$4,000,000,000 364-Day Revolving Credit Agreement

 

<PAGE>

 

                                                                    Exhibit 10.6

 

                                                                  Execution Copy

 

                $4,000,000,000 364-Day Revolving Credit Agreement

 

                                    dated as of

 

                                October 15, 2004

 

                                      among

 

                    INTERNATIONAL LEASE FINANCE CORPORATION,

 

                          THE BANKS (as defined herein)

 

                                        and

 

                               CITICORP USA, INC.,

                             as Administrative Agent

 

                             BANK OF AMERICA, N.A.,

                           CREDIT SUISSE FIRST BOSTON,

                               JPMORGAN CHASE BANK,

                                       and

                THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND,

                            as Co-Syndication Agents

 

                         CITIGROUP GLOBAL MARKETS INC.,

                     as Sole Lead Arranger and Book Manager

 

<PAGE>

 

                                TABLE OF CONTENTS

 

<TABLE>

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SECTION 1.   CERTAIN DEFINITIONS ...................................................................................      1

       Section 1.1.   Terms Generally ..............................................................................      1

       Section 1.2.   Specific Terms ...............................................................................      1

 

SECTION 2.   BID LOANS AND BID NOTES................................................................................     11

       Section 2.1.   Making of Bid Loans ..........................................................................     11

       Section 2.2.   Procedure for Bid Loans.......................................................................     11

       Section 2.3.   Funding of Bid Loans .........................................................................     14

 

SECTION 3.   COMMITTED LOANS AND NOTES..............................................................................     14

       Section 3.1.   Agreement to Make Committed Loans.............................................................     14

       Section 3.2.   Procedure for Committed Loans.................................................................     14

       Section 3.3.   Maturity of Committed Loans...................................................................     15

 

SECTION 4.   INTEREST AND FEES .....................................................................................     16

       Section 4.1.   Interest Rates ...............................................................................     16

       Section 4.2.   Interest Payment Dates........................................................................     16

       Section 4.3.   Setting and Notice of Committed Loan Rates....................................................     16

       Section 4.4.   Facility Fee .................................................................................     17

       Section 4.5.   Utilization Fee ..............................................................................     17

       Section 4.6.   Agent's Fees .................................................................................     17

       Section 4.7.   Computation of Interest and Fees..............................................................     18

 

SECTION 5.   REDUCTION OR TERMINATION OF THE COMMITMENTS; REPAYMENT; PREPAYMENTS....................................     18

       Section 5.1.   Voluntary Termination or Reduction of the Commitments.........................................      18

       Section 5.2.   Voluntary Prepayments ........................................................................     18

       Section 5.3.   Term-Out Option ..............................................................................     18

 

SECTION 6.   MAKING AND PRORATION OF PAYMENTS; SET-OFF; TAXES.......................................................     19

       Section 6.1.   Making of Payments ...........................................................................     19

       Section 6.2.   Pro Rata Treatment; Sharing...................................................................     19

       Section 6.3.   Set-off ......................................................................................     20

       Section 6.4.   Taxes, etc. ..................................................................................     20

 

SECTION 7.   INCREASED COSTS AND SPECIAL PROVISIONS FOR ABSOLUTE RATE LOANS AND LIBOR RATE LOANS....................     23

       Section 7.1.   Increased Costs ..............................................................................     23

       Section 7.2.   Basis for Determining Interest Rate Inadequate or Unfair......................................     25

       Section 7.3.   Changes in Law Rendering Certain Loans Unlawful...............................................     25

       Section 7.4.   Funding Losses ...............................................................................     26

       Section 7.5.   Discretion of Banks as to Manner of Funding...................................................     26

       Section 7.6.   Conclusiveness of Statements; Survival of Provisions..........................................     26

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                                       i

<PAGE>

 

<TABLE>

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SECTION 8.   REPRESENTATIONS AND WARRANTIES.........................................................................     26

       Section 8.1.   Organization, etc.............................................................................     26

       Section 8.2.   Authorization; Consents; No Conflict..........................................................     27

       Section 8.3.   Validity and Binding Nature...................................................................     27

       Section 8.4.   Financial Statements .........................................................................     27

       Section 8.5.   Litigation and Contingent Liabilities.........................................................     27

       Section 8.6.   Employee Benefit Plans........................................................................     28

       Section 8.7.   Investment Company Act........................................................................     28

       Section 8.8.   Public Utility Holding Company Act............................................................     28

       Section 8.9.   Regulation U .................................................................................     28

       Section 8.10. Information ..................................................................................     28

       Section 8.11. Compliance with Applicable Laws, etc..........................................................     29

       Section 8.12. Insurance ....................................................................................     29

       Section 8.13. Taxes ........................................................................................     29

       Section 8.14. Use of Proceeds ..............................................................................     29

       Section 8.15. Pari Passu ...................................................................................     29

 

SECTION 9.   COVENANTS .............................................................................................     29

       Section 9.1.   Reports, Certificates and Other Information...................................................      29

       Section 9.2.   Existence ....................................................................................     31

       Section 9.3.   Nature of Business ...........................................................................     31

       Section 9.4.   Books, Records and Access.....................................................................     31

       Section 9.5.   Insurance ....................................................................................     32

       Section 9.6.   Repair .......................................................................................     32

       Section 9.7.   Taxes ........................................................................................     32

       Section 9.8.   Compliance ...................................................................................     32

       Section 9.9.   Sale of Assets ...............................................................................     32

       Section 9.10. Consolidated Indebtedness to Consolidated Tangible Net Worth Ratio............................     32

       Section 9.11. Fixed Charge Coverage Ratio...................................................................     32

       Section 9.12. Consolidated Tangible Net Worth...............................................................     32

       Section 9.13. Restricted Payments ..........................................................................     33

       Section 9.14. Liens ........................................................................................     33

       Section 9.15. Use of Proceeds ..............................................................................     35

 

SECTION 10. CONDITIONS TO LENDING. ................................................................................     35

       Section 10.1. Conditions Precedent to All Loans.............................................................     35

       Section 10.2. Conditions to the Availability of the Commitments.............................................     36

 

SECTION 11. EVENTS OF DEFAULT AND THEIR EFFECT.....................................................................     37

       Section 11.1. Events of Default ............................................................................     37

       Section 11.2. Effect of Event of Default....................................................................     39

 

SECTION 12. THE AGENT .............................................................................................     39

       Section 12.1. Authorization ................................................................................     39

       Section 12.2. Indemnification ..............................................................................     39

        Section 12.3. Action on Instructions of the Required Banks..................................................     40

       Section 12.4. Payments .....................................................................................     40

</TABLE>

 

                                        ii

<PAGE>

 

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       Section 12.5.   Exculpation .................................................................................     41

       Section 12.6.   Credit Investigation ........................................................................     41

       Section 12.7.   CUSA and Affiliates .........................................................................     42

       Section 12.8.   Resignation .................................................................................     42

       Section 12.9.   The Register; the Notes......................................................................     42

 

SECTION 13.   GENERAL   .............................................................................................     43

       Section 13.1.   Waiver; Amendments ..........................................................................     43

       Section 13.2.   Notices .....................................................................................     44

       Section 13.3.   Computations ................................................................................     45

        Section 13.4.   Assignments; Participations..................................................................     46

       Section 13.5.   Costs, Expenses and Taxes....................................................................     49

       Section 13.6.   Indemnification .............................................................................     49

       Section 13.7.   Regulation U ................................................................................     50

       Section 13.8.   Extension of Termination Dates; Removal of Banks; Substitution of Banks......................     50

       Section 13.9.   Captions ....................................................................................     52

       Section 13.10. Governing Law; Severability..................................................................     52

       Section 13.11. Counterparts; Effectiveness..................................................................     52

       Section 13.12. Further Assurances ..........................................................................     52

       Section 13.13. Successors and Assigns.......................................................................     53

       Section 13.14. Waiver of Jury Trial.........................................................................     53

       Section 13.15. No Fiduciary Relationship....................................................................     53

       Section 13.16. USA PATRIOT Act .............................................................................     53

</TABLE>

 

                                       iii

<PAGE>

 

                             SCHEDULES AND EXHIBITS

 

<TABLE>

<S>                <C>

Schedule I         Schedule of Banks (Sections 1.2, 3.1 and 13.8)

Schedule II        Fees and Margins (Sections 1.2, 4.4, 4.5 and 4.6)

Schedule III       Address for Notices (Section 13.2)

Exhibit A          Form of Notice of Competitive Bid Borrowing (Sections 1.2 and 2.2)

Exhibit B          Form of Bid (Sections 1.2 and 2.2)

Exhibit C          Form of Committed Loan Request (Sections 1.2 and 3.2)

Exhibit D          Form of Bid Note (Sections 1.2 and 2.4)

Exhibit E          Form of Committed Note (Sections 1.2 and 3.4)

Exhibit F          Fixed Charge Coverage Ratio 12/31/03 (Sections 1.2 and 9.11)

Exhibit G          Form of Opinion of Counsel for the Company (Section 10.2.5)

Exhibit H          Form of Opinion of the General Counsel of the Company (Section 10.2.5)

Exhibit I          Form of Assignment and Assumption Agreement (Section 13.4.1)

Exhibit J          Form of Request for Extension of Termination Date (Section 13.8)

</TABLE>

 

                                       iv

<PAGE>

 

                       364-DAY REVOLVING CREDIT AGREEMENT

 

            364-DAY REVOLVING CREDIT AGREEMENT (this "Agreement"), dated as of

October 15, 2004, among INTERNATIONAL LEASE FINANCE CORPORATION, a California

corporation (herein called the "Company"), the financial institutions listed on

the signature pages hereof (herein, together with their respective successors

and assigns, collectively called the "Banks" and individually each called a

"Bank") and CITICORP USA, INC. (herein, in its individual corporate capacity,

together with its successors and assigns, called "CUSA"), as administrative

agent for the Banks (herein, in such capacity, together with its successors and

assigns in such capacity, called the "Agent").

 

                                   WITNESSETH:

 

            WHEREAS, the Company has requested the Banks to lend up to

$4,000,000,000 to the Company on a 364-day revolving basis for general corporate

purposes;

 

            NOW, THEREFORE, in consideration of the premises and the mutual

agreements herein contained, the parties hereto agree as follows:

 

            SECTION 1. CERTAIN DEFINITIONS.

 

            Section 1.1. Terms Generally. The definitions ascribed to terms in

this Section 1 and elsewhere in this Agreement shall apply equally to both the

singular and plural forms of the terms defined. Whenever the context may

require, any pronoun shall include the corresponding masculine, feminine and

neuter forms. The words "include", "includes" and "including" shall be deemed to

be followed by the phrase "without limitation". The words "hereby", "herein",

"hereof", "hereunder" and words of similar import refer to this Agreement as a

whole (including any exhibits and schedules hereto) and not merely to the

specific section, paragraph or clause in which such word appears. All references

herein to Sections, Exhibits and Schedules shall be deemed references to

Sections of and Exhibits and Schedules to this Agreement unless the context

shall otherwise require.

 

            Section 1.2. Specific Terms. When used herein, the following terms

shall have the following meanings:

 

            "Absolute Rate" means a rate of interest per annum, expressed as a

percentage to four decimal places and set forth in a Bid for a particular Bid

Loan amount and a particular Loan Period.

 

            "Absolute Rate Loan" means any Loan which bears interest at an

Absolute Rate.

 

            "Affiliate" means, with respect to any Person, any other Person

directly or indirectly controlling, controlled by, or under direct or indirect

common control with such Person. A Person shall be deemed to control another

Person if such first Person possesses, directly or indirectly, the power to

direct or cause the direction of the management and policies of such other

Person, whether through ownership of stock, by contract or otherwise.

 

                                Credit Agreement

 

<PAGE>

 

                                      -2-

 

            "Agent" - see Preamble.

 

            "Aggregate Commitment" means $4,000,000,000, as reduced by any

reduction in the Commitments made from time to time pursuant to Section 5.1 or

Section 13.8.

 

             "Agreement" - see Preamble.

 

            "AIG" means American International Group, Inc., a Delaware

corporation.

 

            "Assignee" - see Section 13.4.1.

 

            "Authorized Officer" of the Company means any of the Chairman of the

Board, the President, the Vice Chair and Chief Financial Officer, the Treasurer,

the Controller and the Assistant Controller of the Company.

 

            "Available Commitment" - see Section 2.2(a).

 

            "Bank" - see Preamble.

 

            "Bank Parties" - see Section 13.6.

 

            "Base LIBOR" means, with respect to any Loan Period for a LIBOR Rate

Loan, (a) the rate per annum for Dollar deposits approximately equal to the

principal amount of the LIBOR Rate Loans for which LIBOR is being determined and

with maturities comparable to the Loan Period for which such rate would apply,

which appears on the Telerate Page 3750 (the "Telerate Page") at approximately

11:00 A.M., London time, on the day that is two Business Days prior to the first

day of such Loan Period and (b) if no such rate so appears on the Telerate Page

3750, the rate per annum determined by the Agent to be the arithmetic mean

(rounded to the nearest 1/100 of 1% or, if there is no nearest 1/100 of 1%, to

the next higher 1/100 of 1%) of the respective rates of interest communicated by

the Reference Banks to the Agent as the rate at which Dollar deposits are

offered to the Reference Banks by leading banks in the London interbank deposit

market at approximately 11:00 a.m., London time, on the second full Business Day

preceding the first day of such Loan Period in an amount substantially equal to

the amount of such LIBOR Rate Loan for such Reference Banks and for a period

equal to such Loan Period.

 

            "Base Rate" means a fluctuating interest rate per annum, as shall be

in effect from time to time, which rate per annum shall on any day be equal to

the higher of, (a) the rate of interest announced publicly by Citibank, N.A. in

New York, New York, from time to time, as Citibank, N.A.'s base rate; and (b)

the Federal Funds Rate for such day plus 1/2 of 1% per annum.

 

            "Base Rate Loan" means any Loan which bears interest at the Base

Rate.

 

            "Bid" means one or more offers by a Bank to make one or more Bid

Loans, submitted to the Agent by telephone no later than the Submission Deadline

and promptly confirmed in writing on the same day on a duly completed and

executed form substantially

 

                                Credit Agreement

 

<PAGE>

 

                                       -3-

 

similar to Exhibit B, personally delivered or transmitted by facsimile to the

Agent.

 

            "Bid Borrowing" - see Section 2.2(a).

 

            "Bid Loan" means a Loan in Dollars that is an Absolute Rate Loan or

a LIBOR Rate Loan made pursuant to Section 2.

 

            "Bid Note" means a promissory note of the Company, substantially in

the form of Exhibit D, duly completed, evidencing Bid Loans made to the Company,

as such note may be amended, modified or supplemented or supplanted pursuant to

Section 13.4.1 from time to time.

 

            "Business Day" means any day of the year on which banks are open for

commercial banking business in the City of New York and Los Angeles and, if the

applicable Business Day relates to the determination of LIBOR for any LIBOR Rate

Loan, any such Business Day on which dealings in deposits in Dollars are

transacted in the London interbank market.

 

            "Capitalized Lease" means any lease under which any obligations of

the lessee are, or are required to be, capitalized on a balance sheet of the

lessee in accordance with generally accepted accounting principles in the United

States of America.

 

            "Capitalized Rentals" means, as of the date of any determination,

the amount at which the obligations of the lessee, due and to become due under

all Capitalized Leases under which the Company or any Subsidiary is a lessee,

are reflected as a liability on a consolidated balance sheet of the Company and

its Subsidiaries.

 

            "Closing Date" - see Section 10.2.

 

            "Code" means the Internal Revenue Code of 1986, as amended.

 

            "Commitments" means the Banks' commitments to make Committed Loans

hereunder; and "Commitment" as to any Bank means the amount set forth opposite

such Bank's name on Schedule I (as reduced in accordance with Section 5.1, or as

periodically revised in accordance with Section 13.4 or Section 13.8).

 

            "Committed Loan" means a Loan in Dollars that is a Base Rate Loan or

LIBOR Rate Loan made pursuant to Section 3 or, if the Term-Out Option is in

effect, Section 5.3.

 

            "Committed Loan Request" - see Section 3.2(a).

 

            "Committed Note" means a promissory note of the Company,

substantially in the form of Exhibit E, duly completed, evidencing Committed

Loans to the Company, as such note may be amended, modified or supplemented or

supplanted pursuant to Section 13.4.1 from time to time.

 

            "Company" - see Preamble.

 

                                Credit Agreement

 

<PAGE>

 

                                       -4-

 

            "Consolidated Indebtedness" means, as of the date of any

determination, the total amount of Indebtedness less the amount of current and

deferred income taxes and rentals received in advance of the Company and its

Subsidiaries determined on a consolidated basis in accordance with generally

accepted accounting principles in the United States of America, and excluding

adjustments in relation to Indebtedness denominated in any currency other than

Dollars and any related derivative liability, in each case to the extent arising

from currency fluctuations (such exclusions to apply only to the extent the

resulting liability is hedged by the Company or such Subsidiary).

 

            "Consolidated Tangible Net Assets" means, as of the date of any

determination, the total amount of assets (less depreciation and valuation

reserves and other reserves and items deductible from the gross book value of

specific asset amounts under generally accepted accounting principles) which

under generally accepted accounting principles would be included on a balance

sheet of the Company and its Subsidiaries, after deducting therefrom (i) all

liability items except Indebtedness (whether incurred, assumed or guaranteed)

for borrowed money maturing by its terms more than one year from the date of

creation thereof or which is extendible or renewable at the sole option of the

obligor in such manner that it may become payable more than one year from the

date of creation thereof, shareholder's equity and reserves for deferred income

taxes and (ii) all good will, trade names, trademarks, patents, unamortized debt

discount and expense and other like intangibles, which in each case would be so

included on such balance sheet.

 

            "Consolidated Tangible Net Worth" means, as of the date of any

determination, the total of shareholders' equity (including capital stock,

additional paid-in capital and retained earnings after deducting treasury

stock), less the sum of the total amount of goodwill, organization expenses,

unamortized debt issue costs (determined on an after-tax basis), deferred assets

other than prepaid insurance and prepaid taxes, the excess of cost of shares

acquired over book value of related assets, surplus resulting from any

revaluation write-up of assets subsequent to December 31, 2002 and such other

assets as are properly classified as intangible assets, all determined in

accordance with generally accepted accounting principles in the United States of

America consolidating the Company and its Subsidiaries.

 

            "Covered Taxes" means all Taxes, including all liabilities

(including, without limitation, any penalties, interest and other additions to

tax) with respect thereto, other than the following Taxes, including all

liabilities (including, without limitation, any penalties, interest and other

additions to tax) with respect thereto: (i) Taxes imposed on the net income or

capital of the Agent, a Bank, Assignee or Participant under this Agreement and

franchise taxes imposed in lieu thereof (including without limitation branch

profits taxes, minimum taxes and taxes computed under alternative methods, at

least one of which is based on net income (collectively referred to as "net

income taxes")) by (A) the jurisdiction under the laws of which such Agent,

Bank, Assignee or Participant under this Agreement is organized or resident for

tax purposes or any political subdivision thereof or (B) the jurisdiction of

such Agent, Bank, Assignee or Participant's applicable lending office or any

political subdivision thereof or (C) any jurisdiction with which such Agent,

Bank, Assignee or Participant has any present or former connection (other than

solely by virtue of being a Bank under this Agreement), (ii) any Taxes to the

extent

 

                                 Credit Agreement

 

<PAGE>

 

                                      -5-

 

that they are in effect and would apply to a payment to such Agent, Bank,

Assignee or Participant as of the date of a change in the jurisdiction of such

Agent, Bank, Assignee or Participant's applicable lending office or (iii) any

Taxes that would not have been imposed but for (A) the failure or unreasonable

delay by such Agent, Bank, Assignee or Participant, as applicable, to complete,

provide, or file and update or renew, any application forms, certificates,

documents or other evidence required from time to time, properly completed and

duly executed, to qualify for any applicable exemption from or reduction of

Taxes, including, without limitation, the certificates, documents or other

evidence required under Sections 6.4(b), 6.4(c) and 6.4(e) (unless such failure

or delay results from a change in applicable law after the Closing Date or the

date of the applicable agreement pursuant to which such Assignee or Participant,

as the case may be, acquires an interest under this Agreement, which precludes

such Agent, Bank, Assignee or Participant, as applicable, from qualifying for

such exemption or reduction) or (B) the gross negligence or willful misconduct

of such Agent, Bank, Assignee or Participant.

 

            "CUSA" - see Preamble.

 

            "Dollar", and $, refer to the lawful money of the United States of

America.

 

            "ECA Financing" means any subsidized financing of the acquisition of

Airbus Industrie aircraft, the repayment obligations of which will be supported

by guaranties issued by certain European government export credit agencies (the

European Credit Agency Export Finance Program) and a Company Guaranty and a

pledge of the assets of (including any rights to or interests in any reserve or

security deposit held by) each such Wholly-owned Subsidiary.

 

            "Eligible Assignee" means (i) any Bank, and any Affiliate of any

Bank and (ii)(a) a commercial bank organized under the laws of the United States

or any state thereof, (b) a savings and loan association or savings bank

organized under the laws of the United States or any state thereof, (c) a

commercial bank organized under the laws of any other country or a political

subdivision thereof; provided that (1) such bank is acting through a branch or

agency located in the United States or (2) such bank organized under the laws of

a country that is a member of the Organization for Economic Cooperation and

Development or a political subdivision of such country and (d) a finance

company, insurance company, mutual fund, leasing company or other financial

institution or fund (whether a corporation, partnership or other entity) which

is engaged in making, purchasing or otherwise investing in commercial loans in

the ordinary course of its business, and having total assets in excess of

$150,000,000.

 

            "ERISA" means the Employee Retirement Income Security Act of 1974,

as amended.

 

            "ERISA Affiliate" means any corporation, trade or business that is,

along with the Company or any Subsidiary, a member of a controlled group of

corporations or a controlled group of trades or businesses, as described in

sections 414(b) and 414(c), respectively, of the Code or Section 4001 of ERISA.

 

            "Eurodollar Reserve Percentage" means for any day in any Loan Period

for any LIBOR Rate Loan that percentage in effect on such day as prescribed by

the Board of Governors

 

                                Credit Agreement

<PAGE>

 

                                       -6-

 

of the Federal Reserve System (or any successor thereto) or other U.S.

government agency for determining the reserve requirement (including, without

limitation, any marginal, basic, supplemental or emergency reserves) for a

member bank of the Federal Reserve System in New York City with deposits

exceeding one billion dollars in respect of eurocurrency funding liabilities.

LIBOR shall be adjusted automatically on and as of the effective date of any

change in the Eurodollar Reserve Percentage.

 

             "Event of Default" means any of the events described in Section

11.1.

 

            "Eximbank" means the Export-Import Bank of the United States.

 

            "Existing Litigation" - see Section 10.1.3.

 

            "FASB 13" means the Statement of Financial Accounting Standards No.

13 (Accounting for Leases) as in effect on the date hereof.

 

            "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 which is a Business Day, the average of the quotations for such day on such

transactions received by the Agent from three Federal funds brokers of

recognized standing selected by it.

 

             "Fixed Charge Coverage Ratio" on the last day of any quarter of any

fiscal year of the Company means the ratio for the period of four fiscal

quarters ending on such day of earnings to combined fixed charges and preferred

stock dividends referred to in Paragraph (d)(1) of Item 503 of Regulation S-K of

the Securities and Exchange Commission, as amended from time to time, and

determined pursuant to Instructions to paragraph 503(d) of such Item 503 with

the Company as "registrant" (such ratio for the four fiscal quarters ended

December 31, 2003 is attached hereto as Exhibit F); provided, however, that if

the Required Banks in their reasonable discretion determine that amendments to

Regulation S-K subsequent to the date hereof substantially modify the provisions

of such Item 503, "Fixed Charge Coverage Ratio" shall have the meaning

determined by this definition without regard to any such amendments.

 

            "Funding Date" means the date on which any Loan is scheduled to be

disbursed.

 

            "Funding Office" means, with respect to any Bank, any office or

offices of such Bank or Affiliate or Affiliates of such Bank through which such

Bank shall fund or shall have funded any Loan. A Funding Office may be, at such

Bank's option, either a domestic or foreign office of such Bank or a domestic or

foreign office of an Affiliate of such Bank.

 

            "Governmental Authority" means any nation 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.

 

                                Credit Agreement

<PAGE>

 

                                      -7-

 

            "Guaranties" by any Person means, without duplication, all

obligations (other than endorsements in the ordinary course of business of

negotiable instruments for deposit or collection) of such Person guaranteeing or

in effect guaranteeing any Indebtedness, dividend or other obligation of any

other Person (the "Primary Obligor") in any manner, whether directly or

indirectly, including, without limitation, all obligations incurred through an

agreement, contingent or otherwise, by such Person: (a) to purchase such

Indebtedness or obligation or any property or assets constituting security

therefor, (b) to advance or supply funds (i) for the purchase or payment of such

Indebtedness or obligation or (ii) to maintain working capital or other balance

sheet condition or otherwise to advance or make available funds for the purchase

or payment of such Indebtedness or obligation, (c) to lease property or to

purchase securities or other property or services primarily for the purpose of

assuring the owner of such Indebtedness or obligation of the ability of the

Primary Obligor to make payment of the Indebtedness or obligation or (d)

otherwise to assure the owner of the Indebtedness or obligation of the Primary

Obligor against loss in respect thereof; provided, however, that the obligation

described in clause (c) shall not include (i) obligations of a buyer under an

agreement with a seller to purchase goods or services entered into in the

ordinary course of such buyer's and seller's businesses unless such agreement

requires that such buyer make payment whether or not delivery is ever made of

such goods or services and (ii) remarketing agreements where the remaining debt

on an aircraft does not exceed the aircraft's net book value, determined in

accordance with industry standards, except that clause (c) shall apply to the

amount of remaining debt under a remarketing agreement that exceeds the net book

value of the aircraft. For the purposes of all computations made under this

Agreement, a Guaranty in respect of any Indebtedness for borrowed money shall be

deemed to be Indebtedness equal to the principal amount of such Indebtedness for

borrowed money which has been guaranteed, and a Guaranty in respect of any other

obligation or liability or any dividend shall be deemed to be Indebtedness equal

to the maximum aggregate amount of such obligation, liability or dividend.

 

            "Indebtedness" of any Person means and includes, without

duplication, all obligations of such Person which in accordance with generally

accepted accounting principles in the United States of America shall be

classified upon a balance sheet of such Person as liabilities of such Person,

and in any event shall include all:

 

            (a) obligations of such Person for borrowed money or which have been

      incurred in connection with the acquisition of property or assets (other

      than security and other deposits on flight equipment),

 

            (b) obligations secured by any Lien or other charge upon property or

      assets owned by such Person, even though such Person has not assumed or

      become liable for the payment of such obligations,

 

            (c) obligations created or arising under any conditional sale, or

      other title retention agreement with respect to property acquired by such

      Person, notwithstanding the fact that the rights and remedies of the

      seller, lender or lessor under such agreement in the event of default are

      limited to repossession or sale of property,

 

            (d) Capitalized Rentals of such Person under any Capitalized Lease,

 

                                Credit Agreement

<PAGE>

 

                                      -8-

 

            (e) obligations evidenced by bonds, debentures, notes or other

      similar instruments, and

 

            (f) Guaranties by such Person, to the extent required pursuant to

       the definition thereof.

 

            "Indemnified Liabilities" - see Section 13.6.

 

            "LIBOR" means, with respect to any Loan Period the rate per annum

(rounded to the nearest 1/100 of 1% or, if there is no nearest 1/100 of 1%, to

the next higher 1/100 of 1%), determined pursuant to the following formula:

 

                                               Base LIBOR

                  LIBOR=     ----------------------------------------------------

                                 (1 - Eurodollar Reserve Percentage)

 

            "LIBOR Rate" means (i) with respect to Committed Loans that are

LIBOR Rate Loans (but not Term Loans), LIBOR plus the applicable rate margin set

forth for LIBOR Rate Loans (other than Term Loans) in the row entitled "Margins"

on Schedule II, (ii) with respect to Bid Loans that are LIBOR Rate Loans, LIBOR

plus or minus the rate margin set forth in a Bid for a particular Bid Loan

amount and a particular Loan Period and (iii) with respect to Term Loans that

are LIBOR Rate Loans, LIBOR plus the applicable rate margin set forth in the row

entitled "Drawn Pricing Under the Term-Out Option (if LIBOR Rate Loans)" on

Schedule II.

 

            "LIBOR Rate Loan" means any Loan which bears interest at a LIBOR

Rate.

 

            "Lien" means any mortgage, pledge, lien, security interest or other

charge, encumbrance or preferential arrangement, including the retained security

title of a conditional vendor or lessor. For avoidance of doubt, the parties

hereto acknowledge that the filing of a financing statement under the Uniform

Commercial Code does not, in and of itself, give rise to a Lien.

 

            "Litigation Actions" means all litigation, claims and arbitration

proceedings, proceedings before any Governmental Authority or investigations

which are pending or, to the knowledge of the Company, threatened against, or

affecting, the Company or any Subsidiary.

 

            "Loan Period" means (i) with respect to any Absolute Rate Loan, the

period commencing on such Loan's Funding Date and ending not less than 14 days

thereafter nor more than 6 months thereafter as specified in the Bid Loan

Request related to such Bid Loan and (ii) with respect to any LIBOR Rate Loan,

the period commencing on such Loan's Funding Date and ending 1, 2, 3 or 6 months

thereafter as selected by the Company pursuant to Section 3.2(a) or specified in

the Notice of Competitive Bid Borrowing, as the case may be; provided, however,

that:

 

            (a) if a Loan Period would otherwise end on a day which is not a

      Business Day, such Loan Period shall end on the next succeeding Business

      Day (unless, in the case of a LIBOR Rate Loan, such next succeeding

      Business Day would fall in the next succeeding

 

                                Credit Agreement

<PAGE>

 

                                       -9-

 

      calendar month, in which case such Loan Period shall end on the next

      preceding Business Day),

 

            (b) in the case of a Loan Period for any LIBOR Rate Loan, if there

      exists no day numerically corresponding to the day such Loan was made in

      the month in which the last day of such Loan Period would otherwise fall,

      such Loan Period shall end on the last Business Day of such month, and

 

            (c) on the date of the making of any Loan by a Bank, the Loan Period

      for such Loan shall not extend beyond the then-scheduled Termination Date

      for such Bank (or the date contemplated by Section 5.3 if the Term-Out

      Option is in effect).

 

            "Loans" means, collectively, the Bid Loans and the Committed Loans

and, individually, any Bid Loan or Committed Loan.

 

            "Material Adverse Effect" means (i) any material adverse effect on

the business, properties, condition (financial or otherwise) or operations of

the Company and its Subsidiaries, taken as a whole since any stated reference

date or from and after the date of determination, as the case may be, (ii) any

material adverse effect on the ability of the Company to perform its material

obligations hereunder and under the Notes or (iii) any material adverse effect

on the legality, validity, binding effect or enforceability of any material

provision of this Agreement or any Note.

 

            "Multiemployer Plan" has the meaning assigned to such term in

Section 3(37) of ERISA.

 

            "New Litigation" - see Section 10.1.3.

 

            "Notes" means, collectively, the Bid Notes and the Committed Notes;

and "Note" means any individual Bid Note or Committed Note.

 

            "Notice of Competitive Bid Borrowing" - see Section 2.2(a).

 

            "Notice Office" means the office of CUSA which, as of the date

hereof, is located at 2 Penns Way, Suite 200, New Castle, DE 19720, Telecopy

Number 302-894-6005; Telephone 302-894-6120.

 

            "Participant" - see Section 13.4.2.

 

            "Payment Office" means the office of the Agent which, as of the date

hereof, is at 2 Penns Way, Suite 200, New Castle, DE 19720, Account Number:

36852248.

 

            "PBGC" means the Pension Benefit Guaranty Corporation and any entity

succeeding to any or all of its functions under ERISA.

 

            "Percentage" means as to any Bank the ratio, expressed as a

percentage, that such

 

                                Credit Agreement

<PAGE>

 

                                      -10-

 

Bank's Commitment as set forth opposite such Bank's name on Schedule I, as

periodically revised in accordance with Section 13.4 or 13.8, bears to the

Aggregate Commitment or, if the Commitments have been terminated, the ratio,

expressed as a percentage, that the aggregate principal amount of such Bank's

outstanding Loans bears to the aggregate principal amount of all outstanding

Loans.

 

            "Person" means an individual or a corporation, partnership, trust,

incorporated or unincorporated association, joint venture, joint stock company,

government (or an agency or political subdivision thereof) or other entity of

any kind.

 

            "Plan" means, at any date, any employee pension benefit plan (as

defined in section 3(2) of ERISA) which is subject to Title IV of ERISA (other

than a Multiemployer Plan) and to which the Company or any ERISA Affiliate may

have any liability, including any liability by reason of having been a

substantial employer within the meaning of section 4063 of ERISA at any time

during the preceding five years, or by reason of being deemed to be a

contributing sponsor under section 4069 of ERISA.

 

            "Reference Banks" means Citibank, N.A., Bank of America, N.A. and

The Governor and Company of the Bank of Scotland.

 

             "Reportable Event" means an event described in Section 4043(c) of

ERISA with respect to a Plan other than those events as to which the 30-day

notice period is waived under subsection .22, .23, .25, .27 or .28 of PBGC

Regulation Section 4043.

 

             "Required Banks" means Banks having an aggregate Percentage of 51%

or more.

 

            "Significant Subsidiary" means any Subsidiary which is so defined

pursuant to Rule 1-02 of Regulation S-X promulgated by the Securities and

Exchange Commission.

 

            "Submission Deadline" - see Section 2.2(b).

 

            "Subsidiary" means any Person of which or in which the Company and

its other Subsidiaries own directly or indirectly 50% or more of:

 

            (a) the combined voting power of all classes of stock having general

      voting power under ordinary circumstances to elect a majority of the board

      of directors of such Person, if it is a corporation,

 

            (b) the capital interest or profits interest of such Person, if it

      is a partnership, joint venture or similar entity, or

 

            (c) the beneficial interest of such Person, if it is a trust,

      association or other unincorporated organization.

 

            "Successor Bank" - see Section 13.8(c).

 

                                 Credit Agreement

<PAGE>

 

                                      -11-

 

            "Taxes" with respect to any Person means income, excise and other

taxes, and all assessments, imposts, duties and other governmental charges or

levies, imposed upon such Person, its income or any of its properties,

franchises or assets by any Governmental Authority.

 

            "Telerate Page" - see "Base LIBOR".

 

            "Terminating Bank" - see Section 13.8(c).

 

            "Termination Date" means, with respect to any Bank, the earliest to

occur of (i) October 14, 2005 or such later date as may be agreed to by such

Bank pursuant to Section 13.8(a), or if such day is not a Business Day, the next

preceding Business Day, (ii) the date on which the Commitments shall terminate

pursuant to Section 11.2 or the Commitments shall be reduced to zero pursuant to

Section 5.1 and (iii) the date specified as such Bank's Termination Date

pursuant to Section 13.8(b), or, if such day is not a Business Day, the next

preceding Business Day; in all cases, subject to the provisions of Section

13.8(d).

 

            "Term Loans" - see Section 5.3.

 

            "Term-Out Option" means the option of the Company to convert the

Committed Loans to Term Loans as defined in and contemplated by Section 5.3.

 

            "Unmatured Event of Default" means any event which if it continues

uncured will, with lapse of time or notice or lapse of time and notice,

constitute an Event of Default.

 

            "Wholly-owned Subsidiary" means any Person of which or in which the

Company and its other Wholly-owned Subsidiaries own directly or indirectly 100%

of:

 

            (a) the issued and outstanding shares of stock (except shares

      required as directors' qualifying shares),

 

            (b) the capital interest or profits interest of such Person, if it

      is a partnership, joint venture or similar entity, or

 

            (c) the beneficial interest of such Person, if it is a trust,

      association or other unincorporated organization.

 

             SECTION 2. BID LOANS AND BID NOTES.

 

            Section 2.1. Making of Bid Loans. On the terms and subject to the

conditions of this Agreement, each Bank, severally and for itself alone, may

(but is not obligated to) make Bid Loans to the Company from time to time on or

after the date hereof and prior to the date which is the fourteenth day

preceding such Bank's Termination Date in amounts equal to such Bank's Bids that

have been accepted as provided in Section 2.2(c); provided, that the aggregate

principal amount of all outstanding Loans shall not at any time exceed the then

Aggregate Commitment.

 

            Section 2.2. Procedure for Bid Loans.

 

                                Credit Agreement

<PAGE>

 

                                      -12-

 

            (a) Bid Loan Request. Whenever the Company desires to incur a

competitive bid borrowing (a "Bid Borrowing"), it shall give the Agent written

notice (or telephonic notice promptly confirmed in writing), such notice to be

delivered to the Agent at its Notice Office no later than 12:00 Noon, New York

City time, at least three Business Days prior to any proposed LIBOR Rate Loan

and at least one Business Day prior to any proposed Absolute Rate Loan. Each

such notice shall be substantially in the form of Exhibit A hereto (each a

"Notice of Competitive Bid Borrowing"), and shall specify in each case (i) the

date of such proposed Bid Borrowing (which shall be a Business Day), (ii) the

aggregate amount of the proposed Bid Borrowing, (iii) whether the proposed Bid

Borrowing is to be an Absolute Rate Loan or a LIBOR Rate Loan and the Loan

Period, (iv) the maturity date for repayment of each Bid Loan to be made as part

of such borrowing (which maturity date shall not be earlier than one month after

the date of any proposed LIBOR Rate Loan or 14 days after the date of any

proposed Absolute Rate Loan nor later than the earliest to occur of (x) six

months after the date of such proposed Bid Loan, (y) the Termination Date and

(z) if the proposed Bid Loan has an interest rate that is the LIBOR Rate, the

last day of the proposed Loan Period), (v) the interest payment date or dates

relating thereto, (vi) the account to which the proceeds of such Bid Borrowing

are to be credited and (vii) any other terms to be applicable to such Bid

Borrowing. The Agent shall promptly give each Bank written notice (or telephonic

notice promptly confirmed in writing) of each such request for a Bid Borrowing

received by it from the Company. Each Notice of Competitive Bid Borrowing shall

contemplate Bid Loans in a minimum aggregate principal amount of $10,000,000 or

a higher integral multiple of $1,000,000, not to exceed, however, the excess of

the then Aggregate Commitment over the aggregate principal amount of all

outstanding Loans, calculated as of the relevant Funding Date, assuming that the

Company will pay, when due, all Loans maturing on or prior to such Funding Date

(the "Available Commitment").

 

            (b) Bidding Procedure. Each Bank shall, if in its sole discretion it

elects to do so, irrevocably offer to make one or more Bid Loans to the Company

as part of such proposed Bid Borrowing at a rate or rates of interest specified

by such Bank in its sole discretion and determined by such Bank independently of

each other Bank, by notifying by telephone confirmed in writing to the Agent at

its Notice Office (which shall give prompt notice thereof to the Company),

before 10:00 a.m., New York City time, on the date (the "Submission Deadline")

that is (x) in the case of a proposed Absolute Rate Loan, the same day as the

date of such proposed Bid Loan and (y) in the case of a proposed LIBOR Rate

Loan, two Business Days before the date of such proposed Bid Loan. Each Bid

shall be substantially in the form of Exhibit B (each a "Bid"), and shall

specify in each case (i) the Loan Period, (ii) the minimum amount and maximum

amount of each Bid Loan that such Bank would be willing to make as part of such

proposed Bid Borrowing (which amounts may, subject to the proviso in Section

2.1, exceed such Bank's Commitment), (iii) the rate or rates of interest

therefor and (iv) such Bank's lending office with respect to such Bid Loan;

provided, that if the Agent in its capacity as a Bank shall, in its sole

discretion, elect to make any such offer, it shall notify the Company of such

offer before 8:30 a.m., New York City time, on the Submission Deadline.

 

            (c) Acceptance of Bids. The Company shall, in turn, before 10:30

a.m., New York City time, on the Submission Deadline, either:

 

            (i) cancel such proposed Bid Borrowing by giving the Agent notice to

      that effect,

 

                                Credit Agreement

<PAGE>

 

                                      -13-

 

      or

 

            (ii) accept (such acceptance to be irrevocable) one or more of the

      offers made by any Bank or Banks pursuant to clause (b) above by giving

      notice (in writing or by telephone confirmed in writing) to the Agent of

      the amount of each Bid Loan (which amount shall be equal to or greater

       than the minimum amount, and equal to or less than the maximum amount,

      notified to the Company by the Agent on behalf of such Bank for such Bid

      Borrowing pursuant to clause (b) above) to be made by such Bank as part of

      such Bid Borrowing, and reject any remaining offers made by any Bank

      pursuant to clause (b) above by giving the Agent notice to that effect;

      provided, that for any maturity date acceptance of offers may only be made

      on the basis of ascending Absolute Rates (in the case of an Absolute Rate

      Loan) or floating rates (in the case of a LIBOR Rate Loan), in each case

      commencing with the lowest rate so offered and only as to offers made in

      conformity with the terms hereof; provided, further, however, if offers

      are made by two or more Banks at the same rate or rates and acceptance of

      all such equal offers would result in a greater principal amount of Bid

      Loans being accepted than the aggregate principal amount requested by the

       Company, the Company shall have the right to accept one or more of such

      equal offers in their entirety and reject the other equal offer or offers

      or to allocate acceptance among all such equal offers (but giving effect

      to the minimum and maximum amounts specified for each such offer pursuant

      to clause (b) above), as the Company may elect in its sole discretion. The

      Company may not accept offers whose aggregate principal amount is greater

      than the requested aggregate amount as specified in the related Notice of

      Competitive Bid Borrowing subject to the proviso in Section 2.1.

 

            (d) Cancellation of Bid Borrowing. If the Company notifies the Agent

that such proposed Bid Borrowing is cancelled pursuant to clause (c)(i) above,

the Agent shall give prompt notice thereof to the Banks and such Bid Borrowing

shall not be made.

 

            (e) Notification of Acceptance and Repayment. If the Company accepts

one or more of the offers made by any Bank or Banks pursuant to clause (c)(ii)

above, the Agent shall in turn promptly notify (x) each Bank that has made an

offer as described in clause (b) above, of the date and aggregate amount of such

Bid Borrowing and whether or not any offer or offers made by such Bank pursuant

to clause (b) above have been accepted by the Company and (y) each Bank that is

to make a Bid Loan as part of such Bid Borrowing, of the amount of each Bid Loan

to be made by such Bank as part of such Bid Borrowing. The Company agrees to

repay the principal amount of each Bid Loan, and pay the interest accrued

thereon, in each case in accordance with the terms bid and accepted as provided

herein and, additionally in the case of the payment of interest, in accordance

with Sections 4.1 and 4.2 hereof.

 

            (f) Reliance. The Agent may rely and act upon notice given by

telephone by individuals reasonably believed by the Agent to be those designated

to the Agent by the Company or by any Bank in writing from time to time, without

waiting for receipt of written confirmation thereof, and the

Company hereby agrees to indemnify and hold harmless the Agent from and against

any and all losses, costs, expenses, damages, claims, actions or other

proceedings relating to such reliance.

 

                                 Credit Agreement

<PAGE>

 

                                      -14-

 

            Section 2.3. Funding of Bid Loans. No later than 1:00 p.m., New York

City time, on the date specified in each Notice of Competitive Bid Borrowing,

each Bank will make available the Bid Loan, if any, to be made by such Bank as

part of the Bid Borrowing requested to be made on such date in the manner

provided below. All amounts shall be made available to the Agent in Dollars and

immediately available funds at the Payment Office of the Agent and the Agent

promptly will make available to the Company at its account specified in the

relevant Notice of Competitive Bid Borrowing the aggregate of the amounts so

made available in the type of funds received. Unless the Agent shall have been

notified by any Bank which has submitted a bid pursuant to Section 2.2(b) prior

to the date of the proposed Bid Borrowing that such Bank does not intend to make

available to the Agent its portion, if any, of the Bid Borrowing to be made on

such date, the Agent may assume that such Bank has made such amount available to

the Agent on such date of the Bid Borrowing, and the Agent, in reliance upon

such assumption, may (in its sole discretion and without any obligation to do

so) make available to the Company a corresponding amount.

 

            SECTION 3. COMMITTED LOANS AND NOTES.

 

            Section 3.1. Agreement to Make Committed Loans. On the terms and

subject to the conditions of this Agreement, each Bank, severally and for itself

alone, agrees to make Loans (herein collectively called "Committed Loans" and

individually each called a "Committed Loan") on a revolving basis from time to

time from the date hereof until such Bank's Termination Date in such Bank's

Percentage of such aggregate amounts as the Company may from time to time

request as provided in Section 3.2; provided, that (a) the aggregate principal

amount of all outstanding Committed Loans of any Bank shall not at any time

exceed the amount set forth opposite such Bank's name on Schedule I (as reduced

in accordance with Section 5.1, Section 13.4 or Section 13.8) and (b) the

aggregate principal amount of all outstanding Committed Loans of all Banks plus

the aggregate principal amount of all outstanding Bid Loans of all Banks shall

not at any time exceed the then Aggregate Commitment. Within the limits of this

Section 3.1, the Company may from time to time borrow, prepay and reborrow

Committed Loans on the terms and conditions set forth in this Agreement.

 

            Section 3.2. Procedure for Committed Loans.

 

            (a) Committed Loan Requests. The Company shall give the Agent

irrevocable telephonic notice at the Notice Office (promptly confirmed in

writing on the same day), not later than 10:30 a.m., New York City time, (i) at

least three Business Days prior to the Funding Date in the case of LIBOR Rate

Loans or (ii) on the Funding Date in the case of Base Rate Loans, of each

requested Committed Loan, and the Agent shall promptly advise each Bank thereof

and, in the case of a LIBOR Rate Loan, if the Telerate Page is not available,

request each Reference Bank to notify the Agent of its applicable rate (as

contemplated in the definition of LIBOR). Each such notice to the Agent (a

"Committed Loan Request") shall be substantially in the form of Exhibit C and

shall specify (i) the Funding Date (which shall be a Business Day), (ii) the

aggregate amount of the Loans requested (in an amount permitted under clause (b)

below), (iii) whether each Loan shall be a LIBOR Rate Loan or a Base Rate Loan

and (iv) if a LIBOR Rate Loan, the Loan Period therefor (subject to the

limitations set forth in the definition of Loan Period).

 

                                Credit Agreement

<PAGE>

 

                                      -15-

 

            (b) Amount and Increments of Committed Loans. Each Committed Loan

Request shall contemplate Committed Loans in a minimum aggregate amount of

$10,000,000 or a higher integral multiple of $1,000,000, not to exceed in the

aggregate (for all requested Committed Loans) the Available Commitment.

 

            (c) Funding of Committed Loans.

 

            (i) Not later than 1:30 p.m., New York City time, on the Funding

Date of a Committed Loan, each Bank shall, subject to this Section 3.2(c),

provide the Agent at its Notice Office with immediately available funds covering

such Bank's Committed Loan (provided, that a Bank's obligation to provide funds

to the Agent shall be deemed satisfied by such Bank's delivery to the Agent at

its Notice Office not later than 1:30 p.m., New York City time, of a Federal

reserve wire confirmation number covering the proceeds of such Bank's Committed

Loan) and the Agent shall pay over such funds to the Company not later than 2:00

p.m., New York City time, on such day if the Agent shall have received the

documents required under Section 10 with respect to such Loan and the other

conditions precedent to the making of such Loan shall have been satisfied not

later than 10:00 a.m., New York City time, on such day. If the Agent does not

receive such documents or such other conditions precedent have not been

satisfied prior to such time, then (A) the Agent shall not pay over such funds

to the Company, (B) the Company's Committed Loan Request related to such Loan

shall be deemed cancelled in its entirety, (C) in the case of Committed Loan

Requests relative to LIBOR Rate Loans, the Company shall be liable to each Bank

in accordance with Section 7.4 and (D) the Agent shall return the amount

previously provided to the Agent by each Bank on the next following Business

Day.

 

            (ii) The Company agrees, notwithstanding its previous delivery of

any documents required under Section 10 with respect to a particular Loan,

immediately to notify the Agent of any failure by it to satisfy the conditions

precedent to the making of such Loan. The Agent shall be entitled to assume,

after it has received each of the documents required under Section 10 with

respect to a particular Loan, that each of the conditions precedent to the

making of such Loan has been satisfied absent actual knowledge to the contrary

received by the Agent prior to the time of the receipt of such documents. Unless

the Agent shall have notified the Banks prior to 10:30 a.m., New York City time,

on the Funding Date of any Loan that the Agent has actual knowledge that the

conditions precedent to the making of such Loan have not been satisfied, the

Banks shall be entitled to assume that such conditions precedent have been

satisfied.

 

            (d) Repayment of Loans. If any Bank is to make a Committed Loan

hereunder on a day on which the Company is to repay (or has elected to prepay,

pursuant to Section 5.2) all or any part of any outstanding Loan held by such

Bank, the proceeds of such new Committed Loan shall be applied to make such

repayment and only an amount equal to the positive difference, if any, between

the amount being borrowed and the amount being repaid shall be requested by the

Agent to be made available by such Bank to the Agent as provided in Section

3.2(c).

 

            Section 3.3. Maturity of Committed Loans. Except for a Base Rate

Loan, which shall mature on the Termination Date (or the date contemplated by

Section 5.3 if the Term-Out

 

                                Credit Agreement

<PAGE>

 

                                      -16-

 

Option is in effect), a Committed Loan made by a Bank shall mature on the last

day of the Loan Period applicable to such Committed Loan, but in no event later

than the Termination Date for such Bank (or the date contemplated by Section 5.3

if the Term-Out Option is in effect).

 

            SECTION 4. INTEREST AND FEES.

 

            Section 4.1. Interest Rates. The Company hereby promises to pay

interest on the unpaid principal amount of each Loan for the period commencing

on the Funding Date for such Loan until such Loan is paid in full, as follows:

 

            (a) if such Loan is a Bid Loan, at a rate per annum equal to the

Absolute Rate or the LIBOR Rate, as applicable, offered by the applicable Bank

and accepted by the Company for such Bid Loan;

 

             (b) if such Loan is a Base Rate Loan, at a rate per annum equal to

the Base Rate from time to time in effect; and

 

            (c) if such Loan is a Committed Loan that is a LIBOR Rate Loan, at a

rate per annum equal to the LIBOR Rate applicable to the Loan Period for such

Loan;

 

provided, however, that after the maturity of any Loan (whether by acceleration

or otherwise), such Loan shall bear interest on the unpaid principal amount

thereof at a rate per annum (calculated on the basis of a 360-day year for the

actual number of days involved) equal to the Base Rate from time to time in

effect (but not less than the interest rate in effect for such Loan immediately

prior to maturity) plus 1% per annum.

 

            Section 4.2. Interest Payment Dates. Except for Base Rate Loans, as

to which accrued interest shall be payable on the last day of each calendar

quarter and on the Termination Date (or the date contemplated by Section 5.3 if

the Term-Out Option is in effect), accrued interest on each Loan shall be

payable in arrears on the last day of the Loan Period therefor and (i) with

respect to each LIBOR Rate Loan with a Loan Period of six months, on the day

that is three months after the first day of such Loan Period (or, if there is no

day in such third month numerically corresponding to such first day of the Loan

Period, on the last Business Day of such month) and (ii) with respect to each

Absolute Rate Loan with a Loan Period exceeding 90 days, on the day that is 90

days after the first day of such Loan Period. After the maturity of any Loan,

accrued interest on such Loan shall be payable on demand. If any interest

payment date falls on a day that is not a Business Day, such interest payment

date shall be postponed to the next succeeding Business Day and the interest

paid shall cover the period of postponement (except that if the Loan is a LIBOR

Rate Loan and the next succeeding Business Day falls in the next succeeding

calendar month, such interest payment date shall be the immediately preceding

Business Day).

 

            Section 4.3. Setting and Notice of Committed Loan Rates. (a) The

applicable interest rate for each Committed Loan hereunder shall be determined

by the Agent and notice thereof shall be given by the Agent promptly to the

Company and to each Bank. Each determination of the applicable interest rate by

the Agent shall be conclusive and binding upon the parties hereto in the absence

of demonstrable error.

 

                                Credit Agreement

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                                       -17-

 

            (b) In the case of LIBOR Rate Loans, each Reference Bank agrees to

use its best efforts to notify the Agent in a timely fashion of its applicable

rate after the Agent's request (if any) therefor under Section 2.2(a) and

Section 3.2(a) (as contemplated in the definition of LIBOR). If as to any Loan

Period the Telerate Page is not available and any one or more of the Reference

Banks is unable or for any reason fails to notify the Agent of its applicable

rate by 11:30 a.m., New York City time, two Business Days before the Funding

Date, then the applicable LIBOR Rate shall be determined on the basis of the

rate or rates of which the Agent is given notice by the remaining Reference Bank

or Banks by such time. If the Telerate Page is not available and none of the

Reference Banks notifies the Agent of the applicable rate prior to 11:30 a.m.,

New York City time, two Business Days before the Funding Date, then (i) the

Agent shall promptly notify the other parties thereof and (ii) at the option of

the Company the Committed Loan Request delivered by the Company pursuant to

Section 3.2(a) with respect to such Funding Date shall be cancelled or shall be

deemed to have specified a Base Rate Loan.

 

            (c) The Agent shall, upon written request of the Company or any

Bank, deliver to the Company or such Bank a statement showing the computations

used by the Agent in determining the interest rate applicable to any LIBOR Rate

Loan.

 

            Section 4.4. Facility Fee. The Company agrees to pay to the Agent

for the accounts of the Banks pro rata in accordance with their respective

Percentages an annual facility fee computed by multiplying the average daily

amount of the Aggregate Commitment (whether used or unused) by the applicable

percentage determined with respect to such facility fee in accordance with

Schedule II hereto. Such fee shall be payable quarterly in arrears on the last

Business Day of March, June, September and December of each year (beginning with

the last Business Day of December, 2004) until the Commitments have expired or

have been terminated and on the date of such expiration or termination (and, in

the case of any Terminating Bank, such Bank's Termination Date), in each case

for the period then ending for which such facility fee has not previously been

paid.

 

            Section 4.5. Utilization Fee. The Company agrees to pay to the Agent

for the accounts of the Banks pro rata in accordance with their respective

Percentages, during any period that the aggregate outstanding principal amount

of the Loans exceeds 33.33% of the Aggregate Commitment, a utilization fee

computed by multiplying the average daily amount of the Aggregate Commitment by

the applicable percentage determined with respect to such utilization fee in

accordance with Schedule II hereto; provided, that if the then outstanding

aggregate principal amount of Bid Loans exceeds an amount equal to 33.33% of the

Aggregate Commitments as then in effect, then in calculating the aggregate

outstanding principal amount of the Loans for purposes of this Section 4.5 only,

the aggregate outstanding principal amount of Loans shall not include an amount

equal to 33.33% of the Aggregate Commitments as then in effect. Accrued

utilization fees shall be due and payable on each date that interest is payable

on each such Loan.

 

            Section 4.6. Agent's Fees. The Company agrees promptly to pay to the

Agent such fees as may be agreed from time to time by the Company and the Agent.

 

                                Credit Agreement

<PAGE>

 

                                      -18-

 

            Section 4.7. Computation of Interest and Fees. Interest on LIBOR

Rate Loans, and facility and utilization fees shall be computed for the actual

number of days elapsed on the basis of a 360-day year; and interest on Base Rate

Loans shall be computed for the actual number of days elapsed on the basis of a

365/366 day year, as the case may be. The interest rate applicable to each LIBOR

Rate Loan and Base Rate Loan, and (to the extent applicable) after the maturity

of any other type of Loan, the interest rate applicable to such Loan, shall

change simultaneously with each change in the LIBOR Rate or the Base Rate, as

applicable.

 

            SECTION 5. REDUCTION OR TERMINATION OF THE COMMITMENTS; REPAYMENT;

                       PREPAYMENTS.

 

            Section 5.1. Voluntary Termination or Reduction of the Commitments.

The Company may at any time on at least 5 days' prior irrevocable notice

received by the Agent (which shall promptly on the same day or on the next

Business Day advise each Bank thereof) permanently reduce the amount of the

Commitments (such reduction to be pro rata among the Banks according to their

respective Percentages) to an amount not less than the aggregate principal

amount of all outstanding Loans. Any such reduction shall be in the amount of

$5,000,000 or an integral multiple of $1,000,000 in excess thereof. Concurrently

with any such reduction, the Company shall prepay the principal of any Committed

Loans outstanding to the extent that the aggregate amount of such Loans

outstanding shall then exceed the Aggregate Commitment, as so reduced. The

Company may from time to time on like irrevocable notice terminate the

Commitments upon payment in full of all Loans, all interest accrued thereon, all

fees and all other obligations of the Company hereunder; provided, however, that

the Company may not at any time terminate the Commitments if any Bid Loan is

outstanding (unless the holder of each such outstanding Bid Loan has given its

prior written consent to the concurrent repayment of such Bid Loan).

 

            Section 5.2. Voluntary Prepayments. The Company may voluntarily

prepay Loans (other than Bid Loans, which may only be prepaid with the prior

written consent of the holder thereof) without premium or penalty, except as may

be required pursuant to subsection (e) below, in whole or in part; provided,

that (a) each prepayment shall be in an aggregate principal amount of

$10,000,000 or an integral multiple of $1,000,000 in excess thereof, (b) except

for the prepayment of the aggregate amount of all Loans outstanding, no such

prepayment shall result in there being less than $10,000,000 in Loans

outstanding in the aggregate, (c) the Company shall give the Agent at its Notice

Office (which shall promptly advise each Bank) not less than three Business

Days' prior notice thereof specifying the Loans to be prepaid and the date and

amount of prepayment, (d) any prepayment of principal of any Loan shall include

accrued interest to the date of prepayment on the principal amount being prepaid

and (e) any prepayment of a LIBOR Rate Loan shall be subject to the provisions

of Section 7.4.

 

            Section 5.3. Term-Out Option. The Company may, by notice to the

Agent not less than 10 days prior to the then-effective Termination Date,

subject to the conditions set forth below in this Section 5.3, elect to convert

the aggregate outstanding principal amount of the Committed Loans of each Bank

as of such then-effective Termination Date to a term loan of such Bank in said

amount (herein collectively called "Term Loans" and individually each called a

"Term Loan"). Each Term Loan shall bear interest, from and including such

then-effective

 

                                Credit Agreement

<PAGE>

 

                                       -19-

 

Termination Date until the payment thereof in full, at a rate per annum equal to

(x) in the case such Term Loan is a Base Rate Loan, the Base Rate from time to

time in effect and (y) in the case such Term Loan is a LIBOR Rate Loan, the

LIBOR Rate applicable to the Loan Period for such Term Loan, and in each case

shall otherwise constitute a Committed Loan for all purposes of this Agreement.

The Company agrees to repay to the Agent for account of the Banks the unpaid

principal amount of the Term Loans on the date 364 days after such

then-effective Termination Date or, if such date is not a Business Day, the

immediately preceding Business Day (and any outstanding Committed Note shall be

deemed amended accordingly). Once repaid or prepaid (other than as contemplated

by Section 3.2(d)), Term Loans cannot be reborrowed. Anything in this Section

5.3 to the contrary notwithstanding, any such conversion shall be subject to the

conditions precedent that (i) no Unmatured Event of Default or Event of Default

shall have occurred and be continuing on such then-effective Termination Date

and (ii) the representations and warranties made by the Company in Section 8

shall be true on and as of such then-effective Termination Date with the same

force and effect as if made on and as of such date. Each notice of conversion

delivered by the Company in accordance with this Section 5.3 shall constitute a

certification by the Company to the effect set forth in the preceding sentence

(both as of the date of such notice and, unless the Company, after delivery of

such notice, otherwise notifies the Agent prior to such then-effective

Termination Date, as of such date). Notwithstanding anything in this Agreement

to the contrary, facility fees contemplated by Section 4.4 and utilization fees

contemplated by Section 4.5 shall cease to accrue after the effectiveness of the

Term-Out Option.

 

            SECTION 6. MAKING AND PRORATION OF PAYMENTS; SET-OFF; TAXES.

 

            Section 6.1. Making of Payments. Except as provided in Section

3.2(d), payments (including those made pursuant to Section 5.1) of principal of,

or interest on, the Loans and all payments of fees and any other payments

required to be made by the Company to the Agent hereunder shall be made by the

Company to the Agent in immediately available funds at its Payment Office not

later than 12:00 Noon, New York City time, on the date due; and funds received

after that hour shall be deemed to have been received by the Agent on the next

following Business Day. The Agent shall promptly remit to each Bank its share

(if any) of each such payment. All payments under Section 7 and all payments

required to be made hereunder to any Person other than the Agent shall be made

by the Company when due directly to the Persons entitled thereto in immediately

available funds.

 

            Section 6.2. Pro Rata Treatment; Sharing.

 

            (a) Except as required pursuant to Section 7 or Section 13.8, each

payment or prepayment of principal of any Committed Loans, each payment of

interest on the Committed Loans, each payment of the utilization fee and each

payment of the facility fee shall be allocated pro rata among the Banks in

accordance with their respective Percentages. Each payment of principal of any

Bid Borrowing shall be allocated pro rata among the Banks participating in such

Bid Borrowing in accordance with the respective principal amounts of their

outstanding Bid Loans comprising such Bid Borrowing. Each payment of interest on

any Bid Borrowing shall be allocated pro rata among the Banks participating in

such Bid Borrowing in accordance with the respective amounts of accrued and

unpaid interest on their outstanding Bid Loans comprising

 

                                Credit Agreement

<PAGE>

 

                                       -20-

 

such Bid Borrowing.

 

            (b) If any Bank or other holder of a Committed Loan shall obtain any

payment or other recovery (whether voluntary, involuntary, by application of

offset or otherwise) on account of principal of, interest on or fees or other

amounts with respect to any Committed Loan in excess of the share of payments

and other recoveries (exclusive of payments or recoveries under Section 7 or

pursuant to Section 13.8) such Bank or other holder would have received if such

payment had been distributed pursuant to the provisions of Section 6.2(a), such

Bank or other holder shall purchase from the other Banks or holders, in a manner

to be specified by the Agent, such participations in the Committed Loans held by

them as shall be necessary so that all such payments of principal and interest

with respect to the Committed Loans shall be shared by the Banks and other

holders pro rata in accordance with their respective Percentages; provided,

however, that if all or any portion of the excess payment or other recovery is

thereafter recovered from such purchasing Bank or holder, the purchase shall be

rescinded and the purchase price restored to the extent of such recovery, but

without interest.

 

            (c) If any Bank or other holder of a Bid Loan shall obtain any

payment or other recovery (whether voluntary, involuntary, by application of

offset or otherwise) on account of principal of, interest on or fees or other

amounts with respect to any Bid Loan in excess of the share of payments and

other recoveries (exclusive of payments or recoveries pursuant to Section 7 or

Section 13.8) such Bank or other holder would have received if such payment had

been distributed pursuant to the provisions of Section 6.2(a), such Bank or

other holder shall purchase from the other Banks or holders participating in

such Bid Borrowing, in a manner to be specified by the Agent, such

participations in the Bid Loans held by them as shall be necessary so that all

such payments of principal and interest with respect to the Bid Loans shall be

shared by the Banks and other holders participating in such Bid Borrowing in a

manner consistent with Section 6.2(a); provided, however, that if all or any

portion of the excess payment or other recovery is thereafter recovered from

such purchasing Bank or holder, the purchase shall be rescinded and the purchase

price restored to the extent of such recovery, but without interest.

 

            Section 6.3. Set-off. The Company agrees that the Agent, each Bank,

each Assignee and each Participant has all rights of set-off and banker's lien

provided by applicable law, and the Company further agrees that at any time (i)

any amount owing by the Company under this Agreement is due to any such Person

or (ii) any Event of Default exists, each such Person may apply to the payment

of any amount payable hereunder any and all balances, credits, deposits,

accounts or moneys of the Company then or thereafter with such Person.

 

            Section 6.4. Taxes, etc. (a) All payments made by the Company to the

Agent, any Bank, any Assignee or any Participant under this Agreement and the

Notes shall be made without any set-off or counterclaim, and free and clear of

and without deduction for or on account of any present or future Covered Taxes

now or hereafter imposed (except to the extent that such withholding or

deduction (x) is compelled by law, (y) results from the breach, by the recipient

of a payment, of its agreement contained in Section 6.4(b), Section 6.4(c) or

Section 6.4(e) or (z) would not be required if the representation or warranty

contained in the second sentence of Section 6.4(b) were true as of the date of

this Agreement, or with respect to a Bank that becomes a Bank pursuant to

Section 13.4.1, Section 13.4.2 or Section 13.8, true at the time

 

                                Credit Agreement

<PAGE>

 

                                      -21-

 

such Bank becomes a Bank hereunder). If the Company is compelled by law to make

any such deductions or withholdings of any Covered Taxes it will:

 

            (i) pay to the relevant authorities the full amount required to be

      so withheld or deducted,

 

            (ii) except to the extent that such withholding or deduction results

      from the breach by the recipient of its agreement contained in Section

      6.4(b), Section 6.4(c) or Section 6.4(e) or, if applicable, would not be

      required if the representation or warranty contained in the second

      sentence of Section 6.4(b) were true as of the date of this Agreement, or

       with respect to a Bank that becomes a Bank pursuant to Section 13.4.1,

      Section 13.4.2 or Section 13.8, true at the time such Bank becomes a Bank

      hereunder, pay such additional amounts as may be necessary in order that

      the net amount received by the Agent, each Bank, each Assignee and each

      Participant after such deductions or withholdings (including any required

      deduction or withholding on such additional amounts) shall equal the

      amount such payee would have received had no such deductions or

      withholdings been made, and

 

            (iii) promptly forward to the Agent (for delivery to such payee) an

      official receipt or other documentation satisfactory to the Agent

      evidencing such payment to such authorities.

 

            Moreover, if any Covered Taxes are directly asserted against the

Agent, any Bank, any Assignee or any Participant, such payee may pay such

Covered Taxes, and, upon receipt of an official receipt or other satisfactory

documentation evidencing such payment, the Company shall promptly pay such

additional amount (including, without limitation, any penalties, interest or

reasonable expenses) as may be necessary in order that the net amount received

by such payee after the payment of such Covered Taxes (including any Covered

Taxes on such additional amount) shall equal the amount such payee would have

received had no such Covered Taxes been asserted (provided, that the Agent, the

Banks, and any Assignee or Participant shall use reasonable efforts, to the

extent consistent with applicable laws and regulations, to minimize to the

extent possible any such Covered Taxes if they can do so without material cost

or legal or regulatory disadvantage). For purposes of this Section 6.4, a

distribution hereunder by the Agent or any Bank to or for the account of any

Bank, Assignee or Participant shall be deemed to be a payment by the Company.

The Company's agreement under this Section 6.4 shall survive repayment of the

Loans, cancellation of the Notes or any termination of this Agreement.

 

            (b) In consideration of, and as a condition to, the Company's

undertakings in Section 6.4(a), each Bank other than a Bank that is organized

and existing under the laws of the United States of America or any State thereof

(a "Non-U.S. Bank") agrees to execute and deliver to the Agent at its Payment

Office for delivery to the Company, before the first scheduled payment date in

each year, (i) to the extent it acts for its own account with respect to any

portion of any sums paid or payable to such Non-U.S. Bank under this Agreement,

two original copies of United States Internal Revenue Service Forms W-8BEN,

W-8ECI or W-8EXP (or any successor forms), as appropriate, properly completed

and duly executed by such Non-U.S. Bank, and

 

                                Credit Agreement

<PAGE>

 

                                      -22-

 

claiming complete exemption from withholding and deduction of United States

Federal Taxes, and (ii) to the extent it does not act or has ceased to act for

its own account with respect to any portion of any sums paid or payable to such

Bank under this Agreement (for example, in the case of a typical Participation

by such Non-U.S. Bank), (1) for the portion of any such sums paid or payable

with respect to which such Non-U.S. Bank acts for its own account, two original

copies of the forms or statements required to be provided by such Non-U.S. Bank

under subsection (i) of this Section 6.4(b), properly completed and duly

executed by such Non-U.S. Bank and claiming complete exemption from withholding

and deduction of United States Federal Taxes, and (2) for the portion of any

such sums paid or payable with respect to which such Non-U.S. Bank does not act

or has ceased to act for its own account, two original copies of United States

Internal Revenue Service Form W-8IMY (or any successor forms), properly

completed and duly executed by such Non-U.S. Bank, together with any

information, if any, such Non-U.S. Bank chooses to transmit with such form, and

any other certificate or statement of exemption required under the Internal

Revenue Code or the regulations issued thereunder. Each Bank hereby (i)

represents and warrants to the Company that, at the date of this Agreement, or

at the time such Bank becomes a Bank hereunder, it is entitled to receive

payments of principal and interest hereunder without deduction for or on account

of any Taxes imposed by the United States of America or any political

subdivision thereof, and (ii) acknowledges that in the event that after the date

of this Agreement or after the date that a Bank becomes a Bank hereunder, such

Bank is no longer entitled to receive payments or principal and interest

hereunder without deduction for or on account of any Taxes imposed by the United

States of America or any political subdivision thereof, such Bank will be

subject to removal pursuant to Section 13.8 hereof.

 

            (c) Each Non-U.S. Bank hereby agrees, from time to time after the

initial delivery by such Non-U.S. Bank of any forms or other information

pursuant to Section 6.4(b), whenever a