**EXHIBIT 10(a)**

$275,000,000

AMENDED AND RESTATED CREDIT AGREEMENT

dated as of

June 29, 2001,

among

AIRBORNE EXPRESS, INC., and ABXAIR, INC.,

as Borrowers,

 

AIRBORNE, INC.,

as Parent,

The LENDERS Listed Herein,

and

WACHOVIA BANK, N.A., as Administrative Agent and Collateral Agent,

with

U.S. BANK NATIONAL ASSOCIATION, as Documentation Agent,

BANK OF AMERICA, N.A., as Syndication Agent, and

WACHOVIA SECURITIES, INC., as Lead Arranger.

TABLE OF CONTENTS

CREDIT AGREEMENT

                                                           Page

ARTICLE 1 ...............DEFINITIONS................................................................................. 1

SECTION 1.01.......... Definitions......................................................................................... 1

SECTION 1.02.......... Accounting Terms andDeterminations............................................. 28

SECTION 1.03.......... References...................................................................................... 28

SECTION 1.04.......... Use of Defined Terms...................................................................... 29

SECTION 1.05.......... Terminology.................................................................................... 29

ARTICLE 2 ................THE CREDITS.............................................................................. 30

SECTION 2.01.......... Commitments to Make Loans.......................................................... 30

SECTION 2.02.......... Method of Borrowing Loans............................................................ 31

SECTION 2.03.......... Suretyship Waivers.......................................................................... 33

SECTION 2.04.......... Continuation and ConversionElections............................................. 34

SECTION 2.05.......... Notes.............................................................................................. 35

SECTION 2.06.......... Maturity of Loans............................................................................ 35

SECTION 2.07.......... Interest Rates.................................................................................. 35

SECTION 2.08.......... Fees................................................................................................ 37

SECTION 2.09.......... Optional Termination orReduction of Commitments......................... 38

SECTION 2.10.......... Mandatory Reduction andTermination of Commitments................... 38

SECTION 2.11.......... Optional Prepayments..................................................................... 39

SECTION 2.12.......... Mandatory Prepayments.................................................................. 39

SECTION 2.13.......... General Provisions as toPayments................................................... 40

SECTION 2.14.......... Computation of Interest andFees.................................................... 43

SECTION 2.15.......... All Loans to Constitute OneObligation............................................ 43

SECTION 2.16.......... Issuance of Letters of Credit............................................................ 43

SECTION 2.17.......... Conditions and Amounts ofLetters of Credit.................................... 44

SECTION 2.18.......... Requests for Issuance ofLetters of Credit........................................ 44

SECTION 2.19.......... Letter of Credit ReimbursementObligations; Duties of the Issuer...... 45

SECTION 2.20.......... Letter of CreditParticipations.......................................................... 46

SECTION 2.21.......... Payment of ReimbursementObligations............................................ 48

SECTION 2.22.......... Compensation for Letters ofCredit and Reporting Requirements...... 49

SECTION 2.23.......... Indemnification and Exonerationwith respect to Letters of Credit..... 49

SECTION 2.24.......... Letters of Credit in ForeignCurrencies............................................. 50

SECTION 2.25.......... Assumption of Debt......................................................................... 51

ARTICLE 3........................................................................................................................ 51

SECTION 3.01.......... Grant of Security Interest................................................................. 51

SECTION 3.02.......... Further Assurances.......................................................................... 52

ARTICLE 4........................................................................................................................ 52

SECTION 4.01.......... Conditions to Initial Borrowingand issuance of any Letter of Credit.. 52

SECTION 4.02.......... Conditions to All Borrowingsand Issuances of Letters of Credit....... 54

ARTICLE 5 ................REPRESENTATIONS ANDWARRANTIES............................... 55

SECTION 5.01.......... Corporate Existence and Power...................................................... 55

SECTION 5.02.......... Corporate and GovernmentalAuthorization; No Contravention........ 55

SECTION 5.03.......... Binding Effect.................................................................................. 56

SECTION 5.04.......... Financial Information....................................................................... 56

SECTION 5.05.......... Litigation......................................................................................... 56

SECTION 5.06.......... Compliance with ERISA.................................................................. 56

SECTION 5.07.......... Compliance with Laws; Paymentof Taxes....................................... 56

SECTION 5.08.......... Subsidiaries..................................................................................... 57

SECTION 5.09.......... Investment Company Act................................................................ 57

SECTION 5.10.......... Public Utility Holding CompanyAct................................................. 57

SECTION 5.11.......... Ownership of Property; Liens.......................................................... 57

SECTION 5.12.......... No Default...................................................................................... 57

SECTION 5.13.......... Full Disclosure................................................................................. 58

SECTION 5.14.......... Environmental Matters..................................................................... 58

SECTION 5.15.......... Capital Stock.................................................................................. 58

SECTION 5.16.......... Margin Stock.................................................................................. 59

SECTION 5.17.......... Insolvency....................................................................................... 59

SECTION 5.18.......... Insurance........................................................................................ 59

SECTION 5.19.......... Citizenship....................................................................................... 59

SECTION 5.20.......... Status as an Air Carrier................................................................... 60

SECTION 5.21.......... Purchase of Collateral...................................................................... 60

SECTION 5.22.......... Possession of Permits...................................................................... 60

SECTION 5.23.......... Labor Disputes................................................................................ 60

SECTION 5.24.......... Restrictions..................................................................................... 60

SECTION 5.25.......... Leases............................................................................................ 61

SECTION 5.26.......... Trade Relations............................................................................... 61

SECTION 5.27.......... Capital Structure............................................................................. 61

SECTION 5.28.......... Material Contracts........................................................................... 61

SECTION 5.29.......... Survival of Representations andWarranties...................................... 62

SECTION 5.30.......... Force Majeure................................................................................ 62

SECTION 5.31.......... 1992 Notes and 1995 Notes........................................................... 62

SECTION 5.32.......... Federal Taxpayer IdentificationNumber.......................................... 62

SECTION 5.33.......... Right to Assign and GrantSecurity Interest....................................... 62

SECTION 5.34.......... Intercompany Debt.......................................................................... 62

ARTICLE 6 ...............COVENANTS................................................................................ 62

SECTION 6.01.......... Information...................................................................................... 62

SECTION 6.02.......... Inspection of Property, Booksand Records..................................... 65

SECTION 6.03.......... Maintenance of Existence................................................................ 66

SECTION 6.04.......... Dissolution...................................................................................... 66

SECTION 6.05.......... Consolidations, Mergers andSales of Assets................................... 66

SECTION 6.06.......... Use of Proceeds.............................................................................. 67

SECTION 6.07.......... Compliance with Laws; Paymentof Taxes....................................... 67

SECTION 6.08.......... Insurance........................................................................................ 68

SECTION 6.09.......... Change in Fiscal Year...................................................................... 68

SECTION 6.10.......... Maintenance of Property................................................................. 68

SECTION 6.11.......... Material Contracts; Operatingand Capitalized Leases...................... 68

SECTION 6.12.......... Environmental Matters..................................................................... 69

SECTION 6.13.......... Environmental Release..................................................................... 69

SECTION 6.14.......... Transactions with Affiliates;Intercompany Debt............................... 69

SECTION 6.15.......... Restricted Payments........................................................................ 70

SECTION 6.16.......... Investments..................................................................................... 70

SECTION 6.17.......... Permitted Liens............................................................................... 71

SECTION 6.18.......... Restrictions on Ability ofSubsidiaries to Pay Dividends.................... 72

SECTION 6.19.......... Minimum Consolidated EBITDA..................................................... 73

SECTION 6.20.......... Maximum Leverage Ratio................................................................ 73

SECTION 6.21.......... Debt Service Coverage Ratio.......................................................... 74

SECTION 6.22.......... Minimum Liquidity; Fixed ChargeCoverage Ratio............................ 74

SECTION 6.23.......... Limitation on CapitalExpenditures................................................... 75

SECTION 6.24.......... Permitted Debt................................................................................ 75

SECTION 6.25.......... Limitation on Issuance and Saleof Capital Stock and Redeemable Preferred Stock of Subsidiaries        75

SECTION 6.26.......... More Restrictive Agreements........................................................... 75

SECTION 6.27.......... New Subsidiaries............................................................................ 76

SECTION 6.28.......... Location of Deposit Accounts.......................................................... 77

ARTICLE 7 ...............DEFAULTS.................................................................................... 77

SECTION 7.01.......... Events of Default............................................................................. 77

SECTION 7.02.......... Notice of Default............................................................................. 80

SECTION 7.03.......... Remedies with Respect toCollateral................................................ 80

ARTICLE 8 ................THE ADMINISTRATIVE AGENT AND THELENDERS............ 80

SECTION 8.01.......... Appointment; Powers andImmunities.............................................. 80

SECTION 8.02.......... Reliance by AdministrativeAgent..................................................... 82

SECTION 8.03.......... Defaults........................................................................................... 82

SECTION 8.04.......... Rights of Administrative Agentand its Affiliates as a Lender.............. 82

SECTION 8.05.......... Indemnification................................................................................ 83

SECTION 8.06.......... Consequential Damages................................................................... 83

SECTION 8.07.......... Payee of Note Treated as Owner.................................................... 83

SECTION 8.08.......... Nonreliance on AdministrativeAgent and Other Lenders.................. 83

SECTION 8.09.......... Failure to Act.................................................................................. 84

SECTION 8.10.......... Resignation or Removal ofAdministrative Agent............................... 84

SECTION 8.11.......... Joinder of Lenders........................................................................... 84

SECTION 8.12.......... Agreements Regarding Collateral..................................................... 85

SECTION 8.13.......... Administrative Agent FieldExams.................................................... 85

SECTION 8.14.......... Designation of Co-CollateralAgent.................................................. 86

SECTION 8.15.......... Limitation of Certain Agents'Duties................................................. 86

ARTICLE 9 ...............CHANGE IN CIRCUMSTANCES;COMPENSATION............... 87

SECTION 9.01.......... Basis for Determining InterestRate Inadequate or Unfair.................. 87

SECTION 9.02.......... Illegality........................................................................................... 87

SECTION 9.03.......... Increased Cost and ReducedReturn................................................ 88

SECTION 9.04.......... Base Rate Loans or Other Euro-DollarLoans Substituted for Affected Euro-Dollar Loans         89

SECTION 9.05.......... Compensation................................................................................. 89

SECTION 9.06.......... Replacement of Lenders.................................................................. 90

ARTICLE 10 .............MISCELLANEOUS....................................................................... 90

SECTION 10.01........ Notices........................................................................................... 90

SECTION 10.02........ No Waivers.................................................................................... 91

SECTION 10.03........ Expenses; Documentary Taxes........................................................ 91

SECTION 10.04........ Indemnification................................................................................ 92

SECTION 10.05........ Setoff; Sharing of Setoffs................................................................. 92

SECTION 10.06........ Amendments and Waivers............................................................... 93

SECTION 10.07........ No Margin Stock Collateral............................................................. 94

SECTION 10.08........ Successors and Assigns................................................................... 94

SECTION 10.09........ Confidentiality................................................................................. 97

SECTION 10.10........ Representation by Lenders.............................................................. 98

SECTION 10.11........ Obligations Several.......................................................................... 98

SECTION 10.12........ Georgia Law................................................................................... 98

SECTION 10.13........ Severability..................................................................................... 98

SECTION 10.14........ Interest............................................................................................ 98

SECTION 10.15........ Interpretation................................................................................... 99

SECTION 10.16........ WAIVER OF JURY TRIAL; CONSENT TOJURISDICTION..... 99

SECTION 10.17........ Counterparts................................................................................. 100

SECTION 10.18........ Source of Funds -- ERISA............................................................ 100

SECTION 10.19........ Credit Inquiries.............................................................................. 100

SECTION 10.20........ Consequential Damages................................................................. 100

SECTION 10.21........ Entire Agreement........................................................................... 100

SECTION 10.22........ Continuing Agreement................................................................... 100

 

 

EXHIBITS:

EXHIBIT A-1     -     Form of Syndicated Loan Note

EXHIBIT A-2     -     Form of Swing Loan Note

EXHIBIT B-1     -     Form of Borrowers' Opinion

EXHIBIT B-2     -     Form of Local Counsel's Opinion

EXHIBIT B-3     -     Form of FAA Counsel's Opinion

EXHIBIT C        -     Form of Administrative Agent's Opinion

EXHIBIT D        -     Form of Assignment and Acceptance

EXHIBIT E-1     -     Form of Notice of Borrowing

EXHIBIT E-2     -     Form of Notice of Continuation orConversion

EXHIBIT F         -     Form of Borrowing Base Certificate

EXHIBIT G        -     Form of Compliance Certificate

EXHIBIT H-1     -     Form of Closing Certificate (ABX Air, Inc.)

EXHIBIT H-2     -     Form of Closing Certificate (Airborne,Inc.,

                                 andAirborne Express, Inc.)

EXHIBIT I          -     Form of Officer's Certificate

EXHIBIT J          -     [RESERVED]

EXHIBIT K        -     Form of Aircraft Chattel Mortgage, SecurityAgreement, and

                                 Assignmentof Rents and Leases

EXHIBIT L         -     Form of Contribution Agreement

EXHIBIT M        -     Form of Information Disclosure Certificate

EXHIBIT N        -     Form of Pledge Agreement

EXHIBIT O        -     Form of Mortgage

EXHIBIT P-1     -     Form of Letter of Credit Request

EXHIBIT P-2     -     Form of Notice of Letter of Credit

EXHIBIT Q        -     [RESERVED]

EXHIBIT R         -     Form of Parent Guaranty

EXHIBIT S         -     Form of Subsidiary Guaranty

EXHIBIT T         -     Form of Security Agreement

 

SCHEDULES:

SCHEDULE 1.01(L)      -        Outstanding Letters of Credit

SCHEDULE 1.01(P)      -        Permitted Encumbrances

SCHEDULE 1.01(R)      -        Real Property Collateral

SCHEDULE 1.01(S)      -        Segregated Aviation Chattel

SCHEDULE 5.08           -        Subsidiaries

SCHEDULE 5.19           -        Foreign Subsidiaries

SCHEDULE 5.23           -        Labor Disputes

SCHEDULE 5.25           -        Capital and Operating Leases

SCHEDULE 5.27           -        Capital Structures of Subsidiaries

SCHEDULE 6.14           -        Transactions with Affiliates

SCHEDULE 6.16           -        Existing Investments

SCHEDULE 6.17           -        Liens

SCHEDULE 6.24           -        Permitted Debt

AMENDED ANDRESTATED CREDIT AGREEMENT

THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as ofJune 29, 2001, is made by and among AIRBORNE EXPRESS, INC., a Delawarecorporation ("Express"), ABX AIR, INC., a Delaware corporation ("ABX"; ABX andExpress each a "Borrower" and, together, jointly and severally, the"Borrowers"), AIRBORNE, INC., a Delaware corporation (the "Parent"), theLenders listed on the signature pages hereof and WACHOVIA BANK, N.A., anational banking association, as a Lender, Administrative Agent, and CollateralAgent.  AIRBORNE INC., a Delawarecorporation (the "Parent"), joins in this Agreement for the purposes of makingcertain representations, warranties, and covenants to the Administrative Agent,the Collateral Agent, and Lenders.

The parties hereto agree as follows:
ARTICLE 1     DEFINITIONSSECTION 1.01.                    Definitions
.  

The terms as defined in this Section 1.01 shall, for allpurposes of this Agreement and any amendment hereto (except as herein otherwiseexpressly provided), have the meanings set forth herein:

"1992 Notes" means, collectively, the debentures, notes,instruments, and other evidences of Debt issued by Express, formerly known asAirborne Freight Corporation, pursuant to the Indenture and certain otherIndenture Documents on or about December 15, 1992, together with allamendments, consolidations, modifications, renewals, and supplements thereto.

"1995 Notes" means, collectively, the debentures, notes,instruments, and other evidences of Debt issued by Express, formerly known asAirborne Freight Corporation, pursuant to the Indenture and the other IndentureDocuments on or about September 15, 1995, together with all amendments,consolidations, modifications, renewals, and supplements thereto.

"Adjusted Debt" means, at the time of determination, (a)Consolidated Debt (including, without limitation, any Receivables ProgramObligations and Debt arising in connection with any Excluded AircraftFinancings, but excluding any amounts attributable to undrawn amounts availablefor drawing under Letters of Credit (to the extent such undrawn amounts were includedin the calculation of Consolidated Debt)), plus (b) the product of (i)Consolidated Lease Expense for the Fiscal Quarter just ended and theimmediately preceding three Fiscal Quarters, times (ii) seven (7).

"Adjusted London Interbank Offered Rate" has the meaningset forth in Section 2.07(c).

"Administrative Agent" means Wachovia Bank, N.A., anational banking association organized under the laws of the United States ofAmerica, in its capacity as administrative agent for the Lenders hereunder, andits successors and permitted assigns in such capacity.

"Affiliate" of any relevant Person means (a) any Personthat directly, or indirectly through one or more intermediaries, controls therelevant Person (a "Controlling Person"), (b) any Person (other than therelevant Person or a Subsidiary of the relevant Person) which is controlled byor is under common control with a Controlling Person, or (c) any Person (otherthan a Subsidiary of the relevant Person) of which the relevant Person owns,directly or indirectly, 20% or more of the common stock or equivalent equityinterests.  As used herein, the term"control" means possession, directly or indirectly, of the power to direct orcause the direction of the management or policies of a Person, whether throughthe ownership of voting securities, by contract or otherwise.

"Aggregate Real Properties" means each of the RealProperties and all other real property owned, leased, or operated by the Parentor any Subsidiary.

"Agreement" means this Amended and Restated CreditAgreement, together with all amendments and supplements hereto.

"Aircraft Chattel Mortgage" means each of those certainAircraft Chattel Mortgages, Security Agreements, and Assignments of Rents andLeases, substantially in the form of Exhibit K, executed and deliveredpursuant to this Agreement, in which certain of the Parent, the Subsidiaries,and other Persons which become Guarantors after the Closing Date grant to theCollateral Agent, for the equal and ratable benefit of the Secured Creditors, asecurity interest in the Collateral described therein, together with allamendments and supplements thereto.

"Aircraft Financing Subsidiary" means one or more specialpurpose Persons which (a) constitute a Subsidiary of the Parent or a DomesticSubsidiary; and (b) were or will be created for the sole purpose of, and whoseonly business shall be, directly related to the structuring or performance ofan Excluded Aircraft Financing.

"Amortization" means for any period the sum of allamortization charges of the Parent and its Consolidated Subsidiaries for suchperiod as determined in accordance with GAAP.

"Appliance" has the meaning given such term in 49 U.S.C. Sec.40102.

"Applicable Margin" has the meaning set forth in Section2.07(a).

"Arranger's Letter Agreement" means that certain letteragreement, dated as of May 24, 2001, among the Parent, Wachovia Securities,Inc., and Wachovia Bank, N.A., relating to the structure of the creditfacilities provided for under this Agreement, and certain fees from time to timepayable by the Borrowers to the Administrative Agent, together with allamendments and supplements thereto.

"Assignee" has the meaning set forth in Section 10.08(c).

"Assignment and Acceptance" means an Assignment andAcceptance executed in accordance with Section 10.08(c) in the form of ExhibitD.

"Authority" has the meaning set forth in Section 9.02.

"Aviation Chattel" means each aircraft, aircraft engine,and propeller owned by the Parent or any Subsidiary; provided that, on andafter the 61st day following the Closing Date, the term "AviationChattel" shall not include any item of Segregated Aviation Chattel unless:
(a)    the FAA records relating to such item of Segregated AviationChattel shall have been cleared, to the satisfaction of the Administrative Agent,of all inconsistencies, Liens (whether actual Liens or potential Liens), andother aberrations of title or record or(b)   the Administrative Agent shall have, in its sole and absolutediscretion, elected in writing to allow such item of Segregated Aviation Chattelto remain included in the definition of "Aviation Chattel" after such date;
further provided, that the term"Aviation Chattel" shall not, at any time, include any item of SegregatedAviation Chattel if the Administrative Agent determines, in its sole andabsolute discretion, that the Parent or a Subsidiary is not exercising its bestefforts to clear the FAA records in the manner and to the extent provided insubparagraph (a) above.

"Bankruptcy Code" shall mean Title 11 of the United StatesCode, as it may be amended from time to time.

"Base Rate" means for any Base Rate Loan for any day, therate per annum equal to the higher as of such day of (a) the Prime Rate or (b)one-half of one percent above the Federal Funds Rate.  For purposes of determining the Base Rate for any day, changes inthe Prime Rate or the Federal Funds Rate shall be effective on the date of eachsuch change.

"Base Rate Loan" means a Loan which bears or is to bearinterest at a rate based upon the Base Rate, and is to be made as a Base RateLoan pursuant to the applicable Notice of Borrowing, Notice of Continuation orConversion, Section 2.02(f), or Article 9, as applicable.

"Borrower" and "Borrowers" means, individually andcollectively, as the context requires, each of the following Persons, each ofthem being jointly and severally obligated as Borrowers hereunder: (a) AIRBORNEEXPRESS, INC., a Delaware corporation, and (b) ABX AIR, INC., a Delawarecorporation, and (c) each of their respective successors and permitted assigns.

"Borrowing" means a borrowing hereunder consisting ofLoans made to either or both of the Borrowers (a) at the same time by all ofthe Lenders, in the case of a Syndicated Borrowing, or (b) by Wachovia, in thecase of a Swing Loan.  A "Borrowing" isa "Syndicated Borrowing" if such Loans are made pursuant to Section2.01(a).  A Borrowing is a "Base RateBorrowing" if such Loans are Base Rate Loans or a "Euro-Dollar Borrowing" ifsuch Loans are Euro-Dollar Loans.  ABorrowing is a "Swing Loan Borrowing" if such Loan is made pursuant to Section2.01(b).

"Borrowing Base" means the following sum: 

(A)       theDetermined Percentage of an amount equal to the difference of (i) the productof the Current Receivables Factor, times the Eligible Accounts, less (ii) themaximum aggregate amount of Purchased Receivables which have been purchasedfrom the Receivables Subsidiary under the Receivables Securitization Program atany time, as such maximum amount may be modified from time to time, less (iii)the Receivables Reserve;

PLUS

(B)       65%of the Fair Market Value of the Parent's and the Subsidiaries' aviation fuelinventory which is subject at all times to a duly perfected, first prioritysecurity interest in favor of the Collateral Agent pursuant to a SecurityAgreement;

PLUS

(C)       80%of the amount equal to the difference of (i) the Orderly Liquidation Value ofall Spare Parts and Appliances (other than Spare Parts and Appliances which areincluded in paragraph (F) below) which are subject at all times to a dulyperfected, first priority security interest in favor of the Collateral Agentpursuant to a Security Agreement or an Aircraft Chattel Mortgage, less (ii) theCosts attributable to such items;

PLUS

(D)       60%of the aggregate Fair Market Value of the Borrowing Base Properties;

PLUS

(E)       80% ofthe amount equal to the difference of (i) the Orderly Liquidation Value of alloperational and fully functioning Aviation Chattel which is at all timessubject to a duly perfected, first priority security interest (subject only toPermitted Encumbrances which do not constitute liens or security interests) infavor of the Collateral Agent pursuant to an Aircraft Chattel Mortgage orSecurity Agreement, less (ii) the Costs attributable to such items;

PLUS

(F)       80%of the amount equal to the difference of (i) the Orderly Liquidation Value ofall disabled or non-operating Aviation Chattel (including, without limitation,Aviation Chattel which is incomplete and from which the Parent or theSubsidiaries scavenge parts) which is all times subject to a duly perfected,first priority security interest (subject only to Permitted Encumbrances whichdo not constitute liens or security interests) in favor of the Collateral Agentpursuant to an Aircraft Chattel Mortgage or Security Agreement, less (ii) theCosts attributable to such items;

PLUS

(G)       anamount equal to (i) the actual amount of any cash on deposit in any DesignatedAccount, plus (ii) the value of any Cash Equivalents maintained in anyDesignated Account, less, in any case, any interest on such cash or CashEquivalents which is in such Designated Account;

MINUS

(H)       anamount equal to the Outstanding Indenture Obligations.

"Borrowing Base Certificate" means a certificate in theform of Exhibit F.

"Borrowing Base Property" means each parcel of Real Property(a) which is at all times subject to a duly perfected, first priority securityinterest in favor of the Collateral Agent pursuant to a Mortgage; (b) withrespect to which the Parent or the owner of such parcel shall have delivered tothe Collateral Agent a survey of such parcel in form reasonably satisfactory tothe Collateral Agent; (c) with respect to which the Parent or the owner of suchparcel shall have delivered to the Collateral Agent a Phase I environmentalaudit of such parcel (with such audit's having been performed by anenvironmental audit Person reasonably satisfactory to the Collateral Agent);(d) with respect to which the Collateral Agent shall have received a titleinsurance policy insuring the Collateral Agent, on behalf of the SecuredCreditors, as being the owner and holder of a first priority mortgage lien onsuch parcel, in form, substance, amount, with such reinsurance, with suchendorsements, with no exception for creditors' rights, and with only suchexceptions as are approved by the Collateral Agent in its discretion and suchparcel will not be subject to any leases which are not subordinate to theMortgage and not approved by the Collateral Agent; and (e) with respect towhich the Administrative Agent, after the Collateral Agent's receipt of suchsurvey and audit shall have, in its discretion, consented in writing to suchparcel's being included in this definition; provided that, if such surveys andaudits are not delivered to the Collateral Agent within 120 days of the ClosingDate, such parcel shall never thereafter be included within the definition ofBorrowing Base Properties unless the Collateral Agent and the AdministrativeAgent shall agree otherwise in writing.

"Capital Stock" means any non-redeemable capital stock ofthe Parent or any of the Subsidiaries (to the extent issued to a Person otherthan the Parent or a Subsidiary), whether common or preferred.

"Capital Expenditures" shall mean the aggregate amount ofall expenditures of the Parent and its Consolidated Subsidiaries which, inaccordance with GAAP, would be classified as capital expenditures, butexcluding the amount of any capitalized interest expense.

"Cash Equivalent" means any instrument, to the extent theInvestment in such instrument is permitted under Section 6.16, (a) issued by aPerson whose commercial paper is rated A1 or the equivalent thereof by S&Por P1 or the equivalent thereof by Moody's and (b) which provides for a fixedincome and has a maturity date of three months or less. 

"Casualty" means any act or occurrence of any kind ornature that results in damage, loss or destruction to an asset.

"CERCLA" means the Comprehensive Environmental ResponseCompensation and Liability Act, 42 U.S.C. Sec. 9601 et. seq. and its implementingregulations and amendments.

"CERCLIS" means the Comprehensive Environmental ResponseCompensation and Liability Inventory System established pursuant to CERCLA.

"Change of Law" shall have the meaning set forth inSection 9.02.

"Citizen" has the meaning set forth in Section 5.19.

"Closing Certificate" has the meaning set forth in Section4.01(e).

"Closing Date" means June 29, 2001.

"Code" means the Internal Revenue Code of 1986, asamended, or any successor Federal tax code.

"Collateral" means the real and personal property in whichthe Collateral Agent, in its capacity as collateral agent, for itself and theequal and ratable benefit of the Secured Creditors, is granted a securityinterest pursuant to any of the Collateral Documents.

"Collateral Agent" means the Administrative Agent or itsdesignee, in its capacity as Collateral Agent under any Loan Document.

"Collateral Assignment of Material Contracts" means acollateral assignment of contract in form satisfactory to the Collateral Agent,pursuant to which the Parent or a Subsidiary assigns the rights under suchcontract to the Collateral Agent for collateral purposes and for the equal andratable benefit of the Secured Creditors, along with any other documentsrelating thereto reasonably requested by the Collateral Agent to evidence theparties' consent to such assignment and release or waiver of claims under suchcontract.

"Collateral Documents" means each of the Pledge Agreement,the Security Agreements, the Aircraft Chattel Mortgages, the Trademark SecurityAgreements, the Information Disclosure Certificates, and the CollateralAssignment of Material Contracts (to the extent requested by the CollateralAgent), together with acknowledgment copies of duly recorded UCC-1 financingstatements and other documents (satisfactory in form and content to theCollateral Agent in all respects) pertaining to the Collateral and evidencingrecordation thereof in filing offices deemed necessary by the Collateral Agent,each Waiver Agreement requested by the Collateral Agent, duly executed counterpartsof the Mortgages, together with the UCC-1 (and UCC-2, for Georgia) financingstatements pertaining thereto.

"Collateral Locations" shall mean the respective chiefexecutive office of the Parent and each Subsidiary and those additionallocations, if any, of the Parent and each Domestic Subsidiary set forth anddescribed in the Information Disclosure Certificates.

"Commitment" means, with respect to each Lender,(a) the  amount set forth oppositethe name of such Lender on the signature pages hereof, and (b) as to any Lenderwhich enters into any Assignment and Acceptance (whether as transferor Lenderor as Assignee thereunder), the amount of such Lender's Commitment after givingeffect to such Assignment and Acceptance as set forth in Schedule Ithereto, in each case as such amount may be reduced from time to time pursuantto Sections  2.09 and 2.10.

"Commitment Share" means, with regard to any amount andwith respect to any Lender, such Lender's portion of such amount, based on theratio such Lender's Commitment bears to the aggregate of all Commitments.

"Compliance Certificate" has the meaning set forth inSection 6.01(c).

"Condemnation" means any taking of title, of use, or ofany other property interest under the exercise of the power of eminent domain,whether temporarily or permanently, by any governmental authority or by anyPerson acting under governmental authority.

"Condemnation Awards" means any and all judgments, awardsof damages (including, but not limited to, severance and consequential damages),payments, proceeds, settlements, amounts paid for a taking in lieu ofCondemnation, or other compensation heretofore or hereafter made, includinginterest thereon, and the right to receive the same, as a result of, or inconnection with, any Condemnation or threatened Condemnation.

"Consolidated Debt" means at any date the Debt of theParent and its Consolidated Subsidiaries, determined on a consolidated basis asof such date.

"Consolidated EBITDA" means the sum of the following,calculated on a consolidated basis in accordance with GAAP for the Parent andthe Consolidated Subsidiaries, for the relevant fiscal period:  (a) Consolidated Net Income, plus (b)Consolidated Interest Expense (to the extent deducted in determiningConsolidated Net Income), plus (c) Amortization (to the extent deducted indetermining Consolidated Net Income), plus (d) Depreciation (to the extentdeducted in determining Consolidated Net Income), plus (e) Consolidated Taxes(to the extent deducted in determining Consolidated Net Income), plus (f) anyRestructuring Costs actually incurred during such fiscal period in an amountnot to exceed $5,000,000 in the aggregate over all such fiscal periods.

"Consolidated EBILTDA" means the sum of the following,calculated on a consolidated basis in accordance with GAAP for the Parent andthe Consolidated Subsidiaries, for the relevant fiscal period:  (a) Consolidated EBITDA, plus (b) allConsolidated Lease Expense.

"Consolidated Fixed Charges" means the sum of thefollowing, calculated on a consolidated basis in accordance with GAAP for theParent and the Consolidated Subsidiaries, for the relevant fiscal period: (a)Consolidated Interest Expense, plus (b) Consolidated Lease Expense, plus (c)Scheduled Principal Amortization, plus (d) Dividends paid or declared by theParent.

"Consolidated Interest Expense" for any period means(a) interest, whether expensed or capitalized, in respect of Debt of theParent or any of the Consolidated Subsidiaries outstanding during such period,determined on a consolidated basis in accordance with GAAP, and (b) allprogram expenses payable under a Receivables Securitization Program.

"Consolidated Lease Expense" for any period ofdetermination means the sum of the Parent's and each Consolidated Subsidiary'sobligations for current minimum payments for operating leases determined inaccordance with GAAP on a consolidated basis.

"Consolidated Net Income" means, for any period, the NetIncome of the Parent and the Consolidated Subsidiaries determined on aconsolidated basis, but excluding (a) extraordinary items and (b) anyequity interests of the Parent or any Consolidated Subsidiary in the unremittedearnings of any Person that is not a Subsidiary.

"Consolidated Operating Income" means, for any period, theOperating Income of the Parent and the Consolidated Subsidiaries determined ona consolidated basis.

"Consolidated Subsidiary" means at any date any Subsidiaryor other entity the accounts of which, in accordance with GAAP, would beconsolidated with those of the Parent in its consolidated financial statementsas of such date.

"Consolidated Tangible Net Worth" means, at any time,Stockholders' Equity, less the sum of the value, as set forth or reflected onthe most recent consolidated balance sheet of the Parent and the ConsolidatedSubsidiaries, prepared in accordance with GAAP, of:
(a)    Anysurplus resulting from any write up of assets subsequent to December 31, 2000;(b)   All assets which would be treated as intangible assets forbalance sheet presentation purposes under GAAP, including, without limitation,goodwill (whether representing the excess of cost over book value of assetsacquired, or otherwise), trademarks, tradenames, copyrights, patents andtechnologies, and unamortized debt discount and expense;(c)    To the extent not included in (b) of this definition, anyamount at which shares of Capital Stock of the Parent appear as an asset on thebalance sheet of the Parent and the Consolidated Subsidiaries;(d)   Loans or advances to stockholders, directors, officers oremployees; and(e)    To the extent not included in (b) of this definition, deferredexpenses.
"Consolidated Taxes" means, for any period ofdetermination, the sum of the Parent's and each Consolidated Subsidiary's cashfederal and state income taxes, determined in accordance with GAAP on aconsolidated basis.

"Consolidated Total Tangible Assets" means, at any time,(a) the total assets of the Parent and the Consolidated Subsidiaries,determined on a consolidated basis, as set forth or reflected on the mostrecent consolidated balance sheet of the Parent and the ConsolidatedSubsidiaries, prepared in accordance with GAAP, minus (b) all intangible assetsof the Parent and the Consolidated Subsidiaries, determined on a consolidatedbasis, as set forth or reflected on the most recent consolidated balance sheetof the Parent and the Consolidated Subsidiaries, prepared in accordance withGAAP.

"Contributed Receivables" means Receivables which arecontributed to the Receivables Subsidiary as equity Investments thereinpursuant to a Receivables Securitization Program.

"Contribution Agreement" means the certain ContributionAgreement, substantially in the form of Exhibit L, by and among each ofthe Borrowers and each of the Guarantors in existence on the Closing Date andcreated or acquired thereafter from time to time, together with all amendmentsor supplements thereto.

"Controlled Group" means all members of a controlled groupof corporations and all trades or businesses (whether or not incorporated)under common control which, together with the Parent and the Borrowers, aretreated as a single employer under Section 414 of the Code.

"Costs" means, with respect to a particular asset, thesales, marketing, and related costs anticipated to be incurred by theCollateral Agent in the liquidation of such asset, as determined from time totime by the Collateral Agent in its commercially reasonable, good faithjudgment.

"Current Receivables Factor" means a fraction, expressedas a decimal, the numerator of which is line item 8, "Net Pool Balance," on themost recent Monthly Servicer Report delivered in connection with the CurrentReceivables Program and the denominator of which is line item 4(e), "ReportedEnding A/R Balance Net of COD," on the same report; provided that if anyamendment to the Current Receivables Program results in either of the foregoingline items' no longer being utilized in such report, or results in anappreciable change in the meaning of either of such terms or the method inwhich either of them is calculated, then the "Current Receivables Percentage"shall mean such other percentage selected by the Administrative Agent in itsgood faith commercially reasonable judgment which most closely approximates thedefinition intended above.

"Current Receivables Program" means that certainReceivables Securitization Program operated pursuant to that certainReceivables Purchase Agreement dated as of December 28, 2000, by and amongAirborne Credit, Inc., Airborne Express, Inc., Blue Ridge Asset FundingCorporation, and Wachovia Bank, N.A., as amended from time to time, so long asWachovia remains a party thereto.

"Debt" of any Person means at any date, withoutduplication, (a) all obligations of such Person for borrowed money, (b) allpayment obligations of such Person evidenced by bonds, debentures, notes orother similar instruments, (c) all obligations of such Person to pay thedeferred purchase price of property or services, except trade accounts payableand accrued expenses arising in the ordinary course of business and paid in accordancewith their terms, (d) all obligations of such Person as lessee under capitalleases or leases for which such Person retains tax ownership of the propertysubject to a lease, (e) all obligations of such Person to reimburse any lenderor other Person in respect of amounts payable under a lender's or banker'sacceptance, (f) all Redeemable Preferred Stock of such Person (in the eventsuch Person is a corporation), (g) all obligations of such Person to reimburseany lender or other Person in respect of amounts paid or undrawn amountsavailable to be paid under a letter of credit or similar instrument, (h) allDebt of others secured by a Lien on any asset of such Person, whether or notsuch Debt is assumed by such Person, (i) all obligations of such Person withrespect to interest rate protection agreements, foreign currency exchangeagreements or other hedging arrangements (valued as the termination valuethereof computed in accordance with a method approved by the International SwapDealers Association and agreed to by such Person in the applicable hedgingagreement, if any), (j) all principal amounts outstanding and owed to Personsother than the Parent or any Subsidiary under the items described in clause (a)of the definition of Receivables Program Obligations, and (k) all Debt ofothers Guaranteed by such Person.

"Debt Service Coverage Ratio" means, calculated for eachFiscal Quarter then ending and the immediately preceding three Fiscal Quarters(determined on a consolidated basis in accordance with GAAP), the ratio of (a)Consolidated EBILTDA to (b) the sum of (i) Consolidated Interest Expense, plus(ii) Consolidated Lease Expense, plus (iii) Scheduled Principal Amortization.

"Default" means any condition or event which constitutesan Event of Default or which with the giving of notice or lapse of time or bothwould, unless cured or waived, become an Event of Default.

"Default Rate" means, with respect to any of theObligations (including, without limitation, the Reimbursement Obligations andthe Loans), on any day, the sum of 2%, plus the then highest interest rate(including the Applicable Margin) which may be applicable to Loans hereunder(irrespective of whether any such type of Loans are actually outstandinghereunder).

"Deferred Compensation Plan" means that certain Express Executive Deferral Planrestated effective January 1, 1999.

"Depreciation" means for any period the sum of alldepreciation expenses of the Parent and the Consolidated Subsidiaries for suchperiod, as determined in accordance with GAAP.

"Designated Account" means each specifically identifieddeposit account or securities account, other than an account which constitutesa Holding Account, of the Parent or a Subsidiary (a) as to which theAdministrative Agent has a duly perfected, first priority security interestpursuant to a blocked account or other agreement, in either case in formsatisfactory to the Administrative Agent, executed and delivered by such Parentor Subsidiary, the depository institution or securities intermediary at whichsuch account is maintained, as the case may be, and the Administrative Agentand (b) with respect to which the Administrative Agent has control of thedisposition of the property or funds maintained in such deposit account orsecurities account, to the express exclusion of such Parent or Subsidiary andall other Persons; provided that, so long as no Event of Default shall haveoccurred and be continuing, (x) the Parent or Subsidiary may utilize from timeto time any interest in such account (and the Administrative Agent agrees tocooperate with the Parent or Subsidiary in gaining access to such interest) and(y) the Parent or Subsidiary, upon request made to the Administrative Agent,may withdraw the principal amount of such account, so long as such withdrawalwould not result in or cause any violation of any other term of this Agreement,including, without limitation, Section 2.12(b).

"Determined Percentage" means 65%; provided that, on andafter any increase in the commitment amount of the Current Receivables Program,the Determined Percentage shall be as determined from time to time by theAdministrative Agent based on its commercially reasonable good faithdiscretion.

"Dividends" means for any period the sum of all dividendsand other distributions paid or declared by Parent during such period inrespect of any Capital Stock and Redeemable Preferred Stock (other thandividends paid or payable in the form of additional Capital Stock).

"Dollar Equivalent" means the Dollar equivalent of theamount of a Letter of Credit denominated in a foreign currency acceptable tothe Foreign LC Issuer, determined by the Administrative Agent on the basis ofits spot rate for the purchase of the appropriate foreign currency withDollars.

"Dollars" or "$" means dollars in lawful currency of theUnited States of America.

"Domestic Business Day" means any day except a Saturday,Sunday or other day on which commercial banks in Georgia are authorized by lawto close.

"Domestic Subsidiary" means any Subsidiary which is not aForeign Subsidiary.

"Eligible Accounts" means those accounts receivables whichconstitute "Eligible Receivables" as defined in the Current ReceivablesProgram; provided that, immediately upon the occurrence of any event(including, without limitation, the termination, expiration, amendment orrestatement of such Current Receivables Program) which results in Wachovia'snot being a party in or to such Current Receivables Program or party to anyreplacement of such Current Receivables Program which is effective immediatelyupon the expiration or termination of the Current Receivables Program, the term"Eligible Accounts" shall thereafter be defined by criteria and standardsestablished by the Administrative Agent in its commercially reasonable, goodfaith discretion.

"Environmental Authority" means any foreign, federal,state, local or regional government that exercises any form of jurisdiction orauthority under any Environmental Requirement.

"Environmental Authorizations" means all licenses,permits, orders, approvals, notices, registrations or other legal prerequisitesfor conducting the business of the Parent or any Subsidiary required by anyEnvironmental Requirement.

"Environmental Judgments and Orders" means all judgments,decrees or orders arising from or in any way associated with any EnvironmentalRequirements, whether or not entered upon consent, or written agreements withan Environmental Authority or other entity arising from or in any wayassociated with any Environmental Requirement, whether or not incorporated in ajudgment, decree or order.

"Environmental Liabilities" means any liabilities, whetheraccrued, contingent or otherwise, arising from and in any way associated withany Environmental Requirements.

"Environmental Notices" means notice from anyEnvironmental Authority or by any other person or entity, of possible oralleged noncompliance with or liability under any Environmental Requirement,including without limitation any complaints, citations, demands or requestsfrom any Environmental Authority or from any other person or entity forcorrection of any violation of any Environmental Requirement or anyinvestigations concerning any violation of any Environmental Requirement.

"Environmental Proceedings" means any judicial oradministrative proceedings arising from or in any way associated with anyEnvironmental Requirement.

"Environmental Releases" means releases as defined inCERCLA or under any applicable state or local environmental law or regulation.

"Environmental Requirements" means any legal requirementrelating to health, safety or the environment and applicable to the Parent orany Subsidiary or the Aggregate Real Properties, including but not limited toany such requirement under CERCLA or similar state legislation and all federal,state and local laws, ordinances, regulations, orders, writs, decrees andcommon law.

"ERISA" means the Employee Retirement Income Security Actof 1974, as amended from time to time, or any successor law.  Any reference to any provision of ERISAshall also be deemed to be a reference to any successor provision or provisionsthereof.

"Euro-Dollar Business Day" means any Domestic Business Dayon which dealings in Dollar deposits are carried out in the London interbankmarket.

"Euro-Dollar Loan" means a Loan which bears or is to bearinterest at a rate based upon the Adjusted London Interbank Offered Rate, andto be made as a Euro-Dollar Loan pursuant to the applicable Notice of Borrowingor Notice of Continuation or Conversion.

"Euro-Dollar Reserve Percentage" has the meaning set forthin Section 2.07(c).

"Event of Default" has the meaning set forth in Section7.01.

"Excess Availability" means, at any time, the amount (ifany) by which (a) the lesser of (i) the Borrowing Base or (ii) the aggregateamount of the Commitments, exceeds (b) the Working Capital Obligations.

"Excluded Aircraft Financing" means each secured financingor sale and leaseback of aircraft of the Parent and its Subsidiaries, providedthat (a) no more than 7 aircraft of the Parent and the Subsidiaries, in theaggregate, may be so used as collateral security or sold and leased back, and(b) the dollar amount of such financings and consideration (cash and non-cash)paid for such sales shall not exceed $160,000,000 in the aggregate.

"Excluded Receivables" means all Receivables other thanPurchased Receivables and Contributed Receivables.

"Excluded Receivables Assets" means (a) all goods ofthe Parent and the Subsidiaries held for sale or lease or to be furnished undera contract of service (including raw materials, work in process, finished goodsand materials used or consumed in the manufacture or production thereof), goodsthat are returned to or repossessed, and all accessions thereto and productsthereof and documents therefor (collectively, "Inventory"), other than returnedgoods, if any, relating to the sale that gave rise to any Receivables which areincluded in the Receivables Program Related Assets ("Related Returned Goods");(b) Excluded Receivables; and (c) any Receivables or other proceedsof Inventory created or arising (i) after an Event of Default specified in(h) or (i) of Section 7.01 (other than proceeds of RelatedReturned Goods), or (ii) after termination of purchases under theReceivables Securitization Program.

"Executive Office" means, with respect to the Parent orany of the Subsidiaries, the chief executive office address of such Persondesignated as such in the Information Disclosure Certificate delivered by suchPerson to the Administrative Agent and Collateral Agent.

"Facility Fee" has the meaning set forth in Section2.08(a).

"Fair Market Value" means, with respect to a particularasset, the price a willing buyer would pay to a willing seller in anarm's-length transaction between unrelated parties, as determined from time totime by the Administrative Agent in its commercially reasonable, good faithjudgment.

"Federal Funds Rate" means, for any day, the rate perannum (rounded upward, if necessary, to the next higher 1/100th of 1%) equal tothe weighted average of the rates on overnight Federal funds transactions withmembers of the Federal Reserve System arranged by Federal funds brokers on suchday, as published by the Federal Reserve Bank of New York on the DomesticBusiness Day next succeeding such day, provided that (a) if the day forwhich such rate is to be determined is not a Domestic Business Day, the FederalFunds Rate for such day shall be such rate on such transactions on the nextpreceding Domestic Business Day as so published on the next succeeding DomesticBusiness Day, and (b) if such rate is not so published for any day, the FederalFunds Rate for such day shall be the average rate charged to the AdministrativeAgent on such day on such transactions, as determined in good faith by theAdministrative Agent.

"Financial Covenants" means any financial covenants,financial covenant ratios, or other covenants directly measured by a Person'sfinancial standing and performance.

"Fiscal Month" means any fiscal month of the Parent.

"Fiscal Quarter" means any fiscal quarter of the Parent.

"Fiscal Year" means any fiscal year of the Parent.

"Foreign LC Issuer" means each of Bank of America, N.A.,and Wachovia.

"Foreign Subsidiary" means a Subsidiary (a) locatedoutside the United States and (b) which, with respect to either of theBorrowers, would be a "controlled foreign corporation" deemed to hold "UnitedStates property" under Section 956 of the Code solely as a result of becoming aGuarantor by delivering a Subsidiary Guaranty.

"GAAP" means generally accepted accounting principles inthe United States of America applied on a basis consistent with those which, inaccordance with Section 1.02, are to be used in making the calculations forpurposes of determining compliance with the terms of this Agreement.

"Guarantee" by any Person means any obligation, contingentor otherwise, of such Person directly or indirectly guaranteeing any Debt orother obligation of any other Person and, without limiting the generality ofthe foregoing, any obligation, direct or indirect, contingent or otherwise, ofsuch Person (a) to secure, purchase or pay (or advance or supply funds for thepurchase or payment of) such Debt or other obligation (whether arising byvirtue of partnership arrangements, by agreement to keep-well, to purchaseassets, goods, securities or services, to provide collateral security, totake-or-pay, or to maintain financial statement conditions or otherwise) or (b)entered into for the purpose of assuring in any other manner the obligee ofsuch Debt or other obligation of the payment thereof or to protect such obligeeagainst loss in respect thereof (in whole or in part), provided that theterm Guarantee shall not include endorsements for collection or deposit in theordinary course of business.  The term"Guarantee" used as a verb has a corresponding meaning.

"Guarantor" means the Parent and each Subsidiary which hasdelivered a Subsidiary Guaranty to the Administrative Agent.

"Hazardous Materials" includes, without limitation, (a)solid or hazardous waste, as defined in the Resource Conservation and RecoveryAct of 1980, 42 U.S.C. Sec. 6901 et seq. and its implementing regulations andamendments, or in any applicable state or local law or regulation, (b)"hazardous substance", "pollutant", or "contaminant" as defined in CERCLA, orin any applicable state or local law or regulation, (c) gasoline, or any otherpetroleum product or by-product, including, crude oil or any fraction thereof,(d) toxic substances, as defined in the Toxic Substances Control Act of 1976,or in any applicable state or local law or regulation and (e) insecticides,fungicides, or rodenticides, as defined in the Federal Insecticide, Fungicide,and Rodenticide Act of 1975, or in any applicable state or local law orregulation, as each such Act, statute or regulation may be amended from time totime.

"Holding Account" means each specifically identifieddeposit account or securities account of the Parent or a Subsidiary (a) as towhich the Administrative Agent has a duly perfected, first priority securityinterest pursuant to a blocked account or other agreement, in either case inform satisfactory to the Administrative Agent, executed and delivered by suchParent or Subsidiary, the depository institution or securities intermediary atwhich such account is maintained, as the case may be, and the AdministrativeAgent; (b) with respect to which the Administrative Agent has control of thedisposition of the property or funds maintained in such deposit account orsecurities account, to the express exclusion of such Parent or Subsidiary andall other Persons; and (c) which contains Net Cash Proceeds which the Parent orSubsidiary intends to apply to the repair or replacement, as the case may be,of assets as contemplated in Section 2.12(c).

"Income Available for Fixed Charges" means, for anyperiod, (a) Consolidated EBILTDA, less (b) the sum of (i) cash CapitalExpenditures and (ii) Consolidated Taxes.

"Indenture" means that certain Indenture dated as ofDecember 15, 1992, as supplemented by that certain First Supplemental Indenturedated as of September 15, 1995, relating to Express' 7.35% Notes Due 2005, asfurther supplemented by that certain Second Supplemental Indenture Relating toExpress' 8-7/8% Notes Due 2002 dated February 12, 1997, as further supplementedby that certain Third Supplemental Indenture dated as of the Closing Date.

"Indenture Documents" means the Indenture and each of theother documents, agreements, instruments, debentures, notes, or evidences ofindebtedness from time to time issued, executed, delivered, or entered into inconnection with, or pursuant to, the Indenture.

"Information Disclosure Certificate" means each of theInformation Disclosure Certificates, substantially in the form of Exhibit M,executed and delivered to the Administrative Agent and the Collateral Agent.

"Interest Period" means, with respect to each Euro-DollarBorrowing, the period commencing on the date of such Borrowing and ending onthe numerically corresponding day in the first, second, third, or sixth monththereafter, as the Borrowers may elect in the applicable Notice of Borrowing orNotice of Continuation or Conversion; provided that:
(a)    anyInterest Period (subject to paragraph (c) below) which would otherwise end on aday which is not a Euro-Dollar Business Day shall be extended to the nextsucceeding Euro-Dollar Business Day unless such Euro-Dollar Business Day fallsin another calendar month, in which case such Interest Period shall end on thenext preceding Euro-Dollar Business Day;(b)   any Interest Period which begins on the last Euro-DollarBusiness Day of a calendar month (or on a day for which there is no numericallycorresponding day in the appropriate subsequent calendar month) shall, subjectto paragraph (c) below, end on the last Euro-Dollar Business Day of theappropriate subsequent calendar month; and(c)    no Interest Period may be selected which begins before theTermination Date and would otherwise end after the Termination Date.
"Investment" means any investment in any Person, whetherby means of (a) purchase or acquisition of all or substantially all of theassets of such Person (or of a division or line of business of such Person),(b) purchase or acquisition of obligations or securities of such Person,(c) capital contribution to such Person, (d) loan or advance to suchPerson, (e) making of a time deposit with such Person, (f) Guaranteeor assumption of any obligation of such Person or (g) by any other means.

"Issuers" means (a) the Administrative Agent and theForeign LC Issuers as issuers of Letters of Credit under clause (b) of thedefinition of "Letter of Credit" and (b) each issuer of Letters of Creditoutstanding on the date of this Agreement and listed on Schedule 1.01(L);"Issuer" means each of them, as the context requires.

"Lender" means each bank or other financial institutionlisted on the signature pages hereof as having a Commitment, and its successorsand assigns.

"Lending Office" means, as to each Lender, (a) its officelocated at its address set forth on the signature pages hereof (or such otheroffice identified on the signature pages hereof as its Lending Office) and (b)as to any Lender which enters into any Assignment and Acceptance (whether astransferor Lender or as Assignee thereunder), as set forth in Schedule Ithereto, or in each case such other office as such Lender may hereafterdesignate as its Lending Office by notice to the Borrowers and theAdministrative Agent.

"Letter of Credit" means (a) each outstanding letter ofcredit listed on Schedule 1.01(L) and (b) each commercial letter ofcredit issued by an Issuer pursuant to Article 2 for the account of theBorrowers on or after the Closing Date.

"Letter of Credit Fee" has the meaning set forth inSection 2.22.

"Letter of Credit Notice" has the meaning set forth inSection 2.18(b).

"Letter of Credit Obligations" means, at any particulartime, the sum of (a) the Reimbursement Obligations at such time,(b) the aggregate maximum amount available for drawing under Letters ofCredit outstanding at such time and (c) the aggregate maximum amountavailable for drawing under Letters of Credit the issuance of which has beenauthorized by the Administrative Agent but which have not yet been issued.

"Letter of Credit Application Agreement" shall mean, withrespect to a Letter of Credit, such form of application therefor (whether in asingle or several documents) as the Administrative Agent may employ in theordinary course of business for its own account, whether or not providing forcollateral security, with such modifications thereto as may be agreed upon bythe Administrative Agent and the Borrowers and are not materially adverse tothe interests of the Lenders; provided, however, that in the event of anyconflict between the terms of any Letter of Credit Application Agreement andthis Agreement, the terms of this Agreement shall control.  

"Leverage Ratio" means the ratio of Adjusted Debt toConsolidated EBILTDA.

"Lien" means, with respect to any asset, any mortgage,deed to secure debt, deed of trust, lien, pledge, charge, security interest,security title, preferential arrangement which has the practical effect ofconstituting a security interest, encumbrance, or servitude of any kind inrespect of such asset to secure or assure payment of a Debt or a Guarantee,whether by consensual agreement or by operation of statute or other law, or byany agreement, contingent or otherwise, to provide any of the foregoing.  For the purposes of this Agreement, theParent and any Subsidiary shall be deemed to own subject to a Lien any assetwhich it has acquired or holds subject to the interest of a vendor or lessorunder any conditional sale agreement, capital lease or other title retentionagreement relating to such asset.

"Liquidity" means, at the time of determination, the sumof (a) Excess Availability, plus (b) the aggregate amount of Parent's and theConsolidated Subsidiaries' cash and Cash Equivalents.

"Loan" means a Base Rate Loan, Euro-Dollar Loan,Syndicated Loan, or Swing Loan, and "Loans" means Base Rate Loans, Euro-DollarLoans,  Syndicated Loans, or SwingLoans, or any or all of them, as the context shall require.

"Loan Documents" means this Agreement, the Notes, theParent Guaranty, the Subsidiary Guaranties, the Collateral Documents, theContribution Agreement, any other agreement or document evidencing, relating toor securing the Obligations, and any other agreement, document or instrumentdelivered from time to time in connection with this Agreement, the Notes, theParent Guaranty, the Subsidiary Guaranties, the Collateral Documents, theContribution Agreement, or the Obligations, as such documents and instrumentsmay be amended or supplemented from time to time.

"London Interbank Offered Rate" has the meaning set forthin Section 2.07(c).

"Margin Stock" means "margin stock" as defined inRegulations T, U or X.

"Material Adverse Effect" means, with respect to anyevent, act, condition or occurrence of whatever nature (including  any adverse determination in any litigation,arbitration, or governmental investigation or proceeding), whether singly or inconjunction with any other event or events, act or acts, condition orconditions, occurrence or occurrences, whether or not related, a materialadverse change in, or a material adverse effect upon, any of (a) the financialcondition, operations, business, properties or prospects of the Parent and itsConsolidated Subsidiaries, taken as a whole, (b) the rights and remedies of theAdministrative Agent, the Collateral Agent, or the Lenders under the LoanDocuments, the Collateral Agent's security interest and Lien against theCollateral, or the ability of any of the Parent, the Subsidiaries, or any otherPerson obligated under a Guarantee of the Obligations to perform itsobligations with respect to the Obligations or under the Loan Documents towhich it is a party (including, without limitation, the repudiation, revocationor any attempt to do the same by any Person obligated under a Guarantee of theObligations or any other Loan Document), as applicable, or (c) the legality,validity or enforceability of any Loan Document.

"Material Contract" means any contract, lease, instrument,guaranty or license, or other arrangement (other than any of the LoanDocuments), whether written or oral, for which notice is given to theAdministrative Agent or the Collateral Agent pursuant to Section 6.11 or whichhas been identified by the Administrative Agent or the Collateral Agentpursuant to Section 6.11.

"Moody's" means Moody's Investor Service, Inc.

"Mortgage" means each of those certain deeds of trust ormortgages, substantially in the form of Exhibit O, executed anddelivered pursuant to this Agreement, in which certain of the Parent and theSubsidiaries grant a first priority security title to and Lien on the RealProperties to the Collateral Agent for the equal and ratable benefit of theSecured Creditors, subject only to the Permitted Encumbrances applicablethereto, as security for payment of the Obligations and the Parent's and theSubsidiaries' obligations under the Indenture (including, without limitation,the 1992 Notes and the 1995 Notes), together with all amendments andsupplements thereto.

"Multiemployer Plan" shall have the meaning set forth inSection 4001(a)(3) of ERISA.

"Net Cash Proceeds" shall mean, in each case as set forthin a statement in reasonable detail delivered by the Parent or the Borrowers tothe Administrative Agent: 
(a)    withrespect to the disposition of assets by the Parent or any Subsidiary, theexcess, if any, of (i) the cash proceeds received in connection with suchdisposition over (ii) the sum of (A) the principal amount of any Debt (otherthan the Loans) which is secured by such asset and which is required to berepaid in connection with the disposition thereof, plus (B) the reasonableout-of-pocket expenses incurred by the Parent or any Subsidiary, as the casemay be, in connection with such disposition, plus (C) so long as no Event ofDefault is in existence, provision for taxes, including income taxes,attributable to the disposition of such asset; or(b)   with respect to any cash proceeds received by the Parent orany Subsidiary in respect of the issuance of any Capital Stock or RedeemablePreferred Stock or the incurring of any Debt for money borrowed (except Debtsecured by Purchase Money Liens), all such cash proceeds, after deductingtherefrom all reasonable and customary costs and expenses incurred by theParent or such Subsidiary directly in connection with the issuance of suchCapital Stock or Redeemable Preferred Stock or the incurring of such Debt formoney borrowed.(c)    with respect to any Condemnation Awards or insurance proceedsallocable or attributable to any Casualty to, or Condemnation of, theCollateral or any other assets of the Parent or any of the Subsidiaries, thegross proceeds from any Casualty or Condemnation remaining after payment of allexpenses (including attorneys' fees) incurred in the collection of such grossproceeds.
"Net Income" means, as applied to any Person for anyrelevant fiscal period, the aggregate amount of net income of such Person,after taxes, for such period, as determined in accordance with GAAP.

"Non-U.S. Lender" has the meaning given such term inSection 2.13(c).

"Notes" means each of the Syndicated Loan Notes or theSwing Loan Note, or any or all of them, as the context shall require, togetherwith all amendments, consolidations, modifications, renewals, and supplementsthereto.

"Noteholder" means each of the holders of the 1992 Notesand the 1995 Notes, together with their respective successors and assigns.

"Notice Lenders" has the meaning given such term in Section9.06.

"Notice of Borrowing" has the meaning set forth in Section2.02(a).

"Notice of Continuation or Conversion" has the meaning setforth in Section 2.04.

"Obligations" means all Debts, indebtedness, liabilities,covenants, duties and other obligations of each of the Parent and each of theBorrowers (a) to the Administrative Agent or the Lenders included or arisingfrom time to time under this Agreement or any other Loan Document, whetherevidenced by any note or other writing, whether arising from the extension ofcredit, opening of a letter of credit, acceptance or loan guaranty, including,without limitation, principal, interest, fees, costs, attorney's fees andindemnification amounts and any and all extensions or renewals thereof in wholeor in part, direct or indirect, absolute or contingent, due or to become due,primary or secondary, or joint or several; (b) to the Administrative Agent orany Issuer, with respect to all Letter of Credit Obligations and all otherobligations arising in connection with the issuance of any Letter of Credit;(c) to Wachovia, with respect to all Swing Loans; (d) to Wachovia and itsAffiliates, arising in connection with any banking or related transactions,services or functions provided to Parent or any Subsidiary in connection withthe conduct of the Parent's or such Subsidiary's business (excluding extensionsof credit giving rise to any Debt for money borrowed not related to thisAgreement or any of the other Loan Documents); (e) to any Lender arising out ofany Swap Agreement; and (f) to any Lender in the form of receivables payable bythe Parent or any of the Subsidiaries on account of advances made under orpursuant to a credit card issued by such Lender.

"Officer's Certificate" has the meaning set forth inSection 4.01(f).

"Operating Income" means for any Person for any period theoperating income of such Person as determined in accordance with GAAP.

"Orderly Liquidation Value" means, as to a particularasset, the orderly liquidation value assigned to such asset in the most recentappraisal covering such asset performed by an appraiser reasonably satisfactoryto the Administrative Agent; provided that if any appraisal is not performed onsuch asset when required under this Agreement, the "Orderly Liquidation Value" ofsuch asset shall be the value assigned by the Administrative Agent from time totime in its commercially reasonable, good faith judgment.

"Outstanding Indenture Obligations" means, at any time,the outstanding principal amount of all debentures, notes, instruments, andother evidences of Debt issued under or pursuant to the Indenture and otherIndenture Documents.

"Parent" means Airborne Inc., a Delaware corporation, andits successors and permitted assigns.

"Parent Guaranty" means that certain Parent Guaranty,substantially in the form of Exhibit R, executed and delivered by theParent in favor of the Administrative Agent, for the ratable benefit of theLenders, together with all amendments and supplements thereto.

"Participant" has the meaning set forth in Section10.08(b).

"PBGC" means the Pension Benefit Guaranty Corporation orany entity succeeding to any or all of its functions under ERISA.

"Performance Pricing Determination Date" has the meaningset forth in Section 2.07(a).

"Permitted Acquisition" means the acquisition by theParent or a Borrower of 100% of the issued and outstanding capital stock orother ownership interests of, or all or substantially all of the assets of, aPermitted Target, so long as (a) such acquisition is made on a negotiated basiswith the approval of the Board of Directors or similar body of the Person to beacquired; (b) the then fair market value of the consideration to be paid forsuch acquisition, when added to the fair market value of the consideration paid(determined as of the time such consideration was paid) in all otheracquisitions consummated on or after the Closing Date and the amount ofInvestments allowed under Section 6.16(o), does not exceed the lesser of$20,000,000 or 2.5% of Consolidated Tangible Net Worth; (c) the then fairmarket value of the consideration to be paid for such acquisition, when addedto the fair market value of the consideration paid (determined as of the timesuch consideration was paid) in all other acquisitions consummated in the sameFiscal Year does not exceed $5,000,000; (d) within 15 Domestic Business Daysprior to such acquisition the Parent or the Borrowers have delivered to theAdministrative Agent and the Lenders a written certification, satisfactory tothe Administrative Agent and Required Lenders in all respects, demonstratingthe compliance of the Parent and the Borrowers with all of the terms andconditions of this Agreement after giving effect to such acquisition andassuming that such Permitted Target had been a Subsidiary of the Parent for theimmediately preceding 12 months; and (e) the Parent or the Borrowers comply,and cause such Permitted Target to comply, with Section 6.27.

"Permitted Encumbrances" means, (a) as to all AviationChattel, all encumbrances of record in the FAA registry in Oklahoma Cityexisting on the Closing Date; (b) as to each parcel of the Real Properties, theencumbrances expressly permitted by the Mortgage with respect to such parcel ofthe Real Properties; and (c) as to all other Collateral (other than RealProperty and the Aviation Chattel), the encumbrances set forth on Schedule1.01(P).  

"Permitted Target" means a corporation, limited liabilitycompany or partnership engaged in a related line of business of the Parent orits Wholly-Owned Subsidiaries.

"Person" means an individual, a corporation, a limitedliability company, a partnership, an unincorporated association, a trust or anyother entity or organization, including, but not limited to, a government orpolitical subdivision or an agency or instrumentality thereof.

"Plan" means at any time an employee pension benefit planwhich is covered by Title IV of ERISA or subject to the minimum fundingstandards under Section 412 of the Code and is either (a) maintained by amember of the Controlled Group for employees of any member of the ControlledGroup or (b) maintained pursuant to a collective bargaining agreement or anyother arrangement under which more than one employer makes contributions and towhich a member of the Controlled Group is then making or accruing an obligationto make contributions or has within the preceding 5 plan years madecontributions.

"Pledge Agreement" means a Pledge Agreement substantiallyin the form of Exhibit N, or in such other form as the AdministrativeAgent may approve with respect to Persons other than corporations, in which theParent or a Subsidiary, as the case may be, grants the Collateral Agent, forthe equal and ratable benefit of the Secured Creditors, a security interest inand pledge of all of the capital stock, membership interests, or other units ofownership of a Receivables Subsidiary (including, without limitation, AirborneCredit, Inc.) or a Aircraft Financing Subsidiary, together with all amendmentsand supplements thereto.

"Prime Rate" refers to that interest rate so denominatedand set by Wachovia from time to time as an interest rate basis forborrowings.  The Prime Rate is but oneof several interest rate bases used by Wachovia.  Wachovia lends at interest rates above and below the Prime Rate.

"Public Accountants" means the Parent's independentcertified public accounts as of the Closing Date and such other firm or firmsof nationally recognized independent certified public accountants which may beretained by the Parent thereafter for the purpose of auditing its financialstatements.

"Purchase Money Financing" means any secured financing ofthe purchase price of equipment, so long as any Lien arising from suchfinancing constitutes a Purchase Money Lien.

"Purchase Money Lien" means any Lien (including a negativepledge arrangement) granted by Parent or any Subsidiary from time to time tovendors or financiers of equipment to secure the payment of the purchase pricethereof so long as (a) such Liens or arrangement extend only to the specificequipment so purchased, (b) secure or relate to only such deferred paymentobligation and related interest, fees and charges and no other Debt, and (c)are promptly released upon the payment in full of such purchase price andrelated interest, fees and charges.

"Purchase Money Note" means a promissory note evidencingthe obligation of the Receivables Subsidiary to pay to the Parent or any of itsSubsidiaries the purchase price for Purchased Receivables in connection withthe Receivables Securitization Program, which note shall be repaid from cashavailable to the Receivables Subsidiary, other than cash required to be held asreserves pursuant to Receivables Program Documents, amounts paid in respect ofinterest, principal and other amounts owing under Receivables Program Documentsand amounts paid in connection with the purchase of additional Receivables.

"Purchased Receivables" means Receivables which areactually purchased pursuant to the Receivables Program Documents, for apurchase price determined pursuant thereto.

"Quarterly Payment Date means each March 31, June 30,September 30 and December 31, or, if any such day is not a DomesticBusiness Day, the next succeeding Domestic Business Day.

"Real Properties" means the parcels of real propertydescribed in Schedule 1.01 (R).

"Real Properties Documentation" shall mean the followingas to each parcel of the Real Properties:

(i)                 an owner's/lessee's affidavit for each parcel or tract of suchReal Property;

(ii)               such consents, acknowledgments, intercreditor or attornmentand subordination agreements as the Administrative Agent may require from anyThird Parties with respect to any portion of such Real Property;

(iii)              a certificate as to the insurance required by the relatedMortgage, to the extent not furnished pursuant to Section 6.08;

(iv)             an indemnification agreement in form satisfactory to theCollateral Agent regarding hazardous materials for such Real Property;

(v)               an appraisal of such Real Property, prepared by an appraiserreasonably satisfactory to the Administrative Agent and engaged by and onbehalf of the Administrative Agent and the Lenders; and

(vi)             any revenue ruling or similar assurance from the department orrevenue or taxation requested by the Administrative Agent with respect to anystamp, intangible or other taxes payable in connection with the filing forrecord of any of the Mortgages.

"Receivables" means all rights of the Parent or theSubsidiaries to payment, whether constituting an account, chattel paper,instrument, general intangible or otherwise, arising from the sale of goods orservices (including rights under bill and hold arrangements) by the Parentor any Subsidiary (and including the right to payment of any interest orfinance charges and other obligations with respect thereto).

"Receivables Program Assets" means (a) all PurchaseReceivables and Contributed Receivables transferred by the Parent or anySubsidiary (including the Receivables Subsidiary) pursuant to theReceivables Program Documents; provided, however, that the term"Receivables Program Assets" shall not include any Excluded Receivables Assets,(b) all Receivables Program Related Assets, and (c) all collections(including recoveries) and other proceeds of the assets described in theforegoing clauses (a) and (b).

"Receivables Program Documents" means (a) a receivablespurchase agreement, pooling and servicing agreement, credit agreement,agreements to acquire undivided interests or other agreement to transfer, orcreate a security interest in, Receivables Program Assets, in each case asamended, modified, supplemented or restated and in effect from time to timeentered into by the Parent and/or any of the Subsidiaries (including theReceivables Subsidiary), and (b) each other instrument, agreement andother document entered into by the Parent or any of the Subsidiaries (includingthe Receivables Subsidiary) relating to the transactions contemplated bythe items referred to in clause (a) above, in each case as amended,modified, supplemented or restated and in effect from time to time.

"Receivables Program Obligations" means (a) notes,trust certificates, undivided interests, partnership interests or otherinterests representing the right to be paid a specified principal amount fromthe Receivables Program Assets, and (b) related obligations of the Parent andany of the Subsidiaries (including, without limitation, rights in respect ofinterest or yield, breach of warranty claims and expense reimbursement andindemnity provisions) and other Standard Securitization Undertakings.

"Receivables Program Related Assets" means, with respectto Purchased Receivables and Contributed Receivables (but not ExcludedReceivables), (a) rights of the seller or contributor  thereof under the documentation governing orrelating to such Receivables, including all contracts pursuant to which anyaccount party or other party is obligated to make payment on any suchReceivable, and all related purchase orders, invoices and other agreements,documents, books, records and other media for the storage of information(including tapes, disks, punch cards, computer programs and databases andrelated property), (b) all of the right, title and interest of the selleror contributor thereof in the goods, if any, relating to the sale that gaverise to such Receivable, all other security interests or liens and propertysubject thereto from time to time purporting to secure payment of suchReceivable, whether pursuant to the contract described in clause (a) orotherwise, and all letters of credit, guarantees and other agreements orarrangements of whatever character from time to time supporting or securingpayment of such Receivable, whether pursuant to the contract described inclause (a) or otherwise, and (c) all proceeds of all of theforegoing, including all funds received by any Person in payment of any amountsowed (including invoice prices, finance charges, interest and all othercharges, if any) in respect thereof or otherwise applied to repay ordischarge any such Receivable (including insurance payments applied in theordinary course of business to amounts owed in respect of such Receivable andnet proceeds of any sale or other disposition of repossessed goods that werethe subject of any such Receivable) or other collateral or property of theaccount party or other party directly or indirectly liable for payment of suchReceivables, and any lockboxes or accounts in which such proceeds aredeposited, (d) all spread accounts and other similar accounts (and anyamount on deposit therein) established in connection with the ReceivablesSecuritization Program and (e) any warranty, indemnity, dilution and otherintercompany claim arising out of Receivables Program Documents.

"Receivables Reserve" means, at any time of determination,an amount equal to the outstanding principal amount owned by the Receivables Subsidiaryon any instrument made by it in connection with a Receivables SecuritizationProgram and which is payable to the order of a seller of Receivables ProgramAssets.

"Receivables Securitization Program" means any transactionor series of transactions that may be entered into by the Parent and any of itsSubsidiaries pursuant to which the Parent and/or any of the Subsidiaries maysell, convey or otherwise transfer to the Receivables Subsidiary and (in thecase of a transfer by the Receivables Subsidiary) any other Person, or maygrant a security interest in, any Receivables Program Assets (whether nowexisting or arising in the future); provided that:
(d)   no portion of the indebtedness or any other obligations(contingent or otherwise) of a Receivables Subsidiary or Special PurposeVehicle (i) is guaranteed by the Parent or any of the Subsidiaries (otherthan the Receivables Subsidiary and excluding guarantees of obligationspursuant to Standard Securitization Undertakings), (ii) is recourse to orobligates the Parent or any of the Subsidiaries (other than the ReceivablesSubsidiary) for payment other than pursuant to Standard SecuritizationUndertakings or (iii) subjects any property or asset of the Parent or anyof the Subsidiaries (other than the Receivables Subsidiary), directly orindirectly, contingently or otherwise, to the satisfaction of obligationsincurred in such transactions, other than pursuant to Standard SecuritizationUndertakings,(e)    neither the Parent nor any of the Subsidiaries (other than theReceivables Subsidiary) have any obligation to maintain or preserve thefinancial condition of a Receivables Subsidiary or a Special Purpose Vehicle orcause such entity to achieve certain levels of operating results; and(f)     the scheduled maturity of any Receivables Program Obligationsof the type described in clause (a) of the definition of "ReceivablesProgram Obligations" is no earlier than the Termination Date.
"Receivables Subsidiary" means a special purposecorporation that is a wholly owned subsidiary of the Parent, created for thesole purpose of, and whose only business shall be, acquisition of theReceivables Program Assets pursuant to the Receivables Securitization Programand those activities incidental to the Receivables Securitization Program.

"Redeemable Preferred Stock" of any Person means anypreferred stock issued by such Person which is at any time prior to theTermination Date either (a) mandatorily redeemable (by sinking fund or similarpayments or otherwise) or (b) redeemable at the option of the holder thereof.

"Refunding Loan" means a newSyndicated Loan made on the day on which (a) an outstanding Syndicated Loan ismaturing as a refinancing thereof or (b) a Base Rate Borrowing is beingconverted to a Euro-Dollar Borrowing, if and to the extent that the proceedsthereof are used entirely for the purpose of refinancing such maturing Loan orLoan being converted, and provided that the maturing Loan or Loan beingconverted is of the same type as the new Loan (that is, both are Syndicated Loans),excluding any difference between the amount of such maturing Loan or Loan beingconverted and any greater amount being borrowed on such day and actually eitherbeing made available to the Borrowers pursuant to Section 2.02(c) or remittedto the Administrative Agent as provided in Section 2.13, in each case ascontemplated in Section 2.02(d).

"Register" hasthe meaning set forth in Section 10.08(c).

"Regulation T" means Regulation T of the Board ofGovernors of the Federal Reserve System, as in effect from time to time,together with all official rulings and interpretations issued thereunder.

"Regulation U" means Regulation U of the Board ofGovernors of the Federal Reserve System, as in effect from time to time,together with all official rulings and interpretations issued thereunder.

"Regulation X" means Regulation X of the Board ofGovernors of the Federal Reserve System, as in effect from time to time,together with all official rulings and interpretations issued thereunder.

"Reimbursement Obligations" means the reimbursement orrepayment obligations of the relevant Borrower to the relevant Issuer pursuantto Section 2.19 with respect to Letters of Credit.

"Related Fund" means, with respect to any Lender that is afund that invests in bank loans, any other fund that invests in bank loans andis advised or managed by the same investment advisor as such Lender.

"Replacement Lender" has the meaning given such term inSection 9.06.

"Required Lenders" means at any time Lenders having atleast 51% of the aggregate amount of the Commitments or, if the Commitments areno longer in effect, Lenders holding at least 51% of the aggregate outstandingprincipal amount of the sum of (a) Syndicated Loans, plus (b) the Letter ofCredit Obligations.

"Restricted Payment" means (a) any dividend or otherdistribution on any shares of the Parent's Capital Stock or RedeemablePreferred Stock (except dividends payable solely in shares of its Capital Stockor Redeemable Preferred Stock), or (b) any payment on account of the purchase,redemption, retirement, defeasance, or other acquisition of or sinking fund for(i) any shares of the Parent's Capital Stock or Redeemable Preferred Stock(except shares acquired upon the conversion thereof into other shares of itsCapital Stock or Redeemable Preferred Stock), or (ii) any option, capitalappreciation rights, stock appreciation rights, warrant or other right toacquire shares of the Parent's Capital Stock or Redeemable Preferred Stock, or(c) any payment prior to the scheduled maturity of the 1992 Notes, the 1995Notes, or other Debt (other than the Obligations) of the Parent or anySubsidiary.

"Restructuring Costs" means restructuring andreorganization costs, including, without limitation, all costs associated withreductions in workforce, incurred by the Parent and the ConsolidatedSubsidiaries during Fiscal Year 2001.

"Scheduled Principal Amortization" means, for any period,the aggregate amount of the principal of any Debt of the Parent or theSubsidiaries which, in accordance with the terms of the instrument or agreementgoverning such Debt, is or becomes due and payable during such period; providedthat the term Scheduled Principal Amortization shall not include the principalamount of any payments made or to be made by the Parent or any Subsidiary aspayment of the $100,000,000 principal payment of the 1992 Notes due on December15, 2002, so long as (a) such payments are made on or after such date or (b)with respect to payments made before such date, the Required Lenders have, uponwritten request made by the Parent or the Borrowers, provided their consent.

"Secured Creditors" means each of the Collateral Agent,the Administrative Agent, the Lenders, the Noteholders, and each of theirrespective successors and assigns.

"Security Agreements" means each of those certain SecurityAgreements dated as of even date herewith, substantially in the form of ExhibitT, and each such agreement delivered after the date hereof, in which theGuarantors grant the Collateral Agent, for the equal and ratable benefit of theSecured Creditors, a security interest in the Collateral described therein.

"Segregated Aviation Chattel" means each airframe, engine,or propeller shown on Schedule 1.01(S). 

"Senior Officer" means any of the following officers of Parentor either of the Borrowers, regardless of actual title: Chief ExecutiveOfficer, Chief Operating Officer, Chief Accounting Officer, Chief FinancialOfficer, Treasurer, Senior Legal Officer.

"S&P" means Standard & Poor's Ratings Group, adivision of McGraw-Hill, Inc.

"Spare Parts" has the meaning given such term in 49 U.S.C.Sec. 40102, as amended from time to time.

"Special Purpose Vehicle" means a trust, partnership orother special purpose Person established by the Parent to implement theReceivables Securitization Program.

"Standard Securitization Undertakings" meansrepresentations, warranties, covenants and indemnities entered into by theParent or any of the Subsidiaries (other than the ReceivablesSubsidiary) that are reasonably customary in accounts receivablesecuritization transactions, as reasonably determined in good faith by theAdministrative Agent.

"Stockholders' Equity" means, at any time, theshareholders' equity of the Parent and the Consolidated Subsidiaries, as setforth or reflected on the most recent consolidated balance sheet of the Parentand the Consolidated Subsidiaries prepared in accordance with GAAP, butexcluding any Redeemable Preferred Stock of the Parent or any the ConsolidatedSubsidiaries.  Shareholders' equitygenerally would include, but not be limited to (a) the par or stated value ofall outstanding Capital Stock, (b) capital surplus, (c) retained earnings, and(d) various deductions such as (i) purchases of treasury stock, (ii) valuationallowances, (iii) receivables due from an employee stock ownership plan, (iv)employee stock ownership plan debt guarantees, and (v) translation adjustmentsfor foreign currency transactions.

"Subsidiary" means any Person, whether now existing orhereafter created or acquired, of which the securities or other ownershipinterests having ordinary voting power to elect a majority of the board ofdirectors or other persons performing similar functions are at the timedirectly or indirectly owned by the Parent, including, without limitation, eachof the Borrowers**.**

"Subsidiary Guaranty" means each Subsidiary Guaranty,substantially in the form of Exhibit S, executed and delivered by eachof the Domestic Subsidiaries in existence on the Closing Date and thereafterexecuted and delivered pursuant to Section 6.27, together with all amendmentsand supplements thereto.

"Supplemental Executive Retirement Plan" means thatcertain Express Supplemental Executive Retirement Plan restated effectiveJanuary 1, 2000.

"Swap Agreement" means any interest rate protectionagreement, hedging agreement, or other similar agreement entered into withrespect to Debt in an amount not to exceed $60,000,000 incurred in connectionwith an Excluded Aircraft Financings.

"Swing Loan" means a Loan made by Wachovia pursuant to Section2.01(b), which must be a Base Rate Loan.

"Swing Loan Note" means the promissory note of theBorrowers, substantially in the form of Exhibit A-2, evidencing theobligation of the Borrowers to repay the Swing Loans, together with allamendments, consolidations, modifications, renewals, and supplements thereto.

"Syndicated Loans" means the Base Rate Loans orEuro-Dollar Loans made pursuant to the terms of Section 2.01(a).

"Syndicated Loan Notes" means the promissory notes of theBorrowers, substantially in the form of Exhibit A-1, evidencing theobligation of the Borrowers to repay Syndicated Loans, together with allamendments, consolidations, modifications, renewals, and supplements thereto.

"Taxes" has the meaning set forth in Section 2.13(c).

"Termination Date" means whichever is applicable of (a)June 30, 2004, (b) the date the Commitments are terminated pursuant to Section7.01 following the occurrence of an Event of Default, or (c) the date theBorrowers terminate the Commitments entirely pursuant to Section 2.09.

"Third Party" means any landlord, lessee, sublessee,warehousemen, servicer, processor, bailee, licensee, and other third partieswhich may, from time to time, be in the possession or control of, or use, anyCollateral or any property on which any Collateral is or may be located,excluding those users of the Real Properties in the ordinary course of businessand on a temporary basis.

"Third Party Claims" means claims of Third Parties againstthe Parent or any Subsidiary for rent, storage, maintenance, repair,processing, servicing or bailment in respect of any Collateral or any propertyon which any Collateral is or may be located.

"Trademark Security Agreement" shall mean a trademarksecurity agreement in form satisfactory to the Collateral Agent, pursuant towhich the Parent or a Subsidiary assigns the rights in and to the intellectualproperty described therein to the Collateral Agent for collateral purposes andfor the equal and ratable benefit of the Secured Creditors.

"Transferee" has the meaning set forth in Section10.08(d).

"U.S.C." means the United States Code as in effect fromtime to time.

"UCC" shall mean the Uniform Commercial Code SecuredTransactions of Georgia (O.C.G.A. Art. 11-9), as in effect from time to time.

"Unfunded Vested Liabilities" means, with respect to anyPlan at any time, the amount (if any) by which (a) the present value of allvested nonforfeitable benefits under such Plan exceeds (b) the fair marketvalue of all Plan assets allocable to such benefits, all determined as of thethen most recent valuation date for such Plan, but only to the extent that suchexcess represents a potential liability of a member of the Controlled Group tothe PBGC or the Plan under Title IV of ERISA.

"Unused Commitment" means at any date, with respect to anyLender, (a) its Commitment, less (b) an amount equal to the sum of (i) theaggregate outstanding principal amount of such Lender's Syndicated Loans, plus(ii) such Lender's Commitment Share of the outstanding principal amount of allSwing Loans, plus (iii) the Letter of Credit Obligations.

"Wachovia" means Wachovia Bank, N.A., a national bankingassociation, and its successors.

"Waiver Agreement" means a Waiver and Agreement in formsatisfactory to the Collateral Agent, executed and delivered by any Third Partywaiving or subordinating its Third Party Claims and making certain otheragreements in regard to the Collateral.

"Wholly Owned Subsidiary" means any Subsidiary all of theshares of capital stock or other ownership interests of which (exceptdirectors' qualifying shares) are at the time directly or indirectly owned bythe Parent.

"Working Capital Obligations" means the sum at any time of(a) the outstanding principal amount of all Syndicated Loans and Swing Loans,plus (b) the Letter of Credit Obligations.
**SECTION 1.02.                    Accounting Terms and Determinations**
.  

Unless otherwise specified herein, all terms of anaccounting character used herein shall be interpreted, all accountingdeterminations hereunder shall be made, and all financial statements requiredto be delivered hereunder shall be prepared, in accordance with GAAP, appliedon a basis consistent (except for changes concurred in by the PublicAccountants or otherwise required by a change in GAAP) with the most recentaudited consolidated financial statements of the Parent and the ConsolidatedSubsidiaries delivered to the Lenders unless with respect to any such changeconcurred in by the Public Accountants or required by GAAP, in determiningcompliance with any of the provisions of this Agreement or any of the otherLoan Documents: (a) the Parent shall have objected to determining suchcompliance on such basis at the time of delivery of such financial statements,or (b) the Required Lenders shall so object in writing within 30 days after thedelivery of such financial statements, in either of which events suchcalculations shall be made on a basis consistent with those used in thepreparation of the latest financial statements as to which such objection shallnot have been made (which, if objection is made in respect of the firstfinancial statements delivered under Section 6.01 hereof, means the financialstatements referred to in Section 5.04).
**SECTION 1.03.                    References**
.  

Unless otherwise indicated, references in this Agreementto "articles," "exhibits," "schedules," "sections," and other subdivisions arereferences to Articles, Exhibits, Schedules, Sections, and Subdivisions hereof.
**SECTION 1.04.                    Use of Defined Terms**
.  

All terms defined in this Agreement shall have the samedefined meanings when used in any of the other Loan Documents, unless otherwisedefined therein or unless the context shall require otherwise. The terms"accounts," "chattel paper," "instruments," "general intangibles," "inventory,""equipment," and "fixtures," as and when used herein and in the other LoanDocuments, shall have the same meanings given such terms under the UCC.
**SECTION 1.05.                    Terminology**
.  

The terms "herein," "hereof," and "hereunder" and otherwords of similar import refer to this Agreement as a whole and not to anyparticular section, paragraph or subdivision.Any pronoun used shall be deemed to cover all genders.  In the computation of periods of time from aspecified date to a later specified date, the word "from" means "from andincluding" and the words "to" and "until" each means "to but excluding."  The section titles, table of contents andlist of exhibits appear as a matter of convenience only and shall not affectthe interpretation of this Agreement.All references to statutes and related regulations shall include anyamendments of same and any successor statutes and regulations.  All references to any of the Loan Documentsshall include any and all amendment or modifications thereto and any and allrestatements, extensions or renewals thereof.All references to any Person shall mean and include the successors andpermitted assigns of such Person.  Allreferences to "including" and "include" shall be understood to mean "including,without limitation."  All references tothe time of day shall mean the time of day on the day in question in Atlanta,Georgia, unless otherwise expressly provided in this Agreement.  A Default or an Event of Default shall bedeemed to exist at all times during the period commencing on the date that suchDefault or Event of Default occurs to the date on which such Default or Eventof Default is waived in writing pursuant to this Agreement or, in the case of aDefault, is cured within any period of cure expressly provided in thisAgreement; and an Event of Default shall "continue" to be "continuing" untilsuch Event of Default has been waived in writing by Administrative Agent.Whenever the phrase "to the best of any Person's knowledge" or words of similarimport relating to the knowledge or the awareness of such Person are usedherein, such phrase shall mean and refer to (a) the actual knowledge of aSenior Officer of such Person or (b) the knowledge that a Senior Officer ofsuch Person would have obtained if he had engaged in a good faith and diligentperformance of his duties, including the making of such reasonable specificinquiries as may be necessary of the officers, employees or agents of suchPerson and a good faith attempt to ascertain the existence or accuracy of thematter to which such phrase relates.All calculations of money values shall be in Dollars, all Loans madehereunder shall be funded in Dollars, and all amounts payable in respect of anyof the Obligations shall be paid in Dollars.Any agreement entered into by the Administrative Agent or the CollateralAgent pursuant to this Agreement or any of the other Loan Documents, anypayment made by or to or funds received by the Administrative Agent or theCollateral Agent pursuant to or as contemplated by any of the Loan Documents,or any other act taken or admitted to be taken by the Administrative Agent orthe Collateral Agent shall, unless otherwise expressly provided, be created,entered into, made or received or taken or omitted, for the benefit or accountof the Administrative Agent and the Lenders; provided that any Lien created,attached, arising pursuant to or in connection with this Agreement or anyCollateral Document shall be for the equal and ratable benefit of the SecuredCreditors.
**ARTICLE 2     THE CREDITSSECTION **
**2.01.                    Commitments to Make Loans. **

(a)    Syndicated Loans.Each Lender severally agrees, on the terms and conditions set forthherein, to make Syndicated Loans to the Borrowers from time to time before theTermination Date; provided that, immediately after each such Syndicated Loan ismade:
(i)                 the aggregate outstanding principal amount of Syndicated Loansby such Lender shall not exceed the amount of its Commitment, and(ii)               the sum of the aggregate outstanding principal amount of allSyndicated Loans, Swing Loans, and Letter of Credit Obligations shall notexceed the aggregate amount of all Commitments, and(iii)              the Working Capital Obligations shall not exceed the lesser of(A) the aggregate amount of all Commitments and (B) the Borrowing Base; 
Each Syndicated Borrowing under this Section 2.01(a) shallbe in an aggregate principal amount of (X) as to Base Rate Loans, $1,000,000 orany larger integral multiple of $500,000, and (Y) as to Euro-Dollar Loans,$5,000,000 or any larger integral multiple of $1,000,000 (except that in eithercase any such Syndicated Borrowing may be in the aggregate amount of the UnusedCommitments) and shall be made by the several Lenders ratably in proportion totheir respective Commitments.  Withinthe foregoing limits, the Borrowers may borrow under this Section, repay or, tothe extent permitted by Section 2.09 and Section 2.11, prepay Syndicated Loansand reborrow under this Section 2.01(a) at any time before the TerminationDate.
(b)   Swing Loans.  Inaddition to the foregoing, Wachovia shall from time to time, upon the requestof the Borrowers, if the applicable conditions precedent in Article 3 have beensatisfied, make Swing Loans to the Borrowers in an aggregate principal amountat any time outstanding not exceeding $15,000,000; provided that, immediatelyafter such Swing Loan is made, the conditions set forth in clauses (ii) and(iii) of Section 2.01(a) shall have been satisfied.  Each Swing Loan Borrowing under thisSection 2.01(b) shall be in an aggregate principal amount of$1,000,000 or any larger multiple of $500,000.Within the foregoing limits, the Borrowers may borrow under this Section 2.01(b),prepay and reborrow under this Section 2.01(b) at any time before theTermination Date.  Swing Loans shall notbe considered a utilization of the Commitment of Wachovia or any other Lender hereunder.  All Swing Loans shall be made as Base RateLoans.  At any time, upon the request ofWachovia, each Lender (other than Wachovia, which shall retain its ratableshare thereof) shall, on the third Domestic Business Day after such request ismade, purchase a participating interest in Swing Loans in an amount equal toits ratable share (based upon its respective Commitment) of such SwingLoans.  On such third Domestic BusinessDay, each Lender will immediately transfer to Wachovia, in immediatelyavailable funds, the amount of its participation.  Whenever, at any time after Wachovia has received from any suchLender its participating interest in a Swing Loan, the Administrative Agentreceives any payment on account thereof, the Administrative Agent willdistribute to such Lender its participating interest in such amount(appropriately adjusted, in the case of interest payments, to reflect theperiod of time during which such Lender's participating interest wasoutstanding and funded); provided, however, that in the event that such paymentreceived by the Administrative Agent is required to be returned, such Lenderwill return to the Administrative Agent any portion thereof previouslydistributed by the Administrative Agent to it.Each Lender's obligation to purchase such participating interests shallbe absolute and unconditional and shall not be affected by any circumstance,including, without limitation:(i) any set-off, counterclaim, recoupment, defense or other rightwhich such Lender or any other Person may have against Wachovia requesting suchpurchase or any other Person for any reason whatsoever; (ii) theoccurrence or continuance of a Default or an Event of Default or thetermination of the Commitments; (iii) any adverse change in the condition(financial or otherwise) of either of the Borrowers, the Parent, or anyother Person; (iv) any breach of this Agreement by the Parent or either ofthe Borrowers or any other Lender; or (v) any other circumstance,happening or event whatsoever, whether or not similar to any of the foregoing. 
**SECTION 2.02.                    Method of Borrowing Loans..** 

(a)    The Borrowers shall give the Administrative Agent notice (a"Notice of Borrowing"), which shall be substantially in the form of ExhibitE-1, prior to (i) 2:00 P.M. (Atlanta, Georgia, time) on the same DomesticBusiness Day of each Swing Loan Borrowing, (ii) 12:00 Noon (Atlanta, Georgia,time) on the same Domestic Business Day of each Syndicated Loan which is a BaseRate Borrowing, and (iii) 12:00 Noon (Atlanta, Georgia, time) at least 3Euro-Dollar Business Days before each Syndicated Loan which is a Euro-DollarBorrowing, specifying:

(i)                 the date of such Borrowing, which shall be a Domestic BusinessDay in the case of a Base Rate Borrowing or a Euro-Dollar Business Day in thecase of a Euro-Dollar Borrowing,

(ii)               the aggregate amount of such Borrowing,

(iii)              whether the Loans comprising such Borrowing are to be BaseRate Loans, Euro-Dollar Loans, or Swing Loans, and

(iv)             in the case of a Euro-Dollar Borrowing, the duration of theInterest Period applicable thereto, subject to the provisions of the definitionof Interest Period.
(b)   Upon receipt of a Notice of Borrowing for a SyndicatedBorrowing, the Administrative Agent shall promptly notify each Lender of thecontents thereof and of such Lender's ratable share of such SyndicatedBorrowing, and such Notice of Borrowing, once received by the AdministrativeAgent, shall not thereafter be revocable by the Borrowers. 
(c)    Not later than 2:00 P.M. (Atlanta, Georgia, time) on the dateof each Syndicated Borrowing, each Lender shall (except as provided inparagraph (d) of this Section) make available its ratable share of suchSyndicated Borrowing, in Federal or other funds immediately available inAtlanta, Georgia, to the Administrative Agent at its address determinedpursuant to Section 10.01.  Unless theAdministrative Agent determines that any applicable condition specified inArticle 3 has not been satisfied, the Administrative Agent will make the fundsso received from the Lenders available to the Borrowers at the AdministrativeAgent's aforesaid address.  Unless theAdministrative Agent receives notice from a Lender, at the AdministrativeAgent's address referred to in or specified pursuant to Section 10.01, no laterthan 4:00 P.M. (local time at such address) on the Domestic Business Day beforethe date of a Syndicated Borrowing stating that such Lender will not make aSyndicated Loan in connection with such Syndicated Borrowing, theAdministrative Agent shall be entitled to assume that such Lender will make aSyndicated Loan in connection with such Syndicated Borrowing and, in relianceon such assumption, the Administrative Agent may (but shall not be obligatedto) make available such Lender's ratable share of such Syndicated Borrowing tothe Borrowers for the account of such Lender.If the Administrative Agent makes such Lender's ratable share availableto the Borrowers and such Lender does not in fact make its ratable share ofsuch Syndicated Borrowing available on such date, the Administrative Agentshall be entitled to recover such Lender's ratable share from either (but notboth) (i) such Lender, together with interest thereon for each day during theperiod from the date of such Syndicated Borrowing until such sum shall be paidin full at a rate per annum equal to the overnight Federal funds to cover suchamount for each such day during such period, or (ii) the Borrowers (and forsuch purpose shall be entitled, after notice to the Borrowers, to charge suchamount to any account of the Borrowers maintained with the AdministrativeAgent), together with interest thereon for each day during the period from thedate of such Syndicated Borrowing until such sum shall be paid in full at arate per annum equal to the Base Rate or Adjusted London Interbank OfferedRate, whichever is in effect for such Loan, plus the Applicable Margin; providedthat (x) any such payment by the Borrowers of such Lender's ratable share andinterest thereon shall be without prejudice to any rights that the Borrowersmay have against such Lender and (y) until such Lender has paid its ratableshare of such Syndicated Borrowing, together with interest pursuant to theforegoing, it will have no interest in or rights with respect to suchSyndicated Borrowing for any purpose hereunder.  If the Administrative Agent does not exercise its option toadvance funds for the account of such Lender, it shall forthwith notify theBorrowers of such decision.  Unless theAdministrative Agent determines that any applicable condition specified inSection 3 has not been satisfied, Wachovia will make available to the Borrowersat Wachovia's Lending Office the amount of any such Borrowing which is a SwingLoan Borrowing. 

(d)   If any Lender makes a new Syndicated Loan hereunder on a dayon which any Borrower is to repay all or any part of an outstanding SyndicatedLoan from such Lender, such Lender shall apply the proceeds of its newSyndicated Loan to make such repayment as a Refunding Loan and only an amountequal to the difference (if any) between the amount being borrowed and theamount of such Refunding Loan shall be made available by such Lender to theAdministrative Agent as provided in paragraph (c) of this Section, or remittedby such Borrower to the Administrative Agent as provided in Section 2.13, asthe case may be. 

(e)    Notwithstanding anything to the contrary contained in thisAgreement, the Lenders shall not be obligated to make any Euro-Dollar Loans ifthere shall have occurred a Default or an Event of Default, which Default orEvent of Default shall not have been cured or waived, and all Refunding Loansshall be made as Base Rate Loans (but shall bear interest at the Default Rate,if applicable).  Nothing in thepreceding sentence shall obligate, or be deemed to obligate, any of the Lendersto make any Loans at all during the existence of an Event of Default, otherthan Refunding Loans in the event that the Obligations have not beenaccelerated pursuant to Section 7.01. 

(f)     In the event that a Notice of Borrowing fails to specifywhether the Syndicated Loans comprising such Syndicated Borrowing are to beBase Rate Loans or Euro-Dollar Loans, such Syndicated Loans shall be made asBase Rate Loans.  If the Borrowers areotherwise entitled under this Agreement to repay any Syndicated Loans maturingat the end of an Interest Period applicable thereto with the proceeds of a newBorrowing, and the Borrowers fail to repay such Syndicated Loans using its ownmoneys and fails to give a Notice of Borrowing in connection with such newSyndicated Borrowing, a new Syndicated Borrowing shall be deemed to be made onthe date such Syndicated Loans mature in an amount equal to the principalamount of the Syndicated Loans so maturing, and the Syndicated Loans comprisingsuch new Syndicated Borrowing shall be Base Rate Loans. 

(g)    Notwithstanding anything to the contrary contained herein,there shall not be more than 12 Euro-Dollar Borrowings outstanding at any giventime. 

**SECTION 2.03.                    Suretyship Waivers. **

(a)    The obligations of each Borrower hereunder shall beunconditional and absolute and, without limiting the generality of theforegoing, shall not be released, discharged or otherwise affected by:

(i)                 any extension, renewal, settlement, compromise, waiver orrelease in respect of any obligation of any Borrower, the Parent, or anySubsidiary under this Agreement, any Note, or any other Loan Document, byoperation of law or otherwise or any obligation of any guarantor of any of theObligations;

(ii)               any modification or amendment of or supplement to thisAgreement, any Note, or any other Loan Document;

(iii)              any release, nonperfection or invalidity of any direct orindirect security for any obligation of any Borrower, the Parent, or anySubsidiary under this Agreement, any Note, any Loan Document, or anyobligations of any guarantor of any of the Obligations;

(iv)             any change in the corporate existence, structure or ownershipof any Borrower, the Parent, or any Subsidiary or any guarantor of any of theObligations, or any insolvency, bankruptcy, reorganization or other similarproceeding affecting any Borrower, the Parent, or any Subsidiary or anyguarantor of the Obligations, or its assets or any resulting release ordischarge of any obligation of any Borrower, the Parent, or any Subsidiary orany guarantor of any of the Obligations;

(v)               the existence of any claim, setoff or other rights which theBorrower may have at any time against any Borrower, the Parent, or anySubsidiary or any guarantor of any of the Obligations, the AdministrativeAgent, any Lender or any other Person, whether in connection herewith or anyunrelated transactions, provided that nothing herein shall prevent theassertion of any such claim by separate suit or compulsory counterclaim;

(vi)             any invalidity or unenforceability relating to or against anyBorrower, the Parent, or any Subsidiary or any guarantor of any of theObligations, for any reason related to this Agreement, any other Loan Document,or any provision of applicable law or regulation purporting to prohibit thepayment by either of the Borrowers, or any guarantor of the Obligations, of theprincipal of or interest on any Note or any other amount payable by either ofthe Borrowers under this Agreement, the Notes, or any other Loan Document; or

(vii)            any other act or omission to act or delay of any kind by anyBorrower, the Parent, or any Subsidiary or any guarantor of the Obligations,the Administrative Agent, any Lender or any other Person or any othercircumstance whatsoever which might, but for the provisions of this paragraph,constitute a legal or equitable discharge of such Borrower's obligationshereunder, including without limitation, any failure, omission, delay orinability on the part of the Administrative Agent or any Lender to enforce,assert or exercise any right power or remedy conferred on the AdministrativeAgent or any Lender under this Agreement or any other Loan Documents.
(b)   Each Borrower irrevocably waives acceptance hereof, presentment,demand, protest and, to the fullest extent permitted by law, any notice notprovided for herein, as well as any requirement that at any time any action betaken by any Person against such Borrower, any other Borrower, any guarantor ofthe Obligations, or any other Person. 
**SECTION 2.04.                    Continuation and Conversion Elections.**

By delivering a notice (a "Notice of Continuation orConversion"), which shall be substantially in the form of Exhibit E-2,to the Administrative Agent on or before 12:00 noon, Atlanta, Georgia time, ona Domestic Business Day (or Euro-Dollar Business Day, in the case ofEuro-Dollar Loans outstanding), the Borrowers may from time to time irrevocablyelect, by notice on the same Domestic Business Day, in the case of Base RateLoans, or 3 Euro-Dollar Business Days, in the case of Euro-Dollar Loans, thatall, or any portion in an aggregate principal amount of $5,000,000 or anylarger integral multiple of $1,000,000 be, (a) in the case of Base RateLoans, converted into Euro-Dollar Loans or, (b) in the case of Euro-DollarLoans, converted into Base Rate Loans or continued as Euro-Dollar Loans (in theabsence of delivery of a Notice of Continuation or Conversion with respect toany Euro-Dollar Loan at least 3 Euro-Dollar Business Days before the last dayof the then current Interest Period with respect thereto, such Euro-Dollar Loanshall, on such last day, automatically convert to a Base Rate Loan); provided,however, that (x) each such conversion or continuation shall be pro ratedamong the applicable outstanding Loans of all Lenders that have made suchLoans, and (y) no portion of the outstanding principal amount of any Loansmay be continued as, or be converted into, Euro-Dollar Loans when any Eventof  Default has occurred and iscontinuing.
**SECTION 2.05.                    Notes**. 
(a)    The Syndicated Loans of each Lender shall be evidenced by asingle Syndicated Note payable to the order of such Lender for the account ofits Lending Office in an amount equal to the original principal amount of suchLender's Commitment.  The Swing Loans shallbe evidenced by a single Swing Loan Note payable to the order of Wachovia forthe account of its Lending Office in an amount equal to the original principalamount of $15,000,000.(b)   Upon receipt of each Lender's Notes pursuant toSection 4.01, the Administrative Agent shall deliver such Notes to suchLender.  Each Lender shall record, andprior to any transfer of its Notes shall endorse on the schedules forming apart thereof appropriate notations to evidence the date, amount and maturityof, and effective interest rate for, each Loan made by it, the date and amountof each payment of principal made by the Borrower with respect thereto, andsuch schedules of each such Lender's Notes shall constitute rebuttablepresumptive evidence of the respective principal amounts owing and unpaid onsuch Lender's Notes; provided that the failure of any Lender to make, orany error in making, any such recordation or endorsement shall not affect theobligation of the Borrowers hereunder or under the Notes or the ability of anyLender to assign its Notes.  Each Lenderis hereby irrevocably authorized by the Borrowers so to endorse its Notes andto attach to and make a part of any Note a continuation of any such schedule asand when required. 

**SECTION 2.06.                    Maturity of Loans**. 

(a)    Each Euro-Dollar Loan included in any Borrowing will mature,and the principal amount thereof will be due and payable, on the last day ofthe Interest Period applicable to such Borrowing, unless such Euro-Dollar Loanwill be due and payable prior thereto by reason of the provisions of thisAgreement (including, without limitation, Section 7.01).(b)   Notwithstanding the foregoing, the outstanding principalamount of all Loans, if any, together with all accrued but unpaid interestthereon, if any, shall be due and payable on the Termination Date. 

**SECTION 2.07.                    Interest Rates. **

(a)    "Applicable Margin" means, per annum:

(i)                 for the period commencing on the Closing Date to and includingthe first Performance Pricing Determination Date, (A) for any Base Rate Loan,1.50%, and (B) for any Euro-Dollar Loan, 2.125%; and

(ii)               from and after the first Performance Pricing DeterminationDate, for any Base Rate Loan and Euro-Dollar Loan the percentage determined oneach Performance Pricing Determination Date by reference to the table set forthbelow as to each such type of Loan and the Leverage Ratio as determined below.

 

**Leverage Ratio**

Applicable Marginfor Euro-Dollar Loans

Applicable Margin forBase Rate Loans

**Level I**

If  the Leverage Ratio is less than 3.50 to 1.00

 

1.75%

 

1.125%

**Level II**

If  the Leverage Ratio is equal to or greater than 3.50 to 1.00

 

2.125%

 

1.50%

The Applicable Margin (and the Facility Fee) shall besubject to reduction or increase, as applicable and as set forth in the tableabove (and, with respect to the Facility Fee, in the table set forth in Section2.08(a)), on a quarterly basis according to the performance of the Parent andthe Consolidated Subsidiaries as measured by the Leverage Ratio for theimmediately preceding Fiscal Quarter of the Parent.  Except as set forth in the last sentence hereof, any suchincrease or reduction in the Applicable Margin (and the Facility Fee) providedfor herein shall be effective 45 days after the end of each of the Parent'sfirst three Fiscal Quarters of each Fiscal Year and 90 days after the end ofeach of the Parent's Fiscal Years, subject in each case to the AdministrativeAgent's prior receipt of the applicable financial statements and correspondingCompliance Certificate setting forth, among other things, the calculationsnecessary to determine whether any such adjustments are then necessary (suchdates each being referred to herein as the "Performance Pricing DeterminationDate"); provided, however, that any reduction in the ApplicableMargin shall not apply to any Euro-Dollar Loans outstanding on a PerformancePricing Determination Date that have an Interest Period commencing before suchPerformance Pricing Determination Date.If the financial statements and the Compliance Certificate of theBorrowers setting forth the Leverage Ratio are not received by AdministrativeAgent by the date required pursuant to Section 6.01(a) and (b) of thisAgreement (and without limiting the Administrative Agent's and the Lendersrights to invoke the Default Rate), the Applicable Margin (and the FacilityFee) shall be determined as if the Leverage Ratio exceeds the ratio set forthas Level II in the foregoing table until such time as such financial statementsand Compliance Certificate are received and any Event of Default resulting froma failure to timely deliver such financial statements or Compliance Certificateis waived in writing by the Administrative Agent and the Required Lenders.  
(b)   Each Base Rate Loan shall bear interest on the outstandingprincipal amount thereof, for each day from the date such Loan is made until itbecomes due, at a rate per annum equal to the Base Rate for such day plus theApplicable Margin.  Such interest shallbe payable on each Quarterly Payment Date while such Base Rate Loan isoutstanding and on the date such Base Rate Loan is converted to a Euro-DollarLoan.  Any overdue principal of and, tothe extent permitted by applicable law, overdue interest on any Base Rate Loanshall bear interest, payable on demand, for each day until paid at a rate perannum equal to the Default Rate.
(c)    Each Euro-Dollar Loan shall bear interest on the outstandingprincipal amount thereof, for the Interest Period applicable thereto, at a rateper annum equal to the sum of the Applicable Margin plus the applicableAdjusted London Interbank Offered Rate for such Interest Period.  Such interest shall be payable for eachInterest Period on the last day thereof and, if such Interest Period is longerthan 3 months, at intervals of 3 months after the first day therof.  Any overdue principal of and, to the extentpermitted by law, overdue interest on any Euro-Dollar Loan shall bear interest,payable on demand, for each day until paid at a rate per annum equal to theDefault Rate.

The "Adjusted London InterbankOffered Rate" applicable to any Interest Period means a rate per annum equal tothe quotient obtained (rounded upwards, if necessary, to the next higher1/100th of 1%) by dividing (a) the applicable London Interbank Offered Rate forsuch Interest Period by (b) 1.00 minus the Euro-Dollar Reserve Percentage. 

The "London Interbank OfferedRate" applicable to any Euro-Dollar Loan means for the Interest Period of suchEuro-Dollar Loan, the rate per annum determined on the basis of the offeredrate for deposits in Dollars of amounts equal or comparable to the principalamount of such Euro-Dollar Loan offered for a term comparable to such InterestPeriod, which rates appear on Telerate Page 3750 effective as of 11:00 A.M.,London time, 2 Euro-Dollar Business Days prior to the first day of suchInterest Period, provided that if no such offered rates appear on suchpage, the "London Interbank Offered Rate" for such Interest Period will be thearithmetic average (rounded upward, if necessary, to the next higher 1/100th of1%) of rates quoted by not less than 2 major banks in New York City, selectedby the Administrative Agent, at approximately 10:00 A.M., New York City time, 2Euro-Dollar Business Days prior to the first day of such Interest Period, fordeposits in Dollars offered by leading European banks for a period comparableto such Interest Period in an amount comparable to the principal amount of suchEuro-Dollar Loan. 

"Euro-Dollar Reserve Percentage"means for any day that percentage (expressed as a decimal) which is in effecton such day, as prescribed by the Board of Governors of the Federal ReserveSystem (or any successor) for determining the maximum reserve requirement for amember bank of the Federal Reserve System in respect of "eurocurrencyliabilities" (or in respect of any other category of liabilities which includesdeposits by reference to which the interest rate on Euro-Dollar Loans isdetermined or any category of extensions of credit or other assets whichincludes loans by a non-United States office of any Lender to United Statesresidents).  The Adjusted London InterbankOffered Rate shall be adjusted automatically on and as of the effective date ofany change in the Euro-Dollar Reserve Percentage.
(d)   The Administrative Agent shall determine each interest rateapplicable to the Loans hereunder.  TheAdministrative Agent shall give prompt notice to the Borrowers and the Lendersby telecopier of each rate of interest so determined, and its determinationthereof shall be conclusive in the absence of manifest error. 
(e)    After the occurrence and during the continuance of a Defaultor an Event of Default, the principal amount of the Loans (and, to the extentpermitted by applicable law, all accrued interest thereon) may, at the electionof the Required Lenders, bear interest at the Default Rate from the date ofsuch Default or Event of Default (which date shall be deemed to have occurredon the date such Default or Event of Default occurred and not on the date anyCompliance Certificate is delivered). 

**SECTION 2.08.                    Fees. **

(a)    The Borrowers shall pay to the Administrative Agent, for theratable account of each Lender, a facility fee (the "Facility Fee"), on themaximum amount of the aggregate Commitments in effect for any relevant period,irrespective of usage, at a rate per annum equal to:

(i)                 for the period commencing on the Closing Date to and includingthe first Performance Pricing Determination Date, 0.375%; and 

(ii)               from and after the first Performance Pricing DeterminationDate, the percentage determined on each Performance Pricing Determination Dateby reference to the table set forth below and the Leverage Ratio as determinedin accordance with the last paragraph of Section 2.05(a)(ii):

  Leverage Ratio

 

 

Facility  Fee

**Level  I**

If the Leverage Ratio is less than 3.50 to 1.00

0.25%

**Level II**

If  the Leverage Ratio is greater than or equal to 3.50 to 1.00

 

0.375%
(b)   The Borrowers shall pay to the Administrative Agent, for theratable account of each Lender, a fully paid, non-refundable amendment andrestatement fee in an amount equal to 0.10% of the aggregate amount of theCommitments, payable on the Closing Date.(c)    The Borrowers shall pay to the Administrative Agent, for theaccount and sole benefit of the Administrative Agent, such fees and otheramounts at such times as set forth in the Administrative Agent's LetterAgreement. 
**SECTION 2.09.                    Optional Termination or Reduction of Commitments**

.  

The Borrowers may, upon at least 3 Domestic Business Days'notice to the Administrative Agent, terminate at any time, or proportionatelyreduce the aggregate amount of the Commitments from time to time by anaggregate amount of at least $5,000,000 or any larger integral multiple of$1,000,000; provided that, (a) such reduction shall be applied so as to reduceeach Lender's Commitment ratably according to the ratio (as determined prior tothe application of such reduction) its Commitment bears to the aggregate of allCommitments; (b) such reduction of the aggregate of all Commitments does notexceed the aggregate of all Unused Commitments; and (c) if the Commitments areterminated in their entirety, all accrued fees (as provided under Section 2.08)shall be due and payable on the effective date of such termination.
**SECTION 2.10.                    Mandatory Reduction and Termination of Commitments**
.   

The Commitments shall terminate on the Termination Dateand any Loans and all other Obligations then outstanding (together with accruedinterest thereon) shall be due and payable on such date.
**SECTION 2.11.                    Optional Prepayments**. 
(a)    The Borrowers may, upon at least 1 Domestic BusinessDays' notice to the Administrative Agent, prepay any Base Rate Borrowing inwhole at any time, or from time to time, in part in amounts aggregating atleast $1,000,000 with additional increments of $500,000 (or any lesser amountequal to the outstanding balance of such Borrowing), by paying the principalamount to be prepaid together with accrued interest thereon to the date ofprepayment.  Each such optionalprepayment shall be applied to prepay ratably the Base Rate Loans of theseveral Lenders included in such Base Rate Borrowing.(b)   Subject to any payments required pursuant to the terms ofArticle IX for a Euro-Dollar Loan, upon 3 Domestic Business Day's prior writtennotice, the Borrowers may prepay in minimum amounts of $1,000,000 withadditional increments of $1,000,000 (or any lesser amount equal to theoutstanding balance of such Loan) all or any portion of the principalamount of any Euro-Dollar Loan prior to the maturity thereof.(c)    Upon receipt of a notice of prepayment pursuant to thisSection 2.11, the Administrative Agent shall promptly notify each Lenderof the contents thereof and of such Lender's ratable share of such prepaymentand such notice, once received by the Administrative Agent, shall notthereafter be revocable by the Borrowers.(d)   The first two Loans in any Fiscal Year which are prepaid onthe same day such Loans are made shall not bear interest hereunder except tothe extent that the Administrative Agent or a Lender declares that it incurredinterest on funds which comprised such Loan.In all other cases, interest on such Loans which are prepaid on the sameday they are made shall be due and payable without the Administrative Agent'sor any Lender's making any such declaration.Nothing in this subsection (d) shall be deemed to limit any otherreimbursement, indemnification, or other rights to payment afforded theAdministrative Agent or the Lenders elsewhere in this Agreement. 

**SECTION 2.12.                    Mandatory Prepayments.**

(a)    On each date on which the Commitments are reduced pursuant toSection 2.09 or Section 2.10, the Borrowers shall repay or prepay suchprincipal amount of the outstanding Loans, if any (together with interestaccrued thereon and any amount due under Section 9.05(a)), as may be necessaryso that after such payment the aggregate unpaid amount of the Working CapitalObligations does not exceed the aggregate amount of the Commitments as thenreduced.(b)   On each date on which the Working Capital Obligations exceedthe lesser of (i) the Borrowing Base or (ii) the aggregate amount of all theCommitments, the Borrowers shall immediately repay or prepay such principalamount of the outstanding Loans, if any (together with interest accrued thereonand any amount due under Section 9.05(a)), as may be necessary so that aftersuch payment the Working Capital Obligations do not exceed the lesser of (x)the Borrowing Base or (y) the aggregate amount of all the Commitments.(c)    Contemporaneously upon receipt of Net Cash Proceeds (otherthan Net Cash Proceeds arising from any Excluded Aircraft Financings and thedisposition of inventory as permitted by Section 6.05(b)) and to the extentthere are then Obligations relating to the payment of money outstanding, theBorrowers shall pay, or cause to be paid, to the Administrative Agent, for theratable benefit of the Lenders, an amount equal to:

(i)                 the sum of (A) 100% of Net Cash Proceeds in excess of$1,000,000 in the aggregate in any Fiscal Year from the disposition of assets(other than equipment and current assets) described in clause (a) of thedefinition of "Net Cash Proceeds," plus (B) 100% of the Net Cash Proceeds inexcess of $5,000,000 in the aggregate, and $500,000 for any single disposition,in any Fiscal Year from the disposition of equipment described in clause (a) ofthe definition of "Net Cash Proceeds," to the extent such Net Cash Proceeds arenot placed in a Holding Account to be used to replace such disposed equipment withnew equipment within 365 days after such disposition;

(ii)               100% of the Net Cash Proceeds from the issuance of CapitalStock, Redeemable Preferred Stock or Debt (other than the Loans) described inclause (b) of the definition of "Net Cash Proceeds"; and

(iii)              100% of the Net Cash Proceeds from any Casualty orCondemnation described in clause (c) of the definition of "Net Cash Proceeds,"to the extent either (A) an Event of Default is in existence, or (B) such NetCash Proceeds are not placed in a Holding Account to be used to repair orreplace such damaged or condemned assets within 365 days after suchdisposition.  

In any event, such prepayment shall be accompanied by adetailed calculation showing all deductions from gross proceeds in order toarrive at Net Cash Proceeds, as well as amounts used or reserved for thepurchase of replacement equipment or to repair or replace damaged or condemnedassets, if applicable.  Nothingcontained in this clause (c) shall be deemed to be or construed to be consentby the Administrative Agent or any Lender to sale of any assets or issuance ofany Capital Stock, Redeemable Preferred Stock or Debt otherwise prohibited bythis Agreement.  The AdministrativeAgent agrees to promptly release any Net Cash Proceeds in any Holding Accountupon receipt by the Administrative Agent of (x) a written request for therelease of such Net Cash Proceeds and (y) a reasonably detailed accounting andsupporting documentation relating to the application of such Net Cash Proceedsto the repair and/or replacement of the assets which gave rise to the Net CashProceeds; provided that if such request for release and supportingdocumentation are not received by the Administrative Agent within the time forrepair or replacement set out above, the Administrative Agent shall have theright to apply such Net Cash Proceeds as contemplated in the first paragraph ofthis Section 2.12(c). 
**SECTION 2.13.                    General Provisions as to Payments**. 
(a)    The Borrowers shall make each payment of principal of, andinterest on, the Loans and of fees hereunder, without any setoff, counterclaimor any deduction whatsoever, not later than 11:00 A.M. (Atlanta, Georgia, time)on the date when due, in Federal or other funds immediately available inAtlanta, Georgia, to the Administrative Agent at its address referred to inSection 10.01.  The Administrative Agentwill promptly distribute to Wachovia each such payment received on account ofSwing Loans and to each Lender its ratable share of each such payment received bythe Administrative Agent for the account of the Lenders. 

(b)   Whenever any payment of principal of, or interest on, the BaseRate Loans or of fees hereunder shall be due on a day which is not a DomesticBusiness Day, the date for payment thereof shall be extended to the nextsucceeding Domestic Business Day.Whenever any payment of principal of or interest on, the Euro-DollarLoans shall be due on a day which is not a Euro-Dollar Business Day, the datefor payment thereof shall be extended to the next succeeding Euro-DollarBusiness Day unless such Euro-Dollar Business Day falls in another calendarmonth, in which case the date for payment thereof shall be the next precedingEuro-Dollar Business Day. 

(c)    All payments of principal, interest and fees and all otheramounts to be made by the Borrowers with respect to the Obligations orotherwise (including, without limitation, with respect to the Letter of CreditObligations) pursuant to this Agreement shall be paid without deduction for,and free from, any tax, imposts, levies, duties, deductions, or withholdings ofany nature now or at anytime hereafter imposed by any governmental authority orby any taxing authority thereof or therein excluding in the case of eachLender, taxes imposed on or measured by its net income, and franchise taxesimposed on it, by the jurisdiction under the laws of which such Lender isorganized or any political subdivision thereof and, in the case of each Lender,taxes imposed on its income, and franchise taxes imposed on it, by thejurisdiction of such Lender's applicable Lending Office or any politicalsubdivision thereof (all such non-excluded taxes, imposts, levies, duties,deductions or withholdings of any nature being "Taxes").  In the event that the Borrowers are requiredby applicable law to make any such withholding or deduction of Taxes withrespect to any of the Obligations, the Borrowers shall pay such deduction orwithholding to the applicable taxing authority, shall promptly furnish to anyLender in respect of which such deduction or withholding is made all receipts andother documents evidencing such payment and shall pay to such Lender additionalamounts as may be necessary in order that the amount received by such Lenderafter the required withholding or other payment shall equal the amount suchLender would have received had no such withholding or other payment beenmade.  If no withholding or deduction ofTaxes are payable in respect to any Obligations, the Borrowers shall furnishany Lender, at such Lender's request, a certificate from each applicable taxingauthority or an opinion of counsel acceptable to such Lender, in either casestating that such payments are exempt from or not subject to withholding ordeduction of Taxes.  If the Borrowersfail to provide such original or certified copy of a receipt evidencing paymentof Taxes or certificate(s) or opinion of counsel of exemption, the Borrowershereby agree to compensate such Lender for, and indemnify them with respect to,the tax consequences of the Borrowers' failure to provide evidence of taxpayments or tax exemption.

Each Lender which is organized under the laws of ajurisdiction other than the United States of America or any state thereof orthe District of Columbia (each a "Non‐U.S. Lender") agrees to furnish tothe Borrowers and the Administrative Agent on the date of this Agreement, if asignatory hereto, or within 10 Domestic Business Days after it becomes a Lenderhereunder, two (2) copies of either (a) U.S. Internal Revenue Service Form 4224or U. S. Internal Revenue Service Form 1001 for the year 2000, or (b)thereafter, U.S. Internal Revenue Service Form W-8ECI or U.S. Internal RevenueService Form W-8BEN, or (c) any successor forms thereto (wherein such Non‐U.S.Lender claims entitlement to complete exemption from or a reduced rate of U.S.federal withholding tax on interest paid by the Borrowers hereunder) and toprovide to the Borrowers and the Administrative Agent a new Form 4224 or Form1001, or U.S. Internal Revenue Service Form W-8ECI or U.S. Internal RevenueService Form W-8BEN, or any successor forms thereto if any previously deliveredform is found to be incomplete or incorrect in any material respect or upon theobsolescence of any previously delivered form; provided that if anyLender complies with the requirements of this paragraph on the Closing Date orat such time as such Lender becomes a party to this Agreement, but is unable atany time thereafter, for any reason, to establish such exemption, or to filesuch forms, the Borrowers shall nonetheless remain obligated under the terms ofthe immediately preceding paragraph with respect to such Lender.

Notwithstanding the foregoing, in the event the Borrowersare  required to pay any Lender amountspursuant to this Section 2.13, the Borrowers may give notice to such Lender(with copies to the Administrative Agent) that they wish to seek one or moreassignees (which may be one or more of the other Lenders) to assume theCommitment of such Lender and to purchase such Lender's outstanding Loans andNotes for an amount equal to the sum of the outstanding unpaid principal of andaccrued interest on such Loans and Notes, plus all other fees and amounts dueto such Lender hereunder, in each case, to the date such Loans, Notes andinterest are purchased.  Upon such saleor prepayment, each such Lender shall have no further commitment or otherobligation to the Borrowers hereunder or under any Note. 

In the event any Lender receives a refund of any Taxespaid by the Borrowers pursuant to this Section 2.13(c), it will pay to theBorrowers the amount of such refund promptly upon receipt thereof; providedthat if at any time thereafter it is required to return such refund, theBorrowers shall promptly repay to it the amount of such refund. 

Without prejudice to the survival of any other agreementof the Borrowers hereunder, the agreements and obligations of the Borrowers andthe Lenders contained in this Section 2.13(c) shall be applicable with respectto any Participant, Assignee or other Transferee, and any calculations requiredby such provisions (i) shall be made based upon the circumstances of suchParticipant, Assignee or other Transferee and (ii) constitute a continuingagreement and shall survive the termination of this Agreement and the paymentin full or cancellation of the Notes.
(d)   All monies to be applied to the Obligations, whether suchmonies represent voluntary payments by the Borrowers, Net Cash Proceeds, or arereceived from any disposition of Collateral (subject to any apportioning of theproceeds from such disposition to the Noteholders in accordance with theCollateral Documents), shall be allocated among the Administrative Agent andsuch of the Lenders as are entitled thereto (and, with respect to moniesallocated to the Lenders in accordance with their ratable share of theCommitments unless otherwise provided herein) in the following order (in eachcase, until all Obligations within each category itemized in this paragraph (d)below are fully paid): (i) first, to the Administrative Agent for the paymentof all of the Administrative Agent's fees and expenses accrued but not paid;(ii) second, to the Administrative Agent for the benefit of the Lenders andWachovia in payment of the accrued interest due and payable on the Loans; (iii)third, to Wachovia toward payment of outstanding principal of the Swing Loans;(iv) fourth, to the Administrative Agent for the benefit of the Lenders towardpayment of outstanding principal of all other Base Rate Loans; (v) fifth, tothe Administrative Agent for the benefit of the Lenders toward payment ofoutstanding principal of the Euro-Dollar Loans; (vi) sixth, to the payment ofany fees payable with respect to any outstanding Letter of Credit Obligationsthen due and owing; (vii) seventh, as cash collateral for any outstandingLetter of Credit Obligations equal to 110% of the undrawn amount thereof;(viii) eighth, to payment of the Reimbursement Obligations; (ix) ninth, to theLenders in payment of accrued interest then due and payable in respect of anyObligations other than the Loans then outstanding; (x) tenth, to the Lenderstoward payment of any expenses that have not been reimbursed to the Lenders bythe Parent or the Borrowers (or the other Lenders, as applicable) in accordancewith the terms of this Agreement, together with any interest accrued thereon; (xi)eleventh, to the Administrative Agent to pay any amounts owed underindemnification obligations that have not been paid to Agent by the Lenders orthe Parent or the Borrowers, together with interest accrued thereon; (xii)twelfth, to the Lenders for any amounts owed under indemnification obligationsthat they have paid to the Administrative Agent and for any expenses that theyhave reimbursed to the Administrative Agent; (xiii) thirteenth, to any otherObligations then due and payable; and (xiv) fourteenth, to the Borrowers orsuch other Person or Persons entitled thereto. 
**SECTION 2.14.                    Computation of Interest and Fees**

.  

Interest on Base Rate Loans shall be computed on the basisof a year of 365 or 366 days, as applicable, and paid for the actual number ofdays elapsed (including the first day but excluding the last day).  Interest on Euro-Dollar Loans will becomputed on the basis of a year of 360 days and paid for the actual number ofdays elapsed, calculated as to each Interest Period from and including thefirst day thereof to but excluding the last day thereof.  Facility Fees and any other fees payablehereunder shall be computed on the basis of a year of 360 days and paid for theactual number of days elapsed (including the first day but excluding the lastday). 
**SECTION 2.15.                    All Loans to Constitute One Obligation**
.   

The Loans shall constitute one general Obligation of theBorrowers, on which each Borrower is jointly and severally liable; provided,however, that the Administrative Agent and each of the Lenders shall bedeemed to be a creditor of each Borrower and the holder of a separate claimagainst each Borrower to the extent of all Obligations jointly and severallyowed by the Borrowers to the Administrative Agent or such Lender.
**SECTION 2.16.                    Issuance of Letters of Credit**
.  

Subject to the terms and conditions of this Agreement, andin reliance upon the representations and warranties of the Parent and Borrowersherein set forth, the Administrative Agent shall issue for the account ofBorrowers, one or more Letters of Credit denominated in Dollars, and theForeign LC Issuer shall issue for the account of the Borrowers, one or moreLetters of Credit denominated in foreign currencies acceptable in all respectsto the Foreign LC Issuer, in accordance with this Article 2, from time to timeduring the period commencing on the Closing Date and ending on the DomesticBusiness Day prior to the Termination Date.
**SECTION 2.17.                    Conditions and Amounts of Letters of Credit**
.  

Neither the Administrative Agent or the Foreign LC Issuershall have any obligation to issue any Letter of Credit at any time: 
(a)    if the aggregate maximum amount then available for drawingunder Letters of Credit, after giving effect to the issuance of the requestedLetter of Credit, shall exceed any limit imposed by law or regulation upon suchIssuer; 
(b)   if, after giving effect to the issuance of the requestedLetter of Credit, (i) the aggregate Letter of Credit Obligations denominated inDollars would exceed $110,000,000; (ii) the aggregate Letter of CreditObligations denominated in foreign currencies would exceed the DollarEquivalent of $10,000,000; or (iii) all of the then outstanding Working CapitalObligations would exceed the lesser of (A) the aggregate amount of theCommitments and (B) the Borrowing Base; 

(c)    which has an expiration date after the Termination Date; 

(d)   unless the relevant Borrower shall have delivered to theIssuer at such times and in such manner as the Issuer may prescribe, a Letterof Credit Application Agreement and such other documents and materials as maybe required pursuant to the terms thereof all satisfactory in form andsubstance to the Issuer and the terms of the proposed Letter of Credit shall besatisfactory in form and substance to the Issuer; 

(e)    if, as of the date of issuance any order, judgment or decreeof any court, arbitrator or Authority shall purport by its terms to enjoin orrestrain the Issuer from issuing the Letter of Credit and any law, rule orregulation applicable to such Issuer and any request or directive (whether ornot having the force of law) from any Authority with jurisdiction over theIssuer shall prohibit or request that the Issuer refrain from the issuance ofletters of credit generally or the issuance of that Letter of Credit; and 

(f)     the conditions set out in Article 4 are not satisfied as ofthe time the Issuer receives the applicable Letter of Credit Application and atthe time the Letter of Credit is to be issued.

** SECTION 2.18.                    Requests for Issuance of Letters of Credit.** 

(a)    Request for Issuance.At least two Domestic Business Days before the effective date for anyLetter of Credit, the relevant Borrower shall give the Administrative Agent awritten notice containing the original signature of an authorized officer oremployee of such Borrower substantially in the form of Exhibit P-1.  Such notice shall be irrevocable and shallspecify the original face amount of the Letter of Credit requested, theeffective date (which day shall be a Domestic Business Day) of issuance of suchrequested Letter of Credit, the date on which such requested Letter of Creditis to expire, the amount of then outstanding Letter of Credit Obligations, thepurpose for which such Letter of Credit is to be issued, whether such Letter ofCredit may be drawn in single or partial draws and the person for whose benefitthe requested Letter of Credit is to be issued, and, in the case of a Letter ofCredit denominated in a foreign currency, such foreign currency, subjecthowever, to the acceptance of such foreign currency by the Foreign LCIssuer. 

(b)   Issuance; Notice of Issuance.  If the original face amount of the requested Letter of Credit isless than or equal to the Unused Commitment at such time and the applicableconditions set forth in this Agreement are satisfied, the Issuer shall issuethe requested Letter of Credit.  TheIssuer shall give each Lender written or telex notice in substantially the formof Exhibit P-2 (each, a "Letter of Credit Notice"), or telephonic noticeconfirmed promptly thereafter in writing, of the issuance of a Letter of Creditand shall deliver to each Lender in connection with such notice a copy of theLetter of Credit issued by the Issuer. 

(c)    No Extension or Amendment.  No Issuer shall extend or amend any Letter of Credit if theissuance of a new Letter of Credit having the same terms as such Letter ofCredit as so amended or extended would be prohibited by Section 2.17. 

**SECTION 2.19.                    Letter of Credit Reimbursement Obligations; Duties ofthe Issuer. **

(a)    Reimbursement.Notwithstanding any provisions to the contrary in any Letter of CreditApplication Agreement:

(i)                 the relevant Borrower shall reimburse relevant Issuer fordrawings under a Letter of Credit issued by it no later than the earlier of (A)the time specified in such Letter of Credit Application Agreement, or (B) 1Domestic Business Day after the payment by the Issuer; 

(ii)               any Reimbursement Obligation with respect to any Letter ofCredit shall bear interest from the date of the relevant drawing under thepertinent Letter of Credit until the date of payment in full thereof at a rateper annum equal to (A) prior to the date that is 3 Domestic Business Days afterthe date of the related payment by the Issuer, the Base Rate and (B)thereafter, the Default Rate; and

(iii)              in order to implement the foregoing, upon the occurrence of adraw under any Letter of Credit, unless the Issuer is reimbursed in accordancewith subsection (i) above, the Borrowers irrevocably authorize theAdministrative Agent to treat such nonpayment as a Notice of Borrowing in theamount of such Reimbursement Obligation and to make Syndicated Loans to theBorrowers in such amount (which amount shall be the Dollar Equivalent amountwith respect to a Letter of Credit denominated in a foreign currency)regardless of whether the conditions precedent to the making of Loans hereunderhave been met.  Each Borrower furtherauthorizes the Administrative Agent to credit the proceeds of such Loan so asto immediately eliminate the liability of the Borrowers for ReimbursementObligations under such Letter of Credit.
(b)   Duties of the Administrative Agent.  Any action taken or omitted to be taken bythe relevant Issuer in connection with any Letter of Credit, if taken oromitted in the absence of willful misconduct or gross negligence, shall not putsuch Issuer under any resulting liability to any Lender, or assuming that suchIssuer has complied with the procedures specified in Section 2.18 and suchLender has not given a notice contemplated by Section 2.20(a) that continues infull force and effect, relieve any Lender of its obligations hereunder to suchIssuer.  In determining whether to payunder any Letter of Credit, the Issuer shall have no obligation relative to theAdministrative Agent or the Lenders other than to confirm that any documentsrequired to have been delivered under such Letter of Credit appear to comply ontheir face, with the requirements of such Letter of Credit. 
**SECTION 2.20.                    Letter of Credit Participations. **

(a)    Purchase of Participations.  Immediately upon issuance by any Issuer of any Letter of Creditin accordance with the procedures set forth in Section 2.18, each Lender shallbe deemed to have irrevocably and unconditionally purchased and received fromsuch Issuer, without recourse or warranty, an undivided interest andparticipation, to the extent of such Lender's ratable share of the aggregateCommitments, in each Letter of Credit (or guaranty pertaining thereto)outstanding on the date of this Agreement and issued under the terms of thisAgreement hereafter; provided, that a Letter of Credit shall not beentitled to the benefits of this Section 2.20 if the Administrative Agent andthe relevant Issuer shall have received written notice from any Lender on orbefore the Domestic Business Day immediately prior to the date of the relevantIssuer's issuance of such Letter of Credit that one or more of the conditionscontained in Section 2.17 or Article 4 is not then satisfied, and, in the eventthe Administrative Agent and the relevant Issuer receives such a notice anddetermines that one or more such conditions contained in Section 2.17 orArticle 4 is not then satisfied, it shall have no further obligation to issueany Letter of Credit until such notice is withdrawn by that Lender or until theRequired Lenders have effectively waived such condition in accordance with theprovisions of this Agreement.  The partiesto this Agreement acknowledge and agree that all collateral security held by anIssuer or any other issuer of a Letter of Credit securing any of the Letter ofCredit Obligations shall constitute collateral security for the ratable benefitof the Lenders as risk participants and the Secured Parties. 

(b)   Sharing of Letter of Credit Payments.  In the event that any Issuer makes anypayment under any Letter of Credit for which the Borrower shall not have repaidsuch amount to the Issuer pursuant to Section 2.21 or which cannot be paidby a Loan pursuant to Section 2.19(a)(iii), the Issuer shall notify theAdministrative Agent and the Administrative Agent shall promptly notify eachLender of such failure, and each Lender shall promptly and unconditionally payto the relevant Issuer such Lender's ratable share of the Dollar Equivalentamount of such payment and in same day funds.If the Administrative Agent so notifies such Lender prior to 10:00 A.M.(Atlanta, Georgia, time) on any Domestic Business Day, such Lender shallmake available to the relevant Issuer its ratable share of the amount of suchpayment on such Domestic Business Day in same day funds.  If and to the extent such Lender shall nothave so made its ratable share of the amount of such payment available to therelevant Issuer, such Lender agrees to pay to such Issuer forthwith on demandsuch amount together with interest thereon, for each day from the date suchpayment was first due until the date such amount is paid to the Issuer at theBase Rate for the first 3 days and thereafter at the Default Rate.  The failure of any Lender to make availableto the Issuer its Commitment Share of any such payment shall neither relievenor increase the obligation of any other Lender hereunder to make available tothe relevant Issuer its ratable share of any payment on the date such paymentis to be made. 

(c)    Sharing of Reimbursement Obligation Payments. Wheneveran Issuer receives a payment on account of a Reimbursement Obligation,including any interest thereon, as to which the Issuer has received anypayments from the Lenders pursuant to this Section 2.20, it shall promptlypay to each Lender which has funded its participating interest therein, inDollars, an amount equal to such Lender's Commitment Share thereof.  Each such payment shall be made by theIssuer on the Domestic Business Day on which the funds are paid to such Person,if received prior to noon, 12:00 P.M. (Atlanta, Georgia, time), on suchDomestic Business Day, and otherwise on the next succeeding Domestic BusinessDay. 

(d)   Documentation.Upon the request of any Lender, the Issuers shall furnish to such Lendercopies of any Letter of Credit, Letter of Credit Application Agreement andother documentation relating to Letters of Credit issued pursuant to thisAgreement. 

(e)    Obligations Irrevocable.  The obligations of the Lenders to make payments to the Issuerswith respect to a Letter of Credit shall be irrevocable, not subject to anyqualification or exception whatsoever and shall be made in accordance with, butnot subject to, the terms and conditions of this Agreement under allcircumstances (assuming that an Issuer has issued such Letter of Credit inaccordance with  Section 2.17 and suchLender has not given a notice contemplated by Section 2.20(a) that continues infull force and effect), including, without limitation, any of the followingcircumstances:

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

(ii)               the existence of any claim, set-off, defense or other rightwhich the Borrower may have at any time against a beneficiary named in a Letterof Credit or any transferee of any Letter of Credit (or any Person for whom anysuch transferee may be acting), the Administrative Agent, any Issuer, anyLender or any other Person, whether in connection with this Agreement, anyLetter of Credit, the transactions contemplated herein or any unrelatedtransactions;

(iii)              any draft, certificate or any other document presented underthe Letter of Credit proves to be forged, fraudulent, invalid or insufficientin any respect or any statement therein being untrue or inaccurate in anyrespect;

(iv)             the surrender or impairment of any security for theperformance or observance of any of the terms of any of the Loan Documents;

(v)               payment by the Issuer under any Letter of Credit proving to beforged, fraudulent, invalid or insufficient in any respect or any statementtherein being untrue or inaccurate in any respect;

(vi)             payment by the Issuer under any Letter of Credit againstpresentation of any draft or certificate that does not comply with the terms ofsuch Letter of Credit, except payment resulting from the gross negligence orwillful misconduct of the Issuer; or

(vii)            any other circumstances or happenings  whatsoever, whether or not similar to any ofthe foregoing, except circumstances or happenings resulting from the grossnegligence or willful misconduct of the Issuer.
**SECTION 2.21.                    Payment of Reimbursement Obligations**. 
(a)    Payments to the Relevant Issuer.  The relevant Borrower agrees to pay to therelevant Issuer the amount of all Reimbursement Obligations, interest and otheramounts payable to the Issuer under or in connection with any Letter of Creditissued for such Borrower's account immediately when due, irrespective of:

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

(ii)               the existence of any claim, set-off, defense or other rightwhich the Borrower may have at any time against a beneficiary named in a Letterof Credit or any transferee of any Letter of Credit (or any Person for whom anysuch transferee may be acting), any Issuer, the Administrative Agent, anyLender or any other Person, whether in connection with this Agreement, anyLetter of Credit, the transactions contemplated herein or any unrelatedtransactions;

(iii)              any draft, certificate or any other document presented underthe Letter of Credit proves to be forged, fraudulent, invalid or insufficientin any respect or any statement therein being untrue or inaccurate in anyrespect;

(iv)             the surrender or impairment of any security for theperformance or observance of any of the terms of any of the Loan Documents;

(v)               payment by the relevant Issuer under any Letter of Creditproving to be forged, fraudulent, invalid or insufficient in any respect or anystatement therein being untrue or inaccurate in any respect;

(vi)             payment by the relevant Issuer under any Letter of Creditagainst presentation of any draft or certificate that does not comply with theterms of such Letter of Credit, except payment resulting from the grossnegligence or willful misconduct of the relevant Issuer; or

(vii)            any other circumstances or happenings whatsoever, whether ornot similar to any of the foregoing, except circumstances or happeningsresulting from the gross negligence or willful misconduct of the Issuer.
(b)   Recovery or Avoidance of Payments.  In the event any payment by or on behalf ofthe relevant Borrower received by an Issuer with respect to a Letter of Creditand distributed by such Issuer to the Lenders on account of theirparticipations is thereafter set aside, avoided or recovered from such Issuerin connection with any receivership, liquidation or bankruptcy proceeding, eachLender that received such distribution shall, upon demand by the AdministrativeAgent or such Issuer, contribute to such Issuer such Lender's Commitment Shareof the amount set aside, avoided or recovered, together with interest at therate required to be paid by the Administrative Agent or such Issuer upon theamount required to be repaid by it. 
**SECTION 2.22.                    Compensation for Letters of Credit and ReportingRequirements. **

(a)    Letter of Credit Fees.The Borrowers shall pay to the Administrative Agent with respect to eachLetter of Credit issued hereunder a letter of credit fee ("Letter of CreditFee") on the face amount of such Letter of Credit equal to:

(i)                 for the period commencing on the Closing Date to and includingthe first Performance Pricing Determination Date, 2.125% per annum; and

(ii)               from and after the first Performance Pricing DeterminationDate, the percentage per annum determined on each Performance PricingDetermination Date by reference to the table set forth below and the LeverageRatio determined in accordance with Section 2.05(a)(ii);

  Leverage Ratio

 

 

Letter  of Credit Fee

**Level  I**

If the Leverage Ratio is less than 3.50 to 1.00

1.75%

**Level II**

If  the Leverage Ratio is greater than or equal to 3.50 to 1.00

 

2.125%

 

 All Letter of Credit Fees shall be payable on the DomesticBusiness Day on which such Letter of Credit is issued.  Letter of Credit Fees payable hereundershall be computed on the basis of a year of 360 days and paid for the actualnumber of days elapsed (including the first day but excluding the lastday).  The Administrative Agent shallpromptly remit such Letter of Credit Fees, when paid, to the Lenders inaccordance with their ratable shares thereof.
(b)   Issuer Charges.The Borrowers shall pay to the relevant Issuer, solely for its ownaccount, the standard charges assessed by such Issuer in connection with theissuance, administration, amendment and payment or cancellation of Letters ofCredit issued hereunder, which charges shall be those typically charged by suchIssuer to its customers generally having credit and other characteristicssimilar to the Borrowers, as determined in good faith by such Issuer. 
**SECTION 2.23.                    Indemnification and Exoneration with respect to Lettersof Credit. **

(a)    Indemnification.In addition to amounts payable as elsewhere provided in this Article 2,the Borrowers shall protect, indemnify, pay and save the Issuers, theAdministrative Agent and each Lender harmless from and against any and allclaims, demands, liabilities, damages, losses, costs, charges and expenses(including reasonable attorneys' fees) which the Issuers, the AdministrativeAgent or any Lender may incur or be subject to as a consequence of the issuanceof any Letter of Credit for a Borrower's account other than as a result of itsgross negligence or willful misconduct, as determined by a court of competentjurisdiction. 

(b)   Assumption of Risk by the Borrowers.  As between the Borrowers, the Issuers, theAdministrative Agent and the Lenders, the Borrowers assume all risks of theacts and omissions of, or misuse of the Letters of Credit issued for eitherBorrower's account by, the respective beneficiaries of such Letters ofCredit.  In furtherance and not inlimitation of the foregoing, the Issuers, the Administrative Agent and theLenders shall not be responsible for (i) the form, validity, sufficiency,accuracy, genuineness or legal effect of any document submitted by any party inconnection with the application for and issuance of the Letters of Credit, evenif it should in fact prove to be in any or all respects invalid, insufficient,inaccurate, fraudulent or forged, (ii) the validity or sufficiency of anyinstrument transferring or assigning or purporting to transfer or assign aLetter of Credit or the rights or benefits thereunder or proceeds thereof, inwhole or in part, which may prove to be invalid or ineffective for any reason,(iii) failure of the beneficiary of a Letter of Credit to comply duly withconditions required in order to draw upon such Letter of Credit, (iv) errors,omissions, interruptions or delays in transmission or delivery of any messages,by mail, cable, telegraph, telex or otherwise, whether or not they be incipher, for errors in interpretation of technical terms, (v) any loss or delayin the transmission or otherwise of any document required in order to make adrawing under any Letter of Credit or of the proceeds thereof, (vi) themisapplication by the beneficiary of a Letter of Credit of the proceeds of anydrawing under such Letter of Credit; and (vii) any consequences arising fromcauses beyond the control of the Issuers, the Administrative Agent and theLenders. 

(c)    Exoneration.  Infurtherance and extension and not in limitation of the specific provisionshereinabove set forth, any action taken or omitted by the Issuers under or inconnection with the Letters of Credit or any related certificates if taken oromitted in good faith and with reasonable care, shall not put the Issuers, theAdministrative Agent, or any Lender under any resulting liability to theBorrowers or relieve the Borrowers of any of their obligations hereunder to anysuch Person. 

**SECTION 2.24.                    Letters of Credit in Foreign Currencies. **

(a)    At any time the Administrative Agent may, and, upon thewritten request of any Lender after receipt of any Letter of Credit Notice theAdministrative Agent will, calculate the Dollar Equivalent of each Letter ofCredit denominated in a foreign currency, and in the event that, as a result ofsuch calculation, the Dollar Equivalent of all Letters of Credit denominated ina foreign currency outstanding exceeds $5,000,000, then, upon request by theAdministrative Agent, the Borrowers shall immediately repay the Loans in anamount equal to such excess.

 (b)   If the Borrowers are unable for any reason to effect paymentin a foreign currency with respect to any Letter of Credit denominated in aforeign currency as required by this Agreement or any Letter of CreditApplication Agreement, the Foreign LC Issuer may, through the AdministrativeAgent, require such payment to be made in Dollars in the Dollar Equivalentamount of such payment.  In any case inwhich the Borrowers shall make such payment in Dollars, the Borrowers agree tohold the Foreign LC Issuer and each Lender harmless from any loss incurred bythe Foreign LC Issuer and such Lender arising from any change in the value ofDollars in relation to such foreign currency between the date such paymentbecame due and the date of payment thereof. 

(c)    If for the purpose of obtaining judgment in any court orenforcing any such judgment it is necessary to convert any amount due in anyforeign currency into any other currency, the rate of exchange used shall bethe Administrative Agent's spot rate of exchange for the purchase of theforeign currency with such other currency at the close of business on theEuro-Dollar Business Day preceding the date on which judgment is given or anyorder for payment is made. The obligation of the Borrowers in respect of anyamount due from them hereunder shall, notwithstanding any judgment or order fora liquidated sum or sums in respect of amounts due hereunder or under anyjudgment or order in any other currency or otherwise be discharged only to theextent that on the Euro-Dollar Business Day following receipt by theAdministrative Agent of any payment in a currency other than the relevantforeign currency the Administrative Agent is able (in accordance with normallending procedures) to purchase the relevant foreign currency with such othercurrency.  If the amount of the relevantforeign currency that the Administrative Agent is able to purchase with suchother currency is less than the amount due in the relevant foreign currency,notwithstanding any judgment or order, the Borrowers shall indemnify theForeign LC Issuer and each Lender for the shortfall. 

**SECTION 2.25.                    Assumption of Debt.**

The Borrowers hereby assume all indebtedness, obligations,and liabilities of the Parent outstanding on the Closing Date, immediatelyprior to the consummation of this Agreement, and arising under that certainCredit Agreement dated as of July 27, 2000, by and among Express (formerlyknown as Airborne Freight Corporation), the Lenders, and Wachovia, asAdministrative Agent, as such agreement was amended by that certain FirstAmendment to Credit Agreement dated as of April 20, 2001, by and among theParent, the Lenders, and Wachovia as Administrative Agent, as further amendedby that certain Second Amendment to Credit Agreement dated as of May 31, 2001,by and among the Parent, the Lenders, and Wachovia as Administrative Agent,which Credit Agreement (as so amended) is amended and restated by thisAgreement.  Each of the parties agreethat the assumption of such obligations of the Parent shall not constitute anynovation of any indebtedness, obligations, or liabilities under this Agreement,all of which shall remain outstanding, but assumed by the Borrowers.
ARTICLE 3     
COLLATERALSECURITY
SECTION 3.01.                    Grant of Security Interest
As security for the payment of all Obligations, eachBorrower hereby grants to the Collateral Agent, for the equal and ratablebenefit of the Secured Parties, a continuing, general lien upon and securityinterest and security title in and to the Collateral, wherever located, whethernow existing or hereafter acquired or arising, and all products and/or proceedsof the Collateral, including, without limitation, insurance proceeds, all inaccordance with the terms of this Agreement and the Collateral Documents.
SECTION 3.02.                    Further Assurances
.  

The Parent and/or the Borrowers shall duly execute and/ordeliver (or cause to be duly executed and/or delivered) to the Collateral Agentany instrument, agreement, invoice, document, document of title, dock warrant,dock receipt, warehouse receipt, bill of lading, order, financing statement,assignment, waiver, consent or other writing which may be reasonably necessaryto the Collateral Agent to carry out the terms of this Agreement and any of theother Loan Documents and to perfect its security interest or intended securityinterest in and facilitate the collection of the Collateral, the proceedsthereof, and any other property at any time constituting security or intendedto constitute security to the Collateral Agent.  The Parent and/or the Borrowers shall perform or cause to beperformed such acts as the Collateral Agent may request to establish andmaintain for the Collateral Agent, for the equal and ratable benefit of theSecured Creditors, a first priority, valid and perfected security interest inand security title to the Collateral, free and clear of any Liens other thanPermitted Encumbrances, to the extent required in any of the CollateralDocuments.
ARTICLE4 
CONDITIONSTO BORROWINGS
SECTION 4.01.                    Conditions to Initial Borrowing and issuance of anyLetter of Credit
.  

The obligation of each Lender to make a Loan or any Issuerto issue a Letter of Credit on the occasion of the initial Borrowing orissuance of a Letter of Credit is subject to the satisfaction of the conditionsset forth in Section 4.02 and receipt by the Administrative Agent or theCollateral Agent of the following (as to the documents described in paragraphs (a),(c), (d) and (e) below, in sufficient number of counterparts for delivery of acounterpart to each Lender and retention of one counterpart by theAdministrative Agent):
(a)    from each of the parties hereto of either (i) a duly executedcounterpart of this Agreement signed by such party or (ii) a facsimiletransmission of such executed counterpart, with the original to be sent to theAdministrative Agent by overnight courier; 
(b)   a duly executed Syndicated Loan Note for the account of eachLender and a duly executed Swing Loan Note for the account of Wachovia, in eachcase complying with the provisions of Section 2.05; 

(c)    an opinion letter (i) (together with any opinions of localcounsel relied on therein) of Riddell Williams, P.S., counsel for theBorrowers, dated as of the Closing Date, substantially in the form of ExhibitB-1 and covering such additional matters relating to the transactionscontemplated hereby as the Administrative Agent, the Collateral Agent, or anyLender may reasonably request, including, without limitation, opinions as tothe perfection of the security interests in the Collateral granted to theCollateral Agent or Administrative Agent pursuant to the Collateral Documents,(ii) of local counsel to the Borrowers in the State of Ohio dated as of theClosing Date, substantially in the form of Exhibit B-2, regarding theMortgage as to any Real Property located in the such state, and (iii) of FAAcounsel to the Administrative Agent and the Collateral Agent dated as of theClosing Date, substantially in the form of Exhibit B-3, regarding theCollateral Agent's security interest in the Collateral described in theAircraft Chattel Mortgages; 

(d)   an opinion of Jones, Day, Reavis & Pogue, special counselfor the Administrative Agent and Collateral Agent, dated as of the ClosingDate, substantially in the form of Exhibit C and covering suchadditional matters relating to the transactions contemplated hereby as theAdministrative Agent and Collateral Agent may reasonably request; 

(e)    a certificate (the "Closing Certificate") substantially in theform of Exhibit H, dated as of the Closing Date, signed by a SeniorOfficer of the Parent and each of the Borrowers, to the effect that (i)immediately prior to the consummation of this Agreement, no "Default" or "Eventof Default" had occurred and was continuing under that certain Credit Agreementdated as of July 27, 2000, by and among Airborne Freight Corporation, the"Lenders" party thereto, and Wachovia, in its capacity as Administrative Agent(as amended); (ii) immediately after the consummation of this Agreement, noDefault or Event of Default has occurred under this Agreement; and (iii) therepresentations and warranties of the Parent and the Borrowers contained inArticle 5 are true on and as of the Closing Date; and (iv) Liquidity on theClosing Date is equal to or greater than $75,000,000; 

(f)     all documents which the Administrative Agent, the CollateralAgent, or any Lender may reasonably request relating to the existence of theParent and each of the Subsidiaries, the corporate authority for and thevalidity of this Agreement and the Notes, and any other matters relevanthereto, all in form and substance satisfactory to the Administrative Agent,including, without limitation, a certificate of the Parent and each Subsidiarywhich is party to any Loan Document substantially in the form of Exhibit I(each, an "Officer's Certificate"), signed by the Secretary or an AssistantSecretary of such Person, certifying as to the names, true signatures andincumbency of the officer or officers of such Person authorized to execute anddeliver those Loan Documents to which such Person is a party, and certifiedcopies of the following items: (i) such Person's Certificate of Incorporation,(ii) such Person's Bylaws, (iii) a certificate of good standing or validexistence of the Secretary of State of the State of the jurisdiction of itsincorporation and of each State in which it is qualified to do business as aforeign corporation, and (iv) the action taken by the Board of Directors ofeach such Person authorizing such Person's execution, delivery and performanceof this Agreement, the Notes and the other Loan Documents to which such Personis a party; 

(g)    an initial Borrowing Base Certificate dated as of the ClosingDate; 

(h)    two duly executed counterparts of each of the ContributionAgreement, the Parent Guaranty, and each Subsidiary Guaranty (to be executed byeach of the Domestic Subsidiaries other than the Receivables Subsidiary and anyAircraft Financing Subsidiary); 

(i)      fully executed counterparts of the Collateral Documents,including, without limitation, the delivery by the Parent and each DomesticSubsidiary (other than any Receivables Subsidiary and any Aircraft FinancingSubsidiary) of a Security Agreement, Aircraft Chattel Mortgage, Pledge Agreement,Mortgage, Trademark Security Agreement, and Collateral Assignment of MaterialContracts, to the extent the Parent or such Domestic Subsidiary has any rightor title to any of the types of Collateral described in such CollateralDocuments or as may be required by the Administrative Agent or the CollateralAgent; 

(j)     Real Property Documentation for each parcel of the RealProperties; 

(k)   receipt of confirmations of appraisals pertaining to anyequipment which constitutes Collateral reasonably acceptable to theAdministrative Agent; 

(l)      receipt of lien searches reasonably acceptable to theAdministrative Agent and the Collateral Agent, showing no Liens on anyCollateral other than Permitted Encumbrances; 

(m)  evidence of insurance as required by this Agreement and any ofthe Collateral Documents; 

(n)    payment of all fees, including, without limitation, theFacility Fee and the amendment and restatement fee required by Section 2.08,owed to the Administrative Agent and the Lenders hereunder; and 

(o)   a Notice of Borrowing or Notice of Continuation or Conversionif any Borrowing or issuance of any Letter of Credit is to occur on the ClosingDate. 

**SECTION 4.02.                    Conditions to All Borrowings and Issuances of Lettersof Credit**

.  

The obligation of each Lender to make a Loan, Wachovia tomake a Swing Loan, or any Issuer to issue a Letter of Credit, on the occasionof each Borrowing or issuance of a Letter of Credit is subject to thesatisfaction of the following conditions: 
(a)    a Notice of Borrowings; 
(b)   except for Refunding Loans made as Base Rate Loans, the factthat, immediately before and after such Borrowing or issuance of a Letter ofCredit, no Default shall have occurred and be continuing; 

(c)    the fact that the representations and warranties of the Parentand the Borrowers contained in Article 5 shall be true on and as of the date ofsuch Borrowing or issuance of a Letter of Credit (except to the extent any suchrepresentation or warranty is expressly made as of a prior date, in which case,it shall still have been true as of such prior date); and 

(d)   the fact that, immediately after such Borrowing or issuance ofa Letter of Credit, the conditions set forth in clauses (i), (ii), and (iii) ofSection 2.01(a) shall have been satisfied.

Each Syndicated Borrowing, each Swing Loan Borrowing, eachNotice of Continuation or Conversion, and each request for the issuance of aLetter of Credit hereunder shall be deemed to be a representation and warrantyby the Parent and the Borrowers on the date of such Borrowing, Notice ofContinuation or Conversion, or request as to the satisfaction in fact of theconditions set forth in, and as to the truth and accuracy of the factsspecified in, paragraphs (b), (c) and (d) of this Section; provided, that ifsuch Borrowing is a Syndicated Borrowing which consists solely of a Refunding Loanthen (i) if such Borrowing is a Euro-Dollar Borrowing or such Notice ofContinuation or Conversion is to a Euro-Dollar Loan, such Borrowing or Noticeof Continuation or Conversion shall be deemed to be such a representation andwarranty by the Parent and the Borrowers only as to the matters set forth inparagraphs (b) and (d) above, and (ii) if such Borrowing is a Base Rateborrowing, or such Notice of Continuation or Conversions is to a Base RateLoan, such Borrowing or Notice of Continuation or Conversion shall be deemed tobe a representation and warranty by the Parent and the Borrowers only as to thematters set forth in paragraph (d) above.
ARTICLE 5REPRESENTATIONS AND WARRANTIES
The Parent and each of the Borrowers, jointly andseverally, represents and warrants to the Administrative Agent, the CollateralAgent, and the Lenders that:
SECTION 5.01.                    Corporate Existence and Power
.  

The Parent and each Subsidiary is a corporation dulyorganized, validly existing and in good standing under the laws of thejurisdiction of its incorporation, is duly qualified to transact business inevery jurisdiction where, by the nature of its business, such qualification isnecessary, and has all corporate powers and all governmental licenses,authorizations, consents and approvals required to carry on its business as nowconducted, except where any such failure to qualify or have all requiredgovernmental licenses, authorizations, consents and approvals does not have andwould not reasonably be expected to cause a Material Adverse Effect and wouldnot impede any rights of the Administrative Agent or the Collateral Agent withrespect to the Collateral.
SECTION 5.02.                    Corporate and Governmental Authorization; NoContravention
.  

The execution, delivery and performance by the Parent andeach of the Subsidiaries of this Agreement, the Notes and the other LoanDocuments to which they are a party (a) are within the Parent's and suchSubsidiary's corporate powers, (b) have been duly authorized by all necessarycorporate action, and have been executed on behalf of the Parent and each ofsuch Subsidiaries by duly authorized officers, (c) require no action by or inrespect of or filing with, any governmental body, agency or official, (d) donot contravene, or constitute a default under, any provision of applicable lawor regulation or of the certificate or articles of incorporation or by-laws ofthe Parent or any such Subsidiary or of any agreement, judgment, injunction,order, decree or other instrument binding upon the Parent or any of suchSubsidiaries, and (e) do not result in the creation or imposition of any Lienon any asset of the Parent or any of the Subsidiaries (except in favor of theCollateral Agent or the Administrative Agent).
SECTION 5.03.                    Binding Effect
.  

This Agreement constitutes a valid and binding agreementof the Parent and each of the Borrowers enforceable in accordance with itsterms, and the Notes and the other Loan Documents, when executed and deliveredin accordance with this Agreement, will constitute valid and bindingobligations of the Parent and each of the Subsidiaries which are party heretoor thereto enforceable in accordance with their respective terms, provided thatthe enforceability hereof and thereof is subject in each case to generalprinciples of equity and to bankruptcy, insolvency and similar laws affectingthe enforcement of creditors' rights generally.
SECTION 5.04.                    Financial Information. 
(a)    The consolidated balance sheet of the Parent and theConsolidated Subsidiaries as of December 31, 2000, and the related consolidatedstatements of income, shareholders' equity and cash flows for the Fiscal Yearthen ended, reported on by Deloitte & Touche LLP, copies of which have beendelivered to each of the Lenders, and the unaudited consolidated financialstatements of the Parent and the Consolidated Subsidiaries for the interimperiod ended March 31, 2001, copies of which have been delivered to each of theLenders, fairly present, in conformity with GAAP, the consolidated financialposition of the Parent and the Consolidated Subsidiaries as of such dates andtheir consolidated results of operations and cash flows for such periodsstated. 

(b)   Since March 31, 2001, there has been no event, act, conditionor occurrence having a Material Adverse Effect. 

SECTION 5.05.                    Litigation

.  

There is no action, suit or proceeding pending, or to theknowledge of the Parent or any of the Subsidiaries threatened, against oraffecting the Parent or any of the Subsidiaries before any court or arbitratoror any governmental body, agency or official which could reasonably be expectedto have or cause a Material Adverse Effect or which in any manner draws intoquestion the validity of or could impair the ability of the Borrowers toperform their respective obligations under, this Agreement, the Notes, or anyother Loan Documents.
SECTION 5.06.                    Compliance with ERISA. 
(a)    The Parent and each member of the Controlled Group havefulfilled their obligations under the minimum funding standards of ERISA andthe Code with respect to each Plan and are in compliance in all materialrespects with the presently applicable provisions of ERISA and the Code, andhave not incurred any liability to the PBGC or a Plan under Title IV of ERISA. 

(b)   Neither the Parent nor any member of the Controlled Group hasincurred any withdrawal liability with respect to any Multiemployer Plan underTitle IV of ERISA, and no such liability is expected to be incurred. 

SECTION 5.07.                    Compliance with Laws; Payment of Taxes

.  

The Parent and each of the Subsidiaries are in materialcompliance with all applicable laws, regulations and similar requirements ofgovernmental authorities, except where such compliance is being contested ingood faith through appropriate proceedings or where non-compliance could notreasonably be expected to cause a Material Adverse Effect.  There have been filed on behalf of theParent and each of the Subsidiaries all Federal, state and local income,excise, property and other tax returns which are required to be filed by themand all taxes due pursuant to such returns or pursuant to any assessmentreceived by or on behalf of the Parent or any Subsidiary have been paid, exceptwhere such failure to file or pay could not reasonably be expected to have orcause a Material Adverse Effect.  Thecharges, accruals and reserves on the books of the Parent and the Subsidiariesin respect of taxes or other governmental charges are, in the opinion of theParent and each of the Borrowers, adequate.United States income tax returns of the Parent and the Subsidiaries havebeen examined and closed through the Fiscal Year ended December 31, 1994.
SECTION 5.08.                    Subsidiaries.
Each of the Subsidiaries (a) is acorporation duly organized, validly existing and in good standing under thelaws of its jurisdiction of incorporation, is duly qualified to transactbusiness in every jurisdiction where, by the nature of its business, suchqualification is necessary, and has all corporate powers and all governmentallicenses, authorizations, consents and approvals required to carry on itsbusiness as now conducted, except where such failure to be so qualified or topossess such licenses, authorizations, consents or approvals could notreasonably be expected to have or cause a Material Adverse Effect, and (b) hasexecuted and delivered a Subsidiary Guaranty.The Parent has no Subsidiaries except for those Subsidiaries listed on Schedule5.08, which accurately sets forth each such Subsidiary's complete legalname and jurisdiction of incorporation.
SECTION 5.09.                    Investment Company Act
.  

Neither the Parent nor any of the Subsidiaries is an"investment company" within the meaning of the Investment Company Act of 1940,as amended.
SECTION 5.10.                    Public Utility Holding Company Act
.  

Neither the Parent nor any of the 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 "holdingcompany", as such terms are defined in the Public Utility Holding Company Actof 1935, as amended.
SECTION 5.11.                    Ownership of Property; Liens
.  

Each of the Parent and the Subsidiaries has title to itsproperties sufficient for the conduct of its business, and none of suchproperty is subject to any Lien except as permitted in Section 6.17.
SECTION 5.12.                    No Default
.  

Neither the Parent nor any of the Subsidiaries is indefault under or with respect to any agreement, instrument or undertaking towhich it is a party or by which it or any of its property is bound which couldhave or cause a Material Adverse Effect.No Default or Event of Default has occurred and is continuing.
SECTION 5.13.                    Full Disclosure
.  

All information heretofore furnished by the Parent or anyof the Subsidiaries to the Administrative Agent, the Collateral Agent, or anyLender for purposes of or in connection with this Agreement or any transactioncontemplated hereby is, and all such information hereafter furnished by theParent or any of the Subsidiaries to the Administrative Agent, the CollateralAgent, or any Lender will be, true, accurate and complete in every materialrespect or based on reasonable estimates on the date as of which suchinformation is stated or certified.  TheParent or the Borrowers have disclosed to the Lenders in writing any and allfacts which could reasonably be expected to have or cause a Material AdverseEffect.
SECTION 5.14.                    Environmental Matters
.  
(a)    Neither the Parent nor any Subsidiary is subject to anyEnvironmental Liability which could have or cause a Material Adverse Effect andneither the Parent nor any Subsidiary has been designated as a potentiallyresponsible party under CERCLA or under any state statute similar toCERCLA.  None of the Real Properties hasbeen identified on any current or proposed (i) National Priorities List under40 C.F.R. Sec. 300, (ii) CERCLIS list or (iii) any list arising from a statestatute similar to CERCLA.  To the bestknowledge of the Parent and the Borrowers, none of the Aggregate Real Properties(other than the Real Properties) has been identified has been identified on anycurrent or proposed (i) National Priorities List under 40 C.F.R. Sec. 300, (ii)CERCLIS list or (iii) any list arising from a state statute similar to CERCLA.(b)   No Hazardous Materials have been or are being used, produced,manufactured, processed, treated, recycled, generated, stored, disposed of,managed or otherwise handled at, or shipped or transported to or from theAggregate Real Properties or are otherwise present at, on, in or under theAggregate Real Properties, or, to the best of the knowledge of the Parent andthe Borrowers, at or from any adjacent site or facility, except for HazardousMaterials used, produced, transported, manufactured, processed, treated,recycled, generated, stored, disposed of, managed, or otherwise handled in theordinary course of business in material compliance with all applicableEnvironmental Requirements.(c)    The Parent and each of the Subsidiaries have procured allEnvironmental Authorizations necessary for the conduct of its business, and isin material compliance with all Environmental Requirements in connection withthe operation of the Aggregate Real Properties and the Parent's and eachSubsidiary's respective businesses. 
SECTION 5.15.                    Capital Stock

.  

All Capital Stock, Redeemable Preferred Stock, debentures,bonds, notes and all other securities of the Parent and the Subsidiariespresently issued and outstanding are validly and properly issued in accordancewith all applicable laws, including, but not limited to, the "Blue Sky" laws ofall applicable states and the federal securities laws.  All of the issued shares of Capital Stockand Redeemable Preferred Stock of the Subsidiaries is owned by the Parent, or aWholly-Owned Subsidiary free and clear of any Lien or adverse claim.
SECTION 5.16.                    Margin Stock
.  

Neither the Parent nor any of the Subsidiaries is engagedprincipally, or as one of its important activities, in the business ofpurchasing or carrying any Margin Stock, and no part of the proceeds of anyLoan will be used to purchase or carry any Margin Stock or to extend credit toothers for the purpose of purchasing or carrying any Margin Stock, or be usedfor any purpose which violates, or which is inconsistent with, the provisionsof Regulation T, U or X.
SECTION 5.17.                    Insolvency
.  

After giving effect to the execution and delivery of theLoan Documents and the incurrence of the Obligations under this Agreement: (a)neither the Parent nor either of the Borrowers will (i) be "insolvent," withinthe meaning of such term as used in O.C.G.A. Sec. 18-2-22 or as defined in Sec. 101of the Bankruptcy Code, or Section 2 of either the "UFTA" or the "UFCA", or asdefined or used in any "Other Applicable Law" (as those terms are definedbelow), or (ii) be unable to pay its debts generally as such debts become duewithin the meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTAor Section 6 of the UFCA, or (iii) have an unreasonably small capital to engagein any business or transaction, whether current or contemplated, within themeaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA or Section5 of the UFCA; and (b) the Obligations of the Parent and the Borrowers underthe Loan Documents will not be rendered avoidable under any Other ApplicableLaw.  For purposes of this Section 5.17,"UFTA" means the Uniform Fraudulent Transfer Act, "UFCA" means the UniformFraudulent Conveyance Act, and "Other Applicable Law" means any otherapplicable law pertaining to fraudulent transfers or acts voidable bycreditors, in each case as such law may be amended from time to time. 
SECTION 5.18.                    Insurance
.  

The Parent and each of the Subsidiaries have (either inthe name of the Parent or in such Subsidiary's own name), with financiallysound and reputable insurance companies and with a Best's Rating of at least"A," insurance in at least such amounts and against at least such risks(including on all its property, and business interruption, public liability andworker's compensation, to the extent not self insured as to worker'scompensation) as are usually insured against in the same general area bycompanies of established repute engaged in the same or similar business.
SECTION 5.19.                    Citizenship.
The Parent and each of the Borrowers is a citizen of theUnited States, as defined in 49 U.S.C. Section 40102(a)(15) (a "Citizen").  Each other Subsidiary that must be a Citizenin order to conduct its business as currently conducted is a Citizen.  Except as set out on Schedule 5.19,none of the Parent, either of the Borrowers, or any such other Subsidiary is aPerson constituting a national or citizen of any foreign country as designatedin any applicable law or regulation or a national or a citizen of any foreigncountry designated in the Foreign Assets Control Regulations or in the CubanAssets Control Regulations of the United States Treasury Department, 31 C.F.R.,Chapter V, as amended.
SECTION 5.20.                    Status as an Air Carrier.
Each of the Parent and the Subsidiaries which must be soauthorized in order to conduct its business as currently conducted, (a) isauthorized to engage in all cargo domestic air service under certificatesissued pursuant to 49 U.S.C. Section 41103 and 49 U.S.C. Section 41102(a),respectively, and (b) is the holder of a valid and effective operatingcertificate issued by the Federal Aviation Administration pursuant to Part 121of the Federal Aviation Regulations.Such certificates are in full force and effect and are adequate for theconduct of the business of the Parent and its Subsidiaries as nowconducted.  There are no actions,proceedings or investigations pending or, to the knowledge of any of itsofficers, threatened (or any basis therefor known to the Parent or either ofthe Borrowers) to amend, modify, suspend or revoke any such certificate inwhole or in part), which would have any material adverse effect on any suchcertificate or any of the operations of the Parent or its Subsidiaries.
SECTION 5.21.                    Purchase of Collateral
.  

Within the 12-month period preceding the Closing Date,neither the Parent nor any Subsidiary has purchased any of the Collateral in abulk transfer or in a transaction which was outside the ordinary course of thebusiness of the Parent's or such Subsidiary's seller.
SECTION 5.22.                    Possession of Permits
.  

The Parent and each Subsidiary possess all franchises,certificates, licenses, permits and other authorizations from governmentalpolitical subdivisions or regulatory authorities, and all patents, trademarks,service marks, trade names, copyrights, licenses and other rights, free fromburdensome restrictions, that are necessary for the ownership, maintenance andoperation of any of its properties and assets, and neither the Parent nor anySubsidiary is in violation of any thereof except where any such failure topossess any of the foregoing or any violation of any thereof does not have andwould not reasonably be expected to cause a Material Adverse Effect and wouldnot impede any rights of the Administrative Agent or the Collateral Agent withrespect to the Collateral.
SECTION 5.23.                    Labor Disputes
.  

Except as set forth on Schedule 5.23, (a) there isno collective bargaining agreement or other labor contract covering employeesof the Parent or any Subsidiary, (b) no such collective bargaining agreement orother labor contract is scheduled to expire before June 30, 2004, (c) to thebest knowledge of the Parent and the Subsidiaries, no union or other labor organizationis seeking to organize, or to be recognized as, a collective bargaining unit ofemployees of any of the Parent or any Subsidiary or for any similar purpose,and (d) there is no pending, or to the knowledge of the Parent or either of theBorrowers, threatened, strike, work stoppage, material unfair labor practiceclaim, or other material labor dispute against or affecting the Parent or anySubsidiary or their respective employees.
SECTION 5.24.                    Restrictions
.  

Neither the Parent nor any of the Subsidiaries is a partyor subject to any contract, agreement, or charter or other corporaterestriction which materially and adversely affects its business or the use orownership of any of its assets.  Neitherthe Parent nor any Subsidiary is a party or subject to any contract oragreement (other than the Loan Documents and Indenture Documents) whichrestricts its right or ability to incur Debt, or prohibits the execution of orcompliance with this Agreement or the other Loan Documents by the Parent or anySubsidiary, as applicable.
SECTION 5.25.                    Leases
.  

Schedule 5.25 is a complete listing as of the datehereof of each capitalized and operating lease (including any master leases) ofthe Parent and each of the Subsidiaries involving annual lease expenses inexcess of $500,000.  The Parent and eachof the Subsidiaries is in compliance in all material respects with all of theterms of each of its respective capitalized and operating leases.  
SECTION 5.26.                    Trade Relations
.  

There exists no present condition or state of facts orcircumstances which would materially adversely affect the Parent or any of theSubsidiaries or prevent the Parent or any of the Subsidiaries from conductingits business after the consummation of the transactions contemplated by thisAgreement in substantially the same manner in which they have heretofore beenconducted, and there exists no actual, and to the best knowledge of the Parentand each of the Borrowers threatened, termination, cancellation or limitationof, or any modification or change in, the business relationship between theParent or any Subsidiary and any customer or suppliers or any affiliated groupof customers or suppliers whose purchases or sales individually or in theaggregate are material to the business of the Parent and the Subsidiaries,taken as a whole.
SECTION 5.27.                    Capital Structure
.  

As of the date hereof, Schedule 5.27 states (a) thecorrect name of each of the Subsidiaries, its jurisdiction of incorporation andthe percentage of its Capital Stock and Redeemable Preferred Stock owned by theParent or other Subsidiary, (b) the name of each of the Parent's and theSubsidiaries' Affiliates (except for the Parent and other Subsidiaries) and thenature of such affiliation, (c) the number, nature and holder of all CapitalStock and Redeemable Preferred Stock of each Subsidiary, and (d) the number ofauthorized, issued and treasury shares of each Subsidiary.  The Parent has good title to all of theshares it purports to own of the Capital Stock and Redeemable Preferred Stockof each of its Subsidiaries, and each of the Borrowers has good title to all ofthe shares it purports to own of the Capital Stock and Redeemable PreferredStock of each of its respective subsidiaries, free and clear in each case ofany Lien other than Permitted Encumbrances.All such shares have been duly issued and are fully paid andnon-assessable. 
SECTION 5.28.                    Material Contracts.
The Parent and each of the Subsidiaries is in compliancein all material respects with all terms and provisions of each MaterialContract to which it is a party.
SECTION 5.29.                    Survival of Representations and Warranties.
The Parent and each of the Borrowers covenants, warrantsand represents to the Administrative Agent, the Collateral Agent, and eachLender that all representations and warranties of the Parent or any of theSubsidiaries contained in this Agreement or any of the other Loan Documentsshall be true at the time of the execution of this Agreement and the other LoanDocuments, and shall survive the execution, delivery and acceptance thereof byAdministrative Agent, the Collateral Agent, and the parties thereto and theclosing of the transactions described therein or related thereto. 
SECTION 5.30.                    Force Majeure.
None of the Parent's or any Subsidiary's business issuffering from effects of fire, accident, strike, drought, storm, earthquake,embargo, tornado, hurricane, act of God, acts of a public enemy or othercasualty which would have a Material Adverse Effect.
SECTION 5.31.                    1992 Notes and 1995 Notes.
Neither the Parent nor any of theSubsidiaries is in default, and no "Default" or "Event of Default"(as suchterms are defined in the Indenture) has occurred and is continuing, under theIndenture or any of the other Indenture Documents.
SECTION 5.32.                    Federal Taxpayer Identification Number
.  

The Parent's and each of the Subsidiaries' federaltaxpayer identification numbers are as indicated on the respective InformationDisclosure Certificates. 
SECTION 5.33.                    Right to Assign and Grant Security Interest
.  

The Parent and each Subsidiary party to any CollateralDocument have the full right, power and authority to grant a security interestin the Collateral.
SECTION 5.34.                    Intercompany Debt.
No Debt owing from the Parent to any Subsidiary, from anySubsidiary to the Parent, or any Subsidiary to any other Subsidiary isevidenced by any negotiable or non-negotiable instrument, note, or otherevidence of indebtedness other than (a) book entries made upon the books of theParent and the Subsidiaries and (b) promissory notes which constitute aReceivables Program Document.
ARTICLE6COVENANTS
The Parent and each of the Borrowers agree, jointly andseverally, that, so long as any Lender has any Commitment hereunder or anyamount payable hereunder or any of the Obligations remains unpaid:
SECTION 6.01.                    Information
.  

The Parent, for itself and on behalf of the Borrowers,will deliver to each of the Lenders:
(a)    as soon as available and in any event within 90 days after theend of each Fiscal Year, (i) a consolidated and consolidating balance sheet ofthe Parent and the Consolidated Subsidiaries as of the end of such Fiscal Yearand (ii) the related consolidated and consolidating statements of income forsuch Fiscal Year, and (iii) the related consolidated shareholders' equity andcash flows for such Fiscal Year, setting forth in each case in comparative formthe figures for the previous fiscal year and, except for the consolidatingstatements, certified by the Public Accountants, with such certification to befree of exceptions and qualifications not acceptable to the Required Lenders; 
(b)   as soon as available and in any event within 45 days after theend of each of the first 3 Fiscal Quarters of each Fiscal Year, a consolidatedand consolidating balance sheet of the Parent and the Consolidated Subsidiariesas of the end of such Fiscal Quarter and the related statement of income andstatement of cash flows for such Fiscal Quarter and for the portion of the FiscalYear ended at the end of such Fiscal Quarter, setting forth in each case incomparative form the figures for the previous Fiscal Year, all certified(subject to normal year‐end adjustments) as to fairness ofpresentation, GAAP and consistency by a Senior Officer; 

(c)    simultaneously with the delivery of each set of financialstatements referred to in paragraphs (a) and (b) above, acertificate, substantially in the form of Exhibit G (a "ComplianceCertificate"), of a Senior Officer (i) setting forth in reasonable detailthe calculations required to establish whether the Parent and the Borrowerswere in compliance with the requirements of Sections 6.16, 6.17, 6.19,6.20, 6.21, 6.22, and 6.23 on the date of such financial statements;(ii) stating whether any Default exists on the date of such certificateand, if any Default then exists, setting forth the details thereof and theaction which the Parent and the Borrowers are taking or propose to take withrespect thereto; and (iii) setting forth the Applicable Margin as of the mostrecent Performance Pricing Determination Date; 

(d)   [RESERVED] 

(e)    simultaneously with the delivery of each set of annualfinancial statements referred to in paragraph (a) above, (i) a statement of thePublic Accountants which reported on such statements to the effect that nothinghas come to their attention to cause them to believe that any Default existedon the date of such financial statements, and (ii) a copy of any managementletter furnished to the Parent or either of the Borrowers by the PublicAccountants; 

(f)     as soon as available and in no event later than February 15thof the then-current Fiscal Year, projections of the Parent and the Subsidiariesfor such Fiscal Year, set forth Fiscal-Quarter-by-Fiscal-Quarter, together withall material assumptions made in connection therewith; 

(g)    within 5 Domestic Business Days after the Parent or anyBorrower becomes aware of the occurrence of any Default, a certificate of aSenior Officer of the Parent or the Borrowers setting forth the details thereofand the action which the Parent and/or the Borrowers are taking or propose totake with respect thereto; 

(h)    promptly upon the mailing thereof to the shareholders of theParent generally, copies of all financial statements, reports and proxystatements so mailed; 

(i)      promptly upon the filing thereof, copies of all registrationstatements (other than the exhibits thereto and any registration statements onForm S-8 or its equivalent) and annual, quarterly or monthly reports which theParent shall have filed with the Securities and Exchange Commission; 

(j)     if and when any member of the Controlled Group (i) gives or isrequired to give notice to the PBGC of any "reportable event" (as defined inSection 4043 of ERISA) with respect to any Plan which might constitute groundsfor a termination of such Plan under Title IV of ERISA, or knows that the planadministrator of any Plan has given or is required to give notice of any suchreportable event, a copy of the notice of such reportable event given orrequired to be given to the PBGC; (ii) receives notice of complete or partialwithdrawal liability under Title IV of ERISA, a copy of such notice; or (iii)receives notice from the PBGC under Title IV of ERISA of an intent to terminateor appoint a trustee to administer any Plan, a copy of such notice; 

(k)   as soon as practicable, but in any event (i) on or before 30days after the end of each Fiscal Month, (ii) at such more frequent intervalsas required by the Administrative Agent from time to time, and (iii)immediately upon any change in the aggregate amount of Purchased Receivableswhich have been purchased from the Receivables Subsidiary under the ReceivablesProgram, a duly executed Borrowing Base Certificate (and to the AdministrativeAgent any accompanying documentation required by the Administrative Agent),with respect to satisfaction of the requirement that the Working CapitalObligations shall not exceed the Borrowing Base, as of the last day of therelevant reporting period (or, with respect to clause (iii) above, as of the dateof such change in the aggregate amount of Purchased Receivables which have beenpurchased), in the form of Exhibit F or such other form as theAdministrative Agent may require or request for such purpose from time to timehereafter, the statements in which, in each instance, shall be certified as totruth and accuracy by the Senior Officer;
(l)      writtennotice of the following:
(i)                 promptly after the Parent's or a Subsidiary's learningthereof, of (A) the commencement of any litigation affecting the Parent or anyof the Subsidiaries or any of their respective assets, whether or not the claimis considered by Parent, either Borrower, or such Subsidiary to be covered byinsurance, and (B) the institution of any administrative proceeding which ineither case of clause (A) or (B), if decided adversely, could reasonably beexpected to have a Material Adverse Effect; 

(ii)               at least 30 days prior thereto, of the opening of any newoffice or place of business of Parent or any Subsidiary or the closing of anyexisting office or place of business of Parent or any Subsidiary, but only ifsuch office or place of business is or was a place where any of the Collateralis, will be, or was kept, stored, maintained, or warehoused;

(iii)              promptly after Parent's or any Subsidiary's learning thereof,of any labor dispute to which Parent or such Subsidiary may become a party, orany strikes or walkouts relating to any of its plants or other facilities,which in either case will have a Material Adverse Effect, and the expiration ofany material labor contract to which it is a party or by which it is bound; 

(iv)             promptly after Parent's or any Subsidiary's learning thereof,knowledge of any and all Environmental Liabilities, pending, threatened oranticipated Environmental Proceedings, Environmental Notices, EnvironmentalJudgments and Orders, and Environmental Releases at, on, in, under or in anyway affecting the Aggregate Real Properties or any adjacent property, and allfacts, events, or conditions that could lead to any of the foregoing, to theextent any of the foregoing could reasonably be expected to have a MaterialAdverse Effect;

(v)               promptly after the Parent's or any Subsidiary's learningthereof, of any default by the Parent or any Subsidiary under the Indenture orany other Indenture Documents; and 

(vi)             promptly upon the execution thereof, of any amendment to theIndenture or any other Indenture Document, including, without limitation, anysupplemental indentures thereto, entered into by the Parent or any Subsidiary,and the Parent shall send the Administrative Agent a copy thereof promptlythereafter; and
(m)  from time to time such additional information regarding thefinancial position or business (including, without limitation, tax returns andbank statements) of the Parent and the Subsidiaries as the AdministrativeAgent, at the request of any Lender, may reasonably request. 
SECTION 6.02.                    Inspection of Property, Books and Records. 

(a)    The Parent will (i) keep, and cause each Subsidiary to keep,proper books of record and account in which, when consolidated,  full, true and correct entries in conformitywith GAAP shall be made of all dealings and transactions in relation to itsbusiness and activities; and (ii) permit, and cause each Subsidiary to permit,the Administrative Agent, the Collateral Agent, or the Lenders or representativesof the Administrative Agent, the Collateral Agent, and any Lender (at theParent's or the Borrowers' expense if a Default or Event of Default is inexistence or at the Administrative Agent's, the Collateral Agent's, or suchLender's respective expense, as the case may be, prior to the occurrence of aDefault or Event of Default) to visit and inspect any of their respectiveproperties, verify information with any Person, to examine and make abstractsfrom any of their respective books and records and to discuss their respectiveaffairs, finances and accounts with their respective officers, employees andthe Public Accountants, the Parent and each of the Borrowers agreeing tocooperate and assist in such visits and inspections, in each case prior to theoccurrence of a Default, upon reasonable notice and at such reasonable timesand as often as may reasonably be requested, and after the occurrence of aDefault, at any time and without prior notice. 

(b)   In addition to the rights granted the Administrative Agent,the Collateral Agent, and the Lenders pursuant to Section 6.02(a), theAdministrative Agent and the Collateral Agent (or any person or personsdesignated by either of them) shall, in its sole discretion, have the right, atany time after the occurrence and during the continuance of a Default or Eventof Default, to call at any place of business of the Parent or any of theSubsidiaries at any time and without prior notice, and, without hindrance ordelay, examine, inspect, and check all or any portion of the Collateral and toexamine, inspect, and check and make copies of and extracts from the Parent'sor such Subsidiary's books, records, journals, orders, receipts and anycorrespondence and other data relating to the Collateral, to the Parent's or suchSubsidiary's business or to any other transactions between the parties hereto 

(c)    In addition to the rights granted to the Administrative Agent,the Collateral Agent, and the Lenders in the foregoing provisions of thisSection 6.02, the Parent or the Borrowers shall, at their sole cost and expenseand upon the request of the Administrative Agent, cause up to 3 appraisals perFiscal Year to be performed and delivered to the Administrative Agent and theLenders (with each such appraisal to be performed by an appraiser or appraisersreasonably satisfactory to the Administrative Agent) on all of the Parent's andthe Subsidiaries' assets which constitute Collateral. 

SECTION 6.03.                    Maintenance of Existence

.  

The Parent shall, and shall cause each Subsidiary to,maintain, (a) its respective corporate existence and carry on its respectivebusiness in substantially the same manner and in substantially the same fieldsas such business is now carried on and maintained, and (b) its respectivecorporate charter, by-laws, partnership agreement, operating agreement andother similar documents and agreements relating to its legal existence andorganization, and not permit any amendment or other modification thereto exceptfor any amendment or modification that would not affect the Obligations orresult in a Material Adverse Effect.The Parent shall not, and shall not permit any Subsidiary to, change itsstate or jurisdiction of incorporation.
SECTION 6.04.                    Dissolution
.  

The Parent shall not suffer or permit dissolution orliquidation either in whole or in part or redeem or retire any shares of itsown stock or that of any Subsidiary, except through (a) corporatereorganization to the extent permitted by Section 6.05 or (b) through paymentof Restricted Payments permitted under Section 6.15.
SECTION 6.05.                    Consolidations, Mergers and Sales of Assets. 
(a)    The Parent will not, nor will it permit any Subsidiary to,merge or consolidate, or permit any of its Subsidiaries to merge orconsolidate, with any other Person, provided that any Subsidiary which is aGuarantor may merge with any other Subsidiary which is a Guarantor. 

(b)   The Parent will not, nor will it permit any Subsidiary to,sell, lease or otherwise transfer any assets to, any other Person, ordiscontinue or eliminate any business line or segment, provided that the foregoinglimitation on the sale, lease or other transfer of assets and on thediscontinuation or elimination of a business line or segment shall not prohibit(i) the sale of Receivables pursuant to the Receivables Securitization Program;(ii) sale and leaseback transactions described in the definition of "ExcludedAircraft Financings"; or (iii) so long as no Event of Default is in existenceand subject to Section 2.12(c), the sale, lease or other transfer of assets(other than Capital Stock or Collateral) not exceeding $5,000,000 in book valuein the aggregate in any Fiscal Year among all of such assets of the Parent andthe Subsidiaries, or $500,000 in book value in any one instance; (iv) upon theprior written consent of the Required Lenders, which consent shall not beunreasonably withheld or delayed, so long as no Event of Default is inexistence, the sale, lease or other transfer of assets (other than CapitalStock or Collateral) owned by Subsidiaries (other than the Borrowers) andlocated at places of business outside of the United States not exceeding$10,000,000 in book value in the aggregate in any Fiscal Year; or (v) the saleof the Parent's and the Subsidiaries' inventory in the ordinary course ofbusiness. 

SECTION 6.06.                    Use of Proceeds

.  

No portion of the proceeds of the Loans will be used,directly or indirectly, by the Parent or any Subsidiary (a) in connection with,whether directly or indirectly, any tender offer for, or other acquisition of,stock or other evidences of ownership of any Person or all or substantially allof the assets of any Person, with a view towards obtaining control of suchother Person, other than a Permitted Acquisition, (b) directly or indirectly,for the purpose, whether immediate, incidental or ultimate, of purchasing orcarrying any Margin Stock, or (c) for any purpose in violation of anyapplicable law or regulation.
SECTION 6.07.                    Compliance with Laws; Payment of Taxes
.  
(a)    The Parent will, and will cause each member of the ControlledGroup to, comply with applicable laws (including but not limited to ERISA andthe Fair Labor Standards Act of 1938, as amended), regulations and similarrequirements of governmental authorities (including but not limited to PBGC),except where the necessity of such compliance is being contested in good faiththrough appropriate proceedings diligently pursued and except where failure tocomply would not have and would not reasonably be expected to cause a MaterialAdverse Effect.  The Parent will, andwill cause each of the Subsidiaries to, pay promptly when due all taxes, assessments,governmental charges, claims for labor, supplies, rent and other obligationswhich, if unpaid, might become a lien against the property of the Parent or anySubsidiary, except liabilities being contested in good faith and against whichthe Parent or such Subsidiary will set up reserves in accordance with GAAP. 
(b)   The Parent shall not permit the aggregate complete or partialwithdrawal liability under Title IV of ERISA with respect to MultiemployerPlans incurred by the Parent, the Borrowers, or other members of the ControlledGroup to exceed $10,000,000 at any time.For purposes of this Section 6.07(b), the amount of withdrawal liabilityof the Parent, the Borrowers, and members of the Controlled Group at any dateshall be the aggregate present value of the amount claimed to have beenincurred, less any portion thereof which the Parent, the Borrowers, and membersof the Controlled Group have paid or as to which the Parent reasonablybelieves, after appropriate consideration of the possible adjustments arisingunder Section 4219 and 4221 of ERISA, it, the Borrowers, and members of theControlled Group will have no liability, provided that the Parent shall obtainprompt written advice from independent actuarial consultants supporting suchdetermination.  The Parent agrees todeliver, along with the financial statements delivered under Section 6.01(a),the most current statements of the withdrawal liabilities of the Parent, theBorrowers, and members of the Controlled Group from each Multiemployer Plan, ifany. 

SECTION 6.08.                    Insurance.

The Parent will maintain, and will cause each of theSubsidiaries to maintain (either in the name of the Parent or in suchSubsidiary's own name), with financially sound and reputable insurancecompanies acceptable to the Administrative Agent and the Collateral Agent andwith a Best's Rating of at least "A," insurance on all of their property in atleast such amounts and against at least such risks (including on all itsproperty, public liability and worker's compensation (but solely with respectto worker's compensation, only to the extent not self-insured), and businessinterruption insurance) as are usually insured against in the same general areaby companies of established repute engaged in the same or similar business.  The Parent shall deliver to the CollateralAgent satisfactory lender's loss payable endorsements naming the CollateralAgent, as Collateral Agent for the Secured Creditors, as sole loss payee,assignee and additional insured, as its interests may appear.  Each policy of insurance or endorsementshall contain a clause requiring the insurer to give not less than thirty (30)days prior written notice to the Collateral Agent in the event of cancellationor non-renewal by the insurance company of the policy for any reason whatsoever.  Upon the date of this Agreement, and fromtime to time thereafter upon the Collateral Agent's request, the Parent shallprovide, or shall cause the Subsidiaries to provide, the Collateral Agent witha statement from each insurance company or its authorized agent providing theforegoing coverage, acknowledging in favor of the Collateral Agent thecontinued effectiveness of the foregoing insurance clauses.  If the Parent or such Subsidiary fails toprovide and pay for such insurance, the Collateral Agent may, at its option,but shall not be required to, procure the same and charge the Borrowerstherefor as a part of the Obligations. 
SECTION 6.09.                    Change in Fiscal Year
.  

The Parent will not change its Fiscal Year, or the fiscalyear of any Subsidiary, without the consent of the Required Lenders. 
SECTION 6.10.                    Maintenance of Property
.  

The Parent shall, and shall cause each Subsidiary to,maintain all of its properties and assets in good condition, repair and workingorder, ordinary wear and tear excepted.
SECTION 6.11.                    Material Contracts; Operating and Capitalized Leases
.  
(a)    The Parent shall, and shall cause each Subsidiary to, complywith all material terms and conditions of any Material Contract to which it orsuch Subsidiary is a party.  The Parentmay not, without the Administrative Agent's and the Required Lenders' priorwritten consent, (a) enter into, or permit any Subsidiary to enter into, anyamendment or modification to any Material Contract other than in the ordinarycourse of business, or (b) permit any Material Contract to be cancelled orterminated prior to its stated maturity other than in the ordinary course ofbusiness.  The Parent shall promptlynotify the Administrative Agent and deliver to the Administrative Agent anynotice received by the Parent or any Subsidiary with respect to any event whichconstitutes a material default by the Parent or such Subsidiary under anyMaterial Contract to which the Parent or such Subsidiary is a party or by whichany of the assets of the Parent or such Subsidiary may be bound. 
(b)   The Parent or the Borrowers shall provide notice toAdministrative Agent and the Collateral Agent upon the Parent's or anySubsidiary's entering into any contract, lease, guaranty, instrument, document,or other agreement the termination or breach of which would reasonably beexpected to have or cause a Material Adverse Effect. 

(c)    Upon the Administrative Agent's or Collateral Agent'sreasonable request, the Parent shall cause the Parent's and the Subsidiaries'capitalized or operating leases to be made available for inspection and copyingby the Administrative Agent or the Collateral Agent, or either of theirdesignees, and the Parent shall inform the Administrative Agent and theCollateral Agent of any capitalized or operating lease entered into by theParent or any Subsidiary which involves more than $500,000 in annual leaseexpenses. 

(d)   From time to time, the Administrative Agent shall have theright in its discretion to identify certain of the Parent's or theSubsidiaries' contracts, leases, guaranties, instruments, documents, and otheragreements as "Material Contracts" and thereafter require the Parent toexercise its best efforts to cause such additional Material Contracts to becollaterally assigned to the Collateral Agent as additional Collateral pursuantto a Collateral Assignment of Material Contract. 

SECTION 6.12.                    Environmental Matters

.  

The Parent will not permit any Third Party, and will notpermit any Subsidiary to permit any Third Party, to, use, produce, manufacture,process, treat, recycle, generate, store, dispose of, manage at, or otherwisehandle, or ship or transport to or from the Aggregate Real Properties anyHazardous Materials except for Hazardous Materials used, produced,manufactured, processed, treated, recycled, generated, stored, disposed,managed, or otherwise handled in the ordinary course of business in materialcompliance with all applicable Environmental Requirements.
SECTION 6.13.                    Environmental Release
.  

The Parent agrees that upon the occurrence of a materialEnvironmental Release at or on any of the Aggregate Real Properties it will, orwill cause the applicable Subsidiary to, act immediately to investigate theextent of, and to take appropriate remedial action to eliminate, suchEnvironmental Release, whether or not ordered or otherwise directed to do so byany Environmental Authority.
SECTION 6.14.                    Transactions with Affiliates; Intercompany Debt
.  
(a)   Other than transactions or arrangements existing on theClosing Date and described on Schedule 6.14 and other than in connectionwith an Excluded Aircraft Financing, neither the Parent nor any of theSubsidiaries shall enter into, or be a party to, any transaction involving$1,000,000 or more with any Affiliate of the Parent or such Subsidiaries (whichAffiliate is not one of the Borrowers or a Wholly Owned Subsidiary), except aspermitted by law and in the ordinary course of business and pursuant toreasonable terms which are fully disclosed to the Administrative Agent and theLenders and are no less favorable to the Parent or such Subsidiary than wouldbe obtained in a comparable arm's length transaction with a Person which is notan Affiliate. All obligations (consisting of Debt or otherwise) owed to anyAffiliate by the Parent or any Subsidiary shall by its terms be subordinated infull to the payment of the Obligations. (b)   The Parent shall not permit any Debt owning from the Parent toany Subsidiary, any Subsidiary to the Parent, or any Subsidiary to any otherSubsidiary to be evidenced by any negotiable or non-negotiable instrument,note, or other evidence of indebtedness other than (i) book entries made uponthe books of the Parent and the Subsidiaries and (ii) promissory notes whichconstitute Receivables Program Documents. 
SECTION 6.15.                    Restricted Payments

.  

The Parent will not declare or make any Restricted Paymentduring any Fiscal Year; provided that Parent may pay Dividends in an amount notexceeding $2,000,000 per Fiscal Quarter.
SECTION 6.16.                    Investments
.  

The Parent shall not, and shall not permit any of theSubsidiaries to, make Investments in any Person except:
(a)    Investments existing on the date hereof and listed on Schedule6.16; 
(b)   loans or advances to employees not exceeding $1,000,000 in theaggregate principal amount outstanding at any time, in each case made in theordinary course of business and consistent with practices existing on the ClosingDate; 

(c)    Investments by the Parent or a Borrower in Subsidiaries whichare Guarantors and which have delivered to the Collateral Agent thoseCollateral Documents required by Sections 4.01 and 6.27, as applicable; 

(d)   Investments by the Receivables Subsidiary in the SpecialPurpose Vehicle, consistent with Standard Securitization Undertakings; 

(e)    loans and advances to the Receivables Subsidiary evidenced bya Purchase Money Note; 

(f)     deposits required by government agencies or public utilities; 

(g)    Investments in direct obligations of the United StatesGovernment maturing within one year; 

(h)    Investments in certificates of deposit issued by a commerciallender whose credit is satisfactory to the Administrative Agent; 

(i)      Investments in commercial paper rated A1 or the equivalentthereof by S&P or P1 or the equivalent thereof by Moody's and in eithercase maturing within 6 months after the date of acquisition; 

(j)    Investments in tender bonds the payment of theprincipal of and interest on which is fully supported by a letter of creditissued by a United States bank whose long‐term certificates of depositare rated at least AA or the equivalent thereof by S&P and Aa or theequivalent thereof by Moody's; 

(k)   Investments in the Supplemental Executive Retirement Plan andthe Deferred Compensation Plan in an aggregate amount not to exceed in anyFiscal Year the amount required to reach the cumulative projected benefitobligation; 

(l)      Investments in any Person shown on Schedule 6.16 whichconstitute the reinvestment of any dividends, capital appreciation, or othergain or growth income in the same Person; and 

(m)   Investments inAircraft Financing Subsidiaries for which the Administrative Agent has grantedits prior written consent, and Investments of a Domestic Subsidiary arisingfrom any Swap Agreement relating to an Excluded Aircraft Financing; 

(n)    Other Investments which are not otherwise allowed insubparagraphs (a) through (m), to the extent each such Investment has beenapproved by the Administrative Agent in writing prior to the making thereof; 

(o)   other Investments of the Parent and all Subsidiaries nototherwise allowed in subparagraphs (a) through (n) which, together with theaggregate fair market value of the consideration paid (determined as of thetime such consideration was paid) in connection with any Permitted Acquisitionsconsummated on or after the Closing Date, do not at any time exceed inaggregate outstanding amount the lesser of (i) $20,000,000 or (ii) 2.5% ofConsolidated Tangible Net Worth;provided, however,in each case, immediately after giving effect to the making of any Investment,no Default shall have occurred and be continuing.
SECTION 6.17.                    Permitted Liens
.  

The Parent will not, and will not permit any Subsidiaryto, create, assume or suffer to exist any Lien, directly or indirectly, on anyasset now owned or hereafter acquired by it, except, with respect to theCollateral, the Permitted Encumbrances, and with respect to assets other thanCollateral, other Liens set forth below:
(a)    Liens existing on the date of this Agreement securing Debtoutstanding on the date of this Agreement and disclosed on Schedule 6.17; 
(b)   any Lien existing on any specific fixed asset of any Person atthe time such Person becomes a Subsidiary and not created in contemplation ofsuch event; 

(c)    any Lien on any specific fixed asset securing Debt incurred orassumed for the purpose of financing all or any part of the cost of acquiringor constructing such asset, provided that such Lien attaches to suchasset concurrently with or within 18 months after the acquisition or completionof construction thereof; 

(d)   any Lien on any specific fixed asset of any Person existing atthe time such Person is merged or consolidated with or into the Parent or aSubsidiary and not created in contemplation of such event; 

(e)    any Lien existing on any specific fixed asset prior to theacquisition thereof by the Parent or a Subsidiary and not created incontemplation of such acquisition; 

(f)     any Lien securing Debt owing by any Subsidiary to theBorrowers or any Guarantor; 

(g)    any Lien arising out of the refinancing, extension, renewal orrefunding of any Debt secured by any Lien permitted by any of the foregoingparagraphs (a) through (f) of this Section, provided that (i) such Debtis not secured by any additional assets, and (ii) the amount of such Debtsecured by any such Lien is not increased; 

(h)    Liens incidental to the conduct of its business or theownership of its assets which (i) do not secure Debt and (ii) do not in theaggregate materially detract from the value of its assets or materially impairthe use thereof in the operation of its business; 

(i)      any Lien on Margin Stock; 

(j)     Liens on Receivables Program Assets pursuant to a ReceivablesSecuritization Program; and 

(k)   Liens incurred in connection with the Excluded AircraftFinancings.

provided, however,that immediately after giving effect to the creation, assumption, existence orincurring of any Liens permitted by this Section 6.17, no Default or Event ofDefault shall have occurred and be continuing.
SECTION 6.18.                    Restrictions on Ability of Subsidiaries to PayDividends
.  

Except as provided for in this Agreement, the Parent shallnot, and shall not permit any Subsidiary to, directly or indirectly, create orotherwise cause or suffer to exist or become effective any contractualencumbrance or restriction on the ability of any Subsidiary to (a) pay anydividends or make any other distributions on its Capital Stock or RedeemablePreferred Stock or any other interest or (b) make or repay any loans oradvances to or from the Parent or the other Subsidiaries, as the case may be.
SECTION 6.19.                    Minimum Consolidated EBITDA. 
(a)    At the end of each Fiscal Quarter, commencing with the FiscalQuarter ending September 30, 2001, Consolidated EBITDA for the Fiscal Quarterjust ended shall be greater than the minimum levels as set forth opposite suchFiscal Quarter:

Fiscal Quarter Ending:Minimum Level

                        September30, 2001                                         $30,000,000

                        December31, 2001                                         $30,000,000

                        March31, 2002                                               $35,000,000

                        June30, 2002                                                  $35,000,000

                        September30, 2002                                         $35,000,000

                        December31, 2002                                         $35,000,000

                        March31, 2003                                               $40,000,000

                        June30, 2003                                                  $40,000,000

                        September30, 2003                                         $40,000,000

                        December31, 2003                                         $40,000,000

                        March31, 2004, and 

                        atall times thereafter                                         $40,000,000

 
(b)   At the end of each of the Parent's Fiscal Quarters, commencingwith the Fiscal Quarter ending June 30, 2001, the sum of Consolidated EBITDAfor the Fiscal Quarter just ended and the 3 immediately preceding quartersshall be greater than the minimum levels as set forth below opposite suchFiscal Quarter:
Fiscal Quarter Ending:MinimumLevel

                        June30, 2001                                                  $158,000,000

                        September30, 2001                                         $153,000,000

                        December31, 2001                                         $168,000,000

                        March31, 2002                                               $180,000,000

                        June30, 2002                                                  $200,000,000

                        September30, 2002                                         $215,000,000

                        December31, 2002                                         $225,000,000

                        March31, 2003                                               $240,000,000

                        June30, 2003                                                  $255,000,000

                        September30, 2003                                         $270,000,000

December 31, 2003                                         $275,000,000

March 31, 2004, and

at all times thereafter                                         $275,000,000
 SECTION 6.20.                    Maximum Leverage Ratio
At the end of each Fiscal Quarter, commencing with theFiscal Quarter ending June 30, 2001, the Leverage Ratio for the each suchFiscal Quarter shall at all times be less than the maximum levels as set forthbelow opposite such relevant Fiscal Quarter:

Fiscal Quarter Ending:Maximum Level

                        June30, 2001                                                  5.10to 1.00

                        September30, 2001                                         5.10to 1.00

                        December31, 2001                                         4.80to 1.00

                        March31, 2002                                               4.50to 1.00

                        June30, 2002                                                  4.20to 1.00

                        September30, 2002                                         4.00to 1.00

                        December31, 2002                                         4.00to 1.00

                        March31, 2003                                               4.00to 1.00

                        June30, 2003                                                  4.00to 1.00

                        September30, 2003                                         4.00to 1.00

December 31, 2003                                         4.00to 1.00

March 31, 2004, and

at all times thereafter                                         4.00to 1.00
 SECTION 6.21.                    Debt Service Coverage Ratio.
At the end of each Fiscal Quarter, commending with theFiscal Quarter ending June 30, 2001, the Debt Service Coverage Ratio for theFiscal Quarter just ended and the 3 previous quarters shall be greater than theminimum levels as set forth below opposite such Fiscal Quarter ended:

Fiscal Quarter Ending:Minimum Level

                        June30, 2001                                                  2.00to 1.00

                        September30, 2001                                         1.90to 1.00

                        December31, 2001                                         1.90to 1.00

                        March31, 2002                                               1.90to 1.00

                        June30, 2002                                                  1.90to 1.00

                        September30, 2002                                         2.00to 1.00

                        December31, 2002                                         2.10to 1.00

                        March31, 2003                                               2.15to 1.00

                        June30, 2003                                                  2.20to 1.00

                        September30, 2003                                         2.25to 1.00

December31, 2003                                         2.25to 1.00

March 31,2004, and

at alltimes thereafter                                         2.25to 1.00

 
SECTION 6.22.                    Minimum Liquidity; Fixed Charge Coverage Ratio. 
(a)    Liquidity shall at all times be greater than $75,000,000;provided that it shall not be a breach of this covenant if, for each periodcommencing with the calendar month during which Liquidity was not greater than$75,000,000 and ending at the end of the calendar month during which Liquidityhas been greater than $75,000,000 for that calendar month and the threeimmediately preceding calendar months, the ratio of Income Available for FixedCharges to Consolidated Fixed Charges be, at all times during each such period,greater than 1.00 to 1.00; provided further, that for purposes of calculatingthe Parent's compliance with this Subsection 6.22, Consolidated Fixed Chargesand Income Available for Fixed Charges shall be calculated on a cumulative,monthly basis during each such period for up to 12 months, until such periodends. 

(b)   No proceeds of any Loan shall be used to pay any principalamount of the 1992 Notes or 1995 Notes, unless the Parent first demonstrates tothe Administrative Agent's satisfaction that, after giving effect to suchpayment, Liquidity will be greater than or equal to $100,000,000. 

SECTION 6.23.                    Limitation on Capital Expenditures.

Capital Expenditures for eachFiscal Year shall not exceed the maximum levels as set forth below oppositesuch Fiscal Year:

Fiscal Year Ended:MaximumLevel

            December 31, 2001                                         $205,000,000

            December 31, 2002                                         $255,000,000

            December 31, 2003                                         $305,000,000

 
SECTION 6.24.                    Permitted Debt(a)    .
The Parent will not, nor will it permit any Subsidiary to,create, assume, issue, or incur any Debt other than (i) Debt existing on thedate hereof and listed on Schedule 6.24; (ii) Debt under this Agreementor the other Loan Documents; (iii) Debt incurred by an Aircraft FinancingSubsidiary in connection with an Excluded Aircraft Financing; (iv) Debtincurred by a Domestic Subsidiary and arising from any Swap Agreement relatingto an Excluded Aircraft Financing; (v) Debt secured by Purchase Money Liens;and (vi) other Debt in an aggregate principal amount not to exceed $1,000,000at any time.
SECTION 6.25.                    Limitation on Issuance and Sale of Capital Stock andRedeemable Preferred Stock of Subsidiaries
.  

The Parent shall not (a) permit any Subsidiary to issue orsell any of its Capital Stock or Redeemable Preferred Stock to any Person otherthan to the Parent or a Guarantor; (b) permit any Person other than the Parentor Wholly Owned Subsidiaries to own any Capital Stock or Redeemable PreferredStock of a Subsidiary; (c) sell any of the Capital Stock or RedeemablePreferred Stock of a Subsidiary to any Person other than a Guarantor; or (d)permit any Subsidiary to sell any of the Capital Stock or Redeemable PreferredStock of any other Subsidiary to any Person other than the Parent or aGuarantor.
SECTION 6.26.                    More Restrictive Agreements.
The Parent will not, and will not permit any Subsidiaryto, become a party to any other credit facility or other agreement relating tothe incurrence of Debt exceeding $1,000,000 in the aggregate which:
(a)    with respect to all such facilities and agreements other thanthose entered into in connection with an Excluded Aircraft Financing orPurchase Money Financing, provides for representations, warranties, covenants,Financial Covenants, events of default or other provisions which are morerestrictive against the Parent or the Subsidiaries than the representations,warranties, covenants, Financial Covenants, events of default and otherprovisions contained in this Agreement, or(b)   with respect to all such facilities or agreements, providesfor more restrictive Financial Covenants which are more restrictive against theParent or the Subsidiaries than the Financial Covenants contained in thisAgreement, in either case, without (a) theAdministrative Agent's and the Required Lenders' prior written consent, or (b)if requested by the Administrative Agent and the Required Lenders, executingand delivering an amendment to this Agreement and, if necessary, to the otherLoan Documents, in order to provide the same more restrictive representations,warranties, covenants, Financial Covenants, or events of default and otherprovisions against the Parent or the Subsidiaries in favor of theAdministrative Agent and the Lenders, as may be requested.
SECTION 6.27.                    New Subsidiaries. 
(a)    Within 20 days of the creation or acquisition of any DomesticSubsidiary which was not a Subsidiary on the Closing Date and which does notconstitute a Receivables Subsidiary or an Aircraft Financing Subsidiary, theParent shall cause such Subsidiary to execute and deliver to the AdministrativeAgent a Subsidiary Guaranty, and, to the extent the Administrative Agentdetermines that such Subsidiary has right and title to any assets which wouldconstitute Collateral under any other Collateral Documents then in effect(other than Collateral Documents relating solely to the Real Properties),deliver to the Collateral Agent a Security Agreement, an Aircraft ChattelMortgage, and Collateral Assignments of Material Contracts as may be requiredby the Administrative Agent.  Inaddition, the Parent shall cause, or shall cause such Domestic Subsidiary to cause,to be delivered to the Administrative Agent and the Collateral Agent within 20days of the creation or acquisition of such Subsidiary a fully executedInformation Disclosure Certificate, all documents required of otherSubsidiaries under Section 4.01(f), each fully executed or certified asrequired by the Administrative Agent and the Collateral Agent, an opinion ofcounsel in form satisfactory to the Administrative Agent and the CollateralAgent with respect to such Subsidiary Guaranty and applicable CollateralDocuments to be delivered pursuant to this Section 6.27, and a joinderagreement, in form satisfactory to the Administrative Agent and fully executedby such Subsidiary,  whereby suchSubsidiary becomes a party to the Contribution Agreement as a ContributingParty. 

(b)   Within 20 days of the creation of any Receivables Subsidiaryor any Aircraft Financing Subsidiary, the Parent shall cause (i) to the extentrequested by the Administrative Agent, all of the capital stock, membershipinterests, or other units of equity or ownership in such Receivables Subsidiaryor Aircraft Financing Subsidiary owned by the Parent or any Domestic Subsidiaryto be pledged to the Collateral Agent as Collateral pursuant to a PledgeAgreement, along with an opinion of counsel regarding to such Pledge Agreement,and (ii) such Receivables Subsidiary or Aircraft Financing Subsidiary toexecute and deliver an Information Disclosure Certificate and all documentsrequired of other Subsidiaries under Section 4.01(f), each fully executed orcertified as required by the Administrative Agent. 

SECTION 6.28.                    Location of Deposit Accounts.

Without the Administrative Agent's prior written consent,the Parent shall not, and shall not permit any Subsidiary to, keep asubstantial portion of their cash deposits in accounts which are notestablished or maintained with the Lenders or their Affiliates.
ARTICLE7     DEFAULTSSECTION 7.01.                    Events of Default
.  

If one or more of the following events ("Events ofDefault") shall have occurred and be continuing:
(a)    any Borrower shall fail to pay when due any principal of anyLoan or any Reimbursement Obligations with respect to any Letter of Credit, orshall fail to pay any interest on any Loan within 5 Domestic Business Daysafter such interest shall become due, or shall fail to pay any fee or otherObligations within 5 Domestic Business Days after such fee or other Obligationbecomes due; or 
(b)   the Parent or any Borrower shall fail to observe or performany covenant contained in Sections 6.01(g), 6.02(a)(ii), 6.02(b), 6.03 through6.06, inclusive, 6.08, 6.15 through 6.25, inclusive, and 6.27; or 

(c)    the Parent or any Subsidiary shall fail to observe or performany covenant or agreement contained or incorporated by reference into thisAgreement (other than those covered by paragraph (a) or (b) above) and suchfailure shall not have been cured within 30 days after the earlier to occur of(i) written notice thereof has been given to the Borrowers by theAdministrative Agent or (ii) the Parent or either of the Borrowers otherwisebecomes aware of any such failure; or 

(d)   the Parent or any Subsidiary shall fail to observe or performany covenant or agreement contained or incorporated by reference into any LoanDocument other than this Agreement and such failure shall not have been curedwithin any grace or cure period, if any, granted for such failure by theexpress terms of such other Loan Document; or 

(e)    any representation, warranty, certification or statement madeby the Parent or Subsidiary in Article 5 of this Agreement or in anycertificate, financial statement or other document delivered pursuant to thisAgreement or any other Loan Document shall prove to have been incorrect ormisleading in any material respect when made (or deemed made); or 

(f)     any Borrower shall fail to make any payment in respect of Debtin an aggregate amount exceeding $5,000,000 outstanding (other than the Notes)or under any document or agreement pertaining to any Letter of Credit when dueor within any applicable grace period; or 

(g)    any event or condition shall occur which results in theacceleration of the maturity of Debt outstanding of the Parent or anySubsidiary in an aggregate principal amount of $5,000,000 or more (including,without limitation, any required mandatory prepayment or "put" of such Debt tothe Parent or any Subsidiary) or enables (or, with the giving of notice orlapse of time or both, would enable) the holders of such Debt or commitment orany Person acting on such holders' behalf to accelerate the maturity thereof orterminate any such commitment prior to its normal expiration (including,without limitation, any required mandatory prepayment or "put" of such Debt tothe Parent or any Subsidiary); or 

(h)    the Parent or any Subsidiary shall commence a voluntary caseor other proceeding seeking liquidation, reorganization or other relief withrespect to itself or its debts under the Bankruptcy Code or any otherbankruptcy, insolvency or other similar law now or hereafter in effect orseeking the appointment of a trustee, receiver, liquidator, custodian or othersimilar official of it or any substantial part of its property, or shallconsent to any such relief or to the appointment of or taking possession by anysuch official in an involuntary case or other proceeding commenced against it,or shall make a general assignment for the benefit of creditors, or shall failgenerally, or shall admit in writing its inability, to pay its debts as theybecome due, or shall take any corporate action to authorize any of theforegoing; or 

(i)      an involuntary case or other proceeding shall be  commenced against the Parent or anySubsidiary seeking liquidation, reorganization or other relief with respect toit or its debts under any bankruptcy, insolvency or other similar law now orhereafter in effect or seeking the appointment of a trustee, receiver, liquidator,custodian or other similar official of it or any substantial part of itsproperty, and such involuntary case or other proceeding shall remainundismissed and unstayed for a period of 60 days; or an order for relief shallbe entered against the Parent or any Subsidiary under the federal bankruptcylaws as now or hereafter in effect; or 

(j)     the Parent, any Subsidiary, or any member of the ControlledGroup shall fail to pay when due any material amount which it shall have becomeliable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice ofintent to terminate a Plan or Plans shall be filed under Title IV of ERISA bythe Parent or any Subsidiary, any member of the Controlled Group, any planadministrator or any combination of the foregoing and the same could reasonablybe expected to have or cause a Material Adverse Effect; or the PBGC shallinstitute proceedings under Title IV of ERISA to terminate or to cause atrustee to be appointed to administer any such Plan or Plans or a proceedingshall be instituted by a fiduciary of any such Plan or Plans to enforce Section515 or 4219(c)(5) of ERISA and such proceeding shall not have been dismissedwithin 30 days thereafter; or a condition shall exist by reason of which thePBGC would be entitled to obtain a decree adjudicating that any such Plan orPlans must be terminated and the same could reasonably be expected to have orcause a Material Adverse Effect; or 

(k)   (i) one or more judgments or orders of any court or otherjudicial body for the payment of money in an aggregate amount in excess of$10,000,000 (in excess of amounts covered by insurance) shall be rendered afterthe Closing Date against the Parent or any Subsidiary and such judgment ororder shall either continue unsatisfied and unstayed for a period of 30 days orgive rise to a Lien on any Collateral at any time; or (ii) a warrant or writ ofattachment or execution or similar process shall be issued against any propertyof the Parent or any Subsidiary which exceeds, individually or together with allother such warrants, writs and processes since the Closing Date, $10,000,000(in excess of amounts covered by insurance) and such warrant, writ or processshall not be discharged, vacated, stayed or bonded for a period of 30 days;provided, however, that in the event a bond has been issued in favor of theclaimant or other Person obtaining such attachment or writ, the issuer of suchbond shall execute a waiver or subordination agreement in form and substancesatisfactory to the Administrative Agent pursuant to which the issuer of suchbond subordinates its right of reimbursement, contribution or subrogation tothe Obligations and waives or subordinates any Lien it may have on the assetsof the Parent or any Subsidiary; or 

(l)      a federal tax lien shall be filed against the Parent or anySubsidiary under Section 6322 of the Code or a Lien of the PBGC shall be filedagainst the Parent or any Subsidiary under Section 4068 of ERISA and in eithercase such lien shall remain undischarged for a period of 25 days after the dateof filing; or 

(m)  (i)  any Person or twoor more Persons acting in concert shall have acquired beneficial ownership(within the meaning of Rule 13d-3 of the Securities and Exchange Commissionunder the Securities Exchange Act of 1934) of 20% or more of the outstandingshares of the voting stock of the Parent; or (ii) as of any date a majority ofthe Board of Directors of the Parent consists of individuals who were noteither (A) directors of the Parent as of the corresponding date of the previousyear, (B) selected or nominated to become directors by the Board of Directorsof the Parent of which a majority consisted of individuals described in clause(A), or (C) selected or nominated to become directors by the Board of Directorsof the Parent of which a majority consisted of individuals described in clause(A) and individuals described in clause (B); or (iii) the Parent at any timefails to own 100% of the capital stock of each of the Borrowers; or 

(n)    if, on any day, the Parent or any Borrower could not truthfullymake the representations and warranties contained in Section 5.17; or 

(o)   there shall have occurred material uninsured damage to, orloss, theft, destruction, or Condemnation of, any material part of theCollateral; or 

(p)   the occurrence of any event, act, occurrence, or conditionwhich the Required Lenders determine either does or has a reasonableprobability of causing a Material Adverse Effect; or 

(q)   the termination, expiration, or cessation, for any reason,whether in accordance with its terms or otherwise, of the Current ReceivablesProgram, unless any replacement Receivables Program (or an alternativefinancing program or facility) satisfactory to the Administrative Agent shallbe in effect prior to, or contemporaneously with the expiration or terminationof the Current Receivables Program; then, and in every such event, theAdministrative Agent and, to the extent applicable, the Collateral Agent will,if requested by the Required Lenders: (i) by notice to the Borrowers terminatethe Commitments, Wachovia's obligations to make Swing Loans, and the Issuers'obligations to issue Letters of Credit, and the Commitments and all suchobligations shall thereupon terminate; (ii) by notice to the Borrowers declarethe Notes (together with accrued interest thereon), and all other amountspayable hereunder and under the other Loan Documents, to be, and the same shallthereupon become immediately due and payable without presentment, demand,protest or other notice of any kind, all of which are hereby waived by the Borrowerstogether with interest at the Default Rate accruing on the principal amountthereof from and after the date of such Event of Default; provided thatif any Event of Default specified in paragraph (h) or (i) above occurs withrespect to the Parent or the Borrowers, without any notice to the Borrowers orany other act by the Administrative Agent or the Lenders, the Commitments shallthereupon terminate and the Notes (together with accrued interest thereon) andall other amounts payable hereunder and under the other Loan Documents shallautomatically and without notice become immediately due and payable withoutpresentment, demand, protest or other notice of any kind, all of which arehereby waived by the Borrowers together with interest thereon at the DefaultRate accruing on the principal amount thereof from and after the date of suchEvent of Default; or (iii) exercise any rights, powers or remedies under thisAgreement and the other Loan Documents.In addition, upon the occurrence of an Event of Default, to the extentof any existing Letter of Credit Obligations, the Administrative Agent mayimmediately advance the amount thereof as a Base Rate Loan and set aside theamounts so advanced as a collateral reserve for payment of the ReimbursementObligations relating to Letters of Credit which are subsequently funded.  After all Letters of Credit have beencancelled and all Reimbursement Obligations have been satisfied, and theIssuers have been reimbursed all amounts funded by them with respect thereto,any balance remaining in said collateral reserve may be applied to otheramounts owed by the Borrowers hereunder, and, if none, shall be remitted to therelevant Borrower. Notwithstanding the foregoing, the Administrative Agentshall have available to it all other remedies at law or equity, and shallexercise any one or all of them at the request of the Required Lenders.  In no event may any Lender or Lendersexercise any rights, remedies or powers with respect to the Obligations, thisCredit Agreement and the other Loan Documents without the consent of theAdministrative Agent and the Required Lenders.
SECTION 7.02.                    Notice of Default
.  

The Administrative Agent shall give notice to theBorrowers of any Default promptly upon being requested to do so by any Lenderand shall thereupon notify all the Lenders thereof. 
SECTION 7.03.                    Remedies with Respect to Collateral. 
(a)    Upon the occurrence of an Event of Default, the CollateralAgent or any representative of the Collateral Agent shall have all the rightsand remedies of a secured party under the UCC in effect on the date thereof(regardless of whether the same has been enacted in the jurisdiction where therights or remedies are asserted) and shall have all other rights and remediesafforded the Collateral Agent in the Collateral Documents. 

ARTICLE 8     THE ADMINISTRATIVEAGENT AND THE LENDERS 

SECTION 8.01.                    Appointment; Powers and Immunities. 

(a)    Each Lender hereby irrevocably appoints and authorizes theAdministrative Agent (including its successors by merger) to act as its agenthereunder and under the other Loan Documents with such powers as arespecifically delegated to the Administrative Agent by the terms hereof andthereof, together with such other powers as are reasonably incidentalthereto.  The Administrative Agent: (i)shall have no duties or responsibilities except as expressly set forth in thisAgreement and the other Loan Documents, and shall not by reason of thisAgreement or any other Loan Document be a trustee for any Lender; (ii) shallnot be responsible to the Lenders for any recitals, statements, representationsor warranties contained in this Agreement or any other Loan Document, or in anycertificate or other document referred to or provided for in, or received byany Lender under this Agreement or any other Loan Document, or for thevalidity, effectiveness, genuineness, enforceability or sufficiency of thisAgreement or any other Loan Document or any other document referred to orprovided for herein or therein or for any failure by any Borrower to performany of its obligations hereunder or thereunder; (iii) shall not be required toinitiate or conduct any litigation or collection proceedings hereunder or underany other Loan Document except to the extent requested by the Required Lenders,and then only on terms and conditions satisfactory to the Administrative Agent;and (iv) shall not be responsible for any action taken or omitted to be takenby it hereunder or under any other Loan Document or any other document orinstrument referred to or provided for herein or therein or in connectionherewith or therewith, except for its own gross negligence or willfulmisconduct.  The Administrative Agentmay employ agents and attorneys-in-fact and shall not be responsible for thenegligence or misconduct of any such agents or attorneys-in-fact selected by itwith reasonable care.  The provisions ofthis Article 8 are solely for the benefit of the Administrative Agent and theLenders, and no Borrower shall have any rights as a third party beneficiary ofany of the provisions hereof.  Inperforming its functions and duties under this Agreement and under the otherLoan Documents, the Administrative Agent shall act solely as agent of theLenders and does not assume and shall not be deemed to have assumed anyobligation towards or relationship of agency or trust with or for theBorrowers.  The duties of theAdministrative Agent shall be ministerial and administrative in nature, and theAdministrative Agent shall not have by reason of this Agreement or any otherLoan Document a fiduciary relationship in respect of any Lender. 

(b)   The Administrative Agent shall have the sole and exclusiveright and authority to (i) act as the disbursing and collecting agent for theLenders with respect to all payments and collections arising in connection withthis Agreement and the other Loan Documents; (ii) execute and deliver each LoanDocument (other than this Credit Agreement) on behalf of the Lenders and acceptdelivery of each such agreement delivered by any Borrower or any otherPerson;(iii) act as collateral agent for the Lenders for purposes of theperfection of all security interests and Liens created by this Agreement or theCollateral Documents with respect to all material items of the Collateral and,subject to the direction of the Required Lenders, for all other purposes statedtherein; (iv) subject to the direction of the Required Lenders, manage,supervise or otherwise deal with the Collateral; and (v) except as may beotherwise specifically restricted by the terms of this Agreement and subject tothe direction of the Required Lenders, exercise all remedies given to theAdministrative Agent or Lenders with respect to any of the Collateral under theLoan Documents relating thereto, or under applicable law or otherwise.  As to any matters not expressly provided forotherwise by this Agreement or any other Loan Document, the AdministrativeAgent shall in all cases be fully protected in acting, or in refraining fromacting, hereunder and thereunder in accordance with instructions signed by theRequired Lenders, and such instructions of the Required Lenders to theAdministrative Agent in any action taken or failure to act pursuant theretoshall be binding on all of the Lenders. 

SECTION 8.02.                    Reliance by Administrative Agent

.  

The Administrative Agent shall be entitled to rely uponany certification, notice or other communication (including any thereof bytelephone, telecopier, telegram or cable) believed by it to be genuine andcorrect and to have been signed or sent by or on behalf of the proper Person orPersons, and upon advice and statements of legal counsel, independentaccountants or other experts selected by the Administrative Agent.  As to any matters not expressly provided forby this Agreement or any other Loan Document, the Administrative Agent shall inall cases be fully protected in acting, or in refraining from acting, hereunderand thereunder in accordance with instructions signed by the Required Lenders,and such instructions of the Required Lenders in any action taken or failure toact pursuant thereto shall be binding on all of the Lenders.
SECTION 8.03.                    Defaults
.

The Administrative Agent shall not be deemed to haveknowledge of the occurrence of a Default or an Event of Default (other than thenonpayment of principal of or interest on the Loans) unless theAdministrative Agent has received notice from a Lender or the Borrowerspecifying such Default or Event of Default and stating that such notice is a"Notice of Default."  In the event thatthe Administrative Agent receives such a notice of the occurrence of a Defaultor an Event of Default, the Administrative Agent shall give prompt noticethereof to the Lenders.  TheAdministrative Agent shall give each Lender prompt notice of each nonpayment ofprincipal of or interest on the Loans whether or not it has received any noticeof the occurrence of such nonpayment.The Administrative Agent shall (subject to Section 10.06 take suchaction hereunder with respect to such Default or Event of Default as shall bedirected by the Required Lenders, provided that, unless and until theAdministrative Agent shall have received such directions, the AdministrativeAgent may (but shall not be obligated to) take such action, or refrainfrom taking such action, with respect to such Default or Event of Default as itshall deem advisable in the best interests of the Lenders. 
SECTION 8.04.                    Rights of Administrative Agent and its Affiliates as aLender
.  

With respect to the Loans made by the Administrative Agentand any Affiliate of the Administrative Agent, the Administrative Agent, in itscapacity as a Lender hereunder, and any Affiliate of the Administrative Agentor such Affiliate, in its capacity as a Lender hereunder, shall have the samerights and powers hereunder as any other Lender and may exercise the same asthough the Administrative Agent were not acting as the Administrative Agent,and the term "Lender" or "Lenders" shall, unless the context otherwiseindicates, include the Administrative Agent in its individual capacity and anyAffiliate of the Administrative Agent in its individual capacity.  The Administrative Agent and any Affiliateof the Administrative Agent may (without having to account therefor to anyLender) accept deposits from, lend money to and generally engage in anykind of banking, trust or other business with the Parent and any of theSubsidiaries (and any Affiliate of the Parent or any Subsidiary) as if theAdministrative Agent were not acting as the Administrative Agent, and theAdministrative Agent and any Affiliate of the Administrative Agent may acceptfees and other consideration from the Parent or any Subsidiary (in addition toany agency fees and arrangement fees heretofore agreed to between the Borrowerand the Administrative Agent) for services in connection with thisAgreement or any other Loan Document or otherwise without having to account forthe same to the Lenders, and the Administrative Agent shall not be subject toany liability by reason of its acting or refraining to act pursuant to anyrequest of the Required Lenders except as a result of its own willfulmisconduct or gross negligence.
SECTION 8.05.                    Indemnification
.  

Each Lender severally agrees to indemnify theAdministrative Agent, to the extent the Administrative Agent shall not havebeen reimbursed by the Borrower, ratably in accordance with its Commitment, forany and all liabilities, obligations, losses, damages, penalties, actions,judgments, suits, costs, expenses (including, without limitation, counsel feesand disbursements) or disbursements of any kind and nature whatsoeverwhich may be imposed on, incurred by or asserted against the AdministrativeAgent in any way relating to or arising out of this Agreement or any other LoanDocument or any other documents contemplated by or referred to herein ortherein or the transactions contemplated hereby or thereby (excluding, unlessan Event of Default has occurred and is continuing, the normal administrativecosts and expenses incident to the performance of its agency dutieshereunder) or the enforcement of any of the terms hereof or thereof or anysuch other documents; provided that no Lender shall be liable for any ofthe foregoing to the extent they arise from the gross negligence or willfulmisconduct of the Administrative Agent; and provided further that no DesignatedLender shall be liable for any payment under this Section 8.05 so long as,and to the extent that, its Designating Lender makes such payments.  If any indemnity furnished to theAdministrative Agent for any purpose shall, in the opinion of theAdministrative Agent, be insufficient or become impaired, the AdministrativeAgent may call for additional indemnity and cease, or not commence, to do theacts indemnified against until such additional indemnity is furnished.  
SECTION 8.06.                    Consequential Damages.
THE ADMINISTRATIVE AGENT SHALL NOT BE RESPONSIBLE ORLIABLE TO ANY LENDER, THE BORROWER OR ANY OTHER PERSON OR ENTITY FOR ANYPUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULTOF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY OF THE TRANSACTIONSCONTEMPLATED HEREBY OR THEREBY.
SECTION 8.07.                    Payee of Note Treated as Owner
.  

The Administrative Agent may deem and treat each Person inwhose name a Loan is registered as the owner thereof for all purposes hereofunless and until a written notice of the assignment or transfer thereof shallhave been filed with the Administrative Agent and the provisions ofSection 10.08(c) have been satisfied.  Any requests, authority or consent of any Person who at the timeof making such request or giving such authority or consent is the holder of anyNote shall be conclusive and binding on any subsequent holder, transferee orassignee of that Note or of any Note or Notes issued in exchange therefor orreplacement thereof.
SECTION 8.08.                    Nonreliance on Administrative Agent and Other Lenders
.

Each Lender agrees that it has, independently and withoutreliance on the Administrative Agent or any other Lender, and based on suchdocuments and information as it has deemed appropriate, made its own creditanalysis of the Borrowers and decision to enter into this Agreement and that itwill, independently and without reliance upon the Administrative Agent or anyother Lender, and based on such documents and information as it shall deemappropriate at the time, continue to make its own analysis and decisions intaking or not taking action under this Agreement or any of the other Loan Documents.  The Administrative Agent shall not berequired to keep itself (or any Lender) informed as to the performance orobservance by the Parent or any Subsidiary of this Agreement or any of theother Loan Documents or any other document referred to or provided for hereinor therein or to inspect the properties or books of the Parent, any Subsidiary,or any other Person.  Except fornotices, reports and other documents and information expressly required to befurnished to the Lenders by the Administrative Agent hereunder or under theother Loan Documents, the Administrative Agent shall not have any duty orresponsibility to provide any Lender with any credit or other informationconcerning the affairs, financial condition or business of the Parent, any Subsidiary,or any other Person (or any of their Affiliates) which may come into thepossession of the Administrative Agent.
SECTION 8.09.                    Failure to Act
.  

Except for action expressly required of the AdministrativeAgent hereunder or under the other Loan Documents, the Administrative Agentshall in all cases be fully justified in failing or refusing to act hereunderand thereunder unless it shall receive further assurances to its satisfactionby the Lenders of their indemnification obligations under Section 8.05 againstany and all liability and expense which may be incurred by the AdministrativeAgent by reason of taking, continuing to take, or failing to take any suchaction.
SECTION 8.10.                    Resignation or Removal of Administrative Agent
.  

Subject to the appointment and acceptance of a successorAdministrative Agent as provided below, the Administrative Agent may resign atany time by giving notice thereof to the Lenders and the Borrowers and theAdministrative Agent may be removed at any time with or without cause by theRequired Lenders.  Upon any suchresignation or removal, the Required Lenders shall have the right to appoint asuccessor Administrative Agent.  If nosuccessor Administrative Agent shall have been so appointed by the RequiredLenders and shall have accepted such appointment within 30 days after theretiring Administrative Agent's notice of resignation or the Required Lenders'removal of the retiring Administrative Agent, then the retiring AdministrativeAgent may, on behalf of the Lenders, appoint a successor AdministrativeAgent.  Any successor AdministrativeAgent shall be a lender which has a combined capital and surplus of at least$500,000,000.  Upon the acceptance ofany appointment as Administrative Agent hereunder by a successor AdministrativeAgent, such successor Administrative Agent shall thereupon succeed to andbecome vested with all the rights, powers, privileges and duties of theretiring Administrative Agent, and the retiring Administrative Agent shall bedischarged from its duties and obligations hereunder.  After any retiring Administrative Agent's resignation or removalhereunder as Administrative Agent, the provisions of this Article VIII shallcontinue in effect for its benefit in respect of any actions taken or omittedto be taken by it while it was acting as the Administrative Agent hereunder.
SECTION 8.11.                    Joinder of Lenders
.  

The rights, remedies, powers and privileges conferred uponthe Administrative Agent hereunder and under the other Loan Documents may beexercised by the Administrative Agent without the necessity of the joinder ofany other parties unless otherwise required by applicable law.  
SECTION 8.12.                    Agreements Regarding Collateral
.  

The proceeds of any Collateral shall be divided among theNoteholders and the Trustee, on the one hand, and the Lenders and AdministrativeAgent, on the other hand, in accordance with the terms of the CollateralDocuments.  Each Lender shall have aratable interest, in accordance with the ratio by which the amount of Debtowing to such Lender bears to the aggregate amount of the Debt of all Lenders,in such proceeds paid to the Administrative Agent under the CollateralDocuments (subject to the Administrative Agent's recoupment of fees, expenses,and costs as provided in this Agreement), and, subject to the equal and ratableLien and security interest of the Noteholders as Secured Creditors, in thesecurity interests and Liens in and to the Collateral and any other assetsgranted and assigned to the Collateral Agent or Administrative Agent under theLoan Documents.  The Lenders herebyirrevocably authorize the Collateral Agent, at its option and in itsdiscretion, to release any Lien upon any Collateral (a) as authorized by thisAgreement or any of the other Loan Documents, (b) upon the termination of theCommitments and payment or satisfaction of all of the Obligations, or (c)constituting equipment sold or disposed of in accordance with the terms of thisAgreement if the Borrowers certify to the Collateral Agent that the dispositionis made in compliance with the terms of this Agreement (and the CollateralAgent may rely conclusively on any such certificate, without furtherinquiry).  Each of the Lenders agreesthat the Collateral Agent may execute and deliver, for itself and on behalf ofthe Lenders, any and all documents necessary to effect the release ortermination of any Lien arising pursuant to the Loan Documents to the extentsuch release or termination is required by law or to the extent this Agreementor any of the other Loan Documents by their express terms allow for the sale,transfer, or disposition of such assets (including, without limitation, any ofthe Collateral) by the Parent and the Subsidiaries; provided that, in all othercases, the Collateral Agent shall not execute any release or termination of anyLien upon any of the Collateral without the prior written authorization of allLenders.  The Collateral Agent shallhave no obligation whatsoever to any of the Lenders to assure that any of theCollateral exists or is owned by the Parent or any Subsidiary or is cared for,protected or insured or has been encumbered, or that the Collateral Agent'sLiens have been properly or sufficiently or lawfully created, perfected,protected or enforced or entitled to any particular priority or to exercise atall or in any manner or under any duty of care, disclosure or fidelity, or tocontinue exercising, any of the rights or powers granted or available to theCollateral Agent pursuant to this Agreement or any of the other Loan Documents,it being understood and agreed that in respect of the Collateral, or any act,omission or event related thereto, the Collateral Agent may act in any mannerit may deem appropriate, in its discretion, given the Collateral Agent's owninterests in the Collateral in its capacity as one of the Lenders.
SECTION 8.13.                    Administrative Agent Field Exams
.  

The Administrative Agent and the Collateral Agent shallpromptly, upon receipt thereof, forward to each Lender copies of the results ofany field examinations by the Administrative Agent or the Collateral Agent withrespect to the Parent or the Subsidiaries.Neither the Administrative Agent nor the Collateral Agent shall have anyliability to any Lender for any errors in or omissions from any fieldexaminations or other examination of the Parent or the Subsidiaries or the Collateral,unless such error or omission was the direct result of the AdministrativeAgent's or Collateral Agent's willful misconduct.
SECTION 8.14.                    Designation of Co-Collateral Agent
.  

It is the purpose of this Agreement that there shall be noviolation of any applicable law denying or restricting the right of financialinstitutions to transact business as an agent in any jurisdiction.  It is recognized that, in case of litigationunder any of the Loan Documents, or in case the Collateral Agent deems that byreason of present or future laws of any jurisdiction the Collateral Agent mightbe prohibited from exercising any of the powers, rights or remedies granted tothe Collateral Agent or the Lenders hereunder or under any of the LoanDocuments or from holding title to or a Lien upon any Collateral or from takingany other action which may be necessary hereunder or under any of the LoanDocuments, the Collateral Agent may appoint an additional Person or Persons asa separate collateral agent or co-collateral agent which is not so prohibitedfrom taking any of such actions or exercising any of such powers, rights orremedies.  If the Collateral Agent shallappoint an additional Person as a separate collateral agent or co-collateralagent as provided above, each and every remedy, power, right, claim, demand orcause of action intended by this Agreement and any of the Loan Documents andevery remedy, power, right, claim, demand or cause of action intended by thisAgreement and any of the Loan Documents to be exercised by or vested in orconveyed to the Collateral Agent with respect thereto shall be exercisable byand vested in such separate collateral agent or co-collateral agent, but onlyto the extent necessary to enable such separate collateral agent orco-collateral agent to exercise such powers, rights and remedies, and everycovenant and obligation necessary to the exercise thereof by such separatecollateral agent or co-collateral agent shall run to and be enforceable by anyof them.  Should any instrument from theLenders be required by the separate collateral agent or co-collateral agent soappointed by the Collateral Agent in order more fully and certainly to vest inand confirm to him or it such rights, powers, duties and obligations, any andall of such instruments shall, on request, be executed, acknowledged anddelivered by the Lenders whether or not a Default or Event of Default thenexists.  In case any separate collateralagent or co-collateral agent, or a successor to either, shall die, becomeincapable of acting, resign or be removed, all the estates, properties, rights,power, duties and obligations of such separate collateral agent orco-collateral agent, so far as permitted by applicable law, shall vest in andbe exercised by the Collateral Agent until the appointment of a new collateralagent or successor to such separate collateral agent or co-collateral agent.
SECTION 8.15.                    Limitation of Certain Agents' Duties.
Notwithstanding the fact that U.S. Bank NationalAssociation and Bank of America, N.A., are listed as Documentation Agent andSyndication Agent (the "Additional Agents"), respectively, on the cover page tothis Agreement, the parties to this Agreement agree that the Additional Agentsshall have no duties, obligations, or liabilities under this Agreement in any capacityexcept as "Lenders."
ARTICLE9     CHANGEIN CIRCUMSTANCES; COMPENSATION 
SECTION 9.01.                    Basis for Determining Interest Rate Inadequate orUnfair

.  

If on or prior to the first day of any Interest Period:
(a)    the Administrative Agent determines that deposits in Dollars(in the applicable amounts) are not being offered in the relevant market forsuch Interest Period, or(b)   the Required Lenders advise the Administrative Agent that theLondon Interbank Offered Rate, as determined by the Administrative Agent willnot adequately and fairly reflect the cost to such Lenders of funding therelevant type of Euro-Dollar Loans for such Interest Period,
the Administrative Agent shallforthwith give notice thereof to the Borrowers and the Lenders, whereupon untilthe Administrative Agent notifies the Borrowers that the circumstances givingrise to such suspension no longer exist, the obligations of the Lenders to makethe type of Euro-Dollar Loans or to permit continuations or conversions intoEuro-Dollar Loans shall be suspended.Unless the Borrowers notify the Administrative Agent at least 2 DomesticBusiness Days before the date of any Borrowing of any Euro-Dollar Loans forwhich a Notice of Borrowing has previously been given, or continuation orconversion into Euro-Dollar Loans for which a Notice of Continuation orConversion has previously been given, that it elects not to borrow or socontinue or convert on such date, such Borrowing shall instead be made as aBase Rate Borrowing or such Euro-Dollar Loan shall be converted to a Base RateLoan.
SECTION 9.02.                    Illegality
.  

If, after the date hereof, the adoption of any applicablelaw, rule or regulation, or any change therein or any existing or future law,rule or regulation, or any change in the interpretation or administrationthereof by any governmental authority, central bank or comparable agencycharged with the interpretation or administration thereof (any such agencybeing referred to as an "Authority" and any such event being referred to as a"Change of Law"), or compliance by any Lender (or its Lending Office) with anyrequest or directive (whether or not having the force of law) of any Authorityshall make it unlawful or impossible for any Lender (or its Lending Office) tomake, maintain or fund its Euro-Dollar Loans or issue Letters of Credit and suchLender shall so notify the Administrative Agent, the Administrative Agent shallforthwith give notice thereof to the other Lenders and the Borrowers, whereuponuntil such Lender notifies the Borrowers and the Administrative Agent that thecircumstances giving rise to such suspension no longer exist, the obligation ofsuch Lender to make Euro-Dollar Loans or issue Letters of Credit shall besuspended.  Before giving any notice tothe Administrative Agent pursuant to this Section, such Lender shall designatea different Lending Office if such designation will avoid the need for givingsuch notice and will not, in the judgment of such Lender, be otherwisedisadvantageous to such Lender.  If suchLender shall determine that it may not lawfully continue to maintain and fundany of its outstanding Euro-Dollar Loans to maturity and or issue Letters ofCredit shall so specify in such notice, the Borrowers shall immediately prepayin full the then outstanding principal amount of each Euro-Dollar Loan of suchLender and pledge to the Administrative Agent cash collateral equal to 110% ofthe outstanding Letter of Credit Obligations, together with accrued interestthereon and any amount due such Lender pursuant to Section 9.05(a).  Concurrently with prepaying each such Euro-DollarLoan the Borrowers shall borrow a Base Rate Loan in an equal principal amountfrom such Lender (on which interest and principal shall be payablecontemporaneously with the related Euro-Dollar Loans of the other Lenders), andsuch Lender shall make such a Base Rate Loan. 
SECTION 9.03.                    Increased Cost and Reduced Return.(a)    If after the date hereof, a Change of Law or compliance by anyLender (or its Lending Office) with any request or directive (whether or nothaving the force of law) of any Authority:
(i)                 shall impose, modify or deem applicable any reserve, specialdeposit or similar requirement (including, without limitation, any suchrequirement imposed by the Board of Governors of the Federal Reserve System,but excluding with respect to any Euro-Dollar Loan any such requirementincluded in an applicable Euro-Dollar Reserve Percentage) against assets of,deposits with or for the account of, or credit or letter of credit extended by,any Lender (or its Lending Office); or

(ii)               shall impose on any Lender (or its Lending Office) or on theUnited States market for certificates of deposit or the London interbank marketany other condition affecting its Euro-Dollar Loans, Letters of Credit, itsNotes or its obligation to make Euro-Dollar Loans;

and the result of any of the foregoing is to increase thecost to such Lender (or its Lending Office) of making or maintaining any Loanor Letter of Credit, or to reduce the amount of any sum received or receivableby such Lender (or its Lending Office) under this Agreement or under its Noteswith respect thereto, by an amount reasonably deemed by such Lender to bematerial, then, within 15 days after demand by such Lender (with a copy to theAdministrative Agent), the Borrowers shall pay to such Lender such additionalamount or amounts as will compensate such Lender for such increased cost orreduction.
(b)   If any Lender shall have determined that after the date hereofthe adoption of any applicable law, rule or regulation regarding capitaladequacy, or any change therein, or any change in the interpretation oradministration thereof, or compliance by any Lender (or its Lending Office)with any request or directive regarding capital adequacy (whether or not havingthe force of law) of any Authority, has or would have the effect of reducing therate of return on such Lender's capital as a consequence of its obligations(whether with respect to Loans or the Letters of Credit) hereunder to a levelbelow that which such Lender could have achieved but for such adoption, changeor compliance (taking into consideration such Lender's policies with respect tocapital adequacy) by an amount reasonably deemed by such Lender to be material,then from time to time, within 15 days after demand by such Lender, theBorrowers shall pay to such Lender such additional amount or amounts as willcompensate such Lender for such reduction.(c)    Each Lender will promptly notify the Borrowers and theAdministrative Agent of any event of which it has knowledge, occurring afterthe date hereof, which will entitle such Lender to compensation pursuant tothis Section and will designate a different Lending Office if such designationwill avoid the need for, or reduce the amount of, such compensation and willnot, in the judgment of such Lender, be otherwise disadvantageous to suchLender.  A certificate of any Lenderclaiming compensation under this Section and setting forth the additionalamount or amounts to be paid to it hereunder shall be conclusive in the absenceof manifest error.  In determining suchamount, such Lender may use any reasonable averaging and attribution methods.(d)   The provisions of this Section 9.03 shall be applicable withrespect to any Participant, Assignee or other Transferee, and any calculationsrequired by such provisions shall be made based upon the circumstances of suchParticipant, Assignee or other Transferee. 
SECTION 9.04.                    Base Rate Loans or Other Euro-Dollar Loans Substitutedfor Affected Euro-Dollar Loans

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If (i) the obligation of any Lender to make or maintainany type of Euro-Dollar Loans has been suspended pursuant to Section 9.02 or(ii) any Lender has demanded compensation under Section 9.03, and the Borrowersshall, by at least 5 Euro-Dollar Business Days' prior notice to such Lenderthrough the Administrative Agent, have elected that the provisions of thisSection shall apply to such Lender, then, unless and until such Lender notifiesthe Borrowers that the circumstances giving rise to such suspension or demandfor compensation no longer apply:
(a)    all Loans which would otherwise be made by such Lender as, orpermitted to be continued as or converted into, Euro-Dollar Loans shall beinstead made or converted into Base Rate Loans, and(b)   after each of its Euro-Dollar Loans has been repaid, allpayments of principal which would otherwise be applied to repay such Euro-DollarLoans shall be applied to repay its Base Rate Loans instead. 
SECTION 9.05.                    Compensation

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Upon the request of any Lender, delivered to the Borrowersand the Administrative Agent, the Borrowers shall pay to such Lender suchamount or amounts as shall compensate such Lender for any loss, cost or expenseincurred by such Lender as a result of:
(a)    any payment or prepayment (pursuant to Section 2.11, 2.12,2.13, 7.01, 9.02 or otherwise) of a Euro-Dollar Loan on a date other than thelast day of an Interest Period for such Loan; or(b)   if the Lenders permit prepayment of a Euro-Dollar Loan on anyday other than the last day of the Interest Period with respect thereto, anyfailure by the Borrowers to prepay such Euro-Dollar Loan on the date for suchprepayment specified in the relevant notice of prepayment; or(c)    any failure by the Borrowers to borrow a Euro-Dollar Loan onthe date for the Euro-Dollar Borrowing of which such Euro-Dollar Loan is a partspecified in the applicable Notice of Borrowing delivered pursuant to Section2.02 or Notice of Continuation or Conversion delivered pursuant to Section2.04;
such compensation to include, without limitation, an amountequal to the excess, if any, of (i) the amount of interest which would haveaccrued on the amount so paid or prepaid or not prepaid or borrowed for theperiod from the date of such payment, prepayment or failure to prepay or borrowto the last day of the then current Interest Period for such Euro-Dollar Loan(or, in the case of a failure to prepay or borrow, the Interest Period for suchEuro-Dollar Loan which would have commenced on the date of such failure toprepay or borrow) at the applicable rate of interest for such Euro-Dollar Loanprovided for herein over (ii) the amount of interest (as reasonably determined bysuch Lender) such Lender would have paid on deposits in Dollars of comparableamounts having terms comparable to such period placed with it by leadinglenders in the London interbank market (if such Euro-Dollar Loan is aEuro-Dollar Loan).
SECTION 9.06.                    Replacementof Lenders.
If any Lender (a "Notice Lender") makes demand foramounts owed under Section 9.03 (other than due to any change in theEurodollar Reserve Percentage), or gives notice under Section 9.02 that itcan no longer participate in Euro-Dollar Loans, then in each case the Borrowersshall have the right, if no Default or Event of Default exists, and subject tothe terms and conditions set forth in Section 10.08(c), to designate anassignee (a "Replacement Lender") to purchase the Notice Lender's share ofoutstanding Base Rate Loans, Euro-Dollar Loans and all other obligationshereunder and to assume the Notice Lender's obligations to the Borrowers underthis Agreement; provided, that, any Replacement Lender must bereasonably acceptable to the Administrative Agent and the Required Lenders(and, in any event, may not be an Affiliate of the Parent or anySubsidiary).  Subject to the foregoing,the Notice Lender agrees to assign without recourse to the Replacement Lenderits share of outstanding Base Rate Loans and Euro-Dollar Loans and itsCommitment, and to delegate to the Replacement Lender its obligations to theBorrowers under this Agreement and the other Loan Documents and its futureobligations to the Administrative Agent under this Agreement and the other LoanDocuments.  Upon such sale anddelegation by the Notice Lender and the purchase and assumption by theReplacement Lender, and compliance with the provisions ofSection 10.08(c), the Notice Lender shall cease to be a "Lender" hereunderand shall thereafter have no rights to any of the Collateral or the proceedsthereof, and the Replacement Lender shall become a "Lender" under thisAgreement and the other Loan Documents and shall have the same rights under theLoan Documents with respect to the Collateral as the Notice Lender had prior tosuch assignment and assumption; provided, however, that anyNotice Lender shall continue to be entitled to the indemnification provisionscontained elsewhere herein.
ARTICLE10   MISCELLANEOUS 
SECTION 10.01.                Notices

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All notices, requests and other communications to anyparty hereunder shall be in writing (including telecopier or similar writing)and shall be given to such party at its address or telecopier number set forthon the signature pages hereof or such other address or telecopier number assuch party may hereafter specify for the purpose by notice to each otherparty.  Each such notice, request orother communication shall be effective (a) if given by telecopier, when suchtelecopy is transmitted to the telecopier number specified in this Section andthe confirmation is received, (b) if given by mail, 72 hours after suchcommunication is deposited in the mail with first class postage prepaid,addressed as aforesaid or (c) if given by any other means, when delivered atthe address specified in this Section; provided that notices to theAdministrative Agent under Article 2 or Article 9 shall not be effective untilreceived.
SECTION 10.02.                No Waivers
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The failure of the Parent or a Borrower satisfy, or thewaiver by the Administrative Agent and the Lenders of, any condition set forthin Article 3 shall not constitute a waiver of any such condition with respectto any subsequent advance of a Loan, unless such waiver is expressly agreed toin writing as required by Section 10.06.No failure or delay by the Administrative Agent or any Lender inexercising any right, power or privilege hereunder or under any Note or otherLoan Document shall operate as a waiver thereof nor shall any single or partialexercise thereof preclude any other or further exercise thereof or the exerciseof any other right, power or privilege.The rights and remedies herein provided shall be cumulative and notexclusive of any rights or remedies provided by law.
SECTION 10.03.                Expenses; Documentary Taxes
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The Borrowers shall pay (a) all out-of-pocket expenses(including, without limitation, all reasonable attorney and paralegal fees andexpenses of the Administrative Agent, recording costs, recording or intangibletaxes and title insurance, if any) of the Administrative Agent incurred in connectionwith the of this Agreement and the other Loan Documents, including, withoutlimitation, (i) all costs, fees and taxes pertaining to the obtaining,preparation or filing of all equipment appraisals, Lien searches, the filing offinancing statements, the Mortgages, or any other similar document or filing(including, without limitation, any release thereof), the Real PropertyDocumentation, (ii) all fees and disbursements of special counsel for theLenders and the Administrative Agent, (iii) all costs and fees incurred inconnection with the preparation, negotiation, administration and execution anddelivery of this Agreement and the other Loan Documents, and any waiver orconsent hereunder or thereunder or any amendment hereof or thereof or anyDefault or alleged Default hereunder or thereunder, (iv) sums paid or incurredto pay for any amount or to take any action required of the Parent or any otherSubsidiary hereunder or under this Agreement that any such Person fails to payor take; (v) costs and expenses of preserving and protecting the Collateral;and (b) during the existence of an Event of Default, costs and expenses(including reasonable attorney and paralegal fees and expenses) paid orincurred to obtain payment of the Obligations, enforce the Lien in theCollateral, sell or otherwise realize upon the Collateral, and otherwiseenforce the provisions hereof or of any Loan Document or to defend any claimmade or threatened against the Administrative Agent, the Collateral Agent, orany of the Lenders arising out of the transactions contemplated hereby(including, without limitation, preparations for and consultations concerningany such matters).  The foregoing shallnot be construed to limit any other provisions hereof, or of any Loan Documentregarding costs and expenses to be paid by the Borrowers.  In the event any Borrower becomes a debtorunder the Bankruptcy Code, the Administrative Agent's and each Lender's securedclaim in such case shall include interest on the Obligations and all fees,costs and charges provided for herein (including, without limitation,reasonable attorneys' fees actually incurred), all to the extent allowed by theBankruptcy Code. The Borrowers shall indemnify the Administrative Agent andeach Lender against any transfer taxes, documentary taxes, assessments orcharges made by any Authority by reason of the execution and delivery of thisAgreement or the other Loan Documents.
SECTION 10.04.                Indemnification
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The Borrowers shall indemnify the Administrative Agent,the Lenders and each Affiliate thereof and their respective directors,officers, employees and agents from, and hold each of them harmless against,any and all losses, liabilities, claims or damages to which any of them maybecome subject, insofar as such losses, liabilities, claims or damages ariseout of or result from any actual or proposed use by the Borrowers of theproceeds of any extension of credit by any Lender hereunder or breach by theParent or any Subsidiary of this Agreement or any other Loan Document or fromany investigation, litigation (including, without limitation, any actions takenby the Administrative Agent or any of the Lenders to enforce this Agreement orany of the other Loan Documents) or other proceeding (including, withoutlimitation, any threatened investigation or proceeding) relating to theforegoing, and the Borrowers shall reimburse the Administrative Agent and eachLender, and each Affiliate thereof and their respective directors, officers,employees and agents, upon demand for any expenses (including, withoutlimitation, legal fees) incurred in connection with any such investigation orproceeding; but excluding any such losses, liabilities, claims, damages orexpenses incurred by reason of the gross negligence or willful misconduct ofthe Person (or agent thereof) to be indemnified.
SECTION 10.05.                Setoff; Sharing of Setoffs. 
(a)    The Parent and each of the Borrowers hereby grants to theCollateral Agent, the Administrative Agent and each Lender, and to Wachovia asto the Swing Loans, and the Issuers as to the Letter of Credit Obligations, alien for all Obligations owing to them from the Borrowers upon all deposits ordeposit accounts, of any kind, or any interest in any deposits or depositaccounts thereof, now or hereafter pledged, mortgaged, transferred or assignedto the Collateral Agent, the Administrative Agent, Wachovia, or any such Lenderor Issuer or otherwise in the possession or control of the Collateral Agent,the Administrative Agent, Wachovia, or any such Lender or Issuer for anypurpose for the account or benefit of the Parent or the Borrowers and includingany balance of any deposit account or of any credit of the Parent or theBorrowers with the Administrative Agent, Wachovia, or any such Lender orIssuer, whether now existing or hereafter established, hereby authorizing theCollateral Agent, the Administrative Agent, Wachovia, and each Lender or Issuerat any time or times with or without prior notice, so long as an Event ofDefault shall have occurred and be continuing, to exercise its right of offset,security interest, and Lien on such balances and accounts, or any part thereof,and to pay such balances and the proceeds and funds within such accounts to theCollateral Agent for distribution among the Noteholders and Lenders inaccordance with the terms of the Security Agreement, as if such balances andproperty in such accounts were "Proceeds" thereunder, whether or not theCollateral or other collateral, if any, or the responsibility of other Personsprimarily, secondarily or otherwise liable may be deemed adequate.  The Collateral Agent hereby designates theAdministrative Agent, each Lender, Wachovia, and each Issuer a sub-collateralagent for purposes of exercising the rights granted to each of them in thisSection 10.05.  For the purposes of thisparagraph, all remittances and property shall be deemed to be in the possessionof the Collateral Agent, the Administrative Agent, Wachovia, or any such Lenderor Issuer as soon as the same may be put in transit to it by mail or carrier orby other bailee.  Each of the Lenders,the Administrative Agent, the Parent, and the Borrowers agrees that thisSection 10.05 shall constitute a security agreement with respect to suchbalances and the accounts in which they are deposited and that, to the extentsuch deposit accounts are maintained at the Lenders, the Lenders shall havecontrol over such deposit accounts. 

(b)   Wachovia, each Lender, and each Issuer agree that if any ofthem shall receive payment, either from the Collateral Agent (through theAdministrative Agent) pursuant to the application of proceeds under aCollateral Document or otherwise, of a proportion of the aggregate amount ofthe principal and interest owing with respect to the Loans held by it, or theLetter of Credit Obligations, which is greater than the proportion received byany other Lender in respect of the aggregate amount of all principal andinterest owing with respect to the Loans held by such other Lender, or anIssuer with respect to the Letter of Credit Obligations, the Lender or Issuerreceiving such proportionately greater payment shall purchase suchparticipations in the Loans held by the other Lenders owing to such otherLenders and the Letter of Credit Obligations, and such other adjustments shallbe made, as may be required so that all such payments of principal and interestwith respect to the Loans held by the Lenders owing to such other Lenders andthe Letter of Credit Obligations shall be shared by the Lenders and the Issuerratably in accordance to the ratio their individual Commitment bears to theaggregate of all Commitments; provided that, if all or any portion of suchpayment received by the purchasing Lender is thereafter recovered from suchpurchasing Lender, such purchase from each other Lender or Issuer shall berescinded and such other Lender or Issuer shall repay to the purchasing Lenderor Issuer the purchase price of such participation to the extent of suchrecovery together with an amount equal to such other Lender's or Issuer'sratable share (according to the proportion of (i) the amount of such otherLender's or Issuer's required repayment to (ii) the total amount so recoveredfrom the purchasing Lender or Issuer) of any interest or other amount paid orpayable by the purchasing Lender or Issuer in respect of the total amount sorecovered.  Each of the Borrowersagrees, to the fullest extent it may effectively do so under applicable law,that any holder of a participation in a Loan, or risk participant with respectto the Letter of Credit Obligations, whether or not acquired pursuant to theforegoing arrangements, may exercise rights of setoff or counterclaim and otherrights with respect to such participation as fully as if such holder of aparticipation were a direct creditor of the Borrowers in the amount of suchparticipation. 

SECTION 10.06.                Amendments and Waivers. 

(a)    Any provision of this Agreement, the Notes or any other LoanDocuments may be amended or waived if, but only if, such amendment or waiver isin writing and is signed by the Parent, the Borrowers and the Required Lenders(and, if the rights or duties of the Administrative Agent are affected thereby,by the Administrative Agent); provided that, no such amendment or waivershall, unless signed by all Lenders, (i) change the Commitment of any Lender orsubject any Lender to any additional obligation, (ii) reduce the principal ofor rate of interest on any Loan or any fees (other than fees payable to theAdministrative Agent) hereunder, (iii) change the date fixed for any payment ofprincipal of or interest on any Loan or any fees hereunder, (iv) reduce theamount of principal, interest or fees due on any date fixed for the paymentthereof, (v) change the percentage of the Commitments or of the aggregateunpaid principal amount of the Notes, or the percentage of Lenders, which shallbe required for the Lenders or any of them to take any action under thisSection or any other provision of this Agreement, (vi) change the manner ofapplication of any payments made under this Agreement or the Notes, or theprovisions with respect to pro rata treatment among Lenders (including, withoutlimitation, as to sharing of payments and expenses), (vii) except as expresslyprovided in this Agreement or any of the other Loan Documents, release orsubstitute, or agree to subordination of, all or any substantial part of theCollateral held as security for the Loans, (viii) release any Guarantee givento support payment of the Loans, (ix) change the definitions of "BorrowingBase" or "Required Lenders," (x) change the provisions of any of Article 7 orSections 10.04, 10.06, or 10.20, (xi) change the joint and several nature ofthe obligations of the Borrowers, or the several nature of the obligations ofthe Lenders under their respective Commitments, or (xii) change the definitionof Obligations (except so as to make it more inclusive); and providedfurtherthat, no provision of this Agreement relating to Swing Loans may be amendedwithout the prior written consent of Wachovia and no provision of thisAgreement relating to the Letter of Credit Obligations may be amended withoutthe prior written consent of the Issuers. 

(b)   The Borrowers will not solicit, request or negotiate for orwith respect to any proposed waiver or amendment of any of the provisions ofthis Agreement except through the Administrative Agent, or unless each Lendershall be informed thereof by the Borrowers and shall be afforded an opportunityof considering the same and shall be supplied by the Borrowers with sufficientinformation to enable it to make an informed decision with respect thereto.  Executed or true and correct copies of anywaiver or consent effected pursuant to the provisions of this Agreement shallbe delivered by the Borrowers to the Administrative Agent (for distribution toeach Lender) forthwith following the date on which the same shall have beenexecuted and delivered by the requisite percentage of Lenders.  The Borrowers will not, directly orindirectly, pay or cause to be paid any remuneration, whether by way ofsupplemental or additional interest, fee or otherwise, to any Lender (in itscapacity as such) as consideration for or as an inducement to the entering intoby such Lender of any waiver or amendment of any of the terms and provisions ofthis Agreement unless such remuneration is concurrently paid, on the same terms,ratably to all such approving Lenders. 

SECTION 10.07.                No Margin Stock Collateral

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Each of the Lenders represents to the Administrative Agentand each of the other Lenders that it in good faith is not, directly orindirectly (by negative pledge or otherwise), relying upon any Margin Stock ascollateral in the extension or maintenance of the credit provided for in thisAgreement.
SECTION 10.08.                Successors and Assigns. 
(a)    The provisions of this Agreement shall be binding upon andinure to the benefit of the parties hereto and their respective successors andassigns; provided that the Borrowers may not assign or otherwise transfer anyof its rights under this Agreement. 

(b)   Any Lender may at any time sell to one or more Persons,provided that any such Person is a commercial bank or other financialinstitution, or a Related Fund or an Affiliate thereof (each a "Participant")participating interests in any Loan owing to such Lender, any Note held by suchLender, any Commitment hereunder or any other interest of such Lenderhereunder; provided, however, that if a Lender is selling aparticipation in only a portion of its Commitment or any other interest of suchLender hereunder, the participation being sold (determined as of the effectivedate of the sale of the participation) shall be in an amount not less than$5,000,000.  In the event of any suchsale by a Lender of a participating interest to a Participant, such Lender'sobligations under this Agreement shall remain unchanged, such Lender shallremain solely responsible for the performance thereof, such Lender shall remainthe holder of any such Note for all purposes under this Agreement, and theBorrowers and the Administrative Agent shall continue to deal solely anddirectly with such Lender in connection with such Lender's rights and obligationsunder this Agreement.  In no event shalla Lender that sells a participation be obligated to the Participant to take orrefrain from taking any action hereunder except that such Lender may agree thatit will not (except as provided below), without the consent of the Participant,agree to (i) the change of any date fixed for the payment of principal of orinterest on the related loan or loans, (ii) the change of the amount of anyprincipal, interest or fees due on any date fixed for the payment thereof withrespect to the related loan or loans, (iii) the change of the principal of therelated loan or loans, (iv) any change in the rate at which either interest ispayable thereon or (if the Participant is entitled to any part thereof) fee ispayable hereunder from the rate at which the Participant is entitled to receiveinterest or fee (as the case may be) in respect of such participation, (v) therelease or substitution of all or any substantial part of the Collateral (ifany) held as security for the Loans, or (vi) the release of any Guarantee givento support payment of the Loans.  EachLender selling a participating interestto any Person other than an Affiliate or Related Fund of such Lender inany Loan, Note, Commitment or other interest under this Agreement, will, within10 Domestic Business Days of such sale, provide the Borrowers and theAdministrative Agent with written notification stating that such sale hasoccurred and identifying the Participant and the interest purchased by suchParticipant.  The Borrowers agree thateach Participant shall be entitled to the benefits of Article 8 with respect toits participation in Loans outstanding from time to time. 

(c)    Any Lender may at any time assign to one or more commercialbanks or other financial institutions organized under laws of the United Statesof America or any state and having total assets in excess of $5,000,000,000 oran affiliate of any such bank or any other financial institution reasonablyacceptable to Administrative Agent in its sole discretion (each an "Assignee")all or a proportionate part of its rights and obligations under this Agreement,the Notes and the other Loan Documents, and such Assignee shall assume all suchrights and obligations, pursuant to an Assignment and Acceptance, executed bysuch Assignee, such transferor Lender and the Administrative Agent (and, in thecase of an Assignee that is not then a Lender or a Related Fund or Affiliate ofsuch Lender, subject to clause (iii) below, by the Borrowers); providedthat (i) no interest may be sold by a Lender pursuant to this paragraph (c)unless the Assignee shall agree to assume ratably equivalent portions of thetransferor Lender's Commitment, (ii) if a Lender is assigning only a portion ofits Commitment, then, the amount of the Commitment being assigned (determinedas of the effective date of the assignment) shall be in an amount not less than$5,000,000, (iii) no interest may be sold by a Lender pursuant to thisparagraph (c) to any Assignee that is not then a Lender (or an Affiliate orRelated Fund of a Lender) without the prior written consent of theAdministrative Agent (which consent shall not be unreasonably withheld ordelayed), and, unless a Default or Event of Default is in existence, theBorrower (whose consent shall not be unreasonably withheld or delayed), and(iv) a Lender may not have more than 3 Assignees that are not then Lenders (oran Affiliate or Related Fund thereof) at any one time.  Upon (A) execution of the Assignment and Acceptanceby such transferor Lender, such Assignee, the Administrative Agent and (ifapplicable) the Borrowers, (B) delivery of an executed copy of the Assignmentand Acceptance to the Borrowers and the Administrative Agent, (C) payment bysuch Assignee to such transferor Lender of an amount equal to the purchaseprice agreed between such transferor Lender and such Assignee, (D) payment of aprocessing and recordation fee to the Administrative Agent in the amount of$1,000, if the Assignee is an Affiliate or Related Fund of a Lender, or $3,500,for any other Assignee, and (E) recordation of such assignment on the Register,as defined and provided below, such Assignee shall for all purposes be a Lenderparty to this Agreement and shall have all the rights and obligations of aLender under this Agreement to the same extent as if it were an original partyhereto with a Commitment as set forth in such instrument of assumption, and thetransferor Lender shall be released from its obligations hereunder to acorresponding extent, and no further consent or action by the Borrowers, theLenders or the Administrative Agent shall be required.  The Borrowers hereby designate theAdministrative Agent to serve as the Borrowers' agent, solely for purposes ofthis Section 10.08(c), to maintain a register (the "Register") on which it willrecord the Commitments from time to time of each of the Lenders, the Loans madeby each of the Lender and each repayment in respect of the principal amount ofthe Loans of each Lender.  Failure tomake any such recordation, or any error in such recordation shall not affectthe Borrowers' obligations in respect of such Loans.  With respect to any Lenders, the transfer of any Commitment ofsuch Lenders and the rights to the principal of, and interest on, any Loanshall not be effective until such transfer is recorded on the Registermaintained by the Administrative Agent with respect to ownership of suchCommitment and Loans and prior to such recordation all amounts owing to thetransferor with respect to such Commitment and Loans shall remain owing to thetransferor.  The registration ofassignment or transfer of all or part of any Commitment and Loans shall berecorded by the Administrative Agent on the Register only upon the acceptanceby the Administrative Agent of a properly executed and delivered Assignment andAcceptance pursuant to this Section 10.08(c).Coincident with the delivery of such an Assignment and Acceptance to theAdministrative Agent for acceptance and registration of assignment or transferof all or part of a Commitment and/or Loan, or as soon thereafter aspracticable, the assigning or transferor Lender shall surrender the Noteevidencing such Commitment and/or Loan, and thereupon one or more new Notes inthe aggregate principal amount so assigned shall be issued to the new Lenderand, if applicable, a new Note shall be issued to the assigning or transferorLender in the remaining aggregate principal amount of its Commitment and/orLoan not so assigned.  The Borroweragrees to indemnify the Administrative Agent from and against any and alllosses, claims, damages and liabilities of whatsoever nature which may beimposed on, asserted against or incurred by the Administrative Agent inperforming its duties under this Section 10.08(c); but excluding any suchlosses, claims, damages and liabilities incurred by reason of the grossnegligence or willful misconduct of the Administrative Agent.  Each Lender agrees to indemnify theBorrowers and 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 Borrowers or the Administrative Agent byreason of the inaccuracy of any information which is furnished by such Lenderconcerning such Lender or its Lending Office or the amount assigned pursuant toan Assignment and Acceptance Agreement. 

(d)   Subject to the provisions of Section 10.09, the Borrowersauthorize each Lender to disclose to any Participant, Assignee or othertransferee (each a "Transferee") and any prospective Transferee any and allfinancial information in such Lender's possession concerning the Borrowerswhich has been delivered to such Lender by the Borrowers pursuant to thisAgreement or which has been delivered to such Lender by the Borrowers in connectionwith such Lender's credit evaluation prior to entering into this Agreement. 

(e)    No Transferee shall be entitled to receive any greater paymentunder Section 2.13 or 9.03 than the transferor Lender would have been entitledto receive with respect to the rights transferred, unless such transfer is madewith the Borrowers' prior written consent or by reason of the provisions ofSection 2.13, 9.02 or 9.03 requiring such Lender to designate a differentLending Office under certain circumstances or at a time when the circumstancesgiving rise to such greater payment did not exist. 

(f)     Anything in this Section 10.08 to the contrarynotwithstanding, any Lender may assign and pledge all or any portion of theLoans and/or obligations owing to it to any Federal Reserve Bank or the UnitedStates Treasury as collateral security pursuant to Regulation A of the Board ofGovernors of the Federal Reserve System and any Operating Circular issued bysuch Federal Reserve Bank, provided that any payment in respect of suchassigned Loans and/or obligations made by the Borrowers to the assigning and/orpledging Lender in accordance with the terms of this Agreement shall satisfythe Borrowers' obligations hereunder in respect of such assigned Loans and/orobligations to the extent of such payment.No such assignment shall release the assigning and/or pledging Lenderfrom its obligations hereunder. 

SECTION 10.09.                Confidentiality

.  Each Lenderagrees to exercise commercially reasonable efforts to keep any informationdelivered or made available by the Borrowers to it pursuant to Section 5.04 or6.01, or any other information which is clearly indicated to be confidentialinformation, confidential from anyone other than persons employed or retainedby such Lender who are or are expected to become engaged in evaluating,approving, structuring or administering the Loans; provided that nothing hereinshall prevent any Lender from disclosing such information (a) to any otherLender, (b) upon the order of any court or administrative agency, (c) upon therequest or demand of any regulatory agency or authority having jurisdictionover such Lender, (d) which has been publicly disclosed, (e) to the extentreasonably required in connection with any litigation to which theAdministrative Agent, any Lender or their respective Affiliates may be a party,(f) to the extent reasonably required in connection with the exercise of anyremedy hereunder, (g) to such Lender's legal counsel and independent auditorsand (h) to any actual or proposed Participant, Assignee or other Transferee ofall or part of its rights hereunder which has agreed in writing to be bound bythe provisions of this Section 10.09; provided that should disclosure of anysuch confidential information be required by virtue of clause (b) of theimmediately preceding sentence, to the extent permitted by law, any relevantLender shall promptly notify the Borrowers of same so as to allow the Borrowersto seek a protective order or to take any other appropriate action; provided,further, that, no Lender shall be required to delay compliance with anydirective to disclose any such information so as to allow the Borrowers toeffect any such action.
SECTION 10.10.                Representation by Lenders
.  Each Lenderhereby represents that it is a commercial Lender or financial institution whichmakes loans in the ordinary course of its business and that it will make itsLoans hereunder for its own account in the ordinary course of such business;provided that, subject to Section 10.08, the disposition of the Note or Notesheld by that Lender shall at all times be within its exclusive control.
SECTION 10.11.                Obligations Several
.  The obligationsof each Lender hereunder are several, and no Lender shall be responsible forthe obligations or commitment of any other Lender hereunder.  Nothing contained in this Agreement and noaction taken by the Lenders pursuant hereto shall be deemed to constitute theLenders to be a partnership, an association, a joint venture or any other kindof entity.  The amounts payable at anytime hereunder to each Lender shall be a separate and independent debt, andeach Lender shall be entitled to protect and enforce its rights arising out ofthis Agreement or any other Loan Document and it shall not be necessary for anyother Lender to be joined as an additional party in any proceeding for suchpurpose.
SECTION 10.12.                Georgia Law
.  This Agreementand each Note shall be construed in accordance with and governed by the law ofthe State of Georgia.
SECTION 10.13.                Severability
.  In case any oneor more of the provisions contained in this Agreement, the Notes or any of theother Loan Documents should be invalid, illegal or unenforceable in anyrespect, the validity, legality and enforceability of the remaining provisionscontained herein and therein shall not in any way be affected or impairedthereby and shall be enforced to the greatest extent permitted by law.
SECTION 10.14.                Interest. 
(a)    In no event shall the amount of interest, and all charges,amounts or fees contracted for, charged or collected pursuant to thisAgreement, the Notes or the other Loan Documents and deemed to be interest underapplicable law (collectively, "Interest") exceed the highest rate of interestallowed by applicable law (the "Maximum Rate"), and in the event any suchpayment is inadvertently received by any Lender, then the excess sum (the"Excess") shall be credited as a payment of principal, unless the Borrowersshall notify such Lender in writing that it elects to have the Excess returnedforthwith.  It is the express intenthereof that the Borrowers not pay and the Lenders not receive, directly orindirectly in any manner whatsoever, interest in excess of that which maylegally be paid by the Borrowers under applicable law.  The right to accelerate maturity of any ofthe Loans does not include the right to accelerate any interest that has nototherwise accrued on the date of such acceleration, and the AdministrativeAgent and the Lenders do not intend to collect any unearned interest in theevent of any such acceleration.  Allmonies paid to the Administrative Agent or the Lenders hereunder or under anyof the Notes or the other Loan Documents, whether at maturity or by prepayment,shall be subject to rebate of unearned interest as and to the extent requiredby applicable law.  By the execution ofthis Agreement, each of the Borrowers covenants, to the fullest extentpermitted by law, that (i) the credit or return of any Excess shall constitutethe acceptance by the Borrowers of such Excess, and (ii) the Borrowers shallnot seek or pursue any other remedy, legal or equitable, against theAdministrative Agent or any Lender, based in whole or in part upon contractingfor charging or receiving any Interest in excess of the Maximum Rate.  For the purpose of determining whether ornot any Excess has been contracted for, charged or received by theAdministrative Agent or any Lender, all interest at any time contracted for,charged or received from the Borrowers in connection with this Agreement, theNotes or any of the other Loan Documents shall, to the extent permitted byapplicable law, be amortized, prorated, allocated and spread in equal partsthroughout the full term of the Commitments.The Borrowers, the Administrative Agent and each Lender shall, to themaximum extent permitted under applicable law, (x) characterize any non-principalpayment as an expense, fee or premium rather than as Interest and (y) excludevoluntary prepayments and the effects thereof.The provisions of this Section shall be deemed to be incorporated intoeach Note and each of the other Loan Documents (whether or not any provision ofthis Section is referred to therein).All such Loan Documents and communications relating to any Interest owedby the Borrowers and all figures set forth therein shall, for the sole purposeof computing the extent of obligations hereunder and under the Notes and theother Loan Documents be automatically recomputed by the Borrowers, and by anycourt considering the same, to give effect to the adjustments or creditsrequired by this Section. 

(b)   Pursuant to O.C.G.A. Sec.7-4-2, the Borrowers, the AdministrativeAgent and the Lenders hereby agree that the only charges imposed or to beimposed by the Administrative Agent or the Lenders upon the Borrowers for theuse of money in connection with the Loans is and will be the interest requiredto be paid under the provisions of Section 2.07 of this Agreement and therelated provisions of the Notes, and that the fees payable pursuant to Section2.08 are and shall be deemed to be compensation for services and are not andshall not be deemed to be interest or any other charge for the use, forbearanceor detention of money. 

SECTION 10.15.                Interpretation

.  No provision ofthis Agreement or any of the other Loan Documents shall be construed against orinterpreted to the disadvantage of any party hereto  by any court or other governmental or judicial authority byreason of such party having or being deemed to have structured or dictated suchprovision.
SECTION 10.16.                WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION
.  EACH OF THEBORROWERS (A) AND EACH OF THE LENDERS AND THE ADMINISTRATIVE AGENT IRREVOCABLYWAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BYJURY IN ANY LEGAL PROCEEDING ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHERLOAN DOCUMENTS, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, (B)SUBMITS TO THE NONEXCLUSIVE PERSONAL JURISDICTION IN THE STATE OF GEORGIA, THECOURTS THEREOF AND THE UNITED STATES DISTRICT COURTS SITTING THEREIN, FOR THEENFORCEMENT OF THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS, (C)WAIVES ANY AND ALL PERSONAL RIGHTS UNDER THE LAW OF ANY JURISDICTION TO OBJECTON ANY BASIS (INCLUDING, WITHOUT LIMITATION, INCONVENIENCE OF FORUM) TOJURISDICTION OR VENUE WITHIN THE STATE OF GEORGIA FOR THE PURPOSE OF LITIGATIONTO ENFORCE THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS, AND (D)AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN THE MANNER PRESCRIBED INSECTION 10.01 FOR THE GIVING OF NOTICE TO THE BORROWERS.  NOTHING HEREIN CONTAINED, HOWEVER, SHALLPREVENT THE ADMINISTRATIVE AGENT FROM BRINGING ANY ACTION OR EXERCISING ANYRIGHTS AGAINST ANY SECURITY AND AGAINST THE PARENT OR THE BORROWERS PERSONALLY,AND AGAINST ANY ASSETS OF THE PARENTS OR THE BORROWERS, WITHIN ANY OTHER STATEOR JURISDICTION.
SECTION 10.17.                Counterparts
.  This Agreementand the other Loan Documents may be signed in any number of counterparts, eachof which shall be an original, with the same effect as if the signaturesthereto and hereto were upon the same instrument.
SECTION 10.18.                Source of Funds -- ERISA
.  Each of theLenders hereby severally (and not jointly) represents to the Borrowers that no partof the funds to be used by such Lender to fund the Loans hereunder from time totime constitutes (a) assets allocated to any separate account maintained bysuch Lender in which any employee benefit plan (or its related trust) has anyinterest nor (b) any other assets of any employee benefit plan.  As used in this Section, the terms "employeebenefit plan" and "separate account" shall have the respective meaningsassigned to such terms in Section 3 of ERISA.
SECTION 10.19.                Credit Inquiries
.  Each Borrowerand the Parent hereby authorizes and permits the Administrative Agent and eachLender, at its discretion and without any obligation to do so, to respond tocredit inquiries from third parties concerning the Parent or any of theSubsidiaries.
SECTION 10.20.                Consequential Damages
.  NONE OF THELENDERS NOR THE ADMINISTRATIVE AGENT SHALL BE RESPONSIBLE OR LIABLE TO THEPARENT, THE BORROWERS OR ANY OTHER PERSON OR ENTITY FOR ANY PUNITIVE, EXEMPLARYOR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF THIS AGREEMENT,THE OTHER LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY ORTHEREBY.
SECTION 10.21.                Entire Agreement
.  This Agreement,together with the other Loan Documents, constitute the entire agreement amongthe parties hereto with respect to the subject matter hereof, and supersede andreplace any agreement, written or oral, existing between or among the partieshereto in respect of such subject matter.
SECTION 10.22.                Continuing Agreement
.  This Agreement,together with all other Loan Documents, shall continue in full force andeffect, notwithstanding the termination of any one, or more or all of theCommitments or the payment in full of one, or more of all of the Obligations,unless and until all Commitments have been terminated and all Obligations(including, without limitation, any Letter of Credit Obligations in the natureof contingent obligations) have been fully paid and satisfied, each inaccordance with the terms and conditions hereof and of the other LoanDocuments.

[Signatures are contained on thefollowing pages.]

IN WITNESS WHEREOF, the parties hereto have caused thisAgreement to be duly executed, under seal, by their respective authorizedofficers as of the day and year first above written.

 

BORROWERS:

                                                                        AIRBORNEEXPRESS, INC.                     (SEAL)

 

 

                                                                        By:/s/ Lanny H. Michael_______________________

                                                                             Lanny H. Michael, SVP & CFO

 

                                                                        P.O.Box 662

                                                                        Seattle,Washington  98111

                                                                        Attention:Chief Financial Officer and General _ Counsel

                                                                        CFOTelecopier number: 206-281-1444

                                                                        Confirmationnumber: 206-281-1003

                                                                        GCTelecopier number: 206-281-1444

                                                                        Confirmationnumber: 206-281-1005

 

                                                                        ABXAIR, INC.                                           (SEAL)

 

 

                                                                        By:/s/ Joe Hete______________________________ 

                                                                             Joe Hete, President

 

                                                                        P.O.Box 662

                                                                        Seattle,Washington  98111

                                                                        Attention:Chief Financial Officer and General _ Counsel

                                                                        CFOTelecopier number: 206-281-1444

                                                                        Confirmationnumber: 206-281-1003

                                                                        GCTelecopier number: 206-281-1444

                                                                        Confirmationnumber: 206-281-1005

                                                                        PARENT:

 

                                                                        AIRBORNE,INC.                            (SEAL)

 

 

                                                                        By:/s/ Lanny H. Micheal_______________________ 

                                                                                Lanny H. Michael, SVP & CFO

 

                                                                        P.O.Box 662

                                                                        Seattle,Washington  98111

                                                                        Attention:Chief Financial Officer and General _ Counsel

                                                                        CFOTelecopier number: 206-281-1444

                                                                        Confirmationnumber: 206-281-1003

                                                                        GCTelecopier number: 206-281-1444

                                                                        Confirmationnumber: 206-281-1005

                                                                        LENDERS:

 

COMMITMENTS                                           WACHOVIABANK, N.A.,

                                                                        asAdministrative Agent, Collateral Agent,

                                                                        andas a Lender                                            (SEAL)

 

 

$47,500,000                                                    By:/s/Howard Kim___________________________ 

                                                                              Title: Senior Vice President

 

LendingOffice

                                                                        WachoviaBank, N.A.

                                                                        191Peachtree Street, N.E.

                                                                        Atlanta,Georgia 30303‐1757

                                                                        Attention:Syndications Group

                                                                        Telecopiernumber: 404-332-1394

                                                                        Confirmationnumber: 404-332-6971

                                                                        NATIONALCITY BANK(SEAL)

 

 

$32,500,000                                                    By:/s/ Jeffrey L. Hawthorne____________________ 

                                                                              Title: Senior Vice President

 

LendingOffice

                                                                        155East Broad Street

                                                                        Columbus,OH  43251

                                                                        Attention:  Jeffrey L. Hawthorne, Sr. Vice President

                                                                        Telecopiernumber:  614-463-7172

                                                                        Confirmationnumber:  614-463-7298

 

                                                                        THEBANK OF TOKYO-MITSUBISHI, LTD.

                                                                        PORTLANDBRANCH(SEAL)

 

 

$32,500,000                                                    By:/s/ Kosuke Takahashi______________________ 

                                                                              Title: Vice President

 

LendingOffice

                                                                        2300Pacwest Center

                                                                        1211South West 5th Avenue

                                                                        Attention:Penny Crisman

                                                                        Telecopiernumber:  503-222-5646

                                                                        Confirmationnumber:  503-222-3750

 

with a copy to:

 

Suite 1100

1201 Third Avenue

Seattle, Washington 98101

Attention:  Kosuke Takahashi, Vice President

Telecopier number:206-382-6067

Confirmation number:206-362-6000

 

 

                                                                        BANKOF AMERICA, N.A.(SEAL)

 

 

$45,000,000                                                    By:/s/ Sharon Burks Horos_____________________ 

                                                                              Title: Vice President

 

LendingOffice

                                                                        231South LaSalle Street, 9th Floor

                                                                        Chicago,IL  60697

                                                                        Attention:Sharon Burks Horos, Vice President

                                                                        Telecopiernumber:  312-828-6269

                                                                        Confirmationnumber:  312-828-2149

 

 

                                                                        U.S.BANK NATIONAL ASSOCIATION  (SEAL)

 

 

$45,000,000                                                    By:/s/ Stephen A. Tornio______________________ 

                                                                              Title: Vice President

 

LendingOffice

                                                                        U.S.Bank Place

                                                                        MPFP2516

                                                                        601Second Avenue South

                                                                        Minneapolis,Minnesota 55402-4302

                                                                        Attention:David Y. Kopolow, Vice President

                                                                        Telecopiernumber:  612-973-2148

                                                                        Confirmationnumber:  612-973-2341

 

 

                                                                        THEBANK OF NEW YORK(SEAL)

 

 

$32,500,000                                                    By:/s/ Elizabeth T. Ying_______________________ 

                                                                              Title: Vice President

 

LendingOffice

                                                                        10000Wilshire Boulevard

                                                                        Suite1125

                                                                        LosAngeles, CA 90024

                                                                        Attention:Lisa Yee Brown

                                                                        Telecopiernumber:  310-996-8667

                                                                        Confirmationnumber:  310-996-8650

 

                                                                        ABN-AMROBANK N.V.(SEAL)

 

 

$20,000,000                                                    By:/s/ Alex Miller____________________________ 

                                                                              Title: Vice President

 

                                                                        By:/s/ Sean Cutting___________________________ 

                                                                              Title: Vice President

 

 

LendingOffice

                                                                        300South Grand Avenue, Suite 2650

                                                                        LosAngeles, CA 90071

                                                                        Attention:  Paul K. Stimpfl, Group Vice President

                                                                        Telecopiernumber:  213-687-2390

                                                                        Confirmationnumber:  213-687-2303

 

 

                                                                        THEINDUSTRIAL BANK OF JAPAN, LIMITED

(SEAL)

 

 

$20,000,000                                                    By:/s/ Vicente L. Timiraos_____________________ 

                                                                              Title: Joint General Manager

 

LendingOffice

                                                                        350South Grand Avenue, Suite 1500

                                                                        LosAngeles, CA 90071

                                                                        Attention:J. Blake Seaton,

                                                                                         Vice President and Manager

                                                                        Telecopiernumber:  213-488-9840

                                                                        Confirmationnumber:  213-893-6448

 

 

 

 

______________________

 

TOTAL COMMITMENTS

 

$275,000,000
****
EXHIBITA-1

AMENDEDAND RESTATED SYNDICATED LOAN NOTE

Atlanta,Georgia

June29, 2001

 

For value received, AIRBORNE EXPRESS, INC., aDelaware corporation ("Express"), and ABX AIR, INC., a Delawarecorporation (together, with Express, jointly and severally, the"Borrowers"), promise to pay to the order of [LENDER] (the"Lender"), for the account of its Lending Office, the principal sumof [] AND NO/100 DOLLARS ($_), or such lesser amount as shall equal the unpaidprincipal amount of each Syndicated Loan made by the Lender to the Borrowerspursuant to the Credit Agreement referred to below, on the dates and in theamounts provided in the Credit Agreement.The Borrowers promise to pay interest on the unpaid principal amount ofthis Amended and Restated Syndicated Loan Note on the dates and at the rate orrates provided for in the Credit Agreement.Interest on any overdue principal of and, to the extent permitted bylaw, overdue interest on the principal amount hereof shall bear interest at theDefault Rate, as provided for in the Credit Agreement.   All such payments of principal and interestshall be made in lawful money of the United States in Federal or otherimmediately available funds at the office of [Bank, and Lending OfficeAddress], or such other address as may be specified from time to time pursuantto the Credit Agreement.

All Loans made by the Lender, the respectivematurities thereof, the interest rates from time to time applicable thereto,and all repayments of the principal thereof shall be recorded by the Lenderand, prior to any transfer hereof, endorsed by the Lender on the scheduleattached hereto, or on a continuation of such schedule attached to and made apart hereof; provided that the failure of the Lender to make any suchrecordation or endorsement shall not affect the obligations of the Borrowershereunder or under the Credit Agreement.

This Amended and Restated Syndicated Loan Noteamends, restates, and supersedes that certain Syndicated Loan Note dated as ofDecember 26, 2000, made by Airborne, Inc., payable to Lender, and is one of theSyndicated Loan Notes referred to in that certain Amended and Restated CreditAgreement dated as of even date herewith among the Borrowers, Airborne, Inc.,the Lenders listed on the signature pages thereof and Wachovia Bank, N.A., asAdministrative Agent and Collateral Agent (as the same may be amended andmodified from time to time, the "Credit Agreement").  Terms defined in the Credit Agreement areused herein with the same meanings.Reference is made to the Credit Agreement for provisions for the optionaland mandatory prepayment and the repayment hereof and the acceleration of thematurity hereof, as well as the obligation of the Borrowers to pay all costs ofcollection, including reasonable attorneys fees, in the event this Amended andRestated Syndicated Loan Note is collected by law or through an attorney atlaw.

The Borrowers hereby waive presentment, demand,protest, notice of demand, protest and nonpayment and any other notice requiredby law relative hereto, except to the extent as otherwise may be expresslyprovided for in the Credit Agreement.

This Amended and Restated Syndicated Loan Notemay be executed by each of the Borrowers on different signature pages and whenall of such signature pages are brought together this Amended and Restated SyndicatedLoan Note shall be deemed fully executed by each of the Borrowers as if each ofthem had signed on the same signature page.

IN WITNESS WHEREOF, the Borrowers have causedthis Amended and Restated Syndicated Loan Note to be duly executed, under seal,by their duly authorized officers as of the day and year first above written.

 

                                                                        AIRBORNEEXPRESS, INC.(SEAL)

 

 

                                                                        By:_______________________________________ 

 

                                                                        Title:______________________________________ 

 

                                                                        ABXAIR, INC.                                           (SEAL)

 

 

                                                                        By:_______________________________________ 

 

                                                                        Title:______________________________________ 

Amended andRestated Syndicated Loan Note (continued)

SYNDICATED LOANS  AND PAYMENTS OF PRINCIPAL

 

Date

Base Rate

   or Euro

Dollar Loan

Amount

of Loan

Amount of

Principal

Repaid

Maturity

Date

Notation

Made By

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
****
EXHIBIT A-2

AMENDEDAND RESTATED SWING LOAN NOTEAtlanta, GeorgiaJune 29, 2001

For value received, AIRBORNE EXPRESS, INC., a Delawarecorporation ("Express"), and ABX AIR, INC., a Delaware corporation(together, with Express, jointly and severally, the "Borrowers"),promise to pay to the order of [_](the "Lender"), for the account ofits Lending Office, the principal sum of [_] No/100 DOLLARS ($_), or suchlesser amount as shall equal the unpaid principal amount of each Swing Loanmade by the Lender to the Borrowers pursuant to the Credit Agreement referredto below, on the dates and in the amounts provided in the CreditAgreement.  The Borrowers promise to payinterest on the unpaid principal amount of this Amended and Restated Swing LoanNote at the rate provided for Base Rate Loans on the dates provided for in theCredit Agreement.  Interest on anyoverdue principal of and, to the extent permitted by law, overdue interest onthe principal amount hereof shall bear interest at the Default Rate, asprovided for in the Credit Agreement.All such payments of principal and interest shall be made in lawfulmoney of the United States in Federal or other immediately available funds atthe office of [Bank, and address of lending Office], or such other address asmay be specified from time to time pursuant to the Credit Agreement.

All Swing Loans made by the Lender, the respectivematurities thereof, and all repayments of the principal thereof shall berecorded by the Lender and, prior to any transfer hereof, endorsed by theLender on the schedule attached hereto, or on a continuation of such scheduleattached to and made a part hereof; provided that the failure of theLender to make any such recordation or endorsement shall not affect theobligations of the Borrowers hereunder or under the Credit Agreement.

This Amended and Restated Swing Loan Note amends,restates, and supersedes that certain Swing Loan Note dated as ofApril 20, 2001, made by Airborne, Inc., payable to Lender, and is theSwing Loan Note referred to in that certain Amended and Restated CreditAgreement dated as of June [], 2001, among the Borrowers, Airborne, Inc.,the Lenders listed on the signature pages thereof, and Wachovia Bank, N.A., asAdministrative Agent and Collateral Agent (as the same may be amended and modifiedfrom time to time, the "Credit Agreement").  Terms defined in the Credit Agreement are used herein with thesame meanings.  Reference is made to theCredit Agreement for provisions for the optional and mandatory prepayment andthe repayment hereof and the acceleration of the maturity hereof as well as theobligation of the Borrowers to pay all costs of collection, includingreasonable attorneys' fees, in the event this Amended and Restated Swing LoanNote is collected by law or through an attorney at law.

The Borrowers hereby waive presentment, demand, protest,notice of demand, protest and nonpayment and any other notice required by lawrelative hereto, except to the extent as otherwise may be expressly providedfor in the Credit Agreement.

This Amended and Restated Swing Loan Note may be executedby each of the Borrowers on different signature pages and when all of suchsignature pages are brought together this Amended and Restated Swing Loan Noteshall be deemed fully executed by each of the Borrowers as if each of them hadsigned on the same signature page.

IN WITNESS WHEREOF, the Borrowers have caused this Amendedand Restated Swing Loan Note to be duly executed, under seal, by their dulyauthorized officers as of the day and year first above written.

AIRBORNE EXPRESS, INC.                (SEAL)

 

By:                                                                   

 

Title:                                                                 

 

 

ABX AIR, INC.                                       (SEAL)

 

By:                                                                   

 

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Amended and Restated Swing Loan Note(continued)

**LOANS AND PAYMENTS  OF PRINCIPAL**

 

**Date**

**Amount of**

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**Amount of**

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**Repaid**

**Maturity**

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**Notation**

**Made By**

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