**Exhibit 10**

 

EXECUTION COPY

 

 

 

CREDIT AGREEMENT

 

 

dated as of

 

 

March 10, 2005

 

 

among

 

 

CUBIC CORPORATION

 

 

The Lenders Party Hereto,

 

 

and

 

 

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

 

UNION BANK OF CALIFORNIA, N.A.,as Co-Syndication Agent

 

CALYON NEW YORK BRANCH,as Co-Syndication Agent

 

WACHOVIA BANK, NATIONAL ASSOCIATION,as Documentation Agent

 

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

 

 

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TABLE OF CONTENTS

 
| ARTICLE I Definitions                       |                                                                                       |
|--------------------------------------------------|--------------------------------------------------------------------------------------------|
|                                             | Section 1.01.  Defined Terms                                                |   |
|                                             | Section 1.02.  Classification of Loans and Borrowings                       |   |
|                                             | Section 1.03.  Terms Generally                                              |   |
|                                             | Section 1.04.  Accounting Terms; GAAP                                       |   |
|                                             |                                                                                       |   |
| ARTICLE II The Credits                      |                                                                                       |
|                                             | Section 2.01.  Commitments                                                  |   |
|                                             | Section 2.02.  Loans and Borrowings                                         |   |
|                                             | Section 2.03.  Requests for  Borrowings                                     |   |
|                                             | Section 2.04.  Swingline  Loans                                             |   |
|                                             | Section 2.05.  Letters of  Credit                                           |   |
|                                             | Section 2.06.  Funding of  Borrowings                                       |   |
|                                             | Section 2.07.  Interest  Elections                                          |   |
|                                             | Section 2.08.  Termination,  Reduction and Increase of Commitments          |   |
|                                             | Section 2.09.  Repayment of  Loans; Evidence of Debt                        |   |
|                                             | Section 2.10.  Prepayment of  Loans                                         |   |
|                                             | Section 2.11.  Fees                                                         |   |
|                                             | Section 2.12.  Interest                                                     |   |
|                                             | Section 2.13.  Alternate  Rate of Interest                                  |   |
|                                             | Section 2.14.  Increased  Costs                                             |   |
|                                             | Section 2.15.  Break Funding  Payments                                      |   |
|                                             | Section 2.16.  Taxes                                                        |   |
|                                             | Section 2.17.  Payments  Generally; Pro Rata Treatment; Sharing of Set-offs |   |
|                                             | Section 2.18.  Mitigation  Obligations                                      |   |
|                                             |                                                                                       |   |
| ARTICLE III Representations and  Warranties |                                                                                       |
|                                             | Section 3.01.  Existence and  Power                                         |   |
|                                             | Section 3.02.  Corporate and  Governmental Authorization; No Contravention  |   |
|                                             | Section 3.03.  Binding  Effect                                              |   |
|                                             | Section 3.04.  Financial  Information                                       |   |
|                                             | Section 3.05.  Litigation                                                   |   |
|                                             | Section 3.06.  Compliance  with ERISA                                       |   |
|                                             | Section 3.07.  Taxes                                                        |   |
|                                             | Section 3.08.  Environmental  Compliance                                    |   |
|                                             | Section 3.09.  Properties                                                   |   |
|                                             | Section 3.10.  Compliance  with Laws and Agreements                         |   |
|                                             | Section 3.11.  Investment  and Holding Company Status                       |   |
|                                             | Section 3.12.  Full  Disclosure                                             |   |
|                                             | Section 3.13.  Solvency                                                     |   |
|                                             | Section 3.14.  Employee  Matters                                            |   |

 

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|                                       | Section 3.15.  Use of  Proceeds                                              |   |
|--------------------------------------------|---------------------------------------------------------------------------------------------|--------|
|                                       | Section 3.16.  Subsidiaries                                                  |   |
|                                       | Section 3.17.  No Change in  Credit Criteria or Collection Policies          |   |
|                                       |                                                                                        |   |
| ARTICLE IV Conditions                 |                                                                                        |
|                                       | Section 4.01.  Effective  Date                                               |   |
|                                       | Section 4.02.  Each Credit  Event                                            |   |
|                                       |                                                                                        |   |
| ARTICLE V Affirmative Covenants       |                                                                                        |
|                                       | Section 5.01.  Financial and  Business Information                           |   |
|                                       | Section 5.02.  Officer’s  Certificate                                   |   |
|                                       | Section 5.03.  Inspection                                                    |   |
|                                       | Section 5.04.  Reporting  Treatment of Unrestricted Subsidiaries             |   |
|                                       | Section 5.05.  Compliance  with Law                                          |   |
|                                       | Section 5.06.  Insurance                                                     |   |
|                                       | Section 5.07.  Maintenance  of Properties                                    |   |
|                                       | Section 5.08.  Payment of  Taxes and Claims                                  |   |
|                                       | Section 5.09.  Corporate  Existence, Etc.                                    |   |
|                                       | Section 5.10.  Nature of  Business                                           |   |
|                                       | Section 5.11.  Additional  Guarantors                                        |   |
|                                       |                                                                                        |   |
| ARTICLE VI Negative Covenants         |                                                                                        |
|                                       | Section 6.01.  Financial  Ratios                                             |   |
|                                       | Section 6.02.  Limitation on  Indebtedness                                   |   |
|                                       | Section 6.03.  Limitation on  Liens                                          |   |
|                                       | Section 6.04.  Limitation on  Sale and Leasebacks                            |   |
|                                       | Section 6.05.  Mergers,  Consolidations and Sales of Assets and Acquisitions |   |
|                                       | Section 6.06.  Transactions  with Affiliates                                 |   |
|                                       | Section 6.07.  Designation  of Subsidiaries                                  |   |
|                                       | Section 6.08.  Modification  of Operating Documents                          |   |
|                                       | Section 6.09.  Restrictive  Agreements                                       |   |
|                                       | Section 6.10.  Restricted  Payments                                          |   |
|                                       |                                                                                        |   |
| ARTICLE VII Events of Default         |                                                                                        |
|                                       |                                                                                        |
| ARTICLE VIII The Administrative Agent |                                                                                        |
|                                       |                                                                                        |
| ARTICLE IX Miscellaneous              |                                                                                        |
|                                       | Section 9.01.  Notices                                                       |   |
|                                       | Section 9.02.  Waivers;  Amendments                                          |   |
|                                       | Section 9.03.  Expenses;  Indemnity; Damage Waiver                           |   |
|                                       | Section 9.04.  Successors  and Assigns                                       |   |
|                                       | Section 9.05.  Survival                                                      |   |
|                                       | Section 9.06.  Counterparts;  Integration; Effectiveness                     |   |
|                                       | Section 9.07.  Severability                                                  |   |
|                                       | Section 9.08.  Right of  Setoff                                              |   |

 

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|   | Section 9.09.  GOVERNING LAW;  Jurisdiction; Consent to Service of Process |   |
|--------|-------------------------------------------------------------------------------------------|--------|
|   | Section 9.10.  WAIVER OF  JURY TRIAL                                       |   |
|   | Section 9.11.  Headings                                                    |   |
|   | Section 9.12.  Confidentiality                                             |   |
|   | Section 9.13.  Interest Rate  Limitation                                   |   |
|   | Section 9.14.  USA Patriot  Act                                            |   |

 
| SCHEDULES           |   |   |   |                                              |   |
|---------------------|--------|--------|--------|---------------------------------------------------|--------|
| Schedule 2.01  |   | — |   | Commitments                                       |   |
| Schedule 3.05  |   | — |   | Disclosed Matters as to Litigation                |   |
| Schedule 3.08  |   | — |   | Disclosed Matters as to Environmental  Compliance |   |
| Schedule 3.16A |   | — |   | Restricted Subsidiaries                           |   |
| Schedule 3.16B |   | — |   | Unrestricted Subsidiaries                         |   |
| Schedule 6.03  |   | — |   | Liens                                             |   |
|                |   |   |   |                                              |   |
| EXHIBITS            |   |   |   |                                              |   |
| Exhibit A      |   | — |   | Form of Assignment and Assumption            |   |
| Exhibit B      |   | — |   | Form of Opinion of Borrower’s Counsel   |   |
| Exhibit C      |   | — |   | Form of Promissory Note                      |   |
| Exhibit D      |   | — |   | Form of Guarantee                            |   |
| Exhibit E      |   | — |   | Form of Compliance Certificate               |   |

 

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CREDITAGREEMENT dated as of March 10, 2005, among CUBIC CORPORATION, a Delawarecorporation, the LENDERS party hereto, and JPMORGAN CHASE BANK, N.A, asAdministrative Agent.

 

The Borrowerhas applied to the Lenders for Loans (such terms and all other capitalizedterms used in this paragraph having the respective meanings ascribed to suchterms hereinafter) up to an aggregate principal amount not in excess of$150,000,000 at any time outstanding during the Availability Period.  The proceeds of the Loans shall be used forthe Borrower’s and its Subsidiaries’ working capital and general corporatepurposes and to repay Indebtedness.  The Lendersare severally, and not jointly, willing to extend such Loans to the Borrowersubject to the terms and conditions hereinafter set forth.  Accordingly, the Borrower, the Lenders andthe Administrative Agent hereby agree as follows:

 

ARTICLE I

 

Definitions

 

Section 1.01.                             DefinedTerms.  As used in this Agreement,the following terms have the meanings specified below:

 

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

 

“AdjustedLIBO Rate” means, with respect to any Eurodollar Borrowing for any InterestPeriod, an interest rate per annum (rounded upwards, if necessary, to the next1/100 of 1%) equal to (a) the LIBO Rate for such Interest Periodmultiplied by (b) the Statutory Reserve Rate.

 

“AdministrativeAgent” means JPMorgan Chase Bank, N.A., in its capacity as administrativeagent for the Lenders hereunder or any successor appointed pursuant to Article VIII.

 

“AdministrativeQuestionnaire” means an Administrative Questionnaire in a form supplied bythe Administrative Agent.

 

“Affiliate”means, at any time, and with respect to any Person, (a) any other Personthat at such time directly or indirectly through one or more intermediariesControls, or is Controlled by, or is under common Control with, such firstPerson, and (b) any Person beneficially owning or holding, directly orindirectly, 10% or more of any class of voting or equity interests of suchPerson or any Subsidiary or any corporation of which such Person and itsSubsidiaries beneficially own or hold, in the aggregate, directly orindirectly, 10% or more of any class of voting or equity interests.  As used in this definition, “*Control*” means the possession, directly orindirectly, of the power to direct or cause the direction of the management andpolicies of a Person, whether through the ownership of voting securities, bycontract or otherwise.  Unless thecontext otherwise clearly requires, any reference to an “*Affiliate*” is a reference to an Affiliateof the Borrower.

 

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“AlternateBase Rate” means, for any day, a rate per annum equal to the greater of (a) thePrime Rate in effect on such day and (b) the Federal Funds Effective Ratein effect on such day plus 1⁄2 of 1%.  Anychange in the Alternate Base Rate due to a change in the Prime Rate or theFederal Funds Effective Rate shall be effective from and including theeffective date of such change in the Prime Rate or the Federal Funds EffectiveRate, respectively.

 

“ApplicableRate” means:

 

##### (a)                                  with respect to anyABR Loan or Eurodollar Loan or the Revolving Credit Commitment Fee;

#####  

###### (i)                                     if such day occurson or after the Effective Date and prior to the delivery of the first financialstatements referred to in clause (ii) below, (x) with respect toLoans that are Eurodollar Loans, 0.875%, (y) with respect to Loans thatare ABR Loans, 0% and (z) with respect to the Revolving Credit CommitmentFee, 0.175% and

######  

###### (ii)                                  if such day occurs onor after the date upon which the Borrower shall have delivered to theAdministrative Agent the financial statements required to be delivered for thefiscal period ended March 31, 2005 pursuant to Section 5.01(b),

######  

the rate as set forth below that correspondsto the ratio of Consolidated Indebtedness to Consolidated Total Capitalizationof the Borrower and its Subsidiaries on a consolidated basis as of the last dayof the fiscal quarter or fiscal year most recently ended prior to such day forwhich financial statements shall have been delivered to the AdministrativeAgent as required pursuant to Sections 5.01(a) or (b) hereof,together with the corresponding compliance certificate required pursuant to Section 5.02hereof; provided that (A) if the Borrower shall fail to timelydeliver such statements and certificates for any such fiscal quarter or fiscalyear period or (B) during the continuance of an Event of Default, then theApplicable Rate with respect to ABR Loans and Eurodollar Loans and with respectto the Revolving Credit Commitment Fee shall be determined for the period(x) from and including the date upon which such financial statements andcertificate were required to be delivered to but excluding the date upon whichfinancial statements and a certificate complying with Section 5.01(a) or(b) and Section 5.02 are delivered or (y) from and including the datefrom which such Event of Default shall have occurred but excluding the dateupon which such Event of Default is cured or waived as if the applicable ratioof Consolidated Indebtedness to Consolidated Total Capitalization of theBorrower and its Subsidiaries was greater than .35:1.00:

 

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| **Ratio of  Consolidated  Indebtedness to Consolidated  Total Capitalization** | ** ** | **ABR Spread  for Loans** | ** ** | **Eurodollar  Spread for  Loans** | ** ** | **Commitment  Fee** | ** ** |
|--------------------------------------------------------------------------------|------------|---------------------------|------------|-----------------------------------|------------|---------------------|------------|
| Greater than .35:1.00                                                          |       | 0.25                      | %          | 1.25                              | %          | 0.25                | %          |
| Equal to or less than .35:1.00 but greater  than .25:1.00                      |       | 0.125                     | %          | 1.00                              | %          | 0.225               | %          |
| Equal to or less than .25:1.00 but greater  than .15:1.00                      |       | 0.00                      | %          | 0.875                             | %          | 0.175               | %          |
| Equal to or less than .15:1.00                                                 |       | 0.00                      | %          | 0.75                              | %          | 0.150               | %          |

 

“ApprovedFund” has the meaning assigned to such term in Section 9.04.

 

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

 

“AttributableIndebtedness” means in connection with any Sale and Leaseback Transactionentered into within the limitations of Section 6.04, as of the date of anydetermination thereof, the greater of (a) the fair market value of theproperty or assets which is or are the subject of such Sale and LeasebackTransaction (as reasonably determined in good faith by the Board of Directorsof the Borrower at or about the time of the consummation of such Sale andLeaseback Transaction) and (b) the aggregate amount of Rentals due and tobecome due (discounted from the respective due dates thereof at the interestrate implicit in such Rentals and otherwise in accordance with GAAP) under thelease relating to such Sale and Leaseback Transaction.

 

“Availability”means at any time (i) the total Revolving Loan Commitments minus (ii) thesum at such time of (x) the unpaid principal balance of all Loans and(y) the LC Exposure.

 

“AvailabilityPeriod” means the period from and including the Effective Date to butexcluding the earlier of the Maturity Date and the date of termination of theCommitments.

 

“Board”means the Board of Governors of the Federal Reserve System of the United Statesof America.

 

“Borrower”means Cubic Corporation, a Delaware corporation.

 

“Borrowing”means (a) Loans of the same Type, made, converted or continued on the samedate and, in the case of Eurodollar Loans, as to which a single Interest Periodis in effect or (b) a Swingline Loan.

 

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“BorrowingRequest” means a request by the Borrower for a Borrowing in accordance withSection 2.03.

 

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

 

“CapitalLease” means any lease the obligation for Rentals with respect to which isrequired to be capitalized on a consolidated balance sheet of the lessee andits subsidiaries in accordance with GAAP.

 

“CapitalizedRentals” of any Person means as of the date of any determination thereofthe amount at which the aggregate Rentals due and to become due under all CapitalLeases under which such Person is a lessee would be reflected as a liability ona consolidated balance sheet of such Person.

 

“CERCLA”means the Comprehensive Environmental Response, Compensation and Liability Actof 1980, as amended.

 

“Change inControl” means (a) the acquisition by any party, or two or moreparties acting in concert, of beneficial ownership (within the meaning of Rule 13d-3of the SEC under the Securities Exchange Act of 1934) of 50% or more of theoutstanding shares of voting stock of the Borrower, or (b) during anyperiod of twelve (12) consecutive months, a majority of the members of theboard of directors or other equivalent governing body of the Borrower cease tobe composed of individuals (i) who were members of that board or equivalentgoverning body of the first day of such period, (ii) whose election ornomination to that board or equivalent governing body was approved byindividuals referred to in clause (i) above constituting at the timeof such election or nomination at least a majority of that board or equivalentsgoverning body, or (iii) whose election or nomination to that board orother equivalent governing body was approved by individuals referred to inclauses (i) and (ii) above constituting at the time of suchelection or nomination at least a majority of that board or equivalentgoverning body (excluding, in the case of both clause (ii) andclause (iii) , any individual whose initial nomination for, orassumption of office as, a member of that board or equivalent governing bodyoccurs as a result of an actual or threatened solicitation of proxies orconsents for the election or removal of one or more directors by any person orgroup other than a solicitation for the election of one or more directors by oron behalf of the board of directors).

 

“Change inLaw” means (a) the adoption or effectiveness of any law, rule orregulation after the date of this Agreement, (b) any change in any law, rule orregulation or in the interpretation or application thereof by any GovernmentalAuthority after or in effect after the date of this Agreement or (c) complianceby any Lender (or, for purposes of Section 2.12(b), by any lending officeof such Lender or by such Lender’s holding company, if any) with any request,guideline or directive (whether or not having the force of law) of anyGovernmental Authority made, issued or becoming effective after the date ofthis Agreement.

 

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“Class,”when used in reference to any Loan or Borrowing, refers to when such Loans, orthe Loans comprising such Borrowing, are Revolving Loans or Swingline Loans.

 

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

 

“Commitment”means a Revolving Loan Commitment.

 

“ConsolidatedAdjusted EBITDA” means with respect to the Borrower and its RestrictedSubsidiaries for any period Consolidated EBITDA for such period adjusted totake into account the EBITDA of any subsequently acquired Person which becomesa Restricted Subsidiary for the applicable period of calculation which occurredprior to its acquisition so long as such EBITDA may be verified from auditedfinancial statements.

 

“ConsolidatedEBITDA” means with respect to the Borrower and its Restricted Subsidiariesfor any period (a) the sum of (i) Consolidated Net Income for theBorrower and its Restricted Subsidiaries, (ii) Consolidated InterestExpense (to the extent deducted in determining Consolidated Net Income) for theBorrower and its Restricted Subsidiaries, and (iii) depreciation andamortization (to the extent deducted in determining Consolidated Net Income)and other non-cash items properly deductible in determining Consolidated NetIncome, calculated on a consolidated basis in accordance with GAAP, minus (b) non-cashitems properly added in determining Consolidated Net Income for such period,all such calculations to be on a consolidated basis in accordance with GAAP.

 

“ConsolidatedIndebtedness” means all Indebtedness of the Borrower and its RestrictedSubsidiaries, determined on a consolidated basis eliminating intercompanyitems.

 

“ConsolidatedInterest Expense” means, with respect to the Borrower and its RestrictedSubsidiaries for any period, the interest expense of the Borrower and itsRestricted Subsidiaries during such period determined on a consolidated basisin accordance with GAAP, and shall in any event include, without limitation, (i) theamortization of debt discounts, (ii) the amortization of all fees payablein connection with the incurrence of Indebtedness to the extent included ininterest expense and (iii) the portion of any Capitalized Lease allocableto interest expense.

 

“ConsolidatedNet Income” for any period means consolidated net income or net earnings(or any comparable line item) of the Borrower and its Restricted Subsidiaries,determined in accordance with GAAP, excluding extraordinary items and gains orloses resulting from changes in accounting principles.

 

“ConsolidatedNet Worth” means, as of the date of any determination thereof the amount ofthe capital stock accounts (net of treasury stock, at cost) *plus* (or *minus*in the case of a deficit) the surplus in retained earnings of the Borrower andits Restricted Subsidiaries as determined in accordance with GAAP.

 

“ConsolidatedPriority Indebtedness” means the sum of (a) any Indebtedness of theBorrower secured by a Lien, (b) any Indebtedness of the Borrower’sRestricted Subsidiaries (other than any such Indebtedness owing directly orindirectly to (i) the Administrative Agent and the Lenders and (ii) solong as there is in place an intercreditor agreement satisfactory to the

 

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Administrative Agent, the holders of the Borrowers 6.11% Senior Notes, Series A,due November 2008 and 6.31% Senior Notes, Series B, due November 2013)and (c) any Attributable Indebtedness created or incurred in connectionwith any Sale and Leaseback Transaction.

 

“ConsolidatedTotal Capitalization” means as of the date of any determination thereof,the sum of (a) Consolidated Indebtedness plus (b) Consolidated NetWorth.

 

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

 

“DisclosedMatters” means the actions, suits and proceedings and the environmentalmatters disclosed in Schedules 3.05 and 3.08.

 

“dollars”or “$” refers to lawful money of the United States of America.

 

“EffectiveDate” means the date on which the conditions specified in Section 4.01are satisfied (or waived in accordance with Section 9.02).

 

“EnvironmentalLaws” means all laws, rules, regulations, codes, ordinances, orders,decrees, judgments, injunctions, notices or binding agreements issued,promulgated or entered into by any Governmental Authority, relating in any wayto the environment, preservation or reclamation of natural resources, themanagement, release or threatened release of any Hazardous Materials or tohealth and safety matters.

 

“EnvironmentalLiability” means any liability, contingent or otherwise (including anyliability for damages, costs of environmental remediation, fines, penalties orindemnities), of the Borrower or any Subsidiary directly or indirectlyresulting from or based upon (a) violation of any Environmental Law, (b) thegeneration, use, handling, transportation, storage, treatment or disposal ofany Hazardous Materials, (c) exposure to any Hazardous Materials, (d) therelease or threatened release of any Hazardous Materials into the environmentor (e) any contract, agreement or other consensual arrangement pursuant towhich liability is assumed or imposed with respect to any of the foregoing.

 

“EquityInterests” means shares of capital stock, partnership interests, membershipinterests in a limited liability company, beneficial interests in a trust orother equity ownership interests in a Person, and any warrants, options orother rights entitling the holder thereof to purchase or acquire any suchequity interest.

 

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

 

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

 

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“ERISAEvent” means (a) any “reportable event”, as defined in Section 4043of ERISA or the regulations issued thereunder with respect to a Plan (otherthan an event for which the 30-day notice period is waived); (b) theexistence with respect to any Plan of an “accumulated funding deficiency” (asdefined in Section 412 of the Code or Section 302 of ERISA), whetheror not waived; (c) the filing pursuant to Section 412(d) of theCode or Section 303(d) of ERISA of an application for a waiver of theminimum funding standard with respect to any Plan; (d) the incurrence bythe Borrower or any of its Affiliates of any liability under Title IV ofERISA with respect to the termination of any Plan; (e) the receipt by theBorrower or any ERISA Affiliate from the PBGC or a plan administrator of anynotice relating to an intention to terminate any Plan or Plans or to appoint atrustee to administer any Plan; (f) the incurrence by the Borrower or anyof its ERISA Affiliates of any liability with respect to the withdrawal orpartial withdrawal from any Plan or Multiemployer Plan; or (g) the receiptby the Borrower or any ERISA Affiliate of any notice, or the receipt by anyMultiemployer Plan from the Borrower or any ERISA Affiliate of any notice,concerning the imposition of Withdrawal Liability or a determination that aMultiemployer Plan is, or is expected to be, insolvent or in reorganization,within the meaning of Title IV of ERISA.

 

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

 

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

 

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

 

“ExcludedTaxes” means, with respect to the Administrative Agent, any Lender, or anyother recipient of any payment to be made by or on account of any obligation ofthe Borrower hereunder, (a) income or franchise taxes imposed on (ormeasured by) its net income by the United States of America, or by thejurisdiction under the laws of which such recipient is organized or in whichits principal office is located or, in the case of any Lender, in which itsapplicable lending office is located, (b) any branch profits taxes imposedby the United States of America or any similar tax imposed by any otherjurisdiction in which the Borrower is located and (c) in the case of aForeign Lender, any withholding tax that is imposed on amounts payable to suchForeign Lender at the time such Foreign Lender becomes a party to thisAgreement (or designates a new lending office) or is attributable to suchForeign Lender’s failure to comply with Section 2.16(e), except to theextent that such Foreign Lender (or its assignor, if any) was entitled at thetime of designation of a new lending office (or assignment), to receiveadditional amounts from the Borrower with respect to such withholding taxpursuant to Section 2.16(a).

 

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

 

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“Fee Letter”means the letter dated January 27, 2005 between the Borrower and theAdministrative Agent setting forth certain fees to be paid by the Borrower tothe Administrative Agent.

 

“FinancialOfficer” means the president, chief financial officer, principal accountingofficer, treasurer or controller of the Borrower.

 

“FinancingDocuments” means this Agreement (including the Schedules and Exhibitshereto), the Notes evidencing Loans, any Guarantee of the Obligations and anyother agreement hereafter created to which the Borrower or any Guarantor is aparty that relates to the obligations of the Borrower or any such Guarantorunder any of the foregoing.

 

“ForeignLender” means any Lender that is organized under the laws of a jurisdictionother than that in which the Borrower is located.  For purposes of this definition, the UnitedStates of America, each state thereof and the District of Columbia shall bedeemed to constitute a single jurisdiction.

 

“FundedDebt” of any Person means (a) all Indebtedness of such Person forborrowed money or which has been incurred in connection with the acquisition ofassets in each case having a final maturity of one or more than one year fromthe date of origin thereof (or which is renewable or extendible at the optionof the obligor for a period or periods more than one year from the date oforigin), including all payments in respect thereof that are required to be madewithin one year from the date of any determination of Funded Debt, whether ornot the obligation to make such payments shall constitute a current liabilityof the obligor under GAAP, (b) all Capitalized Rentals of such Person, and(c) all Guaranties by such Person of Funded Debt of others.

 

“GAAP”means generally accepted accounting principles in the United States of America.

 

“GovernmentalAuthority” means the government of the United States of America, any othernation or any political subdivision thereof, whether state or local, and any agency,authority, instrumentality, regulatory body, court, central bank or otherentity exercising executive, legislative, judicial, taxing, regulatory oradministrative powers or functions of or pertaining to government.

 

“Guarantee”means, with respect to any Person, any obligation (except the endorsement inthe ordinary course of business of negotiable instruments for deposit orcollection) of such Person guaranteeing or in effect guaranteeing anyIndebtedness, dividend or other obligation of any other Person in any manner,whether directly or indirectly, including (without limitation) obligationsincurred through an agreement, contingent or otherwise, by such Person:

 

##### (a)                                  to purchase suchIndebtedness or obligation or any property constituting security therefor;

#####  

##### (b)                                 to advance or supplyfunds (i) for the purchase or payment of such Indebtedness or obligation,or (ii) to maintain any working capital or other balance sheet

 

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##### condition or any incomestatement condition of any other Person or otherwise to advance or makeavailable funds for the purchase or payment of such Indebtedness or obligation;

#####  

##### (c)                                  to lease propertiesor to purchase properties or services primarily for the purpose of assuring theowner of such Indebtedness or obligation of the ability of any other Person tomake payment of the Indebtedness or obligation; or

#####  

##### (d)                                 otherwise to assurethe owner of such Indebtedness or obligation against loss in respect thereof.

#####  

Withoutlimiting the foregoing, in any computation of the Indebtedness or otherliabilities of the obligor under any Guarantee, the Indebtedness or otherobligations that are the subject of such Guarantee shall be assumed to bedirect obligations of such obligor.

 

“Guarantor”means each domestic Restricted Subsidiary now existing or hereafter created,and executing and delivering a Guarantee of the Obligations in the form of Exhibit D,but which in any event shall encompass domestic Restricted Subsidiariesrepresenting at all times not less than 85% of total assets and ConsolidatedEBITDA (computed for the Borrower and its domestic Restricted Subsidiaries) ofthe Borrower and all its domestic Restricted Subsidiaries.

 

“HazardousMaterials” means all explosive or radioactive substances or wastes and allhazardous or toxic substances, wastes or other pollutants, including petroleumor petroleum distillates, asbestos or asbestos containing materials,polychlorinated biphenyls, radon gas, infectious or medical wastes and allother substances or wastes of any nature regulated pursuant to anyEnvironmental Law.

 

“Indebtedness”with respect to any Person means, at any time, without duplication:

 

##### (a)                                  its liabilities forborrowed money, including, without limitation, deferred payments, and its redemptionobligations in respect of mandatorily redeemable Preferred Stock;

#####  

##### (b)                                 its liabilities forthe deferred purchase price of property acquired by such Person (excludingaccounts payable arising in the ordinary course of business but including allliabilities created or arising under any conditional sale or other titleretention agreement with respect to any such property);

#####  

##### (c)                                  all liabilitiesappearing on its balance sheet in accordance with GAAP in respect of CapitalLeases;

#####  

##### (d)                                 all liabilities for borrowedmoney secured by any Lien with respect to any property owned by such Person(whether or not it has assumed or otherwise become liable for suchliabilities);

#####  

##### (e)                                  all its liabilitiesin respect of letters of credit or instruments serving a similar functionissued or accepted for its account by banks and other financial

 

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##### institutions, whether or not representing obligations for borrowedmoney, but excluding any commercial letter of credit entered into in theordinary course of business by any such bank or other financial institutionrelating to the export or import of properties or any letter of credit enteredinto in the ordinary course of business by any such bank or other financialinstitution relating to the performance by such Person of its obligations underany contract or agreement (other than any note, credit, loan or other financialinstrument or like agreement);

#####  

##### (f)                                    Swaps of suchPerson; and

#####  

##### (g)                                 any Guarantee of suchPerson with respect to liabilities of a type described in any of clauses (a) through(f) hereof.

#####  

Indebtednessof any Person shall include all obligations of such Person of the characterdescribed in clauses (a) through (g) to the extent such Personremains legally liable in respect thereof notwithstanding that any suchobligation is deemed to be extinguished under GAAP.

 

“IndemnifiedTaxes” means Taxes other than Excluded Taxes.

 

“InterestElection Request” means a request by the Borrower to convert or continue aBorrowing in accordance with Section 2.07.

 

“InterestPayment Date” means (a) with respect to any ABR Loan (other than aSwingline Loan), the first day of each January, April, July and October, (b) withrespect to any Eurodollar Loan, the last day of the Interest Period applicableto the Borrowing of which such Loan is a part and, in the case of a EurodollarBorrowing with an Interest Period of more than three months’ duration, each dayprior to the last day of such Interest Period that occurs at intervals of threemonths’ duration after the first day of such Interest Period and (c) withrespect to any Swingline Loan, the day that such Loan is required to be repaid.

 

“InterestPeriod” means, with respect to any Eurodollar Borrowing, the periodcommencing on the date of such Borrowing and ending on the numericallycorresponding day in the calendar month that is one, two, three or six monthsthereafter; provided, that (i) if any Interest Period would end ona day other than a Business Day, such Interest Period shall be extended to thenext succeeding Business Day unless, such next succeeding Business Day wouldfall in the next calendar month, in which case such Interest Period shall endon the next preceding Business Day and (ii) any Interest Period thatcommences on the last Business Day of a calendar month (or on a day for whichthere is no numerically corresponding day in the last calendar month of suchInterest Period) shall end on the last Business Day of the last calendar monthof such Interest Period.  For purposeshereof, the date of a Borrowing initially shall be the date on which suchBorrowing is made and thereafter shall be the effective date of the most recentconversion or continuation of such Borrowing.

 

“InternalRevenue Code” means the Internal Revenue Code of 1986, as amended, or anysuccessor statute.

 

“IssuingBank” means JPMorgan Chase Bank, N.A., in its capacity as the issuer ofLetters of Credit hereunder.  The IssuingBank may, in its discretion, arrange for one or more

 

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Letters of Credit to be issued by Affiliates of the Issuing Bank, inwhich case the term “Issuing Bank” shall include any such Affiliate withrespect to Letters of Credit issued by such Affiliate.

 

“LCDisbursement” means a payment made by the Issuing Bank pursuant to a Letterof Credit.

 

“LCExposure” means, at any time, the sum of (a) the aggregate undrawnamount of all outstanding Letters of Credit at such time plus (b) theaggregate amount of all LC Disbursements that have not yet been reimbursed byor on behalf of the Borrower at such time. The LC Exposure of any Lender at any time shall be its pro rata (basedon its Revolving Loan Commitment) share of the total LC Exposure at such time.

 

“Lenders”means the Persons listed on Schedule 2.01 and any other Person that shallhave become a party hereto pursuant to an Assignment and Assumption, other thanany such Person that ceases to be a party hereto pursuant to an Assignment andAssumption.  Unless the context otherwiserequires, the term “Lenders” include the Swingline Lender.

 

“Letter ofCredit” means any letter of credit issued pursuant to this Agreement.

 

“LIBO Rate”means, with respect to any Eurodollar Borrowing for any Interest Period, therate appearing on Page 3750 of the Dow Jones Market Service (or on anysuccessor or substitute page of such Service, or any successor to orsubstitute for such Service, providing rate quotations comparable to thosecurrently provided on such page of such Service, as determined by theAdministrative Agent from time to time for purposes of providing quotations ofinterest rates applicable to dollar deposits in the London interbank market) atapproximately 11:00 a.m., London time, two Business Days prior to thecommencement of such Interest Period, as the rate of dollar deposits with thematurity comparable to such Interest Period. In the event that such rate is not available at such time for anyreason, then the “LIBO Rate” with respect to such Eurodollar Borrowingfor such Interest Period shall be the rate at which dollar deposits of$5,000,000 and for a maturity comparable to such Interest Period are offered bythe principal London office of the Administrative Agent in immediatelyavailable funds in the London interbank market at approximately 11:00 a.m.,London time, two Business Days prior to the commencement of such InterestPeriod.

 

“Lien”means any interest in property securing an obligation owed to, or a claim by, aPerson other than the owner of the property, whether such interest is based onthe common law, statute or contract, and including but not limited to thesecurity interest lien arising from a mortgage, encumbrance, pledge,conditional sale or trust receipt or a lease, consignment or bailment forsecurity purposes.  The term “*Lien*” shall include reservations,exceptions, encroachments, easements, rights-of-way, covenants, conditions,restrictions, leases and other title exceptions and encumbrances (including,with respect to stock, stockholder agreements, voting trust agreements, buy-backagreements and all similar arrangements) affecting property.  For the purposes of this Agreement, theBorrower or a Subsidiary shall be deemed to be the owner of any property whichit has acquired or holds subject to a conditional sale agreement, Capital Leaseor other arrangement pursuant to which title to the property has been retainedby or vested in some other Person for security purposes and such retention orvesting shall constitute a Lien.

 

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“Long-TermLease” means any lease of real or personal property (other than a CapitalLease) having an original term, including any period for which the lease may berenewed or extended at the option of the lessor, of more than three years.

 

“Loans”means the loans made by the Lenders to the Borrower pursuant to this Agreement.

 

“MaterialAdverse Effect” means a material adverse effect on (a) the business,assets, operations or financial condition of the Borrower and its Subsidiariestaken as a whole, (b) the ability of the Borrower or any Guarantor toperform any of its obligations under this Agreement and the other FinancingDocuments, taken as a whole, (c) the validity or enforceability of any ofthe Financing documents, or (d) the rights of or benefits available to theLenders or the Administrative Agent under this Agreement and the otherFinancing Documents, taken as a whole.

 

“MaterialIndebtedness” means Indebtedness (other than the Loans), or obligations inrespect of one or more Swaps, of any one or more of the Borrower or anyRestricted Subsidiary or Guarantor in an aggregate principal amount exceeding$2,500,000.

 

“MaturityDate” means March 10, 2010.

 

“MultiemployerPlan” means a multiemployer plan as defined in Section 4001(a)(3) ofERISA.

 

“Note”means any of the promissory notes executed pursuant to Section 2.09(e), asamended, modified, supplemented, renewed or extended from time to time.

 

“Obligations”means all liabilities and obligations of Borrower, whether now existing orhereafter incurred, created or arising and whether direct or indirect, absoluteor contingent, due or to become due, arising out of or in connection with thisAgreement, including, without limitation, all principal of and interest on theLoans, all fees, expenses, indemnities and other amounts payable by theBorrower under this Agreement or any other Financing Document (includinginterest accruing after the filing of a petition or commencement of a case byor with respect to the Borrower seeking relief under any applicable federal andstate laws pertaining to bankruptcy, reorganization, arrangement, moratorium,readjustment of debts, dissolution, liquidation or other debtor relief,specifically including, without limitation, the Bankruptcy Code and anyfraudulent transfer and fraudulent conveyance laws, whether or not the claimfor such interest is allowed in such proceeding).

 

“OtherTaxes” means any and all present or future stamp or documentary taxes orany other excise or property taxes, charges or similar levies arising from any paymentmade hereunder or from the execution, delivery or enforcement of, or otherwisewith respect to, this Agreement.

 

“Participant”has the meaning assigned to such term in Section 9.04 hereof.

 

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

 

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“Permits”has the meaning assigned to such term in Section 3.08(i) hereof.

 

“PermittedAcquisition” means the acquisition of all or substantially all of theassets, all or a substantial part of, a business, division, brand or productline, or all or substantially all of the stock of any Person (such Person beingthe “Target”) that is engaged in a line of business which is substantiallyrelated to that of the Borrower and with respect to which:

 

##### (a)                                  such acquisition wasapproved by each Person’s (including the Target’s) Board of Directors (or othersimilar governing body);

#####  

##### (b)                                 at the time of suchproposed acquisition and immediately after giving effect thereto, no Defaultwould exist;

#####  

##### (c)                                  the totalconsideration, (including, without limitation and without duplication, assumedIndebtedness or Preferred Stock, earnouts, purchase price adjustments, cash(including as to any non-cash portion, cash when subsequently paid), securitiesor other property and as estimated for any non-cash portion in the good-faithjudgment of the Board of Directors of the Borrower) being paid does not exceed$20,000,000 or if the total consideration exceeds $20,000,000, then only if (i) itis demonstrated to the Administrative Agent’s reasonable satisfaction that suchacquisition could reasonably be expected to make a positive contribution to theBorrower’s net profits, (ii) the contingent liabilities and environmentalmatters with respect to such acquisition are reasonably satisfactory to theAdministrative Agent, and (iii) immediately after giving effect to anysuch acquisition, the Borrower shall be in compliance with the financialcovenants set forth in Sections 6.01 through 6.05, inclusive, and Section 6.10,on a pro forma basis (all such compliance to be confirmed by an officer’scertificate in a form satisfactory to the Administrative Agent); and

#####  

##### (d)                                 the Borrower shallhave given the Administrative Agent fifteen (15) days’ prior written notice,together with all instruments, documents, certificates, Lien searches,resolutions and opinions (to the extent the Borrower receives (or provides)resolutions or opinions from (or to) the applicable Target) delivered to or bythe Borrower or a Restricted Subsidiary and such other information which theAdministrative Agent may reasonably request in connection with any suchproposed acquisition.

#####  

For purposeshereof, “pro forma basis” shall mean the recalculation of the applicablefinancial covenants as if the proposed Target (or the business related to theassets to be acquired from the proposed Target) were consolidated with theBorrower for the twelve months immediately preceding the date of such acquisition,with any Indebtedness of such acquired person which is retired in connectionwith such acquisition to be excluded from such calculations and deemed to havebeen retired as of the first day of such applicable period, with incomestatement items and other balance sheet items (whether positive or negative)attributable to such acquired person to be included in such pro formacalculations to the extent relating to any such applicable period and with suchother adjustments as may be approved by the Administrative Agent.

 

“Person”means any natural person, corporation, limited liability company, trust, jointventure, association, company, partnership, Governmental Authority or otherentity.

 

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

 

“PreferredStock” means any class of capital stock of a corporation that is preferredover any other class of capital stock of such corporation as to the payment ofdividends or the payment of any amount upon liquidation or dissolution of suchcorporation.

 

“Prime Rate”means the rate of interest per annum publicly announced from time to time byJPMorgan Chase Bank, N.A. as its prime rate in effect at its principal officein New York City; each change in the Prime Rate shall be effective from andincluding the date such change is publicly announced as being effective.

 

“Register”has the meaning set forth in Section 9.04.

 

“RegulationU” means Regulation U of the Board, as the same is from time to time ineffect, and all official rulings and interpretations thereunder or thereof.

 

“RelatedParties” means, with respect to any specified Person, such Person’sAffiliates and the respective directors, officers, employees, agents andadvisors of such Person and such Person’s Affiliates.

 

“Rentals”means and include as of the date of any determination thereof all fixedpayments (including as such all payments which the lessee is obligated to maketo the lessor on termination of the lease or surrender of the property) payableby the Borrower or a Restricted Subsidiary, as lessee or sublessee under alease of real or personal property, but shall be exclusive of any amountsrequired to be paid by the Borrower or a Restricted Subsidiary (whether or notdesignated as rents or additional rents) on account of maintenance, repairs,insurance, taxes and similar charges.

 

“RequiredLenders” means, at any time, Lenders having Revolving Credit Exposure andunused Commitments representing at least 51% of the sum of the total RevolvingCredit Exposures and unused Commitments at such time, all after giving effectto the terms of Section 2.17(e).

 

“ResponsibleOfficer” means any Senior Financial Officer and any other officer of theBorrower with responsibility for the administration of the relevant portion ofthis Agreement.

 

“RestrictedPayment” means any dividend or other distribution (whether in cash,securities or other property) with respect to any Equity Interests in the Borroweror any Subsidiary, or any payment (whether in cash, securities or otherproperty), including any sinking fund or similar deposit, on account of thepurchase, redemption, retirement, acquisition, cancellation or termination ofany such Equity Interests or any option, warrant or other right to acquire anysuch Equity Interests.

 

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“RestrictedSubsidiary” means any Subsidiary (a) of which more than 80% (by numberof votes) of the Equity Interests with voting power is beneficially owned,directly or indirectly, by the Borrower and (b) if applicable, as sodesignated within the limitations of Section 6.07.

 

“RevolvingCredit Commitment Fee” has the meaning set forth in Section 2.11(a).

 

“RevolvingCredit Exposure” means, with respect to any Lender at any time, the sum ofthe outstanding principal amount of such Lender’s Revolving Loans and its LCExposure and Swingline Exposure at such time.

 

“RevolvingLoan” means a Loan made pursuant to Section 2.03.

 

“RevolvingLoan Commitment” means, with respect to each Lender, the commitment of suchLender to make Revolving Loans and to acquire participations in Letters ofCredit and Swingline Loans hereunder, expressed as an amount representing themaximum aggregate amount of such Lender’s Revolving Credit Exposure hereunder,as such commitment may be (a) increased pursuant to Section 2.08(d), (b) reducedfrom time to time pursuant to Section 2.08(b) and (c) reduced orincreased from time to time pursuant to assignments by or to such Lenderpursuant to Section 9.04.  Theinitial amount of each Lender’s Revolving Loan Commitment is set forth on Schedule 2.01,or in the Assignment and Assumption pursuant to which such Lender shall haveassumed its Revolving Loan Commitment, as applicable.  The initial aggregate amount of the Lenders’Revolving Loan Commitments is $150,000,000. Effective upon the assignment of an interest pursuant to Section 9.04,Schedule 2.01 may be amended by the Administrative Agent to reflect suchassignment.

 

“Sale andLeaseback Transaction” shall have the meaning ascribed thereto in Section 6.04.

 

“SEC”is defined in Section 5.01(a);

 

“SecuritiesAct” means the Securities Act of 1933, as amended from time to time.

 

“SeniorFinancial Officer” means the chief financial officer, principal accountingofficer or treasurer of the Borrower.

 

“SeniorFunded Debt” means all Funded Debt of the Borrower which is not expressedto be subordinate or junior in rank to any other Funded Debt of the Borrower.

 

“Senior NoteAgreement” means the Note Purchase Agreement dated as of November 1,1998 between the Borrower and the note purchasers described therein.

 

“StatutoryReserve Rate” means a fraction (expressed as a decimal), the numerator ofwhich is the number one and the denominator of which is the number one minusthe aggregate of the maximum reserve percentages (including any marginal,special, emergency or supplemental reserves) expressed as a decimal establishedby the Board to which the Administrative Agent is subject with respect to theAdjusted LIBO Rate, for eurocurrency funding (currently referred to as “EurocurrencyLiabilities” in Regulation D of the Board).  Such

 

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reserve percentages shall include those imposed pursuant to suchRegulation D.  Eurodollar Loansshall be deemed to constitute eurocurrency funding and to be subject to suchreserve requirements without benefit of or credit for proration, exemptions oroffsets that may be available from time to time to any Lender under suchRegulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as ofthe effective date of any change in any reserve percentage.

 

“Subsidiary”means, as to any Person, any corporation, association or other business entityin which such Person or one or more of its Subsidiaries or such Person and oneor more of its Subsidiaries owns sufficient equity or voting interests toenable it or them (as a group) ordinarily, in the absence of contingencies, toelect a majority of the directors (or Persons performing similar functions) ofsuch entity, and any partnership or joint venture if more than a 50% interestin the profits or capital thereof is owned by such Person or one or more of itsSubsidiaries or such Person and one or more of its Subsidiaries (unless suchpartnership can and does ordinarily take major business actions without theprior approval of such Person or one or more of its Subsidiaries).  Unless the context otherwise clearly requires,any reference to a “Subsidiary” is a reference to a Subsidiary of the Borrower.

 

“Swaps”means, with respect to any Person, payment obligations with respect to interestrate swaps, currency swaps and similar obligations obligating such Person tomake payments, whether periodically or upon the happening of a contingency; providedthat Swaps entered into by such Person in the ordinary course of business forthe sole purpose of managing or hedging risk shall not be deemed or construedto constitute Indebtedness within the terms of this Agreement.  Without limiting the foregoing, the amount ofthe obligation under any Swap shall be the amount determined in respect thereofas of the end of the then most recently ended fiscal quarter of such Person,based on the assumption that such Swap had terminated at the end of such fiscalquarter, and in making such determination, if any agreement relating to suchSwap provides for the netting of amounts payable by and to such Personthereunder or if any such agreement provides for the simultaneous payment ofamounts by and to such Person, then in each such case, the amount of suchobligation shall be the net amount so determined.

 

“SwinglineExposure” means, at any time, the aggregate principal amount of allSwingline Loans outstanding at such time. The Swingline Exposure of any Lender at any time shall be its pro rata(based on its Revolving Loan Commitment) share of the total Swingline Exposureat such time.

 

“SwinglineLender” means JPMorgan Chase Bank, N.A. in its capacity as lender ofSwingline Loans hereunder.

 

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

 

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

 

“Transactions”means the execution, delivery and performance by the Borrower of thisAgreement, the borrowing of Loans, the use of the proceeds thereof and theissuance of Letters of Credit hereunder.

 

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

 

“UnrestrictedSubsidiary” means any Subsidiary which is not a Restricted Subsidiary and,if applicable, as has been designated as such within the limitations of Section 6.07.

 

“Wholly-ownedRestricted Subsidiary” means, at any time, any Restricted Subsidiary onehundred percent (100%) of all of the Equity Interests (except directors’qualifying shares) and voting interests of which are owned by any one or moreof the Borrower and the Borrower’s other Wholly-owned Restricted Subsidiariesat such time.

 

“Wholly-ownedSubsidiary” means, at any time, any Subsidiary one hundred percent (100%)of all of the Equity Interests (except directors’ qualifying shares) and votinginterests of which are owned by any one or more of the Borrower and theBorrower’s other Wholly-owned Subsidiaries at such time.

 

“WithdrawalLiability” means liability to a Multiemployer Plan as a result of acomplete or partial withdrawal from such Multiemployer Plan, as such terms aredefined in Part I of Subtitle E of Title IV of ERISA.

 

Section 1.02.                             Classificationof Loans and Borrowings.  Forpurposes of this Agreement, Loans may be classified and referred to by Class (e.g.,a “Revolving Loan” or by Type (e.g., a “Eurodollar Loan”) or by Class andType (e.g., a “Eurodollar Revolving Loan”).  Borrowings also may be classified andreferred to by Class (e.g., a “Revolving Borrowing”) or by Type(e.g., an “ABR Borrowing”) or by Class and Type (e.g., a “EurodollarRevolving Borrowing”).

 

Section 1.03.                             TermsGenerally.  The definitions of termsherein shall apply equally to the singular and plural forms of the termsdefined.  Whenever the context mayrequire, any pronoun shall include the corresponding masculine, feminine andneuter forms.  The words “include”, “includes”and “including” shall be deemed to be followed by the phrase “withoutlimitation”.  The word “will” shall beconstrued to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) anydefinition of or reference to any agreement, instrument or other document hereinshall be construed as referring to such agreement, instrument or other documentas from time to time amended, supplemented or otherwise modified (subject toany restrictions on such amendments, supplements or modifications set forthherein), (b) any reference herein to any Person shall be construed toinclude such Person’s successors and assigns, (c) the words “herein”, “hereof’and “hereunder”, and words of similar import, shall be construed to refer tothis Agreement in its entirety and not to any particular provision hereof, (d) allreferences herein to Articles, Sections, Exhibits and Schedules shall beconstrued to refer to Articles and Sections of, and Exhibits and Schedules to,this Agreement and (e) the words “asset” and “property” shall be construedto have the same meaning and effect and to refer to any and all tangible andintangible assets and properties, including cash, securities, accounts andcontract rights.

 

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Section 1.04.                             AccountingTerms; GAAP.  Except as otherwiseexpressly provided herein, all terms of an accounting or financial nature shallbe construed in accordance with GAAP, as in effect from time to time; providedthat, if the Borrower notifies the Administrative Agent that the Borrowerrequests an amendment to any provision hereof to eliminate the effect of anychange occurring after the date hereof in GAAP or in the application thereof onthe operation of such provision (or if the Administrative Agent notifies theBorrower that the Required Lenders request an amendment to any provision hereoffor such purpose), regardless of whether any such notice is given before orafter such change in GAAP or in the application thereof, then such provisionshall be interpreted on the basis of GAAP as in effect and applied immediatelybefore such change shall have become effective until such notice shall havebeen withdrawn or such provision amended in accordance herewith.  In calculating compliance with any of thefinancial covenants (and related definitions), any amounts taken into accountin making such calculations that were paid, incurred or accrued in violation ofany provision of this Agreement shall be added back or deducted, as applicable,in order to determine compliance with such covenants.

 

ARTICLE II

 

The Credits

 

Section 2.01.                             Commitments.  Subject to the terms and conditions set forthherein, each Lender agrees to make Revolving Loans to the Borrower from time totime during the Availability Period in an aggregate principal amount that willnot result in such Lender’s Revolving Credit Exposure exceeding such Lender’sRevolving Loan Commitment.  Subject tothe foregoing and within the foregoing limits, the Borrower may borrow, repay(or prepay) and reborrow Revolving Loans, on and after the date hereof throughthe Availability Period, subject to the terms, provisions and limitations setforth herein, including, without limitation, the requirement that no RevolvingLoan shall be made hereunder if the amount thereof exceeds the Availabilityoutstanding at such time (in each case, after giving effect to the applicationsof the proceeds of such Revolving Loan).

 

Section 2.02.                             Loansand Borrowings.  (a)  EachLoan shall be made as part of a Borrowing consisting of Revolving Loans made bythe Lenders ratably in accordance with their respective Revolving LoanCommitments.  The failure of any Lenderto make any Loan required to be made by it shall not relieve any other Lenderof its obligations hereunder; provided that the Revolving Loan Commitmentsof the Lenders are several and no Lender shall be responsible for any otherLender’s failure to make Loans as required.

 

### (b)                                 Subjectto Sections 2.07(e) and 2.13, each Borrowing shall be comprisedentirely of ABR Loans or Eurodollar Loans as the Borrower may request inaccordance herewith.  Each Swingline Loanshall be an ABR Loan.  Each Lender at itsoption may make any Eurodollar Loan by causing any domestic or foreign branchor Affiliate of such Lender to make such Loan; provided that anyexercise of such option shall not affect the obligation of the Borrower torepay such Loan in accordance with the terms of this Agreement.

 

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### (c)                                  Atthe commencement of each Interest Period for any Eurodollar RevolvingBorrowing, such Borrowing shall be in a minimum amount of $5,000,000 and anaggregate amount that is an integral multiple of $100,000.  At the time that each ABR Revolving Borrowingis made, such Borrowing shall be in an aggregate amount that is an integralmultiple of $100,000 and not less than $5,000,000; provided that an ABRRevolving Borrowing may be in an aggregate amount that is equal to the entireunused balance of the total Revolving Loan Commitments.  Borrowings of more than one Type and Class maybe outstanding at the same time; provided that there shall not at anytime be more than a total of five (5) Eurodollar Revolving Borrowingsoutstanding.

###  

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

###  

Section 2.03.                             Requestsfor Borrowings.  To request aBorrowing, the Borrower shall notify the Administrative Agent of such requestby writing, facsimile or telephone (a) in the case of a EurodollarBorrowing, not later than 1:00 pm, New York City time, three Business Daysbefore the date of the proposed Borrowing or (b) in the case of an ABRBorrowing, not later than 1:00 pm (or 10:00 am, if financing thereimbursement of an LC Disbursement as contemplated by Section 2.05(e) hereof),New York City time, on the same Business Day of the proposed Borrowing.  Each such Borrowing Request shall beirrevocable and if given by telephone shall be confirmed promptly by writing orfax to the Administrative Agent of a written Borrowing Request in a formapproved by the Administrative Agent and signed by an authorized signer of theBorrower.  Each such telephonic andwritten Borrowing Request shall specify the following information in compliancewith Section 2.02:

 

##### (a)                                  the aggregate amountof the requested Borrowing;

#####  

##### (b)                                 the date of suchBorrowing, which shall be a Business Day;

#####  

##### (c)                                  whether suchBorrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

#####  

##### (d)                                 in the case of aEurodollar Borrowing, the initial Interest Period to be applicable thereto,which shall be a period contemplated by the definition of the term “InterestPeriod”; and

#####  

##### (e)                                  the location andnumber of the Borrower’s account to which funds are to be disbursed, whichshall comply with the requirements of Section 2.04.

#####  

If no electionas to the Type of Borrowing is specified, then the requested Borrowing shall bean ABR Borrowing.  If no Interest Periodis specified with respect to any requested Eurodollar Borrowing, then theBorrower shall be deemed to have selected an Interest Period of one month’sduration.  Promptly following receipt ofa Borrowing Request in accordance with this Section, the Administrative Agentshall advise each applicable Lender of the details thereof and of the amount ofsuch Lender’s Loan to be made as part of the requested Borrowing.

 

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Section 2.04.                             SwinglineLoans.  (a)  Subject to theterms and conditions set forth herein, the Swingline Lender agrees to makeSwingline Loans to the Borrower from time to time during the AvailabilityPeriod, in an aggregate principal amount at any time outstanding that will notresult in (i) the aggregate principal amount of outstanding SwinglineLoans exceeding $10,000,000 or (ii) Availability being less than zero; providedthat the Swingline Lender shall not be required to make a Swingline Loan torefinance an outstanding Swingline Loan. Within the foregoing limits and subject to the terms and conditions setforth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.

 

### (b)                                 Torequest a Swingline Loan, the Borrower shall notify the Administrative Agent ofsuch request by telephone (confirmed by telecopy), not later than 1:00 pm,New York City time, on the day of a proposed Swingline Loan.  Each such notice shall be irrevocable andshall specify the requested date (which shall be a Business Day) and amount ofthe requested Swingline Loan.  TheAdministrative Agent will promptly advise the Swingline Lender of any suchnotice received from the Borrower.  TheSwingline Lender shall make each Swingline Loan available to the Borrower bymeans of a credit to the general deposit account of the Borrower with theSwingline Lender (or, in the case of a Swingline Loan made to finance thereimbursement of an LC Disbursement as provided in Section 2.05(e), byremittance to the Issuing Bank) by 3:00 pm, New York City time, on therequested date of such Swingline Loan.

###  

### (c)                                  TheSwingline Lender may by written notice given to the Administrative Agent notlater than 1:00 pm, New York City time, on any Business Day require the Lendersto acquire participations on such Business Day in all or a portion of theSwingline Loans outstanding.  Such noticeshall specify the aggregate amount of Swingline Loans in which Lenders willparticipate.  Promptly upon receipt ofsuch notice, the Administrative Agent will give notice thereof to each Lender,specifying in such notice such Lender’s pro rata (based on its Revolving LoanCommitment) of such Swingline Loan or Loans. Each Lender hereby absolutely and unconditionally agrees, upon receiptof notice as provided above, to pay to the Administrative Agent, for theaccount of the Swingline Lender, such Lender’s pro rata (based on its RevolvingCredit Commitment) share of such Swingline Loan or Loans.  Each Lender acknowledges and agrees that itsobligation to acquire participations in Swingline Loans pursuant to thisparagraph is absolute and unconditional and shall not be affected by anycircumstance whatsoever, including the occurrence and continuance of a Defaultor reduction or termination of the Commitments, and that each such paymentshall be made without any offset, abatement, withholding or reductionwhatsoever.  Each Lender shall complywith its obligation under this paragraph by wire transfer of immediatelyavailable funds, in the same manner as provided in Section 2.06 withrespect to Loans made by such Lender (and Section 2.06 shall apply, mutatismutandis, to the payment obligations of the Lenders), and theAdministrative Agent shall promptly pay to the Swingline Lender the amounts soreceived by it from the Lenders.  TheAdministrative Agent shall notify the Borrower of any participations in anySwingline Loan acquired pursuant to this paragraph, and thereafter payments inrespect of such Swingline Loan shall be made to the Administrative Agent andnot to the Swingline Lender.  Any amountsreceived by the Swingline Lender from the Borrower (or other party on behalf ofthe Borrower) in respect of a Swingline Loan after receipt by the SwinglineLender of the proceeds of a sale of participations therein shall be promptlyremitted to the Administrative Agent; any such amounts received by theAdministrative Agent shall be promptly remitted by the Administrative Agent tothe Lenders that shall have made their payments pursuant to this

 

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### paragraph and to the SwinglineLender, as their interests may appear; provided that any such payment soremitted shall be repaid to the Swingline Lender or to the AdministrativeAgent, as applicable, if and to the extent such payment is required to berefunded to the Borrower for any reason. The purchase of participations in a Swingline Loan pursuant to thisparagraph shall not relieve the Borrower of any default in the payment thereof.

###  

Section 2.05.                             Lettersof Credit.  (a)  General.  Subject to the terms and conditions set forthherein, the Borrower may request the issuance of Letters of Credit for its ownaccount, in a form reasonably acceptable to the Administrative Agent and theIssuing Bank, at any time and from time to time during the AvailabilityPeriod.  In the event of anyinconsistency between the terms and conditions of this Agreement and the termsand conditions of any form of letter of credit application or other agreementsubmitted by the Borrower to, or entered into by the Borrower with, the IssuingBank relating to any Letter of Credit, the terms and conditions of thisAgreement shall control.

 

### (b)                                 Noticeof Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a Letter of Credit(or the amendment, renewal or extension of an outstanding Letter of Credit),the Borrower shall hand deliver or telecopy (or transmit by electroniccommunication, if arrangements for doing so have been approved by the IssuingBank) to the Issuing Bank and the Administrative Agent (reasonably in advanceof the requested date of issuance, amendment, renewal or extension) a noticerequesting the issuance of a Letter of Credit, or identifying the Letter ofCredit to be amended, renewed or extended, and specifying the date of issuance,amendment, renewal or extension (which shall be a Business Day), the date onwhich such Letter of Credit is to expire (which shall comply withparagraph (c) of this Section), the amount of such Letter of Credit,the name and address of the beneficiary thereof and such other information asshall be necessary to prepare, amend, renew or extend such Letter ofCredit.  If requested by the IssuingBank, the Borrower also shall submit a letter of credit application on theIssuing Bank’s standard form in connection with any request for a Letter ofCredit.  A Letter of Credit shall beissued, amended, renewed or extended only if (and upon issuance, amendment,renewal or extension of each Letter of Credit the Borrower shall be deemed torepresent and warrant that), after giving effect to such issuance, amendment,renewal or extension (i) the LC Exposure shall not exceed $150,000,000 and(ii) after giving effect to the issuance, amendment, renewal or extensionof such Letter of Credit, Availability shall not be less than zero.

###  

### (c)                                  ExpirationDate.  Each Letter of Credit shallexpire at or prior to the close of business on the earlier of (i) the dateone year after the date of issuance of such Letter of Credit (or, in the caseof any renewal or extension thereof, one year after such renewal or extension);provided that a Letter of Credit may provide that its expiration dateshall be automatically extended (but not beyond the date specified inclause (ii) below) to a date not more than one year after the thenoutstanding expiration date unless, at least a specified number of days priorto such then existing expiration date, the Issuing Bank shall have given thebeneficiary thereof notice, in a form that may be specified in such Letter ofCredit, that such expiration date shall not be so extended, and (ii) adate that is no more than six months after the Maturity Date (provided that atleast thirty Business Days prior to the Maturity Date the Borrower hasdeposited with the Administrative Agent cash collateral in an amount equal tothe applicable LC Exposure).

 

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### (d)                                 Participations.  By the issuance of a Letter of Credit (or anamendment to a Letter of Credit increasing the amount thereof) and without anyfurther action on the part of the Issuing Bank or the Lenders, the Issuing Bankhereby grants to each Lender, and each Lender hereby acquires from the IssuingBank, a participation in such Letter of Credit equal to such Lender’s pro rata(based on its Revolving Loan Commitment) portion of the aggregate amountavailable to be drawn under such Letter of Credit.  In consideration and in furtherance of theforegoing, each Lender hereby absolutely and unconditionally agrees to pay tothe Administrative Agent, for the account of the Issuing Bank, such Lender’spro rata (based on its Revolving Credit Commitment) portion of each LCDisbursement made by the Issuing Bank and not reimbursed by the Borrower on thedate due as provided in paragraph (e) of this Section, or of anyreimbursement payment required to be refunded to the Borrower for anyreason.  Each Lender acknowledges andagrees that its obligation to acquire participations pursuant to this paragraphin respect of Letters of Credit is absolute and unconditional and shall not beaffected by any circumstance whatsoever, including any amendment, renewal orextension of any Letter of Credit or the occurrence and continuance of aDefault or reduction or termination of the Commitments, and that each suchpayment shall be made without any offset, abatement, withholding or reductionwhatsoever.

###  

### (e)                                  Reimbursement.  If the Issuing Bank shall make any LCDisbursement in respect of a Letter of Credit, the Borrower shall reimbursesuch LC Disbursement by paying to the Administrative Agent an amount equal tosuch LC Disbursement not later than 3:00 pm, New York City time, on thedate that such LC Disbursement is made, if the Borrower shall have receivednotice of such LC Disbursement prior to 1:00 pm, New York City time, onsuch date, or, if such notice has not been received by the Borrower prior tosuch time on such date, then not later than 2:00 pm, New York City time,on (i) the Business Day that the Borrower receives such notice, if suchnotice is received prior to 1:00 pm, New York City time, on the day ofreceipt, or (ii) the Business Day immediately following the day that theBorrower receives such notice, if such notice is not received prior to suchtime on the date of receipt; provided that, if such LC Disbursement isnot less than $100,000, the Borrower may, subject to the conditions toborrowing set forth herein, request in accordance with Section 2.03 or2.04 that such payment be financed with an ABR Revolving Borrowing or SwinglineLoan in an equivalent amount and, to the extent so financed, the Borrower’sobligation to make such payment shall be discharged and replaced by theresulting ABR Revolving Borrowing or Swingline Loan.  If the Borrower fails to make such paymentwhen due, the Administrative Agent shall notify each Lender of the applicableLC Disbursement, the payment then due from the Borrower in respect thereof andsuch Lender’s pro rata (based on its Revolving Loan Commitment) portionthereof.  Promptly following receipt ofsuch notice, each Lender shall pay to the Administrative Agent its pro rata(based on its Revolving Credit Commitment) portion of the payment then due fromthe Borrower, in the same manner as provided in Section 2.06 with respectto Loans made by such Lender (and Section 2.06 shall apply, mutatismutandis, to the payment obligations of the Lenders), and theAdministrative Agent shall promptly pay to the Issuing Bank the amounts soreceived by it from the Lenders. Promptly following receipt by the Administrative Agent of any paymentfrom the Borrower pursuant to this paragraph, the Administrative Agent shalldistribute such payment to the Issuing Bank or, to the extent that Lenders havemade payments pursuant to this paragraph to reimburse the Issuing Bank, then tosuch Lenders and the Issuing Bank as their interests may appear.  Any payment made by a Lender pursuant to thisparagraph to reimburse the Issuing Bank for any LC Disbursement (other than thefunding of ABR Revolving Loans as

 

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### contemplated above) shall notconstitute a Loan and shall not relieve the Borrower of its obligation toreimburse such LC Disbursement.

###  

### (f)                                    ObligationsAbsolute.  The Borrower’s obligationto reimburse LC Disbursements as provided in paragraph (e) of this Section shall,to the fullest extent permitted under applicable law, be absolute,unconditional and irrevocable, and shall be performed strictly in accordancewith the terms of this Agreement under any and all circumstances whatsoever andirrespective of (i) any lack of validity or enforceability of any Letterof Credit or this Agreement, or any term or provision therein, (ii) anydraft or other document presented under a Letter of Credit proving to beforged, fraudulent or invalid in any respect or any statement therein beinguntrue or inaccurate in any respect (other than under circumstances whichconstitute gross negligence or willful misconduct on the part of the IssuingBank as finally determined by a court of competent jurisdiction), (iii) paymentof the Issuing Bank under a Letter of Credit against presentation of a draft orother document that does not comply with the terms of such Letter of Credit(other than under circumstances which constitute gross negligence or willfulmisconduct on the part of the Issuing Bank as finally determined by a court ofcompetent jurisdiction), or (iv) any other event or circumstancewhatsoever, whether or not similar to any of the foregoing, that might, but forthe provisions of this Section, constitute a legal or equitable discharge of,or provide a right of setoff against, the Borrower’s obligationshereunder.  Neither the AdministrativeAgent, the Lenders nor the Issuing Bank, nor any of their Related Parties,shall have any liability or responsibility by reason of or in connection withthe issuance or transfer of any Letter of Credit or any payment or failure tomake any payment thereunder (irrespective of any of the circumstances referredto in the preceding sentence), or any error, omission, interruption, loss ordelay in transmission or delivery of any draft, notice or other communicationunder or relating to any Letter of Credit (including any document required tomake a drawing thereunder), any error in interpretation of technical terms orany consequence arising from causes beyond the control of the Issuing Bank; providedthat the foregoing shall not be construed to excuse the Issuing Bank fromliability to the Borrower to the extent of any direct damages (as opposed toconsequential damages, claims in respect of which are hereby waived by theBorrower to the extent permitted by applicable law) suffered by the Borrowerthat are caused by the Issuing Bank’s failure to exercise care when determiningwhether drafts and other documents presented under a Letter of Credit complywith the terms thereof.  The partieshereto expressly agree that, in the absence of gross negligence or wilfulmisconduct on the part of the Issuing Bank (as finally determined by a court ofcompetent jurisdiction), the Issuing Bank shall be deemed to have exercisedcare in each such determination.  Infurtherance of the foregoing and without limiting the generality thereof, theparties agree that, with respect to documents presented which appear on theirface to be in compliance with the terms of a Letter of Credit, the Issuing Bankmay, in its sole discretion, either accept and make payment upon such documentswithout responsibility for further investigation, regardless of any notice orinformation to the contrary, or refuse to accept and make payment upon suchdocuments if such documents are not in strict compliance with the terms of suchLetter of Credit.

###  

### (g)                                 DisbursementProcedures.  The Issuing Bank shall,promptly following its receipt thereof, examine all documents purporting torepresent a demand for payment under a Letter of Credit.  The Issuing Bank shall promptly notify theAdministrative Agent and the Borrower by telephone (confirmed by telecopy) ofsuch demand for payment and whether the Issuing Bank has made or will make anLC Disbursement thereunder; provided that any failure

 

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### to give or delay in giving suchnotice shall not relieve the Borrower of its obligation to reimburse theIssuing Bank and the Lenders with respect to any such LC Disbursement.

###  

### (h)                                 InterimInterest.  If the Issuing Bank shallmake any LC Disbursement, then, unless the Borrower shall reimburse such LCDisbursement in full on the date such LC Disbursement is made, the unpaidamount thereof shall bear interest, for each day from and including the datesuch LC Disbursement is made to but excluding the date that the Borrowerreimburses such LC Disbursement, at the rate per annum then applicable to ABRRevolving Loans; provided that, if the Borrower fails to reimburse suchLC Disbursement when due pursuant to paragraph (e) of this Section,then Section 2.12(c) shall apply. Interest accrued pursuant to this paragraph shall be for the account ofthe Issuing Bank, except that interest accrued on and after the date of paymentby any Lender pursuant to paragraph (c) of this Section toreimburse the Issuing Bank shall be for the account of such Lender to theextent of such payment.

###  

Section 2.06.                             Fundingof Borrowings.  (a)  EachLender shall make each Loan to be made by it hereunder on the proposed datethereof by wire transfer of immediately available funds by 2:00 pm, NewYork City time, to the account of the Administrative Agent most recentlydesignated by it for such purpose by notice to the Lenders.  The Administrative Agent will make such Loansavailable to the Borrower by promptly crediting the amount so received, in likefunds, to an account maintained with Union Bank of California or such otherdeposit taking financial institution as the Borrower may designate to theAdministrative Agent upon not less than three Business Days’ prior notice;provided that Loans made to finance the reimbursement of an LC Disbursement asprovided in Section 2.05(e) shall be remitted by the AdministrativeAgent to the Issuing Bank.

 

### (b)                                 Unlessthe Administrative Agent shall have received notice from a Lender prior to theproposed date of any Borrowing that such Lender will not make available to theAdministrative Agent such Lender’s share of such Borrowing, the AdministrativeAgent may assume that such Lender has made such share available on such date inaccordance with paragraph (a) of this Section and may, inreliance upon such assumption, make available to the Borrower a correspondingamount.  In such event, if a Lender hasnot in fact made its share of the applicable Borrowing available to theAdministrative Agent, then the applicable Lender and the Borrower severallyagree to pay to the Administrative Agent forthwith on demand such correspondingamount with interest thereon, for each day from and including the date suchamount is made available to the Borrower to but excluding the date of paymentto the Administrative Agent, at (i) in the case of such Lender, thegreater of the Federal Funds Effective Rate and a rate determined by theAdministrative Agent in accordance with banking industry rules oninterbank compensation or (ii) in the case of the Borrower, the interestrate applicable to ABR Loans.  If suchLender pays such amount to the Administrative Agent, then the Borrower shall berelieved of its obligation to pay the corresponding amount to theAdministrative Agent and such amount shall constitute such Lender’s Loanincluded in such Borrowing.

###  

Section 2.07.                             InterestElections.  (a)  AnyBorrowing on the Effective Date shall be at the Alternate Base Rate andthereafter shall be of the Type specified in the applicable Borrowing Requestand, in the case of a Eurodollar Borrowing, shall have an initial InterestPeriod as specified in such Borrowing Request. The Borrower may elect to convert such

 

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Borrowing to a different Type or to continue suchBorrowing and, in the case of a Eurodollar Borrowing, may elect InterestPeriods therefor, all as provided in this Section.  The Borrower may elect different options withrespect to different portions of the affected Borrowing, in which case eachsuch portion shall be allocated ratably among the Lenders holding the Loanscomprising such Borrowing, and the Loans comprising each such portion shall beconsidered a separate Borrowing.  This Section shallnot apply to Swingline Loans, which may not be converted or continued.

 

### (b)                                 Tomake an election pursuant to this Section, the Borrower shall notify theAdministrative Agent of such election in writing or by facsimile transmissionor by telephone (confirmed in writing or by fax) by the time that a BorrowingRequest would be required under Section 2.03 if the Borrower wererequesting a Borrowing of the Type resulting from such election to be made onthe effective date of such election. Each such telephonic Interest Election Request shall be irrevocable andshall be confirmed promptly by hand delivery or telecopy to the AdministrativeAgent of a written Interest Election Request in a form approved by theAdministrative Agent and signed by the Borrower.

###  

### (c)                                  Eachtelephonic and written Interest Election Request shall specify the followinginformation in compliance with Section 2.02;

###  

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

######  

###### (ii)                                  the effective date ofthe election made pursuant to such Interest Election Request, which shall be aBusiness Day;

######  

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

######  

###### (iv)                              if the resultingBorrowing is a Eurodollar Borrowing, the Interest Period to be applicablethereto after giving effect to such election, which shall be a periodcontemplated by the definition of the term “Interest Period”.

######  

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

 

### (d)                                 Promptlyfollowing receipt of an Interest Election Request, the Administrative Agentshall advise each applicable Lender of the details thereof and of such Lender’sportion of each resulting Borrowing.

###  

### (e)                                  Ifthe Borrower fails to deliver a timely Interest Election Request with respectto a Eurodollar Borrowing prior to the end of the Interest Period applicablethereto, then, unless such Borrowing is repaid as provided herein, at the endof such Interest Period such Borrowing shall be converted to an ABRBorrowing.  Notwithstanding any contraryprovision

 

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### hereof, if an Event of Defaulthas occurred and is continuing and the Administrative Agent, at the request ofthe Required Lenders, so notifies Borrower, then, so long as an Event ofDefault is continuing (i) no request may be made for a EurodollarBorrowing and no outstanding Borrowing may be converted to or continued as aEurodollar Borrowing and (ii) each Eurodollar Borrowing, unless repaid asprovided herein, shall be converted to an ABR Borrowing at the end of the InterestPeriod applicable thereto.

###  

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

 

### (b)                                 TheBorrower may at any time terminate, or from time to time reduce, the RevolvingLoan Commitments; provided that each reduction of the Revolving LoanCommitments shall be in an amount that is an integral multiple of $100,000 andnot less than $5,000,000.

###  

### (c)                                  TheBorrower shall notify the Administrative Agent of any election to terminate orreduce the Revolving Loan Commitments under paragraph (b) of this Section atleast three Business Days prior to the effective date of such termination orreduction, specifying such election and the effective date thereof.  Promptly following receipt of any notice, theAdministrative Agent shall advise the applicable Lenders of the contentsthereof.  Each notice delivered by theBorrower pursuant to this Section shall be irrevocable; providedthat a notice of termination of the Revolving Loan Commitments delivered by theBorrower may state that such notice is conditioned upon the effectiveness ofother credit facilities, in which case such notice may be revoked by theBorrower (by notice to the Administrative Agent on or prior to the specifiedeffective date) if such condition is not satisfied.  Any termination or reduction of the RevolvingLoan Commitments shall be permanent. Each reduction of the Revolving Loan Commitments shall be made ratablyamong the Lenders with Revolving Loan Commitments in accordance with theirrespective Revolving Loan Commitments.

###  

### (d)                                 TheBorrower may at any time prior to the fourth anniversary of the Effective Date,by written notice to the Administrative Agent, and with the consent of theRequired Lenders, request that the Administrative Agent increase the totalRevolving Loan Commitments (a “Revolver Increase”) by (i) addingone or more new lenders to the revolving credit facility under this Agreement(each a “New Lender”) who wish to participate in such Revolver Increaseand/or (ii) increasing the Revolving Loan Commitments of one or moreLenders party to this Agreement who wish to participate in such RevolverIncrease; provided, however, that (w) no Default or Event ofDefault shall have occurred and be continuing as of the date of such request oras of the effective date of such Revolver Increase (the “Increase Date”)or shall occur as a result thereof, (x) any New Lender that becomes partyto this Agreement pursuant to this Section 2.08(d) shall satisfy therequirements of Section 9.04(b) hereof and shall be acceptable to theAdministrative Agent and consented to by the Borrower and (y) the otherconditions set forth in this Section 2.08(e) below aresatisfied.  The Administrative Agentshall use commercially reasonable efforts to arrange for the syndication of anyRevolver Increase.  The AdministrativeAgent shall promptly inform the Lenders of any such request made by theBorrower.  The aggregate amount ofRevolver Increases shall not exceed $50,000,000 and no single such RevolverIncrease shall be for an amount less than $1,000,000.

 

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### (e)                                  Oneach Increase Date, (i) each New Lender that has chosen to participate insuch Revolver Increase shall, subject to the conditions set forth in Section 2.08(d) hereof,become a Lender party to this Agreement as of such Increase Date and shall havea Revolving Loan Commitment in an amount equal to its share of the RevolverIncrease and (ii) each Lender that has chosen to increase its Commitmentpursuant to Section 2.08(d) will have its Revolving Loan Commitmentincreased by the amount of its share of the Revolver Increase as of suchIncrease Date; provided, however, that the Administrative Agentshall have (y) received from the Borrower all out-of-pocket costs andexpenses incurred by the Administrative Agent or any Lender in connection withsuch Revolver Increase and (z) received on or before such Increase Datethe following, each dated such date:

###  

###### (i)                                     certified copiesof resolutions of the governing body of the Borrower approving the RevolverIncrease and the corresponding modifications, if any, to the FinancingDocuments required under subclause (vi) below, together with acertificate of the Borrower certifying that there have been no changes to theconstitutive documents of the Borrower since the Effective Date, or if therehave been changes, copies certified by the Borrower of all such changes;

######  

###### (ii)                                  an assumptionagreement from each New Lender participating in the Revolver Increase, if any,in form and substance satisfactory to the Administrative Agent (each, an “AssumptionAgreement”), duly executed by such New Lender, the Administrative Agent andthe Borrower;

######  

###### (iii)                               confirmation from eachLender participating in the Revolver Increase of the increase in the amount ofits Revolving Loan Commitment, in form and substance satisfactory to theAdministrative Agent;

######  

###### (iv)                              a certificate of theBorrower certifying that no Default or Event of Default shall have occurred andbe continuing or shall occur as a result of such Revolver Increase;

######  

###### (v)                                 a certificate of theBorrower certifying that the representations and warranties made by theBorrower herein and in the other Financing Documents are true and complete inall material respects with the same force and effect as if made on and as ofsuch date (or, to the extent any such representation or warranty specificallyrelates to an earlier date, such representation or warranty is true andcomplete in all material respects as of such earlier date);

######  

###### (vi)                              supplements ormodifications to the Financing Documents and such additional FinancingDocuments, including any new Notes to New Lenders and replacement Notes toLenders that agree to participate in such Revolver Increase, that theAdministrative Agent reasonably deems necessary in order to document suchRevolver Increase and otherwise assure and give effect to the rights of theAdministrative Agent and the Lenders in the Financing Documents; and

 

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###### (vii)                           such other documents,instruments and information as the Administrative Agent or its counsel shallreasonably deem necessary in connection with the Revolver Increase.

######  

### (f)                                    Oneach Increase Date, upon fulfillment of the conditions set forth in Section 2.08(d),the Administrative Agent shall (i) effect a settlement of all outstandingRevolving Loans among the Lenders that will reflect the adjustments to theRevolving Loan Commitments of the Lenders as a result of the Revolver Increaseand (ii) notify the Lenders, any New Lenders participating in the RevolverIncrease and the Borrower, on or before 1:00 p.m. (New York City time), bytelecopier or telex, of the occurrence of the Revolver Increase to be effectedon such Increase Date.

###  

Section 2.09.                             Repaymentof Loans; Evidence of Debt.  (a)  TheBorrower hereby unconditionally promises to pay (i) to the AdministrativeAgent for the account of each Lender the then unpaid principal amount of eachLoan on the Maturity Date, and (ii) to the Swingline Lender the thenunpaid principal amount of each Swingline Loan on the earlier of the MaturityDate and the first date after such Swingline Loan is made that is the 15th orlast day of a calendar month and is at least two Business Days after suchSwingline Loan is made; provided that on each date that a Revolving LoanBorrowing is made, the Borrower shall repay all Swingline Loans thenoutstanding.

 

### (b)                                 EachLender shall maintain in accordance with its usual practice an account or accountsevidencing the indebtedness of the Borrower to such Lender resulting from eachLoan made by such Lender, including the amounts of principal and interestpayable and paid to such Lender from time to time hereunder.

###  

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

###  

### (d)                                 Theentries made in the accounts maintained pursuant to paragraph (b) or (c) ofthis Section shall be primafacie evidence of the existenceand amounts of the obligations recorded therein; provided that thefailure of any Lender or the Administrative Agent to maintain such accounts orany error therein shall not in any manner affect the obligation of the Borrowerto repay the Loans in accordance with the terms of this Agreement.

###  

### (e)                                  Unlessall Lenders otherwise agree, the Loans of each Lender shall be evidenced by apromissory note substantially in the form of Exhibit C (each, a “Note”).  The Borrower shall execute and deliver toeach Lender a Note or Notes payable to the order of such Lender with blankscompleted to the satisfaction of such Lender.

###  

Section 2.10.                             Prepaymentof Loans.  (a)  TheBorrower shall have the right at any time and from time to time to prepay anyBorrowing in whole or in part, in integral multiples

 

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of $100,000 and not less than $1,000,000, subject toprior notice in accordance with paragraph (b) of this Section.

 

### (b)                                 TheBorrower shall notify the Administrative Agent (and, in the case of prepaymentof a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy)of any prepayment hereunder (i) in the case of prepayment of a EurodollarBorrowing, not later than 1:00 pm, New York City time three Business Daysbefore the date of prepayment or (ii) in the case of prepayment of an ABRBorrowing, not later than 1:00 pm, New York City time, one Business Daybefore the date of prepayment.  Each suchnotice shall be irrevocable and shall specify the prepayment date and theprincipal amount of each Borrowing or portion thereof to be prepaid; providedthat, if a notice of prepayment is given under the circumstances in which aconditional notice of termination of the Revolving Loan Commitments ispermitted as contemplated by Section 2.08, then such notice of prepaymentmay be revoked if such notice of termination is revoked in accordance with Section 2.08.  Promptly following receipt of any such noticerelating to a Borrowing, the Administrative Agent shall advise the applicableLenders of the contents thereof.  Eachpartial prepayment of any Borrowing shall be in an amount that would bepermitted in the case of an advance of a Borrowing of the same Type as providedin Section 2.02 (except that the foregoing shall not be applicable to aprepayment in full of the aggregate principal amount of a Borrowing thenoutstanding).  Each prepayment of aBorrowing shall be applied ratably to the Loans included in the prepaid Borrowing.  Prepayments shall be accompanied by accruedinterest to the extent required by Section 2.10.

###  

Section 2.11.                             Fees.  (a)  The Borrower agrees to pay tothe Administrative Agent for the account of each Lender a commitment fee (the “RevolvingCredit Commitment Fee”), which shall accrue at the Applicable Rate on thedaily amount of the unused Revolving Loan Commitment of such Lender during theperiod from and including the Effective Date to but excluding the date on whichsuch Revolving Loan Commitment terminates, whether or not prior to such timeall the conditions in Section 4.02 are met.  Accrued Revolving Credit Commitment Feesshall be payable quarterly in arrears on the first day of January, April, July andOctober of each year and on the date on which the Revolving LoanCommitments terminate, commencing on the first such date to occur after thedate hereof.  All Revolving CreditCommitment Fees shall be computed on the basis of a year of 360 days and shallbe payable for the actual number of days elapsed (including the first day butexcluding the last day).

 

### (b)                                 TheBorrower agrees to pay (i) to the Administrative Agent for the account ofeach Lender a participation fee with respect to its participation in Letters ofCredit, which shall accrue for each day during the period from and includingthe Effective Date to but excluding the later of the date on which such Lender’sRevolving Loan Commitment terminates and the date on which such Lender ceasesto have any LC Exposure, at the Applicable Rate (or solely with respect tostandby Letters of Credit issued to secure Borrower’s performance obligationsunder contracts entered into by the Borrower in the ordinary course ofbusiness, seventy-five percent of such Applicable Rate) with respect tointerest on Eurodollar Revolving Loans for such day on the average daily amountof such Lender’s LC Exposure (excluding any portion thereof attributable tounreimbursed LC Disbursements) and (ii) to the Issuing Bank a frontingfee, which shall accrue at a rate of 0.125% per annum on the average dailyamount of the LC Exposure (excluding any portion thereof attributable tounreimbursed LC Disbursements) during the period from and including theEffective Date to but excluding the later of the date of

 

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### termination of the RevolvingLoan Commitments and the date on which there ceases to be any LC Exposure, aswell as the Issuing Bank’s standard fees with respect to the issuance,amendment, renewal or extension of any Letter of Credit or processing ofdrawings thereunder.  Participation feesand fronting fees accrued through and including the last day of January, April,July and October of each year shall be payable on the third BusinessDay following such last day, commencing on the first such date to occur afterthe Effective Date; provided that all such fees shall be payable on thedate on which the Revolving Loan Commitments terminate and any such feesaccruing after the date on which the Revolving Loan Commitments terminate shallbe payable on demand.  Any other feespayable to the Issuing Bank pursuant to this paragraph shall be payable within10 days after demand.  Allparticipation fees and fronting fees shall be computed on the basis of a yearof 360 days and shall be payable for the actual number of days elapsed(including the first day but excluding the last day).

###  

### (c)                                  TheBorrower agrees to pay to the Administrative Agent, for its own account, feesin the amounts set forth in the Fee Letter and any other fees in the amountsand at the times separately agreed upon in writing between the Borrower and theAdministrative Agent.

###  

### (d)                                 Allfees payable hereunder shall be paid on the dates due, in immediately availablefunds, to the Administrative Agent (or to the Issuing Bank, in the case of feespayable to it) for distribution, in the case of commitment fees and utilizationfees, to the Lenders.  Absent any errorin the calculation thereof, fees paid shall not be refundable under anycircumstances.

###  

Section 2.12.                             Interest.  (a)  The Loans comprising each ABRBorrowing (including each Swingline Loan) shall bear interest for each day onwhich any principal of such Loans remains outstanding at the Alternate BaseRate for such day plus the Applicable Rate for such day.

 

### (b)                                 TheLoans comprising each Eurodollar Borrowing shall bear interest for each dayduring each Interest Period applicable thereto at the Adjusted LIBO Rate forsuch Interest Period plus the Applicable Rate for such day.

###  

### (c)                                  Notwithstandingthe foregoing, if an Event of Default shall have occurred and be continuingunder subsections (a) or (b) of Article VII, then unlessand until such Event of Default shall have been cured or waived, alloutstanding amounts which are then due and owing shall bear interest, after aswell as before judgment, at a rate per annum equal to 2% plus the rateotherwise applicable to ABR Loans as provided for in subsection (a) above.

###  

### (d)                                 Accruedinterest on each Loan shall be payable in arrears on each Interest Payment Datefor such Loan, on the Maturity Date and, upon termination of the Revolving LoanCommitments; provided that (i) interest accrued pursuant toparagraph (c) of this Section shall be payable on demand, (ii) inthe event of any repayment or prepayment of any Eurodollar Loan, accruedinterest on the principal amount repaid or prepaid shall be payable on the dateof such repayment or prepayment and (iii) in the event of any conversionof any Eurodollar Loan prior to the end of the current Interest Periodtherefor, accrued interest on such Eurodollar Loan shall be payable on theeffective date of such conversion.

 

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### (e)                                  Allinterest hereunder shall be computed on the basis of a year of 360 days,except that interest computed by reference to the Alternate Base Rate at timeswhen the Alternate Base Rate is based on the Prime Rate shall be computed onthe basis of a year of 365 days (or 366 in a leap year), and in each caseshall be payable for the actual number of days elapsed (including the first daybut excluding the last day).  Theapplicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall bedetermined by the Administrative Agent, and such determination shall beconclusive absent manifest error.

###  

Section 2.13.                             AlternateRate of Interest.  If prior to thecommencement of any Interest Period for a Eurodollar Borrowing:

 

##### (a)                                  the AdministrativeAgent determines (which determination shall be conclusive absent manifesterror) that adequate and reasonable means do not exist for ascertaining theAdjusted LIBO Rate, for such Interest Period; or

#####  

##### (b)                                 the AdministrativeAgent is advised by the Required Lenders that the Adjusted LIBO Rate, for suchInterest Period will not adequately and fairly reflect the cost to such Lendersof making or maintaining their Loans included in such Borrowing for suchInterest Period;

#####  

then theAdministrative Agent shall give notice thereof to the Borrower and the Lendersby telephone or telecopy, as promptly as practicable thereafter and, until theAdministrative Agent notifies the Borrower and the Lenders that thecircumstances giving rise to such notice no longer exist, (i) any InterestElection Request that requests the conversion of any Borrowing to, orcontinuation of any Borrowing as, a Eurodollar Borrowing shall be ineffectiveand (ii) if any Borrowing Request or Interest Election Request requests aEurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.

 

Section 2.14.                             IncreasedCosts.  (a)  If any Changein Law shall:

 

###### (i)                                     impose, modify ordeem applicable any reserve, special deposit or similar requirement againstassets of deposits with or for the account of, or credit extended by, anyLender (except any such reserve requirement reflected in the Adjusted LIBORate); or

######  

###### (ii)                                  impose on any Lenderor the London interbank market any other condition affecting this Agreement orEurodollar Loans made by such Lender or any Letter of Credit or participationtherein;

######  

and the resultof any of the foregoing shall be to increase the cost to such Lender of makingor maintaining any Eurodollar Loan (or of maintaining its obligation to makeany such Eurodollar Loan) or to increase the cost to such Lender or the IssuingBank of participating in, issuing or maintaining any Letter of Credit or to reducethe amount of any sum received or receivable by such Lender or the Issuing Bankhereunder (whether of principal, interest or otherwise) with respect to itsEurodollar Loans, then the Borrower will pay to such Lender or the IssuingBank, as the case may be, such additional amount or amounts as will compensatesuch Lender or the Issuing Bank, as the case may be, for such additional costsincurred or reduction suffered.

 

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### (b)                                 Ifany Lender or the Issuing Bank determines that any Change in Law regardingcapital requirements has or would have the effect of reducing the rate ofreturn on such Lender’s or the Issuing Bank’s capital or on the capital of suchLender’s or Issuing Bank’s holding company, if any, as a consequence of thisAgreement or the Loans made by, or participations in Letters of Credit held by,such Lender, or the Letters of Credit issued by the Issuing Bank to a levelbelow that which such Lender or the Issuing Bank or such Lender’s or the IssuingBank’s holding company could have achieved but for such Change in Law (takinginto consideration such Lender’s or the Issuing Bank’s policies and thepolicies of such Lender’s or the Issuing Bank’s holding company with respect tocapital adequacy), then from time to time the Borrower will pay to such Lenderor the Issuing Bank, as the case may be, such additional amount or amounts aswill compensate such Lender or the Issuing Bank or such Lender’s or the IssuingBank’s holding company for any such reduction suffered.

###  

### (c)                                  Acertificate of a Lender or the Issuing Bank setting forth in reasonable detailthe calculation of the amount or amounts necessary to compensate such Lender orthe Issuing Bank or its holding company, as the case may be, as specified inparagraph (a) or (b) of this Section shall be delivered tothe Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender or theIssuing Bank, as the case may be, the amount shown as due on any suchcertificate on demand.

###  

### (d)                                 Failureor delay on the part of any Lender or the Issuing Bank to demand compensationpursuant to this Section shall not constitute a waiver of such Lender’s orthe Issuing Bank’s right to demand such compensation; provided that theBorrower shall not be required to compensate a Lender or the Issuing Bankpursuant to this Section for any increased costs or reductions incurredmore than 270 days prior to the date that such Lender or the Issuing Bank,as the case may be, notifies the Borrower of the Change in Law giving rise tosuch increased costs or reductions and of such Lender’s intention to claimcompensation therefor; providedfurther that, if the Change inLaw giving rise to such increased costs or reductions is retroactive, then the270-day period referred to above shall be extended to include the periodof retroactive effect thereof.

###  

Section 2.15.                             BreakFunding Payments.  In the event of (a) thepayment of any principal of any Eurodollar Loan other than on the last day ofan Interest Period applicable thereto (including as a result of an Event ofDefault), (b) the conversion of any Eurodollar Loan other than on the lastday of the Interest Period applicable thereto or (c) the failure toborrow, convert, continue or prepay any Eurodollar Loan on the date specifiedin any notice delivered pursuant hereto (regardless of whether such notice maybe revoked under Section 2.08(b) and is revoked in accordancetherewith), then, in any such event, the Borrower shall compensate each Lenderfor the loss, cost and expense attributable to such event.  In the case of a Eurodollar Loan, such loss,cost or expense to any Lender shall be deemed to include an amount determinedby such Lender to be the excess, if any, of (i) the amount of interestwhich would have accrued on the principal amount of such Loan had such eventnot occurred, at the Adjusted LIBO Rate that would have been applicable to suchLoan, for the period from the date of such event to the last day of the thencurrent Interest Period therefor (or, in the case of a failure to borrow,convert or continue, for the period that would have been the Interest Periodfor such Loan), over (ii) the amount of interest which would accrue onsuch principal amount for such period at the interest rate which such Lenderwould bid were it to bid, at the commencement of such period, for dollar

 

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deposits of a comparable amount and period from otherbanks in the eurodollar market.  Acertificate of any Lender setting forth in reasonable detail any amount oramounts that such Lender is entitled to receive pursuant to this Section shallbe delivered to the Borrower and shall be conclusive absent manifesterror.  The Borrower shall pay suchLender the amount shown as due on any such certificate within 10 days afterreceipt thereof.

 

Section 2.16.                             Taxes.  (a)  Any and all payments by or onaccount of any obligation of the Borrower hereunder shall be made free andclear of and without deduction for any Indemnified Taxes or Other Taxes; providedthat if the Borrower shall be required to deduct any Indemnified Taxes or OtherTaxes from such payments, then (i) the sum payable shall be increased asnecessary so that after making all required deductions (including deductionsapplicable to additional sums payable under this Section) the AdministrativeAgent or Lender (as the case may be) receives an amount equal to the sum itwould have received had no such deductions been made, (ii) the Borrowershall make such deductions and (iii) the Borrower shall pay the fullamount deducted to the relevant Governmental Authority in accordance withapplicable law.

 

### (b)                                 Inaddition, the Borrower shall pay any Other Taxes to the relevant GovernmentalAuthority in accordance with applicable law.

###  

### (c)                                  TheBorrower shall indemnify the Administrative Agent and each Lender, within 10days after written demand therefor, for the full amount of any IndemnifiedTaxes or Other Taxes paid by the Administrative Agent or such Lender, as thecase may be, on or with respect to any payment by or on account of anyobligation of the Borrower hereunder (including Indemnified Taxes or OtherTaxes imposed or asserted on or attributable to amounts payable under thisSection) and any penalties, interest and reasonable expenses arising therefromor with respect thereto, whether or not such Indemnified Taxes or Other Taxeswere correctly or legally imposed or asserted by the relevant GovernmentalAuthority.  A certificate as to theamount of such payment or liability delivered to the Borrower by a Lender or bythe Administrative Agent on its own behalf or on behalf of a Lender, shall beconclusive absent manifest error.

###  

### (d)                                 Assoon as practicable after any payment of Indemnified Taxes or Other Taxes bythe Borrower to a Governmental Authority, the Borrower shall deliver to theAdministrative Agent the original or a certified copy of a receipt issued bysuch Governmental Authority evidencing such payment, a copy of the returnreporting such payment or other evidence of such payment reasonablysatisfactory to the Administrative Agent.

###  

### (e)                                  AnyForeign Lender that is entitled to an exemption from or reduction ofwithholding tax under the law of the jurisdiction in which the Borrower islocated, or any treaty to which such jurisdiction is a party, with respect topayments under this Agreement shall deliver to the Borrower (with a copy to theAdministrative Agent), at the time or times prescribed by applicable law, suchproperly completed and executed documentation prescribed by applicable law orreasonably requested by the Borrower as will permit such payments to be madewithout withholding or at a reduced rate.

###  

### (f)                                    Ifthe Administrative Agent or a Lender determines, in its sole discretion, thatit has received a refund of any Taxes or Other Taxes as to which it has beenindemnified by

 

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### the Borrower or with respect towhich the Borrower has paid additional amounts pursuant to Section 2.16,it shall pay over such refund to the Borrower (but only to the extent ofindemnity payments made, or additional amounts paid, by the Borrower under thisSection 2.16 with respect to the Taxes or Other Taxes giving rise to suchrefund); provided, that the Borrower, upon the request of theAdministrative Agent or such Lender, agrees to repay the amount paid over tothe Borrower (plus any penalties, interest or other charges imposed by therelevant Governmental Authority) to the Administrative Agent or such Lender inthe event that the Administrative Agent or such Lender is required to repaysuch refund to such Governmental Authority. This section shall not be construed to require the AdministrativeAgent or any Lender to make available its tax returns (or other informationrelating to its taxes which it deems confidential) to the Borrower or any otherPerson.

###  

Section 2.17.                             PaymentsGenerally; Pro Rata Treatment; Sharing of Set-offs.  (a)  The Borrower shall make eachpayment required to be made by it hereunder (whether of principal, interest,fees or reimbursement of LC Disbursements or of amounts payable under Section 2.14,2.15 or 2.16, or otherwise) prior to 1:00 pm, New York City time, on thedate when due, in immediately available funds, without set-off orcounterclaim.  Any amounts received aftersuch time on any date may, in the discretion of the Administrative Agent, bedeemed to have been received on the next succeeding Business Day for purposesof calculating interest thereon.  TheAdministrative Agent may charge, when due and payable, the Borrower’s accountwith the Administrative Agent for all interest, principal and Revolving CreditCommitment Fees or other fees owing to the Administrative Agent or the Lenderson or with respect to this Agreement and/or Loans and other FinancingDocuments.  All such payments shall bemade to the Administrative Agent at its offices at 1411 Broadway, NewYork, New York, except that payments pursuant to Sections 2.14, 2.15, 2.16and 9.03 shall be made directly to the Persons entitled thereto.  The Administrative Agent shall distribute anysuch payments received by it for the account of any other Person to theappropriate recipient promptly following receipt thereof.  If any payment hereunder shall be due on aday that is not a Business Day, the date for payment shall be extended to thenext succeeding Business Day, and, in the case of any payment accruinginterest, interest thereon shall be payable for the period of such extension; providedthat, in the case of any prepayment of principal of or interest on any EurodollarLoan, if such next succeeding Business Day would fall in the next calendarmonth, the date for payment shall instead be the next preceding BusinessDay.  All payments hereunder shall bemade in dollars.

 

### (b)                                 Ifat any time insufficient funds are received by and available to theAdministrative Agent to pay fully all amounts of principal, unreimbursed LCDisbursements, interest and fees then due hereunder, such funds shall beapplied (i) first, towards payment of interest and fees then duehereunder, ratably among the parties entitled thereto in accordance with theamounts of interest and fees then due to such parties, and (ii) second,towards payment of principal and unreimbursed LC Disbursements then duehereunder, ratably among the parties entitled thereto in accordance with theamounts of principal and unreimbursed LC Disbursements then due to suchparties.

###  

### (c)                                  Ifany Lender shall, by exercising any right of set-off or counterclaim orotherwise, obtain payment in respect of any principal of or interest on any ofits Revolving Loans or participations in LC Disbursements or Swingline Loansresulting in such Lender receiving payment of a greater proportion of theaggregate amount of its Revolving Loans and

 

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### participations in LCDisbursements and Swingline Loans and accrued interest thereon than theproportion received by any other Lender, then the Lender receiving such greaterproportion shall purchase (for cash at face value) participations in the RevolvingLoans and participations in LC Disbursements and Swingline Loans of otherLenders to the extent necessary so that the benefit of all such payments shallbe shared by the Lenders ratably in accordance with the aggregate amount ofprincipal of and accrued interest on their respective Revolving Loans inparticipations in LC Disbursements and Swingline Loans; provided that (i) ifany such participations are purchased and all or any portion of the paymentgiving rise thereto is recovered, such participations shall be rescinded andthe purchase price restored to the extent of such recovery, without interest,and (ii) the provisions of this paragraph shall not be construed to applyto any payment made by the Borrower pursuant to and in accordance with theexpress terms of this Agreement or any payment obtained by a Lender asconsideration for the assignment of or sale of a participation in any of itsLoans or participations in LC Disbursements to any assignee or participant,other than to the Borrower or any Subsidiary or Affiliate thereof (as to whichthe provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it mayeffectively do so under applicable law, that any Lender acquiring aparticipation pursuant to the foregoing arrangements may exercise against theBorrower rights of set-off and counterclaim with respect to such participationas fully as if such Lender were a direct creditor of the Borrower in the amountof such participation.

###  

### (d)                                 Unlessthe Administrative Agent shall have received notice from the Borrower prior tothe date on which any payment is due to the Administrative Agent for theaccount of the Lenders or the Issuing Bank hereunder that the Borrower will notmake such payment, the Administrative Agent may assume that the Borrower hasmade such payment on such date in accordance herewith and may, in reliance uponsuch assumption, distribute to the Lenders or the Issuing Bank, as the case maybe, the amount due.  In such event, ifthe Borrower has not in fact made such payment, then each of the Lenders or theIssuing Bank, as the case may be, severally agrees to repay to theAdministrative Agent forthwith on demand the amount so distributed to suchLender or the Issuing Bank with interest thereon, for each day from andincluding the date such amount is distributed to it to but excluding the dateof payment to the Administrative Agent, at the greater of the Federal FundsEffective Rate and a rate determined by the Administrative Agent in accordancewith banking industry rules on interbank compensation.

###  

### (e)                                  Ifany Lender shall fail to make any payment required to be made by it pursuant toSection 2.04(c), Section 2.05(d) or (e), Section 2.06(b) or2.17(c), then the Administrative Agent may, in its discretion (notwithstandingany contrary provision hereof), apply any amounts thereafter received by theAdministrative Agent for the account of such Lender to satisfy such Lender’sobligations under such Sections until all such unsatisfied obligations are fullypaid.  Until such Lender’s unsatisfiedobligations are fully paid, such Lender shall be excluded from anydetermination of Required Lenders under this Agreement.

###  

Section 2.18.                             MitigationObligations.  If any Lender requestscompensation under Section 2.14, or if the Borrower is required to pay anyadditional amount to any Lender or any Governmental Authority for the accountof any Lender pursuant to Section 2.16, then such Lender shall usereasonable efforts to designate a different lending office for funding orbooking its Loans hereunder or to assign its rights and obligations hereunderto another of its offices,

 

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branches or affiliates, if, in the judgment of suchLender, such designation or assignment (i) would eliminate or reduceamounts payable pursuant to Section 2.14 or 2.16, as the case may be, inthe future and (ii) would not subject such Lender to any unreimbursed costor expense and would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay allreasonable costs and expenses incurred by any Lender in connection with anysuch designation or assignment.

 

ARTICLE III

 

Representationsand Warranties

 

The Borrowerrepresents and warrants to the Lenders that:

 

Section 3.01.                             Existenceand Power.  Each of the Borrower andits Restricted Subsidiaries is a corporation organized, validly existing and ingood standing under the laws of its jurisdiction, and has all necessary powersrequired to carry on its business as now conducted and, except where thefailure to do so could not be reasonably expected to result in a MaterialAdverse Effect, is qualified to do business in, and is in good standing in,every jurisdiction where such qualification is required.

 

Section 3.02.                             Corporateand Governmental Authorization; No Contravention.  The execution, delivery and performance bythe Borrower of the Financing Documents to which it is a party are within itscorporate powers, have been duly authorized by all necessary corporate action,require no action by or in respect of, or filing with, any GovernmentalAuthority and do not contravene, or constitute a default under, any provisionof material applicable law or material regulation or of its charter or bylawsor of any material agreement, judgment, injunction, order, decree or othermaterial instrument binding upon each or result in the creation or impositionof any Lien on any material asset of the Borrower or any of its RestrictedSubsidiaries.

 

Section 3.03.                             BindingEffect.  This Agreement and the otherFinancing Documents to which it is a party constitute valid and bindingagreements of the Borrower, in each case enforceable in accordance with theirrespective terms, except as the enforceability thereof may be limited bybankruptcy, insolvency, reorganization or moratorium or other similar lawsrelating to the enforcement of creditors’ rights generally and by generalequitable principles.

 

Section 3.04.                             FinancialInformation.  (a)  TheBorrower has heretofore furnished to the Administrative Agent financialstatements of the Borrower for the fiscal years ended September 30, 2002, September 30,2003 and September 30, 2004 audited by Ernst & Young LLP,independent public accountants.  Suchfinancial statements present fairly in all material respects the financialcondition and results of operations of the Borrower and its Subsidiaries as ofthe dates and for the periods indicated, and such financial statements disclosein accordance with GAAP all material liabilities, direct or contingent, of theBorrower as of the dates thereof.

 

### (b)                                 SinceSeptember 30, 2004, there has been no material adverse change in thebusiness, prospects, assets, operations or financial condition of the Borrowerand its Restricted Subsidiaries, considered as a whole.

 

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Section 3.05.                             Litigation.  Except for the Disclosed Matters, there is noaction, suit or proceeding pending against, or to the knowledge of the Borrowerthreatened against or affecting, the Borrower or any of its RestrictedSubsidiaries before any arbitrator or any Governmental Authority, that (i) couldreasonably be expected, individually or in the aggregate, to result in aMaterial Adverse Effect, or (ii) which would in any material respect drawinto question the enforceability of any of the Financing Documents.

 

Section 3.06.                             Compliancewith ERISA.  Each of the Borrower andits Restricted  Subsidiaries and eachERISA Affiliate has fulfilled its obligations under the minimum fundingstandards of ERISA and the Internal Revenue Code with respect to each Plan andis in compliance in all material respects with the presently applicableprovisions of ERISA and the Code with respect to each Plan, and has notincurred any liability under Title IV of ERISA (i) to the PBGC otherthan a liability to the PBGC for premiums under Section 4007 of ERISA or (ii) inrespect of a Multiemployer Plan which has not been discharged in full when due.

 

Section 3.07.                             Taxes.  To the extent applicable, each of theBorrower and its Restricted Subsidiaries has filed all United States Federalincome tax returns and all other material tax returns which are required to befiled by it and has paid all taxes stated to be due in such returns or pursuantto any assessment received by it, except for taxes the amount, applicability orvalidity of which is being contested in good faith by appropriateproceedings.  The charges, accruals andreserves on the books of the Borrower and its Restricted Subsidiaries inrespect of taxes or other similar governmental charges, additions to taxes andany penalties and interest thereon are, in the opinion of the Borrower,adequate.

 

Section 3.08.                             EnvironmentalCompliance.  (a)  Exceptfor Disclosed Matters,

 

###### (i)                                     the Borrower andits Restricted Subsidiaries have, obtained, or made timely application for, allpermits, certificates, licenses, approvals, registrations and otherauthorizations (collectively “Permits”) which are required under allapplicable Environmental Laws and are necessary for their operations and are incompliance with the terms and conditions of all such Permits, except where thefailure to obtain such Permits or to comply with their terms would not have,individually or in the aggregate, a Material Adverse Effect;

######  

###### (ii)                                  no notice,notification, demand, request for information, citation, summons, complaint ororder has been issued, no complaint has been filed, no penalty has beenassessed and no investigation or review is pending, or to the Borrower’sknowledge, threatened by any governmental entity or other Person with respectto any (A) alleged violation by the Borrower or any Restricted Subsidiaryof any Environmental Law, (B) alleged failure by the Borrower or anyRestricted Subsidiary to have any Permits required in connection with the conductof its business or to comply with the terms and conditions thereof, (C) anygeneration, treatment, storage, recycling, transportation or disposal of anyHazardous Materials or (D) release of Hazardous Materials, except wheresuch event or events would not have, individually or in the aggregate, aMaterial Adverse Effect;

 

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###### (iii)                               to the knowledge of theBorrower, all oral or written notifications of a release of Hazardous Materialsrequired to be filed under any applicable Environmental Law have been filed orare in the process of being filed by or on behalf of the Borrower or anyRestricted Subsidiary;

######  

###### (iv)                              no property now owned orleased by the Borrower or any Restricted Subsidiary and, to the knowledge ofthe Borrower, no such property previously owned or leased or any property towhich the Borrower or any Restricted Subsidiary has, directly or indirectly,transported or arranged for the transportation of any Hazardous Materials, islisted or, to the Borrower’s knowledge, proposed for listing, on the NationalPriorities List promulgated pursuant to CERCLA, or CERCLIS (as defined inCERCLA) or any similar state list or is the subject of federal, state or localenforcement actions or, to the knowledge of the Borrower, other investigationswhich may lead to claims against the Borrower or any Restricted Subsidiary forclean-up costs, remedial work, damage to natural resources or personal injuryclaims, including, but not limited to, claims under CERCLA, except where suchlistings or investigations would not have, individually or in the aggregate, aMaterial Adverse Effect;

######  

###### (v)                                 there are no Liensunder or pursuant to any applicable Environmental Laws on any real property orother assets owned or leased by the Borrower or any Restricted Subsidiary, andno government actions have been taken or, to the knowledge of the Borrower, arein process which could subject any of such properties or assets to such Liens.

######  

### (b)                                 Forpurposes of this Section, the terms “Borrower” and “Restricted Subsidiary”shall include any business or business entity (including a corporation) whichis a predecessor, in whole or in part, of the Borrower or any RestrictedSubsidiary.

###  

Section 3.09.                             Properties.  (a)  Each of the Borrower and its RestrictedSubsidiaries has good title to, or valid leasehold interests in, all its realand personal property material to its business, except for minor defects intitle that do not interfere with its ability to conduct its business ascurrently conducted or to utilize such properties for their intended purposes.

 

### (b)                                 Tothe knowledge of the Borrower, each of the Borrower and its RestrictedSubsidiaries owns, or is licensed to use, all trademarks, trade names,copyrights, patents and other intellectual property material to its business,and the use thereof by the Borrower and its Restricted Subsidiaries does not,to the knowledge of the Borrower, infringe upon the rights of any other Person,except for any such infringements that, individually or in the aggregate, couldnot reasonably be expected to result in a Material Adverse Effect.

###  

Section 3.10.                             Compliancewith Laws and Agreements.  Each ofthe Borrower and its Restricted Subsidiaries is in compliance with all laws,regulations and orders of any Governmental Authority applicable to it or itsproperty and all indentures, agreements and other instruments binding upon itor its property, and each has all material governmental licenses,authorizations, consents and approvals required to carry on its business as nowconducted, except

 

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where the failure to do so, individually or in theaggregate, could not reasonably be expected to result in a Material AdverseEffect.

 

Section 3.11.                             Investmentand Holding Company Status.  Neitherthe Borrower nor any of its Restricted Subsidiaries is (a) an “investmentcompany” as defined in, or subject to regulation under, the Investment CompanyAct of 1940 or (b) a “holding company” as defined in, or subject toregulation under, the Public Utility Holding Company Act of 1935.

 

Section 3.12.                             FullDisclosure.  All informationfurnished by the Borrower to the Administrative Agent or any Lender forpurposes of or in connection with this Agreement or any of the Transactions is,taken as whole and in light of the circumstances under which such informationis furnished, true and accurate in all material respects on the date as ofwhich such information is furnished, and true and accurate in all materialrespects on the date as of which such information is stated or certified.  It is understood that the foregoing islimited to the extent that (i) projections have been made in good faith bythe management of the Borrower and in the view of the Borrower’s management arereasonable in light of all information known to management as of the EffectiveDate, and (ii) no representation or warranty is made as to whether theprojected results will be realized.

 

Section 3.13.                             Solvency.  (a)  The fair salable value of thebusiness of the Borrower and its Restricted Subsidiaries is not less than theamount that will be required to be paid on or in respect of the probableliability on the existing debts and other liabilities (including contingentliabilities) of the Borrower and its Restricted Subsidiaries, as they becomeabsolute and mature.

 

### (b)                                 Theassets of the Borrower and its Restricted Subsidiaries do not constituteunreasonably small capital for the Borrower and its Restricted Subsidiaries tocarry out their business as now conducted and as proposed to be conductedincluding the capital needs of the Borrower and its Restricted Subsidiaries,taking into account the particular capital requirements of the businessconducted by the Borrower and its Restricted Subsidiaries and projected capitalrequirements and capital availability thereof.

###  

### (c)                                  Neitherthe Borrower nor any of its Restricted Subsidiaries intends to incur debtsbeyond its ability to pay such debts as they mature (taking into account thetiming and amounts of cash to be received by the Borrower and any of itsRestricted Subsidiaries, and of amounts to be payable on or in respect of debtof the Borrower and any of its Restricted Subsidiaries).

###  

### (d)                                 Neitherthe Borrower nor any of its Restricted Subsidiaries believes that finaljudgments against them in actions for money damages presently pending will berendered at a time when, or in an amount such that, they will be unable tosatisfy any such judgments promptly in accordance with their terms (taking intoaccount the maximum reasonable amount of such judgments in any such actions andthe earliest reasonable time at which such judgments might be rendered).  The cash flow of the Borrower and itsRestricted Subsidiaries, after taking into account all other anticipated usesof the cash of the Borrower and its Restricted Subsidiaries (including thepayments on or in respect of debt referred to in paragraph (c) ofthis Section), will at all times be sufficient to pay all such judgmentspromptly in accordance with their terms.

 

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Section 3.14.          Employee Matters. There are no strikes, slowdowns, work stoppages or controversiespending or, to the knowledge of the Borrower threatened between the Borrowerand its employees, other than employee grievances arising in the ordinarycourse of business, none of which could have, either individually or in theaggregate, a Material Adverse Effect.

 

Section 3.15.          Use of Proceeds. All proceeds of each Borrowing under the Revolving Loan Commitmentsshall be used to repay existing Indebtedness, make Permitted Acquisitions, andprovide for working capital requirements and general corporate purposes andnone of such proceeds will be used, directly or indirectly, for the purpose,whether immediate, incidental or ultimate, of buying or carrying any “marginstock” within the meaning of Regulation U of the Board of Governors of theFederal Reserve System, as the same is from time to time in effect..

 

Section 3.16.          Subsidiaries. As of the Effective Date, the Borrower has the Restricted Subsidiariesset forth on Schedule 3.16A and the Unrestricted Subsidiaries set forth onSchedule 3.16B.

 

Section 3.17.          No Change in Credit Criteria or Collection Policies.  There has been no material change in creditcriteria or collection policies concerning accounts receivable of the Borrowerand its Subsidiaries since September 30, 2004.

 

ARTICLE IV

 

Conditions

 

Section 4.01.          Effective Date. The obligations of the Lenders to make Loans hereunder and of theIssuing Bank to issue Letters of Credit shall not become effective until thedate on which each of the following conditions is satisfied (or waived inaccordance with Section 9.02):

 

##### (a)           The AdministrativeAgent (or its counsel) shall have received from each party hereto either (i) acounterpart of this Agreement signed on behalf of such party or (ii) writtenevidence satisfactory to the Administrative Agent (which may include telecopytransmission of a signed signature page of this Agreement) that such partyhas signed a counterpart of this Agreement.

#####  

##### (b)           The AdministrativeAgent shall have received a favorable written opinion (addressed to theAdministrative Agent and the Lenders and dated the Effective Date) ofWilliam L. Hoese, Assistant General Counsel of the Borrower, substantiallyin the form of Exhibit B, and covering such other matters relating to theBorrower, this Agreement or the Transactions as the Required Lenders shallreasonably request.  The Borrower herebyrequests such counsel to deliver such opinion.

#####  

##### (c)           The AdministrativeAgent shall have received such documents and certificates as the AdministrativeAgent or its counsel may reasonably request relating to the organization,existence and good standing of the Borrower and any Guarantors, the

 

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##### authorizationof the Transactions and any other legal matters relating to the Borrower andany Guarantors, this Agreement or the Transactions, all in form and substancereasonably satisfactory to the Administrative Agent and its counsel.

#####  

##### (d)           The AdministrativeAgent shall have received a certificate of the Borrower, dated the EffectiveDate and signed by the President, a Vice President or a Financial Officer ofthe Borrower, confirming compliance with the conditions set forth inparagraphs (a) and (b) of Section 4.02.

#####  

##### (e)           The AdministrativeAgent shall have received all fees and other amounts due and payable, on orprior to the Effective Date, including, to the extent invoiced, reimbursementor payment of all out-of-pocket expenses required to be reimbursed or paid bythe Borrower hereunder.

#####  

##### (f)            The AdministrativeAgent (or its counsel) shall have received the other Financing Documents, allin form and substance reasonably satisfactory to the Administrative Agent andits counsel.

#####  

##### (g)           The AdministrativeAgent shall have received and determined to be in form and substancesatisfactory to it:

#####  

###### (i)            evidence of thecompliance by the Borrower with Section 5.06 hereof;

######  

###### (ii)           the financialstatements described in Section 3.04 hereof.

######  

##### (h)           The Borrower shallhave executed and delivered to the Administrative Agent a disbursementauthorization letter with respect to the disbursement of the proceeds of theLoans made on the Effective Date.

#####  

##### (i)            The AdministrativeAgent shall have received (x) evidence of the repayment in full of theexisting credit arrangements under the February 12, 2004 Credit Agreementand the termination of all commitments to lend thereunder and (y) such otherdocuments, and completed such other reviews, including, without limitation,material leases and contracts, litigation and taxes, as the AdministrativeAgent or its counsel shall reasonably deem necessary.

#####  

TheAdministrative Agent shall notify the Borrower and the Lenders of the EffectiveDate, and such notice shall be conclusive and binding.  Notwithstanding the foregoing, theobligations of the Lenders to make Loans hereunder shall not become effectiveunless each of the foregoing conditions is satisfied (or waived pursuant to Section 9.02)at or prior to 3:00 p.m., New York City time, on March 15, 2005 (and,in the event such conditions are not so satisfied or waived, the Commitmentsshall terminate at such time).

 

Section 4.02.          EachCredit Event.  The obligation of anyLender to make a Loan on the occasion of any Borrowing, is subject to the satisfactionon such date of the following conditions:

 

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##### (a)           The representationsand warranties of the Borrower set forth in this Agreement shall be true andcorrect on and as of the date of such Borrowing; provided that any suchrepresentations and warranties that by their express terms are made as of aspecific date shall be true and correct as of such specific date.

#####  

##### (b)           At the time of andimmediately after giving effect to such Borrowing, no Default shall haveoccurred and be continuing.

#####  

Each Borrowingshall be deemed to constitute a representation and warranty by the Borrower onthe date thereof as to the matters specified in paragraphs (a) and (b) ofthis Section.

 

ARTICLE V

 

Affirmative Covenants

 

Until theCommitments have expired or been terminated and the principal of and intereston each Loan and all fees and other Obligations payable hereunder have beenpaid in full, and all Letters of Credit shall have expired or terminated andall LC Disbursements shall have been reimbursed, the Borrower covenants andagrees with the Lenders that:

 

Section 5.01.          Financial and Business Information.  The Borrower shall deliver to theAdministrative Agent and each Lender:

 

##### (a)           QuarterlyStatements — within 60 days after the end of each quarterly fiscal periodin each fiscal year of the Borrower (other than the last quarterly fiscalperiod of each such fiscal year), duplicate copies of:

#####  

###### (i)            a consolidatedbalance sheet of the Borrower and its Restricted Subsidiaries as at the end ofsuch quarter, and

######  

###### (ii)           consolidatedstatements of income, changes in shareholders’ equity and cash flows of theBorrower and its Restricted Subsidiaries for such quarter and (in the case ofthe second and third quarters) for the portion of the fiscal year ending withsuch quarter,

######  

setting forthin each case in comparative form the figures for the corresponding periods inthe previous fiscal year, all in reasonable detail, prepared in accordance withGAAP applicable to quarterly financial statements generally, and certified by aSenior Financial Officer as fairly presenting, in all material respects, thefinancial position of the companies being reported on and their results ofoperations and cash flows, subject to changes resulting from year-endadjustments; provided that if the Borrower’s Quarterly Report on Form 10-Qprepared in compliance with the requirements therefor and filed with theSecurities and Exchange Commission (“*SEC*”)is required to be delivered within a shorter time period, then the Borrower’scompliance with the requirements of this Section 5.01(a) must besatisfied by complying with such shorter time period (subject always to theBorrower’s compliance with Section 5.04);

 

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##### (b)           Annual Statements— within 120 days after the end of each fiscal year of the Borrower, duplicatecopies of,

#####  

###### (i)            a consolidatedbalance sheet of the Borrower and its Restricted Subsidiaries, as at the end ofsuch year, and

######  

###### (ii)           consolidatedstatements of income, changes in shareholders’ equity and cash flows of theBorrower and its Restricted Subsidiaries, for such year,

######  

setting forthin each case in comparative form the figures for the previous fiscal year, allin reasonable detail, prepared in accordance with GAAP, and accompanied by:

 

(1)           anunqualified opinion thereon of independent certified public accountants ofrecognized national standing, which opinion shall state that such financialstatements present fairly, in all material respects, the financial position ofthe companies being reported upon and their results of operations and cashflows and have been prepared in conformity with GAAP, and that the examinationof such accountants in connection with such financial statements has been madein accordance with generally accepted auditing standards, and that such auditprovides a reasonable basis for such opinion in the circumstances, and

 

(2)           acertificate of such accountants stating that they have reviewed this Agreementand stating further whether, in making their audit, they have become aware ofany condition or event that then constitutes a Default, and, if they are awarethat any such condition or event then exists, specifying the nature and periodof the existence thereof (it being understood that such accountants shall notbe liable, directly or indirectly, for any failure to obtain knowledge of anyDefault unless such accountants should have obtained knowledge thereof inmaking an audit in accordance with generally accepted auditing standards or didnot make such an audit),

 

providedthat if the Borrower’s Annual Report on Form 10-K for such fiscalyear (together with the Borrower’s annual report to shareholders, if any,prepared pursuant to Rule 14a-3 under the Exchange Act) prepared inaccordance with the requirements therefor and filed with the SEC is required tobe delivered within a shorter time period, then the Borrower’s compliance withthe requirements of this Section 5.01(b) (other than the accountant’scertificate described in clause (2) above which may be deliveredwithin said 120-day period), must be satisfied by complying with suchshorter time period (subject to the Borrower’s compliance with Section 5.04);

 

##### (c)           SEC and OtherReports — promptly upon their becoming available, one copy of (i) eachfinancial statement, report, notice or proxy statement sent by the Borrower orany Subsidiary to public securities holders generally, and (ii) eachregular or periodic report (other than Form 8K so long as such Form maybe accessed on-line and Borrower has notified the Administrative Agent thatsuch form has been filed), each registration statement (without exhibits exceptas expressly requested by a Lender), and

 

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##### eachprospectus and all amendments thereto filed by the Borrower or any Subsidiarywith the SEC;

#####  

##### (d)           Notice of Defaultor Event of Default — promptly, and in any event within five Business Daysafter a Responsible Officer becoming aware of the existence of any Default orthat any Person has given any notice or taken any action with respect to aclaimed default hereunder or that any Person has given any notice or taken anyaction with respect to a claimed default or that any Person has given anynotice or taken any action with respect to a claimed default of the typereferred to in subparagraph (f) of Article VII, a written noticespecifying the nature and period of existence thereof and what action theBorrower is taking or proposes to take with respect thereto;

#####  

##### (e)           ERISA Matters— promptly, and in any event within five Business Days after a ResponsibleOfficer becoming aware of any of the following, a written notice setting forththe nature thereof and the action, if any, that the Borrower or an ERISAAffiliate proposes to take with respect thereto:

#####  

###### (i)            with respect to anyPlan, any reportable event, as defined in Section 4043(b) of ERISAand the regulations thereunder, for which notice thereof has not been waivedpursuant to such regulations as in effect on the date hereof; or

######  

###### (ii)           the taking by thePBGC of steps to institute, or the threatening by the PBGC of the institutionof, proceedings under Section 4042 of ERISA for the termination of, or theappointment of a trustee to administer, any Plan, or the receipt by theBorrower or any ERISA Affiliate of a notice from a Multiemployer Plan that suchaction has been taken by the PBGC with respect to such Multiemployer Plan; or

######  

###### (iii)          any ERISA Event orany event, transaction or condition that could result in the incurrence of anyliability by the Borrower or any ERISA Affiliate pursuant to Title I or IVof ERISA or the penalty or excise tax provisions of the Code relating toemployee benefit plans, or in the imposition of any Lien on any of the rights,properties or assets of the Borrower or any ERISA Affiliate pursuant toTitle I or IV of ERISA or such penalty or excise tax provisions, if suchliability or Lien, taken together with any other such liabilities or Liens thenexisting, could reasonably be expected to have a Material Adverse Effect;

######  

##### (f)            Notices fromGovernmental Authority — promptly, and in any event within 30 days ofreceipt thereof, copies of any notice to the Borrower or any Subsidiary fromany Federal, state or foreign Governmental Authority relating to any order,ruling, statute or other law or regulation that could reasonably be expected tohave a Material Adverse Effect; and

#####  

##### (g)           RequestedInformation — with reasonable promptness, such other data and informationrelating to the business, operations, affairs, financial condition, assets orproperties of the Borrower or any of its Subsidiaries or relating to theability of the

 

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##### Borrower toperform its obligations hereunder and under the other Financing Documents asfrom time to time may be reasonably requested by the Administrative Agent orany Lender.

#####  

Section 5.02.          Officer’s Certificate.  The Borrower shall deliver to theAdministrative Agent and each Lender within 60 days after the end of eachquarterly fiscal period in each fiscal year of the Borrower (other than thelast quarterly fiscal period of each such fiscal year) and within 120 daysafter the end of each fiscal year of the Borrower, a certificate in the form ofExhibit E of a Senior Financial Officer setting forth:

 

##### (a)           CovenantCompliance — the information (including detailed calculations) required inorder to establish whether the Borrower was in compliance with the requirementsof Section 6.01 through Section 6.05 hereof, inclusive, and Section 6.10,during the quarterly or annual period covered by the most recent statementsfurnished (including with respect to each such Section, where applicable, thecalculations of the maximum or minimum amount, ratio or percentage, as the casemay be, permissible under the terms of such Sections, and the calculation ofthe amount, ratio or percentage then in existence); and

#####  

##### (b)           Event of Default— a statement that such officer has reviewed the relevant terms hereof and hasmade, or caused to be made, under his or her supervision, a review of thetransactions and conditions of the Borrower and its Subsidiaries from thebeginning of the quarterly or annual period covered by the most recentstatements furnished to the date of the certificate and that such review shallnot have disclosed the existence during such period of any condition or eventthat constitutes a Default or, if any such condition or event existed or exists(including, without limitation, any such event or condition resulting from thefailure of the Borrower or any Subsidiary to comply with any EnvironmentalLaw), specifying the nature and period of existence thereof and what action theBorrower shall have taken or proposes to take with respect thereto.

#####  

Section 5.03.          Inspection. The Borrower shall permit the representatives of the AdministrativeAgent and each Lender:

 

##### (a)           No Default —if no Default under Article VI or Subsection (b) of Article VIIhereof or no Event of Default then exists, at the expense of such Lender or theAdministrative Agent and upon reasonable prior notice to the Borrower, to visitthe principal executive office of the Borrower, to discuss the affairs,finances and accounts of the Borrower and its Restricted Subsidiaries with theBorrower’s officers, and (with the consent of the Borrower, which consent willnot be unreasonably withheld) its independent public accountants, and (with theconsent of the Borrower, which consent will not be unreasonably withheld) tovisit the other offices and properties of the Borrower and each RestrictedSubsidiary, all at such reasonable times and as often as may be reasonablyrequested in writing; and

#####  

##### (b)           Default — ifa Default under Article VI or Subsection (b) of Article VIIhereof or an Event of Default then exists, at the expense (all of whichexpenses shall be reasonable) of the Borrower, to visit and inspect any of theoffices or properties of the

 

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##### Borrower orany Restricted Subsidiary, to examine all their respective books of account,records, reports and other papers, to make copies and extracts therefrom, andto discuss their respective affairs, finances and accounts with theirrespective officers and independent public accountants (and by this provisionthe Borrower authorizes said accountants to discuss the affairs, finances andaccounts of the Borrower and its Restricted Subsidiaries), all at such timesand as often as may be requested.

#####  

Section 5.04.          Reporting Treatment of Unrestricted Subsidiaries.  Notwithstanding anything to the contrarycontained in this Agreement, so long as the Unrestricted Subsidiaries continueto constitute, in the aggregate, less than 7% of Consolidated TotalCapitalization in any fiscal period, the Borrower shall be permitted toinclude, for purposes of the financial reporting requirements contained inSections 5.01(a) and (b), and only for purposes of such Sections (andin no event for purposes of determining compliance with any of the covenantscontained in this Article V or Article VI hereof), the financialinformation of such entities on a consolidated basis.  If at any time the Unrestricted Subsidiariesshall constitute, in the aggregate, 7% or more of Consolidated TotalCapitalization in any fiscal period, the Borrower shall, notwithstanding that Section 5.01(a) and(b) permit the Borrower to comply therewith by delivery of its QuarterlyReports on SEC Form 10-Q and Annual Reports on SEC Form 10-K,either:  (a) provide consolidatingfinancial statements setting forth separately the financial information for theUnrestricted Subsidiaries for such period, together with the financialinformation of such entities on a consolidated basis for purposes of thefinancial reporting requirements contained in Sections 5.01(a) and (b) andonly for purposes of such Sections (and in no event for purposes of determiningcompliance with any of the covenants contained in this Article V or Article VIhereof) or (b) exclude the financial information on a consolidated basisfor the Unrestricted Subsidiaries from the consolidated financial statementsrequired to be delivered by the Borrower for such period pursuant toSections 5.01(a) and (b).  Inno event shall the Borrower include financial information of the UnrestrictedSubsidiaries for purposes of any determination of compliance with any of thecovenants contained in this Article V or Article VI hereof.

 

Section 5.05.          Compliance with Law. The Borrower will, and will cause each of its Subsidiaries to, complywith all laws, ordinances or governmental rules or regulations to whicheach of them is subject, including, without limitation, ERISA and allEnvironmental Laws, and will obtain and maintain in effect all licenses,certificates, permits, franchises and other governmental authorizationsnecessary to the ownership of their respective properties or to the conduct oftheir respective businesses, in each case to the extent necessary to ensurethat non-compliance with such laws, ordinances or governmental rules orregulations or failures to obtain or maintain in effect such licenses,certificates, permits, franchises and other governmental authorizations couldnot, individually or in the aggregate, reasonably be expected to have aMaterial Adverse Effect.

 

Section 5.06.          Insurance. The Borrower will, and will cause each of its Subsidiaries to, maintain,with financially sound and reputable insurers, insurance with respect to theirrespective properties and businesses against such casualties and contingencies,of such types, on such terms and in such amounts (including deductibles,co-insurance and self-insurance, if adequate reserves are maintained withrespect thereto) as is customary in the case of

 

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##### entities of established reputations engaged in the same or a similarbusiness and similarly situated.

 

Section 5.07.          Maintenance of Properties.  The Borrower will, and will cause each of itsSubsidiaries to, maintain and keep, or cause to be maintained and kept, theirrespective properties in good repair, working order and condition (other thanordinary wear and tear), so that the business carried on in connectiontherewith may be properly conducted at all times; provided that this Section shallnot prevent the Borrower or any Subsidiary from discontinuing the operation andthe maintenance of any of its properties if such discontinuance is desirable inthe conduct of its business and the Board of Directors of the Borrower hasconcluded that such discontinuance could not, individually or in the aggregate,reasonably be expected to have a Material Adverse Effect.

 

Section 5.08.          Payment of Taxes and Claims.  The Borrower will, and will cause each of itsSubsidiaries to, file all tax returns required to be filed in any jurisdictionand to pay and discharge all taxes shown to be due and payable on such returns andall other taxes, assessments, governmental charges, or levies imposed on themor any of their properties, assets, income or franchises, to the extent suchtaxes and assessments have become due and payable and before they have becomedelinquent and all claims for which sums have become due and payable that haveor might become a Lien on properties or assets of the Borrower or anyRestricted Subsidiary; provided that neither the Borrower nor anySubsidiary need pay any such tax or assessment or claims if (a) theamount, applicability or validity thereof is contested by the Borrower or suchSubsidiary on a timely basis in good faith and in appropriate proceedings, andthe Borrower or a Subsidiary has established adequate reserves therefor inaccordance with GAAP on the books of the Borrower or such Subsidiary or (b) thenonpayment of all such taxes and assessments, governmental charges, levies andclaims in the aggregate could not reasonably be expected to have a MaterialAdverse Effect.

 

Section 5.09.          Corporate Existence, Etc.  The Borrower will at all times preserve andkeep in full force and effect its corporate existence and will keep properbooks of record and account reflecting its business and activities.  Subject to Section 6.05, the Borrowerwill at all times preserve and keep in full force and effect the corporateexistence of each of its Subsidiaries (unless merged into the Borrower or aSubsidiary) and all rights and franchises of the Borrower and its Subsidiariesunless, in the good faith judgment of the Borrower, the termination of orfailure to preserve and keep in full force and effect such corporate existence,right or franchise could not, individually or in the aggregate, have a MaterialAdverse Effect.

 

Section 5.10.          Natureof Business.  Neither the Borrowernor any Restricted Subsidiary will engage in any business if, as a result, thegeneral nature of the business, taken on a consolidated basis, which would thenbe engaged in by the Borrower and its Restricted Subsidiaries would be substantiallychanged from the general nature of the business engaged in by the Borrower andits Restricted Subsidiaries on the date of this Agreement.

 

Section 5.11.          AdditionalGuarantors.  The Borrower will, andwill cause its Subsidiaries to, promptly inform the Administrative Agent of thecreation or acquisition of any direct or indirect Subsidiary (subject to theprovisions of Section 6.05) and cause each direct or indirect Subsidiarynot in existence on the date hereof to enter into a Guarantee substantially in

 

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the form of Exhibit D.  In connection therewith, the Borrower or anyapplicable Subsidiary shall provide such resolutions, certificates and opinionsof counsel as shall be reasonably requested by the Administrative Agent.

 

ARTICLE VI

 

Negative Covenants

 

Until theCommitments have expired or terminated and the principal of and interest oneach Loan and all fees and other Obligations payable hereunder have been paidin full and all Letters of Credit have expired or terminated and all LCDisbursements shall have been reimbursed, the Borrower covenants and agreeswith the Lenders that:

 

Section 6.01.          FinancialRatios.

 

### (a)           The Borrower will not at any timepermit the ratio determined at the end of each fiscal quarter on a rolling fourquarter basis of (i) Consolidated EBITDA to (ii) ConsolidatedInterest Expense to be less than 3.00:1.00*.*

###  

### (b)           The Borrower will not at any timepermit the ratio of (i) Consolidated Indebtedness to (ii) ConsolidatedTotal Capitalization to be more than .45 to 1.00.

###  

### (c)           The Borrower will not at any timepermit the ratio of (i) Consolidated Priority Indebtedness to (ii) ConsolidatedTotal Capitalization to be more than .15 to 1.00.

###  

### (d)           The Borrower will not at any timepermit the ratio determined at the end of each fiscal quarter on a rolling fourfiscal quarter basis of (i) Consolidated Indebtedness to (ii) ConsolidatedAdjusted EBITDA to be greater than 4.25:1.00.

###  

Section 6.02.          Limitationon Indebtedness.  The Borrower willnot, and will not permit any Subsidiary to, create, incur, assume or permit toexist any Indebtedness, except if both before and after giving effect to anysuch creation, incurrence or assumption the Borrower is in compliance with Section 6.01hereof.

 

Section 6.03.          Limitationon Liens.  The Borrower will not, andwill not permit any Restricted Subsidiary to, create or incur, or suffer to beincurred or to exist, any Lien on its or their property or assets, whether nowowned or hereafter acquired, or upon any income or profits therefrom, ortransfer any property for the purpose of subjecting the same to the payment ofobligations in priority to the payment of its or their general creditors, oracquire or agree to acquire, or permit any Subsidiary to acquire, any propertyor assets upon conditional sales agreements or other title retention devices,except:

 

##### (a)           Liens for propertytaxes and assessments or governmental charges or levies and Liens securingclaims or demands of mechanics and materialmen; provided that paymentthereof is not at the time required by Section 5.08;

 

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##### (b)           Liens of orresulting from any judgment or award, the time for the appeal or petition forrehearing of which shall not have expired, or in respect of which the Borroweror a Restricted Subsidiary shall at any time in good faith be prosecuting anappeal or proceeding for a review and in respect of which a stay of executionpending such appeal or proceeding for review shall have been secured;

#####  

##### (c)           Liens incidental tothe conduct of business or the ownership of properties and assets (includingLiens in connection with worker’s compensation, unemployment insurance andother like laws, warehousemen’s and attorneys’ liens and statutory landlords’liens) and Liens to secure the performance of bids, tenders or trade contracts,or to secure statutory obligations, surety or appeal bonds or other Liens oflike general nature, in any such case incurred in the ordinary course ofbusiness and not in connection with the borrowing of money; provided in eachcase, the obligation secured is not overdue or, if overdue, is being contestedin good faith by appropriate actions or proceedings;

#####  

##### (d)           minor surveyexceptions or minor encumbrances, easements or reservations, or rights ofothers for rights-of-way, utilities and other similar purposes, or zoning orother restrictions as to the use of real properties, which are necessary forthe conduct of the activities of the Borrower and its Restricted Subsidiaries orwhich customarily exist on properties of corporations engaged in similaractivities and similarly situated and which do not in any event materiallyimpair their use in the operation of the business of the Borrower and itsRestricted Subsidiaries;

#####  

##### (e)           Liens securingIndebtedness of a Restricted Subsidiary to the Borrower or to anotherWholly-owned Restricted Subsidiary;

#####  

##### (f)            Liens existing onthe date hereof as scheduled on Schedule 6.03 annexed hereto;

#####  

##### (g)           Liens on fixed orcapital assets acquired, constructed or improved by the Borrower or anySubsidiary; provided that (i) such security interests secureIndebtedness permitted by Section 6.02, (ii) such Liens and theIndebtedness secured thereby are incurred prior to or within 90 days aftersuch acquisition or the completion of such construction or improvement, (iii) theIndebtedness secured thereby does not exceed 100% of the cost of acquiring,constructing or improving such fixed or capital assets and (iv) suchsecurity interests shall not apply to any other property or assets of theBorrower or any Subsidiary;

#####  

##### (h)           Other Liens securingIndebtedness other than as described in the foregoing clauses (a) through(g) above, provided that the Indebtedness secured by all such otherLiens does not exceed at any time ten percent of the total consolidated assetsof the Borrower and its Restricted Subsidiaries.

#####  

Section 6.04.          Limitationon Sale and Leasebacks.  The Borrowerwill not, and will not permit any Restricted Subsidiary to, enter into anyarrangement, directly or indirectly, whereby the Borrower or such RestrictedSubsidiary shall in one or more related transactions

 

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sell, transfer orotherwise dispose of any property owned by the Borrower or such RestrictedSubsidiary more than 180 days after the later of the date of initialacquisition of such property or completion or occupancy thereof, as the casemay be, by the Borrower or such Restricted Subsidiary, and then rent or lease,as lessee, such property or any part thereof (a “*Sale and Leaseback Transaction*”); provided that theforegoing restriction shall not apply to any Sale and Leaseback Transaction ifimmediately after the consummation of such Sale and Leaseback Transaction andafter giving effect thereto, any of the following conditions is satisfied:

 

##### (a)           the lease relatingto such Sale and Leaseback Transaction is not a Long-Term Lease; or

#####  

##### (b)           the sale of propertyrelating to such Sale and Leaseback Transaction constitutes a sale of suchproperty by a Restricted Subsidiary to the Borrower or to a Wholly-ownedRestricted Subsidiary or by the Borrower to a Wholly-owned RestrictedSubsidiary; or

#####  

##### (c)           the sale of suchproperty is for cash consideration which (after deduction of any expensesincurred by the Borrower or any Restricted Subsidiary in connection with suchSale and Leaseback Transaction) equals or exceeds the fair market value of theproperty so sold (as determined in good faith by the Board of Directors of theBorrower) and the net proceeds from such sale are applied to either (i) thepurchase or acquisition (and, in the case of real property, the construction)of fixed assets useful and intended to be used by the Borrower or a RestrictedSubsidiary in the operation of the business of the Borrower and its RestrictedSubsidiaries as described in Section 5.10 hereof (provided that inany such event the Borrower and its Restricted Subsidiaries shall not then orthereafter cause or permit or agree or consent to cause or permit such tangibleassets to be subject to any Lien) or (ii) the prepayment with theapplicable prepayment premium, if any, on a *prorata* basis, of Senior Funded Debt of the Borrower; providedthat if any such Senior Funded Debt so prepaid constitutes Indebtednessoutstanding under any revolving credit or similar credit facility, suchprepayment shall result in a permanent reduction of the Indebtedness which theBorrower and its Restricted Subsidiaries may incur thereunder by an amount atleast equal to the amount of the prepayment of such Senior Funded Debt; or

#####  

##### (d)           after giving effectto the consummation of such Sale and Leaseback Transaction and to theapplication of the proceeds therefrom, no Default would exist.

#####  

Section 6.05.          Mergers,Consolidations and Sales of Assets and Acquisitions.  (a)  Except with respect to a Permitted Acquisition, the Borrowerwill not, and will not permit any Restricted Subsidiary to, consolidate with orbe a party to a merger with any other Person, or sell, lease or otherwisedispose of all or substantially all of its assets or acquire the assets orstock or business of any Person, provided that any Restricted Subsidiarymay merge or consolidate with or into the Borrower or any Wholly-ownedRestricted Subsidiary so long as in (1) any merger or consolidationinvolving the Borrower, the Borrower shall be the surviving or continuingcorporation and (2) any merger or consolidation involving a Wholly-ownedRestricted Subsidiary (and not the Borrower), the Wholly-owned RestrictedSubsidiary shall be the surviving or continuing corporation.

 

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### (b)           The Borrower will not, and will notpermit any Restricted Subsidiary to, sell, lease, transfer, abandon orotherwise dispose of assets (except as provided in this Section 6.05); providedthat the foregoing restrictions do not apply to:

###  

###### (i)            the sale, lease,transfer or other disposition of assets of a Restricted Subsidiary to theBorrower or a Wholly-owned Restricted Subsidiary;

######  

###### (ii)           the sale ofinventory in the ordinary course of business; or

######  

###### (iii)          the sale of assetsfor cash or other property to a Person or Persons other than an Affiliate ifall of the following conditions are met:

######  

a.             such assets (valued at net bookvalue) do not, together with all other assets of the Borrower and itsRestricted Subsidiaries previously disposed of during the immediately precedingtwelve calendar month period, exceed 10% of the total consolidated assets ofthe Borrower and its Restricted Subsidiaries, determined by reference to theConsolidated balance of the Borrower twelve months prior to the month in whichsuch disposition occurs;

 

b.             in the opinion of the Borrower’sBoard of Directors, the sale is for fair value and is in the best interests ofthe Borrower; and

 

c.             immediately after the consummationof the transaction and after giving effect thereto, no Default would exist.

 

Section 6.06.          Transactionswith Affiliates.  The Borrower willnot, and will not permit any Restricted Subsidiary to, enter into or be a partyto any transaction or arrangement with any Affiliate (including, withoutlimitation, the purchase from, sale to or exchange of property with, or therendering of any service by or for, any Affiliate), except in the ordinarycourse of and pursuant to the reasonable requirements of the Borrower’s or suchRestricted Subsidiary’s business and upon fair and reasonable terms no lessfavorable to the Borrower or such Restricted Subsidiary than would obtain in acomparable arm’s-length transaction with a Person other than an Affiliate.

 

Section 6.07.          Designationof Subsidiaries.  The Borrower maydesignate or redesignate any Unrestricted Subsidiary as a Restricted Subsidiaryand may designate or redesignate any Restricted Subsidiary as an UnrestrictedSubsidiary only with the prior written consent of the Required Lenders.  If the Required Lenders consent to thedesignation of a Restricted Subsidiary as an Unrestricted Subsidiary and aftergiving effect thereto, then (i) such Unrestricted Subsidiary so designatedshall not, directly or indirectly, own any Indebtedness or capital stock of theBorrower or any Restricted Subsidiary, and (ii) the designation of suchRestricted Subsidiary as an Unrestricted Subsidiary shall be deemed to be asale or other disposition of assets to be consummated within the limitations ofSection 6.05(b)(iii).  If theRequired Lenders consent to the designation of an Unrestricted Subsidiary as aRestricted Subsidiary and after giving effect thereto, then all existing Liensof such Restricted Subsidiary so designated shall be permitted within theapplicable limitations of Section 6.03.

 

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Section 6.08.          Modificationof Operating Documents.  The Borrowerwill not, and will not permit any of its Restricted Subsidiaries to, modify,amend or alter their operating agreements, certificates or articles ofincorporation or other constitutive documents in a manner which could have aMaterial Adverse Effect or would otherwise be materially disadvantageous to theLenders.

 

Section 6.09.          RestrictiveAgreements.  The Borrower will not,and will not permit any of its Restricted Subsidiaries to, directly orindirectly, enter into, incur or permit to exist any agreement or otherarrangement that prohibits, restricts or imposes any condition upon (a) theability of the Borrower or any Restricted Subsidiary to create, incur or permitto exist any Lien upon any of its property or assets, or (b) the abilityof any Subsidiary to pay dividends or other distributions with respect to anyshares of its capital stock or to make or repay loans or advances to theBorrower or any other Restricted Subsidiary or to Guarantee Indebtedness of theBorrower or any other Subsidiary; provided that (i) the foregoingshall not apply to restrictions and conditions imposed by law or by thisAgreement, (ii) the foregoing shall not apply to restrictions andconditions under the Senior Note Agreement existing on the date hereof (butshall apply to any amendment or modification expanding the scope or durationof, any such restriction or condition), (iii) the foregoing shall notapply to customary restrictions and conditions contained in agreements relatingto the sale of a Restricted Subsidiary or any asset pending such sale, providedsuch restrictions and conditions apply only to the Restricted Subsidiary orasset that is to be sold and such sale is permitted hereunder, (iv) clause (a) ofthe foregoing shall not apply to restrictions or conditions imposed by anyagreement relating to Liens permitted by this Agreement if such restrictions orconditions apply only to the property or assets subject to such permitted Lienand (v) clause (a) of the foregoing shall not apply to customaryprovisions in leases, licenses and other contracts restricting the assignmentthereof.

 

Section 6.10.          RestrictedPayments.  The Borrower will not, andwill not permit any of its Subsidiaries to, declare or make, or agree to pay ormake, directly or indirectly (including, without limitation, on a syntheticbasis through Swap Agreements), any Restricted Payment, except (a) theBorrower may declare and pay dividends with respect to its Equity Interestspayable solely in additional Equity Interests, (b) Subsidiaries maydeclare and pay dividends ratably with respect to their Equity Interests, (c) theBorrower may make Restricted Payments pursuant to and in accordance with optionplans or other benefit plans for management or employees of the Borrower andits Subsidiaries, (d) the Borrower may declare and pay cash dividends onits Equity Interests not to exceed $6,000,000 in any fiscal year so long as atthe time thereof and immediately after giving effect thereto no Default shallhave occurred and be continuing and (e) the Borrower may make otherRestricted Payments in any fiscal quarter of any fiscal year in addition tothose permitted under (c) and (d) above so long as (i) at thetime thereof and immediately after giving effect thereto the aggregate amountof such payments in such fiscal year does not exceed the sum of $25,000,000 plus50% of Consolidated Net Income for the previous fiscal year less allRestricted Payments previously made in cash in the current fiscal year pursuantto subparagraphs (c) and (d) above and this subparagraph (e) and(ii) as at the time thereof and immediately after giving effect thereto noDefault shall have occurred and be continuing.

 

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ARTICLE VII

 

Events of Default

 

If any of thefollowing events (“Events of Default”) shall occur:

 

##### (a)           the Borrower shallfail to pay any principal of any Loan or any reimbursement obligation inrespect to any LC Disbursement when and as the same shall become due andpayable, whether at the due date thereof or at a date fixed for prepaymentthereof or otherwise and solely in the case of any reimbursement obligationssuch default shall continue for a period of one Business Day;

#####  

##### (b)           the Borrower shallfail to pay any interest on any Loan, the Revolving Credit Commitment Fee orany other fee or any other amount (other than an amount referred to inclause (a) of this Article) payable under this Agreement or any otherFinancing Document, when and as the same shall become due and payable and suchdefault shall continue for a period of five consecutive days;

#####  

##### (c)           any representationor warranty made or deemed made by the Borrower or any Restricted Subsidiary orGuarantor in the Financing Documents, or in any report, certificate, financialstatement or other document furnished pursuant to the Financing Documents,shall prove to have been incorrect in any material respect as of the date whenmade or deemed made;

#####  

##### (d)           the Borrower shallfail to observe or perform any covenant, condition or agreement contained in Section 3.15,5.01 (a) through (d), 5.02, 5.09 or in Article VI;

#####  

##### (e)           the Borrower or anyRestricted Subsidiary or Guarantor shall fail to observe or perform anycovenant, condition or agreement contained in this Agreement (other than thosespecified in clause (a), (b) or (d) of this Article) or anyother Financing Document, and such failure shall continue unremedied for aperiod of 15 days after the Borrower receives notice of such default fromthe Administrative Agent (which notice shall be given at the request of anyLender);

#####  

##### (f)            Borrower or anyRestricted Subsidiary or Guarantor (i) fails to make any payment when due(whether by scheduled maturity, required prepayment, acceleration, demand, orotherwise) in respect of any Material Indebtedness (other than Indebtednesshereunder), or (ii) fails to observe or perform any other agreement orcondition relating to any such Indebtedness or contained in any instrument oragreement evidencing, securing or relating thereto, or any other event occurs,the effect of which default or other event is to cause, or to permit the holderor holders or the beneficiary or beneficiaries of such Indebtedness (or atrustee or agent on behalf of such holder or holders or beneficiary orbeneficiaries) to cause, with the giving of notice if required, suchIndebtedness to be demanded or to become due or to be repurchased, prepaid,defeased or redeemed (automatically or otherwise), or an offer to repurchase,prepay, defease or redeem such Indebtedness to be made, prior to its statedmaturity, or cash collateral in respect thereof to be demanded;

 

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##### (g)           an involuntaryproceeding shall be commenced or an involuntary petition shall be filed seeking(i) liquidation, reorganization or other relief in respect of the Borroweror any Restricted Subsidiary or Guarantor or its debts, or of a substantialpart of its assets, under any Federal, state or foreign bankruptcy, insolvency,receivership or similar law now or hereafter in effect or (ii) theappointment of a receiver, trustee, custodian, sequestrator, conservator orsimilar official for the Borrower or any Restricted Subsidiary or Guarantor orfor a substantial part of its assets, and, in any such case, such proceeding orpetition shall continue undismissed for 60 days or an order or decreeapproving or ordering any of the foregoing shall be entered;

#####  

##### (h)           the Borrower or anyRestricted Subsidiary or Guarantor shall (i) voluntarily commence anyproceeding or file any petition seeking liquidation, reorganization or otherrelief under any Federal, state or foreign bankruptcy, insolvency, receivershipor similar law now or hereafter in effect, (ii) consent to the institutionof, or fail to contest in a timely and appropriate manner, any proceeding orpetition described in clause (g) of this Article, (iii) applyfor or consent to the appointment of a receiver, trustee, custodian,sequestrator, conservator or similar official for the Borrower or anyRestricted Subsidiary or Guarantor or for a substantial part of its assets, (iv) filean answer admitting the material allegations of a petition filed against it inany such proceeding, (v) make a general assignment for the benefit ofcreditors or (vi) take any action for the purpose of effecting any of theforegoing;

#####  

##### (i)            the Borrower or anyRestricted Subsidiary or Guarantor shall become unable, admit in writing itsinability or fail generally to pay its debts as they become due;

#####  

##### (j)            one or morejudgments for the payment of money in an aggregate amount in excess of$5,000,000 (not covered by insurance where the carrier has acceptedresponsibility) shall be rendered against the Borrower, any RestrictedSubsidiary or Guarantor or any combination thereof and the same shall remainundischarged for a period of 60 consecutive days during which executionshall not be effectively stayed, or any action shall be legally taken by ajudgment creditor to attach or levy upon any material assets of the Borrower orany Subsidiary to enforce any such judgment;

#####  

##### (k)           an ERISA Event shallhave occurred that, in the opinion of the Required Lenders, when taken togetherwith all other ERISA Events that have occurred, could reasonably be expected toresult in a Material Adverse Effect;

#####  

##### (l)            a Change in Controlshall occur;

#####  

##### (m)          any of the FinancingDocuments shall for any reason cease to be, or shall be asserted by any Personobligated thereunder not to be, a legal, valid and binding obligation of suchPerson;

#####  

then, and inevery such event (other than an event with respect to the Borrower described inclause (g) or (h) of this Article), and at any time thereafterduring the continuance of such event, the Administrative Agent may, and at therequest of the Required Lenders shall, by notice to the Borrower, take any oneor more of the following actions, at the same or different times:

 

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(i) terminatethe Revolving Loan Commitments, and thereupon the Revolving Loan Commitmentsshall terminate immediately, (ii) declare the Loans then outstanding to bedue and payable in whole (or in part, in which case any principal not so declaredto be due and payable may thereafter be declared to be due and payable), andthereupon the principal of the Loans so declared to be due and payable,together with accrued interest thereon and all fees and other obligations ofthe Borrower accrued hereunder, shall become due and payable immediately,without presentment, demand, protest or other notice of any kind, all of whichare hereby waived by the Borrower, (iii) require that the Borrower depositcash collateral to the extent of the LC Exposure or (iv) exercise anyother rights or remedies available under the Financing Documents or applicablelaw; and in case of any event with respect to the Borrower described inclause (g) or (h) of this Article, the Revolving LoanCommitments shall automatically terminate and the principal of the Loans thenoutstanding, together with accrued interest thereon and all fees and otherobligations of the Borrower accrued hereunder, shall automatically become dueand payable, without presentment, demand, protest or other notice of any kind(except as specifically provided for herein), all of which are hereby waived bythe Borrower.

 

ARTICLE VIII

 

The Administrative Agent

 

Each of theLenders hereby irrevocably appoints the Administrative Agent as its agent andauthorizes the Administrative Agent to take such actions on its behalf and toexercise such powers as are delegated to the Administrative Agent by the termshereof and the other Financing Documents, together with such actions and powersas are reasonably incidental thereto.

 

The bankserving as the Administrative Agent hereunder and under the other FinancingDocuments shall have the same rights and powers in its capacity as a Lender asany other Lender and may exercise the same as though it were not theAdministrative Agent and such bank and its Affiliates may accept deposits from,lend money to and generally engage in any kind of business with the Borrower orany Subsidiary or other Affiliate thereof as if it were not the AdministrativeAgent hereunder.

 

The AdministrativeAgent shall not have any duties or obligations except those expressly set forthherein or in the other Financing Documents. Without limiting the generality of the foregoing, (a) theAdministrative Agent shall not be subject to any fiduciary or other impliedduties, regardless of whether a Default has occurred and is continuing, (b) theAdministrative Agent shall not have any duty to take any discretionary actionor exercise any discretionary powers, except discretionary rights and powersexpressly contemplated hereby or thereby that the Administrative Agent isrequired to exercise in writing by the Required Lenders (or such other numberor percentage of the Lenders as shall be necessary under the circumstances asprovided in Section 9.02), and (c) except as expressly set forthherein, the Administrative Agent shall not have any duty to disclose, and shallnot be liable for any failure to disclose, any information relating to theBorrower or any of its Subsidiaries that is communicated to or obtained by thebank serving as Administrative Agent or any of its Affiliates in anycapacity.  The Administrative Agent shallnot be liable for any action taken or not taken

 

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by it with the consent or atthe request of the Required Lenders (or such other number or percentage of theLenders as shall be necessary under the circumstances as provided in Section 9.02)or in the absence of its own gross negligence or wilful misconduct.  The Administrative Agent shall be deemed notto have knowledge of any Default unless and until written notice thereof isgiven to the Administrative Agent by the Borrower or a Lender, and theAdministrative Agent shall not be responsible for or have any duty to ascertainor inquire into (i) any statement, warranty or representation made in orin connection with this Agreement, (ii) the contents or accuracy of anycertificate, report or other document delivered hereunder or in connectionherewith, (iii) the performance or observance of any of the covenants,agreements or other terms or conditions set forth herein, (iv) thevalidity, enforceability, effectiveness or genuineness of this Agreement or anyother agreement, instrument or document, or (v) the satisfaction of anycondition set forth in Article IV or elsewhere herein, other than toconfirm receipt of items expressly required to be delivered to theAdministrative Agent.

 

TheAdministrative Agent shall be entitled to rely upon, and shall not incur anyliability for relying upon, any notice, request, certificate, consent,statement, instrument, document or other writing believed by it to be genuineand to have been signed or sent by the proper Person.  The Administrative Agent also may rely uponany statement made to it orally or by telephone and believed by it to be madeby the proper Person, and shall not incur any liability for relyingthereon.  The Administrative Agent mayconsult with legal counsel (who may be counsel for the Borrower), independentaccountants and other experts selected by it, and shall not be liable for anyaction taken or not taken by it in accordance with the advice of any suchcounsel, accountants or experts.

 

TheAdministrative Agent may perform any and all of its duties and exercise itsrights and powers by or through any one or more sub-agents appointed by theAdministrative Agent.  The AdministrativeAgent and any such sub-agent may perform any and all its duties and exerciseits rights and powers through their respective Related Parties.  The exculpatory provisions of the precedingparagraphs shall apply to any such sub-agent and to the Related Parties of theAdministrative Agent and any such sub-agent, and shall apply to theirrespective activities in connection with the syndication of the creditfacilities provided for herein as well as activities as Administrative Agent.

 

In the eventthat a petition seeking relief under Title 11 of the United States Code orany other Federal, state or foreign bankruptcy, insolvency, liquidation orsimilar law is filed by or against the Borrower or any other Person obligatedunder the Financing Document, the Administrative Agent is authorized, to thefullest extent permitted by applicable law, to file a proof of claim on behalfof itself and the Lenders in such proceeding for the total amount ofobligations owed by such Person.  Withrespect to any such proof of claim which the Administrative Agent may file,each Lender acknowledges that without reliance on such proof of claim, suchLender shall make its own evaluation as to whether an individual proof of claimmust be filed in respect of such obligations owed to such Lender and, if so,take the steps necessary to prepare and timely file such individual claim.

 

Subject to theappointment and acceptance of a successor Administrative Agent as provided inthis paragraph, the Administrative Agent may resign at any time by notifyingthe Lenders, the Issuing Bank and the Borrower. Upon any such resignation, the Required Lenders

 

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shall have the right, with theapproval of the Borrower (not to be unreasonably withheld, except that no suchapproval shall be required upon the occurrence and continuance of an Event ofDefault), to appoint a successor.  If nosuccessor shall have been so appointed by the Required Lenders and shall haveaccepted such appointment within 30 days after the retiring AdministrativeAgent gives notice of its resignation, then the retiring Administrative Agentmay, on behalf of the Lenders, appoint a successor Administrative Agent whichshall be a bank with an office in New York, New York, or an Affiliate of anysuch bank with such an office.  Upon theacceptance of its appointment as Administrative Agent hereunder by a successor,such successor shall succeed to and become vested with all the rights, powers,privileges and duties of the retiring Administrative Agent, and the retiringAdministrative Agent shall be discharged from its duties and obligationshereunder.  The fees payable by theBorrower to a successor Administrative Agent shall be the same as those payableto its predecessor unless otherwise agreed between the Borrower and suchsuccessor.  After the AdministrativeAgent’s resignation hereunder, the provisions of this Article and Section 9.03shall continue in effect for the benefit of such retiring Administrative Agent,its sub-agents and their respective Related Parties in respect of any actionstaken or omitted to be taken by any of them while it was acting asAdministrative Agent.

 

Each Lenderacknowledges that it has, independently and without reliance upon theAdministrative Agent or any other Lender and based on such documents andinformation as it has deemed appropriate, made its own credit analysis anddecision to enter into this Agreement. Each Lender also acknowledges that it will, independently and withoutreliance upon the Administrative Agent or any other Lender and based on suchdocuments and information as it shall from time to time deem appropriate,continue to make its own decisions in taking or not taking action under orbased upon this Agreement, any related agreement or any document furnishedhereunder or thereunder.  Each Lenderacknowledges the potential conflict of interest of each other Lender as a resultof Lenders holding disproportionate interests in the Loans, and expresslyconsents to and waives any claim based upon such conflict of interest.

 

The partieshereto agree that the titles Co-Syndication Agent and Documentation Agent arehonorary and confer no duties upon such agents, except as a Lender hereunder.

 

ARTICLE IX

 

Miscellaneous

 

Section 9.01.          Notices.  (a)  Except in the case of noticesand other communications expressly permitted to be given by telephone (andsubject to paragraph (b) below), all notices and other communicationsprovided for herein shall be in writing and shall be delivered by hand orovernight courier service, mailed by certified or registered mail or sent bytelecopy, as follows:

 

###### (i)            if to the Borrower,to it at 9333 Balboa Avenue, San Diego, CA 92123, Attention of John D. Thomas(Telecopy No. 858-505-1548) with copies for informationalpurposes only to Assistant General Counsel (Telecopy No. 858-505-1559);

 

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###### (ii)           if to theAdministrative Agent, to JPMorgan Chase Bank, N.A., 1111 Fannin, 10th Floor,Houston, Texas 77002, Attention of Alice H. Telles (Telecopy No. 713-750-2938)with copies for information purposes only to Jeffrey M. Epstein, Esq.,Kaye Scholer LLP, 425 Park Avenue, New York, New York 10022 (Telecopy No. 212-836-6475),and Joseph Eitel, 1999 Avenue of the Stars, Los Angeles, California 90067(Telecopy No. 310-860-7110); and

######  

###### (iii)          if to any otherLender, to it at its address (or telecopy number) set forth in itsAdministrative Questionnaire.

######  

### (b)           Notices and other communications tothe Lenders hereunder may be delivered or furnished by electroniccommunications pursuant to procedures approved by the Administrative Agent; providedthat the foregoing shall not apply to notices pursuant to Article II unlessotherwise agreed by the Administrative Agent and the applicable Lender.  The Administrative Agent or the Borrower may,in its discretion, agree to accept notices and other communications to ithereunder by electronic communications pursuant to procedures approved by it; providedthat approval of such procedures may be limited to particular notices orcommunications.

###  

### (c)           Any party hereto may change itsaddress or telecopy number for notices and other communications hereunder bynotice to the other parties hereto.  Allnotices and other communications given to any party hereto in accordance withthe provisions of this Agreement shall be deemed to have been given on the dateof receipt.

###  

Section 9.02.          Waivers;Amendments.  (a)  Nofailure or delay by the Administrative Agent, or any Lender in exercising anyright or power hereunder shall operate as a waiver thereof, nor shall anysingle or partial exercise of any such right or power, or any abandonment ordiscontinuance of steps to enforce such a right or power, preclude any other orfurther exercise thereof or the exercise of any other right or power.  The rights and remedies of the AdministrativeAgent and the Lenders hereunder are cumulative and are not exclusive of anyrights or remedies that they would otherwise have.  No waiver of any provision of this Agreementor consent to any departure by the Borrower therefrom shall in any event beeffective unless the same shall be permitted by paragraph (b) of thisSection, and then such waiver or consent shall be effective only in thespecific instance and for the purpose for which given.  Without limiting the generality of theforegoing, the making of a Loan shall not be construed as a waiver of anyDefault, regardless of whether the Administrative Agent or any Lender may havehad notice or knowledge of such Default at the time.

 

### (b)           Neither this Agreement nor anyprovision hereof nor any provision of any other Financing Document hereof maybe waived, amended or modified except pursuant to an agreement or agreements inwriting entered into by the Borrower and the Required Lenders or by theBorrower and the Administrative Agent with the consent of the Required Lenders;provided that no such agreement shall (i) increase the Commitmentof any Lender without the written consent of such Lender, (ii) reduce theprincipal amount of any Loan or Note or reduce the rate of interest thereon, orreduce any fees payable hereunder, without the written consent of each Lenderdirectly affected thereby, (iii) postpone the Maturity Date or thescheduled date of payment of the principal amount of any Loan, or any interestthereon, or any fees payable

 

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### hereunder, or reduce the amount of, waive or excuse any such payment orpostpone the scheduled date of expiration of any Commitment, without thewritten consent of each Lender directly affected thereby, (iv) change Section 2.17(b) or(c) in a manner that would alter the pro rata sharing of payments requiredthereby, without the written consent of each Lender, (v) release anyGuarantee (other than in accordance with its terms), forego any additionalGuarantee pursuant to Section 5.11 or modify the 85% requirement in thedefinition of “Guarantor” without the written consent of each Lender or (vii) changeany of the provisions of this Section or the definition of “RequiredLenders” or any other provision hereof specifying the number or percentage ofLenders required to waive, amend or modify any rights hereunder or make anydetermination or grant any consent hereunder, without the written consent ofeach Lender; providedfurther that no such agreement shall amend,modify or otherwise affect the rights or duties of the Administrative Agenthereunder without the prior written consent of the Administrative Agent.

###  

Section 9.03.          Expenses;Indemnity; Damage Waiver.  (a)  TheBorrower shall pay (i) all reasonable out-of-pocket expenses incurred bythe Administrative Agent and its Affiliates, including the reasonable fees,charges and disbursements of counsel for the Administrative Agent, inconnection with the syndication of the credit facilities provided for herein,the preparation of this Agreement or any amendments, modifications or waiversrequested by the Borrower of the provisions hereof (whether or not thetransactions contemplated hereby or thereby shall be consummated), (ii) duringthe continuance of a Default, all out-of-pocket expenses incurred by theAdministrative Agent or any Lender, including the fees, charges anddisbursements of any counsel for the Administrative Agent or any Lender, inconnection with the enforcement or protection of its rights in connection withthis Agreement, including its rights under this Section, or in connection withthe Loans made hereunder, including all such out-of-pocket expenses incurredduring any workout, restructuring or negotiations in respect of such Loans.

 

### (b)           The Borrower shall indemnify theAdministrative Agent and each Lender, and each Related Party of any of theforegoing Persons (each such Person being called an “Indemnitee”)against, and hold each Indemnitee harmless from, any and all losses, claims,damages, liabilities and related expenses, including the fees, charges anddisbursements of any counsel for any Indemnitee, incurred by or assertedagainst any Indemnitee arising out of, in connection with, or as a result of (i) theexecution or delivery of this Agreement or any agreement or instrumentcontemplated hereby, the performance by the parties hereto of their respectiveobligations hereunder or the consummation of the Transactions or any othertransactions contemplated hereby, (ii) any Loan or the use of the proceedstherefrom, (iii) any actual or alleged presence or release of HazardousMaterials on or from any property owned or operated by the Borrower or any ofits Subsidiaries, or any Environmental Liability related in any way to theBorrower or any of its Subsidiaries, or (iv) any actual or prospectiveclaim, litigation, investigation or proceeding relating to any of theforegoing, whether based on contract, tort or any other theory and regardlessof whether any Indemnitee is a party thereto; provided that suchindemnity shall not, as to any Indemnitee, be available to the extent that suchlosses, claim, damages, liabilities or related expenses are determined by acourt of competent jurisdiction by final and nonappealable judgment to haveresulted from the gross negligence or wilful misconduct of suchIndemnitee.  Without limiting thegenerality of the foregoing and in addition to any indemnity provided forherein, the Borrower shall pay, and hold each Indemnitee

 

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### harmless from, any civil penalty or fine assessed by the U.S.Department of the Treasury’s Office of Foreign Assets Control against anyIndemnitee, and all reasonable costs and expenses (including counsel fees anddisbursements) incurred in connection with the defense thereof, arising as aresult of the funding of Loans or the issuance of Lender Letters of Credit orLetter of Credit Participation Agreement or the acceptance of any payments madeunder a Loan Document.

###  

### (c)           To the extent that the Borrower failsto pay any amount required to be paid by it to the Administrative Agent underparagraph (a) or (b) of this Section, each Lender severallyagrees to pay to the Administrative Agent, such Lender’s pro rata share(determined as of the time that the applicable unreimbursed expense orindemnity payment is sought and based upon the outstanding principal balance ofthe Revolving Credit Exposure) of such unpaid amount; provided that theunreimbursed expense or indemnified loss, claim, damage, liability or relatedexpense, as the case may be, was incurred by or asserted against theAdministrative Agent in its capacity as such.

###  

### (d)           To the extent permitted by applicablelaw, the Borrower shall not assert, and hereby waives, any claim against anyIndemnitee, on any theory of liability, for special, indirect, consequential orpunitive damages (as opposed to direct or actual damages) arising out of, inconnection with, or as a result of, this Agreement or any agreement orinstrument contemplated hereby, the Transactions, any Loan or the use of theproceeds thereof.

###  

### (e)           All amounts due under this Section shallbe payable promptly after written demand therefor.

###  

Section 9.04.          Successorsand Assigns.  (a)  Theprovisions of this Agreement shall be binding upon and inure to the benefit ofthe parties hereto and their respective successors and assigns permittedhereby, except that (i) the Borrower may not assign or otherwise transferany of its rights or obligations hereunder without the prior written consent ofeach Lender (and any attempted assignment or transfer by the Borrower withoutsuch consent shall be null and void) and (ii) no Lender may assign orotherwise transfer its rights or obligations hereunder except in accordancewith this Section.  Nothing in thisAgreement, expressed or implied, shall be construed to confer upon any Person(other than the parties hereto, their respective successors and assignspermitted hereby and, to the extent expressly contemplated hereby, the RelatedParties of each of the Administrative Agent and the Lenders) any legal orequitable right, remedy or claim under or by reason of this Agreement.

 

### (b)           (i)  Subject to theconditions set forth in paragraph (b)(ii) below, any Lender mayassign to one or more assignees all or a portion of its rights and obligationsunder this Agreement (including all or a portion of its Commitment and theLoans at the time owing to it) with the prior written consent (such consent notto be unreasonably withheld) of:

###  

(A)          the Borrower, providedthat no consent of the Borrower shall be required for an assignment to aLender, an Affiliate of a Lender, an Approved Fund (as defined below) or, if anEvent of Default under Article VII has occurred and is continuing, anyother assignee; and

 

60

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(B)           the AdministrativeAgent.

 

(ii)           Assignments shallbe subject to the following additional conditions:

 

(A)          except in the case ofan assignment to a Lender or an Affiliate of a Lender or an assignment of theentire remaining amount of the assigning Lender’s Commitment or Loans, theamount of the Commitment or Loans of the assigning Lender subject to each suchassignment (determined as of the date the Assignment and Assumption withrespect to such assignment is delivered to the Administrative Agent) shall notbe less than $5,000,000 and such assigning Lender shall retain Commitments ofnot less than $10,000,000, unless each of the Borrower and the AdministrativeAgent otherwise consent, provided that no such consent of the Borrowershall be required if an Event of Default under Article VII has occurredand is continuing;

 

(B)           each partialassignment shall be made as an assignment of a proportionate part of all theassigning Lender’s rights and obligations under this Agreement;

 

(C)           the assignor andassignee to each assignment shall execute and deliver to the AdministrativeAgent an Assignment and Assumption, together with a processing and recordationfee of $3,500; and

 

(D)          the assignee, if itshall not be a Lender, shall deliver to the Administrative Agent anAdministrative Questionnaire.

 

For thepurposes of this Section 9.04(b), the term “Approved Fund” shall have thefollowing meaning:

 

“ApprovedFund” means any Person (other than a natural person) that is engaged inmaking, purchasing or investing in loans and similar extensions of credit inthe ordinary course of business and that is administered or managed by (a) aLender, (b) an Affiliate of a Lender or (c) an entity or an Affiliateof an entity that administers or manages a Lender.

 

(iii)          Subject to acceptanceand recording thereof pursuant to paragraph (b)(iv) of this Section,from and after the effective date specified in each Assignment and Assumptionthe assignee thereunder shall be a party hereto and, to the extent of theinterest assigned by such Assignment and Assumption, have the rights andobligations of a Lender under this Agreement, and the assigning Lenderthereunder shall, to the extent of the interest assigned by such Assignment andAssumption, be released from its obligations under this Agreement (and, in thecase of an Assignment and Assumption covering all of the assigning Lender’srights and obligations under this Agreement, such Lender shall cease to be aparty hereto but shall continue to be entitled to the benefits ofSections 2.14, 2.15, 2.16 and 9.03). Any assignment or transfer by a Lender of rights or obligations underthis Agreement that does not comply with this

 

61

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Section 9.04 shall be treated forpurposes of this Agreement as a sale by such Lender of a participation in suchrights and obligations in accordance with paragraph (c) of thisSection.

 

(iv)          The AdministrativeAgent, acting for this purpose as an agent of the Borrower, shall maintain atone of its offices a copy of each Assignment and Assumption delivered to it anda register for the recordation of the names and addresses of the Lenders, andthe Commitment of, and principal amount of the Loans owing to, each Lenderpursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall beconclusive, absent manifest error, and the Borrower, the Administrative Agentand the Lenders may treat each Person whose name is recorded in the Registerpursuant to the terms hereof as a Lender hereunder for all purposes of thisAgreement, notwithstanding notice to the contrary.  The Register shall be available forinspection by the Borrower and any Lender, at any reasonable time and from timeto time upon reasonable prior notice.

 

(v)           Upon its receipt ofa duly completed Assignment and Assumption executed by an assigning Lender andan assignee, the assignee’s completed Administrative Questionnaire (unless theassignee shall already be a Lender hereunder), the processing and recordationfee referred to in paragraph (b) of this Section, any Note or Notessubject to such assignment and any written consent to such assignment requiredby paragraph (b) of this Section, the Administrative Agent shallaccept such Assignment and Assumption and record the information containedtherein in the Register.  No assignmentshall be effective for purposes of this Agreement unless it has been recordedin the Register as provided in this paragraph. Upon notice to the Borrower, at the Borrower’s expense, the Borrowershall execute and deliver to the Administrative Agent in exchange for suchsurrendered Notes, new Notes to the order of the assignee in an amount equal tothe portion of the Commitments assumed by it pursuant to such Assignment andAssumption and, if the assigning Lender has retained any Commitment hereunder,new Notes to the order of the assigning Lender in an amount equal to theCommitment retained by it hereunder.

 

### (c)           (i)  Any Lender may,without the consent of the Borrower or the Administrative Agent, sell participationsto one or more banks or other entities (a “Participant”) in all or aportion of such Lender’s rights and obligations under this Agreement (includingall or a portion of its Commitments and the Loans owing to it); provided that(A) such Lender’s obligations under this Agreement shall remain unchanged,(B) such Lender shall remain solely responsible to the other partieshereto for the performance of such obligations and (C) the Borrower, theAdministrative Agent and the other Lenders shall continue to deal solely anddirectly with such Lender in connection with such Lender’s rights andobligations under this Agreement.  Anyagreement or instrument pursuant to which a Lender sells such a participationshall provide that such Lender shall retain the sole right to enforce thisAgreement and to approve any amendment, modification or waiver of any provisionof this Agreement; provided that such agreement or instrument mayprovide that such Lender will not, without the consent of the Participant,agree to any amendment, modification or waiver described in the first provisoto

 

62

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### Section 9.02(b) that affects such Participant.  Subject to paragraph (c)(ii) ofthis Section, the Borrower agrees, to the fullest extent permitted underapplicable law, that each Participant shall be entitled to the benefits ofSections 2.14, 2.15 and 2.16 to the same extent as if it were a Lender andhad acquired its interest by assignment pursuant to paragraph (b) ofthis Section.  To the extent permitted bylaw, each Participant also shall be entitled to the benefits of Section 9.08as though it were a Lender, provided such Participant agrees to be subject to Section 2.17(c) asthough it were a Lender.

###  

(ii)           A Participant shallnot be entitled to receive any greater payment under Section 2.14 or 2.16than the applicable Lender would have been entitled to receive with respect tothe participation sold to such Participant, unless the sale of theparticipation to such Participant is made with the Borrower’s prior writtenconsent.  A Participant that would be aForeign Lender if it were a Lender shall not be entitled to the benefits of Section 2.16unless the Borrower is notified of the participation sold to such Participantand such Participant agrees, for the benefit of the Borrower, to comply with Section 2.16(e) asthough it were a Lender.

 

### (d)           Any Lender may at any time pledge orassign a security interest in all or any portion of its rights under thisAgreement and the Notes issued to such Lender to secure obligations of suchLender, including any pledge or assignment to secure obligations to a FederalReserve Bank, and this Section shall not apply to any such pledge orassignment of a security interest; provided that no such pledge orassignment of a security interest shall release a Lender from any of itsobligations hereunder or substitute any such pledgee or assignee for suchLender as a party hereto.

###  

Section 9.05.          Survival.  All covenants, agreements, representationsand warranties made by the Borrower herein and in the certificates or otherinstruments delivered in connection with or pursuant to this Agreement shall beconsidered to have been relied upon by the other parties hereto and shallsurvive the execution and delivery of this Agreement and the making of anyLoans regardless of any investigation made by any such other party or on itsbehalf and notwithstanding that the Administrative Agent or any Lender may havehad notice or knowledge of any Default or incorrect representation or warrantyat the time any credit is extended hereunder, and shall continue in full forceand effect as long as the principal of or any accrued interest on any Loan orany fee or any other amount payable under this Agreement is outstanding and unpaidand so long as the Commitments have not expired or terminated.  The provisions of Sections 2.14, 2.15,2.16 and 9.03 and Article VIII shall survive and remain in full force andeffect regardless of the consummation of the transactions contemplated hereby,the repayment of the Loans, the expiration or termination of the Commitments orthe termination of this Agreement or any provision hereof.

 

Section 9.06.          Counterparts;Integration; Effectiveness.  ThisAgreement may be executed in counterparts (and by different parties hereto ondifferent counterparts), each of which shall constitute an original, but all ofwhich when taken together shall constitute a single contract.  This Agreement, the other Financing Documentsand any separate letter agreements with respect to fees payable to theAdministrative Agent constitute the entire contract among the parties relatingto the subject matter hereof and supersede any and all previous agreements and

 

63

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understandings,oral or written, relating to the subject matter hereof.  Except as provided in Section 4.01, thisAgreement shall become effective when it shall have been executed by theAdministrative Agent and when the Administrative Agent shall have receivedcounterparts hereof which, when taken together, bear the signatures of each ofthe other parties hereto, and thereafter shall be binding upon and inure to thebenefit of the parties hereto and their respective successors and assigns.  Delivery of an executed counterpart of asignature page of this Agreement by telecopy shall be effective asdelivery of a manually executed counterpart of this Agreement.

 

Section 9.07.          Severability.  Any provision of this Agreement held to beinvalid, illegal or unenforceable in any jurisdiction shall, as to suchjurisdiction, be ineffective to the extent of such invalidity, illegality orunenforceability without affecting the validity, legality and enforceability ofthe remaining provisions hereof, and the invalidity of a particular provisionin a particular jurisdiction shall not invalidate such provision in any otherjurisdiction.

 

Section 9.08.          Rightof Setoff.  If an Event of Defaultshall have occurred and be continuing, each Lender and each of its Affiliatesis hereby authorized at any time and from time to time, to the fullest extentpermitted by law, to set off and apply any and all deposits (general orspecial, time or demand, provisional or final) at any time held and otherobligations at any time owing by such Lender or Affiliate to or for the creditor the account of the Borrower or its Subsidiaries against any of and all theobligations of the Borrower or its Subsidiaries now or hereafter existing underthis Agreement held by such Lender, irrespective of whether or not such Lendershall have made any demand under this Agreement and although such obligationsmay be unmatured.  The rights of eachLender under this Section are in addition to other rights and remedies(including other rights of setoff) which such Lender may have.

 

Section 9.09.          GOVERNINGLAW; Jurisdiction; Consent to Service of Process.  (a)  **THIS AGREEMENT, IN ACCORDANCE WITH SECTION 5-1401 OF THEGENERAL OBLIGATION LAW OF THE STATE OF NEW YORK, SHALL BE CONSTRUED INACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUTREGARD TO ANY CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THEAPPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.**

 

### (b)           The Borrower hereby irrevocably andunconditionally submits, for itself and its property, to the nonexclusivejurisdiction of the Supreme Court of the State of New York sitting in New YorkCounty and of the United States District Court for the Southern District of NewYork, and any appellate court from any thereof, in any action or proceedingarising out of or relating to this Agreement, or for recognition or enforcementof any judgment, and each of the parties hereto hereby irrevocably andunconditionally agrees that all claims in respect of any such action orproceeding may be heard and determined in such New York State or, to the extentpermitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any suchaction or proceeding shall be conclusive and may be enforced in otherjurisdictions by suit on the judgment or in any other manner provided bylaw.  Nothing in this Agreement shallaffect any right that the Administrative Agent or any Lender may otherwise haveto bring any action or proceeding relating to this Agreement against theBorrower or its properties in the courts of any jurisdiction.

 

64

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### (c)           The Borrower hereby irrevocably andunconditionally waives, to the fullest extent it may legally and effectively doso, any objection which it may now or hereafter have to the laying of venue ofany suit, action or proceeding arising out of or relating to this Agreement inany court referred to in paragraph (b) of this Section.  Each of the parties hereto hereby irrevocablywaives, to the fullest extent permitted by law, the defense of an inconvenientforum to the maintenance of such action or proceeding in any such court.

###  

### (d)           Each party to this Agreementirrevocably consents to service of process in the manner provided for noticesin Section 9.01.  Nothing in this Agreementwill affect the right of any party to this Agreement to serve process in anyother manner permitted by law.

###  

Section 9.10.          WAIVEROF JURY TRIAL.  EACH PARTY HERETOHEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVETO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUTOF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NOREPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLYOR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEKTO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHERPARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHERTHINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

Section 9.11.          Headings.  Article and Section headings andthe Table of Contents used herein are for convenience of reference only, arenot part of this Agreement and shall not affect the construction of, or betaken into consideration in interpreting, this Agreement.

 

Section 9.12.          Confidentiality.  Each of the Administrative Agent and theLenders agrees to maintain the confidentiality of the Information (as definedbelow), except that Information may be disclosed (a) to its and itsAffiliates’ directors, officers, employees and agents, including accountants,rating agencies, portfolio management servicers, legal counsel and otheradvisors (it being understood that the Persons to whom such disclosure is madewill be informed of the confidential nature of such Information and instructedto keep such Information confidential), (b) to the extent requested by anyregulatory authority, (c) to the extent required by applicable laws orregulations or by any subpoena or similar legal process, (d) to any otherparty to this Agreement, (e) in connection with the exercise of anyremedies hereunder or any suit, action or proceeding relating to this Agreementor the enforcement of rights hereunder, (f) subject to an agreementcontaining provisions substantially the same as those of this Section, to anyassignee of or Participant in, or any prospective assignee of or Participantin, any of its rights or obligations under this Agreement in which caseBorrower shall be notified of the name of such assignee or participant and theAdministrative Agent and the Borrower shall be provided with an executed copyof such confidentiality agreement, (g) with the consent of the Borrower or(h) to the extent such Information (i) becomes publicly availableother than as a result of a breach of this Section or (ii) becomesavailable to the Administrative Agent or any Lender on a nonconfidential basisfrom a source other than the Borrower. Notwithstanding the foregoing, each of the Administrative Agent and theLenders may disclose to any and all Persons, without

 

65

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limitation of anykind, the tax treatment and tax structure of the Transactions and all materialsof any kind (including opinions and tax analysis) that have been provided tosuch Persons relating to the tax treatment and tax structure of theTransactions.  For the purposes of thisSection, “Information” means all information received from the Borrowerrelating to the Borrower or its business, other than any such information thatis available to the Administrative Agent or any Lender on a nonconfidentialbasis prior to disclosure by the Borrower; provided that, in the case ofinformation received from the Borrower after the date hereof, such informationis clearly identified at the time of delivery as confidential.  Any Person required to maintain theconfidentiality of Information as provided in this Section shall be consideredto have complied with its obligation to do so if such Person has exercised thesame degree of care to maintain the confidentiality of such Information as suchPerson would accord to its own confidential information.

 

Section 9.13.          InterestRate Limitation.  Notwithstandinganything herein to the contrary, if at any time the interest rate applicable toany Loan, together with all fees, charges and other amounts which are treatedas interest on such Loan under applicable law (collectively the “Charges”),shall exceed the maximum lawful rate (the “Maximum Rate”) which may becontracted for, charged, taken, received or reserved by the Lender holding suchLoan in accordance with applicable law, the rate of interest payable in respectof such Loan hereunder, together with all Charges payable in respect thereof,shall be limited to the Maximum Rate and, to the extent lawful, the interestand Charges that would have been payable in respect of such Loan but were notpayable as a result of the operation of this Section shall be cumulatedand the interest and Charges payable to such Lender in respect of other Loansor periods shall be increased (but not above the Maximum Rate therefor) untilsuch cumulated amount, together with interest thereon at the Federal FundsEffective Rate to the date of repayment, shall have been received by suchLender.

 

Section 9.14.          USAPatriot Act.  Each Lender herebynotifies the Borrower that pursuant to the requirements of the USA Patriot Act(Title III of Pub. L. 107-56 (signed into law October 26,2001)) (the “Act”), it is required to obtain, verify and recordinformation that identifies the Borrower, which information includes the nameand address of the Borrower and other information that will allow such Lenderto identify the Borrower in accordance with the Act.

 

66

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IN WITNESSWHEREOF, the parties hereto have caused this Agreement to be duly executed bytheir respective authorized officers as of the day and year first abovewritten.

 

 
|   | CUBIC  CORPORATION, Borrower                                                      |
|--------|-----------------------------------------------------------------------------------|
|   |                                                                              |   |
|   |                                                                              |   |
|   | By:                                                                               |   |
|   |                                                                              | Name: |
|   |                                                                              | Title: |
|   |                                                                              |   |
|   |                                                                              |   |
|   | By:                                                                               |   |
|   |                                                                              | Name: |
|   |                                                                              | Title: |
|   |                                                                              |   |
|   |                                                                              |   |
|   | JPMORGAN  CHASE BANK, N.A. individually  and as Administrative Agent and a Lender |
|   |                                                                              |   |
|   |                                                                              |   |
|   | By:                                                                               |   |
|   |                                                                              | Name: |
|   |                                                                              | Title: |
|   |                                                                              |   |
|   |                                                                              |   |
|   | UNION BANK  OF CALIFORNIA, N.A., as a  Lender                                     |
|   |                                                                              |   |
|   |                                                                              |   |
|   | By:                                                                               |   |
|   |                                                                              | Name: |
|   |                                                                              | Title: |

 

----

 
|   | CALYON NEW  YORK BRANCH, as a Lender               |
|--------|----------------------------------------------------|
|   |                                               |   |
|   |                                               |   |
|   | By:                                                |   |
|   |                                               | Name: |
|   |                                               | Title: |
|   |                                               |   |
|   |                                               |   |
|   | By:                                                |   |
|   |                                               | Name: |
|   |                                               | Title: |
|   |                                               |   |
|   |                                               |   |
|   | WACHOVIA  BANK, NATIONAL  ASSOCIATION, as a Lender |
|   |                                               |   |
|   |                                               |   |
|   | By:                                                |   |
|   |                                               | Name: |
|   |                                               | Title: |
|   |                                               |   |
|   |                                               |   |
|   | BANK OF THE  WEST, as a Lender                     |
|   |                                               |
|   |                                               |   |
|   | By:                                                |   |
|   |                                               | Name: |
|   |                                               | Title: |
|   |                                               |   |
|   |                                               |   |
|   | HARRIS  NESBITT FINANCING, INC., as a  Lender      |
|   |                                               |   |
|   |                                               |   |
|   | By:                                                |   |
|   |                                               | Name: |
|   |                                               | Title: |

 

----

 

SCHEDULE 2.01

 

Commitments

 
| **Lender**                          | ** ** | **Revolving Credit  Commitment** | ** ** | **Approximate  Percentage of  Total  Revolving Credit  Commitment** | ** ** |
|-------------------------------------|------------|----------------------------------|------------|---------------------------------------------------------------------|------------|
| ** **                          | ** ** | ** **                       | ** ** | ** **                                                          | ** ** |
| JPMorgan Chase Bank, N.A.           |       | $                                | 27,000,000 |                                                                | 18.00      | % |
|                                |       |                             |       |                                                                |       |
| Union Bank of California, N.A.      |       | $                                | 27,000,000 |                                                                | 18.00      | % |
|                                |       |                             |       |                                                                |       |
| Calyon New York Branch              |       | $                                | 27,000,000 |                                                                | 18.00      | % |
|                                |       |                             |       |                                                                |       |
| Wachovia Bank, National Association |       | $                                | 27,000,000 |                                                                | 18.00      | % |
|                                |       |                             |       |                                                                |       |
| Bank of the West                    |       | $                                | 21,000,000 |                                                                | 14.00      | % |
|                                |       |                             |       |                                                                |       |
| Harris Nesbitt Financing, Inc. |       | $                                | 21,000,000 |                                                                | 14.00      | % |

 

----

 

SCHEDULE 3.05

 

Disclosed Matters as to Litigation

 

There is noaction, suit or proceeding pending, or to the knowledge of the Borrowerthreatened against or affecting the Borrower or any of its RestrictedSubsidiaries before any arbitrator or any Governmental Authority which would inany material respect draw into question the enforceability of any of theFinancing Documents.

 

The Borrowerdoes not believe the following litigation matters could be reasonably expected,individually or in the aggregate, to result in a Material Adverse Effect, butwants the Lenders to be advised of the existence of such matters:

 

1.             Ministry of Defense and Supportfor the Armed Forces of the Islamic Republic (Iran) vs. Cubic Defense Systems, Inc.(“CDS”).  Arbitration in Switzerlandwas commenced in 1991 by Iran regarding the failure of an equipment deliveryfrom Cubic and cross-complaint by Cubic regarding monies owed.  The ICC Arbitration tribunal ruled in favorof Iran and awarded $2,800,000 plus interests and costs on December 8,1998.  The United States District Courtin  San Diego entered judgment enforcingthe arbitration award but denied Iran additional costs and attorneys’fees.  Cubic and Iran appealed the UnitedStates District Court decision to the 9th Circuit Court of Appealswhere a stay order was entered on November 2, 2001, which remains ineffect.  Under a 1995 Presidential ExecutiveOrder, all transactions by U.S. citizens with Iran are prohibited, therefore,even if the 9th Circuit affirms the order of the United StatesDistrict Court, it is presently unlikely Cubic would be permitted to pay thejudgment.  However, two U.S.-basedinterveners have attempted to attach any ultimate judgment in favor ofIran.  The Court of Appeals has approvedone lien (Elahi) and denied one (Flatow). Iran has asked the United States Court to review the approval of theElahi lien.  The Court’s response is notexpected for about seven months.  It isunclear whether Cubic would, under the Iran payment prohibition, be permittedto make payment to Elahi.  No appellatebriefing has been set.

 

2.             EABC vs. CTS and CTS-Australia.  Breach of alleged consulting contract.  Plaintiff seeks up to A$6M damages.  Cubic’s exposure appears to be none tominimal.

 

3.             PLS DCAA Audit.  DCAA Audit found claim for defectivepricing.  U.S. Army Contracting Officerissued final decision.  Appeal taken,currently in discovery and exploring arbitration.  $1.60 M potential exposure.

 

----

 

SCHEDULE 3.08

 

Disclosed Matters as to Environmental Compliance

 

None

 

----

 

SCHEDULE 3.16A

 

Restricted Subsidiaries

 
| **Subsidiary**                                              | ** ** | **Place of  Incorporation**     | ** ** | **Percentage  Owned** | ** ** |
|-------------------------------------------------------------|------------|---------------------------------|------------|-----------------------|------------|
| **CONSOLIDATED CONVERTING CO.**Whittier, California         |       | California                      |       | 100                   | %          |
|                                                        |       |                            |       |                  |       |
| **CUBIC APPLICATIONS, INC.**Lacey, Washington               |       | California                      |       | 100                   | %          |
|                                                        |       |                            |       |                  |       |
| **CUBIC COMMUNICATIONS, INC.**San Diego, California         |       | California                      |       | 100                   | %          |
|                                                        |       |                            |       |                  |       |
| **CUBIC DATA SYSTEMS, INC.**San Diego, California           |       | California                      |       | 90                    | %          |
|                                                        |       |                            |       |                  |       |
| **CUBIC DE MEXICO**  Tijuana, Mexico                        |       | Mexico                          |       | 100                   | %          |
|                                                        |       |                            |       |                  |       |
| **CUBIC DEFENSE APPLICATIONS, INC.**San Diego, California   |       | California                      |       | 100                   | %          |
|                                                        |       |                            |       |                  |       |
| **CUBIC FOREIGN SALES, INC.**San Diego, California          |       | St. Thomas  U.S. Virgin Islands |       | 100                   | %          |
|                                                        |       |                            |       |                  |       |
| **CUBIC HOLDINGS LTD.**Aukland, New Zealand                 |       | New Zealand                     |       | 100                   | %          |
|                                                        |       |                            |       |                  |       |
| **CUBIC LAND, INC.**San Diego, California                   |       | California                      |       | 100                   | %          |
|                                                        |       |                            |       |                  |       |
| **CUBIC TRANSPORTATION SYSTEMS, INC.**San Diego, California |       | California                      |       | 100                   | %          |

 

----

 
| **Subsidiary**                                                                                                            | ** ** | **Place of  Incorporation** | ** ** | **Percentage  Owned** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------|------------|-----------------------------|------------|-----------------------|------------|
| **CUBIC TRANSPORTATION SYSTEMS LIMITED**London, England  * (100% owned subsidiary of Cubic (UK) Limited)                  |       | England                     |       | 100                   | % *        |
|                                                                                                                      |       |                        |       |                  |       |
| **CUBIC TRANSPORTATION SYSTEMS (AUSTRALIA)  PTY LIMITED**    New South Wales, Australia                              |       | Australia                   |       | 100                   | % *        |
|                                                                                                                      |       |                        |       |                  |       |
| *  (50% owned subsidiary of Cubic Corporation  and  50% owned subsidiary of Cubic Transportation Systems, Inc.) |       |                        |       |                  |       |
|                                                                                                                      |       |                        |       |                  |       |
| **CUBIC (UK) LIMITED**London, England                                                                                     |       | England                     |       | 100                   | %          |
|                                                                                                                      |       |                        |       |                  |       |
| **CUBIC WORLDWIDE TECHNICAL SERVICES, INC.**San Diego, California                                                         |       | Delaware                    |       | 100                   | %          |
|                                                                                                                      |       |                        |       |                  |       |
| **CUBIC SIMULATION SYSTEMS, INC.**Orlando, Florida                                                                        |       | Delaware                    |       | 100                   | %          |
|                                                                                                                      |       |                        |       |                  |       |
| **OSCMAR INTERNATIONAL LIMITED**Auckland, New Zealand   *(100% owned subsidiary of Cubic Holdings Ltd.)                   |       | New Zealand                 |       | 100                   | % *        |
|                                                                                                                      |       |                        |       |                  |       |
| **TRAF - PARK**Montreal, Quebec, Canada                                                                                   |       | Canada                      |       | 100                   | %          |

 

----

 

SCHEDULE 3.16B

 

Unrestricted Subsidiaries

 

None

 

----

 

SCHEDULE 6.03

 

LIENS

 
| Security:            |   | First legal  charge over the premises at AFC House, Honeycrock Lane, Salford, Surrey, UK |
|----------------------|--------|------------------------------------------------------------------------------------------|
|                 |   |                                                                                     |
| Borrower:            |   | Cubic  Transportataion Systems, LTD                                                      |
|                 |   |                                                                                     |
| Creditor/Lienholder: |   | Barclays  Bank PLC                                                                       |
|                 |   |                                                                                     |
| Original  Balance:   |   | £  5,200,000.00                                                                     |
|                 |   |                                                                                     |
| Remaining  Balance:  |   | £  4,583,333.32                                                                     |
|                 |   |                                                                                     |
| Value Date:          |   | 02  December 2003                                                                   |
|                 |   |                                                                                     |
| Maturity  Date       |   | 03  December 2018                                                                   |
|                 |   |                                                                                     |
| Interest  Rate:      |   | Fixed at  6.4825%                                                                        |
|                 |   |                                                                                     |
| Payments:            |   | Quarterly  each March, June, September and December                                 |
|                 |   |                                                                                     |
| Next  Payment:       |   | £ 164,243.55  due 02 March 2005                                                |

 

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EXHIBIT A

 

FORM OFASSIGNMENT AND ASSUMPTION

 

ThisAssignment and Assumption (the “Assignment and Assumption”) is dated asof the Effective Date set forth below and is entered into by and between [*Insert name of Assignor*] (the “Assignor”)and [*Insert name of Assignee*](the “Assignee”).  Capitalizedterms used but not defined herein shall have the meanings given to them in theCredit Agreement identified below (as amended, the “Credit Agreement”),receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forthin Annex 1 attached hereto are hereby agreed to and incorporated herein byreference and made a part of this Assignment and Assumption as if set forthherein in full.

 

For an agreedconsideration, the Assignor hereby irrevocably sells and assigns to theAssignee, and the Assignee hereby irrevocably purchases and assumes from theAssignor, subject to and in accordance with the Standard Terms and Conditionsand the Credit Agreement, as of the Effective Date inserted by theAdministrative Agent as contemplated below (i) all of the Assignor’srights and obligations in its capacity as a Lender under the Credit Agreementand any other documents or instruments delivered pursuant thereto to the extentrelated to the amount and percentage interest identified below of all of suchoutstanding rights and obligations of the Assignor under the respectivefacilities identified below (including any guarantees included in suchfacilities) and (ii) to the extent permitted to be assigned underapplicable law, all claims, suits, causes of action and any other right of theAssignor (in its capacity as a Lender) against any Person, whether known orunknown, arising under or in connection with the Credit Agreement, any otherdocuments or instruments delivered pursuant thereto or the loan transactionsgoverned thereby or in any way based on or related to any of the foregoing,including contract claims, tort claims, malpractice claims, statutory claimsand all other claims at law or in equity related to the rights and obligationssold and assigned pursuant to clause (i) above (the rights andobligations sold and assigned pursuant to clauses (i) and (ii) abovebeing referred to herein collectively as the “Assigned Interest”).  Such sale and assignment is without recourseto the Assignor and, except as expressly provided in this Assignment andAssumption, without representation or warranty by the Assignor.

 
| Assignor:                                                       |               |   |
|-----------------------------------------------------------------|--------------------|--------|
|                                                            |               |
| Assignee:                                                       |               |   |
| [and is an  Affiliate/Approved Fund of [*identify  Lender*](1)] |
|                                                            |               |
| Borrower:                                                       | Cubic  Corporation |

 

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(1)           Select as applicable.

 

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AdministrativeAgent:  JPMorgan Chase Bank, N.A., as theadministrative agent under the Credit Agreement

 

CreditAgreement:  The $150,000,000 CreditAgreement dated as of March       , 2005among Cubic Corporation, the Lenders parties thereto, and JPMorgan Chase Bank,as Administrative Agent.

 

Assigned Interest

 
| **Facility  Assigned** | ** ** | **Aggregate Amount of  Commitment/Loans for  all Lenders** | ** ** | **Amount of  Commitment/Loans  Assigned** | ** ** | **Percentage Assigned  of  Commitment/Loans** | ** ** |
|------------------------|------------|------------------------------------------------------------|------------|-------------------------------------------|------------|-----------------------------------------------|------------|
| Revolving Commitment   |       | $                                                          |       | $                                         |       |                                          | %          |
|                   |       | $                                                          |       | $                                         |       |                                          | %          |
|                   |       | $                                                          |       | $                                         |       |                                          | %          |

 

EffectiveDate:                                ,20       [TO BE INSERTED BY ADMINISTRATIVE AGENTAND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THEREGISTER THEREFOR.]

 

The terms setforth in this Assignment and Assumption are hereby agreed to:

 
|   | ASSIGNOR            |
|--------|---------------------|
|   |                |   |
|   | [NAME OF  ASSIGNOR] |
|   |                |   |
|   |                |   |
|   | By:                 |   |   |
|   |                | Title: |
|   |                |   |
|   | ASSIGNEE            |
|   |                |   |
|   | [NAME OF  ASSIGNEE] |
|   |                |   |
|   |                |   |
|   | By:                 |   |   |
|   |                | Title: |

 

A-2

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| Consented to  and Accepted:    |   |
|--------------------------------|--------|
|                           |   |
| JPMORGAN  CHASE BANK, N.A., as |   |
|  Administrative Agent     |   |
|                           |   |
|                           |   |
| By                             |   |   |   |
|                           | Title: |   |
|                           |   |
|                           |   |
| [Consented  to:]               |   |
| CUBIC  CORPORATION             |   |
|                           |   |
|                           |   |
| By                             |   |   |   |
|                           | Title: |   |

 

A-3

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ANNEX 1

 

CUBICCORPORATION CREDIT AGREEMENT

 

STANDARD TERMSAND CONDITIONS FORASSIGNMENT AND ASSUMPTION

 

1.             Representations and Warranties.

 

SECTION 1.012     Assignor.  The Assignor (a) represents and warrantsthat (i) it is the legal and beneficial owner of the Assigned Interest, (ii) theAssigned Interest is free and clear of any lien, encumbrance or other adverseclaim and (iii) it has full power and authority, and has taken all actionnecessary, to execute and deliver this Assignment and Assumption and toconsummate the transactions contemplated hereby; and (b) assumes noresponsibility with respect to (i) any statements, warranties orrepresentations made in or in connection with the Credit Agreement or any otherFinancing Document, (ii) the execution, legality, validity,enforceability, genuineness, sufficiency or value of the Financing Documents orany collateral thereunder, (iii) the financial condition of the Borrower,any of its Subsidiaries or Affiliates or any other Person obligated in respectof any Financing Document or (iv) the performance or observance by theBorrower, any of its Subsidiaries or Affiliates or any other Person of any oftheir respective obligations under any Financing Document.

 

SECTION 1.022     Assignee.  The Assignee (a) represents and warrantsthat (i) it has full power and authority, and has taken all actionnecessary, to execute and deliver this Assignment and Assumption and to consummatethe transactions contemplated hereby and to become a Lender under the CreditAgreement, (ii) it satisfies the requirements, if any, specified in theCredit Agreement that are required to be satisfied by it in order to acquirethe Assigned Interest and become a Lender, (iii) from and after theEffective Date, it shall be bound by the provisions of the Credit Agreement asa Lender thereunder and, to the extent of the Assigned Interest, shall have theobligations of a Lender thereunder, (iv) it has received a copy of theCredit Agreement, together with copies of the most recent financial statementsdelivered pursuant to Section 5.01 thereof, as applicable, and such otherdocuments and information as it has deemed appropriate to make its own creditanalysis and decision to enter into this Assignment and Assumption and topurchase the Assigned Interest on the basis of which it has made such analysisand decision independently and without reliance on the Administrative Agent orany other Lender, and (v) if it is a Foreign Lender, attached to theAssignment and Assumption is any documentation required to be delivered by itpursuant to the terms of the Credit Agreement, duly completed and executed bythe Assignee; and (b) agrees that (i) it will, independently andwithout reliance on the Administrative Agent, the Assignor or any other Lender,and based on such documents and information as it shall deem appropriate at thetime, continue to make its own credit decisions in taking or not taking actionunder the Financing Documents, and (ii) it will perform in accordance withtheir terms all of the obligations which by the terms of the FinancingDocuments are required to be performed by it as a Lender.

 

2.             Payments.  From and after the Effective Date, theAdministrative Agent shall make all payments in respect of the AssignedInterest (including payments of principal,

 

----

 

interest, fees and otheramounts) to the Assignor for amounts which have accrued to but excluding theEffective Date and to the Assignee for amounts which have accrued from andafter the Effective Date.

 

3.             General Provisions.  This Assignment and Assumption shall bebinding upon, and inure to the benefit of, the parties hereto and theirrespective successors and assigns.  ThisAssignment and Assumption may be executed in any number of counterparts, whichtogether shall constitute one instrument. Delivery of an executed counterpart of a signature page of thisAssignment and Assumption by telecopy shall be effective as delivery of amanually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall begoverned by, and construed in accordance with, the internal law of the State ofNew York.

 

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EXHIBIT C

 

FORM OFREVOLVING LOAN PROMISSORY NOTE

 
|                                                                                                                            | New York,  New York                                                                                                                   |
|---------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|
| $                      |                      ,  2005 |

 

FOR VALUERECEIVED, the undersigned, Cubic Corporation (the “Maker”), herebypromises to pay to the order of                  (the “Lender”), at the office of JPMorgan Chase Bank, N.A. (the “Agent”),at 277 Park Avenue, New York, New York at the expiration of the AvailabilityPeriod as defined in the Credit Agreement, dated as of March      ,2005, among the Maker, the Lenders named therein and the Agent (as the same maybe amended, modified or supplemented from time to time in accordance with itsterms, the “Credit Agreement”) or earlier as provided for in the CreditAgreement, the lesser of the principal sum of                    DOLLARS ($                  )or the aggregate unpaid principal amount of all Revolving Loans (as defined inthe Credit Agreement) to the Maker from the Lender pursuant to the terms of theCredit Agreement, in lawful money of the United States of America inimmediately available funds, and to pay interest from the date thereof on theprincipal amount hereof from time to time outstanding, in like funds, at saidoffice, at a rate or rates per annum and, in each case, and payable on suchdates as determined pursuant to the terms of the Credit Agreement.

 

The Makerpromises to pay interest, on demand, on any overdue principal and fees and, tothe extent permitted by law, overdue interest from their due dates at a rate orrates determined as set forth in the Credit Agreement.

 

The Makerhereby waives diligence, presentment, demand, protest and notice of any kindwhatsoever.  The non-exercise by theholder of any of its rights hereunder in any particular instance shall notconstitute a waiver thereof in that or any subsequent instance.

 

All borrowingsevidenced by this Revolving Loan Promissory Note and all payments andprepayments of the principal hereof and interest hereon and the respectivedates thereof shall be endorsed by the holder hereof on the schedule attachedhereto and made a part hereof, or on a continuation thereof which shall beattached hereto and made a part hereof, or otherwise recorded by such holder inits internal records; provided, however, that the failure of theholder hereof to make such a notation or any error in such a notation shall notin any manner affect the obligation of the Makers to make payments of principaland interest in accordance with the terms of this Revolving Loan PromissoryNote and the Credit Agreement.

 

This RevolvingLoan Promissory Note is one of the Notes referred to in the Credit Agreement,which, among other things, contains provisions for the acceleration of thematurity hereof upon the happening of certain events, for optional andmandatory prepayment of the principal hereof prior to the maturity hereof andfor the amendment or waiver of certain provisions of the Credit Agreement, allupon the terms and conditions therein specified.  **THISREVOLVING LOAN PROMISSORY NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH ANDGOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICTSOF LAWS PRINCIPLES**

 

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**THEREOF THATWOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION AND ANYAPPLICABLE LAWS OF THE UNITED STATES OF AMERICA.**

 
|   | CUBIC  CORPORATION |
|--------|--------------------|
|   |               |   |
|   |               |   |
|   | By:                |   |   |
|   |               | Name: |
|   |               | Title: |

 

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Loans and Payment

 
| **Date** | ** ** | **Amount and  Type of Loan** | ** ** | **Payments  Principal Interest** | ** ** | **Unpaid Principal  Balance of Note** | ** ** | **Name of Person  Making  Notation** |
|----------|------------|------------------------------|------------|----------------------------------|------------|---------------------------------------|------------|--------------------------------------|
|     |       |                         |       |                             |       |                                  |       |                                 |
|     |       |                         |       |                             |       |                                  |       |                                 |
|     |       |                         |       |                             |       |                                  |       |                                 |

 

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EXHIBIT E

 

FORM OFCOMPLIANCE CERTIFICATE

 

CUBIC CORPORATIONOFFICER’S CERTIFICATE

 

In Conformancewith the Credit Agreement Dated March 10, 2005As of and for the Period Ending                       .

 

The followingcertification is provided to the Lenders as required under Section 5.02 ofthe Credit Agreement dated March 10, 2005 (the Agreement).  The undersigned hereby certifies that:

 

a.                                       the Borrower wasin compliance with the requirements of Section 6.01 through 6.05 and 6.10of the Agreement, inclusive, during the period covered by the accompanyingfinancial statements (detailed calculations annexed), and

 

b.                                      the undersignedhas reviewed the terms of the Agreements and has made, or caused to be madeunder his or her supervision, a review of the transactions and conditions ofthe Borrower and its Subsidiaries from the beginning of the period covered bythe accompanying financial statements to the date of this certificate, and thatsuch review (i) has not disclosed the existence during such period of anycondition or event that constitutes a Default as defined in the Agreement and (ii) hasconfirmed that Unrestricted Subsidiaries continue to constitute, in aggregate,less than 7% of Consolidated Total Capitalization.

 

 

Dated at SanDiego, California, this           day of                          ,               .

 

 
|   |   |   |
|--------|--------|--------|
| Name:  |   |   |
| Title: |   |   |

 

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