to a complete exemption from United States withholding tax
with respect to payments of interest to be made under this Agreement and under
any Note. In addition, each Lender agrees that from time to time after the
Effective Date, when a lapse in time or change in circumstances renders the
previous certification obsolete or inaccurate in any material respect, it will
deliver to the Borrower and the Administrative Agent two new accurate and
complete original signed copies of Internal Revenue Service Form W-8ECI, W-8BEN
(with respect to a complete exemption under an income tax treaty) or Form W-8BEN
(with respect to the portfolio interest exemption) and a Section 4.04
Certificate, as the case may be, and such other forms as may be required in
order to confirm or establish the entitlement of such Lender to a continued
exemption from or reduction in United States withholding tax with respect to
payments under this Agreement and any Note, or it shall immediately notify the
Borrower and the Administrative Agent of its inability to deliver any such Form
or Certificate, in which case such Lender shall not be required to deliver any
such Form or Certificate pursuant to this Section 4.04(b). Notwithstanding
anything to the contrary contained in Section 4.04(a), but subject to Section
12.04(b) and the immediately succeeding sentence, (x) the Borrower shall be
entitled, to the extent it is required to do so by law, to deduct or withhold
income or similar taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, Fees or other
amounts payable hereunder for the account of any Lender which is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) for
U.S. Federal income tax purposes to the extent that such Lender has not provided
to the Borrower U.S. Internal Revenue Service Forms that establish a complete
exemption from such deduction or withholding and (y) the Borrower shall not be
obligated pursuant to Section 4.04(a) hereof to gross-up payments to be made to
a Lender in respect of income or similar taxes imposed by the United States if
(I) such Lender has not provided to the Borrower the Internal Revenue Service
Forms
required to be provided to the Borrower pursuant



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to this Section 4.04(b) or (II) in the case of a payment, other than interest,
to a Lender described in clause (ii) above, to the extent that such Forms do not
establish a complete exemption from withholding of such taxes. Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere in
this Section 4.04 and except as set forth in Section 12.04(b), the Borrower
agrees to pay any additional amounts and to indemnify each Lender in the manner
set forth in Section 4.04(a) (without regard to the identity of the jurisdiction
requiring the deduction or withholding) in respect of any Taxes deducted or
withheld by it as described in the immediately preceding sentence as a result of
any changes after the Effective Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating
to the deducting or withholding of such Taxes.


          SECTION
5. Conditions Precedent.



          5.01 Conditions Precedent to All Credit Events. The obligation
of each Lender to make Revolving Loans or Swingline Loans and the obligation of
the Letter of Credit Issuer to issue any Letter of Credit is subject, at the
time of each such Credit Event, to the satisfaction of the following conditions:



          (a) Notice of Borrowing; Letter of Credit Request. The
Administrative Agent shall have received a Notice of Borrowing meeting the
requirements of Section 1.02 or a Letter of Credit Request meeting the
requirements of Section 2.02, as the case may be.



          (b) No Default; Representations and Warranties. At the time of
each Credit Event and also after giving effect thereto, (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties made by
any Credit Party contained herein or in the other Credit Documents shall be true
and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Credit Event, except to the extent that such representations and warranties
expressly relate to an earlier date.



          The acceptance of the benefits of each Credit Event shall
constitute a representation and warranty by the Borrower that all of the
applicable conditions specified in Section 5.01 exist as of that time.



          SECTION 6. Representations, Warranties and Agreements. In
order to induce the Lenders to enter into this Agreement and to make the Loans
and issue and/or participate in Letters of Credit provided for herein, the
Borrower makes the following representations and warranties to, and agreements
with, the Lenders, all of which shall survive the execution and delivery of this
Agreement and the making of the Loans:



          6.01 Corporate Status. Each of the Borrower and its
Subsidiaries (i) is a duly organized and validly existing corporation,
partnership and/or limited liability company and is in good standing, in each
case under the laws of the jurisdiction of its organization and has the
organizational power and authority to own its property and assets and to
transact the business in which it is engaged and (ii) is duly qualified and is
authorized to do business and, to the extent relevant, is in good standing in
all jurisdictions where it is required to be so qualified and where the failure
to be so qualified, authorized or in good standing is reasonably likely to have
a Material Adverse Effect.



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          6.02 Corporate Power and Authority. Each Credit Party has the
organizational power and authority to execute, deliver and carry out the terms
and provisions of the Credit Documents to which it is a party and has taken all
necessary action to authorize the execution, delivery and performance of the
Credit Documents to which it is a party. Each Credit Party has duly executed and
delivered each Credit Document to which it is a party and each such Credit
Document constitutes the legal, valid and binding obligation of such Person
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally or general equitable principles (regardless of
whether enforcement is sought in equity or at law).



          6.03 No Violation. Neither the execution, delivery or
performance by any Credit Party of the Credit Documents to which it is a party
nor compliance with the terms and provisions thereof, (i) will contravene any
applicable provision of any law, statute, rule, regulation, order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will
conflict or be inconsistent with or result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute a default under, or (other
than pursuant to the Security Documents) result in the creation or imposition of
(or the obligation to create or impose) any Lien upon any of the property or
assets of the Borrower or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust or other material agreement or instrument to
which the Borrower or any of its Subsidiaries is a party or by which it or any
of its property or assets are bound or to which it may be subject or (iii) will
violate any provision of the organizational documents (including by-laws) of the
Borrower or any of its
Subsidiaries.

          6.4 Litigation. There are no actions, suits
or proceedings pending or, to the best of its knowledge, threatened with respect
to the Borrower or any of its Subsidiaries (i) that have, or that could
reasonably be expected to have, a Material Adverse Effect or (ii) that have, or
that could reasonably be expected to have, a material adverse effect on the
rights or remedies of the Lenders or on the ability of the Credit Parties taken
as a whole to perform their obligations under the other Credit Documents.



          6.05 Margin Regulations. Neither the making of any Loan
hereunder (including the Additional Term Loans), nor the use of the proceeds
thereof, will violate the provisions of Regulation T, U or X of the Board of
Governors of the Federal Reserve System and no part of the proceeds of any Loan
will be used to purchase or carry any Margin Stock or to extend credit for-the
purpose of purchasing or carrying any Margin Stock. The proceeds of all Loans
have been utilized in conformity with Section 7.11.



          6.06 Governmental Approvals. Except for filings and recordings
in connection with the Security Documents and to the extent any Notices are
required to be filed, no order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, any
foreign or domestic governmental or public body or authority, or any subdivision
thereof, is required to authorize or is required in connection with (i) the
execution, delivery and performance of any Credit Document or (ii) the legality,
validity, binding effect or enforceability of any Credit Document except, in any
such case, as expressly provided herein or in the Security Documents.


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          6.07 Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an “investment company” or a company “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.



          6.08 Public Utility Holding Company Act. Neither the Borrower
nor any of its Subsidiaries is a “holding company,” or a “subsidiary company” of
a “holding company,” or an “affiliate” of a “holding company” or of a
“subsidiary company” of a “holding company” within the meaning of the Public
Utility Holding Company Act of 1935, as amended.



          6.09 True and Complete Disclosure. All factual information
(taken as a whole) heretofore or contemporaneously furnished by or on behalf of
the Borrower or any of its Subsidiaries in writing to the Agents or any Lender
for purposes of or in connection with this Agreement or any transaction
contemplated herein is, and all other such factual information (taken as a
whole) hereafter furnished by or on behalf of any Credit Party in writing to the
Lenders hereunder will be, true and accurate in all material respects on the
date as of which such information is dated or certified and not incomplete by
omitting to state any material fact necessary to make such information (taken as
a whole) not misleading at such time in light of the circumstances under which
such information was provided. The projections and pro forma financial
information contained in such materials are based on good faith estimates and
assumptions believed by the Borrower to be reasonable at the time made, it being
recognized by the Lenders that such projections as to future events are not to
be viewed as facts and that actual results during the period or periods covered
by any such projections may differ from the projected results. There is no fact
known to the Borrower or any of its Subsidiaries (other than matters relating to
general economic conditions or conditions affecting the Business generally)
which would have a Material Adverse Effect, which has not been disclosed herein
or in such other documents, certificates and statements furnished to the Lenders
for use in connection with the transactions contemplated hereby.



          6.10
Financial Condition; Financial Statements. (a) On and as
of the Restatement Effective Date, on a pro forma basis after giving effect to
the Transaction and all Indebtedness incurred, and to be incurred, and Liens
created, and to be created, by each Credit Party in connection therewith, (x)
the fair valuation of all of the tangible and intangible assets of the Borrower
and its Subsidiaries (on a consolidated basis) will exceed their debts, (y) the
Borrower and its Subsidiaries will not have incurred or intended to incur debts
beyond their ability to pay such debts as such debts mature and (z) the
Borrower and its Subsidiaries will not have unreasonably small capital with
which to conduct their business. For purposes of this Section 6.10, “debt” means
any liability on a claim, and “claim” means (i) right to payment whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured; or (ii) right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.



          (b) The consolidated balance sheet of the Borrower at December
31, 2001 and March 31, 2002 and the related consolidated statements of
operations and cash flows of the Borrower for the fiscal year or three month
ended as of said dates, which, in the case of the annual financial statements,
have been audited by Ernst & Young LLP independent certified


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public accountants, who delivered an unqualified opinion in respect therewith,
copies of all of which have heretofore been furnished to the Administrative
Agent, present fairly the consolidated financial position of the Borrower and
its Subsidiaries at the dates of said statements and the results for the periods
covered thereby in accordance with GAAP, except to the extent provided in the
notes to said financial statements and, in the case of the March 31, 2002
financial statements, subject to normal year-end audit adjustment. The
consolidated balance sheet of USMR at December 31, 2001 and March 31, 2002 and
the related consolidated statements of operations and cash flows of USMR for the
fiscal year or three month ended as of said dates, which, in the case of the
annual financial statements, have been audited by Ernst & Young LLP, independent
certified public accountants, who delivered an unqualified opinion in respect
therewith, copies of all of which have heretofore been furnished to the
Administrative Agent, present fairly the consolidated financial position of USMR
and its Subsidiaries at the dates of said statements and the results for the
periods covered thereby in accordance with GAAP, except to the extent provided
in the notes to said financial statements and, in the case of the March 31, 2002
financial statements, subject to normal year-end audit adjustment. All of the
foregoing financial statements have been prepared in accordance with GAAP and
practices consistently applied except to the extent provided in the notes to
said financial statements. The pro forma consolidated balance sheet of the
Borrower as of June 30, 2002, a copy of which has heretofore been furnished to
the Administrative Agent, presents a good faith estimate of the consolidated pro
forma financial condition of the Borrower (after giving effect to the
Transaction) as at the date thereof. Nothing has occurred since December 31,
2001 that has had or is reasonably likely to have a Material Adverse Effect.


          (c) Except as reflected in the financial statements described
in Section 6.10(b) or in the footnotes thereto, there were as of the Restatement
Effective Date no liabilities or obligations with respect to the Borrower or any
of its Subsidiaries of a nature (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in aggregate,
would be material to the Borrower and its Subsidiaries taken as a whole, except
as incurred in the ordinary course of business consistent with past practices.



          6.11 Security Interests. On and after the Restatement
Effective Date, each of the Security Documents creates, as security for the
obligations purported to be secured thereby, a valid and enforceable security
interest in and Lien on all of the Collateral subject thereto, superior to and
prior to the rights of all third Persons and subject to no other Liens (other
than Permitted Liens relating thereto), in favor of the Collateral Agent for the
benefit of the Secured Creditors, which have been (or will be within the time
required by the Credit Documents) perfected under applicable law. No filings or
recordings are required in order to perfect, or continue the perfection of, the
security interests created under any Security Document except for filings or
recordings required in connection with any such Security Document (other than
the Pledge Agreement) which (x) shall have been made upon or prior to (or are
the subject of arrangements, reasonably satisfactory to the Administrative
Agent, for filing on or promptly after the date of) the execution and delivery
thereof and/or (y) constitute supplemental filings in respect of after acquired
property or continuation statements.



          6.12 Tax Returns and Payments. Each of the Borrower and its
Subsidiaries has filed all federal income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it which




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have become due, except for those contested in good faith and adequately
disclosed and fully provided for on the financial statements of the Borrower and
its Subsidiaries if and to the extent required by GAAP. Each of the Borrower and
its Subsidiaries have at all times paid, or have provided adequate reserves (in
the good faith judgment of the management of the Borrower) for the payment of,
all federal, state and foreign income taxes applicable for all prior fiscal
years which are still open for audit and for the current fiscal year to date.
There is no action, suit, proceeding, investigation, audit, or claim now pending
or, to the knowledge of the Borrower, threatened by any authority regarding any
taxes relating to the Borrower or any of its Subsidiaries which is reasonably
likely to have a Material Adverse Effect.


          6.13 Compliance with ERISA. (a) (i) Annex VI sets forth each
Plan and Multiemployer Plan as of the Restatement Effective Date, after giving
effect to the Transaction; (ii) except as set forth on Annex VI, each Plan (and
each related trust, insurance contract or fund) is in substantial compliance
with its terms and with all applicable laws, including, without limitation,
ERISA and the Code; each Plan (and each related trust, if any) which is intended
to be qualified under Section 401 (a) of the Code has received a determination
letter from the Internal Revenue Service to the effect that it meets the
requirements of Sections 401 (a) and 501 (a) of the Code; no Reportable Event
has occurred with respect to a Plan; to the knowledge of Borrower, no
Multiemployer Plan is insolvent or in reorganization; no Plan has an Unfunded
Current Liability which, when added to the aggregate amount of Unfunded Current
Liabilities with respect to all other Plans, exceeds $10,000,000; no Plan which
is subject to Section 412 of the Code or Section 302 of ERISA has an accumulated
funding deficiency, within the meaning of such sections of the Code or ERISA, or
has applied for or received a waiver of an accumulated funding deficiency or an
extension of any amortization period, within the meaning of Section 412 of the
Code or Section 303 or 304 of ERISA; all contributions required to be made with
respect to a Plan or a Multiemployer Plan have been timely made; neither the
Borrower nor any Subsidiary nor any ERISA Affiliate has incurred any material
liability (including any indirect, contingent or secondary liability) to or on
account of a Plan or a Multiemployer Plan pursuant to Section 409, 502(i),
502(1), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section
401(a)(29), 4971 or 4975 of the Code or reasonably expects to incur any such
liability under any of the foregoing sections with respect to any Plan or any
Multiemployer Plan; no condition exists which presents a material risk to the
Borrower or any Subsidiary or any ERISA Affiliate of incurring a liability to or
on account of a Plan or, to the knowledge of Borrower, of any Multiemployer Plan
pursuant to the foregoing provisions of ERISA and the Code; no proceedings have
been instituted to terminate or appoint a trustee to administer any Plan which
is subject to Title IV of ERISA; no action, suit, proceeding, hearing, audit or
investigation with respect to the administration, operation or the investment of
assets of any Plan (other than routine claims for benefits) is pending, expected
or threatened; using actuarial assumptions and computation methods consistent
with Part 1 of subtitle E of Title IV of ERISA, the aggregate liabilities of the
Borrower and its Subsidiaries and its ERISA Affiliates to all Multiemployer
Plans in the event of a complete withdrawal therefrom, as of the close of the
most recent fiscal year of each such Plan ended prior to the date of the most
recent Credit Event, would not exceed $10,000,000; except as would not result in
a material liability, each group health plan (as defined in Section 607(1) of
ERISA or Section 4980B(g)(2) of the Code) which covers or has covered employees
or former employees of the Borrower, any Subsidiary, or any ERISA Affiliate has
at all times been operated in compliance with the provisions of Part 6 of
subtitle B of Title I of ERISA and Section 4980B of the Code; no lien imposed
under the Code or ERISA on the assets of the



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Borrower or any Subsidiary or any ERISA Affiliate exists or is reasonably likely
to arise on account of any Plan or Multiemployer Plan; and the Borrower and its
Subsidiaries may cease contributions to or terminate any employee benefit plan
maintained by any of them without incurring any material liability.


          (ii) Each Foreign Pension Plan has been maintained in
substantial compliance with its terms and with the requirements of any and all
applicable laws, statutes, rules, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory
authorities. All contributions required to be made with respect to a Foreign
Pension Plan have been timely made. Neither the Borrower nor any of its
Subsidiaries has incurred any obligation in connection with the termination of
or withdrawal from any Foreign Pension Plan. The present value of the accrued
benefit liabilities (whether or not vested) under each Foreign Pension Plan,
determined as of the end of the Borrower’s most recently ended fiscal year on
the basis of actuarial assumptions, each of which is reasonable, did not exceed
the current value of the assets of such Foreign Pension Plan allocable to such
benefit liabilities by more than $1,000,000.

          6.14 Subsidiaries. On and as of the
Restatement Effective Date, after giving effect to the Transaction, the Borrower
has no Subsidiaries other than those Subsidiaries listed on Annex III. Annex III
correctly sets forth, as of the Restatement Effective Date, the percentage
ownership (direct and indirect) of the Borrower in each class of capital stock
of each of its Subsidiaries and also identifies the direct owner thereof.



          6.15 Intellectual Property. Each of the Borrower and its
Subsidiaries owns or holds a valid license to use all the patents, trademarks,
service marks, trade names, technology, know-how, copyrights, licenses,
franchises and formulas or rights with respect to the foregoing, that are used
in the operation of the business of the Borrower or such Subsidiary as presently
conducted and are material to such business where the failure to own or hold a
valid license is reasonably likely to have a Material Adverse Effect.



          6.16 Environmental Matters. (a) Each of the Borrower and its
Subsidiaries is in compliance with all applicable Environmental Laws governing
its business for which failure to comply is reasonably likely to have a Material
Adverse Effect, and neither the Borrower nor any of its Subsidiaries is liable
for any material penalties, fines or forfeitures for failure to comply with any
of the foregoing in the manner set forth above. All licenses, permits,
registrations or approvals required for the business of the Borrower and each of
its Subsidiaries, as conducted as of the Restatement Effective Date, under any
Environmental Law have been secured and each of the Borrower and its
Subsidiaries is in substantial compliance therewith, except such licenses,
permits, registrations or approvals the failure to secure or to comply therewith
is not reasonably likely to have a Material Adverse Effect. Neither the Borrower
nor any of its Subsidiaries is in any respect in noncompliance with, breach of
or default under any applicable writ, order, judgment, injunction, or decree to
which the Borrower or such Subsidiary is a party or which could affect the
ability of the Borrower or such Subsidiary to operate any real property and no
event has occurred and is continuing which, with the passage of time or the
giving of notice or both, would reasonably be expected to constitute
noncompliance, breach of or default thereunder, except in each such case, such
noncompliance, breaches or defaults as are not reasonably likely to, in the
aggregate, have a Material Adverse Effect. There are as of the




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Restatement Effective Date no Environmental Claims pending or, to the best
knowledge of the Borrower threatened, which (i) question the validity, term or
entitlement of the Borrower or any Subsidiary for any permit, license, order or
registration required for the operation of any facility which the Borrower or
any of its Subsidiaries currently operates and (ii) wherein any decision, ruling
or finding is reasonably likely to have a Material Adverse Effect. There are no
facts, circumstances, conditions or occurrences concerning the business or
operations of the Borrower or any of its Subsidiaries, or any Real Property at
any time owned or operated by the Borrower or any of its Subsidiaries or on any
property adjacent to any such Real Property that could reasonably be expected
(i) to form the basis of an Environmental Claim against the Borrower, any of its
Subsidiaries or any of their respective Real Property or (ii) to cause any such
currently owned or operated Real Property to be subject to any restrictions on
the ownership, occupancy, use or transferability of such Real Property under any
Environmental Law, except in each such case, such Environmental Claims or
restrictions that individually, or in the aggregate, are not reasonably likely
to have a Material Adverse Effect.


          (b) Hazardous Materials have not at any time been (i)
generated, used, treated or stored on, or transported to or from, any Real
Property owned or operated by the Borrower or any of its Subsidiaries or (ii)
released on or from any such Real Property, in each case where such occurrence
or event individually or in the aggregate is reasonably likely to have a
Material Adverse Effect.



          6.17 Properties. The Borrower and each of its Subsidiaries
have good and marketable title to, or a validly subsisting leasehold interest
in, all material properties owned and used by them, including all Real Property
reflected in the consolidated balance sheets of the Borrower and USMR, in each
case at December 31, 2001 referred to in Section 6.10(b), free and clear of all
Liens, other than (i) as referred to in such consolidated balance sheets or in
the notes thereto or (ii) otherwise permitted by Section 8.03. Annex IV contains
a true and complete list of each Real Property owned or leased by the Borrower
or any of its Subsidiaries (with an annual base rental obligation in excess of
$250,000) as of the Restatement Effective Date, and the type of interest therein
held by the Borrower or the respective Subsidiary.



          6.18 Labor Relations. No Credit Party is engaged in any unfair
labor practice that could reasonably be expected to have a Material Adverse
Effect. There is (i) no unfair labor practice complaint pending against any
Credit Party or, to the best of its knowledge, threatened against any of them,
before the National Labor Relations Board, and no grievance or arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against any Credit Party or, to the best of its knowledge, threatened
against any of them, (ii) no strike, labor dispute, slowdown or stoppage pending
against any Credit Party or, to the best of its knowledge, threatened against
any Credit Party and (iii) no union representation question existing with
respect to the employees of any Credit Party and no union organizing activities
are taking place, except with respect to any matter specified in clause (i),
(ii) or (iii) above, either individually or in the aggregate, such as is not
reasonably likely to have a Material Adverse Effect.



          6.19 Compliance with Statutes, etc. Each of the Borrower and
each of its Subsidiaries is in compliance with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the




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conduct of its business and the ownership of its property, except such
non-compliance as is not reasonably likely to, individually or in the aggregate,
have a Material Adverse Effect.


          SECTION 7. Affirmative Covenants. The Borrower hereby
covenants and agrees that for so long as this Agreement is in effect and until
the Commitments have terminated, no Letters of Credit or Notes are outstanding
and the Loans and Unpaid Drawings, together with interest, Fees and all other
Obligations (other than any indemnities described in Section 12.13 which are not
then owing) incurred hereunder, are paid in full:



          7.01 Information Covenants. The Borrower will furnish to each
Lender:



          (a) Annual Financial Statements. Within 120 days after the
close of each fiscal year of the Borrower, the audited consolidated balance
sheet of the Borrower and its Subsidiaries, as at the end of such fiscal year
and the related consolidated statements of operations and of cash flows for such
fiscal year and setting forth comparative consolidated figures for the preceding
fiscal year, and examined by independent certified public accountants of
recognized national standing whose opinion shall not be qualified as to the
scope of audit and as to the status of the Borrower or any Subsidiary Guarantor
as a going concern, together with a certificate of such accounting firm stating
that in the course of its regular audit of the business of the Borrower and its
Subsidiaries, which audit was conducted in accordance with generally accepted
auditing standards, no Default or Event of Default which has occurred and is
continuing has come to their attention or, if such a Default or Event of Default
has come to their attention a statement as to the nature thereof.



          (b) Quarterly Financial Statements. Within 45 days after the
close of each of the first three quarterly accounting periods in each fiscal
year, the unaudited consolidated balance sheet of the Borrower and its
Subsidiaries, as at the end of such quarterly period and the related unaudited
consolidated statements of operations and of cash flows for such quarterly
period and for the elapsed portion of the fiscal year ended with the last day of
such quarterly period and setting forth comparative consolidated figures for the
related periods in the prior fiscal year, all of which shall be in reasonable
detail and certified by the chief financial officer or controller of the
Borrower, subject to changes resulting from audit and normal year-end audit
adjustments.



          (c) Monthly Reports. Within 45 days after the end of each
monthly accounting period of each fiscal year (other than the last monthly
accounting period in such fiscal year) the unaudited consolidated balance sheet
of the Borrower and its Subsidiaries, as at the end of such period and the
related unaudited consolidated statements of operations and cash flows for such
period and setting forth comparative figures for the corresponding period of the
previous year, all of which shall be certified by the chief financial officer or
controller of the Borrower subject to changes resulting from audit and normal
year-end audit adjustments.



          (d) Budgets: etc. Not more than 60 days after the commencement
of each fiscal year of the Borrower, a consolidated budget of the Borrower and
its Subsidiaries in reasonable detail for each of the twelve months of such
fiscal year as customarily prepared by management for its internal use setting
forth, with appropriate discussion, the principal assumptions upon which such
budgets are based.




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          (e) Officer’s Certificates. At the time of the delivery of the
financial statements provided for in Sections 7.01 (a), (b) and (c), a
certificate of the chief financial officer, controller or other Authorized
Officer of the Borrower to the effect that no Default or Event of Default exists
or, if any Default or Event of Default does exist, specifying the nature and
extent thereof, which certificate (x) in the case of the certificate delivered
pursuant to Sections 7.01 (a) and (b), shall set forth the calculations required
to establish (I) the Leverage Ratio for the Test Period ending on the last day
of the fiscal period covered by such financial statements and (II) whether the
Borrower and its Subsidiaries were in compliance with the provisions of Sections
8.11, 8.12, and 8.13 as at the end of such fiscal period, and (y) in the case of
the certificate delivered pursuant to Section 7.01 (a), for each year commencing
with the year ending December 31, 2001, shall set forth the amount of the Excess
Cash Flow for the relevant period ending on the last day of the fiscal year
covered by such financial statements.



          (f) Notice of Default or Litigation. Promptly, and in any
event within ten Business Days after any officer of the Borrower obtains
knowledge thereof, notice of (x) the occurrence of any event which constitutes a
Default or Event of Default which notice shall specify the nature thereof, the
period of existence thereof and what action the Borrower proposes to take with
respect thereto and (y) the commencement of, or any significant adverse
development in, any litigation or governmental proceeding pending against the
Borrower or any of its Subsidiaries which is reasonably likely to have a
Material Adverse Effect or is reasonably likely to have a material adverse
effect on the ability of the Credit Parties to perform their obligations under
the Credit Documents.



          (g) Environmental Matters. Promptly after obtaining knowledge
of any of the following (but only to the extent (A) not disclosed in an
environmental report delivered to the Administrative Agent on or prior to the
Restatement Effective Date and (B) that any of the following could reasonably be
expected to (x) have a Material Adverse Effect, either individually or in the
aggregate, or (y) result in a remedial cost to the Borrower or any of its
Subsidiaries (I) in respect of liabilities not otherwise covered by existing
indemnities, in excess of $5,000,000 or (II) in respect of liabilities covered
by existing indemnities, in excess of $20,000,000), written notice of:



          (i) any pending or threatened Environmental Claim against
the Borrower or any of its Subsidiaries or any Real Property owned or operated
by the Borrower or any of its Subsidiaries;



          (ii) any condition or occurrence on any Real Property
owned or operated by the Borrower or any of its Subsidiaries that (x) results in
noncompliance by the Borrower or any of its Subsidiaries with any applicable
Environmental Law or (y) is reasonably likely to result in an Environmental
Claim against the Borrower or any of its Subsidiaries or any such Real Property;



          (iii) any condition or occurrence on any Real Property
owned or operated by the Borrower or any of its Subsidiaries that is reasonably
likely to result in such Real Property being subject to any restrictions on the
ownership, occupancy, use or transferability by the Borrower or its Subsidiary,
as the case may be, of its interest in such Real Property under any
Environmental Law; and




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          (iv) the taking of any removal or remedial action in
response to the actual or alleged presence of any Hazardous Material on any Real
Property owned or operated by the Borrower or any of its Subsidiaries.



All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
Borrower’s or the relevant Subsidiary’s response or proposed response thereto.
In addition, the Borrower agrees to provide the Lenders with such detailed
reports relating to any of the matters set forth in clauses (i)-(iv) above as
may reasonably be requested by the Administrative Agent or the Required Lenders.



          (h) Other Information. Promptly upon transmission thereof, (i)
copies of any filings and registrations with, and reports to, the Securities and
Exchange Commission or any successor thereto (the “SEC”) by the Borrower or any
of its Subsidiaries and (ii) with reasonable promptness, such other reasonably
available information or documents (financial or otherwise) (other than
classified and other similarly sensitive material) as the Administrative Agent
on its own behalf or on behalf of the Required Lenders may reasonably request
from time to time.



          7.02 Books, Records and Inspections. The Borrower will, and
will cause its Subsidiaries to, permit, upon reasonable notice to the chief
financial officer, controller or any other Authorized Officer of the Borrower,
officers and designated representatives of the Administrative Agent or the
Required Lenders during normal business hours to visit and inspect any of the
properties or assets of the Borrower and any of its Subsidiaries in their
possession and to examine the books of account of the Borrower and any of its
Subsidiaries and discuss the affairs, finances and accounts of the Borrower and
of any of its Subsidiaries with, and be advised as to the same by, its and their
officers and independent accountants, all at such reasonable times and intervals
and to such reasonable extent as the Administrative Agent or the Required
Lenders may desire.



          7.03 Insurance. The Borrower will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance with
reputable and solvent insurers in such amounts, covering such risks and
liabilities and with such deductibles or self-insured retentions as are in
accordance with normal industry practice (which, in any event, shall not include
earthquake insurance for leased office, lab, dry dock and shop space). The
Borrower will, and will cause each of its Subsidiaries to, furnish to the
Administrative Agent on the Initial Borrowing Date and thereafter annually, upon
request of the Administrative Agent, a summary of the insurance carried together
with certificates of insurance and other evidence of such insurance, if any,
naming the Collateral Agent as an additional insured and/or loss payee, to the
extent of its interests therein.



          7.04 Payment of Taxes. 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 it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims which, if unpaid, would
become a Lien or charge upon any material properties of the Borrower or any of
its Subsidiaries, provided that neither the Borrower nor any Subsidiary shall be
required to pay any such tax, assessment, charge, levy or claim which is being
contested in good faith and by proper




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proceedings if it has maintained adequate reserves (in the good faith judgment
of the management of the Borrower) with respect thereto in accordance with GAAP.


          7.05 Corporate Franchises. The Borrower will do, and will
cause each Subsidiary to do, or cause to be done, all things reasonably
necessary to preserve and keep in full force and effect its existence and to
preserve its material rights and franchises, other than those the failure to
preserve which could not reasonably be expected to have a Material Adverse
Effect, provided that any transaction permitted by Section 8.02 will not
constitute a breach of this Section 7.05.



          7.06 Compliance with Statutes, etc. The Borrower will, and
will cause each Subsidiary to, comply with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and the
ownership of its property other than those the non-compliance with which is not
reasonably likely to have a Material Adverse Effect or have a material adverse
effect on the ability of the Credit Parties to perform their obligations under
the Credit Documents.



          7.07 ERISA. As soon as possible and, in any event, within ten
(10) days after the Borrower knows or has reason to know of the occurrence of
any of the following, the Borrower will deliver to each of the Lenders a
certificate of the chief financial officer of the Borrower setting forth the
full details as to such occurrence and the action, if any, that the Borrower,
any Subsidiary or any ERISA Affiliate is required or proposes to take, together
with any notices required or proposed to be given to or filed with or by the
Borrower, any Subsidiary, any ERISA Affiliate, the PBGC or any other government
agency, a Plan or Multiemployer Plan participant or the Plan administrator with
respect thereto: that a Reportable Event has occurred (except to the extent that
the Borrower has previously delivered to the Lender a certificate and notices
(if any) concerning such event pursuant to the next clause hereof); that a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA is subject to the advance reporting requirement of
PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(l) thereof),
and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC
Regulation Section 4043 is reasonably expected to occur with respect to such
Plan within the following 30 days; that an accumulated funding deficiency,
within the meaning of Section 412 of the Code or Section 302 of ERISA, has been
incurred or an application may reasonably be expected to be or has been made for
a waiver or modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under Section
412 of the Code or Section 303 or 304 of ERISA with respect to a Plan or
Multiemployer Plan; that any contribution required to be made with respect to a
Plan, Multiemployer Plan or Foreign Pension Plan has not been timely made; that
a Plan or Multiemployer Plan has been or may be reasonably be expected to be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that a Plan or Multiemployer Plan has an Unfunded Current Liability
which, when added to the aggregate amount of Unfunded Current Liabilities with
respect to all other Plans, exceeds the aggregate amount of such Unfunded
Current Liabilities that existed on the Initial Borrowing Date by $10,000,000;
that proceedings may reasonably be expected to be or have been instituted to
terminate or appoint a trustee to administer a Plan which is subject to Title IV
of ERISA; that a proceeding has been instituted pursuant to Section 515 of ERISA
to collect a delinquent contribution to a Plan or Multiemployer Plan; that the
Borrower, any Subsidiary or any ERISA Affiliate will or may




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reasonably be expected to incur any material liability (including any indirect,
contingent, or secondary liability) to or on account of the termination of or
withdrawal from a Plan or Multiemployer Plan under Section 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section
401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(1) of
ERISA or with respect to a group health plan (as defined in Section 607(1) of
ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or
that the Borrower or any Subsidiary may incur any material liability pursuant to
any employee welfare benefit plan (as defined in Section 3(1) of ERISA) that
provides benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or any Plan or any Foreign Pension Plan in
addition to the liability that existed on the Initial Borrowing Date pursuant to
any such plan or plans. Upon request by any Lender, the Borrower will deliver to
such Lender a complete copy of the annual report (on Internal Revenue Service
Form 5500-series) of each Plan (including, to the extent required, the related
financial and actuarial statements and opinions and other supporting statements,
certifications, schedules and information) required to be filed with the
Internal Revenue Service. In addition to any certificates or notices delivered
to the Lenders pursuant to the first sentence hereof, copies of any records,
documents or other information required to be furnished to the PBGC or any other
government agency, and any material notices received by the Borrower, any
Subsidiary or any ERISA Affiliate with respect to any Plan, Multiemployer Plan
or Foreign Pension Plan shall be delivered to the Lender no later than ten days
after the date such records, documents and/or information has been furnished to
the PBGC or any other government agency or such notice has been received by the
Borrower, the Subsidiary or the ERISA Affiliate, as applicable. The Borrower
will, and will cause each Subsidiary to, ensure that all Foreign Pension Plans
administered by it or into which it makes payments obtains or retains (as
applicable) registered status under and as required by applicable law and is
administered in a timely manner in all respects in compliance with all
applicable laws except where the failure to do any of the foregoing would not be
reasonably likely to result in a Material Adverse Effect.


          7.08 Good Repair. The Borrower will, and will cause each of
its Subsidiaries to, ensure that its material properties and equipment used or
useful in its business are kept in good repair, working order and condition,
normal wear and tear excepted, and, subject to Section 8.05, that from time to
time there are made in such properties and equipment all needful and proper
repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto, to the extent and in the manner useful or customary for
companies in similar businesses.



          7.09
End of Fiscal Years; Fiscal Quarters. The Borrower will,
for financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries’, fiscal years and fourth fiscal quarters to end on December 31 of
each year and (ii) each of its, and each of its Subsidiaries’, first three
fiscal quarters to end on the last day of March, June and September of each
year.

          7.10
Additional Security; Further Assurances. (a) The Borrower will cause
(or, in the case of San Diego leasehold, will use commercially reasonable
efforts to cause) to be delivered to the Collateral Agent within 60 days
following the Restatement Effective Date:



          (i) fully executed counterparts of a Mortgage with
respect to each of the USMR Mortgaged Properties, and arrangements reasonably
satisfactory to the Collateral Agent




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shall be in place to provide that counterparts of each such Mortgage shall be
recorded prior to the end of such 60-day period in all places to the extent
necessary or desirable, in the reasonable judgment of the Collateral Agent,
effectively to create a valid and enforceable first priority mortgage Lien,
subject only to Permitted Liens, on each such USMR Mortgaged Property in favor
of the Collateral Agent (or such other trustee as may be required or desired
under local law) for the benefit of the Agents and the Lenders;


          (ii) Mortgage Policies in amounts reasonably satisfactory
to the Collateral Agent and assuring the Collateral Agent that the Mortgages
referred to in clause (i) above are valid and enforceable first priority
mortgage Liens on the respective USMR Mortgaged Properties, free and clear of
all defects and encumbrances except Permitted Liens, and such Mortgage Policies
shall be in form and substance reasonably satisfactory to the Collateral Agent
and (A) shall include (to the extent available in the respective jurisdiction of
each Mortgaged Property) an endorsement for future advances under this
Agreement, the Notes and the Mortgages, and for such other matters that the
Collateral Agent in its discretion may reasonably request and (B) shall not
include an exception for mechanics’ liens; and



          (iii) to the extent the absence of same would result in any
qualification to the related Mortgage Policies, surveys, in form and substance
satisfactory to the Collateral Agent, of the USMR Mortgaged Properties, dated
(or updated) as of a then recent date and certified in a manner acceptable to
the Collateral Agent by a licensed surveyor satisfactory to the Collateral
Agent.



          (b) The Borrower will, and will cause the Subsidiary
Guarantors to, grant to the Collateral Agent security interests and mortgages in
owned Real Property with a fair market value of $5,000,000 or more acquired
after the Restatement Effective Date as may be reasonably requested from time to
time by the Administrative Agent and/or the Required Lenders (collectively, the
“Additional Mortgages”). All such security interests and mortgages shall be
granted pursuant to documentation reasonably satisfactory in form and substance
to the Administrative Agent and shall constitute valid and enforceable Liens
superior to and prior to the rights of all third Persons and subject to no other
Liens except Permitted Liens. The Additional Mortgages or instruments related
thereto shall be duly recorded or filed in such manner and in such places as are
required by law to establish, perfect, preserve and protect the Liens in favor
of the Collateral Agent required to be granted pursuant to the Additional
Mortgages and all taxes, fees and other charges payable in connection therewith
shall be paid in full. Furthermore, the Borrower shall cause to be delivered to
the Collateral Agent such opinions of counsel, title insurance and other related
documents as may be reasonably requested by the Administrative Agent to assure
itself that this Section 7.10(b) has been complied with.



          (c) The Borrower will, and will cause its Subsidiaries to, at
the expense of the Borrower make, execute, endorse, acknowledge, file and/or
deliver to the Collateral Agent from time to time such vouchers, invoices,
schedules, confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other assurances or
confirmatory instruments and take such further steps relating to the collateral
covered by any of the Security Documents as the Collateral Agent may reasonably
require.




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          (d) Each of the Credit Parties agrees that each action
required above by Sections 7.10(b) and (c) shall be completed as soon as
possible, but in no event later than 60 days after such action is requested to
be taken by the Administrative Agent, the Collateral Agent or the Required
Lenders, as the case may be, provided that in no event shall the Borrower be
required to take any action, other than using its reasonable commercial efforts
without any material expenditure, to obtain consents from third parties with
respect to its compliance with Section 7.10(b) and/or (c).



          7.11
Use of Proceeds. (a) The Borrower shall have utilized the
proceeds of the “A Term Loans” and “B Term Loans” made under the Original Credit
Agreement as required under Section 7.11 (a) of the Original Credit Agreement.
The Borrower will utilize the proceeds of all Additional Term Loans (i) to
finance the acquisition of USMR pursuant to the USMR Acquisition, (ii) to
refinance existing Indebtedness of USMR and its Subsidiaries outstanding on the
Restatement Effective Date and (iii) to pay fees and expenses relating to the
Transaction.



          (b) The Borrower will utilize the proceeds of Revolving Loans
and Swingline Loans for general corporate and working capital purposes.



          7.12 Interest Rate Agreement. The Borrower (x) will, no later
than the date occurring 90 days after the Restatement Effective Date, have
entered into Interest Rate Agreements which cover for at least 30 months from
the Initial Borrowing Date at least 30% of the outstanding Term Loans
establishing a ceiling on the Eurodollar Rate of 8% on terms reasonably
satisfactory to the Administrative Agent and (y) may enter into Interest Rate
Agreements which cover additional amounts of outstanding Term Loans on terms
(and in such amounts) reasonably satisfactory to the Administrative Agent.



          7.13 Compliance with Environmental Laws. (a) (i) The Borrower will comply, and will
cause each of its Subsidiaries to comply, with all Environmental Laws applicable
to the ownership, lease or use of all Real Property now or hereafter owned,
leased or operated by the Borrower or any of its Subsidiaries, will promptly pay
or cause to be paid all costs and expenses incurred in connection with such
compliance, and will keep or cause to be kept all such Real Property free and
clear of any Liens imposed pursuant to such Environmental Laws and (ii) neither
the Borrower nor any of its Subsidiaries will generate, use, treat, store,
release or dispose of, or permit the generation, use, treatment, storage,
release or disposal of Hazardous Materials on any Real Property now or hereafter
owned, leased or operated by the Borrower or any of its Subsidiaries, or
transport or permit the transportation of Hazardous Materials to or from any
such Real Property, except to the extent that the failure to comply with the
requirements specified in clause (i) or (ii) above, either individually or in
the aggregate, are not reasonably likely to have a Material Adverse Effect. If
legally required to do so under any applicable directive or order of any
governmental agency, the Borrower agrees to undertake, and cause each of its
Subsidiaries to undertake, any clean up, removal, remedial or other action
necessary to remove and clean up any Hazardous Materials from any Real Property
owned, leased or operated by the Borrower or any of its Subsidiaries in
accordance with, in all material respects, the requirements of all applicable
Environmental Laws and in accordance with, in all material respects, such orders
and directives of all governmental authorities, except to the extent that the
Borrower or such Subsidiary is contesting such order or directive in good faith
and by appropriate proceedings and for which adequate reserves have been
established to the extent




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required by GAAP; provided that it will not constitute a breach of this Section
7.13 if a Person other than the Borrower and its Subsidiaries takes such action
on behalf of the Borrower and its Subsidiaries.


          (b) At the request of the Administrative Agent or the Required
Lenders at any time and from time to time during the continuance of an Event of
Default, upon the reasonable belief by the Administrative Agent that the
Borrower or any of its Subsidiaries has breached in any material respect any
representation or covenant herein with respect to any environmental matters
affecting any Mortgaged Property and such breach is continuing and/or a notice
has been provided under Section 7.01(g), the Borrower will provide, at its sole
cost and expense (or will cause the relevant Subsidiary to provide at its sole
cost and expense), an environmental site assessment report reasonable in scope
concerning any Mortgaged Property that is the subject of the breach or notice of
the Borrower or its Subsidiaries, prepared by an environmental consulting firm
reasonably acceptable to the Administrative Agent, indicating the presence or
Release or absence of Hazardous Materials on or from any such Mortgaged Property
and the potential cost of any removal or remedial action in connection with any
Hazardous Materials on such Mortgaged Property. If the Borrower fails to provide
the same after thirty days’ notice and the Event of Default is continuing, the
Administrative Agent may order the same, and the Borrower shall grant and hereby
grants to the Administrative Agent and the Lenders and their agents access to
such Mortgaged Property and specifically grants the Administrative Agent and the
Lenders an irrevocable non-exclusive license, subject to the rights of tenants,
to undertake such an assessment all at the Borrower’s reasonable expense, which
assessments, if obtained, will be provided to the Borrower.



          7.14 Notices of Assignment. At any time, upon the written
request, and in the sole discretion, of the Required Lenders, each Credit Party
shall promptly, and in any event within 5 Business Days of the delivery of such
written request, deliver to the Administrative Agent duly completed Notices of
Assignment (the “Notices”) pursuant to the provisions of the Assignment of
Claims Act of 1940, 31 U.S.C. § 3727(c), with respect to each material
contract of a Credit Party with the U.S. government or any branch, agency,
bureau or subdivision thereof and, until otherwise directed by the Required
Lenders, shall thereafter update each such Notice, and provide (and update)
Notices with respect to any additional contracts between a Credit Party and the
U.S. government or any branch, agency, bureau or subdivision thereof. Upon the
occurrence and during the continuation of any Event of Default, the Required
Banks may direct the Administrative Agent to file Notices with respect to any or
all of the contracts of the Credit Parties with the U.S. government or any
branch, agency, bureau or subdivision thereof. After any such filing and for so
long as an Event of Default is continuing, the Credit Parties shall take all
action necessary to maintain such filings and to make filings with respect to
any additional material contracts between a Credit Party and the U.S. government
or any branch, agency, bureau or subdivision thereof.



          SECTION 8. Negative Covenants. The Borrower hereby covenants
and agrees that for so long as this Agreement is in effect and until the
Commitments have terminated, no Letters of Credit or Notes are outstanding and
the Loans and Unpaid Drawings, together with interest, Fees and all other
Obligations (other than any indemnities described in Section 12.13 which are not
then owing) incurred hereunder, are paid in full:



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          8.01 Changes in Business. The Borrower will not permit at any time the
business
activities taken as a whole conducted by the Borrower and its Subsidiaries
to be materially
different from the business activities taken as a whole (including
incidental activities) conducted
by the Borrower and its Subsidiaries on the Restatement Effective Date
(after giving effect to the
Transaction) and businesses reasonably related thereto and reasonable
extensions thereof
targeted to governmental, commercial and other customers (the “Business”).



          8.02 Consolidation, Merger, Sale or Purchase of Assets, etc. The Borrower
will not, and will not permit any Subsidiary to, wind up, liquidate or dissolve
its affairs, or enter into any transaction of merger or consolidation, or convey, sell, lease or
otherwise dispose of all or any part of its property or assets (other than inventory or obsolete
equipment or excess equipment no longer needed in the conduct of the business in the ordinary
course of business) or
purchase, lease or otherwise acquire all or any part of the property or
assets of any Person (other
than purchases or other acquisitions of inventory, leases, materials and
equipment in the ordinary
course of business) or agree to do any of the foregoing at any future time
without a contingency
relating to obtaining any required approval hereunder, except that the
following shall be
permitted:



          (a) any Subsidiary of the Borrower may be merged or consolidated with or
into,
or be liquidated into, the Borrower or a Subsidiary Guarantor (so long as
the Borrower or such
Subsidiary Guarantor is the surviving corporation), or all or any part of
its business, properties
and assets may be conveyed, leased, sold or transferred to the Borrower or
any Subsidiary
Guarantor, provided that neither the Borrower nor any Subsidiary Guarantor
may be a party to
any merger, consolidation or liquidation otherwise permitted by this
clause (a) involving a
Person that is not a Wholly-Owned Subsidiary other than in a Permitted
Acquisition;



          (b) capital expenditures to the extent within the limitations set forth in
Section
8.05 hereof;



          (c) the investments, acquisitions and transfers or dispositions of
properties
permitted pursuant to Section 8.06;



          (d) each of the Borrower and any Subsidiary may lease (as lessee) real or
personal property in the ordinary course of business (so long as such
lease does not create a
Capitalized Lease Obligation not otherwise permitted by Section 8.04(d) or
would not violate
Section 8.07);



          (e) licenses or sublicenses by the Borrower and its Subsidiaries of
intellectual
property in the ordinary course of business, provided that such licenses
or sublicenses shall not
interfere with the business of the Borrower or any Subsidiary;



          (f) other sales or dispositions of assets to the extent that the aggregate
Net Cash
Proceeds received from all such sales and dispositions permitted by this
clause (f) shall not
exceed $60,000,000 in the aggregate and $30,000,000 in any fiscal year of
the Borrower,
provided that (x) each such sale shall be in an amount at least equal to
the fair market value
thereof and for proceeds consisting of at least 75% cash (with the
assumption of Indebtedness
and the sale for cash within 30 days of receipt of securities received
counted as cash) and (y) the





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Net Cash Proceeds of any such sale are applied to repay the Loans to the
extent required by Section 4.02(A)(c), and, provided further, that the sale or
disposition of the capital stock of any Subsidiary of the Borrower shall be
prohibited unless it is for all of the outstanding capital stock of such
Subsidiary owned by the Borrower and its Subsidiaries;


          (g) leases and subleases permitted under Section 8.03(g); and



          (h) involuntary sales of interests in Joint Ventures and Foreign
Subsidiaries pursuant to mandatory puts, calls and similar arrangements (to
the extent in effect on the Initial Borrowing Date in the case of the Initial
Existing Joint Ventures and Investments).



          8.03 Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or
with respect to any property or assets of any kind (real or personal, tangible
or intangible) of the Borrower or any such Subsidiary whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable or notes with
recourse to the Borrower or any of its Subsidiaries) or assign any right to
receive income, except:



          (a) Liens for taxes not yet delinquent or Liens for taxes being contested
in good
faith and by appropriate proceedings for which adequate reserves (in the
good faith judgment of
the management of the Borrower) have been established;



          (b) Liens in respect of property or assets of the Borrower or any of its
Subsidiaries imposed by law which were incurred in the ordinary course of
business, such as
carriers’, warehousemen’s and mechanics’ Liens, statutory landlord’s
Liens, and other similar
Liens arising in the ordinary course of business, and (x) which do not
in the aggregate
materially detract from the value of such property or assets or materially
impair the use thereof in
the operation of the business of the Borrower or any of its Subsidiaries
or (y) which are being
contested in good faith by appropriate proceedings, which proceedings have
the effect of
preventing the forfeiture or sale of the property or asset subject to such
Lien;



          (c) Liens created by or pursuant to this Agreement or the other Credit
Documents;



          (d) Liens created pursuant to Capital Leases permitted by Section
8.04(c);



          (e) Liens arising from judgments, decrees or attachments and Liens
securing
appeal bonds arising from judgments, in each case in circumstances not
constituting an Event of
Default under Section 9.09;



          (f) Liens (other than any Lien imposed by ERISA) incurred or deposits made
in
the ordinary course of business in connection with workers’
compensation, unemployment
insurance and other types of social security, or to secure the performance
of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and
return-of-money bonds and other similar obligations incurred in the
ordinary course of business
(exclusive of obligations in respect of the payment for borrowed money);






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          (g) leases or subleases granted to others not interfering in any material
respect with the business of the Borrower or any of its Subsidiaries;



          (h) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the business
of the Borrower or any of its Subsidiaries;



          (i) Liens arising from UCC financing statements regarding leases
permitted by this Agreement;



          (j) (x) receipt of progress payments and advances from customers in the
ordinary course of business to the extent same creates a Lien on the related
inventory and (y) purchase money Liens securing payables arising from the
purchase by the Borrower or any Subsidiary Guarantor of any equipment or goods
in the normal course of business, provided that such payables shall not
constitute Indebtedness;



          (k) any interest or title of a lessor under any lease permitted by
this Agreement;



          (1) Liens (x) in existence on, and which continued in effect after, the
Initial Borrowing Date which are listed, and the property subject thereto
described in, Annex VII, Part I and (y) on assets of USMR and its Subsidiaries
in existence on, and which are to continue in effect after, the Restatement
Effective Date which are listed, and the property subject thereto described
in, Annex VII, Part II, in each case without giving effect to any extension or
renewal thereof; and



          (m) Liens arising pursuant to purchase money mortgages or security
interests securing Indebtedness representing the purchase price (or financing
of the purchase price within 90 days after the respective purchase) of assets
acquired by the Borrower or any Subsidiary Guarantor after the Initial
Borrowing Date, provided that (x) any such Liens attach only to the assets so
acquired and proceeds thereof, (y) the Indebtedness secured by any such Lien
does not exceed 100%, nor is less than 70%, of the lesser of the fair market
value or purchase price of the property being purchased at the time of the
incurrence of such Indebtedness and (z) all Indebtedness secured by Liens
created pursuant to this clause (m) shall not exceed $20,000,000 at any time
outstanding.



          8.04 Indebtedness. The Borrower will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:



          (a) Indebtedness incurred pursuant to this Agreement and the other Credit
Documents;



          (b) Indebtedness owing by (i) any Subsidiary Guarantor to another
Subsidiary
Guarantor or the Borrower and/or (ii) the Borrower to any Subsidiary
Guarantor;



          (c) Capitalized Lease Obligations of the Borrower and its Subsidiary
Guarantors
initially incurred after the Initial Borrowing Date, provided that the
aggregate Capitalized Lease
Obligations under all Capital Leases entered into pursuant to this clause
(c) shall not exceed
$20,000,000;






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          (d) Indebtedness under Interest Rate Agreements to the extent permitted by
Section 7.12;



          (e) Indebtedness incurred pursuant to purchase money mortgages or security
interests permitted by Section 8.03(m);



          (f) Contingent Obligations of any Credit Party with respect to the
Indebtedness or
other obligations of any other Credit Party to the extent such
Indebtedness or other obligations
are permitted to be incurred hereunder;



          (g) Existing Indebtedness, without giving effect to any subsequent
extension,
renewal or refinancing thereof;



          (h) Contingent Obligations (including under letters of credit and other
guaranties) of the Borrower and its Subsidiaries with respect to Indebtedness
and other obligations of Joint Ventures and Foreign Subsidiaries in an
aggregate amount at any time outstanding which (x) when added to all
Investments made pursuant to Section 8.06(j) and then outstanding plus the Net
Acquisition Expenditure at the time, is not in excess of the Investment Basket
and (y) when added to all Investments made pursuant to Section 8.06(j) and
then outstanding, is not in excess of the Modified Investment Basket;



          (i) letters of credit under which the Borrower is the account party
denominated in other than Dollars in an aggregate amount not in excess of the
equivalent of $25,000,000; and



          (j) additional unsecured Indebtedness of the Borrower and the Subsidiary
Guarantors not to exceed an aggregate outstanding principal amount of
$15,000,000 at any time.



          8.05 Capital Expenditures. (a) The Borrower will not, and will not permit
any of
its Subsidiaries to, incur Consolidated Capital Expenditures, provided
that the Borrower and its
Subsidiaries may make Consolidated Capital Expenditures not to exceed in
the aggregate
$50,000,000 during each fiscal year.



          (b) In the event that the maximum amount which is permitted to be
expended in respect of Consolidated Capital Expenditures during any fiscal
year pursuant to Section 8.05(a) (without giving effect to this clause (b)) is
not fully expended during such fiscal year, the maximum amount which may be
expended during the succeeding fiscal years pursuant to Section 8.05(a) shall
be increased by such unutilized amount provided that the maximum increase in
any fiscal year resulting from this clause (b) shall not exceed $20,000,000.



          8.06 Advances, Investments and Loans. The Borrower will not, and will
not
permit any of its Subsidiaries to, lend money or credit or make advances
to any Person, or
purchase or acquire any stock, obligations or securities of, or any other
interest in, or make any
capital contribution to any Person, except:



          (a) the Borrower or any Subsidiary may invest in cash and Cash Equivalents;






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          (b) the Borrower and any Subsidiary may acquire and hold receivables owing
to
them, if created or acquired in the ordinary course of business and
payable or dischargeable in
accordance with customary trade terms and/or reasonable extensions
thereof;



          (c) the intercompany Indebtedness described in Section 8.04(b)
shall be
permitted;



          (d) loans and advances to officers, directors and employees in the
ordinary course
of business (x) for relocation purposes or to purchase stock of the
Borrower and (y) otherwise in
an aggregate principal amount not to exceed $2,500,000 at any time
outstanding shall be
permitted;



          (e) the Borrower and each Subsidiary may acquire and own investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of
suppliers and customers and in settlement of delinquent obligations of,
and other disputes with,
customers and suppliers arising in the ordinary course of business;



          (f) Interest Rate Agreements permitted by Section 7.12 shall be
permitted;



          (g) advances, loans and investments (x) of the Borrower and its
Subsidiaries
(other than USMR and its Subsidiaries) in existence on the Initial
Borrowing Date and listed on
Annex VIII, Part I and/or (y) of USMR and its Subsidiaries in existence on
the Restatement
Effective Date and listed on Annex VIII, Part II, in each case, without
giving effect to any
additions thereto or replacements thereof, shall be permitted;



          (h) the Borrower and each Subsidiary may make capital contributions to any
of their Subsidiaries to the extent a Subsidiary Guarantor;



          (i) Subsidiaries may be established or created in accordance with the
provisions of Section 8.07;



          (j) the Borrower or any Subsidiary may enter into, invest in (including
contributions of cash, copyrights, patents and other intellectual property,
and the use of personnel and/or the issuance of non-exclusive licenses of
intellectual property) and make loans and advances to Joint Ventures and
Foreign Subsidiaries (all such investments, loans and advances, “Investments”)
and the Borrower or any Subsidiary Guarantor may make Permitted Acquisitions,
provided that (i) the aggregate amount of Investments at any time outstanding
(calculated without regard to any write-downs or write-offs and excluding the
value of the use of personnel and/or non-exclusive licenses of intellectual
property) plus the Net Acquisition Expenditure at such time plus the aggregate
amount of all Contingent Obligations then outstanding pursuant to Section
8.04(h) at such time shall not exceed the Investment Basket at such time and
(ii) the aggregate amount of Investments at any time outstanding plus the
aggregate amount of all Contingent Obligations then outstanding pursuant to
Section 8.04(h) at such time shall not exceed the Modified Investment Basket
at such time;



          (k) the Borrower or any Subsidiary Guarantor may maintain the loans to
and investments in (x) the Initial Existing Joint Ventures and Investments and
Foreign Subsidiaries






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which were outstanding on the Initial Borrowing Date and (y) the USMR JV which
were outstanding on the Restatement Effective Date;


          (l) the Borrower may consummate the USMR Acquisition; and



          (m) loans and investments not otherwise permitted by the foregoing
clauses (a) through (l), provided that the aggregate amount of the loans and
investments made pursuant to this clause (m) shall not exceed $ 10,000,000.



          8.07 Limitation on Creation of Subsidiaries. The Borrower will not, and
will not
permit any Subsidiary Guarantor to, establish, create or acquire after the
Restatement Effective
Date any direct Subsidiary and will not permit any Inactive Subsidiary to
acquire assets or
commence business; provided that the Borrower and its Subsidiaries shall
be permitted to
establish, create or acquire (x) Domestic Subsidiaries, and/or an Inactive
Subsidiary may cease to
continue to be an Inactive Subsidiary so long as (i) no less than 85% of
the capital stock of such
new Subsidiary (and in any event all of such capital stock owned by Credit
Parties) is pledged
pursuant to the Pledge Agreement and the certificates representing such
stock, together with
stock powers duly executed in blank, are delivered to the Collateral Agent
and (ii) such new
Subsidiary or former Inactive Subsidiary executes a counterpart of the
Subsidiary Guaranty, the
Pledge Agreement and the Security Agreement, in each case on the same
basis (and to the same
extent) as such Subsidiary or former Inactive Subsidiary would have
executed such Credit
Documents if it were a Credit Party on the Initial Borrowing Date and (y)
Joint Ventures and
Foreign Subsidiaries to the extent otherwise permitted hereunder.



          8.08 Modifications. The Borrower will not, and will not permit any of its
Subsidiaries to:



          (a) make (or give any notice in respect thereof) any voluntary or optional
payment or prepayment or redemption or acquisition for value of
(including, without limitation,
by way of depositing with the trustee with respect thereto money or
securities before due for the
purpose of paying when due) any Existing Indebtedness (other than any of
the COLIs included
therein); or



          (b) amend, modify or change in any manner adverse to the interests of the
Lenders the organizational documents (including by-laws) of any Credit
Party or any agreement
entered into by the Borrower with respect to its capital stock or enter
into any new agreement in
any manner adverse to the interests of the Lenders with respect to the
capital stock of the
Borrower.



          8.09 Dividends, etc. (a) The Borrower will not, and will not permit any of its
Subsidiaries to, declare or pay any dividends (other than dividends
payable solely in capital stock
of such Person) or return any capital to, its stockholders, members and/or
other owners or
authorize or make any other distribution, payment or delivery of property
or cash to its
stockholders, members and/or other owners as such, or redeem, retire,
purchase or otherwise
acquire, directly or indirectly, for a consideration, any shares of any
class of its capital stock or
other ownership interests now or hereafter outstanding (or any warrants
for or options or stock
appreciation rights in respect of any of such shares), or set aside any
funds for any of the




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foregoing purposes, or permit any of its Subsidiaries to purchase or otherwise
acquire for consideration any shares of any class of the capital stock or
other ownership interests of the Borrower or any other Subsidiary, as the case
may be, now or hereafter outstanding (or any options or warrants or stock
appreciation rights issued by such Person with respect to its capital stock)
(all of the foregoing “Dividends”), except that:


          (i) any Subsidiary of the Borrower may pay Dividends or return capital or
make distributions and other similar payments with regard to its capital stock
or other membership interests to the Borrower or to a Subsidiary of the
Borrower;



          (ii) the Borrower may redeem or repurchase its stock from officers,
employees and directors (or their estates) upon the death, permanent
disability, retirement or termination of employment of any such Person or
otherwise in accordance with any stock option plan or any employee stock
ownership plan, provided that (x) no Default or Event of Default is then in
existence or would arise therefrom and (y) the aggregate amount of all cash
paid in respect of all such shares and interests so redeemed or repurchased in
any calendar year does not exceed $7,500,000; and



          (iii) the Borrower may, at any time when (x) no Event of Default exists
and (y) the Leverage Ratio at the end of the last Test Period then ended was
not greater than 3.0 to 1.0, pay Dividends not otherwise permitted by clause
(ii) above, if after giving effect to such payment the Modified Leverage Ratio
would not be greater than 3.0 to 1.0, in an aggregate amount not in excess of
the Available Dividends Amount at such time.



          (b) The Borrower will not, and will not permit any of its Subsidiaries
to, create or otherwise cause or suffer to exist (other than as a result of a
requirement of law) any encumbrance or restriction which prohibits or
otherwise restricts (A) the ability of any Subsidiary to (a) pay dividends or
make other distributions or pay any Indebtedness owed to the Borrower or any
Subsidiary, (b) make loans or advances to the Borrower or any Subsidiary or
(c) transfer any of its properties or assets to the Borrower or any Subsidiary
or (B) the ability of the Borrower or any Subsidiary to create, incur, assume
or suffer to exist any Lien upon its property or assets to secure the
Obligations, other than prohibitions or restrictions existing under or by
reason of: (i) this Agreement and the other Credit Documents; (ii) applicable
law; (iii) customary non-assignment provisions entered into in the ordinary
course of business and consistent with past practices; (iv) any restriction or
encumbrance with respect to a Subsidiary imposed pursuant to an agreement
which has been entered into for the sale or disposition of all or
substantially all of the capital stock or assets of such Subsidiary, so long
as such sale or disposition is permitted under this Agreement; and (v) Liens
permitted under Sections 8.03(d) and (m) and any documents or instruments
governing the terms of any Indebtedness or other obligations secured by any
such Liens, provided that such prohibitions or restrictions apply only to the
assets subject to such Liens.



          8.10 Transactions with Affiliates. The Borrower will not, and will not
permit any Subsidiary to, enter into any transaction or series of transactions
after the Restatement Effective Date whether or not in the ordinary course of
business, with any Affiliate (other than a Credit Party) other than on terms
and conditions substantially as favorable to the Borrower or such Subsidiary
as would be obtainable by the Borrower or such Subsidiary at the time in a






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comparable arm’s length transaction with a Person other than an Affiliate,
provided that the foregoing restrictions shall not apply to (i) the Management
Agreement, (ii) employment arrangements entered into in the ordinary course of
business with officers of the Borrower and its Subsidiaries and (iii)
customary fees paid to, and indemnifications of, members of the Board of
Directors of the Borrower and of its Subsidiaries.


          8.11 Interest Coverage Ratio. The Borrower will not permit the ratio of
(i) Consolidated EBITDA to (ii) Consolidated Interest Expense for any Test
Period ending on the last day of any fiscal quarter set forth below to be less
than the ratio set forth opposite such fiscal quarter:




	 	 	 
	Fiscal Quarter Ending	 	Ratio
	
	 	

	June 30, 2002	 	 
	through December 31, 2002	 	
2.50:1.00
	 
	March 31, 2003	 	 
	through December 31, 2003	 	
2.60:1.00
	 
	March 31, 2004	 	 
	through December 31, 2004	 	
2.80:1.00
	 
	March 31, 2005	 	 
	through December 31, 2005	 	
3.10:1.00
	 
	Thereafter	 	
3.50:1.00



          8.12 Leverage Ratio. The Borrower will not permit the Leverage Ratio
determined as at the end of any Test Period ending on the last day of any
fiscal quarter set forth below, to be more than the ratio set forth opposite
such fiscal quarter:




	 	 	 
	Fiscal Quarter Ending	 	Ratio
	
	 	

	June 30, 2002	 	 
	through December 31, 2002	 	
3.75:1.00
	 
	March 31, 2003	 	 
	through December 31, 2003	 	
3.50:1.00
	 
	March 31, 2004	 	 
	through December 31, 2004	 	
3.25:1.00
	 
	March 31, 2005	 	 
	through December 31, 2005	 	
3.00:1.00
	 
	Thereafter	 	
2.75:1.00



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          8.13 Minimum Consolidated Net Worth. The Borrower will not permit
Consolidated Net Worth at any time to be less than (x) 50% of Original
Cumulative Net Income
at such time less (y) the sum of the Special Dividend and the Additional
Dividend.



          8.14 Limitation On Issuance of Stock. The Borrower will not permit any of
its
Subsidiaries, directly or indirectly, to issue any shares of its capital
stock or other securities (or
warrants, rights or options to acquire shares or other equity securities),
except (i) for replacements of then outstanding shares of capital stock, (ii) for stock splits,
stock dividends and similar
issuances which do not decrease the percentage ownership of the Borrower
and its Subsidiaries
taken as a whole in any class of the capital stock of such Subsidiary,
(iii) for issuances to the
Borrower or any of its Subsidiaries in connection with the creation of new
Wholly-Owned
Subsidiaries permitted under Section 8.07 and (iv) to qualify directors to
the extent required by
applicable law.



          SECTION 9. Events of Default. Upon the occurrence of any of the following
specified events (each, an “Event of Default”):



          9.01 Payments. The Borrower shall (i) default in the payment when due of
any
principal of the Loans or any Unpaid Drawing or (ii) default, and such
default shall continue for
three or more Business Days, in the payment when due of any interest on
the Loans or any Fees
or any other amounts owing hereunder or under any other Credit Document;
or



          9.02 Representations, etc. Any representation, warranty or statement made
by
any Credit Party herein or in any other Credit Document or in any
statement or certificate
delivered or required to be delivered pursuant hereto or thereto shall
prove to be untrue in any
material respect on the date as of which made or deemed made; or



          9.03 Covenants. Any Credit Party shall (a) default in the due performance or
observance by it of any term, covenant or agreement contained in Sections
7.10, 7.12 or 8, or (b)
default in the due performance or observance by it of any term, covenant
or agreement (other
than those referred to in Section 9.01, 9.02 or clause (a) of this Section
9.03) contained in this
Agreement and such default shall continue unremedied for a period of at
least 30 days after
written notice to the defaulting party by the Administrative Agent or the
Required Lenders; or



          9.04 Default Under Other Agreements. (a) The Borrower or any of its Subsidiaries shall (i) default in any payment with respect to any Indebtedness
(other than the Obligations) beyond the period of grace, if any, applicable thereto or (ii)
default in the observance or
performance of any agreement or condition relating to any such
Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur
or condition exist, the effect of which default or other event or
condition is to cause, or to permit
the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or
holders) to cause any such Indebtedness to become due prior to its stated
maturity; or (b) any
such Indebtedness of the Borrower or any of its Subsidiaries shall be
declared to be due and
payable (or shall be required to be prepaid as a result of a default
thereunder or of an event of the
type that constitutes an Event of Default) prior to the stated maturity
thereof, provided that it
shall not constitute an Event of Default pursuant to this Section 9.04
unless the aggregate






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principal amount of all Indebtedness referred to in clauses (a) and (b) above
exceeds $10,000,000 in the aggregate at any one time; or


          9.5 Bankruptcy, etc. The Borrower or any of its Material Subsidiaries
shall
commence a voluntary case concerning itself under Title 11 of the United
States Code entitled
“Bankruptcy”, as now or hereafter in effect, or any successor thereto (the
“Bankruptcy Code”);
or an involuntary case is commenced against the Borrower of any of its
Material Subsidiaries
and the petition is not controverted within 20 days, or is not dismissed
within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy
Code) is appointed for,
or takes charge of, all or substantially all of the property of the
Borrower or any of its Material
Subsidiaries; or the Borrower or any of its Material Subsidiaries
commences any other
proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in
effect relating to the Borrower or any of its Material Subsidiaries; or
there is commenced against
the Borrower or any of its Material Subsidiaries any such proceeding which
remains undismissed
for a period of 60 days; or the Borrower or any of its Material
Subsidiaries is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any
such case or proceeding
is entered; the Borrower or any of its Material Subsidiaries suffers any
appointment of any
custodian or the like for it or any substantial part of its property to
continue undischarged or
unstayed for a period of 60 days; or the Borrower or any of its Material
Subsidiaries makes a
general assignment for the benefit of creditors; or any corporate action
is taken by the Borrower
or any of its Material Subsidiaries for the purpose of effecting any of
the foregoing; or



          9.6 ERISA. (a) Any Plan or Multiemployer Plan shall fail to satisfy the
minimum funding standard required for any plan year or part thereof under
Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of
any amortization
period is sought or granted under Section 412 of the Code or Section 303
or 304 of ERISA, a
Reportable Event shall have occurred, a contributing sponsor (as defined
in Section 4001(a)(13)
of ERISA) of a Plan subject to Title IV of ERISA shall be subject to the
advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to
subparagraph (b)(l)
thereof) and an event described in subsection .62, .63, .64, .65, .66, .67
or .68 of PBGC
Regulation Section 4043 shall be reasonably expected to occur with respect
to such Plan within
the following 30 days, any Plan which is subject to Title IV of ERISA
shall have had or is likely
to have a trustee appointed to administer such Plan, any Plan or
Multiemployer Plan which is
subject to Title IV of ERISA is, shall have been or is likely to be
terminated or to be the subject
of termination proceedings under ERISA, any Plan shall have an Unfunded
Current Liability, a
contribution required to be made with respect to a Plan, Multiemployer
Plan or a Foreign
Pension Plan has not been timely made, the Borrower or any Subsidiary or
any ERISA Affiliate
has incurred or is likely to incur any liability to or on account of a
Plan or Multiemployer Plan
under Section 409, 502(i), 502(1), 515, 4062, 4063, 4064, 4069, 4201, 4204
or 4212 of ERISA or
Section 401(a)(29), 4971 or 4975 of the Code or on account of a group
health plan (as defined in
Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section
4980B of the Code,
or the Borrower or any Subsidiary has incurred or is likely to incur
liabilities pursuant to one or
more employee welfare benefit plans (as defined in Section 3(1) of ERISA)
that provide benefits
to retired employees or other former employees (other than as required by
Section 601 of
ERISA) or Plans or Foreign Pension Plans, a “default”, within the meaning
of Section 4219(c)(5)
of ERISA shall occur with respect to any Multiemployer Plan, any
applicable law, rule or




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regulation is adopted, changed or interpreted, or the interpretation or
administration thereof is changed, in each case after the date hereof, by any
governmental authority or agency or by any court (a “Change in Law”), or, as a
result of a Change in Law, an event occurs following a Change in Law, with
respect to or otherwise affecting any Plan or Multiemployer Plan; (b) there
shall result from any such event or events the imposition of a lien, the
granting of a security interest, or a liability or a material risk of
incurring a liability; and (c) such lien, security interest or liability,
individually, and/or in the aggregate, in the opinion of the Required Lenders,
has had, or is reasonably likely to have, a Material Adverse Effect; or


          9.07 Security Documents. (a) Except in each case to the extent resulting
from the negligent or willful failure of the Collateral Agent, any Security
Document shall cease to be, in any material respect, in full force and effect,
or shall cease, in any material respect, to give the Collateral Agent the
Liens, powers and privileges purported to be created thereby in favor of the
Collateral Agent, or (b) any Credit Party shall default in the due performance
or observance of any material term, covenant or agreement on its part to be
performed or observed pursuant to any such Security Document and such default
shall continue unremedied for a period of at least 30 days after written
notice to the respective Credit Party by the Administrative Agent; or



          9.08 Guaranty. Any of the Guaranties or any material provision thereof
shall cease to be in full force and effect, or any Guarantor or any Person
acting by or on behalf of such Guarantor shall deny or disaffirm such
Guarantor’s obligations under any Guaranty; or



          9.09 Judgments. One or more judgments or decrees shall be entered against
the
Borrower or any of its Subsidiaries involving a liability (to the extent
not paid or covered by
insurance) in excess of $10,000,000 in the aggregate for all such
judgments and decrees for the
Borrower and its Subsidiaries and all such judgments and decrees in excess
of such amount shall
not have been vacated, discharged or stayed or bonded pending appeal
within 60 days from the
entry thereof; or



          9.10 Change of Control. A Change of Control shall occur and be continuing;



then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Administrative Agent shall, upon the
written request of the Required Lenders, by written notice to the Borrower,
take any or all of the following actions, without prejudice to the rights of
the Administrative Agent or any Lender to enforce its claims against any
Guarantor or the Borrower, except as otherwise specifically provided for in
this Agreement (provided that, if an Event of Default specified in Section 9.05
shall occur with respect to the Borrower, the result which would occur upon the
giving of written notice by the Administrative Agent as specified in clauses
(i) and (ii) below shall occur automatically without the giving of any such
notice): (i) declare the Total Revolving Commitment terminated, whereupon the
Commitment of each Lender shall forthwith terminate immediately and any
Commitment Commission shall forthwith become due and payable without any other
notice of any kind; (ii) declare the principal of and any accrued interest in
respect of all Loans and all obligations owing hereunder (including Unpaid
Drawings) and thereunder to be, whereupon the same shall become, forthwith due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; (iii) enforce, as Collateral
Agent (or direct the Collateral Agent to enforce), any or all of the Liens and
security interests created pursuant to the Security Documents; (iv) terminate
any


-49-






 


Letter of Credit which may be terminated in accordance with its terms; and (v)
direct the Borrower to pay (and the Borrower hereby agrees upon receipt of
such notice, or upon the occurrence of any Event of Default specified in
Section 9.05 in respect of the Borrower, it will pay) to the Collateral Agent
at the Payment Office such additional amounts of cash, to be held as security
for the Borrower’s reimbursement obligations in respect of Letters of Credit
then outstanding equal to the aggregate Stated Amount of all Letters of Credit
then outstanding.


          SECTION 10. Definitions. As used herein, the following terms shall have
the meanings herein specified unless the context otherwise requires. Defined
terms in this Agreement shall include in the singular number the plural and in
the plural the singular:



          “A Term Facility I” shall mean the Facility evidenced by the A Term
Loans I.



          “A Term Facility II” shall mean the facility evidenced by
the A Term Loans II.



          “A Term Loans” shall mean and include the A Term Loans I and the A Term
Loans II.



          “A Term Loans I” and “A Term Loans II” shall each have the meaning
provided in Section 1.01 (a).



          “A Term Note” shall have the meaning provided in the Original Credit
Agreement.



          “A Term Note II” shall mean a promissory note issued by the Borrower
substantially in the form of Exhibit B-l to the Original Credit Agreement with
blanks appropriately completed provided that all references in such Exhibit to
“A Term Loans” shall be changed to “A Term Loans II”, the references in such
Exhibit to “A Term Notes” shall be changed to “A Term Notes II” and the date
of each such Note shall be the Restatement Effective Date.



          “A TF Percentage” shall mean, at any time of determination thereof, a
fraction (expressed as a percentage) the numerator of which is equal to the
aggregate principal amount of A Term Loans outstanding at such time and the
denominator of which is equal to the aggregate principal amount of Term Loans
outstanding at such time, provided that at any time that no A Term Loans are
outstanding (including upon the application of only a portion of any required
prepayment of Term Loans under Section 4.02(A)), the A TF Percentage shall be
zero.



          “Acquisition Expenditures” shall mean at any time the amount (if zero or
positive) by which (i) the aggregate amount of cash then expended by the
Borrower and Subsidiary Guarantors to effect Permitted Acquisitions under
Section 8.06(j) exceeds (ii) the lesser of (x) $50,000,000 and (y) the
aggregate amount of cash contributed to the Borrower as equity, or paid to the
Borrower to purchase equity from the Borrower, that is utilized to make
Permitted Acquisitions and not used to repay Term Loans under Section
4.02(A)(e).



          “Additional Dividend” shall have the meaning provided in the Original
Credit Agreement.







-50-






 





          “Additional Lender” shall have the meaning provided in the Agreement to
Amend.



          “Additional Mortgages” shall have the meaning provided in Section 7.10(b).



          “Additional Term Loans” shall mean the Term Loans that the Additional
Lenders make on the Restatement Effective Date pursuant to Section 3 of the
Agreement to Amend.



          “Adjusted Cash Flow” for any fiscal year shall mean Consolidated Net
Income for such fiscal year (after provision for taxes) plus (without
duplication) the amount of all net non-cash charges (including, without
limitation, depreciation, deferred tax expense, non-cash interest expense,
amortization and other non-cash charges) that were deducted in arriving at
Consolidated Net Income for such fiscal year to the extent not representing a
cash payment to be made in the future, minus (without duplication) (x) the
amount of all non-cash gains and gains from sales of assets (other than sales
of inventory and equipment in the normal course of business) that were added
in arriving at Consolidated Net Income for such fiscal year, (y) the actual
cash payment made in such fiscal year in respect of a non-cash charge taken in
determining Consolidated Net Income for a previous fiscal year and (z) the
positive difference, if any, between actual taxes paid in respect of such
fiscal year and tax expense deducted in arriving at Consolidated Net Income
for such fiscal year.



          “Adjusted RF Percentage” shall mean (x) at a time when no Lender Default
exists, for each Lender, such Lender’s RF Percentage and (y) at a time when a
Lender Default exists (i) for each Lender that is a Defaulting Lender, zero and
(ii) for each Lender that is a Non-Defaulting Lender, the percentage determined
by dividing such Lender’s Revolving Commitment at such time by the Adjusted
Total Revolving Commitment at such time, it being understood that all
references herein to Revolving Commitments and the Adjusted Total Revolving
Commitment at a time when the Total Revolving Commitment has been terminated
shall be references to the Revolving Commitments or Adjusted Total Revolving
Commitment, as the case may be, in effect immediately prior to such
termination, provided that (A) no Lender’s Adjusted RF Percentage shall change
upon the occurrence of a Lender Default from that in effect immediately prior
to such Lender Default if after giving effect to such Lender Default, and any
repayment of Revolving Loans and Swingline Loans at such time pursuant to
Section 4.02(A)(a) or otherwise, the sum of (i) the aggregate outstanding
principal amount of Revolving Loans of all Non-Defaulting Lenders, plus (ii)
the aggregate outstanding principal amount of all Swingline Loans, plus (iii)
the aggregate amount of Letter of Credit Outstandings, exceeds the Adjusted
Total Revolving Commitment; (B) the changes to the Adjusted RF Percentage that
would have become effective upon the occurrence of a Lender Default but that
did not become effective as a result of the preceding clause (A) shall become
effective on the first date after the occurrence of the relevant Lender Default
on which the sum of (i) the aggregate outstanding principal amount of the
Revolving Loans of all Non-Defaulting Lenders, plus (ii) the aggregate
outstanding principal amount of all Swingline Loans, plus (iii) the aggregate
amount of Letter of Credit Outstandings is equal to or less than the Adjusted
Total Revolving Commitment; and (C) if (i) a Non-Defaulting Lender’s Adjusted
RF Percentage is changed pursuant to the preceding clause (B) and (ii) any
repayment of such Lender’s Revolving Loans, or Swingline Loans or Unpaid
Drawings that were made during the period commencing after the date of the
relevant Lender Default and ending on the date of such change to its Adjusted
RF Percentage must be returned to the







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Borrower as a preferential or similar payment in any bankruptcy or similar
proceeding of the Borrower, then the change to such Non-Defaulting Lender’s
Adjusted RF Percentage effected pursuant to said clause (B) shall be reduced
to that positive change, if any, as would have been made to its Adjusted RF
Percentage if (x) such repayments had not been made and (y) the maximum change
to its Adjusted RF Percentage would have resulted in the sum of the
outstanding principal of Revolving Loans made by such Lender plus such
Lender’s new Adjusted RF Percentage of the outstanding principal amount of
Swingline Loans and of Letter of Credit Outstandings equaling such Lender’s
Revolving Commitment at such time.


          “Adjusted Total Revolving Commitment” shall mean at any time the Total
Revolving Commitment less the aggregate Revolving Commitments of all
Defaulting Lenders.



          “Administrative Agent” shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 11.09.



          “Affiliate” shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to control a corporation if
such Person possesses, directly or indirectly, the power (i) to vote 10% or
more of the securities having ordinary voting power for the election of
directors of such corporation or (ii) to direct or cause the direction of the
management and policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise.



          “Agents” shall have the meaning provided in the first paragraph of this
Agreement.



          “Agreement” shall mean this Amended and Restated Credit Agreement, as the
same may be from time to time further modified, amended and/or supplemented.



          “Agreement to Amend” shall mean the Agreement to Amend and Restate dated
as of June 21, 2002 among the Borrower, the Agents and the Persons that are
Lenders after giving effect to the effectiveness thereof.



          “Anticipated Reinvestment Amount” shall mean, with respect to any
Reinvestment Election, the amount specified in the Reinvestment Notice
delivered by the Borrower in connection therewith as the amount of the Net
Cash Proceeds from the related Asset Sale that the Borrower intends to use to
purchase, construct or otherwise acquire Reinvestment Assets.



          “Applicable Base Rate Margin” shall mean (i) in the case of Revolving
Loans and Swingline Loans, 2.00% less the Margin Reduction Discount, if any,
and (ii) in the case of Term Loans, 1.75% less the Margin Reduction Discount,
if any.



          “Applicable Eurodollar Margin” shall mean (i) in the case of Revolving
Loans, 3.00% less the Margin Reduction Discount, if any, and (ii) in the case
of Term Loans, 2.75% less the Margin Reduction Discount, if any.







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          “Applicable Percentage” shall mean (i) 0.375% at any time that the
Applicable Eurodollar Margin for Revolving Loans is 2.0% or less; and (ii)
..50% at all other times.



          “Applicable Reserve Requirement” shall mean for any Eurodollar Loan, the
maximum rate, expressed as a decimal, at which reserves (including, without
limitation, any basic marginal, special, supplemental, emergency or other
reserves) are required to be maintained with respect thereto against
“Eurocurrency liabilities” (as such term is defined in Regulation D) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System or other applicable banking regulator. Without limiting the
effect of the foregoing, the Applicable Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks with respect to
(i) any category of liabilities which includes overseas Dollar deposits by
reference to which the applicable Eurodollar Rate of a Loan is to be
determined, or (ii) any category of extensions of credit or other assets which
include Eurodollar Loans.



          “A/RF Maturity Date” shall mean the sixth anniversary of the Initial Borrowing Date.



          “Asset Sale” shall mean and include (x) the sale, transfer or other
disposition by the Borrower or any Subsidiary to any Person other than the
Borrower or any Subsidiary Guarantor of any asset of the Borrower or such
Subsidiary (other than sales, transfers or other dispositions in the ordinary
course of business of inventory and/or obsolete or excess equipment) and/or
(y) the receipt by the Borrower or any Subsidiary of any insurance,
condemnation or similar proceeds in connection with a casualty or taking of
any of its assets in excess of the costs incurred by the Borrower and its
Subsidiaries in respect of such event and of repairing or replacing the assets
so damaged, destroyed or taken but in all cases only to the extent that the
aggregate Net Cash Proceeds of all such sales, transfers, dispositions and
receipts after the Initial Borrowing Date are in excess of $10,000,000.



          “Assignment Agreement” shall mean the Assignment Agreement in the form of
Exhibit G (appropriately completed).



          “Authorized Officer” shall mean any senior officer of the Borrower
designated as such in writing to the Administrative Agent by the Borrower.



          “Available Dividends Amount” shall mean with respect to any Dividend to be
paid pursuant to Section 8.09(a)(iii) an amount equal to (i) (x) 7.5% of Total
ECF at such time if the Leverage Ratio at the end of the Test Period then last
ended was at least 2.0 to 1.0 but not greater than 3.0 to 1 or (y) 17.5% of
Total ECF at such time if the Leverage Ratio at the end of the Test Period then
last ended was less than 2.0 to 1.0 less (ii) the aggregate Dividends
theretofore paid after the Restatement Effective Date pursuant to Section
8.09(a)(iii).



          “Average Daily Amount of Revolving Loans” for any period shall mean the
average daily outstanding principal amount of Revolving Loans during such
period.



          “B Maturity Date” shall mean the eighth anniversary of the Initial
Borrowing Date.







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          “B Term Facility I” shall mean the Facility evidenced by the B
Term Loans I.



          “B Term Facility II” shall mean the Facility
evidenced by B Term Loans II.



          “B Term Loans” shall mean and
include the B Term Loans I and the B Term
Loans II.



          “B Term Loans I” and “B Term Loans II” shall each have the meaning
provided in Section 1.01(b).



          “B Term Note” shall have the meaning provided in the Original Credit
Agreement.



          “B Term Note II” shall mean a promissory note issued by the Borrower
substantially in the form of Exhibit B-2 to the Original Credit Agreement with
blanks appropriately completed provided that all references in such Exhibit to
“B Term Loans” shall be changed to “B Term Loans II”, the references in such
Exhibit to “B Term Notes” shall be changed to “B Term Notes II” and the date
of each such Note shall be the Restatement Effective Date.



          “B TF Percentage” shall mean, at any time of determination thereof, a
fraction (expressed as a percentage) the numerator of which is equal to the
aggregate principal amount of B Term Loans outstanding at such time and the
denominator of which is equal to the aggregate principal amount of Term Loans
outstanding at such time, provided that the B TF Percentage shall be readjusted
for any required repayment of Term Loans under Section 4.02(A) at such time, if
any, that no A Term Loans remain outstanding.



          “Bankruptcy Code” shall have the meaning provided in Section
9.05.



          “Base Rate” at any time shall mean the higher of (i) the rate which is
1/2 of 1% in excess of the Federal Funds Effective Rate and (ii) the Prime
Lending Rate.



          “Base Rate Loan” shall mean each Loan bearing interest at the rates
provided in Section 1.08(a).



          “Borrower” shall mean United Defense Industries, Inc., a Delaware
corporation.



          “Borrowing” shall mean the incurrence of (i) a Swingline Loan by the
Borrower from the Swingline Lender on a given date or (ii) one Type of
Revolving Loan by the Borrower from the RF Lenders on a pro rata basis on a
given date or (iii) one Type of a Loan under a Facility resulting from a
conversion of Loans under such Facility on a given date, having in the case of
Eurodollar Loans under clause (ii) or (iii) the same Interest Period; provided
that Base Rate Loans incurred pursuant to Section 1.10(b) shall be considered
part of any related Borrowing of Eurodollar Loans.



          “Business” shall have the meaning provided in Section
8.01(a).






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          “Business Day” shall mean (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by
and between banks in Dollar deposits in the interbank Eurodollar market.



          “Capital Lease” as applied to any Person shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.



          “Capitalized Lease Obligations” shall mean all obligations under Capital
Leases of the Borrower or any of its Subsidiaries in each case taken at the
amount thereof accounted for as liabilities in accordance with GAAP.



          “Carlyle” shall mean TC Group L.L.C. (which operates under the trade name
“the Carlyle Group”), a Delaware limited liability company.



          “Carlyle Affiliate” shall mean any entity controlled directly or
indirectly by Carlyle.



          “Cash Equivalents” shall mean (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (ii) Dollar denominated time
deposits, certificates of deposit and bankers’ acceptances of (x) any Lender
that is a domestic commercial bank of recognized standing having capital and
surplus in excess of $500,000,000 or (y) any bank (or the parent company of
such bank) whose short-term commercial paper rating from Standard & Poor’s
Ratings Services, a division of McGraw-Hill, Inc.
(“S&P”) is at least A-1 or
the equivalent thereof or from Moody’s Investors Service, Inc. (“Moody’s”) is
at least P-1 or the equivalent thereof (any such bank, an “Approved Bank”), in
each case with maturities of not more than one year from the date of
acquisition, (iii) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause (i) above
entered into with any bank meeting the qualifications specified in clause (ii)
above, (iv) commercial paper issued by any Approved Bank or by the parent
company of any Approved Bank and commercial paper issued by, or guaranteed by,
any industrial or financial company with a short-term commercial paper rating
of at least A-1 or the equivalent thereof by S&P or at least P-1 or the
equivalent thereof by Moody’s, or guaranteed by any industrial company with a
long term unsecured debt rating of at least A or A2, or the equivalent of each
thereof, from S&P or Moody’s, as the case may be, and in each case maturing
within six months after the date of acquisition, (v) marketable direct
obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and, at the time
of acquisition, having one of the two highest ratings obtainable from either
S&P or Moody’s, and (vi) investments in money market funds substantially all of
whose assets are comprised of securities of the type described in clauses (i)
through (v) above.







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          “Cash Proceeds” shall mean, with respect to any Asset Sale, the aggregate
cash payments (including any cash received by way of deferred payment pursuant
to a note receivable issued in connection with such Asset Sale, other than the
portion of such deferred payment constituting interest, but only as and when
so received) received by the Borrower and/or any Subsidiary from such Asset
Sale.



          “CERCLA” shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq.



          “Change of Control” shall mean, at any time and for any reason
whatsoever, (a) any person or group (as defined in Section 13(d) of the
Exchange Act) (collectively, an “Other Investor”) has beneficial ownership
(within the meaning of Rule 13d-3 of the Exchange Act) of a percentage of the
voting interests in the Borrower’s capital stock that is greater than the
percentage of such voting interests at the time beneficially owned or
controlled by Carlyle and Carlyle Affiliates provided that this clause (a)
shall not be applicable if the Other Investor is a Passive Investor that holds
beneficial ownership of less than 20% of such voting interests, or (b) the
Board of Directors of the Borrower shall cease to consist of a majority of
Continuing Directors.



          “Code” shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of
this Agreement and any subsequent provisions of the Code, amendatory
thereof,
supplemental thereto or substituted therefor.



          “COLIs” shall mean Indebtedness of Norshipco under life insurance
policies owned by Norshipco and listed on Annex IX hereto.



          “Collateral” shall mean all of the Collateral as defined in each of the
Security Documents.



          “Collateral Agent” shall mean the Administrative Agent acting as
collateral agent for the Lenders.



          “Commitment” shall mean, with respect to each Lender, such Lender’s Term
Commitment and Revolving Commitment.



          “Commitment Commission” shall have the meaning provided in Section 3.01 (a).



          “Consolidated Capital Expenditures” shall mean, for any period, the
aggregate of all cash expenditures (including in all events all amounts
expended under Capital Leases but excluding any amount representing capitalized
interest) by the Borrower and its Subsidiaries during that period that, in
conformity with GAAP, are or are required to be included in the property, plant
or equipment reflected in the consolidated balance sheet of the Borrower and
its Subsidiaries, provided that Consolidated Capital Expenditures shall in any
event (x) exclude the purchase price paid in cash in connection with the
acquisition of any Person (including through the purchase of all of the capital
stock or other ownership interests of such Person or through merger or
consolidation) to the extent allocable to property, plant and equipment and (y)
exclude amounts expended to acquire Reinvestment Assets, it being agreed that
USMR and its







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Subsidiaries shall not constitute Subsidiaries of the Borrower until the
Restatement Effective Date and that therefore any expenditures made by, and
the result of operations of, USMR and its Subsidiaries prior to the
Restatement Effective Date will not be included in determining Adjusted Cash
Flow, Consolidated Capital Expenditures, Consolidated EBIT, Consolidated
EBITDA, Consolidated Interest Expense, Consolidated Net Income and Excess Cash
Flow.


          “Consolidated Debt” shall mean, as of any date of determination, (i) the
aggregate stated balance sheet amount of all Indebtedness of the Borrower and
its Subsidiaries on a consolidated basis as determined in accordance with GAAP
plus (ii) any Indebtedness for borrowed money of any other Person as to which
the Borrower and/or any of its Subsidiaries has created a guarantee or other
Contingent Obligation (but only to the extent of such guarantee or other
Contingent Obligation).



          “Consolidated EBIT” shall mean, for any period, (A) the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) provisions for
taxes based on income, (iii) Consolidated Interest Expense, (iv) amortization
or write-off of deferred financing costs to the extent deducted in determining
Consolidated Net Income and (v) losses on sales of assets (excluding sales in
the ordinary course of business) and other extraordinary losses and other
onetime charges less (B) the sum of (i) any cash payments made in such period
in respect of an event as to which a one-time non-cash charge was previously
incurred and (ii) gains on sales of assets (excluding sales in the ordinary
course of business) and other extraordinary gains and other one-time non-cash
gains, all as determined on a consolidated basis in accordance with GAAP.



          “Consolidated EBITDA” shall mean, for any period, the sum of the amounts
for such period of (i) Consolidated EBIT, (ii) depreciation expense, (iii)
amortization expense including any amortization or write-off related to the
write-up of any assets as a result of purchase accounting, (iv) to the extent
deducted in determining Consolidated Net Income, transaction expenses related
to USMR Acquisition and (v) LIFO charges, provided that when determining the
Leverage Ratio, Consolidated EBITDA for any Test Period during which a
Permitted Acquisition is consummated shall be determined on a pro forma basis
as if such Permitted Acquisition was consummated on the first day of such Test
Period.



          “Consolidated Interest Expense” shall mean, for any period, (x) total
interest expense (including the portion that is attributable to Capital Leases
in accordance with GAAP) of the Borrower and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of the
Borrower and its Subsidiaries (including, without limitation, all
commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers’ acceptance financing and without duplication
net costs and/or net benefits under Interest Rate Agreements, but excluding,
however, amortization of deferred financing costs to the extent included in
total interest expense) less (y) the interest income of such Persons for such
period.



          “Consolidated Net Income” shall mean for any period, the net income (or
loss) of the Borrower and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP,
provided that there shall be excluded from the calculation thereof (without
duplication) (i) the income (or loss) of any Person (other than Subsidiaries of
the Borrower) in which any other Person (other than the Borrower or any of







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its Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to the Borrower or any of its
Subsidiaries by such Person during such period, (ii) the income (or loss) of
any Person accrued prior to the date it becomes a Subsidiary of the Borrower
or is merged into or consolidated with the Borrower or any of its Subsidiaries
or that Person’s assets are acquired by the Borrower or any of its
Subsidiaries and (iii) the income of any Subsidiary of the Borrower to the
extent that the declaration or payment of dividends or similar distributions
by that Subsidiary of that income is not at the time permitted by operation of
the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that Subsidiary.


          “Consolidated Net Worth” shall mean, at any time for the determination
thereof, all amounts which, in conformity with GAAP, would be included under
the caption “total shareholders’ equity” (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries as at such
date, provided that any amortization of purchase accounting write-ups for
inventory, property, plant and equipment, and in-place research and
development shall be excluded from the calculation of Consolidated Net Worth.



          “Contingent Obligations” shall mean as to any Person any obligation of
such Person guaranteeing or intending to guarantee any Indebtedness, leases,
dividends or other obligations (“primary obligations”) of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment
of such primary obligation or (d) otherwise to assure or hold harmless the
owner of such primary obligation against loss in respect thereof, provided,
however, that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated maximum of the Contingent Obligation or, if none, the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if there is no stated or determinable amount
of the primary obligation, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith.



          “Continuing Directors” shall mean the directors of the Borrower on the
Restatement Effective Date and each other director if such director’s
nomination for the election to the Board of Directors of the Borrower is
recommended by a majority of the then Continuing Directors.



          “Credit Documents” shall mean this Agreement, the Notes, the Security
Documents, the Subsidiary Guaranty, the Agreement to Amend and any documents
executed in connection therewith.







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          “Credit Event” shall mean and include the making of a Loan or the
issuance of a Letter of Credit.



          “Credit Party” shall mean the Borrower and the Subsidiary
Guarantors.



          “DBTC” shall mean Deutsche Bank Trust Company
Americas.



          “Deemed ECF” shall mean for any period any prepayments of the principal
of Term Loans made during such period pursuant to Section 4.01.



          “Default” shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.



          “Defaulting Lender” shall mean any Lender with respect to which a Lender
Default is in effect.



          “Dividends” shall have the meaning provided in Section
8.09.



          “Dollars” and the sign “$” shall each mean freely transferable lawful
money of the United States.



          “Domestic Subsidiary” shall mean each Subsidiary of the Borrower that is
not a Foreign Subsidiary.



          “Eligible Transferee” shall mean and include a commercial bank, financial
institution or other institutional “accredited investor” as defined in SEC
Regulation D, provided that an Eligible Transferee shall not be any Person
specified in a writing (a “Written Election”) from the Borrower to the
Administrative Agent and Syndication Agent as not constituting an Eligible
Transferee hereunder and any Affiliate of such Person, provided further that
only one Person (together with its Affiliates) may be so excluded at any time
and provided further that the Borrower may not change its Written Election
without giving the aforesaid Agents at least 5 Business Days’ prior written
notice of such change.



          “Environmental Claims” means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations (other than internal reports
prepared by the Borrower or any of its Subsidiaries solely in the ordinary
course of such Person’s business and not in response to any third party action
or request of any kind) or proceedings relating in any way to any Environmental
Law or any permit issued, or any approval given, under any such Environmental
Law (hereafter, “Claims”), including, without limitation, (a) any and all
Claims by governmental or regulatory authorities for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and (b) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials arising from alleged
injury or threat of injury to health, safety or the environment.



          “Environmental Law” means any applicable Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code and rule of common law now or
hereafter in effect







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and in each case as amended, and any binding judicial or administrative
interpretation thereof, including any binding judicial or administrative
order, consent decree or judgment, relating to the environment or Hazardous
Materials, including, without limitation, CERCLA; RCRA; the Federal Water
Pollution Control Act, as amended, 33 U.S.C. § 1251 et seq.; the Toxic
Substances Control Act, 15 U.S.C. § 7401 et seq.; the Clean Air Act, 42 U.S.C.
§ 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 3808 et seq.; the Oil
Pollution Act of 1990, 33 U.S.C. § 2701 et seq.; and any applicable state and
local or foreign counterparts or equivalents.


          “EP Percentage” shall mean in the case of (i) equity of the Borrower
issued to, or equity contributions to the Borrower made by, (A) Persons (or
controlling or controlled affiliates thereof) who were owners of the equity of
Holdings on the Initial Borrowing Date and/or are management personnel of the
Borrower and its Subsidiaries and/or (B) any Person (whether or not an
existing shareholder of the Borrower) the proceeds of which are to be utilized
solely for investments in privatizations, co-productions, Joint Ventures and
Foreign Subsidiaries, to make Permitted Acquisitions and/or to make Capital
Expenditures, 0% and (ii) all other equity issuances and equity contributions,
100%.



          “ERISA” shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at
the date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.



          “ERISA Affiliate” shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Borrower or a Subsidiary would be deemed to be
a “single employer” (i) within the meaning of Section 414(b), (c), (m) or (o)
of the Code or (ii) as a result of the Borrower or a Subsidiary being or
having been a general partner of such person.



          “Eurodollar Loans” shall mean each Loan bearing interest at the rates
provided in Section 1.08(b).



          “Eurodollar Rate” shall mean with respect to each Interest Period for a
Eurodollar Loan, the rate per annum obtained by dividing (and rounding upward
to the next whole multiple of 1/100 of 1%) (i) (a) the rate per annum (rounded
to the nearest 1/100 of 1%) equal to the rate determined by the Administrative
Agent to be the offered rate which appears on the page of the Telerate Screen
which displays an average British Bankers Association Interest Settlement Rate
(such page currently being page number 3740 or 3750, as applicable) for
deposits (for delivery on the first day of such period) with a term equivalent
to such period in Dollars, determined as of approximately 11:00 a.m. (London,
England time) on the date which is two Business Days prior to the commencement
of such Interest Period, or (b) in the event the rate referenced in the
preceding clause (a) does not appear on such page or service or if such page or
service shall cease to be available, the rate per annum (rounded to the nearest
1/100 of 1%) equal to the rate determined by the Administrative Agent to be the
offered rate on such other page or other service which displays an average
British Bankers Association Interest Settlement Rate for deposits (for delivery
on the first day of such period) with a term equivalent to such period in
Dollars, determined as of approximately 11:00 a.m. (London, England time) on
the date which is two Business Days prior to the commencement of such Interest
Period, or (c) in the event the rates







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referenced in the preceding clauses (a) and (b) are not available, the rate
per annum (rounded to the nearest 1/100 of 1%) equal to the offered quotation
rate to first class banks in the London interbank market by Administrative
Agent for deposits (for delivery on the first day of the relevant period) in
Dollars of amounts in same day funds comparable to the principal amount of the
applicable Loan of the Administrative Agent, in its capacity as a Lender, for
which the Eurodollar Rate is then being determined with maturities comparable
to such period as of approximately 11:00 a.m. (London, England time) on the
date which is two Business Days prior to the commencement of such Interest
Period, by (ii) an amount equal to (a) one minus (b) the Applicable Reserve
Requirement.


          “Event of Default” shall have the meaning provided in Section 9.



          “Excess Cash Flow” shall mean, for any period, the remainder of (i)
Adjusted Cash Flow for such period, plus (ii) to the extent not included in (i)
above, any amounts received by the Borrower and its Subsidiaries in settlement
of, or in payment of any judgments resulting from, actions, suits or
proceedings with respect to the Borrower and/or its Subsidiaries from the first
day to the last day of such period, minus (iii) the sum of (w) to the extent
deducted in determining Consolidated Net Income for such period, transaction
expenses related to the USMR Acquisition, (x) the amount of Consolidated
Capital Expenditures made in compliance with Section 8.05 during such period
(less any amount thereof financed through the incurrence of Indebtedness), (y)
any repayments or prepayments during such period of the principal amount of
Term Loans, except prepayments of the principal amount of Term Loans made
pursuant to Sections 4.02(A)(c), (d), (e), (f) and/or (g) and (z) the net
amount of investments, loans and advances made pursuant to Section 8.06
(including the expenditure by the Borrower of its cash on hand to effect the
USMR Acquisition) during such period (giving effect to any return on any such
investment, loan or advance) except to the extent made in reliance on clause
(ii) of the definition of Investment Basket.



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



          “Existing Indebtedness” shall mean and include Existing USMR Indebtedness
and Existing UDI Indebtedness.



          “Existing Joint Ventures and Investments” shall mean the Initial Joint
Ventures and Investments and the USMR JV.



          “Existing Letters of Credit” shall have the meaning provided in the
Original Credit Agreement.



          “Existing UDI Indebtedness” shall mean the Indebtedness listed on Annex
V, Part I hereto.



          “Existing USMR Indebtedness” shall mean Indebtedness of USMR and its
Subsidiaries that is outstanding on, and which is to continue outstanding
after, the Restatement Effective Date to the extent listed on Annex V, Part II
hereto.



          “Existing USMR Letters of Credit” shall mean each letter of credit set
forth on Annex X, Part II hereto.







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          “Extended Cut-Off Date” shall have the meaning provided in the Agreement
to Amend.



          “Facility” shall mean any of the credit facilities established under this
Agreement, i.e., the A Term Facility I, the A Term Facility II, the B Term
Facility I, the B Term Facility II and the Revolving Facility.



          “Facing Fee” shall have the meaning provided in Section
3.01(c).



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



          “Fees” shall mean all amounts payable pursuant to, or referred to in, Section
3.01.



          “Final Maturity Date” shall mean the ninth anniversary of the Initial
Borrowing Date.



          “FNSS” shall mean FMC Savunma Sistemleri A.S. and its successors.



          “Foreign Pension Plan” shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by the Borrower or any one or
more of its Subsidiaries primarily for the benefit of employees of the
Borrower or such Subsidiaries residing outside the United States of America,
which plan, fund or other similar program provides, or results in, retirement
income, a deferral of income in contemplation of retirement or payments to be
made upon termination of employment, and which plan is not subject to ERISA or
the Code.



          “Foreign Subsidiary” shall mean each Subsidiary of the Borrower which is
not incorporated or organized in the United States or any State or territory
thereof.



          “GAAP” shall mean generally accepted accounting principles in the United
States of America as in effect on the date of this Agreement; it being
understood and agreed that determinations in accordance with GAAP for purposes
of Section 8, including defined terms as used therein, are subject (to the
extent provided therein) to Section 12.07(a).



          “Hazardous Materials” means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that
contains, electric fluid containing levels of polychlorinated biphenyls, and
radon gas and (b) any chemicals, materials or substances defined as or included
in the definition of “hazardous substances,” “hazardous waste,” “hazardous
materials,” “extremely hazardous waste,” “restricted hazardous waste,” “toxic
substances,” “toxic






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pollutants,” “contaminants,” or “pollutants,” or words of similar import,
under any applicable Environmental Law,


          “Holdings” shall mean Iron Horse Investors, L.L.C., a Delaware limited
liability company.



          “Inactive Subsidiary” shall mean any Subsidiary of the Borrower that owns
(and continues to own) no assets (other than nominal assets, which shall not
include any partnership interest in UDLP) and is (and continues to be)
inactive.



          “Indebtedness” of any Person shall mean, without duplication, (i) all
indebtedness of such Person for borrowed money, (ii) other than to the extent
paid from previously funded escrow arrangements, the deferred purchase price
of assets or services which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person, (iii) the face amount of
all letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (iv) all Indebtedness of a second
Person secured by any Lien on any property owned by such first Person, whether
or not such indebtedness has been assumed (to the extent of the fair market
value of such property), (v) all Capitalized Lease Obligations of such Person,
(vi) all obligations of such Person to pay a specified purchase price for
goods or services whether or not delivered or accepted, i.e., take-or-pay and
similar obligations, (vii) all net obligations of such Person under Interest
Rate Agreements and (viii) all Contingent Obligations of such Person, (other
than Contingent Obligations arising from the guaranty by such Person of the
obligations of the Borrower and/or its Subsidiaries to the extent such
guaranteed obligations do not constitute Indebtedness and are otherwise
permitted hereunder), provided that Indebtedness shall not include trade
payables, accrued expenses and receipt of progress and advance payments, in
each case arising in the ordinary course of business.



          “Initial Borrowing Date” shall mean August 13, 2001.



          “Initial Existing Joint Ventures and Investments” shall mean each of
FNSS, United Defense Systems Ltd. and Omnitech Robotics, LLC.



          “Interest Period” with respect to any Loan shall mean the interest period
applicable thereto, as determined pursuant to Section 1.09.



          “Interest Rate Agreement” shall mean any interest rate swap agreement,
any interest rate cap agreement, any interest rate collar agreement or other
similar agreement or arrangement designed to protect the Borrower or any
Subsidiary against fluctuations in interest rates.



          “Investment Basket” shall mean at any time the greater of (x) $60,000,000
and (y) the sum of (i) $60,000,000 plus (ii) 25% (or, if the Leverage Ratio on
the last day of such fiscal year is less than 3.0:1.0, 50%) of aggregate Excess
Cash Flow for each period (an “ECF Period”) then ended for which Excess Cash
Flow had been, at the time, determined for purposes of Section 4.02(A)(f) and
as to which at least 120 days have passed since the end of such period plus
(iii) 25% (or if the Leverage Ratio on the last day of such fiscal year is less
than 3.0:1.0, 50%) of aggregate Deemed ECF for each ECF Period plus (iv) if the
Leverage Ratio at the end of the last Test Period then ended was less than
3.0:1.0, $50,000,000.







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          “Investments” shall have the meaning provided in Section 8.06(j).



          “Joint Venture” means any Person formed for the purpose of exploiting
business opportunities to the extent, in the case of any Person organized or
created under the laws of the United States or any State thereof, less than
80% of the ownership interests therein are owned directly and indirectly by
the Borrower, and shall include in any event the Existing Joint Ventures and
Investments to the extent the Borrower continues to own directly and
indirectly less than 80% of the ownership interest therein.



          “Leasehold” of any Person means all of the right, title and interest of
such Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.



          “Lender” shall have the meaning provided in the first paragraph of this
Agreement.



          “Lender Default” shall mean (i) the refusal (which has not been
retracted) of a Lender to make available its portion of any incurrence of
Loans or to fund its portion of any unreimbursed payment under Section 2.04(c)
or (ii) a Lender having notified the Administrative Agent and/or the Borrower
that it does not intend to comply with the obligations under Section 1.01 or
under Section 2.04(c), in the case of either clause (i) or (ii) as a result of
the appointment of a receiver or conservator with respect to such Lender at
the direction or request of any regulatory agency or authority.



          “Lender Register” shall have the meaning provided in Section
12.16.



          “Letter of Credit” shall have the meaning provided in
Section 2.01 (a).



          “Letter of Credit Fee” shall have the meaning
provided in Section 3.01(b).



          “Letter of Credit Issuer” shall mean (i) DBTC or any of its affiliates,
including but not limited to Deutsche Bank AG, New York Branch, (ii) with
respect to each Existing Letter of Credit [and Existing USMR Letter of
Credit], the Lender issuing same and (iii) any Lender which at the request of
the Borrower and with the consent of the Administrative Agent (such consent
not to be unreasonably withheld) agrees in such Lender’s sole discretion to
become a Letter of Credit issuer for the purpose of issuing Letters of Credit
pursuant to Section 2.



          “Letter of Credit Outstandings” shall mean, at any time, the sum of,
without duplication, (i) the aggregate Stated Amount of all outstanding
Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings.



          “Letter of Credit Request” shall have the meaning provided in
Section 2.02(a).



          “Leverage Ratio” shall mean, at any date of determination, the ratio of
(x) the sum of (i) Consolidated Debt on such date less the outstanding
principal amount of Revolving Loans on such date included in Consolidated Debt
plus (ii) the Average Daily Amount of Revolving Loans for the Test Period ended
on such date to (y) Pro Forma Consolidated EBITDA for the Test Period ending on
such date.







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          “Lien” shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement or any
lease in the nature thereof).



          “Loan” shall have the meaning provided in Section 1.01.



          “Management Agreement” shall mean the management agreement with Carlyle
and/or Carlyle Affiliates, as in effect on the Initial Borrowing Date.



          “Mandatory Borrowing” shall have the meaning provided in Section
1.01(e).



          “Margin Reduction Discount” shall mean zero, provided that the Margin
Reduction Discount shall be increased to .25%, .50%, .75%, 1.0%, 1.25% or
1.50% per annum as the case may be, as specified in clause (i), (ii), (iii),
(iv), (v), (vi) or (vii) below, at any time after the Restatement Effective
Date, when, and for so long as, the ratio set forth in such clause has been
satisfied as at the end of the then Relevant Test Periods:



          (i) the Margin Reduction Discount shall be .25% per annum in the event
that as of the end of the Relevant Test Period the Leverage Ratio is equal to
or greater than 2.50 to 1 but less than 3.00 to 1; or



          (ii) the Margin Reduction Discount shall be .50% per annum in the event
that as of the end of the Relevant Test Period the Leverage Ratio is less than
2.50 to 1 and equal to or greater than 2.25 to 1;



          (iii) the Margin Reduction Discount shall be .75% per annum in the event
that as of the end of the Relevant Test Period the Leverage Ratio is equal to
greater than 2.00 to 1 but less than 2.25 to 1;



          (iv) the Margin Reduction Discount for B Term Loans shall be .75% per
annum in the event that as of the end of the Relevant Test Period the Leverage
Ratio is less than 2.00 to 1;



          (v) the Margin Reduction Discount for A Term Loans and Revolving Loans
shall be 1.0% per annum in the event that as of the end of the Relevant Test
Period the Leverage Ratio is equal to or greater than 1.75 to 1 but less than
2.00 to 1;



          (vi) the Margin Reduction Discount for A Term Loans and Revolving Loans
shall be 1.25% per annum in the event that as of the end of the Relevant Test
Period the Leverage Ratio is equal to or greater than 1.50 to 1 but less than
1.75 to 1; and



          (vii) the Margin Reduction Discount for A Term Loans and Revolving Loans
shall be 1.50% per annum in the event that as of the end of the Relevant Test
Period the Leverage Ratio is less than 1.50 to 1.



The Leverage Ratio shall be determined for the Relevant Test Period, by
delivery of an officer’s certificate of the Borrower to the Lenders pursuant to
Section 7.01(e), which certificate shall set forth the calculation of the
Leverage Ratio. The Margin Reduction Discount so determined shall


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apply, except as set forth below, from the date on which such officer’s
certificate is delivered to the Administrative Agent to the earlier of (x) the
date on which the next certificate is delivered to the Administrative Agent
pursuant to Section 7.0 l(e) and (y) the 45th day following the end of the
fiscal quarter in which such first certificate was delivered to the
Administrative Agent (or the 90th day if such fiscal quarter was the last
fiscal quarter of a fiscal year). Notwithstanding anything to the contrary
contained above, the Margin Reduction Discount shall be zero (x) if no
officer’s certificate has been delivered to the Lenders pursuant to Section
7.01 (e) which sets forth the Leverage Ratio for the Relevant Test Period or
the financial statements upon which any such calculations are based have not
been delivered, until such a certificate and/or financial statements are
delivered and (y) at all times when there shall exist a Default under Section
9.01 or an Event of Default. It is understood and agreed that the Margin
Reduction Discount as provided above shall in no event be cumulative and only
the Margin Reduction Discount available pursuant to any of clause (i), (ii),
(iii) or (iv) if any, contained in this definition shall be applicable.


          “Margin Stock” shall have the meaning provided in Regulation U.



          “Material Adverse Effect” shall mean a material adverse effect on the
business, property, assets, liabilities or financial condition of the Borrower
and its Subsidiaries taken as a whole (with the base line of such
determination to be after giving effect to the cancellation of the Crusader
program).



          “Material Subsidiary” shall mean any Subsidiary having gross assets at
any time with a value of at least 5% of consolidated gross assets of the
Borrower and its Subsidiaries and/or gross revenues for the last four fiscal
quarters of at least 5% of the consolidated gross revenues of the Borrower and
its Subsidiaries.



          “Maximum Swingline Amount” shall mean the lesser of $25,000,000 and the
amount of the Total Revolving Commitment.



          “Minimum Borrowing Amount” shall mean (i) for Term Loans, Revolving Loans
and Swingline Loans maintained as Base Rate Loans, $250,000 and (ii) for Term
Loans and Revolving Loans maintained as Eurodollar Loans, $1,000,000.



          “Modified Investment Basket” shall mean the Investment Basket determined
as if the two references therein to “$60,000,000” were references to
“$30,000,000”.



          “Modified Leverage Ratio” shall mean, at any date on which a Dividend is
paid pursuant to Section 8.09(a)(iii), the ratio of (x) the sum of (i)
Consolidated Debt on such date less the outstanding principal amount of
Revolving Loans on such date included in Consolidated Debt plus (ii) the
Average Daily Amount of Revolving Loans for the period commencing on the first
day of the Test Period then or last ended and ending on such date to (y) Pro
Forma Consolidated EBITDA for the Test Period then or last ended.



          “Mortgage” shall have the meaning provided in the Original Credit
Agreement.



          “Mortgage Policies” shall have the meaning provided in the Original
Credit Agreement.







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          “Mortgaged Property” shall mean each Real Property of the Borrower and/or
any Subsidiary subjected to a Mortgage pursuant to the Original Credit
Agreement or pursuant to Section 7.10 hereof.



          “Multiemployer Plan” shall mean any multiemployer plan as defined in
section 4001(a)(3) of ERISA which is contributed to by (or to which there is
an obligation to contribute of) the Borrower or any of its Subsidiaries or an
ERISA Affiliate and each such plan for the five year period immediately
following the latest date on which the Borrower, any such Subsidiary or ERISA
Affiliate contributed to or had an obligation to contribute to such plan.



          “Net Acquisition Expenditure” shall mean, at any time, (A) the aggregate
Acquisition Expenditures then expended less (B) the sum of (i) the net cash
proceeds received from the sale by the Borrower or any Subsidiary Guarantor of
any assets or businesses acquired pursuant to Permitted Acquisitions effected
under Section 8.060(j) and (ii) the aggregate Adjusted Cash Flow to date that is
attributable to the assets and businesses acquired pursuant to Permitted
Acquisitions effected under Section 8.06(j) to the extent not included in a
determination of the amount specified in clause (ii) of the definition of
Investment Basket, with all amounts included in clauses (A) and (B) to be set
forth in a certificate of the Borrower in substance and in detail reasonably
satisfactory to the Administrative Agent that is delivered to the
Administrative Agent prior to the making of a Permitted Acquisition.



          “Net Cash Proceeds” shall mean, with respect to any Asset Sale, the Cash
Proceeds resulting therefrom net (without duplication) of expenses of sale
(including payment of principal, premium and interest of Indebtedness secured
by the assets the subject of the Asset Sale and required to be, and which is,
repaid under the terms thereof as a result of such Asset Sale), and incremental
taxes paid or payable as a result thereof and other amounts owing to
governmental entities as a result of such sale.



          “Non-Defaulting Lender” shall mean a Lender that is not a
Defaulting Lender.



          “Norshipco” shall mean Norfolk Shipbuilding & Drydock Corporation, a
Virginia corporation.



          “Note” shall mean and include each A Term Note, each A Term Note II, each
B Term Note, each B Term Note II, each Revolving Note and the Swingline Note.



          “Notice” shall have the meaning provided in Section 7.14.



          “Notice of Borrowing” shall have the meaning provided in Section
1.03.



          “Notice of Conversion” shall have the meaning provided in Section
1.06.



          “Notice Office” shall mean the office of the Administrative Agent at 90
Hudson Street, Jersey City, New Jersey 07302 or such other office as the
Administrative Agent may designate to the Borrower in writing from time to
time.







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          “Obligations” shall mean all amounts, direct or indirect, contingent or
absolute, of every type or description, and at any time existing, owing to any
Agent, the Collateral Agent or any Lender pursuant to the terms of this
Agreement or any other Credit Document.



          “OCA Letter of Credit” shall have the meaning provided in Section
2.01.



          “Original Credit Agreement” shall mean the Credit Agreement, dated as of
August 31, 2001, among, inter alia, the Borrower, various lending
institutions, Citicorp USA, Inc., The Bank of Nova Scotia and Credit Lyonnais
New York Bank, as Documentation Agents, Lehman Commercial Paper, Inc., as
Syndication Agent, and DBTC, as Administrative Agent, as the same has been
amended, modified and/or supplemented on or prior to the Restatement Effective
Date.



          “Original Cumulative Net Income” shall mean, at any time, Consolidated
Net Income for the period (taken as one accounting period) commencing on
October 1, 2001 and ending on the last day of the last fiscal quarter then
ended.



          “Participant” shall have the meaning provided in Section 2.04(a).



          “Passive Investor” shall mean a mutual fund or other entity that invests
in corporations and/or other companies to the extent that any such fund or
entity is not engaged in the active management of any such corporation or
company, provided that, if such fund or entity has not made prior investments,
such fund or entity shall be deemed engaged in such active management to the
extent its parent company is so engaged.



          “Payment Office” shall mean the office of the Administrative Agent at 90
Hudson Street, Jersey City, New Jersey 07302 or such other office as the
Administrative Agent may designate to the Borrower in writing from time to
time.



          “PBGC” shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.



          “Permitted Acquisition” shall mean the acquisition by the Borrower or a
Subsidiary Guarantor of assets from, or no less than 85% of the equity
interests in, a Person or Persons engaged in the Business provided that the
Borrower shall be in compliance on a pro forma basis with all the covenants
contained in this Agreement after giving effect to each such acquisition, it
being agreed that the USMR Acquisition shall not constitute a Permitted
Acquisition.



          “Permitted Liens” shall mean Liens described in Section 8.03.



          “Person” shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.



          “Plan” shall mean any pension plan as defined in Section 3(2) of ERISA
(other than a multiemployer plan as defined in Section 3(37) of ERISA), which
is maintained or contributed to by (or to which there is an obligation to
contribute of) the Borrower or any of its




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Subsidiaries or an ERISA Affiliate, and each such plan for the five year
period immediately following the latest date on which the Borrower, any such
Subsidiary or an ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan.


          “Pledge Agreement” shall mean a Pledge Agreement substantially in the
form of Exhibit E hereto as the same may be amended, modified or supplemented
from time to time.



          “Pledged Securities” shall mean all the Pledged Securities as defined in
the Pledge Agreement.



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



          “Pro Forma Consolidated EBITDA” shall mean (i) for any Test Period ending
one year or more after the Restatement Effective Date, Consolidated EBITDA and
(ii) for any prior Test Period, Consolidated EBITDA for such period determined
on the basis that the USMR Acquisition had been consummated immediately prior
to the commencement of such Test Period, provided that such Consolidated
EBITDA shall be determined without any reduction attributable to non-recurring
management fees and executive compensation paid by USMR for services rendered
prior to the Restatement Effective Date.



          “RCRA” shall mean the Resource Conservation and Recovery Act, as amended,
42 U.S.C. §6901 et seq.



          “Real Property” of any Person shall mean all of the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.



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



          “Regulation U” shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing margin requirements.



          “Reinvestment Assets” shall mean any assets to be employed in the business
of the Borrower and its Subsidiaries as described in Section 8.01.



          “Reinvestment Election” shall have the meaning provided in Section
4.02(A)(c).



          “Reinvestment Notice” shall mean a written notice signed by an Authorized
Officer of the Borrower stating that the Borrower, in good faith, intends and
expects to use all or a specified portion of the Net Cash Proceeds of an Asset
Sale to purchase, construct or otherwise acquire Reinvestment Assets.







-69-






 





          “Reinvestment Prepayment Amount” shall mean, with respect to any
Reinvestment Election, the amount, if any, on the Reinvestment Prepayment Date
relating thereto by which (a) the Anticipated Reinvestment Amount in respect
of such Reinvestment Election exceeds (b) the aggregate amount thereof
expended by the Borrower and its Subsidiaries to acquire Reinvestment Assets.



          “Reinvestment Prepayment Date” shall mean, with respect to any
Reinvestment Election, the earliest of (i) the date, if any, upon which the
Administrative Agent, on behalf of the Required Lenders, shall have delivered
a written termination notice to the Borrower, provided that such notice may
only be given while an Event of Default under 9.01 exists, (ii) the date
occurring 360 days after such Reinvestment Election and (iii) the date on
which the Borrower shall have determined not to proceed with the purchase,
construction or other acquisition of Reinvestment Assets with the related
Anticipated Reinvestment Amount.



          “Related Funds” shall mean any entities that invest in loans and are
managed and/or advised by the same investment advisor.



          “Relevant Test Period” shall mean, at any time, the Test Period ending on
the last day of the then most recently ended fiscal quarter of the Borrower
with respect to which an officer’s certificate has been delivered to the
Lenders pursuant to Section 7.01 (e).



          “Replaced Lender” shall have the meaning provided in Section 1.13.



          “Replacement A Term Loans” and “Replacement B Term Loans” shall have the
meanings provided in the Agreement to Amend.



          “Replacement Lender” shall have the meaning provided in Section
1.13.



          “Reportable Event” shall mean an event described in Section 4043 (c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under
subsection  .22, .23, .25, .27 or .28 of PBGC
Regulation  Section 4043.



          “Required Lenders” shall mean Non-Defaulting Lenders the outstanding
principal amount of Term Loans of which plus the Revolving Commitments (or, if
the Total Revolving Commitment has been terminated, the Revolving Commitments
immediately prior to such termination) of which constitute greater than 50% of
the sum of the total outstanding principal amount of Term Loans and of the
Revolving Commitments (or, if the Total Revolving Commitment has been
terminated, the Revolving Commitments immediately prior to such termination)
of all Non-Defaulting Lenders.



          “Required TF Lenders” with respect to the A Term Loans or the B Term
Loans, respectively, shall mean Lenders the sum of whose outstanding A Term
Loans or B Term Loans, as the case may be, represents an amount greater than
50% of the sum of all outstanding A Term Loans or B Term Loans, as the case may
be.



          “Restatement Effective Date” shall have the meaning provided in the
Agreement to Amend.







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          “Revolving Commitment” shall mean, with respect to each Lender, the
amount set forth opposite such Lender’s name in Annex I hereto directly below
the column entitled “Revolving Commitment” as the same may be (x) reduced or
terminated from time to time pursuant to Section 3.02, 3.03 and/or 9 or (y)
adjusted from time to time as a result of assignments to or from such Lender
pursuant to Section 1.13 and/or 12.04.



          “Revolving Facility” shall mean the Facility evidenced by the Total
Revolving Commitment.



          “Revolving Loan” shall have the meaning provided in Section 1.01(c).



          “Revolving
Note” shall have the meaning provided in the Original Credit Agreement.



          “RF Lender” shall mean at any time each Lender with a Revolving
Commitment or with outstanding Revolving Loans.



          “RF Percentage” shall mean at any time for each RF Lender, the percentage
obtained by dividing such Lender’s Revolving Commitment by the Total Revolving
Commitment provided that if the Total Revolving Commitment has been terminated,
the RF Percentage of each RF Lender shall be determined by dividing such RF
Lender’s Revolving Commitment immediately prior to such termination by the
Total Revolving Commitment immediately prior to such termination.



          “Scheduled Repayment” shall have the meaning provided in Section
4.02(A)(b).



          “SEC” shall have the meaning provided in Section
7.01(h).



          “SEC Regulation D” shall mean Regulation D as promulgated under the
Securities Act of 1933, as amended, as the same may be in effect from time to
time.



          “Section 4.04 Certificate” shall have the meaning provided in
Section 4.04(b)(ii).



          “Secured Creditor” shall mean and include any Secured Creditor as defined
in any Security Document.



          “Security Agreement” shall mean a Security Agreement substantially in the
form of Exhibit F hereto as the same may be amended, modified or supplemented
from time to time.



          “Security Agreement Collateral” shall mean all “Collateral” as defined in
the Security Agreement.



          “Security Documents” shall mean the Pledge Agreement, the Security
Agreement, each Mortgage and each Additional Mortgage, if any.



          “Special Dividend” shall have the meaning provided in the Original Credit
Agreement.







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          “Specified Repayment” shall have the meaning provided in Section
4.02(B)(c).



          “Standby Letter of Credit” shall have the meaning
provided in Section 2.01 (a).



          “Stated Amount” of each Letter of Credit shall mean the maximum available
to be drawn thereunder (regardless of whether any conditions for drawing could
then be met).



          “Subsidiary” of any Person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person directly
or indirectly through Subsidiaries and (ii) any partnership, association,
joint venture or other entity in which such Person directly or indirectly
through Subsidiaries, has more than a 50% equity interest at the time,
provided that “Subsidiary” shall in no event include any Joint Venture or any
Foreign Subsidiary. Unless otherwise expressly provided, all references herein
to “Subsidiary” shall mean a Subsidiary of the Borrower.



          “Subsidiary Guarantors” shall mean each Domestic Subsidiary other than
Inactive Subsidiaries.



          “Subsidiary Guaranty” shall mean a Subsidiary Guaranty substantially in
the form of Exhibit D hereto as the same may be amended, modified or
supplemented from time to time.



          “Supermajority Lenders” shall mean Non-Defaulting Lenders the outstanding
principal amount of Term Loans of which plus the Revolving Commitments (or, if
the Total Revolving Commitment has been terminated, the Revolving Commitments
immediately prior to such termination) of which constitute greater than 75% of
the sum of the total outstanding principal amount of Term Loans and of the
Revolving Commitments (or, if the Total Revolving Commitment has been
terminated, the Revolving Commitments immediately prior to such termination)
of all Non-Defaulting Lenders.



          “Swingline Expiry Date” shall mean the date which is five Business Days
prior to the A/RF Maturity Date.



          “Swingline Lender” shall mean DBTC or, in the event DBTC ceases to be
Swingline Lender upon agreement with the Borrower, any Lender which at the
request of the Borrower and the consent of the Administrative Agent agrees in
such Lender’s sole discretion to become the Swingline Lender.



          “Swingline Loan” shall have the meaning provided in Section
1.01(e).



          “Swingline Note” shall have the meaning provided in the
Original Credit
Agreement.



          “Syndication
Date” shall mean the earlier of (x) the 60th day following
the Restatement Effective Date and (y) the date upon which the Co-Lead
Arrangers determine in their sole discretion (and notify the Borrower) that the
primary syndication of the Additional







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Term Loans (and the resultant addition of Persons as Lenders pursuant to
Section 12.04) has been completed.


          “Taxes” shall have the meaning provided in Section 4.04(a).



          “Term Loans” shall mean, collectively, the A Term Loans and the B
Term Loans.



          “Test Period” shall mean at any time the four consecutive fiscal quarters
of the Borrower (taken as one accounting period) then ending or then last
ended.



          “Total ECF” at any time shall mean the Excess Cash Flow for the period
commencing on July 1, 2002 and ending on the last day of the last Test Period
then ended (taken as one accounting period) determined by reducing any
subtraction effected pursuant to clause (ii)(y) of the definition thereof by
the Deemed ECF during such period.



          “Total Revolving Commitment” shall mean the sum of the Revolving
Commitments of each of the Lenders.



          “Total Unutilized Revolving Commitment” shall mean, at any time, (i) the
Total Revolving Commitment at such time less (ii) the sum of the aggregate
principal amount of all Revolving Loans and Swingline Loans plus the Letter of
Credit Outstandings at such time.



          “Trade Letter of Credit” shall have the meaning provided in Section
2.01 (a).



          “Transaction” shall mean (i) the consummation of the USMR Acquisition and
the repayment of Indebtedness of USMR outstanding at the time of such
consummation (other than Existing USMR Indebtedness), (ii) the entering into
of the Agreement to Amend and (iii) the incurrence of Additional Term Loans on
the Restatement Effective Date.



          “Type” shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or Eurodollar Loan.



          “UCC” shall mean the Uniform Commercial Code.



          “UDLP” shall mean United Defense, L.P., a Delaware limited
partnership.



          “Unfunded Current Liability” of any Plan shall mean the amount, if any,
by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year, determined in
accordance with actuarial assumptions at such time consistent with Statement
of Financial Accounting Standards No. 87, exceeds the market value of the
assets allocable thereto.



          “Unpaid Drawing” shall have the meaning provided in Section 2.03.



          “Unutilized Revolving Commitment” for any RF Lender at any time shall mean
the excess of (i) the Revolving Commitment of such Lender over (ii) the sum of
(x) the aggregate outstanding principal amount of Revolving Loans and Swingline
Loans made by such







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Lender plus (y) an amount equal to such Lender’s Adjusted RF Percentage of the
Letter of Credit Outstandings at such time.


          “U.S.” shall mean the United States of America.



          “USMR” shall mean United States Marine Repair, Inc., a Delaware
corporation.



          “USMR Acquisition” shall have the meaning provided in the Agreement to
Amend.



          “USMR JV” shall mean Southhampton Roads Equipment Rental, L.P.



          “USMR Mortgaged Property” shall mean each of the Real Properties listed
on Annex IV, Part II.



          “Wholly-Owned Subsidiary” of any Person shall mean any Subsidiary of such
Person to the extent all of the capital stock or other ownership interests in
such Subsidiary, other than directors’ qualifying shares, is owned directly or
indirectly by such Person.



          “Written” or “in writing” shall mean any form of written communication or
a communication by means of telex, facsimile transmission, telegraph or cable.



          SECTION 11. The Agent.



          11.01 Appointment. The Lenders hereby designate DBTC as Administrative
Agent (for purposes of this Section 11, the terms “Administrative Agent”
shall include BTCo in
its capacity as Administrative Agent pursuant to this Agreement and as
Collateral Agent
pursuant to the Security Documents) to act as specified herein and in the
other Credit
Documents. The Lenders hereby designate Lehman Commercial Paper Inc. as
Syndication
Agent to act as specified herein and in the other Credit Documents. Each
Lender hereby
irrevocably authorizes, and each holder of any Note by the acceptance of
such Note shall be
deemed irrevocably to authorize, any Agent (other than the Documentation
Agents) to take such
action on its behalf under the provisions of this Agreement, the other
Credit Documents and any
other instruments and agreements referred to herein or therein and to
exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated
to or required of each
Agent (other than the Documentation Agents) by the terms hereof and
thereof and such other
powers as are reasonably incidental thereto. Each Agent may perform any
of their duties
hereunder by or through their respective officers, directors, agents,
employees or affiliates.
Deutsche Bank Securities Inc. and Lehman Brothers Inc. shall have acted as
Co-Lead Arrangers
in connection with initial syndication of this Agreement and shall have no
further duties
hereunder.



          11.02 Nature of Duties. The Agents shall not have any duties or
responsibilities
except those expressly set forth in this Agreement and the Security
Documents, if any. No Agent
nor any of its respective officers, directors, agents, employees or
affiliates shall be liable for any
action taken or omitted by them hereunder or under any other Credit
Document or in connection
herewith or therewith, unless caused by their gross negligence or willful
misconduct. The duties
of the Agents, if any, shall be mechanical and administrative in nature;
the Agents shall not have







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by reason of this Agreement or any other Credit Document a fiduciary
relationship in respect of any Lender or the holder of any Note; and nothing
in this Agreement or any other Credit Document, expressed or implied, is
intended to or shall be so construed as to impose upon the Agents any
obligations in respect of this Agreement or any other Credit Document except
as expressly set forth herein or therein.


          11.03 Lack of Reliance on the Agents. Independently and without reliance
upon
the Agents, each Lender and the holder of each Note, to the extent it
deems appropriate, has
made and shall continue to make (i) its own independent investigation of
the financial condition
and affairs of the Borrower and its Subsidiaries in connection with the
making and the
continuance of the Loans and the taking or not taking of any action in
connection herewith and
(ii) its own appraisal of the creditworthiness of the Borrower and its
Subsidiaries and, except as
expressly provided in this Agreement, the Agents shall not have any duty
or responsibility, either
initially or on a continuing basis, to provide any Lender or the holder of
any Note with any credit
or other information with respect thereto, whether coming into its
possession before the making
of the Loans or at any time or times thereafter. The Agents shall not be
responsible to any
Lender or the holder of any Note for any recitals, statements,
information, representations or
warranties herein or in any document, certificate or other writing
delivered in connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of this Agreement or any other Credit
Document or the financial
condition of the Borrower and its Subsidiaries or be required to make any
inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Agreement or any other Credit Document, or the financial condition of the
Borrower and its
Subsidiaries or the existence or possible existence of any Default or
Event of Default.



          11.04 Certain Rights of the Agents. If the Agents shall request
instructions from
the Required Lenders with respect to any act or action (including failure
to act) in connection
with this Agreement or any other Credit Document, the Agents shall be
entitled to refrain from
such act or taking such action unless and until the Agents shall have
received instructions from
the Required Lenders; and the Agents shall not incur liability to any
Person by reason of so refraining. Without limiting the foregoing, neither any Lender nor the
holder of any Note shall
have any right of action whatsoever against the Agents as a result of the
Agents acting or refraining from acting hereunder or under any other Credit Document in accordance
with the
instructions of the Required Lenders.



          11.05 Reliance. Each of the Agents shall be entitled to rely, and shall be
fully
protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex,
teletype, facsimile or telecopier message, cablegram, radiogram, order or
other document or
telephone message signed, sent or made by any Person that such Agent
believed to be the proper
Person, and, with respect to all legal matters pertaining to this
Agreement and any other Credit
Document and its duties hereunder and thereunder, upon advice of counsel
selected by such
Agent.



          11.06 Indemnification. To the extent the Agents are not reimbursed and
indemnified by the Borrower, each Defaulting Lender (to the extent so able) and
the Non-Defaulting
Lenders will reimburse and indemnify the Agents, in proportion to their
respective Loans and
Commitments, for and against any and all liabilities, obligations, losses,
damages, penalties,




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claims, actions, judgments, costs, expenses or disbursements of whatsoever
kind or nature which may be imposed on, asserted against or incurred by the
Agents in performing their respective duties hereunder or under any other
Credit Document, in any way relating to or arising out of this Agreement or
any other Credit Document; provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the gross
negligence or willful misconduct of any Agent.


          11.07 The Agents in Their Individual Capacity. With respect to its
obligation to
make Loans under this Agreement, the Agents shall have the rights and
powers specified herein
for a “Lender” and may exercise the same rights and powers as though it
were not performing
the duties specified herein; and the term “Lenders,” “Required Lenders,”
“holders of Notes” or
any similar terms shall, unless the context clearly otherwise indicates,
include the Agents in their
individual capacity. The Agents may accept deposits from, lend money to,
and generally engage
in any kind of banking, trust or other business with any Credit Party or
any Affiliate of any
Credit Party as if it were not performing the duties specified herein, and
may accept fees and
other consideration from the Borrower, or any other Credit Party for
services in connection with
this Agreement and otherwise without having to account for the same to the
Lenders.



          11.08 Holders. The Administrative Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a
written notice of the
assignment, transfer or endorsement thereof, as the case may be, shall
have been filed with the
Administrative Agent. Any request, authority or consent of any Person
who, at the time of
making such request or giving such authority or consent, is the holder of
any Note shall be
conclusive and binding on any subsequent holder, transferee, assignee or
indorsee, as the case
may be, of such Note or of any Note or Notes issued in exchange therefor.



          11.09 Resignation by the Administrative Agent. (a) The Administrative
Agent may resign from the performance of all its functions and duties
hereunder and/or under the other Credit Documents at any time by giving 15
Business Days’ prior written notice to the Borrower and the Lenders. Such
resignation shall take effect upon the appointment of a successor
Administrative Agent pursuant to clauses (b) and (c) below or as otherwise
provided below.



          (b) Upon any such notice of resignation, the Required Lenders shall
appoint a
successor Administrative Agent hereunder or thereunder who shall be a
commercial bank or trust
company reasonably acceptable to the Borrower.



          (c) If a successor Administrative Agent shall not have been so appointed
within
such 15 Business Day period, the Administrative Agent, with the consent of
the Borrower, shall
then appoint a successor Administrative Agent who shall serve as
Administrative Agent
hereunder or thereunder until such time, if any, as the Required Lenders
appoint a successor
Administrative Agent as provided above.



          (d) If no successor Administrative Agent has been appointed pursuant to
clause
(b) or (c) above by the 30th Business Day after the date such notice of
resignation was given by
the Administrative Agent, the Administrative Agent’s resignation shall
become effective and the
Required Lenders shall thereafter perform all the duties of the
Administrative Agent hereunder




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and/or under any other Credit Document until such time, if any, as the
Required Lenders appoint a successor Administrative Agent as provided above.


          SECTION 12. Miscellaneous.



          12.01 Payment of Expenses, etc. The Borrower agrees to: (i) whether or not
the
transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and
expenses of the Administrative Agent in connection with the negotiation,
preparation, execution
and delivery of the Credit Documents and the documents and instruments
referred to therein and
any amendment, waiver or consent relating thereto (including, without
limitation, the reasonable
fees and disbursements of White & Case LLP, counsel for the Administrative
Agent) and of the
Agents and each of the Lenders in connection with the enforcement of the
Credit Documents and
the documents and instruments referred to therein (including, without
limitation, the reasonable
fees and disbursements of counsel for the Agents and for each of the
Lenders, provided that,
except in the case of a bankruptcy of any Credit Party, no more than one
counsel for the Agents
and the Lenders may be used in any jurisdiction); (ii) pay and hold each
of the Lenders harmless
from and against any and all present and future stamp and other similar
taxes with respect to the
foregoing matters and save each of the Lenders harmless from and against
any and all liabilities
with respect to or resulting from any delay or omission (other than to the
extent attributable to
such Lender) to pay such taxes; and (iii) indemnify each Lender (including
in its capacity as
Agent or Letter of Credit Issuer), its officers, directors, employees,
representatives and agents
from and hold each of them harmless against any and all losses,
liabilities, claims, damages or
expenses incurred by any of them as a result of, or arising out of, or in
any way related to, or by
reason of, (a) any investigation, litigation or other proceeding (whether
or not the Agents or any
Lender is a party thereto and whether or not any such investigation,
litigation or other proceeding
is between or among the Agents, any Lender, any Credit Party or any third
Person or otherwise)
related to the entering into and/or performance of any Document or the use
of the proceeds of
any Loans hereunder or the Transaction or the consummation of any
transactions contemplated
in any Credit Document, or (b) the actual or alleged presence of Hazardous
Materials in the air,
surface water or groundwater or on the surface or subsurface of any Real
Property owned or at
any time operated by the Borrower or any of its Subsidiaries, the release,
generation, storage,
transportation, handling or disposal of Hazardous Materials at any
location, whether or not
owned or operated by the Borrower or any of its Subsidiaries, the
non-compliance of any Real
Property with foreign, federal, state and local laws, regulations, and
ordinances (including
applicable permits thereunder) applicable to any Real Property, or any
Environmental Claim
asserted against the Borrower, any of its Subsidiaries or any Real
Property owned or at any time
operated by the Borrower or any of its Subsidiaries, including, in each
case, without limitation,
the reasonable fees and disbursements of counsel incurred in connection
with any such
investigation, litigation or other proceeding (but excluding any such
losses, liabilities, claims,
damages or expenses to the extent incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified or of any other Indemnitee who is
such Person or an
affiliate of such Person).



          12.02 Right of Setoff. In addition to any rights now or hereafter granted
under
applicable law or otherwise, and not by way of limitation of any such
rights, if an Event of
Default then exists, each Lender is hereby authorized at any time or from
time to time, without
presentment, demand, protest or other notice of any kind to any Credit
Party or to any other




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Person, any such notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special but not trust
accounts) and any other Indebtedness at any time held or owing by such Lender
(including, without limitation, by branches and agencies of such Lender
wherever located) to or for the credit or the account of any Credit Party
against and on account of the Obligations and liabilities of such Credit Party
to such Lender under this Agreement or under any of the other Credit
Documents, including, without limitation, all interests in Obligations of
such. Credit Party purchased by such Lender pursuant to Section 12.06(b), and
all other claims of any nature or description arising out of or connected with
this Agreement or any other Credit Document, irrespective of whether or not
such Lender shall have made any demand hereunder and although said
Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.


          12.03 Notices. Except as otherwise expressly provided herein, all notices
and
other communications provided for hereunder shall be in writing (including
telegraphic, telex,
telecopier, facsimile or cable communication) and mailed, telegraphed,
telexed, telecopied,
faxed, cabled or delivered, if to a Credit Party, at the address specified
opposite its signature
below or in the other relevant Credit Documents, as the case may be; if to
any Lender, at its
address specified for such Lender on Annex II hereto; or, at such other
address as shall be
designated by any party in a written notice to the other parties hereto.
All such notices and
communications shall be mailed, telegraphed, telexed, telecopied, or
cabled or sent by overnight
courier, and shall be effective when received.



          12.04 Benefit of Agreement. (a) This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors
and assigns of the parties
hereto, provided that the Borrower may not assign or transfer any of its
rights or obligations
hereunder without the prior written consent of the Lenders. Each Lender
may at any time grant
participations in any of its rights hereunder or under any of the Notes to
another financial
institution, provided that in the case of any such participation, the
participant shall not have any
rights under this Agreement or any of the other Credit Documents (the
participant’s rights against
such Lender in respect of such participation to be those set forth in the
agreement executed by
such Lender in favor of the participant relating thereto) and all amounts
payable by the Borrower
hereunder shall be determined as if such Lender had not sold such
participation, except that the
participant shall be entitled to the benefits of Sections 1.10, 2.05 and
4.04 of this Agreement to
the extent that such Lender would be entitled to such benefits if the
participation had not been
entered into or sold, and, provided further, that no Lender shall
transfer, grant or assign any
participation under which the participant shall have rights to approve any
amendment to or
waiver of this Agreement or any other Credit Document except to the extent
such amendment or
waiver would (i) extend the final scheduled maturity of any Loan or Note
in which such
participant is participating (it being understood that any waiver of the
application of any
prepayment or the method of any application of any prepayment to, the
amortization of the Term
Loans shall not constitute an extension of the final maturity date), or
reduce the rate or extend the
time of payment of interest or Fees thereon (except in connection with a
waiver of the
applicability of any post-default increase in interest rates), or reduce
the principal amount
thereof, or increase such participant’s participating interest in any
Commitment over the amount
thereof then in effect (it being understood that a waiver of any Default
or Event of Default or of a
mandatory reduction in the Total Commitment, or a mandatory prepayment,
shall not constitute a
change in the terms of any Commitment), (ii) release all or substantially
all of the Collateral or





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(iii)  consent to the assignment or transfer by any Credit Party of any of its
rights and obligations under this Agreement or any other Credit Document.


          (b) Notwithstanding the foregoing, (x) any Lender may assign all or a
portion of its outstanding A Term Loans and/or B Term Loans and/or Revolving
Commitment and its rights and obligations hereunder to (i) one or more Lenders,
and/or any Affiliates of such Lender, in each case which are Eligible
Transferees, or (ii) in the case of any Lender that is a fund that invests in
loans, any other fund that invests in loans and is managed and/or advised by
the same investment advisor of such Lender or by an Affiliate of such
investment advisor, and (y) with the consent of the Administrative Agent and
the Borrower (which consents shall not be unreasonably withheld and (I) in the
case of the Borrower, shall not be required (A) if a Default or Event of
Default shall have occurred and is continuing or (B) in the case of assignments
of B Term Loans (other than B Term Loans II prior to the Syndication Date) and
(II) in the case of the Administrative Agent, shall not be required in the case
of assignments of B Term Loans by Lehman Commercial Paper Inc. (or any of its
affiliates)), any Lender may assign all or a portion of its outstanding A Term
Loans and/or B Term Loans and/or Revolving Commitment and its rights and
obligations hereunder to one or more Eligible Transferees (treating any fund
that invests in loans and any other fund that invests in loans and is managed
and/or advised by the same investment advisor of such fund or by an Affiliate
of such investment advisor of such fund or by an Affiliate of such investment
advisor as a single Eligible Transferee). No assignment pursuant to the
immediately preceding sentence shall to the extent such assignment represents
an assignment to an institution other than one or more Lenders hereunder, be in
an aggregate amount less than (i) in the case of A Term Loans and Revolving
Commitments $5,000,000 (the “A/RF Minimum Assignment Amount”) and (ii) in the
case of B Term Loans, $2,000,000 (the “B Minimum Assignment Amount”), or result
in a Lender holding (x) A Term Loans and a Revolving Commitment in an amount
greater than zero but less than the A/RF Minimum Assignment Amount or (y) B
Term Loans in an amount greater than zero but less than B Minimum Assignment
Amount. If any Lender so sells or assigns all or a part of its rights hereunder
or under the Notes, any reference in this Agreement or the Notes to such
assigning Lender shall thereafter refer to such Lender and to the respective
assignee to the extent of their respective interests and the respective
assignee shall have, to the extent of such assignment (unless otherwise
provided therein), the same rights and benefits as it would if it were such
assigning Lender. Each assignment pursuant to this Section 12.04(b) shall be
effected by the assigning Lender and the assignee Lender executing an
Assignment Agreement and giving the Administrative Agent written notice
thereof. At the time of any such assignment, (i) either the assigning or the
assignee Lender shall pay to the Administrative Agent a nonrefundable
assignment fee of $3,500 (or as otherwise agreed by the Administrative Agent),
(ii) Annex I shall be deemed to be amended to reflect the Commitments and Loans
of the respective assignee (which shall result in a direct reduction to the
Commitment or Commitments of the assigning Lender) and of the other Lenders,
and (iii) upon surrender of the old Notes the Borrower will, at its own
expense, issue new Notes to the respective assignee and to the assigning Lender
in conformity with the requirements of Section 1.05, provided further that such
transfer or assignment will not become effective until recorded by the
Administrative Agent on the Lender Register pursuant to Section 12.16. To the
extent of any assignment pursuant to this Section 12.04(b) to a Person which is
not already a Lender
hereunder and which is not a United States Person (as such
term is defined in Section 7701(a)(30) of the Code) for Federal income tax
purposes, the respective assignee Lender shall provide to the Borrower and the
Administrative






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Agent the appropriate Internal Revenue Service Forms (and, if applicable, a
Section 4.04 Certificate) described in Section 4.04(b). To the extent that an
assignment pursuant to this Section 12.04(b) would, at the time of such
assignment, result in increased costs under Section 1.10, 1.11, 2.05, or 4.04
from those being charged by the respective assigning Lender prior to such
assignment, then the Borrower shall not be obligated to pay such increased
costs (although the Borrower shall be obligated to pay any other increased
costs of the type described above resulting from changes after the date of the
respective assignment). Nothing in this clause (b) shall prevent or prohibit
any Lender from pledging its Notes or Loans to a Federal Reserve Bank in
support of borrowings made by such Lender from such Federal Reserve Bank and,
with notice to (and, in the event such pledge or assignment effects a transfer
of voting rights from the pledgor to the pledgee, the consent of) the
Administrative Agent and the Borrower, any Lender which is a fund may, for the
purpose of effecting a securitization program, pledge or assign a security
interest in all or any portion of its Loans and Notes to any holder of
obligations owed, or securities issued, by such Lender including to any
trustee for, or any other representative of, such holders. No pledge or
assignment pursuant to the preceding sentence shall release the transferor
Lender from any of its obligations hereunder, and the Borrower, Agents, Letter
of Credit Issuer and the other Lenders shall only be required to deal with
such transferor Lender for all purposes of this Agreement.


          (c) Notwithstanding any other provisions of this Section 12.04, no
transfer or
assignment of the interests or obligations of any Lender hereunder or any
grant of participation
therein shall be permitted if such transfer, assignment or grant would
require the Borrower to file
a registration statement with the SEC or to qualify the Loans under the
“Blue Sky” laws of any
State.



          (d) Each Lender initially party to this Agreement hereby represents, and
each
Person that became a Lender pursuant to an assignment permitted by this
Section 12 will, upon
its becoming party to this Agreement, represent that it is an Eligible
Transferee which makes or
invests in loans in the ordinary course of its business and that it will
make or acquire Loans for
its own account in the ordinary course of such business, provided that
subject to the preceding
clauses (a) and (b), the disposition of any promissory notes or other
evidences of or interests in
Indebtedness held by such Lender shall at all times be within its
exclusive control.



          12.05 No Waiver; Remedies Cumulative. No failure or delay on the part of
any
Agent or any Lender in exercising any right, power or privilege hereunder
or under any other
Credit Document and no course of dealing between any Credit Party and any
Agent or any
Lender shall operate as a waiver thereof; nor shall any single or partial
exercise of any right,
power or privilege hereunder or under any other Credit Document preclude
any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder.
The rights and remedies herein expressly provided are cumulative and not
exclusive of any rights
or remedies which any Agent or any Lender would otherwise have. No notice
to or demand on
any Credit Party in any case shall entitle any Credit Party to any other
or further notice or
demand in similar or other circumstances or constitute a waiver of the
rights of the Agents or the
Lenders to any other or further action in any circumstances without notice
or demand.



          12.06 Payments Pro Rata. (a) The Administrative Agent agrees that promptly
after its receipt of each payment from or on behalf of any Credit Party in
respect of any





-80-






 





Obligations of such Credit Party hereunder, it shall distribute such payment
to the Lenders (other than any Lender that has expressly waived its right to
receive its pro rata share thereof) pro rata based upon their respective
shares, if any, of the Obligations with respect to which such payment was
received.


          (b) Each of the Lenders agrees that, if it should receive any amount
hereunder
(whether by voluntary payment, by realization upon security, by the
exercise of the right of
setoff or banker’s lien, by counterclaim or cross action, by the
enforcement of any right under the
Credit Documents, or otherwise) which is applicable to the payment of the
principal of, or
interest on, the Loans or Fees, of a sum which with respect to the related
sum or sums received
by other Lenders is in a greater proportion than the total of such
Obligation then owed and due to
such Lender bears to the total of such Obligation then owed and due to all
of the Lenders
immediately prior to such receipt, then such Lender receiving such excess
payment shall
purchase for cash without recourse or warranty from the other Lenders an
interest in the Obligations of the respective Credit Party to such Lenders in such amount as
shall result in a
proportional participation by all of the Lenders in such amount, provided
that if all or any portion
of such excess amount is thereafter recovered from such Lender, such
purchase shall be
rescinded and the purchase price restored to the extent of such recovery,
but without interest.



          (c) Notwithstanding anything to the contrary contained herein, the
provisions of
the preceding Sections 12.06(a) and (b) shall be subject to the express
provisions of this
Agreement which require, or permit, differing payments to be made to
Non-Defaulting Lenders
as opposed to Defaulting Lenders.



          12.07 Calculations; Computations. (a) The financial statements to be
furnished
to the Lenders pursuant hereto shall be made and prepared in accordance
with GAAP consistently applied throughout the periods involved (except as set forth in the
notes thereto or as
otherwise disclosed in writing by the Borrower to the Lenders), provided
that (x) except as
otherwise specifically provided herein, all computations of Excess
Cash Flow and all
computations determining compliance with Sections 8.11 through 8.13,
inclusive, including
definitions used therein, shall utilize accounting principles and policies
in effect at the time of the
preparation of, and in conformity with those used to prepare, the December
31, 2001 annual
consolidated financial statements of the Borrower delivered to the Lenders
pursuant to Section
6.10(b) and (y) that if at any time such computations utilize accounting
principles different from
those utilized in the financial statements furnished to the Lenders, such
financial statements shall
be accompanied by reconciliation work-sheets.



          (b) All computations of interest and Fees hereunder shall be made on the
actual number of days elapsed over a year of 365 or 366 days, as the case may
be, provided that interest on Eurodollar Loans shall be calculated on the
actual number of days elapsed over a year of 360 days.



          12.08 Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury
Trial, (a) This Agreement and the other Credit Documents and the rights
and obligations of the
parties hereunder and thereunder shall, except as expressly provided for
in the other Credit
Documents, be construed in accordance with and be governed by the law of
the state of New
York. Any legal action or proceeding with respect to this Agreement or
any other Credit




-81-






 





Document may be brought in the courts of the State of New York sitting in the
Borough of Manhattan or of the United States for the Southern District of New
York, and by execution and delivery of this Agreement, each Credit Party
hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. Each
Credit Party further irrevocably consents to the service of process out of any
of the aforementioned courts in any such action or proceeding by the mailing
of copies thereof by registered or certified mail, postage prepaid, to each
Credit Party located outside New York City and by hand delivery to each Credit
Party located within New York City, at its address for notices pursuant to
Section 12.03, such service to become effective 30 days after such mailing.
Each Credit Party hereby irrevocably designates appoints and empowers CT
Corporation System, with offices on the date hereof located at 111 Eighth
Avenue, New York, New York 10011, as its agent for service of process in
respect of any such action or proceeding. Nothing herein shall affect the
right of the Administrative Agent, any Lender to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against any Credit Party in any other jurisdiction.


          (b) Each Credit Party hereby irrevocably waives any objection which it may
now
or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out
of or in connection with this Agreement or any other Credit Document
brought in the courts
referred to in clause (a) above and hereby further irrevocably waives and
agrees not to plead or
claim in any such court that any such action or proceeding brought in any
such court has been
brought in an inconvenient forum.



          (c) Each of the parties to this Agreement hereby irrevocably waives all
right to a
trial by jury in any action, proceeding or counterclaim arising out of or
relating to this
Agreement, the other Credit Documents or the transactions contemplated
hereby or thereby.



          12.09 Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each
of which when so
executed and delivered shall be an original, but all of which shall
together constitute one and the
same instrument. A set of counterparts executed by all the parties hereto
shall be lodged with the
Borrower and the Administrative Agent.



          12.10 Effectiveness. This Amended and Restated Credit Agreement
shall
become effective on the Restatement Effective Date.



          12.11
Headings Descriptive. The headings of the several sections and sub-sections of this Agreement are inserted for convenience only and shall not
in any way affect the
meaning or construction of any provision of this Agreement.



          12.12 Amendment or Waiver. Neither this Agreement nor any terms hereof may
be changed, waived, discharged or terminated unless such change, waiver,
discharge or
termination is in writing signed by the Borrower and the Required Lenders,
provided that no
such change, waiver, discharge or termination shall, without the consent
of each Lender (other
than a Defaulting Lender) directly affected thereby, (i) extend the A/RF
Maturity Date or the B
Maturity Date (it being understood that any waiver of any prepayment of,
or the method of application of any prepayment to the amortization of, the Loans shall not
constitute any such exten-





-82-






 


sion), or extend any stated maturity or any Letter of Credit beyond the A/RF Maturity Date,
or reduce the rate or extend the time of payment of interest (other than as a result of waiving the applicability
of any post-default increase in interest rates) or Fees thereon, or reduce the principal amount thereof, or increase the
Commitment of any Lender over the amount thereof then in effect (it being understood that a waiver of any Default or
Event of Default or on a mandatory reduction in the  Total Commitment on an adjustment of the Adjusted RF Percentages
as a result of a Defaulting Lender shall not constitute a change in the terms of any Commitment of any Lender), (ii) amend,
modify or waive any provision of this Section 12.12, (iii) reduce the percentage specified in, or (except to give effect to
any additional facilities hereunder) otherwise modify, the definition of “Required Lenders”, (iv) consent to the
assignment or transfer by the Borrower of any of its rights and obligations under this Agreement or (v) release all or
substantially all of the Collateral; provided further, that no such change, waiver, discharge or termination shall,
(w) without the consent of each holder of A Term Loans II and/or B Term Loans II, effect an amendment to this Agreement
that is adverse to the interests of the holders of the A Term Loans II or B Term Loans II, as the case may be, in a greater
degree than it is adverse to the holders of A Term Loans I or B Term Loans I, as the case may be, (x) without the consent of
the Required TF Lenders with respect to the A Term Loans and B Term Loans, amend the definition of “Required TF Lenders”
or amend, waive or reduce any Scheduled Repayment applicable to such Term Loans, (y) without the consent of the Letter of Credit Issuer
or the Agents, as the case may be, amend any provision of Section 2, or 11, as the case may be or (z) without the consent of the
Supermajority Lenders, amend the definition of “Supermajority Lenders”
or release UDLP from the Subsidiary Guaranty.



          12.13 Survival. All indemnities set forth including,
without limitation, in Section 1.10, 1.11, 2.05, 4.04, 11.06 or 12.01 shall survive the execution and delivery of this
Agreement and the making and repayment of the Loans.



          12.14 Domicile of Loans. Each Lender may
transfer and carry its Loans at, to or for the account of any branch office, subsidiary or affiliate of such Lender, provided that
the Borrower shall not be responsible for costs arising under Section 1.10, 2.05, or  4.04 resulting from any such transfer
(other than a transfer pursuant to Section 1.12) to the extent not otherwise applicable to such Lender prior to such transfer.




          12.15 Confidentiality. Each of the Lenders agrees that it
will use its best efforts not to disclose without the prior consent of the Borrower (other than to its employees, auditors, counsel or other professional advisors,
to affiliates or to another Lender if the Lender or such Lender’s holding or parent company in its sole discretion determines that an such party should have access
to such information) any information with respect to the Borrower or any of its
subsidiaries which is furnished pursuant to this Agreement and which is designated by the Borrower or the Borrower to the Lenders in writing as confidential;
provided, that any Lender may disclose any such information (a) as has become generally available to the public, (b) as may be required or appropriate in any
report, statement or testimony submitted to any municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Lender or to the Federal Reserve Board or the Federal Deposit Insurance Corporation or similar organizations (whether
in the United States or elsewhere) or their successors or to the NAIC, (c) as may be required or appropriate in response
to any summons or subpoena or in connection with any litigation (notice of which will be promptly sent to the Borrower to the extent
permitted by Law),



-83-






 




(d)  in order to comply with any law, order, regulation or ruling applicable to
such Lender, (e) to any prospective transferee in connection with any
contemplated transfer of any of the Notes or any interest therein by such
Lender; provided, that such prospective transferee is notified of the
confidentiality requirements relating thereto and agrees to abide by such
requirements and (f) to any direct or indirect contractual counterparty in
swap agreements or such contractual counterparty’s professional advisors;
provided, that such contractual counterparty or such contractual
counterparty’s professional advisors, as the case may be, is notified of the
confidentiality requirements relating thereto and agrees to abide by such
requirements. No Lender shall be obligated or required to return any materials
furnished by the Borrower or any Subsidiary. The Borrower hereby agrees that
the failure of a Lender to comply with the provisions of this Section 12.15
shall not relieve the Credit Parties of any of their obligations to such
Lender under this Agreement and the other Credit Documents.


          12.16 Lender Register. The Borrower hereby designates the Administrative
Agent to serve as the Borrower’s agent, solely for purposes of this Section
12.16, to maintain a register (the “Lender Register”) on which it will record
the Commitments from time to time of each of the Lender, the Loans made by each
of the Lender and each repayment in respect of the principal amount of the
Loans of each Lender. Failure to make any such recordation, or any error in
such recordation shall not affect the Borrower’s obligations in respect of such
Loans. With respect to any Lender, the transfer of the Commitments of such
Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Commitments shall not be effective until such transfer is
recorded on the Lender Register maintained by the Administrative Agent with
respect to ownership of such Commitments and Loans and prior to such
recordation all amounts owing to the transferor with respect to such
Commitments and Loans shall remain owing to the transferor. The registration of
assignment or transfer of all or part of any Commitments and Loans shall be
recorded by the Administrative Agent on the Lender Register only upon the
acceptance by the Administrative Agent of a properly executed and delivered
Assignment Agreement pursuant to Section 12.04(b). The Borrower agrees to
indemnify the Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Administrative Agent in performing its duties under
this Section 12.16 (but excluding such losses, claims, liabilities or
liabilities incurred by reason of the Administrative Agent’s gross negligence
or willful misconduct). The Lender Register shall be available for inspection
by the Borrower or any Lender at any reasonable time, and from time to time,
upon reasonable prior notice.



*     *     *




-84-






 





ANNEX I


COMMITMENTS




	 	 	 	 	 
	 	 	Revolving
	Lender	 	Commitment
	
	 	

	Deutsche Bank Trust Company Americas
	 	$	33,833,333.33	 
	Lehman Commercial Paper Inc.
	 	$	33,833,333.34	 
	Citicorp USA, Inc.
	 	$	30,000,000.00	 
	The Bank of Nova Scotia
	 	$	25,000,000.00	 
	Credit Lyonnais New York Branch
	 	$	23,333,333.33	 
	Toronto Dominion Texas, Inc.
	 	$	23,333,333.33	 
	The Bank of New York
	 	$	16,666,666.67	 
	Credit Industriel et Commercial
	 	$	10,000,000.00	 
	Conseco – Jupiter Funding
	 	$	1,000,000.00	 
	Conseco – KZH CNC LLC
	 	$	1,500,000.00	 
	Conseco – Winged Foot
	 	$	1,500,000.00	 
	Total:
	 	$	200,000,000	 



 






 



ANNEX II


ADDRESSES




	 
	Lehman Commercial Paper Inc.
	3 World Financial Center
	11th floor New York,
	NY 10285
	 
	Citicorp USA, Inc.
	388 Greenwich Street
	19th Floor
	New York, NY 10013
	 
	The Bank of Nova Scotia
	One Liberty Plaza
	26th Floor
	New York, NY 10006
	 
	Credit Lyonnais New York Branch
	1300 Avenue of the Americas
	New York, NY 10017
	 
	TD Securities (USA) Inc.
	31 West 52nd Street
	New York, NY 10019
	 
	The Bank of New York
	One Wall Street
	New York, NY 10266
	 
	Compagnie Financiere de CIC
	et de L’Union Europeenne
	520 Madison Avenue
	New York, NY 10022
	 
	Conseco – KZH CNC LLC
	11825 North Pennsylvania Street
	Carmel, Indiana 46032
	 
	Conseco – Winged Foot
	11825 North Pennsylvania Street
	Carmel, Indiana 46032
	 
	Conseco – Jupiter Funding
	11825 North Pennsylvania Street
	Carmel, Indiana 46032



 






 




ANNEX III


SUBSIDIARIES OF BORROWER




	 	 	 	 	 
	 	 	Class of Stock	 	 
	 	 	and	 	 
	Name	 	Percentage Ownership	 	Direct Owner
	
	 	
	 	

	UDII Torch Acquisition Corporation (“UDII)*	 	
Common -100%
	 	Borrower
	United States Marine Repair, Inc. (“USMR”)	 	
Common -100%
	 	Borrower
	Norfolk Shipbuilding & Drydock
Corporation (“Norshipco”)	 	
Common -100%
	 	USMR
	San Francisco Drydock, Inc.	 	
Common -100%
	 	USMR
	Southwest Marine, Inc.	 	
Common -100%
	 	USMR
	Marepcon Financial Corporation	 	
Common -100%
	 	Norshipco



*UDII will be merged into USMR following the Borrower’s acquisition of USMR
pursuant to the Agreement and Plan of Merger dated as of May 27, 2002. USMR
will be the successor by merger to UDII.


 






 



ANNEX IV


REAL PROPERTIES



Leased and Subleased Properties:



In addition to the following, see attached list of real property leases.



	1.	 	San Diego, CA - Lease Agreement between Southwest Marine, Inc. (“SWM”)
and the
San Diego Unified Port District with a term from September 1, 1984
through August 31,
2034 (See attached property description) (Lessee’s interest in this lease
was pledged to
Credit Lyonnais New York Branch to secure $100,000,000 loan.
	 
	2.	 	San Pedro, CA - Lease Agreement between SWM and The City of Los Angeles
with a
term from July 1, 1986 through June 30, 19961 (No legal description
attached to lease.)
	 
	3.	 	San Francisco, CA



          (a)     Lease Agreement between San Francisco Drydock, Inc. (“SFD”) and the
City and
County of San Francisco through the San Francisco Port Commission with a
term from
December 17, 1987 through December 17, 2017 (See attached property
description)



          (b)     Month-to-Month Lease No. 11968, dated June 14, 1994 between the City
of San
Francisco and SWM (See attached property description.)



4.          Ingleside, CA - Lease Agreement between SWM and Braswell Services Group,
Inc. with
a term of November 1, 1995 through October 31, 2005 (See attached property
description)


5.          San Diego, CA - Lot Lease at Sampson Street - Lease Agreement between the
State of
California Lands Commission and SWM with a term of December 15, 1998 through
August 31,
2035 (See attached property description)


6.          San Diego, CA - Parking Lot Lease at Belt Street - Lease Agreement, dated
November 1,
1956 (month-to-month) between SWM and The Atchison, Topeka, and Santa Fe
Railway
Company (See attached property description)


7.          San Diego, CA - Parking Lot Lease at Belt Street - Lease Agreement, dated
September
24, 1965 (month-to-month) between SWM and The Atchison, Topeka, and Santa Fe
Railway
Company (See attached property description)


8.          San Diego, CA - Parking Lot Lease at Belt Street - Lease Agreement, dated
March 1,
1971 (month-to-month) between SWM and The Atchison, Topeka, and Santa Fe
Railway
Company (See attached property description)







	1	This lease expired pursuant to its terms on June 30, 1996. SWM has been a
holdover since that date and is in ongoing negotiations with The City of
Los Angeles to renew the lease for a five year period with an option to
renew for another five year period.


 






 






ANNEX IV

Page 2


9.          San Diego, CA - Parking Lot Lease at Belt Street -Lease Agreement, dated
February 1,
1976 (month-to-month) between SWM and The Atchison, Topeka, and Santa Fe
Railway
Company (See attached property description)


10.        San Diego, CA - Building and Lot Lease at 2201 Main Street - Industrial
Commercial
Single Tenant Lease between SWM and California Properties with a term of
November 25, 1997
through November 24, 2007 (See attached property description)


11.        San Diego, CA - Parking Lot Lease Off Sampson and Belt Near Silvergate
Power Plant -
Sublease Agreement, dated January, 1994 (year-to-year) between San Diego Gas &
Electric and
SWM (See attached property description)


12.        San Diego, CA - Other Real Property Leases - Lease Agreement between San
Diego
Unified Port District and SWM with a term of December 1, 2001 through November
30, 2002
(See attached property description)



 






 





ANNEX V


INDEBTEDNESS



See Annexes IX and X.



 






 





ANNEX VI


ERISA Covered Plans



USMR Plans:




	1.	 	United States Marine Repair, Inc. (401(k))
	 
	2.	 	Norshipco Pension Plan for Represented Hourly Employees
	 
	3.	 	Norshipco Pension Plan for Non-Represented Hourly Employees
	 
	4.	 	Southwest Marine, Inc. Employee Benefit Plan Trust
	 
	5.	 	Southwest Marine, Inc. Flexible Benefit Plan
	 
	6.	 	Norshipco Group Health Plan
	 
	7.	 	Norfolk Shipbuilding & Drydock Corporation Corp. Employee Assistance Plan



 






 






ANNEX VII


LIENS



To be provided upon request.



 






 





ANNEX VIII


EXISTING INVESTMENTS



United States Marine Repair, Inc. holds a 42% interest in South Hampton
Roads Equipment Rental, Co. L.P. This partnership interest is
uncertificated.


 






 


ANNEX IX


COLIs



To be provided upon request.



 






 





ANNEX X



LETTERS OF CREDIT




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Issuing	 	Issuing	 	Amount	 	Current	 	Auto	 	Extension	 	Non Ext
	Bank	 	Bank #	 	Outstanding	 	Expiry	 	Extendible	 	Period	 	Notify Pd
	
	 	
	 	
	 	
	 	
	 	
	 	

	DBTCA
	 	 	S14239	 	 	$	869,339.00	 	 	 	8/13/2002	 	 	Yes	 	1 Year	 	30 Days
	DBTCA
	 	 	S14277	 	 	$	185,710.00	 	 	 	8/15/2003	 	 	No	 	 	 	 	 	 	 	 
	DBTCA
	 	 	S14287	 	 	$	375,000.00	 	 	 	9/4/2002	 	 	No	 	 	 	 	 	 	 	 
	DBTCA
	 	 	S14302	 	 	$	135,879.13	 	 	 	9/19/2002	 	 	Yes	 	1 Year	 	30 Days
	DBTCA
	 	 	S14303	 	 	$	101,337.80	 	 	 	9/19/2002	 	 	Yes	 	1 Year	 	30 Days
	DBTCA
	 	 	S14379	 	 	$	323,676.00	 	 	 	7/15/2002	 	 	No	 	 	 	 	 	 	 	 
	DBTCA
	 	 	S14392	 	 	$	2,569,000.00	 	 	 	11/22/2002	 	 	Yes	 	1 Year	 	30 Days
	DBTCA
	 	 	S14416	 	 	$	8,704,179.00	 	 	 	6/16/2003	 	 	Yes	 	l Year	 	120 Days
	DBTCA
	 	 	S14420	 	 	$	66,131,649.00	 	 	 	9/28/2002	 	 	Yes	 	1 Year	 	12 Days
	DBTCA
	 	 	S14440	 	 	$	7,225,000.00	 	 	 	12/19/2002	 	 	Yes	 	1 Year	 	60 Days
	DBTCA
	 	 	S14445	 	 	$	589,047.00	 	 	 	12/21/2002	 	 	Yes	 	1 Year	 	90 Days
	DBTCA
	 	 	S14477	 	 	$	849,339.00	 	 	 	3/20/2003	 	 	Yes	 	1 Year	 	120 Days
	DBTCA
	 	 	S14483	 	 	$	2,644,500.00	 	 	 	6/30/2003	 	 	No	 	 	 	 	 	 	 	 
	DBTCA
	 	 	S14510	 	 	$	552,793.00	 	 	 	1/31/2003	 	 	No	 	 	 	 	 	 	 	 
	DBTCA
	 	 	S14529	 	 	$	1,608,750.00	 	 	 	6/30/2003	 	 	No	 	 	 	 	 	 	 	 
	DBTCA
	 	 	S14532	 	 	$	24,641,263.13	 	 	 	10/31/2002	 	 	Yes	 	1 Year	 	30 Days
	Total DBTCA
	 	 	 	 	 	$	117,506,462.06	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	BNY
	 	 	S00045138	 	 	$	26,222,874.00	 	 	 	6/15/2004	 	 	No	 	 	 	 	 	 	 	 
	BNY
	 	 	S00045139	 	 	$	3,513,400.00	 	 	 	1/15/2007	 	 	No	 	 	 	 	 	 	 	 
	BNY
	 	 	S00045142	 	 	$	7,029,579.00	 	 	 	11/29/2002	 	 	Yes	 	1 Year	 	30 Days
	BNY
	 	 	S00045108	 	 	$	600,000.00	 	 	 	6/30/2002	 	 	No	 	 	 	 	 	 	 	 
	BNY
	 	 	S00044456	 	 	$	1,453,482.80	 	 	 	3/1/2003	 	 	Yes	 	1 Year	 	60 Days



 






 



ANNEX X

Page 2


	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total BNY
	 	 	 	 	 	$	38,819,335.80	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	GT O/S
	 	 	 	 	 	$	156,325,797.86	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 




USMR Standby LC’s




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Issuing	 	Issuing	 	Amount	 	Current	 	Auto	 	Extension	 	Non Ext
	Bank	 	Bank #	 	Outstanding	 	Expiry	 	Extendible	 	Period	 	Notify Pd
	
	 	
	 	
	 	
	 	
	 	
	 	

	Credit Lyonnais
	 	981109IS702	 	$	9,500,000.00	 	 	 	1/7/2003	 	 	Yes	 	1 Year	 	60 Days
	Credit Lyonnais
	 	990413IS909	 	$	224,352.00	 	 	 	12/31/2002	 	 	Yes	 	1 Year	 	30 Days
	Credit Lyonnais
	 	991006IS151	 	$	376,125.00	 	 	 	12/16/2002	 	 	Yes	 	1 Year	 	60 Days
	Credit Lyonnais
	 	990510IS963	 	$	750,000.00	 	 	 	6/30/2003	 	 	Yes	 	1 Year	 	60 Days
	Credit Lyonnais
	 	010313IS676	 	$	3,000,000.00	 	 	 	3/15/2003	 	 	No	 	 	 	 	 	 	 	 
	Total Credit
Lyonnais
	 	 	 	 	 	$	13,850,477.00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Grand Total (All)
	 	 	 	 	 	$	170,176,274.86