Document:

EMPLOYMENT AGREEMENT

 

Exhibit 10.2

EMPLOYMENT AGREEMENT

     
EMPLOYMENT AGREEMENT (this
“Agreement”), effective as of June 28,
2004 (the “Effective Date”), by and between ITT
Industries, Inc., an Indiana corporation (the
“Company”), and Steven R. Loranger
(“Executive”).

     
WHEREAS, the Company desires to employ Executive
and to enter into an agreement embodying the terms of such
employment and considers it essential to its best interests and
the best interests of its stockholders to foster the employment
of Executive by the Company during the term of this Agreement;

     
WHEREAS, Executive desires to accept such
employment with and participation in the ownership of the
Company and to enter into this Agreement; and

     
WHEREAS, Executive is willing to accept
employment on the terms hereinafter set forth in this Agreement.

     
NOW, THEREFORE, in consideration of the premises
and mutual covenants herein and for other good and valuable
consideration, the parties hereby agree as follows:

     
1. Term of Employment. Subject to the
provisions of Section 11, this Agreement shall be effective
for a term commencing on the Effective Date and ending on the
day immediately preceding the third anniversary of the Effective
Date (the “Initial Term”); provided,
however, that such term shall be automatically extended for
successive twelve (12) month periods unless, no later than one
hundred and eighty (180) days prior to the expiration of the
Initial Term or any extension thereof, either party hereto shall
provide written notice to the other party hereto of its or his
desire not to extend the term hereof (the Initial Term together
with any extension period shall be referred to hereinafter as
the “Employment Term”).

     
2. Position.

		
	 	     
    (a) Executive shall serve as the President
    and Chief Executive Officer of the Company. In such position,
    Executive shall have such authorities, responsibilities and
    duties customarily exercised by a person holding that position,
    including, without limitation, the authority and responsibility
    for the management, operation, strategic direction and overall
    conduct of the business of the Company. Executive shall report
    directly to the Board of Directors of the Company (the
    “Board”).
    
	 
	 	     
    (b) Executive shall become a member of the
    Board on the Effective Date. During the Employment Term,
    Executive will devote his time and best efforts to the
    performance of his duties hereunder and will not engage in any
    other business, profession or occupation for compensation or
    otherwise which would conflict with the rendition of such
    services either directly or indirectly, without the prior
    written consent of the Board; provided, however, that Executive
    may (i) serve as a director, trustee or officer or
    otherwise participate in not-for-profit educational, welfare,
    social, religious and civic organizations; (ii) with the
    prior approval of the Board, serve as a director of any
    for-profit business which does not compete with the Company or
    any of its subsidiaries or affiliates, and (iii) acquire
    passive investment interests in one or more entities, to the
    extent that such other activities do not inhibit or interfere
    with the performance of Executive’s duties under this
    Agreement, and do not to the knowledge of Executive conflict in
    any material way with the policies of the Company or any
    subsidiary or affiliate thereof and, to the extent such
    investment interests exceed 3% of the outstanding equity
    interests of any such entity, such entity does not compete in
    any material manner with the Company or any subsidiary or
    affiliate thereof.
    

     
3. Base Salary. During the Employment
Term, the Company shall pay Executive a base salary (the
“Base Salary”) at the annual rate of
$900,000.00, payable in regular installments in accordance with
the Company’s usual payroll practices. The Board may from
time to time review and increase Executive’s Base Salary in
its sole discretion.

     
4. Annual Bonus. During the
Employment Term, Executive shall be eligible to receive an
annual cash bonus (the “Bonus” and together
with the Base Salary, “Compensation”) in
respect of each full or partial fiscal year of the Company (a
“Fiscal Year” which, as of the Effective Date,
is the period

 

January 1 through December 31) ending
during the Employment Term, with a target bonus equal to 100% of
Base Salary (“Target Bonus”), a minimum bonus
of $0 and a maximum bonus of 200% of Base Salary (pro rated for
partial Fiscal Years of employment), subject to the terms of the
Company’s 1997 Annual Incentive Plan for Executive Officers
and based on the attainment of Company, individual, or other
performance targets established by the Compensation and
Personnel Committee of the Board (the “Compensation
Committee”) for such Fiscal Year. Notwithstanding the
foregoing, the Bonus for the 2004 Fiscal Year shall be no less
than $900,000.00. The Bonus for each Fiscal Year shall be paid
to Executive no later than the end of the first calendar quarter
following the end of the Fiscal Year.

     
5. Long-Term Incentive Awards.

		
	 	     
    (a) Executive shall be granted in Fiscal
    Year 2005 a long-term incentive award with an aggregate target
    value of $4,500,000.00 (the “Incentive Award”).
    $1,800,000.00 of the Incentive Award shall be granted in the
    form of a target award in that amount pursuant to the terms of
    the Company’s 1997 Long-Term Incentive Plan (the
    “LTIP”) for the “Performance Period”
    (as defined in the LTIP) commencing on January 1, 2005 and
    ending on December 31, 2007. $450,000.00 of the Incentive
    Award shall be granted in the form of a long-term incentive
    award (not under the LTIP) with a target award of that amount,
    which shall be earned and payable on terms and conditions
    identical to those of the LTIP award described in the preceding
    sentence. Payment, if any, with respect to each of the awards
    described in the preceding two sentences shall be made on or
    before March 30, 2008 in the form of cash, unrestricted
    shares of the Company’s common stock, $1.00 par value per
    share (“Shares”), or a combination of cash and
    Shares as determined by the Compensation Committee upon the
    attainment of the applicable “Performance Measures”
    (as defined in the LTIP) for such Performance Period. The other
    $2,250,000.00 of the Incentive Award shall be in the form of a
    nonqualified stock option grant made during the first quarter of
    Fiscal Year 2005 pursuant to the Company’s 2003 Equity
    Incentive Plan, to purchase such number of Shares as shall be
    determined by the Committee as necessary for such stock option
    grant to have a value of $2,250,000.00, determined in a manner
    consistent with the valuation methodology followed for other
    senior executives of the Company. The stock option grant shall
    have such vesting, forfeiture and other terms as are applicable
    to stock options granted to other senior executives of the
    Company.
    
	 
	 	     
    (b) Executive shall also participate in the
    LTIP for the Performance Period commencing on January 1,
    2003 and ending on December 31, 2005, and for the
    Performance Period commencing on January 1, 2004 and ending
    on December 31, 2006, with a target award for each such
    Performance Period of $1,800,000.00, and with such participation
    being deemed to have commenced on January 1, 2003 and
    January 1, 2004, respectively. In addition, Executive shall
    be eligible for an additional long-term incentive award (not
    under the LTIP) in respect of each such Performance Period,
    which shall have a target award of $700,000.00 and which shall
    be earned and payable on terms and conditions identical to those
    of the LTIP award described in the preceding sentence in respect
    of the same Performance Period.
    
	 
	 	     
    (c) The determination of the portions of any
    future long term incentive award to be delivered in cash and
    equity incentive shall be the same for Executive as for other
    senior executives of the Company.
    
	 
	 	     
    (d) The determination of Executive’s
    target long-term incentive awards for Performance Periods
    commencing after January 1, 2005 shall be established by
    the Compensation Committee based on its determination of
    Executive’s performance and market levels of compensation
    for CEOs of comparable size companies, in accordance with
    procedures used by the Compensation Committee to establish
    compensation levels for other senior executives of the Company.
    
	 
	 	     
    (e) For purposes of this Agreement, the
    $450,000.00 target long-term incentive award described in
    Section 5(a) and the two $700,000.00 target long-term
    incentive awards described in Section 5(b), and each
    similar future long-term incentive award which is not granted
    under the LTIP because of contractual limits on the level of
    awards thereunder, shall be collectively referred to herein as
    the “Phantom LTIP Awards.”
    

2

 

     
6. Sign-On Equity. On the Effective
Date, Executive shall be granted a nonqualified stock option to
purchase 125,000 Shares pursuant to the stock option
agreement attached hereto as Exhibit A, and 125,000
restricted stock units pursuant to the restricted stock unit
agreement attached hereto as Exhibit B.

     
7. Special Pension Arrangement. Upon
the termination of Executive’s employment with the Company
for any reason on or after the fifth anniversary of the
Effective Date, Executive shall be entitled to receive from the
Company a special pension arrangement in the form of an annual
single life annuity commencing immediately following
Executive’s termination of employment and payable on a
monthly basis, calculated as the Applicable Percentage of
Executive’s average annual Compensation for the five
(5) years in which Executive’s Compensation was the
highest (with each “year” for this purpose being the
twelve (12) month period commencing on the Effective Date
and each anniversary thereof), determined in accordance with the
following schedule and without actuarial reduction (but reduced
as described in the following paragraph):

	 	 	 	 	 
			Applicable
	Executive’s Age Upon Termination		Percentage
	
		

	
    
    57
    

    	 	 	38	%
	
    
    58
    

    	 	 	42	%
	
    
    59
    

    	 	 	46	%
	
    
    60 or higher
    

    	 	 	50	%

     
The amount of the annual single life annuity
computed pursuant to the preceding paragraph shall be reduced,
but not below zero, by (A) the amount of annual single life
annuity, computed as of the date of Executive’s termination
of employment with the Company, equal to the actuarial
equivalent of the qualified and nonqualified defined benefit
pension benefits that Executive is entitled to receive from any
Company and prior employer defined benefit pension arrangement
(other than the nonqualified defined benefit pension arrangement
of Honeywell International Inc. (“Honeywell”)),
whether or not paid or payable prior to, on or following
Executive’s termination of employment, and computed as the
actuarial equivalent of a single life annuity commencing at
age 65, reduced (if applicable) for payment commencing
prior to age 65 and upon the termination of
Executive’s employment, and (B) the amount of annual
single life annuity, determined as of the date of
Executive’s termination of employment with the Company,
which is the actuarial equivalent value of $2,195,000.00 (being
the lump sum payment received by Executive pursuant to the
nonqualified defined benefit pension arrangement of Honeywell
upon his termination of employment with Honeywell) increased by
an interest factor of three percent (3%), compounded annually,
from January 19, 2003(1) through the date of
Executive’s termination of employment with the Company.

     
Executive also shall be entitled to receive the
special pension described in this Section 7 commencing upon
his termination of employment prior to the fifth anniversary of
the Effective Date by the Company without Cause (including on
account of Disability) or by Executive with Good Reason in
accordance with Section 11(a) or 11(c), as applicable; provided
that (I) the Applicable Percentage shall be the product of
(X) 38% multiplied by (Y) 20% multiplied by
(Z) the number of anniversaries of the Effective Date which
have occurred through the date of such termination, and
(II) the compensation against which the Applicable
Percentage is applied shall be the “Partial Period Average
Compensation,” as defined below, through the date of
termination.

     
Notwithstanding the foregoing, (A) Executive
shall receive an immediate lump sum payment equal to the
actuarial present value of the special pension described in this
Section 7 upon his termination of employment by the Company
without Cause, or by Executive with Good Reason, in accordance
with Section 11(c), in either case upon or following a
“Change of Control” (as defined in
Section 11(e)); provided that in that case, (i) the
Applicable Percentage shall be based on Executive’s age at
the time of the Change of Control plus three years, (ii) the
Applicable Percentage shall be no less than 38% and
(iii) if such termination occurs prior to the fifth
anniversary of the Effective Date, the compensation against
which the Applicable Percentage is applied shall be the

1 The date of payment by Honeywell.

3

 

Partial Period Average Compensation through the
date of termination and (B) subject to the preceding
clause (A), if Executive is married on the date as of which
payment of the special pension described in this Section 7
commences, such pension shall be paid in the form of an
actuarially equivalent joint and 100% survivor annuity with
Executive’s spouse as the joint annuitant.

     
Furthermore, if Executive dies prior to the
commencement of payment of the special pension described in this
Section 7, then Executive’s “Beneficiary”
(as defined below) shall receive an immediate lump sum payment
equal to the actuarial equivalent of the benefit to which
Executive would have been entitled, if any, under this
Section 7 had Executive’s employment been terminated
by the Company without Cause immediately prior to
Executive’s death.

     
For purposes of this Section 7,
(i) actuarial equivalents shall be computed by using the
actuarial assumptions used by the Company for financial
statement reporting purposes in respect of its U.S. defined
benefit pension plans for the Company’s fiscal year ending
immediately preceding Executive’s termination of employment
with the Company, (ii) “Partial Period Average
Compensation” shall mean the Compensation paid during
the period from the Effective Date through the applicable date
of Executive’s termination of employment, or not paid but
fully earned and payable in respect of any Fiscal Year ending
prior to such period, multiplied by a fraction, the numerator of
which is 365, and the denominator of which is the number of days
elapsed from the Effective Date through the date of termination,
and (iii) “Beneficiary” shall mean
Executive’s beneficiary as last designated in writing by
Executive to the Company prior to Executive’s death or, if
there is no such designation, Executive’s surviving spouse
or, if there is no such designation and no such surviving
spouse, Executive’s estate.

     
8. Employee Benefits, Fringe Benefits and
Perquisites. Executive shall be provided with employee
benefits, fringe benefits and employment and post-employment
perquisites on a basis no less favorable than such benefits and
perquisites are provided by the Company from time to time to the
Company’s other senior executives, or are or were provided
to the Company’s former chief executive officer, and the
Company shall, to the extent reasonably practicable, structure
any such benefits and perquisites to comply with any applicable
requirements for tax exemption by Executive. The Company agrees
to waive any waiting periods for Executive and Executive’s
dependents with respect to group coverage under its welfare
benefit plans. Without limiting the foregoing, Executive shall
be entitled to:

		
	 	     
    (a) Corporate Aircraft. Executive
    (and Executive’s spouse when she accompanies him) shall be
    entitled to use the Company aircraft for business travel when it
    is available, and for occasional use for personal travel in
    accordance with policies established from time to time by the
    Board when the aircraft is not scheduled for use for business
    purposes. The Company shall impute income to Executive for
    personal use of Company aircraft as required by applicable law.
    
	 
	 	     
    (b) Business Clubs. The Company shall
    pay the initiation fees and membership dues for Executive for at
    least one business club reasonably selected by Executive.
    
	 
	 	     
    (c) Financial Planning. The Company
    shall reimburse Executive for the reasonable costs associated
    with annual financial and tax planning advice provided by an
    advisor chosen by Executive in an amount not less than provided
    to any of the Company’s other senior executives.
    

     
9. Vacation. Executive shall be
entitled to four (4) weeks annual paid vacation in accordance
with the vacation policy of the Company.

     
10. Expense Reimbursement. During the
Employment Term, all reasonable business expenses incurred by
Executive in the performance of his duties hereunder, including
expenses related to professional memberships and associations,
shall be reimbursed by the Company in accordance with Company
policies. Executive shall be reimbursed for expenses of
relocation in accordance with the Company’s relocation
policy applicable to senior executives (a copy of which has been
previously provided to Executive). In addition, if Executive has
not sold his primary residence within ninety (90) days after the
Effective Date, the Company shall acquire or cause a third party
to acquire such residence for its fair market value as
determined by the average of the fair market values determined
by two appraisers reasonably acceptable to Executive and the
Company. Executive shall act in a diligent manner in promptly
listing such residence for sale and attempting to sell it.

4

 

     
11. Termination. Notwithstanding any
other provision of the Agreement:

		
	 	     
    (a) For Cause by the Company. The
    Employment Term, and Executive’s employment hereunder, may
    be terminated at any time by the Company for “Cause”
    upon delivery of a “Notice of Termination” (as defined
    in Section 11(g)) by the Company to Executive. For purposes
    of this Agreement, “Cause” shall mean
    (i) the willful and continued failure of Executive to
    perform substantially his duties with the Company (other than
    any such failure resulting from Executive’s incapacity due
    to physical or mental illness) after a written demand for
    substantial performance is delivered to Executive by the Board
    which specifically identifies the manner in which the Board
    believes that Executive has not substantially performed
    Executive’s duties and Executive has failed to cure such
    failure to the reasonable satisfaction of the Board,
    (ii) the willful engaging by Executive in gross misconduct
    which results in substantial damage to the Company,
    (iii) Executive’s willful violation of a material
    provision of the Company’s Code of Conduct,
    (iv) conviction of, or entry of a pleading of guilty or no
    contest by, Executive with respect to a felony, other than a
    traffic infraction not involving an intent to commit a crime, or
    any lesser crime of which fraud or dishonesty is a material
    element, (v) Executive’s breach of any of his
    representations in Section 16(a) or
    (vi) Executive’s habitual intoxication or continued
    abuse of illegal drugs which materially interferes with
    Executive’s ability to perform his assigned duties and
    responsibilities. For purpose of this Section 11(a), no act
    or failure to act by Executive shall be considered
    “willful” unless done or omitted to be done by
    Executive in bad faith and without reasonable belief that
    Executive’s action or omission was in the best interests of
    the Company. Any act, or failure to act, based upon authority
    given pursuant to a resolution duly adopted by the Board shall
    be conclusively presumed to be done, or omitted to be done, by
    Executive in good faith and in the best interests of the
    Company. Cause shall not exist unless and until the Company has
    delivered to Executive, along with the Notice of Termination for
    Cause, a copy of a resolution duly adopted by a majority of the
    Board (excluding Executive) at a meeting of the Board called and
    held for such purpose (after reasonable notice to Executive and
    an opportunity for Executive, together with counsel, to be heard
    before the Board), finding that in the good faith opinion of the
    Board an event set forth in clauses (i)-(vi) above has
    occurred and specifying the particulars thereof in detail.
    

     
If Executive is terminated for Cause pursuant to
this Section 11(a), he shall be entitled to receive only
his Base Salary through the date of termination and he shall
have no further rights to any compensation (including any Base
Salary or Bonus) or any other benefits under this Agreement
which have not vested prior to his date of termination. All
other benefits, if any, due Executive following Executive’s
termination of employment for Cause pursuant to this
Section 11(a) shall be determined in accordance with the
plans, policies and practices of the Company; provided,
however, that Executive shall not participate in any
severance plan, policy or program of the Company.

		
	 	     
    (b) Disability, Death or Normal
    Retirement. The Employment Term, and Executive’s
    employment hereunder, shall terminate immediately upon his death
    or following delivery of a Notice of Termination by the Company
    to Executive if Executive becomes physically or mentally
    incapacitated and is therefore unable for a period of ninety
    (90) consecutive days or one-hundred twenty (120) days during
    any consecutive six (6) month period to perform his duties with
    substantially the same level of quality as immediately prior to
    such incapacity (such incapacity is hereunder referred to as
    “Disability”). Executive may retire upon
    achieving age 65 (“Normal Retirement”).
    Upon termination of Executive’s employment hereunder for
    Disability, death or Normal Retirement, Executive or
    Executive’s estate (as the case may be) shall be entitled
    to receive his Base Salary through the date of termination and
    any earned but unpaid Bonus for any calendar year preceding the
    year in which the termination occurs, together with a pro rata
    payment of the Target Bonus and target award for each
    outstanding LTIP award and Phantom LTIP Award based on the
    number of days elapsed during the applicable performance period
    (or such greater amount as may be provided under the LTIP,
    including as the terms of the LTIP may apply to the Phantom LTIP
    Awards). Executive or Executive’s estate (as the case may
    be) shall have no further rights to any compensation (including
    any Base Salary or Bonus) or any other benefits under this
    Agreement. All other benefits, if any, due Executive following
    Executive’s termination for Disability or death shall be
    determined in accordance with the plans,
    

5

 

		
	 	
    policies and practices of the Company;
    provided, however, that Executive (or his estate, as the
    case may be) shall not participate in any severance plan, policy
    or program of the Company.
    
	 
	 	     
    (c) Without Cause by the Company or for
    Good Reason by Executive. The Employment Term, and
    Executive’s employment hereunder, may be terminated by the
    Company without Cause (other than by reason of Executive’s
    Disability) following the delivery of a Notice of Termination to
    Executive or by Executive for “Good Reason” (as
    defined below) following the delivery of a Notice of Termination
    to the Company. If the Company give a notice under
    Section 1 of its desire not to have the term of this
    Agreement automatically extended (a “Company Non-Renewal
    Notice”), then the subsequent termination of
    Executive’s employment at the end of the Employment Term
    shall be deemed, for all purposes of this Agreement other than
    as specifically stated below, as a termination by the Company
    without Cause; provided that this sentence shall not apply if
    the end of the Employment Term following a Company Non-Renewal
    Notice falls on or after Executive’s attainment of
    age 65. If Executive’s employment is terminated by the
    Company without Cause (other than by reason of Executive’s
    Disability) or by Executive for Good Reason, Executive shall
    receive (i) within five (5) days following
    termination, a lump sum payment of (A) any earned but
    unpaid Base Salary through the date of termination, (B) any
    earned but unpaid Bonus for any calendar year preceding the year
    in which the termination occurs, plus (C) a pro-rata Target
    Bonus for the year of termination based on the number of days
    elapsed in the Fiscal Year prior to such termination (the
    “Accrued Obligations”) plus
    (ii) twenty-four (24) monthly payments, commencing on
    the first day of the month immediately following
    Executive’s termination of employment, each of which shall
    be equal to one twenty-fourth ( 1/24) of the sum of
    (A) two times his Base Salary (at the rate then in effect)
    and (B) two times his Target Bonus; provided that if such
    termination is at the end of the Employment Term following the
    Company giving a Company Non-Renewal Notice as described above,
    then Executive shall receive under this clause (ii) twelve
    (12) monthly payments, commencing on the first day of the
    month immediately following Executive’s termination of
    employment, each of which shall be equal to one-twelfth
    ( 1/12) of the sum of (A) one times his Base Salary
    (at the rate then in effect) and (B) one times his Target
    Bonus. In addition, upon a termination of Executive’s
    employment pursuant to this Section 11(c), the Company
    shall continue to provide health and other welfare benefits to
    Executive and his spouse and dependents, if any, for a two
    (2) year period following the date of Executive’s
    termination, as are provided from time to time to actively
    employed senior executives of the Company; provided, that
    the Company’s obligation to provide a health or other
    welfare benefit shall cease with respect to such benefit at the
    time Executive becomes eligible for such benefit from another
    employer. To the extent that the health and other welfare
    benefits provided for in this Section 11(c) are not
    permissible after termination of employment under the terms of
    the benefit plans of the Company then in effect (and cannot be
    provided through the Company’s paying the applicable
    premium for Executive under COBRA), the Company shall pay to
    Executive such amount as is necessary to provide Executive,
    after tax, with an amount equal to the cost of acquiring, for
    Executive and his spouse and dependents, if any, on a non-group
    basis, for the required period, those health and other welfare
    benefits that would otherwise be lost to Executive and his
    spouse and dependents as a result of Executive’s
    termination. Executive shall have no further rights to any
    compensation (including any Base Salary or Bonus) or any other
    benefits under this Agreement. All other benefits, if any, due
    Executive following a termination pursuant to this
    Section 11(c), including benefits, if any, under any
    long-term incentive award, shall be determined in accordance
    with the plans, policies and practices of the Company;
    provided, however, that Executive shall not participate
    in any severance plan, policy or program of the Company.
    

		
	 	
    For purposes of this Agreement, “Good
    Reason” means:
    

		
	 	     
    (i) (A) any change in the authorities,
    duties or responsibilities (including reporting
    responsibilities) of Executive that is inconsistent in any
    material and adverse respect with Executive’s position(s),
    authorities, duties, responsibilities or status with the Company
    (including any material and adverse diminution of such
    authorities, duties or responsibilities); (B) any adverse
    change in Executive’s title; (C) the failure of
    Executive to be nominated or re-elected to the Board; or
    (D) the failure of Executive to be elected as Chairman of
    the
    

6

 

		
	 	
    Board on or before December 31, 2004 or, at
    any time thereafter, to be retained as Chairman of the Board,
    unless the Board determines that the positions of Chairman and
    Chief Executive Officer must be held by different persons
    (I) due to an applicable statutory, regulatory or stock
    exchange requirement or (II), if such practice is common
    among companies of similar size in similar industries to the
    Company and the Board determines, based on the written advice of
    the Company’s or the Board’s outside counsel, that
    such practice constitutes best practices corporate governance;
    
	 
	 	     
    (ii) any failure by the Company to comply
    with any of the provisions of Section 3, 4, 5, 6, 7, 8 or 9
    of this Agreement;
    
	 
	 	     
    (iii) the relocation of Executive’s
    primary office to a location that is more than fifty
    (50) miles from both of (A) the Company’s
    headquarters in White Plains, New York and
    (B) Executive’s residence at the time of such
    relocation;
    
	 
	 	     
    (iv) any purported termination by the
    Company of Executive’s employment otherwise than as
    permitted by this Agreement, it being understood that any such
    purported termination shall not be effective for any purpose of
    this Agreement; or
    
	 
	 	     
    (v) the Company’s failure to comply
    with and satisfy Section 16(h)(ii) of this Agreement, or
    the Company’s breach of any of its representations in
    Section 16(a);
    

		
	 	
    provided that a
    termination by Executive with Good Reason shall be effective
    only if, within thirty (30) days following the delivery of
    a Notice of Termination for Good Reason by Executive to the
    Company, the Company has failed to cure the circumstances giving
    rise to Good Reason.
    

		
	 	     
    (d) Termination by Executive without Good
    Reason. The Employment Term, and Executive’s employment
    hereunder, may be terminated by Executive without Good Reason
    prior to Normal Retirement following the delivery of a Notice of
    Termination to the Company. Upon a termination by Executive
    pursuant to this Section 11(d), Executive shall be entitled
    to his Base Salary through the date of such termination and he
    shall have no further rights to any compensation (including any
    Base Salary or Bonus) or any other benefits under this Agreement
    which have not vested prior to Executive’s termination
    date. All other benefits, if any, due Executive following
    termination pursuant to this Section 11(d) shall be
    determined in accordance with the plans, policies and practices
    of the Company; provided, however, that Executive shall
    not participate in any severance plan, policy or program of the
    Company.
    
	 
	 	     
    (e) Termination in Connection with a
    Change of Control. In the event that the Company terminates
    Executive’s employment and this Agreement without Cause or
    if Executive terminates his employment and this Agreement for
    Good Reason within two (2) years following a Change of Control,
    then Executive shall be entitled to receive, instead of the
    amounts set forth in Section 11(c), the following:
    

		
	 	     
    (i) a lump sum payment of the Accrued
    Obligations within five (5) days following the date of
    termination;
    
	 
	 	     
    (ii) a lump sum payment of severance pay
    equal to the sum of (A) three (3) times his Base Salary (at the
    rate then in effect) and (B) three times an amount equal to the
    highest Bonus paid to Executive at any time during the three (3)
    year period prior to the Change in Control; and
    
	 
	 	     
    (iii) continued health and other welfare
    benefits in accordance with Section 11(c).
    

		
	 	
    All other benefits, if any, due Executive
    following Executive’s termination of employment by the
    Company without Cause or by Executive for Good Reason under the
    circumstances described in this Section 11(e) shall be
    determined in accordance with the plans, policies and practices
    of the Company.
    

		
	 	     
    For purposes of this Agreement, a “Change
    of Control” shall be deemed to have occurred on the
    first day that any one or more of the following conditions has
    been satisfied:
    

7

 

		
	 	     
    (i) a report on Schedule 13D being
    filed with the Securities and Exchange Commission pursuant to
    Section 13(d) of the Securities and Exchange Act of 1934
    (the “Exchange Act”) disclosing that any
    “person” (within the meaning of Section 13(d) of
    the Exchange Act), other than the Company or any of its
    subsidiaries or any employee benefit plan sponsored by the
    Company or any of its subsidiaries, is the “beneficial
    owner” (as such term is described in Rule 13d-3 of the
    Exchange Act) directly or indirectly of twenty (20%) or more of
    the outstanding common stock of the Company;
    
	 
	 	     
    (ii) any “person” (within the
    meaning of Section 13(d) of the Exchange Act), other than
    the Company or any of its subsidiaries or any employee benefit
    plan sponsored by the Company or any of its subsidiaries, shall
    purchase shares pursuant to a tender offer or exchange offer to
    acquire any common stock of the Company (or securities
    convertible into common stock of the Company) for cash,
    securities or any other consideration, provided that after
    consummation of the offer, the person in question is the
    “beneficial owner” (as such term is described in
    Rule 13d-3 of the Exchange Act) directly or indirectly, of
    fifteen percent (15%) or more of the outstanding common stock of
    the Company (calculated as provided in paragraph (d) of
    Rule 13d-3 under the Exchange Act in the case of rights to
    acquire common stock);
    
	 
	 	     
    (iii) the stockholders of the Company
    approve (A) any consolidation or merger of the Company in which
    the Company is not the continuing or surviving corporation or
    pursuant to which shares of common stock of the Company would be
    converted into cash, securities or other property, other than a
    merger of the Company in which holders of common stock of the
    Company immediately prior to the merger have the same
    proportionate ownership of common stock of the surviving
    corporation immediately after the merger as immediately before
    or (B) any sale, lease, exchange or other transfer (in one
    transaction or a series of related transactions) of all or
    substantially all the assets of the Company; or
    
	 
	 	     
    (iv) a change in the majority of the members
    of the Board within a twelve (12) month period unless the
    election or nomination for election by the Company’s
    stockholders of each new director during such twelve month
    period was approved by the vote of two-thirds ( 2/3) of the
    directors then still in office who were directors at the
    beginning of such twelve (12) month period.
    

		
	 	     
    (f) Special Rules Regarding Retiree
    Medical Coverage. Executive shall be entitled to retiree
    medical coverage in accordance with the terms of the
    Company’s retiree medical arrangement in effect for persons
    joining the Company on the Effective Date; provided that, in
    addition to the terms of eligibility generally applicable to
    Executive pursuant to such arrangement and notwithstanding
    anything in this Agreement to the contrary, Executive’s
    termination of employment after the first anniversary of the
    Effective Date (i) by the Company without Cause (including on
    account of Disability) or by Executive with Good Reason in
    accordance with Section 11(a) or 11(c), as applicable, or
    (ii) due to Executive’s death, shall be considered a
    “retirement” for purposes of such arrangement and
    entitle Executive to the benefits thereunder.
    
	 
	 	     
    (g) Release. Notwithstanding any
    other provision of this Agreement to the contrary, Executive
    acknowledges and agrees that any and all payments to which
    Executive is entitled under this Section 11 are conditional
    upon and subject to Executive’s execution of a general
    release and waiver, in such reasonable and customary form as
    shall be prepared by the Company, of all claims Executive may
    have against the Company and its directors, officers and
    affiliates, except as to matters covered by provisions of this
    Agreement that expressly survive the termination of this
    Agreement. Such release shall include a release by the Company
    and its subsidiaries of all claims against Executive other than
    claims as to which all material facts are not actually known to
    any member of the Board (other than Executive) at the date of
    termination.
    
	 
	 	     
    (h) Notice of Termination. Any
    purported termination of employment by the Company or Executive
    shall be communicated by a written Notice of Termination to
    Executive or the Company, respectively, delivered in accordance
    with Section 16(k) hereof. For purposes of this Agreement,
    a “Notice of Termination” shall mean a notice
    which shall indicate the specific termination provision in the
    Agreement relied upon, the date of termination, and shall set
    forth in
    

8

 

		
	 	
    reasonable detail the facts and circumstances
    claimed to provide a basis for termination of employment under
    the provision so indicated. The date of termination of
    Executive’s employment shall be the date so stated in the
    Notice of Termination, which date, in the event of a termination
    by Executive pursuant to Section 11(c) or 11(d) shall be no
    less than thirty (30)(in the case of a Section 11(c)
    termination) or sixty (60)(in the case of a Section 11(d)
    termination) days following the delivery of a Notice of
    Termination; provided, however, that in the case of a
    termination for Cause by the Company, the date of termination
    shall be the date the Notice of Termination is delivered in
    accordance with Section 16(k).
    

     
12. Certain Additional Payments by the
Company. In the event that it shall be determined that any
payment or distribution by the Company to or for the benefit of
Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional
payments required under this Section 12, such payments or
distributions being referred to herein as
“Payments”) would give rise to liability of
Executive for the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the
“Code”), or that any interest or penalties are
incurred by Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise
Tax”), then Executive shall be entitled to receive an
additional payment (the “Gross-Up Payment”) in
an amount such that after payment by Executive of all Federal,
state and local taxes (including any interest or penalties
imposed with respect to such taxes), including, without
limitation, any income and employment taxes (and any interest
and penalties imposed with respect to such taxes) and Excise Tax
imposed upon the Gross-Up Payment, Executive retains an amount
of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments. For this purpose, Executive shall be deemed to be in
the highest marginal rate of Federal, state and local taxes.
This payment shall be made as soon as possible following the
date of Executive’s termination of employment, but in no
event later than thirty (30) calendar days of such date. In
the event the Gross-Up Payment shall fail to make Executive
whole on an after-tax basis, the Gross-Up Payment shall be
recalculated (“Recalculated Gross-Up Payment”),
using Executive’s actual effective tax rate, once it is
known for the calendar year in which the Gross-Up Payment is
made, and the Company shall reimburse Executive for the full
amount of any amount by which the Recalculated Gross-Up Payment
exceeds the Gross-Up Payment (“Additional Gross-Up
Payment”). The Gross-Up Payment and any Additional
Gross-Up Payment shall be paid out of the general assets of the
Company. In the event the Internal Revenue Service subsequently
adjusts the excise tax computation herein described, the Company
shall reimburse Executive for the full amount necessary to make
Executive whole on an after-tax basis (less any amounts received
by Executive that Executive would not have received had the
computations initially been computed as subsequently adjusted),
including the value of any underpaid excise tax, and any related
interest and/or penalties due to the Internal Revenue Service.
The Company shall reimburse Executive on an after-tax basis for
all legal and accounting expenses incurred in connection with
the filing of any tax return or amended tax return with respect
to the Excise Tax or the amount payable under this
Section 12 and any dispute with the Internal Revenue
Service regarding the amount of the Excise Tax or the amount
payable under this Section 12. Executive shall confer and
cooperate with the Company in any such dispute with the Internal
Revenue Service.

     
13. Restrictive Covenants.

		
	 	     
    (a) Non-Competition/
    Non-Solicitation. Executive acknowledges and recognizes the
    highly competitive nature of the businesses of the Company and
    its subsidiaries and affiliates and accordingly agrees as
    follows:
    

		
	 	     
    (i) During the Employment Term and for a
    period of two (2) years following the earlier of
    (A) the expiration of the Employment Term and (B) the
    date Executive ceases to be employed by the Company (the
    “Restricted Period”), Executive will not,
    directly or indirectly, engage in “Competition” in the
    “Restricted Territory” (as each such term is defined
    below). For purposes of this Section 13, the Company shall
    be construed to include the Company and its subsidiaries and
    affiliates.
    

9

 

		
	 	     
    (1) “Competition” shall
    mean engaging in, as an employee, director, partner, principal,
    shareholder, consultant, advisor, independent contractor or
    similar capacity, any business activity or conduct that directly
    competes with the business lines in which the Company is engaged
    both at the time of termination of employment and at the time of
    the determination and that during the last fiscal year ending
    prior to the date of such termination represented, or during the
    fiscal in which such termination occurs is reasonably
    anticipated by the Company to represent, at least five percent
    (5%) of the Company’s revenues (the “Prohibited
    Lines”). Notwithstanding anything else in this
    Section 13(a), Competition shall not include:
    (i) engaging in any activity with the prior written
    approval of the Company’s Chief Executive Officer,
    (ii) the employment by, or provision of services to, an
    investment banking firm or consulting firm that provides
    services to entities that are in Competition with the Company
    provided that Executive does not personally represent or provide
    services to such entities with regard to businesses in
    Competition with the Prohibited Lines, (iii) being employed
    by, or consulting for, a non-Competitive division or business
    unit of an entity that is in Competition with the Company (and
    participating in such entity’s employee equity plans) or
    (iv) any activities conducted after a Change in Control.
    
	 
	 	     
    (2) “Restricted Territory” shall
    mean any geographic area in which the Company with regard to the
    Prohibited Lines did more than nominal business.
    

		
	 	     
    (ii) Notwithstanding anything to the
    contrary in the Agreement, Executive may, directly or
    indirectly, own, solely as an investment, securities of any
    person engaged in the business of the Company which are publicly
    traded on a national or regional stock exchange or on the
    over-the-counter market if Executive (A) is not a
    controlling person of, or a member of a group which controls,
    such person and (B) does not, directly or indirectly, own
    five percent (5%) or more of any class of securities of such
    person.
    
	 
	 	     
    (iii) During the Restricted Period,
    Executive will not, directly or indirectly, solicit or encourage
    to cease to work with the Company, or directly or indirectly
    hire, any person who is an employee of or consultant then under
    contract with the Company or who was an employee of or
    consultant then under contract with the Company within the six
    (6) month period preceding such activity without the
    Company’s written consent.
    
	 
	 	     
    (iv) During the Restricted Period, Executive
    will not, directly or indirectly, solicit, encourage or cause
    any client or customer of the Company to cease doing business
    with the Company, or to reduce the amount of business such
    client or customer does with the Company.
    
	 
	 	     
    (v) Executive understands that the
    provisions of this Section 13(a) may limit his ability to
    earn a livelihood in a business similar to the business of the
    Company but he nevertheless agrees and hereby acknowledges that
    (A) such provisions do not impose a greater restraint than
    is necessary to protect the goodwill or other business interests
    of the Company, (B) such provisions contain reasonable
    limitations as to time and scope of activity to be restrained,
    (C) such provisions are not harmful to the general public,
    (D) such provisions are not unduly burdensome to Executive,
    and (E) the consideration provided hereunder is sufficient
    to compensate Executive for the restrictions contained in this
    Section 13(a). In consideration of the foregoing and in
    light of Executive’s education, skills and abilities,
    Executive agrees that he shall not assert that, and it should
    not be considered that, any provisions of Section 13(a)
    otherwise are void, voidable or unenforceable or should be
    voided or held unenforceable.
    
	 
	 	     
    (vi) It is expressly understood and agreed
    that although Executive and the Company consider the
    restrictions contained in this Section 13(a) to be
    reasonable, if a judicial determination is made by a court of
    competent jurisdiction that the time or territory or any other
    restriction contained in this Agreement is an unenforceable
    restriction against Executive, the provisions of this Agreement
    shall not be rendered void but shall be deemed amended to apply
    as to such maximum time and territory and to such maximum extent
    as such court may judicially determine or indicate to be
    enforceable. Alternatively, if any court of
    

10

 

		
	 	
    competent jurisdiction finds that any restriction
    contained in this Agreement is unenforceable, and such
    restriction cannot be amended so as to make it enforceable, such
    finding shall not affect the enforceability of any of the other
    restrictions contained herein.
    

		
	 	     
    (b) Mutual Nondisparagement.
    Executive agrees (whether during or after Executive’s
    employment with the Company) not to issue, circulate, publish or
    utter any false or disparaging statements, remarks or rumors
    about the Company or its affiliates or the officers, directors,
    managers or shareholders of the Company or its affiliates unless
    giving truthful testimony under subpoena. Upon the termination
    of Executive’s employment with the Company, the Company
    shall instruct its directors and senior officers not to issue,
    circulate, publish or utter any false or disparaging statements,
    remarks or rumors about Executive unless giving truthful
    testimony under subpoena.
    
	 
	 	     
    (c) Code of Conduct. Executive agrees
    (whether during or after Executive’s employment with the
    Company) to abide by the terms of the Company’s Code of
    Conduct.
    
	 
	 	     
    (d) Confidentiality/Company Property.
    Executive shall not, without the prior written consent of the
    Company, use, divulge, disclose or make accessible to any other
    person, firm, partnership, corporation or other entity, any
    “Confidential Information” (as defined below) except
    while employed by the Company, in furtherance of the business of
    and for the benefit of the Company or its affiliates, or any
    “Personal Information” (as defined below);
    provided that Executive may disclose such information
    when required to do so by a court of competent jurisdiction, by
    any governmental agency having supervisory authority over the
    business of the Company and/or its affiliates, as the case may
    be, or by any administrative body or legislative body (including
    a committee thereof) with jurisdiction to order Executive to
    divulge, disclose or make accessible such information;
    provided, further, that in the event that
    Executive is ordered by a court or other government agency to
    disclose any Confidential Information or Personal Information,
    Executive shall (i) promptly notify the Company of such
    order, (ii) at the written request of the Company,
    diligently contest such order at the sole expense of the Company
    as expenses occur, and (iii) at the written request of the
    Company, seek to obtain, at the sole expense of the Company,
    such confidential treatment as may be available under applicable
    laws for any information disclosed under such order. For
    purposes of this Section 13(d),
    (i) “Confidential Information” shall mean
    non-public information concerning the financial data, strategic
    business plans, product development (or other proprietary
    product data), customer lists, marketing plans and other
    non-public, proprietary and confidential information relating to
    the business of the Company or its affiliates or customers,
    that, in any case, is not otherwise available to the public
    (other than by Executive’s breach of the terms hereof) and
    (ii) “Personal Information” shall mean any
    information concerning the personal, social or business
    activities of the officers, directors, principals, shareholders,
    agents and employees of the Company or its affiliates. Upon
    termination of Executive’s employment with the Company and
    its affiliates, Executive shall return all Company property,
    including, without limitation, files, records, disks and any
    media containing Confidential Information or Personal
    Information.
    
	 
	 	     
    (e) Developments. All discoveries,
    inventions, ideas, technology, formulas, designs, software,
    programs, algorithms, products, systems, applications,
    processes, procedures, methods and improvements and enhancements
    conceived, developed or otherwise made or created or produced by
    Executive alone or with others, and in any way relating to the
    business or any proposed business of the Company or any of its
    affiliates of which Executive has been made aware, or the
    products or services of the Company or any of its affiliates of
    which Executive has been made aware, whether or not subject to
    patent, copyright or other protection and whether or not reduced
    to tangible form, at any time during the Employment Term
    (“Developments”), shall be the sole and
    exclusive property of the Company. Executive agrees to, and
    hereby does, assign to the Company, without any further
    consideration, all of Executive’s right, title and interest
    throughout the world in and to all Developments. Executive
    agrees that all such Developments that are copyrightable may
    constitute works made for hire under the copyright laws of the
    United States and, as such, acknowledges that the Company or one
    of its affiliates, as the case may be, is the author of such
    Developments and owns all of the rights comprised in the
    copyright of such Developments and Executive hereby assigns to
    the Company without any
    

11

 

		
	 	
    further consideration all of the rights comprised
    in the copyright and other proprietary rights Executive may have
    in any such Development to the extent that it might not be
    considered a work made for hire. Executive shall make and
    maintain adequate and current written records of all
    Developments and shall disclose all Developments promptly, fully
    and in writing to the Company promptly after development of the
    same, and at any time upon request.
    

     
14. Enforcement. Executive
acknowledges and agrees that the Company’s remedies at law
for a breach or threatened breach of any of the provisions of
Sections 13(a), (b), (d) and (e) herein would be inadequate
and, in recognition of this fact, Executive agrees that, in the
event of such a breach or threatened breach, in addition to any
remedies at law, the Company, without posting any bond, shall be
entitled to obtain equitable relief in the form of specific
performance, temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then be
available. In addition, the Company shall be entitled to
immediately cease paying any amounts remaining due or providing
any benefits to Executive pursuant to Section 11 upon a
determination by the Board that Executive has violated any
provision of Section 13.

     
15. Indemnification.

		
	 	     
    (a) The Company agrees that if Executive is
    made a party, or is threatened to be made a party, to any
    action, suit or proceeding, whether civil, criminal,
    administrative or investigative (a “Proceeding”), by
    reason of the fact that he is or was a director, officer or
    employee of the Company or is or was serving at the request of
    the Company as a director, officer, member, employee or agent of
    another corporation, partnership, joint venture, trust or other
    enterprise, including service with respect to employee benefit
    plans, Executive shall be indemnified and held harmless by the
    Company to the fullest extent legally permitted or authorized by
    the Company’s certificate of incorporation or bylaws or
    resolutions of the Company’s Board of Directors or, if
    greater, by the laws of the State of Indiana, against all cost,
    expense, liability and loss (including, without limitation,
    attorneys’ fees, judgments, fines, ERISA excise taxes or
    other liabilities or penalties and amounts paid or to be paid in
    settlement) reasonably incurred or suffered by Executive in
    connection therewith, and such indemnification shall continue as
    to Executive even if he has ceased to be a director, member,
    employee or agent of the Company or other entity, with respect
    to acts or omissions which occurred prior to his cessation of
    employment with the Company, and shall inure to the benefit of
    Executive’s heirs, executors and administrators. To the
    fullest extent allowed by law, the Company shall advance to
    Executive all reasonable costs and expenses incurred by him in
    connection with a Proceeding within 20 calendar days after
    receipt by the Company of a written request for such advance.
    Such request shall include an undertaking by Executive to repay
    the amount of such advance if it shall ultimately be determined
    that he is not entitled to be indemnified against such costs and
    expenses.
    
	 
	 	     
    (b) Neither the failure of the Company
    (including its board of directors, independent legal counsel or
    stockholders) to have made a determination prior to the
    commencement of any proceeding concerning payment of amounts
    claimed by Executive under Section 15(a) above that
    indemnification of Executive is proper because he has met the
    applicable standard of conduct, nor a determination by the
    Company (including its board of directors, independent legal
    counsel or stockholders) that Executive has not met such
    applicable standard of conduct, shall create a presumption that
    Executive has not met the applicable standard of conduct.
    
	 
	 	     
    (c) During his employment with the Company
    and thereafter, so long as Executive may have liability arising
    out of his service as an officer or director of the Company, the
    Company agrees to continue and maintain a directors’ and
    officers’ liability insurance policy covering Executive to
    the maximum extent that the Company provides such coverage for
    its active executive officers and directors.
    

     
16. Miscellaneous.

		
	 	     
    (a) Executive’s and Company’s
    Representations. Executive hereby represents and warrants to
    the Company that (i) the execution, delivery and
    performance of this Agreement by Executive does not and shall
    not conflict with, breach, violate or cause a default under any
    contract, agreement, instrument, order, judgment or decree to
    which Executive is a party or by
    

12

 

		
	 	
    which he is bound; (ii) Executive is not a
    party to or bound by an employment agreement, noncompete
    agreement or confidentiality agreement with any other person or
    entity which would interfere in any material respect with the
    performance of his duties hereunder; and (iii) Executive
    shall not use any confidential information or trade secrets of
    any person or party other than the Company and its subsidiaries
    in connection with the performance of his duties hereunder. The
    Company represents and warrants that it is fully authorized and
    empowered to enter into this Agreement, that the Agreement has
    been duly authorized by all necessary corporate action, that the
    performance of its obligations under this Agreement will not
    violate any agreement between it and any other person, firm or
    organization or any applicable law or regulation and that this
    Agreement is enforceable in accordance with its terms. The
    Company further represents that, to the knowledge of the Board
    and the “named executive officers” on the
    Company’s latest proxy statement immediately preceding the
    Effective Date, all financial reporting by the Company has been
    in compliance with all applicable requirements of law.
    
	 
	 	     
    (b) No Mitigation or Offset. In the
    event of any termination of Executive’s employment
    hereunder, Executive shall be under no obligation to seek other
    employment or otherwise mitigate the obligations of the Company
    under this Agreement and there shall be no offset against any
    amounts due under this Agreement on account of any remuneration
    attributable to any subsequent employment that Executive may
    obtain.
    
	 
	 	     
    (c) GOVERNING LAW; CONSENT TO
    JURISDICTION. THIS AGREEMENT SHALL BE GOVERNED BY AND
    CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
    APPLICABLE TO AGREEMENTS MADE AND TO BE WHOLLY PERFORMED WITHIN
    THAT STATE, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS OF
    ANY JURISDICTION WHICH WOULD CAUSE THE APPLICATION OF ANY LAW
    OTHER THAN THAT OF THE STATE OF NEW YORK. ANY ACTION TO ENFORCE
    THIS AGREEMENT AND/OR THE EXHIBITS HERETO (OTHER THAN AN ACTION
    WHICH MUST BE BROUGHT BY ARBITRATION PURSUANT TO
    SECTION 16(i)(ii)) MUST BE BROUGHT IN, AND THE PARTIES
    HEREBY CONSENT TO THE JURISDICTION OF, A COURT SITUATED IN
    WESTCHESTER COUNTY, NEW YORK. EACH PARTY HEREBY WAIVES THE
    RIGHTS TO CLAIM THAT ANY SUCH COURT IS AN INCONVENIENT FORUM FOR
    THE RESOLUTION OF ANY SUCH ACTION.
    
	 
	 	     
    (d) JURY TRIAL WAIVER. THE PARTIES
    EXPRESSLY AND KNOWINGLY WAIVE ANY RIGHT TO A JURY TRIAL IN THE
    EVENT ANY ACTION ARISING UNDER OR IN CONNECTION WITH THIS
    AGREEMENT OR EXECUTIVE’S EMPLOYMENT WITH THE COMPANY IS
    LITIGATED OR HEARD IN ANY COURT.
    
	 
	 	     
    (e) Entire Agreement/Amendments. This
    Agreement, together with the Exhibits hereto, contains the
    entire understanding of the parties with respect to the
    employment of Executive by the Company. There are no
    restrictions, agreements, promises, warranties, covenants or
    undertakings between the parties with respect to the subject
    matter herein other than those expressly set forth herein.
    Neither this Agreement nor the Exhibits hereto may be altered,
    modified, or amended except by written instrument signed by the
    parties hereto. In the event that the terms of any plan under
    which any award referenced in this Agreement is granted would
    limit or restrict in any way any right provided under this
    Agreement, the terms of this Agreement shall supercede the terms
    of such plan. Sections 12, 13, 14 and 15 survive the
    termination of Executive’s employment with the Company,
    except as otherwise specifically stated herein.
    
	 
	 	     
    (f) No Waiver. The failure of a party
    to insist upon strict adherence to any term of this Agreement on
    any occasion shall not be considered a waiver of such
    party’s rights or deprive such party of the right
    thereafter to insist upon strict adherence to that term or any
    other term of this Agreement.
    
	 
	 	     
    (g) Severability. In the event that
    one or more of the provisions of this Agreement shall be or
    become invalid, illegal or unenforceable in any respect, the
    validity, legality and enforceability of the remaining
    provisions of this Agreement shall not be affected thereby.
    

13

 

		
	 	     
    (h) Successors.
    

		
	 	     
    (i) This Agreement is personal to Executive
    and shall not be assignable by Executive otherwise than by will
    or the laws of descent and distribution. This Agreement shall
    inure to the benefit of and be enforceable by Executive’s
    legal representatives. This Agreement shall inure to the benefit
    of and be binding upon the Company and its successors.
    
	 
	 	     
    (ii) The Company will require any successor
    (whether direct or indirect, by purchase, merger, consolidation
    or otherwise) to all or substantially all of the business and/or
    assets of the Company to expressly assume and agree to perform
    this Agreement in the same manner and to the same extent that
    the Company would be required to perform it if no such
    succession had taken place. As used in this Agreement,
    “Company” shall mean the Company as
    hereinbefore defined and any successor to its business and/or
    assets as aforesaid which assumes and agrees to perform this
    Agreement by operation of law, or otherwise.
    

		
	 	     
    (i) Legal Fees, Resolution of
    Disputes.
    

		
	 	     
    (i) The Company shall reimburse to
    Executive, or pay directly, upon submission to the Company of a
    statement for services, the amount payable by Executive to an
    attorney of Executive’s choice that Executive has retained
    to advise Executive with regard to the negotiation and execution
    of this Agreement; or payable to a financial advisor of
    Executive’s choice with respect to advice in connection
    with this Agreement, provided, however, that (i) the
    fees charged by such attorney and advisor are computed at such
    attorney’s or advisor’s standard hourly rates, and
    (ii) such reimbursement or payment shall not exceed, in the
    aggregate, $25,000.00.
    
	 
	 	     
    (ii) Arbitration of Disputes and
    Reimbursement of Legal Costs. Any controversy or claim
    arising out of or relating to Section 13 of this Agreement
    (or the breach thereof) shall be settled by a state or federal
    court located in Westchester County, New York. Any controversy
    or claim arising out of or related to any other provision of
    this Agreement shall be settled by final, binding and
    non-appealable arbitration in Westchester County, New York by
    three arbitrators. Subject to the following provisions, the
    arbitration shall be conducted in accordance with the Commercial
    Rules of the American Arbitration Association (the
    “Association”) then in effect. One of the arbitrators
    shall be appointed by the Company, one shall be appointed by
    Executive and the third shall be appointed by the first two
    arbitrators. If the first two arbitrators cannot agree on the
    third arbitrator within 30 days of the appointment of the second
    arbitrator, then the third arbitrator shall be appointed by the
    Association and shall be experienced in the resolution of
    disputes under employment agreements for CEOs of major
    corporations. Any award entered by the arbitrators shall be
    final, binding and nonappealable and judgment may be entered
    thereon by either party in accordance with applicable law in any
    court of competent jurisdiction. This arbitration provision
    shall be specifically enforceable. The arbitrators shall have no
    authority to modify any provision of this Agreement or to award
    a remedy for a dispute involving this Agreement other than a
    benefit specifically provided under or by virtue of the
    Agreement. If the Executive prevails on any material issue which
    is the subject of such arbitration or lawsuit, the Company shall
    be responsible for all of the fees of the American Arbitration
    Association and the arbitrators (if applicable) and any expenses
    relating to the conduct of the arbitration or litigation
    (including the Company’s and the Executive’s
    reasonable attorneys’ fees and expenses). Otherwise, each
    party shall be responsible for its own expenses relating to the
    conduct of the arbitration or litigation (including reasonable
    attorneys’ fees and expenses) and shall share the fees of
    the American Arbitration Association and the arbitrators, if
    applicable, equally.
    

		
	 	     
    (j) Qualification, Registration and
    Trading of Stock. The Company shall take all actions as may
    be necessary or desirable to cause any Shares issued to
    Executive pursuant to any awards described in this Agreement
    (including upon the exercise of any such awards) to be
    (i) duly authorized, validly issued, fully paid and
    nonassessable, (ii) registered, or otherwise qualified, for
    sale, and for resale, under state and Federal securities laws to
    the extent that other Shares of the
    

14

 

		
	 	
    same class are then so registered or qualified;
    provided, however, that in no event shall the Company be
    required to prepare and file a Form S-3 reoffer prospectus,
    and (iii) listed, or otherwise qualified, for trading on
    any securities exchange or securities market on which Shares of
    the same class are then listed or qualified.
    
	 
	 	     
    (k) Notice. For the purpose of this
    Agreement, notices and all other communications provided for in
    this Agreement shall be in writing and shall be deemed to have
    been duly given if delivered personally, if delivered by
    overnight courier service, if sent by facsimile transmission or
    if mailed by United States registered mail, return receipt
    requested, postage prepaid, addressed to the respective
    addresses or sent via facsimile to the respective facsimile
    numbers, as the case may be, as set forth below, or to such
    other address as either party may have furnished to the other in
    writing in accordance herewith, except that notice of change of
    address shall be effective only upon receipt; provided,
    however, that (i) notices sent by personal delivery or
    overnight courier shall be deemed given when delivered;
    (ii) notices sent by facsimile transmission shall be deemed
    given upon the sender’s receipt of confirmation of complete
    transmission, and (iii) notices sent by United States
    registered mail shall be deemed given two days after the date of
    deposit in the United States mail.
    

		
	 	
    If to Executive, to such address as shall most
    
	 	
              currently
    appear on the records of the
    
	 	
              Company.
    
	 
	 	
    With a courtesy copy to:
    
	 
	 	
              Mayer,
    Brown, Rowe and Maw LLP
    
	 	
              190
    South LaSalle Street
    
	 	
              Chicago,
    IL 60603
    
	 	
              Fax:
    (312) 701-7711
    
	 	
              Attn:
    Herbert W. Krueger
    
	 
	 	
    If to the Company, to:
    
	 
	 	
              ITT
    Industries, Inc.
    
	 	
              4
    West Red Oak Lane
    
	 	
              White
    Plains, NY 10604
    
	 	
              Fax:
    914-696-2961
    
	 	
              Attn:
    General Counsel
    
	 
	 	
    With a courtesy copy to:
    
	 
	 	
              Paul
    Weiss, Rifkind, Wharton & Garrison LLP
    
	 	
              1285
    Avenue of the Americas
    
	 	
              New
    York, New York 10019-6064
    
	 	
              Fax:
    212-757-3990
    
	 	
              Attn:
    Michael J. Segal
    

		
	 	     
    (l) Withholding Taxes. The Company
    may withhold from any amounts payable under this Agreement such
    Federal, state and local taxes as may be required to be withheld
    pursuant to any applicable law or regulation.
    
	 
	 	     
    (m) Counterparts. This Agreement may
    be signed in counterparts, each of which shall be an original,
    with the same effect as if the signatures thereto and hereto
    were upon the same instrument.
    

15

 

     
IN WITNESS WHEREOF,
the parties hereto have duly executed this Agreement as of the
day and year first above written.

		
	 	
    EXECUTIVE
    
	 
	 	
    /s/ STEVEN R. LORANGER
    
	 	
    

	 	
    Steven R. Loranger
    
	 
	 	
    ITT INDUSTRIES, INC.
    
	 
	 	
    By: /s/ MARKOS I. TAMBAKERAS
    
	 	
    

	 	
    Name: Markos I. Tambakeras
    

			
	 	Title:	
    Chairman, Compensation and Personnel Committee of
    the Board of Directors of
    

		
	 	
    ITT Industries, Inc.
    

16

 

Exhibit A

ITT INDUSTRIES, INC.

2003 EQUITY INCENTIVE PLAN

NON-QUALIFIED STOCK OPTION AWARD
AGREEMENT

     
THIS AGREEMENT (the
“Agreement”), effective as of the 28th day of June,
2004 (the “Grant Date”), by and between ITT
Industries, Inc. (the “Company”) and Steven R.
Loranger (the “Optionee”), WITNESSETH:

     
WHEREAS, the Company
and the Optionee have entered into an Employment Agreement,
dated the date hereof (the “Employment
Agreement”), and as an inducement for the Optionee to
enter into and remain in the service of the Company and as an
incentive for increased efforts during such service, the
Company, through the Company’s Compensation and Personnel
Committee (the “Committee”), desires to provide
an opportunity for the Optionee to acquire stock ownership in
the Company pursuant to the provisions of the Company’s
2003 Equity Incentive Plan (the “Plan”);

     
NOW, THEREFORE, in
consideration of the terms and conditions set forth in this
Agreement and pursuant to the provisions of the Plan (which are
incorporated herein as part of this Agreement) and any
administrative rules and regulations related to the Plan as may
be adopted by the Committee, the parties hereto hereby agree as
follows:

     
1. Option Grant. In accordance with,
and subject to, the terms and conditions of the Plan and this
Agreement, the Company hereby grants to the Optionee a
Nonqualified Stock Option (the “Option”) to
purchase from the Company all or any part of an aggregate of
125,000 shares of common stock of the Company (the
“Option Shares”), at the purchase price of
$83.03 per Option Share (the “Exercise Price”).

     
2. Terms and Conditions. It is
understood and agreed that the Option is subject to the
following terms and conditions:

		
	 	     
    (a) Expiration Date. The Option shall
    expire on the tenth (10th) anniversary of the Grant Date, or, if
    the Optionee’s employment terminates before that date, on
    the date specified in subsection (e) below.
    
	 
	 	     
    (b) Exercise of Option. The Option
    may not be exercised as to any Option Share until it has become
    vested in respect thereof.
    
	 
	 	     
    (c) Vesting. Subject to
    Optionee’s continued employment with the Company on each
    such date, the Option shall vest and become exercisable as to
    one third ( 1/3) of the Option Shares on each of the third,
    fourth and sixth anniversaries of the Grant Date, such that the
    Option is 100% vested on the sixth anniversary of the Grant
    Date. Notwithstanding the foregoing, the Option shall vest and
    become exercisable with respect to 100% of the then unvested
    Option Shares upon the first to occur of the following events:
    

		
	 	     
    (i) termination of the Optionee’s
    employment due to Optionee’s death or Disability (as
    defined, and subject to the provisions set forth, in the
    Employment Agreement), termination by the Company without Cause
    (as defined, and subject to the provisions set forth, in the
    Employment Agreement), or termination by the Optionee with Good
    Reason (as defined, and subject to the provisions set forth, in
    the Employment Agreement); or
    
	 
	 	     
    (ii) an Acceleration Event.
    

		
	 	     
    (d) Payment of Exercise Price and Tax
    Withholding. Permissible methods for payment of the Exercise
    Price and for satisfaction of tax withholding obligations upon
    exercise of the Option shall be as described in
    Sections 6.6 and Article 14 of the Plan, or, if the
    Plan is amended, successor provisions. In addition to the
    methods of exercise permitted by Section 6.6 of the Plan,
    the Optionee may exercise the Option by way of a broker-assisted
    cashless exercise in a manner consistent with the Federal
    Reserve Board’s Regulation T, unless the Committee
    determines that such exercise method is prohibited by law.
    

 

		
	 	     
    (e) Effect of Termination of
    Employment.
    
	 
	 	     
    If the Optionee’s employment terminates
    before the tenth anniversary of the Grant Date, the Option shall
    expire on the date set forth below, as applicable:
    

		
	 	     
    (i) Termination of Optionee’s
    Employment by the Company for Cause or by the Optionee without
    Good Reason. If the Optionee’s employment is terminated
    by the Company for Cause or by the Optionee without Good Reason,
    both the vested and the unvested portions of the Option shall
    automatically expire and cease to be exercisable on the date of
    the termination of the Optionee’s employment.
    
	 
	 	     
    (ii) Termination of Optionee’s
    Employment for any reason other than by the Company for Cause or
    by the Optionee without Good Reason. If the Optionee’s
    employment is terminated for any reason other than by the
    Company for Cause or by the Optionee without Good Reason, the
    unvested portion of the Option shall automatically expire and
    cease to be exercisable on the date of the termination of the
    Optionee’s employment and the vested portion of the Option
    shall expire on the earlier of the first anniversary of the
    termination of the Optionee’s employment or the tenth
    anniversary of the Grant Date.
    

		
	 	     
    (f) Compliance with Laws and
    Regulations. The Option shall not be exercised at any time
    when its exercise or the delivery of shares hereunder would be
    in violation of any law, rule, or regulation that the Company
    may find to be valid and applicable.
    
	 
	 	     
    (g) Optionee Bound by Plan and Rules.
    Optionee hereby acknowledges receipt of a copy of the Plan and
    agrees to be bound by the terms and provisions thereof. Optionee
    agrees to be bound by any rules and regulations for
    administering the Plan as may be adopted by the Committee during
    the life of the Option; provided, however, that, in the event of
    any conflict between the Plan (or any rules and regulations for
    administering the Plan), the terms of this Agreement shall
    prevail and, provided further, that any dispute under this
    Agreement shall be deemed a dispute under the Employment
    Agreement and shall be subject to all of the terms and
    conditions of the Employment Agreement. Capitalized terms used
    herein and not otherwise defined shall be as defined in the Plan.
    

     
This Agreement is issued, and the Option
evidenced hereby is granted, in White Plains, New York, and
shall be governed and construed in accordance with the laws of
the State of New York.

     
IN WITNESS WHEREOF,
the Company has caused this instrument to be executed by the
undersigned Senior Vice President, as of the 28th day of June,
2004.

		
	 	
    ITT INDUSTRIES, INC.
    

			
	 	By: 	
    /s/ SCOTT A. CRUM
    

		
	 	
    

	 	
    Scott A. Crum
    
	 	
    Senior Vice President and Director, 

     Human Resources 

     

     OPTIONEE
    
	 
	 	
    /s/ STEVEN R. LORANGER
    
	 	
    

	 	
    Steven R. Loranger
    

2

 

Exhibit B

ITT INDUSTRIES, INC.

2003 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT

     
THIS RESTRICTED STOCK UNIT
AGREEMENT (the
“Agreement”), dated as of June 28, 2004
(the “Grant Date”), between ITT Industries,
Inc. (the “Company”), and Steven R.
Loranger (“Holder”).

RECITALS

     
A. The Company has adopted the ITT
Industries, Inc. 2003 Equity Incentive Plan (the
“Plan”) (the terms of which are hereby
incorporated by reference and made part of this Agreement).

     
B. The Committee appointed to administer the
Plan has determined that it would be to the advantage and best
interest of the Company and its shareholders to award Restricted
Stock Units to Holder as an inducement for Holder to enter into
and remain in the service of the Company and as an incentive for
increased efforts during such service, and has advised the
Company thereof and instructed the undersigned officer(s) to
award such Restricted Stock Units to Holder, subject to the
restrictions and conditions contained in this Agreement.

AGREEMENTS

     
In consideration of services to be rendered to
the Company and the other mutual covenants and agreements herein
contained and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, and intending
to be legally bound hereby, the parties hereto agree as follows:

     
1. Definitions. As used in this
Agreement, the following terms shall have the following
definitions ascribed to them:

		
	 	     
    (a) “Cause” shall have the
    meaning ascribed to such term in Section 11(a) of the
    Employment Agreement.
    
	 
	 	     
    (b) “Disability” shall have
    the meaning ascribed to such term in Section 11(b) of the
    Employment Agreement.
    
	 
	 	     
    (c) “Employment Agreement”
    shall mean the Employment Agreement between the Company and
    Holder, dated the date hereof.
    
	 
	 	     
    (d) “Good Reason” shall
    have the meaning ascribed to such term in Section 11(c) of
    the Employment Agreement.
    
	 
	 	     
    (e) “Qualifying
    Termination” shall mean Holder’s Termination of
    Employment due to Holder’s death or Disability, by the
    Company without Cause or by Holder with Good Reason.
    
	 
	 	     
    (f) “Termination of
    Employment” shall mean the time when the
    employee-employer relationship between Holder and the Company
    and its Affiliates is terminated for any reason, including a
    Qualifying Termination.
    

     
2. Grant of Restricted Stock Units.
Subject to the terms and conditions of the Plan and this
Agreement, the Company hereby credits 125,000 Restricted Stock
Units (“Units”) to a separate account
maintained for Holder on the books of the Company (the
“Account”). On any date, the value of each Unit
shall equal the Fair Market Value of one share of the common
stock of the Company, par value $1.00 per share (a
“Share”).

 

     
3. Vesting.

		
	 	     
    (a) Subject to the accelerated vesting
    provisions set forth in Section 3(b) below, the Units shall
    vest, on a cumulative basis, with respect to one third (1/3) of
    the Units on each of the third, fourth, and sixth anniversaries
    of the Grant Date, so as to be 100% vested on the sixth
    anniversary thereof (each such date, a “Vesting
    Date”); provided that Holder is employed by the
    Company or an Affiliate of the Company on each such Vesting Date.
    
	 
	 	     
    (b) Notwithstanding the foregoing, the Units
    shall vest as to:
    

		
	 	     
    (i) 100% of the then unvested Units in
    Holder’s Account upon a Qualifying Termination; or
    
	 
	 	     
    (ii) 100% of the then unvested Units in
    Holder’s Account upon the occurrence of an Acceleration
    Event.
    

		
	 	
    If Holder incurs a Termination of Employment for
    any reason other than due to a Qualifying Termination, all Units
    which have not vested at the time of such termination shall be
    automatically forfeited. If Holder incurs a Termination of
    Employment by the Company for Cause for any of the grounds
    described in clauses (ii), (iv) and (v) of
    Section 11(a) of the Employment Agreement, any vested Units
    that have not been settled prior to the date of such Termination
    of Employment shall also be automatically forfeited.
    

     
4. Settlement. One half (1/2) of the
Units vesting on each Vesting Date shall be settled (and, upon
such settlement, cease to be credited to Holder’s Account)
upon such Vesting Date and the other one half (1/2) of the Units
vesting on such Vesting Date shall be settled (and, upon such
settlement, cease to be credited to Holder’s Account)
within ten (10) days of Holder’s Termination of Employment,
in either case by the issuance to Holder of one Share per vested
Unit.

     
5. Dividends. If on any date the
Company pays any dividend with respect to Shares (the
“Payment Date”), then the number of Units
credited to Holder’s Account shall on the Payment Date be
increased by that number of Units equal to: (a) the product
of (i) the number of Units in Holder’s Account as of
the Payment Date and (ii) the per Share cash amount of such
dividend (or, in the case of a dividend payable in Shares or in
property other than cash, the per share equivalent cash value of
such dividend, as determined in good faith by the Committee),
divided by (b) the Fair Market Value of a Share on the Payment
Date. Each additional Unit, or fraction thereof, credited to
Holder’s Account in accordance with the preceding sentence
shall vest and be settled at the same time as the original Units
to which they are attributable.

     
6. Restrictions. The Units granted
hereunder may not be sold, pledged or otherwise transferred
(other than by will or the laws of descent and distribution) and
may not be subject to lien, garnishment, attachment or other
legal process. Holder acknowledges and agrees that, with respect
to each Unit credited to his Account, Holder has no voting
rights with respect to the Company unless and until such Unit is
settled for a Share.

     
7. Taxation. Upon the vesting of any
Units, Holder shall be required to pay to the Company by check
the amount of any employment tax withholding that the Company
determines is required. Upon the settlement of vested Units in
Shares, Holder shall be required as a condition of such
settlement to pay to the Company by check the amount of any
income tax withholding that the Company determines is required;
provided, that, with the prior written consent of the
Committee, Holder may elect to satisfy such income tax
withholding tax obligation by having the Company withhold from
the settlement that number of Shares having a Fair Market Value
equal to the amount of such withholding; provided,
further, that the number of Shares that may be so withheld
by the Company shall be limited to that number of Shares having
an aggregate Fair Market Value on the date of such withholding
equal to the aggregate amount of Holder’s Federal and state
income tax liabilities based upon the applicable minimum
statutory withholding rates for Federal and state income tax
purposes.

     
8. No Effect on Employment. Neither
this Agreement nor the Units granted hereunder shall confer upon
Holder any right to, or impose upon Holder any obligation of,
continued employment with the Company and shall not in any way
modify or restrict any right the Company may otherwise have to
terminate such employment.

2

 

     
9. Notices. Any notice hereunder to
any party shall be effective upon receipt (or refusal of
receipt) and shall be in writing and delivered personally or
sent by telecopy, or certified or registered mail, postage
prepaid, as follows:

		
	 	     
    (a) If to the Company:
    

               
 ITT Industries, Inc. 

 4 West Red Oak Lane 

 White Plains, NY 10604 

 Attn: General Counsel

		
	 	     
    (b) If to Holder, in accordance with the
    notice provisions of the Employment Agreement
    

     
or at any other address as any party shall have
specified by notice in writing to the other party.

     
10. Miscellaneous.

		
	 	     
    (a) All amounts credited to Holder’s
    Account under this Agreement shall continue for all purposes to
    be a part of the general assets of the Company. Holder’s
    interest in the Account shall make Holder only a general,
    unsecured creditor of the Company.
    
	 
	 	     
    (b) This Agreement, together with the Plan,
    constitutes the entire agreement of the parties with respect to
    the subject matter hereof and may not be modified or amended
    except by a written agreement signed by the Company and Holder.
    In the event that any provision of this Agreement shall conflict
    with any provision of the Plan, the provision of this Agreement
    shall control, except to the extent that the same would violate
    applicable law.
    
	 
	 	     
    (c) Capitalized terms not defined herein
    shall have the meaning ascribed to such terms in the Plan.
    
	 
	 	     
    (d) In the event of any corporate event or
    transaction described in Section 4.2 of the Plan, the Units
    shall be adjusted in order to prevent any dilution of the
    benefits to Holder. The Units shall be subject to adjustment in
    accordance with Section 13.2 of the Plan.
    
	 
	 	     
    (e) No waiver of any breach or default
    hereunder shall be considered valid unless in writing, and no
    such waiver shall be deemed a waiver of any subsequent breach or
    default of the same or similar nature.
    
	 
	 	     
    (f) Except as otherwise expressly provided
    herein, this Agreement shall be binding upon and inure to the
    benefit of the Company and its successors and assigns and Holder
    and Holder’s heirs and personal representatives.
    
	 
	 	     
    (g) If any provision of this Agreement shall
    be invalid or unenforceable, such invalidity or unenforceability
    shall attach only to such provision and shall not in any manner
    affect or render invalid or unenforceable any other severable
    provision of this Agreement, and this Agreement shall be carried
    out as if any such invalid or unenforceable provision were not
    contained herein.
    
	 
	 	     
    (h) The section headings contained herein
    are for the purposes of convenience only and are not intended to
    define or limit the contents of said sections. Except as may
    otherwise be expressly provided, all references herein to
    “Section” or “Sections” shall mean the
    applicable section or sections of this Agreement.
    
	 
	 	     
    (i) Words in the singular shall be read and
    construed as though in the plural and words in the plural shall
    be read and construed as though in the singular in all cases
    where they would so apply.
    
	 
	 	     
    (j) This Agreement may be executed in one or
    more counterparts, all of which taken together shall be deemed
    one original.
    
	 
	 	     
    (k) This Agreement shall be deemed to be a
    contract under the laws of the State of New York and for all
    purposes shall be construed and enforced in accordance with the
    internal laws of said State without regard to the principles of
    conflicts of law. In the event of any dispute under this
    Agreement, such dispute shall be deemed a dispute under the
    Employment Agreement and shall be subject to all of the terms
    and conditions of the Employment Agreement.
    

3

 

     
IN WITNESS WHEREOF,
the parties have executed this Agreement on the date and year
first above written.

		
	 	
    ITT INDUSTRIES, INC.
    

			
	 	By: 	
    /s/ SCOTT A. CRUM
    

		
	 	
    

	 	
    Scott A. Crum
    
	 	
    Senior Vice President and Director,
    
	 	
    Human Resources
    
	 
	 	
    HOLDER
    
	 
	 	
    /s/ STEVEN R. LORANGER
    
	 	
    

	 	
    Steven R. Loranger
    

4<PAGE>

                                                                    EXHIBIT 10.1

                          MEDIUM-TERM CREDIT AGREEMENT

            AGREEMENT dated as of June 28, 2002, among THE CHUBB CORPORATION,
the BANKS listed on the signature pages hereof, DEUTSCHE BANK SECURITIES INC.
and SALOMON SMITH BARNEY INC., as Arrangers, DEUTSCHE BANK AG NEW YORK BRANCH,
as Administrative Agent and CITIBANK, N.A., as Syndication Agent.

                      The parties hereto agree as follows:

                                    ARTICLE I

                                   Definitions

            SECTION 1.01. Definitions. The following terms, as used herein, have
the following meanings:

            "Absolute Rate Auction" means a solicitation of Money Market Quotes
setting forth Money Market Absolute Rates pursuant to Section 2.03.

            "Adjusted CD Rate" has the meaning set forth in Section 2.07(b).

            "Adjusted Consolidated Net Worth" means at any date the
shareholders' equity of the Borrower and its Consolidated Subsidiaries
determined as of such date, adjusted to exclude the effect of Statement of
Financial Accounting Standards No. 115 (by excluding any unrealized appreciation
or depreciation of fixed maturity investments, net of any related adjustments
and any related deferred income taxes).

            "Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Agent and submitted to
the Agent (with a copy to the Borrower) duly completed by such Bank.

            "Agent" means Deutsche Bank AG New York Branch, in its capacity as
administrative agent for the Banks hereunder, and its successors in such
capacity.

<PAGE>

            "Alternative Currency" means any currency other than Dollars which
is freely transferable and convertible into Dollars.

            "Applicable Lending Office" means, with respect to any Bank, (i) in
the case of its Domestic Loans, its Domestic Lending Office, (ii) in the case of
its Euro- Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case of
its Money Market Loans, its Money Market Lending Office.

            "Arrangers" means Deutsche Bank Securities Inc. and Salomon Smith
Barney Inc. in their capacities as joint lead arrangers and joint lead
bookrunners for the Banks hereunder, and their successors in such capacities.

            "Assessment Rate" has the meaning set forth in Section 2.07(b).

            "Assignee" has the meaning set forth in Section 9.06(c).

            "Bank" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 9.06(c), and their respective
successors.

            "Base Rate" means, for any day, a rate per annum equal to the higher
of (i) the Prime Rate for such day and (ii) the sum of 1% plus the Federal Funds
Rate for such day.

            "Base Rate Loan" means (i) a Committed Loan which bears interest at
the Base Rate pursuant to the applicable Notice of Committed Borrowing or Notice
of Interest Rate Election or the provisions of Article VIII or (ii) an overdue
amount which was a Base Rate Loan immediately before it became overdue.

            "Benefit Arrangement" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a Multi
employer Plan and which is maintained or otherwise contributed to by any member
of the ERISA Group.

            "Borrower" means The Chubb Corporation, a New Jersey corporation,
and its successors.

            "Borrower's 2001 Form 10-K" means the Borrower's annual report on
Form 10K for 2001, as filed with the Securities and Exchange Commission pursuant
to the Securities Exchange Act of 1934.

<PAGE>

            "Borrowing" has the meaning set forth in Section 1.03.

            3 "CD Base Rate" has the meaning set forth in Section 2.07(b).

            "CD Loan" means (i) a Committed Loan which bears interest at a CD
Rate pursuant to the applicable Notice of Committed Borrowing or Notice of
Interest Rate Election or (ii) an overdue amount which was a CD Loan immediately
before it became overdue.

            "CD Margin" has the meaning set forth in Section 2.07(b).

            "CD Rate" means a rate of interest determined pursuant to Section
2.07(b) on the basis of an Adjusted CD Rate.

            "CD Reference Banks" means Citibank, N.A., and Deutsche Bank AG New
York Branch.

            "Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the signature pages hereof, as such amount may
be reduced from time to time pursuant to Sections 2.09, 2.10, 6.01 and 9.06.

            "Committed Loan" means a loan made by a Bank pursuant to Section
2.01; provided that, if any such loan or loans (or portions thereof) are
combined or subdivided pursuant to a Notice of Interest Rate Election, the term
"Committed Loan" shall refer to the combined principal amount resulting from
such combination or to each of the separate principal amounts resulting from
such subdivision, as the case may be.

            "Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the Borrower in
its consolidated financial statements if such statements were prepared as of
such date.

            "Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay

                                       3
<PAGE>

the deferred purchase price of property or services, except trade accounts
payable arising in the ordinary course of business, (iv) all obligations of such
Person as lessee which are capitalized in accordance with generally accepted
accounting principles, (v) all Debt of others secured by a Lien on any asset of
such Person, whether or not such Debt is assumed by such Person, and (vi) all
Debt of others Guaranteed by such Person.

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

            "Dollar Amount" means, in relation to any Money Market Borrowing
denominated in an Alternative Currency, the amount designated by the Borrower as
the Dollar amount of such Money Market Borrowing in the related Notice of Money
Market Borrowing, subject to Section 2.03(h).

            "Dollars" and the sign "$" mean lawful money of the United States of
America.

            "Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized by law to
close.

            "Domestic Lending Office", means as to each Bank, its office located
at its address set forth in its Administrative Questionnaire (or identified in
its Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Agent; provided that any Bank may so designate
separate Domestic Lending Offices for its Base Rate Loans, on the one hand, and
its CD Loans, on the other hand, in which case all references herein to the
Domestic Lending Office of such Bank shall be deemed to refer to either or both
of such offices, as the context may require.

            "Domestic Loans" means CD Loans or Base Rate Loans or both.

            "Domestic Reserve Percentage" has the meaning set forth in Section
2.07(b).

            "Effective Date" means the date this Agreement becomes effective in
accordance with Section 3.01.

                                        4
<PAGE>

            "Equivalent Amount" means, in connection with the determination of
the amount of a Money Market Loan to be made or theretofore made in any
Alternative Currency in relation to the Dollar Amount of such Loan, the amount
of such Alternative Currency converted from such Dollar Amount at the spot
buying rate of the Bank that is to make or has made such Loan (based on the
London interbank market rate then prevailing) for Dollars against such
Alternative Currency as of approximately 9:00 A.M. (New York City time) three
Euro-Dollar Business Days before the date on which such Loan is to be made or
the date on which the Equivalent Amount thereof is to be determined, as the case
may be.

            "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, or any successor statute.

            "ERISA Group" means the Borrower and all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
under common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Internal Revenue Code.

            "Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
Dollar deposits) in London, and, where funds are to be paid or made available in
an Alternative Currency, on which commercial banks are open for domestic and
international business (including dealings in deposits in such Alternative
Currency) in both London and the place where such funds are paid or made
available.

            "Euro-Dollar Lending Office" means, as to each Bank, its office,
branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its Euro-
Dollar Lending Office) or such other office, branch or affiliate of such Bank as
it may hereafter designate as its Euro-Dollar Lending Office by notice to the
Borrower and the Agent.

            "Euro-Dollar Loan" means (i) a Committed Loan which bears interest
at a Euro-Dollar Rate pursuant to the applicable Notice of Committed Borrowing
or Notice of Interest Rate Election or (ii) an overdue amount which was a
Euro-Dollar Loan immediately before it became overdue.

                                       5
<PAGE>

            "Euro-Dollar Margin" has the meaning set forth in Section 2.07(c).

            "Euro-Dollar Rate" means a rate of interest determined pursuant to
Section 2.07(c) on the basis of a London Interbank Offered Rate.

            "Euro-Dollar Reference Banks" means Citibank, N.A. and Deutsche Bank
AG.

            "Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion Dollars in
respect of "Euro-currency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents).

            "Event of Default" has the meaning set forth in Section 6.01.

            "Existing Credit Agreement" means the Medium-Term Credit Agreement
dated as of July 11, 1997, as amended as of July 8, 1998, and as of July 7,
1999, among the Borrower, certain banks and Deutsche Bank AG and Citibank, N.A.,
as co-agents for such banks, and Deutsche Bank AG, as Administrative Agent for
such banks.

            "Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business

                                       6
<PAGE>

Day, the Federal Funds Rate for such day shall be the average rate quoted to
Deutsche Bank AG New York Branch on such day on such transactions as determined
by the Agent.

            "Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or Money
Market Loans (excluding Money Market LIBOR Loans bearing interest at the Prime
Rate pursuant to Section 8.01(a)) or any combination of the foregoing.

            "Group of Loans" means at any time a group of Loans consisting of
(i) all Committed Loans which are Base Rate Loans at such time or (ii) all
Committed Loans which are Fixed Rate Loans of the same type having the same
Interest Period at such time; provided that, if a Committed Loan of any
particular Bank is converted to or made as a Base Rate Loan pursuant to Section
8.02 or 8.04, such Loan shall be included in the same Group or Groups of Loans
from time to time as it would have been in if it had not been so converted or
made.

            "Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt (whether arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to take-or-pay, or
to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Debt of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part), provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.

            "Interest Period" means: (1) with respect to each Euro-Dollar Loan,
a period commencing on the date of borrowing specified in the applicable Notice
of Borrowing or on the date specified in the applicable Notice of Interest Rate
Election and ending one, two, three or six months thereafter, as the Borrower
may elect in the applicable notice; provided that:

                                       7
<PAGE>

            (a) with the consent of all Lenders (and otherwise in accordance
      with Section 9.05), the Interest Period may be extended for up to one year
      from the date of borrowing specified in the applicable Notice of Borrowing
      or the date specified in the applicable Notice of Interest Rate Election;

            (b) any Interest Period which would otherwise end on a day which is
      not a Euro-Dollar Business Day shall be extended to the next succeeding
      Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
      another calendar month, in which case such Interest Period shall end on
      the next preceding Euro- Dollar Business Day;

            (c) any Interest Period which begins on the last Euro-Dollar
      Business Day of a calendar month (or on a day for which there is no
      numerically corresponding day in the calendar month at the end of such
      Interest Period) shall, subject to clause (d) below, end on the last
      Euro-Dollar Business Day of a calendar month; and

            (d) any Interest Period which would otherwise end after the
      Termination Date shall end on the Termination Date;

            (2) with respect to each CD Loan, a period commencing on the date of
borrowing specified in the applicable Notice of Borrowing or on the date
specified in the applicable Notice of Interest Rate Election and ending 30, 60,
90 or 180 days thereafter, as the Borrower may elect in the applicable notice;
provided that:

            (a) with the consent of all Lenders (and otherwise in accordance
      with Section 9.05), the Interest Period may be extended for up to one year
      from the date of borrowing specified in the applicable Notice of Borrowing
      or the date specified in the applicable Notice of Interest Rate Election;

            (b) any Interest Period which would otherwise end on a day which is
      not a Euro-Dollar Business Day shall, subject to clause (c) below, be
      extended to the next succeeding Euro-Dollar Business Day; and

            (c) any Interest Period which would otherwise end after the
      Termination Date shall end on the Termination Date;

                                       8
<PAGE>

            (3) with respect to each Base Rate Loan, a period commencing on the
date of borrowing specified in the applicable Notice of Borrowing or on the date
specified in the applicable Notice of Interest Rate Election and ending 30 days
thereafter; provided that:

            (a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall, subject to clause (b) below, be extended
to the next succeeding Euro-Dollar Business Day; and

            (b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date;

            (4) with respect to each Money Market LIBOR Loan, the period
commencing on the date of borrowing specified in the applicable Notice of
Borrowing and ending such whole number of months thereafter as the Borrower may
elect in accordance with Section 2.03; provided that:

            (a) any Interest Period which would otherwise end on a day which is
      not a Euro-Dollar Business Day shall be extended to the next succeeding
      Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
      another calendar month, in which case such Interest Period shall end on
      the next preceding Euro- Dollar Business Day;

            (b) any Interest Period which begins on the last Euro-Dollar
      Business Day of a calendar month (or on a day for which there is no
      numerically corresponding day in the calendar month at the end of such
      Interest Period) shall, subject to clause (c) below, end on the last
      Euro-Dollar Business Day of a calendar month; and

            (c) any Interest Period which would otherwise end after the
      Termination Date shall end on the Termination Date;

            (5) with respect to each Money Market Absolute Rate Loan, a period
commencing on the date of borrowing specified in the applicable Notice of
Borrowing and ending such number of days thereafter (but not less than 7 days)
as the Borrower may elect in accordance with Section 2.03; provided that:

                                       9
<PAGE>

            (a) any Interest Period which would otherwise end on a day which is
      not a Euro-Dollar Business Day shall, subject to clause (b) below, be
      extended to the next succeeding Euro-Dollar Business Day; and

            (b) any Interest Period which would otherwise end after the
      Termination Date shall end on the Termination Date.

            "Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.

            "Level I Pricing Period" means any period during which the
Borrower's public long-term senior unsecured Debt is rated AA+ or better by S&P
or Aa1 or better by Moody's; provided that, in the event of a split rating, the
higher rating will apply for purposes of determining the Pricing Level unless
the Pricing Level based on the higher rating is more than one Pricing Level
removed from that of the lower rating, in which case the Pricing Level will be
that which is the midpoint between (or, if there is no midpoint, the higher of
the two intermediate Pricing Levels between) the Pricing Levels determined by
the two ratings.

            "Level II Pricing Period" means any period (other than a Level I
Pricing Period) during which the Borrower's public long-term senior unsecured
Debt is rated AA or better by S&P or Aa2 or better by Moody's; provided that, in
the event of a split rating, the higher rating will apply for purposes of
determining the Pricing Level unless the Pricing Level based on the higher
rating is more than one Pricing Level removed from that of the lower rating, in
which case the Pricing Level will be that which is the midpoint between (or, if
there is no midpoint, the higher of the two intermediate Pricing Levels between)
the Pricing Levels determined by the two ratings.

            "Level III Pricing Period" means any period (other than a Level I
Pricing Period or a Level II Pricing Period) during which the Borrower's public
long-term senior unsecured Debt is rated AA- or better by S&P or Aa3 or better
by Moody's; provided that, in the event of a split rating, the higher rating
will apply for purposes of determining the Pricing Level unless the Pricing
Level based on the higher rating is more than one Pricing Level removed from
that of the lower rating, in which case the Pricing Level will be that which is
the midpoint between (or, if there is no midpoint, the higher of the two

                                       10
<PAGE>

intermediate Pricing Levels between) the Pricing Levels determined by the two
ratings.

            "Level IV Pricing Period" means any period (other than a Level I
Pricing Period, a Level II Pricing Period or a Level III Pricing Period) during
which the Borrower's public long-term senior unsecured Debt is rated A+ or
better by S&P or A1 or better by Moody's; provided that, in the event of a split
rating, the higher rating will apply for purposes of determining the Pricing
Level unless the Pricing Level based on the higher rating is more than one
Pricing Level removed from that of the lower rating, in which case the Pricing
Level will be that which is the midpoint between (or, if there is no midpoint,
the higher of the two intermediate Pricing Levels between) the Pricing Levels
determined by the two ratings.

            "Level V Pricing Period" means any period (other than a Level I
Pricing Period, a Level II Pricing Period, a Level III Pricing Period or a Level
IV Pricing Period) during which the Borrower's public long-term senior unsecured
Debt is rated A or better by S&P or A2 or better by Moody's; provided that, in
the event of a split rating, the higher rating will apply for purposes of
determining the Pricing Level unless the Pricing Level based on the higher
rating is more than one Pricing Level removed from that of the lower rating, in
which case the Pricing Level will be that which is the midpoint between (or, if
there is no midpoint, the higher of the two intermediate Pricing Levels between)
the Pricing Levels determined by the two ratings.

            "Level VI Pricing Period" means any period (other than a Level I
Pricing Period, a Level II Pricing Period, a Level III Pricing Period, a Level
IV Pricing Period or a Level V Pricing Period) during which the Borrower's
public long-term senior unsecured Debt is rated A- or better by S&P or A3 or
better by Moody's; provided that, in the event of a split rating, the higher
rating will apply for purposes of determining the Pricing Level unless the
Pricing Level based on the higher rating is more than one Pricing Level removed
from that of the lower rating, in which case the Pricing Level will be that
which is the midpoint between (or, if there is no midpoint, the higher of the
two intermediate Pricing Levels between) the Pricing Levels determined by the
two ratings.

                                       11
<PAGE>

            "Level VII Pricing Period" means any period that is not a Level I
Pricing Period, a Level II Pricing Period, a Level III Pricing Period, a Level
IV Pricing Period, a Level V Pricing Period or a Level VI Pricing Period.

            "LIBOR Auction" means a solicitation of Money Market Quotes setting
forth Money Market Margins based on the London Interbank Offered Rate pursuant
to Section 2.03.

            "Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, the Borrower or any Subsidiary shall be
deemed to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such asset.

            "Loan" means a Domestic Loan or a Euro-Dollar Loan or a Money Market
Loan and "Loans" means Domestic Loans or Euro-Dollar Loans or Money Market Loans
or any combination of the foregoing.

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

            "Material Debt" means Debt (other than the Notes) of the Borrower
and/or one or more of its Significant Subsidiaries (other than a Real Estate
Subsidiary), arising in one or more related or unrelated transactions, in an
aggregate principal amount exceeding $50,000,000.

            "Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $50,000,000.

            "Money Market Absolute Rate" has the meaning set forth in Section
2.03(d).

            "Money Market Absolute Rate Loan" means a loan to be made by a Bank
pursuant to an Absolute Rate Auction.

            "Money Market Lending Office" means, as to each Bank, its Domestic
Lending Office or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Money Market Lending office by notice to the Borrower
and the Agent; provided that any Bank may from

                                       12
<PAGE>

time to time by notice to the Borrower and the Agent designate separate Money
Market Lending Offices for its Money Market LIBOR Loans, on the one hand, and
its Money Market Absolute Rate Loans, on the other hand, in which case all
references herein to the Money Market Lending Office of such Bank shall be
deemed to refer to either or both of such offices, as the context may require.

            "Money Market LIBOR Loan" means a loan to be made by a Bank pursuant
to a LIBOR Auction (including such a loan bearing interest at the Prime Rate
pursuant to Section 8.01(a)).

            "Money Market Loan" means a Money Market LIBOR Loan or a Money
Market Absolute Rate Loan.

            "Money Market Margin" has the meaning set forth in Section 2.03(d).

            "Money Market Quote" means an offer by a Bank to make a Money Market
Loan in accordance with Section 2.03.

            "Moody's" means Moody's Investors Service, Inc., and its successors.

            "Multiemployer Plan" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.

            "Notes" means promissory notes of the Borrower, substantially in the
form of Exhibit A hereto, evidencing the obligation of the Borrower to repay the
Loans, and "Note" means any one of such promissory notes issued hereunder.

            "Notice of Borrowing" means a Notice of Committed Borrowing (as
defined in Section 2.02) or a Notice of Money Market Borrowing (as defined in
Section 2.03(f)).

            "Notice of Interest Rate Election" has the meaning set forth in
Section 2.15.

                                       13
<PAGE>

            "Other Credit Agreement" means the Short-Term Credit Agreement dated
as of the date hereof among the parties hereto as amended from time to time.

            "Parent" means, with respect to any Bank, any Person controlling
such Bank.

            "Participant" has the meaning set forth in Section 9.06(b).

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

            "Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.

            "Plan" means at any time an employee pension benefit plan (other
than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.

            "Pricing Period" means a Level I Pricing Period, a Level II Pricing
Period, a Level III Pricing Period, a Level IV Pricing Period, a Level V Pricing
Period, a Level VI Pricing Period or a Level VII Pricing Period.

            "Prime Rate" means the rate of interest publicly announced by
Deutsche Bank AG New York Branch in New York City from time to time as its Prime
Rate.

            "Real Estate Subsidiaries" means (i) Bellemead Development
Corporation and its current Subsidiaries and (ii) each other Subsidiary that is
principally engaged in the real estate business.

            "Reference Banks" means the CD Reference Banks or the Euro-Dollar
Reference Banks, as the context may

                                       14
<PAGE>

require, and "Reference Bank" means any one of such Reference Banks.

            "Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.

            "Required Banks" means at any time Banks having more than 50% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing more than 50% of the aggregate unpaid
principal amount of the Loans.

            "Revolving Credit Period" means the period from and including the
Effective Date to and including the Termination Date.

            "S&P" means Standard & Poor's Rating Service.

            "Significant Subsidiary" means at any time a "significant
subsidiary" of the Borrower, within the meaning of Regulation S-X promulgated by
the Securities and Exchange Commission, as such Regulation is in effect from
time to time; provided that, if the Borrower notifies the Agent that the
Borrower wishes to amend this Agreement to eliminate the effect of any change of
such Regulation (or if the Agent notifies the Borrower that the Required Banks
wish to amend this Agreement for such purpose), then, for purposes of
determining the Borrower's compliance with this Agreement, "Significant
Subsidiaries" of the Borrower shall be determined on the basis of such
Regulation as in effect immediately before the relevant change thereto, until
either such notice is withdrawn or this Agreement is amended in a manner
satisfactory to the Borrower and the Required Banks.

            "Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by the Borrower.

            "Termination Date" means June 28, 2007, or, if such day is not a
Euro-Dollar Business Day, the next succeeding Euro-Dollar Business Day unless
such Euro-Dollar Business Day falls in another calendar month, in which case

                                       15
<PAGE>

the Termination Date shall be the next preceding Euro- Dollar Business Day.

            "Unfunded Liabilities" means, with respect to any Plan at any time,
the amount (if any) by which (i) the present value of all benefits under such
Plan exceeds (ii) the fair market value of all Plan assets allocable to such
benefits (excluding any accrued but unpaid contributions), all determined as of
the then most recent valuation date for such Plan, but only to the extent that
such excess represents a potential liability of a member of the ERISA Group to
the PBGC or any other Person under Title IV of ERISA.

            "Utilization Percentage" means, with respect to any calendar
quarter, a fraction, expressed as a percentage, of which (i) the numerator is
the daily average aggregate principal amount of Loans outstanding under this
Agreement and "Loans" (as defined in the Other Credit Agreement) outstanding
under the Other Credit Agreement, in each case during such calendar quarter and
(ii) the denominator is the daily average aggregate amount of Commitments in
effect under this Agreement and "Commitments" (as defined in the Other Credit
Agreement) in effect under the Other Credit Agreement, in each case during such
calendar quarter; provided that if it is necessary to determine the Utilization
Percentage with respect to a calendar quarter prior to the end of such calendar
quarter, then the Utilization Percentage shall be determined based upon the
daily average aggregate principal amount of Loans outstanding and Commitments in
effect during the elapsed portion of such calendar quarter, in each case under
this Agreement and the Other Credit Agreement.

            "Wholly Owned Consolidated Subsidiary" means any Consolidated
Subsidiary all of the shares of capital stock or other ownership interests of
which (except directors' qualifying shares) are at the time directly or
indirectly owned by the Borrower.

            SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time,

                                       16
<PAGE>

applied on a basis consistent (except for changes concurred in by the Borrower's
independent public accountants) with the most recent audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to the Banks; provided that, if the Borrower notifies the Agent that the
Borrower wishes to amend any covenant in Article V to eliminate the effect of
any change in generally accepted accounting principles on the operation of such
covenant (or if the Agent notifies the Borrower that the Required Banks wish to
amend Article V for such purpose), then the Borrower's compliance with such
covenant shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Required Banks.

            SECTION 1.03. Types of Borrowings. The term "Borrowing" denotes the
aggregation of Loans of one or more Banks to be made to the Borrower pursuant to
Article II on the same date, all of which Loans are of the same type (subject to
Article VIII) and, except in the case of Base Rate Loans, have the same Interest
Period or initial Interest Period. Borrowings are classified for purposes of
this Agreement either by reference to the pricing of Loans comprising such
Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing comprised of
Euro-Dollar Loans) or by reference to the provisions of Article II under which
participation therein is determined (i.e., a "Committed Borrowing" is a
Borrowing under Section 2.01 in which all Banks participate in proportion to
their Commitments, while a "Money Market Borrowing" is a Borrowing under Section
2.03 in which the Bank participants are determined on the basis of their bids in
accordance therewith).

                                   ARTICLE II

                                   The Credits

            SECTION 2.01. Commitments to Lend. During the Revolving Credit
Period each Bank severally agrees, on the terms and conditions set forth in this
Agreement, to make loans to the Borrower pursuant to this Section from time to
time in amounts such that the aggregate principal amount of Committed Loans by
such Bank at any one time outstanding shall not exceed the amount of its
Commitment. Each

                                       17
<PAGE>

Borrowing under this Section shall be in an aggregate principal amount of
$10,000,000 or any larger amount that is a multiple of $1,000,000; provided,
that any Borrowing under this Section may be in the aggregate amount available
in accordance with Section 3.02(b). Each Borrowing under this Section shall be
made from the several Banks ratably in proportion to their respective
Commitments. Within the foregoing limits, the Borrower may borrow under this
Section, repay, or to the extent permitted by Section 2.11, prepay Loans and
reborrow at any time during the Revolving Credit Period under this Section.

            SECTION 2.02. Notice of Committed. Borrowings. The Borrower shall
give the Agent notice (a "Notice of Committed Borrowing") not later than 10:00
A.M. (New York City time) on (x) the date of each Base Rate Borrowing, (y) the
second Domestic Business Day before each CD Borrowing and (z) the third
Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:

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

            (b) the aggregate amount of such Borrowing,

            (c) whether the Loans comprising such Borrowing are to be CD Loans,
      Base Rate Loans or Euro-Dollar Loans, and

            (d) in the case of a Fixed Rate Borrowing, the duration of the
      Interest Period applicable thereto, subject to the provisions of the
      definition of Interest Period.

            SECTION 2.03. Money Market Borrowings. (a) The Money Market Option.
In addition to Committed Borrowings pursuant to Section 2.01, the Borrower may,
as set forth in this Section, request the Banks during the Revolving Credit
Period to make offers to make Money Market Loans to the Borrower. The Banks may,
but shall have no obligation to, make such offers and the Borrower may, but
shall have no obligation to, accept any such offers in the manner set forth in
this Section.

            (b) Money Market Quote Request. When the Borrower wishes to request
offers to make Money Market

                                       18
<PAGE>

Loans under this Section, it shall transmit to the Agent by telex or facsimile
transmission a Money Market Quote Request substantially in the form of Exhibit B
hereto so as to be received no later than 10:00 A.M. (New York City time) on (x)
the fifth Euro-Dollar Business Day prior to the date of Borrowing proposed
therein, in the case of a LIBOR Auction for Money Market Loans to be made in
Dollars, or (y) the Domestic Business Day next preceding the date of Borrowing
proposed therein, in the case of an Absolute Rate Auction for Money Market Loans
to be made in Dollars or (z) the sixth Euro-Dollar Business Day prior to the
date of Borrowing proposed therein, in the case of a LIBOR Auction or Absolute
Rate Auction for Money Market Loans to be made in an Alternative Currency in
accordance with subsection (h) of this Section (or, in any case, such other time
or date as the Borrower and the Agent shall have mutually agreed and shall have
notified to the Banks not later than the date of the Money Market Quote Request
for the first LIBOR Auction or Absolute Rate Auction for which such change is to
be effective) specifying:

            (i) the proposed date of Borrowing, which shall be a Euro-Dollar
      Business Day in the case of a LIBOR Auction or a Domestic Business Day in
      the case of an Absolute Rate Auction (unless such Absolute Rate Auction
      relates to Money Market Loans to be made in an Alternative Currency, in
      which case a Euro-Dollar Business Day),

            (ii) the aggregate amount of such Borrowing (expressed in Dollars),
      which shall be $10,000,000 or a larger multiple of $1,000,000,

            (iii) the currency in which the proposed Borrowing is to be made,
      which shall be Dollars or, subject to subsection (h) of this Section, an
      Alternative Currency,

            (iv) the duration of the Interest Period applicable thereto, subject
      to the provisions of the definition of Interest Period, and

            (v) whether the Money Market Quotes requested are to set forth a
      Money Market Margin or a Money Market Absolute Rate.

The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market

                                       19
<PAGE>

Quote Request. No Money Market Quote Request shall be given within five
Euro-Dollar Business Days (or such other number of days as the Borrower and the
Agent may agree) of any other Money Market Quote Request.

            (c) Invitation for Money Market Quotes. Promptly upon receipt of a
Money Market Quote Request, the Agent shall send to the Banks by telex or
facsimile transmission an Invitation for Money Market Quotes substantially in
the form of Exhibit C hereto, which shall constitute an invitation by the
Borrower to each Bank to submit Money Market Quotes offering to make the Money
Market Loans to which such Money Market Quote Request relates in accordance with
this Section.

            (d) Submission and Contents of Money Market Quotes. (i) Each Bank
may submit a Money Market Quote containing an offer or offers to make Money
Market Loans in response to any Invitation for Money Market Quotes. Each Money
Market Quote must comply with the requirements of this subsection (d) and must
be submitted to the Agent by telex or facsimile transmission at its offices
specified in or pursuant to Section 9.01 not later than (x) 2:00 p.m. (New York
City time) on the fourth Euro-Dollar Business Day prior to the proposed date of
Borrowing, in the case of a LIBOR Auction for Money Market Loans to be made in
Dollars, (y) 9:00 A.M. (New York City time) on the proposed date of Borrowing,
in the case of an Absolute Rate Auction for Money Market Loans to be made in
Dollars or (z) 2:00 p.m. (New York City time) on the sixth Euro-Dollar Business
Day prior to the proposed date of Borrowing, in the case of a LIBOR Auction or
Absolute Rate Auction for Money Market Loans to be made in an Alternative
Currency (or, in any case, such other time or date as the Borrower and the Agent
shall have mutually agreed and shall have notified to the Banks not later than
the date of the Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be effective); provided that
Money Market Quotes submitted by the Agent (or any affiliate of the Agent) in
the capacity of a Bank may be submitted, and may only be submitted, if the Agent
or such affiliate notifies the Borrower of the terms of the offer or offers
contained therein not later than (x) one hour prior to the deadline for the
other Banks, in the case of a LIBOR Auction or (y) 15 minutes prior to the
deadline for the other Banks, in the case of an Absolute Rate Auction. Subject
to Articles III and VI, any Money Market Quote so

                                       20
<PAGE>

made shall be irrevocable except with the written consent of the Agent given on
the instructions of the Borrower.

            (ii) Each Money Market Quote shall be in substantially the form of
      Exhibit D hereto and shall in any case specify:

            (A) the proposed date of Borrowing,

            (B) the principal amount of the Money Market Loan for which each
      such offer is being made (expressed in Dollars), which principal amount
      (w) may be greater than or less than the Commitment of the quoting Bank,
      (x) must be $1,000,000 or a larger multiple of $1,000,000, (y) may not
      exceed the principal amount of Money Market Loans for which offers were
      requested and (z) may be subject to an aggregate limitation as to the
      principal amount of Money Market Loans for which offers being made by such
      quoting Bank may be accepted,

            (C) the currency of the Money Market Loan for which each such offer
      is being made,

            (D) in the case of a LIBOR Auction, the margin above or below the
      applicable London Interbank Offered Rate (the "Money Market Margin")
      offered for each such Money Market Loan, expressed as a percentage
      (specified to the nearest 1/10,000th of 1%) to be added to or subtracted
      from such base rate,

            (E) in the case of an Absolute Rate Auction, the rate of interest
      per annum (specified to the nearest 1/10,000th of 1%) (the "Money Market
      Absolute Rate") offered for each such Money Market Loan, and

            (F) the identity of the quoting Bank. A Money Market Quote may set
      forth up to five separate offers by the quoting Bank with respect to each
      Interest Period specified in the related Invitation for Money Market
      Quotes.

            (iii) Any Money Market Quote shall be disregarded if it:

            (A) is not substantially in conformity with Exhibit D hereto or does
      not specify all of the information required by subsection (d)(ii);

                                       21
<PAGE>

            (B) contains qualifying, conditional or similar language;

            (C) proposes terms other than or in addition to those set forth in
      the applicable Invitation for Money Market Quotes; or

            (D) arrives after the time set forth in subsection (d)(i).

            (e) Notice to Borrower. The Agent shall promptly notify the Borrower
of the terms (x) of any Money Market Quote submitted by a Bank that is in
accordance with subsection (d) and (y) of any Money Market Quote that amends,
modifies or is otherwise inconsistent with a previous Money Market Quote
submitted by such Bank with respect to the same Money Market Quote Request. Any
such subsequent Money Market Quote shall be disregarded by the Agent unless such
subsequent Money Market Quote is submitted solely to correct a manifest error in
such former Money Market Quote. The Agent's notice to the Borrower shall specify
(A) the aggregate principal amount of Money Market Loans for which offers have
been received for each Interest Period specified in the related Money Market
Quote Request, (B) the respective principal amounts and Money Market Margins or
Money Market Absolute Rates, as the case may be, so offered and (C) if
applicable, limitations on the aggregate principal amount of Money Market Loans
for which offers in any single Money Market Quote may be accepted.

            (f) Acceptance and Notice by Borrower. Not later than 10:00 A.M.
(New York City time) on (x) the third Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction for Money Market
Loans to be made in Dollars, (y) the proposed date of Borrowing, in the case of
an Absolute Rate Auction for Money Market Loans to be made in Dollars or (z) the
fifth Euro-Dollar Business Day prior to the proposed date of Borrowing, in the
case of a LIBOR Auction or Absolute Rate Auction for Money Market Loans to be
made in an Alternative Currency (or, in any case, such other time or date as the
Borrower and the Agent shall have mutually agreed and shall have notified to the
Banks not later than the date of the Money Market Quote Request for the first
LIBOR Auction or Absolute Rate Auction for which such change is to be
effective), the Borrower shall notify the Agent of its

                                       22
<PAGE>

acceptance or non-acceptance of the offers so notified to it pursuant to
subsection (e). In the case of acceptance, such notice (a "Notice of Money
Market Borrowing") shall specify the aggregate principal amount of offers for
each Interest Period that are accepted, expressed in Dollars. The Borrower may
accept any Money Market Quote in whole or in part; provided that:

            (i) the aggregate principal amount of each Money Market Borrowing
      may not exceed the applicable amount set forth in, and the currency
      thereof must be the currency set forth in, the related Money Market Quote
      Request,

            (ii) the principal amount of each Money Market Borrowing must be
      $10,000,000 or a larger multiple of $1,000,000,

            (iii) acceptance of offers may only be made on the basis of
      ascending Money Market Margins or Money Market Absolute Rates, as the case
      may be, and

            (iv) the Borrower may not accept any offer that is described in
      subsection (d)(iii) or that otherwise fails to comply with the
      requirements of this Agreement.

            (g) Allocation by Agent. If offers are made by two or more Banks
with the same Money Market Margins or Money Market Absolute Rates, as the case
may be, for a greater aggregate principal amount than the amount in respect of
which such offers are accepted for the related Interest Period, the principal
amount of Money Market Loans in respect of which such offers are accepted shall
be allocated by the Agent among such Banks as nearly as possible (in multiples
of $1,000,000, as the Agent may deem appropriate) in proportion to the aggregate
principal amounts of such offers. Determinations by the Agent of the pro rata
amounts of Money Market Loans shall be conclusive in the absence of manifest
error.

            (h) Money Market Loans in an Alternative Currency. The Borrower may
request Money Market Loans in an Alternative Currency subject to the terms and
conditions of this subsection (h), in addition to the other conditions
applicable to such Loans hereunder. Any request for Money Market Loans in an
Alternative Currency shall be subject to the condition that if there shall occur
at or prior to

                                       23
<PAGE>

10:00 A.M. (New York City time) on the date of any Money Market Borrowing to be
denominated in an Alternative Currency any change in national or international
financial, political or economic conditions or currency exchange rates or
exchange controls which would, in the reasonable opinion of any Bank that shall
have offered to make any Money Market Loan in connection with such Borrowing,
make it impracticable for such Bank's Loan to be denominated in such Alternative
Currency, then such Bank may by notice to the Borrower and the Agent withdraw
its offer to make such Loan.

            Any Money Market Loan which is to be made in an Alternative Currency
in accordance with this subsection (h) shall be advanced in the Equivalent
Amount of the Dollar Amount thereof and shall be repaid or prepaid in such
Alternative Currency in the amount borrowed. Interest payable on any Loan
denominated in an Alternative Currency shall be paid in such Alternative
Currency.

            For purposes of determining whether the aggregate principal amount
of Loans outstanding hereunder exceeds any applicable limitation expressed in
Dollars, each Money Market Loan denominated in an Alternative Currency shall be
deemed to be in a principal amount equal to the Dollar Amount thereof. The
Dollar Amount of any Money Market Loan with an Interest Period exceeding six
months in duration shall be adjusted on each date that would have been the last
day of an Interest Period for such Loan if such Loan had successive Interest
Periods of six months duration. Each such adjustment shall be made by the Bank
holding such Loan by determining the amount in Dollars that would be required in
order to result in an Equivalent Amount in the applicable Alternative Currency
equal to the principal amount of the applicable Loan outstanding on the date of
the adjustment, and the amount in Dollars so determined shall be the Dollar
Amount of such Loan unless and until another adjustment is required hereby. Each
Bank that makes a Money Market Loan denominated in an Alternative Currency
agrees to determine any such adjustments if and when required to be made
pursuant to this paragraph and to notify the Borrower and the Agent of each such
adjustment promptly upon making such determination.

            SECTION 2.04. Notice to Banks; Funding of Loans. (a) Upon receipt of
a Notice of Borrowing, the Agent shall promptly notify each Bank of the contents
thereof and of such Bank's share (if any) of such Borrowing

                                       24
<PAGE>

and such Notice of Borrowing shall not thereafter be revocable by the Borrower.

            (b) Not later than 12:00 Noon (New York City time) on the date of
each Borrowing, each Bank participating therein shall (except as provided in
subsection (c) of this Section) make available its share of such Borrowing, in
Federal or other funds immediately available in New York City, to the Agent at
its address specified in or pursuant to Section 9.01 or, subject to the
provisions of Section 2.03(h), if such Borrowing is to be made in an Alternative
Currency, make available the Equivalent Amount of such Alternative Currency on
that day (in such funds as may then be customary for the settlement of
international transactions in the Alternative Currency) to the account of the
Agent at such place as shall have been notified by the Agent to the Banks by not
less than five Domestic Business Days' notice. Unless the Agent determines that
any applicable condition specified in Article III has not been satisfied, the
Agent will make the funds so received from the Banks available to the Borrower
at the Agent's aforesaid address.

            (c) If any Bank makes a new Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Loan denominated in the
same currency from such Bank, such Bank shall apply the proceeds of its new Loan
to make such repayment and only an amount equal to the difference (if any)
between the amount being borrowed and the amount being repaid shall be made
available by such Bank to the Agent as provided in subsection (b), or remitted
by the Borrower to the Agent as provided in Section 2.12, as the case may be.

            (d) Unless the Agent shall have received notice from a Bank prior to
the date of any Borrowing that such Bank will not make available to the Agent
such Bank's share of such Borrowing, the Agent may assume that such Bank has
made such share available to the Agent on the date of such Borrowing in
accordance with subsections (b) and (c) of this Section 2.04 and the Agent may,
in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so made
such share available to the Agent, such Bank and the Borrower severally agree to
repay to the Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the

                                       25
<PAGE>
date such amount is repaid to the Agent, at (i) in the case of the Borrower, a
rate per annum equal to the higher of the Federal Funds Rate and the interest
rate applicable thereto pursuant to Section 2.07 and (ii) in the case of such
Bank, the Federal Funds Rate. If such Bank shall repay to the Agent such
corresponding amount, such amount so repaid shall constitute such Bank's Loan
included in such Borrowing for purposes of this Agreement.

            SECTION 2.05. Notes. (a) The Loans of each Bank shall be evidenced
by a single Note payable to the order of such Bank for the account of its
Applicable Lending Office in an amount equal to the aggregate unpaid principal
amount of such Bank's Loans.

            (b) Each Bank may, by notice to the Borrower and the Agent, request
that its Loans of a particular type be evidenced by a separate Note in an amount
equal to the aggregate unpaid principal amount of such Loans. Each such Note
shall be in substantially the form of Exhibit A hereto with appropriate
modifications to reflect the fact that it evidences solely Loans of the relevant
type. Each reference in this Agreement to the "Note" of such Bank shall be
deemed to refer to and include any or all of such Notes, as the context may
require.

            (c) Upon receipt of each Bank's Note pursuant to Section 3.01(b),
the Agent shall forward such Note to such Bank. Each Bank shall record the date,
amount, type and maturity of each Loan made by it and the date and amount of
each payment of principal made by the Borrower with respect thereto and, in the
case of Money Market Loans denominated in an Alternative Currency, the currency,
amount and Dollar Amount of such Loans, and prior to any transfer of its Note
shall endorse on the schedule forming a part thereof appropriate notations to
evidence the foregoing information with respect to each such Loan then
outstanding; provided that the failure of any Bank to make any such recordation
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Notes. Each Bank is hereby irrevocably authorized by the Borrower so
to endorse its Note and to attach to and make a part of its Note a continuation
of any such schedule as and when required.

            SECTION 2.06. Maturity of Loans. (a) All Committed Loans of each
Bank shall mature, and the principal amount thereof shall be due and payable,
together with accrued interest thereon, on the Termination Date.

                                       26

<PAGE>

            (b) Each Money Market Loan shall mature, and the principal amount
thereof shall be due and payable, together with accrued interest thereon, on the
last day of the Interest Period applicable to such Money Market Loan.

            SECTION 2.07. Interest Rates. (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the date
such Loan is made until it becomes due, (i) at a rate per annum equal to the
Base Rate for such day, if such day falls within any calendar quarter with
respect to which the Utilization Percentage is less than or equal to 50% or (ii)
at a rate per annum equal to the sum of the Base Rate for such day and 0.10%, if
such day falls within a calendar quarter with respect to which the Utilization
Percentage is greater than 50%. Such interest shall be payable for each Interest
Period on the last day thereof, and, with respect to the principal amount of any
Base Rate Loan converted to a CD Loan or a Euro-Dollar Loan, on each date a Base
Rate Loan is so converted. Any overdue principal of or interest on any Base Rate
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the sum of 2% plus the Base Rate.

            (b) Each CD Loan shall bear interest on the outstanding principal
amount thereof, for the Interest Period applicable thereto, at a rate per annum
equal to the sum of the CD Margin plus the applicable Adjusted CD Rate; provided
that if any CD Loan or any portion thereof shall, as a result of clause (2)(b)
of the definition of Interest Period, have an Interest Period of less than 30
days, such portion shall bear interest during such Interest Period at the rate
applicable to Base Rate Loans during such period. Such interest shall be payable
for each Interest Period on the last day thereof and, if such Interest Period is
longer than 90 days, at intervals of 90 days after the first day thereof. In
addition, with respect to the principal amount of any CD Loan converted to a
Base Rate Loan or a Euro- Dollar Loan, such interest shall be payable on each
date a CD Loan is so converted. Any overdue principal of or interest on any CD
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the sum of 2% plus the higher of (i) the sum of the CD Margin
plus the Adjusted CD Rate applicable to such Loan and (ii) the rate applicable
to Base Rate Loans for such day.

                                       27

<PAGE>

            "CD Margin" applicable to any CD Loan outstanding on any day means:

            (i) if such day falls within a Level I Pricing Period, then (A)
      0.2525%, if such day falls within any calendar quarter with respect to
      which the Utilization Percentage is less than or equal to 50% or (B)
      0.3525%, if such day falls within a calendar quarter with respect to which
      the Utilization Percentage is greater than 50%;

            (ii) if such day falls within a Level II Pricing Period, then (A)
      0.260%, if such day falls within any calendar quarter with respect to
      which the Utilization Percentage is less than or equal to 50% or (B)
      0.360%, if such day falls within a calendar quarter with respect to which
      the Utilization Percentage is greater than 50%;

            (iii) if such day falls within a Level III Pricing Period, then (A)
      0.280%, if such day falls within any calendar quarter with respect to
      which the Utilization Percentage is less than or equal to 50% or (B)
      0.380%, if such day falls within a calendar quarter with respect to which
      the Utilization Percentage is greater than 50%;

            (iv) if such day falls within a Level IV Pricing Period, then (A)
      0.295%, if such day falls within any calendar quarter with respect to
      which the Utilization Percentage is less than or equal to 50% or (B)
      0.395%, if such day falls within a calendar quarter with respect to which
      the Utilization Percentage is greater than 50%;

            (v) if such day falls within a Level V Pricing Period, then (A)
      0.335%, if such day falls within any calendar quarter with respect to
      which the Utilization Percentage is less than or equal to 50% or (B)
      0.435%, if such day falls within a calendar quarter with respect to which
      the Utilization Percentage is greater than 50%;

            (vi) if such day falls within a Level VI Pricing Period, then (A)
      0.375%, if such day falls within any calendar quarter with respect to
      which the Utilization Percentage is less than or equal to 50% or (B)
      0.475%, if such day falls within a calendar quarter with

                                       28

<PAGE>

      respect to which the Utilization Percentage is greater than 50%; and

            (vii) if such day falls within a Level VII Pricing Period, then (A)
      0.450%, if such day falls within any calendar quarter with respect to
      which the Utilization Percentage is less than or equal to 50% or (B)
      0.550%, if such day falls within a calendar quarter with respect to which
      the Utilization Percentage is greater than 50%.

            The "Adjusted CD Rate" applicable to any Interest Period means a
rate per annum determined pursuant to the following formula:

                            [ CDBR       ]*
          ACDR        =     [----------- ]                 +  AR
                            [ 1.00 - DRP ]

          ACDR        =     Adjusted CD Rate
          CDBR        =     CD Base Rate
          DRP         =     Domestic Reserve Percentage
          Ar          =     Assessment Rate

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

      *     The amount in brackets being rounded upward, if necessary, to the
next higher 1/100 of 1%

            The "CD Base Rate" applicable to any Interest Period is the rate of
interest determined by the Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of the prevailing rates per annum bid
at 10:00 A.M. (New York City time) (or as soon thereafter as practicable) on the
first day of such Interest Period by two or more New York certificate of deposit
dealers of recognized standing for the purchase at face value from each CD
Reference Bank of its certificates of deposit in an amount comparable to the
principal amount of the CD Loan of such CD Reference Bank to which such Interest
Period applies and having a maturity comparable to such Interest Period.

            "Domestic Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the

                                       29

<PAGE>

Federal Reserve System (or any successor) for determining the maximum reserve
requirement (including without limitation any basic, supplemental or emergency
reserves) for a member bank of the Federal Reserve System in New York City with
deposits exceeding five billion Dollars in respect of new non-personal time
deposits in Dollars in New York City having a maturity comparable to the related
Interest Period and in an amount of $100,000 or more. The Adjusted CD Rate shall
be adjusted automatically on and as of the effective date of any change in the
Domestic Reserve Percentage.

            "Assessment Rate" means for any Interest Period the net annual
assessment rate (rounded upward, if necessary, to the next higher 1/100 of 1%)
actually incurred by Deutsche Bank Trust Company Americas to the Federal Deposit
Insurance Corporation (or any successor) for such Corporation's (or such
successor's) insuring time deposits at offices of Deutsche Bank Trust Company
Americas in the United States during the most recent period for which such rate
has been determined prior to the commencement of such Interest Period.

            (c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a rate
per annum equal to the sum of the Euro-Dollar Margin plus the applicable London
Interbank Offered Rate. Such interest shall be payable for each Interest Period
on the last day thereof and, if such Interest Period is longer than three
months, at intervals of three months after the first day thereof. In addition,
with respect to the principal amount of any Euro-Dollar Loan converted to a Base
Rate Loan or a CD Loan, such interest shall be payable on each date a
Euro-Dollar Loan is so converted.

            "Euro-Dollar Margin" applicable to any Euro- Dollar Loan outstanding
on any day means:

            (i) if such day falls within a Level I Pricing Period, then (A)
      0.1275%, if such day falls within any calendar quarter with respect to
      which the Utilization Percentage is less than or equal to 50% or (B)
      0.2275%, if such day falls within a calendar quarter with respect to which
      the Utilization Percentage is greater than 50%;

            (ii) if such day falls within a Level II Pricing

                                       30

<PAGE>

      Period, then (A) 0.135%, if such day falls within any calendar quarter
      with respect to which the Utilization Percentage is less than or equal to
      50% or (B) 0.235%, if such day falls within a calendar quarter with
      respect to which the Utilization Percentage is greater than 50%;

            (iii) if such day falls within a Level III Pricing Period, then (A)
      0.155%, if such day falls within any calendar quarter with respect to
      which the Utilization Percentage is less than or equal to 50% or (B)
      0.255%, if such day falls within a calendar quarter with respect to which
      the Utilization Percentage is greater than 50%;

            (iv) if such day falls within a Level IV Pricing Period, then (A)
      0.170%, if such day falls within any calendar quarter with respect to
      which the Utilization Percentage is less than or equal to 50% or (B)
      0.270%, if such day falls within a calendar quarter with respect to which
      the Utilization Percentage is greater than 50%;

            (v) if such day falls within a Level V Pricing Period, then (A)
      0.210%, if such day falls within any calendar quarter with respect to
      which the Utilization Percentage is less than or equal to 50% or (B)
      0.310%, if such day falls within a calendar quarter with respect to which
      the Utilization Percentage is greater than 50%;

            (vi) if such day falls within a Level VI Pricing Period, then (A)
      0.250%, if such day falls within any calendar quarter with respect to
      which the Utilization Percentage is less than or equal to 50% or (B)
      0.350%, if such day falls within a calendar quarter with respect to which
      the Utilization Percentage is greater than 50%; and

            (vii) if such day falls within a Level VII Pricing Period, then (A)
      0.325%, if such day falls within any calendar quarter with respect to
      which the Utilization Percentage is less than or equal to 50% or (B)
      0.425%, if such day falls within a calendar quarter with respect to which
      the Utilization Percentage is greater than 50%.

                                       31

<PAGE>

            The "London Interbank Offered Rate", applicable to any Interest
Period means the average (rounded upward, if necessary, to the next higher 1/32
of 1%) of the respective rates per annum at which deposits in Dollars or, in the
case of any Money Market LIBOR Loan denominated in an Alternative Currency, the
relevant Alternative Currency are offered to each of the Euro-Dollar Reference
Banks in the London interbank market at approximately 11:00 A.M. (London time)
two Euro-Dollar Business Days before the first day of such Interest Period in an
amount approximately equal to the principal amount of the Euro- Dollar Loan of
such Euro-Dollar Reference Bank to which such Interest Period is to apply and
for a period of time comparable to such Interest Period.

            (d) Any overdue principal of or interest on any Euro-Dollar Loan
shall bear interest, payable on demand, for each day from and including the date
payment thereof was due to but excluding the date of actual payment, at a rate
per annum equal to the sum of 2% plus the higher of (i) the sum of the
Euro-Dollar Margin plus the London Interbank Offered Rate applicable to such
Loan and (ii) the Euro-Dollar Margin plus the average (rounded upward, if
necessary, to the next higher 1/32 of 1%) of the respective rates per annum at
which one day (or, if such amount due remains unpaid more than three Euro-Dollar
Business Days, then for such other period of time not longer than one month as
the Agent may select) deposits in Dollars in an amount approximately equal to
such overdue payment due to each of the Euro-Dollar Reference Banks are offered
to such Euro-Dollar Reference Bank in the London interbank market for the
applicable period determined as provided above (or, if the circumstances
described in clause (a) or (b) of Section 8.01 shall exist, at a rate per annum
equal to the sum of 2% plus the rate applicable to Base Rate Loans for such
day).

            (e) Subject to Section 8.01(a), each Money Market LIBOR Loan shall
bear interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the sum of the London
Interbank Offered Rate for such Interest Period (determined in accordance with
Section 2.07(c) as if the related Money Market LIBOR Borrowing were a Committed
Euro- Dollar Borrowing) plus (or minus) the Money Market Margin quoted by the
Bank making such Loan in accordance with Section 2.03. Each Money Market
Absolute Rate Loan shall bear interest on the outstanding principal amount
thereof,

                                       32

<PAGE>

for the Interest Period applicable thereto, at a rate per annum equal to the
Money Market Absolute Rate quoted by the Bank making such Loan in accordance
with Section 2.03. Such interest shall be payable for each Interest Period on
the last day thereof and, if such Interest Period is longer than three months,
at intervals of three months after the first day thereof. Any overdue principal
of or interest on any Money Market Loan shall bear interest, payable on demand,
for each day until paid at a rate per annum equal to the sum of 2% plus the
Prime Rate for such day.

            (f) The Agent shall determine each interest rate applicable to the
Loans hereunder in accordance with the provisions hereof. The Agent shall give
prompt notice to the Borrower and the participating Banks by telex, cable or
telecopy of each rate of interest so determined, and its determination thereof
shall be conclusive in the absence of manifest error.

            (g) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section. If any Reference Bank
does not furnish a timely quotation, the Agent shall determine the relevant
interest rate on the basis of the quotation or quotations furnished by the
remaining Reference Bank or Banks or, if none of such quotations is available on
a timely basis, the provisions of Section 8.01 shall apply.

            SECTION 2.08. Fees. (a) Facility Fee. The Borrower shall pay to the
Agent for the account of the Banks ratably a facility fee at the rate of (i)
0.060% per annum for each day falling within a Level I Pricing Period, (ii)
0.065% per annum for each day falling within a Level II Pricing Period, (iii)
0.070% per annum for each day falling within a Level III Pricing Period, (iv)
0.080% per annum for each day falling within a Level IV Pricing Period, (v)
0.090% per annum for each day falling within a Level V Pricing Period, (vi)
0.100% per annum for each day falling within a Level VI Pricing Period, and
(vii) 0.175% per annum for each day falling within a Level VII Pricing Period.
Such facility fee shall accrue from and including the Effective Date to but
excluding the Termination Date, on the daily average aggregate amount of the
Commitments (whether used or unused). If any Loans are outstanding and are not
repaid on the Termination Date, such facility fee will continue to accrue from
and including the Termination Date to but excluding the date all Loans are
repaid, on the outstanding principal amount of the Loans.

                                       33

<PAGE>

            (b) Payments. Accrued fees under subsection (a) of this Section
shall be payable quarterly on the last day of February, May, August and November
in each year (commencing August 2002) and upon the date of termination of the
Commitments in their entirety (and, if later, the date the Loans shall be repaid
in their entirety).

            SECTION 2.09. Optional Termination or Reduction of Commitments. The
Borrower may, upon at least three Domestic Business Days' prior irrevocable
written notice to the Agent, (i) terminate the Commitments at any time, if no
Loans are outstanding at such time or (ii) ratably reduce from time to time by
an aggregate amount of $10,000,000 or any larger multiple of $1,000,000, the
aggregate amount of the Commitments in excess of the aggregate outstanding
principal amount of the Loans.

            SECTION 2.10. Mandatory Termination of Commitments. The Commitments
shall terminate on the Termination Date and any Loans then outstanding (together
with accrued interest thereon) shall be due and payable on such date.

            SECTION 2.11. Optional Prepayments.
            (a) Subject to Section 2.13 in the case of Fixed Rate Loans, the
Borrower may, upon at least one Domestic Business Day's notice to the Agent,
prepay any Group of Loans, or any Money Market Borrowing bearing interest at the
Base Rate pursuant to Section 8.01, in whole at any time, or from time to time
in part in amounts aggregating $10,000,000 or any larger multiple of $1,000,000
(based on the Dollar Amount thereof, in the case of a Borrowing denominated in
an Alternative Currency), by paying the principal amount to be prepaid together
with accrued interest thereon to the date of prepayment; provided that, except
as expressly provided above, the Borrower may not prepay all or any portion of
the principal amount of any Money Market Loan prior to the maturity thereof.
Each such optional prepayment shall be applied to prepay ratably the Loans of
the several Banks included in such Group or Borrowing.

            (b) Upon receipt of a notice of prepayment pursuant to this Section,
the Agent shall promptly notify each Bank of the contents thereof and of such
Bank's ratable share (if any) of such prepayment and such notice shall not
thereafter be revocable by the Borrower.

                                       34

<PAGE>

            SECTION 2.12. General Provisions as to Payments. (a) Except as
expressly provided in subsection (b) of this Section, the Borrower shall make
each payment of principal of, and interest on, the Loans and of fees hereunder,
in Dollars, not later than 12:00 Noon (New York City time) on the date when due,
in Federal or other funds immediately available in New York City, to the Agent
at its address referred to in Section 9.01. The Agent will promptly distribute
to each Bank its ratable share of each such payment received by the Agent for
the account of the Banks.

            (b) All payments to be made by the Borrower hereunder or under the
Notes in an Alternative Currency pursuant to Section 2.03(h) shall be made in
such Alternative Currency in such funds as may then be customary for the
settlement of international transactions in such Alternative Currency for the
account of the Agent, at such time and at such place as shall have been notified
by the Agent to such Borrower and the applicable Banks by not less than four
Euro-Dollar Business Days' notice. The Agent will promptly cause any such
payments for the account of any Bank to be distributed to the Bank entitled
thereto in like funds.

            (c) Whenever any payment of principal of, or interest on, the
Domestic Loans or of fees shall be due on a day which is not a Domestic Business
Day, the date for payment thereof shall be extended to the next succeeding
Domestic Business Day. Whenever any payment of principal of, or interest on, the
Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business Day,
the date for payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case the date for payment thereof shall be the next
preceding Euro-Dollar Business Day. Whenever any payment of principal of, or
interest on, any Money Market Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day. If the date for any payment of
principal is extended by operation of law or otherwise, interest thereon shall
be payable for such extended time.

            (d) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Banks hereunder that the
Borrower will not make

                                       35

<PAGE>

such payment in full, the Agent may assume that the Borrower has made such
payment in full to the Agent on such date and the Agent may, in reliance upon
such assumption, cause to be distributed to each Bank on such due date an amount
equal to the amount then due such Bank. If and to the extent that the Borrower
shall not have so made such payment, each Bank shall repay to the Agent
forthwith on demand such amount distributed to such Bank together with interest
thereon, for each day from the date such amount is distributed to such Bank
until the date such Bank repays such amount to the Agent, at the Federal Funds
Rate.

            SECTION 2.13. Funding Losses. If the Borrower makes any payment of
principal with respect to any Fixed Rate Loan or any Fixed Rate Loan is
converted (pursuant to Article II, VI or VIII or otherwise) on any day other
than the last day of the Interest Period applicable thereto, or the end of an
applicable period fixed pursuant to Section 2.07(d), or if the Borrower fails to
borrow any Fixed Rate Loans (excluding a failure to borrow in a specified
Alternative Currency due to the occurrence of any change in conditions described
in Section 2.03(h)) after notice has been given to any Bank in accordance with
Section 2.04(a), the Borrower shall reimburse each Bank within 15 days after
demand for any resulting loss or expense incurred by it (or by an existing or
prospective Participant in the related Loan), including (without limitation) any
loss incurred in obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period after any such payment or
failure to borrow, provided that such Bank shall have delivered to the Borrower
a certificate as to the amount of such loss or expense, which certificate shall
be conclusive in the absence of manifest error.

            SECTION 2.14. Computation of Interest and Fees. Interest based on
the Prime Rate hereunder shall be computed on the basis of a year of 365 days
(or 366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and
fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).

            SECTION 2.15. Method of Electing Interest Rates. (a) The Loans
included in each Committed Borrowing shall bear interest initially at the type
of rate specified

                                       36

<PAGE>

by the Borrower in the applicable Notice of Committed Borrowing. Thereafter, the
Borrower may from time to time elect to change or continue the type of interest
rate borne by each Group of Loans (subject in each case to the provisions of
Article VIII), as follows:

                  (i) if such Loans are Base Rate Loans, the Borrower may elect
            to convert such Loans to CD Loans as of any Domestic Business Day or
            to Euro-Dollar Loans as of any Euro-Dollar Business Day;

                  (ii) if such Loans are CD Loans, the Borrower may elect to
            convert such Loans to Base Rate Loans or Euro-Dollar Loans or elect
            to convert or continue such Loans as CD Loans for a different or
            additional Interest Period, in each case effective on any
            Euro-Dollar Business Day;

                  (iii) if such Loans are Euro-Dollar Loans, the Borrower may
            elect to convert such Loans to Base Rate Loans or CD Loans or elect
            to convert or continue such Loans as Euro-Dollar Loans for a
            different or additional Interest Period, in each case effective on
            any Euro-Dollar Business Day.

Each such election shall be made by delivering a notice (a "Notice of Interest
Rate Election") to the Agent at least three Euro-Dollar Business Days before the
conversion or continuation selected in such notice is to be effective (unless
the relevant Loans are to be converted from Domestic Loans to Domestic Loans of
the other type or continued as Domestic Loans of the same type for an additional
Interest Period, in which case such notice shall be delivered to the Agent at
least two Domestic Business Days before such conversion or continuation is to be
effective). A Notice of Interest Rate Election may, if it so specifies, apply to
only a portion of the aggregate principal amount of the relevant Group of Loans;
provided that (i) such portion is allocated ratably among the Loans comprising
such Group and (ii) the portion to which such Notice applies, and the remaining
portion to which it does not apply, are each $10,000,000 or any larger multiple
of $1,000,000.

                                       37

<PAGE>

            (b) Each Notice of Interest Rate Election shall specify:

            (i) The Group of Loans (or portion thereof) to which such notice
      applies;

            (ii) the date on which the conversion or continuation selected in
      such notice is to be effective, which shall comply with the applicable
      clause of subsection (a) above;

            (iii) if the Loans comprising such Group are to be converted, the
      new type of Loans and, if such new Loans are Fixed Rate Loans, the
      duration of the initial Interest Period applicable thereto; and

            (iv) if such Loans are to be continued as CD Loans or Euro-Dollar
      Loans for an additional Interest Period, the duration of such additional
      Interest Period.

Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.

            (c) Upon receipt of a Notice of Interest Rate Election from the
Borrower pursuant to subsection (a) above, the Agent shall promptly notify each
Bank of the contents thereof and such notice shall not thereafter be revocable
by the Borrower. If the Borrower fails to deliver a timely Notice of Interest
Rate Election to the Agent for any Group of Fixed Rate Loans, such Loans shall
be converted into Base Rate Loans on the last day of the then current Interest
Period applicable thereto.

            SECTION 2.16. Regulation D Compensation. If and for so long as any
Bank maintains reserves against "Euro- currency liabilities" (or any other
category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
such Bank to United States residents), then such Bank may require the Borrower
to pay, contemporaneously with each payment of interest on Euro- Dollar Loans,
additional interest on the related Euro- Dollar Loan of such Bank at a rate per
annum determined by such Bank up to but not exceeding the excess of (i)(A) the
applicable London Interbank Offered Rate divided by (B) one minus the
Euro-Dollar Reserve Percentage over (ii) the

                                       38

<PAGE>

applicable London Interbank Offered Rate. Any Bank wishing to require payment of
such additional interest (x) shall so notify the Borrower and the Agent, in
which case such additional interest on the Euro-Dollar Loans of such Bank shall
be payable to such Bank at the place indicated in such notice with respect to
each Interest Period commencing at least four Euro-Dollar Business Days after
the giving of such notice and (y) shall notify the Borrower at least five
Euro-Dollar Business Days prior to each date on which interest is payable on the
Euro-Dollar Loans of the amount then due it under this Section.

            SECTION 2.17. Judgment Currency. If for the purposes of obtaining
judgment in any court it is necessary to convert a sum due from the Borrower
hereunder or under any of the Notes in the currency expressed to be payable
herein or under the Notes ( the "specified currency") into another currency, the
parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Agent could purchase the specified currency with such
other currency at the Agent's New York office on the Euro-Dollar Business Day
preceding that on which final judgment is given. The obligations of the Borrower
in respect of any sum due to any Bank or the Agent hereunder or under any Note
shall, notwithstanding any judgment in a currency other than the specified
currency, be discharged only to the extent that on the Euro-Dollar Business Day
following receipt by such Bank or the Agent (as the case may be) of any sum
adjudged to be so due in such other currency such Bank or the Agent (as the case
may be) may in accordance with normal banking procedures purchase the specified
currency with such other currency; if the amount of the specified currency so
purchased is less than the sum originally due to such Bank or the Agent, as the
case may be, in the specified currency, the Borrower agrees, to the fullest
extent that it may effectively do so, as a separate obligation and
notwithstanding any such judgment, to indemnify such Bank or the Agent, as the
case may be, against such loss, and if the amount of the specified currency so
purchased exceeds (a) the sum originally due to any Bank or the Agent, as the
case may be, in the specified currency and (b) any amounts shared with other
Banks as a result of allocations of such excess as a disproportionate payment to
such Bank under Section 9.04, such Bank or the Agent, as the case may be, agrees
to remit such excess to the Borrower.

                                       39

<PAGE>

                                   ARTICLE III

                                   Conditions

            SECTION 3.01. Effectiveness. This Agreement shall become effective
on the date that each of the following conditions shall have been satisfied (or
waived in accordance with Section 9.05):

            (a) receipt by the Agent of counterparts hereof signed by each of
      the parties hereto (or, in the case of any party as to which an executed
      counterpart shall not have been received, receipt by the Agent in form
      satisfactory to it of telegraphic, telex or other written confirmation
      from such party of execution of a counterpart hereof by such party);

            (b) receipt by the Agent for the account of each Bank of a duly
      executed Note dated on or before the Effective Date complying with the
      provisions of Section 2.05;

            (c) receipt by the Agent of an opinion of Joanne L. Bober, Esq.,
      Senior Vice President and General Counsel of the Borrower, substantially
      in the form of Exhibit E hereto and covering such additional matters
      relating to the transactions contemplated hereby as the Required Banks may
      reasonably request;

            (d) receipt by the Agent of written confirmation from the Borrower
      that the Borrower has (i) terminated all lending commitments under its
      Existing Credit Agreement and (ii) repaid all loans and other amounts, if
      any, outstanding or accrued thereunder;

            (e) receipt by the Agent of all documents it may reasonably request
      relating to the existence of the Borrower, the corporate authority for and
      the validity of this Agreement and the Notes, and any other matters
      relevant hereto, all in form and substance satisfactory to the Agent; and

            (f) receipt by the Arrangers of all fees that are to be received by
      the Arrangers upon execution of this Agreement in the amounts previously
      agreed upon between the Borrower and the Agent;

                                       40

<PAGE>

provided that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied not later than
July 2, 2002. The Agent shall promptly notify the Borrower and the Banks of the
Effective Date, and such notice shall be conclusive and binding on all parties
hereto.

            SECTION 3.02. Borrowings. The obligation of any Bank to make a Loan
on the occasion of any Borrowing is subject to the satisfaction of the following
conditions:

            (a) receipt by the Agent of a Notice of Borrowing as required by
      Section 2.02 or 2.03, as the case may be;

            (b) the fact that, immediately after such Borrowing, the aggregate
      outstanding principal amount of the Loans will not exceed the aggregate
      amount of the Commitments;

            (c) the fact that, immediately before and after such Borrowing, no
      Default shall have occurred and be continuing; and

            (d) the fact that the representations and warranties of the Borrower
      contained in this Agreement shall be true on and as of the date of such
      Borrowing, except that the condition set forth in this clause (d) shall
      exclude the representation and warranty set forth in Section 4.04(c) for
      any Loans made after the Effective Date.

Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in clauses
(b), (c) and (d) of this Section.

                                       41

<PAGE>

                                   ARTICLE IV

                       Representations and Warranties The

                     Borrower represents and warrants that:

            SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of New Jersey, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.

            SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement and the Notes are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the certificate of incorporation or by-laws of the Borrower or
of any agreement, judgment, injunction, order, decree or other instrument
binding upon the Borrower or result in the creation or imposition of any Lien on
any asset of the Borrower or any of its Significant Subsidiaries.

            SECTION 4.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Borrower and the Notes, when executed and delivered in
accordance with this Agreement, will constitute valid and binding obligations of
the Borrower, in each case enforceable in accordance with its terms (subject to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other laws affecting creditor's rights generally from time to time
in effect and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law).

            SECTION 4.04. Financial Information. (a) The consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as of December 31, 2001,
and the related consolidated statements of income, shareholders' equity and cash
flow for the fiscal year then ended, reported on by Ernst & Young and set forth
in the Borrower's 2001 Form 10-K, a copy of which has been

                                       42

<PAGE>

delivered to each of the Banks, fairly present, in conformity with generally
accepted accounting principles, the consolidated financial position of the
Borrower and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such fiscal year.

            (b) The unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of March 31, 2002, and the related unaudited
consolidated statements of income and cash flow for the three months then ended,
set forth in the Borrower's quarterly report for the fiscal quarter ended March
31, 2002, as filed with the Securities and Exchange Commission on Form 10-Q, a
copy of which has been delivered to each of the Banks, fairly present, in
conformity with generally accepted accounting principles applied on a basis
consistent with the financial statements referred to in subsection (a) of this
Section, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such three month period (subject to normal
year-end adjustments).

            (c) Since March 31, 2002, there has been no material adverse change
in the financial position of the Borrower and its Consolidated Subsidiaries,
considered as a whole, or in the ability of the Borrower to comply with its
payment obligations under the Notes.

            SECTION 4.05. Litigation. There is no action, suit or proceeding
pending against, or to the knowledge of the Borrower threatened in writing
against the Borrower or any of its Significant Subsidiaries before any court or
arbitrator or any governmental body, agency or official in which there is a
reasonable possibility of an adverse decision which could materially adversely
affect the financial position of the Borrower and its Consolidated Subsidiaries,
considered as a whole, or the ability of the Borrower to comply with its payment
obligations under the Notes, or which in any manner draws into question the
validity of this Agreement or the Notes.

            SECTION 4.06. Compliance with ERISA. Each member of the ERISA Group
has fulfilled its obligations under the minimum funding standards of ERISA and
the Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently

                                       43

<PAGE>

applicable provisions of ERISA and the Internal Revenue Code with respect to
each Plan. No member of the ERISA Group has (i) sought a waiver of the minimum
funding standard under Section 412 of the Internal Revenue Code in respect of
any Plan, (ii) failed to make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security under
ERISA or the Internal Revenue Code to secure obligations aggregating in excess
of $25,000,000 or (iii) incurred any liability under Title IV of ERISA other
than a liability to the PBGC for premiums under Section 4007 of ERISA.

            SECTION 4.07. Not an Investment Company. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.

            SECTION 4.08. Compliance with Laws. Each of the Borrower and its
Significant Subsidiaries is in compliance in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, ERISA and the rules and
regulations thereunder) except where the necessity of compliance therewith is
being contested in good faith by appropriate proceedings.

                                    ARTICLE V

                                    Covenants

            The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid:

            SECTION 5.01. Information. The Borrower will deliver to each of the
Banks:

            (a) as soon as available and in any event within 120 days after the
      end of each fiscal year of the Borrower, a consolidated balance sheet of
      the Borrower and its Consolidated Subsidiaries as of the end of such
      fiscal year and the related consolidated statements of income,
      shareholders' equity and cash flow for such fiscal year, setting forth in
      each case in comparative form the figures for the previous

                                       44

<PAGE>

      fiscal year, all reported on in a manner acceptable to the Securities and
      Exchange Commission by Ernst & Young or other independent public
      accountants of nationally recognized standing;

            (b) as soon as available and in any event within 60 days after the
      end of each of the first three quarters of each fiscal year of the
      Borrower, a consolidated balance sheet of the Borrower and its
      Consolidated Subsidiaries as of the end of such quarter and the related
      consolidated statements of income for such quarter and of income and cash
      flow for the portion of the Borrower's fiscal year ended at the end of
      such quarter, setting forth in comparative form the consolidated
      statements of income for the corresponding quarter of the Borrower's
      previous fiscal year and of income and cash flow for the corresponding
      portion of the Borrower's previous fiscal year, all certified (subject to
      normal year-end adjustments) as to fairness of presentation, generally
      accepted accounting principles and consistency by the chief financial
      officer or the chief accounting officer or the Treasurer of the Borrower;

            (c) simultaneously with the delivery of each set of financial
      statements referred to in clauses (a) and (b) above, a certificate of the
      chief financial officer or the chief accounting officer or the Treasurer
      of the Borrower stating whether any Default exists on the date of such
      certificate and, if any Default then exists, setting forth the details
      thereof and the action which the Borrower is taking or proposes to take
      with respect thereto;

            (d) simultaneously with the delivery of each set of financial
      statements referred to in clause (a) above, a statement of the firm of
      independent public accountants which reported on such statements whether
      anything has come to their attention to cause them to believe that any
      Default existed on the date of such statements;

            (e) within five days after the Chairman, the Vice-Chairman, the
      President, the chief financial officer, the chief accounting officer or
      the Treasurer of the Borrower obtains knowledge of any Default, if such
      Default is then continuing, a certificate of the chief financial officer
      or the chief accounting

                                       45

<PAGE>

      officer or the Treasurer of the Borrower setting forth the details thereof
      and the action which the Borrower is taking or proposes to take with
      respect thereto;

            (f) promptly upon the mailing thereof to the shareholders of the
      Borrower generally, copies of all financial statements, reports and proxy
      statements so mailed;

            (g) promptly upon the filing thereof, copies of all registration
      statements (other than the exhibits thereto and any registration
      statements on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q
      and 8- K (or their equivalents) which the Borrower shall have filed with
      the Securities and Exchange Commission;

            (h) if and when any member of the ERISA Group gives or is required
      to give notice to the PBGC of any "reportable event" (as defined in
      Section 4043 of ERISA) with respect to any Plan which might constitute
      grounds for a termination of such Plan under Title IV of ERISA, or knows
      that the plan administrator of any Plan has given or is required to give
      notice of any such reportable event, a copy of the notice of such
      reportable event given or required to be given to the PBGC; (ii) receives
      notice of complete or partial withdrawal liability under Title IV of ERISA
      or notice that any Multiemployer Plan is in reorganization, is insolvent
      or has been terminated, a copy of such notice; (iii) receives notice from
      the PBGC under Title IV of ERISA of an intent to terminate, impose
      liability (other than for premiums under Section 4007 of ERISA) in respect
      of, or appoint a trustee to administer any Plan, a copy of such notice;
      (iv) applies for a waiver of the minimum funding standard under Section
      412 of the Internal Revenue Code, a copy of such application; (v) gives
      notice of intent to terminate any Plan under Section 4041(c) of ERISA, a
      copy of such notice and other information filed with the PBGC; (vi) gives
      notice of withdrawal from any Plan pursuant to Section 4063 of ERISA, a
      copy of such notice; or (vii) fails to make any payment or contribution to
      any Plan or Multiemployer Plan or in respect of any Benefit Arrangement,
      or makes any amendment to any Plan or Benefit Arrangement, which has
      resulted or could result in the imposition of a Lien or the posting of a
      bond or other security to secure obligations aggregating in excess

                                       46

<PAGE>

      of $10,000,000, a certificate of the chief financial officer or the chief
      accounting officer or the Treasurer of the Borrower setting forth details
      as to such occurrence and action, if any, which the Borrower or applicable
      member of the ERISA Group is required or proposes to take; and

            (i) from time to time such additional information regarding the
      financial position or business of the Borrower and its Subsidiaries as the
      Agent, at the request of any Bank, may reasonably request.

            SECTION 5.02. Payment of Obligations. The Borrower will pay and
discharge, and will cause each Significant Subsidiary to pay and discharge, at
or before maturity, all their respective material obligations and liabilities,
including, without limitation, tax liabilities, except where the same may be
contested in good faith by appropriate proceedings, and will maintain, and will
cause each Significant Subsidiary to maintain, in accordance with generally
accepted accounting principles, appropriate reserves for the accrual of any of
the same.

            SECTION 5.03. Maintenance of Property. The Borrower will keep, and
will cause each Significant Subsidiary to keep, all property useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted.

            SECTION 5.04. Conduct of Business and Maintenance of Existence. The
Borrower will continue, and will cause each Significant Subsidiary to continue,
to engage in business of the same general type as now conducted by the Borrower
and its Subsidiaries, and will preserve, renew and keep in full force and
effect, and will cause each Significant Subsidiary to preserve, renew and keep
in full force and effect, their respective corporate existence and their
respective rights, privileges and franchises necessary or desirable in the
normal conduct of business; provided that nothing in this Section 5.04 shall
prohibit (i) the merger of a Significant Subsidiary into the Borrower or the
merger or consolidation of a Significant Subsidiary with or into another Person
if the corporation surviving such consolidation or merger is a Subsidiary and
if, in each case, after giving effect thereto, no Default shall have occurred
and be continuing or (ii) the termination of the corporate existence of any
Significant Subsidiary if the Borrower in good faith

                                       47

<PAGE>

determines that such termination is in the best interest of the Borrower and is
not materially disadvantageous to the Banks.

            SECTION 5.05. Compliance with Laws. The Borrower will comply, and
cause each Significant Subsidiary to comply, in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, ERISA and the rules and
regulations thereunder) except where the necessity of compliance therewith is
contested in good faith by appropriate proceedings.

            SECTION 5.06. Inspection of Property, Books and Records. The
Borrower will keep, and will cause each Significant Subsidiary to keep, proper
books of record and account in which full, true and correct entries shall be
made of all dealings and transactions in relation to its business and
activities; and will permit, and will cause each Significant Subsidiary to
permit, representatives of any Bank at such Bank's expense to visit and inspect
any of their respective properties, to examine and make abstracts from any of
their respective books and records and to discuss their respective affairs,
finances and accounts with their respective officers, employees and independent
public accountants, all at such reasonable times and with reasonable notice and
as often as may reasonably be desired.

            SECTION 5.07. Adjusted Consolidated Net Worth. The Borrower will at
no time permit Adjusted Consolidated Net Worth to be less than $2,600,000,000.

            SECTION 5.08. Negative Pledge. Neither the Borrower nor any
Significant Subsidiary (other than a Real Estate Subsidiary) will create, assume
or suffer to exist any Lien on any asset now owned or hereafter acquired by it,
except:

            (a) Liens existing on the date of this Agreement securing Debt
      outstanding on the date of this Agreement;

            (b) any Lien existing on any asset of any corporation at the time
      such corporation becomes a Significant Subsidiary and not created in
      contemplation of such event;

                                       48

<PAGE>

            (c) any Lien on any asset securing Debt incurred or assumed for the
      purpose of financing all or any part of the cost of acquiring such asset,
      provided that such Lien attaches to such asset concurrently with or within
      90 days after the acquisition thereof;

            (d) any Lien on any asset of any corporation existing at the time
      such corporation is merged or consolidated with or into the Borrower or a
      Subsidiary and not created in contemplation of such event;

            (e) any Lien existing on any asset prior to the acquisition thereof
      by the Borrower or a Subsidiary and not created in contemplation of such
      acquisition;

            (f) any Lien arising out of the refinancing, extension, renewal or
      refunding of any Debt secured by any Lien permitted by any of the
      foregoing clauses of this Section, provided that such Debt is not
      increased and is not secured by any additional assets;

            (g) Liens which (i) do not secure Debt, (ii) do not secure any
      obligation in an amount exceeding $100,000,000 and (iii) do not in the
      aggregate materially detract from the value of its assets or materially
      impair the use thereof in the operation of its business; and

            (h) Liens securing Debt, which Liens are not otherwise permitted by
      the foregoing clauses of this Section; provided, that in no event shall
      the Liens permitted by this clause (h) secure Debt in an aggregate
      principal amount exceeding 15% of Adjusted Consolidated Net Worth.

            SECTION 5.09. Consolidations, Mergers and Sales of Assets. The
Borrower will not (i) consolidate or merge with or into any other Person (other
than a Subsidiary of the Borrower) or (ii) sell, lease or otherwise transfer,
directly or indirectly, all or substantially all of the assets of the Borrower
and its Subsidiaries, taken as a whole, to any other Person.

            SECTION 5.10. Use of Proceeds. The proceeds of the Loans made under
this Agreement will be used by the Borrower for general corporate purposes. None
of such proceeds will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of

                                       49

<PAGE>

buying or carrying any "margin stock" within the meaning of Regulation U.

                                   ARTICLE VI

                                    Defaults

            SECTION 6.01. Events of Default. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:

            (a) the Borrower shall fail to pay when due any principal of any
      Loan, or shall fail to pay within five Domestic Business Days after the
      date when due any interest on any Loan or any fees or any other amount
      payable hereunder;

            (b) the Borrower shall fail to observe or perform any covenant
      contained in Sections 5.07 to 5.10, inclusive;

            (c) the Borrower shall fail to observe or perform any covenant or
      agreement contained in this Agreement (other than those covered by clause
      (a) or (b) above) for 30 days after written notice thereof has been given
      to the Borrower by the Agent at the request of Banks having at least 10%
      in aggregate amount of the Commitments;

            (d) any representation, warranty, certification or statement made by
      the Borrower in this Agreement or in any certificate, financial statement
      or other document delivered pursuant to this Agreement shall prove to have
      been incorrect in any material respect when made (or deemed made);

            (e) the Borrower or any Significant Subsidiary shall fail to make
      any payment in respect of any Material Debt when due or within any
      applicable grace period;

            (f) any event or condition shall occur which results in the
      acceleration of the maturity of any Material Debt or enables the holder of
      such Debt or any Person acting on such holder's behalf to accelerate the
      maturity thereof;

                                       50
<PAGE>

            (g) the Borrower or any Significant Subsidiary shall commence a
      voluntary case or other proceeding seeking liquidation, reorganization or
      other relief with respect to itself or its debts under any bankruptcy,
      insolvency or other similar law now or hereafter in effect or seeking the
      appointment of a trustee, receiver, liquidator, custodian or other similar
      official of it or any substantial part of its property, or shall consent
      to any such relief or to the appointment of or taking possession by any
      such official in an involuntary case or other proceeding commenced against
      it, or shall make a general assignment for the benefit of creditors, or
      shall fail generally to pay its debts as they become due, or shall take
      any corporate action to authorize any of the foregoing;

            (h) an involuntary case or other proceeding shall be commenced
      against the Borrower or any Significant Subsidiary seeking liquidation,
      reorganization or other relief with respect to it or its debts under any
      bankruptcy, insolvency or other similar law now or hereafter in effect or
      seeking the appointment of a trustee, receiver, liquidator, custodian or
      other similar official of it or any substantial part of its property, and
      such involuntary case or other proceeding shall remain undismissed and
      unstated for a period of 60 days; or an order for relief shall be entered
      against the Borrower or any Significant Subsidiary under the federal
      bankruptcy laws as now or hereafter in effect;

            (i) any member of the ERISA Group shall fail to pay when due an
      amount or amounts aggregating in excess of $75,000,000 which it shall have
      become liable to pay under Title IV of ERISA; or notice of intent to
      terminate a Material Plan shall be filed under Title IV of ERISA by any
      member of the ERISA Group, any plan administrator or any combination of
      the foregoing; or the PBGC shall institute proceedings under Title IV of
      ERISA to terminate, to impose liability (other than for premiums under
      Section 4007 of ERISA) in respect of, or to cause a trustee to be
      appointed to administer any Material Plan; or a condition shall exist by
      reason of which the PBGC would be entitled to obtain a decree adjudicating
      that any Material Plan must be terminated; or there shall occur a complete
      or partial withdrawal from, or a

                                       51
<PAGE>

      default, within the meaning of Section 4219(c)(5) of ERISA, with respect
      to, one or more Multiemployer Plans which could cause one or more members
      of the ERISA Group to incur a current payment obligation in excess of
      $200,000,000;

            (j) a final judgment or order (not subject to appeal) for the
      payment of money in excess of $100,000,000 shall be rendered against the
      Borrower or any Significant Subsidiary and such judgment or order shall
      continue unsatisfied and unstated for a period of 30 days; or

            (k) any person or group of persons (within the meaning of Section 13
      or 14 of the Securities Exchange Act of 1934, as amended) shall have
      acquired beneficial ownership (within the meaning of Rule 13d-3
      promulgated by the Securities and Exchange Commission under said Act) of
      50% or more of the outstanding shares of common stock of the Borrower; or,
      during any period of 12 consecutive calendar months, individuals who were
      directors of the Borrower on the first day of such period (the "incumbent
      directors"), together with individuals nominated to serve as directors by
      a majority of the incumbent directors and any directors so nominated,
      shall cease to constitute a majority of the board of directors of the
      Borrower;

then, and in every such event, the Agent shall (i) if requested by Banks having
more than 50% in aggregate amount of the Commitments, by notice to the Borrower
terminate the Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding Notes evidencing more than 50% in aggregate principal
amount of the Loans, by notice to the Borrower declare the Notes (together with
accrued interest thereon) to be, and the Notes shall thereupon become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower; provided that in
the case of any of the Events of Default specified in clause (g) or (h) above
with respect to the Borrower, without any notice to the Borrower or any other
act by the Agent or the Banks, the Commitments shall thereupon terminate and the
Notes (together with accrued interest thereon) shall become immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower.

                                       52
<PAGE>

            SECTION 6.02. Notice of Default. The Agent shall give notice to the
Borrower under Section 6.01(c) promptly upon being requested to do so by Banks
having at least 10% in aggregate amount of the Commitments and shall thereupon
notify all the Banks thereof.

                                   ARTICLE VII

                                    The Agent

            SECTION 7.01. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Agent to take such action as administrative agent on
its behalf and to exercise such powers under this Agreement and the Notes as are
delegated to the Agent by the terms hereof or thereof, together with all such
powers as are reasonably incidental thereto.

            SECTION 7.02. Agent and Affiliates. Deutsche Bank AG New York Branch
shall have the same rights and powers under this Agreement as any other Bank and
may exercise or refrain from exercising the same as though it were not the
Agent, and Deutsche Bank AG New York Branch and its affiliates may accept
deposits from, lend money to, and generally engage in any kind of business with
the Borrower or any Subsidiary or affiliate of the Borrower as if it were not
the Agent hereunder.

            SECTION 7.03. Action by Agent. The obligations of the Agent
hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Agent shall not be required to take any action
with respect to any Default, except as expressly provided in Article VI.

            SECTION 7.04. Consultation with Experts. The Agent may consult with
legal counsel (who may be counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.

            SECTION 7.05. Liability of Agent. Neither the Agent nor any of its
directors, officers, agents, or employees shall be liable for any action taken
or not taken by it in connection herewith (i) with the consent or at the

                                       53
<PAGE>

request of the Required Banks or (ii) in the absence of its own gross negligence
or willful misconduct. Neither the Agent nor any of its directors, officers,
agents or employees shall be responsible for or have any duty to ascertain,
inquire into or verify (i) any statement, warranty or representation made in
connection with this Agreement or any borrowing hereunder; (ii) the performance
or observance of any of the covenants or agreements of the Borrower; (iii) the
satisfaction of any condition specified in Article III, except receipt of items
required to be delivered to the Agent; or (iv) the validity, effectiveness or
genuineness of this Agreement, the Notes or any other instrument or writing
furnished in connection herewith. The Agent shall not incur any liability by
acting in reliance upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex, facsimile transmission or similar
writing) believed by it to be genuine or to be signed by the proper party or
parties.

            SECTION 7.06. Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify the Agent (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from the Agent's gross negligence or willful misconduct) that the Agent
may suffer or incur in connection with this Agreement or any action taken or
omitted by the Agent hereunder.

            SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement.

            SECTION 7.08. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Banks and the Borrower. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent, subject to the approval of the Borrower (which approval shall not be
unreasonably withheld and, if an

                                       54
<PAGE>

Event of Default shall have occurred and be continuing, shall not be required).
If no successor Agent shall have been so appointed by the Required Banks, and
shall have accepted such appointment, within 30 days after the retiring Agent
gives notice of resignation, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent, which shall be a commercial bank organized or
licensed under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $250,000,000 or a
commercial bank organized under the laws of any country which is a member of the
Organization for Economic Cooperation and Development, or a political
subdivision of any such country, and having a combined capital and surplus of at
least $250,000,000, provided that such bank is acting through a branch or agency
located in the United States. Upon the acceptance of its appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent.

            SECTION 7.09. Agent's Fee. The Borrower shall pay to the Agent for
its own account fees in the amounts and at the times previously agreed upon
between the Borrower and the Agent.

            SECTION 7.10. Arrangers. The Borrower and the Banks acknowledge and
agree that (a) Arrangers do not have any duties or responsibilities hereunder in
their capacities as such and (b) shall be entitled to the benefit of Sections
7.05 and 7.06 to the same extent as the Agent.

                                  ARTICLE VIII

                             Change in Circumstances

            SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any CD Loan,
Euro-Dollar Loan or Money Market LIBOR Loan:

                                       55
<PAGE>

            (a) the Agent is advised by the Reference Banks that deposits in the
      applicable currency (in the applicable amounts) are not being offered to
      the Reference Banks in the relevant market for such Interest Period, or

            (b) in the case of CD Loans or Euro-Dollar Loans, Banks having 50%
      or more of the aggregate principal amount of the affected Loans advise the
      Agent that the Adjusted CD Rate or the London Interbank Offered Rate, as
      the case may be, as determined by the Agent will not adequately and fairly
      reflect the cost to such Banks of funding their CD Loans or Euro-Dollar
      Loans, as the case may be, for such Interest Period,

the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, (i) the obligations of the Banks to
make CD Loans or Euro-Dollar Loans, as the case may be, or to convert
outstanding Loans into or continue outstanding Loans as CD Loans or Euro-Dollar
Loans, as the case may be, shall be suspended and (ii) each outstanding CD Loan
or Euro-Dollar Loan, as the case may be, shall be converted into a Base Rate
Loan on the last day of the then current Interest Period applicable thereto.
Unless the Borrower notifies the Agent at least two Domestic Business Days
before the date of any Fixed Rate Borrowing for which a Notice of Borrowing has
previously been given that it elects not to borrow on such date, (i) if such
Fixed Rate Borrowing is a Committed Borrowing, such Borrowing shall instead be
made as a Base Rate Borrowing and (ii) if such Fixed Rate Borrowing is a Money
Market LIBOR Borrowing, the Money Market LIBOR Loans comprising such Borrowing
shall bear interest for each day from and including the first day to but
excluding the last day of the Interest Period applicable thereto at the Base
Rate for such day.

            SECTION 8.02. Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any change
in any applicable law, rule or regulation, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank (or its Euro-Dollar Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable

                                       56
<PAGE>

agency shall make it unlawful or impossible for any Bank (or its Euro-Dollar
Lending Office) to make, maintain or fund its Euro-Dollar Loans and such Bank
shall so notify the Agent, the Agent shall forthwith give notice thereof to the
other Banks and the Borrower, whereupon until such Bank notifies the Borrower
and the Agent that the circumstances giving rise to such suspension no longer
exist, the obligation of such Bank to make Euro-Dollar Loans, or to convert
outstanding Loans into or continue outstanding Loans as Euro-Dollar Loans, shall
be suspended. Before giving any notice to the Agent pursuant to this Section,
such Bank shall designate a different Euro-Dollar Lending Office if such
designation will avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. If such Bank
shall determine that it may not lawfully continue to maintain and fund any of
its outstanding Euro-Dollar Loans to maturity and shall so specify in such
notice, the Borrower shall immediately prepay in full the then outstanding
principal amount of each such Euro-Dollar Loan, together with accrued interest
thereon. Concurrently with prepaying each such Euro-Dollar Loan, the Borrower
shall borrow a Base Rate Loan in an equal principal amount from such Bank (on
which interest and principal shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Banks), and such Bank shall make such a Base Rate
Loan.

            SECTION 8.03. Increased Cost and Reduced Return. (a) If on or after
(x) the date hereof, in the case of any Committed Loan or any obligation to make
Committed Loans or (y) the date of the related Money Market Quote, in the case
of any Money Market Loan, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall impose, modify or
deem applicable any reserve (including, without limitation, any such requirement
imposed by the Board of Governors of the Federal Reserve System, but excluding
(A) with respect to any CD Loan any such requirement included in an applicable
Domestic Reserve Percentage and (B) with respect to any Euro-Dollar Loan any
such requirement included in an applicable Euro-Dollar Reserve Percentage),
special

                                       57
<PAGE>

deposit, insurance assessment (excluding, with respect to any CD Loan, any such
requirement reflected in an applicable Assessment Rate) or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
any Bank (or its Applicable Lending Office) or shall impose on any Bank (or its
Applicable Lending Office) or on the United States market for certificates of
deposit or the London interbank market any other condition affecting its Fixed
Rate Loans, its Note or its obligation to make Fixed Rate Loans, and the result
of any of the foregoing is to increase the cost to such Bank (or its Applicable
Lending Office) of making or maintaining any Fixed Rate Loan, or to reduce the
amount of any sum received or receivable by such Bank (or its Applicable Lending
Office) under this Agreement or under its Note with respect thereto, by an
amount deemed by such Bank to be material, then, within 15 days after demand by
such Bank (with a copy to the Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such increased
cost or reduction.

            (b) If any Bank shall have determined that, after the date hereof,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Bank (or its Parent) as a consequence of such Bank's
obligations hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time, within 15 days after
demand by such Bank (with a copy to the Agent), the Borrower shall pay to such
Bank such additional amount or amounts as will compensate such Bank (or its
Parent) for such reduction.

            (c) Each Bank will promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section and will designate a
different Applicable Lending Office or attempt

                                       58
<PAGE>

to assign its Loans to a different branch or affiliate of such Bank, as
applicable, if such designation or assignment will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. A certificate of any Bank claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods. The Borrower shall not be obligated to
compensate any Bank pursuant to this Section for increased costs or reduced
return accruing prior to the date which is 90 days before such Bank requests
compensation (in the case of a request for compensation pursuant to subsection
(a) above) or prior to the first day of the most recent fiscal year of such Bank
ending more than 90 days before such Bank requests compensation (in the case of
a request for compensation pursuant to subsection (b) above).

            SECTION 8.04. Taxes. (a) For purposes of this Section 8.04, the
following terms have the following meanings:

            "Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings with respect to any payment by the
Borrower pursuant to this Agreement or under any Note, and all liabilities with
respect thereto, excluding (i) in the case of each Bank and the Agent, taxes
imposed on its income, and franchise or similar taxes imposed on it, by a
jurisdiction under the laws of which such Bank or the Agent (as the case may be)
is organized or in which its principal executive office is located or, in the
case of each Bank, in which its Applicable Lending Office is located and (ii) in
the case of each Bank, any United States withholding tax imposed on such
payments but only to the extent that such Bank is subject to United States
withholding tax at the time such Bank first becomes party to this Agreement.

            "Other Taxes" means any present or future stamp or documentary taxes
and any other excise or property taxes, or similar charges or levies, which
arise from any payment made pursuant to this Agreement or under any Note or from
the execution or delivery of, or otherwise with respect to, this Agreement or
any Note.

                                       59
<PAGE>

            (b) Any and all payments by the Borrower to or for the account of
any Bank or the Agent hereunder or under any Note shall be made without
deduction for any Taxes or Other Taxes; provided that, if the Borrower shall be
required by law to deduct any Taxes or Other Taxes from any such payments, (i)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 8.04) such Bank or the Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law and (iv) the Borrower shall furnish to the Agent,
at its address referred to in Section 9.01, the original or a certified copy of
a receipt evidencing payment thereof.

            (c) The Borrower agrees to indemnify each Bank and the Agent for the
full amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section 8.04) paid by such Bank or the Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto. This indemnification shall be paid within 15 days after such
Bank or the Agent (as the case may be) makes demand therefor.

            (d) Each Bank organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and on
or prior to the date on which it becomes a Bank in the case of each other Bank,
and from time to time thereafter if requested in writing by the Borrower (but
only so long as such Bank remains lawfully able to do so), shall provide the
Borrower with Internal Revenue Service Form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Bank is entitled to benefits under an income tax treaty to which the United
States is a party which exempts the Bank from United States withholding tax or
reduces the rate of withholding tax on payments of interest for the account of
such Bank or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States.

                                       60
<PAGE>

            (e) For any period with respect to which a Bank has failed to
provide the Borrower with the appropriate form pursuant to Section 8.04(d)
(unless such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which such form originally was required to be
provided), such Bank shall not be entitled to indemnification under Section
8.04(b) or (c) with respect to Taxes imposed by the United States; provided that
if a Bank, which is otherwise exempt from or subject to a reduced rate of
withholding tax, becomes subject to Taxes because of its failure to deliver a
form required hereunder, the Borrower shall take such steps as such Bank shall
reasonably request to assist such Bank to recover such Taxes.

            (f) If the Borrower is required to pay additional amounts to or for
the account of any Bank pursuant to this Section 8.04, then such Bank will
change the jurisdiction of its Applicable Lending Office if, in the judgment of
such Bank, such change (i) will eliminate or reduce any such additional payment
which may thereafter accrue and (ii) is not otherwise disadvantageous to such
Bank. The Borrower will not be obligated to indemnify any
Bank pursuant to Section 8.04(c) for any amounts payable thereunder accruing
more than 90 days prior to the date that such Bank requests compensation
therefor.

            SECTION 8.05. Base Rate Loans Substituted for Affected Fixed Rate
Loans. If (i) the obligation of any Bank to make or maintain Euro-Dollar Loans
has been suspended pursuant to Section 8.02 or (ii) any Bank has demanded
compensation under Section 8.03 or 8.04 with respect to its CD Loans or
Euro-Dollar Loans and the Borrower shall, by at least five Euro-Dollar Business
Days prior notice to such Bank through the Agent, have elected that the
provisions of this Section shall apply to such Bank, then, unless and until such
Bank notifies the Borrower that the circumstances giving rise to such suspension
or demand for compensation no longer apply:

            (a) all Loans which would otherwise be made by such Bank as (or
      continued as or converted into) CD Loans or Euro-Dollar Loans, as the case
      may be, shall instead be Base Rate Loans (on which interest and principal
      shall be payable contemporaneously with the related Fixed Rate Loans of
      the other Banks), and

                                       61
<PAGE>

            (b) after each of its CD Loans or Euro-Dollar Loans, as the case may
      be, has been repaid (or converted to a Base Rate Loan), all payments of
      principal which would otherwise be applied to repay such Fixed Rate Loans
      shall be applied to repay its Base Rate Loans instead.

            SECTION 8.06. Substitution of Bank. (a) If (i) the obligation of any
Bank to make or maintain Euro- Dollar Loans has been suspended pursuant to
Section 8.02 or (ii) any Bank (or any Participant in its Loans) has demanded
compensation under Section 8.03 or 8.04, the Borrower shall have the right to
seek a bank or banks ("Substitute Banks"), which may be one or more of the Banks
or one or more other banks satisfactory to the Agent, to purchase the Note or
Notes and assume the Commitment of such Bank (the "Affected Bank") and, if the
Borrower locates a Substitute Bank, the Affected Bank shall, upon payment to it
of the purchase price agreed between it and the Substitute Bank (or, failing
such agreement, a purchase price in the amount of the outstanding principal
amount of its Loans and accrued interest thereon to the date of payment) plus
any amount (other than principal and interest) then due to it or accrued for its
account hereunder, assign all its rights and obligations under this Agreement
and the Notes (including its Commitment and its Loans) to the Substitute Bank,
and the Substitute Bank shall assume such rights and obligations, whereupon the
Substitute Bank shall be a Bank party to this Agreement and shall have all the
rights and obligations of a Bank with a Commitment equal to the Commitment so
assigned and assumed.

            (b) Notwithstanding the provisions of subsection (a) above, if an
Affected Bank shall have outstanding Money Market Loans at the time it is
required to assign its rights and obligations under this Agreement and its Note
or Notes to a Substitute Bank, such Affected Bank shall not be obligated to so
assign its rights with respect to such Money Market Loans prior to the maturity
date thereof and shall not be obligated to deliver its Note or Notes to the
Substitute Bank until it shall have received a new Note or Notes from the
Borrower to evidence such Money Market Loans.

                                       62
<PAGE>

                                   ARTICLE IX

                                  Miscellaneous

            SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (x) in the case of the Borrower or the Agent, at its address or telex or
telecopy number set forth on the signature pages hereof, (y) in the case of any
Bank, at its address or telex or telecopy number set forth in its Administrative
Questionnaire or (z) in the case of any party, such other address or telex or
telecopy number as such party may hereafter specify for the purpose by notice to
the Agent and the Borrower; provided that notices, requests and other
communications to the Borrower shall not be communicated by telex. Each such
notice, request or other communication shall be effective (i) if given by telex,
when such telex is transmitted to the telex number specified in this Section and
the appropriate answerback is received, (ii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means, when delivered at
the address or received at the telecopy number specified in this Section;
provided that notices to the Agent under Article II or Article VIII shall not be
effective until received.

            SECTION 9.02. No Waivers. No failure or delay by the Agent or any
Bank in exercising any right, power or privilege hereunder or under any Note
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.

            SECTION 9.03. Expenses; Indemnification. (a) The Borrower shall pay
(i) all reasonable out-of- pocket expenses of the Agent, including reasonable
fees and disbursements of special counsel for the Agent, in connection with the
preparation of this Agreement, any waiver or consent hereunder or any amendment
hereof or any Default or alleged Default hereunder and (ii) if an Event of
Default occurs, all out-of-pocket expenses incurred by the Agent and each Bank,
including fees and disbursements of counsel, in connection with such Event of
Default and collection,

                                       63
<PAGE>

bankruptcy, insolvency and other enforcement proceedings resulting therefrom.

            (b) The Borrower agrees to indemnify each Bank and hold each Bank
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by any Bank (or by the Agent in
connection with its actions as Agent hereunder) in connection with any
investigative, administrative or judicial proceeding (whether or not such Bank
shall be designated a party thereto) relating to or arising out of this
Agreement or any actual or proposed use of proceeds of Loans hereunder; provided
that no Bank shall have the right to be indemnified hereunder for its own gross
negligence or willful misconduct as determined by a court of competent
jurisdiction.

            SECTION 9.04. Sharing of Set-Offs. Each Bank agrees that if it
shall, by exercising any right of set-off or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest due
with respect to any Note held by it which is greater than the proportion
received by any other Bank in respect of the aggregate amount of principal and
interest due with respect to any Note held by such other Bank, the Bank
receiving such proportionately greater payment shall purchase such participation
in the Notes held by the other Banks, and such other adjustments shall be made,
as may be required so that all such payments of principal and interest with
respect to the Notes held by the Banks shall be shared by the Banks pro rata;
provided that nothing in this Section shall impair the right of any Bank to
exercise any right of set-off or counterclaim it may have and to apply the
amount subject to such exercise to the payment of indebtedness of the Borrower
other than its indebtedness under the Notes. The Borrower agrees, to the fullest
extent it may effectively do so under applicable law, that any holder of a
participation in a Note acquired pursuant to the foregoing arrangements may
exercise rights of set- off or counterclaim and other rights with respect to
such participation as fully as if such holder of a participation were a direct
creditor of the Borrower in the amount of such participation.

            SECTION 9.05. Amendments and Waivers. Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such amendment
or waiver is in

                                       64
<PAGE>

writing and is signed by the Borrower and the Required Banks (and, if the rights
or duties of the Agent are affected thereby, by the Agent); provided that:

            (a) no such amendment or waiver shall, unless signed by all the
      Banks, (i) increase or decrease the Commitment of any Bank (except for a
      ratable decrease in the Commitments of all Banks) or subject any Bank to
      any additional obligation, (ii) reduce the principal of or rate of
      interest on any Committed Loan or any fees hereunder, (iii) postpone the
      date fixed for any payment of principal of or interest on any Committed
      Loan or any fees hereunder or for any termination of any Commitment, (iv)
      change the percentage of the Commitments or of the aggregate unpaid
      principal amount of the Notes, or the number of Banks, which shall be
      required for the Banks or any of them to take any action under this
      Section or any other provision of this Agreement, or (v) amend, waive or
      modify the provisions of this Section 9.05; and

            (b) no such amendment or waiver shall, unless signed by each
      affected Bank, (i) reduce the principal of or rate of interest on any
      Money Market Loan, or (ii) postpone the date fixed for any payment of
      principal of or interest on any Money Market Loan.

            SECTION 9.06. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Borrower may not
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of all Banks.

            (b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Agent, such Bank shall remain responsible for the performance
of its obligations hereunder, and the Borrower and the Agent shall continue to
deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement. Any agreement pursuant to which any Bank
may grant such a participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the

                                       65
<PAGE>

obligations of the Borrower hereunder including, without limitation, the right
to approve any amendment, modification or waiver of any provision of this
Agreement; provided that such participation agreement may provide that such Bank
will not agree to any modification, amendment or waiver of this Agreement
described in clause (i), (ii) or (iii) of Section 9.05 without the consent of
the Participant. The Borrower agrees that each Participant shall, to the extent
provided in its participation agreement and subject to the provisions of Section
9.06(e), be entitled to the benefits of Article VIII with respect to its
participating interest. An assignment or other transfer which is not permitted
by subsection (c) or (d) below shall be given effect for purposes of this
Agreement only to the extent of a participating interest granted in accordance
with this subsection (b).

            (c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part of all (but, in
the case of a partial assignment, not less than a part representing a Commitment
of $10,000,000), of its rights and obligations under this Agreement and the
Notes, and such Assignee shall assume such rights and obligations, pursuant to
an Assignment and Assumption Agreement in substantially the form of Exhibit F
hereto executed by such Assignee and such transferor Bank, with (and subject to)
the subscribed consent of the Agent (which consent shall not be unreasonably
withheld) and the Borrower; provided that (i) such assignment may, but need not,
include rights of the transferor Bank in respect of outstanding Money Market
Loans and (ii) unless the Borrower otherwise consents, the transferor Bank shall
not assign any of its rights and obligations under this Agreement while the
Other Credit Agreement remains in effect without assigning the same percentage
of its rights and obligations under the Other Credit Agreement, except that this
clause (ii) shall not apply to any transfer required under paragraph (d) of
Section 2.19 of the Other Credit Agreement. Upon execution and delivery of such
instrument and payment by such Assignee to such transferor Bank of an amount
equal to the purchase price agreed between such transferor Bank and such
Assignee, such Assignee shall be a Bank party to this Agreement and shall have
all the rights and obligations of a Bank with a Commitment as set forth in such
instrument of assumption, and the transferor Bank shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required.

                                       66
<PAGE>

Upon the consummation of any assignment pursuant to this subsection (c), the
transferor Bank, the Agent and the Borrower shall make appropriate arrangements
so that, if required, a new Note is issued to the Assignee. In connection with
any such assignment, the transferor Bank shall pay to the Agent an
administrative fee for processing such assignment in the amount of $2,000. If
the Assignee is not incorporated under the laws of the United States of America
or a state thereof, it shall, prior to the first date on which interest or fees
are payable hereunder for its account, deliver to the Borrower and the Agent
certification as to exemption from deduction or withholding of any United States
federal income taxes in accordance with Section 8.04.

            (d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note to a Federal Reserve Bank. No such assignment
shall release the transferor Bank from its obligations hereunder.

            (e) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 8.03 than
such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 8.02, 8.03 or 8.04 requiring
such Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.

            SECTION 9.07. Collateral. Each of the Banks represents to the Agent
and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.

            SECTION 9.08. Governing Law; Submission to Jurisdiction. This
Agreement and each Note shall be governed by and construed in accordance with
the laws of the State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
for purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Borrower irrevocably
waives, to the fullest extent

                                       67
<PAGE>

permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.

            SECTION 9.09. Counterparts; Integration. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof.

            SECTION 9.10. Confidentiality. Any information disclosed by the
Borrower to the Agent or any of the Banks, which was either (x) so disclosed on
or before the Effective Date or (y) designated proprietary or confidential at
the time of receipt thereof by the Agent or such Bank, if such information is
not otherwise in the public domain, shall not be disclosed by the Agent or such
Bank to any other Person except (i) to its directors, officers, employees and
agents, including its independent accountants and legal counsel (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such information and instructed to keep such
information confidential), (ii) pursuant to statutory and regulatory
requirements, (iii) pursuant to any mandatory court order, subpoena or other
legal process, (iv) to the Agent or any other Bank, (v) pursuant to any
agreement heretofore or hereafter made between such Bank and the Borrower which
permits such disclosure, (vi) in connection with the exercise of any remedy
under this Agreement or the Notes or (vii) subject to an agreement containing
provisions substantially the same as those of this Section, to any participant
in or assignee of, or prospective participant in or assignee of, any Loan or
Commitment. The provisions of this Section 9.10 shall be deemed satisfied by
each Bank if and to the extent such Bank shall have used its reasonable best
efforts to maintain the confidentiality of the data or information referred to
above, exercising the same degree of care that such Bank would accord to its own
confidential information or documents.

            SECTION 9.11. Waiver Under Existing Credit Agreement. By its
execution hereof, each undersigned Bank

                                       68
<PAGE>

that also is a party to the Existing Credit Agreement hereby waives the
provisions of the Existing Credit Agreement that would require advance notice
for the termination of commitments thereunder or the prepayment of loans
thereunder; provided that (a) the foregoing waiver shall apply only to the
termination of all commitments under the Existing Credit Agreement and repayment
of all loans outstanding thereunder in connection with the effectiveness of this
Agreement and (b) the Borrower shall, in lieu of advance notice of any such
termination or prepayment, give notice thereof to the Agent (as defined in the
Existing Credit Agreement) on the date of such termination or prepayment.

            SECTION 9.12. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE AGENT
AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

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

                                    THE CHUBB CORPORATION,

                                    by
                                       _____________________________
                                         Name:
                                         Title:

                                         15 Mountainview Road
                                         Warren, New Jersey 07059
                                         Attention:

                                       69
<PAGE>

Commitments

                                        DEUTSCHE BANK AG, NEW YORK BRANCH

                                    by
                                        ______________________________________
                                        Name:
                                        Title:

                                    by
                                        _______________________________________
                                        Name:
                                        Title:

                                    CITIBANK, N.A.
                                    by
                                       ________________________________________
                                       Name:
                                       Title:

                                    [                         ]

                                    by
                                       ________________________________________
                                       Name:
                                       Title:

Total Commitments

$250,000,000

                                       70
<PAGE>

                                    DEUTSCHE BANK AG NEW YORK BRANCH,
                                    as Agent,

                                    by
                                       ________________________________________
                                       Name:
                                       Title:

                                    by
                                       ________________________________________
                                       Name:
                                       Title:

                                       71

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}]]