Document:

Exhibit 10.1

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

DATED AS OF JUNE 13, 2005

 

 

AMONG

 

CIMAREX ENERGY CO.,

AS BORROWER,

 

THE LENDERS,

 

JPMORGAN CHASE BANK, N.A.,

AS ADMINISTRATIVE AGENT,

 

U.S. BANK NATIONAL ASSOCIATION,

AS CO-SYNDICATION AGENT,

 

BANK OF AMERICA, N.A.,

AS CO-SYNDICATION AGENT

 

AND

 

WELLS FARGO BANK, N.A.,

AS DOCUMENTATION AGENT

 

 

 

 

$1,000,000,000

 

 

J.P. MORGAN SECURITIES INC.,

AS LEAD ARRANGER AND SOLE BOOK RUNNER

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  ARTICLE II THE CREDITS

  	
   

  
	
  Section 2.1.

  	
  Commitment

  	
   

  
	
  Section 2.2.

  	
  Required
  Payments; Termination

  	
   

  
	
  Section 2.3.

  	
  Ratable
  Loans

  	
   

  
	
  Section 2.4.

  	
  Types
  of Advances

  	
   

  
	
  Section 2.5.

  	
  Commitment
  Fee; Initial Aggregate Commitment; Changes in Aggregate Commitment

  	
   

  
	
  Section 2.6.

  	
  Borrowing
  Base and Required Reserve Value

  	
   

  
	
  Section 2.7.

  	
  Minimum
  Amount of Each Advance

  	
   

  
	
  Section 2.8.

  	
  Principal
  Payments

  	
   

  
	
  Section 2.9.

  	
  Method
  of Selecting Types and Interest Periods for new Advances

  	
   

  
	
  Section 2.10.

  	
  Conversion
  and Continuation of Outstanding Advances

  	
   

  
	
  Section 2.11.

  	
  Changes
  in Interest Rate, etc.

  	
   

  
	
  Section 2.12.

  	
  Rates
  Applicable After Default

  	
   

  
	
  Section 2.13.

  	
  Method
  of Payment

  	
   

  
	
  Section 2.14.

  	
  Evidence
  of Indebtedness

  	
   

  
	
  Section 2.15.

  	
  Telephonic
  Notices

  	
   

  
	
  Section 2.16.

  	
  Interest
  Payment Dates; Interest and Fee Basis

  	
   

  
	
  Section 2.17.

  	
  Notification
  of Advances, Interest Rates, Prepayments and Commitment Reductions

  	
   

  
	
  Section 2.18.

  	
  Lending
  Installations

  	
   

  
	
  Section 2.19.

  	
  Non-Receipt
  of Funds by the Administrative Agent

  	
   

  
	
  Section 2.20.

  	
  Facility
  LCs

  	
   

  
	
  Section 2.21.

  	
  Replacement
  of Lender

  	
   

  
	
  Section 2.22.

  	
  Limitation
  of Interest

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III YIELD PROTECTION; TAXES

  	
   

  
	
  Section 3.1.

  	
  Yield
  Protection

  	
   

  
	
  Section 3.2.

  	
  Changes
  in Capital Adequacy Regulations

  	
   

  
	
  Section 3.3.

  	
  Taxes.

  	
   

  
	
  Section 3.4.

  	
  Availability of Types of Advances

  	
   

  
	
  Section 3.5.

  	
  Funding Indemnification

  	
   

  
	
  Section 3.6.

  	
  Lender Statements; Survival of Indemnity

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV CONDITIONS PRECEDENT

  	
   

  
	
  Section 4.1.

  	
  Initial Credit Extension

  	
   

  
	
  Section 4.2.

  	
  Each Credit Extension

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V REPRESENTATIONS AND WARRANTIES

  	
   

  
	
  Section 5.1.

  	
  Existence and Standing

  	
   

  
	
  Section 5.2.

  	
  Authorization and Validity

  	
   

  
	
  Section 5.3.

  	
  No Conflict; Government Consent

  	
   

  
	
  Section 5.4.

  	
  Financial Statements

  	
   

  

 

i

 

	
  Section 5.5.

  	
  Material Adverse Change

  	
   

  
	
  Section 5.6.

  	
  Taxes

  	
   

  
	
  Section 5.7.

  	
  Litigation and Contingent Obligations

  	
   

  
	
  Section 5.8.

  	
  Subsidiaries

  	
   

  
	
  Section 5.9.

  	
  ERISA

  	
   

  
	
  Section 5.10.

  	
  Accuracy of Information

  	
   

  
	
  Section 5.11.

  	
  Regulation U

  	
   

  
	
  Section 5.12.

  	
  Material
  Agreements

  	
   

  
	
  Section 5.13.

  	
  Compliance
  With Laws

  	
   

  
	
  Section 5.14.

  	
  Ownership
  of Properties

  	
   

  
	
  Section 5.15.

  	
  Plan
  Assets; Prohibited Transactions

  	
   

  
	
  Section 5.16.

  	
  Environmental
  Matters

  	
   

  
	
  Section 5.17.

  	
  Investment
  Company Act

  	
   

  
	
  Section 5.18.

  	
  Public
  Utility Holding Company Act

  	
   

  
	
  Section 5.19.

  	
  Insurance

  	
   

  
	
  Section 5.20.

  	
  Solvency

  	
   

  
	
  Section 5.21.

  	
  Closing
  Documents

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI AFFIRMATIVE COVENANTS

  	
   

  
	
  Section 6.1.

  	
  Financial Report

  	
   

  
	
  Section 6.2.

  	
  Use of Proceeds

  	
   

  
	
  Section 6.3.

  	
  Notice of Default

  	
   

  
	
  Section 6.4.

  	
  Conduct of Business

  	
   

  
	
  Section 6.5.

  	
  Taxes

  	
   

  
	
  Section 6.6.

  	
  Insurance

  	
   

  
	
  Section 6.7.

  	
  Compliance With Laws

  	
   

  
	
  Section 6.8.

  	
  Maintenance of Properties

  	
   

  
	
  Section 6.9.

  	
  Inspection

  	
   

  
	
  Section 6.10.

  	
  Permitted
  Bond Documents; 9.60% Senior Notes Refinancing Documents

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII NEGATIVE COVENANTS

  	
   

  
	
  Section 7.1.

  	
  Restricted Payments

  	
   

  
	
  Section 7.2.

  	
  Indebtedness

  	
   

  
	
  Section 7.3.

  	
  Merger

  	
   

  
	
  Section 7.4.

  	
  Sale of Assets

  	
   

  
	
  Section 7.5.

  	
  Investments

  	
   

  
	
  Section 7.6.

  	
  Liens

  	
   

  
	
  Section 7.7.

  	
  Affiliates

  	
   

  
	
  Section 7.8.

  	
  Sale of Accounts

  	
   

  
	
  Section 7.9.

  	
  Sale and Leaseback Transactions and other
  Off-Balance Sheet Liabilities

  	
   

  
	
  Section 7.10.

  	
  Contingent
  Obligations

  	
   

  
	
  Section 7.11.

  	
  Financial
  Contracts

  	
   

  
	
  Section 7.12.

  	
  Letters
  of Credit

  	
   

  
	
  Section 7.13.

  	
  Prohibited
  Contracts

  	
   

  
	
  Section 7.14.

  	
  Senior
  Note Documents; Permitted Bond Documents; 9.60% Senior Notes Refinancing
  Documents

  	
   

  

 

ii

 

	
  ARTICLE VIII FINANCIAL COVENANTS

  	
   

  
	
  Section 8.1.

  	
  Current Ratio

  	
   

  
	
  Section 8.2.

  	
  Leverage Ratio

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX COLLATERAL AND GUARANTEES

  	
   

  
	
  Section 9.1.

  	
  Collateral

  	
   

  
	
  Section 9.2.

  	
  Guarantees

  	
   

  
	
  Section 9.3.

  	
  Further Assurances

  	
   

  
	
  Section 9.4.

  	
  Production Proceeds

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X DEFAULTS

  	
   

  
	
   

  	
   

  
	
  ARTICLE XI ACCELERATION, WAIVERS,
  AMENDMENTS AND REMEDIES

  	
   

  
	
  Section 11.1.

  	
  Acceleration; Facility LC Collateral Account

  	
   

  
	
  Section 11.2.

  	
  Amendments

  	
   

  
	
  Section 11.3.

  	
  Preservation
  of Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII GENERAL PROVISIONS

  	
   

  
	
  Section 12.1.

  	
  Survival
  of Representations

  	
   

  
	
  Section 12.2.

  	
  Governmental
  Regulation

  	
   

  
	
  Section 12.3.

  	
  Headings

  	
   

  
	
  Section 12.4.

  	
  Entire
  Agreement

  	
   

  
	
  Section 12.5.

  	
  Several
  Obligations; Benefits of this Agreement

  	
   

  
	
  Section 12.6.

  	
  Expenses; Indemnification.

  	
   

  
	
  Section 12.7.

  	
  Numbers
  of Documents

  	
   

  
	
  Section 12.8.

  	
  Accounting

  	
   

  
	
  Section 12.9.

  	
  Severability
  of Provisions

  	
   

  
	
  Section 12.10.

  	
  Nonliability
  of Lenders

  	
   

  
	
  Section 12.11.

  	
  Confidentiality

  	
   

  
	
  Section 12.12.

  	
  Nonreliance

  	
   

  
	
  Section 12.13.

  	
  Disclosure

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII THE ADMINISTRATIVE AGENT

  	
   

  
	
  Section 13.1.

  	
  Appointment;
  Nature of Relationship

  	
   

  
	
  Section 13.2.

  	
  Powers

  	
   

  
	
  Section 13.3.

  	
  General
  Immunity

  	
   

  
	
  Section 13.4.

  	
  No
  Responsibility for Loans, Recitals, etc.

  	
   

  
	
  Section 13.5.

  	
  Action
  on Instructions of Lenders

  	
   

  
	
  Section 13.6.

  	
  Employment
  of Agents and Counsel

  	
   

  
	
  Section 13.7.

  	
  Reliance
  on Documents; Counsel

  	
   

  
	
  Section 13.8.

  	
  Administrative
  Agent’s Reimbursement and Indemnification

  	
   

  
	
  Section 13.9.

  	
  Notice of Default

  	
   

  
	
  Section 13.10.

  	
  Rights
  as a Lender

  	
   

  
	
  Section 13.11.

  	
  Lender
  Credit Decision

  	
   

  
	
  Section 13.12.

  	
  Successor
  Administrative Agent

  	
   

  
	
  Section 13.13.

  	
  Administrative
  Agent and Arranger Fees

  	
   

  
	
  Section 13.14.

  	
  Delegation
  to Affiliates

  	
   

  
	
  Section 13.15.

  	
  Execution
  of Collateral Documents

  	
   

  
	
  Section 13.16.

  	
  Collateral
  Releases

  	
   

  

 

iii

 

	
  Section 13.17.

  	
  Documentation
  Agent, Syndication Agent, etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV SETOFF; RATABLE PAYMENTS

  	
   

  
	
  Section 14.1.

  	
  Setoff

  	
   

  
	
  Section 14.2.

  	
  Ratable
  Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV BENEFIT OF AGREEMENT;
  ASSIGNMENTS; PARTICIPATIONS

  	
   

  
	
  Section 15.1.

  	
  Successors
  and Assigns

  	
   

  
	
  Section 15.2.

  	
  Participations

  	
   

  
	
  Section 15.3.

  	
  Assignments

  	
   

  
	
  Section 15.4.

  	
  Dissemination
  of Information

  	
   

  
	
  Section 15.5.

  	
  Tax
  Treatment

  	
   

  
	
  Section 15.6.

  	
  Procedure
  for Increases and Addition of New Lenders

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVI NOTICES

  	
   

  
	
  Section 16.1.

  	
  Notices

  	
   

  
	
  Section 16.2.

  	
  Change
  of Address

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVII COUNTERPARTS

  	
   

  
	
   

  	
   

  
	
  ARTICLE XVIII CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF
  JURY TRIAL

  	
   

  
	
  Section 18.1.

  	
  CHOICE OF LAW

  	
   

  
	
  Section 18.2.

  	
  CONSENT
  TO JURISDICTION 

  	
   

  
	
  Section 18.3.

  	
  WAIVER
  OF JURY TRIAL

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIX USA PATRIOT ACT NOTICE

  	
   

  
	
   

  	
   

  
	
  ARTICLE XX AMENDMENT AND RESTATEMENT

  	
   

  

 

iv

 

	
  SCHEDULE 1 PRICING SCHEDULE

  	
   

  
	
   

  	
   

  
	
  SCHEDULE 2 LENDERS SCHEDULE

  	
   

  
	
   

  	
   

  
	
  SCHEDULE 3 DISCLOSURE SCHEDULE

  	
   

  
	
   

  	
   

  
	
  SCHEDULE 4 EXISTING FINANCIAL
  CONTRACTS

  	
   

  
	
   

  	
   

  
	
  EXHIBIT A NOTE

  	
   

  
	
   

  	
   

  
	
  EXHIBIT B COMPLIANCE CERTIFICATE

  	
   

  
	
   

  	
   

  
	
  EXHIBIT C ASSIGNMENT AND ASSUMPTION
  AGREEMENT

  	
   

  
	
   

  	
   

  
	
  EXHIBIT D OPINION

  	
   

  
	
   

  	
   

  
	
  EXHIBIT E GUARANTY

  	
   

  
	
   

  	
   

  
	
  EXHIBIT F FORM OF AMENDMENT FOR AN
  INCREASED OR NEW COMMITMENT

  	
   

  
	
   

  	
   

  
	
  EXHIBIT G -1 FORM OF PLEDGE AGREEMENT (CORPORATION)

  	
   

  
	
   

  	
   

  
	
  EXHIBIT G-2 FORM OF PLEDGE AGREEMENT (PARTNERSHIP)

  	
   

  
	
   

  	
   

  
	
  EXHIBIT G-3 FORM OF PLEDGE AGREEMENT (LIMITED LIABILITY COMPANY)

  	
   

  
	
   

  	
   

  
	
  EXHIBIT H FORM OF CONFIDENTIALITY
  AGREEMENT

  	
   

  
	
   

  	
   

  
	
  EXHIBIT I FORM OF CERTIFICATE OF
  EFFECTIVENESS

  	
   

  

 

v

 

LIST OF DEFINED TERMS

 

	
  9.60% Senior Notes

  	
   

  
	
  9.60% Senior Notes
  Indenture

  	
   

  
	
  9.60% Senior Notes
  Refinancing

  	
   

  
	
  9.60% Senior Notes
  Refinancing Documents

  	
   

  
	
  9.60% Senior Notes
  Supplemental Indenture

  	
   

  
	
  Acquisition

  	
   

  
	
  Administrative
  Agent

  	
   

  
	
  Advance

  	
   

  
	
  Affected Lender

  	
   

  
	
  Affiliate

  	
   

  
	
  Aggregate
  Commitment

  	
   

  
	
  Aggregate
  Outstanding Credit Exposure

  	
   

  
	
  Agreement

  	
   

  
	
  Agreement
  Accounting Principles

  	
   

  
	
  Alternate Base Rate

  	
   

  
	
  Amendments to
  Existing Cimarex Mortgages

  	
   

  
	
  Annualized
  Consolidated EBITDA

  	
   

  
	
  Applicable Fee Rate

  	
   

  
	
  Applicable Margin

  	
   

  
	
  Arranger

  	
   

  
	
  Article

  	
   

  
	
  Authorized Officer

  	
   

  
	
  Available Aggregate
  Commitment

  	
   

  
	
  Borrower

  	
   

  
	
  Borrower/MHR Merger

  	
   

  
	
  Borrower/MHR Merger
  Agreement

  	
   

  
	
  Borrower/MHR Merger
  Articles

  	
   

  
	
  Borrower/MHR Merger
  Documents

  	
   

  
	
  Borrowing Base

  	
   

  
	
  Borrowing Base
  Properties

  	
   

  
	
  Borrowing Base
  Usage Percentage

  	
   

  
	
  Borrowing Date

  	
   

  
	
  Borrowing Notice

  	
   

  
	
  Business Day

  	
   

  
	
  Calculation Period

  	
   

  
	
  Capitalized Lease

  	
   

  
	
  Capitalized Lease
  Obligations

  	
   

  
	
  Cash Equivalent
  Investments

  	
   

  
	
  Certificate of
  Effectiveness

  	
   

  
	
  Change

  	
   

  
	
  Change in Control

  	
   

  
	
  Closing Date

  	
   

  
	
  Closing Documents

  	
   

  

 

vi

 

	
  Closing
  Transactions

  	
   

  
	
  CNAC

  	
   

  
	
  Code

  	
   

  
	
  Collateral

  	
   

  
	
  Collateral
  Documents

  	
   

  
	
  Collateral
  Shortfall Amount

  	
   

  
	
  Commitment

  	
   

  
	
  Confidential Information

  	
   

  
	
  Consolidated EBITDA

  	
   

  
	
  Consolidated Funded
  Indebtedness

  	
   

  
	
  Consolidated
  Indebtedness

  	
   

  
	
  Consolidated
  Interest Expense

  	
   

  
	
  Consolidated Net
  Income

  	
   

  
	
  Contingent
  Obligation

  	
   

  
	
  Controlled Group

  	
   

  
	
  Conversion/Continuation
  Notice

  	
   

  
	
  Convertible Senior
  Notes

  	
   

  
	
  Convertible Senior
  Notes Indenture

  	
   

  
	
  Convertible Senior
  Notes Supplemental Indenture

  	
   

  
	
  Credit Extension

  	
   

  
	
  Credit Extension
  Date

  	
   

  
	
  Default

  	
   

  
	
  Deficiency

  	
   

  
	
  Determination Date

  	
   

  
	
  Disclosure Schedule

  	
   

  
	
  Dividend

  	
   

  
	
  Engineered
  Projected Production

  	
   

  
	
  Engineered Value

  	
   

  
	
  Engineering Report

  	
   

  
	
  Environmental Laws

  	
   

  
	
  Equity

  	
   

  
	
  ERISA

  	
   

  
	
  Eurodollar Advance

  	
   

  
	
  Eurodollar Base
  Rate

  	
   

  
	
  Eurodollar Loan

  	
   

  
	
  Eurodollar Rate

  	
   

  
	
  Excluded Taxes

  	
   

  
	
  Exhibit

  	
   

  
	
  Existing Cimarex
  Credit Agreement

  	
   

  
	
  Existing Cimarex
  Indebtedness

  	
   

  
	
  Existing Cimarex Lenders

  	
   

  
	
  Existing Cimarex
  Loan Documents

  	
   

  
	
  Existing Cimarex
  Mortgages

  	
   

  
	
  Existing
  Indebtedness

  	
   

  
	
  Existing Letter of
  Credit

  	
   

  
	
  Existing MHR Credit
  Agreement

  	
   

  

 

vii

 

	
  Existing MHR Indebtedness

  	
   

  
	
  Existing MHR
  Lenders

  	
   

  
	
  Existing MHR
  Mortgages

  	
   

  
	
  Facility LC

  	
   

  
	
  Facility LC Application

  	
   

  
	
  Facility LC
  Collateral Account

  	
   

  
	
  Facility
  Termination Date

  	
   

  
	
  Federal Funds
  Effective Rate

  	
   

  
	
  Fifty Percent
  Utilization Period

  	
   

  
	
  Financial Contract

  	
   

  
	
  Fiscal Year

  	
   

  
	
  Floating Rate

  	
   

  
	
  Floating Rate
  Advance

  	
   

  
	
  Floating Rate Loan

  	
   

  
	
  Fund

  	
   

  
	
  Guarantors

  	
   

  
	
  Guaranty

  	
   

  
	
  Highest Lawful Rate

  	
   

  
	
  Increase

  	
   

  
	
  Indebtedness

  	
   

  
	
  Indentures

  	
   

  
	
  Initial Engineering
  Report

  	
   

  
	
  Interest Period

  	
   

  
	
  Investment

  	
   

  
	
  JPMorgan

  	
   

  
	
  JPMSI

  	
   

  
	
  LC Fee

  	
   

  
	
  LC Issuer

  	
   

  
	
  LC Obligations

  	
   

  
	
  LC Payment Date

  	
   

  
	
  Lender Assignments

  	
   

  
	
  Lenders

  	
   

  
	
  Lenders Schedule

  	
   

  
	
  Lending
  Installation

  	
   

  
	
  Letter of Credit

  	
   

  
	
  Level I Status

  	
   

  
	
  Level II
  Status

  	
   

  
	
  Level III
  Status

  	
   

  
	
  Level IV
  Status

  	
   

  
	
  Level V Status

  	
   

  
	
  Lien

  	
   

  
	
  Loan

  	
   

  
	
  Loan Documents

  	
   

  
	
  Material Adverse
  Effect

  	
   

  
	
  Material
  Indebtedness

  	
   

  
	
  Material
  Indebtedness Agreement

  	
   

  

 

viii

 

	
  Material Subsidiary

  	
   

  
	
  Maximum Credit
  Amount

  	
   

  
	
  Merger Documents

  	
   

  
	
  Mergers

  	
   

  
	
  MHR

  	
   

  
	
  MHR/CNAC Merger

  	
   

  
	
  MHR/CNAC Merger
  Agreement

  	
   

  
	
  MHR/CNAC Merger
  Articles

  	
   

  
	
  MHR/CNAC Merger
  Documents

  	
   

  
	
  Minimum Collateral
  Amount

  	
   

  
	
  Modification

  	
   

  
	
  Modify

  	
   

  
	
  Moody’s

  	
   

  
	
  Mortgage

  	
   

  
	
  Multiemployer Plan

  	
   

  
	
  Non-U.S. Lender

  	
   

  
	
  Note

  	
   

  
	
  Notice of Assignment

  	
   

  
	
  Obligations

  	
   

  
	
  Off-Balance Sheet
  Liability

  	
   

  
	
  Operating Lease

  	
   

  
	
  Other Taxes

  	
   

  
	
  Outstanding Credit
  Exposure

  	
   

  
	
  Participants

  	
   

  
	
  Payment Date

  	
   

  
	
  PBGC

  	
   

  
	
  PDP Reserves

  	
   

  
	
  Permitted Bond
  Documents

  	
   

  
	
  Permitted Bond
  Indebtedness

  	
   

  
	
  Permitted Encumbrances

  	
   

  
	
  Person

  	
   

  
	
  Plan

  	
   

  
	
  Post-Closing
  Effective Date

  	
   

  
	
  Pricing Schedule

  	
   

  
	
  Prime Rate

  	
   

  
	
  Pro Rata Share

  	
   

  
	
  Property

  	
   

  
	
  Proved Reserves

  	
   

  
	
  Purchasers

  	
   

  
	
  Rate Management
  Obligations

  	
   

  
	
  Rate Management
  Transaction

  	
   

  
	
  Redetermination

  	
   

  
	
  Register

  	
   

  
	
  Regulation D

  	
   

  
	
  Regulation U

  	
   

  
	
  Reimbursement
  Obligations

  	
   

  

 

ix

 

	
  Reportable Event

  	
   

  
	
  Required Lenders

  	
   

  
	
  Required Reserve
  Value

  	
   

  
	
  Reserve Requirement

  	
   

  
	
  Restricted Payment

  	
   

  
	
  Risk-Based Capital
  Guidelines

  	
   

  
	
  Rolling Period

  	
   

  
	
  S&P

  	
   

  
	
  Sale and Leaseback
  Transaction

  	
   

  
	
  Schedule

  	
   

  
	
  Scheduled
  Redetermination

  	
   

  
	
  SEC

  	
   

  
	
  Section

  	
   

  
	
  Secured Obligations

  	
   

  
	
  Senior Note
  Documents

  	
   

  
	
  Senior Notes

  	
   

  
	
  Single Employer
  Plan

  	
   

  
	
  SPE Definitions

  	
   

  
	
  Special
  Redetermination

  	
   

  
	
  Status

  	
   

  
	
  Subsidiary

  	
   

  
	
  Substantial Portion

  	
   

  
	
  Supplemental
  Indentures

  	
   

  
	
  Taxes

  	
   

  
	
  Transferee

  	
   

  
	
  Type

  	
   

  
	
  Unfunded
  Liabilities

  	
   

  
	
  Unmatured Default

  	
   

  
	
  Wholly-Owned
  Subsidiary

  	
   

  

 

x

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

This Amended
and Restated Credit Agreement, dated as of June 13, 2005, is among Cimarex
Energy Co., a Delaware corporation, the Lenders, JPMorgan Chase Bank, N.A.,
successor by merger to Bank One, NA (Main Office Chicago), a national banking
association, as an LC Issuer and as Administrative Agent, U.S. Bank National
Association, a national banking association, and Bank of America, N.A., a
national banking association, as Co-Syndication Agents, and Wells Fargo Bank, N.A.,
a national banking association, as Documentation Agent.

 

W I T N E S S E T H:

 

WHEREAS,
Borrower, Administrative Agent, and the financial institutions named and
defined therein as Lenders (the “Existing
Cimarex Lenders“) are parties to that certain Credit Agreement
dated as of October 2, 2002 (as amended or supplemented prior to the date
hereof, the “Existing Cimarex Credit
Agreement“), pursuant to which the Existing Cimarex Lenders
provided certain loans and extensions of credit to Borrower (all Indebtedness
arising pursuant to the Existing Cimarex Credit Agreement is herein called the “Existing Cimarex Indebtedness“); and

 

WHEREAS, as of
the date of this Agreement, there is no outstanding Existing Cimarex
Indebtedness; and

 

WHEREAS,
Magnum Hunter Resources, Inc., a Nevada corporation (“MHR“), Deutsche Bank Trust Company
Americas (formerly known as Bankers Trust Company), as administrative agent,
and the financial institutions parties thereto as lenders (the “Existing MHR Lenders“) are parties to
that certain Fourth Amended and Restated Credit Agreement dated as of
March 15, 2002 (as amended or supplemented prior to the date hereof, the “Existing MHR Credit Agreement“),
pursuant to which the Existing MHR Lenders provided certain loans and
extensions of credit to MHR (all Indebtedness arising pursuant to the Existing
MHR Credit Agreement is herein called the “Existing
MHR Indebtedness“); and

 

WHEREAS,
pursuant to the MHR/CNAC Merger Documents, Cimarex Nevada Acquisition Co., a
Nevada corporation (“CNAC“)
and a Wholly-Owned Subsidiary of Borrower, merged with and into MHR, with MHR
being the surviving corporation and a Wholly-Owned Subsidiary of Borrower, and
in connection therewith and upon the effectiveness
thereof (i) Borrower became the owner of all of the outstanding
capital stock of MHR, and (ii) the existence of CNAC ceased; and

 

WHEREAS, after
giving effect to the MHR/CNAC Merger and pursuant to the Borrower/MHR Merger
Documents, MHR merged with and into Borrower, with Borrower being the surviving
corporation, and in connection therewith and upon the effectiveness thereof,
(i) the existence of MHR ceased, and (ii) Borrower became the obligor
under the Indentures and with respect to the Existing MHR Indebtedness; and

 

WHEREAS,
immediately prior to the execution of this Agreement, certain of the Existing
Cimarex Lenders have purchased and assumed certain of the rights and interests
of certain other Existing Cimarex Lenders (the “Lender Assignments“); and

 

1

 

WHEREAS,
following the consummation of the Borrower/MHR Merger, the parties hereto
desire to consolidate, amend, restate and otherwise restructure the Existing
Cimarex Credit Agreement and the Existing MHR Credit Agreement in the form of
this Agreement and to appoint JPMorgan Chase Bank, N.A. as Administrative Agent
hereunder, and Borrower desires to obtain Borrowings (as herein defined)
(i) to refinance and replace the Existing MHR Indebtedness, (ii) to
refinance the Existing Cimarex Indebtedness, and (iii) for other purposes
permitted herein; and

 

WHEREAS, upon the execution, delivery and effectiveness of this
Agreement and the refinancing and replacement of the Existing MHR Indebtedness
with the proceeds of the initial Borrowing under this Agreement, this Agreement
will constitute and be the “Senior Credit Facility” for purposes of, and as
defined in, the 9.60% Senior Notes Indenture; and

 

WHEREAS, after
giving effect to the Lender Assignments and the consolidation, amendment,
restatement and restructuring of the Existing Cimarex Credit Agreement and the
Existing MHR Credit Agreement pursuant to the terms hereof, the Commitment of
each Lender hereunder will be as set forth on the Lenders Schedule; and

 

WHEREAS,
pursuant to certain separate agreements among JPMorgan Chase Bank, N.A., J.P.
Morgan Securities Inc. (“JPMSI“)
and Borrower, JPMSI has been appointed Lead Arranger and Sole Book Runner for
the credit facility provided herein;

 

NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein
contained, and other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, and subject to the satisfaction of each
condition precedent contained in Section 4.1 hereof, the satisfaction of
which shall be evidenced by the execution by Borrower and the Administrative
Agent of the Certificate of Effectiveness, the parties hereto agree that
(i) the Existing MHR Credit Agreement is refinanced and replaced, and
(ii) the Existing Cimarex Credit Agreement is hereby amended, renewed,
extended and restated in its entirety on (and subject to) the terms and
conditions set forth herein.  It is the
intention of the parties hereto that this Agreement supersedes and replaces the
Existing MHR Credit Agreement and the Existing Cimarex Credit Agreement in
their entirety; provided, that, (a) such amendment and
restatement shall operate to renew, amend, modify and extend certain of the
rights and obligations of Borrower under the Existing Cimarex Credit Agreement
and as provided herein, but shall not act as a novation thereof, and
(b) the Liens securing the Obligations under and as defined in the
Existing Cimarex Credit Agreement and the liabilities and obligations of
Borrower and its Subsidiaries under the Existing Cimarex Credit Agreement and
the Loan Documents (as therein defined and referred to herein as the “Existing Cimarex Loan Documents“) shall
not be extinguished but shall be carried forward and shall secure such
obligations and liabilities as amended, renewed, extended and restated
hereby.  The parties hereto ratify and
confirm each of the Existing Cimarex Loan Documents entered into prior to the
Closing Date (but excluding the Existing Cimarex Credit Agreement) and agree
that such Existing Cimarex Loan Documents continue to be legal, valid, binding
and enforceable in accordance with their terms (except to the extent amended,
restated and superseded in their entirety in connection with the transactions
contemplated hereby), however, for all matters arising prior to the Closing Date
(including the accrual and payment of interest and fees, and matters relating
to indemnification and compliance with financial covenants), the terms of the
Existing Cimarex Credit Agreement (as unmodified

 

2

 

by this Agreement) shall control and are hereby ratified and
confirmed.  Borrower and each of its
Subsidiaries represent and warrant that, as of the Closing Date, there are no
claims or offsets against, or defenses or counterclaims to, their obligations
under the Existing Cimarex Credit Agreement or any of the other Existing
Cimarex Loan Documents.  The parties
hereto further agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

As used in
this Agreement:

 

“9.60%
Senior Notes” means, collectively, the 9.60% Senior Notes
due 2012, Series A, and the 9.60% Senior Notes due 2012, Series B, in each
case issued by MHR pursuant to the 9.60% Senior Notes Indenture and in an
original aggregate principal amount of $300,000,000.

 

“9.60% Senior Notes Indenture”
means that certain Indenture, dated as of March 15, 2002, by and among MHR, as
Issuer, the subsidiary guarantors named therein, and Deutsche Bank Trust
Company Americas (formerly known as Bankers Trust Company), as Trustee,
relating to the issuance of the 9.60% Senior Notes, as supplemented and
modified by the 9.60% Senior Notes Supplemental Indenture, and as further
supplemented and modified from time to time to the extent permitted hereunder.

 

“9.60% Senior Notes Refinancing”
means Indebtedness incurred by the Borrower to refinance in full the
9.60% Senior Notes (including accrued interest thereon), provided, that,
such Indebtedness (i) does not exceed the aggregate amount of Indebtedness
evidenced by the 9.60% Senior Notes in existence on the Closing Date
(including accrued interest thereon), (ii) has a coupon or interest rate
not in excess of 9.60% per annum, (iii) is not subject to negative
covenants or events of default (or other provisions which have the same effect
as negative covenants or events of default) which have not been approved by the
Administrative Agent, (iv) shall not mature sooner than the date which is
one year following the Facility Termination Date, (v) is not secured by
any assets of the Borrower or its Subsidiaries, and (vi) otherwise has
terms and conditions satisfactory to the Administrative Agent in its sole
reasonable discretion.

 

“9.60% Senior Notes Refinancing Documents”
means, collectively, the indenture, senior unsecured notes, senior subordinated
notes, all guarantees of any such notes, and all other agreements, documents or
instruments executed and delivered by the Borrower or any of its Subsidiaries
in connection with, or pursuant to, the issuance of the Indebtedness evidencing
the 9.60% Senior Notes Refinancing.

 

“9.60% Senior Notes Supplemental Indenture”
means that certain First Supplemental Indenture dated as of June 13, 2005,
by and among Borrower, the subsidiary guarantors party thereto, and Deutsche
Bank Trust Company Americas, as Trustee, providing for, among other things, the
assumption by Borrower of the obligations of MHR under the 9.60% Senior Notes
and the 9.60% Senior Notes Indenture.

 

“Acquisition”
means any transaction, or any series of related transactions, consummated on or
after the date of this Agreement (after giving effect to the Closing
Transactions), by which

 

3

 

the Borrower or any of its Subsidiaries (i) acquires any going
business or all or substantially all of the assets of any firm, corporation or
limited liability company, or division thereof, whether through purchase of
assets, merger or otherwise or (ii) directly or indirectly acquires (in
one transaction or as the most recent transaction in a series of transactions)
at least a majority (in number of votes) of the securities of a corporation
which have ordinary voting power for the election of directors (other than
securities having such power only by reason of the happening of a contingency)
or a majority (by percentage or voting power) of the outstanding ownership
interests of a partnership or limited liability company.

 

“Administrative Agent” means JPMorgan, successor by
merger to Bank One, NA (Main Office Chicago), in its capacity as contractual
representative of the Lenders pursuant to Article XIII, and not in its
individual capacity as a Lender, and any successor Administrative Agent
appointed pursuant to Article XIII.

 

“Advance”
means a borrowing hereunder, (i) made by the Lenders on the same Borrowing
Date, or (ii) converted or continued by the Lenders on the same date of
conversion or continuation, consisting, in either case, of the aggregate amount
of the several Loans of the same Type and, in the case of Eurodollar Loans, for
the same Interest Period.

 

“Affected
Lender” is defined in Section 2.21.

 

“Affiliate”
of any Person means any other Person directly or indirectly controlling,
controlled by or under common control with such Person.  For purposes of this definition, a Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.

 

“Aggregate Commitment” means the aggregate of the
Commitments of all the Lenders, as reduced or increased from time to time
pursuant to the terms hereof; provided that the Aggregate Commitment shall
never exceed the Borrowing Base.

 

“Aggregate Outstanding Credit Exposure”
means, at any time, the aggregate of the Outstanding Credit Exposure of all the
Lenders.

 

“Agreement”
means this Amended and Restated Credit Agreement, as it may be amended or
modified and in effect from time to time.

 

“Agreement Accounting Principles”
means generally accepted accounting principles as in effect from time to time,
applied in a manner consistent with that used in preparing the financial
statements referred to in Section 5.4.

 

“Alternate Base Rate” means, for any day, a rate of
interest per annum equal to the higher of (i) the Prime Rate for such day
and (ii) the sum of the Federal Funds Effective Rate for such day plus
1/2% per annum.

 

“Amendments to Existing Cimarex Mortgages”
means Amendments to Mortgages to be entered into among Borrower, certain of its
Subsidiaries and Administrative Agent, in form

 

4

 

and substance satisfactory to the Administrative Agent, pursuant to
which the Existing Cimarex Mortgages shall be amended to reflect the amendment
and restatement of the Existing Cimarex Credit Agreement pursuant hereto.

 

“Annualized Consolidated EBITDA”
means, for purposes of calculating the financial ratio set forth in Section 8.2
for each Rolling Period ending on or prior to March 31, 2006, the Borrower’s
actual Consolidated EBITDA for such Rolling Period multiplied by the factor
determined for such Rolling Period in accordance with the table below:

 

	
  Rolling
  Period Ending

  	
   

  	
  Factor

  	
   

  
	
  September 30, 2005

  	
   

  	
  4

  	
   

  
	
  December 31, 2005

  	
   

  	
  2

  	
   

  
	
  March 31, 2006

  	
   

  	
  1.333

  	
   

  

 

“Applicable Fee Rate” means, at any time, the
percentage rate per annum at which commitment fees are accruing on the unused
portion of the Aggregate Commitment under Section 2.5.2 at such time at
the rate set forth in the Pricing Schedule.

 

“Applicable
Margin” means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.

 

“Arranger”
means J.P. Morgan Securities Inc., a Delaware corporation, and its successors,
in its capacity as Lead Arranger and Sole Book Runner.

 

“Article”
means an article of this Agreement unless another document is specifically
referenced.

 

“Authorized Officer” means any of the president, the
chief financial officer, any vice president, the treasurer or any assistant
treasurer of the Borrower, acting singly.

 

“Available Aggregate Commitment”
means, at any time, the Aggregate Commitment then in effect minus the Aggregate
Outstanding Credit Exposure at such time.

 

“Borrower”
means Cimarex Energy Co., a Delaware corporation, and its successors and
assigns.

 

“Borrower/MHR Merger” means, collectively, (i) the
merger of MHR with and into Borrower pursuant to, and in accordance with, the
Borrower/MHR Merger Documents, with Borrower being the surviving corporation,
and, upon the effectiveness of which, the existence of MHR shall cease and
Borrower will, accordingly, be obligated on the Existing MHR Indebtedness, and
(ii) the other reorganization transactions contemplated by the Borrower/MHR
Merger Agreement.

 

“Borrower/MHR Merger Agreement”
means the Agreement and Plan of Merger, as the same may be amended, dated as of
June 7, 2005 between Borrower and MHR

 

5

 

“Borrower/MHR Merger Articles”
means, collectively, (i) the Certificate of Ownership and Merger dated as of
June 13, 2005, executed by Borrower and filed on June 13, 2005 with
the Secretary of State of Delaware to effect the Borrower/MHR Merger in
Delaware, and (ii) the Articles of Merger dated as of June 13, 2005,
executed by Borrower and MHR and filed on June 13, 2005 with the Secretary
of State of Nevada to effect the Borrower/MHR Merger in Nevada, and certified
copies of which shall subsequently be filed in such jurisdictions as
Administrative Agent shall require.

 

“Borrower/MHR Merger Documents”
means the Borrower/MHR Merger Agreement, the Borrower/MHR Merger Articles, and
all other material documents, instruments and agreements executed and/or
delivered by Borrower and/or MHR pursuant to the Borrower/MHR Merger Agreement
or in connection with the Borrower/MHR Merger.

 

“Borrowing
Base” means, at the particular time in question, either the
amount provided for in Section 2.6.1 or the amount otherwise determined in
accordance with the provisions of Section 2.6; provided, however, that in
no event shall the Borrowing Base ever exceed the Maximum Credit Amount.

 

“Borrowing Base Properties” means all oil and gas
properties evaluated by Lenders for purposes of establishing the Borrowing
Base.

 

“Borrowing Base Usage Percentage”
means, for any day, the quotient obtained by dividing (i) the Aggregate
Outstanding Credit Exposure on such day, by (ii) the Borrowing Base in
effect on such day, multiplied by 100.

 

“Borrowing
Date” means a date on which an Advance is made hereunder.

 

“Borrowing
Notice” is defined in Section 2.9.

 

“Business
Day” means (i) with respect to any borrowing, payment
or rate selection of Eurodollar Advances, a day (other than a Saturday or
Sunday) on which banks generally are open in Chicago and New York City for the
conduct of substantially all of their commercial lending activities, interbank
wire transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all
other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in Chicago for the conduct of substantially all of their commercial
lending activities and interbank wire transfers can be made on the Fedwire
system.

 

“Capitalized
Lease” of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.

 

“Capitalized Lease Obligations” of a
Person means the amount of the obligations of such Person under Capitalized
Leases which would be shown as a liability on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.

 

“Cash Equivalent Investments” means
(i) short-term obligations of, or fully guaranteed by, the United States
of America, (ii) commercial paper rated A-1 or better by S&P or
P-1 or

 

6

 

better by Moody’s, (iii) demand deposit accounts maintained in the
ordinary course of business, and (iv) certificates of deposit issued by
and time deposits with commercial banks (whether domestic or foreign) having
capital and surplus in excess of $100,000,000; provided in each case that the
same provides for payment of both principal and interest (and not principal
alone or interest alone) and is not subject to any contingency regarding the
payment of principal or interest.

 

“Certificate of Effectiveness” means
a Certificate of Effectiveness in the form of Exhibit I hereto to
be executed by Borrower and Administrative Agent upon the satisfaction of each
of the conditions precedent contained in Section 4.1 hereof.

 

“Change
in Control” means the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 30% or more of the outstanding shares of voting stock
of the Borrower.

 

“Closing
Date” means June 13, 2005, provided that the conditions
specified in Section 4.1 are satisfied, and Borrower and Administrative
Agent have executed and delivered the Certificate of Effectiveness.

 

“Closing
Documents” means the Merger Documents, the Senior Note
Documents, and all other material documents, instruments and agreements
executed and/or delivered by Borrower, MHR, CNAC or any of Borrower’s
Subsidiaries in connection with or otherwise pertaining to the Mergers, the
modification of or supplement to the Indentures, or the other Closing
Transactions.

 

“Closing Transactions” means the transactions to occur
on or prior to the Closing Date, including, without limitation: (a) the
completion of the MHR/CNAC Merger pursuant to the terms of the MHR/CNAC Merger
Documents, and, pursuant thereto, the proper filing of the MHR/CNAC Merger
Articles with the Secretary of State of Nevada, (b) the completion of the
Borrower/MHR Merger pursuant to the terms of the Borrower/MHR Merger Documents,
and, pursuant thereto, the proper filing of the Borrower/MHR Merger Articles
with the Secretary of State of Delaware and the Secretary of State of Nevada,
as applicable, (c) the cancellation of all letters of credit (other than
the Existing Letter of Credit which shall, on the Closing Date, be a Facility
LC hereunder pursuant to Section 2.20), if any, outstanding under the
Existing MHR Credit Agreement, (d) the termination and release of the
Existing MHR Mortgages and all other Liens securing the obligations,
Indebtedness (including the Existing MHR Indebtedness) and liabilities of MHR
and its subsidiaries and affiliates under the Existing MHR Credit Agreement
(including, without limitation, the delivery of UCC-3 releases with respect to
all uniform commercial code filings made under or pursuant to the Existing MHR
Credit Agreement), and the delivery to Borrower (or to a designee acceptable to
Administrative Agent) of all original stock (or other Equity) certificates
delivered pursuant to the terms of the Existing MHR Credit Agreement as
security for such Persons’ obligations, Indebtedness and liabilities
thereunder, (e) the release of all guarantees of the obligations,
Indebtedness (including the Existing MHR Indebtedness) and liabilities of MHR
and its subsidiaries and affiliates under the Existing MHR Credit Agreement,
(f) the modification of and supplement to the Indentures and the Senior
Notes and the assumption by Borrower of the obligations of MHR under the
Indentures to reflect the

 

7

 

Mergers, pursuant to terms and documentation (including, without
limitation, the Supplemental Indentures) acceptable to Lenders in their sole
discretion, (g) the termination of all commitments under the Existing MHR
Credit Agreement and, to the extent available after reasonable effort to
procure, the delivery to Borrower (or to a designee acceptable to
Administrative Agent) of each original promissory note issued under the
Existing MHR Credit Agreement marked “Terminated and Paid in Full,”
(h) the refinancing in full, with proceeds of the initial Advance
hereunder, of all Existing Indebtedness, and (i) the payment of all fees
and expenses of Administrative Agent in connection with the credit facility
provided herein.

 

“CNAC”
has the meaning assigned to such term in the recitals hereof.

 

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

 

“Collateral”
means all Property of Borrower and its Subsidiaries in which a Lien has been
granted pursuant to the Collateral Documents.

 

“Collateral Documents” means, collectively, all deeds
of trust, mortgages, amendments to mortgages, assignments, security agreements,
pledge agreements and other security documents from time to time delivered to
Administrative Agent to secure the Secured Obligations.

 

“Collateral Shortfall Amount” is
defined in Section 11.1.

 

“Commitment”
means, for each Lender, the obligation of such Lender to make Loans to, and
participate in Facility LCs issued upon the application of, the Borrower in an
aggregate amount not exceeding the amount set forth on the Lenders Schedule or
as set forth in any Notice of Assignment relating to any assignment that has
become effective pursuant to Section 15.3.2, as such amount may be
modified from time to time pursuant to the terms hereof; provided that no
Lender’s Commitment shall ever exceed such Lender’s Pro Rata Share of the
Aggregate Commitment.

 

“Consolidated EBITDA” means Consolidated Net Income plus,
to the extent deducted from revenues in determining Consolidated Net Income,
(i) Consolidated Interest Expense, (ii) expense for income and income
based taxes paid or accrued, (iii) depreciation, depletion, amortization
and impairment, including without limitation, impairment of goodwill, and
(iv) any non-cash items associated with (a) mark to market
accounting, and/or (b) stock based compensation arising from the grant of
or issuance or replacement of stock, stock options or other equity-based awards
or any amendment, modification, substitution or change of any such stock, stock
options or other equity-based awards, in each case in connection with employee
plans or other compensation arrangements, less, all non-cash items
increasing Consolidated Net Income, all calculated for the Borrower and its
Subsidiaries on a consolidated basis.

 

“Consolidated Funded Indebtedness”
means at any time the aggregate dollar amount of Consolidated Indebtedness
which has actually been funded and is outstanding at such time, whether or not
such amount is due or payable at such time.

 

8

 

“Consolidated Indebtedness” means at
any time the Indebtedness of the Borrower and its Subsidiaries calculated on a
consolidated basis as of such time.

 

“Consolidated Interest Expense”
means, with reference to any period, the remainder of (a) interest expense
minus (b) interest income of the Borrower and its Subsidiaries calculated
on a consolidated basis for such period, all as determined in conformity with
Agreement Accounting Principles.

 

“Consolidated Net Income” means, with reference to any
period, the net income (or loss) of the Borrower and its Subsidiaries
calculated on a consolidated basis for such period.

 

“Contingent Obligation” of a Person means any
agreement, undertaking or arrangement by which such Person assumes, guarantees,
endorses, contingently agrees to purchase or provide funds for the payment of,
or otherwise becomes or is contingently liable upon, the obligation or
liability of any other Person, or agrees to maintain the net worth or working
capital or other financial condition of any other Person, or otherwise assures
any creditor of such other Person against loss, including, without limitation,
any comfort letter, operating agreement, take-or-pay contract or the
obligations of any such Person as general partner of a partnership with respect
to the liabilities of the partnership.

 

“Controlled
Group” means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether
or not incorporated) under common control which, together with the Borrower or
any of its Subsidiaries, are treated as a single employer under
Section 414 of the Code.

 

“Conversion/Continuation Notice” is
defined in Section 2.10.

 

“Convertible Senior Notes” means the Floating Rate
Convertible Senior Notes due 2023 issued by MHR pursuant to the Convertible
Senior Notes Indenture and in an original aggregate principal amount of
$125,000,000.  The Convertible Senior
Notes will not be considered capital stock under this Agreement.

 

“Convertible Senior Notes Indenture”
means that certain Indenture, dated as of December 17, 2003, by and among
MHR, as Issuer, the subsidiary guarantors party thereto, and Deutsche Bank
Trust Company Americas (formerly known as Bankers Trust Company), as Trustee,
relating to the issuance of the Convertible Senior Notes, as supplemented and
modified by the Convertible Senior Notes Supplemental Indenture, and as further
supplemented and modified from time to time to the extent permitted hereunder.

 

“Convertible Senior Notes Supplemental Indenture”
means, collectively, that certain (i) First Supplemental Indenture dated
as of June 6, 2005, by and among MHR, the subsidiary guarantors party
thereto, and Deutsche Bank Trust Company Americas, as Trustee, providing for,
among other things, certain changes to conform the Convertible Senior Notes
Indenture to the offering memorandum for the Convertible Senior Notes,
(ii) Second Supplemental Indenture dated as of June 7, 2005, by and
among Borrower, MHR, the subsidiary guarantors party thereto, and Deutsche Bank
Trust Company Americas, as Trustee, providing for, among other things, that the
Convertible Senior Notes can be converted into cash and stock of Borrower, and
(iii) Third Supplemental Indenture, dated as of June 13, 2005, by and
among Borrower, the subsidiary

 

9

 

guarantors party thereto, and Deutsche Bank Trust Company Americas, as
Trustee, providing for, among other things, the assumption by Borrower of the
obligations of MHR under the Convertible Senior Notes and the Convertible
Senior Notes Indenture.

 

“Credit
Extension” means the making of an Advance or the issuance of
a Facility LC hereunder.

 

“Credit Extension Date” means the Borrowing Date for an
Advance or the issuance date for a Facility LC.

 

“Default”
means an event described in Article X.

 

“Deficiency”
is defined in Section 2.8(b).

 

“Determination Date” is defined in Section 2.6.2.

 

“Disclosure Schedule” means Schedule 3 attached
hereto.

 

“Dividend”
means, as to any Person, any declaration or payment of any dividend or the
making of any distribution, loan, advance or investment on or with respect to
any shares (or other evidence of ownership) of a Person’s capital stock (other
than dividends or distributions payable solely in shares or other evidence of
ownership of such Person’s capital stock).

 

“Engineered
Value” means, at the time of determination, the future net
revenues of the Borrowing Base Properties calculated by Administrative Agent
using the pricing parameters and discount rate currently being used by
Administrative Agent.

 

“Engineering Report” means the Initial Engineering
Report and each engineering report delivered pursuant to Section 6.1(ix)
and Section 6.1(x).

 

“Environmental Laws” means any and all federal, state,
local and foreign statutes, laws, judicial decisions, regulations, ordinances,
rules, judgments, orders, decrees, plans, injunctions, permits, concessions,
grants, franchises, licenses, agreements and other governmental restrictions
relating to (i) the protection of the environment, (ii) the effect of
the environment on human health, (iii) emissions, discharges or releases
of pollutants, contaminants, hazardous substances or wastes into surface water,
ground water or land, or (iv) the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of pollutants,
contaminants, hazardous substances or wastes or the clean-up or other
remediation thereof.

 

“Equity”
means shares of capital stock or a partnership, profits, capital, member or
other equity interest, or options, warrants or any other rights to substitute
for or otherwise acquire the capital stock or a partnership, profits, capital,
member or other equity interest of any Person.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time
to time, and any rule or regulation issued thereunder.

 

“Eurodollar Advance” means an Advance which, except as
otherwise provided in Section 2.12, bears interest at the applicable
Eurodollar Rate.

 

10

 

“Eurodollar Base Rate” means, with respect to a
Eurodollar Advance for the relevant Interest Period, the applicable British
Bankers’ Association LIBOR rate for deposits in U.S. dollars as reported by any
generally recognized financial information service as of 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period, and
having a maturity equal to such Interest Period, provided that, if no such
British Bankers’ Association LIBOR rate is available to the Administrative
Agent, the applicable Eurodollar Base Rate for the relevant Interest Period
shall instead be the rate determined by the Administrative Agent to be the rate
at which JPMorgan or one of its Affiliate banks offers to place deposits in
U.S. dollars with first-class banks in the London interbank market at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period, in the approximate amount of JPMorgan’s relevant
Eurodollar Loan and having a maturity equal to such Interest Period.

 

“Eurodollar
Loan” means a Loan which, except as otherwise provided in Section 2.12,
bears interest at the applicable Eurodollar Rate.

 

“Eurodollar
Rate” means, with respect to a Eurodollar Advance for the
relevant Interest Period, an interest rate per annum equal to the sum of
(i) the quotient of (a) the Eurodollar Base Rate applicable to such
Interest Period, divided by (b) one minus the Reserve Requirement
(expressed as a decimal) applicable to such Interest Period, plus (ii) the
Applicable Margin.

 

“Excluded
Taxes” means, in the case of each Lender or applicable
Lending Installation and the Administrative Agent, taxes imposed on its overall
net income, and franchise taxes imposed on it, by (i) the jurisdiction
under the laws of which such Lender or the Administrative Agent is incorporated
or organized or (ii) the jurisdiction in which the Administrative Agent’s
or such Lender’s principal executive office or such Lender’s applicable Lending
Installation is located.

 

“Exhibit”
refers to an exhibit to this Agreement, unless another document is specifically
referenced.

 

“Existing Cimarex Credit Agreement”
has the meaning assigned to such term in the recitals hereto.

 

“Existing Cimarex Indebtedness” has
the meaning assigned to such term in the recitals hereto.

 

“Existing Cimarex Lenders” has the meaning assigned to
such term in the recitals hereto.

 

“Existing Cimarex Loan Documents”
has the meaning assigned to such term in the preamble hereto.

 

“Existing Cimarex Mortgages” means
the mortgages, deeds of trust, security agreements, assignments, pledges and
other documents, instruments and agreements, which establish Liens on certain
of the Borrowing Base Properties to secure the obligations, Indebtedness and
liabilities of Borrower under the Existing Cimarex Credit Agreement.

 

11

 

“Existing Indebtedness” means, collectively, the
Existing Cimarex Indebtedness and the Existing MHR Indebtedness.

 

“Existing Letter of Credit” means that certain letter
of credit, Number S-15235, dated May 19, 2003, in the original stated
amount of $2,500,000, issued by Deutsche Bank Trust Company Americas (formerly
known as Bankers Trust Company) for the account of MHR to Chevron U.S.A. Inc.
as beneficiary.

 

“Existing MHR Credit Agreement” has
the meaning assigned to such term in the recitals hereto.

 

“Existing MHR Indebtedness” has the meaning assigned to
such term in the recitals hereto.

 

“Existing MHR Lenders” has the meaning assigned to such
term in the recitals hereto.

 

“Existing MHR Mortgages” means the mortgages, deeds of
trust, security agreements, assignments, pledges and other documents,
instruments and agreements which establish Liens on MHR’s and its subsidiaries’
assets and properties to secure the obligations, Indebtedness and liabilities
of such Persons under the Existing MHR Credit Agreement.

 

“Facility
LC” is defined in Section 2.20.1 and shall include,
without limitation, the Existing Letter of Credit.

 

“Facility LC Application” is defined in Section 2.20.3.

 

“Facility LC Collateral Account” is
defined in Section 2.20.11.

 

“Facility Termination Date” means July 1, 2010, or
any earlier date on which the Aggregate Commitment is reduced to zero or
otherwise terminated pursuant to the terms hereof.

 

“Federal Funds Effective Rate”
means, for any day, an interest rate per annum 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 for
such day (or, if such day is not a Business Day, for the immediately preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
at approximately 10:00 a.m. (Chicago time) on such day on such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by the Administrative Agent in its sole
discretion.

 

“Fifty Percent Utilization Period”
means any period during which the Borrowing Base Usage Percentage on each
consecutive day is and remains greater than or equal to 50%.

 

“Financial Contract” of a Person means (i) any
exchange-traded or over-the-counter futures, forward, swap or option contract
or other financial instrument with similar characteristics, and (ii) any
Rate Management Transaction.

 

“Fiscal
Year” means the fiscal year of the Borrower.

 

12

 

“Floating
Rate” means, for any day, a rate per annum equal to
(i) the Alternate Base Rate for such day plus (ii) the Applicable
Margin, in each case changing when and as the Alternate Base Rate changes.

 

“Floating Rate Advance” means an Advance which, except
as otherwise provided in Section 2.12, bears interest at the Floating
Rate.

 

“Floating
Rate Loan” means a Loan which, except as otherwise provided
in Section 2.12, bears interest at the Floating Rate.

 

“Fund”
means any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business.

 

“Guarantors”
means each Material Subsidiary and their successors and assigns.  As of the date hereof (and after giving
effect to the Closing Transactions), “Guarantors”
means each of the Material Subsidiaries listed and identified on the Disclosure
Schedule.

 

“Guaranty”
means, collectively, that certain Amended and Restated Subsidiary Guaranty
dated of even date herewith executed by the Guarantors in favor of the
Administrative Agent, for the ratable benefit of the Lenders, as it may be
amended or modified and in effect from time to time, together with any
additional Guaranty executed and delivered pursuant to Section 9.2 hereof.

 

“Highest Lawful Rate” means, on any day with respect to
each Lender to whom Obligations are owed, the maximum nonusurious rate of
interest that such Lender is permitted under applicable law to contract for,
take, charge or receive with respect to such Obligations for such day.  All determinations herein of the Highest
Lawful Rate, or of any interest rate determined by reference to the Highest
Lawful Rate, shall be made separately for each Lender as appropriate to assure
that the Loan Documents are not construed to obligate any Person to pay
interest to any Lender at a rate in excess of the Highest Lawful Rate
applicable to such Lender.

 

“Increase”
is defined in Section 2.5.4.

 

“Indebtedness”
of a Person means such Person’s (i) obligations for borrowed money,
(ii) obligations representing the deferred purchase price of Property or
services (other than accounts payable arising in the ordinary course of such
Person’s business payable on terms customary in the trade),
(iii) obligations, whether or not assumed, secured by Liens or payable out
of the proceeds or production from Property now or hereafter owned or acquired
by such Person (other than Permitted Encumbrances), (iv) obligations which
are evidenced by notes, acceptances, or other instruments, (v) obligations
of such Person to purchase securities or other Property arising out of or in
connection with the sale of the same or substantially similar securities or
Property, (vi) Capitalized Lease Obligations, (vii) Contingent
Obligations, (viii) obligations to reimburse issuers of Letters of Credit,
(ix) obligations with respect to payments received in consideration of
oil, gas, or other minerals yet to be acquired or produced at the time of
payment (including obligations under “take-or-pay” contracts to deliver gas in
return for payments already received and the undischarged balance of any
production payment created by such Person or for the creation of which such Person
directly or indirectly received

 

13

 

payment), (x) obligations with respect to other obligations to
deliver goods or services in consideration of advance payments therefor, and
(xi) other obligations for borrowed money or other financial accommodation
which in accordance with Agreement Accounting Principles would be shown as a
liability on the consolidated balance sheet of such Person.

 

“Indentures”
means, collectively, the 9.60% Senior Notes Indenture and the Convertible
Senior Notes Indenture.

 

“Initial Engineering Report” means,
collectively, the engineering report concerning oil and gas properties of
Borrower and its Subsidiaries prepared by Borrower as of January 1, 2005 and
audited by Ryder Scott Company, and the engineering report concerning oil and
gas properties of MHR prepared by DeGolyer and McNaughton as of January 1,
2005.

 

“Interest
Period” means, with respect to a Eurodollar Advance, a
period of one, two, three or six months commencing on a Business Day selected
by the Borrower pursuant to this Agreement. 
Such Interest Period shall end on the day which corresponds numerically
to such date one, two, three or six months thereafter, provided, however, that
if there is no such numerically corresponding day in such next, second, third
or sixth succeeding month, such Interest Period shall end on the last Business
Day of such next, second, third or sixth succeeding month.  If an Interest Period would otherwise end on
a day which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.

 

“Investment”
of a Person means any loan, advance (other than commission, travel and similar
advances to officers and employees made in the ordinary course of business),
extension of credit (other than accounts receivable arising in the ordinary
course of business on terms customary in the trade) or contribution of capital
by such Person; stocks, bonds, mutual funds, partnership interests, notes,
debentures or other securities owned by such Person; any deposit accounts and
certificate of deposit owned by such Person; and structured notes, derivative
financial instruments and other similar instruments or contracts (other than
Financial Contracts permitted under Section 7.11) owned by such Person.

 

“JPMorgan”
means JPMorgan Chase Bank, N.A., successor by merger to Bank One, NA (Main
Office Chicago), a national banking association, in its individual capacity,
and its successors.

 

“JPMSI”
has the meaning assigned to such term in the recitals hereto.

 

“LC Fee”
is defined in Section 2.20.4.

 

“LC
Issuer” means JPMorgan (or any subsidiary or affiliate of
JPMorgan designated by JPMorgan) in its capacity as issuer of Facility LCs
hereunder, and, with respect to the Existing Letter of Credit only, Deutsche
Bank Trust Company Americas in its capacity as issuer of the Existing Letter of
Credit.

 

14

 

“LC
Obligations” means, at any time, the sum, without
duplication, of (i) the aggregate undrawn stated amount under all Facility
LCs outstanding at such time plus (ii) the aggregate unpaid amount at such
time of all Reimbursement Obligations.

 

“LC
Payment Date” is defined in Section 2.20.5.

 

“Lender Assignments” has the meaning assigned to such
term in the recitals hereto.

 

“Lenders”
means the lending institutions listed on the signature pages of this Agreement
and their respective successors and assigns.

 

“Lenders
Schedule” means Schedule 2 attached hereto.

 

“Lending Installation” means, with respect to a Lender
or the Administrative Agent, the office, branch, subsidiary or affiliate of
such Lender or the Administrative Agent listed on the signature pages hereof or
on the Lenders Schedule or otherwise selected by such Lender or the
Administrative Agent pursuant to Section 2.18.

 

“Letter
of Credit” of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.

 

“Lien”
means any lien (statutory or other), mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, the interest of a vendor or lessor under any
conditional sale, Capitalized Lease or other title retention agreement).

 

“Loan”
means, with respect to a Lender, such Lender’s loan made pursuant to Article II
(or any conversion or continuation thereof).

 

“Loan
Documents” means this Agreement, the Facility LC
Applications, any Notes issued pursuant to Section 2.14, the Collateral
Documents and the Guaranty.

 

“Material Adverse Effect” means a material adverse
effect on (i) the business, Property, condition (financial or otherwise),
results of operations, or prospects of the Borrower and its Subsidiaries taken
as a whole, (ii) the ability of the Borrower to perform its obligations
under the Loan Documents to which it is a party, or (iii) the validity or
enforceability of any of the Loan Documents or the rights or remedies of the
Administrative Agent, the LC Issuer or the Lenders thereunder.

 

“Material Indebtedness” means Indebtedness in an
outstanding principal amount of $5,000,000 or more in the aggregate (or the
equivalent thereof in any currency other than U.S. dollars).

 

“Material Indebtedness Agreement”
means any agreement under which any Material Indebtedness was created or is
governed or which provides for the incurrence of Indebtedness in

 

15

 

an amount which would constitute Material Indebtedness (whether or not
an amount of Indebtedness constituting Material Indebtedness is outstanding
thereunder).

 

“Material Subsidiary” means a Subsidiary of Borrower
that owns a Substantial Portion of the Property of Borrower and its
Subsidiaries.  As of the date hereof (and
after giving effect to the Closing Transactions), “Material Subsidiary” means each of the
Borrower’s Subsidiaries listed and identified as a Material Subsidiary on the
Disclosure Schedule.

 

“Maximum Credit Amount” means One Billion Dollars
($1,000,000,000).

 

 “Merger Documents” means,
collectively, the MHR/CNAC Merger Documents and the Borrower/MHR Merger
Documents.

 

“Mergers”
means, collectively, the MHR/CNAC Merger and the Borrower/MHR Merger.

 

“MHR”
has the meaning assigned to such term in the recitals hereto.

 

“MHR/CNAC
Merger” means, collectively, (i) the merger of CNAC with and
into MHR pursuant to, and in accordance with, the MHR/CNAC Merger Documents,
with MHR being the surviving corporation as a Wholly-Owned Subsidiary of
Borrower, and, upon the effectiveness of which, the existence of CNAC shall
cease, and (ii) the other reorganization transactions contemplated by the
MHR/CNAC Merger Agreement.

 

“MHR/CNAC Merger Agreement” means the Agreement and
Plan of Merger, as the same may be amended, dated as of January 25, 2005
among Borrower, CNAC and MHR.

 

“MHR/CNAC Merger Articles” means those certain Articles
of Merger dated as of June 7, 2005, executed by MHR and CNAC and filed on
June 7, 2005 with the Secretary of State of Nevada to effect the MHR/CNAC
Merger in Nevada, and certified copies of which shall subsequently be filed in
such jurisdictions as Administrative Agent shall require.

 

“MHR/CNAC Merger Documents” means the MHR/CNAC Merger
Agreement, the MHR/CNAC Merger Articles, and all other material documents,
instruments and agreements executed and/or delivered by Borrower, CNAC and/or
MHR pursuant to the MHR/CNAC Merger Agreement or in connection with the
MHR/CNAC Merger.

 

“Minimum Collateral Amount” means with respect to any
Aggregate Commitment, 75% of the Required Reserve Value established by
Administrative Agent to support such Aggregate Commitment.

 

“Modify” and “Modification” are defined in
Section 2.20.1.

 

“Moody’s”
means Moody’s Investors Service, Inc.

 

“Mortgage”
means, collectively, all deeds of trust and mortgages included in the
Collateral Documents.

 

16

 

“Multiemployer Plan” means a Plan maintained pursuant
to a collective bargaining agreement or any other arrangement to which the Borrower
or any member of the Controlled Group is a party to which more than one
employer is obligated to make contributions.

 

“Note”
is defined in Section 2.14(iv).

 

“Notice of Assignment” is defined in Section 15.3.2.

 

“Obligations”
means all unpaid principal of and accrued and unpaid interest on the Loans, all
Reimbursement Obligations, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the
Lenders or to any Lender, the Administrative Agent, the LC Issuer or any
indemnified party arising under the Loan Documents.

 

“Off-Balance Sheet Liability” of a
Person means (i) any repurchase obligation or liability of such Person
with respect to accounts or notes receivable sold by such Person, (ii) any
liability under any Sale and Leaseback Transaction which is not a Capitalized
Lease, (iii) any liability under any so-called “synthetic lease”
transaction entered into by such Person, or (iv) any obligation arising
with respect to any other transaction which is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the
balance sheets of such Person, but excluding from this clause
(iv) Operating Leases.

 

“Operating
Lease” of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of
the lessor) of one year or more.

 

“Other
Taxes” is defined in Section 3.3(ii).

 

“Outstanding Credit Exposure” means,
as to any Lender at any time, the sum of (i) the aggregate principal
amount of its Loans outstanding at such time, plus (ii) an amount equal to
its Pro Rata Share of the LC Obligations at such time.

 

“Participants”
is defined in Section 15.2.1.

 

“Payment
Date” means the last day of each fiscal quarter of Borrower.

 

“PBGC”
means the Pension Benefit Guaranty Corporation, or any successor thereto.

 

“PDP
Reserves” means Proved Reserves that are categorized as both
“Developed” and “Producing” in the SPE Definitions.

 

“Permitted Bond Documents” means, collectively, the
indenture, senior unsecured notes, senior subordinated notes, all guarantees of
any such notes, and all other agreements, documents or instruments executed and
delivered by the Borrower or any of its Subsidiaries in connection with, or
pursuant to, the issuance of the Permitted Bond Indebtedness.

 

“Permitted Bond Indebtedness” means
Indebtedness of the Borrower resulting from a single issue of the Borrower’s
senior unsecured notes or senior unsecured subordinated notes in

 

17

 

an aggregate outstanding principal amount of not greater than
$200,000,000, and which Indebtedness (a) is not subject to negative
covenants or events of default (or other provisions which have the same effect
as negative covenants or events of default) which have not been approved by the
Administrative Agent, (b) has a coupon or interest rate not in excess of
9.0% per annum, (c) shall not mature sooner than the date which is one
year following the Facility Termination Date, (d) is not secured by any
assets of the Borrower or its Subsidiaries, and (e) is evidenced and
governed by an indenture and related documentation containing customary terms
and conditions for senior unsecured notes or senior unsecured subordinated
notes of like tenor and amount, each of which shall be satisfactory to the
Administrative Agent in its sole reasonable discretion.

 

“Permitted Encumbrances” means any Lien permitted by Section 7.6.

 

“Person”
means any natural person, corporation, firm, joint venture, partnership,
limited liability company, association, enterprise, trust or other entity or
organization, or any government or political subdivision or any agency,
department or instrumentality thereof.

 

“Plan”
means an employee pension benefit plan which is covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have
any liability.

 

“Pricing
Schedule” means Schedule 1 attached hereto.

 

“Prime
Rate” means a rate per annum equal to the prime rate of
interest announced from time to time by JPMorgan or its parent (which is not
necessarily the lowest rate charged to any customer), changing when and as said
prime rate changes.

 

“Pro
Rata Share” means, with respect to a Lender, a portion equal
to a fraction the numerator of which is such Lender’s Commitment and the
denominator of which is the Aggregate Commitment.

 

“Property”
of a Person means any and all property, whether real, personal, tangible,
intangible, or mixed, of such Person, or other assets owned, leased or operated
by such Person.

 

“Proved
Reserves” means “Proved Reserves” as defined in the SPE
Definitions.

 

“Purchasers”
is defined in Section 15.3.1.

 

“Rate Management Obligations” of a
Person means any and all obligations of such Person, whether absolute or
contingent and howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and substitutions
therefor), under (i) any and all Rate Management Transactions, and
(ii) any and all cancellations, buy backs, reversals, terminations or
assignments of any Rate Management Transactions.

 

“Rate Management Transaction” means
any transaction (including an agreement with respect thereto) now existing or
hereafter entered into by the Borrower which is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
index

 

18

 

swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, forward transaction, currency swap transaction, cross-currency
rate swap transaction, currency option or any other similar transaction
(including any option with respect to any of these transactions) or any
combination thereof, whether linked to one or more interest rates, foreign
currencies, commodity prices, equity prices or other financial measures.  Notwithstanding the foregoing, a “Rate
Management Transaction” shall not include any contract for the purchase and
sale of natural gas or oil entered into in the ordinary course of business and
on customary trade terms.

 

“Redetermination”
means a Scheduled Redetermination, a Special Redetermination, or a
redetermination of the Borrowing Base pursuant to Section 2.6.6.

 

“Register”
is defined in Section 15.3.3.

 

“Regulation D”
means Regulation D of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor thereto or other regulation or
official interpretation of said Board of Governors relating to reserve
requirements applicable to member banks of the Federal Reserve System.

 

“Regulation U”
means Regulation U of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor or other regulation or
official interpretation of said Board of Governors relating to the extension of
credit by banks for the purpose of purchasing or carrying margin stocks
applicable to member banks of the Federal Reserve System.

 

“Reimbursement Obligations” means,
at any time, the aggregate of all obligations of the Borrower then outstanding
under Section 2.20 to reimburse the LC Issuer for amounts paid by the LC
Issuer in respect of any one or more drawings under Facility LCs.

 

“Reportable
Event” means a reportable event as defined in
Section 4043 of ERISA and the regulations issued under such section, with
respect to a Plan, excluding, however, such events as to which the PBGC has by
regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event, provided, however,
that a failure to meet the minimum funding standard of Section 412 of the
Code and of Section 302 of ERISA shall be a Reportable Event regardless of
the issuance of any such waiver of the notice requirement in accordance with
either Section 4043(a) of ERISA or Section 412(d) of the Code.

 

“Required
Lenders” means Lenders in the aggregate having at least 66
2/3% of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding at least 66 2/3% of the Aggregate
Outstanding Credit Exposure.

 

“Required Reserve Value” means, with respect to any
Aggregate Commitment, that portion of the Borrowing Base Properties that
Administrative Agent has determined, in its sole discretion, is necessary to
support such Aggregate Commitment.

 

“Reserve Requirement” means, with respect to an
Interest Period, the maximum aggregate reserve requirement (including all
basic, supplemental, marginal and other reserves) which is imposed under
Regulation D on Eurocurrency liabilities.

 

19

 

“Restricted Payment” means (a) any Dividend and
(b) any payment on account of the purchase, redemption or other
acquisition or retirement for value by a Person of any of such Person’s capital
stock (except capital stock acquired on the conversion or exchange thereof into
or for other capital stock of such Person).

 

“Rolling
Period” means (a) for the fiscal quarters ending on
September 30, 2005, December 31, 2005 and March 31, 2006, the
period commencing on July 1, 2005 and ending on the last day of such
applicable fiscal quarter, and (b) for the fiscal quarter ending on
June 30, 2006, and for each fiscal quarter thereafter, any period of four
(4) consecutive fiscal quarters ending on the last day of such applicable
fiscal quarter.

 

“S&P”
means Standard and Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc.

 

“Sale and Leaseback Transaction”
means any sale or other transfer of Property by any Person with the intent to
lease such Property as lessee.

 

“Schedule”
refers to a specific schedule to this Agreement, unless another document is
specifically referenced.

 

“Scheduled Redetermination” means
any redetermination of the Borrowing Base pursuant to Section 2.6.2.

 

“SEC”
means the Securities and Exchange Commission.

 

“Section”
means a numbered Section of this Agreement, unless another document is
specifically referenced.

 

“Secured Obligations” means, collectively, (i) the
Obligations and (ii) all Rate Management Obligations owing to one or more
Lenders or any affiliates of such Lenders.

 

“Senior Note Documents” means, collectively, the
Indentures, the Supplemental Indentures, the Senior Notes, all guarantees of
the Senior Notes, and all other agreements, documents or instruments executed
and delivered by the Borrower, MHR or any of their Subsidiaries in connection
with, or pursuant to, the issuance and/or assumption of the Senior Notes.

 

“Senior
Notes” means, collectively, the 9.60% Senior Notes and
the Convertible Senior Notes.

 

“Single Employer Plan” means a Plan maintained by the
Borrower or any member of the Controlled Group for employees of the Borrower or
any member of the Controlled Group.

 

“Special Redetermination” means any redetermination of
the Borrowing Base pursuant to Section 2.6.3 or Section 2.6.4.

 

20

 

“SPE
Definitions” means the Definitions for Oil and Gas Reserves
promulgated by the Society of Petroleum Engineers (or any generally recognized
successor) as in effect at the time in question.

 

“Subsidiary”
of a Person means (i) any corporation more than 50% of the outstanding
securities having ordinary voting power of which shall at the time be owned or
controlled, directly or indirectly, by such Person or by one or more of its
Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint
venture or similar business organization more than 50% of the ownership
interests having ordinary voting power of which shall at the time be so owned
or controlled, provided that associations, joint ventures or other
relationships (a) which are established pursuant to a standard form
operating agreement or similar agreement or which are partnerships for purposes
of federal income taxation only, (b) which are not corporations or
partnerships (or subject to the Uniform Partnership Act) under applicable state
applicable law, and (c) whose businesses are limited to the exploration,
development and operation of oil, gas or mineral properties and interests owned
directly by the parties in such associations, joint ventures or relationships,
shall not be deemed to be “Subsidiaries” of such Person.  Unless otherwise expressly provided, all
references herein to a “Subsidiary” shall mean a Subsidiary of the
Borrower.  For purposes of this
Agreement, Metrix Networks, Inc. shall not be deemed a “Subsidiary” of
Borrower.

 

“Substantial Portion” means, with respect to the
Property of the Borrower and its Subsidiaries, Property which represents more
than 10% of the consolidated assets of the Borrower and its Subsidiaries or
property which is responsible for more than 10% of the consolidated net sales
or of the consolidated net income of the Borrower and its Subsidiaries, in each
case, as would be shown in the consolidated financial statements of the
Borrower and its Subsidiaries as at the beginning of the twelve-month period
ending with the month in which such determination is made (or if financial
statements have not been delivered hereunder for that month which begins the
twelve-month period, then the financial statements delivered hereunder for the
quarter ending immediately prior to that month).

 

“Supplemental Indentures” means, collectively, the
9.60% Senior Notes Supplemental Indenture and the Convertible Senior Notes
Supplemental Indenture.

 

“Taxes”
means any and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and any and all liabilities with respect to the
foregoing, but excluding Excluded Taxes and Other Taxes.

 

“Transferee”
is defined in Section 15.4.

 

“Type”
means, with respect to any Advance, its nature as a Floating Rate Advance or a
Eurodollar Advance and with respect to any Loan, its nature as a Floating Rate
Loan or a Eurodollar Loan.

 

“Unfunded Liabilities” means the amount (if any) by which
the present value of all vested and unvested accrued benefits under all Single
Employer Plans exceeds the fair market value of all such Plan assets allocable
to such benefits, all determined as of the then most recent

 

21

 

valuation date for such Plans using PBGC actuarial assumptions for
single employer plan terminations.

 

“Unmatured
Default” means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.

 

“Wholly-Owned Subsidiary” of a Person means
(i) any Subsidiary all of the outstanding voting securities of which shall
at the time be owned or controlled, directly or indirectly, by such Person or
one or more Wholly-Owned Subsidiaries of such Person, or by such Person and one
or more Wholly-Owned Subsidiaries of such Person, or (ii) any partnership,
limited liability company, association, joint venture or similar business
organization 100% of the ownership interests having ordinary voting power of
which shall at the time be so owned or controlled.

 

The foregoing
definitions shall be equally applicable to both the singular and plural forms
of the defined terms.

 

ARTICLE II

 

THE CREDITS

 

Section
2.1.           Commitment.  From and including the date of this Agreement
and prior to the Facility Termination Date, each Lender severally agrees, on
the terms and conditions set forth in this Agreement, to (i) make Loans to
the Borrower and (ii) participate in Facility LCs issued upon the request
of the Borrower, provided that, after giving effect to the making of each such
Loan and the issuance of each such Facility LC, such Lender’s Outstanding
Credit Exposure shall not exceed its Commitment and the Aggregate Outstanding
Credit Exposure shall not exceed the Aggregate Commitment.  Subject to the terms of this Agreement, the
Borrower may borrow, repay and reborrow at any time prior to the Facility
Termination Date.  The Commitments to
extend credit hereunder shall expire on the Facility Termination Date.  The LC Issuer will issue Facility LCs
hereunder on the terms and conditions set forth in Section 2.20.

 

Section
2.2.           Required Payments; Termination.  The Aggregate Outstanding Credit Exposure and
all other unpaid Obligations shall be paid in full by the Borrower on the
Facility Termination Date.

 

Section
2.3.           Ratable Loans.  Each Advance hereunder shall consist of Loans
made from the several Lenders ratably according to their Pro Rata Shares.

 

Section
2.4.           Types of Advances.  The Advances may be Floating Rate Advances or
Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with Section 2.9 and Section 2.10.

 

Section 2.5.           Commitment Fee;
Initial Aggregate Commitment; Changes in Aggregate Commitment.

 

2.5.1.       The initial Aggregate Commitment is
$500,000,000, and Administrative Agent has notified Borrower of the Required
Reserve Value for such Aggregate Commitment.

 

22

 

2.5.2.       The Borrower agrees to pay to the
Administrative Agent for the account of each Lender according to its Pro Rata
Share a commitment fee at a per annum rate equal to the Applicable Fee Rate on
the average daily Available Aggregate Commitment from the date hereof to and
including the Facility Termination Date, payable on each Payment Date hereafter
and on the Facility Termination Date. 
All accrued commitment fees shall be payable on the effective date of
any termination of the obligations of the Lenders to make Credit Extensions
hereunder.

 

2.5.3.       Once during each period between Scheduled
Redeterminations, the Borrower may reduce the Aggregate Commitment in whole, or
in part ratably among the Lenders in integral multiples of $10,000,000, upon at
least three Business Days’ written notice to the Administrative Agent, which
notice shall specify the amount of any such reduction, provided, however, that
the amount of the Aggregate Commitment may not be reduced below the aggregate
principal amount of the Aggregate Outstanding Credit Exposure.

 

2.5.4.       So long as no Default or Unmatured
Default has occurred and is continuing, the Borrower shall have the right to
increase the Aggregate Commitment by obtaining additional Commitments (the
amount of such increase is herein called the “Increase”), either from one or more of the Lenders or
another lending institution provided that (a) Borrower shall have notified
Administrative Agent of the amount of the Increase and Administrative Agent
shall have notified Borrower and Lenders of the Required Reserve Value for the
Aggregate Commitment as increased by the Increase, (b) each Lender shall
have had the option to increase its Commitment by its Pro Rata Share of the
Increase, (c) the Administrative Agent shall have approved the identity of
any such new Lender, such approval not to be unreasonably withheld, (d) any
such new Lender shall have assumed all of the rights and obligations of a “Lender”
hereunder, (e) the procedure described in Section 15.6 shall have
been complied with, (f) first Liens (subject only to Permitted
Encumbrances) shall have been created by Mortgages in favor of Administrative
Agent in the Minimum Collateral Amount of the Borrowing Base Properties (based
upon the new Required Reserve Value as described above), and (g) after
giving effect to the Increase, the Aggregate Commitment shall not exceed the
Borrowing Base.

 

Section 2.6.           Borrowing Base and
Required Reserve Value.

 

2.6.1.       During the period from the date hereof to
the first Determination Date the Borrowing Base shall be $825,000,000.

 

2.6.2.       By March 31 and September 30 of
each year beginning September 30, 2005, Borrower shall furnish to each
Lender all information, reports and data that Administrative Agent has then
requested concerning the businesses and properties (including their oil and gas
properties and interests and the reserves and production relating thereto) of
Borrower and its Subsidiaries, together with the Engineering Report.  Within 30 days after receiving such
information, reports and data, or as promptly thereafter as practicable,
Required Lenders shall agree upon an amount for the Borrowing Base (provided
that all Lenders must agree to any increase in the Borrowing Base) and
Administrative Agent shall by notice to Borrower designate such amount as the
new Borrowing Base available to Borrower hereunder and the Required Reserve Value
for the Aggregate Commitment then in effect, which designation shall take
effect immediately on the date such notice is sent (herein called a “Determination Date”) and shall

 

23

 

remain in effect until but not including the
next date as of which the Borrowing Base is redetermined.  If Borrower does not furnish all such
information, reports and data by the date specified in the first sentence of
this Section, Administrative Agent may nonetheless designate the Borrowing Base
and the Required Reserve Value at any amount which Required Lenders determine
and may redesignate the Borrowing Base and the Required Reserve Value from time
to time thereafter until each Lender receives all such information, reports and
data, whereupon Required Lenders shall designate a new Borrowing Base and
Required Reserve Value as described above. 
Required Lenders shall determine the amount of the Borrowing Base based
upon the loan collateral value which they in their discretion assign to the
various oil and gas properties included in the Collateral at the time in
question and based upon such other credit factors (including without limitation
the assets, liabilities, cash flow, hedged and unhedged exposure to price,
foreign exchange rate, and interest rate changes, business, properties,
prospects, management and ownership of Borrower and its Subsidiaries) as they
in their discretion deem significant.  It
is expressly understood that Lenders and Administrative Agent have no
obligation to agree upon or designate the Borrowing Base or the Required
Reserve Value at any particular amount, whether in relation to the Aggregate
Commitment or otherwise.

 

2.6.3.       In addition to Scheduled
Redeterminations, Required Lenders shall be permitted to make a Special
Redetermination of the Borrowing Base once in each calendar year.  Any request by Required Lenders pursuant to
this Section 2.6.3 shall be submitted to Administrative Agent and
Borrower.

 

2.6.4.       In addition to Scheduled
Redeterminations, Borrower shall be permitted to request a Special
Redetermination of the Borrowing Base once in each calendar year.  Such request shall be submitted to
Administrative Agent and Lenders and at the time of such request Borrower shall
(x) deliver to Administrative Agent and each Lender an Engineering Report,
and (y) notify Administrative Agent and each Lender of the Borrowing Base
requested by Borrower in connection with such Special Redetermination.

 

2.6.5.       Any Special Redetermination shall be made
by Lenders in accordance with the procedures and standards set forth in
Section 2.6.2; provided, that, no Engineering Report will be required to
be delivered to Administrative Agent and Lenders in connection with any Special
Redetermination requested by Required Lenders pursuant to Section 2.6.3.

 

2.6.6.       In addition to Scheduled Redeterminations
and Special Redeterminations, Administrative Agent and/or Required Lenders
shall be permitted to initiate and cause a redetermination of the Borrowing
Base simultaneously with (or within five (5) Business Days of) the consummation
of (a) the issuance by the Borrower of any Permitted Bond Indebtedness,
and/or (b) any lease, sale or other disposition of any Property of the Borrower
and its Subsidiaries pursuant to Section 7.4(iv)(A), which lease, sale or
other disposition relates to Property constituting more than 10% of the
Engineered Value of the Borrowing Base Properties as determined by
Administrative Agent in its sole discretion. 
Any redetermination of the Borrowing Base pursuant to this Section 2.6.6
shall be made by Lenders in accordance with the procedures and standards set
forth in Section 2.6.2; provided, that, no Engineering Report will be
required to be delivered to Administrative Agent and Lenders in connection with
any redetermination of the Borrowing Base pursuant to this Section 2.6.6.

 

24

 

Section
2.7.           Minimum Amount of Each Advance.  Each Eurodollar Advance shall be in the
minimum amount of $3,000,000 (and in multiples of $500,000 if in excess
thereof), and each Floating Rate Advance shall be in the minimum amount of
$1,000,000 (and in multiples of $500,000 if in excess thereof), provided,
however, that any Floating Rate Advance may be in the amount of the Available
Aggregate Commitment.

 

Section 2.8.           Principal Payments.

 

(a)           Optional
Principal Payments.  The
Borrower may from time to time pay, without penalty or premium, all outstanding
Floating Rate Advances, or, in a minimum aggregate amount of $1,000,000 or any
integral multiple of $500,000 in excess thereof, any portion of the outstanding
Floating Rate Advances upon two Business Days’ prior notice to the
Administrative Agent.  The Borrower may
from time to time pay, subject to the payment of any funding indemnification amounts
required by Section 3.5 but without penalty or premium, all outstanding
Eurodollar Advances, or, in a minimum aggregate amount of $3,000,000 or any
integral multiple of $500,000 in excess thereof, any portion of the outstanding
Eurodollar Advances upon three Business Days’ prior notice to the
Administrative Agent.

 

(b)           Mandatory
Payments.  If at any time (i) the
Aggregate Outstanding Credit Exposure is in excess of the Aggregate Commitment
(in this Section, such excess is called a “Deficiency”),
Borrower shall, except as otherwise provided below, within 90 days after
Administrative Agent gives notice of such fact to Borrower, prepay the
principal of the Loans in an aggregate amount at least equal to such Deficiency
(or, if the Loans have been paid in full, deposit into the Facility LC
Collateral Account the amount required to eliminate the Deficiency), or (ii) the
Borrower or any of its Subsidiaries become obligated to prepay all or any
portion of the Senior Notes, any Permitted Bond Indebtedness or any
Indebtedness evidenced by a 9.60% Senior Notes Refinancing, as a result of
acceleration (or similar action) after a default or event of default thereunder
or with respect thereto, the Borrower or its Subsidiaries shall, prior to any
such prepayment, and except as otherwise provided and permitted by Section 7.14(c),
prepay the Loans and reduce the Commitments in full.  Notwithstanding anything to the contrary
contained herein, upon any redetermination of the Borrowing Base pursuant to
Section 2.6.6 which results in a Deficiency (or increase in any existing
Deficiency), the Borrower shall promptly, but in all events within two (2)
Business Days after the Administrative Agent gives notice of such Deficiency
(or increase in such Deficiency) to the Borrower, prepay the principal of the
Loan in an aggregate amount at least equal to such Deficiency (or increase in
any previously existing Deficiency) or, if the Loans have been paid in full,
deposit into the Facility LC Collateral Account the amount required to eliminate
the Deficiency (or increase in any previously existing Deficiency).  Each payment of principal under this Section
shall be accompanied by all interest then accrued and unpaid on the principal
so prepaid.  Any principal or interest
prepaid pursuant to this Section shall be in addition to, and not in lieu
of, all payments otherwise required to be paid under the Loan Documents at the
time of such prepayment.

 

Section
2.9.           Method of Selecting Types
and Interest Periods for new Advances.  The Borrower shall select the Type of Advance
and, in the case of each Eurodollar Advance, the Interest Period applicable
thereto from time to time.  The Borrower
shall give the Administrative Agent irrevocable notice (a “Borrowing Notice”) not later than 11:00
a.m. (Chicago time) on the

 

25

 

same Business
Day as the Borrowing Date of each Floating Rate Advance and three Business Days
before the Borrowing Date for each Eurodollar Advance, specifying:

 

(i)            the Borrowing Date, which shall be a
Business Day, of such Advance,

 

(ii)           the aggregate amount of such Advance,

 

(iii)          the Type of Advance selected, and

 

(iv)          in the case of each Eurodollar
Advance, the Interest Period applicable thereto.

 

Not later than
noon (Chicago time) on each Borrowing Date, each Lender shall make available
its Loan or Loans in funds immediately available in Chicago to the
Administrative Agent at its address specified pursuant to Article XVI.  The Administrative Agent will make the funds
so received from the Lenders available to the Borrower at the Administrative
Agent’s aforesaid address.

 

Section
2.10.        Conversion and
Continuation of Outstanding Advances.  Floating Rate Advances shall continue as
Floating Rate Advances unless and until such Floating Rate Advances are
converted into Eurodollar Advances pursuant to this Section 2.10 or are
repaid in accordance with Section 2.8. 
Each Eurodollar Advance shall continue as a Eurodollar Advance until the
end of the then applicable Interest Period therefor, at which time such
Eurodollar Advance shall be automatically converted into a Floating Rate
Advance unless (x) such Eurodollar Advance is or was repaid in accordance
with Section 2.8 or (y) the Borrower shall have given the
Administrative Agent a Conversion/Continuation Notice (as defined below)
requesting that, at the end of such Interest Period, such Eurodollar Advance
continue as a Eurodollar Advance for the same or another Interest Period.  Subject to the terms of Section 2.7, the
Borrower may elect from time to time to convert all or any part of a Floating
Rate Advance into a Eurodollar Advance. 
The Borrower shall give the Administrative Agent irrevocable notice (a “Conversion/Continuation Notice”) of
each conversion of a Floating Rate Advance into a Eurodollar Advance or
continuation of a Eurodollar Advance not later than 10:00 a.m. (Chicago time)
at least three Business Days prior to the date of the requested conversion or
continuation, specifying:

 

(i)            the requested date, which shall be a
Business Day, of such conversion or continuation,

 

(ii)           the aggregate amount and Type of the
Advance which is to be converted or continued, and

 

(iii)          the amount of such Advance which is to
be converted into or continued as a Eurodollar Advance and the duration of the
Interest Period applicable thereto.

 

Section
2.11.        Changes in Interest Rate, etc.  Each Floating Rate Advance shall bear
interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is automatically converted from a
Eurodollar Advance into a

 

26

 

Floating Rate
Advance pursuant to Section 2.10, to but excluding the date it is paid or
is converted into a Eurodollar Advance pursuant to Section 2.10, at a rate
per annum equal to the Floating Rate for such day.  Changes in the rate of interest on that
portion of any Advance maintained as a Floating Rate Advance will take effect
simultaneously with each change in the Alternate Base Rate.  Each Eurodollar Advance shall bear interest
on the outstanding principal amount thereof from and including the first day of
the Interest Period applicable thereto to (but not including) the last day of
such Interest Period at the interest rate determined by the Administrative Agent
as applicable to such Eurodollar Advance based upon the Borrower’s selections
under Section 2.9 and Section 2.10 and otherwise in accordance with
the terms hereof.  No Interest Period may
end after the Facility Termination Date.

 

Section
2.12.        Rates Applicable After Default.  Notwithstanding anything to the contrary
contained in Section 2.9, Section 2.10 or Section 2.11, during
the continuance of a Default or Unmatured Default the Required Lenders may, at
their option, by notice to the Borrower, declare that no Advance may be made
as, converted into or continued as a Eurodollar Advance.  During the continuance of a Default the
Required Lenders may, at their option, by notice to the Borrower, declare that (i) each
Eurodollar Advance shall bear interest for the remainder of the applicable
Interest Period at the rate otherwise applicable to such Interest Period plus
2% per annum, (ii) each Floating Rate Advance shall bear interest at a
rate per annum equal to the Floating Rate in effect from time to time plus 2%
per annum and (iii) the LC Fee shall be increased by 2% per annum,
provided that, during the continuance of a Default under Section 10.6 or Section 10.7,
the interest rates set forth in clauses (i) and (ii) above and the increase in
the LC Fee set forth in clause (iii) above shall be applicable to all Credit
Extensions without any election or action on the part of the Administrative
Agent or any Lender.

 

Section 2.13.        Method of Payment.

 

2.13.1.     All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Administrative Agent at the Administrative Agent’s
address specified pursuant to Article XVI, or at any other Lending
Installation of the Administrative Agent specified in writing by the
Administrative Agent to the Borrower, by noon (local time) on the date when due
and shall (except in the case of Reimbursement Obligations for which the LC
Issuer has not been fully indemnified by the Lenders, or as otherwise
specifically required hereunder) be applied ratably by the Administrative Agent
among the Lenders.  Each payment
delivered to the Administrative Agent for the account of any Lender shall be
delivered promptly by the Administrative Agent to such Lender in the same type
of funds that the Administrative Agent received at its address specified
pursuant to Article XVI or at any Lending Installation specified in a
notice received by the Administrative Agent from such Lender.  The Administrative Agent is hereby authorized
to charge the account of the Borrower maintained with JPMorgan for each payment
of principal, interest, Reimbursement Obligations and fees as it becomes due
hereunder.  Each reference to the
Administrative Agent in this Section 2.13 shall also be deemed to refer, and
shall apply equally, to the LC Issuer, in the case of payments required to be
made by the Borrower to the LC Issuer pursuant to Section 2.20.

 

27

 

2.13.2.     When Administrative Agent collects or
receives proceeds of Collateral, Administrative Agent shall distribute all
money so collected or received, and Administrative Agent and each Lender shall
apply all such money so distributed, as follows:

 

(a)           first, for the payment of all Secured
Obligations which are then due and if such money is insufficient to pay all
such Secured Obligations, first to any reimbursements due Administrative Agent
under Section 12.6 and then to the partial payment of all other Secured
Obligations then due in proportion to the amounts thereof, or as Administrative
Agent and Lender shall otherwise agree;

 

(b)           then for the prepayment of the
Secured Obligations; and

 

(c)           last, for the payment or prepayment
of any other indebtedness or obligations secured by the Collateral.

 

All payments
applied to principal or interest on any Note shall be applied first to any
interest then due and payable, then to principal then due and payable, and last
to any prepayment of principal and interest in compliance with Section 2.8.  All distributions of amounts described in any
of subsections (b) or (c) above shall be made by Administrative Agent pro rata
to each Lender (or its affiliate, as applicable) then owed Secured Obligations
described in such subsection in proportion to all amounts owed to Administrative
Agent and all Lenders (or their affiliates, as applicable) which are described
in such subsection; provided that if any Lender then owes payments to LC Issuer
for the purchase of a participation under Section 2.20.5 or to
Administrative Agent under Section 13.8, any amounts otherwise
distributable under this Section to such Lender shall be deemed to belong to LC
Issuer, or Administrative Agent, respectively, to the extent of such unpaid
payments, and Administrative Agent shall apply such amounts to make such unpaid
payments rather than distribute such amounts to such Lender.

 

Section 2.14.        Evidence of
Indebtedness.

 

(i)            Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Loan made by
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.

 

(ii)           The Administrative Agent shall also
maintain accounts in which it will record (a) the amount of each Loan made
hereunder, the Type thereof and the Interest Period with respect thereto,
(b) the amount of any principal or interest due and payable or to become
due and payable from the Borrower to each Lender hereunder, (c) the
original stated amount of each Facility LC and the amount of LC Obligations
outstanding at any time, and (d) the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each Lender’s share
thereof.

 

(iii)          The entries maintained in the accounts
maintained pursuant to paragraphs (i) and (ii) above shall be prima
facie evidence of the existence and amounts of the Obligations therein
recorded; provided, however, that the failure of the Administrative Agent or
any Lender to maintain such accounts or any error therein shall not in any
manner affect the obligation of the Borrower to repay the Obligations in
accordance with their terms.

 

28

 

(iv)          Each Lender’s Loans and interest
thereon shall at all times be evidenced by a promissory note in the form of Exhibit A
hereto (each a “Note”)
payable to the order of such Lender.

 

Section
2.15.        Telephonic Notices.  The Borrower hereby authorizes the Lenders
and the Administrative Agent to extend, convert or continue Advances, effect
selections of Types of Advances and to transfer funds based on telephonic
notices made by any person or persons the Administrative Agent or any Lender in
good faith believes to be acting on behalf of the Borrower, it being understood
that the foregoing authorization is specifically intended to allow Borrowing
Notices and Conversion/Continuation Notices to be given telephonically.  The Borrower agrees to deliver promptly to
the Administrative Agent a written confirmation, if such confirmation is
requested by the Administrative Agent or any Lender, of each telephonic notice
signed by an Authorized Officer.  If the
written confirmation differs in any material respect from the action taken by
the Administrative Agent and the Lenders, the records of the Administrative
Agent and the Lenders shall govern absent manifest error.

 

Section
2.16.        Interest Payment Dates; Interest and Fee Basis.  Interest accrued on each Floating Rate
Advance shall be payable on each Payment Date, commencing with the first such
date to occur after the date hereof, on any date on which the Floating Rate
Advance is prepaid, whether due to acceleration or otherwise, and at
maturity.  Interest accrued on that
portion of the outstanding principal amount of any Floating Rate Advance
converted into a Eurodollar Advance on a day other than a Payment Date shall be
payable on the date of conversion. 
Interest accrued on each Eurodollar Advance shall be payable on the last
day of its applicable Interest Period, on any date on which the Eurodollar
Advance is prepaid, whether by acceleration or otherwise, and at maturity.  Interest accrued on each Eurodollar Advance
having an Interest Period longer than three months shall also be payable on the
last day of each three-month interval during such Interest Period.  Interest, commitment fees and LC Fees shall
be calculated for actual days elapsed on the basis of a 360-day year.  Interest shall be payable for the day an
Advance is made but not for the day of any payment on the amount paid if
payment is received prior to noon (local time) at the place of payment.  If any payment of principal of or interest on
an Advance shall become due on a day which is not a Business Day, such payment
shall be made on the next succeeding Business Day and, in the case of a
principal payment, such extension of time shall be included in computing
interest in connection with such payment.

 

Section
2.17.        Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. 
Promptly after receipt thereof, the Administrative Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Conversion/Continuation Notice, and repayment notice received
by it hereunder.  Promptly after notice
from the LC Issuer, the Administrative Agent will notify each Lender of the
contents of each request for issuance of a Facility LC hereunder.  The Administrative Agent will notify each
Lender of the interest rate applicable to each Eurodollar Advance promptly upon
determination of such interest rate and will give each Lender prompt notice of
each change in the Alternate Base Rate.

 

Section
2.18.        Lending Installations.  Each Lender may book its Loans and its
participation in any LC Obligations and the LC Issuer may book the Facility LCs
at any Lending Installation selected by such Lender or the LC Issuer, as the
case may be, and may change its

 

29

 

Lending
Installation from time to time.  All
terms of this Agreement shall apply to any such Lending Installation and the
Loans, Facility LCs, participations in LC Obligations and any Notes issued
hereunder shall be deemed held by each Lender or the LC Issuer, as the case may
be, for the benefit of any such Lending Installation.  Each Lender and the LC Issuer may, by written
notice to the Administrative Agent and the Borrower in accordance with Article XVI,
designate replacement or additional Lending Installations through which Loans
will be made by it or Facility LCs will be issued by it and for whose account
Loan payments or payments with respect to Facility LCs are to be made.

 

Section
2.19.        Non-Receipt of Funds by the Administrative Agent.  Unless the Borrower or a Lender, as the case
may be, notifies the Administrative Agent prior to the date on which it is
scheduled to make payment to the Administrative Agent of (i) in the case
of a Lender, the proceeds of a Loan or (ii) in the case of the Borrower, a
payment of principal, interest or fees to the Administrative Agent for the
account of the Lenders, that it does not intend to make such payment, the
Administrative Agent may assume that such payment has been made.  The Administrative Agent may, but shall not
be obligated to, make the amount of such payment available to the intended
recipient in reliance upon such assumption. 
If such Lender or the Borrower, as the case may be, has not in fact made
such payment to the Administrative Agent, the recipient of such payment shall,
on demand by the Administrative Agent, repay to the Administrative Agent the
amount so made available together with interest thereon in respect of each day
during the period commencing on the date such amount was so made available by
the Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a
Lender, the Federal Funds Effective Rate for such day for the first three days
and, thereafter, the interest rate applicable to the relevant Loan or
(y) in the case of payment by the Borrower, the interest rate applicable
to the relevant Loan.

 

Section 2.20.        Facility LCs.

 

2.20.1.     Issuance.  The LC Issuer hereby agrees, on the terms and
conditions set forth in this Agreement, to issue standby and commercial letters
of credit (each, together with the Existing Letter of Credit, a “Facility LC”) and to renew, extend,
increase, decrease or otherwise modify each Facility LC (“Modify,”
and each such action a “Modification”), from time to time
from and including the date of this Agreement and prior to the Facility
Termination Date upon the request of the Borrower; provided that immediately
after each such Facility LC is issued or Modified, (i) the aggregate
amount of the outstanding LC Obligations shall not exceed $50,000,000 and (ii) the
Aggregate Outstanding Credit Exposure shall not exceed the Aggregate
Commitment.  No Facility LC shall have an
expiry date later than one year after the issuance thereof; provided that if
such expiry date is after the fifth Business Day prior to the Facility
Termination Date, Borrower shall deposit in the Facility LC Collateral Account
on such fifth Business Day immediately available funds in an amount equal to or
greater than the undrawn amount of such Facility LC.

 

2.20.2.     Participations.  Upon the issuance or Modification by the LC
Issuer of a Facility LC in accordance with this Section 2.20, and, with
respect to the Existing Letter of Credit, on the Closing Date, the LC Issuer
shall be deemed, without further action by any party hereto, to have unconditionally
and irrevocably sold to each Lender, and each Lender shall be deemed, without
further action by any party hereto, to have unconditionally and irrevocably

 

30

 

purchased from the LC Issuer, a participation
in such Facility LC (and each Modification thereof) and the related LC
Obligations in proportion to its Pro Rata Share.

 

2.20.3.     Notice.  Subject to Section 2.20.1, the Borrower
shall give the LC Issuer notice prior to 10:00 a.m. (Chicago time) at least
five Business Days prior to the proposed date of issuance or Modification of
each Facility LC, specifying the beneficiary, the proposed date of issuance (or
Modification) and the expiry date of such Facility LC, and describing the
proposed terms of such Facility LC and the nature of the transactions proposed
to be supported thereby.  Upon receipt of
such notice, the LC Issuer shall promptly notify the Administrative Agent, and
the Administrative Agent shall promptly notify each Lender, of the contents
thereof and of the amount of such Lender’s participation in such proposed
Facility LC.  The issuance or
Modification by the LC Issuer of any Facility LC shall, in addition to the
conditions precedent set forth in Article IV (the satisfaction of which
the LC Issuer shall have no duty to ascertain), be subject to the conditions
precedent that such Facility LC shall be satisfactory to the LC Issuer and that
the Borrower shall have executed and delivered such application agreement
and/or such other instruments and agreements relating to such Facility LC as
the LC Issuer shall have reasonably requested (each, a “Facility LC Application”).  In the event of any conflict between the
terms of this Agreement and the terms of any Facility LC Application, the terms
of this Agreement shall control.

 

2.20.4.     LC
Fees.  The Borrower shall
pay to the Administrative Agent, for the account of the Lenders ratably in
accordance with their respective Pro Rata Shares, at the time of issuance of
each Facility LC, a letter of credit fee calculated at an amount equal to the
greater of $500.00 or a per annum rate equal to the Applicable Margin for
Eurodollar Loans on the stated amount of such Facility LC (each such fee
described in this sentence an “LC Fee”).  The Borrower shall also pay to the LC Issuer
for its own account at the time of issuance of each Facility LC, a fronting fee
in an amount equal to 0.125% of the initial stated amount, and documentary and
processing charges in connection with the issuance or Modification of and draws
under Facility LCs in accordance with the LC Issuer’s standard schedule for
such charges as in effect from time to time.

 

2.20.5.     Administration;
Reimbursement by Lenders. 
Upon receipt from the beneficiary of any Facility LC of any demand for
payment under such Facility LC, the LC Issuer shall notify the Administrative
Agent and the Administrative Agent shall promptly notify the Borrower and each
Lender as to the amount to be paid by the LC Issuer as a result of such demand
and the proposed payment date (the “LC
Payment Date”).  The
responsibility of the LC Issuer to the Borrower and each Lender shall be only
to determine that the documents (including each demand for payment) delivered
under each Facility LC in connection with such presentment shall be in conformity
in all material respects with such Facility LC. 
The LC Issuer shall endeavor to exercise the same care in the issuance
and administration of the Facility LCs as it does with respect to letters of
credit in which no participations are granted, it being understood that in the
absence of any gross negligence or willful misconduct by the LC Issuer, each
Lender shall be unconditionally and irrevocably liable without regard to the
occurrence of any Default or any condition precedent whatsoever, to reimburse
the LC Issuer on demand for (i) such Lender’s Pro Rata Share of the amount
of each payment made by the LC Issuer under each Facility LC to the extent such
amount is not reimbursed by the Borrower pursuant to Section 2.20.6 below,
plus (ii) interest on the foregoing amount to be reimbursed by such
Lender, for each day from the date

 

31

 

of the LC Issuer’s demand for such
reimbursement (or, if such demand is made after 11:00 a.m. (Chicago time) on
such date, from the next succeeding Business Day) to the date on which such
Lender pays the amount to be reimbursed by it, at a rate of interest per annum
equal to the Federal Funds Effective Rate for the first three days and,
thereafter, at a rate of interest equal to the rate applicable to Floating Rate
Advances.

 

2.20.6.     Reimbursement
by Borrower.  The Borrower
shall be irrevocably and unconditionally obligated to reimburse the LC Issuer
on or before the applicable LC Payment Date for any amounts to be paid by the
LC Issuer upon any drawing under any Facility LC, without presentment, demand,
protest or other formalities of any kind; provided that neither the Borrower
nor any Lender shall hereby be precluded from asserting any claim for direct
(but not consequential) damages suffered by the Borrower or such Lender to the
extent, but only to the extent, caused by (i) the willful misconduct or
gross negligence of the LC Issuer in determining whether a request presented
under any Facility LC issued by it complied with the terms of such Facility LC
or (ii) the LC Issuer’s failure to pay under any Facility LC issued by it
after the presentation to it of a request strictly complying with the terms and
conditions of such Facility LC.  All such
amounts paid by the LC Issuer and remaining unpaid by the Borrower shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to (x) the rate applicable to Floating Rate Advances for such day if such
day falls on or before the applicable LC Payment Date and (y) the sum of
2% plus the rate applicable to Floating Rate Advances for such day if such day
falls after such LC Payment Date.  The LC
Issuer will pay to each Lender ratably in accordance with its Pro Rata Share
all amounts received by it from the Borrower for application in payment, in
whole or in part, of the Reimbursement Obligation in respect of any Facility LC
issued by the LC Issuer, but only to the extent such Lender has made payment to
the LC Issuer in respect of such Facility LC pursuant to Section 2.20.5.  Subject to the terms and conditions of this
Agreement (including without limitation the submission of a Borrowing Notice in
compliance with Section 2.9 and the satisfaction of the applicable
conditions precedent set forth in Article IV), the Borrower may request an
Advance hereunder for the purpose of satisfying any Reimbursement Obligation.

 

2.20.7.     Obligations
Absolute.  The Borrower’s
obligations under this Section 2.20 shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower may have or have had against the LC
Issuer, any Lender or any beneficiary of a Facility LC.  The Borrower further agrees with the LC Issuer
and the Lenders that the LC Issuer and the Lenders shall not be responsible
for, and the Borrower’s Reimbursement Obligation in respect of any Facility LC
shall not be affected by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even if such documents should in fact
prove to be in any or all respects invalid, fraudulent or forged, or any
dispute between or among the Borrower, any of its Affiliates, the beneficiary
of any Facility LC or any financing institution or other party to whom any
Facility LC may be transferred or any claims or defenses whatsoever of the
Borrower or of any of its Affiliates against the beneficiary of any Facility LC
or any such transferee.  The LC Issuer
shall not be liable for any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any Facility LC.  The
Borrower agrees that any action taken or omitted by the LC Issuer or any Lender
under or in connection with each Facility LC and the related drafts and
documents, if done without gross negligence or willful misconduct, shall be
binding upon the Borrower and shall not put the LC

 

32

 

Issuer or any Lender under any liability to
the Borrower.  Nothing in this
Section 2.20.7 is intended to limit the right of the Borrower to make a
claim against the LC Issuer for damages as contemplated by the proviso to the
first sentence of Section 2.20.6.

 

2.20.8.     Actions
of LC Issuer.  The LC
Issuer shall be entitled to rely, and shall be fully protected in relying, upon
any Facility LC, draft, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by the LC Issuer.  The
LC Issuer shall be fully justified in failing or refusing to take any action
under this Agreement unless it shall first have received such advice or
concurrence of the Required Lenders as it reasonably deems appropriate or it
shall first be indemnified to its reasonable satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action.  Notwithstanding any other provision of this Section 2.20,
the LC Issuer shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement in accordance with a request of the Required
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon the Lenders and any future holders of a participation
in any Facility LC.

 

2.20.9.     Indemnification.  The Borrower hereby agrees to indemnify and
hold harmless each Lender, the LC Issuer and the Administrative Agent, and
their respective directors, officers, agents and employees from and against any
and all claims and damages, losses, liabilities, costs or expenses which such
Lender, the LC Issuer or the Administrative Agent may incur (or which may be
claimed against such Lender, the LC Issuer or the Administrative Agent by any
Person whatsoever) by reason of or in connection with the issuance, execution
and delivery or transfer of or payment or failure to pay under any Facility LC
or any actual or proposed use of any Facility LC, including, without
limitation, any claims, damages, losses, liabilities, costs or expenses which
the LC Issuer may incur (i) by reason of or in connection with the failure
of any other Lender to fulfill or comply with its obligations to the LC Issuer
hereunder (but nothing herein contained shall affect any rights the Borrower
may have against any defaulting Lender) or (ii) by reason of or on account
of the LC Issuer issuing any Facility LC which specifies that the term “Beneficiary”
included therein includes any successor by operation of law of the named
Beneficiary, but which Facility LC does not require that any drawing by any
such successor Beneficiary be accompanied by a copy of a legal document,
satisfactory to the LC Issuer, evidencing the appointment of such successor
Beneficiary; provided that the Borrower shall not be required to indemnify any
Lender, the LC Issuer or the Administrative Agent for any claims, damages,
losses, liabilities, costs or expenses to the extent, but only to the extent,
caused by (x) the willful misconduct or gross negligence of the LC Issuer
in determining whether a request presented under any Facility LC complied with
the terms of such Facility LC or (y) the LC Issuer’s failure to pay under
any Facility LC after the presentation to it of a request strictly complying
with the terms and conditions of such Facility LC.  Nothing in this Section 2.20.9 is
intended to limit the obligations of the Borrower under any other provision of
this Agreement.

 

2.20.10.   Lenders’
Indemnification.  Each
Lender shall, ratably in accordance with its Pro Rata Share, indemnify the LC
Issuer, its affiliates and their respective directors,

 

33

 

officers, agents and employees (to the extent
not reimbursed by the Borrower) against any cost, expense (including reasonable
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from such indemnitees’ gross negligence or willful
misconduct or the LC Issuer’s failure to pay under any Facility LC after the
presentation to it of a request strictly complying with the terms and
conditions of the Facility LC) that such indemnitees may suffer or incur in
connection with this Section 2.20 or any action taken or omitted by such
indemnitees hereunder.

 

2.20.11.   Facility
LC Collateral Account. 
The Borrower agrees that it will, upon the request of the Administrative
Agent or the Required Lenders and until the final expiration date of any
Facility LC and thereafter as long as any amount is payable to the LC Issuer or
the Lenders in respect of any Facility LC, maintain a special collateral
account pursuant to arrangements satisfactory to the Administrative Agent (the “Facility LC Collateral Account”) at the
Administrative Agent’s office at the address specified pursuant to Article XVI,
in the name of the Borrower but under the sole dominion and control of the
Administrative Agent, for the benefit of the Lenders and in which the Borrower
shall have no interest other than as set forth in Section 11.1.  The Borrower hereby pledges, assigns and
grants to the Administrative Agent, on behalf of and for the ratable benefit of
the Lenders and the LC Issuer, a security interest in all of the Borrower’s
right, title and interest in and to all funds which may from time to time be on
deposit in the Facility LC Collateral Account to secure the prompt and complete
payment and performance of the Obligations. 
The Administrative Agent will invest any funds on deposit from time to
time in the Facility LC Collateral Account in certificates of deposit of
JPMorgan having a maturity not exceeding 30 days.  Nothing in this Section 2.20.11 shall
either obligate the Administrative Agent to require the Borrower to deposit any
funds in the Facility LC Collateral Account or limit the right of the
Administrative Agent to release any funds held in the Facility LC Collateral
Account in each case other than as required by Section 11.1.

 

2.20.12.   Rights
as a Lender.  In its
capacity as a Lender, the LC Issuer shall have the same rights and obligations
as any other Lender.

 

Section
2.21.        Replacement of Lender.  If the Borrower is required pursuant to Section 3.1,
Section 3.2 or Section 3.5 to make any additional payment to any
Lender or if any Lender’s obligation to make or continue, or to convert
Floating Rate Advances into, Eurodollar Advances shall be suspended pursuant to
Section 3.4 (any Lender so affected an “Affected Lender”), the Borrower may elect, if such amounts
continue to be charged or such suspension is still effective, to replace such
Affected Lender as a Lender party to this Agreement, provided that no Default
or Unmatured Default shall have occurred and be continuing at the time of such
replacement, and provided further that, concurrently with such replacement, (i) another
bank or other entity which is reasonably satisfactory to the Borrower and the
Administrative Agent shall agree, as of such date, to purchase for cash the
Advances and other Obligations due to the Affected Lender pursuant to an
assignment substantially in the form of Exhibit C and to become a
Lender for all purposes under this Agreement and to assume all obligations of
the Affected Lender to be terminated as of such date and to comply with the
requirements of Section 15.3 applicable to assignments, and (ii) the
Borrower shall pay to such Affected Lender in same day funds on the day of such
replacement (a) all interest, fees and other amounts then accrued but
unpaid to such Affected Lender by the Borrower hereunder to and including the
date of termination, including without limitation payments due to such Affected
Lender under

 

34

 

Section 3.1,
Section 3.2 and Section 3.5, and (b) an amount, if any, equal to
the payment which would have been due to such Lender on the day of such
replacement under Section 3.4 had the Loans of such Affected Lender been
prepaid on such date rather than sold to the replacement Lender.

 

Section
2.22.        Limitation of Interest.  The Borrower, the Administrative Agent and
the Lenders intend to strictly comply with all applicable laws, including applicable
usury laws.  Accordingly, the provisions
of this Section 2.22 shall govern and control over every other provision
of this Agreement or any other Loan Document which conflicts or is inconsistent
with this Section 2.22, even if such provision declares that it
controls.  As used in this Section 2.22,
the term “interest” includes the aggregate of all charges, fees, benefits or
other compensation which constitute interest under applicable law, provided
that, to the maximum extent permitted by applicable law, (a) any
non-principal payment shall be characterized as an expense or as compensation
for something other than the use, forbearance or detention of money and not as
interest, and (b) all interest at any time contracted for, reserved,
charged or received shall be amortized, prorated, allocated and spread, in
equal parts during the full term of the Obligations.  In no event shall the Borrower or any other
Person be obligated to pay, or any Lender have any right or privilege to
reserve, receive or retain, total interest in excess of the amount which such
Lender could lawfully have contracted for, reserved, received, retained or
charged had the interest been calculated for the full term of the Obligations
at the Highest Lawful Rate.  None of the
terms and provisions contained in this Agreement or in any other Loan Document
which directly or indirectly relate to interest shall ever be construed without
reference to this Section 2.22, or be construed to create a contract to
pay for the use, forbearance or detention of money at an interest rate in
excess of the Highest Lawful Rate.

 

ARTICLE III

 

YIELD PROTECTION; TAXES

 

Section
3.1.           Yield Protection.  If, on or after the date of this Agreement,
the adoption of any law or any governmental or quasi-governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law), or any change in the interpretation or administration thereof by any
governmental or quasi-governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Lender or applicable Lending Installation or the LC Issuer with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:

 

(i)            subjects any Lender or any
applicable Lending Installation or the LC Issuer to any Taxes, or changes the
basis of taxation of payments (other than with respect to Excluded Taxes) to
any Lender or the LC Issuer in respect of its Eurodollar Loans, Facility LCs or
participations therein, or

 

(ii)           imposes or increases or deems
applicable any reserve, assessment, insurance charge, special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender or any applicable Lending

 

35

 

Installation or the LC Issuer (other than
reserves and assessments taken into account in determining the interest rate
applicable to Eurodollar Advances), or

 

(iii)          imposes any other condition the result
of which is to increase the cost to any Lender or any applicable Lending
Installation or the LC Issuer of making, funding or maintaining its Eurodollar
Loans, or of issuing or participating in Facility LCs, or reduces any amount
receivable by any Lender or any applicable Lending Installation or the LC
Issuer in connection with its Eurodollar Loans, Facility LCs or participations
therein, or requires any Lender or any applicable Lending Installation or the
LC Issuer to make any payment calculated by reference to the amount of
Eurodollar Loans, Facility LCs or participations therein held or interest or LC
Fees received by it, by an amount deemed material by such Lender or the LC
Issuer as the case may be,

 

and the result
of any of the foregoing is to increase the cost to such Lender or applicable
Lending Installation or the LC Issuer, as the case may be, of making or
maintaining its Eurodollar Loans or Commitment or of issuing or participating
in Facility LCs or to reduce the return received by such Lender or applicable
Lending Installation or the LC Issuer, as the case may be, in connection with
such Eurodollar Loans, Commitment, Facility LCs or participations therein,
then, within 15 days of demand by such Lender or the LC Issuer, as the case may
be, the Borrower shall pay such Lender or the LC Issuer, as the case may be,
such additional amount or amounts as will compensate such Lender or the LC
Issuer, as the case may be, for such increased cost or reduction in amount
received.

 

Section 3.2.           Changes in Capital
Adequacy Regulations.  If
a Lender or the LC Issuer determines the amount of capital required or expected
to be maintained by such Lender or the LC Issuer, any Lending Installation of
such Lender or the LC Issuer, or any corporation controlling such Lender or the
LC Issuer is increased as a result of a Change, then, within 15 days of demand
by such Lender or the LC Issuer, the Borrower shall pay such Lender or the LC
Issuer the amount necessary to compensate for any shortfall in the rate of
return on the portion of such increased capital which such Lender or the LC
Issuer determines is attributable to this Agreement, its Outstanding Credit
Exposure or its Commitment to make Loans and issue or participate in Facility
LCs, as the case may be, hereunder (after taking into account such Lender’s or
the LC Issuer’s policies as to capital adequacy).  “Change” means (i) any change
after the date of this Agreement in the Risk-Based Capital Guidelines or (ii) any
adoption of or change in any other law, governmental or quasi-governmental
rule, regulation, policy, guideline, interpretation, or directive (whether or
not having the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any Lender or the LC
Issuer or any Lending Installation or any corporation controlling any Lender or
the LC Issuer.  “Risk-Based
Capital Guidelines” means (i) the risk-based capital
guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing
the July 1988 report of the Basle Committee on Banking Regulation and
Supervisory Practices Entitled “International Convergence of Capital
Measurements and Capital Standards,” including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.

 

36

 

Section 3.3.                                Taxes.

 

(i)                                     All payments
by the Borrower to or for the account of any Lender, the LC Issuer or the
Administrative Agent hereunder or under any Note or Facility LC Application
shall be made free and clear of and without deduction for any and all
Taxes.  If the Borrower shall be required
by law to deduct any Taxes from or in respect of any sum payable hereunder to
any Lender, the LC Issuer or the Administrative Agent, to the extent not
prohibited by applicable law, (a) 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 3.3) such Lender,
the LC Issuer or the Administrative Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been
made, (b) the Borrower shall make such deductions, (c) the Borrower
shall pay the full amount deducted to the relevant authority in accordance with
applicable law and (d) the Borrower shall furnish to the Administrative
Agent the original copy of a receipt evidencing payment thereof within 30 days
after such payment is made.

 

(ii)                                  In addition,
the Borrower hereby agrees to pay any present or future stamp or documentary
taxes and any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or under any Note or Facility LC
Application or from the execution or delivery of, or otherwise with respect to,
this Agreement or any Note or Facility LC Application (“Other Taxes”).

 

(iii)                               The Borrower
hereby agrees to indemnify the Administrative Agent, the LC Issuer and each
Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under this Section 3.3)
paid by the Administrative Agent, the LC Issuer or such Lender and any
liability (including penalties, interest and expenses) arising therefrom or
with respect thereto.  Payments due under
this indemnification shall be made within 30 days of the date the
Administrative Agent, the LC Issuer or such Lender makes demand therefor
pursuant to Section 3.6.

 

(iv)                              Each Lender
that is not incorporated under the laws of the United States of America or a
state thereof (each a “Non-U.S. Lender”) agrees that it
will, not more than ten Business Days after the date of this Agreement, (i) deliver
to the Administrative Agent two duly completed copies of United States Internal
Revenue Service Form W-8BEN or W-8ECI, certifying in either case that such
Lender is entitled to receive payments under this Agreement without deduction
or withholding of any United States federal income taxes, and (ii) deliver
to the Administrative Agent a United States Internal Revenue Form W-8 or W-9,
as the case may be, and certify that it is entitled to an exemption from United
States backup withholding tax.  Each
Non-U.S. Lender further undertakes to deliver to each of the Borrower and the
Administrative Agent (x) renewals or additional copies of such form (or
any successor form) on or before the date that such form expires or becomes
obsolete, and (y) after the occurrence of any event requiring a change in
the most recent forms so delivered by it, such additional forms or amendments
thereto as may be reasonably requested by the Borrower or the Administrative
Agent.  All forms or amendments described
in the preceding sentence shall certify that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes, unless an event (including without

 

37

 

limitation
any change in treaty, law or regulation) has occurred prior to the date on
which any such delivery would otherwise be required which renders all such
forms inapplicable or which would prevent such Lender from duly completing and
delivering any such form or amendment with respect to it and such Lender
advises the Borrower and the Administrative Agent that it is not capable of
receiving payments without any deduction or withholding of United States
federal income tax.

 

(v)                                 For any
period during which a Non-U.S. Lender has failed to provide the Borrower with
an appropriate form pursuant to clause (iv) above (unless such failure is
due to a change in treaty, law or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Lender shall not be entitled to indemnification under
this Section 3.3 with respect to Taxes imposed by the United States;
provided that, should a Non-U.S. Lender which is otherwise exempt from or
subject to a reduced rate of withholding tax become subject to Taxes because of
its failure to deliver a form required under clause (iv) above, the
Borrower shall take such steps as such Non-U.S. Lender shall reasonably request
to assist such Non-U.S. Lender to recover such Taxes.

 

(vi)                              Any Lender
that is entitled to an exemption from or reduction of withholding tax with
respect to payments under this Agreement or any Note pursuant to the law of any
relevant jurisdiction or any treaty shall deliver to the Borrower (with a copy
to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or
at a reduced rate.

 

(vii)                           If the U.S.
Internal Revenue Service or any other governmental authority of the United
States or any other country or any political subdivision thereof asserts a
claim that the Administrative Agent did not properly withhold tax from amounts
paid to or for the account of any Lender (because the appropriate form was not
delivered or properly completed, because such Lender failed to notify the
Administrative Agent of a change in circumstances which rendered its exemption
from withholding ineffective, or for any other reason), such Lender shall
indemnify the Administrative Agent fully for all amounts paid, directly or
indirectly, by the Administrative Agent as tax, withholding therefor, or
otherwise, including penalties and interest, and including taxes imposed by any
jurisdiction on amounts payable to the Administrative Agent under this
subsection, together with all costs and expenses related thereto (including
attorneys fees and time charges of attorneys for the Administrative Agent,
which attorneys may be employees of the Administrative Agent).  The obligations of the Lenders under this Section 3.3(vii) shall
survive the payment of the Obligations and termination of this Agreement.

 

Section 3.4.                                Availability
of Types of Advances.  If any
Lender determines that maintenance of its Eurodollar Loans at a suitable
Lending Installation would violate any applicable law, rule, regulation, or
directive, whether or not having the force of law, or if the Required Lenders
determine that (i) deposits of a type and maturity appropriate to match
fund Eurodollar Advances are not available or (ii) the interest rate applicable
to Eurodollar Advances does not accurately reflect the cost of making or
maintaining Eurodollar Advances, then the Administrative Agent shall suspend
the availability of Eurodollar Advances and require any

 

38

 

affected Eurodollar Advances to be repaid or converted to Floating Rate
Advances, subject to the payment of any funding indemnification amounts
required by Section 3.5.

 

Section 3.5.                                Funding
Indemnification.  If any payment
of a Eurodollar Advance occurs on a date which is not the last day of the
applicable Interest Period, whether because of acceleration, prepayment or
otherwise, or a Eurodollar Advance is not made on the date specified by the
Borrower for any reason other than default by the Lenders, the Borrower will
indemnify each Lender for any loss or cost incurred by it resulting therefrom,
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain such Eurodollar Advance.

 

Section 3.6.                                Lender
Statements; Survival of Indemnity. 
To the extent reasonably possible, each Lender shall designate an
alternate Lending Installation with respect to its Eurodollar Loans to reduce
any liability of the Borrower to such Lender under Section 3.1, Section 3.2,
and Section 3.3 or to avoid the unavailability of Eurodollar Advances
under Section 3.4, so long as such designation is not, in the judgment of
such Lender, disadvantageous to such Lender. 
Each Lender shall deliver a written statement of such Lender to the
Borrower (with a copy to the Administrative Agent) as to the amount due, if
any, under Section 3.1, Section 3.2, Section 3.3, or Section 3.5.  Such written statement shall set forth in
reasonable detail the calculations upon which such Lender determined such
amount and shall be final, conclusive and binding on the Borrower in the
absence of manifest error.  Determination
of amounts payable under such Sections in connection with a Eurodollar Loan
shall be calculated as though each Lender funded its Eurodollar Loan through
the purchase of a deposit of the type and maturity corresponding to the deposit
used as a reference in determining the Eurodollar Rate applicable to such Loan,
whether in fact that is the case or not. 
Unless otherwise provided herein, the amount specified in the written
statement of any Lender shall be payable on demand after receipt by the
Borrower of such written statement.  The
obligations of the Borrower under Section 3.1, Section 3.2, Section 3.3,
and Section 3.5 shall survive payment of the Obligations and termination
of this Agreement.

 

ARTICLE IV

 

CONDITIONS PRECEDENT

 

Section 4.1.                                Initial
Credit Extension.  The Lenders
shall not be required to make the initial Credit Extension hereunder unless:

 

4.1.1.                     The Borrower
has furnished to the Administrative Agent the following, with sufficient copies
for the Lenders:

 

(i)                                     Copies of
the certificate or articles of incorporation, certificate or articles of
organization, certificate of partnership or comparable charter documents of the
Borrower and each Material Subsidiary, together with all amendments, and a
certificate of existence, good standing and foreign qualification for the
Borrower and each Material Subsidiary, each certified by the appropriate
governmental officer in the Borrower’s and each such Material Subsidiary’s
applicable jurisdiction of incorporation or organization and, with

 

39

 

respect
to foreign qualification certificates, in such jurisdictions as the
Administrative Agent has requested.

 

(ii)                                  Copies,
certified by the Secretary or Assistant Secretary of the Borrower and each
Material Subsidiary, as applicable, of its by-laws, regulations or comparable
charter documents, and all amendments thereto, and of its Board of Directors’
(or comparable authority) resolutions (or comparable authorizations) and of
resolutions or actions of any other body authorizing the execution of the Loan
Documents to which the Borrower and/or such Material Subsidiaries are a party
and the consummation of the Mergers and the other Closing Transactions.

 

(iii)                               An
incumbency certificate, executed by the Secretary or Assistant Secretary of the
Borrower and each Material Subsidiary, as applicable, which shall identify by
name and title and bear the signatures of the Authorized Officers and any other
officers of the Borrower and such Material Subsidiaries authorized to sign the
Loan Documents to which the Borrower and/or such Material Subsidiaries are a
party, upon which certificate the Administrative Agent and the Lenders shall be
entitled to rely until informed of any change in writing by the Borrower.

 

(iv)                              A
certificate, signed by the chief financial officer of the Borrower, stating
that on the initial Credit Extension Date no Default or Unmatured Default has
occurred and is continuing.

 

(v)                                 A written
opinion of counsel to the Borrower and the Guarantors, addressed to the
Administrative Agent and the Lenders in substantially the form of Exhibit D.

 

(vi)                              A Note
payable to the order of each Lender.

 

(vii)                           If the
initial Credit Extension will be the issuance of a Facility LC, a properly
completed Facility LC Application.

 

(viii)                        The Guaranty
and the Collateral Documents to be delivered on the Closing Date pursuant to Article IX.

 

(ix)                                The
insurance certificate described in Section 5.19.

 

(x)                                   Initial
Engineering Report.

 

(xi)                                A copy of
each Closing Document requested by the Administrative Agent, duly executed and
delivered by each party thereto, together with a certificate from an Authorized
Officer of Borrower certifying that such copies are accurate and complete and
represent the complete understanding and agreement of the parties with respect
to the subject matter thereof.

 

(xii)                             Such other
documents as any Lender or its counsel may have reasonably requested.

 

40

 

4.1.2.                     The
following additional conditions shall have been satisfied:

 

(i)                                     The Closing
Transactions, including, without limitation, the completion and consummation of
the Mergers, shall have been consummated on the terms set forth in the Closing
Documents.

 

(ii)                                  All fees and
expenses owing by Borrower or its Subsidiaries to Administrative Agent shall
have been paid, including attorneys fees.

 

All documents executed or submitted pursuant to this Section 4.1
by and on behalf of Borrower or any of its Subsidiaries shall be in form and
substance satisfactory to Administrative Agent and its counsel.  The obligations of the Lenders to make Loans
and of the LC Issuer to issue a Facility LC hereunder shall not become
effective unless each of the foregoing conditions is satisfied at or prior to
2:00 p.m., Chicago, Illinois time, on June 13, 2005.  Upon satisfaction of each of the conditions
set forth in this Section 4.1, including, without limitation, the completion
and consummation of the Mergers, Borrower and Administrative Agent shall
execute and deliver the Certificate of Effectiveness.  Upon the execution and delivery of the
Certificate of Effectiveness, the Existing Cimarex Credit Agreement shall
automatically and completely be amended and restated on the terms set forth
herein without necessity of any other action on the part of any Lender,
Administrative Agent or Borrower.  Until
the execution and delivery of the Certificate of Effectiveness, the Existing Cimarex
Credit Agreement shall remain in full force and effect in accordance with its
terms.  Each Lender hereby authorizes
Administrative Agent to execute the Certificate of Effectiveness on its behalf
and acknowledges and agrees that the execution of the Certificate of
Effectiveness by Administrative Agent shall be binding on each such Lender.

 

Section 4.2.                                Each
Credit Extension.  The Lenders
shall not be required to make any Credit Extension unless on the applicable
Credit Extension Date:

 

(i)                                     There exists
no Default or Unmatured Default.

 

(ii)                                  The
representations and warranties contained in Article V are true and correct
as of such Credit Extension Date except to the extent any such representation
or warranty is stated to relate solely to an earlier date, in which case such
representation or warranty shall have been true and correct on and as of such
earlier date.

 

(iii)                               All legal
matters incident to the making of such Credit Extension shall be satisfactory
to the Lenders and their counsel.

 

Each Borrowing Notice or request for issuance of a Facility LC with
respect to each such Credit Extension shall constitute a representation and
warranty by the Borrower that the conditions contained in Section 4.2(i) and
Section 4.2(ii) have been satisfied. 
Any Lender may require a duly completed compliance certificate in
substantially the form of Exhibit B as a condition to making a
Credit Extension.

 

41

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants (which representations and
warranties are true and correct on the date hereof (and after giving effect to
the Closing Transactions), and will be true and correct on the occasion of each
Credit Extension, except to the extent that such representations and warranties
are expressly limited to an earlier date) to the Lenders that:

 

Section 5.1.                                Existence
and Standing.  Each of the
Borrower and its Subsidiaries is a corporation, partnership (in the case of
Subsidiaries only) or limited liability company duly and properly incorporated
or organized, as the case may be, validly existing and (to the extent such
concept applies to such entity) in good standing under the laws of its
jurisdiction of incorporation or organization and has all requisite authority
to conduct its business in each jurisdiction in which its business is
conducted.

 

Section 5.2.                                Authorization
and Validity.  Each of the
Borrower and its Subsidiaries has the power and authority and legal right to
execute and deliver the Loan Documents to which it is a party and to perform
its obligations thereunder.  The
execution and delivery by the Borrower and its Subsidiaries of the Loan
Documents to which it is a party and the performance of its obligations thereunder
have been duly authorized by proper corporate (or other organizational)
proceedings, and the Loan Documents to which the Borrower and its Subsidiaries
are a party constitute legal, valid and binding obligations of the Borrower and
such Subsidiaries enforceable against the Borrower and its Subsidiaries in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors’
rights generally.

 

Section 5.3.                                No
Conflict; Government Consent. 
Neither the execution and delivery by the Borrower or its Subsidiaries
of the Loan Documents to which it is a party, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof,
nor the consummation of the Closing Transactions, will violate (i) any
law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on the Borrower or any of its Subsidiaries or (ii) the Borrower’s
or any Subsidiary’s articles or certificate of incorporation, partnership
agreement, certificate of partnership, articles or certificate of organization,
by-laws, or operating or other management agreement, as the case may be, or (iii) the
provisions of any indenture (including, without limitation, the Indentures),
instrument or agreement (including, without limitation, any Permitted Bond
Document or 9.60% Senior Notes Refinancing Document) to which the Borrower
or any of its Subsidiaries is a party or is subject, or by which it, or its
Property, is bound, or conflict with or constitute a default thereunder, or
result in, or require, the creation or imposition of any Lien in, of or on the
Property of the Borrower or a Subsidiary pursuant to the terms of any such
indenture, instrument or agreement (including, without limitation, any
Permitted Bond Document or 9.60% Senior Notes Refinancing Document).  No order, consent, adjudication, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, or other action in respect of any governmental or public
body or authority, or any subdivision thereof, which has not been obtained by
the Borrower or any of its Subsidiaries, is required to be obtained by the
Borrower or any of its Subsidiaries in connection with the execution and
delivery of the Loan Documents, the

 

42

 

borrowings under this Agreement, the payment and performance by the
Borrower of the Obligations, the legality, validity, binding effect or
enforceability of any of the Loan Documents, or the consummation of the Closing
Transactions.

 

Section 5.4.                                Financial
Statements.  The audited annual
and unaudited quarterly, consolidated financial statements of Borrower
heretofore delivered to the Lenders were prepared in accordance with generally
accepted accounting principles in effect on the date such statements were
prepared and fairly present the consolidated financial condition and operations
of the Borrower and its Subsidiaries at such date and the consolidated results
of their operations for the period then ended.

 

Section 5.5.                                Material
Adverse Change.  Since December 31,
2004 there has been no change in the business, Property, prospects, condition
(financial or otherwise) or results of operations of the Borrower and its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect.

 

Section 5.6.                                Taxes.  The Borrower and its Subsidiaries have filed
all United States federal tax returns and all other tax returns which are
required to be filed and have paid all taxes due pursuant to said returns or
pursuant to any assessment received by the Borrower or any of its Subsidiaries,
except such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided in accordance with Agreement Accounting Principles
and as to which no Lien exists.  No tax
liens have been filed and no claims are being asserted with respect to any such
taxes.  The charges, accruals and
reserves on the books of the Borrower and its Subsidiaries in respect of any
taxes or other governmental charges are adequate.

 

Section 5.7.                                Litigation
and Contingent Obligations. 
There is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting the Borrower or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect or which seeks
to prevent, enjoin or delay the making of any Credit Extensions.  Other than any liability incident to any
litigation, arbitration or proceeding which could not reasonably be expected to
have a Material Adverse Effect, neither the Borrower nor any of its
Subsidiaries has any material Contingent Obligations not provided for or
disclosed in the financial statements referred to in Section 5.4 or in the
Disclosure Schedule.

 

Section 5.8.                                Subsidiaries.  The Disclosure Schedule contains an
accurate list of all Subsidiaries of the Borrower as of the date of this
Agreement (and after giving effect to the Closing Transactions), setting forth (i) their
respective jurisdictions of organization, (ii) the percentage of their
respective capital stock or other ownership interests owned by the Borrower or
other Subsidiaries, and (iii) which of such Subsidiaries are Material
Subsidiaries as of the date hereof.  All
of the issued and outstanding shares of capital stock or other ownership
interests of such Subsidiaries have been (to the extent such concepts are
relevant with respect to such ownership interests) duly authorized and issued
and are fully paid and non-assessable.

 

Section 5.9.                                ERISA.  The Unfunded Liabilities of all Single
Employer Plans do not in the aggregate exceed $500,000.  Neither the Borrower nor any other member of
the Controlled Group has incurred, or is reasonably expected to incur, any
withdrawal liability to

 

43

 

Multiemployer Plans.  Each Plan
complies in all material respects with all applicable requirements of law and
regulations, no Reportable Event has occurred with respect to any Plan, neither
the Borrower nor any other member of the Controlled Group has withdrawn from
any Plan or initiated steps to do so, and no steps have been taken to
reorganize or terminate any Plan except as disclosed in the Disclosure
Schedule.

 

Section 5.10.                         Accuracy
of Information.  No information,
exhibit or report furnished by the Borrower or any of its Subsidiaries to the
Administrative Agent or to any Lender in connection with the Closing
Transactions or in connection with the negotiation of, or compliance with, the
Loan Documents contained any material misstatement of fact or omitted to state
a material fact or any fact necessary to make the statements contained therein
not misleading.

 

Section 5.11.                         Regulation U.  Margin stock (as defined in Regulation U)
constitutes less than 25% of the value of those assets of the Borrower and its
Subsidiaries which are subject to any limitation on sale, pledge, or other
restriction hereunder.

 

Section 5.12.                         Material
Agreements.  Neither the Borrower
nor any Subsidiary is a party to any agreement or instrument or subject to any
charter or other corporate restriction that could reasonably be expected to
have a Material Adverse Effect.  Neither
the Borrower nor any Subsidiary is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in (i) any
agreement to which it is a party, which default could reasonably be expected to
have a Material Adverse Effect or (ii) any agreement or instrument
evidencing or governing Indebtedness, which default could reasonably be
expected to have a Material Adverse Effect.

 

Section 5.13.                         Compliance
With Laws.  The Borrower and its
Subsidiaries have complied with all applicable statutes, rules, regulations,
orders and restrictions of any domestic or foreign government or any
instrumentality or agency thereof having jurisdiction over the conduct of their
respective businesses or the ownership of their respective Property except for
any failure to comply with any of the foregoing which could not reasonably be
expected to have a Material Adverse Effect.

 

Section 5.14.                         Ownership
of Properties.  Except for
matters that would not have a Material Adverse Effect, each of Borrower and its
Subsidiaries has (after giving effect to the Closing Transactions) good and
defensible title to all of its material properties and assets purported to be
owned by it, including, without limitation, all properties and assets reflected
on the financial statements referred to in Section 5.4, free and clear of
all Liens, encumbrances, or adverse claims other than Permitted Encumbrances
and of all impediments to the use of such properties and assets in such of
Borrower and its Subsidiaries’ business, except that no representation or
warranty is made with respect to any oil, gas or mineral property or interest
to which no proved oil or gas reserves are properly attributed.  Each of Borrower and its Subsidiaries owns
the net interests in production attributable to the wells and units evaluated
in the Initial Engineering Report and which are included in Engineered Value
subject to Permitted Encumbrances.  The
ownership of such properties does not in the aggregate in any material respect
obligate Borrower or any of its Subsidiaries consolidated financial statements
provided to Administrative Agent as owned by Borrower and its Subsidiaries to
bear the costs and expenses

 

44

 

relating to the maintenance, development and operations of such
properties in an amount materially in excess of the working interest of such
properties set forth in the Initial Engineering Reports.  Upon delivery of each Engineering Report
furnished to the Lenders pursuant to Section 6.1(ix) and Section 6.1(x),
the statements made in the preceding sentences of this Section shall be
true with respect to such Engineering Report. 
Each of Borrower and its Subsidiaries possesses all licenses, permits,
franchises, patents, copyrights, trademarks and trade names, and other
intellectual property (or otherwise possesses the right to use such
intellectual property without violation of the rights of any other Person)
which are necessary to carry out its business as presently conducted and as
presently proposed to be conducted hereafter, and none of Borrower or its Subsidiaries
is in violation in any material respect of the terms under which it possesses
such intellectual property or the right to use such intellectual property,
except with respect to such types of property having an aggregate value of less
than $6,000,000.

 

Section 5.15.                         Plan
Assets; Prohibited Transactions. 
The Borrower is not an entity deemed to hold “plan assets” within the
meaning of 29 C.F.R. § 2510.3-101 of an employee benefit plan (as defined
in Section 3(3) of ERISA) which is subject to Title I of ERISA
or any plan (within the meaning of Section 4975 of the Code), and neither
the execution of this Agreement nor the making of Loans hereunder gives rise to
a prohibited transaction within the meaning of Section 406 of ERISA or Section 4975
of the Code.

 

Section 5.16.                         Environmental
Matters.  In the ordinary course
of its business, the officers of the Borrower consider the effect of
Environmental Laws on the business of the Borrower and its Subsidiaries, in the
course of which they identify and evaluate potential risks and liabilities
accruing to the Borrower due to Environmental Laws.  On the basis of this consideration, and after
giving effect to the Closing Transactions, the Borrower has concluded that
Environmental Laws cannot reasonably be expected to have a Material Adverse
Effect.  Neither the Borrower nor any
Subsidiary has received any notice to the effect that its operations are not in
material compliance with any of the requirements of applicable Environmental
Laws or are the subject of any federal or state investigation evaluating
whether any remedial action is needed to respond to a release of any toxic or
hazardous waste or substance into the environment, which non-compliance or
remedial action could reasonably be expected to have a Material Adverse Effect.

 

Section 5.17.                         Investment
Company Act.  Neither the
Borrower nor any Subsidiary is an “investment company” or a company “controlled”
by an “investment company”, within the meaning of the Investment Company Act of
1940, as amended.

 

Section 5.18.                         Public
Utility Holding Company Act. 
Neither the Borrower nor any Subsidiary is a “holding company” or a “subsidiary
company” of a “holding company”, or an “affiliate” of a “holding company” or of
a “subsidiary company” of a “holding company”, within the meaning of the Public
Utility Holding Company Act of 1935, as amended.

 

Section 5.19.                         Insurance.  The certificate signed by the President or
Chief Financial Officer of the Borrower, that attests to the existence and
adequacy of, and summarizes, the property and casualty insurance program
carried by the Borrower with respect to itself and its Subsidiaries and that
has been furnished by the Borrower to the Administrative Agent and the Lenders,
is complete and accurate.  This summary
includes the insurer’s or insurers’ name(s),

 

45

 

policy number(s), expiration date(s), amount(s) of coverage, type(s) of
coverage, exclusion(s), and deductibles. 
This summary also includes similar information, and describes any
reserves, relating to any self-insurance program that is in effect.

 

Section 5.20.                         Solvency.

 

(i)                                     Immediately
after the consummation of the Closing Transactions and immediately following
the making of each Loan, if any, made on the date hereof and after giving
effect to the application of the proceeds of such Loans, (a) the fair
value of the assets of the Borrower and its Subsidiaries on a consolidated
basis, at a fair valuation, will exceed the debts and liabilities,
subordinated, contingent or otherwise, of the Borrower and its Subsidiaries on
a consolidated basis; (b) the present fair saleable value of the Property
of the Borrower and its Subsidiaries on a consolidated basis will be greater
than the amount that will be required to pay the probable liability of the
Borrower and its Subsidiaries on a consolidated basis on their debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) the Borrower and its
Subsidiaries on a consolidated basis will be able to pay their debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) the Borrower and its
Subsidiaries on a consolidated basis will not have unreasonably small capital
with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after the date
hereof.

 

(ii)                                  The Borrower
does not intend to, or to permit any of its Subsidiaries to, and does not
believe that it or any of its Subsidiaries will, incur debts beyond its ability
to pay such debts as they mature, taking into account the timing of and amounts
of cash to be received by it or any such Subsidiary and the timing of the
amounts of cash to be payable on or in respect of its Indebtedness or the
Indebtedness of any such Subsidiary.

 

Section 5.21.                         Closing
Documents.  Borrower has provided
to Administrative Agent a true, correct and complete copy of each Closing
Document requested by the Administrative Agent, including all amendments and
modifications thereto (whether characterized as an amendment, modification,
waiver, consent or similar document).  No
material rights or obligations of any party to any of the Closing Documents
have been waived and no party to any of the Closing Documents is in default of
its obligations or in breach of any representations or warranties made
thereunder.  Each of the Closing
Documents is a valid, binding and enforceable obligation of each party thereto
in accordance with its terms, and is in full force and effect.

 

ARTICLE VI

 

AFFIRMATIVE COVENANTS

 

During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:

 

Section 6.1.                                Financial
Report.  The Borrower will
maintain, for itself and each Subsidiary, a system of accounting established
and administered in accordance with generally accepted accounting principles,
and furnish to the Lenders:

 

46

 

(i)                                     Within 95
days after the close of each of its Fiscal Years or within 5 days after
such earlier day as such financial statements are required to be filed with the
SEC as part of an annual report on Form 10-K or any successor form, an
unqualified audit report certified by KPMG LLP or other independent certified
public accountants acceptable to the Lenders, prepared in accordance with
Agreement Accounting Principles on a consolidated basis for itself and its
Subsidiaries, including balance sheets as of the end of such period and
statements of operations, stockholders equity and cash flows, accompanied by
any management letter prepared by said accountants.

 

(ii)                                  Within 50
days after the close of the first three quarterly periods of each of its Fiscal
Years, or within 5 days after such earlier day as such financial statements are
required to be filed with the SEC as part of a quarterly report on Form 10Q
or any successor form, for itself and its Subsidiaries, consolidated unaudited
balance sheets as at the close of each such period and statements of
operations, stockholders equity and cash flows for the period from the
beginning of such Fiscal Year to the end of such quarter, all certified by its
chief financial officer.

 

(iii)                               Together
with the financial statements required under Section 6.1(i) and Section 6.1(ii),
copies of all certifications made by officers of Borrower to the SEC in
connection with such financial statements and a compliance certificate in
substantially the form of Exhibit B signed by its chief financial
officer showing the calculations necessary to determine compliance with this
Agreement and stating that no Default or Unmatured Default exists, or if any
Default or Unmatured Default exists, stating the nature and status thereof.

 

(iv)                              Within 270
days after the close of each Fiscal Year, a statement of the Unfunded
Liabilities of each Single Employer Plan, if any, certified as correct by an
actuary enrolled under ERISA.

 

(v)                                 As soon as
possible and in any event within 10 days after the Borrower knows that any
Reportable Event has occurred with respect to any Plan, a statement, signed by
the chief financial officer of the Borrower, describing said Reportable Event
and the action which the Borrower proposes to take with respect thereto.

 

(vi)                              As soon as
possible and in any event within 10 days after receipt by the Borrower, a copy
of (a) any notice or claim to the effect that the Borrower or any of its
Subsidiaries is or may be liable to any Person as a result of the release by
the Borrower, any of its Subsidiaries, or any other Person of any toxic or
hazardous waste or substance into the environment, and (b) any notice
alleging any violation of any federal, state or local environmental, health or
safety law or regulation by the Borrower or any of its Subsidiaries, which, in
either case, could reasonably be expected to have a Material Adverse Effect.

 

(vii)                           Promptly
upon the furnishing thereof to the stockholders of the Borrower, copies of all
financial statements, reports and proxy statements so furnished.

 

(viii)                        Promptly
upon the filing thereof, copies of all registration statements and annual,
quarterly, monthly or other regular reports which the Borrower or any of its
Subsidiaries files with the Securities and Exchange Commission.

 

47

 

(ix)                                By March 31
of each year, an Engineering Report prepared as of the preceding January 1,
by petroleum engineers who are employees of Borrower and audited by Ryder Scott
Company, or other independent petroleum engineers chosen by Borrower and
acceptable to Required Lenders, concerning all oil and gas properties and
interests owned by any Borrower and its Subsidiaries which are located in or
offshore of the United States and which have attributable to them proved oil or
gas reserves.  This reserve audit described
above shall encompass a review of the reserves associated with oil and gas
properties comprising at least 80% of the value stated in the report.  The Engineering Report shall be satisfactory
to Administrative Agent, shall contain sufficient information to enable
Borrower to meet the reporting requirements concerning oil and gas reserves
contained in Regulations S-K and S-X promulgated by the SEC, shall take into
account any “over/under produced” status under gas balancing arrangements, and
shall contain information and analysis comparable in scope to that contained in
the Initial Engineering Report.  This
report shall distinguish (or shall be delivered together with a certificate
from an appropriate officer of Borrower which distinguishes) those properties
treated in the report which are Collateral from those properties treated in the
report which are not Collateral.

 

(x)                                   By September 30
of each year, and promptly following notice of an additional Borrowing Base
redetermination under Section 2.6.3, an Engineering Report prepared as of
the preceding June 30 (or the first day of the preceding calendar month in
the case of an additional redetermination) by petroleum engineers who are
employees of Borrower (or by the independent engineers named above), together
with an accompanying report on property sales, property purchases and changes
in categories, both in the same form and scope as the reports in (x) above.

 

(xi)                                By March 31
and September 30 of each year, beginning September 30, 2005, a report
describing the gross volume of production and sales attributable to production
during the preceding six-month period from the properties described in the
Engineering Report in Section 6.1(ix) or Section 6.1(x) and
describing the related severance taxes, other taxes, and leasehold operating
expenses attributable thereto and incurred during such month.

 

(xii)                             Promptly
after such delivery or receipt, copies of any financial or other report or
notice delivered to, or received from, any holder of Senior Notes, Permitted
Bond Indebtedness (or the notes evidencing same) or Indebtedness in respect of
any 9.60% Senior Notes Refinancing (or the notes evidencing same), which
report or notice has not been delivered to the Lenders hereunder.

 

(xiii)                          Such other
information (including non-financial information) as the Administrative Agent
or any Lender may from time to time reasonably request.

 

Section 6.2.                                Use
of Proceeds.  The Borrower will,
and will cause each Subsidiary to, use the proceeds of the Credit Extensions
solely (a) to partially finance the Mergers, (b) to refinance and
replace Existing MHR Indebtedness, (c) to refinance Existing Cimarex
Indebtedness, (d) to refinance other Indebtedness to the extent permitted
hereunder, (e) to fund amounts requested to be paid in connection with any
change in control offer under the Indentures

 

48

 

or in connection with any conversion of the Convertible Senior Notes
under the Convertible Senior Notes Indenture, to the extent permitted hereunder,
(f) for the exploration, development and/or acquisition of oil and gas
properties, and (g) for working capital and other general corporate
purposes.  The Borrower will not, nor
will it permit any Subsidiary to, use any of the proceeds of the Advances to
purchase or carry any “margin stock” (as defined in Regulation U).

 

Section 6.3.                                Notice
of Default.  The Borrower will,
and will cause each Subsidiary to, give prompt notice in writing to the Lenders
of the occurrence of any Default or Unmatured Default and of any other
development, financial or otherwise, which could reasonably be expected to have
a Material Adverse Effect.

 

Section 6.4.                                Conduct
of Business.  The Borrower will,
and will cause each Subsidiary to, carry on and conduct its business in
substantially the same manner and in substantially the same fields of
enterprise as it is presently conducted and do all things necessary to remain
duly incorporated or organized, validly existing and (to the extent such
concept applies to such entity) in good standing as a domestic corporation,
partnership or limited liability company in its jurisdiction of incorporation
or organization, as the case may be, and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted,
except where the failure to do so would not have a material adverse effect on
the Borrower’s or any Subsidiary’s ability to conduct its business.

 

Section 6.5.                                Taxes.  The Borrower will, and will cause each
Subsidiary to, timely file complete and correct United States federal and
applicable foreign, state and local tax returns required by law and pay when
due all taxes, assessments and governmental charges and levies upon it or its
income, profits or Property, except those which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves
have been set aside in accordance with Agreement Accounting Principles.

 

Section 6.6.                                Insurance.  The Borrower will furnish to any Lender upon
request full information as to the insurance carried by the Borrower and its
Subsidiaries.  Upon demand by
Administrative Agent, any insurance policies covering Collateral shall be
endorsed (a) to provide for payment of losses to Administrative Agent as
its interests may appear, (b) during any Fifty Percent Utilization Period,
to provide that such policies may not be canceled or reduced or affected in any
material manner for any reason without fifteen days prior notice to
Administrative Agent, and (c) to provide for any other matters specified
in any applicable Collateral Document or which Administrative Agent may
reasonably require; provided that the Borrower shall self insure against fire,
casualty, and other hazards normally insured against.  Notwithstanding anything contained in this Section 6.6
or any Collateral Document to the contrary, Borrower may self insure against
all liabilities, risks and hazards to the extent Borrower deems same to be
sound business practice.

 

Section 6.7.                                Compliance
With Laws.  The Borrower will,
and will cause each Subsidiary to, comply with all laws, rules, regulations,
orders, writs, judgments, injunctions, decrees or awards to which it may be
subject including, without limitation, all Environmental Laws in all material
respects.

 

49

 

Section 6.8.                                Maintenance
of Properties.  The Borrower
will, and will cause each Subsidiary to, do all things necessary to maintain,
preserve, protect and keep its Property in good repair, working order and
condition, and make all necessary and proper repairs, renewals and replacements
so that its business carried on in connection therewith may be properly
conducted at all times.

 

Section 6.9.                                Inspection.  The Borrower will, and will cause each
Subsidiary to, permit the Administrative Agent and the Lenders, by their
respective representatives and agents, to inspect any of the Property, books
and financial records of the Borrower and each Subsidiary, to examine and make
copies of the books of accounts and other financial records of the Borrower and
each Subsidiary, and to discuss the affairs, finances and accounts of the
Borrower and each Subsidiary with, and to be advised as to the same by, their
respective officers at such reasonable times and intervals as the Administrative
Agent or any Lender may designate.

 

Section 6.10.                         Permitted
Bond Documents; 9.60% Senior Notes Refinancing Documents.  The Borrower will, and will cause each
Subsidiary to, (a) no later than five (5) Business Days prior to
the consummation or effectiveness of the issuance of any Permitted Bond
Indebtedness or 9.60% Senior Notes Refinancing, provide to the
Administrative Agent copies of substantially final drafts of each Permitted
Bond Document and 9.60% Senior Notes Refinancing Document, as applicable,
and (b) promptly upon the effectiveness or issuance of any Permitted Bond
Indebtedness or 9.60% Senior Notes Refinancing, provide to the
Administrative Agent a true, correct and complete copy of each Permitted Bond
Document and 9.60% Senior Notes Refinancing Document, as applicable.

 

ARTICLE VII

 

NEGATIVE COVENANTS

 

Section 7.1.                                Restricted
Payments.  The Borrower will not,
nor will it permit any Subsidiary to, directly or indirectly, declare or make
any Restricted Payment during any Fifty Percent Utilization Period; provided,
that (a) during any Fifty Percent Utilization Period any Subsidiary may
declare and pay Dividends or make other Restricted Payments to the Borrower or
to a Wholly-Owned Subsidiary, and any Subsidiary may declare and make
distributions to the owners of its Equity on a pro rata basis, and (b) during
any Fifty Percent Utilization Period, the Borrower and its Subsidiaries may
declare or make Restricted Payments so long as (i) no Default, Unmatured
Default or Deficiency (as defined in Section 2.8(b)) exists or would exist
after giving effect thereto, and (ii) all Restricted Payments (other than
Restricted Payments made in accordance with clause (a) above) made by
Borrower and its Subsidiaries at any time during the period from the beginning
of the first Fifty Percent Utilization Period to occur after the Closing Date
until the Facility Termination Date (in this Section called the “Calculation
Period”) do not exceed $150,000,000 during the Calculation
Period and do not exceed $35,000,000 during any Fiscal Year which occurs during
the Calculation Period.

 

Section 7.2.                                Indebtedness.  The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:

 

(i)                                     The Loans
and the Reimbursement Obligations.

 

50

 

(ii)                                  Indebtedness
existing on the date hereof and described in the Disclosure Schedule.

 

(iii)                               Indebtedness
arising under Rate Management Transactions permitted by Section 7.11.

 

(iv)                              Contingent
Obligations permitted by Section 7.10.

 

(v)                                 Non-recourse
Indebtedness as to which none of Borrower or its Subsidiaries (i) provides
any guaranty or credit support of any kind (including any undertaking,
guarantee, indemnity, agreement or instrument that would constitute
Indebtedness) or (ii) is directly or indirectly liable (as a guarantor or
otherwise); provided, that after giving effect to such Indebtedness outstanding
from time to time, Borrower is not in violation of Article VIII.

 

(vi)                              Indebtedness
of Borrower in respect of guarantee obligations of Cimarex Energy Services, Inc.,
an Oklahoma corporation, which do not in the aggregate exceed $75,000,000 at
any one time outstanding.

 

(vii)                           Indebtedness
evidenced by the Senior Notes, and guarantee obligations of Subsidiaries in
respect thereof; provided, that, such guarantee obligations exist as of the
date hereof, are required by the terms of the Indentures, or are otherwise on
terms and conditions satisfactory to the Administrative Agent in its sole
reasonable discretion.

 

(viii)                        Permitted
Bond Indebtedness, and guarantee obligations of Subsidiaries of the Borrower in
respect thereof, provided, that, such guarantee obligations are on terms and
conditions satisfactory to the Administrative Agent, in its sole reasonable
discretion.

 

(ix)                                Indebtedness
in respect of any 9.60% Senior Notes Refinancing, and guarantee
obligations of Subsidiaries of the Borrower in respect thereof, provided, that,
such guarantee obligations are on terms and conditions satisfactory to the
Administrative Agent, in its sole reasonable discretion.

 

(x)                                   Financial
Contracts permitted under Section 7.11.

 

(xi)                                Miscellaneous
items of Indebtedness not described in subsections (i) through (x) above
which do not in the aggregate (taking into account all such Indebtedness of
Borrower and its Subsidiaries) exceed $25,000,000 at any one time outstanding.

 

Section 7.3.                                Merger.  The Borrower will not, nor will it permit any
Subsidiary to, merge or consolidate with or into any other Person, except that a
Subsidiary may merge into the Borrower or a Wholly-Owned Subsidiary.

 

Section 7.4.                                Sale
of Assets.  The Borrower will
not, nor will it permit any Subsidiary to, lease, sell or otherwise dispose of
its Property to any other Person (other than to Borrower or any Guarantor),
except:

 

(i)                                     Sales of
inventory in the ordinary course of business.

 

51

 

(ii)                                  Disposition
of equipment and other personal property that is replaced by equivalent
property or consumed in the normal operation of its Property.

 

(iii)                               Dispositions
of a portion of its Property in connection with operating agreements, farmouts,
farmins, joint exploration and development agreements and other agreements
customary in the oil and gas industry that are entered into for the purposes of
developing its Property and under which it receives relatively equivalent
consideration; provided that such portion of such property is not included in a
drilling or spacing unit for an oil and/or gas well included in Engineered
Value that is subject to a Lien in favor of Administrative Agent.

 

(iv)                              Leases,
sales or other dispositions of its Property that, together with all other
Property of the Borrower and its Subsidiaries previously leased, sold or
disposed of (other than (i), (ii) and (iii) above) as permitted by
this Section during (A) the period commencing on the Closing Date and
ending on December 31, 2006, do not constitute more than $150,000,000 in
the aggregate; and (B) any Fiscal Year thereafter, commencing with the
Fiscal Year ending December 31, 2007, do not constitute more than 10% of
the Engineered Value of the Borrowing Base Properties as determined by
Administrative Agent in its sole discretion.

 

(v)                                 interests in
oil and gas properties, portions thereof, to which no proved reserves of oil,
gas or other liquid or gaseous hydrocarbons are properly attributed.

 

Upon any lease, sale or other disposition of Property permitted
pursuant to this Section 7.4, Administrative Agent will, upon the Borrower’s
written request and at the Borrower’s sole expense, promptly (A) release
its Lien in such Property, and (B) execute and deliver to the Borrower or
the applicable Subsidiary of the Borrower, as applicable, such documents as
shall be necessary or appropriate to effect the release of such Lien.

 

Section 7.5.                                Investments.  The Borrower will not, nor will it permit any
Subsidiary to, make or suffer to exist any Investments (including without
limitation, loans and advances to, and other Investments in, Subsidiaries), or
commitments therefor, or to create any Subsidiary or to become or remain a
partner in any partnership or joint venture, or to make any Acquisition of any
Person, except:

 

(i)                                     Cash
Equivalent Investments.

 

(ii)                                  Investments
in Borrower’s Subsidiaries which are Guarantors and with respect to which 100%
of its Equity has been pledged to Administrative Agent.

 

(iii)                               Investments
in existence on the date hereof and described on the Disclosure Schedule.

 

(iv)                              Investments
in associations, joint ventures, and other relationships (a) that are
established pursuant to standard form operating agreements or similar
agreements or which are partnerships for purposes of federal income taxation
only, (b) that are not corporations or partnerships (or subject to the
Uniform Partnership Act or other applicable state partnership act) under
applicable state law, or (c) whose businesses are limited to the

 

52

 

exploration,
development and operation of oil, gas or mineral properties and interests owned
directly by the parties in such associations, joint ventures or relationships
in which the ownership interest of Borrower or its Subsidiary is in direct
proportion to the amount of such Investment.

 

(v)                                 Investments
in Subsidiaries of Borrower that are not Material Subsidiaries which do not
exceed $10,000,000 in the aggregate during any Fiscal Year.

 

(vi)                              Miscellaneous
items of Investments not described in clauses (i) through (v) above
which do not (taking into account all such Investments of Borrower and its
Subsidiaries) exceed an aggregate amount of $10,000,000 during any Fiscal Year.

 

Section 7.6.                                Liens.  The Borrower will not, nor will it permit any
Subsidiary to, create, incur, or suffer to exist any Lien in, of, or on the
Property of the Borrower or any of its Subsidiaries, except:

 

(i)                                     Liens for
taxes, assessments or governmental charges or levies on its Property if the
same shall not at the time be delinquent or thereafter can be paid without
penalty, or are being contested in good faith and by appropriate proceedings
and for which adequate reserves in accordance with Agreement Accounting
Principles shall have been set aside on its books.

 

(ii)                                  Liens
imposed by law, such as carriers’, warehousemen’s and mechanics’ liens and
other similar liens arising in the ordinary course of business which secure
payment of obligations not more than 60 days past due or which are being
contested in good faith by appropriate proceedings and for which adequate
reserves shall have been set aside on its books.

 

(iii)                               Liens
arising out of pledges or deposits under worker’s compensation laws,
unemployment insurance, old age pensions, or other social security or
retirement benefits, or similar legislation.

 

(iv)                              Utility
easements, building restrictions and such other encumbrances or charges against
real property as are of a nature generally existing with respect to properties
of a similar character and which do not in any material way affect the
marketability of the same or interfere with the use thereof in the business of
the Borrower or its Subsidiaries.

 

(v)                                 Liens
existing on the date hereof and described on the Disclosure Schedule.

 

(vi)                              Liens in
favor of the Administrative Agent, for the benefit of the Lenders, granted
pursuant to any Collateral Document.

 

(vii)                           Liens on
Property other than Collateral to secure Indebtedness permitted by Section 7.2(v).

 

(viii)                        With respect
to Property subject to any Collateral Document, Liens burdening such Property
that are expressly allowed by such Collateral Document.

 

53

 

(ix)                                Liens
arising under operating agreements, unitization, pooling agreements and other
agreements customary in the oil and gas industry securing amounts owed to
operators and joint owners of oil and gas properties that shall not at the time
be delinquent, or thereafter can be paid without penalty, or are being
contested in good faith and by appropriate proceedings and for which adequate
reserves in accordance with Agreement Accounting Principles shall have been set
aside on its books.

 

(x)                                   Liens on
cash or Cash Equivalent Investments securing Financial Contracts to the extent
permitted under Section 7.11(a)(iii).

 

(xi)                                Contracts,
agreements, instruments, obligations, defects and irregularities affecting the
Property that individually or in the aggregate are not such as to interfere
materially with the use, operation or value of the Property.

 

Section 7.7.                                Affiliates.  The Borrower will not, and will not permit
any Subsidiary to, enter into any transaction (including, without limitation,
the purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower’s or such Subsidiary’s
business and upon fair and reasonable terms no less favorable to the Borrower
or such Subsidiary than the Borrower or such Subsidiary would obtain in a
comparable arms-length transaction. 
Notwithstanding the foregoing, no transaction, payment or transfer between,
among or to any of the Borrower and any one or more of the Guarantors, or
between, among or to any of the Guarantors, shall be subject to the
restrictions of this Section 7.7.

 

Section 7.8.                                Sale
of Accounts.  The Borrower will
not, nor will it permit any Subsidiary to, sell or otherwise dispose of any
notes receivable or accounts receivable, with or without recourse in excess of
$500,000 in the aggregate during any Fiscal Year.

 

Section 7.9.                                Sale
and Leaseback Transactions and other Off-Balance Sheet Liabilities.  The Borrower will not, nor will it permit any
Subsidiary to, enter into or suffer to exist any (a) Sale and Leaseback
Transaction or (b) other transaction pursuant to which it incurs or has
incurred Off-Balance Sheet Liabilities, except for (i) the transaction
described in the Disclosure Schedule, and (ii) Rate Management Obligations
permitted to be incurred under the terms of Section 7.11.

 

Section 7.10.                         Contingent
Obligations.  The Borrower will
not, nor will it permit any Subsidiary to, make or suffer to exist any
Contingent Obligation (including, without limitation, any Contingent Obligation
with respect to the obligations of a Subsidiary), except (i) by
endorsement of instruments for deposit or collection in the ordinary course of
business, (ii) the Reimbursement Obligations, (iii) the Guaranty, (iv) guarantees
to the extent permitted under clauses (vii), (viii) and (ix) of Section 7.2,
and (v) other Contingent Obligations not to exceed an outstanding
aggregate amount of $25,000,000 at any time.

 

Section 7.11.                         Financial
Contracts.  None of Borrower or
its Subsidiaries will be a party to or in any manner be liable on any Financial
Contract except:

 

(a)                                  contracts
entered into with the purpose and effect of fixing prices on oil or gas
expected to be produced by Borrower and its Subsidiaries, provided that at all

 

54

 

times:
(i) no such contract fixes a price for a term of more than 36 months, (ii) the
aggregate monthly production covered by all such contracts (determined, in the
case of contracts that are not settled on a monthly basis, by a monthly
proration acceptable to Administrative Agent) for any single month does not in
the aggregate exceed 75% of the aggregate Engineered Projected Production (as
defined below) of Borrower and its Subsidiaries anticipated to be sold in the
ordinary course of their businesses for such month, (iii) no such contract
requires Borrower or any of its Subsidiaries to put up money, assets, letters
of credit or other security against the event of its nonperformance prior to
actual default by such Borrower or any of its Subsidiaries in performing its
obligations thereunder (other than customary provisions to post cash margin,
U.S. Government securities or letters of credit), and (iv) each such
contract is with a counterparty or has a guarantor of the obligation of the
counterparty who (unless such counterparty is a Lender or one of its
Affiliates) either (A) is listed and identified on the Disclosure
Schedule, or (B) at the time the contract is made has long-term
obligations rated BBB+ or Baa1 or better, respectively, by either Moody’s or
S&P.  As used in this subsection, the
term “Engineered Projected Production”
means the Engineered Value of projected production of oil or gas (measured by
volume unit or BTU equivalent, not sales price) for the term of the contracts
or a particular month, as applicable, from properties and interests owned by
Borrower and its Subsidiaries that are located in or offshore of the United States
and are PDP Reserves, as such production is projected in the most recent report
delivered pursuant to Section 6.1(ix) or Section 6.1(x), after
deducting projected production from any properties or interests sold or under
contract for sale that had been included in such report and after adding
projected production from any properties or interests that had not been
reflected in such report but that are reflected in a separate or supplemental
reports meeting the requirements of such Section 6.1(ix) or Section 6.1(x)
above and otherwise are satisfactory to Administrative Agent;

 

(b)                                 contracts
entered into by Borrower or its Subsidiaries with the purpose and effect of
fixing or exchanging (from one floating rate to another floating rate, from one
fixed rate to another fixed rate, from a fixed rate to variable rate, from a
variable rate to fixed rate or otherwise) interest rates on a principal amount
of indebtedness of such Borrower or its Subsidiaries, provided that no such
contract shall be entered into by Borrower or any of its Subsidiaries for
speculative purposes; and

 

(c)                                  the
Financial Contracts identified on Schedule 4 attached hereto.

 

Section 7.12.                         Letters
of Credit.  The Borrower will
not, nor will it permit any Subsidiary to, apply for or become liable upon or
in respect of any Letter of Credit other than Facility LCs.

 

Section 7.13.                         Prohibited
Contracts.  Except as expressly
provided for in the Loan Documents, none of Borrower or its Subsidiaries will,
directly or indirectly, enter into, create, or otherwise allow to exist any
contract or other consensual restriction on the ability of any Subsidiary of
Borrower: (a) to pay dividends or make other distributions to Borrower, (b) to
redeem equity interests held in it by Borrower, (c) to repay loans and
other indebtedness owing by it to Borrower, or (d) to transfer any of its
assets to Borrower, except restrictions arising under farmout agreements and
similar agreements relating to the development of oil and gas properties with
respect to preferential rights to purchase oil and gas properties, required
third party consents to assignments of contracts relating to oil and gas
properties, and similar agreements of general

 

55

 

applicability contained in operating agreements, farmouts, farmins,
joint exploration and development agreements and other agreements customary in
the oil and gas industry.  None of
Borrower or its Subsidiaries will enter into any “take-or-pay” contract or
other contract or arrangement for the purchase of goods or services which
obligates it to pay for such goods or service regardless of whether they are
delivered or furnished to it.  None of
Borrower or its Subsidiaries will amend or permit any amendment to any contract
or lease which releases, qualifies, limits, makes contingent or otherwise
detrimentally affects the rights and benefits of Administrative Agent or any
Lender under or acquired pursuant to any Collateral Documents.  None of Borrower or its Subsidiaries will
incur any obligation to contribute to any “Multiemployer Plan”.

 

Section 7.14.                         Senior
Note Documents; Permitted Bond Documents; 9.60% Senior Notes Refinancing
Documents.  The Borrower will
not, nor will it permit any Subsidiary to:

 

(a)                                  amend,
modify or waive any covenant contained in any of the Senior Note Documents,
Permitted Bond Documents, or 9.60% Senior Notes Refinancing Documents if
the effect of such amendment, modification or waiver would be to make the terms
of any such Senior Note Document, Permitted Bond Document, or 9.60% Senior
Notes Refinancing Document more onerous to the Borrower or any of its
Subsidiaries;

 

(b)                                 amend,
modify or waive any provision of the Senior Note Documents, Permitted Bond
Documents, or 9.60% Senior Notes Refinancing Documents if the effect of such
amendment, modification or waiver (i) subjects the Borrower or any of its
Subsidiaries to any additional material obligation, (ii) increases the
principal of or rate of interest on any Senior Note or any note evidencing any
Permitted Bond Indebtedness, or any note evidencing Indebtedness in respect of
a 9.60% Senior Notes Refinancing, (iii) accelerates the date fixed
for any payment of principal or interest on any Senior Note or any note
evidencing any Permitted Bond Indebtedness, or any note evidencing Indebtedness
in respect of a 9.60% Senior Notes Refinancing, or (iv) would change
the percentage of holders of such Senior Notes, notes evidencing any Permitted
Bond Indebtedness, or notes evidencing Indebtedness in respect of any
9.60% Senior Notes Refinancing required for any such amendment,
modification or waiver from the percentage required on the Closing Date or,
with respect to any notes evidencing any Permitted Bond Indebtedness or
9.60% Senior Notes Refinancing, from the percentage required on the date
of issuance of any such notes or 9.60% Senior Notes Refinancing; or

 

(c)                                  make any
payment of principal of, make any voluntary prepayment of, or optionally
redeem, or make any payment in defeasance of, any part of the Senior Notes, any
Permitted Bond Indebtedness or any Indebtedness in respect of any
9.60% Senior Notes Refinancing; provided, that, so long as
no Default or Deficiency exists on the date of any such payment or redemption,
and no Default or Deficiency would result therefrom, the Borrower and/or its
Subsidiaries may prepay or redeem all or any portion of (i) the
9.60% Senior Notes pursuant to a 9.60% Senior Notes Refinancing or
otherwise, (ii) the Senior Notes pursuant to a change in control offer
under the Indentures, or (iii) the Convertible Senior Notes pursuant to,
and in accordance with, Section 3.08 or Article 10 of the Convertible
Senior Notes Indenture.

 

56

 

ARTICLE VIII

 

FINANCIAL COVENANTS

 

Section 8.1.                                Current
Ratio.  The Borrower will not
permit the ratio, determined as of the end of each of its fiscal quarters, of (i) Borrower’s
consolidated current assets plus the Available Aggregate Commitment to (ii) Borrower’s
consolidated current liabilities, to be less than 1.0 to 1.0.

 

Section 8.2.                                Leverage
Ratio.  The Borrower will not
permit the ratio, determined as of the end of each of its fiscal quarters,
commencing with its fiscal quarter ending September 30, 2005, of (i) Consolidated
Funded Indebtedness for the fiscal quarter ending on such date to (ii) Consolidated
EBITDA for each Rolling Period ending on such date, or Annualized Consolidated
EBITDA for such Rolling Period in the case of a Rolling Period ending on or
prior to March 31, 2006, to be greater than 3.0 to 1.0.

 

ARTICLE IX

 

COLLATERAL AND GUARANTEES

 

Section 9.1.                                Collateral.  Except as otherwise provided below in this
paragraph or in Section 9.1.4, at all times the Secured Obligations shall
be secured by first and prior Liens (subject only to Permitted Encumbrances)
covering and encumbering (x) the Minimum Collateral Amount, and
(y) all of the issued and outstanding Equity of each Guarantor owned by
Borrower and/or owned by each Subsidiary of Borrower.  As soon as practicable, but in any event
within sixty (60) days after the date hereof, the Borrower and its
Subsidiaries shall deliver to Administrative Agent for the ratable benefit of
each Lender, the Amendments to Existing Cimarex Mortgages and the Mortgages,
each in form and substance acceptable to Administrative Agent and duly executed
by Borrower and its Subsidiaries, as applicable, together with (a) such
other assignments, conveyances, amendments, agreements and other writings (each
duly authorized and executed) as Administrative Agent shall deem necessary or
appropriate to grant, evidence and perfect first and prior Liens (subject only
to Permitted Encumbrances) in the Minimum Collateral Amount, and (b) such
opinions of counsel as the Administrative Agent shall deem necessary or
appropriate with respect to the form, sufficiency and other matters regarding
such Amendments to Existing Cimarex Mortgages and such Mortgages as the
Administrative Agent shall reasonably request.

 

9.1.1.                     To the
extent necessary to comply with the first sentence of Section 9.1, (i) within
30 days after the beginning of each Fifty Percent Utilization Period and within
30 days after each Determination Date that occurs during (or otherwise results
in the beginning of) a Fifty Percent Utilization Period and/or (ii) prior
to each increase in the Aggregate Commitment, Borrower and its Subsidiaries
shall execute and deliver to Administrative Agent, for the ratable benefit of
each Lender, Mortgages in form and substance acceptable to Administrative Agent
and duly executed by Borrower and any such Subsidiary (as applicable) together
with (a) such other assignments, conveyances, amendments, agreements and
other writings (each duly authorized and executed) as Administrative Agent
shall deem necessary or appropriate to grant, evidence and perfect the Liens
required by this Section 9.1, and (b) such

 

57

 

opinions of counsel as the Administrative Agent shall deem necessary or
appropriate with respect to the form, sufficiency and other matters regarding
such Mortgages as the Administrative Agent shall reasonably request.

 

9.1.2.                     Within 90
days after the date hereof and at any time thereafter that Borrower or any of
its Subsidiaries is required to execute and deliver Mortgages to Administrative
Agent pursuant to Section 9.1.1, Borrower shall also deliver to
Administrative Agent, within 90 days of the date hereof or within 20 days after
delivery of such Mortgages to Administrative Agent, as applicable, evidence of
title reasonably satisfactory to Administrative Agent to verify (i) Borrower’s
or such Subsidiary’s title to 75% of the Minimum Collateral Amount subject to
such Mortgages, and (ii) the validity of the Liens created by such
Mortgages.  With respect to Borrower’s
and such Subsidiary’s title to such Property, such evidence may include check
stubs, revenue receipts or other evidence that Borrower or such Subsidiary has
been receiving proceeds of production for a reasonable length of time without
interruption or challenge, as well as joint interest billings or other evidence
of the costs and expenses of operations paid by Borrower or such
Subsidiary.  With respect to the validity
of the Liens created by such Mortgages, such evidence may include opinions from
local counsel in each state in which the Property subject to the Lien is
located, that the form of Mortgage is sufficient in such state to create a Lien
on Borrower’s or such Subsidiary’s interest therein, the validity thereof and,
that when the Mortgage is properly filed and recorded, such Liens will be
perfected on Borrower’s and such Subsidiary’s interests in such Property.

 

9.1.3.                     On the date
hereof and at the time any Subsidiary of Borrower becomes a Material Subsidiary
and prior to any Investments being permitted to be made in any Material
Subsidiary pursuant to the terms of Section 7.5(ii), Borrower and any
Subsidiaries of Borrower (as applicable) shall execute and deliver to
Administrative Agent for the ratable benefit of each Lender, a pledge agreement
substantially in the form of Exhibit G-1, Exhibit G-2
or Exhibit G-3, as applicable, from Borrower and/or its
Subsidiaries (as applicable) covering the Equity in all Material Subsidiaries,
together with all certificates (or other evidence acceptable to Administrative
Agent) evidencing the issued and outstanding Equity of each such Material
Subsidiary of every class owned by Borrower or such Subsidiary (as applicable)
which, if certificated, shall be duly endorsed or accompanied by stock powers
executed in blank (as applicable), as Administrative Agent shall deem necessary
or appropriate to grant, evidence and perfect the Liens required by Section 9.1
in the issued and outstanding Equity of each such Material Subsidiary.

 

9.1.4.                     Notwithstanding
anything contained in this Section 9.1 to the contrary, from and after the
date the Borrower complies with the provisions contained in the second sentence
of the first paragraph of this Section 9.1 (the “Post-Closing Effective Date”), Borrower
shall have no obligation to provide Mortgages in addition to those Mortgages
provided on or prior to the Post-Closing Effective Date, except as, and only to
the extent, provided in Section 9.1.1

 

Section 9.2.                                Guarantees.  On the date hereof and at any time a
Subsidiary of Borrower becomes a Material Subsidiary and prior to any
Investments being permitted to be made in any Material Subsidiary pursuant to
the terms of Section 7.5(ii), payment and performance of the Secured
Obligations shall be fully guaranteed by each Material Subsidiary

 

58

 

pursuant to a Guaranty substantially in the form of Exhibit E,
and Borrower shall cause any such applicable Material Subsidiary to execute and
deliver to Administrative Agent such Guaranty. 
Prior to any Investments being permitted to be made in any other Subsidiary
of Borrower in excess of the amount permitted by Section 7.5(v), such
Subsidiary shall also execute and deliver such a Guaranty in the form of Exhibit E
to Administrative Agent for the ratable benefit of each Lender, together with
such other documents as Administrative Agent shall deem necessary or
appropriate to confirm such Guaranty.

 

Section 9.3.                                Further
Assurances.  Borrower agrees to
deliver and to cause each of its Subsidiaries to deliver, to further secure the
Secured Obligations whenever requested by Administrative Agent in its sole and
absolute discretion, deeds of trust, mortgages, chattel mortgages, security
agreements, financing statements and other Collateral Documents in form and
substance satisfactory to Administrative Agent for the purpose of granting,
confirming, and perfecting first and prior liens or security interests in any
real or personal property which is at such time Collateral or which was
intended to be Collateral pursuant to any Collateral Document previously
executed and not then released by Administrative Agent.

 

Section 9.4.                                Production
Proceeds.  Notwithstanding that,
by the terms of the various Collateral Documents, Borrower and its Subsidiaries
are and will be assigning to Administrative Agent and Lenders all of the “Production
Proceeds” (as defined therein) accruing to the property covered thereby, so
long as no Unmatured Default has occurred Borrower and its Subsidiaries may
continue to receive from the purchasers of production all such Production
Proceeds, subject, however, to the Liens created under the Collateral
Documents, which Liens are hereby affirmed and ratified.  Upon the occurrence of an Unmatured Default,
Administrative Agent and Lenders may exercise all rights and remedies granted
under the Collateral Documents, including the right to obtain possession of all
Production Proceeds then held by Borrower and its Subsidiaries or to receive
directly from the purchasers of production all other Production Proceeds.  In no case shall any failure, whether
purposed or inadvertent, by Administrative Agent or Lenders to collect directly
any such Production Proceeds constitute in any way a waiver, remission or
release of any of their rights under the Collateral Documents, nor shall any
release of any Production Proceeds by Administrative Agent or Lenders to
Borrower and its Subsidiaries constitute a waiver, remission, or release of any
other Production Proceeds or of any rights of Administrative Agent or Lenders
to collect other Production Proceeds thereafter.

 

ARTICLE X

 

DEFAULTS

 

The occurrence of any one or more of the following events shall
constitute a Default:

 

Section 10.1.                         Any representation or warranty
made or deemed made by or on behalf of the Borrower or any of its Subsidiaries
to the Lenders or the Administrative Agent under or in connection with this
Agreement, any Credit Extension, or any certificate or information delivered in
connection with this Agreement or any other Loan Document shall be materially
false on the date as of which made.

 

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Section 10.2.                         Nonpayment of principal of any
Loan when due, nonpayment of any amount due under Section 2.8(b)(i) when
due, nonpayment of any Reimbursement Obligation within one Business Day after
the same becomes due, or nonpayment of interest upon any Loan or of any
commitment fee, LC Fee or other obligations under any of the Loan Documents
within five days after the same becomes due.

 

Section 10.3.                         The breach by the Borrower of
any of the terms or provisions of Section 6.2, Section 6.3, Article VII,
Article VIII or Article IX.

 

Section 10.4.                         The breach by the Borrower
(other than a breach which constitutes a Default under another Section of
this Article X) of any of the terms or provisions of this Agreement which
is not remedied within ten days after written notice from the Administrative
Agent or any Lender.

 

Section 10.5.                         Failure of the Borrower or any
of its Subsidiaries to pay when due any Material Indebtedness; or the default
by the Borrower or any of its Subsidiaries in the performance (beyond the
applicable grace period with respect thereto, if any) of any term, provision or
condition contained in any Material Indebtedness Agreement, or any other event
shall occur or condition exist, the effect of which default, event or condition
is to cause, or to permit the holder(s) of such Material Indebtedness or the
lender(s) under any Material Indebtedness Agreement to cause, such Material
Indebtedness to become due prior to its stated maturity or any commitment to
lend under any Material Indebtedness Agreement to be terminated prior to its
stated expiration date; or any Material Indebtedness of the Borrower or any of
its Subsidiaries shall be declared to be due and payable or required to be
prepaid or repurchased (other than by a regularly scheduled payment) prior to
the stated maturity thereof; or the Borrower or any of its Subsidiaries shall
not pay, or admit in writing its inability to pay, its debts generally as they
become due.

 

Section 10.6.                         The Borrower or any of its
Subsidiaries shall (i) have an order for relief entered with respect to it
under the Federal bankruptcy laws as now or hereafter in effect, (ii) make
an assignment for the benefit of creditors, (iii) apply for, seek, consent
to, or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any Substantial Portion of
its Property, (iv) institute any proceeding seeking an order for relief
under the Federal bankruptcy laws as now or hereafter in effect or seeking to
adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition of it or
its debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or fail to file an answer or other pleading denying the
material allegations of any such proceeding filed against it, (v) take any
corporate, partnership or other organizational action to authorize or effect
any of the foregoing actions set forth in this Section 10.6 or (vi) fail
to contest in good faith any appointment or proceeding described in Section 10.7.

 

Section 10.7.                         Without the application,
approval or consent of the Borrower or any of its Subsidiaries, a receiver,
trustee, examiner, liquidator or similar official shall be appointed for the
Borrower or any of its Subsidiaries or any Substantial Portion of its Property,
or a proceeding described in Section 10.6(iv) shall be instituted
against the Borrower or any of its Subsidiaries

 

60

 

and such appointment continues undischarged
or such proceeding continues undismissed or unstayed for a period of 60
consecutive days.

 

Section 10.8.                         Any court, government or
governmental agency shall condemn, seize or otherwise appropriate, or take
custody or control of, all or any portion of the Property of the Borrower and
its Subsidiaries which, when taken together with all other Property of the
Borrower and its Subsidiaries so condemned, seized, appropriated, or taken custody
or control of, during the twelve-month period ending with the month in which
any such action occurs, constitutes a Substantial Portion.

 

Section 10.9.                         The Borrower or any of its
Subsidiaries shall fail within 30 days to pay, bond or otherwise discharge one
or more (i) judgments or orders for the payment of money in excess of
$1,000,000 (or the equivalent thereof in currencies other than U.S. Dollars) in
the aggregate, or (ii) nonmonetary judgments or orders which, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect, which judgment(s), in any such case, is/are not stayed on appeal or
otherwise being appropriately contested in good faith.

 

Section 10.10.                  The Unfunded
Liabilities of all Single Employer Plans shall exceed in the aggregate $500,000
or any Reportable Event shall occur in connection with any Plan.

 

Section 10.11.                  Nonpayment
by the Borrower or any Subsidiary of any Rate Management Obligation when due or
the breach by the Borrower or any Subsidiary of any term, provision or
condition contained in any Rate Management Transaction or any transaction of
the type described in the definition of “Rate Management Transactions,” whether
or not any Lender or Affiliate of a Lender is a party thereto, after taking
into account any applicable grace period.

 

Section 10.12.                  Any Change
in Control shall occur.

 

Section 10.13.                  The Borrower
or any of its Subsidiaries shall (i) be the subject of any proceeding or
investigation pertaining to the release by the Borrower, any of its
Subsidiaries or any other Person of any toxic or hazardous waste or substance
into the environment, or (ii) violate any Environmental Law, which, in the
case of an event described in clause (i) or clause (ii), could reasonably
be expected to have a Material Adverse Effect.

 

Section 10.14.                  Any Guaranty
shall fail to remain in full force or effect or any action shall be taken to
discontinue or to assert the invalidity or unenforceability of any Guaranty, or
any Guarantor shall fail to comply with any of the terms or provisions of any
Guaranty to which it is a party, or any Guarantor shall deny that it has any
further liability under any Guaranty to which it is a party, or shall give
notice to such effect.

 

Section 10.15.                  Any
Collateral Document shall for any reason fail to create a valid and perfected
first priority security interest in any collateral purported to be covered
thereby, except as permitted by the terms of any Collateral Document, or any
Collateral Document shall fail to remain in full force or effect; or any action
by Borrower or any of its Subsidiaries shall be taken to discontinue or to
assert the invalidity of unenforceability of any Collateral Document.

 

Section 10.16.                  The Borrower
shall fail to comply in any material respect with any of the terms or
provisions of any Collateral Document.

 

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Section 10.17.                  The
representations and warranties set forth in Section 5.15 (“Plan Assets;
Prohibited Transactions”) shall at any time not be true and correct.

 

Section 10.18.                  The
occurrence of a default under any Senior Note Document, any Permitted Bond
Document or any 9.60% Senior Notes Refinancing Document, which such
default shall continue unremedied or is not waived prior to the expiration of
any applicable period of grace or cure under any such Senior Note Document, any
such Permitted Bond Document, or any such 9.60% Senior Notes Refinancing
Document, as applicable.

 

ARTICLE XI

 

ACCELERATION, WAIVERS, AMENDMENTS
AND REMEDIES

 

Section 11.1.                         Acceleration;
Facility LC Collateral Account.

 

(i)                                     If any
Default described in Section 10.6 or Section 10.7 occurs with respect
to the Borrower, the obligations of the Lenders to make Loans hereunder and the
obligation and power of the LC Issuer to issue Facility LCs shall automatically
terminate and the Obligations shall immediately become due and payable without
any election or action on the part of the Administrative Agent, the LC Issuer
or any Lender and the Borrower will be and become thereby unconditionally obligated,
without any further notice, act or demand, to pay to the Administrative Agent
an amount in immediately available funds, which funds shall be held in the
Facility LC Collateral Account, equal to the difference of (x) the amount
of LC Obligations at such time, less (y) the amount on deposit in the
Facility LC Collateral Account at such time which is free and clear of all
rights and claims of third parties and has not been applied against the
Obligations (such difference, the “Collateral
Shortfall Amount”).  If
any other Default occurs and is continuing, the Required Lenders (or the
Administrative Agent with the consent of the Required Lenders) may (a) terminate
or suspend the obligations of the Lenders to make Loans hereunder and the
obligation and power of the LC Issuer to issue Facility LCs, or declare the
Obligations to be due and payable, or both, whereupon the Obligations shall
become immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which the Borrower hereby expressly waives, and (b) upon
notice to the Borrower and in addition to the continuing right to demand
payment of all amounts payable under this Agreement, make demand on the
Borrower to pay, and the Borrower will, forthwith upon such demand and without
any further notice or act, pay to the Administrative Agent the Collateral
Shortfall Amount, which funds shall be deposited in the Facility LC Collateral
Account.

 

(ii)                                  If at any
time while any Default is continuing, the Administrative Agent determines that
the Collateral Shortfall Amount at such time is greater than zero, the
Administrative Agent may make demand on the Borrower to pay, and the Borrower
will, forthwith upon such demand and without any further notice or act, pay to
the Administrative Agent the Collateral Shortfall Amount, which funds shall be
deposited in the Facility LC Collateral Account.

 

(iii)                               The
Administrative Agent may at any time or from time to time after funds are
deposited in the Facility LC Collateral Account, apply such funds to the

 

62

 

payment
of the Obligations and any other amounts as shall from time to time have become
due and payable by the Borrower to the Lenders or the LC Issuer under the Loan
Documents.

 

(iv)                              At any time
while any Default is continuing, neither the Borrower nor any Person claiming
on behalf of or through the Borrower shall have any right to withdraw any of
the funds held in the Facility LC Collateral Account.  After all of the Obligations have been indefeasibly
paid in full and the Aggregate Commitment has been terminated, any funds
remaining in the Facility LC Collateral Account shall be returned by the
Administrative Agent to the Borrower or paid to whomever may be legally
entitled thereto at such time.

 

(v)                                 If, within
30 days after acceleration of the maturity of the Obligations or termination of
the obligations of the Lenders to make Loans and the obligation and power of
the LC Issuer to issue Facility LCs hereunder as a result of any Default (other
than any Default as described in Section 10.6 or Section 10.7 with
respect to the Borrower) and before any judgment or decree for the payment of
the Obligations due shall have been obtained or entered, the Required Lenders
(in their sole discretion) shall so direct, the Administrative Agent shall, by
notice to the Borrower, rescind and annul such acceleration and/or termination.

 

Section 11.2.                         Amendments.  Subject to the provisions of this Section 11.2,
the Required Lenders (or the Administrative Agent with the consent in writing
of the Required Lenders) and the Borrower may enter into agreements
supplemental hereto for the purpose of adding or modifying any provisions to
the Loan Documents or changing in any manner the rights of the Lenders or the
Borrower hereunder or waiving any Default hereunder; provided, however, that no
such supplemental agreement shall (a) increase the amount of the
Commitment of any Lender hereunder without the consent of such Lender, or (b) without
the consent of all of the Lenders:

 

(i)                                     Extend the
final maturity of any Loan, or extend the expiry date of any Facility LC to a
date after the Facility Termination Date or postpone any regularly scheduled
payment of principal of any Loan or forgive all or any portion of the principal
amount thereof or any Reimbursement Obligation related thereto, or reduce the
rate or extend the time of payment of interest or fees thereon or Reimbursement
Obligations related thereto.

 

(ii)                                  Reduce the
percentage specified in the definition of Required Lenders.

 

(iii)                               Extend the
Facility Termination Date, or reduce the amount or extend the payment date for,
the mandatory payments required under Section 2.8(b)(i), or increase the
commitment of any Lender to issue Facility LCs, or permit the Borrower to
assign its rights under this Agreement.

 

(iv)                              Amend Section 2.6
or this Section 11.2.

 

(v)                                 Release any
Guarantor of any Advance or, except as provided in this Agreement, release all
or substantially all of the Collateral.

 

63

 

(vi)                              Increase any
Borrowing Base above the Borrowing Base then in effect.

 

No amendment of any provision of this Agreement relating to the
Administrative Agent shall be effective without the written consent of the
Administrative Agent, and no amendment of any provision relating to the LC
Issuer shall be effective without the written consent of the LC Issuer.

 

Section 11.3.                         Preservation
of Rights.  No delay or omission
of the Lenders, the LC Issuer or the Administrative Agent to exercise any right
under the Loan Documents shall impair such right or be construed to be a waiver
of any Default or an acquiescence therein, and the making of a Credit Extension
notwithstanding the existence of a Default or the inability of the Borrower to
satisfy the conditions precedent to such Credit Extension shall not constitute
any waiver or acquiescence.  Any single
or partial exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no waiver, amendment
or other variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lenders required
pursuant to Section 11.2, and then only to the extent in such writing
specifically set forth.  All remedies
contained in the Loan Documents or by law afforded shall be cumulative and all
shall be available to the Administrative Agent, the LC Issuer and the Lenders
until the Obligations have been paid in full.

 

ARTICLE XII

 

GENERAL PROVISIONS

 

Section 12.1.                         Survival
of Representations.  All
representations and warranties of the Borrower contained in this Agreement
shall survive the making of the Credit Extensions herein contemplated.

 

Section 12.2.                         Governmental
Regulation.  Anything contained
in this Agreement to the contrary notwithstanding, neither the LC Issuer nor
any Lender shall be obligated to extend credit to the Borrower in violation of
any limitation or prohibition provided by any applicable statute or regulation.

 

Section 12.3.                         Headings.  Section headings in the Loan Documents
are for convenience of reference only, and shall not govern the interpretation
of any of the provisions of the Loan Documents.

 

Section 12.4.                         Entire
Agreement.  The Loan Documents
embody the entire agreement and understanding among the Borrower, the
Administrative Agent, the LC Issuer and the Lenders and supersede all prior
agreements and understandings among the Borrower, the Administrative Agent, the
LC Issuer and the Lenders relating to the subject matter thereof other than the
fee letter described in Section 13.13, all of which shall survive and
remain in full force and effect during the term of this Agreement.

 

Section 12.5.                         Several
Obligations; Benefits of this Agreement.  The respective obligations of the Lenders
hereunder are several and not joint and no Lender shall be the partner or agent
of any other (except to the extent to which the Administrative Agent is
authorized to act as such).  The failure
of any Lender to perform any of its obligations hereunder shall not relieve

 

64

 

any other Lender from any of its obligations hereunder.  This Agreement shall not be construed so as
to confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns, provided, however, that
the parties hereto expressly agree that the Arranger shall enjoy the benefits
of the provisions of Section 12.6, Section 12.10 and Section 13.11
to the extent specifically set forth therein and shall have the right to
enforce such provisions on its own behalf and in its own name to the same
extent as if it were a party to this Agreement.

 

Section 12.6.                         Expenses;
Indemnification.

 

(i)                                     The Borrower
shall reimburse the Administrative Agent and the Arranger for any costs,
internal charges and out-of-pocket expenses (including attorneys’ fees and time
charges of attorneys for the Administrative Agent, which attorneys may be
employees of the Administrative Agent) paid or incurred by the Administrative Agent
or the Arranger in connection with the preparation, negotiation, execution,
delivery, syndication, review, amendment, modification, recordation, filing and
administration of the Loan Documents. 
The Borrower also agrees to reimburse the Administrative Agent, the
Arranger, the LC Issuer and the Lenders for any costs, internal charges and
out-of-pocket expenses (including attorneys’ fees and time charges of attorneys
for the Administrative Agent, the Arranger, the LC Issuer and the Lenders,
which attorneys may be employees of the Administrative Agent, the Arranger, the
LC Issuer or the Lenders) paid or incurred by the Administrative Agent, the
Arranger, the LC Issuer or any Lender in connection with the collection and
enforcement of the Loan Documents.

 

(ii)                                  The Borrower
hereby further agrees to indemnify the Administrative Agent, the Arranger, the
LC Issuer and each Lender, its directors, officers and employees against all
losses, claims, damages, penalties, judgments, liabilities and expenses
(including, without limitation, all expenses of litigation or preparation
therefor whether or not the Administrative Agent, the Arranger, the LC Issuer
or any Lender is a party thereto) which any of them may pay or incur arising
out of or relating to this Agreement, the other Loan Documents, the
transactions contemplated hereby or the direct or indirect application or
proposed application of the proceeds of any Credit Extension hereunder except
to the extent that they are determined in a final non-appealable judgment by a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the party seeking indemnification.  The obligations of the Borrower under this Section 12.6
shall survive the termination of this Agreement.

 

Section 12.7.                         Numbers
of Documents.  All statements,
notices, closing documents, and requests hereunder shall be furnished to the
Administrative Agent with sufficient counterparts so that the Administrative
Agent may furnish one to each of the Lenders.

 

Section 12.8.                         Accounting.  Except as provided to the contrary herein,
all accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles, except that any calculation or determination which is to be made on
a consolidated basis shall be made for the Borrower and all its Subsidiaries,
including those Subsidiaries, if any, which are unconsolidated on the Borrower’s
audited financial statements.

 

65

 

Section 12.9.                         Severability
of Provisions.  Any provision in
any Loan Document that is held to be inoperative, unenforceable, or invalid in
any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable,
or invalid without affecting the remaining provisions in that jurisdiction or
the operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.

 

Section 12.10.                  Nonliability
of Lenders.  The relationship
between the Borrower on the one hand and the Lenders, the LC Issuer and the
Administrative Agent on the other hand shall be solely that of borrower and
lender.  Neither the Administrative
Agent, the Arranger, the LC Issuer nor any Lender shall have any fiduciary
responsibilities to the Borrower. 
Neither the Administrative Agent, the Arranger, the LC Issuer nor any
Lender undertakes any responsibility to the Borrower to review or inform the
Borrower of any matter in connection with any phase of the Borrower’s business
or operations.  The Borrower agrees that
neither the Administrative Agent, the Arranger, the LC Issuer nor any Lender
shall have liability to the Borrower (whether sounding in tort, contract or
otherwise) for losses suffered by the Borrower in connection with, arising out
of, or in any way related to, the transactions contemplated and the
relationship established by the Loan Documents, or any act, omission or event
occurring in connection therewith, unless it is determined in a final
non-appealable judgment by a court of competent jurisdiction that such losses
resulted from the gross negligence or willful misconduct of the party from
which recovery is sought.  Neither the
Administrative Agent, the Arranger, the LC Issuer nor any Lender shall have any
liability with respect to, and the Borrower hereby waives, releases and agrees
not to sue for, any special, indirect or consequential damages suffered by the
Borrower in connection with, arising out of, or in any way related to the Loan
Documents or the transactions contemplated thereby.

 

Section 12.11.                  Confidentiality.  Each Lender agrees to use any confidential
information which it may receive from the Borrower or its Affiliates concerning
the Borrower or its Affiliates or its or their Properties (“Confidential
Information”) solely for the purposes of the Loan Documents
and the transactions provided for therein and not for any other purpose.  Each Lender agrees to hold Confidential
Information in confidence and to not disclose Confidential Information to any
Person other than (a) the other Lenders, Affiliates of such Lender, and
Affiliates of the other Lenders, (b) legal counsel to such Lender, (c) professional
advisors (such as petroleum engineering, geological and geophysical firms) who
are engaged by such Lender or any potential Transferee to evaluate the
properties of Borrower and its Affiliates in connection with the Loans, provided
that prior to delivering Confidential Information to any such advisor, such
advisor shall have entered into a confidentiality agreement in the form of Exhibit H,
and (d) to any of the following Persons, provided that such Person
is advised of and agrees to be bound by the obligations of confidentiality
contained in this section: (i) the direct or indirect contractual
counterparties of such Lender or such Lender’s Affiliates in swap agreements
relating to the obligations or assets of Borrower or its Subsidiaries, (ii) rating
agencies if required by such agencies in connection with a rating relating to
the Advances hereunder, (iii) any Transferee, and (iv) as permitted
by Section 15.4.  Nothing contained
herein shall be deemed to prevent disclosure of any Confidential Information if
such disclosure (A) is required by law, rule, regulation or regulatory
officials, (B) is required to be made in a judicial, administrative or
governmental proceeding pursuant to a valid subpoena or other applicable order,
or (C) is made to any Person in connection with any legal proceeding to
which such Lender is a party; provided, however, in making any such disclosure,
only that portion of the

 

66

 

Confidential Information relevant in the circumstances described above
shall be disclosed and all reasonable efforts shall have been taken to preserve
the confidentiality thereof.

 

Section 12.12.                  Nonreliance.  Each Lender hereby represents that it is not
relying on or looking to any margin stock (as defined in Regulation U of
the Board of Governors of the Federal Reserve System) for the repayment of the
Credit Extensions provided for herein.

 

Section 12.3.                         Disclosure.  The Borrower and each Lender hereby (i) acknowledge
and agree that JPMorgan and/or its Affiliates from time to time may hold
investments in, make other loans to or have other relationships with the
Borrower and/or its Subsidiaries, and (ii) waive any liability of JPMorgan
or such Affiliate to the Borrower or any Lender, respectively, arising out of
or resulting from such investments, loans or relationships other than
liabilities arising out of the gross negligence or willful misconduct of
JPMorgan or its Affiliates.

 

ARTICLE XIII

 

THE ADMINISTRATIVE AGENT

 

Section 13.1.                         Appointment;
Nature of Relationship.  JPMorgan
is hereby appointed by each of the Lenders as its contractual representative
(herein referred to as the “Administrative
Agent”) hereunder and under each other Loan Document, and each
of the Lenders irrevocably authorizes the Administrative Agent to act as the
contractual representative of such Lender with the rights and duties expressly
set forth herein and in the other Loan Documents.  The Administrative Agent agrees to act as
such contractual representative upon the express conditions contained in this Article XIII.  Notwithstanding the use of the defined term “Administrative
Agent,” it is expressly understood and agreed that the Administrative Agent
shall not have any fiduciary responsibilities to any Lender by reason of this
Agreement or any other Loan Document and that the Administrative Agent is
merely acting as the contractual representative of the Lenders with only those
duties as are expressly set forth in this Agreement and the other Loan
Documents.  In its capacity as the
Lenders’ contractual representative, the Administrative Agent (i) does not
hereby assume any fiduciary duties to any of the Lenders, (ii) is a “representative”
of the Lenders within the meaning of the term “secured party” as defined in the
Colorado Uniform Commercial Code and (iii) is acting as an independent
contractor, the rights and duties of which are limited to those expressly set
forth in this Agreement and the other Loan Documents.  Each of the Lenders hereby agrees to assert
no claim against the Administrative Agent on any agency theory or any other
theory of liability for breach of fiduciary duty, all of which claims each
Lender hereby waives.

 

Section 13.2.                         Powers.  The Administrative Agent shall have and may
exercise such powers under the Loan Documents as are specifically delegated to
the Administrative Agent by the terms of each thereof, together with such
powers as are reasonably incidental thereto. 
The Administrative Agent shall have no implied duties to the Lenders, or
any obligation to the Lenders to take any action thereunder except any action
specifically provided by the Loan Documents to be taken by the Administrative
Agent.

 

Section 13.3.                         General
Immunity.  Neither the
Administrative Agent nor any of its directors, officers, agents, or employees
shall be liable to the Borrower, the Lenders or any

 

67

 

Lender for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith except to the extent such action or inaction is determined in a final
non-appealable judgment by a court of competent jurisdiction to have arisen
from the gross negligence or willful misconduct of such Person.

 

Section 13.4.                         No
Responsibility for Loans, Recitals, etc.  Neither the Administrative Agent nor any of
its directors, officers, agents, or employees shall be responsible for or have
any duty to ascertain, inquire into, or verify (a) any statement, warranty
or representation made in connection with any Loan Document or any borrowing
hereunder; (b) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article IV,
except receipt of items required to be delivered solely to the Administrative
Agent; (d) the existence or possible existence of any Default or Unmatured
Default; (e) the validity, enforceability, effectiveness, sufficiency or
genuineness of any Loan Document or any other instrument or writing furnished
in connection therewith; (f) the value, sufficiency, creation, perfection
or priority of any Lien in any collateral security; or (g) the financial
condition of the Borrower or any Guarantor of any of the Obligations or of any
of the Borrower’s or any such Guarantor’s respective Subsidiaries.  The Administrative Agent shall have no duty
to disclose to the Lenders information that is not required to be furnished by
the Borrower to the Administrative Agent at such time, but is voluntarily
furnished by the Borrower to the Administrative Agent (either in its capacity
as Administrative Agent or in its individual capacity).

 

Section 13.5.                         Action
on Instructions of Lenders.  The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder and under any other Loan Document in
accordance with written instructions signed by the Required Lenders, and such
instructions and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders.  The
Lenders hereby acknowledge that the Administrative Agent shall be under no duty
to take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement or any other Loan Document unless it shall be
requested in writing to do so by the Required Lenders.  The Administrative Agent shall be fully
justified in failing or refusing to take any action hereunder and under any
other Loan Document unless it shall first be indemnified to its satisfaction by
the Lenders pro rata against any and all liability, cost and expense that it
may incur by reason of taking or continuing to take any such action.

 

Section 13.6.                         Employment
of Agents and Counsel.  The
Administrative Agent may execute any of its duties as Administrative Agent
hereunder and under any other Loan Document by or through employees, agents,
and attorneys-in-fact and shall not be answerable to the Lenders, except as to
money or securities received by it or its authorized agents, for the default or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care.  The Administrative
Agent shall be entitled to advice of counsel concerning the contractual
arrangement between the Administrative Agent and the Lenders and all matters
pertaining to the Administrative Agent’s duties hereunder and under any other
Loan Document.

 

Section 13.7.                         Reliance
on Documents; Counsel.  The
Administrative Agent shall be entitled to rely upon any Note, notice, consent,
certificate, affidavit, letter, telegram, statement, paper or document believed
by it to be genuine and correct and to have been signed or

 

68

 

sent by the proper person or persons, and, in respect to legal matters,
upon the opinion of counsel selected by the Administrative Agent, which counsel
may be employees of the Administrative Agent.

 

Section 13.8.                         Administrative
Agent’s Reimbursement and Indemnification.  The Lenders agree to reimburse and indemnify
the Administrative Agent ratably in proportion to their respective Commitments
(or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Borrower for which the Administrative Agent is entitled to
reimbursement by the Borrower under the Loan Documents, (ii) for any other
expenses incurred by the Administrative Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and enforcement
of the Loan Documents (including, without limitation, for any expenses incurred
by the Administrative Agent in connection with any dispute between the
Administrative Agent and any Lender or between two or more of the Lenders) and (iii) for
any liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever which
may be imposed on, incurred by or asserted against the Administrative Agent in
any way relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby
(including, without limitation, for any such amounts incurred by or asserted
against the Administrative Agent in connection with any dispute between the
Administrative Agent and any Lender or between two or more of the Lenders), or
the enforcement of any of the terms of the Loan Documents or of any such other
documents, provided that (a) no Lender shall be liable for any of the foregoing
to the extent any of the foregoing is found in a final non-appealable judgment
by a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the Administrative Agent and (b) any
indemnification required pursuant to Section 3.3(vii) shall,
notwithstanding the provisions of this Section 13.8, be paid by the
relevant Lender in accordance with the provisions thereof.  The obligations of the Lenders under this Section 13.8
shall survive payment of the Obligations and termination of this Agreement.

 

Section 13.9.                         Notice
of Default.  The Administrative
Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Unmatured Default hereunder unless the Administrative Agent has
received written notice from a Lender or the Borrower referring to this
Agreement describing such Default or Unmatured Default and stating that such
notice is a “notice of default.”  In the
event that the Administrative Agent receives such a notice, the Administrative Agent
shall give prompt notice thereof to the Lenders.

 

Section 13.10.                  Rights as a
Lender.  In the event the
Administrative Agent is a Lender, the Administrative Agent shall have the same
rights and powers hereunder and under any other Loan Document with respect to
its Commitment and its Loans as any Lender and may exercise the same as though
it were not the Administrative Agent, and the term “Lender” or “Lenders” shall,
at any time when the Administrative Agent is a Lender, unless the context
otherwise indicates, include the Administrative Agent in its individual
capacity.  The Administrative Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those contemplated
by this Agreement or any other Loan Document, with the Borrower or any of its
Subsidiaries in which the Borrower or such Subsidiary is not restricted hereby
from engaging with any other Person.

 

69

 

Section 13.11.                  Lender
Credit Decision.  Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent, the Arranger or any other Lender and based on the
financial statements prepared by the Borrower and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents.  Each Lender also acknowledges that it will,
independently and without reliance upon the Administrative Agent, the Arranger
or any other Lender 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 action under this Agreement and the other Loan Documents.

 

Section 13.12.                  Successor
Administrative Agent.  The
Administrative Agent may resign at any time by giving written notice thereof to
the Lenders and the Borrower, such resignation to be effective upon the
appointment of a successor Administrative Agent or, if no successor
Administrative Agent has been appointed, forty-five days after the retiring
Administrative Agent gives notice of its intention to resign.  The Administrative Agent may be removed at
any time with or without cause by written notice received by the Administrative
Agent from the Required Lenders, such removal to be effective on the date
specified by the Required Lenders.  Upon
any such resignation or removal, the Required Lenders shall have the right to appoint,
on behalf of the Borrower and the Lenders, a successor Administrative
Agent.  If no successor Administrative
Agent shall have been so appointed by the Required Lenders within thirty days
after the resigning Administrative Agent’s giving notice of its intention to
resign, then the resigning Administrative Agent may appoint, on behalf of the
Borrower and the Lenders, a successor Administrative Agent.  Notwithstanding the previous sentence, the
Administrative Agent may at any time without the consent of the Borrower or any
Lender, appoint any of its Affiliates which is a commercial bank as a successor
Administrative Agent hereunder.  If the
Administrative Agent has resigned or been removed and no successor
Administrative Agent has been appointed, the Lenders may perform all the duties
of the Administrative Agent hereunder and the Borrower shall make all payments
in respect of the Obligations to the applicable Lender and for all other
purposes shall deal directly with the Lenders. 
No successor Administrative Agent shall be deemed to be appointed
hereunder until such successor Administrative Agent has accepted the
appointment.  Any such successor
Administrative Agent shall be a commercial bank having capital and retained
earnings of at least $100,000,000.  Upon
the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the resigning or removed Administrative Agent.  Upon the effectiveness of the resignation or
removal of the Administrative Agent, the resigning or removed Administrative
Agent shall be discharged from its duties and obligations hereunder and under
the Loan Documents.  After the
effectiveness of the resignation or removal of an Administrative Agent, the
provisions of this Article XIII shall continue in effect for the benefit
of such Administrative Agent in respect of any actions taken or omitted to be
taken by it while it was acting as the Administrative Agent hereunder and under
the other Loan Documents.  In the event
that there is a successor to the Administrative Agent by merger, or the
Administrative Agent assigns its duties and obligations to an Affiliate pursuant
to this Section 13.12, then the term “Prime Rate” as used in this
Agreement shall mean the prime rate, base rate or other analogous rate of the
new Administrative Agent.

 

70

 

Section 13.13.                  Administrative
Agent and Arranger Fees.  The
Borrower agrees to pay to the Administrative Agent and the Arranger, for their
respective accounts, the fees agreed to by the Borrower, the Administrative
Agent and the Arranger pursuant to that certain letter agreement dated March 14,
2005, or as otherwise agreed from time to time.

 

Section 13.14.                  Delegation
to Affiliates.  The Borrower and
the Lenders agree that the Administrative Agent may delegate any of its duties
under this Agreement to any of its Affiliates. 
Any such Affiliate (and such Affiliate’s directors, officers, agents and
employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Administrative Agent is entitled under Article XII
and Article XIII.

 

Section 13.15.                  Execution
of Collateral Documents.  The
Lenders hereby empower and authorize the Administrative Agent to execute and
deliver to the Borrower on their behalf the Certificate of Effectiveness, the
Collateral Documents and all related agreements, documents or instruments as
shall be necessary or appropriate to effect the purposes of the Collateral
Documents.

 

Section 13.16.                  Collateral
Releases.  The Lenders hereby
empower and authorize the Administrative Agent to execute and deliver to the
Borrower on their behalf any agreements, documents or instruments as shall be
necessary or appropriate to effect any releases of Collateral which Borrower
and its Subsidiaries are permitted to sell or otherwise transfer pursuant to Section 7.4,
or which shall otherwise be permitted by the terms hereof or of any other Loan
Document or which shall otherwise have been approved by the Required Lenders
(or, if required by the terms of Section 11.2, all of the Lenders) in
writing.

 

Section 13.17.                  Documentation
Agent, Syndication Agent, etc. 
None of the Lenders identified in this Agreement as the Documentation
Agent or a Co-Syndication Agent shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Lenders as such. 
Without limiting the foregoing, none of such Lenders shall have or be
deemed to have a fiduciary relationship with any Lender.  Each Lender hereby makes the same
acknowledgments with respect to such Lenders as it makes with respect to the
Administrative Agent in Section 13.11.

 

ARTICLE XIV

 

SETOFF; RATABLE PAYMENTS

 

Section 14.1.                         Setoff.  In addition to, and without limitation of,
any rights of the Lenders under applicable law, if the Borrower becomes
insolvent, however evidenced, or any Default occurs, any and all deposits
(including all account balances, whether provisional or final and whether or
not collected or available) and any other Indebtedness at any time held or
owing by any Lender or any Affiliate of any Lender to or for the credit or
account of the Borrower may be offset and applied toward the payment of the
Obligations owing to such Lender, whether or not the Obligations, or any part
hereof, shall then be due.

 

71

 

Section 14.2.                         Ratable
Payments.  If any Lender, whether
by setoff or otherwise, has payment made to it upon its Outstanding Credit
Exposure (other than payments received pursuant to Section 3.1, Section 3.2,
Section 3.4, or Section 3.5) in a greater proportion than that
received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Aggregate Outstanding Credit Exposure held by the
other Lenders so that after such purchase each Lender will hold its Pro Rata
Share of the Aggregate Outstanding Credit Exposure.  If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such
action necessary such that all Lenders share in the benefits of such collateral
ratably in proportion to their respective Pro Rata Shares of the Aggregate
Outstanding Credit Exposure.  In case any
such payment is disturbed by legal process, or otherwise, appropriate further
adjustments shall be made.

 

ARTICLE XV

 

BENEFIT OF AGREEMENT;
ASSIGNMENTS; PARTICIPATIONS

 

Section 15.1.                         Successors
and Assigns.  The terms and
provisions of the Loan Documents shall be binding upon and inure to the benefit
of the Borrower and the Lenders and their respective successors and assigns
permitted hereby, except that (i) the Borrower shall not have the right to
assign its rights or obligations under the Loan Documents without the prior
written consent of each Lender, (ii) any assignment by any Lender must be
made in compliance with Section 15.3, and (iii) any transfer by
participation must be made in compliance with Section 15.2.  Any attempted assignment or transfer by any
party not made in compliance with this Section 15.1 shall be null and
void, unless such attempted assignment or transfer is treated as a
participation in accordance with Section 15.3.2.  The parties to this Agreement acknowledge
that clause (ii) of this Section 15.1 relates only to absolute
assignments and this Section 15.1 does not prohibit assignments creating
security interests, including, without limitation, (x) any pledge or
assignment by any Lender of all or any portion of its rights under this Agreement
and any Note to a Federal Reserve Bank or (y) in the case of a Lender
which is a Fund, any pledge or assignment of all or any portion of its rights
under this Agreement and any Note to its trustee in support of its obligations
to its trustee; provided, however, that no such pledge or assignment creating a
security interest shall release the transferor Lender from its obligations
hereunder unless and until the parties thereto have complied with the
provisions of Section 15.3.  The
Administrative Agent may treat the Person which made any Loan or which holds
any Note as the owner thereof for all purposes hereof unless and until such
Person complies with Section 15.3; provided, however, that the
Administrative Agent may in its discretion (but shall not be required to)
follow instructions from the Person which made any Loan or which holds any Note
to direct payments relating to such Loan or Note to another Person.  Any assignee of the rights to any Loan or any
Note agrees by acceptance of such assignment to be bound by all the terms and
provisions of the Loan Documents.  Any
request, authority or consent of any Person, who at the time of making such
request or giving such authority or consent is the owner of the rights to any
Loan (whether or not a Note has been issued in evidence thereof), shall be
conclusive and binding on any subsequent holder or assignee of the rights to
such Loan.

 

72

 

Section 15.2.                         Participations.

 

15.2.1.               Permitted Participants; Effect.  Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time sell to one or more
banks or other entities (“Participants”)
participating interests in any Outstanding Credit Exposure of such Lender, any
Note held by such Lender, any Commitment of such Lender or any other interest
of such Lender under the Loan Documents. 
In the event of any such sale by a Lender of participating interests to
a Participant, such Lender’s obligations under the Loan Documents shall remain
unchanged, such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, such Lender shall remain the
owner of its Outstanding Credit Exposure and the holder of any Note issued to
it in evidence thereof for all purposes under the Loan Documents, all amounts
payable by the Borrower under this Agreement shall be determined as if such
Lender had not sold such participating interests, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under the Loan
Documents.

 

15.2.2.               Voting Rights. 
Each Lender shall retain the sole right to approve, without the consent
of any Participant, any amendment, modification or waiver of any provision of
the Loan Documents other than any amendment, modification or waiver with
respect to any Credit Extension or Commitment in which such Participant has an
interest which would require consent of all of the Lenders pursuant to the
terms of Section 11.2 or of any other Loan Document.

 

15.2.3.               Benefit of Certain Provisions.  The Borrower agrees that each Participant
shall be deemed to have the right of setoff provided in Section 14.1 in
respect of its participating interest in amounts owing under the Loan Documents
to the same extent as if the amount of its participating interest were owing
directly to it as a Lender under the Loan Documents, provided that each Lender
shall retain the right of setoff provided in Section 14.1 with respect to
the amount of participating interests sold to each Participant.  The Lenders agree to share with each
Participant, and each Participant, by exercising the right of setoff provided
in Section 14.1, agrees to share with each Lender, any amount received
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with Section 14.2 as if each Participant were a Lender.  The Borrower further agrees that each
Participant shall be entitled to the benefits of Section 3.1, Section 3.2,
Section 3.4, and Section 3.5 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to Section 15.3,
provided that (i) a Participant shall not be entitled to receive any
greater payment under Section 3.1, Section 3.2, or Section 3.5
than the Lender who sold the participating interest to such Participant would
have received had it retained such interest for its own account, unless the
sale of such interest to such Participant is made with the prior written consent
of the Borrower, and (ii) any Participant not incorporated under the laws
of the United States of America or any State thereof agrees to comply with the
provisions of Section 3.3 to the same extent as if it were a Lender.

 

Section 15.3.                         Assignments.

 

15.3.1.               Permitted Assignments. 
Any Lender may, in the ordinary course of its business and in accordance
with applicable law, at any time assign to one or more banks or other entities
(“Purchasers”) all or any
part of its rights and obligations under the Loan

 

73

 

Documents.  Such assignment shall
be substantially in the form of Exhibit C or in such other form as
may be agreed to by the parties thereto. 
The consent of the Borrower, the Administrative Agent and the LC Issuer
shall be required prior to an assignment becoming effective with respect to a
Purchaser which is not a Lender or an Affiliate thereof; provided, however,
that if a Default has occurred and is continuing, the consent of the Borrower
shall not be required.  Such consent
shall not be unreasonably withheld or delayed. 
Each such assignment with respect to a Purchaser which is not a Lender
or an Affiliate thereof shall (unless each of the Borrower and the
Administrative Agent otherwise consents) be in an amount not less than the
lesser of (i) $5,000,000 or (ii) the remaining amount of the
assigning Lender’s Commitment (calculated as at the date of such assignment) or
outstanding Loans (if the applicable Commitment has been terminated).

 

15.3.2.               Effect; Effective Date. 
Upon (i) delivery to the Administrative Agent of a notice of
assignment, substantially in the form attached as Exhibit I to Exhibit C
(a “Notice of Assignment”),
together with any consents required by Section 15.3.1, and (ii) payment
of a $3,500 fee to the Administrative Agent for processing such assignment,
such assignment shall become effective on the effective date specified in such
Notice of Assignment.  The Notice of
Assignment shall contain a representation by the Purchaser to the effect that
none of the consideration used to make the purchase of the Commitment and
Outstanding Credit Exposure under the applicable assignment agreement are “plan
assets” as defined under ERISA and that the rights and interests of the
Purchaser in and under the Loan Documents will not be “plan assets” under
ERISA.  On and after the effective date
of such assignment, such Purchaser shall for all purposes be a Lender party to
this Agreement and any other Loan Document executed by or on behalf of the Lenders
and shall have all the rights and obligations of a Lender under the Loan
Documents, to the same extent as if it were an original party hereto, and no
further consent or action by the Borrower, the Lenders or the Administrative
Agent shall be required to release the transferor Lender with respect to the
percentage of the Aggregate Commitment and Outstanding Credit Exposure assigned
to such Purchaser.  Upon the consummation
of any assignment to a Purchaser pursuant to this Section 15.3.2, the
transferor Lender, the Administrative Agent and the Borrower shall, if the
transferor Lender or the Purchaser desires that its Loans be evidenced by
Notes, make appropriate arrangements so that new Notes or, as appropriate,
replacement Notes are issued to such transferor Lender and new Notes or, as
appropriate, replacement Notes, are issued to such Purchaser, in each case in
principal amounts reflecting their respective Commitments, as adjusted pursuant
to such assignment.

 

15.3.3.               Register. 
The Administrative Agent, acting solely for this purpose as an
Administrative Agent of the Borrower, shall maintain at one of its offices in
Chicago, Illinois, a copy of each Assignment and Assumption delivered to it and
a register for the recordation of the names and addresses of the Lenders, and
the Commitments of, and principal amounts of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. 
The Register shall be available for inspection by the Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.

 

74

 

Section 15.4.                         Dissemination
of Information.  The Borrower
authorizes each Lender to disclose to any Participant or Purchaser or any other
Person acquiring an interest in the Loan Documents by operation of law (each a “Transferee”) and any prospective
Transferee any and all information in such Lender’s possession concerning the
creditworthiness of the Borrower and its Subsidiaries, including without
limitation any information contained in any reports provided to Administrative
Agent; provided that each Transferee and prospective Transferee agrees to be
bound by Section 12.11 of this Agreement.

 

Section 15.5.                         Tax
Treatment.  If any interest in
any Loan Document is transferred to any Transferee which is not incorporated
under the laws of the United States or any State thereof, the transferor Lender
shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 3.3(iv).

 

Section 15.6.                         Procedure
for Increases and Addition of New Lenders.  This Agreement permits certain increases in a
Lender’s Commitment and the admission of new Lenders providing new Commitments,
none of which require any consents or approvals from the other Lenders.  Any amendment hereto for such an increase or
addition shall be in the form attached hereto as Exhibit F and
shall only require the written signatures of the Administrative Agent, the
Borrower and the Lender(s) being added or increasing their Commitment.  In addition, within a reasonable time after
the effective date of any increase, the Administrative Agent shall, and is
hereby authorized and directed to, revise the Lenders Schedule reflecting
such increase and shall distribute such revised Schedule to each of the
Lenders and the Borrower, whereupon such revised Schedule shall replace
the old Schedule and become part of this Agreement.  On the Business Day following any such increase,
all outstanding Floating Rate Advances shall be reallocated among the Lenders
(including any newly added Lenders) in accordance with the Lenders’ respective
revised Pro Rata Shares.  Eurodollar
Advances shall not be reallocated among the Lenders prior to the expiration of
the applicable Interest Period in effect at the time of any such increase.

 

ARTICLE XVI

 

NOTICES

 

Section 16.1.                         Notices.  Except as otherwise permitted by Section 2.9
with respect to Borrowing Notices, all notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
transmission or similar writing) and shall be given to such party: (x) in
the case of the Borrower or the Administrative Agent, at its address or
facsimile number set forth on the signature pages hereof, (y) in the
case of any Lender, at its address or facsimile number set forth on the Lenders
Schedule or (z) in the case of any party, at such other address or
facsimile number as such party may hereafter specify for the purpose by notice
to the Administrative Agent and the Borrower in accordance with the provisions
of this Section 16.1.  Each such
notice, request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt 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 specified in this Section; provided
that notices to the Administrative Agent under Article II shall not be
effective until received.

 

75

 

Section 16.2.                         Change
of Address.  The Borrower, the
Administrative Agent and any Lender (i) may each change the address for
service of notice upon it by a notice in writing to the other parties hereto
and (ii) shall give such a notice if its address shall change.

 

ARTICLE XVII

 

COUNTERPARTS

 

This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart.  This Agreement shall be effective when it has
been executed by the Borrower, the Administrative Agent, the LC Issuer and the
Lenders and each party has notified the Administrative Agent by facsimile
transmission or telephone that it has taken such action.

 

ARTICLE XVIII

 

CHOICE OF LAW; CONSENT TO
JURISDICTION; WAIVER OF JURY TRIAL

 

Section 18.1.                         CHOICE
OF LAW.  THE LOAN DOCUMENTS
(OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL
BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF COLORADO, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

 

Section 18.2.                         CONSENT
TO JURISDICTION.  THE BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED
STATES FEDERAL OR COLORADO STATE COURT SITTING IN DENVER, COLORADO IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE
BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS
AN INCONVENIENT FORUM.  NOTHING HEREIN
SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT, THE LC ISSUER OR ANY LENDER
TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION.

 

Section 18.3.                         WAIVER
OF JURY TRIAL.  THE BORROWER, THE
ADMINISTRATIVE AGENT, THE LC ISSUER AND EACH LENDER HEREBY WAIVE TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.

 

76

 

ARTICLE XIX

 

USA PATRIOT ACT NOTICE 

 

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

 

ARTICLE XX

 

AMENDMENT AND RESTATEMENT

 

This Agreement amends and restates in its entirety the Existing Cimarex
Credit Agreement, and from and after the date hereof, and subject to the terms
hereof, including, without limitation, the execution and delivery of the
Certificate of Effectiveness, the terms and provisions of the Existing Cimarex
Credit Agreement shall be superseded by the terms and provisions of this
Agreement.  Borrower hereby agrees that (i) the
Existing Cimarex Indebtedness, all accrued and unpaid interest thereon, and all
accrued and unpaid fees under the Existing Cimarex Credit Agreement shall be
deemed to be Indebtedness of Borrower outstanding under and governed by this
Agreement and (ii) all Liens securing the Existing Cimarex Indebtedness
shall continue in full force and effect to secure the Secured Obligations.

 

[THE REMAINDER
OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

 

77

 

 

IN WITNESS WHEREOF, the
Borrower, the Lenders and the Administrative Agent have executed this Agreement
as of the date first above written.

 

	
   

  	
  CIMAREX ENERGY CO.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul
  Korus

  
	
   

  	
   

  	
  Paul Korus,

  
	
   

  	
   

  	
  Vice
  President, Chief Financial Officer

  
	
   

  	
   

  	
  and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  1700 Lincoln Street, Suite 1800

  
	
   

  	
  Denver, Colorado 80203

  
	
   

  	
  Attention: Paul Korus

  
	
   

  	
  Telephone: (303) 295-3995

  
	
   

  	
  FAX: (303) 285-9299

  

 

 

	
   

  	
  JPMORGAN CHASE BANK, N.A.,

  
	
   

  	
  successor by merger to Bank
  One, NA (Main Office

  Chicago), Individually as a Lender, as LC Issuer

  and as Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. Scott
  Fowler

  
	
   

  	
   

  	
  J. Scott
  Fowler,

  
	
   

  	
   

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
  1717 Main Street

  
	
   

  	
  MC TX1-2448

  
	
   

  	
  Dallas, Texas 75201

  
	
   

  	
  Attention: J. Scott Fowler

  
	
   

  	
  Telephone: (214) 290-2162

  
	
   

  	
  FAX: (214) 290-2332

  

 

 

	
   

  	
  U.S. BANK NATIONAL ASSOCIATION,

  
	
   

  	
  Individually as a Lender and
  as Co-Syndication

  Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kathryn
  A. Gaiter

  
	
   

  	
  Name:

  	
  Kathryn A.
  Gaiter

  
	
   

  	
  Title:

  	
  Vice
  President

  
				

 

 

	
   

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  Individually as a Lender and
  as Co-Syndication

  Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gregory
  B. Hansen

  
	
   

  	
  Name:

  	
  Gregory B.
  Hansen

  
	
   

  	
  Title:

  	
  Vice
  President

  
				

 

 

	
   

  	
  WELLS FARGO BANK, N.A.,

  
	
   

  	
  Individually as a Lender and
  as Documentation Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Laura
  Bumgarner

  
	
   

  	
  Name:

  	
  Laura
  Bumgarner

  
	
   

  	
  Title:

  	
  Relationship
  Manager

  
				

 

 

	
   

  	
  UNION BANK OF CALIFORNIA, N.A.,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kimberly
  Coil

  
	
   

  	
  Name:

  	
  Kimberly
  Coil

  
	
   

  	
  Title:

  	
  Assistant
  Vice President

  
					

 

 

	
   

  	
  COMERICA BANK,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter L.
  Sefzik

  
	
   

  	
  Name:

  	
  Peter L.
  Sefzik

  
	
   

  	
  Title:

  	
  Vice
  President

  
					

 

 

	
   

  	
  DEUTSCHE BANK TRUST COMPANY

  AMERICAS,

  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lana
  Gifas

  
	
   

  	
  Name:

  	
  Lana Gifas

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Evelyn S. Lazala

  
	
   

  	
  Name:

  	
  Evelyn S.
  Lazala

  
	
   

  	
  Title:

  	
  Vice
  President

  
						

 

 

	
   

  	
  BANK OF OKLAHOMA, N.A.,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael
  M. Logan

  
	
   

  	
  Name:

  	
  Michael M.
  Logan

  
	
   

  	
  Title:

  	
  Senior Vice
  President

  
					

 

 

	
   

  	
  NATEXIS BANQUES POPULAIRES,

  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donovan
  C. Broussard

  
	
   

  	
  Name:

  	
  Donovan C.
  Broussard

  
	
   

  	
  Title:

  	
  Vice
  President & Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy
  L. Polvado

  
	
   

  	
  Name:

  	
  Timothy L.
  Polvado

  
	
   

  	
  Title:

  	
  Vice
  President & Manager

  
							

 

 

	
   

  	
  COMPASS BANK,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Murray
  E. Brasseux

  
	
   

  	
  Name:

  	
  Murray E.
  Brasseux

  
	
   

  	
  Title:

  	
  Executive
  Vice President

  
					

 

 

	
   

  	
  BNP PARIBAS,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David
  Dodd

  
	
   

  	
  Name:

  	
  David Dodd

  
	
   

  	
  Title:

  	
  Director

  
					

 

 

	
   

  	
  By:

  	
  /s/ Russell
  Otts

  
	
   

  	
  Name:

  	
  Russell Otts

  
	
   

  	
  Title:

  	
  Vice
  President

  
				

 

 

	
   

  	
  BANK OF
  SCOTLAND,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Amena
  Nabi

  
	
   

  	
  Name:

  	
  Amena Nabi

  
	
   

  	
  Title:

  	
  Assistant
  Vice President

  
					

 

 

	
   

  	
  FORTIS
  CAPITAL CORP.,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David
  Montgomery

  
	
   

  	
  Name:

  	
  David
  Montgomery

  
	
   

  	
  Title:

  	
  Senior Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Darrell Holley

  
	
   

  	
  Name:

  	
  Darrell
  Holley

  
	
   

  	
  Title:

  	
  Managing
  Director

  
						

 

 

	
   

  	
  HARRIS
  NESBITT FINANCING, INC.,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary Lou
  Allen

  
	
   

  	
  Name:

  	
  Mary Lou
  Allen

  
	
   

  	
  Title:

  	
  Vice
  President

  
					

 

 

	
   

  	
  CALYON NEW YORK BRANCH,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Olivier
  Audernard

  
	
   

  	
  Name:

  	
  Olivier
  Audernard

  
	
   

  	
  Title:

  	
  Managing
  Director

  
					

 

 

	
   

  	
  By:

  	
  /s/ Philippe
  Soustra

  
	
   

  	
  Name:

  	
  Philippe
  Soustra

  
	
   

  	
  Title:

  	
  Executive
  Vice President

  
				

 

 

	
   

  	
  STERLING
  BANK,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Melissa
  A. Bauman

  
	
   

  	
  Name:

  	
  Melissa A.
  Bauman

  
	
   

  	
  Title:

  	
  Senior Vice
  President

  
					

 

 

	
   

  	
  SOCIETE
  GENERALE,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Elena
  Robciuc

  
	
   

  	
  Name:

  	
  Elena
  Robciuc

  
	
   

  	
  Title:

  	
  Vice
  President

  
					

 

 

	
   

  	
  KEYBANK,
  N.A.,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas
  Rajan

  
	
   

  	
  Name:

  	
  Thomas Rajan

  
	
   

  	
  Title:

  	
  Vice
  President

  
					

 

 

	
   

  	
  CITICORP
  NORTH AMERICA, INC.,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Simon
  Walker

  
	
   

  	
  Name:

  	
  Simon Walker

  
	
   

  	
  Title:

  	
  Vice
  President

  
					

 

 

SCHEDULE 1

 

PRICING SCHEDULE

 

	
  Applicable

  Margin

  	
   

  	
  Level I

  Status

  	
   

  	
  Level II

  Status

  	
   

  	
  Level III

  Status

  	
   

  	
  Level IV

  Status

  	
   

  	
  Level V

  Status

  	
   

  
	
  Eurodollar
  Rate

  	
   

  	
  1.00

  	
  %

  	
  1.00

  	
  %

  	
  1.25

  	
  %

  	
  1.50

  	
  %

  	
  1.75

  	
  %

  
	
  Floating
  Rate

  	
   

  	
  0.00

  	
  %

  	
  0.00

  	
  %

  	
  0.00

  	
  %

  	
  0.250

  	
  %

  	
  0.500

  	
  %

  

 

	
  Applicable

  Fee Rate

  	
   

  	
  Level I

  Status

  	
   

  	
  Level II

  Status

  	
   

  	
  Level III

  Status

  	
   

  	
  Level IV

  Status

  	
   

  	
  Level V

  Status

  	
   

  
	
  Commitment
  Fee

  	
   

  	
  0.225

  	
  %

  	
  0.250

  	
  %

  	
  0.300

  	
  %

  	
  0.375

  	
  %

  	
  0.375

  	
  %

  

 

For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:

 

“Level I Status” exists at any
date if the Borrowing Base Usage Percentage on such date is less than 25%.

 

“Level II Status” exists at any
date if the Borrowing Base Usage Percentage on such date is greater than or
equal to 25% and less than 50%.

 

“Level III Status” exists at
any date if the Borrowing Base Usage Percentage on such date is greater than or
equal to 50% and less than 75%.

 

“Level IV Status” exists at any
date if the Borrowing Base Usage Percentage on such date is greater than or
equal to 75% and less than 90%.

 

“Level V Status” exists at any
date if the Borrowing Base Usage Percentage on such date is greater than or
equal to 90%.

 

“Status” means either Level I
Status, Level II Status, Level III Status, Level IV Status or
Level V Status.

 

The Applicable Margin and Applicable Fee Rate shall be determined on a
daily basis in accordance with the foregoing table based on the Borrowing Base
Usage Percentage on such day.

 

S1-1

 

SCHEDULE 2

 

LENDERS SCHEDULE

 

S2-1

 

SCHEDULE 3

 

DISCLOSURE
SCHEDULE

 

S3-1

 

SCHEDULE 4

 

EXISTING
FINANCIAL CONTRACTS

 

S4-1

 

EXHIBIT A

 

NOTE

 

	
  $

  	
  ,
  20    

  

 

Cimarex Energy
Co., a Delaware corporation (the “Borrower”),
promises to pay to the order of
                                                    
(the “Lender”) the principal
sum of
                                                    
Dollars
($                 )
or, if greater or less, the aggregate unpaid principal amount of all Loans made
by the Lender to the Borrower pursuant to Article II of the Agreement (as
hereinafter defined), in immediately available funds at the main office of
JPMorgan Chase Bank, N.A. in Chicago, Illinois, as Administrative Agent,
together with interest on the unpaid principal amount hereof at the rates and
on the dates set forth in the Agreement. 
The Borrower shall pay the principal of and accrued and unpaid interest
on the Loans in full on the Facility Termination Date.

 

The Lender shall, and is hereby authorized
to, record on the schedule attached hereto, or to otherwise record in
accordance with its usual practice, the date and amount of each Loan and the
date and amount of each principal payment hereunder.

 

This Note is one of the Notes issued pursuant
to, and is entitled to the benefits of, the Amended and Restated Credit
Agreement dated as of June 13, 2005 (which, as it may be amended or
modified and in effect from time to time, is herein called the “Agreement”), among the Borrower, the
lenders party thereto, including the Lender, the LC Issuer and JPMorgan Chase
Bank, N.A., as Administrative Agent, to which Agreement reference is hereby
made for a statement of the terms and conditions governing this Note, including
the terms and conditions under which this Note may be prepaid or its maturity
date accelerated.  This Note is secured
pursuant to the Collateral Documents and guaranteed pursuant to the Guaranty,
all as more specifically described in the Agreement, and reference is made
thereto for a statement of the terms and provisions thereof. Capitalized terms
used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement.  [This Note is given in partial renewal, extension and
restatement of (but not in extinguishment or novation of) the Existing
Indebtedness, as defined and described in the Agreement.]

 

 

	
   

  	
  CIMAREX ENERGY CO.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

A-1

 

SCHEDULE OF
LOANS AND PAYMENTS OF PRINCIPAL

TO

NOTE
OF CIMAREX ENERGY CO.,

DATED
JUNE 13, 2005

 

	
  Date

  	
   

  	
  Principal

  Amount of

  Loan

  	
   

  	
  Maturity

  of Interest

  Period

  	
   

  	
  Principal

  Amount

  Paid

  	
   

  	
  Unpaid

  Balance

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-2

 

EXHIBIT B

 

COMPLIANCE
CERTIFICATE

To:                              The
Lenders parties to the

 

Credit Agreement Described Below

 

This Compliance Certificate is furnished
pursuant to that certain Amended and Restated Credit Agreement dated as of June 13,
2005 (as amended, modified, renewed or extended from time to time, the “Credit Agreement”) among Cimarex Energy
Co., a Delaware corporation (the “Borrower”),
the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative
Agent for the Lenders and as LC Issuer. 
Unless otherwise defined herein, capitalized terms used in this
Compliance Certificate have the meanings ascribed thereto in the Credit
Agreement.

 

THE UNDERSIGNED HEREBY CERTIFIES THAT:

 

1.  I
am the duly elected
                                    
of the Borrower;

 

2.  I
have reviewed the terms of the Credit Agreement and I have made, or have caused
to be made under my supervision, a detailed review of the transactions and
conditions of the Borrower and its Subsidiaries during the accounting period
covered by the attached financial statements.

 

3.  The
examinations described in paragraph 2 did not disclose, and I have no knowledge
of, the existence of any condition or event which constitutes a Default or
Unmatured Default during or at the end of the accounting period covered by the
attached financial statements or as of the date of this Certificate, except as
set forth below.

 

4.  Schedule I
attached hereto sets forth financial data and computations evidencing the
Borrower’s compliance with certain covenants of the Credit Agreement, all of
which data and computations are true, complete and correct.

 

**[5.                     Schedule II attached hereto sets
forth the various reports and deliveries which are required at this time under
the Credit Agreement, the Security Agreement and the other Loan Documents and
the status of compliance.]**

 

Described below are the exceptions, if any,
to paragraph 3 by listing, in detail, the nature of the condition or event, the
period during which it has existed and the action which the Borrower has taken,
is taking, or proposes to take with respect to each such condition or event:

 

B-1

 

 

 

 

The foregoing certifications, together with
the computations set forth in Schedule I **[and Schedule II]** hereto
and the financial statements delivered with this Certificate in support hereof,
are made and delivered this
          day of
                                            ,
            .

 

 

	
   

  	
  CIMAREX ENERGY CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

B-2

 

SCHEDULE I
TO COMPLIANCE CERTIFICATE

Compliance as of 
                ,
         with

Provisions of Section 8.1
and 8.2 of

the Credit Agreement

 

B-3

 

SCHEDULE II
TO COMPLIANCE CERTIFICATE

Reports and Deliveries
Currently Due

 

B-4

 

EXHIBIT C

 

ASSIGNMENT
AND ASSUMPTION AGREEMENT

 

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

 

The Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor’s rights and obligations under the Credit
Agreement and the other Loan Documents, such that after giving effect to such
assignment the Assignee shall have purchased pursuant to this Assignment
Agreement the percentage interest specified in Item 3 of Schedule 1
of all outstanding rights and obligations under the Credit Agreement and the
other Loan Documents relating to the facilities listed in Item 3 of Schedule 1
(the “Assigned Interest”).  The aggregate Commitment (or Outstanding
Credit Exposure, if the applicable Commitment has been terminated) purchased by
the Assignee hereunder is set forth in Item 4 of Schedule 1.

 

In consideration for the sale and assignment
of Outstanding Credit Exposure hereunder, the Assignee shall pay the Assignor,
on the Effective Date, the amount agreed to by the Assignor and the
Assignee.  On and after the Effective Date,
the Assignee shall be entitled to receive all payments of principal, interest,
Reimbursement Obligations and fees with respect to the interest assigned
hereby.  The Assignee will promptly remit
to the Assignor any interest on Loans and fees received from the Administrative
Agent which relate to the portion of the Commitment or Outstanding Credit
Exposure assigned to the Assignee hereunder and not previously paid by the
Assignee to the Assignor.  In the event
that either party hereto receives any payment to which the other party hereto
is entitled under this Assignment Agreement, then the party receiving such
amount shall promptly remit it to the other party hereto.

 

	
  1.

  	
   

  	
  Assignor:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Assignee:

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Borrower:

  	
   

  	
  Cimarex Energy Co.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Administrative Agent:

  	
   

  	
  JPMorgan Chase Bank, N.A., as the
  administrative agent under the Credit Agreement.

  

 

(1)  Select as applicable.

 

C-1

 

	
  5.

  	
   

  	
  Credit Agreement:

  	
   

  	
  The $1,000,000,000 Amended and Restated
  Credit Agreement dated as of June 13, 2005, among Cimarex Energy Co.,
  the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative
  Agent, and the other agents party thereto.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Assigned Interest:

  	
   

  	
   

  

 

	
  a.

  	
  Assignee’s percentage interest of credit
  facility purchased under the Assignment Agreement

  	
         %

  
	
   

  	
   

  	
   

  
	
  b.

  	
  Amount of credit facility purchased under
  the Assignment Agreement

  	
  $      

  
	
   

  	
   

  	
   

  
	
  c.

  	
  Assignee’s Commitment (or Outstanding
  Credit Exposure with respect to terminated Commitments) purchased hereunder:

  	
  $      

  

 

 

	
  7.

  	
   

  	
  Trade Date:

  	
   

  	
  (2)

  

 

 

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

 

[Signature Page Follows]

 

(2)  Insert if satisfaction of minimum amounts is to be
determined as of the Trade Date.

 

C-2

 

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

 

	
   

  	
  ASSIGNOR

  
	
   

  	
  [NAME OF ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  ASSIGNEE

  
	
   

  	
  [NAME OF ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  

 

[Consented to and](3) Accepted:

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

 

 

	
  By:

  	
   

  	
   

  
	
  Title:(4)

  
	
  [Consented to:]

  
	
   

  
	
   

  
	
  [NAME OF RELEVANT PARTY]

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:

  

 

(3)  To be added only if the consent of the Agent is required
by the terms of the Credit Agreement

 

(4)  To be added only if the consent of the Borrower and/or
other parties (e.g. L/C Issuer) is required by the terms of the Credit
Agreement.

 

C-3

 

ANNEX
1

TERMS
AND CONDITIONS FOR

ASSIGNMENT
AND ASSUMPTION

 

1.                                       Representations
and Warranties.

 

1.1                                 Assignor.  The Assignor represents and warrants that (i)
it is the legal and beneficial owner of the Assigned Interest, (ii) the
Assigned Interest is free and clear of any lien, encumbrance or other adverse
claim and (iii) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby.  Neither the Assignor nor any of its officers,
directors, employees, agents or attorneys shall be responsible for (i) any
statements, warranties or representations made in or in connection with the Credit
Agreement or any other Loan Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency, perfection, priority, collectibility,
or value of the Loan Documents or any collateral thereunder, (iii) the
financial condition of the Borrower, any of its Subsidiaries or Affiliates or
any other Person obligated in respect of any Loan Document, (iv) the
performance or observance by the Borrower, any of its Subsidiaries or
Affiliates or any other Person of any of their respective obligations under any
Loan Document, (v) inspecting any of the property, books or records of the
Borrower, or any guarantor, or (vi) any mistake, error of judgment, or action
taken or omitted to be taken in connection with the Loans or the Loan
Documents.

 

1.2                                 Assignee.  The Assignee (a) represents and warrants that
(i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder, (iii)
agrees that its payment instructions and notice instructions are as set forth
in Schedule 1 to this Assignment and Assumption, (iv) confirms that none
of the funds, monies, assets or other consideration being used to make the
purchase and assumption hereunder are “plan assets” as defined under ERISA and
that its rights, benefits and interests in and under the Loan Documents will
not be “plan assets” under ERISA, (v) agrees to indemnify and hold the Assignor
harmless against all losses, costs and expenses (including, without limitation,
reasonable attorneys’ fees) and liabilities incurred by the Assignor in
connection with or arising in any manner from the Assignee’s non-performance of
the obligations assumed under this Assignment and Assumption, (vi) it has
received a copy of the Credit Agreement, together with copies of financial
statements and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, and (vii) attached as Schedule 1
to this Assignment and Assumption is any documentation required to be delivered
by the Assignee with respect to its tax status pursuant to the terms of the
Credit Agreement, duly completed and executed by the Assignee and (b) agrees
that (i) it will, independently and without reliance on the Administrative
Agent, the Assignor or any other Lender, 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 action under the Loan Documents, and
(ii) it will perform in accordance with 

 

C-4

 

their terms all of the obligations which by the terms of the Loan
Documents are required to be performed by it as a Lender.

 

2.                                       Payments.  The Assignee shall pay the Assignor, on the
Effective Date, the amount agreed to by the Assignor and the Assignee.  From and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignor for amounts which have accrued to but excluding the Effective Date
and to the Assignee for amounts which have accrued from and after the Effective
Date.

 

3.                                       General
Provisions.  This Assignment and
Assumption shall be binding upon, and inure to the benefit of, the parties
hereto and their respective successors and assigns.  This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument.  Delivery of an executed
counterpart of a signature page of this Assignment and Assumption by telecopy
shall be effective as delivery of a manually executed counterpart of this
Assignment and Assumption.  This
Assignment and Assumption shall be governed by, and construed in accordance
with, the law of the State of Colorado.

 

C-5

 

ADMINISTRATIVE
QUESTIONNAIRE

 

(Schedule to be supplied
by Closing Unit or Trading Documentation Unit)

 

C-6

 

US
AND NON-US TAX INFORMATION REPORTING REQUIREMENTS

 

(Schedule to be supplied
by Closing Unit or Trading Documentation Unit)

 

C-7

 

EXHIBIT D

 

OPINION

 

D-1

 

EXHIBIT E

 

GUARANTY

 

E-1

 

EXHIBIT F

 

FORM OF
AMENDMENT FOR AN INCREASED OR NEW COMMITMENT

 

This AMENDMENT is made as of the
           day of
                    ,
200   by and among Cimarex Energy Co., a Delaware corporation (the “Borrower”), JPMorgan Chase Bank, N.A.,
as administrative agent under the “Credit
Agreement” (as defined below) (the “Administrative Agent”), and
                                                  
(the “Supplemental Lender”).

 

The Borrower, the Administrative Agent and
certain other Lenders, as described therein, are parties to an Amended and
Restated Credit Agreement dated as of June 13, 2005 (as amended,
supplemented, or restated, the “Credit
Agreement”).  All terms
used herein and not otherwise defined shall have the same meaning given to them
in the Credit Agreement.

 

Pursuant to Section 15.6 of the Credit
Agreement, the Borrower has the right to increase the Aggregate Commitment by
obtaining additional Commitments upon satisfaction of certain conditions.  This Amendment requires only the signature of
the Borrower, the Administrative Agent and the Supplemental Lender so long as
the Aggregate Commitment is not increased above the amount permitted by the
Credit Agreement.

 

The Supplemental Lender is either (a) an
existing Lender which is increasing its Commitment or (b) a new Lender
which is a lending institution whose identity the Administrative Agent will
approve by its signature below.

 

In consideration of the foregoing, such
Supplemental Lender, from and after the date hereof shall have a  **[Commitment of
$                              
and if it is a new Lender, the Supplemental Lender hereby assumes all of
the rights and obligations of a Lender under the Credit Agreement.]**

 

The Borrower has executed and delivered to
the Supplemental Lender as of the date hereof, if requested by the Supplemental
Lender, a new or amended and restated Note in the form attached to the Credit
Agreement as Exhibit A to evidence the new or increased Commitment of the
Supplemental Lender.

 

[Signature Page Follows]

 

F-1

 

IN WITNESS WHEREOF, the Administrative Agent,
the Borrower and the Supplemental Lender have executed this Amendment as of the
date shown above.

 

	
   

  	
  CIMAREX ENERGY CO.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [SUPPLEMENTAL LENDER]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, N.A., as

  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

F-2

 

EXHIBIT G-1

 

FORM OF
PLEDGE AGREEMENT (CORPORATION)

 

G-1-1

EXHIBIT G-2

 

FORM OF
PLEDGE AGREEMENT (PARTNERSHIP)

 

G-2-1

 

EXHIBIT G-3

 

FORM OF
PLEDGE AGREEMENT (LIMITED LIABILITY COMPANY)

 

G-3-1

 

EXHIBIT H

 

FORM OF
CONFIDENTIALITY AGREEMENT

 

H-1

 

EXHIBIT I

 

FORM OF
CERTIFICATE OF EFFECTIVENESS

 

This Certificate of Effectiveness (this “Certificate”) is executed the 13th day of June, 2005 (the
“Effective Date”) by and
among Cimarex Energy Co., a Delaware corporation (“Borrower”) and JPMorgan Chase Bank,
N.A., as Administrative Agent (“Administrative
Agent”) for the Lenders under and as defined in that certain
Amended and Restated Credit Agreement (the “Agreement”) dated as of June 13, 2005, by and among
Borrower, Administrative Agent, and the Lenders and agents named therein.  This Certificate is executed pursuant to Section 4.1
of the Agreement and is the “Certificate of Effectiveness” therein
referenced.  Unless otherwise defined
herein, all terms used herein with their initial letter capitalized shall have
the meaning given such terms in the Agreement. 
Borrower and Administrative Agent (on behalf of itself and the Lenders)
hereby acknowledge and agree as follows:

 

1.                                       Borrower
has satisfied each condition precedent to the effectiveness of the Agreement
contained in Section 4.1 of the Agreement.

 

2.                                       The
Agreement is effective as of the Effective Date.

 

	
   

  	
  JPMORGAN CHASE BANK, N.A.,

  
	
   

  	
  as Administrative Agent for the Lenders

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  J. Scott
  Fowler,

  
	
   

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CIMAREX ENERGY CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Paul Korus,

  
	
   

  	
  Chief
  Financial Officer

  

 

I-1EXHIBIT 10.1

 

EXECUTION COPY

 

AMENDMENT
AGREEMENT dated as of June 14, 2005 (this “Amendment”),
to the Amended and Restated Credit Agreement dated as of October 9, 2003 (the “Existing Credit Agreement”),
among Washington Group International,
Inc., a Delaware corporation (the “Borrower”),
the Subsidiaries of the Borrower listed on the signature pages hereto (the “Guarantors”), the lenders (the “Lenders”) and the issuers (the “Issuers”) party to the Existing
Credit Agreement, the Tranche B Investors (as defined in the Existing Credit
Agreement), and Credit Suisse (formerly
known as Credit Suisse First Boston), as administrative agent (in such
capacity, the “Administrative
Agent”) for the Lenders.

 

A.            The
Borrower has requested that the Existing Credit Agreement be amended to, among
other things, (i) reduce the Applicable Margin and the Applicable Commitment
Fee Rate (each as defined in the Existing Credit Agreement), (ii) increase the
Commitments under the Tranche A Facility and decrease the Commitments under the
Tranche B Facility, (iii) extend the Scheduled Termination Date with respect to
each of the Facilities to the fifth anniversary of the Effective Date (as
defined below) and (iv) provide for the cancellation of each Tranche B CD (as
defined in the Existing Credit Agreement) and the funding of the Tranche B
Deposit Amounts under the Restated Credit Agreement (as defined below).

 

B.            Each
Lender with an outstanding Loan or a Commitment under (and as defined in) the
Existing Credit Agreement (each, an “Existing
Lender”) that executes and delivers a signature page to this
Amendment (each, a “Continuing
Lender”) at or prior to 12:00 p.m. (New York City
time) on June 14, 2005 (the “Signing
Date”) will be deemed to have agreed to the terms of this
Amendment upon the effectiveness of this Amendment on the Effective Date (as
defined below).  Each Person (other than
a Continuing Lender) that executes and delivers a signature page to this
Amendment at or prior to the Signing Date will, on the Effective Date, become a
Lender under the Restated Credit Agreement. 
Each Existing Lender that does not execute and deliver a signature page
to this Amendment at or prior to the Signing Date (each, a “Departing Lender”) will be
deemed not to have agreed to this Amendment, and will be subject to the
mandatory assignment provisions of the Existing Credit Agreement upon the
effectiveness of this Amendment on the Effective Date.

 

C.            Each
Tranche B Investor that, on the Effective Date, has amounts on deposit in a
Tranche B CD (each such Tranche B Investor, an “Existing Tranche B Investor”) that executes and delivers
a signature page to this Amendment (each, a “Continuing Tranche B Investor”) at or prior to the
Signing Date will be deemed to have agreed to the terms of this Amendment upon
the effectiveness of this Amendment on the Effective Date and an amount equal
to such Continuing Tranche B Investor’s Tranche B Deposit Amount (or, if such
Continuing Tranche B Investor’s Tranche B Deposit Amount shall exceed the
amount on deposit in such Continuing Tranche B Investor’s Tranche B CD, the
entire amount so on deposit) shall be transferred from such Continuing Tranche
B Investor’s Tranche B CD to the Credit-Linked Deposit Account in accordance
with the terms of the Restated Credit Agreement, whereupon such Continuing
Tranche B Investor’s Tranche B CD shall be cancelled forthwith and any amounts
remaining on deposit therein after such transfer shall be returned to such
Continuing Tranche B Investor in accordance with the terms of such Tranche B
CD.  Each Continuing Tranche B Investor
with a Tranche B Deposit Amount in excess of the amount so transferred pursuant
to the preceding sentence from its Tranche B CD to the Credit-Linked Deposit
Account shall deposit in the Credit Linked-Deposit Account an amount in Dollars
equal to such excess.  Each Existing
Tranche B Investor that does not execute and deliver a signature page to this
Amendment at or prior to the 

 

 

Signing Date
(each, a “Departing Tranche B Investor”
and, together with the Departing Lenders, the “Departing Parties”) will be deemed not to have agreed to
this Amendment and (i) will be subject to the mandatory assignment provisions
of the Existing Credit Agreement upon the effectiveness of this Amendment on
the Effective Date and (ii) upon the occurrence of the Effective Date, such
Departing Tranche B Investor’s Tranche B CD shall be cancelled forthwith and
all amounts on deposit therein (together with all accrued and unpaid interest,
fees and any other amounts due to such Departing Tranche B Investor under the
Existing Credit Agreement and the Tranche B CD through but excluding the
Effective Date) shall be returned to such Departing Tranche B Investor in
accordance with the terms of the Tranche B CD.

 

D.            To
accomplish the foregoing and to make certain other changes to the terms of the
Existing Credit Agreement, the Borrower, the Lenders and the Tranche B
Investors desire to amend and restate the Existing Credit Agreement in the form
of the Second Amended and Restated Credit Agreement attached hereto as Exhibit
A (the “Restated Credit Agreement”).

 

E.             The
amendment and restatement of the Existing Credit Agreement evidenced by the
Restated Credit Agreement is subject to the satisfaction of the conditions
precedent to effectiveness referred to in Section 5 hereof and shall
become effective as provided in Section 6 hereof.

 

F.             Capitalized
terms used but not defined herein shall, unless otherwise indicated, have the
meanings assigned to them in the Restated Credit Agreement.

 

Accordingly,
in consideration of the mutual agreements herein contained and other good and
valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties hereto agree as follows:

 

SECTION
1.           Credit-Linked
Deposits; Termination of Tranche B CDs; Departing Parties.  (a) 
Subject to the terms and conditions set forth herein and in the Restated
Credit Agreement, as of the Effective Date, each Continuing Tranche B Investor
and each Tranche B Investor (as defined in the Restated Credit Agreement) that
is not a Continuing Tranche B Investor hereby agrees to make its Credit-Linked
Deposit in an amount equal to such Tranche B Investor’s Tranche B Deposit
Amount.  Each Continuing Tranche B
Investor authorizes the Fronting Lender to make such Credit-Linked Deposit by
transferring amounts on deposit in such Continuing Tranche B Investor’s Tranche
B CD to the Credit-Linked Deposit Account in accordance with the terms of the
Restated Credit Agreement.  Upon such
transfer as set forth in the preceding sentence, each Continuing Tranche B
Investor’s Tranche B CD shall be cancelled forthwith and any amounts remaining
on deposit therein after such transfer in excess of such Continuing Tranche B
Investor’s Tranche B Deposit Amount shall be distributed to such Continuing
Tranche B Investor in accordance with the terms of such Tranche B CD.  If the Tranche B Deposit Amount of any
Continuing Tranche B Investor exceeds the amount on deposit in its Tranche B
CD, such Continuing Tranche B Investor shall deposit in the Credit-Linked
Deposit Account an amount equal to such excess on the Effective Date in
accordance with the Restated Credit Agreement.

 

(b)  As of the Effective Date, the Tranche B CD of
each Departing Tranche B Investor shall be cancelled forthwith and all amounts
on deposit as of the Effective Date (together with all accrued and unpaid
interest, fees and any other amounts due to such Departing Tranche B Investor
under the Existing Credit Agreement and the Tranche B CD through but excluding
the 

 

2

 

Effective
Date) shall be distributed to such Departing Tranche B Investor in accordance
with the terms of the Existing Credit Agreement and the Tranche B CD.

 

(c)  The agreements of the Tranche B Investors are
several and not joint, and no Tranche B Investor shall be responsible for any
other Tranche B Investor’s failure to make any Credit-Linked Deposit.

 

(d)  Upon payment to a Departing Party of all
amounts due and owing to such Departing Party hereunder and under the Loan
Documents and the Tranche B Documents (as such terms are defined in the
Existing Credit Agreement) through but excluding the Effective Date), but
without the requirement of further action on the part of such Departing Party,
the Borrower, the Fronting Lender or the Administrative Agent, such Departing
Party shall cease to be a party to the Existing Credit Agreement and the
Tranche B Documents (as defined in the Existing Credit Agreement) (and
shall not become a party to the Restated Credit Agreement) but shall continue
to be entitled to the benefits of those provisions of the Existing Credit
Agreement and the Tranche B Documents to which it was a party that by
their terms survive the termination of the Existing Credit Agreement and the
Tranche B Documents.

 

SECTION
2.  Amendment
and Restatement of the Existing Credit Agreement.  The Borrower, the Lenders and the
Tranche B Investors agree that the Existing Credit Agreement (including
all exhibits and schedules thereto) shall be amended and restated in its
entirety on the Effective Date such that, on the Effective Date, the terms set
forth in the Restated Credit Agreement shall replace the terms of the Existing
Credit Agreement.  As used in the
Restated Credit Agreement, the terms “Agreement”, “this Agreement”, “herein”, “hereinafter”,
“hereto”, “hereof”, and words of similar import shall, unless the context
otherwise requires, mean, from and after the replacement of the terms of the
Existing Credit Agreement by the terms of the Restated Credit Agreement, the
Restated Credit Agreement.  Without
limiting the foregoing, upon the effectiveness of this Amendment on the
Effective Date (a) the Commitments of the Lenders will be as set forth on Schedule I (Commitments) to the Restated
Credit Agreement and (b) the Tranche B Deposit Amounts of the Tranche B
Investors will be as shown on the Register (and informed by the Administrative
Agent to the Borrower on the Effective Date).

 

SECTION
3.  Reaffirmation
of Guaranty and Collateral Documents.  Each Guarantor (and, to the extent
applicable, the Borrower), by its signature below, hereby (i) agrees that,
notwithstanding the effectiveness of this Amendment or the Restated Credit
Agreement, the Guaranty, the Pledge and Security Agreement and each of the
other Collateral Documents (each as defined in the Existing Credit Agreement)
continue to be in full force and effect, (ii) affirms and confirms its Guaranty
of all of the Obligations and the pledge of and/or grant of a security interest
in its assets as Collateral to secure such Obligations, all as provided in the
Guaranty, the Pledge and Security Agreement and the other Collateral Documents
as originally executed, and acknowledges and agrees that such Guaranty, pledge
and/or grant continue in full force and effect in respect of, and to secure,
the Obligations under the Restated Credit Agreement and the other Loan
Documents, and (iii) affirms and confirms that all the representations and
warranties made by or relating to it contained in the Restated Credit Agreement
and the other Loan Documents are true and correct in all material respects on
and as of the Effective Date with the same effect as though made on and as of
the Effective Date, except to the extent such representations and warranties
expressly relate to an earlier date.

 

3

 

SECTION
4.  Representations
and Warranties.  To induce the
other parties hereto to enter into this Amendment, the Borrower represents and
warrants to the Administrative Agent, each Lender, each Issuer and each Tranche
B Investor that, as of the Effective Date:

 

(a)  This Amendment has been duly authorized,
executed and delivered by each Loan Party, and each of the Amendment and the
Restated Credit Agreement constitutes a legal, valid and binding obligation of
each Loan Party, enforceable against each Loan Party in accordance with its
terms.

 

(b)  The representations and warranties set forth
in Article IV (Representations and Warranties)
of the Restated Credit Agreement are true and correct in all material respects
on and as of the Effective Date with the same effect as though made on and as
of the Effective Date, except to the extent such representations and warranties
expressly relate to an earlier date, in which case such representations and warranties
shall have been true and correct in all material respects as of such earlier
date.

 

(c)  No Default or Event of Default has occurred
and is continuing.

 

SECTION
5.  Conditions
to the Effectiveness of the Restated Credit Agreement.  The Restated Credit Agreement shall become
effective on the date on which (a) each of the conditions in Article III (Conditions to Loans and Letters of
Credit) of the Restated Credit Agreement is satisfied or waived in
accordance with the Restated Credit Agreement and (b) this Amendment shall have
become effective in accordance with Section 6 hereof.

 

SECTION
6.  Effectiveness;
Amendment.  This Amendment
shall become effective as of the date first set forth above on the date (the “Effective Date”) on
which the Administrative Agent (or its counsel) shall have received
counterparts of this Amendment that, when taken together, bear the signatures
of the Borrower, the Guarantors, the Administrative Agent, each Lender and
each Tranche B Investor, in each case after giving effect to any prior or
concurrent assignment, whether pursuant to the mandatory assignment provisions
of the Existing Credit Agreement or otherwise.

 

SECTION
7.  Limited
Waiver. (a)   Each undersigned Lender and Tranche B
Investor hereby waives compliance by the Borrower with Section 4.3 (Changes in Locations, Name, Etc.)
of the Pledge and Security Agreement to the extent, but only to the extent, of
the failure, if any, of the Borrower prior to the Effective Date to deliver 15
days’ prior written notice to the Administrative Agent with respect to the name
change (or other change) of any Subsidiary.

 

(b)  Except as expressly set forth herein, the
waiver set forth in Clause (a)
above (the “Waiver”) shall not by implication or
otherwise limit, impair, constitute a waiver of, or otherwise affect the rights
and remedies of the Administrative Agent, the Lenders, the Tranche B Investors,
or the Issuers under the Existing Credit Agreement, the Restated Credit
Agreement or any other Loan Document, and shall not alter, modify, amend or in
any way affect any of the terms, conditions, obligations, covenants or
agreements contained in the Existing Credit Agreement, the Restated Credit
Agreement or any other Loan Document, all of which are ratified and affirmed in
all respects and shall continue in full force and effect.  Nothing herein shall be deemed to entitle any
Loan Party to a consent to, or a waiver, amendment, modification or other
change of, any of the terms, conditions, obligations, covenants or agreements
contained in the Existing Credit Agreement, the Restated Credit Agreement or
any other Loan Document in

 

4

 

similar or
different circumstances.  The Waiver
shall apply and be effective only with respect to the provisions of the Pledge
or Security Agreement specifically referred to herein.

 

SECTION
8.  No
Novation.  Neither this
Amendment nor the effectiveness of the Restated Credit Agreement shall
extinguish the obligations for the payment of money outstanding under the Existing
Credit Agreement or discharge or release the Lien or priority of any Loan
Document or any other security therefor or any guarantee thereof.  Nothing herein contained shall be construed
as a substitution or novation of the Obligations outstanding under (and as
defined in) the Existing Credit Agreement or instruments guaranteeing or
securing the same, which shall remain in full force and effect, except as
modified hereby or by instruments executed concurrently herewith.  Nothing expressed or implied in this
Amendment, the Restated Credit Agreement or any other document contemplated
hereby or thereby shall be construed as a release or other discharge of the
Borrower under the Existing Credit Agreement or the Borrower or any other Loan
Party under any Loan Document (as defined in the Existing Credit Agreement)
from any of its obligations and liabilities thereunder.  The Existing Credit Agreement and each of the
other Loan Documents (as defined in the Existing Credit Agreement) shall remain
in full force and effect, until and except as modified hereby or in connection
herewith.  This Amendment shall
constitute a Loan Document for all purposes of the Restated Credit Agreement.

 

SECTION
9.  Applicable
Law.  THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.

 

SECTION
10.  Counterparts.  This Amendment may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which when taken together
shall constitute a single contract, and shall become effective as provided in
Section 6 hereof.  Delivery of an
executed signature page to this Amendment by facsimile transmission shall be as
effective as delivery of a manually signed counterpart of this Amendment.

 

SECTION
11.  Headings.  The headings of this Amendment are for
purposes of reference only and shall not limit or otherwise affect the meaning
hereof.

 

[Remainder of page intentionally left blank]

 

5

 

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

 

	
   

  	
  THE BORROWER:

  
	
   

  	
   

  
	
   

  	
  WASHINGTON GROUP INTERNATIONAL, INC.,

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Earl L.
  Ward

  	
   

  
	
   

  	
   

  	
  Name: Earl L. Ward

  
	
   

  	
   

  	
  Title:   Vice
  President and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  EACH OF THE GUARANTORS LISTED ON

  SCHEDULE A,

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Earl L.
  Ward

  	
   

  
	
   

  	
   

  	
  Name: Earl
  L. Ward

  
	
   

  	
   

  	
  Title:   Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE
  ADMINISTRATIVE AGENT:

  
	
   

  	
   

  
	
   

  	
  CREDIT SUISSE, CAYMAN ISLANDS BRANCH
(formerly known as Credit Suisse First Boston,

  acting through its Cayman Islands Branch),

  individually and as the Administrative Agent, the

  Fronting Lender and an Issuer,

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Robert
  Hetu

  	
   

  
	
   

  	
   

  	
  Name: Robert
  Hetu

  
	
   

  	
   

  	
  Title:   Director

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Vanessa
  Gomez

  	
   

  
	
   

  	
   

  	
  Name: Vanessa
  Gomez

  
	
   

  	
   

  	
  Title:   Vice President

  
					

 

6

 

SIGNATURE PAGE TO 

THE AMENDMENT AGREEMENT 

DATED AS OF JUNE    , 2005, TO 

THE WASHINGTON GROUP

INTERNATIONAL, INC. 

AMENDED AND RESTATED

CREDIT AGREEMENT

 

To approve
the Amendment Agreement

as a
Lender or a Tranche B Investor:

 

 

EACH OF THE
FOLLOWING INSTITUTIONS:

 

BNP PARIBAS

LASALLE BANK
N.A.

UNITED
OVERSEAS BANK LTD., NEW YORK AGENCY

COMMERZBANK
AG, NEW YORK AND GRAND CAYMAN BRANCHES

FIFTH THIRD
BANK

HSBC BANK USA,
NATIONAL ASSOCIATION

KEY BANK
NATIONAL ASSOCIATION

THE BANK OF
NEW YORK

KBC BANK N.V.

WACHOVIA BANK,
N.A.

CHINATRUST
COMMERCIAL BANK

LANDMARK CDO
LIMITED BY ALADDIN CAPITAL MANAGEMENT LLC AS MANAGER

LANDMARK II
CDO LIMITED BY ALADDIN CAPITAL MANAGEMENT LLC AS MANAGER

LANDMARK III
CDO LIMITED BY ALADDIN CAPITAL MANAGEMENT LLC AS MANAGER

LANDMARK IV
CDO LIMITED BY ALADDIN CAPITAL MANAGEMENT LLC AS MANAGER

APEX (IDM) CDO
I, LTD., BY BABSON CAPITAL MANAGEMENT LLC AS COLLATERAL MANAGER

BABSON CLO
LTD., BY BABSON CAPITAL MANAGEMENT LLC AS COLLATERAL MANAGER

MAPLEWOOD
(CAYMAN) LIMITED, BY BABSON CAPITAL MANAGEMENT LLC AS INVESTMENT MANAGER

MASSACHUSETTS
MUTUAL LIFE INSURANCE COMPANY, BY BABSON CAPITAL MANAGEMENT LLC AS INVESTMENT
ADVISER

TRYON CLO
LTD., BY BABSON CAPITAL MANAGEMENT LLC AS COLLATERAL MANAGER

BANK OF
MONTREAL

HANOVER SQUARE
CLO LTD., BY BLACKSTONE DEBT ADVISORS L.P. AS COLLATERAL MANAGER

MONUMENT PARK
CDO LTD., BY BLACKSTONE DEBT ADVISORS L.P. AS COLLATERAL MANAGER

UNION SQUARE
CDO LTD., BY BLACKSTONE DEBT ADVISORS L.P. AS COLLATERAL MANAGER

 

 

CALLIDUS DEBT
PARTNERS CLO FUND II, LTD., BY ITS COLLATERAL MANAGER, CALLIDUS CAPITAL
MANAGEMENT, LLC

CREDIT SUISSE
FIRST BOSTON INTERNATIONAL

KC CLO I
LIMITED

CSAM FUNDING
III

FIRST DOMINION
FUNDING II

CSAM
SYNDICATED LOAN FUND

CSAM FUNDING I

INVESTORS BANK
& TRUST COMPANY AS SUB-CUSTODIAN AGENT OF CYPRESSTREE INTERNATIONAL LOAN
HOLDING COMPANY LIMITED

HEWETT’S
ISLAND CDO, LTD., BY CYPRESSTREE INVESTMENT MANAGEMENT COMPANY, INC., AS
PORTFOLIO MANAGER

DENALI CAPITAL
LLC, MANAGING MEMBER OF DC FUNDING PARTNERS, PORTFOLIO MANAGER FOR DENALI
CAPITAL CLO II, LTD., OR AN AFFILIATE

DENALI CAPITAL
LLC, MANAGING MEMBER OF DC FUNDING PARTNERS, PORTFOLIO MANAGER FOR DENALI
CAPITAL CLO III, LTD., OR AN AFFILIATE

FLAGSHIP CLO
III, BY FLAGSHIP CAPITAL MANAGEMENT, INC.

FLAGSHIP CLO
IV, BY FLAGSHIP CAPITAL MANAGEMENT, INC.

AURUM CLO
2202-1 LTD., BY COLUMBIA MANAGEMENT ADVISORS, INC., AS PORTFOLIO MANAGER

FOOTHILL
INCOME TRUST, L.P. BY FIT GP, LLC, ITS GEN PARTNER

FOREST
MULTI-STRATEGY MASTER FUND SPC, ON BEHALF OF ITS MULTI-STRATEGY SEGREGATED
PORTFOLIO

FRANKLIN
FLOATING RATE DAILY ACCESS FUND

FRANKLIN
FLOATING RATE TRUST

FRANKLIN
FLOATING RATE MASTER SERIES

FRANKLIN
TEMPLETON LIM. DURATION INCOME TRUST

FRANKLIN TOTAL
RETURN FUND

GULF
STREAM-COMPASS CLO 2002-1 LTD., BY GULF STREAM ASSET MANAGEMENT LLC AS
COLLATERAL MANAGER

GULF
STREAM-COMPASS CLO 2003-1 LTD., BY GULF STREAM ASSET MANAGEMENT LLC AS COLLATERAL
MANAGER

HARCH CLO II
LIMITED

BUSHNELL CBNA
LOAN FUNDING LLC, FOR ITSELF OR AS AGENT FOR BUSHNELL CFPI LOAN FUNDING LLC

STANWICH LOAN
FUNDING LLC

TRUMBULL THC2
LOAN FUNDING LLC FOR ITSELF OR AS AGENT FOR TRUMBULL THC2 CFPI LOAN FUNDING LLC

HIGHLAND FLOATING
RATE LIMITED LIABILITY COMPANY BY HIGHLAND CAPITAL MANAGEMENT, L.P., ITS
INVESTMENT ADVISOR

WIND RIVER CLO
I LTD., BY MC DONNELL INVESTMENT MANAGEMENT, LLC, AS MANAGER

 

 

NATIONWIDE
MUTUAL INSURANCE COMPANY

NATIONWIDE
LIFE INSURANCE COMPANY, SEPARATE ACCOUNT B RETIREMENT

NATIONWIDE
LIFE INSURANCE COMPANY

STONE TOWER
CLO LTD., BY STONE TOWER DEBT ADVISORS AS ITS COLLATERAL MANAGER

STONE TOWER
CLO II LTD., BY STONE TOWER DEBT ADVISORS AS ITS COLLATERAL MANAGER

GRANITE
VENTURES I LTD., BY STONE TOWER DEBT ADVISORS AS ITS COLLATERAL MANAGER

 

 

	
   

  	
  By

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

SCHEDULE A TO

AMENDMENT AGREEMENT

 

	
  Name
  of Guarantor

  	
   

  	
  Jurisdiction of Organization

  
	
  Badger Energy, Inc.

  	
   

  	
  Delaware

  
	
  Badger Middle East Inc.

  	
   

  	
  Delaware

  
	
  Ebasco International Corporation

  	
   

  	
  Delaware

  
	
  Energy Overseas International, Inc.

  	
   

  	
  Delaware

  
	
  Harbert-Yeargin Inc.

  	
   

  	
  Delaware

  
	
  Middle East Holdings Limited (f/k/a
  Raytheon Engineers & Constructors Middle East Limited)

  	
   

  	
  Colorado

  
	
  MK Aviation Services, Inc.

  	
   

  	
  Nevada

  
	
  MK Nevada LLC

  	
   

  	
  Nevada

  
	
  MK-Ferguson Engineering Company

  	
   

  	
  Michigan

  
	
  National Projects, Inc.

  	
   

  	
  Nevada

  
	
  Pomeroy Corporation

  	
   

  	
  California

  
	
  Raytheon-Ebasco Overseas Ltd.

  	
   

  	
  Delaware

  
	
  Rust
  Constructors Puerto Rico, Inc.

  	
   

  	
  Nevada

  
	
  Rust Constructors, Inc.

  	
   

  	
  Delaware

  
	
  The Leasing Corporation (f/k/a Morrison
  Knudsen Leasing Corporation)

  	
   

  	
  Nevada

  
	
  United Engineers Far East, Ltd.

  	
   

  	
  Delaware

  
	
  United Engineers International, Inc.

  	
   

  	
  Pennsylvania

  
	
  United Mid-East, Inc.

  	
   

  	
  Delaware

  
	
  Washington Construction Corporation

  	
   

  	
  Montana

  
	
  Washington Demilitarization Company

  	
   

  	
  Delaware

  
	
  Washington Electrical, Inc.

  	
   

  	
  Nevada

  
	
  Washington Engineering Quality Services
  Corporation (f/k/a Raytheon Engineering Quality Services Corporation)

  	
   

  	
  Delaware

  
	
  Washington Group Argentina, Inc. (f/k/a MK
  Capital Company)

  	
   

  	
  Nevada

  
	
  Washington Group International, Inc.

  	
   

  	
  Ohio

  
	
  Washington Group Ireland Ltd. (f/k/a
  Raytheon Engineers and Constructors (Ireland) Ltd.)

  	
   

  	
  Delaware

  
	
  Washington Group Latin America, Inc. (f/k/a
  Raytheon Engineers & Constructors Latin America, Inc.)

  	
   

  	
  Delaware

  

 

 

	
  Name
  of Guarantor

  	
   

  	
  Jurisdiction of Organization

  
	
  Washington Infrastructure Corporation
  (f/k/a Raytheon Infrastructure, Inc.)

  	
   

  	
  New York

  
	
  Washington Infrastructure Services, Inc.

  	
   

  	
  Colorado

  
	
  Washington International, Inc.

  	
   

  	
  Nevada

  
	
  Washington Ohio Services LLC

  	
   

  	
  Nevada

  
	
  Washington Quality Inspection Company
  (f/k/a Raytheon Quality Inspection Company)

  	
   

  	
  Delaware

  
	
  Washington Quality Programs Company

  	
   

  	
  Delaware

  
	
  Washington-Catalytic, Inc.

  	
   

  	
  Delaware

  
	
  WGCI, Inc. (f/k/a Raytheon Constructors
  International, Inc.)

  	
   

  	
  Delaware

  
	
  WGI Asia, Inc. (f/k/a Asia Badger, Inc.)

  	
   

  	
  Delaware

  
	
  WGI Global Inc. (f/k/a Yampa Mining Co.)

  	
   

  	
  Nevada

  
	
  WGI Industrial Services, Ltd.

  	
   

  	
  Ohio

  
	
  WGI Middle East Inc. (f/k/a Cia. Internacional de Ingenieria, S.A.)

  	
   

  	
  Nevada

  
	
  Wisconsin Power Constructors, LLC

  	
   

  	
  Wisconsin

  

 

 

EXHIBIT A TO WASHINGTON

GROUP INTERNATIONAL, INC.

AMENDMENT AGREEMENT

DATED AS OF JUNE 14, 2005

 

 

$350,000,000

 

 

SECOND AMENDED AND RESTATED
CREDIT AGREEMENT

 

Dated as of June 14, 2005

 

 

among

 

 

WASHINGTON GROUP INTERNATIONAL,
INC.

 

as
Borrower

 

and

 

THE LENDERS AND ISSUERS PARTY
HERETO

 

and

 

CREDIT SUISSE

 

as
Administrative Agent,

Sole Lead Arranger and Book Manager

 

 

UNITED
OVERSEAS BANK

 

as Documentation Agent

 

 

BNP
PARIBAS

 

 

and

 

 

LASALLE
BANK NATIONAL ASSOCIATION

 

as Co-Syndication Agents

 

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE I

  	
  DEFINITIONS, INTERPRETATION AND ACCOUNTING
  TERMS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 1.1

  	
   

  	
  Defined Terms

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 1.2

  	
   

  	
  Computation of Time Periods

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 1.3

  	
   

  	
  Accounting Terms and Principles

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 1.4

  	
   

  	
  Certain Terms

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  THE FACILITIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.1

  	
   

  	
  The Commitments; Credit-Linked Deposit
  Account

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.2

  	
   

  	
  Borrowing Procedures

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.3

  	
   

  	
  Swing Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.4

  	
   

  	
  Letters of Credit

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.5

  	
   

  	
  Reduction and Termination of the
  Commitments

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.6

  	
   

  	
  Repayment of Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.7

  	
   

  	
  Evidence of Debt

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.8

  	
   

  	
  Optional Prepayments

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.9

  	
   

  	
  Mandatory Prepayments

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.10

  	
   

  	
  Interest

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.11

  	
   

  	
  Conversion/Continuation Option

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.12

  	
   

  	
  Fees

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.13

  	
   

  	
  Payments and Computations

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.14

  	
   

  	
  Special Provisions Governing Eurodollar
  Rate Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.15

  	
   

  	
  Capital Adequacy

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.16

  	
   

  	
  Taxes

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.17

  	
   

  	
  Substitution of Lenders

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  CONDITIONS TO LOANS AND LETTERS OF CREDIT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 3.1

  	
   

  	
  Conditions Precedent to Effectiveness

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 3.2

  	
   

  	
  Conditions Precedent to Each Loan and
  Letter of Credit

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 3.3

  	
   

  	
  Determinations of Initial Borrowing
  Conditions

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.1

  	
   

  	
  Corporate Existence; Compliance with Law

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.2

  	
   

  	
  Corporate Power; Authorization; Enforceable
  Obligations

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.3

  	
   

  	
  Ownership of Borrower; Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.4

  	
   

  	
  Financial Statements

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.5

  	
   

  	
  Material Adverse Change

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.6

  	
   

  	
  Solvency

  	
   

  

 

 

	
   

  	
  Section 4.7

  	
   

  	
  Litigation

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.8

  	
   

  	
  Taxes

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.9

  	
   

  	
  Full Disclosure

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.10

  	
   

  	
  Margin Regulations

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.11

  	
   

  	
  No Burdensome Restrictions; No Defaults

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.12

  	
   

  	
  Investment Company Act; Public Utility
  Holding Company Act

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.13

  	
   

  	
  Use of Proceeds

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.14

  	
   

  	
  Insurance

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.15

  	
   

  	
  Labor Matters

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.16

  	
   

  	
  ERISA

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.17

  	
   

  	
  Environmental Matters

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.18

  	
   

  	
  Intellectual Property

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.19

  	
   

  	
  Title; Real Property

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  FINANCIAL COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 5.1

  	
   

  	
  Maximum Leverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 5.2

  	
   

  	
  Minimum Fixed Charge Coverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 5.3

  	
   

  	
  Minimum Interest Coverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 5.4

  	
   

  	
  Capital Expenditures

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  REPORTING COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.1

  	
   

  	
  Financial Statements

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.2

  	
   

  	
  Collateral Reporting Requirements

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.3

  	
   

  	
  Default Notices

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.4

  	
   

  	
  Litigation

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.5

  	
   

  	
  Asset Sales

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.6

  	
   

  	
  Notices under Surety Facility

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.7

  	
   

  	
  SEC Filings; Press Releases

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.8

  	
   

  	
  Labor Relations

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.9

  	
   

  	
  Tax Returns

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.10

  	
   

  	
  Insurance

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.11

  	
   

  	
  ERISA Matters

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.12

  	
   

  	
  Environmental Matters

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.13

  	
   

  	
  Patriot Act Information

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.14

  	
   

  	
  Other Information

  	
   

  

 

 

	
  ARTICLE VII

  	
  AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.1

  	
   

  	
  Preservation of Corporate Existence, Etc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.2

  	
   

  	
  Compliance with Laws, Etc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.3

  	
   

  	
  Conduct of Business

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.4

  	
   

  	
  Payment of Taxes, Etc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.5

  	
   

  	
  Maintenance of Insurance

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.6

  	
   

  	
  Access

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.7

  	
   

  	
  Keeping of Books

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.8

  	
   

  	
  Maintenance of Properties, Etc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.9

  	
   

  	
  Application of Proceeds

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.10

  	
   

  	
  Environmental

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.11

  	
   

  	
  Additional Collateral and Guaranties

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.12

  	
   

  	
  Real Property

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.1

  	
   

  	
  Indebtedness

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.2

  	
   

  	
  Liens, Etc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.3

  	
   

  	
  Investments

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.4

  	
   

  	
  Sale of Assets

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.5

  	
   

  	
  Restricted Payments

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.6

  	
   

  	
  Restriction on Fundamental Changes

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.7

  	
   

  	
  Change in Nature of Business

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.8

  	
   

  	
  Transactions with Affiliates

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.9

  	
   

  	
  Restrictions on Subsidiary Distributions;
  No New Negative Pledge

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.10

  	
   

  	
  Modification of Constituent Documents

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.11

  	
   

  	
  Accounting Changes; Fiscal Year

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.12

  	
   

  	
  Margin Regulations

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.13

  	
   

  	
  Sale/Leasebacks

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.14

  	
   

  	
  Cancellation of Indebtedness Owed to It

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.15

  	
   

  	
  No Speculative Transactions

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.16

  	
   

  	
  Compliance with ERISA

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  EVENTS OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 9.1

  	
   

  	
  Events of Default

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 9.2

  	
   

  	
  Remedies

  	
   

  

 

 

	
   

  	
  Section 9.3

  	
   

  	
  Actions in Respect of Letters of Credit

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  THE ADMINISTRATIVE AGENT, THE FRONTING
  LENDER AND OTHER AGENTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 10.1

  	
   

  	
  Authorization and Action

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 10.2

  	
   

  	
  Administrative Agent’s and Fronting Lender’s
  Reliance, Etc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 10.3

  	
   

  	
  The Agents and the Fronting Lender
  Individually

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 10.4

  	
   

  	
  Lender Credit Decision

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 10.5

  	
   

  	
  Indemnification

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 10.6

  	
   

  	
  Successor Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 10.7

  	
   

  	
  Successor Fronting Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 10.8

  	
   

  	
  Concerning the Collateral and the
  Collateral Documents

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 10.9

  	
   

  	
  Collateral Matters Relating to Related
  Obligations

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 10.10

  	
   

  	
  Other Agents

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 11.1

  	
   

  	
  Amendments, Waivers, Etc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 11.2

  	
   

  	
  Assignments and Participations

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 11.3

  	
   

  	
  Costs and Expenses

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 11.4

  	
   

  	
  Indemnities

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 11.5

  	
   

  	
  Limitation of Liability

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 11.6

  	
   

  	
  Right of Set-off

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 11.7

  	
   

  	
  Sharing of Payments, Etc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 11.8

  	
   

  	
  Notices, Etc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 11.9

  	
   

  	
  No Waiver; Remedies

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 11.10

  	
   

  	
  Amendment and Restatement; Binding Effect

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 11.11

  	
   

  	
  Governing Law

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 11.12

  	
   

  	
  Submission to Jurisdiction; Service of Process

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 11.13

  	
   

  	
  Waiver of Jury Trial

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 11.14

  	
   

  	
  Marshaling; Payments Set Aside

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 11.15

  	
   

  	
  Section Titles

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 11.16

  	
   

  	
  Execution in Counterparts

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 11.17

  	
   

  	
  Entire Agreement

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 11.18

  	
   

  	
  Confidentiality

  	
   

  

 

 

Schedules

 

	
  Schedule I

  	
  –

  	
  Commitments

  
	
  Schedule II

  	
  –

  	
  Applicable Commitment
  Fee Rate and Applicable Margin

  
	
  Schedule 2.4

  	
  –

  	
  Existing Letters of
  Credit

  
	
  Schedule 4.2

  	
  –

  	
  Consents

  
	
  Schedule 4.3

  	
  –

  	
  Ownership of
  Subsidiaries

  
	
  Schedule 4.7

  	
  –

  	
  Litigation

  
	
  Schedule 4.15

  	
  –

  	
  Labor Matters

  
	
  Schedule 4.17

  	
  –

  	
  Environmental Matters

  
	
  Schedule 4.19

  	
  –

  	
  Real
  Property

  
	
  Schedule 8.1

  	
  –

  	
  Existing Indebtedness

  
	
  Schedule 8.2

  	
  –

  	
  Existing Liens

  
	
  Schedule 8.3

  	
  –

  	
  Existing Investments

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXHIBITS

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  –

  	
  Form of
  Assignment and Acceptance

  
	
  Exhibit B

  	
  –

  	
  Form of
  Promissory Note

  
	
  Exhibit C

  	
  –

  	
  Form of
  Notice of Borrowing

  
	
  Exhibit D

  	
  –

  	
  Form of
  Swing Loan Request

  
	
  Exhibit E

  	
  –

  	
  Form of
  Letter of Credit Request

  
	
  Exhibit F

  	
  –

  	
  Form of
  Notice of Conversion or Continuation

  
	
  Exhibit G

  	
  –

  	
  Form of
  Opinion of Counsel for the Loan Parties

  
	
  Exhibit H

  	
  –

  	
  Guaranty

  
	
  Exhibit I

  	
  –

  	
  Pledge and
  Security Agreement

  

 

 

THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 14,
2005, among WASHINGTON GROUP INTERNATIONAL, INC., a Delaware corporation (the “Borrower”), the Lenders (as defined below), the Issuers (as
defined below) and CREDIT SUISSE (formerly known as Credit Suisse First Boston)
(“Credit Suisse”), as administrative agent
for the Lenders and the Issuers (in such capacity, the “Administrative
Agent”), amends and restates in its entirety the Amended and
Restated Credit Agreement dated as of October 9, 2003 (the “Original Restatement Date”), among the Borrower, the lenders
and issuers from time to time party thereto, Credit Suisse, Cayman Islands
Branch (formerly known as Credit Suisse First Boston), as administrative agent
for such lenders and issuers, LaSalle Bank National Association, as
documentation agent, and Ableco Finance LLC, as syndication agent (the “Existing Credit Agreement”).

 

W I T N E
S S E T H:

 

WHEREAS, the Loan Parties have requested that the Administrative Agent,
the Lenders and the Issuers amend and restate the Existing Credit Agreement;
and

 

WHEREAS, (a) this Agreement shall amend and restate the Existing
Credit Agreement in its entirety as of the Effective Date (as defined below) on
the terms and subject to the conditions set forth herein, (b) this
Agreement shall not constitute a novation of the obligations and liabilities
existing under the Existing Credit Agreement or evidence payment of all or any
of such obligations and liabilities and (c) from and after the Effective
Date, the Existing Credit Agreement shall be of no further force or effect,
except to (i) evidence the Obligations (as defined therein) incurred, (ii) the
representations and warranties made and (iii) the actions or omissions
performed, or required to be performed, thereunder prior to the Effective Date;
and

 

NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS

 

Section 1.1            Defined
Terms

 

As used in this Agreement, the following terms have the following
meanings (such meanings to be equally applicable to both the singular and
plural forms of the terms defined):

 

“Administrative Agent” has the meaning
specified in the preamble to this Agreement or any successor thereto pursuant
to Section 10.6 (Successor Administrative Agent).

 

“Affected Lender” has the meaning
specified in Section 2.17 (Substitution of Lenders).

 

“Affiliate” means, with respect to any
Person, any other Person, directly or indirectly, controlling or that is
controlled by or is under common control with such Person, each officer,
director or general partner of such Person, and each Person that is the
beneficial owner of 10% or more of any class of Voting Stock of such
Person.  For the purposes of this
definition,

 

 

“control” means the possession of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise.

 

“Agents” means the Administrative Agent,
the Documentation Agent and the Co-Syndication Agents.

 

“Agreement” means this Second Amended and
Restated Credit Agreement, as it may be amended, restated, supplemented or
otherwise modified from time to time.

 

“Alternative Currency” means any lawful
currency (other than Dollars) of any of the G-10 Countries that is freely
transferable into Dollars (or any other currency acceptable to the
Administrative Agent in its sole discretion).

 

“Amendment Agreement” means the Amendment
Agreement dated as of June 14, 2005, effecting, among other things,
the amendment and restatement of the Existing Credit Agreement.

 

“Applicable Commitment Fee Rate” means a
rate per annum equal to the rate set forth on
Schedule II for the applicable type
of Facility and the then highest applicable ratings category for the Borrower’s
senior secured Indebtedness based on the ratings issued by S&P and Moody’s.

 

“Applicable Lending Office” means, with
respect to each Lender, its Domestic Lending Office in the case of a Base Rate
Loan, and its Eurodollar Lending Office in the case of a Eurodollar Rate Loan.

 

“Applicable Margin” means, as of any date
of determination, a rate per annum equal
to the rate set forth on Schedule II
for the then highest applicable ratings category for the Borrower’s senior
secured Indebtedness based on the ratings issued by S&P and Moody’s.

 

“Approved Additional Surety Facility”
means (a) any surety facility whose terms and conditions are, in the
aggregate, no less favorable to the Loan Parties than those of the Surety
Facility; provided, however,
that the aggregate amount of cash or Cash Equivalents securing all such
Approved Additional Surety Facilities, together with the Surety Facility, shall
not exceed $100,000,000 at any time, and (b) any other surety facility
whose terms and conditions are in form and substance reasonably satisfactory to
the Administrative Agent, in each case, a copy of which (together with all
material documents and instruments executed in respect thereof) certified as
true, correct and complete by the Borrower has been received by the
Administrative Agent.

 

“Approved Fund” means any Fund that is
advised or managed by (a) a Lender or a Tranche B Investor, (b) an
Affiliate of a Lender or a Tranche B Investor or (c) an entity or
Affiliate of an entity that administers or manages a Lender or a Tranche B
Investor.

 

“Approved Surety Bond” means any
“Standalone Bond” under and as defined in the Surety Facility.

 

“Asset Sale” has the meaning specified in
Section 8.4  (Sale of
Assets).

 

2

 

“Assignment and Acceptance” means an
assignment and acceptance entered into by a Lender and an Eligible Assignee,
and accepted by the Administrative Agent, in substantially the form of Exhibit A  (Form of Assignment
and Acceptance).

 

“Available Credit” means, at any time, an
amount equal to (a) the aggregate then effective Commitments minus (b) the aggregate Outstandings at such time.

 

“Base Rate” means, for any period, a
fluctuating interest rate per annum as
shall be in effect from time to time, which rate per annum
shall be equal at all times to the greater of the following:

 

(a)           the
Prime Rate; and

 

(b)           0.5%
per annum  plus
the Federal Funds Rate.

 

If the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Rate for any reason, including the inability of the Administrative Agent
to obtain sufficient quotations in accordance with the terms of the definition
thereof, the “Base Rate” shall be determined
without regard to clause (b) above until
the circumstances giving rise to such inability no longer exist.  Any change in the Base Rate due to a change
in the Federal Funds Rate or the Prime Rate shall be effective on the effective
date of such change in the Federal Funds Rate or the Prime Rate, respectively.

 

“Base Rate Loan” means any Loan during
any period in which it bears interest based on the Base Rate.

 

“Blockage Notice” has the meaning
specified in each Deposit Account Control Agreement.

 

“BNFL” means BNFL USA Group Inc. or any
of its Wholly-Owned Subsidiaries.

 

“Borrower’s Accountants” means Deloitte &
Touche or other independent
nationally-recognized public accountants reasonably acceptable to the
Administrative Agent.

 

“Borrowing” means a borrowing consisting
of Revolving Loans made on the same day by the Lenders ratably according to
their respective Commitments.

 

“Business Day” means a day of the year on
which banks are not required or authorized to close in New York City and, if
the applicable Business Day relates to notices, determinations, fundings and payments
in connection with the Eurodollar Rate or any Eurodollar Rate Loans, a day on
which dealings in Dollar deposits are also carried on in the London interbank
market.

 

“Capital Expenditures” means, with
respect to any Person for any period, (a) the aggregate of amounts that
would be reflected as additions to property, plant or equipment on a
consolidated balance sheet of such Person and its Subsidiaries prepared in
conformity with GAAP, excluding interest capitalized during construction less (b) the aggregate of such amounts used to acquire
assets useful in the Borrower’s business (x) in connection with a
Reinvestment Event as permitted under Section 2.9
(Mandatory Prepayments) or (y) to the extent such amounts arose
from a sale or disposition of equipment described in Section 8.4(c) (Sale
of Assets) of the Credit Agreement; provided,
however, that the Capital Expenditures of the Borrower shall (i)

 

3

 

include the Capital Expenditures of Permitted Joint Ventures and
non-Wholly-Owned Subsidiaries only to the extent of the aggregate direct and
indirect interest therein of the Borrower, any other Loan Party and any
Wholly-Owned Subsidiary of any of them and (ii) exclude Capital
Expenditures to the extent financed with the proceeds of Indebtedness permitted
to be incurred hereunder (other than the Loans).

 

“Capital Lease” means, with respect to
any Person, any lease (or other arrangement conveying the right to use) of
property by such Person as lessee that would be accounted for as a capital
lease on a balance sheet of such Person prepared in conformity with GAAP.

 

“Capital Lease Obligations” means, with
respect to any Person, the capitalized amount of all obligations of such Person
or any of its Subsidiaries under Capital Leases, as determined on a
consolidated basis in conformity with GAAP.

 

“Cash Collateral Account” has the meaning
specified in the Pledge and Security Agreement.

 

“Cash Equivalents” means (a) securities
issued or fully guaranteed or insured by the United States government or any
agency thereof, (b) certificates of deposit, eurodollar time deposits,
overnight bank deposits and bankers’ acceptances of any Lender, Tranche B
Investor or any commercial bank organized under the laws of the United States,
any state thereof, the District of Columbia, any foreign bank, or its branches
or agencies (fully protected against currency fluctuations), (c) commercial
paper, (d) municipal issued debt securities, including notes and bonds, (e) shares
of any money market fund that has net assets of not less than $500,000,000, (f) investments
in so-called “auction rate” securities with reset dates not later than
90 days after acquisition thereof, (g) fully collateralized
repurchase agreements and (h) demand deposit accounts maintained in the
ordinary course of business; provided, however,
that (i) all obligations of the type specified in clauses (a), (b), (c),
(d), (e), (f) or (g) above shall have a minimum rating of A-1 or AAA
by S&P or P-1 or Aaa by Moody’s, in each case at the time of acquisition
thereof, and (ii) the maturities of all obligations of the type described
in clauses (a), (b), (c) and (d) above shall not exceed one year
from the date of acquisition thereof.

 

“Cash Interest Expense” means, with
respect to any Person for any period, the Interest Expense of such Person for
such period less, to the extent included in the
calculation of Interest Expense of such Person for such period, (a) the
amount of debt discount and debt issuance costs amortized, (b) charges
relating to write-ups or write-downs in the book or carrying value of existing
Financial Covenant Debt and (c) interest payable in evidences of
Indebtedness or by addition to the principal of the related Indebtedness.

 

“Change of Control” means any of the
following: (a) any person other than Dennis Washington or his heirs or
estate, or any trust or other person in which his heirs or estate constitute
100% in interest of the owners or beneficiaries, or any group of persons
(within the meaning of the Securities Exchange Act of 1934, as amended) other
than any group including Dennis Washington or his heirs or estate, or any trust
or other person in which his heirs or estate constitute 100% in interest of the
owners or beneficiaries, shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended) of 35% or
more of the issued and outstanding Voting Stock of the Borrower on a
fully-diluted basis or (b) during any period of twelve consecutive
calendar months, individuals who at the beginning of such period

 

4

 

constituted the board of directors of the Borrower (together with any
new directors whose election by the board of directors of the Borrower or whose
nomination for election by the stockholders of the Borrower was approved by a
vote of at least a majority of the directors then still in office who either
were directors at the beginning of such period or whose elections or nomination
for election was previously so approved) cease for any reason other than death
or disability to constitute a majority of the directors then in office.

 

“Class 7 Creditors” means holders of
“Allowed Claims” in “Class 7”
under and as each of these terms are defined in the Plan of Reorganization.

 

“Class 7 Warrant Agreement” means
the Warrant Agreement, dated January 24, 2002, among the Class 7
Creditors and the Borrower for the issuance of the Class 7 Warrants.

 

“Class 7 Warrant” means warrants
issued to the Class 7 Creditors pursuant to, and subject to the terms and
conditions set forth in, the Class 7 Warrant Agreement and the Plan of
Reorganization.

 

“Code” means the Internal Revenue Code of
1986 (or any successor legislation thereto).

 

“Collateral” means all property and
interests in property and proceeds thereof now owned or hereafter acquired by
any Loan Party in or upon which a Lien is granted under any Collateral
Document.

 

“Collateral Documents” means the Pledge
and Security Agreement, the Mortgages, the Surety Intercreditor Agreement, the
Deposit Account Control Agreements and any other document executed and
delivered by a Loan Party granting a Lien on any of its property to secure
payment of the Secured Obligations.

 

“Commitment” means, with respect to each
Lender, the commitment of such Lender to make Revolving Loans and acquire
interests in other Outstandings in the aggregate principal amount outstanding
not to exceed the amount set forth opposite such Lender’s name on Schedule I  (Commitments)
under the caption “Commitment,” as
amended to reflect each Assignment and Acceptance executed in accordance
herewith, and as such amount may be reduced pursuant to this Agreement.  “Commitments”
means the aggregate of such commitments for all Lenders.

 

“Commitment Fee” has the meaning
specified in Section 2.12(a) (Fees).

 

“Compliance Certificate” has the meaning
specified in Section 6.1(c) (Financial
Statements).

 

“Consolidated Net Income” means, for any
period, the net income (or loss) of the Borrower and its Subsidiaries for such
period, determined on a consolidated basis in conformity with GAAP; provided, however, that
in determining such net income (or loss):

 

(a)           any
net income (or loss) in respect of the Specified Property shall be included to
the extent incurred or accrued prior to the effective date of the sale thereof;

 

(b)           the
net income (or loss) of any Subsidiary of the Borrower or Permitted Joint
Venture (other than the MIBRAG Subsidiaries) having, directly or indirectly,

 

5

 

created, incurred,
assumed or otherwise becoming or remaining directly or indirectly liable with
respect to any Non-Recourse Indebtedness permitted under Section 8.1(g) (Indebtedness)
shall be included only to the extent of the amount of dividend or distributions
paid, whether directly or indirectly, to any Loan Party;

 

(c)           the
net income of any Subsidiary of the Borrower that is not a Permitted Joint
Venture and in which the Borrower or one of its Subsidiaries has a joint
interest with a third party (which interest does not cause the net income of
such other Person to be consolidated into the net income of such Person in
accordance with GAAP) shall be included only to the extent of the amount of dividends
or distributions paid to such Person or Subsidiary;

 

(d)           extraordinary
gains and losses shall be excluded; and

 

(e)           any
one-time increase or decrease to net income that is required to be recorded
because of the adoption of new accounting policies, practices or standards
required by GAAP shall also be excluded.

 

“Constituent Documents” means, with
respect to any Person, (a) the articles of incorporation, certificate of
incorporation or certificate of formation (or the equivalent organizational
documents) of such Person, (b) the by-laws, operating agreement (or the
equivalent governing documents) of such Person and (c) any document
setting forth the manner of election and duties of the directors or managing
members of such Person (if any) and the designation, amount or relative rights,
limitations and preferences of any class or series of such Person’s Stock.

 

“Contaminant” means any material,
substance or waste that is classified, regulated or otherwise characterized
under any Environmental Law as hazardous, toxic, a contaminant or a pollutant
or by other words of similar meaning or regulatory effect, including any
petroleum or petroleum-derived substance or waste, asbestos and polychlorinated
biphenyls.

 

“Continuing Tranche B Investor” has the
meaning specified in Section 2.1(e)(i) (The
Commitments; Credit-Linked Deposit).

 

“Contractual Obligation” of any Person
means any obligation, agreement, undertaking or similar provision of any
Security issued by such Person or of any agreement, undertaking, contract,
lease, indenture, mortgage, deed of trust or other instrument (excluding the
Loan Documents) to which such Person is a party or by which it or any of its
property is bound or to which any of its property is subject.

 

“Control Account Agreement” has the
meaning specified in the Pledge and Security Agreement.

 

“Co-Syndication Agents” means BNP Paribas
and LaSalle Bank National Association.

 

“Credit-Linked Deposit” means, with
respect to each Tranche B Investor at any time, amounts actually on deposit in the
Credit-Linked Deposit Account credited to such Tranche B Investor’s Sub-Account
at such time.

 

6

 

“Credit-Linked Deposit Account” means the
account established pursuant to Section 2.1(d) (The
Commitments; Credit-Linked Deposit Account) by the Administrative
Agent, under its sole and exclusive dominion and control, maintained at the
office of Credit Suisse, New York Branch, Eleven Madison Avenue, New York, New
York  10010, designated as the “Washington
Group Credit-Linked Deposit Account” that shall be used solely to hold the
Credit-Linked Deposits.

 

“Credit-Linked Deposit Return” has the
meaning specified in Section 2.1(g) (The
Commitments; Credit-Linked Deposit Account).

 

“Credit Suisse” has the meaning specified
in the preamble to this Agreement.

 

“Customary Permitted Liens” means, with
respect to any Person, any of the following Liens:

 

(a)           Liens
with respect to the payment of taxes, assessments or governmental charges in
each case that are not yet due or that are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves or other
appropriate provisions are being maintained to the extent required by GAAP;

 

(b)           Liens
of landlords arising by statute, inchoate, statutory or construction liens and
liens of suppliers, mechanics, carriers, materialmen, warehousemen, producers,
operators or workmen and other liens imposed by law created in the ordinary
course of business for amounts not yet due or that are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves or
other appropriate provisions are being maintained to the extent required by
GAAP;

 

(c)           liens,
pledges or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance or other types of social security
benefits, taxes, assessments, statutory obligations or other similar charges or
to secure the performance of bids, tenders, sales, leases, contracts (other
than for the repayment of borrowed money) or in connection with surety, appeal,
customs or performance bonds;

 

(d)           encumbrances
arising by reason of zoning restrictions, easements, licenses, reservations,
covenants, rights-of-way, utility easements, building restrictions and other
similar encumbrances on the use of Real Property not materially detracting from
the value of such Real Property or not materially interfering with the ordinary
conduct of the business conducted and proposed to be conducted at such Real
Property;

 

(e)           encumbrances
arising under leases or subleases of Real Property that do not, in the
aggregate, materially detract from the value of such Real Property or interfere
with the ordinary conduct of the business conducted and proposed to be
conducted at such Real Property; and

 

(f)            financing
statements with respect to a lessor’s rights in and to personal property leased
to such Person in the ordinary course of such Person’s business.

 

“Default” means any event that, with the
passing of time or the giving of notice or both, would become an Event of
Default.

 

7

 

“Dennis Washington Option Agreement”
means the Option Agreement, dated January 24, 2002, as amended, by and
between Dennis Washington and the Borrower for the issuance of the Dennis
Washington Options.

 

“Dennis Washington Options” means options
issued to Dennis Washington (or his heirs or estate, or any trust or other
person in which his heirs or estate constitute 100% in interest of the owners
or beneficiaries, or any wholly owned Affiliate designated as the recipient of
the Dennis Washington Options in accordance with the Dennis Washington Option
Agreement or other Persons approved by the Administrative Agent) pursuant to,
and subject to the terms and conditions set forth in, the Dennis Washington
Option Agreement.

 

“Deposit Account” has the meaning
specified in the Pledge and Security Agreement.

 

“Deposit Account Bank” has the meaning
specified in the Pledge and Security Agreement.

 

“Deposit Account Control Agreement” has
the meaning specified in the Pledge and Security Agreement.

 

“Disqualified Stock” means with respect
to any Person, any Stock that, by its terms (or by the terms of any Security
into which it is convertible or for which it is exchangeable), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is exchangeable for Indebtedness of
such Person, or is redeemable at the option of the holder thereof, in whole or
in part, on or prior to the Scheduled Termination Date.

 

“Documentation Agent” means United
Overseas Bank.

 

“Documentary Letter of Credit” means any
Letter of Credit that is drawable upon presentation of documents evidencing the
sale or shipment of goods purchased by the Borrower or any of its Subsidiaries
in the ordinary course of its business.

 

“Dollar Equivalent” means with respect to
any Alternative Currency at the time of determination thereof, the equivalent
of such currency in Dollars determined by using the rate of exchange quoted by
Credit Suisse in New York, New York at 11:00 a.m. (New York time) on the
date of determination to prime banks in New York for the spot purchase in the
New York foreign exchange market of such amount of Dollars with such Alternative
Currency.

 

“Dollars” and the sign “$” each mean the lawful money of the United States of
America.

 

“Domestic Lending Office” means, with
respect to any Lender, the office of such Lender specified as its “Domestic Lending Office” from time to time to the Borrower
and the Administrative Agent.

 

“Domestic Subsidiary” means any
Subsidiary of the Borrower organized under the laws of any state of the United
States of America or the District of Columbia.

 

“EBITDA” means, for any period, (a) Consolidated
Net Income for such period plus (b) the
sum of, in each case to the extent deducted in the calculation of such
Consolidated

 

8

 

Net Income but without duplication, (i) any provision for income
taxes, (ii) Interest Expense, (iii) depreciation, depletion and
amortization of intangibles or financing or acquisition costs, (iv) any
aggregate net loss from the sale, exchange or other disposition of business
units by the Borrower or its Subsidiaries and (v) all other non-cash
charges (including impairment of intangible assets and goodwill) and non-cash
losses for such period (excluding any non-cash item to the extent it represents
an accrual of, or reserve for, cash disbursements for any subsequent period),
including the amount of any compensation deduction as the result of any grant
(or conditional grant) of Stock or Stock Equivalents to employees, officers,
directors or consultants minus (c) the
sum of, in each case to the extent included in the calculation of such Consolidated
Net Income but without duplication, (i) any credit for income tax, (ii) non-cash
interest income, (iii) any aggregate net gain from the sale, exchange or
other disposition of business units by the Borrower or any of its Subsidiaries
and (iv) any other non-cash gains or other items which have been added in
determining Consolidated Net Income, including any reversal of a change
referred to in clause (b)(iv) above
by reason of a decrease in the value of any Stock or Stock Equivalent.

 

“Effective Date” has the meaning
specified in Section 3.1 (Conditions Precedent to
Effectiveness).

 

“Eligible Assignee” means (a) a
Lender, Tranche B Investor or any Affiliate or Approved Fund of such
Lender or Tranche B Investor, (b) a commercial bank having total
assets in excess of $5,000,000,000, (c) a finance company, insurance
company or any other financial institution or fund, in each case reasonably
acceptable to the Administrative Agent and regularly engaged in making,
purchasing or investing in loans and having a net worth, determined in
accordance with GAAP, in excess of $250,000,000 or, to the extent net worth is
less than such amount, a finance company, insurance company, other financial
institution or fund, reasonably acceptable to the Administrative Agent and the
Borrower or (d) a savings and loan association or savings bank organized
under the laws of the United States or any State thereof having a net worth,
determined in accordance with GAAP, in excess of $250,000,000.

 

“Eligible Line of Business” means the general
nature of the business and activities engaged in by the Borrower and its
Subsidiaries on the Effective Date and activities reasonably related thereto.

 

“Environmental Laws” means all applicable
Requirements of Law now or hereafter in effect and as amended or supplemented
from time to time, relating to pollution or the regulation and protection of
human health, safety, the environment or natural resources, including the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended (42 U.S.C. § 9601 et seq.); the
Hazardous Material Transportation Act, as amended (49 U.S.C. § 1801 et seq.); the Federal Insecticide, Fungicide, and
Rodenticide Act, as amended (7 U.S.C. § 136 et seq.);
the Resource Conservation and Recovery Act, as amended (42 U.S.C. § 6901 et seq.); the Toxic Substance Control Act, as amended (15
U.S.C. § 2601 et seq.); the
Clean Air Act, as amended (42 U.S.C. § 7401 et seq.);
the Federal Water Pollution Control Act, as amended (33 U.S.C. § 1251 et seq.); the Occupational Safety and Health Act, as
amended (29 U.S.C. § 651 et seq.); the
Safe Drinking Water Act, as amended (42 U.S.C. § 300f et seq.);
and each of their state and local counterparts or equivalents.

 

“Environmental Liabilities and Costs”
means, with respect to any Person, all liabilities, obligations,
responsibilities, Remedial Actions, losses, damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all fees,
disbursements and expenses of counsel, experts and consultants and costs of
investigation and feasibility studies),

 

9

 

fines, penalties, sanctions and interest incurred as a result of any
claim or demand by any other Person, whether based in contract, tort, implied
or express warranty, strict liability, criminal or civil statute and arising
under any Environmental Law, Permit, order or agreement with any Governmental
Authority or other Person, in each case relating to and resulting from the
past, present or future operations of, or ownership of property by, such Person
or any of its Subsidiaries.

 

“Environmental Lien” means any Lien in
favor of any Governmental Authority pursuant to any Environmental Law.

 

“Equity Issuance” means the issue or sale
by the Borrower or any Subsidiary of the Borrower of any Stock of such Person
to any Person other than a Loan Party and, in the case of any issuance by any
Permitted Joint Venture that is a Subsidiary, other than any Person that
becomes a holder of Stock of such Permitted Joint Venture in connection with
the formation thereof or that is a holder of Stock of such Joint Venture prior
to such issuance, but only to the extent such issuance is made in proportion to
such prior holding, in each case except for any such issuance of Stock of the
Borrower (a) to the extent the net proceeds thereof are used substantially
concurrently to finance a Permitted Acquisition or (b) occurring in the
ordinary course of business to any director, member of management or employee
of the Borrower or its Subsidiaries and any issuance of Voting Stock pursuant
to the Warrants or the Stock Options, and subject to the terms and conditions
set forth therein and in the Warrant Agreements or, as the case may be, the
applicable Stock Option Plan.

 

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

 

“ERISA Affiliate” means any trade or
business (whether or not incorporated) under common control or treated as a
single employer with the Borrower or any of its Subsidiaries within the meaning
of Section 414(b), (c), (m) or (o) of the Code.

 

“ERISA Event” means (a) a reportable
event described in Section 4043(b) or 4043(c)(1), (3), (5), (6), (8) or
(9) of ERISA with respect to a Title IV Plan, (b) the withdrawal
of the Borrower, any of its Subsidiaries or any ERISA Affiliate from a
Title IV Plan subject to Section 4063 of ERISA during a plan year in
which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA, (c) the complete or partial withdrawal of the Borrower, any of its
Subsidiaries or any ERISA Affiliate from any Multiemployer Plan where the
Withdrawal Liability exceeds $1,000,000 (individually or in the aggregate), (d) notice
of reorganization or insolvency of a Multiemployer Plan is received by the
Borrower, any of its Subsidiaries or any ERISA Affiliate, (e) the filing
of a notice of intent to terminate a Title IV Plan under Section 4041(c) of
ERISA or the treatment of a plan amendment as a termination under Section 4041(e) of
ERISA, where such termination constitutes a “distress
termination” under Section 4041(c) of ERISA, (f) the
institution of proceedings to terminate a Title IV Plan by the PBGC, (g) the
failure without an appropriate waiver from the IRS to make any required
contribution to a Title IV Plan or Multiemployer Plan, (h) the
imposition of a lien under Section 412 of the Code or Section 302 of
ERISA on the Borrower or any of its Subsidiaries or (i) any other event or
condition that might reasonably be expected to constitute grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Title IV Plan or Multiemployer Plan or the imposition of any liability
under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA.

 

10

 

“Eurocurrency Liabilities” has the
meaning assigned to that term in Regulation D of the Federal Reserve Board.

 

“Eurodollar Lending Office” means, with
respect to any Lender, the office of such Lender specified as its “Eurodollar Lending Office” from time to time to the Borrower
and the Administrative Agent.

 

“Eurodollar Rate” means, with respect to
any Eurodollar Rate Loan for any Interest Period, the rate per annum
determined by the Administrative Agent at approximately 11:00 a.m. (London
time) on the date that is two Business Days prior to the beginning of such
Interest Period by reference to the British Bankers’ Association Interest
Settlement Rates for deposits in Dollars (as set forth by any service selected
by the Administrative Agent which has been nominated by the British Bankers’
Association as an authorized information vendor for the purpose of displaying
such rates) for a period equal to such Interest Period; provided,
however, that, to the extent that an
interest rate is not ascertainable pursuant to the foregoing provisions of this
definition “Eurodollar Rate” shall be the interest
rate per annum determined by the
Administrative Agent to be the average of the rates per annum
at which deposits in Dollars are offered for such Interest Period to major
banks in the London interbank market in London, England by the Administrative
Agent at approximately 11:00 a.m. (London time) on the date which is two
Business Days prior to the beginning of such Interest Period.  Each determination by the Administrative
Agent pursuant to this definition shall be conclusive absent manifest error.

 

“Eurodollar Rate Loan” means any Loan
that, for an Interest Period, bears interest based on the Eurodollar Rate.

 

“Event of Default” has the meaning
specified in Section 9.1  (Events of Default).

 

“Existing Credit Agreement” has the
meaning ascribed to such term in the preamble to this Agreement.

 

“Existing Letters of Credit” means each
letter of credit outstanding as a “Letter of Credit” as of the Effective Date
under the Existing Credit Agreement, each of which is set forth on Schedule 2.4.

 

“Facilities” means the Tranche A
Facility and the Tranche B Facility and the provisions herein related to
the Revolving Loans, Swing Loans and Letters of Credit.

 

“Fair Market Value” means (a) with
respect to any asset or group of assets (other than a marketable Security) at
any date, the value of the consideration obtainable in a sale of such asset at
such date assuming a sale by a willing seller to a willing purchaser dealing at
arm’s length and arranged in an orderly manner over a reasonable period of time
having regard to the nature and characteristics of such asset or, if such asset
shall have been the subject of a relatively contemporaneous appraisal by an
independent third party appraiser, the basic assumptions underlying which have
not materially changed since its date, the value set forth in such appraisal
and (b) with respect to any marketable Security at any date, the closing
sale price of such Security on the Business Day next preceding such date, as
appearing in any published list of any national securities exchange or the
NASDAQ Stock Market or, if there is no such closing sale price of such
Security, the final price for the purchase of such Security at face value
quoted on such business day by a financial institution of recognized standing
regularly dealing in securities of such type reasonably acceptable to the
Administrative Agent.

 

11

 

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

 

“Federal Reserve Board” means the Board
of Governors of the United States Federal Reserve System, or any successor
thereto.

 

“Fee Letter” means the Amended and
Restated Fee Letter, dated as of October 7, 2003, addressed to the
Borrower from Credit Suisse and accepted by the Borrower as of October 7,
2003 and the Fee Letter, dated as of March 16, 2004, addressed to the
Borrower from Credit Suisse and accepted by the Borrower as of March 16,
2004, in each case, with respect to certain fees to be paid from time to time
to Credit Suisse, the Lenders and the Tranche B Investors.

 

“Financial Covenant Debt” of any Person
means Indebtedness of the type specified in clauses (a),
(b), (c), (d), (e) and (f) of the definition of “Indebtedness”;
provided, however,
that Financial Covenant Debt shall not include reimbursement or other
obligations with respect to undrawn letters of credit that are not issued under
any Loan Document, and any surety bonds and performance bonds issued under any
Surety Facility or Approved Additional Surety Facility.

 

“Financial Statements” means the
financial statements of the Borrower and its Subsidiaries delivered in
accordance with Section 3.1(a) (Conditions
Precedent to Effectiveness), Section 4.4
(Financial Statements) or 6.1 (Financial
Statements).

 

“Fiscal Quarter” means each fiscal
quarter of the Borrower, which are each of the three-month periods ending on or
about March 31, June 30, September 30 and December 31.

 

“Fiscal Year” means the fiscal year of
the Borrower, which is the twelve-month period ending on or about December 31.

 

“Fixed Charges” means, for any Person for
any period, the sum, without duplication, of (a) the Cash Interest Expense
of such Person for such period, (b) the principal amount of Financial
Covenant Debt of such Person and each of its Subsidiaries determined on a
consolidated basis in conformity with GAAP that is scheduled to be paid during
such period, (c) the aggregate amount of cash taxes paid by such Person
and its Subsidiaries during such period and (d) Capital Expenditures
during such period, all as determined on a consolidated basis in accordance with
GAAP (except, in respect of Capital Expenditures, as otherwise expressly
provided in the definition thereof).

 

“Fixed Charge Coverage Ratio” means, with
respect to any Person for any period, the ratio of (a) EBITDA of such
Person for such period to (b) the Fixed Charges of such Person for such
period.

 

12

 

“Foreign Ownership Control or Influence”
has the meaning given to such phrase in the Federal National Industrial
Security Program Operating Manual and any successor documentation or program
thereto.

 

“Foreign Subsidiary” means any Subsidiary
that is not a Domestic Subsidiary.

 

“Fronting Fee” has the meaning specified
in Section 2.12(c) (Fees).

 

“Fronting Lender” means Credit Suisse or
any other Person that, with the approval of the Tranche B Investors and
the Administrative Agent in accordance with Section 10.7
(Successor Fronting Lender), becomes the Fronting Lender hereunder.

 

“Fund” means any Person (other than a
natural Person) that is or will be engaged in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of credit in the
ordinary course of its business.

 

“GAAP” means generally accepted
accounting principles in the United States of America as in effect from time to
time set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and the
statements and pronouncements of the Financial Accounting Standards Board, or
in such other statements by such other entity as may be in general use by
significant segments of the accounting profession, that are applicable to the
circumstances as of the date of determination.

 

“G-10 Countries” means Belgium, Canada,
France, Germany, Italy, Japan, the Netherlands, Sweden, Switzerland, the United
Kingdom and the United States.

 

“Governmental Authority” means any
nation, sovereign or government, any state or other political subdivision
thereof and any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government, including any
central bank.

 

“Government Contract” has the meaning
specified in the Pledge and Security Agreement.

 

“Group” means each of the combined
business units of the Borrower and its Subsidiaries commonly identified as “groups” by the Borrower in financial statements and
including those combined business units of the Borrower and its Subsidiaries
identified prior to the Effective Date in the Financial Statements as “Defense”, “Energy and Environment”,
“Industrial Process”, “Infrastructure”, “Mining” and “Power”.

 

“Guarantor” means each Person party to or
that becomes party to the Guaranty.

 

“Guaranty” means the Guaranty dated as of
January 24, 2002, a copy of which is attached hereto as Exhibit H  (Guaranty),
executed by the Guarantors and the Administrative Agent.

 

“Guaranty Obligation” means, as applied
to any Person, any direct or indirect liability, contingent or otherwise, of
such Person with respect to any Indebtedness of another Person, if the purpose
or intent of such Person in incurring the Guaranty Obligation is to provide
assurance to the obligee of such Indebtedness that such Indebtedness will be
paid or discharged, or that any agreement relating thereto will be complied with,
or that any holder of such Indebtedness will be protected (in whole or in part)
against loss in respect thereof, including

 

13

 

(a) the direct or indirect guaranty, endorsement (other than for
collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of Indebtedness
of another Person and (b) any liability of such Person for Indebtedness of
another Person through any agreement (contingent or otherwise) (i) to
purchase, repurchase or otherwise acquire such Indebtedness or any security
therefor, or to provide funds for the payment or discharge of such Indebtedness
(whether in the form of a loan, advance, stock purchase, capital contribution
or otherwise), (ii) to maintain the solvency or any balance sheet item,
level of income or financial condition of another Person, (iii) to make
take-or-pay or similar payments, if required, regardless of non-performance by
any other party or parties to an agreement, (iv) to purchase, sell or
lease (as lessor or lessee) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such
Indebtedness or to assure the holder of such Indebtedness against loss or (v) to
supply funds to, or in any other manner invest in, such other Person (including
to pay for property or services irrespective of whether such property is
received or such services are rendered), if in the case of any agreement
described under clause (b)(i), (ii), (iii), (iv) or (v) above
the primary purpose or intent thereof is to provide assurance to the obligee of
Indebtedness of any other Person that such Indebtedness will be paid or
discharged, or that any agreement relating thereto will be complied with, or
that any holder of such Indebtedness will be protected (in whole or in part)
against loss in respect thereof.  The
amount of any Guaranty Obligation shall be equal to the amount of the
Indebtedness so guaranteed or otherwise supported or, if such amount is not
stated or otherwise determinable, the maximum reasonable anticipated liability
in respect thereof as determined by the guaranteeing Person in good faith.

 

“Hedging Contracts” means all Interest
Rate Contracts, foreign exchange contracts, currency swap or option agreements,
forward contracts, commodity swap, purchase or option agreements, other
commodity price hedging arrangements, and all other similar agreements or
arrangements designed to alter the risks of any Person arising from fluctuations
in interest rates, currency values or commodity prices.

 

“Indebtedness” of any Person means
without duplication (a) all indebtedness of such Person for borrowed
money, (b) all obligations of such Person evidenced by notes, bonds,
debentures or similar instruments, (c) all reimbursement and all
obligations with respect to letters of credit, bankers’ acceptances, surety
bonds and performance bonds, whether or not matured, other than those securing
only trade payables or non-financial performance obligations, (d) all
indebtedness for the deferred purchase price of property or services, other
than trade payables incurred in the ordinary course of business that are not
overdue by more than thirty days or disputed in good faith, (e) all
indebtedness of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (f) all Capital Lease Obligations of such Person, (g) all
Guaranty Obligations of such Person, (h) all obligations of such Person to
purchase, redeem, retire, defease or otherwise acquire for value any Stock or
Stock Equivalents of such Person, valued, in the case of redeemable preferred
stock, at the greater of its voluntary liquidation preference and its
involuntary liquidation preference plus accrued and unpaid dividends, (i) net
payments that such Person would have to make in the event of an early
termination on the date Indebtedness of such Person is being determined in
respect of Hedging Contracts of such Person and (j) all Indebtedness of
the type referred to above secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien upon
or in property (including accounts and general intangibles) owned by

 

14

 

such Person, even though such Person has not assumed or become liable
for the payment of such Indebtedness.

 

“Indemnified Matter” has the meaning
specified in Section 11.4 (Indemnities).

 

“Indemnitees” has the meaning specified
in Section 11.4 (Indemnities).

 

“Information Memorandum” means the Confidential
Information Memorandum, dated May 2005, in respect of the Facilities.

 

“Initial Period” has the meaning
specified in Section 2.1(g) (The Commitments;
Credit-Linked Deposit Account).

 

“Interest Coverage Ratio” means, with
respect to any Person for any period, the ratio of (a) EBITDA of such
Person for such period to (b) the Cash Interest Expense of such Person for
such period.

 

“Interest Expense” means, for any Person
for any period, (a) total interest expense of such Person and its
Subsidiaries for such period (both expensed and capitalized) accrued, accreted
or paid by such Person during such Period, as determined on a consolidated
basis in conformity with GAAP and including, in any event (without
duplication), (i) interest capitalized during construction for such period
and net costs under Interest Rate Contracts for such period, (ii) any
commitment fee (including, in the case of the Borrower or any of its
Subsidiaries, the Commitment Fee) accrued, accreted or paid by such Person
during such period and (iii) any fees and other obligations (other than
reimbursement obligations) with respect to letters of credit (including, in
respect of the Borrower or any of its Subsidiaries, the Letter of Credit
Participation Fees) and bankers’ acceptances (whether or not matured) accrued,
accreted or paid by such Person for such period and (iv) the Fronting Fee minus (b) net gains of such Person and its
Subsidiaries under Interest Rate Contracts for such period determined on a
consolidated basis in conformity with GAAP.

 

“Interest Period” means, in the case of
any Eurodollar Rate Loan, (a) initially, the period commencing on the date
such Eurodollar Rate Loan is made or on the date of conversion of a Base Rate
Loan to such Eurodollar Rate Loan and ending one, two, three or six months
thereafter (or, if deposits of such duration are available to all Tranche A
Lenders, ending nine or twelve months thereafter), as selected by the Borrower
in its Notice of Borrowing or Notice of Conversion or Continuation given to the
Administrative Agent pursuant to Section 2.2
(Borrowing Procedures) or 2.11  (Conversion/Continuation
Option), and (b) thereafter, if such Loan is continued, in
whole or in part, as a Eurodollar Rate Loan pursuant to Section 2.11
(Conversion/Continuation Option), a
period commencing on the last day of the immediately preceding Interest Period
therefor and ending one, two, three or six months thereafter, as selected by
the Borrower in its Notice of Conversion or Continuation given to the
Administrative Agent pursuant to Section 2.11
(Conversion/Continuation Option); provided, however, that
all of the foregoing provisions relating to Interest Periods in respect of
Eurodollar Rate Loans are subject to the following:

 

(i)            if
any Interest Period would otherwise end on a day that is not a Business Day,
such Interest Period shall be extended to the next succeeding Business Day,
unless the result of such extension would be to extend such Interest Period
into

 

15

 

another calendar
month, in which event such Interest Period shall end on the immediately
preceding Business Day;

 

(ii)           any
Interest Period that begins on the last 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 end on the last Business Day of a
calendar month;

 

(iii)          the
Borrower may not select any Interest Period in respect of Loans having an
aggregate principal amount of less than $5,000,000; and

 

(iv)          there
shall be outstanding at any one time no more than ten Interest Periods in the
aggregate.

 

“Interest
Rate Contracts” means all interest rate swap agreements, interest
rate cap agreements, interest rate collar agreements and interest rate
insurance.

 

“Investment” means, with respect to any
Person, (a) any purchase or other acquisition by such Person of (i) any
Security issued by, (ii) a beneficial interest in any Security issued by,
or (iii) any other equity ownership interest in, any other Person, (b) any
purchase by such Person of all or substantially all of the assets of a business
conducted by any other Person, or all or substantially all of the assets
constituting the business of a division, branch or other unit operation of any
other Person, (c) any loan, advance (other than deposits with financial
institutions available for withdrawal on demand, prepaid expenses, accounts
receivable and similar items made or incurred in the ordinary course of
business as presently conducted) or capital contribution by such Person to any
other Person, including all Indebtedness of any other Person to such Person
arising from a sale of property by such Person other than in the ordinary
course of its business, and (d) any Guaranty Obligation incurred by such
Person in respect of Indebtedness of any other Person.

 

“Inventory” has the meaning specified in
the Pledge and Security Agreement.

 

“IRS” means the Internal Revenue Service
of the United States or any successor thereto.

 

“Issue” means, with respect to any Letter
of Credit, to issue, extend the expiry of, renew or increase the maximum stated
amount (including by deleting or reducing any scheduled decrease in such
maximum stated amount) of, such Letter of Credit.  The terms “Issued”
and “Issuance” shall have a corresponding
meaning.

 

“Issuer” means each Lender or Affiliate
of a Lender that (a) is listed on the signature pages of the
Amendment Agreement as an “Issuer” or (b) hereafter
becomes an Issuer with the approval of the Administrative Agent and the
Borrower by agreeing pursuant to an agreement with and in form and substance
satisfactory to the Administrative Agent and the Borrower to be bound by the
terms hereof applicable to Issuers.

 

“Land” means plots, pieces or parcels of
land.

 

“Leases” means, with respect to any
Person, all of those leasehold estates in Real Property of such Person, as
lessee, as such may be amended, supplemented or otherwise modified from time to
time.

 

16

 

“Lender” means each financial institution
or other entity that (a) is listed on the signature pages of the
Amendment Agreement as a “Lender”
(including the Fronting Lender and each Swing Loan Lender) or (b) from
time to time becomes a party hereto by execution of an Assignment and Acceptance.

 

“Letter of Credit” means each Existing
Letter of Credit and any letter of credit issued pursuant to Section 2.4  (Letters of Credit).

 

“Letter of Credit Participation Fee” has
the meaning specified in Section 2.12(b)(ii) (Fees).

 

“Letter of Credit Obligations” means, at
any time, without duplication, the aggregate amount of all liabilities at such
time of the Borrower to all Issuers with respect to Letters of Credit, whether
or not any such liability is contingent, including the sum of (a) the
Reimbursement Obligations at such time (or, for any Reimbursement Obligations
in any Alternative Currency, the Dollar Equivalent thereto) and (b) the
Letter of Credit Undrawn Amounts at such time.

 

“Letter of Credit Reimbursement Agreement”
has the meaning specified in Section 2.4(e) (Letters
of Credit).

 

“Letter of Credit Request” has the
meaning specified in Section 2.4(c) (Letters
of Credit).

 

“Letter of Credit Undrawn Amounts” means,
at any time, the aggregate undrawn face amount of all Letters of Credit outstanding
at such time (or, for any Letter of Credit denominated in an Alternative
Currency, the Dollar Equivalent thereof).

 

“Leverage Ratio” means, with respect to
any Person as of any day, the ratio of (a) Financial Covenant Debt of such
Person and its Subsidiaries determined on a consolidated basis in accordance
with GAAP as of such day to (b)  EBITDA for such Person for the last four
full Fiscal Quarters ending prior to such day for which Financial Statements
are available.

 

“Lien” means any mortgage, deed of trust,
pledge, hypothecation, assignment, charge, deposit arrangement, encumbrance,
lien (statutory or other), security interest or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
intended to assure payment of any Indebtedness or the performance of any other
obligation, including any conditional sale or other title retention agreement,
the interest of a lessor under a Capital Lease and any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement under the UCC or comparable law of any jurisdiction
naming the owner of the asset to which such Lien relates as debtor.

 

“Loan” means any loan made by any Lender
pursuant to this Agreement, including, unless the context requires otherwise,
any Swing Loan made by the Swing Loan Lender.

 

“Loan Documents” means, collectively, the
Amendment Agreement, this Agreement, the Notes (if any), the Guaranty, each
Letter of Credit Reimbursement Agreement, each Fee Letter, each agreement
pursuant to which a Lender or an Affiliate of a Lender provides cash management
services to a Loan Party, the Collateral Documents and each certificate,

 

17

 

agreement or document executed by a Loan Party and delivered to the
Administrative Agent or any Lender in connection with or pursuant to any of the
foregoing.

 

“Loan Party” means each of the Borrower
and each Guarantor.

 

“Material Adverse Change” means a
material adverse change in any of (a) the condition (financial or
otherwise), business, performance, operations or properties of the Borrower and
the Guarantors taken as a whole, (b) the legality, validity or
enforceability of any Loan Document, (c) the perfection or priority of the
Liens granted pursuant to the Collateral Documents, (d) the ability of the
Borrower to repay the Obligations or maintain adequate bonding for the Projects
(taken as a whole) of the Loan Parties, the Subsidiaries of the Borrower or any
Permitted Joint Venture or of the other Loan Parties to perform their
respective obligations under the Loan Documents or the Surety Facility or (e) the
rights and remedies of the Administrative Agent, the Lenders, the
Tranche B Investors or the Issuers under the Loan Documents.

 

“Material Adverse Effect” means an effect
that results in or causes, or could reasonably be expected to result in or
cause, a Material Adverse Change.

 

“Material Intellectual Property” has the
meaning specified in the Pledge and Security Agreement.

 

“Material Projects” means each Project
for which, assuming full performance of the related Contractual Obligations on
the part of each Loan Party, each Affiliate thereof and each Permitted Joint
Venture, the payments to be received under such Contractual Obligations by each
Loan Party, each Affiliate thereof and Permitted Joint Venture are not less
than $5,000,000.

 

“MIBRAG Subsidiary” means each of Mibrag
B.V., a company organized and existing under the laws of The Netherlands, and
MitteldeutscheBraunkohlengesellschaft GmbH, a company organized and existing
under the laws of the Federal Republic of Germany.

 

“Moody’s” means Moody’s Investors
Services, Inc.

 

“Mortgages” means the mortgages, deeds of
trust or other real estate security documents made or required herein to be
made by the Borrower or any other Loan Party.

 

“Multiemployer Plan” means a
multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to
which the Borrower, any of its Subsidiaries or any ERISA Affiliate has any
obligation or liability, contingent or otherwise.

 

“Net Cash Proceeds” means proceeds
received by any Loan Party (or by any Permitted Joint Venture or Subsidiary of
any Loan Party that is not a Loan Party, (x) to the extent of the Loan
Parties’ direct or indirect aggregate interest therein and (y)(1) in the
case of a Permitted Joint Venture or a Subsidiary that is not a Wholly-Owned
Subsidiary of a Loan Party and (2) if distribution of such proceeds to the
Loan Parties is prohibited or restricted by Requirements of Law or Contractual
Obligations (including Contractual Obligations incorporated within the
Constituent Documents of such Subsidiary or Permitted Joint Venture) with any
Person other than the Borrower, its Subsidiaries and Permitted Joint Ventures,
only to the extent of any distribution of such proceeds actually received by
such Loan Party) after the Effective Date in cash or Cash Equivalents from any (a) Asset
Sale permitted under Section 8.4 (b) (Sale
of Assets) or any sale and leaseback transaction (other than a sale
and leaseback transaction of property entered into within 90 days of the
acquisition of such property) permitted hereunder net

 

18

 

of (i) the reasonable cash costs of sale, assignment, sale-leaseback
or other disposition, (ii) taxes paid or reasonably estimated to be
payable as a result thereof (including, for the avoidance of doubt, as a result
of any distribution of such proceeds to the Loan Parties) and (iii) for
any Asset Sale, any amount required to be paid or prepaid on Indebtedness
(other than the Obligations) secured by the assets subject to such Asset Sale, provided, however, that evidence of each of (i), (ii) and (iii) above
is provided to the Administrative Agent in form and substance reasonably
satisfactory to it, (b) Property Loss Event, net of (i) reasonable
costs and expenses associated with settling any claim with respect to such
Property Loss Event and (ii) taxes paid or reasonably estimated to be
payable as a result thereof, provided, however, that evidence of each of (i) and
(ii) above is provided to the
Administrative Agent in form and substance reasonably satisfactory to it, or (c) Equity
Issuance net of brokers’ and advisors’ fees, underwriting discounts and
commissions and other customary fees and expenses incurred in connection with
such transaction; provided, however,
that in the case of this clause (c), evidence of such costs is provided to the Administrative
Agent in form and substance reasonably satisfactory to it.

 

“Non-Consenting Lender” has the meaning
specified in Section 11.1(c) (Amendments,
Waivers, Etc.).

 

“Non-Funding Lender” has the meaning
specified in Section 2.2(c) (Borrowing
Procedures).

 

“Non-Recourse Indebtedness” means
Indebtedness of a Permitted Joint Venture or Subsidiary of the Borrower (in
each case that is not a Loan Party) (a) that is on terms and conditions
reasonably satisfactory to the Administrative Agent, (b) that is not, in
whole or in part, Indebtedness of any Loan Party (and for which no Loan Party
has created, maintained or assumed any Guaranty Obligation or other obligation)
and for which no holder thereof has or could have upon the occurrence of any
contingency, any recourse against any Loan Party or the assets thereof, (c) owing
to an unaffiliated third-party (other than, directly or indirectly, the
Borrower, any Subsidiary thereof, any other Loan Party, any Permitted Joint
Venture (or owner of any interest therein) and any Affiliate of any of them)
and (d) the source of repayment for which is expressly limited to the
assets of such Permitted Joint Venture or Subsidiary (expressly excluding any
Indebtedness or other inter-company obligation of any Loan Party to, and any
Investment of any Loan Party in, such Subsidiary).

 

“Non-U.S. Financial Institution” means
each Lender, Tranche B Investor or the Administrative Agent that is not a
United States person as defined in Section 7701(a)(30) of the Code.

 

“Note” means a promissory note of the
Borrower payable to any Lender and its registered assigns in a principal amount
equal to the amount of such Lender’s Commitment evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from the Revolving Loans
(and, if such Lender is also the Swing Loan Lender, Swing Loans) owing to such
Lender.

 

“Notice of Borrowing” has the meaning
specified in Section 2.2(a) (Borrowing
Procedures).

 

“Notice of Conversion or Continuation”
has the meaning specified in Section 2.11
(Conversion/Continuation Option).

 

19

 

“Obligations” means the Loans, the Letter
of Credit Obligations and all other amounts, obligations, covenants and duties
owing by the Borrower and the other Loan Parties to the Administrative Agent,
any Lender, any Issuer, any Tranche B Investor, any Affiliate of any of
them or any Indemnitee, of every type and description (whether by reason of an
extension of credit, operation of the cash management system provided
hereunder, opening or amendment of a letter of credit or payment of any draft
drawn thereunder, loan, guaranty, indemnification, foreign exchange or currency
swap transaction, interest rate hedging transaction or otherwise), present or
future, arising under (a) this Agreement or any other Loan Document or (b) any
Hedging Contract that (i) is in effect on the Effective Date with a
counterparty that is the Administrative Agent, a Lender, a Tranche B
Investor or any Affiliate of any of the foregoing or (ii) entered into
after the Effective Date with a counterparty that was, at the time such Hedging
Contract was entered into, the Administrative Agent, a Lender, a Tranche B
Investor or any Affiliate of any of the foregoing, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising and however acquired and whether
or not evidenced by any note, guaranty or other instrument or for the payment
of money, including all letter of credit, cash management and other fees
(including, the Commitment Fee and the Fronting Fee), interest, charges,
expenses, attorneys’ fees and disbursements and other sums chargeable to the
Borrower under this Agreement or any other Loan Document and all obligations of
the Borrower under any Loan Document to provide cash collateral for Letter of
Credit Obligations.

 

“Original Restatement Date” has the
meaning specified in the preamble to this Agreement.

 

“Outstandings” means, at any particular
time, the sum of (a) the principal amount of the Loans outstanding at such
time and (b) the Letter of Credit Obligations outstanding at such time.

 

“PBGC” means the Pension Benefit Guaranty
Corporation or any successor thereto.

 

“Permit” means any permit, approval,
authorization, license, variance or permission required from a Governmental
Authority under an applicable Requirement of Law.

 

“Permitted Acquisition” means any
Proposed Acquisition subject to the satisfaction of each of the following
conditions:

 

(a)           if
the consideration (excluding performance-based contingent consideration
(including, without limitation, earn-out payments and royalty payments)) in
respect of any such Proposed Acquisition is in excess of $10,000,000, the
Administrative Agent shall receive prior written notice of such Proposed
Acquisition, which notice shall include, without limitation, a reasonably
detailed description of such Proposed Acquisition;

 

(b)           such
Proposed Acquisition shall only involve assets primarily located in the United
States, Canada, the United Kingdom or Australia and, following such
acquisition, the Borrower would be in compliance with Section 8.7
(Change in Nature of Business); provided, however, that such Proposed Acquisition may involve assets
primarily located in other jurisdictions if the sum of (i) all amounts
payable in cash plus (ii) any Indebtedness
or other liabilities incurred or assumed by any Loan Party in

 

20

 

connection with
such Proposed Acquisition, together with all other such Proposed Acquisitions,
does not exceed $35,000,000 (excluding performance-based contingent
consideration (including, without limitation, earn-out payments and royalty
payments));

 

(c)           such
Proposed Acquisition shall be consensual and shall have been approved by the
board of directors of the Person or any operating division thereof subject to
such Proposed Acquisition (the “Proposed Acquisition
Target”);

 

(d)           the
sum of (i) all amounts payable in cash (except (x) performance-based
contingent consideration (including, without limitation, earn-out payments and
royalty payments) and (y) to the extent financed with Stock of the
Borrower or the proceeds of a substantially concurrent issuance of Stock of the
Borrower) plus (ii) any Indebtedness or other
liabilities incurred or assumed by any Loan Party in connection with each  Proposed Acquisition (less
any unrestricted cash or Cash Equivalents of such Proposed Acquisition Target
that are escrowed pursuant to arrangements and documentation satisfactory to
the Administrative Agent in its sole discretion, by a Loan Party for the payment
of such assumed or incurred Indebtedness or liabilities) shall not exceed
$100,000,000; provided, however,
that such amounts for all Proposed Acquisitions shall not exceed $200,000,000
in the aggregate;

 

(e)           the
Available Credit (after giving effect to such Proposed Acquisition) shall not
be less than $100,000,000;

 

(f)            within
30 days (or, in respect of real estate matters, 45 days) after the closing of
such Proposed Acquisition, the Borrower (or the Subsidiary making such Proposed
Acquisition) and the Proposed Acquisition Target shall have executed such
documents and taken such actions as may be required under Sections Section 7.11 (Additional
Collateral and Guaranties) and
Section 7.12 (Real Property);

 

(g)           if
the consideration (excluding performance-based contingent consideration
(including, without limitation, earn-out payments and royalty payments)) in
respect of any such Proposed Acquisition is in excess of $25,000,000, the
Borrower shall have delivered to the Administrative Agent, in form and substance
satisfactory to the Administrative Agent and sufficiently in advance (but in
any case no later than 5 days prior to such Proposed Acquisition unless
otherwise agreed by the Administrative Agent) such other financial information,
financial analysis, documentation or other information relating to such
Proposed Acquisition as the Administrative Agent shall reasonably request; and

 

(h)           at
the time of such Proposed Acquisition and after giving effect thereto, (i) no
Default or Event of Default shall have occurred and be continuing (and, if the
consideration in respect of such Proposed Acquisition is in excess of
$10,000,000, the Borrower shall have demonstrated compliance with the covenants
set forth in Article V (Financial Covenants)
on a pro forma basis) and (ii) all
representations and warranties contained in
Article IV (Representations and Warranties) and in the other
Loan Documents shall be true and correct in all material respects.

 

“Permitted Joint Venture” means any joint
venture (which may be in the form of any limited liability company or other
Person), including any Domestic Subsidiary of the Borrower that is not a
Wholly-Owned Subsidiary thereof, in which the Borrower or any of its

 

21

 

Subsidiary holds Stock or Stock Equivalents or otherwise participates
or invests; provided, however,
that (a) the investors or participants in such joint venture participate
in such joint venture on substantially the same terms as the Borrower or such
Subsidiary, (b) the existence and activities of such joint venture are
limited to the duration and scope of the specific Projects relating thereto
(established to provide engineering, construction, mining, manufacturing,
development, operations and maintenance or other services, as the case may be),
(c) the Lenders have a valid, perfected, first priority security interest
in the Stock, Stock Equivalents or other interests in such joint venture held
by the Borrower or any of its Subsidiaries except where (i) the governing
documents of such joint venture prohibit such a security interest to be granted
to the Lenders or (ii) such joint venture has incurred Non-Recourse
Indebtedness the terms of which either (x) require security interests in
such Stock, Stock Equivalents or other interests to be granted to secure such
Non-Recourse Indebtedness or (y) prohibit such a security interest to be
granted to the Lenders, and (d) no Loan Party shall, pursuant to such
joint venture, be under any Contractual Obligation to make Investments or incur
Guaranty Obligations after the later of the Effective Date and the initial
formation of such joint venture that would be in violation of any provision of
this Agreement.

 

“Person” means an individual,
partnership, corporation (including a business trust), joint stock company,
estate, trust, limited liability company, unincorporated association, joint
venture or other entity, or a Governmental Authority.

 

“Plan of Reorganization” means the Plan
of Reorganization under title 11, United States Code, as amended, of Washington
Group International, Inc. and certain of its subsidiaries confirmed by the
Bankruptcy Court for the District of Nevada on December 21, 2001.

 

“Pledge and Security Agreement” means the
Pledge and Security Agreement dated of January 24, 2002, a copy of which
is attached as Exhibit I  (Pledge and Security Agreement), executed by the Borrower,
each Guarantor and the Administrative Agent.

 

“Pledged Notes” has the meaning specified
in the Pledge and Security Agreement.

 

“Pledged Stock” has the meaning specified
in the Pledge and Security Agreement.

 

“Prime Rate” means the rate of interest per annum established from time to time by the
Administrative Agent as its prime rate in effect as its principal office in New
York City.  Each change in the Prime Rate
shall be effective on the date such change is publicly announced as being
effective.

 

“Project” means any construction,
engineering, mining, manufacturing, development, operation, maintenance or
other project consisting of the consummation of transactions contemplated in a
set of Contractual Obligations (including financial documents) with a
Governmental Authority, sponsor, developer or other Person, including
Government Contracts and Contractual Obligations for the development, design,
engineering, construction, equipment, testing, commissioning, completion,
management, ownership, operation, insurance, maintenance and repair of certain
facilities (at a specified location) or performance of certain other works
(whether completed or uncompleted) or any other services.  “Project”
includes, without limitation, all such Contractual Obligations, any transaction
contemplated in such

 

22

 

Contractual Obligation, the project company or other Person organized
for the purpose of executing such Contractual Obligations (and any asset owned
or leased thereby), any equipment and other assets owned or leased by any Loan
Party to consummate such Contractual Obligations, and the expenses (including
related overhead expenses) related thereto.

 

“Projections” means those financial
projections dated June, 2005, covering the Fiscal Years ending in 2005 through
2008, inclusive, delivered to the Lenders by the Borrower.

 

“Property Loss Event” means (a) any
loss of or damage to property of the Borrower or any of its Subsidiaries that
results in the receipt by such Person of proceeds of insurance in excess of
$5,000,000 (individually or in the aggregate for all such losses and damages)
or (b) any taking of property, or condemnation of property (or deed in
lieu thereof), of the Borrower or any of its Subsidiaries that results in the
receipt by such Person of a compensation payment in respect thereof in excess
of $5,000,000 (individually or in the aggregate for all such takings).

 

“Proposed Acquisition” means the proposed
acquisition by the Borrower or any of its Subsidiaries of all or substantially
all of the assets or Stock of any Proposed Acquisition Target, or the merger of
any Proposed Acquisition Target with or into the Borrower or any Subsidiary of
the Borrower (and, in the case of a merger with the Borrower, with the Borrower
being the surviving corporation).

 

“Proposed Acquisition Target” has the
meaning specified in clause (c) of
the definition of the term “Permitted Acquisition”.

 

“Proposed Change” has the meaning
specified in Section 11.1(c) (Amendments,
Waivers, Etc.).

 

“Protective Advances” means all expenses, disbursements and advances incurred by the
Administrative Agent pursuant to the Loan Documents after the occurrence and
during the continuance of an Event of Default that the Administrative Agent, in
its sole discretion, deems necessary or desirable to preserve or protect the
Collateral or any portion thereof or to enhance the likelihood, or maximize the
amount, of repayment of the Obligations.

 

“Purchasing Investor” has the meaning
specified in Section 11.7 (Sharing of Payments,
Etc.).

 

“Purchasing Lender” has the meaning
specified in Section 11.7 (Sharing of Payments,
Etc.).

 

“Ratable Portion” or “ratably” means, with respect to any Lender, the percentage
obtained by dividing (a) the Commitment of such Lender by (b) the
aggregate Commitments of all Lenders (or, at any time after the Revolving
Credit Termination Date, the percentage obtained by dividing the aggregate
outstanding principal balance of the Outstandings owing to such Lender by the
aggregate outstanding principal balance of the Outstandings owing to all
Lenders).

 

“Real Property” means any interest in
real property, including Land, together with the right, title and interest in
and to the streets, the land lying in the bed of any streets, roads or avenues,
opened or proposed, in front of, the air space and development rights
pertaining to, the Land and the right to use such air space and development
rights, all rights of way, privileges, liberties, tenements, hereditaments and
appurtenances belonging or in any way appertaining

 

23

 

thereto, all fixtures, all easements now or hereafter benefiting the
Land and all royalties and rights appertaining to the use and enjoyment of the
Land, including all alley, vault, drainage, mineral, water, oil and gas rights,
together with all of the buildings and other improvements now or hereafter
erected on the Land, and any fixtures appurtenant thereto.

 

“Register” has the meaning specified in Section 11.2(c) (Assignments and Participations).

 

“Reimbursement Date” has the meaning
specified in Section 2.4(h) (Letters of Credit).

 

“Reimbursement Obligations” means all
matured reimbursement or repayment obligations of the Borrower to any Issuer
with respect to amounts drawn under Letters of Credit.

 

“Reinvestment Deferred Amount” means,
with respect to any Reinvestment Event, the aggregate Net Cash Proceeds
received by any Loan Party in connection therewith that the Borrower (directly
or indirectly through one of its Subsidiaries) intends and expects to use to
acquire assets useful in its or one of its Subsidiaries’ businesses or, in the
case of a Property Loss Event, to effect repairs, as set forth in the
Reinvestment Notice relating to such Reinvestment Event.

 

“Reinvestment Event” means any Asset Sale
or Property Loss Event in respect of which the Borrower has delivered a
Reinvestment Notice.

 

“Reinvestment Notice” means a written notice
executed by a Responsible Officer of the Borrower stating that no Default or
Event of Default has occurred and is continuing and that the Borrower (directly
or indirectly through one of its Subsidiaries) intends and expects to use all
or a specified portion of the Net Cash Proceeds of an Asset Sale or Property
Loss Event to acquire assets useful in its or one of its Subsidiaries’
businesses or, in the case of a Property Loss Event, to effect repairs.

 

“Reinvestment Prepayment Amount” means,
with respect to any Reinvestment Event, the Reinvestment Deferred Amount
relating thereto less any amount expended or
required to be expended pursuant to a Contractual Obligation entered into prior
to the relevant Reinvestment Prepayment Date to acquire assets useful in the
Borrower’s business or, in the case of a Property Loss Event, to effect
repairs.

 

“Reinvestment Prepayment Date” means,
with respect to any Reinvestment Event, the earlier of (a) the date
occurring 270 days after such Reinvestment Event and (b) the date that is
five Business Days after the date on which the Borrower shall have notified the
Administrative Agent of the Borrower’s determination not to acquire assets
useful in the Borrower’s or a Subsidiary’s business (or, in the case of a
Property Loss Event, not to effect repairs) with all or any portion of the
relevant Reinvestment Deferred Amount.

 

 “Release”
means, with respect to any Person, any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration, in each case, of any Contaminant into the indoor or outdoor
environment or into or out of any property owned by such Person, including the
movement of Contaminants through or in the air, soil, surface water, ground
water or property and, in each case, in violation of Environmental Law.

 

24

 

 

“Releasees”
has the meaning specified in Section 11.10(g) (Amendment
and Restatement; Binding Effect).

 

“Remedial
Action” means all actions required to (a) clean up, remove,
treat or in any other way address any Contaminant in the indoor or outdoor
environment, (b) prevent the Release or threat of Release or minimize the
further Release so that a Contaminant does not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment or (c) perform
pre-remedial studies and investigations and post-remedial monitoring and care.

 

“Requirement
of Law” means, with respect to any Person, the common law and all
federal, state, local and foreign laws, rules and regulations, orders,
judgments, decrees and other determinations of any Governmental Authority or
arbitrator, applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.

 

“Requisite
Lenders” means, collectively, Lenders having more than fifty percent
(50%) of the aggregate outstanding amount of the Commitments or, after the
Revolving Credit Termination Date, the aggregate Outstandings; provided, however, that,
for purposes of this calculation, the Commitment of the Fronting Lender shall
be included in whole or in part so as to follow the instructions of each
Tranche B Investor in respect of its Tranche B Ratable Portion of
such Commitment, as set forth in a notice forwarded by the Fronting Lender to
the Administrative Agent prior to each determination thereof, which notice
shall be irrevocable and binding for all purposes for such determination.  A Non-Funding Lender shall not be included in
the calculation of “Requisite Lenders”;
provided, however,
that, if such Non-Funding Lender is the Fronting Lender, its Commitment shall
be required to be excluded from such calculation pursuant to this sentence only
to the extent of such Commitment multiplied by a ratio the numerator of which
is the Loan or payment the Fronting Lender has failed to make hereunder and the
numerator of which is the aggregate corresponding Loan or payment the Fronting
Lender was obligated to make hereunder (but made only partially).

 

“Responsible
Officer” means, with respect to any Person, any of the principal
executive officers, managing members or general partners of such Person but, in
any event, with respect to financial matters, the chief financial officer,
treasurer or controller of such Person.

 

“Restricted
Payment” means (a) any dividend, distribution or any other
payment whether direct or indirect, on account of any Stock or Stock
Equivalents of the Borrower or any of its Subsidiaries now or hereafter
outstanding, except a dividend payable solely in Stock or Stock Equivalents or
a dividend or distribution payable solely to the Borrower or one or more
Subsidiary Guarantors, (b) any redemption, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct or indirect,
of any Stock or Stock Equivalents of the Borrower or any of its Subsidiaries
now or hereafter outstanding other than one payable solely to the Borrower or
one or more Subsidiary Guarantors and (c) any payment or prepayment of
principal, premium (if any), interest, fees (including fees to obtain any
waiver or consent in connection with any Indebtedness) or other charges on, or
redemption, purchase, retirement, defeasance, sinking fund or similar payment
with respect to, any Subordinated Debt of the Borrower or any other Loan Party,
other than any required payment, prepayment, redemption, retirement, purchases
or other payments, in each case to the extent permitted to be made by the terms
of such Subordinated Debt.

 

25

 

“Revolving
Credit Termination Date” shall mean the earliest of (a) the
Scheduled Termination Date, (b) the date of termination of the Commitments
pursuant to Section 2.5 (Reduction and Termination of the
Commitments) or Section 9.2
(Remedies) and (c) the date on
which the Obligations become due and payable pursuant to Section 9.2
(Remedies).

 

“Revolving
Loan” means each Tranche A Loan and Tranche B Loan.

 

“S&P”
means Standard & Poor’s Rating Services.

 

“Scheduled
Termination Date” means, with respect to each of the Facilities, the
fifth anniversary of the Effective Date.

 

“Secured
Obligations” means, in the case of the Borrower, the Obligations,
and, in the case of any other Loan Party, the obligations of such Loan Party
under the Guaranty and the other Loan Documents to which it is a party.

 

“Secured
Parties” means the Lenders, the Issuers, the Administrative Agent,
the Tranche B Investors and any other holder of any Obligation.

 

“Security”
means any Stock, Stock Equivalent, voting trust certificate, bond, debenture,
note or other evidence of Indebtedness, whether secured, unsecured, convertible
or subordinated, or any certificate of interest, share or participation in, or
any temporary or interim certificate for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing, but shall not
include any evidence of the Obligations.

 

“Selling
Investor” has the meaning specified in Section 11.7
(Sharing of Payments, Etc.).

 

“Selling
Lender” has the meaning specified in Section 11.7
(Sharing of Payments, Etc.).

 

“Solvent”
means, with respect to any Person, that the value of the assets of such Person
(both at fair value and present fair saleable value) is, on the date of
determination, greater than the total amount of liabilities (including
contingent and unliquidated liabilities) of such Person as of such date and
that, as of such date, such Person is able to pay all liabilities of such
Person as such liabilities mature and does not have unreasonably small
capital.  In computing the amount of
contingent or unliquidated liabilities at any time, such liabilities shall be
computed at the amount that, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.

 

“Special
Purpose Vehicle” means any special purpose funding vehicle
identified as such in writing by any Lender to the Administrative Agent.

 

“Specified
Property” means  the Borrower’s Westinghouse Government and
Technical Services Division or its Engineered Products Department.

 

“Standby
Letter of Credit” means any Letter of Credit that is not a
Documentary Letter of Credit.

 

“Stock”
means shares of capital stock (whether denominated as common stock or preferred
stock), beneficial, partnership or membership interests, participations or
other

 

26

 

equivalents
(regardless of how designated) of or in a corporation, partnership, limited
liability company or equivalent entity, whether voting or non-voting.

 

“Stock
Equivalents” means all securities convertible into or exchangeable
for Stock and all warrants, options or other rights to purchase or subscribe
for any Stock, whether or not presently convertible, exchangeable or
exercisable.

 

“Stock Option”
means each option to purchase Voting Stock of the Borrower issued to the
management and designated employees of the Borrower pursuant to a Stock Option
Plan.

 

“Stock Option
Plan” means any employee stock option, stock purchase, equity
incentive, deferred compensation or similar plan (including the management and
employee stock option plan issued pursuant to and subject to the conditions set
forth in the Plan of Reorganization (x) to purchase up to 5% (subject to
dilution in certain cases) of the Voting Stock of the Borrower, expiring ten
years after the effective date of the Plan of Reorganization and with a strike
price calculated based on a total equity value of the Borrower on a going
concern basis of $600,000,000 and (y) to purchase up to 5% (subject to
dilution in certain cases) of the Voting Stock of the Borrower).

 

“Sub-Account”
has the meaning specified in Section 2.1(d) (The
Commitments; Credit-Linked Deposit Account).

 

“Subordinated
Debt” means Indebtedness of the Borrower or any of its Subsidiaries
that is, by its terms, subordinated in any respect to the prior payment of any
of the Obligations and otherwise on terms and conditions reasonably
satisfactory to the Administrative Agent.

 

“Subsidiary”
means, with respect to any Person, any corporation, partnership, limited
liability company or other business entity of which an aggregate of 50% or more
of the outstanding Voting Stock is, at the time, directly or indirectly, owned
or controlled by such Person or one or more Subsidiaries of such Person.

 

“Subsidiary
Guarantor” means each Subsidiary of the Borrower that is a
Guarantor.

 

“Surety”
means Federal Insurance Company and its affiliates and co-sureties (if any)
under the Surety Facility or any replacement surety under the Surety Facility
reasonably acceptable to the Administrative Agent.

 

“Surety Bond Letter of Credit” means any Letter of Credit
securing financial or performance obligations of the Borrower, any of its
Subsidiaries or any Permitted Joint Venture under any Approved Surety Bond.

 

“Surety Facility” means the surety credit facility made
available to the Borrower and its Affiliates by the Surety pursuant to the
Underwriting and Continuing Indemnity Agreement, dated as of January 24,
2002, among the Borrower, certain of its Subsidiaries and the Surety, together
with any amendments thereto or replacement facilities, each in form and
substance reasonably acceptable to the Administrative Agent.

 

27

 

“Surety Intercreditor Agreement” means the Intercreditor
Agreement, dated as of January 24, 2002, by and between the Administrative
Agent and the Surety, together with any amendments thereto in form and
substance reasonably acceptable to the Administrative Agent.

 

“Syndication
Completion Date” means the date that is 90 days after the Effective
Date.

 

“Swing Loan”
has the meaning specified in Section 2.3
(Swing Loans).

 

“Swing Loan
Borrowing” means a borrowing consisting of a Swing Loan.

 

“Swing Loan
Lender” means Credit Suisse or any other Lender that becomes the Administrative
Agent or agrees, with the approval of the Administrative Agent and the
Borrower, to act as Swing Loan Lender hereunder.

 

“Swing Loan
Request” has the meaning specified in Section 2.3(b) (Swing
Loans).

 

“Tax
Affiliate” means, with respect to any Person, (a) any
Subsidiary of such Person, and (b) any Affiliate of such Person with which
such Person files or is eligible to file consolidated, combined or unitary tax
returns.

 

“Tax Return”
has the meaning specified in Section 4.8(a) (Taxes).

 

“Taxes”
has the meaning specified in Section 2.16(a) (Taxes).

 

“Title IV
Plan” means a pension plan, other than a Multiemployer Plan, covered
by Title IV of ERISA and to which the Borrower, any of its Subsidiaries or
any ERISA Affiliate has any obligation or liability (contingent or otherwise).

 

“Tranche A
Facility” means the Commitment of all Tranche A Lenders and the
provisions herein relating to the Revolving Loans made by the Tranche A
Lenders (including to reimburse the issuer for any draw under any Letter of
Credit or to repay any Swing Loan), which shall be in an aggregate principal
amount of $247,500,000 on the Effective Date.

 

“Tranche A
Lender” means any Lender under the Tranche A Facilities.

 

“Tranche A
Loan” has the meaning specified in Section 2.1
(The Commitments).

 

“Tranche B
CD” has the meaning specified in the Existing Credit Agreement.

 

“Tranche B
Deposit Amount” shall mean, with respect to each Tranche B Investor,
the initial amount of such Tranche B Investor’s Credit-Linked Deposit as shown
on the Register (and informed by the Administrative Agent to the Borrower on
the Effective Date) or in the Assignment and Acceptance pursuant to which such
Tranche B Investor assumed its Tranche B Deposit Amount and Credit-Linked
Deposit, as the same may be (a) reduced from time to time pursuant to Section 2.5 (Reduction and Termination of the Commitments)
and (b) reduced or increased from time to time pursuant to assignments by
or to such Tranche B Investor pursuant to Section 11.2
(Assignments and Participations). 
As of the Effective Date, the aggregate Tranche B Deposit Amount is
$102,500,000.

 

28

 

“Tranche B
Facility” means the Commitment of each Tranche B Lender and the
provisions herein relating to the Revolving Loans made by each Tranche B
Lender (including to reimburse any Issuer for any draw under any Letter of
Credit or to repay any Swing Loan), which shall be in an aggregate principal
amount of $102,500,000 on the Effective Date.

 

“Tranche B
Fronted Exposure” means, at any time of determination, an amount equal
to (a) the aggregate principal amount of the outstanding Tranche B Loans and
participations in Swing Loans held by the Fronting Lender at such time plus
(b) the Fronting Lender’s Ratable Portion of the Letter of Credit
Obligations at such time.

 

“Tranche B
Investor” means each financial institution or other entity that has
a Tranche B Deposit Amount.

 

“Tranche B
Lender” means the Fronting Lender, as sole Lender under the
Tranche B Facility.

 

“Tranche B
Loan” has the meaning specified in Section 2.1(The
Commitments).

 

“Tranche B
Ratable Portion” means, in respect of any Tranche B Investor,
the percentage obtained by dividing the amount of the Credit-Linked Deposit of
such Tranche B Investor by the aggregate amount of the Credit-Linked
Deposits of all Tranche B Investors.

 

“Treasury
Regulations” means the final and temporary (but not proposed) income
tax regulations promulgated under the Internal Revenue Code, as such
regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).

 

“UCC”
has the meaning specified in the Pledge and Security Agreement.

 

“USA Patriot
Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT
ACT) Act of 2001, as amended.

 

“Voting Stock”
means Stock of any Person having ordinary power to vote in the election of
members of the board of directors, managers, trustees or other controlling
Persons, of such Person (irrespective of whether, at the time, Stock of any
other class or classes of such entity shall have or might have voting power by
reason of the happening of any contingency).

 

“Warrant
Agreement” means each of the Class 7 Warrant Agreement and the
Dennis Washington Option Agreement.

 

“Warrant”
means each of the Class 7 Warrants and the Dennis Washington Options.

 

“Westinghouse
Acquisition” means the acquisition by WGSC or the Borrower of the
membership and any other interests in Westinghouse Government Environmental
Services Company LLC.

 

“Westinghouse Acquisition Documents” means the consortium
agreement among, inter alia, BNFL, WGSC and the
Borrower, as it may be amended, restated or otherwise modified (subject to Section 8.2(j) (Liens, Etc.)) and the related documents
executed in connection therewith.

 

29

 

“WGSC” means Westinghouse Government Services Company LLC.

 

“Wholly-Owned
Subsidiary” means, in respect of any Person, any Subsidiary of such
Person, all of the Stock of which (other than director’s qualifying shares, and
the like, as may be required by law) is owned by such Person, either directly
or indirectly through one or more Wholly-Owned Subsidiaries thereof.

 

“Withdrawal
Liability” means, with respect to the Borrower or any of its
Subsidiaries at any time, the aggregate liability incurred (whether or not
assessed) with respect to all Multiemployer Plans pursuant to Section 4201
of ERISA.

 

“Work in
Process Report” means, at any time, a contract activity summary
(also known as a “work-in-process” or “WIP” report), as of such time, showing, on both a Group and
Material Projects basis, contract value, revenue to date, amounts billed to
date, under-billed (unbilled) balance, over-billed (billing in excess of costs)
balance, costs incurred to date, estimated costs to complete, estimated total
cost, profit/(loss) to date, and the remaining profit or loss to recognize,
with analysis of unbilled costs and billings in excess of cost and advances
from customers, as necessary.

 

Section 1.2                                   Computation
of Time Periods

 

In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and
including” and the words “to” and “until” each mean “to but excluding”
and the word “through” means “to and including.”

 

Section 1.3                                   Accounting
Terms and Principles

 

(a)                                  Except
as set forth below, all accounting terms not specifically defined herein shall
be construed in conformity with GAAP and all accounting determinations required
to be made pursuant hereto shall, unless expressly otherwise provided herein,
be made in conformity with GAAP.

 

(b)                                 If
any change in the accounting principles used in the preparation of the most
recent Financial Statements referred to in Section 6.1
(Financial Statements) is hereafter required or permitted by the
rules, regulations, pronouncements and opinions of the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants (or
any successors thereto) and such change is adopted by the Borrower with the
agreement of the Borrower’s Accountants and results in a change in any of the
calculations required by Article V (Financial
Covenants) or VIII (Negative Covenants)
had such accounting change not occurred, the parties hereto agree to enter into
negotiations in order to amend such provisions so as to equitably reflect such
change with the desired result that the criteria for evaluating compliance with
such covenants by the Borrower shall be the same after such change as if such
change had not been made; provided, however, that no change in GAAP that would affect a
calculation that measures compliance with any covenant contained in Article V (Financial Covenants) or VIII
(Negative Covenants) shall be given effect until such provisions are
amended to reflect such changes in GAAP.

 

30

 

Section 1.4                                   Certain Terms

 

(a)                                  The
words “herein,” “hereof”
and “hereunder” and similar words refer to
this Agreement as a whole, and not to any particular Article, Section, subsection or clause in, this
Agreement.

 

(b)                                 Unless
otherwise expressly indicated herein, (i) references in this Agreement to
an Exhibit, Schedule, Article, Section, clause or sub-clause refer to the
appropriate Exhibit or Schedule to, or Article, Section, clause or
sub-clause in this Agreement and (ii) the words “above”
and “below”, when following a reference to a
clause or a sub-clause of any Loan Document, refer to a clause or sub-clause
within, respectively, the same Section or clause.

 

(c)                                  Each
agreement defined in this Article I
shall include all appendices, exhibits and schedules thereto.  Unless the prior written consent of the
Requisite Lenders is required hereunder for an amendment, restatement,
supplement or other modification to any such agreement and such consent is not
obtained, references in this Agreement to such agreement shall be to such
agreement as so amended, restated, supplemented or modified.

 

(d)                                 References
in this Agreement to any statute shall be to such statute as amended or
modified, together with any successor legislation, in each case in effect at
the time any such reference is operative.

 

(e)                                  The
term “including” when used in any Loan
Document means “including without limitation”
except when used in the computation of time periods.  The phrase “in the
aggregate”, when used in any Loan Document, means “individually or in the aggregate”, unless otherwise
expressly noted.

 

(f)                                    The
terms “Lender,” “Issuer”,
“Tranche B Investor”, “Fronting Lender” and “Administrative Agent”
include, without limitation, their respective successors.

 

(g)                                 Upon
the appointment of any successor Administrative Agent pursuant to Section 10.6  (Successor Administrative
Agent), references to Credit
Suisse in Section 10.3  (The Agents and the Fronting Lender Individually) and in the
definitions of Base Rate, Dollar Equivalent and Eurodollar Rate shall be deemed
to refer to the financial institution then acting as the Administrative Agent
or one of its Affiliates if it so designates.

 

ARTICLE II

 

THE FACILITIES

 

Section 2.1                                   The Commitments;
Credit-Linked Deposit Account

 

(a)                                  Tranche A Loans.  On
the terms and subject to the conditions contained in this Agreement, each
Tranche A Lender under the Tranche A Facility severally agrees to
make loans (each a “Tranche A Loan”)
to the Borrower from time to time on any Business Day during the period from
the Effective Date until the Revolving Credit Termination Date in Dollars in an
aggregate principal amount at any time outstanding for all such loans by such
Lender not to exceed such Tranche A Lender’s Commitment; provided, however, that
at no time shall any Tranche A Lender be obligated to make a
Tranche A Loan in excess of such Lender’s Ratable Portion of the Available
Credit.  Within the limits of each Lender’s
Commitment, amounts of Tranche A Loans repaid may be reborrowed under this
Section 2.1.

 

31

 

(b)                                 Tranche B Loans.  (i)                                On
the terms and subject to the conditions contained in this Agreement, each
Tranche B Lender under the Tranche B Facility agrees to make loans
(each a “Tranche B Loan”) to the Borrower
from time to time on any Business Day during the period from the Effective Date
until the Revolving Credit Termination Date in Dollars in an aggregate
principal amount at any time outstanding for all such loans by such Lender not
to exceed such Tranche B Lender’s Commitment; provided,
however, that at no time shall any
Tranche B Lender be obligated to make a Tranche B Loan in excess of
such Lender’s Ratable Portion of the Available Credit.  Within the limits of each Tranche B
Lender’s Commitment, amounts of Tranche B Loans repaid may be reborrowed
under this Section 2.1.

 

(ii)                                  Upon
the occurrence and during the continuance of an Event of Default, the Fronting
Lender shall have the absolute right to be reimbursed from the Credit-Linked
Deposit Account an amount equal to the then-outstanding Tranche B Loans
(whether made pursuant to this clause (b) or
deemed made pursuant to Section 2.3(e) (Swing
Loans) or Section 2.4(h) (Letters
of Credit)) and participations in outstanding Swing Loans of the
Fronting Lender.  Each Tranche B Investor
hereby authorizes the withdrawal, and the Administrative Agent hereby agrees to
withdraw, from the Credit-Linked Deposit Account (and to debit such Tranche B
Investor’s Sub-Account in the amount of) each such Tranche B Investor’s Tranche
B Ratable Portion of such outstanding Tranche B Loans and participations in
outstanding Swing Loans for payment to the Fronting Lender.  Subject to the redeposit provisions set forth
below, following such withdrawal and reimbursement, each Tranche B Investor
will become a Tranche B Lender (without a commitment) to the extent of such
withdrawal (and such withdrawal and payment shall not alter the obligation of
the Borrower to repay all or any portion of such Tranche B Loans and Swing
Loans, together with interest thereon, all as provided herein).  So long as the Commitments shall not have
terminated, promptly following receipt by the Administrative Agent of any
payment from a Loan Party in respect of such Loans and participations after
such withdrawals and reimbursement, the Administrative Agent shall redeposit
such amount into the Credit-Linked Deposit Account (and credit each Tranche B
Investor’s Sub-Account for such Tranche B Investor’s Tranche B Ratable Portion
of such redeposited amount).

 

(c)                                  Pro Rata Treatment. 
Each Borrowing and repayment therefor shall be made pro rata between the
Tranche A Facility and the Tranche B Facility, in accordance with
each Lender’s Commitment.

 

(d)                                 Establishment of Credit-Linked Deposit Account and Sub-Accounts.  On or prior to the Effective Date, the
Administrative Agent shall establish the Credit-Linked Deposit Account.  The Administrative Agent shall maintain
records enabling it to determine at any time the amount of the interest of each
Tranche B Investor in the Credit-Linked Deposit Account (the interest of each
Tranche B Investor in the Credit-Linked Deposit Account, as evidenced by such
records, being referred to herein as such Tranche B Investor’s “Sub-Account”).  Each Tranche B Investor irrevocably and
unconditionally agrees that its Credit-Linked Deposit shall be available to
reimburse the Fronting Lender as provided herein.  Each Tranche
B Investor further agrees that its right, title and
interest in and to the Credit-Linked Deposit Account shall be limited to the
right to require amounts in its Sub-Account to be applied as provided herein
and that it will have no right to require the return of its Credit-Linked
Deposit other than as expressly provided herein (each Tranche B Investor hereby acknowledging that (i) the Administrative
Agent shall have sole dominion and control over the Credit-Linked Deposit
Account and no other Person shall have the right to make any withdrawal from
the Credit-Linked Deposit Account or to exercise any other

 

32

 

right or power with respect thereto, (ii) its
Credit-Linked Deposit constitutes payment for its participations in Loans made
(or deemed made) or to be made (or deemed made) and Letters of Credit issued or
to be issued hereunder, (iii) its Credit-Linked Deposit and any
investments made therewith shall secure its obligations to the Fronting Lender
hereunder (each Tranche B Investor hereby granting to the Administrative Agent,
for the benefit of the Fronting Lender, a security interest in its
Credit-Linked Deposit and agreeing that the Administrative Agent, as holder of
the Credit-Linked Deposits and any investments made therewith, will be acting, inter  alia, as
collateral agent for the Fronting Lender and may set off against its
Credit-Linked Deposit amounts owed by such Tranche B Investor to the Fronting
Lender), (iv) the Fronting Lender is agreeing to make Tranche B Loans
and to acquire participations in Letters of Credit and Swing Loans in reliance
on the availability of such Tranche B Investor’s Credit-Linked Deposit to discharge such Tranche B Investor’s obligations herein and (v) the failure
of any Tranche B Investor to make available to the Fronting Lender its
Credit-Linked Deposit shall not relieve any other Tranche B Investor of
its obligation hereunder to make available to the Fronting Agent its
Credit-Linked Deposit, but no Tranche B Investor shall be responsible for
the failure of any other Tranche B Investor to make available to the Fronting
Lender such other Tranche B Investor’s Credit-Linked Deposit.

 

(e)                                  Deposits to Credit-Linked Deposit Account.  The following
amounts will be deposited in the Credit-Linked Deposit Account at the following
times (and each Tranche B Investor hereby authorizes and directs the Fronting
Lender and the Administrative Agent to effect the same):

 

(i)                                     On the Effective Date, (A) with respect to each
Tranche B Investor that, on the Effective Date, has amounts on deposit in a
Tranche B CD (each such Tranche B Investor a “Continuing
Tranche B Investor”), the Administrative Agent shall transfer an
amount equal to such Continuing Tranche B Investor’s Tranche B Deposit Amount
(or, if such Continuing Tranche B Investor’s Tranche B Deposit Amount shall
exceed the amount on deposit in such Continuing Tranche B Investor’s Tranche B
CD, the entire amount so on deposit) from such Continuing Tranche B Investor’s
Tranche B CD to the Credit-Linked Deposit Account for the credit of such Transferring
Tranche B Investor, whereupon such Continuing Tranche B Investor’s Tranche B CD
shall be cancelled forthwith and any amounts remaining on deposit after such
transfer in excess of such Continuing Tranche B Investor’s Tranche B Deposit
Amount shall be distributed to such Continuing Tranche B Investor in accordance
with the terms of such Tranche B CD, (B) each Continuing Tranche B
Investor with a Tranche B Deposit Amount in excess of the amount so transferred
from its Tranche B CD to the Credit-Linked Deposit Account pursuant to clause (A) above shall deposit in the Credit-Linked
Deposit Account an amount in Dollars equal to such excess, and (C) each
Tranche B Investor that is not a Continuing Tranche B Investor shall deposit in
the Credit-Linked Deposit Account an amount in Dollars equal to such Tranche
B Investor’s Tranche B Deposit Amount.  The obligations of the Tranche B
Investors to make the deposits required by this clause (i) are several and not joint, and no
Tranche B Investor shall be responsible for any other Tranche B Investor’s
failure to make its deposit as so required.

 

(ii)                                  On any date prior to the Revolving Credit Termination
Date on which the Fronting Lender receives any payment from a Loan Party in
respect of Tranche B Loans (or participations in Swing Loans) with respect
to which amounts were withdrawn from the Credit-Linked Deposit Account, the
Fronting Lender shall deposit in

 

33

 

the
Credit-Linked Deposit Account, and credit to the Sub-Accounts of the Tranche
B Investors, the portion of such payment to be
deposited therein, in accordance with  clause (b)(ii) of this Section 2.1;
provided that, to the extent the
aggregate Credit-Linked Deposits would exceed the aggregate Tranche B Deposit
Amounts after giving effect to the redeposit of such amounts, such excess shall
not be deposited in the Credit-Linked Deposit Account and the Fronting Lender
shall instead pay to each Tranche B Investor its Tranche B Ratable Portion of
such excess.

 

(iii)                               On any date prior to the Revolving Credit Termination
Date on which the Administrative Agent or any Issuer receives any reimbursement
payment from a Loan Party in respect of a Reimbursement Obligation with respect to which amounts were withdrawn from the
Credit-Linked Deposit Account to reimburse the Fronting Lender, the
Administrative Agent or such Issuer shall forward such reimbursement payment to
the Fronting Lender and the Fronting Lender shall deposit in the Credit-Linked
Deposit Account, and credit to the Sub-Accounts of the Tranche B
Investors, the portion of such reimbursement
payment to be deposited therein, in accordance with Section 2.4(h) (Letters of Credit); provided
that, to the extent the aggregate Credit-Linked Deposits would exceed the aggregate
Tranche B Deposit Amounts after giving effect to the redeposit of such amounts,
such excess shall not be deposited in the Credit-Linked Deposit Account and the
Fronting Lender shall instead pay to each Tranche B Investor its Tranche B
Ratable Portion of such excess.

 

(iv)                              Concurrently with the effectiveness of any assignment
by any Tranche B Investor of all or any
portion of its Tranche B Deposit Amount and
Credit-Linked Deposit, the Fronting Lender shall transfer into the Sub-Account
of the assignee the corresponding portion of the amount on deposit in the
assignor’s Sub-Account in accordance with Section 11.2
(Assignments and Participations).

 

(f)                                    Withdrawals from Credit-Linked Deposit Account.  Amounts on
deposit in the Credit-Linked Deposit Account shall be withdrawn and distributed
(or, in the case of clause (v) below, transferred) as follows:

 

(i)                                     On each date on which the Fronting Lender is to be
reimbursed by the Tranche B Investors
pursuant to clause (b)(ii) of this Section 2.1 for any Tranche B Loan (or
participation in any Swing Loan), the Fronting
Lender shall withdraw from the Credit-Linked Deposit Account the amount of such
Tranche B Loan or participation, as the case may be (and debit the
Sub-Account of each Tranche B Investor in
the amount of its Tranche B Ratable Portion of such Tranche B Loan or
participation, as the case may be), as reimbursement for such Tranche B Loan or
participation, as the case may be.

 

(ii)                                  Promptly following each reduction of the Tranche B
Deposit Amount pursuant to and in accordance with Section 2.5
(Reduction and Termination of the Commitments), the Fronting Lender
shall withdraw from the Credit-Linked Deposit Account and distribute to each Tranche
B Investor its Tranche B Ratable Portion of the amount
by which the aggregate amount of Credit-Linked Deposits exceeds the
Tranche B Deposit Amount after giving effect to such reduction.

 

(iii)                               Promptly following any termination of the Commitments
under the Tranche B Facility pursuant to and in accordance with Section 2.5 (Reduction and

 

34

 

Termination of the Commitments) or Article IX, the Fronting Lender shall
withdraw from the Credit-Linked Deposit Account and distribute to each Tranche
B Investor its Tranche B Ratable Portion of the amount
by which the aggregate amount of Credit-Linked Deposits exceeds the Tranche B
Fronted Exposure at such time.

 

(iv)                              Promptly following (A) the termination of the
Commitments under the Tranche B Facility and (B) the reduction to zero of
all Tranche B Fronted Exposure, the Fronting Lender shall withdraw from the
Credit-Linked Deposit Account and distribute to each Tranche B Investor the entire remaining amount of its Credit-Linked
Deposit, and shall close the Credit-Linked Deposit Account.

 

Each Tranche B
Investor irrevocably and unconditionally agrees that its Credit-Linked Deposit
may be applied or withdrawn from time to time as set forth in this paragraph
(f).

 

(g)                                 Investment of Credit-Linked Deposits.  The
Credit-Linked Deposit of each Tranche B Investor will earn for the account of such Tranche B Investor a return on the average daily amount of such
Credit-Linked Deposit (the “Credit-Linked Deposit Return”) at a rate per annum equal to (i) in respect of the period
commencing on the Effective Date and ending on September 30, 2005 (the “Initial Period”), 3.30% and (ii) in respect of each
successive calendar quarter, (A) the three-month Eurodollar Rate (as
determined by the Administrative Agent at approximately 11:00 a.m. (London
time) on the date that is two Business Days prior to the beginning of such
calendar quarter) minus (B) 0.10% per annum, in each case
calculated on the basis of the actual number of days elapsed over a year of 360
days.  The Credit-Linked Deposit
Return accrued through but excluding the last day of each period described in clause (i) or (ii) above
shall be payable by the Fronting Lender to each Tranche B Investor on the third
Business Day following the last day of such period, and on the Revolving Credit
Termination Date.  No Loan Party shall
have any obligation under or in respect of the provisions of this clause (g).

 

(h)                                 Sufficiency of Credit-Linked Deposits. 
Notwithstanding any other provision of this Agreement, no Tranche
B Loan shall be made, and no Letter of Credit
shall be Issued under the Tranche B Facility, if after giving effect thereto
the aggregate amount of the Credit-Linked Deposits would be less than the
Tranche B Fronted Exposure after giving effect thereto.  The Fronting Lender agrees to provide, at the
request of any Issuer, information to such Issuer as to the then-outstanding
Tranche B Fronted Exposure and the aggregate amount of the Credit-Linked
Deposits.

 

Section 2.2                                   Borrowing Procedures

 

(a)                                  Each
Borrowing shall be made on notice given by the Borrower to the Administrative
Agent not later than 1:00 p.m. (New York time) (i) one Business Day,
in the case of a Borrowing of Base Rate Loans and (ii) three Business
Days, in the case of a Borrowing of Eurodollar Rate Loans, prior to the date of
the proposed Borrowing.  Each such notice
shall be in substantially the form of Exhibit C (Form of
Notice of Borrowing) (a “Notice of Borrowing”),
specifying (A) the date of such proposed Borrowing, (B) the aggregate
amount of such proposed Borrowing, (C) whether any portion of the proposed
Borrowing will be of Base Rate Loans or Eurodollar Rate Loans, (D) the
initial Interest Period or Periods for any such Eurodollar Rate Loans and (E) the
Available Credit (after giving effect to the proposed Borrowing).  The Revolving Loans shall be made as Base
Rate Loans unless, subject to Section 2.14 (Special
Provisions Governing Eurodollar Rate Loans), the Notice of Borrowing
specifies that all or a

 

35

 

portion
thereof shall be Eurodollar Rate Loans. 
Notwithstanding anything to the contrary contained in Section 2.3(a) (Swing Loans), if any Notice of
Borrowing requests a Borrowing of Base Rate Loans, the Administrative Agent may
make a Swing Loan available to the Borrower in an aggregate amount not to
exceed such proposed Borrowing, and the aggregate amount of the corresponding
proposed Borrowing shall be reduced accordingly by the principal amount of such
Swing Loan.  Each Borrowing shall be in
an aggregate amount that is an integral multiple of $1,000,000 and shall be
allocated pro rata between the Tranche A Facility and the Tranche B
Facility, in accordance with each Lender’s Commitment.

 

(b)                                 Unless
the Administrative Agent shall have received notice from a Lender prior to the
date of any proposed Borrowing that such Lender shall not make available to the
Administrative Agent such Lender’s Ratable Portion of such Borrowing (or any
portion thereof), the Administrative Agent may assume that such Lender has made
such Ratable Portion available to the Administrative Agent on the date of such
Borrowing in accordance with this Section 2.2
and the Administrative 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 Lender shall
not have so made such Ratable Portion available to the Administrative Agent,
such Lender and the Borrower severally agree to repay to the Administrative
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 date such amount is repaid to the Administrative Agent, at (i) in
the case of the Borrower, the interest rate applicable at the time to the Loans
comprising such Borrowing and (ii) in the case of such Lender, the Federal
Funds Rate for the first Business Day and thereafter at the interest rate
applicable at the time to the Loans comprising such Borrowing.  If such Lender shall repay to the Administrative
Agent such corresponding amount, such corresponding amount so repaid shall
constitute such Lender’s Loan as part of such Borrowing for purposes of this
Agreement.  If the Borrower shall repay
to the Administrative Agent such corresponding amount, such payment shall not
relieve such Lender of any obligation it may have hereunder to the Borrower.

 

(c)                                  The
failure of any Lender to make the Loan or any payment required by it on the
date specified (a “Non-Funding Lender”),
including any payment in respect of its participation in Swing Loans and Letter
of Credit Obligations, shall not relieve any other Lender of its obligations to
make such Loan or payment on such date but no such other Lender shall be
responsible for the failure of any Non-Funding Lender to make a Loan or payment
required under this Agreement.

 

Section 2.3                                   Swing Loans

 

(a)                                  On
the terms and subject to the conditions contained in this Agreement, the Swing
Loan Lender may, in its sole discretion, make loans (each a “Swing Loan”) otherwise available to the Borrower as part of
the Facilities from time to time on any Business Day during the period from the
Effective Date until the Revolving Credit Termination Date in an aggregate
principal amount at any time outstanding at any time not to exceed $50,000,000;
provided, however,
that, in no event, shall any Swing Loan be made in excess of the Available
Credit.  Each Swing Loan shall be a Base
Rate Loan and shall in any event mature no later than the Revolving Credit
Termination Date.  Within the limits set
forth in the first sentence of this clause (a), amounts of Swing Loans repaid may be reborrowed under this clause (a). 
Swing Loans shall be Base Rate Loans.

 

36

 

(b)                                 In
order to request a Swing Loan, the Borrower shall telecopy (or, if consented to
by the Administrative Agent, forward by electronic mail or similar means) to
the Administrative Agent a duly completed request in substantially the form of Exhibit D  (Form of Swing Loan
Request) (or shall make such request by telephone and promptly
thereafter forward a written confirmation containing the same information),
setting forth the requested amount and date of the Swing Loan (a “Swing Loan Request”), to be received by the Administrative
Agent not later than 3:00 p.m. (New York City time) on the day of the
proposed borrowing.  The Administrative
Agent shall promptly notify the Swing Loan Lender of the details of the
requested Swing Loan.  Subject to the
terms of this Agreement, the Swing Loan Lender shall make a Swing Loan
available to the Administrative Agent no later than 4:00 p.m. (New York
City time) for any Swing Loan whose Swing Loan Request is received by the
Administrative Agent prior to 3:00 p.m. on such date and, in turn, the
Administrative Agent shall make such amounts available to the Borrower on the
date of the relevant Swing Loan Request. The Swing Loan Lender shall not make
any Swing Loan in the period commencing on the first Business Day after it
receives written notice from the Administrative Agent or any Lender that one or
more of the conditions precedent contained in Section 3.2
(Conditions Precedent to Each Loan and Letter of
Credit) shall not on such date be satisfied, and ending when such
conditions are satisfied.  The Swing Loan
Lender shall not otherwise be required to determine that, or take notice
whether, the conditions precedent set forth in Section 3.2
(Conditions Precedent to Each Loan and Letter of
Credit) have been satisfied in connection with the making of any
Swing Loan.

 

(c)                                  The
Swing Loan Lender shall notify the Administrative Agent in writing (which
writing may be a telecopy or, if agreed to by the Administrative Agent,
electronic mail) weekly, by no later than 11:00 a.m. (New York time) on
the first Business Day of each week, of the aggregate principal amount of its
Swing Loans then outstanding.

 

(d)                                 The Swing Loan Lender may demand at any time that each
Lender pay to the Administrative Agent, for the account of the Swing Loan
Lender, in the manner provided in clause (e) below, such Lender’s Ratable Portion of all or a portion of the
outstanding Swing Loans, which demand shall be made through the Administrative
Agent, shall be in writing and shall specify the outstanding principal amount
of Swing Loans demanded to be paid.

 

(e)                                  The
Administrative Agent shall forward each notice referred to in clause (c) above and each demand referred to in clause (d) above to each Lender on the day such
notice or such demand is received by the Administrative Agent (except that any
such notice or demand received by the Administrative Agent after 4:00 p.m.
(New York time) on any Business Day or any such demand received on a day that
is not a Business Day shall not be required to be forwarded to the Lenders by
the Administrative Agent until the next succeeding Business Day), together with
a statement prepared by the Administrative Agent specifying the amount of each
Lender’s Ratable Portion of the aggregate principal amount of the Swing Loans
stated to be outstanding in such notice or demanded to be paid pursuant to such
demand, and, notwithstanding whether or not the conditions precedent set forth
in Section 3.2  (Conditions
Precedent to Each Loan and Letter of Credit) shall have been
satisfied (which conditions precedent the Lenders hereby irrevocably waive),
each Lender shall, before 11:00 a.m. (New York time) on the Business Day
next succeeding the date of such Lender’s receipt of such written statement,
make available to the Administrative Agent, in immediately available funds, for
the account of the Swing Loan Lender, the amount specified in such
statement.  Upon such payment by a
Lender, such Lender shall, except as provided in clause (f) below,
be deemed to have made a Revolving Loan to the Borrower.  The Administrative Agent shall use such funds
to repay the Swing Loans to the Swing Loan Lender.  To the extent that any Lender fails to make
all or part of such payment available to

 

37

 

the
Administrative Agent for the account of the Swing Loan Lender, the Borrower
shall repay such Swing Loan on demand.

 

(f)                                    Upon
the occurrence of a Default under Section 9.1(f) (Events
of Default), each Lender shall acquire, without recourse or
warranty, an undivided participation in each Swing Loan otherwise required to
be repaid by such Lender pursuant to clause (e) above,
which participation shall be in a principal amount equal to such Lender’s
Ratable Portion of such Swing Loan, by paying to the Swing Loan Lender on the
date on which such Lender would otherwise have been required to make a payment
in respect of such Swing Loan pursuant to clause (e) above,
in immediately available funds, an amount equal to such Lender’s Ratable
Portion of such Swing Loan.  If all or
part of such amount is not in fact made available by such Lender to the Swing
Loan Lender on such date, the Swing Loan Lender shall be entitled to recover
any such unpaid amount on demand from such Lender together with interest
accrued from such date at the Federal Funds Rate for the first Business Day
after such payment was due and thereafter at the rate of interest then
applicable to Base Rate Loans.

 

(g)                                 From
and after the date on which any Lender (i) is deemed to have made a
Revolving Loan pursuant to clause (e) above with respect to any Swing Loan or (ii) purchases an
undivided participation interest in a Swing Loan pursuant to clause (f) above, the Swing Loan Lender shall
promptly distribute to such Lender such Lender’s Ratable Portion of all
payments of principal of and interest received by the Swing Loan Lender on
account of such Swing Loan other than those received from a Lender pursuant to clause (e) or (f) above.

 

Section 2.4                                   Letters of Credit

 

(a)                                  On
the terms and subject to the conditions contained in this Agreement, each
Issuer agrees to Issue one or more Letters of Credit at the request of, and for
the account of, the Borrower to support obligations of the Borrower, any of its
Subsidiaries or any Permitted Joint Ventures from time to time on any Business
Day during the period commencing on the Effective Date and ending on the
earlier of the Revolving Credit Termination Date and 30 days
prior to the Scheduled Termination Date; provided, however, that no Issuer shall Issue any Letter of Credit
upon the occurrence of any of the following:

 

(i)                                     any
order, judgment or decree of any Governmental Authority or arbitrator shall
purport by its terms to enjoin or restrain such Issuer from Issuing such Letter
of Credit or any Requirement of Law applicable to such Issuer or any request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over such Issuer shall prohibit, or request that
such Issuer refrain from, the Issuance of letters of credit generally or such
Letter of Credit in particular or shall impose upon such Issuer with respect to
such Letter of Credit any restriction or reserve or capital requirement (for
which such Issuer is not otherwise compensated) not in effect on the date of
this Agreement or result in any unreimbursed loss, cost or expense that was not
applicable, in effect or known to such Issuer as of the date of this Agreement
and that such Issuer in good faith deems material to it;

 

(ii)                                  such
Issuer shall have received written notice from the Administrative Agent, any
Lender or the Borrower, on or prior to the requested date of Issuance of such
Letter of Credit, that one or more of the applicable conditions contained in Section 3.1  (Conditions Precedent to
Effectiveness) (with respect to an issuance on the Effective Date)
or 3.2 (Conditions Precedent to Each Loan and Letter
of Credit) is not

 

38

 

then satisfied or
duly waived in accordance with Section 11.1
(Amendments, Waivers, Etc.);

 

(iii)                               after
giving effect to the Issuance of such Letter of Credit, the aggregate
Outstandings would exceed the aggregate Commitments in effect at such time;

 

(iv)                              any
fees due in connection with a requested Issuance have not been paid;

 

(v)                                 such
Letter of Credit is requested to be issued in a form that is not acceptable to
such Issuer, in its sole discretion exercised in a commercially reasonable
manner;

 

(vi)                              with
respect to any requested Letter of Credit denominated in an Alternative
Currency, the Administrative Agent and the Issuer have each approved such
Issuance and the Issuer receives notice from the Administrative Agent at or
before 11:00 a.m. (New York time) on the date of the proposed Issuance of
such Letter of Credit that, immediately after giving effect to the Issuance of
such Letter of Credit, the sum of the Dollar Equivalent of the Letter of Credit
Obligations at such time in respect of each Letter of Credit denominated in an
Alternative Currency would exceed $75,000,000 on the date of such proposed
Issuance; or

 

(vii)                           with
respect to any requested Letter of Credit denominated in an Alternative
Currency that is not the lawful currency of one of the G-10 Countries, the
Issuer receives notice from the Administrative Agent at or before 11:00 a.m.
(New York time) on the date of the proposed Issuance of such Letter of Credit
that, immediately after giving effect to the Issuance of such Letter of Credit,
the sum of the Dollar Equivalent of the Letter of Credit Obligations at such
time in respect of each Letter of Credit denominated in an Alternative Currency
that is not the lawful currency of one of the G-10 Countries would exceed
$50,000,000 on the date of such proposed Issuance.

 

None of the Lenders
(other than the Issuers in their capacity as such) shall have any obligation to
Issue any Letter of Credit.  The Borrower
and the Issuers acknowledge the issuance of the Existing Letters of Credit
prior to the Effective Date in accordance with the terms of the Existing Credit
Agreement and agree that such Existing Letters of Credit outstanding on the
Effective Date shall continue to be outstanding pursuant to the terms and
conditions and for all purposes of this Agreement and the other Loan Documents.

 

(b)                                 In
no event shall the expiration date of any Letter of Credit be less than five
days prior to the Scheduled Termination Date; provided,
however, that any Letter of Credit with
a fixed term may provide for the renewal thereof for additional periods equal
to such term.

 

(c)                                  In
connection with the Issuance of each Letter of Credit, the Borrower shall give
the relevant Issuer and the Administrative Agent at least two Business Days’
prior written notice, in substantially the form of Exhibit E
(Form of Letter of Credit Request)
(or in such other written or electronic form as is acceptable to the Issuer),
of the requested Issuance of such Letter of Credit (a “Letter of
Credit Request”).  Such notice
shall be irrevocable on and after the Issuance of such Letter of Credit (and,
prior to such Issuance, may be revoked only with the consent of the Issuer) and
shall specify the Issuer of such Letter of Credit, the stated amount of the
Letter of Credit requested, which stated amount (or, if such Letter of Credit
is to be

 

39

 

denominated
in an Alternative Currency, the Dollar Equivalent of such stated amount) shall
not be less than $100,000, the date of Issuance of such requested Letter of
Credit, the date on which such Letter of Credit is to expire (which date shall
be a Business Day), and, in the case of an issuance, the Person for whose benefit
the requested Letter of Credit is to be issued. 
Such notice, to be effective, must be received by the relevant Issuer
and the Administrative Agent not later than 1:00 p.m. (New York time) on
the second Business Day prior to the requested Issuance of such Letter of
Credit.

 

(d)                                 Subject
to the satisfaction of the conditions set forth in this Section 2.4,
the relevant Issuer shall, on the requested date, Issue a Letter of Credit on
behalf of the Borrower in accordance with such Issuer’s usual and customary
business practices.  No Issuer shall
Issue any Letter of Credit in the period commencing on the first Business Day
after it receives written notice from the Administrative Agent or any Lender
that one or more of the conditions precedent contained in Section 3.2
(Conditions Precedent to Each Loan and Letter of
Credit) shall not on such date be satisfied, and ending when such
conditions are satisfied.  The relevant
Issuer shall not otherwise be required to determine that, or take notice
whether, the conditions precedent set forth in Section 3.2
(Conditions Precedent to Each Loan and Letter of
Credit) have been satisfied in connection with the Issuance of any
Letter of Credit.

 

(e)                                  If
requested by the relevant Issuer, prior to the issuance of each Letter of
Credit by such Issuer, and as a condition of such Issuance and of the
participation of each Lender in the Letter of Credit Obligations arising with
respect thereto, the Borrower shall have delivered to such Issuer a letter of
credit reimbursement agreement, in such form as the Issuer may employ in its
ordinary course of business for its own account (a “Letter of
Credit Reimbursement Agreement”), signed by the Borrower, and such
other documents or items as may be required pursuant to the terms thereof.  In the event of any conflict between the
terms of any Letter of Credit Reimbursement Agreement and this Agreement, the
terms of this Agreement shall govern.

 

(f)                                    Each
Issuer shall:

 

(i)                                     give
the Administrative Agent written notice (or telephonic notice confirmed
promptly thereafter in writing, which writing may be a telecopy or, if
consented to by the Administrative Agent, electronic mail) of the Issuance or
renewal of a Letter of Credit issued by it, of all drawings under a Letter of
Credit issued by it and the payment (or the failure to pay when due) by the
Borrower of any Reimbursement Obligation when due (which notice the
Administrative Agent shall promptly transmit by telecopy and electronic mail or
similar transmission to each Lender and Tranche B Investor);

 

(ii)                                  upon
the request of any Lender, furnish to such Lender copies of any Letter of
Credit Reimbursement Agreement to which such Issuer is a party and such other
documentation as may reasonably be requested by such Lender; and

 

(iii)                               no
later than 5 Business Days following the last day of each calendar quarter
(commencing with the calendar quarter ending September 30, 2005), provide
to the Administrative Agent (and the Administrative Agent shall provide a copy
to each Lender or Tranche B Investor requesting the same) and the Borrower
separate schedules for Documentary and Standby Letters of Credit issued by it
(together with a schedule of Surety Bond Letters of Credit issued by it),
in form and substance reasonably satisfactory to the Administrative Agent,
setting forth the aggregate Letter of Credit 

 

40

 

Obligations
outstanding at the end of each calendar quarter and any information requested
by the Borrower or the Administrative Agent relating thereto.

 

(g)                                 Effective
with respect to the Existing Letters of Credit upon the occurrence of the
Effective Date, and otherwise effective immediately upon the issuance by an
Issuer of a Letter of Credit in accordance with the terms and conditions of
this Agreement, each Issuer shall be deemed to have sold and transferred to
each Lender, and each Lender shall be deemed irrevocably and unconditionally to
have purchased and received from each Issuer, without recourse or warranty, an
undivided interest and participation, to the extent of such Lender’s Ratable
Portion of the Commitments, in such Letter of Credit and the obligations of the
Borrower with respect thereto (including all Letter of Credit Obligations with
respect thereto) and any security therefor and guaranty pertaining thereto.

 

(h)                                 The
Borrower agrees to pay to the Issuer of any Letter of Credit the amount of all
Reimbursement Obligations owing to such Issuer under any Letter of Credit
issued for its account no later than the date (the “Reimbursement
Date”) that is the next succeeding Business Day after the Borrower
receives written notice from such Issuer that payment has been made under such
Letter of Credit, irrespective of any claim, set-off, defense or other right
that the Borrower may have at any time against such Issuer or any other
Person.  If any Issuer makes any payment
under any Letter of Credit and the Borrower shall not have repaid such amount
to such Issuer pursuant to this clause (h) or
any such payment by the Borrower in respect thereof is rescinded or set aside
for any reason, such Reimbursement Obligation shall be payable on demand with
interest thereon computed at the rate of interest applicable during such period
to Revolving Loans that are Base Rate Loans, and such Issuer shall promptly notify
the Administrative Agent, and the Administrative Agent shall promptly notify
each Lender and each Tranche B Investor of such failure, and each Lender
shall promptly and unconditionally pay to the Administrative Agent for the
account of such Issuer the amount of such Lender’s Ratable Portion of such
payment in Dollars (or the Dollar Equivalent thereof if such payment was made
in an Alternative Currency) and in immediately available funds.  If the Administrative Agent so notifies such
Lender prior to 11:00 a.m. (New York time) on any Business Day, such
Lender shall make available to the Administrative Agent for the account of such
Issuer its Ratable Portion of the amount of such payment on such Business Day
in immediately available funds.  Upon
such payment by a Lender, such Lender shall, except during the continuance of a
Default or Event of Default under Section 9.1(f) (Events
of Default) and notwithstanding whether or not the conditions
precedent set forth in Section 3.2
(Conditions Precedent to Each Loan and Letter of Credit) shall have
been satisfied (which conditions precedent the Lenders hereby irrevocably
waive), be deemed to have made a Revolving Loan to the Borrower in the
principal amount of such payment. 
Whenever any Issuer receives from the Borrower a payment of a
Reimbursement Obligation as to which the Administrative Agent has received for
the account of such Issuer any payment from a Lender pursuant to this clause (h), such Issuer shall pay to the Administrative
Agent and the Administrative Agent shall promptly pay to such Lender, in
immediately available funds, an amount equal to such Lender’s Ratable Portion
of the amount of such payment adjusted, if necessary, to reflect the respective
amounts the Lenders have paid in respect of such Reimbursement Obligation (and,
if such Lender is the Fronting Lender, such Lender shall apply such amount as
provided in Section 2.1(b)(ii) (The Commitments;
Credit-Linked Deposit Account)).

 

(i)                                     The
Borrower’s obligation to pay each Reimbursement Obligation and the obligations
of the Lenders to make payments to the Administrative Agent for the account of
the Issuers with respect to Letters of Credit shall be absolute, unconditional
and irrevocable, and

 

41

 

shall
be performed strictly in accordance with the terms of this Agreement, under any
and all circumstances whatsoever, including the occurrence of any Default or
Event of Default, and irrespective of any of the following:

 

(i)                                     any
lack of validity or enforceability of any Letter of Credit or any Loan
Document, or any term or provision therein;

 

(ii)                                  any
amendment or waiver of or any consent to departure from all or any of the
provisions of any Letter of Credit or any Loan Document;

 

(iii)                               the
existence of any claim, set-off, defense or other right that the Borrower, any
other party guaranteeing, or otherwise obligated with, the Borrower, any
Subsidiary or other Affiliate thereof or any other Person may at any time have
against the beneficiary under any Letter of Credit, any Issuer, the
Administrative Agent, any Lender any Tranche B Investor or any other
Person, whether in connection with this Agreement, any other Loan Document or
any other related or unrelated agreement or transaction;

 

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

 

(v)                                 payment
by the Issuer under a Letter of Credit against presentation of a draft or other
document that does not comply with the terms of such Letter of Credit; and

 

(vi)                              any
other act or omission to act or delay of any kind of the Issuer, the Lenders,
the Tranche B Investors, the Administrative Agent or any other Person or
any other event or circumstance whatsoever, whether or not similar to any of
the foregoing, that might, but for the provisions of this Section 2.4,
constitute a legal or equitable discharge of the Borrower’s obligations
hereunder.

 

Any action taken or
omitted to be taken by the relevant Issuer under or in connection with any
Letter of Credit, if taken or omitted in the absence of gross negligence or
willful misconduct, shall not put such Issuer under any resulting liability to
the Borrower, any Tranche B Investor or any Lender.  In determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof, the
Issuer may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary and, in making any payment under any Letter of
Credit, the Issuer may rely exclusively on the documents presented to it under
such Letter of Credit as to any and all matters set forth therein, including
reliance on the amount of any draft presented under such Letter of Credit,
whether or not the amount due to the beneficiary thereunder equals the amount
of such draft and whether or not any document presented pursuant to such Letter
of Credit proves to be insufficient in any respect, if such document on its
face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever.  Any noncompliance in
any immaterial respect of the documents presented under such Letter of Credit
with the terms thereof shall, in any case, be deemed not to constitute willful
misconduct or gross negligence of the Issuer.  Notwithstanding the foregoing,
nothing in this clause (i) shall be deemed
to release any Issuer from liability with respect to its gross negligence or
willful misconduct.

 

42

 

(j)                                     If
and to the extent such Lender shall not have so made its Ratable Portion of the
amount of the payment required by clause (h) above available to the Administrative Agent for the account of
such Issuer, such Lender agrees to pay to the Administrative Agent for the
account of such Issuer forthwith on demand any amount so unpaid together with
interest thereon, for the first Business Day after payment was first due at the
Federal Funds Rate, and thereafter until such amount is repaid to the
Administrative Agent for the account of such Issuer, at the rate per annum applicable to Base Rate Loans.  The failure of any Lender to make available
to the Administrative Agent for the account of such Issuer its Ratable Portion
of any such payment shall not relieve any other Lender of its obligation
hereunder to make available to the Administrative Agent for the account of such
Issuer its Ratable Portion of any payment on the date such payment is to be
made, but no Lender shall be responsible for the failure of any other Lender to
make available to the Administrative Agent for the account of the Issuer such
other Lender’s Ratable Portion of any such payment.

 

(k)                                  The
Issuer shall determine the Dollar Equivalent of the maximum stated amount of
each Letter of Credit denominated in an Alternative Currency and each
obligation due with respect thereto, and a determination thereof by the Issuer
shall be conclusive absent manifest error. 
The Dollar Equivalent of each Reimbursement Obligation with respect to a
drawn Letter of Credit shall be calculated on the date the Issuer pays the draw
giving rise to such Reimbursement Obligation. 
The Issuer shall determine or redetermine the Dollar Equivalent of the
maximum stated amount of each Letter of Credit denominated in an Alternative
Currency, as applicable, on the date of each Issuance of such Letter of Credit
and on the last Business Day of each calendar month thereafter and the Issuer
shall promptly notify the Administrative Agent of the determination thereof.  The Issuer may determine or redetermine the
Dollar Equivalent of any Letter of Credit denominated in an Alternative
Currency at any time upon request of any Lender, Tranche B Investor or the
Administrative Agent.

 

Section 2.5                                   Reduction and
Termination of the Commitments

 

(a)                                  The
Borrower may, upon at least three Business Days’ prior notice to the
Administrative Agent, terminate in whole or reduce in part the unused portions
of the respective Commitments of the Lenders; provided,
however, that (i) each partial
reduction shall be in an aggregate amount that is an integral multiple of
$5,000,000, (ii) if at the time of such reduction any Loans are
outstanding, each such reduction shall be made pro rata between the
Tranche A Facility and the Tranche B Facility, ratably in accordance with each
Lender’s Commitment, and (iii) if any such reduction is to be made in a
non pro rata manner as between the Tranche A Facility and the Tranche B
Facility (a “Non Pro Rata Commitment Reduction”)
at a time when Letters of Credit are outstanding, then, as a condition to the
effectiveness of such Non Pro Rata Commitment Reduction, the Administrative
Agent shall have received a certificate executed on behalf of the Borrower by a
Responsible Officer to the effect that, as of the date of such Non Pro Rata Commitment
Reduction, the statements set forth in clauses (b)(i) and
(b)(ii) of Section 3.2
(Conditions Precedent to Each Loan and Letter of Credit) are true
and correct.  On and as of the date of
any Non Pro Rata Commitment Reduction, the Letter of Credit Undrawn Amounts at
such time shall be reallocated to the Lenders in accordance with their new
respective Commitments.  A notice of
termination of the Commitments may state that such notice is conditioned upon
the effectiveness of other credit facilities, and if any notice so states it
may be revoked by the Borrower by notice to the Administrative Agent on or
prior to the date specified for the termination of the Commitments that the
refinancing condition has not been met and the termination is to be revoked.

 

43

 

(b)                                 Subject
to the proviso set forth in Section 2.9(b) (Mandatory
Prepayments), the then current Commitments shall be reduced on each
date on which a prepayment of Loans is made pursuant to Section 2.9(a) (Mandatory
Prepayments) or would be required to be made had the outstanding
Loans equaled the Commitments then in effect, in each case in the amount of
such prepayment (or deemed prepayment) (and the Commitment of each Lender shall
be reduced by its Ratable Portion of such amount).  Each such reduction shall be made pro rata
between the Tranche A Facility and the Tranche B Facility.

 

(c)                                  Upon
any reduction of the Commitments under the Tranche B Facility pursuant to clause (a) or (b) above,
the Tranche B Deposit Amount of each Tranche B Investor shall automatically be
reduced by its Tranche B Ratable Portion of such reduction.

 

(d)                                 In
connection with any Non Pro Rata Commitment Reduction of the Commitments under
the Tranche B Facility, at the request of the Borrower and with the prior
written consent of the Administrative Agent (not to be unreasonably withheld),
Commitments under the Tranche A Facility may be increased by all or a
portion of such Non Pro Rata Commitment Reduction, with such increase to be allocated
to one or more Persons (which may be one or more Lenders or otherwise as is
reasonably acceptable to the Borrower and the Administrative Agent) who agree
in their sole discretion to accept such Commitments.  Each of the parties hereto hereby agrees that
the Administrative Agent may take any and all actions as may be reasonably
necessary to ensure that, after giving effect to any increase in the
Commitments under the Tranche A Facility pursuant to this clause (d),
the outstanding Tranche A Loans (if any) are held by the Tranche A Lenders in
accordance with their new Ratable Portions. 
This may be accomplished at the discretion of the Administrative Agent (i) by
requiring the outstanding Tranche A Loans to be prepaid with the proceeds of a
new Tranche A Borrowing, (ii) by causing non-increasing Tranche A Lenders
to assign portions of their outstanding Tranche A Loans to increasing Tranche A
Lenders or (iii) by any combination of the foregoing.  Any prepayment or assignment described in
this clause (d) shall be subject to Section 2.14(e) (Special Provisions Governing Eurodollar Rate
Loans), but otherwise without premium or penalty.

 

Section 2.6                                   Repayment of Loans

 

The Borrower promises to
repay (in cash, in full and in immediately available funds) the entire unpaid
principal amount of the Revolving Loans and the Swing Loans on the Scheduled
Termination Date (it being understood that other provisions of this Agreement
may require all or part of such Obligations to be repaid earlier).  Each repayment shall be made pro rata between
the Tranche A Facility and the Tranche B Facility, in accordance with
each Lender’s Commitment.

 

Section 2.7                                   Evidence of Debt

 

(a)                                  Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing Indebtedness of the Borrower to such Lender resulting from
each Loan of such Lender from time to time, including the amounts of principal
and interest payable and paid to such Lender from time to time under this
Agreement.

 

(b)                                 The
Administrative Agent shall maintain accounts in accordance with its usual
practice in which it shall record (i) the amount of each Loan made and, if
a Eurodollar Rate Loan, the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable by the Borrower to each
Lender hereunder and (iii) the amount of any sum received by

 

44

 

the
Administrative Agent hereunder from the Borrower, whether such sum constitutes
principal or interest (and the type of Loan to which it applies), fees,
expenses or other amounts due under the Loan Documents and each Lender’s share
thereof, if applicable.

 

 

(c)                                  The
entries made in the accounts maintained pursuant to clauses (a) and
(b) above shall, to the extent
permitted by applicable law, be prima facie
evidence of the existence and amounts of the obligations recorded therein; provided, however, that
the failure of any Lender or the Administrative Agent to maintain such accounts
or any error therein shall not in any manner affect the obligations of the
Borrower to repay the Loans in accordance with their terms.

 

(d)                                 Notwithstanding
any other provision of the Agreement, if any Lender requests that the Borrower
execute and deliver a promissory note or notes payable to such Lender in order
to evidence the Indebtedness owing to such Lender by the Borrower hereunder,
the Borrower shall promptly execute and deliver a Note or Notes to such Lender
evidencing any Loans of such Lender, substantially in the form of Exhibit B  (Form of Promissory
Note).

 

Section 2.8                                   Optional Prepayments

 

The Borrower may, at any
time, prepay the outstanding principal amount of the Revolving Loans and Swing
Loans in whole or in part; provided, however, that if any prepayment of any Eurodollar Rate Loan
is made by the Borrower other than on the last day of an Interest Period for
such Loan, the Borrower shall also pay any amounts owing pursuant to Section 2.14(e) (Breakage Costs); provided, further, that
each partial prepayment shall be in an aggregate principal amount that is an
integral multiple of $5,000,000 and shall be applied pro rata between the
Tranche A Facility and the Tranche B Facility, in accordance with
each Lender’s Commitment.  Upon the
giving of such notice of prepayment, the principal amount of Revolving Loans
specified to be prepaid shall become due and payable on the date specified for
such prepayment.

 

Section 2.9                                   Mandatory
Prepayments

 

(a)                                  Upon
receipt by the Borrower or any of its Subsidiaries of Net Cash Proceeds arising
from an Asset Sale, Property Loss Event or Equity Issuance, the Borrower shall
immediately prepay the Loans (or, if there are no Loans then outstanding and a
Default or Event of Default shall be continuing, provide cash collateral in
respect of Letters of Credit) in an amount equal to 100% of such Net Cash
Proceeds.  Any such mandatory prepayment
shall be applied in accordance with clause (b) below.

 

(b)                                 Any
prepayments made by the Borrower required to be applied in accordance with this
clause (b) shall be applied as
follows:  first,
to repay the outstanding principal balance of the Swing Loans until such Swing
Loans shall have been repaid in full; second, to
repay the outstanding principal balance of the Revolving Loans (pro rata
between the Tranche A Facility and the Tranche B Facility in
accordance with each Lender’s Commitment) until such Revolving Loans shall have
been paid in full; and then, if a
Default or Event of Default shall be continuing, to provide cash collateral for
any Letter of Credit Obligations in the manner set forth in Section 9.3  (Actions in Respect of
Letters of Credit) until all such Letter of Credit Obligations have
been fully cash collateralized in the manner set forth therein.  All repayments required to be applied in
accordance with this clause (b) (other
than of Net Cash Proceeds of (i) Asset Sales of the Specified Property,
made in accordance with Section 8.4(d) (Sale
of Assets),

 

45

 

and (ii) unless
a Default or an Event of Default shall be continuing, Equity Issuances) shall
result in a permanent reduction in the Commitments to the extent provided in Section 2.5(b) (Reduction and Termination of the Commitments);
provided, however, that, if such prepayment was made from the Net Cash
Proceeds arising from a Reinvestment Event, the Commitments shall not be
reduced by such prepayment to the extent of the Reinvestment Deferred Amount
corresponding to such Reinvestment Event until the Reinvestment Prepayment Date
corresponding thereto and, then, the Commitments shall be reduced only to the
extent of the Reinvestment Prepayment Amount applicable to such Reinvestment
Event, if any.

 

(c)                                  If
at any time, the aggregate principal amount of Outstandings exceeds the
aggregate Commitments at such time, the Borrower shall forthwith prepay the
Swing Loans first and then the Revolving Loans then outstanding in an amount
equal to such excess.  If any such excess
remains after repayment in full of the aggregate outstanding Swing Loans and
Revolving Loans, the Borrower shall provide cash collateral for the Letter of
Credit Obligations in the manner set forth in Section 9.3 (Actions in Respect of Letters of Credit)
in an amount equal to 105% of such excess.

 

Section 2.10                            Interest

 

(a)                                  Rate of Interest.  All
Loans and the outstanding amount of all other Obligations shall bear interest,
in the case of Loans, on the unpaid principal amount thereof from the date such
Loans are made and, in the case of such other Obligations, from the date such
other Obligations are due and payable until, in all cases, paid in full, except
as otherwise provided in clause (c) below,
as follows:

 

(i)                                     if
a Base Rate Loan or such other Obligation, at a rate per annum
equal to the sum of (A) the Base Rate as in effect from time to time plus (B) the Applicable Margin; and

 

(ii)                                  if a Eurodollar Rate Loan, at a rate per annum equal to the sum of (A) the Eurodollar Rate
for such Eurodollar Rate Loan determined for the applicable Interest Period plus (B) the Applicable Margin in effect from time to
time during such Eurodollar Interest Period.

 

(b)                                 Interest Payments. (i) Interest accrued on each Base
Rate Loan shall be payable in arrears (A) in respect of interest that has
accrued during the Initial Period, on the last Business Day of the Initial
Period, (B) thereafter, on the last Business Day of each calendar quarter,
commencing on the first such day following the making of such Base Rate Loan
and (C) if not previously paid in full, at maturity (whether by
acceleration or otherwise) of such Base Rate Loan, (ii) interest accrued
on each Eurodollar Rate Loan shall be payable in arrears (A) on the last
day of each Interest Period applicable to such Loan and, if such Interest
Period has a duration of more than three months, on each day during such
Interest Period occurring every three months from the first day of such
Interest Period, (B) upon the payment or prepayment thereof in full or in
part and (C) if not previously paid in full, at maturity (whether by
acceleration or otherwise) of such Eurodollar Rate Loan and (iii) interest
accrued on the amount of all other Obligations shall be payable on demand from
and after the time such Obligation becomes due and payable (whether by
acceleration or otherwise).

 

(c)                                  Default Interest. 
Notwithstanding the rates of interest specified in clause (a) above
or elsewhere herein, effective immediately upon the occurrence of an Event of

 

46

 

Default
and for as long thereafter as such Event of Default shall be continuing, the
principal balance of all Loans and the amount of all other Obligations then due
and payable shall, upon the election of the Required Lenders (except with
respect to an Event of Default occurring under Section 9.1(f) (Events
of Default), in which case such interest rate increase shall be
immediate), bear interest at a rate that is two percent per annum
in excess of the rate of interest applicable to such Loans or other Obligations
from time to time.

 

Section 2.11                            Conversion/Continuation
Option

 

(a)                                  The
Borrower may elect (i) at any time on any Business Day to convert Base
Rate Loans (other than Swing Loans) or any portion thereof to Eurodollar Rate
Loans and (ii) at the end of any applicable Interest Period, to convert
Eurodollar Rate Loans or any portion thereof into Base Rate Loans or to
continue such Eurodollar Rate Loans or any portion thereof for an additional
Interest Period; provided, however,
that the aggregate amount of the Eurodollar Rate Loans for each Interest Period
must be in an amount that is an integral multiple of $1,000,000.  Each conversion or continuation shall be
allocated among the Loans of each Lender in accordance with such Lender’s
Ratable Portion.  Each such election
shall be in substantially the form of Exhibit F  (Form of Notice of Conversion or Continuation) (a “Notice of Conversion or Continuation”) and shall be made by
giving the Administrative Agent at least three Business
Days’ prior written notice (or telephonic notice promptly conformed in writing)
specifying, in each case, (A) the amount and type of Loan being converted
or continued, (B) in the case of a conversion to or a continuation of
Eurodollar Rate Loans, the applicable Interest Period and (C) in the case
of a conversion, the date of conversion.

 

(b)                                 The
Administrative Agent shall promptly notify each Lender of its receipt of a
Notice of Conversion or Continuation and of the options selected therein.  Notwithstanding the foregoing, no conversion
in whole or in part of Base Rate Loans to Eurodollar Rate Loans, and no
continuation in whole or in part of Eurodollar Rate Loans upon the expiration
of any applicable Interest Period, shall be permitted at any time at which (i) a
Default or an Event of Default shall have occurred and be continuing or (ii) the
continuation of, or conversion into, a Eurodollar Rate Loan would violate any
provision of Section 2.14  (Special Provisions Governing Eurodollar Rate Loans).  If, within the time period required under the
terms of this Section 2.11, the
Administrative Agent does not receive a Notice of Conversion or Continuation
from the Borrower containing a permitted election to continue any Eurodollar
Rate Loans for an additional Interest Period or to convert any such Loans,
then, upon the expiration of the applicable Interest Period, such Loans shall
be automatically converted to Base Rate Loans. 
Each Notice of Conversion or Continuation shall be irrevocable.

 

Section 2.12                            Fees

 

(a)                                  Commitment Fees.  The
Borrower agrees to pay to the Administrative Agent for the account of each
Lender a commitment fee (the “Commitment Fee”),
accruing at a rate per annum equal
to the Applicable Commitment Fee Rate on the actual daily amount by which the
Commitment of such Lender exceeds such Lender’s Ratable Portion of the sum of (i) the
outstanding principal amount of Revolving Loans plus (ii) the
outstanding amount of the Letter of Credit Obligations during the period from
the Effective Date until the Revolving Credit Termination Date, payable in
arrears (A) on the last Business Day of each calendar quarter (commencing
with the calendar quarter ending September 30, 2005) and (B) on the
Revolving Credit Termination Date.

 

47

 

(b)                                 Letter of Credit Fees. 
The Borrower agrees to pay the following amounts with respect to Letters
of Credit issued by any Issuer:

 

(i)                                     to
the Administrative Agent for the account of each Issuer of a Letter of Credit,
with respect to each Letter of Credit issued by such Issuer, an issuance fee in
an amount agreed to between the Issuer and the Borrower, payable in arrears (A) on
the last Business Day of each calendar quarter (commencing with the calendar
quarter ending September 30, 2005) and (B) on the Revolving Credit
Termination Date;

 

(ii)                                  to
the Administrative Agent for the account and ratable benefit of the Lenders,
with respect to each Letter of Credit, a fee (the “Letter of
Credit Participation Fee”) accruing at a rate per annum
equal to the Applicable Margin for Revolving Loans that are Eurodollar Rate
Loans on the maximum amount available from time to time to be drawn under such
Letter of Credit (in the case of any Letter of Credit denominated in a currency
other than Dollars, based on the Dollar Equivalent of the average undrawn
amount thereof on the payment date for such fee), payable in arrears (A) on
the last Business Day of each calendar quarter (commencing with the calendar
quarter ending September 30, 2005) and (B) on the Revolving Credit
Termination Date; provided, however, that during the continuance of an Event of Default, such
fee shall be increased, upon the election of the Required Lenders (except with
respect to an Event of Default occurring under Section 9.1(f) (Events
of Default), in which case such increase shall be immediate), by two
percent per annum and shall be payable on
demand; and

 

(iii)                               to
the Issuer of any Letter of Credit, with respect to the issuance, amendment or
transfer of each Letter of Credit and each drawing made thereunder, documentary
and processing charges in accordance with such Issuer’s standard schedule for
such charges in effect at the time of issuance, amendment, transfer or drawing,
as the case may be.

 

(c)                                  Fronting Fee.  The Borrower agrees to pay to the Fronting
Lender a fronting fee on the actual daily amount of the Commitment of the
Fronting Lender (the “Fronting Fee”)
from the Effective Date until the Revolving Credit Termination Date at an
annual rate of one-tenth of one percent (0.10%), payable in arrears (i) on
the last Business Day of each calendar quarter (commencing with the
calendar quarter ending September 30, 2005) and (ii) on the Revolving Credit Termination Date.

 

(d)                                 Additional Fees.  The
Borrower has agreed to pay to the Administrative Agent and the Lenders
additional fees, the amount and dates of payment of which are embodied in the
Fee Letter.

 

(e)                                  Payment of Fees to Tranche B Investors.  The Fronting Lender hereby agrees to pay to
each Tranche B Investor such Tranche B Investor’s Tranche B Ratable Portion of
each of the Commitment Fee, the Letter of Credit Participation Fee, the
Applicable Margin and the Fronting Fee received by the Fronting Lender in its
capacity as such, in each case promptly following receipt of each of the same
from (and only to the extent each such fee is received from) the Borrower or
any other Loan Party.

 

48

 

Section 2.13                            Payments and Computations

 

(a)                                  The
Borrower shall make each payment hereunder (including fees and expenses) not
later than 3:00 p.m. (New York time) on the day when due, in Dollars, to
the Administrative Agent at its address referred to in Section 11.8
(Notices, Etc.) in immediately available funds without set-off or
counterclaim.  The Administrative Agent
shall promptly thereafter cause to be distributed immediately available funds
relating to the payment of principal, interest or fees to the Lenders, in
accordance with the application of payments set forth in clauses (e) or (f) below, as applicable, for the account of their
respective Applicable Lending Offices; provided, however, that amounts payable pursuant to Section 2.15 (Capital Adequacy), Section 2.16
(Taxes) or Section 2.14(c) (Increased
Costs) or (d) (Illegality)
shall be paid only to any affected Lender (or, if to the Fronting Lender, only
to the extent of the interest of the affected Tranche B Investor) and
amounts payable with respect to Swing Loans shall be paid only to the Swing
Loan Lender.  Payments received by the
Administrative Agent after 3:00 p.m. (New York time) shall be deemed to be
received on the next Business Day.

 

(b)                                 All
computations of interest and of fees shall be made by the Administrative Agent
on the basis of the actual number of days elapsed (in each case calculated to
include the first day but exclude the last day) (i) over a year of 365 or
366 days, as the case may be, in the case of interest accruing at the Base Rate
when the Base Rate is determined by reference to the Prime Rate, and (ii) over
a year of 360 days at all other times). Each determination by the
Administrative Agent of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.

 

(c)                                  Whenever
any payment hereunder shall be stated to be due on a day other than a Business
Day, the due date for such payment shall be extended to the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest or fees, as the case may be; provided, however, that
if such extension would cause payment to be made in the next calendar month,
such payment shall be made on the immediately preceding Business Day.  All repayments of any Revolving Loans shall
be applied as follows: first, to repay
such Loans outstanding as Base Rate Loans and then,
to repay such Loans outstanding as Eurodollar Rate Loans, with those Eurodollar
Rate Loans having earlier expiring Eurodollar Interest Periods being repaid
prior to those having later expiring Eurodollar Interest Periods.

 

(d)                                 Unless
the Administrative Agent shall have received notice from the Borrower prior to
the date on which any payment is due hereunder that the Borrower will not make
such payment in full, the Administrative Agent may assume that the Borrower has
made such payment in full to the Administrative Agent on such date and the
Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the amount then
due such Lender.  If and to the extent
that the Borrower shall not have made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon at the Federal Funds Rate, for the first Business Day, and,
thereafter, at the rate applicable to Base Rate Loans, for each day from the
date such amount is distributed to such Lender until the date such Lender
repays such amount to the Administrative Agent.

 

(e)                                  Subject
to the provisions of clause (f) below
(and except as otherwise provided in Section 2.9
(Mandatory Prepayments)), all payments
and any other amounts received by the Administrative Agent from or for the
benefit of the Borrower shall be applied as follows:

 

49

 

first,
to pay principal of, and interest on, any portion of the Loans the Administrative
Agent may have advanced pursuant to the express provisions of this Agreement on
behalf of any Lender, for which the Administrative Agent has not then been
reimbursed by such Lender or the Borrower, second, to pay
all other Obligations then due and payable, and third,
as the Borrower so designates.  Payments
in respect of Swing Loans received by the Administrative Agent shall be
distributed to the Swing Loan Lender; payments in respect of Revolving Loans
received by the Administrative Agent shall be distributed to each Lender in
accordance with such Lender’s Ratable Portion of the Commitments; and all
payments of fees and all other payments in respect of any other Obligation
shall be allocated among such of the Lenders and Issuers as are entitled thereto
and, for such payments allocated to the Lenders, in proportion to their
respective Ratable Portions.

 

(f)                                    The
Borrower hereby irrevocably waives the right to direct the application of any
and all payments in respect of the Obligations and any proceeds of Collateral
after the occurrence and during the continuance of an Event of Default and
agrees that, during such time, the Administrative Agent may, and, upon either (A) the
written direction of the Requisite Lenders or (B) the acceleration of the
Obligations pursuant to Section 9.2
(Remedies), shall, deliver a Blockage
Notice to each Deposit Account Bank and apply all payments in respect of any
Obligations and all funds on deposit in any Cash Collateral Account and all
other proceeds of Collateral in the following order:

 

First                      , to pay
interest on and then principal of any portion of (i) the Revolving Loans
that the Administrative Agent may have advanced on behalf of any Lender for
which the Administrative Agent has not then been reimbursed by such Lender or
the Borrower and (ii) the Reimbursement Obligations owed to any Issuer for
which such Issuer has not then been reimbursed by any Lender or the Borrower;

 

Second        , to pay interest on and
then principal of any Swing Loan;

 

Third                  , to pay
Obligations in respect of any expense reimbursements or indemnities (including
fees and expenses in respect of cash management services) then due to the
Administrative Agent;

 

Fourth          , to pay Obligations in
respect of any expense reimbursements or indemnities (including fees and
expenses in respect of cash management services) then due to the Lenders and
the Issuers;

 

Fifth                      , to pay
Obligations in respect of any fees then due to the Administrative Agent, the
Lenders and the Issuers;

 

Sixth                    , to pay
interest then due and payable in respect of the Revolving Loans (ratably to the
aggregate principal amount of such Revolving Loans) and Reimbursement
Obligations;

 

Seventh     , to pay or prepay principal
amounts on the Revolving Loans and Reimbursement Obligations and to provide
cash collateral for outstanding Letter of Credit Undrawn Amounts in the manner
described in Section 9.3  (Actions in Respect of Letters of Credit), ratably to the
aggregate principal amount of such Revolving Loans, Reimbursement Obligations
and Letter of Credit Undrawn Amounts; and

 

Eighth           , to the ratable
payment of all other Obligations;

 

50

 

provided, however, that if sufficient funds are not available to fund
all payments to be made in respect of any Obligation described in any of clauses first through eighth
above, the available funds being applied with respect to any such Obligation
(unless otherwise specified in such clause) shall be allocated to the payment
of such Obligations ratably, based on the proportion of the Administrative
Agent’s and each Lender’s or Issuer’s interest in the aggregate outstanding
Obligations described in such clauses. 
The order of priority set forth in clauses first
through eighth above may at any time and from
time to time be changed by the agreement of the Requisite Lenders without
necessity of notice to or consent of or approval by the Borrower, any Secured
Party that is not a Lender or Issuer or by any other Person that is not a
Lender or Issuer.  The order of priority
set forth in clauses first through fifth above may be changed
only with the prior written consent of the Administrative Agent in addition to
the Requisite Lenders.

 

(g)                                 At
the option of the Administrative Agent during the continuance of an Event of
Default, principal on the Swing Loans, Reimbursement Obligations, interest,
fees, expenses and other sums due and payable in respect of the Loans and
Protective Advances may be paid from the proceeds of Swing Loans or Revolving
Loans.  The Borrower hereby authorizes
the Swing Loan Lender to make such Swing Loans pursuant to Section 2.3(a) (Swing
Loans) and the Lenders to make such Revolving Loans pursuant to Section 2.2(a) (Borrowing Procedures) from time to
time in the Swing Loan Lender’s or such Lender’s discretion, that are in the
amounts of any and all principal, interest, fees, expenses and other sums
payable with respect to the Swing Loans, the Revolving Loans, Reimbursement
Obligations and Protective Advances, and further authorizes the Administrative
Agent to give the Lenders notice of any Borrowing with respect to such Swing
Loans and Revolving Loans and to distribute the proceeds of such Swing Loans
and Revolving Loans to pay such amounts. 
The Borrower agrees that all such Swing Loans and Revolving Loans so
made shall be deemed to have been requested by it (irrespective of the
satisfaction of the conditions in Section 3.2
(Conditions Precedent to Each Loan and Letter of
Credit), which conditions the Lenders irrevocably waive) and directs
that all proceeds thereof shall be used to pay such amounts.

 

Section 2.14                            Special Provisions
Governing Eurodollar Rate Loans

 

(a)                                  Determination of Interest Rate

 

The Eurodollar Rate for
each Interest Period for Eurodollar Rate Loans shall be determined by the
Administrative Agent pursuant to the procedures set forth in the definition of “Eurodollar Rate.”  The
Administrative Agent’s determination shall be presumed to be correct absent
manifest error and shall be binding on the Borrower.

 

(b)                                 Interest Rate Unascertainable, Inadequate or Unfair

 

If (i) the
Administrative Agent determines that adequate and fair means do not exist for
ascertaining the applicable interest rates by reference to which the Eurodollar
Rate then being determined is to be fixed or (ii) the Requisite Lenders
notify the Administrative Agent that the Eurodollar Rate for any Interest
Period (or, in respect of the Credit-Linked Deposit Return, the Initial Period
or any calendar quarter) will not adequately reflect the cost to the Lenders
and the Tranche B Investors of making or maintaining such Loans (or of
making, maintaining or receiving the corresponding Credit-Linked Deposits) for
such Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the Lenders, whereupon each Eurodollar Rate Loan shall
automatically, on the last day of the current Interest Period for such Loan,
convert into a Base Rate Loan and the obligations of the Lenders to make
Eurodollar Rate Loans or to convert

 

51

 

Base Rate Loans
into Eurodollar Rate Loans shall be suspended until the Administrative Agent
shall notify the Borrower that the Requisite Lenders have determined that the
circumstances causing such suspension no longer exist, which notice shall be
given promptly following such determination. 
Thereafter, the Borrower’s right to request, and the Lenders’
obligations, if any, to make Eurodollar Rate Loans shall be restored.

 

(c)                                  Increased Costs

 

If at any time any Lender
or Tranche B Investor determines that the introduction of, or any change
in or in the interpretation of, any law, treaty or governmental rule,
regulation or order (other than any change by way of imposition or increase of
reserve requirements included in determining the Eurodollar Rate or the compliance
by such Lender or Tranche B Investor with any guideline, request or
directive from any central bank or other Governmental Authority (whether or not
having the force of law), shall have the effect of increasing the cost to such
Lender or Tranche B Investor of agreeing to make or making, funding or
maintaining any Eurodollar Rate Loan or agreeing to make or making, funding,
maintaining or receiving any Credit-Linked Deposit, then the Borrower shall
from time to time, upon demand by such Lender or Tranche B Investor (with
a copy of such demand to the Administrative Agent and the Fronting Lender), pay
to the Administrative Agent for the account of such Lender or, in the case of a
Tranche B Investor, for the account of the Fronting Lender, additional amounts
sufficient to compensate such Lender or Tranche B Investor for such
increased cost.  A certificate as to the
amount of such increased cost shall be, together with supporting documents,
submitted to the Borrower and the Administrative Agent (and, in the case of a
Tranche B Investor, to the Fronting Lender) by such Lender or
Tranche B Investor and shall be conclusive and binding for all purposes,
absent manifest error.  Notwithstanding
the foregoing, except to the extent, if any, the change (or compliance) referred
to in such certificate shall be retroactive, the Borrower shall not be required
to compensate a Lender or Tranche B Investor pursuant to this clause (c) for any increased costs or reduction
incurred more than 180 days prior to the date of such certificate.  The Borrower shall pay such Lender or
Tranche B Investor the amount shown as due on any such certificate within
30 days after its receipt of the same.

 

(d)                                 Illegality

 

Notwithstanding any other
provision of this Agreement, if any Lender determines that the introduction of,
or any change in or in the interpretation of, any law, treaty or governmental
rule, regulation or order after the date of this Agreement shall make it
unlawful, or any central bank or other Governmental Authority shall assert that
it is unlawful, for any Lender or its Eurodollar Lending Office to make
Eurodollar Rate Loans or to continue to fund or maintain Eurodollar Rate Loans,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Administrative Agent, (i) the obligation of such Lender to
make or to continue Eurodollar Rate Loans and to convert Base Rate Loans into
Eurodollar Rate Loans shall be suspended, and each such Lender shall make a
Base Rate Loan as part of any requested Borrowing of Eurodollar Rate Loans and (ii) if
the affected Eurodollar Rate Loans are then outstanding, the Borrower shall
immediately convert each such Loan into a Base Rate Loan.  If, at any time after a Lender gives notice
under this Section 2.14(d), such Lender
determines that it may lawfully make Eurodollar Rate Loans, such Lender shall
promptly give notice of that determination to the Borrower and the
Administrative Agent, and the Administrative Agent shall promptly transmit the
notice to each other Lender.  The Borrower’s
right to request, and such Lender’s obligation, if any, to make Eurodollar Rate
Loans shall thereupon be restored.

 

52

 

(e)                                  Breakage Costs

 

In addition to all
amounts required to be paid by the Borrower pursuant to Section 2.10
(Interest), the Borrower shall
compensate each Lender and Tranche B Investor, upon demand, for all
losses, expenses and liabilities (including any loss or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired
by such Lender or Tranche B Investor to fund or maintain such Lender’s
Eurodollar Rate Loan to the Borrower or such Tranche B Investors’
Credit-Linked Deposit, but excluding any loss of the Applicable Margin or other
profit on the relevant Loans) that such Lender or Tranche B Investor may
sustain (i) if for any reason a proposed Borrowing or continuation of, or
conversion into, Eurodollar Rate Loans does not occur on a date specified
therefor in a Notice of Borrowing or a Notice of Conversion or Continuation
given by the Borrower or in a telephonic request by it for borrowing or
conversion or continuation or a successive Interest Period does not commence
after notice therefor is given pursuant to Section 2.11
(Conversion/Continuation Option), (ii) if
for any reason any Eurodollar Rate Loan is prepaid (including mandatorily
pursuant to Section 2.9  (Mandatory
Prepayments), by reason of an increase or reduction in Commitments
on a date that is not the last day of the applicable Interest Period, (iii) as
a consequence of a required conversion of a Eurodollar Rate Loan to a Base Rate
Loan as a result of any of the events indicated in clause (d) above,
(iv) as a consequence of any failure by the Borrower to repay Eurodollar
Rate Loans when required by the terms hereof or (v) if, for any reason,
the Fronting Lender is required to make any payment in respect of any
Credit-Linked Deposit or to reimburse any Tranche B Investor for any
similar loss, expense or liability in respect of any Credit-Linked
Deposit.  Without limiting the foregoing,
if any amount withdrawn from the Credit-Linked Deposit Account to reimburse the
Fronting Lender as provided herein shall be subsequently reimbursed to the
Fronting Lender by the Borrower or any other Loan Party other than on the last
day of a calendar quarter, the Fronting Lender shall invest the amount so
reimbursed in overnight or short-term cash equivalent investments until the end
of such calendar quarter and the Borrower shall pay to the Fronting Lender, upon
the Fronting Lender’s request therefor, the amount, if any, by which the
interest accrued on a like amount of the Credit-Linked Deposits at the
Eurodollar Rate for such calendar quarter shall exceed the interest earned
through the investment of the amount so reimbursed for the period from the date
of such reimbursement through the end of such calendar quarter, as determined
by the Fronting Lender (such determination to be conclusive absent manifest
error) and set forth in the request for payment delivered to the Borrower.  If the Borrower shall fail to pay an amount
due under the preceding sentence, the interest payable by the Fronting Lender
to the Tranche B Investors on their Credit-Linked Deposits under Section  2.1(g) (The Commitments; Credit-Linked Deposit
Amount) shall be correspondingly reduced and each Tranche B Investor
shall without further act succeed, ratably in accordance with its Tranche B
Ratable Portion, to the rights of the Fronting Lender with respect to such
amount.  The Lender or Tranche B
Investor making demand for such compensation shall deliver to the Borrower
concurrently with such demand a written statement as to such losses, expenses
and liabilities, and this statement shall be conclusive as to the amount of
compensation due to such Lender, absent manifest error.

 

Section 2.15                            Capital Adequacy

 

If at any time any Lender
or Tranche B Investor determines that (a) the introduction of, or any
change in or in the interpretation of, any law, treaty or governmental rule,
regulation or order after the date of this Agreement regarding capital
adequacy, (b) compliance with any such law, treaty, rule, regulation or
order or (c) compliance with any guideline or request or directive from
any central bank or other Governmental Authority (whether or not

 

53

 

having the force
of law) shall have the effect of reducing the rate of return on such Lender’s
or Tranche B Investor’s (or any corporation controlling such Lender’s or
Tranche B Investor’s) capital as a consequence of its obligations
hereunder, in respect of the Credit-Linked Deposits or under or in respect of
any Letter of Credit to a level below that which such Lender, Tranche B
Investor or corporation could have achieved but for such adoption, change,
compliance or interpretation, then, upon demand from time to time by such
Lender or, through the Fronting Lender, such Tranche B Investor (with a
copy of such demand to the Administrative Agent and, in the case of a
Tranche B Investor, the Fronting Lender), the Borrower shall pay to the
Administrative Agent for the account of such Lender or, in the case of a
Tranche B Investor, the Fronting Lender, from time to time as specified by
such Lender or Tranche B Investor, additional amounts sufficient to compensate
such Lender or Tranche B Investor for such reduction.  A certificate as to such amounts setting
forth in reasonable detail the basis for such demand and a calculation for such
amount, shall be submitted to the Borrower and the Administrative Agent by such
Lender or Tranche B Investor and shall be conclusive and binding for all
purposes absent manifest error. 
Notwithstanding the foregoing, except to the extent, if any, the change
(or compliance) referred to in any such certificate shall be retroactive, the
Borrower shall not be required to compensate a Lender or Tranche B
Investor pursuant to this Section 2.15 (Capital
Adequacy) for any reduction in rates of return with respect to any
period prior to the date that is 180 days prior to the date of each such
certificate.

 

Section 2.16                            Taxes

 

(a)                                  Except
as otherwise expressly provided in this Section 2.16 (Taxes),
any and all payments by the Borrower under each Loan Document shall be made
free and clear of and without deduction for any and all taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto
and with respect to any corresponding payment that may be made by the Fronting
Lender to the Tranche B Investors in respect of the Credit-Linked
Deposits, excluding (i) in the case of each Lender and Tranche B
Investor and the Administrative Agent (A) taxes measured by its net
income, and franchise taxes imposed on it, by the jurisdiction (or any
political subdivision thereof) under the laws of which such Lender, Tranche B
Investor or the Administrative Agent (as the case may be) is organized and (B) any
United States withholding taxes payable with respect to payments under the Loan
Documents under laws (including any statute, treaty or regulation) in effect on
the Effective Date (or, in the case of any Lender or Tranche B Investor
that became a Lender or Tranche B Investor by assignment or transfer after
the Effective Date, the effective date of such assignment or transfer)
applicable to such Lender, Tranche B Investor or the Administrative Agent
(as the case may be), but not excluding any United States withholding taxes
payable as a result of any change in such laws occurring after the Effective
Date (or the date of such assignment or transfer) and (ii) in the case of
each Lender and Tranche B Investor, taxes measured by its net income, and
franchise taxes imposed on it as a result of a present or former connection
between such Lender or Tranche B Investor and the jurisdiction of the
Government Authority imposing such tax or any taxing authority thereof or
therein (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as “Taxes”).  If any Taxes
shall be required by law to be deducted from or in respect of any sum payable
under any Loan Document to any Lender, the Administrative Agent or any
Tranche B Investor, (w) the sum payable by the Borrower shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section 2.16) such Lender, Tranche B Investor or
the Administrative Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (x) the
Borrower (or, in the case of any sum payable by the Fronting Lender to the
Tranche B Investors hereunder, the Fronting Lender) shall make

 

54

 

such
deductions, (y) the Borrower (or, in the case of any sum payable by the Fronting
Lender to the Tranche B Investors hereunder, the Fronting Lender shall pay the
full amount deducted to the relevant taxing authority or other authority in
accordance with applicable law and (z) the Borrower (or, in the case of
any sum payable by the Fronting Lender to the Tranche B Investors
hereunder, the Fronting Lender shall deliver to the Administrative Agent
evidence of such payment; provided, however, that failure of the Fronting Lender to provide such
evidence shall not relieve the Borrower of any of its obligations hereunder.

 

(b)                                 In
addition, the Borrower shall pay any stamp or documentary taxes or any other
excise or property taxes, charges or similar levies of the United States or any
political subdivision thereof or any applicable foreign jurisdiction, and all
liabilities with respect thereto, in each case arising from any payment made
under any Loan Document or from the execution, delivery or registration of, or
otherwise with respect to, any Loan Document (collectively, “Other Taxes”).

 

(c)                                  Except
as otherwise expressly provided in this Section 2.16 (Taxes),
the Borrower shall indemnify each Lender, Tranche B Investor and the
Administrative Agent for the full amount of Taxes and Other Taxes (including
any Taxes and Other Taxes imposed by any jurisdiction on amounts payable under
this Section 2.16) paid by such Lender,
Tranche B Investor or the Administrative Agent (as the case may be) and
any liability (including for penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted.  This
indemnification shall be made within 30 days from the date such Lender, the
Administrative Agent or such Tranche B Investor (as the case may be) makes
written demand therefor (which shall, in case of such Tranche B Investor,
be made through the Fronting Lender). 
Such written demand shall include a certificate setting forth in
reasonable detail the type and amount of the indemnification payment to be
made; provided, however,
that the Borrower shall not be required to compensate a Lender or
Tranche B Investor pursuant to this clause (c) for
any Taxes or Other Taxes incurred more than 180 days (or, if such Taxes or
Other Taxes are measured based on a longer fiscal period, 180 days after the
end of the most recent fiscal period therefor) prior to the receipt of such
written demand.

 

(d)                                 Within
60 days after the date of any payment of Taxes or Other Taxes, the Borrower
shall furnish to the Administrative Agent, at its address referred to in Section 11.8 (Notices, Etc.), the original or a
certified copy of a receipt evidencing payment thereof or such other evidence
of payment reasonably satisfactory to the Administrative Agent.

 

(e)                                  Without
prejudice to the survival of any other agreement of the Borrower hereunder, the
agreements and obligations of the Borrower contained in this Section 2.16 shall survive the payment in full of the
Obligations, until 30 days after the expiration of the statute of limitations
applicable to the collection from the relevant Lender, the relevant
Tranche B Investor or the Administrative Agent of the Taxes and Other
Taxes to which the obligations under this Section 2.16 relate.

 

(f)                                    Prior
to the Effective Date in the case of each Non-U.S. Financial Institution that
is a signatory hereto and, otherwise, on the date such Non-U.S. Financial
Institution becomes a Non-U.S. Financial Institution and from time to time
thereafter if requested by the Borrower or the Administrative Agent, each
Non-U.S. Financial Institution shall provide the Administrative Agent and the
Borrower (and, if such Non-U.S. Financial Institution is a Tranche B
Investor, the Fronting Lender) with two completed originals of each of the
following: (i) Form W-8ECI (claiming exemption from withholding
because the income is effectively

 

55

 

connected
with a U.S. trade or business) (or any successor form), (ii) Form W-8BEN
(claiming exemption from withholding tax under an income tax treaty) (or any successor
form), (iii) in the case of a Non-U.S. Financial Institution claiming
exemption under Sections 871(h) or 881(c) of the Code, a Form W-8BEN
(claiming exemption from withholding under the portfolio interest exemption) or
any successor form or (iv) any other applicable form, certificate or
document prescribed by the IRS certifying as to such Non-U.S. Financial
Institution’s entitlement to such exemption from United States withholding tax
or reduced rate with respect to all payments to be made to such Non-U.S.
Financial Institutions under the Loan Documents.  Within a reasonable period following written
request therefor from the Borrower, each Non-U.S. Financial Institution (but
only as long as such Non-U.S. Financial Institution is able to do so pursuant
to applicable Requirements of Law) shall provide to each of the Borrower and
the Administrative Agent (and, if such Non-U.S. Financial Institution is a
Tranche B Investor, the Fronting Lender) such additional Forms W-8BEN or W-8ECI
(or any successor or other applicable form, certificate or document prescribed
by the IRS) to the extent necessary as a result of any prior form expiring or
becoming inaccurate or obsolete.  Unless
the Borrower and the Administrative Agent (and, if applicable, the Fronting Lender)
have received forms or other documents satisfactory to each of them indicating
that payments under any Loan Document to or for a Non-U.S. Financial
Institution are not subject to United States withholding tax or are subject to
such tax at a rate reduced by an applicable tax treaty, the Borrower or the
Administrative Agent (or, if applicable, the Fronting Lender) shall withhold
amounts required to be withheld by applicable Requirements of Law from such
payments at the applicable statutory rate. 
The fact that the Fronting Lender shall withhold and pay to the relevant
taxing authority any amounts pursuant hereto shall not relieve the Borrower of
any of its obligation to pay to the Fronting Lender such amounts.  The Fronting Lender shall provide the Administrative
Agent and the Borrower with any such form or other document received from any
Non-U.S. Tranche B Investor.

 

(g)                                 Each
Lender or Tranche B Investor (other than a Non-U.S. Financial Institution)
shall, on or prior to the date of its execution and delivery of the Amendment
Agreement or, as the case may be, the date such Lender becomes a Lender or such
Tranche B Investor becomes a Tranche B Investor, provide to each of
the Borrower and the Administrative Agent (and, in the case of a Tranche B
Investor, the Fronting Lender) two completed original Forms W-9, unless such
Lender or Tranche B Investor notifies the Borrower and the Administrative
Agent (and, in the case of a Tranche B Investor, the Fronting Lender) that
it is an “exempt recipient”, as defined in
Treasury Regulations Section 1.6049-4(c) with respect to which no
withholding is required.  Each Lender and
Tranche B Investor (from time to time following written request therefor
from the Borrower, but only for so long as such Lender or Tranche B Investor
is able to do so pursuant to applicable Requirements of Law) will provide to
each of the Borrower and the Administrative Agent (and, in the case of a
Tranche B Investor, the Fronting Lender) additional original Forms W-9 or
notification of “exempt recipient” status (or any
successor or other applicable form, certificate or document prescribed by the
IRS) to the extent necessary as a result of any prior form or notification
expiring or becoming inaccurate or obsolete.

 

(h)                                 (i)                                     For
any period with respect to which a Lender has failed to provide the Borrower or
the Administrative Agent with the appropriate form or other document described
in clause (f) or (g) above, as applicable (other than if such failure
is due to a change in any applicable Requirement of Law occurring after the
date on which a form originally was required to be provided, or if such form is
not required under clause (g) above),
such Lender shall not be entitled to indemnification under clause (a) or (c) above with respect to Taxes imposed by reason of
such failure.

 

56

 

 

(ii)                                  For
any period with respect to which a Tranche B Investor has failed to
provide the Fronting Lender with the appropriate form or other document
described in clause (f) or (g) above (other than if such failure is due to a change in
any applicable Requirement of Law occurring after the date on which a form
originally was required to be provided, or if such form is not required under clause (g) above), neither such Tranche B Investor
nor the Fronting Lender shall be entitled to indemnification under clause (a) or (c) above with
respect to Taxes imposed by reason of such failure.

 

(i)                                     If
any Lender or the Administrative Agent shall become aware that it (or, in the
case of the Fronting Lender, any Tranche B Investor) is entitled to
receive a refund in respect of Taxes or Other Taxes as to which such Lender or
the Administrative Agent has received a payment from, or has been indemnified
by, the Borrower pursuant to this Section 2.16,
it shall promptly notify the Borrower of such refund and shall, within 30 days
after receipt of a request by the Borrower, apply (or cause such Tranche B
Investor to apply) for such refund at the sole cost and expense of the Loan
Parties.  If any Lender or the
Administrative Agent receives a refund in respect of any Taxes or Other Taxes
as to which it has received a payment from or has been indemnified by the
Borrower pursuant to this Section 2.16,
it shall promptly notify the Borrower of such receipt and shall, within 30 days
after the later of the receipt of a request by the Borrower or the receipt of
such refund (unless such Lender reasonably expects that is shall be required to
repay such refund to the relevant tax authority), pay the amount of such refund
to the Borrower, net of all out-of-pocket expenses of such Lender (and, in the
case of the Fronting Lender, of the Tranche B Investor), without interest
thereon and subject to Section 11.6 (Right
of Set-off); provided, however, that the Borrower agrees to return such refund to
such Lender or the Administrative Agent promptly upon receipt of written notice
in the event that such Lender, the relevant Tranche B Investor or the
Administrative Agent is required to repay such refund to the relevant tax
authority.  Nothing contained in this Section 2.16 shall require any Lender or the Administrative
Agent to make available to the Borrower any tax return or any other document
containing information that it (or, in the case of the Fronting Lender, the
Tranche B Investor) deems to be confidential.

 

(j)                                     Any
Lender claiming any additional amounts payable pursuant to this Section 2.16 shall use its reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
change the jurisdiction of its Applicable Lending Office if the making of such
a change would avoid the need for, or reduce the amount of, any such additional
amounts which would be payable or may thereafter accrue and would not, in the
sole determination of such Lender, be otherwise disadvantageous to such Lender.

 

Section 2.17                            Substitution
of Lenders

 

If (a)(i) any Lender
(other than the Fronting Lender) or Tranche B Investor makes a claim under
Section 2.14(c)  (Increased Costs) or 2.15 (Capital Adequacy),
(ii) it becomes illegal for any Lender (other than the Fronting Lender) to
continue to fund or make any Eurodollar Rate Loan and such Lender notifies the
Borrower pursuant to Section 2.14(d)
(Illegality), (iii) the Borrower is
required to make any payment pursuant to Section 2.16 (Taxes)
that is attributable to a particular Lender (other than the Fronting Lender) or
Tranche B Investor, (iv) any Lender (other than the Fronting Lender)
becomes a Non-Funding Lender or (v) any Tranche B Investor fails to
make any payment it is required to make in respect of any Credit-Linked
Deposit, (b) in the case of clause (a)(i) above, as a consequence of increased costs
in respect of which such claim is made, the effective rate of interest payable
to such Lender or Tranche B Investor under this Agreement with respect to
its Loans exceeds the effective average

 

57

 

rate of interest
payable to the Requisite Lenders under this Agreement and (c) Lenders
holding at least 75% of the aggregate Commitments (considering, for purpose of
this clause (c) that the Commitment of
the Fronting Lender has been assigned to the Tranche B Investors in
accordance with their Tranche B Ratable Portion) are not subject to such
increased costs or illegality, payment or proceedings (any such Lender or
Tranche B Investor, an “Affected Lender”),
the Borrower may substitute another financial institution for such Affected
Lender hereunder, upon reasonable prior written notice (which written notice
must be given within 90 days following the occurrence of and notification to
the Borrower of any applicable event described in clauses (a)(i), (ii), (iii) or (iv) above) by the Borrower to the Administrative Agent and
the Affected Lender (and, if such Affected Lender is a Tranche B Investor,
the Fronting Lender) that the Borrower intends to make such substitution, which
substitute financial institution (x) must be an Eligible Assignee or
(y) if not a Lender, must be reasonably acceptable to the Administrative
Agent; provided, however,
that, if more than one Lender or Tranche B Investor claims increased
costs, illegality or right to payment arising from the same act or condition
and such claims are received by the Borrower within 30 days of each other, then
the Borrower may substitute all, but not (except to the extent the Borrower has
already substituted one of such Affected Lenders before the Borrower’s receipt
of the other Affected Lenders’ claim) less than all, Lenders and Tranche B
Investors making such claims.  If the
proposed substitute financial institution or other entity meets the conditions
set forth in clauses (x) through (z) above and the written notice was properly issued under
this Section 2.17, the Affected Lender
shall sell and the substitute financial institution or other entity shall
purchase, (and, if such Affected Lender is a Tranche B Investor, the
Fronting Lender shall execute all documents necessary to effect such sale and
substitution) all rights and claims of such Affected Lender under the Loan
Documents and the Credit-Linked Deposit and such substitute financial
institution or other entity shall assume and the Affected Lender shall be
relieved of its Commitments and all other prior unperformed obligations of the
Affected Lender under the Loan Documents or, as the case may be, the
Credit-Linked Deposit (other than in respect of any damages (other than
exemplary or punitive damages, to the extent permitted by applicable law) in
respect of any such unperformed obligations). 
If such Affected Lender is a Lender hereunder, upon the effectiveness of
such sale, purchase and assumption (that, in any event shall be conditioned
upon the payment in full by the Borrower in cash of all fees, unreimbursed
costs and expenses and indemnities accrued and unpaid through such effective
date to such Affected Lender), the substitute financial institution or other
entity shall become a “Lender”
hereunder for all purposes of this Agreement having a Commitment (if
applicable) in the amount of such Affected Lender’s Commitment assumed by it
and such Commitment (if applicable) of the Affected Lender shall be terminated;
provided, however,
that all indemnities under the Loan Documents shall continue in favor of such
Affected Lender.  If such Affected Lender
is a Lender hereunder, it shall execute an Assignment and Acceptance to
evidence such transfer; provided, however, that the failure of the Affected Lender to execute
such Assignment and Acceptance shall not invalidate such assignment, and such
Assignment and Acceptance shall be deemed to be executed upon receipt by such
Affected Lender of such payment in full.

 

ARTICLE III

 

CONDITIONS TO LOANS AND LETTERS OF CREDIT

 

Section 3.1                                   Conditions
Precedent to Effectiveness

 

This Agreement, including
the obligation of each Lender to make the Loans, the obligation of each Issuer
to Issue Letters of Credit and the obligations of each Tranche B Investor to
make (or authorize the transfer from its Tranche B CD in respect of) its
Credit-Linked Deposit,

 

58

 

shall not become
effective until the date (the “Effective Date”)
on which all of the following conditions precedent are satisfied or duly waived
in accordance with Section 11.1
(Amendments, Waivers, Etc.):

 

(a)                                  Amendment Agreement. 
The Amendment Agreement shall have become effective in accordance with
its terms.

 

(b)                                 Collateral Documents. 
The Collateral Documents shall be in full force and effect on the
Effective Date, and each document (including each Uniform Commercial Code
financing statement and any necessary modifications to the Mortgages) required
by law or reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create or continue in favor of the
Administrative Agent for the ratable benefit of the Secured Parties a valid,
legal and perfected first-priority Lien on, and security interest in, the
Collateral (subject to any Liens expressly permitted by Section 8.2
(Liens, Etc.)) shall have been delivered to the Collateral
Agent.  The Pledged Stock and the Pledged
Notes (each as defined in the Pledge and Security Agreement) shall be duly and
validly pledged under the Pledge and Security Agreement to the Administrative
Agent for the ratable benefit of the Secured Parties, and certificates
representing such pledged Collateral, accompanied by instruments of transfer
and stock powers endorsed in blank, shall have been delivered to the
Administrative Agent.

 

(c)                                  Legal Opinions:  The
Administrative Agent shall have received, on behalf of itself, the Lenders, the
Tranche B Investors and the Issuers, favorable written opinions of
(A) Jones Day, counsel to the Loan Parties, in substantially the form of Exhibit G  (Form of Opinion of
Counsel for the Loan Parties) and (B) general counsel to the
Borrower, in each case addressed to the Administrative Agent, the Lenders, the
Tranche B Investors and the Issuers and addressing such other matters as
any Lender or any Tranche B Investor through the Administrative Agent may
reasonably request;

 

(d)                                 Certificates.  The
Administrative Agent shall have received (i) a certificate, dated the Effective
Date and signed by the Secretary or Assistant Secretary of the Borrower,
certifying that (A) except as set forth on any schedule attached thereto, the
certificate or articles of incorporation (or other equivalent document) of the
Borrower and each other Loan Party previously delivered on the Original
Restatement Date (or such later date on which such Person became a Loan Party)
have not been amended since the date of such delivery, (B) except as set forth
on any schedule attached thereto, the by-laws (or other equivalent document) of
the Borrower and each other Loan Party as in effect and delivered on the
Original Restatement Date (or such later date on which such Person became a
Loan Party) have not been amended since the date of such delivery, (C) the
resolutions previously delivered on the Original Restatement Date (or such
later date on which such Person became a Loan Party) by the Board of Directors
or other equivalent governing body of the Borrower and each other Loan Party
authorizing (x) the execution, delivery and performance of the Existing Credit
Agreement and the other Loan Documents to which such Person is a party, as
applicable, (y) the execution, delivery and performance of the Amendment
Agreement (including Exhibit A thereto in the form of this Agreement) and
(z) in the case of the Borrower, the borrowings hereunder, have not been
modified, rescinded or amended and are in full force and effect, (D) attached
thereto is a certificate as to the good standing of the Borrower and each other
Loan Party as of a recent date by the Secretary of State of the state of its
organization, and (E) as to the incumbency and specimen signature of each
officer executing the Amendment Agreement or any other Loan Document or any
other document delivered in connection therewith on behalf of such Loan Party,

 

59

 

and (ii) a certificate of another
officer as to the incumbency and specimen signature of the Secretary or
Assistant Secretary executing the certificate pursuant to clause (i) above;

 

(e)                                  Solvency.  The
Administrative Agent shall have received a certificate of a Responsible Officer
of the Borrower, stating that the Borrower is Solvent as of the Effective Date
and after giving effect to the initial Loans and Letters of Credit, the application
of the proceeds thereof in accordance with Section 7.9
(Application of Proceeds) and the
payment of all estimated legal, accounting and other fees related hereto and
thereto;

 

(f)                                    Representations and Warranties; No Defaults.  The Administrative Agent shall have received
a certificate of a Responsible Officer of the Borrower to the effect that
(A) the condition set forth in Section 3.2(b)
(Conditions Precedent to Each Loan and Letter of Credit) has been
satisfied and (B) no litigation not listed on Schedule 4.7
(Litigation) shall have been commenced against any Loan Party or any
of its Subsidiaries that, if adversely determined, would have a Material
Adverse Effect;

 

(g)                                 Tranche B CDs.  All
Tranche B CDs issued in connection with the Existing Credit Agreement shall
have been cancelled.

 

(h)                                 USA PATRIOT Act.  To
the extent requested, the Agents, the Lenders and the Tranche B Investors shall
have received all documentation and other information required by bank
regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including, without limitation, the USA
Patriot Act.

 

(i)                                     Fees and Expenses. 
There shall have been paid to the Administrative Agent, for the account
of the Administrative Agent, the Lenders and the Tranche B Investors, as
applicable, all fees and expenses (including reasonable fees and expenses of
counsel) due and payable on or before the Effective Date.

 

(j)                                     Receipt of Credit-Linked Deposits.  The Fronting Lender shall have
received the Credit-Linked Deposits from the Tranche B Investors in an
aggregate amount equal to the Fronting Lender’s Commitment under the
Tranche B Facility or, in the Fronting Lender’s discretion, agreements
satisfactory to the Fronting Lender to make such deposits, together with copies
of all documentation related thereto in each case in form and substance
satisfactory to the Fronting Lender.

 

(k)                                  Consents, Etc.  Each
of the Borrower and its Subsidiaries shall have received all consents and
authorizations required pursuant to any enforceable and material Contractual
Obligation with any other Person and shall have obtained all consents and
authorizations of, and effected all notices to and filings with, any
Governmental Authority, in each case, as may be necessary to allow each of the
Borrower and its Subsidiaries lawfully to execute, deliver and perform, in all
material respects, their respective obligations hereunder and under and the
Loan Documents to which each of them, respectively, is, or shall be, a party
and each other agreement or instrument to be executed and delivered by each of
them, respectively, pursuant thereto or in connection therewith.

 

Section 3.2                                   Conditions
Precedent to Each Loan and Letter of Credit

 

The obligation of each
Lender on any date (including the Effective Date) to make any Loan and of each
Issuer on any date (including the Effective Date) to Issue any Letter of Credit
is subject to the satisfaction of each of the following conditions precedent:

 

60

 

(a)                                  Request for Borrowing or Issuance of Letter of Credit.  With respect to any Loan, the Administrative
Agent shall have received a duly executed Notice of Borrowing (or, in the case
of Swing Loans, a duly executed Swing Loan Request), and, with respect to any
Letter of Credit, the Administrative Agent and the Issuer shall have received a
duly executed Letter of Credit Request.

 

(b)                                 Representations and Warranties; No Defaults.  The following statements shall be true on the
date of such Loan or Issuance, both before and after giving effect thereto and,
in the case of any Loan, to the application of the proceeds therefrom:

 

(i)                                     the
representations and warranties set forth in Article IV
(Representations and Warranties) and in the other Loan Documents
shall be true and correct on and as of the Effective Date and shall be true and
correct in all material respects on and as of any such date after the Effective
Date with the same effect as though made on and as of such date, except to the
extent such representations and warranties expressly relate to an earlier date,
in which case such representations and warranties shall have been true and
correct in all material respects as of such earlier date; and

 

(ii)                                  no Default or Event of Default shall have occurred.

 

(c)                                  No Legal Impediments. 
The making of the Loans or the Issuance of such Letter of Credit on such
date does not violate any Requirement of Law on the date of or immediately
following such Loan or Issuance of such Letter of Credit and is not enjoined,
temporarily, preliminarily or permanently.

 

Each
submission by the Borrower to the Administrative Agent of a Notice of Borrowing
or a Swing Loan Request and the acceptance by the Borrower of the proceeds of
each Loan requested therein, and each submission by the Borrower to an Issuer
of a Letter of Credit Request, and the Issuance of each Letter of Credit
requested therein, shall be deemed to constitute a representation and warranty
by the Borrower as to the matters specified in clause (b)
above on the date of the making of such Loan or the Issuance of such
Letter of Credit.

 

Section 3.3                                   Determinations
of Initial Borrowing Conditions

 

For purposes of
determining compliance with the conditions specified in Section 3.1
(Conditions Precedent to Effectiveness), each Lender and each
Tranche B Investor shall be deemed to have consented to, approved,
accepted or be satisfied with, each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to
the Lenders or the Tranche B Investors unless an officer of the
Administrative Agent responsible for the transactions contemplated by the Loan
Documents shall have received notice from such Lender or such Tranche B
Investor prior to the initial Borrowing or Issuance hereunder specifying its
objection thereto and such Lender shall not have made available to the
Administrative Agent such Lender’s Ratable Portion of such Borrowing, or such
Tranche B Investor shall not have made its Credit-Linked Deposit with the
Fronting Lender.

 

61

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

To induce the Lenders,
the Issuers, the Tranche B Investors and the Administrative Agent to enter into
this Agreement, the Borrower represents and warrants each of the following to
the Lenders, the Issuers, the Tranche B Investors and the Administrative
Agent, on and as of the Effective Date and the making of the Loans and the
other financial accommodations on the Effective Date and on and as of each date
as required by Section 3.2(b)(i) (Conditions Precedent
to Each Loan and Letter of Credit):

 

Section 4.1                                   Corporate
Existence; Compliance with Law

 

Each of the Borrower and
its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization (b) is
duly qualified to do business as a foreign corporation and in good standing
under the laws of each jurisdiction where such qualification is necessary,
except where the failure to be so qualified or in good standing would not have
a Material Adverse Effect in the aggregate, (c) has all requisite power
and authority and the legal right to own, pledge, mortgage and operate its
properties, to lease the property it operates under lease and to conduct its
business as now or currently proposed to be conducted, (d) is in
compliance with its Constituent Documents, (e) is in compliance with all
applicable Requirements of Law except where the failure to be in compliance
would not, in the aggregate, have a Material Adverse Effect and (f) has
all necessary licenses, permits, consents or approvals from or by, has made all
necessary filings with, and has given all necessary notices to, each
Governmental Authority having jurisdiction, to the extent required for such
ownership, operation and conduct, except for licenses, permits, consents,
approvals or filings that can be obtained or made by the taking of ministerial
action to secure the grant or transfer thereof or the failure to obtain or make
would not, in the aggregate, have a Material Adverse Effect.

 

Section 4.2                                   Corporate
Power; Authorization; Enforceable Obligations

 

(a)                                  The
execution, delivery and performance by each Loan Party of the Loan Documents to
which it is a party and the consummation of the transactions contemplated thereby:

 

(i)                                     are
within such Loan Party’s corporate, limited liability company, partnership or
other powers;

 

(ii)                                  have
been or, at the time of delivery thereof pursuant to Article III
(Conditions To Loans And Letters Of Credit) will have been duly
authorized by all necessary action, including the consent of shareholders,
partners and members where required;

 

(iii)                               do
not and will not (A) contravene such Loan Party’s or any of its
Subsidiaries’ respective Constituent Documents, (B) violate any other
Requirement of Law applicable to such Loan Party (including Regulations T, U
and X of the Federal Reserve Board), or any order or decree of any Governmental
Authority or arbitrator applicable to such Loan Party, (C) conflict with
or result in the breach of, or constitute a default under, or result in or
permit the termination or acceleration of, any lawful Contractual Obligation of
such Loan Party or any of its Subsidiaries or (D) result in the creation
or imposition of any Lien upon any property of such Loan Party or any of its

 

62

 

Subsidiaries, other than those in favor of the Secured
Parties pursuant to the Collateral Documents; and

 

(iv)                              do
not require the consent of, authorization by, approval of, notice to, or filing
or registration with, any Governmental Authority or any other Person, other
than those listed on Schedule 4.2
(Consents) and that have been or will be, prior to the Effective
Date, obtained or made, copies of which have been or will be delivered to the
Administrative Agent pursuant to Section 3.1
(Conditions Precedent to Effectiveness), and each of which on the
Effective Date will be in full force and effect and, with respect to the
Collateral, filings required to perfect the Liens created by the Collateral
Documents.

 

(b)                                 This
Agreement has been, and each of the other Loan Documents will have been upon
delivery thereof pursuant to the terms of this Agreement, duly executed and
delivered by each Loan Party party thereto. 
This Agreement is, and the other Loan Documents will be, when delivered
hereunder, the legal, valid and binding obligation of each Loan Party party
thereto, enforceable against such Loan Party in accordance with its terms.

 

Section 4.3                                   Ownership
of Borrower; Subsidiaries

 

(a)                                  All
of the outstanding capital stock of the Borrower is validly issued, fully paid
and non-assessable.

 

(b)                                 Set
forth on Schedule 4.3 (Ownership of Subsidiaries)
is a complete and accurate list showing, as of the Effective Date, all
Subsidiaries of the Borrower and, as to each such Subsidiary, the jurisdiction
of its organization, the number of shares of each class of Stock authorized (if
applicable), the number outstanding on the Effective Date and the number and
percentage of the outstanding shares of each such class owned (directly or
indirectly) by the Borrower.  No Stock of
any Subsidiary of the Borrower is subject to any outstanding option, warrant, right of conversion or purchase of any similar right.  All of the outstanding Stock of each
Subsidiary of the Borrower owned (directly or indirectly) by the Borrower has
been validly issued, is fully paid and non-assessable (to the extent
applicable) and is owned by the Borrower or a Subsidiary of the Borrower, free
and clear of all Liens (other than the Lien in favor of the Secured Parties
created pursuant to the Pledge and Security Agreement), options, warrants,
rights of conversion or purchase or any similar rights.  Neither the Borrower nor any such Subsidiary
is a party to, or has knowledge of, any agreement restricting the transfer or
hypothecation of any Stock of any such Subsidiary, other than the Loan
Documents and, with respect to any Subsidiary that is a Permitted Joint Venture,  the governing
documents of such Permitted Joint Venture. 
The Borrower does not own or hold, directly or indirectly, any Stock of
any Person other than such Subsidiaries and Investments permitted by Section 8.3 (Investments).

 

Section 4.4                                   Financial
Statements

 

(a)                                  The
interim unaudited financial statements comprising the Financial Summary of
Operations for Borrower for the quarter ended March 31, 2005, copies of
which have been furnished to each Lender, fairly present, subject to the
absence of footnote disclosure and normal recurring year-end audit adjustments,
the consolidated financial condition of the Borrower and its Subsidiaries as at
such dates and the consolidated results of the operations of the Borrower and
its Subsidiaries for the period ended on such dates, all in conformity with
GAAP.

 

63

 

(b)                                 Neither
the Borrower nor any of its Subsidiaries has, as of the Effective Date, any
material obligation, contingent liability or liability for taxes, long-term
leases (other than operating leases) or unusual forward or long-term commitment
that is not reflected in the Financial Statements referred to in clause (a) above or in the
notes thereto and not otherwise permitted by this Agreement.

 

(c)                                  The
Projections have been prepared by the Borrower taking into consideration past
operations of its business, and reflect projections for the period beginning
approximately April 1, 2005 and ending approximately
December 31, 2008 on a Fiscal Quarter by Fiscal Quarter basis for the
first year and on a Fiscal Year by Fiscal Year basis thereafter.  The Projections are based upon estimates and
assumptions stated therein, all of which the Borrower believes to be reasonable
and fair in light of current conditions and current facts known to the Borrower
(other than any necessary adjustments due to fees payable in accordance
herewith) and, as of the Effective Date, reflect the Borrower’s good faith and
reasonable estimates of the future financial performance of the Borrower and
its Subsidiaries and of the other information projected therein for the periods
set forth therein.

 

Section 4.5                                   Material
Adverse Change

 

Since December 31, 2004,
there has been no Material Adverse Change and there have been no events or
developments that, in the aggregate, have had a Material Adverse Effect.

 

Section 4.6                                   Solvency

 

Both before and after
giving effect to (a) the Loans and Letter of Credit Obligations to be made
or extended on the Effective Date or such other date as Loans and Letter of
Credit Obligations requested hereunder are made or extended, (b) the
disbursement of the proceeds of such Loans pursuant to the instructions of the
Borrower, (c) the consummation of the transactions contemplated hereby and
(d) the payment and accrual of all transaction costs in connection with
the foregoing, each Loan Party is Solvent.

 

Section 4.7                                   Litigation

 

There are no pending or,
to the knowledge of the Borrower, threatened actions, investigations or
proceedings affecting the Borrower or any of its Subsidiaries before any court,
Governmental Authority or arbitrator other than those that, in the aggregate,
would not have a Material Adverse Effect. 
Schedule 4.7 (Litigation) lists all
litigation pending against any Loan Party as of the Effective Date that, if
adversely determined, could be reasonably expected to have a Material Adverse
Effect.

 

Section 4.8                                   Taxes

 

All federal, state, local
and foreign income and franchise and other material tax returns, reports and
statements (collectively, the “Tax Returns”)
required to be filed by the Borrower or any of its Tax Affiliates have been
filed with the appropriate Governmental Authorities in all jurisdictions in
which such Tax Returns are required to be filed, all such Tax Returns are true
and correct in all material respects, and all taxes, charges and other
impositions reflected therein or otherwise due and payable have been paid prior
to the date on which any fine, penalty, interest, late charge or loss may be
added thereto for non-payment thereof except where contested in good faith and
by appropriate proceedings if adequate reserves therefor have been established
on the books of the Borrower or such Tax Affiliate in conformity with
GAAP.  The

 

64

 

Borrower and each
of its Tax Affiliates have withheld and timely paid to the respective
Governmental Authorities all amounts required to be withheld.

 

Section 4.9                                   Full
Disclosure

 

(a)                                  The
Information Memorandum and any other information prepared or furnished by or on
behalf of any Loan Party and delivered prior to the Effective Date to the
Lenders in writing in connection with this Agreement or the consummation of the
transactions contemplated hereunder or thereunder (in each case, taken as a
whole) does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements contained therein or
herein not misleading; provided, however, that, to the extent any such information was based
upon, or constituted, a forecast or projection, such Loan Party represents
only, in respect of such projection or forecast, that it acted in good faith
and utilized reasonable assumptions and due care in the preparation of such
information.

 

(b)                                 The
information prepared or furnished by or on behalf of any Loan Party in
connection with this Agreement or the consummation of the transactions
contemplated hereunder or thereunder (in each case, taken as a whole) does not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements contained therein or herein not
misleading; provided, however,
that, to the extent any such information was based upon, or constituted, a
forecast or projection, such Loan Party represents only, in respect of such
projection or forecast, that it acted in good faith and utilized reasonable
assumptions and due care in the preparation of such information.

 

Section 4.10                            Margin
Regulations

 

The Borrower is not
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U of the Federal
Reserve Board), and no proceeds of any Borrowing will be used to purchase or
carry any such margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock in contravention of Regulation T,
U or X of the Federal Reserve Board.

 

Section 4.11                            No
Burdensome Restrictions; No Defaults

 

(a)                                  Neither
the Borrower nor any of its Subsidiaries (i) is a party to any Contractual
Obligation the compliance with which would have a Material Adverse Effect in
the aggregate or the performance of which by any thereof, either
unconditionally or upon the happening of an event, would result in the creation
of a Lien (other than a Lien permitted under Section 8.2
(Liens, Etc.)) on the property or assets of any thereof or
(ii) is subject to any charter or corporate restriction that would have a
Material Adverse Effect in the aggregate.

 

(b)                                 Neither
the Borrower nor any of its Subsidiaries is in default under or with respect to
any Contractual Obligation owed by it, other than, in either case, those defaults
that, in the aggregate, would not have a Material Adverse Effect.

 

(c)                                  No
Default or Event of Default has occurred and is continuing.

 

Section 4.12                            Investment
Company Act; Public Utility Holding Company Act

 

Neither the Borrower nor
any of its Subsidiaries is (a) an “investment company”
or an “affiliated person” of, or “promoter” or “principal underwriter”
for, an “investment

 

65

 

company,” as such terms are defined in the
Investment Company Act of 1940, as amended or (b) a “holding
company,” or an “affiliate” or a
“holding company” or a “subsidiary company” of a “holding
company,” as each such term is defined and used in the Public
Utility Holding Company Act of 1935, as amended.

 

Section 4.13                            Use
of Proceeds

 

The proceeds of the Loans
and the Letters of Credit are being used by the Borrower solely (a) to
refinance Indebtedness outstanding under the Existing Credit Agreement, (b) to
pay related transaction costs, fees and expenses and (c) for working capital
and general corporate purposes of the Borrower and its Subsidiaries.

 

Section 4.14                            Insurance

 

All policies of insurance
of any kind or nature of the Borrower or any of its Subsidiaries, including
policies of life, fire, theft, product liability, public liability, property
damage, other casualty, employee fidelity, workers’ compensation and employee
health and welfare insurance, are in full force and effect and are of a nature
and provide such coverage as is sufficient and as is customarily carried by
businesses of the size and character of such Person.  None of the Borrower or any of its
Subsidiaries has been refused insurance for any material coverage for which it
had applied or had any material policy of insurance terminated (other than at
its request).

 

Section 4.15                            Labor
Matters

 

(a)                                  There
are no strikes, work stoppages, slowdowns or lockouts pending or, to the
Borrower’s knowledge, threatened against or involving the Borrower or any of
its Subsidiaries, other than those that, in the aggregate, would not have a
Material Adverse Effect.

 

(b)                                 There
are no unfair labor practices, grievances or complaints pending, or, to the
Borrower’s knowledge, threatened, against or involving the Borrower or any of
its Subsidiaries, nor, to the Borrower’s knowledge, are there any arbitrations
or grievances threatened involving the Borrower or any of its Subsidiaries,
other than those that, in the aggregate, grievances, complaints, arbitrations
and grievances, if resolved adversely to the Borrower or such Subsidiary, would
not have a Material Adverse Effect.

 

(c)                                  Except
as set forth on Schedule 4.15  (Labor Matters), as of the Effective Date, there is no
collective bargaining agreement covering any employee of the Borrower or its
Subsidiaries.

 

Section 4.16                            ERISA

 

(a)                                  Each
employee benefit plan of the Borrower or any of its Subsidiaries intended to
qualify under Section 401 of the Code does so qualify where applicable,
and any trust created thereunder is exempt from tax under the provisions of
Section 501 of the Code, except where such failures, in the aggregate,
would not have a Material Adverse Effect.

 

(b)                                 Each
Title IV Plan is in compliance in all material respects with applicable
provisions of ERISA, the Code and other Requirements of Law except for
non-compliances that, in the aggregate, would not have a Material Adverse
Effect.

 

66

 

(c)                                  There
has been no, nor is there reasonably expected to occur, any ERISA Event other
than those that, in the aggregate, would not have a Material Adverse Effect.

 

Section 4.17                            Environmental
Matters

 

(a)                                  Except
as disclosed on Schedule 4.17 (Environmental Matters),
the operations of the Borrower and each of its Subsidiaries have been and are
in compliance with all Environmental Laws, including obtaining and complying
with all required environmental, health and safety Permits, other than
non-compliances that, in the aggregate, are not reasonably likely to result in
a Material Adverse Effect.

 

(b)                                 None
of the Borrower or any of its Subsidiaries or any Real Property currently or,
to the knowledge of the Borrower, previously owned, operated or leased by or
for the Borrower or any of its Subsidiaries is subject to any pending or, to
the knowledge of the Borrower, threatened, claim, order, agreement, notice of
violation, notice of potential liability or is the subject of any pending or
threatened proceeding or governmental investigation under or pursuant to
Environmental Laws other than those orders, agreements, notices, proceedings or
investigations that, in the aggregate, are not reasonably likely to result in a
Material Adverse Effect.

 

(c)                                  Except
as disclosed on Schedule 4.17 (Environmental Matters),
to the knowledge of the Borrower, there are no facts, circumstances or
conditions arising out of or relating to the operations or ownership of the
Borrower or of Real Property owned, operated or leased by the Borrower or any
of its Subsidiaries that are not specifically included in the financial
information furnished to the Lenders other than those that, in the aggregate,
are not reasonably likely to result in a Material Adverse Effect.

 

Section 4.18                            Intellectual
Property

 

Except where the failure
to do so would not, taken as a whole, have a Material Adverse Effect, the
Borrower and its Subsidiaries own or license or otherwise have the right to use
all licenses, permits, patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, copyright applications,
franchises, authorizations and other intellectual property rights (including
all Intellectual Property as defined in the Pledge and Security Agreement) that
are necessary for the operations of their respective businesses, without
infringement upon or conflict with the rights of any other Person with respect thereto,
including all trade names associated with any private label brands of the
Borrower or any of its Subsidiaries. 
Except where the failure to do so would not, taken as a whole, have a
Material Adverse Effect, no slogan or other advertising device, product,
process, method, substance, part or component, or other material now employed,
or now contemplated to be employed, by the Borrower or any of its Subsidiaries
infringes upon or conflicts with any rights owned by any other Person, and no
claim or litigation regarding any of the foregoing is pending or threatened.

 

Section 4.19                            Title;
Real Property

 

(a)                                  Each
of the Borrower and its Subsidiaries has good and marketable title to, or valid
leasehold interests in, all Real Property and good title to all personal
property, in each case that is purported to be owned by it, including those
reflected on the most recent Financial Statements delivered by the Borrower,
and none of such properties and assets is subject to any Lien, except Liens
permitted under Section 8.2  (Liens, Etc.).  The
Borrower and its Subsidiaries

 

67

 

have
received all deeds, assignments, waivers, consents, non-disturbance and
recognition or similar agreements, bills of sale and other documents, and have
duly effected all recordings, filings and other actions necessary to establish,
protect and perfect the Borrower’s and its Subsidiaries’ right, title and
interest in and to all such property, other than those that, in the aggregate,
are not reasonably likely to result in a Material Adverse Effect.

 

(b)                                 Set
forth on Schedule 4.19 (Real Property) is a
complete and accurate list of all Real Property owned or leased by each Loan
Party as of the Effective Date with a Fair Market Value in excess of $5,000,000
showing, as of the Effective Date, the street address, county (or other
relevant jurisdiction or state) and the record owner thereof.

 

(c)                                  No
portion of any Real Property owned or leased by any Loan Party or any of its
Subsidiaries has suffered any material damage by fire or other casualty loss
that has not heretofore been completely repaired and restored to its original
condition other than those that would not have a Material Adverse Effect in the
aggregate.  No portion of any Real
Property owned or leased by any Loan Party or any of its Subsidiaries is
located in a special flood hazard area as designated by any federal
Governmental Authority other than those that would not have a Material Adverse
Effect in the aggregate.

 

(d)                                 All
Permits required to have been issued or appropriate to enable all Real Property
owned or leased by the Borrower or any of its Subsidiaries to be lawfully
occupied and used for all of the purposes for which they are currently occupied
and used have been lawfully issued and are in full force and effect, other than
those that would not have a Material Adverse Effect in the aggregate.

 

(e)                                  None
of the Borrower or any of its Subsidiaries has received any notice, or has any
knowledge, of any pending, threatened or contemplated condemnation proceeding
affecting any Real Property owned or leased by the Borrower or any of its
Subsidiaries or any part thereof, except those that, in the aggregate, would
not have a Material Adverse Effect.

 

ARTICLE V

 

FINANCIAL COVENANTS

 

The Borrower agrees with
the Lenders, the Tranche B Investors and the Administrative Agent to each
of the following as long as any Obligation or any Commitment remains
outstanding and, in each case, unless the Requisite Lenders otherwise consent
in writing:

 

Section 5.1                                   Maximum
Leverage Ratio

 

The Borrower shall
maintain a Leverage Ratio, on each day during each of the periods starting on
the last day of each Fiscal Quarter ending on any day during the period from
March 31, 2005 through the Scheduled Termination Date and, in each case,
ending on the day before the last day of the following Fiscal Quarter, of not
more than 2.0 to 1.

 

Section 5.2                                   Minimum
Fixed Charge Coverage Ratio

 

The Borrower shall
maintain a Fixed Charge Coverage Ratio, as determined as of the last day of
each Fiscal Quarter ending on any day during the period from March 31,
2005

 

68

 

through the Scheduled Termination Date, for the
four Fiscal Quarters ending on such day, of at least 1.5 to 1.

 

Section 5.3                                   Minimum
Interest Coverage Ratio

 

The Borrower shall
maintain an Interest Coverage Ratio, as determined as of the last day of each
Fiscal Quarter ending on any day during the period from March 31, 2005
through the Scheduled Termination Date, for the four Fiscal Quarters ending on
such day, of at least 3.5 to 1.

 

Section 5.4                                   Capital
Expenditures

 

The Borrower shall not
make or incur, or permit to be made or incurred,
Capital Expenditures during each of the Fiscal Years set forth below to be, in
the aggregate, in excess of the maximum amount set forth below for such Fiscal
Year:

 

	
  FISCAL YEAR

  	
   

  	
  MAXIMUM CAPITAL

  EXPENDITURES

  	
   

  
	
  2005

  	
   

  	
  $ 80,250,000 (which includes $20,500,000 carried
  forward to the 2005 Fiscal Year under the terms of the Existing Credit
  Agreement)

  	
   

  
	
  2006

  	
   

  	
  $

  	
  60,000,000

  	
   

  
	
  2007

  	
   

  	
  $

  	
  65,000,000

  	
   

  
	
  2008

  	
   

  	
  $

  	
  70,000,000

  	
   

  
	
  2009

  	
   

  	
  $

  	
  75,000,000

  	
   

  
	
  2010

  	
   

  	
  $

  	
  80,000,000

  	
   

  

 

provided, however, that
to the extent the actual amount of such Capital Expenditures for any such
Fiscal Year is less than the maximum amount set forth above for such Fiscal
Year (without giving effect to the carryover permitted by this proviso and
excluding the $20,500,000 carried forward to the 2005 Fiscal Year under the
terms of the Existing Credit Agreement), 100% of the difference between such stated
maximum amount and such actual Capital Expenditures shall be available for
additional Capital Expenditures in the next succeeding Fiscal Year.

 

ARTICLE VI

 

REPORTING COVENANTS

 

The Borrower agrees with
the Lenders, the Tranche B Investors and the Administrative Agent to each
of the following, as long as any Obligation or any Commitment remains
outstanding and, in each case, unless the Requisite Lenders otherwise consent
in writing:

 

Section 6.1                                   Financial
Statements

 

The Borrower shall
furnish to the Administrative Agent each of the following:

 

69

 

(a)                                  Quarterly Reports. 
Within 45 days after the end of each of the first three Fiscal Quarters
of each Fiscal Year, a summary of the Work In Process Report as of the end of
such Fiscal Quarter and financial information regarding the Borrower and its
Subsidiaries consisting of consolidated unaudited balance sheets as of the
close of such quarter and the related statements of income and cash flow for
such quarter and that portion of the Fiscal Year ending as of the close of such
quarter, setting forth in comparative form the figures for the corresponding
period in the prior year and the figures contained in the Projections or, if
applicable, the latest business plan provided pursuant to Section 6.1(d)
(Financial Statements) for the current Fiscal Year, in each case
certified by a Responsible Officer of the Borrower as fairly presenting the
consolidated financial position of the Borrower and its Subsidiaries as at the
dates indicated and the results of their operations and cash flow for the
periods indicated in accordance with GAAP (subject to the absence of footnote
disclosure and normal year-end audit adjustments).

 

(b)                                 Annual Reports. 
Within 90 days after the end of each Fiscal Year, a summary of the Work
In Process Report as of the end of such Fiscal Year and financial information
regarding the Borrower and its Subsidiaries consisting of consolidated balance
sheets of the Borrower and its Subsidiaries as of the end of such year and
related statements of income and cash flows of the Borrower and its
Subsidiaries for such Fiscal Year, all prepared in conformity with GAAP and
certified, in the case of such consolidated financial statements, without
qualification as to the scope of the audit or as to the Borrower being a going
concern by the Borrower’s Accountants, together with the report of such
accounting firm stating that (i) such financial statements fairly present
the consolidated financial position of the Borrower and its Subsidiaries as at
the dates indicated and the results of their operations and cash flow for the
periods indicated in conformity with GAAP applied on a basis consistent with
prior years (except for changes with which the Borrower’s Accountants shall
concur and that shall have been disclosed in the notes to the financial
statements) and (ii) the examination by the Borrower’s Accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards, and accompanied by a
certificate stating that in the course of the regular audit of the business of
the Borrower and its Subsidiaries such accounting firm has obtained no
knowledge that a Default or Event of Default in respect of the financial
covenants contained in Article V (Financial
Covenants) has occurred and is continuing, or, if in the opinion of
such accounting firm, a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof.

 

(c)                                  Compliance Certificate. Together with each delivery of any
financial statement pursuant to clause (a)
or (b) above, a certificate of a
Responsible Officer of the Borrower (each, a “Compliance
Certificate”) (i) showing in reasonable detail the calculations
used in determining the Leverage Ratio and demonstrating compliance with each
of the other financial covenants contained in Article V
(Financial Covenants) and (ii) stating that no Default or Event
of Default has occurred and is continuing or, if a Default or an Event of
Default has occurred and is continuing, stating the nature thereof and the
action which the Borrower proposes to take with respect thereto.

 

(d)                                 Business Plan.  Not
later than 90 days after the end of each Fiscal Year, and containing
substantially the types of financial information contained in the Projections,
(i) the annual business plan of the Borrower for the next succeeding
Fiscal Year reviewed by the Board of Directors of the Borrower,
(ii) forecasts prepared by management of the Borrower for each Fiscal
Quarter in the next succeeding Fiscal Year, and (iii) forecasts prepared
by management of the Borrower for each of the succeeding three Fiscal Years,
including, in each instance described in clauses (ii) and
(iii) above, (x) a projected
year-end consolidated balance sheet and income

 

70

 

statement and statement of cash
flows and (y) a statement of all of the material assumptions on which such
forecasts are based.

 

(e)                                  Management Letters, Etc. 
Within five Business Days after receipt thereof by any Loan Party,
copies of each management letter, exception report or similar letter or report
received by such Loan Party from its independent certified public accountants.

 

(f)                                    Intercompany Loan Balances. 
Together with each delivery of any financial statement pursuant to clause (a) or (b) above, a
summary of (i) all outstanding intercompany obligations involving, inter alia, a Loan Party and any Affiliate thereof that is
not a Loan Party and (ii) all outstanding Non-Recourse Indebtedness
(including all outstanding commitments received therefor and proposal letters
received therefor in the last preceding Fiscal Year), in each case as of the
last day of the calendar quarter covered by such financial statement, certified
by a Responsible Officer.

 

Section 6.2                                   Collateral
Reporting Requirements

 

The Borrower shall
furnish to the Administrative Agent each of the following:

 

(a)                                  Updated Corporate Chart. 
Together with each delivery of any financial statement pursuant to Section 6.1(b) (Financial Statements), a corporate
organizational chart or other equivalent list, current as of the date of
delivery, in form and substance reasonably acceptable to the Administrative
Agent and certified as true, correct and complete by a Responsible Officer of
the Borrower, setting forth, for each of the Loan Parties, all Persons subject
to Section 7.11 (Additional Collateral and
Guaranties), all Subsidiaries and Affiliates of any of them and any
joint venture (including Permitted Joint Ventures) entered into by any of the
foregoing, (i) its full legal name (and any trade name, fictitious name or
other name each may have had or operated under), (ii) its jurisdiction of
organization and organizational number (if any), (iii) the location of its
chief executive office (or sole place of business) and (iv) the number of
shares of each class of its Stock authorized (if applicable), the number
outstanding as of the date of delivery, and the number and percentage of the
outstanding shares of each such class owned (directly or indirectly) by the
Borrower.

 

(b)                                 Government Contracts. 
Together with each delivery of any financial statement pursuant to Section 6.1(b) (Financial Statements), a list of all
Government Contracts to which any Loan Party is a party as of the last day of
the most recent Fiscal Year and that has a  remaining value in excess of
$50,000,000, certified as true, correct and complete by a Responsible Officer
of the Borrower.

 

(c)                                  Additional Information.  From
time to time, statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the
Administrative Agent may reasonably request, all in reasonable detail.

 

(d)                                 Additional Filings.  At
any time and from time to time, upon the reasonable written request of the
Administrative Agent, and at the sole expense of the Loan Parties, duly
executed, delivered and recorded instruments and documents for the purpose of
obtaining or preserving the full benefits of the Amendment Agreement, this
Agreement, the Pledge and Security Agreement and each other Loan Document and
of the rights and powers herein and therein granted (and each Loan Party shall
take such further action as the Administrative Agent may reasonably request for
such purpose, including the filing of any

 

71

 

financing
or continuation statement under the UCC or other similar Requirement of Law in
effect in any jurisdiction (whether domestic or foreign) with respect to the security
interest created by the Pledge and Security Agreement and including the
execution and delivery of Deposit Account Control Agreements and Control
Account Agreements.

 

The reporting
requirements set forth in this Section 6.2
are in addition to, and shall not modify and are not in replacement of, any
rights and other obligation of any Loan Document (including notice and
reporting requirements) and satisfaction of the reporting obligations in this Section 6.2 shall not, by itself, operate as an update
of any Schedule or any schedule of any other Loan Document and shall not cure,
or otherwise affect in any way, any Default or Event of Default, including any
failure of any representation or warranty of any Loan Document to be correct in
any respect when made.

 

Section 6.3                                   Default
Notices

 

Promptly and in any event
within three Business Days after a Responsible Officer of any Loan Party
obtains actual knowledge of the existence of any (a) Default,
(b) Event of Default or (c) other event having had a Material Adverse
Effect or being reasonably likely to cause or result in a Material Adverse
Change or in a Default or Event of Default, the Borrower shall give the
Administrative Agent notice specifying the nature of such Default or Event of
Default or other event, including the anticipated effect thereof, which notice,
if given by telephone, shall be promptly confirmed in writing on the next
Business Day.

 

Section 6.4                                   Litigation

 

Promptly after the
commencement thereof, the Borrower shall give the Administrative Agent written
notice of the commencement of all actions, suits and proceedings before any
domestic or foreign Governmental Authority or arbitrator, regarding the
Borrower, any of its Subsidiaries or any Permitted Joint Venture that
(i) seeks injunctive or similar relief that, if adversely determined,
would be reasonably likely to result in a Material Adverse Effect or
(ii) in the reasonable judgment of the Borrower, such Subsidiary or such
Permitted Joint Venture, would expose the Borrower, such Subsidiary or such
Permitted Joint Venture to liability in an amount aggregating $1,000,000 or
more or that, if adversely determined, would have a Material Adverse Effect.

 

Section 6.5                                   Asset
Sales

 

Prior to any Asset Sale
(a) of an asset with fair market value in excess of $15,000,000 or
(b) that is anticipated to generate in excess of $15,000,000 in Net Cash
Proceeds (or, for Net Cash Proceeds in any other currency, the equivalent of
such other currency in Dollars determined using the rate of exchange quoted by Credit Suisse in New York, New York at 11:00 a.m. (New
York time) on the date of determination to prime banks in New York for the spot
purchase in the New York foreign exchange market of such amount of Dollars with
such other currency), the Borrower shall send the Administrative Agent a notice
(a) describing such Asset Sale or the nature and material terms and
conditions of such transaction and (b) stating the estimated Net Cash
Proceeds anticipated to be received by the Borrower or any of its Subsidiaries.

 

72

 

Section 6.6                                   Notices
under Surety Facility

 

Promptly after the
sending or filing thereof, the Borrower shall send the Administrative Agent
copies of all material notices, certificates or reports delivered pursuant to,
or in connection with, any Surety Facility or Approved Additional Surety
Facility.

 

Section 6.7                                   SEC
Filings; Press Releases

 

Promptly after the
sending or filing thereof, the Borrower shall send the Administrative Agent
copies of (a) all reports that the Borrower sends to its security holders
generally, (b) all reports and registration statements that the Borrower,
any of its Subsidiaries or any Permitted Joint Venture files with the
Securities and Exchange Commission or any national or foreign securities
exchange or the National Association of Securities Dealers, Inc., (c) all
press releases and (d) all other statements concerning material changes or
developments in the business of such Loan Party made available by any Loan
Party to the public.

 

Section 6.8                                   Labor
Relations

 

Promptly after becoming
aware of the same, the Borrower shall give the Administrative Agent written
notice of (a) any material labor dispute to which the Borrower, any of its
Subsidiaries or any Permitted Joint Venture is or may become a party, including
any strikes, lockouts or other disputes relating to any of such Person’s plants
and other facilities, and (b) any material Worker Adjustment and
Retraining Notification Act or related liability incurred with respect to the
closing of any plant or other facility of any such Person.

 

Section 6.9                                   Tax
Returns

 

Upon the reasonable
request of any Lender or any Tranche B Investor, in each case through the
Administrative Agent, the Borrower shall provide copies of all federal, state,
local and foreign tax returns and reports filed by the Borrower, any of its
Subsidiaries or any Permitted Joint Venture in respect of taxes measured by
income (excluding sales, use and like taxes).

 

Section 6.10                            Insurance

 

As soon as is practicable
and in any event within 90 days after the end of each Fiscal Year, the Borrower
shall furnish the Administrative Agent with a report in form and substance
reasonably satisfactory to the Administrative Agent and the Lenders outlining
all material insurance coverage maintained as of the date of such report by the
Borrower, its Subsidiaries and Permitted Joint Ventures and the duration of
such coverage.

 

Section 6.11                            ERISA
Matters

 

The Borrower shall
furnish the Administrative Agent each of the following:

 

(a)                                  promptly
and in any event within 30 days after the Borrower, any of its Subsidiaries or
any ERISA Affiliate knows, or has reason to know, that any ERISA Event has
occurred that, alone or together with any other ERISA Event, could reasonably
be expected to result in liability of the Borrower, any Subsidiary and/or any
ERISA Affiliate in an aggregate amount exceeding $7,500,000, written notice
describing such event;

 

73

 

(b)                                 promptly
and in any event within 10 days after the Borrower, any of its Subsidiaries or
any ERISA Affiliate knows or has reason to know that a request for a minimum
funding waiver under Section 412 of the Code has been filed with respect
to any Title IV Plan, a written statement of a Responsible Officer of the
Borrower describing such waiver request and the action, if any, the Borrower,
its Subsidiaries and ERISA Affiliates propose to take with respect thereto and
a copy of any notice filed with the PBGC or the IRS pertaining thereto; and

 

(c)                                  simultaneously
with the date that the Borrower, any of its Subsidiaries or any ERISA Affiliate
files with the PBGC a notice of intent to terminate any Title IV Plan, if,
at the time of such filing, such termination would require material additional
contributions in order to be considered a standard termination within the
meaning of Section 4041(b) of ERISA, a copy of each notice.

 

Section 6.12                            Environmental
Matters

 

The Borrower shall
provide the Administrative Agent promptly, and in any event within 10 days
after any Responsible Officer of any Loan Party obtains actual knowledge of any
of the following, written notice of each of the following:

 

(a)                                  that
any Loan Party is or may be liable to any Person as a result of a Release or
threatened Release that could reasonably be expected to subject such Loan Party
to Environmental Liabilities and Costs of $10,000,000 or more;

 

(b)                                 the
receipt by any Loan Party of notification that any material real or personal
property of such Loan Party is or is reasonably likely to be subject to any
Environmental Lien;

 

(c)                                  the
receipt by any Loan Party of any notice of violation of or potential liability
under, or knowledge by such Loan Party that there exists a condition that could
reasonably be expected to result in a violation of or liability under, any
Environmental Law, except for violations and liabilities the consequence of
which, in the aggregate, would not be reasonably likely to subject the Loan
Parties collectively to Environmental Liabilities and Costs of $10,000,000 or
more; and

 

(d)                                 upon written request by any Lender or any Tranche B
Investor, in each case through the Administrative Agent, a report providing an
update of the status of any environmental, health or safety compliance, hazard
or liability issue identified in any notice or report delivered pursuant to
this Agreement.

 

Section 6.13                            Patriot
Act Information

 

Each Lender, each
Tranche B Investor and the Administrative Agent (for itself and not on
behalf of any Lender or Tranche B Investor) hereby notifies
the Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
“Act”), it is required to obtain, verify
and record information that identifies the Borrower, which information includes
the name and address of the Borrower and other information that will allow such
Lender, Tranche B Investor or the Administrative Agent, as applicable, to
identify the Borrower in accordance with the Act.  The Borrower shall promptly, following a
request by any Agent, any Lender or any Tranche B Investor, provide all
documentation and other information that such Agent, such Lender or such
Tranche B Investor reasonably requests in order to comply with its ongoing
obligations under applicable “know your

 

74

 

customer” and anti-money laundering rules and
regulations, including, without limitation, the Act.

 

Section 6.14                            Other
Information

 

The Borrower shall
provide the Administrative Agent, any Lender or any Tranche B Investor
with such other information respecting the business, properties, condition,
financial or otherwise, or operations of the Borrower, any of its Subsidiaries
or any Permitted Joint Venture as the Administrative Agent or such Lender or
Tranche B Investor, in each case through the Administrative Agent, may
from time to time reasonably request. 
The Administrative Agent shall provide copies of any written information
provided to it pursuant to this Article VI (Reporting
Covenants) to any Lender requesting the same.

 

ARTICLE VII

 

AFFIRMATIVE COVENANTS

 

The Borrower agrees with
the Lenders, the Tranche B Investors and the Administrative Agent to each
of the following, as long as any Obligation or any Commitment remains
outstanding and, in each case, unless the Requisite Lenders otherwise consent
in writing:

 

Section 7.1                                   Preservation
of Corporate Existence, Etc.

 

The Borrower shall, and
shall cause each of its Subsidiaries to, preserve and maintain its legal
existence, rights (charter and statutory) and franchises, except as permitted
by Sections 8.3
(Investments) and 8.4 (Sale of Assets)
and except if, in the reasonable business judgment of the Borrower, it is in
the best business interest of the Borrower or such Subsidiary not to preserve
and maintain such rights (charter and statutory) and franchises, and such
failure to preserve the same would not have a Material Adverse Effect and would
not materially affect the interests of the Secured Parties under the Loan
Documents or the rights and interests of any of them in the Collateral.

 

Section 7.2                                   Compliance
with Laws, Etc.

 

The Borrower shall, and
shall cause each of its Subsidiaries to, comply with all applicable
Requirements of Law, Contractual Obligations and Permits, except where the
failure so to comply would not, in the aggregate, have a Material Adverse
Effect.

 

Section 7.3                                   Conduct
of Business

 

The Borrower shall, and
shall cause each of its Subsidiaries to, (a) conduct its business in the
ordinary course consistent with past practice (except for non-material changes
in the nature or conduct of its business as carried on as of the Effective
Date) and (b) use its reasonable efforts, in the ordinary course and
consistent with past practice, to preserve its business and the goodwill and
business of the customers, advertisers, suppliers and others having business
relations with the Borrower or any of its Subsidiaries, except where the
failure to comply with the covenants in each of clauses (a)
and (b) above would not, in the aggregate, have a Material Adverse
Effect.

 

75

 

Section 7.4                                   Payment of Taxes, Etc.

 

The Borrower shall, and
shall cause each of its Subsidiaries to, pay and discharge before the same
shall become delinquent, all lawful governmental claims, taxes, assessments,
charges and levies, except where contested in good faith, by proper proceedings
and adequate reserves therefor have been established on the books of the
Borrower or the appropriate Subsidiary in conformity with GAAP.

 

Section 7.5                                   Maintenance
of Insurance

 

The Borrower shall
(a) maintain for, or cause to be maintained by, each of its Subsidiaries
insurance with responsible and reputable insurance companies or associations in
such amounts and covering such risks as is usually carried by companies engaged
in similar businesses and owning similar properties in the same general areas
in which the Borrower or such Subsidiary operates, and such other insurance as
may be reasonably requested by the Requisite Lenders, and, in any event, all
insurance required by any Collateral Documents (including the Pledge and
Security Agreement and the Mortgages) and (b) cause all such insurance
(and other such insurance as may be requested by the Administrative Agent) to
name the Administrative Agent on behalf of the Secured Parties as additional
insured, loss payee or lender’s loss payee, as appropriate, and to provide that
no cancellation, material addition in amount or material change in coverage
shall be effective until after 30 days’ written notice thereof to the Administrative
Agent.

 

Section 7.6                                   Access

 

The Borrower shall from
time to time during normal business hours, permit the Administrative Agent, the
Tranche B Investors and the Lenders, or any agents or representatives
thereof, within two Business Days after written notification of the same
(except that during the continuance of an Event of Default, no such notice
shall be required) to (a) examine and make copies of and abstracts from
the records and books of account of the Borrower and each of its Subsidiaries,
(b) visit the properties of the Borrower and each of its Subsidiaries,
(c) discuss the affairs, finances and accounts of the Borrower and each of
its Subsidiaries with any of their respective officers or directors and
(d) communicate directly with the Borrower’s Accountants and any other
certified public accountants.  The
Borrower shall authorize its certified public accountants including the
Borrower’s Accountants to disclose to the Administrative Agent, any
Tranche B Investor or any Lender any and all financial statements and
other information of any kind, as the Administrative Agent, any Tranche B
Investor (through the Fronting Lender) or any Lender reasonably requests from
the Borrower and that such accountants may have with respect to the business,
financial condition, results of operations or other affairs of the Borrower or
any of its Subsidiaries.

 

Section 7.7                                   Keeping
of Books

 

The Borrower shall, and
shall cause each of its Subsidiaries to keep, proper books of record and
account, in which full and correct entries shall be made in conformity with
GAAP of all financial transactions and the assets and business of the Borrower
and each such Subsidiary.

 

Section 7.8                                   Maintenance
of Properties, Etc.

 

The Borrower shall, and
shall cause each of its Subsidiaries to, maintain and preserve (a) in good
working order and condition all of its properties necessary in the conduct of

 

76

 

its business,
(b) all rights, permits, licenses, approvals and privileges (including all
Permits)  necessary in the conduct of its
business and (c) all Material Intellectual Property, except where failure
to so maintain and preserve the items set forth in clauses (a),
(b) and (c)
above would not, in the aggregate, have a Material Adverse Effect.

 

Section 7.9                                   Application
of Proceeds

 

The Borrower shall use
the entire amount of the proceeds of the Loans as provided in Section 4.13  (Use of Proceeds).

 

Section 7.10                            Environmental

 

The Borrower shall, and
shall cause all of its Subsidiaries to, comply in all material respects with
Environmental Laws and, without limiting the foregoing, the Borrower shall, at
its sole cost and expense, upon receipt of any notification or otherwise
obtaining knowledge of any Release or other event that has any reasonable
likelihood of the Borrower and its Subsidiaries incurring Environmental
Liabilities and Costs in excess of $10,000,000 in the aggregate, take such
Remedial Action and undertake such investigation or other action as required by
Environmental Laws or as is appropriate and consistent with good business
practice to address the Release or event and otherwise ensure compliance with
Environmental Laws.

 

Section 7.11                            Additional
Collateral and Guaranties

 

To the extent not
delivered to the Administrative Agent on or before the Effective Date, the
Borrower agrees to do promptly each of the following:

 

(a)                                  execute
and deliver to the Administrative Agent such amendments to the Collateral
Documents as the Administrative Agent deems necessary or advisable in order to
grant to the Administrative Agent, for the ratable benefit of the Secured
Parties, a perfected first-priority security interest in the Stock and Stock
Equivalents and other debt Securities of any Subsidiary of the Borrower that
are owned by the Borrower or any of its Subsidiaries and requested to be
pledged by the Administrative Agent; provided, however, that in no event shall the Borrower or any of its
Subsidiaries be required to pledge in excess of 65% of the outstanding Stock of
any Foreign Subsidiary or any of the stock of any Subsidiary of such Foreign
Subsidiary;

 

(b)                                 deliver
to the Administrative Agent the certificates (if any) representing such Stock
and Stock Equivalents and other debt Securities, together with (A) in the
case of such certificated Stock and Stock Equivalents, undated stock powers
endorsed in blank and (B) in the case of such certificated debt
Securities, endorsed in blank, in each case executed and delivered by a
Responsible Officer of the Borrower or such Subsidiary, as the case may be;

 

(c)                                  in
the case of any Wholly-Owned Subsidiary of any Loan Party that is a Domestic
Subsidiary, cause such Wholly-Owned Subsidiary (i) to become a party to
the Guaranty and the applicable Collateral Documents and (ii) to take such
actions necessary or advisable to grant to the Administrative Agent for the
ratable benefit of the Secured Parties a perfected security interest in the
Collateral described in the Collateral Documents with respect to such
Subsidiary, including the filing of UCC financing statements in such
jurisdictions as may be required by the Collateral Documents or by law or as
may be reasonably requested by the Administrative Agent; and

 

77

 

(d)                                 if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Agent.

 

Section 7.12                            Real
Property

 

If, at any time, the
Borrower or any Subsidiary Guarantor acquires a fee interest in any U.S. Real
Property with a Fair Market Value of $1,000,000 or more not covered by a
Mortgage, the Borrower or such Subsidiary promptly shall execute, deliver and
record a first-priority Mortgage in favor of the Administrative Agent on behalf
and for the ratable benefit of the Secured Parties covering such Real Property
(subordinate only to such Liens as are permitted hereunder), in form and
substance substantially similar to the Mortgages previously delivered, and
provide the Administrative Agent with a Mortgagee’s Title Insurance Policy
covering such Real Property in an amount equal to the purchase price of such
Real Property, a current ALTA survey thereof and a surveyor’s certificate in
form and substance reasonably satisfactory to the Administrative Agent and such
other agreements, documents and instruments reasonably requested by the
Administrative Agent, including without limitation, favorable opinions of
counsel in each state in which any Mortgage is recorded, in each case from
counsel to the Loan Parties reasonably satisfactory to the Administrative Agent
and addressing such matters as the Administrative Agent (or any Lender or
Tranche B Investor through the Administrative Agent) may reasonably request.

 

ARTICLE VIII

 

NEGATIVE COVENANTS

 

The Borrower agrees with
the Lenders, the Tranche B Investors and the Administrative Agent to each
of the following, as long as any Obligation or any Commitment remains
outstanding and, in each case, unless the Requisite Lenders otherwise consent
in writing:

 

Section 8.1                                   Indebtedness

 

The Borrower shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly create,
incur, assume or otherwise become or remain directly or indirectly liable with respect
to any Indebtedness except for the following:

 

(a)                                  the Secured Obligations;

 

(b)                                 Indebtedness
existing on the Effective Date and disclosed on Schedule 8.1
(Existing Indebtedness);

 

(c)                                  Guaranty
Obligations incurred by the Borrower or any Guarantor in respect of
Indebtedness of the Borrower or any Guarantor that is permitted by this Section 8.1 (other than clause (g)
or (i) below);

 

(d)                                 Capital
Lease Obligations and purchase money Indebtedness incurred by the Borrower or a
Subsidiary of the Borrower to finance the acquisition of fixed assets; provided, however, that the Capital Expenditure related thereto is otherwise
permitted by Section 5.4 (Capital Expenditures) and
that the aggregate outstanding principal amount of all such Capital Lease
Obligations and purchase money Indebtedness shall not exceed $60,000,000 at any
time;

 

78

 

(e)                                  Renewals,
extensions, refinancings and refundings of Indebtedness permitted by clause (b) or (d) above or
this clause (e); provided, however, that any such renewal, extension, refinancing or
refunding is in an aggregate principal amount not greater than the principal
amount of, and is on aggregate terms no less favorable to the Borrower or such
Subsidiary, including as to weighted average maturity, than the Indebtedness
being renewed, extended, refinanced or refunded;

 

(f)                                    Indebtedness
arising from intercompany loans (i) from the Borrower to any Subsidiary
Guarantor, (ii) from any Subsidiary of the Borrower to the Borrower or any
Subsidiary Guarantor, (iii) from any Subsidiary of the Borrower that is not a
Loan Party to any other Subsidiary of the Borrower that is not a Loan Party, or
(iv) from the Borrower or any Subsidiary Guarantor to any Permitted Joint
Venture or to any Subsidiary of the Borrower that is not a Subsidiary
Guarantor; provided, however,
that the Investment in the intercompany loan to such Permitted Joint Venture or
Subsidiary is permitted under Section 8.3
(Investments);

 

(g)                                 Non-Recourse
Indebtedness;

 

(h)                                 Indebtedness
consisting of reimbursement and other obligations arising under any surety bond
issued under the Surety Facility or any Approved Additional Surety Facility;

 

(i)                                     each letter of credit issued for the account of Broadway
Insurance Company, Ltd. or its successor, in an aggregate outstanding face
amount not to exceed $50,000,000;

 

(j)                                     Indebtedness
or other liability incurred or assumed by any Loan Party in connection with a
Permitted Acquisition;

 

(k)                                  other unsecured Indebtedness of the Borrower in an aggregate
principal amount not exceeding $30,000,000 at any time outstanding;

 

(l)                                     Indebtedness
of Foreign Subsidiaries incurred for working capital purposes in an aggregate
principal amount not to exceed $15,000,000; and

 

(m)                               Indebtedness
under or in respect of Hedging Contracts that are not speculative in nature.

 

Section 8.2                                   Liens,
Etc.

 

The Borrower shall not,
and shall not permit any of its Subsidiaries to, create or suffer to exist, any
Lien upon or with respect to any of their respective properties or assets,
whether now owned or hereafter acquired, or assign, or permit any of its
Subsidiaries to assign, any right to receive income, except for the following:

 

(a)                                  Liens
created pursuant to the Loan Documents;

 

(b)                                 Liens
existing on the Effective Date and disclosed on Schedule 8.2
(Existing Liens);

 

(c)                                  Customary
Permitted Liens of the Borrower and its Subsidiaries;

 

79

 

(d)                                 Liens
granted by the Borrower or any Subsidiary of the Borrower under a Capital Lease
and Liens to which any property is subject at the time, on or after the
Effective Date, of the Borrower’s or such Subsidiary’s acquisition thereof in
accordance with this Agreement, in each case securing Indebtedness permitted
under Section 8.1(d) (Indebtedness) and
limited in the case of a Capital Lease, to the property purchased with the
proceeds subject to such Capital Lease;

 

(e)                                  purchase
money security interests in real property, improvements thereto or equipment
(including any item of equipment purchased in connection with a particular
construction Project that the Borrower or a Subsidiary expects to sell to its
customer with respect to such Project and that, pending such sale, is
classified as inventory) hereafter acquired (or, in the case of improvements,
constructed) by the Borrower or any of its Subsidiaries; provided,
however, that (i) such security
interests secure purchase money Indebtedness permitted by under
Section 8.1(d) (Indebtedness) and
are limited to the property purchased with the proceeds of such purchase money
Indebtedness, (ii) such security interests are incurred, and the
Indebtedness secured thereby is created, within one hundred and eighty days of
such acquisition or construction, (iii) the Indebtedness secured thereby
does not exceed the lesser of the cost or Fair Market Value of such real
property, improvements or equipment at the time of such acquisition or
construction and (iv) such security interests do not apply to any other
property or assets of the Borrower or any of its Subsidiaries;

 

(f)                                    any
Lien securing the renewal, extension, refinancing or refunding of any
Indebtedness secured by any Lien permitted by clause (b),
(d) or (e) above
or this clause (f) without any material
change in the assets subject to such Lien;

 

(g)                                 Liens
in favor of lessors securing operating leases permitted hereunder;

 

(h)                                 Liens
securing Non-Recourse Indebtedness permitted under Section 8.1(g)
(Indebtedness) on the assets of the Subsidiary or Permitted Joint
Venture financed by such Non-Recourse Indebtedness;

 

(i)                                     (A)
Liens in favor of the Surety under the Surety Facility and subject to the
Surety Intercreditor Agreement and (B) Liens arising under any Approved
Additional Surety Facility in connection with surety bonds thereunder and in favor of the surety therefor; provided, however, that
such Liens permitted pursuant to this clause (B)
shall extend only to assets relating directly to the Project bonded thereby;

 

(j)                                     Liens in favor of BNFL securing the Borrower’s
and its Subsidiaries’ obligations to BNFL under the Westinghouse Acquisition
Documents; provided, however,
that the scope, extent and priority of any Lien permitted under this clause (j) (other than
the Payment Rights, as defined in the Westinghouse Acquisition Documents or any
other Lien provided for or required under any such Westinghouse Acquisition
Document executed prior to the Effective Date) shall have been approved by and
acceptable to the Administrative Agent;

 

(k)                                  Liens
arising out of judgments or awards and not constituting an Event of Default
under Section 9.1(g)  (Events of
Default); and

 

(l)                                     Liens
not otherwise permitted by the foregoing clauses of this Section 8.2
securing obligations or other liabilities (other than Indebtedness) of any Loan
Party; provided,

 

80

 

however, that the
aggregate outstanding amount of all such obligations and liabilities secured by
such Liens shall not exceed $15,000,000 at any time.

 

Section 8.3                                   Investments

 

The Borrower shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly make or
maintain any Investment except for the following:

 

(a)                                  Investments
existing on the Effective Date and disclosed on Schedule 8.3
(Existing Investments);

 

(b)                                 Investments
in cash and Cash Equivalents;

 

(c)                                  Investments
in accounts, contract rights and chattel paper (each as defined in the UCC),
notes receivable and similar items arising or acquired from the sale of
Inventory in the ordinary course of business consistent with the past practice
of the Borrower and its Subsidiaries;

 

(d)                                 Investments
received in settlement of amounts due to the Borrower or any Subsidiary of the
Borrower effected in the ordinary course of business;

 

(e)                                  Investments
by (i) the Borrower in any Subsidiary Guarantor or by any Subsidiary
Guarantor in the Borrower or any other Subsidiary Guarantor, (ii) a
Subsidiary of the Borrower that is not a Subsidiary Guarantor in the Borrower
or any other Subsidiary of the Borrower or (iii) the Borrower or any
Subsidiary Guarantor in a Subsidiary that is neither a Subsidiary Guarantor nor
a Permitted Joint Venture; provided, however, that the aggregate outstanding amount of all such
Investments pursuant to this clause (iii)
shall not exceed $75,000,000 at any time;

 

(f)                                    loans
or advances to employees of the Borrower or any of its Subsidiaries in the
ordinary course of business; provided, however, that (i) the aggregate principal amount of all
such loans and advances shall not exceed $2,500,000 at any time and
(ii) the proceeds of such loans or advances are used solely to reimburse
such employee for relocation expenses actually incurred;

 

(g)                                 Investments
constituting Guaranty Obligations permitted by Section 8.1
(Indebtedness);

 

(h)                                 direct or indirect ordinary course of business Investments
in Permitted Joint Ventures engaged in an Eligible Line of Business;

 

(i)                                     Investments
in connection with a Permitted Acquisition;

 

(j)                                     Investments
not otherwise permitted hereby; provided, however, that the aggregate outstanding amount of all such
Investments shall not exceed $20,000,000 at any time.

 

Section 8.4                                   Sale
of Assets

 

The Borrower shall not,
and shall not permit any of its Subsidiaries to, sell, convey, transfer, lease
or otherwise dispose of, any of their respective assets or any interest therein
(including the sale or factoring at maturity or collection of any accounts) to
any Person, or

 

81

 

permit or suffer
any other Person to acquire any interest in any of their respective assets or,
in the case of any Subsidiary, issue or sell any shares of such Subsidiary’s
Stock or Stock Equivalent (any such disposition being an “Asset Sale”),
except for the following:

 

(a)                                  the sale or disposition of inventory in the ordinary course
of business;

 

(b)                                 transfers
resulting from any taking or condemnation of any property of the Borrower or
any of its Subsidiaries (or, as long as no Default or Event of Default has
occurred and is continuing or would result therefrom, deed in lieu thereof);

 

(c)                                  as
long as no Default or Event of Default is continuing or would result therefrom,
the sale or disposition of equipment that the Borrower reasonably determines is
no longer useful in its business, has become obsolete, damaged or surplus or is
replaced in the ordinary course of business;

 

(d)                                 as
long as no Default or Event of Default is continuing or would result therefrom,
the sale or disposition of the Specified Property;

 

(e)                                  as
long as no Default or Event of Default is continuing or would result therefrom,
the sale or disposition of assets of any Permitted Joint Venture that, both at
the time of such sale and as of the Effective Date, do not constitute, in the
aggregate, all or a material part of the assets of such Permitted Joint
Venture;

 

(f)                                    as
long as no Default or Event of Default is continuing or would result therefrom,
the lease or sublease of Real Property not constituting a sale and leaseback,
to the extent not otherwise prohibited by this Agreement or the Mortgages;

 

(g)                                 as
long as no Default or Event of Default is continuing or would result therefrom,
assignments and licenses of intellectual property of the Borrower and its
Subsidiaries in the ordinary course of business;

 

(h)                                 as
long as no Default or Event of Default is continuing or would result therefrom,
discounts, adjustments, settlements and compromises of Accounts and contract
claims in the ordinary course of business and in accordance with generally
accepted practices in the industry;

 

(i)                                     any Asset Sale (i) to the Borrower or any Subsidiary
Guarantor or (ii) by any Subsidiary that is not a Loan Party to another
Subsidiary that is not a Loan Party;

 

(j)                                     as
long as no Default or Event of Default is continuing or would result therefrom,
any other Asset Sale for Fair Market Value, at least 75% of which is payable in
cash or Cash Equivalents upon such sale; provided, however, that with respect to any such sale pursuant to this  clause (j), the aggregate consideration received for the sale
of all assets sold during any Fiscal Year shall not exceed $15,000,000;

 

(k)                                  Asset
Sales permitted by Section 8.13
(Sale/Leasebacks); and

 

(l)                                     any
issuance of Voting Stock of the Borrower pursuant to the Warrants or the Stock
Options, and subject to the terms and conditions set forth therein and in the
Warrant Agreements or, as the case may be, the applicable Stock Option Plan.

 

82

 

Section 8.5                                   Restricted
Payments

 

The Borrower shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly, declare, order, pay or make any sum for any Restricted
Payment except for:

 

(a)                                  Restricted
Payments by the Borrower to any Subsidiary Guarantor;

 

(b)                                 Restricted
Payments by (i) any Subsidiary of the Borrower to the Borrower or any
Subsidiary Guarantor or (ii) any Subsidiary that is not a Loan Party to
another Subsidiary that is not a Loan Party;

 

(c)                                  Restricted
Payments by  any Permitted Joint Venture to the Borrower or any Subsidiary
Guarantor and to any other direct or indirect holders of equity interests in
such Permitted Joint Venture to the extent (i) such Restricted Payments
are made pro rata among the holders of the equity
interests in such Permitted Joint Venture or (ii) pursuant to the terms of
the joint venture or other distribution agreement for such Permitted Joint
Venture in form and substance approved by the Administrative Agent;

 

(d)                                 any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Stock or Stock Equivalents of
the Borrower or any of its Subsidiaries solely with the proceeds received from
the exercise of any Warrant or Option;

 

(e)                                  any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Stock or Stock Equivalents of
the Borrower or any of its Subsidiaries or any dividend, distribution or other
payment, whether direct or indirect, on account of any Stock or Stock
Equivalents of the Borrower or any of its Subsidiaries; provided,
however, that (i) the aggregate
amount of all such Restricted Payments shall not exceed (x) $100,000,000
in any Fiscal Year and (y) $150,000,000 from the Effective Date until the
payment in full of the Obligations and (ii) no such Restricted Payment may
be made unless, at the time thereof and after giving effect thereto and the
source of funds therefor, (A) the Borrower and its consolidated
Subsidiaries would have at least $150,000,000 of cash and Cash Equivalents, (B)
no Default or Event of Default shall have occurred and be continuing or would
result therefrom, (C) the Borrower would be in pro forma
compliance with the covenants set forth in Article V (Financial Covenants)
and (D) the Available Credit shall be at least $100,000,000.

 

Section 8.6                                   Restriction
on Fundamental Changes

 

Except in connection with
a Permitted Acquisition, the Borrower shall not, and shall not permit any of
its Subsidiaries to, (a) merge or consolidate with any Person (provided that, if at the time thereof and immediately after
giving effect thereto no Event of Default or Default shall have occurred and be
continuing (i) any Wholly-Owned Subsidiary may merge into the Borrower so long
as the Borrower is the surviving company, (ii) any Wholly-Owned Subsidiary may
merge into or consolidate with any other Wholly-Owned Subsidiary in a transaction
in which the surviving entity is a Wholly-Owned Subsidiary and no person other
than the Borrower or a Wholly-Owned Subsidiary receives any consideration (provided that if any party to any such transaction is a
Loan Party, the surviving entity of such transaction shall be a Loan Party) and
(iii) any Subsidiary of the Borrower may merge with another person in a
transaction constituting an Asset Sale permitted hereunder), (b) acquire
all or substantially all of the Stock or Stock Equivalents of any Person,
(c) acquire all or substantially all of the assets of

 

83

 

any Person or all
or substantially all of the assets constituting the business of a division,
branch or other unit operation of any Person, (d) enter into any joint
venture or partnership with any Person that is not a Loan Party other than any
Permitted Joint Venture or (e) acquire or create any Subsidiary unless,
after giving effect to such acquisition or creation, (i) such Subsidiary
is a Permitted Joint Venture or a Wholly-Owned Subsidiary of the Borrower,
(ii) the Borrower is in compliance with Section 7.11
(Additional Collateral and Guaranties) and (iii) the Investment
in such Subsidiary is permitted under Section 8.3(c)
(Investments).

 

Section 8.7                                   Change
in Nature of Business

 

The Borrower shall not,
and shall not permit any of its Subsidiaries to, engage in any material fashion
in any business other than the Eligible Line of Business.

 

Section 8.8                                   Transactions
with Affiliates

 

The Borrower shall not,
and shall not permit any of its Subsidiaries to, except as otherwise expressly
permitted herein, do any of the following: (a) make any Investment in an
Affiliate of the Borrower that is not, or does not thereby or in connection
therewith become, a Subsidiary of the Borrower or a
Permitted Joint Venture, (b) transfer, sell, lease, assign or otherwise
dispose of any asset to any Affiliate of the Borrower that is not, or does not
thereby or in connection therewith become, a Subsidiary of the Borrower or a
Permitted Joint Venture, (c) merge into or consolidate with or purchase or
acquire assets from any Affiliate of the Borrower that is not, or does not
thereby or in connection therewith become, a Subsidiary of the Borrower,
(d) repay any Indebtedness to any Affiliate of the Borrower that is not,
or does not thereby or in connection therewith become, a Subsidiary of the
Borrower or (e) enter into any other transaction (including any retention
bonus or other compensation arrangement) directly or indirectly with or for the
benefit of any Affiliate of the Borrower that is not a Guarantor (including
guaranties and assumptions of obligations of any such Affiliate), except in
each case for transactions in the ordinary course of business on a basis no
less favorable to the Borrower or such Subsidiary as would be obtained in a
comparable arm’s length transaction with a Person not an Affiliate.

 

Section 8.9                                   Restrictions
on Subsidiary Distributions; No New Negative Pledge

 

Other than pursuant to
the Loan Documents and any agreements governing any Non-Recourse Indebtedness,
or any purchase money Indebtedness or Capital Lease Obligations permitted by Section 8.1(b), (d) or (e)
(Indebtedness) (in the case of any such purchase money Indebtedness
or Capital Lease Obligations, so long as any prohibition or limitation is only
effective against the assets financed thereby), the Borrower shall not, and
shall not permit any of its Subsidiaries to, (a) other than for Permitted
Joint Ventures, agree to enter into or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of such
Subsidiary to pay dividends or make any other distribution or transfer of funds
or assets or make loans or advances to or other Investments in, or pay any
Indebtedness owed to, the Borrower or any other Subsidiary of the Borrower or
(b) enter into or suffer to exist or become effective any enforceable
agreement prohibiting or limiting the ability of the Borrower or any Subsidiary
to create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired, to secure the
Obligations, including any agreement requiring any other Indebtedness or
Contractual Obligation to be equally and ratably secured with the Obligations.

 

84

 

 

Section 8.10                            Modification
of Constituent Documents

 

The Borrower shall not,
and shall not permit any of its Subsidiaries to, change its capital structure
(including in the terms of its outstanding Stock) or otherwise amend its
Constituent Documents, except for changes and amendments that do not materially
and adversely affect the rights and privileges of the Borrower or any of its
Subsidiaries and do not materially and adversely affect the interests of the
Secured Parties under the Loan Documents or the rights and interests of any of
them in the Collateral.

 

Section 8.11                            Accounting
Changes; Fiscal Year

 

The Borrower shall not,
and shall permit any of its Subsidiaries to, change its (a) accounting
treatment and reporting practices or tax reporting treatment, except as
required by GAAP or any Requirement of Law and disclosed to the Lenders and the
Administrative Agent or (b) Fiscal Year.

 

Section 8.12                            Margin
Regulations

 

The Borrower shall not,
and shall not permit any of its Subsidiaries to, use all or any portion of the
proceeds of any credit extended hereunder to purchase or carry margin stock
(within the meaning of Regulation U of the Federal Reserve Board) in
contravention of Regulation U of the Federal Reserve Board.

 

Section 8.13                            Sale/Leasebacks

 

The Borrower shall not,
and shall not permit any of its Subsidiaries to, enter into any sale and
leaseback transaction unless the proceeds of such transaction received by the
Loan Parties equal the Fair Market Value of the properties subject to such
transaction and, after giving effect to such sale and leaseback transaction,
the aggregate Fair Market Value of all properties covered at any one time by
all sale and leaseback transactions permitted hereunder (other than any sale
and leaseback transaction of property entered into within 90 days of the
acquisition of such property) does not exceed $60,000,000.

 

Section 8.14                            Cancellation
of Indebtedness Owed to It

 

The Borrower shall not,
and shall not permit any of its Subsidiaries to, cancel any material claim or
Indebtedness owed to any of them except in the ordinary course of business
consistent with past practice.

 

Section 8.15                            No
Speculative Transactions

 

The Borrower shall not,
and shall not permit any of its Subsidiaries to, engage in any speculative
transaction or in any transaction involving Hedging
Contracts except for the sole purpose of hedging in the normal course of
business and consistent with industry practices.

 

Section 8.16                            Compliance
with ERISA

 

The Borrower shall not
cause or permit to occur, and shall not permit any of its Subsidiaries or ERISA
Affiliates to cause or permit to occur ERISA Events
that could reasonably be expected to have a Material Adverse Effect in the
aggregate.

 

85

 

ARTICLE IX

 

Events of Default

 

Section 9.1                                   Events
of Default

 

Each of the following
events shall be an Event of Default:

 

(a)                                  the Borrower shall fail to pay any principal of any Loan or
any Reimbursement Obligation when the same becomes due and payable; or

 

(b)                                 the
Borrower shall fail to pay any interest on any Loan, any fee under any of the
Loan Documents or any other Obligation (other than one referred to in clause (a) above) and such non-payment continues
for a period of three Business Days after the due date therefor; or

 

(c)                                  any
representation or warranty made or deemed made by any Loan Party in any Loan
Document or by any Loan Party (or any of its officers) in connection with any
Loan Document shall prove to have been incorrect in any material respect when
made or deemed made; or

 

(d)                                 any
Loan Party shall fail to perform or observe (i) any term, covenant or
agreement contained in Article V (Financial
Covenants), Section 6.1
(Financial Statements), 6.3 (Default Notices), 7.1 (Preservation of Corporate Existence, Etc.), 7.6 (Access), 7.11 (Additional
Collateral and Guaranties), 7.12(a) (Real
Property) or Article VIII
(Negative Covenants) or (ii) any other term, covenant or
agreement contained in this Agreement or in any other Loan Document if such
failure under this clause (ii) shall
remain unremedied for 30 days after the earlier of (A) the date on which a
Responsible Officer of the Borrower becomes aware of such failure and (B) the
date on which written notice thereof shall have been given to the Borrower by
the Administrative Agent, any Lender or any Tranche B Investor; or

 

(e)                                  (i) the
Borrower or any of its Subsidiaries shall fail to make any payment on any
Indebtedness of the Borrower or any such Subsidiary (other than the
Obligations) or any Guaranty Obligation in respect of Indebtedness of any other
Person, and, in each case, such failure relates to Indebtedness having a
principal amount of $15,000,000 or more, when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), (ii) any other event shall occur or condition shall exist
under any agreement or instrument relating to any such Indebtedness, if the
effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness or (iii) any such
Indebtedness shall become or be declared to be due and payable, or required to
be prepaid or repurchased (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; provided
that clauses (ii) and (iii) above shall not apply to secured
Indebtedness that becomes due as a result of the voluntary sale or transfer of
the property or assets securing such Indebtedness; or

 

(f)                                    (i) the
Borrower or any of its Subsidiaries shall generally not pay its debts as such
debts become due, shall admit in writing its inability to pay its debts
generally or shall make a general assignment for the benefit of creditors, (ii) any
proceeding shall be instituted by or against the Borrower or any of its
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,

 

86

 

protection,
relief or composition of it or its debts, under any Requirement of Law relating
to bankruptcy, insolvency or reorganization or relief of debtors, or seeking
the entry of an order for relief or the appointment of a custodian, receiver,
trustee or other similar official for it or for any substantial part of its property;
provided, however,
that, in the case of any such proceedings instituted against the Borrower or
any of its Subsidiaries (but not instituted by the Borrower or any of its
Subsidiaries), either such proceedings shall remain undismissed or unstayed for
a period of 45 days or more or any action sought in such proceedings shall
occur or (iii) the Borrower or any of its Subsidiaries shall take any
corporate action to authorize any action set forth in clauses (i) and
(ii) above; or

 

(g)                                 one
or more judgments or orders (or other similar process) involving, in the case
of a money judgment, an amount in excess of $15,000,000 in the aggregate, to
the extent not covered by insurance, shall be rendered against one or more of
any Loan Party and its Subsidiaries and shall remain unpaid and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order or (ii) there shall be any period of 20 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or

 

(h)                                 an
ERISA Event shall occur and the amount of all liabilities and deficiencies
resulting therefrom imposed on or which could reasonably be expected to be
imposed directly on the Borrower or any of its Subsidiaries, whether or not
assessed, when taken together with all other such ERISA Events exceeds
$30,000,000 in the aggregate; or

 

(i)                                     any
provision of any Collateral Document or the Guaranty after delivery thereof
pursuant to this Agreement or any other Loan Document shall for any reason,
except as permitted by the Loan Documents, cease to be valid and binding on, or
enforceable against, any Loan Party party thereto, or any Loan Party shall so
state in writing; or

 

(j)                                     any
Collateral Document shall for any reason fail or cease to create a valid Lien
on any Collateral purported to be covered thereby or, except as permitted by
the Loan Documents, such Lien shall fail or cease to be a perfected and first
priority Lien or any Loan Party shall so state in writing; or

 

(k)                                  any
material provision of the Surety Facility shall for any reason cease to be
valid and binding on, or enforceable against, any Loan Party party thereto, or
any Loan Party shall so state in writing or bonding shall cease to be made
available thereunder (and, in each case, no replacement therefor reasonably
acceptable to the Administrative Agent shall be provided prior thereto or at
such later time as the Administrative Agent may determine in its reasonable
discretion) or any Loan Party shall be in material breach thereof or any
default (or event which with the passage of time or the giving of notice or
both shall constitute a default) shall exist thereunder and bonding shall cease
to be made available thereunder as a result thereof (and no replacement
therefor reasonably acceptable to the Administrative Agent shall be provided
prior thereto or at such later time as the Administrative Agent may determine
in its reasonable discretion); or

 

(l)                                     there shall occur any Change of Control.

 

87

 

Section 9.2                                   Remedies

 

During the continuance of
any Event of Default, the Administrative Agent (a) may, and, at the
request of the Requisite Lenders, shall, by notice to the Borrower declare that
all or any portion of the Commitments be terminated, whereupon the obligation
of each Lender to make any Loan and each Issuer to Issue any Letter of Credit
shall immediately terminate and (b) may and, at the request of the
Requisite Lenders, shall, by notice to the Borrower, declare the Loans, all
interest thereon and all other amounts and Obligations payable under this
Agreement to be forthwith due and payable, whereupon the Loans, all such
interest and all such amounts and Obligations shall become and be forthwith due
and payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower; provided, however, that
upon the occurrence of the Events of Default specified in Section 9.1(f) (Events
of Default), (x) the Commitments of each Lender to make Loans
and the commitments of each Lender and Issuer to Issue or participate in
Letters of Credit shall each automatically be terminated and (y) the
Loans, all such interest and all such amounts and Obligations shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower.  In addition to the
remedies set forth above, the Administrative Agent may exercise any remedies
provided for by the Collateral Documents in accordance with the terms thereof
or any other remedies provided by applicable law.

 

Section 9.3                                   Actions
in Respect of Letters of Credit

 

Upon the Revolving Credit
Termination Date or as may be required by Section 2.9(b) (Mandatory
Prepayments), the Borrower shall pay to the Administrative Agent in
immediately available funds at the Administrative Agent’s office referred to in
Section 11.8 (Notices, Etc.), for
deposit in a Cash Collateral Account, an amount equal to 105% of the sum of all
outstanding Letter of Credit Obligations. 
The Administrative Agent may, from time to time after funds are
deposited in any Cash Collateral Account (and while an Event of Default has
occurred and is continuing or after the acceleration of the Loans), apply funds
then held in such Cash Collateral Account to the payment of any amounts, in
accordance with Section 2.13(f) (Payments and
Computations), as shall have become or shall become due and payable
by the Borrower to the Issuers or Lenders in respect of the Letter of Credit
Obligations.  The Administrative Agent
shall promptly give written notice of any such application; provided, however, that
the failure to give such written notice shall not invalidate any such application.

 

ARTICLE X

 

The Administrative Agent, The
Fronting Lender and Other Agents

 

Section 10.1                            Authorization
and Action

 

(a)                                  Each
Lender, each Tranche B Investor and each Issuer hereby appoints Credit Suisse as the Administrative
Agent hereunder, and each Lender, each Tranche B Investor and each Issuer
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement and the other Loan Documents
as are delegated to the Administrative Agent under such agreements and to
exercise such powers as are reasonably incidental thereto.  Without limiting the foregoing, each Lender,
each Tranche B Investor and each Issuer hereby authorizes the Administrative
Agent to execute and deliver, and to perform its obligations under, each of the
Loan Documents to which the Administrative Agent is a party, to

 

88

 

exercise
all rights, powers and remedies that the Administrative Agent may have under
such Loan Documents and, in the case of the Collateral Documents, to act as
agent for the Lenders, the Tranche B Investors, the Issuers and the other
Secured Parties under such Collateral Documents.

 

(b)                                 As
to any matters not expressly provided for by this Agreement and the other Loan
Documents (including enforcement or collection), neither the Administrative
Agent nor the Fronting Lender shall be required to exercise any discretion or
take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Requisite Lenders, and such instructions shall be binding
upon all Lenders, each Issuer and all Tranche B Investors; provided, however, that
neither the Administrative Agent nor the Fronting Lender shall be required to
take any action that (i) the Administrative Agent or, as the case may be,
the Fronting Lender in good faith believes exposes it to personal liability
unless the Administrative Agent or, as the case may be, the Fronting Lender
receives an indemnification satisfactory to it from the Lenders, the Issuers
and the Tranche B Investors with respect to such action or (ii) is
contrary to the Amendment Agreement, this Agreement, any other Loan Document or
any applicable Requirement of Law.  The
Administrative Agent agrees to give to each Lender, each Tranche B Investor and
each Issuer prompt notice of each notice given to it by any Loan Party pursuant
to the terms of this Agreement or the other Loan Documents.

 

(c)                                  In
performing its functions and duties hereunder and under the other Loan
Documents, the Administrative Agent is acting solely on behalf of the Lenders,
the Tranche B Investors and the Issuers and its duties are entirely
administrative in nature.  The
Administrative Agent does not assume and shall not be deemed to have assumed
any obligation other than as expressly set forth herein and in the other Loan
Documents or any other relationship as the agent, fiduciary or trustee of or
for any Lender, Issuer, Tranche B Investor or holder of any other
Obligation.  The Administrative Agent may
perform any of its duties under any Loan Document by or through its agents or
employees.

 

(d)                                 In
performing its functions and duties hereunder and under the other Loan
Documents, the Fronting Lender is acting solely on behalf of the Tranche B
Investors and its duties are entirely administrative in nature.  The Fronting Lender does not assume and shall
not be deemed to have assumed any obligation other than as expressly set forth
herein and in the other Loan Documents or any other relationship as the agent,
fiduciary or trustee of or for any Lender, Issuer, Tranche B Investor or
holder of any other Obligation.  The
Fronting Lender may perform any of its duties under any Loan Document by or
through its agents or employees.

 

Section 10.2                            Administrative
Agent’s and Fronting Lender’s Reliance, Etc.

 

(a)                                  None
of the Administrative Agent, any of its Affiliates or any of their respective
directors, officers, agents or employees shall be liable for any action taken
or omitted to be taken by it, him, her or them under or in connection with this
Agreement or, the other Loan Documents, except for its, his, her or their own
gross negligence or willful misconduct. 
Without limiting but subject to the foregoing, the Administrative Agent (a) may
treat the payee of any Note as its holder until such Note has been assigned in
accordance with Section 11.2 (Assignments and
Participations), (b) may rely on the Register to the extent set
forth in Section 11.2(c) (Assignments and
Participations), (c) may consult with legal counsel (including
counsel to the Borrower or any other Loan Party), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts, (d) makes no

 

89

 

warranty
or representation to any Lender, Issuer or Tranche B Investor and shall
not be responsible to any Lender, Issuer or Tranche B Investor for any
statements, warranties or representations made by or on behalf of the Borrower
or any of its Subsidiaries or the Fronting Lender in or in connection with this
Agreement or any other Loan Document, (e) shall not have any duty to
ascertain or to inquire either as to the performance or observance of any term,
covenant or condition of this Agreement or any other Loan Document, as to the
financial condition of any Loan Party or as to the existence or possible
existence of any Default or Event of Default, (f) shall not be responsible
to any Lender, Issuer or Tranche B Investor for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or
the attachment, perfection or priority of any Lien created or purported to be
created under or in connection with, this Agreement, any other Loan Document or
any other instrument or document furnished pursuant hereto or thereto and (g) shall
incur no liability under or in respect of this Agreement or any other Loan
Document by acting upon any notice, consent, certificate or other instrument or
writing (which writing may be a telecopy or, if consented to by the
Administrative Agent, electronic mail) or any telephone message believed by it to
be genuine and signed or sent by the proper party or parties.

 

(b)                                 None
of the Fronting Lender, any of its Affiliates or any of their respective
directors, officers, agents or employees shall be liable for any action taken
or omitted to be taken by it, him, her or them under or in connection with this
Agreement or the other Loan Documents, except for its, his, her or their own
gross negligence or willful misconduct. 
Without limiting the foregoing, the Fronting Lender (a)  may
consult with legal counsel (including counsel to the Borrower, any other Loan
Party or any Tranche B Investor), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts, (b) makes no warranty or representation to any
Lender, Issuer or Tranche B Investor and shall not be responsible to any
Lender, Issuer or Tranche B Investor for any statements, warranties or
representations made by or on behalf of the Borrower or any of its Subsidiaries
in or in connection with this Agreement or any other Loan Document, (c) shall
not have any duty to ascertain or to inquire either as to the performance or
observance of any term, covenant or condition of this Agreement or any other
Loan Document, as to the financial condition of any Loan Party or as to the
existence or possible existence of any Default or Event of Default, (d) shall
not be responsible to any Lender, Issuer or Tranche B Investor for the due
execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the attachment, perfection or priority of any Lien created or
purported to be created under or in connection with, this Agreement, any other
Loan Document or any other instrument or document furnished pursuant hereto or
thereto and (e) shall incur no liability under or in respect of this
Agreement or any other Loan Document by acting upon any notice, consent,
certificate or other instrument or writing (which writing may be a telecopy or,
if consented to by the Administrative Agent, electronic mail) or any telephone
message believed by it to be genuine and signed or sent by the proper party or
parties.

 

Section 10.3                            The Agents and the Fronting Lender Individually

 

With respect to its
Ratable Portion, each Agent that is a Lender shall have and may exercise the
same rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other Lender.  The terms “Lenders”,
“Requisite Lenders” and any similar terms
shall, unless the context clearly otherwise indicates, include, without
limitation, (a) each Agent in its individual capacity as a Lender or as
one of the Requisite Lenders and (b) the Fronting Lender in its individual
capacity as a Lender or as one of

 

90

 

the Requisite Lenders.  Each Agent and its respective Affiliates may
accept deposits from, lend money to, and generally engage in any kind of banking,
trust or other business with, any Loan Party as if such Agent were not acting
as Agent or, as the case may be, the Fronting Lender.

 

Section 10.4                            Lender
Credit Decision

 

Each Lender, each Issuer
and each Tranche B Investor acknowledges that it shall, independently and
without reliance upon the Administrative Agent, the Fronting Lender or any
other Lender or Tranche B Investor conduct its own independent
investigation of the financial condition and affairs of the Borrower and each
other Loan Party in connection with the making and continuance of the Loans and
with the issuance of the Letters of Credit. 
Each Lender, each Issuer and each Tranche B Investor also
acknowledges that it shall, independently and without reliance upon the
Administrative Agent, the Fronting Lender or any other Lender 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 action under this
Agreement or other Loan Documents.

 

Section 10.5                            Indemnification

 

(a)                                  Each
Lender agrees to indemnify the Administrative Agent and each of its Affiliates,
and each of their respective directors, officers, employees, agents and
advisors (to the extent not reimbursed by the Borrower), from and against such
Lender’s aggregate Ratable Portion of any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses and
disbursements (including fees, expenses and disbursements of financial and
legal advisors) of any kind or nature whatsoever that may be imposed on,
incurred by, or asserted against, the Administrative Agent or any of its
Affiliates, directors, officers, employees, agents and advisors in any way
relating to or arising out of this Agreement or the other Loan Documents or any
action taken or omitted by the Administrative Agent under this Agreement or the
other Loan Documents; provided, however, that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Administrative Agent’s
or such Affiliate’s gross negligence or willful misconduct.  Without limiting the foregoing, each Lender
agrees to reimburse the Administrative Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including fees, expenses and
disbursements of financial and legal advisors) incurred by the Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of its rights or
responsibilities under, this Agreement or the other Loan Documents, to the
extent that the Administrative Agent is not reimbursed for such expenses by the
Borrower or any other Loan Party.

 

(b)                                 Each
Tranche B Investor agrees to indemnify the Fronting Lender and each of its
Affiliates, and each of their respective directors, officers, employees, agents
and advisors (to the extent not reimbursed by the Borrower), from and against a
portion equal to the Tranche B Ratable Portion of such Tranche B
Investor of any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements (including fees,
expenses and disbursements of financial and legal advisors) of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against, the
Fronting Lender or any of its Affiliates, directors, officers, employees,
agents and advisors in any way relating to or arising out of this Agreement or
the other Loan Documents or any action taken or omitted by the Fronting Lender
under this Agreement, the other Loan Documents; provided, however, that no

 

91

 

Tranche B
Investor shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Fronting Lender’s or such Affiliate’s gross
negligence or willful misconduct. 
Without limiting the foregoing, each Tranche B Investor agrees to
reimburse the Fronting Lender promptly upon demand for its ratable share of any
out-of-pocket expenses (including fees, expenses and disbursements of financial
and legal advisors) incurred by the Fronting Lender in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of its rights or responsibilities under, this
Agreement or the other Loan Documents, to the extent that the Fronting Lender
is not reimbursed for such expenses by the Borrower or any other Loan Party.

 

Section 10.6                            Successor
Administrative Agent

 

The Administrative Agent
may resign at any time by giving written notice thereof to the Lenders, the
Tranche B Investors and the Borrower. 
Upon any such resignation, the Requisite Lenders shall have the right to
appoint a successor Administrative Agent. 
If no successor Administrative Agent shall have been so appointed by the
Requisite Lenders, and shall have accepted such appointment, within 30 days
after the retiring Administrative Agent’s giving of notice of resignation, then
the retiring Administrative Agent may, on behalf of the Lenders and the Tranche
B Investors, appoint a successor Administrative Agent, selected from among the
Lenders and the Tranche B Investors.  In
either case, such appointment shall be subject to the prior written approval of
the Borrower (which approval may not be unreasonably withheld and shall not be
required upon the occurrence and during the continuance of an Event of
Default).  Upon the acceptance of any
appointment as Administrative Agent by a successor Administrative Agent, such
successor Administrative Agent shall succeed to, and become vested with, all
the rights, powers, privileges and duties of the retiring Administrative Agent,
and the retiring Administrative Agent shall be discharged from its duties and obligations
under this Agreement and the other Loan Documents.  Prior to any retiring Administrative Agent’s
resignation hereunder as Administrative Agent, the retiring Administrative
Agent shall take such action as may be reasonably necessary to assign to the
successor Administrative Agent its rights as Administrative Agent under the
Loan Documents.  After such resignation,
the retiring Administrative Agent shall continue to have the benefit of this Article X as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement and the
other Loan Documents.

 

Section 10.7                            Successor
Fronting Lender

 

The Fronting Lender may
at any time resign by giving written notice thereof to the Tranche B
Investors and the Borrower and obtaining the consent of each Tranche B
Investor.  Upon any such resignation, the
Tranche B Investors (acting unanimously) shall have the right to appoint a
successor Fronting Lender.  If no
successor Fronting Lender shall have been so appointed by the Tranche B
Investors, and shall have accepted such appointment, within 30 days after the
retiring Fronting Lender’s giving of notice of resignation, then the
Administrative Agent may, on behalf of the Lenders and Tranche B
Investors, appoint a successor Fronting Lender, selected from among the
Tranche B Investors.  In either
case, such appointment shall be subject to the prior written approval of all
Tranche B Investors.  Upon the
acceptance of any appointment as Fronting Lender by a successor Fronting
Lender, such successor Fronting Lender shall (a) obtain an assignment of
the rights and obligations of the Fronting Lender in respect of the
Credit-Linked Deposit Account and the Credit-Linked Deposits and (b) obtain
an assignment of

 

92

 

the Commitment of
the Fronting Lender hereunder through an Assignment and Acceptance and,
thereafter, shall succeed to, and become vested with, all the rights, powers,
privileges and duties of the retiring Fronting Lender, and the retiring
Fronting Lender shall be discharged from its duties and obligations under this
Agreement and the other Loan Documents, and in respect of the Credit-Linked
Deposit Account and the Credit-Linked Deposits. 
The occurrence and effectiveness of the events described in clauses (a) and (b) above
shall be a condition precedent to the effectiveness of any resignation of the
Fronting Lender.  After any effective
resignation, the retiring Fronting Lender shall continue to have the benefit of
this Article X as to any actions taken
or omitted to be taken by it while it was Fronting Lender under this Agreement
and the other Loan Documents, and in respect of the Credit-Linked Deposit
Account and the Credit-Linked Deposits.

 

Section 10.8                            Concerning
the Collateral and the Collateral Documents

 

(a)                                  Each
Lender, each Tranche B Investor and each Issuer agrees that any action
taken by the Administrative Agent, the Fronting Lender or the Requisite Lenders
(or, where required by the express terms of this Agreement, a greater proportion
of the Lenders or Tranche B Investors) in accordance with the provisions of
this Agreement or the other Loan Documents, and the exercise by the
Administrative Agent, the Fronting Lender or the Requisite Lenders (or, where
so required, such greater proportion) of the powers set forth herein or
therein, together with such other powers as are reasonably incidental thereto,
shall be authorized and binding upon all of the Lenders, Tranche B
Investors, Issuers and other Secured Parties. 
Without limiting the generality of the foregoing, the Administrative
Agent shall have the sole and exclusive right and authority to (i) act as
the disbursing and collecting agent for the Lenders, the Tranche B Investors
and the Issuers with respect to all payments and collections arising in
connection herewith and with the Collateral Documents, (ii) execute and
deliver each Collateral Document and accept delivery of each such agreement
delivered by the Borrower or any of its Subsidiaries, (iii) act as
collateral agent for the Lenders, the Tranche B Investors, the Issuers and the
other Secured Parties for purposes of the perfection of all security interests
and Liens created by such agreements and all other purposes stated therein, provided, however, that
the Administrative Agent hereby appoints, authorizes and directs each Lender,
each Tranche B Investor and each Issuer to act as collateral sub-agent for
the Administrative Agent, the Lenders, the Tranche B Investors and the Issuers
for purposes of the perfection of all security interests and Liens with respect
to the Borrower’s and its Subsidiaries’ respective Deposit Accounts maintained
with, and cash and Cash Equivalents held by, such Lender, such Tranche B
Investor or such Issuer, (iv) manage, supervise and otherwise deal with
the Collateral, (v) take such action as is necessary or desirable to
maintain the perfection and priority of the security interests and Liens
created or purported to be created by the Collateral Documents and (vi) except
as may be otherwise specifically restricted by the terms hereof or any other
Loan Document, exercise all remedies given to the Administrative Agent, the
Lenders, the Tranche B Investors, the Issuers and the other Secured
Parties with respect to the Collateral under the Loan Documents relating
thereto, applicable law or otherwise.

 

(b)                                 Each
of the Lenders, the Tranche B Investors and the Issuers hereby directs, in
accordance with the terms hereof, the Administrative Agent to release (or, in
the case of clause (ii) below,
release or subordinate) any Lien held by the Administrative Agent for the
benefit of the Lenders, the Tranche B Investors and the Issuers against any of
the following:

 

(i)                                     all of the Collateral, upon termination of the Commitments
and payment and satisfaction in full of all Loans, Reimbursement Obligations
and all other

 

93

 

Obligations that
the Administrative Agent has been notified in writing are then due and payable
(and, in respect of contingent Letter of Credit Obligations, with respect to
which cash collateral has been deposited or a back-up letter of credit has been
issued, in either case on terms satisfactory to the Administrative Agent and
the applicable Issuers);

 

(ii)                                  any assets that are subject to a Lien permitted by Section 8.2(d) or (f) (Liens,
Etc.); and

 

(iii)                               (A) if
such sale or disposition is permitted by this Agreement (or permitted pursuant
to a waiver or consent of a transaction otherwise prohibited by this
Agreement), any Collateral sold or disposed of by a Loan Party and/or the
Guaranty of any Subsidiary Guarantor which has been voluntarily sold or
disposed of by a Loan Party and (B) otherwise, against any Collateral with
a book value of up to $15,000,000 (in the aggregate over all such releases), if
each such release is consented to by the Administrative Agent.

 

Each of the Lenders, the
Tranche B Investors and the Issuers hereby directs the Administrative Agent to
execute and deliver or file such termination and partial release statements and
do such other things as are necessary to release Liens to be released pursuant
to this Section 10.8 promptly upon the
effectiveness of any such release.

 

Section 10.9                            Collateral
Matters Relating to Related Obligations

 

The benefit of the Loan
Documents and of the provisions of this Agreement relating to the Collateral
shall extend to and be available in respect of any Secured Obligation that is
otherwise owed to Persons other than the Administrative Agent, the Lenders, the
Tranche B Investors and the Issuers (collectively, “Related
Obligations”) solely on the condition and understanding, as among
the Administrative Agent and all Secured Parties, that (a) the Related
Obligations shall be entitled to the benefit of the Loan Documents and the
Collateral to the extent expressly set forth in this Agreement and the other
Loan Documents and to such extent the Administrative Agent shall hold, and have
the right and power to act with respect to, the Guaranty and the Collateral on
behalf of and as agent for the holders of the Related Obligations, but the
Administrative Agent is otherwise acting solely as agent for the Lenders and
the Issuers and shall have no fiduciary duty, duty of loyalty, duty of care,
duty of disclosure or other obligation whatsoever to any holder of Related Obligations,
(b) all matters, acts and omissions relating in any manner to the
Guaranty, the Collateral, or the omission, creation, perfection, priority,
abandonment or release of any Lien, shall be governed solely by the provisions
of this Agreement and the other Loan Documents and no separate Lien, right,
power or remedy shall arise or exist in favor of any Secured Party under any
separate instrument or agreement or in respect of any Related Obligation, (c) each
Secured Party shall be bound by all actions taken or omitted, in accordance
with the provisions of this Agreement and the other Loan Documents, by the
Administrative Agent and the Requisite Lenders, each of whom shall be entitled
to act at its sole discretion and exclusively in its own interest given its own
Commitments and its own interest in the Loans, Letter of Credit Obligations and
other Obligations to it arising under this Agreement or the other Loan
Documents, without any duty or liability to any other Secured Party or as to
any Related Obligation and without regard to whether any Related Obligation
remains outstanding or is deprived of the benefit of the Collateral or becomes
unsecured or is otherwise affected or put in jeopardy thereby, (d) no
holder of Related Obligations and no other Secured Party (except the
Administrative Agent, the Lenders and the Issuers, to the extent set forth in
this Agreement) shall have any right to be notified of, or to direct, require
or be heard with respect to, any action taken

 

94

 

or omitted in
respect of the Collateral or under this Agreement or the Loan Documents and (e) no
holder of any Related Obligation shall exercise any right of setoff, banker’s
lien or similar right except as expressly provided in Section 11.6
(Right of Set-off).

 

Section 10.10                     Other
Agents

 

(a)                                  Each
Lender hereby appoints Credit Suisse
as “Arranger.”  Notwithstanding anything to the contrary
contained in this Agreement, Credit
Suisse is a Lender designated as “Arranger” for
title purposes only and, in such capacity, shall not have any obligations or
duties whatsoever under this Agreement or any other Loan Document to any Loan
Party, any Lender, any Tranche B Investor or any Issuer and shall not have
any rights separate from its rights as a Lender, Fronting Lender or as an
Administrative Agent, except as expressly provided in this Agreement.  Credit
Suisse shall have, for any action or omission made in its capacity as “Arranger,” the benefit of any provision of this Agreement to
the same extent as if such action or omission was made in its capacity as
Administrative Agent.

 

(b)                                 Each
Lender and each Issuer hereby appoints United Overseas Bank as Documentation
Agent and hereby authorizes it to act in its capacity as Documentation Agent,
and each Lender and each Issuer hereby appoints BNP Paribas and LaSalle Bank
National Association as Co-Syndication Agents and hereby authorizes them to act
in their capacity as Co-Syndication Agents, on behalf of such Lender and such
Issuer in accordance with the terms of this Agreement and the other Loan
Documents.  Notwithstanding anything to
the contrary contained in this Agreement, the Documentation Agent is a Lender
designated as “Documentation Agent,” and each
Co-Syndication Agent is a Lender designated as “Co-Syndication
Agent,” for title purposes only and in such capacity shall have no
obligations, liabilities or duties whatsoever under this Agreement or any other
Loan Document to any Loan Party, any Lender or any Issuer and shall have no
rights separate from their respective rights as a Lender except as expressly
provided in this Agreement.

 

ARTICLE XI

 

Miscellaneous

 

Section 11.1                            Amendments,
Waivers, Etc.

 

(a)                                  No
amendment or waiver of any provision of this Agreement or any other Loan
Document nor consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be in writing and signed by the
Requisite Lenders (or by the Administrative Agent with the consent of the
Requisite Lenders) and, in the case of any amendment, by the Borrower, and then
any such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall, unless
in writing and signed by each Lender directly affected thereby and, except with
respect to clause  (iii),
(v) or (vi),
the Requisite Lenders (or the Administrative Agent with the consent thereof),
do any of the following:

 

(i)                                     waive any condition specified in Section 3.1
(Conditions Precedent to Effectiveness) or 3.2(b) (Conditions
Precedent to Each Loan and Letter of Credit), except with respect to
a condition based upon another provision hereof, the waiver of which requires
only the concurrence of the Requisite Lenders and, in the case

 

95

 

of
the conditions specified in Section 3.1
(Conditions Precedent to Effectiveness), subject to the provisions
of Section 3.3 (Determinations of Initial
Borrowing Conditions);

 

(ii)                                  increase the Commitment of such Lender;

 

(iii)                               extend
the scheduled final maturity of any Loan owing to such Lender, or waive, reduce
or postpone any scheduled date fixed for the payment or reduction of principal
of any such Loan (it being understood that Section 2.9
(Mandatory Prepayments) does not provide for scheduled dates fixed
for payment) or for the reduction of such Lender’s Commitment;

 

(iv)                              reduce the principal amount of any Loan or Reimbursement
Obligation owing to such Lender (other than by the payment or prepayment thereof);

 

(v)                                 reduce
the rate of interest on any Loan or Reimbursement Obligations outstanding to
such Lender or any fee payable hereunder to such Lender (including, if such
Lender is the Fronting Lender, any fee ultimately payable to any Tranche B
Investor);

 

(vi)                              postpone
any scheduled date fixed for payment of such interest or fees owing to such
Lender (including, if such Lender is the Fronting Lender, any fee ultimately
payable to any Tranche B Investor);

 

(vii)                           change the aggregate Ratable Portions of Lenders required
for any or all Lenders to take any action hereunder;

 

(viii)                        release
all or substantially all of the Collateral except as provided in Section 10.8(b) (Concerning the Collateral and the Collateral
Documents) or release the Borrower from its payment obligation to
such Lender under this Agreement or the Notes owing to such Lender (if any) or
release any Guarantor from its obligations under the Guaranty except in
connection with sale or other disposition of a Subsidiary Guarantor (or all or
substantially all of the assets thereof) permitted by this Agreement (or
permitted pursuant to a waiver or consent of a transaction otherwise prohibited
by this Agreement); or

 

(ix)                                amend  Section 10.8(b) (Concerning
the Collateral and the Collateral Documents), this Section 11.1 or either definition of the terms “Requisite Lenders” or “Ratable Portion”;

 

and provided, further, that
(u) no amendment shall be made to this clause (u)
without the prior written consent of each Lender, (v) no
amendment, waiver or consent shall, unless in writing and signed by any Special
Purpose Vehicle that has been granted an option pursuant to Section 11.2(f) (Assignments and Participations)
affect the grant or nature of such option or the right or duties of such
Special Purpose Vehicle hereunder, (w) no amendment, waiver or consent
shall, unless in writing and signed by the Administrative Agent in addition to
the Lenders required above to take such action, affect the rights or duties of
the Administrative Agent under this Agreement or the other Loan Documents,
(x) no amendment, waiver or consent shall, unless in writing and signed by
the Fronting Lender in addition to the Lenders required above to take such
action, affect the rights or duties of the Fronting Lender under this Agreement
or the other Loan Documents, (y) no amendment, waiver or consent shall,
unless in writing and signed by such Issuer, affect the rights or duties of any
Issuer under this Agreement or the other Loan Documents and (z) for
purposes of

 

96

 

this clause (a), the Fronting Lender may, by notice to the
Administrative Agent (which notice shall then be deemed irrevocable and binding
for all purposes under any Loan Document), limit any of its requests,
amendments, waivers, consents or agreements under the Tranche B Facility
to a dollar amount lesser than its Commitment (and corresponding to the
aggregate amount of the Credit-Linked Deposits of Tranche B Investors
having notified the Fronting Lender thereunder of their agreement with such
request, amendment, waiver, consent or agreement) and such request, amendment,
waiver, consent or agreement shall then be considered to be the request,
amendment, waiver, consent or agreement of a Lender with a Commitment equal to
such amount.

 

(b)                                 The
Administrative Agent may, but shall have no obligation to, with the written
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of such Lender.  Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. 
No notice to or demand on the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar or other circumstances.

 

(c)                                  If,
in connection with any proposed amendment, modification, waiver or termination
(a “Proposed Change”) requiring the consent
of all affected Lenders and Tranche B Investors, the consent of Requisite
Lenders is obtained but the consent of other Lenders or Tranche B Investors
whose consent is required is not obtained (any such Lender or Tranche B
Investor whose consent is not obtained as described in this Section 11.1 being referred to as a “Non-Consenting Lender”), then, so long as the Administrative
Agent has given such consent, at the Borrower’s request, the Administrative
Agent or an Eligible Assignee acceptable to the Administrative Agent shall have
the right with the Administrative Agent’s consent and in the Administrative
Agent’s sole discretion (but shall have no obligation) to purchase from such
Non-Consenting Lender, and such Non-Consenting Lender agrees that it shall,
upon the Administrative Agent’s request, sell and assign to the Lender acting
as the Administrative Agent or such Eligible Assignee, all of the Commitments
and Outstandings of such Non-Consenting Lender (or, in the case of a
Tranche B Investor, the Credit-Linked Deposit) for an amount equal to the
principal balance of all Loans held by the Non-Consenting Lender or amounts on
deposit in the Sub-Account of such Non-Consenting Lender, as the case may be,
and all accrued interest and fees with respect thereto (including, if such
Lender is the Fronting Lender, any fee ultimately payable to any Tranche B
Investor) through the date of sale, such purchase and sale to be consummated
pursuant to an Assignment and Acceptance; provided, however, that the failure to execute such Assignment and
Acceptance by the Non-Consenting Lender shall not invalidate such assignment,
and such Assignment and Acceptance shall be deemed to be executed upon receipt
by such Non-Consenting Lender of the proceeds of such sale and acceptance.  For purposes of this clause (c),
if the Fronting Lender has limited its consent to any Proposed Change to any
amount lower than its Commitment under the Tranche B Facilities to comply
with the instructions of the Tranche B Investors in accordance with clause (a) above then the Fronting Lender shall be
a “Non-Consenting Lender” only to the
extent of the excess of its Commitment hereunder over such amount, and only
such excess Commitment (and the portion of the Fronting Lender’s Outstandings
corresponding to such excess Commitment) shall be sold and assigned to the
Lender acting as Administrative Agent or such Eligible Assignee as provided in
this clause (c).

 

Section 11.2                            Assignments
and Participations

 

(a)                                  Each
Lender and Tranche B Investor (other than the Fronting Lender) may sell,
transfer, negotiate or assign to one or more Eligible Assignees all or a
portion of its

 

97

 

rights
and obligations hereunder (including all of its rights and obligations with
respect to the Revolving Loans, the Swing Loans, the Letters of Credit and the
Credit-Linked Deposits); provided, however, that (i) any such assignment shall cover the
same percentage of such assignor’s Outstandings and Commitment (or
Tranche B Deposit Amount, as applicable), (ii) the aggregate amount
being assigned pursuant to each such assignment (determined as of the date of
the Assignment and Acceptance with respect to such assignment) shall (if less
than the assignor’s entire interest) be an integral multiple of $1,000,000
unless such assignment is made with the consent of the Borrower and the
Administrative Agent or is made to a Lender (or a Tranche B Investor) or
an Affiliate or an Approved Fund of a Lender (or a Tranche B Investor) and
(iii) if such assignment is of any Tranche A Loan prior to the
Revolving Credit Termination Date, unless such Eligible Assignee is a Lender or
an Affiliate or Approved Fund of a Lender, such assignment shall be subject to
the prior consent of each Issuer, the Administrative Agent and the Borrower
(which consent shall, in each case, not be unreasonably withheld or delayed);
and provided, further,
that, notwithstanding any other provision of this Section 11.2,
the consent of the Borrower shall not be required for any assignment occurring
(x) on or prior to the Syndication Completion Date or (y) when any Default or
an Event of Default shall have occurred and be continuing.  The Fronting Lender may sell, transfer,
negotiate or assign to (A) one successor Fronting Lender pursuant to Section 10.7 (Successor Fronting Lender)) or (B) one or more Tranche B Investors that are
Eligible Assignees, all or a portion of its rights and obligations hereunder
(including all of its rights and obligations with respect to the Revolving
Loans, the Swing Loans and the Letters of Credit); provided, however, that (x) if any such assignment shall be of
the Fronting Lender’s Outstandings and Commitment, such assignment shall cover
the same percentage of such Lender’s Outstandings and Commitment and
(y) the aggregate amount being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance with respect to
such assignment) shall (if less than the Assignor’s entire interest) be an
integral multiple of $1,000,000 unless such assignment is made with the consent
of the Borrower and the Administrative Agent.

 

(b)                                 The
parties to each assignment shall (i) electronically execute and deliver to
the Administrative Agent, for its acceptance and recording, an Assignment and
Acceptance, via an electronic settlement system acceptable to the
Administrative Agent (which shall initially be ClearPar, LLC) or (ii) manually
execute and deliver to the Administrative Agent an Assignment and Acceptance,
together with a processing and recordation fee of $3,500 (unless such fee is
waived at the discretion of the Administrative Agent), subject in any case to
such assignment and any form that the assignee under such Assignment and
Acceptance may be required to deliver under Section 2.16 (Taxes).  Upon such execution, delivery, acceptance and
recording, (i) the assignee thereunder shall become a party hereto and, to
the extent that rights and obligations under the Loan Documents have been
assigned to such assignee pursuant to such Assignment and Acceptance, have the
rights and obligations of the applicable assignor, and if such assignor were an
Issuer, of such Issuer hereunder and thereunder, and (ii) the assignor
thereunder shall, to the extent that rights and obligations under this
Agreement have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights (except for those surviving the payment in full of the
Obligations) and be released from its obligations under the Loan Documents,
other than those relating to events or circumstances occurring prior to such
assignment (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assignor’s rights and obligations under the Loan
Documents, such assignor shall cease to be a party hereto; provided,
however, that, if the Fronting Lender
also holds separate Commitments or Outstandings hereunder not in its capacity
as Fronting Lender, assigning all of such separate Commitments or Outstandings
or all of its Commitments and Outstandings as a Fronting Lender (but not both)
shall not cause such the Fronting Lender to cease to be a party hereto.

 

98

 

(c)                                  The
Administrative Agent shall maintain at its address referred to in Section 11.8 (Notices, Etc.) a copy of each Assignment
and Acceptance delivered to and accepted by it and a register for the recording
of the names and addresses of the Lenders, the Tranche B Investors, the
Commitments and the Tranche B Deposit Amounts, and the principal amount of
the Loans and Letter of Credit Obligations owing to each Lender from time to
time (the “Register”).  Any assignment pursuant to this Section 11.2 shall not be effective until such
assignment is recorded in the Register. 
The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Loan Parties, the Administrative
Agent, the Lenders and the Tranche B Investors may treat each Person whose
name is recorded in the Register as a Lender or a Tranche B Investor, as
applicable, for all purposes of this Agreement. 
The Register shall be available for inspection by the Borrower, the
Administrative Agent, any Lender or any Tranche B Investor at any
reasonable time and from time to time upon reasonable prior notice.

 

(d)                                 Notwithstanding
anything to the contrary contained in clause (c) above,
the Loans (including the Notes evidencing such Loans) are registered
obligations and the right, title, and interest of the Lenders and their
assignees in and to such Loans shall be transferable only upon notation of such
transfer in the Register.  A Note shall
only evidence the Lender’s or an assignee’s right title and interest in and to
the related Loan, and in no event is any such Note to be considered a bearer
instrument or obligation.  This Section 11.2 shall be construed so that the Loans are
at all times maintained in “registered form”
within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of
the Internal Revenue Code and any related regulations (or any successor
provisions of the Internal Revenue Code or such regulations).  Solely for purposes of this and for tax purposes only, the Administrative Agent shall
act as the Borrower’s agent for purposes of maintaining such notations of
transfer in the Register.

 

(e)                                  Upon
its receipt of an Assignment and Acceptance executed by an assignor and an
assignee, the Administrative Agent shall, if such Assignment and Acceptance has
been completed, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt
notice thereof to the Borrower.  Within
five Business Days after its receipt of such notice, the Borrower, at its own
expense, shall, if requested by such assignee, execute and deliver to the
Administrative Agent new Notes to the order of such assignee in an amount equal
to the Commitments and Loans assumed by it pursuant to such Assignment and
Acceptance and, if an assigning Lender has surrendered any Note for exchange in
connection with the assignment and has retained Commitments or Loans hereunder,
new Notes to the order of such assigning Lender in an amount equal to the
Commitments and Loans retained by it hereunder. 
Such new Notes shall be dated the same date as the surrendered Notes and
be in substantially the form of Exhibit B (Form of
Promissory Note), as applicable.

 

(f)                                    In
addition to the other assignment rights provided in this Section 11.2,
each Lender (other than the Fronting Lender) may (i) grant to a Special
Purpose Vehicle the option to make all or any part of any Loan that such Lender
would otherwise be required to make hereunder and the exercise of such option
by any such Special Purpose Vehicle and the making of Loans pursuant thereto
shall satisfy (once and to the extent that such Loans are made) the obligation
of such Lender to make such Loans thereunder, provided, however, that nothing herein shall constitute a commitment
or an offer to commit by such a Special Purpose Vehicle to make Loans hereunder
and no such Special Purpose Vehicle shall be liable for any indemnity or other
Obligation (other than the making of Loans for which such Special Purpose
Vehicle shall have exercised an option, and then only in accordance with the
relevant option agreement), and (ii) assign, as collateral or otherwise,
any of its rights under this Agreement, whether now owned or hereafter acquired
(including rights to payments of principal or interest on the Loans) to

 

99

 

(x) any
Federal Reserve Bank pursuant to Regulation A of the Federal Reserve Board
without notice to or consent of the Borrower or the Administrative Agent,
(y) any trustee for the benefit of the holders of such Lender’s Securities
and (z) to any Special Purpose Vehicle to which such Lender has granted an
option pursuant to clause (i) above;
and provided, further,
that no such assignment or grant shall release such Lender from any of its
obligations hereunder except as expressly provided in clause (i) above.  The parties hereto acknowledge and agree
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other senior debt of any such Special
Purpose Vehicle, it will not institute against, or join any other Person in
instituting against, any Special Purpose Vehicle that has been granted an
option pursuant to this clause (f) any
bankruptcy, reorganization, insolvency or liquidation proceeding (such
agreement shall survive the payment in full of the Obligations).

 

(g)                                 Each
Lender (other than the Fronting Lender) and each Tranche B Investor may
sell participations to one or more Persons in or to all or a portion of its
rights and obligations under the Loan Documents (including all its rights and
obligations with respect to the Revolving Loans, Letters of Credit and the
Credit-Linked Deposits).  The terms of
such participation shall not, in any event, require the participant’s consent
to any amendments, waivers or other modifications of any provision of any Loan
Documents, the consent to any departure by any Loan Party therefrom, or to the
exercising or refraining from exercising any powers or rights such Lender or
Tranche B Investor may have under or in respect of the Loan Documents
(including the right to enforce the obligations of the Loan Parties), except if
any such amendment, waiver or other modification or consent would (i) reduce
the amount, or postpone any date fixed for, any amount (whether of principal,
interest or fees) payable to such participant under the Loan Documents, to
which such participant would otherwise be entitled under such participation or (ii) result
in the release of all or substantially all of the Collateral other than in
accordance with Section 10.8(b) (Concerning the
Collateral and the Collateral Documents).  In the event of the sale of any participation
by any such Lender or Tranche B Investor, (w) such Lender’s
obligations under the Loan Documents shall remain unchanged, (x) such
Lender or Tranche B Investor shall remain solely responsible to the other
parties for the performance of such obligations, (y) such Lender or
Tranche B Investor shall remain the holder of such Obligations for all
purposes of this Agreement and (z) the Borrower, the Administrative Agent
and the other Lenders and Tranche B Investors shall continue to deal
solely and directly with such Lender or Tranche B Investor in connection
with such Lender’s or Tranche B Investor’s rights and obligations under
this Agreement.  Each participant shall
be entitled to the benefits of Sections 2.14(d) (Illegality),
2.15 (Capital Adequacy) and 2.16 (Taxes) as if it were a Lender or Tranche B
Investor; provided, however,
that anything herein to the contrary notwithstanding, the Borrower shall not, at
any time, be obligated to make under Section 2.14(d) (Illegality), 2.15
(Capital Adequacy) or 2.16  (Taxes) to the participants in the rights and obligations of
any Lender or Tranche B Investor (together with such Lender or
Tranche B Investor) any payment in excess of the amount the Borrower would
have been obligated to pay to such Lender or Tranche B Investor in respect
of such interest had such participation not been sold.  In the event that any Lender or Tranche B
Investor sells participations in accordance with this Section 11.2(g),
such Lender or Tranche B Investor shall maintain a register on which it
enters the name of all participants in its rights and obligations under the
Loan Documents (the “Participant Register”).  Any participation of such Lender’s or
Tranche B Investor’s rights and obligations under the Loan Documents may
be effected only by the registration of such participation on the Participant
Register.

 

(h)                                 Any
Issuer may at any time assign its rights and obligations hereunder to any other
Lender (other than the Fronting Lender) by an instrument in form and substance
satisfactory to the Borrower, the Administrative Agent, such Issuer and such
Lender.  If any

 

100

 

Issuer
ceases to be a Lender hereunder by virtue of any assignment made pursuant to
this Section 11.2, then, as of the
effective date of such cessation, such Issuer’s obligations to Issue Letters of
Credit pursuant to Section 2.4
(Letters of Credit) shall terminate and
such Issuer shall be an Issuer hereunder only with respect to outstanding
Letters of Credit issued prior to such date.

 

Section 11.3                            Costs
and Expenses

 

(a)                                  The
Borrower agrees upon demand to pay, or reimburse each of the Agents and
Fronting Lender for, all of the Administrative Agent’s and the Fronting Lender’s
reasonable internal and external audit, appraisal, valuation, filing, document
duplication and reproduction and investigation expenses and all of the Agents’
reasonable legal expenses and for all other reasonable out-of-pocket costs and
expenses of every type and nature (including, without limitation, the
reasonable fees, expenses and disbursements of the Administrative Agent’s and
the Fronting Lender’s counsel, Cravath, Swaine & Moore LLP, local
legal counsel, auditors, accountants, appraisers, printers, insurance and
environmental advisors, and other consultants and agents) incurred by any Agent
or the Fronting Lender in connection with any of the following: (i) the
Administrative Agent’s or the Fronting Lender’s audit and investigation of the
Borrower and its Subsidiaries in connection with the preparation, negotiation
or execution of any Loan Document or the Administrative Agent’s or Fronting
Lender’s periodic audits of the Borrower or any of its Subsidiaries (which
shall be limited to one audit during any twelve-month period unless an Event of
Default has occurred and is continuing), as the case may be, (ii) the
preparation, negotiation, execution or interpretation of this Agreement
(including, without limitation, the satisfaction or attempted satisfaction of
any condition set forth in Article III
(Conditions To Loans And Letters Of Credit), any Loan Document or
any proposal letter or commitment letter issued in connection therewith, or the
making of the Loans hereunder, (iii) the creation, perfection or
protection of the Liens under any Loan Document (including any reasonable fees,
disbursements and expenses for local counsel in various jurisdictions), (iv) the
ongoing administration of this Agreement and the Loans and Letters of Credit,
including consultation with attorneys in connection therewith and with respect
to the Administrative Agent’s and the Fronting Lender’s rights and
responsibilities hereunder and under the other Loan Documents, (v) the
protection, collection or enforcement of any Obligation or the enforcement of
any Loan Document, (vi) the commencement, defense or intervention in any
court proceeding relating in any way to the Obligations, any Loan Party, any of
the Borrower’s Subsidiaries, this Agreement or any other Loan Document, (vii) the
response to, and preparation for, any subpoena or request for document
production with which any Agent or the Fronting Lender is served or deposition
or other proceeding in which any Agent or the Fronting Lender is called to
testify, in each case, relating in any way to the Obligations, any Loan Party,
any of the Borrower’s Subsidiaries, this Agreement or any other Loan Document
or (viii) any amendment, consent, waiver, assignment, restatement, or
supplement to any Loan Document or the preparation, negotiation, and execution
of the same.

 

(b)                                 The
Borrower further agrees to pay or reimburse each Agent and each of the Lenders,
Tranche B Investors and Issuers upon demand (which, in the case of the
Tranche B Investors, shall be made through the Fronting Lender) for all
reasonable out-of-pocket costs and expenses, including, without limitation,
reasonable attorneys’ fees (including allocated costs of internal counsel and
costs of settlement), incurred by such Agent, such Lenders, Tranche B
Investors or Issuers in connection with any of the following: (i) in
enforcing any Loan Document or any security therefor or exercising or enforcing
any other right or remedy available by reason of an Event of Default, (ii) in
connection with any refinancing or restructuring of the credit arrangements
provided hereunder in the nature of a “work-out” or in
any insolvency or bankruptcy proceeding, (iii) in commencing, defending or
intervening in any litigation or in filing

 

101

 

a
petition, complaint, answer, motion or other pleadings in any legal proceeding
relating to the Obligations, any Loan Party, any of the Borrower’s Subsidiaries
and related to or arising out of the transactions contemplated hereby or by any
other Loan Document or (iv) in taking any other action in or with respect
to any suit or proceeding (bankruptcy or otherwise) described in clause (i), (ii) or (iii) above.

 

Section 11.4                            Indemnities

 

(a)                                  The
Borrower agrees to indemnify and hold harmless each Agent, each Lender, each
Tranche B Investor and each Issuer and each of their respective
Affiliates, and each of the directors, officers, employees, agents,
representative, attorneys, consultants and advisors of or to any of the foregoing
(including those retained in connection with the satisfaction or attempted
satisfaction of any condition set forth in Article III
(Conditions To Loans And Letters Of Credit)) (each such Person being
an “Indemnitee”) from and against any and
all claims, damages, liabilities, obligations, losses, penalties, actions,
judgments, suits, costs, disbursements and expenses of any kind or nature
(including reasonable fees, disbursements and expenses of financial and legal
advisors to any such Indemnitee) that may be imposed on, incurred by or
asserted against any such Indemnitee in connection with or arising out of any
investigation, litigation or proceeding, whether or not any such Indemnitee is
a party thereto, whether direct, indirect, or consequential and whether based
on any federal, state or local law or other statutory regulation, securities or
commercial law or regulation, or under common law or in equity, or on contract,
tort or otherwise, in any manner relating to or arising out of this Agreement, any
other Loan Document, any Obligation, any Letter of Credit or any act, event or
transaction related or attendant to any thereof, or the use or intended use of
the proceeds of the Loans or Letters of Credit or in connection with any
investigation of any potential matter covered hereby (collectively, the “Indemnified Matters”); provided, however, that the Borrower shall not have any obligation
under this Section 11.4 to an Indemnitee with
respect to any Indemnified Matter caused by or resulting from the gross
negligence or willful misconduct of that Indemnitee, as determined by a court
of competent jurisdiction in a final non-appealable judgment or order.  Without limiting the foregoing, “Indemnified Matters” include (i) all Environmental
Liabilities and Costs arising from or connected with the past, present or
future operations of the Borrower or any of its Subsidiaries involving any
property subject to a Collateral Document, or damage to real or personal
property or natural resources or harm or injury alleged to have resulted from
any Release of Contaminants on, upon or into such property or any contiguous
real estate, (ii) any costs or liabilities incurred in connection with any
Remedial Action concerning any Borrower or any of its Subsidiaries, (iii) any
costs or liabilities incurred in connection with any Environmental Lien and (iv) any
costs or liabilities incurred in connection with any other matter under any
Environmental Law, including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, (49 U.S.C. § 9601 et seq.) and applicable state property transfer laws,
whether, with respect to any such matter, such Indemnitee is a mortgagee
pursuant to any leasehold mortgage, a mortgagee in possession, the successor in
interest to the Borrower or any of its Subsidiaries, or the owner, lessee or
operator of any property of the Borrower or any of its Subsidiaries by virtue
of foreclosure, except, with respect to those matters referred to in clauses (i), (ii), (iii) and (iv) above,
to the extent (x) incurred following foreclosure by the Administrative
Agent, any Lender, any Tranche B Investor or any Issuer, or the
Administrative Agent, any Lender, any Tranche B Investor or any Issuer
having become the successor in interest to the Borrower or any of its
Subsidiaries and (y) attributable solely to acts of the Administrative
Agent, such Lender, such Tranche B Investor or such Issuer or any agent on
behalf of the Administrative Agent, such Lender, such Tranche B Investor
or such Issuer.

 

102

 

(b)                                 The
Borrower shall indemnify each Agent, each Lender, each Tranche B Investor
and each Issuer for, and hold each Agent, each Lender, each Tranche B
Investor and each Issuer harmless from and against, any and all claims for
brokerage commissions, fees and other compensation made against any Agent, any
Lender, any Tranche B Investor and any Issuer for any broker, finder or
consultant with respect to any agreement, arrangement or understanding made by
or on behalf of any Loan Party or any of its Subsidiaries in connection with
the transactions contemplated by this Agreement.

 

(c)                                  The
Borrower, at the request of any Indemnitee, shall have the obligation to defend
against such investigation, litigation or proceeding or requested Remedial
Action and the Borrower, in any event, may participate in the defense thereof
with legal counsel of the Borrower’s choice. 
If such Indemnitee requests the Borrower to defend against such
investigation, litigation or proceeding or requested Remedial Action, the
Borrower shall promptly do so and such Indemnitee shall have the right to have
legal counsel of its choice participate in such defense.  No action taken by legal counsel chosen by
such Indemnitee in defending against any such investigation, litigation or
proceeding or requested Remedial Action, shall vitiate
or in any way impair the Borrower’s obligation and duty hereunder to indemnify
and hold harmless such Indemnitee.

 

(d)                                 The
Borrower agrees that any indemnification or other protection provided to any
Indemnitee pursuant to this Agreement (including pursuant to this Section 11.4) or any other Loan Document shall (i) survive
payment in full of the Obligations and (ii) inure to the benefit of any
Person that was at any time an Indemnitee under this Agreement, any other Loan
Document.

 

Section 11.5                            Limitation
of Liability

 

The Borrower agrees that
no Indemnitee shall have any liability (whether direct or indirect, in
contract, tort or otherwise) to any Loan Party or any of their respective
Subsidiaries or any of their respective equity holders or creditors for or in
connection with the transactions contemplated hereby and in the other Loan
Documents, except for direct damages (as opposed to special, indirect,
consequential or punitive damages (including, without limitation, any loss of
profits, business or anticipated savings)) determined in a final non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnitee’s gross negligence or willful misconduct.  The Borrower hereby waives,
releases and agrees (for itself and on behalf of its Subsidiaries) not to sue
upon any such claim for any special, indirect, consequential or punitive
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.

 

Section 11.6                            Right
of Set-off

 

Upon the occurrence and
during the continuance of any Event of Default each Lender, each Tranche B
Investor and each Affiliate of either of them is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
or such Tranche B Investor or any of their respective Affiliates to or for
the credit or the account of the Borrower against any and all of the
Obligations now or hereafter existing whether or not such Lender or such
Tranche B Investor shall have made any demand under this Agreement or any
other Loan Document and even though such Obligations may be unmatured.  Each Lender and each Tranche B Investor
agrees promptly

 

103

 

to notify the Borrower after any such
set-off and application made by such Lender or such Tranche B Investor or
their respective Affiliates; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application.  The rights of each Lender and each Tranche B
Investor under this Section 11.6
are in addition to the other rights and remedies (including other rights of
set-off) that such Lender or such Tranche B Investor may have.

 

Section 11.7                            Sharing
of Payments, Etc.

 

(a)                                  (i)                                     If
any Tranche B Investor obtains any payment (whether voluntary,
involuntary, through the exercise of any right of set-off or otherwise) owing
to it or the Fronting Lender, any interest thereon, fees in respect thereof or
amounts due pursuant to Section 11.3 (Costs
and Expenses) or 11.4 (Indemnities)
(other than payments pursuant to Section 2.14 (Special
Provisions Governing Eurodollar Rate Loans), 2.15
(Capital Adequacy) or 2.16  (Taxes)) in
excess of its ratable portion (the ratio of the aggregate amount of its
Credit-Linked Deposits to the aggregate Commitments hereunder) of all payments
of such Obligations obtained by all the Lenders, except as the result of a
refinancing of the Tranche B Facility, such Tranche B Investor (a “Purchasing Investor”) shall forthwith purchase from the
other Lenders (other than the Fronting Lender) and the other Tranche B
Investors (each, a “Selling Investor”)
such participations in their Loans or other Obligations or interest in the
Credit-Linked Deposits as shall be necessary to cause such Purchasing Investor
to share the excess payment ratably with each of them.

 

(ii)                                  If
any Lender obtains any payment (whether voluntary, involuntary, through the
exercise of any right of set-off or otherwise) of the Loans owing to it, any
interest thereon, fees in respect thereof (including, if such Lender is the
Fronting Lender, any fee ultimately payable to any Tranche B Investor) or
amounts due pursuant to Section 11.3 (Costs
and Expenses) or 11.4 (Indemnities)
(other than payments pursuant to Section 2.14 (Special
Provisions Governing Eurodollar Rate Loans), 2.15
(Capital Adequacy) or 2.16  (Taxes)) in
excess of its Ratable Portion of all payments of such Obligations obtained by
all the Lenders, except as the result of a refinancing of the applicable
Facility, such Lender (together with a Purchasing Investor, a “Purchasing Lender”) shall forthwith purchase from the other
Lenders (each, together with the Selling Investors, a “Selling
Lender”) such participations in their Loans or other Obligations as
shall be necessary to cause such Purchasing Lender to share the excess payment
ratably with each of them.

 

(b)                                 If
all or any portion of any payment received by a Purchasing Lender is thereafter
recovered from such Purchasing Lender, such purchase from each Selling Lender
shall be rescinded and such Selling Lender shall repay to the Purchasing Lender
the purchase price to the extent of such recovery together with an amount equal
to such Selling Lender’s ratable share (according to the proportion of (i) the
amount of such Selling Lender’s required repayment in relation to (ii) the
total amount so recovered from the Purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of the total amount
so recovered.

 

(c)                                  The
Borrower agrees that any Purchasing Lender so purchasing a participation from a
Selling Lender pursuant to this Section 11.7 may,
to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Purchasing Lender were the direct creditor of the Borrower in the
amount of such participation.

 

104

 

Section 11.8                            Notices,
Etc.

 

All notices, demands,
requests and other communications provided for in this Agreement (x) if
made by any Tranche B Investor, shall be made through the Fronting Lender
or, if expressly provided hereunder, through the Administrative Agent and
(y) in any case, shall be given in writing, or, if consented to by the
Administrative Agent, by any telecommunication device capable of creating a
written record (including electronic mail), and addressed to the party to be
notified as follows:

 

(a)                                  if to the Borrower:

 

                                                Washington Group
International, Inc.

720 Park Boulevard

Boise, ID 838712

Attention: Earl Ward

Telecopy no: (208) 386-5922

E-Mail Addresses: earl.ward@wgint.com

 

                                                with a copy to:

 

                                                Washington Group
International, Inc.

720 Park Boulevard

Boise, ID 838712

Attention: Richard D. Parry, Esq.

Telecopy no:  (208) 386-5220

E-Mail Address:  richard.parry@wgint.com

 

                                                with a copy to:

 

                                                Jones Day 

77 West Wacker Drive

Chicago, IL 60601

Attention:  Robert J. Graves, Esq.

Telecopy no:                          (312) 782-3939

E-Mail Address:  rjgraves@jonesday.com

 

(b)                                 if to any Lender, at its Domestic Lending Office;

 

(c)                                  if
to any Issuer, (i) at its Domestic Lending Office, if such Issuer is a
Lender or (ii) otherwise, at the Domestic Lending Office of any Lender
Affiliated therewith or, in each case at any other address set forth in a
notice sent to the Administrative Agent and the Borrower;

 

(d)                                 if to the Fronting Lender, at its
Domestic Lending Office; and

 

105

 

(d)                                 if to the Administrative Agent:

 

                                                Credit Suisse

Eleven Madison Avenue

New York, NY  10010

Attention:  Thomas
Lynch / Agency Group

Telecopy no:                          (212) 325-8304

E-Mail Address: thomas.lynch@csfb.com

 

or at such other address
as shall be notified in writing (x) in the case of the Borrower and the
Administrative Agent, to the other parties and (y) in the case of all
other parties, to the Borrower and the Administrative Agent.  All such notices and communications shall be
effective upon personal delivery (if delivered by hand, including any overnight
courier service), when deposited in the mails (if sent by mail), or when
properly transmitted (if sent by a telecommunications device or through the
Internet); provided, however,
that notices and communications to the Administrative Agent pursuant to Article II (The Facilities) or X (The
Administrative Agent, The Fronting Lender and Other Agents) shall
not be effective until received by the Administrative Agent (unless otherwise
expressly provided hereunder).

 

Section 11.9                            No
Waiver; Remedies

 

No failure on the part of
any Lender, any Tranche B Investor, any Issuer or the Administrative Agent
to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise
of any other right.  The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.

 

Section 11.10                     Amendment and Restatement; Binding Effect

 

(a)                                  This
Agreement shall become effective as provided in the Amendment Agreement.

 

(b)                                 On
the Effective Date, the Existing Credit Agreement shall be amended and restated
in its entirety by this Agreement and the Existing Credit Agreement shall
thereafter be of no further force and effect except to evidence (i) the
incurrence by the Borrower of the “Obligations”
under and as defined in the Existing Credit Agreement (whether or not such “Obligations” are contingent as of the Effective Date), (ii) the
representations and warranties made by the Borrower prior to the Effective Date
and (iii) any action or omission performed or required to be performed
pursuant to such Existing Credit Agreement prior to the Effective Date
(including any failure, prior to the Effective Date, to comply with the
covenants contained in such Existing Credit Agreement or Collateral Agency
Agreement).  This Agreement is not in any
way intended to constitute a novation of the obligations and liabilities
existing under the Existing Credit Agreement or evidence payment of all or any
portion of such obligations and liabilities.

 

(c)                                  The
terms and conditions of this Agreement and the Agents’, the Lenders’ and the
Issuers’ rights and remedies under this Agreement and the other Loan Documents
shall apply to all of the Obligations incurred under the Existing Credit
Agreement and the Notes issued thereunder.

 

(d)                                 The
Borrower reaffirms the Liens granted pursuant to the Loan Documents to the
Administrative Agent for the benefit of the Lenders and the Issuers, which

 

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Liens
shall continue in full force and effect during the term of this Agreement and
any renewals thereof and shall continue to secure the Obligations.

 

(e)                                  On
and after the Effective Date, (i) all references to the Existing Credit
Agreement (or to any amendment, supplement, modification or amendment and restatement
thereof) in the Loan Documents (other than this Agreement) shall be deemed to
refer to the Existing Credit Agreement, as amended and restated hereby, (ii) all
references to any section (or subsection) of the Existing Credit Agreement
in any Loan Document (but not herein) shall be amended to become, mutatis mutandis, references to the corresponding provisions
of this Agreement and (iii) except as the context otherwise provides, on
or after the Effective Date, all references to this Agreement herein (including
for purposes of indemnification and reimbursement of fees) shall be deemed to
be reference to the Existing Credit Agreement as amended and restated hereby.

 

(f)                                    This
amendment and restatement is limited as written and is not a consent to any other
amendment, restatement or waiver, or other modification, whether or not similar
and, except as expressly provided herein or in any other Loan Document, all
terms and conditions of the Loan Documents remain in full force and effect
unless otherwise specifically amended hereby or any other Loan Document.

 

Section 11.11                     Governing
Law

 

This Agreement and the
rights and obligations of the parties hereto shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.

 

Section 11.12                     Submission
to Jurisdiction; Service of Process

 

(a)                                  Any
legal action or proceeding with respect to this Agreement or any other Loan
Document may be brought, prior to the Effective Date, in the Bankruptcy Court
and, at any time, in the courts of the State of New York or of the United
States of America for the Southern District of New York, and, by execution and
delivery of this Agreement, the Borrower hereby accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts.  The parties hereto
hereby irrevocably waive any objection, including any objection to the laying
of venue or based on the grounds of forum  non  conveniens,
that any of them may now or hereafter have to the bringing of any such
action or proceeding in such respective jurisdictions.

 

(b)                                 The
Borrower hereby irrevocably designates, appoints and empowers The Corporation
Service Company, 80 State Street, Albany, NY 12207 (telephone no: (800) 833-9848)
(telecopy no: (518) 433-4741) (the “Process Agent”),
in the case of any suit, action or proceeding brought in the United States of
America as its designee, appointee and agent to receive, accept and acknowledge
for and on its behalf, and in respect of its property, service of any and all
legal process, summons, notices and documents that may be served in any action
or proceeding arising out of or in connection with this Agreement or any Loan
Document.  Such service may be made by
mailing (by registered or certified mail, postage prepaid) or delivering a copy
of such process to the Borrower in care of the Process Agent at the Process
Agent’s above address, and the Borrower hereby irrevocably authorizes and
directs the Process Agent to accept such service on its behalf.  As an alternative method of service, the
Borrower irrevocably consents to the service of any and all process in any such
action or proceeding by the mailing (by registered or certified mail, postage
prepaid) of copies of such process to the Process Agent or the

 

107

 

Borrower
at its address specified in Section 11.8
(Notices, Etc.).  The Borrower agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.

 

(c)                                  Nothing
contained in this Section 11.12 shall affect
the right of the Administrative Agent, any Lender or any Tranche B
Investor to serve process in any other manner permitted by law or commence
legal proceedings or otherwise proceed against the Borrower or any other Loan
Party in any other jurisdiction.

 

(d)                                 If
for the purposes of obtaining judgment in any court it is necessary to convert
a sum due hereunder in Dollars 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 Administrative Agent could purchase Dollars with such other
currency at the spot rate of exchange quoted by the Administrative Agent at
11:00 a.m. (New York time) on the Business Day preceding that on which
final judgment is given, for the purchase of Dollars, for delivery two Business
Days thereafter.

 

Section 11.13                     Waiver of Jury Trial

 

Each
Agent and Each of the Lenders, the Issuers and the Borrower irrevocably waives
trial by jury in any action or proceeding with respect to this Agreement or any
other Loan Document.

 

Section 11.14                     Marshaling;
Payments Set Aside

 

None of the
Administrative Agent, any Lender, any Tranche B Investor or any Issuer
shall be under any obligation to marshal any assets in favor of the Borrower or
any other party or against or in payment of any or all of the Obligations.  To the extent that the Borrower makes a
payment or payments to the Administrative Agent, the Lenders, the
Tranche B Investors or the Issuers or any such Person receives payment
from the proceeds of the Collateral or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any
other party, then to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied, and all Liens, right and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.

 

Section 11.15                     Section Titles

 

The section titles
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto, except when used to reference such section.  If a numbered reference to a clause,
sub-clause or subsection hereof is immediately followed by a reference in
parenthesis to the title of a section hereof containing such clause,
sub-clause or subsection, the reference is only to such clause, sub-clause or
subsection and not to the section generally.  If a numbered reference to a section hereof
is immediately followed by a reference in parenthesis to a section hereof,
the title reference shall govern in case of direct conflict.

 

108

 

Section 11.16                     Execution
in Counterparts

 

This Agreement may be
executed in any number of counterparts and by different parties in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same
agreement.  Signature pages may be
detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are attached to the same
document.  Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart hereof.

 

Section 11.17                     Entire
Agreement

 

This Agreement, together
with all of the other Loan Documents and all certificates and documents
delivered hereunder or thereunder, embodies the entire agreement of the parties
and supersedes all prior agreements and understandings relating to the subject
matter hereof.  Delivery of an executed signature
page of this Agreement by facsimile transmission shall be as effective as
delivery of a manually executed counterpart hereof.  A set of the copies of this Agreement signed
by all parties shall be lodged with the Borrower and the Administrative Agent.

 

Section 11.18                     Confidentiality

 

(a)                                  Each
Lender, each Tranche B Investor and each Agent agree to keep information
obtained by it pursuant hereto and the other Loan Documents confidential in
accordance with such Lender’s, such Tranche B Investor’s or such Agent’s,
as the case may be, customary practices and agrees that it shall only use such
information in connection with the transactions contemplated by this Agreement
and not disclose any such information other than (i) to such Lender’s,
such Tranche B Investor’s or such Agent’s, as the case may be, employees,
representatives and agents that are or are expected to be involved in the
evaluation of such information in connection with the transactions contemplated
by this Agreement and are advised of the confidential nature of such
information, (ii) to the extent such information presently is or hereafter
becomes available to such Lender, such Tranche B Investor or such Agent,
as the case may be, on a non-confidential basis from a source other than the
Borrower, (iii) to the extent disclosure is required by law, regulation or
judicial order or requested or required by bank regulators or auditors or (iv) to
assignees, participants and Special Purpose Vehicles grantees of any option
described in Section 11.2(f) (Assignments and
Participations) (or potential assignees, participants or grantees)
or to any actual or prospective counterparty (or its advisors) to any
securitization, swap or derivative transaction relating to the Borrower, its
Subsidiaries or the Obligations that agree to be bound by the provisions of
this Section 11.18.

 

(b)                                 The
Agents, the Lenders and the Tranche B Investors acknowledge that the
Borrower and its Subsidiaries perform classified contracts funded by or for the
benefit of the United States Federal government and, accordingly, neither the
Borrower nor any Subsidiary will be obligated to release, disclose or otherwise
make available to any Agent or any Lender any classified or special nuclear
material to any parties not in possession of a valid security clearance and
authorized by the appropriate agency of the United States Federal government to
receive such material.  The Agents and
the Lenders agree that in connection with any exercise of a right or remedy the
United States Federal government may remove classified information or
government-issued property prior to any remedial action implicating such
classified information or government-issued property.  Upon notice from the Borrower, the Agents and
the Lenders shall take such steps in accordance with this Agreement as may
reasonably be requested by the 

 

109

 

Borrower
to enable the Borrower or any Subsidiary thereof to comply with the Foreign
Ownership Control or Influence requirements of the United States Federal
government imposed from time to time.

 

110

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