** **

**CREDIT AGREEMENT**

 

**Datedas of August 29, 2001**

 

**among**

 

**LODGENETENTERTAINMENT CORPORATION,**

**asBorrower,**

** **

**THELENDERS LISTED HEREIN,**

**asLenders,**

 

**CANADIANIMPERIAL BANK OF COMMERCE,**

**asAdministrative Agent,**

 

**BEARSTEARNS CORPORATE LENDING INC.,**

**asSyndication Agent,**

 

**U.S.BANK NATIONAL ASSOCIATION**

**and**

**FLEETNATIONAL BANK,**

**asCo-Documentation Agents**

** **

**and**

** **

**CIBCWORLD MARKETS CORP.**

**and**

**BEAR,STEARNS & CO. INC.,**

**asCo-Lead Arrangers**

 

 

TABLE OF CONTENTS

 
| Section 1.      | DEFINITIONS                                                                                                                                                                                 |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1.1             | Certain Defined Terms                                                                                                                                                                       |
| 1.2             | Accounting Terms; Utilization of GAAP for  Purposes of Calculations Under Agreement                                                                                                         |
| 1.3             | Other Definitional Provisions and Rules of  Construction                                                                                                                                    |
|            |                                                                                                                                                                                        |
| Section 2.      | AMOUNTS AND TERMS OF COMMITMENTS AND LOANS                                                                                                                                                  |
| 2.1             | Commitments; Making of Loans; Optional  Notes                                                                                                                                               |
| 2.2             | Interest on the Loans                                                                                                                                                                       |
| 2.3             | Fees                                                                                                                                                                                        |
| 2.4             | Repayments, Prepayments and Reductions in  Revolving Loan Commitments; General Provisions Regarding Payments; Application  of Proceeds of Collateral and Payments Under Subsidiary Guaranty |
| 2.5             | Use of Proceeds                                                                                                                                                                             |
| 2.6             | Special Provisions Governing LIBOR Loans                                                                                                                                                    |
| 2.7             | Increased Costs; Taxes; Capital Adequacy                                                                                                                                                    |
| 2.8             | Obligation of Lenders and Issuing Lenders  to Mitigate                                                                                                                                      |
| 2.9             | Replacement of Lenders                                                                                                                                                                      |
| 2.10            | Extension of Term Loan and Revolving Loan  Commitment Termination Dates                                                                                                                     |
|            |                                                                                                                                                                                        |
| Section 3.      | LETTERS OF CREDIT                                                                                                                                                                           |
| 3.1             | Issuance of Letters of Credit and Lenders’  Purchase of Participations Therein                                                                                                         |
| 3.2             | Letter of Credit Fees                                                                                                                                                                       |
| 3.3             | Drawings and Reimbursement of Amounts Paid  Under Letters of Credit                                                                                                                         |
| 3.4             | Obligations Absolute                                                                                                                                                                        |
| 3.5             | Indemnification; Nature of Issuing Lenders’  Duties                                                                                                                                    |
| 3.6             | Increased Costs and Taxes Relating to  Letters of Credit                                                                                                                                    |
|            |                                                                                                                                                                                        |
| Section 4.      | CONDITIONS TO LOANS AND LETTERS OF CREDIT                                                                                                                                                   |
| 4.1             | Conditions to Term Loans and Initial  Revolving Loans and Swing Line Loans                                                                                                                  |
| 4.2             | Conditions to All Loans                                                                                                                                                                     |
| 4.3             | Conditions to Letters of Credit                                                                                                                                                             |
|            |                                                                                                                                                                                        |
| Section 5.      | BORROWER’S REPRESENTATIONS AND WARRANTIES                                                                                                                                              |
| 5.1             | Organization, Powers, Qualification, Good  Standing, Business and Subsidiaries                                                                                                              |
| 5.2             | Authorization of Borrowing, etc                                                                                                                                                             |
| 5.3             | Financial Condition                                                                                                                                                                         |
| 5.4             | No Material Adverse Change; No Restricted  Junior Payments                                                                                                                                  |
| 5.5             | Title to Properties; Liens; Real Property;  Intellectual Property                                                                                                                           |
| 5.6             | Litigation; Adverse Facts                                                                                                                                                                   |
| 5.7             | Payment of Taxes                                                                                                                                                                            |
| 5.8             | Performance of Agreements; Materially  Adverse Agreements                                                                                                                                   |
| 5.9             | Governmental Regulation                                                                                                                                                                     |
| 5.10            | Securities Activities                                                                                                                                                                       |
| 5.11            | Employee Benefit Plans                                                                                                                                                                      |
| 5.12            | Certain Fees                                                                                                                                                                                |
| 5.13            | Environmental Protection                                                                                                                                                                    |
| 5.14            | Employee Matters                                                                                                                                                                            |
| 5.15            | Solvency                                                                                                                                                                                    |
| 5.16            | Matters Relating to Collateral                                                                                                                                                              |
| 5.17            | Senior Note Documents                                                                                                                                                                       |
| 5.18            | Disclosure                                                                                                                                                                                  |
| 5.19            | Mortgage Taxes, Etc.                                                                                                                                                                        |
|            |                                                                                                                                                                                        |
| Section  6.     | BORROWER’S  AFFIRMATIVE COVENANTS                                                                                                                                                      |
| 6.1             | Financial Statements and Other Reports                                                                                                                                                      |
| 6.2             | Existence, etc.                                                                                                                                                                             |
| 6.3             | Payment of Taxes and Claims; Tax Returns                                                                                                                                                    |
| 6.4             | Maintenance of Properties; Insurance;  Application of Net Insurance/ Condemnation Proceeds                                                                                                  |
| 6.5             | Inspection Rights                                                                                                                                                                           |
| 6.6             | Compliance with Laws, etc.                                                                                                                                                                  |
| 6.7             | Environmental Matters                                                                                                                                                                       |
| 6.8             | Execution of Subsidiary Guaranty and Personal Property Collateral  Documents After the Closing Date                                                                                         |
| 6.9             | Matters Relating to Additional Real  Property Collateral                                                                                                                                    |
| 6.10            | Interest Rate Protection.                                                                                                                                                                   |
| 6.11            | Deposit Accounts and Cash Management  Systems                                                                                                                                               |
| 6.12            | Solvency                                                                                                                                                                                    |
|            |                                                                                                                                                                                        |
| Section 7.      | BORROWER’S NEGATIVE COVENANTS                                                                                                                                                          |
| 7.1             | Indebtedness                                                                                                                                                                                |
| 7.2             | Liens and Related Matters                                                                                                                                                                   |
| 7.3             | Investments; Acquisitions                                                                                                                                                                   |
| 7.4             | Contingent Obligations                                                                                                                                                                      |
| 7.5             | Restricted Junior Payments                                                                                                                                                                  |
| 7.6             | Financial Covenants                                                                                                                                                                         |
| 7.7             | Restriction on Fundamental Changes; Asset  Sales                                                                                                                                            |
| 7.8             | Consolidated Capital Expenditures                                                                                                                                                           |
| 7.9             | Transactions with Affiliates                                                                                                                                                                |
| 7.10            | Sales and Lease-Backs                                                                                                                                                                       |
| 7.11            | Disposal of Subsidiary Stock                                                                                                                                                                |
| 7.12            | Sale or Discount of Receivables                                                                                                                                                             |
| 7.13            | Conduct of Business                                                                                                                                                                         |
| 7.14            | Amendments of Documents Relating to Senior  Note Documents and Subordinated Indebtedness                                                                                                    |
| 7.15            | Fiscal Year                                                                                                                                                                                 |
|            |                                                                                                                                                                                        |
| Section  8.     | EVENTS  OF DEFAULT                                                                                                                                                                          |
| 8.1             | Failure to Make Payments When Due                                                                                                                                                           |
| 8.2             | Default in Other Agreements; Termination of  Material Intellectual Property License                                                                                                         |
| 8.3             | Breach of Certain Covenants                                                                                                                                                                 |
| 8.4             | Breach of Warranty                                                                                                                                                                          |
| 8.5             | Other Defaults Under Loan Documents                                                                                                                                                         |
| 8.6             | Involuntary Bankruptcy; Appointment of  Receiver, etc.                                                                                                                                      |
| 8.7             | Voluntary Bankruptcy; Appointment of Receiver, etc                                                                                                                                          |
| 8.8             | Judgments and Attachments                                                                                                                                                                   |
| 8.9             | Dissolution                                                                                                                                                                                 |
| 8.10            | Employee Benefit Plans                                                                                                                                                                      |
| 8.11            | Material Adverse Effect                                                                                                                                                                     |
| 8.12            | Change in Control                                                                                                                                                                           |
| 8.13            | Invalidity of Subsidiary Guaranty; Failure  of Security; Repudiation of Obligations                                                                                                         |
| 8.14            | Subordinated Indebtedness                                                                                                                                                                   |
|            |                                                                                                                                                                                        |
| Section 9.      | ADMINISTRATIVE AGENT                                                                                                                                                                        |
| 9.1             | Appointment                                                                                                                                                                                 |
| 9.2             | Powers and Duties; General Immunity                                                                                                                                                         |
| 9.3             | Representations and Warranties; No  Responsibility For Appraisal of Creditworthiness                                                                                                        |
| 9.4             | Right to Indemnity                                                                                                                                                                          |
| 9.5             | Successor Administrative Agent and  Successor Swing Line Lender                                                                                                                             |
| 9.6             | Collateral Documents and Guaranties                                                                                                                                                         |
| 9.7             | Administrative Agent May File Proofs of Claim                                                                                                                                               |
|            |                                                                                                                                                                                        |
| Section  10.    | MISCELLANEOUS                                                                                                                                                                               |
| 10.1            | Assignments and Participations in Loans and  Letters of Credit                                                                                                                              |
| 10.2            | Expenses                                                                                                                                                                                    |
| 10.3            | Indemnity                                                                                                                                                                                   |
| 10.4            | Set-Off; Security Interest in Deposit  Accounts                                                                                                                                             |
| 10.5            | Ratable Sharing                                                                                                                                                                             |
| 10.6            | Amendments and Waivers                                                                                                                                                                      |
| 10.7            | Independence of Covenants                                                                                                                                                                   |
| 10.8            | Notices; Effectiveness of Signatures                                                                                                                                                        |
| 10.9            | Survival of Representations, Warranties and  Agreements                                                                                                                                     |
| 10.10           | Failure or Indulgence Not Waiver; Remedies  Cumulative                                                                                                                                      |
| 10.11           | Marshalling; Payments Set Aside                                                                                                                                                             |
| 10.12           | Severability                                                                                                                                                                                |
| 10.13           | Obligations Several; Independent Nature of  Lenders’ Rights                                                                                                                            |
| 10.14           | Headings                                                                                                                                                                                    |
| 10.15           | Applicable Law                                                                                                                                                                              |
| 10.16           | Successors and Assigns                                                                                                                                                                      |
| 10.17           | Consent to Jurisdiction and Service of  Process                                                                                                                                             |
| 10.18           | Waiver of Jury Trial                                                                                                                                                                        |
| 10.19           | Confidentiality                                                                                                                                                                             |
| 10.20           | Co-Lead Arranger, Bookrunner, Syndication  Agent and Co-Documentation Agent                                                                                                                 |
| 10.21           | Counterparts; Effectiveness                                                                                                                                                                 |
|            |                                                                                                                                                                                        |
| Signature pages |                                                                                                                                                                                        |

 

**LODGENETENTERTAINMENT CORPORATION**

 

**CREDITAGREEMENT**

 

This **CREDITAGREEMENT** is dated as of August 29, 2001 and entered into by andamong **LODGENETENTERTAINMENT CORPORATION**, a Delaware corporation (“**Borrower**”),**THEFINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF****OR PARTY FROM TIME TO TIME HERETO**(eachindividually referred to herein as a “**Lender**” and collectively as “**Lenders**”),**CANADIAN IMPERIAL BANK OF COMMERCE**,acting through one or more of its agencies, branches or affiliates (“**CIBC**”), as administrative agent for Lenders(in such capacity, “**Administrative Agent**”), **BEAR STEARNS CORPORATE LENDING INC.**, assyndication agent (in such capacity, “**SyndicationAgent**”), **U.S. BANK NATIONALASSOCIATION** and **FLEET NATIONALBANK**, as co-documentation agents (in such capacity, “**Co-Documentation Agents**”), **CIBC WORLD MARKETS CORP.** and **BEAR, STEARNS & CO. INC.,**as co-leadarrangers and bookrunners (in such capacity, “**Co-LeadArrangers**”) and **CIBC, INC.**,as swing line lender (in such capacity, the “**SwingLine Lender**”).

** **

**RE C I T A L S**

 

**WHEREAS,**Lenders, at the request of Borrower, have agreed to extend certain creditfacilities to Borrower, in the aggregate original principal amount of$225,000,000, the proceeds of which will be used (i) to refinance all of theobligations of Borrower owing under the Existing Credit Agreement, and (ii) toprovide financing for working capital and other general corporate purposes ofBorrower and its Subsidiaries, including capital expenditures, acquisitions andinvestments;

** **

**WHEREAS,** Borrower desires to secure all of theObligations hereunder and under the other Loan Documents by granting toAdministrative Agent, on behalf of Lenders, a First Priority Lien onsubstantially all of its real, personal and mixed property, including a pledgeof all of the Capital Stock of each of its Domestic Subsidiaries (with theexception of AmNet, unless Borrower has not dissolved such Subsidiary by thedate that is 30 days after the Closing Date) and all of the non-voting and 65%of the voting Capital Stock of its Foreign Subsidiaries; and

** **

**WHEREAS,** all of the Domestic Subsidiaries ofBorrower (with the exception of certain inactive Domestic Subsidiaries ofBorrower without assets or income) have agreed to guarantee the Obligationshereunder and under the other Loan Documents and to secure their guaranties bygranting to Administrative Agent, on behalf of Lenders, a First Priority Lienon substantially all of their real, personal and mixed property, including apledge of all of the Capital Stock of each of their Domestic Subsidiaries (ifany) and all of the non-voting and 65% of the voting Capital Stock of theirrespective Foreign Subsidiaries (if any):

 

**NOW, THEREFORE,** in consideration of the premises and theagreements, provisions and covenants herein contained, Borrower, Lenders,Administrative Agent, Syndication Agent, Co-Documentation Agents, Co-LeadArrangers and Swing Line Lender agree as follows:

** **

**Section 1.              DEFINITIONS**

** **

**1.1          Certain Defined Terms**.

 

Thefollowing terms used in this Agreement shall have the following meanings:

** **

**“Additional Mortgaged Property”** has the meaning assigned to that term insubsection 6.9A.

** **

**“Additional Mortgages”** has the meaning assigned to that term insubsection 6.9A.

 

“**AdjustedLIBOR**” means, for any Interest Rate Determination Date with respectto an Interest Period for a LIBOR Loan, the rate per annum obtained by dividing(x) the rate of interest equal to (a) the rate per annum determined on thebasis of the rate for deposits in Dollars for a period equal to such InterestPeriod commencing on the first day of such Interest Period and appearing onTelerate Screen 3750 at or about 11:00 A.M., London time, two Business Daysprior to the commencement of such Interest Period, or (b) if such a rate doesnot appear on Telerate Screen 3750, the average of the rates per annum at whichDollar deposits in immediately available funds are offered to CIBC in theinterbank LIBOR market as at or about 11:00 A.M. (New York City time) twoBusiness Days prior to the beginning of such Interest Period for delivery on thefirst day of such Interest Period, and for a period approximately equal to suchInterest Period, by (y) a percentage equal to 100% minus thestated maximum rate (expressed as a percentage) of all reserve requirements(including any marginal, emergency, supplemental, special or other reserves)applicable on such Interest Rate Determination Date to any member bank of theFederal Reserve System in respect of “Eurocurrency liabilities” as defined inRegulation D (or any successor category of liabilities under Regulation D).

** **

**“Administrative Agent”** has the meaning assigned to that term inthe introduction to this Agreement and also means and includes any successorAdministrative Agent appointed pursuant to subsection 9.5A.

 

“**AdministrativeAgent’s Office**” means (i) the office of Administrative Agent locatedat CIBC, 425 Lexington Avenue, New York, NY 10017, or (ii) such otheroffice of Administrative Agent as may from time to time hereafter be designatedas such in a written notice delivered by Administrative Agent to Borrower andeach Lender.

** **

**“Affected Lender”** has the meaning assigned to that term insubsection 2.6C.

** **

**“Affected Loans”** has the meaning assigned to that term insubsection 2.6C.

 

**“Affiliate”**, as applied to any Person, means anyother Person directly or indirectly controlling, controlled by, or under commoncontrol with, that Person.  For thepurposes of this definition, “control” (including, with correlative meanings,the terms “controlling”, “controlled by” and “under common control with”), asapplied to any Person, means the possession, directly or indirectly, of thepower to direct or cause the direction of the management and policies of thatPerson, whether through the ownership of voting securities or by contract orotherwise.  For purposes of thisdefinition, a Person shall be deemed to be “controlled by” a Person if suchPerson possesses, directly or indirectly, power to vote 15% or more of thesecurities having ordinary voting power for the election of directors of suchPerson.  Notwithstanding the foregoing,neither Administrative Agent nor any Lender shall be deemed to be an Affiliateof any of the Loan Parties.

** **

**“Agents”** means, collectively, AdministrativeAgent and Syndication Agent.

** **

**“Agreement”** means this Credit Agreement dated as ofAugust 29, 2001.

** **

**“AmNet”** means AmNet, Inc., a Delawarecorporation and a Subsidiary of Borrower.

 

“**ApplicableBase Rate Margin**” means, as at any date of determination, withrespect to any Type of Loan that is a Base Rate Loan, a percentage per annumequal to the Applicable LIBOR Margin for such Type of Loan less 1.25%.

 

“**ApplicableLIBOR Margin**” means (a) with respect to Term Loans that are LIBORLoans, 4.00% per annum, and (b) with respect to Revolving Loans that are LIBORLoans, a percentage per annum as set forth below opposite the applicableConsolidated Total Leverage Ratio:

 
| **Consolidated Total Leverage Ratio**                       |   | **Applicable  LIBOR Margin** |   |
|-------------------------------------------------------------|--------|------------------------------|--------|
| greater than or equal to 4.00:1.00                          |   | 3.00                         | %      |
| less than 4.00:1.00 but greater than or equal to  3.50:1.00 |   | 2.75                         | %      |
| less than 3.50:1.00 but greater than or equal to  3.00:1.00 |   | 2.50                         | %      |
| less  than 3.00:1.00                                        |   | 2.25                         | %      |

 

; providedthat until the date that is five Business Days after the date on which Borrowerdelivers the first Margin Determination Certificate required to be delivered toAdministrative Agent pursuant to subsection 6.1(xiv), the Applicable LIBORMargin for Revolving Loans that are LIBOR Loans shall be 3.00%.

 

**“Asset Sale”** means the sale (in any singletransaction or related series of transactions) by Borrower or any of itsSubsidiaries to any Person other than Borrower or any Subsidiary Guarantor of(i) any of the Capital Stock of any of Borrower’s Subsidiaries;(ii) substantially all of the assets of any division or line of businessof Borrower or any of its Subsidiaries; or (iii) any other assets (whethertangible or intangible) of Borrower or any of its Subsidiaries (other than (a)Inventory sold in the ordinary course of business; (b) sales of assets fromBorrower or any Subsidiary Guarantor to Borrower or any Subsidiary Guarantor;(c) sales of obsolete or surplus equipment removed from hotel guest rooms inthe ordinary course of business in connection with the renewal or replacementof such equipment; provided such sales are for fair market value; and(d) any such other assets to the extent that the aggregate value of suchassets sold in any single transaction or related series of transactions isequal to $50,000 or less).

** **

**“Assignment Agreement”** means an Assignment Agreement insubstantially the form of Exhibit I annexed hereto.

** **

**“Bankruptcy Code”** means Title 11 of the United StatesCode entitled “Bankruptcy”, as now and hereafter in effect, or any successorstatute.

** **

**“Base Rate”** means, at any time, the higher of(i) the Reference Rate or (ii) the rate which is one-half of 1% inexcess of the Federal Funds Effective Rate.

** **

**“Base Rate Loans”** means Loans bearing interest at ratesdetermined by reference to the Base Rate as provided in subsection 2.2A.

** **

**“Borrower”** has the meaning assigned to that term inthe introduction to this Agreement.

 

“**Business Day**”means (i) any day excluding Saturday, Sunday and any day which is a legalholiday under the laws of the State of New York or is a day on which bankinginstitutions located in such state are authorized or required by law or othergovernmental action to close, and (ii) with respect to all notices,determinations, fundings and payments in connection with the Adjusted LIBOR orany LIBOR Loan, any day that (a) is a Business Day described in clause (i)above, and (b) is a day for trading by and between banks in Dollar deposits inthe London Interbank Market.

** **

**“Capital Lease”**, as applied to any Person, means anylease of any property (whether real, personal or mixed) by that Person aslessee that, in conformity with GAAP, is accounted for as a capital lease onthe balance sheet of that Person; provided, however, that theterm “**Capital Lease**” shall not bedeemed to include video service leases and similar agreements utilized byBorrower or its Subsidiaries in the ordinary course of business for the purposeof obtaining the right to deliver cable television programming and/or otherinteractive, multimedia entertainment and information services to specificcustomer properties.

** **

**“CapitalStock”** means thecapital stock or other equity, membership or ownership interests of a Person.

**“Cash”** means money, currency or a credit balance in aDeposit Account.

** **

**“Cash Equivalents”** means, as at any date of determination,(i) marketable securities (a) issued or directly and unconditionally guaranteedas to interest and principal by the United States Government or (b) issued byany agency of the United States the obligations of which are backed by the fullfaith and credit of the United States, in each case maturing within one yearafter such date; (ii) marketable direct obligations issued by any state of theUnited States of America or any political subdivision of any such state or anypublic instrumentality thereof, in each case maturing within one year aftersuch date and having, at the time of the acquisition thereof, the highestrating obtainable from either S&P or Moody’s; (iii) commercial papermaturing no more than one year from the date of creation thereof and having, atthe time of the acquisition thereof, a rating of at least A-1 from S&P or atleast P-1 from Moody’s; (iv) certificates of deposit or bankers’acceptances maturing within one year after such date and issued or accepted byany Lender or by any commercial bank organized under the laws of the UnitedStates of America or any state thereof or the District of Columbia that (a) isat least “adequately capitalized” (as defined in the regulations of its primaryFederal banking regulator) and (b) has Tier 1 capital (as defined in suchregulations) of not less than $100,000,000; and (v) shares of any moneymarket mutual fund that (a) has at least 95% of its assets investedcontinuously in the types of investments referred to in clauses (i) and (ii)above, (b) has net assets of not less than $500,000,000, and (c) has thehighest rating obtainable from either S&P or Moody’s.

** **

**“Changein Control”** meanseither of the following:  (i) any Personacting in concert with one or more other Persons shall have acquired beneficialownership, directly or indirectly, of Securities of Borrower (or other Securitiesconvertible into such Securities) representing 40% or more of the combinedvoting power of all Securities of Borrower entitled to vote in the election ofmembers of the Governing Body of Borrower, other than Securities having suchpower only by reason of the happening of a contingency; or (ii) individuals whowere members of the Governing Body of Borrower immediately prior to the eventshall cease for any reason to constitute a majority of the members of theGoverning Body of Borrower then in office. As used herein, “beneficial ownership” shall have the meaning providedin Rule 13d-3 of the Securities and Exchange Commission promulgated under theExchange Act.

** **

**“Class”** means**,**as applied to Lenders, each of the following two classes of Lenders:  (i) Lenders having Revolving Loan Exposure,and (ii) Lenders having Term Loan Exposure.

** **

**“Closing Date”** means the date on which the initialLoans are made.

** **

**“Closing Date Mortgaged Property”** has the meaning assigned to that term insubsection 4.1N.

 

“**Closing Date Mortgage**” has the meaningassigned to that term in subsection 4.1N.

 

**“Closing Date Mortgage Policy”** has the meaning assigned to that term insubsection 4.1N.

** **

**“Co-Documentation Agents”** has the meaning assigned to that term inthe introduction to this Agreement.

** **

** “Co-Lead Arrangers”**has the meaning assigned to that term inthe introduction to this Agreement.

** **

**“Collateral”** means, collectively, all of the real,personal and mixed property (including Capital Stock ) in which Liens arepurported to be granted pursuant to the Collateral Documents as security forthe Obligations.

 

“**Collateral Access Agreement**” means anylandlord waiver, mortgagee waiver, bailee letter or any similar acknowledgementor agreement of any landlord or mortgagee in respect of any Real Property Assetwhere any Collateral is located or any warehouseman or processor in possessionof any Inventory of any Loan Party, which agreement shall (i) provide that suchlessor, bailee or other party shall not terminate such agreement as a result ofa default by such Loan Party thereunder without first giving AdministrativeAgent notice of such default and at least 60 days (or, if such default cannotreasonably be cured by Administrative Agent within such period, such longerperiod as may reasonably be required) to cure such defaults, (ii) grantAdministrative Agent the right to sell, remove or otherwise dispose of anyCollateral located at such Real Property Asset during the term of suchagreement and for a reasonable period of time (but in no event less than 30days) after the termination of such agreement, and (iii) contain such othermatters relating to such Real Property Asset as Administrative Agent mayreasonably request, all in form and substance reasonably acceptable toAdministrative Agent.

** **

**“Collateral Account”** has the meaning assigned to that term inthe Security Agreement.

 

**“Collateral Documents”** means the Security Agreement, theMortgages, the Irrevocable Proxies and all other instruments or documentsdelivered by any Loan Party pursuant to this Agreement or any of the other LoanDocuments in order to grant to Administrative Agent, on behalf of Lenders, aLien on any real, personal or mixed property of that Loan Party as security forthe Obligations.

 

**“Commitments”** means the commitments of Lenders to makeLoans as set forth in subsection 2.1A.

 

**“Compliance Certificate”** means a certificate substantially in theform of Exhibit III annexed hereto delivered to AdministrativeAgent and Lenders by Borrower pursuant to subsection 6.1(iii).

** **

**“Confidential Information Memorandum”** means that certain ConfidentialInformation Memorandum dated July 2001 and any supplements thereto relating tothe credit facilities evidenced by this Agreement.

 

**“Conforming Leasehold Interest”** means any Recorded Leasehold Interest asto which the lessor has agreed in writing for the benefit of AdministrativeAgent (which writing has been delivered to Administrative Agent), whether underthe terms of the applicable lease, under the terms of a Landlord Consent andEstoppel, or otherwise, to the matters described in the definition of “LandlordConsent and Estoppel,” which interest, if a subleasehold or sub-subleaseholdinterest, is not subject to any contrary restrictions contained in a superiorlease or sublease.

** **

**“Consolidated Capital Expenditures”** means, for any period, the sum of theaggregate of all expenditures (whether paid in Cash or other consideration oraccrued as a liability and including that portion of Capital Leases which iscapitalized on the consolidated balance sheet of Borrower and its Subsidiaries)by Borrower and its Subsidiaries during that period that, in conformity withGAAP, are included in “additions to property, plant or equipment” or comparableitems reflected in the consolidated statement of cash flows of Borrower and itsSubsidiaries.  For purposes of thisdefinition, (a) the purchase price of equipment that is purchasedsimultaneously with the trade-in of existing equipment or with insuranceproceeds shall be included in Consolidated Capital Expenditures only to theextent of the gross amount of such purchase price less the credit granted bythe seller of such equipment for the equipment being traded in at such time orthe amount of such proceeds, as the case may be, and (b) the aggregate of allexpenditures by Borrower and its Subsidiaries during that period to acquire (bypurchase or otherwise) the business, property or fixed assets of any Person, orthe Capital Stock or other evidence of beneficial ownership of any Person that,as a result of such acquisition, becomes a Subsidiary of Borrower shall beincluded in Consolidated Capital Expenditures.

** **

**“Consolidated Cash Interest Expense”** means, for any period, ConsolidatedInterest Expense for such period excluding, however, any interestexpense not payable in Cash (including amortization of discount andamortization of debt issuance costs).

** **

**“Consolidated EBITDA”** means, for any period, the sum, withoutduplication, of the amounts for such period of (i) Consolidated NetIncome, (ii) Consolidated Interest Expense, (iii) provisions fortaxes based on income, (iv) total depreciation expense, (v) totalamortization expense, and (vi) other non-recurring and non-cash itemsreducing Consolidated Net Income, less interest income and anynon-recurring and non-cash items increasing Consolidated Net Income, all of theforegoing as determined on a consolidated basis for Borrower and itsSubsidiaries in conformity with GAAP.

 

**“Consolidated Excess Cash Flow”** means, for any period, an amount (ifpositive) equal to (i) Consolidated EBITDA (determined by adding back theretoany amount deducted in the calculation of Consolidated Net Income that waspaid, incurred or accrued in violation of any of the provisions of thisAgreement) for such period minus (ii) the sum, without duplication,of the amounts for such period of (a) voluntary and scheduled repayments ofConsolidated Total Debt (excluding repayments of Revolving Loans except to theextent the Revolving Loan Commitments are permanently reduced in connectionwith such repayments), (b) Consolidated Capital Expenditures (net of anyproceeds of any related financings with respect to such expenditures),(c) Consolidated Cash Interest Expense, and (d) the provision forcurrent taxes based on income of Borrower and its Subsidiaries and payable inCash with respect to such period.

 

**“Consolidated Interest CoverageRatio”** means, for any period, the ratio of (a) Consolidated EBITDA for suchperiod to (b) Consolidated Cash Interest Expense minus the aggregateamount of interest income in cash received by Borrower and its Subsidiariesduring such period.

** **

**“Consolidated Interest Expense”** means, for any period, total interestexpense (including that portion attributable to Capital Leases in accordancewith GAAP and capitalized interest) of Borrower and its Subsidiaries on aconsolidated basis with respect to all outstanding Indebtedness of Borrower andits Subsidiaries, including all commissions, discounts and other fees andcharges owed with respect to letters of credit and bankers’ acceptancefinancing and net costs under Interest Rate Agreements, but excluding, however,any amounts referred to in subsection 2.3 payable to Administrative Agentand Lenders on or before the Closing Date.

 

**“Consolidated Net Income”** means, for any period, the net income(or loss) of Borrower and its Subsidiaries on a consolidated basis for suchperiod taken as a single accounting period determined in conformity with GAAP; providedthat there shall be excluded (i) the income (or loss) of any Person (otherthan a Subsidiary of Borrower) in which any other Person (other than Borroweror any of its Subsidiaries) has a joint interest, except to the extent of theamount of dividends or other distributions actually paid to Borrower or any ofits Subsidiaries by such Person during such period, (ii) the income (orloss) of any Person accrued prior to the date it becomes a Subsidiary ofBorrower or is merged into or consolidated with Borrower or any of itsSubsidiaries or that Person’s assets are acquired by Borrower or any of itsSubsidiaries, (iii) the income of any Subsidiary of Borrower to the extentthat the declaration or payment of dividends or similar distributions by thatSubsidiary of that income is not at the time permitted by operation of theterms of its charter or any agreement, instrument, judgment, decree, order,statute, rule or governmental regulation applicable to that Subsidiary,(iv) any after-tax gains or losses attributable to Asset Sales or returnedsurplus assets of any Pension Plan, and (v) (to the extent not included inclauses (i) through (iv) above) any net extraordinary gains or netnon-cash extraordinary losses.

 

“**ConsolidatedSenior Secured Debt**” means, as at any date of determination,Consolidated Total Debt less the aggregate principal amount of allunsecured Indebtedness of Borrower and its Subsidiaries, determined on aconsolidated basis.

 

“**Consolidated Senior Secured LeverageRatio**” means, as atthe last day of any Fiscal Quarter, the ratio of (a) Consolidated SeniorSecured Debt as of the last day of such Fiscal Quarter, to(b) Consolidated EBITDA for the four Fiscal Quarter period then ended; providedthat in calculating Consolidated EBITDA for such period, any Asset Sales orother acquisitions or dispositions of assets during such period shall have beendeemed to have occurred on the first day of such period.

 

“**ConsolidatedTotal Debt**” means, as at any date of determination, the aggregateprincipal amount of all Indebtedness of Borrower and its Subsidiaries, otherthan the face amount of letters of credit where the conditions to drawing havenot been met, determined on a consolidated basis, less, until March 31,2002, the amount of Cash and Cash Equivalents.

 

“**ConsolidatedTotal Leverage Ratio**” means, as at the last day of any Fiscal Quarter,the ratio of (a) Consolidated Total Debt as of the last day of such FiscalQuarter, to (b) Consolidated EBITDA for the four Fiscal Quarter periodthen ended; provided that in calculating Consolidated EBITDA for suchperiod, any Asset Sales or other acquisitions or dispositions of assets duringsuch period shall have been deemed to have occurred on the first day of suchperiod.

** **

**“Contingent Obligation”**, as applied to any Person, means anydirect or indirect liability, contingent or otherwise, of that Person(i) with respect to any Indebtedness, lease, dividend or other obligationof another if the primary purpose or intent thereof by the Person incurring theContingent Obligation is to provide assurance to the obligee of such obligationof another that such obligation of another will be paid or discharged, or thatany agreements relating thereto will be complied with, or that the holders ofsuch obligation will be protected (in whole or in part) against loss in respectthereof, or (ii) under Hedge Agreements. Contingent Obligations shall include (a) the direct or indirectguaranty, endorsement (otherwise than for collection or deposit in the ordinarycourse of business), co-making, discounting with recourse or sale with recourseby such Person of the obligation of another, (b) the obligation to maketake-or-pay or similar payments if required regardless of non-performance byany other party or parties to an agreement, and (c) any liability of suchPerson for the obligation of another through any agreement (contingent orotherwise) (1) to purchase, repurchase or otherwise acquire suchobligation or any security therefor, or to provide funds for the payment ordischarge of such obligation (whether in the form of loans, advances, stockpurchases, capital contributions or otherwise) or (2) to maintain thesolvency or any balance sheet item, level of income or financial condition ofanother if, in the case of any agreement described under subclauses (1) or (2)of this sentence, the primary purpose or intent thereof is as described in thepreceding sentence.  The amount of anyContingent Obligation shall be equal to the amount of the obligation soguaranteed or otherwise supported or, if less, the amount to which such ContingentObligation is specifically limited.

** **

**“Contractual Obligation”**, as applied to any Person, means anyprovision of any Security issued by that Person or of any contract to whichthat Person is a party or by which it or any of its properties is bound or towhich it or any of its properties is subject.

** **

**“Copyright Office”** means the United States Copyright Officeor any successor or substitute office in which filings are necessary or, in theopinion of the Administrative Agent, desirable, in order to create or perfectLiens on any IP Collateral.

** **

**“Currency Agreement”** means any foreign exchange contract,currency swap agreement, futures contract, option contract, synthetic cap orother similar agreement or arrangement to which Borrower or any of itsSubsidiaries is a party.

** **

**“Deposit Account”** means a demand, time, savings, passbookor similar account maintained with a Person engaged in the business of banking,including a savings bank, savings and loan association, credit union or trustcompany.

** **

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

** **

**“Domestic Subsidiary”** means any Subsidiary of Borrower that isincorporated or organized under the laws of the United States of America, anystate thereof or in the District of Columbia.

 

“**EligibleAssignee**” means (A) (i) a commercial bank organized under thelaws of the United States or any state thereof; (ii) a savings and loanassociation or savings bank organized under the laws of the United States orany state thereof; (iii) a commercial bank organized under the laws of anyother country or a political subdivision thereof (provided that(x) such bank is acting through a branch or agency located in the UnitedStates or (y) such bank is organized under the laws of a country that is amember of the Organization for Economic Cooperation and Development or apolitical subdivision of such country); and (iv) any other entity which isan “accredited investor” (as defined in Regulation D under the Securities Act)which extends credit or buys loans as one of its businesses including insurancecompanies, mutual funds, lease financing companies and investment funds;(B) a Lender, an Affiliate of a Lender; (C) any Fund that is managed by aPerson described in clauses (A) or (B) above or the same investment advisor oran Affiliate of the same investment advisor of a Person described in clauses(A) or (B) above (an “**Approved Fund**”);or (D) any other Person (other than a natural Person) approved by (1)Administrative Agent, (2) in the case of any assignment of a Revolving Loan,Issuing Lender, and (3) unless (x) such Person is taking delivery of anassignment in connection with physical settlement of a credit derivativestransaction, or (y) an Event of Default or Potential Event of Default hasoccurred and is continuing, Borrower (each such approval not to be unreasonablywithheld or delayed); provided that no Affiliate of Borrower shall be anEligible Assignee.

** **

**“Employee Benefit Plan”** means any “employee benefit plan” asdefined in Section 3(3) of ERISA which is or, during the preceding six (6)calendar years, was maintained or contributed to by Borrower, any of itsSubsidiaries or any of their respective ERISA Affiliates.

** **

**“Environmental Claim”** means any investigation, notice, noticeof violation, claim, action, suit, proceeding, demand, abatement order or otherorder or directive (conditional or otherwise), by any Government Authority orany other Person, arising (i) pursuant to or in connection with any actual oralleged violation of any Environmental Law, (ii) in connection with any HazardousMaterials or any actual or alleged Hazardous Materials Activity, or (iii) inconnection with any actual or alleged damage, injury, threat or harm to health,safety, natural resources or the environment.

** **

**“Environmental Laws”** means any and all current or futurestatutes, ordinances, orders, rules, regulations, guidance documents,judgments, Governmental Authorizations, or any other requirements of anyGovernment Authority relating to (i) environmental matters, includingthose relating to any Hazardous Materials Activity, (ii) the generation,use, storage, transportation or disposal of Hazardous Materials, or(iii) occupational safety and health, industrial hygiene, land use or theprotection of human, plant or animal health or welfare, in any manner applicableto Borrower or any of its Subsidiaries or any Facility, including theComprehensive Environmental Response, Compensation, and Liability Act (42U.S.C. § 9601 etseq.), the Hazardous MaterialsTransportation Act (49 U.S.C. § 1801 etseq.), the Resource Conservationand Recovery Act (42 U.S.C. § 6901 etseq.), the FederalWater Pollution Control Act (33 U.S.C. § 1251 etseq.), theClean Air Act (42 U.S.C. § 7401 etseq.), the ToxicSubstances Control Act (15 U.S.C. § 2601 etseq.), theFederal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. §136 etseq.),the Occupational Safety and Health Act (29 U.S.C. § 651 etseq.),the Oil Pollution Act (33 U.S.C. § 2701 et seq.) and the EmergencyPlanning and Community Right-to-Know Act (42 U.S.C. § 11001 etseq.),each as amended or supplemented, any analogous present or future state or localstatutes or laws, and any regulations promulgated pursuant to any of theforegoing.

** **

**“ERISA”** means the Employee Retirement IncomeSecurity Act of 1974.

** **

**“ERISA Affiliate”**means, as applied to any Person (i) anycorporation that is a member of a controlled group of corporations within themeaning of Section 414(b) of the Internal Revenue Code of which that Person isa member; (ii) any trade or business (whether or not incorporated) that is amember of a group of trades or businesses under common control within themeaning of Section 414(c) of the Internal Revenue Code of which that Person isa member; and (iii) any member of an affiliated service group within themeaning of Section 414(m) or (o) of the Internal Revenue Code of which thatPerson is a member.  Any former ERISAAffiliate of a Person or any of its Subsidiaries shall continue to beconsidered an ERISA Affiliate of such Person or such Subsidiary within themeaning of this definition with respect to the period such entity was an ERISAAffiliate of such Person or such Subsidiary and with respect to liabilitiesarising after such period for which such Person or such Subsidiary could beliable under the Internal Revenue Code or ERISA.

 

**“ERISA Event”** means (i) a “reportable event” withinthe meaning of Section 4043 of ERISA and the regulations issued thereunder withrespect to any Pension Plan (excluding those for which the provision for 30-daynotice to the PBGC has been waived by regulation); (ii) the failure to meet theminimum funding standard of Section 412 of the Internal Revenue Code withrespect to any Pension Plan (whether or not waived in accordance with Section412(d) of the Internal Revenue Code) or the failure to make by its due date arequired installment under Section 412(m) of the Internal Revenue Code withrespect to any Pension Plan or the failure to make any required contribution toa Multiemployer Plan; (iii) the provision by the administrator of any PensionPlan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminatesuch plan in a distress termination described in Section 4041(c) of ERISA; (iv)the withdrawal by Borrower, any of its Subsidiaries or any of their respectiveERISA Affiliates from any Pension Plan with two or more contributing sponsorsor the termination of any such Pension Plan resulting in liability pursuant toSection 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedingsto terminate any Pension Plan, or the occurrence of any event or conditionwhich constitutes grounds under ERISA for the termination of, or theappointment of a trustee to administer, any Pension Plan; (vi) the impositionof liability on Borrower, any of its Subsidiaries or any of their respectiveERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason ofthe application of Section 4212(c) of ERISA; (vii) the withdrawal of Borrower,any of its Subsidiaries or any of their respective ERISA Affiliates in acomplete or partial withdrawal (within the meaning of Sections 4203 and 4205 ofERISA) from any Multiemployer Plan if there is any potential liabilitytherefor, or the receipt by Borrower, any of its Subsidiaries or any of theirrespective ERISA Affiliates of notice from any Multiemployer Plan that it is inreorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or thatit intends to terminate or has terminated under Section 4041A or 4042 of ERISA;(viii) the occurrence of an act or omission which could give rise to theimposition on Borrower, any of its Subsidiaries or any of their respectiveERISA Affiliates of material fines, penalties, taxes or related charges underChapter 43 of the Internal Revenue Code or under Section 409, Section 502(c),(i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan;(ix) the assertion of a material claim (other than routine claims for benefits)against any Employee Benefit Plan other than a Multiemployer Plan or the assetsthereof, or against Borrower, any of its Subsidiaries or any of theirrespective ERISA Affiliates in connection with any Employee Benefit Plan; (x)receipt from the Internal Revenue Service of notice of the failure of anyPension Plan (or any other Employee Benefit Plan intended to be qualified underSection 401(a) of the Internal Revenue Code) to qualify under Section 401(a) ofthe Internal Revenue Code, or the failure of any trust forming part of anyPension Plan to qualify for exemption from taxation under Section 501(a) of theInternal Revenue Code; or (xi) the imposition of a Lien pursuant to Section401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA withrespect to any Pension Plan.

** **

**“Event of Default”** means each of the events set forth inSection 8.

** **

**“Exchange Act”** means the Securities Exchange Act of1934.

** **

**“Existing Credit Agreement”** means that certain Second Amended andRestated Credit Agreement dated as of February 25, 1999 among Borrower,National Westminster Bank PLC, as Administrative Agent, Bankboston, N.A. andMorgan Stanley Senior Funding, Inc., as Syndication Agents and the lendersnamed therein, as amended prior to the Closing Date.

** **

**“Facilities”** means all real property (including allbuildings, fixtures or other improvements located thereon) now, hereafter orheretofore owned, leased, operated or used by Borrower or any of itsSubsidiaries or any of their respective predecessors or Affiliates.

** **

**“Federal Funds Effective Rate”** means, for any period, a fluctuatinginterest rate equal for each day during such period to the weighted average ofthe rates on overnight Federal funds transactions with members of the FederalReserve System arranged by Federal funds brokers, as published for such day(or, if such day is not a Business Day, for the next preceding Business Day) bythe Federal Reserve Bank of New York, or, if such rate is not so published forany day which is a Business Day, the average of the quotations for such day onsuch transactions received by Administrative Agent from three Federal funds brokersof recognized standing selected by Administrative Agent.

** **

**“Financial Plan”** has the meaning assigned to that term insubsection 6.1(x).

** **

**“First Priority”** means, with respect to any Lienpurported to be created in any Collateral pursuant to any Collateral Document,that (i) such Lien is perfected and has priority over any other Lien on suchCollateral other than Liens permitted pursuant to subsection 7.2A(i),  7.2A(iii) and 7.2A(iv); and (ii) such Lienis the only Lien (other than Liens permitted pursuant to subsection 7.2A) towhich such Collateral is subject.

** **

**“Fiscal Quarter”** means a fiscal quarter of any FiscalYear.

** **

**“Fiscal Year”** means the fiscal year of Borrower andits Subsidiaries ending on December 31 of each calendar year.

** **

**“Flood Hazard Property”** means a Closing Date Mortgaged Propertyor an Additional Mortgaged Property located in an area designated by theFederal Emergency Management Agency as having special flood or mud slidehazards.

** **

**“Foreign Subsidiary”** means any Subsidiary of Borrower that isnot a Domestic Subsidiary.

 

“**Fund**” means any Person (other than anatural Person) that is (or will be) engaged in making, purchasing, holding orotherwise investing in commercial loans and similar extensions of credit in theordinary course of its business.

 

“**Funded Debt**”, as applied to any Person,means all Indebtedness of that Person (including any current portions thereof)which by its terms or by the terms of any instrument or agreement relatingthereto matures more than one year from, or is directly renewable or extendableat the option of that Person to a date more than one year from (including anoption of that Person under a revolving credit or similar agreement obligatingthe lender or lenders to extend credit over a period of one year or more from),the date of the creation thereof.

** **

**“Funding Date”** means the date of the funding of a Loan.

** **

**“GAAP”** means, subject to the limitations on the applicationthereof set forth in subsection 1.2, generally accepted accounting principlesset forth in opinions and pronouncements of the Accounting Principles Board ofthe American Institute of Certified Public Accountants and statements andpronouncements of the Financial Accounting Standards Board or in such otherstatements by such other entity as may be approved by a significant segment ofthe accounting profession, in each case as the same are applicable to thecircumstances as of the date of determination.

** **

**“Governing Body”** means the board of directors or otherbody having the power to direct or cause the direction of the management andpolicies of a Person that is a corporation, partnership, trust or limitedliability company.

** **

**“Government Authority”** means any political subdivision ordepartment thereof, any other governmental or regulatory body, commission,central bank, board, bureau, organ or instrumentality or any court, in eachcase whether federal, state, local or foreign.

** **

**“Governmental Authorization”** means any permit, license, registration,authorization, plan, directive, consent, order or consent decree of or from, ornotice to, any Government Authority.

** **

**“Guest-Pay Rooms”** means, at any time of determination, theaggregate number of guest rooms of all lodging, hospital, cruise line andrelated properties located in the United States or Canada (or in the case ofcruise lines, cruise lines that are operated by a shipping line flying the flagof the United States or Canada), which have a firm, enforceable contract withBorrower or any of its Subsidiaries for the provision of in-room televisionentertainment and/or information services which are provided to the guests ofsuch property for a charge and against which Borrower or such Subsidiary hasnot, in accordance with its ordinary business practice, chosen to exercise anyremedies for non-payment under such contract; provided, however,the term **“Guest-Pay Rooms”** shallexclude any guest rooms with respect to which Borrower or any of itsSubsidiaries has licensed their services and/or products to a third partyoperator.

** **

**“Hazardous Materials”** means (i) any chemical, material orsubstance at any time defined as or included in the definition of “hazardoussubstances”, “hazardous wastes”, “hazardous materials”, “extremely hazardouswaste”, “acutely hazardous waste”, “radioactive waste”, “biohazardous waste”, “pollutant”,“toxic pollutant”, “contaminant”, “restricted hazardous waste”, “infectiouswaste”, “toxic substances”, or any other term or expression intended to define,list or classify substances by reason of properties harmful to health, safetyor the indoor or outdoor environment (including harmful properties such asignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductivetoxicity, “TCLP toxicity” or “EP toxicity” or words of similar import under anyapplicable Environmental Laws); (ii) any oil, petroleum, petroleumfraction or petroleum derived substance; (iii) any drilling fluids,produced waters and other wastes associated with the exploration, developmentor production of crude oil, natural gas or geothermal resources; (iv) anyflammable substances or explosives; (v) any radioactive materials;(vi) any asbestos-containing materials; (vii) urea formaldehyde foaminsulation; (viii) electrical equipment which contains any oil ordielectric fluid containing polychlorinated biphenyls; (ix) pesticides;and (x) any other chemical, material or substance, exposure to which isprohibited, limited or regulated by any Government Authority or which may orcould pose a hazard to the health and safety of the owners, occupants or any Personsin the vicinity of any Facility or to the indoor or outdoor environment.

** **

**“Hazardous Materials Activity”** means any past, current, proposed orthreatened activity, event or occurrence involving any Hazardous Materials,including the use, manufacture, possession, storage, holding, presence,existence, location, Release, threatened Release, discharge, placement,generation, transportation, processing, construction, treatment, abatement,removal, remediation, disposal, disposition or handling of any Hazardous Materials,and any corrective action or response action with respect to any of theforegoing.

** **

**“Hedge Agreement”** means an Interest Rate Agreement or aCurrency Agreement designed to hedge against fluctuations in interest rates orcurrency values, respectively.

** **

**“IncreasingLenders”**has themeaning assigned to that term in subsection 2.1A(iv).

** **

**“Indebtedness”**means, as applied to any Person (i) allindebtedness for borrowed money, (ii) all obligations of such Person evidencedby bonds, debentures, notes or similar instruments, or upon which interestpayments are customarily made without regard to any original issue discountrelating thereto, (iii) that portion of obligations with respect toCapital Leases that is properly classified as a liability on a balance sheet inconformity with GAAP, (iv) all obligations owed for all or any part of thedeferred purchase price of property or services (excluding any such obligationsincurred under ERISA), which purchase price is (a) due more than sixmonths from the date of incurrence of the obligation in respect thereof or (b)evidenced by a note or similar written instrument, (v) all obligations inrespect of any preferred Capital Stock of such Person subject to mandatorysinking fund payments, redemption or other acceleration, (vi) all indebtednesssecured by any Lien on any property or asset owned, acquired or held by thatPerson regardless of whether the indebtedness secured thereby shall have beenassumed by that Person or is nonrecourse to the credit of that Person, (vii)all obligations relating to the face amount of all letters of credit orbankers’ acceptances that such Person is obligated to reimburse the relatedletter of credit bank for, (viii) all obligations of such Person as lesseeunder leases including any synthetic lease, tax retention operating lease,off-balance sheet loan or similar off-balance sheet financing product, butexcluding Operating Leases, (ix) the Indebtedness of any partnership orunincorporated joint venture in which such Person is a general partner or ajoint venturer and (x) all Contingent Obligations of such Person with respectto Indebtedness of the type set forth in clauses (i) – (ix).  Obligations under Interest Rate Agreementsconstitute (1) in the case of Hedge Agreements, Contingent Obligations, and (2)in all other cases, Investments, and in neither case constitute Indebtedness.

** **

**“Indemnitee”** has the meaning assigned to that term insubsection 10.3.

** **

**“Intellectual Property”** means all patents, patent rights, patentapplications, licenses, inventions, trade secrets, trademarks, tradenames,service marks, copyrights, technology, software, know-how and proprietarytechniques (including processes and substances) used in or necessary for theconduct of the business of Borrower and its Subsidiaries as currently conductedthat are material to the condition (financial or otherwise), business oroperations of Borrower and its Subsidiaries, taken as a whole.

** **

**“Interest Payment Date”** means (i) with respect to any BaseRate Loan, the last Business Day of each March, June, September and December ofeach year, commencing on the first such date to occur after the Closing Date,and (ii) with respect to any LIBOR Loan, the last day of each InterestPeriod applicable to such Loan; provided that in the case of eachInterest Period of six months, “Interest Payment Date” shall also include thedate that is three months after the commencement of such Interest Period.

** **

**“Interest Period”** has the meaning assigned to that term insubsection 2.2B.

** **

**“Interest Rate Agreement”** means any interest rate swap agreement,interest rate cap agreement, interest rate collar agreement or other similaragreement or arrangement to which Borrower or any of its Subsidiaries is aparty.

** **

**“Interest Rate Determination Date”** means**,**with respect to any Interest Period, the second Business Day prior to the firstday of such Interest Period.

** **

**“Internal Revenue Code”** means the Internal Revenue Code of 1986,as amended to the date hereof and from time to time hereafter, and anysuccessor statute.

 

“**Inventory**”means, with respect to any Person as of any date of determination, all goods,merchandise and other personal property which are then held by such Person forsale or lease, including raw materials and work in process.

** **

**“Investment”** means (i) any purchase or otheracquisition or commitment to purchase or acquire by Borrower or any of itsSubsidiaries of, or of a beneficial interest in, any Securities of any otherPerson (including any Subsidiary of Borrower), (ii) any direct or indirectredemption, retirement, purchase or other acquisition for value, by anySubsidiary of Borrower from any Person other than Borrower or any of itsSubsidiaries, of any equity Securities of such Subsidiary, (iii) anydirect or indirect loan, advance (other than advances to employees for moving,entertainment and travel expenses, drawing accounts and similar expenditures inthe ordinary course of business) or capital contribution by Borrower or any ofits Subsidiaries to any other Person (other than a Subsidiary Guarantor),including all indebtedness and accounts receivable from that other Person thatare not current assets or did not arise from sales to that other Person in theordinary course of business, or (iv) Interest Rate Agreements or CurrencyAgreements not constituting Hedge Agreements. The amount of any Investmentshall be the original cost or commitment of such Investment plus thecost of all additions thereto, without any adjustments for increases ordecreases in value, or write-ups, write-downs or write-offs with respect tosuch Investment (other than adjustments for the repayment of, or the refund ofcapital with respect to, the original principal amount of any such Investment).

** **

**“IP Collateral”** means, collectively, the Collateralconsisting of rights in or to Intellectual Property under the SecurityAgreement.

** **

**“IrrevocableProxies”** (i) theAmended and Restated Irrevocable Proxy of even date herewith of Borrowerrelating to ResNet Inc. shares; (ii) the Amended and Restated Irrevocable Proxyof even date herewith of Borrower relating to LodgeNet Canada shares; and (iii)the Amended and Restated Irrevocable Proxy of even date herewith of ResNet Inc.relating to its ResNet LLC ownership interest.

** **

**“Issuing Lender”** means, with respect to any Letter ofCredit, the Lender that agrees or is otherwise obligated to issue such Letterof Credit, determined as provided in subsection 3.1B(iii).

** **

**“Joint Venture”** means a joint venture, partnership orother similar arrangement, whether in corporate, partnership or other legalform; provided that in no event shall any corporate Subsidiary of anyPerson be considered to be a Joint Venture to which such Person is a party.

** **

**“Landlord Consent and Estoppel”** means, with respect to any LeaseholdProperty, a letter, certificate or other instrument in writing from the lessorunder the related lease, satisfactory in form and substance to AdministrativeAgent, pursuant to which such lessor agrees, for the benefit of AdministrativeAgent, (i) that without any further consent of such lessor or any furtheraction on the part of the Loan Party holding such Leasehold Property, suchLeasehold Property may be encumbered pursuant to a Mortgage and may be assignedto the purchaser at a foreclosure sale or in a transfer in lieu of such a sale(and to a subsequent third party assignee if Administrative Agent, any Lender,or an Affiliate of either so acquires such Leasehold Property), (ii) that suchlessor shall not terminate such lease as a result of a default by such LoanParty thereunder without first giving Administrative Agent notice of suchdefault and at least 60 days (or, if such default cannot reasonably be cured byAdministrative Agent within such period, such longer period as may reasonablybe required) to cure such default, (iii) to the matters contained in aCollateral Access Agreement, and (iv) to such other matters relating to suchLeasehold Property as Administrative Agent may reasonably request.

 

“**LC Reimbursement Amount**” has the meaningassigned to this term in subsection 3.3B.

 

**“Leasehold Property”** means any leasehold interest of any LoanParty (other than a Foreign Subsidiary) as lessee under any lease of realproperty, other than any such leasehold interest designated from time to timeby Administrative Agent in its sole discretion as not being required to beincluded in the Collateral.

** **

**“Lender”** and **“Lenders”** means the Persons identified as“Lenders” and listed on the signature pages of this Agreement, together withtheir successors and permitted assigns pursuant to subsection 10.1, and theterm “Lenders” shall include Swing Line Lender unless the context otherwiserequires; provided that the term “Lenders”, when used in the context ofa particular Commitment, shall mean Lenders having that Commitment.

** **

**“Letterof Credit”** meansany standby letter of credit or similar instrument issued for the purpose ofsupporting (i) Indebtedness of Borrower or any of its Subsidiaries in respectof industrial revenue or development bonds or financings, (ii) workers’compensation liabilities of Borrower or any of its Subsidiaries, (iii) theobligations of third party insurers of Borrower or any of its Subsidiariesarising by virtue of the laws of any jurisdiction requiring third partyinsurers, (iv) obligations with respect to Capital Leases or Operating Leasesof Borrower or any of its Subsidiaries, and (v) performance, payment, depositor surety obligations of Borrower or any of its Subsidiaries, in any case ifrequired by law or governmental rule or regulation or for any purpose for whichBorrower is permitted to use its cash; provided that Letters of Creditmay not be issued for the purpose of supporting (a) trade payables or (b) anyIndebtedness constituting “antecedent debt” (as that term is used in Section547 of the Bankruptcy Code).

 

**“Letter of Credit Usage”** means, as at any date of determination,the sum of (i) the maximum aggregate amount which is or at any timethereafter may become available for drawing under all Letters of Credit thenoutstanding plus (ii) the aggregate amount of all drawings under Lettersof Credit honored by Issuing Lenders and not theretofore reimbursed out of theproceeds of Revolving Loans pursuant to subsection 3.3B or otherwise reimbursedby Borrower.

 

“**LIBOR Loans**”means Loans bearing interest at rates determined by reference to Adjusted LIBORas provided in subsection 2.2A.

 

**“Lien”** means any lien, mortgage, pledge, assignment,security interest, charge or encumbrance of any kind (including any conditionalsale or other title retention agreement, any lease in the nature thereof, andany agreement to give any security interest) and any option, trust or otherpreferential arrangement having the practical effect of any of the foregoing.

** **

**“Loan”** or **“Loans”** means one or more of the TermLoans, Revolving Loans or Swing Line Loans or any combination thereof.

** **

**“Loan Documents”** means this Agreement, the Notes, theLetters of Credit (and any applications for, or reimbursement agreements orother documents or certificates executed by Borrower in favor of an IssuingLender relating to, the Letters of Credit), the Subsidiary Guaranty and theCollateral Documents.

** **

**“Loan Party”** means each of Borrower and any ofBorrower’s Subsidiaries from time to time executing a Loan Document, and **“LoanParties”** means all such Persons, collectively.

** **

**“LodgeNetCanada”** LodgeNetEntertainment (Canada) Corporation, a Canadian corporation and a wholly-ownedSubsidiary of Borrower.

 

“**MarginDetermination Certificate**”means an Officers’ Certificate of Borrowerdelivered (a) with respect to each Fiscal Quarter (other than each fourthFiscal Quarter), together with the most recent financial statements required tobe delivered pursuant to subsection 6.1(i), and (b) with respect to eachfourth Fiscal Quarter, within 45 days of the last day of such fourth FiscalQuarter, setting forth in reasonable detail the Consolidated Total LeverageRatio that is applicable as of the last day of the fiscal period for which suchfinancial statements and Officers’ Certificate are being delivered.

** **

**“Margin Stock”** has the meaning assigned to that term inRegulation U of the Board of Governors of the Federal Reserve System as ineffect from time to time.

 

“**Material Adverse Effect**” means any act,omission, situation, circumstance, event or undertaking which could reasonablybe expected to have, singly or in any combination with one or more other acts,omissions, situations, circumstances, events or undertakings, a materiallyadverse effect upon (a) the business, assets, properties, liabilities,condition (financial or otherwise), results of operations or prospects ofBorrower and its Subsidiaries taken as a whole; (b) the value of the whole orany material part of the Collateral, or the enforceability or priority of thesecurity interest in the Collateral; (c) the respective ability of Borrower orany of the other Loan Parties to perform any payment obligation or any othermaterial obligation under this Agreement or any other Loan Document to which itis a party; or (d) the legality, validity, binding effect or enforceability ofany Loan Document or the right to accelerate and foreclose on any materialportion of the Collateral or any other material right or remedy ofAdministrative Agent or Lenders under or in connection with any Loan Document.

** **

**“Material Contract”** means any contract, indenture, mortgage,deed of trust, understanding, agreement, instrument or other arrangement,whether written or oral, to which Borrower or any of its Subsidiaries is aparty (other than the Loan Documents), for which breach, nonperformance,cancellation or failure to renew could reasonably be expected to have aMaterial Adverse Effect.

** **

**“Material Leasehold Property”** means a Leasehold Property reasonablydetermined by Administrative Agent to be of material value as Collateral or ofmaterial importance to the operations of Borrower or any of its Subsidiaries; provided,however, that (i) any Leasehold Properties set forth on Schedule 1.1as of the Closing Date and any other additional Leasehold Properties added to Schedule1.1 from time to time with the approval of Administrative Agent andBorrower shall not be deemed to be a “Material Leasehold Property” hereunder;and (ii) unless the aggregate amount of all rents payable during any one FiscalYear with respect to a Leasehold Property, together with the aggregate amountof all rents payable during such Fiscal Year with respect to any series ofadjacent, adjoining or connected Leasehold Properties, exceeds $750,000, suchLeasehold Property shall not be deemed to be a “Material Leasehold Property”hereunder.

** **

**“Material Real Property”** means any real property owned by anyLoan Party (other than any Foreign Subsidiary) with a fair market value, at antime of determination, greater than or equal to $2,000,000 and any additionalreal property acquired or owned by any Loan Party (other than any ForeignSubsidiary) as designated in writing by Borrower to Administrative Agent inorder to comply with the terms of subsection 6.9.

** **

**“MinimumAmount”** means,with respect to each of the following actions, the minimum amount and anymultiples in excess thereof set forth opposite such action: 

 
| **Type of Action**               |   | **Minimum  Amount** |      | **Multiples  in excess thereof** |   |
|----------------------------------|--------|---------------------|-----------|----------------------------------|--------|
| Conversion into  Base Rate Loans |   | $                   | 500,000   |                             | $      | 500,000 |   |
| Conversion into  LIBOR Loans     |   | $                   | 2,000,000 |                             | $      | 100,000 |   |

 

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

 

**“Mortgage”** means (i) a security instrument (whetherdesignated as a deed of trust or a mortgage or by any similar title) executedand delivered by any Loan Party, substantially in the form of Exhibit IV-Aor Exhibit IV-B annexed hereto or in such other form as may be approvedby Administrative Agent in its sole discretion, in each case with such changesthereto as may be recommended by Administrative Agent’s local counsel based onlocal laws or customary local mortgage or deed of trust practices; or (ii) atAdministrative Agent’s option, in the case of an Additional Mortgaged Property,an amendment to an existing Mortgage, in form satisfactory to AdministrativeAgent, adding such Additional Mortgaged Property to the Real Property Assetsencumbered by such existing Mortgage.  “**Mortgages**”means all such instruments, including the Closing Date Mortgage and anyAdditional Mortgages, collectively.

** **

**“Multiemployer Plan”** means any Employee Benefit Plan that isa “multiemployer plan” as defined in Section 3(37) of ERISA.

** **

**“Net Asset Sale Proceeds”**means, with respect to any Asset Sale, Cashpayments (including any Cash received by way of deferred payment pursuant to,or by monetization of, a note receivable or otherwise, but only as and when soreceived) received from such Asset Sale, net of any bona fide direct costsincurred in connection with such Asset Sale, including (i) income taxesreasonably estimated to be actually payable within two years of the date ofsuch Asset Sale as a result of any gain recognized in connection with suchAsset Sale and (ii) payment of the outstanding principal amount of,premium or penalty, if any, and interest on any Indebtedness (other than theLoans) that is secured by a Lien on the stock or assets in question and that isrequired to be repaid under the terms thereof as a result of such Asset Sale;provided, however, that Net Asset Sale Proceeds shall not include any cashpayments received from any Asset Sale by a Foreign Subsidiary unless such proceedsmay be repatriated (by reason of a repayment of an intercompany note orotherwise) to the United States without (in the reasonable judgment ofBorrower) resulting in a material tax liability to Borrower.

** **

**“Net Insurance/Condemnation Proceeds”** means any Cash payments or proceedsreceived by Borrower or any of its Subsidiaries (i) under any businessinterruption or casualty insurance policy in respect of a covered lossthereunder or (ii) as a result of the taking of any assets of Borrower or anyof its Subsidiaries by any Person pursuant to the power of eminent domain,condemnation or otherwise, or pursuant to a sale of any such assets to apurchaser with such power under threat of such a taking, in each case net ofany actual and reasonable documented costs incurred by Borrower or any of itsSubsidiaries in connection with the adjustment or settlement of any claims ofBorrower or such Subsidiary in respect thereof.

 

“**Net Pension Proceeds**” has the meaningassigned to that term in subsection 2.4B(iv)(d).

 

“**Net Proceeds Amount**” has the meaningassigned to that term in subsection 2.4B(iii)(g).

** **

**“Net Securities Proceeds”** means the Cash proceeds (net ofunderwriting discounts and commissions and other reasonable costs and expensesassociated therewith, including reasonable legal fees and expenses) from the(i) issuance of Capital Stock of or incurrence of Indebtedness by Borrower orany of its Subsidiaries and (ii) capital contributions made by a holder ofCapital Stock of Borrower.

** **

**“NewLender”** has themeaning assigned to that term in subsection 2.1A(iv).

** **

**“Non-US Lender”** has the meaning assigned to that term insubsection 2.7B(iii)(a).

** **

**“Notes”** means one or more of the Term Notes,Revolving Notes or Swing Line Note or any combination thereof.

 

“**Notice ofBorrowing**” means a notice substantially in the form of Exhibit Vannexed hereto delivered by Borrower to Administrative Agent pursuant tosubsection 2.1B with respect to a proposed borrowing.

 

“**Notice ofConversion/Continuation**” means a notice substantially in the form ofExhibit VI annexed hereto delivered by Borrower to AdministrativeAgent pursuant to subsection 2.2D with respect to a proposed conversion orcontinuation of the applicable basis for determining the interest rate withrespect to the Loans specified therein.

** **

**“Noticeof Extension”**means a notice in substantially the form of Exhibit VII  annexed hereto delivered by Borrower toAdministrative Agent pursuant to subsections 2.10A and/or 2.10B with respect toBorrower’s election to extend the Term Loan Maturity Date and/or the RevolvingLoan Commitment Termination Date, as applicable.

 

 “**Notice of Issuance of Letter of Credit**”means a notice substantially in the form of Exhibit VIII annexedhereto delivered by Borrower to Administrative Agent pursuant to subsection3.1B(i) with respect to the proposed issuance of a Letter of Credit.

** **

**“Obligations”** means all obligations of every nature ofeach Loan Party from time to time owed to Administrative Agent, Lenders or anyof them under the Loan Documents, whether for principal, interest,reimbursement of amounts drawn under Letters of Credit, fees, expenses,indemnification or otherwise, whether contingent, direct or otherwise,including post-petition interest on such amounts accruing subsequent to, andinterest that would have accrued but for, the commencement of a proceedingunder the Bankruptcy Code (whether or not such interest is allowed as a claimin such proceeding).

 

“**Officer**” means the president, chief executiveofficer, a vice president, chief financial officer, treasurer, general partner(if an individual), managing member (if an individual) or other individualappointed by the Governing Body or the Organizational Documents of acorporation, partnership, trust or limited liability company to serve in asimilar capacity as the foregoing.

 

“**Officers’Certificate**,” asapplied to any Person that is a corporation, partnership, trust or limitedliability company, means a certificate executed on behalf of such Person by oneor more Officers of such Person or one or more Officers of a general partner ora managing member if such general partner or managing member is a corporation,partnership, trust or limited liability company; provided that everyOfficers’ Certificate with respect to the compliance with a condition precedentto the making of any Loans hereunder shall include (i) a statement thatthe Officer or Officers making or giving such Officers’ Certificate have readsuch condition and any definitions or other provisions contained in thisAgreement relating thereto, (ii) a statement that, in the opinion of thesigners, they have made or have caused to be made such examination orinvestigation as is reasonably necessary to enable them to express an informedopinion as to whether or not such condition has been complied with, and(iii) a statement as to whether, in the opinion of the signers, suchcondition has been complied with.

** **

**“Operating Lease”,** as applied to any Person, means anylease (including leases that may be terminated by the lessee at any time) ofany property (whether real, personal or mixed) that is not a Capital Leaseother than any such lease under which that Person is the lessor; provided,however, that the term “**OperatingLease**” shall not be deemed to include video service leases andsimilar agreements utilized by Borrower or its Subsidiaries in the ordinarycourse of business for the purpose of obtaining the right to deliver cabletelevision programming and/or other interactive, multimedia entertainment andinformation services to specific customer properties.

** **

**“Organizational Documents”** means the documents (including Bylaws,if applicable) pursuant to which a Person that is a corporation, partnership,trust or limited liability company is organized.

** **

**“Participant”** means apurchaser of a participation in the rights and obligations under this Agreementpursuant to subsection 10.1C.

** **

**“PBGC”** means the Pension Benefit Guaranty Corporation or anysuccessor thereto.

** **

**“Pension Plan”** means any Employee Benefit Plan, otherthan a Multiemployer Plan, which is subject to Section 412 of the InternalRevenue Code or Section 302 of ERISA.

** **

**“Permitted Encumbrances”** means the following types of Liens(excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n) ofthe Internal Revenue Code or by ERISA, any such Lien relating to or imposed inconnection with any Environmental Claim, and any such Lien expressly prohibitedby any applicable terms of any of the Collateral Documents):

 

(i)            Liens for taxes,assessments or governmental charges or claims the payment of which is not, atthe time, required by subsection 6.3A;

 

(ii)           statutory Liens oflandlords, statutory Liens and rights of set-off of banks, statutory Liens ofcarriers, warehousemen, mechanics, repairmen, workmen and materialmen, andother Liens imposed by law, in each case incurred in the ordinary course ofbusiness and in an aggregate amount not to exceed $750,000 (a) for amounts notyet overdue or (b) for amounts that are overdue and that (in the case of anysuch amounts overdue for a period in excess of 5 days) are being contested ingood faith by appropriate proceedings, so long as (1) such reserves or otherappropriate provisions, if any, as shall be required by GAAP shall have beenmade for any such contested amounts, and (2) in the case of a Lien with respectto any portion of the Collateral, such contest proceedings conclusively operateto stay the sale of any portion of the Collateral on account of such Lien;

 

(iii)          Liens incurred ordeposits made in the ordinary course of business and in an aggregate amount notto exceed $750,000 in connection with workers’ compensation, unemploymentinsurance and other types of social security, or to secure the performance oftenders, statutory obligations, surety and appeal bonds, bids, leases, governmentcontracts, trade contracts, performance and return-of-money bonds and othersimilar obligations (exclusive of obligations for the payment of borrowedmoney), so long as no foreclosure, sale or similar proceedings have beencommenced with respect to any portion of the Collateral on account thereof;

 

(iv)          any attachment orjudgment Lien not constituting an Event of Default under subsection 8.8;

 

(v)           leases or subleasesgranted to third parties in accordance with any applicable terms of theCollateral Documents and not interfering in any material respect with theordinary conduct of the business of Borrower or any of its Subsidiaries orresulting in a material diminution in the value of any Collateral as securityfor the Obligations;

 

(vi)          easements, rights-of-way,restrictions, encroachments, and other minor defects or irregularities intitle, in each case which do not and will not interfere in any material respectwith the ordinary conduct of the business of Borrower or any of itsSubsidiaries or result in a material diminution in the value of any Collateralas security for the Obligations;

 

(vii)         any(a) interest or title of a lessor or sublessor under any lease notprohibited by this Agreement, 

(b) restriction or encumbrance that the interest or title of suchlessor or sublessor may be subject to, or (c) subordination of theinterest of the lessee or sublessee under such lease to any restriction orencumbrance referred to in the preceding clause (b), so long as the holder ofsuch restriction or encumbrance agrees to recognize the rights of such lesseeor sublessee under such lease;

 

(viii)        Liens arising fromfiling UCC financing statements relating solely to leases not prohibited bythis Agreement; and

 

(ix)           licenses ofIntellectual Property granted by Borrower or any of its Subsidiaries in theordinary course of business and not interfering in any material respect withthe ordinary conduct of the business of Borrower or such Subsidiary.

** **

**“Person”** means and includes natural persons,corporations, limited partnerships, general partnerships, limited liabilitycompanies, limited liability partnerships, joint stock companies, JointVentures, associations, companies, trusts, banks, trust companies, land trusts,business trusts or other organizations, whether or not legal entities, andgovernments (whether federal, state or local, domestic or foreign, andincluding political subdivisions thereof) and agencies or other administrativeor regulatory bodies thereof.

** **

**“Pledged Collateral”** means, collectively, the “PledgedCollateral” as defined in the Security Agreement.

** **

**“Potential Event of Default”** means a condition or event that, afternotice or lapse of time or both, would constitute an Event of Default.

** **

**“Proceedings”** means any action, suit, proceeding(whether administrative, judicial or otherwise), governmental investigation orarbitration.

** **

**“Pro Rata Share”** means (i) with respect to all payments,computations and other matters relating to the Term Loan Commitment or the TermLoan of any Lender, the percentage obtained by dividing (x) theTerm Loan Exposure of that Lender by (y) the aggregate Term LoanExposure of all Lenders; (ii) with respect to all payments, computationsand other matters relating to the Revolving Loan Commitment or the RevolvingLoans of any Lender or any Letters of Credit issued or participations thereinpurchased by any Lender or any assignments of any Swing Line Loans purchased byany Lender, the percentage obtained by dividing (x) the RevolvingLoan Exposure of that Lender by (y) the aggregate Revolving LoanExposure of all Lenders; and (iii) for all other purposes with respect toeach Lender, the percentage obtained by dividing (x) the sum of theTerm Loan Exposure and the Revolving Loan Exposure of that Lender by(y) the sum of the aggregate Term Loan Exposure and Revolving LoanExposure of all Lenders, in any such case as the applicable percentage may beadjusted by assignments permitted pursuant to subsection 10.1.

** **

**“PTO”** means the United States Patent and Trademark Officeor any successor or substitute office in which filings are necessary or, in theopinion of Administrative Agent, desirable in order to create or perfect Lienson any IP Collateral.

** **

**“Real Property Asset”** means, at any time of determination, anyinterest then owned by any Loan Party (other than any Foreign Subsidiary) inany real property.

** **

**“Recorded Leasehold Interest”**means a Leasehold Property with respectto which a Record Document (as hereinafter defined) has been recorded in allplaces necessary or desirable, in Administrative Agent’s reasonable judgment,to give constructive notice of such Leasehold Property to third-partypurchasers and encumbrancers of the affected real property.  For purposes of this definition, the term **“RecordDocument”** means, with respect to any Leasehold Property, (a) thelease evidencing such Leasehold Property or a memorandum thereof, executed andacknowledged by the owner of the affected real property, as lessor, or (b) ifsuch Leasehold Property was acquired or subleased from the holder of a RecordedLeasehold Interest, the applicable assignment or sublease document, executedand acknowledged by such holder, in each case in form sufficient to give suchconstructive notice upon recordation and otherwise in form reasonablysatisfactory to Administrative Agent.

 

“**ReferenceRate**” means the rate that CIBC announces from time to time as itsprime lending rate, as in effect from time to time. The Reference Rate is areference rate and does not necessarily represent the lowest or best rateactually charged to any customer.  CIBCor any other Lender may make commercial loans or other loans at rates ofinterest at, above or below the Reference Rate.

** **

**“Refunded Swing Line Loans”** has the meaning assigned to that term insubsection 2.1A(iii).

** **

**“Register”** has the meaning assigned to that term insubsection 2.1D.

** **

**“Regulation D”** means Regulation D of the Board ofGovernors of the Federal Reserve System, as in effect from time to time.

** **

**“Reimbursement Date”** has the meaning assigned to that term insubsection 3.3B.

** **

**“Release”** means any release, spill, emission,leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge,dispersal, dumping, leaching or migration of Hazardous Materials into theindoor or outdoor environment (including the abandonment or disposal of anybarrels, containers or other closed receptacles containing any HazardousMaterials), including the movement of any Hazardous Materials through the air,soil, surface water or groundwater.

** **

**“Requisite Class Lenders”** means, at any time of determination (i)for the Class of Lenders having Revolving Loan Exposure, Lenders having orholding more than 50% of the aggregate Revolving Loan Exposure of all Lenders,and (ii) for the Class of Lenders having Term Loan Exposure, Lenders having orholding more than 50% of the aggregate Term Loan Exposure of all Lenders.

** **

**“Requisite Lenders”** means Requisite Class Lenders for theClass of Lenders having Revolving Loan Exposure and Requisite Class Lenders forthe Class of Lenders having Term Loan Exposure.

** **

**“ResNetInc.”** ResNetCommunications, Inc., a Delaware corporation and a Subsidiary of Borrower.

** **

**“ResNetLLC”** means ResNetCommunications, LLC, a Delaware limited liability company and a Subsidiary ofBorrower.

 

**“Restricted Junior Payment”** means (i) any dividend or otherdistribution, direct or indirect, on account of any shares of any class ofCapital Stock of Borrower or any of its Subsidiaries now or hereafteroutstanding, except a dividend payable solely in shares of that class of stock tothe holders of that class or from any Subsidiary of Borrower to Borrower or anySubsidiary Guarantor; (ii) any redemption, retirement, sinking fund orsimilar payment, purchase or other acquisition for value, direct or indirect,of any shares of any class of Capital Stock of Borrower or any of itsSubsidiaries now or hereafter outstanding, except Capital Stock owned byBorrower or a Subsidiary Guarantor; (iii) any payment made to retire, orto obtain the surrender of, any outstanding warrants, options or other rightsto acquire shares of any class of Capital Stock of Borrower or any of itsSubsidiaries now or hereafter outstanding, except Capital Stock owned byBorrower or a Subsidiary Guarantor; (iv) any payment or prepayment ofprincipal of, premium, if any, or interest on, or redemption, purchase,retirement, defeasance (including in-substance or legal defeasance), sinkingfund or similar payment with respect to, any Subordinated Indebtedness; and (v)any payment or prepayment of principal of, premium, if any, or interest on, orredemption, purchase, retirement, defeasance (including in-substance or legaldefeasance), sinking fund or similar payment with respect to the Senior Notes(and any senior unsecured Indebtedness incurred to refinance the Senior Notes acceptableto the Administrative Agent).

** **

**“RevolvingLender”** means aLender that has a Revolving Loan Commitment and/or that has an outstandingRevolving Loan.

** **

**“Revolving Loan Commitment”** means the commitment of a Lender to makeRevolving Loans to Borrower pursuant to subsection 2.1A(ii), and **“RevolvingLoan Commitments”** means such commitments of all Lenders in theaggregate.  The Revolving LoanCommitments shall be recorded by Administrative Agent in the Register.

** **

**“Revolving Loan CommitmentTermination Date”**means initially June 30, 2006 unless the initial Revolving Loan CommitmentTermination Date has been extended in accordance with subsection 2.10B, inwhich case it means August 29, 2007.

** **

**“Revolving Loan Exposure”**means, with respect to any Lender, as of anydate of determination (i) prior to the termination of the Revolving LoanCommitments, that Lender’s Revolving Loan Commitment, and (ii) after thetermination of the Revolving Loan Commitments, the sum of (a) theaggregate outstanding principal amount of the Revolving Loans of that Lender plus(b) if Lender is an Issuing Lender, the aggregate Letter of Credit Usagein respect of all Letters of Credit issued by that Lender (in each case net ofany participations purchased by other Lenders in such Letters of Credit or inany unreimbursed drawings thereunder) plus (c) the aggregate amountof all participations purchased by that Lender in any outstanding Letters ofCredit or any unreimbursed drawings under any Letters of Credit plus(d) in the case of Swing Line Lender, the aggregate outstanding principalamount of all Swing Line Loans (net of any assignments thereof purchased byother Lenders) plus (e) the aggregate amount of all assignmentspurchased by that Lender in any outstanding Swing Line Loans.

** **

**“Revolving Loans”** means the Loans made by Lenders toBorrower pursuant to subsection 2.1A(ii).

** **

**“Revolving Notes”** means (i) the promissory notes ofBorrower issued pursuant to subsection 2.1E on the Closing Date and(ii) any promissory notes issued by Borrower pursuant to subsection10.1B(i) in connection with assignments of the Revolving Loan Commitments andRevolving Loans of any Lenders and any replacements thereof, in each casesubstantially in the form of Exhibit IX annexed hereto.

 

“**S&P**” means Standard & Poor’sRatings Group.

** **

**“Securities”** means any stock, shares, partnershipinterests, voting trust certificates, certificates of interest or participationin any profit-sharing agreement or arrangement, options, warrants, bonds,debentures, notes, or other evidences of indebtedness, secured or unsecured,convertible, subordinated or otherwise, or in general any instruments commonlyknown as “securities” or any certificates of interest, shares or participationsin temporary or interim certificates for the purchase or acquisition of, or anyright to subscribe to, purchase or acquire, any of the foregoing.

 

“**Securities Act**” means the Securities Act of1933.

** **

**“Security Agreement”** means the Security Agreement executedand delivered by each of the Loan Parties on the Closing Date, substantially inthe form of Exhibit X annexed hereto.

** **

**“Senior1995 Notes”** thosecertain 11.5% Senior Notes due July 15, 2005 of Borrower with an aggregate facevalue of $30,000,000.

** **

**“Senior1995 Note Agreement”**that certain Securities Purchase Agreement dated as of August 9, 1995 by andamong Borrower and the holders of the Senior 1995 Notes.

** **

**“Senior1996 Notes”** thosecertain 10 1/4% Senior Notes due December 15, 2006 of Borrower with anaggregate face value of $150,000,000.

** **

**“Senior1996 Note Indenture”**that certain Indenture dated as of December 19, 1996 between Borrower andMarine Midland Bank, as Trustee, relating to the Senior 1996 Notes.

** **

**“SeniorNote Documents”**collectively, the Senior 1995 Notes, the Senior 1995 Note Agreement, the Senior1996 Notes, the Senior 1996 Note Indenture and each other agreement, instrumentor other document executed in connection therewith.

** **

**“SeniorNotes”**means theSenior 1995 Notes and the Senior 1996 Notes.

 

“**Solvent**”means, with respect to any Person, that as of the date of determination both(A) (i) the then fair saleable value of the property of such Person is(y) greater than the total amount of liabilities (including contingentliabilities) of such Person and (z) not less than the amount that will berequired to pay the probable liabilities on such Person’s then existing debtsas they become absolute and matured considering all financing alternatives andpotential asset sales reasonably available to such Person; (ii) suchPerson’s capital is not unreasonably small in relation to its business or anycontemplated or undertaken transaction; and (iii) such Person does notintend to incur, or believe (nor should it reasonably believe) that it willincur, debts beyond its ability to pay such debts as they become due; and (B)such Person is “solvent” within the meaning given that term and similar termsunder applicable laws relating to fraudulent transfers and conveyances.  For purposes of this definition, the amountof any contingent liability at any time shall be computed as the amount that,in light of all of the facts and circumstances existing at such time,represents the amount that can reasonably be expected to become an actual ormatured liability.

** **

**“Subject Lender”** has the meaning assigned to that term insubsection 2.9.

** **

** “Subordinated Indebtedness”** means (i) any Indebtedness of Borrower incurred fromtime to time pursuant to subsection 7.1(vi) and subordinated in right ofpayment to the Obligations on terms and conditions satisfactory to AdministrativeAgent.

 

“**Subsidiary**”means, with respect to any Person, any corporation, partnership, limitedliability company, association, joint venture or other business entity of whichmore than 50% of the total voting power of shares of stock or other ownershipinterests entitled (without regard to the occurrence of any contingency) tovote in the election of the Person or Persons (whether directors, managers,trustees or other Persons performing similar functions) having the power todirect or cause the direction of the management and policies thereof is at thetime owned or controlled, directly or indirectly, by that Person or one or moreof the other Subsidiaries of that Person or a combination thereof.  Notwithstanding anything herein to thecontrary, AmNet, ResNet Inc. and ResNet LLC shall each be deemed to be aSubsidiary of Borrower so long as (i) in the case of AmNet, Borrower owns 50%of AmNet’s outstanding capital stock and retains the right to elect a majorityof AmNet’s board of directors; (ii) in the case of ResNet Inc., Borrower owns50% of ResNet Inc.’s outstanding capital stock and retains the right to elect amajority of ResNet Inc.’s board of directors; and (iii) in the case of ResNetLLC, Borrower directly or indirectly owns 50% of all members’ interests and isthe managing member.

** **

**“Subsidiary Guarantor”** means any Domestic Subsidiary ofBorrower that executes and delivers a counterpart of the Subsidiary Guaranty onthe Closing Date or from time to time thereafter pursuant to subsection 6.8.

** **

**“Subsidiary Guaranty”** means the Subsidiary Guaranty to beexecuted and delivered by each of the existing Domestic Subsidiaries ofBorrower (other than AmNet, ResNet Inc. and ResNet LLC) on the Closing Date andto be executed and delivered by additional Domestic Subsidiaries of Borrowerand/or AmNet, ResNet Inc. and/or ResNet LLC from time to time thereafter inaccordance with subsection 6.8, substantially in the form of Exhibit XIannexed hereto.

** **

**“Supplemental Collateral Agent”** has the meaning assigned to that term insubsection 9.1B.

** **

**“Survey”** means a current as-built survey for theproperty prepared by a surveyor licensed or registered in the state where suchproperty is located, which survey must contain a certification from thesurveyor in the form of Exhibit XVIII attached hereto and be sufficientto delete any standard printed survey exception contained in the applicabletitle policy and otherwise in form and substance satisfactory to AdministrativeAgent.

** **

**“SwingLine Lender”** hasthe meaning assigned to that term in the introduction to this Agreement andalso means any successor Swing Line Lender appointed pursuant to subsection9.5B.

** **

**“SwingLine Lender’s Office”** means (i) the office of Swing Line Lender located at CIBC, Inc., 425Lexington Avenue, New York, NY 10017 or (ii) such other office of SwingLine Lender as may from time to time hereafter be designated as such in awritten notice delivered by Swing Line Lender to Borrower and each Lender.

** **

**“Swing Line Loan Commitment”** means the commitment of Swing LineLender to make Swing Line Loans to Borrower pursuant to subsection 2.1A(iii).

** **

**“Swing Line Loans”** means the Loans made by Swing LineLender to Borrower pursuant to subsection 2.1A(iii).

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**“Swing Line Note”** means (i) the promissory note ofBorrower issued pursuant to subsection 2.1E on the Closing Date (or anyreplacements thereof) and (ii) any promissory note issued by Borrower toany successor Swing Line Lender pursuant to the last sentence of subsection9.5B, and any replacements thereof, in each case substantially in the form of ExhibitXII annexed hereto.

** **

**“Syndication Agent”** has the meaning assigned to that term inthe introduction to this Agreement.

 

“**Tax**”or “**Taxes**”means any present or future tax, levy, impost, duty, charge, fee, deduction orwithholding of any nature and whatever called, by whomsoever, on whomsoever andwherever imposed, levied, collected, withheld or assessed, including interest,penalties, additions to tax and any similar liabilities with respect thereto;except that, in the case of a Lender, there shall be excluded taxes that areimposed on the overall net income or net profits (including franchise taxesimposed in lieu thereof) (i) by the United States, or (ii) by any otherGovernment Authority under the laws of which the Lender is organized or has itsprincipal office or maintains its applicable lending office.

 

**“Term Loan Commitment”** means the commitment of a Lender to makea Term Loan to Borrower pursuant to subsection 2.1A(i), and **“Term LoanCommitments”** means such commitments of all Lenders in the aggregate.

 

**“Term Loan Exposure”,** with respect to any Lender, means, as ofany date of determination (i) prior to the funding of the Term Loans, thatLender’s Term Loan Commitment and (ii) after the funding of the TermLoans, the outstanding principal amount of the Term Loan of that Lender.

 

**“TermLoan Maturity Date”**means, initially June 30, 2006 unless the initial Term Loan Maturity Datehas been extended in accordance with subsection 2.10A, in which case it meansAugust 29, 2008.

 

**“Term Loans”** means the Loans made by Lenders toBorrower pursuant to subsection 2.1A(i).

 

**“Term Notes”** means (i) the promissory notes ofBorrower issued pursuant to subsection 2.1E to evidence the Term Loans of anyLenders, (ii) any promissory notes issued by Borrower pursuant to subsection10.1B(i) in connection with assignments of the Term Loan Commitments or TermLoans of any Lenders and any replacements thereof, in each case substantiallyin the form of Exhibit XIII annexed hereto.

** **

**“Title Company”** means, Chicago Title Insurance Companyand/or one or more other title insurance companies reasonably satisfactory toAdministrative Agent.

** **

**“Total Utilization of Revolving LoanCommitments”**means, as at any date of determination, the sum of (i) the aggregate principalamount of all outstanding Revolving Loans plus (ii) the aggregateprincipal amount of all outstanding Swing Line Loans plus (iii) theLetter of Credit Usage.

** **

**“Transaction Costs”** means the fees, costs and expensespayable by Borrower on or before the Closing Date in connection with thetransactions contemplated by the Loan Documents.

** **

**“Type”** means, with respect to any Loan, a Term Loan, aRevolving Loan or a Swing Line Loan (each of which is a “**Type**” of Loan).

** **

**“UCC”** means the Uniform Commercial Code (or any similar orequivalent legislation) as in effect in any applicable jurisdiction.

** **

**1.2          Accounting Terms; Utilization ofGAAP for Purposes of Calculations Under Agreement**

 

Except asotherwise expressly provided in this Agreement, all accounting terms nototherwise defined herein shall have the meanings assigned to them in conformitywith GAAP.  Financial statements andother information required to be delivered by Borrower to Lenders pursuant toclauses (ii), (iii) and (xii) of subsection 6.1 shall be prepared in accordancewith GAAP as in effect in the United States of America at the time of suchpreparation (and delivered together with the reconciliation statements providedfor in subsection 6.1(iii)). Calculations in connection with the definitions, covenants and otherprovisions of this Agreement shall utilize GAAP as in effect in the UnitedStates of America on the date of determination, applied in a manner consistentwith that used in preparing the financial statements referred to in subsection5.3.  Borrower shall deliver to theAdministrative Agent at the same time as the delivery of any annual orquarterly financial statements given in accordance with the provisions ofSection 6.1, (i) a description in reasonable detail of any material changein the application of accounting principles employed in the preparation of suchfinancial statements from those applied in the most recently precedingquarterly or annual financial statements as to which no objection shall havebeen made in accordance with the provisions above and (ii) a reasonableestimate of the effect on the financial statements on account of such changesin application.

 

**1.3          Other Definitional Provisions andRules of Construction.**

** **

**A.           **Any of the terms defined herein may, unless thecontext otherwise requires, be used in the singular or the plural, depending onthe reference.

** **

**B.           **References to “Sections” and “subsections” shall be toSections and subsections, respectively, of this Agreement unless otherwisespecifically provided.

** **

**C.           **The use in any of the Loan Documents of the word“include” or “including”, when following any general statement, term or matter,shall not be construed to limit such statement, term or matter to the specificitems or matters set forth immediately following such word or to similar itemsor matters, whether or not nonlimiting language (such as “without limitation”or “but not limited to” or words of similar import) is used with referencethereto, but rather shall be deemed to refer to all other items or matters thatfall within the broadest possible scope of such general statement, term ormatter.

** **

**D.           **Each of the parties hereto acknowledges that (i) ithas been represented by counsel in the negotiation and documentation of theterms of this Agreement, (ii) it has had full and fair opportunity to reviewand revise the terms of this Agreement, (iii) this Agreement has been draftedjointly by all of the parties hereto, and (iv) neither Administrative Agent norany Lender has any fiduciary relationship with or duty to Borrower arising outof or in connection with this Agreement or any of the other Loan Documents, andthe relationship between Administrative Agent and Lenders, on one hand, andBorrower, on the other hand, in connection herewith or therewith is solely thatof debtor and creditor.  Accordingly,each of the parties hereto acknowledges and agrees that the terms of thisAgreement shall not be construed against or in favor of another party.

** **

**E.            **Any reference in this Agreement or any other LoanDocument to any agreement means such agreement as it may be amended, restated,supplemented or otherwise modified from time to time; (ii) any reference inthis Agreement or any other Loan Document to any law, statute, regulation, ruleor other legislative action shall mean such law, statute, regulation, rule orother legislative action as amended, supplemented or otherwise modified fromtime to time, and shall include any rule or regulation promulgated thereunder;and (iii) any reference in this Agreement or any Loan Document to a Personshall include the successor or assignee of such Person.

** **

**Section 2.              AMOUNTS AND TERMS OF COMMITMENTS AND LOANS**

** **

**2.1          Commitments; Making of Loans;Optional Notes**.

** **

**A.    Commitments**.  Subject to the terms and conditions of thisAgreement and in reliance upon the representations and warranties of Borrowerherein set forth, each Lender hereby severally agrees to make the Loans asdescribed in subsections 2.1A(i) and 2.1A(ii) and Swing Line Lender herebyagrees to make the Swing Line Loans as described in subsection 2.1A(iii).

 

(i)            Term Loans.  Each Lender that has a Term Loan Commitmentseverally agrees to lend to Borrower on the Closing Date an amount notexceeding its Pro Rata Share of the aggregate amount of the Term LoanCommitments to be used for the purposes identified in subsection 2.5A.  Borrower shall deliver to AdministrativeAgent a Notice of Borrowing no later than 12:00 Noon (New York City time) atleast one Business Day prior to the Closing Date, requesting a borrowing of theTerm Loans.  The Notice of Borrowingshall specify (i) the proposed Funding Date (which shall be a BusinessDay), (ii) the amount of the borrowing, and (iii) that all such Loans shall beBase Rate Loans.  The aggregate amountof the Term Loan Commitments is $150,000,000; provided that the TermLoan Commitments of Lenders shall be adjusted to give effect to any assignmentsof the Term Loan Commitments pursuant to subsection 10.1B.  Each Lender’s Term Loan Commitment shallexpire immediately and without further action on August 31, 2001 if the TermLoans have not been made on or before that date.  Borrower may make only one borrowing under the Term LoanCommitments.  Amounts borrowed underthis subsection 2.1A(i) and subsequently repaid or prepaid may not be reborrowed.

 

(ii)           Revolving Loans.  Each Revolving Lender severally agrees,subject to the limitations set forth below with respect to the maximum amountof Revolving Loans permitted to be outstanding from time to time, to lend toBorrower from time to time during the period from the Closing Date to butexcluding the Revolving Loan Commitment Termination Date an aggregate amountnot exceeding its Pro Rata Share of the aggregate amount of the Revolving LoanCommitments to be used for the purposes identified in subsection 2.5B.  The aggregate original amount of theRevolving Loan Commitments is $75,000,000; provided that the RevolvingLoan Commitments of Revolving Lenders shall be adjusted to give effect to anyassignments of the Revolving Loan Commitments pursuant to subsection 10.1B andshall be reduced from time to time by the amount of any reductions thereto madepursuant to subsection 2.4B.  EachRevolving Lender’s Revolving Loan Commitment shall expire immediately andwithout further action on the Revolving Loan Commitment Termination Date andall Revolving Loans and all other amounts owed hereunder with respect to theRevolving Loans and the Revolving Loan Commitments shall be paid in full nolater than that date; provided that each Revolving Lender’s RevolvingLoan Commitment shall expire immediately and without further action on August31, 2001 if the Term Loans have not been made on or before that date.  Amounts borrowed under this subsection2.1A(ii) may be repaid and reborrowed to but excluding the Revolving LoanCommitment Termination Date.

 

Anything containedin this Agreement to the contrary notwithstanding, the Revolving Loans and theRevolving Loan Commitments shall be subject to the limitation that in no eventshall the Total Utilization of Revolving Loan Commitments at any time exceedthe Revolving Loan Commitments then in effect.

 

(iii)          Swing Line Loans.

 

(a)           General Provisions.  Swing Line Lender hereby agrees, subject tothe limitations set forth below with respect to the maximum amount of SwingLine Loans permitted to be outstanding from time to time, to make a portion ofthe Revolving Loan Commitments available to Borrower from time to time duringthe period from the Closing Date to but excluding the Revolving Loan CommitmentTermination Date by making Swing Line Loans to Borrower in an aggregate amountnot exceeding the amount of the Swing Line Loan Commitment to be used for thepurposes identified in subsection 2.5B, notwithstanding the fact that suchSwing Line Loans, when aggregated with Swing Line Lender’s outstandingRevolving Loans and Swing Line Lender’s Pro Rata Share of the Letter of CreditUsage then in effect, may exceed Swing Line Lender’s Revolving LoanCommitment.  The original amount of theSwing Line Loan Commitment is $5,000,000; provided that any reduction ofthe Revolving Loan Commitments made pursuant to subsection 2.4B that reducesthe aggregate Revolving Loan Commitments to an amount less than the thencurrent amount of the Swing Line Loan Commitment shall result in an automaticcorresponding reduction of the Swing Line Loan Commitment to the amount of theRevolving Loan Commitments, as so reduced, without any further action on thepart of Borrower, Administrative Agent or Swing Line Lender.  The Swing Line Loan Commitment shall expireon the Revolving Loan Commitment Termination Date and all Swing Line Loans andall other amounts owed hereunder with respect to the Swing Line Loans shall bepaid in full no later than that date; provided that the Swing Line LoanCommitment shall expire immediately and without further action onAugust 31, 2001 if the Term Loans have not been made on or before thatdate.  Borrower shall repay each SwingLine Loan on or before the date that is five Business Days after the date suchLoan was made. Amounts borrowed under this subsection 2.1A(iii) may be repaidand reborrowed to but excluding the Revolving Loan Commitment Termination Date.

 

Anything containedin this Agreement to the contrary notwithstanding, the Swing Line Loans and theSwing Line Loan Commitment shall be subject to the limitation that in no eventshall the Total Utilization of Revolving Loan Commitments at any time exceedthe Revolving Loan Commitments then in effect.

 

(b)           Swing Line Loan Prepayment withProceeds of Revolving Loans.  Withrespect to any Swing Line Loans that have not been voluntarily prepaid byBorrower pursuant to subsection 2.4B(i), Swing Line Lender may, at any time inits sole and absolute discretion, deliver to Administrative Agent (with a copyto Borrower), no later than 10:00 A.M. (New York City time) at least oneBusiness Day in advance of the proposed Funding Date, a notice (which shall bedeemed to be a Notice of Borrowing given by Borrower) requesting RevolvingLenders to make Revolving Loans that are Base Rate Loans on such Funding Datein an amount equal to the amount of such Swing Line Loans (the **“RefundedSwing Line Loans”**) outstanding on the date such notice is givenwhich Swing Line Lender requests Revolving Lenders to prepay.  Borrower hereby authorizes the giving of anysuch notice and the making of any such Revolving Loans.  Anything contained in this Agreement to thecontrary notwithstanding, (1) the proceeds of such Revolving Loans made byRevolving Lenders other than Swing Line Lender shall be immediately deliveredby Administrative Agent to Swing Line Lender at Swing Line Lender’s Office (andnot to Borrower) and applied to repay a corresponding portion of the RefundedSwing Line Loans and (2) on the day such Revolving Loans are made, SwingLine Lender’s Pro Rata Share of the Refunded Swing Line Loans shall be deemedto be paid with the proceeds of a Revolving Loan made by Swing Line Lender, andsuch portion of the Swing Line Loans deemed to be so paid shall no longer beoutstanding as Swing Line Loans and shall no longer be due under the Swing LineNote of Swing Line Lender but shall instead constitute part of Swing LineLender’s outstanding Revolving Loans and shall be due under the Revolving Noteof Swing Line Lender.  Borrower agreesto immediately pay Swing Line Lender the amount of the Refunded Swing LineLoans to the extent the proceeds of such Revolving Loans made by RevolvingLenders, including the Revolving Loan deemed to be made by Swing Line Lender,are not sufficient to repay in full the Refunded Swing Line Loans.  If any portion of any such amount paid (ordeemed to be paid) to Swing Line Lender should be recovered by or on behalf ofBorrower from Swing Line Lender in any bankruptcy proceeding, in any assignmentfor the benefit of creditors or otherwise, the loss of the amount so recoveredshall be ratably shared among all Lenders in the manner contemplated bysubsection 10.5.

 

(c)           Swing Line Loan Assignments.  If for any reason (1) Revolving Loans arenot made upon the request of Swing Line Lender as provided in the immediatelypreceding paragraph in an amount sufficient to repay any amounts owed to SwingLine Lender in respect of any outstanding Swing Line Loans or (2) the RevolvingLoan Commitments are terminated at a time when any Swing Line Loans areoutstanding, each Revolving Lender shall be deemed to, and hereby agrees to,have purchased an assignment of such outstanding Swing Line Loans in an amountequal to its Pro Rata Share (calculated, in the case of the foregoing clause (2),immediately prior to such termination of the Revolving Loan Commitments) of theunpaid amount of such Swing Line Loans together with accrued interestthereon.  Upon one Business Day’s noticefrom Swing Line Lender, each Revolving Lender shall deliver to Swing LineLender an amount equal to its respective assignment in same day funds at theSwing Line Lender’s Office.  In order tofurther evidence such assignment (and without prejudice to the effectiveness ofthe assignment provisions set forth above), each Revolving Lender agrees toenter into an Assignment Agreement at the request of Swing Line Lender in formand substance reasonably satisfactory to the Swing Line Lender and suchRevolving Lender.  If any Revolving Lenderfails to make available to Swing Line Lender the amount of such RevolvingLender’s assignment as provided in this paragraph, Swing Line Lender shall beentitled to recover such amount on demand from such Revolving Lender togetherwith interest thereon at the rate customarily used by Swing Line Lender for thecorrection of errors among banks for three Business Days and thereafter at theBase Rate.  If Swing Line Lenderreceives a payment of any amount in which other Revolving Lenders havepurchased assignments as provided in this paragraph, Swing Line Lender shallpromptly distribute to each such other Revolving Lender its Pro Rata Share ofsuch payment.

 

(d)           Lenders’Obligations.  Anything containedherein to the contrary notwithstanding, each Revolving Lender’s obligation tomake Revolving Loans for the purpose of repaying any Refunded Swing Line Loanspursuant to subsection 2.1A(iii)(b) and each Revolving Lender’s obligation topurchase an assignment of any unpaid Swing Line Loans pursuant to theimmediately preceding paragraph shall be absolute and unconditional and shallnot be affected by any circumstance, including (1) any set-off,counterclaim, recoupment, defense or other right which such Revolving Lendermay have against Swing Line Lender, Borrower or any other Person for any reasonwhatsoever; (2) the occurrence or continuation of an Event of Default or aPotential Event of Default; (3) any adverse change in the business,operations, properties, assets, condition (financial or otherwise) or prospectsof Borrower or any of its Subsidiaries or the occurrence of any MaterialAdverse Effect; (4) any breach of this Agreement or any other LoanDocument by any party thereto; or (5) any other circumstance, happening orevent whatsoever, whether or not similar to any of the foregoing; providedthat such obligations of each Revolving Lender are subject to the conditionthat (x) Swing Line Lender believed in good faith that all conditionsunder Section 4 to the making of the applicable Refunded Swing Line Loans orother unpaid Swing Line Loans, as the case may be, were satisfied at the timesuch Refunded Swing Line Loans or unpaid Swing Line Loans were made or(y) the satisfaction of any such condition not satisfied had been waivedin accordance with subsection 10.6 prior to or at the time such Refunded SwingLine Loans or other unpaid Swing Line Loans were made.

 

(iv)          Increase of the Revolving LoanCommitments.  With the consent ofAdministrative Agent, Borrower may, one time on or after the Closing Date,increase, at Borrower’s discretion after consultation with Administrative Agentthe then effective aggregate principal amount of the Revolving LoanCommitments; provided that (1) the aggregate principal amount of theincrease in the Revolving Loan Commitments pursuant to this subsection 2.1A(iv)shall not exceed $25,000,000; (2) Borrower shall execute and deliver suchdocuments and instruments and take such other actions as may be reasonablyrequested by Administrative Agent in connection with such increase and at thetime of any such proposed increase, no Potential Event of Default or Event ofDefault shall have occurred and be continuing or would occur after givingeffect to such increase.  Any requestunder this subsection 2.1A(iv) shall be submitted by Borrower to AdministrativeAgent.  Borrower may also specify anyfees offered to those Lenders (the “**IncreasingLenders**”) that agree to increase the principal amount of theirRevolving Loan Commitment, which fees may be variable based upon the amount bywhich any such Lender is willing to increase the principal amount of itsRevolving Loan Commitment.  No Lendershall have any obligation, express or implied, to offer to increase theaggregate principal amount of its Revolving Loan Commitment.  Only the consent of each Increasing Lendershall be required for an increase in the aggregate principal amount of theRevolving Loan Commitments pursuant to this 2.1A(iv).  No Lender that declines to increase the principal amount of itsRevolving Loan Commitment may be replaced with respect to its existing RevolvingLoan Commitment as a result thereof without such Lender’s consent.

 

Each Increasing Lender shall as soon as practicablespecify the amount of the proposed increase that it is willing to assume.  Borrower may offer and accept some or all ofthe offered amounts or designate new lenders who qualify as Eligible Assigneesand that are reasonably acceptable to Administrative Agent as additionalLenders hereunder in accordance with this subsection 2.1A(iv) (each such newlender being a “**New Lender**”),which New Lender may assume all or a portion of the increase in the aggregateprincipal amount of the Revolving Loan Commitments.  Borrower and Administrative Agent shall have discretion jointlyto adjust the allocation of the increased aggregate principal amount of theRevolving Loan Commitments among Increasing Lenders and New Lenders.

 

Each New Lender designated by Borrower and reasonablyacceptable to Administrative Agent shall become an additional party hereto as aNew Lender concurrently with the effectiveness of the proposed increase in theaggregate principal amount of the new Revolving Loan Commitments.

 

Subject to the foregoing, any increase required byBorrower shall be effective upon delivery to Administrative Agent of each ofthe following documents:  (i) anoriginally executed copy of an instrument of joinder signed by a dulyauthorized officer of each New Lender, substantially in the form attachedhereto as Exhibit XIV-A; (ii) a notice to the Increasing Lenders and NewLenders, substantially in the form attached hereto as Exhibit XIV-B,signed by a duly authorized officer of Borrower; (iii) an Officers’ Certificateof Borrower, substantially in the form attached hereto as Exhibit XIV-C;and (iv) any other certificates or documents that Administrative Agent shallreasonably request, in form and substance satisfactory to Administrative Agentand shall be in the principal amount equal to (i) the principal amount thatIncreasing Lenders are willing to assume as increases to the principal amountof their Revolving Loan Commitment; plus (ii) the principal amountoffered by New Lenders with respect to the Revolving Loan Commitments, ineither case as adjusted by Borrower and Administrative Agent pursuant to thissubsection 2.1A(iv).  Upon effectivenessof any such increase, the Commitments and Pro Rata Share of each Lender will beadjusted to give effect to the increase in the Revolving Loan Commitments.  To the extent that the adjustment of ProRata Shares results in losses or expenses to any Lender as a result of theprepayment of any LIBOR Loan on a date other than the scheduled last day of theapplicable Interest Period, Borrower shall be responsible for such losses orexpenses pursuant to subsection 2.6D.

 

**B.            BorrowingMechanics**.  Revolving Loans made on any Funding Date(other than Revolving Loans made pursuant to a request by Swing Line Lenderpursuant to subsection 2.1A(iii) for the purpose of repaying any Refunded SwingLine Loans or Revolving Loans made pursuant to subsection 3.3B for the purposeof reimbursing any Issuing Lender for the amount of a drawing under a Letter ofCredit issued by it) shall be in an aggregate minimum amount of $1,000,000 andintegral multiples of $100,000 in excess of that amount; provided thatRevolving Loans made on any Funding Date as LIBOR Loans with a particularInterest Period shall be in an aggregate minimum amount of $2,000,000 andintegral multiples of $100,000 in excess of that amount.  Any Swing Line Loan made on any Funding Dateshall be in a minimum amount of $250,000 and integral multiples of $100,000 inexcess of that amount.  WheneverBorrower desires that Lenders make Revolving Loans it shall deliver toAdministrative Agent a Notice of Borrowing no later than 10:00 A.M. (New YorkCity time) at least three Business Days in advance of the proposed Funding Date(in the case of a LIBOR Loan) or at least one Business Day in advance of theproposed Funding Date (in the case of a Base Rate Loan).  Whenever Borrower desires that Swing LineLender make a Swing Line Loan, it shall deliver to Swing Line Lender at SwingLine Lender’s Office (with a copy to Administrative Agent at AdministrativeAgent’s Office) a Notice of Borrowing no later than 12:00 Noon (New York Citytime) on the proposed Funding Date.  TheNotice of Borrowing shall specify (i) the proposed Funding Date (whichshall be a Business Day), (ii) the amount and Type of Loans requested,(iii) in the case of Swing Line Loans and any Loans made on the Closing Date,that such Loans shall be Base Rate Loans, (iv) in the case of RevolvingLoans not made on the Closing Date, whether such Loans shall be Base Rate Loansor LIBOR Loans, (v) in the case of any Loans requested to be made as LIBORLoans, the initial Interest Period requested therefor and (vi) information aboutthe account of Borrower to be credited. Revolving Loans may be continued as or converted into Base Rate Loansand LIBOR Loans in the manner provided in subsection 2.2D.  In lieu of delivering the above-describedNotice of Borrowing for any Loan other than a Swing Line Loan, Borrower maygive Administrative Agent telephonic notice by the required time of anyproposed borrowing under this subsection 2.1B; provided that such noticeshall be promptly confirmed in writing by delivery of a Notice of Borrowing toAdministrative Agent at Administrative Agent’s Office no later than 2:00 P.M.(New York City time) on the date such notice was given.  In lieu of delivering the above-describedNotice of Borrowing for any Swing Line Loan, Borrower may give Swing Line Lendertelephonic notice by the required time of any proposed borrowing under thissubsection 2.1B; provided that such notice shall be promptly confirmed inwriting by delivery of a Notice of Borrowing to Swing Line Lender at Swing LineLender’s Office (with a copy to Administrative Agent at Administrative Agent’sOffice) no later than 2:00 P.M. (New York City time) on the date such noticewas given.

 

None ofAdministrative Agent, Swing Line Lender or any Lender shall incur any liabilityto Borrower in acting upon any telephonic notice referred to above thatAdministrative Agent or Swing Line Lender believes in good faith to have beengiven by a duly authorized Officer or other person authorized to borrow onbehalf of Borrower or for otherwise acting in good faith under this subsection2.1B, and upon funding of Revolving Loans by Lenders or Swing Line Loans bySwing Line Lender, in accordance with this Agreement pursuant to any suchtelephonic notice Borrower shall have effected Revolving Loans or Swing Line Loanshereunder.

 

Borrower shallnotify Administrative Agent prior to the funding of any Loans if any of thematters to which Borrower is required to certify in the applicable Notice ofBorrowing is no longer true and correct as of the applicable Funding Date, andthe acceptance by Borrower of the proceeds of any Loans shall constitute are-certification by Borrower, as of the applicable Funding Date, as to thematters to which Borrower is required to certify in the applicable Notice ofBorrowing.

 

Except asotherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice of Borrowingfor a LIBOR Loan (or telephonic notice in lieu thereof) shall be irrevocableonce Administrative Agent receives such notice, and Borrower shall be bound tomake a borrowing in accordance therewith.

 

Notwithstandinganything to the contrary contained herein, there shall be no Borrowingscomprised of LIBOR Loans and no conversions of Base Rate Loans into LIBOR Loansuntil the date that is 7 days after the Closing Date.

 

**C.            Disbursementof Funds.** All Term Loans and Revolving Loans under this Agreement shall be made byLenders simultaneously and proportionately to their respective Pro Rata Shares,it being understood that neither Administrative Agent nor any Lender shall beresponsible for any default by any other Lender in that other Lender’sobligation to make a Loan requested hereunder nor shall the Commitment of anyLender to make the particular Type of Loan requested be increased or decreasedas a result of a default by any other Lender in that other Lender’s obligationto make a Loan requested hereunder. Promptly after receipt by Administrative Agent of a Notice of Borrowing(except with respect to Swing Line Loans) pursuant to subsection 2.1A or 2.1B(or telephonic notice in lieu thereof), Administrative Agent shall notify eachLender for that Type of Loan of the proposed borrowing.  Each such Lender shall make the amount ofits Loan available to Administrative Agent at the Administrative Agent’s Officenot later than 12:00 Noon (New York City time) on the applicable FundingDate.  Except as provided in subsection2.1A(iii) or subsection 3.3B with respect to Revolving Loans used to repayRefunded Swing Line Loans or to reimburse any Issuing Lender for the amount ofa drawing under a Letter of Credit issued by it, upon satisfaction or waiver ofthe conditions precedent specified in subsections 4.1 (in the case of Loansmade on the Closing Date) and 4.2 (in the case of all Loans), AdministrativeAgent shall make the proceeds of such Loans available to Borrower on theapplicable Funding Date by causing an amount of same day funds in Dollars equalto the proceeds of all such Loans received by Administrative Agent from Lendersto be wire transferred to an account of Borrower as specified in the applicableNotice of Borrowing.  Swing Line Lender shall makethe amount of its Swing Line Loan available to Borrower by wire transfer to anaccount of Borrower as specified in the applicable Notice of Borrowing notlater than 3:00 P.M. (New York City time) on the applicable Funding Date, ineach case in same day funds in Dollars.

 

UnlessAdministrative Agent shall have been notified by any Lender prior to a FundingDate for any Loans that such Lender does not intend to make available toAdministrative Agent the amount of such Lender’s Loan requested on such FundingDate, Administrative Agent may assume that such Lender has made such amountavailable to Administrative Agent on such Funding Date and Administrative Agentmay, in its sole discretion, but shall not be obligated to, make available toBorrower a corresponding amount on such Funding Date.  If such corresponding amount is not in fact made available toAdministrative Agent by such Lender, Administrative Agent shall be entitled torecover such corresponding amount on demand from such Lender together withinterest thereon, for each day from such Funding Date until the date suchamount is paid to Administrative Agent, at the customary rate set byAdministrative Agent for the correction of errors among banks for threeBusiness Days and thereafter at the Base Rate. If such Lender does not pay such corresponding amount forthwith uponAdministrative Agent’s demand therefor, Administrative Agent shall promptlynotify Borrower and Borrower shall immediately pay such corresponding amount toAdministrative Agent together with interest thereon, for each day from suchFunding Date until the date such amount is paid to Administrative Agent, at therate payable under this Agreement for Base Rate Loans.  Nothing in this subsection 2.1C shall bedeemed to relieve any Lender from its obligation to fulfill its Commitmentshereunder or to prejudice any rights that Borrower may have against any Lenderas a result of any default by such Lender hereunder.

** **

**D.            The Register.**

 

(i)            AdministrativeAgent shall maintain, at its address referred to in subsection 10.8, a registerfor the recordation of the names and addresses of Lenders and the Commitmentsand Loans of each Lender from time to time (the **“Register”**).  The Register shall be available forinspection by Borrower at any reasonable time and from time to time uponreasonable prior notice.

 

(ii)           Administrative Agent shall record inthe Register the Term Loan Commitment and Revolving Loan Commitment and theTerm Loans and Revolving Loans from time to time of each Lender, and eachrepayment or prepayment in respect of the principal amount of the Term Loan orRevolving Loans of each Lender.  Anysuch recordation shall be conclusive and binding on Borrower and each Lender, absentmanifest error; provided that failure to make any such recordation, orany error in such recordation, shall not affect any Lender’s Commitments orBorrower’s Obligations in respect of any applicable Loans.

 

(iii)          Each Lender may record on its internalrecords (including the Notes held by such Lender) the amount of the Term Loansand each Revolving Loan made by it and each payment in respect thereof.  Any such recordation shall be conclusive andbinding on Borrower, absent manifest error; provided that failure tomake any such recordation, or any error in such recordation, shall not affectany Lender’s Commitments or Borrower’s Obligations in respect of any applicableLoans; and providedfurther that in the event of anyinconsistency between the Register and any Lender’s records, the recordationsin the Register shall govern (absent manifest error).

 

(iv)          Borrower, Administrative Agent andLenders shall deem and treat the Persons listed as Lenders in the Register asthe holders and owners of the corresponding Commitments and Loans listedtherein for all purposes hereof, and no assignment or transfer of any suchCommitment or Loan shall be effective, in each case unless and until anAssignment Agreement effecting the assignment or transfer thereof shall havebeen accepted by Administrative Agent and recorded in the Register as providedin subsection 10.1B(ii).  Prior to suchrecordation, all amounts owed with respect to the applicable Commitment or Loanshall be owed to the Lender listed in the Register as the owner thereof, andany request, authority or consent of any Person who, at the time of making suchrequest or giving such authority or consent, is listed in the Register as aLender shall be conclusive and binding on any subsequent holder, assignee ortransferee of the corresponding Commitments or Loans.

 

(v)           Borrower hereby designates CIBC toserve as Borrower’s agent solely for purposes of maintaining the Register asprovided in this subsection 2.1D, and Borrower hereby agrees that, to theextent CIBC serves in such capacity, CIBC and its officers, directors,employees, agents and Affiliates shall constitute Indemnitees for all purposesunder subsection 10.3.

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**E.             Notes.**  Borrower shall execute and deliver on theClosing Date (i) to each Lender (or to Administrative Agent for thatLender if requested by such Lender) (a) a Term Loan Note substantially inthe form of Exhibit XIII annexed hereto to evidence that Lender’sTerm Loan, in the principal amount of that Lender’s Term Loan and with otherappropriate insertions, and (b) a Revolving Note substantially in the formof Exhibit IX annexed hereto to evidence that Lender’s RevolvingLoans, in the principal amount of that Lender’s Revolving Loan Commitment andwith other appropriate insertions, and (ii) to Swing Line Lender (or toAdministrative Agent for Swing Line Lender) a Swing Line Note substantially inthe form of Exhibit XII annexed hereto to evidence Swing Line Lender’sSwing Line Loans, in the principal amount of the Swing Line Loan Commitment andwith other appropriate insertions.

 

AdministrativeAgent may deem and treat the payee of any Note as the owner thereof for allpurposes hereof unless and until an Assignment Agreement effecting theassignment or transfer thereof shall have been accepted by Administrative Agentas provided in subsection 10.1B(ii). Any request, authorization or consent of any person or entity who, atthe time of making such request or giving such authority or consent, is theholder of any Note shall be conclusive and binding on any subsequent holder,assignee or transferee of that Note or of any Note or Notes issued in exchangetherefor.

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**2.2          Intereston the Loans.**

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**A.            Rateof Interest**. Subject to the provisions of subsections 2.6 and 2.7, each Term Loan andeach Revolving Loan shall bear interest on the unpaid principal amount thereoffrom the date made through maturity (whether by acceleration or otherwise) at arate determined by reference to the Base Rate or Adjusted LIBOR.  Subject to the provisions of subsection 2.7,each Swing Line Loan shall bear interest on the unpaid principal amount thereoffrom the date made through maturity (whether by acceleration or otherwise) at arate determined by reference to the Base Rate. The applicable basis for determining the rate of interest with respectto any Term Loan or any Revolving Loan shall be selected by Borrower initiallyat the time a Notice of Borrowing is given with respect to such Loan pursuantto subsection 2.1B and the basis for determining the interest rate with respectto any Term Loan or any Revolving Loan may be changed from time to timepursuant to subsection 2.2D.  If on anyday a Term Loan or Revolving Loan is outstanding with respect to which noticehas not been delivered to Administrative Agent in accordance with the terms ofthis Agreement specifying the applicable basis for determining the rate ofinterest, then for that day that Loan shall bear interest determined byreference to the Base Rate.

 

Subject to theprovisions of subsections 2.2E and 2.7, the Term Loans and the Revolving Loansshall bear interest through maturity as follows:

 

(i)            if a Base Rate Loan, then at the sumof the Base Rate plus the Applicable Base Rate Margin for such Type ofLoans; or

 

(ii)           if a LIBOR Loan, then at the sum ofAdjusted LIBOR plus the Applicable LIBOR Margin for such Type of Loans.

 

Subject to theprovisions of subsections 2.2E and 2.7, the Swing Line Loans shall bearinterest through maturity at the sum of the Base Rate plus theApplicable Base Rate Margin.

 

Upon delivery ofthe Margin Determination Certificate by Borrower to Administrative Agentpursuant to subsection 6.1(xiv), the Applicable Base Rate Margin and ApplicableLIBOR Margin shall automatically be adjusted in accordance with such MarginDetermination Certificate, such adjustment to become effective on the thirdBusiness Day after the date on which Borrower delivers such MarginDetermination Certificate; provided that (1) at any time a MarginDetermination Certificate is not delivered at the time required pursuant tosubsection 6.1(xiv), from the time such Margin Determination Certificate wasrequired to be delivered until delivery of such Margin DeterminationCertificate, the Applicable Base Rate Margin shall be 1.75% for the RevolvingLoans and 2.75% for the Term Loans, and the Applicable LIBOR Margin shall be3.00% for the Revolving Loans and 4.00% for the Term Loans, and (2) if a MarginDetermination Certificate erroneously indicates an applicable margin morefavorable to Borrower than should be afforded by the actual calculation of theConsolidated Total Leverage Ratio, Borrower shall promptly pay additionalinterest and letter of credit fees to correct for such error.

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**B.            InterestPeriods.** In connection with each LIBOR Loan, Borrower may, pursuant to the applicableNotice of Borrowing or Notice of Conversion/Continuation, as the case may be,select an interest period (each an **“Interest Period”**) to be applicable to suchLoan, which Interest Period shall be, at Borrower’s option, either a one, two,three or six month period (or a period of such other length of less than sixmonths as may be requested by Borrower and as may be acceptable toAdministrative Agent); provided that:

 

(i)            theinitial Interest Period for any LIBOR Loan shall commence on the Funding Date inrespect of such Loan, in the case of a Loan initially made as a LIBOR Loan, oron the date specified in the applicable Notice of Conversion/Continuation, inthe case of a Loan converted to a LIBOR Loan;

 

(ii)           inthe case of immediately successive Interest Periods applicable to a LIBOR Loancontinued as such pursuant to a Notice of Conversion/Continuation, eachsuccessive Interest Period shall commence on the day on which the nextpreceding Interest Period expires;

 

(iii)          if an Interest Period would otherwiseexpire on a day that is not a Business Day, such Interest Period shall expireon the next succeeding Business Day; provided that, if any InterestPeriod would otherwise expire on a day that is not a Business Day but is a dayof the month after which no further Business Day occurs in such month, suchInterest Period shall expire on the next preceding Business Day;

 

(iv)          anyInterest Period that begins on the last Business Day of a calendar month (or ona day for which there is no numerically corresponding day in the calendar monthat the end of such Interest Period) shall, subject to clause (v) of thissubsection 2.2B, end on the last Business Day of a calendar month;

 

(v)           noInterest Period with respect to any portion of the Term Loans shall extend beyondthe Term Loan Maturity Date, and no Interest Period with respect to any portionof the Revolving Loans shall extend beyond the Revolving Loan CommitmentTermination Date;

 

(vi)          noInterest Period with respect to any Type of Term Loans shall extend beyond adate on which Borrower is required to make a scheduled payment of principal ofsuch Type of Term Loans, unless the sum of (a) the aggregate principal amountof such Type of Term Loans that are Base Rate Loans plus (b) theaggregate principal amount of such Type of Term Loans that are LIBOR Loans withInterest Periods expiring on or before such date equals or exceeds theprincipal amount required to be paid on such Type of Term Loans on such date;

 

(vii)         noInterest Period with respect to any portion of the Revolving Loans shall extendbeyond the date on which a permanent reduction of the Revolving LoanCommitments is scheduled to occur unless the sum of (a) the aggregate principalamount of Revolving Loans that are Base Rate Loans plus (b) theaggregate principal amount of Revolving Loans that are LIBOR Loans withInterest Periods expiring on or before such date plus (c) the excess ofthe Revolving Loan Commitments then in effect over the aggregate principalamount of Revolving Loans then outstanding equals or exceeds the permanentreduction of the Revolving Loan Commitments that is scheduled to occur on suchdate;

 

(viii)        thereshall be no more than 10 Interest Periods outstanding at any time; and

 

(ix)           ifBorrower fails to specify an Interest Period for any LIBOR Loan in theapplicable Notice of Borrowing or Notice of Conversion/Continuation, Borrowershall be deemed to have selected an Interest Period of one month.

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**C.            InterestPayments.** Subject to the provisions of subsection 2.2E, interest on each Loanshall be payable in arrears on and to each Interest Payment Date applicable tothat Loan, upon any prepayment of that Loan (to the extent accrued on theamount being prepaid) and at maturity (including final maturity) providedthat if any Swing Line Loans or any Revolving Loans that are Base Rate Loansare prepaid pursuant to subsection 2.4B(i), interest accrued on such Loansthrough the date of such prepayment shall be payable on the next succeedingInterest Payment Date applicable to Base Rate Loans (or, if earlier, at finalmaturity).

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**D.            Conversion or Continuation.**

 

(i)            Subjectto the provisions of subsection 2.6, Borrower shall have the option (i) toconvert at any time all or any part of its outstanding Term Loans or RevolvingLoans from Loans bearing interest at a rate determined by reference to onebasis to Loans bearing interest at a rate determined by reference to analternative basis, in each case in the applicable Minimum Amount therefor, or(ii) upon the expiration of any Interest Period applicable to a LIBORLoan, to continue all or any portion of such Loan equal to $2,000,000 andintegral multiples of $100,000 in excess of that amount as a LIBOR Loan; provided,however, that a LIBOR Loan may only be converted into a Base Rate Loanon the expiration date of an Interest Period applicable thereto.

 

(ii)           Borrower shall deliver a Notice ofConversion/Continuation to Administrative Agent no later than 10:00 AM (NewYork City time) at least three Business Days in advance of the proposedconversion date (in the case of a conversion to a Base Rate Loan) and at leastthree Business Days in advance of the proposed conversion/continuation date (inthe case of a conversion to, or a continuation of, a LIBOR Loan).  With respect to any LIBOR Loan, if Borrowerfails to deliver a Notice of Conversion/Continuation as described above or ifany proposed conversion/continuation under this subsection 2.2D is notpermitted hereunder, Borrower shall be deemed to have elected to convert suchLIBOR Loan to a Base Rate Loan on the last day of the then-expiring InterestPeriod.

 

(iii)          A Notice of Conversion/Continuationshall specify (a) the proposed conversion/continuation date (which shallbe a Business Day), (b) the amount and Type of the Loan to beconverted/continued, (c) the nature of the proposedconversion/continuation, (d) in the case of a conversion to, or acontinuation of, a LIBOR Loan, the requested Interest Period, and (e) inthe case of a conversion to, or a continuation of, a LIBOR Loan, that noPotential Event of Default or Event of Default has occurred and iscontinuing.  In lieu of delivering theabove-described Notice of Conversion/Continuation, Borrower may giveAdministrative Agent telephonic notice by the required time of any proposedconversion/continuation under this subsection 2.2D, provided thatAdministrative Agent shall receive a Notice of Conversion/Continuation toconfirm such telephonic notice no later than 2:00 P.M. (New York City time) onthe day on which such telephonic notice is given.  Upon receipt of written or telephonic notice of any proposedconversion/continuation under this subsection 2.2D, Administrative Agent shallpromptly transmit such notice by telefacsimile or electronic mail (or bytelephone promptly confirmed by telefacsimile or electronic mail) to eachLender.

 

(iv)          Neither Administrative Agent nor anyLender shall incur any liability to Borrower in acting upon any telephonicnotice referred to above that Administrative Agent believes in good faith tohave been given by a duly authorized Officer or other person authorized to acton behalf of Borrower or for otherwise acting in good faith under thissubsection 2.2D, and upon conversion or continuation of the applicable basisfor determining the interest rate with respect to any Loans in accordance withthis Agreement pursuant to any such telephonic notice Borrower shall haveeffected a conversion or continuation, as the case may be, hereunder.

 

(v)           Except as otherwise provided insubsections 2.6B, 2.6C and 2.6G, a notice of a proposed conversion to, orcontinuation of, a LIBOR Loan (whether by delivery of a Notice ofConversion/Continuation or telephonic notice) shall be irrevocable onceAdministrative Agent receives such notice, and Borrower shall be bound toeffect a conversion or continuation in accordance therewith.

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**E.             DefaultRate.** Upon the occurrence and during the continuation of any Event of Default,the outstanding principal amount of all Loans and, to the extent permitted byapplicable law, any interest payments thereon not paid when due and any feesand other amounts then due and payable hereunder, shall thereafter bearinterest (including post-petition interest in any proceeding under theBankruptcy Code or other applicable bankruptcy laws) payable upon demand at a ratethat is 2.00% per annum in excess of the highest interest rate otherwisepayable under this Agreement with respect to the applicable Loans (or, in thecase of any such fees and other amounts, at a rate which is 2.00% per annum inexcess of the highest interest rate otherwise payable under this Agreement forRevolving Loans that are Base Rate Loans); provided that, in the case ofLIBOR Loans, upon the expiration of the Interest Period in effect at the timeany such increase in interest rate is effective such LIBOR Loans shallthereupon become Base Rate Loans and shall thereafter bear interest (includingpost-petition interest in any proceeding under the Bankruptcy Code or otherapplicable bankruptcy laws) payable upon demand at a rate which is 2.00% per annumin excess of the interest rate otherwise payable under this Agreement for BaseRate Loans.  Payment or acceptance ofthe increased rates of interest provided for in this subsection 2.2E isnot a permitted alternative to timely payment and shall not constitute a waiverof any Event of Default or otherwise prejudice or limit any rights or remediesof Administrative Agent or any Lender.

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**F.             Computation of Interest.** Interest on the Loans and other Obligations shall be computed(i) in the case of Base Rate Loans, on the basis of a 365-day year, and(ii) in the case of LIBOR Loans and other Obligations (other than BaseRate Loans), on the basis of a 360-day year, in each case for the actual numberof days elapsed in the period during which it accrues.  In computing interest on any Loan, the dateof the making of such Loan or the first day of an Interest Period applicable tosuch Loan or, with respect to a Base Rate Loan being converted from a LIBORLoan, the date of conversion of such LIBOR Loan to such Base Rate Loan, as thecase may be, shall be included, and the date of payment of such Loan or theexpiration date of an Interest Period applicable to such Loan or, with respectto a Base Rate Loan being converted to a LIBOR Loan, the date of conversion ofsuch Base Rate Loan to such LIBOR Loan, as the case may be, shall be excluded; providedthat if a Loan is repaid on the same day on which it is made, one day’sinterest shall be paid on that Loan.

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**2.3          Fees.**

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**A.         RevolvingLoan Commitment Fees.**  Borrower agrees to pay toAdministrative Agent, for distribution to each Lender in proportion to thatLender’s Pro Rata Share of the Revolving Loan Commitments, commitment fees forthe period from and including the Closing Date to and excluding the RevolvingLoan Commitment Termination Date equal to the average of the daily excess ofthe Revolving Loan Commitments over the sum of (i) the aggregate principalamount of outstanding Revolving Loans (but not any outstanding Swing LineLoans) plus (ii) the Letter of Credit Usage multiplied by(a) 0.75% per annum for each day the Total Utilization of Revolving LoanCommitments is less than or equal to 50% of the aggregate Revolving LoanCommitments, or (b) 0.50% per annum for each day the Total Utilization ofRevolving Loan Commitments is greater than 50% of the aggregate Revolving LoanCommitments, such commitment fees to be calculated on the basis of a 360-dayyear and the actual number of days elapsed and to be payable quarterly inarrears on the last Business Day of each March, June, September and December ofeach Fiscal Year, commencing on the first such date to occur after the ClosingDate, and on the Revolving Loan Commitment Termination Date.

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**B.            Other Fees.** Borrower agrees to pay to Lead Arranger and Administrative Agent suchfees in the amounts and at the times separately agreed upon between Borrower,Lead Arranger and Administrative Agent.

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**2.4          Repayments,Prepayments and Reductions in Revolving Loan Commitments; General ProvisionsRegarding Payments; Application of Proceeds of Collateral and Payments UnderSubsidiary Guaranty.**

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**A.    ScheduledPayments of Term Loans.**

 

(i)            ScheduledPayments of Term Loans.  Borrowershall make principal payments on the Term Loan in quarterly installments equalto 0.25% of the original principal amount thereof on each September 30,December, 31, March 31 and June 30, commencing on December 31, 2001 and throughand including the quarterly payment date immediately preceding the Term LoanMaturity Date.  On the Term LoanMaturity Date, Borrower shall make a final principal payment in the amount ofthe entire remaining principal balance of the original principal amount of theTerm Loan; provided that the scheduled installments of principal of theTerm Loans set forth above shall be reduced in connection with any voluntary ormandatory prepayments of the Term Loans in accordance withsubsection 2.4B(iv); and provided, further that the TermLoans and all other amounts owed hereunder with respect to the Term Loans shallbe paid in full no later than the Term Loan Maturity Date, and the finalinstallment payable by Borrower in respect of the Term Loans on such date shallbe in an amount, if such amount is different from that specified above,sufficient to repay all amounts owing by Borrower under this Agreement withrespect to the Term Loans.

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**B.            Prepayments and UnscheduledReductions in Revolving Loan Commitments.**

 

(i)            Voluntary Prepayments.Borrower may, upon not less than one Business Day’s irrevocable prior writtennotice, in the case of Base Rate Loans, and three Business Days’ irrevocableprior written notice, in the case of LIBOR Loans, in each case given toAdministrative Agent by 12:00 Noon (New York City time) on the date required(which written notice Administrative Agent will promptly transmit bytelefacsimile or electronic mail to each Lender for the Loans to be prepaid),at any time and from time to time prepay any Swing Line Loan on any BusinessDay in whole or in part in an aggregate minimum amount of $250,000 and integralmultiples of $100,000 in excess of that amount, and any Loans or RevolvingLoans on any Business Day in whole or in part in an aggregate minimum amount of$1,000,000 and integral multiples of $100,000 in excess of that amount; provided,however, that any LIBOR Loan may be prepaid on a day other than theexpiration of the Interest Period applicable thereto, only if Borrower pays theamounts due pursuant to subsection 2.6D caused by such prepayment.  Notice of prepayment having been given asaforesaid, the principal amount of the Loans specified in such notice shallbecome due and payable on the prepayment date specified therein.  Any such voluntary prepayment shall beapplied as specified in subsection 2.4B(iv).

 

(ii)           Voluntary Reductions of RevolvingLoan Commitments.  Borrower may,upon not less than five Business Days’ irrevocable prior written notice toAdministrative Agent (which written notice Administrative Agent will promptlytransmit to each Lender), at any time and from time to time terminate in wholeor permanently reduce in part, without premium or penalty, the Revolving LoanCommitments in an amount up to the amount by which the Revolving LoanCommitments exceed the Total Utilization of Revolving Loan Commitments at thetime of such proposed termination or reduction; provided that any suchpartial reduction of the Revolving Loan Commitments shall be in an aggregateminimum amount of $1,000,000 and integral multiples of $100,000 in excess ofthat amount.  Borrower’s notice toAdministrative Agent shall designate the date (which shall be a Business Day)of such termination or reduction and the amount of any partial reduction, andsuch termination or reduction of the Revolving Loan Commitments shall beeffective on the date specified in Borrower’s notice and shall reduce theRevolving Loan Commitment of each Revolving Lender proportionately to its ProRata Share.

 

(iii)          Mandatory Prepayments and MandatoryReductions of Revolving Loan Commitments. The Loans shall be prepaid and/or the Revolving Loan Commitments shallbe permanently reduced in the amounts and under the circumstances set forthbelow, all such prepayments and/or reductions to be applied as set forth belowor as more specifically provided in subsection 2.4B(iv):

 

(a)           Prepayments and Reductions FromNet Asset Sale Proceeds.  No laterthan the date of receipt by Borrower or any of its Subsidiaries of any NetAsset Sale Proceeds in respect of any Asset Sale, Borrower shall either(1) prepay the Loans and/or the Revolving Loan Commitments shall bepermanently reduced in an aggregate amount equal to such Net Asset SaleProceeds; or (2) so long as no Potential Event of Default under subsections8.1, 8.6 or 8.7 and no Event of Default shall have occurred and be continuing,and to the extent that aggregate Net Asset Sale Proceeds for the then currentFiscal Year do not exceed $1,000,000 for such Fiscal Year, deliver toAdministrative Agent an Officers’ Certificate setting forth (x) that portion ofsuch Net Asset Sale Proceeds that Borrower or such Subsidiary intends to reinvestin equipment or other productive assets of the general type used in thebusiness of Borrower and its Subsidiaries within 180 days of such date ofreceipt; and (y) the proposed use of such portion of the Net Asset SaleProceeds and such other information with respect to such reinvestment asAdministrative Agent may reasonably request, and Borrower shall, or shall causeone or more of its Subsidiaries to, promptly and diligently apply such portionto such reinvestment purposes; provided, however, that anyportion of the Net Asset Sale Proceeds not intended for reinvestment shall beapplied to prepay outstanding Loans and/or reduce the Revolving LoanCommitments to the full extent thereof. In addition, Borrower shall, no later than 180 days after receipt ofsuch Net Asset Sale Proceeds that have not theretofore been applied to theObligations or that have not been so reinvested as provided above, make anadditional prepayment of the Loans (and/or the Revolving Loan Commitments shallbe permanently reduced) in the full amount of all such Net Asset Sale Proceeds.

 

(b)           Prepayments and Reductions fromNet Insurance/Condemnation Proceeds. No later than the first Business Day following the date of receipt byAdministrative Agent or by Borrower or any of its Subsidiaries of any NetInsurance/Condemnation Proceeds that are required to be applied to prepay theLoans and/or reduce the Revolving Loan Commitments pursuant to the provisionsof subsection 6.4C and, if such Net Insurance/Condemnation Proceeds are not appliedto restoration or reconstruction, then immediately following the 180thday (or immediately following the last day of such longer period as isnecessary to complete such restoration or reconstruction so long as Borrowerdiligently initiates and continues to prosecute such restoration orreconstruction within such 180-day period) occurring after the receipt byBorrower or any of its Subsidiaries of such Net Insurance/CondemnationProceeds, Borrower shall prepay the Loans and/or the Revolving Loan Commitmentsshall be permanently reduced in an aggregate amount equal to the amount of suchNet Insurance/Condemnation Proceeds.

 

(c)           Prepaymentsand Reductions Due to Issuance of Equity Securities.  On the date of receipt of the Net SecuritiesProceeds from the issuance of any Capital Stock of Borrower of its Subsidiariesor from any capital contribution to Borrower or any of its Subsidiaries by anyholder of Capital Stock thereof (other than Borrower or one of itsSubsidiaries) after the Closing Date, Borrower shall prepay the Loans and/orthe Revolving Loan Commitments shall be permanently reduced in an aggregateamount equal to such Net Securities Proceeds;provided, however, if on such date of receipt Borrower hasachieved and is maintaining a Consolidated Total Leverage Ratio of less than3.00:1.00, and so long as no Potential Event of Default or Event of Default hasoccurred and is continuing, Borrower shall be entitled to retain up to fiftypercent (50%) of such Net Securities Proceeds and shall not be required toprepay the Loans and/or reduce the Revolving Loan Commitments with suchretained proceeds.

 

(d)           Reversionof Surplus Assets of Pension Plans. On the date of return to Borrower or any of its Subsidiaries or anysurplus assets of any Pension Plan of Borrower or any of its Subsidiaries,Borrower shall prepay the Loans and/or the Revolving Loan Commitments shall bepermanently reduced in an aggregate amount (such amount being the “**Net Pension Proceeds**” equal to 100% of suchreturned surplus assets, net of transaction costs and expenses incurred inobtaining such return, including incremental taxes payable as a result thereof.

 

(e)           Prepaymentsand Reductions Due to Issuance of Indebtedness.  On the date of receipt of the Net Securities Proceeds from theissuance of any Indebtedness of Borrower or any of its Subsidiaries after theClosing Date, other than Indebtedness permitted pursuant tosubsection 7.1, Borrower shall prepay the Loans and/or the Revolving LoanCommitments shall be permanently reduced in an aggregate amount equal to suchNet Securities Proceeds.

 

(f)            Prepayments and Reductions fromConsolidated Excess Cash Flow.  Ifthere shall be Consolidated Excess Cash Flow for any Fiscal Year (commencingwith Fiscal Year 2002), Borrower shall, no later than 90 days after the end ofsuch Fiscal Year, prepay the Loans and the Revolving Loan Commitments shall bepermanently reduced in an aggregate amount equal to 50% of such ConsolidatedExcess Cash Flow if at the end of such Fiscal Year the Consolidated TotalLeverage Ratio is greater than or equal to 4:00 to 1:00.

 

(g)           Calculations of Net ProceedsAmounts; Additional Prepayments and Reductions Based on Subsequent Calculations.  Concurrently with any prepayment of theLoans and/or reduction of the Revolving Loan Commitments pursuant tosubsections 2.4B(iii)(a)-(f), Borrower shall deliver to Administrative Agent anOfficers’ Certificate demonstrating the calculation of the amount (the “**Net Proceeds Amount**”) of the applicable NetAsset Sale Proceeds, Net Insurance/Condemnation Proceeds, Net Pension Proceeds,Net Securities Proceeds, or Consolidated Excess Cash Flow, as the case may be,that gave rise to such prepayment and/or reduction.  If Borrower subsequently determines that the actual Net ProceedsAmount was greater than the amount set forth in such Officers’ Certificate(including if any actual taxes to be paid as a result of an Asset Sale is lessthan the estimated taxes to be paid as a result of such Asset Sale), Borrowershall promptly make an additional prepayment of the Loans (and/or, ifapplicable, the Revolving Loan Commitments shall be permanently reduced) in anamount equal to the amount of such excess, and Borrower shall concurrentlytherewith deliver to Administrative Agent an Officers’ Certificatedemonstrating the derivation of the additional Net Proceeds Amount resulting insuch excess.

 

(h)           PrepaymentsDue to Reductions or Restrictions of Revolving Loan Commitments.  Borrower shall from time to time firstprepay the Swing Line Loans, second prepay the Revolving Loans and thirdcash collateralize any outstanding Letters of Credit to the extent necessary sothat the Total Utilization of Revolving Loan Commitments shall not at any timeexceed the Revolving Loan Commitments then in effect.

 

(iv)          Application of Prepayments.

 

(a)           Applicationof Voluntary Prepayments by Type of Loans and Order of Maturity.  Subject to the provisions of subsection2.4D, any voluntary prepayments pursuant to subsection 2.4B(i) shall be appliedas specified by Borrower in the applicable notice of prepayment; providedthat if Borrower fails to specify the Loans to which any such prepayment shallbe applied, such prepayment shall be applied first to repay outstandingTerm Loans to the full extent thereof, second to repay outstanding SwingLine Loans to the full extent thereof, and third to repay outstandingRevolving Loans and cash collateralize outstanding Letters of Credit to thefull extent thereof and permanently reduce the Revolving Loan Commitments.  Any voluntary prepayments of the Term Loanspursuant to subsection 2.4B(i) shall be applied to reduce the scheduledinstallments of principal of the Term Loans set forth in subsection 2.4A(i) ininverse chronological order of maturity.

 

(b)           Application of Mandatory Prepaymentsby Type of Loans.  Subject to theprovisions of subsection 2.4D, any amount required to be applied as a mandatoryprepayment of the Term Loans and/or a reduction of the Revolving LoanCommitments pursuant to subsections 2.4B(iii)(a)-(g) shall be firstapplied to prepay the Term Loans to the full extent thereof, second, tothe extent of any remaining portion of such amount, applied to prepay the SwingLine Loans to the full extent thereof and to permanently reduce the RevolvingLoan Commitments by the amount of such prepayment, third, to the extentof any remaining portion of such amount, applied to prepay the Revolving Loansto the full extent thereof and to cash collateralize any outstanding Letters ofCredit and to further permanently reduce the Revolving Loan Commitments by theamount of such prepayment, and fourth, to the extent of any remainingportion of such amount, retained by Borrower; provided, however,the Revolving Loan Commitment shall be permanently reduced by the full extentof the amount so retained.  If an Eventof Default has occurred and is continuing, any amount required to be applied asa mandatory prepayment shall be applied as set forth in subsection 2.4D. Any mandatory prepayments of the Term Loans pursuant to subsection2.4B(iii) shall be applied to reduce the scheduled installments of principal ofthe Term Loans set forth in subsection 2.4A(i) in inverse chronological orderof maturity.

 

(c)           Application of Prepayments to BaseRate Loans and LIBOR Loans. Considering Term Loans and Revolving Loans being prepaid separately, anyprepayment thereof shall be applied first to Base Rate Loans to the full extentthereof before application to LIBOR Loans, in each case in a manner whichminimizes the amount of any payments required to be made by Borrower pursuantto subsection 2.6D;

 

(d)           Prepaymentsof Term Loans Within Two Years of the Closing Date.  Any prepayments of the Term Loans pursuantto subsection 2.4B(i) shall be subjectto a premium equal to (i) with respect to prepayments made on or before thefirst anniversary of the Closing Date, 2.00% of the principal amount of TermLoans prepaid; and (ii) with respect to prepayments made after the firstanniversary of the Closing Date and on or before the second anniversary of theClosing Date, 1.00% of the principal amount of Term Loans prepaid.

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**C.            General Provisions RegardingPayments**.

 

(i)            Manner and Time of Payment.  All payments by Borrower of principal,interest, fees and other Obligations hereunder and under the Notes shall bemade in Dollars in same day funds, without defense, setoff or counterclaim,free of any restriction or condition, and delivered to Administrative Agent notlater than 2:00 P.M. (New York City time) on the date due at the AdministrativeAgent’s Office for the account of Lenders; funds received by AdministrativeAgent after that time on such due date shall be deemed to have been paid byBorrower on the next succeeding Business Day. Borrower hereby authorizes Administrative Agent to charge its accountswith Administrative Agent in order to cause timely payment to be made toAdministrative Agent of all principal, interest, fees and expenses duehereunder (subject to sufficient funds being available in its accounts for thatpurpose).

 

(ii)           Application of Payments.  Prior to any payments being applied toprincipal or interest under this Agreement or under the Notes, such paymentsshall first be applied to any outstanding and payable fees, costs, expenses,indemnities or other amounts (aside from principal or interest due under theLoan Documents), as determined in the reasonable opinion of AdministrativeAgent.

 

(iii)          Applicationof Payments to Principal and Interest. Except as provided in subsection 2.2C, all payments in respect of theprincipal amount of any Loan shall include payment of accrued interest on theprincipal amount being repaid or prepaid, and all such payments (and, in anyevent, any payments in respect of any Loan on a date when interest is due andpayable with respect to such Loan) shall be applied to the payment of interestbefore application to principal.

 

(iv)          Apportionment of Payments.  Aggregate principal and interest payments inrespect of Term Loans and Revolving Loans shall be apportioned among alloutstanding Loans to which such payments relate, in each case proportionatelyto Lenders’ respective Pro Rata Shares. Administrative Agent shall promptly distribute to each Lender, at itsprimary address set forth below its name on the appropriate signature pagehereof or at such other address as such Lender may request, its Pro Rata Shareof all such payments received by Administrative Agent and the commitment feesof such Lender, if any, when received by Administrative Agent pursuant tosubsection 2.3.  Notwithstandingthe foregoing provisions of this subsection 2.4C(iv), if, pursuant to theprovisions of subsection 2.6C, any Notice of Conversion/Continuation iswithdrawn as to any Affected Lender or if any Affected Lender makes Base RateLoans in lieu of its Pro Rata Share of any LIBOR Loans, Administrative Agentshall give effect thereto in apportioning payments received thereafter.

 

(v)           Paymentson Business Days.  Subject tosubsection 2.2B(iii), whenever any payment to be made hereunder shall be statedto be due on a day that is not a Business Day, such payment shall be made onthe next succeeding Business Day and such extension of time shall be includedin the computation of the payment of interest hereunder or of the commitmentfees hereunder, as the case may be.

 

(vi)          Notationof Payment.  Each Lender agrees thatbefore disposing of any Note held by it, or any part thereof (other than bygranting participations therein), that Lender will use reasonable efforts tomake a notation thereon of all Loans evidenced by that Note and all principalpayments previously made thereon and of the date to which interest thereon hasbeen paid; provided that the failure to make (or any error in the makingof) a notation of any Loan made under such Note shall not limit or otherwiseaffect the obligations of Borrower hereunder or under such Note with respect toany Loan or any payments of principal or interest on such Note or result in anyliability for such Lender; provided, however, further,that in the event of any inconsistency the Register shall govern (absent manifesterror).

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**D.            Application of Proceeds ofCollateral and Payments after Event of Default**.

 

(i)            Uponthe occurrence and during the continuation of an Event of Default, (a) allpayments received on account of the Obligations, whether from Company, from anyGuarantor or otherwise, shall be applied by Administrative Agent against theObligations and (b) all proceeds received by Administrative Agent in respect ofany sale of, collection from, or other realization upon all or any part of theCollateral under any Collateral Document may, in the discretion ofAdministrative Agent, be held by Administrative Agent as Collateral for, and/or(then or at any time thereafter) applied in full or in part by AdministrativeAgent against, the applicable Secured Obligations (as defined in suchCollateral Document), in each case in the following order of priority:

 

(a)           Tothe payment of all costs and expenses of such sale, collection or otherrealization, including reasonable compensation to Administrative Agent and itsagents and counsel, and all other expenses, liabilities and advances made orincurred by Administrative Agent in connection therewith, and all amounts forwhich Administrative Agent is entitled to compensation (including the feesdescribed in subsection 2.3), reimbursement and indemnification under any Loansuch Document and all advances made by Administrative Agent thereunder for theaccount of the applicable Loan Party, and to the payment of all costs andexpenses paid or incurred by Administrative Agent in connection with the LoanDocuments, all in accordance with subsections 9.4, 10.2 and 10.3 and the otherterms of this Agreement and the Loan Documents;

 

(b)           thereafter,to the extent of any excess such proceeds, to the payment of all other SecuredObligations (as defined in such Collateral Document) for the ratable benefit ofthe holders thereof (subject to the provisions of subsection 2.4C(ii)); and

 

(c)           thereafter,to the extent of any excess such proceeds, to the payment to or upon the orderof such Loan Party or to whosoever may be lawfully entitled to receive the sameor as a court of competent jurisdiction may direct.

 

(ii)           Applicationof Payments Under Subsidiary Guaranty. All payments received by Administrative Agent under the SubsidiaryGuaranty shall be applied promptly from time to time by Administrative Agent inthe following order of priority:

 

(a)           Tothe payment of the costs and expenses of any collection or other realizationunder the Subsidiary Guaranty, including reasonable compensation to AdministrativeAgent and its counsel, and all expenses, liabilities and advances made orincurred by Administrative Agent in connection therewith, all in accordancewith the terms of this Agreement and the Subsidiary Guaranty;

 

(b)           thereafter,to the extent of any excess such payments, to the payment of all otherGuarantied Obligations (as defined in the Subsidiary Guaranty for the ratablebenefit of the holders thereof); and

 

(c)           thereafter,to the extent of any excess such payments, to the payment to the applicableSubsidiary Guarantor or to whosoever may be lawfully entitled to receive thesame or as a court of competent jurisdiction may direct.

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**2.5          Use of Proceeds.**

** **

**A.            TermLoans**. The proceeds of the Term Loans shall be applied by Borrower to refinancethe obligations of Borrower under Existing Credit Agreement and to payTransaction Costs.

** **

**B.            RevolvingLoans; Swing Line Loans**. The proceeds of the Revolving Loans and any Swing Line Loans shall beapplied by Borrower for working capital and other general corporate purposes,which may include the making of intercompany loans to any of Borrower’swholly-owned Domestic Subsidiaries that are Subsidiary Guarantors, inaccordance with subsection 7.1(iii), for their own general corporate purposes,including working capital, capital expenditures, acquisitions and investments.

** **

**C.            MarginRegulations**. No portion of the proceeds of any borrowing under this Agreement shallbe used by Borrower or any of its Subsidiaries in any manner that might causethe borrowing or the application of such proceeds to violate Regulation T,Regulation U or Regulation X of the Board of Governors of the FederalReserve System or any other regulation of such Board or to violate the ExchangeAct, in each case as in effect on the date or dates of such borrowing and suchuse of proceeds.

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**2.6          Special Provisions Governing LIBORLoans****.**

 

Notwithstandingany other provision of this Agreement to the contrary, the following provisionsshall govern with respect to LIBOR Loans as to the matters covered:

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**A.            Determination of Applicable InterestRate.**  As soon as practicable after 12:00 Noon (NewYork City time) on each Interest Rate Determination Date, Administrative Agentshall determine (which determination shall, absent manifest error, be final, conclusiveand binding upon all parties) the interest rate that shall apply to the LIBORLoans for which an interest rate is then being determined for the applicableInterest Period and shall promptly give notice thereof (in writing or bytelephone confirmed in writing) to Borrower and each Lender.

** **

**B.            Inabilityto Determine Applicable Interest Rate**.  If Administrative Agent shall havedetermined (which determination shall be final and conclusive and binding uponall parties hereto), on any Interest Rate Determination Date with respect toany LIBOR Loans, that by reason of circumstances affecting the interbankEurodollar market adequate and fair means do not exist for ascertaining theinterest rate applicable to such Loans on the basis provided for in the definitionof Adjusted LIBOR, Administrative Agent shall on such date give notice (bytelefacsimile or by telephone confirmed in writing) to Borrower and each Lenderof such determination, whereupon (i) no Loans may be made as, or convertedto, LIBOR Loans until such time as Administrative Agent notifies Borrower andLenders that the circumstances giving rise to such notice no longer exist and(ii) any Notice of Borrowing or Notice of Conversion/Continuation given byBorrower with respect to the Loans in respect of which such determination wasmade shall be deemed to be rescinded by Borrower.

 

**C.            Illegalityor Impracticability of LIBOR Loans**.  If any date any Lender shall have determined(which determination shall be final, conclusive and binding upon all partieshereto but shall be made only after consultation with Borrower andAdministrative Agent) that the making, maintaining or continuation of its LIBORLoans (i) has become unlawful as a result of compliance by such Lender ingood faith with any law, treaty, governmental rule, regulation, guideline ororder (or would conflict with any such treaty, governmental rule, regulation,guideline or order not having the force of law even though the failure tocomply therewith would not be unlawful) or (ii) has become impracticable,or would cause such Lender material hardship, as a result of contingenciesoccurring after the date of this Agreement which materially and adverselyaffect the interbank Eurodollar market or the position of such Lender in thatmarket, then, and in any such event, such Lender shall be an **“AffectedLender”** and it shall on that day give notice (by telefacsimile or bytelephone confirmed in writing) to Borrower and Administrative Agent of suchdetermination (which notice Administrative Agent shall promptly transmit toeach other Lender).  Thereafter(a) the obligation of Affected Lender to make Loans as, or to convertLoans to, LIBOR Loans shall be suspended until such notice shall be withdrawnby Affected Lender, (b) to the extent such determination by AffectedLender relates to a LIBOR Loan then being requested by Borrower pursuant to aNotice of Borrowing or a Notice of Conversion/Continuation, Affected Lendershall make such Loan as (or convert such Loan to, as the case may be) a BaseRate Loan, (c) the Affected Lender’s obligation to maintain itsoutstanding LIBOR Loans (the **“Affected Loans”**) shall be terminated atthe earlier to occur of the expiration of the Interest Period then in effectwith respect to the Affected Loans or when required by law, and (d) theAffected Loans shall automatically convert into Base Rate Loans on the date ofsuch termination.  Notwithstanding theforegoing, to the extent a determination by an Affected Lender as describedabove relates to a LIBOR Loan then being requested by Borrower pursuant to aNotice of Borrowing or a Notice of Conversion/Continuation, Borrower shall havethe option, subject to the provisions of subsection 2.6D, to rescind suchNotice of Borrowing or Notice of Conversion/Continuation as to all Lenders bygiving notice (by telefacsimile or by telephone confirmed in writing) toAdministrative Agent of such rescission on the date on which the AffectedLender gives notice of its determination as described above (which notice ofrescission Administrative Agent shall promptly transmit to each otherLender).  Except as provided in theimmediately preceding sentence, nothing in this subsection 2.7C shall affectthe obligation of any Lender other than an Affected Lender to make or maintainLoans as, or to convert Loans to, LIBOR Loans in accordance with the terms ofthis Agreement.

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**D.            CompensationFor Breakage or Non-Commencement of Interest Periods.**  Borrower shall compensate each Lender, uponwritten request by that Lender (which request shall set forth the basis forrequesting such amounts) pursuant to subsection 2.8, for all reasonable losses,expenses and liabilities (including any interest paid by that Lender to lendersof funds borrowed by it to make or carry its LIBOR Loans and any loss, expense orliability sustained by that Lender in connection with the liquidation orre-employment of such funds) which that Lender may sustain: (i) if for anyreason (other than a default by that Lender) a borrowing of any LIBOR Loan doesnot occur on a date specified therefor in a Notice of Borrowing or a telephonicrequest therefor, or a conversion to or continuation of any LIBOR Loan does notoccur on a date specified therefor in a Notice of Conversion/Continuation or atelephonic request therefor, (ii) if any prepayment (including anyprepayment described in subsection 2.4B(i) or conversion occasioned by thecircumstances described in subsection 2.6C) or other principal payment or anyconversion of any of its LIBOR Loans occurs on a date prior to the last day ofan Interest Period applicable to that Loan, (iii) if any prepayment of anyof its LIBOR Loans is not made on any date specified in a notice of prepaymentgiven by Borrower, or (iv) as a consequence of any other default byBorrower in the repayment of its LIBOR Loans when required by the terms of thisAgreement.

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**E.             Booking of LIBOR Loans**. Any Lender may make, carry or transfer LIBOR Loans at, to, or for theaccount of any of its branch offices or the office of an Affiliate of thatLender.

 

**F.             Assumptions Concerning Funding ofLIBOR Loans**.Calculation of all amounts payable to a Lender under this subsection 2.6 andunder subsection 2.7A shall be made as though that Lender had actually fundedeach of its relevant LIBOR Loans through the purchase of a Eurodollar depositbearing interest at the rate obtained pursuant to clause (i) of the definitionof Adjusted LIBOR in an amount equal to the amount of such LIBOR Loan andhaving a maturity comparable to the relevant Interest Period, whether or notits LIBOR Loans had been funded in such manner and through the transfer of suchEurodollar deposit from an offshore office of that Lender to a domestic officeof that Lender in the United States of America; provided, however,that each Lender may fund each of its LIBOR Loans in any manner it sees fit andthe foregoing assumptions shall be utilized only for the purposes ofcalculating amounts payable under this subsection 2.6 and under subsection2.7A.

** **

**G.            LIBORLoans After Default**. After the occurrence of and during the continuation of a Potential Eventof Default or an Event of Default, (i) Borrower may not elect to have aLoan be made or maintained as, or converted to, a LIBOR Loan after theexpiration of any Interest Period then in effect for that Loan and (ii) subjectto the provisions of subsection 2.6D, any Notice of Borrowing or Notice ofConversion/Continuation given by Borrower with respect to a requested borrowingor conversion/continuation that has not yet occurred shall be deemed to berescinded by Borrower.

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**2.7          Increased Costs; Taxes; CapitalAdequacy****.**

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**A.            Compensationfor Increased Costs and Taxes.**  Subject to the provisions of subsection 2.7B(which shall be controlling with respect to the matters covered thereby), ifany Lender shall determine (which determination shall, absent manifest error,be final and conclusive and binding upon all parties hereto) that any law,treaty or governmental rule, regulation or order, or any change therein or inthe interpretation, administration or application thereof (including theintroduction of any new law, treaty or governmental rule, regulation or order),or any determination of a court or Governmental Authority, in each case thatbecomes effective after the date hereof, or compliance by such Lender with anyguideline, request or directive issued or made after the date hereof by anycentral bank or other governmental or quasi-Governmental Authority (whether ornot having the force of law):

 

(i)            subjectssuch Lender (or its applicable lending office) to any additional Tax withrespect to this Agreement or any of its obligations hereunder (including withrespect to issuing or maintaining any Letters of Credit or purchasing ormaintaining any participations therein or maintaining any Commitment hereunder)or any payments to such Lender (or its applicable lending office) of principal,interest, fees or any other amount payable hereunder;

 

(ii)           imposes,modifies or holds applicable any reserve (including any marginal, emergency,supplemental, special or other reserve), special deposit, compulsory loan, FDICinsurance or similar requirement against assets held by, or deposits or otherliabilities in or for the account of, or advances or loans by, or other creditextended by, or any other acquisition of funds by, any office of such Lender(other than any such reserve or other requirements with respect to LIBOR Loansthat are reflected in the definition of Adjusted LIBOR); or

 

(iii)          imposesany other condition (other than with respect to a Tax matter) on or affectingsuch Lender (or its applicable lending office) or its obligations hereunder orthe interbank Eurodollar market;

 

andthe result of any of the foregoing is to increase the cost to such Lender ofagreeing to make, making or maintaining its Loans or Commitments or agreeing toissue, issuing or maintaining any Letter of Credit or agreeing to purchase,purchasing or maintaining any participation therein or to reduce any amountreceived or receivable by such Lender (or its applicable lending office) withrespect thereto; then, in any such case, Borrower shall promptly pay to suchLender, upon receipt of the statement referred to in the next sentence, suchadditional amount or amounts (in the form of an increased rate of, or adifferent method of calculating, interest or otherwise as such Lender in itssole discretion shall determine) as may be necessary to compensate such Lenderfor any such increased cost or reduction in amounts received or receivablehereunder.

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**B.            Withholding of Taxes.**

 

(i)            Paymentsto Be Free and Clear.  All sumspayable by Borrower under this Agreement and the other Loan Documents shall bepaid free and clear of, and without any deduction or withholding on account of,any Tax imposed, levied, collected, withheld or assessed by or within theUnited States of America or any political subdivision in or of the UnitedStates of America or any other jurisdiction from or to which a payment is madeby or on behalf of Borrower or by any federation or organization of which theUnited States of America or any such jurisdiction is a member at the time ofpayment.

 

(ii)           Grossing-upof Payments.  If Borrower or anyother Person is required by law to make any deduction or withholding on accountof any such Tax from any sum paid or payable by Borrower to AdministrativeAgent or any Lender under any of the Loan Documents:

 

(a)           Borrowershall notify Administrative Agent of any such requirement or any change in anysuch requirement as soon as Borrower becomes aware of it;

 

(b)           Borrowershall pay any such Tax when such Tax is due, such payment to be made (if theliability to pay is imposed on Borrower) for its own account or (if thatliability is imposed on Administrative Agent or such Lender, as the case maybe) on behalf of and in the name of Administrative Agent or such Lender;

 

(c)           thesum payable by Borrower in respect of which the relevant deduction, withholdingor payment is required shall be increased to the extent necessary to ensurethat, after the making of that deduction, withholding or payment,Administrative Agent or such Lender, as the case may be, receives on the duedate a net sum equal to what it would have received had no such deduction,withholding or payment been required or made; and

 

(d)           within30 days after paying any sum from which it is required by law to make anydeduction or withholding, and within 30 days after the due date of payment ofany Tax which it is required by clause (b) above to pay, Borrower shall deliverto Administrative Agent and/or other affected parties evidence satisfactory tothe other affected parties of such deduction, withholding or payment and of theremittance thereof to the relevant taxing or other authority;

 

provided that no such additional amount shall berequired to be paid to any Lender under clause (c) above (i) to the extent suchadditional amount relates to a portion of any sums paid or payable to suchLender under any of the Loan Documents with respect to which such Lender doesnot act for its own account, or (ii) except to the extent that any change afterthe date such Lender became a Lender in any such requirement for a deduction,withholding or payment as is mentioned therein shall result in an increase inthe rate of such deduction, withholding or payment from that in effect at thedate on which such Lender became a Lender, in respect of payments to suchLender.

 

(iii)          Evidence of Exemption from U.S.Withholding Tax.

 

(a)           Each Lender that is organized underthe laws of any jurisdiction other than the United States or any state or otherpolitical subdivision thereof (for purposes of this subsection 2.7B(iii), a “**Non-USLender**”) shall deliver to Administrative Agent and to Borrower, onor prior to the Closing Date (in the case of each Lender listed on thesignature pages hereof) or on or prior to the date of the Assignment Agreementpursuant to which it becomes a Lender (in the case of each other Lender), andat such other times as may be necessary in the determination of Borrower orAdministrative Agent (each in the reasonable exercise of its discretion), twooriginal copies of Internal Revenue Service Form W-8BEN or W-8ECI (or anysuccessor forms) properly completed and duly executed by such Non-US Lender,or, in the case of a Non-US Lender claiming exemption from United Statesfederal withholding tax under Section 871(h) or 881(c) of the Internal RevenueCode with respect to payments of “portfolio interest”, a form W-8BEN, and, inthe case of a Non-US Lender that has certified in writing to AdministrativeAgent that it is not a “bank” (as defined in Section 881(c)(3)(A) of theInternal Revenue Code), a certificate of such Non-US Lender certifying thatsuch Non-US Lender is not (i) a “bank” for purposes of Section 881(c) ofthe Internal Revenue Code, (ii) a ten-percent shareholder (within the meaningof Section 871(h)(3)(B) of the Internal Revenue Code) of Borrower, or(iii) a controlled foreign corporation related to Borrower (within themeaning of Section 864(d)(4) of the Internal Revenue Code) in each casetogether with any other certificate or statement of exemption required underthe Internal Revenue Code or the regulations issued thereunder to establishthat such Non-US Lender is not subject to United States withholding tax withrespect to any payments to such Non-US Lender of interest payable under any ofthe Loan Documents.

 

(b)           EachNon-US Lender, to the extent it does not act or ceases to act for its ownaccount with respect to any portion of any sums paid or payable to such Lenderunder any of the Loan Documents (for example, in the case of a typicalparticipation by such Lender), shall deliver to Administrative Agent and toBorrower, on or prior to the Closing Date (in the case of each Lender listed onthe signatures pages hereof), on or prior to the date of the AssignmentAgreement pursuant to which it becomes a Lender (in the case of each otherLender), or on such later date when such Non-US Lender ceases to act for itsown account with respect to any portion of any such sums paid or payable, andat such other times as may be necessary in the determination of Borrower orAdministrative Agent (each in the reasonable exercise of its discretion), (1)two original copies of the forms or statements required to be provided by suchNon-US Lender under subsection 2.7B(iii)(a), properly completed and dulyexecuted by such Non-US Lender, to establish the portion of any such sums paidor payable with respect to which such Non-US Lender acts for its own accountthat is not subject to United States withholding tax, and (2) two originalcopies of Internal Revenue Service Form W-8IMY (or any successor forms)properly completed and duly executed by such Non-US Lender, together with anyinformation, if any, such Non-US Lender chooses to transmit with such form, andany other certificate or statement of exemption required under the InternalRevenue Code or the regulations issued thereunder, to establish that suchNon-US Lender is not acting for its own account with respect to a portion ofany such sums payable to such Non-US Lender.

 

(c)           EachNon-US Lender hereby agrees, from time to time after the initial delivery bysuch Non-US Lender of such forms, whenever a lapse in time or change incircumstances renders such forms, certificates or other evidence so deliveredobsolete or inaccurate in any material respect or if, by virtue of a change inlaw or regulations, such forms are no longer valid evidence of a person’sexemption from withholding tax which is reasonably satisfactory to Borrower,that such Non-US Lender shall promptly (1) deliver to Administrative Agentand to Borrower two original copies of renewals, amendments or additional orsuccessor forms, properly completed and duly executed by such Non-US Lender,together with any other certificate or statement of exemption required in orderto confirm or establish that such Non-US Lender is not subject to United Stateswithholding tax with respect to payments to such Non-US Lender under the LoanDocuments and, if applicable, that such Non-US Lender does not act for its ownaccount with respect to any portion of any such payments, or (2) notifyAdministrative Agent and Borrower of its inability to deliver any such forms,certificates or other evidence.

 

(d)           Borrowershall not be required to pay any additional amount to any Non-US Lender underclause (c) of subsection 2.7B(ii) if such Non-US Lender shall have failed tosatisfy the requirements of clause (a), (b) or (c)(1) of this subsection2.7B(iii); provided that if such Non-US Lender shall have satisfied therequirements of subsection 2.7B(iii)(a) on the date such Non-US Lender became aLender, nothing in this subsection 2.7B(iii)(d) shall relieve Borrower of itsobligation to pay any amounts pursuant to subsection 2.7B(ii)(c) if, as aresult of any change in any applicable law, treaty or governmental rule,regulation or order, or any change in the interpretation, administration orapplication thereof, such Non-US Lender is no longer properly entitled todeliver forms, certificates or other evidence at a subsequent date establishingthe fact that such Non-US Lender is not subject to withholding as described insubsection 2.7B(iii)(a).

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**C.            CapitalAdequacy Adjustment**. If any Lender shall have determined that the adoption, effectiveness,phase-in or applicability after the date hereof of any law, rule or regulation(or any provision thereof) regarding capital adequacy, or any change therein orin the interpretation or administration thereof by any Governmental Authority,central bank or comparable agency charged with the interpretation oradministration thereof, or compliance by any Lender (or its applicable lendingoffice) with any guideline, request or directive regarding capital adequacy(whether or not having the force of law) of any such Governmental Authority,central bank or comparable agency, has or would have the effect of reducing therate of return on the capital of such Lender or any corporation controllingsuch Lender as a consequence of, or with reference to, such Lender’s Loans orCommitments or Letters of Credit or participations therein or other obligationshereunder with respect to the Loans or the Letters of Credit to a level belowthat which such Lender or such controlling corporation could have achieved butfor such adoption, effectiveness, phase-in, applicability, change or compliance(taking into consideration the policies of such Lender or such controllingcorporation with regard to capital adequacy), then from time to time, withinfive Business Days after receipt by Borrower from such Lender of the statementreferred to in the next sentence, Borrower shall pay to such Lender suchadditional amount or amounts as will compensate such Lender or such controllingcorporation on an after-tax basis for such reduction. Such Lender shall deliverto Borrower (with a copy to Administrative Agent) a written statement, settingforth in reasonable detail the basis of the calculation of such additionalamounts, which statement shall be conclusive and binding upon all partieshereto absent manifest error.

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**2.8          Obligation of Lenders and IssuingLenders to Mitigate**.

 

Each Lender andIssuing Lender agrees that, as promptly as practicable after the officer ofsuch Lender or Issuing Lender responsible for administering the Loans orLetters of Credit of such Lender or Issuing Lender, as the case may be, becomesaware of the occurrence of an event or the existence of a condition that wouldcause such Lender to become an Affected Lender or that would entitle suchLender or Issuing Lender to receive payments under subsection 2.7 or subsection3.6, it will, to the extent not inconsistent with the internal policies of suchLender or Issuing Lender and any applicable legal or regulatory restrictions,use reasonable efforts (i) to make, issue, fund or maintain theCommitments of such Lender or the affected Loans or Letters of Credit of suchLender or Issuing Lender through another lending or letter of credit office ofsuch Lender or Issuing Lender, or (ii) take such other measures as suchLender or Issuing Lender may deem reasonable, if as a result thereof thecircumstances which would cause such Lender to be an Affected Lender wouldcease to exist or the additional amounts which would otherwise be required tobe paid to such Lender or Issuing Lender pursuant to subsection  2.7 or subsection 3.6 would be materiallyreduced and if, as determined by such Lender or Issuing Lender in its solediscretion, the making, issuing, funding or maintaining of such Commitments orLoans or Letters of Credit through such other lending or letter of creditoffice or in accordance with such other measures, as the case may be, would nototherwise be disadvantageous to such Lender or Issuing Lender or materiallyadversely affect such Commitments or Loans or Letters of Credit or theinterests of such Lender or Issuing Lender; provided that such Lender orIssuing Lender will not be obligated to utilize such other lending or letter ofcredit office pursuant to this subsection 2.8 unless Borrower agrees to pay allincremental expenses incurred by such Lender or Issuing Lender as a result ofutilizing such other lending or letter of credit office as described in clause(i) above.  A certificate as to theamount of any such expenses payable by Borrower pursuant to this subsection 2.8(setting forth in reasonable detail the basis for requesting such amount)submitted by such Lender or Issuing Lender to Borrower (with a copy toAdministrative Agent) shall be conclusive absent manifest error.

 

**2.9         ****Replacement of Lenders**.

 

If Borrower receives a statement of amounts duepursuant to subsection 2.7 from a Lender, or a Lender becomes an Affected Lender(any such Lender, a “**Subject Lender**”),so long as (i) no Potential Event of Default or Event of Default shall haveoccurred and be continuing and Borrower has obtained a commitment from anotherLender or an Eligible Assignee to purchase at par the Subject Lender’s Loansand assume the Subject Lender’s Commitments and all other obligations of theSubject Lender hereunder; (ii) such Lender is not an Issuing Lender withrespect to any Letters of Credit outstanding (unless all such Letters of Creditare terminated or arrangements acceptable to such Issuing Lender (such as a“back-to-back” letter of credit) are made); and (iii) if applicable, theSubject Lender is unwilling to withdraw the notice delivered to Companypursuant to subsection 2.7, Borrower may require the Subject Lender to assignall of its Loans and Commitments to such other Lender, Lenders, EligibleAssignee or Eligible Assignees pursuant to the provisions of subsection 10.1B; providedthat, prior to or concurrently with such replacement, (1) the Subject Lendershall have received payment in full of all principal, interest, fees and otheramounts (including all amounts under subsections 2.6D and/or 2.7 (ifapplicable)) due and payable to it through such date of replacement and arelease from its obligations under the Loan Documents; (2) the processing feerequired to be paid by subsection 10.1B(i) shall have been paid toAdministrative Agent; and (3) all of the requirements for such assignmentcontained in subsection 10.1B, including, without limitation, the consent ofAdministrative Agent (if required) and the receipt by Administrative Agent ofan executed Assignment Agreement and other supporting documents, have beenfulfilled.

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**2.10        Extension of Term Loan and RevolvingLoan Commitment Termination Dates**.

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**A.            Term Loan Maturity Date.**  Borrower may, in its sole discretion andwithout the payment of any additional costs, expenses or fees to Lenders,extend the Term Loan Maturity Date, subject to satisfaction of the followingconditions and provided that no Event of Default or Potential Event ofDefault then exists:

 

(i)            On or prior to March 31, 2006,Borrower may elect to extend the Term Loan Maturity Date to August 29,2008 by providing Notice of Extension to the Administrative Agent; provided,that Borrower may not elect to exercise the extension option provided for inthis subsection 2.9A(i) unless Borrower has refinanced all of the thenoutstanding Senior 1996 Notes on terms and conditions acceptable to the Co-LeadArrangers; and

 

(ii)           Such notice of extension shall beaccompanied by an Officers’ Certificate certifying that the refinancingcontemplated by subparagraph (i) above has occurred.

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**B.            Revolving Loan Commitment TerminationDate. **Borrowermay, in its sole discretion and without the payment of any additional costs,expenses or fees to Lenders with respect to the exercise of such option toextend, extend the Revolving Loan Commitment Termination Date, subject tosatisfaction of the following conditions and provided that no Event ofDefault or Potential Event of Default then exists:

 

(i)            On or prior to March 31, 2006,Borrower may elect to extend the Revolving Loan Commitment Termination Date toAugust 29, 2007 by providing a Notice of Extension to the AdministrativeAgent; provided, that Borrower may not elect to exercise the extensionoption provided for in this subsection 2.9B(i) unless Borrower has refinancedall of the then outstanding Senior 1996 Notes on terms and conditionsacceptable to the Co-Lead Arrangers; and

 

(ii)           Such notice of extension shall beaccompanied by an Officers’ Certificate certifying that the refinancingcontemplated by subparagraph (i) above has occurred.

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**Section3.              LETTERS OF CREDIT**

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**3.1          Issuance of Letters of Credit andLenders’ Purchase of Participations Therein**.

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**A.    Lettersof Credit.** In addition to Borrower requesting that Lenders make Revolving Loanspursuant to subsection 2.1A(ii) and that Swing Line Lender make Swing LineLoans pursuant to subsection 2.1A(iii), Borrower may request, in accordancewith the provisions of this subsection 3.1, from time to time during the periodfrom the Closing Date to but excluding the 30th day prior to theRevolving Loan Commitment Termination Date, that one or more Lenders issueLetters of Credit for the account of Borrower for the purposes specified in thedefinition of Letters of Credit. Subject to the terms and conditions of this Agreement and in relianceupon the representations and warranties of Borrower herein set forth, any oneor more Lenders may, but (except as provided in subsection 3.1B(iii)) shall notbe obligated to, issue such Letters of Credit in accordance with the provisionsof this subsection 3.1; provided that Borrower shall not request thatany Lender issue (and no Lender shall issue):

 

(i)            anyLetter of Credit if, after giving effect to such issuance, the TotalUtilization of Revolving Loan Commitments would exceed the Revolving LoanCommitments then in effect;

 

(ii)           anyLetter of Credit if, after giving effect to such issuance, the Letter of CreditUsage would exceed $10,000,000;

 

(iii)          anyLetter of Credit having an expiration date later than the earlier of (a) 30days prior to the Revolving Loan Commitment Termination Date; and (b) thedate which is one year from the date of issuance of such Letter of Credit; providedthat the immediately preceding clause (b) shall not prevent any Issuing Lender(but subject to clause (a) above) from agreeing that a Letter of Credit willautomatically be extended for one or more successive periods not to exceed oneyear each unless such Issuing Lender elects not to extend for any suchadditional period; and provided, further that such Issuing Lendershall elect not to extend such Letter of Credit if it has knowledge that anEvent of Default or Potential Event of Default has occurred and is continuing(and has not been waived in accordance with subsection 10.6) at the time suchIssuing Lender must elect whether or not to allow such extension; and provided,further that the preceding clause (b) shall not prevent any IssuingLender (but subject to clause (a) above) from issuing a Letter of Credit infavor of Nintendo of America Inc. (or its designee) which Letter of Credit mayhave an expiration date of up to 18 months from the date of issuance of suchLetter of Credit.

 

(iv)          anyLetter of Credit denominated in a currency other than Dollars; or

 

(v)           anyLetter of Credit that is otherwise unacceptable to the applicable IssuingLender in its reasonable discretion acting in good faith (including if issuingsuch Letter of Credit would violate such Issuing Lender’s policies or generalcriteria for issuing the type of Letter of Credit).

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**B.            Mechanics of Issuance**.

 

(i)            Notice of Issuance.  Whenever Borrower desires the issuance of aLetter of Credit, it shall deliver to Administrative Agent a Notice of Issuanceof Letter of Credit substantially in the form of Exhibit VII annexedhereto no later than 12:00 Noon (New York City time) at least five BusinessDays, or in each case such shorter period as may be agreed to by the IssuingLender in any particular instance, in advance of the proposed date ofissuance.  The Notice of Issuance ofLetter of Credit shall specify (a) the proposed date of issuance (whichshall be a Business Day), (b) the face amount of the Letter of Credit,(c) the expiration date of the Letter of Credit, (d) the name andaddress of the beneficiary, and (e) either the verbatim text of theproposed Letter of Credit or the proposed terms and conditions thereof,including a precise description of any documents to be presented by thebeneficiary which, if presented by the beneficiary prior to the expiration dateof the Letter of Credit, would require the Issuing Lender to make payment underthe Letter of Credit; provided that the Issuing Lender, in itsreasonable discretion, may require changes in the text of the proposed Letterof Credit or any such documents; and provided, further that noLetter of Credit shall require payment against a conforming draft to be madethereunder on the same Business Day (under the laws of the jurisdiction inwhich the office of the Issuing Lender to which such draft is required to bepresented is located) that such draft is presented if such presentation is madeafter 12:00 Noon (in the time zone of such office of the Issuing Lender) onsuch Business Day.

 

(ii)           Update of Certifications.  Borrower shall notify the applicable IssuingLender (and Administrative Agent, if Administrative Agent is not such IssuingLender) prior to the issuance of any Letter of Credit if any of the matters towhich Borrower is required to certify in the applicable Notice of Issuance ofLetter of Credit is no longer true and correct as of the proposed date ofissuance of such Letter of Credit, and upon the issuance of any Letter ofCredit Borrower shall be deemed to have re-certified, as of the date of suchissuance, as to the matters to which Borrower is required to certify in theapplicable Notice of Issuance of Letter of Credit.

 

(iii)          Determinationof Issuing Lender.  Upon receipt byAdministrative Agent of a Notice of Issuance of Letter of Credit pursuant tosubsection 3.1B(i) requesting the issuance of a Letter of Credit, ifAdministrative Agent elects to issue such Letter of Credit, AdministrativeAgent shall promptly so notify Borrower, and Administrative Agent shall be theIssuing Lender with respect thereto.  IfAdministrative Agent, in its sole discretion, elects not to issue such Letterof Credit, Administrative Agent shall promptly so notify Borrower, whereuponBorrower may request any other Lender to issue such Letter of Credit bydelivering to such Lender a copy of the applicable Notice of Issuance of Letterof Credit.  Any Lender so requested toissue such Letter of Credit shall promptly notify Borrower and AdministrativeAgent whether or not, in its sole discretion, it has elected to issue suchLetter of Credit, and any such Lender that elects to issue such Letter ofCredit shall be the Issuing Lender with respect thereto.  If all other Lenders have declined to issuesuch Letter of Credit, notwithstanding the prior election of AdministrativeAgent not to issue such Letter of Credit, Administrative Agent shall, subjectto the other provisions of this Agreement (including subsections 3.1A, 3.1B andSection 4), issue such Letter of Credit and shall be the Issuing Lender withrespect thereto, notwithstanding the fact that the Letter of Credit Usage withrespect to such Letter of Credit and with respect to all other Letters ofCredit issued by Administrative Agent, when aggregated with AdministrativeAgent’s outstanding Revolving Loans and Swing Line Loans, may exceedAdministrative Agent’s Revolving Loan Commitment then in effect.

 

(iv)          Issuanceof Letter of Credit.  Uponsatisfaction or waiver (in accordance with subsection 10.6) of the conditionsset forth in subsection 4.3, the Issuing Lender shall issue the requestedLetter of Credit in accordance with the Issuing Lender’s standard operatingprocedures.

 

(v)           Notificationto Lenders.  Upon the issuance of oramendment to any Letter of Credit the applicable Issuing Lender shall promptlynotify Administrative Agent of such issuance or amendment in writing and suchnotice shall be accompanied by a copy of such Letter of Credit oramendment.  Promptly after receipt ofnotice of any issuance of a Letter of Credit (or, if Administrative Agent isthe Issuing Lender, together with such notice), Administrative Agent shallnotify each Lender of the amount of such Lender’s respective participation insuch Letter of Credit, determined in accordance with subsection 3.1C.

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**C.            Lenders’Purchase of Participations in Letters of Credit**.  Immediately upon the issuance of each Letterof Credit, each Revolving Lender shall be deemed to, and hereby agrees to, haveirrevocably purchased from the Issuing Lender a participation in such Letter ofCredit and any drawings honored thereunder in an amount equal to such RevolvingLender’s Pro Rata Share of the maximum amount which is or at any time maybecome available to be drawn thereunder.

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**3.2          Letterof Credit Fees**.

 

Borroweragrees to pay the following amounts with respect to Letters of Credit issuedhereunder:

 

(i)            withrespect to each Letter of Credit, (a) a fronting fee, payable directly tothe applicable Issuing Lender for its own account, equal to 0.25% per annum ofthe daily amount available to be drawn under such Letter of Credit, and(b) a letter of credit fee, payable to Administrative Agent for theaccount of Revolving Lenders, equal to the Applicable LIBOR Margin forRevolving Loans multiplied by the daily amount available to be drawn under suchLetter of Credit, each such fronting fee or letter of credit fee to be payablein arrears on the last Business Day of each March, June, September and Decemberof each Fiscal Year commencing on the first such date to occur after theClosing Date, and computed on the basis of a 360-day year for the actual numberof days elapsed; and

 

(ii)           withrespect to the issuance, amendment or transfer of each Letter of Credit andeach payment of a drawing made thereunder (without duplication of the feespayable under clause (i) above), documentary and processing charges payabledirectly to the applicable Issuing Lender for its own account in accordancewith such Issuing Lender’s standard schedule for such charges in effect at thetime of such issuance, amendment, transfer or payment, as the case may be.

 

For purposes of calculating any fees payable underclauses (i) and (ii) of this subsection 3.2, the daily amount available to bedrawn under any Letter of Credit shall be determined as of the close ofbusiness on any date of determination. Promptly upon receipt by Administrative Agent of any amount described inclause (i) or (ii) of this subsection 3.2, Administrative Agent shalldistribute to each Revolving Lender its Pro Rata Share of such amount.

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**3.3          Drawings and Reimbursement ofAmounts Paid Under Letters of Credit**.

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**A.            Responsibility of Issuing LenderWith Respect to Drawings**.  In determining whether tohonor any drawing under any Letter of Credit by the beneficiary thereof, theIssuing Lender shall be responsible only to examine the documents deliveredunder such Letter of Credit with reasonable care so as to ascertain whetherthey appear on their face to be in accordance with the terms and conditions ofsuch Letter of Credit.

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**B.            Reimbursementby Borrower of Amounts Paid Under Letters of Credit**.  If an Issuing Lender has determined to honora drawing under a Letter of Credit issued by it, such Issuing Lender shallimmediately notify Borrower and Administrative Agent, and Borrower shallreimburse such Issuing Lender on or before the Business Day immediatelyfollowing the date on which such drawing is honored (the “**Reimbursement Date**”) in anamount in Dollars and in same day funds equal to the amount of such honoreddrawing (plus interest thereon (as provided in subsection 3.3D(i) for theperiod from the date of drawing to the date on which such Revolving Loans aremade (the “**LC Reimbursement Amount**”));provided that, anything contained in this Agreement to the contrarynotwithstanding, (i) unless Borrower shall have notified Administrative Agentand such Issuing Lender prior to 12:00 Noon (New York City time) on the datesuch drawing is honored that Borrower intends to reimburse such Issuing Lenderfor the LC Reimbursement Amount with funds other than the proceeds of RevolvingLoans, Borrower shall be deemed to have given a timely Notice of Borrowing toAdministrative Agent requesting Lenders to make Revolving Loans that are BaseRate Loans on the Reimbursement Date in an amount in Dollars equal to the LC ReimbursementAmount (and Administrative Agent shall promptly give notice thereof to eachLender) and (ii) subject to satisfaction or waiver of the conditions specifiedin subsection 4.2B, Lenders shall, on or before the Business Day immediatelyfollowing the Reimbursement Date, make Revolving Loans that are Base Rate Loansin the LC Reimbursement Amount), the proceeds of which shall be applieddirectly by Administrative Agent to reimburse such Issuing Lender in an amountequal to the LC Reimbursement Amount; and provided, further thatif for any reason proceeds of Revolving Loans are not received by such IssuingLender on or before the Business Day immediately following the ReimbursementDate in an amount equal to the LC Reimbursement Amount), Borrower shall reimbursesuch Issuing Lender, on demand, in an amount in same day funds equal to theexcess of (x) the LC Reimbursement Amount) over (y) the aggregate amount ofsuch Revolving Loans, if any, which are so received.  Nothing in this subsection 3.3B shall be deemed to relieve anyLender from its obligation to make Revolving Loans on the terms and conditionsset forth in this Agreement, and Borrower shall retain any and all rights itmay have against any Lender resulting from the failure of such Lender to make suchRevolving Loans under this subsection 3.3B.  The IssuingLender may honor or dishonor any drawing in accordance with the terms of theLetter of Credit without regard to any instruction of Borrower.

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**C.            Payment by Lenders of UnreimbursedAmounts Paid Under Letters of Credit**.

 

(i)            Paymentby Lenders.  If Borrower shall failfor any reason to reimburse any Issuing Lender as provided in subsection 3.3Bin an amount equal to the amount of any drawing honored by such Issuing Lenderunder a Letter of Credit issued by it, such Issuing Lender shall promptlynotify each Revolving Lender of the unreimbursed amount of such honored drawingand of such Revolving Lender’s respective participation therein based on suchRevolving Lender’s Pro Rata Share of the Revolving Loan Commitment.  Each Revolving Lender with a Revolving LoanCommitment shall make available to such Issuing Lender an amount equal to itsrespective participation, in Dollars and in same day funds, at the office ofsuch Issuing Lender specified in such notice, not later than 12:00 Noon (NewYork City time) on the first Business Day (under the laws of the jurisdictionin which such office of such Issuing Lender is located) after the date notifiedby such Issuing Lender.  If anyRevolving Lender fails to make available to such Issuing Lender on suchBusiness Day the amount of such Revolving Lender’s participation in such Letterof Credit as provided in this subsection 3.3C, such Issuing Lender shall beentitled to recover such amount on demand from such Lender together withinterest thereon at the rate customarily used by such Issuing Lender for thecorrection of errors among banks for three Business Days and thereafter at theBase Rate.  Nothing in this subsection3.3C shall be deemed to prejudice the right of any Lender to recover from anyIssuing Lender any amounts made available by such Lender to such Issuing Lenderpursuant to this subsection 3.3C if it is determined by the final judgment of acourt of competent jurisdiction that the payment with respect to a Letter ofCredit by such Issuing Lender in respect of which payment was made by suchLender constituted gross negligence or willful misconduct on the part of suchIssuing Lender.

 

(ii)           Distributionto Lenders of Reimbursements Received From Borrower.  If any Issuing Lender shall have beenreimbursed by Revolving Lenders pursuant to subsection 3.3C(i) for all or anyportion of any drawing honored by such Issuing Lender under a Letter of Creditissued by it, such Issuing Lender shall promptly distribute to each otherRevolving Lender that has paid all amounts payable by it under subsection3.3C(i) with respect to such honored drawing such other Revolving Lender’s ProRata Share of all payments subsequently received by such Issuing Lender fromBorrower in reimbursement of such honored drawing when such payments arereceived.  Any such distribution shallbe made to a Revolving Lender at its primary address set forth below its nameon the appropriate signature page hereof or at such other address as such RevolvingLender may request.

 

**D.            Intereston Amounts Paid Under Letters of Credit**.

 

(i)            Payment of Interest by Borrower.  Borrower agrees to pay to each IssuingLender, with respect to drawings honored under any Letters of Credit issued byit, interest on the amount paid by such Issuing Lender in respect of each suchhonored drawing from the date a drawing is honored to but excluding the datesuch amount is reimbursed by Borrower (including any such reimbursement out ofthe proceeds of Revolving Loans pursuant to subsection 3.3B) at a rate equal to(a) for the period from the date such drawing is honored to but excluding theReimbursement Date, the rate then in effect under this Agreement with respectto Revolving Loans that are Base Rate Loans and (b) thereafter, a ratewhich is 2.00% per annum in excess of the rate of interest otherwise payableunder this Agreement with respect to Revolving Loans that are Base RateLoans.  Interest payable pursuant tothis subsection 3.3D(i) shall be computed on the basis of a 365-day or 366-dayyear, as the case may be, for the actual number of days elapsed in the periodduring which it accrues and shall be payable on demand or, if no demand ismade, on the date on which the related drawing under a Letter of Credit isreimbursed in full.

 

(ii)           Distributionof Interest Payments by Issuing Lender. Promptly upon receipt by any Issuing Lender of any payment of interestpursuant to subsection 3.3D(i) with respect to a drawing honored under a Letterof Credit issued by it, (a) such Issuing Lender shall distribute to eachother Revolving Lender, out of the interest received by such Issuing Lender inrespect of the period from the date such drawing is honored to but excludingthe date on which such Issuing Lender is reimbursed for the amount of suchhonored drawing (including any such reimbursement out of the proceeds ofRevolving Loans pursuant to subsection 3.3B), the amount that such RevolvingLender would have been entitled to receive in respect of the letter of creditfee that would have been payable in respect of such Letter of Credit for suchperiod pursuant to subsection 3.2 if no drawing had been honored under suchLetter of Credit, and (b) if such Issuing Lender shall have beenreimbursed by Revolving Lenders pursuant to subsection 3.3C(i) for all or anyportion of such honored drawing, such Issuing Lender shall distribute to eachother Revolving Lender that has paid all amounts payable by it under subsection3.3C(i) with respect to such honored drawing such other Revolving Lender’s ProRata Share of the Revolving Loan Commitment any interest received by suchIssuing Lender in respect of that portion of such honored drawing so reimbursedby Revolving Lenders for the period from the date on which such Issuing Lenderwas so reimbursed by Revolving Lenders to but excluding the date on which suchportion of such honored drawing is reimbursed by Borrower.  Any such distribution shall be made to aRevolving Lender at its primary address set forth below its name on theappropriate signature page hereof or at such other address as such RevolvingLender may request.

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**3.4          Obligations Absolute.**

 

The obligation ofBorrower to reimburse each Issuing Lender for drawings honored under theLetters of Credit issued by it and to repay any Revolving Loans made byRevolving Lenders pursuant to subsection 3.3B and the obligations of RevolvingLenders under subsection 3.3C(i) shall be unconditional and irrevocable andshall be paid strictly in accordance with the terms of this Agreement under allcircumstances including any of the following circumstances:

 

(i)            anylack of validity or enforceability of any Letter of Credit;

 

(ii)           theexistence of any claim, set-off, defense or other right which Borrower or anyLender may have at any time against a beneficiary or any transferee of anyLetter of Credit (or any Persons for whom any such transferee may be acting),any Issuing Lender or other Lender or any other Person or, in the case of aLender, against Borrower, whether in connection with this Agreement, thetransactions contemplated herein or any unrelated transaction (including anyunderlying transaction between Borrower or one of its Subsidiaries and thebeneficiary for which any Letter of Credit was procured);

 

(iii)          anydraft or other document presented under any Letter of Credit proving to beforged, fraudulent, invalid or insufficient in any respect or any statementtherein being untrue or inaccurate in any respect;

 

(iv)          paymentby the applicable Issuing Lender under any Letter of Credit against presentationof a draft or other document which does not substantially comply with the termsof such Letter of Credit;

 

(v)           anyadverse change in the business, operations, properties, assets, condition(financial or otherwise) or prospects of Borrower or any of its Subsidiaries;

 

(vi)          anybreach of this Agreement or any other Loan Document by any party thereto;

 

(vii)         anyother circumstance or happening whatsoever, whether or not similar to any ofthe foregoing; or

 

(viii)        thefact that an Event of Default or a Potential Event of Default shall haveoccurred and be continuing;

 

provided, in each case, that payment by theapplicable Issuing Lender under the applicable Letter of Credit shall not haveconstituted gross negligence or willful misconduct of such Issuing Lender underthe circumstances in question (as determined by a final judgment of a court ofcompetent jurisdiction).

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**3.5          Indemnification; Nature of IssuingLenders’ Duties**.

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**A.            Indemnification.**  In addition to amounts payable as providedin subsection 3.6, Borrower hereby agrees to protect, indemnify, pay and saveharmless each Issuing Lender and each other Lender from and against any and allclaims, demands, liabilities, damages, losses, costs, charges and expenses(including reasonable fees, expenses and disbursements of outside counsel andallocated costs of internal counsel) which such Issuing Lender and each otherLender may incur or be subject to as a consequence, direct or indirect, of(i) the issuance of any Letter of Credit by such Issuing Lender, otherthan as a result of (a) the gross negligence or willful misconduct of suchIssuing Lender as determined by a final judgment of a court of competentjurisdiction or (b) subject to the following clause (ii), the wrongful dishonorby such Issuing Lender of a proper demand for payment made under any Letter ofCredit issued by it or (ii) the failure of such Issuing Lender to honor adrawing under any such Letter of Credit as a result of any act or omission,whether rightful or wrongful, of any present or future de jure or de factoGovernment Authority (all such acts or omissions herein called “**Governmental Acts**”).

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**B.            Natureof Issuing Lenders’ Duties.**  As between Borrower and any Issuing Lender,Borrower assumes all risks of the acts and omissions of, or misuse of theLetters of Credit issued by such Issuing Lender by, the respectivebeneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, such IssuingLender shall not be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or legaleffect of any document submitted by any party in connection with theapplication for and issuance of any such Letter of Credit, even if it should infact prove to be in any or all respects invalid, insufficient, inaccurate,fraudulent or forged; (ii) the validity or sufficiency of any instrumenttransferring or assigning or purporting to transfer or assign any such Letterof Credit or the rights or benefits thereunder or proceeds thereof, in whole orin part, which may prove to be invalid or ineffective for any reason;(iii) failure of the beneficiary of any such Letter of Credit to complyfully with any conditions required in order to draw upon such Letter of Credit;(iv) errors, omissions, interruptions or delays in transmission ordelivery of any messages, by mail, cable, telegraph, telex or otherwise,whether or not they be in cipher; (v) errors in interpretation oftechnical terms; (vi) any loss or delay in the transmission or otherwise of anydocument required in order to make a drawing under any such Letter of Credit orof the proceeds thereof; (vii) the misapplication by the beneficiary of anysuch Letter of Credit of the proceeds of any drawing under such Letter ofCredit; or (viii) any consequences arising from causes beyond the control ofsuch Issuing Lender, including any Governmental Acts, and none of the aboveshall affect or impair, or prevent the vesting of, any of such Issuing Lender’sor any other Lender’s rights or powers hereunder.

 

In furtherance andextension and not in limitation of the specific provisions set forth in thefirst paragraph of this subsection 3.5B, any action taken or omitted by anyIssuing Lender under or in connection with the Letters of Credit issued by itor any documents and certificates delivered thereunder, if taken or omitted ingood faith, shall not put such Issuing Lender or any other Lender under anyresulting liability to Borrower.

 

Notwithstandinganything to the contrary contained in this subsection 3.5, Borrower shall retainany and all rights it may have against any Issuing Lender for any liabilityarising solely out of the gross negligence or willful misconduct of suchIssuing Lender, as determined by a final judgment of a court of competentjurisdiction.

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**3.6          Increased Costs and Taxes Relating to Letters of Credit**.

 

Subject to theprovisions of subsection 2.7B (which shall be controlling with respect to thematters covered thereby), if any Issuing Lender or Lender shall determine(which determination shall, absent manifest error, be final and conclusive andbinding upon all parties hereto) that any law, treaty or governmental rule,regulation or order, or any change therein or in the interpretation,administration or application thereof (including the introduction of any newlaw, treaty or governmental rule, regulation or order), or any determination ofa court or governmental authority, in each case that becomes effective afterthe date hereof, or compliance by any Issuing Lender or Lender with anyguideline, request or directive issued or made after the date hereof by anycentral bank or other governmental or quasi-governmental authority (whether ornot having the force of law):

 

(i)            subjectssuch Issuing Lender or Lender (or its applicable lending or letter of credit office)to any additional Tax (other than any Tax on the overall net income of suchIssuing Lender or Lender) with respect to the issuing or maintaining of anyLetters of Credit or the purchasing or maintaining of any participationstherein or any other obligations under this Section 3, whether directly or bysuch being imposed on or suffered by any particular Issuing Lender;

 

(ii)           imposes,modifies or holds applicable any reserve (including any marginal, emergency,supplemental, special or other reserve), special deposit, compulsory loan, FDICinsurance or similar requirement in respect of any Letters of Credit issued byany Issuing Lender or participations therein purchased by any Lender; or

 

(iii)          imposesany other condition (other than with respect to a Tax matter) on or affectingsuch Issuing Lender or Lender (or its applicable lending or letter of creditoffice) regarding this Section 3 or any Letter of Credit or any participationtherein;

 

and the result ofany of the foregoing is to increase the cost to such Issuing Lender or Lenderof agreeing to issue, issuing or maintaining any Letter of Credit or agreeingto purchase, purchasing or maintaining any participation therein or to reduceany amount received or receivable by such Issuing Lender or Lender (or itsapplicable lending or letter of credit office) with respect thereto; then, inany case, Borrower shall promptly pay to such Issuing Lender or Lender, uponreceipt of the statement referred to in the next sentence, such additionalamount or amounts as may be necessary to compensate such Issuing Lender orLender for any such increased cost or reduction in amounts received orreceivable hereunder.  Such IssuingLender or Lender shall deliver to Borrower a written statement, setting forthin reasonable detail the basis for calculating the additional amounts owed tosuch Issuing Lender or Lender under this subsection 3.6, which statement shallbe conclusive and binding upon all parties hereto absent manifest error.

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**Section4.              CONDITIONS TO LOANS ANDLETTERS OF CREDIT**

 

The obligations ofLenders to make Loans and the issuance of Letters of Credit hereunder aresubject to the satisfaction of the following conditions.

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**4.1          Conditions to Term Loans and InitialRevolving Loans and Swing Line Loans**.

 

The obligations ofLenders to make the Term Loans and any Revolving Loans and Swing Line Loans tobe made on the Closing Date are, in addition to the conditions precedentspecified in subsection 4.2, subject to prior or concurrent satisfaction of thefollowing conditions:

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**A.            Loan Party Documents**. On or before the Closing Date, Borrower shall, and shall cause eachother Loan Party to, deliver to Lenders (or to Administrative Agent withsufficient originally executed copies, where appropriate, for each Lender) thefollowing with respect to Borrower or such Loan Party, as the case may be,each, unless otherwise noted, dated the Closing Date:

 

(i)            Copiesof the Organizational Documents of such Person, certified by the Secretary ofState of its jurisdiction of organization or, if such document is of a typethat may not be so certified, certified by the secretary or similar officer ofthe applicable Loan Party, together with a good standing certificate from theSecretary of State of its jurisdiction of organization and each other state inwhich such Person is qualified to do business (or, in the case of Borrower,each of the following states:  Delaware,South Dakota, New York, Florida, California, Illinois, Nevada, Hawaii, Texas,Georgia, New Jersey, Arizona, Washington, Colorado and Louisiana) and, to theextent generally available, a certificate or other evidence of good standing asto payment of any applicable franchise or similar taxes from the appropriatetaxing authority of each of such jurisdictions, each dated a recent date priorto the Closing Date;

 

(ii)           Resolutionsof the Governing Body of such Person approving and authorizing the execution,delivery and performance of the Loan Documents to which it is a party,certified as of the Closing Date by the secretary or similar Officer of suchPerson as being in full force and effect without modification or amendment;

 

(iii)          Signatureand incumbency certificates of the Officers of such Person executing the LoanDocuments to which it is a party;

 

(iv)          Executedoriginals of the Loan Documents to which such Person is a party; and

 

(v)           Suchother documents as Administrative Agent may reasonably request.

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**B.            No Material Adverse Effect**.  SinceDecember 31, 2000, no Material Adverse Effect (in the reasonable opinion ofAdministrative Agent) shall have occurred.

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**C.            Fees**.  Borrowershall have paid to Administrative Agent, for distribution (as appropriate) toAdministrative Agent and Lenders, the fees payable on the Closing Date referredto in subsection 2.3.

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**D.            Corporate and Capital Structure, and Ownership**.

 

(i)            CorporateStructure.  The corporateorganizational structure of Borrower and its Subsidiaries shall be as set forthon Schedule 4.1D annexed hereto.

 

(ii)           CapitalStructure and Ownership.  Thecapital structure and ownership of Borrower and its Subsidiaries shall be asset forth on Schedule 4.1D annexed hereto.

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**E.             Representationsand Warranties; Performance of Agreements**.  Borrower shall have delivered toAdministrative Agent an Officers’ Certificate, in form and substancesatisfactory to Administrative Agent, to the effect that the representationsand warranties in Section 5 are true, correct and complete in all materialrespects on and as of the Closing Date to the same extent as though made on andas of that date (or, to the extent such representations and warrantiesspecifically relate to an earlier date, that such representations andwarranties were true, correct and complete in all material respects on and asof such earlier date) and that Borrower shall have performed in all materialrespects all agreements and satisfied all conditions that this Agreementprovides shall be performed or satisfied by it on or before the Closing Dateexcept as otherwise disclosed to and agreed to in writing by AdministrativeAgent; provided that where a representation and warranty, covenant orcondition is qualified as to materiality, such materiality qualifier shall bedisregarded for purposes of this condition.

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**F.             Financial Statements**. On or before the Closing Date, Lenders shall have received from Borroweraudited and unaudited financial statements of Borrower and its Subsidiaries asset forth in Schedule 4.1F.

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**G.            Opinions of Counsel to Loan Parties**. Lenders shall have received originally executed copies of (i) one ormore favorable written opinions of Pillsbury Winthrop LLP, counsel for LoanParties, dated as of the Closing Date, in the form set forth in Exhibit XV-Aannexed hereto; and (ii) one or more favorable written opinions of Daniel P.Johnson, Esq., general counsel of Borrower, dated as of the Closing Date, inthe form set forth in Exhibit XV-B annexed hereto.

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**H.            Opinions of Administrative Agent’sCounsel**.  Lenders shall have received originallyexecuted copies of one or more favorable written opinions of O’Melveny &Myers LLP, counsel to Administrative Agent, dated as of the Closing Date,substantially in the form of Exhibit XVI annexed hereto.

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**I.              Solvency Assurances**. On the Closing Date, Administrative Agent and Lenders shall havereceived an Officers’ Certificate of Borrower dated the Closing Date,substantially in the form of Exhibit XVII annexed hereto and withappropriate attachments, in each case demonstrating that, after giving effectto the consummation of the transactions contemplated by the Loan Documents,Borrower and the Subsidiary Guarantors, taken as a whole, will be Solvent.

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**J.             Evidence of Insurance.** Administrative Agent shall have received a certificate from Borrower’sinsurance broker or other evidence satisfactory to it that all insurancerequired to be maintained pursuant to subsection 6.4 is in full force andeffect and that Administrative Agent on behalf of Lenders has been named asadditional insured and/or loss payee thereunder to the extent required undersubsection 6.4.

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**K.            NecessaryGovernmental Authorizations and Consents; Expiration of Waiting Periods, Etc.**  Borrower shall have obtainedall Governmental Authorizations and all consents of other Persons, in eachcase that are necessary or advisable in connection with the transactionscontemplated by the Loan Documents and the continued operation of the businessconducted by Borrower and its Subsidiaries in substantially the same manner asconducted prior to the Closing Date. Each such Governmental Authorization or consent shall be in full forceand effect, except in a case where the failure to obtain or maintain aGovernmental Authorization or consent, either individually or in the aggregate,could not reasonably be expected to result in a Material Adverse Effect.  All applicable waiting periods shall haveexpired without any action being taken or threatened by any competent authoritythat would restrain, prevent or otherwise impose adverse conditions on thetransactions contemplated by the Loan Documents or the financing thereof.  No action, request for stay, petition forreview or rehearing, reconsideration, or appeal with respect to any of theforegoing shall be pending, and the time for any applicable GovernmentAuthority to take action to set aside its consent on its own motion shall haveexpired.

 

**L.            EnvironmentalReports**. Administrative Agent shall have received reports and other information,in form, scope and substance satisfactory to Administrative Agent, regardingenvironmental matters relating to Borrower and its Subsidiaries and the ClosingDate Mortgaged Property, which reports shall include a draft of a Phase Ienvironmental assessment for the Closing Date Mortgaged Property which (i)conforms to the ASTM Standard Practice for Environmental Site Assessments:Phase I Environmental Site Assessment Process, E 1527; (ii) was conducted nomore than six months prior to the Closing Date by one or more environmentalconsulting firms reasonably satisfactory to Administrative Agent; (iii)includes an assessment of asbestos-containing materials at such Closing DateMortgaged Property; and (iv) includes an estimate of the reasonable worst-casecost of investigating and remediating any Hazardous Materials Activityidentified in such Phase I environmental assessments as giving rise to anactual or potential violation of any Environmental Law or as presenting amaterial risk of giving rise to a material Environmental Claim.

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**M.           SecurityInterests in Personal and Mixed Property.**  To the extent not otherwise satisfiedpursuant to subsection 4.1N, Administrative Agent shall have received evidencesatisfactory to it that Borrower and Subsidiary Guarantors shall have taken orcaused to be taken all such actions, executed and delivered or caused to beexecuted and delivered all such agreements, documents and instruments, and madeor caused to be made all such filings and recordings (other than the filing orrecording of items described in clauses (iii), (iv), (v) and (vi) below) thatmay be necessary or, in the reasonable opinion of Administrative Agent, desirablein order to create in favor of Administrative Agent, for the benefit ofLenders, a valid and (upon such filing and recording) perfected First PriorityLien except for existing Liens in the entire personal and mixed propertyCollateral, subject, in the case of Deposit Accounts, to the principal balancethreshold set forth in subsection 4.1M(vii). Such actions shall include the following:

 

(i)            Schedulesto Collateral Documents.  Deliveryto Administrative Agent of accurate and complete schedules to all of theapplicable Collateral Documents.

 

(ii)           StockCertificates and Instruments. Delivery to Administrative Agent of (a) certificates (which certificatesshall be accompanied by irrevocable undated stock powers, duly endorsed inblank and otherwise satisfactory in form and substance to Administrative Agent)representing all Capital Stock pledged pursuant to the Security Agreement (itbeing acknowledged and agreed that Borrower shall not be required to deliverstock certificates with respect to AmNet except as may be required after theClosing Date in accordance with subsection 6.8); and (b) all promissory notes or other instruments (duly endorsed,where appropriate, in a manner satisfactory to Administrative Agent) evidencingany Collateral.

 

(iii)          Lien Searches and UCC TerminationStatements.  Delivery toAdministrative Agent of (a) the results of a recent search, by a Personsatisfactory to Administrative Agent, of all effective UCC financing statementsand fixture filings and all judgment and tax lien filings which may have beenmade with respect to any personal or mixed property of any Loan Party, togetherwith copies of all such filings disclosed by such search, and (b) UCCtermination statements duly executed by all applicable Persons for filing in allapplicable jurisdictions as may be necessary to terminate any effective UCCfinancing statements or fixture filings disclosed in such search (other thanany such financing statements or fixture filings in respect of Liens permittedto remain outstanding pursuant to the terms of this Agreement).

 

(iv)          UCC Financing Statements andFixture Filings.  Delivery toAdministrative Agent of UCC financing statements and, where appropriate,fixture filings, duly executed by each applicable Loan Party with respect to allpersonal and mixed property Collateral of such Loan Party, for filing in alljurisdictions as may be necessary or, in the opinion of Administrative Agent,desirable to perfect the security interests created in such Collateralpursuant to the Collateral Documents.

 

(v)           PTO Cover Sheets, Etc.  Delivery to Administrative Agent of allcover sheets or other documents or instruments required to be filed with thePTO in order to create or perfect Liens in respect of any registered IPCollateral.

 

(vi)          Copyright Mortgages.  Delivery to Administrative Agent ofCopyright Mortgages or other documents or instruments required to be filed withthe Copyright Office in order to create or perfect Liens in respect of anyregistered IP Collateral.

 

(vii)         Deposit Account Bank ControlAgreements.  Delivery toAdministrative Agent of control agreements as required under subsection 6.11with each of the financial institutions with which Borrower or any of itsSubsidiaries maintains a Deposit Account with a principal balance in excess of$2,500,000 sufficient to perfect the security interests created in suchCollateral pursuant to the Collateral Documents.

** **

**N.            ClosingDate Mortgage; Closing Date Mortgage Policy; Etc.**  Administrative Agent shall have receivedfrom Borrower and each applicable Subsidiary Guarantor:

 

(i)            ClosingDate Mortgage.  A fully executed andnotarized Mortgage (“**Closing Date Mortgage**”), in proper form forrecording in the appropriate place in the applicable jurisdiction, encumberingthe Real Property Asset listed in Schedule 4.1N annexed hereto (the“**ClosingDate Mortgaged Property**”);

 

(ii)           TitleInsurance.  (a) Form 1970 ALTAmortgagee title insurance policies or unconditional commitments therefor (the “**Closing DateMortgage Policy**”) issued by the Title Company with respect to theClosing Date Mortgaged Property, in amounts not less than the respectiveamounts designated therein with respect to the Closing Date Mortgaged Property,insuring fee simple title to, or a valid leasehold interest in, the Closing DateMortgaged Property vested in such Loan Party and assuring Administrative Agentthat the Closing Date Mortgage creates valid and enforceable First Prioritymortgage Lien on the Closing Date Mortgaged Property encumbered thereby, whichClosing Date Mortgage Policy (1) shall include the following endorsements tothe extent available in the state where the Closing Date Mortgaged Property islocated: comprehensive, mechanics’ lien, variable rate, street address,separate tax lot, survey, contiguity, zoning (ALTA 3.1), street access, usury,subdivision map act, revolving credit, tie-in, creditors’ rights, doingbusiness, first loss and last dollar and any other matters reasonably requestedby Administrative Agent and (2) shall provide for affirmative insurance andsuch reinsurance as Administrative Agent may reasonably request, all of theforegoing in form and substance reasonably satisfactory to AdministrativeAgent; and (b) evidence satisfactory to Administrative Agent that such LoanParty has (i) delivered to the Title Company all certificates and affidavitsrequired by the Title Company in connection with the issuance of the ClosingDate Mortgage Policy and (ii) paid to the Title Company or to the appropriategovernmental authorities all expenses and premiums of the Title Company inconnection with the issuance of the Closing Date Mortgage Policy and allrecording and stamp taxes (including mortgage recording and intangible taxes)payable in connection with recording the Closing Date Mortgage in theappropriate real estate records;

 

(iii)          Title Report.  With respect to the Closing Date MortgagedProperty, a title report issued by the Title Company with respect thereto,dated not more than 30 days prior to the Closing Date and satisfactory in formand substance to Administrative Agent;

 

(iv)          Copiesof Documents Relating to Title Exceptions. Copies of all recorded documents listed as exceptions to title orotherwise referred to in the Closing Date Mortgage Policy or in the titlereports delivered pursuant to subsection 4.1N(iii);

 

(v)           MattersRelating to Flood Hazard Properties. (a) Evidence, which may be in the form of a letter from an insurancebroker or a municipal engineer, as to whether (1) the Closing DateMortgaged Property is a Flood Hazard Property and (2) the community inwhich any such Flood Hazard Property is located is participating in theNational Flood Insurance Program, (b) if there is a Flood Hazard Property, suchLoan Party’s written acknowledgement of receipt of written notification from AdministrativeAgent (1) as to the existence of such Flood Hazard Property and(2) as to whether the community in which such Flood Hazard Property islocated is participating in the National Flood Insurance Program, and (c) ifsuch Flood Hazard Property is located in a community that participates in theNational Flood Insurance Program, evidence that Borrower has obtained floodinsurance in respect of such Flood Hazard Property to the extent required underthe applicable regulations of the Board of Governors of the Federal ReserveSystem; and

 

(vi)          EnvironmentalIndemnity.  An environmentalindemnity agreement, satisfactory in form and substance to Administrative Agentand its counsel, with respect to the indemnification of Administrative Agentand Lenders for any liabilities that may be imposed on or incurred by any ofthem as a result of any Hazardous Materials Activity.

** **

**O.            MattersRelating to Existing Indebtedness of Borrower and its Subsidiaries**. On the Closing Date, Borrower and its Subsidiaries shall have (i) repaidin full all Indebtedness outstanding under the Existing Credit Agreement (theaggregate principal amount of which Indebtedness shall not exceed$130,000,000); (ii) terminated any commitments to lend or make otherextensions of credit thereunder; (iii) delivered to Administrative Agentall documents or instruments necessary to release all Liens securingIndebtedness or other obligations of Borrower and its Subsidiaries thereunder;and (iv) made arrangements satisfactory to Administrative Agent with respect tothe cancellation of any letters of credit outstanding thereunder or theissuance of Letters of Credit to support the obligations of Borrower and itsSubsidiaries with respect thereto.

** **

**P.            Completion of Proceedings**. All corporate and other proceedings taken or to be taken in connectionwith the transactions contemplated hereby and all documents incidental theretonot previously found acceptable by Administrative Agent, acting on behalf ofLenders, and its counsel shall be satisfactory in form and substance toAdministrative Agent and such counsel, and Administrative Agent and suchcounsel shall have received all such counterpart originals or certified copiesof such documents as Administrative Agent may reasonably request.

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**Q.            Maximum Consolidated Senior Secured Leverage Ratio; Maximum ConsolidatedTotal Leverage Ratio and Minimum Guest Pay-Rooms.** On the Closing Date, Administrative Agent shall have received anOfficers’ Certificate executed by the chief financial officer of Borrower,dated the Closing Date, with appropriate attachments, demonstrating that, aftergiving effect to the consummation transactions contemplated by this Agreement,(i) the Consolidated Senior Secured Leverage Ratio does not exceed 2.25:1.00;(ii) the Consolidated Total Leverage Ratio does not exceed 4.75:1.00; and (iii)the number of Guest Pay-Rooms is not less than 700,000.

** **

**4.2          Conditionsto All Loans**.

 

The obligations ofLenders to make Loans on each Funding Date are subject to the following furtherconditions precedent:

** **

**A.           **Administrative Agent shall have received before thatFunding Date, in accordance with the provisions of subsection 2.1B, anoriginally executed Notice of Borrowing, in each case signed by a dulyauthorized Officer of Borrower.

** **

**B.           **Asof that Funding Date:

 

(i)            Therepresentations and warranties contained herein and in the other Loan Documentsshall be true, correct and complete in all material respects on and as of thatFunding Date to the same extent as though made on and as of that date, exceptto the extent such representations and warranties specifically relate to anearlier date, in which case such representations and warranties shall have beentrue, correct and complete in all material respects on and as of such earlierdate; provided, that where a representation and warranty is alreadyqualified as to materiality, such materiality qualifier shall be disregardedfor purposes of this condition.

 

(ii)           Noevent shall have occurred and be continuing or would result from theconsummation of the borrowing contemplated by such Notice of Borrowing thatwould constitute an Event of Default or a Potential Event of Default.

 

(iii)          EachLoan Party shall have performed in all material respects all agreements andsatisfied all conditions which this Agreement provides shall be performed orsatisfied by it on or before that Funding Date.

 

(iv)          Noorder, judgment or decree of any arbitrator or Government Authority shallpurport to enjoin or restrain any Lender from making the Loans to be made by iton that Funding Date.

 

(v)           Themaking of the Loans requested on such Funding Date shall not violate any lawincluding Regulation T, Regulation U or Regulation X of theBoard of Governors of the Federal Reserve System.

 

(vi)          Noinjunction or other restraining order shall have been issued and no hearing tocause an injunction or other restraining order to be issued shall be pending ornoticed with respect to any action, suit or proceeding seeking to enjoin orotherwise prevent the consummation of, or to recover any damages or obtainrelief as a result of, the transactions contemplated by this Agreement or themaking of Loans hereunder.

** **

**4.3          Conditionsto Letters of Credit**.

 

The issuance ofany Letter of Credit hereunder (whether or not the applicable Issuing Lender isobligated to issue such Letter of Credit) and the renewal of any Letter ofCredit hereunder are each subject to the following conditions precedent:

** **

**A.           **On or before the date of issuance of the initialLetter of Credit pursuant to this Agreement, the initial Loans shall have beenmade.

** **

**B.           **On or before the date of issuance of such Letter ofCredit, Administrative Agent shall have received, in accordance with theprovisions of subsection 3.1, a Notice of Issuance (or a facsimile copythereof) in each case signed by a duly authorized Officer of Borrower, togetherwith all other information specified in subsection 3.1 and such other documentsor information as the applicable Issuing Lender may reasonably require inconnection with the issuance of such Letter of Credit.

** **

**C.           **On the date of issuance of such Letter of Credit, allconditions precedent described in subsection 4.2B shall be satisfied to thesame extent as if the issuance of such Letter of Credit were the making of aLoan and the date of issuance of such Letter of Credit were a Funding Date.

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**Section 5.              BORROWER’SREPRESENTATIONS AND WARRANTIES**

 

In order to induceLenders to enter into this Agreement and to make the Loans, to induce IssuingLenders to issue Letters of Credit and to induce other Lenders to purchaseparticipations therein, Borrower represents and warrants to each Lender, on thedate of this Agreement, on each Funding Date and on the date of issuance ofeach Letter of Credit and the renewal of any Letter of Credit hereunder, thatthe following statements are true, correct and complete:

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**5.1          Organization,Powers, Qualification, Good Standing, Business and Subsidiaries**.

** **

**A.            Organization and Powers**. Each Loan Party is a corporation, partnership, trust or limitedliability company duly organized, validly existing and in good standing underthe laws of its jurisdiction of organization as specified in Schedule 5.1annexed hereto.  Each Loan Party has allrequisite corporate power and authority to own and operate its properties, tocarry on its business as now conducted and as proposed to be conducted, toenter into the Loan Documents to which it is a party and to carry out thetransactions contemplated thereby.

** **

**B.            Qualification and Good Standing**. Each Loan Party is qualified to do business and in good standing inevery jurisdiction where its assets are located and wherever necessary to carryout its business and operations, except in jurisdictions where the failure tobe so qualified or in good standing has not had and could not reasonably beexpected to result in a Material Adverse Effect.

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**C.            Conduct of Business**. Borrower and its Subsidiaries are engaged only in the businessespermitted to be engaged in pursuant to subsection 7.13.

** **

**D.            Subsidiaries**. All of the Subsidiaries of Borrower and their jurisdictions oforganization are identified in Schedule 5.1 annexed hereto, as saidSchedule 5.1 may be supplemented from time to time pursuant to theprovisions of subsection 6.1(xiii).  TheCapital Stock of Borrower and each of the Subsidiaries of Borrower identifiedin Schedule 5.1 annexed hereto (as so supplemented) are dulyauthorized, validly issued, fully paid and nonassessable and none of suchCapital Stock constitutes Margin Stock. Each of the Subsidiaries of Borrower identified in Schedule 5.1annexed hereto (as so supplemented) is a corporation, partnership, trust orlimited liability company duly organized, validly existing and in good standingunder the laws of its respective jurisdiction of organization set forththerein, has all requisite power and authority to own and operate itsproperties and to carry on its business as now conducted and as proposed to beconducted, to enter into the Loan Documents to which it is a party and to carryout the transactions contemplated thereby, and is qualified to do business andin good standing in every jurisdiction where its assets are located andwherever necessary to carry out its business and operations, in each caseexcept where failure to be so qualified or in good standing or a lack of suchpower and authority has not had and could not reasonably be expected to resultin a Material Adverse Effect.  Schedule 5.1annexed hereto (as so supplemented) correctly sets forth, as of the ClosingDate, the ownership interest of Borrower and each of its Subsidiaries in eachof the Subsidiaries of Borrower identified therein.  None of AmNet, ResNet Inc. or ResNet LLC are actively conductingbusiness.  Neither AmNet nor ResNet LLCowns any assets or has any income and Borrower intends to dissolve AmNetpromptly following the Closing Date. ResNet Inc. does not have any income and its sole assets consist of (i)95% of the membership interests in ResNet LLC; and (ii) certain promissorynotes issued by Global Interactive Communications Corporation and GlobalInteractive Technologies Corporation as set forth on Schedule 7.3, eachof which has been pledged by ResNet Inc. to Borrower.

 

**5.2         ****Authorization****of Borrowing, etc**.

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**A.            Authorization of Borrowing**. The execution, delivery and performance of the Loan Documents have beenduly authorized by all necessary action on the part of each Loan Party that isa party thereto.

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**B.            No Conflict**. The execution, delivery and performance by Loan Parties of the LoanDocuments to which they are parties and the consummation of the transactionscontemplated by the Loan Documents do not and will not (i) violate anyprovision of any law or any governmental rule or regulation applicable toBorrower or any of its Subsidiaries, the Organizational Documents of Borroweror any of its Subsidiaries or any order, judgment or decree of any court orother Government Authority binding on Borrower or any of its Subsidiaries,(ii) conflict with, result in a breach of or constitute (with due noticeor lapse of time or both) a default under any Contractual Obligation ofBorrower or any of its Subsidiaries, (iii) result in or require thecreation or imposition of any Lien upon any of the properties or assets ofBorrower or any of its Subsidiaries (other than any Liens created under any ofthe Loan Documents in favor of Administrative Agent on behalf of Lenders),(iv) require any approval of stockholders or any approval or consent ofany Person under any Contractual Obligation of Borrower or any of itsSubsidiaries, except for such approvals or consents which will be obtained onor before the Closing Date and disclosed in writing to Lenders or (v) conflictwith, result in a breach of or constitute (with due notice or lapse of time orboth) a default under any other contractual obligation of Borrower or any ofits Subsidiaries.  Any borrowing underthis Agreement will not result in any violation of any debt incurrence test orother applicable covenant under the Senior Note Documents.

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**C.            Governmental Consents**. The execution, delivery and performance by Loan Parties of the LoanDocuments to which they are parties and the consummation of the transactionscontemplated by the Loan Documents do not and will not require registrationwith, consent or approval of, or notice to, or other action to, with or by, anyGovernmental Authority.

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**D.            Binding Obligation**. Each of the Loan Documents has been duly executed and delivered by eachLoan Party that is a party thereto and is the legally valid and bindingobligation of such Loan Party, enforceable against such Loan Party inaccordance with its respective terms, except as may be limited by bankruptcy,insolvency, reorganization, moratorium or similar laws relating to or limitingcreditors’ rights generally or by equitable principles (regardless of whetherenforcement is sought in a proceeding in equity or at law).

 

**5.3          FinancialCondition**.

 

The financialstatements delivered to Lenders pursuant to subsection 4.1F were prepared inconformity with GAAP and fairly present, the financial position (on aconsolidated basis) of the entities described in such financial statements asat the respective dates thereof and the results of operations and cash flows(on a consolidated basis) of the entities described therein for each of theperiods then ended, subject, in the case of any such unaudited financialstatements, to changes resulting from audit and normal year-endadjustments.  No Loan Party has (andwill not have following the funding of the initial Loans) any obligation,liability or commitment, direct or contingent, that, as of the Closing Date, isnot reflected in the foregoing financial statements or the notes thereto and,as of any Funding Date subsequent to the Closing Date, is not reflected in themost recent financial statements delivered to Lenders pursuant to subsection6.1 or the notes thereto and that, in any such case, is material in relation tothe business, operations, properties, assets, condition (financial orotherwise) or prospects of Borrower or any of its Subsidiaries.

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**5.4          No Material Adverse Change; No RestrictedJunior Payments**.

 

SinceDecember 31, 2000, no event or change has occurred that has resulted in orevidences, either in any case or in the aggregate, a Material Adverse Effect.

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**5.5          Title toProperties; Liens; Real Property; Intellectual Property**.

** **

**A.            Title to Properties; Liens.** Borrower and its Subsidiaries have (i) good, sufficient and legal titleto (in the case of fee interests in real property), (ii) valid leaseholdinterests in (in the case of leasehold interests in real or personal property),or (iii) good title to (in the case of all other personal property), all oftheir respective properties and assets reflected in the financial statementsreferred to in subsection 5.3 or in the most recent financial statementsdelivered pursuant to subsection 6.1, in each case except for assets disposedof since the date of such financial statements in the ordinary course ofbusiness or as otherwise permitted under subsection 7.7.  Except as permitted by this Agreement, allsuch properties and assets are free and clear of Liens.

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**B.            Real Property.** As of the Closing Date, (i) Schedule 5.5B(i) annexed heretocontains a true, accurate and complete list of all fee interests in any RealProperty Assets; and (ii) Schedule 5.5B(ii) annexed hereto contains atrue, accurate and complete list of all leases, subleases or assignments ofleases (together with all amendments, modifications, supplements, renewals orextensions of any thereof) affecting each Real Property Asset with respect towhich the aggregate amount of all rents payable during any one Fiscal Yearexceeds $25,000, regardless of whether a Loan Party is the landlord or tenant(whether directly or as an assignee or successor in interest) under such lease,sublease or assignment.  Each agreementlisted in Schedule 5.5B(ii) is in full force and effect and Borrowerdoes not have knowledge of any default that has occurred and is continuingthereunder, and each such agreement constitutes the legally valid and bindingobligation of each applicable Loan Party, enforceable against such Loan Partyin accordance with its terms, except as enforcement may be limited bybankruptcy, insolvency, reorganization, moratorium or similar laws relating toor limiting creditors’ rights generally or by equitable principles relating toenforceability.

 

**C.            Intellectual Property**.  As of theClosing Date, Borrower and its Subsidiaries own or have the right to use, allIntellectual Property used in the conduct of their business, except where thefailure to own or have such right to use, individually or in the aggregatecould not reasonably be expected to result in a Material Adverse Effect.  No claim has been asserted and is pending byany Person challenging or questioning the use of any such Intellectual Propertyor the validity or effectiveness of any such Intellectual Property, nor doesBorrower know of any valid basis for any such claim except for such claims thatindividually or in the aggregate could not reasonably be expected to result ina Material Adverse Effect.  The use ofsuch Intellectual Property by Borrower and its Subsidiaries does not infringeon the rights of any Person, except for such claims and infringements that,individually or in the aggregate, could not reasonably be expected to result ina Material Adverse Effect.  All federaland state and all foreign registrations of and applications for IntellectualProperty that are owned or licensed by Borrower or any of its Subsidiaries onthe Closing Date are described on Schedule 5.5C annexed hereto.

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**5.6          Litigation;Adverse Facts**.

 

There are noProceedings (whether or not purportedly on behalf of Borrower or any of itsSubsidiaries) at law or in equity, or before or by any court or otherGovernment Authority (including any Environmental Claims) that are pending or,to the knowledge of Borrower, threatened against or affecting Borrower or anyof its Subsidiaries or any property of Borrower or any of its Subsidiaries andthat individually or in the aggregate, could reasonably be expected to resultin a Material Adverse Effect.

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**5.7          Payment of Taxes**.

 

Except to theextent permitted by subsection 6.3, all tax returns and reports of Borrower andits Subsidiaries required to be filed by any of them have been timely filed,and all taxes shown on such tax returns to be due and payable and all assessments,fees and other governmental charges upon Borrower and its Subsidiaries and upontheir respective properties, assets, income, businesses and franchises that aredue and payable have been paid when due and payable.  Borrower knows of no material proposed tax assessment againstBorrower or any of its Subsidiaries that is not being actively contested byBorrower or such Subsidiary in good faith and by appropriate proceedings; providedthat such reserves or other appropriate provisions, if any, as shall berequired in conformity with GAAP shall have been made or providedtherefor.  Borrower knows of no materialproposed tax assessment against Borrower or any of its Subsidiaries that is notbeing actively contested by Borrower or such Subsidiary in good faith and byappropriate proceedings.

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**5.8          Performance of Agreements; Materially AdverseAgreements**.

** **

**A.           **Neither Borrower nor any of its Subsidiaries is indefault in the performance, observance or fulfillment of any of theobligations, covenants or conditions contained in any of its ContractualObligations, and no condition exists that, with the giving of notice or thelapse of time or both, would constitute such a default, except where theconsequences, direct or indirect, of such default or defaults, if any,individually or in the aggregate, could not reasonably be expected to have aMaterial Adverse Effect.

** **

**B.           **Neither Borrower nor any of its Subsidiaries is aparty to or is otherwise subject to any agreements or instruments or anycharter or other internal restrictions or any provision of any applicable law,rule or regulation which, individually or in the aggregate, could reasonably beexpected to result in a Material Adverse Effect.

**5.9          Governmental Regulation**.

 

NeitherBorrower  nor any of its Subsidiaries issubject to regulation under the Public Utility Holding Company Act of 1935, theFederal Power Act, the Interstate Commerce Act or the Investment Company Act of1940 or under any other federal or state statute or regulation which may limitits ability to incur Indebtedness or which may otherwise render all or anyportion of the Obligations unenforceable.

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**5.10        Securities Activities**.

** **

**A.           **Neither Borrower nor any of its Subsidiaries isengaged principally, or as one of its important activities, in the business ofextending credit for the purpose of purchasing or carrying any Margin Stock.

** **

**B.           **Following application of the proceeds of each Loan,not more than 25% of the value of the assets (either of Borrower only or ofBorrower and its Subsidiaries on a consolidated basis) subject to theprovisions of subsection 7.2 or 7.7 or subject to any restriction contained inany agreement or instrument, between Borrower and any Lender or any Affiliateof any Lender, relating to Indebtedness and within the scope of subsection 8.2,will be Margin Stock.

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**5.11        Employee Benefit Plans**.

** **

**A.           **Borrower, each of its Subsidiaries and each of theirrespective ERISA Affiliates are in compliance in all material respects with allapplicable provisions and requirements of ERISA and the regulations andpublished interpretations thereunder with respect to each Employee BenefitPlan, and have performed in all material respects all of their obligationsunder each Employee Benefit Plan.  EachEmployee Benefit Plan that is intended to qualify under Section 401(a) of theInternal Revenue Code is so qualified.

** **

**B.           **No ERISA Event has occurred or is reasonably expectedto occur, except for events that individually or in the aggregate could notreasonably be expected to result in a Material Adverse Effect.

** **

**C.           **Except to the extent required under Section 4980B ofthe Internal Revenue Code or as reported in Borrower’s financial statements, noEmployee Benefit Plan provides health or welfare benefits (through the purchaseof insurance or otherwise) for any retired or former employee of Borrower, anyof its Subsidiaries or any of their respective ERISA Affiliates.

** **

**D.           **As of the most recent valuation date for any PensionPlan, the accumulated benefit obligation, individually or in the aggregate forall Pension Plans (excluding for purposes of such computation any Pension Planswith respect to which assets exceed the accumulated benefit obligation), doesnot exceed the fair market value of the assets of such Pension Plans by morethan $2,500,000.

** **

**E.            **As of the most recent valuation date for eachMultiemployer Plan for which the actuarial report is available, the potentialliability of Borrower, its Subsidiaries and their respective ERISA Affiliatesfor a complete withdrawal from such Multiemployer Plan (within the meaning ofSection 4203 of ERISA), when aggregated with such potential liability for acomplete withdrawal from all Multiemployer Plans, based on informationavailable pursuant to Section 4221(e) of ERISA, does not exceed $2,500,000.

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**5.12        Certain Fees**.

 

No broker’s orfinder’s fee or commission will be payable (other than any fees or commissionspayable pursuant to any commitment or fee letter between Co-Lead Arrangers andBorrower with respect to the transactions contemplated by the Loan Documents)with respect to this Agreement or any of the transactions contemplated by theLoan Documents, and Borrower hereby indemnifies Lenders against, and agreesthat it will hold Lenders harmless from, any claim, demand or liability for anysuch broker’s or finder’s fees alleged to have been incurred in connectionherewith or therewith and any expenses (including reasonable fees, expenses anddisbursements of counsel) arising in connection with any such claim, demand orliability.

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**5.13        EnvironmentalProtection**.

 

(i)            NeitherBorrower nor any of its Subsidiaries nor any of their respective Facilities oroperations are subject to any outstanding written order, consent decree orsettlement agreement with any Person relating to (a) any EnvironmentalLaw, (b) any Environmental Claim, or (c) any Hazardous Materials Activity.

 

(ii)           NeitherBorrower nor any of its Subsidiaries has received any letter or requestfor information under Section 104 of the Comprehensive EnvironmentalResponse, Compensation, and Liability Act (42 U.S.C. § 9604) or anycomparable state law.

 

(iii)          Thereare and, to Borrower’s knowledge, have been no conditions, occurrences, orHazardous Materials Activities which could reasonably be expected to form thebasis of an Environmental Claim against Borrower or any of its Subsidiarieswhich individually or in the aggregate has had or could reasonably be expectedto have a Material Adverse Effect.

 

(iv)          NeitherBorrower nor any of its Subsidiaries nor, to Borrower’s knowledge, anypredecessor of Borrower or any of its Subsidiaries has filed any notice underany Environmental Law indicating past or present treatment of HazardousMaterials at any Facility, and none of Borrower’s or any of its Subsidiaries’operations involves the generation, transportation, treatment, storage ordisposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270 or anystate equivalent.

 

(v)           Compliancewith all current or reasonably foreseeable future requirements pursuant to orunder Environmental Laws would not, individually or in the aggregate, bereasonably expected to result in a Material Adverse Effect.

 

(vi)          ToBorrower’s and each of its Subsidiary’s knowledge, all Real Property Assets andall operations of Borrower and its Subsidiaries are in compliance, and have inthe last five years been in compliance, with Environmental Laws, except wheresuch failure to comply could not reasonably be expected to have a MaterialAdverse Effect.

 

(vii)         Nojudicial proceeding or action by any Governmental Authority is pending, or tothe knowledge of Borrower and each of its Subsidiaries, threatened, under anyEnvironmental Law to which Borrower or any of its Subsidiaries is or will benamed as a party.

 

Notwithstandinganything in this subsection 5.13 to the contrary, no event or condition hasoccurred or is occurring with respect to Borrower or any of its Subsidiariesrelating to any Environmental Law, any Release of Hazardous Materials, or anyHazardous Materials Activity, including any matter disclosed on Schedule5.13 annexed hereto, which individually or in the aggregate has had orcould reasonably be expected to have a Material Adverse Effect.

** **

**5.14        Employee Matters**.

 

There are nocollective bargaining agreements covering the employees of Borrower and itsSubsidiaries except as set forth on Schedule 5.14.  There is no strike or work stoppage inexistence or, to Borrower’s knowledge, threatened involving Borrower or any ofits Subsidiaries that could reasonably be expected to result in a MaterialAdverse Effect, and there are no strikes or walkouts in progress, pending or toBorrower’s knowledge contemplated relating to any labor contracts to whichBorrower or any of its Subsidiaries is a party, relating to any labor contractsbeing negotiated, in each case, that could reasonably be expected to result ina Material Adverse Effect.

** **

**5.15        Solvency**.

 

Each Loan Party isand, upon the incurrence of any Obligations by such Loan Party on any date onwhich this representation is made, will be, Solvent.

** **

**5.16        Matters Relating to Collateral**.

** **

**A.            Creation,Perfection and Priority of Liens.**  The execution and delivery of the CollateralDocuments by Loan Parties, together with (i) the actions taken on or prior tothe date hereof pursuant to subsections 4.1M, 4.1N, 6.8 and 6.9 and (ii) thedelivery to Administrative Agent of any Pledged Collateral not delivered toAdministrative Agent at the time of execution and delivery of the applicableCollateral Document (all of which Pledged Collateral has been so delivered) areeffective to create in favor of Administrative Agent for the benefit ofLenders, as security for the respective Secured Obligations (as defined in theapplicable Collateral Document in respect of any Collateral), a valid FirstPriority Lien (except for Liens permitted by subsection 7.2A) on all of theCollateral, and all filings and other actions necessary or desirable to perfectand maintain the perfection and First Priority status of such Liens (except forLiens permitted by subsection 7.2A) have been duly made or taken and remain infull force and effect, other than the filing of any UCC financing statementsdelivered to Administrative Agent for filing (but not yet filed) and theperiodic filing of UCC continuation statements in respect of UCC financingstatements filed by or on behalf of Administrative Agent.

** **

**B.            Material Contracts.**  Except forthe Material Contracts listed on Schedule 5.16, none of the MaterialContracts contain restrictions or prohibitions on assignment.   Administrative Agent, for the benefit ofthe Lenders, may take a Lien on all accounts and payment intangibles withrespect to all Material Contracts (including those listed on Schedule 5.16,notwithstanding any such restrictions or prohibitions on assignment).  Borrower has previously provided toAdministrative Agent copies of all Material Contracts in the same form as suchcontracts have been submitted by Borrower for filing with the Securities andExchange Commission.

** **

**C.            Governmental Authorizations.** No authorization, approval or other action by, and no notice to orfiling with, any Government Authority is required for either (i) thepledge or grant by any Loan Party of the Liens purported to be created in favorof Administrative Agent pursuant to any of the Collateral Documents or(ii) the exercise by Administrative Agent of any rights or remedies inrespect of any Collateral (whether specifically granted or created pursuant toany of the Collateral Documents or created or provided for by applicable law),except for filings or recordings contemplated by subsection 5.16A and except asmay be required, in connection with the disposition of any Pledged Collateral,by laws generally affecting the offering and sale of securities.

** **

**D.            Absence of Third-Party Filings.** Except such as may have been filed in favor of Administrative Agent ascontemplated by subsection 5.16A and to evidence permitted lease obligationsand other Liens permitted pursuant to subsection 7.2, (i) no effective UCCfinancing statement, fixture filing or other instrument similar in effectcovering all or any part of the Collateral is on file in any filing orrecording office and (ii) no effective filing covering all or any part of theIP Collateral is on file in the PTO or Copyright Office.

** **

**E.             Margin Regulations.** The pledge of the Pledged Collateral pursuant to the CollateralDocuments does not violate Regulation T, U or X of the Board of Governors ofthe Federal Reserve System.

** **

**F.             Information Regarding Collateral.** All information supplied to Administrative Agent by or on behalf of anyLoan Party with respect to any of the Collateral (in each case taken as a wholewith respect to any particular Collateral) is accurate and complete in allmaterial respects.  Except as listed on Schedule5.16F hereto, neither Borrower nor any of the Subsidiaries has, within thesix-year period immediately preceding the date of this Agreement, changed itsname, the location of its Chief executive office or principal place ofbusiness, changed its jurisdiction of incorporation or formation, been thesurviving entity of a merger or consolidation, or acquired all or substantiallyall of the assets of any Person.

**5.17        Senior Note Documents**.

 

Borrower has delivered to Lenders complete and correctcopies of each Senior Note Document and of all exhibits and schedules thereto.  As of the Closing Date, the Senior NoteDocuments have not been altered, amended or otherwise modified or supplementedor any condition thereof waived without the prior written consent of theAdministrative Agent.

** **

**5.18        Disclosure**.

 

No representationor warranty of Borrower or any of its Subsidiaries contained in theConfidential Information Memorandum or in any Loan Document or in any otherdocument, certificate or written statement furnished to Lenders by or on behalfof Borrower or any of its Subsidiaries for use in connection with thetransactions contemplated by this Agreement contains any untrue statement of amaterial fact or omits to state a material fact (known to Borrower, in the caseof any document not furnished by it) necessary in order to make the statementscontained herein or therein not misleading as of the date such statement wasmade.  Any projections and pro formafinancial information contained in such materials are based upon good faithestimates and assumptions believed by Borrower to be reasonable at the timemade, it being recognized by Lenders that such projections as to future eventsare not to be viewed as facts and that actual results during the period orperiods covered by any such projections may differ from the projected results.  There are no facts known to Borrower (otherthan matters of a general economic nature) that, individually or in theaggregate, could reasonably be expected to result in a Material Adverse Effectand that have not been disclosed herein or in such other documents,certificates and statements furnished to Lenders for use in connection with thetransactions contemplated hereby.

** **

**5.19        Mortgage Taxes, Etc**.

 

All mortgage, note, transfer, documentary, stamp, intangible and othersimilar taxes and impositions which may be required to be paid in connectionwith the Loans, the Mortgages and the other Loan Documents have been (orconcurrently with the closing of the Loans and recording of the Mortgages, willbe) paid in full by Borrower.

** **

**Section 6.              BORROWER’S AFFIRMATIVE COVENANTS**

 

Borrower covenantsand agrees that until (i) all of the Commitments hereunder have beenterminated; (ii) payment in full of all of the Loans; (iii) payment in full ofall other Obligations then due and payable; and (iv) the cancellation orexpiration of all Letters of Credit, unless Requisite Lenders shall otherwisegive prior written consent, Borrower shall perform, and shall cause each of itsSubsidiaries to perform, all covenants in this Section 6.

** **

**6.1          FinancialStatements and Other Reports**.

 

Borrower willmaintain, and cause each of its Subsidiaries to maintain, a system ofaccounting established and administered in accordance with sound businesspractices to permit preparation of financial statements in conformity withGAAP.  Borrower will deliver toAdministrative Agent and Lenders:

 

(i)            Quarterly Financials:  as soon as available and in any event within45 days after the end of the first three Fiscal Quarters of each Fiscal Year,(a) the consolidated and consolidating balance sheets of Borrower and itsSubsidiaries as at the end of such Fiscal Quarter and the related consolidatedand consolidating statements of income, stockholders’ equity and cash flows ofBorrower and its Subsidiaries for such Fiscal Quarter and for the period fromthe beginning of the then current Fiscal Year to the end of such FiscalQuarter, setting forth in each case in comparative form the correspondingfigures for the corresponding periods of the previous Fiscal Year and thecorresponding figures from the Financial Plan for the current Fiscal Year, allin reasonable detail and certified by the chief financial officer of Borrowerthat they fairly present, in all material respects, the financial condition ofBorrower and its Subsidiaries as at the dates indicated and the results oftheir operations and their cash flows for the periods indicated, subject tochanges resulting from audit and normal year-end adjustments; and (b) a narrative report describingthe operations of Borrower and its Subsidiaries in the form prepared forpresentation to senior management for such Fiscal Quarter and for the periodfrom the beginning of the then current Fiscal Year to the end of such FiscalYear (it being understood that the narrative report as contained in Borrower’sregular and periodic reports on Form 10-Q shall be sufficient for purposes ofthis clause (b));

 

(ii)           Year-EndFinancials:  as soon as availableand in any event within 90 days after the end of each Fiscal Year, (a) theconsolidated and consolidating balance sheets of Borrower and its Subsidiariesas at the end of such Fiscal Year and the related consolidated andconsolidating statements of income, stockholders’ equity and cash flows ofBorrower and its Subsidiaries for such Fiscal Year, setting forth in each casein comparative form the corresponding figures for the previous Fiscal Year andthe corresponding figures from the Financial Plan for the Fiscal Year coveredby such financial statements, all in reasonable detail and certified by thechief financial officer of Borrower that they fairly present, in all materialrespects, the financial condition of Borrower and its Subsidiaries as at thedates indicated and the results of their operations and their cash flows forthe periods indicated; (b) a narrative report describing the operations ofBorrower and its Subsidiaries in the form prepared for presentation to seniormanagement for such Fiscal Year (it being understood that the narrative reportas contained in Borrower’s regular and periodic reports on Form 10-K shall besufficient for purposes of this clause (b)); and (c) in the case of suchconsolidated financial statements, a report thereon of a nationally recognized“big 5” accounting firm or other independent certified public accountants ofrecognized national standing selected by Borrower and satisfactory toAdministrative Agent, which report shall be unqualified, shall express nodoubts about the ability of Borrower and its Subsidiaries to continue as agoing concern, and shall state that such consolidated financial statementsfairly present, in all material respects, the consolidated financial positionof Borrower and its Subsidiaries as at the dates indicated and the results oftheir operations and their cash flows for the periods indicated in conformitywith GAAP applied on a basis consistent with prior years (except as otherwisedisclosed in such financial statements) and that the examination by suchaccountants in connection with such consolidated financial statements has beenmade in accordance with generally accepted auditing standards;

 

(iii)          Officer and Compliance Certificates:  together with each delivery of financialstatements of Borrower and its Subsidiaries pursuant to subdivisions (i) and(ii) above, (a) an Officers’ Certificate of Borrower stating that the signershave reviewed the terms of this Agreement and have made, or caused to be madeunder their supervision, a review in reasonable detail of the transactions andcondition of Borrower and its Subsidiaries during the accounting period coveredby such financial statements and that such review has not disclosed theexistence during or at the end of such accounting period, and that the signersdo not have knowledge of the existence as at the date of such Officers’Certificate, of any condition or event that constitutes an Event of Default orPotential Event of Default, or, if any such condition or event existed orexists, specifying the nature and period of existence thereof and what actionBorrower has taken, is taking and proposes to take with respect thereto; and(b) a Compliance Certificate demonstrating in reasonable detail complianceduring and at the end of the applicable accounting periods with therestrictions contained in Section 7, in each case to the extent compliance withsuch restrictions is required to be tested at the end of the applicableaccounting period;

 

(iv)          Reconciliation Statements:  if, as a result of any change in accountingprinciples and policies from those used in the preparation of the auditedfinancial statements referred to in subsection 5.3, the consolidated financialstatements of Borrower and its Subsidiaries delivered pursuant to subdivisions(i), (ii) or (x) of this subsection 6.1 will differ in any material respectfrom the consolidated financial statements that would have been deliveredpursuant to such subdivisions had no such change in accounting principles andpolicies been made, then (a) together with the first delivery of financialstatements pursuant to subdivision (i), (ii) or (x) of this subsection 6.1 followingsuch change, consolidated financial statements of Borrower and its Subsidiariesfor (y) the current Fiscal Year to the effective date of such change and(z) the two full Fiscal Years immediately preceding the Fiscal Year inwhich such change is made, in each case prepared on a pro forma basis as ifsuch change had been in effect during such periods, and (b) together witheach delivery of financial statements pursuant to subdivision (i), (ii) or (x)of this subsection 6.1 following such change, if required pursuant tosubsection 1.2, a written statement of the chief accounting officer or chieffinancial officer of Borrower setting forth the differences (including anydifferences that would affect any calculations relating to the financialcovenants set forth in subsection 7.6) which would have resulted if suchfinancial statements had been prepared without giving effect to such change;

 

(v)           Accountants’ Certification:  together with each delivery of consolidatedfinancial statements of Borrower and its Subsidiaries pursuant to subdivision(ii) above, a written statement by the independent certified public accountantsgiving the report thereon (a) stating that their audit examination has includeda review of the terms of this Agreement and the other Loan Documents as theyrelate to accounting matters, (b) stating whether, in connection with theiraudit examination, any condition or event that constitutes an Event of Defaultor Potential Event of Default has come to their attention and, if such acondition or event has come to their attention, specifying the nature andperiod of existence thereof; provided that such accountants shall not beliable by reason of any failure to obtain knowledge of any such Event ofDefault or Potential Event of Default that would not be disclosed in the courseof their audit examination, and (c) stating that based on their auditexamination nothing has come to their attention that causes them to believeeither or both that the information contained in the certificates delivered therewithpursuant to subdivision (iii) above is not correct or that the matters setforth in the Compliance Certificates delivered therewith pursuant to clause (b)of subdivision (iii) above for the applicable Fiscal Year are not stated inaccordance with the terms of this Agreement;

 

(vi)          SECFilings and Press Releases: promptly upon their becoming available, copies of (a) all financialstatements, reports, notices and proxy statements sent or made availablegenerally by Borrower to its security holders or by any Subsidiary of Borrowerto its security holders other than Borrower or another Subsidiary of Borrower,(b) all regular and periodic reports and all registration statements(other than on Form S-8 or a similar form) and prospectuses, if any, filed byBorrower or any of its Subsidiaries with any securities exchange or with theSecurities and Exchange Commission or any governmental or private regulatoryauthority, and (c) all press releases and other statements made availablegenerally by Borrower or any of its Subsidiaries to the public concerningmaterial developments in the business of Borrower or any of its Subsidiaries;

 

(vii)         Litigation or Other Proceedings:  (a) promptly upon any officer of Borrowerobtaining knowledge of the institution of, or non-frivolous threat of, anyProceeding against or affecting Borrower or any of its Subsidiaries or anyproperty of Borrower or any of its Subsidiaries not previously disclosed inwriting by Borrower to Lenders or upon the reasonable request of AdministrativeAgent, any material development in any Proceeding that, in any case:

 

(x)            ifadversely determined, has a reasonable possibility of giving rise to a MaterialAdverse Effect; or

 

(y)           seeksto enjoin or otherwise prevent the consummation of, or to recover any damagesor obtain relief as a result of, the transactions contemplated hereby;

 

written notice thereoftogether with such other information as may be reasonably available to Borrowerto enable Lenders and their counsel to evaluate such matters; and (b) withintwenty days after the end of each Fiscal Quarter, a schedule of all Proceedingsinvolving an alleged liability of, or claims against or affecting, Borrower orany of its Subsidiaries equal to or greater than $2,500,000, and promptly afterrequest by Administrative Agent such other information as may be reasonablyrequested by Administrative Agent to enable Administrative Agent and itscounsel to evaluate any of such Proceedings;

 

(viii)        ERISAEvents:  promptly upon becomingaware of the occurrence of or forthcoming occurrence of any ERISA Event, awritten notice specifying the nature thereof, what action Borrower, any of itsSubsidiaries or any of their respective ERISA Affiliates has taken, is takingor proposes to take with respect thereto and, when known, any action taken orthreatened by the Internal Revenue Service, the Department of Labor or the PBGCwith respect thereto;

 

(ix)           ERISANotices:  with reasonablepromptness, copies of (a) each Schedule B (Actuarial Information) to the annualreport (Form 5500 Series) filed by Borrower, any of its Subsidiaries or any oftheir respective ERISA Affiliates with the Internal Revenue Service withrespect to each Pension Plan; (b) all notices received by Borrower, any of itsSubsidiaries or any of their respective ERISA Affiliates from a MultiemployerPlan sponsor concerning an ERISA Event; and (b) copies of such other documentsor governmental reports or filings relating to any Employee Benefit Plan asAdministrative Agent shall reasonably request;

 

(x)            Financial Plans:  as soon as practicable and in any event nolater than 60 days after the last day of each Fiscal Year, a consolidated planand financial forecast for such Fiscal Year (the **“Financial Plan”** for suchFiscal Year), including (a) forecasted consolidated balance sheets andforecasted consolidated statements of income and cash flows of Borrower and itsSubsidiaries for each Fiscal Year, together with proformaCompliance Certificates for each Fiscal Quarter of each Fiscal Year and anexplanation of the assumptions on which such forecasts are based; and(b) forecasted consolidated statements of income and cash flows ofBorrower and its Subsidiaries for each Fiscal Quarter of each Fiscal Year,together with an explanation of the assumptions on which such forecasts arebased;

 

(xi)           Insurance:  (a) as soon as practicable and in any eventby the last day of each Fiscal Year, a report in form and substancesatisfactory to Administrative Agent outlining all material insurance coveragerequired hereunder to be maintained as of the date of such report by Borrowerand its Subsidiaries and all material insurance coverage planned to bemaintained by Borrower and its Subsidiaries in the immediately succeedingFiscal Year as required hereunder and (b) as soon as practicable after anymaterial change in insurance coverage maintained by Borrower and itsSubsidiaries notice thereof to Administrative Agent specifying the changes andreasons therefor;

 

(xii)          GoverningBody:  with reasonable promptness,written notice of any change in the Governing Body of Borrower;

 

(xiii)         New Subsidiaries:  promptly upon any Person becoming aSubsidiary of Borrower, a written notice setting forth with respect to suchPerson (a) the date on which such Person became a Subsidiary of Borrower and(b) all of the data required to be set forth in Schedule 5.1 annexedhereto with respect to all Subsidiaries of Borrower (it being understood thatsuch written notice shall be deemed to supplement Schedule 5.1 annexedhereto for all purposes of this Agreement);

 

(xiv)        Margin Determination Certificate:commencing with the Fiscal Quarter ended September 30, 2001, together witheach delivery of financial statements for each Fiscal Quarter (other than eachfourth Fiscal Quarter) pursuant to subdivision (ii) above, and within 45 daysof the last day of each fourth Fiscal Quarter, a Margin DeterminationCertificate demonstrating in reasonable detail the calculation of theConsolidated Total Leverage Ratio for the four consecutive Fiscal Quartersending on the day of the accounting period covered by such financialstatements;

 

(xv)         DepositAccounts: promptly upon the opening of any Deposit Account with a principalbalance in excess of $2,500,000 by Borrower or any of its Subsidiaries, awritten notice setting forth all of the data required to be set forth in Schedule6.11 annexed hereto with respect to such Deposit Account;

 

(xvi)        Eventsof Default, etc.:  promptly uponBorrower obtaining knowledge (a) of any condition or event that constitutes anEvent of Default or Potential Event of Default, or becoming aware that anyLender has given any notice (other than to Administrative Agent) or taken anyother action with respect to a claimed Event of Default or Potential Event ofDefault; (b) that any Person has given any notice to Borrower or any ofits Subsidiaries or taken any other action with respect to a claimed default orevent or condition of the type referred to in subsection 8.2; (c) of anyresignation or dismissal of Borrower’s independent accountant; (d) of anyChange of Control or other event requiring a prepayment of principal on anySubordinated Indebtedness; (e) of any individual or series of related AssetSales with respect to which either (1) Borrower is obligated to prepay theLoans and/or reduce the Revolving Loan Commitments pursuant to subsection2.4B(iii)(a); or (2) the Net Asset Sale Proceeds of which exceed $250,000; (f)of any issuances of Capital Stock or receipt of Net Insurance/CondemnationProceeds aggregating in excess of $500,000; or (g) of the occurrence of anyevent or change that has caused or evidences, either in any case or in theaggregate, a Material Adverse Effect, an Officers’ Certificate specifying thenature and period of existence of such condition, event or change, or specifyingthe notice given or action taken by any such Person and the nature of suchclaimed Event of Default, Potential Event of Default, default, event orcondition, and what action Borrower has taken, is taking and proposes to takewith respect thereto;

 

(xvii)       CorporateMatters:  with reasonablepromptness, written notice of any amendment of the articles or certificate ofincorporation or by-laws or other constituent documents of Borrower or any ofits Subsidiaries;

 

(xviii)      Revisions or Updates to Schedules:  should any of the information or disclosuresprovided on any of the Schedules originally attached to any of the LoanDocuments become outdated or incorrect in any material respect, as part of thenext Compliance Certificate required pursuant to subsection 6.1(iii) or at suchother time as Borrower shall elect (or in the case of an update to Schedule5.5B(i), upon the acquisition by Borrower or any Subsidiary of anyadditional Real Property Assets), such revisions or updates to such Schedulesas may be necessary or appropriate to update or correct such Schedules, providedthat no such revisions or updates to any Schedules shall be deemed to haveamended, modified or superseded such Schedules immediately prior to thesubmission of such revised or updated Schedules, or to have cured any breach ofwarranty or representation resulting from the inaccuracy or incompleteness ofany such Schedules, unless and until the Requisite Lenders in their sole andabsolute discretion, shall have accepted in writing such revisions or updatesto such Schedules; and

 

(xix)         OtherInformation:  with reasonablepromptness, such other information and data with respect to Borrower or any ofits Subsidiaries as from time to time may be reasonably requested by any Lender(such requests to be coordinated through Administrative Agent), including,without limitation, as soon as available, but in any event not later thanforty-five (45) days after the end of the first three Fiscal Quarters ofBorrower and not later than ninety (90) days after the end of the last FiscalQuarter of Borrower, a report, certified by the president, chief financialofficer or chief operating officer of Borrower as having been preparedpersonally by him or under his personal supervision and to be substantially trueand complete, of the number of Guest-Pay Rooms served by Borrower and itsSubsidiaries (on a state-by-state basis) as of the last day of such fiscalquarter, together with such other information with respect to billings,operating costs, Consolidated EBITDA or other matters as Administrative Agentor the Required Lenders may reasonably request from time to time.

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**6.2          Existence, etc.**

 

Except aspermitted under subsection 7.7, Borrower will, and will cause each of itsSubsidiaries to, at all times preserve and keep in full force and effect itsexistence and all rights and franchises material to its business; provided,however that neither Borrower nor any of its Subsidiaries shall berequired to preserve any such right or franchise if the Governing Body of Borroweror such Subsidiary shall determine that the preservation thereof is no longerdesirable in the conduct of the business of Borrower or such Subsidiary, as thecase may be, and that the loss thereof could not reasonably be expected toresult in a Material Adverse Effect.

 

**6.3         ****Payment of Taxes****and Claims; Tax Returns**

 

**A.            Payment of Taxes and Claims.**  Borrower will, and will cause each of itsSubsidiaries to, pay all taxes, assessments and other governmental chargesimposed upon it or any of its properties or assets or in respect of any of itsincome, businesses or franchises before any penalty accrues thereon, and allclaims (including claims for labor, services, materials and supplies) for sumsthat have become due and payable and that by law have or may become a Lien uponany of its properties or assets, prior to the time when any penalty or fineshall be incurred with respect thereto; provided that no such charge orclaim need be paid if it is being contested in good faith by appropriateproceedings promptly instituted and diligently conducted, so long as (i) suchreserve or other appropriate provision, if any, as shall be required inconformity with GAAP shall have been made therefor and (ii) in the case of acharge or claim which has or may become a Lien against any of the Collateral,such proceedings conclusively operate to stay the sale of any portion of theCollateral to satisfy such charge or claim.

 

**B.            Tax Returns.**  Borrower will not, nor will itpermit any of its Subsidiaries to, file or consent to the filing of anyconsolidated income tax return with any Person (other than Borrower or any ofits Subsidiaries).

 

**6.4         ****Maintenance****of Properties;Insurance; Application of Net Insurance/ Condemnation Proceeds**

** **

**A.            Maintenance of Properties.** Borrower will, and will cause each of its Subsidiaries to, maintain orcause to be maintained in good repair, working order and condition, ordinarywear and tear excepted, all material properties used or useful in the businessof Borrower and its Subsidiaries (including all Intellectual Property) and fromtime to time will make or cause to be made all appropriate repairs, renewalsand replacements thereof.

** **

**B.            Insurance.** Borrower will maintain or cause to be maintained, with financially soundand reputable insurers, such public liability insurance, third party propertydamage insurance, business interruption insurance and casualty insurance withrespect to liabilities, losses or damage in respect of the assets, propertiesand businesses of Borrower and its Subsidiaries as may customarily be carriedor maintained under similar circumstances by corporations of establishedreputation engaged in similar businesses, in each case in such amounts (givingeffect to self-insurance, to the extent companies of similar size and insimilar businesses self-insure), with such deductibles, covering such risks andotherwise on such terms and conditions as shall be customary for corporationssimilarly situated in the industry. Without limiting the generality of the foregoing, Borrower will maintainor cause to be maintained (i) flood insurance with respect to each FloodHazard Property that is located in a community that participates in theNational Flood Insurance Program, in each case in compliance with anyapplicable regulations of the Board of Governors of the Federal Reserve System,and (ii) replacement value casualty insurance on the Collateral under suchpolicies of insurance, with such insurance companies, in such amounts, withsuch deductibles, covering such risks, and having other terms and conditions asare at all times satisfactory to Administrative Agent in its commerciallyreasonable judgment. Each such policy of insurance shall (a) nameAdministrative Agent for the benefit of Lenders as an additional insuredthereunder as its interests may appear and (b) in the case of each businessinterruption and casualty insurance policy, contain a loss payable clause orendorsement, satisfactory in form and substance to Administrative Agent, thatnames Administrative Agent for the benefit of Lenders as the loss payeethereunder for any covered loss in excess of $500,000 and provides for at least30 days prior written notice to Administrative Agent of any modification orcancellation of such policy.

** **

**C.            Application of Net Insurance/CondemnationProceeds**.

 

(i)            BusinessInterruption Insurance.  Uponreceipt by Borrower or any of its Subsidiaries of any business interruptioninsurance proceeds constituting Net Insurance/Condemnation Proceeds,(a) so long as no Potential Event of Default under subsections 8.1,8.6 or8.7 and no Event of Default shall have occurred and be continuing, Borrower orsuch Subsidiary may retain and apply such Net Insurance/Condemnation Proceedsfor working capital purposes, and (b) if a Potential Event of Default undersubsections 8.1,8.6 or 8.7 or Event of Default shall have occurred and becontinuing, Borrower shall apply an amount equal to such NetInsurance/Condemnation Proceeds to prepay the Loans (and/or the Revolving LoanCommitments shall be reduced) as provided in subsection 2.4B;

 

(ii)           NetInsurance/Condemnation Proceeds Received by Borrower.  Upon receipt by Borrower or any of itsSubsidiaries of any Net Insurance/Condemnation Proceeds other than frombusiness interruption insurance, (a) so long as no Potential Event of Defaultunder subsections 8.1,8.6 or 8.7 and no Event of Default shall have occurredand be continuing, Borrower shall, or shall cause one or more of itsSubsidiaries to, within 180 days (or such longer period as is necessary tocomplete the repair, restoration or replacement described below so long asBorrower diligently initiates and continues to prosecute such repair,restoration or replacement within such 180-day period) apply such NetInsurance/Condemnation Proceeds to pay or reimburse the costs of repairing,restoring or replacing the assets in respect of which such NetInsurance/Condemnation Proceeds were received or, to the extent not so applied,to prepay the Loans (and/or the Revolving Loan Commitments shall be reduced) asprovided in subsection 2.4B, and (b) if a Potential Event of Default undersubsections 8.1,8.6 or 8.7 or Event of Default shall have occurred and becontinuing, Borrower shall apply an amount equal to such NetInsurance/Condemnation Proceeds to prepay the Loans (and/or the Revolving LoanCommitments shall be reduced) as provided in subsection 2.4B.

 

(iii)          NetInsurance/Condemnation Proceeds Received by Administrative Agent.  Upon receipt by Administrative Agent of anyNet Insurance/Condemnation Proceeds as loss payee, (a) if and to the extentBorrower would have been required to apply such Net Insurance/CondemnationProceeds (if it had received them directly) to prepay the Loans and/or reducethe Revolving Loan Commitments, Administrative Agent shall, and Borrower herebyauthorizes Administrative Agent to, apply such Net Insurance/CondemnationProceeds to prepay the Loans (and/or the Revolving Loan Commitments shall bereduced) as provided in subsection 2.4B, and (b) to the extent the foregoingclause (a) does not apply, Administrative Agent shall deliver such NetInsurance/Condemnation Proceeds to Borrower, and Borrower shall, or shall causeone or more of its Subsidiaries to, promptly apply such NetInsurance/Condemnation Proceeds to the costs of repairing, restoring, orreplacing the assets in respect of which such Net Insurance/CondemnationProceeds were received; provided,however, that if at any timeAdministrative Agent reasonably determines (A) that Borrower or such Subsidiaryis not proceeding diligently with such repair, restoration or replacement or(B) that such repair, restoration or replacement cannot be completed with theNet Insurance/Condemnation Proceeds then held by Administrative Agent for suchpurpose, together with funds otherwise available to Borrower for such purpose,or that such repair, restoration or replacement cannot begin within 180 daysafter the receipt by Administrative Agent of such Net Insurance/CondemnationProceeds, Administrative Agent shall, and Borrower hereby authorizesAdministrative Agent to, apply such Net Insurance/ Condemnation Proceeds toprepay the Loans (and/or the Revolving Loan Commitments shall be reduced) asprovided in subsection 2.4B.

**6.5          Inspection Rights.**

 

Borrower shall, and shall cause each of itsSubsidiaries to, permit any authorized representatives designated byAdministrative Agent to visit and inspect any of the properties of Borrower orof any of its Subsidiaries, to inspect, copy and take extracts from its andtheir financial and accounting records, and to discuss its and their affairs,finances and accounts with its and their officers and independent publicaccountants (provided that Borrower may, if it so chooses, be present at orparticipate in any such discussion), all upon reasonable notice and at such reasonabletimes during normal business hours and as often as may reasonably be requested.

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**6.6          Compliancewith Laws, etc.**

 

Borrower shall comply, and shall cause each of itsSubsidiaries and all other Persons on or occupying any Facilities to comply,with the requirements of all applicable laws, rules, regulations and orders ofany Government Authority (including all Environmental Laws), noncompliance withwhich could reasonably be expected to result in, individually or in theaggregate, a Material Adverse Effect.

 

**6.7         ****Environmental Matters**.

 

**A.            EnvironmentalDisclosure.**  Borrower will deliver to AdministrativeAgent and Lenders:

 

(i)            EnvironmentalAudits and Reports.  As soon aspracticable following receipt thereof, copies of all environmental audits,investigations, analyses and reports of any kind or character, whether preparedby personnel of Borrower or any of its Subsidiaries or by independentconsultants, governmental authorities or any other Persons, with respect to anyEnvironmental Claims that could reasonably be expected to result in a MaterialAdverse Effect;

 

(ii)           Noticeof Certain Releases, Remedial Actions, Etc.  Promptly upon the occurrence thereof, written notice describingin reasonable detail (a) any Release required to be reported to any federal,state or local governmental or regulatory agency under any applicableEnvironmental Laws, (b) any remedial action taken by Borrower or any otherPerson in response to (1) any Hazardous Materials Activities the existenceof which could reasonably be expected to result in one or more EnvironmentalClaims having, individually or in the aggregate, a Material Adverse Effect, or(2) any Environmental Claims that, individually or in the aggregate, couldreasonably be expected to result in a Material Adverse Effect, and (c)Borrower’s discovery of any occurrence or condition on any real propertyadjoining or in the vicinity of any Facility that could cause such Facility orany part thereof to be subject to any material restrictions on the ownership,occupancy, transferability or use thereof under any Environmental Laws.

 

(iii)          WrittenCommunications Regarding Environmental Claims, Releases, Etc.  As soon as practicable following the sendingor receipt thereof by Borrower or any of its Subsidiaries, a copy of any andall written communications with respect to (a) any Environmental Claims that,individually or in the aggregate, could reasonably be expected to result in aMaterial Adverse Effect, (b) any Release required to be reported to anyfederal, state or local governmental or regulatory agency, and (c) anyrequest for information from any governmental agency that suggests such agencyis investigating whether Borrower or any of its Subsidiaries may be potentiallyresponsible for any Hazardous Materials Activity where the liability that mayarise in connection with such investigation could reasonably be expected toresult in a Material Adverse Effect.

 

(iv)          Noticeof Certain Proposed Actions Having Environmental Impact.  Prompt written notice describing in reasonabledetail (a) any proposed acquisition of stock, assets, or property byBorrower or any of its Subsidiaries that could reasonably be expected to (1)expose Borrower or any of its Subsidiaries to, or result in, EnvironmentalClaims that could reasonably be expected to result in, individually or in theaggregate, a Material Adverse Effect or (2) affect the ability of Borrower orany of its Subsidiaries to maintain in full force and effect all materialGovernmental Authorizations required under any Environmental Laws for theirrespective operations and (b) any proposed action to be taken by Borroweror any of its Subsidiaries to commence manufacturing or other industrialoperations or to modify current operations in a manner that could reasonably beexpected to subject Borrower or any of its Subsidiaries to any additionalobligations or requirements under any Environmental Laws that could reasonablybe expected to result in, individually or in the aggregate, a Material AdverseEffect.

 

(v)           FinalPhase I Environmental Assessment. Within 30 days of the Closing Date, the final Phase I environmentalassessment for the Closing Date Mortgaged Property that meets all of therequirements of subsection 4.1L.

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**B.            Borrower’s Actions RegardingHazardous Materials Activities, Environmental Claims and Violations ofEnvironmental Laws.**

 

(i)            RemedialActions Relating to Hazardous Materials Activities.  Borrower shall, in compliance with allapplicable Environmental Laws, promptly undertake, and shall cause each of itsSubsidiaries promptly to undertake, any and all investigations, studies,sampling, testing, abatement, cleanup, removal, remediation or other responseactions necessary to remove, remediate, clean up or abate any HazardousMaterials Activity on, under or about any Facility that is in violation of anyEnvironmental Laws or that presents a material risk of giving rise to anEnvironmental Claim.  If Borrower or anyof its Subsidiaries undertakes any such action with respect to any HazardousMaterials, Borrower or such Subsidiary shall conduct and complete such actionin compliance with all applicable Environmental Laws and in accordance with thepolicies, orders and directives of all federal, state and local governmentalauthorities except when, and only to the extent that, Borrower’s or suchSubsidiary’s liability with respect to such Hazardous Materials Activity isbeing diligently contested in good faith and by appropriate proceedings byBorrower or such Subsidiary.

 

(ii)           Actions with Respect toEnvironmental Claims and Violations of Environmental Laws.  Borrower shall promptly take, and shallcause each of its Subsidiaries promptly to take, any and all actions necessaryto (i) cure any violation of applicable Environmental Laws by Borrower or itsSubsidiaries that could reasonably be expected to result in, individually or inthe aggregate, a Material Adverse Effect and (ii) make an appropriate responseto any Environmental Claim against Borrower or any of its Subsidiaries anddischarge any obligations it may have to any Person thereunder where failure todo so could reasonably be expected to result in, individually or in theaggregate, a Material Adverse Effect.

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**C.            Environmental Investigations**.  Borrower agrees that Administrative Agentmay, from time to time and in its reasonable discretion, (i) retain, atBorrower’s expense, an independent professional consultant to review anyenvironmental audits, investigations, analyses and reports relating toHazardous Materials prepared by or for Borrower and (ii) in the event (a)Administrative Agent reasonably believes that Borrower has breached anyrepresentation, warranty or covenant contained in subsection 5.6, 5.13, 6.6,6.7 or that there has been a material violation of Environmental Laws at anyFacility or by Borrower or any of its Subsidiaries at any other location or (b)an Event of Default has occurred and is continuing, conduct its owninvestigation of any Facility; provided that, in the case of anyFacility no longer owned, leased, operated or used by Borrower or any of itsSubsidiaries, Borrower shall only be obligated to use its best efforts toobtain permission for Administrative Agent’s professional consultant to conductan investigation of such Facility.  Forpurposes of conducting such a review and/or investigation, Borrower herebygrants to Administrative Agent and its agents, employees, consultants andcontractors the right to enter into or onto any Facilities currently owned,leased, operated or used by Borrower or any of its Subsidiaries and to performsuch tests on such property (including taking samples of soil, groundwater andsuspected asbestos-containing materials) as are reasonably necessary inconnection therewith.  Any suchinvestigation of any Facility shall be conducted, unless otherwise agreed to byBorrower and Administrative Agent, during normal business hours and, to theextent reasonably practicable, shall be conducted so as not to interfere withthe ongoing operations at such Facility or to cause any damage or loss to anyproperty at such Facility.  Borrower andAdministrative Agent hereby acknowledge and agree that any report of anyinvestigation conducted at the request of Administrative Agent pursuant to thissubsection 6.7C will be obtained and shall be used by Administrative Agent andLenders for the purposes of Lenders’ internal credit decisions, to monitor andpolice the Loans and to protect Lenders’ security interests, if any, created bythe Loan Documents.  AdministrativeAgent agrees to deliver a copy of any such report to Borrower with theunderstanding that Borrower acknowledges and agrees that (x) it willindemnify and hold harmless Administrative Agent and each Lender from anycosts, losses or liabilities relating to Borrower’s use of or reliance on suchreport, (y) neither Administrative Agent nor any Lender makes anyrepresentation or warranty with respect to such report, and (z) bydelivering such report to Borrower, neither Administrative Agent nor any Lenderis requiring or recommending the implementation of any suggestions or recommendationscontained in such report.

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**6.8          Executionof Subsidiary Guaranty and Personal Property Collateral DocumentsAfter the Closing Date**

 

**A.            Execution of Subsidiary Guaranty andPersonal Property Collateral Documents**.  If anyPerson becomes a Domestic Subsidiary of Borrower after the date hereof, or ifAmNet, ResNet Inc. or ResNet LLC conducts business or operations or acquires,obtains or receives any asset or income from any source (other than, in thecase of ResNet Inc., 95% of the membership interests in ResNet LLC and thepromissory notes listed on Schedule 7.3 issued by Global InteractiveCommunications Corporation and Global Interactive Technologies Corporation, aslong as such promissory notes remain pledged by ResNet Inc. to Borrower),Borrower will promptly notify Administrative Agent of that fact and cause suchDomestic Subsidiary to execute and deliver to Administrative Agent acounterpart of the Subsidiary Guaranty and Security Agreement and to take allsuch further actions and execute all such further documents and instruments(including actions, documents and instruments comparable to those described insubsection 4.1M) as may be necessary or, in the reasonable opinion ofAdministrative Agent, desirable to create in favor of Administrative Agent, forthe benefit of Lenders, a valid and perfected First Priority Lien (except forLiens permitted by subsection 7.2A) on all of the personal and mixed propertyassets of such Domestic Subsidiary described in the applicable forms ofCollateral Documents.

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**B.            Foreign Subsidiaries. **If any Person becomes a Foreign Subsidiary of Borroweror any Subsidiary after the date hereof, Borrower will promptly notifyAdministrative Agent of that fact and, if such Subsidiary is directly orindirectly owned by Borrower or a Domestic Subsidiary, cause such Subsidiaryand the owner of such Subsidiary to execute and deliver to Administrative Agentsuch documents and instruments and take such further actions (includingactions, documents and instruments comparable to those described in subsection4.1M) as may be necessary, or in the reasonable opinion of AdministrativeAgent, desirable to create in favor of Administrative Agent, for the benefit ofLenders, a valid and perfected First Priority Lien on 65% of the voting CapitalStock and all of the non-voting Capital Stock of such Foreign Subsidiary.

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**C.            Subsidiary Organizational Documents,Legal Opinions, Etc**.  Borrower shall deliver to AdministrativeAgent, together with such Loan Documents, (i) certified copies of such Subsidiary’sOrganizational Documents, together with, if such Subsidiary is a DomesticSubsidiary, a good standing certificate from the Secretary of State of thejurisdiction of its organization and each other state in which such Person isqualified to do business and, to the extent generally available, a certificateor other evidence of good standing as to payment of any applicable franchise orsimilar taxes from the appropriate taxing authority of each of suchjurisdictions, each to be dated a recent date prior to their delivery toAdministrative Agent; (ii) a certificate executed by the secretary orsimilar Officer of such Subsidiary as to (a) the fact that the attachedresolutions of the Governing Body of such Subsidiary approving and authorizingthe execution, delivery and performance of such Loan Documents are in fullforce and effect and have not been modified or amended; and (b) theincumbency and signatures of the Officers of such Subsidiary executing suchLoan Documents; and (iii) a favorable opinion of counsel to suchSubsidiary, addressed to Administrative Agent and Lenders, in form andsubstance satisfactory to Administrative Agent and its counsel, as to(a) the due organization and good standing of such Subsidiary;(b) the due authorization, execution and delivery by such Subsidiary ofsuch Loan Documents; (c) the enforceability of such Loan Documents againstsuch Subsidiary; and (d) such other matters (including matters relating tothe creation and perfection of Liens in any Collateral pursuant to such LoanDocuments) as Administrative Agent may reasonably request, all of the foregoingto be satisfactory in form and substance to Administrative Agent and itscounsel.

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**D.            Pledge of Capital Stock of AmNet.**  If Borrowerdoes not liquidate, wind up and dissolve AmNet within 30 days of the ClosingDate, Borrower shall deliver to Administrative Agent stock certificates (whichcertificates shall be accompanied by irrevocable undated stock powers, dulyendorsed in blank and otherwise satisfactory in form and substance toAdministrative Agent) representing all of the Capital Stock of AmNet and anamendment to Schedule 1(e)(i) of the Security Agreement to reflect thepledge of such shares.

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**6.9          MattersRelating to Additional Real Property Collateral**

 

**A.            AdditionalMortgages, Etc.** From and after the Closing Date, if (i) Borrower or any SubsidiaryGuarantor acquires any fee interest in Material Real Property or any MaterialLeasehold Property; or (ii) at the time any Person becomes a SubsidiaryGuarantor, such Person owns or holds any fee interest in Material Real Propertyor any Material Leasehold Property, in the case of clause (ii) above excludingany such Real Property Asset the encumbrancing of which requires the consent ofany applicable lessor or then-existing senior lienholder, where Borrower andits Subsidiaries have attempted in good faith, but are unable, to obtain suchlessor’s or senior lienholder’s consent after use of their best efforts (anysuch non-excluded Real Property Asset described in the foregoing clause (i) or(ii) being an **“Additional Mortgaged Property”**), Borrower or such SubsidiaryGuarantor shall deliver to Administrative Agent, as soon as practicable aftersuch Person acquires such Additional Mortgaged Property or becomes a SubsidiaryGuarantor, as the case may be, a fully executed and notarized Mortgage (an “**AdditionalMortgage**”), in proper form for recording in all appropriate placesin all applicable jurisdictions, encumbering the interest of such Loan Party insuch Additional Mortgaged Property; and such opinions, appraisal, documents,title insurance, Survey and environmental reports that either would have beendelivered on the Closing Date if such Additional Mortgaged Property were aClosing Date Mortgaged Property or that may be reasonably required byAdministrative Agent, in each case, in form and substance satisfactory toAdministrative Agent.  Borrower further covenants andagrees that the fair market value of all fee interests in real property ownedor acquired by Borrower or any Subsidiary Guarantor that are not includedwithin the definitions of “Material Real Property” and “Additional MortgagedProperty” shall not exceed $5,000,000 in the aggregate.

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**B.           ****Real Estate Appraisals.**  Borrower shall, and shall cause each of itsSubsidiaries to, permit an independent real estate appraiser satisfactory toAdministrative Agent, upon reasonable notice, to visit and inspect anyAdditional Mortgaged Property for the purpose of preparing an appraisal of suchAdditional Mortgaged Property satisfying the requirements of any applicablelaws and regulations (in each case to the extent required under such laws andregulations as determined by Administrative Agent in its discretion).

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**C.            ConformingLeasehold Interests**.  If Borrower or any of its Subsidiariesacquires any Material Leasehold Property, at Administrative Agent’s request,Borrower shall, or shall cause such Subsidiary to, cause such MaterialLeasehold Property to be a Conforming Leasehold Interest.

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**6.10        Interest RateProtection.**

 

At all times afterthe date that is 90 days after the Closing Date, Borrower shall maintain ineffect one or more Interest Rate Agreements with a Lender with respect to theTerm Loans, each such Interest Rate Agreement to be for a term of at least twoyears and in form and substance reasonably satisfactory to AdministrativeAgent, which Interest Rate Agreements shall effectively limit that component ofthe interest costs to Borrower in respect of a LIBOR Loan that is based uponthe rate obtained pursuant to clause (a) of the definition of Adjusted LIBORwith respect to an aggregate notional principal amount of not less than 50% ofthe aggregate principal amount of the Term Loans outstanding from time to time(based on the assumption that such notional principal amount was a LIBOR Loanwith an Interest Period of three months) to a rate equal to not more than 11%per annum.

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**6.11        DepositAccounts and Cash Management Systems**

 

Borrower shall,and shall cause each of its Subsidiaries to, use and maintain its Deposit Accountsand cash management systems in a manner reasonably satisfactory toAdministrative Agent.  Informationregarding all Deposit Accounts with a principal balance in excess of$2,500,000, including (a) the name and address of the financial institutions maintainingthe Deposit Accounts; and (b) the Deposit Account numbers, shall be set forthon Schedule 6.11 annexed hereto. Borrower shall not permit any of such Deposit Accounts at any time tohave a principal balance in excess of $2,500,000 unless Borrower or suchSubsidiary, as the case may be, has (i) delivered to Administrative Agentan agreement, satisfactory in form and substance to Administrative Agent andexecuted by the financial institution at which such Deposit Account ismaintained, pursuant to which such financial institution confirms andacknowledges Administrative Agent’s security interest in, and sole dominion andcontrol over, such Deposit Account and waives its rights to set-off withrespect to amounts in such Deposit Account; and (ii) taken all other stepsnecessary or, in the opinion of Administrative Agent, desirable to ensure thatAdministrative Agent will have sole dominion and control over such DepositAccount at all times while such agreement is in effect; provided that ifBorrower or such Subsidiary is unable to obtain such agreement from suchfinancial institution Borrower shall, or shall cause such Subsidiary to, within30 days after receiving a written request by Administrative Agent to do so,transfer all amounts in the applicable Deposit Account to a Deposit Accountmaintained at a financial institution from which Borrower or such Subsidiaryhas obtained such an agreement. Borrower shall not permit the aggregate amount on deposit in all DepositAccounts of Borrower and of its Subsidiaries (other than Deposit Accountsmaintained with Administrative Agent) or Deposit Accounts for which a depositaccount control agreement described above has been executed and delivered) atany time to exceed $5,000,000.

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**6.12        Solvency.**

 

Borrower shall atall times be Solvent and Borrower shall cause Borrower and its Subsidiaries,taken as a whole, to be at all times Solvent.

 

**Section 7.             ****BORROWER’S NEGATIVE****COVENANTS**

 

Borrower covenantsand agrees that until (i) all of the Commitments hereunder have beenterminated; (ii) payment in full of all of the Loans; (iii) payment in full ofall other Obligations then due and payable; and (iv) the cancellation orexpiration of all Letters of Credit, unless Requisite Lenders shall otherwisegive prior written consent, Borrower shall perform, and shall cause each of itsSubsidiaries to perform, all covenants in this Section 7.

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**7.1          Indebtedness****.**

 

Borrower shallnot, and shall not permit any of its Subsidiaries to, directly or indirectly,create, incur, assume or guaranty, or otherwise become or remain directly orindirectly liable with respect to, any Indebtedness, except:

 

(i)            Borrowermay become and remain liable with respect to the Obligations;

 

(ii)           Borrowerand its Domestic Subsidiaries that are Subsidiary Guarantors may become andremain liable with respect to Contingent Obligations permitted by subsection7.4 and, upon any matured obligations actually arising pursuant thereto, theIndebtedness corresponding to the Contingent Obligations so extinguished;

 

(iii)          Borrower may become and remain liablewith respect to Indebtedness to any of its wholly-owned Domestic Subsidiariesthat are Subsidiary Guarantors, and any wholly-owned Domestic Subsidiary ofBorrower that is a Subsidiary Guarantor may become and remain liable withrespect to Indebtedness to Borrower or any other wholly-owned DomesticSubsidiary of Borrower that is a Subsidiary Guarantor; provided that(a) all such intercompany Indebtedness shall be evidenced by promissorynotes; (b) all such intercompany Indebtedness owed by Borrower to any ofits Subsidiaries shall be subordinated in right of payment to the payment infull of the Obligations pursuant to the terms of the applicable promissorynotes or an intercompany subordination agreement; and (c) any payment byany Subsidiary of Borrower under any guaranty of the Obligations shall resultin a protanto reduction of the amount of any intercompanyIndebtedness owed by such Subsidiary to Borrower or to any of its Subsidiariesfor whose benefit such payment is made;

 

(iv)          Borrowermay remain liable with respect to the Senior Notes (and senior unsecured orsubordinated Indebtedness to refinance the Senior Notes acceptable toAdministrative Agent) in an aggregate principal amount not to exceed the lesserof $174,000,000 or the then outstanding principal amount of the Senior Notesplus any reasonable transaction costs associated with any acceptablerefinancing of such Senior Notes;

 

(v)           Borrowerand its Subsidiaries, as applicable, may remain liable with respect toIndebtedness described on Schedule 7.1 annexed hereto;

 

(vi)          Borrower may remain liable withrespect to Subordinated Indebtedness in an aggregate principal amount not toexceed $100,000,000; and

 

(vii)         Borrower and its Domestic Subsidiariesthat are Subsidiary Guarantors may become and remain liable with respect toother Indebtedness (including letters of credit) in an aggregate principalamount not to exceed $20,000,000 at any time outstanding.

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**7.2          Liens andRelated Matters****.**

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**A.            Prohibitionon Liens.** Borrower shall not, and shall not permit any of its Subsidiaries to,directly or indirectly, create, incur, assume or permit to exist any Lien on orwith respect to any property or asset of any kind (including any document orinstrument in respect of goods or accounts receivable) of Borrower or any ofits Subsidiaries, whether now owned or hereafter acquired, or any income orprofits therefrom or proceeds thereof, or file or permit the filing of, orpermit to remain in effect, any financing statement or other similar notice ofany Lien with respect to any such property, asset, income or profits orproceeds under the UCC of any State or under any similar recording or noticestatute, except:

 

(i)            Permitted Encumbrances;

 

(ii)           Liensgranted pursuant to the Collateral Documents;

 

(iii)          Liens existing on the Closing Date andset forth on Schedule 7.2A; provided that (a) no such Lien shall atany time be extended to cover property or assets other than the property orassets subject thereto on the Closing Date and (b) the principal amount ofthe Indebtedness secured by such Liens shall not be extended, renewed, refundedor refinanced; and

 

(iv)          OtherLiens on assets acquired with proceeds of Indebtedness permitted undersubsection 7.1(vii) securing such Indebtedness; provided such Liens attachconcurrently with or within ten days after the acquisition thereof and only tothe asset acquired with the proceeds of such Indebtedness.

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**B.            Equitable Lien in Favor of Lenders.** If Borrower or any of its Subsidiaries shall create or assume any Lienupon any of its properties or assets, whether now owned or hereafter acquired,other than Liens excepted by the provisions of subsection 7.2A, Borrower or itsSubsidiary shall make or cause to be made effective provision whereby theObligations will be secured by such Lien equally and ratably with any and allother Indebtedness secured thereby as long as any such Indebtedness shall be sosecured which provision shall not cure any default that may have occurred andwhich provision shall be made without prejudice to any rights of AdministrativeAgent or Lenders with respect to such default; provided that,notwithstanding the foregoing, this covenant shall not be construed as aconsent by Requisite Lenders to the creation or assumption of any such Lien notpermitted by the provisions of subsection 7.2A.

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**C.            No Further Negative Pledges.** Neither Borrower nor any of its Subsidiaries shall enter into anyagreement prohibiting the creation or assumption of any Lien in favor ofAdministrative Agent or any Lender upon any of its properties or assets,whether now owned or hereafter acquired, except with respect to specificproperty encumbered to secure payment of particular Indebtedness or to be soldpursuant to an executed agreement with respect to an Asset Sale permitted bythis Agreement.

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**D.            No Restrictions on SubsidiaryDistributions to Borrower or Other Subsidiaries.**  Borrower willnot, and will not permit any of its Subsidiaries to, create or otherwise causeor suffer to exist or become effective any consensual encumbrance orrestriction of any kind on the ability of any such Subsidiary to (i) paydividends or make any other distributions on any of such Subsidiary’s CapitalStock owned by Borrower or any other Subsidiary of Borrower, (ii) repay orprepay any Indebtedness owed by such Subsidiary to Borrower or any otherSubsidiary of Borrower, (iii) make loans or advances to Borrower or anyother Subsidiary of Borrower, or (iv) transfer any of its property orassets to Borrower or any other Subsidiary of Borrower, except as provided inthis Agreement.

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**7.3          Investments;Acquisitions.**

 

Borrower shallnot, and shall not permit any of its Subsidiaries to, directly or indirectly,make or own any Investment in any Person, including any Joint Venture, oracquire, by purchase or otherwise, all or substantially all the business,property or fixed assets of, or Capital Stock or other ownership interest of,any Person or any division or line of business of any Person except:

 

(i)            Borrowerand its Subsidiaries may make and own Investments in Cash Equivalents;

 

(ii)           Borrowerand its Subsidiaries may continue to own the Investments owned by them as ofthe Closing Date in any Subsidiaries of Borrower and Borrower and itswholly-owned Domestic Subsidiaries that are Subsidiary Guarantors may make andown additional equity Investments in their respective wholly-owned DomesticSubsidiaries that are Subsidiary Guarantors;

 

(iii)          Borrowerand its Subsidiaries may make intercompany loans to the extent permitted under subsection7.1(iii);

 

(iv)          Borrowerand its Subsidiaries may make Consolidated Capital Expenditures permitted bysubsection 7.8;

 

(v)           Borrowerand its Subsidiaries may continue to own the Investments owned by them anddescribed on Schedule 7.3 annexed hereto;

 

(vi)          Borrower and its Domestic Subsidiariesthat are Subsidiary Guarantors may make and own other Investments in anaggregate amount not to exceed at any time $5,000,000; provided, however,if Borrower has achieved, and for so long as Borrower is maintaining (and on apro forma basis, after giving effect to any additional Investments, willcontinue to maintain), a Consolidated Total Leverage Ratio of less than3.00:1.00, and so long as no Potential Event of Default or Event of Default hasoccurred and is continuing at the time the Investment is made, Borrower and itsDomestic Subsidiaries that are Subsidiary Guarantors may make and own otherInvestments in an aggregate amount not to exceed at any time $10,000,000; and, provided,further that if at any time Borrower is no longer maintaining aConsolidated Total Leverage Ratio of less than 3.00:1.00, the amount ofInvestments permitted under this subsection (vi) shall once again be $5,000,000(it being understood that any Investment made or committed to be made beforesuch reduction shall continue to be permitted hereunder);

 

(vii)         Borrowermay acquire and hold obligations of one or more officers or other employees ofBorrower or its Subsidiaries in connection with such officers’ or employees’acquisition of shares of Borrower’s common stock, so long as no cash isactually advanced by Borrower or any of its Subsidiaries to such officers oremployees in connection with the acquisition of any such obligations; and

 

(viii)        Borrowerand its Subsidiaries may receive and hold promissory notes and other non-cashconsideration received in connection with any Asset Sale permitted bysubsection 7.7(iv).

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**7.4          ContingentObligations**.

 

Borrower shallnot, and shall not permit any of its Subsidiaries to, directly or indirectly,create or become or remain liable with respect to any Contingent Obligation,except:

 

(i)            Subsidiariesof Borrower may become and remain liable with respect to Contingent Obligationsin respect of the Subsidiary Guaranty;

 

(ii)           Borrowermay become and remain liable with respect to Contingent Obligations in respectof Letters of Credit and Borrower and its Subsidiaries may become and remainliable with respect to Contingent Obligations in respect of other commercialletters of credit in an aggregate amount not to exceed at any time $5,000,000and Contingent Obligations in respect of other standby letters of credit in anaggregate amount not to exceed at any time $2,500,000;

 

(iii)          Borrowermay become and remain liable with respect to Contingent Obligations under HedgeAgreements required under subsection 6.10 and under other Hedge Agreements withrespect to Indebtedness in an aggregate notional principal amount not to exceedat any time $150,000,000;

 

(iv)          Borrowerand its Subsidiaries may become and remain liable with respect to ContingentObligations in respect of customary indemnification and purchase priceadjustment obligations incurred in connection with Asset Sales or other salesof assets; and

 

(v)           Borrowerand its Domestic Subsidiaries that are Subsidiary Guarantors may become andremain liable with respect to other Contingent Obligations of Indebtednesspermitted under subsection 7.1.

** **

**7.5          RestrictedJunior Payments**.

 

Borrower shall not, andshall not permit any of its Subsidiaries to, directly or indirectly, declare,order, pay, make or set apart any sum for any Restricted Junior Payment; providedthat Borrower may make regularly scheduled payments of interest in respect ofany Subordinated Indebtedness in accordance with the terms of, and only to theextent required by, and subject to the subordination provisions contained in,the indenture or other agreement pursuant to which such SubordinatedIndebtedness was issued, as such indenture or other agreement may be amendedfrom time to time to the extent permitted under subsection 7.14; provided, that if Borrowerhas achieved, and for so long as Borrower is maintaining (and on a pro formabasis, after giving effect to any Restricted Junior Payment, will continue tomaintain), a Consolidated Total Leverage Ratio of less than 3.00:1.00, and solong as no Potential Event of Default or Event of Default has occurred and iscontinuing, Borrower and its Subsidiaries may make Restricted Junior Paymentsin the form of share repurchases or dividends in an amount not to exceed at anytime $15,000,000; provided, further that if at any time Borroweris no longer maintaining a Consolidated Total Leverage Ratio of less than3.00:1.00, the Restricted Junior Payments permitted under the immediatelypreceding proviso of this subsection 7.5 shall no longer be permitted (it beingunderstood that any Restricted Junior Payment made at a time when suchrestriction was not in effect shall continue to be permitted hereunder).

 

**7.6         ****Financial****Covenants**.

 

**A.            Minimum Consolidated InterestCoverage Ratio**.  Borrower shall not permit the ConsolidatedInterest Coverage Ratio for any four consecutive Fiscal Quarter period endingduring any of the periods set forth below to be less than the correlative ratioindicated:

 
| **Period**                                                               |   | **Minimum Consolidated Interest  Coverage Ratio** |   |
|--------------------------------------------------------------------------|--------|---------------------------------------------------|--------|
| 3rd  Fiscal Quarter, Fiscal Year 2001                                    |   | 2.25:1.00                                         |   |
| 4th  Fiscal Quarter, Fiscal Year 2001                                    |   | 2.25:1.00                                         |   |
| 1st  Fiscal Quarter, Fiscal Year 2002                                    |   | 2.25:1.00                                         |   |
| 2nd  Fiscal Quarter, Fiscal Year 2002                                    |   | 2.25:1.00                                         |   |
| 3rd  Fiscal Quarter, Fiscal Year 2002                                    |   | 2.25:1.00                                         |   |
| 4th  Fiscal Quarter, Fiscal Year 2002                                    |   | 2.25:1.00                                         |   |
| 1st  Fiscal Quarter, Fiscal Year 2003                                    |   | 2.25:1.00                                         |   |
| 2nd  Fiscal Quarter, Fiscal Year 2003                                    |   | 2.50:1.00                                         |   |
| 3rd  Fiscal Quarter, Fiscal Year 2003                                    |   | 2.50:1.00                                         |   |
| 4th  Fiscal Quarter, Fiscal Year 2003                                    |   | 2.50:1.00                                         |   |
| 1st  Fiscal Quarter, Fiscal Year 2004 and each Fiscal Quarter thereafter |   | 2.75:1.00                                         |   |

 

**B.            MaximumConsolidated Total Leverage Ratio.**  Borrower shall notpermit the Consolidated Total Leverage Ratio as of the last day of the mostrecently ended Fiscal Quarter ending during any of the periods set forth belowto exceed the correlative ratio indicated:

 
| **Period**                                                               |   | **Maximum Consolidated Total Leverage  Ratio** |   |
|--------------------------------------------------------------------------|--------|------------------------------------------------|--------|
| 3rd  Fiscal Quarter, Fiscal Year 2001                                    |   | 4.75:1.00                                      |   |
| 4th  Fiscal Quarter, Fiscal Year 2001                                    |   | 4.75:1.00                                      |   |
| 1st  Fiscal Quarter, Fiscal Year 2002                                    |   | 4.50:1.00                                      |   |
| 2nd  Fiscal Quarter, Fiscal Year 2002                                    |   | 4.50:1.00                                      |   |
| 3rd  Fiscal Quarter, Fiscal Year 2002                                    |   | 4.50:1.00                                      |   |
| 4th  Fiscal Quarter, Fiscal Year 2002                                    |   | 4.25:1.00                                      |   |
| 1st  Fiscal Quarter, Fiscal Year 2003                                    |   | 4.25:1.00                                      |   |
| 2nd  Fiscal Quarter, Fiscal Year 2003                                    |   | 4.25:1.00                                      |   |
| 3rd  Fiscal Quarter, Fiscal Year 2003                                    |   | 4.00:1.00                                      |   |
| 4th  Fiscal Quarter, Fiscal Year 2003                                    |   | 4.00:1.00                                      |   |
| 1st  Fiscal Quarter, Fiscal Year 2004                                    |   | 3.75:1.00                                      |   |
| 2nd  Fiscal Quarter, Fiscal Year 2004                                    |   | 3.75:1.00                                      |   |
| 3rd  Fiscal Quarter, Fiscal Year 2004                                    |   | 3.75:1.00                                      |   |
| 4th  Fiscal Quarter, Fiscal Year 2004                                    |   | 3.50:1.00                                      |   |
| 1st  Fiscal Quarter, Fiscal Year 2005                                    |   | 3.50:1.00                                      |   |
| 2nd  Fiscal Quarter, Fiscal Year 2005 and each Fiscal Quarter thereafter |   | 3.25:1.00                                      |   |

 

**C.            Maximum Consolidated Senior Secured Leverage Ratio.** Borrower shall not permit the Consolidated Senior Secured Leverage Ratioas of the last day of the most recently ended Fiscal Quarter ending during anyof the periods set forth below to exceed the correlative ratio indicated:

 
| **Period**                                                               |   | **Maximum Consolidated Senior Secured  Leverage Ratio** |   |
|--------------------------------------------------------------------------|--------|---------------------------------------------------------|--------|
| 3rd  Fiscal Quarter, Fiscal Year 2001 and each Fiscal Quarter thereafter |   | 2.25:1.00                                               |   |

 

**D.            MinimumGuest Pay Rooms.** Borrower shall not permit the number of Guest Pay Rooms at any time tobe less than 700,000.

 

**7.7         ****Restriction****on Fundamental Changes;Asset Sales****.**

 

Borrower shallnot, and shall not permit any of its Subsidiaries to, alter the corporate,capital or legal structure of Borrower or any of its Subsidiaries, or enterinto any transaction of merger or consolidation, or liquidate, wind-up ordissolve itself (or suffer any liquidation or dissolution), or convey, sell,lease or sub-lease (as lessor or sublessor), transfer or otherwise dispose of,in one transaction or a series of transactions, all or any part of itsbusiness, property or assets (including its notes or receivables and CapitalStock of a Subsidiary, whether newly issued or outstanding), whether now ownedor hereafter acquired, or acquire by purchase or otherwise all or substantiallyall the business, property or fixed assets of, or stock or other evidence ofbeneficial ownership of, any Person or any division or line of business of anyPerson (other than purchases or other acquisitions of Inventory, materials andequipment in the ordinary course of Borrower’s, or any of its Subsidiary’s,business) except:

 

(i)            anySubsidiary of Borrower may be merged with or into Borrower or any wholly-ownedSubsidiary Guarantor, or be liquidated, wound up or dissolved, or all or anypart of its business, property or assets may be conveyed, sold, leased,transferred or otherwise disposed of, in one transaction or a series oftransactions, to Borrower or any wholly-owned Subsidiary Guarantor; providedthat, in the case of such a merger, Borrower or such wholly-owned SubsidiaryGuarantor shall be the continuing or surviving Person and (ii) in the case ofsuch a liquidation, winding up or dissolution, all of the assets of suchwholly-owned Subsidiary Guarantor are transferred to Borrower or a SubsidiaryGuarantor that is wholly owned, directly or indirectly, by Borrower or asotherwise expressly permitted under this Agreement;

 

(ii)           Borrowerand its Subsidiaries may sell or otherwise dispose of assets in transactionsthat do not constitute Asset Sales; provided that the considerationreceived for such assets shall be in an amount at least equal to the fairmarket value thereof;

 

(iii)          Borrowerand its Subsidiaries may dispose of obsolete, worn out or surplus property inthe ordinary course of business;

 

(iv)          Borrower and its Subsidiaries may makeAsset Sales to Persons who are not Affiliates of Borrower and its Subsidiariesof assets having a fair market value not in excess of $1,000,000 in any FiscalYear; provided that (a) the consideration received for such assetsshall be in an amount at least equal to the fair market value thereof;(b) a minimum of 75% of the consideration received shall be in Cash, and(c) the proceeds of such Asset Sales shall be applied as required bysubsection 2.4B(iii)(a) or subsection 2.4D;

 

(v)           in order to resolve disputes thatoccur in the ordinary course of business, Borrower and its Subsidiaries maydiscount or otherwise compromise for less than the face value thereof, notes oraccounts receivable;

 

(vi)          Borroweror a Subsidiary may sell or dispose of shares of Capital Stock of any of itsSubsidiaries in order to qualify members of the Governing Body of theSubsidiary if required by applicable law;

 

(vii)         AnyPerson may be merged with or into Borrower or any Subsidiaries if theacquisition of the Capital Stock of such Person by Borrower or such Subsidiarywould have been permitted pursuant to subsections 7.3 and 7.8; providedthat (a) in the case of Borrower, Borrower shall be the continuing or survivingPerson, (b) if a Subsidiary of Borrower is not the surviving or continuingPerson, the surviving Person becomes a Subsidiary of Borrower and complies withthe provisions of subsection 6.8 and 6.9 and (c) no Potential Event of Defaultor Event of Default shall have occurred or be continuing after giving effectthereto; and

 

(viii)        Borrowermay dissolve a Subsidiary that is not a Subsidiary Guarantor; providedthat immediately thereafter, all of the proceeds thereof are received byBorrower and its Subsidiaries in proportion to their respective ownershipinterests in such Subsidiary.

** **

**7.8          ConsolidatedCapital Expenditures**.

 

Borrower shallnot, and shall not permit its Subsidiaries to, make or incur ConsolidatedCapital Expenditures, in any Fiscal Year indicated below, in an aggregateamount in excess of the corresponding amount (the **“Maximum Consolidated CapitalExpenditures Amount”**) set forth below opposite such Fiscal Year; providedthat the Maximum Consolidated Capital Expenditures Amount for any Fiscal Yearshall be increased by an amount equal to the excess, if any, (but in no eventmore than $15,000,000) of the Maximum Consolidated Capital Expenditures Amountfor the previous Fiscal Year (without giving effect to any adjustment in accordancewith this proviso) over the actual amount of Consolidated Capital Expendituresfor such previous Fiscal Year:

 
| **Fiscal Year** |   | **Maximum Consolidated Capital  Expenditures** |       |
|-----------------|--------|------------------------------------------------|------------|
| 2001            |   | $                                              | 85,000,000 |   |
| 2002            |   | 90,000,000                                     |       |
| 2003            |   | 95,000,000                                     |       |
| 2004            |   | 95,000,000                                     |       |
| 2005            |   | 90,000,000                                     |       |
| 2006            |   | 90,000,000                                     |       |
| 2007            |   | 90,000,000                                     |       |
|                 |        |                                                |            |  |

 

**7.9          Transactions with Affiliates**.

 

Borrower shallnot, and shall not permit any of its Subsidiaries to, directly or indirectly,enter into or permit to exist any transaction (including the purchase, sale,lease or exchange of any property or the rendering of any service) with anyAffiliate of Borrower on terms that are less favorable to Borrower or thatSubsidiary, as the case may be, than those that might be obtained at the timefrom Persons who are not such a holder or Affiliate; provided that theforegoing restriction shall not apply to (i) any transaction betweenBorrower and any of its wholly-owned Domestic Subsidiaries that are SubsidiaryGuarantors or between any of its wholly-owned Domestic Subsidiaries that areSubsidiary Guarantors or (ii) reasonable and customary fees paid tomembers of the Governing Bodies of Borrower and its Subsidiaries.

** **

**7.10        Sales and Lease-Backs**

 

Borrower shallnot, and shall not permit any of its Subsidiaries to, directly or indirectly,become or remain liable as lessee or as a guarantor or other surety withrespect to any lease, whether an Operating Lease or a Capital Lease, of anyproperty (whether real, personal or mixed), whether now owned or hereafteracquired, (i) that Borrower or any of its Subsidiaries has sold ortransferred or is to sell or transfer to any other Person (other than Borroweror any of its Subsidiaries) or (ii) that Borrower or any of itsSubsidiaries intends to use for substantially the same purpose as any otherproperty that has been or is to be sold or transferred by Borrower or any ofits Subsidiaries to any Person (other than Borrower or any of its Subsidiaries)in connection with such lease.

** **

**7.11        Disposal of Subsidiary Stock**.

 

Except for anysale of 100% of the Capital Stock of any of its Subsidiaries in compliance withthe provisions of clauses (i), (iv), (vi) and (vii) of subsection 7.7, Borrowershall not directly or indirectly sell, assign, pledge or otherwise encumber ordispose of any shares of Capital Stock of any of its Subsidiaries, except toqualify directors if required by applicable law; or permit any of itsSubsidiaries directly or indirectly to sell, assign, pledge or otherwiseencumber or dispose of any shares of Capital Stock of any of its Subsidiaries(including such Subsidiary), except to Borrower, another wholly owned DomesticSubsidiary of Borrower that is a Subsidiary Guarantor, or to qualify directorsif required by applicable law.

** **

**7.12        Sale or Discount of Receivables**.

 

Except for salespermitted pursuant to subsection 7.7(v), Borrower shall not, and shall notpermit any of its Subsidiaries to, directly or indirectly, sell with recourse,or discount or otherwise sell for less than the face value thereof, any of itsnotes or accounts receivable.

** **

**7.13        Conduct ofBusiness**.

 

From and after theClosing Date, Borrower shall not, and shall not permit any of its Subsidiariesto, engage in any business other than (i) the businesses engaged in byBorrower and its Subsidiaries on the Closing Date and similar or relatedbusinesses and (ii) such other lines of business as may be consented to byRequisite Lenders.

** **

**7.14        Amendmentsof Documents Relating to Senior Note Documents and Subordinated Indebtedness**.

 

Borrower shallnot, and shall not permit any of its Subsidiaries to, amend or otherwise changethe terms of any Senior Note Document or Subordinated Indebtedness, or make anypayment consistent with an amendment thereof or change thereto, if the effectof such amendment or change is to increase the interest rate on such SeniorNote or Subordinated Indebtedness, change (to earlier dates) any dates uponwhich payments of principal or interest are due thereon, change any event ofdefault or condition to an event of default with respect thereto (other than toeliminate any such event of default or increase any grace period relatedthereto), change the redemption, prepayment or defeasance provisions thereof,change the subordination provisions thereof (or of any guaranty thereof), or changeany collateral therefor (other than to release such collateral), or if theeffect of such amendment or change, together with all other amendments orchanges made, is to increase materially the obligations of the obligorthereunder or to confer any additional rights on the holders of such SeniorNote or Subordinated Indebtedness (or a trustee or other representative ontheir behalf) which would be adverse to Borrower or Lenders.

** **

**7.15        Fiscal Year.**

 

Borrower shall notchange its Fiscal Year-end from December 31.

** **

**Section 8.              EVENTS OF DEFAULT**

 

If any of thefollowing conditions or events (“**Events of Default**”) shall occur:

** **

**8.1          Failureto Make Payments When Due**.

 

Failure byBorrower to pay any installment of principal of any Loan when due, whether atstated maturity, by acceleration, by notice of voluntary prepayment, bymandatory prepayment or otherwise; failure by Borrower to pay when due anyamount payable to an Issuing Lender in reimbursement of any drawing under aLetter of Credit; or failure by Borrower to pay any interest on any Loan or anyfee or any other amount due under this Agreement within three Business Daysafter the date due; or

** **

**8.2          Defaultin Other Agreements; Termination of Material Intellectual Property License**.

 

(i)            Failureof Borrower or any of its Subsidiaries to pay when due any principal of orinterest on or any other amount payable in respect of one or more items ofIndebtedness (other than Indebtedness referred to in subsection 8.1) orContingent Obligations in an individual principal amount of $2,500,000 or moreor with an aggregate principal amount of $2,500,000 or more, in each casebeyond the end of any grace period provided therefor; or

 

(ii)           breachor default by Borrower or any of its Subsidiaries with respect to any othermaterial term of (a) one or more items of Indebtedness or ContingentObligations in the individual or aggregate principal amounts referred to inclause (i) above or (b) any loan agreement, mortgage, indenture or otheragreement relating to such item(s) of Indebtedness or Contingent Obligation(s),if the effect of such breach or default is to cause, or to permit the holder orholders of that Indebtedness or Contingent Obligation(s) (or a trustee onbehalf of such holder or holders) to cause, that Indebtedness or ContingentObligation(s) to become or be declared due and payable prior to its statedmaturity or the stated maturity of any underlying obligation, as the case maybe (upon the giving or receiving of notice, lapse of time, both, or otherwise);or

 

(iii)          anylicense of material Intellectual Property used or useful in the business ofBorrower and/or any of its Subsidiaries is prematurely terminated and notreplaced by Borrower and/or such Subsidiary within 30 days of such terminationand the result thereof could reasonably be expected to result in a MaterialAdverse Effect; or

** **

**8.3          Breach of Certain Covenants.**

 

Failure ofBorrower to perform or comply with any term or condition contained insubsection 2.5 or 6.2 or Section 7 of this Agreement; or

** **

**8.4          Breach of Warranty**.

 

Anyrepresentation, warranty, certification or other statement made by Borrower orany of its Subsidiaries in any Loan Document or in any statement or certificateat any time given by Borrower or any of its Subsidiaries in writing pursuant heretoor thereto or in connection herewith or therewith shall be false in anymaterial respect on the date as of which made; or

** **

**8.5          Other Defaults Under Loan Documents**.

 

Any Loan Partyshall default in the performance of or compliance with any term contained inthis Agreement or any of the other Loan Documents, other than any such termreferred to in any other subsection of this Section 8, and such default shallnot have been remedied or waived within 30 days after the earlier of (i) anOfficer of Borrower or such Loan Party becoming aware of such default or (ii)receipt by Borrower and such Loan Party of notice from Administrative Agent orany Lender of such default; or

** **

**8.6          InvoluntaryBankruptcy; Appointment of Receiver, etc.**

 

(i)            Acourt having jurisdiction in the premises shall enter a decree or order forrelief in respect of Borrower or any of its Subsidiaries in an involuntary caseunder the Bankruptcy Code or under any other applicable bankruptcy, insolvencyor similar law now or hereafter in effect, which decree or order is not stayed;or any other similar relief shall be granted under any applicable federal orstate law; or

 

(ii)           aninvoluntary case shall be commenced against Borrower or any of its Subsidiariesunder the Bankruptcy Code or under any other applicable bankruptcy, insolvencyor similar law now or hereafter in effect; or a decree or order of a courthaving jurisdiction in the premises for the appointment of a receiver,liquidator, sequestrator, trustee, custodian or other officer having similarpowers over Borrower or any of its Subsidiaries, or over all or a substantialpart of its property, shall have been entered; or there shall have occurred theinvoluntary appointment of an interim receiver, trustee or other custodian ofBorrower or any of its Subsidiaries for all or a substantial part of itsproperty; or a warrant of attachment, execution or similar process shall havebeen issued against any substantial part of the property of Borrower or any ofits Subsidiaries, and any such event described in this clause (ii) shallcontinue for 60 days unless dismissed, bonded or discharged; or

** **

**8.7          VoluntaryBankruptcy; Appointment of Receiver, etc.**

 

(i)            Borroweror any of its Subsidiaries shall have an order for relief entered with respectto it or commence a voluntary case under the Bankruptcy Code or under any otherapplicable bankruptcy, insolvency or similar law now or hereafter in effect, orshall consent to the entry of an order for relief in an involuntary case, or tothe conversion of an involuntary case to a voluntary case, under any such law,or shall consent to the appointment of or taking possession by a receiver,trustee or other custodian for all or a substantial part of its property; orBorrower or any of its Subsidiaries shall make any assignment for the benefitof creditors; or

 

(ii)           Borroweror any of its Subsidiaries shall be unable, or shall fail generally, or shalladmit in writing its inability, to pay its debts as such debts become due; orthe Governing Body of Borrower or any of its Subsidiaries (or any committeethereof) shall adopt any resolution or otherwise authorize any action toapprove any of the actions referred to in clause (i) above or this clause (ii);or

** **

**8.8          Judgmentsand Attachments**.

 

Any moneyjudgment, writ or warrant of attachment or similar process involving(i) in any individual case an amount in excess of $5,000,000 or(ii) in the aggregate at any time an amount in excess of $5,000,000 (ineither case not adequately covered by insurance as to which a solvent andunaffiliated insurance company has acknowledged coverage) shall be entered orfiled against Borrower or any of its Subsidiaries or any of their respectiveassets and shall remain undischarged, unvacated, unbonded or unstayed for aperiod of 30 days (or in any event later than five days prior to the date ofany proposed sale thereunder); or

** **

**8.9          Dissolution**.

 

Any order,judgment or decree shall be entered against Borrower or any of its Subsidiariesdecreeing the dissolution or split up of Borrower or that Subsidiary and suchorder shall remain undischarged or unstayed for a period in excess of 30 days;or

** **

**8.10        Employee Benefit Plans**.

 

There shall occurone or more ERISA Events which individually or in the aggregate results in ormight reasonably be expected to result in liability of Borrower, any of itsSubsidiaries or any of their respective ERISA Affiliates in excess of$2,500,000 during the term of this Agreement; or there shall exist anaccumulated benefit obligation, individually or in the aggregate for allPension Plans (excluding for purposes of such computation any Pension Planswith respect to which assets exceed the accumulated benefit obligation), whichexceeds the fair market value of the assets of such Pension Plans by more than$2,500,000; or

** **

**8.11        Material Adverse Effect**.

 

Any event orchange shall occur that has caused or evidences, either in any case or in theaggregate, a Material Adverse Effect; or

** **

**8.12        Change in Control**.

 

A Change inControl shall have occurred; or

** **

**8.13        Invalidity of Subsidiary Guaranty; Failure ofSecurity; Repudiation of Obligations**.

 

At any time afterthe execution and delivery thereof, (i) the Subsidiary Guaranty for any reason,other than the satisfaction in full of all Obligations, shall cease to be infull force and effect (other than in accordance with its terms) or shall bedeclared to be null and void, (ii) any Collateral Document shall cease to be infull force and effect (other than by reason of a release of Collateralthereunder in accordance with the terms hereof or thereof, the satisfaction infull of the Obligations or any other termination of such Collateral Document inaccordance with the terms hereof or thereof) or shall be declared null andvoid, or Administrative Agent shall not have or shall cease to have a valid andperfected First Priority Lien in any Collateral purported to be coveredthereby, or (iii) any Loan Party shall contest the validity or enforceabilityof any Loan Document in writing or deny in writing that it has any furtherliability, including with respect to future advances by Lenders, under any LoanDocument to which it is a party; or

** **

**8.14        SubordinatedIndebtedness.**

 

There shall occurany default under any Subordinated Indebtedness, or there shall occur any eventthat requires Borrower or any of its Subsidiaries to purchase, redeem orotherwise acquire or offer to purchase, redeem or otherwise acquire all or anyportion of any Subordinated Indebtedness; or Borrower or any of itsSubsidiaries shall for any reasons purchase, redeem or otherwise acquire oroffer to purchase, redeem or otherwise acquire, or make any other payments inrespect of, all or any portion of any Subordinated Indebtedness, except to theextent expressly permitted by subsection 7.5;

** **

**THEN** (i) upon the occurrence of any Event of Defaultdescribed in subsection 8.6 or 8.7, each of (a) the unpaid principalamount of and accrued interest on the Loans, (b) an amount equal to themaximum amount that may at any time be drawn under all Letters of Credit thenoutstanding (whether or not any beneficiary under any such Letter of Creditshall have presented, or shall be entitled at such time to present, the draftsor other documents or certificates required to draw under such Letter ofCredit), and (c) all other Obligations shall automatically becomeimmediately due and payable, without presentment, demand, protest or otherrequirements of any kind, all of which are hereby expressly waived by Borrower,and the obligation of each Lender to make any Loan, the obligation of AdministrativeAgent to issue any Letter of Credit and the right of any Lender to issue anyLetter of Credit hereunder shall thereupon terminate, and (ii) upon theoccurrence and during the continuation of any other Event of Default,Administrative Agent shall, upon the written request or with the writtenconsent of Requisite Lenders, by written notice to Borrower, declare all or anyportion of the amounts described in clauses (a) through (c) above to be, andthe same shall forthwith become, immediately due and payable, and theobligation of each Lender to make any Loan, the obligation of AdministrativeAgent to issue any Letter of Credit and the right of any Lender to issue anyLetter of Credit hereunder shall thereupon terminate; provided that theforegoing shall not affect in any way the obligations of Lenders undersubsection 3.3C(i) or the obligations of Lenders to purchase assignments of anyunpaid Swing Line Loans as provided in subsection 2.1A(iii).

 

Any amountsdescribed in clause (b) above, when received by Administrative Agent, shall beheld by Administrative Agent pursuant to the terms of the Security Agreementand shall be applied as therein provided.

 

Notwithstandinganything contained in the second preceding paragraph, if at any time within 60days after an acceleration of the Loans pursuant to clause (ii) of suchparagraph Borrower shall pay all arrears of interest and all payments onaccount of principal which shall have become due otherwise than as a result ofsuch acceleration (with interest on principal and, to the extent permitted bylaw, on overdue interest, at the rates specified in this Agreement) and allEvents of Default and Potential Events of Default (other than non-payment ofthe principal of and accrued interest on the Loans, in each case which is dueand payable solely by virtue of acceleration) shall be remedied or waivedpursuant to subsection 10.6, then Requisite Lenders, by written notice toBorrower, may at their option rescind and annul such acceleration and itsconsequences; but such action shall not affect any subsequent Event of Defaultor Potential Event of Default or impair any right consequent thereon.  The provisions of this paragraph areintended merely to bind Lenders to a decision which may be made at the electionof Requisite Lenders and are not intended, directly or indirectly, to benefitBorrower, and such provisions shall not at any time be construed so as to grantBorrower the right to require Lenders to rescind or annul any accelerationhereunder or to preclude Administrative Agent or Lenders from exercising any ofthe rights or remedies available to them under any of the Loan Documents, evenif the conditions set forth in this paragraph are met.

 

**Section 9.              ADMINISTRATIVE AGENT**

** **

**9.1          Appointment**.

** **

**A.            Appointment of Administrative Agent.** CIBC is hereby appointed Administrative Agent hereunder and under theother Loan Documents and each Lender hereby authorizes Administrative Agent toact as its administrative agent in accordance with the terms of this Agreementand the other Loan Documents. Administrative Agent agrees to act upon the express conditions containedin this Agreement and the other Loan Documents, as applicable.  The provisions of this Section 9 are solelyfor the benefit of Administrative Agent and Lenders and no Loan Party shallhave any rights as a third party beneficiary of any of the provisionsthereof.  In performing its functionsand duties under this Agreement, Administrative Agent shall act solely as anAdministrative Agent of Lenders and does not assume and shall not be deemed tohave assumed any obligation towards or relationship of agency or trust with orfor Borrower or any of its Subsidiaries.

** **

**B.            Appointmentof Supplemental Collateral Agents.**  It is the purpose of this Agreement and theother Loan Documents that there shall be no violation of any law of anyjurisdiction denying or restricting the right of banking corporations orassociations to transact business as agent or trustee in suchjurisdiction.  It is recognized that incase of litigation under this Agreement or any of the other Loan Documents, andin particular in case of the enforcement of any of the Loan Documents, or incase Administrative Agent reasonably deems that by reason of any present law ofany jurisdiction or future law of any jurisdiction that is enacted it may notexercise any of the rights, powers or remedies granted herein or in any of theother Loan Documents or take any other action which may be desirable ornecessary in connection therewith, it may be necessary that AdministrativeAgent appoint an additional individual or institution as a separate trustee,co-trustee, collateral agent or collateral co-agent (any such additionalindividual or institution being referred to herein individually as a “**SupplementalCollateral Agent**” and collectively as “**Supplemental Collateral Agents**”).

 

If AdministrativeAgent appoints a Supplemental Collateral Agent with respect to any Collateral,(i) each and every right, power, privilege or duty expressed or intended bythis Agreement or any of the other Loan Documents to be exercised by or vestedin or conveyed to Administrative Agent with respect to such Collateral shall beexercisable by and vest in such Supplemental Collateral Agent to the extent,and only to the extent, necessary to enable such Supplemental Collateral Agentto exercise such rights, powers and privileges with respect to such Collateraland to perform such duties with respect to such Collateral, and every covenantand obligation contained in the Loan Documents and necessary to the exercise orperformance thereof by such Supplemental Collateral Agent shall run to and beenforceable by either Administrative Agent or such Supplemental CollateralAgent, and (ii) the provisions of this Section 9 and of subsections 10.2 and10.3 that refer to Administrative Agent shall inure to the benefit of suchSupplemental Collateral Agent and all references therein to AdministrativeAgent shall be deemed to be references to Administrative Agent and/or suchSupplemental Collateral Agent, as the context may require.

 

Should anyinstrument in writing from Borrower or any other Loan Party be required by anySupplemental Collateral Agent so appointed by Administrative Agent for morefully and certainly vesting in and confirming to him or it such rights, powers,privileges and duties, Borrower shall, or shall cause such Loan Party to,execute, acknowledge and deliver any and all such instruments promptly uponrequest by Administrative Agent.  Incase any Supplemental Collateral Agent, or a successor thereto, shall die,become incapable of acting, resign or be removed, all the rights, powers,privileges and duties of such Supplemental Collateral Agent, to the extentpermitted by law, shall vest in and be exercised by Administrative Agent untilthe appointment of a new Supplemental Collateral Agent.

 

**9.2         ****Powers and****Duties; GeneralImmunity**.

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**A.            Powers; Duties Specified**. Each Lender irrevocably authorizes Administrative Agent to take suchaction on such Lender’s behalf and to exercise such powers, rights and remedieshereunder and under the other Loan Documents as are specifically delegated orgranted to Administrative Agent by the terms hereof and thereof, together withsuch powers, rights and remedies as are reasonably incidental thereto.  Administrative Agent shall have only thoseduties and responsibilities that are expressly specified in this Agreement andthe other Loan Documents. Administrative Agent may exercise such powers, rights and remedies andperform such duties by or through its agents or employees.  Administrative Agent shall not have, byreason of this Agreement or any of the other Loan Documents, a fiduciaryrelationship in respect of any Lender; and nothing in this Agreement or any ofthe other Loan Documents, expressed or implied, is intended to or shall be soconstrued as to impose upon Administrative Agent any obligations in respect ofthis Agreement or any of the other Loan Documents except as expressly set forthherein or therein.

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**B.            No Responsibility for CertainMatters**.  Administrative Agent shall not beresponsible to any Lender for the execution, effectiveness, genuineness,validity, enforceability, collectibility or sufficiency of this Agreement orany other Loan Document or for any representations, warranties, recitals orstatements made herein or therein or made in any written or oral statements orin any financial or other statements, instruments, reports or certificates orany other documents furnished or made by Administrative Agent to Lenders or byor on behalf of Borrower to Administrative Agent or any Lender in connectionwith the Loan Documents and the transactions contemplated thereby or for thefinancial condition or business affairs of Borrower or any other Person liablefor the payment of any Obligations, nor shall Administrative Agent be requiredto ascertain or inquire as to the performance or observance of any of theterms, conditions, provisions, covenants or agreements contained in any of theLoan Documents or as to the use of the proceeds of the Loans the use of theLetters of Credit or as to the existence or possible existence of any Event ofDefault or Potential Event of Default. Anything contained in this Agreement to the contrary notwithstanding,Administrative Agent shall not have any liability arising from confirmations ofthe amount of outstanding Loans or the Letter of Credit Usage or the componentamounts thereof.

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**C.            ExculpatoryProvisions**. Neither Administrative Agent nor any of its officers, directors,employees or agents shall be liable to Lenders for any action taken or omittedby Administrative Agent under or in connection with any of the Loan Documentsexcept to the extent caused by Administrative Agent’s gross negligence orwillful misconduct.  AdministrativeAgent shall be entitled to refrain from any act or the taking of any action(including the failure to take an action) in connection with this Agreement orany of the other Loan Documents or from the exercise of any power, discretionor authority vested in it hereunder or thereunder unless and untilAdministrative Agent shall have received instructions in respect thereof fromRequisite Lenders (or such other Lenders as may be required to give suchinstructions under subsection 10.6) and, upon receipt of such instructions fromRequisite Lenders (or such other Lenders, as the case may be), AdministrativeAgent shall be entitled to act or (where so instructed) refrain from acting, orto exercise such power, discretion or authority, in accordance with suchinstructions.  Without prejudice to thegenerality of the foregoing, (i) Administrative Agent shall be entitled torely, and shall be fully protected in relying, upon any communication,instrument or document believed by it to be genuine and correct and to havebeen signed or sent by the proper person or persons, and shall be entitled torely and shall be protected in relying on opinions and judgments of attorneys(who may be attorneys for Borrower and its Subsidiaries), accountants, expertsand other professional advisors selected by it; and (ii) no Lender shallhave any right of action whatsoever against Administrative Agent as a result ofAdministrative Agent acting or (where so instructed) refraining from actingunder this Agreement or any of the other Loan Documents in accordance with theinstructions of Requisite Lenders (or such other Lenders as may be required togive such instructions under subsection 10.6).

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**D.            Administrative Agent Entitled to Actas Lender**.  The agency hereby created shall in no wayimpair or affect any of the rights and powers of, or impose any duties orobligations upon, Administrative Agent in its individual capacity as a Lenderhereunder.  With respect to itsparticipation in the Loans and the Letters of Credit, Administrative Agentshall have the same rights and powers hereunder as any other Lender and mayexercise the same as though it were not performing the duties and functionsdelegated to it hereunder, and the term “Lender” or “Lenders” or any similarterm shall, unless the context clearly otherwise indicates, includeAdministrative Agent in its individual capacity.  Administrative Agent and its Affiliates may accept deposits from,lend money to, acquire equity interests in and generally engage in any kind ofcommercial banking, investment banking, trust, financial advisory or otherbusiness with Borrower or any of its Affiliates as if it were not performingthe duties specified herein, and may accept fees and other consideration fromBorrower for services in connection with this Agreement and otherwise withouthaving to account for the same to Lenders.

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**9.3          Representations and Warranties; NoResponsibility For Appraisal of Creditworthiness**.

 

Each Lenderrepresents and warrants that it has made its own independent investigation ofthe financial condition and affairs of Borrower and its Subsidiaries inconnection with the making of the Loans hereunder and that it has made andshall continue to make its own appraisal of the creditworthiness of Borrowerand its Subsidiaries.  AdministrativeAgent shall not have any duty or responsibility, either initially or on acontinuing basis, to make any such investigation or any such appraisal onbehalf of Lenders or to provide any Lender with any credit or other informationwith respect thereto, whether coming into its possession before the making ofthe Loans or at any time or times thereafter, and Administrative Agent shallnot have any responsibility with respect to the accuracy of or the completenessof any information provided to Lenders.

 

**9.4          Right toIndemnity**.

 

Each Lender, inproportion to its Pro Rata Share, severally agrees to indemnify AdministrativeAgent and the officers, directors, employees, agents, attorneys, professionaladvisors and affiliates of each of them to the extent that any such Personshall not have been reimbursed by Borrower, for and against any and allliabilities, obligations, losses, damages, penalties, actions, judgments,suits, costs, expenses (including reasonable outside counsel fees anddisbursements and reasonable fees and disbursements of any financial advisorengaged by Administrative Agent) or disbursements of any kind or naturewhatsoever which may be imposed on, incurred by or asserted againstAdministrative Agent or and other such Persons in exercising its powers, rightsand remedies or performing its duties of an Administrative Agent hereunder orunder the other Loan Documents or otherwise in its capacity as AdministrativeAgent in any way relating to or arising out of this Agreement or the other LoanDocuments; provided that no Lender shall be liable for any portion ofsuch liabilities, obligations, losses, damages, penalties, actions, judgments,suits, costs, expenses or disbursements resulting from Administrative Agent’sgross negligence or willful misconduct. If any indemnity furnished to Administrative Agent or any other suchPerson for any purpose shall, in the opinion of Administrative Agent, beinsufficient or become impaired, Administrative Agent may call for additionalindemnity and cease, or not commence, to do the acts indemnified against untilsuch additional indemnity is furnished.

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**9.5          SuccessorAdministrative Agent and Successor Swing Line Lender**.

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**A.            SuccessorAdministrative Agent.** Administrative Agent may resign at any time by giving 30 days’ priorwritten notice thereof to Lenders and Borrower, and Administrative Agent may beremoved at any time with or without cause by an instrument or concurrentinstruments in writing delivered to Borrower and Administrative Agent andsigned by Requisite Lenders.  Upon anysuch notice of resignation or any such removal, Requisite Lenders shall havethe right, upon five Business Days’ notice to Borrower, to appoint a successorAdministrative Agent, who shall, unlessan Event of Default has occurred and is continuing, be satisfactory to Borrowerand shall be an unincorporated bank or trust company.  Upon the acceptance of any appointment asAdministrative Agent hereunder by a successor Administrative Agent, thatsuccessor Administrative Agent shall thereupon succeed to and become vestedwith all the rights, powers, privileges and duties of the retiring or removedAdministrative Agent and the retiring or removed Administrative Agent shall bedischarged from its duties and obligations under this Agreement.  After any retiring or removed AdministrativeAgent’s resignation or removal hereunder as Administrative Aogent, theprovisions of this Section 9 shall inure to its benefit as to any actions takenor omitted to be taken by it while it was Administrative Agent under thisAgreement.  Ifno successor Administrative Agent has been appointed by the twentieth (20th)Business Day after the date such notice of resignation was given byAdministrative Agent, then the Administrative Agent's resignation shall becomeeffective and the Lenders shall thereafter perform all the duties of theAdministrative Agent hereunder until such time, if any, as the RequisiteLenders, with the consent of Borrower (as long as no Event of Default hasoccurred and is continuing), appoint a successor administrative agent as providedabove.

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**B.            SuccessorSwing Line Lender.**  Swing Line Lender may resign at any time bygiving 30 days’ prior written notice thereof to Administrative Agent, Lendersand Borrower, and Swing Line Lender may be removed at any time with or withoutcause by an instrument or concurrent instruments in writing delivered toBorrower and Administrative Agent and signed by Requisite Lenders.  In such event (i) Borrower shall prepayany outstanding Swing Line Loans made by the retiring or removed Swing LineLender in its capacity as Swing Line Lender, (ii) upon such prepayment,the retiring or removed Swing Line Lender shall surrender the Swing Line Noteheld by it to Borrower for cancellation, and (iii)  Borrower shall issue anew Swing Line Note to the successor Swing Line Lender substantially in theform of Exhibit XII annexed hereto, in the principal amount of the SwingLine Loan Commitment then in effect and with other appropriate insertions.

 

**9.6          Collateral Documents and Guaranties**.

 

Each Lender herebyfurther authorizes Administrative Agent, on behalf of and for the benefit ofLenders, to enter into each Collateral Document as secured party and to beAdministrative Agent for and representative of Lenders under each of theGuaranties, and each Lender agrees to be bound by the terms of each CollateralDocument and each of the Guaranties; provided that Administrative Agentshall not (i) enter into or consent to any material amendment, modification,termination or waiver of any provision contained in any Collateral Document orany of the Guaranties or (ii) release any Collateral or Subsidiary Guarantor(except as otherwise expressly permitted or required pursuant to the terms ofthis Agreement or the applicable Collateral Document), in each case without theprior consent of Requisite Lenders (or, if required pursuant to subsection10.6, all Lenders); providedfurther, however, that,without further written consent or authorization from Lenders, AdministrativeAgent may execute any documents or instruments necessary to (a) releaseany Lien encumbering any item of Collateral that is the subject of a sale orother disposition of assets permitted by this Agreement or to which RequisiteLenders have otherwise consented, or (b) release any Subsidiary Guarantorfrom the Subsidiary Guaranty if all of the Capital Stock of such SubsidiaryGuarantor is sold to any Person (other than an Affiliate of Borrower) pursuantto a sale or other disposition permitted hereunder or to which RequisiteLenders have otherwise consented or (c) subordinate the Liens of AdministrativeAgent, on behalf of Lenders, to any Liens permitted by subsection 7.2.  Anything contained in any of the LoanDocuments to the contrary notwithstanding, Borrower, Administrative Agent andeach Lender hereby agree that (X) no Lender shall have any right individuallyto realize upon any of the Collateral under any Collateral Document or toenforce any Guaranty, it being understood and agreed that all powers, rightsand remedies under the Collateral Documents and the Guaranties may, and shall,be exercised solely by Administrative Agent for the benefit of Lenders inaccordance with the terms thereof, and (Y) in the event of a foreclosure byAdministrative Agent on any of the Collateral pursuant to a public or privatesale, Administrative Agent or any Lender may be the purchaser of any or all ofsuch Collateral at any such sale and Administrative Agent, as AdministrativeAgent for and representative of Lenders (but not any Lender or Lenders in itsor their respective individual capacities unless Requisite Lenders shallotherwise agree in writing) shall be entitled, for the purpose of bidding andmaking settlement or payment of the purchase price for all or any portion ofthe Collateral sold at any such public sale, to use and apply any of theObligations as a credit on account of the purchase price for any Collateralpayable by Administrative Agent at such sale.

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**9.7          AdministrativeAgent May File Proofsof Claim**.

 

In case of thependency of any receivership, insolvency, liquidation, bankruptcy,reorganization, arrangement, adjustment, composition or other judicialproceeding relative to Borrower or any of the Subsidiaries of Borrower,Administrative Agent (irrespective of whether the principal of any Loan shallthen be due and payable as herein expressed or by declaration or otherwise andirrespective of whether Administrative Agent shall have made any demand onBorrower) shall be entitled and empowered, by intervention in such proceedingor otherwise

 

(i)            tofile and prove a claim for the whole amount of principal and interest owing andunpaid in respect of the Loans and any other Obligations that are owing andunpaid and to file such other papers or documents as may be necessary oradvisable in order to have the claims of Lenders and Agents (including anyclaim for the reasonable compensation, expenses, disbursements and advances ofLenders and Agents and their agents and counsel and all other amounts dueLenders and Agents under subsections 2.3 and 10.2) allowed in such judicial proceeding,and

 

(ii)           tocollect and receive any moneys or other property payable or deliverable on anysuch claims and to distribute the same;

 

and any custodian,receiver, assignee, trustee, liquidator, sequestrator or other similar officialin any such judicial proceeding is hereby authorized by each Lender to makesuch payments to Administrative Agent and, if Administrative Agent shallconsent to the making of such payments directly to Lenders, to pay toAdministrative Agent any amount due for the reasonable compensation, expenses,disbursements and advances of Agents and their agents and counsel, and anyother amounts due Agents under subsections 2.3 and 10.2.

 

Nothing hereincontained shall be deemed to authorize Administrative Agent to authorize or consentto or accept or adopt on behalf of any Lender any plan of reorganization,arrangement, adjustment or composition affecting the Obligations or the rightsof any Lenders or to authorize Administrative Agent to vote in respect of theclaim of any Lender in any such proceeding.

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**Section10.            MISCELLANEOUS**

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**10.1        Assignmentsand Participations in Loans and Letters of Credit**.

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**A.            General.** Subject to subsections 10.1B and 10.1C, each Lender shall have the rightat any time to (i) sell, assign or transfer to any Eligible Assignee, or(ii) sell participations to any Person in, all or any part of itsCommitments or any Loan or Loans made by it or its Letters of Credit orparticipations therein or any other interest herein or in any other Obligationsowed to it; provided that no such sale, assignment, transfer orparticipation shall, without the consent of Borrower, require Borrower to filea registration statement with the Securities and Exchange Commission or applyto qualify such sale, assignment, transfer or participation under thesecurities laws of any state; provided, further, that no suchsale, assignment, or transfer described in clause (i) above shall be effectiveunless and until an Assignment Agreement effecting such sale, assignment ortransfer shall have been accepted by Administrative Agent and recorded in theRegister as provided in subsection 10.1B(ii); provided, further,that no such sale, assignment, or transfer of any Letter of Credit or anyparticipation therein may be made separately from a sale, assignment, transferor participation of a corresponding interest in the Revolving Loan Commitmentand the Revolving Loans of the Lender effecting such sale, assignment, transferor participation; and provided, further, that, anything containedherein to the contrary notwithstanding, except as provided in subsection2.1A(iii) and subsection 10.5, the Swing Line Loan Commitment and the SwingLine Loans of Swing Line Lender may not be sold, assigned or transferred asdescribed in clause (i) above to any Person other than a successor Swing LineLender to the extent contemplated by subsection 9.5.  Except as otherwise provided in this subsection 10.1, no Lendershall, as between Borrower and such Lender, be relieved of any of itsobligations hereunder as a result of any sale, assignment or transfer of, orany granting of participations in, all or any part of its Commitments or theLoans, or participations therein, or the other Obligations owed to such Lender,and such Lender shall remain solely responsible for the performance of suchObligations, and Borrower shall continue to deal solely and directly with suchLender in connection with such Lender’s rights and obligations under thisAgreement.

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**B.            Assignments.**

 

(i)            Amounts and Terms of Assignments.  Each Commitment or Loan may (a) beassigned in any amount to another Lender, or to an Affiliate or Approved Fundof the assigning Lender or another Lender, with the giving of notice toBorrower and Administrative Agent or (b) be assigned in an aggregate amountof not less than $1,000,000 (or such lesser amount as shall constitute theaggregate amount of the Commitments or Loans of the assigning Lender) to anyother Eligible Assignee treating any two or more Approved Funds with the sameinvestment advisor as a single Eligible Assignee with the giving of notice toBorrower and with the consent of Borrower (unless a Potential Event of Defaultor an Event of Default has occurred and is continuing) and Administrative Agent(which consent of Borrower and Administrative Agent shall not be unreasonablywithheld or delayed).  To the extent ofany such assignment in accordance with either clause (a) or (b) above, theassigning Lender shall be relieved of its obligations with respect to itsCommitments or Loans or the portion thereof so assigned.  The parties to each such assignment shallexecute and deliver to Administrative Agent, for its acceptance and recordingin the Register, an Assignment Agreement, together with a processing and recordationfee of $3,500 (provided that (i) no such processing and recordation feeshall be payable if the assignee is an Affiliate of the assignor or a Personunder common management with the assignor, and (ii) only one such fee shall berequired in connection with a simultaneous assignment to a group of ApprovedFunds with the same investment advisor) and such forms (including an administrative questionnaire if theEligible Assignee is not a Lender), certificates or other evidence, if any,with respect to United States federal income tax withholding matters as theassignee under such Assignment Agreement may be required to deliver toAdministrative Agent pursuant to subsection 2.7B(iii)(a).  Upon such execution, delivery, acceptanceand recordation, from and after the effective date specified in such AssignmentAgreement, (y) the assignee thereunder shall be a party hereto and, to theextent that rights and obligations hereunder have been assigned to it pursuantto such Assignment Agreement, shall have the rights and obligations of a Lenderhereunder, and (z) the assigning Lender thereunder shall, to the extentthat rights and obligations hereunder have been assigned by it pursuant to suchAssignment Agreement, relinquish its rights (other than any rights whichsurvive the termination of this Agreement under subsection 10.9B) and bereleased from its obligations under this Agreement (and, in the case of anAssignment Agreement covering all or the remaining portion of an assigningLender’s rights and obligations under this Agreement, such Lender shall ceaseto be a party hereto; provided that, anything contained in any of theLoan Documents to the contrary notwithstanding, if such Lender is the IssuingLender with respect to any outstanding Letters of Credit such Lender shallcontinue to have all rights and obligations of an Issuing Lender with respectto such Letters of Credit until the cancellation or expiration of such Lettersof Credit and the reimbursement of any amounts drawn thereunder).  The Commitments hereunder shall be modifiedto reflect the Commitment of such assignee and any remaining Commitment of suchassigning Lender and, if any such assignment occurs after the issuance of anyNotes hereunder, the assigning Lender shall, upon the effectiveness of suchassignment or as promptly thereafter as practicable, surrender its applicableNotes, if any, to Administrative Agent for cancellation, and thereupon newNotes shall, if so requested by the assignee and/or the assigning Lender inaccordance with subsection 2.1D, be issued to the assignee and/or to theassigning Lender, substantially in the form of Exhibit IX, ExhibitXII or Exhibit XIII annexed hereto, as the case may be, withappropriate insertions, to reflect the new Commitments and/or outstandingRevolving Loans and/or outstanding Term Loans, as the case may be, of theassignee and/or the assigning Lender. Any assignment or transfer by a Lender of rights or obligations underthis Agreement that does not comply with this subsection 10.1B shall be treatedfor purposes of this Agreement as a sale by such Lender of a participation insuch rights and obligations in accordance with subsection 10.1C.

 

(ii)           Acceptance by AdministrativeAgent; Recordation in Register. Upon its receipt of an Assignment Agreement executed by an assigningLender and an assignee representing that it is an Eligible Assignee, togetherwith the processing and recordation fee (if so required) referred to insubsection 10.1B(i) and any forms, certificates or other evidence with respectto United States federal income tax withholding matters that such assignee maybe required to deliver to Administrative Agent pursuant to subsection2.7B(iii)(a), Administrative Agent shall, if Administrative Agent (and ifnecessary, Borrower) has consented to the assignment evidenced thereby (in eachcase to the extent such consent is required pursuant to subsection 10.1B(i)),(a) accept such Assignment Agreement by executing a counterpart thereof asprovided therein (which acceptance shall evidence any required consent ofAdministrative Agent to such assignment), (b) record the information containedtherein in the Register, and (c) give prompt notice thereof toBorrower.  Administrative Agent shallmaintain a copy of each Assignment Agreement delivered to and accepted by it asprovided in this subsection 10.1B(ii).

 

(iii)          Consentby Borrower.  If the consent ofBorrower to an assignment or to an Eligible Assignee is required hereunder(including a consent to an assignment which does not meet the minimumassignment thresholds specified in subsection 10.1B(i)), Borrower shall bedeemed to have given its consent five Business Days after the date noticethereof has been delivered by the assigning Lender (through AdministrativeAgent) unless such consent is expressly refused by Borrower prior to such fifthBusiness Day.

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**C.            Participations.**  Any Lender may, without the consent of, ornotice to, Borrower or Administrative Agent, sell participations to one or morebanks or other entities (a “**Participant**”)in all or a portion of such Lender’s rights and/or obligations under thisAgreement (including all or a portion of its Commitment and/or the Loans owingto it); provided that (i) such Lender’s obligations under thisAgreement shall remain unchanged, (ii) such Lender shall remain solelyresponsible to the other parties hereto for the performance of suchobligations, and (iii) Borrower, Administrative Agent and the otherLenders shall continue to deal solely and directly with such Lender inconnection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant towhich a Lender sells such a participation shall provide that such Lender shallretain the sole right to enforce the Loan Documents and to approve anyamendment, modification or waiver of any provision of the Loan Documents; providedthat such agreement or instrument may provide that such Lender will not,without the consent of such Participant, agree to any amendment, modificationor waiver that affects such Participant if such amendment, modification orwaiver requires the unanimous written consent of all Lenders pursuant tosubsection 10.6.  Subject to subsection10.1D, Borrower agrees that each Participant shall be entitled to the benefitsof subsections 2.6D, 2.7, and 3.6 to the same extent as if it were a Lender andhad acquired its interest by assignment pursuant to this subsection 10.1C; provided,however, that in no event shall Borrower be obligated to make anypayment with respect to such subsections which is greater than the amount thatBorrower would have paid to the Lender had no such participation beensold.  To the extent permitted by law,each Participant also shall be entitled to the benefits of subsection 10.4 asthough it were a Lender, provided such Participant agrees to be subject tosubsection 10.5 as though it were a Lender if any amounts outstanding underthis Agreement are due and unpaid, or shall have been declared or shall havebecome due and payable upon the occurrence of an Event of Default, eachparticipant shall be deemed to have the right of set-off in respect of itsparticipating interest in amounts owing under this Agreement to the same extentas if the amount of its participating interest were owing directly to it as aLender under this Agreement.

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**D.           **AParticipant shall not be entitled to receive any greater payment undersubsections 2.6D, 2.7, and 3.6 than the applicable Lender would have beenentitled to receive with respect to the participation sold to such Participant,unless the sale of the participation to such Participant is made withBorrower’s prior written consent.  AParticipant that would be a Non-US Lender if it were a Lender shall not beentitled to the benefits of subsection 2.7 unless Borrower is notified ofthe participation sold to such Participant and such Participant agrees, for thebenefit of Borrower, to comply with subsection 2.7B(iii) as though it were aLender.

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**E.             Pledgesand Assignments.**

 

(i)            AnyLender may at any time pledge or assign a security interest in all or anyportion of its Loans, and the other Obligations owed to such Lender, to secureobligations of such Lender, including, without limitation, any pledge orassignment to secure obligations to any Federal Reserve Bank and; providedthat (a) no Lender shall, as between Borrower and such Lender, be relievedof any of its obligations hereunder as a result of any such assignment orpledge, (b) in no event shall any assignee or pledgee be considered to bea “Lender” or be entitled to require the assigning Lender to take or omit totake any action hereunder and (c) any Lender that is a Fund may pledge itsNotes to its trustee for the benefit of its investors.

 

(ii)           AnyLender which is a Fund may pledge its Notes to its trustee for the benefit ofits investors.

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**F.             Information.** Each Lender may furnish any information concerning Borrower and itsSubsidiaries in the possession of that Lender from time to time to assigneesand participants (including prospective assignees and participants), subject tosubsection 10.19.

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**G.            Representations of Lenders.** Each Lender listed on the signature pages hereof hereby represents andwarrants (i) that it is an Eligible Assignee described in clause (A) of thedefinition thereof; (ii) that it has experience and expertise in the making ofloans such as the Loans; and (iii) that it will make its Loans for its ownaccount in the ordinary course of its business and without a present view todistribution of such Loans within the meaning of the Securities Act or theExchange Act or other federal securities laws (it being understood that,subject to the provisions of this subsection 10.1, the disposition of suchLoans or any interests therein shall at all times remain within its exclusivecontrol).  Each Lender that becomes aparty hereto pursuant to an Assignment Agreement shall be deemed to agree thatthe representations and warranties of such Lender contained in Section 2(c) ofsuch Assignment Agreement are incorporated herein by this reference.

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**10.2        Expenses.**

 

Whether or not thetransactions contemplated hereby shall be consummated, Borrower agrees to paypromptly (i) all of the reasonable costs and expenses of preparation bythe Administrative Agent of the Loan Documents and any consents, amendments,waivers or other modifications thereto; (ii) all of the costs of furnishingall requisite opinions by counsel for Borrower (including any opinionsreasonably requested by Lenders as to any legal matters arising hereunder) andof Borrower’s performance of and compliance with all agreements and conditionson its part to be performed or complied with under this Agreement and the otherLoan Documents including with respect to confirming compliance withenvironmental, insurance and solvency requirements; (iii) all of thereasonable fees, expenses and disbursements of counsel to Administrative Agentin connection with the negotiation, preparation, execution and administrationof the Loan Documents and any consents, amendments, waivers or othermodifications thereto and any other documents or matters requested by Borrower;(iv) all of the reasonable costs and expenses of creating and perfectingLiens in favor of Administrative Agent on behalf of Lenders pursuant to anyCollateral Document, including filing and recording fees, expenses and taxes,stamp or documentary taxes, search fees, title insurance premiums, andreasonable fees, expenses and disbursements of counsel to Administrative Agentand of counsel providing any opinions that Administrative Agent or RequisiteLenders may request in respect of the Collateral Documents or the Liens createdpursuant thereto; (v) all of the reasonable costs and expenses (includingthe reasonable fees, expenses and disbursements of any environmental or otherconsultants, advisors and agents employed or retained by Administrative Agentor its counsel) of obtaining and reviewing any environmental audits or reportsprovided for as a result of its due diligence under subsection 4.1L or 6.7B;(vi) the custody or preservation of any of the Collateral; (vii) allother reasonable costs and expenses incurred by Administrative Agent inconnection with the syndication of the Commitments and the negotiation,preparation and execution of the Loan Documents and any consents, amendments,waivers or other modifications thereto and the transactions contemplatedthereby; and (viii) after the occurrence of an Event of Default, all costsand expenses, including reasonable attorneys’ fees (including allocated costsof internal counsel) and costs of settlement, incurred by Administrative Agentand Lenders in enforcing any Obligations of or in collecting any payments duefrom any Loan Party hereunder or under the other Loan Documents by reason ofsuch Event of Default (including in connection with the sale of, collectionfrom, or other realization upon any of the Collateral or the enforcement of theSubsidiary Guaranty) or in connection with any refinancing or restructuring ofthe credit arrangements provided under this Agreement in the nature of a“work-out” or pursuant to any insolvency or bankruptcy proceedings.

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**10.3        Indemnity**.

 

In addition to thepayment of expenses pursuant to subsection 10.2, whether or not thetransactions contemplated hereby shall be consummated, Borrower agrees todefend (subject to Indemnitees’ selection of counsel), indemnify, pay and holdharmless Administrative Agent and Lenders, and the officers, directors,employees, counsel, agents, representatives, advisors and affiliates ofAdministrative Agent and Lenders (collectively called the “**Indemnitees**”), from andagainst any and all Indemnified Liabilities (as hereinafter defined); providedthat Borrower shall not have any obligation to any Indemnitee hereunder withrespect to any Indemnified Liabilities to the extent such IndemnifiedLiabilities arise solely from the gross negligence or willful misconduct of thatIndemnitee as determined by a final judgment of a court of competentjurisdiction.

 

As used herein, “**IndemnifiedLiabilities**” means, collectively, any and all liabilities,obligations, losses, damages (including natural resource damages), penalties,actions, judgments, suits, claims (including Environmental Claims), costs(including the costs of any investigation, study, sampling, testing, abatement,cleanup, removal, remediation or other response action necessary to remove,remediate, clean up or abate any Hazardous Materials Activity), reasonableexpenses and disbursements of any kind or nature whatsoever (including thereasonable fees and disbursements of counsel for Indemnitees in connection withany investigative, administrative or judicial proceeding commenced orthreatened by any Person, whether or not any such Indemnitee shall bedesignated as a party or a potential party thereto, and any fees or expensesincurred by Indemnitees in enforcing this indemnity), whether direct, indirector consequential and whether based on any federal, state or foreign laws,statutes, rules or regulations (including securities and commercial laws,statutes, rules or regulations and Environmental Laws), on common law orequitable cause or on contract or otherwise, that may be imposed on, incurredby, or asserted against any such Indemnitee, in any manner relating to orarising out of (i) this Agreement or the other Loan Documents or thetransactions contemplated hereby or thereby (including Lenders’ agreement tomake the Loans hereunder or the use or intended use of the proceeds thereof orthe issuance of Letters of Credit hereunder or the use or intended use of anythereof, or any enforcement of any of the Loan Documents (including any saleof, collection from, or other realization upon any of the Collateral or theenforcement of the Subsidiary Guaranty); or (ii) any Environmental Claim or anyHazardous Materials Activity relating to or arising from, directly orindirectly, any past or present activity, operation, land ownership, orpractice of Borrower or any of its Subsidiaries.

 

To the extent thatthe undertakings to defend, indemnify, pay and hold harmless set forth in thissubsection 10.3 may be unenforceable in whole or in part because they areviolative of any law or public policy, Borrower shall contribute the maximumportion that it is permitted to pay and satisfy under applicable law to thepayment and satisfaction of all Indemnified Liabilities incurred by Indemniteesor any of them.

** **

**10.4        Set-Off;Security Interest in Deposit Accounts**.

 

In addition to anyrights now or hereafter granted under applicable law and not by way oflimitation of any such rights, upon the occurrence of any Event of Default eachLender is hereby authorized by Borrower at any time or from time to time,without notice to Borrower or to any other Person, any such notice being herebyexpressly waived, to set off and to appropriate and to apply any and alldeposits or other amounts held by any Lender for the credit or account ofBorrower (general or special, including Indebtedness evidenced by certificatesof deposit, whether matured or unmatured, but not including trust accounts) andany other Indebtedness at any time held or owing by that Lender or anyAffiliate of such Lender to or for the credit or the account of Borrower andeach other Loan Party against and on account of the obligations and liabilitiesof Borrower and each other Loan Party to that Lender (or any Affiliate of suchLender) or to any other Lender (or any Affiliate of any other Lender) underthis Agreement, the Letters of Credit and participations therein and the otherLoan Documents, including all claims of any nature or description arising outof or connected with this Agreement, the Letters of Credit and participationstherein or any other Loan Document, irrespective of whether or not that Lendershall have made any demand hereunder.

** **

**10.5        Ratable Sharing**.

 

Lenders herebyagree among themselves that if any of them shall, whether by voluntary payment(other than a voluntary prepayment of Loans made and applied in accordance withthe terms of this Agreement), by realization upon security, through theexercise of any right of set-off or banker’s lien, by counterclaim or crossaction or by the enforcement of any right under the Loan Documents orotherwise, or as adequate protection of a deposit treated as cash collateralunder the Bankruptcy Code, receive payment or reduction of a proportion of theaggregate amount of principal, interest, amounts payable in respect of Lettersof Credit, fees and other amounts then due and owing to that Lender hereunderor under the other Loan Documents (collectively, the “**Aggregate Amounts Due**” tosuch Lender) that is greater than the proportion received by any other Lenderin respect of the Aggregate Amounts Due to such other Lender hereunder, thenthe Lender receiving such proportionately greater payment shall (i) notifyAdministrative Agent and each other Lender of the receipt of such payment and(ii) apply a portion of such payment to purchase participations (which itshall be deemed to have purchased from each seller of a participationsimultaneously upon the receipt by such seller of its portion of such payment)in the Aggregate Amounts Due to the other Lenders so that all such recoveriesof Aggregate Amounts Due shall be shared by all Lenders in proportion to theAggregate Amounts Due to them hereunder; provided that if all or part ofsuch proportionately greater payment received by such purchasing Lender isthereafter recovered from such Lender upon the bankruptcy or reorganization ofBorrower or otherwise (and whether by litigation, demand, settlement orotherwise), those purchases shall be rescinded and the purchase prices paid forsuch participations shall be returned to such purchasing Lender ratably to theextent of such recovery, but without interest. Borrower expressly consents to the foregoing arrangement and agrees thatany holder of a participation so purchased may exercise any and all rights ofbanker’s lien, set-off or counterclaim with respect to any and all monies owingby Borrower to that holder with respect thereto as fully as if that holder wereowed the amount of the participation held by that holder.

** **

**10.6        Amendments and Waivers**.

 

No amendment,modification, termination or waiver of any provision of this Agreement or ofthe Notes or of any of the other Loan Documents, and no consent to anydeparture by Borrower herefrom or therefrom, shall in any event be effectivewithout the written concurrence of Requisite Lenders; unless otherwise providedelsewhere in this Agreement; provided that:

 

(a)           any such amendment, modification,termination, waiver or consent which:

 

(i)            postpones the date (except inaccordance with subsection 2.10) or reduces the amount of any scheduled paymentof principal of any of the Loans;

 

(ii)           postpones the date (except inaccordance with subsection 2.10) on which any interest or any fees are payableor reduces the amount of any interest or any fees payable hereunder; or

 

(iii)          amends,modifies, terminates or waives any provision of subsection 2.2 that decreasesthe interest rate borne by Loans of any Class (other than any waiver of anyincrease in the interest rate applicable to such Loans pursuant to subsection2.2E) or the percentages set forth in the definitions of “Applicable Base RateMargin” and “Applicable LIBOR Margin”;

 

shall be effectiveonly if evidenced by the written concurrence of all Lenders of the affectedClass (and not Requisite Lenders);

 

(b)           any such amendment, modification,termination, waiver or consent which:

 

(i)            changesin any manner the definition of “Pro Rata Share”, the definition of “Class”,the definition of “Requisite Class Lenders” or the definition of “RequisiteLenders”;

 

(ii)           changesin any manner any provision of this Agreement which, by its terms, expresslyrequires the approval or concurrence of all Lenders;

 

(iii)          releasesany Lien granted in favor of Administrative Agent with respect to all orsubstantially all of the Collateral other than in accordance with the terms of theLoan Documents;

 

(iv)          releasesany material Subsidiary Guarantor from its obligations under the SubsidiaryGuaranty, in each case other than in accordance with the terms of the LoanDocuments; or

 

(v)           changesin any manner the provisions contained in subsection 8.1 or this subsection 10.6;

shall be effective onlyif evidenced by the written concurrence of all Lenders; and

 

(c)           subject to the provisions ofsubsections 10.6(a) and (b), any other amendment relating to subsection 2.1 or2.2 that relates solely to matters affecting only one Class of Lenders and notany other Class shall be effective only if evidenced by the written concurrenceof Requisite Class Lenders for such affected Class (and not Requisite Lenders).

 

Inaddition,

 

(1)           no amendment, modification,termination or waiver of any provision of any Note shall be effective withoutthe written concurrence of the Lender that is the holder of that Note and noincrease or extension of any Commitment of any Lender shall be effectivewithout the written concurrence of such Lender;

 

(2)           no amendment, modification,termination or waiver of any provision of subsection 2.1A(ii) or of any otherprovision of this Agreement relating to the Swing Line Loan Commitment or theSwing Line Loans shall be effective without the written concurrence of SwingLine Lender; and

 

(3)           no amendment, modification,termination or waiver of any provision of Section 9 or of any other provisionof this Agreement that by its terms, expressly requires the approval orconcurrence of Administrative Agent shall be effective without the writtenconcurrence of Administrative Agent.

 

AdministrativeAgent may, but shall have no obligation to, with the concurrence of any Lender,execute amendments, modifications, waivers or consents on behalf of thatLender.  Any waiver or consent shall beeffective only in the specific instance and for the specific purpose for whichit was given.  No notice to or demand onBorrower in any case shall entitle Borrower to any other or further notice ordemand in similar or other circumstances. Any amendment, modification, termination, waiver or consent effected inaccordance with this subsection 10.6 shall be binding upon each Lender at thetime outstanding, each future Lender and, if signed by Borrower, on Borrower.  Notwithstanding anything contained herein tothe contrary, as among Lenders and Administrative Agent in connection with theexercise of remedies under any of Loan Documents, the written concurrence ofRequisite Lenders shall be required for Administrative Agent to execute proxyrights in the election of the board of directors of any Loan Party owning realproperty or to acquire any ownership interest in real property of any LoanParty.

** **

**10.7        Independence of Covenants**.

 

All covenantshereunder shall be given independent effect so that if a particular action orcondition is not permitted by any of such covenants, the fact that it would bepermitted by an exception to, or would otherwise be within the limitations of,another covenant shall not avoid the occurrence of an Event of Default orPotential Event of Default if such action is taken or condition exists.

** **

**10.8        Notices;Effectiveness of Signatures**.

 

Unless otherwisespecifically provided herein, any notice or other communication herein requiredor permitted to be given shall be in writing and may be personally served,telexed or sent by telefacsimile or United States mail or courier service andshall be deemed to have been given when delivered in person or by courierservice, upon receipt of telefacsimile or telex, or three Business Days afterdepositing it in the United States mail with postage prepaid and properlyaddressed; provided that notices to Administrative Agent and Borrowershall not be effective until received. For the purposes hereof, the address of each party hereto shall be asset forth under such party’s name on the signature pages hereof or (i) asto Borrower and Administrative Agent, such other address as shall be designatedby such Person in a written notice delivered to the other parties hereto and(ii) as to each other party, such other address as shall be designated bysuch party in a written notice delivered to Administrative Agent.  Electronic mail may be used to distributeroutine communications, such as financial statements and other information; provided,however, that no signature with respect to any notice, request,agreement, waiver, amendment or other document or any notice that is intendedto have binding effect may be sent by electronic mail.

 

Loan Documents andnotices under the Loan Documents may be transmitted and/or signed byfacsimile.  The effectiveness of anysuch documents and signatures shall, subject to applicable law, have the sameforce and effect as an original copy with manual signatures and shall bebinding on all Loan Parties, Agents and Lenders.  Administrative Agent may also require that any such documents andsignature be confirmed by a manually-signed copy thereof; provided, however,that the failure to request or deliver any such manually-signed copy shall notaffect the effectiveness of any facsimile document or signature.

** **

**10.9        Survival of Representations, Warranties andAgreements**.

** **

**A.           **All representations, warranties and agreements madeherein shall survive the execution and delivery of this Agreement and themaking of the Loans and the issuance of the Letters of Credit hereunder.  For the avoidance of doubt, allrepresentations and warranties made herein must be true only at the time suchrepresentation or warranty was made or deemed to have been made.

** **

**B.           **Notwithstandinganything in this Agreement or implied by law to the contrary, the agreements ofBorrower set forth in subsections 2.6D, 2.7, 3.5A, 3.6, 10.2, 10.3, 10.4, 10.17and 10.18 and the agreements of Lenders set forth in subsections 9.2C, 9.4,10.5 and 10.18 shall survive the payment of the Loans, the cancellation orexpiration of the Letters of Credit and the reimbursement of any amounts drawnthereunder, and the termination of this Agreement.

** **

**10.10      Failure or Indulgence Not Waiver; RemediesCumulative**.

 

No failure ordelay on the part of Administrative Agent or any Lender in the exercise of anypower, right or privilege hereunder or under any other Loan Document shallimpair such power, right or privilege or be construed to be a waiver of anydefault or acquiescence therein, nor shall any single or partial exercise ofany such power, right or privilege preclude other or further exercise thereofor of any other power, right or privilege. All rights and remedies existing under this Agreement and the other LoanDocuments are cumulative to, and not exclusive of, any rights or remediesotherwise available.

** **

**10.11      Marshalling; Payments Set Aside**.

 

NeitherAdministrative Agent nor any Lender shall be under any obligation to marshalany assets in favor of Borrower or any other party or against or in payment ofany or all of the Obligations.  To theextent that Borrower makes a payment or payments to Administrative Agent orLenders (or to Administrative Agent for the benefit of Lenders), or AdministrativeAgent or Lenders enforce any security interests or exercise their rights ofsetoff, and such payment or payments or the proceeds of such enforcement orsetoff or any part thereof are subsequently invalidated, declared to befraudulent or preferential, set aside and/or required to be repaid to atrustee, receiver or any other party under any bankruptcy law, any other stateor federal law, common law or any equitable cause (whether by litigation,demand, settlement or otherwise), then, to the extent of such recovery, theobligation or part thereof originally intended to be satisfied, and all Liens,rights and remedies therefor or related thereto, shall be revived and continuedin full force and effect as if such payment or payments had not been made or suchenforcement or setoff had not occurred.

** **

**10.12      Severability**.

 

In case anyprovision in or obligation under this Agreement or the Notes shall be invalid,illegal or unenforceable in any jurisdiction, the validity, legality andenforceability of the remaining provisions or obligations, or of such provisionor obligation in any other jurisdiction, shall not in any way be affected orimpaired thereby.

** **

**10.13      Obligations Several; Independent Nature ofLenders’ Rights**.

 

The obligations ofLenders hereunder are several and no Lender shall be responsible for theobligations or Commitments of any other Lender hereunder.  Nothing contained herein or in any otherLoan Document, and no action taken by Lenders pursuant hereto or thereto, shallbe deemed to constitute Lenders, or Lenders and Borrower, as a partnership, anassociation, a joint venture or any other kind of entity. The amounts payableat any time hereunder to each Lender shall be a separate and independent debt,and each Lender shall be entitled to protect and enforce its rights arising outof this Agreement and it shall not be necessary for any other Lender to bejoined as an additional party in any proceeding for such purpose.

** **

**10.14      Headings**.

 

Section andsubsection headings in this Agreement are included herein for convenience ofreference only and shall not constitute a part of this Agreement for any otherpurpose or be given any substantive effect.

** **

**10.15      Applicable Law**.

** **

**THIS AGREEMENT AND THE RIGHTS ANDOBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BECONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OFNEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATEOF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.**

** **

**10.16      Successors and Assigns**.

 

The provisions ofthis Agreement shall be binding upon and inure to the benefit of the partieshereto and their respective successors and assigns permitted hereby, exceptthat Borrower may not assign or otherwise transfer any of its rights orobligations hereunder without the prior written consent of each Lender (and anyattempted assignment or transfer by Borrower without such consent shall be nulland void).  Nothing in this Agreement,expressed or implied, shall be construed to confer upon any Person (other thanthe parties hereto, their respective successors and assigns permitted herebyand, to the extent expressly contemplated hereby, Affiliates of AdministrativeAgent and Affiliates of Lenders) any legal or equitable right, remedy or claimunder or by reason of this Agreement.

** **

**10.17      Consent toJurisdiction and Service of Process**.

** **

**ALL JUDICIAL PROCEEDINGS BROUGHTAGAINST BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOANDOCUMENT, OR ANY OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERALCOURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK.  BY EXECUTING AND DELIVERING THIS AGREEMENT,BORROWER, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY**

** **

**(I)            ACCEPTS GENERALLY ANDUNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;**

** **

**(II)           WAIVES ANY DEFENSE OF *FORUM NONCONVENIENS*;**

** **

**(III)         AGREES THAT SERVICE OF ALL PROCESS INANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIEDMAIL, RETURN RECEIPT REQUESTED, TO BORROWER AT ITS ADDRESS PROVIDED INACCORDANCE WITH SUBSECTION 10.8;**

** **

**(IV)         AGREES THAT SERVICE AS PROVIDED INCLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER BORROWERIN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVEAND BINDING SERVICE IN EVERY RESPECT;**

** **

**(V)          AGREES THAT LENDERS RETAIN THE RIGHTTO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGSAGAINST BORROWER IN THE COURTS OF ANY OTHER JURISDICTION; AND**

** **

**(VI)         AGREES THAT THE PROVISIONS OF THISSUBSECTION 10.17 RELATING TO JURISDICTION AND VENUE SHALL BE BINDING ANDENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERALOBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.**

** **

**10.18      Waiver ofJury Trial**.

 

EACH OF THEPARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO AJURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THISAGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THEMRELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWERRELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver is intended to be all-encompassing of alldisputes that may be filed in any court and that relate to the subject matterof this transaction, including contract claims, tort claims, breach of dutyclaims and all other common law and statutory claims.  Each party hereto acknowledges that this waiver is a materialinducement to enter into a business relationship, that each has already reliedon this waiver in entering into this Agreement, and that each will continue torely on this waiver in their related future dealings.  Each party hereto further warrants and represents that it hasreviewed this waiver with its legal counsel and that it knowingly andvoluntarily waives its jury trial rights following consultation with legalcounsel.  THIS WAIVER IS IRREVOCABLE,MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BYA MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 ANDEXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANYSUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENTOR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTSRELATING TO THE LOANS MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a writtenconsent to a trial by the court.

** **

**10.19      Confidentiality**.

 

Each Lender shallhold all non-public information obtained pursuant to the requirements of thisAgreement that has been identified in writing as confidential by Borrower inaccordance with such Lender’s customary procedures for handling confidentialinformation of this nature and in accordance with safe and sound bankingpractices, it being understood and agreed by Borrower that in any event aLender may make disclosures (a) to its and its Affiliates’ directors,officers, employees and agents, including accountants, legal counsel and otheradvisors (it being understood that the Persons to whom such disclosure is madewill be informed of the confidential nature of such information, instructed tokeep such information confidential and will be under a duty to keep suchinformation confidential on the same basis as contained in this subsection10.19), (b) to the extent requested by any Government Authority,(c) to the extent required by applicable laws or regulations or by anysubpoena or similar legal process, (d) to any other party to thisAgreement, (e) to the extent necessary in connection with the exercise ofany remedies hereunder or any suit, action or proceeding relating to thisAgreement or the enforcement of rights hereunder, (f) subject to anagreement containing provisions substantially the same as those of thissubsection 10.19, to (i) any Eligible Assignee of or participant in, orany prospective Eligible Assignee of or Participant in, any of its rights orobligations under this Agreement or (ii) any direct or indirectcontractual counterparty or prospective counterparty (or such contractualcounterparty’s or prospective counterparty’s professional advisor) to anycredit derivative transaction relating to obligations of Borrower,(g) with the consent of Borrower, (h) to the extent such information(i) becomes publicly available other than as a result of a breach of thissubsection 10.19, or (ii) becomes available to Administrative Agent or anyLender on a nonconfidential basis from a source other than Borrower, or(i) to the National Association of Insurance Commissioners or any othersimilar organization or any nationally recognized rating agency that requiresaccess to information about a Lender’s or its Affiliates’ investment portfolioin connection with ratings issued with respect to such Lender or its Affiliatesand that no written or oral communications from counsel to an Agent and noinformation that is or is designated as privileged or as attorney work productmay be disclosed to any Person unless such Person is a Lender or a participanthereunder; provided that, unless specifically prohibited by applicablelaw or court order, each Lender shall notify Borrower of any request by anyGovernment Authority or representative thereof (other than any such request inconnection with any routine regulatory examination of such Lender by suchgovernment authority) for disclosure of any such non-public information priorto disclosure of such information; and provided, further, that inno event shall any Lender be obligated or required to return any materialsfurnished by Borrower or any of its Subsidiaries.  Notwithstanding anything contained herein to the contrary,Borrower understands and agrees that Administrative Agent and each of theinstitutions identified as “Lead Arranger,” “Co-Lead Arranger,”“Co-Documentation Agent” or “Co-Syndication Agent” on the title page to thisAgreement may make customary disclosures of otherwise public information foradvertising and “league table” purposes.

** **

**10.20      Co-Lead Arranger, Bookrunner, Syndication Agent andCo-Documentation Agent**.

 

None of the institutionsidentified as “Co-Lead Arranger”, “bookrunner” “Syndication Agent” or“Co-Documentation Agent” on the title page to this Agreement shall have anyobligations, liabilities or duties under this Agreement other than thoseapplicable to a Lender (but only if such institution is a Lender) as such, andno such institution shall have or be deemed to have any fiduciary relationshipwith any Lender.  Each Lenderacknowledges that it has not relied, and will not rely, on any such institutionin deciding to enter into this Agreement or in taking or not taking any actionhereunder.

** **

**10.21      Counterparts; Effectiveness**.

 

This Agreement andany amendments, waivers, consents or supplements hereto or in connectionherewith may be executed in any number of counterparts and by different partieshereto in separate counterparts, each of which when so executed and deliveredshall be deemed an original, but all such counterparts together shallconstitute but one and the same instrument; signature pages may be detached frommultiple separate counterparts and attached to a single counterpart so that allsignature pages are physically attached to the same document.  This Agreement shall become effective uponthe execution of a counterpart hereof by each of the parties hereto and receiptby Borrower and Administrative Agent of written or telephonic notification ofsuch execution and authorization of delivery thereof.

 

(remainder of pageintentionally left blank)

 

**INWITNESS WHEREOF**, the parties hereto have caused thisAgreement to be duly executed and delivered by their respective officersthereunto duly authorized as of the date first written above.

** **
|   | **BORROWER:**                                                                                                                                                               |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | **LODGENET ENTERTAINMENT  CORPORATION**                                                                                                                                     |
|   |                                                                                                                                                                        |   |
|   | By:                                                                                                                                                                         | /s/ |   |
|   | Name:  Title:                                                                                                                                                               | Gary H. Ritondaro  Chief Financial Officer |
|   |                                                                                                                                                                        |
|   | Notice Address:                                                                                                                                                             |
|   |                                                                                                                                                                        |   |
|   | LODGENET ENTERTAINMENT  CORPORATION  3900 West Innovation Street  Sioux Falls, South Dakota  57101  Attn:  Chief Financial Officer  Facsimile No.: (606) 988-1771 |
|   |
|        |                                                                                                                                                                             |  |  |  |

 

** **
|   | **ADMINISTRATIVE AGENT:**                                                                                                                             |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                  |
|   | **CANADIAN IMPERIAL BANK  OF COMMERCE,**as  Administrative Agent                                                                                      |
|   |                                                                                                                                                  |   |
|   |                                                                                                                                                  |   |
|   | By:                                                                                                                                              | /s/ |   |
|   | Name:  Title:                                                                                                                                         | Dean J. Decker  Managing Director |
|   |                                                                                                                                                  | CIBC World Markets  Corp., as AGENT |
|   |                                                                                                                                                  |   |
|   | Notice Address:                                                                                                                                       |   |
|   |                                                                                                                                                  |   |
|   | CANADIAN IMPERIAL BANK OF COMMERCE  425 Lexington Avenue  New York, New York 10017  Attn.:  Agency Services Dept.  Facsimile No.: (212) 856-3799 |
|   |
|   |                                                                                                                                                  |   |
|   | With a Copy to:                                                                                                                                       |   |
|   |                                                                                                                                                  |   |
|   | CIBC WORLD MARKETS  CORP.  350 South Grand Avenue, Suite 2600  Los Angeles, California 90071                                                          |
|        |                                                                                                                                                       |  |  |  |  |  |

** **

 
|   | **SYNDICATION  AGENT:**                                                                                                                    |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                       |
|   | **BEAR  STEARNS CORPORATE LENDING INC.****,**as Syndication Agent                                                                          |
|   |                                                                                                                                       |   |
|   |                                                                                                                                       |   |
|   | By:                                                                                                                                        | /s/ |   |
|   | Name:  Title:                                                                                                                              | Keith Barnish  Executive Vice President |
|   |                                                                                                                                       |
|   | Notice Address:                                                                                                                            |   |
|   |                                                                                                                                       |   |
|   | BEAR, STEARNS & CO.  245 Park Avenue, 4th Floor  New York, New York 10167  Attn.: Ms. Gloria Dombrowski  Facsimile No.: (212) 272-4844 |
|   |
|   |
|   |                                                                                                                                       |
|   | With a Copy to:                                                                                                                            |   |
|   |                                                                                                                                       |   |
|   | BEAR, STEARNS & CO.  245 Park Avenue, 4th Floor  New York, New York 10167  Attn.: Kevin Cullen  Facsimile No.: (212) 272-9184          |
|        |                                                                                                                                            |  |  |  |  |  |  |

** **

 
|   | **CO-LEAD  ARRANGERS****:**                                                                                                                           |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                  |
|   | **CIBC  WORLD MARKETS CORP.****,**as  Co-Lead Arranger                                                                                                |
|   |                                                                                                                                                  |   |
|   |                                                                                                                                                  |   |
|   | By:                                                                                                                                                   | /s/ |   |
|   | Name:  Title:                                                                                                                                         | Dean J. Decker  Managing Director |
|   |                                                                                                                                                  |
|   | Notice Address:                                                                                                                                       |   |
|   |                                                                                                                                                  |   |
|   | CIBC WORLD MARKETS  CORP. 350 South Grand Avenue, Suite 2600  Los Angeles, California 90071                                                      |
|   |                                                                                                                                                  |
|   |                                                                                                                                                  |
|   | With a Copy to:                                                                                                                                       |
|   |                                                                                                                                                  |
|   | CANADIAN IMPERIAL BANK OF COMMERCE  425 Lexington Avenue  New York, New York 10017  Attn.:  Agency Services Dept.  Facsimile No.: (212) 856-3799 |
|        |                                                                                                                                                       |  |  |  |  |  |

 

 
|   | **BEAR  STEARNS & CO. INC.****,**as  Co-Lead Arranger                                                                                        |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                             |   |
|   |                                                                                                                                             |   |
|   | By:                                                                                                                                              | /s/ |   |
|   | Name:  Title:                                                                                                                                    | Keith Barnish  Senior Managing Director |
|   |                                                                                                                                             |
|   | Notice Address:                                                                                                                                  |   |
|   |                                                                                                                                             |   |
|   | BEAR, STEARNS & CO.  INC.  245 Park Avenue, 4th Floor  New York, New York 10167  Attn.: Ms. Gloria Dombrowski  Facsimile No.: (212) 272-4844 |
|   |                                                                                                                                             |
|   |                                                                                                                                             |   |
|   | With a Copy to:                                                                                                                                  |   |
|   |                                                                                                                                             |   |
|   | BEAR, STEARNS & CO.  INC.  245 Park Avenue, 4th Floor  New York, New York 10167  Attn.: Kevin Cullen  Facsimile No.: (212) 272-4844          |
|        |                                                                                                                                                  |  |  |  |  |  |  |

 

 
|   | **LENDERS:**                                                                                                           |
|--------|------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                   |
|   | **CIBC INC.,**as Swing Line Lender and as a Lender                                                                     |
|   |                                                                                                                   |   |
|   |                                                                                                                   |   |
|   | By                                                                                                                     | /s/ |   |
|   | Name:  Title:                                                                                                          | Dean J. Decker  Managing Director |
|   |                                                                                                                   | CIBC World Markets  Corp., As AGENT |
|   |                                                                                                                   |   |
|   | Notice Address:                                                                                                        |   |
|   |                                                                                                                   |   |
|   | CIBC INC.  425 Lexington Avenue  New York, New York 10017  Attn.: Agency Services Dept.  Facsimile No.: (212) 856-3799 |
|   |                                                                                                                   |   |
|   | With a Copy to:                                                                                                        |   |
|   |                                                                                                                   |   |
|   | CIBC WORLD MARKETS CORP.  350 South Grand Avenue, Suite 2600  Los Angeles, California 90071                            |
|        |                                                                                                                        |  |  |  |  |  |  |  |

 

 
|   | **U.S.  BANK NATIONAL ASSOCIATION.**as Co-documentation Agent and as a Lender                                                                     |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                              |
|   |                                                                                                                                              |   |
|   | By:                                                                                                                                               | /s/ |   |
|   | Name:  Title:                                                                                                                                     | Douglas P. Best  Banking Officer |
|   |                                                                                                                                              |
|   | Notice Address:                                                                                                                                   |   |
|   |                                                                                                                                              |   |
|   | FIRSTAR BANK, N.A.  One Firstar Plaza  7th and Washington, 12th Floor  St. Louis, MO 63101  Attn.: Douglas P. Best  Facsimile No.: (314) 418-8292 |
|   |                                                                                                                                              |   |
|   | With a Copy to:                                                                                                                                   |   |
|   |                                                                                                                                              |
|   | FIRSTAR BANK, N.A.  One Firstar Plaza  7th and Washington, 12th Floor  St. Louis, MO 63101  Attn.: Susan Kreutz

Facsimile No.: (314)  418-8292   |
|        |                                                                                                                                                   |  |  |  |  |  |  |

** **

 
|   | **FLEET  NATIONAL BANK,**** **as Co-Documentation Agent and as a  Lender                                                    |
|--------|----------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                             |
|   |                                                                                                                             |   |
|   | By:                                                                                                                              | /s/ |   |
|   | Name:   Title:                                                                                                                   | Jeff McLaughlin  Managing Director |
|   |                                                                                                                             |
|   |                                                                                                                             |   |
|   | Notice Address:                                                                                                                  |   |
|   |                                                                                                                             |   |
|   | FLEET NATIONAL BANK  One Federal Street   Boston, Massachusetts 02110   Attn.: Patrick Bonebrake   Facsimile No.: (617) 434-8426 |
|   |                                                                                                                             |   |
|   | With a Copy to:                                                                                                                  |   |
|   |                                                                                                                             |
|   | FLEET NATIONAL BANK  One Federal Street   Boston, Massachusetts 02110   Attn.: Jeff McLaughlin   Facsimile No.: (617) 434-8426   |
|        |                                                                                                                                  |  |  |  |  |  |  |

 

 
|   | **UNION  BANK OF CALIFORNIA, N.A.,**** **as a Lender                                                                                                                                                                    |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                         |   |
|   | By:                                                                                                                                                                                                                          | /s/ |   |
|   | Name:  Title:                                                                                                                                                                                                                | Peter Connoy  Vice President |
|   |                                                                                                                                                                                                                         |
|   | Notice Address:                                                                                                                                                                                                              |   |
|   |                                                                                                                                                                                                                         |   |
|   | UNION BANK OF CALIFORNIA, N.A.  Communications, Media and Entertainment  445 South Figueroa Street, 16th Floor  Los Angeles, California 90071  Attn.: Wyatt Bloomfield  Phone: (213) 236-7544  Facsimile No.: (213) 236-5747 |
|   |                                                                                                                                                                                                                         |   |
|   | With a Copy to:                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                         |
|   | UNION BANK OF  CALIFORNIA, N.A.   Communications, Media and Entertainment   445 South Figueroa Street, 16th Floor   Los Angeles, California 90071   Attn.: Christina Buck   Facsimile No.: (213) 236-5747                    |
|        |                                                                                                                                                                                                                              |  |  |  |  |  |  |

 

 
|   | **HELLER  FINANCIAL, INC.,**  as a Lender                                                                                               |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------|
|   | By: **HELLER FINANCIAL ASSET MANAGEMENT, LLC,**  as Authorized Agent                                                                    |
|   |                                                                                                                                    |   |
|   | By:                                                                                                                                     | /s/ |   |
|   | Name:  Title:                                                                                                                           | Robert M. Reeg  Assistant Vice President |
|   |                                                                                                                                    |
|   | Notice Address:                                                                                                                         |   |
|   |                                                                                                                                    |   |
|   | HELLER FINANCIAL, INC.   500 West Monroe Street, 12th Floor   Chicago, Illinois 60661   Attn.: Bob Reeg   Facsimile No.: (312) 441-7357 |
|   |                                                                                                                                    |
|   | With a Copy to:                                                                                                                         |   |
|   |                                                                                                                                    |   |
|   | HELLER FINANCIAL, INC.   500 West Monroe Street, 13th Floor   Chicago, Illinois 60661   Attn.: Nancy Cooney                             |
|        |                                                                                                                                         |  |  |  |  |  |  |

 

 
|   | **SUNAMERICA  LIFE INSURANCE CO.,**as a  Lender                                                                                             |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                        |
|   |                                                                                                                                        |   |
|   | By:                                                                                                                                         | /s/ |   |
|   | Name:  Title:                                                                                                                               |  Deborah Gero    Authorized Agent |
|   |                                                                                                                                        |
|   | Notice Address:                                                                                                                             |   |
|   |                                                                                                                                        |   |
|   | SUNAMERICA INVENTMENTS   1 SunAmerica Center   Los Angeles, California  90067-6022   Attn.: Tom Brandt   Facsimile No.: (310) 772-6078 |
|   |                                                                                                                                        |
|   | With a Copy to:                                                                                                                             |   |
|   |                                                                                                                                        |   |
|   | BANKERS TRUST COMPANY   14 Wall Street, 4th Floor, Window 43   New York, New York 10005   Attn.:  Lorraine Squires                     |
|        |                                                                                                                                             |  |  |  |  |  |  |

 

 
|   | **GALAXY  CLO 1999-1,LTD.,**as  a Lender                                                                                                                                                              |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | By: **SAI INVESTMENT ADVISER, INC**., its  Collateral Manager                                                                                                                                         |
|   |                                                                                                                                                                                                  |   |
|   |                                                                                                                                                                                                  |   |
|   | By:                                                                                                                                                                                                   | /s/ |   |
|   | Name:  Title:                                                                                                                                                                                         | Thomas G. Brandt   Authorized Agent |
|   |                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                  |   |
|   | Notice Address:                                                                                                                                                                                       |   |
|   |                                                                                                                                                                                                  |   |
|   | SAI INVESTMENT ADVISER, INC.   1 SunAmerica Center, 34th Floor   Los Angeles, California 90067-6022   Attn.: Dawn Garcia   Facsimile No.: (310) 772-6078                                              |
|   |                                                                                                                                                                                                  |
|   | With a Copy to:                                                                                                                                                                                       |   |
|   |                                                                                                                                                                                                  |   |
|   | GALAXY CLO 1999-1, LTD.    c/o Chase Bank of Texas, National Association   600 Travis Street, 48th Floor, 48-CTH-304   Houston, Texas 77002   Attn: T. Ajaz A/C 23206   Facsimile No.: (713) 216-3572 |
|        |                                                                                                                                                                                                       |  |  |  |  |  |  |

 

 
|   | **KZH  SOLEIL-2 LLC,**as  a Lender                                                                                                                                   |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                 |
|   |                                                                                                                                                                 |   |
|   | By:                                                                                                                                                                  | /s/ |   |
|   | Name:  Title:                                                                                                                                                        | Brian Turkfeld   Authorized Agent |
|   |                                                                                                                                                                 |
|   | Notice Address:                                                                                                                                                      |   |
|   |                                                                                                                                                                 |   |
|   | KZH SOLEIL-2 LLC   c/o The Chase Manhattan Bank   140 East 45th Street, 11th Floor New York, New York  10017   Attn: Virginia Conway   Facsimile No.: (212) 622-0123 |
|   |                                                                                                                                                                 |   |
|   | With a Copy to:                                                                                                                                                      |   |
|   |                                                                                                                                                                 |
|   | WEIL, GOTSHAL & MANGES LLP   767 Fifth Avenue, 34th Floor New York, New York 10153  Attn.:  Shan D. McSweeney   Facsimile No.: (212) 833-3118               |
|        |                                                                                                                                                                      |  |  |  |  |  |  |

** **

 
|   | **KZH  SOLEIL LLC,**** **as a Lender                                                                                                                           |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                |
|   |                                                                                                                                                                |   |
|   | By:                                                                                                                                                                 | /s/ |   |
|   | Name:   Title:                                                                                                                                                      | Brian Turkfeld  Authorized Agent |
|   |                                                                                                                                                                |
|   | Notice Address:                                                                                                                                                     |   |
|   |                                                                                                                                                                |   |
|   | KZH SOLEIL-2 LLC   c/o The Chase Manhattan Bank   140 East 45th Street, 11th Floor New York, New York  10017  Attn: Virginia Conway   Facsimile No.: (212) 622-0123 |
|   |                                                                                                                                                                |   |
|   | With a Copy to:                                                                                                                                                     |   |
|   |                                                                                                                                                                |
|   | WEIL, GOTSHAL & MANGES LLP   767 Fifth Avenue, 27th Floor   New York, New York 10153   Attn.:  Shan D. McSweeney   Facsimile No.: (212) 310-8007           |
|        |                                                                                                                                                                     |  |  |  |  |  |  |

 

 
|   | **RIVIERA  FUNDING LLC,** as  a Lender                                                                                                               |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                 |
|   |                                                                                                                                                 |   |
|   | By:                                                                                                                                                  | /s/ |   |
|   | Name:  Title:                                                                                                                                        | Ann E. Morris   Asst. Vice President |
|   |                                                                                                                                                 |
|   | Notice Address:                                                                                                                                      |   |
|   |                                                                                                                                                 |   |
|   | BANK OF AMERICA, N.A.   101 North Tryon Street NC1-001-15-01   Charlotte, North Carolina 28273   Attn.: Sarah Harder   Facsimile No.: (704) 409-0171 |
|   |                                                                                                                                                 |   |
|   | With a Copy to:                                                                                                                                      |   |
|   |                                                                                                                                                 |
|   | INDOSUEZ CAPITAL   666 Third Avenue, 9th Floor   New York, NY 10017   Attn: Isabelle Pradell   Facsimile No.: (646) 658-2254                         |
|        |                                                                                                                                                      |  |  |  |  |  |  |

 

 
|   | **KZH  SHOSHONE LLC,**as  a Lender                                                                                                                                  |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                |
|   |                                                                                                                                                                |   |
|   | By:                                                                                                                                                                 | /s/ |   |
|   | Name:  Title:                                                                                                                                                       | Brian Turkfeld  Authorized Agent |
|   |                                                                                                                                                                |
|   | Notice Address:                                                                                                                                                     |   |
|   |                                                                                                                                                                |   |
|   | KZH SHOSHONE LLC   c/o The Chase Manhattan Bank  140 East 45th Street, 11th Floor  New York, New York 10017   Attn: Virginia Conway   Facsimile No.: (212) 622-0123 |
|   |                                                                                                                                                                |   |
|   | With a Copy to:                                                                                                                                                     |   |
|   |                                                                                                                                                                |
|   | WEIL, GOTSHAL & MANGES LLP   767 Fifth Avenue, 27th Floor   New York, New York 10153   Attn.:  Shan D. McSweeney   Facsimile No.: (212) 310-8007           |
|        |                                                                                                                                                                     |  |  |  |  |  |  |