exv10w5



 



EXECUTION VERSION



AMENDED AND RESTATED

CREDIT AND GUARANTY AGREEMENT



dated as of January 16, 2003



among



XO COMMUNICATIONS, INC.,



CERTAIN SUBSIDIARIES OF

XO COMMUNICATIONS, INC.,



as Guarantors,



VARIOUS LENDERS,



and



MIZUHO CORPORATE BANK, LTD.,

as Administrative Agent,








$500,000,000 SENIOR SECURED TERM LOAN









 






 




Table of Contents




	 	 	 	 	 	 
	 	 	 	Page
	 	 	 	

	SECTION 1. DEFINITIONS AND INTERPRETATION
	 	 	2	 
	 	1.1 Definitions
	 	 	2	 
	 	1.2 Accounting Terms
	 	 	31	 
	 	1.3 Interpretation, etc
	 	 	31	 
	SECTION 2. LOANS
	 	 	31	 
	 	2.1 Term Loans
	 	 	31	 
	 	2.2 Borrowing Procedure
	 	 	31	 
	 	2.3 Pro Rata Shares
	 	 	32	 
	 	2.4 Use of Proceeds
	 	 	32	 
	 	2.5 Evidence of Debt; Register; Lenders’ Books and Records; Notes
	 	 	32	 
	 	2.6 Interest on Loans
	 	 	33	 
	 	2.7 Conversion/Continuation
	 	 	34	 
	 	2.8 Default Interest
	 	 	35	 
	 	2.9 Fees
	 	 	35	 
	 	2.10 Scheduled Payments
	 	 	35	 
	 	2.11 Voluntary Prepayments
	 	 	36	 
	 	2.12 Mandatory Prepayments
	 	 	36	 
	 	2.13 Application of Prepayments/Reductions
	 	 	38	 
	 	2.14 General Provisions Regarding Payments
	 	 	38	 
	 	2.15 Ratable Sharing
	 	 	39	 
	 	2.16 Making or Maintaining Eurodollar Rate Loans
	 	 	40	 
	 	2.17 Increased Costs; Capital Adequacy
	 	 	42	 
	 	2.18 Taxes; Withholding, etc.
	 	 	43	 
	 	2.19 Obligation to Mitigate
	 	 	45	 
	 	2.20 Removal or Replacement of a Lender
	 	 	46	 
	 	2.21 Intercreditor Agreement
	 	 	46	 
	SECTION 3. CONDITIONS PRECEDENT
	 	 	47	 
	 	3.1 Closing Date
	 	 	47	 
	SECTION 4. REPRESENTATIONS AND WARRANTIES
	 	 	50	 
	 	4.1 Organization; Requisite Power and Authority; Qualification
	 	 	50	 
	 	4.2 Capital Stock and Ownership
	 	 	51	 
	 	4.3 Due Authorization
	 	 	51	 
	 	4.4 No Conflict
	 	 	51	 
	 	4.5 Governmental Consents
	 	 	51	 
	 	4.6 Binding Obligation
	 	 	52	 
	 	4.7 Historical Financial Statements
	 	 	52	 
	 	4.8 No Material Adverse Change
	 	 	52	 



i  






 


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(continued)



	 	 	 	 	 	 
	 	 	 	Page
	 	 	 	

	 	4.9 No Restricted Junior Payments
	 	 	52	 
	 	4.10 Adverse Proceedings, etc
	 	 	52	 
	 	4.11 Payment of Taxes
	 	 	53	 
	 	4.12 Properties
	 	 	53	 
	 	4.13 Collateral
	 	 	53	 
	 	4.14 Environmental Matters
	 	 	54	 
	 	4.15 No Defaults
	 	 	55	 
	 	4.16 Material Contracts
	 	 	55	 
	 	4.17 Governmental Regulation
	 	 	55	 
	 	4.18 Margin Stock
	 	 	55	 
	 	4.19 Employee Matters
	 	 	55	 
	 	4.20 Employee Benefit Plans
	 	 	56	 
	 	4.21 Certain Fees
	 	 	56	 
	 	4.22 Intentionally omitted
	 	 	56	 
	 	4.23 Compliance with Statutes, etc
	 	 	56	 
	 	4.24 Restructuring Transaction Documents
	 	 	57	 
	 	4.25 Disclosure
	 	 	57	 
	SECTION 5. AFFIRMATIVE COVENANTS
	 	 	57	 
	 	5.1 Financial Statements and Other Reports
	 	 	58	 
	 	5.2 Existence
	 	 	62	 
	 	5.3 Payment of Taxes and Claims
	 	 	62	 
	 	5.4 Maintenance of Properties
	 	 	62	 
	 	5.5 Insurance
	 	 	62	 
	 	5.6 Inspections; Lenders Meetings
	 	 	63	 
	 	5.7 Compliance with Laws
	 	 	63	 
	 	5.8 Environmental
	 	 	63	 
	 	5.9 Subsidiaries
	 	 	64	 
	 	5.10 Additional Material Real Estate Assets
	 	 	65	 
	 	5.11 Further Assurances
	 	 	65	 
	 	5.12 Maintenance of Corporate Separateness
	 	 	66	 
	 	5.13 Interest Rate Protection
	 	 	66	 
	SECTION 6. NEGATIVE COVENANTS
	 	 	66	 
	 	6.1 Indebtedness
	 	 	66	 
	 	6.2 Liens
	 	 	69	 
	 	6.3 Equitable Lien
	 	 	71	 
	 	6.4 Restricted Payments; Restrictions on Subsidiary Distributions
	 	 	71	 
	 	6.5 Investments
	 	 	72	 
	 	6.6 Financial Covenants
	 	 	72	 
	 	6.7 Fundamental Changes; Disposition of Assets; Acquisitions
	 	 	74	 
	 	6.8 Disposal of Subsidiary Interests
	 	 	75	 



ii  






 


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(continued)



	 	 	 	 	 	 
	 	 	 	Page
	 	 	 	

	 	6.9 Sales and Lease-Backs
	 	 	75	 
	 	6.10 Conduct of Business; Holding Company Status
	 	 	76	 
	 	6.11 Amendments or Waivers of Indebtedness or Restructuring Transaction Documents
	 	 	76	 
	 	6.12 Fiscal Year
	 	 	77	 
	 	6.13 Significant Subsidiaries
	 	 	77	 
	 	6.14 Accounts
	 	 	77	 
	SECTION 7. GUARANTY
	 	 	77	 
	 	7.1 Guaranty of the Obligations
	 	 	77	 
	 	7.2 Contribution by Guarantors
	 	 	77	 
	 	7.3 Payment by Guarantors
	 	 	78	 
	 	7.4 Liability of Guarantors Absolute
	 	 	78	 
	 	7.5 Waivers by Guarantors
	 	 	80	 
	 	7.6 Guarantors’ Rights of Subrogation, Contribution, etc
	 	 	81	 
	 	7.7 Subordination of Other Obligations
	 	 	82	 
	 	7.8 Continuing Guaranty
	 	 	82	 
	 	7.9 Authority of Guarantors or Company
	 	 	82	 
	 	7.10 Financial Condition of Company
	 	 	82	 
	 	7.11 Bankruptcy, etc.
	 	 	82	 
	 	7.12 Notice of Events
	 	 	83	 
	 	7.13 Discharge of Guaranty Upon Sale of Guarantor
	 	 	83	 
	SECTION 8. EVENTS OF DEFAULT
	 	 	83	 
	 	8.1 Events of Default
	 	 	83	 
	SECTION 9. AGENTS
	 	 	86	 
	 	9.1 Appointment of Agent
	 	 	86	 
	 	9.2 Powers and Duties
	 	 	86	 
	 	9.3 General Immunity
	 	 	87	 
	 	9.4 Agent Entitled to Act as Lender
	 	 	88	 
	 	9.5 Lenders’ Representations, Warranties and Acknowledgment
	 	 	88	 
	 	9.6 Right to Indemnity
	 	 	88	 
	 	9.7 Successor Administrative Agent
	 	 	89	 
	 	9.8 Collateral Documents and Guaranty
	 	 	89	 
	SECTION 10. MISCELLANEOUS
	 	 	90	 
	 	10.1 Notices
	 	 	90	 
	 	10.2 Expenses
	 	 	91	 
	 	10.3 Indemnity
	 	 	92	 
	 	10.4 Set-Off
	 	 	92	 
	 	10.5 Amendments and Waivers
	 	 	92	 
	 	10.6 Successors and Assigns; Participations
	 	 	94	 



iii  






 


Table of Contents

(continued)



	 	 	 	 	 	 
	 	 	 	Page
	 	 	 	

	 	10.7 Independence of Covenants
	 	 	97	 
	 	10.8 Survival of Representations, Warranties and Agreements
	 	 	97	 
	 	10.9 No Waiver; Remedies Cumulative
	 	 	97	 
	 	10.10 Marshalling; Payments Set Aside
	 	 	97	 
	 	10.11 Severability
	 	 	97	 
	 	10.12 Obligations Several; Independent Nature of Lenders’ Rights
	 	 	98	 
	 	10.13 Headings
	 	 	98	 
	 	10.14 APPLICABLE LAW
	 	 	98	 
	 	10.15 CONSENT TO JURISDICTION
	 	 	98	 
	 	10.16 WAIVER OF JURY TRIAL
	 	 	99	 
	 	10.17 Confidentiality
	 	 	99	 
	 	10.18 Usury Savings Clause
	 	 	100	 
	 	10.19 Counterparts; Effectiveness
	 	 	100	 
	 	10.20 Limitation of Liability
	 	 	100	 
	 	10.21 Transitional Arrangements
	 	 	100	 



APPENDICES:



	 	 	 
	A	 	
Pro Rata Share of Term Loans
	B	 	
Notice Addresses



SCHEDULES:



	 	 	 
	1.1(a)	 	
Consolidated EBITDA Definition
	1.1(b)	 	
Net Asset Sale Proceeds Definition
	3.1(l)	 	
Employment Agreements
	3.1(m)	 	
Intercompany Indebtedness
	4.1	 	
Subsidiaries and Jurisdictions of Organization
	4.2	 	
Subsidiaries and Ownership Interest
	4.4	 	
No Conflict
	4.5	 	
Governmental Consents and Approvals
	4.7	 	
Contingent Liabilities
	4.10	 	
Adverse Proceedings
	4.12	 	
Real Estate Assets
	4.13(b)	 	
Governmental Consents and Approvals
	4.14	 	
Environmental Matters
	4.16	 	
Material Contracts
	4.17	 	
Governmental Regulation
	4.20	 	
Employee Benefit Plans
	4.25	 	
Disclosure
	6.1(o)	 	
Certain Indebtedness
	6.2(m)	 	
Certain Liens
	6.5(h)	 	
Certain Investments



iv  






 


Table of Contents

(continued)



	 	 	 	 	 	 	 
	 	 	 	 	Page
	 	 	 	 	

	EXHIBITS:	 	 
	A	 	
Conversion/Continuation Notice
	B	 	
Term Loan Note
	C	 	
Compliance Certificate
	D	 	
Opinions of Counsel
	E	 	
Assignment Agreement
	F	 	
Certificate re Non-Bank Status
	G	 	
Closing Date Certificate
	H	 	
Counterpart Agreement
	I	 	
Pledge and Security Agreement



v  






 


AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT



     This AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT, dated as of
January 16, 2003 is entered into by and among XO COMMUNICATIONS, INC., a
Delaware corporation (“Company”), CERTAIN SUBSIDIARIES OF COMPANY, as
Guarantors, the Lenders party hereto from time to time, and MIZUHO CORPORATE
BANK, LTD. (“Mizuho”), as Administrative Agent (together with its permitted
successors in such capacity, “Administrative Agent”).


RECITALS:



     WHEREAS, capitalized terms used in these recitals shall have the
respective meanings set forth for such terms in Section 1.1 hereof;


     WHEREAS, pursuant to the terms and conditions of the Existing Credit
Agreement (as defined herein), the Company borrowed loans in an aggregate
principal amount outstanding as of the date hereof equal to $1,000,000,000;


     WHEREAS, on June 17, 2002 (the “Filing Date”), Company filed a voluntary
petition for relief under chapter 11 of the Bankruptcy Code (such case
commenced thereby, the “Chapter 11 Case”) in the United States Bankruptcy Court
for the Southern District of New York (the “Bankruptcy Court”);


     WHEREAS, pursuant to the terms of the Final Order (as defined herein),
holders of Senior Secured Lender Claims (as defined herein) shall (a) receive
their pro rata share of (i) New XO Common Stock, (ii) Transferable Rights and
(b) hold the Term Loans (as defined herein), on account of their Senior Secured
Lender Claims, and the Loans (as defined under the Existing Credit Agreement),
up to the amount of the Term Loans (as defined herein), shall after the Closing
Date (as defined herein) constitute the Term Loans (as defined herein);


     WHEREAS, pursuant to this Agreement and the Final Order, Company agrees
that all of its obligations hereunder shall continue to be secured by any and
all Collateral that secures the obligations under the Existing Credit
Agreement, and, in addition thereto, that the Company shall further secure all
of its obligations hereunder by granting to Administrative Agent, for the
benefit of Lenders, (i) a First Priority Lien on all the Capital Stock owned by
the Company in each of its first tier (i.e., direct) Domestic Subsidiaries,
(ii) a First Priority Lien on 65% of all of the Capital Stock owned by the
Company in each of its first tier Foreign Subsidiaries, and (iii) a First
Priority Lien on all of its personal property and Material Real Estate Assets;


     WHEREAS, pursuant to the terms and conditions of the Existing Credit
Agreement (as defined herein), certain Guarantors (as defined hereunder)
agreed, as Guarantors (as defined in the Existing Credit Agreement) to
guarantee the obligations of the Company thereunder;


     WHEREAS, pursuant to the terms hereof, on the Closing Date, Company shall
terminate, forgive, writedown, or cancel certain Indebtedness due to it from
any of its Subsidiaries (including, without limitation, all Guarantors (as
defined in the Existing Credit Agreement and as defined in herein) in the
manner provided herein and certain of the Company’s Subsidiaries shall
terminate, forgive, writedown, or cancel certain Indebtedness due to such


 






 



Subsidiaries from certain of the Company’s other Subsidiaries (including,
without limitation, all Guarantors (as defined in the Existing Credit Agreement
and as defined in herein)) in the manner provided herein;


     WHEREAS, pursuant to this Agreement and the Final Order, Guarantors agree
(a) (i) because the Loans (as defined under the Existing Credit Agreement), up
to the amount of the Term Loans (as defined herein), shall after the Closing
Date (as defined herein) constitute the Term Loans (as defined herein),
therefore the guarantee of those Guarantors party to the Existing Credit
Agreement continues in all respects with respect to the Term Loans (as defined
hereunder), such that the guarantee of those Guarantors (as defined in the
Existing Credit Agreement) of the obligations of the Company under the Existing
Credit Agreement shall, after the Closing Date, be converted to a guarantee of
the obligations of the Company hereunder, and in addition, pursuant to this
Agreement and the Final Order; and (ii) in addition thereto (and without regard
to whether such Guarantor is a Guarantor under the Existing Credit Agreement),
to guarantee the obligations of Company hereunder and (b) (i) all of such
Guarantors’ obligations hereunder shall continue to be secured by any and all
Collateral that secures their obligations under the Existing Credit Agreement,
and (ii) in addition thereto, to further secure Company’s and all of the
Guarantors’ respective obligations in respect thereof by granting to
Administrative Agent, for the benefit of Lenders, (i) a First Priority Lien on
all of the Capital Stock of each of their respective first tier Domestic
Subsidiaries, (ii) a First Priority Lien on 65% of all the Capital Stock of
each of their respective first tier Foreign Subsidiaries, and (iii) a First
Priority Lien on all of their respective real property and personal property,
in each case to secure such obligations; and


     WHEREAS, pursuant to the Final Order and this Agreement, this Agreement
shall supersede, amend and restate in its entirety the Existing Credit
Agreement on the terms and pursuant to the conditions hereof;


     NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Guarantors, Lenders and
Agents agree that the Existing Credit Agreement shall be superseded hereby and
amended and restated as follows:


SECTION 1. DEFINITIONS AND INTERPRETATION


     1.1 Definitions. The following terms used herein, including in the
preamble, recitals, exhibits and schedules hereto, shall have the following
meanings:


          “Accrued Principal” means the accrued interest payable on the Term Loans
on or prior to the Cash Pay Conversion Date which shall be added to the
outstanding principal amount of the Term Loans in accordance with Section 2.6
and on the Cash Pay Conversion Date.



          “Acquired Debt” means Indebtedness existing on any property or assets
prior to the acquisition thereof by Company or any of its Subsidiaries or
Indebtedness of any Person that merges with or into or consolidates with
Company or any such Subsidiary or becomes a Subsidiary of Company after the
date hereof existing prior to such merger or consolidation or the time such
Person becomes a Subsidiary of Company; provided that such Indebtedness is not
incurred in contemplation of or in connection with such acquisition, merger or
consolidation or

2






 




with such Person becoming a Subsidiary, as the case may be. For the
avoidance of doubt, Acquired Debt includes Indebtedness issuable upon the
exchange of Acquired Preferred Stock or other Acquired Debt in accordance with
the terms thereof.


          “Acquired Investment” means an Investment owned by a Person prior to the
time such Person merges with or into or consolidates with Company or any of its
Subsidiaries or becomes a Subsidiary of Company after the date hereof; provided
that such Investment is not acquired in contemplation of or in connection with
such merger or consolidation or with such Person becoming a Subsidiary, as the
case may be.



          “Acquired Preferred Stock” means preferred stock of any Person that merges
with or into or consolidates with Company or any of its Subsidiaries or becomes
a Subsidiary of Company after the date hereof existing prior to such merger or
consolidation or the time such Person becomes a Subsidiary; provided that such
preferred stock is not issued in contemplation of or in connection with such
merger or consolidation or with such Person becoming a Subsidiary, as the case
may be.



          “Adjusted Eurodollar Rate” means, for any Interest Rate Determination Date
with respect to an Interest Period for a Eurodollar Rate Loan, the rate per
annum obtained by dividing (and rounding upward to the next whole multiple of
1/16 of 1%) (i) (a) the rate per annum (rounded to the nearest 1/100 of 1%)
equal to the rate determined by Administrative Agent to be the offered rate
which appears on the page of the Telerate Screen which displays an average
British Bankers Association Interest Settlement Rate (such page currently being
page number 3740 or 3750, as applicable) for deposits (for delivery on the
first day of such period) with a term equivalent to such period in Dollars,
determined as of approximately 11:00 a.m. (London, England time) on such
Interest Rate Determination Date, or (b) in the event the rate referenced in
the preceding clause (a) does not appear on such page or service or if such
page or service shall cease to be available, the rate per annum (rounded to the
nearest 1/100 of 1%) equal to the rate determined by Administrative Agent to be
the offered rate on such other page or other service which displays an average
British Bankers Association Interest Settlement Rate for deposits (for delivery
on the first day of such period) with a term equivalent to such period in
Dollars, determined as of approximately 11:00 a.m. (London, England time) on
such Interest Rate Determination Date, or (c) in the event the rates referenced
in the preceding clauses (a) and (b) are not available, the rate per annum
(rounded to the nearest 1/100 of 1%) equal to the offered quotation rate to
first class banks in the London interbank market by Citibank, N.A. (or such
other Person (whether or not a Lender) designated by the Company that is
reasonably acceptable to Requisite Lenders) for deposits (for delivery on the
first day of the relevant period) in Dollars of amounts in same day funds
comparable to the principal amount of the applicable Eurodollar Rate Loan of
Citibank, N.A. (or such other Person designated as provided above), for which
the Adjusted Eurodollar Rate is then being determined with maturities
comparable to such period as of approximately 11:00 a.m. (London, England time)
on such Interest Rate Determination Date, by (ii) an amount equal to (a) one
minus (b) the Applicable Reserve Requirement.



          “Administrative Agent” as defined in the preamble hereto.

3






 




          “Adverse Proceeding” means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration (whether or not purportedly on behalf of Company or any of its
Subsidiaries) at law or in equity, or before or by any Governmental Authority,
domestic or foreign (including any Environmental Claims), whether pending or,
to the knowledge of Company or any of its Subsidiaries, threatened against or
affecting Company or any of its Subsidiaries or any property of Company or any
of its Subsidiaries, other than, through the date hereof, the Chapter 11 Case.



          “Affected Lender” as defined in Section 2.16(b).



          “Affected Loans” as defined in Section 2.16(b).



          “Affiliate” means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling”, “controlled by” and “under
common control with”), as applied to any Person, means the possession, directly
or indirectly, of the power (i) to vote 10% or more of the Securities having
ordinary voting power for the election of directors of such Person or (ii) to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting securities or by contract or otherwise,
provided, however, no Person shall be considered an Affiliate of the Company or
its Subsidiaries if neither the Company nor one of its Subsidiaries owns any
equity interest in such Person.



          “Agent” means Mizuho Corporate Bank, Ltd., as Administrative Agent.



          “Aggregate Amounts Due” as defined in Section 2.15.



          “Aggregate Payments” as defined in Section 7.2.



          “Agreement” means this Amended and Restated Credit and Guaranty Agreement,
as it may be amended, supplemented or otherwise modified from time to time.



          “Applicable Reserve Requirement” means, at any time, for any Eurodollar
Rate Loan, the maximum rate, expressed as a decimal, at which reserves
(including, without limitation, any basic marginal, special, supplemental,
emergency or other reserves) are required to be maintained with respect thereto
against “Eurocurrency liabilities” (as such term is defined in Regulation D)
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System or other applicable banking regulator. Without limiting
the effect of the foregoing, the Applicable Reserve Requirement shall reflect
any other reserves required to be maintained by such member banks with respect
to (i) any category of liabilities which includes deposits by reference to
which the applicable Adjusted Eurodollar Rate or any other interest rate of a
Term Loan is to be determined, or (ii) any category of extensions of credit or
other assets which include Eurodollar Rate Loans. A Eurodollar Rate Loan shall
be deemed to constitute Eurocurrency liabilities and as such shall be deemed
subject to reserve requirements without benefits of credit for proration,
exceptions or offsets that may be available from time to time to the applicable
Lender. The rate of interest on Eurodollar Rate Loans shall be adjusted
automatically on and as of the effective date of any change in the Applicable
Reserve Requirement.

4






 




          “Asset Sale” means a sale, lease or sub-lease (as lessor or sublessor),
sale and leaseback, assignment, conveyance, transfer or other disposition to,
or any exchange of property with (a “transfer”) any Person (other than Company
or any Guarantor), in one transaction or a series of transactions, of all or
any part of Company’s or any of its Subsidiaries’ businesses, assets or
properties of any kind, whether real, personal, or mixed and whether tangible
or intangible, whether now owned or hereafter acquired, including, without
limitation, (i) any transfer or issuance of the Capital Stock of any of
Company’s Subsidiaries, (ii) any sale, lease or sublease (as lessor or
sublessor), sale and leaseback, assignment, conveyance, transfer or other
disposition or exchange of property with respect to dark fiber, (iii) the
entering into of any “Irrevocable Right of Use” agreement, capacity agreement,
leases and similar agreements conveying to other Persons the right to use dark
fiber owned by the Company or any of its Subsidiaries or (iv) any sale, lease
or sublease (as lessor or sublessor), sale and leaseback, assignment,
conveyance, transfer or other disposition or exchange of property with respect
to all or substantially all of the network capacity in a Geographic Market,
other than, in any of the situations described in clauses (i) through (iv)
above, (1) the swap or exchange of any asset or property in the ordinary course
of business within two hundred seventy (270) days for an asset or property of
at least equal fair market value to be used in the Telecommunications Business,
and (2) transfers of (a) inventory (including network capacity held for
transfer) in the ordinary course of business, (b) obsolete, worn out or surplus
property; (c) assets or property for aggregate consideration (net of reserves
for any indemnities) of less than $5,000,000 with respect to any transaction or
series of related transactions and less than $25,000,000 in the aggregate
during any Fiscal Year; (d) Restricted Junior Payments to the extent otherwise
permitted hereunder, and (e) Cash Equivalents.



          “Assignment Agreement” means an Assignment Agreement substantially in the
form of Exhibit E, with such amendments or modifications as may be approved by
Administrative Agent.



          “Authorized Officer” means, as applied to any Person, any individual
holding the position of chairman of the board (if an officer), chief executive
officer, president or one of its vice presidents (or the equivalent thereof),
and such Person’s chief financial officer or treasurer or general counsel.



          “Bankruptcy Code” means title 11 of the United States Code entitled
“Bankruptcy” as now and hereafter in effect, or any successor statute.



          “Bankruptcy Court” as defined in the recitals hereto.



          “Base Rate” means, for any day, a rate per annum (rounded to the nearest
1/100 of 1%) equal to the greater of (i) the Prime Rate in effect on such day
and (ii) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%.
Any change in the Base Rate due to a change in the Prime Rate or the Federal
Funds Effective Rate shall be effective on the effective day of such change in
the Prime Rate or the Federal Funds Effective Rate, respectively.



          “Base Rate Loan” means a Term Loan bearing interest at a rate determined
by reference to the Base Rate.

5






 




          “Beneficiary” means each Agent, Lender and Lender Counterparty.



          “Business Day” means (i) any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of New York or is a day on
which banking institutions located in such state are authorized or required by
law or other governmental action to close and (ii) with respect to all notices,
determinations, fundings and payments in connection with the Adjusted
Eurodollar Rate or any Eurodollar Rate Loans, the term “Business Day” shall
mean any day which is a Business Day described in clause (i) and which is also
a day for trading by and between banks in Dollar deposits in the London
interbank market.



          “Capital Expenditures” means all expenditures of Company and its
Subsidiaries during such period determined on a consolidated basis that, in
accordance with GAAP, are or should be included in “purchase of property and
equipment” or similar items reflected in the consolidated statement of cash
flows of Company and its Subsidiaries, and including those Telecommunications
Assets designated as Capital Expenditures as specified in clause (viii) of the
definition of Permitted Acquisitions).



          “Capital Lease” means, as applied to any Person, any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, is or should be accounted for as a capital lease on the balance
sheet of that Person, other than those transactions related to fiber swaps.



          “Capital Stock” means any and all shares, interests, participations or
other equivalents (however designated including, without limitation, phantom
stock or stock appreciation rights) of capital stock of a corporation, any and
all equivalent ownership interests in a Person (other than a corporation),
including, without limitation, partnership interests and membership interests,
and any and all warrants, rights or options to purchase or other arrangements
or rights to acquire any of the foregoing.



          “Cash” means money, currency or a credit balance in any demand or Deposit
Account.



          “Cash Equivalents” means, as at any date of determination, (i) marketable
securities (a) issued or directly and unconditionally guaranteed as to interest
and principal by the United States Government or (b) issued by any agency of
the United States the obligations of which are backed by the full faith and
credit of the United States, in each case maturing within one year after such
date; (ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after such date
and having, at the time of the acquisition thereof, a rating of at least A-1
from S&P or at least P-1 from Moody’s; (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody’s; (iv) certificates of deposit or bankers’ acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least “adequately
capitalized” (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; (v)

6






 




shares of any money market mutual fund that (a) has substantially all of
its assets invested continuously 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 the highest rating obtainable from either S&P or Moody’s; and (vi)
any securities, indebtedness, instruments or other investments approved by, or
designated under or made pursuant to an investment policy established from time
to time by, the board of directors of the Company.


          “Cash Pay Conversion Date” means the later of: (i) the earliest to occur
of (a) the day on which Company delivers a Cash Pay Notice to Administrative
Agent and (b) the last day of the first Fiscal Quarter after the Closing Date
in which the Interest Coverage Ratio as of the last day of such Fiscal Quarter
exceeds 4.00:1.00, or (ii) if requested by the Company, such later date or
dates as may be specified from time to time by the Requisite Lenders, in which
event, anything in the Credit Documents notwithstanding, the “Cash Pay
Conversion Date” shall be deemed to be the date so specified without the
further consent or approval of any other Person.



          “Cash Pay Notice” means a notice delivered by Company to Administrative
Agent pursuant to which Company makes a permanent election to pay cash interest
on the Term Loans from the day after the date such notice is given to
Administrative Agent through repayment (whether by acceleration or otherwise)
thereof.



          “Certificate re Non-Bank Status” means a certificate substantially in the
form of Exhibit F.



          “Change of Control” means, at any time, any Person or any Persons acting
together that would constitute a “group” for purposes of Section 13(d) under
the Exchange Act, or any successor provision thereto (other than a Permitted
Holder or Affiliates of a Permitted Holder or an underwriter engaged in a firm
commitment underwriting on behalf of Company) shall beneficially own (within
the meaning of Rule 13d-3 under the Exchange Act, or any successor provision
thereto) more than 40% of the aggregate voting power of all classes of voting
stock of Company unless at such time Permitted Holders continue to own more
than such Person or Persons, provided, however, that a Change of Control shall
not result from transfers to any Permitted Holder.



          “Chapter 11 Case” as defined in the recitals hereto.



          “Closing Date” means the date on which the conditions precedent set forth
in Section 3.1 have been satisfied or waived in accordance with Section 10.5,
which date shall in no event be earlier than the Effective Date.



          “Closing Date Certificate” means a Closing Date Certificate substantially
in the form of Exhibit G.



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

7






 




          “Collateral Documents” means the Pledge and Security Agreement, the
Mortgages and all other instruments, documents and agreements delivered by any
Credit Party pursuant to this Agreement or any of the other Credit Documents in
order to grant to Administrative Agent, for the benefit of Lenders, a Lien on
any real, personal or mixed property of that Credit Party as security for the
Obligations.



          “Collateral Questionnaire” means a certificate in form satisfactory to the
Administrative Agent that provides information with respect to the personal or
mixed property of each Credit Party.



          “Company” as defined in the preamble hereto.



          “Company Employee Benefit Plan” means any Employee Benefit Plan
maintained, contributed to, or required to be contributed to, by Company or any
of its Subsidiaries.



          “Compliance Certificate” means a Compliance Certificate substantially in
the form of Exhibit C.



          “Confirmation Orders” as defined in Section 3.1(j).



          “Consolidated Capital Expenditures” means, for any period, the aggregate
of all Capital Expenditures for such period.



          “Consolidated Cash Interest Expense” means, for any period, Consolidated
Interest Expense for such period, excluding any amount not payable in Cash.



          “Consolidated Current Assets” means, as at any date of determination, the
total assets of Company and its Subsidiaries on a consolidated basis that may
properly be classified as current assets in conformity with GAAP, excluding
Cash and Cash Equivalents.



          “Consolidated Current Liabilities” means, as at any date of determination,
the total liabilities of Company and its Subsidiaries on a consolidated basis
that may properly be classified as current liabilities in conformity with GAAP,
excluding the current portion of long term debt.



          “Consolidated EBITDA” means, for any period, an amount determined for
Company and its Subsidiaries on a consolidated basis equal to (i) the sum of
the amounts for such period of (a) Consolidated Net Income, (b) Consolidated
Interest Expense, (c) provisions for taxes, (d) total depreciation expense, (e)
total amortization expense, (f) total restructuring-related fees and expenses
and loss arising from fresh-start accounting, in each case determined in
accordance with GAAP (an estimate of all of which is set forth in Schedule
1.1(a) attached hereto) and (g) other items, to the extent either set forth in
Schedule 1.1(a) attached hereto or agreed to from time to time by the Company
and the Requisite Lenders, reducing Consolidated Net Income minus (ii) the sum
of the amounts for such period of (a) gain arising from fresh-start accounting
and the cancellation of indebtedness, in each case determined in accordance
with GAAP (an estimate of which gain is set forth in Schedule 1.1(a) attached
hereto) and (b) other items, if and to the extent agreed to from time to time
by the Company and the Requisite

8






 




Lenders, increasing Consolidated Net Income, provided that the items
described in clauses (i)(b), (i)(c), (i)(d), (i)(e), (i)(f), (i)(g), (ii)(a)
and (ii)(b) shall be added or subtracted, as the case may be, only to the
extent included in computing Consolidated Net Income, provided further that
anything in the Credit Documents notwithstanding, the computation of
“Consolidated EBITDA” shall be deemed to include those components of clauses
(i)(g) and (ii)(b) as scheduled or agreed to by Company and Requisite Lenders,
without the further consent or approval of any other Person.


          “Consolidated Excess Cash Flow” means, for any period, an amount (if
positive) equal to: (i) the sum, without duplication, of the amounts for such
period of (A) Consolidated EBITDA, and (B) the Consolidated Working Capital
Adjustment, minus (ii) the sum, without duplication, of the amounts for such
period of (a) repayments of Consolidated Total Debt (excluding repayments (I)
in connection with refinancings and (II) from the proceeds of Asset Sales), (b)
Consolidated Capital Expenditures (net of any proceeds of any related
financings with respect to such expenditures), (c) Consolidated Cash Interest
Expense, (d) all regularly scheduled cash dividend payments on Acquired
Preferred Stock and (e) the provision for taxes of Company and its Subsidiaries
and payable in cash with respect to such period and, to the extent Company
failed in good faith to reserve funds for the same, with respect to prior
periods; provided that, with the consent of the Requisite Lenders, if the
Consolidated Excess Cash Flow for any quarter determined in accordance with the
foregoing would be in excess of $25 million, then such amount shall be further
reduced by the amount, if any, by which the total amount that the Company is
entitled to spend during the calendar year in which such quarter occurs in
respect of Capital Expenditures under Section 6.6(c) hereof exceeds the total
amount actually expended during such calendar year prior to the last day of
such quarter.



          “Consolidated Interest Expense” means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest (including, without limitation, accrued
interest whether or not paid in cash)) of Company and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Company and
its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers’ acceptance
financing and net costs under Interest Rate Agreements.



          “Consolidated Net Income” means, for any period, (i) the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP, minus
(ii) (a) the income of any Person (other than a Subsidiary of Company) in which
any other Person (other than Company or any of its Subsidiaries) has a joint
interest, except to the extent of the amount of dividends or other
distributions actually paid to Company or any of its Subsidiaries by such
Person during such period, (b) the income (or loss) of any Person accrued prior
to the date it becomes a Subsidiary of Company or is merged into or
consolidated with Company or any of its Subsidiaries or that Person’s assets
are acquired by Company or any of its Subsidiaries, (c) the income of any
Subsidiary of Company to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, (d) any after-tax gains or losses attributable
to Asset Sales or returned surplus assets of any Pension Plan, and (e) (to the
extent

9






 




not included in clauses (a) through (d) above) any net extraordinary gains
or net non-cash extraordinary losses.


          “Consolidated Total Debt” means, as at any date of determination, the
aggregate principal amount of all Indebtedness of Company and its Subsidiaries
determined on a consolidated basis in accordance with GAAP.



          “Consolidated Working Capital” means, as at any date of determination, the
excess of Consolidated Current Assets over Consolidated Current Liabilities.



          “Consolidated Working Capital Adjustment” means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the end of such period exceeds (or is less
than) Consolidated Working Capital as of the beginning of such period.



          “Contractual Obligation” means, as applied to any Person, any provision of
any Security issued by that Person or of any indenture, mortgage, deed of
trust, contract, undertaking, agreement or other instrument to which that
Person is a party or by which it or any of its properties is bound or to which
it or any of its properties is subject.



          “Contributing Guarantors” as defined in Section 7.2.



          “Conversion/Continuation Date” means the effective date of a continuation
or conversion, as the case may be, as set forth in the applicable
Conversion/Continuation Notice.



          “Conversion/Continuation Notice” means a Conversion/Continuation Notice
substantially in the form of Exhibit A.



          “Counterpart Agreement” means a Counterpart Agreement substantially in the
form of Exhibit H.



          “Credit Date” means the date of a Credit Extension.



          “Credit Document” means any of this Agreement, the Notes, if any, the
Collateral Documents and all other documents, instruments or agreements
executed and delivered by a Credit Party for the benefit of Agents or any
Lender in connection herewith.



          “Credit Extension” means the making of a Term Loan and the deemed
extension of credit made on the Closing Date with respect to the Term Loans
pursuant to Section 2.1.



          “Credit Party” means each Person (other than any Agent or any Lender or
any other representative thereof) from time to time party to a Credit Document.



          “Currency Agreement” means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement, each of which is for the purpose of hedging the
foreign currency risk associated with Company’s and its Subsidiaries’
operations.

10






 




          “Debtor” as defined in the Plan of Reorganization.



          “Default” means a condition or event that, after notice or lapse of time
or both, would constitute an Event of Default.



          “Deposit Account” means a demand, time, savings, passbook or like account
with a bank, savings and loan association, credit union or like organization,
other than an account evidenced by a negotiable certificate of deposit.



          “Disclosure Statement” means the disclosure statement dated July 22, 2002,
describing the Plan of Reorganization and the transactions and events
contemplated thereby, as supplemented from time to time prior to confirmation
of the Plan of Reorganization.



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



          “Domestic Subsidiary” means any Subsidiary organized under the laws of the
United States of America, any State thereof or the District of Columbia.



          “Effective Date” means the date upon which the Plan of Reorganization
shall have become effective in accordance with its terms.



          “Eligible Assignee” means (i) any Lender, any Affiliate of any Lender and
any Related Fund (any two or more Related Funds being treated as a single
Eligible Assignee for all purposes hereof), (ii) any commercial bank, insurance
company, investment or mutual fund or other entity that is an “accredited
investor” (as defined in Regulation D under the Securities Act) and which
extends credit or buys loans as one of its businesses and (iii) any other
Person consented to by Company and Administrative Agent; provided, no entity
which would be an Increased-Cost Lender shall be an Eligible Assignee.



          “Employee Benefit Plan” means any “employee benefit plan” as defined in
Section 3(3) of ERISA.



          “Environmental Claim” means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any governmental authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law; (ii) in connection with any
Hazardous Material or any actual or alleged Hazardous Materials Activity; or
(iii) in connection 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 future foreign or
domestic, federal or state (or any subdivision of either of them), statutes,
ordinances, orders, rules, regulations, judgments, Governmental Authorizations,
or any other requirements of governmental authorities relating to (i)
environmental matters, including those relating to any Hazardous Materials
Activity; (ii) the generation, use, storage, transportation or disposal of
Hazardous Materials; or (iii) occupational safety and health, land use or the
protection of human

11






 




health or welfare, in any manner applicable to Company or any of its
Subsidiaries or any Facility.


          “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.



          “ERISA Affiliate” means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of
Section 414(c) of the Internal Revenue Code of which that Person is a member;
and (iii) any member of an affiliated service group within the meaning of
Section 414(m) or (o) of the Internal Revenue Code of which that Person is a
member. Any former ERISA Affiliate of Company or any of its Subsidiaries shall
continue to be considered an ERISA Affiliate of Company or any such Subsidiary
within the meaning of this definition with respect to the period such entity
was an ERISA Affiliate of Company or such Subsidiary and with respect to
liabilities arising after such period for which Company or such Subsidiary
could be liable under the Internal Revenue Code or ERISA. Notwithstanding
anything in the foregoing to the contrary, no Person shall be considered an
ERISA Affiliate of the Company or its Subsidiaries if neither the Company nor
one of its Subsidiaries owns any equity interest in such Person.



          “ERISA Event” means (i) a “reportable event” within the meaning of Section
4043 of ERISA and the regulations issued thereunder with respect to any Pension
Plan (excluding those for which the provision for 30-day notice to the PBGC has
been waived by regulation); (ii) the failure to meet the minimum funding
standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension
Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate
such plan in a distress termination described in Section 4041(c) of ERISA; (iv)
the withdrawal by Company, any of its Subsidiaries or any of their respective
ERISA Affiliates from any Pension Plan with two or more contributing sponsors
or the termination of any such Pension Plan resulting in liability pursuant to
Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings
to terminate any Pension Plan, or the occurrence of any event or condition
which might constitute grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan; (vi) the imposition
of liability on Company, any of its Subsidiaries or any of their respective
ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of
the application of Section 4212(c) of ERISA; (vii) the withdrawal of Company,
any of its Subsidiaries or any of their respective ERISA Affiliates in a
complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of
ERISA) from any Multiemployer Plan if there is any potential liability
therefor, or the receipt by Company, any of its Subsidiaries or any of their
respective ERISA Affiliates of notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that
it 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 the
imposition on Company,

12






 




any of its Subsidiaries or any of their respective ERISA Affiliates of
fines, penalties, taxes or related charges under Chapter 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 Company
Employee Benefit Plan other than a Multiemployer Plan or the assets thereof, or
against Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in connection with any Company Employee Benefit Plan; (x) receipt
from the Internal Revenue Service of notice of the failure of any Pension Plan
(or any other Company Employee Benefit Plan intended to be qualified under
Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of
the Internal Revenue Code, or the failure of any trust forming part of any
Pension Plan to qualify for exemption from taxation under Section 501(a) of the
Internal Revenue Code; or (xi) the imposition of a Lien pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with
respect to any Pension Plan.


          “Eurodollar Rate Loan” means a Term Loan bearing interest at a rate
determined by reference to the Adjusted Eurodollar Rate.



          “Event of Default” means each of the conditions or events set forth in
Section 8.1.



          “Excess Common Equity Proceeds” means the net cash proceeds (net of
underwriting discounts and commissions and other costs and expenses associated
therewith, including legal fees and expenses), other than any such net proceeds
received in connection with any of the Rights, received by Company from the
issuance of common equity of Company substantially contemporaneously with a
Permitted Acquisition which are used to make such Permitted Acquisition.



          “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time, and any successor statute.



          “Existing Credit Agreement” means that certain Credit and Guaranty
Agreement dated as of February 3, 2000 among Company, the Guarantors party
thereto, the Lenders party thereto, Toronto Dominion (Texas), Inc., as
Administrative Agent, Barclays Bank PLC and JPMorgan Chase Bank, as
Co-Documentation Agents, Goldman Sachs Credit Partners L.P., as Co-Lead
Arranger and Syndication Agent, and TD Securities (USA) Inc., as Co-Lead
Arranger, as amended, supplemented or otherwise modified through the Closing
Date.



          “Exit Revolver” means the credit facility, if any, to be entered into by
Company pursuant to the Stand-Alone Plan, together with all notes, security
agreements, mortgages, pledge agreements and guarantees delivered in connection
therewith, as the same may be amended, restated, replaced, refinanced or
extended from time to time; provided that the fees, pricing and documentation
for the foregoing shall be in a form and on terms satisfactory to
Administrative Agent and the Requisite Lenders. A credit facility shall be the
Exit Revolver for purposes of this Agreement only if it contains a statement to
the effect that it is the Exit Revolver for purposes of this Agreement.

13






 




          “Facility” means any real property (including all buildings, fixtures or
other improvements located thereon) now, hereafter or heretofore owned, leased,
operated or used by Company or any of its Subsidiaries or any of their
respective predecessors or Affiliates.



          “Fair Share” as defined in Section 7.2.



          “Fair Share Contribution Amount” as defined in Section 7.2.



          “Fair Share Shortfall” as defined in Section 7.2.



          “Federal Funds Effective Rate” means for any day, the rate per annum
(expressed, as a decimal, provided upwards, if necessary, to the next higher
1/100 of 1%) equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided, (i) if such
day is not a Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Business Day as so published on
the next succeeding Business Day, and (ii) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Rate for such day shall be
the average rate charged to Administrative Agent, in its capacity as a Lender,
on such day on such transactions as determined by Administrative Agent.



          “Filing Date” as defined in the recitals hereto.



          “Final Order” means an order of the Bankruptcy Court entered in the
Chapter 11 Case, granting, among other things, final approval of the Credit
Documents and the Restructuring Transaction Documents, the transactions
contemplated by the Restructuring Transaction Documents with respect to the
Stand-Alone Plan, this Agreement and the other Credit Documents and the Liens
described in the recitals hereto to Administrative Agent for the benefit of
Lenders, in form and substance reasonably satisfactory to Administrative Agent
and Requisite Lenders, and which is final and non-appealable and for which (i)
the time to seek rehearing or file a notice of appeal has expired, (ii) no stay
is in effect and (iii) no appeal or request for a stay or other review is
pending.



          “Financial Officer Certification” means, with respect to the financial
statements for which such certification is required, the certification of the
chief financial officer or treasurer of Company that such financial statements
fairly present, in all material respects, the financial condition of Company
and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to changes
resulting from audit and normal year-end adjustments.



          “First Priority” means, with respect to any Lien purported to be created
in any Collateral pursuant to any Collateral Document, that such Lien is the
only Lien to which such Collateral is subject, other than Permitted Liens.



          “Fiscal Quarter” means a fiscal quarter of any Fiscal Year.



          “Fiscal Year” means the fiscal year of Company and its Subsidiaries ending
on December 31 of each calendar year.

14






 




          “Flood Hazard Property” means any Real Estate Asset subject to a mortgage
in favor of Administrative Agent, for the benefit of Lenders, and located in an
area designated by the Federal Emergency Management Agency as having special
flood or mud slide hazards.



          “FL/Telmex Plan” as defined in the Plan of Reorganization.



          “Foreign Subsidiary” means any Subsidiary that is not a Domestic
Subsidiary.



          “Funding Guarantors” as defined in Section 7.2.



          “GAAP” means, subject to the limitations on the application thereof set
forth in Section 1.2, United States generally accepted accounting principles in
effect as of the date of determination thereof.



          “General Unsecured Claims” as defined in the Plan of Reorganization.



          “Geographic Market” means the operations of a particular line of business
conducted in a particular geographic market by a Subsidiary of Company,
including in the case of multistate lines of business all the states or
portions thereof covered thereby.



          “Governmental Acts” means any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority.



          “Governmental Authority” means any federal, state, municipal, national or
other government, governmental department, commission, board, bureau, court,
agency or instrumentality or political subdivision thereof or any entity or
officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with a state of the United States, the United
States, or a foreign entity or government.



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



          “Grantor” as defined in the Pledge and Security Agreement.



          “Guaranteed Obligations” as defined in Section 7.1.



          “Guarantor” means each wholly-owned Domestic Subsidiary of Company.



          “Guaranty” means the guaranty of each Guarantor set forth in Section 7.



          “Hazardous Materials” means any chemical, material or substance, exposure
to which is prohibited, limited or regulated by any Governmental Authority or
which may or could pose a hazard to the health and safety of the owners,
occupants or any Persons in the vicinity of any Facility or to the indoor or
outdoor environment.



          “Hazardous Materials Activity” means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture,

15






 




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 the foregoing.


          “Hedge Agreement” means an Interest Rate Agreement or a Currency Agreement
entered into in order to satisfy the requirements of this Agreement or
otherwise in the ordinary course of Company’s or any of its Subsidiaries’
businesses.



          “Highest Lawful Rate” means the maximum lawful interest rate, if any, that
at any time or from time to time may be contracted for, charged, or received
under the laws applicable to any Lender which are presently in effect or, to
the extent allowed by law, under such applicable laws which may hereafter be in
effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.



          “Historical Financial Statements” means as of the Closing Date, (i) the
audited financial statements of Company and its Subsidiaries, for the Fiscal
Year 2001, consisting of balance sheets and the related consolidated statements
of income, stockholders’ equity and cash flows for such Fiscal Year, and (ii)
the unaudited financial statements of Company and its Subsidiaries as at the
most recently ended Fiscal Quarter, consisting of a balance sheet and the
related consolidated statements of income, stockholders’ equity and cash flows
for the three-, six- or nine-month period, as applicable, ending on such date,
and, in the case of clauses (i) and (ii), certified by the chief financial
officer or treasurer of Company that they fairly present, in all material
respects, the financial condition of Company and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows for
the periods indicated, subject to changes resulting from audit and normal
year-end adjustments.



          “Icahn Family” means and includes: (i) Carl C. Icahn, his spouse, and his
children; (ii) the current and former spouses of any person described in clause
(i) of this definition; and (iii) the ancestors, siblings and descendants,
whether by blood, marriage or adoption, of any person described in clause (i)
or (ii) of this definition.



          “Increased-Cost Lenders” as defined in Section 2.20.



          “Indebtedness", as applied to any Person, means, without duplication, (i)
all indebtedness for borrowed money; (ii) that portion of obligations with
respect to Capital Leases that is properly classified as a liability on a
balance sheet in conformity with GAAP; (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations for
borrowed money; (iv) any obligation owed for all or any part of the deferred
purchase price of property or services (excluding any such obligations incurred
under ERISA and ordinary course trade payables), which purchase price is (a)
due more than six months from the later of the date of incurrence of the
obligation in respect thereof or the delivery of property or services or (b)
evidenced by a note or similar written instrument; (v) all indebtedness secured
by any Lien on any property or asset owned or held by that Person regardless of
whether the indebtedness secured thereby shall have been assumed by that Person
or is nonrecourse to the credit of that Person; (vi) the face amount of any
letter of credit issued for the account of that Person or as to which that
Person is otherwise liable for reimbursement of drawings and, without

16






 




duplication, any unreimbursed drawings thereunder; (vii) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another; (viii) any obligation of
such Person the primary purpose or intent of which is to provide assurance to
an obligee that the obligation of the obligor thereof will be paid or
discharged, or any agreement relating thereto will be complied with, or the
holders thereof will be protected (in whole or in part) against loss in respect
thereof; (ix) any liability of such Person for the obligation of another
through any agreement (contingent or otherwise) (a) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide funds
for the payment or discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise) or (b) to
maintain the solvency or any balance sheet item, level of income or financial
condition of another if, in the case of any agreement described under
subclauses (a) or (b) of this clause (ix), the primary purpose or intent
thereof is as described in clause (viii) above; and (x) obligations of such
Person in respect of any Hedge Agreement or exchange traded or over the counter
derivative transaction, whether entered into for hedging or speculative
purposes; provided, in no event shall such Obligations in this clause (x) be
deemed “Indebtedness” for any purpose under Section 6.6.


          “Indemnified Liabilities” 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), expenses and
disbursements of any kind or nature whatsoever (including the reasonable fees
and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party
or a potential party thereto, and any fees or expenses incurred by Indemnitees
in enforcing this indemnity), whether direct, indirect or 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 or equitable cause or on
contract or otherwise, that may be imposed on, incurred by, or asserted against
any such Indemnitee, in any manner relating to or arising out of (i) the
Existing Credit Agreement, this Agreement, the other Credit Documents or any
Restructuring Transaction Document or the transactions contemplated hereby or
thereby (including Lenders’ agreement to make Credit Extensions or the use or
intended use of the proceeds thereof, or any enforcement of any of the Credit
Documents (including any sale of, collection from, or other realization upon
any of the Collateral or the enforcement of the Guaranty)); (ii) the statements
contained in the commitment letter delivered by any Lender to Company with
respect to the transactions contemplated by this Agreement; or (iii) any
Environmental Claim or any Hazardous Materials Activity relating to or arising
from, directly or indirectly, any past or present activity, operation, land
ownership, or practice of Company or any of its Subsidiaries or predecessors,
but excluding Taxes, liabilities in connection with net or gross revenues,
receipts or profits, and excluding liabilities arising solely from transactions
among Lenders.



          “Indemnitee” as defined in Section 10.3.



          “Installment” as defined in Section 2.10.

17






 



           “Installment Date” as defined in Section 2.10.



          “Intellectual Property” means “Intellectual Property” as such term is
defined in the Pledge and Security Agreement.



          “Intercreditor Agreement” means the Intercreditor Agreement, if any, to be
entered into by the administrative agent under the Exit Revolver and
Administrative Agent on behalf of the Lenders, with the approval of the
Required Lenders.



          “Interest Coverage Ratio” means the ratio as of the last day of any Fiscal
Quarter of (a) Consolidated EBITDA for the four consecutive Fiscal Quarters
ending on such date to (b) Consolidated Interest Expense for such four
consecutive Fiscal Quarters.



          “Interest Payment Date” means with respect to (i) any Base Rate Loan, each
March 31, June 30, September 30 and December 31 of each year, commencing on the
first such date to occur after the Closing Date and the final maturity date of
such Base Rate Loan; and (ii) any Eurodollar Rate Loan, the last day of each
Interest Period applicable to such Eurodollar Rate Loan; provided, in the case
of each Interest Period longer than three months “Interest Payment Date” shall
also include each date that is three months, or an integral multiple thereof,
after the commencement of such Interest Period.



          “Interest Period” means, in connection with a Eurodollar Rate Loan, an
interest period of one, two, three or six months (i) initially, commencing on
the Conversion/Continuation Date thereof; and (ii) thereafter, commencing on
the day on which the immediately preceding Interest Period expires; provided,
(a) if an Interest Period would otherwise expire on a day that is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day unless no further Business Day occurs in such month, in which case such
Interest Period shall expire on the immediately preceding Business Day; (b) any
Interest Period that begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall, subject to clauses (c) and (d), of
this definition, end on the last Business Day of a calendar month; (c) no
Interest Period with respect to any portion of any Term Loans shall extend
beyond the Term Loan Maturity Date; and (d) no Interest Period with respect to
any portion of any Term Loans shall extend beyond a date on a which Company is
required to make a scheduled payment of principal of such Term Loans, unless
the sum of (1) the aggregate principal amount of such Term Loans that are Base
Rate Loans, and (2) the aggregate principal amount of such Term Loans that are
Eurodollar Rate Loans with Interest Periods expiring on or before such date
equals or exceeds the principal amount required to be paid on such Term Loans
on such date.



          “Interest Rate Agreement” means any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement, interest rate hedging
agreement or other similar agreement or arrangement, each of which is for the
purpose of hedging the interest rate exposure associated with Company’s and its
Subsidiaries’ operations.



          “Interest Rate Determination Date” means, with respect to any Interest
Period, the date that is two Business Days prior to the first day of such
Interest Period.

18






 




          “Internal Revenue Code” means the United States Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter, and any
successor statute.



          “Investment” means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any of the Securities of any other Person (other than, in the case
of any such acquisition or purchase by Company and the Guarantors, any
Guarantor or any person who becomes a Guarantor in connection with such
Investment) (ii) any direct or indirect redemption, retirement, purchase or
other acquisition for value, by any Subsidiary of Company from any Person
(other than, in the case of any such action by Company and the Guarantors, any
Guarantor or any person who becomes a Guarantor in connection with such
Investment), of any Capital Stock of such Person; and (iii) any direct or
indirect loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business) or capital contribution by Company or any of
its Subsidiaries to any other Person (other than Company or, in the case of any
such loan, advance or capital contribution by Company and the Guarantors, any
Guarantor or any person who becomes a Guarantor in connection with such
Investment), including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that other
Person in the ordinary course of business. The amount of any Investment shall
be the original cost of such Investment plus the cost of all additions thereto,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment.



          “Investment Property” as defined in the Pledge and Security Agreement.



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



          “Landlord Consent and Estoppel” means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, pursuant to which, among other things, the landlord
consents to the granting of a Mortgage on such Leasehold Property by the Credit
Party tenant, such Landlord Consent and Estoppel to be in form and substance
acceptable to Administrative Agent in its reasonable discretion, but in any
event sufficient for the Administrative Agent to obtain a Title Policy with
respect to such Mortgage.



          “Leasehold Property” means any leasehold interest of any Credit Party as
lessee under any lease of real property, other than any such leasehold interest
designated from time to time by Administrative Agent in its sole discretion as
not being required to be included in the Collateral.



          “Lender” means each Person listed on Appendix A hereto as a Lender,
together with each such institution’s successors and permitted assigns.



          “Lender Counterparty” means each Lender or any Affiliate thereof
counterparty to a Hedge Agreement entered into to satisfy the requirements of
this Agreement.

19






 




          “Lien” means (i) any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any agreement to give
any of the foregoing, any conditional sale or other title retention agreement
or any lease in the nature thereof) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing and (ii) in the
case of Securities, any purchase option, call or similar right of a third party
with respect to such Securities.



          “LMDS License” means a local multipoint distribution service license
granted by the Federal Communications Commission in the 27.5-31 GHz range, as
defined in 47 C.F.R.- Part 101, et. seq.



          “Management Incentive Plan” means the stock option plan pursuant to the
Stand-Alone Plan providing for the grant to officers, employees and directors
of Company and its Subsidiaries of options to acquire shares common stock of
Company.



          “Management Options” means the stock options issued or reserved for
issuance to officers, employees and directors of Company and its Subsidiaries
under the Management Incentive Plan.



          “Management Retention Bonus Plan” means the employee retention plan
pursuant to the Stand-Alone Plan providing for the payment of retention bonuses
in an amount not to exceed $25,000,000 in aggregate.



          “Margin Stock” as defined in Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.



          “Material Adverse Effect” means a material adverse effect on (i) the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Company and its Subsidiaries taken as a whole; (ii) the ability of
any Credit Party to fully and timely perform the Obligations; (iii) the
legality, validity, binding effect or enforceability against a Credit Party of
a Credit Document to which it is a party; (iv) the rights, remedies and
benefits available to, or conferred upon, Administrative Agent and any Lender
under any Credit Document; or (v) the Collateral or the Administrative Agent’s
Liens, on behalf of Administrative Agent and Lenders on the Collateral or the
priority of such Liens.



          “Material Contract” means any contract or other arrangement to which
Company or any of its Subsidiaries is a party (other than the Credit Documents)
for which breach, nonperformance, cancellation or failure to renew could
reasonably be expected to have a Material Adverse Effect.



          “Material Real Estate Asset” means (i) a fee-owned Real Estate Asset
having a fair market value in excess of $5,000,000 as of the date of the
acquisition thereof, (ii) all Leasehold Properties other than those (a) with
respect to which the aggregate payments under the term of the lease are less
than $5,000,000 per annum, or (b) that relate to a site the loss of which would
not otherwise have a Material Adverse Effect, or (iii) any other Real Estate
Asset that the Requisite Lenders have designated as such.

20






 




          “Maximum Consolidated Capital Expenditures Amount” as defined in Section
6.6(c).



          “Maximum Exit Revolver Amount” means, as at any date of determination, an
amount determined for Company and its Subsidiaries on a consolidated basis
equal to the positive difference, if any, between (i) $200,000,000 and (ii) the
sum of (x) the aggregate amount of Cash proceeds received by Company with
respect to the Rights and (y) the aggregate amount of any permanent reductions
in the Exit Revolver commitments which are required to be made to the Exit
Revolver under the terms of the Exit Revolver as contemplated in Sections
2.12(a), (b), (c) and (d).



          “Moody’s” means Moody’s Investor Services, Inc.



          “Mortgage” means a mortgage, deed of trust or similar instrument, in form
reasonably satisfactory to Administrative Agent, as it may be amended,
supplemented or otherwise modified from time to time.



          “Multiemployer Plan” means any Employee Benefit Plan which is a
“multiemployer plan” as defined in Section 3(37) of ERISA, contributed to, or
required to be contributed to, by Company, any of its Subsidiaries, or any of
their respective ERISA Affiliates.



          “NAIC” means The National Association of Insurance Commissioners, and any
successor thereto.



          “Net Asset Sale Proceeds” means, with respect to any Asset Sale (other
than an asset sale pursuant to existing contracts with Level 3 Communications
Inc. with an aggregate value of not more than $25,000,000 pursuant to the
agreements listed on Schedule 1.1(b)), an amount equal to: (i) Cash payments
(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 so
received) received by Company or any of its Subsidiaries from such Asset Sale,
minus (ii) any bona fide direct costs incurred in connection with such Asset
Sale, including (a) provision for income or gains taxes on any gain recognized
in connection with such Asset Sale (whether or not such taxes will actually be
paid or are payable), (b) payment or securing of the outstanding principal
amount of, premium or penalty, if any, and interest on any Indebtedness (other
than the Term Loans or the Exit Revolver) that is secured by a Lien on the
stock or assets in question or that is otherwise required to be repaid or
secured under the terms thereof as a result of such Asset Sale, (c) attorney’s
fees, accountant’s fees, investment banking fees and other customary costs,
fees, expenses and commissions actually incurred in connection therewith, and
(d) a reasonable reserve for any indemnification payments and other liabilities
(fixed or contingent) attributable to seller’s indemnities and representations
and warranties to purchaser in respect of such Asset Sale undertaken by Company
or any of its Subsidiaries in connection with such Asset Sale; provided that
the amount of any subsequent reduction of such reserve (other than in
connection with a payment in respect of such liability) shall be deemed to be
Net Asset Sale Proceeds occurring on the date of such reduction.



          “Net Equity Proceeds” means, (a) 75% of all Cash proceeds received with
respect to the Rights in excess of $200,000,000 and (b) 50% of any Cash
proceeds received by

21






 




Company or any of its Subsidiaries after the Closing Date from a capital
contribution to, or the issuance of any Capital Stock of, Company or any of its
Subsidiaries in excess of the Net Equity Proceeds Base Amount (other than (i)
any capital contributions by Company or any of its Subsidiaries to any of
Company’s wholly-owned Subsidiaries or the issuance of any Capital Stock by any
of Company’s Subsidiaries to Company or any of Company’s wholly-owned
Subsidiaries, (ii) any Cash proceeds received with respect to the Rights,
(iii) any net Cash proceeds received from the exercise of any Warrants or any
employee options, and (iv) Excess Common Equity Proceeds used to make a
Permitted Acquisition), in each case net of underwriting discounts and
commissions and other reasonable costs and expenses associated therewith,
including reasonable legal fees and expenses.


          “Net Equity Proceeds Base Amount” means an amount (not less than zero)
equal to $200,000,000 minus an amount up to the first $200,000,000 of Cash
proceeds received with respect to the Rights.



          “Net FL/Telmex Recovery Proceeds” shall mean the Successful Recovery less
amounts payable on account of the following items paid in the following order:
(i) Old Common Stock Interests pursuant to Section 3.7(b) of the Plan of
Reorganization, (ii) reasonable expenses of the Debtor or the Company relating
to the Successful Recovery (including, without limitation, attorney’s fees and
out-of-pocket expenses) and pursuant to the Shareholder Stipulation and,
subject to the consent of the Official Committee of Unsecured Creditors, not to
be unreasonably withheld, any similar agreements, (iii) General Unsecured
Claims and Senior Note Claims pursuant to Sections 3.3(b)(ii) and 3.3(c)(ii) of
the Plan of Reorganization.



          “Net Insurance/Condemnation Proceeds” means an amount equal to: (i) any
Cash payments or proceeds received by Company or any of its Subsidiaries (a)
under any casualty insurance policy in respect of a covered loss thereunder or
(b) as a result of the taking of any assets of Company or any of 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 a
purchaser with such power under threat of such a taking, minus (ii) (a) any
actual and reasonable costs incurred by Company or any of its Subsidiaries in
connection with the adjustment or settlement of any claims of Company or such
Subsidiary in respect thereof, and (b) any bona fide direct costs incurred in
connection with any sale of such assets as referred to in clause (i)(b) of this
definition, including (1) provision for income or gains taxes on any gain
recognized in connection therewith (whether or not such taxes will actually be
paid or are payable), (2) payment or securing of the outstanding principal
amount of, premium or penalty, if any, and interest on any Indebtedness (other
than the Term Loans or the Exit Revolver) that is secured by a Lien on the
stock or assets in question or that is otherwise required to be repaid or
secured under the terms thereof as a result of any sale of such assets, (3)
attorney’s fees, accountant’s fees, investment banking fees and other customary
costs, fees, expenses and commissions actually incurred in connection
therewith, and (4) a reasonable reserve for any indemnification payments and
other liabilities (fixed or contingent) attributable to seller’s indemnities
and representations and warranties to purchaser in respect of such asset sale
undertaken by Company or any of its Subsidiaries in connection therewith;
provided that the amount of any subsequent reduction of such reserve (other
than in connection with a payment in respect of such liability) shall be deemed
to be Net Insurance/Condemnation Proceeds occurring on the date of such
reduction.

22






 




          “New Series A Warrants” means the warrants of Company issued as of the
Closing Date and expiring seven years after the date of issuance, subject to
the terms and conditions of the Warrant Agreement, to purchase common stock of
Company at an exercise price of $6.25 per share as authorized under the
Stand-Alone Plan.



          “New Series B Warrants” means the warrants of Company issued as of the
Closing Date and expiring seven years after the date of issuance, subject to
the terms and conditions of the Warrant Agreement, to purchase common stock of
Company at an exercise price of $7.50 per share as authorized under the
Stand-Alone Plan.



          “New Series C Warrants” means the warrants of Company issued as of the
Closing Date and expiring seven years after the date of issuance, subject to
the terms and conditions of the Warrant Agreement, to purchase common stock of
Company at an exercise price of $10.00 per share as authorized under the
Stand-Alone Plan.



          “New XO Common Stock” means common stock of Company issued to the holders
of Senior Secured Lender Claims as authorized under the Stand-Alone Plan.



          “Nontransferable Rights” means the rights issued to certain holders of
claims against Company to purchase common stock of Company as authorized under
the Stand-Alone Plan.



          “Non-US Lender” as defined in Section 2.18(c).



          “Note” means a Term Loan Note.



          “Notice” means a Conversion/Continuation Notice.



          “Obligations” means all obligations of every nature of each Credit Party
from time to time owed to the Administrative Agent, the Lenders or any of them
or their respective Affiliates under any Credit Document or Hedge Agreement
required to be entered into pursuant to Section 5.13 (including, without
limitation, with respect to a Hedge Agreement, obligations owed thereunder to
any Person who was a Lender or an Affiliate of a Lender at the time such Hedge
Agreement was entered into), whether for principal, interest (including
interest which, but for the filing of a petition in bankruptcy with respect to
such Credit Party, would have accrued on any Obligation, whether or not a claim
is allowed against such Credit Party for such interest in the related
bankruptcy proceeding), payments for early termination of Hedge Agreements,
fees, expenses, indemnification or otherwise.



          “Obligee Guarantor” as defined in Section 7.7.



          “Official Committee of Unsecured Creditors” as defined in the Plan of
Reorganization.



          “Old Common Stock Interests” as defined in the Plan of Reorganization.



          “Organizational Documents” means (i) with respect to any corporation, its
certificate or articles of incorporation, as amended, and its by-laws, as
amended, (ii) with respect

23






 




to any limited partnership, its certificate of limited partnership, as
amended, and its partnership agreement, as amended, (iii) with respect to any
general partnership, its partnership agreement, as amended, and (iv) with
respect to any limited liability company, its articles of organization, as
amended, and its operating agreement, as amended. In the event any term or
condition of this Agreement or any other Credit Document requires any
Organizational Document to be certified by a secretary of state or similar
governmental official, the reference to any such “Organizational Document”
shall only be to a document of a type customarily certified by such
governmental official.


          “PBGC” means the Pension Benefit Guaranty Corporation or any successor
thereto.



          “Pension Plan” means any Company Employee Benefit Plan and any Employee
Benefit Plan sponsored, maintained or contributed to, or required to be
contributed to, by an ERISA Affiliate of Company or any of its Subsidiaries (in
each case other than a Multiemployer Plan) which is subject to Section 412 of
the Internal Revenue Code or Section 302 or Title IV of ERISA.



          “Permitted Acquisition” means (a) the Telecom Nevada Acquisition or (b)
any acquisition by Company and its Subsidiaries, whether by purchase, merger or
otherwise, of all or substantially all of the assets of, of more than 80% of
the Capital Stock of, or a business line or a division of, any Person;
provided:



          (i) immediately prior to, and after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing or would result
therefrom;



          (ii) all transactions in connection therewith shall be consummated in
accordance with all applicable laws and in conformity with all applicable
Governmental Authorizations;



          (iii) all of the equity Securities acquired or otherwise issued by such
Person or any newly formed Subsidiary of Company in connection with such
acquisition (limited, in the case of the Capital Stock of the Company’s or any
Guarantor’s Foreign Subsidiaries, to 65% of the Capital Stock of the Company or
any Guarantor’s first tier Foreign Subsidiaries) shall be pledged to
Administrative Agent, for the benefit of Lenders, pursuant to the Pledge and
Security Agreement, and Company shall have taken, or caused to be taken, as of
the date such Person becomes a Subsidiary of Company, each of the actions set
forth in Section 5.9; provided that such actions shall not be required (A) for
any such Securities in the nature of directors qualifying shares required
pursuant to applicable law or (B) for other collateral security as to which a
grant of a security interest would constitute a violation of any restriction
on such grant, unless and until any such restriction is removed; it being
understood that no such restriction shall have been created in contemplation of
or in connection with any such acquisition;



          (iv) the aggregate amount of Indebtedness incurred (including all
Indebtedness incurred, repaid or assumed in connection with all acquisitions
occurring after the Closing Date and net of Cash and Cash Equivalents
acquired), and Capital Stock issued and/or Excess

24






 




Common Equity Proceeds expended in respect of all such acquisitions after
the Closing Date shall not exceed $50,000,000 in the aggregate;


          (v) all Persons, assets or divisions acquired shall be in the
Telecommunications Business or such other lines of business as may be consented
to by Requisite Lenders;



          (vi) (A) Company and its Subsidiaries shall be in compliance with,
immediately before and after giving pro forma effect (using the acquired
assets’, business lines’, divisions’ or Person’s annualized actual Consolidated
EBITDA for the most recently completed Fiscal Quarter immediately preceding
such acquisition) thereto, Section 6.6 through the Term Loan Maturity Date, and
(B) Company shall have delivered to Administrative Agent at least 5 Business
Days prior to such proposed Permitted Acquisition a revised set of financial
projections and a certificate in the form of a Compliance Certificate
evidencing such compliance, and such projections and certificate shall be
reasonably satisfactory to Administrative Agent;



          (vii) the only consideration to be paid by the Company or any Subsidiary
in connection with any Permitted Acquisition (other than an assumption of
Indebtedness) shall be in the form of common stock of Company and/or from
Excess Common Equity Proceeds; and



          (viii) Company may choose to designate the acquisition of
Telecommunications Assets, or companies substantially all of whose business is
the ownership (but not operation) of such assets, as Capital Expenditures
acquired pursuant to Section 6.5(d).



          “Permitted Equipment Financing” means one or more purchase money, vendor
or similar equipment financing facilities entered into by Company (i) pursuant
to which Company may be advanced funds principally to purchase or lease
equipment or services from the provider of such financing or its affiliates,
(ii) which may be secured only by the assets being financed thereby and (iii)
the form and substance of which are reasonably satisfactory to the
Administrative Agent, provided that any Subsidiary of Company that receives the
assets acquired in any such equipment financing may grant liens on such assets
in favor of the financial institutions providing such financing to secure the
Indebtedness incurred by Company in connection therewith.



          “Permitted Holder” means and includes: (i) any member of the Icahn Family;
(ii) any conservatorship, custodianship, or decedent’s estate of any member of
the Icahn Family, (iii) any trust established for the benefit of any Person
described in clause (i) or (ii) of this definition; and (iv) any corporation,
limited liability company, partnership, or other entity, the controlling equity
interests in which are held by or for the benefit of any one or more persons
described in clause (i), (ii), or (iii) of this definition; and (v) any
foundation or charitable organization established by a member of the Icahn
Family, and having at least one director, trustee, or member who is a member of
the Icahn Family.



          “Permitted Indebtedness” means Indebtedness incurred by Company (i) which
is unsecured, (ii) which shall have no required payments of principal (other
than required payments of principal pursuant to customary asset sale provisions
similar to those contained in high yield debt offerings at the time for
comparable issuers and customary definitions of change

25






 




of control substantially similar to those contained in high yield debt
offerings at the time for comparable issuers) prior to June 30, 2011 and (iii)
the provisions of the definitive documentation of which shall not contain
covenants, defaults, remedies, required prepayment, required redemption or
other similar non-economic terms more restrictive on, or less favorable to,
Company in a material manner than those customarily contained in high yield
debt offerings at the time for comparable issuers.


          “Permitted Liens” means each of the Liens permitted pursuant to Section
6.2.



          “Person” means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or
other organizations, whether or not legal entities, and Governmental
Authorities



          “Plan of Reorganization” means the Third Amended Chapter 11 Plan of
Reorganization (including all exhibits thereto) of Company dated July 22, 2002
confirmed by the Bankruptcy Court in the Chapter 11 Case.



          “Pledge and Security Agreement” means the Pledge and Security Agreement
substantially in the form of Exhibit I, as it may be amended, supplemented or
otherwise modified from time to time.



          “Preferred Stock” means any and all series of Company’s preferred stock
issued from time to time.



          “Prime Rate” means the rate of interest per annum that Citibank, N.A. (or
such other bank designated by Company and reasonably acceptable to the
Requisite Lenders) announces from time to time as its prime lending rate, as in
effect from time to time. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer.
Mizuho or any other Lender may make commercial loans or other loans at rates
of interest at, above or below the Prime Rate.



          “Principal Office” means, for Administrative Agent, such Person’s
“Principal Office” as set forth on Appendix B, or such other office as such
Person may from time to time designate in writing to Company and each Lender.



          “Pro Rata Share” means with respect to all payments, computations and
other matters relating to the Term Loan of any Lender, the percentage obtained
by dividing (a) the Term Loan Exposure of that Lender by (b) the aggregate Term
Loan Exposure of all Lenders.



          “Real Estate Asset” means, at any time of determination, any interest
(fee, leasehold or otherwise) then owned by any Credit Party in any real
property.



          “Record Document” means, with respect to any Leasehold Property, (i) the
lease evidencing such Leasehold Property or a memorandum thereof, executed and
acknowledged by the owner of the affected real property, as lessor, or (ii) if
such Leasehold Property was acquired or subleased from the holder of a Recorded
Leasehold Interest, the applicable assignment or

26






 




sublease document, executed and acknowledged by such holder, in each case
in form sufficient to give such constructive notice upon recordation and
otherwise in form reasonably satisfactory to Administrative Agent.


          “Recorded Leasehold Interest” means a Leasehold Property with respect to
which a Record Document has been recorded in all places necessary or desirable,
in Administrative Agent’s reasonable judgment, to give constructive notice of
such Leasehold Property to third-party purchasers and encumbrancers of the
affected real property.



          “Register” as defined in Section 2.5(b).



          “Registration Rights Agreement” means that certain Registration Rights
Agreement dated as of January 16, 2003, by and among the parties listed on
Schedule I thereto and Company.



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



          “Regulation S-X” means Regulation S-X promulgated under the Securities Act
and as interpreted by the staff of the Securities and Exchange Commission, as
in effect from time to time.



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



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



          “Replacement Lender” as defined in Section 2.20.



          “Requisite Lenders” means one or more Lenders having or holding Term Loan
Exposure representing more than 50% of the aggregate Term Loan Exposure of all
Lenders.



          “Restricted Junior Payment” means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of Company
or any of its Subsidiaries now or hereafter outstanding, except a dividend
payable on account of Preferred Stock and payable in shares of Preferred Stock
or in shares of common stock of Company or on account of common stock and
payable in shares of common stock of Company; (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value,
direct or indirect, of any shares of any class of stock of Company or any of
its Subsidiaries now or hereafter outstanding, except to the extent payable in
exchange for shares of that class of stock or for shares of common stock of
Company and except for the Telecom Nevada Acquisition; (iii) any payment made
to retire, or to obtain the surrender of, any outstanding warrants, options or

27






 




other rights to acquire shares of any class of stock of Company or any of
its Subsidiaries now or hereafter outstanding, except to the extent paid in
shares of the related class of stock or in shares of common stock of Company or
in other warrants, options or other rights to acquire shares of any class of
stock of Company; and (iv) any payment or prepayment of principal of, premium,
if any, or interest on, or redemption, purchase, retirement, defeasance
(including in-substance or legal defeasance), sinking fund or similar payment
with respect to, any Indebtedness other than the Term Loans or the Exit
Revolver, except to the extent paid by any Capital Stock of Company.


          “Restructuring Transaction” means the transactions contemplated by the
Restructuring Transaction Documents with respect to the Stand-Alone Plan.



          “Restructuring Transaction Documents” means, collectively, the Warrants,
the Warrant Agreement, the Rights, the Management Incentive Plan, the
Management Options, the Management Retention Bonus Plan, the Registration
Rights Agreement, the Plan of Reorganization, the Disclosure Statement, the
Organizational Documents of Company and all documents, agreements and
instruments relating to any of the foregoing.



          “Rights” means, collectively, the Nontransferable Rights and the
Transferable Rights.



          “S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill
Corporation.



          “Saving” as defined in Section 2.18(d).



          “Secured Party” as defined in the Pledge and Security Agreement.



          “Securities” means any stock, shares, partnership interests, voting trust
certificates, certificates of interest or participation in 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 commonly known as “securities” or any
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.



          “Securities Act” means the Securities Act of 1933, as amended from time to
time, and any successor statute.



          “Senior Note Claims” as defined in the Plan of Reorganization.



          “Senior Secured Lender Claim” has the meaning specified in the Plan of
Reorganization.



          “Shareholder Stipulation” as defined in the Plan of Reorganization.



          “Significant Subsidiary” means a Subsidiary, i.e., a “restricted
subsidiary”, that is a “significant subsidiary” as defined in Rule 1-02(w) of
Regulation S-X or is otherwise

28






 




designated a Significant Subsidiary by Company; provided that the relevant
percentage of consolidated revenues, consolidated assets and consolidated net
income of Company and its Subsidiaries which are measured for purposes of this
definition shall be 1%, and not as otherwise specified in such Rule.


          “Solvent” means, with respect to any Person, that as of the date of
determination both (i) (a) the sum of such Person’s debt (including contingent
liabilities) does not exceed all of its property, at a fair valuation; (b) the
present fair saleable value of the property of such Person is not less than the
amount that will be required to pay the probable liabilities on such Person’s
then existing debts as they become absolute and matured; (c) such Person’s
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (d) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (ii) such Person
is “solvent” within the meaning given that term and similar terms under
applicable laws relating to fraudulent transfers and conveyances. For purposes
of this definition, the amount of 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 or matured liability (irrespective of whether such contingent
liabilities meet the criteria for accrual under Statement of Financial
Accounting Standard No. 5).



          “Stand-Alone Plan” has the meaning specified in the Plan of
Reorganization.



          “Subsidiary” means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence
of any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and
policies thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person or a
combination thereof; provided, in determining the percentage of ownership
interests of any Person controlled by another Person, no ownership interest in
the nature of a “qualifying share” of the former Person shall be deemed to be
outstanding.



          “Successful Recovery” as defined in the Plan of Reorganization.



          “Supplemental Collateral Agent” as defined in Section 9.8(c).



          “Tax” means any present or future tax, levy, impost, duty, assessment,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed.



          “Tax on the overall net income” of a Person shall be construed as a
reference to a tax imposed by the jurisdiction in which that Person is
organized or in which that Person’s applicable principal office (and/or, in the
case of a Lender, its lending office) is located or in which that Person
(and/or, in the case of a Lender, its lending office) is deemed to be doing
business on or measured by all or part of the net or gross income or receipts,
profits or gains (whether worldwide, or only insofar as such income, profits or
gains are considered to arise in or

29






 




to relate to a particular jurisdiction, or otherwise) of that Person
(and/or, in the case of a Lender, its applicable lending office).


          “Telecom Nevada Acquisition” means the acquisition by the Borrower of the
minority interests in Telecommunications of Nevada, LLC, if and to the extent
approved by the board of directors of the Company.



          “Telecommunications Assets” means all assets, rights (contractual or
otherwise) and properties, whether tangible or intangible, used or intended for
use in connection with a Telecommunications Business.



          “Telecommunications Business” means the business of (i) transmitting, or
providing services relating to the transmission of, voice, video or data
through owned or leased transmission facilities, (ii) creating, developing or
marketing communications related network equipment, software and other devices
for use in a Telecommunication Business or (iii) evaluating, participating or
pursuing any other activity or opportunity that is primarily related to those
identified in (i) or (ii) above and shall, in any event, include all businesses
in which Company or any of its Subsidiaries are engaged on the Closing Date;
provided that the determination of what constitutes a Telecommunication
Business shall be made in good faith by the board of directors of the Company,
which determination shall be conclusive.



          “Terminated Lender” as defined in Section 2.20.



          “Term Loan” means a Term Loan made by a Lender to Company pursuant to
Section 2.1. The aggregate principal amount of the Term Loans as of the
Closing Date is $500,000,000.



          “Term Loan Exposure” means, with respect to any Lender, as of any date of
determination, the outstanding principal amount of the Term Loans of such
Lender.



          “Term Loan Maturity Date” means the earlier of (i) July 15, 2009 and (ii)
the date that all Term Loans shall become due and payable in full hereunder,
whether by acceleration or otherwise.



          “Term Loan Note” means a promissory note in the form of Exhibit B, as it
may be amended, supplemented or otherwise modified from time to time.



          “Transferable Rights” means the rights issued to the holders of Senior
Secured Lender Claims to purchase common stock of Company as authorized under
the Stand-Alone Plan.



          “Type of Term Loan” means with respect to any Term Loan, a Base Rate Loan
or a Eurodollar Rate Loan.



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

30






 




          “Unadjusted Eurodollar Rate Component” means that component of the
interest costs to Company in respect of a Eurodollar Rate Loan that is based
upon the rate obtained pursuant to clause (i) of the definition of Adjusted
Eurodollar Rate.



          “Warrant Agreement” means that certain Warrant Agreement, dated as of
January 16, 2003, pursuant to which the Warrants are issued and subject.



          “Warrants” means, collectively, the New Series A Warrants, New Series B
Warrants and New Series C Warrants.



     1.2 Accounting Terms. Except as otherwise expressly provided herein, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to Section 5.1(a),
5.1(b) and 5.1(c) shall be prepared in accordance with GAAP as in effect at the
time of such preparation (and delivered together with the reconciliation
statements provided for in Section 5.1(e), if applicable). Subject to the
foregoing, calculations in connection with the definitions, covenants and other
provisions hereof shall utilize accounting principles and policies in
conformity with those used to prepare the Historical Financial Statements.


     1.3 Interpretation, etc. Any of the terms defined herein may, unless the
context otherwise requires, be used in the singular or the plural, depending on
the reference. References herein to any Section, Appendix, Schedule or Exhibit
shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may
be, hereof unless otherwise specifically provided. The use herein 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 specific
items or matters set forth immediately following such word or to similar items
or matters, whether or not nonlimiting language (such as “without limitation”
or “but not limited to” or words of similar import) is used with reference
thereto, but rather shall be deemed to refer to all other items or matters that
fall within the broadest possible scope of such general statement, term or
matter.


SECTION 2. LOANS


     2.1 Term Loans. On the terms and subject to the conditions contained in
this Agreement, each Lender severally agrees that the Loans (as defined in the
Existing Credit Agreement) held by such Lender under the Existing Credit
Agreement, up to the amount of the Term Loans (as defined herein), shall after
the Closing Date (as defined herein) constitute Term Loans (as defined herein)
to Company, in an amount, for each Lender equal to the amount set forth
opposite such Lender’s name on Appendix A annexed hereto. Term Loans repaid or
prepaid may not be reborrowed. Subject to Sections 2.10 and 2.11, all amounts
owed hereunder with respect to the Term Loans shall be paid in full no later
than the Term Loan Maturity Date.


     2.2 Borrowing Procedure. In order to give effect to the Plan of
Reorganization and provide for the conversion, in part, of the Senior Secured
Lender Claims into Term Loans (as defined herein) as of the Closing Date, as
contemplated by the Stand-Alone Plan, the Loans (as defined in the Existing
Credit Agreement) of each Lender shall be deemed to constitute a Term


31






 



Loan in the amount set forth opposite such Lender’s name on Appendix A
annexed hereto, without any actual funding, on the Closing Date.


     2.3 Pro Rata Shares. All Term Loans shall be deemed to have been made, by
Lenders simultaneously and proportionately to their respective Pro Rata Shares,
it being understood that no Lender shall be responsible for any default by any
other Lender in such other Lender’s obligation to make a Term Loan hereunder.


     2.4 Use of Proceeds. No portion of the proceeds of any Term Loan shall be
used by Company or any of its Subsidiaries in any manner that might cause such
Term Loan or the application of such proceeds to violate Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal Reserve
System or any other regulation thereof or to violate the Exchange Act, in each
case as in effect on the date or dates of such Term Loan and such use of
proceeds.


     2.5 Evidence of Debt; Register; Lenders’ Books and Records; Notes.



		
	 	          (1) Lenders’ Evidence of Debt. Each Lender shall maintain on its
internal records an account or accounts evidencing the Indebtedness of
Company to such Lender, including the amounts of the Term Loans made by
it and each repayment and prepayment in respect thereof. Any such
recordation shall be conclusive and binding on Company, absent manifest
error; provided, failure to make any such recordation, or any error in
such recordation, shall not affect Company’s Obligations in respect of
any applicable Term Loans; and provided further, in the event of any
inconsistency between the Register and any Lender’s records, the
recordations in the Register shall govern.
	 
	 	          (2) Register. Administrative Agent shall maintain at its Principal
Office a register for the recordation of the names and addresses of
Lenders and the Term Loans of each Lender from time to time (the
“Register”). The Register shall be available for inspection by Company
or any Lender at any reasonable time and from time to time upon
reasonable prior notice. Administrative Agent shall record in the
Register the Term Loans, and each repayment or prepayment in respect of
the principal amount of the Term Loans, and any such recordation shall be
conclusive and binding on Company and each Lender, absent manifest error;
provided, failure to make any such recordation, or any error in such
recordation, shall not affect Company’s Obligations in respect of any
Term Loan. Company hereby designates the Administrative Agent to serve
as Company’s agent solely for purposes of maintaining the Register as
provided in this Section 2.5, and Company hereby agrees that, to the
extent the Administrative Agent serves in such capacity, the
Administrative Agent and its officers, directors, employees, agents and
affiliates shall constitute “Indemnitees.”
	 
	 	          (3) Notes. If so requested by any Lender by written notice to
Company (with a copy to Administrative Agent) at least two Business Days
prior to the Closing Date, or at any time thereafter, Company shall
execute and deliver to such Lender (and/or, if applicable and if so
specified in such notice, to any Person who is an assignee of such Lender
pursuant to Section 10.6) on the Closing Date (or, if such notice



32






 




		
	 	is delivered after the Closing Date, promptly after Company’s
receipt of such notice) a Note or Notes to evidence such Lender’s Term
Loan.



     2.6 Interest on Loans.


          (a) Except as otherwise set forth herein, each Term Loan shall bear
interest on the unpaid principal amount thereof from the date made through
repayment (whether by acceleration or otherwise) thereof as follows:



          (i) during the period beginning on the Closing Date and ending on the Cash
Pay Conversion Date:




		
	 	          (1) if a Base Rate Loan, at the Base Rate plus 5.00%; or
	 
	 	          (2) if a Eurodollar Rate Loan, at the Adjusted Eurodollar Rate plus
6.00%; and



          (ii) at all times after the Cash Pay Conversion Date:




		
	 	          (1) if a Base Rate Loan, at the Base Rate plus 3.00%; or
	 
	 	          (2) if a Eurodollar Rate Loan, at the Adjusted Eurodollar Rate plus
4.00%.



          (b) The basis for determining the rate of interest with respect to any
Loan, and the Interest Period with respect to any Eurodollar Rate Loan, shall
be selected by Company and notified to Administrative Agent and Lenders
pursuant to the applicable Conversion/Continuation Notice. If on any day a
Term Loan is outstanding with respect to which a Conversion/Continuation Notice
has not been delivered to Administrative Agent in accordance with the terms
hereof specifying the applicable basis for determining the rate of interest,
then for that day such Term Loan shall be a Base Rate Loan.



          (c) In connection with Eurodollar Rate Loans there shall be no more than
ten (10) Interest Periods outstanding at any time. In the event Company fails
to specify between a Base Rate Loan or a Eurodollar Rate Loan in the applicable
Conversion/Continuation Notice, such Term Loan (if outstanding as a Eurodollar
Rate Loan) will be automatically converted into a Base Rate Loan on the last
day of the then-current Interest Period for such Eurodollar Rate Loan (or if
outstanding as a Base Rate Loan will remain as a Base Rate Loan). In the event
Company fails to specify an Interest Period for any Eurodollar Rate Loan in the
applicable Conversion/Continuation Notice, Company shall be deemed to have
selected an Interest Period of one month. A soon as practicable after 10:00
a.m. (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent
manifest error, be final, conclusive and binding upon all parties) the interest
rate that shall apply to the Eurodollar Rate Loans for which an interest rate
is then being determined for the applicable Interest Period and shall promptly
give notice thereof (in writing or by telephone confirmed in writing) to
Company and each Lender.

33






 




          (d) Interest payable pursuant to Section 2.6(a) shall be computed (i) in
the case of Base Rate Loans on the basis of a 365-day or 366-day year, as the
case may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of a
360-day year, in each case for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Term Loan, the date of
the making of such Term Loan or the first day of an Interest Period applicable
to such Term Loan or, with respect to a Base Rate Loan being converted from a
Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan to
such Base Rate Loan, as the case may be, shall be included, and the date of
payment of such Term Loan or the expiration date of an Interest Period
applicable to such Term Loan or, with respect to a Base Rate Loan being
converted to a Eurodollar Rate Loan, the date of conversion of such Base Rate
Loan to such Eurodollar Rate Loan, as the case may be, shall be excluded;
provided, if a Term Loan is repaid on the same day on which it is made, one
day’s interest shall be paid on that Term Loan.



          (e) Except as otherwise set forth herein, interest on each Term Loan shall
be payable in cash in arrears on and to (i) each Interest Payment Date
applicable to that Term Loan; (ii) any prepayment of that Term Loan, whether
voluntary or mandatory, to the extent accrued on the amount being prepaid; and
(iii) at maturity, including final maturity; provided, however, with respect to
any prepayment of a Base Rate Loan, accrued interest shall instead be payable
on the applicable Interest Payment Date. Notwithstanding any of the foregoing
to the contrary, accrued interest payable on the Term Loans on or prior to the
Cash Pay Conversion Date shall be added to the outstanding principal amount of
the Term Loan Notes on the dates referred to in the preceding sentence and on
the Cash Pay Conversion Date and such amounts shall be deemed to be included in
the term Term Loans for all purposes hereunder including, without limitation,
Section 2.10 hereof. Amounts representing Accrued Principal shall bear
interest in accordance with Sections 2.6(a) and 2.8. At the option of the
Company, or upon the request of any Lender that desires to receive such a new
note, accrued interest payable on the Term Loans on or prior to the Cash Pay
Conversion Date may be paid by delivery of a new note in the form of the Term
Loan Note, rather than being paid by adding such accrued interest to the
principal of the outstanding Term Loan Notes. Any such new note shall be
payable at such time, shall bear interest at such rate, shall be secured by the
Collateral, and shall otherwise provide the same rights and benefits to such
Lender, as if it had been added to the principal of the Term Loan Notes as
contemplated above.



     2.7 Conversion/Continuation.


          (a) Subject to Section 2.16 and so long as no Default or Event of Default
shall have occurred and then be continuing, Company shall have the option:



          (i) to convert at any time all or any part of any Term Loan equal to
$5,000,000 and integral multiples of $1,000,000 in excess of that amount from
one Type of Term Loan to another Type of Term Loan; provided, a Eurodollar Rate
Loan may only be converted on the expiration of the Interest Period applicable
to such Eurodollar Rate Loan unless Company shall pay all amounts due under
Section 2.16 in connection with any such conversion; or



          (ii) upon the expiration of any Interest Period applicable to any
Eurodollar Rate Loan, to continue all or any portion of such Eurodollar Rate
Loan equal to $5,000,000 and integral multiples of $1,000,000 in excess of that
amount as a Eurodollar Rate Loan.

34






 



           (b) The Company shall deliver a Conversion/Continuation Notice to
Administrative Agent no later than 12:00 noon. (New York City time) at least
one Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). Except as otherwise provided herein,
a Conversion/Continuation Notice for conversion to, or continuation of, any
Eurodollar Rate Loans (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Company shall be bound to effect a conversion or continuation in accordance
therewith.



     2.8 Default Interest. Upon the occurrence and during the continuance of
an Event of Default described in Section 8.1(a), the principal amount of all
Term Loans (including Accrued Principal) and, to the extent permitted by
applicable law, any interest payments on the Term Loans not paid when due or
any fees or other amounts owed hereunder not paid when due, in each case
whether at stated maturity, by notice of prepayment, by acceleration or
otherwise, shall thereafter bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable on demand at a rate that is 2% per annum in excess of the interest rate
otherwise payable hereunder with respect to the Term Loans; provided, in the
case of Eurodollar Rate Loans, upon the expiration of the Interest Period in
effect at the time any such increase in interest rate is effective such
Eurodollar Rate Loans shall thereupon become Base Rate Loans and shall
thereafter bear interest payable upon demand at a rate which is 2% per annum in
excess of the interest rate otherwise payable hereunder for Term Loans which
are Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this Section 2.8 is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Administrative Agent or any
Lender.


     2.9 Fees. Company agrees to pay to Administrative Agent such fees in the
amounts and at the times separately agreed upon.


     2.10 Scheduled Payments.


          The principal amounts of the Term Loans, other than the principal
consisting of Accrued Principal, shall be repaid in the quarterly amounts
(expressed as percentages of the outstanding Term Loans as of the Closing Date)
set forth below in consecutive quarterly installments (each, an “Installment”)
corresponding to each date (each, an “Installment Date”) set forth below:




	 	 	 	 	 
	Installment Date	 	Installment
	
	 	

	October 15, 2007
	 	 	5.0	%
	January 15, 2008
	 	 	5.0	%
	April 15, 2008
	 	 	5.0	%
	July 15, 2008
	 	 	10.0	%
	October 15, 2008
	 	 	10.0	%
	January 15, 2009
	 	 	15.0	%
	April 15, 2009
	 	 	15.0	%
	July 15, 2009
	 	 	35.0	%



35






 





	 	 	 	 	 
	July 15, 2009	 	 	
35.0	%





The principal amounts of the Term Loans consisting of Accrued Principal shall
be repaid on July 15, 2009. Notwithstanding the foregoing, (i) such
Installments shall be reduced in connection with any voluntary or mandatory
prepayments of the Term Loans in accordance with Section 2.13, and (ii) the
Term Loans, together with all other amounts owed under the Credit Documents
with respect thereto, shall be paid in full no later than the Term Loan
Maturity Date and the final Installment payable by Company in respect to the
Term Loans on such date shall be in an amount, if such amount is different from
that specified above, sufficient to repay all amounts owing by Company under
the Credit Documents.


     2.11 Voluntary Prepayments.


          (i) Any time and from time to time Company may prepay, without premium or
penalty, Term Loans on any Business Day in whole or in part, in an aggregate
minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess of
that amount.



          (ii) All such prepayments relating to Term Loans, shall be made:




		
	 	          (1) upon not less than one Business Day’s prior written or
telephonic notice, in the case of Base Rate Loans; and
	 
	 	          (2) upon not less than three Business Days’ prior written or
telephonic notice, in the case of Eurodollar Rate Loans;



in each case given to Administrative Agent by 12:00 p.m. (New York City time)
on the date required and, if given by telephone, promptly confirmed in writing
to Administrative Agent (and Administrative Agent will promptly transmit such
telephonic or original notice by telefacsimile or telephone to each Lender).
Upon the giving of any such notice, the principal amount of the Term Loans
specified in such notice shall become due and payable on the prepayment date
specified therein.


     2.12 Mandatory Prepayments.


          (a) Asset Sales. If, within the period of two hundred seventy (270) days
prior to or after the receipt by Company or any of its Subsidiaries of Net
Asset Sale Proceeds, Company has not invested such Net Asset Sale Proceeds in
(I) goods (as defined in the UCC), (II) other telecommunications assets as
approved by the board of the directors of Company, or (III) real property
that, in each instance, shall become Collateral, as certified to Administrative
Agent by Company, then, to the extent Company has not previously done so,
Company shall (i) first, to the extent required under the Exit Revolver,
permanently reduce the Exit Revolver commitments, and (ii) second, to the
extent not required to be used to reduce the Exit Revolver commitments, if
requested by the Requisite Lenders, prepay the Term Loans as set forth in
Section 2.13(b), in an amount equal to the excess of such Net Asset Sale
Proceeds over amounts invested as aforesaid. Anything contained herein to the
contrary notwithstanding, (x) the aggregate amount of Net Asset Sale Proceeds
reinvested after the Closing Date shall not exceed $50,000,000 and (y) Company
shall (i) first, to the extent required under the Exit Revolver,


36






 



permanently reduce the Exit Revolver commitments, and (ii) second, to the
extent not required to be used to reduce the Exit Revolver commitments, prepay
the Term Loans as set forth in Section 2.13(b), in an amount equal to the
excess of un-reinvested Net Asset Sale Proceeds subject to the aforesaid
reinvestment option over $25,000,000.


          (b) Insurance/Condemnation Proceeds. If, within the period of two hundred
seventy (270) days prior to or after the receipt by Company or any of its
Subsidiaries of Net Insurance/Condemnation Proceeds (whether from the insurer,
condemnor, transferee or the Administrative Agent as loss payee), Company has
not invested such Net Insurance/Condemnation Proceeds in the business of the
Company and its Subsidiaries, as certified to Administrative Agent by Company,
then, to the extent Company has not previously done so, unless otherwise agreed
by the Requisite Lenders, Company shall (i) first, to the extent required under
the Exit Revolver, permanently reduce the Exit Revolver commitments, and (ii)
second, to the extent not required to be used to reduce the Exit Revolver
commitments, if requested by the Requisite Lenders, prepay the Term Loans as
set forth in Section 2.13(b), in an amount equal to the excess of such Net
Insurance/Condemnation Proceeds over amounts invested as aforesaid.



          (c) Consolidated Excess Cash Flow. In the event that there shall be
Consolidated Excess Cash Flow for any Fiscal Quarter (commencing with the first
Fiscal Quarter commencing after the Closing Date), no later than sixty (60)
days after the end of such Fiscal Quarter, Company shall, unless otherwise
agreed by the Requisite Lenders (i) first, to the extent required under the
Exit Revolver, permanently reduce the Exit Revolver commitments, and (ii)
second, to the extent not required to be used to reduce the Exit Revolver
commitments, if requested by the Requisite Lenders, prepay the Term Loans as
set forth in Section 2.13(b) in an aggregate amount, if any, equal to 50% of
such Consolidated Excess Cash Flow in excess of $25,000,000.



          (d) Issuance of Equity Securities. No later than the next Business Day
following the date of receipt by Company or any of its Subsidiaries of any Net
Equity Proceeds (other than any such Net Equity Proceeds which are Excess
Common Equity Proceeds used to make a Permitted Acquisition), Company shall,
unless otherwise agreed by the Requisite Lenders (i) first, to the extent
required under the Exit Revolver, use such proceeds to permanently reduce the
Exit Revolver commitment and (ii) second, to the extent not required to be used
to permanently reduce the Exit Revolver commitment, if requested by the
Requisite Lenders, prepay the Term Loans as set forth in Section 2.13(b).



          (e) FL/Telmex Recovery. Following receipt of the Net FL/Telmex Recovery
Proceeds, the Company shall, if requested by the Requisite Lenders, prepay the
Term Loans as set forth in Section 2.13(b) in an amount up to the Net FL/Telmex
Recovery Proceeds.



          (f) Change of Control. No later than the third Business Day following the
date that a Change of Control shall occur, Company shall, unless otherwise
agreed by the Requisite Lenders, prepay, in full, the outstanding principal
amount of all outstanding Term Loans, together with all accrued interest, fees
and other expenses owing hereunder and under the other Credit Documents.


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           (g) Prepayment Certificate. Concurrently with any prepayment of the Term
Loans pursuant to Sections 2.12(a) through 2.12(e), Company shall deliver to
Administrative Agent a certificate of an Authorized Officer demonstrating the
calculation of the amount of the applicable net proceeds or Consolidated Excess
Cash Flow, as the case may be, that is being so applied. In the event that
Company shall subsequently determine that the actual amount required to be so
applied exceeded the amount set forth in such certificate, Company shall
promptly make an additional prepayment of the Term Loans in an amount equal to
such excess, and Company shall concurrently therewith deliver to Administrative
Agent a certificate of an Authorized Officer demonstrating the derivation of
such excess.



     2.13 Application of Prepayments/Reductions.


          (a) Application of Voluntary Prepayments. Any prepayment pursuant to
Section 2.11 shall be applied to prepay all the Term Loans then outstanding on
a pro rata basis, with credit given first to the next scheduled Installment of
each thereof and the balance, if any, credited first on a pro rata basis to
each remaining scheduled installment of each thereof as provided in Section
2.10 and the remaining balance, if any, then credited to any remaining Term
Loans then outstanding.



          (b) Application of Mandatory Prepayments. Any amount required to be
prepaid pursuant to Sections 2.12(a) through 2.12(e) shall be applied to prepay
the Term Loans then outstanding on a pro rata basis, with credit given to each
remaining Installment, allocated on a pro rata basis among such Installments,
and the remaining balance, if any, then credited to any remaining Obligations
then outstanding.



          (c) Application of Prepayments of Term Loans to Base Rate Loans and
Eurodollar Rate Loans. Any prepayment of Term Loans shall be applied first to
Base Rate Loans to the full extent thereof before application to Eurodollar
Rate Loans, in each case in a manner which minimizes the amount of any payments
required to be made by Company pursuant to Section 2.16(c). All prepayments
shall be made without prepayment penalty or prepayment premium of any kind
other that the payments required to be made by Company pursuant to Section
2.16(c).



     2.14 General Provisions Regarding Payments.


          (a) All payments by Company of principal, interest, fees and other
Obligations shall be made in Dollars in same day funds, without defense, setoff
or counterclaim, free of any restriction or condition, and delivered to
Administrative Agent not later than 12:00 p.m. (New York City time) on the date
due at the Administrative Agent’s Principal Office for the account of Lenders;
funds received by Administrative Agent after that time on such due date shall
be deemed to have been paid by Company on the next succeeding Business Day.



          (b) All payments in respect of the principal amount of any Term Loan
(other than prepayments of Base Rate Loans on any day other than an Interest
Payment Date) shall include payment of accrued interest on the principal amount
being repaid or prepaid, and all such payments (and, in any event, any payments
in respect of any Term Loan on a date when interest is due and payable with
respect to such Term Loan) shall be applied to the payment of interest

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before application to principal. Interest accrued on each Term Loan on or
prior to the Cash Pay Conversion Date shall, for all purposes under the Credit
Documents, be deemed to be paid when due, regardless of the form of payment
(i.e., either payment in the form of the addition of such interest to the Term
Loan Notes, or payment in the form of the delivery of new notes in respect
thereof, as contemplated in Section 2.6 hereof), such that payment by the
addition of such interest to the Term Loans, as well as payment by the delivery
of new notes in respect thereof, as contemplated in Section 2.6 hereof, shall
each constitute payment of the related accrued interest under the Credit
Documents for all purposes.


          (c) Administrative Agent shall promptly distribute to each Lender at such
address as such Lender shall indicate in writing, such Lender’s applicable Pro
Rata Share of all payments and prepayments of principal and interest due
hereunder, together with all other amounts due thereto, including, without
limitation, all fees payable with respect thereto, to the extent received by
Administrative Agent, subject to the provisions hereof.



          (d) Notwithstanding the foregoing provisions hereof, if any
Conversion/Continuation Notice is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter, subject to the provisions hereof.



          (e) Subject to the provisos set forth in the definition of “Interest
Period”, whenever any payment to be made hereunder shall be stated to be due on
a day that is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder.



          (f) Company hereby authorizes Administrative Agent to charge Company’s
accounts with Administrative Agent in order to cause timely payment to be made
to Administrative Agent of all principal, interest, fees and expenses due
hereunder (subject to sufficient funds being available in its accounts for that
purpose).



          (g) Administrative Agent shall deem any payment by or on behalf of Company
hereunder that is not made in same day funds prior to 12:00 p.m. (New York City
time) to be a non-conforming payment. Any such payment shall not be deemed to
have been received by Administrative Agent until the later of (i) the time such
funds become available funds, and (ii) the applicable next Business Day.
Administrative Agent shall give prompt telephonic notice to Company and each
applicable Lender (confirmed in writing) if any payment is non-conforming.
Interest shall continue to accrue on any principal as to which a non-conforming
payment is made until such funds become available funds (but in no event less
than the period from the date of such payment to the next succeeding applicable
Business Day) at the rate determined pursuant to Section 2.8 from the date such
amount was due and payable until the date such amount is paid in full.



     2.15 Ratable Sharing. Lenders hereby agree among themselves that, except
as otherwise provided in the Collateral Documents with respect to amounts
realized from the exercise of rights with respect to Liens on the Collateral,
if any of them shall, whether by voluntary payment (other than a voluntary
prepayment of Term Loans made and applied in


39






 



accordance with the terms hereof), through the exercise of any right of
set-off or banker’s lien, by counterclaim or cross action or by the enforcement
of any right under the Credit Documents or otherwise, or as adequate protection
of a deposit treated as cash collateral under the Bankruptcy Code, receive
payment or reduction of a proportion of the aggregate amount of principal,
interest, fees and other amounts then due and owing to such Lender hereunder or
under the other Credit Documents (collectively, the “Aggregate Amounts Due” to
such Lender) which is greater than the proportion received by any other Lender
in respect of the Aggregate Amounts Due to such other Lender, then the Lender
receiving such proportionately greater payment shall (a) notify Administrative
Agent and each other Lender of the receipt of such payment and (b) apply a
portion of such payment to purchase participations (which it shall be deemed to
have purchased from each seller of a participation simultaneously 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 recoveries of Aggregate Amounts Due
shall be shared by all Lenders in proportion to the Aggregate Amounts Due to
them; provided, if all or part of such proportionately greater payment received
by such purchasing Lender is thereafter recovered from such Lender upon the
bankruptcy or reorganization of Company or otherwise, those purchases shall be
rescinded and the purchase prices paid for such participations shall be
returned to such purchasing Lender ratably to the extent of such recovery, but
without interest. Company expressly consents to the foregoing arrangement and
agrees that any holder of a participation so purchased may exercise any and all
rights of banker’s lien, set-off or counterclaim with respect to any and all
monies owing by Company to that holder with respect thereto as fully as if that
holder were owed the amount of the participation held by that holder. The
foregoing provisions shall not apply to any purchase by the Company or its
Subsidiaries or all or any portion of the Term Loans held by any Lender upon
terms available to all Lenders (other than Lenders who determine not to
participate).


     2.16 Making or Maintaining Eurodollar Rate Loans.


          (a) Inability to Determine Applicable Interest Rate. In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the London interbank market adequate and fair means do
not exist for ascertaining the interest rate applicable to such Term Loans on
the basis provided for in the definition of Adjusted Eurodollar Rate,
Administrative Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to Company and each Lender of such
determination, whereupon (i) no Term Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Administrative Agent notifies Company
and Lenders that the circumstances giving rise to such notice no longer exist,
and (ii) any Conversion/Continuation Notice given by Company with respect to
the Term Loans in respect of which such determination was made shall be deemed
to be rescinded by Company.



          (b) Illegality or Impracticability of Eurodollar Rate Loans. In the event
that on any date any Lender shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto but shall be made only
after consultation with Company and Administrative Agent) that the making,
maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the

40






 




failure to comply therewith would not be unlawful), or (ii) has become
impracticable, as a result of contingencies occurring after the date hereof
which materially and adversely affect the London interbank market, then, and in
any such event, such Lender shall be an “Affected Lender” and it shall on that
day give notice (by telefacsimile or by telephone confirmed in writing) to
Company and Administrative Agent of such determination (which notice
Administrative Agent shall promptly transmit to each other Lender). Thereafter
(1) the obligation of the Affected Lender to make Term Loans as, or to convert
Term Loans to, Eurodollar Rate Loans shall be suspended until such notice shall
be withdrawn by the Affected Lender, (2) to the extent such determination by
the Affected Lender relates to a Eurodollar Rate Loan then being requested by
Company pursuant to a Conversion/Continuation Notice, the Affected Lender shall
make such Term Loan as (or continue such Term Loan as or convert such Term Loan
to, as the case may be) a Base Rate Loan, (3) the Affected Lender’s obligation
to maintain its outstanding Eurodollar Rate Loans (the “Affected Loans”) shall
be terminated at the earlier to occur of the expiration of the Interest Period
then in effect with respect to the Affected Loans or when required by law, and
(4) the Affected Loans shall automatically convert into Base Rate Loans on the
date of such termination. Notwithstanding the foregoing, to the extent a
determination by an Affected Lender as described above relates to a Eurodollar
Rate Loan then being requested by Company pursuant to a Conversion/Continuation
Notice, Company shall have the option, subject to the provisions of Section
2.16(c), to rescind such Conversion/Continuation Notice as to all Lenders by
giving notice (by telefacsimile or by telephone confirmed in writing) to
Administrative Agent of such rescission on the date on which the Affected
Lender gives notice of its determination as described above (which notice of
rescission Administrative Agent shall promptly transmit to each other Lender).
Except as provided in the immediately preceding sentence, nothing in this
Section 2.16(b) shall affect the obligation of any Lender other than an
Affected Lender to make or maintain Term Loans as, or to convert Term Loans to,
Eurodollar Rate Loans in accordance with the terms hereof.


          (c) Compensation for Breakage or Non-Commencement of Interest Periods.
Company shall compensate each Lender, upon written request by such Lender
(which request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any interest paid by
such Lender to lenders of funds borrowed by it to make or carry its Eurodollar
Rate Loans and any loss, expense or liability sustained by such Lender in
connection with the liquidation or re-employment of such funds but excluding
loss of anticipated profits) which such Lender may sustain: (i) if for any
reason (other than a default by such Lender) a conversion to or continuation of
any Eurodollar Rate Loan does not occur on a date specified therefor in a
Conversion/Continuation Notice or a telephonic request for conversion or
continuation; (ii) if any prepayment or other principal payment or any
conversion of any of its Eurodollar Rate Loans occurs on a date prior to the
last day of an Interest Period applicable to that Eurodollar Rate Loan; (iii)
if any prepayment of any of its Eurodollar Rate Loans is not made on any date
specified in a notice of prepayment given by Company; or (iv) as a consequence
of any other default by Company in the repayment of its Eurodollar Rate Loans
when required by the terms hereof.



          (d) Booking of Eurodollar Rate Loans. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of such Lender.

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           (e) Assumptions Concerning Funding of Eurodollar Rate Loans. Calculation
of all amounts payable to a Lender under this Section 2.16 and under Section
2.17 shall be made as though such Lender had actually funded each of its
relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of such
Lender to a domestic office of such Lender in the United States of America;
provided, however, each Lender may fund each of its Eurodollar Rate Loans in
any manner it sees fit and the foregoing assumptions shall be utilized only for
the purposes of calculating amounts payable under this Section 2.16 and under
Section 2.17.



     2.17 Increased Costs; Capital Adequacy.


          (a) Compensation For Increased Costs and Taxes. Subject to the provisions
of Section 2.18 (which shall be controlling with respect to the matters covered
thereby), in the event that any 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 in the interpretation, administration or application
thereof (including the introduction of any new law, treaty or governmental
rule, regulation or order), or any determination of a court or governmental
authority, in each case that becomes effective after the date hereof, or, if
later, after the date such Lender accepts an assignment under Section 10.6, or
compliance by such Lender with any guideline, request or directive issued or
made after the date hereof or, if later, after the date such Lender accepts an
assignment under Section 10.6, by any central bank or other governmental or
quasi-governmental authority (whether or not having the force of law): (i)
subjects such Lender (or its applicable lending office) to any additional Tax
(other than any Tax on the overall net income of such Lender) with respect to
this Agreement or any of its obligations 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, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities in or for
the account of, or advances or loans by, or other credit extended by, or any
other acquisition of funds by, any office of such Lender (other than any such
reserve or other requirements with respect to Eurodollar Rate Loans that are
reflected in the definition of Adjusted Eurodollar Rate); or (iii) imposes any
other condition (other than with respect to a Tax matter) on or affecting such
Lender (or its applicable lending office) or its obligations hereunder or the
London interbank market; and the result of any of the foregoing is to increase
the cost to such Lender of agreeing to make, making or maintaining Eurodollar
Rate Loans hereunder or to reduce any amount received or receivable by such
Lender (or its applicable lending office) with respect thereto; then, in any
such case, Company shall promptly pay to such Lender, upon receipt of the
statement referred to in the next sentence, such additional amount or amounts
(in the form of an increased rate of, or a different method of calculating,
interest or otherwise as such Lender in its sole discretion shall determine) as
may be necessary to compensate such Lender for any such increased cost or
reduction in amounts received or receivable hereunder. Such Lender shall
deliver to Company (with a copy to Administrative Agent) a written statement,
setting forth in reasonable detail the

42






 




basis for calculating the additional amounts owed to such Lender under
this Section 2.17(a), which statement shall be conclusive and binding upon all
parties hereto absent manifest error.


          (b) Capital Adequacy Adjustment. In the event that any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after
the Closing Date or, if later, after the date such Lender accepts an assignment
under Section 10.6, of any law, rule or regulation (or any provision thereof)
regarding capital adequacy, or any change therein or in the interpretation or
administration thereof by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Lender (or its applicable lending office) with any guideline,
request or directive which becomes applicable after the Closing Date or, if
later, after the date such Lender accepts an assignment under Section 10.6,
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 the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender’s Term Loans or other obligations hereunder with respect to the
Term Loans to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within five Business Days after receipt by Company from
such Lender of the statement referred to in the next sentence, Company shall
pay to such Lender such additional amount or amounts as will compensate such
Lender or such controlling corporation on an after-tax basis for such
reduction. Such Lender shall deliver to Company (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to Lender under this Section 2.17(b),
which statement shall be conclusive and binding upon all parties hereto absent
manifest error.



          (c) Limitation on Retroactive Effect. Failure or delay on the part of any
Lender to demand compensation pursuant to this Section 2.17 shall not
constitute a waiver of such Lender’s right to demand such compensation;
provided that Company shall not be required to compensate a Lender pursuant to
this Section 2.17 for any increased costs or reductions incurred more than 180
days prior to the date that such Lender notifies Company of the change giving
rise to such increased costs or reductions and of such Lender’s intention to
claim compensation therefor; provided further that, if the change giving rise
to such increased costs or reductions is retroactive, then the 180-day period
referred to above shall be extended to include the period of retroactive effect
thereof.



     2.18 Taxes; Withholding, etc.


          (a) Payments to Be Free and Clear. All sums payable by any Credit Party
hereunder and under the other Credit Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net income
of any Lender) imposed, levied, collected, withheld or assessed by or within
the United States of America or any political subdivision in or of the United
States of America or any other jurisdiction from which a payment is made by or
on behalf of any Credit Party or by any federation or organization of which the
United States of America or any such jurisdiction is a member at the time of
payment.

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           (b) Withholding of Taxes. If any Credit Party or any other Person is
required by law to make any deduction or withholding on account of any such Tax
from any sum paid or payable by any Credit Party to Administrative Agent or any
Lender under any of the Credit Documents: (i) Company shall notify
Administrative Agent of any such requirement or any change in any such
requirement as soon as Company becomes aware of it; (ii) Company shall pay any
such Tax before the date on which penalties attach thereto, such payment to be
made (if the liability to pay is imposed on any Credit Party) for its own
account or (if that liability is imposed on Administrative Agent or such
Lender, as the case may be) on behalf of and in the name of Administrative
Agent or such Lender; (iii) the sum payable by such Credit Party in respect of
which the relevant deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the making of that
deduction, withholding or payment, Administrative Agent or such Lender, as the
case may be, receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been required or made;
and (iv) within thirty (30) days after paying any sum from which it is required
by law to make any deduction or withholding, and within thirty (30) days after
the due date of payment of any Tax which it is required by clause (ii) above to
pay, Company shall deliver to Administrative Agent evidence satisfactory to the
other affected parties of such deduction, withholding or payment and of the
remittance thereof to the relevant taxing or other authority; provided, no such
additional amount shall be required to be paid to any Lender under clause (iii)
above except to the extent that any change after the date hereof (in the case
of each Lender listed on the signature pages hereof on the Closing Date) or
after the effective date of the Assignment Agreement pursuant to which such
Lender became a Lender (in the case of each other Lender) in any such
requirement for a deduction, withholding or payment as is mentioned therein
shall result in an increase in the rate of such deduction, withholding or
payment from that in effect at the date hereof or at the date of such
Assignment Agreement in respect of payments to such Lender.



          (c) Evidence of Exemption From U.S. Withholding Tax. Each Lender that is
not a United States Person (as such term is defined in Section 7701(a)(30) of
the Internal Revenue Code) for U.S. federal income tax purposes (a “Non-US
Lender”) shall deliver to Administrative Agent for transmission to Company, on
or prior to the Closing Date (in the case of each Lender listed on the
signature pages hereof on the Closing Date) or on or prior to the date of the
Assignment Agreement pursuant to which it becomes a Lender (in the case of each
other Lender), and at such other times as may be necessary in the determination
of Company or Administrative Agent (each in the reasonable exercise of its
discretion), (i) two original copies of Internal Revenue Service Form W-8BEN or
W-8ECI (or any successor forms), properly completed and duly executed by such
Lender, and such other documentation required under the Internal Revenue Code
and reasonably requested by Company to establish that such Lender is not
subject to deduction or withholding of United States federal income tax with
respect to any payments to such Lender of principal, interest, fees or other
amounts payable under any of the Credit Documents, or (ii) if such Lender is
not a “bank” or other Person described in Section 881(c)(3) of the Internal
Revenue Code and cannot deliver either Internal Revenue Service Form W-8BEN or
W-8ECI pursuant to clause (i) above, a Certificate re Non-Bank Status together
with two original copies of Internal Revenue Service Form W-8 (or any successor
form), properly completed and duly executed by such Lender, and such other
documentation required under the Internal Revenue Code and reasonably requested
by Company to establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to any

44






 




payments to such Lender of interest payable under any of the Credit
Documents. Each Lender required to deliver any forms, certificates or other
evidence with respect to United States federal income tax withholding matters
pursuant to this Section 2.18(c) hereby agrees, from time to time after the
initial delivery by such Lender of such forms, certificates or other evidence,
whenever a lapse in time or change in circumstances renders such forms,
certificates or other evidence obsolete or inaccurate in any material respect,
that such Lender shall promptly deliver to Administrative Agent for
transmission to Company two new original copies of Internal Revenue Service
Form W-8BEN or W-8ECI , or a Certificate re Non-Bank Status and two original
copies of Internal Revenue Service Form W-8, as the case may be, properly
completed and duly executed by such Lender, and such other documentation
required under the Internal Revenue Code and reasonably requested by Company to
confirm or establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to payments to
such Lender under the Credit Documents, or notify Administrative Agent and
Company of its inability to deliver any such forms, certificates or other
evidence. Company shall not be required to pay any additional amount to any
Non-US Lender under Section 2.18(b)(iii) if such Lender shall have failed (1)
to deliver the forms, certificates or other evidence referred to in the second
sentence of this Section 2.18(c), or (2) to notify Administrative Agent and
Company of its inability to deliver any such forms, certificates or other
evidence, as the case may be; provided, if such Lender shall have satisfied the
requirements of the first sentence of this Section 2.18(c) on the Closing Date
or on the date of the Assignment Agreement pursuant to which it became a
Lender, as applicable, nothing in this last sentence of Section 2.18(c) shall
relieve Company of its obligation to pay any additional amounts pursuant to
Section 2.17(a) in the event that, as a result of any change in any applicable
law, treaty or governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such Lender is no longer
properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender is not subject to
withholding as described herein.


          (d) Reimbursement of Savings. If a Credit Party pays any additional
amount under this Section 2.18 and, as a result, any Lender, together with
Administrative Agent, subsequently, in their sole discretion and based on their
own interpretation of any relevant laws (but acting in good faith) receive or
are granted a final and non-appealable credit against or deduction from or in
respect of any tax payable by such Lender, or obtain any other final and
non-appealable relief in respect of any tax, which in the opinion of such
Lender and Administrative Agent, acting in good faith, is both reasonably
identifiable and quantifiable by them without requiring any Lender,
Administrative Agent or their professional advisors to expend a material amount
of time or incur a material cost in so identifying or quantifying (any of the
foregoing, to the extent so reasonably identifiable and quantifiable, being
referred to as a “Saving”), such Lender shall, to the extent that it can do so
without prejudice to the retention of the Saving, reimburse such Credit Party
promptly after such identification and quantification with the amount of such
Saving; provided, however, that any such Saving shall be reduced by any costs
incurred by such Lender or Administrative Agent in obtaining such Saving;
provided, further, that nothing in this Section 2.18(d) shall require any
Lender to disclose to any Person any information regarding its tax affairs or
to arrange its tax and other affairs in any particular manner.



     2.19 Obligation to Mitigate. Each Lender agrees that, as promptly as
practicable after the officer of such Lender responsible for administering its
Term Loans, becomes aware of the

45






 



occurrence of an event or the existence of a condition that would cause
such Lender to become an Affected Lender or that would entitle such Lender to
receive payments under Section 2.16, 2.17 or 2.18, it will, to the extent not
inconsistent with the internal policies of such Lender and any applicable legal
or regulatory restrictions, use reasonable efforts (a) to make, issue, fund or
maintain its Credit Extensions, including any Affected Loans, through another
office of such Lender, or (b) take such other measures as such Lender may deem
reasonable, if as a result thereof the circumstances which would cause such
Lender to be an Affected Lender would cease to exist or the additional amounts
which would otherwise be required to be paid to such Lender pursuant to Section
2.16, 2.17 or 2.18 would be materially reduced and if, as determined by such
Lender in its sole discretion, the making, issuing, funding or maintaining of
such Term Loans through such other office or in accordance with such other
measures, as the case may be, would not otherwise adversely affect such Term
Loans or the interests of such Lender; provided, such Lender will not be
obligated to utilize such other office pursuant to this Section 2.19 unless
Company agrees to pay all incremental expenses incurred by such Lender as a
result of utilizing such other office as described in clause (i) above. A
certificate as to the amount of any such expenses payable by Company pursuant
to this Section 2.19 (setting forth in reasonable detail the basis for
requesting such amount) submitted by such Lender to Company (with a copy to
Administrative Agent) shall be conclusive absent manifest error.


     2.20 Removal or Replacement of a Lender. Anything contained herein to the
contrary notwithstanding, in the event that any Lender (an “Increased-Cost
Lender”) shall give notice to Company that such Lender is an Affected Lender or
that such Lender is entitled to receive payments under Section 2.16, 2.17 or
2.18, the circumstances which have caused such Lender to be an Affected Lender
or which entitle such Lender to receive such payments shall remain in effect,
and such Lender shall fail to withdraw such notice within five Business Days
after Company’s request for such withdrawal; then, with respect to each such
Increased-Cost Lender (the “Terminated Lender”), Company may, with the written
consent of the Requisite Lenders, by giving written notice to Administrative
Agent and any Terminated Lender of its election to do so, elect to cause such
Terminated Lender (and such Terminated Lender hereby irrevocably agrees) to
assign its outstanding Term Loans, in full to one or more Eligible Assignees
(each a “Replacement Lender”) in accordance with the provisions of Section 10.6
and Terminated Lender shall pay any fees payable thereunder in connection with
such assignment; provided, (1) on the date of such assignment, the Replacement
Lender shall pay to Terminated Lender an amount equal to the sum of (A) an
amount equal to the principal of, and all accrued interest on, all outstanding
Term Loans of the Terminated Lender and (B) an amount equal to all accrued, but
theretofore unpaid fees owing to such Terminated Lender pursuant to Section 2.9
and (2) on the date of such assignment, Company shall pay any amounts payable
to such Terminated Lender pursuant to Section 2.16(c), 2.17 or 2.18 or
otherwise as if it were a prepayment. Upon the payment of all amounts owing to
any Terminated Lender, such Terminated Lender shall no longer constitute a
“Lender” for purposes hereof; provided, any rights of such Terminated Lender to
indemnification hereunder shall survive as to such Terminated Lender.


     2.21 Intercreditor Agreement. Each Lender (a) authorizes Administrative
Agent to execute and deliver the Intercreditor Agreement on its behalf and (b)
acknowledges and agrees to the provisions of the Intercreditor Agreement
pursuant to which the Lenders agree to subordinate the priority of their
security interest in the Collateral to the security interest therein securing a

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principal amount not to exceed the Maximum Exit Revolver Amount under the
Exit Revolver, together with interest, fees and other amounts due, all to the
extent provided in the Intercreditor Agreement.


SECTION 3. CONDITIONS PRECEDENT



     3.1 Closing Date. This Agreement shall become effective upon
satisfaction, or waiver in accordance with Section 10.5, of the following
conditions; provided, however, that notwithstanding anything to the contrary
herein if the Requisite Lenders advise the Company, prior to the hearing on
confirmation of the Plan of Reorganization, that a document or order described
in the following conditions is satisfactory, then such document or order shall
be deemed satisfactory, unless it is changed or modified in any way (including
by the Bankruptcy Court) from the form of such order or document approved by
the Requisite Lenders in their sole discretion (in the case of any such change
or modification, such document or order shall be deemed not to be satisfactory,
unless the Requisite Lenders find such change or modification to be
satisfactory in their sole discretion):


          (a) Credit Documents. Administrative Agent shall have received sufficient
copies of each Credit Document originally executed and delivered by each
applicable Credit Party for each Lender.



          (b) Organizational Documents; Incumbency. Administrative Agent shall have
received (i) sufficient copies of each Organizational Document originally
executed and delivered by each Credit Party, as applicable, and, to the extent
applicable, certified as of a recent date by the appropriate governmental
official, for each Lender, each dated the Closing Date or a recent date prior
thereto; (ii) signature and incumbency certificates of the officers of each
Credit Party executing the Credit Documents to which it is a party; (iii)
resolutions of the board of directors or similar governing body of each Credit
Party approving and authorizing the execution, delivery and performance of this
Agreement and the other Credit Documents and Restructuring Transaction
Documents to which it is a party or by which it or its assets may be bound as
of the Closing Date, certified as of the Closing Date by its secretary or an
assistant secretary as being in full force and effect without modification or
amendment; (iv) a good standing certificate from the applicable Governmental
Authority of each Credit Party’s jurisdiction of incorporation, organization or
formation and in each jurisdiction in which it is qualified as a foreign
corporation or other entity to do business, each dated a recent date prior to
the Closing Date; and (v) such other documents as Administrative Agent may
reasonably request.



          (c) Equity Ownership; Corporate Governance; Organizational and Capital
Structure.



          (i) The equity ownership and corporate and operational governance of
Company and its Subsidiaries shall be consistent with the Plan of
Reorganization in all material respects.



          (ii) The organizational structure and the capital structure of Company and
its Subsidiaries shall be in all material respects as set forth on Schedules
4.1 and 4.2, after giving effect to the Restructuring Transactions.

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           (d) Governmental Authorizations and Consents. Each Credit Party shall
have obtained all Governmental Authorizations and all consents of other
Persons, in each case that are necessary in connection with the transactions
contemplated by the Credit Documents and the Restructuring Transaction
Documents and each of the foregoing shall be in full force and effect and in
form and substance reasonably satisfactory to Administrative Agent and the
Requisite Lenders. All applicable waiting periods shall have expired without
any action being taken or threatened by any competent authority which would
restrain, prevent or otherwise impose adverse conditions on the transactions
contemplated by the Credit Documents and no action, request for stay, petition
for review or rehearing, reconsideration, or appeal with respect to any of the
foregoing shall be pending, and the time for any applicable agency to take
action to set aside its consent on its own motion shall have expired.



          (e) Evidence of Insurance. Administrative Agent shall have received a
certificate from Company’s insurance broker or other evidence satisfactory to
it that all insurance required to be maintained pursuant to Section 5.5 is in
full force and effect and that Administrative Agent, for the benefit of Lenders
has been named as additional insured and loss payee thereunder to the extent
required under Section 5.5.



          (f) Opinions of Counsel to Credit Parties. The Administrative Agent and
any Lender requesting same in writing shall have received originally executed
copies of the (i) favorable written perfection opinion of Willkie Farr &
Gallagher, counsel for Credit Parties, and (ii) favorable written opinion of
Kelley Drye & Warren LLP, FCC counsel for Credit Parties and limited to FCC
matters, in the form of Exhibit D.



          (g) Fees. All costs, fees and expenses contemplated by (x) this Agreement
due to Administrative Agent or the Lenders (including, without limitation,
reasonable legal fees and expenses of Pillsbury Winthrop LLP, counsel to the
Administrative Agent, and Brown Rudnick Berlack Israels LLP, counsel to High
River Limited Partnership, and such other counsel and advisors utilized in
connection herewith) shall have been paid to the extent due and (y) the
Existing Credit Agreement shall have been paid



          (h) Completion of Proceedings. All partnership, corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and by the Restructuring Transaction Documents and all
documents incidental thereto shall be reasonably satisfactory to Administrative
Agent, the Requisite Lenders and their respective counsel, and Administrative
Agent and its counsel shall have received all such counterpart originals or
certified copies of such documents as Administrative Agent or the Requisite
Lenders may reasonably request.



          (i) Closing Date Certificate. Company shall have delivered to
Administrative Agent an originally executed Closing Date Certificate, together
with all attachments thereto.



          (j) Confirmation Orders.



          (i) Administrative Agent shall have received certified copies of the Final
Order and all other orders of the Bankruptcy Court entered in connection with
the Plan of Reorganization or the Restructuring Transactions (collectively with
the Final Order, the

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“Confirmation Orders”) each of which shall (x) be in form approved by
Administrative Agent and the Requisite Lenders, and (y) except as agreed to by
Administrative Agent and the Requisite Lenders, be final orders on the Closing
Date.


          (ii) (x) Administrative Agent shall have received a certified copy of the
docket of the Chapter 11 Case showing that (x) there is no order amending,
modifying, staying, vacating or rescinding the Final Order entered on the
docket of the Clerk of the Bankruptcy Court as of November 25, 2002 or pending
appeal or motion to vacate or rescind the same and (y) there is no motion or
other pleading on file seeking to amend, modify, stay, vacate or rescind the
Plan of Reorganization.



          (k) Consummation of Restructuring Transactions.



          (i) All conditions to the Restructuring Transactions set forth in the
Restructuring Transaction Documents shall have been satisfied or the
fulfillment of any such conditions shall have been waived with the consent of
the Requisite Lenders, (2) the Restructuring Transactions shall have become
effective in accordance with the terms of the Restructuring Transaction
Documents and (3) the Effective Date with respect to the Stand-Alone Plan shall
have occurred;



          (ii) Administrative Agent shall have received a fully executed or
conformed copy of each Restructuring Transaction Document and any documents
executed in connection therewith, together with copies of each of the opinions
of counsel delivered to the parties under the Restructuring Transaction
Documents, accompanied by a letter from each such counsel (to the extent not
inconsistent with such counsel’s established internal policies) authorizing
Lenders to rely upon such opinion to the same extent as though it were
addressed to Lenders. Each Restructuring Transaction Document shall be in full
force and effect, and shall be in form and substance satisfactory to
Administrative Agent and the Requisite Lenders;



          (iii) The Plan of Reorganization shall not have been amended,
supplemented, restated or otherwise modified, whether pursuant to Section 1127
of the Bankruptcy Code, court order, or otherwise, without the consent of
Administrative Agent and the Requisite Lenders and, as of the Closing Date and
after giving effect to the Restructuring Transactions, the Stand-Alone Plan
shall have been substantially consummated in accordance with the terms thereof
and the terms of the Confirmation Orders;



          (iv) The Administrative Agent shall have received a certificate from a
senior officer of the Company to the effect that:



               (A) Governmental Approvals. All Governmental Authorizations and all other
authorizations, approvals and consents of any other Person required by the
Restructuring Transaction Documents or to consummate the Restructuring
Transactions have been obtained and are in full force and effect, except as
shall have been waived in accordance with the terms of this Agreement; and



               (B) Conditions Precedent. On the Closing Date, (i) all of the conditions
to effecting or consummating the Restructuring Transactions set forth in the
Restructuring Transaction Documents have been duly satisfied or, with the
consent of

49






 




Administrative Agent or Requisite Lenders (which consent shall not be
unreasonably withheld), waived, and (ii) the Restructuring Transactions have
been consummated in accordance with the Restructuring Transaction Documents and
all applicable laws.


          (l) Employment Agreements. The Company and its Subsidiaries shall not be
party to any employment agreement with any member of senior management, or any
amendment thereto, other than as listed on Schedule 3.1(l). Administrative
Agent shall have received a fully executed or conformed copy of each employment
agreement between Company or any Subsidiary and the members of senior
management.



          (m) Intercompany Indebtedness. As of the Closing Date, except as
expressly provided on Schedule 3.1(m), Company shall have terminated, forgiven,
written down, or canceled such Indebtedness due to it from its Subsidiaries,
and the Company’s Subsidiaries shall have terminated, forgiven, written down,
or canceled such Indebtedness due to such Subsidiaries from the Company or the
Company’s other Subsidiaries (including, without limitation, all Guarantors (as
defined in the Existing Credit Agreement and as defined in herein)) (the
“Intercompany Debt”) as it deems appropriate and advisable, provided that the
Company will consult in good faith on reasonable notice as to such
transactions, and will implement the reasonable requests of the Administrative
Agent and the Required Lenders as to the manner, timing and amount thereof.



          (n) No Default or Event of Default. As of the Closing Date, no event
shall have occurred and be continuing or would result from the consummation of
the Restructuring Transactions or the transactions contemplated by this
Agreement, the other Credit Documents or any Restructuring Transaction Document
that would constitute an Event of Default or a Default.



          (o) Waiver or Satisfaction of Conditions, Generally. The foregoing
notwithstanding: (a) if the Requisite Lenders acknowledge in writing that any
condition contained in this Section 3 (other than Section 3(f) and 3(g) to the
extent relating to the Administrative Agent) is waived or satisfied, then the
fulfillment of such condition shall not be required; and (b) any matter set
forth in this Section 3 that is by its terms subject to the consent, approval
or other satisfaction of the Administrative Agent shall also be deemed to
require the consent, approval or other satisfaction of the Requisite Lenders.



SECTION 4. REPRESENTATIONS AND WARRANTIES


     In order to induce Administrative Agent and Lenders to enter into this
Agreement, each Credit Party represents and warrants to each Lender, on the
Closing Date, that, except as set forth on the Schedules hereto (whether or not
a particular Schedule is described below), the following statements are true
and correct:


     4.1 Organization; Requisite Power and Authority; Qualification. Each of
Company and its Subsidiaries (i) is validly existing and (to the extent
applicable) in good standing under the laws of its jurisdiction of organization
as identified in Schedule 4.1 as of the Closing Date, (ii) has all requisite
power and authority to own and operate its properties, to carry on its business
as now conducted and as proposed to be conducted, to enter into the Credit
Documents and Restructuring Transaction Documents to which it is a party and to
carry out the


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transactions contemplated thereby, and (iii) is qualified to do business
and (to the extent applicable) in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its business and
operations, except in jurisdictions where the failure to be so qualified or in
good standing has not had, and could not be reasonably expected to have, a
Material Adverse Effect.


     4.2 Capital Stock and Ownership. The Capital Stock of each of Company and
its Subsidiaries has been duly authorized and validly issued and is fully paid
and non-assessable. Except as expressly provided on Schedule 4.2, the Company
or its Subsidiaries owns 100% of all of the equity interests in each of the
Company’s Affiliates. Except as expressly provided on Schedule 4.2, as of the
date hereof, there is no existing option, warrant, call, right, commitment or
other agreement to which Company or any of its Subsidiaries is a party
requiring, and there is no membership interest or other Capital Stock of
Company or any of Subsidiaries outstanding which upon conversion or exchange
would require, the issuance by any of Company’s Subsidiaries of any additional
membership interests or other Capital Stock of any of Company’s Subsidiaries or
other Securities convertible into, exchangeable for or evidencing the right to
subscribe for or purchase, a membership interest or other Capital Stock of any
of Company’s Subsidiaries. Schedule 4.2 correctly sets forth the ownership
interest of Company and each of its Subsidiaries in their respective
Subsidiaries as of the Closing Date, including, without limitation, all
holdings of Capital Stock, after giving effect to the Restructuring
Transactions.


     4.3 Due Authorization. The execution, delivery and performance of the
Credit Documents and the Restructuring Transaction Documents have been duly
authorized by all necessary action on the part of each Credit Party that is a
party thereto.


     4.4 No Conflict. Subject to Schedule 4.4, the execution, delivery and
performance by Credit Parties of the Credit Documents and the Restructuring
Transaction Documents to which they are parties and the consummation of the
transactions contemplated by the Credit Documents and the Restructuring
Transaction Documents do not and will not (a) violate any provision of any law
or any governmental rule or regulation applicable to Company or any of its
Subsidiaries, any of the Organizational Documents of Company or any of its
Subsidiaries, or any order, judgment or decree of any court or other agency of
government binding on Company or any of its Subsidiaries; (b) breach or
constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Company or any of its Subsidiaries; (c) result in or
require the creation or imposition of any Lien upon any of the properties or
assets of Company or any of its Subsidiaries (other than any Liens created
under any of the Credit Documents in favor of Administrative Agent, on behalf
of Lenders); or (d) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of Company or any of its
Subsidiaries, which, in either case, has not been obtained.


     4.5 Governmental Consents. The execution, delivery and performance by
Credit Parties of the Credit Documents and the Restructuring Transaction
Documents to which they are parties and the consummation of the transactions
contemplated by the Credit Documents and the Restructuring Transaction
Documents do not and will not require any registration with, consent or
approval of, or notice to, or other action to, with or by, any Governmental
Authority, except (a) for such of the foregoing that will have been made or
obtained on or before the Closing Date


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 including filings and recordings with respect to the Collateral to be
made, or otherwise delivered to Administrative Agent, as of the Closing Date
and (b) as set forth on Schedule 4.5.


     4.6 Binding Obligation. Each Credit Document and Restructuring
Transaction Document has been duly executed and delivered by each Credit Party
that is a party thereto and is the legally valid and binding obligation of such
Credit Party, enforceable against such Credit Party in accordance with its
respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’
rights generally or by equitable principles relating to enforceability.


     4.7 Historical Financial Statements. The Historical Financial Statements
were prepared in conformity with GAAP and fairly present, in all material
respects, the financial position, on a consolidated basis, of the Persons
described in such financial statements as at the respective dates thereof and
the results of operations and cash flows, on a consolidated basis, of the
entities described therein for each of the periods then ended, subject, in the
case of any such unaudited financial statements, to changes resulting from
audit and normal year-end adjustments. Except as set forth on Schedule 4.7,
neither Company nor any of its Subsidiaries has any contingent liability or
liability for taxes, long-term lease or unusual forward or long-term commitment
that is not reflected in the Historical Financial Statements or the notes
thereto and which in any such case is material in relation to the business,
operations, properties, assets, condition (financial or otherwise) or prospects
of Company and any of its Subsidiaries taken as a whole.


     4.8 No Material Adverse Change. Since June 30, 2002, no event or change
has occurred that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect, except as and to the extent disclosed in
reports filed with the Securities and Exchange Commission on or before October
15, 2002.


     4.9 No Restricted Junior Payments. Since June 30, 2002, neither Company
nor any of its Subsidiaries has directly or indirectly declared, ordered, paid
or made, or set apart any sum or property for, any Restricted Junior Payment or
agreed to do so except as permitted pursuant to Section 6.4 of the Existing
Credit Agreement or except as specifically set forth in the Plan of
Reorganization with respect to the Stand-Alone Plan.


     4.10 Adverse Proceedings, etc. Except as set forth on Schedule 4.10,
there are no Adverse Proceedings, individually or in the aggregate, that could
reasonably be expected to have a Material Adverse Effect. Neither Company nor
any of its Subsidiaries is subject to or in default with respect to any final
judgments, writs, injunctions, decrees, rules or regulations of any court or
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. No Adverse Proceeding shall be pending or threatened
on the Closing Date (a) with respect to this Agreement or any other Credit
Document or any of the transactions contemplated hereby or thereby, (b) with
respect to the Plan of Reorganization or any other Restructuring Transaction
Document or any of the transactions contemplated thereby, or (c) with respect
to any material debt of Company or any of its Subsidiaries which is to remain
outstanding after the Closing Date. No judgment, order, injunction or other
restraint prohibiting or imposing materially adverse conditions upon any


52






 



 Credit Document or Restructuring Transaction Document or any of the
transactions contemplated hereby or thereby shall exist.


     4.11 Payment of Taxes. Except as otherwise permitted under Section 5.3,
all material tax returns and reports of Company and its Subsidiaries required
to be filed by any of them have been timely filed or caused to be filed, and
all taxes shown on such tax returns to be due and payable, and all assessments,
fees and other governmental charges upon Company and its Subsidiaries and upon
their respective properties, assets, income, businesses and franchises which
are due and payable have been paid or caused to be paid when due and payable,
except such taxes the amount, applicability or validity of which are being
contested in good faith by appropriate proceedings and with respect to which
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor. Company knows
of no proposed tax assessment against Company or any of its Subsidiaries which
is not being actively contested by Company or such Subsidiary in good faith and
by appropriate proceedings; provided, such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have
been made or provided therefor.


     4.12 Properties.


          (a) Title. Each of Company and its Subsidiaries has (i) good, sufficient
and legal title to (in the case of fee interests in real property), (ii) valid
leasehold interests in (in the case of leasehold interests in real or personal
property), and (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in their
respective Historical Financial Statements referred to in Section 4.7, in each
case except for assets disposed of since the date thereof in the ordinary
course of business, as described in Schedule 4.12. Except as permitted by this
Agreement, all such properties and assets are free and clear of Liens.



          (b) Real Estate. As of the Closing Date, Schedule 4.12 contains a true,
accurate and complete list of (i) all Material Real Estate Assets, and (ii) all
leases, subleases or assignments of leases (together with all amendments,
modifications, supplements, renewals or extensions of any thereof) affecting
each Material Real Estate Asset of any Credit Party, regardless of whether such
Credit Party is the landlord or tenant (whether directly or as an assignee or
successor in interest) under such lease, sublease or assignment. Except as
specified in Schedule 4.12 as of the Closing Date, each agreement listed in
clause (ii) of the immediately preceding sentence is in full force and effect
and Company does not have knowledge of any default that has occurred and is
continuing thereunder, and each such agreement constitutes the legally valid
and binding obligation of each applicable Credit Party, enforceable against
such Credit Party in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors’ rights generally or by equitable principles.



     4.13 Collateral.


          (a) Attachment and Perfection. The execution and delivery of the
Collateral Documents by Credit Parties, together with the actions taken on or
prior to the date hereof, are effective to create in favor of Administrative
Agent, on behalf of Lenders, as security for the respective Obligations, a
valid and perfected First Priority Lien on all of the Collateral, and all

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filings and other actions necessary or desirable to perfect and maintain
the perfection and First Priority status of such Liens have been duly made or
taken and remain in full force and effect, other than (i) the filing of any UCC
financing statements and other documents for which the Credit Parties have
authorized the Administrative Agent to file or record (but not yet filed or
recorded), (ii) the actions required under federal law to register and record
interests in intellectual property or under state laws to perfect in motor
vehicles and (iii) the periodic filing of UCC continuation statements in
respect of UCC financing statements filed by or on behalf of Administrative
Agent.


          (b) Governmental Approvals, Etc. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by any Credit
Party of the Liens purported to be created in favor of Administrative Agent
pursuant to any of the Collateral Documents or (ii) the exercise by
Administrative Agent of any rights or remedies in respect of any Collateral
(whether specifically granted or created pursuant to any of the Collateral
Documents or created or provided for by applicable law), except (A) for such of
the foregoing that will have been made or obtained on or before the Closing
Date, (B) as set forth on Schedule 4.13(b), (C) as may be required, in
connection with the disposition of any Investment Property, by laws generally
affecting the offering and sale of Securities and (D) applicable state and
federal regulatory consents relating to transfers of securities or assets of
regulated entities in connection with the exercise of remedies by
Administrative Agent or any Lenders.



          (c) Filings. Except with respect to any Permitted Lien, no effective UCC
financing statement, fixture filing or other instrument similar in effect
covering all or any part of the Collateral is on file in any filing or
recording office.



          (d) Disclosure. All information supplied to Administrative Agent by or on
behalf of any Credit Party with respect to any of the Collateral (in each case
taken as a whole with respect to any particular Collateral) is accurate and
complete in all material respects.



     4.14 Environmental Matters. The statements in this Section 4.14 are
subject to the matters set forth in Schedule 4.14. Neither Company nor any of
its Subsidiaries nor any of their respective Facilities currently owned, or to
the best knowledge of Company and its Subsidiaries formerly owned, or
operations are subject to any outstanding written order, consent decree or
settlement agreement with any Person relating to any Environmental Law, any
Environmental Claim, or any Hazardous Materials Activity that, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect. Neither Company nor any of its Subsidiaries has received any letter or
request for information under Section 104 of the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. § 9604) or any comparable
state law. There are, and to the knowledge of each of Company and its
Subsidiaries, have been no conditions, occurrences, or Hazardous Materials
Activities which could reasonably be expected to form the basis of an
Environmental Claim against Company or any of its Subsidiaries that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. Neither Company nor any of its Subsidiaries nor, to
any Credit Party’s knowledge, any predecessor of Company or any of its
Subsidiaries has filed any notice under any Environmental Law of past or
present treatment of Hazardous Materials at any Facility, and none of the
operations of Company or any of its Subsidiaries involves the


54






 



 generation, transportation, treatment, storage or disposal of hazardous
waste, as defined under 40 C.F.R. Parts 260-270 or any state equivalent, except
in the ordinary course of business and in compliance with law. Compliance with
all current or reasonably foreseeable future requirements pursuant to or under
Environmental Laws could not be reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect. No event or condition has occurred
or is occurring with respect to Company or any of its Subsidiaries relating to
any Environmental Law, any Release of Hazardous Materials, or any Hazardous
Materials Activity which individually or in the aggregate has had, or could
reasonably be expected to have, a Material Adverse Effect.


     4.15 No Defaults. Neither Company nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any of its Contractual
Obligations in effect on the Closing Date, and no condition exists which, with
the giving of notice or the lapse of time or both, could constitute such a
default, except where the consequences, direct or indirect, of such default or
defaults, if any, could not reasonably be expected to have a Material Adverse
Effect.


     4.16 Material Contracts. Schedule 4.16 contains a true, correct and
complete list of all the Material Contracts in effect on the Closing Date, and
except as described thereon, all such Material Contracts are in full force and
effect to the extent not terminated in accordance with their respective terms,
and no defaults exist thereunder as of the Closing Date.


     4.17 Governmental Regulation. Subject to Schedule 4.17, neither Company
nor any of its Subsidiaries is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act or the Investment Company
Act of 1940 or under any other federal or state statute or regulation which may
limit its ability to incur Indebtedness or which may otherwise render all or
any portion of the Obligations unenforceable. Neither Company nor any of its
Subsidiaries is a “registered investment company” or company “controlled” by a
“registered investment company” or a “principal underwriter” of a “registered
investment company” as such terms are defined in the Investment Company Act of
1940.


     4.18 Margin Stock. Neither Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock.
No part of the proceeds of the Term Loans will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, to purchase or
carry Margin Stock and the making of the Term Loans does not and will not
violate Regulation T, U or X of the Board of Governors of the Federal Reserve
System.


     4.19 Employee Matters. Neither Company nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have
a Material Adverse Effect. There is (a) no unfair labor practice complaint
pending against Company or any of its Subsidiaries, or to the best knowledge of
Company and each of its Subsidiaries, threatened against any of them before the
National Labor Relations Board and no grievance or arbitration proceeding
arising out of or under any collective bargaining agreement that is so pending
against Company or any of its Subsidiaries or to the best knowledge of Company
and each of its Subsidiaries, threatened against any of them that could
reasonably be expected to result in a Material Adverse Effect, (b) no strike or
work stoppage in existence or threatened involving Company or any of its
Subsidiaries that could reasonably be expected to have a Material Adverse


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 Effect, and (c) to the best knowledge of Company and each of its
Subsidiaries, no union representation question existing with respect to the
employees of Company or any of its Subsidiaries and, to the best knowledge of
Company and each of its Subsidiaries, no union organization activity that is
taking place, except (with respect to any matter specified in clause (a), (b)
or (c) above, either individually or in the aggregate) such as is not
reasonably likely to have a Material Adverse Effect.


     4.20 Employee Benefit Plans. Company and each of its Subsidiaries are in
compliance with all applicable provisions and requirements of ERISA and the
Internal Revenue Code and the regulations and published interpretations
thereunder with respect to each Company Employee Benefit Plan, and have
performed all their obligations under each such Company Employee Benefit Plan,
except where non-compliance could not reasonably be expected to result in a
Material Adverse Effect. Each Company Employee Benefit Plan which is intended
to qualify under Section 401(a) of the Internal Revenue Code has been
determined to be so qualified and exempt from federal income taxation under
Section 501(a) of the Internal Revenue Code by the Internal Revenue Service,
and nothing has occurred and no condition exists with respect to any such
Company Employee Benefit Plan that could reasonably be expected to cause the
loss of such qualification or exemption from tax. No liability to the PBGC
(other than required premium payments), the Internal Revenue Service, any
Company Employee Benefit Plan or any trust established under Title IV of ERISA
has been or is expected to be incurred by Company, any of its Subsidiaries or
any of their ERISA Affiliates. Except as set forth on Schedule 4.20, no ERISA
Event has occurred or is reasonably expected to occur. Except to the extent
required under Section 4980B of the Internal Revenue Code or similar state
laws, no Company Employee Benefit Plan provides health or welfare benefits
(through the purchase of insurance or otherwise) for any retired or former
employee of Company or any of its Subsidiaries. There are no unfunded benefit
liabilities (as defined in Section 4001(a)(18) of ERISA) with respect to any
Pension Plan. There is no potential liability of Company, its Subsidiaries or
their respective ERISA Affiliates for a withdrawal from any Multiemployer Plan
(within the meaning of Section 4203 of ERISA). Company and each of its
Subsidiaries have complied with the requirements of Section 515 of ERISA with
respect to any Multiemployer Plan and are not in “default” (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan.


     4.21 Certain Fees. No broker’s or finder’s fee or commission will be
payable with respect hereto or any Restructuring Transaction Document of the
transactions contemplated hereby or thereby other than the fees, if any, paid
to Houlihan Lokey Howard & Zukin.


     4.22 Intentionally omitted.


     4.23 Compliance with Statutes, etc. Each of Company and its Subsidiaries
is in compliance with all applicable statutes, regulations and orders of, and
all applicable restrictions imposed by, all Governmental Authorities, in
respect of the conduct of its business and the ownership of its property
(including compliance with all applicable Environmental Laws with respect to
any Material Real Estate Asset or governing its business and the requirements
of any permits issued under such Environmental Laws with respect to any such
Real Estate Asset or the operations of Company or any of its Subsidiaries),
except such non-compliance that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.


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     4.24 Restructuring Transaction Documents.


          (a) Delivery. Company has delivered to Administrative Agent complete and
correct copies of (i) each Restructuring Transaction Document and of all
exhibits and schedules thereto as of the date hereof and (ii) copies of any
material amendment, restatement, supplement or other modification to or waiver
of each Restructuring Transaction Document entered into after the date hereof.



          (b) Representations and Warranties. Except to the extent otherwise
expressly set forth herein or in the schedules hereto, and subject to the
qualifications set forth therein, each of the representations and warranties
given by any Credit Party in any Restructuring Transaction Document is true and
correct in all material respects as of the Closing Date (or as of any earlier
date to which such representation and warranty specifically relates).
Notwithstanding anything in the Restructuring Transaction Documents to the
contrary, the representations and warranties of each Credit Party set forth in
this Section 4.24 shall, solely for purposes hereof, survive the Closing Date
for the benefit of Lenders.



     4.25 Disclosure. Subject to Schedule 4.25, no representation or warranty
of any Credit Party contained in any Credit Document or in any other documents,
certificates or written statements furnished to Lenders by or on behalf of
Company or any of its Subsidiaries for use in connection with the transactions
contemplated hereby, at the time furnished to the Lenders (including, without
limitation, all information contained in the Plan of Reorganization, the
Disclosure Statement and each document and agreement executed and delivered in
connection with or relating to the restructuring effected by the Confirmation
Orders, in each case, excluding all information to the extent relating to the
“FL/Telmex Plan” (as defined in the Plan of Reorganization), contained any
untrue statement of a material fact or omitted to state a material fact (known
to Company or any of its Subsidiaries, in the case of any document not
furnished by either of them) necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in
which the same were made. Any projections and pro forma financial information
contained in such materials (excluding all information to the extent relating
to the FL/Telmex Plan) are based upon good faith estimates and assumptions
believed by Company or any of its Subsidiaries to be reasonable at the time
made, it being recognized by Lenders that such projections as to future events
are not to be viewed as facts and that actual results during the period or
periods covered by any such projections may differ from the projected results.
There are no facts known (or which should upon the reasonable exercise of
diligence be known) to Company or any of its Subsidiaries (other than matters
of a general economic nature) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and that have not
been disclosed herein or in such other documents, certificates and statements
furnished to Lenders for use in connection with the transactions contemplated
hereby.


SECTION 5. AFFIRMATIVE COVENANTS


     Each Credit Party covenants and agrees that until payment in full of all
Obligations, each Credit Party shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 5.


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     5.1 Financial Statements and Other Reports. Company will deliver to
Administrative Agent, with copies sufficient for each Lender:


          (a) Monthly Reports. As soon as available, and in any event within 15
days of the last day of each month ending after the Closing Date, monthly cash
balance reports for Company and each of its Subsidiaries in form and substance
satisfactory to the Administrative Agent and the Requisite Lenders;



          (b) Quarterly Financial Statements. As soon as available, and in any
event within ninety (90) days after the end of each of the first three Fiscal
Quarters of each Fiscal Year, the consolidated and consolidating balance sheets
of Company and its Subsidiaries as at the end of such Fiscal Quarter and the
related consolidated (and with respect to statements of income, consolidating)
statements of income, and cash flows of Company and its Subsidiaries for such
Fiscal Quarter and for the period from the beginning of the then current Fiscal
Year to the end of such Fiscal Quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding periods of the
previous Fiscal Year, all in reasonable detail, together with (i) a Financial
Officer Certification and (ii) reports in form and substance satisfactory to
the Administrative Agent and the Requisite Lenders showing variances for the
corresponding periods to the annual budget for such Fiscal Year, and such other
information regarding operating statistics and performance as may be requested
by Administrative Agent;



          (c) Annual Financial Statements. As soon as available, and in any event
within one hundred twenty (120) days after the end of each Fiscal Year, (i) the
consolidated and consolidating balance sheets of Company and its Subsidiaries
as at the end of such Fiscal Year and the related consolidated (and with
respect to statements of income, consolidating) statements of income,
stockholders’ equity and cash flows of Company and its Subsidiaries for such
Fiscal Year, setting forth in each case in comparative form the corresponding
figures for the previous Fiscal Year, in reasonable detail, together with a
Financial Officer Certification; (ii) with respect to such consolidated
financial statements a report thereon of Ernst & Young LLP or other independent
certified public accountants of recognized national standing selected by
Company, and reasonably satisfactory to Administrative Agent and the Requisite
Lenders (which report shall be unqualified as to going concern and scope of
audit, and shall state that such consolidated financial statements fairly
present, in all material respects, the consolidated financial position of
Company and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated in conformity with
GAAP applied on a basis consistent with prior years (except as otherwise
disclosed in such financial statements) and that the examination by such
accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards) together with a
written statement by such independent certified public accountants stating (1)
that their audit examination has included a review of the terms of the Credit
Documents, (2) whether, in connection therewith, any condition or event that
constitutes a Default or an Event of Default has come to their attention and,
if such a condition or event has come to their attention, specifying the nature
and period of existence thereof, and (3) that nothing has come to their
attention that causes them to believe that the information contained in any
Compliance Certificate is not correct or that the matters set forth in such
Compliance Certificate are not stated in accordance with the terms hereof,
(iii) revised Schedules 4.1 and 4.2 (if necessary) reflecting all changes in
the organizational structure and capital structure of Company and its
Subsidiaries since the

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delivery of the last quarterly financial information, which revised
Schedules 4.1 and 4.2 will be deemed to amend the then-existing Schedules 4.1
and 4.2 for all purposes under this Agreement, (iv) reports, in form and
substance satisfactory to the Administrative Agent and the Requisite Lenders,
showing variances for the corresponding period to the annual budget for such
Fiscal Year, (v) such information regarding operating statistics and
performance as may be requested by Administrative Agent, and (vi) a copy of the
annual budget approved by the board of directors of Company for the then
current Fiscal Year of Company and its Subsidiaries (which such annual budget
shall be in the form of previous annual budgets and with such changes to form
as are reasonably satisfactory to Administrative Agent and the Requisite
Lenders);


          (d) Compliance Certificate. Together with each delivery of financial
statements of Company and its Subsidiaries pursuant to Sections 5.1(b) and
5.1(c), a duly executed and completed Compliance Certificate;



          (e) Statements of Reconciliation after Change in Accounting Principles.
If, as a result of any change in accounting principles and policies from those
used in the preparation of the Historical Financial Statements, the
consolidated financial statements of Company and its Subsidiaries delivered
pursuant to Section 5.1(b) or 5.1(c) will differ in any material respect from
the consolidated financial statements that would have been delivered pursuant
to such subdivisions had no such change in accounting principles and policies
been made, then, together with the first delivery of such financial statements
after such change, one or more statements of reconciliation for all such prior
financial statements in form and substance satisfactory to Administrative Agent
and the Requisite Lenders;



          (f) Notice of Default. Promptly upon any executive officer of Company or
any of its Subsidiaries obtaining knowledge (i) of any condition or event that
constitutes a Default or an Event of Default or that notice has been given to
Company or any of its Subsidiaries with respect thereto; (ii) of any condition
or event that constitutes a default or an event of default (or any defined
terms or event having a similar purpose) as defined in, and in respect of, the
Exit Revolver shall have occurred; (iii) that any Person has given any notice
to Company or any of its Subsidiaries or taken any other action with respect to
any event or condition set forth in Section 8.1(b); (iv) of any condition or
event of a type required to be disclosed in a current report on Form 8-K of the
Securities and Exchange Commission; or (v) of the occurrence of any event or
change that has caused or evidences, either in any case or in the aggregate, a
Material Adverse Effect, a certificate of its Authorized Officers specifying
the nature and period of existence of such condition, event or change, or
specifying the notice given and action taken by any such Person and the nature
of such claimed Event of Default, Default, default, event or condition, and
what action Company has taken, is taking and proposes to take with respect
thereto;



          (g) Notice of Litigation. Promptly upon (A) any executive officer of
Company or any of its Subsidiaries obtaining knowledge of (i) the institution
of, or non-frivolous threat of, any Adverse Proceeding not previously disclosed
in writing by Company to Lenders, or (ii) any material development in any
Adverse Proceeding that, in the case of either (i) or (ii) if adversely
determined, could be reasonably expected to have a Material Adverse Effect, or
seeks to enjoin or otherwise prevent the consummation of, or to recover any
damages or obtain relief as a result of, the transactions contemplated hereby,
and (B) the assertion or a commercial tort

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claim by any Credit Party or commencement of any action relating to any
commercial tort claim by any Credit Party in excess of $1,000,000 individually
or $10,000,000 in the aggregate, written notice thereof together with such
other information as may be reasonably available to Company or any of its
Subsidiaries to enable Lenders and their counsel to evaluate such matters;


          (h) ERISA. (i) Promptly upon becoming aware of the occurrence of or
forthcoming occurrence of any ERISA Event that could reasonably be expected to
result in a Material Adverse Effect, a written notice specifying the nature
thereof, what action Company, any of its Subsidiaries or, to the knowledge of
Company and its Subsidiaries, any of their respective ERISA Affiliates has
taken, is taking or proposes to take with respect thereto and, when known, any
action taken or threatened by the Internal Revenue Service, the Department of
Labor or the PBGC with respect thereto; and (ii) with reasonable promptness,
copies of (1) each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) filed by Company or any of its Subsidiaries with any
Governmental Authority with respect to each Pension Plan; (2) all notices
received by Company, any of its Subsidiaries or, to the knowledge of Company
and its Subsidiaries, any of their respective ERISA Affiliates from a
Multiemployer Plan sponsor concerning an ERISA Event that could reasonably be
expected to result in a Material Adverse Effect; and (3) copies of such other
documents or governmental reports or filings relating to any Company Employee
Benefit Plan as Administrative Agent shall reasonably request;



          (i) Insurance Report. As soon as practicable and in any event by the last
day of each Fiscal Year, a report in detail reasonably satisfactory to
Administrative Agent and the Requisite Lenders listing all material insurance
coverage maintained as of the date of such report by Company and its
Subsidiaries and all material insurance coverage planned to be maintained by
Company and its Subsidiaries in the immediately succeeding Fiscal Year;



          (j) Notice of Change in Board of Directors. With reasonable promptness,
written notice of any change in the board of directors (or similar governing
body) of Company or any of its Subsidiaries;



          (k) Notice Regarding Material Contracts. Promptly, and in any event
within ten (10) Business Days after (i) any Material Contract of Company or any
of its Subsidiaries is terminated or amended in a manner that is materially
adverse to Company or such Subsidiary, as the case may be, or (ii) any new
Material Contract is entered into, a written statement describing such event,
with copies of such material amendments or new contracts, delivered, to
Administrative Agent (to the extent (1) such information is not disclosed or
incorporated by reference in any filing with the Securities and Exchange
Commission and (2) such delivery is permitted by the terms of any such Material
Contract, provided, no such prohibition on delivery shall be effective if it
were bargained for by Company or its applicable Subsidiary with the intent of
avoiding compliance with this Section 5.1(k)), and an explanation of any
actions being taken with respect thereto;



          (l) Information Regarding Collateral. (a) Company will furnish to
Administrative Agent prompt written notice of any change (i) in any Credit
Party’s corporate name, (ii) in any Credit Party’s organization or jurisdiction
of organization, (iii) in the location of any Credit Party’s chief executive
office, its principal place of business, any office in which it maintains books
or records relating to Collateral owned by it or any office or facility at
which

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Collateral (other than real property and improvements and fixtures
thereto) owned by it with a book value in excess of $250,000 is located
(including the establishment of any such new office or facility), (iv) in any
Credit Party’s Federal Taxpayer Identification Number, or (v) in any Credit
Party’s state law identification number required for UCC filings, if any.
Company agrees not to effect or permit any change referred to in the preceding
sentence unless all filings have been made under the Uniform Commercial Code or
otherwise that are required in order for the Administrative Agent to continue
at all times following such change to have a valid, legal and perfected
security interest in all the Collateral and for the Collateral at all times
following such change to have a valid, legal and perfected security interest as
contemplated in the Collateral Documents. Company also agrees promptly to
notify the Administrative Agent if any material portion of the Collateral is
damaged or destroyed.


          (m) Annual Collateral Verification. Each year, at the time of delivery of
annual financial statements with respect to the preceding Fiscal Year pursuant
to Section 5.1(c), Company shall, at the request of the Requisite Lenders,
deliver to Administrative Agent within sixty (60) days following such request
(i) a Collateral Questionnaire with respect to the first Fiscal Year following
the Closing Date and (ii) with respect to each subsequent Fiscal Year, an
Officer’s Certificate (A) either confirming that there has been no change in
such information since the date of the Collateral Questionnaire delivered
pursuant to clause (i) above or the date of the most recent certificate
delivered pursuant to this Section and/or identifying such changes (B)
certifying that all Uniform Commercial Code financing statements (including
fixtures filings, as applicable) or other appropriate filings, recordings or
registrations, have been filed of record in each governmental, municipal or
other appropriate office in each jurisdiction identified pursuant to the later
of clause (i) or (ii)(A) above, as the case may be, to the extent necessary to
protect and perfect the security interests under the Collateral Documents for a
period of not less than 18 months after the date of such certificate (except as
noted therein with respect to any continuation statements to be filed within
such period).



          (n) Notices under Restructuring Transaction Documents. Promptly after the
sending, receiving or filing thereof, Company shall send Administrative Agent
and Lenders copies of all material notices, certificates or reports delivered
pursuant to any Restructuring Transaction Document and all other notices,
certificates, or reports delivered pursuant to any Restructuring Transaction
Document which are reasonably requested by Administrative Agent or Requisite
Lenders.



          (o) Other Information. Promptly upon their becoming available and as may
be requested by Administrative Agent or any Lender, copies of (i) all financial
statements, reports, notices and proxy statements sent or made available
generally by Company to its security holders acting in such capacity or by any
Subsidiary of Company to its security holders other than Company or another
Subsidiary of Company, (ii) all regular and periodic reports and all
registration statements (other than on Form S-8 or a similar form) and
prospectuses, if any, filed by Company or any of its Subsidiaries with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, (iii) all press releases and
other statements made available generally by Company or any of its Subsidiaries
to the public concerning material developments in the business of Company or
any of its Subsidiaries, and (iv) such other information and data with respect
to Company or any of its Subsidiaries as from time to time may be reasonably
requested by Administrative Agent.

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           (p) Pro Formas. Promptly upon their becoming available, but in no event
later than 60 days after the Closing Date, the pro forma consolidated balance
sheets of Company and its Subsidiaries as of the Closing Date, prepared in
accordance with GAAP and reflecting the consummation of the transactions
contemplated by the Credit Documents to occur on or prior to the Closing Date
and the Restructuring Transactions, which pro forma financial statements shall
be in form and substance satisfactory to Administrative Agent and Requisite
Lenders.



     5.2 Existence. Except as otherwise permitted under Section 6.7, each
Credit Party will, and will cause each of its Subsidiaries to, at all times
preserve and keep in full force and effect its existence and all rights and
franchises, licenses and permits material to its business; provided, no Credit
Party nor any of its Subsidiaries shall be required to preserve any such
existence, right or franchise, license or permit if Company’s or such Person’s
board of directors (or similar governing body) shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
Company or such Person, and that the loss thereof is not disadvantageous in any
material respect to Company or such Person or to Lenders.


     5.3 Payment of Taxes and Claims. Each Credit Party will, and will cause
each of its Subsidiaries to, pay all Taxes imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty or fine accrues thereon, and all claims
(including claims for labor, services, materials and supplies) for sums that
have become due and payable and that by law have or may become a Lien upon any
of its properties or assets, prior to the time when any penalty or fine shall
be incurred with respect thereto, except for such non-compliance that could not
reasonably be expected to result in a Material Adverse Effect, and provided, no
such Tax or claim need be paid if it is being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted, so long
as (a) adequate reserves or other appropriate provision, as shall be required
in conformity with GAAP shall have been made therefor, and (b) in the case of a
charge or claim which has or may become a Lien against any of the Collateral,
such contest proceedings conclusively operate to stay the sale of any portion
of the Collateral to satisfy such Tax or claim.


     5.4 Maintenance of Properties. Each Credit Party will, and will cause
each of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all of its
material properties used or useful in the business of Company and its
Subsidiaries and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof.


     5.5 Insurance. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance,
third party property damage insurance, business interruption insurance and
casualty insurance with respect to liabilities, losses or damage in respect of
the assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by Persons of
established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for such
Persons, except for such non-compliance that could not reasonably be expected
to result in a Material Adverse Effect. Without limiting the generality of the
foregoing, Company will maintain or cause to be maintained (a) flood insurance
with respect to each Flood Hazard Property that is located in a community that
participates in the

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National Flood Insurance Program, in each case in compliance with any
applicable regulations of the Board of Governors of the Federal Reserve System,
and (b) replacement value casualty insurance on the Collateral under such
policies of insurance, with such insurance companies, in such amounts, with
such deductibles, and covering such risks as are at all times carried or
maintained under similar circumstances by Persons of established reputation
engaged in similar businesses. Each such policy of insurance shall (i) name
Administrative Agent, on behalf of Lenders as an additional insured thereunder
as its interests may appear and (ii) in the case of each casualty insurance
policy, contain a loss payable clause or endorsement, satisfactory in form and
substance to Administrative Agent, that names Administrative Agent, on behalf
of Lenders as the loss payee thereunder for any covered loss in excess of
$1,000,000 and provides for at least thirty (30) days’ prior written notice to
Administrative Agent of any modification or cancellation of such policy.


     5.6 Inspections; Lenders Meetings. Each Credit Party will, and will cause
each of its Subsidiaries, to permit any authorized representatives designated
by the Requisite Lenders to visit and inspect any of the properties of any
Credit Party and any of its respective Subsidiaries, to inspect, copy and take
extracts from its and their financial and accounting records, and to discuss
its and their affairs, finances and accounts with its and their officers and
independent public accountants, all upon reasonable notice and at such
reasonable times during normal business hours and as often as may reasonably be
requested. Company and its Subsidiaries will, upon the request of
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year to be held at
Company’s corporate offices (or at such other location as may be agreed to by
Company and Administrative Agent) at such time as may be agreed to by Company
and Administrative Agent.


     5.7 Compliance with Laws. Each Credit Party will comply, and shall cause
each of its Subsidiaries and all other Persons, if any, on or occupying any
Facilities to comply, with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority (including all
Environmental Laws), noncompliance with which could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.


     5.8 Environmental.


          (a) Environmental Disclosure. Company will deliver to Administrative
Agent:



          (i) as soon as practicable following receipt thereof, copies of all
environmental audits, investigations, analyses and reports of any kind or
character, whether prepared by personnel of Company or any of its Subsidiaries
or by independent consultants, governmental authorities or any other Persons,
with respect to environmental matters at any Facility or with respect to any
Environmental Claims that could reasonably, individually or in the aggregate,
be expected to result in a Material Adverse Effect;



          (ii) promptly upon the occurrence thereof, written notice describing in
reasonable detail (1) any Release required to be reported to any federal, state
or local governmental or regulatory agency under any applicable Environmental
Laws, (2) any remedial action taken by Company or any other Person in response
to (A) any Hazardous Materials

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Activities the existence of which has a reasonable possibility of
resulting in one or more Environmental Claims having, individually or in the
aggregate, a Material Adverse Effect, or (B) any Environmental Claims that,
individually or in the aggregate, have a reasonable possibility of resulting in
a Material Adverse Effect, and (3) Company’s or any of its Subsidiaries’
discovery of any occurrence or condition on any real property adjoining or in
the vicinity of any currently owned Facility that could reasonably be expected
to have a Material Adverse Effect;


          (iii) as soon as practicable following the sending or receipt thereof by
Company or any of its Subsidiaries, a copy of any and all written
communications with respect to (1) any Environmental Claims that, individually
or in the aggregate, have a reasonable possibility of giving rise to a Material
Adverse Effect, (2) any Release required to be reported to any federal, state
or local governmental or regulatory agency, and (3) any request for information
from any governmental agency that suggests such agency is investigating whether
Company or any of its Subsidiaries may be potentially responsible for any
Hazardous Materials Activity;



          (iv) prompt written notice describing in reasonable detail (1) any
proposed acquisition of stock, assets, or property by Company or any of its
Subsidiaries that, based on then-available information and to the knowledge of
Company or its Subsidiaries, could reasonably be expected to (A) expose Company
or any of its Subsidiaries to, or result in, Environmental Claims that could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect or (B) affect the ability of Company or any of its Subsidiaries
to maintain in full force and effect all material Governmental Authorizations
required under any Environmental Laws for their respective operations and (2)
any proposed action to be taken by Company or any of its Subsidiaries to modify
current operations in a manner that could reasonably be expected to subject
Company or any of its Subsidiaries to any additional material obligations or
requirements under any Environmental Laws; and



          (v) with reasonable promptness, such other documents and information as
from time to time may be reasonably requested by Administrative Agent in
relation to any matters disclosed pursuant to this Section 5.8(a).



          (b) Hazardous Materials Activities, Etc. Each Credit Party shall promptly
take, and shall cause each of its Subsidiaries promptly to take, any and all
actions necessary to (i) cure any violation of applicable Environmental Laws
by such Credit Party or its Subsidiaries that could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, and (ii)
make an appropriate response to any Environmental Claim against such Credit
Party or any of its Subsidiaries and discharge any obligations it may have to
any Person thereunder where failure to do so could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.



     5.9 Subsidiaries. In the event that any Person becomes a Domestic
Subsidiary of Company, Company shall (a) promptly cause such Domestic
Subsidiary to become a Guarantor hereunder and a Grantor under the Pledge and
Security Agreement by executing and delivering to Administrative Agent a
Counterpart Agreement, and (b) take all such actions and execute and deliver,
or cause to be executed and delivered, all such documents, instruments,
agreements, and certificates as are similar to those described in Sections
3.1(b) and 3.1(f); provided that the actions specified in the foregoing clauses
(a) and (b) of this sentence shall not be required for (1)


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 those Subsidiaries where Company has acquired less than 100%, but at least
80% of, the Capital Stock of such Subsidiary, until such time as any such
Subsidiary becomes a wholly owned Subsidiary of Company or (2) any Person that
becomes a Domestic Subsidiary of Company after the date hereof if and to the
extent and for so long as such Person’s Guaranty of the Obligations or grant of
Liens under the Pledge and Security Agreement would violate applicable law or
constitute a default under the terms of any Acquired Debt of such Person or
would obligate it pursuant to the terms of such Acquired Debt to guarantee or
secure any Indebtedness other than the Term Loans, unless Administrative Agent
requests and otherwise consents to the issuance of a guarantee or the granting
of Liens in respect of such Indebtedness, it being understood that the actions
specified in the foregoing clauses (a) and (b) of this sentence will be taken
at the earliest time and to the full extent they do not violate applicable law
or constitute a default under such Acquired Debt or obligate it to guarantee or
secure such other Indebtedness. In the event that any Person becomes a Foreign
Subsidiary of Company, and the ownership interests of such Foreign Subsidiary
are owned by Company or by any Domestic Subsidiary thereof, subject to
applicable law, Company shall, or shall cause such Domestic Subsidiary to,
deliver, all such documents, instruments, agreements, and certificates as are
similar to those described in Section 3.1(b), and take all of the actions
necessary to grant and to perfect a First Priority Lien in favor of
Administrative Agent, for the benefit of Lenders, under the Pledge and Security
Agreement in such ownership interests; provided that no more than 65% of the
Capital Stock of such Foreign Subsidiary shall be subject to the provisions of
this Section 5.9 and provided further that such Foreign Subsidiary shall be a
first tier Foreign Subsidiary of Company or a Domestic Subsidiary. With
respect to each such Subsidiary, Company shall promptly send to Administrative
Agent written notice setting forth with respect to such Person (i) the date on
which such Person became a Subsidiary of Company, and (ii) all of the data
required to be set forth in Schedules 4.1 and 4.2 with respect to all
Subsidiaries of Company; provided, such written notice shall be deemed to
supplement Schedules 4.1 and 4.2 for all purposes hereof.


     5.10 Additional Material Real Estate Assets. In the event that any Credit
Party acquires a Material Real Estate Asset or a Real Estate Asset becomes a
Material Real Estate Asset and such interest has not otherwise been made
subject to the Lien of the Collateral Documents in favor of Administrative
Agent, for the benefit of Secured Parties, then such Credit Party,
contemporaneously with acquiring such Material Real Estate Asset or with such
Real Estate Asset becoming a Material Real Estate Asset, shall take all such
actions and execute and deliver, or cause to be executed and delivered, all
such mortgages, documents, instruments, agreements, opinions and certificates
with respect to each such Material Real Estate Asset that Administrative Agent
shall reasonably request to create in favor of Administrative Agent, for the
benefit of Secured Parties, a valid and, subject to any filing and/or recording
referred to herein, perfected First Priority security interest in such Material
Real Estate Assets. In addition to the foregoing, Company shall, at the
request of Administrative Agent, deliver, from time to time, to Administrative
Agent such appraisals as are required by law or regulation of Real Estate
Assets with respect to which Administrative Agent has been granted a Lien.


     5.11 Further Assurances. At any time or from time to time upon the
request of Administrative Agent, each Credit Party will, at its expense,
promptly execute, acknowledge and deliver such further documents and do such
other acts and things as Administrative Agent may reasonably request in order
to effect fully the purposes of the Credit Documents. In furtherance and not
in limitation of the foregoing, each Credit Party shall take such actions as
Administrative


65






 



 Agent may reasonably request from time to time (including, without
limitation, the execution and delivery of guaranties, security agreements,
pledge agreements, mortgages, deeds of trust, landlord’s consents and
estoppels, control agreements, acknowledgments of pledge, stock powers,
financing statements and other documents, the filing or recording of any of the
foregoing, title insurance with respect to any of the foregoing that relates to
any Real Estate Asset, and the delivery of stock certificates and other
collateral with respect to which perfection is obtained by possession) to
ensure that the Obligations are guarantied and are secured as provided in, and
subject to limitations contained in, the Credit Documents and that the
Administrative Agent obtains and retains a First Priority Lien on the assets of
the Company and its Subsidiaries as contemplated in the Recitals hereto.


     5.12 Maintenance of Corporate Separateness. Each Credit Party will, and
will cause each of its Subsidiaries to, satisfy customary corporate
formalities, including the holding of regular board of directors’ and
shareholders’ meetings or action by directors or shareholders without a meeting
and the maintenance of corporate offices and records. Neither Company nor any
of its Subsidiaries shall take any action, or conduct its affairs in a manner,
which is likely to result in the corporate existence of Company or any of its
Subsidiaries being ignored, or in the assets and liabilities of Company or any
of its Subsidiaries being substantively consolidated with those of any other
such Person in a bankruptcy, reorganization or other insolvency proceeding.


     5.13 Interest Rate Protection. No later than ninety (90) days following
the Closing Date and at all times thereafter, Company shall maintain, or caused
to be maintained, in effect one or more Interest Rate Agreements for a term of
not less than three years and otherwise in form and substance reasonably
satisfactory to Administrative Agent, which Interest Rate Agreements shall
effectively limit the Unadjusted Eurodollar Rate Component of the interest
costs to Company with respect to an aggregate notional principal amount of not
less than 50% of the aggregate total Indebtedness of Company outstanding from
time to time (based on the assumption that such notional principal amount was a
Eurodollar Rate Loan with an Interest Period of three months).


SECTION 6. NEGATIVE COVENANTS


     Each Credit Party covenants and agrees that, until payment in full of all
Obligations, such Credit Party shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 6.


     6.1 Indebtedness. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to any
Indebtedness, except:


          (a) the Obligations;



          (b) Indebtedness of Company to any Guarantor, or of any Guarantor to
Company or any Guarantor; provided, (i) all such Indebtedness shall be
evidenced by promissory notes and all such notes shall be held at all times
either (A) by Company or such applicable Guarantor or (B) by the Administrative
Agent, to the extent so required pursuant to the Pledge and Security Agreement,
(ii) all such Indebtedness shall be unsecured and

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subordinated in right of payment to the payment in full of the Obligations
pursuant to the terms of the applicable promissory notes (any such Indebtedness
as of the Closing Date shall become so evidenced by a promissory note at such
time) or an intercompany subordination agreement that in any such case, is
reasonably satisfactory to Administrative Agent, and (iii) any payment by any
such Guarantor under any Guaranty of the Obligations shall result in a pro
tanto reduction of the amount of any Indebtedness owed by such Subsidiary to
Company or to any of its Subsidiaries for whose benefit such payment is made;


          (c) Permitted Indebtedness;



          (d) Indebtedness incurred by Company or any Subsidiary of Company arising
from agreements providing for indemnification, adjustment of purchase price or
similar obligations, or from guaranties or letters of credit, surety bonds or
performance bonds securing the performance of the Company or any of its
Subsidiaries pursuant to such agreements or which exist in connection with
Permitted Acquisitions or permitted dispositions of any business, assets or
Subsidiary of Company or any of its Subsidiaries;



          (e) Indebtedness of Company or any Subsidiary of Company which may be
deemed to exist pursuant to any guaranties, performance, surety, statutory,
appeal or similar obligations incurred in the ordinary course of business or
letters of credit securing the performance of Company or any of its
Subsidiaries pursuant to such agreements or in connection with Permitted
Acquisitions or dispositions of any business, assets or Subsidiary of Company
or any of its Subsidiaries, in each case as otherwise permitted hereunder;



          (f) Indebtedness of Company or any Subsidiary of Company in respect of
netting services, overdraft protections and otherwise in connection with
deposit accounts;



          (g) guaranties by Company or any Subsidiary of Company in the ordinary
course of business of the obligations of suppliers, customers, franchisees and
licensees of Company and any Subsidiary of Company;



          (h) Indebtedness of Company or any Subsidiary of Company with respect to
Capital Leases;



          (i) Permitted Equipment Financings, provided that a Permitted Equipment
Financing on behalf of a Subsidiary shall not be deemed to give rise to an
Investment under Section 6.5;



          (j) Indebtedness in respect of Liens described in Section 6.2(d) and
corporate guarantees thereof or the obligation so secured;



          (k) Acquired Debt, but not any extensions, renewals or replacement of such
Indebtedness except (i) renewals and extensions expressly provided for in the
agreements evidencing any such Indebtedness as the same are in effect on the
date such Indebtedness becomes Acquired Debt and (ii) refinancings and
extensions of any such Indebtedness if the terms and conditions thereof are not
less favorable to the obligor thereon or to the Lenders than the Indebtedness
being refinanced or extended and the average life maturity thereof is greater
than or equal to that of the Indebtedness being refinanced or extended;
provided, such

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Indebtedness permitted under the immediately preceding clause (i) or (ii)
above shall (1) be renewed, extended or refinanced only by Company or the
existing obligor thereunder or direct or indirect parent of such obligor, (2)
not (A) exceed in a principal amount the Indebtedness being renewed, extended
or refinanced plus the costs of refinancing (including consent fees), accrued
interest and premiums or (B) be incurred, created or assumed if any Default or
Event of Default has occurred and is continuing or would result therefrom, and
(3) shall be approved by the Company’s board of directors; and provided further
that the payment of any such Acquired Debt in connection with any extensions,
renewals or replacement or refinancing thereof by Company shall not be deemed
to give rise to an Investment under Section 6.5;


          (l) Hedge Agreements;



          (m) other Indebtedness of Company or any Guarantors in an aggregate
amount not to exceed at any time $10,000,000 outstanding; and



          (n) Indebtedness with respect to the Exit Revolver; provided that (i) no
Indebtedness may be incurred with respect to the Exit Revolver (x) at any time
prior to March 31, 2004, (y) if immediately prior to, or after giving effect to
any such incurrence, a Default or Event of Default shall have occurred and be
continuing or would result therefrom, or (z) at any time that the aggregate
amount of Company’s and its Subsidiaries’ Cash and Cash Equivalents net of
outstanding and uncleared checks exceeds $50,000,000, and (ii) the aggregate
principal amount of Indebtedness with respect to the Exit Revolver shall not at
any time exceed the Maximum Exit Revolver Amount.



          (o) existing Indebtedness described in Schedule 6.1(o), but not any
extensions, renewals or replacement of such Indebtedness except (i) renewals
and extensions expressly provided for in the agreements evidencing any such
Indebtedness as the same are in effect on the date hereof and (ii) refinancings
and extensions of any such Indebtedness if the terms and conditions thereof are
not less favorable to the obligor thereon or to the Lenders than the
Indebtedness being refinanced or extended and the average life maturity thereof
is greater than or equal to that of the Indebtedness being refinanced or
extended; provided, such Indebtedness permitted under the immediately preceding
clause (i) or (ii) above shall (1) be renewed, extended or refinanced only by
Company or the existing obligor thereunder or direct or indirect parent of such
obligor, (2) not (A) exceed in a principal amount the Indebtedness being
renewed, extended or refinanced plus the costs of refinancing (including
consent fees), accrued interest and premiums or (B) be incurred, created or
assumed if any Default or Event of Default has occurred and is continuing or
would result therefrom, and (3) shall be approved by the Company’s board of
directors; and provided further that the payment of any such existing
Indebtedness in connection with any extensions, renewals or replacement or
refinancing thereof by Company shall not be deemed to give rise to an
Investment under Section 6.5.



Anything herein to the contrary notwithstanding, at no time shall the sum of
the principal amount of all Indebtedness with respect to (a) Permitted
Indebtedness, plus (b) Permitted Equipment Financings, plus (c) Acquired Debt,
plus (d) Capital Leases, exceed $25,000,000 in the aggregate.


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     6.2 Liens. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC of any State or under any similar recording or notice
statute, except:


          (a) Liens in favor of Administrative Agent for the benefit of Lenders and
Lender Counterparties, in each case granted pursuant to any Credit Document;



          (b) Liens for Taxes, or claims the payment of which is not, at the time,
required thereby;



          (c) statutory Liens of landlords, banks (and rights of set-off), carriers,
warehousemen, mechanics, repairmen, workmen and materialmen, and other Liens
imposed by law (other than any such Lien imposed pursuant to Section 401(a)(29)
or 412(n) of the Internal Revenue Code or by ERISA), in each case incurred in
the ordinary course of business (i) for amounts not yet overdue or (ii) for
amounts that are overdue and that (in the case of any such amounts overdue for
a period in excess of five days) are being contested in good faith by
appropriate proceedings, so long as such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made for any
such contested amounts;



          (d) Liens incurred or deposits made in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other types
of social security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts, trade
contracts, performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money or other
Indebtedness), so long as no foreclosure, sale or similar proceedings have been
commenced with respect to any portion of the Collateral on account thereof or
Liens to secure letters of credit given in lieu thereof;



          (e) easements, rights-of-way, restrictions, encroachments, and other minor
defects or irregularities in title, in each case which do not and will not
interfere in any material respect with the ordinary conduct of the business of
Company or any of its Subsidiaries;



          (f) any interest or title of a lessor or sublessor under any lease
permitted hereunder;



          (g) Liens solely on any cash earnest money deposits made by Company or any
of its Subsidiaries in connection with any letter of intent or purchase
agreement entered into by it;



          (h) Liens incurred in connection with the purchase or shipping of goods or
assets on the related assets and proceeds thereof in favor of the seller or
shipper of such goods or assets;

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          (i) Liens arising from filing precautionary UCC financing statements
relating solely to operating leases entered into in the ordinary course of
business;



          (j) Liens in favor of customs and revenue authorities arising as a matter
of law to secure payment of customs duties in connection with the importation
of goods;



          (k) any zoning or similar law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property;



          (l) licenses of patents, trademarks and other intellectual property rights
granted by Company or any of its Subsidiaries in the ordinary course of
business and not interfering in any respect with the ordinary conduct of the
business of Company or such Subsidiary;



          (m) Liens described in Schedule 6.2(m);



          (n) Liens securing Indebtedness permitted pursuant to Section 6.1(h) or
(i); provided any such Lien shall encumber only the asset acquired with the
proceeds of such Indebtedness;



          (o) Liens existing on any property or assets acquired pursuant to a
Permitted Acquisition prior to the acquisition thereof by Company or any of its
Subsidiaries or existing on any property or asset of any Person that merges
with or into or consolidates with Company or any of its Subsidiaries or becomes
a Subsidiary of Company after the date hereof prior to such merger or
consolidation or the time such Person becomes a Subsidiary, as the case may be;
provided that (i) such Lien is not created in contemplation of or in connection
with such acquisition, merger, consolidation or such Person becoming a
Subsidiary, as the case may be, (ii) such Lien shall not apply to (x) in the
case of a Lien existing on any property or assets acquired pursuant to a
Permitted Acquisition prior to the acquisition thereto, any other or different
property or assets of Company or any of its Subsidiaries (other than products
of, accessions to and proceeds of the property originally subject thereto and,
if required by the terms thereof, after-acquired property of the same type and
owner) and (y) in the case of a Lien existing on any property or asset of any
Person that merges with or into or consolidates with Company or any Subsidiary
of Company or becomes a Subsidiary of Company after the date hereof prior to
such merger or consolidation or the time such Person becomes a Subsidiary, any
property or assets of any other Person other than Company or such Subsidiary,
as the case may be, and (iii) such Lien shall secure only those obligations
which it secures on the date of such acquisition, merger or consolidation or
the date such Person becomes a Subsidiary, as the case may be, and extensions,
renewals and replacements thereof that do not increase the outstanding
principal amount thereof by more than the costs of refinancing (including
consent fees), accrued interest and premiums;



          (p) other Liens on assets securing Indebtedness in an aggregate amount not
to exceed $10,000,000 at any time outstanding;



          (q) Liens securing Indebtedness in respect of the Exit Revolver permitted
pursuant to Section 6.1(n); and

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          (r) Liens incurred in connection with “Irrevocable Right of Use”
agreements, capacity agreements, leases and similar agreements conveying to
other Persons the right to use telecommunications facilities owned by the
Company or any of its Subsidiaries; provided any such Lien shall encumber only
the facility permitted to be used under the related agreement and provided
further that any such Lien shall be incurred either: (i) in the ordinary course
of business of Company or such Subsidiary; or (ii) in connection with an Asset
Sale.



     6.3 Equitable Lien.


     If any Credit Party or any of its Subsidiaries shall create or assume any
Lien upon any of its properties or assets, whether now owned or hereafter
acquired, other than Permitted Liens, it shall make or cause to be made
effective provision whereby the Obligations will be secured by such Lien (on
terms consistent with the terms contained in the Pledge and Security Agreement)
equally and ratably with any and all other Indebtedness secured thereby as long
as any such Indebtedness shall be so secured; provided, notwithstanding the
foregoing, this covenant shall not be construed as a consent by Requisite
Lenders to the creation or assumption of any such Lien not otherwise permitted
hereby.


     6.4 Restricted Payments; Restrictions on Subsidiary Distributions.


          (a) No Credit Party shall, nor shall it permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment except the following shall be permitted:



          (i) Company may (x) make payments of principal and interest in respect of,
in accordance with the terms of, and only to the extent required by, any
Indebtedness (other than the Term Loans) subject to the subordination
provisions, if any, contained in the indenture or other agreement pursuant to
which such Indebtedness was issued; and (y) defease or repay and retire any
Indebtedness in connection with a refinancing of such Indebtedness on terms
otherwise permitted hereby; and



          (ii) Subsidiaries of Company may (x) make Restricted Junior Payments to
their parent entities, but only if such Restricted Junior Payments are made pro
rata in accordance with the interests held in such Subsidiaries, (y) make
payments of principal and interest in respect of, in accordance with the terms
of, and only to the extent required by, any Indebtedness permitted hereunder,
and (z) defease or repay or retire any Indebtedness in connection with a
refinancing of such Indebtedness on terms otherwise permitted hereunder.



          (iii) Company and any Subsidiary may declare and pay cash dividends and
comply with change of control repurchase obligations with respect to Acquired
Preferred Stock and may make the Telecom Nevada Acquisition.



          (b) Except as provided herein, no Credit Party shall, nor shall it permit
any of its Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any Subsidiary of Company to (i) pay dividends or make any other
distributions on any of such Subsidiary’s Capital Stock owned by Company or any
other Subsidiary of Company, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Company or any other Subsidiary of Company, (iii) make loans or

71






 




advances to Company or any other Subsidiary of Company, or (iv) transfer
any of its property or assets to Company or any other Subsidiary of Company
other than restrictions (1) in agreements evidencing or securing Indebtedness
of Subsidiaries permitted hereunder, (2) by reason of customary provisions
restricting assignments, subletting or other transfers contained in leases,
licenses, joint venture agreements and similar agreements entered into in the
ordinary course of business, and (3) that are or were created by virtue of any
transfer of, agreement to transfer or option or right with respect to any
property, assets or Capital Stock not otherwise prohibited under this
Agreement.


     6.5 Investments. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including without limitation any Joint Venture, except:


          (a) Cash Equivalents and Acquired Investments;



          (b) Investments (i) in accounts receivable arising and trade credit
granted in the ordinary course of business and in any Securities received in
satisfaction or partial satisfaction thereof from financially troubled account
debtors, (ii) deposits, prepayments and other credits to suppliers made in the
ordinary course of business consistent with the past practices of Company and
its Subsidiaries and (iii) in the form of non-cash consideration received in
connection with an Asset Sale to the extent permitted by Section 6.7(d);



          (c) intercompany loans to the extent permitted under Section 6.1(b);



          (d) Capital Expenditures;



          (e) Hedge Agreements;



          (f) loans and advances to employees of Company and its Subsidiaries made
in the ordinary course of business in an aggregate principal amount not to
exceed $2,000,000 in the aggregate;



          (g) Permitted Acquisitions by Company and its Subsidiaries;



          (h) ownership of existing Investments described in Schedule 6.5(h);



          (i) the Telecom Nevada Acquisition; and



          (j) Investments in Telecommunications of Nevada, LLC.



     6.6 Financial Covenants.


          (a) Minimum Unrestricted Cash Balance. Company shall not permit the
aggregate amount of the Company’s and its Subsidiaries’ Cash and Cash
Equivalents (that in either case are free from all Liens other than Permitted
Liens of the type described in Section 6.2(a)) on any day during the applicable
Fiscal Quarter, beginning with the Fiscal Quarter ending March 31, 2003 to be
less than the correlative amount indicated:




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	Fiscal Quarter	 	Amount (in millions)
	
	 	

	1Q2003
	 	$	190.0	 
	2Q2003
	 	$	140.0	 
	3Q2003
	 	$	80.0	 
	4Q2003
	 	$	45.0	 
	1Q2004 and each Fiscal Quarter thereafter
	 	$	25.0	 



          (b) Minimum Consolidated EBITDA. Company shall not permit Consolidated
EBITDA for the four consecutive Fiscal Quarter period ending as of the last day
of any Fiscal Quarter set forth below, beginning with the Fiscal Quarter ending
March 31, 2003, to be less than the correlative amount indicated:







	 	 	 	 	 
	Fiscal Quarter	 	Amount(in millions)
	
	 	

	1Q2003
	 	$	(10.0	)
	2Q2003
	 	$	(20.0	)
	3Q2003
	 	$	(26.0	)
	4Q2003
	 	$	(28.0	)
	1Q2004
	 	$	(12.0	)
	2Q2004
	 	$	10.0	 
	3Q2004
	 	$	34.0	 
	4Q2004
	 	$	62.0	 
	1Q2005
	 	$	97.0	 
	2Q2005
	 	$	135.0	 
	3Q2005
	 	$	175.0	 
	4Q2005
	 	$	210.0	 
	1Q2006
	 	$	245.0	 
	2Q2006
	 	$	280.0	 
	3Q2006
	 	$	315.0	 
	4Q2006
	 	$	355.0	 
	1Q2007
	 	$	390.0	 
	2Q2007
	 	$	430.0	 
	3Q2007
	 	$	470.0	 
	4Q2007
	 	$	510.0	 
	1Q2008
	 	$	550.0	 
	2Q2008
	 	$	585.0	 
	3Q2008
	 	$	625.0	 
	4Q2008 and each Fiscal Quarter thereafter
	 	$	670.0	 



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; provided, that with respect to the first three Fiscal Quarters in Fiscal Year
2003, consolidated EBITDA shall be measured on a one Fiscal Quarter basis,
combined two Fiscal Quarter basis and combined three Fiscal Quarter basis,
respectively.


          (c) Maximum Consolidated Capital Expenditures Amount. Company shall not
permit Consolidated Capital Expenditures for each Fiscal Year beginning with
Fiscal Year 2003 to be greater than the correlative amount indicated (as
adjusted in accordance with the proviso hereto, the “Maximum Consolidated
Capital Expenditures Amount”); provided, that the Maximum Consolidated Capital
Expenditures Amount for any such Fiscal Year shall be increased by an amount
equal to the excess, if any (but in no event more than $50,000,000) of such
amount for the previous Fiscal Year (as adjusted in accordance with this
proviso) over the actual amount of Capital Expenditures for such previous
Fiscal Year; provided, further, that the Maximum Consolidated Capital
Expenditures Amount for Fiscal Year 2003 shall be increased by an amount equal
to the excess, if any (but in no event more than $50,000,000) of $300,000,000
over the actual amount of Capital Expenditures for Fiscal Year 2002:




	 	 	 	 	 
	Fiscal Year	 	Amount(in millions)
	
	 	

	2003
	 	$	211.0	 
	2004
	 	$	237.0	 
	2005
	 	$	267.0	 
	2006
	 	$	297.0	 
	2007
	 	$	328.0	 
	2008 and each Fiscal Year thereafter
	 	$	360.0	 



     6.7 Fundamental Changes; Disposition of Assets; Acquisitions. No Credit
Party shall, nor shall it permit, any of its Subsidiaries to, enter into any
transaction of merger or consolidation, or liquidate, wind-up or dissolve
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 its business,
assets or property of any kind whatsoever, whether real, personal or mixed and
whether tangible or intangible, whether now owned or hereafter acquired, or
acquire by purchase or otherwise (other than purchases or other acquisitions of
real property, inventory, materials and equipment in the ordinary course of
business) the business, property or fixed assets of, or stock or other evidence
of beneficial ownership of, any Person or any division or line of business or
other business unit of any Person, except:


          (a) any Subsidiary of Company may be merged with or into Company or any
Guarantor, or be liquidated, wound up or dissolved, or all or any part of its
business, property or assets may be conveyed, sold, leased, transferred or
otherwise disposed of, in one transaction or a series of transactions, to
Company or any Guarantor; provided, in the case of such a merger, Company or
such Guarantor, as applicable shall be the continuing or surviving Person;



          (b) the Company or any of its Subsidiaries may consolidate with or merge
with or into or sell, assign, convey, lease or transfer all or substantially
all of its properties and

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assets if (i) the Company or such Subsidiary shall be the continuing
Person, or the resulting, surviving or transferee Person (the “surviving
entity”) shall be a Person organized and existing under the laws of the United
States or any State thereof or the District of Columbia; and (ii) the surviving
entity (other than an existing Guarantor) shall expressly assume, pursuant to
documentation delivered to the Administrative Agent, all of the obligations of
the Company or such Subsidiary, as applicable under the Credit Documents, and
the Company or the surviving entity shall have taken all steps necessary to
perfect and protect the security interests granted or purported to be granted
by the Collateral Documents in the applicable Collateral;


          (c) sales or other dispositions of assets that do not constitute Asset
Sales;



          (d) Asset Sales, the Net Asset Sale Proceeds of which, if any, shall be
applied as required by Section 2.12(a)



          (e) disposals of obsolete, worn out or surplus property;



          (f) Permitted Acquisitions made by Company and its Subsidiaries;



          (g) Investments made in accordance with Section 6.5;



          (h) entering into “Irrevocable Right of Use” agreements and capacity
agreements with other Persons by, and leases or subleases to or from other
Persons of assets by, Company or any Subsidiary of Company, in each case, in
the ordinary course of business;



          (i) licenses to or from other Persons of Intellectual Property by Company
or any Subsidiary of Company thereof in the ordinary course of business and



          (j) Asset Sales pursuant to existing contracts with Level 3
Communications, Inc. listed on Schedule 1.1(b).



     6.8 Disposal of Subsidiary Interests. Except for any sale of all of its
interests in the Capital Stock of any of its Subsidiaries in compliance with
the provisions of Section 6.7, no Credit Party shall (a) directly or indirectly
sell, assign, pledge or otherwise encumber or dispose of any Capital Stock of
any of its Subsidiaries, except to qualify directors if required by applicable
law; or (b) permit any of its Subsidiaries directly or indirectly to sell,
assign, pledge or otherwise encumber or dispose of any Capital Stock of any of
its Subsidiaries, except to another Credit Party (subject to the restrictions
on such disposition otherwise imposed hereunder), or to qualify directors if
required by applicable law.


     6.9 Sales and Lease-Backs. No Credit Party shall, nor shall it permit any
of its Subsidiaries to, directly or indirectly, become or remain liable as
lessee or as a guarantor or other surety with respect to any lease of any
property (whether real, personal or mixed), whether now owned or hereafter
acquired, which such Credit Party (a) has sold or transferred or is to sell or
to transfer to any other Person (other than a Credit Party), or (b) intends to
use for substantially the same purpose as any other property which has been or
is to be sold or transferred by such Credit Party to any Person (other than a
Credit Party) in connection with such lease.


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     6.10 Conduct of Business; Holding Company Status.


          (a) From and after the Closing Date, no Credit Party shall, nor shall it
permit any of its Subsidiaries to, engage in any business other than (i) the
Telecommunications Business and (ii) such other lines of business as may be
consented to by Requisite Lenders.



          (b) Company will not engage in any business activities or own any assets
or properties other than (i) businesses conducted or assets or properties owned
as of the Closing Date, (ii) businesses, assets and properties owned that are
reasonably related to or are reasonable extensions of the foregoing, (iii)
businesses conducted and assets and properties owned by Persons at the time
such Persons are merged into or consolidated with Company in connection with
Permitted Acquisitions or other transactions consented to by the Requisite
Lenders, provided that in connection with any transactions described in this
clause (iii), Company will use commercially reasonable efforts to contribute
any assets acquired in a Permitted Acquisition or such other transaction
consented to by the Requisite Lenders to a Subsidiary of Company as promptly as
may reasonably be accomplished without incurring adverse tax consequences,
violating applicable law or the terms of any agreement or otherwise adversely
affecting the economic benefits of such transactions.



          (c) Each LMDS License and all related authorizations and certifications
will be held by one or more Subsidiaries whose only business shall be the
holding of such property (and/or of other LMDS Licenses and related
authorizations and certifications) and otherwise as incident to its holding of
such property.



     6.11 Amendments or Waivers of Indebtedness or Restructuring Transaction
Documents.


          (a) No Credit Party shall nor shall it permit any of its Subsidiaries to,
amend or otherwise change the terms of any Permitted Indebtedness, or make any
payment in connection with an amendment thereof or change thereto (other than
for reasonable professional fees and expenses), if the effect of any such
amendment or change is to increase the interest rate payable under any
Permitted Indebtedness, change (to earlier dates) any dates upon which payments
of principal or interest are due thereon, change any event of default or
condition to an event of default with respect thereto (other than to eliminate
any such event of default or increase any grace period related thereto), change
the redemption, prepayment or defeasance provisions thereof (other than any
changes to the defeasance provisions which are not adverse in any manner to the
Lenders), change the subordination provisions of such Indebtedness (or of any
guaranty thereof), or if the effect of such amendment or change, together with
all other amendments or changes made, is to increase materially the obligations
of the obligor thereunder or to confer any additional rights on the holders of
such Indebtedness (or a trustee or other representative on their behalf) which
would be adverse to any Credit Party, the Administrative Agent, or Lenders.
Notwithstanding anything to the contrary herein or in the other Credit
Documents, Company is permitted to terminate, forgive, writedown, or cancel
intercompany Indebtedness as required by Section 3.1(m) hereof.



          (b) No Credit Party shall nor shall it permit any of its Subsidiaries to,
agree to any amendment, restatement, supplement or other modification to, or
waiver of, any term or

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provision of or any of its rights under any Restructuring Transaction
Document (other than: (i) the Organizational Documents of such Credit Party
and; (ii) the amendments, restatements, supplements, modifications, or waivers
relating to the Management Incentive Plan, the Management Options, the
Management Retention Bonus Plan that have been approved by the board of
directors of the Company) without in each case obtaining the prior written
consent of Requisite Lenders to such amendment, restatement, supplement or
other modification or waiver.


     6.12 Fiscal Year. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, change its Fiscal Year-end from December 31, or change its
Fiscal Quarter-ends from March 31, June 30, September 30 and December 31.


     6.13 Significant Subsidiaries. At no time will those Subsidiaries of
Company which are not Significant Subsidiaries account for 10% or more of the
consolidated net income, consolidated revenues or consolidated assets, in each
case as specified in Rule 1-02(w) of Regulation S-X, of Company and its
Subsidiaries.


     6.14 Accounts. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, maintain any (i) demand, time, savings, passbook, deposit or
other similar account with a bank or other financial institution, or (ii)
securities account, including all financial assets and security entitlements
credited thereto (each as defined in Article 8 of the UCC), in each case other
than accounts which constitute Collateral hereunder and are fully secured by a
first priority security interest in favor of the Administrative Agent for the
benefit of the Lenders.


SECTION 7. GUARANTY


     7.1 Guaranty of the Obligations. Subject to the provisions of Section
7.2, Guarantors jointly and severally hereby irrevocably and unconditionally
guaranty to Administrative Agent for the ratable benefit of the Beneficiaries
the due and punctual payment in full of all Obligations when the same shall
become due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. § 362(a)) (collectively, the “Guaranteed Obligations”).


     7.2 Contribution by Guarantors. All Guarantors desire to allocate among
themselves (collectively, the “Contributing Guarantors”), in a fair and
equitable manner, their obligations arising under this Guaranty. Accordingly,
in the event any payment or distribution is made on any date by a Guarantor (a
“Funding Guarantor”) under this Guaranty that exceeds its Fair Share as of such
date, such Funding Guarantor shall be entitled to a contribution from each of
the other Contributing Guarantors in the amount of such other Contributing
Guarantor’s Fair Share Shortfall as of such date, with the result that all such
contributions will cause each Contributing Guarantor’s Aggregate Payments to
equal its Fair Share as of such date. “Fair Share” means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (a)
the ratio of (i) the Fair Share Contribution Amount with respect to such
Contributing Guarantor to (ii) the aggregate of the Fair Share Contribution
Amounts with respect to all Contributing Guarantors multiplied by (b) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty in respect of the obligations Guarantied. “Fair
Share Shortfall” means, with respect to a Contributing Guarantor as of any


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 date of determination, the excess, if any, of the Fair Share of such
Contributing Guarantor over the Aggregate Payments of such Contributing
Guarantor. “Fair Share Contribution Amount” means, with respect to a
Contributing Guarantor as of any date of determination, the maximum aggregate
amount of the obligations of such Contributing Guarantor under this Guaranty
that would not render its obligations hereunder or thereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11
of the United States Code or any comparable applicable provisions of state law;
provided, solely for purposes of calculating the “Fair Share Contribution
Amount” with respect to any Contributing Guarantor for purposes of this Section
7.2, any assets or liabilities of such Contributing Guarantor arising by virtue
of any rights to subrogation, reimbursement or indemnification or any rights to
or obligations of contribution hereunder shall not be considered as assets or
liabilities of such Contributing Guarantor. “Aggregate Payments” means, with
respect to a Contributing Guarantor as of any date of determination, an amount
equal to (1) the aggregate amount of all payments and distributions made on or
before such date by such Contributing Guarantor in respect of this Guaranty
(including, without limitation, in respect of this Section 7.2), minus (2) the
aggregate amount of all payments received on or before such date by such
Contributing Guarantor from the other Contributing Guarantors as contributions
under this Section 7.2. The amounts payable as contributions hereunder shall
be determined as of the date on which the related payment or distribution is
made by the applicable Funding Guarantor. The allocation among Contributing
Guarantors of their obligations as set forth in this Section 7.2 shall not be
construed in any way to limit the liability of any Contributing Guarantor
hereunder. Each Guarantor is a third party beneficiary to the contribution
agreement set forth in this Section 7.2.


     7.3 Payment by Guarantors. Subject to Section 7.2, Guarantors hereby
jointly and severally agree, in furtherance of the foregoing and not in
limitation of any other right which any Beneficiary may have at law or in
equity against any Guarantor by virtue hereof, that upon the failure of Company
to pay any of the Guaranteed Obligations when and as the same shall become due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. 362(a)), Guarantors will upon demand pay, or cause to be paid, in Cash,
to Administrative Agent for the ratable benefit of Beneficiaries, an amount
equal to the sum of the unpaid principal amount of all Guaranteed Obligations
then due as aforesaid, accrued and unpaid interest on such Guaranteed
Obligations (including interest which, but for Company’s becoming the subject
of a case under the Bankruptcy Code, would have accrued on such Guaranteed
Obligations, whether or not a claim is allowed against Company for such
interest in the related bankruptcy case) and all other Guaranteed Obligations
then owed to Beneficiaries as aforesaid.


     7.4 Liability of Guarantors Absolute. Each Guarantor agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Guaranteed Obligations. In furtherance of the foregoing and without limiting
the generality thereof, each Guarantor agrees as follows:


          (a) this Guaranty is a guaranty of payment when due and not of
collectability. This Guaranty is a primary obligation of each Guarantor and
not merely a contract of surety;

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           (b) Administrative Agent may enforce this Guaranty upon the occurrence of
an Event of Default notwithstanding the existence of any dispute between
Company and any Beneficiary with respect to the existence of such Event of
Default;



          (c) the obligations of each Guarantor hereunder are independent of the
obligations of Company and the obligations of any other guarantor (including
any other Guarantor) of the obligations of Company, and a separate action or
actions may be brought and prosecuted against such Guarantor whether or not any
action is brought against Company or any of such other guarantors and whether
or not Company is joined in any such action or actions;



          (d) payment by any Guarantor of a portion, but not all, of the Guaranteed
Obligations shall in no way limit, affect, modify or abridge any Guarantor’s
liability for any portion of the Guaranteed Obligations which has not been
paid. Without limiting the generality of the foregoing, if Administrative
Agent is awarded a judgment in any suit brought to enforce any Guarantor’s
covenant to pay a portion of the Guaranteed Obligations, such judgment shall
not be deemed to release such Guarantor from its covenant to pay the portion of
the Guaranteed Obligations that is not the subject of such suit, and such
judgment shall not, except to the extent satisfied by such Guarantor, limit,
affect, modify or abridge any other Guarantor’s liability hereunder in respect
of the Guaranteed Obligations;



          (e) any Beneficiary, upon such terms as it deems appropriate, without
notice or demand and without affecting the validity or enforceability hereof or
giving rise to any reduction, limitation, impairment, discharge or termination
of any Guarantor’s liability hereunder, from time to time may to the maximum
extent permitted by law (i) renew, extend, accelerate, increase the rate of
interest on, or otherwise change the time, place, manner or terms of payment of
the Guaranteed Obligations; (ii) settle, compromise, release or discharge, or
accept or refuse any offer of performance with respect to, or substitutions
for, the Guaranteed Obligations or any agreement relating thereto and/or
subordinate the payment of the same to the payment of any other obligations;
(iii) request and accept other guaranties of the Guaranteed Obligations and
take and hold security for the payment hereof or the Guaranteed Obligations;
(iv) release, surrender, exchange, substitute, compromise, settle, rescind,
waive, alter, subordinate or modify, with or without consideration, any
security for payment of the Guaranteed Obligations, any other guaranties of the
Guaranteed Obligations, or any other obligation of any Person (including any
other Guarantor) with respect to the Guaranteed Obligations; (v) enforce and
apply any security now or hereafter held by or for the benefit of such
Beneficiary in respect hereof or the Guaranteed Obligations and direct the
order or manner of sale thereof, or exercise any other right or remedy that
such Beneficiary may have against any such security, in each case as such
Beneficiary in its discretion may determine consistent herewith or the
applicable Hedge Agreement and any applicable security agreement, including
foreclosure on any such security pursuant to one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is commercially
reasonable, and even though such action operates to impair or extinguish any
right of reimbursement or subrogation or other right or remedy of any Guarantor
against Company or any security for the Guaranteed Obligations; and (vi)
exercise any other rights available to it under the Credit Documents or the
Hedge Agreements; and

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           (f) this Guaranty and the obligations of Guarantors hereunder shall be
valid and enforceable and shall not, to the maximum extent permitted by law, be
subject to any reduction, limitation, impairment, discharge or termination for
any reason (other than payment in full of the Guaranteed Obligations),
including the occurrence of any of the following, whether or not any Guarantor
shall have had notice or knowledge of any of them: (i) any failure or omission
to assert or enforce or agreement or election not to assert or enforce, or the
stay or enjoining, by order of court, by operation of law or otherwise, of the
exercise or enforcement of, any claim or demand or any right, power or remedy
(whether arising under the Credit Documents or the Hedge Agreements, at law, in
equity or otherwise) with respect to the Guaranteed Obligations or any
agreement relating thereto, or with respect to any other guaranty of or
security for the payment of the Guaranteed Obligations; (ii) any rescission,
waiver, amendment or modification of, or any consent to departure from, any of
the terms or provisions (including provisions relating to events of default)
hereof, any of the other Credit Documents, any of the Hedge Agreements or any
agreement or instrument executed pursuant thereto, or of any other guaranty or
security for the Guaranteed Obligations, in each case whether or not in
accordance with the terms hereof or such Credit Document, such Hedge Agreement
or any agreement relating to such other guaranty or security;
 (iii) the
Guaranteed Obligations, or any agreement relating thereto, at any time being
found to be illegal, invalid or unenforceable in any respect; (iv) the
application of payments received from any source (other than payments received
pursuant to the other Credit Documents or any of the Hedge Agreements or from
the proceeds of any security for the Guaranteed Obligations, except to the
extent such security also serves as collateral for indebtedness other than the
Guaranteed Obligations) to the payment of indebtedness other than the
Guaranteed Obligations, even though any Beneficiary might have elected to apply
such payment to any part or all of the Guaranteed Obligations; (v) any
Beneficiary’s consent to the change, reorganization or termination of the
corporate structure or existence of Company or any of its Subsidiaries and to
any corresponding restructuring of the Guaranteed Obligations; (vi) any failure
to perfect or continue perfection of a security interest in any collateral
which secures any of the Guaranteed Obligations; (vii) any defenses, set-offs
or counterclaims which Company may allege or assert against any Beneficiary in
respect of the Guaranteed Obligations, including failure of consideration,
breach of warranty, payment, statute of frauds, statute of limitations, accord
and satisfaction and usury; and (viii) any other act or thing or omission, or
delay to do any other act or thing, which may or might in any manner or to any
extent vary the risk of any Guarantor as an obligor in respect of the
Guaranteed Obligations.



     7.5 Waivers by Guarantors. Each Guarantor hereby waives, for the benefit
of Beneficiaries, to the maximum extent permitted by law: (a) any right to
require any Beneficiary, as a condition of payment or performance by such
Guarantor, to (i) proceed against Company, any other guarantor (including any
other Guarantor) of the Guaranteed Obligations or any other Person, (ii)
proceed against or exhaust any security held from Company, any such other
guarantor or any other Person, (iii) proceed against or have resort to any
balance of any Deposit Account or credit on the books of any Beneficiary in
favor of Company or any other Person, or (iv) pursue any other remedy in the
power of any Beneficiary whatsoever; (b) any defense arising by reason of the
incapacity, lack of authority or any disability or other defense of Company or
any other Guarantor including any defense based on or arising out of the lack
of validity or the unenforceability of the Guaranteed Obligations or any
agreement or instrument relating thereto or by reason of the cessation of the
liability of Company or any other Guarantor from any cause other than payment
in full of the Guaranteed Obligations; (c) any defense based


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 upon any statute or rule of law which provides that the obligation of a
surety must be neither larger in amount nor in other respects more burdensome
than that of the principal; (d) any defense based upon any Beneficiary’s errors
or omissions in the administration of the Guaranteed Obligations, except
behavior which amounts to bad faith; (e)(i) any principles or provisions of
law, statutory or otherwise, which are or might be in conflict with the terms
hereof and any legal or equitable discharge of such Guarantor’s obligations
hereunder, (ii) the benefit of any statute of limitations affecting such
Guarantor’s liability hereunder or the enforcement hereof, (iii) any rights to
set-offs, recoupments and counterclaims, and (iv) promptness, diligence and any
requirement that any Beneficiary protect, secure, perfect or insure any
security interest or lien or any property subject thereto; (f) notices,
demands, presentments, protests, notices of protest, notices of dishonor and
notices of any action or inaction, including acceptance hereof, notices of
default hereunder, the Hedge Agreements or any agreement or instrument related
thereto, notices of any renewal, extension or modification of the Guaranteed
Obligations or any agreement related thereto, notices of any extension of
credit to Company and notices of any of the matters referred to in Section 7.4
and any right to consent to any thereof; and (g) any defenses or benefits that
may be derived from or afforded by law which limit the liability of or
exonerate guarantors or sureties, or which may conflict with the terms hereof.


     7.6 Guarantors’ Rights of Subrogation, Contribution, etc. Until the
Guaranteed Obligations shall have been indefeasibly paid in full, each
Guarantor hereby waives the exercise of any claim, right or remedy, direct or
indirect, that such Guarantor now has or may hereafter have against Company or
any other Guarantor or any of its assets in connection with this Guaranty or
the performance by such Guarantor of its obligations hereunder, in each case
whether such claim, right or remedy arises in equity, under contract, by
statute, under common law or otherwise and including without limitation (a) any
right of subrogation, reimbursement or indemnification that such Guarantor now
has or may hereafter have against Company with respect to the Guaranteed
Obligations, (b) any right to enforce, or to participate in, any claim, right
or remedy that any Beneficiary now has or may hereafter have against Company,
and (c) any benefit of, and any right to participate in, any collateral or
security now or hereafter held by any Beneficiary. In addition, until the
Guaranteed Obligations shall have been indefeasibly paid in full, each
Guarantor shall withhold exercise of any right of contribution such Guarantor
may have against any other guarantor (including any other Guarantor) of the
Guaranteed Obligations, including, without limitation, any such right of
contribution as contemplated by Section 7.2. Each Guarantor further agrees
that, to the extent the waiver or agreement to withhold the exercise of its
rights of subrogation, reimbursement, indemnification and contribution as set
forth herein is found by a court of competent jurisdiction to be void or
voidable for any reason, any rights of subrogation, reimbursement or
indemnification such Guarantor may have against Company or against any
collateral or security, and any rights of contribution such Guarantor may have
against any such other guarantor, shall be junior and subordinate to any rights
any Beneficiary may have against Company, to all right, title and interest any
Beneficiary may have in any such collateral or security, and to any right any
Beneficiary may have against such other guarantor. If any amount shall be paid
to any Guarantor on account of any such subrogation, reimbursement,
indemnification or contribution rights at any time when all Guaranteed
Obligations shall not have been finally and indefeasibly paid in full, such
amount shall be held in trust for Administrative Agent on behalf of
Beneficiaries and shall forthwith be paid over to Administrative Agent for the
benefit of Beneficiaries to be credited and applied against the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms hereof.


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     7.7 Subordination of Other Obligations. Any Indebtedness of Company or
any Guarantor now or hereafter held by any Guarantor (the “Obligee Guarantor”)
is hereby subordinated in right of payment to the Guaranteed Obligations, and
any such indebtedness collected or received by the Obligee Guarantor after an
Event of Default has occurred and is continuing shall be held in trust for
Administrative Agent on behalf of Beneficiaries and shall forthwith be paid
over to Administrative Agent for the benefit of Beneficiaries to be credited
and applied against the Guaranteed Obligations but without affecting, impairing
or limiting in any manner the liability of the Obligee Guarantor under any
other provision hereof.


     7.8 Continuing Guaranty. This Guaranty is a continuing guaranty and shall
remain in effect until all of the Guaranteed Obligations shall have been
finally and indefeasibly paid in full. Each Guarantor hereby irrevocably
waives any right to revoke this Guaranty as to future transactions giving rise
to any Guaranteed Obligations.


     7.9 Authority of Guarantors or Company. It is not necessary for any
Beneficiary to inquire into the capacity or powers of any Guarantor or Company
or the officers, directors or any agents acting or purporting to act on behalf
of any of them.


     7.10 Financial Condition of Company. Any Credit Extension may be made to
Company or continued from time to time, and any Hedge Agreements may be entered
into from time to time, in each case without notice to or authorization from
any Guarantor regardless of the financial or other condition of Company at the
time of any such grant or continuation or at the time such Hedge Agreement is
entered into, as the case may be. No Beneficiary shall have any obligation to
disclose or discuss with any Guarantor its assessment, or any Guarantor’s
assessment, of the financial condition of Company. Each Guarantor has adequate
means to obtain information from Company on a continuing basis concerning the
financial condition of Company and its ability to perform its obligations under
the Credit Documents and the Hedge Agreements, and each Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
Company and of all circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations. Each Guarantor hereby waives and relinquishes any duty
on the part of any Beneficiary to disclose any matter, fact or thing relating
to the business, operations or conditions of Company now known or hereafter
known by any Beneficiary.


     7.11 Bankruptcy, etc.


          (a) So long as any Guaranteed Obligations remain outstanding, no Guarantor
shall, without the prior written consent of Administrative Agent acting
pursuant to the instructions of Requisite Lenders, commence or join with any
other Person in commencing any bankruptcy, reorganization or insolvency case or
proceeding of or against Company or any other Guarantor. The obligations of
Guarantors hereunder shall not be reduced, limited, impaired, discharged,
deferred, suspended or terminated by any case or proceeding, voluntary or
involuntary, involving the bankruptcy, insolvency, receivership,
reorganization, liquidation or arrangement of Company or any other Guarantor or
by any defense which Company or any other Guarantor may have by reason of the
order, decree or decision of any court or administrative body resulting from
any such proceeding.

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           (b) Each Guarantor acknowledges and agrees that any interest on any
portion of the Guaranteed Obligations which accrues after the commencement of
any case or proceeding referred to in clause (a) above (or, if interest on any
portion of the Guaranteed Obligations ceases to accrue by operation of law by
reason of the commencement of such case or proceeding, such interest as would
have accrued on such portion of the Guaranteed Obligations if such case or
proceeding had not been commenced) shall be included in the Guaranteed
Obligations because it is the intention of Guarantors and Beneficiaries that
the Guaranteed Obligations which are Guaranteed by Guarantors pursuant hereto
should be determined without regard to any rule of law or order which may
relieve Company of any portion of such Guaranteed Obligations. Guarantors will
permit any trustee in bankruptcy, receiver, debtor in possession, assignee for
the benefit of creditors or similar person to pay Administrative Agent, or
allow the claim of Administrative Agent in respect of, any such interest
accruing after the date on which such case or proceeding is commenced.



          (c) In the event that all or any portion of the Guaranteed Obligations are
paid by Company, the obligations of Guarantors hereunder shall continue and
remain in full force and effect or be reinstated, as the case may be, in the
event that all or any part of such payment(s) are rescinded or recovered
directly or indirectly from any Beneficiary as a preference, fraudulent
transfer or otherwise, and any such payments which are so rescinded or
recovered shall constitute Guaranteed Obligations for all purposes hereunder.



     7.12 Notice of Events. As soon as any Guarantor obtains knowledge
thereof, such Guarantor shall give Administrative Agent written notice of any
condition or event which has resulted in (i) a material adverse change in the
financial condition of any Guarantor or Company or (ii) a breach of or
noncompliance with any term, condition or covenant contained herein, any other
Credit Document, any Hedge Agreement or any other document delivered pursuant
hereto or thereto.


     7.13 Discharge of Guaranty Upon Sale of Guarantor. If all of the Capital
Stock of any Guarantor or any of its successors in interest hereunder shall be
sold or otherwise disposed of (including by merger or consolidation) in
accordance with the terms and conditions hereof, the Guaranty of such Guarantor
or such successor in interest, as the case may be, hereunder, and such entity’s
pledge as a Grantor under the Pledge and Security Agreement shall automatically
be discharged and released without any further action by any Beneficiary or any
other Person effective as of the time of such Asset Sale, and Administrative
Agent will, at the request and expense of Company execute all instruments as
may be reasonably necessary to accomplish the same.


SECTION 8. EVENTS OF DEFAULT


     8.1 Events of Default. If any one or more of the following conditions or
events shall occur:


          (a) Failure to Make Payments When Due. Failure by Company to pay (i) when
due any installment of principal of any Term Loan, whether at stated maturity,
by acceleration, by notice of voluntary prepayment, by mandatory prepayment or
otherwise; or (ii)

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any interest on any Term Loan or any fee or any other amount due hereunder
within five (5) days after the date due; or


          (b) Default in Other Agreements. (i) Failure of any Credit Party or any
of their respective Significant Subsidiaries to pay when due any principal of
or interest on or any other amount payable in respect of one or more items of
Indebtedness (other than Indebtedness referred to in Section 8.1(a)) with an
aggregate principal amount of $10,000,000 or more, in each case beyond the
grace period, if any, provided therefor; or (ii) breach or default by any
Credit Party with respect to any other material term of (1) one or more items
of Indebtedness in the individual or aggregate principal amounts referred to in
clause (i) above or (2) any loan agreement, mortgage, indenture or other
agreement relating to such item(s) of Indebtedness, in each case beyond the
grace period, if any, provided therefor, if the effect of such breach or
default is to cause, or to permit the holder or holders of that Indebtedness
(or a trustee on behalf of such holder or holders), to cause, that Indebtedness
to become or be declared due and payable (or redeemable) prior to its stated
maturity or the stated maturity of any underlying obligation, as the case may
be; or



          (c) Breach of Certain Covenants. Failure of any Credit Party to perform
or comply with any term or condition contained in Section 2.4, Section 5.1(f),
Section 5.2 or Section 6; or



          (d) Breach of Representations, etc. Any representation, warranty,
certification or other statement made or deemed made by any Credit Party in any
Credit Document or in any statement or certificate at any time given by any
Credit Party or any of its Subsidiaries in writing pursuant hereto or thereto
or in connection herewith or therewith shall be false in any material respect
as of the date made or deemed made; or



          (e) Other Defaults Under Credit Documents. Any Credit Party shall default
in the performance of or compliance with any term contained herein or any of
the other Credit Documents, other than any such term referred to in any other
Section of this Section 8.1, and such default shall not have been remedied or
waived within thirty (30) days after the earlier of (i) an officer of such
Credit Party becoming aware of such default or (ii) receipt by Company of
notice from Administrative Agent or Requisite Lenders of such default; or



          (f) Involuntary Bankruptcy; Appointment of Receiver, etc. (i) A court of
competent jurisdiction shall enter a decree or order for relief in respect of
Company or any of its Significant Subsidiaries in an involuntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, or any other similar relief shall be granted
under any applicable federal or state law, which decree or order is not stayed;
or (ii) an involuntary case shall be commenced against Company or any of its
Significant Subsidiaries under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect; or
a decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Company or any of its Significant
Subsidiaries, or over all or a substantial part of its property, shall have
been entered; or there shall have occurred the involuntary appointment of an
interim receiver, trustee or other custodian of Company or any of its
Significant Subsidiaries for all or a substantial part of its property; or a
warrant of attachment,

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execution or similar process shall have been issued against any
substantial part of the property of Company or any of its Significant
Subsidiaries, and any such event described in this clause (ii) shall continue
for sixty (60) days without having been dismissed, bonded, discharged or
stayed; or


          (g) Voluntary Bankruptcy; Appointment of Receiver, etc. (i) Company or
any of its Significant Subsidiaries shall have an order for relief entered with
respect to it or shall commence a voluntary case under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the 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; or Company or any of its Significant Subsidiaries shall
make any assignment for the benefit of creditors; or (ii) Company or any of its
Significant Subsidiaries shall be unable, or shall fail generally, or shall
admit in writing its inability, to pay its debts as such debts become due; or
the board of directors (or similar governing body) of Company or any of its
Significant Subsidiaries (or any committee thereof) shall adopt any resolution
or otherwise authorize any action to approve any of the actions referred to
herein or in Section 8.1(f); or



          (h) Judgments and Attachments. Any money judgment, writ or warrant of
attachment or similar process involving in the aggregate at any time an amount
in excess of $10,000,000 (in any case to the extent not adequately covered by
insurance as to which a solvent and unaffiliated insurance company has
acknowledged coverage) shall be entered or filed against Company or any of its
Significant Subsidiaries or any of their respective assets and shall remain
undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days
(or in any event later than five days prior to the date of any proposed sale
thereunder); or



          (i) Dissolution. Any order, judgment or decree shall be entered against
Company or any of its Significant Subsidiaries decreeing the dissolution or
split up of Company or any of its Significant Subsidiaries and such order shall
remain undischarged or unstayed for a period in excess of sixty (60) days; or



          (j) Employee Benefit Plans. There shall occur one or more ERISA Events
which individually or in the aggregate results in or might reasonably be
expected to result in liability of Company or any of its Significant
Subsidiaries in excess of $10,000,000 during the term hereof; or there shall
exist an amount of unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA), individually or in the aggregate for all Pension Plans
(excluding for purposes of such computation any Pension Plans with respect to
which assets exceed benefit liabilities), which exceeds $10,000,000; or



          (k) Guaranties, Collateral Documents and other Credit Documents. At any
time after the execution and delivery thereof, (i) the Guaranty for any reason,
other than the satisfaction in full of all Obligations, shall cease to be in
full force and effect (other than in accordance with its terms) or shall be
declared to be null and void or any Guarantor shall repudiate its obligations
thereunder, (ii) this Agreement or any Collateral Document ceases to be in full
force and effect (other than by reason of a release of Collateral in accordance
with the terms hereof or thereof or the satisfaction in full of the Obligations
in accordance with the terms

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hereof) or shall be declared null and void, or Administrative Agent shall
not have or shall cease to have a valid and perfected Lien in any material
portion of the Collateral purported to be covered by the Collateral Documents
with the priority required by the relevant Collateral Document, in each case
for any reason other than the failure of Administrative Agent or any Lender to
take any action within its control, or (iii) any Credit Party shall contest the
validity or enforceability of any Credit Document in writing or deny in writing
that it has any further liability, including with respect to future advances by
Lenders, under any Credit Document to which it is a party; or


          (l) Confirmation Orders. Any Confirmation Order shall be revoked,
remanded, vacated, supplemented, reversed, stayed, rescinded, modified or
amended in any way adverse to the interests of the Administrative Agent or the
Lenders or Company or any other Credit Party shall apply to the Bankruptcy
Court for the authority to do so; or



          (m) Exit Revolver. An “event of default” (or any defined term or event
having a similar purpose) as defined in, and in respect of, the Exit Revolver
shall have occurred and be continuing;



THEN, (1) upon the occurrence of any Event of Default described in Section
8.1(f) or 8.1(g), automatically, and (2) upon the occurrence of any other Event
of Default, at the request of (or with the consent of) Requisite Lenders, upon
notice to Company by Administrative Agent, (A) each of the following shall
immediately become due and payable, in each case without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by each Credit Party: the unpaid principal amount of and accrued
interest on the Term Loans and all other Obligations, and (B) the
Administrative Agent may enforce any and all Liens and security interests
created pursuant to Collateral Documents.


SECTION 9. AGENTS


     9.1 Appointment of Agent. Mizuho Corporate Bank, Ltd. is hereby appointed
Administrative Agent hereunder and under the other Credit Documents and each
Lender hereby authorizes Administrative Agent to act as its agent in accordance
with the terms hereof and the other Credit Documents. The Administrative Agent
hereby agrees to act upon the express conditions contained herein and the other
Credit Documents, as applicable. The provisions of this Section 9 are solely
for the benefit of Administrative Agent and Lenders and no Credit Party shall
have any rights as a third party beneficiary of any of the provisions thereof.
In performing its functions and duties hereunder, the Administrative Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation towards or relationship of agency or
trust with or for Company or any of its Subsidiaries.


     9.2 Powers and Duties. Each Lender irrevocably authorizes the
Administrative Agent to take such action on such Lender’s behalf and to
exercise such powers, rights and remedies hereunder and under the other Credit
Documents as are specifically delegated or granted to Agent by the terms hereof
and thereof, together with such powers, rights and remedies as are reasonably
incidental thereto. The Administrative Agent shall have only those duties and
responsibilities that are expressly specified herein and the other Credit
Documents. The Administrative Agent may exercise such powers, rights and
remedies and perform such duties by


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 or through its agents or attorneys in fact. The Administrative Agent
shall not have, by reason hereof or any of the other Credit Documents, a
fiduciary relationship in respect of any Lender; and nothing herein or any of
the other Credit Documents, expressed or implied, is intended to or shall be so
construed as to impose upon Administrative Agent any obligations in respect
hereof or any of the other Credit Documents except as expressly set forth
herein or therein.


     9.3 General Immunity.


          (a) No Responsibility for Certain Matters. The Administrative Agent shall
not be responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectability or sufficiency hereof or any other
Credit Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any
other documents furnished or made by Administrative Agent to Lenders or by or
on behalf of any Credit Party to Administrative Agent or any Lender in
connection with the Credit Documents and the transactions contemplated thereby
or for the financial condition or business affairs of any Credit Party or any
other Person liable for the payment of any Obligations, nor shall
Administrative Agent be required to ascertain or inquire as to the performance
or observance of any of the terms, conditions, provisions, covenants or
agreements contained in any of the Credit Documents or as to the use of the
proceeds of the Term Loans or as to the existence or possible existence of any
Event of Default or Default. The Administrative Agent shall not be deemed to
have knowledge of a Default or Event of Default unless it has received notice
entitled “Notice of Default” from a Lender or the Borrower. Anything contained
herein to the contrary notwithstanding, Administrative Agent shall not have any
liability arising from confirmations of the amount of outstanding Term Loans or
the component amounts thereof.



          (b) Exculpatory Provisions. Neither Administrative Agent nor any of its
officers, partners, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by Administrative Agent or any of its officers,
partners, directors, employees, or agents under or in connection with any of
the Credit Documents except to the extent caused by Administrative Agent’s
gross negligence or willful misconduct. Administrative Agent shall be entitled
to refrain from any act or the taking of any action (including the failure to
take an action) in connection herewith or any of the other Credit Documents or
from the exercise of any power, discretion or authority vested in it hereunder
or thereunder unless and until Administrative Agent shall have received
instructions in respect thereof from Requisite Lenders (or such other Lenders
as may be required to give such instructions under Section 10.5) and, upon
receipt of such instructions from Requisite Lenders (or such other Lenders, as
the case may be), Administrative Agent shall be entitled to act or (where so
instructed) refrain from acting, or to exercise such power, discretion or
authority, in accordance with such instructions. Without prejudice to the
generality of the foregoing, (i) Administrative Agent shall be entitled to
rely, and shall be fully protected in relying, upon any communication,
instrument or document believed by it to be genuine and correct and to have
been signed or sent by the proper Person or Persons, and shall be entitled to
rely and shall be protected in relying on opinions and judgments of attorneys
(who may be attorneys for Company and its Subsidiaries), accountants, experts
and other professional advisors selected by it; and (ii) no Lender shall have
any right of action whatsoever against Administrative Agent as a result of
Administrative Agent acting or (where so instructed) refraining from acting
hereunder or any of the other Credit Documents in accordance with the

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instructions of Requisite Lenders (or such other Lenders as may be
required to give such instructions under Section 10.5).


     9.4 Agent Entitled to Act as Lender. The agency hereby created shall in
no way impair or affect any of the rights and powers of, or impose any duties
or obligations upon, any Agent in its individual capacity as a Lender
hereunder. With respect to its participation in the Term Loans, Administrative
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as if it were not performing the duties and functions
delegated to it hereunder, and the term “Lender” shall, unless the context
clearly otherwise indicates, include Administrative Agent in its individual
capacity. Administrative Agent and its Affiliates may accept deposits from,
lend money to and generally engage in any kind of banking, trust, financial
advisory or other business with Company or any of its Affiliates as if it were
not performing the duties specified herein, and may accept fees and other
consideration from Company for services in connection herewith and otherwise
without having to account for the same to Lenders.


     9.5 Lenders’ Representations, Warranties and Acknowledgment.


          (a) Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with Credit Extensions hereunder and that it has
made and shall continue to make its own appraisal of the creditworthiness of
Company and its Subsidiaries. Administrative Agent shall have no duty or
responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether
coming into its possession before the making of the Term Loans or at any time
or times thereafter, and Administrative Agent shall have no responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.



          (b) Each Lender, by delivering its signature page to this Agreement on the
Closing Date shall be deemed to have acknowledged receipt of, and consented to
and approved, each Credit Document and each other document required to be
approved by Administrative Agent, Requisite Lenders or Lenders, as applicable
on the Closing Date.



     9.6 Right to Indemnity. Each Lender, in proportion to its Pro Rata Share,
severally agrees to indemnify Administrative Agent, to the extent that
Administrative Agent shall not have been reimbursed by any Credit Party, for
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including counsel fees and
disbursements) or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against Administrative Agent in exercising
its powers, rights and remedies or performing its duties under the Existing
Credit Agreement, hereunder or under the other Credit Documents or otherwise in
its capacity as Administrative Agent in any way relating to or arising out of
the Existing Credit Agreement, this Agreement, the other Credit Documents or
any Restructuring Transaction Document; provided, no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
Administrative Agent’s gross negligence or willful misconduct. If any
indemnity furnished to Administrative Agent for any purpose shall, in the


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 opinion of Administrative Agent, be insufficient or become impaired,
Administrative Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished; provided, in no event shall this sentence require any Lender to
indemnify Administrative Agent against any liability, obligation, loss, damage,
penalty, action, judgment, suit, cost, expense or disbursement in excess of
such Lender’s Pro Rata Share thereof; and provided further, this sentence shall
not be deemed to require any Lender to indemnify Administrative Agent against
any liability, obligation, loss, damage, penalty, action, judgment, suit, cost,
expense or disbursement described in the proviso in the immediately preceding
sentence.


     9.7 Successor Administrative Agent.


Administrative Agent (a) may resign at any time by giving thirty (30) days’
prior written notice thereof to Lenders and Company; and (b) shall be deemed to
resign on the thirtieth (30th) day following the Requisite Lenders’ written
notice thereof sent to the Administrative Agent, the Company, and the Lenders.
Upon any such notice of resignation, Requisite Lenders shall have the right,
upon five Business Days’ notice to Company, to appoint a successor
Administrative Agent, provided that if the Requisite Lenders shall fail to
appoint a successor Administrative Agent with such time period, the
Administrative Agent may appoint a successor Administrative Agent. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent. After any retiring Administrative
Agent’s resignation hereunder as Administrative Agent, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent hereunder.


     9.8 Collateral Documents and Guaranty.


          (a) Administrative Agent as Agent under Collateral Documents and Guaranty.
Each Lender hereby further authorizes Administrative Agent, on behalf of and
for the benefit of Lenders, to be the agent for and representative of Lenders
with respect to the Guaranty, the Collateral and the Collateral Documents.
Without further consent or authorization from Lenders, Administrative Agent
may, and at the direction of the Requisite Lenders shall, execute any documents
or instruments necessary to (i) release or otherwise subordinate any Lien
encumbering any or all item(s) of Collateral (A) that is the subject of a sale
or other disposition of assets permitted hereby or (B) to which Requisite
Lenders have otherwise consented and (ii) release any Guarantor from the
Guaranty and the Pledge and Security Agreement (A) pursuant to Section 7.13 or
(B) with respect to which Requisite Lenders have otherwise consented.



          (b) Administrative Agent’s Right to Realize on Collateral and Enforce
Guaranty. Anything contained in any of the Credit Documents to the contrary
notwithstanding, Company, Administrative Agent and each Lender hereby agree
that (i) no Lender shall have any right individually to realize upon any of the
Collateral or to enforce the Guaranty, it being understood and agreed that all
powers, rights and remedies hereunder may be exercised solely by Administrative
Agent, on behalf of Lenders in accordance with the terms hereof, and (ii) in
the event of a foreclosure by Administrative Agent on any of the Collateral
pursuant to a public or private sale, Administrative Agent or any Lender may be
the purchaser of any or all of such

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Collateral at any such sale and Administrative Agent, as agent for and
representative of Lenders (but not any Lender or Lenders in its or their
respective individual capacities unless Requisite Lenders shall otherwise agree
in writing) shall be entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the Collateral sold
at any such public sale, to use and apply any of the Obligations as a credit on
account of the purchase price for any collateral payable by Administrative
Agent at such sale.


          (c) Supplemental Collateral Agent. It is the purpose hereof and the other
Credit Documents that there shall be no violation of any law of any
jurisdiction denying or restricting the right of banking corporations or
associations to transact business as agent or trustee in such jurisdiction. It
is recognized that in case of litigation hereunder or any of the other Credit
Documents, and in particular in case of the enforcement of any of the Credit
Documents, or in case Administrative Agent deems that by reason of any present
or future law of any jurisdiction it may not exercise any of the rights, powers
or remedies granted herein or in any of the other Credit Documents or take any
other action which may be desirable or necessary in connection therewith, it
may be necessary that Administrative Agent appoint an additional individual or
institution as a separate trustee, co-trustee, collateral agent or collateral
co-agent (a “Supplemental Collateral Agent”). In the event that Administrative
Agent appoints a Supplemental Collateral Agent with respect to any Collateral,
(i) each and every right, power, privilege or duty expressed or intended hereby
or any of the other Credit Documents to be exercised by or vested in or
conveyed to Administrative Agent with respect to such Collateral shall be
exercisable by and vest in such Supplemental Collateral Agent to the extent,
and only to the extent, necessary to enable such Supplemental Collateral Agent
to exercise such rights, powers and privileges with respect to such Collateral
and to perform such duties with respect to such Collateral, and every covenant
and obligation contained in the Credit Documents and necessary to the exercise
or performance thereof by such Supplemental Collateral Agent shall run to and
be enforceable by either Agent or such Supplemental Collateral Agent, and (ii)
the provisions of this Section 9 and of Sections 10.2 and 10.3 that refer to
Administrative Agent shall inure to the benefit of such Supplemental Collateral
Agent and all references therein to Administrative Agent shall be deemed to be
references to Administrative Agent and/or such Supplemental Collateral Agent,
as the context may require. Should any instrument in writing from Company or
any other Credit Party be required by any Supplemental Collateral Agent so
appointed by Administrative Agent for more fully and certainly vesting in and
confirming to him or it such rights, powers, privileges and duties, Company
shall, or shall cause such Credit Party to, execute, acknowledge and deliver
any and all such instruments promptly upon request by Administrative Agent. In
case 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 extent
permitted by law, shall vest in and be exercised by Administrative Agent until
the appointment of a new Supplemental Collateral Agent.



SECTION 10. MISCELLANEOUS


     10.1 Notices. Unless otherwise specifically provided herein, any notice
or other communication herein required or permitted to be given to a Credit
Party or Administrative Agent, shall be sent to such Person’s address as set
forth on Appendix B or in the other relevant Credit Document, and in the case
of any Lender, the address as indicated on Appendix B or


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 otherwise indicated to Administrative Agent in writing. Each notice
hereunder shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service and signed for
against receipt thereof, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage
prepaid and properly addressed; provided, no notice to any Agent shall be
effective until received by such Agent.


     10.2 Expenses. Whether or not the transactions contemplated hereby shall
be consummated, Company agrees to pay promptly (a) all the actual and
reasonable costs and expenses of preparation of the Credit Documents and any
consents, amendments, waivers or other modifications thereto; (b) all the costs
of furnishing all opinions by counsel for Company and the other Credit Parties;
(c) the reasonable fees, expenses and disbursements of counsel to Agent and, at
the Requisite Lenders’ request, any counsel retained by a Lender (in each case
including allocated costs of internal counsel) in connection with the
negotiation, preparation, execution and administration of the Credit Documents
and any consents, amendments, waivers or other modifications thereto and any
other documents or matters requested by Company; (d) all the actual costs and
reasonable expenses of creating and perfecting Liens in favor of Administrative
Agent, for the benefit of Lenders pursuant hereto, including filing and
recording fees, expenses and taxes, stamp or documentary taxes, search fees,
title insurance premiums and reasonable fees, expenses and disbursements of
counsel to Agent and of counsel to Agent and, at the Requisite Lenders’
request, any counsel that a Lender may retain, providing any opinions that any
Agent or Requisite Lenders may request in respect of the Collateral or the
Liens created pursuant to the Collateral Documents; (e) all the actual costs
and reasonable fees, expenses and disbursements of any auditors, accountants,
consultants or appraisers; (f) all the actual costs and reasonable expenses
(including the reasonable fees, expenses and disbursements of any appraisers,
consultants, advisors and agents employed or retained by Administrative Agent
and its counsel and, at the Requisite Lenders’ request, any counsel that a
Lender may retain) in connection with the custody or preservation of any of the
Collateral; (g) all other actual and reasonable costs and expenses incurred by
Agent and, at the Requisite Lenders’ request, any Lender, in connection with
the negotiation, preparation and execution of the Credit Documents and any
consents, amendments, waivers or other modifications thereto and the
transactions contemplated thereby; and (h) after the occurrence of a Default or
an Event of Default, all costs and expenses, including reasonable attorneys’
fees (including allocated costs of internal counsel) and costs of settlement,
incurred by any Agent and Lenders in enforcing any Obligations of or in
collecting any payments due from any Credit Party hereunder or under the other
Credit Documents by reason of such Default or Event of Default (including in
connection with the sale of, collection from, or other realization upon any of
the Collateral or the enforcement of the Guaranty) or in connection with any
refinancing or restructuring of the credit arrangements provided hereunder in
the nature of a “work-out” or pursuant to any insolvency or bankruptcy cases or
proceedings, provided that in case of clauses (a) through (h) hereof
reimbursement of the fees and expenses of outside counsel shall be limited to
(i) for the Agent, one law firm for each area of law, plus such local counsel
as may be reasonably appropriate; (ii) for High River Limited Partnership or
its assignees, one law firm for each area of law plus such local counsel as may
be reasonably appropriate, the reimbursement of fees and expenses of such shall
be limited to fees and expenses incurred through the date of the Final Order
hearing; and (iii) for all other Lenders as a group, one law firm for each area
of law (i.e., one law firm representing such group of Lenders, not one firm for
each such Lender), plus such local counsel as may be reasonably


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 appropriate; provided, however, that such reimbursement provided to all
other Lenders as a group under this clause (iii) shall be further limited to
reimbursement only after the occurrence of a Default or an Event of Default.
With respect to foregoing, the parties confirm that, in connection with this
matter, Brown Rudnick Berlack Israels LLP has represented High River Limited
Partnership and no other Lender.


     10.3 Indemnity. In addition to the payment of expenses pursuant to
Section 10.2, whether or not the transactions contemplated hereby shall be
consummated, each Credit Party agrees to defend (subject to Indemnitees’
selection of counsel), indemnify, pay and hold harmless, each Agent and Lender
and the officers, partners, directors, trustees, employees, agents and
Affiliates of each Agent and each Lender (each, an “Indemnitee”), from and
against any and all Indemnified Liabilities; provided, no Credit Party shall
have any obligation to any Indemnitee hereunder with respect to any Indemnified
Liabilities to the extent such Indemnified Liabilities arise from the gross
negligence or willful misconduct of that Indemnitee. To the extent that the
undertakings to defend, indemnify, pay and hold harmless set forth in this
Section 10.3 may be unenforceable in whole or in part because they are
violative of any law or public policy, the applicable Credit Party shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.


     10.4 Set-Off. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Lender is hereby authorized by each
Credit Party at any time or from time to time subject to the consent of
Administrative Agent (such consent not to be unreasonably withheld or delayed),
without notice to any Credit Party or to any other Person (other than
Administrative Agent), any such notice being hereby expressly waived, to set
off and to appropriate and to apply any and all deposits (including
Indebtedness evidenced by certificates of deposit, whether matured or
unmatured, but not including special or trust accounts) and any other
Indebtedness at any time held or owing by such Lender to or for the credit or
the account of any Credit Party against and on account of the obligations and
liabilities of any Credit Party to such Lender hereunder and under the other
Credit Documents, including all claims of any nature or description arising out
of or connected hereto or with any other Credit Document, irrespective of
whether or not (a) such Lender shall have made any demand hereunder or (b) the
principal of or the interest on the Term Loans or any other amounts due
hereunder shall have become due and payable pursuant to Section 2 and although
such obligations and liabilities, or any of them, may be contingent or
unmatured. Each Credit Party hereby further grants to Administrative Agent and
each Lender a security interest in all Deposit Accounts maintained with
Administrative Agent or such Lender as security for the Obligations.


     10.5 Amendments and Waivers.


          (a) Requisite Lenders’ Consent. No amendment, modification, termination
or waiver of any provision of the Credit Documents, or consent to any departure
by any Credit Party therefrom, shall in any event be effective without the
written concurrence of the Requisite Lenders. The Requisite Lenders shall have
the right to amend, modify, terminate or waive any provision of the Credit
Documents, or consent to any departure of any Credit Party therefrom or may
take any action contemplated in the Credit Documents, and such amendment,
modification,

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termination, waiver, consent, or action shall be effective upon the
written concurrence of the Requisite Lenders, and, if applicable, the Company,
and any applicable Credit Party and the Administrative Agent shall join
therein. The Requisite Lenders shall have the right to waive any breach,
default or Event of Default by any Credit Party, effective upon the written
concurrence of the Requisite Lenders and upon such waiver, such breach, default
of Event of Default shall cease to exist and shall be deemed to have been cured
and released for every purpose under the Credit Documents.


          (b) Additional Matters. Without the written consent of each Lender that
would be affected thereby, no amendment, modification, termination, or consent
shall be effective if the effect thereof would:



          (i) extend the scheduled final maturity of any Term Loans or Term Loan
Notes;



          (ii) waive, reduce or postpone any scheduled repayment (but not
prepayment);



          (iii) reduce the rate of interest on any Term Loan (other than any waiver
of any increase in the interest rate applicable to any Term Loan pursuant to
Section 2.8) or any fee payable hereunder;



          (iv) extend the time for payment of any such interest or fees;



          (v) reduce the principal amount of any Term Loan;



          (vi) amend, modify, terminate or waive any provision of this Section
10.5(b) or Section 10.5(c);



          (vii) amend the definition of “Requisite Lenders” or “Pro Rata Share";
provided, with the consent of Requisite Lenders, additional extensions of
credit pursuant hereto may be included in the determination of “Requisite
Lenders” or “Pro Rata Share” on substantially the same basis as the Term Loans
are included on the Closing Date;



          (viii) release or otherwise subordinate all or substantially all of the
Collateral or all or substantially all of the Guarantors from the Guaranty,
except as expressly provided in the Credit Documents; or



          (ix) consent to the assignment or transfer by any Credit Party of any of
its rights and obligations under any Credit Document.



          (c) Consents of Administrative Agent. No amendment, modification,
termination or waiver of any provision of the Credit Documents, or consent to
any departure by any Credit Party therefrom, shall amend, modify, terminate or
waive any provision of Section 9, other than Section 9.8(a). Subject to the
immediately preceding sentence, upon notice of the Requisite Lenders, any
provision of the Credit Documents requiring the consent or agreement or other
approval or action of the Administrative Agent under the Credit Documents shall
instead require the consent, agreement, approval or action only of the
Requisite Lenders. Any amendment, modification, termination, waiver or consent
given pursuant to Section 10.5(a) or



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10.5(b) above shall be binding upon all Lenders, the Term Loans, the Notes
and the Credit Documents, whether or not the individual Lender has given its
consent thereto.


          (d) Execution of Amendments, etc. Administrative Agent, upon the request
of the Requisite Lenders, shall execute amendments, modifications, waivers or
consents on behalf of the Lenders, except to the extent that such request would
amend, modify, terminate or waive any provision of Section 9, other than
Section 9.8(a), in which case the Administrative Agent may enter into such
amendments, modifications, waivers or consents in its own discretion. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on any Credit
Party in any case shall entitle any Credit Party to any other or further notice
or demand in similar or other circumstances. Any amendment, modification,
termination, waiver, consent, release, extension, reduction or other action
effected in accordance with this Section 10.5 shall be binding upon all
Lenders, the Term Loans, the Notes and the Credit Documents and each future
Lender (whether or not the individual Lender has given its concurrence thereto)
and, if signed by a Credit Party, on such Credit Party.



     10.6 Successors and Assigns; Participations.


          (a) This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders. No Credit Party’s rights or
obligations hereunder nor any interest therein may be assigned or delegated by
any Credit Party without the prior written consent of all Lenders.



          (b) Company, Administrative Agent and Lenders shall deem and treat the
Persons listed as Lenders in the Register as the holders and owners of the
corresponding Term Loans listed therein for all purposes hereof, and no
assignment or transfer of any such Term Loan shall be effective, in each case,
unless and until an Assignment Agreement effecting the assignment or transfer
thereof shall have been delivered to and accepted by Administrative Agent and
recorded in the Register as provided in Section 10.6(e). Prior to such
recordation, all amounts owed with respect to the applicable Term Loan shall be
owed to the Lender listed in the Register as the owner thereof, and any
request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is listed in the Register as a
Lender shall be conclusive and binding on any subsequent holder, assignee or
transferee of the corresponding Term Loans.



          (c) Each Lender shall have the right at any time to sell, assign or
transfer all or a portion of its rights and obligations under this Agreement,
including, without limitation, all or a portion of its Term Loans owing to it,
Note or Notes held by it, or other Obligation (provided, however, that each
such assignment shall be of a uniform, and not varying, percentage of all
rights and obligations under and in respect of every Term Loan):



          (i) to any Person meeting the criteria of clause (i) of the definition of
the term of “Eligible Assignee” upon the giving of notice to Company and
Administrative Agent; and

94






 



           (ii) to any Person meeting the criteria of clause (ii) or (iii) of the
definition of the term of “Eligible Assignee” and consented to by each of
Company and Administrative Agent (such consent not to be unreasonably withheld
or delayed or, in the case of Company, required at any time an Event of Default
shall have occurred and then be continuing); provided further, each such
assignment pursuant to this Section 10.6(c)(ii) shall be in an aggregate amount
of not less than $5,000,000 (or such lesser amount as may be agreed to by
Company and Administrative Agent or as shall constitute the aggregate amount of
the Term Loans of the assigning Lender) with respect to the assignment of the
Term Loans, and after giving effect to each such assignment pursuant to this
Section 10.6(c)(ii) and unless otherwise agreed by Company and Administrative
Agent, such Lender shall have outstanding Term Loans aggregating at least
$5,000,000 (or such lesser amount as shall constitute the aggregate amount of
the Term Loan, as applicable, of the assigning Lender).



          (d) The assigning Lender and the assignee thereof shall execute and
deliver to Administrative Agent an Assignment Agreement, together with (i) a
processing and recordation fee of $3,500 (except that only one fee shall be
payable in the case of contemporaneous assignments to Related Funds), and (ii)
such forms, certificates or other evidence, if any, with respect to United
States federal income tax withholding matters as the assignee under such
Assignment Agreement may be required to deliver to Administrative Agent
pursuant to Section 2.18(c).



          (e) Upon its receipt of a duly executed and completed Assignment
Agreement, together with the processing and recordation fee referred to in
Section 10.6(d) (and any forms, certificates or other evidence required by this
Agreement in connection therewith), Administrative Agent shall record the
information contained in such Assignment Agreement in the Register, shall give
prompt notice thereof to Company and shall maintain a copy of such Assignment
Agreement.



          (f) Each Lender, upon execution and delivery hereof or upon executing and
delivering an Assignment Agreement, as the case may be, represents and warrants
as of the Closing Date or as of the applicable Effective Date (as defined in
the applicable Assignment Agreement) that (i) it is an Eligible Assignee; (ii)
it has experience and expertise in the making of or investing in commitments or
loans such as the applicable Term Loans; and (iii) it will make or invest in,
as the case may be, its Term Loans for its own account in the ordinary course
of its business and without a view to distribution of such Term Loans within
the meaning of the Securities Act or the Exchange Act or other federal
securities laws (it being understood that, subject to the provisions of this
Section 10.6, the disposition of such Term Loans or any interests therein shall
at all times remain within its exclusive control).



          (g) Subject to the terms and conditions of this Section 10.6, as of the
“Effective Date” specified in the applicable Assignment Agreement: (i) the
assignee thereunder shall have the rights and obligations of a “Lender”
hereunder to the extent such rights and obligations hereunder have been
assigned to it pursuant to such Assignment Agreement and shall thereafter be a
party hereto and a “Lender” for all purposes hereof; (ii) the assigning Lender
thereunder shall, to the extent that rights and obligations hereunder have been
assigned thereby pursuant to such Assignment Agreement, relinquish its rights
(other than any rights which survive the termination hereof under Section 10.8)
and be released from its obligations hereunder

95






 




(and, in the case of an Assignment Agreement covering all or the remaining
portion of an assigning Lender’s rights and obligations hereunder, such Lender
shall cease to be a party hereto; provided, anything contained in any of the
Credit Documents to the contrary notwithstanding, such assigning Lender shall
continue to be entitled to the benefit of all indemnities hereunder as
specified herein with respect to matters arising out of the prior involvement
of such assigning Lender as a Lender hereunder; and (iii) if any such
assignment occurs after the issuance of any Note hereunder, the assigning
Lender shall, upon the effectiveness of such assignment or as promptly
thereafter as practicable, surrender its applicable Notes to Administrative
Agent for cancellation, and thereupon Company shall issue and deliver new
Notes, if so requested by the assignee and/or assigning Lender, to such
assignee and/or to such assigning Lender, with appropriate insertions, to
reflect the new outstanding Term Loans of the assignee and/or the assigning
Lender.


          (h) Each Lender shall have the right at any time to sell one or more
participations to any Person in all or any part of its Term Loans or in any
other Obligation. The holder of any such participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except with
respect to any amendment modification or waiver that would (i) extend the final
scheduled maturity of any Term Loan, Note in which such participant is
participating, or reduce the rate or extend the time of payment of Interest or
Fees thereon (except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount
thereof, or increase the amount of the participant’s participation over the
amount thereof then in effect (it being understood that a waiver of any Default
or Event of Default shall not constitute a change in the terms of such
participation, and that an increase in any Term Loan shall be permitted without
the consent of any participant if the participant’s participation is not
increased as a result thereof), (ii) consent to the assignment or transfer by
any Credit Party of any of its rights and obligations under this Agreement or
(iii) release all or substantially all of the Collateral under the Collateral
Documents (except as expressly provided in the Credit Documents) supporting the
Term Loans hereunder in which such participant is participating. All amounts
payable by any Credit Party hereunder, including amounts payable to such Lender
pursuant to Section 2.16(c), 2.17 or 2.18, shall be determined as if such
Lender had not sold such participation. Each Credit Party and each Lender
hereby acknowledge and agree that, solely for purposes of Sections 2.15 and
10.4, (1) any participation will give rise to a direct obligation of each
Credit Party to the participant and (2) the participant shall be considered to
be a “Lender.”



          (i) In addition to any other assignment permitted pursuant to this Section
10.6, (i) any Lender may assign and pledge all or any portion of its Term
Loans, the other Obligations owed to such Lender, and its Notes, if any, to any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank, and (ii) any Lender which is an investment
fund may pledge all or any portion of its Notes, if any, or Term Loans to any
trustee for, or any other representative of, holders of obligations owed, or
securities issued, by such fund (provided that such trustee or other
representative is an Eligible Assignee), as security for such obligations or
securities; provided no Lender, as between Company and such Lender, shall be
relieved of any of its obligations hereunder as a result of any such assignment
and pledge, and provided further in no event shall the applicable Federal
Reserve Bank or trustee or other

96






 




representative be considered to be a “Lender” or be entitled to require
the assigning Lender to take or omit to take any action hereunder.


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


     10.8 Survival of Representations, Warranties and Agreements. All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof and the making of any Credit Extension.
Notwithstanding anything herein or implied by law to the contrary, the
agreements of each Credit Party set forth in Sections 2.16(c), 2.17, 2.18,
10.2, 10.3 and 10.4 and the agreements of Lenders set forth in Sections 2.15
and 9.6 shall survive the payment of the Term Loans and the termination hereof.


     10.9 No Waiver; Remedies Cumulative. No failure or delay on the part of
Administrative Agent or any Lender in the exercise of any power, right or
privilege hereunder or under any other Credit Document shall impair such power,
right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of any
other power, right or privilege. The rights, powers and remedies given to the
Agent and each Lender hereby are cumulative and shall be in addition to and
independent of all rights, powers and remedies existing by virtue of any
statute or rule of law or in any of the other Credit Documents or any of the
Hedge Agreements. Any forbearance or failure to exercise, and any delay in
exercising, any right, power or remedy hereunder shall not impair any such
right, power or remedy or be construed to be a waiver thereof, nor shall it
preclude the further exercise of any such right, power or remedy.


     10.10 Marshalling; Payments Set Aside. Neither Administrative Agent nor
any Lender shall be under any obligation to marshal any assets in favor of any
Credit Party or any other Person or against or in payment of any or all of the
Obligations. To the extent that any Credit Party makes a payment or payments
to Administrative Agent or Lenders (or to Administrative Agent, on behalf of
Lenders), or Administrative Agent or Lenders enforce any security interests or
exercise their rights of setoff, and such payment or payments or the proceeds
of such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or setoff had not occurred.


     10.11 Severability. In case any provision in or obligation hereunder or
any Note shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.


97






 


     10.12 Obligations Several; Independent Nature of Lenders’ Rights. The
obligations of Lenders hereunder are several and no Lender shall be responsible
for the obligations of any other Lender hereunder. Nothing contained herein or
in any other Credit Document, and no action taken by Lenders pursuant hereto or
thereto, shall be deemed to constitute Lenders as a partnership, an
association, a joint venture or any other kind of entity. The amounts payable
at 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
hereunder and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose. No Lender shall be (x)
deemed to have any fiduciary duty or obligation to any other Lender by virtue
of any position of such Person or its Affiliates, as a Lender, equity holder or
otherwise, in or with respect to the Company or its Affiliates or (y)
restricted or otherwise limited in exercising any rights, powers or privileges
as a Lender or be excluded from the term “Requisite Lenders” as a result of any
position of it or any of its Affiliates, as an equity holder or otherwise, in
or with respect to the Company or its Affiliates; it being understood and
agreed that each Lender shall be free to exercise its rights, powers and
privileges in its sole and absolute discretion.


     10.13 Headings. Section headings herein are included herein for
convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.


     10.14 APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.


     10.15 CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
ANY CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT
DOCUMENT, OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY
EXECUTING AND DELIVERING THIS AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (a) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (b)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (c) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS
ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 10.1; (d) AGREES THAT SERVICE AS
PROVIDED IN CLAUSE (c) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER
THE APPLICABLE CREDIT PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND
OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (e)
AGREES ADMINISTRATIVE AGENT AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY CREDIT
PARTY IN THE COURTS OF ANY OTHER JURISDICTION.


98






 


     10.16 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR
ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN
TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND
ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT
THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP,
THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT,
AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE
DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SECTION 10.16 AND EXECUTED BY EACH OF THE PARTIES HERETO),
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS HERETO OR ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THE TERM LOANS MADE OR DEEMED MADE
HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.


     10.17 Confidentiality. Each Lender shall hold all non-public information
obtained pursuant to the requirements hereof which has been identified as
confidential by Company in accordance with such Lender’s customary procedures
for handling confidential information of this nature and in accordance with
prudent lending or investing practices, it being understood and agreed by
Company that in any event a Lender may make disclosures to Affiliates of such
Lender (and to other persons authorized by a Lender or Agent to organize,
present or disseminate such information in connection with disclosures
otherwise made in accordance with this Section 10.17) or disclosures reasonably
required by any bona fide or potential assignee, transferee or participant in
connection with the contemplated assignment, transfer or participation by such
Lender of any Term Loans or any participations therein or by any direct or
indirect contractual counterparties (or the professional advisors thereto) in
Hedge Agreements (provided, such counterparties and advisors are advised of and
agree to be bound by the provisions of this Section 10.17) or disclosures
required or requested by any governmental agency or representative thereof or
by the NAIC or pursuant to legal process; provided, unless specifically
prohibited by applicable law or court order, each Lender shall make reasonable
efforts to notify Company of any request by any governmental agency or
representative thereof (other than any such request in connection with any
examination of the financial condition or other routine examination of such
Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information.


99






 


     10.18 Usury Savings Clause. Notwithstanding any other provision herein,
the aggregate interest rate charged with respect to any of the Obligations,
including all charges or fees in connection therewith deemed in the nature of
interest under applicable law shall not exceed the Highest Lawful Rate. If the
rate of interest (determined without regard to the preceding sentence) under
this Agreement at any time exceeds the Highest Lawful Rate, the outstanding
amount of the Term Loans made or deemed made hereunder shall bear interest at
the Highest Lawful Rate until the total amount of interest due hereunder equals
the amount of interest which would have been due hereunder if the stated rates
of interest set forth in this Agreement had at all times been in effect. In
addition, if when the Term Loans made or deemed made hereunder are repaid in
full the total interest due hereunder (taking into account the increase
provided for above) is less than the total amount of interest which would have
been due hereunder if the stated rates of interest set forth in this Agreement
had at all times been in effect, then to the extent permitted by law, Company
shall pay to Administrative Agent an amount equal to the difference between the
amount of interest paid and the amount of interest which would have been paid
if the Highest Lawful Rate had at all times been in effect. Notwithstanding
the foregoing, it is the intention of Lenders and Company to conform strictly
to any applicable usury laws. Accordingly, if any Lender contracts for,
charges, or receives any consideration which constitutes interest in excess of
the Highest Lawful Rate, then any such excess shall be cancelled automatically
and, if previously paid, shall at such Lender’s option be applied to the
outstanding amount of the Term Loans made or deemed made hereunder or be
refunded to Company.


     10.19 Counterparts; Effectiveness. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective on the Closing
Date upon the execution of a counterpart hereof by each of the parties hereto
and receipt by Company and Administrative Agent of written or telephonic
notification of such execution and authorization of delivery thereof.


     10.20 Limitation of Liability. Each Credit Party agrees that no
Indemnitee shall have any liability (whether direct or indirect, in contract,
tort or otherwise) to any Credit Party or any of their respective Subsidiaries
or any of their equity holders or creditors for or in connection with the
transactions contemplated hereby and in the other Credit Documents and
Restructuring Transaction Documents, except to the extent such liability is
found in a final judgment by a court of competent jurisdiction to have resulted
from such Indemnitee’s gross negligence or willful misconduct. In no event,
however, shall any Indemnitee be liable on any theory of liability for any
special, indirect, consequential or punitive damages and each Credit Party
hereby waives, releases and agrees (for itself and on behalf of its
Subsidiaries) not to sue upon any such claim for any such damages, whether or
not accrued and whether or not known or suspected to exist in its favor.


     10.21 Transitional Arrangements. This Agreement shall, on and as of the
Closing Date, amend, restate, and supersede the Existing Credit Agreement in
its entirety, except as provided in this Section 10.21. On the Closing Date,
the rights and obligations of the parties under the Existing Credit Agreement
shall be subsumed within and governed by this Agreement, provided, however,

100






 



          (a) that any and all “Loans” (as defined in the Existing Credit
Agreement), up to the amount of the Term Loans (as defined herein), shall be
converted to Term Loans hereunder, be evidenced by the Term Loan Notes, and
shall thereafter bear interest at the rates set forth hereunder;



          (b) that any and all guarantees outstanding under or in connection with
the Existing Credit Agreement shall continue and be deemed to be a guarantee
hereunder, such that any guarantee provided hereunder or in connection herewith
shall be deemed to be in addition thereto and not in substitution therefor; and



          (c) that any and all Liens granted under or in connection with any Credit
Document (as defined in the Existing Credit Agreement) and the Existing Credit
Agreement or to secure the obligations thereunder shall continue and be deemed
to secure the Obligations hereunder, such that any Lien granted hereunder or in
connection herewith shall be deemed to be in addition thereto and not in
substitution therefor.



[remainder of this page intentionally left blank]


101






 


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



	 	 	 	 	 
	 
	 	XO COMMUNICATIONS, INC.,

	 
	 	
	 	

	 
	 	
	 	

	 
	 	
By:

	 	/s/ Gary D. Begeman

	 
	 	 
	 	


	 
	 	 
	 	Name: Gary D. Begeman

	 
	 	 
	 	Title: Senior Vice President, General Counsel

& Secretary




S-1 






 


Guarantors



	 	 	 	 	 
	 
	 	ITC

LHP EQUIPMENT, INC.

XO ALABAMA, INC.

XO ARIZONA, INC.

XO CALIFORNIA, INC.

XO COLORADO, LLC

XO CONNECTICUT, INC.

XO DATA SERVICES, LLC

XO DELAWARE, INC.

XO DOMESTIC HOLDINGS, INC.

XO D.C., INC.

XO FLORIDA, INC.

XO GEORGIA, INC.

XO HAWAII, INC.

XO IDAHO, INC.

XO ILLINOIS, INC.

XO INDIANA, INC.

XO INTERACTIVE, INC.

XO INTERCITY HOLDINGS NO. 1, LLC

XO INTERCITY HOLDINGS NO. 2, LLC

XO INTERNATIONAL HOLDINGS, INC.

XO INTERNATIONAL, INC.

XO KANSAS, INC.

XO KENTUCKY, INC.

XO LMDS HOLDINGS NO. 1, INC.

XO LONG DISTANCE SERVICES, INC.

XO LONG DISTANCE SERVICES (VIRGINIA), LLC

XO LOUISIANA, INC.

XO MAINE, INC.

XO MANAGEMENT SERVICES, INC.

XO MANAGEMENT SERVICES NEVADA, INC.

	 
	 	
	 	

	 
	 	
By:

	 	/s/ Gary D. Begeman

	 
	 	 
	 	


	 
	 	 
	 	Name: Gary D. Begeman

	 
	 	 
	 	Title: Senior Vice President, General Counsel

& Secretary




 2 






 



	 	 	 	 	 
	 
	 	GUARANTORS (CONTINUED):

	 
	 	
	 	

	 
	 	XO MARYLAND, LLC

XO MASSACHUSETTS, INC.

XO MICHIGAN, INC.

XO MINDSHARE, LLC

XO MINNESOTA, LLC

XO MISSISSIPPI, INC.

XO MISSOURI, INC.

XO NEVADA MERGER SUB, INC.

XO NEW HAMPSHIRE, INC.

XO NEW JERSEY, INC.

XO NEW MEXICO, INC.

XO NEW YORK, INC.

XO NORTH CAROLINA, INC.

XO OHIO, INC.

XO ONE, INC.

XO OREGON, INC.

XO PENNSYLVANIA, INC.

XO RHODE ISLAND, INC.

XO SERVICES, INC.

XO SOUTH CAROLINA, INC.

XO TENNESSEE, INC.

XO TEXAS, INC.

XO UTAH, INC.

XO VIRGINIA, LLC

XO WASHINGTON, INC.

XO WEST VIRGINIA, INC.

XO WISCONSIN, INC.

	 
	 	
	 	

	 
	 	
By:

	 	/s/ Gary D. Begeman

	 
	 	 
	 	


	 
	 	 
	 	Name: Gary D. Begeman

	 
	 	 
	 	Title: Senior Vice President, General Counsel
& Secretary




 3 






 



	 	 	 	 	 
	 	 	MIZUHO CORPORATE BANK, LTD,

as Administrative Agent
	 	 	 	 	 
	 	 	
By:
	 	/s/ John V. Veltri
	 	 	 	 	

	 	 	 	 	Name: John V. Veltri
	 	 	 	 	Title: Joint General Manager



 4 






 


APPENDIX A


Pro Rata Shares



	 	 	 	 	 	 	 	 	 	 
	Lender	 	Term Loan Commitment	 	Pro Rata Share
	
	 	
	 	

	High River Limited Partnership
	 	$	424,255,000	 	 	 	84.851	%
	Franklin Mutual Advisors
	 	$	47,745,000	 	 	 	9.549	%
	Foothill Income Trust
	 	$	10,000,000	 	 	 	2.00	%
	General Motors Employees Global
Pension Trust
	 	$	5,000,000	 	 	 	1.00	%
	Department of Fire and Police
Pensions — City of LA
	 	$	5,250,000	 	 	 	1.05	%
	Sagamore Hill Hub Fund
	 	$	2,500,000	 	 	 	0.50	%
	HarborView CDO II
	 	$	1,500,000	 	 	 	0.30	%
	KS Capital Partners, LP
	 	$	1,246,000	 	 	 	0.2492	%
	Oppenheimer Sr. Floating Rate Fund
	 	$	1,500,000	 	 	 	0.30	%
	KS International Inc.
	 	$	754,000	 	 	 	0.1508	%
	UBS AG, Stamford Branch
	 	$	250,000	 	 	 	0.05	%
	 	Total
	 	$	500,000,000	 	 	 	100.00	%



APPENDIX A-1 






 


APPENDIX B



Notice Addresses



XO COMMUNICATIONS, INC.

11111 Sunset Hills Road

Reston, Virginia 20190

Attention: Treasurer

Telephone: 703-547-2000

Facsimile: 703-547-2025


GUARANTORS:


ITC

LHP EQUIPMENT, INC.

XO ALABAMA, INC.

XO ARIZONA, INC.

XO CALIFORNIA, INC.

XO COLORADO, LLC

XO CONNECTICUT, INC.

XO DATA SERVICES, LLC

XO DELAWARE, INC.

XO DOMESTIC HOLDINGS, INC.

XO D.C., INC.

XO FLORIDA, INC.

XO GEORGIA, INC.

XO HAWAII, INC.

XO IDAHO, INC.

XO ILLINOIS, INC.

XO INDIANA, INC.

XO INTERACTIVE, INC.

XO INTERCITY HOLDINGS NO. 1, LLC

XO INTERCITY HOLDINGS NO. 2, LLC

XO INTERNATIONAL HOLDINGS, INC.

XO INTERNATIONAL, INC.

XO KANSAS, INC.

XO KENTUCKY, INC.

XO LMDS HOLDINGS NO. 1, INC.

XO LONG DISTANCE SERVICES, INC.

XO LONG DISTANCE SERVICES (VIRGINIA), LLC

XO LOUISIANA, INC.

XO MAINE, INC.

XO MANAGEMENT SERVICES, INC.

XO MANAGEMENT SERVICES NEVADA, INC.

XO MARYLAND, LLC

XO MASSACHUSETTS, INC.


APPENDIX B-1 






 


GUARANTORS (CONTINUED):


XO MICHIGAN, INC.

XO MINDSHARE, LLC

XO MINNESOTA, LLC

XO MISSISSIPPI, INC.

XO MISSOURI, INC.

XO NEVADA MERGER SUB, INC.

XO NEW HAMPSHIRE, INC.

XO NEW JERSEY, INC.

XO NEW MEXICO, INC.

XO NEW YORK, INC.

XO NORTH CAROLINA, INC.

XO OHIO, INC.

XO ONE, INC.

XO OREGON, INC.

XO PENNSYLVANIA, INC.

XO RHODE ISLAND, INC.

XO SERVICES, INC.

XO SOUTH CAROLINA, INC.

XO TENNESSEE, INC.

XO TEXAS, INC.

XO UTAH, INC.

XO VIRGINIA, LLC

XO WASHINGTON, INC.

XO WEST VIRGINIA, INC.

XO WISCONSIN, INC.


11111 Sunset Hills Road

Reston, Virginia 20190

Attention: Treasurer

Telephone: 703-547-2000

Facsimile: 703-547-2025


APPENDIX B-2 






 


MIZUHO CORPORATE BANK, LTD.,


as Administrative Agent


Administrative Agent’s Principal Office:


Mizuho Corporate Bank, Limited

1251 Avenue of the Americas

New York, NY 10020

Attention: Rosa Garcia

Telephone: (212) 282-3325

Facsimile: (212) 282-4488


APPENDIX B-3 






 


HIGH RIVER LIMITED PARTNERSHIP,


as a Lender


   HIGH RIVER LIMITED PARTNERSHIP
   c/o
Icahn Associates Corp.
   767
Fifth Avenue, 47th Floor
   New
York, NY 10153
   Attention:
Keith Schaitkin
   Telephone:
(212) 702-4380
   Fax:
(212) 688-1158


FRANKLIN MUTUAL ADVISORS,

as a Lender


   FRANKLIN MUTUAL ADVISORS
   51
John F. Kennedy Parkway
   Short
Hills, NJ 07078
   Attention:
Bradley Takahashi
   Telephone:
(973) 912-2152
   Fax:
(973) 912-0646


FOOTHILL INCOME TRUST,

as a Lender


   FOOTHILL INCOME TRUST
   2450
Colorado Avenue
   Suite 3000
West
   Santa
Monica, CA 90404
   Attention:
Sean Dixon
   Telephone:
(310) 453-7381
   Fax:
(310) 453-7470


APPENDIX B-4 






 


GENERAL MOTORS EMPLOYEES GLOBAL GROUP PENSION TRUST,

as a Lender


   GENERAL MOTORS EMPLOYEES GLOBAL GROUP PENSION TRUST
   DDJ
Capital Management, LLC
   141
Linden Street, Suite 4
   Wellesley,
MA 02482
   Attention:
Laura Glynn
   Telephone:
(781) 283-8500
   Fax:
(781) 283-8555


DEPARTMENT OF FIRE AND POLICE PENSIONS – City of LA,

as a Lender


   DEPARTMENT OF FIRE AND POLICE PENSIONS — City of LA
   WR
Huff Associates
   67
Park Place – 9th Floor
   Morristown,
NJ 07960
   Attention:
Mike McGuiness
   Telephone:
(973) 984-1233
   Fax:
(973) 984-1126


SAGAMORE HILL HUB FUND,

as Lender


   SAGAMORE HILL HUB FUND
   2
Greenwich Office Park
   Greenwich,
CT 06831
   Attention:
Mark May
   Telephone:
(203) 422-0675
   Fax:
(203) 422-7214


HARBORVIEW CDO II,

as Lender


   HARBORVIEW CDO II
   6803
South Tuscon Way
   Englewood,
CO 80112
   Attention:
Joe Welsh
   Telephone:
(303) 768-3434
   Fax:
(303) 645-0942


APPENDIX B-5 






 


KS CAPITAL PARTNERS, LP,

as Lender


   KS CAPITAL PARTNERS, LP
   11
West 42nd Street, #19
   New
York, NY 10036
   Attention:
Marco Cipriano
   Telephone:
(212) 782-0230
   Fax:
(212) 768-9607


OPPENHEIMER SR. FLOATING RATE FUND,

as Lender


   OPPENHEIMER SR. FLOATING RATE FUND
   6803
South Tuscon Way
   Englewood,
CO 80112
   Attention:
Joe Welsh
   Telephone:
(303) 768-3434
   Fax:
(303) 645-9042


KS INTERNATIONAL INC.,

as Lender


   KS INTERNATIONAL INC.
   11
West 42nd Street, #19
   New
York, NY 10036
   Attention:
Marco Cipriano
   Telephone:
(212) 782-0230
   Fax:
(212) 768-9607


UBS AG, STAMFORD BRANCH,

as Lender


   UBS AG, STAMFORD BRANCH
   677
Washington Boulevard
   Stamford,
CT 06901
   Attention:
Steve Reilly
   Telephone:
(203) 719-8831
   Fax:
(203) 719-8620



APPENDIX B-6 









 



     
EXHIBIT A TO

AMENDED AND RESTATED

CREDIT AND GUARANTY AGREEMENT


CONVERSION/CONTINUATION NOTICE


     Reference is made to the Amended and Restated Credit and Guaranty
Agreement, dated as of January 16, 2003 (as it may be amended, supplemented or
otherwise modified, the “Credit Agreement”; the terms defined therein and not
otherwise defined herein being used herein as therein defined), by and among XO
COMMUNICATIONS, INC., a Delaware corporation (“Company”), CERTAIN SUBSIDIARIES
OF COMPANY, as Guarantors (the “Guarantors”), the Lenders party thereto from
time to time, and MIZUHO CORPORATE BANK, LTD. (“Mizuho”), as Administrative
Agent (together with its permitted successors in such capacity, “Administrative
Agent”).


     Pursuant to Section 2.7 of the Credit Agreement, Company desires to
convert or to continue the following Term Loans, each such conversion and/or
continuation to be effective as of                     :



	 	 	 	 	 	 	 	 	 	 
	 	 	
i.
	 	Term Loans:	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	(1)
	 	Amount of Eurodollar Rate Loans to

be continued as Eurodollar Rate

        Loans, with an Interest Period of

month(s):
	 	$	 
	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	(2)
	 	Amount of Base Rate Loans to be

converted to Eurodollar Rate Loans,

with an initial Interest Period of

month(s):
	 	$	 
	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	(3)
	 	Amount of Eurodollar Rate Loans to

be converted to Base Rate Loans:
	 	$	 
	 	 	 	 	 	 	 	 	 	




     In the case of a conversion to or continuation of a Eurodollar Rate Loan,
the undersigned officer, to the best of his or her knowledge, and Company
certify that (a) no Event of Default or Default has occurred and is continuing,
and (b) the conversion or continuation date thereof is the expiration date of
such Loan’s Interest Period.



	 	 	 	 	 	 
	Date:	 	 	 	XO COMMUNICATIONS, INC.
	 	
	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	By:	 
	 	 	 	 	 	

	 	 	 	 	 	Name:
	 	 	 	 	 	Title:



A-1






 


     
EXHIBIT B TO

AMENDED AND RESTATED

CREDIT AND GUARANTY AGREEMENT


TERM LOAN NOTE



	 	 	 
	$[1]                    	 	
[2]                    , 2003



     FOR VALUE RECEIVED, XO COMMUNICATIONS, INC., a Delaware corporation
(“Company”), promises to pay to the order of [3]                     (“Payee”) or
its registered assigns the sum of (i) [1]                     DOLLARS
($[1]                    ), plus (ii) the Accrued Principal that is not evidenced by a
separate new note as contemplated by Section 2.6 of the Credit Agreement
referred to below in the installments referred to below.


     Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Amended and Restated Credit and Guaranty Agreement, dated as of January 16,
2003 (as it may be amended, supplemented or otherwise modified, the “Credit
Agreement”), by and among COMPANY, CERTAIN SUBSIDIARIES OF COMPANY, as
Guarantors, the Lenders party thereto from time to time, MIZUHO CORPORATE BANK,
LTD. (“Mizuho”), as Administrative Agent. Capitalized terms used herein not
otherwise defined herein shall have the meanings ascribed thereto in the Credit
Agreement.


     Company shall make principal payments on this Note as set forth in Section
2.10 of the Credit Agreement. The principal balance of this Note shall
increase by and include Accrued Principal, except to the extent that payment of
accrued interest is made by delivering a separate new note as a method of
paying accrued interest as contemplated by Section 2.6 of the Credit Agreement.
This Note is subject to mandatory prepayment and to prepayment at the option
of Company, each as provided in the Credit Agreement.


     This Note is one of the “Term Loan Notes” in the maximum aggregate
principal amount of $500,000,000 and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Term Loan
evidenced hereby was made and is to be repaid.


     All payments of principal and interest in respect of this Note shall be
made (i) in lawful money of the United States of America in same day funds at
the Administrative Agent’s
Principal Office or at such other place as shall be designated in writing
for such purpose in







	[1]	 	Lender’s Term Loans
	 
	[2]	 	Date of Issuance
	 
	[3]	 	Name of Lender


B-1






 





accordance with the terms of the Credit Agreement or (ii)
with respect to payments of accrued interest only, either by adding the amount
thereof to the then outstanding balance of this Note or in the form of delivery
of separate new notes in respect thereof as contemplated by Section 2.6 of the
Credit Agreement. Unless and until an Assignment Agreement effecting the
assignment or transfer of this Note shall have been accepted by Administrative
Agent and recorded in the Register, Company and Administrative Agent shall be
entitled to deem and treat Payee as the owner and holder of this Note and the
Loan evidenced hereby. Payee hereby agrees, by its acceptance hereof, that it
will make a notation hereon of all advances and all principal payments made
hereunder and of the date to which interest hereon has been paid; provided, the
failure to make any notation shall not limit or otherwise affect the
obligations of Company hereunder with respect to payments of principal of or
interest on this Note.


     THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.


     Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.


     The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.


     This Note is subject to restrictions on transfer or assignment as provided
in the Credit Agreement.


     No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligations of Company, which
are absolute and unconditional, to pay the principal of and interest on this
Note at the place, at the respective times, and in the currency herein
prescribed.


     Company promises to pay all costs and expenses, including reasonable
attorneys’ fees, all as provided in the Credit Agreement, incurred in the
collection and enforcement of this Note. Company and any endorsers of this Note
hereby consent to renewals and extensions of time at or after the maturity
hereof, without notice, and hereby waive diligence, presentment, protest,
demand and notice of every kind and, to the full extent permitted by law, the
right to plead any statute of limitations as a defense to any demand hereunder.


B-2






 


     IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.



	 	 	 	 	 
	 	 	XO COMMUNICATIONS, INC.
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



B-3






 


     
EXHIBIT C TO

AMENDED AND RESTATED

CREDIT AND GUARANTY AGREEMENT


COMPLIANCE CERTIFICATE


     THE UNDERSIGNED HEREBY CERTIFIES AS FOLLOWS:


     1.     I am the [assistant] treasurer of XO COMMUNICATIONS, INC., a Delaware
corporation (“Company”).


     2.     I have reviewed the terms of that certain Amended and Restated Credit
and Guaranty Agreement, dated as of January 16, 2003 (as it may be amended,
supplemented or otherwise modified, the “Credit Agreement”; the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among COMPANY, CERTAIN SUBSIDIARIES OF COMPANY, as Guarantors, the
Lenders party thereto from time to time, MIZUHO CORPORATE BANK, LTD.
(“Mizuho”), as Administrative Agent, and the terms of the other Credit
Documents, and I have made, or have caused to be made under my supervision, a
review in reasonable detail of the transactions and condition of Company and
its Subsidiaries during the accounting period covered by the attached financial
statements.


     3.     The examination described in paragraph 2 above did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
an Event of Default or Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth in a separate attachment, if any, to this
Certificate, describing in detail, the nature of the condition or event, the
period during which it has existed and the action which Company has taken, is
taking, or proposes to take with respect to each such condition or event.


     The foregoing certifications, together with the computations set forth in
the Attachment and the financial statements delivered with this Certificate in
support hereof, are made and delivered this                      day of
                     pursuant to Section 5.1(d) of the Credit Agreement.



	 	 	 	 	 
	 	 	XO COMMUNICATIONS, INC.
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title: [Assistant] Treasurer



C-1






 


     
ATTACHMENT TO

COMPLIANCE CERTIFICATE


FOR THE FISCAL [QUARTER] [YEAR] ENDING                                         .



	 	 	 	 	 	 	 	 	 
	1.	 	Certain Indebtedness Amounts	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	
(a)
	 	“Other Indebtedness” in the Period:
	 	 	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	
(b)
	 	Aggregate outstanding “Other Indebtedness”
	 	Actual:
	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	Permitted:
	$	10,000,000
	 	 	
(c)
	 	Aggregate outstanding Capital Leases:
	 	 	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	
(d)
	 	Aggregate outstanding Permitted Indebtedness:
	 	 	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	
(e)
	 	Aggregate Permitted Equipment Financings:
	 	 	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	
(f)
	 	Aggregate outstanding Acquired Debt:
	 	 	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	
(g)
	 	Sum of 1(c), 1(d), 1(e) and 1(f):
	 	Actual:
	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	Permitted:
	$	25,000,000
	 	 	 	 	 	 	 	 	 
	 	 	
(h)
	 	Aggregate amount of Indebtedness with respect to
the Exit Revolver
	 	Actual:
	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	Permitted:
	 	Amount on 1(k)
	 	 	 	 	 	 	 	 	 
	 	 	
(i)
	 	Aggregate Cash proceeds received by Company
with respect to the Rights
	 	 	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	
(j)
	 	Aggregate amount of permanent reductions in the
Exit Revolver commitments which are required
under the Exit Revolver as contemplated in
Sections 2.12(a), (b), (c), and(d)
	 	 	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	
(k)
	 	$200,000,000 minus the sum of 1(i) and 1(j)
	 	 	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	2.	 	Certain Liens Amounts	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Aggregate outstanding “Other Liens” in
accordance with Section 6.2(p) securing
Indebtedness:
	 	Actual:
	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	Permitted:
	$	10,000,000



C-2






 



	 	 	 	 	 	 	 	 	 
	3.	 	Certain Investments	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	
(a)
	 	Aggregate amount of Indebtedness incurred and
Capital Stock issued and or Excess Common
Equity Proceeds expended in respect of all
acquisitions since the Closing Date:
	 	Actual:
	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	Permitted:
	$	50,000,000
	 	 	
(b)
	 	Aggregate outstanding ordinary course loans and advances to
employees of Company and Subsidiaries:
	 	Actual:
	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	Permitted:
	$	2,000,000
	 	 	 	 	 	 	 	 	 
	4.	 	Consolidated Excess Cash Flow	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	
(a)
	 	Consolidated EBITDA in Period:
	 	 	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	
(b)
	 	Consolidated Working Capital Adjustment in Period:
	 	 	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	
(c)
	 	Repayments in Period of Consolidated Total Debt
(excluding repayments (i) in connection with
refinancings and (ii) from the proceeds of Asset
Sales:
	 	 	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	
(d)
	 	Consolidated Capital Expenditures in Period (net
of proceeds of any related financings with respect
to such expenditures):
	 	 	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	
(e)
	 	Consolidated Cash Interest Expense in Period:
	 	 	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	
(f)
	 	All regularly scheduled cash dividend payments

on Acquired Preferred Stock in Period
	 	 	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	
(g)
	 	The provision in Period for taxes of Company and
its Subsidiaries and payable in cash and, to the
extent Company failed in good faith to reserve
funds for the same, with respect to prior periods:
	 	 	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	
(h)
	 	The sum of 4(a) and 4(b):
	 	 	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	
(i)
	 	The sum of 4(c), 4(d), 4(e), 4(f) and 4(g):
	 	 	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	
(j)
	 	4(h) minus 4(i):
	 	 	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	5.	 	Unrestricted Cash Balance:
	 	Actual:
	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	Required:
	$	 
	 	 	 	 	 	 	 	 	




C-3






 



	 	 	 	 	 	 	 	 	 
	6.	 	Consolidated EBITDA:
	 	Actual:
	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	Required:
	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	7.	 	Capital Expenditures:	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	
(a)
	 	Consolidated Capital Expenditures in fiscal year:
	 	Actual:
	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	Permitted:
	 	Amount permitted
	 	 	 	 	 	 	 	 	on 7(e)
	 	 	
(b)
	 	Amount of Capital Expenditures allowed for previous fiscal year
minus actual Capital Expenditures for such fiscal year ($50 million
maximum):
	 	 	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	
(c)
	 	$300,000,000 minus actual Capital Expenditures for fiscal year 2002
($50 million maximum) (for fiscal year 2003 only):
	 	 	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	
(d)
	 	Amount of Capital Expenditures permitted for fiscal year:
	 	 	$	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	
(e)
	 	7(b) or 7(c) (as applicable) plus 7(d):
	 	Permitted:
	$	 
	 	 	 	 	 	 	 	 	




C-4






 


     
EXHIBIT D TO

AMENDED AND RESTATED

CREDIT AND GUARANTY AGREEMENT


OPINIONS OF COUNSEL


[TO COME]


D-1






 


     
EXHIBIT E TO

AMENDED AND RESTATED

CREDIT AND GUARANTY AGREEMENT


ASSIGNMENT AGREEMENT


     This ASSIGNMENT AGREEMENT, dated as of Effective Date as set forth on
Schedule I (this “Agreement”), by and between the parties signatory hereto and
designated as Assignor (“Assignor”) and Assignee (“Assignee”).


RECITALS:


     WHEREAS, Assignor is party to the Amended and Restated Credit and Guaranty
Agreement, dated as of January 16, 2003 (as it may be amended, supplemented or
otherwise modified, the “Credit Agreement”; the terms defined therein and not
otherwise defined herein being used herein as therein defined), by and among
COMPANY, CERTAIN SUBSIDIARIES OF COMPANY, as Guarantors, the Lenders party
thereto from time to time, and MIZUHO CORPORATE BANK, LTD. (“Mizuho”), as
Administrative Agent; and


     WHEREAS, Assignor desires to sell and assign to Assignee, and Assignee
desires to purchase and assume from Assignor, certain rights and obligations of
Assignor under the Credit Agreement.


     NOW, THEREFORE, in consideration of the agreements and covenants herein
contained, the parties hereto agree as follows:


     Section 1. Assignment and Assumption. Subject to the terms and
conditions hereof, as of the Effective Date as set forth on Schedule I,
Assignor sells and assigns to Assignee, without recourse, representation or
warranty (except as expressly set forth herein), and Assignee purchases and
assumes from Assignor, the percentage interest specified on Schedule I in all
of the rights and obligations with respect to the outstanding Term Loans of
Lenders arising under the Credit Agreement and the other Credit Documents (the
“Assigned Share”). In consideration of such assignment, Assignee hereby agrees
to pay to Assignor on the date set forth on Schedule I as the “Settlement
Date”, the principal amount of any outstanding loans included within the
Assigned Share (such principal amount referred to herein as the “Purchase
Price”), such payment to be made by wire transfer of immediately available
funds. Upon the occurrence of the Effective Date: (a) the Assignee shall have
the rights and obligations of a “Lender” to the extent of the Assigned Share
and shall thereafter be a party to the Credit Agreement and a “Lender” for all
purposes of the Credit Documents; and (b) Assignor shall, to the extent of the
Assigned Share, relinquish its rights (other than any rights which survive the
termination of the Credit Agreement under Section 10.8 thereof) and be released
from its obligations under the Credit Agreement. From and after the Effective
Date, Administrative Agent shall make all payments under the Credit Agreement
in respect of the Assigned Share (i) in the case of any interest and fees that
shall have accrued prior to the Settlement Date, to Assignor, and (ii) in all
other cases,


E-1






 



to Assignee; provided, Assignor and Assignee shall make payments directly
to each other to the extent necessary to effect any appropriate adjustments in
any amounts distributed to Assignor and/or Assignee by Administrative Agent
under the Credit Documents in respect of the Assigned Share in the event that,
for any reason whatsoever, the payment of consideration contemplated by this
Section 1 occurs on a date other than the Settlement Date.


     Section 2. Effective Date. Notwithstanding anything herein to the
contrary, the Effective Date shall not be deemed to have occurred until each of
the following conditions are satisfied, as determined in the reasonable
judgment of each of Assignor, Assignee and Administrative Agent: (a) the
execution of a counterpart hereof by each of Assignor and Assignee; (b) the
payment of the Purchase Price on the Settlement Date; (c) if applicable, the
receipt by Administrative Agent of the processing and recordation fee referred
to in Section 10.6 of the Credit Agreement; (d) in the event Assignee is a
Non-US Lender, the delivery by Assignee to Administrative Agent of such forms,
certificates or other evidence with respect to United States federal income tax
withholding matters as Assignee may be required to deliver to Administrative
Agent pursuant to Section 2.18(c) of the Credit Agreement; (e) the receipt by
Administrative Agent of originals or telefacsimiles of executed counterparts
hereof; and (f) the recordation by Administrative Agent in the Register of the
pertinent information regarding this Assignment pursuant to Section 10.6 of the
Credit Agreement.


     Section 3. Certain Representations, Warranties and Agreements. (a)
Assignor represents and warrants to Assignee that (i) Assignor is the legal and
beneficial owner of the Assigned Share, free and clear of any adverse claim;
and (ii) Schedule I sets forth the aggregate amount of the Term Loans as of the
Effective Date.


     (b)  Assignee represents and warrants to Assignor that (i) it is an
Eligible Assignee and that it has experience and expertise in the making or
purchasing of loans and commitment such as the Term Loans; (ii) it has acquired
the Assigned Share for its own account in the ordinary course of its business
and without a view to distribution of the Term Loans within the meaning of the
Securities Act or the Exchange Act or other federal securities laws (it being
understood that, subject to the provisions of Section 10.6 of the Credit
Agreement, the disposition of the Assigned Share or any interests therein shall
at all times remain within its exclusive control); (iii) it has received,
reviewed and approved a copy of the Credit Agreement (including all Exhibits
and Schedules thereto); and (iv) it has received from Assignor such financial
information regarding Company and its Subsidiaries as is available to Assignor
and as Assignee has requested, that it has made its own independent
investigation of the financial condition and affairs of Company and its
Subsidiaries in connection with the assignment evidenced by this Agreement, and
that it has made and shall continue to make its own appraisal of the
creditworthiness of Company and its Subsidiaries. Assignor shall have no duty
or responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Assignee or to provide
Assignee with any other credit or other information with respect thereto,
whether coming into its possession before the making of the initial Term Loans
or at any time or times thereafter, and Assignor shall not have any
responsibility with respect to the accuracy of or the completeness of any
information provided to Assignee.


E-2






 


     (c)  Each party to this Agreement represents and warrants to the other
party hereto that it has full power and authority to enter into this Agreement
and to perform its obligations hereunder in accordance with the provisions
hereof, that this Agreement has been duly authorized, executed and delivered by
such party and that this Agreement constitutes a legal, valid and binding
obligation of such party, enforceable against such party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors’ rights generally and by general principles of equity.


     (d)  Assignor shall not be responsible to Assignee for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of any of the Credit Documents or for any representations,
warranties, recitals or statements made therein or made in any written or oral
statements or in any financial or other statements, instruments, reports or
certificates or any other documents furnished or made by Assignor to Assignee
or by or on behalf of Company or any of its Subsidiaries to Assignor or
Assignee in connection with the Credit Documents and the transactions
contemplated thereby or for the financial condition or business affairs of
Company or any other Person liable for the payment of any Obligations, nor
shall Assignor be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained in any of the Credit Documents or as to the use of the proceeds of
the Term Loans or as to the existence or possible existence of any Event of
Default or Default.


     Section 4. Miscellaneous. Assignor and Assignee each agrees from time to
time, upon request of such other party, to take such additional actions and to
execute and deliver such additional documents and instruments as such other
party may reasonably request to effect the transactions contemplated by, and to
carry out the intent of, this Agreement. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated, except by an
instrument in writing signed by the party (including, if applicable, any party
required to evidence its consent to or acceptance of this Agreement) against
whom enforcement of such change, waiver, discharge or termination is sought.
Any notice or other communication herein required or permitted to be given
shall be given pursuant to Section 10.1 of the Credit Agreement, and all for
purposes thereof, the notice address of Assignee shall be the address as set
forth on the signature page hereof. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby. This
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their respective successors and assigns. This Agreement may be
executed in one or more counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.


     THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.


E-3






 


     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the Effective Date by their respective
officers thereunto duly authorized.



	 	 	 	 	 	 	 	 	 
	
[ASSIGNOR], as Assignor
	 	 	 	[ASSIGNEE], as Assignee
	 	 	 	 	 	 	 	 	 
	By:	 	 	 	 	 	By:	 	 
	 	


	 	 	 	 	

	 	    Name:	 	 	 	 	    Name:
	 	   
Title:	 	 	 	 	   
Title:
	 	 	 	 	 	 	 	 	 
	[Consented to as of the Effective
Date][1]:
	 	 	 	Consented to and recorded as of
          ,           
	 	 	 	 	 	 	 	 	 
	[COMPANY], as Company
	 	 	 	[NAME OF ADMINISTRATIVE

AGENT], as Administrative Agent
	 	 	 	 	 	 	 	 	 
	By:	 	 	 	 	 	By:	 	 
	 	


	 	 	 	 	

	 	    Name:	 	 	 	 	    Name:
	 	   
Title:	 	 	 	 	   
Title:
	 	 	 	 	 	 	 	 	 







[1] If required



E-4






 





     
SCHEDULE I TO

ASSIGNMENT AGREEMENT



	 	 	 	 
	1.	  Effective Date:	$	                              
	 	 	 	 	 
	2.	  
Settlement Date:
	$	                              
	 	 	 	 	 
	3.	  
Assigned Share:	 	 




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Aggregate	 	Principal	 	Percentage
	 	 	 	 	 	 	 	 	 	 	Amount of	 	Amount	 	of Facility
	 	 	Facility	 	 	 	 	 	Term Loans	 	Assigned	 	Assigned
	 	 	
	 	 	 	 	 	
	 	
	 	

	Term Loans
	 	 	 	 	 	 	 	 	$	 	—	 	$	 	—	 	 	 	—	%




	 	 	 	 
	4.	Payment Instructions:	 	 	 
	 	 	 	 	 
	 	
ASSIGNOR:
	 	 	ASSIGNEE:
	 	 	 	 	 
	 	
Attention:
	 	 	Attention:
	 	 	 	 	 
	5.	
Notice Instructions:	 	 	 
	 	 	 	 	 
	 	
ASSIGNOR:
	 	 	ASSIGNEE:
	 	 	 	 	 
	 	
Attention:
	 	 	Attention:



E-5






 


     
EXHIBIT F TO

AMENDED AND RESTATED

CREDIT AND GUARANTY AGREEMENT


CERTIFICATE RE NON-BANK STATUS


     Reference is hereby made to that certain Amended and Restated Credit and
Guaranty Agreement, dated as of January 16, 2003 (as it may be amended,
supplemented or otherwise modified, the “Credit Agreement”; the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among COMPANY, CERTAIN SUBSIDIARIES OF COMPANY, as Guarantors, the
Lenders party thereto from time to time, and MIZUHO CORPORATE BANK, LTD.
(“Mizuho”), as Administrative Agent. Pursuant to Section 2.18(c) of the Credit
Agreement, the undersigned hereby certifies that it is not a “bank” or other
Person described in Section 881(c)(3) of the Internal Revenue Code of 1986, as
amended.



	 	 	 	 	 
	 	 	[NAME OF LENDER]
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	

	 	 	 	Name:
	 	 	 	Title:



F-1






 


     
EXHIBIT G TO

AMENDED AND RESTATED

CREDIT AND GUARANTY AGREEMENT


CLOSING DATE CERTIFICATE


     THE UNDERSIGNED HEREBY CERTIFY AS FOLLOWS:


     1.     We are, respectively, the general counsel and the assistant treasurer
of XO COMMUNICATIONS, INC., a Delaware corporation (“Company”).


     2.     Pursuant to Section 2.1 of the Amended and Restated Credit and Guaranty
Agreement, dated as of January 16, 2003 (as it may be amended, supplemented or
otherwise modified, the “Credit Agreement’’; the terms defined therein and not
otherwise defined herein being used herein as therein defined), by and among
COMPANY, CERTAIN SUBSIDIARIES OF COMPANY, as Guarantors, the Lenders party
thereto from time to time, and MIZUHO CORPORATE BANK, LTD. (“Mizuho”), as
Administrative Agent, the following Term Loans to Company are outstanding on
the Closing Date:



	 	 	 	 	 	 	 	 	 
	 	 	
(a)
	 	 	 	Term Loans:	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	(i)
	 	Amount of Base Rate Loans:
	 	$                 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	(ii)
	 	Amount of Eurodollar Rate Loans
with an initial Interest Period of [one month]:
	 	$                 



     3.     We have reviewed the terms of Sections 3 and 4 of the Credit Agreement,
and the definitions and provisions contained in such Credit Agreement relating
to such subsections, and in our opinion we have made, or have caused to be made
under our supervision, such examination or investigation as is necessary to
enable us to express an informed opinion as to the matters referred to herein.


     4.     Based upon our review and examination described in paragraph (3) above,
we certify that as of the date hereof: (a) no injunction or restraining order
has been issued and no hearing to cause an injunction or other restraining
order is pending or noticed with respect to any action, suit or proceeding
seeking to enjoin or otherwise prevent the consummation of, or to recover any
damages or obtain relief as a result of, the transactions contemplated by the
Credit Agreement or the making of any Credit Extension; (b) each Credit Party
has performed all agreements and satisfied all conditions which the Credit
Agreement or the Credit Documents provide shall be performed or satisfied by it
on or before the Closing Date; and (c) no event has occurred or is continuing
as of the date hereof, or will result from the consummation of the deemed
borrowing of the Term Loans on the date hereof, that would constitute an Event
of Default or a Default.


     5.     All Governmental Authorizations and all other authorizations, approvals
and consents of any other Person required by the Restructuring Transaction
Documents or to


G-1






 



consummate the Restructuring Transactions have been obtained and are in full
force and effect, except as shall have been waived in accordance with the terms
of the Credit Agreement.


     6.     On the Closing Date, (i) all of the conditions to effecting or
consummating the Restructuring Transactions set forth in the Restructuring
Transaction Documents have been duly satisfied or, with the consent of
Administrative Agent or Requisite Lenders (which consent shall not be
unreasonably withheld), waived, and (ii) the Restructuring Transactions have
been consummated in accordance with the Restructuring Transaction Documents and
all applicable laws.


     7.     Each Credit Party has requested (i) Willkie Farr & Gallagher, counsel
for Credit Parties and (ii) Kelley Drye & Warren LLP, FCC counsel for Credit
Parties, to deliver to the Administrative Agent and any Lender requesting same
in writing on the Closing Date favorable written opinions setting forth
substantially the matters in the opinions designated in Exhibit D annexed to
the Credit Agreement.


     The foregoing certifications are made and delivered as of January 16,
2003.



	 	 	 	 	 
	 	 	XO COMMUNICATIONS, INC.
	 	 	 	 	 
	 	 	

	 	 	
Name:	 	 
	 	 	
Title:	 	 
	 	 	 	 	 
	 	 	

	 	 	
Name:	 	 
	 	 	
Title:	 	 



G-2






 


     
EXHIBIT H TO
AMENDED AND RESTATED
CREDIT AND GUARANTY AGREEMENT


COUNTERPART AGREEMENT


     This COUNTERPART AGREEMENT, dated          is delivered pursuant to
the Amended and Restated Credit and Guaranty Agreement, dated as of January 16,
2003 (as it may be amended, supplemented or otherwise modified, the “Credit
Agreement”; the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among COMPANY, CERTAIN SUBSIDIARIES OF
COMPANY, as Guarantors, the Lenders party thereto from time to time and MIZUHO
CORPORATE BANK, LTD. (“Mizuho”), as Administrative Agent.


     1.     Pursuant to Section 5.9 of the Credit Agreement, the undersigned
hereby:


     (a)  agrees that this Counterpart Agreement may be attached to the Credit
Agreement and that by the execution and delivery hereof, the undersigned
becomes a Guarantor under the Credit Agreement and agrees to be bound by all of
the terms thereof;


     (b)  represents and warrants that each of the representations and
warranties set forth in the Credit Agreement and each other Credit Document and
applicable to the undersigned are true and correct both before and after giving
effect to this Counterpart Agreement, except to the extent that any such
representation and warranty relates solely to any earlier date, in which case
such representation and warranty is true and correct as of such earlier date;


     (c)  no event has occurred or is continuing as of the date hereof, or will
result from the transactions contemplated hereby on the date hereof, that would
constitute an Event of Default or a Default;


     (d)  agrees, subject to the provisions of Section 7.2 of the Credit
Agreement, to irrevocably and unconditionally guaranty the due and punctual
payment in full of all Obligations when the same shall become due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a))
and in accordance with Section 7 of the Credit Agreement; and


     (e)  subject to the terms and conditions of the Amended and Restated Pledge
and Security Agreement, Grantor hereby (i) agrees that this Counterpart
Agreement may be attached to the Amended and Restated Pledge and Security
Agreement, (ii) agrees that by the execution and delivery hereof the
undersigned becomes a Grantor under the Amended and Restated Pledge and
Security Agreement and agrees that such Grantor will comply with all the terms
and conditions of the Amended and Restated Pledge and Security Agreement as if
it were an original signatory thereto, and (iii) grants to Secured Party a
security interest in all of Grantor’s right, title and interest in and to its
real, personal and mixed property, [including the Investment Property listed on
Supplemental Schedule [1(a)] attached hereto and the Intellectual Property
listed on Supplemental Schedule [1(c)] attached hereto], in each case whether
now or hereafter existing or


H-1






 



in which Grantor now has or hereafter acquires an interest and wherever
the same may be located. All such real, personal and mixed property[, including
such Investment Property and Intellectual Property] shall be deemed to be part
of the Collateral and hereafter subject to each of the terms and conditions of
the Amended and Restated Pledge and Security Agreement.


     2.     The undersigned agrees from time to time, upon request of
Administrative Agent, to take such additional actions and to execute and
deliver such additional documents and instruments as Administrative Agent may
request to effect the transactions contemplated by, and to carry out the intent
of, this Agreement. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated, except by an instrument in writing signed by
the party (including, if applicable, any party required to evidence its consent
to or acceptance of this Agreement) against whom enforcement of such change,
waiver, discharge or termination is sought. Any notice or other communication
herein required or permitted to be given shall be given in pursuant to Section
10.1 of the Credit Agreement, and all for purposes thereof, the notice address
of the undersigned shall be the address as set forth on the signature page
hereof. In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.


     THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.


     IN WITNESS WHEREOF, the undersigned has caused this Counterpart Agreement
to be duly executed and delivered by its duly authorized officer as of
     .



	 	 	 	 	 
	 	[NAME OF SUBSIDIARY]
	 
	 	 	 	 	 
	 
	 	By:
	 	 	

	 
	 	Name:
	 
	 	Title:






	 
	Address for Notices:
	                                        	 
	                                        	 
	                                        	 




H-2







 



EXHIBIT I TO

AMENDED AND RESTATED

CREDIT AND GUARANTY AGREEMENT


AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT



K-1






 



EXECUTION VERSION



AMENDED AND RESTATED



PLEDGE AND SECURITY AGREEMENT



dated as of January 16, 2003



among



XO COMMUNICATIONS, INC.,



CERTAIN SUBSIDIARIES OF



XO COMMUNICATIONS, INC., as Grantors,



and



MIZUHO CORPORATE BANK, LTD., as Secured Party,



 






 




Table of Contents




	 	 	 	 	 	 
	 	 	 	Page
	 	 	 	 
	SECTION 1. DEFINITIONS; GRANT OF SECURITY
	 	 	1	 
	 	1.1. General Definitions
	 	 	1	 
	 	1.2. Definitions; Interpretation
	 	 	7	 
	SECTION 2. GRANT OF SECURITY
	 	 	8	 
	 	2.1. Grant of Security
	 	 	8	 
	 	2.2. Certain Limited Exclusions
	 	 	9	 
	SECTION 3. SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE
	 	 	9	 
	 	3.1. Security for Obligations
	 	 	9	 
	 	3.2. Continuing Liability under Collateral
	 	 	10	 
	SECTION 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS
	 	 	10	 
	 	4.1. Generally
	 	 	10	 
	 	4.2. Equipment and Inventory
	 	 	13	 
	 	4.3. Receivables
	 	 	14	 
	 	4.4. Investment Related Property
	 	 	16	 
	 	4.5. Material Contracts
	 	 	22	 
	 	4.6. Letter of Credit Rights
	 	 	24	 
	 	4.7. Intellectual Property
	 	 	24	 
	 	4.8. Commercial Tort Claims
	 	 	27	 
	SECTION 5. ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES; ADDITIONAL GRANTORS
	 	 	27	 
	 	5.1. Access; Right of Inspection
	 	 	27	 
	 	5.2. Further Assurances
	 	 	27	 



i






 



Table of Contents

(continued)




	 	 	 	 	 	 
	 	 	 	Page
	 	 	 	 
	 	5.3. Additional Grantors
	 	 	28	 
	SECTION 6. SECURED PARTY APPOINTED ATTORNEY-IN-FACT
	 	 	29	 
	 	6.1. Power of Attorney
	 	 	29	 
	 	6.2. No Duty on the Part of Secured Party
	 	 	30	 
	 	6.3. Ratification
	 	 	30	 
	SECTION 7. REMEDIES
	 	 	30	 
	 	7.1. Generally
	 	 	30	 
	 	7.2. Application of Proceeds
	 	 	32	 
	 	7.3. Sales on Credit
	 	 	32	 
	 	7.4. Deposit Accounts
	 	 	32	 
	 	7.5. Investment Related Property
	 	 	32	 
	 	7.6. Intellectual Property
	 	 	33	 
	 	7.7. Cash Proceeds
	 	 	35	 
	 	7.8. Release of Liens
	 	 	35	 
	SECTION 8. COLLATERAL AGENT
	 	 	36	 
	SECTION 9. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS
	 	 	36	 
	SECTION 10. STANDARD OF CARE; SECURED PARTY MAY PERFORM
	 	 	36	 
	SECTION 11. MISCELLANEOUS
	 	 	37	 



ii






 



Table of Contents

(continued)



	 	 	 	 	 	 
	 	 	 	 
	 	 	 	 
	SCHEDULE 4.1  — GENERAL INFORMATION
	 	 	 	 
	SCHEDULE 4.2  — LOCATION OF EQUIPMENT AND INVENTORY
	 	 	 	 
	SCHEDULE 4.4  — INVESTMENT RELATED PROPERTY
	 	 	 	 
	SCHEDULE 4.5  — MATERIAL CONTRACTS
	 	 	 	 
	SCHEDULE 4.6  — DESCRIPTION OF LETTERS OF CREDIT
	 	 	 	 
	SCHEDULE 4.7  — INTELLECTUAL PROPERTY
	 	 	 	 
	SCHEDULE 4.8  — COMMERCIAL TORT CLAIMS
	 	 	 	 
	EXHIBIT A — PLEDGE SUPPLEMENT
	 	 	 	 
	EXHIBIT B — FORM OF COLLATERAL ACCOUNT CONTROL AGREEMENT
	 	 	 	 



iii






 


          This AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, dated as of
January 16, 2003 (this “Agreement”), between EACH OF THE UNDERSIGNED, whether
as an original signatory hereto or as an Additional Grantor (as herein defined)
(each, a “Grantor”), and MIZUHO CORPORATE BANK, LTD., as agent for the Lenders
and the Lender Counterparties (in such capacity as agent, the “Secured Party”).



RECITALS:



          WHEREAS, reference is made to that certain Amended and Restated Credit and
Guaranty Agreement, dated as of the date hereof (as it may be amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), by and among XO COMMUNICATIONS, INC., a Delaware corporation
(“Company”), CERTAIN SUBSIDIARIES OF THE COMPANY, as Guarantors (the
“Guarantors”), the lenders party thereto from time to time (the “Lenders”), and
MIZUHO CORPORATE BANK, LTD., as Administrative Agent;



          WHEREAS, on the terms and subject to the conditions thereof, the Credit
Agreement amends and restates a certain Existing Credit Agreement (as defined
in the Credit Agreement), pursuant to which the Company and certain Guarantors
(as defined in the Existing Credit Agreement) executed and delivered a Pledge
and Security Agreement to the Administrative Agent or its successor in interest
(the “Existing Security Agreement”);



          WHEREAS, subject to the terms and conditions of the Credit Agreement,
certain Grantors may enter into one or more Hedge Agreements with one or more
Lender Counterparties (as such terms are defined in the Credit Agreement); and



          WHEREAS, in consideration of the accommodations of Lenders and Lender
Counterparties as set forth in the Credit Agreement and the Hedge Agreements,
respectively, each Grantor has agreed to secure such Grantor’s obligations
under the Credit Documents and the Hedge Agreements as set forth herein, and
subject to the limitations set forth herein;



          WHEREAS, on the terms and subject to the conditions hereof, the parties
hereto wish to amend and restate the Existing Security Agreement;



          NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, each Grantor and the Secured Party
agree that the Existing Security Agreement shall be amended and restated as
follows:



SECTION 1. DEFINITIONS; GRANT OF SECURITY.


     1.1. General Definitions. In this Agreement, the following terms shall
have the following meanings:


          “Account Debtor” shall mean each Person who is obligated on a Receivable
or any Supporting Obligation related thereto.



          “Accounts” shall mean all “accounts” as defined in Article 9 of the UCC.



 






 




          “Agreement” shall have the meaning set forth in the preamble.



          “Additional Grantors” shall have the meaning assigned in Section 5.3.



          “Assigned Agreements” shall mean all agreements and contracts to which
such Grantor is a party as of the date hereof, or to which such Grantor becomes
a party after the date hereof, including, without limitation, each Material
Contract, as each such agreement may be amended, supplemented or otherwise
modified from time to time.



          “Cash Proceeds” shall have the meaning assigned in Section 7.7.



          “Chattel Paper” shall mean all “chattel paper” as defined in Article 9 of
the UCC, including, without limitation, “electronic chattel paper” or “tangible
chattel paper”, as each term is defined in Article 9 of the UCC.



          “Collateral” shall have the meaning assigned in Section 2.1.



          “Collateral Records” shall mean books, records, ledger cards, files,
correspondence, customer lists, blueprints, technical specifications, manuals,
computer software, computer printouts, tapes, disks and related data processing
software and similar items that at any time evidence or contain information
relating to any of the Collateral or are otherwise necessary or helpful in the
collection thereof or realization thereupon.



          “Collateral Support” shall mean all property (real or personal) assigned,
hypothecated or otherwise securing any Collateral and shall include any
security agreement or other agreement granting a lien or security interest in
such real or personal property.



          “Collection Account” shall mean any account established at a financial
institution designated by the Secured Party in the name of “XO Communications,
Inc. — Mizuho Corporate Bank, Ltd., as Administrative Agent”, together with
any and all successor, replacement or substituted accounts thereto.



          “Commercial Tort Claims” shall mean all “commercial tort claims” as
defined in Article 9 of the UCC, including, without limitation, all commercial
tort claims listed on Schedule 4.8 (as such schedule may be amended or
supplemented from time to time).



          “Commodities Accounts” (i) shall mean all “commodity accounts” as defined
in Article 9 of the UCC and (ii) shall include, without limitation, all of the
accounts listed on Schedule 4.4 under the heading “Commodities Accounts” (as
such schedule may be amended or supplemented from time to time).



          “Company” shall have the meaning set forth in the recitals.



          “Controlled Foreign Corporation” shall mean “controlled foreign
corporation” as defined in the Tax Code.



          “Copyright Licenses” shall mean any and all agreements providing for the
granting of any right in or to Copyrights (whether such Grantor is licensee or
licensor

2






 



thereunder) including, without limitation, each agreement referred to in
Schedule 4.7(B) (as such schedule may be amended or supplemented from time to
time).



          “Copyrights” shall mean all United States, state and foreign copyrights,
all mask works fixed in semi-conductor chip products (as defined under 17
U.S.C. 901 of the U.S. Copyright Act), whether registered or unregistered, now
or hereafter in force throughout the world, all registrations and applications
therefor including, without limitation, the applications referred to in
Schedule 4.7(A) (as such schedule may be amended or supplemented from time to
time), all rights corresponding thereto throughout the world, all extensions
and renewals of any thereof, the right to sue for past, present and future
infringements of any of the foregoing, and all proceeds of the foregoing,
including, without limitation, licenses, royalties, income, payments, claims,
damages, and proceeds of suit.



          “Credit Agreement” shall have the meaning set forth in the recitals.



          “Deposit Accounts” (i) shall mean all “deposit accounts” as defined in
Article 9 of the UCC and in any event shall include any demand, time, savings,
passbook or title account maintained with a depository institution and (ii)
shall include, without limitation, all of the accounts listed on Schedule 4.4
under the heading “Deposit Accounts” (as such schedule may be amended or
supplemented from time to time).



          “Documents” shall mean all “documents” as defined in Article 9 of the UCC.



          “Equipment” shall mean: (i) all “equipment” as defined in Article 9 of
the UCC, (ii) all machinery, manufacturing equipment, data processing
equipment, computers, office equipment, furnishings, furniture, appliances,
fixtures and tools (in each case, regardless of whether characterized as
equipment under the UCC) and (iii) all accessions or additions thereto, all
parts thereof, whether or not at any time of determination incorporated or
installed therein or attached thereto, and all replacements therefor, wherever
located, now or hereafter existing, including any fixtures.



          “Event of Default” shall mean an Event of Default as defined in the Credit
Agreement.



          “General Intangibles” (i) shall mean all “general intangibles” as defined
in Article 9 of the UCC and (ii) shall include, without limitation, all
interest rate or currency protection or hedging arrangements, all tax refunds,
all licenses, permits, concessions and authorizations, all Assigned Agreements
and all Intellectual Property (in each case, regardless of whether
characterized as general intangibles under the UCC).



          “Goods” (i) shall mean all “goods” as defined in Article 9 of the UCC and
(ii) shall include, without limitation, all Inventory and Equipment (in each
case, regardless of whether characterized as goods under the UCC).



          “Grantors” shall have the meaning set forth in the preamble.



          “Instruments” shall mean all “instruments” as defined in Article 9 of the
UCC.



3






 


          “Insurance” shall mean: (i) all insurance policies covering any or all of
the Collateral (regardless of whether the Secured Party is the loss payee
thereof) and (ii) any key man life insurance policies.



          “Intellectual Property” shall mean, collectively, the Copyrights, the
Copyright Licenses, the Patents, the Patent Licenses, the Trademarks, the
Trademark Licenses, the Trade Secrets, and the Trade Secret Licenses and in any
event shall include all present and future rights, priorities and privileges
relating to intellectual property arising under United States, multinational or
foreign laws or otherwise.



          “Inventory” shall mean: (i) all “inventory” as defined in Article 9 of
the UCC and (ii) all goods held for sale or lease or to be furnished under
contracts of service or so leased or furnished, all raw materials, work in
process, finished goods, and materials used or consumed in the manufacture,
packing, shipping, advertising, selling, leasing, furnishing or production of
such inventory or otherwise used or consumed in any Grantor’s business; all
goods in which any Grantor has an interest in mass or a joint or other interest
or right of any kind; and all goods which are returned to or repossessed by any
Grantor, all computer programs embedded in any goods and all accessions thereto
and products thereof (in each case, regardless of whether characterized as
inventory under the UCC).



          “Investment Accounts” shall mean the Securities Accounts, Commodities
Accounts and Deposit Accounts.



          “Investment Related Property” shall mean: (i) all “investment property”
(as such term is defined in Article 9 of the UCC) and (ii) all of the following
(regardless of whether classified as investment property under the UCC): all
Pledged Equity Interests, Pledged Debt, the Investment Accounts and
certificates of deposit.



          “Lender” shall have the meaning set forth in the recitals.



          “Letter of Credit Right” shall mean “letter-of-credit right” as defined in
Article 9 of the UCC.



          “Money” shall mean “money” as defined in the UCC.



          “Non-Assignable Contract” shall mean any agreement, contract or license to
which any Grantor is a party that by its terms purports to restrict or prevent
the assignment or granting of a security interest therein (either by its terms
or by any federal or state statutory prohibition or otherwise irrespective of
whether such prohibition or restriction is enforceable under Sections 9-406
through 409 of the UCC).



          “Patent Licenses” shall mean all agreements providing for the granting of
any right in or to Patents (whether such Grantor is licensee or licensor
thereunder) including, without limitation, each agreement referred to in
Schedule 4.7(D) (as such schedule may be amended or supplemented from time to
time).



          “Patents” shall mean all United States, state and foreign patents and
applications for letters patent throughout the world, including, but not
limited to each patent and patent

4






 



application referred to in Schedule 4.7(C) (as such schedule may be
amended or supplemented from time to time), all reissues, divisions,
continuations, continuations-in-part, extensions, renewals, and reexaminations
of any of the foregoing, all rights corresponding thereto throughout the world,
and all proceeds of the foregoing including, without limitation, licenses,
royalties, income, payments, claims, damages, and proceeds of suit and the
right to sue for past, present and future infringements of any of the
foregoing.



          “Payment Intangible” shall have the meaning specified in Article 9 of the
UCC.



          “Pledged Debt” shall mean all Indebtedness owed to such Grantor,
including, without limitation, all Indebtedness described on Schedule 4.4(A)
under the heading “Pledged Debt” (as such schedule may be amended or
supplemented from time to time), issued by the obligors named therein, the
instruments evidencing such Indebtedness, and all interest, cash, instruments
and other property or proceeds from time to time received or otherwise
distributed in respect of or in exchange for any or all of such Indebtedness.



          “Pledged Equity Interests” shall mean all Pledged Stock, Pledged LLC
Interests, Pledged Partnership Interests and Pledged Trust Interests.



          “Pledged LLC Interests” shall mean all interests in any limited liability
company including, without limitation, all limited liability company interests
listed on Schedule 4.4(A) under the heading “Pledged LLC Interests” (as such
schedule may be amended or supplemented from time to time) and the
certificates, if any, representing such limited liability company interests and
any interest of such Grantor on the books and records of such limited liability
company or on the books and records of any securities intermediary pertaining
to such interest and all dividends, distributions, cash, warrants, rights,
options, instruments, securities and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such limited liability company interests.



          “Pledged Partnership Interests” shall mean all interests in any general
partnership, limited partnership, limited liability partnership or other
partnership including, without limitation, all partnership interests listed on
Schedule 4.4(A) under the heading “Pledged Partnership Interests” (as such
schedule may be amended or supplemented from time to time) and the
certificates, if any, representing such partnership interests and any interest
of such Grantor on the books and records of such partnership or on the books
and records of any securities intermediary pertaining to such interest and all
dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such partnership interests.



          “Pledged Trust Interests” shall mean all interests in a Delaware business
trust or other trust including, without limitation, all trust interests listed
on Schedule 4.4(A) under the heading “Pledged Trust Interests” (as such
schedule may be amended or supplemented from time to time) and the
certificates, if any, representing such trust interests and any interest of
such Grantor on the books and records of such trust or on the books and records
of any securities intermediary pertaining to such interest and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received,


5






 



receivable or otherwise distributed in respect of or in exchange for any
or all of such trust interests.



          “Pledged Stock” shall mean all shares of capital stock owned by such
Grantor, including, without limitation, all shares of capital stock described
on Schedule 4.4(A) under the heading “Pledged Stock” (as such schedule may be
amended or supplemented from time to time), and the certificates, if any,
representing such shares and any interest of such Grantor in the entries on the
books of the issuer of such shares or on the books of any securities
intermediary pertaining to such shares, and all dividends, distributions, cash,
warrants, rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares.



          “Pledge Supplement” shall mean any supplement to this agreement in
substantially the form of Exhibit A.



          “Proceeds” shall mean: (i) all “proceeds” as defined in Article 9 of the
UCC, (ii) payments or distributions made with respect to any Investment Related
Property and (iii) whatever is receivable or received when Collateral or
proceeds are sold, exchanged, collected or otherwise disposed of, whether such
disposition is voluntary or involuntary.



          “Receivables” shall mean all rights to payment, whether or not earned by
performance, for goods or other property sold, leased, licensed, assigned or
otherwise disposed of, or services rendered or to be rendered, including,
without limitation all such rights constituting or evidenced by any Account,
Chattel Paper, Instrument, General Intangible or Investment Related Property,
together with all of Grantor’s rights, if any, in any goods or other property
giving rise to such right to payment and all Collateral Support and Supporting
Obligations related thereto and all Receivables Records.



          “Receivables Records” shall mean (i) all original copies of all documents,
instruments or other writings or electronic records or other Records evidencing
the Receivables, (ii) all books, correspondence, credit or other files,
Records, ledger sheets or cards, invoices, and other papers relating to
Receivables, including, without limitation, all tapes, cards, computer tapes,
computer discs, computer runs, record keeping systems and other papers and
documents relating to the Receivables, whether in the possession or under the
control of Grantor or any computer bureau or agent from time to time acting for
Grantor or otherwise, (iii) all evidences of the filing of financing statements
and the registration of other instruments in connection therewith, and
amendments, supplements or other modifications thereto, notices to other
creditors or secured parties, and certificates, acknowledgments, or other
writings, including, without limitation, lien search reports, from filing or
other registration officers, (iv) all credit information, reports and memoranda
relating thereto and (v) all other written or nonwritten forms of information
related in any way to the foregoing or any Receivable.



          “Record” shall have the meaning specified in Article 9 of the UCC.



          “Secured Obligations” shall have the meaning assigned in Section 3.1.



          “Secured Party” shall have the meaning set forth in the Recitals.



6






 


          “Securities Accounts” (i) shall mean all “securities accounts” as defined
in Article 8 of the UCC and (ii) shall include, without limitation, all of the
accounts listed on Schedule 4.4(A) under the heading “Securities Accounts” (as
such schedule may be amended or supplemented from time to time).



          “Supporting Obligation” shall mean all “supporting obligations” as defined
in Article 9 of the UCC.



          “Tax Code” shall mean the United States Internal Revenue Code of 1986, as
amended from time to time.



          “Trademark Licenses” shall mean any and all agreements providing for the
granting of any right in or to Trademarks (whether such Grantor is licensee or
licensor thereunder) including, without limitation, each agreement referred to
in Schedule 4.7(F) (as such schedule may be amended or supplemented from time
to time).



          “Trademarks” shall mean all United States, state and foreign trademarks,
trade names, corporate names, company names, business names, fictitious
business names, internet domain names, trade styles, service marks,
certification marks, collective marks, logos, other source or business
identifiers, designs and general intangibles of a like nature, all
registrations and applications for any of the foregoing including, but not
limited to the registrations and applications referred to in Schedule 4.7(E)
(as such schedule may be amended or supplemented from time to time), all
extensions or renewals of any of the foregoing, all of the goodwill of the
business connected with the use of and symbolized by the foregoing, the right
to sue for past, present and future infringement or dilution of any of the
foregoing or for any injury to goodwill, and all proceeds of the foregoing,
including, without limitation, licenses, royalties, income, payments, claims,
damages, and proceeds of suit.



          “Trade Secret Licenses” shall mean any and all agreements providing for
the granting of any right in or to Trade Secrets (whether such Grantor is
licensee or licensor thereunder) including, without limitation, each agreement
referred to in Schedule 4.7(G) (as such schedule may be amended or supplemented
from time to time).



          “Trade Secrets” shall mean all trade secrets and all other confidential or
proprietary information and know-how now or hereafter owned or used in, or
contemplated at any time for use in, the business of such Grantor (all of the
foregoing being collectively called a “Trade Secret”), whether or not such
Trade Secret has been reduced to a writing or other tangible form, including
all documents and things embodying, incorporating, or referring in any way to
such Trade Secret, the right to sue for past, present and future infringement
of any Trade Secret, and all proceeds of the foregoing, including, without
limitation, licenses, royalties, income, payments, claims, damages, and
proceeds of suit.



          “United States” shall mean the United States of America.



     1.2. Definitions; Interpretation. All capitalized terms used herein
(including the preamble and recitals hereto) and not otherwise defined herein
shall have the meanings ascribed thereto in the Credit Agreement or, if not
defined therein, in the UCC. References to “Sections,” “Exhibits” and
“Schedules” shall be to Sections, Exhibits and Schedules, as the case may be,
of


7






 



 this Agreement unless otherwise specifically provided. Section headings
in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose or be given
any substantive effect. Any of the terms defined herein may, unless the
context otherwise requires, be used in the singular or the plural, depending on
the reference. The use herein 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 specific items or matters set forth
immediately following such word or to similar items or matters, whether or not
nonlimiting language (such as “without limitation” or “but not limited to” or
words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that fall within the broadest
possible scope of such general statement, term or matter. If any conflict or
inconsistency exists at any time between this Agreement and the Credit
Agreement, the Credit Agreement shall govern. All references herein to
provisions of the UCC shall include all successor provisions under any
subsequent version or amendment to any Article of the UCC.


SECTION 2. GRANT OF SECURITY.


     2.1. Grant of Security. Each Grantor hereby assigns and transfers to the
Secured Party, and hereby grants to the Secured Party, a security interest and
continuing lien on all of such Grantor’s right, title and interest in, to and
under all personal property of such Grantor including, but not limited to the
following, in each case whether now owned or existing or hereafter acquired or
arising and wherever located (all of which being hereinafter collectively
referred to as the “Collateral"):


          (a) Accounts;



          (b) Chattel Paper;



          (c) Documents;



          (d) General Intangibles;



          (e) Goods;



          (f) Instruments;



          (g) Insurance;



          (h) Intellectual Property;



          (i) Investment Related Property;



          (j) Letter of Credit Rights;



          (k) Money;



          (l) Receivables and Receivable Records;

8






 



           (m) Commercial Tort Claims;



          (n) to the extent not otherwise included above, all Collateral Records,
Collateral Support and Supporting Obligations relating to any of the foregoing;
and



          (o) to the extent not otherwise included above, all Proceeds, products,
accessions, rents and profits of or in respect of any of the foregoing.



     2.2. Certain Limited Exclusions. Notwithstanding anything herein to the
contrary, in no event shall the security interest granted under Section 2.1
hereof attach (a) to any lease, license, contract, property rights or agreement
to which any Grantor is a party or any of its rights or interests thereunder if
and for so long as the grant of such security interest shall constitute or
result in (i) the abandonment, invalidation or unenforceability of any right,
title or interest of any Grantor therein or (ii) a breach or termination
pursuant to the terms of, or a default under, any such lease, license,
contract, property rights or agreement (other than to the extent that any such
term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or
9-409 of the UCC (or any successor provision or provisions) of any relevant
jurisdiction or any other applicable law (including the Bankruptcy Code) or
principles of equity); provided, however, that such security interest shall
attach immediately at such time as the condition causing such abandonment,
invalidation or unenforceability shall be remedied and to the extent severable,
shall attach immediately to any portion of such lease, license, contract,
property rights or agreement that does not result in any of the consequences
specified in (i) or (ii) above; (b) in any of the outstanding capital stock of
a Controlled Foreign Corporation in excess of 65% of the voting power of all
classes of capital stock of such Controlled Foreign Corporation entitled to
vote; provided, that immediately upon the amendment of the Tax Code to allow
the pledge of a greater percentage of the voting power of capital stock in a
Controlled Foreign Corporation without adverse tax consequences, the Collateral
shall include, and the security interest granted by each Grantor shall attach
to, such greater percentage of capital stock of each Controlled Foreign
Corporation.


SECTION 3. SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE.


     3.1. Security for Obligations. This Agreement secures, and the Collateral
is collateral security for, the prompt and complete payment or performance in
full when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including the payment of amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. §362(a) (and any successor provision thereof)),
of all Obligations (the “Secured Obligations”). To the extent that the Secured
Party holds a security interest or lien in any of the Collateral under the
Existing Credit Agreement (as defined in the Credit Agreement) or the Credit
Documents (as defined in the Existing Credit Agreement), any and all such liens
and security interests shall continue to secure the obligations thereunder and
shall also be deemed to secure the Secured Obligations (as defined herein),
such that any security interest or lien granted hereunder shall be deemed to be
in addition to any existing and continuing security interest under the Existing
Credit Agreement (as defined in the Credit Agreement) or the Credit Documents
(as defined in the Existing Credit Agreement) and not in substitution therefor.


9






 


     3.2. Continuing Liability under Collateral. Notwithstanding anything
herein to the contrary, (i) each Grantor shall remain liable for all
obligations under the Collateral and nothing contained herein is intended or
shall be a delegation of duties to the Secured Party, any Lender or any Lender
Counterparty and (ii) each Grantor shall remain liable under each of the
agreements included in the Collateral, including, without limitation, any
agreements relating to Pledged Partnership Interests or Pledged LLC Interests,
to perform all of the obligations undertaken by it thereunder all in accordance
with and pursuant to the terms and provisions thereof and neither the Secured
Party nor any Lender or any Lender Counterparty shall have any obligation or
liability under any of such agreements by reason of or arising out of this
Agreement or any other document related thereto nor shall the Secured Party nor
any Lender or Lender Counterparty have any obligation to make any inquiry as to
the nature or sufficiency of any payment received by it or have any obligation
to take any action to collect or enforce any rights under any agreement
included in the Collateral, including, without limitation, any agreements
relating to Pledged Partnership Interests or Pledged LLC Interests, (iii) the
exercise by the Secured Party of any of its rights hereunder shall not release
any Grantor from any of its duties or obligations under the contracts and
agreements included in the Collateral.


SECTION 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS.


     4.1. Generally.


          (a) Representations and Warranties. Each Grantor hereby represents and
warrants to the Secured Party, on the Closing Date and on each Credit Date,
that:




		
	 	     (i) it owns the Collateral purported to be owned by it or otherwise
has the rights it purports to have in each item of Collateral and, as to
all Collateral whether now existing or hereafter acquired, will continue
to own or have such rights in each item of the Collateral, in each case
free and clear of any and all Liens, rights or claims of all other
Persons other than Permitted Liens, including, without limitation, liens
arising as a result of such Grantor becoming bound (as a result of merger
or otherwise) as debtor under a security agreement entered into by
another Person;
	 
	 	     (ii) it has indicated on Schedule 4.1(A) (as such schedule may be
amended or supplemented from time to time): (w) the type of organization
of such Grantor, (x) the jurisdiction of organization of such Grantor,
(y) its organizational identification number and (z) the jurisdiction
where the chief executive office or its sole place of business is, and
for the one-year period preceding the date hereof has been, located.
	 
	 	     (iii) the full legal name of such Grantor is as set forth on
Schedule 4.1(A) and it has not done in the last five (5) years, and does
not do, business under any other name (including any trade-name or
fictitious business name) except for those names set forth on Schedule
4.1(B) (as such schedule may be amended or supplemented from time to
time);
	 
	 	     (iv) except as provided on Schedule 4.1(C), it has not changed its
name, jurisdiction of organization, chief executive office or sole place
of business or its



10






 




		
	 	corporate structure in any way (e.g., by merger, consolidation,
change in corporate form or otherwise) within the past five (5) years;
	 
	 	     (v) it has not within the last five (5) years become bound (whether
as a result of merger or otherwise) as debtor under a security agreement
entered into by another Person, which has not heretofore been terminated
other than the agreements identified on Schedule 4.1(D) hereof (as such
schedule may be amended or supplemented from time to time);
	 
	 	     (vi) with respect to each agreement identified on Schedule 4.1(D),
it has indicated on Schedule 4.1(A) and Schedule 4.1(B) the information
required pursuant to Section 4.1(a)(ii), (iii) and (iv) with respect to
the debtor under each such agreement;
	 
	 	     (vii) upon the filing of all UCC financing statements naming each
Grantor as debtor and the Secured Party as secured party and describing
the Collateral in the filing offices set forth opposite such Grantor’s
name on Schedule 4.1(E) hereof (as such schedule may be amended or
supplemented from time to time) and other filings delivered by each
Grantor, and the delivery of an executed control agreement for each
Deposit Account listed in Schedule 4.4(A)(8) (as such schedule may be
amended or supplemented from time to time) in accordance with Section
4.4.4 hereof, the security interests granted to the Secured Party
hereunder in the Collateral (as such schedule may be amended or
supplemented from time to time), constitute valid and perfected first
priority Liens (subject only to Permitted Liens) on all of the
Collateral;
	 
	 	     (viii) all actions and consents, including all filings, notices,
registrations and recordings necessary or desirable for the exercise by
the Secured Party of the voting or other rights provided for in this
Agreement or the exercise of remedies in respect of the Collateral have
been made or obtained;
	 
	 	     (ix) other than the financing statements filed in favor of the
Secured Party, no effective UCC financing statement, fixture filing or
other instrument similar in effect under any applicable law covering all
or any part of the Collateral is on file in any filing or recording
office except for (x) financing statements for which proper termination
statements have been delivered to the Secured Party for filing and (y)
financing statements filed in connection with Permitted Liens;
	 
	 	     (x) no authorization, approval or other action by, and no notice to
or filing with, any Governmental Authority or regulatory body is required
for either (i) the pledge or grant by any Grantor of the Liens purported
to be created in favor of the Secured Party hereunder or (ii) the
exercise by Secured Party of any rights or remedies in respect of any
Collateral (whether specifically granted or created hereunder or created
or provided for by applicable law), except (A) for the filings
contemplated by clause (vii) above and (B) as may be required, in
connection with the disposition of any Investment Related Property, by
laws generally affecting the offering and sale of Securities;
	 
	 	     (xi) all information supplied by any Grantor with respect to any of
the Collateral (in each case taken as a whole with respect to any
particular Collateral) is accurate and complete in all material respects;



11






 



		
	 	     (xii) such Grantor has not become bound as a debtor, either by
contract or by operation of law, by a security agreement previously
entered into by another Person; and
	 
	 	     (xiii) such Grantor has been duly organized as an entity of the type
as set forth opposite such Grantor’s name on Schedule 4.1(A) solely under
the laws of the jurisdiction as set forth opposite such Grantor’s name on
Schedule 4.1(A) and remains duly existing as such. Such Grantor has not
filed any certificates of domestication, transfer or continuance in any
other jurisdiction.



          (b) Covenants and Agreements. Each Grantor hereby covenants and agrees
with the Secured Party that from and after the date of this Agreement until the
payment in full of all Secured Obligations:




		
	 	     (i) except for the security interest created by this Agreement, it
shall not create or suffer to exist any Lien upon or with respect to any
of the Collateral, except Permitted Liens, and such Grantor shall defend
the Collateral against all Persons at any time claiming any interest
therein;
	 
	 	     (ii) it shall not produce, use or permit any Collateral to be used
unlawfully or in violation of any provision of this Agreement or the
Credit Agreement;
	 
	 	     (iii) it shall not change such Grantor’s name, identity, corporate
structure (e.g., by merger, consolidation, change in corporate form or
otherwise), sole place of business or chief executive office or its
organization, jurisdiction of organization, state law identification
number required for UCC filings, if any, or establish any trade names
unless it shall have (a) notified the Secured Party in writing, by
executing and delivering to the Secured Party a completed Pledge
Supplement, substantially in the form of Exhibit A attached hereto,
together with all Supplements to Schedules thereto, at least thirty (30)
days prior to any such change or establishment, identifying such new
proposed name, identity, corporate structure, sole place of business,
chief executive office, jurisdiction of organization, state law
identification number or trade name and providing such other information
in connection therewith as the Secured Party may reasonably request and
(b) taken all actions necessary or advisable to maintain the continuous
validity, perfection and the same or better priority of the Secured
Party’s security interest in the Collateral intended to be granted and
agreed to hereby;
	 
	 	     (iv) if the Secured Party or any Lender or Lender Counterparty gives
value to enable Grantor to acquire rights in or the use of any
Collateral, it shall use such value for such purposes and such Grantor
further agrees that repayment of any Obligation shall apply on a
“first-in, first-out” basis so that the portion of the value used to
acquire rights in any Collateral shall be paid in the chronological order
such Grantor acquired rights therein;
	 
	 	     (v) upon such Grantor or any executive officer of such Grantor
obtaining knowledge thereof, it shall promptly notify the Secured Party
in writing of any



12






 




		
	 	event that would reasonably be expected to have a Material Adverse
Effect on the value of the Collateral or any portion thereof, the ability
of any Grantor or the Secured Party to dispose of the Collateral or any
portion thereof, or the rights and remedies of the Secured Party in
relation thereto, including, without limitation, the levy of any legal
process against the Collateral or any portion thereof;
	 
	 	     (vi) it shall not take or permit any action which would reasonably
be expected to impair the Secured Party’s rights in the Collateral; and
	 
	 	     (vii) it shall not sell, transfer or assign (by operation of law or
otherwise) any Collateral except as permitted by Section 6.7 of the
Credit Agreement; provided, so long as (1) no Event of Default shall have
occurred and is then continuing, and (2) to the extent required by the
Credit Agreement, the Net Asset Sale Proceeds, if any, with respect to
such sale, transfer or assignment are delivered to the Secured Party and
all of the other terms of the Credit Documents related thereto are
complied with, the Secured Party shall release the Lien hereof
encumbering the Collateral that is the subject of such sale, transfer or
assignment. The Secured Party shall execute each and every appropriate
filing statement and/or recording document reasonably requested by any
Grantor in connection with the foregoing. Reasonable expenses and costs
incurred by the Secured Party in connection with any such release shall
be for the account of and paid by the applicable Grantor.



     4.2. Equipment and Inventory.


          (a) Representations and Warranties. Each Grantor represents and warrants
to the Secured Party, on the Closing Date and on each Credit Date, that:




		
	 	     (i) all of the Equipment and Inventory included in the Collateral
that was acquired prior to July 1, 2001 is and has been kept for the past
five (5) years only at the locations specified in Schedule 4.2 (as such
schedule may be amended or supplemented from time to time);
	 
	 	     (ii) any Goods now or hereafter produced by any Grantor included in
the Collateral have been and will be produced in compliance with the
requirements of the Fair Labor Standards Act, as amended;
	 
	 	     (iii) none of the Inventory or Equipment is in the possession of an
issuer of a negotiable document (as defined in Section 7-104 of the UCC)
therefor or otherwise in the possession of a bailee or a warehouseman;
and
	 
	 	     (iv) the aggregate book value of the motor vehicles owned by it, in
addition to the motor vehicles owned by each other Grantor, does not
exceed $400,000.



          (b) Covenants and Agreements. Each Grantor hereby covenants and agrees
with the Secured Party that from and after the date of this Agreement until the
payment in full of all Secured Obligations that:



13






 



		
	 	     (i) it shall keep the Equipment, Inventory and any Documents
evidencing any Equipment and Inventory in the locations specified on
Schedule 4.2 (as such schedule may be amended or supplemented from time
to time) unless it shall have (a) notified the Secured Party in writing,
within thirty (30) days after any change in locations, identifying such
new locations and providing such other information in connection
therewith as the Secured Party may reasonably request and (b) taken all
actions necessary or advisable to maintain the continuous validity,
perfection and the same or better priority of the Secured Party’s
security interest in the Collateral intended to be granted and agreed to
hereby, or to enable the Secured Party to exercise and enforce its rights
and remedies hereunder, with respect to such Equipment and Inventory;
	 
	 	     (ii) it shall keep correct and accurate records of the Inventory,
itemizing and describing the kind, type and quantity of Inventory, such
Grantor’s cost therefor and (where applicable) the current list prices
for the Inventory, in each case, in reasonable detail, as is customarily
maintained under similar circumstances by Persons of established
reputation engaged in similar business, and in any event in conformity
with GAAP;
	 
	 	     (iii) it shall not deliver any Document evidencing any Equipment and
Inventory to any Person other than the issuer of such Document to claim
the Goods evidenced therefor or the Secured Party;
	 
	 	     (iv) if any Equipment or Inventory is in possession or control of
any third party, each Grantor shall join with the Secured Party in
notifying the third party of the Secured Party’s security interest and
obtaining an acknowledgment from the third party that it is holding the
Equipment and Inventory for the benefit of the Secured Party; and
	 
	 	     (v) with respect to any item of Equipment which is covered by a
certificate of title under a statute of any jurisdiction under the law of
which indication of a security interest on such certificate is required
as a condition of perfection thereof (A) provide information with respect
to any such Equipment in excess of $100,000 individually or $1,000,000 in
the aggregate, and (B) deliver to the Secured Party copies of all such
certificates of title issued during such calendar quarter indicating the
security interest created hereunder in the items of Equipment covered
thereby.



     4.3. Receivables.


          (a) Representations and Warranties. Each Grantor represents and warrants
to the Secured Party, on the Closing Date and on each Credit Date, that




	 	 	no more than $5,000,000 in the aggregate of
Receivables is evidenced by, or constitutes, an
Instrument or Chattel Paper which has not been
delivered to, or otherwise subjected to the control
of, the Secured Party to the extent required by, and
in accordance with, Section 4.3(c).



14






 


          (b) Covenants and Agreements: Each Grantor hereby covenants and agrees
with the Secured Party that from and after the date of this Agreement until the
payment in full of all Secured Obligations that:




		
	 	     (i) it shall keep and maintain at its own cost and expense
satisfactory and complete records of the Receivables in accordance with
prudent business practices;
	 
	 	     (ii) it shall promptly transfer or cause to be transferred all funds
arising from the collection of all Receivables to a Deposit Account
listed on Schedule 4.4(A)(8)(b) hereto (as such schedule may be amended
or supplemented from time to time);
	 
	 	     (iii) it shall perform in all material respects all of its
obligations with respect to the Receivables;
	 
	 	     (iv) it shall not amend, modify, terminate or waive any provision of
any Receivable other than in accordance with prudent business practices.
Other than in the ordinary course of business as generally conducted by
it on and prior to the date hereof, and except as otherwise provided in
subsection (v) below, following an Event of Default, such Grantor shall
not (w) grant any extension or renewal of the time of payment of any
Receivable, (x) compromise or settle any dispute, claim or legal
proceeding with respect to any Receivable for less than the total unpaid
balance thereof, (y) release, wholly or partially, any Person liable for
the payment thereof, or (z) allow any credit or discount thereon;
	 
	 	     (v) except as otherwise provided in this subsection, each Grantor
shall continue to collect all amounts due or to become due to such
Grantor under the Receivables and any Supporting Obligation and
diligently exercise each material right it may have under any Receivable,
any Supporting Obligation or Collateral Support, in each case, at its own
expense, and in connection with such collections and exercise, such
Grantor shall take such action as such Grantor or the Secured Party may
deem necessary or advisable. Notwithstanding the foregoing, the Secured
Party shall have the right at any time to notify, or require any Grantor
to notify (and if so, such Grantor shall so notify), any Account Debtor
of the Secured Party’s security interest in the Receivables and any
Supporting Obligation and, in addition, at any time following the
occurrence and during the continuation of an Event of Default, the
Secured Party may: (1) direct the Account Debtors under any Receivables
to make payment of all amounts due or to become due to such Grantor
thereunder directly to the Secured Party; (2) notify, or require any
Grantor to notify, each Person maintaining a lockbox or similar
arrangement to which Account Debtors under any Receivables have been
directed to make payment to remit all amounts representing collections on
checks and other payment items from time to time sent to or deposited in
such lockbox or other arrangement directly to the Secured Party; and (3)
enforce, at the expense of such Grantor, collection of any such
Receivables and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as such Grantor might
have done; provided, the Secured Party shall not take any of the actions
set forth in this sentence if and to the extent that such action is
prohibited under any federal or state law. If the Secured Party notifies
any Grantor that it has



15






 




		
	 	elected to collect the Receivables in accordance with the preceding
sentence, any payments of Receivables received by such Grantor shall be
forthwith (and in any event within two (2) Business Days) deposited by
such Grantor in the exact form received, duly indorsed by such Grantor to
the Secured Party if required, in a Collection Account maintained under
the sole dominion and control of the Secured Party, and until so turned
over, all amounts and proceeds (including checks and other instruments)
received by such Grantor in respect of the Receivables, any Supporting
Obligation or Collateral Support shall be received in trust for the
benefit of the Secured Party hereunder and shall be segregated from other
funds of such Grantor and such Grantor shall not adjust, settle or
compromise the amount or payment of any Receivable, or release wholly or
partly any Account Debtor or obligor thereof, or allow any credit or
discount thereon;
	 
	 	     (vi) it shall use its commercially reasonable efforts to keep in
full force and effect any Supporting Obligation or Collateral Support
relating to any Receivable.



          (c) Delivery and Control of Receivables. With respect to any Receivables
in excess of $500,000 individually or $5,000,000 in the aggregate that are
evidenced by, or constitute, Chattel Paper or Instruments, each Grantor shall
cause each originally executed copy thereof to be delivered to the Secured
Party (or its agent or designee) appropriately indorsed to the Secured Party or
indorsed in blank: (i) with respect to any such Receivables in existence on
the date hereof, on or prior to the date hereof and (ii) with respect to any
such Receivables hereafter arising, within fifteen (15) days of such Grantor
acquiring rights therein. With respect to any Receivables in excess of
$500,000 individually or $5,000,000 in the aggregate which would constitute
“electronic chattel paper” under Article 9 of the UCC, each Grantor shall take
all steps necessary to give the Secured Party control over such Receivables
(within the meaning of Section 9-105 of the UCC): (i) with respect to any such
Receivables in existence on the date hereof, on or prior to the date hereof and
(ii) with respect to any such Receivables hereafter arising, within fifteen
(15) days of such Grantor acquiring rights therein. Any Receivable not
otherwise required to be delivered or subjected to the control of the Secured
Party in accordance with this subsection (c) shall be delivered or subjected to
such control upon reasonable request of the Secured Party.



     4.4. Investment Related Property.


          4.4.1 Investment Related Property Generally



          (a) Covenants and Agreements. Each Grantor hereby covenants and agrees
with the Secured Party that from and after the date of this Agreement until the
payment in full of all Secured Obligations that:




		
	 	     (i) in the event it acquires rights in any Investment Related
Property after the date hereof, it shall deliver to the Secured Party a
completed Pledge Supplement, substantially in the form of Exhibit A
attached hereto, together with all Supplements to Schedules thereto,
reflecting such new Investment Related Property and all other Investment
Related Property. Notwithstanding the foregoing, it is understood and
agreed that the security interest of the Secured Party shall attach to
all Investment Related Property immediately upon any Grantor’s
acquisition of rights therein and shall not be



16






 




		
	 	affected by the failure of any Grantor to deliver a supplement to
Schedule 4.4 as required hereby;
	 
	 	     (ii) in the event such Grantor receives any dividends, interest or
distributions on any Investment Related Property, or any securities or
other property upon the merger, consolidation, liquidation or dissolution
of any issuer of any Investment Related Property, then (a) such
dividends, interest or distributions and securities or other property
shall be included in the definition of Collateral without further action
and (b) such Grantor shall immediately take all steps, if any, necessary
or advisable to ensure the validity, perfection, priority and, if
applicable, control of the Secured Party over all of the foregoing
including, without limitation, any Investment Related Property
(including, without limitation, delivery thereof to the Secured Party)
and pending any such action such Grantor shall be deemed to hold such
dividends, interest, distributions, securities or other property in trust
for the benefit of the Secured Party and shall be segregated from all
other property of such Grantor. Notwithstanding the foregoing, so long
as no Event of Default shall have occurred and be continuing, the Secured
Party authorizes each Grantor to retain and apply all dividends,
distributions, and interest; and
	 
	 	     (iii) each Grantor consents to the grant by each other Grantor of a
Security Interest in all Investment Related Property to the Secured
Party.



          (b) Delivery and Control. Each Grantor agrees that with respect to any
Investment Related Property in which it currently has rights it shall comply
with the provisions of this Section 4.4 on or before the Closing Date or Credit
Date and with respect to any Investment Related Property hereafter acquired by
such Grantor it shall comply with the provisions of this Section 4.4
immediately upon acquiring rights therein, in each case in form and substance
satisfactory to the Secured Party. With respect to any Investment Related
Property that is represented by a certificate or that is an “instrument” (other
than any Investment Related Property credited to a Securities Account) it shall
cause such certificate or instrument to be delivered to the Secured Party,
indorsed in blank by an “effective indorsement” (as defined in Section 8-107 of
the UCC), regardless of whether such certificate constitutes a “certificated
security” for purposes of the UCC. With respect to any Investment Related
Property that is an “uncertificated security” for purposes of the UCC (other
than any “uncertificated securities” credited to a Securities Account), it
shall cause the issuer of such uncertificated security to either (i) register
the Secured Party as the registered owner thereof on the books and records of
the issuer or (ii) execute an Uncertificated Securities Control Agreement,
substantially in a form reasonably satisfactory to the Secured Party, pursuant
to which such issuer agrees to comply with the Secured Party’s instructions
with respect to such uncertificated security without further consent by such
Grantor.



          (c) Voting and Distributions.




		
	 	     (i) So long as no Event of Default shall have occurred and be
continuing:




	 	(1)	 	except as otherwise provided under the covenants and
agreements relating to Investment Related Property in this Agreement
or elsewhere herein or in the



17






 




	 	 	 	Credit Agreement, each Grantor shall be entitled to exercise or
refrain from exercising any and all voting and other consensual
rights pertaining to the Investment Related Property or any part
thereof for any purpose not inconsistent with the terms of this
Agreement or the Credit Agreement; provided, no Grantor shall
exercise or refrain from exercising any such right if the Secured
Party shall have notified such Grantor that, in the Secured Party’s
reasonable judgment, such action would have a Material Adverse
Effect on the value of the Investment Related Property or any part
thereof; and provided further, such Grantor shall give the Secured
Party at least five (5) Business Days prior written notice of the
manner in which it intends to exercise, or the reasons for
refraining from exercising, any such right; it being understood,
however, that neither the voting by such Grantor of any Pledged
Stock for, or such Grantor’s consent to, the election of directors
(or similar governing body) at a regularly scheduled annual or
other meeting of stockholders or with respect to incidental matters
at any such meeting, nor such Grantor’s consent to or approval of
any action otherwise permitted under this Agreement and the Credit
Agreement, shall be deemed inconsistent with the terms of this
Agreement or the Credit Agreement, within the meaning of this
Section 4.4.1(c)(i)(1), and no notice of any such voting or consent
need be given to the Secured Party; and
	 
	 	(2)	 	the Secured Party shall promptly execute and deliver (or
cause to be executed and delivered) to each Grantor all proxies, and
other instruments as such Grantor may from time to time reasonably
request for the purpose of enabling such Grantor to exercise the
voting and other consensual rights when and to the extent which it
is entitled to exercise pursuant to clause (A) above;
	 
	 	(3)	 	Upon the occurrence and during the continuation of an Event
of Default:




	 	(A)	 	all rights of each Grantor to exercise or refrain
from exercising the voting and other consensual rights which
it would otherwise be entitled to exercise pursuant hereto
shall cease and all such rights shall thereupon become vested
in the Secured Party who shall thereupon have the sole right
to exercise such voting and other consensual rights; and
	 
	 	(B)	 	in order to permit the Secured Party to exercise
the voting and other consensual rights which it may be
entitled to exercise pursuant hereto and to receive all
dividends and other distributions which it may be entitled to
receive hereunder: (1) each Grantor shall promptly execute and
deliver (or cause to be executed and delivered) to the Secured
Party all proxies, dividend payment orders and other
instruments as the Secured Party may from time to time
reasonably request and (2) the each Grantor acknowledges that
the Secured Party may utilize the power of attorney set forth
in Section 6.



18






 





          4.4.2 Pledged Equity Interests



          (a) Representations and Warranties. Each Grantor hereby represents and
warrants to the Secured Party, on the Closing Date and on each Credit Date,
that:




		
	 	     (i) Schedule 4.4(A) (as such schedule may be amended or supplemented
from time to time) sets forth under the headings “Pledged Stock, “Pledged
LLC Interests,” “Pledged Partnership Interests” and “Pledged Trust
Interests,” respectively, all of the Pledged Stock, Pledged LLC
Interests, Pledged Partnership Interests and Pledged Trust Interests
owned by any Grantor and such Pledged Equity Interests constitute the
percentage of issued and outstanding shares of stock, percentage of
membership interests, percentage of partnership interests or percentage
of beneficial interest of the respective issuers thereof indicated on
such Schedule;
	 
	 	     (ii) except as set forth on Schedule 4.4(B), it has not acquired any
equity interests of another entity or substantially all the assets of
another entity within the past five (5) years;
	 
	 	     (iii) it is the record and beneficial owner of the Pledged Equity
Interests free of all Liens, rights or claims of other Persons other than
Permitted Liens and there are no outstanding warrants, options or other
rights to purchase, or shareholder, voting trust or similar agreements
outstanding with respect to, or property that is convertible into, or
that requires the issuance or sale of, any Pledged Equity Interests;
	 
	 	     (iv) without limiting the generality of Section 4.1(a)(viii), no
consent of any Person including any other general or limited partner, any
other member of a limited liability company, any other shareholder or any
other trust beneficiary is necessary or desirable in connection with the
creation, perfection or first priority status of the security interest of
the Secured Party in any Pledged Equity Interests or the exercise by the
Secured Party of the voting or other rights provided for in this
Agreement or the exercise of remedies in respect thereof;
	 
	 	     (v) none of the Pledged LLC Interests nor Pledged Partnership
Interests are or represent interests in issuers that are: (a) investment
company securities, (b) are dealt in or traded on securities exchanges or
markets, (c) have opted to be treated as securities under the UCC or (d)
held in a securities account;



          (b) Covenants and Agreements. Each Grantor hereby covenants and agrees
with the Secured Party that from and after the date of this Agreement until the
payment in full of all Secured Obligations that:




		
	 	     (i) without the prior written consent of the Secured Party, it shall
not vote to enable or take any other action to: (a) amend or terminate
any partnership agreement, limited liability company agreement,
certificate of incorporation, by-laws or other organizational documents
in any way that materially impairs the rights of such Grantor with
respect to any Investment Related Property or adversely affects the
validity, perfection or priority of the Secured Party’s security
interest, (b) permit any issuer of any Pledged Equity Interest that is a
Subsidiary to issue any additional stock, partnership interests, limited
liability company interests or other equity interests of any nature or to



19






 




		
	 	issue securities convertible into or granting the right of purchase
or exchange for any stock or other equity interest of any nature of such
issuer in each case, other than such equity interests owned by the
Company or wholly-owned Subsidiaries of the Company that are pledged as
and become Collateral, (c) other than as permitted under the Credit
Agreement, permit any issuer of any Pledged Equity Interest to dispose of
all or a material portion of their assets, (d) waive any default under or
breach of any terms of organizational document relating to the issuer of
any Pledged Equity Interest or the terms of any Pledged Debt which would
have a Material Adverse Effect, or (e) cause any issuer of any Pledged
Partnership Interests or Pledged LLC Interests which are not securities
(for purposes of the UCC) on the date hereof to elect or otherwise take
any action to cause such Pledged Partnership Interests or Pledged LLC
Interests to be treated as securities for purposes of the UCC; provided,
however, notwithstanding the foregoing, if any issuer of any Pledged
Partnership Interests or Pledged LLC Interests takes any such action in
violation of the foregoing in this clause (e), such Grantor shall
promptly notify the Secured Party in writing of any such election or
action and, in such event, shall take all steps necessary or advisable to
establish the Secured Party’s “control” thereof;
	 
	 	     (ii) it shall comply with all of its obligations under any
partnership agreement or limited liability company agreement relating to
Pledged Partnership Interests or Pledged LLC Interests and shall enforce
all of its rights with respect to any Investment Related Property;
	 
	 	     (iii) without the prior written consent of the Secured Party, it
shall not permit any issuer of any Pledged Equity Interest to merge or
consolidate unless (i) if the surviving or resulting entity is a
Subsidiary of the Company, such entity is or becomes bound as a Grantor
hereunder and the security interest of the Secured Party in collateral in
which such Grantor has or acquires rights is perfected by a filed
financing statement (that is not effective solely under section 9-508 of
the UCC) and (ii) to the extent the same constitutes Collateral, all the
outstanding capital stock or other equity interests of the surviving or
resulting corporation, limited liability company, partnership or other
entity is, upon such merger or consolidation, pledged hereunder and no
cash, securities or other property is distributed in respect of the
outstanding equity interests of any other constituent Grantors; provided,
that if the surviving or resulting Grantors upon any such merger or
consolidation involving an issuer which is a Controlled Foreign
Corporation, then such Grantor shall only be required to pledge equity
interests in accordance with Section 2.2;
	 
	 	     (iv) each Grantor consents to the grant by each other Grantor of a
security interest in all Investment Related Property to the Secured Party
and, without limiting the foregoing, consents to the transfer of any
Pledged Partnership Interest and any Pledged LLC Interest to the Secured
Party or its nominee following an Event of Default and to the
substitution of the Secured Party or its nominee as a partner in any
partnership or as a member in any limited liability company with all the
rights and powers related thereto; and
	 
	 	     (v) it shall notify the Secured Party of any default under any
Pledged Debt that has caused, either in any case or in the aggregate, a
Material Adverse Effect.



20






 





          4.4.3 Pledged Debt



          (a) Representations and Warranties. Each Grantor hereby represents and
warrants to the Secured Party, on the Closing Date and each Credit Date, that
Schedule 4.4 (as such schedule may be amended or supplemented from time to
time) sets forth under the heading “Pledged Debt” all of the Pledged Debt owned
by any Grantor constitutes all of the issued and outstanding inter-company
Indebtedness evidenced by an instrument or certificated security of the
respective issuers thereof owing to such Grantor.



          (b) Covenants and Agreements. Each Grantor hereby covenants and agrees
that it shall notify the Secured Party of any default under any Pledged Debt
that has caused, either in any case or in the aggregate, a Material Adverse
Effect.



          4.4.4 Investment Accounts



          (a) Representations and Warranties. Each Grantor hereby represents and
warrants to the Secured Party, on the Closing Date and each Credit Date, that:




		
	 	     (i) Schedule 4.4 hereto (as such schedule may be amended or
supplemented from time to time) sets forth under the headings “Securities
Accounts” and “Commodities Accounts,” respectively, all of the Securities
Accounts and Commodities Accounts in which each Grantor has an interest.
Each Grantor is the sole entitlement holder of each Securities Account
and Commodities Account opposite its name, and such Grantor has not
consented to, and is not otherwise aware of, any Person (other than the
Secured Party pursuant hereto) having “control” (within the meanings of
Sections 8-106 and 9-106 of the UCC) over, or any other interest in, any
such Securities Account or Commodity Account or any securities or other
property credited thereto;
	 
	 	     (ii) Schedules 4.4(A)(8)(a) and 4.4(A)(8)(b) hereto (as such
schedules may be amended or supplemented from time to time) sets forth
under the headings “Deposit Accounts: Collection Account” and “Deposit
Accounts: Others,” respectively, all Deposit Accounts in which each
Grantor has an interest. Each Grantor is the sole account holder of each
Deposit Account listed on Schedule 4.4(A)(8) opposite its name and such
Grantor has not consented to, and is not otherwise aware of, any Person
(other than the Secured Party pursuant hereto) having either sole
dominion and control (within the meaning of common law) or “control”
(within the meaning of Section 9-104 of the UCC) over, or any other
interest in, any such Deposit Account or any money or other property
deposited therein; and
	 
	 	     (iii) each Grantor has taken all actions necessary or desirable,
including those specified in Section 4.4(b) to: (a) establish the
Secured Party’s “control” (within the meanings of Sections 8-106 and
9-106 or 9-104, as applicable of the UCC) over any portion of the
Investment Related Property constituting Certificated Securities,
Uncertificated Securities, Securities Accounts, Securities Entitlements,
or Commodities Accounts (each as defined herein, or if not defined
herein, as defined in the UCC); (b) establish the Secured Party’s
“control” (within the meaning of Section 9-104 of the UCC) over all
Deposit Accounts; and (d) to deliver all Instruments to the Secured
Party.



21






 


          (b) Covenants and Agreement. Each Grantor hereby covenants and agrees
with the Secured Party that from and after the date of this Agreement until the
payment in full of all Secured Obligations that it shall not close or terminate
any Deposit Account without the prior consent of the Secured Party (which
consent shall not be unreasonably withheld) unless a successor or replacement
account has been established with respect to which successor or replacement
account such Grantor has taken all actions necessary to comply with the
provisions of Section 4.4.4(c).



          (c) Delivery and Control. Each Grantor agrees that with respect to any
Investment Related Property in which it currently has rights it shall comply
with the provisions of this Section 4.4.4(c) on or before the Credit Date and
with respect to any Investment Related Property hereafter acquired by such
Grantor it shall comply with the provisions of this Section 4.4.4(c)
immediately upon acquiring rights therein. With respect to any Investment
Related Property consisting of Securities Accounts, Securities Entitlements or
Deposit Accounts, it shall cause the securities intermediary or depositary
institution, as the case may be, maintaining such Securities Account,
Securities Entitlement or Deposit Account to enter into an agreement
substantially in the form of Exhibit B hereto or such other form reasonably
satisfactory to the Secured Party pursuant to which it shall agree to comply
with the Secured Party’s “entitlement orders” or “instructions”, as the case
may be, without further consent by such Grantor. Each Grantor shall enter into
such control agreement or agreements with respect to: (i) any Securities
Accounts, Securities Entitlements or Deposit Accounts that exist on the Credit
Date, as of or prior to the Credit Date and (ii) any Securities Accounts,
Securities Entitlements or Deposit Accounts that are created or acquired after
the Closing Date, as of or prior to the deposit or transfer of any such
Securities Entitlements or funds, whether constituting moneys or investments,
into such Securities Accounts or Deposit Accounts.



In addition to the foregoing, if any issuer of any Investment Related Property
is located in a jurisdiction outside of the United States, each Grantor shall
take such additional actions, including, without limitation, causing the issuer
to register the pledge on its books and records or making such filings or
recordings, in each case as may be necessary or advisable, under the laws of
such issuer’s jurisdiction to insure the validity, perfection and priority of
the security interest of the Secured Party. Upon the occurrence of an Event of
Default, the Secured Party shall have the right, without notice to any Grantor,
to transfer all or any portion of the Investment Related Property to its name
or the name of its nominee or agent. In addition, the Secured Party shall have
the right at any time, without notice to any Grantor, to exchange any
certificates or instruments representing any Investment Related Property for
certificates or instruments of smaller or larger denominations.


     4.5. Material Contracts.


          (a) Representations and Warranties. Each Grantor hereby represents and
warrants to the Secured Party, on the Closing Date and on each Credit Date,
that Schedule 4.5 (as such schedule may be amended or supplemented from time to
time) sets forth all of the Material Contracts to which such Grantor has
rights.



          (b) Covenants and Agreements. Each Grantor hereby covenants and agrees
that:



22






 



		
	 	     (i) in addition to any rights under the Section of this Agreement
relating to Receivables, the Secured Party may at any time notify, or
require any Grantor to so notify, the counterparty on any Material
Contract of the security interest of the Secured Party therein; provided,
the Secured Party shall not take any of the actions set forth in this
sentence if and to the extent such action is prohibited under any federal
or state law. In addition, after the occurrence and during the
continuance of an Event of Default, the Secured Party may upon written
notice to the applicable Grantor, notify, or require any Grantor to
notify, the counterparty to make all payments under the Material
Contracts directly to the Secured Party;
	 
	 	     (ii) each Grantor shall deliver promptly to the Secured Party a copy
of each material demand, notice or document received by it relating to
any Material Contract;
	 
	 	     (iii) each Grantor shall deliver promptly to the Secured Party, and
in any event within ten (10) Business Days, after (1) any Material
Contract of such Grantor is terminated or amended in a manner that is
materially adverse to such Grantor or (2) any new Material Contract is
entered into by such Grantor, a written statement describing such event,
with copies of such material amendments or new contracts, delivered to
the Secured Party (to the extent such delivery is permitted by the terms
of any such Material Contract and an explanation of any actions being
taken with respect thereto;
	 
	 	     (iv) it shall perform in all material respects all of its
obligations with respect to the Material Contracts;
	 
	 	     (v) it shall promptly and diligently exercise each material right it
may have under any Material Contract, any Supporting Obligation or
Collateral Support, in each case, at its own expense, and in connection
with such collections and exercise, such Grantor shall take such action
as such Grantor may deem necessary or advisable; and
	 
	 	     (vi) it shall use its commercially reasonable efforts to keep in
full force and effect any Supporting Obligation or Collateral Support
relating to any Material Contract.
	 
	 	     (vii) with respect to any agreement, contract or license to which
any Grantor is a party that prevents the assignment or granting of a
security interest therein (either by its terms or by any federal or state
statutory prohibition or otherwise) (any such agreement, contract or
license, a “Non-Assignable Contract"), each Grantor shall, within thirty
(30) days of the date hereof with respect to any Non-Assignable Contract
in effect on the date hereof and within thirty (30) days after entering
into any Non-Assignable Contract after the Closing Date, request in
writing the consent of the counterparty or counterparties to the
Non-Assignable Contract pursuant to the terms of such Non-Assignable
Contract or applicable law to the assignment or granting of a security
interest in such Non-Assignable Contract to Secured Party and use its
best efforts to obtain such consent as soon as practicable thereafter;
provided, however, that the foregoing shall not apply to the extent that
any such term would be rendered ineffective pursuant to Sections 9-406,
9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions of any relevant jurisdiction) or any other
applicable law.



23






 



     4.6. Letter of Credit Rights.


          (a) Representations and Warranties. Each Grantor hereby represents and
warrants to the Secured Party, on the Closing Date and on each Credit Date,
that all material letters of credit to which such Grantor has rights is listed
on Schedule 4.6 (as such schedule may be amended or supplemented from time to
time) hereto.



          (b) Covenants and Agreements. Each Grantor hereby covenants and agrees
with the Secured Party that from and after the date of this Agreement until the
payment in full of all Secured Obligations that: (i) it shall advise the
Secured Party and Lenders of any single letter of credit or series of related
letters of credit with a face amount of $1,000,000 or more to which Grantor has
rights; and (ii) with respect to any such letter of credit, or any other
material letter of credit hereafter arising, it shall at the request of the
Requisite Lenders obtain the consent of the issuer thereof to the assignment of
the proceeds of the letter of credit to the Secured Party and shall deliver to
the Secured Party a completed Pledge Supplement, substantially in the form of
Exhibit A attached hereto, together with all Supplements to Schedules thereto.



     4.7. Intellectual Property.


          (a) Representations and Warranties. Except as disclosed in Schedule
4.7(H) (as such schedule may be amended or supplemented from time to time),
each Grantor hereby represents and warrants to the Secured Party, on the
Closing Date and on each Credit Date, that:




		
	 	     (i) Schedule 4.7 (as such schedule may be amended or supplemented
from time to time) sets forth a true and complete list of (i) all United
States, state and foreign registrations of and applications for Patents,
Trademarks, and Copyrights owned by each Grantor and (ii) all Patent
Licenses, Trademark Licenses and Copyright Licenses material to the
business of such Grantor;
	 
	 	     (ii) it is the sole and exclusive owner of the entire right, title,
and interest in and to all Intellectual Property on Schedule 4.7 (as such
schedule may be amended or supplemented from time to time), and it has
the valid right to use all Intellectual Property necessary to conduct its
business, free and clear of all Liens, claims, encumbrances and licenses,
except for Permitted Liens and the licenses set forth on Schedule 4.7(B),
(D), (F) and (G) (as each may be amended or supplemented from time to
time);
	 
	 	     (iii) all registrations and applications for Copyrights, Patents and
Trademarks are standing in the name of each Grantor, and none of the
Trademarks, Patents, Copyrights or Trade Secret Collateral has been
licensed by any Grantor to any affiliate or third party, except as
disclosed in Schedule 4.7(B), (D), (F), or (G) (as each may be amended or
supplemented from time to time);
	 
	 	     (iv) the conduct of such Grantor’s business does not infringe upon
any trademark, patent, copyright, trade secret or similar intellectual
property right owned or controlled by a third party except where there is
no Material Adverse Effect; no claim has



24






 




		
	 	been made that the use of any Intellectual Property owned or used by
Grantor (or any of its respective licensees) violates the asserted rights
of any third party except where there is no Material Adverse Effect;
	 
	 	     (v) to the best of each Grantor’s knowledge, no third party is
infringing upon any Intellectual Property owned or used by such Grantor,
or any of its respective licensees;
	 
	 	     (vi) no settlement or consents, covenants not to sue, nonassertion
assurances, or releases have been entered into by Grantor or to which
Grantor is bound that adversely effect Grantor’s rights to own or use any
Intellectual Property; and
	 
	 	     (vii) each Grantor has not made a previous assignment, sale,
transfer or agreement constituting a present or future assignment, sale,
transfer or agreement of any Intellectual Property that has not been
terminated or released to any Person other than the Secured Party. There
is no effective financing statement or other document or instrument now
executed, or on file or recorded in any public office, granting a
security interest in or otherwise encumbering any part of the
Intellectual Property, other than in favor of the Secured Party.



          (b) Covenants and Agreements. Each Grantor hereby covenants and agrees
with the Secured Party that from and after the date of this Agreement until the
payment in full of all Secured Obligations that:




		
	 	     (i) it shall not do any act or omit to do any act whereby any of the
Intellectual Property of Grantor may lapse, or become abandoned,
dedicated to the public, or unenforceable, or which would adversely
affect the validity, grant, or enforceability of the security interest
granted therein unless such Intellectual Property is not material to the
conduct of its business or operations;
	 
	 	     (ii) it shall not, with respect to any Trademarks of any Grantor,
cease the use of any of such Trademarks or fail to maintain the level of
the quality of products sold and services rendered under any of such
Trademark at a level at least substantially consistent with the quality
of such products and services as of the date hereof unless any such
Trademark is not material to the conduct of its business or operations,
and each Grantor shall take all steps necessary to insure that licensees
of such Trademarks use such consistent standards of quality;
	 
	 	     (iii) it shall, within thirty (30) days of the creation or
acquisition of any Copyrightable work which is material to the business
of Grantor, apply to register the Copyright in the United States
Copyright Office;
	 
	 	     (iv) it shall promptly notify the Secured Party if it knows or has
reason to know that any item of the Intellectual Property that is
material to the business of any Grantor may become (a) abandoned or
dedicated to the public or placed in the public domain, (b) invalid or
unenforceable, or (c) subject to any adverse determination or development
(including the institution of proceedings) in any action or proceeding in
the United States Patent and Trademark Office, the United States
Copyright Office, and state
registry, any foreign counterpart of the foregoing, or any court;



25






 



		
	 	     (v) it shall take all reasonable steps in the United States Patent
and Trademark Office, the United States Copyright Office, any state
registry or any foreign counterpart of the foregoing, to pursue any
application and maintain any registration of each Trademark, Patent, and
Copyright owned by any Grantor and material to its business which is now
or shall become included in the Intellectual Property (except for such
works with respect to which such Grantor has determined in the exercise
of its commercially reasonable judgment that it shall not seek
registration) including, but not limited to, those items on Schedule
4.7(A), (C) and (E) (as each may be amended or supplemented from time to
time);
	 
	 	     (vi) in the event that any Intellectual Property owned by or
exclusively licensed to any Grantor is infringed, misappropriated, or
diluted by a third party, such Grantor shall unless it shall reasonably
determine that such Intellectual Property is not material to the conduct
of its business or operations, promptly take all reasonable actions to
stop such infringement, misappropriation, or dilution and protect its
exclusive rights in such Intellectual Property including, but not limited
to, the initiation of a suit for injunctive relief and to recover
damages;
	 
	 	     (vii) it shall promptly (but in no event more than thirty (30) days
after any Grantor obtains knowledge thereof) report to the Secured Party
(i) the filing of any application to register any Intellectual Property
with the United States Patent and Trademark Office, the United States
Copyright Office, or any state registry or foreign counterpart of the
foregoing (whether such application is filed by such Grantor or through
any agent, employee, licensee, or designee thereof) and (ii) the
registration of any Intellectual Property by any such office, in each
case by executing and delivering to the Secured Party a completed Pledge
Supplement, substantially in the form of Exhibit A attached hereto,
together with all Supplements to Schedules thereto;
	 
	 	     (viii) it shall, promptly upon the reasonable request of the Secured
Party, execute and deliver to the Secured Party any document required to
acknowledge, confirm, register, record, or perfect the Secured Party’s
interest in any part of the Intellectual Property, whether now owned or
hereafter acquired;
	 
	 	     (ix) except with the prior consent of the Secured Party or as
permitted under the Credit Agreement (including, without limitation, with
respect to purchase money security interests permitted under the Credit
Agreement), each Grantor shall not execute, and there will not be on file
in any public office, any financing statement or other document or
instruments, except financing statements or other documents or
instruments filed or to be filed in favor of the Secured Party and each
Grantor shall not sell, assign, transfer, license, grant any option, or
create or suffer to exist any Lien upon or with respect to the
Intellectual Property, except for the Lien created by and under this
Agreement and the other Credit Documents;
	 
	 	     (x) it shall hereafter use commercially reasonable efforts so as not
to permit the inclusion in any contract to which it hereafter becomes a
party of any



26






 




		
	 	provision that could or might in any way materially impair or
prevent the creation of a security interest in, or the assignment of,
such Grantor’s rights and interests in any property included within the
definitions of any Intellectual Property acquired under such contracts;
	 
	 	     (xi) it shall take all steps reasonably necessary to protect the
secrecy of all trade secrets relating to the products and services sold
or delivered under or in connection with the Intellectual Property;
	 
	 	     (xii) it shall use proper statutory notice in connection with its
use of any of the Intellectual Property; and
	 
	 	     (xiii) it shall continue to collect, at its own expense, all amounts
due or to become due to such Grantor in respect of the Intellectual
Property or any portion thereof. In connection with such collections,
each Grantor may take such action as such Grantor may deem reasonably
necessary or advisable to enforce collection of such amounts.
Notwithstanding the foregoing, the Secured Party shall have the right at
any time, to notify, or require any Grantor to notify, any obligors with
respect to any such amounts of the existence of the security interest
created hereby.



     4.8. Commercial Tort Claims. Each Grantor hereby represents and warrants
to the Secured Party, on the Closing Date and on each Credit Date, that
Schedule 4.8 (as such schedule may be amended or supplemented from time to
time) sets forth all Commercial Tort Claims of each Grantor in excess of
$1,000,000 individually or $10,000,000 in the aggregate.


SECTION 5. ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES; ADDITIONAL
GRANTORS.


     5.1. Access; Right of Inspection. The Secured Party shall at all times
have full and free access during normal business hours to all the books,
correspondence and records of each Grantor, and the Secured Party and its
representatives may examine the same, take extracts therefrom and make
photocopies thereof, and each Grantor agrees to render to the Secured Party, at
such Grantor’s cost and expense, such clerical and other assistance as may be
reasonably requested with regard thereto. The Secured Party and its
representatives shall at all times also have the right to enter any premises of
each Grantor and inspect any property of each Grantor where any of the
Collateral of such Grantor granted pursuant to this Agreement is located for
the purpose of inspecting the same, observing its use or otherwise protecting
its interests therein.


     5.2. Further Assurances.


          (a) Each Grantor agrees that from time to time, at the expense of such
Grantor, that it shall promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable, or
that the Secured Party may reasonably request, in order to create and/or
maintain the validity, perfection or priority of and protect any security
interest granted or purported to be granted hereby or to enable the Secured
Party to exercise and enforce its rights and remedies hereunder with respect to
any Collateral. Without limiting the generality of the foregoing, each Grantor
shall:



27






 



		
	 	     (i) file such financing or continuation statements, or amendments
thereto, and execute and deliver such other agreements, instruments,
endorsements, powers of attorney or notices, as may be necessary or
desirable, or as the Secured Party may reasonably request, in order to
perfect and preserve the security interests granted or purported to be
granted hereby;
	 
	 	     (ii) take all actions necessary to ensure the recordation of
appropriate evidence of the liens and security interest granted hereunder
in the Intellectual Property with any intellectual property registry in
which said Intellectual Property is registered or in which an application
for registration is pending including, without limitation, the United
States Patent and Trademark Office, the United States Copyright Office,
the various Secretaries of State, and the foreign counterparts on any of
the foregoing;
	 
	 	     (iii) at any reasonable time, upon request by the Secured Party,
exhibit the Collateral to and allow inspection of the Collateral by the
Secured Party, or persons designated by the Secured Party; and
	 
	 	     (iv) at the Secured Party’s request, appear in and defend any action
or proceeding that may affect such Grantor’s title to or the Secured
Party’s security interest in all or any part of the Collateral.



          (b) Each Grantor hereby authorizes the Secured Party to file a Record or
Records, including, without limitation, financing or continuation statements,
and amendments thereto, in any jurisdictions and with any filing offices as the
Secured Party may determine, in its sole discretion, are necessary or advisable
to perfect the security interest granted to the Secured Party herein. Such
financing statements may describe the Collateral in the same manner as
described herein or may contain an indication or description of collateral that
describes such property in any other manner as the Secured Party may determine,
in its sole discretion, is necessary, advisable or prudent to ensure the
perfection of the security interest in the Collateral granted to the Secured
Party herein, including, without limitation, describing such property as “all
assets” or “all personal property, whether now owned or hereafter acquired.”
Each Grantor shall furnish to the Secured Party from time to time statements
and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Secured Party may reasonably
request, all in reasonable detail.



          (c) Each Grantor hereby authorizes the Secured Party to modify this
Agreement after obtaining such Grantor’s approval of or signature to such
modification by amending Schedule 4.7 (as such schedule may be amended or
supplemented from time to time) to include reference to any right, title or
interest in any existing Intellectual Property or any Intellectual Property
acquired or developed by any Grantor after the execution hereof or to delete
any reference to any right, title or interest in any Intellectual Property in
which any Grantor no longer has or claims any right, title or interest.



     5.3. Additional Grantors. From time to time subsequent to the date
hereof, additional Persons may become parties hereto as additional Grantors
(each, an “Additional Grantor”), by executing a Counterpart Agreement. Upon
delivery of any such Counterpart Agreement to the Secured Party, notice of
which is hereby waived by Grantors, each Additional


28






 



 Grantor shall be a Grantor and shall be as fully a party hereto as if
Additional Grantor were an original signatory hereto. Each Grantor expressly
agrees that its obligations arising hereunder shall not be affected or
diminished by the addition or release of any other Grantor hereunder, nor by
any election of Secured Party not to cause any Subsidiary of Company to become
an Additional Grantor hereunder. This Agreement shall be fully effective as to
any Grantor that is or becomes a party hereto regardless of whether any other
Person becomes or fails to become or ceases to be a Grantor hereunder.


SECTION 6. SECURED PARTY APPOINTED ATTORNEY-IN-FACT.


     6.1. Power of Attorney. Each Grantor hereby irrevocably appoints the
Secured Party as such Grantor’s attorney-in-fact, with full authority in the
place and stead of such Grantor and in the name of such Grantor, the Secured
Party or otherwise, from time to time in the Secured Party’s discretion to take
any action and to execute any instrument that the Secured Party may deem
reasonably necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation, the following:


          (a) upon the occurrence and during the continuance of any Event of
Default, to obtain and adjust insurance required to be maintained by such
Grantor or paid to the Secured Party pursuant to the Credit Agreement;



          (b) upon the occurrence and during the continuance of any Event of
Default, to ask for, demand, collect, sue for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;



          (c) upon the occurrence and during the continuance of any Event of
Default, to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (b) above;



          (d) upon the occurrence and during the continuance of any Event of
Default, to file any claims or take any action or institute any proceedings
that the Secured Party may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce the rights of the Secured Party
with respect to any of the Collateral;



          (e) to prepare and file any UCC financing statements against such Grantor
as debtor;



          (f) to prepare, sign, and file for recordation in any intellectual
property registry, appropriate evidence of the lien and security interest
granted herein in the Intellectual Property in the name of such Grantor as
assignor;



          (g) to take or cause to be taken all actions necessary to perform or
comply or cause performance or compliance with the terms of this Agreement,
including, without limitation, access to pay or discharge taxes or Liens (other
than Permitted Liens) levied or placed upon or threatened against the
Collateral, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by the Secured Party in its sole
discretion, any such payments made by the Secured Party to become obligations
of such Grantor to the Secured Party, due and payable immediately without
demand in each case, as may be necessary to



29






 


preserve the priority or perfection of the Liens granted by this Agreement
or to preserve or enhance the value of the Collateral subject to such Liens;
and


          (h) upon the occurrence and during the continuance of any Event of Default
generally to sell, transfer, pledge, make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though the
Secured Party were the absolute owner thereof for all purposes, and to do, at
the Secured Party’s option and such Grantor’s expense, at any time or from time
to time, all acts and things that the Secured Party deems reasonably necessary
to protect, preserve or realize upon the Collateral and the Secured Party’s
security interest therein in order to effect the intent of this Agreement, all
as fully and effectively as such Grantor might do.



     6.2. No Duty on the Part of Secured Party. The powers conferred on the
Secured Party hereunder are solely to protect the interests of the Secured
Parties in the Collateral and shall not impose any duty upon the Secured Party
to exercise any such powers. The Secured Party shall be accountable only for
amounts that it actually receives as a result of the exercise of such powers,
and neither it nor any of its officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except for
its own gross negligence or willful misconduct.


     6.3. Ratification. Each Grantor hereby ratifies all that said attorneys
shall lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the
security interest created hereby are released.


SECTION 7. REMEDIES.


     7.1. Generally.


          (a) If any Event of Default shall have occurred and be continuing, the
Secured Party may exercise in respect of the Collateral, in addition to all
other rights and remedies provided for herein or otherwise available to it at
law or in equity, all the rights and remedies of a secured party on default
under the UCC (whether or not the UCC applies to the affected Collateral) to
collect, enforce or satisfy any Secured Obligations then owing, whether by
acceleration or otherwise, and also may pursue any of the following separately,
successively or simultaneously:




		
	 	     (i) require any Grantor to, and each Grantor hereby agrees that it
shall at its expense and promptly upon request of the Secured Party
forthwith, assemble all or part of the Collateral as directed by the
Secured Party and make it available to the Secured Party at a place to be
designated by the Secured Party that is reasonably convenient to both
parties;
	 
	 	     (ii) enter onto the property where any Collateral is located and
take possession thereof with or without judicial process;
	 
	 	     (iii) prior to the disposition of the Collateral, store, process,
repair or recondition the Collateral or otherwise prepare the Collateral
for disposition in any
manner to the extent the Secured Party deems appropriate; and



30






 



		
	 	     (iv) without notice except as specified below or under the UCC,
sell, assign, lease, license (on an exclusive or nonexclusive basis) or
otherwise dispose of the Collateral or any part thereof in one or more
parcels at public or private sale, at any of the Secured Party’s offices
or elsewhere, for cash, on credit or for future delivery, at such time or
times and at such price or prices and upon such other terms as the
Secured Party may deem commercially reasonable.



          (b) The Secured Party may be the purchaser of any or all of the Collateral
at any public or private (to the extent any portion of the Collateral being
privately sold is of a kind that is customarily sold on a recognized market or
the subject of widely distributed standard price quotations) sale in accordance
with the UCC and the Secured Party, as representative of the Lenders and Lender
Counterparties, shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such sale made in accordance with the UCC, to use and
apply any of the Secured Obligations as a credit on account of the purchase
price for any Collateral payable by the Secured Party at such sale. Each
purchaser at any such sale shall hold the property sold absolutely free from
any claim or right on the part of any Grantor, and each Grantor hereby waives
(to the extent permitted by applicable law) all rights of redemption, stay
and/or appraisal which it now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted. Each Grantor
agrees that, to the extent notice of sale shall be required by law, at least
ten (10) days notice to such Grantor of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification. The Secured Party shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given. The Secured
Party may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned. Each
Grantor agrees that it would not be commercially unreasonable for the Secured
Party to dispose of the Collateral or any portion thereof by using Internet
sites that provide for the auction of assets of the types included in the
Collateral or that have the reasonable capability of doing so, or that match
buyers and sellers of assets. Each Grantor hereby waives any claims against
the Secured Party (except to the extent such claim arises solely out of the
gross negligence or willful misconduct of the Secured Party) arising by reason
of the fact that the price at which any Collateral may have been sold at such a
private sale was less than the price which might have been obtained at a public
sale, even if the Secured Party accepts the first offer received and does not
offer such Collateral to more than one offeree. If the proceeds of any sale or
other disposition of the Collateral are insufficient to pay all the Secured
Obligations, Grantors shall be liable for the deficiency and the fees of any
attorneys employed by the Secured Party to collect such deficiency. Each
Grantor further agrees that a breach of any of the covenants contained in this
Section will cause irreparable injury to the Secured Party, that the Secured
Party has no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section shall be
specifically enforceable against such Grantor, and such Grantor hereby waives
and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no default has occurred
giving rise to the Secured Obligations becoming due and payable prior to their
stated maturities. Nothing in this Section shall in any way alter the rights
of the Secured Party hereunder.



31






 




          (c) The Secured Party may sell the Collateral without giving any
warranties as to the Collateral. The Secured Party may specifically disclaim
or modify any warranties of title or the like. This procedure will not be
considered to adversely effect the commercial reasonableness of any sale of the
Collateral.



          (d) If the Secured Party sells any of the Collateral on credit, the
Secured Obligations will be credited only with payments actually made by the
purchaser and received by the Secured Party and applied to the indebtedness of
the purchaser. In the event the purchaser fails to pay for the Collateral, the
Secured Party may resell the Collateral.



          (e) The Secured Party shall have no obligation to marshal any of the
Collateral.



     7.2. Application of Proceeds. Except as expressly provided elsewhere in
this Agreement, all proceeds received by the Secured Party in respect of any
sale, any collection from, or other realization upon all or any part of the
Collateral shall be applied in full or in part by the Secured Party against,
the Secured Obligations in the order of priority set forth in Section 2.13 of
the Credit Agreement.


     7.3. Sales on Credit. If Secured Party sells any of the Collateral upon
credit, Grantor will be credited only with payments actually made by purchaser
and received by Secured Party and applied to indebtedness of the Purchaser. In
the event the purchaser fails to pay for the Collateral, Secured Party may
resell the Collateral and Grantor shall be credited with proceeds of the sale.


     7.4. Deposit Accounts. If any Event of Default shall have occurred and be
continuing, the Secured Party may apply the balance from any Deposit Account or
instruct the bank at which any Deposit Account is maintained to pay the balance
of any Deposit Account to or for the benefit of the Secured Party.


     7.5. Investment Related Property. Each Grantor recognizes that, by reason
of certain prohibitions contained in the Securities Act and applicable state
securities laws, the Secured Party may be compelled, with respect to any sale
of all or any part of the Investment Related Property conducted without prior
registration or qualification of such Investment Related Property under the
Securities Act and/or such state securities laws, to limit purchasers to those
who will agree, among other things, to acquire the Investment Related Property
for their own account, for investment and not with a view to the distribution
or resale thereof. Each Grantor acknowledges that any such private sale may be
at prices and on terms less favorable than those obtainable through a public
sale without such restrictions (including a public offering made pursuant to a
registration statement under the Securities Act) and, notwithstanding such
circumstances, each Grantor agrees that any such private sale shall be deemed
to have been made in a commercially reasonable manner and that the Secured
Party shall have no obligation to engage in public sales and no obligation to
delay the sale of any Investment Related Property for the period of time
necessary to permit the issuer thereof to register it for a form of public sale
requiring registration under the Securities Act or under applicable state
securities laws, even if such issuer would, or should, agree to so register it.
If the Secured Party determines to exercise its right to sell any or all of
the Investment Related Property, upon written request, each Grantor


32






 



 shall and shall cause each issuer of any Pledged Stock to be sold
hereunder, each partnership and each limited liability company from time to
time to furnish to the Secured Party all such information as the Secured Party
may request in order to determine the number and nature of interest, shares or
other instruments included in the Investment Related Property which may be sold
by the Secured Party in exempt transactions under the Securities Act and the
rules and regulations of the Securities and Exchange Commission thereunder, as
the same are from time to time in effect.


     7.6. Intellectual Property.


          (a) Anything contained herein to the contrary notwithstanding, upon the
occurrence and during the continuation of an Event of Default:




		
	 	     (i) the Secured Party shall have the right (but not the obligation)
to bring suit or otherwise commence any action or proceeding in the name
of any Grantor, the Secured Party or otherwise, in the Secured Party’s
sole discretion, to enforce any Intellectual Property, in which event
such Grantor shall, at the request of the Secured Party, do any and all
lawful acts and execute any and all documents required by the Secured
Party in aid of such enforcement and such Grantor shall promptly, upon
demand, reimburse and indemnify the Secured Party as provided in Section
10 hereof in connection with the exercise of its rights under this
Section, and, to the extent that the Secured Party shall elect not to
bring suit to enforce any Intellectual Property as provided in this
Section, each Grantor agrees to use all reasonable measures, whether by
action, suit, proceeding or otherwise, to prevent the infringement of any
of the Intellectual Property by others and for that purpose agrees to
diligently maintain any action, suit or proceeding against any Person so
infringing as shall be necessary to prevent such infringement;
	 
	 	     (ii) upon written demand from the Secured Party, each Grantor shall
grant, assign, convey or otherwise transfer to the Secured Party all of
such Grantor’s right, title and interest in and to the Intellectual
Property and shall execute and deliver to the Secured Party such
documents as are necessary or appropriate to carry out the intent and
purposes of this Agreement;
	 
	 	     (iii) each Grantor agrees that such an assignment and/or recording
shall be applied to reduce the Secured Obligations outstanding only to
the extent that the Secured Party receives cash proceeds in respect of
the sale of, or other realization upon, the Intellectual Property;
	 
	 	     (iv) within five (5) Business Days after written notice from the
Secured Party, each Grantor shall make available to the Secured Party, to
the extent within such Grantor’s power and authority, such personnel in
such Grantor’s employ on the date of such Event of Default as the Secured
Party may reasonably designate, by name, title or job responsibility, to
permit such Grantor to continue, directly or indirectly, to produce,
advertise and sell the products and services sold or delivered by such
Grantor under or in connection with the Trademarks, Trademark Licenses,
such persons to be available to perform their prior functions on the
Secured Party’s behalf and to be compensated by the



33






 




		
	 	Secured Party at such Grantor’s expense on a per diem, pro-rata
basis consistent with the salary and benefit structure applicable to each
as of the date of such Event of Default; and




		
	 	     (v) the Secured Party shall have the right to notify, or require
each Grantor to notify, any obligors with respect to amounts due or to
become due to such Grantor in respect of the Intellectual Property, of
the existence of the security interest created herein, to direct such
obligors to make payment of all such amounts directly to the Secured
Party, and, upon such notification and at the expense of such Grantor, to
enforce collection of any such amounts and to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the
same extent as such Grantor might have done;




	 	(1)	 	all amounts and proceeds (including checks and other
instruments) received by Grantor in respect of amounts due to such
Grantor in respect of the Collateral or any portion thereof shall be
received in trust for the benefit of the Secured Party hereunder,
shall be segregated from other funds of such Grantor and shall be
forthwith paid over or delivered to the Secured Party in the same
form as so received (with any necessary endorsement) to be held as
cash Collateral and applied as provided by Section 7.7 hereof; and
	 
	 	(2)	 	Grantor shall not adjust, settle or compromise the amount or
payment of any such amount or release wholly or partly any obligor
with respect thereto or allow any credit or discount thereon.



          (b) If (i) an Event of Default shall have occurred and, by reason of cure,
waiver, modification, amendment or otherwise, no longer be continuing, (ii) no
other Event of Default shall have occurred and be continuing, (iii) an
assignment or other transfer to the Secured Party of any rights, title and
interests in and to the Intellectual Property shall have been previously made
and shall have become absolute and effective, and (iv) the Secured Obligations
shall not have become immediately due and payable, upon the written request of
any Grantor, the Secured Party shall promptly execute and deliver to such
Grantor, at such Grantor’s sole cost and expense, such assignments or other
transfer as may be necessary to reassign to such Grantor any such rights, title
and interests as may have been assigned to the Secured Party as aforesaid,
subject to any disposition thereof that may have been made by the Secured
Party; provided, after giving effect to such reassignment, the Secured Party’s
security interest granted pursuant hereto, as well as all other rights and
remedies of the Secured Party granted hereunder, shall continue to be in full
force and effect; and provided further, the rights, title and interests so
reassigned shall be free and clear of any Liens granted by or on behalf of the
Secured Party and the Secured Parties.



          (c) Solely for the purpose of enabling the Secured Party to exercise
rights and remedies under this Section 7 and at such time as the Secured Party
shall be lawfully entitled to exercise such rights and remedies, each Grantor
hereby grants to the Secured Party, to the extent it has the right to do so, an
irrevocable, nonexclusive license (exercisable without payment of royalty or
other compensation to such Grantor), subject, in the case of Trademarks, to
sufficient rights to quality control and inspection in favor of such Grantor to
avoid the risk of invalidation



34






 


of said Trademarks, to use, operate under, license, or sublicense any
Intellectual Property now owned or hereafter acquired by such Grantor, and
wherever the same may be located.


     7.7. Cash Proceeds. In addition to the rights of the Secured Party
specified in Section 4.3 with respect to payments of Receivables, if an Event
of Default shall occur and be continuing upon the request of the Secured Party,
all proceeds of any Collateral received by any Grantor consisting of cash,
checks and other near-cash items (collectively, “Cash Proceeds”) shall be held
by such Grantor in trust for the Secured Party, segregated from other funds of
such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over
to the Secured Party in the exact form received by such Grantor (duly indorsed
by such Grantor to the Secured Party, if required) and (A) held by the Secured
Party in the Collateral Account for the ratable benefit of the Lenders, as
collateral security for the Secured Obligations (whether matured or unmatured)
and/or (B) then or at any time thereafter may be applied by the Secured Party
against the Secured Obligations then due and owing.


     7.8. Release of Liens.


          (a) In the event that all or any part of the Collateral (i) is sold or
otherwise disposed of to a Person that is not the Company or a Subsidiary of
the Company in connection with a sale or other disposition permitted by the
Credit Documents, or (ii) the release of which from the Liens and security
interests created under any of the Credit Documents has been consented to by of
the Requisite Lenders, then, in each case, the Secured Party, at the request
and expense of the Company, will duly release from the Liens and security
interest created under any of the Credit Documents and assign, transfer and
deliver to the applicable Grantor (without recourse and without any
representation or warranty) such of the Collateral as is then being (or has
been) so sold or released and as may be in possession of Secured Party and has
not theretofore been released or disposed of pursuant to this Agreement or the
other Credit Documents and will execute all instruments and take such other
action as may be reasonably necessary to accomplish the same. In the event
that the subordination of any or all of the Liens or security interests created
under any of the Credit Documents is consented to by the Requisite Lenders, in
whole or in part, then, in each such case, the Secured Party, at the request
and expense of the Company, will duly subordinate the Liens and security
interests created under any of the Credit Documents in such manner and pursuant
to such documents as have been consented to by the Requisite Lenders and will
execute all instruments and take such other action as may be reasonably
necessary to accomplish same.



          (b) In the event that the Company or a Subsidiary of the Company enters
into an “Irrevocable Right of Use” agreement, capacity agreement, lease or
similar agreement (in each case, as permitted by the Credit Documents)
conveying to a third party the right to use telecommunications facilities owned
by the Company or any of its Subsidiaries, and such right of use continues for
substantially all of the useful life of such facilities, the Secured Party, at
the request and expense of Company, will duly release from the security
interest created under any of the Credit Documents and assign, transfer and
deliver to the applicable Grantor (without recourse and without any
representation or warranty) such of the Collateral as is then being (or has
been) so conveyed and as may be in possession of Secured Party and has not
theretofore been released or disposed of pursuant to this Agreement and will
execute all instruments and take such other action as may be reasonably
necessary to accomplish the same.



35






 


SECTION 8. COLLATERAL AGENT.


          The Secured Party has been appointed to act as collateral agent hereunder
by the Lenders. The Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action
(including, without limitation, the release or substitution of Collateral),
solely in accordance with this Agreement and the Credit Agreement. In
furtherance of the foregoing provisions of this Section, each Lender and Lender
Counterparty, by its acceptance of the benefits hereof, agrees that it shall
have no right individually to realize upon any of the Collateral hereunder, it
being understood and agreed by such Lender or Lender Counterparty that all
rights and remedies hereunder may be exercised solely by the Secured Party for
the benefit of the Lenders and Lender Counterparties in accordance with the
terms of this Section. The Secured Party may resign as collateral agent or be
removed and a successor agent may be appointed, all in accordance with Section
9.7 of the Credit Agreement.



SECTION 9. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.


          This Agreement shall create a continuing security interest in the
Collateral and shall remain in full force and effect until the payment in full
of all Secured Obligations, be binding upon each Grantor, its successors and
assigns, and inure, together with the rights and remedies of the Secured Party
hereunder, to the benefit of the Secured Party and its successors, transferees
and assigns, for the benefit and on behalf of the Lenders and Lender
Counterparties. Without limiting the generality of the foregoing, any Secured
Party may assign or otherwise transfer any Secured Obligations held by it to
any other Person subject to and in compliance with the terms of the Credit
Agreement, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to the Secured Party herein or otherwise.
Upon the payment in full of all Secured Obligations, the security interest
granted hereby shall terminate hereunder and of record and all rights to the
Collateral shall revert to Grantors. Upon any such termination the Secured
Party shall, at Grantors’ expense, execute and deliver to Grantors such
documents as Grantors shall reasonably request to evidence such termination.



SECTION 10. STANDARD OF CARE; SECURED PARTY MAY PERFORM.


          The powers conferred on the Secured Party hereunder are solely to protect
its interest, for the benefit and on behalf of the Lenders and Lender
Counterparties, in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, the Secured Party shall have no duty as to
any Collateral or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to any Collateral. The
Secured Party shall be deemed to have exercised reasonable care in the custody
and preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which the Secured Party accords its own
property. Neither the Secured Party nor any of its directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon all or any part of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or otherwise. If any Grantor fails to perform any
agreement contained herein, the Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of



36






 


the Secured Party incurred in connection therewith shall be payable by
each Grantor under Section 10.2 of the Credit Agreement.


SECTION 11. MISCELLANEOUS.


          Any notice required or permitted to be given under this Agreement shall be
given in accordance with Section 10.1 of the Credit Agreement. No failure or
delay on the part of the Secured Party in the exercise of any power, right or
privilege hereunder or under any other Transaction Document shall impair such
power, right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of any
other power, right or privilege. The terms and provisions of this Agreement
are in addition to and not in limitation of the provisions contained in the
other Credit Documents. All rights and remedies existing under this Agreement
and the other Credit Documents are cumulative to, and not exclusive of, any
rights or remedies otherwise available. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby. All
covenants hereunder shall be given independent effect so that if a particular
action or condition is not permitted by any of such covenants, the fact that it
would be permitted by an exception to, or would otherwise be within the
limitations of, another covenant shall not avoid the occurrence of a Default or
an Event of Default (as each term is defined in the Credit Agreement) if such
action is taken or condition exists. This Agreement shall be binding upon and
inure to the benefit of the Secured Party and Grantors and their respective
successors and assigns. No Grantor shall, without the prior written consent of
the Secured Party given in accordance with the Credit Agreement, assign any
right, duty or obligation hereunder. This Agreement and the other Credit
Documents embody the entire agreement and understanding between Grantors and
the Secured Party and supersede all prior agreements and understandings between
such parties relating to the subject matter hereof and thereof. Accordingly,
the Credit Documents may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties. There are no
unwritten oral agreements between the parties. This Agreement may be executed
in one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.



          THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS CONFLICTS OF LAW
PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATION LAW).



37






 


          IN WITNESS WHEREOF, each Grantor and the Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.




	 	 	 	 	 
	 	 	XO COMMUNICATIONS, INC.,
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



38






 





GRANTORS:



	 	ITC

LHP EQUIPMENT, INC.

XO ALABAMA, INC.

XO ARIZONA, INC.

XO CALIFORNIA, INC.

XO COLORADO, LLC

XO CONNECTICUT, INC.

XO DATA SERVICES, LLC

XO DELAWARE, INC.

XO DOMESTIC HOLDINGS, INC.

XO D.C., INC.

XO FLORIDA, INC.

XO GEORGIA, INC.

XO HAWAII, INC.

XO IDAHO, INC.

XO ILLINOIS, INC.

XO INDIANA, INC.

XO INTERACTIVE, INC.

XO INTERCITY HOLDINGS NO. 1, LLC

XO INTERCITY HOLDINGS NO. 2, LLC

XO INTERNATIONAL HOLDINGS, INC.

XO INTERNATIONAL, INC.

XO KANSAS, INC.

XO KENTUCKY, INC.

XO LMDS HOLDINGS NO. 1, INC.

XO LONG DISTANCE SERVICES, INC.

XO LONG DISTANCE SERVICES (VIRGINIA), LLC

XO LOUISIANA, INC.

XO MAINE, INC.

XO MANAGEMENT SERVICES, INC.

XO MANAGEMENT SERVICES NEVADA, INC.




	 	 	 
	By:	 	 
	 	 	

	 	 	
Name:
	 	 	
Title:



39






 


GRANTORS (CONTINUED):



	 	XO MARYLAND, LLC

XO MASSACHUSETTS, INC.

XO MICHIGAN, INC.

XO MINDSHARE, LLC

XO MINNESOTA, LLC

XO MISSISSIPPI, INC.

XO MISSOURI, INC.

XO NEVADA MERGER SUB, INC.

XO NEW HAMPSHIRE, INC.

XO NEW JERSEY, INC.

XO NEW MEXICO, INC.

XO NEW YORK, INC.

XO NORTH CAROLINA, INC.

XO OHIO, INC.

XO ONE, INC.

XO OREGON, INC.

XO PENNSYLVANIA, INC.

XO RHODE ISLAND, INC.

XO SERVICES, INC.

XO SOUTH CAROLINA, INC.

XO TENNESSEE, INC.

XO TEXAS, INC.

XO UTAH, INC.

XO VIRGINIA, LLC

XO WASHINGTON, INC.

XO WEST VIRGINIA, INC.

XO WISCONSIN, INC.




	 	 	 
	By:	 	 
	 	 	

	 	 	
Name:
	 	 	
Title:



40






 



	 	 	 	 	 
	 	 	MIZUHO CORPORATE BANK, TD
	 	 	as the Secured Party
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



41






 


     
EXHIBIT A

TO AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT


PLEDGE SUPPLEMENT



          This PLEDGE SUPPLEMENT, dated [mm/dd/yy], is delivered pursuant to the
Amended and Restated Pledge and Security Agreement, dated as of [mm/dd/yy] (as
it may be from time to time amended, restated, modified or supplemented, the
“Security Agreement”), among [NAME OF COMPANY], the other Grantors named
therein, and [NAME OF AGENT], as the Secured Party. Capitalized terms used
herein not otherwise defined herein shall have the meanings ascribed thereto in
the Security Agreement.



          Grantor hereby confirms the grant to the Secured Party set forth in the
Security Agreement of, and does hereby grant to the Secured Party, a security
interest in all of Grantor’s right, title and interest in and to all Collateral
to secure the Secured Obligations, in each case whether now or hereafter
existing or in which Grantor now has or hereafter acquires an interest and
wherever the same may be located. Grantor represents and warrants that the
attached Supplements to Schedules accurately and completely set forth all
additional information required pursuant to the Security Agreement and hereby
agrees that such Supplements to Schedules shall constitute part of the
Schedules to the Security Agreement.



          IN WITNESS WHEREOF, Grantor has caused this Pledge Supplement to be duly
executed and delivered by its duly authorized officer as of [mm/dd/yy].




	 	 	 	 	 
	 	 	[NAME OF GRANTOR]
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:



EXHIBIT A-1






 


EXHIBIT B

TO AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT



FORM OF COLLATERAL ACCOUNT CONTROL AGREEMENT



     This Collateral Account Control Agreement dated as of            , 200[ ]
among             (the “Debtor”),            , as agent for
the Lenders and Lender Counterparties (the “Agent”) and             in its
capacity as a “securities intermediary” (as defined in Section 8-102 of the UCC
and a “bank” as defined in Section 9-102 of the UCC (in such capacities, the
“Financial Institution”). Capitalized terms used but not defined herein shall
have the meaning assigned in the Amended and Restated Pledge and Security
Agreement dated as of            , 2002 between the Debtor, the other grantors
therein and the Agent (the “Security Agreement”). All references herein to the
“UCC” shall mean the Uniform Commercial Code as in effect in the State of New
York.



	1.	 	Establishment of Collateral Accounts. The Financial Institution hereby
confirms and agrees that:




	 	(a)	 	The Financial Institution has established the following
accounts:




	 	(i)	 	the "[identify exact title of account]” with
account number [identify account number] in the name
“[identify exact title of account]” in the name of “[identify
name of account holder]” (the “            Account”);
	 
	 	(ii)	 	the “[identify exact title of account]” with
account number [identify account number] in the name
“[identify exact title of account]” in the name of “[identify
name of account holder]” (the “            Account”); and
	 
	 	(iii)	 	the "[identify exact title of account]” with
account number [identify account number] in the name
“[identify exact title of account]” in the name of “[identify
name of account holder]” (the “            Account”).



Each such account and any successor account, being referred to herein
individually as a “Pledged Account” and collectively as the “Pledged Accounts.”
The Financial Institution shall not change the name or account number of any
Pledged Account without the prior written consent of the Secured Party;



	 	(b)	 	Each of the Pledged Accounts is either a “securities account”
(as defined in Section 8-501 of the UCC) or a “deposit account” as
defined in Section 9-102(a)(29) of the UCC). The Financial
Intermediary acknowledges and agrees that the           Account[s] are
intended to be deposit accounts and the             Account[s] are
intended to be securities accounts. Notwithstanding such intention,
as used herein “Deposit Account” shall mean any Pledged Account
which is determined to be a “deposit account” (within the meaning of
Section 9-



EXHIBIT B-1






 



	 	 	 	102(a)(29) of the UCC and “Securities Account” shall mean any
Pledged Account which is determined to be a “securities account”
(within the meaning of Section 8-501 of the UCC .
	 
	 	(c)	 	All securities or other property underlying any financial
assets credited to any Securities Account shall be registered in the
name of the Financial Institution, indorsed to the Financial
Institution or in blank or credited to another securities account
maintained in the name of the Financial Institution and in no case
will any financial asset credited to any Securities Account be
registered in the name of the Debtor, payable to the order of the
Debtor or specially indorsed to the Debtor except to the extent the
foregoing have been specially indorsed to the Financial Institution
or in blank;
	 
	 	(d)	 	All property delivered to the Financial Institution pursuant
to the Security Agreement will be promptly credited to one of the
Pledged Accounts.




	2.	 	“Financial Assets” Election. The Financial Institution hereby agrees
that each item of property (whether investment property, financial asset,
security, instrument or cash) credited to any Pledged Account that is a
Securities Account shall be treated as a “financial asset” within the
meaning of Section 8-102(a)(9) of the UCC.
	 
	3.	 	Control of the Pledged Accounts. If at any time the Financial
Institution shall receive any order from the Agent directing transfer or
redemption of any financial asset relating to a Pledged Account or any
instruction originated by the Agent directing the disposition of funds in
a Pledged Account, the Financial Institution shall comply with such
entitlement order or instruction without further consent by the Debtor or
any other person.
	 
	4.	 	Subordination of Lien; Waiver of Set-Off. In the event that the
Financial Institution has or subsequently obtains by agreement, by
operation of law or otherwise a security interest in any Pledged Account
or any security entitlement or cash credited thereto, the Financial
Institution hereby agrees that such security interest shall be subordinate
to the security interest of the Agent. The financial assets, money and
other items credited to any Pledged Account will not be subject to
deduction, set-off, banker’s lien, or any other right in favor of any
person other than the Secured Party (except that the Financial Institution
may set off (i) all amounts due to the Financial Institution in respect of
customary fees and expenses for the routine maintenance and operation of
the respective Pledged Account and (ii) the face amount of any checks
which have been credited to such Pledged Account but are subsequently
returned unpaid because of uncollected or insufficient funds).
	 
	5.	 	Choice of Law. This Agreement shall each be governed by the laws of the
State of New York. Regardless of any provision in any other agreement,
for purposes of the UCC, New York shall be deemed to be the Financial
Institution’s jurisdiction (within the



EXHIBIT B-2






 




	 	 	meaning of Section 9-304 of the UCC and Section 8-110 of the UCC). The
Pledged Accounts shall be governed by the laws of the State of New York.
	 
	6.	 	Conflict with Other Agreements.




	 	(a)	 	In the event of any conflict between this Agreement (or any
portion thereof) and any other agreement now existing or hereafter
entered into, the terms of this Agreement shall prevail;
	 
	 	(b)	 	No amendment or modification of this Agreement or waiver of
any right hereunder shall be binding on any party hereto unless it
is in writing and is signed by all of the parties hereto;
	 
	 	(c)	 	The Financial Institution hereby confirms and agrees that:




	 	(i)	 	There are no other agreements entered into
between the Financial Institution and the Debtor with respect
to any Pledged Account [except for [identify other agreements]
(the “Account Agreements”)];
	 
	 	(ii)	 	It has not entered into, and until the
termination of the this agreement will not enter into, any
agreement with any other person relating the Pledged Accounts
and/or any financial assets credited thereto pursuant to which
it has agreed to comply with entitlement orders (as defined in
Section 8-102(a)(8) of the UCC) or instructions (within the
meaning of Section 9-104 of the UCC) of such other person; and
	 
	 	(iii)	 	It has not entered into, and until the
termination of this agreement will not enter into, any
agreement with the Debtor or the Agent purporting to limit or
condition the obligation of the Financial Institution to
comply with entitlement orders or instructions.




	7.	 	Adverse Claims. Except for the claims and interest of the Agent and of
the Debtor in the Pledged Accounts, the Financial Institution does not
know of any lien on or claim to, or interest in, any Pledged Account or in
any “financial asset” (as defined in Section 8-102(a) of the UCC) credited
thereto. If any person asserts any lien, encumbrance or adverse claim
(including any writ, garnishment, judgment, warrant of attachment,
execution or similar process) against the Pledged Accounts or in any
financial asset carried therein, the Financial Institution will promptly
notify the Agent and the Debtor thereof.
	 
	8.	 	Maintenance of Accounts. In addition to, and not in lieu of, the
obligation of the Financial Institution to honor entitlement orders and
instructions as set forth in Section 3 hereof, the Financial Institution
agrees to maintain the Pledged Accounts as follows:



EXHIBIT B-3






 



	 	(a)	 	Notice of Sole Control. If at any time the Agent delivers to
the Financial Institution a Notice of Sole Control in substantially
the form set forth in Exhibit A hereto, the Financial Institution
agrees that after receipt of such notice, it will take all
instruction with respect to the Pledged Accounts solely from the
Agent and shall not comply with instructions or entitlement orders
of any other person.
	 
	 	(b)	 	Statements and Confirmations. The Financial Institution will
promptly send copies of all statements, confirmations and other
correspondence concerning (i) any Securities Account and/or any
financial assets credited thereto and (ii) any Deposit Account,
simultaneously to each of the Debtor and the Agent at the address
for each set forth in Section 12 of this Agreement.
	 
	 	(c)	 	Tax Reporting. All items of income, gain, expense and loss
recognized in any Securities Account and all interest, if any,
relating to any Deposit Account, shall be reported to the Internal
Revenue Service and all state and local taxing authorities under the
name and taxpayer identification number of the Debtor.
	 
	 	(d)	 	Voting Rights. Until such time as the Financial Institution
receives a Notice of Sole Control pursuant to subsection (a) of this
Section 8, the Debtor shall direct the Financial Institution with
respect to the voting of any financial assets credited to the
Pledged Accounts.
	 
	 	(e)	 	Permitted Investments. Until such time as the Financial
Institution receives a Notice of Sole Control signed by the Agent,
the Debtor shall direct the Financial Institution with respect to
the selection of investments to be made for any Pledged Account that
is a securities account; provided, however, that the Financial
Institution shall not honor any instruction to purchase any
investments other than investments of a type describe on Exhibit B
hereto.




	9.	 	Representations, Warranties and Covenants of the Financial Institution.
The Financial Institution hereby makes the following representations,
warranties and covenants:




	 	(a)	 	The Pledged Accounts have each been established as set forth
in Section 1 and such Pledged Accounts will be maintained in the
manner set forth herein until termination of this Agreement; and
	 
	 	(b)	 	This Collateral Account Control Agreement is the valid and
legally binding obligations of the Financial Institution.




	10.	 	Indemnification of Financial Institution. The Debtor and the Agent
hereby agree that (a) the Financial Institution is released from any and
all liabilities to the Debtor and the Agent arising from the terms of this
agreement and the compliance of the Financial Institution with the terms
hereof, except to the extent that such liabilities arise from the
Financial Institution’s negligence and (b) the Debtor, its successors and
assigns shall at all times indemnify and save harmless the Financial
Institution from and against any and all claims, actions and suits of
others arising out of the terms of this agreement or the compliance of the
Financial Institution with the terms hereof, except to the extent that



EXHIBIT B-4






 




	 	 	such arises from the Financial Institution’s negligence, and from and
against any and all liabilities, losses, damages, costs, charges, counsel
fees and other expenses of every nature and character arising by reason
of the same, until the termination of this agreement.
	 
	11.	 	Successors; Assignment. The terms of this Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors or heirs and personal representatives who
obtain such rights solely by operation of law. The Agent may assign its
rights hereunder only with the express written consent of the Financial
Institution and by sending written notice of such assignment to the
Debtor.
	 
	12.	 	Notices. Any notice, request or other communication required or
permitted to be given under this Agreement shall be in writing and deemed
to have been properly given when delivered in person, or when sent by
telecopy or other electronic means and electronic confirmation of error
free receipt is received or two days after being sent by certified or
registered United States mail, return receipt requested, postage prepaid,
addressed to the party at the address set forth below.
	 
	 	 	Debtor:
	 
	 	 	Agent:
	 
	 	 	Financial Institution:




		
	 	     Any party may change his address for notices in the manner set forth
above.




	13.	 	Termination. The obligations of the Financial Institution to the Agent
pursuant to this Control Agreement shall continue in effect until the
security interests of the Agent in each of the Pledged Accounts have been
terminated pursuant to the terms of the Security Agreement and the Agent
has notified the Financial Institution of such termination in writing.
The Agent agrees to provide Notice of Termination in substantially the
form of Exhibit C hereto to the Financial Institution upon the request of
the Debtor on or after the termination of the Agent’s security interest in
the Pledged Accounts pursuant to the terms of the Security Agreement. The
termination of this Control Agreement shall not terminate the Pledged
Accounts or alter the obligations of the Financial Institution to the
Debtor pursuant to any other agreement with respect to the Pledged
Accounts.
	 
	14.	 	Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument,
and any party hereto may execute this Agreement by signing and delivering
one or more counterparts.




	 	 	 	 	 
	 	 	[NAME OF DEBTOR]
	 	 	 	 	 
	 	 	By:	 	 
	 	 	 	

	 	 	Name:
	 	 	Title:



EXHIBIT B-5






 



	 	 	 	 	 
	 	 	

	 	 	as Agent
	 	 	 	 	 
	 	 	By:	 	 
	 	 	 	

	 	 	Name:
	 	 	Title:
	 	 	 	 	 
	 	 	[NAME OF INSTITUTION SERVING AS

FINANCIAL INSTITUTION]
	 	 	 	 	 
	 	 	By:	 	 
	 	 	 	

	 	 	Name:
	 	 	Title:



EXHIBIT B-6






 


     
Exhibit A


[Letterhead of Agent]



	 	[Date]



[Name and Address of Financial Institution]


Attention:                          


Re: Notice of Sole Control


Ladies and Gentlemen:


          As referenced in the Collateral Account Control Agreement, dated            ,
200  , among [insert name of the Debtor], you and the undersigned (a copy of
which is attached) we hereby give you notice of our sole control over each of
the Pledged Accounts and all financial assets or funds credited thereto. You
are hereby instructed not to accept any direction, instructions or entitlement
orders or instructions with respect to the Pledged Accounts or the financial
assets or funds credited thereto from any person other than the undersigned,
unless otherwise ordered by a court of competent jurisdiction.



          You are instructed to deliver a copy of this notice by facsimile
transmission to [insert name of the Debtor].




	 	 	 	 	 
	 	 	Very truly yours,
	 	 	 	 	 
	 	 	

	 	 	as Agent
	 	 	 	 	 
	 	 	By:	 	 
	 	 	 	

	 	 	Name:
	 	 	Title:



cc: [Name of Debtor]


 






 


     
Exhibit B


Permitted Investments


 






 


     


     Exhibit C


[Letterhead of Agent]



	 	[Date]



[Name and Address of Financial Institution]


Attention:



	 	Re: 	 	Termination of Collateral Account
Control Agreement



          You are hereby notified that the Collateral Account Control Agreement
between you, [the Debtor] and the undersigned (a copy of which is attached) is
terminated and you have no further obligations to the undersigned pursuant to
such Agreement. Notwithstanding any previous instructions to you, you are
hereby instructed to accept all future directions with respect to account
number(s)             from [the Debtor]. This notice terminates any
obligations you may have to the undersigned with respect to such account,
however nothing contained in this notice shall alter any obligations which you
may otherwise owe to [the Debtor] pursuant to any other agreement.



          You are instructed to deliver a copy of this notice by facsimile
transmission to [insert name of Debtor].




	 	 	 	 	 
	 	 	Very truly yours,
	 	 	 	 	 
	 	 	

	 	 	as Agent
	 	 	 	 	 
	 	 	By:	 	 
	 	 	 	

	 	 	Name:
	 	 	Title:




cc: [Name of Debtor]