EXHIBIT 10.19

 

EXECUTION COPY

 

$150,000,000

 

CREDIT AGREEMENT

 

among

 

TIME WARNER TELECOM INC.,

 

TIME WARNER TELECOM HOLDINGS INC.,

 

as Borrower,

 

The Several Lenders

 

from Time to Time Parties Hereto,

 

LEHMAN COMMERCIAL PAPER INC.,

 

as Administrative Agent and Collateral Agent,

 

MORGAN STANLEY SENIOR FUNDING, INC.,

 

as Syndication Agent,

 

and

 

WACHOVIA BANK, NATIONAL ASSOCIATION and

BEAR STEARNS CORPORATE LENDING INC.,

 

as Co-Documentation Agents

 

Dated as of February 20, 2004

 

LEHMAN BROTHERS INC. and

MORGAN STANLEY SENIOR FUNDING, INC.,

 

as Joint Lead Arrangers and Joint Bookrunners

 

WACHOVIA CAPITAL MARKETS, LLC (d/b/a WACHOVIA SECURITIES) and

BEAR, STEARNS & CO. INC.,

 

as Co-Arrangers

 

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TABLE OF CONTENTS

 

          Page

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SECTION 1.

  

DEFINITIONS

   1

1.1.    

  

Defined Terms

   1

1.2.    

  

Other Definitional Provisions

   20

SECTION 2.

  

AMOUNT AND TERMS OF COMMITMENTS

   21

2.1.    

  

Revolving Commitments; Additional Commitments; Incremental Facility

   21

2.2.    

  

Procedure for Borrowing

   22

2.3.    

  

Repayment of Loans

   23

2.4.    

  

Swingline Commitment

   23

2.5.    

  

Procedure for Swingline Borrowing; Refunding of Swingline Loans

   23

2.6.    

  

Commitment Fees, etc.

   25

2.7.    

  

Optional Termination or Reduction of Revolving Commitments

   25

2.8.    

  

Optional Prepayments

   25

2.9.    

  

Conversion and Continuation Options

   25

2.10.  

  

Limitations on Eurodollar Loans

   26

2.11.  

  

Interest Rates and Payment Dates

   26

2.12.  

  

Computation of Interest and Fees

   26

2.13.  

  

Inability to Determine Interest Rate

   27

2.14.  

  

Pro Rata Treatment and Payments

   27

2.15.  

  

Requirements of Law

   28

2.16.  

  

Taxes

   29

2.17.  

  

Indemnity

   31

2.18.  

  

Change of Lending Office

   31

2.19.  

  

Replacement of Lenders

   32

2.20.  

  

Change of Control

   32

SECTION 3.

  

LETTERS OF CREDIT

   32

3.1.    

  

L/C Commitment

   32

3.2.    

  

Procedure for Issuance of Letter of Credit

   33

3.3.    

  

Fees and Other Charges

   33

3.4.    

  

L/C Participations

   33

3.5.    

  

Reimbursement Obligation of the Borrower

   34

3.6.    

  

Obligations Absolute

   34

3.7.    

  

Letter of Credit Payments

   35

3.8.    

  

Applications

   35

SECTION 4.

  

REPRESENTATIONS AND WARRANTIES

   35

4.1.    

  

Financial Condition

   35

4.2.    

  

No Change

   36

 

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4.3.    

  

Existence; Compliance with Law

   36

4.4.    

  

Power; Authorization; Enforceable Obligations

   36

4.5.    

  

No Legal Bar

   36

4.6.    

  

Litigation

   37

4.7.    

  

No Default

   37

4.8.    

  

Ownership of Property; Liens

   37

4.9.    

  

Intellectual Property

   37

4.10.  

  

Taxes

   37

4.11.  

  

Federal Regulations

   37

4.12.  

  

Labor Matters

   38

4.13.  

  

ERISA

   38

4.14.  

  

Investment Company Act; Other Regulations

   38

4.15.  

  

Subsidiaries

   38

4.16.  

  

Use of Proceeds

   38

4.17.  

  

Environmental Matters

   39

4.18.  

  

Accuracy of Information, etc.

   39

4.19.  

  

Security Documents

   40

4.20.  

  

Solvency

   40

4.21.  

  

Certain Documents

   40

4.22.  

  

Priority Lien Debt

   40

SECTION 5.

  

CONDITIONS PRECEDENT

   40

5.1.    

  

Conditions to Effectiveness

   40

5.2.    

  

Conditions to Initial Extension of Credit

   41

5.3.    

  

Conditions to Each Extension of Credit

   43

SECTION 6.

  

AFFIRMATIVE COVENANTS

   44

6.1.    

  

Financial Statements

   44

6.2.    

  

Certificates; Other Information

   45

6.3.    

  

Payment of Obligations

   46

6.4.    

  

Maintenance of Existence; Compliance

   46

6.5.    

  

Maintenance of Property; Insurance

   46

6.6.    

  

Inspection of Property; Books and Records; Discussions

   46

6.7.    

  

Notices

   46

6.8.    

  

Environmental Laws

   47

6.9.    

  

Additional Collateral; Additional Subsidiary Guarantors, etc.

   47

SECTION 7.

  

NEGATIVE COVENANTS

   49

7.1.    

  

Financial Condition Covenants

   50

7.2.    

  

Indebtedness

   50

7.3.    

  

Liens

   53

7.4.    

  

Fundamental Changes

   55

7.5.    

  

Disposition of Property

   55

7.6.    

  

Restricted Payments

   56

7.7.    

  

Capital Expenditures

   57

7.8.    

  

Investments

   57

 

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7.9.    

  

Optional Payments, Refinancings and Modifications of Certain Debt Instruments

   58

7.10.  

  

Transactions with Affiliates

   59

7.11.  

  

Sales and Leasebacks

   59

7.12.  

  

Changes in Fiscal Periods

   59

7.13.  

  

Negative Pledge Clauses

   59

7.14.  

  

Clauses Restricting Subsidiary Distributions

   60

7.15.  

  

Lines of Business; Holding Company Status

   60

7.16.  

  

Modifications to Time Warner Arrangements and Material Rights and Privileges

   60

SECTION 8.

  

EVENTS OF DEFAULT

   60

SECTION 9.

  

THE AGENTS

   63

9.1.    

  

Appointment

   63

9.2.    

  

Delegation of Duties

   63

9.3.    

  

Exculpatory Provisions

   64

9.4.    

  

Reliance by Administrative Agent and Collateral Agent

   64

9.5.    

  

Notice of Default

   64

9.6.    

  

Non-Reliance on Agents and Other Lenders

   65

9.7.    

  

Indemnification

   65

9.8.    

  

Agent in Its Individual Capacity

   65

9.9.    

  

Successor Administrative Agent

   65

9.10.  

  

Successor Collateral Agent

   66

9.11.  

  

Syndication Agent and Co-Documentation Agents

   66

SECTION 10.

  

MISCELLANEOUS

   66

10.1.  

  

Amendments and Waivers

   66

10.2.  

  

Notices

   68

10.3.  

  

No Waiver; Cumulative Remedies

   69

10.4.  

  

Survival of Representations and Warranties

   69

10.5.  

  

Payment of Expenses and Taxes

   69

10.6.  

  

Successors and Assigns; Participations and Assignments

   70

10.7.  

  

Adjustments; Set-off

   72

10.8.  

  

Counterparts

   73

10.9.  

  

Severability

   73

10.10.

  

Integration

   73

10.11.

  

GOVERNING LAW

   73

10.12.

  

Submission To Jurisdiction; Waivers

   74

10.13.

  

Acknowledgments

   74

10.14.

  

Releases of Guarantees and Liens

   74

10.15.

  

Confidentiality

   75

10.16.

  

WAIVERS OF JURY TRIAL

   75

 

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ANNEX:

 

A

  

Pricing Grid

SCHEDULES:

1.1A

  

Revolving Commitments

4.4

  

Consents, Authorizations, Filings and Notices

4.15

  

Subsidiaries

7.2(e)

  

Existing Indebtedness

7.3(f)

  

Existing Liens

7.10

  

Affiliate Transactions

 

EXHIBITS:

 

A

  

Form of Guarantee and Collateral Agreement

B

  

Form of Compliance Certificate

C

  

Form of Closing Certificate

D-1

  

Form of New Lender Supplement

D-2

  

Form of Increased Facility Activation Notice

E

  

Form of Assignment and Acceptance

F

  

Form of Exemption Certificate

G

  

Form of Intercreditor Agreement

H

  

Form of Intercompany Subordinated Note

I

  

Form of Note

 

iv

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CREDIT AGREEMENT, dated as of February 20, 2004, among TIME WARNER TELECOM INC.,
a Delaware corporation (“TWTC”), TIME WARNER TELECOM HOLDINGS 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”), MORGAN
STANLEY SENIOR FUNDING, INC., as syndication agent (in such capacity, the
“Syndication Agent”), WACHOVIA BANK, NATIONAL ASSOCIATION and BEAR STEARNS
CORPORATE LENDING INC., as co-documentation agents (in such capacities, the
“Co-Documentation Agents”), and LEHMAN COMMERCIAL PAPER INC. (“LCPI”), as
administrative agent (in such capacity, the “Administrative Agent”), and as
collateral agent (in such capacity, the “Collateral Agent”).

 

W I T N E S S E T H:

 

WHEREAS, the Borrower has requested the Lenders to make available the credit
facilities described herein; and

 

WHEREAS, the Lenders are willing to make such credit facilities available to the
Borrower 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 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.

 

“ABR”: 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 ½ 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 ABR 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

 

“ABR Loans”: Loans the rate of interest applicable to which is based upon the
ABR.

 

“Accelerated Revolving Termination Date”: April 14, 2008.

 

“Adjustment Date”: as defined in the Pricing Grid.

 

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

 

“Affiliate”: as to any Person, any other Person that, directly or indirectly, is
in control of, is controlled by, or is under common control with, such Person.
For purposes of this definition, “control” of a Person means the power, directly
or indirectly, either to (a) vote 10% or more of the securities having ordinary
voting power for the election of directors (or persons performing similar
functions) of such

 

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Person or (b) direct or cause the direction of the management and policies of
such Person, whether by contract or otherwise.

 

“Agents”: the collective reference to the Syndication Agent, the
Co-Documentation Agents, the Collateral Agent and the Administrative Agent.

 

“Aggregate Exposure”: with respect to any Lender at any time, the amount of such
Lender’s Revolving Commitment then in effect or, if the Revolving Commitments
have been terminated, the amount of such Lender’s Revolving Extensions of Credit
then outstanding.

 

“Aggregate Exposure Percentage”: with respect to any Lender at any time, the
ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at such
time to the Aggregate Exposure of all Lenders at such time.

 

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

 

“Annualized Consolidated EBITDA”: for any fiscal quarter, an amount equal to
Consolidated EBITDA for such period multiplied by four.

 

“Applicable Margin”: means, for any day, the applicable rate per annum set forth
in the Pricing Grid; provided that prior to the first Adjustment Date occurring
after the date that is six months following the Effective Date, such applicable
rate shall be (a) in the case of ABR Loans, 1.75%, and (b) in the case of
Eurodollar Loans, 3.00%.

 

“Application”: an application, in such form as the Issuing Lender may specify
from time to time, requesting the Issuing Lender to open a Letter of Credit.

 

“Approved Fund”: with respect to any Lender that is a fund or similar investment
vehicle, any other fund or similar investment vehicle that is managed or advised
by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.

 

“Assignee”: as defined in Section 10.6(c).

 

“Assignment and Acceptance”: an Assignment and Acceptance, substantially in the
form of Exhibit E.

 

“Assignor”: as defined in Section 10.6(c).

 

“Available Revolving Commitment”: as to any Revolving Lender at any time, an
amount equal to the excess, if any, of (a) such Lender’s Revolving Commitment
then in effect over (b) such Lender’s Revolving Extensions of Credit then
outstanding; provided, that solely for the purpose of determining such Lender’s
Available Revolving Commitment pursuant to Section 2.6(a), (x) for each Lender
other than the Swingline Lender, the aggregate principal amount of Swingline
Loans then outstanding shall be deemed to be zero and (y) for the Swingline
Lender, the aggregate principal amount of Swingline Loans then outstanding shall
be considered for the purpose of determining the Swingline Lender’s Available
Revolving Commitment.

 

“Benefitted Lender”: as defined in Section 10.7(a).

 

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

 

“Borrower”: as defined in the preamble hereto.

 

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

 

“Business”: as defined in Section 4.17(b).

 

“Business Day”: 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,
provided, that with respect to notices and determinations in connection with,
and payments of principal and interest on, Eurodollar Loans, such day is also a
day for trading by and between banks in Dollar deposits in the interbank
eurodollar market.

 

“Capital Expenditures”: for any period, with respect to any Person, the
aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.

 

“Capital Lease Obligations”: as to any Person, the obligations of such Person to
pay rent or other amounts under any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP and, for the purposes of this
Agreement, the amount of such obligations at any time shall be the capitalized
amount thereof at such time determined in accordance with GAAP.

 

“Capital Stock”: any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.

 

“Cash Equivalents”: (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof or backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits, overnight bank
deposits or bankers acceptances having maturities of one year or less from the
date of acquisition issued by any Lender or by any commercial bank organized
under the laws of the United States or any state thereof having combined capital
and surplus of not less than $500,000,000; (c) commercial paper of an issuer
rated at least A-1 by S&P or P-1 by Moody’s, or carrying an equivalent rating by
a nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within nine months from the date of acquisition; (d) repurchase obligations of
any Lender or of any commercial bank satisfying the requirements of clause (b)
of this definition, having a term of not more than 30 days, with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody’s; (f) securities with maturities of six months

 

3

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or less from the date of acquisition backed by standby letters of credit issued
by any Lender or any commercial bank satisfying the requirements of clause (b)
of this definition; (g) corporate debt securities with maturities of 18 months
or less from the date of acquisition and which are rated at least A3 by Moody’s
or A1 by S&P; or (h) shares of money market mutual or similar funds which invest
substantially exclusively in assets satisfying the requirements of clauses (a)
through (g) of this definition.

 

“Cash Management Obligations”: all obligations and liabilities of TWTC and its
Subsidiaries (whether directly or as a guarantor) arising under or in connection
with treasury, depositary, cash management, custodial, automated clearinghouse
or transfer of funds services or arrangements or similar services and
arrangements.

 

“Cash Pay Preferred Stock”: any class or series of Capital Stock of any Person
that by its terms or otherwise (i) is required to be redeemed prior to the date
(the “Expiration Date”) which is one year after the Initial Revolving
Termination Date (or, if extended, the final maturity date of the Loans and the
expiration of the Revolving Commitments hereunder), (ii) is redeemable at the
option of the holder of such class or series of Capital Stock at any time prior
to the Expiration Date, (iii) is convertible into or exchangeable for (unless
solely at the option of such Person) Capital Stock referred to in clause (i) or
(ii) above or Indebtedness having a scheduled maturity prior to the Expiration
Date or that would require cash payment of interest prior to the Expiration Date
or (iv) provides for payment of dividends (other than dividends payable solely
in common stock or in Non-Cash Pay Preferred Stock of TWTC) prior to the
Expiration Date; provided, that no Capital Stock shall constitute Cash Pay
Preferred Stock as a result of containing provisions that give holders the right
to require such Person to repurchase or redeem such Capital Stock upon the
occurrence of (x) a “change of control” (or similar event, however defined) or
(y) the sale of all or substantially all of such Person’s assets (or similar
event, however defined).

 

“Change of Control”: (i) (A) the Former Parent Companies as a group cease to
have the ability to elect a majority of the members of the Board of Directors of
TWTC (other than TWTC’s chief executive officer and independent directors;
provided, however, that independent directors shall be included in calculating
whether the foregoing majority requirement is satisfied if the directors
nominated by the Former Parent Companies do not constitute a majority of the
committee that selects the Board of Directors’ nominees for independent
directors) and (B) a “Person” or “group” (within the meaning of Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (other than the Former Parent Companies) has become the ultimate
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of more
than 50% of the total voting power of TWTC’s voting stock, on a fully diluted
basis; (ii) individuals who on the Effective Date constitute the Board of
Directors of TWTC (together with any new directors whose election by such Board
of Directors or whose nomination by such Board of Directors for election by the
stockholders or members, as the case may be, of TWTC was approved by a vote of
at least two-thirds of the members of such Board of Directors then in office who
either were members of such Board of Directors on the Effective Date 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; or (iii) TWTC ceases to own and control, of record and beneficially,
directly, 100% of each class of outstanding Capital Stock of the Borrower free
and clear of all Liens (except Liens (x) created by the Guarantee and Collateral
Agreement and (y) securing the Second Lien Notes).

 

“Change of Control Triggering Event”: the occurrence of both a Change of Control
and a Rating Decline.

 

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

 

4

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“Co-Documentation Agents”: as defined in the preamble hereto.

 

“Collateral”: all property of the Loan Parties, now owned or hereafter acquired,
upon which a Lien is created by any Security Document; it being understood and
agreed that such property shall cease to be Collateral for all purposes of this
Agreement and each other Loan Document when such property is released from such
Lien in accordance with the provisions of this Agreement or of such Security
Document, including, without limitation, Section 10.14 hereof.

 

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

 

“Collateral Base Date”: as defined in Section 5.2.

 

“Commitment Fee Rate”: ½ of 1% per annum.

 

“Commonly Controlled Entity”: an entity, whether or not incorporated, that
together with the Borrower is treated as a single employer under Section 414(b)
or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section
412 of the Code, 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.

 

“Conduit Lender”: any special purpose corporation organized and administered by
any Lender for the purpose of making or participating in Loans and other
extensions of credit hereunder which are otherwise required to be made by such
Lender and designated by such Lender in a written instrument, subject to the
consent of the Administrative Agent and the Borrower (which consent, in each
case, shall not be unreasonably withheld); provided, that the designation by any
Lender of a Conduit Lender shall not relieve the designating Lender of any of
its obligations to fund or participate in a Loan or other extension of credit
under this Agreement if, for any reason, its Conduit Lender fails to fund any
such Loan (or any such participation, as the case may be), and the designating
Lender (and not the Conduit Lender) shall have the sole right and responsibility
to deliver all consents and waivers required or requested under or in connection
with this Agreement or any other Loan Document with respect to its Conduit
Lender; and provided, further, that (1) no Conduit Lender shall (a) be entitled
to receive any greater amount pursuant to Section 2.15, 2.16, 2.17 or 10.5 than
the designating Lender would have been entitled to receive in respect of the
extensions of credit made by such Conduit Lender or (b) be deemed to have any
Revolving Commitment hereunder and (2) each Conduit Lender shall be subject to
all of the obligations as its designating Lender hereunder and each of the other
Loan Documents, including, without limitation, Sections 2.16, 2.18, 2.19, 10.7
and 10.15 hereof.

 

“Confidential Information Memorandum”: the Confidential Information Memorandum
dated January 2004 and furnished to the Lenders, including all attachments,
exhibits and supplements thereto furnished on or prior to the Effective Date.

 

“Consolidated EBITDA”: for any period, Consolidated Net Income for such period
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, amortization or writeoff of debt discount and
debt issuance costs and commissions, discounts and other fees and charges
associated with Indebtedness (including the Loans), (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 non-cash expenses or losses (including, whether or not otherwise

 

5

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includable as a separate item in the statement of such Consolidated Net Income
for such period, non-cash losses on sales of assets outside of the ordinary
course of business), provided, that the amounts referred to in this clause (e)
shall not, in the aggregate, exceed $20,000,000 for any fiscal year of TWTC,
plus, in the case of such non-cash losses on sales of assets or any non-cash
losses on minority investments or investments in unconsolidated Subsidiaries,
$30,000,000 for the period from the Effective Date through the Revolving
Termination Date, (f) any non-cash asset impairment charges resulting from the
application of the statement on Accounting for the Impairment or Disposal of
Long-Lived Assets (SFAS 144) or similar accounting rules or policies, provided,
that the amounts referred to in this clause (f) shall not, in the aggregate,
exceed (i) $100,000,000 at any time up to and including December 31, 2004 and
(ii) $50,000,000 for any fiscal year of TWTC thereafter; provided further, that
(x) up to $50,000,000 of the fiscal year limit in clause (f)(ii), if not
utilized in the fiscal year for which it is permitted, may be carried over for
use in the next succeeding fiscal year and (y) for purposes of applying the
limit in clause (f)(ii), any amounts referred to in this clause (f) shall be
deemed added to “Consolidated EBITDA”, first, in respect of amounts permitted
for such fiscal year as provided above and, second, in respect of amounts
carried over from the prior fiscal year pursuant to clause (x) of this proviso,
and (g) any non-cash compensation expenses solely related to stock-based
compensation, provided, that, to the extent any non-cash expense under this
clause (g) subsequently requires any cash disbursement, such non-cash expense
will be subtracted from Consolidated EBITDA; and minus, to the extent included
in the statement of such Consolidated Net Income for such period, the sum of (a)
interest income and (b) any extraordinary, unusual or non-recurring income or
gains (other than any reciprocal compensation income or gains to the extent
included in operating income), including, whether or not otherwise includable as
a separate item in the statement of such Consolidated Net Income for such
period, gains on the sales of assets outside of the ordinary course of business.

 

“Consolidated Interest Coverage Ratio”: for any period, the ratio of (a)
Consolidated EBITDA for such period to (b) Consolidated Interest Expense for
such period.

 

“Consolidated Interest Expense”: for any period, total cash interest expense
(including that attributable to Capital Lease Obligations) of TWTC and its
Subsidiaries for such period with respect to all outstanding Indebtedness (and
cash dividends on Cash Pay Preferred Stock) of TWTC and its Subsidiaries
(including all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers’ acceptance financing and net costs
under Hedge Agreements, less any net receipts in respect of Hedge Agreements, to
the extent such net costs are allocable to such period in accordance with GAAP
and less interest income and capitalized interest).

 

“Consolidated Net Income”: for any period, the consolidated net income (or loss)
of TWTC and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP; provided that there shall be excluded (a) the income (or deficit) of
any Person accrued prior to the date it becomes a Subsidiary of TWTC or is
merged into or consolidated with TWTC or any of its Subsidiaries, (b) the income
(or deficit) of any Person (other than a Subsidiary of TWTC) in which TWTC or
any of its Subsidiaries has an ownership interest, except to the extent that any
such income is actually received by TWTC or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of TWTC to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time permitted by the
terms of any Contractual Obligation (other than under any Loan Document) or
Requirement of Law applicable to such Subsidiary.

 

“Consolidated Net Senior Secured Debt”: as of any day, the excess of (i)
Consolidated Senior Secured Debt at such date over (ii) the aggregate amount of
cash and Cash Equivalents reflected on a consolidated balance sheet of TWTC at
such date in excess of $50,000,000.

 

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“Consolidated Net Total Debt”: as of any day, the excess of (i) Consolidated
Total Debt at such date over (ii) the aggregate amount of cash and Cash
Equivalents reflected on a consolidated balance sheet of TWTC at such date in
excess of $50,000,000.

 

“Consolidated Senior First Lien Secured Leverage Ratio”: as of any day, the
ratio of (a) Consolidated Net Senior Secured Debt on such day to (b) Annualized
Consolidated EBITDA for the most recent complete fiscal quarter of TWTC.

 

“Consolidated Senior Secured Debt”: at any date, the aggregate principal amount
of all Senior Secured Indebtedness (other than, in the case of contingent
obligations of the type described in clause (f) of the definition of
“Indebtedness”, any such obligations not constituting L/C Obligations (i.e., L/C
Obligations shall be included in the calculation of Consolidated Senior Secured
Debt)) of TWTC and its Subsidiaries at such date taken as a whole, determined on
a consolidated basis in accordance with GAAP.

 

“Consolidated Total Debt”: at any date, the aggregate principal amount of all
Indebtedness (other than, in the case of contingent obligations of the type
described in clause (f) of the definition of “Indebtedness”, any such
obligations not constituting L/C Obligations) of TWTC and its Subsidiaries at
such date, determined on a consolidated basis in accordance with GAAP.

 

“Consolidated Total Leverage Ratio”: as of any day, the ratio of (a)
Consolidated Net Total Debt on such day to (b) Annualized Consolidated EBITDA
for the most recent complete fiscal quarter of TWTC.

 

“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.

 

“Current Liquidity”: on any date, the sum of (i) the aggregate amount of cash
and Cash Equivalents that would be reflected on a consolidated balance sheet of
TWTC and its Subsidiaries prepared as of such date in accordance with GAAP and
(ii) the aggregate amount of Available Revolving Commitments of all Lenders on
such date (provided that such amount shall be deemed to be zero if a Default has
occurred and is continuing on such date).

 

“Default”: any of the events specified in Section 8, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

 

“Disposition”: with respect to any property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof,
including pursuant to an exchange for other property. The terms “Dispose” and
“Disposed of” shall have correlative meanings.

 

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

 

“Domestic Subsidiary”: any Subsidiary of TWTC organized under the laws of any
jurisdiction within the United States.

 

“Effective Date”: the date specified by the Administrative Agent in a notice to
each of the parties hereto as the date on or as of which each of the conditions
precedent set forth in Section 5.1 shall have been satisfied, which date shall
not be later than February 20, 2004 (or such later date as the Borrower, the
Administrative Agent and the Required Lenders shall agree).

 

7

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“Environmental Laws”: any and all applicable foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health (as relating to
exposure to Materials of Environmental Concern) or the environment.

 

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

 

“Eurocurrency Reserve Requirements”: for any day as applied to a Eurodollar
Loan, the aggregate (without duplication) of the maximum rates (expressed as a
decimal fraction) of reserve requirements in effect on such day (including
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
pertaining to a Eurodollar Loan, 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” shall be determined by reference to such other comparable
publicly available service for displaying eurodollar rates as may be selected by
the Administrative Agent or, in the absence of such availability, by reference
to the rate at which the Administrative Agent is offered Dollar deposits at or
about 11:00 A.M., New York City time, two Business Days prior to the beginning
of such Interest Period in the interbank eurodollar market where its eurodollar
and foreign currency and exchange operations are then being conducted for
delivery on the first day of such Interest Period for the number of days
comprised therein.

 

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

 

“Eurodollar Rate”: with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, 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                 

1.00 - Eurocurrency Reserve Requirements

 

“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 8, provided that any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

 

“Exchange”: any exchange of operating assets for other operating assets in a
Permitted Line of Business and, subject to the last sentence of this definition,
of comparable value and use to those assets being exchanged, including (a)
exchanges involving the transfer or acquisition (or both transfer and

 

8

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acquisition) of Capital Stock of a Person so long as 100% of the Capital Stock
of such Person is transferred or acquired, as the case may be, and (b) fiber
capacity and network swaps. It is understood that exchanges of the kind
described above as to which a portion of the consideration paid or received is
in the form of cash shall nevertheless constitute “Exchanges” for the purposes
of this Agreement so long as the aggregate consideration received by any
Subsidiary of TWTC in connection with such exchange represents fair market value
for the assets and cash being transferred by TWTC and its Subsidiaries.

 

“Existing Credit Agreement”: the Amended and Restated Credit Agreement, dated as
of January 10, 2001, as amended, among TWTC, the Borrower, the lenders parties
thereto, the co-syndication agents and documentation agent named therein, and
JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as
administrative agent.

 

“Existing Senior Note Indentures”: the Indentures entered into by TWTC in
connection with the issuance of the Existing Senior Notes, together with all
instruments and other agreements entered into by TWTC in connection therewith,
as the same may be amended, supplemented or otherwise modified from time to time
in accordance with Section 7.9.

 

“Existing Senior Notes”: the collective reference to (a) the Existing 2008
Senior Notes and (b) the Existing 2011 Senior Notes.

 

“Existing 2008 Senior Notes”: the 9 3/4% Senior Notes due 2008 of TWTC.

 

“Existing 2011 Senior Notes”: the 10 1/8% Senior Notes due 2011 of TWTC.

 

“Expiration Date”: as defined in the definition of the term “Cash Pay Preferred
Stock”.

 

“FCC”: the Federal Communications Commission and any successor thereto.

 

“FCC License”: any community antenna relay service, broadcast auxiliary license,
earth station registration, business radio, microwave or special safety radio
service license issued by the FCC pursuant to the Communications Act of 1934, as
amended.

 

“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 TWTC (whether now or hereafter existing
or acquired) that is not a Domestic Subsidiary.

 

“Former Parent Companies”: Time Warner Inc., Advance/Newhouse Partnership and
the Affiliates of each of the foregoing.

 

“Funded Debt”: as to any Person, all Indebtedness of such Person that matures
more than one year from the date of its creation or matures within one year from
such date but is renewable or extendible, at the option of such Person, to a
date more than one year from such date or arises under a revolving credit or
similar agreement that obligates the lender or lenders thereunder to extend
credit during a period of more than one year from such date, including all
current maturities and current sinking

 

9

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fund payments in respect of such Indebtedness whether or not required to be paid
within one year from the date of its creation and, in the case of the Borrower,
Indebtedness in respect of the Loans.

 

“Funding Office”: the office of the Administrative Agent specified in Section
10.2 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower and
the Lenders.

 

“GAAP”: generally accepted accounting principles in the United States as in
effect from time to time, except that for purposes of Section 7.1, GAAP shall be
determined on the basis of such principles in effect on the date hereof and
consistent with those used in the preparation of the most recent audited
financial statements referred to in Section 4.1(b). 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 TWTC 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 Changes with the desired result that the
criteria for evaluating TWTC’s financial condition shall be the same after such
Accounting Changes as if such Accounting Changes had not been made. Until such
time as such an amendment shall have been executed and delivered by TWTC, 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 Changes had not occurred. “Accounting
Changes” refers to changes 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.

 

“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).

 

“Gross Consolidated Senior First Lien Secured Leverage Ratio”: as of any day,
the ratio of (a) Consolidated Senior Secured Debt on such day to (b) Annualized
Consolidated EBITDA for the most recent complete fiscal quarter of TWTC.

 

“Guarantee and Collateral Agreement”: the Guarantee and Collateral Agreement to
be executed and delivered by TWTC, the Borrower and each Subsidiary Guarantor,
substantially in the form of Exhibit A, as the same may be amended, supplemented
or otherwise modified from time to time.

 

“Guarantee Obligation”: as to any Person (the “guaranteeing person”), any
obligation of (a) the guaranteeing person or (b) another Person (including any
bank under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the “primary obligations”)
of any other third Person (the “primary obligor”) in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term

 

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Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person’s maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.

 

“Hedge Agreements”: all interest rate or currency swaps, caps or collar
agreements, foreign exchange agreements, commodity contracts or similar
arrangements entered into by TWTC 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.

 

“High Yield Indentures”: the collective reference to the New Senior Note
Indenture and the Second Lien Note Indenture.

 

“High Yield Notes”: the collective reference to the New Senior Notes and the
Second Lien Notes.

 

“Immaterial Subsidiary”: any Subsidiary designated as an “Immaterial Subsidiary”
by the Borrower in a written notice to the Administrative Agent which, when
considered together with all other Immaterial Subsidiaries previously so
designated by the Borrower which have not lost their designation as an
“Immaterial Subsidiary” under the terms of the proviso below, have assets whose
book value is not greater than 5% of the book value of the consolidated assets
of TWTC and its Subsidiaries as shown on the most recent financial statements
furnished by the Borrower under Section 6 of this Agreement; provided, however,
that, any Subsidiary designated as an Immaterial Subsidiary under the method
described above shall continue to be an Immaterial Subsidiary unless and until
(a) the Borrower provides written notice to the Administrative Agent that such
Immaterial Subsidiary shall no longer constitute an Immaterial Subsidiary or (b)
the financial statements of the Borrower furnished under Section 6 of this
Agreement at any time after the designation of such Subsidiary as an Immaterial
Subsidiary shall demonstrate that, in the aggregate, Subsidiaries designated by
the Borrower as Immaterial Subsidiaries have assets whose book value is greater
than 5% of the book value of the consolidated assets of TWTC and its
Subsidiaries as reflected on such newly delivered financial statements and, in
such circumstance, the Borrower shall promptly select one or more Immaterial
Subsidiaries to be designated as not being Immaterial Subsidiaries such that the
5% threshold described above would no longer be violated and any Subsidiary so
selected by the Borrower shall cease to be an Immaterial Subsidiary for all
purposes of this Agreement and the other Loan Documents and shall promptly
become a party to the Guarantee and Collateral Agreement and the Intercreditor
Agreement in accordance with, and shall take such other actions as required by,
Section 6.9, unless and until such Subsidiary is re-designated as an Immaterial
Subsidiary as provided above.

 

“Increased Facility Activation Notice”: a notice substantially in the form of
Exhibit D-2.

 

“Increased Facility Closing Date”: any Business Day designated as such in an
Increased Facility Activation Notice.

 

“Incremental Facility”: as defined in Section 2.1(c).

 

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“Incremental Loans”: as defined in Section 2.1(c).

 

“Indebtedness”: of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade payables incurred in the ordinary course of such Person’s
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under or in respect of acceptances, letters of
credit, surety bonds or similar arrangements, (g) all obligations of such Person
with respect to Cash Pay Preferred Stock, (h) all Guarantee Obligations of such
Person in respect of obligations of the kind referred to in clauses (a) through
(g) above, (i) all obligations of the kind referred to in clauses (a) through
(h) above secured by (or for which the holder of such obligation has an existing
right, contingent or otherwise, to be secured by) any Lien on property
(including accounts and contract rights) owned by such Person, whether or not
such Person has assumed or become liable for the payment of such obligation, and
(j) for the purposes of Sections 7.2 and 8(e) only, all obligations of such
Person in respect of derivative transactions (including, without limitation,
Hedge Agreements). For purposes of this definition, the principal amount of any
Cash Pay Preferred Stock shall be deemed to be its liquidation value. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness expressly provide that such Person is not liable
therefor.

 

“Indentures”: the collective reference to the Existing Senior Note Indentures,
the New Senior Note Indenture and the Second Lien Note Indenture.

 

“Initial Funding Date”: the first date on which both (a) the conditions
precedent set forth in Section 5.2 shall have been satisfied and (b) the
Borrower shall have received the proceeds of a Loan requested hereunder.

 

“Initial Revolving Termination Date”: February 20, 2009.

 

“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 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.

 

“Intercompany Subordinated Note”: a promissory note of the Borrower or a Wholly
Owned Subsidiary Guarantor, substantially in the form of Exhibit H.

 

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“Intercreditor Agreement”: the Intercreditor Agreement to be executed and
delivered by the Collateral Agent, the Second Lien Trustee, TWTC, the Borrower
and the Subsidiary Guarantors, substantially in the form of Exhibit G, as the
same may be amended, supplemented or otherwise modified from time to time.

 

“Interest Payment Date”: (a) as to any ABR Loan, the last day of each March,
June, September and December while such Loan is outstanding and the Revolving
Termination Date, (b) as to any Eurodollar Loan having an Interest Period of
three months or less, 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
(other than any Revolving Loan that is an ABR Loan and any Swingline 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, continuation or conversion date, as the case may
be, with respect to such Eurodollar Loan and ending one, two, three or six (or,
with the consent of all Lenders, nine or twelve) months thereafter, as selected
by the Borrower in its notice of borrowing, notice of continuation 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 (or, with
the consent of all Lenders, nine or twelve) months thereafter, as selected by
the Borrower by irrevocable notice to the Administrative Agent not less than
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:

 

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

 

(ii) the Borrower may not select an Interest Period that would extend beyond the
Revolving Termination Date;

 

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

 

(iv) the Borrower shall select Interest Periods so as not to require a payment
or prepayment of any Eurodollar Loan during an Interest Period for such Loan.

 

“Investments”: as defined in Section 7.8.

 

“Issuing Lender”: any Revolving Lender that has agreed in its sole discretion to
act as an “Issuing Lender” hereunder and that has been approved in writing by
the Administrative Agent as an “Issuing Lender” hereunder, in each case in its
capacity as issuer of any Letter of Credit.

 

“Joint Lead Arrangers”: the collective reference to Lehman Brothers Inc. and
Morgan Stanley Senior Funding, Inc.

 

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“L/C Commitment”: $25,000,000.

 

“L/C Fee Payment Date”: the last day of each March, June, September and December
and the last day of the Revolving Commitment Period.

 

“L/C Obligations”: at any time, an amount equal to the sum of (a) the aggregate
then undrawn and unexpired amount of the then outstanding Letters of Credit and
(b) the aggregate amount of drawings under Letters of Credit that have not then
been reimbursed pursuant to Section 3.5.

 

“L/C Participants”: the collective reference to all the Revolving Lenders other
than the Issuing Lender.

 

“LCPI”: as defined in the preamble hereto.

 

“Lenders”: as defined in the preamble hereto; provided, that unless the context
otherwise requires, each reference herein to the Lenders shall be deemed to
include any Conduit Lender.

 

“Letters of Credit”: as defined in Section 3.1(a).

 

“Lien”: any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge or other security interest or any
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement and any capital lease having substantially the same economic
effect as any of the foregoing).

 

“Loan”: any loan made by any Lender pursuant to this Agreement.

 

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

 

“Loan Parties”: TWTC, the Borrower and each Subsidiary Guarantor; it being
expressly understood and agreed that from and after the date that a Subsidiary
Guarantor has been released, whether pursuant to Section 10.14 or otherwise,
such Person shall not thereafter be considered a Loan Party for purposes of this
Agreement or any other Loan Document.

 

“Material Adverse Effect”: a material adverse effect on (a) the business,
property, operations or financial condition of TWTC 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 Administrative Agent, the
Collateral Agent or any Lender hereunder or thereunder.

 

“Materials of Environmental Concern”: any gasoline or petroleum (including crude
oil or any fraction thereof) or petroleum products or any hazardous or toxic
substances, materials or wastes, defined or regulated as such in or under any
Environmental Law, including asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.

 

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

 

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

 

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“Net Cash Proceeds”: in connection with any issuance or sale of equity
securities or debt securities or instruments or the incurrence of loans, the
cash proceeds received from such issuance or incurrence, net of attorneys’ fees,
investment banking fees, accountants’ fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith.

 

“New Lender”: as defined in Section 2.1(d).

 

“New Lender Supplement”: as defined in Section 2.1(d).

 

“New Senior Note Indenture”: the Indenture entered into by the Borrower, TWTC
and certain of its Subsidiaries in connection with the issuance of the New
Senior Notes, together with all instruments and other agreements entered into by
the Borrower, TWTC or such Subsidiaries in connection therewith, as the same may
be amended, supplemented or otherwise modified from time to time in accordance
with Section 7.9.

 

“New Senior Notes”: the 9 1/4% Senior Notes due 2014 of the Borrower issued on
or about the Effective Date.

 

“Non-Cash Pay Preferred Stock”: any preferred stock of a Person that does not
qualify as Cash Pay Preferred Stock.

 

“Non-Excluded Taxes”: as defined in Section 2.16(a).

 

“Non-U.S. Lender”: as defined in Section 2.16(d).

 

“Notes”: the collective reference to any promissory note, substantially in the
form of Exhibit I, evidencing one or more Loans, as any such note may be
amended, extended or otherwise modified from time to time.

 

“Obligations”: the collective reference to (a) the unpaid principal of and
interest on (including interest accruing after the maturity of the Loans and
Reimbursement Obligations 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
Reimbursement Obligations and all other obligations and liabilities of the
Borrower to the Administrative Agent, the Collateral Agent or to any Lender (or,
in the case of Hedge Agreements, any Affiliate of any Lender), 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, the Letters of Credit, any Hedge Agreement
entered into with any Lender or any Affiliate of any Lender or any other
document made, delivered or given in connection herewith or therewith, and (b)
all Cash Management Obligations owed to any Lender or any Affiliate of any
Lender, in each case, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including all fees, charges and
disbursements of counsel to the Administrative Agent and the Collateral Agent or
to any Lender that are required to be paid by the Borrower pursuant hereto) or
otherwise.

 

“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.

 

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“Participant”: as defined in Section 10.6(b).

 

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

 

“Permitted Line of Business”: as defined in Section 7.15(a).

 

“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.

 

“Pricing Grid”: the pricing grid attached hereto as Annex A.

 

“Prime Rate”: as defined in the definition of “ABR”.

 

“Pro Forma Balance Sheet”: as defined in Section 4.1(a).

 

“Projections”: as defined in Section 6.2(c).

 

“Properties”: as defined in Section 4.17(a).

 

“Rating Categories”: (a) with respect to S&P, any of the following categories:
BB, B, CCC, CC, C and D (or equivalent successor categories); (b) with respect
to Moody’s, any of the following categories: Ba, B, Caa, Ca, C and D (or
equivalent successor categories); and (c) the equivalent of any such category of
S&P or Moody’s used by another rating agency. In determining whether the rating
of the High Yield Notes has decreased by one or more gradations, gradations
within Rating Categories (+ and – for S&P; 1, 2 and 3 for Moody’s; or the
equivalent gradations for another rating agency) shall be taken into account
(e.g., with respect to S&P, a decline in a rating from BB+ to BB, as well as
from BB- to B+, will constitute a decrease of one gradation).

 

“Rating Decline”: (i) a decrease of one or more gradations (including gradations
within Rating Categories as well as between Rating Categories) in the rating of
the New Senior Notes or the Second Lien Notes by both Moody’s and S&P or (ii) a
withdrawal of the rating of the New Senior Notes or the Second Lien Notes by
Moody’s and S&P, in each case directly as a result of a Change of Control;
provided, however, that such decrease or withdrawal occurs on, or within 45 days
following, the date of public notice of the occurrence of a Change of Control or
of the intention by the Borrower, TWTC or a stockholder of the Borrower or TWTC,
as applicable, to effect a Change of Control, which period shall be extended so
long as the rating of the New Senior Notes or the Second Lien Notes relating to
the Change of Control as noted by the rating agency is under publicly announced
consideration for downgrade by the applicable rating agency.

 

“Refinancing”: with respect to any Indebtedness, any refinancing, refunding,
renewal or extension thereof. The term “Refinance” shall have the correlative
meaning.

 

“Refunded Swingline Loans”: as defined in Section 2.5(b).

 

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“Refunding Date”: as defined in Section 2.5(c).

 

“Register”: as defined in Section 10.6(d).

 

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

 

“Reimbursement Obligation”: the obligation of the Borrower to reimburse the
Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of
Credit.

 

“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.

 

“Required Lenders”: at any time, the holders of more than 50% of the Total
Revolving Commitments then in effect or, if the Revolving Commitments have been
terminated, the Total Revolving Extensions of Credit 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, treasurer, chief
financial officer or chief accounting officer of TWTC or the Borrower, as
applicable, but in any event, with respect to financial matters, the chief
financial officer of TWTC or the Borrower, as applicable.

 

“Restricted Payments”: as defined in Section 7.6.

 

“Revolving Commitment”: as to any Lender, the obligation of such Lender, if any,
to make Revolving Loans and to make or to participate in Swingline Loans and
Letters of Credit in an aggregate principal and/or face amount not to exceed the
amount set forth under the heading “Revolving Commitment” opposite such Lender’s
name on Schedule 1.1A or 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 amount of the Total Revolving
Commitments is $150,000,000.

 

“Revolving Commitment Period”: the period from and including the Effective Date
to the Revolving Termination Date.

 

“Revolving Extensions of Credit”: as to any Revolving Lender at any time, an
amount equal to the sum of (a) the aggregate principal amount of all Revolving
Loans held by such Lender then outstanding, (b) such Lender’s Revolving
Percentage of the L/C Obligations then outstanding and (c) such Lender’s
Revolving Percentage of the aggregate principal amount of Swingline Loans then
outstanding.

 

“Revolving Lender”: each Lender that has a Revolving Commitment or that holds
Revolving Loans.

 

“Revolving Loans”: as defined in Section 2.1(a).

 

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“Revolving Percentage”: as to any Revolving Lender at any time, the percentage
which such Lender’s Revolving Commitment then constitutes of the Total Revolving
Commitments (or, at any time after the Revolving Commitments shall have expired
or terminated, the percentage which the aggregate principal amount of such
Lender’s Revolving Loans then outstanding constitutes of the aggregate principal
amount of the Revolving Loans then outstanding).

 

“Revolving Termination Date”: (a) the Initial Revolving Termination Date or (b)
if any of the Existing 2008 Senior Notes remain outstanding on April 14, 2008,
the Accelerated Revolving Termination Date.

 

“SEC”: the Securities and Exchange Commission, any successor thereto and any
analogous Governmental Authority.

 

“Second Lien Note Indenture”: the Indenture entered into by the Borrower, TWTC
and certain of its Subsidiaries in connection with the issuance of the Second
Lien Notes, together with all instruments and other agreements entered into by
the Borrower, TWTC or such Subsidiaries in connection therewith, as the same may
be amended, supplemented or otherwise modified from time to time in accordance
with Section 7.9.

 

“Second Lien Notes”: the Second Priority Senior Secured Floating Rate Notes due
2011 of the Borrower issued on or about the Effective Date.

 

“Second Lien Trustee”: Wells Fargo Bank, National Association, as trustee for
the holders of the Second Lien Notes, and any successor thereto in such
capacity.

 

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

 

“Security Documents”: the collective reference to (a) the Guarantee and
Collateral Agreement, (b) all other security documents (including mortgages or
deeds of trust) hereafter delivered by a Loan Party to the Collateral Agent
granting a first priority Lien on any property of such Loan Party to secure
(inter alia) the Obligations and/or certain other Indebtedness or obligations
secured on a pari passu basis with the Obligations and (c) the Intercreditor
Agreement.

 

“Senior Secured Indebtedness”: of any Person at any date, any Indebtedness of
such Person that (a) is not contractually subordinated to the Indebtedness under
this Agreement and the other Loan Documents and (b) is secured by a first
priority Lien on all or substantially all of the assets of such Person.

 

“Shell Subsidiary”: any Subsidiary of TWTC (x) that is a “shell” company having
(a) assets (either directly or through any Subsidiary or other Capital Stock)
with an aggregate value not exceeding $10,000 and (b) no business or operations
or (y) that satisfies the requirements of clause (x)(a) above and is in the
process of being liquidated or wound up in a voluntary liquidation.

 

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

 

“Solvent”: when used with respect to any Person, means that, 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” after giving effect to the expected value
of rights of indemnity, contribution and subrogation, as of such date, as such
quoted

 

18

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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 after giving effect to the
expected value of rights of indemnity, contribution and subrogation, (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 after giving effect to the expected value of rights of
indemnity, contribution and subrogation. 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.

 

“S&P”: Standard & Poor’s Ratings Services.

 

“Specified Change of Control”: a “Change of Control”, or like event, as defined
in either High Yield Indenture (or any indenture governing any Refinancing of
the Existing Senior Notes or the High Yield Notes or any indenture governing any
Refinancing of any such refinancing Indebtedness).

 

“Specified Subsidiary”: Time Warner Telecom of Arizona LLC, Time Warner Telecom
of Georgia, L.P., Time Warner Telecom of NY, L.P., Time Warner Telecom of New
Jersey, L.P., Time Warner Telecom of Hawaii, L.P., Time Warner Telecom of
Indiana, L.P. and Time Warner Telecom of the Mid-South L.L.C., and any other
Subsidiary formed or acquired after the Effective Date and identified as a
“Specified Subsidiary” by TWTC in a written notice to the Administrative Agent
and for which the approvals of any Governmental Authority or of any third party
(other than TWTC or a Subsidiary) required (x) to permit TWTC or a Subsidiary to
pledge the Capital Stock of such Subsidiary under the Guarantee and Collateral
Agreement and/or (y) to permit such Subsidiary to become a party to the
Guarantee and Collateral Agreement and the Intercreditor Agreement are unable to
be obtained within 30 days following the formation or acquisition thereof;
provided, that if (and for so long as) any such Subsidiary shall become and be a
party to the Guarantee and Collateral Agreement, it shall cease to be a
“Specified Subsidiary”.

 

“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, limited liability company 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 TWTC.

 

“Subsidiary Guarantor”: each Subsidiary of TWTC other than (a) the Borrower, (b)
any Foreign Subsidiary, (c) any Shell Subsidiary, (d) any Immaterial Subsidiary
and (e) any Specified Subsidiary; provided, that a Subsidiary shall not be
deemed to be a “Subsidiary Guarantor” until and unless it has become a party to
the Guarantee and Collateral Agreement and the Intercreditor Agreement and shall
cease to be a “Subsidiary Guarantor” from and after the date that it has been
released, whether pursuant to Section 10.14 or otherwise.

 

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“Supermajority Lenders”: at any time, the holders of more than 66 2/3% of the
Total Revolving Commitments then in effect or, if the Revolving Commitments have
been terminated, the Total Revolving Extensions of Credit then outstanding.

 

“Swingline Commitment”: the obligation of the Swingline Lender to make Swingline
Loans pursuant to Section 2.4 in an aggregate principal amount at any one time
outstanding not to exceed $15,000,000.

 

“Swingline Lender”: LCPI, in its capacity as the lender of Swingline Loans.

 

“Swingline Loans”: as defined in Section 2.4.

 

“Swingline Participation Amount”: as defined in Section 2.5(c).

 

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

 

“Time Warner Arrangements”: the collective reference to the capacity license of
optical fibers and other property from Time Warner Cable, the facilities lease
and the trade name license agreement between TWTC and Time Warner Inc. and its
affiliates.

 

“Total Revolving Commitments”: at any time, the aggregate amount of the
Revolving Commitments then in effect.

 

“Total Revolving Extensions of Credit”: at any time, the aggregate amount of the
Revolving Extensions of Credit of the Revolving Lenders outstanding at such
time.

 

“Transferee”: any Assignee or Participant.

 

“TWTC”: as defined in the preamble hereto.

 

“Type”: as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.

 

“United States”: the United States of America.

 

“Wholly Owned Subsidiary”: as to any Person, any other Person all of the Capital
Stock of which (other than directors’ qualifying shares required by law) is
owned by such Person directly and/or through other Wholly Owned Subsidiaries.

 

“Wholly Owned Subsidiary Guarantor”: any Subsidiary Guarantor that is a Wholly
Owned Subsidiary of TWTC.

 

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 in any certificate or other document made or delivered
pursuant hereto or thereto.

 

(b) As used herein and in the other Loan Documents, and in any certificate or
other document made or delivered pursuant hereto or thereto, (i) accounting
terms relating to TWTC, the Borrower and their respective Subsidiaries not
defined in Section 1.1 and accounting terms partly defined in Section 1.1, to
the extent not so defined, shall have the respective meanings given to them
under GAAP, (ii) the words “include”, “includes” and “including” shall be deemed

 

20

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to be followed by the phrase “without limitation”, (iii) the word “incur” shall
be construed to mean incur, create, issue, assume, become liable in respect of
or suffer to exist (and the words “incurred” and “incurrence” shall have
correlative meanings), and (iv) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, Capital Stock,
securities, revenues, accounts, leasehold interests and contract rights.

 

(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.

 

SECTION 2. AMOUNT AND TERMS OF COMMITMENTS

 

2.1. Revolving Commitments; Additional Commitments; Incremental Facility. (a)
Subject to the terms and conditions hereof, each Revolving Lender severally
agrees to make revolving credit loans (“Revolving Loans”) to the Borrower from
time to time during the Revolving Commitment Period in an aggregate principal
amount at any one time outstanding which, when added to such Lender’s Revolving
Percentage of the sum of (i) the L/C Obligations then outstanding (other than
any such L/C Obligations to be concurrently repaid with the proceeds of a
Revolving Loan) and (ii) the aggregate principal amount of the Swingline Loans
then outstanding (other than any such Swingline Loan to be concurrently repaid
with the proceeds of a Revolving Loan), does not exceed the amount of such
Lender’s Revolving Commitment. During the Revolving Commitment Period the
Borrower may use the Revolving Commitments by borrowing, prepaying the Revolving
Loans in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof. The Revolving Loans may from time to time be Eurodollar Loans
or ABR Loans, as determined by the Borrower and notified to the Administrative
Agent in accordance with Sections 2.2 and 2.9.

 

(b) The Borrower and any one or more Lenders (including New Lenders) may, with
the consent of the Administrative Agent (such consent not to be unreasonably
delayed, conditioned or withheld), at any time and from time to time after the
Effective Date, agree that such Lenders shall obtain or increase the amount of
their Revolving Commitments by executing and delivering to the Administrative
Agent an Increased Facility Activation Notice specifying (i) the amount of such
increase and (ii) the applicable Increased Facility Closing Date.
Notwithstanding the foregoing, without the consent of the Required Lenders, (i)
the Total Revolving Commitments may not be increased by more than $150,000,000
(minus the amount of any Incremental Loans provided under Section 2.1(c) below),
(ii) no more than five Increased Facility Closing Dates may be selected by the
Borrower during the term of this Agreement and (iii) after giving effect to any
borrowings under the additional Revolving Commitments provided herein, the Gross
Consolidated Senior First Lien Secured Leverage Ratio, calculated on a pro forma
basis as of the last day of the most recently ended fiscal quarter of TWTC for
which financial statements have been furnished under Section 6 of this
Agreement, shall not exceed 1.50 to 1.0. No Lender shall have any obligation to
participate in any increase described in this paragraph unless it agrees in
writing to do so in its sole discretion. In addition, without the consent of all
Lenders, the aggregate amount of all additional Revolving Commitments provided
under this Section 2.1(b)

 

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(together with all Incremental Facilities provided under Section 2.1(c) below)
shall not exceed $300,000,000.

 

(c) As an alternative or in addition to Section 2.1(b) above, the Borrower and
any one or more Lenders (including New Lenders) may, with the consent of the
Administrative Agent (such consent not to be unreasonably delayed, conditioned
or withheld), at any time and from time to time after the Effective Date, agree
that such Lenders shall make one or more term loan facilities (each, an
“Incremental Facility”; the loans thereunder, the “Incremental Loans”) available
to the Borrower. Each Incremental Facility may be documented by a supplement to
this Agreement signed by TWTC, the Borrower, the Administrative Agent and the
Lenders party thereto. Notwithstanding the foregoing, without the consent of the
Required Lenders, (i) the aggregate amount of all Incremental Facilities shall
not exceed $150,000,000 (minus the amount of any additional Revolving
Commitments provided under Section 2.1(b) above), (ii) the Incremental Loans
shall not have a stated maturity prior to the Revolving Termination Date then in
effect and (iii) after giving effect to any Incremental Facility and the
borrowings contemplated thereunder, (x) no Default or Event of Default shall
have occurred and be continuing, (y) TWTC shall be in pro forma compliance with
the covenants contained in Section 7.1 to the extent such covenants are then in
effect and (z) the Gross Consolidated Senior First Lien Secured Leverage Ratio,
calculated on a pro forma basis as of the last day of the most recently ended
fiscal quarter of TWTC for which financial statements have been furnished under
Section 6 of this Agreement, shall not exceed 1.50 to 1.0. No Lender shall have
any obligation to participate in an Incremental Facility unless it agrees in
writing to do so in its sole discretion. In addition, without the consent of all
Lenders, the aggregate amount of all Incremental Facilities (together with the
amount of any additional Revolving Commitments provided under Section 2.1(b)
above) shall not exceed $300,000,000.

 

(d) Any additional bank, financial institution or other entity which, with the
consent of the Borrower and the Administrative Agent (such consent not to be
unreasonably delayed, conditioned or withheld), elects to become a “Lender”
under this Agreement in connection with any transaction described in Section
2.1(b) or 2.1(c) shall execute a New Lender Supplement (each, a “New Lender
Supplement”), substantially in the form of Exhibit D-1, whereupon such bank,
financial institution or other entity (a “New Lender”) shall become a Lender for
all purposes and to the same extent as if originally a party hereto and shall be
bound by and entitled to the benefits of this Agreement.

 

(e) Unless otherwise agreed by the Administrative Agent, if Revolving Loans are
then outstanding and the Borrower wishes to borrow under the additional
Revolving Commitments provided under Section 2.1(b), the Borrower shall repay
all Revolving Loans then outstanding and reborrow under the Revolving
Commitments then in effect (after giving effect to such additional Revolving
Commitments) on a pro rata basis.

 

2.2. Procedure for Borrowing. In order to effect a borrowing hereunder, the
Borrower shall give the Administrative Agent irrevocable notice (which notice
must be received by the Administrative Agent prior to 2:00 P.M., New York City
time, (a) three Business Days prior to the requested Borrowing Date, in the case
of Eurodollar Loans, or (b) one Business Day prior to the requested Borrowing
Date, in the case of ABR Loans) specifying (i) the amount and Type of Loans to
be borrowed, (ii) the requested Borrowing Date and (iii) in the case of
Eurodollar Loans, the respective amounts of each such Type of Loan and the
respective lengths of the initial Interest Period therefor. Each borrowing shall
be in an aggregate amount equal to (w) in the case of ABR Loans, $5,000,000 or a
whole multiple of $1,000,000 in excess thereof (or, if the then aggregate
Available Revolving Commitments are less than

 

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$5,000,000, such lesser amount) and (x) in the case of Eurodollar Loans,
$5,000,000 or a whole multiple of $1,000,000 in excess thereof; provided, that
the Swingline Lender may request, on behalf of the Borrower, borrowings under
the Revolving Commitments that are ABR Loans in other amounts pursuant to
Section 2.5. Upon receipt of such notice the Administrative Agent shall promptly
notify each Lender thereof. Not later than 12:00 Noon, New York City time, on
the Borrowing Date requested by the Borrower, 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 promptly credit the account of the Borrower on the books of such
office of the Administrative Agent with the aggregate of the amounts made
available to the Administrative Agent by the Lenders, in each case in
immediately available funds.

 

2.3. Repayment of Loans. (a) The Borrower shall repay all outstanding Revolving
Loans on the Revolving Termination Date.

 

(b) If on any date the Total Revolving Extensions of Credit exceed the Total
Revolving Commitments then in effect, the Borrower shall, on such date, repay
outstanding Revolving Loans and/or cash collateralize Letters of Credit so that
the Total Revolving Extensions of Credit do not exceed the Total Revolving
Commitments then in effect.

 

2.4. Swingline Commitment. (a) Subject to the terms and conditions hereof, the
Swingline Lender agrees to make a portion of the credit otherwise available to
the Borrower under the Revolving Commitments from time to time during the
Revolving Commitment Period by making swing line loans (“Swingline Loans”) to
the Borrower; provided that (i) the aggregate principal amount of Swingline
Loans outstanding at any time shall not exceed the Swingline Commitment then in
effect (notwithstanding that the Swingline Loans outstanding at any time, when
aggregated with the Swingline Lender’s other outstanding Revolving Loans
hereunder, may exceed the Swingline Commitment then in effect) and (ii) the
Borrower shall not request, and the Swingline Lender shall not make, any
Swingline Loan if (a) after giving effect to the making of such Swingline Loan,
the aggregate amount of the Available Revolving Commitments would be less than
zero. During the Revolving Commitment Period, the Borrower may use the Swingline
Commitment by borrowing, repaying and reborrowing, all in accordance with the
terms and conditions hereof, or (b) the conditions set forth in Section 5.3 are
not satisfied. Swingline Loans shall be ABR Loans only.

 

(b) The Borrower shall repay all outstanding Swingline Loans on the Revolving
Termination Date.

 

2.5. Procedure for Swingline Borrowing; Refunding of Swingline Loans. (a)
Whenever the Borrower desires that the Swingline Lender make Swingline Loans it
shall give the Swingline Lender irrevocable telephonic notice confirmed promptly
in writing (which telephonic notice must be received by the Swingline Lender not
later than 2:00 P.M., New York City time, on the proposed Borrowing Date),
specifying (i) the amount to be borrowed and (ii) the requested Borrowing Date
(which shall be a Business Day during the Revolving Commitment Period). Each
borrowing under the Swingline Commitment shall be in an amount equal to $500,000
or a whole multiple of $100,000 in excess thereof. Not later than 3:00 P.M., New
York City time, on the Borrowing Date specified in a notice in respect of
Swingline Loans, the Swingline Lender shall make available to the Administrative
Agent at the Funding Office an amount in immediately available funds equal to
the amount of the Swingline Loan to be made by the Swingline Lender. The
Administrative Agent shall promptly make the proceeds of such Swingline Loan
available to the Borrower on such Borrowing Date by depositing such proceeds in
the account of the Borrower with the Administrative Agent on such Borrowing Date
in immediately available funds (unless in the notice of borrowing the Borrower
gives instructions that the funds shall be wired to another

 

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account, in which case the funds shall be so wired to the designated account
prior to 3:00 P.M., New York City time).

 

(b) The Swingline Lender, at any time and from time to time in its sole and
absolute discretion may, on behalf of the Borrower (which hereby irrevocably
directs the Swingline Lender to act on its behalf), on one Business Day’s notice
given by the Swingline Lender no later than 12:00 Noon, New York City time,
request each Revolving Lender to make, and each Revolving Lender hereby agrees
to make, a Revolving Loan, in an amount equal to such Revolving Lender’s
Revolving Percentage of the aggregate amount of the Swingline Loans (the
“Refunded Swingline Loans”) outstanding on the date of such notice, to repay the
Swingline Lender. Each Revolving Lender shall make the amount of such Revolving
Loan available to the Administrative Agent at the Funding Office in immediately
available funds, not later than 10:00 A.M., New York City time, one Business Day
after the date of such notice. The proceeds of such Revolving Loans shall be
immediately made available by the Administrative Agent to the Swingline Lender
for application by the Swingline Lender to the repayment of the Refunded
Swingline Loans. The Borrower irrevocably authorizes the Swingline Lender to
charge the Borrower’s accounts with the Administrative Agent (up to the amount
available in each such account) in order to immediately pay the amount of such
Refunded Swingline Loans to the extent amounts received from the Revolving
Lenders are not sufficient to repay in full such Refunded Swingline Loans.

 

(c) If prior to the time a Revolving Loan would have otherwise been made
pursuant to Section 2.5(b), one of the events described in Section 8(f) shall
have occurred and be continuing with respect to the Borrower or if for any other
reason, as determined by the Swingline Lender in its sole discretion, Revolving
Loans may not be made as contemplated by Section 2.5(b), each Revolving Lender
shall, on the date such Revolving Loan was to have been made pursuant to the
notice referred to in Section 2.5(b) (the “Refunding Date”), purchase for cash
an undivided participating interest in the then outstanding Swingline Loans by
paying to the Swingline Lender an amount (the “Swingline Participation Amount”)
equal to (i) such Revolving Lender’s Revolving Percentage times (ii) the sum of
the aggregate principal amount of Swingline Loans then outstanding that were to
have been repaid with such Revolving Loans.

 

(d) Whenever, at any time after the Swingline Lender has received from any
Revolving Lender such Lender’s Swingline Participation Amount, the Swingline
Lender receives any payment on account of the Swingline Loans, the Swingline
Lender will distribute to such Lender its Swingline Participation Amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender’s participating interest was outstanding and
funded and, in the case of principal and interest payments, to reflect such
Lender’s pro rata portion of such payment if such payment is not sufficient to
pay the principal of and interest on all Swingline Loans then due); provided,
however, that in the event that such payment received by the Swingline Lender is
required to be returned, such Revolving Lender will return to the Swingline
Lender any portion thereof previously distributed to it by the Swingline Lender.

 

(e) Each Revolving Lender’s obligation to make the Loans referred to in Section
2.5(b) and to purchase participating interests pursuant to Section 2.5(c) shall
be absolute and unconditional and shall not be affected by any circumstance,
including (i) any setoff, counterclaim, recoupment, defense or other right that
such Revolving Lender or the Borrower may have against the Swingline Lender, the
Borrower or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default or an Event of Default or the failure to satisfy any of
the other conditions specified in Section 5; (iii) any adverse change in the
condition

 

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(financial or otherwise) of the Borrower; (iv) any breach of this Agreement or
any other Loan Document by the Borrower, any other Loan Party or any other
Revolving Lender; or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.

 

2.6. Commitment Fees, etc. (a) The Borrower agrees to pay to the Administrative
Agent for the account of each Revolving Lender a commitment fee for the period
from and including the Effective Date to the last day of the Revolving
Commitment Period, computed at the Commitment Fee Rate on the average daily
amount of the Available Revolving Commitment of such Lender during the period
for which payment is made, payable quarterly in arrears on the last day of each
March, June, September and December prior to, and on, the Revolving Termination
Date, commencing on the first of such dates to occur after the date hereof.

 

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

 

2.7. Optional Termination or Reduction of Revolving Commitments. The Borrower
shall have the right, upon notice (or, when accompanied by a prepayment of ABR
Loans or Eurodollar Loans, not less than one or three Business Days’ notice,
respectively) to the Administrative Agent, to terminate the Revolving
Commitments or, from time to time, to reduce the amount of the Revolving
Commitments; provided that no such termination or reduction of Revolving
Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Loans and Swingline Loans made on the effective
date thereof, the Total Revolving Extensions of Credit would exceed the Total
Revolving Commitments. Any such reduction shall be in an amount equal to
$1,000,000, or a whole multiple thereof, and shall reduce ratably and
permanently the Revolving Commitments then in effect.

 

2.8. Optional Prepayments. The Borrower may at any time and from time to time
prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable notice delivered to the Administrative Agent at least three Business
Days prior thereto in the case of Eurodollar Loans and at least one Business Day
prior thereto in the case of ABR Loans, which notice shall specify the date and
amount of prepayment and whether the prepayment is of Eurodollar Loans or ABR
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 2.17. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant 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 (except in the case of
Revolving Loans that are ABR Loans and Swingline Loans) accrued interest to such
date on the amount prepaid. Partial prepayments of Revolving Loans shall be in
an aggregate principal amount of $1,000,000 or a whole multiple thereof. Partial
prepayments of Swingline Loans shall be in an aggregate principal amount of
$100,000 or a whole multiple thereof.

 

2.9. Conversion and Continuation Options. (a) The Borrower may elect from time
to time to convert Eurodollar Loans to ABR 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 only be made on the
last day of an Interest Period with respect thereto. The Borrower may elect from
time to time to convert ABR 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 ABR Loan may be converted into a Eurodollar
Loan when any Event of Default has occurred and is continuing and the
Administrative Agent has determined in its sole discretion not to permit such
conversions. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.

 

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(b) Any Eurodollar Loan may be continued as such upon the expiration of the then
current Interest Period with respect thereto by the Borrower 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 Loans, provided that no Eurodollar
Loan may be continued as such when any Event of Default has occurred and is
continuing and the Administrative Agent has determined in its sole discretion
not to permit such continuations, 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 automatically converted to ABR 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.

 

2.10. Limitations on Eurodollar Loans. Notwithstanding anything to the contrary
in this Agreement, all borrowings, conversions and continuations of Eurodollar
Loans hereunder and all selections of Interest Periods hereunder 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 10 Eurodollar
Tranches shall be outstanding at any one time.

 

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

 

(b) Each ABR Loan shall bear interest at a rate per annum equal to the ABR plus
the Applicable Margin.

 

(c) (i) If all or a portion of the principal amount of any Loan or Reimbursement
Obligation 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 (x) in the case of the Loans, the rate that would otherwise
be applicable thereto pursuant to the foregoing provisions of this Section plus
2% or (y) in the case of Reimbursement Obligations, the rate then applicable to
ABR Loans plus 2%, and (ii) if all or a portion of any interest payable on any
Loan or Reimbursement Obligation or any commitment fee or other amount payable
hereunder 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 ABR 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 (as well after 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.

 

2.12. Computation of Interest and Fees. (a) Interest and fees payable pursuant
hereto shall be calculated on the basis of a 360-day year for the actual days
elapsed, except that, with respect to ABR Loans the rate of interest on which 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 ABR 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

 

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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 2.11.

 

2.13. 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

 

(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 relevant Lenders as soon as practicable thereafter. If such
notice is given (x) either the Borrower may withdraw any request for a borrowing
of Eurodollar Loans or any Eurodollar Loans requested to be made on the first
day of such Interest Period shall be made as ABR 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 ABR Loans and (z) any outstanding Eurodollar Loans
shall be converted, on the last day of the then-current Interest Period, to ABR
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.

 

2.14. Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower from
the Lenders hereunder, each payment by the Borrower on account of any commitment
fee and any reduction of the Revolving Commitments of the Lenders shall be made
pro rata according to the respective Revolving Percentages of the Revolving
Lenders.

 

(b) Each payment (including each prepayment) by the Borrower on account of
principal of and interest on the Revolving Loans shall be made pro rata
according to the respective outstanding principal amounts of the Revolving Loans
then held by the Revolving Lenders.

 

(c) 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 Funding Office, in Dollars and in immediately available
funds. The Administrative Agent shall distribute such payments to the Lenders
promptly upon receipt in like funds as received. 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

 

27

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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 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.

 

(d) 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 daily average Federal Funds Effective Rate 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 of such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum then applicable to ABR Loans,
on demand, from the Borrower (it being understood and agreed that any payment by
the Borrower pursuant to the foregoing shall be without prejudice to its rights
against any defaulting Lender).

 

(e) Unless the Administrative Agent shall have been notified in writing by the
Borrower prior to the date of any payment being made 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 of such required date, the Administrative Agent shall
be entitled to recover, on demand, from each Lender to which any amount which
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.

 

2.15. 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, any Letter of Credit, any Application 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 2.16 and
changes in the rate of tax on the overall net income of such Lender);

 

(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,

 

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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 that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, 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 actually incurred or reduced amount actually received;
provided that the Borrower shall not be required to compensate a Lender pursuant
to this paragraph for any amounts incurred more than 90 days 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 90-day 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 paragraph, it shall
promptly (and, in any event, within three months) notify the Borrower (with a
copy to the Administrative Agent) of the event by reason of which it has become
so entitled.

 

(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 or under or in respect of any Letter of Credit 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 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 90 days 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 90-day period shall be extended to include the
period of such retroactive effect.

 

(c) A certificate, setting forth a reasonably detailed explanation as to the
reason for any additional amounts payable pursuant to this Section, as to any
additional amounts payable pursuant to this Section submitted by any Lender to
the Borrower (with a copy to the Administrative Agent) shall be 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.

 

2.16. 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 the Administrative Agent, the Collateral Agent or any Lender as a result of a
present or former connection between the

 

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Administrative Agent, the Collateral 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 the Administrative Agent, the Collateral Agent or such Lender 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 Other Taxes are required to be withheld from any
amounts payable to the Administrative Agent, the Collateral Agent or any Lender
hereunder, the amounts so payable to the Administrative Agent, the Collateral
Agent or such Lender shall be increased to the extent necessary to yield to the
Administrative Agent, the Collateral 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 the Lender becomes a
party to this Agreement, except as, and 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.

 

(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 its own account or for the account of the Collateral Agent or the
relevant 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
Administrative Agent, the Collateral Agent and the Lenders for any incremental
taxes, interest or penalties that may become payable by the Administrative Agent
or any Lender as a result of any such failure.

 

(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 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 F 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

 

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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 judgment such completion, execution or submission would not materially
prejudice the legal position of such Lender.

 

(f) If any payee receives a refund of any Non-Excluded Taxes or Other Taxes paid
by the Borrower under this Section 2.16, which refund in the sole judgment of
such payee is allocable to such payment, such payee shall promptly pay over to
the Borrower the amount of such refund, net of all out-of-pocket expenses of
such payee; provided, however, that the Borrower, upon the request of such
payee, agrees to repay the amount paid over to the Borrower to such payee in the
event such Lender, the Collateral Agent or the Administrative Agent is required
to repay such refund.

 

(g) The agreements in this Section shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.

 

2.17. Indemnity. The Borrower agrees to indemnify each Lender 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 of or conversion
from Eurodollar Loans after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment 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, as the case may
be, 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 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.

 

2.18. Change of Lending Office. Each Lender agrees that, upon the occurrence of
any event giving rise to the operation of Section 2.15 or 2.16(a) 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 and other extensions of credit 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

 

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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 2.15 or 2.16(a).

 

2.19. Replacement of Lenders. The Borrower shall be permitted to replace any
Lender that (a) requests reimbursement for amounts owing pursuant to Section
2.15 or 2.16(a) or (b) defaults in its obligation to make Loans (or, in the case
of the Swingline Lender, Swingline Loans or, in the case of the Issuing Lender,
defaults in its obligation to issue Letters of Credit) 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 not have eliminated, after requested to do
so by the Borrower, the continued need for payment of amounts owing pursuant to
Section 2.15 or 2.16(a), (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 2.17 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 10.6 (provided that the Borrower shall be obligated to
pay the registration and processing fee referred to therein), (viii) until such
time as such replacement shall be consummated, the Borrower shall pay all
additional amounts (if any) required pursuant to Section 2.15 or 2.16(a), as the
case may be, 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.

 

2.20. Change of Control. Upon the occurrence of a Change of Control Triggering
Event or a Specified Change of Control, (i) the Borrower shall not have any
right to request an extension of credit hereunder and (ii) at the request of the
Required Lenders (or of the Administrative Agent acting at the request or with
the consent of the Required Lenders), (a) the Borrower shall immediately repay
all Obligations then outstanding under this Agreement and the other Loan
Documents and (b) all Revolving Commitments shall immediately terminate, without
other or further action by any Person.

 

SECTION 3. LETTERS OF CREDIT

 

3.1. L/C Commitment. (a) Subject to the terms and conditions hereof, the Issuing
Lender, in reliance on the agreements of the other Revolving Lenders set forth
in Section 3.4(a), agrees to issue letters of credit (“Letters of Credit”) for
the account of the Borrower on any Business Day during the Revolving Commitment
Period in such form as may be approved from time to time by the Issuing Lender;
provided that the Issuing Lender shall not issue any Letter of Credit if, after
giving effect to such issuance, (i) the L/C Obligations would exceed the L/C
Commitment or (ii) the aggregate amount of the Available Revolving Commitments
would be less than zero. Each Letter of Credit shall (i) be denominated in
Dollars, (ii) have a face amount of at least $500,000 (unless otherwise agreed
by the Issuing Lender) and (iii) expire no later than the earlier of (x) the
first anniversary of its date of issuance and (y) the date that is five Business
Days prior to the Revolving Termination Date, provided that any Letter of Credit
with a one-year term may provide for the renewal thereof for additional one-year
periods (which shall in no event extend beyond the date referred to in clause
(y) above).

 

(b) The Issuing Lender shall not issue any Letter of Credit hereunder if (i)
such issuance would conflict with, or cause the Issuing Lender or any L/C
Participant to exceed any limits

 

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imposed by, any applicable Requirement of Law or (ii) the conditions set forth
in Section 5.3 are not satisfied.

 

3.2. Procedure for Issuance of Letter of Credit. The Borrower may from time to
time request that the Issuing Lender issue a Letter of Credit by delivering to
the Issuing Lender at its address for notices specified herein an Application
therefor, completed to the satisfaction of the Issuing Lender, and such other
certificates, documents and other papers and information as the Issuing Lender
may request. Upon receipt of any Application, the Issuing Lender will process
such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of such
Letter of Credit to the Borrower or at its direction promptly following the
issuance thereof. The Issuing Lender shall promptly furnish to the
Administrative Agent, which shall in turn promptly furnish to the Lenders,
notice of the issuance of each Letter of Credit (including the amount thereof).

 

3.3. Fees and Other Charges. (a) The Borrower will pay a fee on the undrawn
portion of all outstanding Letters of Credit at a per annum rate equal to the
Applicable Margin then in effect with respect to Eurodollar Loans, shared
ratably among the Revolving Lenders and payable quarterly in arrears on each L/C
Fee Payment Date after the issuance date. In addition, the Borrower shall pay to
the Issuing Lender for its own account a fronting fee of 0.25% per annum on the
undrawn and unexpired amount of each Letter of Credit, payable quarterly in
arrears on each L/C Fee Payment Date after the issuance date.

 

(b) In addition to the foregoing fees, the Borrower shall pay or reimburse the
Issuing Lender for such normal and customary costs and expenses as are incurred
or charged by the Issuing Lender in issuing, negotiating, effecting payment
under, amending or otherwise administering any Letter of Credit.

 

3.4. L/C Participations. (a) The Issuing Lender irrevocably agrees to grant and
hereby grants to each L/C Participant, and, to induce the Issuing Lender to
issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from the Issuing Lender, on
the terms and conditions hereinafter stated, for such L/C Participant’s own
account and risk, an undivided interest equal to such L/C Participant’s
Revolving Percentage in the Issuing Lender’s obligations and rights under each
Letter of Credit issued hereunder and the amount of each draft paid by the
Issuing Lender thereunder. Each L/C Participant unconditionally and irrevocably
agrees with the Issuing Lender that, if a draft is paid under any Letter of
Credit for which the Issuing Lender is not reimbursed in full by the Borrower in
accordance with the terms of this Agreement, such L/C Participant shall pay to
the Administrative Agent, for the account of the Issuing Lender, upon demand at
the Administrative Agent’s Funding Office (and thereafter the Administrative
Agent shall promptly pay to the Issuing Lender) an amount equal to such L/C
Participant’s Revolving Percentage of the amount of such draft, or any part
thereof, that is not so reimbursed.

 

(b) If any amount required to be paid by any L/C Participant to the
Administrative Agent, for the account of the Issuing Lender, pursuant to Section
3.4(a) in respect of any unreimbursed portion of any payment made by the Issuing
Lender under any Letter of Credit is not paid to the Issuing Lender within three
Business Days after the date such payment is due, the Issuing Lender shall so
notify the Administrative Agent, who shall notify such L/C Participant

 

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and such L/C Participant shall pay to the Administrative Agent, for the account
of the Issuing Lender on demand (and thereafter the Administrative Agent shall
promptly pay to the Issuing Lender) an amount equal to the product of (i) such
amount, times (ii) the daily average Federal Funds Effective Rate during the
period from and including the date such payment is required to the date on which
such payment is immediately available to the Issuing Lender, times (iii) a
fraction the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. If any such amount required to be
paid by any L/C Participant pursuant to Section 3.4(a) is not made available to
the Administrative Agent, for the account of the Issuing Lender, by such L/C
Participant within three Business Days after the date such payment is due, the
Administrative Agent on behalf of the Issuing Lender shall be entitled to
recover from such L/C Participant, on demand, such amount with interest thereon
calculated from such due date at the rate per annum applicable to ABR Loans. A
certificate the Administrative Agent submitted on behalf of the Issuing Lender
submitted to any L/C Participant with respect to any such amounts owing under
this Section shall be conclusive in the absence of manifest error.

 

(c) Whenever, at any time after the Issuing Lender has made payment under any
Letter of Credit and has received from the Administrative Agent any L/C
Participant its pro rata share of such payment in accordance with Section
3.4(a), the Issuing Lender receives any payment related to such Letter of Credit
(whether directly from the Borrower or otherwise, including proceeds of
collateral applied thereto by the Issuing Lender), or any payment of interest on
account thereof, the Issuing Lender will distribute to the Administrative Agent,
for the account of such L/C Participant (and thereafter the Administrative Agent
shall promptly pay such L/C Participant), its pro rata share thereof; provided,
however, that in the event that any such payment received by the Issuing Lender
shall be required to be returned by the Issuing Lender, such L/C Participant
shall return to the Administrative Agent, for the account of the Issuing Lender
(and thereafter the Administrative Agent shall promptly pay to the Issuing
Lender), the portion thereof previously distributed by the Issuing Lender.

 

3.5. Reimbursement Obligation of the Borrower. Unless otherwise agreed by the
Issuing Lender and the Required Lenders, the Borrower agrees to reimburse the
Issuing Lender on each date on which the Issuing Lender notifies the Borrower of
the date and amount of a draft presented under any Letter of Credit and paid by
the Issuing Lender for the amount of (a) such draft so paid and (b) any taxes,
fees, charges or other costs or expenses incurred by the Issuing Lender in
connection with such payment. Each such payment shall be made to the Issuing
Lender at its address for notices specified herein in lawful money of the United
States and in immediately available funds. Interest shall be payable on any and
all amounts remaining unpaid by the Borrower under this Section from the date
such amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full at the rate set forth in (i) until the second
Business Day following the date of the applicable drawing, Section 2.11(b) and
(ii) thereafter, Section 2.11(c).

 

3.6. Obligations Absolute. The Borrower’s obligations under this Section 3 shall
be absolute and unconditional under any and all circumstances and irrespective
of any setoff, counterclaim or defense to payment that the Borrower may have or
have had against the Issuing Lender, any beneficiary of a Letter of Credit or
any other Person. The Borrower also agrees with the Issuing Lender that the
Issuing Lender shall not be responsible for, and the Borrower’s Reimbursement
Obligations under Section 3.5 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such transferee. The Issuing Lender shall not be

 

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liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit, except for errors or omissions resulting from the gross
negligence or willful misconduct of the Issuing Lender. The Borrower agrees that
any action taken or omitted by the Issuing Lender under or in connection with
any Letter of Credit or the related drafts or documents, if done in the absence
of gross negligence or willful misconduct and in accordance with the standards
of care specified in the Uniform Commercial Code of the State of New York, shall
be binding on the Borrower and shall not result in any liability of the Issuing
Lender to the Borrower.

 

3.7. Letter of Credit Payments. If any draft shall be presented for payment
under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower of the date and amount thereof. The responsibility of the Issuing
Lender to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.

 

3.8. Applications. To the extent that any provision of any Application related
to any Letter of Credit is inconsistent with the provisions of this Section 3,
the provisions of this Section 3 shall apply.

 

SECTION 4. REPRESENTATIONS AND WARRANTIES

 

To induce the Administrative Agent and the Lenders to enter into this Agreement
and to make the Loans and issue or participate in the Letters of Credit, TWTC
(as to itself and its Subsidiaries) and the Borrower (as to itself and its
Subsidiaries) hereby severally represent and warrant to the Administrative
Agent, the Collateral Agent and each Lender that:

 

4.1. Financial Condition. (a) The unaudited pro forma consolidated balance sheet
of TWTC and its consolidated Subsidiaries as at December 31, 2003 (including the
notes thereto) (the “Pro Forma Balance Sheet”), copies of which have heretofore
been furnished to each Lender, has been prepared giving effect (as if such
events had occurred on such date) to (i) the issuance of the High Yield Notes
and the use of proceeds thereof, (ii) the termination of the Existing Credit
Agreement and the payment of amounts then owing thereunder and (iii) the payment
of fees and expenses in connection with the foregoing. The Pro Forma Balance
Sheet has been prepared based on information and assumptions believed by TWTC to
be reasonable as of the date of delivery thereof, and presents fairly, based on
such information and assumptions, on a pro forma basis the estimated financial
position of TWTC and its consolidated Subsidiaries as at December 31, 2003,
assuming that the events specified in the preceding sentence had actually
occurred at such date.

 

(b) The audited consolidated balance sheet of TWTC as at December 31, 2002, and
the related consolidated statements of income and of cash flows for the fiscal
year ended on such date, reported on by and accompanied by an unqualified report
from Ernst & Young LLP, present fairly the consolidated financial condition of
TWTC as at such date, and the consolidated results of its operations and its
consolidated cash flows for the fiscal year then ended. The unaudited
consolidated balance sheet of TWTC as at September 30, 2003, and the related
unaudited consolidated statements of income and cash flows for the nine-month
period ended on such date, present fairly the consolidated financial condition
of TWTC 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 adjustments). All such financial

 

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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). TWTC and its Subsidiaries do not have any material Guarantee
Obligations, contingent liabilities and liabilities for taxes, or any long-term
leases or unusual forward or long-term commitments, including 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, 2002 to and
including the date hereof there has been no Disposition by TWTC or any of its
Subsidiaries of any material part of its business or property.

 

4.2. No Change. Since December 31, 2002, there has been no development or event
that has had or could reasonably be expected to have a Material Adverse Effect.

 

4.3. Existence; Compliance with Law. Each of TWTC 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 power and authority under its
constitutive documents, 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,
partnership or limited liability company, as the case may be, and 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
and (d) is in compliance with all Requirements of Law except to the extent that
the failure to be qualified or to comply therewith, as the case may be, could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

4.4. Power; Authorization; Enforceable Obligations. Each Loan Party will have
the power and authority under its constitutive documents, and the legal right,
to make, deliver and perform the Loan Documents to which it is a party prior to
the execution of any such Loan Documents. The Borrower has the power and
authority under its constitutive documents, and the legal right, to obtain
extensions of credit hereunder. Each Loan Party will have taken all necessary
organizational action under its constitutive documents to authorize the
execution, delivery and performance of the Loan Documents to which it is a party
prior to the execution of any such Loan Documents. The Borrower has taken all
necessary organizational action under its constitutive documents to authorize
the extensions of credit 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 extensions of credit hereunder or with the execution,
delivery, performance, validity or enforceability of this Agreement or any of
the Loan Documents by or on behalf of the Loan Parties, except (i) consents,
authorizations, filings and notices described in Schedule 4.4, which consents,
authorizations, filings and notices shall be obtained or made and shall be in
full force and effect prior to the Initial Funding Date (except that no such
filings will have been obtained or made with respect to certain real and
personal property excluded from the Collateral under the Security Documents) and
(ii) the filings referred to in Section 4.19. This Agreement has been, and each
other Loan Document as of its date will be, duly executed and delivered on
behalf of each Loan Party party thereto. This Agreement constitutes, and each
other Loan Document upon execution will constitute, a legal, valid and binding
obligation of each Loan Party 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).

 

4.5. No Legal Bar. The execution, delivery and performance of this Agreement and
the other Loan Documents, the issuance of Letters of Credit, the borrowings
hereunder and the use of the proceeds thereof will not violate any Requirement
of Law or any Contractual Obligation of TWTC or any

 

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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 permitted under Section 7.3 and other than the potential
violation of any Contractual Obligation which could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect). No
Requirement of Law or Contractual Obligation applicable to TWTC or any of its
Subsidiaries could reasonably be expected to have a Material Adverse Effect.

 

4.6. Litigation. No litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of TWTC or
the Borrower, threatened by or against TWTC 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.

 

4.7. No Default. Neither TWTC 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.

 

4.8. Ownership of Property; Liens. Each of TWTC and its Subsidiaries has title
in fee simple to, or a valid leasehold interest (or a license or an indefeasible
right of use) in, all its real property, and good title to, or a valid leasehold
interest (or a license or an indefeasible right of use) in, all its other
property, and none of such property is subject to any Lien except as permitted
by Section 7.3. TWTC has no Lien on the assets of any of its limited partnership
Subsidiaries pursuant to its limited partnership interests or otherwise and any
claim or interest that TWTC has in such assets is subordinated and junior in
right to that of the Lenders.

 

4.9. Intellectual Property. TWTC 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 (a) certain licenses relating to certain
trademarks, tradenames and similar Intellectual Property owned by Time Warner,
Inc. may be withdrawn at the election of Time Warner, Inc. and (b) certain minor
imperfections and other adverse interests which could not reasonably be expected
to have a Material Adverse Effect may exist with respect to certain Intellectual
Property. No 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 that could reasonably be expected to
have a Material Adverse Effect, nor does TWTC or any of its Subsidiaries know of
any valid basis for any such claim. The use of Intellectual Property by TWTC and
its Subsidiaries does not infringe on the rights of any Person in any material
respect.

 

4.10. Taxes. Each of TWTC and 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 TWTC or its
Subsidiaries, as the case may be); no tax Lien has been filed, and, to the
knowledge of TWTC and the Borrower, no material claim is being asserted, with
respect to any such tax, fee or other charge.

 

4.11. Federal Regulations. No part of the proceeds of any Loans, and no other
extensions of credit hereunder, will be used for “buying” 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

 

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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, as applicable, referred to in Regulation U.

 

4.12. Labor Matters. Except as, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect: (a) there are no strikes or other
labor disputes against TWTC or any of its Subsidiaries pending or, to the
knowledge of TWTC or the Borrower, threatened; (b) hours worked by and payment
made to employees of TWTC 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; and (c) all payments due from TWTC or any of its Subsidiaries on
account of employee health and welfare insurance have been paid or accrued as a
liability on the books of TWTC or the relevant Subsidiary.

 

4.13. ERISA. Neither a Reportable Event with respect to a Plan which, if
terminated, would result in material liability 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, other than a standard
termination pursuant to Section 4041(b) of ERISA, has occurred, and no Lien in
favor of the PBGC or a Plan has arisen, during such five-year period, in either
case with respect to which the Borrower has any outstanding liability. 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 which has not been satisfied as of the date hereof, and neither the
Borrower nor any Commonly Controlled Entity would to the knowledge of the
Borrower 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.

 

4.14. 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. No Loan Party is
subject to regulation under any Requirement of Law (other than Regulation X of
the Board and certain laws and regulations regulating utilities) that limits its
ability to incur Indebtedness.

 

4.15. Subsidiaries. Schedule 4.15 sets forth, as of the Effective Date, the name
and jurisdiction of incorporation of each Subsidiary and, as to each such
Subsidiary, the percentage of each class of Capital Stock owned by any Loan
Party, and 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 the Borrower or any Subsidiary of TWTC, except as
created by the Loan Documents or the security documents relating to the Second
Lien Notes.

 

4.16. Use of Proceeds. The proceeds of the Revolving Loans, the Swingline Loans
and the Letters of Credit shall be used for general corporate purposes of TWTC,
the Borrower and their respective Subsidiaries.

 

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4.17. Environmental Matters. Except as, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect:

 

(a) the facilities and properties owned, leased or operated by TWTC or any of
its Subsidiaries (the “Properties”) do not contain any Materials of
Environmental Concern in amounts or concentrations or under circumstances that
constitute a violation of, or could reasonably be expected to give rise to
liability under, any Environmental Law;

 

(b) neither TWTC nor any of its Subsidiaries has received any written notice of
any violation, alleged violation, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to any
of the Properties or the business operated by TWTC or any of its Subsidiaries
(the “Business”), nor does TWTC or the Borrower have knowledge that any such
notice will be received or is being threatened;

 

(c) Materials of Environmental Concern have not been transported or disposed of
from the Properties in violation of, or in a manner or to a location that could
reasonably be expected to give rise to liability under, any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated, stored
or disposed of at, on or under any of the Properties in violation of, or in a
manner that could reasonably be expected to give rise to liability under, any
applicable Environmental Law;

 

(d) no judicial proceeding or governmental or administrative action is pending
or, to the knowledge of TWTC and the Borrower, threatened, under any
Environmental Law to which TWTC or any Subsidiary is or will be named as a party
with respect to the Properties or the Business, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other orders
outstanding under any Environmental Law with respect to the Properties or the
Business;

 

(e) there has been no release or threat of release of Materials of Environmental
Concern at or from the Properties, or arising from or related to the operations
of TWTC or any Subsidiary in connection with the Properties or otherwise in
connection with the Business, in violation of or in amounts or in a manner that
could give rise to liability under Environmental Laws; and

 

(f) the Properties and all operations at the Properties or otherwise in respect
to the Business are in compliance, and have in the last five years been in
compliance, with all applicable Environmental Laws.

 

4.18. Accuracy of Information, etc. No statement or information contained in
this Agreement, any other Loan Document, the Confidential Information Memorandum
or any other document, certificate or statement furnished by or on behalf of any
Loan Party to the Administrative Agent or the Lenders, or any of them, 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 furnished (or, in the case of the Confidential Information
Memorandum, as of the Effective Date), any untrue statement of a material fact
or omitted to state a material fact necessary to make the statements contained
herein or therein, when taken as a whole and in conjunction with TWTC’s public
filings and disclosures, not misleading. The projections contained in the
materials referenced above are based upon good faith estimates and assumptions
believed by management of TWTC 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

 

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amount. As of the Effective Date, 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 herein, in the other Loan Documents, in the Confidential
Information Memorandum or in any other documents, certificates and statements
furnished prior to the Effective Date by or on behalf of any Loan Party to the
Administrative Agent and the Lenders for use in connection with the transactions
contemplated hereby and by the other Loan Documents.

 

4.19. Security Documents. On and after the Collateral Base Date, the Guarantee
and Collateral Agreement is effective to create in favor of the Collateral Agent
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
Guarantee and Collateral Agreement, when stock certificates representing such
pledged stock (together with blank assignments) are delivered to the Collateral
Agent (or the Collateral Agent otherwise obtains control thereof under the UCC),
and in the case of the other Collateral (other than that which is required to be
perfected by control) described in the Guarantee and Collateral Agreement, when
Uniform Commercial Code financing statements and other filings specified on
Schedule 3 to the Guarantee and Collateral Agreement in appropriate form are
filed in the offices specified on Schedule 3 to the Guarantee and Collateral
Agreement, 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 may be accomplished by the filing of such Uniform Commercial Code
financing statements and other filings, as security for the Secured Obligations,
in each case prior and superior in right to any other Person (except Liens
permitted by Section 7.3).

 

4.20. Solvency. Except for any Shell Subsidiaries, each Loan Party is, and after
giving effect to the incurrence of all Indebtedness and obligations being
incurred in connection herewith will be and will continue to be, Solvent.

 

4.21. Certain Documents. The Borrower has delivered to the Administrative Agent
complete and correct copies of the Indentures (and any indenture governing any
Refinancing of the Existing Senior Notes or the High Yield Notes and any
indenture governing any Refinancing of any such refinancing Indebtedness).

 

4.22. Priority Lien Debt. The Obligations constitute (i) “Priority Lien Debt”
(or any other term having a similar meaning) of the Borrower under and as
defined in the High Yield Indentures (and any indenture governing any
Refinancing of the Existing Senior Notes or the High Yield Notes, if applicable,
and any indenture governing any Refinancing of any such refinancing
Indebtedness, if applicable) and (ii) “First Priority Obligations” under and as
defined in the Intercreditor Agreement. The obligations of each Subsidiary
Guarantor under the Guarantee and Collateral Agreement constitute (i) “Priority
Lien Debt” (or any other term having a similar meaning) of such Subsidiary
Guarantor under and as defined in the High Yield Indentures (and any indenture
governing any Refinancing of the Existing Senior Notes or the High Yield Notes,
if applicable, and any indenture governing any Refinancing of any such
refinancing Indebtedness, if applicable) and (ii) “First Priority Obligations”
under and as defined in the Intercreditor Agreement.

 

SECTION 5. CONDITIONS PRECEDENT

 

5.1. Conditions to Effectiveness. This Agreement shall become effective on and
as of the first date on which the following conditions precedent shall have been
satisfied:

 

(a) Credit Agreement. The Administrative Agent shall have received this
Agreement, executed and delivered by the Administrative Agent, the Collateral
Agent, TWTC, the Borrower and each other Person listed on Schedule 1.1A.

 

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(b) Fees. The Lenders, the Administrative Agent and the Collateral Agent shall
have received all fees required to be paid, and all expenses for which invoices
(with reasonable supporting documentation) have been presented (including, if so
invoiced, the reasonable and documented fees and expenses of legal counsel), on
or before the Effective Date.

 

(c) Termination of Existing Credit Agreement. The Administrative Agent shall
have received evidence reasonably satisfactory to the Administrative Agent that
the commitments of the lenders party to the Existing Credit Agreement shall then
or theretofore have been terminated, all amounts then owing by TWTC or any
Subsidiary thereunder or under any other “Loan Document” (as therein defined)
shall have been paid in full, and arrangements reasonably satisfactory to the
Administrative Agent shall have been made for the termination of Liens and
security interests granted in connection therewith.

 

For purposes of determining compliance with the conditions specified in Section
5.1, each Lender shall be deemed to have consented to, approved or been
satisfied with each document, condition or other matter required thereunder to
be consented to, approved by or satisfactory to the Lenders unless the
Administrative Agent shall have received notice from such Lender prior to the
Effective Date specifying its objection thereto (unless such objection shall
have been withdrawn or satisfied and the Administrative Agent shall have
received notice from such Lender thereof). The Administrative Agent shall notify
the Borrower upon satisfaction (or, as herein provided, waiver) of the
conditions precedent to the Effective Date having occurred.

 

5.2. Conditions to Initial Extension of Credit. The agreement of each Lender to
make the initial extension of credit requested to be made by it is subject to
the satisfaction, prior to or concurrently with the making of such extension of
credit on the Initial Funding Date, of the following conditions precedent:

 

(a) Guarantee and Collateral Agreement. The Administrative Agent shall have
received (i) the Guarantee and Collateral Agreement, executed and delivered by
TWTC, the Borrower and each then-existing Subsidiary Guarantor (which, prior to
the earlier to occur of the Collateral Base Date and the Initial Funding Date,
may exclude any Specified Subsidiary and, thereafter, must include (unless the
Administrative Agent shall otherwise agree) each Specified Subsidiary existing
on the Effective Date other than Time Warner Telecom of Arizona LLC and Time
Warner Telecom of New Jersey, L.P.) and (ii) an Acknowledgment and Consent in
the form attached to the Guarantee and Collateral Agreement, executed and
delivered by each Issuer (as defined therein), if any, that is not a Loan Party
(other than a Specified Subsidiary, a Shell Subsidiary or an Immaterial
Subsidiary).

 

(b) Intercreditor Agreement. The Administrative Agent shall have received the
Intercreditor Agreement, executed and delivered by the Collateral Agent, the
Second Lien Trustee, TWTC, the Borrower and each then-existing Subsidiary
Guarantor.

 

(c) High Yield Notes. The Borrower shall have received the Net Cash Proceeds
(after giving effect to the payment of all related fees and expenses
contemplated to be paid at the time of issuance) from the issuance of at least
$440,000,000 of a combination of (i) the Second Lien Notes, in an aggregate
amount not to exceed $240,000,000, and (ii) the New Senior Notes, each

 

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on terms and conditions substantially as set forth in the final offering
memorandum, dated February 10, 2004.

 

(d) Approvals. All material governmental and third party approvals necessary or,
in the reasonable discretion of the Administrative Agent, advisable in
connection with the transactions contemplated hereby shall have been obtained
and be in full force and effect (except that no such approvals will have been
obtained with respect to any Specified Subsidiary or with respect to certain
real and personal property excluded from the Collateral under the Security
Documents by the terms thereof).

 

(e) Closing Certificate. The Administrative Agent shall have received, with a
counterpart for each Lender, a certificate of each then-existing Loan Party,
dated the Initial Funding Date, substantially in the form of Exhibit C, with
appropriate insertions and attachments.

 

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

 

(i) the legal opinion of Faegre & Benson LLP, counsel to TWTC and its
Subsidiaries, in form and substance reasonably satisfactory to the
Administrative Agent;

 

(ii) the legal opinion of Paul B. Jones, Esq., general counsel of TWTC and its
Subsidiaries, in form and substance reasonably satisfactory to the
Administrative Agent; and

 

(iii) the legal opinion of local counsel and of such other special counsel as
may be required by the Administrative Agent.

 

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

 

(g) Lien Searches. The Collateral Agent shall have received the results of a
recent Uniform Commercial Code lien search in each relevant jurisdiction with
respect to the assets to be owned by TWTC and its Subsidiaries as of the Initial
Funding Date, and such search shall reveal no liens on any of the assets of TWTC
or its Subsidiaries except for liens permitted by Section 7.3 or discharged on
or prior to the Initial Funding Date pursuant to documentation reasonably
satisfactory to the Collateral Agent.

 

(h) Pledged Stock; Stock Powers; Pledged Notes. The Collateral Agent shall have
received (i) the certificates representing the shares of Capital Stock to be
pledged pursuant to the Guarantee and Collateral Agreement on the Collateral
Base Date, together with an undated indorsement for each such certificate
executed in blank by an appropriate person and (ii) each promissory note (if
any) to be pledged to the Collateral Agent pursuant to the Guarantee and
Collateral Agreement on the Collateral Base Date, endorsed (without recourse) in
blank (or accompanied by an executed transfer form in blank) by the pledgor
thereof.

 

(i) Filings, Registrations and Recordings. Each document (including any Uniform
Commercial Code financing statement) required by the Security Documents or under
law or reasonably requested by the Collateral Agent to be filed, registered or
recorded in order to create in favor of the Collateral Agent a perfected Lien on
the Collateral described therein, prior and

 

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superior in right to any other Person (other than with respect to Liens
expressly permitted by Section 7.3), shall be in proper form for filing,
registration or recordation.

 

(j) Insurance. The Collateral Agent shall have received insurance certificates
satisfying the requirements of Section 5.2(b) of the Guarantee and Collateral
Agreement.

 

(k) Fees. The Lenders, the Collateral Agent and the Administrative Agent shall
have received all fees required to be paid, and all expenses for which invoices
(with reasonable supporting documentation) have been presented (including, if so
invoiced, the reasonable and documented fees and expenses of legal counsel), on
or before the Initial Funding Date.

 

(l) Intercompany Debt. All Indebtedness of the Borrower or any Subsidiary to
TWTC shall be evidenced by an Intercompany Subordinated Note.

 

(m) Pro Forma Balance Sheet; Financial Statements. The Lenders shall have
received (i) the Pro Forma Balance Sheet and (ii) the financial statements
referred to in Section 4.1(b).

 

(n) Other Documents. The Administrative Agent or the Collateral Agent shall have
received such other documents or materials (including, without limitation,
additional lien searches) as the Administrative Agent or the Collateral Agent
shall reasonably request.

 

For purposes of determining compliance with the conditions specified in Section
5.2, each Lender shall be deemed to have consented to, approved or been
satisfied with each document, condition or other matter required thereunder to
be consented to, approved by or satisfactory to the Lenders unless the
Administrative Agent shall have received notice from such Lender prior to the
Initial Funding Date specifying its objection thereto (unless such objection
shall have been withdrawn or satisfied and the Administrative Agent shall have
received notice from such Lender thereof). The Administrative Agent shall notify
the Borrower upon satisfaction (or, as provided herein, waiver) of the
conditions precedent to the Initial Funding Date having occurred.

 

Whether or not the conditions precedent described in this Section 5.2 have been
previously satisfied, TWTC will, or will cause its Subsidiaries to, complete and
provide each item described in Sections 5.2(a), (b), (h) and (i) to the
Administrative Agent and/or the Collateral Agent, as applicable, no later than
90 days after the Effective Date (the date on which all such items have actually
been so provided or completed herein being the “Collateral Base Date”);
provided, however, that the foregoing shall not obligate the Borrower to request
any Loan or Letter of Credit on the Collateral Base Date or otherwise.

 

5.3. Conditions to Each Extension of Credit. The agreement of each Lender to
make any extension of credit requested to be made by it on any date (including
its initial extension of credit, but excluding any Revolving Loans made to
refinance Swingline Loans or to refinance draws under Letters of Credit) is
subject to the satisfaction of the following conditions precedent:

 

(a) 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.

 

(b) 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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Each borrowing (but excluding any borrowing of Revolving Loans made to refinance
Swingline Loans or to refinance draws under Letters of Credit) by and issuance
of a Letter of Credit on behalf of the Borrower hereunder 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 5.3 have been satisfied.

 

SECTION 6. AFFIRMATIVE COVENANTS

 

TWTC (as to itself and its Subsidiaries) and the Borrower (as to itself and its
Subsidiaries) hereby severally agree that, so long as the Revolving Commitments
remain in effect, any Letter of Credit remains outstanding or any Loan or other
amount is owing to any Lender, the Collateral Agent or the Administrative Agent
hereunder, each of TWTC and the Borrower shall and shall cause each of its
respective Subsidiaries to:

 

6.1. Financial Statements. Furnish to the Administrative Agent for duplication
and distribution to the Lenders:

 

(a) as soon as available, but in any event within 95 days after the end of each
fiscal year of TWTC, a copy of the audited consolidated balance sheet of TWTC
and its consolidated Subsidiaries 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 for the previous
year, reported on without a “going concern” or like qualification or exception,
or qualification arising out of the scope of the audit, by Ernst & Young LLP or
other independent certified public accountants of nationally recognized
standing; and

 

(b) as soon as available, but in any event not later than 50 days after the end
of each of the first three quarterly periods of each fiscal year of TWTC, the
unaudited consolidated balance sheet of TWTC and its consolidated Subsidiaries
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 for the previous year, certified by a Responsible Officer as being
fairly stated in all material respects (subject to normal year-end adjustments).

 

All such financial statements, together with the notes thereto, shall be
complete and correct in all material respects and shall 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).

 

Any financial statement required to be delivered pursuant to this Section 6.1
shall be deemed to have been delivered on the date on which TWTC posts such
financial statement on its website on the Internet at www.twtelecom.com or when
such financial statement is posted on the SEC’s website on the Internet at
www.sec.gov; provided that TWTC shall give notice of any such posting to the
Administrative Agent (who shall then give notice of any such posting to the
Lenders); provided, further, that TWTC shall deliver paper copies of any
financial statement referred to in this Section 6.1 to the Administrative Agent
if the Administrative Agent or any Lender requests TWTC to deliver such paper
copies until written notice to cease delivering such paper copies is given by
the Administrative Agent.

 

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6.2. Certificates; Other Information. Furnish to the Administrative Agent for
duplication and distribution to the Lenders (or, in the case of clause (f), to
the relevant Lender):

 

(a) concurrently with the delivery of the financial statements referred to in
Section 6.1(a), a certificate of the independent certified public accountants
reporting on such financial statements stating that in making the examination
necessary therefor no knowledge was obtained of any Default or Event of Default,
except as specified in such certificate;

 

(b) concurrently with the delivery of any financial statements pursuant to
Section 6.1, (i) a certificate of a Responsible Officer stating that, to the
best of each such Responsible Officer’s knowledge, each Loan Party during such
period has observed or performed in all material respects 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 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 TWTC 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 TWTC, as the case may be, and (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
Effective Date);

 

(c) as soon as available, and in any event no later than 50 days after the end
of each fiscal year of TWTC, a detailed consolidated budget for the following
fiscal year (including a projected consolidated balance sheet of TWTC and its
Subsidiaries as of the end of the following fiscal year, the related
consolidated statements of projected cash flow and projected income and a
description of the underlying assumptions applicable thereto), and, as soon as
available, significant revisions, if any, of such budget and projections with
respect to such fiscal year (collectively, the “Projections”), which Projections
shall in each case be accompanied by a certificate of a Responsible Officer
stating that such Projections are based on reasonable estimates, information and
assumptions believed by TWTC to be reasonable at the time made and that such
Responsible Officer has no reason to believe that such Projections are incorrect
or misleading in any material respect (it being recognized by the Lenders that
such opinions, projections and forecasts as to any future event or state of
affairs are not to be viewed as factual information and that actual results
during the period or periods covered by any such opinion, projection or forecast
may differ from the opinions and projected or forecast results);

 

(d) no later than 5 Business Days prior to the effectiveness thereof, copies of
substantially final drafts of any proposed amendment, supplement, waiver or
other modification with respect to any Indenture (or any indenture governing any
Refinancing of the Existing Senior Notes or the High Yield Notes or any
indenture governing any Refinancing of any such refinancing Indebtedness);

 

(e) within five days after the same are sent, copies of all financial statements
and reports that TWTC 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, copies of all financial statements and reports that TWTC or the
Borrower may make to, or file with, the SEC; and

 

(f) promptly, such additional financial and other information as any Lender may
from time to time reasonably request through the Administrative Agent.

 

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Any delivery required to be made pursuant to Section 6.2(e) shall be deemed to
have been made on the date on which TWTC posts such delivery on its website on
the Internet at www.twtelecom.com or when such delivery is posted on the SEC’s
website on the Internet at www.sec.gov; provided that TWTC shall give notice of
any such posting to the Administrative Agent (who shall then give notice of any
such posting to the Lenders); provided, further, that TWTC shall deliver paper
copies of any delivery referred to in Section 6.2(e) to the Administrative Agent
if the Administrative Agent or any Lender requests TWTC to deliver such paper
copies until written notice to cease delivering such paper copies is given by
the Administrative Agent.

 

6.3. 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
TWTC or its Subsidiaries, as the case may be.

 

6.4. Maintenance of Existence; Compliance. (a)(i) Preserve, renew and keep in
full force and effect its corporate 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 7.4 and except, in the case of clause (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.

 

6.5. Maintenance of Property; Insurance. (a) Keep all material property 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 material 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.

 

6.6. 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 dealings
and transactions in relation to its business and activities and (b) permit
representatives of any Lender 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 notice and as often as may reasonably be desired and to
discuss the business, operations, properties and financial and other condition
of TWTC and its Subsidiaries with officers and employees of TWTC and its
Subsidiaries and, from and after the occurrence and during the continuance of an
Event of Default, with its independent certified public accountants.

 

6.7. Notices. Promptly give notice to the Administrative Agent of:

 

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

 

(b) any (i) default or event of default under any Contractual Obligation of TWTC
or any of its Subsidiaries or (ii) litigation, investigation or proceeding that
may exist at any time between TWTC or any of its Subsidiaries and any
Governmental Authority, that in either case could reasonably be expected to have
a Material Adverse Effect;

 

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(c) any litigation or proceeding affecting TWTC or any of its Subsidiaries (i)
in which the amount involved is $5,000,000 or more and not covered by insurance,
(ii) in which injunctive or similar relief is sought or (iii) which relates to
any Loan Document;

 

(d) the following events, as soon as possible and in any event within 30 days
after a Responsible Officer knows or has reason to know thereof: (i) the
occurrence of any Reportable Event with respect to any Plan, a failure by the
Borrower or any Commonly Controlled Entity 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; provided that in the case of either
clause (i) or (ii) above, such event or events could reasonably be expected to
result in liability in excess of $5,000,000;

 

(e) the occurrence of any event which could reasonably be expected to have a
material adverse effect on the aggregate value of the Collateral; 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 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action TWTC or the relevant Subsidiary proposes to take
with respect thereto.

 

6.8. Environmental Laws. (a) Comply in all material respects with, and use its
reasonable efforts to 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 use its reasonable
efforts to 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, except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect.

 

(b) Conduct and complete all investigations, studies, sampling and testing, and
all remedial, removal and other actions required under Environmental Laws and
promptly comply in all material respects with all lawful orders and directives
of all Governmental Authorities regarding Environmental Laws, except to the
extent that the same are being contested in good faith by appropriate
proceedings and the pendency of such proceedings could not reasonably be
expected to have a Material Adverse Effect.

 

6.9. Additional Collateral; Additional Subsidiary Guarantors, etc. (a) With
respect to any property located or held in the United States acquired after the
Collateral Base Date by any of TWTC’s Domestic Subsidiaries (other than (x) any
property described in paragraph (b), (c), (d) or (e) below, (y) any property
subject to a Lien expressly permitted by Section 7.3(g) and (z) any property
acquired by any Shell Subsidiary, Immaterial Subsidiary or Specified Subsidiary)
as to which the Collateral Agent does not have a perfected Lien, promptly (i)
execute and deliver to the Collateral Agent such amendments to the Guarantee and
Collateral Agreement or such other documents as the Collateral Agent reasonably
deems necessary or advisable to grant to the Collateral Agent a security
interest in such property, (ii) take all actions reasonably necessary or
advisable to grant to the Collateral Agent a perfected first priority security
interest in such property, including the filing of Uniform Commercial Code
financing statements

 

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in such jurisdictions in the United States as may be required by the Guarantee
and Collateral Agreement or by law or as may be reasonably requested by the
Collateral Agent and (iii) if reasonably requested by the Collateral Agent (and
consistent with the opinion coverage provided on the Collateral Base Date),
deliver to the Collateral Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Collateral Agent.

 

(b) With respect to any interest in any real property (fee, leasehold or
otherwise) located in the United States having a value (together with
improvements thereof) of at least $7,500,000 (net of any amount of any third
party mortgage on such property existing when acquired) acquired after the
Collateral Base Date (and no real property not meeting such criteria shall be
required to be pledged under this Section 6.9) by any of TWTC’s Domestic
Subsidiaries (other than (x) any such real property subject to a Lien expressly
permitted by Section 7.3(g) and (y) any real property acquired by any Shell
Subsidiary, Immaterial Subsidiary or Specified Subsidiary), promptly (i) execute
and deliver a first priority mortgage or deed of trust, as the case may be, in
form and substance reasonably satisfactory to the Collateral Agent, in favor of
the Collateral Agent covering such real property, (ii) if reasonably requested
by the Collateral 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 Collateral Agent) as well as a current ALTA or
equivalent survey thereof, together with a surveyor’s certificate and (y) any
consents or estoppels reasonably deemed necessary or advisable by the Collateral
Agent in connection with such mortgage or deed of trust, each of the foregoing
in form and substance reasonably satisfactory to the Collateral Agent and (iii)
if reasonably requested by the Collateral Agent, deliver to the Collateral Agent
legal opinions relating to the matters described above, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to the
Collateral Agent.

 

(c) With respect to any new Domestic Subsidiary (other than a Shell Subsidiary,
an Immaterial Subsidiary or a Specified Subsidiary) created or acquired after
the Collateral Base Date by TWTC or any of its Subsidiaries (which, for the
purposes of this paragraph (c), shall include any then-existing Foreign
Subsidiary that becomes a Domestic Subsidiary, and which is not a Shell
Subsidiary, an Immaterial Subsidiary or a Specified Subsidiary, and any
then-existing Domestic Subsidiary that ceases to be a Shell Subsidiary, an
Immaterial Subsidiary or a Specified Subsidiary), promptly (i) cause such new
Subsidiary (A) to become a party to the Guarantee and Collateral Agreement and
the Intercreditor Agreement, (B) to take such actions reasonably necessary or
advisable to grant to the Collateral Agent a perfected first priority security
interest in the Collateral described in the Guarantee and Collateral Agreement
(other than the property described in paragraph (d) below) with respect to such
new Subsidiary, including the filing of Uniform Commercial Code financing
statements in such jurisdictions in the United States as may be required by the
Guarantee and Collateral Agreement or by law or as may be reasonably requested
by the Collateral Agent and (C) to deliver to the Collateral Agent a certificate
of such Subsidiary, substantially in the form of Exhibit C, with appropriate
insertions and attachments, and (ii) if reasonably requested by the Collateral
Agent (and consistent with the opinion coverage provided on the Collateral Base
Date), deliver to the Collateral Agent legal opinions relating to the matters
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Collateral Agent.

 

(d) With respect to any new Subsidiary (other than a Specified Subsidiary)
created or acquired after the Collateral Base Date by TWTC or any of its
Domestic Subsidiaries, promptly (i) execute and deliver to the Collateral Agent
such amendments to the Guarantee and Collateral Agreement as the Collateral
Agent reasonably deems necessary or advisable to grant to the

 

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Collateral Agent a perfected first priority security interest in the Capital
Stock of such new Subsidiary that is owned by TWTC or any of its Domestic
Subsidiaries (provided that in no event shall more than 65% of the total
outstanding Capital Stock of any Foreign Subsidiary be required to be so
pledged), (ii) deliver to the Collateral Agent the certificates representing
such Capital Stock, together with undated indorsements, in blank, executed and
delivered by an appropriate person of TWTC or such Subsidiary, as the case may
be, and take such other action as may be necessary or, in the opinion of the
Collateral Agent, desirable to perfect the Collateral Agent’s security interest
therein, and (iii) if reasonably requested by the Collateral Agent (and
consistent with the opinion coverage provided on the Collateral Base Date),
deliver to the Collateral Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Collateral Agent.

 

(e) With respect to any Specified Subsidiary, (A) (i) use commercially
reasonable efforts to obtain necessary regulatory approvals in order to permit
TWTC or a Domestic Subsidiary thereof, as the case may be, to grant a security
interest in the Capital Stock of such Specified Subsidiary and (ii) if, as and
when such approvals are obtained, use commercially reasonable efforts to (x)
execute and deliver to the Collateral Agent such amendments to the Guarantee and
Collateral Agreement as the Collateral Agent reasonably deems necessary or
advisable to grant to the Collateral Agent a perfected first priority security
interest in the Capital Stock of such Specified Subsidiary that is owned by TWTC
or any of its Domestic Subsidiaries (provided that in no event shall more than
65% of the total outstanding Capital Stock of any Foreign Subsidiary be required
to be so pledged) and (y) deliver to the Collateral Agent the certificates
representing such Capital Stock, together with undated indorsements, in blank,
executed and delivered by TWTC or such Subsidiary, as the case may be, and take
such other action as may be reasonably necessary or, in the opinion of the
Collateral Agent, desirable to perfect the Collateral Agent’s security interest
therein; (B) unless such Specified Subsidiary is a Foreign Subsidiary, Shell
Subsidiary or Immaterial Subsidiary, (i) use commercially reasonable efforts to
obtain necessary regulatory approvals in order to permit such Specified
Subsidiary to become a party to the Guarantee and Collateral Agreement and the
Intercreditor Agreement and (ii) if, as and when such approvals are obtained,
use commercially reasonable efforts (x) to cause such Specified Subsidiary to
become a party to the Guarantee and Collateral Agreement and the Intercreditor
Agreement, (y) to take such actions reasonably necessary or advisable to grant
to the Collateral Agent a perfected first priority security interest in the
Collateral described in the Guarantee and Collateral Agreement with respect to
such Specified Subsidiary, including the filing of Uniform Commercial Code
financing statements in such jurisdictions in the United States as may be
required by the Guarantee and Collateral Agreement or by law or as may be
reasonably requested by the Collateral Agent and (z) to deliver to the
Collateral Agent a certificate of such Specified Subsidiary, substantially in
the form of Exhibit C, with appropriate insertions and attachments; and (C) if
reasonably requested by the Collateral Agent (and consistent with the opinion
coverage provided on the Collateral Base Date), deliver to the Collateral Agent
legal opinions relating to the matters described above, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to the
Collateral Agent.

 

SECTION 7. NEGATIVE COVENANTS

 

TWTC (as to itself and its Subsidiaries) and the Borrower (as to itself and its
Subsidiaries) hereby severally agree that, so long as the Revolving Commitments
remain in effect, any Letter of Credit remains outstanding or any Loan or other
amount is owing to any Lender, the Collateral

 

49

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Agent or the Administrative Agent hereunder, each of TWTC and the Borrower shall
not, and shall not permit any of its respective Subsidiaries to, directly or
indirectly:

 

7.1. Financial Condition Covenants.

 

(a) Consolidated Senior First Lien Secured Leverage Ratio. Permit the
Consolidated Senior First Lien Secured Leverage Ratio as of the last day of any
fiscal quarter of TWTC to exceed 1.00 to 1.0.

 

(b) Consolidated Total Leverage Ratio. Permit the Consolidated Total Leverage
Ratio as of the last day of any fiscal quarter of TWTC set forth below to exceed
the ratio set forth below opposite such fiscal quarter:

 

Fiscal Quarter

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

  

Consolidated Total

Leverage Ratio

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

March 31, 2004

   6.25 to 1.0

June 30, 2004 – September 30, 2004

   6.00 to 1.0

December 31, 2004 – March 31, 2005

   5.75 to 1.0

June 30, 2005 – September 30, 2005

   5.50 to 1.0

December 31, 2005

   5.25 to 1.0

March 31, 2006 – December 31, 2008

   5.00 to 1.0

 

(c) Consolidated Interest Coverage Ratio. Permit the Consolidated Interest
Coverage Ratio for any period of four consecutive fiscal quarters of TWTC ending
with any fiscal quarter set forth below to be less than the ratio set forth
below opposite such fiscal quarter:

 

Fiscal Quarter

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

  

Consolidated Interest Coverage

Ratio

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

March 31, 2004 – June 30, 2004

   1.25 to 1.0

September 30, 2004 – March 31, 2005

   1.50 to 1.0

June 30, 2005 – December 31, 2005

   1.75 to 1.0

March 31, 2006 – December 31, 2008

   2.00 to 1.0

 

Notwithstanding anything to the contrary herein, the covenants contained in this
Section 7.1 shall only apply when there are extensions of credit (including,
without limitation, any Revolving Loans, Letters of Credit or Swingline Loans)
outstanding hereunder; provided, that upon the making of any such extension of
credit, TWTC and the Borrower shall be in compliance with the covenants
contained in this Section 7.1 as of the end of the immediately preceding fiscal
quarter for which financial statements have been furnished under Section 6 of
this Agreement and immediately after giving effect to such extension of credit
(and to the application of the proceeds thereof).

 

7.2. Indebtedness. Create, issue, incur, assume, become liable in respect of or
suffer to exist any Indebtedness, except:

 

(a) Indebtedness of any Loan Party pursuant to any Loan Document;

 

(b) unsecured Indebtedness of the Borrower to any Subsidiary and of any Wholly
Owned Subsidiary Guarantor to the Borrower or any other Subsidiary;

 

50

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(c) unsecured Indebtedness of any Subsidiary to TWTC that arises from the making
of payments by TWTC to a third party on behalf of the Borrower or its
Subsidiaries related to ordinary course expenses of the Borrower and its
Subsidiaries;

 

(d) Guarantee Obligations incurred in the ordinary course of business (i) by the
Borrower or any other Subsidiary of TWTC of obligations of any Wholly Owned
Subsidiary Guarantor and (ii) by TWTC of obligations of its Subsidiaries with
respect to (x) such Subsidiaries’ real estate leases or (y) such Subsidiaries’
obligations under agreements with municipalities or building entry agreements,
in each case entered into in the ordinary course of business;

 

(e) Indebtedness outstanding on the Effective Date and listed on Schedule
7.2(e), together with any Refinancings thereof (other than in respect of the
Existing Senior Notes, which Refinancings shall be governed by Section 7.9), so
long as there is no additional obligor with respect thereto and without
shortening the maturity thereof or increasing the principal amount thereof,
except to the extent of fees and expenses incurred in connection with any such
Refinancing;

 

(f) Indebtedness (including, without limitation, Capital Lease Obligations)
secured by Liens permitted by Section 7.3(g) in an aggregate principal amount
not to exceed $30,000,000 at any one time outstanding;

 

(g) Hedge Agreements (i) with any Lender or any Affiliate of any Lender and (ii)
with any Person other than a Lender or any Affiliate of any Lender so long as
the aggregate obligations under all such Hedge Agreements with such other
Persons (measured in terms of termination value) do not exceed $25,000,000 at
any one time outstanding, and in each case so long as such Hedge Agreements are
not entered into for speculative purposes;

 

(h) Cash Management Obligations incurred in the ordinary course of business;

 

(i) Indebtedness of any Subsidiary acquired in connection with any Investment
permitted pursuant to Section 7.8(h), provided that (i) no Default or Event of
Default has occurred and is continuing or would result therefrom, (ii) such
Indebtedness existed at the time such Person became a Subsidiary and was not
incurred in anticipation thereof, (iii) no Person other than such Subsidiary
becomes an obligor in respect of such Indebtedness and (iv) the aggregate amount
of such Indebtedness in excess of $20,000,000 shall constitute usage of the
basket provided in Section 7.8(h) unless and until such Subsidiary becomes a
Wholly Owned Subsidiary Guarantor, at which time such Indebtedness of such
Subsidiary in excess of $20,000,000 shall no longer be permitted to remain
outstanding and shall no longer constitute usage of such basket;

 

(j) unsecured Indebtedness consisting of guaranties of loans made to officers,
directors or employees of TWTC or of any Subsidiary of TWTC in an aggregate
amount which, when added to the outstanding principal amount of loans and
advances made pursuant to Section 7.8(d), shall not exceed $5,000,000 at any one
time outstanding;

 

(k) unsecured Indebtedness of TWTC to the Borrower or any other Subsidiary in
connection with dividends, distributions or advancements made pursuant to clause
(b), (c), (d), (e), (f) or (g) of Section 7.6;

 

(l) unsecured Indebtedness of the Borrower or of any Wholly Owned Subsidiary
Guarantor to TWTC evidenced by an Intercompany Subordinated Note;

 

51

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(m) unsecured trade accounts payable of TWTC, the Borrower or any of their
respective Subsidiaries incurred in the ordinary course of business and not more
than 120 days past due (but excluding any Indebtedness for borrowed money);

 

(n) reimbursement obligations of TWTC, the Borrower or any of their respective
Subsidiaries incurred in the ordinary course of business related to performance
bonds posted in connection with the installation of fiber facilities and similar
activities in an aggregate amount not to exceed $30,000,000 at any one time
outstanding;

 

(o) (i) Indebtedness of the Borrower in respect of the High Yield Notes in an
aggregate principal amount not to exceed $440,000,000 and (ii) Guarantee
Obligations of TWTC and any Subsidiary Guarantor in respect of such
Indebtedness;

 

(p) letters of credit incurred in the ordinary course of business in an
aggregate amount which, when added to the aggregate amount of L/C Obligations
then outstanding, shall not exceed $25,000,000;

 

(q) (i) Indebtedness of the Borrower in an aggregate principal amount not to
exceed $360,000,000 at any one time outstanding, so long as (a) no Default or
Event of Default has occurred and is continuing or would result therefrom, (b)
the Net Cash Proceeds thereof shall be (x) used to Refinance, in whole or in
part, the Existing Senior Notes (or any refinancing Indebtedness thereof) in
accordance with Section 7.9 or (y) retained by the Borrower in order to
effectuate a substantially concurrent redemption or repurchase of any Existing
Senior Notes (or any refinancing Indebtedness thereof) in accordance with the
last sentence of Section 7.9 (provided that, in the case of this clause (y),
such Indebtedness shall meet the criteria of refinancing Indebtedness described
in Section 7.9(a)) and (c) after giving effect to the incurrence of such
Indebtedness, TWTC shall be in pro forma compliance with the covenants contained
in Section 7.1 to the extent such covenants are then in effect; and (ii)
Guarantee Obligations of TWTC and any Subsidiary Guarantor in respect of such
Indebtedness;

 

(r) unsecured Indebtedness of TWTC (but not any Subsidiary of TWTC) so long as
(i) no Default or Event of Default has occurred and is continuing or would
result therefrom, (ii) the Net Cash Proceeds thereof shall be (x) used to
Refinance, in whole or in part, the Existing Senior Notes or the High Yield
Notes (or any refinancing Indebtedness thereof) in accordance with Section 7.9
or (y) retained by TWTC in order to effectuate a substantially concurrent
redemption or repurchase of any Existing Senior Notes or any High Yield Notes
(or any refinancing Indebtedness thereof) in accordance with the last sentence
of Section 7.9 (provided that, in the case of this clause (y), such Indebtedness
shall meet the criteria of refinancing Indebtedness described in Section 7.9(a))
and (iii) after giving effect to the incurrence of such Indebtedness, TWTC shall
be in pro forma compliance with the covenants contained in Section 7.1 to the
extent such covenants are then in effect;

 

(s) (i) Indebtedness of the Borrower so long as (a) no Default or Event of
Default has occurred and is continuing or would result therefrom, (b) the Net
Cash Proceeds thereof shall be (x) used to Refinance, in whole or in part, the
High Yield Notes (or any refinancing Indebtedness thereof) in accordance with
Section 7.9 or (y) retained by the Borrower in order to effectuate a
substantially concurrent redemption or repurchase of any High Yield Notes (or
any refinancing Indebtedness thereof) in accordance with the last sentence of
Section 7.9 (provided that, in the case of this clause (y), such Indebtedness
shall meet the criteria of refinancing Indebtedness described in Section 7.9(a))
and (c) after giving effect to the incurrence of such Indebtedness,

 

52

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TWTC shall be in pro forma compliance with the covenants contained in Section
7.1 to the extent such covenants are then in effect; and (ii) Guarantee
Obligations of TWTC and any Subsidiary Guarantor in respect of such
Indebtedness;

 

(t) unsecured Indebtedness of TWTC (but not any Subsidiary of TWTC) in an
aggregate principal amount not to exceed $350,000,000 at any one time
outstanding, so long as (i) no Default or Event of Default has occurred and is
continuing or would result therefrom, (ii) such Indebtedness shall not mature
prior to the date that is one year after the Initial Revolving Termination Date,
(iii) the Net Cash Proceeds thereof shall be contributed to the Borrower as
either equity or debt to the extent TWTC has cash and Cash Equivalents in excess
of $25,000,000 in the aggregate (provided that to the extent contributed as
debt, such debt shall be evidenced by an Intercompany Subordinated Note) and
(iv) after giving effect to the incurrence of such Indebtedness, TWTC shall be
in pro forma compliance with the covenants contained in Section 7.1 to the
extent such covenants are then in effect; and

 

(u) additional Indebtedness of the Borrower or any of its Subsidiaries in an
aggregate principal amount (for the Borrower and all Subsidiaries) not to exceed
$30,000,000 at any one time outstanding.

 

7.3. Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, whether now owned or hereafter acquired, except for:

 

(a) Liens for taxes not yet due or that are being contested in good faith by
appropriate proceedings, provided that adequate reserves with respect thereto
are maintained on the books of TWTC, the Borrower or their respective
Subsidiaries, as the case may be, in conformity with GAAP;

 

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business that are not overdue for a
period of more than 30 days or that are being contested in good faith by
appropriate proceedings;

 

(c) pledges or deposits in connection with workers’ compensation, unemployment
insurance and other social security legislation and deposits securing liability
to insurance carriers under insurance or self-insurance arrangements;

 

(d) deposits (i) to secure the performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business and (ii) to cash collateralize letters of credit
incurred in the ordinary course of business in an amount not to exceed
$25,000,000 in the aggregate;

 

(e) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business that, in the aggregate, are not
substantial in amount and that do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of TWTC, the Borrower or any of their respective
Subsidiaries;

 

(f) Liens in existence on the date hereof listed on Schedule 7.3(f), securing
Indebtedness permitted by Section 7.2(e), provided that no such Lien is spread
to cover any additional property after the Effective Date (other than after
acquired title in or on such property and proceeds of the

 

53

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existing collateral in accordance with the instrument creating such Lien) and
that the amount of Indebtedness secured thereby is not increased, except to the
extent of fees and expenses incurred in connection with any Refinancings of such
Indebtedness;

 

(g) Liens securing Indebtedness of the Borrower or any other Subsidiary incurred
pursuant to Section 7.2(f) to finance the acquisition of fixed or capital
assets, provided that (i) such Liens shall be created substantially
simultaneously with the acquisition of such fixed or capital assets, (ii) such
Liens do not at any time encumber any property other than the property financed
by such Indebtedness and (iii) the amount of Indebtedness secured thereby is not
increased;

 

(h) Liens created pursuant to the Security Documents;

 

(i) any interest or title of a lessor under any lease entered into by TWTC, the
Borrower or any other Subsidiary in the ordinary course of its business and
covering only the assets so leased;

 

(j) Liens on the property or assets of a Person which becomes a Subsidiary after
the date hereof securing Indebtedness permitted by Section 7.2(i), provided that
(i) such Liens existed at the time such Person became a Subsidiary and were not
created in anticipation thereof, (ii) any such Lien is not expanded to cover any
property or assets of such Person after the time such Person becomes a
Subsidiary (other than after acquired title in or on such property and proceeds
of the existing collateral in accordance with the instrument creating such
Lien), (iii) the amount of Indebtedness secured thereby is not increased, and
(iv) neither (x) the aggregate outstanding principal amount of the obligations
secured thereby nor (y) the aggregate fair market value (determined as of the
date such Lien is incurred) of the assets subject thereto exceeds (as to all
relevant Subsidiaries) $20,000,000 at any one time;

 

(k) Liens on assets of TWTC, the Borrower and any Subsidiary Guarantor securing
the Second Lien Notes; provided that the Collateral Agent has a first priority
Lien on such assets pursuant to the Security Documents (including, without
limitation, the Intercreditor Agreement);

 

(l) Liens on assets of TWTC, the Borrower and any Subsidiary Guarantor securing
Indebtedness permitted by Section 7.2(q); provided that the Collateral Agent has
a first priority Lien on such assets pursuant to the Security Documents
(including, without limitation, the Intercreditor Agreement);

 

(m) Liens on assets of TWTC, the Borrower and any Subsidiary Guarantor securing
Indebtedness permitted by Section 7.2(s); provided that (i) the Collateral Agent
has a first priority Lien on such assets pursuant to the Security Documents
(including, without limitation, the Intercreditor Agreement) and (ii) the
aggregate outstanding principal amount of the Indebtedness secured thereby does
not exceed $240,000,000 at any one time; and

 

(n) Liens not otherwise permitted by this Section so long as neither (i) the
aggregate outstanding principal amount of the obligations secured thereby nor
(ii) the aggregate fair market value (determined as of the date such Lien is
incurred) of the assets subject thereto exceeds (as to TWTC and all
Subsidiaries) $5,000,000 at any one time.

 

54

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7.4. Fundamental Changes. Enter into any merger, consolidation or amalgamation,
or liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or Dispose of, all or substantially all of its property or
business, except that:

 

(a) any Subsidiary of TWTC may be merged or consolidated with or into the
Borrower (provided that the Borrower shall be the continuing or surviving
corporation) or with or into any Wholly Owned Subsidiary Guarantor (provided
that the Wholly Owned Subsidiary Guarantor shall be the continuing or surviving
corporation);

 

(b) any Subsidiary of TWTC may Dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to the Borrower or any Wholly Owned
Subsidiary Guarantor; and

 

(c) any Shell Subsidiary may be dissolved.

 

7.5. Disposition of Property. Dispose of any of its property, whether now owned
or hereafter acquired, or issue or sell any shares of its Capital Stock to any
Person, except:

 

(a) the Disposition of obsolete or worn out property in the ordinary course of
business;

 

(b) the sale of inventory in the ordinary course of business; the Disposition of
cash and Cash Equivalents for fair value; the license of intellectual property
in the ordinary course of business; and leases and subleases with respect to
excess capacity and not materially interfering with the ordinary conduct of
business;

 

(c) Dispositions permitted by Section 7.4(b);

 

(d) Dispositions of assets of TWTC or any Subsidiary to any other Subsidiary
having a fair market value not to exceed $5,000,000 in the aggregate for any
fiscal year of TWTC;

 

(e) the sale or issuance of TWTC’s common stock or preferred stock (including in
each case convertible stock subject to the specific restriction on convertible
stock below) to any Person, provided that (i) the Net Cash Proceeds thereof
shall be (x) used to redeem or repurchase Indebtedness to the extent permitted
under Section 7.9 or (y) contributed to the Borrower as either equity or debt to
the extent TWTC has cash and Cash Equivalents in excess of $25,000,000 in the
aggregate (provided that to the extent contributed as debt, such debt shall be
evidenced by an Intercompany Subordinated Note), (ii) if such issuance relates
to convertible stock, the Net Cash Proceeds thereof shall be used only to redeem
or repurchase Indebtedness of TWTC to the extent permitted under Section 7.9 and
(iii) if such preferred stock constitutes Cash Pay Preferred Stock, it shall be
issued in compliance with Section 7.2;

 

(f) the sale or issuance of any Subsidiary’s Capital Stock to TWTC, the Borrower
or any Wholly Owned Subsidiary Guarantor;

 

(g) any Exchange by TWTC and its Subsidiaries, provided that (i) on the date of
such Exchange, no Default or Event of Default shall have occurred and be
continuing or would result therefrom, (ii) the assets received in connection
with such Exchange shall be received by a Wholly Owned Subsidiary Guarantor and
(iii) in the event that any cash consideration is paid or received by TWTC or
any of its Subsidiaries in connection with such Exchange, then (a) the payment
of any such cash is permitted by Section 7.7 or Section 7.8(h), as applicable
and in

 

55

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accordance with GAAP, and (b) the Disposition related to the receipt of any such
cash is permitted by Section 7.5(h); and

 

(h) the Disposition of other property having a fair market value not to exceed
(as to TWTC and all Subsidiaries) $50,000,000 in the aggregate for any fiscal
year of TWTC.

 

7.6. Restricted Payments. Declare or pay any dividend (other than dividends
payable solely in common stock or Non-Cash Pay Preferred Stock of the Person
making such dividend) on, or make any payment on account of, or set apart assets
for a sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Capital Stock of TWTC or any Subsidiary,
whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, or make any payment on account of any
advance or loan made by TWTC or any Subsidiary, whether in cash or property or
in obligations of TWTC or any Subsidiary (collectively, “Restricted Payments”),
except that:

 

(a) any Subsidiary may make Restricted Payments to the Borrower or any Wholly
Owned Subsidiary Guarantor;

 

(b) so long as no Event of Default shall have occurred and be continuing or
would result therefrom, the Borrower or any other Subsidiary may pay dividends
(or make distributions or advancements) to TWTC to permit TWTC to purchase
TWTC’s common stock or common stock options from present or former officers or
employees of TWTC, the Borrower or any other Subsidiary upon the death,
disability or termination of employment of such officer or employee, provided,
that the aggregate amount of payments under this Section 7.6(b) after the
Effective Date (net of any proceeds received by TWTC and contributed to the
Borrower after the Effective Date in connection with resales of any common stock
or common stock options so purchased) shall not exceed $5,000,000;

 

(c) the Borrower or any other Subsidiary may pay dividends (or make
distributions or advancements) to TWTC for the purpose of enabling TWTC to make
scheduled interest payments (or, if applicable, dividends) in respect of any
Indebtedness of TWTC incurred pursuant to Section 7.2(t), provided that (i) no
Default or Event of Default shall have occurred and be continuing or would
result therefrom and (ii) each such payment shall be made no earlier than three
Business Days prior to the date the relevant interest payment or dividend
payment, as the case may be, is due;

 

(d) the Borrower or any other Subsidiary may pay dividends (or make
distributions or advancements) to TWTC for the purpose of enabling TWTC (i) to
redeem or repurchase any of the Existing Senior Notes in accordance with the
last sentence of Section 7.9 or (ii) to make scheduled interest payments (or, if
applicable, dividends) in respect of the Existing Senior Notes (or any
Indebtedness of TWTC incurred pursuant to Section 7.2(r) to Refinance the
Existing Senior Notes or the High Yield Notes (or any refinancing Indebtedness
thereof)) and other Indebtedness of TWTC that is senior and is incurred pursuant
to Section 7.2(t), provided that (a) no Default under Section 8(a) or 8(e)(i) or
(ii) or Event of Default shall have occurred and be continuing or would result
therefrom and (b) each such payment shall be made no earlier than three Business
Days prior to the date the relevant interest payment or dividend payment, as the
case may be, is due;

 

(e) so long as no Default or Event of Default shall have occurred and be
continuing or would result therefrom, the Borrower or any other Subsidiary may
pay dividends (or make

 

56

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distributions or advancements) to TWTC for the purpose of enabling TWTC to
finance Investments permitted by Section 7.8(g) in an aggregate amount not to
exceed the amount of Net Cash Proceeds previously contributed to the Borrower
from any issuance or sale of TWTC’s common stock or Non-Cash Pay Preferred
Stock;

 

(f) so long as no Default or Event of Default shall have occurred and be
continuing or would result therefrom, the Borrower or any other Subsidiary may
pay dividends (or make distributions or advancements) to TWTC to permit TWTC to
make payments to a third party on behalf of the Borrower or its Subsidiaries
related to ordinary course expenses of the Borrower and its Subsidiaries; and

 

(g) the Borrower or any other Subsidiary may pay dividends (or make
distributions or advancements) to TWTC to permit TWTC to (i) pay customary
corporate overhead expenses incurred in the ordinary course of business and (ii)
pay any taxes that are due and payable by TWTC and the Borrower or any of their
respective Subsidiaries as part of a consolidated group.

 

7.7. Capital Expenditures. Unless there are no extensions of credit outstanding
hereunder, make or commit to make any Capital Expenditure, except Capital
Expenditures of TWTC and its Subsidiaries in the ordinary course of business not
exceeding for any fiscal year of TWTC set forth below the dollar amount set
forth below opposite such fiscal year:

 

Fiscal Year

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

   Amount

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

2004

   $ 250,000,000

2005

   $ 250,000,000

2006

   $ 375,000,000

2007

   $ 375,000,000

2008

   $ 375,000,000

 

provided, that (i) up to $150,000,000 of any such amount referred to above, if
not so expended in the fiscal year for which it is permitted, may be carried
over for expenditure in the next succeeding fiscal year, (ii) up to $25,000,000
of any such amount referred to above may be carried back for expenditure in the
immediately preceding fiscal year and (iii) Capital Expenditures made pursuant
to this Section 7.7 during any fiscal year shall be deemed made, first, in
respect of amounts carried over from the prior fiscal year pursuant to subclause
(i) above, second, in respect of amounts permitted for such fiscal year as
provided above and, third, in respect of amounts carried back from the next
succeeding fiscal year pursuant to subclause (ii) above.

 

7.8. Investments. Make any advance, loan, extension of credit (by way of
guaranty or otherwise) or capital contribution to, or purchase any Capital
Stock, bonds, notes, debentures or other debt securities of, or any assets
constituting a business unit of, or make any other investment in, any Person
(all of the foregoing, “Investments”), except:

 

(a) extensions of trade credit in the ordinary course of business;

 

(b) Investments in Cash Equivalents (provided that to the extent an existing
investment in Cash Equivalents ceases to qualify as such, TWTC and its
Subsidiaries shall have 10 days to reinvest such amount in Cash Equivalents);

 

(c) Guarantee Obligations permitted by Section 7.2;

 

57

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(d) loans and advances to officers, directors or employees of TWTC or any
Subsidiary of TWTC in the ordinary course of business (including for travel,
entertainment and relocation expenses) in an aggregate amount for TWTC or any
Subsidiary of TWTC which, when added to the outstanding principal amount of
Indebtedness incurred pursuant to Section 7.2(j), shall not exceed $5,000,000 at
any one time outstanding;

 

(e) intercompany Investments (i) by TWTC or any of its Subsidiaries in the
Borrower or any Person that, prior to such investment, is a Wholly Owned
Subsidiary Guarantor and (ii) by TWTC in any Subsidiary in connection, in the
case of this clause (ii), with Indebtedness incurred under Section 7.2(c);

 

(f) Investments by the Borrower or any other Subsidiary in TWTC in connection
with dividends, distributions or advancements made pursuant to clauses (b), (c),
(d), (e), (f) or (g) of Section 7.6;

 

(g) Investments by TWTC in any Person that is or concurrently therewith becomes
a Wholly Owned Subsidiary Guarantor (i) in an aggregate amount equal to the Net
Cash Proceeds received from any issuance or sale of TWTC’s common stock or
Non-Cash Pay Preferred Stock and (ii) to the extent the consideration therefor
consists solely of Capital Stock of TWTC, provided, that (a) no Default or Event
of Default shall have occurred and be continuing or would result therefrom and
(b) TWTC shall be in pro forma compliance with the covenants contained in
Section 7.1 to the extent such covenants are then in effect; and

 

(h) in addition to Investments otherwise expressly permitted by this Section,
Investments by the Borrower or any of its Subsidiaries in an aggregate amount
(valued at cost) not to exceed $75,000,000 during the term of this Agreement.

 

7.9. Optional Payments, Refinancings and Modifications of Certain Debt
Instruments. (a) Make or offer to make any optional or voluntary payment,
prepayment, repurchase or redemption of or otherwise optionally or voluntarily
defease or segregate funds with respect to the High Yield Notes, the Existing
Senior Notes or other Indebtedness of TWTC permitted by Section 7.2(t) (or with
respect to any Indebtedness incurred to Refinance any of the foregoing or any
Indebtedness incurred to Refinance any such refinancing Indebtedness), other
than with the proceeds of (i) a substantially concurrent Refinancing that (x) is
on terms not materially less favorable to the Lenders than the Indebtedness
being refinanced, (y) matures no earlier than the date that is one year after
the Initial Revolving Termination Date and (z) is in an aggregate principal
amount not in excess of the aggregate principal amount of the Indebtedness being
refinanced except to the extent of fees and expenses incurred in connection with
any such Refinancing or (ii) any sale or issuance of TWTC’s common stock or
preferred stock pursuant to Section 7.5(e); (b) amend, modify, waive or
otherwise change, or consent or agree to any amendment, modification, waiver or
other change to, any of the terms of the High Yield Notes, the Existing Senior
Notes or other Indebtedness of TWTC permitted by Section 7.2(t) (or of any
Indebtedness incurred to Refinance any of the foregoing or any Indebtedness
incurred to Refinance any such refinancing Indebtedness) in any manner
materially adverse to the Lenders; or (c) designate any Indebtedness (other than
the Secured Obligations) as (i) “Priority Lien Debt” (or any other term having a
similar meaning) for the purposes of either High Yield Indenture (or any
indenture governing any Refinancing of the Existing Senior Notes or the High
Yield Notes, if applicable, or any indenture governing any Refinancing of any
such refinancing Indebtedness, if applicable) or (ii) “First Priority
Obligations” for the purposes of the Intercreditor Agreement. Notwithstanding
the foregoing, TWTC and the Borrower may redeem or repurchase any of the
Existing Senior Notes (or any refinancing Indebtedness thereof) and the High
Yield Notes (or any refinancing Indebtedness thereof), respectively; provided
that (i) no Default or Event of

 

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Default has occurred and is continuing or would result therefrom, (ii) no
Revolving Loans shall be outstanding at the time of such repurchase or
redemption or after giving effect thereto and (iii) immediately after giving
effect thereto (and to the payment of any amounts required to be paid in
connection therewith), (x) TWTC shall be in pro forma compliance with the
covenants contained in Section 7.1 to the extent such covenants are then in
effect and (y) Current Liquidity shall not be less than $300,000,000.

 

7.10. Transactions with Affiliates. Other than as set forth on Schedule 7.10,
enter into any transaction, including any purchase, sale, lease or exchange of
property, the rendering of any service or the payment of any management,
advisory or similar fees, with any Affiliate (other than TWTC, the Borrower or
any Wholly Owned Subsidiary Guarantor) unless such transaction is (a) otherwise
permitted under this Agreement or the other Loan Documents, (b) in the ordinary
course of business of TWTC, the Borrower or such Subsidiary, as the case may be,
and (c) upon fair and reasonable terms no less favorable to TWTC, the Borrower
or such Subsidiary, as the case may be, than it would obtain in a comparable
arm’s length transaction with a Person that is not an Affiliate.

 

7.11. Sales and Leasebacks. Enter into any arrangement with any Person providing
for the leasing by TWTC or any Subsidiary of real or personal property that has
been or is to be sold or transferred by TWTC or such Subsidiary to such Person
or to any other Person to whom funds have been or are to be advanced by such
Person on the security of such property or rental obligations of TWTC or such
Subsidiary, other than any sale and leaseback transaction involving properties
acquired after the Effective Date and permitted by Section 7.3(g).

 

7.12. Changes in Fiscal Periods. Permit the fiscal year of TWTC or the Borrower
to end on a day other than December 31 or change TWTC’s or the Borrower’s method
of determining fiscal quarters.

 

7.13. Negative Pledge Clauses. Enter into or suffer to exist or become effective
any agreement that prohibits or limits the ability of TWTC or any of its
Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of
its property or revenues, whether now owned or hereafter acquired, other than
(a) this Agreement and the other Loan Documents, (b) the Time Warner
Arrangements, (c) any agreements governing any purchase money Liens or Capital
Lease Obligations otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the assets financed thereby), (d) any
agreements governing any Investment in any joint venture or partnership that
limit the ability to grant a security interest in the Capital Stock of such
joint venture or partnership so long as such Capital Stock is pledged to the
Collateral Agent in an indirect manner reasonably satisfactory to the Collateral
Agent, (e) customary restrictions entered into in the ordinary course of
business with respect to Intellectual Property that limit the ability to grant a
security interest in such Intellectual Property, (f) any agreements governing
any leasehold interest (including any rights of way, colocation agreements and
other similar such interests in real estate, and agreements existing on the
Effective Date granting or otherwise providing for an indefeasible right of use
in fiber or conduits or providing for joint construction or marketing of fiber
or conduits) or building entry agreements that limit the ability to grant a
security interest in such leasehold interest or building entry agreements, (g)
agreements with customers for the provision of services that limit the ability
to grant a security interest in such agreements (but not amounts receivable or
any money or other amounts due or to become due or other right of payment
resulting from those agreements) and (h) the Indentures (or any indenture
governing any Refinancing of the Existing Senior Notes or the High Yield Notes
or any indenture governing any Refinancing of any such refinancing
Indebtedness).

 

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7.14. Clauses Restricting Subsidiary Distributions. Enter into or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Subsidiary of the Borrower or of TWTC to (a) make Restricted
Payments in respect of any Capital Stock of such Subsidiary held by, or pay any
Indebtedness owed to, TWTC, the Borrower or any other Subsidiary of TWTC, (b)
make loans or advances to, or other Investments in, TWTC, the Borrower or any
other Subsidiary of TWTC or (c) transfer any of its assets to TWTC, the Borrower
or any other Subsidiary of TWTC, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents, (ii) any restrictions existing under the High Yield Indentures on and
as of the Effective Date (or any indenture governing any Refinancing of the
Existing Senior Notes or the High Yield Notes or any indenture governing any
Refinancing of any such refinancing Indebtedness) and (iii) any restrictions
with respect to a Subsidiary imposed pursuant to an agreement that has been
entered into in connection with the Disposition of all or substantially all of
the Capital Stock or assets of such Subsidiary.

 

7.15. Lines of Business; Holding Company Status. (a) Enter into any business,
either directly or through any Subsidiary, except for the design, development,
construction, installation, integration, management or provision of any
telecommunications business, including voice, video, Internet and data
transmission products, services and systems, fiber network construction and
sales and any business reasonably related to the foregoing (each, a “Permitted
Line of Business”).

 

(b) In the case of TWTC, (i) conduct, transact or otherwise engage in, or commit
to conduct, transact or otherwise engage in, any business or operations other
than those incidental to its ownership of cash and Cash Equivalents and
Indebtedness and the Capital Stock of other Persons or (ii) own, lease, manage
or otherwise operate any properties or assets (including cash and Cash
Equivalents) for any period greater than two consecutive days other than (1)
cash and Cash Equivalents in an amount not to exceed $25,000,000 in the
aggregate and (2) the ownership of shares of Capital Stock of other Persons;
provided that, TWTC may continue to conduct administrative and management
oversight and headquarters functions (including, without limitation, maintaining
its leases of office space existing on the Effective Date).

 

7.16. Modifications to Time Warner Arrangements and Material Rights and
Privileges. Amend, supplement, or otherwise modify the terms and conditions of
any of the Time Warner Arrangements or any material rights and privileges
(including, without limitation, FCC and local regulatory licenses) in any manner
materially adverse to the Lenders.

 

SECTION 8. 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 or Reimbursement
Obligation when due in accordance with the terms hereof; or the Borrower shall
fail to pay any interest on any Loan or Reimbursement Obligation, 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

 

(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 or other statement furnished by it at any time under or in
connection with this Agreement or any such

 

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other Loan Document shall prove to have been inaccurate in any material respect
on or as of the date made or deemed made; or

 

(c) any Loan Party shall default in the observance or performance of any
agreement contained in clause (i) or (ii) of Section 6.4(a) (with respect to
TWTC and the Borrower only), Section 6.7(a) or Section 7 of this Agreement or
Sections 5.5 and 5.7(b) of the Guarantee and Collateral Agreement, and, if no
Obligations are then outstanding hereunder, such default shall continue
unremedied for a period of 10 days; 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 (or, if no Obligations are then
outstanding hereunder, 60) days after notice to the Borrower from the
Administrative Agent or the Required Lenders; or

 

(e) TWTC or any of its Subsidiaries (other than a Shell Subsidiary or an
Immaterial Subsidiary) shall (i) default in making any payment of any principal
of any Indebtedness (including any Guarantee Obligation, but excluding the
Loans) on the scheduled or original due date, whichever is later, with respect
thereto (giving effect to any applicable grace periods); 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 or contained
in any instrument or agreement evidencing, securing or relating thereto, or any
other default shall occur or exist, the effect of which default is to cause, or,
if any Obligations are then outstanding hereunder, 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 (in the case of any
such Indebtedness constituting a Guarantee Obligation) to become payable;
provided, that a default 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 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 $10,000,000; or

 

(f) (i) TWTC, the Borrower or any of their respective Subsidiaries (other than a
Shell Subsidiary or an Immaterial Subsidiary) 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 a 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
TWTC, the Borrower or any of their respective Subsidiaries (other than a Shell
Subsidiary or an Immaterial Subsidiary) shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against TWTC, the
Borrower or any of their respective Subsidiaries (other than a Shell Subsidiary
or an Immaterial Subsidiary) 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 TWTC, the Borrower or any of their respective Subsidiaries
(other than a Shell Subsidiary or an Immaterial Subsidiary) any case,

 

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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) TWTC, the Borrower or any of their
respective Subsidiaries (other than a Shell Subsidiary or an Immaterial
Subsidiary) 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) TWTC, the Borrower or any of their respective
Subsidiaries (other than a Shell Subsidiary or an Immaterial Subsidiary) 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 is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition other than in the ordinary course 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 TWTC, the Borrower
or any of their respective Subsidiaries (other than a Shell Subsidiary or an
Immaterial Subsidiary) involving in the aggregate a liability (to the extent (i)
not paid by insurance or (ii) as to which no reasonable expectation of insurance
coverage exists) of $20,000,000 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, 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
(other than as a result of an act or omission of the Collateral Agent); or

 

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

 

(k) any of the Time Warner Arrangements (other than the trade name license
agreement between TWTC and Time Warner Inc. and its affiliates) shall cease, for
any reason, to be in full force and effect or any Loan Party or any Affiliate of
any Loan Party shall so assert (other than any expiration of any of the Time
Warner Arrangements in accordance with its terms that could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect);

 

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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 Revolving 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 (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) 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 Revolving Commitments to be terminated forthwith, whereupon the
Revolving Commitments shall immediately terminate; and (ii) 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 (including all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrower shall at such time deposit
in a cash collateral account opened by the Administrative Agent an amount equal
to the aggregate then undrawn and unexpired amount of such Letters of Credit.
Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower hereunder and under the other Loan Documents shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to the Borrower (or such other Person as may be lawfully entitled thereto).
Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived by the Borrower.

 

SECTION 9. THE AGENTS

 

9.1. Appointment. Each Lender hereby irrevocably designates and appoints the
Administrative Agent and the Collateral Agent as the agents of such Lender under
this Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent and the Collateral Agent, in such
capacities, 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 the Administrative Agent and the
Collateral 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,
neither the Administrative Agent nor the Collateral 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 the
Administrative Agent or the Collateral Agent.

 

9.2. Delegation of Duties. The Administrative Agent and the Collateral Agent may
execute any of their respective 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

 

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such duties. Neither the Administrative Agent nor the Collateral Agent shall be
responsible for the negligence or misconduct of any agents or attorneys in-fact
selected by it with reasonable care.

 

9.3. Exculpatory Provisions. None of the Agents nor any of their respective
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 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 a
party thereto 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.

 

9.4. Reliance by Administrative Agent and Collateral Agent. Each of the
Administrative Agent and the Collateral 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 reasonably 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 counsel to TWTC or the Borrower), independent accountants and other
experts selected by it. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. Each of the Administrative Agent and the Collateral 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) 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. The
Administrative Agent and the Collateral 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), 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.

 

9.5. Notice of Default. Neither the Administrative Agent nor the Collateral
Agent shall be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default hereunder unless the Administrative Agent has
received notice from a Lender, TWTC 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 receives such a
notice, the Administrative Agent shall give notice thereof to the Lenders. The
Administrative Agent or the Collateral Agent, as the case may be, 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); provided that unless and until the Administrative Agent
and the Collateral Agent shall have received such directions, the Administrative
Agent and the Collateral 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.

 

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9.6. Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that none 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, neither the Administrative Agent nor the
Collateral 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 the Administrative Agent or the Collateral Agent or any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates.

 

9.7. Indemnification. The Lenders agree to indemnify each Agent in its capacity
as such (to the extent not reimbursed by the Loan Parties and without limiting
the obligation of the Loan Parties to do so), ratably according to their
respective Aggregate Exposure 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 Revolving Commitments shall have terminated and
the Loans shall have been paid in full, ratably in accordance with such
Aggregate Exposure Percentages immediately prior to such date), 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 (whether before or after the payment of the Loans) be imposed
on, incurred by or asserted against such Agent in any way relating to or arising
out of, the Revolving 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 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.

 

9.8. 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 and with respect to any Letter of Credit issued or
participated in 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.

 

9.9. Successor Administrative Agent. The Administrative Agent may resign as
Administrative Agent upon 30 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

 

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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
8(a) or Section 8(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 30 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. After any retiring Administrative Agent’s
resignation as Administrative Agent, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement and the other Loan Documents.

 

9.10. Successor Collateral Agent. Subject to the provisions of the Intercreditor
Agreement and the Guarantee and Collateral Agreement, the Collateral Agent may
resign as Collateral Agent upon 30 days’ notice to the Lenders and the Borrower.
If the Collateral Agent shall resign as Collateral 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 8(a) or Section 8(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 Collateral Agent, and the term “Collateral Agent” shall mean such successor
agent effective upon such appointment and approval, and the former Collateral
Agent’s rights, powers and duties as Collateral Agent shall be terminated,
without any other or further act or deed on the part of such former Collateral
Agent or any of the parties to this Agreement or any holders of the Loans. If no
successor agent has accepted appointment as Collateral Agent by the date that is
30 days following a retiring Collateral Agent’s notice of resignation, the
retiring Collateral Agent’s resignation shall nevertheless thereupon become
effective and the Administrative Agent shall assume and perform all of the
duties of the Collateral Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above. After any
retiring Collateral Agent’s resignation as Collateral Agent, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Collateral Agent under this Agreement and the other
Loan Documents.

 

9.11. Syndication Agent and Co-Documentation Agents. Neither the Syndication
Agent nor the Co-Documentation Agents shall have any duties or responsibilities
hereunder in its capacity as such.

 

SECTION 10. MISCELLANEOUS

 

10.1. Amendments and Waivers. Neither this Agreement, 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 10.1 and, in the case of the
Intercreditor Agreement or the Guarantee and Collateral Agreement, the
provisions of Section 9.3 of the Intercreditor Agreement and Section 8.2 of the
Guarantee and Collateral Agreement. Subject to the foregoing, the Required
Lenders and each Loan Party party to the relevant Loan Document may, or, with
the written consent of the Required Lenders, the

 

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Administrative Agent (or the Collateral Agent, as the case may be) 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 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 the Required Lenders or the Administrative Agent (or the
Collateral Agent, as the case may be), with the written consent of the Required
Lenders, as the case may be, may specify in such instrument, any of the
requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences, including, without limitation, the
termination of the Revolving Commitments and the Loans being due and payable;
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, reduce the stated rate of any interest
or fee payable hereunder (except 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 Lender’s Revolving Commitment, in each case
without the written consent of each Lender directly affected thereby; (ii)
eliminate or reduce the voting rights of any Lender under Section 2.1(b), 2.1(c)
or this Section 10.1 without the written consent of such Lender; (iii) 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, or subordinate to
any other Person the Liens of the Collateral Agent upon, or permit Liens in
favor of any other Person that are pari passu to the Liens of the Collateral
Agent upon, all or substantially all of the Collateral or release all or
substantially all of the Subsidiary Guarantors from their obligations under the
Guarantee and Collateral Agreement, in each case without the written consent of
all Lenders; (iv) amend, modify or waive any provision of Section 2.14(a) or (b)
without the written consent of each Lender adversely affected thereby; (v)
amend, modify or waive any provision of Section 9 without the written consent of
the Administrative Agent and the Collateral Agent; (vi) amend, modify or waive
any provision of Section 2.4 or 2.5 without the written consent of the Swingline
Lender; (vii) amend, modify or waive any provision of Section 3 without the
written consent of the Issuing Lender; or (viii) amend or modify any provision
of Section 10.6 to add any additional consent requirements necessary to effect
any assignment under such Section without the written consent of the
Supermajority Lenders. 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 Collateral Agent, the Administrative
Agent and all future holders of the Loans. In the case of any waiver, the Loan
Parties, the Lenders, the Collateral Agent and the Administrative Agent 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.

 

Notwithstanding anything to the contrary above, each Lender hereby authorizes
the Administrative Agent on its behalf, and without its further consent, to
enter into amendments to this Agreement (including, without limitation,
amendments to this Section 10.1) and the other Loan Documents as the
Administrative Agent may reasonably deem appropriate in order to effectuate an
Incremental Facility, including, without limitation, amendments to permit the
Incremental Loans to share ratably in the benefits of this Agreement and the
other Loan Documents and to include appropriately the Lenders under an
Incremental Facility in any determination of the Required Lenders; provided that
no such amendment shall modify any provision described in clause (i) or (ii) of
the foregoing paragraph or otherwise adversely affect in any material respect
the rights of any Lender, in each case without the written consent of such
Lender.

 

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In addition, this Agreement may be amended (or amended and restated) with the
written consent of the Required Lenders, the Collateral Agent and the
Administrative Agent to add one or more additional credit facilities to this
Agreement and to permit the extensions of credit from time to time outstanding
thereunder to share ratably in the benefits of this Agreement and the other Loan
Documents and to include appropriately the Lenders holding such credit
facilities in any determination of the Required Lenders.

 

10.2. 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 as follows in the case of TWTC, the Borrower, the Collateral Agent,
the Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:

 

TWTC:   

Time Warner Telecom Inc.

    

10475 Park Meadows Drive

    

Littleton, CO 80124

    

Attention: Mark A. Peters, Vice President, Treasurer

    

Telecopy:          (303) 566-1776

    

Telephone:        (303) 566-1545

The Borrower:   

Time Warner Telecom Holdings Inc.

    

10475 Park Meadows Drive

    

Littleton, CO 80124

    

Attention: Paul B. Jones, Esq., General Counsel

    

Telecopy:          (303) 566-1237

    

Telephone:        (303) 566-1777

with a copy to:   

Faegre & Benson LLP

    

2200 Wells Fargo Center

    

90 South 7th Street

    

Minneapolis, MN 55402

    

Attention: Douglas M. Rutherford, Esq.

    

         Peter M. Gaines, Esq.

    

Telecopy:          (612) 766-1600

    

Telephone:        (612) 766-7076

The Administrative Agent:   

Lehman Commercial Paper Inc.

    

745 Seventh Avenue, 16th Floor

    

New York, NY 10019

    

Attention: Maritza Ospina

    

Telecopy:          (646) 758-4648

    

Telephone:        (212) 526-6590

 

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The Collateral Agent:   

Lehman Commercial Paper Inc.

    

745 Seventh Avenue

    

New York, NY 10019

    

Attention: Robert Berzins

    

Telecopy:          (646) 758-1906

    

Telephone:        (212) 526-3712

 

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

 

10.3. No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent, the Collateral 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.

 

10.4. Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.

 

10.5. Payment of Expenses and Taxes. Each of TWTC and the Borrower agrees (a) to
pay or reimburse the Administrative Agent, the Collateral Agent and the Joint
Lead Arrangers for all their reasonable and documented out-of-pocket costs and
expenses incurred in connection with the syndication of this Agreement and the
preparation, execution and delivery 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
the reasonable and documented fees, disbursements and other charges of one firm
of primary counsel to the Administrative Agent and the Collateral Agent and
filing and recording fees and expenses, with statements with respect to the
foregoing to be submitted to the Borrower prior to the Effective Date (in the
case of amounts to be paid on the Effective Date) and from time to time
thereafter on a quarterly basis or such other periodic basis as the
Administrative Agent or the Collateral Agent shall deem appropriate, (b) to pay
or reimburse each Lender (other than in respect of intercreditor disputes
arising from the Intercreditor Agreement), the Administrative Agent and the
Collateral Agent for all its costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the other Loan
Documents and any such other documents, including the fees, disbursements and
other charges of counsel to each Lender and of counsel to the Administrative
Agent, the Collateral Agent and the Joint Lead Arrangers, (c) to pay, indemnify,
and hold each Lender, the Administrative Agent and the Collateral Agent 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, that 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, and (d) to pay, indemnify, and hold
each Lender, the Administrative Agent, the Collateral Agent and the Joint Lead
Arrangers and their respective officers, directors, employees, affiliates,
agents and controlling persons (each, an “Indemnitee”) harmless from and against
any and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever

 

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with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents and any such other
documents, including any of the foregoing relating to the use of proceeds of the
Loans or the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of TWTC or any of its
Subsidiaries or any of the Properties and the reasonable fees and expenses of
legal counsel in connection with claims, actions or proceedings by any
Indemnitee against any Loan Party under any Loan Document (all the foregoing in
this clause (d), collectively, the “Indemnified Liabilities”), provided, that
neither TWTC nor the Borrower shall have any obligation hereunder to any
Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities have resulted from the gross negligence or willful
misconduct of such Indemnitee. It is understood and agreed that, to the extent
not precluded by a conflict of interest, each Indemnitee shall endeavor to work
cooperatively with a view to minimizing the legal and other expenses associated
with any defense and any potential settlement or judgment. Without limiting the
foregoing, and to the extent permitted by applicable law, TWTC agrees not to
assert and to cause its Subsidiaries not to assert, and hereby waives and agrees
to cause its Subsidiaries 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. All amounts due under this Section
10.5 shall be payable not later than 10 days after written demand therefor.
Statements payable by TWTC or the Borrower pursuant to this Section 10.5 shall
be submitted to the address of the Borrower set forth in Section 10.2, or to
such other Person or address as may be hereafter designated by the Borrower in a
written notice to the Administrative Agent. The agreements in this Section 10.5
shall survive repayment of the Loans and all other amounts payable hereunder.

 

10.6. Successors and Assigns; Participations and Assignments. (a) This Agreement
shall be binding upon and inure to the benefit of TWTC, 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 each Lender.

 

(b) Any Lender other than any Conduit Lender may, without the consent of the
Borrower or any Agent, 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
Revolving 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
Administrative Agent 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
reduce the principal of, or interest on, the Loans or any fees payable
hereunder, or postpone the date of the final maturity of the Loans, in each case
to the extent subject to such participation. 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

 

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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 10.7(a) as
fully as if it were a Lender hereunder. The Borrower also agrees that each
Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17
with respect to its participation in the Revolving Commitments and the Loans
outstanding from time to time as if it was a Lender; provided that, in the case
of Section 2.16, 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. In the event that any Lender sells participations in a
Loan, such Lender shall maintain a register on which it enters the name of all
participants in the Loans held by it (the “Participant Register”). A Loan (and
the Note, if any, evidencing the same) may be participated in whole or in part
only by registration of such participation on the Participant Register.

 

(c) Any Lender other than any Conduit Lender (an “Assignor”) may, in accordance
with applicable law, at any time and from time to time assign to any Lender, any
Affiliate of any Lender or any Approved Fund or, with the consent of the
Borrower, the Administrative Agent and the Issuing Lender (which, in each case,
shall not be unreasonably withheld or delayed), to an additional bank, financial
institution or other entity (an “Assignee”) all or any part of its rights and
obligations under this Agreement and the other Loan Documents pursuant to an
Assignment and Acceptance, executed by such Assignee, such Assignor and any
other Person whose consent is required pursuant to this paragraph, and delivered
to the Administrative Agent for its acceptance and recording in the Register;
provided that, unless otherwise agreed by the Borrower and the Administrative
Agent, no such assignment to an Assignee (other than any Lender or any Affiliate
of any Lender or any Approved Fund) shall be in an aggregate principal amount of
less than $5,000,000, except in the case of an assignment of all of a Lender’s
interests under this Agreement. For purposes of the proviso contained in the
preceding sentence, the amount described therein shall be aggregated in respect
of each Lender and its related Approved Funds, if any. 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 a Revolving
Commitment 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 with respect
to its obligations under Section 10.15. Notwithstanding any provision of this
Section 10.6, the consent of the Borrower shall not be required for any
assignment that occurs when an Event of Default shall have occurred and be
continuing. Notwithstanding the foregoing, any Conduit Lender may assign at any
time to its designating Lender hereunder without the consent of the Borrower or
the Administrative Agent any or all of the Loans it may have funded hereunder
and pursuant to its designation agreement and without regard to the limitations
set forth in the first sentence of this Section 10.6(c). In addition, a Lender
shall permitted to transfer internally any of its Loans or any portion of its
Revolving Commitments to an Approved Fund of such Lender without delivering an
Assignment and Acceptance to the Administrative Agent, provided that (i) the
transferring Lender shall maintain a register with respect to any such transfer
and (ii) notwithstanding the effectiveness of any such transfer, the
transferring Lender shall continue to be the Lender of record, and be obligated,
hereunder for all purposes of this Agreement and the other Loan Documents until
such Approved Fund that is a transferee of such Lender delivers an

 

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Assignment and Acceptance to the Administrative Agent for recording in
accordance with this Section 10.6.

 

(d) The Administrative Agent shall, on behalf of the Borrower, maintain at its
address referred to in Section 10.2 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 Revolving Commitment of, and the principal
amount of the Loans owing to, each Lender from time to time. The Register shall
be available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice. The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrower, each
other Loan Party, the Administrative Agent, the Collateral 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 the 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. 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, and thereupon one or
more new Notes shall be issued to the designated Assignee.

 

(e) Upon its receipt of an Assignment and Acceptance executed by an Assignor, an
Assignee and any other Person whose consent is required by Section 10.6(c),
together with payment to the Administrative Agent of a registration and
processing fee of $3,500, the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) record the information contained therein
in the Register on the effective date determined pursuant thereto.

 

(f) For avoidance of doubt, the parties to this Agreement acknowledge that the
provisions of this Section 10.6 concerning assignments of Loans and Notes relate
only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including any pledge or assignment by a
Lender of any Loan or Note to any Federal Reserve Bank in accordance with
applicable law.

 

(g) The Borrower, upon receipt of written notice from the relevant Lender,
agrees to issue Notes to any Lender requiring Notes to facilitate transactions
of the type described in paragraph (f) above.

 

(h) Each of TWTC, the Borrower, each Lender and each Agent hereby confirms that
it will not institute against a Conduit Lender or join any other Person in
instituting against a Conduit Lender any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding under any state bankruptcy or
similar law, for one year and one day after the payment in full of the latest
maturing commercial paper note issued by such Conduit Lender; provided, however,
that each Lender designating any Conduit Lender hereby agrees to indemnify, save
and hold harmless each other party hereto for any loss, cost, damage or expense
arising out of its inability to institute such a proceeding against such Conduit
Lender during such period of forbearance.

 

10.7. Adjustments; Set-off. (a) Except to the extent that this Agreement
expressly provides for payments to be allocated to a particular Lender, if any
Lender (a “Benefitted Lender”) shall 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

 

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referred to in Section 8(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of the Obligations owing to such other Lender, such Benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of the Obligations owing to each such other Lender, 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 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 TWTC or the Borrower, any
such notice being expressly waived by TWTC and the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by TWTC or
the Borrower hereunder, subject to applicable grace periods (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 TWTC 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.

 

10.8. 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 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.

 

10.9. 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.

 

10.10. Integration. This Agreement and the other Loan Documents represent the
entire agreement of TWTC, the Borrower, the Administrative Agent, the Collateral
Agent and the Lenders with respect to the subject matter hereof and thereof, and
there are no promises, undertakings, representations or warranties by the
Administrative Agent, the Collateral Agent or any Lender relative to subject
matter hereof not expressly set forth or referred to herein or in the other Loan
Documents.

 

10.11. 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.

 

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10.12. Submission To Jurisdiction; Waivers. Each of TWTC 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 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 TWTC or the Borrower,
as the case may be at its address set forth in Section 10.2 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.

 

10.13. Acknowledgments. Each of TWTC 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 any Agent nor any Lender has any fiduciary relationship with or duty
to TWTC or the Borrower arising out of or in connection with this Agreement or
any of the other Loan Documents, and the relationship between Agents and
Lenders, on one hand, and TWTC and the Borrower, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and

 

(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
Lenders or among TWTC, the Borrower, the Agents and the Lenders.

 

10.14. Releases of Guarantees and Liens. (a) Notwithstanding anything to the
contrary contained herein or in any other Loan Document, the Collateral Agent is
hereby irrevocably authorized by each Lender (without requirement of notice to
or consent of any Lender except as expressly required by Section 10.1) to take
any action requested by the Borrower having the effect of releasing any
Collateral or guarantee obligations of any Subsidiary Guarantor or other Person
(i) to the extent necessary to permit consummation of any transaction not
prohibited by any Loan Document or that has been consented to in accordance with
Section 10.1 or (ii) under the circumstances described in paragraph (b) below.

 

(b) At such time as the Loans, the Reimbursement Obligations and the other
obligations under the Loan Documents (other than obligations under or in respect
of Hedge Agreements and other than obligations in respect of indemnities and
expense reimbursement that are, at the time,

 

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contingent and in respect of which no assertion of liability or demand for
payment has been made) shall have been paid in full, the Revolving Commitments
have been terminated and no Letters of Credit shall be outstanding, (x) the
Collateral shall be released from the Liens created by the Security Documents,
(y) the Subsidiary Guarantors shall be released from all obligations under the
Guarantee and Collateral Agreement (other than those expressly stated to survive
termination) and (z) the Security Documents and all obligations (other than
those expressly stated to survive termination) of the Administrative Agent, the
Collateral Agent and each Loan Party under the Security Documents shall
terminate, all without delivery of any instrument or performance of any act by
any Person.

 

10.15. Confidentiality. Each Agent and each Lender agrees to keep confidential
all non-public information and all other information specifically designated as
“confidential” by the Borrower, TWTC or one of their respective authorized
representatives (including oral information for which such designation has been
specifically made) provided to it by any Loan Party pursuant to this Agreement;
provided that nothing herein shall prevent any Agent or any Lender from
disclosing any such information (a) to an Agent, a Lender, any Affiliate of a
Lender or any Approved Fund (provided that such Approved Fund expressly agrees
to comply with the provisions of this Section), (b) to any actual or prospective
Transferee or Hedge Agreement counterparty that expressly agrees to comply with
the provisions of this Section, (c) to its employees, directors, agents,
attorneys, accountants and other professional advisors or those of any of its
Affiliates (provided that such Lender or Agent shall be required to inform such
Persons of the confidential nature of such information), (d) upon the request or
demand of any Governmental Authority, (e) in response to any order of any court
or other Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection with any
litigation or similar proceeding, (g) that has been publicly disclosed or
otherwise disclosed to such Person on a non-confidential basis, (h) 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, (i) in connection with the exercise of any remedy
hereunder or under any other Loan Document or (j) to any direct or indirect
contractual counterparty in Hedge Agreements or such contractual counterparty’s
professional advisor (so long as such contractual counterparty or professional
advisor to such contractual counterparty expressly agrees to be bound by the
provisions of this Section 10.15); provided, further, that with respect to
disclosures pursuant to clauses (d), (e) and (f) of this Section, unless
prohibited by applicable law or court order, each Lender and each Agent shall
attempt to notify TWTC of any request by any governmental agency or
representative thereof or other Person (other than any such request in
connection with an examination of the financial condition of such Lender by such
governmental agency) for disclosure of any material confidential information
after receipt of such request, and if reasonably practicable and permissible,
before disclosure of such information.

 

10.16. WAIVERS OF JURY TRIAL. TWTC, 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.

 

75

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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.

 

TIME WARNER TELECOM INC. By:  

/s/ Tina Davis

   

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

   

Name: Tina Davis

   

Title: Vice President and Deputy General Counsel

 

TIME WARNER TELECOM HOLDINGS INC. By:  

/s/ Tina Davis

   

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

   

Name: Tina Davis

   

Title: Vice President and Deputy General Counsel

 

LEHMAN COMMERCIAL PAPER INC., as

Administrative Agent, Collateral Agent and as a Lender

By:  

/s/ G. Robert Berzins

   

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

   

Name: G. Robert Berzins

   

Title: Vice President

 

MORGAN STANLEY SENIOR FUNDING, INC., as Syndication Agent and as a Lender By:  

/s/ Todd Vannucci

   

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

   

Name: Todd Vannucci

   

Title: Executive Director

 

WACHOVIA BANK, NATIONAL ASSOCIATION, as Co-Documentation Agent and as a Lender
By:  

/s/ John D. Brady

   

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

   

Name: John D. Brady

   

Title: Director

 

BEAR STEARNS CORPORATE LENDING INC., as Co-Documentation Agent and as a Lender
By:  

/s/ Keith C. Barnish

   

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

   

Name: Keith C. Barnish

   

Title: Executive Vice President

 

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

Signature page to the Credit Agreement, dated as of February 20, 2004, among
Time Warner Telecom Inc., a Delaware corporation, Time Warner Telecom Holdings
Inc., a Delaware corporation, the several banks and other financial institutions
or entities from time to time parties thereto, Morgan Stanley Senior Funding,
Inc., as syndication agent, Wachovia Bank, National Association and Bear Stearns
Corporate Lending Inc., as co-documentation agents, and Lehman Commercial Paper
Inc., as administrative agent and as collateral agent.     MADELEINE L.L.C. By:
 

/s/ Kevin Genda

   

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

   

Name: Kevin Genda

   

Title: Vice President

 

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

Annex A

 

PRICING GRID FOR REVOLVING LOANS

 

Consolidated Total

Leverage Ratio

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

   Applicable Margin for
Eurodollar Loans

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

   

Applicable Margin

for ABR Loans

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

 

Greater than or equal to 5.50 to 1.0

   3.00 %   1.75 %

Greater than or equal to 4.50 to 1.0 but less than 5.50 to 1.0

   2.75 %   1.50 %

Greater than or equal to 3.50 to 1.0 but less than 4.50 to 1.0

   2.50 %   1.25 %

Less than or equal to 3.50 to 1.00

   2.25 %   1.00 %

 

For the purposes of the Pricing Grid, changes in the Applicable Margin resulting
from changes in the Consolidated Total Leverage Ratio shall become effective on
the date (the “Adjustment Date”) that is three Business Days after the date on
which financial statements are delivered to the Lenders pursuant to Section 6.1
and shall remain in effect until the next change to be effected pursuant to this
paragraph. If any financial statements referred to above are not delivered
within the time periods specified in Section 6.1, then, until the date that is
three Business Days after the date on which such financial statements are
delivered, the highest rate set forth in each column of the Pricing Grid shall
apply. In addition, at all times while an Event of Default shall have occurred
and be continuing, the highest rate set forth in each column of the Pricing Grid
shall apply. Each determination of the Consolidated Total Leverage Ratio
pursuant to the Pricing Grid shall be made in a manner consistent with the
determination thereof pursuant to Section 7.1.