**Exhibit 10.3**

| ** ** | ** ** | ** ** |
|------------|------------|------------|

** **

FIRST AMENDED AND RESTATEDCREDIT AGREEMENT

 

dated as of

 

December 16, 2009

 

among

 

CUBIC CORPORATION,

 

The Lenders Party Hereto,

 

and

 

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

 

BANK OF THE WEST,as Co-Syndication Agent,

 

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

 

U.S. BANK NATIONAL ASSOCIATION,as Co-Syndication Agent,

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,as Co-Syndication Agent and

 

BRANCH BANKING AND TRUST COMPANY,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**

 
| ** **         | **Page**                                                     |
|--------------------|--------------------------------------------------------------|
|               |                                                         |
| ARTICLE I          | DEFINITIONS                                                  | 1 |
|               |                                                         |   |
| Section 1.01. | Defined Terms                                                | 1 |
| Section 1.02. | Classification of Loans and Borrowings                       | 17 |
| Section 1.03. | Terms Generally                                              | 17 |
| Section 1.04. | Accounting Terms; GAAP                                       | 18 |
|               |                                                         |   |
| ARTICLE II         | THE  CREDITS                                                 | 18 |
|               |                                                         |   |
| Section 2.01. | Commitments                                                  | 18 |
| Section 2.02. | Loans and Borrowings                                         | 18 |
| Section 2.03. | Requests for Borrowings                                      | 19 |
| Section 2.04. | Swingline Loans                                              | 20 |
| Section 2.05. | Letters of Credit                                            | 21 |
| Section 2.06. | Funding of Borrowings                                        | 24 |
| Section 2.07. | Interest Elections                                           | 25 |
| Section 2.08. | Termination, Reduction and Increase of Commitments           | 26 |
| Section 2.09. | Repayment of Loans; Evidence of Debt                         | 28 |
| Section 2.10. | Prepayment of Loans                                          | 29 |
| Section 2.11. | Fees                                                         | 29 |
| Section 2.12. | Interest                                                     | 30 |
| Section 2.13. | Alternate Rate of Interest                                   | 31 |
| Section 2.14. | Increased Costs                                              | 31 |
| Section 2.15. | Break Funding Payments                                       | 32 |
| Section 2.16. | Taxes                                                        | 33 |
| Section 2.17. | Payments Generally; Pro Rata Treatment; Sharing of  Set-offs | 34 |
| Section 2.18. | Mitigation Obligations                                       | 36 |
| Section 2.19. | Defaulting Lenders                                           | 36 |
|               |                                                         |   |
| ARTICLE III        | REPRESENTATIONS  AND WARRANTIES                              | 38 |
|               |                                                         |   |
| Section 3.01. | Existence and Power                                          | 38 |
| Section 3.02. | Corporate and Governmental Authorization; No  Contravention  | 38 |
| Section 3.03. | Binding Effect                                               | 38 |
| Section 3.04. | Financial Information                                        | 38 |
|                    |                                                              |  |  |  |

 

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**TABLE OF CONTENTS**

(continued)

 
| ** **         | ** **                                           | **Page** |
|--------------------|------------------------------------------------------|----------|
|               |                                                 |     |
| Section 3.05. | Litigation                                           | 39       |
| Section 3.06. | Compliance with ERISA                                | 39       |
| Section 3.07. | Taxes                                                | 39       |
| Section 3.08. | Environmental Compliance                             | 39       |
| Section 3.09. | Properties                                           | 40       |
| Section 3.10. | Compliance with Laws and Agreements                  | 41       |
| Section 3.11. | Investment and Holding Company Status                | 41       |
| Section 3.12. | Full Disclosure                                      | 41       |
| Section 3.13. | Solvency                                             | 41       |
| Section 3.14. | Employee Matters                                     | 42       |
| Section 3.15. | Use of Proceeds                                      | 42       |
| Section 3.16. | Subsidiaries                                         | 42       |
| Section 3.17. | No Change in Credit Criteria or Collection  Policies | 42       |
|               |                                                 |     |
| ARTICLE  IV        | CONDITIONS                                           | 42       |
|               |                                                 |     |
| Section 4.01. | Effective Date                                       | 42       |
| Section 4.02. | Each Credit Event                                    | 44       |
|               |                                                 |     |
| ARTICLE  V         | AFFIRMATIVE  COVENANTS                               | 44       |
|               |                                                 |     |
| Section 5.01. | Financial and Business Information                   | 44       |
| Section 5.02. | Officer’s Certificate                           | 47       |
| Section 5.03. | Inspection                                           | 47       |
| Section 5.04. | Reporting Treatment of Unrestricted Subsidiaries     | 48       |
| Section 5.05. | Compliance with Law                                  | 48       |
| Section 5.06. | Insurance                                            | 48       |
| Section 5.07. | Maintenance of Properties                            | 49       |
| Section 5.08. | Payment of Taxes and Claims                          | 49       |
| Section 5.09. | Corporate Existence, Etc.                            | 49       |
| Section 5.10. | Nature of Business                                   | 49       |
| Section 5.11. | Additional Guarantors                                | 49       |
|               |                                                 |     |
| ARTICLE  VI        | NEGATIVE  COVENANTS                                  | 50       |
|               |                                                 |     |
| Section 6.01. | Financial Ratios                                     | 50       |
|                    |                                                      |          |  |  |

 

ii

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** **

**TABLE OF CONTENTS**

(continued)

 
| ** **         | ** **                                                    | **Page** |
|--------------------|---------------------------------------------------------------|----------|
|               |                                                          |     |
| Section 6.02. | Limitations on Indebtedness                                   | 50       |
| Section 6.03. | Limitation on Liens                                           | 50       |
| Section 6.04. | Limitation on Sale and Leasebacks                             | 51       |
| Section 6.05. | Mergers, Consolidations and Sales of Assets and  Acquisitions | 52       |
| Section 6.06. | Transactions with Affiliates                                  | 53       |
| Section 6.07. | Designation of Subsidiaries                                   | 53       |
| Section 6.08. | Modification of Operating Documents                           | 54       |
| Section 6.09. | Restrictive Agreements                                        | 54       |
| Section 6.10. | Restricted Payments                                           | 54       |
|               |                                                          |     |
| ARTICLE  VII       | EVENTS  OF DEFAULT                                            | 55       |
|               |                                                          |     |
| ARTICLE  VIII      | THE  ADMINISTRATIVE AGENT                                     | 57       |
|               |                                                          |     |
| ARTICLE  IX        | MISCELLANEOUS                                                 | 59       |
|               |                                                          |     |
| Section 9.01. | Notices                                                       | 59       |
| Section 9.02. | Waivers; Amendments                                           | 60       |
| Section 9.03. | Expenses; Indemnity; Damage Waiver                            | 61       |
| Section 9.04. | Successors and Assigns                                        | 62       |
| Section 9.05. | Survival                                                      | 65       |
| Section 9.06. | Counterparts; Integration; Effectiveness                      | 65       |
| Section 9.07. | Severability                                                  | 66       |
| Section 9.08. | Right of Setoff                                               | 66       |
| Section 9.09. | GOVERNING LAW; Jurisdiction; Consent to Service of  Process   | 66       |
| Section 9.10. | WAIVER OF JURY TRIAL                                          | 67       |
| Section 9.11. | Headings                                                      | 67       |
| Section 9.12. | Confidentiality                                               | 67       |
| Section 9.13. | Interest Rate Limitation                                      | 68       |
| Section 9.14. | USA Patriot Act                                               | 68       |
|                    |                                                               |          |  |

 

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| SCHEDULES      |                                              |
|----------------|---------------------------------------------------|
| Schedule 1.01  | Existing Letters of Credit                        |
| 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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FIRST AMENDED AND RESTATED CREDIT AGREEMENTdated as of December 16, 2009, among CUBIC CORPORATION, a Delawarecorporation (the “Borrower”), the LENDERS party hereto, and JPMORGANCHASE BANK, N.A. (“JPMCB”), as Administrative Agent.

 

The Borrower, various lenders and JPMCB, asadministrative agent for such lenders, are parties to that certain CreditAgreement dated as of March 10, 2005, as amended prior to the date hereof(as so amended, the “Existing Credit Agreement”); and

 

The parties hereto have agreed that theExisting Credit Agreement shall be amended and restated in its entirety.

 

Accordingly, the Borrower, the Lenders andthe Administrative Agent (such terms having the respective meanings ascribed tosuch terms hereinafter) hereby agree that the Existing Credit Agreement isamended and restated in its entirety 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 anyLoan or Borrowing, refers to whether such Loan, or the Loans comprising suchBorrowing, are bearing interest at a rate determined by reference to theAlternate Base Rate.

 

“Adjusted LIBO Rate” means, withrespect to any Eurodollar Borrowing for any Interest Period, an interest rateper annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to (a) theLIBO Rate for such Interest Period multiplied by (b) the Statutory ReserveRate.

 

“Administrative Agent” means JPMorganChase Bank, N.A., in its capacity as administrative agent for the Lendershereunder or any successor appointed pursuant to Article VIII.

 

“Administrative Questionnaire” meansan Administrative Questionnaire in a form supplied by the Administrative Agent.

 

“Affiliate” means, at any time, andwith respect to any Person, (a) any other Person that at such timedirectly or indirectly through one or more intermediaries Controls, or isControlled by, or is under common Control with, such first Person, and (b) anyPerson beneficially owning or holding, directly or indirectly, 10% or more ofany class of voting or equity interests of such Person or any Subsidiary or anycorporation of which such Person and its Subsidiaries beneficially own or hold,in the aggregate, directly or indirectly, 10% or more of any class of voting orequity interests.  As used in thisdefinition, “Control” means the possession, directly or indirectly, ofthe power to direct or cause the direction of the management and policies of aPerson, whether through the ownership of voting securities, by contract orotherwise.  Unless the 

 

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context otherwise clearlyrequires, any reference to an “Affiliate” is a reference to an Affiliateof the Borrower.

 

“Alternate Base Rate” means, for anyday, a rate per annum equal to the greatest of (a) the Prime Rate ineffect on such day, (b) the Federal Funds Effective Rate in effect on suchday plus 1/2 of 1% and (c) the Adjusted LIBO Rate for a one month InterestPeriod on such day (or if such day is not a Business Day, the immediatelypreceding Business Day) plus 1%, provided that, for the avoidance of doubt, theAdjusted LIBO Rate for any day shall be based on the rate appearing on theReuters Screen LIBOR 01 Page (or on any successor or substitute page ofsuch page) at approximately 11:00 a.m. London time on such day.  Any change in the Alternate Base Rate due toa change in the Prime Rate or the Federal Funds Effective Rate shall beeffective from and including the effective date of such change in the PrimeRate or the Federal Funds Effective Rate, respectively.

 

“Applicable Rate” 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) withrespect to Loans that are Eurodollar Loans, 2.00%, (y) with respect toLoans that are ABR Loans, 1.00% and (z) with respect to the RevolvingCredit Commitment Fee, 0.25% and

 

(ii)           if such day occurson or after the date upon which the Borrower shall have delivered to theAdministrative Agent the financial statements required to be delivered for thefiscal period ended September 30, 2009 pursuant to Section 5.01(b),

 

therate as set forth below that corresponds to the ratio of ConsolidatedIndebtedness to Consolidated Adjusted EBITDA of the Borrower and its Subsidiarieson a consolidated basis as of the last day of the fiscal quarter or fiscal yearmost recently ended prior to such day for which financial statements shall havebeen delivered to the Administrative Agent as required pursuant to Section 5.01(a) or(b) hereof, together with the corresponding compliance certificaterequired pursuant to Section 5.02 hereof; provided that anyincrease or decrease in the Applicable Rate shall become effective as of thefifth Business Day immediately following the date the financial statements andaccompanying compliance certificate shall have been delivered for a fiscalquarter or fiscal year end; and provided, further, that (A) ifthe Borrower shall fail to timely deliver such statements and certificates forany such fiscal quarter or fiscal year period or (B) during thecontinuance of an Event of Default, then the Applicable Rate with respect toABR Loans and Eurodollar Loans and with respect to the Revolving CreditCommitment Fee shall be determined for the period (x) from and includingthe date upon which such financial statements and certificate were required tobe delivered to but excluding the date upon which financial statements and acertificate complying with Section 5.0 1(a) or (b) andSection 5.02 are delivered or (y) from and including the datefrom which such Event of 

 

2

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Defaultshall have occurred but excluding the date upon which such Event of Default iscured or waived as if the applicable ratio of Consolidated Indebtedness toConsolidated Adjusted EBITDA of the Borrower and its Subsidiaries was greaterthan 2.50:1.00:

 
| **Ratio of Consolidated Indebtedness********to Consolidated Adjusted EBITDA** | ** ** | **Eurodollar  Spread for Loans** | ** ** | **ABR Spread  for Loans** | ** ** | **Commitment  Fee** | ** ** |
|-------------------------------------------------------------------------------|------------|----------------------------------|------------|---------------------------|------------|---------------------|------------|
| Less than 1.00 to 1.00                                                        |       | 2.00                             | %          | 1.00                      | %          | 0.25                | %          |
| Greater than or equal to  1.00 to 1.00 but less than 1.50 to 1.00             |       | 2.25                             | %          | 1.25                      | %          | 0.30                | %          |
| Greater than or equal to  1.50 to 1.00 but less than 2.00 to 1.00             |       | 2.50                             | %          | 1.50                      | %          | 0.35                | %          |
| Greater than or equal to  2.00 to 1.00 but less than 2.50 to 1.00             |       | 2.75                             | %          | 1.75                      | %          | 0.40                | %          |
| Greater than or equal to 2.50 to 1.00                                         |       | 3.00                             | %          | 2.00                      | %          | 0.50                | %          |

 

“Approved Fund” has the meaningassigned to such term in Section 9.04.

 

“Assignment and Assumption” means anassignment and assumption entered into by a Lender and an assignee (with theconsent of any party whose consent is required by Section 9.04),and accepted by the Administrative Agent, in the form of Exhibit Aor any other form approved by the Administrative Agent.

 

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

 

“Availability Period” means the periodfrom and including the Effective Date to but excluding the earlier of theMaturity Date and the date of termination of the Commitments.

 

“Board” means the Board of Governorsof the Federal Reserve System of the United States of America.

 

“Borrower” has the meaning assigned tosuch term in the recitals.

 

“Borrowing” means (a) Loans ofthe same Type, made, converted or continued on the same date and, in the caseof Eurodollar Loans, as to which a single Interest Period is in effect or (b) aSwingline Loan.

 

“Borrowing Request” means a request bythe Borrower for a Borrowing in accordance with Section 2.03.

 

“Business Day” means any day that isnot a Saturday, Sunday or other day on which commercial banks in New YorkCity are authorized or required by law to remain closed; provided that,when used in connection with a Eurodollar Loan, the term “Business Day”shall also exclude any day on which banks are not open for dealings in dollardeposits in the London interbank market.

 

3

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“Capital Lease” means any lease theobligation for Rentals with respect to which is required to be capitalized on aconsolidated balance sheet of the lessee and its subsidiaries in accordancewith GAAP.

 

“Capitalized Rentals” of any Personmeans as of the date of any determination thereof the amount at which theaggregate Rentals due and to become due under all Capital Leases under whichsuch Person is a lessee would be reflected as a liability on a consolidatedbalance sheet of such Person.

 

“CERCLA” means the ComprehensiveEnvironmental Response, Compensation and Liability Act of 1980, as amended.

 

“Change in Control” means (a) theacquisition by any party, or two or more parties acting in concert, ofbeneficial ownership (within the meaning of Rule 13d-3 of the SEC underthe Securities Exchange Act of 1934) of 50% or more of the outstanding sharesof voting stock of the Borrower, or (b) during any period of twelve (12)consecutive months, a majority of the members of the board of directors orother equivalent governing body of the Borrower cease to be composed ofindividuals (i) who were members of that board or equivalent governingbody of the first day of such period, (ii) whose election or nomination tothat board or equivalent governing body was approved by individuals referred toin clause (i) above constituting at the time of such electionor nomination at least a majority of that board or equivalent governing body,or (iii) whose election or nomination to that board or other equivalentgoverning body was approved by individuals referred to in clauses (i) and(ii) above constituting at the time of such election or nominationat least a majority of that board or equivalent governing body (excluding, inthe case of both clause (ii) and clause (iii) ,any individual whose initial nomination for, or assumption of office as, amember of that board or equivalent governing body occurs as a result of anactual or threatened solicitation of proxies or consents for the election orremoval of one or more directors by any person or group other than a solicitationfor the election of one or more directors by or on behalf of the board ofdirectors); provided, however, that neither the ownership noracquisitions of shares of the capital stock of the Borrower by, nor thetransfers of shares of the capital stock of the Borrower between, Members ofthe Zable Family shall constitute a Change in Control.

 

“Change in Law” means (a) theadoption or effectiveness of any law, rule or regulation after the date ofthis Agreement, (b) any change in any law, rule or regulation or inthe interpretation or application thereof by any Governmental Authority afteror in effect after the date of this Agreement or (c) compliance by anyLender (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.

 

“Class,” when used in reference to anyLoan or Borrowing, refers to when such Loans, or the Loans comprising suchBorrowing, are Revolving Loans or Swingline Loans.

 

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

 

“Commitment” means a Revolving LoanCommitment.

 

4

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“Consolidated Adjusted EBITDA” meanswith respect to the Borrower and its Restricted Subsidiaries for any periodConsolidated EBITDA for such period adjusted to take into account the EBITDA ofany subsequently acquired Person which becomes a Restricted Subsidiary for theapplicable period of calculation which occurred prior to its acquisition solong as such EBITDA may be verified from audited financial statements.

 

“Consolidated Cash Interest Expense”means, with respect to the Borrower and its Restricted Subsidiaries for anyperiod, the interest expense of the Borrower and its Restricted Subsidiariesduring such period determined on a consolidated basis in accordance with GAAP.

 

“Consolidated EBITDA” means withrespect to the Borrower and its Restricted Subsidiaries for any period (a) thesum of (i) Consolidated Net Income for the Borrower and its RestrictedSubsidiaries, (ii) Consolidated Interest Expense (to the extent deductedin determining Consolidated Net Income) for the Borrower and its RestrictedSubsidiaries, (iii) taxes, and (iv) depreciation and amortization (tothe extent deducted in determining Consolidated Net Income) and stockcompensation and other non-cash items properly deductible in determiningConsolidated Net Income, calculated on a consolidated basis in accordance withGAAP, minus (b) non-cash items properly added in determining ConsolidatedNet Income for such period, all such calculations to be on a consolidated basisin accordance with GAAP.

 

“Consolidated Indebtedness” means allIndebtedness of the Borrower and its Restricted Subsidiaries, determined on aconsolidated basis eliminating intercompany items.

 

“Consolidated Interest Expense” means,with respect to the Borrower and its Restricted Subsidiaries for any period,the interest expense of the Borrower and its Restricted Subsidiaries duringsuch period determined on a consolidated basis in accordance with GAAP, andshall in any event include, without limitation, (i) the amortization ofdebt discounts, (ii) the amortization of all fees payable in connectionwith the incurrence of Indebtedness to the extent included in interest expenseand (iii) the portion of any Capitalized Lease allocable to interestexpense.

 

“Consolidated Net Income” for any periodmeans consolidated net income or net earnings (or any comparable line item) ofthe Borrower and its Restricted Subsidiaries, determined in accordance withGAAP, excluding extraordinary items and gains or loses resulting from changesin accounting principles and interest income.

 

“Consolidated Net Worth” means, as ofthe date of any determination thereof the amount of the capital stock accounts(net of treasury stock, at cost) *plus* (or *minus* in the case of a deficit) the surplus in retainedearnings of the Borrower and its Restricted Subsidiaries as determined inaccordance with GAAP.

 

“Consolidated Total Capitalization”means as of the date of any determination thereof, the sum of (a) ConsolidatedIndebtedness plus (b) Consolidated Net Worth.

 

“Default” means any event or conditionwhich constitutes an Event of Default or which upon notice, lapse of time orboth would, unless cured or waived, become an Event of Default.

 

“Defaulting Lender” means any Lender,as determined by the Administrative Agent, that has (a) failed to fund anyportion of its Loans or participations in Letters of Credit or Swingline

 

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Loans within three BusinessDays of the date required to be funded by it hereunder, (b) notified theBorrower, the Administrative Agent, the Issuing Bank, the Swingline Lender orany Lender in writing that it does not intend to comply with any of its fundingobligations under this Agreement or has made a public statement to the effectthat it does not intend to comply with its funding obligations under thisAgreement or under other agreements in which it commits to extend credit, (c) failed,within three Business Days after request by the Administrative Agent, toconfirm that it will comply with the terms of this Agreement relating to itsobligations to fund prospective Loans and participations in then outstandingLetters of Credit and Swingline Loans, (d) otherwise failed to pay over tothe Administrative Agent or any other Lender any other amount required to bepaid by it hereunder within three Business Days of the date when due, unlessthe subject of a good faith dispute, or (e) (i) become or isinsolvent or (ii) become the subject of a bankruptcy or insolvencyproceeding, or has had a receiver, conservator, trustee, administrator,assignee for the benefit of creditors or similar Person charged withreorganization or liquidation of its business or custodian, appointed for it,or has taken any action in furtherance of, or indicating its consent to,approval of or acquiescence in any such proceeding or appointment.

 

“Disclosed Matters” means the actions,suits and proceedings and the environmental matters disclosed in Schedules3.05 and 3.08.

 

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

 

“Effective Date” means the date onwhich the conditions specified in Section 4.01 are satisfied (orwaived in accordance with Section 9.02).

 

“Environmental Laws” means all laws,rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions,notices or binding agreements issued, promulgated or entered into by anyGovernmental Authority, relating in any way to the environment, preservation orreclamation of natural resources, the management, release or threatened releaseof any Hazardous Materials or to health and safety matters.

 

“Environmental Liability” means anyliability, contingent or otherwise (including any liability for damages, costsof environmental remediation, fines, penalties or indemnities), of the Borroweror any Subsidiary directly or indirectly resulting from or based upon (a) violationof any Environmental Law, (b) the generation, use, handling,transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposureto any Hazardous Materials, (d) the release or threatened release of anyHazardous Materials into the environment or (e) any contract, agreement orother consensual arrangement pursuant to which liability is assumed or imposedwith respect to any of the foregoing.

 

“Equity Interests” means shares ofcapital stock, partnership interests, membership interests in a limitedliability company, beneficial interests in a trust or other equity ownershipinterests in a Person, and any warrants, options or other rights entitling theholder thereof to purchase or acquire any such equity interest.

 

“ERISA” means the Employee RetirementIncome Security Act of 1974, as amended from time to time.

 

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“ERISA Affiliate” means any trade orbusiness (whether or not incorporated) that, together with the Borrower, istreated as a single employer under Section 414(b) or (c) of theCode 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.

 

“ERISA Event” means (a) any “reportableevent”, as defined in Section 4043 of ERISA or the regulations issuedthereunder with respect to a Plan (other than an event for which the 30-daynotice period is waived); (b) the existence with respect to any Plan of an“accumulated funding deficiency” (as defined in Section 412 of the Code orSection 302 of ERISA), whether or not waived; (c) the filing pursuantto Section 412(d) of the Code or Section 303(d) of ERISA ofan application for a waiver of the minimum funding standard with respect to anyPlan; (d) the incurrence by the Borrower or any of its Affiliates of anyliability under Title IV of ERISA with respect to the termination of anyPlan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGCor a plan administrator of any notice relating to an intention to terminate anyPlan or Plans or to appoint a trustee to administer any Plan; (f) theincurrence by the Borrower or any of its ERISA Affiliates of any liability withrespect to the withdrawal or partial withdrawal from any Plan or MultiemployerPlan; or (g) the receipt by the Borrower or any ERISA Affiliate of anynotice, or the receipt by any Multiemployer Plan from the Borrower or any ERISAAffiliate of any notice, concerning the imposition of Withdrawal Liability or adetermination that a Multiemployer Plan is, or is expected to be, insolvent orin reorganization, within the meaning of Title IV of ERISA.

 

“Eurodollar”, when used in referenceto any Loan or Borrowing, refers to whether such Loan, or the Loans comprisingsuch Borrowing, are bearing interest at a rate determined by reference to theAdjusted LIBO Rate.

 

“Event of Default” has the meaningassigned to such term in Article VII.

 

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

 

“Excluded Taxes” means, with respectto the Administrative Agent, any Lender, or any other recipient of any paymentto be made by or on account of any obligation of the Borrower hereunder, (a) incomeor franchise taxes imposed on (or measured by) its net income by the UnitedStates of America, or by the jurisdiction under the laws of which suchrecipient is organized or in which its principal office is located or, in thecase of any Lender, in which its applicable lending office is located, (b) anybranch profits taxes imposed by the United States of America or any similar taximposed by any other jurisdiction in which the Borrower is located and (c) inthe case of a Foreign Lender, any withholding tax that is imposed on amountspayable to such Foreign Lender at the time such Foreign Lender becomes a partyto this Agreement (or designates a new lending office) or is attributable to suchForeign Lender’s failure to comply with Section 2.16(e), except tothe extent that such Foreign Lender (or its assignor, if any) was entitled atthe time 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).

 

“Existing Credit Agreement” has themeaning assigned to such term in the recitals.

 

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“Existing Letters of Credit” meansthose letters of credit more particularly described on Schedule 1.01.

 

“Federal Funds Effective Rate” means,for any day, the weighted average (rounded upwards, if necessary, to the next1/100 of 1%) of the rates on overnight Federal funds transactions with membersof the Federal Reserve System arranged by Federal funds brokers, as publishedon the next succeeding Business Day by the Federal Reserve Bank ofNew York, or, if such rate is not so published for any day that is aBusiness Day, the average (rounded upwards, if necessary, to the next 1/100 of1%) of the quotations for such day for such transactions received by theAdministrative Agent from three Federal funds brokers of recognized standingselected by it.

 

“Fee Letter” means the letter dated September 30,2009 between the Borrower and the Administrative Agent setting forth certainfees to be paid by the Borrower to the Administrative Agent.

 

“Financial Officer” means thepresident, chief financial officer, principal accounting officer, treasurer orcontroller of the Borrower.

 

“Financing Documents” means thisAgreement (including the Schedules and Exhibits hereto), the Notes evidencingLoans, any Guarantee of the Obligations and any other agreement hereaftercreated to which the Borrower or any Guarantor is a party that relates to theobligations of the Borrower or any such Guarantor under any of the foregoing.

 

“Foreign Lender” means any Lender thatis organized under the laws of a jurisdiction other than that in which theBorrower is located.  For purposes of thisdefinition, the United States of America, each state thereof and the Districtof Columbia shall be deemed to constitute a single jurisdiction.

 

“Funded Debt” of any Person means (a) allIndebtedness of such Person for borrowed money or which has been incurred inconnection with the acquisition of assets in each case having a final maturityof one or more than one year from the date of origin thereof (or which isrenewable or extendible at the option of the obligor for a period or periodsmore than one year from the date of origin), including all payments in respectthereof that are required to be made within one year from the date of anydetermination of Funded Debt, whether or not the obligation to make suchpayments shall constitute a current liability of the obligor under GAAP, (b) allCapitalized Rentals of such Person, and (c) all Guaranties by such Personof Funded Debt of others.

 

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

 

“Governmental Authority” means thegovernment of the United States of America, any other nation or any politicalsubdivision thereof, whether state or local, and any agency, authority,instrumentality, regulatory body, court, central bank or other entityexercising executive, legislative, judicial, taxing, regulatory oradministrative powers or functions of or pertaining to government.

 

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“Guarantee” means,with respect to any Person, any obligation (except the endorsement in theordinary 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 such Indebtedness orobligation or any property constituting security therefor;

 

(b)           to advance or supply funds (i) forthe purchase or payment of such Indebtedness or obligation, or (ii) tomaintain any working capital or other balance sheet 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 properties or to purchaseproperties or services primarily for the purpose of assuring the owner of suchIndebtedness or obligation of the ability of any other Person to make paymentof the Indebtedness or obligation; or

 

(d)           otherwise to assure the owner of suchIndebtedness or obligation against loss in respect thereof.

 

Without limiting the foregoing, in any computationof the Indebtedness or other liabilities of the obligor under any Guarantee,the Indebtedness or other obligations that are the subject of such Guaranteeshall be assumed to be direct obligations of such obligor.

 

“Guarantor” means each domesticRestricted Subsidiary now existing or hereafter created, and executing anddelivering 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 andConsolidated EBITDA (computed for the Borrower and its domestic RestrictedSubsidiaries) of the Borrower and all its domestic Restricted Subsidiaries.

 

“Hazardous Materials” means allexplosive or radioactive substances or wastes and all hazardous or toxicsubstances, wastes or other pollutants, including petroleum or petroleumdistillates, asbestos or asbestos-containing materials, polychlorinatedbiphenyls, radon gas, infectious or medical wastes and all other substances orwastes of any nature regulated pursuant to any Environmental Law.

 

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

 

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

 

(b)           its liabilities for the deferredpurchase price of property acquired by such Person (excluding accounts payablearising in the ordinary course of business but including all liabilitiescreated or arising under any conditional sale or other title retentionagreement with respect to any such property);

 

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(c)           all liabilities appearing on itsbalance sheet in accordance with GAAP in respect of Capital Leases;

 

(d)           all liabilities for borrowed moneysecured by any Lien with respect to any property owned by such Person (whetheror not it has assumed or otherwise become liable for such liabilities);

 

(e)           all its liabilities in respect ofletters of credit or instruments serving a similar function issued or acceptedfor its account by banks and other financial institutions, whether or notrepresenting obligations for borrowed money, but excluding any commercialletter of credit entered into in the ordinary course of business by any suchbank or other financial institution relating to the export or import of propertiesor any letter of credit entered into in the ordinary course of business by anysuch bank or other financial institution relating to the performance by suchPerson of its obligations under any contract or agreement (other than any note,credit, loan or other financial instrument or like agreement);

 

(f)            Swaps of such Person; and

 

(g)           any Guarantee of such Person withrespect to liabilities of a type described in any of clauses (a) through(f) hereof.

 

Indebtedness of any Person shall include all obligationsof such Person of the character described in clauses (a) through(g) to the extent such Person remains legally liable in respectthereof notwithstanding that any such obligation is deemed to be extinguishedunder GAAP.

 

“Indemnified Taxes” means Taxes otherthan Excluded Taxes.

 

“Interest Election Request” means arequest by the Borrower to convert or continue a Borrowing in accordance with Section 2.07.

 

“Interest Payment Date” means (a) withrespect to any ABR Loan (other than a Swingline Loan), the first day of eachJanuary, April, July and October, (b) with respect to any EurodollarLoan, the last day of the Interest Period applicable to the Borrowing of whichsuch Loan is a part and, in the case of a Eurodollar Borrowing with an InterestPeriod of more than three months’ duration, each day prior to the last day ofsuch Interest Period that occurs at intervals of three months’ duration afterthe first day of such Interest Period and (c) with respect to anySwingline Loan, the day that such Loan is required to be repaid.

 

“Interest Period” means, with respectto any Eurodollar Borrowing, the period commencing on the date of suchBorrowing and ending on the numerically corresponding day in the calendar monththat is one, two, three or six months thereafter; provided, that (i) ifany Interest Period would end on a day other than a Business Day, such InterestPeriod shall be extended to the next succeeding Business Day unless, such nextsucceeding Business Day would fall in the next calendar month, in which casesuch Interest Period shall end on the next preceding Business Day and (ii) anyInterest Period that commences on the last Business Day of a calendar month (oron a day for which there is no numerically corresponding day in the lastcalendar month of such Interest Period) shall end on the last Business Day ofthe last calendar 

 

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month of such InterestPeriod.  For purposes hereof, the date ofa Borrowing initially shall be the date on which such Borrowing is made andthereafter shall be the effective date of the most recent conversion orcontinuation of such Borrowing.

 

“Internal Revenue Code” means theInternal Revenue Code of 1986, as amended, or any successor statute.

 

“Issuing Bank” means JPMorgan ChaseBank, N.A. or, at the request of the Borrower and with the concurrence of suchLender, any other Lender, to the extent such Person is acting, in its capacityas the issuer of Letters of Credit hereunder. The Issuing Bank may, in its discretion, arrange for one or more Lettersof Credit to be issued by Affiliates of the Issuing Bank, in which case theterm “Issuing Bank” shall include any such Affiliate with respect toLetters of Credit issued by such Affiliate.

 

“JPMCB” has the meaning assigned tosuch term in the recitals.

 

“LC Disbursement” means a payment madeby the Issuing Bank pursuant to a Letter of Credit.

 

“LC Exposure” means, at any time, thesum of (a) the aggregate undrawn amount of all outstanding Letters ofCredit at such time plus (b) the aggregate amount of all LC Disbursementsthat have not yet been reimbursed by or on behalf of the Borrower at suchtime.  The LC Exposure of any Lender atany time shall be its pro rata (based on its Revolving Loan Commitment) shareof the total LC Exposure at such time.

 

“Lenders” means the Persons listed on Schedule2.01 and any other Person that shall have become a party hereto pursuant toan Assignment and Assumption, other than any such Person that ceases to be aparty hereto pursuant to an Assignment and Assumption.  Unless the context otherwise requires, theterm “Lenders” includes the Swingline Lender.

 

“Letter of Credit” means any letter ofcredit issued pursuant to this Agreement and shall include the Existing Lettersof Credit.

 

“LIBO Rate” means, with respect to anyEurodollar Borrowing for any Interest Period, the rate appearing on ReutersScreen LIBOR 01 page (or on any successor or substitute page of suchService, or any successor to or substitute for such Service, providing ratequotations comparable to those currently provided on such page of suchService, as determined by the Administrative Agent from time to time forpurposes of providing quotations of interest rates applicable to dollardeposits in the London interbank market) at approximately 11:00 a.m.,London time, two Business Days prior to the commencement of such InterestPeriod, as the rate of dollar deposits with the maturity comparable to suchInterest Period.  In the event that suchrate is not available at such time for any reason, then the “LIBO Rate”with respect to such Eurodollar Borrowing for such Interest Period shall be therate at which dollar deposits of $5,000,000 and for a maturity comparable tosuch Interest Period are offered by the principal London office of theAdministrative Agent in immediately available funds in the London interbankmarket at approximately 11:00 a.m., London time, two Business Days priorto the commencement of such Interest Period.

 

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“Lien” means any interest in propertysecuring an obligation owed to, or a claim by, a Person other than the owner ofthe property, whether such interest is based on the common law, statute orcontract, and including but not limited to the security interest lien arisingfrom a mortgage, encumbrance, pledge, conditional sale or trust receipt or alease, consignment or bailment for security purposes.  The term “Lien” shall includereservations, exceptions, encroachments, easements, rights-of-way, covenants,conditions, restrictions, leases and other title exceptions and encumbrances(including, with respect to stock, stockholder agreements, voting trustagreements, buy-back agreements and all similar arrangements) affectingproperty.  For the purposes of thisAgreement, the Borrower or a Subsidiary shall be deemed to be the owner of anyproperty which it has acquired or holds subject to a conditional saleagreement, Capital Lease or other arrangement pursuant to which title to theproperty has been retained by or vested in some other Person for securitypurposes and such retention or vesting shall constitute a Lien.

 

“Long-Term Lease” means any lease ofreal or personal property (other than a Capital Lease) having an original term,including any period for which the lease may be renewed or extended at theoption of the lessor, of more than three years.

 

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

 

“Material Adverse Effect” means amaterial adverse effect on (a) the business, assets, operations orfinancial condition of the Borrower and its Subsidiaries taken as a whole, (b) theability of the Borrower or any Guarantor to perform any of its obligationsunder this Agreement and the other Financing Documents, taken as a whole, (c) thevalidity or enforceability of any of the Financing Documents, or (d) therights of or benefits available to the Lenders or the Administrative Agentunder this Agreement and the other Financing Documents, taken as a whole.

 

“Material Indebtedness” meansIndebtedness (other than the Loans), or obligations in respect of one or moreSwaps, of any one or more of the Borrower or any Restricted Subsidiary orGuarantor in an aggregate principal amount exceeding $2,500,000.

 

“Maturity Date” means December 16,2012.

 

“Member of the Zable Family” meansWalter J. Zable, his spouse, his children, his grandchildren and any trust ofwhich Walter J. Zable is the settlor.

 

“Multiemployer Plan” means amultiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

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

 

“Obligations” means all liabilitiesand obligations of Borrower, whether now existing or hereafter incurred,created or arising and whether direct or indirect, absolute or contingent, dueor to become due, arising out of or in connection with this Agreement,including, without limitation, all principal of and interest on the Loans, allfees, expenses, indemnities and other 

 

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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).

 

“Other Taxes” means any and allpresent or future stamp or documentary taxes or any other excise or propertytaxes, charges or similar levies arising from any payment made hereunder orfrom the execution, delivery or enforcement of, or otherwise with respect to,this Agreement.

 

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

 

“PBGC” means the Pension BenefitGuaranty Corporation referred to and defined in ERISA and any successor entityperforming similar functions.

 

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

 

“Permitted Acquisition”means the acquisition of all or substantially all of the assets, all or asubstantial part of, a business, division, brand or product line, or all orsubstantially all of the stock of any Person (such Person being the “Target”)that is engaged in a line of business which is substantially related to that ofthe Borrower and with respect to which:

 

(a)           such acquisition was approved by eachPerson’s (including the Target’s) Board of Directors (or other similargoverning body);

 

(b)           at the time of such proposed acquisitionand immediately after giving effect thereto, no Default would exist;

 

(c)           at the time of such proposalacquisition and immediately after giving effect thereto, the ratio of (i) ConsolidatedIndebtedness to (ii) Consolidated Adjusted EBITDA, on a pro forma basis,shall not be more than 2.50 to 1.00 (such compliance to be confirmed by anofficer’s certificate in a form satisfactory to the Administrative Agent); and

 

(d)           the Borrower shall have given theAdministrative Agent fifteen (15) days’ prior written notice, together with (i) allinstruments, 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 by the Borrower or a RestrictedSubsidiary and such other information which the Administrative Agent mayreasonably request in connection with any such proposed acquisition and (ii) ifthe total consideration being paid (including, without limitation, assumedIndebtedness or Preferred Stock) exceeds $20,000,000, financial statements, inform and substance satisfactory to the Administrative Agent, for the applicableTarget.

 

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For purposes hereof, “pro forma basis” shall mean therecalculation of the applicable financial covenants as if the proposed Target(or the business related to the assets to be acquired from the proposed Target)were consolidated with the Borrower for the twelve months immediately precedingthe date of such acquisition, with any Indebtedness of such acquired personwhich is retired in connection with such acquisition to be excluded from suchcalculations and deemed to have been retired as of the first day of suchapplicable period, with income statement items and other balance sheet items(whether positive or negative) attributable to such acquired person to beincluded in such pro forma calculations to the extent relating to any suchapplicable period and with such other adjustments as may be approved by theAdministrative Agent.

 

“Person” means any natural person,corporation, limited liability company, trust, joint venture, association,company, partnership, Governmental Authority or other entity.

 

“Plan” means any employee pensionbenefit plan (other than a Multiemployer Plan) subject to the provisions ofTitle IV of ERISA or Section 412 of the Code or Section 302 ofERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, ifsuch plan were terminated, would under Section 4069 of ERISA be deemed tobe) an “employer” as defined in Section 3(5) of ERISA.

 

“Preferred Stock” means any class ofcapital stock of a corporation that is preferred over any other class ofcapital stock of such corporation as to the payment of dividends or the paymentof any amount upon liquidation or dissolution of such corporation.

 

“Prime Rate” means the rate ofinterest per annum publicly announced from time to time by JPMorgan Chase Bank,N.A. as its prime rate in effect at its principal office in New York City;each change in the Prime Rate shall be effective from and including the datesuch change is publicly announced as being effective.

 

“Register” has the meaning set forthin Section 9.04.

 

“Regulation U” meansRegulation U of the Board, as the same is from time to time in effect, andall official rulings and interpretations thereunder or thereof.

 

“Related Parties” means, with respectto any specified Person, such Person’s Affiliates and the respective directors,officers, employees, agents and advisors of such Person and such Person’sAffiliates.

 

“Rentals” means and includes as of thedate of any determination thereof all fixed payments (including as such allpayments which the lessee is obligated to make to the lessor on termination ofthe lease or surrender of the property) payable by the Borrower or a RestrictedSubsidiary, as lessee or sublessee under a lease of real or personal property,but shall be exclusive of any amounts required to be paid by the Borrower or aRestricted Subsidiary (whether or not designated as rents or additional rents)on account of maintenance, repairs, insurance, taxes and similar charges.

 

“Required Lenders” means, at any time,Lenders having Revolving Credit Exposure and unused Commitments representing atleast 51% of the sum of the total Revolving Credit 

 

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Exposures and unusedCommitments at such time, all after giving effect to the terms of Section 2.19(b).

 

“Responsible Officer” means any SeniorFinancial Officer and any other officer of the Borrower with responsibility forthe administration of the relevant portion of this Agreement.

 

“Restricted Payment” means anydividend or other distribution (whether in cash, securities or other property)with respect to any Equity Interests in the Borrower or any Subsidiary, or anypayment (whether in cash, securities or other property), including any sinkingfund or similar deposit, on account of the purchase, redemption, retirement,acquisition, cancellation or termination of any such Equity Interests or anyoption, warrant or other right to acquire any such Equity Interests.

 

“Restricted Subsidiary” means anySubsidiary (a) of which more than 80% (by number of votes) of the EquityInterests with voting power is beneficially owned, directly or indirectly, bythe Borrower and (b) if applicable, as so designated within thelimitations of Section 6.07.

 

“Revolving Credit Commitment Fee” hasthe meaning set forth in Section 2.11(a).

 

“Revolving Credit Exposure” means,with respect to any Lender at any time, the sum of the outstanding principalamount of such Lender’s Revolving Loans and its LC Exposure and SwinglineExposure at such time.

 

“Revolving Loan” means a Loan madepursuant to Section 2.03.

 

“Revolving Loan Commitment” means,with respect to each Lender, the commitment of such Lender to make RevolvingLoans and to acquire participations in Letters of Credit and Swingline Loanshereunder, expressed as an amount representing the maximum aggregate amount ofsuch Lender’s Revolving Credit Exposure hereunder, as such commitment may be (a) increasedpursuant to Section 2.08(d), (b) reduced from time to timepursuant to Section 2.08(b) and (c) reduced or increasedfrom time to time pursuant to assignments by or to such Lender pursuant to Section 9.04.  The initial amount of each Lender’s RevolvingLoan Commitment is set forth on Schedule 2.01, or in the Assignment andAssumption pursuant to which such Lender shall have assumed its Revolving LoanCommitment, as applicable.  The initialaggregate amount of the Lenders’ Revolving Loan Commitments is$150,000,000.  Effective upon theassignment of an interest pursuant to Section 9.04, Schedule2.01 may be amended by the Administrative Agent to reflect such assignment.

 

“Sale and Leaseback Transaction” shallhave the meaning ascribed thereto in Section 6.04.

 

“SEC” is defined in Section 5.01(a);

 

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

 

“Senior Financial Officer” means thechief financial officer, principal accounting officer or treasurer of theBorrower.

 

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“Senior Funded Debt” means all FundedDebt of the Borrower which is not expressed to be subordinate or junior in rankto any other Funded Debt of the Borrower.

 

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

 

“Statutory Reserve Rate” means afraction (expressed as a decimal), the numerator of which is the number one andthe denominator of which is the number one minus the aggregate of the maximumreserve percentages (including any marginal, special, emergency or supplementalreserves) expressed as a decimal established by the Board to which theAdministrative Agent is subject with respect to the Adjusted LIBO Rate, foreurocurrency funding (currently referred to as “Eurocurrency Liabilities” inRegulation D of the Board).  Suchreserve 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 entity in which such Person orone or more of its Subsidiaries or such Person and one or more of its Subsidiariesowns sufficient equity or voting interests to enable it or them (as a group)ordinarily, in the absence of contingencies, to elect a majority of thedirectors (or Persons performing similar functions) of such entity, and anypartnership or joint venture if more than a 50% interest in the profits orcapital thereof is owned by such Person or one or more of its Subsidiaries orsuch Person and one or more of its Subsidiaries (unless such partnership canand does ordinarily take major business actions without the prior approval ofsuch Person or one or more of its Subsidiaries).  Unless the context otherwise clearlyrequires, any reference to a “Subsidiary” is a reference to a Subsidiaryof the Borrower.

 

“Swaps” means, with respect to anyPerson, payment obligations with respect to interest rate swaps, currency swapsand similar obligations obligating such Person to make payments, whetherperiodically or upon the happening of a contingency; provided that Swapsentered into by such Person in the ordinary course of business for the solepurpose of managing or hedging risk shall not be deemed or construed toconstitute 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.

 

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

 

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“Swingline Lender” means JPMorganChase Bank, N.A. in its capacity as lender of Swingline Loans hereunder.

 

“Swingline Loan” means a Loan madepursuant to Section 2.04.

 

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

 

“Transactions” means the execution,delivery and performance by the Borrower of this Agreement, the borrowing ofLoans, the use of the proceeds thereof and the issuance of Letters of Credithereunder.

 

“Type”, when used in reference to anyLoan or Borrowing, refers to whether the rate of interest on such Loan, or onthe Loans comprising such Borrowing, is determined by reference to the AdjustedLIBO Rate or the Alternate Base Rate.

 

“Unrestricted Subsidiary” means anySubsidiary which is not a Restricted Subsidiary and, if applicable, as has beendesignated as such within the limitations of Section 6.07.

 

“Wholly-owned Restricted Subsidiary”means, at any time, any Restricted 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 Restricted Subsidiaries at such time.

 

“Wholly-owned Subsidiary” means, atany time, any Subsidiary one hundred percent (100%) of all of the EquityInterests (except directors’ qualifying shares) and voting interests of whichare owned by any one or more of the Borrower and the Borrower’s otherWholly-owned Subsidiaries at such time.

 

“Withdrawal Liability” means liabilityto a Multiemployer Plan as a result of a complete or partial withdrawal fromsuch Multiemployer Plan, as such terms are defined in Part I ofSubtitle 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 “ABRBorrowing”) or by Class and Type (e.g., a “Eurodollar RevolvingBorrowing”).

 

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 documentherein shall be construed as referring to such agreement, instrument or otherdocument as from time to time amended, supplemented or otherwise modified(subject to any restrictions on such amendments, supplements or 

 

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modificationsset forth herein), (b) any reference herein to any Person shall beconstrued to include such Person’s successors and assigns, (c) the words “herein”,“hereof’ and “hereunder”, and words of similar import, shall be construed torefer to this Agreement in its entirety and not to any particular provisionhereof, (d) all references herein to Articles, Sections, Exhibits andSchedules shall be construed to refer to Articles and Sections of, andExhibits and Schedules to, this Agreement and (e) the words “asset” and “property”shall be construed to have the same meaning and effect and to refer to any andall tangible and intangible assets and properties, including cash, securities,accounts and contract rights.

 

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 to theforegoing and within the foregoing limits, the Borrower may borrow, repay (orprepay) and reborrow Revolving Loans, on and after the date hereof through theAvailability Period, subject to the terms, provisions and limitations set forthherein, including, without limitation, the requirement that no Revolving Loanshall 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) Each Loanshall be made as part of a Borrowing consisting of Revolving Loans made by theLenders 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 LoanCommitments of the Lenders are several and no Lender shall be responsible forany other Lender’s failure to make Loans as required.

 

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(b)           Subjectto Sections 2.07(e) and 2.13, each Borrowing shall becomprised entirely of ABR Loans or Eurodollar Loans as the Borrower may requestin accordance herewith.  Each SwinglineLoan shall be an ABR Loan.  Each Lenderat its option may make any Eurodollar Loan by causing any domestic or foreignbranch or 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.

 

(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.                             Requests for Borrowings. To request a Borrowing, the Borrower shall notify the AdministrativeAgent of such request by writing, facsimile or telephone (a) in the caseof a Eurodollar Borrowing, not later than 1:00 pm, New York Citytime, three Business Days before the date of the proposed Borrowing or (b) inthe case of an ABR Borrowing, not later than 1:00 pm(or 10:00 am, if financing the reimbursement of an LC Disbursement ascontemplated by Section 2.05(e) hereof), New York Citytime, 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)           theaggregate amount of the requested Borrowing;

 

(b)           thedate of such Borrowing, which shall be a Business Day;

 

(c)           whether such Borrowing is to be anABR 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.

 

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If no election as to the Type of Borrowing isspecified, then the requested Borrowing shall be an ABR Borrowing.  If no Interest Period is specified withrespect to any requested Eurodollar Borrowing, then the Borrower shall bedeemed to have selected an Interest Period of one month’s duration.  Promptly following receipt of a BorrowingRequest in accordance with this Section, the Administrative Agent shall adviseeach applicable Lender of the details thereof and of the amount of such Lender’sLoan to be made as part of the requested Borrowing.

 

Section 2.04.                             Swingline Loans.  (a) Subjectto the terms and conditions set forth herein, the Swingline Lender agrees tomake Swingline 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 laterthan 1:00 pm, New York City time, on the day of a proposedSwingline Loan.  Each such notice shallbe irrevocable and shall specify the requested date (which shall be a BusinessDay) and amount of the requested Swingline Loan.  The Administrative Agent will promptly advisethe Swingline Lender of any such notice received from the Borrower.  The Swingline Lender shall make eachSwingline Loan available to the Borrower by means of a credit to the generaldeposit account of the Borrower with the Swingline Lender (or, in the case of aSwingline Loan made to finance the reimbursement of an LC Disbursement as providedin Section 2.05(e), by remittance to the Issuing Bank)by 3:00 pm, New York City time, on the requested date of suchSwingline 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 requirethe Lenders to acquire participations on such Business Day in all or a portionof the Swingline Loans outstanding.  Suchnotice shall specify the aggregate amount of Swingline Loans in which Lenderswill participate.  Promptly upon receiptof such notice, the Administrative Agent will give notice thereof to eachLender, specifying in such notice such Lender’s pro rata (based on itsRevolving Loan Commitment) share of such Swingline Loan or Loans.  Each Lender hereby absolutely andunconditionally agrees, upon receipt of notice as provided above, to pay to theAdministrative Agent, for the account of the Swingline Lender, such Lender’spro rata (based on its Revolving Credit Commitment) share of such SwinglineLoan or Loans.  Each Lender acknowledgesand agrees that its obligation to acquire participations in Swingline Loanspursuant to this paragraph is absolute and unconditional and shall not beaffected by any circumstance whatsoever, including the occurrence and continuanceof a Default or reduction or termination of the Commitments, and that each suchpayment shall 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 2.06with respect to Loans made by such Lender (and Section 2.06 shallapply, mutatis mutandis, to the payment obligations of theLenders), and the Administrative Agent shall promptly pay to the SwinglineLender the amounts so received by it from the Lenders.  The Administrative Agent shall notify theBorrower of any participations in any

 

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Swingline Loan acquired pursuant to this paragraph,and thereafter payments in respect of such Swingline Loan shall be made to theAdministrative Agent and not to the Swingline Lender.  Any amounts received by the Swingline Lenderfrom the Borrower (or other party on behalf of the Borrower) in respect of aSwingline Loan after receipt by the Swingline Lender of the proceeds of a saleof participations therein shall be promptly remitted to the AdministrativeAgent; any such amounts received by the Administrative Agent shall be promptlyremitted by the Administrative Agent to the Lenders that shall have made theirpayments pursuant to this paragraph and to the Swingline Lender, as theirinterests may appear; provided that any such payment so remitted shallbe repaid to the Swingline Lender or to the Administrative Agent, asapplicable, if and to the extent such payment is required to be refunded to theBorrower for any reason.  The purchase ofparticipations in a Swingline Loan pursuant to this paragraph shall not relievethe Borrower of any default in the payment thereof.

 

Section 2.05.                             Letters of 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.  All ExistingLetters of Credit shall be deemed to have been issued pursuant hereto, and fromand after the Effective Date shall be governed by the terms and conditionshereof.

 

(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 with paragraph (c) ofthis Section), the amount of such Letter of Credit, the name and address of thebeneficiary thereof and such other information as shall be necessary toprepare, amend, renew or extend such Letter of Credit.  If requested by the Issuing Bank, theBorrower also shall submit a letter of credit application on the Issuing Bank’sstandard form in connection with any request for a Letter of Credit.  A Letter of Credit shall be issued, amended,renewed or extended only if (and upon issuance, amendment, renewal or extensionof each Letter of Credit the Borrower shall be deemed to represent and warrantthat), after giving effect to such issuance, amendment, renewal or extension (i) theLC Exposure shall not exceed $150,000,000 and (ii) after giving effect tothe issuance, amendment, renewal or extension of such Letter of Credit,Availability shall not be less than zero.

 

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(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 in clause (ii) below)to a date not more than one year after the then outstanding expiration dateunless, at least a specified number of days prior to such then existingexpiration date, the Issuing Bank shall have given the beneficiary thereofnotice, in a form that may be specified in such Letter of Credit, that suchexpiration date shall not be so extended, and (ii) the date that is fivedays prior to the Maturity Date.

 

(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 reimburse suchLC Disbursement by paying to the Administrative Agent an amount equal to suchLC 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 Citytime, on such date, or, if such notice has not been received by the Borrowerprior to such time on such date, then not later than 2:00 pm,New York City time, on (i) the Business Day that the Borrowerreceives such notice, if such notice is received prior to 1:00 pm,New York City time, on the day of receipt, or (ii) the Business Dayimmediately following the day that the Borrower receives such notice, if suchnotice is not received prior to such time on the date of receipt; providedthat, if such LC Disbursement is not less than $100,000, the Borrower may,subject to the conditions to borrowing set forth herein, request in accordancewith Section 2.03 or 2.04 that such payment be financed withan ABR Revolving Borrowing or Swingline Loan in an equivalent amount and, tothe extent so financed, the Borrower’s obligation to make such payment shall bedischarged and replaced by the resulting ABR Revolving Borrowing or SwinglineLoan.  If the Borrower fails to make suchpayment when due, the Administrative Agent shall notify each Lender of theapplicable LC Disbursement, the payment then due from the Borrower in respectthereof and such Lender’s pro rata (based on its Revolving Loan Commitment)portion thereof.  Promptly following receiptof such notice, each Lender shall pay to the Administrative Agent its pro rata

 

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(based on its Revolving Credit Commitment) portion ofthe payment then due from the Borrower, in the same manner as provided in Section 2.06with respect to Loans made by such Lender (and Section 2.06 shallapply, mutatismutandis, to the payment obligations of theLenders), and the Administrative Agent shall promptly pay to the Issuing Bankthe amounts so received 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 contemplated above) shall not constitute aLoan and shall not relieve the Borrower of its obligation to reimburse such LCDisbursement.

 

(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 to consequentialdamages, claims in respect of which are hereby waived by the Borrower to theextent permitted by applicable law) suffered by the Borrower that are caused bythe Issuing Bank’s failure to exercise care when determining whether drafts andother documents presented under a Letter of Credit comply with the termsthereof.  The parties hereto expresslyagree that, in the absence of gross negligence or wilful misconduct on the partof the Issuing Bank (as finally determined by a court of competent jurisdiction),the Issuing Bank shall be deemed to have exercised care in each suchdetermination.  In furtherance of theforegoing and without limiting the generality thereof, the parties agree that,with respect to documents presented which appear on their face to be incompliance with the terms of a Letter of Credit, the

 

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Issuing Bank may, in its sole discretion, eitheraccept and make payment upon such documents without responsibility for furtherinvestigation, regardless of any notice or information to the contrary, orrefuse to accept and make payment upon such documents if such documents are notin strict compliance with the terms of such Letter 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 to give or delayin giving such notice shall not relieve the Borrower of its obligation toreimburse the Issuing Bank and the Lenders with respect to any such LCDisbursement.

 

(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 paragraphshall be for the account of the Issuing Bank, except that interest accrued onand after the date of payment by any Lender pursuant to paragraph (c) ofthis Section to reimburse the Issuing Bank shall be for the account ofsuch Lender to the extent of such payment.

 

Section 2.06.                             Funding of 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,New York City time, to the account of the Administrative Agent mostrecently designated 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; providedthat Loans made to finance the reimbursement of an LC Disbursement as providedin 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

 

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Rate and a rate determined by the Administrative Agentin accordance with banking industry rules on interbank compensation or (ii) inthe case of the Borrower, the interest rate applicable to ABR Loans.  If such Lender pays such amount to theAdministrative Agent, then the Borrower shall be relieved of its obligation topay the corresponding amount to the Administrative Agent and such amount shallconstitute such Lender’s Loan included in such Borrowing.

 

Section 2.07.                             Interest Elections.  (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 Borrowing to a different Type orto continue such Borrowing and, in the case of a Eurodollar Borrowing, mayelect Interest Periods 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 to which such InterestElection Request applies and, if different options are being elected withrespect to different portions thereof, the portions thereof to be allocated toeach resulting Borrowing (in which case the information to be specifiedpursuant to clauses (iii) and (iv) belowshall be specified for each resulting Borrowing);

 

(ii)           the effective date of the electionmade pursuant to such Interest Election Request, which shall be a Business Day;

 

(iii)          whether the resulting Borrowing is tobe an ABR Borrowing or a Eurodollar Borrowing; and

 

(iv)          if the resulting Borrowing is aEurodollar Borrowing, the Interest Period to be applicable thereto after givingeffect to such election, which shall be a period contemplated by the definitionof the term “Interest Period”.

 

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If any such Interest Election Request requests aEurodollar Borrowing but does not specify an Interest Period, then the Borrowershall be deemed to have selected an Interest 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 hereof, if an Event of Default has occurred and is continuing and theAdministrative Agent, at the request of the Required Lenders, so notifiesBorrower, then, so long as an Event of Default is continuing (i) norequest may be made for a Eurodollar Borrowing and no outstanding Borrowing maybe converted to or continued as a Eurodollar Borrowing and (ii) eachEurodollar Borrowing, unless repaid as provided herein, shall be converted toan ABR Borrowing at the end of the Interest Period applicable thereto.

 

Section 2.08.                             Termination, Reduction and Increase ofCommitments.  (a)  Unless previously terminated,the Revolving Loan Commitments 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 specified effectivedate) if such condition is not satisfied. Any termination or reduction of the Revolving Loan Commitments shall bepermanent.  Each reduction of theRevolving Loan Commitments shall be made ratably among the Lenders withRevolving Loan Commitments in accordance with their respective Revolving LoanCommitments.

 

(d)           TheBorrower may at any time, by written notice to the Administrative Agent, andwith the consent of the Required Lenders, request that the Administrative Agentincrease the total Revolving Loan Commitments (a “Revolver Increase”) by(i) adding one or more new lenders to the revolving credit facility underthis Agreement (each a “New Lender”) who wish to participate in suchRevolver Increase and/or (ii) increasing the Revolving Loan Commitments ofone or more Lenders party to this Agreement who wish to participate in such

 

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Revolver Increase; provided, however,that (w) no Default or Event of Default shall have occurred and becontinuing as of the date of such request or as of the effective date of suchRevolver Increase (the “Increase Date”) or shall occur as a resultthereof, (x) any New Lender that becomes party to this Agreement pursuantto this Section 2.08(d) shall satisfy the requirements of Section 9.04(b) hereofand shall be acceptable to the Administrative Agent and consented to by theBorrower and (y) the other conditions set forth in this Section 2.08(e) beloware satisfied.  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 $75,000,000 and no single such RevolverIncrease shall be for an amount less than $1,000,000.

 

(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 LoanCommitment increased by the amount of its share of the Revolver Increase as ofsuch Increase Date; provided, however, that the AdministrativeAgent shall have (y) received from the Borrower all out-of-pocket costsand expenses incurred by the Administrative Agent or any Lender in connectionwith such Revolver Increase and (z) received on or before such IncreaseDate the following, each dated such date:

 

(i)            certified copies of resolutions ofthe governing body of the Borrower approving the Revolver Increase and thecorresponding modifications, if any, to the Financing Documents required undersubclause (vi) below, together with a certificate of the Borrowercertifying that there have been no changes to the constitutive documents of theBorrower since the Effective Date, or if there have been changes, copiescertified by the Borrower of all such changes;

 

(ii)           an assumption agreement from each NewLender participating in the Revolver Increase, if any, in form and substancesatisfactory to the Administrative Agent (each, an “Assumption Agreement”),duly executed by such New Lender, the Administrative Agent and the Borrower;

 

(iii)          confirmation from each Lenderparticipating in the Revolver Increase of the increase in the amount of its RevolvingLoan Commitment, in form and substance satisfactory to the AdministrativeAgent;

 

(iv)          a certificate of the Borrowercertifying that no Default or Event of Default shall have occurred and becontinuing or shall occur as a result of such Revolver Increase;

 

(v)           a certificate of the Borrowercertifying that the representations and warranties made by the Borrower hereinand in the other Financing Documents are true and complete in all materialrespects with the same force and effect as if made on and as of such date (or,to the extent any such representation or warranty specifically relates to

 

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an earlier date, suchrepresentation or warranty is true and complete in all material respects as ofsuch earlier date);

 

(vi)          supplements or modifications to theFinancing Documents and such additional Financing Documents, including any newNotes to New Lenders and replacement Notes to Lenders that agree to participatein such Revolver Increase, that the Administrative Agent reasonably deemsnecessary in order to document such Revolver Increase and otherwise assure andgive effect to the rights of the Administrative Agent and the Lenders in theFinancing Documents; and

 

(vii)         such other documents, instruments and informationas the Administrative Agent or its counsel shall reasonably deem necessary inconnection 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), by telecopier ortelex, of the occurrence of the Revolver Increase to be effected on suchIncrease Date.

 

Section 2.09.                             Repayment of 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 oraccounts evidencing the indebtedness of the Borrower to such Lender resultingfrom each Loan made by such Lender, including the amounts of principal andinterest payable 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 prima facie evidence of the existence and amounts ofthe obligations recorded therein; provided that the failure of anyLender or the Administrative Agent to maintain

 

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such accounts or any error therein shall not in anymanner affect the obligation of the Borrower to repay the Loans in accordancewith 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.                             Prepayment of 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 of $100,000 and not lessthan $1,000,000, subject to prior notice in accordance with paragraph (b) ofthis 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 BusinessDays before the date of prepayment or (ii) in the case of prepayment of anABR Borrowing, not later than 1:00 pm, New York City time, oneBusiness Day before the date of prepayment. Each such notice shall be irrevocable and shall specify the prepaymentdate and the principal amount of each Borrowing or portion thereof to beprepaid; provided that, if a notice of prepayment is given under thecircumstances in which a conditional notice of termination of the RevolvingLoan Commitments is permitted as contemplated by Section 2.08, thensuch notice of prepayment may be revoked if such notice of termination isrevoked 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 applicableto a prepayment 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 prepaidBorrowing.  Prepayments shall beaccompanied by accrued interest to the extent required by Section 2.10.

 

Section 2.11.                             Fees.  (a) TheBorrower agrees to pay to the Administrative Agent for the account of eachLender a commitment fee (the “Revolving Credit Commitment Fee”), whichshall accrue at the Applicable Rate on the daily amount of the unused RevolvingLoan Commitment of such Lender during the period from and including theEffective Date to but excluding the date on which such Revolving LoanCommitment terminates, whether or not prior to such time all the conditions in Section 4.02are met.  Accrued Revolving CreditCommitment Fees shall be payable quarterly in arrears on the fifth day ofJanuary, April, July and October of each year and on the date onwhich the Revolving Loan Commitments terminate, commencing on the first such dateto occur after the date hereof.  AllRevolving Credit Commitment Fees shall be computed on the basis of a year of360 days and shall be payable for the actual number of days elapsed (includingthe first day but excluding 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

 

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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 to standbyLetters of Credit issued to secure Borrower’s performance obligations undercontracts entered into by the Borrower in the ordinary course of business,seventy-five percent of such Applicable Rate) with respect to interest onEurodollar Revolving Loans for such day on the average daily amount of suchLender’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 termination of theRevolving Loan Commitments and the date on which there ceases to be any LCExposure, as well as the Issuing Bank’s standard fees with respect to theissuance, amendment, renewal or extension of any Letter of Credit or processingof drawings thereunder.  Participationfees and fronting fees accrued through and including the last day of January,April, July and October of each year shall be payable on the fifthday 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 fees payableto the Issuing Bank pursuant to this paragraph shall be payable within 10 daysafter demand.  All participation fees andfronting fees shall be computed on the basis of a year of 360 days and shall bepayable for the actual number of days elapsed (including the first day butexcluding 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) TheLoans comprising each ABR Borrowing (including each Swingline Loan) shall bear interestfor each day on which any principal of such Loans remains outstanding at theAlternate Base Rate 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 unless anduntil such Event of Default shall have been cured or waived, all outstandingamounts which are then due and owing shall bear interest, after as well asbefore judgment, at a rate per annum equal to 2% plus the rate otherwise applicableto ABR Loans as provided for in subsection (a) above.

 

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(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.

 

(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 eachcase shall be payable for the actual number of days elapsed (including thefirst day but excluding the last day). The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rateshall be determined by the Administrative Agent, and such determination shallbe conclusive absent manifest error.

 

Section 2.13.                             Alternate Rate of Interest. If prior to the commencement 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 the Administrative Agent shall give noticethereof to the Borrower and the Lenders by telephone or telecopy, as promptlyas practicable thereafter and, until the Administrative Agent notifies theBorrower and the Lenders that the circumstances giving rise to such notice nolonger exist, (i) any Interest Election Request that requests theconversion of any Borrowing to, or continuation of any Borrowing as, aEurodollar Borrowing shall be ineffective and (ii) if any BorrowingRequest or Interest Election Request requests a Eurodollar Borrowing, suchBorrowing shall be made as an ABR Borrowing.

 

Section 2.14.                             Increased Costs.  (a) Ifany Change in Law shall:

 

(i)            impose, modify or deem applicableany reserve, special deposit or similar requirement against assets of depositswith or for the account of, or credit extended by, any Lender (except any suchreserve requirement reflected in the Adjusted LIBO Rate); or

 

(ii)           impose on any Lender or the Londoninterbank market any other condition affecting this Agreement or EurodollarLoans made by such Lender or any Letter of Credit or participation therein;

 

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and the result of any of the foregoing shall be toincrease the cost to such Lender of making or maintaining any Eurodollar Loan(or of maintaining its obligation to make any such Eurodollar Loan) or toincrease the cost to such Lender or the Issuing Bank of participating in,issuing or maintaining any Letter of Credit or to reduce the amount of any sumreceived or receivable by such Lender or the Issuing Bank hereunder (whether ofprincipal, interest or otherwise) with respect to its Eurodollar Loans, thenthe Borrower will pay to such Lender or the Issuing Bank, as the case may be,such additional amount or amounts as will compensate such Lender or the IssuingBank, as the case may be, for such additional costs incurred or reductionsuffered.

 

(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 theIssuing Bank’s holding company could have achieved but for such Change in Law(taking into 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 to theBorrower 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, asthe case may be, notifies the Borrower of the Change in Law giving rise to suchincreased costs or reductions and of such Lender’s intention to claimcompensation therefor; provided furtherthat, if the Change in Law giving rise to such increased costs or reductions isretroactive, then the 270-day period referred to above shall be extended toinclude the period of retroactive effect thereof.

 

Section 2.15.                             Break Funding Payments. In the event of (a) the payment of any principal of any EurodollarLoan other than on the last day of an Interest Period applicable thereto(including as a result of an Event of Default), (b) the conversion of any EurodollarLoan other than on the last day of the Interest Period applicable thereto or (c) thefailure to borrow, convert, continue or prepay any Eurodollar Loan on the datespecified in any notice delivered pursuant hereto (regardless of whether suchnotice may be revoked under Section 2.08(b) and is revoked inaccordance therewith), then, in any such event, the Borrower shall compensateeach Lender

 

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forthe 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, convertor continue, for the period that would have been the Interest Period for suchLoan), over (ii) the amount of interest which would accrue on suchprincipal amount for such period at the interest rate which such Lender wouldbid were it to bid, at the commencement of such period, for dollar deposits ofa comparable amount and period from other banks in the eurodollar market.  A certificate of any Lender setting forth inreasonable detail any amount or amounts that such Lender is entitled to receivepursuant to this Section shall be delivered to the Borrower and shall beconclusive absent manifest error.  TheBorrower shall pay such Lender the amount shown as due on any such certificatewithin 10 days after receipt thereof.

 

Section 2.16.                             Taxes.  (a) Anyand all payments by or on account of any obligation of the Borrower hereundershall be made free and clear of and without deduction for any Indemnified Taxesor Other Taxes; provided that if the Borrower shall be required todeduct any Indemnified Taxes or Other Taxes from such payments, then (i) thesum payable shall be increased as necessary so that after making all requireddeductions (including deductions applicable to additional sums payable underthis Section) the Administrative Agent or Lender (as the case may be) receivesan amount equal to the sum it would have received had no such deductions beenmade, (ii) the Borrower shall make such deductions and (iii) theBorrower shall pay the full amount deducted to the relevant GovernmentalAuthority in accordance with applicable 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

 

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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 been indemnifiedby the Borrower or with respect to which the Borrower has paid additionalamounts pursuant to Section 2.16, it shall pay over such refund tothe Borrower (but only to the extent of indemnity payments made, or additionalamounts paid, by the Borrower under this Section 2.16 with respectto the Taxes or Other Taxes giving rise to such refund); provided, thatthe Borrower, upon the request of the Administrative Agent or such Lender,agrees to repay the amount paid over to the Borrower (plus any penalties,interest or other charges imposed by the relevant Governmental Authority) tothe Administrative Agent or such Lender in the event that the AdministrativeAgent or such Lender is required to repay such refund to such GovernmentalAuthority.  This section shall not beconstrued to require the Administrative Agent or any Lender to make availableits tax returns (or other information relating to its taxes which it deemsconfidential) to the Borrower or any other Person.

 

Section 2.17.         PaymentsGenerally; Pro Rata Treatment; Sharing of Set-offs.  (a) The Borrower shall make each paymentrequired to be made by it hereunder (whether of principal, interest, fees orreimbursement of LC Disbursements or of amounts payable under Section 2.14,2.15 or 2.16, or otherwise) prior to 1:00 pm, New YorkCity time, on the date when due, in immediately available funds, withoutset-off or counterclaim.  Any amountsreceived after such time on any date may, in the discretion of theAdministrative Agent, be deemed to have been received on the next succeedingBusiness Day for purposes of calculating interest thereon.  The Administrative Agent may charge, when dueand payable, the Borrower’s account with the Administrative Agent for allinterest, principal and Revolving Credit Commitment Fees or other fees owing tothe Administrative Agent or the Lenders on or with respect to this Agreementand/or Loans and other Financing Documents. All such payments shall be made to the Administrative Agent at itsoffices at 1411 Broadway, New York, New York, except that paymentspursuant to Sections 2.14, 2.15, 2.16 and 9.03shall 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 accruing interest,interest thereon shall be payable for the period of such extension; providedthat, in the case of any prepayment of principal of or interest on anyEurodollar Loan, if such next succeeding Business Day would fall in the nextcalendar month, the date for payment shall instead be the next precedingBusiness Day.  All payments hereundershall be made 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

 

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of principal and unreimbursed LC Disbursements thendue hereunder, ratably among the parties entitled thereto in accordance withthe amounts 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 participations in LC Disbursementsand Swingline Loans and accrued interest thereon than the proportion receivedby any other Lender, then the Lender receiving such greater proportion shallpurchase (for cash at face value) participations in the Revolving Loans andparticipations in LC Disbursements and Swingline Loans of other Lenders to the extentnecessary so that the benefit of all such payments shall be shared by theLenders ratably in accordance with the aggregate amount of principal of andaccrued interest on their respective Revolving Loans in participations in LCDisbursements and Swingline Loans; provided that (i) if any suchparticipations are purchased and all or any portion of the payment giving risethereto is recovered, such participations shall be rescinded and the purchaseprice restored to the extent of such recovery, without interest, and (ii) theprovisions of this paragraph shall not be construed to apply to any paymentmade by the Borrower pursuant to and in accordance with the express terms ofthis Agreement or any payment obtained by a Lender as consideration for theassignment of or sale of a participation in any of its Loans or participationsin LC Disbursements to any assignee or participant, other than to the Borroweror any Subsidiary or Affiliate thereof (as to which the provisions of thisparagraph shall apply).  The Borrowerconsents to the foregoing and agrees, to the extent it may effectively do sounder applicable law, that any Lender acquiring a participation pursuant to theforegoing arrangements may exercise against the Borrower rights of set-off andcounterclaim with respect to such participation as fully as if such Lender werea direct creditor of the Borrower in the amount of 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),Section 2.17(c) or Section 9.03, then theAdministrative Agent may, in its discretion (notwithstanding any contraryprovision hereof), (i) apply any amounts thereafter received by theAdministrative Agent for the account of such Lender and for the benefit of theAdministrative Agent, the Swingline Lender or

 

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the Issuing Bank to satisfy such Lender’s obligationsunder such Sections until all such unsatisfied obligations are fully paid,and/or (ii) hold any such amounts in a segregated account as cashcollateral for, and application to, any future funding obligations of suchLender under such Sections; in the case of each of (i) and (ii) above,in any order as determined by the Administrative Agent in its discretion.

 

Section 2.18.                             Mitigation Obligations.

 

(a)           Ifany Lender requests compensation under Section 2.14, or if theBorrower is required to pay any additional amount to any Lender or anyGovernmental Authority for the account of any Lender pursuant to Section 2.16,then such Lender shall use reasonable efforts to designate a different lendingoffice for funding or booking its Loans hereunder or to assign its rights andobligations hereunder to another of its offices, branches or affiliates, if, inthe judgment of such Lender, such designation or assignment (i) wouldeliminate or reduce amounts payable pursuant to Section 2.14 or 2.16,as the case may be, in the future and (ii) would not subject such Lenderto any unreimbursed cost or expense and would not otherwise be disadvantageousto such Lender.  The Borrower herebyagrees to pay all reasonable costs and expenses incurred by any Lender inconnection with any such designation or assignment.

 

(b)           Ifany Lender requests compensation under Section 2.14, or if theBorrower is required to pay any additional amount to any Lender or anyGovernmental Authority for the account of any Lender pursuant to Section 2.16,or if any Lender becomes a Defaulting Lender, then the Borrower may, at itssole expense and effort, upon notice to such Lender and the AdministrativeAgent, require such Lender to assign and delegate, without recourse (inaccordance with and subject to the restrictions contained in Section 9.04),all its interests, rights and obligations under this Agreement to an assigneethat shall assume such obligations (which assignee may be another Lender, if aLender accepts such assignment); provided that (i) the Borrowershall have received the prior written consent of the Administrative Agent (andif a Commitment is being assigned, the Issuing Bank), which consent shall notunreasonably be withheld, (ii) such Lender shall have received payment ofan amount equal to the outstanding principal of its Loans and participations inLC Disbursements and Swingline Loans, accrued interest thereon, accrued feesand all other amounts payable to it hereunder, from the assignee (to the extentof such outstanding principal and accrued interest and fees) or the Borrower(in the case of all other amounts), and (iii) in the case of any suchassignment resulting from a claim for compensation under Section 2.14or payments required to be made pursuant to Section 2.16, suchassignment will result in a reduction in such compensation or payments and (iv) suchassignment does not conflict with applicable law.  A Lender shall not be required to make anysuch assignment and delegation if, prior thereto, as a result of a waiver bysuch Lender or otherwise, the circumstances entitling the Borrower to requiresuch assignment and delegation cease to apply.

 

Section 2.19.                             Defaulting Lenders.

 

Notwithstanding any provision of thisAgreement to the contrary, if any Lender becomes a Defaulting Lender, then thefollowing provisions shall apply for so long as such Lender is a DefaultingLender:

 

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(a)           feesshall cease to accrue on the unfunded portion of the Commitment of suchDefaulting Lender pursuant to Section 2.11(a);

 

(b)           theCommitment and Revolving Credit Exposure of such Defaulting Lender shall not beincluded in determining whether all Lenders or the Required Lenders have takenor may take any action hereunder (including any consent to any amendment orwaiver pursuant to Section 9.02), provided that any waiver,amendment or modification requiring the consent of all Lenders or each affectedLender which affects such Defaulting Lender differently than other affectedLenders shall require the consent of such Defaulting Lender;

 

(c)           ifany Swingline Exposure or LC Exposure exists at the time a Lender becomes aDefaulting Lender then:

 

(i)            all or any part of such SwinglineExposure and LC Exposure shall be reallocated among the non-Defaulting Lendersin accordance with their respective pro rata shares (based on their respectiveRevolving Loan Commitments) but only to the extent (x) the sum of allnon-Defaulting Lenders’ Revolving Credit Exposures plus such Defaulting Lender’sSwingline Exposure and LC Exposure does not exceed the total of allnon-Defaulting Lenders’ Commitments and (y) the conditions set forth in Section 4.02are satisfied at such time; and

 

(ii)           if the reallocation described in clause(i) above cannot, or can only partially, be effected, the Borrower shallwithin one Business Day following notice by the Administrative Agent (x) first,prepay such Swingline Exposure and (y) second, cash collateralizesuch Defaulting Lender’s LC Exposure (after giving effect to any partialreallocation pursuant to clause (i) above) for so long as such LC Exposureis outstanding;

 

(iii)          if the Borrower cash collateralizesany portion of such Defaulting Lender’s LC Exposure pursuant to Section 2.19(c),the Borrower shall not be required to pay any fees to such Defaulting Lenderpursuant to Section 2.11(b) with respect to such DefaultingLender’s LC Exposure during the period such Defaulting Lender’s LC Exposure iscash collateralized;

 

(iv)          if the LC Exposure of thenon-Defaulting Lenders is reallocated pursuant to Section 2.19(c),then the fees payable to the Lenders pursuant to Section 2.11(a) andSection 2.11(b) shall be adjusted in accordance with suchnon-Defaulting Lenders’ pro rata shares (based on their respective RevolvingLoan Commitments); or

 

(v)           if any Defaulting Lender’s LCExposure is neither cash collateralized nor reallocated pursuant to Section 2.19(c),then, without prejudice to any rights or remedies of the Issuing Bank or anyLender hereunder, all letter of credit fees payable under Section 2.11(b) withrespect to such Defaulting Lender’s LC Exposure shall be payable to the IssuingBank until such LC Exposure is cash collateralized and/or reallocated; and

 

(d)           solong as any Lender is a Defaulting Lender, the Swingline Lender shall not berequired to fund any Swingline Loan and the Issuing Bank shall not be requiredto issue,

 

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amend or increase any Letter of Credit, unless it issatisfied that the related exposure will be 100% covered by the Commitments ofthe non-Defaulting Lenders and/or cash collateral will be provided by theBorrower in accordance with Section 2.19(c), and participatinginterests in any such newly issued or increased Letter of Credit or newly madeSwingline Loan shall be allocated among non-Defaulting Lenders in a mannerconsistent with Section 2.19(c)(i) (and Defaulting Lendersshall not participate therein).

 

In the event that the Administrative Agent,the Borrower, the Issuing Bank and the Swingline Lender each agrees that aDefaulting Lender has adequately remedied all matters that caused such Lenderto be a Defaulting Lender, then the Swingline Exposure and LC Exposure of theLenders shall be readjusted to reflect the inclusion of such Lender’sCommitment and on such date such Lender shall purchase at par such of the Loansof the other Lenders (other than Swingline Loans) as the Administrative shalldetermine may be necessary in order for such Lender to hold such Loans inaccordance with its pro rata share (based on its Revolving Loan Commitment).

 

ARTICLE III

Representationsand Warranties

 

The Borrower represents andwarrants 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) The Borrowerhas heretofore furnished to the Administrative Agent financial statements ofthe Borrower (i) for the fiscal years ended September 30, 2007 and September 30,2008 audited by Ernst & Young LLP, independent public

 

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accountantsand (ii) for the fiscal quarters ended December 31, 2008, March 31,2009 and June 30, 2009, which quarterly financial statements wereunaudited.  Such financial statementspresent fairly in all material respects the financial condition and results ofoperations of the Borrower and its Subsidiaries as of the dates and for theperiods indicated, and such financial statements disclose in accordance withGAAP all material liabilities, direct or contingent, of the Borrower as of thedates thereof.

 

(b)                                 Since September 30, 2008, there hasbeen no material adverse change in the business, prospects, assets, operationsor financial condition of the Borrower and its Restricted Subsidiaries,considered as a whole.

 

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 each ERISA Affiliate has fulfilled itsobligations under the minimum funding standards of ERISA and the InternalRevenue Code with respect to each Plan and is in compliance in all materialrespects with the presently applicable provisions of ERISA and the Code withrespect to each Plan, and has not incurred any liability under Title IV ofERISA (i) to the PBGC other than a liability to the PBGC for premiumsunder Section 4007 of ERISA or (ii) in respect of a MultiemployerPlan 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.         Environmental Compliance.  (a) Except for Disclosed Matters,

 

(i)            the Borrower and its RestrictedSubsidiaries have, obtained, or made timely application for, all permits,certificates, licenses, approvals, registrations and other authorizations(collectively “Permits”) which are required under all applicableEnvironmental Laws and are necessary for their operations and are in compliancewith the terms and conditions of all such Permits, except where the failure toobtain such Permits or to comply with their terms would not have, individuallyor in the aggregate, a Material Adverse Effect;

 

(ii)           no notice, notification, demand,request for information, citation, summons, complaint or order has been issued,no complaint has been filed, no penalty

 

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has been assessed and noinvestigation or review is pending, or to the Borrower’s knowledge, threatenedby any governmental entity or other Person with respect to any (A) allegedviolation by the Borrower or any Restricted Subsidiary of any EnvironmentalLaw, (B) alleged failure by the Borrower or any Restricted Subsidiary tohave any Permits required in connection with the conduct of its business or tocomply with the terms and conditions thereof, (C) any generation,treatment, storage, recycling, transportation or disposal of any HazardousMaterials or (D) release of Hazardous Materials, except where such eventor events would not have, individually or in the aggregate, a Material AdverseEffect;

 

(iii)          to the knowledge of the Borrower, alloral or written notifications of a release of Hazardous Materials required tobe filed under any applicable Environmental Law have been filed or are in theprocess of being filed by or on behalf of the Borrower or any RestrictedSubsidiary;

 

(iv)          no property now owned or leased by theBorrower or any Restricted Subsidiary and, to the knowledge of the Borrower, nosuch property previously owned or leased or any property to which the Borroweror any Restricted Subsidiary has, directly or indirectly, transported orarranged for the transportation of any Hazardous Materials, is listed or, tothe Borrower’s knowledge, proposed for listing, on the National Priorities Listpromulgated pursuant to CERCLA, or CERCLIS (as defined in CERCLA) or anysimilar state list or is the subject of federal, state or local enforcementactions or, to the knowledge of the Borrower, other investigations which maylead to claims against the Borrower or any Restricted Subsidiary for clean-upcosts, remedial work, damage to natural resources or personal injury claims,including, but not limited to, claims under CERCLA, except where such listingsor investigations would not have, individually or in the aggregate, a MaterialAdverse Effect;

 

(v)           there are no Liens under or pursuantto any applicable Environmental Laws on any real property or other assets ownedor leased by the Borrower or any Restricted Subsidiary, and no governmentactions have been taken or, to the knowledge of the Borrower, are in processwhich 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 itsRestricted Subsidiaries has good title to, or valid leasehold interests in, allits real and personal property material to its business, except for minordefects in title that do not interfere with its ability to conduct its businessas currently conducted or to utilize such properties for their intendedpurposes.

 

(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

 

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upon the rights of any other Person, except for anysuch infringements that, individually or in the aggregate, could not reasonablybe 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 where the failure to do so, individually or in the aggregate,could not reasonably be expected to result in a Material Adverse Effect.

 

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

 

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a time when, or in an amount such that, they will beunable to satisfy any such judgments promptly in accordance with their terms(taking into account the maximum reasonable amount of such judgments in anysuch actions and the earliest reasonable time at which such judgments might berendered).  The cash flow of the Borrowerand its Restricted Subsidiaries, after taking into account all otheranticipated uses of the cash of the Borrower and its Restricted Subsidiaries(including the payments 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.

 

Section 3.14.         EmployeeMatters.  Except for DisclosedMatters, 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.         Useof Proceeds.  All proceeds of eachBorrowing under the Revolving Loan Commitments shall be used to repay existingIndebtedness, make Permitted Acquisitions, and provide for working capitalrequirements and general corporate purposes and none of such proceeds will beused, directly or indirectly, for the purpose, whether immediate, incidental orultimate, of buying or carrying any “margin stock” within the meaning ofRegulation U of the Board of Governors of the Federal Reserve System, asthe same is from time to time in effect..

 

Section 3.16.         Subsidiaries.  As of the Effective Date, the Borrower hasthe Restricted Subsidiaries set forth on Schedule 3.16A and theUnrestricted Subsidiaries set forth on Schedule 3.16B.

 

Section 3.17.         NoChange 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, 2008.

 

ARTICLE IV

Conditions

 

Section 4.01.         EffectiveDate.  The obligations of the Lendersto make Loans hereunder and of the Issuing Bank to issue Letters of Creditshall not become effective until the date on which each of the followingconditions is satisfied (or waived in accordance 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) of WilliamL. Hoese, Assistant General Counsel of the Borrower, substantially in the formof Exhibit B, and covering such other matters relating to the Borrower,this

 

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Agreement or theTransactions as the Required Lenders shall reasonably request.  The Borrower hereby requests such counsel todeliver 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, theauthorization of the Transactions and any other legal matters relating to theBorrower and any Guarantors, this Agreement or the Transactions (including,without limitation, confirmation that all third party and governmentalapprovals necessary for the Transaction have been obtained and are in force),all in form and substance reasonably satisfactory to the Administrative Agentand 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 in paragraphs(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)            evidenceof the compliance by the Borrower with Section 5.06 hereof;

 

(ii)           thefinancial statements 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 Existing Credit Agreement and thetermination 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.

 

The Administrative Agent shall notify the Borrowerand the Lenders of the Effective Date, 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

 

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conditions is satisfied (or waived pursuant to Section 9.02)at or prior to 3:00 pm, New York City time, on December 31, 2009(and, in the event such conditions are not so satisfied or waived, theCommitments shall 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 thesatisfaction on such date of the following conditions:

 

(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 Borrowing shall be deemed to constitute arepresentation and warranty by the Borrower on the date thereof as to thematters specified in paragraphs (a) and (b) of this Section.

 

ARTICLE V

 

Affirmative Covenants

 

Until the Commitments have expired or beenterminated and the principal of and interest on each Loan and all fees andother Obligations payable hereunder have been paid in full, and all Letters ofCredit shall have expired or terminated and all LC Disbursements shall havebeen reimbursed, the Borrower covenants and agrees with the Lenders that:

 

Section 5.01.         Financialand Business Information.  TheBorrower shall deliver to the Administrative 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 consolidated balance sheet of theBorrower and its Restricted Subsidiaries as at the end of such quarter, and

 

(ii)           consolidated statements of income,changes in shareholders’ equity and cash flows of the Borrower and itsRestricted Subsidiaries for such quarter and (in the case of the second andthird quarters) for the portion of the fiscal year ending with such quarter,

 

setting forth in each case in comparative form thefigures for the corresponding periods in the previous fiscal year, all inreasonable detail, prepared in accordance with GAAP applicable to quarterlyfinancial statements generally, and certified by a Senior Financial Officer asfairly presenting, in all material respects, the financial position of the companiesbeing reported on and

 

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their results of operations and cash flows, subjectto changes resulting from year-end adjustments; provided that if theBorrower’s Quarterly Report on Form 10-Q prepared in compliance with therequirements therefor and filed with the Securities 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) mustbe satisfied by complying with such shorter time period (subject always to theBorrower’s compliance with Section 5.04);

 

(b)           Annual Statements — within 120days after the end of each fiscal year of the Borrower, commencing with thefiscal year ending September 30, 2009, duplicate copies of,

 

(i)            a consolidated balance sheet of theBorrower and its Restricted Subsidiaries, as at the end of such year, and

 

(ii)           consolidated statements of income,changes in shareholders’ equity and cash flows of the Borrower and itsRestricted Subsidiaries, for such year,

 

setting forth in each case in comparative form thefigures for the previous fiscal year, all in reasonable detail, prepared inaccordance with GAAP, and accompanied by:

 

(1)           an unqualifiedopinion thereon of independent certified public accountants of recognizednational standing, which opinion shall state that such financial statementspresent fairly, in all material respects, the financial position of thecompanies being reported upon and their results of operations and cash flowsand have been prepared in conformity with GAAP, and that the examination ofsuch accountants in connection with such financial statements has been made inaccordance with generally accepted auditing standards, and that such auditprovides a reasonable basis for such opinion in the circumstances, and

 

(2)           a certificate ofsuch accountants stating that they have reviewed this Agreement and statingfurther whether, in making their audit, they have become aware of any conditionor event that then constitutes a Default, and, if they are aware that any suchcondition or event then exists, specifying the nature and period of theexistence thereof (it being understood that such accountants shall not beliable, 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),

 

provided that if the Borrower’sAnnual Report on Form 10-K for such fiscal year (together with theBorrower’s annual report to shareholders, if any, prepared pursuant to Rule 14a-3under the Exchange Act) prepared in accordance with the requirements thereforand filed with the SEC is required to be delivered within a shorter timeperiod, then the Borrower’s compliance with the requirements of this Section 5.01(b) (otherthan the accountant’s certificate described in clause (2) above whichmay be delivered within said 120-day period), must be satisfied by complyingwith such shorter time period (subject to the Borrower’s compliance with Section 5.04);

 

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(c)           SECand Other Reports — 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 each prospectus and all amendmentsthereto filed by the Borrower or any Subsidiary with the SEC;

 

(d)           Noticeof Default or Event of Default — promptly, and in any event within fiveBusiness Days after a Responsible Officer becoming aware of the existence ofany Default or that any Person has given any notice or taken any action withrespect to a claimed default hereunder or that any Person has given any noticeor taken any action with respect to a claimed default or that any Person hasgiven any notice or taken any action with respect to a claimed default of thetype referred to in subparagraph (f) of Article VII, a writtennotice specifying the nature and period of existence thereof and what actionthe Borrower is taking or proposes to take with respect thereto;

 

(e)           ERISAMatters — promptly, and in any event within five Business Days after aResponsible Officer becoming aware of any of the following, a written noticesetting forth the nature thereof and the action, if any, that the Borrower oran ERISA Affiliate 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 the PBGC of steps toinstitute, or the threatening by the PBGC of the institution of, proceedingsunder Section 4042 of ERISA for the termination of, or the appointment ofa trustee to administer, any Plan, or the receipt by the Borrower or any ERISAAffiliate of a notice from a Multiemployer Plan that such action has been takenby the PBGC with respect to such Multiemployer Plan; or

 

(iii)          any ERISA Event or any event,transaction or condition that could result in the incurrence of any liabilityby the Borrower or any ERISA Affiliate pursuant to Title I or IV ofERISA or the penalty or excise tax provisions of the Code relating to employeebenefit 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, ifsuch liability or Lien, taken together with any other such liabilities or Liensthen existing, could reasonably be expected to have a Material Adverse Effect;

 

(f)            Noticesfrom Governmental 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

 

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(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 Borrower to perform its obligations hereunder and under theother Financing Documents as from time to time may be reasonably requested bythe Administrative Agent or any Lender.

 

Section 5.02.        Officer’sCertificate.  The Borrower shalldeliver to the Administrative Agent and each Lender within 60 days after theend of each quarterly fiscal period in each fiscal year of the Borrower (otherthan the last quarterly fiscal period of each such fiscal year) and within 120days after the end of each fiscal year of the Borrower, a certificate in theform of Exhibit 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 bythe most recent statements furnished (including with respect to each suchSection, where applicable, the calculations of the maximum or minimum amount,ratio or percentage, as the case may be, permissible under the terms of suchSections, and the calculation of the amount, ratio or percentage then inexistence); 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 representativesof the Administrative Agent 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

 

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(b)           Default —  if a Default under Article VI orSubsection (b) of Article VII hereof or an Event of Defaultthen exists, at the expense (all of which expenses shall be reasonable) of theBorrower, to visit and inspect any of the offices or properties of the Borroweror any 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.          ReportingTreatment of Unrestricted Subsidiaries. Notwithstanding anything to the contrary contained in this Agreement, solong as the Unrestricted Subsidiaries continue to constitute, in the aggregate,less than 7% of Consolidated Total Capitalization in any fiscal period, theBorrower shall be permitted to include, for purposes of the financial reportingrequirements contained in Sections 5.01(a) and (b), andonly for purposes of such Sections (and in no event for purposes ofdetermining compliance with any of the covenants contained in this Article Vor Article VI hereof), the financial information of such entitieson a consolidated basis.  If at any timethe Unrestricted Subsidiaries shall constitute, in the aggregate, 7% or more ofConsolidated Total Capitalization in any fiscal period, the Borrower shall,notwithstanding that Section 5.01(a) and (b) permitthe Borrower to comply therewith by delivery of its Quarterly Reports on SEC Form 10-Qand Annual Reports on SEC Form 10-K, either:  (a) provide consolidating financialstatements 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) and only for purposes of such Sections (and in no eventfor purposes of determining compliance with any of the covenants contained inthis Article V or Article VI hereof) or (b) excludethe financial information on a consolidated basis for the UnrestrictedSubsidiaries from the consolidated financial statements required to bedelivered by the Borrower for such period pursuant to Sections 5.01(a) and(b).  In no event shall theBorrower include financial information of the Unrestricted Subsidiaries forpurposes of any determination of compliance with any of the covenants containedin this Article V or Article VI hereof.

 

Section 5.05.          Compliancewith Law.  The Borrower will, andwill cause each of its Subsidiaries to, comply with all laws, ordinances orgovernmental rules or regulations to which each of them is subject,including, without limitation, ERISA and all Environmental Laws, and willobtain and maintain in effect all licenses, certificates, permits, franchisesand other governmental authorizations necessary to the ownership of theirrespective properties or to the conduct of their respective businesses, in eachcase to the extent necessary to ensure that non-compliance with such laws,ordinances or governmental rules or regulations or failures to obtain ormaintain in effect such licenses, certificates, permits, franchises and othergovernmental authorizations could not, individually or in the aggregate,reasonably be expected to have a Material Adverse Effect.

 

Section 5.06.          Insurance.  The Borrower will, and will cause each of itsSubsidiaries to, maintain, with financially sound and reputable insurers,insurance with respect to their respective properties and businesses againstsuch casualties and contingencies, of such types, on such terms

 

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and insuch amounts (including deductibles, co-insurance and self- insurance, ifadequate reserves are maintained with respect thereto) as is customary in thecase of entities of established reputations engaged in the same or a similar businessand similarly situated.

 

Section 5.07.          Maintenanceof Properties.  The Borrower will,and will cause each of its Subsidiaries to, maintain and keep, or cause to bemaintained and kept, their respective properties in good repair, working orderand condition (other than ordinary wear and tear), so that the business carriedon in connection therewith may be properly conducted at all times; providedthat this Section shall not prevent the Borrower or any Subsidiary fromdiscontinuing the operation and the maintenance of any of its properties ifsuch discontinuance is desirable in the conduct of its business and the Boardof Directors of the Borrower has concluded that such discontinuance could not,individually or in the aggregate, reasonably be expected to have a MaterialAdverse Effect.

 

Section 5.08.          Paymentof Taxes and Claims.  The Borrowerwill, and will cause each of its Subsidiaries to, file all tax returns requiredto be filed in any jurisdiction and to pay and discharge all taxes shown to bedue and payable on such returns and all other taxes, assessments, governmentalcharges, or levies imposed on them or any of their properties, assets, incomeor franchises, to the extent such taxes and assessments have become due andpayable and before they have become delinquent and all claims for which sumshave become due and payable that have or might become a Lien on properties orassets of the Borrower or any Restricted Subsidiary; provided thatneither the Borrower nor any Subsidiary need pay any such tax or assessment orclaims if (a) the amount, applicability or validity thereof is contestedby the Borrower or such Subsidiary on a timely basis in good faith and inappropriate proceedings, and the Borrower or a Subsidiary has establishedadequate reserves therefor in accordance with GAAP on the books of the Borroweror such Subsidiary or (b) the nonpayment of all such taxes andassessments, governmental charges, levies and claims in the aggregate could notreasonably be expected to have a Material Adverse Effect.

 

Section 5.09.          CorporateExistence, Etc.  The Borrower will atall times preserve and keep in full force and effect its corporate existenceand will keep proper books of record and account reflecting its business andactivities.  Subject to Section 6.05,the Borrower will at all times preserve and keep in full force and effect thecorporate existence of each of its Subsidiaries (unless merged into theBorrower or a Subsidiary) and all rights and franchises of the Borrower and itsSubsidiaries unless, in the good faith judgment of the Borrower, thetermination of or failure to preserve and keep in full force and effect suchcorporate existence, right or franchise could not, individually or in theaggregate, have a Material Adverse 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 besubstantially changed from the general nature of the business engaged in by theBorrower and its 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

 

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Subsidiarynot in existence on the date hereof to enter into a Guarantee substantially inthe form of Exhibit D.  Inconnection therewith, the Borrower or any applicable Subsidiary shall providesuch resolutions, certificates and opinions of counsel as shall be reasonablyrequested by the Administrative Agent.

 

ARTICLE VI

 

Negative Covenants

 

Until the Commitments haveexpired or terminated and the principal of and interest on each Loan and allfees and other Obligations payable hereunder have been paid in full and allLetters of Credit have expired or terminated and all LC Disbursements shallhave been reimbursed, the Borrower covenants and agrees with the Lenders that:

 

Section 6.01.          Financial Ratios.

 

(a)           TheBorrower will not at any time permit the ratio determined at the end of eachfiscal quarter on a rolling four quarter basis of (i) Consolidated EBITDAto (ii) Consolidated Cash Interest Expense to be less than 3.00:1.00.

 

(b)           TheBorrower will not at any time permit the ratio determined at the end of each fiscalquarter on a rolling four fiscal quarter basis of (i) ConsolidatedIndebtedness to (ii) Consolidated Adjusted EBITDA to be greater than3.00:1.00.

 

Section 6.02.          Limitations on Indebtedness.

 

(a)           TheBorrower will not, and will not permit any Subsidiary to, create, incur, assumeor permit to exist any Indebtedness, except if both before and after givingeffect to any such creation, incurrence or assumption the Borrower is incompliance with Section 6.01 hereof.

 

(b)           TheBorrower will not permit any Subsidiary to create, incur, assume or permit toexist any Indebtedness if, after giving effect to any such creation, incurrenceor assumption, the aggregate amount of all such Indebtedness then outstandingshall exceed ten percent of the total consolidated assets of the Borrower andits Restricted Subsidiaries.

 

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 Subsidiariesor which 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 andthe Indebtedness 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 sell, transfer

 

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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 LeasebackTransaction”); provided that the foregoing restriction shall notapply to any Sale and Leaseback Transaction if immediately after theconsummation of such Sale and Leaseback Transaction and after giving effectthereto, 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 (providedthat in any such event the Borrower and its Restricted Subsidiaries shall notthen or thereafter cause or permit or agree or consent to cause or permit suchtangible assets to be subject to any Lien) or (ii) the prepayment with theapplicable prepayment premium, if any, on a prorata basis, ofSenior Funded Debt of the Borrower; provided that if any such SeniorFunded Debt so prepaid constitutes Indebtedness outstanding under any revolvingcredit or similar credit facility, such prepayment shall result in a permanentreduction of the Indebtedness which the Borrower and its RestrictedSubsidiaries may incur thereunder by an amount at least equal to the amount ofthe 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 PermittedAcquisition, the Borrower will not, and will not permit any RestrictedSubsidiary to, consolidate with or be a party to a merger with any other Person,or sell, lease or otherwise dispose of all or substantially all of its assetsor acquire the assets or stock or business of any Person, provided thatany Restricted Subsidiary may merge or consolidate with or into the Borrower orany Wholly-owned Restricted Subsidiary so long as in (1) any merger orconsolidation involving the Borrower, the Borrower shall be the surviving orcontinuing corporation and (2) any merger or consolidation involving aWholly-owned Restricted

 

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Subsidiary(and not the Borrower), the Wholly-owned Restricted Subsidiary shall be thesurviving or continuing corporation.

 

(b)           TheBorrower will not, and will not permit any Restricted Subsidiary to, sell,lease, transfer, abandon or otherwise dispose of assets (except as provided inthis Section 6.05); provided that the foregoing restrictionsdo not apply to:

 

(i)            the sale, lease, transfer or otherdisposition of assets of a Restricted Subsidiary to the Borrower or aWholly-owned Restricted Subsidiary;

 

(ii)           the sale of inventory in the ordinarycourse of business; or

 

(iii)          the sale of assets for cash or otherproperty to a Person or Persons other than an Affiliate if all of the followingconditions are met:

 

a.             suchassets (valued at net book value) do not, together with all other assets of theBorrower and its Restricted Subsidiaries previously disposed of during theimmediately preceding twelve calendar month period, exceed 10% of the totalconsolidated assets of the Borrower and its Restricted Subsidiaries, determinedby reference to the Consolidated balance of the Borrower twelve months prior tothe month in which such disposition occurs;

 

b.             inthe opinion of the Borrower’s Board of Directors, the sale is for fair valueand is in the best interests of the Borrower; and

 

c.             immediatelyafter the consummation of the transaction and after giving effect thereto, noDefault 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 after givingeffect thereto, then (i) such Unrestricted Subsidiary so designated shallnot, 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

 

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givingeffect thereto, then all existing Liens of such Restricted Subsidiary sodesignated shall be permitted within the applicable limitations of Section 6.03.

 

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 $10,000,000 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 the followingevents (“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 or anyother fee or any other amount (other than an amount referred to in clause (a) ofthis Article) payable under this Agreement or any other Financing Document,when and as the same shall become due and payable and such default shallcontinue 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, such Indebtednessto be demanded or to become due or to be repurchased, prepaid, defeased orredeemed (automatically or otherwise), or an offer to repurchase, prepay,

 

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defease or redeemsuch Indebtedness to be made, prior to its stated maturity, or cash collateralin respect thereof to be demanded;

 

(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$10,000,000 (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 execution shallnot be effectively stayed, or any action shall be legally taken by a judgmentcreditor to attach or levy upon any material assets of the Borrower or anySubsidiary 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;

 

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then, and in every such event (other than an eventwith respect to the Borrower described in clause (g) or (h) ofthis Article), and at any time thereafter during the continuance of such event,the Administrative Agent may, and at the request of the Required Lenders shall,by notice to the Borrower, take any one or more of the following actions, atthe same or different times:  (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 sodeclared to be due and payable may thereafter be declared to be due andpayable), and thereupon the principal of the Loans so declared to be due andpayable, together with accrued interest thereon and all fees and otherobligations of the Borrower accrued hereunder, shall become due and payableimmediately, without presentment, demand, protest or other notice of any kind,all of which are hereby waived by the Borrower, (iii) require that theBorrower deposit cash collateral to the extent of the LC Exposure or (iv) exerciseany other rights or remedies available under the Financing Documents orapplicable law; and in case of any event with respect to the Borrower describedin clause (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 AdministrativeAgent

 

Each of the Lenders hereby irrevocablyappoints the Administrative Agent as its agent and authorizes theAdministrative Agent to take such actions on its behalf and to exercise suchpowers as are delegated to the Administrative Agent by the terms hereof and theother Financing Documents, together with such actions and powers as arereasonably incidental thereto.

 

The bank serving as the Administrative Agenthereunder and under the other Financing Documents shall have the same rightsand powers in its capacity as a Lender as any other Lender and may exercise thesame as though it were not the Administrative Agent and such bank and itsAffiliates may accept deposits from, lend money to and generally engage in anykind of business with the Borrower or any Subsidiary or other Affiliate thereofas if it were not the Administrative Agent hereunder.

 

The Administrative Agent shall not have anyduties or obligations except those expressly set forth herein or in the otherFinancing Documents.  Without limitingthe generality of the foregoing, (a) the Administrative Agent shall not besubject to any fiduciary or other implied duties, regardless of whether aDefault has occurred and is continuing, (b) the Administrative Agent shallnot have any duty to take any discretionary action or exercise anydiscretionary powers, except discretionary rights and powers expresslycontemplated hereby or thereby that the Administrative Agent is required toexercise in writing by the Required Lenders (or such other number or percentageof the Lenders as shall be necessary under the circumstances as provided in Section 9.02),and (c) except as expressly set forth herein, the Administrative Agentshall not have any duty to disclose, and shall not be liable for any failure todisclose, any

 

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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 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 thanto confirm receipt of items expressly required to be delivered to theAdministrative Agent.

 

The Administrative Agent shall be entitled torely upon, and shall not incur any liability for relying upon, any notice,request, certificate, consent, statement, instrument, document or other writingbelieved by it to be genuine and to have been signed or sent by the properPerson.  The Administrative Agent alsomay rely upon any statement made to it orally or by telephone and believed byit to be made by the proper Person, and shall not incur any liability forrelying thereon.  The AdministrativeAgent may consult with legal counsel (who may be counsel for the Borrower),independent accountants and other experts selected by it, and shall not beliable for any action taken or not taken by it in accordance with the advice ofany such counsel, accountants or experts.

 

The Administrative Agent may perform any andall of its duties and exercise its rights and powers by or through any one ormore sub-agents appointed by the Administrative Agent.  The Administrative Agent and any suchsub-agent may perform any and all its duties and exercise its rights and powersthrough their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply toany such sub-agent and to the Related Parties of the Administrative Agent andany such sub-agent, and shall apply to their respective activities inconnection with the syndication of the credit facilities provided for herein aswell as activities as Administrative Agent.

 

In the event that a petition seeking reliefunder Title 11 of the United States Code or any other Federal, state orforeign bankruptcy, insolvency, liquidation or similar law is filed by oragainst the Borrower or any other Person obligated under the FinancingDocument, the Administrative Agent is authorized, to the fullest extent permittedby applicable law, to file a proof of claim on behalf of itself and the Lendersin such proceeding for the total amount of obligations owed by suchPerson.  With respect to any such proofof claim which the Administrative Agent may file, each Lender acknowledges thatwithout reliance on such proof of claim, such Lender shall make its ownevaluation as to whether an individual proof of claim must be filed in respectof such obligations owed to such Lender and, if so, take the steps necessary toprepare and timely file such individual claim.

 

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Subject to the appointment and acceptance ofa successor Administrative Agent as provided in this paragraph, theAdministrative Agent may resign at any time by notifying the Lenders, theIssuing Bank and the Borrower.  Upon anysuch resignation, the Required Lenders shall have the right, with the approvalof the Borrower (not to be unreasonably withheld, except that no such approvalshall be required upon the occurrence and continuance of an Event of Default),to appoint a successor.  If no successorshall have been so appointed by the Required Lenders and shall have acceptedsuch appointment within 30 days after the retiring Administrative Agentgives notice of its resignation, then the retiring Administrative Agent may, onbehalf of the Lenders, appoint a successor Administrative Agent which shall bea 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 Lender acknowledges that it has,independently and without reliance upon the Administrative Agent or any otherLender and based on such documents and information as it has deemedappropriate, made its own credit analysis and decision to enter into thisAgreement.  Each Lender also acknowledgesthat it will, independently and without reliance upon the Administrative Agentor any other Lender and based on such documents and information as it shallfrom time to time deem appropriate, continue to make its own decisions intaking or not taking action under or based upon this Agreement, any relatedagreement or any document furnished hereunder or thereunder.  Each Lender acknowledges the potentialconflict of interest of each other Lender as a result of Lenders holdingdisproportionate interests in the Loans, and expressly consents to and waivesany claim based upon such conflict of interest.

 

The parties hereto agree that the titlesCo-Syndication Agent and Documentation Agent are honorary and confer no dutiesupon such agents, except as a Lender hereunder.

 

ARTICLE IX

 

Miscellaneous

 

Section 9.01.          Notices.  (a) Except in the case of notices andother communications expressly permitted to be given by telephone (and subjectto paragraph (b) below), all notices and other communications provided forherein shall be in writing and shall be delivered by hand or overnight courierservice, mailed by certified or registered mail or sent by telecopy, asfollows:

 

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

 

(ii)           if to the Administrative Agent, toJPMorgan Chase Bank, N.A., 10 South Dearborn, 7th Floor, Chicago, Illinois 60603, Attention ofLatanya Driver (Telecopy No. 312-385-7096 with copies for informationpurposes only to Brian E. Newhouse, Esq., Mayer Brown LLP, 350 South GrandAvenue, Los Angeles, CA 90071 (Telecopy No. 213-625-0248); and

 

(iii)          if to any other Lender, to it at itsaddress (or telecopy number) set forth in its Administrative Questionnaire.

 

(b)           Noticesand other communications to the Lenders hereunder may be delivered or furnishedby electronic communications pursuant to procedures approved by theAdministrative Agent; provided that the foregoing shall not apply tonotices pursuant to Article II unless otherwise agreed by theAdministrative Agent and the applicable Lender. The Administrative Agent or the Borrower may, in its discretion, agreeto accept notices and other communications to it hereunder by electroniccommunications pursuant to procedures approved by it; provided thatapproval of such procedures may be limited to particular notices orcommunications.

 

(c)           Anyparty hereto may change its address or telecopy number for notices and othercommunications hereunder by notice to the other parties hereto.  All notices and other communications given toany party hereto in accordance with the provisions of this Agreement shall bedeemed to have been given on the date of receipt.

 

Section 9.02.          Waivers;Amendments.  (a) No failure ordelay by the Administrative Agent, or any Lender in exercising any right orpower hereunder shall operate as a waiver thereof, nor shall any single orpartial 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 any Default,regardless of whether the Administrative Agent or any Lender may have hadnotice or knowledge of such Default at the time.

 

(b)           Neitherthis Agreement nor any provision hereof nor any provision of any otherFinancing Document hereof may be waived, amended or modified except pursuant toan agreement or agreements in writing entered into by the Borrower and theRequired Lenders or by the Borrower and the Administrative Agent with theconsent of the Required Lenders; provided that no such agreement shall (i) increasethe Commitment of any Lender without the written consent of such Lender, (ii) reducethe principal amount of any Loan or Note or reduce the rate

 

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of interest thereon, or reduce any fees payablehereunder, without the written consent of each Lender directly affectedthereby, (iii) postpone the Maturity Date or the scheduled date of payment ofthe principal amount of any Loan, or any interest thereon, or any fees payablehereunder, 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 paymentsrequired thereby, without the written consent of each Lender, (v) releaseany Guarantee (other than in accordance with its terms), forego any additionalGuarantee pursuant to Section 5.11 or modify the 85% requirement inthe definition of “Guarantor” without the written consent of each Lender, (vii) changeSection 2.19 without the written consent of the Required Lenders,the Administrative Agent, the Swingline Lender and the Issuing Bank, or (viii) changeany of the provisions of this Section or the definitions of “Required Lenders”or “Defaulting Lender” or any other provision hereof specifying the number orpercentage of Lenders required to waive, amend or modify any rights hereunderor make any determination or grant any consent hereunder, without the writtenconsent of each Lender; providedfurther that no such agreementshall amend, modify or otherwise affect the rights or duties of theAdministrative Agent hereunder without the prior written consent of theAdministrative 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)           TheBorrower shall indemnify the Administrative Agent and each Lender, and eachRelated Party of any of the foregoing Persons (each such Person being called an“Indemnitee”) against, and hold each Indemnitee harmless from, any andall losses, claims, damages, liabilities and related expenses, including thefees, charges and disbursements of any counsel for any Indemnitee, incurred byor asserted against any Indemnitee arising out of, in connection with, or as aresult of (i) the execution or delivery of this Agreement or any agreementor instrument contemplated hereby, the performance by the parties hereto oftheir respective obligations hereunder or the consummation of the Transactionsor any other transactions contemplated hereby, (ii) any Loan or the use ofthe proceeds therefrom, (iii) any actual or alleged presence or release ofHazardous Materials on or from any property owned or operated by the Borroweror any of its Subsidiaries, or any Environmental Liability related in any wayto the Borrower or any of its Subsidiaries, or (iv) any actual orprospective claim, litigation, investigation or proceeding relating to any ofthe foregoing, whether based on contract, tort or any other theory andregardless of whether any Indemnitee is a party thereto; provided

 

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that such indemnity shall not, as to any Indemnitee,be available to the extent that such losses, claim, damages, liabilities orrelated expenses are determined by a court of competent jurisdiction by finaland nonappealable judgment to have resulted from the gross negligence or wilfulmisconduct of such Indemnitee.  Withoutlimiting the generality of the foregoing and in addition to any indemnityprovided for herein, the Borrower shall pay, and hold each Indemnitee harmlessfrom, any civil penalty or fine assessed by the U.S. Department of the Treasury’sOffice of Foreign Assets Control against any Indemnitee, and all reasonablecosts and expenses (including counsel fees and disbursements) incurred inconnection with the defense thereof, arising as a result of the funding ofLoans or the issuance of Lender Letters of Credit or Letter of CreditParticipation Agreement or the acceptance of any payments made under a LoanDocument.

 

(c)           Tothe extent that the Borrower fails to pay any amount required to be paid by itto the Administrative Agent under paragraph (a) or (b) of thisSection, each Lender severally agrees to pay to the Administrative Agent, suchLender’s pro rata share (determined as of the time that the applicableunreimbursed expense or indemnity payment is sought and based upon theoutstanding principal balance of the Revolving Credit Exposure) of such unpaidamount; provided that the unreimbursed expense or indemnified loss,claim, damage, liability or related expense, as the case may be, was incurredby or asserted against the Administrative Agent in its capacity as such.

 

(d)           Tothe extent permitted by applicable law, the Borrower shall not assert, andhereby waives, any claim against any Indemnitee, on any theory of liability,for special, indirect, consequential or punitive damages (as opposed to director actual damages) arising out of, in connection with, or as a result of, thisAgreement or any agreement or instrument contemplated hereby, the Transactions,any Loan or the use of the proceeds thereof.

 

(e)           Allamounts due under this Section shall be payable promptly after writtendemand therefor.

 

Section 9.04.         Successorsand Assigns.  (a) The provisionsof this Agreement shall be binding upon and inure to the benefit of the partieshereto and their respective successors and assigns permitted hereby, exceptthat (i) the Borrower may not assign or otherwise transfer any of itsrights or obligations hereunder without the prior written consent of eachLender (and any attempted assignment or transfer by the Borrower without suchconsent shall be null and void) and (ii) no Lender may assign or otherwisetransfer its rights or obligations hereunder except in accordance with thisSection.  Nothing in this Agreement,expressed or implied, shall be construed to confer upon any Person (other thanthe parties hereto, their respective successors and assigns permitted herebyand, to the extent expressly contemplated hereby, the Related Parties of eachof the Administrative Agent and the Lenders) any legal or equitable right,remedy or claim under or by reason of this Agreement.

 

(b)           (i)            Subject to the conditions set forthin paragraph (b)(ii) below, any Lender may assign to one or more assigneesall or a portion of its rights and obligations under this Agreement (includingall or a portion of its Commitment and the Loans at the time owing to it) withthe prior written consent (such consent not to be unreasonably withheld) of:

 

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(A)          the Borrower, provided that noconsent of the Borrower shall be required for an assignment to a Lender, anAffiliate of a Lender, an Approved Fund (as defined below) or, if an Event ofDefault under Article VII has occurred and is continuing, any otherassignee; and

 

(B)           the Administrative Agent.

 

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

 

(A)          except in the case of an assignment toa Lender or an Affiliate of a Lender or an assignment of the entire remainingamount of the assigning Lender’s Commitment or Loans, the amount of theCommitment or Loans of the assigning Lender subject to each such assignment(determined as of the date the Assignment and Assumption with respect to suchassignment is delivered to the Administrative Agent) shall not be less than$5,000,000 and such assigning Lender shall retain Commitments of not less than$10,000,000, unless each of the Borrower and the Administrative Agent otherwiseconsent, provided that no such consent of the Borrower shall be requiredif an Event of Default under Article VII has occurred and iscontinuing;

 

(B)           each partial assignment shall be madeas an assignment of a proportionate part of all the assigning Lender’s rightsand obligations under this Agreement;

 

(C)           the assignor and assignee to eachassignment shall execute and deliver to the Administrative Agent an Assignmentand Assumption, together with a processing and recordation fee of $3,500; and

 

(D)          the assignee, if it shall not be aLender, shall deliver to the Administrative Agent an AdministrativeQuestionnaire.

 

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

 

“Approved Fund” means any Person (other than a natural person)that is engaged in making, purchasing or investing in loans and similarextensions of credit in the ordinary course of business and that isadministered or managed by (a) a Lender, (b) an Affiliate of a Lenderor (c) an entity or an Affiliate of an entity that administers or managesa Lender.

 

(iii)          Subject to acceptance and recordingthereof pursuant to paragraph (b)(iv) of this Section, from and afterthe effective date specified in each Assignment and Assumption the assignee thereundershall be a party hereto and, to the extent of the interest assigned by suchAssignment and Assumption, have the rights and obligations of a Lender underthis Agreement, and the assigning Lender thereunder shall, to the extent of theinterest assigned by such Assignment and Assumption, be released from itsobligations under this Agreement (and, in the case of an Assignment and

 

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Assumption covering allof the assigning Lender’s rights and obligations under this Agreement, suchLender shall cease to be a party hereto but shall continue to be entitled tothe benefits of Sections 2.14, 2.15, 2.16 and 9.03).  Any assignment or transfer by a Lender ofrights or obligations under this Agreement that does not comply with this Section 9.04shall be treated for purposes of this Agreement as a sale by such Lender of aparticipation in such rights and obligations in accordance with paragraph (c) ofthis Section.

 

(iv)          The Administrative Agent, acting forthis purpose as an agent of the Borrower, shall maintain at one of its officesa copy of each Assignment and Assumption delivered to it and a register for therecordation of the names and addresses of the Lenders, and the Commitment of,and principal amount of the Loans owing to, each Lender pursuant to the termshereof 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 of a duly completedAssignment and Assumption executed by an assigning Lender and an assignee, theassignee’s completed Administrative Questionnaire (unless the assignee shall alreadybe a Lender hereunder), the processing and recordation fee referred to inparagraph (b) of this Section, any Note or Notes subject to suchassignment and any written consent to such assignment required byparagraph (b) of this Section, the Administrative Agent shall acceptsuch Assignment and Assumption and record the information contained therein inthe Register.  No assignment shall beeffective for purposes of this Agreement unless it has been recorded in theRegister 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 to the portion of the Commitmentsassumed by it pursuant to such Assignment and Assumption and, if the assigningLender has retained any Commitment hereunder, new Notes to the order of theassigning Lender in an amount equal to the Commitment retained by it hereunder.

 

(c)           (i)            Any Lender may, without the consentof the Borrower or the Administrative Agent, sell participations to one or morebanks or other entities (a “Participant”) in all or a portion of suchLender’s rights and obligations under this Agreement (including all or a portionof its Commitments and the Loans owing to it); provided that (A) suchLender’s obligations under this Agreement shall remain unchanged, (B) suchLender shall remain solely responsible to the other parties hereto for theperformance of such obligations and (C) the Borrower, the AdministrativeAgent and the other Lenders shall continue to deal solely and directly withsuch Lender in connection with such Lender’s rights and obligations under thisAgreement.  Any agreement or instrumentpursuant to which a Lender sells such a participation shall provide that suchLender shall retain the sole right to enforce this Agreement and to approve anyamendment, modification or waiver of any provision of this Agreement; provided

 

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that such agreement or instrument may provide thatsuch Lender will not, without the consent of the Participant, agree to anyamendment, modification or waiver described in the first proviso to Section 9.02(b) thataffects such Participant.  Subject toparagraph (c)(ii) of this Section, the Borrower agrees, to the fullestextent permitted under applicable law, that each Participant shall be entitledto the benefits of Sections 2.14, 2.15 and 2.16 tothe same extent as if it were a Lender and had acquired its interest byassignment pursuant to paragraph (b) of this Section.  To the extent permitted by law, eachParticipant 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)           AParticipant shall not be entitled to receive any greater payment under Section 2.14or 2.16 than the applicable Lender would have been entitled to receivewith respect to the participation sold to such Participant, unless the sale ofthe participation 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)           AnyLender may at any time pledge or assign a security interest in all or anyportion of its rights under this Agreement and the Notes issued to such Lenderto secure obligations of such Lender, including any pledge or assignment tosecure obligations to a Federal Reserve Bank, and this Section shall notapply to any such pledge or assignment of a security interest; providedthat no such pledge or assignment of a security interest shall release a Lenderfrom any of its obligations hereunder or substitute any such pledgee orassignee for such Lender 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 or anyfee 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 andremain in full force and effect regardless of the consummation of thetransactions contemplated hereby, the repayment of the Loans, the expiration ortermination of the Commitments or the termination of this Agreement or anyprovision 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

 

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understandings,oral or written, relating to the subject matter hereof.  Except as provided in Section 4.01,this Agreement 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 5-1401OF THE GENERAL 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)           TheBorrower hereby irrevocably and unconditionally submits, for itself and its property,to the nonexclusive jurisdiction of the Supreme Court of the State ofNew York sitting in New York County and of the United States DistrictCourt for the Southern District of New York, and any appellate court fromany thereof, in any action or proceeding arising out of or relating to thisAgreement, or for recognition or enforcement of any judgment, and each of theparties hereto hereby irrevocably and unconditionally agrees that all claims inrespect of any such action or proceeding may be heard and determined in suchNew York State or, to the extent permitted by law, in such Federalcourt.  Each of the parties hereto agreesthat a final judgment in any such action or proceeding shall be conclusive andmay be enforced in other jurisdictions by suit on the judgment or in any othermanner provided by law.  Nothing in thisAgreement shall affect any right that the Administrative Agent or any Lendermay otherwise have to bring any action or proceeding relating to this Agreementagainst the Borrower or its properties in the courts of any jurisdiction.

 

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(c)           TheBorrower hereby irrevocably and unconditionally waives, to the fullest extentit may legally and effectively do so, any objection which it may now orhereafter have to the laying of venue of any suit, action or proceeding arisingout of or relating to this Agreement in any court referred to in paragraph (b) ofthis Section.  Each of the parties heretohereby irrevocably waives, to the fullest extent permitted by law, the defenseof an inconvenient forum to the maintenance of such action or proceeding in anysuch court.

 

(d)           Eachparty to this Agreement irrevocably consents to service of process in themanner provided for notices in Section 9.01.  Nothing in this Agreement will affect theright of any party to this Agreement to serve process in any other mannerpermitted 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 

 

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limitation of any kind, the tax treatment andtax structure of the Transactions and all materials of any kind (includingopinions and tax analysis) that have been provided to such Persons relating tothe tax treatment and tax structure of the Transactions.  For the purposes of this Section, “Information”means all information received from the Borrower relating to the Borrower orits business, other than any such information that is available to theAdministrative Agent or any Lender on a nonconfidential basis prior todisclosure by the Borrower; provided that, in the case of informationreceived from the Borrower after the date hereof, such information is clearlyidentified at the time of delivery as confidential.  Any Person required to maintain theconfidentiality of Information as provided in this Section shall beconsidered to have complied with its obligation to do so if such Person hasexercised the same degree of care to maintain the confidentiality of suchInformation as such Person 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 record informationthat identifies the Borrower, which information includes the name and addressof the Borrower and other information that will allow such Lender to identifythe Borrower in accordance with the Act.

 

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IN WITNESS WHEREOF, the parties hereto havecaused this Agreement to be duly executed by their respective authorizedofficers as of the day and year first above written.

 
|   | CUBIC CORPORATION, Borrower |
|--------|-----------------------------|
|   |                        |   |   |
|   |                        |   |   |
|   | By:                         |   |
|   |                        | Name: | John D. Thomas |
|   |                        | Title: | Vice President Finance/ |
|   |                        |   | Corporate Development |
|   |                        |   |   |
|   |                        |   |   |
|   | By:                         |   |
|   |                        | Name: | William  W. Boyle |
|   |                        | Title: | Senior  Vice President and |
|   |                        |   | Chief Financial Officer |

 

----

 
|   | JPMORGAN CHASE BANK, N.A. individually  and as Administrative Agent and a Lender |
|--------|---------------------------------------------------------------------------------------|
|   |                                                                                  |   |
|   |                                                                                  |   |
|   | By:                                                                                   |   |
|   |                                                                                  | Name: |
|   |                                                                                  | Title: |

 

----

 
|   | BANK  OF THE WEST, as a Lender |
|--------|--------------------------------|
|   |                           |   |
|   |                           |   |
|   | By:                            |   |
|   |                           | Name: |
|   |                           | Title: |

 

----

 
|   | UNION BANK, N.A., as a Lender |
|--------|-------------------------------|
|   |                          |   |
|   |                          |   |
|   | By:                           |   |
|   |                          | Name: |
|   |                          | Title: |

 

----

 
|   | U.S.  BANK NATIONAL ASSOCIATION, |
|--------|----------------------------------|
|   | as  a Lender                     |
|   |                             |   |
|   |                             |   |
|   | By:                              |   |
|   |                             | Name: |
|   |                             | Title: |

 

----

 
|   | WELLS  FARGO BANK, NATIONAL  ASSOCIATION, as a  Lender |
|--------|-------------------------------------------------------------|
|   |                                                        |   |
|   |                                                        |   |
|   | By:                                                         |   |
|   |                                                        | Name: |
|   |                                                        | Title: |

 

----

 
|   | BRANCH BANKING AND TRUST COMPANY, as a Lender |
|--------|-----------------------------------------------|
|   |                                          |   |
|   |                                          |   |
|   | By:                                           |   |
|   |                                          | Name: |
|   |                                          | Title: |

 

----

 

SCHEDULE 1.01

 

Existing Letters of Credit

 
| **Issuer**                               | ** ** | **Issuance Date** | ** **        | **Issued  Currency** | ** ** | **Issued  Currency  Amount** | ** ** | **USD  Equivalent** | ** ** | **Amount** | ** **    | **Beneficiary Name** | ** **                 | **Expiry** | ** **   |
|------------------------------------------|------------|-------------------|-------------------|----------------------|------------|------------------------------|------------|---------------------|------------|------------|---------------|----------------------|----------------------------|------------|--------------|
| Cubic  Corporation                       |       | Jun 26, 2009      |              | USD                  |       | 442,156.50                   |       | USD                 |       | $          | 442,156.50    |                 | JPMorgan  Chase Bank, N.A. |       | Mar 09, 2010 |   |
| Cubic  Corporation                       |       | Jan 09, 2008      |              | NZD                  |       | 1,451,651.85                 |       | USD                 |       | $          | 1,036,914.92  |                 | JPMorgan Chase Bank,  N.A. |       | Mar 02, 2010 |   |
| Cubic  Corporation                       |       | Jan 09, 2008      |              | USD                  |       | 712,060.00                   |       | USD                 |       | $          | 712,060.00    |                 | Government of Israel       |       | Dec 31, 2009 |   |
| Cubic  Corporation                       |       | Mar 16, 2006      |              | SGD                  |       | 474,168.98                   |       | USD                 |       | $          | 342,558.14    |                 | JPMorgan Chase Bank,  N.A. |       | Jan 30, 2010 |   |
| Cubic  Corporation                       |       | Mar 16, 2006      |              | USD                  |       | 1,296,787.55                 |       | USD                 |       | $          | 1,296,787.55  |                 | JPMorgan Chase Bank,  N.A. |       | Jan 30, 2010 |   |
| Cubic  Corporation                       |       | Jan 09, 2008      |              | NZD                  |       | 1,277,744.65                 |       | USD                 |       | $          | 912,693.00    |                 | JPMorgan Chase Bank,  N.A. |       | Mar 02, 2010 |   |
| Cubic  Corporation                       |       | Dec 21, 2006      |              | USD                  |       | 1,298,760.00                 |       | USD                 |       | $          | 1,298,760.00  |                 | Riyad Bank Ltd.            |       | Mar 02, 2010 |   |
| Cubic  Corporation                       |       | Sep 17, 2007      |              | USD                  |       | 625,000.00                   |       | USD                 |       | $          | 625,000.00    |                 | TMB Bank PCL               |       | Mar 02, 2010 |   |
| Cubic  Corporation                       |       | May 09, 2008 |              | AUD                  |       | 94,790.64                    |       | USD                 |       | $          | 86,657.60     |                 | JPMorgan Chase Bank,  N.A. |       | Dec 30, 2010 |   |
| Cubic  Corporation                       |       | Sep 09, 2008      |              | SGD                  |       | 1,590,721.85                 |       | USD                 |       | $          | 1,149,199.43  |                 | JPMorgan Chase Bank,  N.A. |       | Mar 02, 2010 |   |
| Cubic  Corporation                       |       | Aug 15, 2008      |              | SGD                  |       | 321,357.95                   |       | USD                 |       | $          | 232,161.50    |                 | JPMorgan Chase Bank,  N.A. |       | Mar 02, 2010 |   |
| Cubic  Corporation                       |       | Jan 27, 2009      |              | AUD                  |       | 100,000.00                   |       | USD                 |       | $          | 91,420.00     |                 | JPMorgan Chase Bank,  N.A. |       | Jan 15, 2010 |   |
| Cubic  Corporation                       |       | Feb 13, 2009      |              | CAD                  |       | 3,446,715.35                 |       | USD                 |       | $          | 3,260,847.07  |                 | JPMorgan Chase Bank,  N.A. |       | Feb 12, 2011 |   |
| Cubic  Corporation                       |       | Feb 24, 2009      |              | SGD                  |       | 215,000.00                   |       | USD                 |       | $          | 155,324.38    |                 | JPMorgan Chase Bank,  N.A. |       | Mar 09, 2010 |   |
| Cubic  Corporation                       |       | Feb 24, 2009      |              | SGD                  |       | 44,000.00                    |       | USD                 |       | $          | 31,787.31     |                 | JPMorgan Chase Bank, N.A.  |       | Mar 02, 2010 |   |
| Cubic  Corporation                       |       | Mar 13, 2009      |              | USD                  |       | 14,440,626.50                |       | USD                 |       | $          | 14,440,626.50 |                 | JPMorgan Chase Bank,  N.A. |       | Mar 09, 2010 |   |
| Cubic  Corporation                       |       | Mar 13, 2009      |              | SGD                  |       | 1,372,536.25                 |       | USD                 |       | $          | 991,573.65    |                 | JPMorgan Chase Bank,  N.A. |       | Mar 09, 2010 |   |
| Cubic  Corporation                       |       | Mar 13, 2009      |              | USD                  |       | 2,888,125.30                 |       | USD                 |       | $          | 2,888,125.30  |                 | JPMorgan Chase Bank,  N.A. |       | Mar 09, 2010 |   |
| Cubic  Corporation                       |       | Mar 13, 2009      |              | SGD                  |       | 6,862,681.25                 |       | USD                 |       | $          | 4,957,868.26  |                 | JPMorgan Chase Bank,  N.A. |       | Mar 09, 2010 |   |
| Cubic  Corporation                       |       | Jun 17, 2009      |              | USD                  |       | 7,500,000.00                 |       | USD                 |       | $          | 7,500,000.00  |                 | JPMorgan Chase Bank,  N.A. |       | Mar 09, 2010 |   |
| Total USD as of  December 15, 2009: |       | **$**             | **42,452,521.11** |                 |       |                         |       |                |

 

----

 

SCHEDULE 2.01

 

Commitments

 
| **Lender**                             | ** ** | **Revolving Credit   Commitment** | ** ** | **Approximate Percentage of Total  Revolving Credit Commitment** | ** ** |
|----------------------------------------|------------|-----------------------------------|------------|------------------------------------------------------------------|------------|
| JPMorgan Chase Bank, N.A.              |       | $                                 | 27,500,000 |                                                             | 18.33333   | % |
| Bank of the West                       |       | $                                 | 24,500,000 |                                                             | 16.33333   | % |
| Union Bank, N.A.                       |       | $                                 | 24,500,000 |                                                             | 16.33333   | % |
| U.S. Bank National Association         |       | $                                 | 24,500,000 |                                                             | 16.33333   | % |
| Wells Fargo Bank, National Association |       | $                                 | 24,500,000 |                                                             | 16.33333   | % |
| Branch Banking and Trust Company       |       | $                                 | 24,500,000 |                                                             | 16.33333   | % |

 

----

 

SCHEDULE3.05

 

Disclosed Matters as to Litigation

 

Thereis no action, 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.

 

TheBorrower does not believe the following litigation matters could be reasonablyexpected, individually or in the aggregate, to result in a Material AdverseEffect, but wants the Lenders to be advised of the existence of such matters.

 

1.               U.S. Customs v. CubicDefense Systems.  Customsassessed a proposed penalty of $449,427 against Cubic for importing certainMILES equipment as duty free or at a duty lower than allegedly applicable.  Cubic reserved about $400,000 and plans toappeal the amount of the penalty.

 

2.               Ministry of Defense andSupport for the Armed Forces of the Islamic Republic (Iran) v. Cubic DefenseSystems, Inc. (CDS).  In1998 the Ministry of Defense for the Armed Forces of the Islamic Republic ofIran obtained a United States District Court judgment enforcing an arbitrationaward in its favor against Cubic in the amount of $2.8 million, plus costs andinterest.  Both parties appealed to the 9th Circuit Court of Appeals, where the cases arestayed.  Third party judgment creditorsof Iran have filed liens against Iran’s Cubic judgment, but have not obtainedvalid court orders enforcing the liens. We are not aware whether any such creditors received Terrorism RiskInsurance Act funds (which could make their claims unenforceable).  Under a 1979 Presidential executive order,all transactions by United States citizens with Iran are prohibited without alicense, which is rarely granted. Therefore, even if Iran were to prevail in the 9th Circuit litigation, it is unlikely that Cubicwould be permitted to pay any amount to Iran. Payments to valid lienors could potentially be enforced.  Cubic has appropriate reserves in place.

 

3.               Global Trac / eAccess.  Global Trac has presented a claim againstCubic’s subsidiary eAccess for alleged patent infringement in the way asmartcard antenna is attached to a chip. eAccess is investigating.

 

4.                                                                           Thyssen / USElevator.  Thyssen hasseven claims pending against Cubic involving personal injuries sustained inelevators manufactured by Cubic’s subsidiary before 1992.  Cubic’s maximum liability on each claimshould be its $100,000 insurance deductible. Cubic denies liability as to all claims.

 

5.               Wise and Diaz v. CAI, CDAand Cubic Corporation.  Class actionlawsuit against Cubic alleging misclassification of Training Analysts as exemptfrom overtime and seeking damages for lack of overtime pay and back wages, aswell as damages for various violations of California and federal wage and hourlaws.  Cubic filed an Answer on January 6,2009.  Cubic sent a Demand for indemnityto its prime contractor, Raytheon.  Cubicalso made a Demand on its insurance carrier for 

 

----

 

coverage on some or all of the claims.  Mediation was conducted on August 27,2009 and the matter was settled for $1.7 million.  Cubic’s insurance carrier agreed tocontribute $300,000 toward the settlement. Cubic’s prime contractor has yet to respond.  Preparation of a settlement agreement andrelated documents are in process. Preliminary court approval of the settlement is expected sometime after November 20,2009.  Appropriate reserves have beenestablished.

 

2

----

 

SCHEDULE 3.08

 

Disclosed Matters as to Environmental Compliance

 

None

 

----

 

SCHEDULE 3.16A

 

Restricted Subsidiaries

 
| **Subsidiary**                                                                                                                                 | ** ** | **Place of  Incorporation** | ** ** | **Percentage  Owed** | ** ** |
|------------------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------------|------------|----------------------|------------|
| **CUBIC APPLICATIONS, INC.**                                                                                                                   |       |                        |       |                 |       |
| Lacey, Washington                                                                                                                              |       | California                  |       | 100                  | %          |
| ** **                                                                                                                                     |       |                        |       |                 |       |
| **CUBIC COMMUNICATIONS,  INC.**                                                                                                                |       |                        |       |                 |       |
| San Diego, California                                                                                                                          |       | California                  |       | 100                  | %          |
|                                                                                                                                           |       |                        |       |                 |       |
| **CUBIC DE MEXICO**                                                                                                                            |       |                        |       |                 |       |
| Tijuana, Mexico                                                                                                                                |       | Mexico                      |       | 100                  | %          |
| ** **                                                                                                                                     |       |                        |       |                 |       |
| **CUBIC DEFENSE  APPLICATIONS, INC.**                                                                                                          |       |                        |       |                 |       |
| San Diego, California                                                                                                                          |       | California                  |       | 100                  | %          |
|                                                                                                                                           |       |                        |       |                 |       |
| **CUBIC FOREIGN SALES,  INC.**                                                                                                                 |       | St. Thomas                  |       |                 |       |
| San Diego, California                                                                                                                          |       | U.S.  Virgin Islands        |       | 100                  | %          |
| ** **                                                                                                                                     |       |                        |       |                 |       |
| **CUBIC HOLDINGS LTD.**                                                                                                                        |       |                        |       |                 |       |
| Auckland, New Zealand                                                                                                                          |       | New  Zealand                |       | 100                  | %          |
|                                                                                                                                           |       |                        |       |                 |       |
| **CUBIC LAND, INC.**                                                                                                                           |       |                        |       |                 |       |
| San Diego, California                                                                                                                          |       | California                  |       | 100                  | %          |
| ** **                                                                                                                                     |       |                        |       |                 |       |
| **CUBIC SECURITY  SYSTEMS, INC.**                                                                                                         |       |                        |       |                 |       |
| San Diego, California                                                                                                                          |       | California                  |       | 100                  | %          |
|                                                                                                                                           |       |                        |       |                 |       |
| **CUBIC SIMULATION  SYSTEMS, INC.**                                                                                                       |       |                        |       |                 |       |
| Orlando, Florida                                                                                                                               |       | Delaware                    |       | 100                  | %          |
| ** **                                                                                                                                     |       |                        |       |                 |       |
| **CUBIC TRANSPORTATION  SYSTEMS, INC.**                                                                                                   |       |                        |       |                 |       |
| San Diego, California                                                                                                                          |       | California                  |       | 100                  | %          |
|                                                                                                                                           |       |                        |       |                 |       |
| **OMEGA TRAINING GROUP,  INC.**                                                                                                                |       |                        |       |                 |       |
| Columbus, Georgia                                                                                                                              |       | Georgia                     |       | 100                  | %          |
| ** **                                                                                                                                     |       |                        |       |                 |       |
| **EACCESS LLC**                                                                                                                                |       |                        |       |                 |       |
| San Diego, California                                                                                                                          |       | Delaware                    |       | 100                  | %          |
|                                                                                                                                           |       |                        |       |                 |       |
| **CUBIC FIELD SERVICES  CANADA LIMITED**                                                                                                       |       |                        |       |                 |       |
| Ontario, Canada                                                                                                                                |       | Canada                      |       | 100                  | %          |
| ** **                                                                                                                                     |       |                        |       |                 |       |
| **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  * (50% owned subsidiary of Cubic Corporation and 50% owned subsidiary of  Cubic Transportation Systems, Inc.) |       | Australia                   |       | 100                  | %*         |
| ** **                                                                                                                                     |       |                        |       |                 |       |
| **CUBIC (U.K.) LIMITED**                                                                                                                       |       |                        |       |                 |       |
| London, England                                                                                                                                |       | England                     |       | 100                  | %          |
|                                                                                                                                           |       |                        |       |                 |       |
| **CUBIC WORLDWIDE  TECHNICAL SERVICES, INC.**                                                                                                  |       |                        |       |                 |       |
| San Diego, California                                                                                                                          |       | Delaware                    |       | 100                  | %          |

 

----

 
| **CUBIC DEFENCE NEW  ZEALAND**                                           |   |         |   |   |   |
|--------------------------------------------------------------------------|--------|--------------|--------|--------|--------|
| Auckland, New Zealand   *(100% owned subsidiary of Cubic Holdings, Ltd.) |   | New  Zealand |   | 100    | %*     |
|                                                                     |   |         |   |   |   |
| **CUBIC DEFENCE AUSTRALIA  PTY LIMITED**                                 |   |         |   |   |   |
| New South Wales, Australia                                               |   | Australia    |   | 100    | %      |
| ** **                                                               |   |         |   |   |   |
| **CUBIC TRANSPORTATION  SYSTEMS (INDIA) PRIVATE LIMITED**                |   |         |   |   |   |
| Hyderabad, India                                                         |   | India        |   | 100    | %      |

 

2

----

 

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 Transportation  Systems, LTD                                                       |
|                 |   |                                                                                     |
| Creditor/Lienholder: |   | Barclays Bank PLC                                                                        |
|                 |   |                                                                                     |
| Original Balance:    |   | £ 5,200,000                                                                         |
|                 |   |                                                                                     |
| Remaining Balance:   |   | £ 3,120,000                                                                         |
|                 |   |                                                                                     |
| 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:        |   | £ 138,492.33 due 02  March 2010                                                |

 

----

 

EXHIBIT A

 

FORM OF ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption (the “Assignmentand Assumption”) is dated as of the Effective Date set forth below and isentered 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 agreed consideration, the Assignorhereby irrevocably sells and assigns to the Assignee, and the Assignee herebyirrevocably purchases and assumes from the Assignor, subject to and inaccordance with the Standard Terms and Conditions and the Credit Agreement, asof the Effective Date inserted by the Administrative Agent as contemplatedbelow (i) all of the Assignor’s rights and obligations in its capacity asa Lender under the Credit Agreement and any other documents or instrumentsdelivered pursuant thereto to the extent related to the amount and percentageinterest identified below of all of such outstanding rights and obligations ofthe Assignor under the respective facilities identified below (including anyguarantees included in such facilities) and (ii) to the extent permittedto be assigned under applicable law, all claims, suits, causes of action andany other right of the Assignor (in its capacity as a Lender) against anyPerson, whether known or unknown, arising under or in connection with theCredit Agreement, any other documents or instruments delivered pursuant theretoor the loan transactions governed thereby or in any way based on or related toany of the foregoing, including contract claims, tort claims, malpracticeclaims, statutory claims and all other claims at law or in equity related tothe rights and obligations sold and assigned pursuant to clause (i) above(the rights and obligations sold and assigned pursuant to clauses (i) and(ii) above being referred to herein collectively as the “AssignedInterest”).  Such sale and assignmentis without recourse to the Assignor and, except as expressly provided in thisAssignment and Assumption, without representation or warranty by the Assignor.

 
| Assignor: |   |   |
|-----------|--------|--------|

 

 
| Assignee: |   |   |
|-----------|--------|--------|

[and is an Affiliate/Approved Fund of [*identify Lender*](1)]

 

 

Borrower:  Cubic Corporation

 

----

(1)               Select as applicable.

 

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

 

Credit Agreement: The First Amended and Restated Credit Agreement dated as of December 16,2009 among Cubic Corporation, the Lenders parties thereto, and JPMorgan ChaseBank, as Administrative Agent.

 

A-1

----

 

Assigned Interest

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

 

Effective Date:                                   ,20  [TO BE INSERTED BY ADMINISTRATIVE AGENT ANDWHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTERTHEREFOR.]

 

The terms set forth in this Assignment andAssumption are hereby agreed to:

 

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

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

 

A-2

----

 

ANNEX1

 

CUBICCORPORATION CREDIT AGREEMENT

 

STANDARDTERMS AND CONDITIONS FORASSIGNMENT AND ASSUMPTION

 

1.             Representationsand Warranties.

 

(a)           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.

 

(b)           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 toconsummate the transactions contemplated hereby and to become a Lender underthe Credit Agreement, (ii) it satisfies the requirements, if any,specified in the Credit Agreement that are required to be satisfied by it inorder to acquire the Assigned Interest and become a Lender, (iii) from andafter the Effective Date, it shall be bound by the provisions of the CreditAgreement as a Lender thereunder and, to the extent of the Assigned Interest,shall have the obligations of a Lender thereunder, (iv) it has received acopy of the Credit Agreement, together with copies of the most recent financialstatements delivered pursuant to Section 5.01 thereof, as applicable, andsuch other documents and information as it has deemed appropriate to make itsown credit analysis and decision to enter into this Assignment and Assumptionand to purchase the Assigned Interest on the basis of which it has made suchanalysis and decision independently and without reliance on the AdministrativeAgent or any other Lender, and (v) if it is a Foreign Lender, attached tothe Assignment and Assumption is any documentation required to be delivered byit pursuant to the terms of the Credit Agreement, duly completed and executedby the 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.

 

(c)           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 other amounts) tothe Assignor for amounts which have accrued to but excluding the 

 

----

 

Effective Date and to theAssignee for amounts which have accrued from and after the Effective Date.

 

(d)           GeneralProvisions.  This Assignment andAssumption shall be binding upon, and inure to the benefit of, the partieshereto and their respective successors and assigns.  This Assignment and Assumption may beexecuted in any number of counterparts, which together shall constitute oneinstrument.  Delivery of an executedcounterpart of a signature page of this Assignment and Assumption bytelecopy shall be effective as delivery of a manually executed counterpart ofthis Assignment and Assumption.  ThisAssignment and Assumption shall be governed by, and construed in accordancewith, the internal law of the State of New York.

 

----

 

EXHIBITC

 

FORM OF PROMISSORY NOTE

 

New York,New York

December 16,2009

 

FOR VALUE RECEIVED, the undersigned, CubicCorporation (the “Maker”), hereby promises 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 theAvailability Period as defined in the First Amended and Restated CreditAgreement, dated as of December 16, 2009, among the Maker, the Lendersnamed therein and the Agent (as the same may be amended, modified orsupplemented from time to time in accordance with its terms, the “CreditAgreement”) or earlier as provided for in the Credit Agreement, the aggregateunpaid principal amount of all Revolving Loans (as defined in the CreditAgreement) to the Maker from the Lender pursuant to the terms of the CreditAgreement, in lawful money of the United States of America in immediatelyavailable funds, and to pay interest from the date thereof on the principalamount hereof from time to time outstanding, in like funds, at said office, ata rate or rates per annum and, in each case, and payable on such dates asdetermined pursuant to the terms of the Credit Agreement.

 

The Maker promises to pay interest, ondemand, on any overdue principal and fees and, to the extent permitted by law,overdue interest from their due dates at a rate or rates determined as setforth in the Credit Agreement.

 

The Maker hereby waives diligence,presentment, demand, protest and notice of any kind whatsoever.  The non-exercise by the holder of any of itsrights hereunder in any particular instance shall not constitute a waiverthereof in that or any subsequent instance.

 

All borrowings evidenced by this PromissoryNote and all payments and prepayments of the principal hereof and interesthereon and the respective dates thereof shall be endorsed by the holder hereofon the schedule attached hereto and made a part hereof, or on a continuation thereofwhich shall be attached hereto and made a part hereof, or otherwise recorded bysuch holder in its internal records; provided, however, that thefailure of the holder hereof to make such a notation or any error in such anotation shall not in any manner affect the obligation of the Makers to makepayments of principal and interest in accordance with the terms of thisPromissory Note and the Credit Agreement.

 

This Promissory Note is one of the Notesreferred to in the Credit Agreement, which, among other things, containsprovisions for the acceleration of the maturity hereof upon the happening ofcertain events, for optional and mandatory prepayment of the principal hereofprior to the maturity hereof and for the amendment or waiver of certain provisionsof the Credit Agreement, all upon the terms and conditions thereinspecified.  **THISPROMISSORY NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWSOF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICTS OF LAWS PRINCIPLESTHEREOF THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHERJURISDICTION AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.**

 

C-1

----

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

 

C-2

----

 

Loans and Payment

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

 

----

 

EXHIBIT D

 

AMENDED AND RESTATED SUBSIDIARY GUARANTEE

 

AMENDED AND RESTATED GUARANTEE dated as of December 16,2009, by each of the signatories hereto (individually, a “Guarantor” andcollectively, the “Guarantors”), in favor of JPMorgan Chase Bank, N.A.,a national banking association, as administrative agent (“Agent”) for (i) theLenders (the “Lenders”) named in Schedule 2.01 of the First Amended andRestated Credit Agreement dated as of the date hereof, among Cubic Corporation(the “Borrower”), the Agent and the Lenders (as amended, restated, modifiedor supplemented from time to time in accordance with its terms, the “CreditAgreement”; capitalized terms used herein and not otherwise defined hereinshall have the meanings attributed thereto in the Credit Agreement) and (ii) itselfas issuer of the Letters of Credit.

 

The Agent and the Lenders have agreed toextend Loans and certain other financial accommodations to, including, withoutlimitation, the issuance of the Letters of Credit for the account of theBorrower pursuant to, and subject to the terms and conditions of, the CreditAgreement.  The obligation of the Lendersto extend such Loans and of the Agent to issue the Letters of Credit under theCredit Agreement is conditioned on the execution and delivery by the Guarantorsof a guarantee in the form hereof of the due and punctual payment andperformance of (a) the principal of and interest on the Loans, when and asdue, whether at maturity, by acceleration, upon one or more dates set forprepayment or otherwise, (b) Indebtedness at any time and from time totime under the Letters of Credit and (c) all other obligations of theBorrower at any time and from time to time under the Credit Agreement and theother Financing Documents (the foregoing collectively being herein referred toas the “Guaranteed Obligations”).

 

The Guarantors are parties to that certainGuarantee dated as of March 10, 2005 (the “Existing Guarantee”)pursuant to which they guaranteed the obligations of the Borrower under thecredit agreement dated as of March 10, 2005 (the “Existing CreditAgreement”).  The Existing CreditAgreement is being amended and restated pursuant to the terms of the CreditAgreement and, in connection therewith, the Guarantors have agreed to amend andrestate the Existing Guarantee.

 

Accordingly, in consideration of the premisesand in order to induce the Agent and the Lenders to make Loans and extend otherfinancial accommodations under the Credit Agreement, each Guarantor hereby,jointly and severally, agrees that the Existing Guarantee shall be amended andrestated in its entirety as follows:

 

Section 1.  Guarantee.  Each Guarantor hereby, jointly and severally,irrevocably and unconditionally, guarantees the punctual payment when due,whether at stated maturity, by acceleration or otherwise, and the punctualperformance, of all present and future Guaranteed Obligations.  Each Guarantor also guarantees the full,prompt and unconditional performance of all obligations and agreements of everykind owed or hereafter to be owed by Borrower to the Agent or the Lenders underthe Credit Agreement and the other Financing Documents to which Borrower is aparty.

 

----

 

Section 2.  Waiver.  Each Guarantor hereby absolutely,unconditionally and irrevocably waives, to-the fullest extent permitted by law,(i) promptness, diligence, notice of acceptance and any other notice withrespect to this Guarantee, (ii) presentment, demand of payment, protest,notice of dishonor or nonpayment and any other notice with respect to theGuaranteed Obligations, (iii) any requirement that the Agent or theLenders protect, secure, perfect or insure any security interest or Lien on anyproperty subject thereto or exhaust any right or take any action against theBorrowers or any other Person or any collateral, and (iv) any otheraction, event or precondition to the enforcement of this Guarantee or theperformance by each Guarantor of its obligations hereunder.

 

Section 3.  Guarantee Absolute.

 

(a)           ThisGuarantee is one of payment and performance, not collection, and theobligations of the Guarantors under this Guarantee are independent of theobligations of the Borrower under the Credit Agreement and any other FinancingDocument, and a separate action or actions may be brought and prosecutedagainst each Guarantor to enforce this Guarantee, irrespective of whether anyaction is brought against the Borrower or whether the Borrower is joined in anysuch action or actions.

 

(b)           Theliability of the Guarantors under this Guarantee shall, to the fullest extentpermitted under applicable law, be absolute and unconditional irrespective of:

 

(i)            any invalidity,irregularity, voidability, voidness or unenforceability of the CreditAgreement, the Notes, or any other Financing Document or any other agreement orinstrument relating thereto, or of all or any part of the GuaranteedObligations or of any security therefor;

 

(ii)           any change in themanner, place or terms of payment or performance, and/or any change orextension of the time of payment or performance of, renewal or alteration of,any Guaranteed Obligation, any security therefor, or any liability incurreddirectly or indirectly in respect thereof, or any other amendment or waiver ofor any consent to departure from the Credit Agreement or the Notes or any otherFinancing Document, including any increase in the Guaranteed Obligationsresulting from the extension of additional credit to the Borrower or any of itsSubsidiaries or otherwise;

 

(iii)          any sale, exchange,release, surrender, realization upon any property by whomsoever at any timepledged or mortgaged to secure, or howsoever securing, all or any of theGuaranteed Obligations, and/or any offset against, or failure to perfect, orcontinue the perfection of, any Lien in any such property, or delay in theperfection of any such Lien, or any amendment or waiver of or consent todeparture from any other guaranty for all or any of the Guaranteed Obligations;

 

(iv)          any exercise orfailure to exercise any rights against the Borrower or others (including theGuarantors);

 

(v)           any settlement orcompromise of any Guaranteed Obligation, any security therefor or any liability(including any of those hereunder) incurred directly or indirectly in respectthereof or hereof, and any subordination of the payment of all or any part 

 

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thereof to the payment of any GuaranteedObligation (whether due or not) of the Borrower to creditors of the Borrowerother than the Guarantors;

 

(vi)          any manner ofapplication of collateral, or proceeds thereof, to all or any of the GuaranteedObligations, or any manner of sale or other disposition of any collateral forall or any of the Guaranteed Obligations or any other assets of the Borrower orany of its Subsidiaries;

 

(vii)         any change,restructuring or termination of the existence of any of the Borrower or any ofits Subsidiaries; or

 

(viii)        any other agreementsor circumstance of any nature whatsoever which might otherwise constitute adefense available to, or a discharge of, this Guarantee and/or obligations ofthe Guarantors hereunder, or a defense to, or discharge of, the Borrower or anyother Person or party relating to this Guarantee or the obligations of theGuarantors hereunder or otherwise with respect to the Loans or Letters ofCredit extended to the Borrower, in each case other than the indefeasiblepayment in full of the Guaranteed Obligations.

 

(c)           TheAgent may at any time and from time to time (whether or not after revocation ortermination of this Guarantee) without the consent of, or notice (except asshall be required by applicable law that cannot be waived) to, the Guarantors,and without incurring responsibility to the Guarantors or impairing orreleasing the obligations of the Guarantors hereunder, apply any sums bywhomsoever paid or howsoever realized to any Guaranteed Obligation regardlessof what Guaranteed Obligations remain unpaid.

 

(d)           ThisGuarantee shall continue to be effective or be reinstated, as the case may be,if claim is ever made upon the Agent or any Lender for repayment or recovery ofany amount or amounts received by the Agent or such Lender in payment or onaccount of any of the Guaranteed Obligations and the Agent or such Lenderrepays all or part of said amount by reason of any judgment, decree or order ofany court or administrative body having jurisdiction over the Agent or suchLender or the respective property of each, or any settlement or compromise ofany such claim effected by the Agent or such Lender with any such claimant(including the Borrower), the Guarantors shall be and remain liable to theAgent or such Lender, as applicable, hereunder for the amount so repaid orrecovered to the same extent as if such amount had never originally beenreceived by the Agent or such Lender.

 

Section 4.  Continuing Guarantee.  This Guarantee is a continuing one and shall (i) remainin full force and effect until the indefeasible payment and satisfaction infull of the Guaranteed Obligations, (ii) be binding upon each Guarantor,its successors and assigns, and (iii) inure to the benefit of, and be enforceableby, the Agent and its successors, transferees and assigns.  All obligations to which this Guaranteeapplies or may apply under the terms hereof shall be conclusively presumed tohave been created in reliance hereon.

 

Section 5.  Representations, Warranties and Covenants.  Each Guarantor hereby represents, warrantsand covenants to and with the Agent that:

 

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(a)           TheGuarantor has the power to execute and deliver this Guarantee and to incur andperform its obligations hereunder;

 

(b)           TheGuarantor has duly taken all necessary action to authorize the execution,delivery and performance of this Guarantee and to incur and perform itsobligations hereunder;

 

(c)           Noconsent, approval, authorization or other action by, and no notice to or of, ordeclaration or filing with, any governmental or other public body, or any otherPerson, is required for the due authorization, execution, delivery andperformance by the Guarantor of this Guarantee or the consummation of thetransactions contemplated hereby;

 

(d)           Theexecution, delivery and performance by the Guarantor of this Guarantee, do notand will not violate or otherwise conflict with any term or provision of anymaterial agreement, instrument, judgment, decree, order or any statute, rule orgovernmental regulation applicable to the Guarantor or result in the creationof any Lien upon any of its properties or assets pursuant thereto;

 

(e)           ThisGuarantee has been duly authorized, executed and delivered by the Guarantor andconstitutes the legal, valid and binding obligation of the Guarantor, and isenforceable against the Guarantor in accordance with its terms, subject toapplicable bankruptcy, insolvency, reorganization, moratorium or similar lawaffecting creditors’ rights generally and general principles of equity(regardless of whether such enforcement is sought in a proceeding in equity orat law);

 

(f)            Noproceeding referred to in paragraph (g) or (h) of Article VII ofthe Credit Agreement is pending against the Guarantor and no other eventreferred to in such paragraphs (g) and (h) of such Article VIIhas occurred and is continuing with respect to the Guarantor, and the propertyof the Guarantor is not subject to any assignment for the benefit of creditors;and

 

(g)           EachGuarantor will take all necessary actions to comply with the provisions of theCredit Agreement applicable to it.

 

Section 6.  Expenses.  The Guarantors will upon demand reimburse theAgent for any sums, costs, and expenses which the Agent may pay or incurpursuant to the provisions of this Guarantee or in negotiating, executing,perfecting, defending, protecting or enforcing this Guarantee or in enforcingpayment of the Guaranteed Obligations or otherwise in connection with theprovisions hereof, including court costs, collection charges, travel expenses,and reasonable attorneys’ fees, together with interest thereon as specified in Section 12hereof.

 

Section 7.  Terms. (a) The words “include,” “includes” and “including” shall be deemedto be followed by the phrase “without limitation”.

 

(b)           Allreferences herein to Sections and subsections shall be deemed to be referencesto Sections and subsections of this Guarantee unless the context shallotherwise require.

 

Section 8.  Amendments and Modification.  No provision hereof shall be modified,altered or limited except by written instrument expressly referring to thisGuarantee and to such provision, and executed by the party to be charged.

 

4

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Section 9.  Subrogation.  Upon making full payment with respect to anyGuaranteed Obligation hereunder, the Guarantors shall be subrogated to therights of the payee against the Borrower with respect to such obligation;provided that the Guarantors shall not enforce any payment by way ofsubrogation so long as any Lender has any Commitment under the CreditAgreement, any Letter of Credit shall remain outstanding or any GuaranteedObligation remains unpaid.

 

Section 10.  Remedies Upon Default; Right of Set-Off.  (a)  Upon the occurrence and during thecontinuance of any Event of Default, the Agent may, without notice to or demandupon the Borrower or the Guarantors, declare any Guaranteed Obligationsimmediately due and payable, and shall be entitled to enforce the obligationsof the Guarantor hereunder.

 

(b)           Uponsuch declaration by the Agent, the Agent and any Lender is hereby authorized atany time and from time to time, to the fullest extent permitted by law, to setoff and apply any and all deposits (general or special, time or demand,provisional or final) at any time held and other indebtedness at any time owingby the Agent or any Lender to or for the credit or the account of any Guarantoragainst any and all of the obligations of such Guarantor now or hereafterexisting under this Guarantee that are then due, whether or not the Agent orsuch Lender shall have made any demand under this Guarantee.  The Agent agrees promptly to notify suchGuarantor after any such set-off and application, provided that the failure togive such notice shall not affect the validity of such set-off andapplication.  The rights of the Agent andLenders under this Section 10 are in addition to other rights and remedies(including other rights of set-off) which the Agent and Lenders may have.

 

Section 11.  Statute of Limitations.  Any acknowledgment or new promise, whether bypayment of principal or interest or otherwise and whether by the Borrower orothers (including any Guarantor), with respect to any of the GuaranteedObligations shall, to the fullest extent permitted under applicable law, if thestatute of limitations in favor of the Guarantors against the Agent or Lendersshall have commenced to run, toll the running of such statute of limitationsand, if the period of such statute of limitations shall have expired, preventthe operation of such statute of limitations.

 

Section 12.  Interest.  All amounts payable from time to time by theGuarantors hereunder shall bear interest at an interest rate per annumdetermined in accordance with Section 2.12 of the Credit Agreement as ifsuch amounts were payable by the Borrower.

 

Section 13.  Rights and Remedies Not Waived.  No act, omission or delay by the Agent shallconstitute a waiver of its rights and remedies hereunder or otherwise.  No single or partial waiver by the Agent ofany default hereunder or right or remedy which it may have shall operate as awaiver of any other default, right or remedy or of the same default, right orremedy on a future occasion.

 

Section 14.  Admissibility of Guarantee.  The Guarantors agree that any copy of thisGuarantee signed by the Guarantors and transmitted by telecopier for deliveryto the Agent shall be admissible in evidence as the original itself in anyjudicial or administrative proceeding, whether or not the original is inexistence.

 

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Section 15.  Notices.  All notices, requests and demands to or uponthe Agent or the Guarantors under this Agreement shall be in writing and givenas provided in the Credit Agreement (with respect to the Guarantors, to theaddress of the Borrower as set forth in the Credit Agreement).

 

Section 16.  Counterparts.  This Guarantee may be executed in any numberof counterparts and by the different parties hereto on separate counterparts,each of which when so executed and delivered shall be an original and all ofwhich shall together constitute one and the same agreement.  Delivery of an executed counterpart of asignature page of this Guarantee by telecopy shall be effective asdelivery of a manually executed counterpart of this Guarantee.

 

**Section 17.  CONSENT TO JURISDICTION; WAIVER OF JURYTRIAL ETC.  (a) EACH GUARANTORHEREBY SUBMITS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY ANDUNCONDITIONALLY, TO THE NONEXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THESTATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERNDISTRICT OF NEW YORK, AND ANY APPELLATE COURT THEREFROM IN ANY ACTION ORPROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.  EACH GUARANTOR HEREBY IRREVOCABLY WAIVES, INCONNECTION WITH ANY SUCH ACTION OR PROCEEDING, (i) TRIAL BY JURY, (ii) TOTHE EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION,INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUMNON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANYSUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND (iii) THERIGHT TO INTERPOSE ANY SET-OFF, COUNTERCLAIM OR CROSS-CLAIM (UNLESS SUCHSET-OFF, COUNTERCLAIM OR CROSS-CLAIM COULD NOT, BY REASON OF ANY APPLICABLEFEDERAL OR STATE PROCEDURAL LAWS, BE INTERPOSED, PLEADED OR ALLEGED IN ANYOTHER ACTION).**

 

(b)           EachGuarantor irrevocably consents to the service of process of any of theaforementioned courts in any such action or proceeding by the mailing of copiesthereof by certified mail, postage prepaid, to such Guarantor at its addressdetermined pursuant to Section 15 hereof.

 

(c)           Nothingherein shall affect the right of the Agent to serve process in any other mannerpermitted by law or to commence legal proceedings or otherwise proceed againstany Guarantor in any other jurisdiction.

 

(d)           EachGuarantor hereby waives presentment, notice of dishonor and protests of allinstruments included in or evidencing any of the Guaranteed Obligations, andany and all other notices and demands whatsoever (except as expressly providedherein).

 

**Section 18.  GOVERNING LAW.  THIS GUARANTEE SHALL BE CONSTRUCTED INACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUTREGARD TO ANY CONFLICTS OF LAWS**

 

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**PRINCIPLES THEREOF THATWOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.**

 

Section 19.  Captions; Separability.  (a) The captions of the Sections andsubsections of this Guarantee have been inserted for convenience only and shallnot in any way affect the meaning or construction of any provision of thisGuarantee.

 

(b)           Ifany term of this Guarantee shall be held to be invalid, illegal orunenforceable, the validity of all other terms hereof shall in no way beaffected thereby.

 

Section 20.  Enforcement.  If, in any action to enforce this Guaranteeor any proceeding to allow or adjudicate a claim under this Guarantee, a courtof competent jurisdiction determined that enforcement of this Guarantee againstany Guarantor for the full amount of the Guaranteed Obligations is not lawfulunder, or would be subject to avoidance under, Section 548 of the UnitedStates Bankruptcy Code or any applicable provision of comparable state law, theliability of such Guarantor under this Guarantee shall be limited to themaximum amount lawful and not subject to avoidance under such law.

 

Section 21.  Contribution.  Each Guarantor agrees that in the event apayment shall be made by any Guarantor (the “Claiming Guarantor”) underthis Guarantee or assets of such Claiming Guarantor shall be sold pursuant toany mortgage, security agreement or similar instrument or agreement to satisfya claim of the Lenders or the Agent, each other Guarantor (a “ContributingGuarantor”) shall indemnify the Claiming Guarantor in an amount equal tothe amount of such payment or the greater of the book value or the fair marketvalue of such assets, as the case may be, multiplied by a fraction of which thenumerator shall be the net worth of the Contributing Guarantor on the date hereofand the denominator shall be the aggregate net worth of all Guarantors on thedate hereof.

 

Section 22.  Acknowledgment of Receipt.  Each Guarantor acknowledges receipt of a copyof this Guarantee and each of the Financing Documents.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, each Guarantor has dulyexecuted or caused this Guarantee to be duly executed in the State of New Yorkas of the date first above set forth.

 
|   | CUBIC  TRANSPORTATION SYSTEMS, INC., a California corporation |
|--------|---------------------------------------------------------------|
|   |                                                          |
|   |                                                          |   |
|   | By:                                                           |   |
|   | Name:  William L. Hoese                                       |
|   | Title:  Secretary                                             |
|   |                                                          |   |
|   |                                                          |   |
|   | CUBIC  APPLICATIONS, INC., a California corporation           |
|   |                                                          |   |
|   |                                                          |   |
|   | By:                                                           |   |
|   | Name:  William L. Hoese                                       |
|   | Title:  Secretary                                             |
|   |                                                          |
|   |                                                          |   |
|   | CUBIC  DEFENSE APPLICATIONS, INC., a California corporation   |
|   |                                                          |   |
|   |                                                          |   |
|   | By:                                                           |   |
|   | Name:  William L. Hoese                                       |
|   | Title:  Secretary                                             |
|   |                                                          |   |
|   |                                                          |   |
|   | CUBIC  SIMULATION SYSTEMS, INC., a California corporation     |
|   |                                                          |
|   |                                                          |   |
|   | By:                                                           |   |
|   | Name:  William L. Hoese                                       |
|   | Title:  Secretary                                             |
|   |                                                          |
|   |                                                          |   |
|   | OMEGA  TRAINING GROUP, INC., a Georgia corporation            |
|   |                                                          |
|   | By:                                                           |   |
|   | Name:  William L. Hoese                                       |
|   | Title: Secretary                                              |

 

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EXHIBIT E

 

FORM OF COMPLIANCE CERTIFICATE

 

CUBIC CORPORATIONOFFICER’S CERTIFICATE

 

In Conformance with the First Amended and RestatedCredit Agreement DatedDecember 16, 2009As of and for the PeriodEnding           .

 

The following certification is provided to theLenders as required under Section 5.02 of the First Amended andRestated Credit Agreement dated December 16, 2009 (the Agreement).  The undersigned hereby certifies that:

 

a.                                       the Borrowerwas in compliance with the requirements of Section 6.01 through 6.05and 6.10 of the Agreement, inclusive, during the period covered by theaccompanying financial statements (detailed calculations of financial covenantcompliance annexed), and

 

b.                                      the undersignedhas reviewed the terms of the Agreement 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 San Diego, California, this         day of                        ,        .

 

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

 

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For the Quarter/Year ended                  (“Statement Date”)

 

SCHEDULE 1to the Compliance Certificate($ in 000’s)

 
| I. Section 6.01(a) – Consolidated EBITDA  to Consolidated Cash Interest Expense.                                                             |   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
| A.   Consolidated EBITDA for four consecutive fiscal quarters ending  on above date (“Subject Period”) as set forth on Schedule 2: |   | $      |
| B.    Consolidated  Cash Interest Expense for the Subject Period:                                                                            |   | $      |
| C.    Consolidated  EBITDA to Consolidated Cash Interest Expense (Line I.A ÷ Line I.B):                                       |   | $      |
| *Minimum required: 3.00 to 1.00*                                                                                                                            |   |   |
| II. Section 6.01(b) – Consolidated  Indebtedness to Consolidated Adjusted EBITDA.                                                            |   |   |
| A.    Consolidated  Indebtedness at Statement Date as set forth on Schedule 2:                                                          |   | $      |
| B.    Consolidated  EBITDA for the Subject Period as set forth on Schedule 2:                                                           |   | $      |
| C.    EBITDA  of any Person which becomes a Restricted Subsidiary during the Subject  Period:                                                |   | $      |
| D.    Consolidated  Indebtedness to Consolidated Adjusted EBITDA (Line II.A ÷ Line II.B  + Line II.C):                   |   | $      |
| *Maximum permitted: 3.00 to 1.00*                                                                                                                           |   |   |

 

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SCHEDULE 2to the Compliance Certificate($ in 000’s)

 

Consolidated EBITDA(in accordance with the definition of Consolidated EBITDA as set forth in theAgreement)

 
| **EBITDA**                      | ** ** | **Quarter  Ended** | ** ** | **Quarter  Ended** | ** ** | **Quarter  Ended** | ** ** | **Quarter  Ended** | ** ** | **Twelve  Months  Ended** | ** ** |
|---------------------------------|------------|--------------------|------------|--------------------|------------|--------------------|------------|-------------------------|------------|---------------------------|------------|
| Net Income                      |       |               |       |               |       |               |       |                    |       |                      |       |
| - interest income               |       |               |       |               |       |               |       |                    |       |                      |       |
| + Consolidated Interest Expense |       |               |       |               |       |               |       |                    |       |                      |       |
| + net income taxes              |       |               |       |               |       |               |       |                    |       |                      |       |
| + depreciation expense          |       |               |       |               |       |               |       |                    |       |                      |       |
| + amortization expense          |       |               |       |               |       |               |       |                    |       |                      |       |
| + non-cash stock option expense |       |               |       |               |       |               |       |                    |       |                      |       |
| + non-cash losses               |       |               |       |               |       |               |       |                    |       |                      |       |
| - non-cash gains                |       |               |       |               |       |               |       |                    |       |                      |       |
| = EBITDA                        |       |               |       |               |       |               |       |                    |       |                      |       |

 

Consolidated Indebtedness(in accordance with the definition of Consolidated Indebtedness as set forth in the Credit Agreement)

 
| Liabilities for borrowed money                              |   | $      |   |
|-------------------------------------------------------------|--------|--------|--------|
| + liabilities for deferred purchase prices of  property     |   | $      |   |
| + liabilities for Capital Leases                            |   | $      |   |
| + liabilities for letters of credit                         |   | $      |   |
| + Swaps                                                     |   | $      |   |
| + Guarantees of any of the foregoing (without  duplication) |   | $      |   |
| ** **                                                  |   |   |   |
| **Consolidated Indebtedness**                               |   | $      |   |

 

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