REVOLVING CREDIT AND GUARANTY AGREEMENT

Revolving Credit Agreement

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Title: REVOLVING CREDIT AND GUARANTY AGREEMENT
Governing Law: New York Date: 3/15/2004
Industry: Insurance (Prop. and Casualty) Sector: Financial

REVOLVING CREDIT AND GUARANTY AGREEMENT, Parties: danielson holding corp

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EXECUTION COPY

EXHIBIT 4.31

REVOLVING CREDIT AND GUARANTY AGREEMENT

AMONG

AMERICAN COMMERCIAL LINES LLC

A DEBTOR AND A DEBTOR-IN-POSSESSION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE

AS BORROWER

AMERICAN COMMERCIAL LINES HOLDINGS LLC

AND

THE SUBSIDIARIES OF THE BORROWER NAMED HEREIN,

EACH A DEBTOR AND A DEBTOR-IN-POSSESSION

UNDER CHAPTER 11 OF THE BANKRUPTCY CODE

AS GUARANTORS

AND

THE LENDERS PARTY HERETO,

AND

JPMORGAN CHASE BANK,

AS ADMINISTRATIVE AGENT, DOCUMENTATION AGENT

AND COLLATERAL AGENT

J.P. MORGAN SECURITIES INC.,

AS BOOK MANAGER

AND

LEAD ARRANGER

AND

GENERAL ELECTRIC CAPITAL CORPORATION,

AS CO-SYNDICATION AGENT

AND

BANK ONE, NA

AS CO-SYNDICATION AGENT

DATED AS OF JANUARY 31, 2003

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TABLE OF CONTENTS

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SECTION 1. DEFINITIONS............................................................................... 2

SECTION 1.01 Defined Terms............................................................... 2

SECTION 1.02 Terms Generally............................................................. 19

SECTION 2. AMOUNT AND TERMS OF CREDIT................................................................ 20

SECTION 2.01 Commitments of the Lenders.................................................. 20

SECTION 2.02 Borrowing Base.............................................................. 20

SECTION 2.03 Letters of Credit........................................................... 21

SECTION 2.04 Issuance.................................................................... 23

SECTION 2.05 Nature of Letter of Credit Obligations Absolute............................. 23

SECTION 2.06 Making of Loans............................................................. 23

SECTION 2.07 Repayment of Loans; Evidence of Debt........................................ 24

SECTION 2.08 Interest on Loans........................................................... 25

SECTION 2.09 Default Interest............................................................ 25

SECTION 2.10 Optional Termination or Reduction of Commitment............................. 25

SECTION 2.11 Alternate Rate of Interest.................................................. 26

SECTION 2.12 Refinancing of Loans........................................................ 26

SECTION 2.13 Mandatory Prepayment; Commitment Termination; Cash Collateral............... 27

SECTION 2.14 Optional Prepayment of Loans; Reimbursement of Lenders...................... 27

SECTION 2.15 Reserve Requirements; Change in Circumstances............................... 29

SECTION 2.16 Change in Legality.......................................................... 30

SECTION 2.17 Pro Rata Treatment, etc..................................................... 31

SECTION 2.18 Taxes....................................................................... 31

SECTION 2.19 Certain Fees................................................................ 32

SECTION 2.20 Commitment Fee.............................................................. 32

SECTION 2.21 Letter of Credit Fees....................................................... 32

SECTION 2.22 Nature of Fees.............................................................. 33

SECTION 2.23 Priority and Liens.......................................................... 33

SECTION 2.24 Right of Set-Off............................................................ 34

SECTION 2.25 Security Interest in Letter of Credit Account............................... 35

SECTION 2.26 Payment of Obligations...................................................... 35

SECTION 2.27 No Discharge; Survival of Claims............................................ 35

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SECTION 2.28 Use of Cash Collateral...................................................... 35

SECTION 3. REPRESENTATIONS AND WARRANTIES............................................................ 35

SECTION 3.01 Organization and Authority.................................................. 35

SECTION 3.02 Due Execution............................................................... 36

SECTION 3.03 Statements Made............................................................. 36

SECTION 3.04 Financial Statements........................................................ 36

SECTION 3.05 Ownership................................................................... 37

SECTION 3.06 Liens....................................................................... 37

SECTION 3.07 Compliance with Law......................................................... 37

SECTION 3.08 Insurance................................................................... 38

SECTION 3.09 Use of Proceeds............................................................. 38

SECTION 3.10 Litigation.................................................................. 38

SECTION 4. CONDITIONS OF LENDING..................................................................... 38

SECTION 4.01 Conditions Precedent to Initial Loans and Initial Letters of Credit......... 38

SECTION 4.02 Conditions Precedent to Each Loan and Each Letter of Credit................. 41

SECTION 5. AFFIRMATIVE COVENANTS..................................................................... 43

SECTION 5.01 Financial Statements, Reports, etc.......................................... 43

SECTION 5.02 Corporate Existence......................................................... 45

SECTION 5.03 Insurance................................................................... 45

SECTION 5.04 Obligations and Taxes....................................................... 46

SECTION 5.05 Notice of Event of Default, etc............................................. 46

SECTION 5.06 Access to Books and Records................................................. 46

SECTION 5.07 Maintenance of Concentration Account........................................ 46

SECTION 5.08 Borrowing Base Certificate.................................................. 47

SECTION 5.09 Collateral Monitoring and Review............................................ 47

SECTION 5.10 Certificates of Ownership and Encumbrance................................... 47

SECTION 6. NEGATIVE COVENANTS........................................................................ 47

SECTION 6.01 Liens....................................................................... 47

SECTION 6.02 Merger, etc................................................................. 48

SECTION 6.03 Indebtedness................................................................ 48

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SECTION 6.04 Capital Expenditures........................................................ 48

SECTION 6.05 EBITDA...................................................................... 49

SECTION 6.06 Guarantees and Other Liabilities............................................ 49

SECTION 6.07 Chapter 11 Claims........................................................... 49

SECTION 6.08 Dividends; Capital Stock.................................................... 49

SECTION 6.09 Transactions with Affiliates................................................ 49

SECTION 6.10 Investments, Loans and Advances............................................. 50

SECTION 6.11 Disposition of Assets....................................................... 50

SECTION 6.12 Nature of Business.......................................................... 50

SECTION 7. EVENTS OF DEFAULT......................................................................... 50

SECTION 7.01 Events of Default........................................................... 50

SECTION 8. THE AGENT................................................................................. 54

SECTION 8.01 Administration by Agent..................................................... 54

SECTION 8.02 Advances and Payments....................................................... 54

SECTION 8.03 Sharing of Setoffs.......................................................... 54

SECTION 8.04 Agreement of Required Lenders............................................... 55

SECTION 8.05 Liability of Agent.......................................................... 55

SECTION 8.06 Reimbursement and Indemnification........................................... 56

SECTION 8.07 Rights of Agent............................................................. 56

SECTION 8.08 Independent Lenders......................................................... 56

SECTION 8.09 Notice of Transfer.......................................................... 56

SECTION 8.10 Successor Agent............................................................. 56

SECTION 9. GUARANTY.................................................................................. 57

SECTION 9.01 Guaranty.................................................................... 57

SECTION 9.02 No Impairment of Guaranty................................................... 58

SECTION 9.03 Subrogation................................................................. 58

SECTION 10. MISCELLANEOUS............................................................................. 58

SECTION 10.01 Notices..................................................................... 58

SECTION 10.02 Survival of Agreement, Representations and Warranties, etc.................. 59

SECTION 10.03 Successors and Assigns...................................................... 59

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SECTION 10.04 Confidentiality............................................................. 61

SECTION 10.05 Expenses.................................................................... 61

SECTION 10.06 Indemnity................................................................... 62

SECTION 10.07 CHOICE OF LAW............................................................... 62

SECTION 10.08 No Waiver................................................................... 62

SECTION 10.09 Extension of Maturity....................................................... 63

SECTION 10.10 Amendments, etc............................................................. 63

SECTION 10.11 Severability................................................................ 64

SECTION 10.12 Headings.................................................................... 64

SECTION 10.13 Execution in Counterparts................................................... 64

SECTION 10.14 Prior Agreements............................................................ 64

SECTION 10.15 Further Assurances.......................................................... 64

SECTION 10.16 WAIVER OF JURY TRIAL........................................................ 64

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ANNEX A Commitment Amounts

EXHIBIT A - Form of Interim Order

EXHIBIT B - Form of Security and Pledge Agreement

EXHIBIT B-1 - Form of Preferred Fleet Mortgage

EXHIBIT C - Form of Assignment and Acceptance

EXHIBIT D - Form of Borrowing Base Certificate

EXHIBIT E - Form of Opinion of Counsel

SCHEDULE 3.05 - Subsidiaries

SCHEDULE 3.06 - Liens

SCHEDULE 3.10 - Litigation

SCHEDULE 6.10 - Existing Investments

SCHEDULE 6.11 - Asset Sales

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REVOLVING CREDIT AND GUARANTY AGREEMENT

DATED AS OF JANUARY 31, 2003

REVOLVING CREDIT AND GUARANTY AGREEMENT, dated as of January 31,

2003, among AMERICAN COMMERCIAL LINES LLC, a Delaware limited liability company

(the "Borrower"), a debtor and debtor-in-possession in a case pending under

Chapter 11 of the Bankruptcy Code, and American Commercial Lines Holdings LLC, a

Delaware limited liability company and the owner of all the outstanding member

interests of the Borrower ("Holdings") and certain of the direct or indirect

subsidiaries of the Borrower signatory hereto (together with Holdings, each a

"Guarantor" and collectively, the "Guarantors"), each of which Guarantors

referred to in this paragraph is a debtor and debtor-in-possession in a case

pending under Chapter 11 of the Bankruptcy Code (the cases of the Borrower and

the Guarantors, each a "Case" and collectively, the "Cases"), JPMORGAN CHASE

BANK, a New York banking corporation ("JPMorgan Chase"), each of the other

financial institutions from time to time party hereto (together with Chase, the

"Lenders"), JPMORGAN CHASE BANK, as agent (in such capacity, the "Agent") for

the Lenders, and BANK ONE, NA and GENERAL ELECTRIC CAPITAL CORPORATION, as

Co-Syndication Agents (in such capacities, the "Co-Syndication Agents").

INTRODUCTORY STATEMENT

On January 31, 2003, the Borrower and the Guarantors filed voluntary

petitions with the Bankruptcy Court initiating the Cases and have continued in

the possession of their assets and in the management of their business pursuant

to Sections 1107 and 1108 of the Bankruptcy Code.

The Borrower, the Guarantors, the Existing Lenders and JPMorgan

Chase, as administrative agent, are parties to that certain Credit Agreement

dated as of June 30, 1998, as amended and restated as of April 11, 2002 (as

further amended, amended and restated, or otherwise modified, the "Existing

Agreement") pursuant to which the Borrower and the Guarantors were truly and

justly indebted to the Existing Lenders on the Filing Date in the principal

amount of $363,619,276.86 (including the aggregate outstanding face amount of

issued but undrawn letters of credit outstanding thereunder) in respect of the

extensions of credit provided for thereunder.

The Borrower has applied to the Lenders for (i) a revolving credit

and letter of credit facility in an aggregate principal amount not to exceed

$25,000,000, and (ii) a term loan facility in an aggregate principal amount not

to exceed $50,000,000, all of the Borrower's obligations under which are to be

guaranteed by the Guarantors.

The proceeds of the Loans will be used (i) to repurchase the

Existing Receivables Portfolio and (ii) for working capital and other general

corporate purposes of the Borrower and the Guarantors.

To provide guarantees and security for the repayment of the Loans,

the reimbursement of any draft drawn under a Letter of Credit and the payment of

the other obligations of the Borrower and the Guarantors hereunder and under the

other Loan Documents

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(including, without limitation, the Obligations of the Borrower under Section

6.03(v)), the Borrower and the Guarantors will provide to the Agent and the

Lenders the following (each as more fully described herein):

(a) a guaranty from each of the Guarantors of the due and punctual payment

and performance of the obligations of the Borrower hereunder;

(b) an allowed administrative expense claim in each of the Cases pursuant

to Section 364(c)(1) of the Bankruptcy Code having priority over all

administrative expenses of the kind specified in Sections 503(b) and 507(b) of

the Bankruptcy Code;

Bankruptcy Code, on all present and future receivables of the Borrower and the

Guarantors (including, without limitation, the Existing Receivables Portfolio

upon the repurchase thereof), and upon all other unencumbered property of the

Borrower and the Guarantors, and on all cash and cash equivalents in the Letter

of Credit Account, provided that following the Termination Date, amounts in the

Letter of Credit Account shall not be subject to the Carve-Out hereinafter

referred to;

(d) a perfected Lien, pursuant to Section 364(c)(3) of the Bankruptcy

Code, upon all property of the Borrower and the Guarantors (other than the

property referred to in paragraph (e) below that is subject to the valid and

perfected Liens that presently secure the Borrower's and Guarantors'

pre-petition Indebtedness under the Existing Agreement) that is subject to valid

and perfected Liens in existence on the Filing Date or that is subject to valid

Liens in existence on the Filing Date that are perfected subsequent to the

Filing Date as permitted by Section 546(b) of the Bankruptcy Code or that is

subject to Permitted Liens, junior to such valid and perfected Liens; and

(e) perfected first priority priming Liens, pursuant to Section 364(d)(1)

of the Bankruptcy Code, upon all property of the Borrower and the Guarantors

that is subject to (x) the existing Liens that presently secure the Borrower's

and Guarantors' pre-petition Indebtedness under or in connection with the

Existing Agreement (but subject to any Liens to which the Liens being primed

hereby are subject on the Filing Date or become subject subsequent to the Filing

Date as permitted by Section 546(b) of the Bankruptcy Code) and (y) any Liens

granted after the Filing Date to provide adequate protection in respect of the

Existing Agreement, which first priority priming Liens in favor of the Agent and

the Lenders shall be senior in all respects to all of such existing Liens under

or in connection with the Existing Agreement, and to any Liens granted after the

Filing Date to provide adequate protection in respect thereof.

All of the claims and the Liens granted hereunder in the Cases to

the Agent and the Lenders shall be subject to the Carve-Out to the extent

provided in Section 2.23.

Accordingly, the parties hereto hereby agree as follows:

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SECTION 1. DEFINITIONS

SECTION 1.01 DEFINED TERMS.

"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.

"ABR Loan" shall mean any Loan bearing interest at a rate determined

by reference to the Alternate Base Rate in accordance with the provisions of

Section 2.

"Account" shall mean any right to payment for goods sold or leased

or for services rendered, whether or not earned by performance.

"Additional Credit" shall have the meaning given such term in

Section 4.02(d) hereof.

"Adjusted LIBOR Rate" shall mean, with respect to any Eurodollar

Borrowing for any Interest Period, an interest rate per annum (rounded upwards,

if necessary, to the next 1/16 of 1%) equal to the quotient of (a) the LIBOR

Rate in effect for such Interest Period divided by (b) a percentage (expressed

as a decimal) equal to 100% minus Statutory Reserves. For purposes hereof, the

term "LIBOR Rate" shall mean the rate at which dollar deposits approximately

equal in principal amount to such Eurodollar Borrowing and for a maturity

comparable to such Interest Period are offered to the principal London office of

the Agent in immediately available funds in the London interbank market at

approximately 11:00 a.m., London time, two Business Days prior to the

commencement of such Interest Period.

"Affiliate" shall mean, as to any Person, any other Person which,

directly or indirectly, is in control of, is controlled by, or is under common

control with, such Person. For purposes of this definition, a Person (a

"Controlled Person") shall be deemed to be "controlled by" another Person (a

"Controlling Person") if the Controlling Person possesses, directly or

indirectly, power to direct or cause the direction of the management and

policies of the Controlled Person whether by contract or otherwise.

"Agent" shall have the meaning set forth in the Introduction.

"Agreement" shall mean this Revolving Credit and Guaranty Agreement,

as the same may from time to time be further amended, modified or supplemented.

"Alternate Base Rate" shall mean, for any day, a rate per annum

equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Base

CD Rate in effect on such day plus 1% and (c) the Federal Funds Effective Rate

in effect on such day plus 1/2 of 1%. For purposes hereof, "Prime Rate" shall

mean the rate of interest per annum publicly announced from time to time by the

Agent as its prime rate in effect at its principal office in New York City; each

change in the Prime Rate shall be effective on the date such change is publicly

announced. "Base CD Rate" shall mean the sum of (a) the quotient of (i) the

Three-Month Secondary CD Rate divided by (ii) a percentage expressed as a

decimal equal to 100% minus Statutory Reserves and (b) the Assessment Rate.

"Three-Month Secondary CD Rate" shall mean, for any day, the secondary market

rate for three-month certificates of deposit reported as being in effect on such

day (or, if such day shall not be a Business Day, the next preceding Business

Day) by the Board

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through the public information telephone line of the Federal Reserve Bank of New

York (which rate will, under the current practices of the Board, be published in

Federal Reserve Statistical Release H.15(519) during the week following such

day), or, if such rate shall not be so reported on such day or such next

preceding Business Day, the average of the secondary market quotations for

three-month certificates of deposit of major money center banks in New York City

received at approximately 10:00 a.m., New York City time, on such day (or, if

such day shall not be a Business Day, on the next preceding Business Day) by the

Agent from three New York City negotiable certificate of deposit dealers of

recognized standing selected by it. "Federal Funds Effective Rate" shall mean,

for any day, 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 on the next succeeding 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 the day of such

transactions received by the Agent from three Federal funds brokers of

recognized standing selected by it. If for any reason the Agent shall have

determined (which determination shall be conclusive absent manifest error) that

it is unable to ascertain the Base CD Rate or the Federal Funds Effective Rate

or both for any reason, including the inability or failure of the Agent to

obtain sufficient quotations in accordance with the terms hereof, the Alternate

Base Rate shall be determined without regard to clause (b) or (c), or both, of

the first sentence of this definition, as appropriate, until the circumstances

giving rise to such inability no longer exist. Any change in the Alternate Base

Rate due to a change in the Prime Rate, the Three-Month Secondary CD Rate or the

Federal Funds Effective Rate shall be effective on the effective date of such

change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds

Effective Rate, respectively.

"Assessment Rate" shall mean for any date the annual rate (rounded

upwards, if necessary, to the next 1/100 of 1%) most recently estimated by the

Agent as the then current net annual assessment rate that will be employed in

determining amounts payable by the Agent to the Federal Deposit Insurance

Corporation (or any successor) for insurance by such Corporation (or any

successor) of time deposits made in dollars at the Agent's domestic offices.

"Assignment and Acceptance" shall mean an assignment and acceptance

entered into by a Lender and an Eligible Assignee, and accepted by the Agent,

substantially in the form of Exhibit C.

"Bankruptcy Code" shall mean The Bankruptcy Reform Act of 1978, as

heretofore and hereafter amended, and codified as 11 U.S.C. Section 101 et seq.

"Bankruptcy Court" shall mean the United States Bankruptcy Court for

the Southern District of Indiana or any other court having jurisdiction over the

Cases from time to time.

"Board" shall mean the Board of Governors of the Federal Reserve

System of the United States.

"Borrower" shall have the meaning set forth in the Introduction.

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"Borrowing" shall mean the incurrence of Tranche A Loans or of

Tranche B Loans of a single Type made from all the Tranche A Lenders (in the

case of Tranche A Loans) or Tranche B Lenders (in the case of Tranche B Loans),

as the case may be, on a single date and having, in the case of Eurodollar

Loans, a single Interest Period (with any ABR Loan made pursuant to Section 2.16

being considered a part of the related Borrowing of Eurodollar Loans).

"Borrowing Base" shall mean, on any date, an amount (calculated

based on the most recent weekly Borrowing Base Certificate delivered to the

Agent in accordance with this Agreement) that is equal to (i) Gross

Availability, minus (ii) an amount equal to net maritime liabilities to be

determined by the Agent including but not limited to crewman compensation, cargo

claims and claims presented to the Borrower or any Guarantor for damages

incurred by employees or third parties directly associated with freight services

provided minus, (iii) the Necessaries Reserve, minus, (iv) an amount equal to

the estimated costs to complete freight services in process as of each Borrowing

Base calculation date, with the method of estimation to be determined by the

Agent, minus (v) other reserves deemed necessary by the Agent, minus (vi) the

Carve-Out. Borrowing Base eligibility standards and reserves, advance rates and

the components of "Gross Availability" (including the amount set forth in

clauses (iii)(A) and (B) of the definition of such term based on updated

appraisals of the Borrower's domestic fleet from time to time) may be fixed and

revised from time to time by the Agent in its exclusive judgment (provided that

advance rates may not be increased, additional asset categories may not be added

to the Borrowing Base and eligibility standards and reserves may not be modified

or amended so as to provide the Borrower with increased availability without, in

any such case, the consent of the Super-majority Lenders). Notwithstanding

anything to the contrary set forth herein, no receivables will be included in

the Borrowing Base until all the Existing Receivables Portfolio has been

repurchased by the Borrower or a Guarantor.

"Borrowing Base Certificate" shall mean a certificate substantially

in the form of Exhibit D hereto (with such changes therein as may be required by

the Agent to reflect the components of and reserves against the Borrowing Base

as provided for hereunder from time to time), executed and certified by a

Financial Officer of the Borrower, which shall include appropriate exhibits and

schedules as referred to therein and as provided for in Section 5.08.

"Business Day" shall mean any day other than a Saturday, Sunday or

other day on which banks in the State of New York are required or permitted to

close (and, for a Letter of Credit, other than a day on which the Fronting Bank

issuing such Letter of Credit is closed); provided, however, that when used in

connection with a Eurodollar Loan, the term "Business Day" shall also exclude

any day on which banks are not open for dealings in dollar deposits on the

London interbank market.

"Capital Expenditures" shall mean, for any period, the aggregate of

all expenditures (whether paid in cash and not theretofore accrued or accrued as

liabilities during such period and including that portion of any post-petition

Capitalized Lease which is capitalized on the consolidated balance sheet of the

Borrower and the Guarantors) net of cash amounts received by the Borrower and

the Guarantors from other Persons during such period in reimbursement of Capital

Expenditures made by the Borrower and the Guarantors, excluding interest

capitalized during construction, made by the Borrower and the Guarantors during

such period that, in conformity with GAAP, are required to be included in or

reflected by the property,

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plant, equipment or similar fixed asset accounts reflected in the consolidated

balance sheet of the Borrower and the Guarantors (including equipment which is

purchased simultaneously with the trade-in of existing equipment owned by the

Borrower or any of the Guarantors to the extent of the gross amount of such

purchase price less the book value of the equipment being traded in at such

time), but excluding expenditures made in connection with the replacement or

restoration of assets to the extent reimbursed or financed from (x) insurance

proceeds paid on account of the loss of or the damage to the assets being

replaced or restored or (y) awards of compensation arising from the taking by

condemnation or eminent domain of such assets being replaced.

"Capitalized Lease" shall mean, as applied to any Person, any lease

of property by such Person as lessee which would be capitalized on a balance

sheet of such Person prepared in accordance with GAAP.

"Carve-Out" shall have the meaning set forth in Section 2.23.

"Cases" shall have the meaning set forth in the Introduction.

"Cash Collateralization" shall have the meaning given such term in

Section 2.03(b).

"Change of Control" shall mean (i) the acquisition of ownership,

directly or indirectly, beneficially or of record, by any Person or group

(within the meaning of the Securities Exchange Act of 1934 and the rules of the

Securities and Exchange Commission thereunder as in effect on the date hereof),

of shares representing more than 50% of the aggregate ordinary voting power

represented by the issued and outstanding member interests of Holdings; (ii)

Holdings no longer owning, beneficially and of record, 100% of the issued and

outstanding member interests of the Borrower; or (iii) the occupation of a

majority of the seats (other than vacant seats) on the Board of Managers of the

Borrower by Persons who were neither (A) nominated by the Board of Managers of

the Borrower or Holdings nor (B) appointed by managers so nominated.

"Closing Date" shall mean the date on which this Agreement has been

executed and the conditions precedent to the making of the initial Loans set

forth in Section 4.01 have been satisfied or waived, which date shall occur

promptly upon entry of the Interim Order, but not later than 10 days following

the entry of the Interim Order.

"Code" shall mean the Internal Revenue Code of 1986, as amended from

time to time, and the regulations promulgated and rulings issued thereunder.

"Collateral" shall mean (i) the "Collateral" as defined in the

Security and Pledge Agreement and in the mortgages and/or amendments described

in Section 4.01(d) and (ii) any other collateral granted as security for the

Obligations pursuant to any other Loan Document.

"Commitment" shall mean collectively, the Tranche A Commitments and

the Tranche B Commitments.

"Commitment Fee" shall have the meaning set forth in Section 2.20.

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"Commitment Letter" shall mean that certain Joint Commitment Letter

dated January 29, 2003 among the Initial Lenders, J.P. Morgan Securities Inc.

and the Borrower.

"Commitment Percentage" shall mean at any time, with respect to each

Lender, the percentage obtained by dividing its Commitment at such time by the

Total Commitment at such time.

"Consummation Date" shall mean the date of the substantial

consummation (as defined in Section 1101 of the Bankruptcy Code and which for

purposes of this Agreement shall be no later than the effective date) of a

Reorganization Plan that is confirmed pursuant to an order of the Bankruptcy

Court.

"Dollars" and "$" shall mean lawful money of the United States of

America.

"EBITDA" shall mean, for any period, all as determined in accordance

with GAAP, the consolidated net income (or net loss) of the Borrower and its

Subsidiaries for such period, plus (a) the sum of (i) depreciation expense, (ii)

amortization expense, (iii) other non-cash expenses, (iv) provision for LIFO

adjustment for inventory valuation, (v) net total Federal, state and local

income tax expense, (vi) gross interest expense for such period less gross

interest income for such period, (vii) extraordinary losses, (viii) any

non-recurring charge or restructuring charge, (ix) the cumulative effect of any

change in accounting principles, (x) "Chapter 11 expenses" (or "administrative

costs reflecting Chapter 11 expenses") as shown on the Borrower's consolidated

statement of income for such period and (xi) to the extent not included in such

consolidated net income (or net loss), deferred revenue of the Borrower and the

Guarantors for such period in respect of Jeffboat Sale and Leaseback

Transactions (as hereinafter defined) less (b) the sum of (1) extraordinary

gains and (2) any non-cash income or non-cash gains resulting from previously

deferred revenue in respect of Jeffboat Sale and Leaseback Transactions plus or

minus (c) the amount of cash received or expended in such period in respect of

any amount which, under clause (viii) above, was taken into account in

determining EBITDA for such or any prior period; and for purposes hereof, the

term "Jeffboat Sale and Leaseback Transactions" shall mean the sale by Jeffboat

LLC of barges or other equipment manufactured by Jeffboat LLC or any other

Guarantor to a third party, which barges or other equipment are then leased back

by the Borrower or a Guarantor.

"Eligible Accrued Receivables" shall mean any unbilled Account,

without duplication, that has been estimated by the Borrower for accrued revenue

related to freight services which is not an Account that is otherwise described

in clause (a) through (q) in the definition of Eligible Receivable.

"Eligible Assignee" shall mean (i) a commercial bank having total

assets in excess of $1,000,000,000; (ii) a finance company, insurance company or

other financial institution or fund, in each case reasonably acceptable to the

Agent, which in the ordinary course of business extends credit of the type

contemplated herein and has total assets in excess of $200,000,000 and whose

becoming an assignee would not constitute a prohibited transaction under Section

4975 of ERISA; (iii) a Lender Affiliate of the assignor Lender; and (iv) any

other financial institution satisfactory to the Borrower and the Agent.

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"Eligible Receivables" shall mean, at the time of any determination

thereof, each Account (other than an Eligible Accrued Receivable) that satisfies

the following criteria at the time of creation and continues to meet the same at

the time of such determination: such Account (i) has been invoiced to, and

represents the bona fide amounts due to the Borrower or a Guarantor from, the

purchaser of goods or services, in each case originated in the ordinary course

of business of the Borrower or such Guarantor and (ii) is not ineligible for

inclusion in the calculation of the Borrowing Base pursuant to any of clauses

(a) through (q) below or otherwise deemed by the Agent in its sole discretion to

be ineligible for inclusion in the calculation of the Borrowing Base as

described below. Without limiting the foregoing, to qualify as an Eligible

Receivable, an Account shall indicate no person other than the Borrower or a

Guarantor as payee or remittance party. In determining the amount to be so

included, the face amount of an Account shall be reduced by, without

duplication, to the extent not reflected in such face amount, (i) the amount of

all accrued and actual discounts, claims, credits or credits pending,

promotional program allowances, price adjustments, finance charges or other

allowances (including any amount that the Borrower or the Guarantor, as

applicable, may be obligated to rebate to a customer pursuant to the terms of

any agreement or understanding (written or oral)), (ii) the aggregate amount of

all limits and deductions provided for in this definition and elsewhere in this

Agreement and (iii) the aggregate amount of all cash received in respect of such

Account but not yet applied by the Borrower or the Guarantor, to reduce the

amount of such Account. Standards of eligibility may be fixed from time to time

solely by the Agent in the exercise of its exclusive judgement, with any changes

in such standards to be effective three (3) days after delivery of notice

thereof to the Borrower. Unless otherwise approved from time to time in writing

by the Agent, no Account shall be an Eligible Receivable if, without

duplication:

(a) the Borrower or the relevant Guarantor does not have sole lawful

and absolute title to such Account; or

(b) the Account (i) is unpaid more than 90 days from the original

date of invoice or 60 days from the original due date or (ii) has been written

off the books of the Borrower or the applicable Guarantor or has been otherwise

designated on such books as uncollectible; or

Debtor are ineligible pursuant to clause (b) above; or

(d) the Account Debtor is insolvent or the subject of any bankruptcy

case or insolvency proceeding of any kind; or

(e) the Account is not payable in Dollars or the Account Debtor is

either not organized under the laws of the United States of America, any state

thereof, or the District of Columbia or is located outside or has its principal

place of business or substantially all of its assets outside the United States;

(f) the Account Debtor is the United States of America or any

department, agency or instrumentality thereof, unless the Borrower or the

relevant Guarantor duly assigns its rights to payment of such Account to the

Agent pursuant to the Assignment of Claims Act of

<PAGE>

1940, as amended, which assignment and related documents and filings shall be in

form and substance satisfactory to the Agent; or

(g) the Account is subject to any adverse security, progress

payment, retainage or other similar advance made by or for the benefit of the

applicable Account Debtor, in each case to the extent thereof; or

(h) the Account (i) is not subject to a valid and perfected first

priority Lien in favor of the Agent for the benefit of the Lenders, subject to

no other Liens other than Liens (if any) permitted by the Loan Documents or (ii)

does not otherwise conform in all material respects to the representations and

warranties contained in the Loan Documents relating to Accounts; or

(i) such Account was invoiced (i) in advance of goods or services

provided, or (ii) more than once, or (iii) the associated income has not been

earned; or

(j) the Account is a non-trade Account, or relates to payments for

interest; or

(k) the sale to the Account Debtor is a guarantee sale,

sale-and-return, ship-and-return, sale on approval , extended terms, or other

similar basis; or

(l) the Account represents a progress-billing or otherwise does not

represent a complete sale; for purposes hereof, `progress-billing" means any

invoice for services rendered under a contract or agreement pursuant to which

the Account Debtor's obligation to pay such invoice is conditioned upon the

Borrower or the relevant Guarantor's completion of any further performance under

the contract or agreement; or

(m) it arises out of a sale made by the Borrower or a Guarantor to

an employee, officer, agent, director, stockholder, or Affiliate of the Borrower

or a Guarantor; or

(n) such Account was not paid in full, and the Borrower or the

relevant Guarantor created a new receivable for the unpaid portion of the

Account, and other Accounts constituting chargebacks, debit memos and other

adjustments for unauthorized deductions; or

(o) the Account Debtor (i) is a creditor, (ii) has or has asserted a

right of set-off against the Borrower or the relevant Guarantor (unless such

Account Debtor has entered into a written agreement reasonably acceptable to the

Agent to waive such set-off rights) or (iii) has disputed its liability (whether

by chargeback or otherwise) or made any asserted or unasserted claim with

respect to the Account or any other Account of the Borrower or a Guarantor which

has not been resolved, in each case, without duplication, to the extent of the

amount owed by the Borrower or such Guarantor to the Account Debtor, the amount

of such actual or asserted right of set-off, or the amount of such dispute or

claim, as the case may be; or

(p) the Account does not comply in all material respects with the

requirements of all applicable laws and regulations, whether Federal, state or

local, including without limitation the Federal Consumer Credit Protection Act,

the Federal Truth in Lending Act and Regulation Z of the Board; or

<PAGE>

(q) as to all or any part of such Account, a check promissory note,

draft, trade acceptance or other instrument for the payment of money has been

received, presented for payment and returned uncollected for any reason.

Notwithstanding the forgoing, all Accounts of any single Account Debtor and its

affiliates which, in the aggregate exceed (i) 15% in respect of an Account

Debtor whose securities are rated investment grade by any of Moody's or S & P

with the exception of Cargill Corporation which shall be limited to 25% provided

it is investment grade or (ii) 5% in respect of all other Account Debtors, of

the total amount of all Eligible Receivables together with Eligible Accrued

Receivables at the time of any determination shall be deemed not to be Eligible

Receivables or Eligible Accrued Receivables to the extent of such excess. In

determining the aggregate amount from the same Account Debtor that is unpaid

more than 90 days from the date of invoice or more than 60 days from the due

date pursuant to clause (b), above there shall be excluded the amount of any net

credit balances relating to Accounts with invoice dates more than 90 days from

the date of invoice or more than 60 days from the due date.

"Environmental Lien" shall mean a Lien in favor of any Governmental

Authority for (i) any liability under federal or state environmental laws or

regulations, or (ii) damages arising from or costs incurred by such Governmental

Authority in response to a release or threatened release of a hazardous or toxic

waste, substance or constituent, or other substance into the environment.

"ERISA" shall mean the Employee Retirement Income Security Act of

1974, as amended from time to time, and the regulations promulgated and rulings

issued thereunder.

"ERISA Affiliate" shall mean each person (as defined in Section 3(9)

of ERISA) which together with the Borrower or a Subsidiary of the Borrower would

be deemed to be a single employer within the meaning of Section 414(b), (c), (m)

or (o) of the Code.

"Eurocurrency Liabilities" shall have the meaning assigned thereto

in Regulation D issued by the Board, as in effect from time to time.

"Eurodollar Borrowing" shall mean a Borrowing comprised of

Eurodollar Loans.

"Eurodollar Loan" shall mean any Loan bearing interest at a rate

determined by reference to the Adjusted LIBOR Rate in accordance with the

provisions of Section 2.

"Event of Default" shall have the meaning given such term in Section

"Excluded Taxes" means, with respect to the Agent, any Lender, the

Fronting Bank or any other recipient of any payment to be made by or on account

of any obligation of the borrower hereunder, (a) income or franchise taxes

imposed on (or measured by) its net income by the United States of America, or

by the jurisdiction under the laws of which such recipient is organized or in

which its principal office is located or, in the case of any Lender, in which

its applicable lending office is located, (b) any branch profits taxes imposed

by the United States of America or any similar tax imposed by any other

jurisdiction in which the Borrower is located and (c) in the case of a Foreign

Bank, any withholding tax that is imposed on amounts payable to such Foreign

Bank at the time such Foreign Bank becomes a party to this Agreement (or

<PAGE>

designates a new lending office) or is attributable to such Foreign Bank's

failure to comply with Section 2.18(e), except to the extent that such Foreign

Bank (or its assignor, if any) was entitled, at the time of designation of a new

lending office (or assignment), to receive additional amounts from the Borrower

with respect to such withholding tax pursuant to Section 2.18(a).

"Existing Agreement" shall have the meaning set forth in the

Introductory Statement and shall include all of the agreements granting security

interests and Liens in property and assets of the Borrower and the Guarantors to

the Existing Lenders.

"Existing Lenders" shall mean, collectively, the lenders under the

Existing Agreement, together with any successors or assigns thereof.

"Existing Receivables Portfolio" shall mean the portfolio of

prepetition receivables and related assets previously sold to American

Commercial Lines Funding Corporation ("ACLFC") and in existence on the date of

the commencement of the Cases.

"Fees" shall collectively mean the Commitment Fees, Letter of Credit

Fees and other fees referred to in Sections 2.19, 2.20 and 2.21.

"Filing Date" shall mean January 31, 2003.

"Final Order" shall have the meaning given such term in Section

4.02(d).

"Financial Officer" shall mean the Chief Financial Officer,

Controller or Treasurer of the Borrower.

"Fronting Bank" shall mean JPMorgan Chase (or any of its banking

affiliates) or such other Lender (which other Lender shall be reasonably

satisfactory to the Borrower) as may agree with JPMorgan Chase to act in such

capacity.

"Foreign Lender" means any Lender that is organized under the laws

of a jurisdiction other than that in which the Borrower is located. For purposes

of this definition, the United States of America, each State thereof and the

District of Columbia shall be deemed to constitute a single jurisdiction.

"GAAP" shall mean generally accepted accounting principles applied

in accordance with Section 1.02.

"Governmental Authority" shall mean any Federal, state, municipal or

other governmental department, commission, board, bureau, agency or

instrumentality or any court, in each case whether of the United States or

foreign.

"Gross Availability" shall mean an amount equal to the sum of (i)

85% of Eligible Receivables in which the Agent holds a first priority Lien, plus

(ii) 50% of Eligible Accrued Receivables in which the Agent holds a first

priority Lien, plus (iii) an amount in respect of Eligible Vessels equal to (A)

during the period from the Closing Date through June 30, 2003, the lesser of (1)

$55 million and

<PAGE>

(2) 125% of all Gross Domestic Receivables in which the Agent holds a first

priority Lien and (B) from and after July 1, 2003, the lesser of (1) $55 million

and (2) 100% of all Gross Domestic Receivables in which the Agent holds a first

priority Lien. "Eligible Vessels" shall mean towboats, barges and other vessels

that (i) are owned by the Borrower or a Guarantor, (ii) are registered with the

United States Coast Guard, (iii) are subject to the Lien in favor of the Agent

described in Section 2.23(a)(iv) and (iv) operate exclusively in domestic

waters.

"Gross Domestic Receivable" shall mean any Account that has been

invoiced and represents the sale of merchandise and/or provision of services in

the ordinary course of business in connection with the Borrower's and

Guarantors' domestic operations.

"Guarantor" shall have the meaning set forth in the Introduction.

"Indebtedness" shall mean, at any time and with respect to any

Person, (i) all indebtedness of such Person for borrowed money, (ii) all

indebtedness of such Person for the deferred purchase price of property or

services (other than property, including inventory, and services purchased, and

expense accruals and deferred compensation items arising, in the ordinary course

of business), (iii) all obligations of such Person evidenced by notes, bonds,

debentures or other similar instruments (other than performance, surety and

appeal bonds arising in the ordinary course of business), (iv) 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), (v)

all obligations of such Person under Capitalized Leases, (vi) all reimbursement,

payment or similar obligations of such Person, contingent or otherwise, under

acceptance, letter of credit or similar facilities and all obligations of such

Person in respect of (x) currency swap agreements, currency future or option

contracts and other similar agreements designed to hedge against fluctuations in

foreign interest rates and (y) interest rate swap, cap or collar agreements and

interest rate future or option contracts; (vii) all Indebtedness referred to in

clauses (i) through (vi) above guaranteed directly or indirectly by such Person,

or in effect guaranteed directly or indirectly by such Person through an

agreement (A) to pay or purchase such Indebtedness or to advance or supply funds

for the payment or purchase of such Indebtedness, (B) to purchase, sell or lease

(as lessee or lessor) 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 in respect of such

Indebtedness, (C) to supply funds to or in any other manner invest in the debtor

(including any agreement to pay for property or services irrespective of whether

such property is received or such services are rendered) or (D) otherwise to

assure a creditor against loss in respect of such Indebtedness, and (viii) all

Indebtedness referred to in clauses (i) through (vii) 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, without

limitation, accounts and contract rights) owned by such Person, even though such

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

"Initial Lenders" means the Lenders party hereto on the date hereof.

"Indemnified Taxes" means Taxes other than Excluded Taxes.

<PAGE>

"Insufficiency" shall mean, with respect to any Plan, its "amount of

unfunded benefit liabilities" within the meaning of Section 4001(a)(18) of

ERISA, if any.

"Interim Order" shall have the meaning given such term in Section

4.01(b).

"Interest Payment Date" shall mean (i) as to any Eurodollar Loan,

the last day of each consecutive 30 day period running from the commencement of

the applicable Interest Period, and (ii) as to all ABR Loans, the last calendar

day of each month and the date on which any ABR Loans are refinanced with

Eurodollar Loans pursuant to Section 2.12.

"Interest Period" shall mean, as to any Borrowing of Eurodollar

Loans, the period commencing on the date of such Borrowing (including as a

result of a refinancing of ABR Loans) or on the last day of the preceding

Interest Period applicable to such Borrowing and ending on the numerically

corresponding day (or if there is no corresponding day, the last day) in the

calendar month that is one or three months thereafter, as the Borrower may elect

in the related notice delivered pursuant to Sections 2.06(b) or 2.12; provided,

however, that (i) if any Interest Period would end on a day which shall not be a

Business Day, such Interest Period shall be extended to the next succeeding

Business Day unless such next succeeding Business Day would fall in the next

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

preceding Business Day, and (ii) no Interest Period shall end later than the

Termination Date.

"Investments" shall have the meaning given such term in Section

6.10.

"JPMorgan Chase" shall have the meaning set forth in the

Introduction.

"Lender Affiliate" means, (a) with respect to any Lender, (i) an

Affiliate of such Lender or (ii) any entity (whether a corporation, partnership,

trust or otherwise) that is engaged in making, purchasing, holding or otherwise

investing in bank loans and similar extensions of credit in the ordinary course

of its business and is administered or managed by a Lender or an Affiliate of

such Lender and (b) with respect to any Lender that is a fund which invests in

bank loans and similar extensions of credit, any other fund that invests in bank

loans and similar extensions of credit and is managed by the same investment

advisor as such Lender or by an Affiliate of such investment advisor.

"Lenders" shall have the meaning set forth in the Introduction.

"Letter of Credit" shall mean any irrevocable letter of credit

issued pursuant to Section 2.03, which letter of credit shall be (i) a standby

letter of credit, (ii) issued for purposes that are consistent with the ordinary

course of business of the Borrower or any Guarantor, or for such other purposes

as are reasonably acceptable to the Agent, (iii) denominated in Dollars and (iv)

otherwise in such form as may be reasonably approved from time to time by the

Agent and the applicable Fronting Bank.

"Letter of Credit Account" shall mean the account established by the

Borrower under the sole and exclusive control of the Agent maintained at the

office of the Agent at 270 Park Avenue, New York, New York 10017 designated as

the "Letter of Credit Account" that shall be used solely for the purposes set

forth in Section 2.03(b) and 2.13.

<PAGE>

"Letter of Credit Fees" shall mean the fees payable in respect of

Letters of Credit pursuant to Section 2.21.

"Letter of Credit Outstandings" shall mean, at any time, the sum of

(i) the aggregate undrawn stated amount of all Letters of Credit then

outstanding plus (ii) all amounts theretofore drawn under Letters of Credit and

not then reimbursed.

"Lien" shall mean any mortgage, pledge, security interest,

encumbrance, lien or charge of any kind whatsoever (including any conditional

sale or other title retention agreement or any lease in the nature thereof).

"Loan" shall mean a Tranche A Loan or a Tranche B Loan.

"Loans" shall mean the Tranche A Loans and the Tranche B Loans,

collectively.

"Loan Documents" shall mean this Agreement, the Letters of Credit,

the Security and Pledge Agreement, the Mortgage, and any other instrument or

agreement executed and delivered to the Agent or any Lender in connection

herewith.

"Maturity Date" shall mean July 31, 2004.

"Mortgage" shall have the meaning set forth in Section 4.01(d).

"Multiemployer Plan" shall mean a "multiemployer plan" as defined in

Section 4001(a)(3) of ERISA, which is maintained or contributed to by (or to

which there is an obligation to contribute of) the Borrower or a Subsidiary of

the Borrower or an ERISA Affiliate, and each such plan for the five-year period

immediately following the latest date on which the Borrower, or a Subsidiary of

the Borrower or an ERISA Affiliate maintained, contributed to or had an

obligation to contribute to such plan.

"Multiple Employer Plan" shall mean a Single Employer Plan, which

(i) is maintained for employees of the Borrower or an ERISA Affiliate and at

least one person (as defined in Section 3(9) of ERISA) other than the Borrower

and its ERISA Affiliates or (ii) was so maintained and in respect of which the

Borrower or an ERISA Affiliate could have liability under Section 4064 or 4069

of ERISA in the event such Plan has been or were to be terminated.

"Necessaries Reserve" shall mean a reserve that is considered by the

Agent in its discretion to be reasonably needed for liabilities arising prior to

the recordation of the Mortgage related to supplies or services which are for

ongoing operations which include but are not limited to shipping services,

towing services, repairs, cleaning and rigging services, fuel expenses,

supplies, and the use of a dry dock or marine railway.

"Obligations" shall mean (a) the due and punctual payment of

principal of and interest on the Loans and the reimbursement of all amounts

drawn under Letters of Credit, and (b) the due and punctual payment of the Fees

and all other present and future, fixed or contingent, monetary obligations of

the Borrower and the Guarantors to the Lenders and the Agent under the Loan

Documents and as permitted by Section 6.03(v).

<PAGE>

"Orders" shall mean the Interim Order and the Final Order of the

Bankruptcy Court referred to in Sections 4.01(b) and 4.02(d).

"Other Taxes" means any and all present or future stamp or

documentary taxes or any other excise or property taxes, charges or similar

levies arising from any payment made hereunder or from the execution, delivery

or enforcement of, or otherwise with respect to, this Agreement.

"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any

successor agency or entity performing substantially the same functions.

"Pension Plan" shall mean a defined benefit plan (as defined in

Section 414(j) of the Code and Section 3(35) of ERISA) which meets and is

subject to the requirements of Section 401(a) of the Code.

"Permitted Investments" shall mean:

(a) direct obligations of, or obligations the principal of and

interest on which are unconditionally guaranteed by, the United States of

America (or by any agency thereof to the extent such obligations are backed by

the full faith and credit of the United States of America), in each case

maturing within twelve months from the date of acquisition thereof;

(b) without limiting the provisions of paragraph (d) below,

investments in commercial paper maturing within six months from the date of

acquisition thereof and having, at such date of acquisition, a rating of at

least "A-2" or the equivalent thereof from Standard & Poor's Corporation or of

at least "P-2" or the equivalent thereof from Moody's Investors Service, Inc.;

time deposits (including Eurodollar time deposits) maturing within six months

from the date of acquisition thereof issued or guaranteed by or placed with (i)

any domestic office of the Agent or the bank with whom the Borrower and the

Guarantors maintain their cash management system, provided, that if such bank is

not a Lender hereunder, such bank shall have entered into an agreement with the

Agent pursuant to which such bank shall have waived all rights of setoff and

confirmed that such bank does not have, nor shall it claim, a security interest

therein or (ii) any domestic office of any other commercial bank of recognized

standing organized under the laws of the United States of America or any State

thereof that has a combined capital and surplus and undivided profits of not

less than $250,000,000 and is the principal banking Subsidiary of a bank holding

company having a long-term unsecured debt rating of at least "A-2" or the

equivalent thereof from Standard & Poor's Corporation or at least "P-2" or the

equivalent thereof from Moody's Investors Service, Inc.;

(d) investments in commercial paper maturing within six months from

the date of acquisition thereof and issued by (i) the holding company of the

Agent or (ii) the holding company of any other commercial bank of recognized

standing organized under the laws of the United States of America or any State

thereof that has (A) a combined capital and surplus in excess of $250,000,000

and (B) commercial paper rated at least "A-2" or the equivalent thereof

<PAGE>

from Standard & Poor's Corporation or of at least "P-2" or the equivalent

thereof from Moody's Investors Service, Inc.;

(e) investments in repurchase obligations with a term of not more

than seven days for underlying securities of the types described in clause (a)

above entered into with any office of a bank or trust company meeting the

qualifications specified in clause (c) above;

(f) investments in money market funds substantially all the assets

of which are comprised of securities of the types described in clauses (a)

through (e) above; and

(g) to the extent owned on the Filing Date, investments by the

Borrower or any Guarantor in the capital stock or membership interests of any

direct or indirect Subsidiary.

"Permitted Liens" shall mean (i) Liens imposed by law (other than

Environmental Liens and any Lien imposed under ERISA) for taxes, assessments or

charges of any Governmental Authority for claims not yet due or which are being

contested in good faith by appropriate proceedings and with respect to which

adequate reserves or other appropriate provisions are being maintained in

accordance with GAAP; (ii) Liens of landlords and Liens of carriers,

warehousemen, mechanics, materialmen and other Liens (other than Environmental

Liens and any Lien imposed under ERISA) in existence on the Filing Date or

thereafter imposed by law and created in the ordinary course of business; (iii)

Liens that are permitted by the Mortgage (or, prior to the execution of the

Mortgage, by the preferred fleet mortgages delivered pursuant to the Existing

Agreement); (iv) Liens (other than any Lien imposed under ERISA) incurred or

deposits made in the ordinary course of business (including, without limitation,

surety bonds and appeal bonds) in connection with workers' compensation,

unemployment insurance and other types of social security benefits or to secure

the performance of tenders, bids, leases, contracts (other than for the

repayment of Indebtedness), statutory obligations and other similar obligations

or arising as a result of progress payments under government contracts; (v)

easements (including, without limitation, reciprocal easement agreements and

utility agreements), rights-of-way, covenants, consents, reservations,

encroachments, variations and zoning and other restrictions, charges or

encumbrances (whether or not recorded) and interest of ground lessors, which do

not interfere materially with the ordinary conduct of the business of the

Borrower or any Guarantor, as the case may be, and which do not materially

detract from the value of the property to which they attach or materially impair

the use thereof to the Borrower or any Guarantor, as the case may be; (vi)

letters of credit or deposits in the ordinary course to secure leases; and (vii)

extensions, renewals or replacements of any Lien referred to in paragraphs (i)

through (vi) above, provided that the principal amount of the obligation secured

thereby is not increased and that any such extension, renewal or replacement is

limited to the property originally encumbered thereby.

"Person" shall mean any natural person, corporation, division of a

corporation, limited liability company, partnership, trust, joint venture,

association, company, estate, unincorporated organization or government or any

agency or political subdivision thereof.

"Plan" shall mean a Single Employer Plan or a Multiemployer Plan.

<PAGE>

"Prepayment Date" shall mean forty-five (45) days after the entry of

the Interim Order by the Bankruptcy Court if the Final Order has not been

entered by the Bankruptcy Court prior to the expiration of such forty-five (45)

day period.

"Pre-Petition Agent" shall mean JPMorgan Chase Bank as agent for the

Existing Lenders.

"Pre-Petition Payment" shall mean a payment (by way of adequate

protection or otherwise) of principal or interest or otherwise on account of any

pre-petition Indebtedness or trade payables or other pre-petition claims against

the Borrower or any Guarantor.

"Register" shall have the meaning set forth in Section 10.03(d).

"Reorganization Plan" shall mean a plan of reorganization in any of

the Cases.

"Required Lenders" shall mean, at any time, Lenders holding in

excess of 50% of the overall Commitments and the aggregate principal amount of

Loans outstanding.

"Security and Pledge Agreement" shall have the meaning set forth in

Section 4.01(c).

"Single Employer Plan" shall mean a single employer plan, as defined

in Section 4001(a)(15) of ERISA, that (i) is maintained for employees of the

Borrower or an ERISA Affiliate or (ii) was so maintained and in respect of which

the Borrower could have liability under Title IV of ERISA in the event such Plan

has been or were to be terminated.

"Statutory Reserves" shall mean on any date the percentage

(expressed as a decimal) established by the Board and any other banking

authority which is (i) for purposes of the definition of Base CD Rate, the then

stated maximum rate of all reserves (including, but not limited to, any

emergency, supplemental or other marginal reserve requirement) for a member bank

of the Federal Reserve System in New York City, for new three month negotiable

nonpersonal time deposits in dollars of $100,000 or more or (ii) for purposes of

the definition of Adjusted LIBOR Rate, the then stated maximum rate for all

reserves (including but not limited to any emergency, supplemental or other

marginal reserve requirements) applicable to any member bank of the Federal

Reserve System in respect of Eurocurrency Liabilities (or any successor category

of liabilities under Regulation D issued by the Board, as in effect from time to

time). Such reserve percentages shall include, without limitation, those imposed

pursuant to said Regulation. The Statutory Reserves shall be adjusted

automatically on and as of the effective date of any change in such percentage.

"Subsidiary" shall mean, with respect to any Person (herein referred

to as the "parent"), any corporation, association or other business entity

(whether now existing or hereafter organized) of which at least a majority of

the securities or other ownership interests having ordinary voting power for the

election of directors or managers is, at the time as of which any determination

is being made, owned or controlled by the parent or one or more subsidiaries of

the parent or by the parent and one or more subsidiaries of the parent.

<PAGE>

"Super-majority Lenders" shall have the meaning given such term in

Section 10.10(b).

"Superpriority Claim" shall mean a claim against the Borrower and

any Guarantor in any of the Cases which is an administrative expense claim

having priority over any or all administrative expenses of the kind specified in

Sections 503(b) or 507(b) of the Bankruptcy Code.

"Taxes" means any and all present or future taxes, levies, imposts,

duties, deductions, charges or withholdings imposed by any Governmental

Authority.

"Termination Date" shall mean the earliest to occur of (i) the

Prepayment Date, (ii) the Maturity Date, (iii) the Consummation Date and (iv)

the acceleration of the Loans and the termination of the Total Commitment in

accordance with the terms hereof.

"Termination Event" shall mean (i) a "reportable event", as such

term is described in Section 4043(c) of ERISA (other than a "reportable event"

as to which the 30-day notice is waived under subsection .22, .23, .25, .27 or

.28 of PBGC Regulation Section 4043) or an event described in Section 4068 of

ERISA and excluding events which would not be reasonably likely (as reasonably

determined by the Agent) to have a material adverse effect on the financial

condition, operations, business, properties or assets of the Borrower and the

Guarantors taken as a whole, or (ii) the withdrawal of the Borrower or any ERISA

Affiliate from a Multiple Employer Plan during a plan year in which it was a

"substantial employer," as such term is defined in Section 4001(a)(2) of ERISA,

the incurrence of liability by the Borrower or any ERISA Affiliate under Section

4064 of ERISA upon the termination of a Multiple Employer Plan, the imposition

of Withdrawal Liability, or (iii) providing notice of intent to terminate a Plan

pursuant to Section 4041(c) of ERISA or the treatment of a Plan amendment as a

termination under Section 4041 of ERISA, if such amendment requires the

provision of security, or (iv) the institution of proceedings to terminate a

Plan by the PBGC under Section 4042 of ERISA, or (v) any other event or

condition (other than the commencement of the Cases and the failure to have made

any contribution accrued as of the Filing Date but not paid) which would

reasonably be expected to constitute grounds under Section 4042 of ERISA for the

termination of, or the appointment of a trustee to administer, any Plan, or the

imposition of any liability under Title IV of ERISA (other than for the payment

of premiums to the PBGC in the ordinary course).

"Total Commitment" shall mean, at any time, the sum of the Total

Tranche A Commitments and the Total Tranche B Commitments at such time.

"Total Exposure" shall mean, at any time, the sum of (i) the Total

Tranche A Commitment and (ii) the aggregate outstanding principal amount of the

Term Loans.

"Total Tranche A Commitment" shall mean, at any time, the sum of the

Tranche A Commitments at such time.

"Total Tranche B Commitment" shall mean, at any time, the sum of the

Tranche B Commitments at such time.

<PAGE>

"Tranche A Commitment" shall mean the commitment of each Tranche A

Lender to make Tranche A Loans hereunder in the amount set forth opposite its

name on Annex A hereto or as may subsequently be set forth in the Register from

time to time, as the same may be reduced from time to time pursuant to Section

2.10 and Section 2.13.

"Tranche A Commitment Percentage" shall mean at any time, with

respect to each Tranche A Lender, the percentage obtained by dividing its

Tranche A Commitment at such time by the Total Tranche A Commitment at such

time.

"Tranche A Lender" shall mean each Lender having a Tranche A

Commitment.

"Tranche A Letters of Credit" shall have the meaning set forth in

Section 2.03(a).

"Tranche A Loans" shall have the meaning set forth in Section

2.01(a).

"Tranche A Obligations" shall mean (a) the due and punctual payment

of principal of and interest on the Tranche A Loans and the reimbursement of all

amounts drawn under Letters of Credit and (b) the due and punctual payment of

the fees and all other present and future, fixed or contingent, monetary

obligations of the Borrower and the Guarantors payable to the Agent and the

Tranche A Lenders under the Loan Documents.

"Tranche B Commitment" shall mean the commitment of each Tranche B

Lender to make Tranche B Loans hereunder.

"Tranche B Commitment Percentage" shall mean at any time, with

respect to each Tranche B Lender, the percentage obtained by dividing its

Tranche B Commitment at such time by the Total Tranche B Commitment at such

time.

"Tranche B Lender" shall mean each Lender having a Tranche B

Commitment.

"Tranche B Loans" shall have the meaning set forth in Section

2.01(c).

"Tranche B Obligations" shall mean (a) the due and punctual payment

of principal of and interest on the Tranche B Loans and (b) the due and punctual

payment of the fees and all other present and future, fixed or contingent,

monetary obligations of the Borrower and the Guarantors payable to the Agent and

the Tranche B Lenders under the Loan Documents.

"Transferee" shall have the meaning given such term in Section 2.18.

"Type" when used in respect of any Loan or Borrowing shall refer to

the Rate of interest by reference to which interest on such Loan or on the Loans

comprising such Borrowing is determined. For purposes hereof, "Rate" shall mean

the Adjusted LIBOR Rate and the Alternate Base Rate.

"Unused Total Commitment" shall mean, at any time, (i) the Total

Commitment less (ii) the sum of (x) the aggregate outstanding principal amount

of all Loans and (y) the aggregate Letter of Credit Outstandings.

<PAGE>

"Unused Total Tranche A Commitment" shall mean, at any time, (i) the

Total Tranche A Commitments less (ii) the sum of (x) the aggregate outstanding

principal amount of all Tranche A Loans and (y) the aggregate Letter of Credit

Outstandings.

"Withdrawal Liability" shall have the meaning given such term under

Part I of Subtitle E of Title IV of ERISA.

SECTION 1.02 TERMS GENERALLY. The definitions in Section 1.01 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. 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. Except as

otherwise expressly provided herein, all terms of an accounting or financial

nature shall be construed in accordance with GAAP, as in effect from time to

time; provided, however, that for purposes of determining compliance with any

covenant set forth in Section 6, such terms shall be construed in accordance

with GAAP as in effect on the date of this Agreement applied on a basis

consistent with the application used in the Borrower's audited financial

statements referred to in Section 3.04. Terms that are defined in the Uniform

Commercial Code of the State of New York shall have the same meaning herein

unless otherwise defined herein.

SECTION 2. AMOUNT AND TERMS OF CREDIT

SECTION 2.01 COMMITMENTS OF THE LENDERS.

(a) Each Tranche A Lender severally and not jointly with the other

Tranche A Lenders agrees, upon the terms and subject to the conditions herein

set forth (including, without limitation, the provisions of Section 2.28), to

make revolving credit loans (each a "Tranche A Loan" and collectively, the

"Tranche A Loans") to the Borrower at any time and from time to time during the

period commencing on the date hereof and ending on the Termination Date in an

aggregate principal amount not to exceed, when added to such Lender's Tranche A

Commitment Percentage of the then aggregate Letter of Credit Outstandings (in

excess of the amount of cash then held in the Letter of Credit Account pursuant

to Section 2.03(b)), the Tranche A Commitment of such Lender, which Tranche A

Loans may be repaid and reborrowed in accordance with the provisions of this

Agreement. At no time shall the sum of the then outstanding aggregate principal

amount of the Tranche A Loans plus the then aggregate Letter of Credit

Outstandings exceed the lesser of (i) the Total Tranche A Commitment of up to

$25,000,000, as the same may be reduced from time to time pursuant to Section

2.10 and Section 2.13 and (ii) the amount by which the Borrowing Base exceeds

the Tranche B Obligations.

(b) Each Borrowing comprising a Tranche A Loan shall be made by the

Tranche A Lenders pro rata in accordance with their respective Tranche A

Commitments; provided, however, that the failure of any Tranche A Lender to make

any Tranche A Loan shall not in itself relieve the other Tranche A Lenders of

their obligations to lend.

Tranche B Lenders agrees, upon the terms and subject to the conditions herein

set forth, to make available to the Borrower, one or more term loans in an

aggregate amount equal to such Lender's Tranche

<PAGE>

B Commitment (the "Tranche B Loans"), which Tranche B Loans, once repaid, may

not be reborrowed. At no time shall the sum of the then outstanding aggregate

principal amount of Tranche B Loans exceed the Total Tranche B Commitment of up

to $50,000,000, as the same may be reduced from time to time pursuant to Section

2.10 and Section 2.13.

(d) If the aggregate Commitments of the Initial Lenders, as set

forth on Annex A, is less than the amount of $75,000,000, then the Borrower

shall not be entitled to borrow in excess of the total of Commitments set forth

on Annex A as of the date hereof until such time as additional financial

institutions shall have become Lenders party hereto and shall have provided

additional Commitments such that the amount of the Total Commitments shall be in

excess of the Commitments of the Initial Lenders.

SECTION 2.02 BORROWING BASE. Notwithstanding any other provision of this

Agreement to the contrary, the aggregate principal amount of all outstanding

Tranche A Loans plus Tranche B Loans plus the then aggregate Letter of Credit

Outstandings (in excess of the amount of cash then held in the Letter of Credit

Account pursuant to Section 2.03(c)) shall not at any time exceed the Borrowing

Base and no Loan shall be made or Letter of Credit issued in violation of the

foregoing, provided that prior to the repurchase of the Existing Receivables

Portfolio, aggregate extensions of credit hereunder may not exceed $20,000,000

(which shall be in the form of Letters of Credit or Tranche A Loans).

SECTION 2.03 LETTERS OF CREDIT.

(a) Upon the terms and subject to the conditions herein set forth,

the Borrower may request a Fronting Bank, at any time and from time to time

after the date hereof and prior to the Termination Date, to issue, and, subject

to the terms and conditions contained herein, such Fronting Bank shall issue,

for the account of the Borrower or a Guarantor one or more Letters of Credit

(the "Letters of Credit"), provided that no Letter of Credit shall be issued if

after giving effect to such issuance (i) the aggregate Letter of Credit

Outstandings shall exceed $10,000,000, or (ii) the aggregate Letter of Credit

Outstandings, when added to the aggregate outstanding principal amount of the

Tranche A Loans, would exceed the Total Tranche A Commitment and, provided

further that no Letter of Credit shall be issued if the Fronting Bank shall have

received notice from the Agent or the Required Lenders that the conditions to

such issuance have not been met.

(b) No Letter of Credit shall expire later than the Maturity Date,

provided, that if any Letter of Credit shall be outstanding on the Termination

Date, the Borrower shall, at or prior to the Termination Date, except as the

Agent may otherwise agree in writing, (i) cause all Letters of Credit which

expire after the Termination Date to be returned to the Fronting Bank undrawn

and marked "cancelled" or (ii) if the Borrower is unable to do so in whole or in

part, either (x) provide a "back-to-back" letter of credit to one or more

Fronting Banks in a form satisfactory to such Fronting Bank and the Agent (in

their sole discretion), issued by a bank satisfactory to such Fronting Bank and

the Agent (in their sole discretion), and in an amount equal to 105% of the then

undrawn stated amount of all outstanding Letters of Credit issued by such

Fronting Banks (less the amount, if any, then on deposit in the Letter of Credit

Account) or (y) deposit cash in the Letter of Credit Account in an amount equal

to 105% of the then undrawn stated amount of all Letter of Credit Outstandings

(less the amount, if any, then on deposit in the

<PAGE>

Letter of Credit Account) as collateral security for the Borrower's

reimbursement obligations in connection therewith, such cash to be remitted to

the Borrower upon the expiration, cancellation or other termination or

satisfaction of such reimbursement obligations ("Cash Collateralization").

such other fees and charges as are specifically provided for in Section 2.21

hereof, such fees and charges in connection with the issuance and processing of

the Letters of Credit issued by such Fronting Bank as are customarily imposed by

such Fronting Bank from time to time in connection with letter of credit

transactions.

(d) Drafts drawn under each Letter of Credit shall be reimbursed by

the Borrower in Dollars not later than the first Business Day following the date

of draw and shall bear interest from the date of draw until the first Business

Day following the date of draw at a rate per annum (i) equal to the Alternate

Base Rate plus 3% and thereafter on the unreimbursed portion until reimbursed in

full at a rate per annum equal to the Alternate Base Rate plus 5% (computed on

the basis of the actual number of days elapsed over a year of 365 days or 366

days in a leap year). The Borrower shall effect such reimbursement (x) if such

draw occurs prior to the Termination Date, in cash or through a Borrowing of a

Tranche A Loan from the Tranche A Lenders pro rata in accordance with their

Tranche A Commitment Percentage, without the satisfaction of the conditions

precedent set forth in Section 4.02 or (y) if such draw occurs on or after the

Termination Date, in cash. Each Tranche A Lender agrees to make the Tranche A

Loans, described in clause (x) of the preceding sentence notwithstanding a

failure to satisfy the applicable lending conditions thereto or the provisions

of Sections 2.02 or 2.28.

(e) Immediately upon the issuance of any Letter of Credit by any

Fronting Bank, such Fronting Bank shall be deemed to have sold to each Tranche A

Bank (other than such Fronting Bank) and each such other Tranche A Bank shall be

deemed unconditionally and irrevocably to have purchased from such Fronting

Bank, without recourse or warranty, an undivided interest and participation, to

the extent of such Lender's Tranche A Commitment Percentage, in such Letter of

Credit, each drawing thereunder and the obligations of the Borrower and the

Guarantors under this Agreement with respect thereto. Upon any change in the

Tranche A Commitments pursuant to Section 10.03, it is hereby agreed that with

respect to all Letter of Credit Outstandings, there shall be an automatic

adjustment to the participations hereby created to reflect the new Tranche A

Commitment Percentage of the assigning and assignee Lenders. Any action taken or

omitted by a Fronting Bank under or in connection with a Letter of Credit, if

taken or omitted in the absence of gross negligence or willful misconduct, shall

not create for such Fronting Bank any resulting liability to any other Lender.

(f) In the event that a Fronting Bank makes any payment under any

Letter of Credit and the Borrower shall not have reimbursed such amount in full

to such Fronting Bank pursuant to this Section, the Fronting Bank shall promptly

notify the Agent, which shall promptly notify each Tranche A Lender, of such

failure, and each such Tranche A Lender shall promptly and unconditionally pay

to the Agent for the account of the Fronting Bank the amount of such Lender's

Tranche A Commitment Percentage of such unreimbursed payment in Dollars and in

same day funds. If the Fronting Bank so notifies the Agent, and the Agent so

notifies the Tranche A Lenders prior to 11:00 a.m. (New York City time) on any

Business Day, such Lenders shall make available to the Fronting Bank such

Lender's Tranche A Commitment

<PAGE>

Percentage of the amount of such payment on such Business Day in same day funds.

If and to the extent such Lender shall not have so made its Tranche A Commitment

Percentage of the amount of such payment available to the Fronting Bank, such

Lender agrees to pay to such Fronting Bank, forthwith on demand such amount,

together with interest thereon, for each day from such date until the date such

amount is paid to the Agent for the account of such Fronting Bank at the Federal

Funds Effective Rate. The failure of any Lender to make available to the

Fronting Bank its Tranche A Commitment Percentage, of any payment under any

Letter of Credit shall not relieve any other Lender of its obligation hereunder

to make available to the Fronting Bank its Tranche A Commitment Percentage, of

any payment under any Letter of Credit on the date required, as specified above,

but no Lender shall be responsible for the failure of any other Lender to make

available to such Fronting Bank such other Lender's Tranche A Commitment

Percentage of any such payment. Whenever a Fronting Bank receives a payment of a

reimbursement obligation as to which it has received any payments from the

Lenders pursuant to this paragraph, such Fronting Bank shall pay to each Lender

which has paid its Tranche A Commitment Percentage thereof, in Dollars and in

same day funds, an amount equal to such Lender's Tranche A Commitment Percentage

thereof.

SECTION 2.04 ISSUANCE. Whenever the Borrower desires a Fronting Bank to

issue a Letter of Credit, it shall give to such Fronting Bank and the Agent

prior written (including telegraphic, telex, facsimile or cable communication)

notice reasonably in advance of the requested date of issuance specifying the

date on which the proposed Letter of Credit is to be issued (which shall be a

Business Day), the stated amount of the Letter of Credit so requested, the

expiration date of such Letter of Credit and the name and address of the

beneficiary thereof.

SECTION 2.05 NATURE OF LETTER OF CREDIT OBLIGATIONS ABSOLUTE. The

obligations of the Borrower to reimburse the Tranche A Lenders for drawings made

under any Letter of Credit shall be unconditional and irrevocable and shall be

paid strictly in accordance with the terms of this Agreement under all

circumstances, including, without limitation (it being understood that any such

payment by the Borrower shall be without prejudice to, and shall not constitute

a waiver of, any rights the Borrower might have or might acquire as a result of

the payment by the Fronting Bank of any draft or the reimbursement by the

Borrower thereof): (i) any lack of validity or enforceability of any Letter of

Credit; (ii) the existence of any claim, setoff, defense or other right which

the Borrower or any Guarantor may have at any time against a beneficiary of any

Letter of Credit or against any of the Lenders, whether in connection with this

Agreement, the transactions contemplated herein or any unrelated transaction;

(iii) any draft, demand, certificate or other document presented under any

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;

(iv) payment by a Fronting Bank of any Letter of Credit against presentation of

a demand, draft or certificate or other document which does not comply with the

terms of such Letter of Credit; (v) any other circumstance or happening

whatsoever, which is similar to any of the foregoing; or (vi) the fact that any

Event of Default shall have occurred and be continuing.

SECTION 2.06 MAKING OF LOANS.

(a) Except as contemplated by Section 2.11, Tranche A Loans shall be

either ABR Loans or Eurodollar Loans as the Borrower may request subject to and

in accordance with

<PAGE>

this Section, provided that all Tranche A Loans made pursuant to the same

Borrowing shall, unless otherwise specifically provided herein, be Tranche A

Loans of the same Type. Each Tranche A Lender may fulfill its Tranche A

Commitment with respect to any Eurodollar Loan or ABR Loan by causing any

lending office of such Tranche A Lender to make such Tranche A Loan; provided

that any such use of a lending office shall not affect the obligation of the

Borrower to repay such Tranche A Loan in accordance with the terms of this

Agreement. Each Tranche A Lender shall, subject to its overall policy

considerations, use reasonable efforts (but shall not be obligated) to select a

lending office which will not result in the payment of increased costs by the

Borrower pursuant to Section 2.15. Subject to the other provisions of this

Section and the provisions of Section 2.12, Borrowings of Tranche A Loans of

more than one Type may be incurred at the same time, provided that no more than

nine (9) Borrowings of Eurodollar Loans may be outstanding at any time.

(b) The Borrower shall give the Agent prior notice of each Borrowing

hereunder of at least three Business Days for Eurodollar Loans and one Business

Day for ABR Loans; such notice shall be irrevocable and shall specify the amount

of the proposed Borrowing (which shall not be less than $1,000,000 in the case

of Eurodollar Loans and $1,000,000 in the case of ABR Loans) and the date

thereof (which shall be a Business Day) and shall contain disbursement

instructions. Such notice, to be effective, must be received by the Agent not

later than 1:00 p.m., New York City time, on the third Business Day in the case

of Eurodollar Loans and 12:00 noon, New York City time on the first Business Day

in the case of ABR Loans, preceding the date on which such Borrowing is to be

made, provided that same day borrowings of ABR Loans in an aggregate amount of

$10,000,000 will be available if notice is received by the agent no later than

11:00 a.m., New York City time, on such day. With respect to Borrowings other

than same day Borrowings, such notice shall specify whether the Borrowing then

being requested is to be a Borrowing of ABR Loans or Eurodollar Loans. If no

election is made as to the Type of Loan, such notice shall be deemed a request

for Borrowing of ABR Loans. The Agent shall promptly notify each Tranche A

Lender of its proportionate share of such Borrowing, the date of such Borrowing,

the Type of Borrowing or Tranche A Loans being requested and the Interest Period

or Interest Periods applicable thereto, as appropriate. On the borrowing date

specified in such notice, each Tranche A Lender shall make its share of the

Borrowing available at the office of the Agent at 270 Park Avenue, New York, New

York 10017, no later than 12:00 noon, New York City time, in immediately

available funds. Upon receipt of the funds made available by the Tranche A

Lenders to fund any borrowing hereunder, the Agent shall disburse such funds in

the manner specified in the notice of borrowing delivered by the Borrower and

shall use reasonable efforts to make the funds so received from the Tranche A

Lenders available to the Borrower no later than 2:00 p.m. New York City time.

SECTION 2.07 REPAYMENT OF LOANS; EVIDENCE OF DEBT.

(a) The Borrower hereby unconditionally promises to pay to the Agent

for the account of each Lender the then unpaid principal amount of each Loan on

the Termination Date subject to the priorities set forth in Section 2.14.

(b) 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

<PAGE>

each Loan made by such Lender, including the amounts of principal and interest

payable and paid to such Lender from time to time hereunder.

the amount of each Loan made hereunder, the Type thereof and the Interest Period

applicable thereto, (ii) the amount of any principal or interest due and payable

or to become due and payable from the Borrower to each Lender hereunder and

(iii) the amount of any sum received by the Agent hereunder for the account of

the Lenders and each Lender's share thereof.

(d) The entries made in the accounts maintained pursuant to

paragraph (b) or (c) of this Section shall be prima facie evidence of the

existence and amounts of the obligations recorded therein; provided that the

failure of any Lender or the Agent to maintain such accounts or any error

therein shall not in any manner affect the obligation of the Borrower to repay

the Loans in accordance with the terms of this Agreement.

(e) Any Lender may request that Loans made by it be evidenced by a

promissory note. In such event, the Borrower shall execute and deliver to such

Lender a promissory note payable to the order of such Lender (or, if requested

by such Lender, to such Lender and its registered assigns) in a form furnished

by the Agent and reasonably acceptable to the Borrower. Thereafter, the Loans

evidenced by such promissory note and interest thereon shall at all times

(including after assignment pursuant to Section 10.03) be represented by one or

more promissory notes in such form payable to the order of the payee named

therein (or, if such promissory note is a registered note, to such payee and its

registered assigns).

SECTION 2.08 INTEREST ON LOANS.

(a) Subject to the provisions of Section 2.09, each ABR Loan shall

bear interest (computed on the basis of the actual number of days elapsed over a

year of 360 days or, when the Alternate Base Rate is based on the Prime Rate, a

year with 365 days or 366 days in a leap year) at a rate per annum equal to the

Alternate Base Rate plus 3%.

(b) Subject to the provisions of Section 2.09, each Eurodollar Loan

shall bear interest (computed on the basis of the actual number of days elapsed

over a year of 360 days) at a rate per annum equal, during each Interest Period

applicable thereto, to the Adjusted LIBOR Rate for such Interest Period in

effect for such Borrowing plus 4%.

arrears on each Interest Payment Date applicable thereto, on the Termination

Date, after the Termination Date on demand and (with respect to Eurodollar

Loans) upon any repayment or prepayment thereof (on the amount prepaid).

SECTION 2.09 DEFAULT INTEREST. If the Borrower or any Guarantor, as the

case may be, shall default in the payment of the principal of or interest on any

Loan or in the payment of any other amount becoming due hereunder (including,

without limitation, the reimbursement pursuant to Section 2.03(d) of any draft

drawn under a Letter of Credit), whether at stated maturity, by acceleration or

otherwise, the Borrower or such Guarantor, as the case may be, shall on demand

from time to time pay interest, to the extent permitted by law, on such

defaulted amount up to (but not including) the date of actual payment (after as

well as before judgment) at

<PAGE>

a rate per annum (computed on the basis of the actual number of days elapsed

over a year of 360 days or when the Alternate Base Rate is applicable and is

based on the Prime Rate, a year with 365 days or 366 days in a leap year) equal

to (x) in the case of Borrowings consisting of Eurodollar Loans, the Adjusted

LIBOR Rate in effect for such Borrowing plus 6% and (y) in the case of all other

amounts, the Alternate Base Rate plus 5%.

SECTION 2.10 OPTIONAL TERMINATION OR REDUCTION OF COMMITMENT. Upon at

least two Business Days' prior written notice to the Agent, the Borrower may at

any time in whole permanently terminate, or from time to time in part

permanently reduce, the Unused Total Tranche A Commitment or the Total Tranche B

Commitment; provided, however, that at any time of any reduction or termination

of the Tranche B Commitment, the Total Tranche A Commitment shall have been

wholly and permanently terminated, all Tranche A Loans shall have been paid in

full and no Letters of Credit shall be outstanding, or, if outstanding, then

backed by Cash Collateralization. Each such reduction of the Commitments shall

be in the principal amount of $1,000,000 or any integral multiple thereof.

Simultaneously with each reduction or termination of the Tranche A Commitment,

the Borrower shall pay to the Agent for the account of each Tranche A Lender the

Tranche A Commitment Fee accrued and unpaid on the amount of the Tranche A

Commitment of such Tranche A Lender so terminated or reduced through the date

thereof. Any reduction of the Total Tranche A Commitment pursuant to this

Section shall be applied to reduce the Tranche A Commitment of each Lender pro

rata according to each such Lender's Tranche A Commitment Percentage. Any

termination or reduction of the Total Tranche B Commitment pursuant to this

Section 2.10 shall be applied to reduce pro rata the Total Tranche B Commitment

of each Tranche B Lender according to each such Lender's Tranche B Commitment

Percentage.

SECTION 2.11 ALTERNATE RATE OF INTEREST. In the event, and on each

occasion, that on the day two Business Days prior to the commencement of any

Interest Period for a Eurodollar Loan, the Agent shall have determined (which

determination shall be conclusive and binding upon the Borrower absent manifest

error) that reasonable means do not exist for ascertaining the applicable

Adjusted LIBOR Rate, the Agent shall, as soon as practicable thereafter, give

written, facsimile or telegraphic notice of such determination to the Borrower

and the Lenders, and any request by the Borrower for a Borrowing of Eurodollar

Loans (including pursuant to a refinancing with Eurodollar Loans) pursuant to

Section 2.06 or 2.12 shall be deemed a request for a Borrowing of ABR Loans.

After such notice shall have been given and until the circumstances giving rise

to such notice no longer exist, each request for a Borrowing of Eurodollar Loans

shall be deemed to be a request for a Borrowing of ABR Loans.

SECTION 2.12 REFINANCING OF LOANS. The Borrower shall have the right, at

any time, on three Business Days' prior irrevocable notice to the

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