Exhibit 10.1

 

EXECUTION COPY

 

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$100,000,000

 

TERM LOAN AGREEMENT

 

among

 

PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED,

 

PRIMUS TELECOMMUNICATIONS HOLDING, INC.,

 

as Borrower,

 

The Several Lenders

from Time to Time Parties Hereto,

 

LEHMAN BROTHERS INC.,

as Arranger

 

LEHMAN COMMERCIAL PAPER INC.,

as Syndication Agent

 

and

 

LEHMAN COMMERCIAL PAPER INC.,

as Administrative Agent

 

Dated as of February 18, 2005

 

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TABLE OF CONTENTS

 

              Page

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Section 1.

   DEFINITIONS     

1.1.  

       Defined Terms     

1.2.  

       Other Definitional Provisions     

Section 2.

   AMOUNT AND TERMS OF COMMITMENTS     

2.1.  

       Commitments     

2.2.  

       Procedure for Borrowing     

2.3.  

       Repayment of Loans     

2.4.  

       Repayment of Loans; Evidence of Debt     

2.5.  

       Fees, etc     

2.6.  

       Optional Prepayments     

2.7.  

       Mandatory Prepayments     

2.8.  

       Conversion and Continuation Options     

2.9.  

       Minimum Amounts and Maximum Number of Eurodollar Tranches     

2.10.

       Interest Rates and Payment Dates     

2.11.

       Computation of Interest and Fees     

2.12.

       Inability to Determine Interest Rate     

2.13.

       Pro Rata Treatment and Payments     

2.14.

       Requirements of Law     

2.15.

       Taxes     

2.16.

       Indemnity     

2.17.

       Illegality     

2.18.

       Change of Lending Office     

2.19.

       Replacement of Lenders under Certain Circumstances     

Section 3.

   REPRESENTATIONS AND WARRANTIES     

3.1.  

       Financial Condition     

3.2.  

       No Change     

3.3.  

       Corporate Existence; Compliance with Law     

3.4.  

       Corporate Power; Authorization; Enforceable Obligations     

3.5.  

       No Legal Bar     

3.6.  

       No Material Litigation     

3.7.  

       No Default     

3.8.  

       Ownership of Property; Liens     

3.9.  

       Intellectual Property     

3.10.

       Taxes     

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3.11.

        Federal Regulations     

3.12.

        Labor Matters     

3.13.

        ERISA     

3.14.

        Investment Company Act; Other Regulations     

3.15.

        Subsidiaries     

3.16.

        Use of Proceeds     

3.17.

        Environmental Matters     

3.18.

        Accuracy of Information, etc     

3.19.

        Security Documents     

3.20.

        Solvency     

Section 4.

   CONDITIONS PRECEDENT     

Section 5.

   AFFIRMATIVE COVENANTS     

5.1.  

        Financial Statements     

5.2.  

        Certificates; Other Information     

5.3.  

        Payment of Obligations     

5.4.  

        Conduct of Business and Maintenance of Existence; Compliance     

5.5.  

        Maintenance of Property; Insurance     

5.6.  

        Inspection of Property; Books and Records; Discussions     

5.7.  

        Notices     

5.8.  

        Environmental Laws     

5.9.  

        Additional Collateral, etc     

5.10.

        Further Assurances     

5.11.

        Approvals of Governmental Authorities     

5.12.

        Post Closing Items     

Section 6.

   NEGATIVE COVENANTS     

6.1.  

        Obligors May Consolidate, Etc., Only on Certain Terms     

6.2.  

        Limitation on Indebtedness     

6.3.  

        Limitation on Restricted Payments     

6.4.  

        Limitation on Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries     

6.5.  

        Limitation on the Issuance and Sale of Voting Stock of Restricted
Subsidiaries     

6.6.  

        Limitation on Transactions with Shareholders and Affiliates     

6.7.  

        Limitation on Liens     

6.8.  

        Limitation on Asset Sales     

6.9.  

        Limitation on Issuances of Guarantees of Indebtedness by Restricted
Subsidiaries     

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6.10.

        Business of Parent     

6.11.

        Restriction on Transfer of Assets     

6.12.

        Restriction on Certain Purchases of Indebtedness     

6.13.

        Restriction on Use of Proceeds     

6.14.

        Restriction on Deposit Accounts and Securities Accounts     

Section 7.

   EVENTS OF DEFAULT     

Section 8.

   THE AGENTS     

8.1.  

        Appointment     

8.2.  

        Delegation of Duties     

8.3.  

        Exculpatory Provisions     

8.4.  

        Reliance by Agents     

8.5.  

        Notice of Default     

8.6.  

        Non-Reliance on Agents and Other Lenders     

8.7.  

        Indemnification     

8.8.  

        Agent in Its Individual Capacity     

8.9.  

        Successor Administrative Agent     

8.10.

        Authorization to Release Liens and Guarantees     

8.11.

        The Arranger; the Syndication Agent     

Section 9.

   MISCELLANEOUS     

9.1.  

        Amendments and Waivers     

9.2.  

        Notices     

9.3.  

        No Waiver; Cumulative Remedies     

9.4.  

        Survival of Representations and Warranties     

9.5.  

        Payment of Expenses     

9.6.  

        Successors and Assigns; Participations and Assignments     

9.7.  

        Adjustments; Set-off     

9.8.  

        Counterparts     

9.9.  

        Severability     

9.10.

        Integration     

9.11.

        GOVERNING LAW     

9.12.

        Submission To Jurisdiction; Waivers     

9.13.

        Acknowledgments     

9.14.

        Confidentiality     

9.15.

        Release of Collateral and Guarantee Obligations     

9.16.

        Accounting Changes     

9.17.

        Delivery of Lender Addenda     

9.18.

        WAIVERS OF JURY TRIAL     

 

 

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SCHEDULES:

1.1

   Existing Liens

3.4

   Consents, Authorizations, Filings and Notices

3.6

   Material Litigation

3.7

   Defaults

3.10

   Taxes

3.15(a)

   All Subsidiaries

3.15(b)

   Subsidiaries Party to the Loan Documents

3.15(c)

   Actions Required to Seek Governmental Approvals

3.19(a)-1

   UCC Filing Jurisdictions

3.19(a)-2

   UCC Financing Statements to Remain on File

3.19(a)-3

   UCC Financing Statements to be Terminated

3.19(b)

   Real Property

EXHIBITS:

A

   Form of Guarantee and Collateral Agreement

B

   Form of Compliance Certificate

C

   Form of Closing Certificate

D

   Form of Assignment and Acceptance

E-1

   Form of Legal Opinion of Hogan & Hartson L.L.P.

E-2

   Form of Legal Opinion of Swidler Berlin LLP

F

   Form of Note

G

   Form of Exemption Certificate

H

   Form of Lender Addendum

I

   Form of Borrowing Notice

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TERM LOAN AGREEMENT, dated as of February 18, 2005, among PRIMUS
TELECOMMUNICATIONS GROUP, INCORPORATED, a Delaware corporation (the “Parent”),
PRIMUS TELECOMMUNICATIONS HOLDING, INC., a Delaware corporation (the
“Borrower”), the several banks and other financial institutions or entities from
time to time parties to this Agreement (the “Lenders”), LEHMAN BROTHERS INC., as
advisor, sole lead arranger and sole bookrunner (in such capacity, the
“Arranger”), LEHMAN COMMERCIAL PAPER INC., as syndication agent (in such
capacity, the “Syndication Agent”), and LEHMAN COMMERCIAL PAPER INC., as
administrative agent (in such capacity, the “Administrative Agent”).

 

W I T N E S S E T H:

 

WHEREAS, the Borrower has requested that the Lenders make available a credit
facility for general corporate purposes;

 

WHEREAS, the Lenders are willing to make such facility available upon and
subject to the terms and conditions hereinafter set forth;

 

NOW, THEREFORE, in consideration of the premises and the agreements hereinafter
set forth, the parties hereto hereby agree as follows:

 

SECTION 1. DEFINITIONS

 

1.1. Defined Terms. As used in this Agreement, the terms listed in this Section
1.1 shall have the respective meanings set forth in this Section 1.1.

 

“Accounts”: as defined in the Guarantee and Collateral Agreement.

 

“Acquired Indebtedness”: Indebtedness of a Person existing at the time such
Person becomes a Restricted Subsidiary of an Obligor or assumed in connection
with an Asset Acquisition by an Obligor or a Restricted Subsidiary of an Obligor
and not incurred in connection with, or in anticipation of, such Person becoming
a Restricted Subsidiary of an Obligor or such Asset Acquisition; provided that
Indebtedness of such Person which is redeemed, defeased, retired or otherwise
repaid at the time of or upon the consummation of the transactions by which such
Person becomes a Restricted Subsidiary of an Obligor or such Asset Acquisition
shall not be Indebtedness.

 

“Administrative Agent”: as defined in the preamble hereto.

 

“Affiliate”: as applied to any Person, any other Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with,
such Person. For purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling”, “controlled by” and “under common
control with”), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise. For purposes of this Agreement, “Affiliate” shall be
deemed to include Mr. K. Paul Singh.

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“Agents”: the collective reference to the Syndication Agent and the
Administrative Agent.

 

“Agreement”: this Term Loan Agreement, as amended, supplemented or otherwise
modified from time to time.

 

“Applicable Margin”: (a) in the case of Base Rate Loans, 5.50%, and (b) in the
case of Eurodollar Loans, 6.50%.

 

“Arranger”: as defined in the preamble hereto.

 

“Asset Acquisition”: (i) an investment by Parent or any of its Restricted
Subsidiaries in any other Person pursuant to which such Person shall become a
Restricted Subsidiary of Parent or shall be merged into or consolidated with
Parent or any of its Restricted Subsidiaries or (ii) an acquisition by Parent or
any of its Restricted Subsidiaries of the property and assets of any Person
other than Parent or any of its Restricted Subsidiaries that constitute
substantially all of a division or line of business of such Person.

 

“Asset Disposition”: the sale or other disposition by Parent or any of its
Restricted Subsidiaries (other than to Parent or another of its Restricted
Subsidiaries) of (i) all or substantially all of the Capital Stock of any
Restricted Subsidiary of Parent or (ii) all or substantially all of the assets
that constitute a division or line of business of Parent or any of its
Restricted Subsidiaries.

 

“Asset Sale”: any sale, transfer or other disposition (including by way of
merger, consolidation or sale-leaseback transactions) in one transaction or a
series of related transactions by Parent or any of its Restricted Subsidiaries
to any Person other than Parent or any of its Restricted Subsidiaries of (i) all
or any of the Capital Stock of any Subsidiary of Parent, excluding the Lingo
Subsidiary which is covered by Section 2.7(b), (ii) all or substantially all of
the property and assets of an operating unit or business of Parent or any of its
Restricted Subsidiaries or (iii) any other property and assets of Parent or any
of its Restricted Subsidiaries outside the ordinary course of business of Parent
or such Restricted Subsidiary and, in each case, that is not governed by the
provisions of this Agreement applicable to mergers, consolidations and sales of
assets of Parent or the Borrower and which, in the case of any of clause (i),
(ii) or (iii) above, whether in one transaction or a series of related
transactions, (a) have a Fair Market Value in excess of $5,000,000 or (b) are
for net proceeds in excess of $5,000,000; provided that (i) sales or other
dispositions of inventory, receivables, Marketable Securities and other current
assets in the ordinary course of business; (ii) grants of leases or licenses in
the ordinary course of business; (iii) any sale, transfer, assignment or other
disposition of property that is damaged, worn-out, obsolete or no longer
suitable for use in the ordinary course of business; (iv) sales or other
dispositions of assets for consideration at least equal to the Fair Market Value
(as determined in good faith by the Board of Directors of Parent, whose
determination shall be conclusive and evidenced by a Board Resolution) of the
assets sold or disposed of, to the extent that the consideration received would
constitute long-term property or assets of a nature or type or that are used in
a business (or in a company having property and assets of a nature or type, or
engaged in a business) similar or related to the nature or type of the property
and assets of, or the business of, the Borrower and its Restricted Subsidiaries
existing on the date of such disposition

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or investment (as determined in good faith by the Board of Directors of Parent,
whose determination shall be conclusive and evidenced by a Board Resolution);
(v) grants of Voting Stock or options or other rights to acquire shares of
Voting Stock (or issuances of Voting Stock upon the exercise of such options or
other rights) made to employees or directors as described in clause (iii) of
Section 6.5; and (vi) issuances of Capital Stock by Unrestricted Subsidiaries of
Parent, shall not be included within the meaning of “Asset Sale.”

 

“Asset Sale Mandatory Prepayment Date”: as defined in Section 2.7(a).

 

“Asset Sale Prepayment Amount”: as defined in Section 2.7(a).

 

“Asset Sale Prepayment Option Notice”: as defined in Section 2.7(a).

 

“Assignee”: as defined in Section 9.6(c).

 

“Assignor”: as defined in Section 9.6(c).

 

“Average Life”: at any date of determination with respect to any debt security,
the quotient obtained by dividing (i) the sum of the products of (a) the number
of years from such date of determination to the dates of each successive
scheduled principal payment of such debt security and (b) the amount of such
principal payment by (ii) the sum of all such principal payments.

 

“Base Rate”: for any day, a rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in effect on
such day and (b) the Federal Funds Effective Rate in effect on such day plus
 1/2 of 1%. For purposes hereof: “Prime Rate” shall mean the prime lending rate
as set forth on the British Banking Association Telerate Page 5 (or such other
comparable publicly available page as may, in the reasonable opinion of the
Administrative Agent after notice to the Borrower, replace such page for the
purpose of displaying such rate if such rate no longer appears on the British
Bankers Association Telerate page 5), as in effect from time to time. The Prime
Rate is a reference rate and does not necessarily represent the lowest or best
rate actually available. Any change in the Base Rate due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.

 

“Base Rate Loans”: Loans for which the applicable rate of interest is based upon
the Base Rate.

 

“Benefitted Lender”: as defined in Section 9.7.

 

“Board”: the Board of Governors of the Federal Reserve System of the United
States (or any successor).

 

“Board of Directors”: either the Board of Directors of the Borrower or Parent,
as the case may be, or any duly authorized committee of such board.

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“Board Resolution”: a copy of a resolution certified by the Secretary or an
Assistant Secretary of the Borrower or Parent, as the case may be, to have been
duly adopted by the Board of Directors of the Borrower or Parent, as the case
may be, and to be in full force and effect on the date of such certification,
and delivered to the Administrative Agent.

 

“Borrower”: as defined in the preamble hereto.

 

“Borrower Indebtedness to Consolidated Cash Flow Ratio”: as defined in Section
6.2.

 

“Borrower’s Significant Subsidiaries”: Primus Telecommunications, Inc., Primus
Telecommunications (Australia) Pty. Ltd., Primus Telecommunications Pty. Ltd.,
3082833 Nova Scotia Company, Primus Telecommunications International, Inc.,
Primus Telecommunications Ltd., Primus Telecommunications Netherlands B.V. and
Primus Telecommunications GmbH, plus any other Subsidiary of the Borrower that
(i) for any period of four consecutive fiscal quarters has Consolidated EBITDA
in excess of 10% of the Consolidated EBITDA of the Borrower and its Subsidiaries
for that period or (ii) has assets having a book value (net of depreciation and
amortization) in excess of 10% of the aggregate book value (net of depreciation
and amortization) of the assets of the Borrower and its Subsidiaries.

 

“Borrowing Date”: any Business Day specified by the Borrower as a date on which
the Borrower requests the Lenders to make Loans hereunder.

 

“Borrowing Notice”: with respect to any request for borrowing of Loans
hereunder, a notice from the Borrower, substantially in the form of, and
containing the information prescribed by, Exhibit I, delivered to the
Administrative Agent.

 

“Business Day”: (a) for all purposes other than as covered by clause (b) below,
a day other than a Saturday, Sunday or other day on which commercial banks in
New York City are authorized or required by law to close and (b) with respect to
all notices and determinations in connection with, and payments of principal and
interest on, Eurodollar Loans, any day which is a Business Day described in
clause (a) and which is also a day for trading by and between banks in Dollar
deposits in the interbank eurodollar market.

 

“Capital Stock”: with respect to any Person, any and all shares, interests,
participations or other equivalents (however designated, whether voting or
non-voting) in equity of such Person, whether now outstanding or issued after
the date of this Indenture, including, without limitation, all Common Stock and
Preferred Stock.

 

“Capitalized Lease”: as applied to any Person, any lease of any property
(whether real, personal or mixed) of which the discounted present value of the
rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person.

 

“Capitalized Lease Obligation”: as to any Capitalized Lease, the discounted
present value of the rental obligations thereunder.

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“Change of Control”: the occurrence of one or more of the following events: (i)
a “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the
Exchange Act) becomes the ultimate “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act) of more than 50% of the total voting power of the then
outstanding Voting Stock of Parent on a fully diluted basis; (ii) individuals
who at the beginning of any period of two consecutive calendar years constituted
the Board of Directors of Parent (together with any directors who are members of
the Board of Directors on the date hereof and any new directors whose election
by the Board of Directors or whose nomination for election by Parent’s
stockholders was approved by a vote of at least two-thirds of the members of the
Board of Directors then still in office who either were members of the Board of
Directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the members of such Board of Directors then in office; (iii) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of Parent and its Subsidiaries taken as a whole
to any such “person” or “group” (other than to Parent or a Restricted
Subsidiary); (iv) the merger or consolidation of Parent with or into another
corporation or the merger of another corporation with or into Parent with the
effect that immediately after such transaction any such “person” or “group” of
persons or entities shall have become the beneficial owner of securities of the
surviving corporation of such merger or consolidation representing a majority of
the total voting power of the then outstanding Voting Stock of the surviving
corporation; (v) the adoption of a plan relating to the liquidation or
dissolution of Parent or the Borrower; or (vi) Parent shall fail to own 100% of
the issued and outstanding Voting Stock of the Borrower.

 

“Closing Date”: the date on which the conditions precedent set forth in Section
4 shall have been satisfied and funding has occurred hereunder, which date shall
be not later than March 31, 2005.

 

“Code”: the Internal Revenue Code of 1986, as amended from time to time.

 

“Collateral”: all Property of the Loan Parties, now owned or hereafter acquired,
upon which a Lien is purported to be created by any Security Document.

 

“Commitment”: as to any Lender, the obligation of such Lender, if any, to make a
Loan to the Borrower hereunder in a principal amount not to exceed the amount
set forth under the heading “Commitment” opposite such Lender’s name on Schedule
1 to the Lender Addendum delivered by such Lender, or, as the case may be, in
the Assignment and Acceptance pursuant to which such Lender became a party
hereto, as the same may be changed from time to time pursuant to the terms
hereof. The original aggregate amount of the Commitments is $100,000,000.

 

“Common Stock”: with respect to any Person, any and all shares, interests,
participations or other equivalents (however designated, whether voting or
non-voting) of such Person’s common stock, whether now outstanding or issued
after the date of this Agreement, including, without limitation, all series and
classes of such common stock.

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“Commonly Controlled Entity”: an entity, whether or not incorporated, that is
under common control with the Borrower within the meaning of Section 4001 of
ERISA or is part of a group that includes the Borrower and that is treated as a
single employer under Section 414 of the Code.

 

“Compliance Certificate”: a certificate duly executed by a Responsible Officer,
substantially in the form of Exhibit B.

 

“Confidential Information Memorandum”: the Confidential Information Memorandum
dated January 2005, including the exhibits and schedules thereto, as amended and
supplemented in writing by the Borrower prior to the date hereof, and made
available to the initial Lenders in connection with the syndication of the
Facility. The Confidential Information Memorandum includes Parent’s SEC filings
made after December 31, 2003 as well as forward-looking projections, all of
which may be contained in, attached to, or incorporated by reference in, the
Confidential Information Memorandum; and all references in this Agreement to the
Confidential Information Memorandum are qualified in their entirety by the
matters set forth in this sentence, regardless of whether or not any Lender has
or has not chosen, in its discretion, to refrain from receiving, reviewing,
inquiring about or conducting due diligence regarding, the Confidential
Information Memorandum or any matters contained in, attached to, or incorporated
by reference in, the Confidential Information Memorandum.

 

“Consolidated Cash Flow”: with respect to an Obligor, for any period, the sum of
the amounts for such period of (i) Consolidated Net Income, (ii) Consolidated
Interest Expense, (iii) income taxes, to the extent such amount was deducted in
calculating Consolidated Net Income (other than income taxes (either positive or
negative) attributable to extraordinary and non-recurring gains or losses or
sales of assets), (iv) depreciation expense, to the extent such amount was
deducted in calculating Consolidated Net Income, (v) amortization expense, to
the extent such amount was deducted in calculating Consolidated Net Income, and
(vi) all other non-cash items reducing Consolidated Net Income (excluding any
non-cash charge to the extent that it represents an accrual of or reserve for
cash charges in any future period), less all non-cash items increasing
Consolidated Net Income, all as determined on a consolidated basis for such
Obligor and its Restricted Subsidiaries in conformity with GAAP.

 

“Consolidated EBITDA”: of any Person for any period, consolidated net income of
such Person and its Subsidiaries for such period, determined in accordance with
GAAP plus, without duplication and to the extent reflected as a charge in the
statement of such consolidated net income for such period, the sum of (a) income
tax expense, (b) interest expense of such Person and its Subsidiaries,
amortization or writeoff of debt discount and debt issuance costs and
commissions, discounts and other fees and charges associated with Indebtedness,
(c) depreciation and amortization expense, (d) amortization of intangibles
(including, but not limited to, goodwill) and organization costs, (e) any
extraordinary, unusual or non-recurring expenses or losses (including, whether
or not otherwise includable as a separate item in the statement of such
consolidated net income for such period, losses on sales of assets outside of
the ordinary course of business) and (f) any other non-cash charges, and minus,
to the extent included in the statement of such consolidated net income for such
period, the sum of (a) interest income (except to the extent deducted in
determining interest expense), (b) any extraordinary, unusual or non-recurring
income or gains (including, whether or not otherwise includable as a separate
item in

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the statement of such consolidated net income for such period, gains on the
sales of assets outside of the ordinary course of business) and (c) any other
non-cash income, all as determined on a consolidated basis.

 

“Consolidated Fixed Charges”: for any period, Consolidated Interest Expense plus
dividends declared and payable on Preferred Stock of Parent and its Restricted
Subsidiaries.

 

“Consolidated Interest Expense”: with respect to an Obligor, for any period, the
aggregate amount of interest in respect of Indebtedness (including capitalized
interest, amortization of original issue discount on any Indebtedness and the
interest portion of any deferred payment obligation, calculated in accordance
with the effective interest method of accounting; all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers’
acceptance financing; the net costs associated with Interest Rate Agreements;
and interest on Indebtedness that is Guaranteed or secured by such Obligor or
any of its Restricted Subsidiaries) and all but the principal component of
rentals in respect of Capitalized Lease obligations paid, accrued or scheduled
to be paid or to be accrued by such Obligor and its Restricted Subsidiaries
during such period.

 

“Consolidated Net Income”: with respect to an Obligor, for any period, the
aggregate consolidated net income (or loss) of such Obligor and its Restricted
Subsidiaries for such period determined in conformity with GAAP; provided that
the following items shall be excluded in computing Consolidated Net Income
(without duplication): (i) solely for the purposes of calculating the amount of
Restricted Payments that may be made pursuant to clause (C) of the first
paragraph of Section 6.3, the net income (or loss) of any Person accrued prior
to the date it becomes a Restricted Subsidiary or is merged into or consolidated
with such Obligor or any of its Restricted Subsidiaries or all or substantially
all of the property and assets of such Person are acquired by such Obligor or
any of its Restricted Subsidiaries; (ii) any gains or losses (on an after-tax
basis) attributable to Asset Sales by such Obligor or any of its Restricted
Subsidiaries; (iii) except for purposes of calculating the amount of Restricted
Payments that may be made pursuant to clause (C) of the first paragraph of
Section 6.3, any amount paid or accrued as dividends on Preferred Stock of such
Obligor or Preferred Stock of any Restricted Subsidiary owned by Persons other
than such Obligor and any of its Restricted Subsidiaries; (iv) all extraordinary
gains and extraordinary losses; and (v) the net income (or loss) of any Person
(other than net income (or loss) attributable to a Restricted Subsidiary of such
Obligor) in which any Person (other than Parent or any of its Restricted
Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to such Obligor or any of its
Restricted Subsidiaries by such other Person during such period.

 

“Contractual Obligation”: as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which
such Person is a party or by which it or any of its Property is bound.

 

“Control Investment Affiliate”: as to any Person, any other Person that (a)
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person and (b) is organized by such Person primarily for the
purpose of making equity or debt investments in one or more companies. For
purposes of this definition, “control” of a Person means the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person, whether by contract or otherwise.

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“Credit Facilities”: one or more credit agreements, debt facilities, indentures
or commercial paper facilities (including, without limitation, the Facility)
with banks or other institutional lenders or investors providing for revolving
credit loans, term loans, receivables financing (including through the sale of
receivables to such lenders or to special purpose entities formed to borrow from
such lenders against such receivables), letters of credit or debt securities
financings, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time.

 

“Currency Agreement”: any foreign exchange contract, currency swap agreement and
any other arrangement and agreement designed to provide protection against
fluctuations in currency values.

 

“Default”: any of the events specified in Section 7, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

 

“Designated Subsidiaries”: as defined in Section 6.5.

 

“Disposition”: with respect to any Property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof; and
the terms “Dispose” and “Disposed of” shall have correlative meanings.

 

“Dollars” and “$”: dollars in lawful currency of the United States of America.

 

“Domestic Perfection Actions”: any of (a) filing of financing statements under
the Uniform Commercial Code in effect in any jurisdiction in the United States,
(b) filings with the United States Copyright Office or the United States Patent
and Trademark Office, (c) execution and delivery of deposit account control
agreements or securities account control agreements in respect of any deposit
account or securities account maintained in the United States and (d) possession
in the United States of stock certificates, promissory notes, and other
instruments and similar collateral.

 

“Domestic Subsidiary”: any Subsidiary of the Borrower organized under the laws
of any jurisdiction within the United States of America. For the avoidance of
doubt, a Subsidiary organized under the laws of Puerto Rico or the U.S. Virgin
Islands is not a Domestic Subsidiary.

 

“Eligible Accounts Receivable”: the accounts receivables (net of any reserves
and allowances for doubtful accounts in accordance with GAAP) of any Person that
are not more than 60 days past their due date and that were entered into in the
ordinary course of business on normal payment terms as shown on the most recent
consolidated balance sheet of such Person filed with the SEC, all in accordance
with GAAP.

 

“Eligible Institution”: a commercial banking institution that has combined
capital and surplus of not less than $500,000,000 or its equivalent in foreign
currency, whose debt is rated “A-3” or higher or “A-” or higher according to
Moody’s Investors Service, Inc. or Standard & Poor’s Ratings Group (or such
similar equivalent rating by at least one “nationally recognized statistical
rating organization” (as defined in Rule 436 under the Securities Act))
respectively, at the time as of which any investment or rollover therein is
made.

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“Employment Agreement”: the employment agreement between Parent and Mr. K. Paul
Singh, dated June 1994.

 

“Environmental Laws”: any and all laws, rules, orders, regulations, statutes,
ordinances, guidelines, codes, decrees, or other legally enforceable
requirements (including, without limitation, common law) of any international
authority, foreign government, the United States, or any state, local, municipal
or other governmental authority, regulating, relating to or imposing liability
or standards of conduct concerning protection of the environment or of human
health, or employee health and safety, as has been, is now, or may at any time
hereafter be, in effect.

 

“Environmental Permits”: any and all permits, licenses, approvals,
registrations, notifications, exemptions and other authorizations required under
any applicable Environmental Law.

 

“ERISA”: the Employee Retirement Income Security Act of 1974, as amended from
time to time.

 

“Eurocurrency Reserve Requirements”: for any day, the aggregate (without
duplication) of the maximum rates (expressed as a decimal fraction) of reserve
requirements in effect on such day (including, without limitation, basic,
supplemental, marginal and emergency reserves) under any regulations of the
Board or other Governmental Authority having jurisdiction with respect thereto
dealing with reserve requirements prescribed for eurocurrency funding (currently
referred to as “Eurocurrency Liabilities” in Regulation D of the Board)
maintained by a member bank of the Federal Reserve System.

 

“Eurodollar Base Rate”: with respect to each day during each Interest Period,
the rate per annum determined on the basis of the rate for deposits in Dollars
for a period equal to such Interest Period commencing on the first day of such
Interest Period appearing on Page 3750 of the Telerate screen as of 11:00 A.M.,
London time, two Business Days prior to the beginning of such Interest Period.
In the event that such rate does not appear on Page 3750 of the Telerate screen
(or otherwise on such screen), the “Eurodollar Base Rate” for purposes of this
definition shall be determined by reference to such other comparable publicly
available service for displaying eurodollar rates as may be selected by the
Administrative Agent.

 

“Eurodollar Loans”: Loans for which the applicable rate of interest is based
upon the Eurodollar Rate.

 

“Eurodollar Rate”: with respect to each day during each Interest Period, a rate
per annum determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):

 

Eurodollar Base Rate

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1.00 - Eurocurrency Reserve Requirements

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“Eurodollar Tranche”: the collective reference to Eurodollar Loans the then
current Interest Periods with respect to all of which begin on the same date and
end on the same later date (whether or not such Loans shall originally have been
made on the same day).

 

“Event of Default”: any of the events specified in Section 7, provided that any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

 

“Exchange Act”: the Securities Exchange Act of 1934, as amended.

 

“Excluded Foreign Subsidiary”: any Foreign Subsidiary (or Subsidiary of a
Foreign Subsidiary) in respect of which either (a) the pledge of all of the
Capital Stock of such Subsidiary as Collateral or (b) the guaranteeing by such
Subsidiary of the Obligations, would, in the good faith judgment of the
Borrower, result in adverse tax consequences to the Borrower.

 

“Existing Indebtedness”: Indebtedness of Parent or its Restricted Subsidiaries
outstanding as of January 16, 2004, including, without limitation, the Senior
Notes.

 

“Facility”: the Commitments and the Loans made thereunder.

 

“Fair Market Value”: with respect to any asset or property, the sale value that
would be obtained in an arm’s length transaction between an informed and willing
seller under no compulsion to sell and an informed and willing buyer.

 

“Federal Funds Effective Rate”: 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 that is a Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it.

 

“Foreign Subsidiary”: any Subsidiary of the Borrower that is not a Domestic
Subsidiary.

 

“Funding Office”: the office specified from time to time by the Administrative
Agent as its funding office by notice to the Borrower and the Lenders.

 

“GAAP”: generally accepted accounting principles in the United States of America
as in effect from time to time.

 

“Governmental Authority”: any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative functions of or pertaining to government,
any securities exchange and any self-regulatory organization (including the
National Association of Insurance Commissioners).

 

“Government Securities”: direct obligations of, or obligations guaranteed by,
the United States of America for the payment of which obligations or guarantee
the full faith and credit of the United States is pledged.

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

 

“Guarantee and Collateral Agreement”: the Guarantee and Collateral Agreement to
be executed and delivered on the Closing Date by Parent, the Borrower and each
Subsidiary named on Schedule 3.15(b), substantially in the form of Exhibit A, as
the same may be amended, supplemented or otherwise modified from time to time.

 

“Guarantee Approval Pending Subsidiary”: each Subsidiary of the Borrower which,
in the good faith opinion of the Borrower, must obtain the approval of, or give
a notice to, a Governmental Authority before becoming obligated as a Guarantor
under the Guarantee and Collateral Agreement.

 

“Guarantee Approval Notice”: in respect of each Guarantee Approval Pending
Subsidiary, a written notice from the Borrower to the Administrative Agent
advising that approval has been issued (or deemed issued, in the case of any
Governmental Authority whose approval is effective upon notice to such
Governmental Authority) by the relevant Governmental Authorities permitting such
Guarantee Approval Pending Subsidiary to incur obligations as a Guarantor under
the Guarantee and Collateral Agreement.

 

“Guarantors”: the collective reference to Parent and the Subsidiary Guarantors.

 

“Hedge Agreements”: all interest rate or currency swaps, caps or collar
agreements, foreign exchange agreements, commodity contracts or similar
arrangements entered into by Parent, the Borrower or its Subsidiaries providing
for protection against fluctuations in interest rates, currency exchange rates,
commodity prices or the exchange of nominal interest obligations, either
generally or under specific contingencies.

 

“Incur”: with respect to any Indebtedness, to incur, create, issue, assume,
Guarantee or otherwise become liable for or with respect to, or become
responsible for, the payment of, contingently or otherwise, such Indebtedness,
including an Incurrence of Indebtedness by reason of the acquisition of more
than 50% of the Capital Stock of any Person (unless such Person is an
Unrestricted Subsidiary); provided that neither the accrual of interest nor the
accretion of original issue discount shall be considered an Incurrence of
Indebtedness.

 

“Indebtedness”: with respect to any Person at any date of determination (without
duplication), (i) all indebtedness of such

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Person for borrowed money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all obligations of
such Person in respect of letters of credit or other similar instruments
(including reimbursement obligations with respect thereto), (iv) all obligations
of such Person to pay the deferred and unpaid purchase price of property or
services, which purchase price is due more than six months after the date of
placing such property in service or taking delivery and title thereto or the
completion of such services, except Trade Payables, (v) all obligations of such
Person as lessee under Capitalized Leases, (vi) all Indebtedness of other
Persons secured by a Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person; provided that the amount of such
Indebtedness shall be the lesser of (A) the Fair Market Value of such asset at
such date of determination and (B) the amount of such Indebtedness, (vii) all
Indebtedness of other Persons Guaranteed by such Person to the extent such
Indebtedness is Guaranteed by such Person, (viii) the maximum fixed redemption
or repurchase price of Redeemable Stock of such Person at the time of
determination and, with respect to any Restricted Subsidiary that is not a
Guarantor, any Preferred Stock; and (ix) to the extent not otherwise included in
this definition, obligations under Currency Agreements and Interest Rate
Agreements. The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and, with respect to contingent obligations, the maximum liability upon
the occurrence of the contingency giving rise to the obligation, provided (i)
that the amount outstanding at any time of any Indebtedness issued with original
issue discount is the face amount of such Indebtedness less the remaining
unamortized portion of the original issue discount of such Indebtedness at such
time as determined in conformity with GAAP and (ii) that Indebtedness shall not
include any liability for federal, state, local or other taxes.

 

“Indemnification Arrangements”: provisions in the bylaws or other charter or
organizational documents of Parent or any of its Restricted Subsidiaries or
agreements, in each case providing for the indemnification of directors,
officers, employees, consultants and agents of Parent or any of its Restricted
Subsidiaries in the ordinary course of business.

 

“Indemnified Liabilities”: as defined in Section 9.5.

 

“Indemnitee”: as defined in Section 9.5.

 

“Insolvency”: with respect to any Multiemployer Plan, the condition that such
Plan is insolvent within the meaning of Section 4245 of ERISA.

 

“Insolvent”: pertaining to a condition of Insolvency.

 

“Intellectual Property”: the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including, without
limitation, copyrights, copyright licenses, patents, patent licenses,
trademarks, trademark licenses, technology, know-how and processes, and all
rights to sue at law or in equity for any infringement or other impairment
thereof, including the right to receive all proceeds and damages therefrom.

 

“Interest Payment Date”: (a) as to any Base Rate Loan, the last day of each
March, June, September and December to occur while such Loan is outstanding and
the final

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maturity date of such Loan, (b) as to any Eurodollar Loan having an Interest
Period of three months or shorter, the last day of such Interest Period, (c) as
to any Eurodollar Loan having an Interest Period longer than three months, each
day that is three months, or a whole multiple thereof, after the first day of
such Interest Period and the last day of such Interest Period and (d) as to any
Loan, the date of any repayment or prepayment made in respect thereof.

 

“Interest Period”: as to any Eurodollar Loan, (a) initially, the period
commencing on the borrowing or conversion date, as the case may be, with respect
to such Eurodollar Loan and ending one, two, three or six months thereafter, as
selected by the Borrower in its notice of borrowing or notice of conversion, as
the case may be, given with respect thereto; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Eurodollar Loan and ending one, two, three or six months thereafter, as
selected by the Borrower by irrevocable notice to the Administrative Agent not
later than 11:00 A.M., New York City time, on the date that is three Business
Days prior to the last day of the then current Interest Period with respect
thereto; provided that, all of the foregoing provisions relating to Interest
Periods are subject to the following:

 

(1) if any Interest Period would otherwise end on a day that is not a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
unless the result of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period shall end on the
immediately preceding Business Day;

 

(2) any Interest Period that would otherwise extend beyond the date final
payment is due on the Loans shall end on such due date; and

 

(3) any Interest Period that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last Business Day of
the calendar month at the end of such Interest Period.

 

“Interest Rate Agreement”: interest rate swap agreements, interest rate cap
agreements, interest rate insurance, and other arrangements and agreements
designed to provide protection against fluctuations in interest rates.

 

“Investment”: in any Person, any direct or indirect advance, loan or other
extension of credit (including, without limitation, by way of Guarantee or
similar arrangement; but excluding advances to customers in the ordinary course
of business that are, in conformity with GAAP, recorded as accounts receivable
on the balance sheet of Parent or its Restricted Subsidiaries) or capital
contribution to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others), or any
purchase or acquisition of Capital Stock, bonds, notes, debentures or other
similar instruments issued by, such Person. For purposes of the definition of
“Unrestricted Subsidiary,” Section 6.3 and Section 6.5, (i) “Investment” shall
include (a) the Fair Market Value of the assets (net of liabilities) of any
Restricted Subsidiary of Parent at the time that such Restricted Subsidiary of
Parent is designated an Unrestricted Subsidiary and shall exclude the Fair
Market Value of the assets (net of liabilities) of any Unrestricted Subsidiary
at the time that such Unrestricted

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Subsidiary is designated a Restricted Subsidiary of Parent and (b) the Fair
Market Value, in the case of a sale of Voting Stock in accordance with Section
6.5 such that a Person no longer constitutes a Restricted Subsidiary, of the
Voting Stock and other Investments in such Person not sold or disposed of and
(ii) any property transferred to or from an Unrestricted Subsidiary shall be
valued at its Fair Market Value at the time of such transfer, in each case as
determined by the Board of Directors in good faith. The amount of any Investment
“outstanding” at any time shall be deemed to be equal to the amount of such
Investment on the date made, less return of capital, repayment of loans, and
release of Guarantees, in each case of or to Parent and its Restricted
Subsidiaries with respect to such Investment (up to the amount of such
Investment on the date made).

 

“Lehman Entity”: any of Lehman Commercial Paper Inc. or any of its affiliates
(including Syndicated Loan Funding Trust.

 

“Lender Addendum”: with respect to any initial Lender, a Lender Addendum,
substantially in the form of Exhibit H, to be executed and delivered by such
Lender on the Closing Date as provided in Section 9.17.

 

“Lenders”: as defined in the preamble hereto.

 

“Lien”: any mortgage, pledge, security interest, encumbrance, lien or charge of
any kind (including, without limitation, any conditional sale or other title
retention agreement or lease in the nature thereof, any sale with recourse
against the seller or any Affiliate of the seller, or any agreement to give any
security interest).

 

“Lingo Investment Certificate”: a certificate delivered by the Borrower as
contemplated by Section 2.7(b) in connection with the Lingo Offering, pursuant
to which the Borrower certifies the extent to which the Net Cash Proceeds of the
Lingo Offering has been invested in, and retained by, the Lingo Subsidiary and
the Restricted Subsidiaries of the Lingo Subsidiary.

 

“Lingo Offering”: (a) any public offering of the capital stock of the Lingo
Subsidiary (“Lingo Stock”) involving securities issued or sold in excess of
$50,000,000, before discounts, commissions and expenses or (b) any private
offering of Lingo Stock involving securities issued or sold in excess of
$15,000,000, before discounts, commissions and expenses; provided, that, any
such transaction described in the foregoing clauses (a) and (b) shall constitute
a “Lingo Offering” only if the Borrower complies with the requirements of
Section 2.7(b) with respect thereto.

 

“Lingo Prepayment Date”: as defined in Section 2.7(b).

 

“Lingo Prepayment Option Notice”: as defined in Section 2.7(b).

 

“Lingo Proceeds”: as defined in Section 2.7(b).

 

“Lingo Pro-Rata Prepayment Offer Amount”: as defined in Section 2.7(b).

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“Lingo Subsidiary”: an existing or to-be-formed Subsidiary of the Borrower,
which shall be a Restricted Subsidiary and shall (a) own, either directly or
through one or more other directly or indirectly wholly-owned Subsidiaries, all
or substantially all of the assets, or recognize all or substantially all of the
revenue and expenses from operations, relating to the “Lingo” brand name and is
or will be engaged primarily in business and activities reasonably related
thereto and (b) is designated by the Borrower as the Lingo Subsidiary in a
notice given by the Borrower to the Administrative Agent. In any reference in
this Agreement to the transfer of assets to, or disposition of assets by, the
“Lingo Subsidiary”, such term shall include the Subsidiaries of the Lingo
Subsidiary described in clause (a) of the preceding sentence.

 

“Loan”: as defined in Section 2.1.

 

“Loan Documents”: this Agreement, the Security Documents and the Notes.

 

“Loan Parties”: Parent, the Borrower and each Subsidiary of the Borrower that is
a party to a Loan Document.

 

“Marketable Securities”: (i) Government Securities that have a remaining
weighted average life to maturity of not more than 18 months from the date of
Investment therein; (ii) any time deposit account, money market deposit and
certificate of deposit maturing not more than 270 days after the date of
acquisition issued by, or time deposit of, an Eligible Institution; (iii)
commercial paper maturing not more than 180 days after the date of acquisition
issued by a corporation (other than an Affiliate of Parent) with a rating, at
the time as of which any investment therein is made, of “P-1” or higher
according to Moody’s Investors Service, Inc., or “A-1” or higher according to
Standard & Poor’s Rating Group (or such similar equivalent rating by at least
one “nationally recognized statistical rating organization” (as defined in Rule
436 under the Securities Act)); (iv) any banker’s acceptance or money market
deposit accounts issued or offered by an Eligible Institution; (v) repurchase
obligations with a term of not more than 30 days for Government Securities
entered into with an Eligible Institution; and (vi) any fund at least 95% of the
assets of which consist of investments of the types described in clauses (i)
through (v) above.

 

“Material Adverse Effect”: a material adverse effect on (a) the business,
assets, property, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Agents or the Lenders hereunder or thereunder.

 

“Materials of Environmental Concern”: any gasoline or petroleum (including crude
oil or any fraction thereof) or petroleum products, polychlorinated biphenyls,
urea-formaldehyde insulation, asbestos, pollutants, contaminants, radioactivity,
and any other substances or forces of any kind, whether or not any such
substance or force is defined as hazardous or toxic under any applicable
Environmental Law, that is regulated pursuant to or could give rise to liability
under any applicable Environmental Law.

 

“Mortgages”: each of the mortgages and deeds of trust made by any Loan Party in
favor of, or for the benefit of, the Administrative Agent for the benefit of the
Secured Parties, in form and substance reasonably satisfactory to the
Administrative Agent, as the same may be amended, supplemented or otherwise
modified from time to time.

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“Multiemployer Plan”: a Plan that is a multiemployer plan as defined in Section
4001(a)(3) of ERISA.

 

“Net Cash Proceeds”: (a) with respect to any Asset Sale, the proceeds of such
Asset Sale in the form of cash or cash equivalents, including payments in
respect of deferred payment obligations (to the extent corresponding to the
principal, but not interest, component thereof) when received in the form of
cash or cash equivalents (except to the extent such obligations are financed or
sold with recourse to Parent or any of its Restricted Subsidiaries) and proceeds
from the conversion of other property received when converted to cash or cash
equivalents, net of, without duplication, (i) brokerage commissions and other
fees and expenses (including fees and expenses of counsel and investment
bankers) related to such Asset Sale and any relocation or severance expenses
incurred as a result thereof, (ii) provisions for all taxes (whether or not such
taxes will actually be paid or are payable) as a result of such Asset Sale
without regard to the consolidated results of operations of Parent and its
Restricted Subsidiaries, taken as a whole, (iii) payments made to repay
Indebtedness or any other obligation outstanding at the time of such Asset Sale
that either (A) is secured by a Lien on the property or assets sold or (B) is
required to be paid as a result of such sale, (iv) all distributions and other
payments required to be made to minority interest holders in Restricted
Subsidiaries as a result of such Asset Sale; (v) appropriate amounts to be
provided by Parent or any of its Restricted Subsidiaries as a reserve against
any liabilities associated with such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale, all as determined in conformity with GAAP, and
(vi) any reserves that the Board of Directors of Parent determines in good faith
should be made in respect of the sale price of the property or assets subject to
such Asset Sale for post-closing adjustments, provided that upon resolution of
any such adjustments any reserves, to the extent such reserves exceed any
amounts paid as a result of such adjustment, shall become Net Cash Proceeds; and
(b) with respect to any issuance or sale of Capital Stock, the proceeds of such
issuance or sale in the form of cash or cash equivalents, including payments in
respect of deferred payment obligations (to the extent corresponding to the
principal, but not interest, component thereof) when received in the form of
cash or cash equivalents (except to the extent such obligations are financed or
sold with recourse to Parent or any of its Restricted Subsidiaries) and proceeds
from the conversion of other property received when converted to cash or cash
equivalents, net of attorney’s fees, accountants’ fees, underwriters’ or
placement agents’ fees, discounts or commissions and brokerage, consultant and
other fees incurred in connection with such issuance or sale and net of taxes
paid or payable as a result thereof.

 

“Non-Disclosure Acknowledgement Agreements”: as defined in Section 9.10.

 

“Non-Excluded Taxes”: as defined in Section 2.15(a).

 

“Non-U.S. Lender”: as defined in Section 2.15(d).

 

“Note”: any promissory note evidencing any Loan.

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“Obligations”: the unpaid principal of and interest on (including, without
limitation, interest accruing after the maturity of the Loans and interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) the Loans and all other obligations and liabilities of the
Borrower to the Administrative Agent or to any Lender or any Qualified
Counterparty, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, this Agreement, any other Loan Document, any
Specified Hedge Agreement or any other document made, delivered or given in
connection herewith or therewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including,
without limitation, all reasonable fees, charges and disbursements of counsel to
the Administrative Agent or to any Lender that are required to be paid by the
Borrower pursuant hereto) or otherwise; provided, that (i) obligations of the
Borrower or any Subsidiary under any Specified Hedge Agreement shall be secured
and guaranteed pursuant to the Security Documents only to the extent that, and
for so long as, the other Obligations are so secured and guaranteed and (ii) any
release of Collateral or Guarantors effected in the manner permitted by this
Agreement shall not require the consent of holders of obligations under
Specified Hedge Agreements.

 

“Obligors”: collectively, Parent and the Borrower.

 

“Officer’s Certificate”: with respect to the Borrower or Parent, a certificate
signed by the Chairman, the President, a Vice President, the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of the Borrower or
Parent (as applicable) and delivered to the Administrative Agent.

 

“Opinion of Counsel”: a written opinion of counsel, who may be counsel for
Parent or the Borrower, including an employee of Parent or the Borrower, and who
shall be acceptable to the Administrative Agent.

 

“Other Taxes”: 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 or any other Loan Document.

 

“Parent Indebtedness to Consolidated Cash Flow Ratio”: as defined in Section
6.2.

 

“Parent Indenture”: the Indenture, dated as of October 15, 1999, between Parent
and First Union National Bank, as trustee, pursuant to which Parent’s 12¾%
Series B Senior Notes due 2009 are outstanding.

 

“Participant”: as defined in Section 9.6(b).

 

“Payment Office”: the office specified from time to time by the Administrative
Agent as its payment office by notice to the Borrower and the Lenders.

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“PBGC”: the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (or any successor).

 

“Percentage”: as to any Lender at any time, the percentage which such Lender’s
Commitment then constitutes of the aggregate Commitments (or, at any time after
the Closing Date, the percentage which the principal amount of such Lender’s
Loan then outstanding constitutes of the aggregate principal amount of the Loans
then outstanding).

 

“Permitted Business”: the business of (i) transmitting, or providing services,
including consulting services, relating to the transmission of, voice, video or
data through owned or leased transmission facilities or through wireless or
internet protocols and facilities, (ii) constructing, creating, developing or
marketing communications related network equipment, software and other devices
for use in a telecommunications business or (iii) evaluating, participating in
or pursuing any other activity or opportunity that is primarily related to those
identified in clause (i) or (ii) above; provided that the determination of what
constitutes a Permitted Business shall be made in good faith by the Board of
Directors of Parent, whose determination shall be conclusive and evidenced by a
Board Resolution.

 

“Permitted Investment”: (i) an Investment in a Restricted Subsidiary of Parent
or a Person which will, upon the making of such Investment, become a Restricted
Subsidiary of Parent or be merged or consolidated with or into or transfer or
convey all or substantially all its assets to, Parent or a Restricted Subsidiary
of Parent; (ii) any Investment in Marketable Securities; (iii) payroll, travel
and similar advances to cover matters that are expected at the time of such
advances ultimately to be treated as expenses in accordance with GAAP; (iv)
loans or advances to employees made in the ordinary course of business in
accordance with past practice of Parent or its Restricted Subsidiaries and that
do not in the aggregate exceed $5,000,000 at any time outstanding; (v) stock,
obligations or securities received in satisfaction of judgments or received in
connection with the restructuring or workout of obligations of, or the
bankruptcy of, suppliers, or customers, or received pursuant to a plan of
reorganization of any supplier or customer in settlement of delinquent
obligations or disputes with customers or suppliers; (vi) any Investments
arising under Currency Agreements and Interest Rate Agreements designed solely
to protect Parent or any of its Restricted Subsidiaries against fluctuations in
foreign currency exchange rates or interest rates; (vii) any Guarantee of the
Loans; (viii) Investments in any Person or Persons received as consideration for
Asset Sales by Parent or any of its Restricted Subsidiaries to the extent
permitted under Section 6.8; (ix) Investments in any Person at any one time
outstanding (measured on the date each such Investment was made without giving
effect to subsequent changes in value) in an aggregate amount not to exceed
10.0% of Parent’s total consolidated assets; (x) an Investment in no more than
one entity identified in an Officer’s Certificate delivered to the
Administrative Agent equal to the excess of (i) the Fair Market Value of the
Voting Stock and other Investments remaining in such entity upon the date it no
longer constitutes a Restricted Subsidiary over (ii) the amount that would then
be permitted to be made as a Restricted Payment or Permitted Investment under
Section 6.3 and this definition of “Permitted Investments”; provided that the
amount of such excess shall be included in calculating whether the conditions of
clause (C) of the first paragraph of Section 6.3 have been met with respect to
any subsequent Restricted Payments; and (xi) Investments existing on January 16,
2004.

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“Permitted Liens”: (i) Liens for taxes, assessments, governmental charges or
claims that are not yet delinquent that are being contested in good faith by
appropriate legal proceedings promptly instituted and diligently conducted and
for which a reserve or other appropriate provision, if any, as shall be required
in conformity with GAAP shall have been made; (ii) statutory Liens of landlords
and carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or
other similar Liens arising in the ordinary course of business and with respect
to amounts not yet delinquent or being contested in good faith by appropriate
legal proceedings promptly instituted and diligently conducted and for which a
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made; (iii) Liens incurred or deposits made
in the ordinary course of business in connection with workers’ compensation,
unemployment insurance and other types of social security; (iv) Liens incurred
or deposits made to secure the performance of tenders, bids, leases, trade
contracts, statutory or regulatory obligations, bankers’ acceptances, surety and
appeal bonds, government contracts, performance and return-of-money bonds and
other obligations of a similar nature incurred in the ordinary course of
business (exclusive of obligations for the payment of borrowed money); (v)
easements, rights-of-way, municipal and zoning and building ordinances and
similar charges, encumbrances, title defects or other irregularities,
governmental restrictions on the use of property or conduct of business, and
liens in favor of governmental authorities and public utilities, that do not
materially interfere with the ordinary course of business of Parent or any of
its Restricted Subsidiaries, taken as a whole; (vi) Liens (including extensions
and renewals thereof) upon real or personal property purchased or leased after
the Closing Date; provided that (a) such Lien is created solely for the purpose
of securing Indebtedness Incurred in compliance with Section 6.2 (1) to finance
the cost (including the cost of design, development, construction, acquisition,
installation, improvement or integration) of the item of property or assets
subject thereto and such Lien is created prior to, at the time of or within six
months after the later of the acquisition, the completion of construction or the
commencement of full operation of such property or (2) to refinance any
Indebtedness previously so secured, (b) the principal amount of the Indebtedness
secured by such Lien does not exceed 100% of such cost and (c) any such Lien
shall not extend to or cover any property or assets other than such item of
property or assets and any improvements on such item; (vii) leases or subleases
granted to others that do not materially interfere with the ordinary course of
business of Parent and its Restricted Subsidiaries, taken as a whole; (viii)
Liens encumbering property or assets under construction arising from progress or
partial payments by a customer of Parent or its Restricted Subsidiaries relating
to such property or assets; (ix) any interest or title of a lessor in the
property subject to any Capitalized Lease or operating lease; (x) Liens arising
from filing Uniform Commercial Code financing statements regarding leases; (xi)
Liens on property of, or on shares of stock or Indebtedness of, any Person
existing at the time such Person becomes, or becomes a part of, any Restricted
Subsidiary; provided that such Liens do not extend to or cover any property or
assets of Parent or any Restricted Subsidiary other than the property or assets
acquired and were not created in contemplation of such transaction; (xii) Liens
in favor of Parent or any Restricted Subsidiary; (xiii) Liens arising from the
rendering of an interim or final judgment or order against Parent or any
Restricted Subsidiary of Parent that does not give rise to an Event of Default;
(xiv) Liens securing reimbursement obligations with respect to letters of credit
that encumber documents and other property relating to such letters of credit;
(xv) Liens in favor of customs and revenue authorities arising as a matter of
law to secure payment of customs duties in connection with the importation of
goods; (xvi) Liens encumbering customary initial deposits and margin deposits

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

and other Liens that are either within the general parameters customary in the
industry or incurred in the ordinary course of business, in each case, securing
Indebtedness under Interest Rate Agreements and Currency Agreements; (xvii)
Liens arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into by Parent or any of its
Restricted Subsidiaries in the ordinary course of business in accordance with
past practice of Parent and its Restricted Subsidiaries prior to the Closing
Date; (xviii) Liens existing on the Closing Date and listed on Schedule 1.1;
(xix) [reserved]; (xx) Liens securing Indebtedness which is incurred to
refinance secured Indebtedness which is permitted to be Incurred under clause
(iv) of paragraph (b) of Section 6.2; provided that such Liens do not extend to
or cover any property or assets of Parent or any Restricted Subsidiary of Parent
other than the property or assets or, in the case of accounts receivables and
inventories and to the extent covered by the terms of the Indebtedness being
refinanced, properties or assets of the same category as the property or assets,
securing the Indebtedness being refinanced; (xxi) Liens on the property or
assets of a Restricted Subsidiary of the Borrower that is not a Subsidiary
Guarantor securing Indebtedness of such Restricted Subsidiary which Indebtedness
is permitted under this Agreement; (xxii) Liens created pursuant to the Security
Documents; (xxiv) Liens securing Indebtedness incurred in connection with the
construction, installation or financing of pollution control or abatement
facilities or other forms of industrial revenue bond financing, in each case to
the extent such Liens are on the pollution control or abatement facilities or
other property being constructed, installed or financed; (xxv) Liens extending,
renewing or replacing any of the foregoing Liens, provided that the principal
amount of Indebtedness or other obligation secured by such Lien is not increased
or the maturity thereof shortened and such Lien is not extended to cover
additional Indebtedness, obligations or property (other than, in the case of
accounts receivables and inventories, property of the same category to the
extent the terms of the Lien being extended, renewed or replaced extended to or
covered such category of property); and (xxvi) Liens on any proceeds (including
without limitation insurance, condemnation, eminent domain and analogous
proceeds) or products of any property or assets a Lien over which is a Permitted
Lien as referred to in clauses (i) through (xxv) above.

 

“Person”: an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.

 

“Plan”: at a particular time, any employee benefit plan that is covered by ERISA
and in respect of which the Borrower or a Commonly Controlled Entity is (or, if
such plan were terminated at such time, would under Section 4069 of ERISA be
deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Preferred Stock”: with respect to any Person, any and all shares, interests,
participations or other equivalents (however designated, whether voting or
non-voting) of such Person’s preferred or preference stock, whether now
outstanding or issued after the date of the Indenture, including, without
limitation, all series and classes of such preferred or preference stock.

 

“Priority Indebtedness”: (a) any Indebtedness of any Subsidiary of the Borrower
and (b) any Indebtedness of Parent or any of its Subsidiaries (including
Indebtedness in respect of the Loans) which is secured by any Lien on any of the
assets or properties of any character

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

(including, without limitation, licenses and trademarks) of Parent or any of its
Subsidiaries, or on any shares of Capital Stock or Indebtedness of any
Subsidiary of Parent; provided, that Priority Indebtedness shall not include
Indebtedness owing by any Subsidiary to Parent, the Borrower or any Subsidiary
Guarantor.

 

“Priority Indebtedness to Consolidated Cash Flow Ratio”: as defined in Section
6.2.

 

“Pro Forma Balance Sheet”: as defined in Section 3.1(a).

 

“Pro Forma Consolidated Cash Flow”: with respect to an Obligor, for any period,
the Consolidated Cash Flow of such Obligor for such period calculated on a pro
forma basis to give effect to any Asset Disposition or Asset Acquisition
(including acquisitions of other Persons by merger, consolidation or purchase of
Capital Stock) by such Obligor during such period as if such Asset Disposition
or Asset Acquisition had taken place on the first day of such period.

 

“Property”: any right or interest in or to property of any kind whatsoever,
whether real, personal or mixed and whether tangible or intangible, including,
without limitation, Capital Stock.

 

“Purchase Money Obligations”: with respect to each Person, obligations, other
than those under Capitalized Leases, Incurred or assumed in the ordinary course
of business in connection with the purchase of property to be used in the
business of such Person.

 

“Qualified Counterparty”: with respect to any Specified Hedge Agreement, any
counterparty thereto that, at the time such Specified Hedge Agreement was
entered into, was a Lender or an affiliate of a Lender.

 

“Redeemable Stock”: any class or series of Capital Stock of any Person that by
its terms or otherwise is (i) required to be redeemed prior to the Stated
Maturity of the Senior Notes, (ii) redeemable at the option of the holder of
such class or series of Capital Stock at any time prior to the Stated Maturity
of the Senior Notes or (iii) convertible into or exchangeable for Capital Stock
referred to in clause (i) or (ii) above or Indebtedness having a scheduled
maturity prior to the Stated Maturity of the Senior Notes; provided that any
Capital Stock that would not constitute Redeemable Stock but for provisions
thereof giving holders thereof the right to require such Person to repurchase or
redeem such Capital Stock upon the occurrence of an “Asset Sale” or “Change of
Control” occurring prior to the Stated Maturity of the Senior Notes will not
constitute Redeemable Stock if the “Asset Sale” or “Change of Control”
provisions applicable to such Capital Stock are no more favorable to the holders
of such Capital Stock than the provisions contained in Sections 1017 and 1010 of
the Senior Note Indenture and such Capital Stock specifically provides that such
Person will not repurchase or redeem any such stock pursuant to such provision
prior to the Borrower’s repurchase of such Senior Notes as are required pursuant
to Section 1017 and Section 1010 of the Senior Note Indenture.

 

“Register”: as defined in Section 9.6(d).

 

“Regulation H”: Regulation H of the Board as in effect from time to time.

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“Regulation U”: Regulation U of the Board as in effect from time to time.

 

“Related Fund”: with respect to any Lender, any fund that (x) invests in
commercial loans and (y) is managed or advised by the same investment advisor as
such Lender, by such Lender or an Affiliate of such Lender.

 

“Reorganization”: with respect to any Multiemployer Plan, the condition that
such plan is in reorganization within the meaning of Section 4241 of ERISA.

 

“Reportable Event”: any of the events set forth in Section 4043(c) of ERISA,
other than those events as to which the thirty day notice period is waived under
subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. § 4043.

 

“Required Lenders”: at any time, the holders of more than 50% of (a) until the
Closing Date, the Commitments and (b) thereafter, the aggregate unpaid principal
amount of the Loans then outstanding.

 

“Requirement of Law”: as to any Person, the Certificate of Incorporation and
By-Laws or other organizational or governing documents of such Person, and any
law, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its Property or to which such Person or any of its Property is
subject.

 

“Responsible Officer”: the chief executive officer, president or chief financial
officer of the Borrower, but in any event, with respect to financial matters,
the chief financial officer of the Borrower.

 

“Restricted Payments”: as defined in Section 6.3. Any Restricted Payments made
other than in cash shall be valued at Fair Market Value.

 

“Restricted Subsidiary”: with respect to any Obligor, means any Subsidiary of
such Obligor (including, in the case of Parent, the Borrower) other than an
Unrestricted Subsidiary.

 

“SEC”: the Securities and Exchange Commission (or successors thereto or an
analogous Governmental Authority).

 

“Secured Parties”: as defined in the Guarantee and Collateral Agreement.

 

“Securities Act”: the Securities Act of 1933, as amended.

 

“Security Documents”: the collective reference to the Guarantee and Collateral
Agreement, any Mortgages and all other security documents hereafter delivered to
the Administrative Agent granting a Lien on any Property of any Person to secure
the obligations and liabilities of any Loan Party under any Loan Document.

 

“Security Interest Approval Pending Subsidiary”: each Subsidiary of the Borrower
which, in the good faith opinion of the Borrower, must obtain the approval of,
or give a notice to, a Governmental Authority before granting a security
interest in such Subsidiary’s assets pursuant to the Guarantee and Collateral
Agreement.

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

“Security Interest Approval Notice”: in respect of each Security Interest
Approval Pending Subsidiary, a written notice from the Borrower to the
Administrative Agent advising that approval has been issued (or deemed issued,
in the case of any Governmental Authority whose approval is effective upon
notice to such Governmental Authority) by the relevant Governmental Authorities
permitting the grant by such Subsidiary pursuant to the Guarantee and Collateral
Agreement of a security interest in such Subsidiary’s assets (other than any
assets described in such Security Interest Approval Notice).

 

“Senior Note Indenture”: the Indenture, dated as of January 16, 2004, entered
into by the Borrower and Parent, with Wachovia Bank, National Association, as
trustee, in connection with the issuance of the Senior Notes, together with all
instruments and other agreements entered into by the Borrower or Parent in
connection therewith, as the same may be amended, supplemented or otherwise
modified from time to time.

 

“Senior Notes”: the Borrower’s 8% Series B Senior Notes due 2014 issued pursuant
to the Senior Note Indenture.

 

“Single Employer Plan”: any Plan that is covered by Title IV of ERISA, but which
is not a Multiemployer Plan.

 

“Solvent”: with respect to any Person, as of any date of determination, (a) the
amount of the “present fair saleable value” of the assets of such Person will,
as of such date, exceed the amount of all “liabilities of such Person,
contingent or otherwise”, as of such date, as such quoted terms are determined
in accordance with applicable federal and state laws governing determinations of
the insolvency of debtors, (b) the present fair saleable value of the assets of
such Person will, as of such date, be greater than the amount that will be
required to pay the liability of such Person on its debts as such debts become
absolute and matured, (c) such Person will not have, as of such date, an
unreasonably small amount of capital with which to conduct its business, and (d)
such Person will be able to pay its debts as they mature. For purposes of this
definition, (i) ”debt” means liability on a “claim”, and (ii) ”claim” means any
(x) right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured or (y) right to an equitable
remedy for breach of performance if such breach gives rise to a right to
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured
or unsecured.

 

“Specified Hedge Agreement”: any Hedge Agreement entered into by the Borrower or
any Guarantor and any Qualified Counterparty.

 

“Stated Maturity”: (i) with respect to any Indebtedness, the fixed date on which
the final scheduled installment of principal of such Indebtedness is due and
payable in accordance with the terms thereof and (ii) with respect to any
scheduled installment of principal of or interest on any Indebtedness, the fixed
date on which such installment is due and payable in accordance with the terms
thereof.

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“Subordinated Indebtedness”: (i) with respect to the Borrower, Indebtedness of
the Borrower subordinated in right of payment to the Loans and (ii) with respect
to Parent, Indebtedness of Parent subordinated in right of payment to Parent’s
Guarantee pursuant to the Guarantee and Collateral Agreement.

 

“Subsidiary”: as to any Person, a corporation, partnership, limited liability
company or other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more intermediaries,
or both, by such Person. Unless otherwise qualified, all references to a
“Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Borrower.

 

“Subsidiary Guarantor”: each Subsidiary of the Borrower that is a party to the
Guarantee and Collateral Agreement.

 

“Syndication Agent”: as defined in the preamble hereto.

 

“Trade Payables”: any accounts payable or any other indebtedness or monetary
obligation to trade creditors created, assumed or Guaranteed by Parent or any of
its Restricted Subsidiaries arising in the ordinary course of business in
connection with the acquisition of goods and services.

 

“Transaction Date”: with respect to the Incurrence of any Indebtedness by
Parent, the Borrower or any of its Restricted Subsidiaries that is a Subsidiary
Guarantor, the date such Indebtedness is to be Incurred and, with respect to any
Restricted Payment, the date such Restricted Payment is to be made.

 

“Transferee”: as defined in Section 9.14.

 

“Type”: as to any Loan, its nature as a Base Rate Loan or a Eurodollar Loan.

 

“Unclaimed Excess Proceeds”: the amount of Excess Proceeds (as defined in the
Senior Note Indenture as in effect on the date hereof) remaining immediately
after the required portion of such Excess Proceeds is used to prepay the Loans
in accordance with Section 2.7 and to make and consummate an offer to purchase
Senior Notes in accordance with Section 1017 of the Senior Note Indenture.

 

“Unrestricted Subsidiary”: (i) any Subsidiary of Parent (other than the
Borrower) that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors in the manner provided below and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors of Parent may
designate any Restricted Subsidiary of Parent (including any newly acquired or
newly formed Subsidiary of Parent) other than the Borrower to be an Unrestricted
Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or holds
any Lien on any property of, Parent or any Restricted Subsidiary; provided that
(A) either (I) the Subsidiary to be so designated has total assets of $1,000 or
less or (II) if such Subsidiary has

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

assets greater than $1,000, that such designation would be permitted under
Section 6.3, and (B) such Subsidiary is not liable, directly or indirectly, with
respect to any Indebtedness other than Unrestricted Subsidiary Indebtedness. The
Board of Directors of Parent may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary of Parent; provided that immediately after giving effect
to such designation (x) (1) in the case of Subsidiaries of Parent that are not
also Subsidiaries of the Borrower, Parent could Incur $1.00 of additional
Indebtedness under clause (i) of paragraph (a) of Section 6.2 and (2) in the
case of Subsidiaries of the Borrower, the Borrower could Incur $1.00 of
additional Indebtedness under clause (ii) of paragraph (a) of Section 6.2 and
(y) no Default or Event of Default shall have occurred and be continuing. Any
such designation by the Board of Directors shall be evidenced to the
Administration Agent by promptly filing with the Administrative Agent a copy of
the Board Resolution giving effect to such designation and an Officer’s
Certificate certifying that such designation complied with the foregoing
provisions.

 

“Unrestricted Subsidiary Indebtedness”: Indebtedness of any Unrestricted
Subsidiary (i) as to which neither Parent nor any Restricted Subsidiary is
directly or indirectly liable (by virtue of Parent or any such Restricted
Subsidiary being the primary obligor on, guarantor of, or otherwise liable in
any respect to, such Indebtedness), and (ii) which, upon the occurrence of a
default with respect thereto, does not result in, or permit any holder of any
Indebtedness of Parent or any Restricted Subsidiary to declare, a default on
such Indebtedness of Parent or any Restricted Subsidiary or cause the payment
thereof to be accelerated or payable prior to its Stated Maturity.

 

“Voting Stock”: with respect to any Person, Capital Stock of any class or kind
ordinarily having the power to vote for the election of directors, managers or
other voting members of the governing body of such Person.

 

1.2. Other Definitional Provisions. (a) Unless otherwise specified therein, all
terms defined in this Agreement shall have the defined meanings when used in the
other Loan Documents or any certificate or other document made or delivered
pursuant hereto or thereto.

 

(b) As used herein and in the other Loan Documents, and any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms relating
to Parent, the Borrower and its Subsidiaries not defined in Section 1.1 and
accounting terms partly defined in Section 1.1, to the extent not defined, shall
have the respective meanings given to them under GAAP.

 

(c) The words “hereof”, “herein” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified.

 

(d) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

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SECTION 2. AMOUNT AND TERMS OF COMMITMENTS

 

2.1. Commitments. Subject to the terms and conditions hereof, the Lenders
severally agree to make term loans (each, a “Loan”) to the Borrower on the
Closing Date in an amount for each Lender not to exceed the amount of the
Commitment of such Lender. The Loans may from time to time be Eurodollar Loans
or Base Rate Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.2 and 2.8.

 

2.2. Procedure for Borrowing. The Borrower shall deliver to the Administrative
Agent a Borrowing Notice (which Borrowing Notice must be received by the
Administrative Agent prior to 10:00 A.M., New York City time, on the anticipated
Closing Date) requesting that the Lenders make the Loans on the Closing Date.
The Loans made on the Closing Date shall initially be Base Rate Loans, and no
Loan may be converted into or continued as a Eurodollar Loan having an Interest
Period in excess of one month prior to the date which is 3 Business Days after
the Closing Date. Upon receipt of such Borrowing Notice the Administrative Agent
shall promptly notify each Lender thereof. Not later than 12:00 Noon, New York
City time, on the Closing Date each Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately available
funds equal to the Loan to be made by such Lender. The Administrative Agent
shall make available to the Borrower the aggregate of the amounts made available
to the Administrative Agent by the Lenders, in like funds as received by the
Administrative Agent.

 

2.3. Repayment of Loans. (a) The Loan of each Lender shall mature in 24
consecutive quarterly installments, commencing on June 30, 2005, each of which
shall be in an amount equal to such Lender’s Percentage multiplied by the amount
set forth below opposite such installment:

 

Installment

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

   Principal Amount

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

June 30, 2005

   250,000

September 30, 2005

   250,000

December 31, 2005

   250,000

March 31, 2006

   250,000

June 30, 2006

   250,000

September 30, 2006

   250,000

December 31, 2006

   250,000

March 31, 2007

   250,000

June 30, 2007

   250,000

September 30, 2007

   250,000

December 31, 2007

   250,000

March 31, 2008

   250,000

June 30, 2008

   250,000

September 30, 2008

   250,000

December 31, 2008

   250,000

March 31, 2009

   250,000

June 30, 2009

   250,000

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

Installment

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

   Principal Amount

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

September 30, 2009

   250,000

December 31, 2009

   250,000

March 31, 2010

   250,000

June 30, 2010

   250,000

September 30, 2010

   250,000

December 31, 2010

   250,000

February 18, 2011

   94,250,000

 

(b) Notwithstanding the foregoing, if the aggregate principal amount of Loans
made on the Closing Date is less than the aggregate amount of the Commitments,
the amount of each relevant principal installment set forth in paragraph (a)
above shall be proportionally reduced to reflect such lesser amount so borrowed.

 

2.4. Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the principal amount of the Loan of such Lender in installments
according to the amortization schedule set forth in Section 2.3 (or on such
earlier date on which the Loans become due and payable pursuant to Section 7).
The Borrower hereby further agrees to pay interest on the unpaid principal
amount of the Loans from time to time outstanding from the Closing Date until
payment in full thereof at the rates per annum, and on the dates, set forth in
Section 2.10.

 

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

 

(c) The Administrative Agent, on behalf of the Borrower, shall maintain the
Register pursuant to Section 9.6(d), and a subaccount therein for each Lender,
in which shall be recorded (i) the amount of each Loan made hereunder and any
Note evidencing such Loan, the Type of such Loan and each 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) both the amount of any sum received by the Administrative Agent hereunder
from the Borrower and each Lender’s share thereof.

 

(d) The entries made in the Register and the accounts of each Lender maintained
pursuant to Section 2.4(b) shall, to the extent permitted by applicable law, be
prima facie evidence of the existence and amounts of the obligations of the
Borrower therein recorded; provided, however, that the Register shall control in
the event of conflict; provided, further, that the failure of any Lender or the
Administrative Agent to maintain the Register or any such account, or any error
therein, shall not in any manner affect the obligation of the Borrower to repay
(with applicable interest) the Loans made to the Borrower by such Lender in
accordance with the terms of this Agreement.

 

(e) The Borrower agrees that, upon the request to the Administrative Agent by
any Lender, the Borrower will promptly execute and deliver to such Lender a
promissory note of

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the Borrower evidencing the Loan of such Lender, substantially in the form of
Exhibit F (a “Note”), with appropriate insertions as to date and principal
amount; provided, that delivery of Notes shall not be a condition precedent to
the occurrence of the Closing Date or the making of the Loans on the Closing
Date.

 

2.5. Fees, etc. (a) The Borrower agrees to pay to the Syndication Agent the fees
in the amounts and on the dates previously agreed to in writing by the Borrower
and the Syndication Agent.

 

(b) The Borrower agrees to pay to the Administrative Agent the fees in the
amounts and on the dates from time to time agreed to in writing by the Borrower
and the Administrative Agent.

 

2.6. Optional Prepayments. (a) The Borrower may not optionally prepay the Loans
at any time prior to the first anniversary of the Closing Date. The Borrower may
at any time and from time to time on or after the first anniversary of the
Closing Date prepay the Loans, in whole or in part, without premium or penalty
(except as otherwise provided herein), upon irrevocable notice delivered to the
Administrative Agent no later than 11:00 A.M., New York City time, three
Business Days prior thereto in the case of Eurodollar Loans and no later than
11:00 A.M., New York City time, one Business Day prior thereto in the case of
Base Rate Loans, which notice shall specify the date and amount of such
prepayment and whether such prepayment is of Eurodollar Loans or Base Rate
Loans; provided, that if a Eurodollar Loan is prepaid on any day other than the
last day of the Interest Period applicable thereto, the Borrower shall also pay
any amounts owing pursuant to Section 2.16. Upon receipt of any such notice the
Administrative Agent shall promptly notify each Lender thereof. If any such
notice is given, the amount specified in such notice shall be due and payable on
the date specified therein, together with accrued interest to such date on the
amount prepaid. Partial prepayments of Loans shall be in an aggregate principal
amount of $1,000,000 or a whole multiple thereof.

 

(b) Each optional prepayment in respect of the Loans on or prior to the fourth
anniversary of the Closing Date shall be accompanied by a prepayment fee equal
to (i) if such prepayment is made on or after the first anniversary of the
Closing Date (or on or after the Closing Date in the case of a prepayment upon a
Change of Control) and prior to the second anniversary of the Closing Date, 3%
of the principal amount that is the subject of such prepayment, (ii) if such
prepayment is made on or after the second anniversary of the Closing Date and
prior to the third anniversary of the Closing Date, 2% of the principal amount
that is the subject of such prepayment and (iii) if such prepayment is made on
or after the third anniversary of the Closing Date and on or prior to the fourth
anniversary of the Closing Date, 1% of the principal amount that is the subject
of such prepayment. For purposes of this Section, any prepayment of the Loans
upon the refinancing thereof (whether with proceeds of equity or Indebtedness)
or upon the occurrence of a Change of Control shall be deemed to be an optional
prepayment. Any prepayment pursuant to Section 2.6(b) after the fourth
anniversary of the Closing Date may be made without premium or penalty.

 

2.7. Mandatory Prepayments (a) Except for dispositions of Capital Stock of the
Lingo Subsidiary in the Lingo Offering (which shall be governed by Section
2.7(b)), not less than 30 days prior to any day (each, an “Indenture Prepayment
Date”) on which an amount equal

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to all or any portion of the Net Cash Proceeds of any Asset Sale would be
required by the Senior Note Indenture to be subject to an offer to purchase
outstanding notes of the Borrower, including the Senior Notes (the amount to be
so applied, the “Asset Sale Prepayment Amount”), the Borrower shall give the
Administrative Agent telephonic notice (promptly confirmed in writing)
requesting that the Administrative Agent prepare and provide to each Lender a
notice (each, an “Asset Sale Prepayment Option Notice”) as described below in
this paragraph. As promptly as practicable after receiving such notice from the
Borrower, the Administrative Agent will send to each Lender an Asset Sale
Prepayment Option Notice, which will include an offer by the Borrower to prepay,
at par, without premium or penalty, on the date that is ten days prior to the
Indenture Prepayment Date, the Loan of such Lender by an amount equal to such
Lender’s Percentage of the Asset Sale Prepayment Amount. Each Lender shall
return a completed Asset Sale Prepayment Option Notice to the Administrative
Agent no later than three Business Days prior to the mandatory prepayment date
specified in the applicable Asset Sale Prepayment Option Notice (each an “Asset
Sale Mandatory Prepayment Date”), with the failure to so return such notice
being deemed to constitute a rejection of the relevant prepayment offer. On each
Asset Sale Mandatory Prepayment Date, the Borrower shall pay to the Lenders the
aggregate amount necessary to prepay that portion of the outstanding Loans in
respect of which such Lenders have accepted prepayment as described above in
this paragraph.

 

(b) Not less than 10 days after the receipt by Parent or any of its Subsidiaries
of any Net Cash Proceeds of the Lingo Offering (“Lingo Proceeds”), unless on or
prior to such date the Borrower shall have executed and delivered to the
Administrative Agent a Lingo Investment Certificate in respect of 100% of the
Lingo Proceeds, the Borrower shall give the Administrative Agent telephonic
notice (promptly confirmed in writing) requesting that the Administrative Agent
prepare and provide to each Lender a notice (a “Lingo Prepayment Option Notice”)
as described below in this paragraph. As promptly as practicable after receiving
such notice from the Borrower, the Administrative Agent will send to each Lender
a Lingo Prepayment Option Notice, which will include an offer by the Borrower to
prepay on the date (the “Lingo Prepayment Date”) set forth in the Lingo
Prepayment Option Notice (the Lingo Prepayment Date being in any event not less
than 20, and not more than 30, days after such Lingo Prepayment Option Notice is
sent to the Lenders), the portion of the Loan of such Lender in an amount equal
to such Lender’s Percentage of the amount of Lingo Proceeds not covered by the
Lingo Investment Certificate (the “Lingo Pro-Rata Prepayment Offer Amount”).
Each Lender shall return a Lingo Prepayment Option Notice to the Administrative
Agent completed to indicate acceptance of all, part or none of the Lingo
Pro-Rata Prepayment Offer Amount no later than three Business Days prior to the
Lingo Prepayment Date, with the failure to so return such notice being deemed to
constitute a rejection of the prepayment offer. On the Lingo Prepayment Date,
the Borrower shall pay to the Lenders the aggregate amount necessary to prepay,
consistent with the terms hereof, that portion of the outstanding Loans in
respect of which such Lenders have accepted prepayment as described above in
this paragraph.

 

(c) Each prepayment of a Loan pursuant to this Section 2.7 shall be applied to
the remaining installments thereof, ratably in accordance with the outstanding
amounts thereof. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.10.

 

(d) Any prepayment pursuant to Section 2.7(b) on or prior to the fourth
anniversary of the Closing Date shall be accompanied by a prepayment fee equal
to (i) if such

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prepayment is made prior to the second anniversary of the Closing Date, 3% of
the principal amount of such accepted prepayment, (ii) if such prepayment is
made on or after the second anniversary of the Closing Date and prior to the
third anniversary of the Closing Date, 2% of the principal amount of such
accepted prepayment and (iii) if such prepayment is made on or after the third
anniversary of the Closing Date and on or prior to the fourth anniversary of the
Closing Date, 1% of the principal amount of such accepted prepayment. Any
prepayment pursuant to Section 2.7(b) after the fourth anniversary of the
Closing Date may be made without premium or penalty.

 

2.8. Conversion and Continuation Options. (a) The Borrower may elect from time
to time to convert Eurodollar Loans to Base Rate Loans by giving the
Administrative Agent at least two Business Days’ prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may be made
only on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert Base Rate Loans to Eurodollar Loans by
giving the Administrative Agent at least three Business Days’ prior irrevocable
notice of such election (which notice shall specify the length of the initial
Interest Period therefor), provided that no Base Rate Loan may be converted into
a Eurodollar Loan (i) when any Event of Default has occurred and is continuing
and the Administrative Agent has, or the Required Lenders have, determined in
its or their sole discretion not to permit such conversions or (ii) after the
date that is one month prior to the final scheduled maturity date of the Loans.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each relevant Lender thereof.

 

(b) The Borrower may elect to continue any Eurodollar Loan as such upon the
expiration of the then current Interest Period with respect thereto by giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term “Interest Period” set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loan, provided
that no Eurodollar Loan may be continued as such (i) when any Event of Default
has occurred and is continuing and the Administrative Agent has, or the Required
Lenders have, determined in its or their sole discretion not to permit such
continuations or (ii) after the date that is one month prior to the final
scheduled maturity date of the Loans, and provided, further, that if the
Borrower shall fail to give any required notice as described above in this
paragraph or if such continuation is not permitted pursuant to the preceding
proviso, such Loans shall be converted automatically to Base Rate Loans on the
last day of such then expiring Interest Period. Upon receipt of any such notice
the Administrative Agent shall promptly notify each relevant Lender thereof.

 

2.9. Minimum Amounts and Maximum Number of Eurodollar Tranches. Notwithstanding
anything to the contrary in this Agreement, all borrowings, conversions,
continuations and optional prepayments of Eurodollar Loans and all selections of
Interest Periods shall be in such amounts and be made pursuant to such elections
so that, (a) after giving effect thereto, the aggregate principal amount of the
Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $5,000,000
or a whole multiple of $1,000,000 in excess thereof and (b) no more than ten
Eurodollar Tranches shall be outstanding at any one time.

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2.10. Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear
interest during each Interest Period with respect thereto at a rate per annum
equal to the Eurodollar Rate determined for such Interest Period plus the
Applicable Margin.

 

(b) Each Base Rate Loan shall bear interest for each day on which it is
outstanding at a rate per annum equal to the Base Rate in effect for such day
plus the Applicable Margin in effect for such day.

 

(c) (i) If all or a portion of the principal amount of any Loan shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
all outstanding Loans (whether or not overdue) (to the extent legally permitted)
shall bear interest at a rate per annum that is equal to the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
Section plus 2%, and (ii) if all or a portion of any interest payable on any
Loan or any other amount payable hereunder (excluding principal) shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest at a rate per annum equal to the rate
then applicable to Base Rate Loans plus 2%, in each case, with respect to
clauses (i) and (ii) above, from the date of such non-payment until such amount
is paid in full (after as well as before judgment).

 

(d) Interest shall be payable in arrears on each Interest Payment Date, provided
that interest accruing pursuant to paragraph (c) of this Section shall be
payable from time to time on demand.

 

2.11. Computation of Interest and Fees. (a) Interest, fees and commissions
payable pursuant hereto shall be calculated on the basis of a 360-day year for
the actual days elapsed, except that, with respect to Base Rate Loans on which
interest is calculated on the basis of the Prime Rate, the interest thereon
shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the Base Rate or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.

 

(b) Each determination of an interest rate by the Administrative Agent pursuant
to any provision of this Agreement shall be conclusive and binding on the
Borrower and the Lenders in the absence of manifest error. The Administrative
Agent shall, at the request of the Borrower, deliver to the Borrower a statement
showing the quotations used by the Administrative Agent in determining any
interest rate pursuant to Section 2.10(a) or Section 2.10(b).

 

2.12. Inability to Determine Interest Rate. If prior to the first day of any
Interest Period:

 

(a) the Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period, or

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(b) the Administrative Agent shall have received notice from the Required
Lenders that the Eurodollar Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,

 

the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as Base Rate Loans, (y) any Loans that were to
have been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as Base Rate Loans and (z) any outstanding Eurodollar Loans
shall be converted, on the last day of the then current Interest Period with
respect thereto, to Base Rate Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans shall be made or continued as
such, nor shall the Borrower have the right to convert Loans to Eurodollar
Loans.

 

2.13. Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower from
the Lenders hereunder shall be made pro rata according to the respective
Percentages of the Lenders. Each payment of interest in respect of the Loans and
each payment in respect of fees payable hereunder shall be applied to the
amounts of such obligations owing to the Lenders pro rata according to the
respective amounts then due and owing to the Lenders.

 

(b) Except as provided in Section 2.7, each payment on account of principal of
the Loans shall be allocated among the Lenders pro rata based on the principal
amount of the Loans held by such Lenders, and shall be applied to the
installments of the Loans in the order of the scheduled maturities of such
installments and ratably in accordance with the outstanding amounts thereof.
Amounts prepaid on account of the Loans may not be reborrowed.

 

(c) The application of any payment of Loans (including optional and mandatory
prepayments) shall be made, first, to Base Rate Loans and, second, to Eurodollar
Loans. Each payment of the Loans shall be accompanied by accrued interest to the
date of such payment on the amount paid.

 

(d) All payments (including prepayments) to be made by the Borrower hereunder,
whether on account of principal, interest, fees or otherwise, shall be made
without setoff or counterclaim and shall be made prior to 12:00 Noon, New York
City time, on the due date thereof to the Administrative Agent, for the account
of the Lenders, at the Payment Office, in Dollars and in immediately available
funds. Any payment made by the Borrower after 12:00 Noon, New York City time, on
any Business Day shall be deemed to have been on the next following Business
Day. If any payment hereunder (other than payments on the Eurodollar Loans)
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day. If any payment on a Eurodollar
Loan becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the result
of such extension would be to extend such payment into another calendar month,
in which event such payment shall be made on the

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immediately preceding Business Day. In the case of any extension of any payment
of principal pursuant to the preceding two sentences, interest thereon shall be
payable at the then applicable rate during such extension.

 

(e) Unless the Administrative Agent shall have been notified in writing by any
Lender prior to a borrowing that such Lender will not make the amount that would
constitute its share of such borrowing available to the Administrative Agent,
the Administrative Agent may assume that such Lender is making such amount
available to the Administrative Agent, and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. If such amount is not made available to the Administrative Agent by the
required time on the Borrowing Date therefor, such Lender shall pay to the
Administrative Agent, on demand, such amount with interest thereon at a rate
equal to the greater of (i) the Federal Funds Effective Rate and (ii) a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation, for the period until such Lender makes such amount
immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this paragraph shall be conclusive in the absence of manifest error. If
such Lender’s share of such borrowing is not made available to the
Administrative Agent by such Lender within three Business Days after such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to Base Rate
Loans, on demand, from the Borrower.

 

(f) Unless the Administrative Agent shall have been notified in writing by the
Borrower prior to the date of any payment due to be made by the Borrower
hereunder that the Borrower will not make such payment to the Administrative
Agent, the Administrative Agent may assume that the Borrower is making such
payment, and the Administrative Agent may, but shall not be required to, in
reliance upon such assumption, make available to the Lenders their respective
pro rata shares of a corresponding amount. If such payment is not made to the
Administrative Agent by the Borrower within three Business Days after such due
date, the Administrative Agent shall be entitled to recover, on demand, from
each Lender to which any amount was made available pursuant to the preceding
sentence, such amount with interest thereon at the rate per annum equal to the
daily average Federal Funds Effective Rate. Nothing herein shall be deemed to
limit the rights of the Administrative Agent or any Lender against the Borrower.

 

(g) Upon receipt by the Administrative Agent of payments on behalf of Lenders,
the Administrative Agent shall promptly distribute such payments to the Lender
or Lenders entitled thereto, in like funds as received by the Administrative
Agent.

 

2.14. Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:

 

(i) shall subject any Lender to any tax of any kind whatsoever with respect to
this Agreement or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for Non-Excluded
Taxes covered by Section 2.15 and changes in the rate of tax on the overall net
income of such Lender);

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(ii) shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other extensions of
credit by, or any other acquisition of funds by, any office of such Lender that
is not otherwise included in the determination of the Eurodollar Rate hereunder;
or

 

(iii) shall impose on such Lender any other condition;

 

and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable;
provided that the Borrower shall not be required to compensate a Lender pursuant
to this paragraph for any increased costs or reduced amounts paid or incurred
more than six months prior to the date that such Lender notifies the Borrower of
such Lender’s intention to claim compensation therefor; and provided further
that, if the circumstances giving rise to such claim have a retroactive effect,
then such six-month period shall be extended to include the period of such
retroactive effect. If any Lender becomes entitled to claim any additional
amounts pursuant to this Section, it shall promptly notify the Borrower (with a
copy to the Administrative Agent) of the event by reason of which it has become
so entitled, setting forth in such notice, in reasonable detail, the basis and
calculation of such amount.

 

(b) If any Lender shall have determined that the adoption of or any change in
any Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Lender or any corporation controlling
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental Authority made subsequent to
the date hereof shall have the effect of reducing the rate of return on such
Lender’s or such corporation’s capital as a consequence of its obligations
hereunder to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender’s or such corporation’s policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such corporation
for such reduction; provided that the Borrower shall not be required to
compensate a Lender pursuant to this paragraph for any amounts incurred more
than six months prior to the date that such Lender notifies the Borrower of such
Lender’s intention to claim compensation therefor; and provided further that, if
the circumstances giving rise to such claim have a retroactive effect, then such
six-month period shall be extended to include the period of such retroactive
effect.

 

(c) A certificate as to any additional amounts payable pursuant to this Section
submitted by any Lender to the Borrower (with a copy to the Administrative
Agent), setting forth in such certificate, in reasonable detail, the basis and
calculation of such amount, shall be

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conclusive in the absence of manifest error. The obligations of the Borrower
pursuant to this Section shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.

 

2.15. Taxes. (a) All payments made by the Borrower under this Agreement shall be
made free and clear of, and without deduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, excluding net
income taxes and franchise taxes (imposed in lieu of net income taxes) imposed
on any Agent or any Lender as a result of a present or former connection between
such Agent or such Lender and the jurisdiction of the Governmental Authority
imposing such tax or any political subdivision or taxing authority thereof or
therein (other than any such connection arising solely from such Agent’s or such
Lender’s having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any other Loan Document). If any
such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings (“Non-Excluded Taxes”) or any Other Taxes are required to be
withheld from any amounts payable to any Agent or any Lender hereunder, the
amounts so payable to such Agent or such Lender shall be increased to the extent
necessary to yield to such Agent or such Lender (after payment of all
Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement; provided,
however, that the Borrower shall not be required to increase any such amounts
payable to any Lender with respect to any Non-Excluded Taxes (i) that are
attributable to such Lender’s failure to comply with the requirements of
paragraph (d) or (e) of this Section or (ii) that are United States withholding
taxes imposed on amounts payable to such Lender at the time such Lender becomes
a party to this Agreement, except to the extent that such Lender’s assignor (if
any) was entitled, at the time of assignment, to receive additional amounts from
the Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph
(a).

 

(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

 

(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the Borrower,
as promptly as possible thereafter the Borrower shall send to the Administrative
Agent for the account of the relevant Agent or Lender, as the case may be, a
certified copy of an original official receipt received by the Borrower showing
payment thereof. If the Borrower fails to pay any Non-Excluded Taxes or Other
Taxes when due to the appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required documentary
evidence, the Borrower shall indemnify the Agents and the Lenders for any
incremental taxes, interest or penalties that may become payable by any Agent or
any Lender as a result of any such failure. The agreements in this Section shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.

 

(d) Each Lender (or Transferee) that is not a “U.S. Person” as defined in
Section 7701(a)(30) of the Code (a “Non-U.S. Lender”) shall deliver to the
Borrower and the Administrative Agent (or, in the case of a Participant, to the
Lender from which the related participation shall have been purchased) two
copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or,
in the case of a Non-U.S. Lender claiming exemption from

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U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with
respect to payments of “portfolio interest”, a statement substantially in the
form of Exhibit G and a Form W-8BEN, or any subsequent versions thereof or
successors thereto properly completed and duly executed by such Non-U.S. Lender
claiming complete exemption from, or a reduced rate of, U.S. federal withholding
tax on all payments by the Borrower under this Agreement and the other Loan
Documents. Such forms shall be delivered by each Non-U.S. Lender on or before
the date it becomes a party to this Agreement (or, in the case of any
Participant, on or before the date such Participant purchases the related
participation). In addition, each Non-U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered by
such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the Borrower at
any time it determines that it is no longer in a position to provide any
previously delivered certificate to the Borrower (or any other form of
certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall
not be required to deliver any form pursuant to this paragraph that such
Non-U.S. Lender is not legally able to deliver.

 

(e) A Lender that is entitled to an exemption from or reduction of non-U.S.
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender’s reasonable judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.

 

(f) If a Lender receives a refund, credit or other tax benefit for which a
payment has been made by the Borrower pursuant to this Section 2.15, which
refund, credit or other tax benefit in the good faith judgment of such Lender is
attributable to such payment made by the Borrower, then such Lender shall
reimburse the Borrower for such amount as such Lender determines in good faith
to be the proportion of the refund, credit or other tax benefit as will leave
it, after such reimbursement, in the same position it would have been in if the
payment of such tax and any payment by the Borrower under this Section 2.15 had
not been made.

 

2.16. Indemnity. The Borrower agrees to indemnify each Lender for, and to hold
each Lender harmless from, any loss or expense that such Lender may sustain or
incur as a consequence of (a) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has given
a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment or conversion of Eurodollar Loans on
a day that is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest that would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest

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Period that would have commenced on the date of such failure) in each case at
the applicable rate of interest for such Loans provided for herein (excluding,
however, the Applicable Margin included therein, if any) over (ii) the amount of
interest (as reasonably determined by such Lender) that would have accrued to
such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank Eurodollar market. A certificate as
to any amounts payable pursuant to this Section submitted to the Borrower by any
Lender shall be conclusive in the absence of manifest error. This covenant shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.

 

2.17. Illegality. Notwithstanding any other provision herein, if the adoption of
or any change in any Requirement of Law or in the interpretation or application
thereof shall make it unlawful for any Lender to make or maintain Eurodollar
Loans as contemplated by this Agreement, (a) the commitment of such Lender
hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled and (b)
such Lender’s Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 2.16.

 

2.18. Change of Lending Office. Each Lender agrees that, upon the occurrence of
any event giving rise to the operation of Section 2.14, 2.15(a) or 2.17 with
respect to such Lender, it will, if requested by the Borrower, use reasonable
efforts (subject to overall policy considerations of such Lender) to designate
another lending office for any Loans affected by such event with the object of
avoiding the consequences of such event; provided, that such designation is made
on terms that, in the sole judgment of such Lender, cause such Lender and its
lending office(s) to suffer no economic, legal or regulatory disadvantage, and
provided, further, that nothing in this Section shall affect or postpone any of
the obligations of any Borrower or the rights of any Lender pursuant to Section
2.14, 2.15(a) or 2.17.

 

2.19. Replacement of Lenders under Certain Circumstances. The Borrower shall be
permitted to replace any Lender that (a) requests reimbursement for amounts
owing pursuant to Section 2.14 or 2.15 or gives a notice of illegality pursuant
to Section 2.17 or (b) defaults in its obligation to make Loans hereunder, with
a replacement financial institution; provided that (i) such replacement does not
conflict with any Requirement of Law, (ii) no Event of Default shall have
occurred and be continuing at the time of such replacement, (iii) prior to any
such replacement, such Lender shall have taken no action under Section 2.18 so
as to eliminate the continued need for payment of amounts owing pursuant to
Section 2.14 or 2.15 or to eliminate the illegality referred to in such notice
of illegality given pursuant to Section 2.17, (iv) the replacement financial
institution shall purchase, at par, all Loans and other amounts owing to such
replaced Lender on or prior to the date of replacement, (v) the Borrower shall
be liable to such replaced Lender under Section 2.16 (as though Section 2.16
were applicable) if any Eurodollar Loan owing to such replaced Lender shall be
purchased other than on the last day of the Interest Period relating thereto,
(vi) the replacement financial institution, if not already a Lender, shall be
reasonably satisfactory to the Administrative Agent, (vii) the replaced Lender

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

shall be obligated to make such replacement in accordance with the provisions of
Section 9.6 (provided that the Borrower shall be obligated to pay the
registration and processing fee referred to therein), (viii) the Borrower shall
pay all additional amounts (if any) required pursuant to Section 2.14 or 2.15,
as the case may be, in respect of any period prior to the date on which such
replacement shall be consummated, and (ix) any such replacement shall not be
deemed to be a waiver of any rights that the Borrower, the Administrative Agent
or any other Lender shall have against the replaced Lender.

 

SECTION 3. REPRESENTATIONS AND WARRANTIES

 

To induce the Agents and the Lenders to enter into this Agreement and to make
the Loans, Parent and the Borrower hereby jointly and severally represent and
warrant to each Agent and each Lender that:

 

3.1. Financial Condition. (a) The unaudited pro forma consolidated balance sheet
of Parent as at September 30, 2004 (the “Pro Forma Balance Sheet”), copies of
which have heretofore been made available to each Lender, has been prepared
giving effect (as if such events had occurred on such date) to (i) the Loans to
be made on the Closing Date and the use of proceeds thereof and (ii) the payment
of fees and expenses in connection with the foregoing. The Pro Forma Balance
Sheet has been prepared based on the best information available to the Borrower
as of the date of delivery thereof, and presents fairly on a pro forma basis the
estimated consolidated financial position of Parent as at September 30, 2004,
assuming that the events specified in the preceding sentence had actually
occurred at such date.

 

(b) The audited consolidated balance sheets of Parent as at December 31, 2002
and December 31, 2003, and the related consolidated statements of income and of
cash flows for the fiscal years ended on December 31, 2001, December 31, 2002
and December 31, 2003, reported on by and accompanied by an unqualified report
from Deloitte & Touche, copies of which have heretofore been made available to
each Lender, present fairly the consolidated financial condition of Parent as at
such date, and the consolidated results of its operations and its consolidated
cash flows for the respective fiscal years then ended. The unaudited
consolidated balance sheet of Parent as at September 30, 2004, and the related
unaudited consolidated statements of income and cash flows for the nine-month
period ended on such date, copies of which have heretofore been made available
to each Lender, present fairly the consolidated financial condition of Parent as
at such date, and the consolidated results of its operations and its
consolidated cash flows for the nine-month period then ended (subject to normal
year-end audit adjustments). All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein). Parent, the Borrower
and its Subsidiaries do not have any material Guarantees, contingent liabilities
and liabilities for taxes, or any long-term leases or unusual forward or
long-term commitments, including, without limitation, any interest rate or
foreign currency swap or exchange transaction or other obligation in respect of
derivatives, that are not reflected in the most recent financial statements
referred to in this paragraph. During the period from December 31, 2003 to and
including the date hereof there has been no Disposition by Parent of any
material part of its business or Property.

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3.2. No Change. Except as set forth in the Confidential Information Memorandum,
since December 31, 2003 there has been no development or event that has had or
could reasonably be expected to have a Material Adverse Effect.

 

3.3. Corporate Existence; Compliance with Law. Each of Parent, the Borrower and
its Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the corporate
power and authority, and the legal right, to own and operate its Property, to
lease the Property it operates as lessee and to conduct the business in which it
is currently engaged, (c) is duly qualified as a foreign corporation or other
organization and is in good standing under the laws of each jurisdiction where
its ownership, lease or operation of Property or the conduct of its business
requires such qualification, except where the failure to be so qualified could
not reasonably be expected to have a Material Adverse Effect, and (d) is in
compliance with all Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

3.4. Corporate Power; Authorization; Enforceable Obligations. Each Loan Party
has the corporate power and authority, and the legal right, to make, deliver and
perform the Loan Documents to which it is a party and, in the case of the
Borrower, to borrow hereunder. Each Loan Party has taken all necessary corporate
action to authorize the execution, delivery and performance of the Loan
Documents to which it is a party and, in the case of the Borrower, to authorize
the borrowings on the terms and conditions of this Agreement. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
borrowings hereunder or the execution, delivery, performance, validity or
enforceability of this Agreement or any of the other Loan Documents, except (i)
consents, authorizations, filings and notices described in Schedule 3.4, which
consents, authorizations, filings and notices have been obtained or made and are
in full force and effect and (ii) the filings referred to in Section 3.19. Each
Loan Document has been duly executed and delivered on behalf of each Loan Party
that is a party thereto. This Agreement constitutes, and each other Loan
Document upon execution will constitute, a legal, valid and binding obligation
of each Loan Party that is a party thereto, enforceable against each such Loan
Party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).

 

3.5. No Legal Bar. Subject to the information set forth on Schedules 3.4,
3.15(b) and 3.15(c), the execution, delivery and performance of this Agreement
and the other Loan Documents, the borrowings hereunder and the use of the
proceeds thereof will not violate any Requirement of Law or any Contractual
Obligation of Parent, the Borrower or any of its Subsidiaries and will not
result in, or require, the creation or imposition of any Lien on any of their
respective properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation (other than the Liens created by the Security Documents).
No Requirement of Law or Contractual Obligation applicable to the Borrower or
any of its Subsidiaries could reasonably be expected to have a Material Adverse
Effect.

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

3.6. No Material Litigation. Except as set forth on Schedule 3.6 hereto, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of Parent or the
Borrower, threatened by or against Parent, the Borrower or any of its
Subsidiaries or against any of their respective properties or revenues (a) with
respect to any of the Loan Documents or any of the transactions contemplated
hereby or thereby, or (b) that could reasonably be expected to have a Material
Adverse Effect.

 

3.7. No Default. Except as set forth on Schedule 3.7 hereto, neither Parent, the
Borrower nor any of its Subsidiaries is in default under or with respect to any
of its Contractual Obligations in any respect that could reasonably be expected
to have a Material Adverse Effect. No Default or Event of Default has occurred
and is continuing.

 

3.8. Ownership of Property; Liens. Each of Parent, the Borrower and its
Subsidiaries has title in fee simple to, or a valid leasehold interest in, all
its real property, and good title to, or a valid leasehold interest in, all its
other Property, and none of such Property is subject to any Lien except as
permitted by Section 6.7.

 

3.9. Intellectual Property. Parent, the Borrower and each of its Subsidiaries
owns, or is licensed to use, all Intellectual Property necessary for the conduct
of its business as currently conducted, except where the failure to own or
possess licenses to use such Intellectual Property could not reasonably be
expected to have a Material Adverse Effect. No material claim has been asserted
and is pending by any Person challenging or questioning the use of any
Intellectual Property or the validity or effectiveness of any Intellectual
Property, nor does Parent or the Borrower know of any valid basis for any such
claim. The use of Intellectual Property by Parent, the Borrower and its
Subsidiaries does not infringe on the rights of any Person in any material
respect, except where such infringements, if any, could not reasonably be
expected to have a Material Adverse Effect.

 

3.10. Taxes. Except as set forth on Schedule 3.10, each of Parent, the Borrower
and each of its Subsidiaries has filed or caused to be filed all Federal, state
and other material tax returns that are required to be filed and has paid all
taxes shown to be due and payable on said returns or on any assessments made
against it or any of its Property and all other taxes, fees or other charges
imposed on it or any of its Property by any Governmental Authority (other than
any the amount or validity of which are currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of Parent, the Borrower or its
Subsidiaries, as the case may be); and no tax Lien has been filed, and, to the
knowledge of Parent and the Borrower, no claim is being asserted, with respect
to any such tax, fee or other charge.

 

3.11. Federal Regulations. No part of the proceeds of any Loans, and no other
extensions of credit hereunder, will be used for “purchasing” or “carrying” any
“margin stock” within the respective meanings of each of the quoted terms under
Regulation U as now and from time to time hereafter in effect or for any purpose
that violates the provisions of the Regulations of the Board. If requested by
any Lender or the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form G-3 or FR Form U-1 referred to in
Regulation U.

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3.12. Labor Matters. There are no strikes or other labor disputes against
Parent, the Borrower or any of its Subsidiaries pending or, to the knowledge of
Parent or the Borrower, threatened that (individually or in the aggregate) could
reasonably be expected to have a Material Adverse Effect. Hours worked by and
payment made to employees of Parent, the Borrower and its Subsidiaries have not
been in violation of the Fair Labor Standards Act or any other applicable
Requirement of Law dealing with such matters that (individually or in the
aggregate) could reasonably be expected to have a Material Adverse Effect. All
payments due from Parent, the Borrower or any of its Subsidiaries on account of
employee health and welfare insurance that (individually or in the aggregate)
could reasonably be expected to have a Material Adverse Effect if not paid have
been paid or accrued as a liability on the books of Parent, the Borrower or the
relevant Subsidiary.

 

3.13. ERISA. Neither a Reportable Event nor an “accumulated funding deficiency”
(within the meaning of Section 412 of the Code or Section 302 of ERISA) has
occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither the Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan that
has resulted or could reasonably be expected to result in a material liability
under ERISA, and neither the Borrower nor any Commonly Controlled Entity would
become subject to any material liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvent.

 

3.14. Investment Company Act; Other Regulations. No Loan Party is an “investment
company”, or a company “controlled” by an “investment company”, within the
meaning of the Investment Company Act of 1940, as amended.

 

3.15. Subsidiaries. (a) The Subsidiaries listed on Schedule 3.15(a) constitute
all the Subsidiaries of the Borrower at the date hereof. Schedule 3.15(a) sets
forth as of the Closing Date the name and jurisdiction of incorporation of each
Subsidiary and, as to each Subsidiary, the percentage of each class of Capital
Stock owned by each Loan Party. There are no outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments (other than stock
options granted to employees or directors and directors’ qualifying shares) of
any nature relating to any Capital Stock of Parent, the Borrower or any
Subsidiary, except as disclosed on Schedule 3.15(a).

 

(b) Schedule 3.15(b) sets forth (i) the name of each Subsidiary of the Borrower
(other than (x) Excluded Foreign Subsidiaries and (y) Primus Telecommunications
of Virginia, Inc., a Virginia corporation and a subsidiary of PRIMUS
Telecommunications, Inc., a Delaware corporation) and (ii) identifies any
Subsidiary that is a Guarantee Approval Pending Subsidiary or a Security
Interest Approval Pending Subsidiary.

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(c) Schedule 3.15(c) lists, as to each Guarantee Approval Pending Subsidiary and
each Security Interest Approval Pending Subsidiary, the actions required to be
taken to obtain requisite approvals of Governmental Authorities to permit such
Subsidiary to incur obligations as a Guarantor under the Guarantee and
Collateral Agreement or to grant security interests in its assets pursuant to
the Guarantee and Collateral Agreement, as the case may be. The documentation
required to request the approvals described in Schedule 3.15(c) with respect to
such Subsidiary is substantially complete and has been sent to the relevant
Governmental Authorities or is being sent to the relevant Governmental
Authorities concurrently with the occurrence of the Closing Date.

 

(d) On the Closing Date, the Parent and the Borrower has no Unrestricted
Subsidiaries.

 

3.16. Use of Proceeds. The proceeds of the Loans shall be used for general
corporate purposes.

 

3.17. Environmental Matters. Other than exceptions to any of the following that
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect:

 

(a) The Borrower and its Subsidiaries: (i) are, and within the period of all
applicable statutes of limitation have been, in compliance with all applicable
Environmental Laws; (ii) hold all Environmental Permits (each of which is in
full force and effect) required for any of their current or intended operations
or for any property owned, leased, or otherwise operated by any of them; (iii)
are, and within the period of all applicable statutes of limitation have been,
in compliance with all of their Environmental Permits; and (iv) reasonably
believe that: each of their Environmental Permits will be timely renewed and
complied with, without material expense; any additional Environmental Permits
that may be required of any of them will be timely obtained and complied with,
without material expense; and compliance with any applicable Environmental Law
that is or is expected to become applicable to any of them will be timely
attained and maintained, without material expense.

 

(b) Materials of Environmental Concern are not present at, on, under, in, or
about any real property now or formerly owned, leased or operated by the
Borrower or any of its Subsidiaries, or at any other location (including,
without limitation, any location to which Materials of Environmental Concern
have been sent for re-use or recycling or for treatment, storage, or disposal)
which could reasonably be expected to (i) give rise to liability of the Borrower
or any of its Subsidiaries under any applicable Environmental Law or otherwise
result in costs to the Borrower or any of its Subsidiaries, or (ii) interfere
with the Borrower’s or any of its Subsidiaries’ continued operations, or (iii)
impair the fair market value of any real property owned or leased by the
Borrower or any of its Subsidiaries.

 

(c) There is no judicial, administrative, or arbitral proceeding (including any
proceeding regarding any notice of violation or alleged violation) under or
relating to any

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

applicable Environmental Law to which the Borrower or any of its Subsidiaries
is, or to the knowledge of the Borrower or any of its Subsidiaries will be,
named as a party that is pending or, to the knowledge of the Borrower or any of
its Subsidiaries, threatened.

 

(d) Neither the Borrower nor any of its Subsidiaries has received any written
request for information, or been notified that it is a potentially responsible
party under or relating to the federal Comprehensive Environmental Response,
Compensation, and Liability Act or any similar applicable Environmental Law, or
with respect to any Materials of Environmental Concern.

 

(e) Neither the Borrower nor any of its Subsidiaries has entered into or agreed
to any consent decree, order, or settlement or other agreement, or is a party to
or, to the knowledge of the Borrower, subject to, any judgment, decree, or order
or other agreement, in any judicial, administrative, arbitral, or other forum
for dispute resolution, relating to compliance with or liability under any
applicable Environmental Law.

 

(f) To the knowledge of the Borrower, neither the Borrower nor any of its
Subsidiaries has assumed or retained, by contract or operation of law, any
liabilities of any kind, fixed or contingent, known or unknown, under any
applicable Environmental Law or with respect to any Material of Environmental
Concern.

 

3.18. Accuracy of Information, etc. No statement or information contained in
this Agreement, any other Loan Document, the Confidential Information Memorandum
or any other document, or certificate made available to the Administrative Agent
or the Lenders or any of them, by or on behalf of any Loan Party for use in
connection with the transactions contemplated by this Agreement or the other
Loan Documents, contained as of the date such statement, information, document
or certificate was so made available (or, in the case of the Confidential
Information Memorandum, as of the date of this Agreement), any untrue statement
of a material fact or omitted to state a material fact necessary to make the
statements contained herein or therein not misleading. The projections and pro
forma financial information contained in the materials referenced above are
based upon good faith estimates and assumptions believed by management of the
Borrower to be reasonable at the time made, it being recognized by the Lenders
that such financial information as it relates to future events is not to be
viewed as fact and that actual results during the period or periods covered by
such financial information may differ from the projected results set forth
therein by a material amount. There is no fact known to any Loan Party that
could reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed in this Agreement or the Schedules hereto, in the other Loan
Documents, in the Confidential Information Memorandum or in any other documents
and certificates furnished to the Agents and the Lenders for use in connection
with the transactions contemplated hereby and by the other Loan Documents.

 

3.19. Security Documents. (a) The Guarantee and Collateral Agreement is
effective to create in favor of the Administrative Agent, for the benefit of the
Secured Parties, a legal, valid and enforceable security interest in the
Collateral described therein and proceeds thereof. In the case of the Pledged
Stock described in the

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Guarantee and Collateral Agreement, when any stock certificates representing
such Pledged Stock and related stock powers are delivered to the Administrative
Agent, and in the case of the other Collateral described in the Guarantee and
Collateral Agreement, when financing statements in appropriate form are filed in
the offices specified on Schedule 3.19(a)-1 (which financing statements have
been duly completed and delivered to the Administrative Agent) and such other
filings and actions as are specified on Schedule 3 to the Guarantee and
Collateral Agreement have been completed (all of which filings and actions
(subject to Section 5.12) have been duly completed), the Guarantee and
Collateral Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Collateral and the proceeds thereof (to the extent perfection can be
accomplished by Domestic Perfection Actions), as security for the Obligations
(as defined in the Guarantee and Collateral Agreement), in each case prior and
superior in right to any other Person (except, in the case of Collateral other
than Pledged Stock, Liens permitted by Section 6.7). Schedule 3.19(a)-2 lists
each UCC Financing Statement that (i) names any Loan Party as debtor and (ii)
will remain on file after the Closing Date. Schedule 3.19(a)-3 lists each UCC
Financing Statement that (i) names any Loan Party as debtor and (ii) will be
terminated on or prior to the Closing Date; and on or prior to the Closing Date,
the Borrower will have delivered to the Administrative Agent, or caused to be
filed, duly completed UCC termination statements in respect of each UCC
Financing Statement listed in Schedule 3.19(a)-3.

 

(b) Schedule 3.19(b) lists, as of the Closing Date, each parcel of owned real
property and each leasehold interest in real property located in the United
States and held by the Borrower or any of its Subsidiaries that has a value, in
the reasonable opinion of the Borrower, in excess of $1,000,000.

 

3.20. Solvency. Each of Parent, Borrower and the Borrower’s Significant
Subsidiaries is, as of the date of this Agreement, and after giving effect to
the incurrence of all Indebtedness and obligations being incurred in connection
herewith will continue to be, Solvent.

 

SECTION 4. CONDITIONS PRECEDENT

 

The agreement of each Lender to make the Loan to be made by it hereunder is
subject to the satisfaction, prior to or concurrently with the making of such
Loan on the Closing Date, of the following conditions precedent:

 

(a) Loan Documents. The Administrative Agent shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of Parent and the
Borrower, (ii) the Guarantee and Collateral Agreement, executed and delivered by
a duly authorized officer of Parent, the Borrower and each Subsidiary listed on
Schedule 3.15(b) and (iii) a Lender Addendum executed and delivered by each
Lender and accepted by the Borrower.

 

(b) Pro Forma Balance Sheet; Financial Statements. The Lenders shall have
received (i) the Pro Forma Balance Sheet, (ii) audited consolidated balance
sheets as of December 31, 2002 and December 31, 2003, and an audited
consolidated statement of income and of cash flows of Parent for the 2001, 2002
and 2003 fiscal years and (iii) unaudited interim consolidated financial
statements of Parent for each quarterly period ended March 31, 2004, June 30,
2004 and September 30, 2004; and such financial statements shall not, in the
reasonable judgment of the Lenders, reflect any material adverse change in the
consolidated financial condition of Parent, as reflected in the financial
statements or projections contained in the Confidential Information Memorandum.

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(c) Approvals; Certificates. (i) All material governmental and third party
approvals necessary in connection with the continuing operations of Parent, the
Borrower and its Subsidiaries (other than the approvals described in Schedule
3.15(c)) shall have been obtained and be in full force and effect, and the
Administrative Agent shall have received a certificate of the Borrower to the
foregoing effect; and (ii) the Administrative Agent shall have received a
certificate of the Borrower to the effect that the documentation required to
request the approvals described in Schedule 3.15(c) is substantially complete
and has been sent to the relevant Governmental Authorities or is being sent to
the relevant Governmental Authorities concurrently with the occurrence of the
Closing Date.

 

(d) Related Agreements. The Administrative Agent shall have received (in a form
reasonably satisfactory to the Administrative Agent), true and correct copies,
certified as to authenticity by the Borrower, of (i) the Senior Note Indenture,
(ii) the Parent Indenture, and (iii) such other documents or instruments as may
be reasonably requested by the Administrative Agent, including, without
limitation, a copy of any debt instrument, security agreement or other material
contract to which the Loan Parties may be a party.

 

(e) Fees. The Lenders and the Administrative Agent shall have received all fees
required to be paid, and all reasonable expenses for which invoices have been
presented (including reasonable fees, disbursements and other charges of counsel
to the Agents), upon the occurrence of the Closing Date. Such amounts will be
paid, in whole or in part, at the Borrower’s discretion, with proceeds of Loans
made on the Closing Date and the payment in full of all amounts required to be
paid will be reflected in the funding instructions given by the Borrower to the
Administrative Agent on or before the Closing Date.

 

(f) Business Plan. Parent has made available for the review of the Lenders the
business plan of Parent and its Subsidiaries for fiscal years 2005-2010;
provided, certain Lenders have determined to refrain from receiving such
materials and Parent is under no obligation to deliver or require the delivery
of such materials to each or any Lender.

 

(g) [Reserved]

 

(h) Lien Searches. The Administrative Agent shall have received the results of a
recent lien search in each of the jurisdictions in which Uniform Commercial Code
financing statement or other filings or recordations should be made to evidence
or perfect security interests in all assets of the Loan Parties, and such search
shall reveal no liens on any of the assets of the Loan Party, except for Liens
permitted by Section 6.7.

 

(i) Closing Certificate. The Administrative Agent shall have received a
certificate of each Loan Party, dated the Closing Date, substantially in the
form of Exhibit C, with appropriate insertions and attachments.

 

(j) Legal Opinions. The Administrative Agent shall have received the following
executed legal opinions:

 

(i) the legal opinion of Hogan & Hartson L.L.P., counsel to Parent, the Borrower
and its Subsidiaries, substantially in the form of Exhibit E-1; and

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(ii) the legal opinion of Swidler Berlin LLP, regulatory counsel to Parent, the
Borrower and its Subsidiaries, substantially in the form of Exhibit E-2.

 

Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require and shall be addressed to the Administrative Agent and the
Lenders.

 

(k) Pledged Stock; Stock Powers; Acknowledgment and Consent; Pledged Notes. The
Administrative Agent shall have received (i) the certificates representing the
shares of Capital Stock pledged pursuant to the Guarantee and Collateral
Agreement, together with an undated stock power for each such certificate
executed in blank by a duly authorized officer of the pledgor thereof, (ii) an
Acknowledgment and Consent, substantially in the form of Annex II to the
Guarantee and Collateral Agreement, duly executed by any issuer of Capital Stock
pledged pursuant to the Guarantee and Collateral Agreement that is not itself a
party to the Guarantee and Collateral Agreement and (iii) each promissory note
pledged pursuant to the Guarantee and Collateral Agreement endorsed (without
recourse) in blank (or accompanied by an executed transfer form in blank
satisfactory to the Administrative Agent) by the pledgor thereof.

 

(l) Filings, Registrations and Recordings. Each document (including, without
limitation, any Uniform Commercial Code financing statement) required by the
Security Documents or under law or reasonably requested by the Administrative
Agent to be filed, registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Secured Parties, a perfected Lien
on the Collateral described therein, prior and superior in right to any other
Person (other than with respect to Liens expressly permitted by Section 6.7),
shall have been filed, registered or recorded or shall have been delivered to
the Administrative Agent in proper form for filing, registration or recordation.

 

(m) Insurance. The Administrative Agent shall have received insurance
certificates satisfying the requirements of Section 5.3 of the Guarantee and
Collateral Agreement.

 

(n) PATRIOT Act. The Lenders shall have received, sufficiently in advance of the
Closing Date, all documentation and other information reasonably required by the
Lenders and required by bank regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including without
limitation the United States PATRIOT Act.

 

(o) Indenture Compliance. The Administrative Agent shall have received a
certificate of the Borrower evidencing that the incurrence of the Loans does not
violate the Senior Note Indenture or the Parent Indenture.

 

(p) Representations and Warranties. Each of the representations and warranties
made by any Loan Party in or pursuant to the Loan Documents shall be true and
correct on and as of such date as if made on and as of such date.

 

(q) No Default. No Default or Event of Default shall have occurred and be
continuing on such date or after giving effect to the extensions of credit
requested to be made on such date.

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The borrowing by the Borrower of the Loans on the Closing Date shall constitute
a representation and warranty by the Borrower as of the date of such extension
of credit that the conditions contained in this Section 4 have been satisfied,
except for any conditions that have been waived.

 

SECTION 5. AFFIRMATIVE COVENANTS

 

Parent and the Borrower hereby jointly and severally agree that, so long as the
Commitments remain in effect or any Loan or other amount is owing to any Lender
or any Agent hereunder, each of Parent and the Borrower shall and shall cause
each of its Subsidiaries to:

 

5.1. Financial Statements. Furnish to the Administrative Agent in electronic
form:

 

(a) as soon as available, but in any event within 90 days after the end of each
fiscal year of Parent, a copy of the audited consolidated balance sheet of
Parent as at the end of such year and the related audited consolidated
statements of income and of cash flows for such year, setting forth in each case
in comparative form the figures as of the end of and for the previous year,
reported on by Deloitte & Touche or other independent certified public
accountants of nationally recognized standing;

 

(b) as soon as available, but in any event not later than 45 days after the end
of each of the first three quarterly periods of each fiscal year of Parent, the
unaudited consolidated balance sheet of Parent as at the end of such quarter and
the related unaudited consolidated statements of income and of cash flows for
such quarter and the portion of the fiscal year through the end of such quarter,
setting forth in each case in comparative form the figures as of the end of and
for the corresponding period in the previous year; and

 

all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein); and

 

(c) furnish to the Administrative Agent, in connection with each posting
pursuant to clause (b) above, a certificate by a Responsible Officer certifying
that the financial statements posted are fairly stated in all material respects
(subject to normal year-end audit adjustments).

 

5.2. Certificates; Other Information. Furnish to the Administrative Agent or, in
the case of clause (f), to the relevant Lender:

 

(a) [reserved];

 

(b) concurrently with the delivery of any financial statements pursuant to
Section 5.1, (i) a certificate of a Responsible Officer stating that, to the
best of such Responsible Officer’s knowledge, each Loan Party during such period
has observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Agreement and the other Loan
Documents to which it is a party to be observed, performed or satisfied by it,
and

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that such Responsible Officer has obtained no knowledge of any Default or Event
of Default except as specified in such certificate and (ii) in the case of
quarterly or annual financial statements, (x) a Compliance Certificate
containing all information and calculations necessary for determining compliance
by Parent, the Borrower and its Subsidiaries with the provisions of this
Agreement referred to therein as of the last day of the fiscal quarter or fiscal
year of Parent, as the case may be, (y) to the extent not previously disclosed
to the Administrative Agent, a listing of any Intellectual Property acquired by
any Loan Party since the date of the most recent list delivered pursuant to this
clause (y) (or, in the case of the first such list so delivered, since the
Closing Date) and (z) any UCC financing statements or other filings specified in
such Compliance Certificate as being required to be delivered therewith;

 

(c) within 45 days after the end of each fiscal quarter of Parent ending on
March 31, June 30 or September 30, and within 90 days after the end of the
fiscal quarter of Parent ended on December 31, a narrative discussion and
analysis of the financial condition and results of operations of Parent and its
Subsidiaries for such fiscal quarter, as compared to the comparable period of
the previous year; for the avoidance of doubt, such information as is furnished
in reports filed by Parent with the SEC under the caption “Management’s
Discussion and Analysis of Results of Operations and Financial Condition” shall
satisfy such requirement in full;

 

(d) no later than 10 Business Days prior to the effectiveness thereof, copies of
substantially final drafts of any proposed amendment, supplement, waiver or
other modification with respect to the Senior Note Indenture;

 

(e) within five days after the same are sent, copies of all financial statements
and reports that Parent or the Borrower sends to the holders of any class of its
debt securities or public equity securities and, within five days after the same
are filed, made available to the Administrative Agent in electronic form copies
of all financial statements and reports that Parent or the Borrower may make to,
or file with, the SEC; and

 

(f) promptly, such additional financial information as any Lender may from time
to time reasonably request; provided such Lender shall have agreed and remained
in compliance with Section 9.14 hereunder.

 

5.3. Payment of Obligations. Pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all its material
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
Parent, the Borrower or its Subsidiaries, as the case may be.

 

5.4. Conduct of Business and Maintenance of Existence; Compliance. (a) (i)
Preserve, renew and keep in full force and effect its organizational existence
and (ii) take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business, except,
in each case, as otherwise permitted by Section 6.1 and except, in the case of
clause (i) and (ii) above, to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (b) comply with
all Contractual Obligations and Requirements of Law, except to the extent that
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.

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5.5. Maintenance of Property; Insurance. (a) Keep all Property and systems
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted and (b) maintain with financially sound and
reputable insurance companies insurance on all its Property in at least such
amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business.

 

5.6. Inspection of Property; Books and Records; Discussions. (a) Keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all financial
transactions in relation to its business and activities and (b) permit
representatives of any Lender that has agreed and remained in compliance with
Section 9.14 hereunder to visit and inspect any of its properties and examine
and make abstracts from any of its books and records at any reasonable time upon
reasonable advance notice and as often as may reasonably be desired and to
discuss the business, operations, properties and financial and other condition
of Parent, the Borrower and its Subsidiaries with officers of Parent, the
Borrower and its Subsidiaries and with its independent certified public
accountants.

 

5.7. Notices. Promptly give notice to the Administrative Agent and each Lender
that has agreed and remained in compliance with Section 9.14 hereunder of:

 

(a) the occurrence of any Default or Event of Default;

 

(b) any (i) default or event of default under any Contractual Obligation of
Parent, the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between Parent, the
Borrower or any of its Subsidiaries and any Governmental Authority, that in
either case, if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;

 

(c) any litigation or proceeding affecting Parent, the Borrower or any of its
Subsidiaries that arises after the Closing Date (i) in which the Parent or the
Borrower reasonably determines that the amount involved is $5,000,000 or more
and the applicable insurance company has denied coverage, (ii) in which
injunctive or similar relief is sought and, if adversely determined, could
reasonably be expected to have a Material Adverse Effect or (iii) which relates
to any Loan Document;

 

(d) the following events, as soon as possible and in any event within 30 days
after the Borrower knows or has reason to know thereof: (i) the occurrence of
any Reportable Event with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC or a Plan
or any withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking of any
other action by the PBGC or the Borrower or any Commonly Controlled Entity or
any Multiemployer Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Plan;

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(e) as soon as possible and in any event within 30 days of obtaining knowledge
thereof: (i) any development, event, or condition that, individually or in the
aggregate with other developments, events or conditions, could reasonably be
expected to result in the payment by the Borrower and its Subsidiaries, in the
aggregate, of an amount in excess of $ 5,000,000; and (ii) any notice that any
governmental authority may deny any application for an Environmental Permit
sought by, or revoke or refuse to renew any Environmental Permit held by, the
Borrower; and

 

(f) any development or event that has had or could reasonably be expected to
have a Material Adverse Effect.

 

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action Parent, the Borrower or the relevant Subsidiary proposes
to take with respect thereto.

 

5.8. Environmental Laws. (a) Comply in all material respects with, and ensure
compliance in all material respects by all tenants and subtenants, if any, with,
all applicable Environmental Laws, and obtain and comply in all material
respects with and maintain, and ensure that all tenants and subtenants obtain
and comply in all material respects with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws.

 

(b) Conduct and complete all investigations, studies, sampling and testing, and
all remedial, removal and other actions required under applicable Environmental
Laws and promptly comply in all material respects with all lawful orders and
directives of all Governmental Authorities regarding applicable Environmental
Laws.

 

5.9. Additional Collateral, etc. (a) With respect to any Property acquired after
the Closing Date by Parent, the Borrower or any of its Subsidiary Guarantors or
any Subsidiary that is required pursuant to Section 5.9(b) to be a Subsidiary
Guarantor (other than (w) any Property of the Lingo Subsidiary at any time after
a Lingo Offering, (x) any real property or any Property described in paragraph
(c) of this Section, (y) any Property subject to a Lien of a type described in
clause (vi) or (xi) of the definition of “Permitted Liens” and (z) all assets as
to which a security interest cannot be perfected by filing in the United States
or by delivering stock certificates or other Collateral in the United States) as
to which the Administrative Agent, for the benefit of the Secured Parties, does
not have a perfected Lien, no less often than on a quarterly basis (i) execute
and deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement or such other documents as the Administrative Agent deems
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Secured Parties, a security interest in such Property and (ii) take all
actions necessary or advisable to grant to the Administrative Agent, for the
benefit of the Secured Parties, a perfected first priority security interest
(subject to Permitted Liens) in such Property, including without limitation, the
filing of Uniform Commercial Code financing statements in such jurisdictions as
may be required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Administrative Agent. Notwithstanding the foregoing, Parent,
the Borrower and its Subsidiaries shall not be required to grant security
interests in any assets (other than Accounts) of any Security Interest Approval
Pending Subsidiary until delivery to the Administrative Agent of a Security
Interest

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Approval Notice in respect of such assets, and Parent, the Borrower and its
Subsidiaries shall not be required to grant security interests in any assets
acquired after the Closing Date until any required approvals of Governmental
Authorities for such actions shall be received.

 

With respect to any fee interest in any real property having a value (together
with improvements thereof) of at least $1,000,000 acquired after the Closing
Date by Parent, the Borrower or any of its Subsidiary Guarantors or any
Subsidiary that is required pursuant to Section 5.9(b) to be a Subsidiary
Guarantor (other than any such real property (x) owned by (I) an Excluded
Foreign Subsidiary or (II) the Lingo Subsidiary at any time after a Lingo
Offering or (y) subject to a Lien of a type described in clause (vi) or (xi) of
the definition of “Permitted Liens”), no less often than on a quarterly basis,
(i) execute and deliver a first priority Mortgage in favor of the Administrative
Agent, for the benefit of the Secured Parties, covering such real property, (ii)
if requested by the Administrative Agent, provide the Lenders with (x) title and
extended coverage insurance covering such real property in an amount at least
equal to the purchase price of such real property (or such other amount as shall
be reasonably specified by the Administrative Agent) as well as a current ALTA
survey thereof, together with a surveyor’s certificate and (y) any consents or
estoppels reasonably deemed necessary or advisable by the Administrative Agent
in connection with such Mortgage, each of the foregoing in form and substance
reasonably satisfactory to the Administrative Agent and (iii) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent. Notwithstanding the foregoing, Parent, the Borrower and its Subsidiaries
shall not be required to grant security interests in any real property assets
acquired after the Closing Date until any required approvals of Governmental
Authorities for such actions shall be received.

 

(b) With respect to any new Subsidiary (other than (x) the Lingo Subsidiary at
any time after a Lingo Offering and (y) any Excluded Foreign Subsidiary) created
or acquired after the Closing Date (which, for the purposes of this paragraph,
shall include any existing Subsidiary that ceases to be an Excluded Foreign
Subsidiary), by Parent, the Borrower or any of its Subsidiary Guarantors or any
Subsidiary that is required pursuant to Section 5.9(b) to be a Subsidiary
Guarantor, no less often than on a quarterly basis, (i) execute and deliver to
the Administrative Agent such amendments to the Guarantee and Collateral
Agreement as the Administrative Agent deems necessary or advisable to grant to
the Administrative Agent, for the benefit of the Secured Parties, a perfected
first priority security interest in the Capital Stock of such new Subsidiary
that is owned directly by Parent, the Borrower or any of its Subsidiary
Guarantors or any Subsidiary that is required pursuant to Section 5.9(b) to be a
Subsidiary Guarantor, (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of Parent, the Borrower or
such Subsidiary Guarantor or any Subsidiary that is required pursuant to Section
5.9(b) to be a Subsidiary Guarantor, as the case may be, (iii) cause such new
Subsidiary (A) to become a party to the Guarantee and Collateral Agreement and
(B) to take such actions necessary or advisable to grant to the Administrative
Agent for the benefit of the Secured Parties a perfected first priority security
interest in the Collateral described in the Guarantee and Collateral Agreement
with respect to such new Subsidiary subject to the terms and conditions of the
Guarantee and Collateral Agreement, including, without limitation, the filing of
Uniform Commercial Code financing statements in such jurisdictions as may be

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required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Administrative Agent, and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent. Notwithstanding the foregoing, (i) no Guarantee Approval Pending
Subsidiary or Security Interest Approval Pending Subsidiary shall be required to
take the actions described above in this paragraph until delivery to the
Administrative Agent of a Guarantee Approval Notice in respect of such Guarantee
Approval Pending Subsidiary or a Security Interest Approval Notice in respect of
such Security Interest Approval Pending Subsidiary, as applicable, and (ii)
Parent, the Borrower and its Subsidiaries shall not be required to take the
actions described above in this paragraph in respect of any new Subsidiary
created or acquired after the Closing Date until any required approvals of
Governmental Authorities for such actions shall be received.

 

(c) With respect to any new Excluded Foreign Subsidiary created or acquired
after the Closing Date by, and owned directly by, Parent, the Borrower or any of
its Subsidiary Guarantors or any Subsidiary that is required pursuant to Section
5.9(b) to be a Subsidiary Guarantor (other than any Excluded Foreign
Subsidiaries), promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement or such other documents as
the Administrative Agent deems necessary or advisable in order to grant to the
Administrative Agent, for the benefit of the Secured Parties, a perfected first
priority security interest in the Capital Stock of such new Subsidiary that is
owned directly by Parent, the Borrower or any of its Subsidiary Guarantors or
any Subsidiary that is required pursuant to Section 5.9(b) to be a Subsidiary
Guarantor (other than any Excluded Foreign Subsidiaries), (provided that in no
event shall more than 65% of the total outstanding Capital Stock of any such new
Excluded Foreign Subsidiary be required to be so pledged), (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock, together
with undated stock powers, in blank, executed and delivered by a duly authorized
officer of Parent, the Borrower or such Subsidiary Guarantors or any Subsidiary
that is required pursuant to Section 5.9(b) to be a Subsidiary Guarantor, as the
case may be, and take such other action as may be necessary or, in the opinion
of the Administrative Agent, desirable to perfect the Lien of the Administrative
Agent thereon, and (iii) if requested by the Administrative Agent, deliver to
the Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent. Notwithstanding the foregoing, Parent,
the Borrower and its Subsidiaries shall not be required to take the actions
described above in this paragraph until any required approvals of Governmental
Authorities for such actions shall be received.

 

5.10. Further Assurances. From time to time execute and deliver, or cause to be
executed and delivered, such additional instruments, certificates or documents,
and take such actions, as the Administrative Agent may reasonably request for
the purposes of implementing or effectuating the provisions of this Agreement
and the other Loan Documents, or of more fully perfecting or renewing the rights
of the Administrative Agent and the Lenders with respect to the Collateral (or
with respect to any additions thereto or replacements or proceeds thereof or
with respect to any other property or assets hereafter acquired by the Borrower
or any Subsidiary which may be deemed to be part of the Collateral) pursuant
hereto or thereto. Upon the exercise by the Administrative Agent or any Lender
of any power, right, privilege or remedy pursuant to

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this Agreement or the other Loan Documents which requires any consent, approval,
recording, qualification or authorization of any Governmental Authority, the
Borrower will execute and deliver, or will cause the execution and delivery of,
all applications, certifications, instruments and other documents and papers
that the Administrative Agent or such Lender may be required to obtain from the
Borrower or any of its Subsidiaries for such governmental consent, approval,
recording, qualification or authorization.

 

5.11. Approvals of Governmental Authorities. Use its best efforts to apply for
and obtain as promptly as practicable after the Closing Date all approvals of
Governmental Authorities required such that each Guarantee Approval Pending
Subsidiary is permitted to incur obligations as Guarantor under the Guarantee
and Collateral Agreement and each Security Interest Approval Pending Subsidiary
is permitted to grant security interests in its assets pursuant to the Guarantee
and Collateral Agreement; as promptly as practicable after receiving all
approvals of Governmental Authorities necessary to permit any Guarantee Approval
Pending Subsidiary to incur obligations as Guarantor under the Guarantee and
Collateral Agreement, deliver a Guarantee Approval Notice to the Administrative
Agent in respect thereof; as promptly as practicable after receiving all
approval of Governmental Authorities necessary to permit any Security Interest
Approval Pending Subsidiary to grant security interests in any portion of its
assets pursuant to the Guarantee and Collateral Agreement, deliver a Security
Interest Approval Notice to the Administrative Agent in respect thereof; as
promptly as practicable after creating or acquiring any new Subsidiary required
by Section 5.9 to become a party to the Guarantee and Collateral Agreement, use
its best efforts to obtain any approvals of Governmental Authorities necessary
to permit the actions required by Section 5.9 in respect of such Subsidiary and
its assets and give prompt notice to the Administrative Agent of the receipt of
such approvals; and as promptly as practicable after acquiring any assets
required by Section 5.9 to become Collateral, use its best efforts to obtain any
approvals of Governmental Authorities necessary to permit the actions required
by Section 5.9 in respect of such assets and give prompt notice to the
Administrative Agent of the receipt of such approvals.

 

5.12. Post Closing Items. (a) As promptly as practicable after the Closing Date,
and in any event not later than 30 days after the Closing Date, deliver to the
Administrative Agent, to be held by it as Collateral under the Guarantee and
Collateral Agreement, (i) all promissory notes evidencing Indebtedness, in an
amount greater than $100,000 per promissory note, owing by any Subsidiary of the
Borrower to Parent, the Borrower or any Subsidiary Guarantor, together with
appropriate indorsements with respect thereto, to the extent such promissory
notes and indorsements are not delivered to the Administrative Agent on the
Closing Date (it being agreed that this provision does not require the execution
and delivery of any promissory notes to evidence any inter-company Indebtedness
that is not now evidenced by a promissory note) and (ii) stock certificates
representing Capital Stock of the following Subsidiaries pledged pursuant to the
Guarantee and Collateral Agreement : PRIMUS Telecommunications de Mexiko SA de
CV, 3620212 Canada, Inc., Primus Japan KK, Telegroup Japan KK, Global Access Pty
Ltd., Stubbs Ltd., Primus Telecom SA de C.V., Communicacoes do Brasil Ltda.,
P1do Brasil LTDA, Global Telephone Holding Inc. and St. Thomas & San Juan
Telephone Company, Inc.

 

(b) As promptly as practicable after the Closing Date, and in any event not
later than 30 days after the Closing Date, cause to be executed and delivered
control agreements, in

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form and substance reasonably satisfactory to the Administrative Agent, in
respect of each deposit account and securities account (as such terms are
defined in the Uniform Commercial Code in New York) in respect of each deposit
account and securities account in which Parent, the Borrower or any of the
Subsidiary Guarantors maintains cash or investments in an aggregate amount
exceeding $500,000, (other than Account No. 24900074 maintained at Bank of
America, N.A. as collateral for overdrafts and letters of credit).

 

(c) Use commercially reasonable efforts to deliver to the Administrative Agent
within 30 days after the Closing Date, to be held by it as Collateral under the
Guarantee and Collateral Agreement, stock certificates representing Capital
Stock of Globility Com and Direct Internet Private Limited pledged pursuant to
the Guarantee and Collateral Agreement.

 

(d) Within 30 days after the Closing Date, use best efforts (i) to cause to be
executed a valid assignment agreement of patent application no. 60/555,321 in
favor of the Borrower or one of the Guarantors and (ii) as promptly as
practicable after such assignment agreement has been executed, to cause to be
executed a grant of security interest in such patent to be filed in the United
States Patent and Trademark Office.

 

(e) Contemporaneously with the delivery of the items described in paragraphs
(a), (b), (c) and (d) above in this Section, cause to be delivered to the
Administrative Agent a legal opinion of the Borrower’s counsel, in form and
substance reasonably satisfactory to the Administrative Agent, with respect to
the perfection of the security interest of the Administrative Agent in the
collateral referred to in paragraphs (a), (b), (c) and (d) above in this
Section.

 

SECTION 6. NEGATIVE COVENANTS

 

Parent and the Borrower hereby jointly and severally agree that, so long as the
Commitments remain in effect or any Loan or other amount is owing to any Lender
or any Agent hereunder:

 

6.1. Obligors May Consolidate, Etc., Only on Certain Terms. Neither of the
Obligors shall consolidate with, merge with or into, or sell, convey, transfer,
lease or otherwise dispose of all or substantially all of its property and
assets (as an entirety or substantially an entirety in one transaction or a
series of related transactions) to, any Person or permit any Person to merge
with or into such Obligor and it will not permit any of its Restricted
Subsidiaries to enter into any such transaction or series of transactions if
such transaction or series of transactions, in the aggregate, would result in
the sale, assignment, conveyance, transfer, lease or other disposition of all or
substantially all of such Obligor’s properties and assets or of such Obligor and
its Restricted Subsidiaries, taken as a whole, to any other Person or Persons,
unless:

 

  (1) either (A) such Obligor shall be the continuing Person, or (B) the Person
(if other than such Obligor) formed by such consolidation or into which it is
merged or that acquired or leased such property and assets of such Obligor will
be a corporation, partnership or trust organized and validly existing under the
laws of the United States of America or any jurisdiction thereof and shall
expressly assume all of the Obligations of such Obligor pursuant to agreements
or other documents reasonably satisfactory to the Administrative Agent;

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  (2) immediately after giving effect to such transaction (and treating any
Indebtedness which becomes an obligation of either Obligor or any Restricted
Subsidiary in connection with or as a result of such transaction as having been
incurred at the time of such transaction), no Default or Event of Default shall
have occurred and be continuing;

 

  (3) immediately after giving effect to such transaction on a pro forma basis
(A) in the case of Parent, or any Person becoming the successor obligor to
Parent, as the case may be, could Incur at least $1.00 of Indebtedness under
clause (i) of paragraph (a) of Section 6.2 and (B) in the case of the Borrower,
or any Person becoming the successor obligor to the Borrower, as the case may
be, could Incur at least $1.00 of Indebtedness under clause (ii) of paragraph
(a) of Section 6.2; and

 

  (4) such Obligor delivers to the Administrative Agent an Officer’s Certificate
(attaching the arithmetic computations to demonstrate compliance with clause
(3)) and Opinion of Counsel stating that such consolidation, merger, sale,
assignment, conveyance, transfer, lease or other disposition complies with this
Section 6.1 and that all conditions precedent provided for herein relating to
such transaction have been complied with; provided, however, that clause (3)
above does not apply if, in the good faith determination of the Board of
Directors of Parent or the Borrower, as the case may be, whose determination
shall be conclusive and evidenced by a Board Resolution, the principal purpose
of such transaction is to change its state of incorporation; and provided
further that any such transaction shall not have as one of its purposes the
evasion of the foregoing limitations.

 

Notwithstanding the foregoing paragraph, (A) the Borrower shall not consolidate
with, merge with or into, or sell, convey, transfer, lease or otherwise dispose
of all or substantially all of its property and assets (as an entirety or
substantially an entirety in one transaction or a series of related
transactions) to, Parent, (B) Parent shall not consolidate with, merge with on
into, or sell, convey, transfer, lease or otherwise dispose of all or
substantially all of its property and assets (as an entirety or substantially an
entirety in one transaction or a series of related transactions) to, the
Borrower, and (C) at no time shall Parent have any direct Investment in any
Restricted Subsidiary other than its ownership of the Voting Stock of the
Borrower.

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6.2. Limitation on Indebtedness. (a) Parent will not, and will not permit any of
its Restricted Subsidiaries to, Incur any Indebtedness, including Acquired
Indebtedness (other than Existing Indebtedness and Indebtedness under the Loan
Documents); provided, however, that:

 

(i) Parent may Incur Indebtedness, including Acquired Indebtedness but excluding
Priority Indebtedness, if immediately thereafter the ratio (the “Parent
Indebtedness to Consolidated Cash Flow Ratio”) of:

 

(A) the aggregate principal amount (or accreted value, as the case may be) of
Indebtedness of Parent and its Restricted Subsidiaries on a consolidated basis
outstanding as of the Transaction Date to

 

(B) the Pro Forma Consolidated Cash Flow of Parent for the preceding two full
fiscal quarters multiplied by two, determined on a pro forma basis as if any
such Indebtedness that had been Incurred and the proceeds thereof had been
applied at the beginning of such two fiscal quarters,

 

would be greater than zero and less than 5.0 to 1.0;

 

(ii) the Borrower and any of its Restricted Subsidiaries may Incur Indebtedness,
including Acquired Indebtedness but excluding Priority Indebtedness, if
immediately thereafter the ratio (the “Borrower Indebtedness to Consolidated
Cash Flow Ratio”) of:

 

(A) the aggregate principal amount (or accreted value, as the case may be) of
Indebtedness of the Borrower and its Restricted Subsidiaries on a consolidated
basis outstanding as of the Transaction Date to

 

(B) the Pro Forma Consolidated Cash Flow of the Borrower for the preceding two
full fiscal quarters multiplied by two, determined on a pro forma basis as if
any such Indebtedness that had been Incurred and the proceeds thereof had been
applied at the beginning of such two fiscal quarters,

would be greater than zero and less than 3.5 to 1.0; and

 

(iii) the Borrower and any of its Restricted Subsidiaries may Incur Priority
Indebtedness, including Acquired Indebtedness, if immediately thereafter the
ratio (the “Priority Indebtedness to Consolidated Cash Flow Ratio”) of:

 

(A) the aggregate principal amount (or accreted value, as the case may be) of
Priority Indebtedness of the Borrower and its Subsidiaries on a consolidated
basis outstanding as of the Transaction Date to

 

(B) the Pro Forma Consolidated Cash Flow of the Borrower for the preceding two
full fiscal quarters multiplied by two, determined on a pro forma basis as if
any such Indebtedness that had been Incurred and the proceeds thereof had been
applied at the beginning of such two fiscal quarters,

 

would be greater than zero and less than 2.0 to 1.0.

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(b) Notwithstanding the foregoing, Parent, the Borrower and any other Restricted
Subsidiary of Parent may Incur each and all of the following:

 

(i) Indebtedness of Parent or any of its Restricted Subsidiaries under one or
more Credit Facilities (including the Loans) in an aggregate principal amount at
any one time outstanding not to exceed the greater of:

 

  (a) $50,000,000; or

 

  (b) 65% of Eligible Accounts Receivable, subject to any permanent reductions
required by any other terms of this Agreement;

 

provided, that no Indebtedness Incurred pursuant to this clause (b)(i), other
than Indebtedness in respect of the Loans, shall constitute Priority
Indebtedness;

 

(ii) Indebtedness (including Guarantees) Incurred by Parent or a Restricted
Subsidiary of Parent after the Closing Date to finance the cost (including the
cost of design, development, construction, acquisition, installation or
integration) of equipment used in a Permitted Business or ownership rights with
respect to indefeasible rights of use or minimum investment units (or similar
ownership interests) in domestic or transnational fiber optic cable or other
transmission facilities, in each case purchased or leased by Parent or a
Restricted Subsidiary of Parent after the Closing Date (including acquisitions
by way of Capitalized Leases and acquisitions of the Capital Stock of a Person
that becomes a Restricted Subsidiary of Parent to the extent of the Fair Market
Value (as determined in good faith by the Board of Directors of Parent, whose
determination shall be conclusive and evidenced by a Board Resolution) of such
equipment, ownership rights or minimum investment units so acquired), provided,
that the amount of Indebtedness incurred under this clause (ii) shall not exceed
$50,000,000 in the aggregate at any one time outstanding;

 

(iii) Indebtedness of any Restricted Subsidiary of Parent to Parent or
Indebtedness of Parent or any of its Restricted Subsidiaries to any other of its
Restricted Subsidiaries; provided that any subsequent issuance or transfer of
any Capital Stock which results in any such Restricted Subsidiary ceasing to be
a Restricted Subsidiary of Parent or any subsequent transfer of such
Indebtedness permitted by this clause (iii) (other than to Parent or another
Restricted Subsidiary of Parent) shall be deemed, in each case, to constitute
the Incurrence of such Indebtedness; and provided further that Indebtedness to a
Restricted Subsidiary of Parent (other than the Borrower or a Subsidiary
Guarantor) must be subordinated in right of payment to the Loans or any
Guarantee thereof, as the case may be and, in the case of any Indebtedness other
than intercompany Indebtedness arising out of ordinary course of business
intercompany transactions, may not constitute Priority Indebtedness;

 

(iv) Indebtedness of Parent or a Restricted Subsidiary of Parent issued in
exchange for, or the net proceeds of which are used to refinance or refund, then
outstanding Indebtedness of Parent or a Restricted Subsidiary of Parent, other
than Indebtedness Incurred under clauses (i), (iii), (v), (viii), (ix) and (x)
of this

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

paragraph, and any refinancings thereof in an amount not to exceed the amount so
refinanced or refunded (plus premiums, accrued interest, and reasonable fees and
expenses); provided that such new Indebtedness shall only be permitted under
this clause (iv) if

 

(A) in case the Loans are refinanced in part or the Indebtedness to be
refinanced is pari passu with the Loans or any Guarantee thereof, such new
Indebtedness, by its terms or by the terms of any agreement or instrument
pursuant to which such new Indebtedness is issued or remains outstanding, is
expressly made pari passu with, or subordinate in right of payment to, the
remaining Loans or such Guarantee,

 

(B) in case the Indebtedness to be refinanced is subordinated in right of
payment to the Loans or any Guarantee thereof, such new Indebtedness, by its
terms or by the terms of any agreement or instrument pursuant to which such new
Indebtedness is issued or remains outstanding, is made subordinate expressly in
right of payment to the Loans or such Guarantee at least to the extent that the
Indebtedness to be refinanced is subordinated to the Loans and such Guarantee,

 

(C) such new Indebtedness, determined as of the date of Incurrence of such new
Indebtedness, does not mature prior to the Stated Maturity of the Indebtedness
to be refinanced or refunded, and the Average Life of such new Indebtedness is
at least equal to the remaining Average Life of the Indebtedness to be
refinanced or refunded; and provided further that in no event may (1)
Indebtedness of Parent be refinanced by means of any Indebtedness of any
Restricted Subsidiary of Parent pursuant to this clause (iv) and (2)
Indebtedness of the Borrower be refinanced by means of any Indebtedness of any
Restricted Subsidiary of the Borrower pursuant to this clause (iv); and

 

(D) such new Indebtedness may not constitute Priority Indebtedness except to the
extent that, and in the same manner as, the Indebtedness to be refinanced or
refunded is Priority Indebtedness;

 

(v) Indebtedness of Parent or any Restricted Subsidiary of Parent:

 

(A) in respect of performance, bid, surety or appeal bonds, completion
guarantees or guarantees or warranty of contractual service obligations provided
in the ordinary course of business, and letters of credit or banker’s
acceptances supporting Trade Payables or covering workers’ compensation, errors
and omissions insurance, bid and performance, appeal or similar obligations, in
each case provided in the ordinary course of business;

 

(B) under Currency Agreements and Interest Rate Agreements; provided that such
agreements:

 

  (a) are designed solely to protect Parent or any of its Restricted
Subsidiaries against fluctuation in foreign currency exchange rates or interest
rates, and

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

  (b) do not increase the Indebtedness of the obligor outstanding at any time
other than as a result of fluctuations in foreign currency exchange rates or
interest rates or by reason of fees, indemnities and compensation payable
thereunder; and

 

(C) arising from agreements providing for indemnification, adjustment of
purchase price or similar obligations, or from Guarantees or letters of credit,
surety bonds or performance bonds securing any obligations of Parent or any of
its Restricted Subsidiaries pursuant to such agreements, in any case Incurred in
connection with the disposition of any business, assets or Restricted Subsidiary
(other than Guarantees of Indebtedness Incurred by any Person acquiring all or
any portion of such business, assets or Restricted Subsidiary of Parent for the
purpose of financing such acquisition), in a principal amount not to exceed the
gross proceeds actually received by Parent or any Restricted Subsidiary of
Parent in connection with such disposition;

 

(vi) Indebtedness of the Parent or its Restricted Subsidiaries, as applicable,
to the extent that the net proceeds thereof promptly are deposited to defease,
(x) in the case of Indebtedness of the Borrower, all of the Senior Notes as
described under Article Fourteen of the Senior Note Indenture, (y) in the case
of Indebtedness of the Parent, all of the debt securities of the Parent or one
of its Restricted Subsidiaries (other than the Borrower) of a particular series
pursuant to a comparable provision in such securities, or (z) in the case of
Indebtedness of a Restricted Subsidiary of the Parent (other than the Borrower),
all of the debt securities of that or another Restricted Subsidiary of Parent
(other than the Borrower) of a particular series pursuant to a comparable
provision in such securities; provided, that proceeds of Indebtedness of any
Subsidiary Guarantor may not be used to defease any Indebtedness of any Person
other than such Subsidiary Guarantor or another Subsidiary Guarantor;

 

(vii) Acquired Indebtedness not to exceed $100,000,000 at any one time
outstanding; provided that, as a result of such incurrence:

 

(A) in the case of Acquired Indebtedness incurred by the Borrower or any of its
Restricted Subsidiaries, the Borrower Indebtedness to Consolidated Cash Flow
Ratio at the time of the incurrence of such Acquired Indebtedness and calculated
giving pro forma effect to such incurrence (in accordance with the definition of
“Borrower Indebtedness to Consolidated Cash Flow Ratio”) and the related Asset
Acquisition as if the same had occurred at the beginning of the most recently
ended two fiscal quarters, would have been less than the Borrower Indebtedness
to Consolidated Cash Flow Ratio for the same period without giving pro forma
effect to such incurrence and Asset Acquisition;

 

(B) in the case of Acquired Indebtedness incurred directly by Parent, the Parent
Indebtedness to Consolidated Cash Flow Ratio at the time of the incurrence of
such Acquired Indebtedness and calculated giving pro forma effect

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to such incurrence (in accordance with the definition of “Parent Indebtedness to
Consolidated Cash Flow Ratio”) and the related Asset Acquisition as if the same
had occurred at the beginning of the most recently ended two fiscal quarters,
would have been less than the Parent Indebtedness to Consolidated Cash Flow
Ratio for the same period without giving pro forma effect to such incurrence and
Asset Acquisition; and

 

(C) in the case of Acquired Indebtedness that is Priority Indebtedness, the
Priority Indebtedness to Consolidated Cash Flow Ratio at the time of the
incurrence of such Acquired Indebtedness and calculated giving pro forma effect
to such incurrence (in accordance with the definition of “Priority Indebtedness
to Consolidated Cash Flow Ratio”) and the related Asset Acquisition as if the
same had occurred at the beginning of the most recently ended two fiscal
quarters, would have been less than the Priority Indebtedness to Consolidated
Cash Flow Ratio for the same period without giving pro forma effect to such
incurrence and Asset Acquisition;

 

(viii) Indebtedness of a Restricted Subsidiary of Parent represented by a
Guarantee of the Loans;

 

(ix) Indebtedness (other than Priority Indebtedness) of Parent or any Restricted
Subsidiary of Parent not otherwise permitted hereunder in an aggregate principal
amount which, when aggregated with the principal amount of all other
Indebtedness then outstanding and incurred on or after January 16, 2004 pursuant
to this clause (ix) or clause (ix) of Section 1011 of the Senior Note Indenture,
does not exceed $200,000,000 at any one time outstanding; and

 

(x) Indebtedness of Parent or any Restricted Subsidiary of Parent arising from
the honoring by a bank or other financial institution of a check or similar
instrument inadvertently (except in the case of daylight overdrafts) drawn
against insufficient funds in the ordinary course of business, provided that
such Indebtedness is extinguished within three business days of Incurrence.

 

(c) Notwithstanding any other provision of this Section 6.2, the maximum amount
of Indebtedness that Parent or a Restricted Subsidiary of Parent may Incur
pursuant to this Section 6.2 shall not be deemed to be exceeded with respect to
any outstanding Indebtedness due solely to the result of fluctuations in the
exchange rates of currencies.

 

(d) For purposes of determining any particular amount of Indebtedness under this
Section 6.2, Guarantees, Liens or obligations with respect to letters of credit,
in each case supporting Indebtedness otherwise included in the determination of
such particular amount, shall not be included. For purposes of determining
compliance with this Section 6.2, in the event that an item of Indebtedness
meets the criteria of more than one of the types of Indebtedness described in
the above clauses, Parent in its sole discretion, shall classify and from time
to time may reclassify such item of Indebtedness and only be required to include
the amount and type of such Indebtedness in one of such clauses. Indebtedness
permitted by this Section 6.2 need not be permitted solely by reference to one
provision permitting such Indebtedness but may be permitted in part by one such
provision and in part by one or more other provisions of this Section 6.2
permitting such Indebtedness.

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6.3. Limitation on Restricted Payments. Parent will not, and will not permit any
of its Restricted Subsidiaries directly or indirectly to:

 

(i) (A) declare or pay any dividend or make any distribution in respect of
Parent’s Capital Stock to the holders thereof (other than dividends or
distributions payable solely in shares of Capital Stock (other than Redeemable
Stock) or in options, warrants or other rights to acquire such shares of Capital
Stock), or

 

(B) declare or pay any dividend or make any distribution in respect of the
Capital Stock of any Restricted Subsidiary of Parent to any Person other than
dividends and distributions payable to Parent or any Restricted Subsidiary of
Parent or to all holders of Capital Stock of such Restricted Subsidiary on a pro
rata basis;

 

(ii) purchase, redeem, retire or otherwise acquire for value any shares of
Capital Stock (including options, warrants or other rights to acquire such
shares of Capital Stock) of Parent held by any Person other than a Restricted
Subsidiary of Parent;

 

(iii) make any voluntary or optional principal payment, or voluntary or optional
redemption, repurchase, defeasance, or other acquisition or retirement for value
of Subordinated Indebtedness; or

 

(iv) make any Investment, other than a Permitted Investment, in any Person (such
payments or any other actions described in clauses (i) through (iv) being
collectively “Restricted Payments”);

 

if, at the time of, and after giving effect to, the proposed Restricted Payment:

 

(A) a Default or Event of Default shall have occurred and be continuing;

 

(B) Parent could not Incur at least $1.00 of Indebtedness under clause (i) of
paragraph (a) of Section 6.2; or

 

(C) the aggregate amount expended for all Restricted Payments (the amount so
expended, if other than in cash, to be determined in good faith by the Board of
Directors, whose determination shall be conclusive and evidenced by a Board
Resolution) after January 16, 2004 shall exceed the sum of:

 

(1) the remainder of

 

(a) 100% of the aggregate amount of the Consolidated Cash Flow of Parent
(determined by excluding income resulting

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from transfers of assets received by Parent or a Restricted Subsidiary of Parent
from an Unrestricted Subsidiary) accrued on a cumulative basis during the period
(taken as one accounting period) beginning on the first day of Parent’s fourth
fiscal quarter in 1999 and ending on the last day of the last full fiscal
quarter preceding the Transaction Date, minus

 

(b) the product of 1.75 times cumulative Consolidated Fixed Charges accrued on a
cumulative basis during the period (taken as one accounting period) beginning on
the first day of Parent’s fourth fiscal quarter in 1999 and ending on the last
day of the last full fiscal quarter preceding the Transaction Date, plus

 

(2) the aggregate Net Cash Proceeds received by Parent on or after October 15,
1999 from the issuance and sale of its Capital Stock (other than Redeemable
Stock) to a Person who is not a Subsidiary, plus

 

(3) the aggregate Net Cash Proceeds received on or after October 15, 1999 by
Parent from the issuance or sale of debt securities that have been converted
into or exchanged for its Capital Stock (other than Redeemable Stock) together
with the aggregate cash received by us at the time of such conversion or
exchange, plus

 

(4) without duplication of any amount included in the calculation of
Consolidated Cash Flow of Parent, in the case of repayment of, or return of
capital in respect of, any Investment constituting a Restricted Payment made on
or after October 15, 1999 and reducing the amount of Restricted Payments
otherwise permitted under this clause (C), an amount equal to the lesser of the
return of capital with respect to such Investment and the cost of such
Investment, in either case less the cost of the disposition of such Investment.

 

The foregoing provision shall not be violated by reason of:

 

(a) the payment of any dividend within 60 days after the date of declaration
thereof if, at said date of declaration, such payment would comply with the
foregoing paragraph;

 

(b) the redemption, repurchase, defeasance or other acquisition or retirement
for value of Subordinated Indebtedness of either Obligor (including premium, if
any, and accrued and unpaid interest) with the proceeds of, or in exchange for,
Indebtedness of such Obligor Incurred under clause (iv) of paragraph (b) of
Section 6.2;

 

(c) the repurchase, redemption or other acquisition of Capital Stock of Parent
with the proceeds of, or in exchange for, an offering of shares of Capital Stock
of Parent (other than Redeemable Stock) which proceeds are received or which
Capital Stock is exchanged, tendered or surrendered, as the case maybe, no more
than 60 days prior to, and no later than the date of, such repurchase,
redemption or other acquisition;

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(d) the redemption, repurchase, defeasance or other acquisition or retirement
for value of Subordinated Indebtedness of either Obligor (including premium, if
any, and accrued and unpaid interest) with the proceeds of, or in exchange for,
an offering of, shares of Capital Stock of Parent (other than Redeemable Stock),
which proceeds are received or which Subordinated Indebtedness is exchanged,
surrendered or tendered, as the case may be, no more than 60 days prior to, and
no later than the date of, such redemption, repurchase, defeasance or other
acquisition or retirement for value;

 

(e) payments or distributions to dissenting stockholders pursuant to applicable
law, pursuant to or in connection with a consolidation, merger or transfer of
assets that complies, if applicable, with the provisions of this Agreement
applicable to mergers, consolidations and transfers of all or substantially all
of the property and assets of Parent and its Restricted Subsidiaries or the
Borrower and its Restricted Subsidiaries, as the case may be;

 

(f) cash payments in lieu of the issuance of fractional shares issued in
connection with the exercise of warrants, options or other rights to purchase,
or the conversion of securities convertible into, Capital Stock of Parent or any
of its Restricted Subsidiaries;

 

(g) Investments in Permitted Businesses acquired in exchange for Capital Stock
of Parent (other than Redeemable Stock) or with the Net Cash Proceeds from the
issuance and sale of such Capital Stock;

 

(h) [reserved];

 

(i) repurchases of Capital Stock of Parent options, warrants or other rights to
acquire such Capital Stock from employees, former employees, directors or former
directors (or their heirs or estates) of Parent or any Restricted Subsidiary in
an aggregate amount under this clause (i) not to exceed $5,000,000 in any
calendar year;

 

(j) repurchases of shares of Common Stock of Parent that constitute odd lots,
pursuant to a program for the repurchase of odd lots, in an aggregate amount not
to exceed the sum of $2,000,000 in any fiscal year;

 

(k) Restricted Payments not to exceed $25,000,000 in the aggregate since (and
including) January 16, 2004;

 

(l) other Restricted Payments not to exceed $20,000,000 in the aggregate during
any calendar year (with the entire unused amount in any calendar year, including
previously carried over amounts, being permitted to be carried over for the next
succeeding calendar year); provided, that such amount in any calendar year may
be increased by an amount equal to Unclaimed Excess Proceeds (with the entire
unused amount in any calendar year, including previously carried over amounts,
being permitted to be carried over for the next succeeding calendar year);
provided, further that upon the making of any such Restricted Payment (i) the
Parent Indebtedness to Consolidated Cash Flow Ratio, calculated giving pro forma
effect to such Restricted Payment as if the same had been made at the beginning
of the most recently ended two fiscal quarters, would be greater than zero and
equal to or less than 3.0 to 1 and (ii) the Borrower Indebtedness to
Consolidated Cash Flow Ratio, calculated giving pro forma effect to such
Restricted Payment as if the same had been made at the beginning of the most
recently ended two fiscal quarters, would be greater than zero and equal to or
less than 1.5 to 1; and

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(m) the declaration and payment of dividends or distributions to holders of any
class or series of Redeemable Stock of Parent, the Borrower or any Restricted
Subsidiary issued or incurred in accordance with Section 6.2,

 

provided that, except in the case of clause (a), no Default or Event of Default
shall have occurred and be continuing or occur as a consequence of the actions
or payments set forth therein.

 

Each Restricted Payment permitted pursuant to the immediately preceding
paragraph (other than (1) a Restricted Payment referred to in clause (b)
thereof, (2) an exchange of Capital Stock for Capital Stock or an exchange of
Indebtedness for Capital Stock referred to in clauses (c) or (d) thereof or (3)
an exchange of Capital Stock referred to in clause (g) thereof) and the Net Cash
Proceeds from any issuance of Capital Stock referred to in clauses (c), (d) and
(g) shall be included in calculating whether the conditions of clause (C) of the
first paragraph of this Section 6.3 have been met with respect to any subsequent
Restricted Payments.

 

Any Restricted Payments made other than in cash shall be valued at Fair Market
Value as determined by the Board of Directors of Parent (whose determination
shall be conclusive and evidenced by a Board Resolution). The amount of any
Investment “outstanding” at any time shall be deemed to be equal to the amount
of such Investment on the date made, less the return of capital, repayment of
loans, and release of Guarantees, in each case of or to Parent and its
Restricted Subsidiaries with respect to such Investment (up to the amount of
such Investment on the date made).

 

6.4. Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries. Parent will not, and will not permit any of its Restricted
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Restricted Subsidiary of Parent to:

 

(i) pay dividends or make any other distributions permitted by applicable law on
any Capital Stock of such Restricted Subsidiary owned by Parent or any other
Restricted Subsidiary;

 

(ii) pay any indebtedness owed to Parent or any other Restricted Subsidiary;

 

(iii) make loans or advances to Parent or any other Restricted Subsidiary; or

 

(iv) transfer any of its property or assets to Parent or any other Restricted
Subsidiary.

 

The foregoing provisions shall not restrict any encumbrances or restrictions:

 

(i) existing on the Closing Date in this Agreement, the other Loan Documents or
any other agreements in effect on the Closing Date, and any extensions,
refinancings, renewals

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or replacements of such agreements; provided that the encumbrances and
restrictions in any such extensions, refinancings, renewals or replacements,
taken as a whole, are no less favorable in any material respect to the Lenders
than those encumbrances or restrictions that are then in effect and that are
being extended, refinanced, renewed or replaced;

 

(ii) contained in the terms of any Indebtedness or any agreement pursuant to
which such Indebtedness was issued if the encumbrance or restriction applies
only in the event of a payment default or default with respect to a financial
covenant contained in such Indebtedness or agreement and such encumbrance or
restriction is not materially more disadvantageous to the Lenders than is
customary in comparable financings (as determined by Parent) and Parent
determines that any such encumbrance or restriction will not materially affect
the Borrower’s ability to make principal or interest payments on the Loans;

 

(iii) existing under or by reason of applicable law;

 

(iv) existing with respect to any Person or the property or assets of such
Person acquired by Parent or any Restricted Subsidiary of Parent, existing at
the time of such acquisition and not incurred in contemplation thereof, which
encumbrances or restrictions are not applicable to any Person or the property or
assets of any Person other than such Person or the property or assets of such
Person so acquired and as the same may be amended, modified, restated, renewed,
supplemented, refunded, replaced or refinanced; provided that such amendments,
modifications, restatements, renewals, supplements, refundings, replacements or
refinancings, taken as a whole, are no less favorable in any material respect to
the Lenders than those encumbrances or restrictions that are then in effect and
that are being so amended, modified, restated, renewed, supplemented, refunded,
replaced or refinanced;

 

(v) in the case of clause (iv) of the first paragraph of this Section 6.4,

 

(A) that restrict in a customary manner the subletting, assignment or transfer
of any property or asset that is, or is subject to, a lease, purchase mortgage
obligation, construction financing agreement, license, conveyance or contract or
similar property or asset, including, without limitation, customary
non-assignment provisions in leases, Purchase Money Obligations and other
similar agreements, in each case with respect to the property or assets subject
thereto,

 

(B) existing by virtue of any transfer of, agreement to transfer, option or
right with respect to, or Lien on, any property or assets of Parent or any
Restricted Subsidiary of Parent not otherwise prohibited by this Agreement, or

 

(C) arising or agreed to in the ordinary course of business, not relating to any
Indebtedness, and that do not, individually or in the aggregate, detract from
the value of property or assets of Parent or any Restricted Subsidiary of Parent
in any manner material to Parent or any Restricted Subsidiary;

 

(vi) with respect to a Restricted Subsidiary of Parent and imposed pursuant to
an agreement that has been entered into for the sale or disposition of all or
substantially all of the Capital Stock of, or property and assets of, such
Restricted Subsidiary of Parent; or

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(vii) imposed by customary provisions in joint venture agreements and similar
agreements that restrict the transfer of the interest in the joint venture.

 

Nothing contained in this Section 6.4 shall prevent Parent or any Restricted
Subsidiary of Parent from (1) creating, incurring, assuming or suffering to
exist any Liens otherwise permitted in Section 6.7 or (2) restricting the sale
or other disposition of property or assets of Parent or any of its Restricted
Subsidiaries that secure Indebtedness of Parent or any of its Restricted
Subsidiaries.

 

6.5. Limitation on the Issuance and Sale of Voting Stock of Restricted
Subsidiaries. Parent shall at all times own 100% of the Voting Stock of the
Borrower. Parent will not sell, transfer, convey or otherwise dispose of and
will not permit any of its Restricted Subsidiaries, directly or indirectly, to
issue, transfer, convey, sell, lease or otherwise dispose of any shares of
Voting Stock (including options, warrants or other rights to purchase shares of
such Voting Stock) of such or any other Restricted Subsidiary to any Person
except:

 

(i) to a Restricted Subsidiary of Parent;

 

(ii) issuances of director’s qualifying shares or sales to foreign nationals or
directors or employees of Parent or its Restricted Subsidiaries of shares of
Voting Stock of non-U.S. Restricted Subsidiaries of Parent to the extent
required by law or to the extent such issuances are required to obtain
preferential treatment under law that does not adversely affect the rights of
the Lenders in any material respect;

 

(iii) Voting Stock or options or other rights to acquire shares of Voting Stock
(or shares of Voting Stock issued upon exercise of such options or other rights)
granted to employees or directors of no more than two Restricted Subsidiaries of
Parent designated by Parent and identified in an Officer’s Certificate delivered
to the Administrative Agent (“Designated Subsidiaries”), pursuant to the terms
of any management equity or compensation plan or stock option plan or any other
management or employee benefit plan or other similar agreement or arrangement;
provided, that such Voting Stock, options and other rights to acquire shares,
together with the issuance of shares of Voting Stock upon the exercise thereof,
shall not represent more than 5.0% of the fully diluted Voting Stock of any such
Restricted Subsidiary; provided further, that if and only if any Designated
Subsidiary ceases to be a Subsidiary of Parent, Parent may designate another
Restricted Subsidiary in its place by identifying that Restricted Subsidiary in
an Officer’s Certificate delivered to the Administrative Agent and that
Restricted Subsidiary shall thereupon be deemed a Designated Subsidiary for all
purposes under this Agreement;

 

(iv) issuances and sales of Voting Stock of Restricted Subsidiaries of Parent
if:

 

(A) the Net Cash Proceeds from such issuance, transfer, conveyance, sale, lease
or other disposition are applied in accordance with the provisions of Section
6.8, and

 

(B) immediately after giving effect to such issuance, transfer, conveyance,
sale, lease or other disposition, such Restricted Subsidiary either continues to
be a Restricted Subsidiary or, if such Restricted Subsidiary would no

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longer constitute a Restricted Subsidiary, then any Investment in such Person
remaining after giving effect to such issuance, transfer, conveyance, sale,
lease or other disposition would have been permitted to be made under Section
6.3 if made on the date of such issuance, transfer, conveyance, sale, lease or
other disposition (valued as provided in the definition of “Investment”); and

 

(v) sales of Lingo Capital Stock through a Lingo Offering.

 

Notwithstanding the foregoing, Parent or any of its Restricted Subsidiaries may
sell all of the Voting Stock of a Restricted Subsidiary in compliance with the
provisions of Section 6.8.

 

6.6. Limitation on Transactions with Shareholders and Affiliates. Parent will
not, and will not permit any Restricted Subsidiary, directly or indirectly, to
enter into, renew or extend any transaction (including, without limitation, the
purchase, sale, lease or exchange of property or assets, or the rendering of any
service) with any holder (or any Affiliate of such holder) of 10% or more of any
class of Capital Stock of Parent or with any Affiliate of Parent, unless:

 

(i) such transaction or series of transactions is on terms no less favorable to
Parent or such Restricted Subsidiary than those that could be obtained in a
comparable arm’s length transaction with a Person that is not such a holder or
an Affiliate;

 

(ii) if such transaction or series of transactions involves aggregate
consideration in excess of $10,000,000, then such transaction or series of
transactions is approved by a majority of the Board of Directors of Parent,
including the approval of a majority of the independent, disinterested
directors, and is evidenced by a resolution of the Board of Directors of Parent;
and

 

(iii) if such transaction or series of transactions involves aggregate
consideration in excess of $25,000,000, then Parent or such Restricted
Subsidiary will deliver to the Administrative Agent a written opinion as to the
fairness to Parent or such Restricted Subsidiary of such transaction from a
financial point of view from a nationally recognized investment banking firm
(or, if an investment banking firm is generally not qualified to give such an
opinion, by a nationally recognized appraisal firm or accounting firm). Any such
transaction or series of transactions shall be conclusively deemed to be on
terms no less favorable to Parent or such Restricted Subsidiary than those that
could be obtained in an arm’s length transaction if such transaction or
transactions are approved by a majority of the Board of Directors of Parent,
including a majority of the independent, disinterested directors, and are
evidenced by a resolution of the Board of Directors of Parent.

 

The foregoing limitation does not limit, and will not apply to:

 

(a) any transaction between Parent and any of its Restricted Subsidiaries or
between Restricted Subsidiaries;

 

(b) the payment of reasonable and customary regular fees to directors of Parent
or any of its Restricted Subsidiaries who are not its employees and
Indemnification Arrangements entered into by Parent or any of its Restricted
Subsidiaries and approved by the Board of Directors of Parent;

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(c) any Restricted Payments not prohibited by Section 6.3 and any Permitted
Investment other than a Permitted Investment made pursuant to clause (ix) of the
definition thereof;

 

(d) transactions provided for in the Employment Agreement as in effect on
January 16, 2004;

 

(e) loans and advances to employees of Parent or any Restricted Subsidiary not
exceeding at any one time outstanding $5,000,000 in the aggregate, in the
ordinary course of business and in accordance with past practice;

 

(f) any issuance of shares of Capital Stock (other than Redeemable Stock) of
Parent and any options, warrants or other rights to acquire such Capital Stock;

 

(g) any issuance or sale of shares of Capital Stock (other than Redeemable
Stock) of a Designated Subsidiary and any options, warrants or other rights to
acquire such Capital Stock, in each case made in accordance with clause (iii) of
Section 6.5;

 

(h) any employment arrangements entered into by Parent or any of its Restricted
Subsidiaries in the ordinary course of business and approved by the Board of
Directors of Parent; and

 

(i) any tax-sharing agreement, and payments or other transactions pursuant
thereto, between Parent and any other Person with which Parent files a
consolidated tax return or with which Parent is part of a consolidated group for
tax purposes, in each case approved by the Board of Directors of Parent.

 

6.7. Limitation on Liens. Parent will not, and will not permit any Restricted
Subsidiary to, (a) create, incur, assume or suffer to exist any Lien (other than
Permitted Liens) on any of its assets or properties of any character (including,
without limitation, licenses and trademarks), or any shares of Capital Stock or
Indebtedness of any Restricted Subsidiary of Parent or (b) create or assume any
Lien (other than Permitted Liens) on any of its assets or properties of any
character (including, without limitation, licenses and trademarks), or on any
shares of Capital Stock or Indebtedness of any Restricted Subsidiary of Parent
if (i) such Lien secures Indebtedness and (ii) immediately thereafter, the
Priority Indebtedness to Consolidated Cash Flow Ratio would be equal to or
greater than 2.0 to 1.0.

 

6.8. Limitation on Asset Sales. Parent will not, and will not permit any of its
Restricted Subsidiaries to, make any Asset Sale unless (i) Parent or the
Restricted Subsidiary, as the case may be, receives consideration at the time of
such sale or other disposition at least equal to the Fair Market Value of the
assets sold or disposed of as determined by the good-faith judgment of the Board
of Directors of Parent, which determination, in each case where such Fair Market
Value is greater than $10,000,000, will be evidenced by a Board Resolution, (ii)
at least 75% of the consideration received for such sale or other disposition
consists of cash or cash equivalents, Marketable Securities or the assumption of
unsubordinated Indebtedness and (iii) an amount equal to the Net Cash Proceeds
of such Asset Sale are applied in accordance with the Senior Note Indenture as
in effect on the date hereof (subject to Section 2.7).

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6.9. Limitation on Issuances of Guarantees of Indebtedness by Restricted
Subsidiaries. Parent will not permit any of its Restricted Subsidiaries other
than the Borrower, directly or indirectly, to guarantee, assume or in any other
manner become liable with respect to any Indebtedness of Parent or the Borrower,
unless (i) such Restricted Subsidiary simultaneously executes and delivers a
Guarantee of the Loans on terms substantially similar to the guarantee of such
Indebtedness, except that if such Indebtedness is by its express terms
subordinated in right of payment to the Loans, any such assumption Guarantee or
other liability of such Restricted Subsidiary with respect to such Indebtedness
shall be subordinated in right of payment to such Restricted Subsidiary’s
assumption, Guarantee or other liability with respect to the Loans substantially
to the same extent as such Indebtedness is subordinated to the Loans and (ii)
such Restricted Subsidiary waives, and will not in any manner whatsoever claim
or take the benefit or advantage of, any rights of reimbursement, indemnity or
subrogation or any other rights against the Obligors or any other Restricted
Subsidiary as a result of any payment by such Restricted Subsidiary under its
Guarantee.

 

Notwithstanding the foregoing, any Guarantee by a Restricted Subsidiary may
provide by its terms that it will be automatically and unconditionally released
and discharged upon (i) any sale, exchange or transfer, to any Person not an
Affiliate of Parent, of all of Parent’s and each Restricted Subsidiary’s Capital
Stock in, or all or substantially all of the assets of, such Restricted
Subsidiary (which sale, exchange or transfer is not prohibited by this
Agreement), (ii) the designation of such Restricted Subsidiary as an
Unrestricted Subsidiary in accordance with this Agreement, or (iii) the release
or discharge of the guarantee which resulted in the creation of such Guarantee,
except a discharge or release by or as a result of payment under such guarantee.

 

6.10. Business of Parent. Parent will not, and will not permit any Restricted
Subsidiary to, be principally engaged in any business or activity other than a
Permitted Business.

 

6.11. Restriction on Transfer of Assets. Except for the transfer to the Lingo
Subsidiary of assets contemplated within the definition of “Lingo Subsidiary” in
Section 1.1, Parent will not, and will not permit any Restricted Subsidiary to,
sell, lease, assign, transfer or otherwise dispose of any assets constituting
Collateral to any Affiliate other than the Borrower or a Subsidiary Guarantor.

 

6.12. Restriction on Certain Purchases of Indebtedness. No Restricted Subsidiary
shall purchase any Indebtedness of Parent or Borrower evidenced by securities
that were previously issued or the subject of one or more transactions
registered under the Securities Act of 1933, as amended.

 

6.13. Restriction on Use of Proceeds. The Borrower will not, directly or
indirectly, use any proceeds of the Loans to pay any cash dividend on, or to
repurchase, any Capital Stock of any Person. For avoidance of doubt, the term
“Capital Stock”, as used in this Section, shall not include any debt that, by
its terms, is convertible into Capital Stock.

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6.14. Restriction on Deposit Accounts and Securities Accounts. Neither Parent
nor the Borrower will, nor will Parent or the Borrower permit any Subsidiary
Guarantor to, at any time after the date which is 30 days after the Closing
Date, maintain any deposit account or securities account (as such terms are
defined in the Uniform Commercial Code in New York) with any bank or securities
intermediary in the United States, other than (a) deposit accounts and
securities accounts in which the Administrative Agent has a perfected security
interest pursuant to control agreements with the institutions maintaining such
deposit accounts and securities accounts, (b) deposit accounts and securities
accounts holding cash and investment property in an aggregate amount not
exceeding $500,000 and (c) Account No. 24900074 maintained at Bank of America,
N.A., which at no time shall hold cash and investment property exceeding
$10,000,000 in the aggregate.

 

SECTION 7. EVENTS OF DEFAULT

 

If any of the following events shall occur and be continuing:

 

(a) the Borrower shall fail to pay any principal of any Loan when due in
accordance with the terms hereof; or the Borrower shall fail to pay any interest
on any Loan, or any other amount payable hereunder or under any other Loan
Document, within five days after any such interest or other amount becomes due
in accordance with the terms hereof or thereof; or

 

(b) any representation or warranty made or deemed made by any Loan Party herein
or in any other Loan Document or that is contained in any certificate, document
or financial statement furnished by it at any time under or in connection with
this Agreement or any such other Loan Document shall prove to have been
inaccurate in any material respect on or as of the date made or deemed made or
furnished; or

 

(c) (i) any Loan Party shall default in the observance or performance of any
agreement contained in clause (i) or (ii) of Section 5.4(a) (with respect to
Parent and the Borrower only), Section 5.7(a) or Section 6, or in Section 5 of
the Guarantee and Collateral Agreement or (ii) an “Event of Default” under and
as defined in any Mortgage shall have occurred and be continuing; or

 

(d) any Loan Party shall default in the observance or performance of any other
agreement contained in this Agreement or any other Loan Document (other than as
provided in paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 days; or

 

(e) Parent, the Borrower or any of Borrower’s Significant Subsidiaries shall (i)
default in making any payment of any principal of any Indebtedness (including,
without limitation, any Guarantee of Indebtedness, but excluding the Loans) on
the scheduled or original due date with respect thereto; or (ii) default in
making any payment of any interest on any such Indebtedness beyond the period of
grace, if any, provided in the instrument or agreement under which such
Indebtedness was created; or (iii) default in the observance or performance of
any other agreement or condition relating to any such Indebtedness contained in
any instrument or agreement evidencing, securing or relating thereto and such
default shall continue beyond the period of grace, if any, provided in such
instrument or agreement, or any other event shall occur

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or condition exist and shall continue beyond the period of grace, if any,
provided, the effect of which default or other event or condition is to cause,
or to permit the holder or beneficiary of such Indebtedness (or a trustee or
agent on behalf of such holder or beneficiary) to cause, with the giving of
notice if required, such Indebtedness to become due prior to its stated maturity
or to become subject to a mandatory offer to purchase by the obligor thereunder
or (in the case of any such Indebtedness constituting a Guarantee) to become
payable; provided, that a default, event or condition described in clause (i),
(ii) or (iii) of this paragraph (e) shall not at any time constitute an Event of
Default unless, at such time, one or more defaults, events or conditions of the
type described in clauses (i), (ii) and (iii) of this paragraph (e) shall have
occurred and be continuing with respect to Indebtedness the outstanding
principal amount of which exceeds in the aggregate $25,000,000; or

 

(f) (i) Parent, the Borrower or any of Borrower’s Significant Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or Parent, the Borrower or any of Borrower’s Significant Subsidiaries
shall make a general assignment for the benefit of its creditors; or (ii) there
shall be commenced against Parent, the Borrower or any of Borrower’s Significant
Subsidiaries any case, proceeding or other action of a nature referred to in
clause (i) above that (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against
Parent, the Borrower or any of Borrower’s Significant Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets that results in the entry of an order for any such relief that shall
not have been vacated, discharged, or stayed or bonded pending appeal within 60
days from the entry thereof; or (iv) Parent, the Borrower or any of Borrower’s
Significant Subsidiaries shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii), or (iii) above; or (v) Parent, the Borrower or any of
Borrower’s Significant Subsidiaries shall generally not, or shall be unable to,
or shall admit in writing its inability to, pay its debts as they become due; or

 

(g) (i) any Person shall engage in any “prohibited transaction” (as defined in
Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any
“accumulated funding deficiency” (as defined in Section 302 of ERISA), whether
or not waived, shall exist with respect to any Plan, or any Lien in favor of the
PBGC or a Plan shall arise on the assets of the Borrower or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lenders shall be likely to, incur any liability in connection
with a withdrawal from, or the

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Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other event or
condition shall occur or exist with respect to a Plan; and in each case in
clauses (i) through (vi) above, such event or condition, together with all other
such events or conditions, if any, could, in the sole judgment of the Required
Lenders, reasonably be expected to have a Material Adverse Effect; or

 

(h) one or more judgments or decrees shall be entered against Parent, the
Borrower or any of its Subsidiaries involving for Parent, the Borrower and its
Subsidiaries taken as a whole a liability (not paid or as to which the
applicable insurance company has denied coverage) of $25,000,000 or more, and
all such judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 30 days from the entry thereof; or

 

(i) any of the Security Documents shall cease, for any reason (other than as
permitted by the Loan Documents or any amendments thereto), to be in full force
and effect, or any Loan Party or any Affiliate of any Loan Party shall so
assert, or any Lien created by any of the Security Documents shall cease to be
enforceable and of the same effect and priority purported to be created thereby;
or

 

(j) the guarantee contained in Section 2 of the Guarantee and Collateral
Agreement shall cease, for any reason (other than by reason of the express
release thereof pursuant to Section 9.15), to be in full force and effect or any
Loan Party or any Affiliate of any Loan Party shall so assert; or

 

(k) any Change of Control shall occur;

 

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents shall immediately become due and payable,
and (B) if such event is any other Event of Default, with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents to be due and
payable forthwith, whereupon the same shall immediately become due and payable.

 

SECTION 8. THE AGENTS

 

8.1. Appointment. Each Lender hereby irrevocably designates and appoints the
Agents as the agents of such Lender under this Agreement and the other Loan
Documents, and each Lender irrevocably authorizes each Agent, in such capacity,
to take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to such Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, no Agent shall have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against any Agent.

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8.2. Delegation of Duties. Each Agent may execute any of its duties under this
Agreement and the other Loan Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. No Agent shall be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected by it with reasonable care.

 

8.3. Exculpatory Provisions. Neither any Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or any other Loan Document (except to
the extent that any of the foregoing are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from its or such
Person’s own gross negligence or willful misconduct) or (ii) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by any Loan Party or any officer thereof contained in this
Agreement or any other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the Agents under
or in connection with, this Agreement or any other Loan Document or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Loan Document or for any failure of any Loan Party
to perform its obligations hereunder or thereunder. The Agents shall not be
under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Loan Party.

 

8.4. Reliance by Agents. Each Agent shall be entitled to rely, and shall be
fully protected in relying, upon any instrument, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Loan Parties), independent accountants and other
experts selected by such Agent. The Agents may deem and treat the payee of any
Note as the owner thereof for all purposes unless such Note shall have been
transferred in accordance with Section 9.6 and all actions required by such
Section in connection with such transfer shall have been taken. Each Agent shall
be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders (or, if so specified by this Agreement,
all Lenders or any other instructing group of Lenders specified by this
Agreement) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action.
Each Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement and the other Loan Documents in accordance
with a request of the Required Lenders (or, if so specified by this Agreement,
all Lenders or any other instructing group of Lenders specified by this
Agreement), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Loans.

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8.5. Notice of Default. No Agent shall be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default hereunder unless such Agent
shall have received notice from a Lender, Parent or the Borrower referring to
this Agreement, describing such Default or Event of Default and stating that
such notice is a “notice of default”. In the event that the Administrative Agent
shall receive such a notice, the Administrative Agent shall give notice thereof
to the Lenders. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Required
Lenders (or, if so specified by this Agreement, all Lenders or any other
instructing group of Lenders specified by this Agreement); provided that unless
and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.

 

8.6. Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither any of the Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by any Agent
hereafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by any Agent to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon any Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, no Agent shall have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, operations, property, condition (financial or otherwise), prospects or
creditworthiness of any Loan Party or any affiliate of a Loan Party that may
come into the possession of such Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.

 

8.7. Indemnification. The Lenders agree to indemnify each Agent in its capacity
as such (to the extent not reimbursed by Parent or the Borrower and without
limiting the obligation of Parent or the Borrower to do so), ratably according
to their respective Percentages in effect on the date on which indemnification
is sought under this Section (or, if indemnification is sought after the date
upon which the Commitments shall have terminated and the Loans shall have been
paid in full, ratably in accordance with such Percentages immediately prior to
such date), for, and to save each Agent harmless from and against, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever that may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against such Agent in any way

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relating to or arising out of, the Commitments, this Agreement, any of the other
Loan Documents or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by such Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements that are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from such Agent’s
gross negligence or willful misconduct. The agreements in this Section shall
survive the payment of the Loans and all other amounts payable hereunder.

 

8.8. Agent in Its Individual Capacity. Each Agent and its affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
any Loan Party as though such Agent were not an Agent. With respect to its Loans
made or renewed by it, each Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Lender and may exercise the
same as though it were not an Agent, and the terms “Lender” and “Lenders” shall
include each Agent in its individual capacity.

 

8.9. Successor Administrative Agent. The Administrative Agent may resign as
Administrative Agent upon 10 days’ notice to the Lenders and the Borrower. If
the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall (unless an Event of Default under Section 7(a) or Section 7(f) with
respect to the Borrower shall have occurred and be continuing) be subject to
approval by the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term “Administrative Agent” shall
mean such successor agent effective upon such appointment and approval, and the
former Administrative Agent’s rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a retiring
Administrative Agent’s notice of resignation, the retiring Administrative
Agent’s resignation shall nevertheless thereupon become effective, and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. The Syndication Agent may, at any time, by notice
to the Lenders and the Administrative Agent, resign as Syndication Agent
hereunder, whereupon the duties, rights, obligations and responsibilities of the
Syndication Agent hereunder shall automatically be assumed by, and inure to the
benefit of, the Administrative Agent, without any further act by the Syndication
Agent, the Administrative Agent or any Lender. After any retiring Agent’s
resignation as Agent, the provisions of this Section 8 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement and the other Loan Documents.

 

8.10. Authorization to Release Liens and Guarantees. The Administrative Agent is
hereby irrevocably authorized by each of the Lenders to effect any release of
Liens or guarantee obligations contemplated by Section 9.15.

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8.11. The Arranger; the Syndication Agent. Neither the Arranger, nor the
Syndication Agent, in their respective capacities as such, shall have any duties
or responsibilities, nor shall either such Person incur any liability, under
this Agreement and the other Loan Documents.

 

SECTION 9. MISCELLANEOUS

 

9.1. Amendments and Waivers. Neither this Agreement or any other Loan Document,
nor any terms hereof or thereof may be amended, supplemented or modified except
in accordance with the provisions of this Section 9.1. The Required Lenders and
each Loan Party party to the relevant Loan Document may, or (with the written
consent of the Required Lenders) the Agents and each Loan Party party to the
relevant Loan Document may, from time to time, (a) enter into written
amendments, supplements or modifications hereto and to the other Loan Documents
(including amendments and restatements hereof or thereof) for the purpose of
adding any provisions to this Agreement or the other Loan Documents or changing
in any manner the rights of the Lenders or of the Loan Parties hereunder or
thereunder or (b) waive, on such terms and conditions as may be specified in the
instrument of waiver, any of the requirements of this Agreement or the other
Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement or
modification shall:

 

(i) forgive the principal amount or extend the final scheduled date of maturity
of any Loan, extend the scheduled date of any amortization payment in respect of
any Loan, reduce the stated rate of any interest or fee (including, without
limitation, any prepayment fee payable pursuant to Section 2.6 or 2.7) payable
under this Agreement (except (x) in connection with the waiver of applicability
of any post-default increase in interest rates (which waiver shall be effective
with the consent of the Required Lenders) and (y) that any amendment or
modification of defined terms used in the financial covenants in this Agreement
shall not constitute a reduction in the rate of interest or fees for purposes of
this clause (i)) or extend the scheduled date of any payment thereof, or
increase the amount or extend the expiration date of any Commitment of any
Lender, in each case without the consent of each Lender directly affected
thereby;

 

(ii) amend, modify or waive any provision of this Section or reduce any
percentage specified in the definition of Required Lenders, consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents, release all or substantially
all of the Collateral or release all or substantially all of the Guarantors from
their guarantee obligations under the Guarantee and Collateral Agreement, in
each case without the consent of all the Lenders (but excluding the releases
contemplated by Section 9.15(a) in connection with any Lingo Offering);

 

(iii) amend, modify or waive any provision of Section 8, or any other provision
affecting the rights, duties or obligations of any Agent, without the consent of
any Agent directly affected thereby;

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(iv) amend, modify or waive any provision of Section 2.13 without the consent of
each Lender directly affected thereby; or

 

(v) impose restrictions on assignments and participations that are more
restrictive than, or additional to, those set forth in Section 9.6.

 

Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Agents and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Agents shall be restored to their
former position and rights hereunder and under the other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon. Any such waiver,
amendment, supplement or modification shall be effected by a written instrument
signed by the parties required to sign pursuant to the foregoing provisions of
this Section; provided, that delivery of an executed signature page of any such
instrument by facsimile transmission shall be effective as delivery of a
manually executed counterpart thereof.

 

For the avoidance of doubt, this Agreement and any other Loan Document may be
amended (or amended and restated) with the written consent of the Required
Lenders, the Administrative Agent and each Loan Party to each relevant Loan
Document (x) to add one or more additional credit facilities to this Agreement
and to permit the extensions of credit from time to time outstanding thereunder
and the accrued interest and fees in respect thereof (collectively, the
“Additional Extensions of Credit”) to share ratably in the benefits of this
Agreement and the other Loan Documents with the Loans and the accrued interest
and fees in respect thereof and (y) to include appropriately the Lenders holding
such credit facilities in any determination of the Required Lenders.

 

9.2. Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy), and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered, or three Business Days after being deposited in
the mail, postage prepaid, or, in the case of telecopy notice, when received,
addressed (a) in the case of Parent, the Borrower and the Agents, as follows and
(b) in the case of the Lenders, as set forth in an administrative questionnaire
delivered to the Administrative Agent or on Schedule I to the Lender Addendum to
which such Lender is a party or, in the case of a Lender which becomes a party
to this Agreement pursuant to an Assignment and Acceptance, in such Assignment
and Acceptance or (c) in the case of any party, to such other address as such
party may hereafter notify to the other parties hereto:

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Parent:   

Primus Telecommunications Group, Incorporated

7901 Jones Branch Drive

Suite 900

McLean, Virginia 22102

Attention:    Thomas Kloster,

 Chief Financial Officer

Telecopy: 703-902-2814

Telephone: 703-902-2800

The Borrower:   

Primus Telecommunications Holding, Inc.

7901 Jones Branch Drive

Suite 900

McLean, Virginia 22102

Attention:    Thomas Kloster,

 Chief Financial Officer

Telecopy: 703-902-2814

Telephone: 703-902-2800

The Administrative Agent:   

In the case of any borrowing request or any notice relating to any prepayment or
the conversion or continuation of any Loan,

 

Lehman Commercial Paper Inc.

Bank Loan Operations

745 Seventh Avenue

16th Floor

New York, New York 10019

Attention: Michelle Rosolinsky

Telecopy: 212-526-6643

Telephone: 212-526-6590

 

In the case of any other notice or communication,

 

Lehman Commercial Paper Inc.

Loan Portfolio Group

745 Seventh Avenue

7th Floor

New York, New York 10019

Attention: Frank Turner

Telecopy: 646-758-1986

Telephone: 212-526-1463

 

provided that any notice, request or demand to or upon the any Agent or any
Lender shall not be effective until received.

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Notices and other communications to the Lenders hereunder may be delivered or
furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Section 2 unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.

 

9.3. No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of any Agent or any Lender, any right, remedy, power or
privilege hereunder or under the other Loan Documents shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.

 

9.4. Survival of Representations and Warranties. All representations and
warranties made herein, in the other Loan Documents, in any certificate
delivered pursuant hereto or in connection herewith, or in any Non-Disclosure
Acknowledgement Agreement shall survive the execution and delivery of this
Agreement and the making of the Loans hereunder.

 

9.5. Payment of Expenses. The Borrower agrees (a) to pay or reimburse the Agents
for all their reasonable and documented third-party out-of-pocket costs and
expenses incurred in connection with the syndication of the Facility and the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements and other charges of
counsel to the Administrative Agent and the charges of Intralinks, (b) to pay or
reimburse each Lender and the Agents for all their costs and expenses incurred
in connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any other documents prepared in
connection herewith or therewith (other than any such enforcement determined by
a final, non-appealable judgment of a court of competent jurisdiction to have
been in bad faith), including, without limitation, the fees and disbursements of
counsel (including the allocated fees and disbursements and other charges of
in-house counsel) to each Lender and of counsel to the Agents, (c) to pay,
indemnify, or reimburse each Lender and the Agents for, and hold each Lender and
the Agents harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, which may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents (except to
the extent that any such delay resulted from such Lender’s or such Agent’s own
gross negligence or willful misconduct), and (d) to pay, indemnify or reimburse
each Lender, each Agent, their respective affiliates, and their respective
officers, directors, trustees, employees, advisors, agents and controlling
persons (each, an “Indemnitee”) for, and hold each Indemnitee harmless from and
against any and all other liabilities, obligations, losses, damages, penalties,

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actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever incurred by an Indemnitee or asserted against any Indemnitee
by any third party or by the Borrower or any other Loan Party arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto or thereto of their
respective obligations hereunder or thereunder or the consummation of the
transactions contemplated hereby or thereby, (ii) any Loan or the use or
proposed use of the proceeds thereof, (iii) any actual or alleged presence or
release of Materials of Environmental Concern on or from any property owned,
occupied or operated by the Borrower or any of its Subsidiaries, or any losses
pursuant to Environmental Laws related in any way to the Borrower or any of its
Subsidiaries or any or their respective properties, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by any third party or by the Borrower or any other Loan Party, and
regardless of whether any Indemnitee is a party thereto (all the foregoing in
this clause (d), collectively, the “Indemnified Liabilities”), provided, that
the Borrower shall have no obligation hereunder to any Indemnitee with respect
to Indemnified Liabilities to the extent such Indemnified Liabilities are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of such
Indemnitee. No Indemnitee shall be liable for any damages arising from the use
by unauthorized persons of Information or other materials sent through
electronic, telecommunications or other information transmission systems that
are intercepted by such persons or for any special, indirect, consequential or
punitive damages in connection with the Facility. Without limiting the
foregoing, and to the extent permitted by applicable law, the Borrower agrees
not to assert and to cause its Subsidiaries not to assert, and hereby waives and
agrees to cause its Subsidiaries so to waive, all rights for contribution or any
other rights of recovery with respect to all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, under or related to Environmental Laws, that any of them might have by
statute or otherwise against any Indemnitee, except to the extent any of the
foregoing are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of such Indemnitee. All amounts due under this Section shall be
payable not later than 30 days after written demand therefor. Statements payable
by the Borrower pursuant to this Section shall be submitted to Thomas Kloster,
Chief Financial Officer (Telephone No. 703-902-2800) (Fax No.703-902-2814), at
the address of the Borrower set forth in Section 9.2, or to such other Person or
address as may be hereafter designated by the Borrower in a notice to the
Administrative Agent. The agreements in this Section shall survive repayment of
the Loans and all other amounts payable hereunder.

 

9.6. Successors and Assigns; Participations and Assignments. (a) This Agreement
shall be binding upon and inure to the benefit of Parent, the Borrower, the
Lenders, the Agents, all future holders of the Loans and their respective
successors and assigns, except that the Borrower may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Agents and each Lender.

 

(b) Any Lender may, without the consent of the Borrower, in accordance with
applicable law, at any time sell to one or more banks, financial institutions or
other entities (each, a “Participant”) participating interests in any Loan owing
to such Lender, any Commitment of such Lender or any other interest of such
Lender hereunder and under the other Loan

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

Documents. In the event of any such sale by a Lender of a participating interest
to a Participant, such Lender’s obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Agents shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and the other Loan Documents. In no event shall
any Participant under any such participation have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would require the consent of all Lenders pursuant to Section
9.1. The Borrower agrees that if amounts outstanding under this Agreement and
the Loans are due or unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall, to the maximum extent permitted by applicable law, be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement, provided that, in
purchasing such participating interest, such Participant shall be deemed to have
agreed to share with the Lenders the proceeds thereof as provided in Section
9.7(a) as fully as if such Participant were a Lender hereunder. The Borrower
also agrees that each Participant shall be entitled to the benefits of Sections
2.14, 2.15 and 2.16 with respect to its participation in the Commitments and the
Loans outstanding from time to time as if such Participant were a Lender;
provided that, in the case of Section 2.15, such Participant shall have complied
with the requirements of said Section, and provided, further, that no
Participant shall be entitled to receive any greater amount pursuant to any such
Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.

 

(c) Any Lender (an “Assignor”) may, in accordance with applicable law and upon
written notice to the Administrative Agent, at any time and from time to time
assign, with the consent of the Borrower and the Administrative Agent (which, in
each case, shall not be unreasonably withheld or delayed) (provided that the
consent of the Borrower need not be obtained with respect to any assignment of
funded Loans to any bank, or to any investment fund or other financial
institution engaged in the ordinary course of its business in investing in
assets such as the Loans), to any Lender or any affiliate, Related Fund or
Control Investment Affiliate thereof, or any other bank, financial institution
or other entity (each, an “Assignee”), all or any part of its rights and
obligations under this Agreement pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit D, executed by such Assignee and such
Assignor (and, where the consent of the Borrower and the Administrative Agent is
required pursuant to the foregoing provisions, by the Borrower and the
Administrative Agent) and delivered to the Administrative Agent for its
acceptance and recording in the Register; provided that no such assignment to an
Assignee (other than any Lender or any affiliate thereof) shall be in an
aggregate principal amount of less than $1,000,000 (other than in the case of an
assignment of all of a Lender’s interests under this Agreement), unless
otherwise agreed by the Borrower and the Administrative Agent. Upon such
execution, delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with Commitments and/or

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

Loans as set forth therein, and (y) the Assignor thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of an Assignor’s rights and obligations under this Agreement, such Assignor
shall cease to be a party hereto, except as to Section 2.14, 2.15 and 9.5 in
respect of the period prior to such effective date). Notwithstanding any
provision of this Section, the consent of the Borrower shall not be required for
any assignment that occurs at any time when any Event of Default shall have
occurred and be continuing. For purposes of the minimum assignment amounts set
forth in this paragraph, multiple assignments by two or more Related Funds shall
be aggregated.

 

(d) The Administrative Agent shall, on behalf of the Borrower, maintain at its
address referred to in Section 9.2 a copy of each Assignment and Acceptance
delivered to it and a register (the “Register”) for the recordation of the names
and addresses of the Lenders and the Commitment of, and principal amount of the
Loans owing to, each Lender from time to time. The entries in the Register shall
be conclusive, in the absence of manifest error, and the Borrower, each Agent
and the Lenders shall treat each Person whose name is recorded in the Register
as the owner of the Loans and any Notes evidencing such Loans recorded therein
for all purposes of this Agreement. Any assignment of any Loan, whether or not
evidenced by a Note, shall be effective only upon appropriate entries with
respect thereto being made in the Register (and each Note shall expressly so
provide). Any assignment or transfer of all or part of a Loan evidenced by a
Note shall be registered on the Register only upon surrender for registration of
assignment or transfer of the Note evidencing such Loan, accompanied by a duly
executed Assignment and Acceptance; thereupon one or more new Notes in the same
aggregate principal amount shall be issued to the designated Assignee, and the
old Notes shall be returned by the Administrative Agent to the Borrower marked
“canceled”. The Register shall be available for inspection by the Borrower or
any Lender (with respect to any entry relating to such Lender’s Loans) at any
reasonable time and from time to time upon reasonable prior notice.

 

(e) Upon its receipt of an Assignment and Acceptance executed by an Assignor and
an Assignee (and, in any case where the consent of any other Person is required
by Section 9.6(c), by each such other Person) together with payment (by the
Assignor or the Assignee, as agreed between them) to the Administrative Agent of
a registration and processing fee of $3,500 (treating multiple, simultaneous
assignments by or to two or more Related Funds as a single assignment) (except
that no such registration and processing fee shall be payable (y) in connection
with an assignment by or to a Lehman Entity or (z) in the case of an Assignee
which is already a Lender or is an affiliate or Related Fund of a Lender or a
Person under common management with a Lender), the Administrative Agent shall
(i) promptly accept such Assignment and Acceptance and (ii) on the effective
date determined pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the Borrower. On
or prior to such effective date, the Borrower, at its own expense, upon request,
shall execute and deliver to the Administrative Agent (in exchange for the Note
of the assigning Lender) a new Note to the order of such Assignee in an amount
equal to the Loans acquired by it pursuant to such Assignment and Acceptance
and, if the Assignor has retained a Loan, upon request, a new Note to the order
of the Assignor in an amount equal to the Loan retained by it hereunder. Such
new Note shall be dated the Closing Date and shall otherwise be in the form of
the Note replaced thereby.

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

(f) For avoidance of doubt, the parties to this Agreement acknowledge that the
provisions of this Section concerning assignments of Loans and Notes relate only
to absolute assignments and that such provisions do not prohibit assignments
creating security interests in Loans and Notes, including, without limitation,
any bona fide pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.

 

(g) Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle (an “SPC”),
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower, the option to provide to the Borrower all
or any part of any Loan that such Granting Lender would otherwise be obligated
to make to the Borrower pursuant to this Agreement; provided that (i) nothing
herein shall constitute a commitment by any SPC to make any Loan and (ii) if an
SPC elects not to exercise such option or otherwise fails to provide all or any
part of such Loan, the Granting Lender shall be obligated to make such Loan
pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall
utilize the Commitment of the Granting Lender to the same extent, and as if,
such Loan were made by such Granting Lender. Each party hereto hereby agrees
that no SPC shall be liable for any indemnity or similar payment obligation
under this Agreement (all liability for which shall remain with the Granting
Lender). In furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement) that, prior to the
date that is one year and one day after the payment in full of all outstanding
commercial paper or other indebtedness of any SPC, it will not institute
against, or join any other person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under the laws of the United States or any state thereof. In addition,
notwithstanding anything to the contrary in this Section 9.6(g), any SPC may (A)
with notice to, but without the prior written consent of, the Borrower and the
Administrative Agent and without paying any processing fee therefor, assign all
or a portion of its interests in any Loans to the Granting Lender, or with the
prior written consent of the Borrower and the Administrative Agent (which
consent shall not be unreasonably withheld), to any financial institutions
providing liquidity and/or credit support to or for the account of such SPC to
support the funding or maintenance of Loans, and (B) disclose on a confidential
basis any non-public information relating to its Loans to any rating agency,
commercial paper dealer or provider of any surety, guarantee or credit or
liquidity enhancement to such SPC; provided that non-public information with
respect to the Borrower may be disclosed only with the Borrower’s consent which
will not be unreasonably withheld. This paragraph (g) may not be amended without
the written consent of any SPC with Loans outstanding at the time of such
proposed amendment.

 

9.7. Adjustments; Set-off. (a) Except to the extent that this Agreement provides
for payments to be allocated to a particular Lender, if any Lender (a
“Benefitted Lender”) shall at any time receive any payment of all or part of the
Obligations owing to it, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 7(f), or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of such other Lender’s Obligations, such Benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender’s Obligations, or shall provide such other
Lenders with the benefits of any such collateral, as shall be necessary to cause
such Benefitted Lender to share the excess payment or benefits of such
collateral ratably

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with each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.

 

(b) In addition to any rights and remedies of the Lenders provided by law, each
Lender shall have the right, without prior notice to Parent or the Borrower, any
such notice being expressly waived by Parent and the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by Parent
or the Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of Parent or the Borrower, as the
case may be. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such setoff and application made by such Lender,
provided that the failure to give such notice shall not affect the validity of
such setoff and application.

 

9.8. Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement or of a
Lender Addendum by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.

 

9.9. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

9.10. Integration. This Agreement, the other Loan Documents and the
Non-Disclosure Acknowledgement Agreements (with respect to the Lenders parties
to the Non-Disclosure Acknowledgement Agreements and their respective
Transferees) represent the entire agreement of Parent, the Borrower, the Agents,
the Arranger and the Lenders with respect to the subject matter hereof and
thereof, and there are no promises, undertakings, representations or warranties
by the Arranger, any Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein, in the other Loan Documents or in the
Non-Disclosure Acknowledgement Agreements (with respect to the Lenders parties
to the Non-Disclosure Acknowledgement Agreements and their respective
Transferees). Certain of the Lenders have entered into agreements with the
Arranger, copies of which have been provided by the Arranger to the Borrower
(the “Non-Disclosure Acknowledgement Agreements”), pursuant to which, inter
alia, such Lenders have elected, in their sole discretion, to refrain from
receiving non-public information concerning Parent, the Borrower and their
Subsidiaries that was furnished to other Lenders and prospective Lenders in
connection with the syndication of the Facility, including, without limitation,
the entire Confidential Information Memorandum and statements and

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

material relating to the business plan of the Parent, the Borrower and their
Subsidiaries; and the Lenders which are signatories to Non-Disclosure
Acknowledgement Agreements, and their Transferees, are subject to all of the
provisions thereof.

 

9.11. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

9.12. Submission To Jurisdiction; Waivers. Each of Parent and the Borrower
hereby irrevocably and unconditionally:

 

(a) submits for itself and its Property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;

 

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

 

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to Parent or the Borrower,
as the case may be, at its address set forth in Section 9.2 or at such other
address of which the Administrative Agent shall have been notified pursuant
thereto;

 

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and

 

(e) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.

 

9.13. Acknowledgments. Each of Parent and the Borrower hereby acknowledges that:

 

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents;

 

(b) neither the Arranger, any Agent nor any Lender has any fiduciary
relationship with or duty to Parent or the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Arranger, the Agents and the Lenders, on one hand, and
Parent and the Borrower, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor; and

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(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Arranger, the Agents and the Lenders or among Parent, the Borrower and the
Lenders.

 

9.14. Confidentiality. Each of the Agents and the Lenders agrees to keep
confidential and maintains in strict confidence all non-public information
provided to it by any Loan Party pursuant to this Agreement that is designated
by such Loan Party as confidential; provided that nothing herein shall prevent
any Agent or any Lender from disclosing any such information (a) to the
Arranger, any Agent, any other Lender or any affiliate of any thereof, (b) to
any Participant or Assignee (each, a “Transferee”) or prospective Transferee
that agrees to comply with the provisions of this Section or substantially
equivalent provisions, (c) to any of its employees, directors, agents,
attorneys, accountants and other professional advisors (provided that such Agent
or Lender shall be responsible for ensuring compliance with this Section 9.14 by
its employees, directors, agents, attorneys, accountants and other professional
advisors), (d) to any financial institution that is a direct or indirect
contractual counterparty in swap agreements or such contractual counterparty’s
professional advisor (so long as such contractual counterparty or professional
advisor to such contractual counterparty agrees to be bound by the provisions of
this Section), (e) upon the request or demand of any Governmental Authority
having jurisdiction over it, (f) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (g) in connection with any litigation or similar proceeding,
(h) that has been publicly disclosed other than in breach of this Section, (i)
to the National Association of Insurance Commissioners or any similar
organization or any nationally recognized rating agency that requires access to
information about a Lender’s investment portfolio in connection with ratings
issued with respect to such Lender or (j) in connection with the exercise of any
remedy hereunder or under any other Loan Document.

 

9.15. Release of Collateral and Guarantee Obligations

 

(a) Notwithstanding anything to the contrary contained herein or in any other
Loan Document, upon request of the Borrower in connection with any Disposition
of Property permitted by the Loan Documents, the Administrative Agent shall
(without notice to, or vote or consent of, any Lender, or any affiliate of any
Lender that is a party to any Specified Hedge Agreement) take such actions as
shall be required to release its security interest in any Collateral being
Disposed of in such Disposition, and to release any guarantee obligations under
any Loan Document of any Person being Disposed of in such Disposition, to the
extent necessary to permit consummation of such Disposition in accordance with
the Loan Documents. In addition, upon the request of the Borrower in connection
with any Lingo Offering, the Lingo Subsidiary shall be released from its
guaranty obligations and any other obligations under the Loan Documents, and the
Administrative Agent shall (without notice to, or vote or consent of, any
Lender, or any affiliate of any Lender that is a party to any Specified Hedge
Agreement) take such actions as shall be required or reasonably requested by the
Borrower to evidence such releases.

 

(b) Notwithstanding anything to the contrary contained herein or any other Loan
Document, when all Obligations (other than obligations in respect of any
Specified Hedge Agreement) have been paid in full and all Commitments have
terminated or expired, upon request of the Borrower, the Administrative Agent
shall (without notice to, or vote or consent of, any Lender, or any affiliate of
any Lender that is a party to any Specified Hedge Agreement) take

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such actions as shall be required to release its security interest in all
Collateral, and to release all guarantee obligations under any Loan Document,
whether or not on the date of such release there may be outstanding Obligations
in respect of Specified Hedge Agreements. Any such release of guarantee
obligations shall be deemed subject to the provision that such guarantee
obligations shall be reinstated if after such release any portion of any payment
in respect of the Obligations guaranteed thereby shall be rescinded or must
otherwise be restored or returned upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrower or any Guarantor, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Borrower or any Guarantor or any substantial
part of its property, or otherwise, all as though such payment had not been
made.

 

9.16. Accounting Changes. In the event that any “Accounting Change” (as defined
below) shall occur and such change results in a change in the method of
calculation of financial covenants, standards or terms in this Agreement, then
the Borrower and the Administrative Agent agree to enter into negotiations in
order to amend such provisions of this Agreement so as to equitably reflect such
Accounting Change with the desired result that the criteria for evaluating the
Borrower’s financial condition shall be the same after such Accounting Change as
if such Accounting Change had not been made. Until such time as such an
amendment shall have been executed and delivered by the Borrower, the
Administrative Agent and the Required Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Change had not occurred. “Accounting Change”
refers to any change in accounting principles required by the promulgation of
any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.

 

9.17. Delivery of Lender Addenda. Each initial Lender shall become a party to
this Agreement by delivering to the Administrative Agent a Lender Addendum duly
executed by such Lender, the Borrower and the Administrative Agent.

 

9.18. WAIVERS OF JURY TRIAL. PARENT, THE BORROWER, THE AGENTS AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.

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

 

PRIMUS TELECOMMUNICATIONS GROUP,

INCORPORATED

By:

 

 

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

Name:

   

Title:

   

PRIMUS TELECOMMUNICATIONS

HOLDING, INC.

By:

 

 

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

Name:

   

Title:

   

LEHMAN BROTHERS INC.,

as Arranger

By:

 

 

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

Name:

   

Title:

   

LEHMAN COMMERCIAL PAPER INC.,

as Syndication Agent

By:

 

 

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

Name:

   

Title:

   

LEHMAN COMMERCIAL PAPER INC.,

as Administrative Agent

By:

 

 

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

Name:

   

Title: