Document:

Exhibit
10.28

 

EXECUTION COPY

 

AMENDMENT NO. 3
AND WAIVER

 

dated as of August
14, 2002

 

to

 

SEVENTH AMENDED
AND RESTATED CREDIT AGREEMENT

 

dated as of June
26, 2001

 

CSC HOLDINGS, INC. (formerly known as Cablevision
Systems Corporation), a Delaware corporation (the “Company”), the
Restricted Subsidiaries (as defined in the Credit Agreement referred to below)
that are parties to such Credit Agreement, the banks that are parties to such
Credit Agreement (the “Banks”) and TORONTO DOMINION (TEXAS), INC., as
Administrative Agent (the “Administrative Agent”), agree as follows:

 

ARTICLE I

AMENDMENT  

 

Section 1.1.            Credit
Agreement.  Reference is made to the
Seventh Amended & Restated Credit Agreement, dated as of June 26, 2001, as
amended by Amendment No. 1 thereto, dated as of July 20, 2001 and Amendment No.
2 thereto, dated as of November 19, 2001 (as so amended, the “Credit
Agreement”), among the Company, the Restricted Subsidiaries party thereto,
the Banks, the Administrative Agent, TD Securities (USA) Inc. and Banc of
America Securities LLC, as Co-Lead Arrangers and Co-Book Managers, Bank of
America, N.A., as Syndication Agent, The Bank of New York and The Bank of Nova
Scotia, as Co-Documentation Agents and Arrangers, The Chase Manhattan Bank, as
Co-Documentation Agent, Fleet National Bank, J.P. Morgan Securities Inc.,
Mizuho Corporate Bank, Ltd. and Salomon Smith Barney Inc., as Arrangers, Bank
of Montreal, Barclays Bank plc, BNP Paribas, Credit Lyonnais New York Branch,
Dresdner Bank AG, New York and Grand Cayman Branches, Wachovia Bank,
National Association (f/k/a First Union National Bank) and Royal Bank of
Canada, as Managing Agents and Societe Generale and SunTrust Bank, as
Co-Agents.  Terms used in this Amendment
No. 3  and
Waiver to the Seventh Amended and Restated Credit Agreement (this “Amendment”)
that are not otherwise defined herein shall have the meanings given to such
terms in the Credit Agreement.  The
Credit Agreement as amended by this Amendment (the “Amended Credit Agreement”)
is and shall continue to be in full force and effect and is hereby in all
respects ratified and confirmed.

 

 

Section 1.2.            Amendment.  Upon and after the Third Amendment Effective
Date (as defined in Section 4.5 hereof),

 

(a)                                  Clauses
(a) and (b) of the definition of “Applicable Margin” in Section 1.01 of the
Credit Agreement shall be amended and restated in their entirety as follows:

 

(a)               With respect to Base Rate Loans

 

(i)            1.500% at all times during any
Applicable Period if the Cash Flow Ratio as at the end of the immediately
preceding Quarter was greater than 6.25 to 1;

 

(ii)           1.000% at all times during any
Applicable Period if the Cash Flow Ratio as at the end of the immediately
preceding Quarter was less than or equal to 6.25 to 1 and greater than 6.00 to
1;

 

(iii)          0.750% at all times during any
Applicable Period if the Cash Flow Ratio as at the end of the immediately
preceding Quarter was less than or equal to 6.00 to 1 and greater than 5.50 to
1;

 

(iv)          0.375% at all times during any
Applicable Period if the Cash Flow Ratio as at the end of the immediately
preceding Quarter was less than or equal to 5.50 to 1 and greater than 5.00 to
1;

 

(v)           0.250% at all times during any
Applicable Period if the Cash Flow Ratio as at the end of the immediately
preceding Quarter was less than or equal to 5.00 to 1 and greater than 4.50 to
1;

 

(vi)          0.000% at all times during any
Applicable Period if the Cash Flow Ratio as at the end of the immediately
preceding Quarter was less than or equal to 4.50 to 1; and

 

(b)           With respect to Eurodollar Loans

 

(i)            2.500% at all times during any
Applicable Period if the Cash Flow Ratio as at the end of the immediately
preceding Quarter was greater than 6.25 to 1;

 

(ii)           2.000% at all times during any
Applicable Period if the Cash Flow Ratio as at the end of the immediately
preceding Quarter was less than or equal to 6.25 to 1 and greater than 6.00 to
1;

 

(iii)      1.750% at all times during any Applicable
Period if the Cash Flow Ratio as at the end of the immediately preceding
Quarter was less than or equal to 6.00 to 1 and greater than 5.50 to 1;

 

2

 

(iv)          1.375% at all times during any
Applicable Period if the Cash Flow Ratio as at the end of the immediately
preceding Quarter was less than or equal to 5.50 to 1 and greater than 5.00 to
1;

 

(v)           1.250% at all times during any
Applicable Period if the Cash Flow Ratio as at the end of the immediately
preceding Quarter was less than or equal to 5.00 to 1 and greater than 4.50 to
1;

 

(vi)          1.000% at all times during any
Applicable Period if the Cash Flow Ratio as at the end of the immediately
preceding Quarter was less than or equal to 4.50 to 1 and greater than 4.00 to
1;

 

(vii)         0.875% at all times during any
Applicable Period if the Cash Flow Ratio as at the end of the immediately
preceding Quarter was less than or equal to 4.00 to 1.

 

(b)           Section 9.10(x) of the Credit
Agreement shall be amended and restated in its entirety as follows:

 

(x)  Capital Lease Obligations in respect of any
lease of (or other agreement conveying the right to use) digital set top boxes
and the $25,000,000 payment obligation of the Company pursuant to the
settlement Agreement, dated August 7, 2002, between the Company and Sony
Electronics, Inc.  (the “Sony Obligation”), provided that the aggregate
capitalized amount of such Capital Lease Obligations (together with all such
Capital Lease Obligations of each Digital Video Subsidiary) at any one time
outstanding plus the total outstanding principal amount of the Sony
Obligation, shall not exceed $1,250,000,000; and

 

ARTICLE II

WAIVER

 

Upon and after the Third Amendment Effective Date (as
defined in Section 4.5 hereof), the Majority Banks hereby waive compliance with
Section 9.22 of the Credit Agreement with respect to, but only with respect to,
the requirement that the restructuring charges in a total amount up to
$80,000,000 to be taken by the Company during the calendar quarter ending
September 30, 2002 (the “Restructuring Charge”) be annualized in the
calculation of Annualized Operating Cash Flow for the periods ended August 31,
2002, September 30, 2002, October 31, 2002 and November 30, 2002.  For the avoidance of doubt, the parties
hereby confirm that, with respect to Section 3.03 and all other provisions of
the Credit Agreement, there is no waiver of compliance with the requirement
that the Restructuring Charge be annualized in the calculation of Annualized
Operating Cash Flow.

 

3

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES  

 

Section 3.1.            Representations
and Warranties.  Each of the Company
and the Restricted Subsidiaries that are parties to the Credit Agreement
represents and warrants as follows:

 

(a)           Power;
Binding Agreements.  Each of the
Company and such Restricted Subsidiaries has full power, authority and legal
right to make and perform this Amendment and the Amended Credit Agreement.  This Amendment and the Amended Credit
Agreement constitute the legal, valid and binding obligations of each of the Company
and such Restricted Subsidiaries, enforceable in accordance with their terms
(except for limitations on enforceability under bankruptcy, reorganization,
insolvency and other similar laws affecting creditors’ rights generally and
limitations on the availability of the remedy of specific performance imposed
by the application of general equitable principles).

 

(b)           Authority;
No Conflict.  The making and
performance of this Amendment and the Amended Credit Agreement by each of the
Company and such Restricted Subsidiaries have been duly authorized by all
necessary action and do not and will not (i) violate any provision of any laws,
orders, rules or regulations presently in effect (other than violations that,
singly or in the aggregate, have not had and are not likely to have a
Materially Adverse Effect), or any provision of any of the Company’s or the
Restricted Subsidiaries’ respective partnership agreements, charters or by-laws
presently in effect; (ii) result in the breach of, or constitute a default or
require any consent under, any existing indenture or other agreement or
instrument to which the Company or any of the Restricted Subsidiaries is a
party or by which their respective properties may be bound or affected (other
than any breach, default or required consent that, singly or in the aggregate,
have not had and are not likely to have a Materially Adverse Effect); or (iii)
result in, or require, the creation or imposition of any Lien upon or with
respect to any of the properties or assets now owned or hereafter acquired by
the Company or any of the Restricted Subsidiaries.

 

(c)           Approval
of Regulatory Authorities.  No
approval or consent of, or filing or registration with, any federal, state or
local commission or other regulatory authority is required in connection with
the execution, delivery and performance by the Company and such Restricted
Subsidiaries of this Amendment and the Amended Credit Agreement.

 

(d)           Credit
Agreement Representations and Warranties. 
Each representation and warranty made by the Company and such Restricted
Subsidiaries in the Credit Agreement is true and correct at and as of the date
hereof, except to the extent that such representation and warranty expressly
relates to an earlier date.

 

(e)           No Default.   No Default or Event of Default shall have
occurred and be continuing both before and after giving effect to this
Amendment.

 

Section 3.2.            Survival.  Each of the foregoing representations and
warranties shall be made at and as of the Third Amendment Effective Date and
shall constitute a representation and warranty of the Company and the
Restricted Subsidiaries made under the Amended Credit Agreement and it shall be
an Event of Default if any such representation and warranty shall

 

4

 

prove to have been incorrect or misleading in any material respect when
made.  Each of the representations and
warranties made under the Amended Credit Agreement (and including those
representations and warranties made herein) shall survive and not be waived by
the execution and delivery of this Amendment.

 

ARTICLE IV

 

MISCELLANEOUS  

 

Section 4.1.            Governing
Law.

 

This Amendment shall be construed in accordance with
and governed by the laws of the State of New York.

 

Section 4.2.            Counterparts.  This Amendment may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same
instrument.

 

Section 4.3.            Expenses.  The Company hereby agrees to pay or
reimburse the Administrative Agent for all reasonable fees and expenses,
including attorneys’ fees, incurred in connection with the negotiation,
preparation, execution and delivery of this Amendment.

 

Section 4.4.            Amendment
Fee.  The Company hereby agrees that
it shall pay to each Bank which executes and delivers to the Administrative
Agent (or its designee) a counterpart hereof on or prior to the Third Amendment
Effective Date, a non-refundable cash fee in an amount equal to 25.0 basis
points (0.25%) of the Commitment of such Bank, as in effect on the Third
Amendment Effective Date, which fee shall be paid by the Company for
distribution to the Banks not later than the Third Amendment Effective Date.

 

Section 4.5.            Third
Amendment Effective Date.  This
Amendment shall become effective as of the date first written above (the “Third
Amendment Effective Date”) on the first date when (i) this Amendment shall
have been duly executed and delivered by the Company, each of the Restricted
Subsidiaries that are parties to the Credit Agreement, the Administrative Agent
and the Majority Banks and (ii) the fee payable pursuant to Section 4.4 hereof
shall have been paid in full.

 

 [THE REMAINDER OF THIS PAGE
INTENTIONALLY LEFT BLANK]

 

5

 

IN WITNESS
WHEREOF, the parties hereto have caused this Amendment to be duly executed as
of the day and year first above written.

 

	
   

  	
  CSC HOLDINGS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  CABLEVISION
  OF CONNECTICUT

  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CABLEVISION AREA 9
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  CABLEVISION FAIRFIELD
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  COMMUNICATIONS
  DEVELOPMENT

  CORPORATION

  
	
   

  	
   

  
	
   

  	
  CABLEVISION
  SYSTEMS DUTCHESS

  CORPORATION

  
	
   

  	
   

  
	
   

  	
  CABLEVISION
  SYSTEMS EAST HAMPTON

  CORPORATION

  
	
   

  	
   

  
	
   

  	
  CABLEVISION
  SYSTEMS GREAT NECK

  CORPORATION

  
	
   

  	
   

  
	
   

  	
  CABLEVISION
  SYSTEMS
  HUNTINGTON

  CORPORATION

  
	
   

  	
   

  
	
   

  	
  CABLEVISION SYSTEMS
  ISLIP CORPORATION

  
	
   

  	
   

  
	
   

  	
  CABLEVISION
  SYSTEMS
  LONG ISLAND

  CORPORATION

  
	
   

  	
   

  
	
   

  	
  CABLEVISION
  SYSTEMS
  SUFFOLK

  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CABLEVISION
  SYSTEMS WESTCHESTER

  CORPORATION

  

 

 

	
   

  	
  CABLEVISION OF
  CLEVELAND G.P., INC.

  
	
   

  	
   

  
	
   

  	
  CABLEVISION OF
  CLEVELAND L.P., INC.

  
	
   

  	
   

  
	
   

  	
  TELERAMA, INC.

  
	
   

  	
   

  
	
   

  	
  CABLEVISION
  OF THE MIDWEST HOLDING

  CO., INC.

  
	
   

  	
   

  
	
   

  	
  CSC ACQUISITION
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  CSC ACQUISITION - NY,
  INC.

  
	
   

  	
   

  
	
   

  	
  CSC ACQUISITION - MA,
  INC.

  
	
   

  	
   

  
	
   

  	
  A-R CABLE SERVICES -
  NY, INC.

  
	
   

  	
   

  
	
   

  	
  CABLEVISION LIGHTPATH,
  INC.

  
	
   

  	
   

  
	
   

  	
  CABLEVISION OF
  BROOKLINE, INC.

  
	
   

  	
   

  
	
   

  	
  CABLEVISION
  SYSTEMS BROOKLINE

  CORPORATION

  
	
   

  	
   

  
	
   

  	
  ARSENAL MSUB 2, INC.

  
	
   

  	
   

  
	
   

  	
  PETRA CABLEVISION
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  SUFFOLK CABLE
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  SAMSON CABLEVISION
  CORP.

  
	
   

  	
   

  
	
   

  	
  SUFFOLK CABLE OF
  SMITHTOWN, INC.

  
	
   

  	
   

  
	
   

  	
  SUFFOLK CABLE OF
  SHELTER ISLAND, INC.

  
	
   

  	
   

  
	
   

  	
  CABLEVISION
  SYSTEMS NEW YORK CITY

  CORPORATION

  
	
   

  	
   

  
	
   

  	
  CABLEVISION OF
  WAPPINGERS FALLS, INC.

  

 

 

	
   

  	
  CABLEVISION OF
  BROOKHAVEN, INC.

  
	
   

  	
   

  
	
   

  	
  CABLEVISION
  OF SOUTHERN WESTCHESTER,

  INC.

  
	
   

  	
   

  
	
   

  	
  CABLEVISION OF OAKLAND,
  INC.

  
	
   

  	
   

  
	
   

  	
  CABLEVISION OF
  PATERSON, INC.

  
	
   

  	
   

  
	
   

  	
  CABLEVISION OF
  ROCKLAND/RAMAPO, INC.

  
	
   

  	
   

  
	
   

  	
  CABLEVISION OF WARWICK,
  INC.

  
	
   

  	
   

  
	
   

  	
  MONTAGUE CABLE COMPANY,
  INC.

  
	
   

  	
   

  
	
   

  	
  CSC TKR, INC.

  
	
   

  	
   

  
	
   

  	
  CSC TKR I, INC.

  
	
   

  	
   

  
	
   

  	
  CABLEVISION MFR, INC.

  
	
   

  	
   

  
	
   

  	
  CABLEVISION OF
  MONMOUTH, INC.

  
	
   

  	
   

  
	
   

  	
  CABLEVISION OF HUDSON
  COUNTY, INC.

  
	
   

  	
   

  
	
   

  	
  CABLEVISION OF NEW
  JERSEY, INC.

  
	
   

  	
   

  
	
   

  	
  CSC GATEWAY CORPORATION

  
	
   

  	
   

  
	
   

  	
  CABLEVISION OF
  LITCHFIELD, INC.

  
	
   

  	
   

  
	
   

  	
  151 S. FULTON STREET
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  of each of the
  above-named corporations

  

 

 

	
   

  	
  CSC GATEWAY CORPORATION

  CABLEVISION OF NEW JERSEY, INC.,

  each a General Partner of Cablevision of Newark

  
	
   

  	
   

  
	
   

  	
  CABLEVISION OF NEW
  JERSEY, INC.

  CSC GATWEWAY CORPORATION

  each a General Partner of Cablevision of Newark

  
	
   

  	
   

  
	
   

  	
  CABLEVISION SYSTEMS
  BROOKLINE CORPORATION

  Managing General Partner of Cablevision of Ossining, L.P.

  
	
   

  	
   

  
	
   

  	
  CABLEVISION AREA 9
  CORPORATION,

  General Partner of Cablevision of Connecticut, L.P.

  
	
   

  	
   

  
	
   

  	
  CABLEVISION OF
  CLEVELAND G.P., INC.,

  General Partner of Cablevision of Cleveland, L.P.

  
	
   

  	
   

  
	
   

  	
  CABLEVISION FAIRFIELD
  CORPORATION,

  General Partner of Cablevision Systems of Southern

  Connecticut, L.P.

  
	
   

  	
   

  
	
   

  	
  CSC TKR, INC.,

  General Partner of KRC/CCC Investment Partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
  of each of the above
  corporate general partners

  

 

 

	
   

  	
  TORONTO DOMINION (TEXAS), INC., as

  
	
   

  	
  Administrative Agent and a Bank

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

	
   

  	
  TD SECURITIES (USA) INC., as

  
	
   

  	
  Co-Lead Arranger and Co-Book Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

	
   

  	
  BANC OF AMERICA SECURITIES LLC, 

  
	
   

  	
  as Co-Lead Arranger and Co-Book Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

	
   

  	
  BANK OF AMERICA, N.A., as Syndication Agent and a

  
	
   

  	
  Bank

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

	
   

  	
  THE BANK OF NEW YORK, 

  
	
   

  	
  as a Bank, Arranger and Co-Documentation Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

	
   

  	
  THE BANK OF NOVA SCOTIA, as a Bank,

  
	
   

  	
  Arranger and Co-Documentation Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

	
   

  	
  JPMORGAN CHASE BANK

  
	
   

  	
  (formerly known as The Chase Manhattan Bank), as a

  
	
   

  	
  Bank

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

	
   

  	
  FLEET NATIONAL BANK, as a Bank and Arranger

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

	
   

  	
  SALOMON SMITH BARNEY INC., as Arranger

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

	
   

  	
  CITIBANK, N.A., as a Bank

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

	
   

  	
  MIZUHO CORPORATE BANK, LTD.

  
	
   

  	
  (f/k/a The Fuji Bank, Ltd and as transferee of The Dai-Ichi

  Kangyo Bank, Ltd)

  
	
   

  	
  as a Bank and Arranger

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

	
   

  	
  BANK OF MONTREAL, as a Bank and a Managing Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

	
   

  	
  BARCLAYS BANK PLC, as a Bank and a Managing    

  
	
   

  	
  Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

	
   

  	
  BNP PARIBAS, as a Bank and a Managing Agent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

	
   

  	
  CREDIT LYONNAIS NEW YORK BRANCH, as a Bank and a Managing Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DRESDNER BANK AG, NEW
  YORK AND GRAND

  CAYMAN BRANCHES, as a Bank and a Managing Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WACHOVIA BANK, NATIONAL ASSOCIATION (f/k/a

  First Union National Bank), as a Bank and a Managing

  Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ROYAL BANK OF CANADA,
  as a Bank and a Managing

  Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

	
   

  	
  SOCIETE GENERALE, as a Bank and Co-Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SUNTRUST BANK, as a Bank and Co-Agent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK ONE, NA, as a Bank

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BEAR STEARNS CORPORATE LENDING INC., as a

  Bank

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL CORPORATION, as a

  Bank

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

	
   

  	
  MELLON BANK, N.A., as a Bank

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MERRILL LYNCH CAPITAL CORPORATION, as a

  Bank

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNION BANK OF CALIFORNIA, N.A., as a Bank

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  J.P. MORGAN SECURITIES INC., as Arranger

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SUMITOMO MITSUI BANKING CORPORATION, as a

  Bank

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

	
   

  	
  MERRILL LYNCH, PIERCE, FENNER & SMITH

  INCORPORATED, as a Bank

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NATEXIS BANQUES POPULAIRES, as a Bank

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:Exhibit
10.34

 

 

AMENDED
AND RESTATED LOAN AGREEMENT

 

among

 

RAINBOW
MEDIA HOLDINGS LLC, as Borrower;

 

THE
GUARANTORS PARTY HERETO, as Guarantors;

 

BANC
OF AMERICA SECURITIES LLC,

TD SECURITIES (USA) INC.

and

THE BANK OF NOVA SCOTIA,

as Co-Lead Arrangers and Co-Book Runners;

 

BANK
OF AMERICA, N.A.

and

THE BANK OF NOVA SCOTIA,

as Co-Syndication Agents;

 

WACHOVIA
BANK, NATIONAL ASSOCIATION and

GENERAL ELECTRIC CAPITAL CORPORATION,

as Co-Documentation Agents;

 

TORONTO
DOMINION (TEXAS), INC.,

as Administrative Agent

 

and

 

THE
OTHER CREDIT PARTIES PARTY HERETO

 

Dated
as of December 19, 2003

 

 

 

AMENDED
AND RESTATED LOAN AGREEMENT

among

RAINBOW MEDIA HOLDINGS LLC, as Borrower;

THE GUARANTORS PARTY HERETO, as Guarantors;

BANC OF AMERICA SECURITIES LLC,

TD SECURITIES (USA) INC. and

THE BANK OF NOVA SCOTIA

as Co-Lead Arrangers and Co-Book Runners;

BANK OF AMERICA, N.A. and

THE BANK OF NOVA SCOTIA, as Co-Syndication Agents;

WACHOVIA BANK, NATIONAL ASSOCIATION and

GENERAL ELECTRIC CAPITAL CORPORATION,

as Co-Documentation Agents;

TORONTO DOMINION (TEXAS), INC., as Administrative Agent

and

THE OTHER CREDIT PARTIES PARTY HERETO

 

W I T N E S S E T H:

 

WHEREAS, Rainbow Media
Holdings LLC (formerly known as Rainbow Media Holdings, Inc.), a Delaware
limited liability company (“RMH” or the “Borrower”), as borrower,
the Guarantors (as defined therein) party thereto (the “RMH Guarantors”),
as guarantors, Banc of America Securities LLC and TD Securities (USA) Inc., as
co-lead arrangers and co-book runners (the “RMH Arrangers”), Bank of
America, N.A., as syndication agent (the “RMH Syndication Agent”),
Toronto Dominion (Texas), Inc., as administrative agent (the “RMH
Administrative Agent”) and the other Credit Parties (as defined therein)
party thereto (together with the RMH Arrangers, the RMH Syndication Agent and
the RMH Administrative Agent, the “RMH Credit Parties”) are parties to
that certain Loan Agreement dated as of March 14, 2003 (the “Prior RMH
Loan Agreement”); and

 

WHEREAS, American Movie
Classics Company, a New York general partnership (“AMC”), The
Independent Film Channel LLC, a Delaware limited liability company (“IFC”),
and WE: Women’s Entertainment LLC, a Delaware limited liability company (“WE”),
as borrowers, the Guarantors (as defined therein) party thereto (the “AMC
Guarantors”), as guarantors, Banc of America Securities, LLC and TD
Securities (USA) Inc., as co-lead arrangers and co-book runners (the “AMC
Arrangers”), Bank of America, N.A., as syndication agent (the “AMC
Syndication Agent”), Toronto Dominion (Texas), Inc., as administrative
agent (the “AMC Administrative Agent”) and the other Credit Parties (as
defined therein) party thereto (together with the AMC Arrangers, the AMC
Syndication Agent and the AMC Administrative Agent, the “AMC Credit Parties”)
are parties to that certain Loan Agreement dated as of March 14, 2003, as
amended by that certain First Amendment to Loan Agreement dated as of
August 29, 2003 (as amended, the “Prior AMC Loan Agreement”);

 

 

WHEREAS, RMH, AMC, IFC
and WE desire that the RMH Credit Parties and the AMC Credit Parties agree to
modify the existing credit facilities under each of the Prior RMH Loan
Agreement and the Prior AMC Loan Agreement to provide, among other things, for
(a) the assumption by RMH of the Obligations (as defined in the Prior AMC Loan
Agreement) under the Prior AMC Loan Agreement (the “AMC Obligations”)
and the conversion, but not the release, of the obligations of AMC, IFC and WE
in respect of the AMC Obligations from those of borrowers to those of
guarantors with respect to the AMC Obligations; (b) the guarantee by the RMH
Guarantors of the Obligations (as defined herein), which shall hereafter
include the AMC Obligations, and the pledge of substantially all of the assets
of the RMH Guarantors as additional collateral security for the Obligations (as
defined herein); (c) the guarantee by the AMC Guarantors of the Obligations (as
defined herein), which shall hereafter include the Obligations (as defined in
the Prior RMH Loan Agreement) under the Prior RMH Loan Agreement (the “RMH
Obligations), and the pledge of substantially all of the assets of the AMC
Guarantors as additional collateral security for the Obligations (as defined
herein); (d) the consolidation of the credit facilities outstanding under the
Prior RMH Loan Agreement and the Prior AMC Loan Agreement such that, from and
after the date hereof, (i) the Revolving Loan Commitment (as defined in the
Prior RMH Loan Agreement) under the Prior RMH Loan Agreement (the “RMH
Revolver”) and the Revolving Loan Commitment (as defined in the Prior AMC
Loan Agreement) under the Prior AMC Loan Agreement (the “AMC Revolver”)
shall be combined into a single revolving credit facility subject to the terms
and conditions of this Agreement, and (ii) the Term B Loan Commitment (as
defined in the Prior RMH Loan Agreement) under the Prior RMH Loan Agreement
(the “RMH Term B”) and the Term B Loan Commitment (as defined in the
Prior AMC Loan Agreement) under the Prior AMC Loan Agreement (the “AMC Term
B”) shall be combined into a single term loan facility subject to the terms
and conditions of this Agreement; and (e) Incremental Term C Loan Commitments
(as defined below) in the aggregate principal amount of $624,562,500, and the
RMH Credit Parties and the AMC Credit Parties are willing to do so in
accordance with and subject to the terms and conditions set forth herein; and

 

WHEREAS, each of RMH and
the RMH Guarantors acknowledges and agrees that the security interest granted
to the RMH Administrative Agent, on behalf of the RMH Credit Parties, pursuant
to the Prior RMH Loan Agreement and the other Loan Documents (as defined in the
Prior RMH Loan Agreement) (the “RMH Loan Documents”), shall remain
outstanding and in full force and effect in accordance with the Prior RMH Loan
Agreement and shall continue as a security interest in favor of the
Administrative Agent (as defined herein) to secure the Obligations (as defined
herein); and

 

WHEREAS, each of AMC,
IFC, WE and the AMC Guarantors acknowledges and agrees that the security
interest granted to the AMC Administrative Agent, on behalf of the AMC Credit
Parties, pursuant to the Prior AMC Loan Agreement and the other Loan Documents
(as defined in the Prior AMC Loan Agreement) (the

 

2

 

“AMC Loan Documents”),
shall remain outstanding and in full force and effect in accordance with the
Prior AMC Loan Agreement and shall continue as a security interest in favor of
the Administrative Agent (as defined herein) to secure the Obligations (as
defined herein); and

 

WHEREAS, each of RMH,
AMC, IFC, WE and the other Credit Parties (as defined herein) acknowledges and
agrees that (a) the Obligations (as defined herein) represent, among other
things, the amendment, restatement, renewal, extension, consolidation and
modification of the RMH Obligations arising in connection with the Prior RMH
Loan Agreement and other RMH Loan Documents and of the AMC Obligations arising
in connection with the Prior AMC Loan Agreement and the other AMC Loan
Documents; (b) RMH, AMC, IFC, WE and the other Credit Parties (as defined
herein) intend that the Prior RMH Loan Agreement and the other RMH Loan
Documents and the collateral pledged thereunder shall secure, without
interruption or impairment of any kind, all existing Indebtedness (as defined
in the Prior RMH Loan Agreement) under the Prior RMH Loan Agreement and the
other RMH Loan Documents as they may be amended, restated, renewed, extended,
consolidated and modified hereunder, together with all other obligations
hereunder; (c) RMH, AMC, IFC, WE and the other Credit Parties (as defined
herein) intend that the Prior AMC Loan Agreement and the other AMC Loan
Documents and the collateral pledged thereunder shall secure, without
interruption or impairment of any kind, all existing Indebtedness (as defined
in the Prior AMC Loan Agreement) under the Prior AMC Loan Agreement and the
other AMC Loan Documents as they may be amended, restated, renewed, extended,
consolidated and modified hereunder, together with all other obligations hereunder;
(d) all Liens (as defined in the Prior RMH Loan Agreement) evidenced by the
Prior RMH Loan Agreement and the other RMH Loan Documents, and all Liens (as
defined in the Prior AMC Loan Agreement) evidenced by the Prior AMC Loan
Agreement and the other AMC Loan Documents, are hereby ratified, confirmed and
continued; and (e) the Loan Documents (as defined herein) are intended to
restate, renew, extend, consolidate, amend and modify the Prior RMH Loan
Agreement, the Prior AMC Loan Agreement, the RMH Loan Documents and the AMC
Loan Documents; and

 

WHEREAS, each of RMH,
AMC, IFC, WE and the other Credit Parties (as defined herein) intend that (a)
the provisions of the Prior RMH Loan Agreement and the other RMH Loan
Documents, to the extent restated, renewed, extended, consolidated, amended and
modified hereby, be hereby superseded and replaced by the provisions hereof and
of the other Loan Documents (as defined herein); (b) the provisions of the
Prior AMC Loan Agreement and the other AMC Loan Documents, to the extent
restated, renewed, extended, consolidated, amended and modified hereby, be
hereby superseded and replaced by the provisions hereof and of the other Loan
Documents (as defined herein); (c) the Notes (as defined herein) restate,
renew, extend, consolidate, amend, modify, replace, are substituted for and
supersede in its entirety, but do not extinguish, the Indebtedness (as defined
in the Prior RMH Loan Agreement) arising under the Notes (as defined in the
Prior RMH Loan Agreement) issued pursuant to the Prior RMH Loan

 

3

 

Agreement; (d) the Notes
(as defined herein) restate, renew, extend, consolidate, amend, modify,
replace, are substituted for and supersede in its entirety, but do not
extinguish, the Indebtedness (as defined in the Prior AMC Loan Agreement)
arising under the Notes (as defined in the Prior AMC Loan Agreement) issued
pursuant to the Prior AMC Loan Agreement; and (e) by entering into and
performing their respective obligations hereunder, this transaction shall not
constitute a novation.

 

NOW, THEREFORE, in
consideration of the premises and the covenants and agreements contained
herein, and in order to induce the Credit Parties (as defined herein) to
consent to the transactions contemplated hereby, as well as for other good and
valuable consideration, the receipt and adequacy of all of the foregoing as
legally sufficient consideration being hereby acknowledged, the parties hereto
each do hereby agree that the Prior RMH Loan Agreement and the Prior AMC Loan
Agreement are consolidated and amended and restated to read as follows as of
this 19th day of December, 2003:

 

ARTICLE 1 - Definitions.

 

For the purposes of this
Agreement:

 

“Accrued Tax
Liabilities” shall mean, for any period, payments accrued from and after
January 1, 2003, and allocable to the Borrower in accordance with the Tax
Sharing Policy, which payments shall be determined on the basis of the
financial income, taxable income, credits and other amounts directly related to
the members of the Rainbow Group which would generally be comparable to those
payments that would have resulted if the Borrower had filed a separate tax
return.

 

“Acquisition”
shall mean (a) any acquisition of all or substantially all of the assets of a
business or a business unit, (b) any acquisition of all or substantially all of
the capital stock or other ownership interest of any other Person, or (c) any
merger by any Borrower Party of or with any other Person, such that, in any
such case, such Person shall become consolidated with such Borrower Party in
accordance with GAAP after consummating such transaction.

 

“Additional Amounts”
shall have the meaning set forth in Section 2.10(c)(ii) hereof.

 

“Adjusted Stock
Incentive Charges” shall mean, for the MGM Operating Companies on a
consolidated basis, the result, to the extent positive, of (a) Employee Stock
Incentive Expense, minus (b) seven percent (7%) of Calendar Operating
Cash Flow for the immediately preceding fiscal year of the MGM Operating
Companies, minus (c) the lesser of (i) Employee Stock Incentive Income
attributable to the MGM Operating Companies during such period and (ii)
$25,000,000, in each case for the most recently completed twelve (12) month
period.

 

4

 

“Administrative Agent”
shall mean Toronto Dominion (Texas), Inc., a Delaware corporation, acting as
administrative agent for the Credit Parties, together with any successor
administrative agent.

 

“Administrative
Agent’s Office” shall mean the office of the Administrative Agent located
at the address set forth in Section 12.1 hereof, or such other office as
may be designated pursuant to the provisions of Section 12.1 hereof.

 

“Advance” or “Advances”
shall mean amounts advanced to the Borrower pursuant to Article 2 hereof
on the occasion of any borrowing.

 

“Affiliate” shall
mean, with respect to any Person, any Person (other than an individual whose
sole relationship with such Person is as an employee) directly or indirectly
controlling, controlled by, or under common control with such Person, and with
respect to the Borrower Parties to the extent not otherwise so deemed an
Affiliate, each Unrestricted Subsidiary shall be deemed an Affiliate of the
Borrower Parties.  For purposes of this
definition, “control” when used with respect to any Person includes the power
to direct or cause the direction of the management and policies of such Person,
whether by contract or otherwise.

 

“Agents” shall
mean, collectively, the Administrative Agent, the Co-Syndication Agents, the
Co-Documentation Agents and the Arrangers, and “Agent” shall mean any
one of the foregoing Agents.

 

“Agreement” shall
mean this Amended and Restated Loan Agreement.

 

“Agreement Date”
shall mean December 19, 2003.

 

“AMC” shall mean
American Movie Classics Company, a New York general partnership.

 

“AMC Administrative
Agent” shall have the meaning ascribed thereto in the recitals to this
Agreement.

 

“AMC Arrangers”
shall have the meaning ascribed thereto in the recitals to this Agreement.

 

“AMC Collateral”
shall have the meaning ascribed thereto in Section 12.18 hereof.

 

“AMC Consulting
Agreement” shall mean that certain Consulting Agreement dated as of
March 29, 2001, among CSC Holdings, AMC and WE, pursuant to which CSC
Holdings has agreed to provide consulting services to AMC and WE for an annual
fee equal to three and one-half percent (3.50%) of the gross revenues of AMC
and 

 

5

 

WE during the applicable
year and reimbursement of the cost and expenses incurred by CSC Holdings in
connection with the consulting services.

 

“AMC Credit Parties”
shall have the meaning ascribed thereto in the recitals to this Agreement.

 

“AMC Guarantors”
shall have the meaning ascribed thereto in the recitals to this Agreement.

 

“AMC Loan Agreement”
shall mean the Prior AMC Loan Agreement, as amended and restated by this
Agreement.

 

“AMC Loan Documents”
shall have the meaning ascribed thereto in the recitals to this Agreement.

 

“AMC Obligations”
shall have the meaning ascribed thereto in the recitals to this Agreement.

 

“AMC Partners”
shall mean, collectively, American Movie Classics Holding Corporation, a New
York corporation, AMC II Holding Corporation, a Delaware corporation, American
Movie Classics III Holding Corporation, a Delaware corporation, and American
Movie Classics IV Holding Corporation, a Delaware corporation, and “AMC
Partner” shall mean any one of the foregoing AMC Partners.

 

“AMC Revolver”
shall have the meaning ascribed thereto in the recitals to this Agreement.

 

“AMC Syndication Agent”
shall have the meaning ascribed thereto in the recitals to this Agreement.

 

“AMC Term B” shall
have the meaning ascribed thereto in the recitals to this Agreement.

 

“Annualized Cash Flow”
shall mean, as of any calculation date for the MGM Operating Companies on a
consolidated basis, (a) the product of (i) the result of (A) Cash Flow, plus
(B) Employee Stock Incentive Expense, minus (C) Employee Stock Incentive
Income, minus (D) Restructuring Charges, in each case for the most
recently completed six (6) month period, times (ii) two (2), minus
(b) Adjusted Stock Incentive Charges, minus (c) Restructuring Charges
for the most recently completed six (6) month period.

 

“Annualized Interest
Expense” shall mean the product of (a) Interest Expense for the most
recently completed two (2) fiscal quarters, times (b) two (2).

 

6

 

“Applicable Law”
shall mean, in respect of any Person, all provisions of constitutions,
statutes, rules, regulations and orders of governmental bodies or regulatory
agencies applicable to such Person and all orders and decrees of all courts and
arbitrators in proceedings or actions to which the Person in question is a
party or by which it is bound.

 

“Applicable Margin”
shall mean the interest rate margin applicable to Advances hereunder as
determined in accordance with Section 2.3(f) hereof.

 

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

 

“Arrangers” shall
mean, collectively, Banc of America Securities LLC, TD Securities (USA) Inc.
and The Bank of Nova Scotia, in their respective capacities as co-lead
arrangers and co-book runners under this Agreement, and “Arranger” shall
mean any one of the foregoing Arrangers.

 

“Assignment and
Assumption Agreement” shall mean that certain form of Assignment and Assumption
Agreement in substantially the form of Exhibit A attached hereto,
pursuant to which each Lender may, as further provided in Section 12.5
hereof, sell a portion of its Loans (other than Swing Loans) or Commitments.

 

“Authorized Debt
Issuance” shall mean, with respect to the issuance of any Indebtedness For
Money Borrowed by the Borrower, up to $250,000,000 in principal amount raised
by the Borrower on or before March 31, 2005, on terms and conditions which
shall (i) have a maturity date no earlier than one (1) year after the Final
Maturity Date, (ii) not have any required cash redemptions prior to one (1)
year after the Final Maturity Date, (iii) not be secured by any assets of any
member of the Rainbow Group, (iv) be contractually subordinated to the
Obligations on terms reasonably satisfactory to the Arrangers, (v) be issued
subject to demonstration to the reasonable satisfaction of the Arrangers of pro
forma compliance with the Financial Covenants through the Final Maturity Date,
(vi) be issued on market terms and conditions which shall be no more
restrictive on the Borrower Parties than the terms and conditions of this
Agreement and the other Loan Documents, and (vii) be otherwise reasonably
satisfactory to the Arrangers.

 

“Authorized Signatory”
shall mean, with respect to any Person, such senior personnel of such Person as
may be duly authorized and designated in writing by such Person to execute
documents, agreements and instruments on behalf of such Person.

 

“Available Basket
Amount” shall mean, with respect to each year during the term of this
Agreement, the amount set forth below with respect to such year ending during
the relevant period set forth below:

 

7

 

	
  Period

  	
   

  	
  Available
  Basket Amount

  	
   

  
	
  Agreement Date
  through

  December 31, 2003

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
  January 1,
  2004 through

  December 31, 2004

  	
   

  	
  $

  	
  100,000,000

  	
   

  
	
  January 1,
  2005 through

  December 31, 2005

  	
   

  	
  $

  	
  35,000,000

  	
   

  
	
  January 1,
  2006 through

  December 31, 2006

  	
   

  	
  $

  	
  35,000,000

  	
   

  
	
  January 1,
  2007 through

  December 31, 2007

  	
   

  	
  $

  	
  35,000,000

  	
   

  
	
  January 1,
  2008 through the

  Maturity Date

  	
   

  	
  $

  	
  35,000,000

  	
   

  

 

Notwithstanding the
foregoing, (a) to the extent that amounts available under the Available Basket
Amount with respect to any calendar year are not used, such amounts may,
subject to the clause (b) below, be carried forward to increase the Available
Basket Amount during the immediately following year (but only such immediately
following year and not any subsequent year), and (b) amounts available under
the Available Basket Amount during the current year must be used before any
amounts carried forward pursuant to the immediately preceding clause (a) may be
used.

 

“Available Film Rights
Add-Back” shall mean, with respect to any period, (a) $75,000,000 minus (b)
the aggregate amount of any Available Film Rights Add-Backs used by the
Borrowers to calculate Excess Film Rights Payments with respect to any prior
periods.

 

“Available Revolving
Loan Commitment” shall mean, as of any date, the excess of (a) the
Revolving Loan Commitment, over (b) the sum of (i) the aggregate principal
amount of Revolving Loans outstanding on such date and (ii) the L/C Obligations
outstanding on such date.

 

“Bankruptcy Code”
shall mean the United States Bankruptcy Code (11 U.S.C. Section 101 et
seq.), as now or hereafter amended, and any successor statute, or any
other applicable federal or state bankruptcy law or other similar law.

 

“Base Rate” shall
mean, as of any date, a fluctuating interest rate per annum equal to the
greater of (a) the Prime Rate and (b) the sum of (i) the Federal Funds Rate,
plus (ii) one-half of one percent (0.50%). 
The Base Rate shall be adjusted 

 

8

 

automatically as of the
opening of business on the effective date of each change in the Prime Rate or
the Federal Funds Rate, as the case may be.

 

“Base Rate Advance”
shall mean an Advance (other than a Swing Loan) which the Borrower requests to
be made as a Base Rate Advance or which is converted to a Base Rate Advance in
accordance with the provisions of Section 2.2 hereof.

 

“Borrower” shall
have the meaning ascribed thereto in the recitals to this Agreement.

 

“Borrower Parties”
shall mean, collectively, the Borrower and the Guarantors, and “Borrower
Party” shall mean any one of the foregoing Borrower Parties.

 

“Borrower Pledge
Agreement” shall mean that certain Amended and Restated Pledge Agreement
between the Borrower and the Administrative Agent, dated as of the Agreement
Date, in substantially the form of Exhibit B attached hereto, pursuant
to which the Borrower has pledged to the Administrative Agent, for the ratable
benefit of the Credit Parties, all of the stock and other equity interests
owned directly by the Borrower (other than the stock or other equity interests of
any Unrestricted Subsidiary) to secure the Obligations.

 

“Borrower Security
Agreement” shall mean that certain Amended and Restated Security Agreement
between the Borrower and the Administrative Agent, dated as of the Agreement
Date, in substantially the form of Exhibit C attached hereto.

 

“Business Day”
shall mean a day on which banks are not authorized or required to be closed and
foreign exchange markets are open for the transaction of business required for
this Agreement in London, England, Houston, Texas, and, in each case, New York,
New York, as relevant to the determination to be made or the action to be
taken.

 

“Calendar Operating
Cash Flow” shall mean, as of each fiscal year end for the MGM Operating
Companies on a consolidated basis, (a) the result of (i) Cash Flow, plus
(ii) Employee Stock Incentive Expense, minus (iii) Employee Stock
Incentive Income, in each case for the twelve (12) month period then ended, minus
(b) Adjusted Stock Incentive Charges.

 

“Capital Expenditures”
shall mean expenditures for the purchase of assets of long-term use which are
capitalized in accordance with GAAP (excluding any expenditures for and under
Film Rights Agreements of the Borrower Parties).

 

“Capitalized Lease
Obligation” shall mean that portion of any obligation of a Person as lessee
under a lease which at the time would be required to be capitalized on the
balance sheet of such lessee in accordance with GAAP.

 

9

 

“Cash Equivalents”
shall mean the following:

 

(a)                                  marketable,
direct obligations of the United States of America maturing within three
hundred ninety-seven (397) days of the date of purchase;

 

(b)                                 commercial
paper issued by any Lender (or any Lender Affiliate) or by corporations, each
of which shall have a consolidated net worth of at least $250,000,000 and each
of which conducts a substantial part of its business in the United States of
America, maturing within one hundred eighty (180) days from the date of the
original issue thereof, and rated “P-1” or better by Moody’s or “A-1” or better
by S&P;

 

(c)                                  fully
collateralized repurchase agreements in such amounts and with such financial
institutions having a rating of Baa or better from Moody’s, or a rating of “A-”
or better from S&P, as the Borrower may select from time to time;

 

(d)                                 certificates
of deposit, banker’s acceptances and time deposits maturing within three
hundred ninety-seven (397) days after the date of purchase, which are issued by
any Lender or by a United States national or state bank or foreign bank having
capital, surplus and undivided profits totaling more than $100,000,000, and
having a rating of Baa or better from Moody’s, or a rating of “A-” or better
from S&P; and

 

(e)                                  money
market funds that (i) comply with the criteria set forth in SEC Rule 2a-7 under
the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by
Moody’s and (iii) have portfolio assets of at least $5,000,000,000.

 

“Cash Flow” shall
mean, for any period, the sum of (a) Net Income (excluding any unusual, non-recurring
or extraordinary items), plus (b) the sum, in each case to the extent deducted
in calculating Net Income, of (i) Interest Expense, (ii) depreciation, (iii)
amortization (excluding Film Rights Amortization) and (iv) taxes.

 

“Change of Control”
shall mean any of the following events:

 

(a)                                  CSC
Holdings shall, at any time, cease to own and vote, directly or indirectly, one
hundred percent (100%) of the outstanding capital stock or other equity
interests of the Borrower;

 

(b)                                 The
Borrower shall, at any time, cease to own and vote directly or indirectly one
hundred percent (100%) of the capital stock, partnership interests or other
equity interests of each of the Guarantors (except to the extent that (i) the
capital stock, partnership interests or other equity interests of any such
Guarantor are permitted to be disposed of, and (ii) any such Guarantor is
permitted to issue 

 

10

 

any
additional capital stock, partnership interests or other equity interests, in
each case, pursuant to the terms and conditions of this Agreement);

 

(c)                                  CVC
and the Dolan Family Interests, collectively and in the aggregate, shall cease
to own, directly or indirectly, at least fifty and one-tenth percent (50.1%) of
the outstanding capital stock of the Borrower; or

 

(d)                                 CVC
or Dolan shall, at any time, cease to have management control over the business
and operations of the Borrower Parties.

 

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

 

“Co-Documentation
Agents” shall mean, collectively, Wachovia Bank, National Association and
General Electric Capital Corporation, and “Co-Documentation Agent” shall
mean any one of the foregoing Co-Documentation Agents.

 

“Co-Syndication Agents”
shall mean, collectively, Bank of America, N.A. and The Bank of Nova Scotia, in
their respective capacities as co-syndication agents under this Agreement, and
“Co-Syndication Agent” shall mean any one of the foregoing
Co-Syndication Agents.

 

“Collateral” shall
mean any assets in which any Credit Party may have a security interest pursuant
to any Security Document.

 

“Commitment Percentage”
shall mean, with respect to any Lender, the ratio, expressed as a percentage,
of (a) the Commitments of such Lender, divided by (b) the aggregate Commitments
of all of the Lenders.  As of the
Agreement Date, the Commitment Percentage of each Lender is set forth on
Schedule 1 to the Lender Addendum delivered by such Lender.

 

“Commitments”
shall mean, collectively, the Revolving Loan Commitment, the Term B Loan
Commitment, the Incremental Term C Loan Commitment and any other Incremental
Facility Commitments issued hereunder.

 

“Company” shall
mean any corporation, partnership, limited liability company or other legal
entity.

 

“Constituent Documents”
shall mean, (a) with respect to any corporation, such corporation’s certificate
or articles of incorporation and by-laws, (b) with respect to any partnership,
such partnership’s partnership agreement and certificate of limited partnership
(if applicable), and (c) with respect to any limited liability company, such
limited liability company’s operating agreement and certification of
organization (or other similar document, as the case may be).

 

11

 

“Credit Parties”
shall mean, collectively, the Administrative Agent, the Co-Documentation
Agents, the Co-Syndication Agents, the Arrangers, the Lenders, the Swing Loan
Lender, the Issuing Bank and any Incremental Facility Lenders.

 

“CSC Holdings”
shall mean CSC Holdings, Inc., a Delaware corporation.

 

“CSC Holdings Pledge
Agreement” shall mean that certain Second Amended and Restated Pledge
Agreement between CSC Holdings and the Administrative Agent, dated as of the
Agreement Date, in substantially the form of Exhibit D attached hereto,
pursuant to which CSC Holdings shall pledge to the Administrative Agent, for
the ratable benefit of the Credit Parties, all of the equity interests in the
Borrower owned by CSC Holdings to secure the Obligations.

 

“Cubs Guaranty”
shall mean the guaranty provided by the Borrower in respect of those certain
payments to be made under a programming rights agreement dated as of
March 4, 1999, by SC-CHI, pursuant to which SC-CHI obtained the right to
broadcast certain games of the Chicago Cubs, a Major League Baseball franchise.

 

“CVC” shall mean
Cablevision Systems Corporation, a Delaware corporation.

 

“Debt Service”
shall mean, as of any date of determination, for the MGM Operating Companies on
a consolidated basis, the sum of (a) Annualized Interest Expense, (b) cash
taxes paid during the most recently completed twelve (12) calendar month
period, (c) Mandatory Commitment Reductions during the immediately succeeding
twelve (12) calendar month period, (d) the greater of (i) the result of (A) scheduled
and mandatory payments of the Term Loans pursuant to Sections 2.6 and 2.7
hereof during the immediately succeeding twelve (12) calendar month period,
minus (B) for any period of determination from and after January 1, 2007,
the aggregate amount of cash on the consolidated balance sheet of the Borrower
Parties as of the last day of the fiscal quarter most recently ended, and (ii)
zero (0), (e) scheduled payments under Capitalized Lease Obligations during the
immediately succeeding twelve (12) calendar month period, (f) Excess Film
Rights Payments during the immediately succeeding twelve (12) calendar month
period, and (g) Deferred Carriage Fees applicable to the immediately succeeding
twelve (12) calendar month period.

 

“Debt Service Ratio”
shall mean, on any calculation date, the ratio of (a) Annualized Cash Flow to
(b) Debt Service.

 

“Default” shall
mean any Event of Default, and any of the events specified in Section 9.1
hereof which with any passage of time or giving of notice (or both) would constitute
such event an Event of Default.

 

12

 

“Default Rate”
shall mean a simple per annum interest rate equal to the sum of (a) the Base
Rate, (b) the Applicable Margin then in effect with respect to Base Rate
Advances, and (c) two percent (2%).

 

“Deferred Carriage
Fees” shall mean the amortization of expenditures of the MGM Operating
Companies made in respect of launch support payments under carriage agreements,
which expenditures shall, at all times, be amortized in accordance with GAAP.

 

“Dolan” shall mean
Charles F. Dolan.

 

“Dolan Family
Interests” shall mean (a) any Dolan Family Member, (b) any trusts for the
benefit of any Dolan Family Members, (c) any estate or testamentary trust of
any Dolan Family Member for the benefit of any Dolan Family Members, (d) any
executor, administrator, conservator or legal or personal representative of any
Person or Persons specified in clauses (a), (b) and (c) above to the extent
acting in such capacity on behalf of any Dolan Family Member or Members and not
individually, and (e) any corporation, partnership, limited liability company
or other similar entity, in each case, eighty percent (80%) of which is owned
and controlled by any of the foregoing or combination of the foregoing.

 

“Dolan Family Members”
shall mean Dolan, his spouse, his descendants and any spouse of any of such
descendants.

 

“Dollars” or “$”
shall mean the basic unit of the lawful currency of the United States of
America.

 

“Eligible Assignee”
shall mean (a) a Lender, (b) a Lender Affiliate, (c) an Approved Fund, or (d)
any other Person (other than the Borrower or any of its Affiliates) approved by
the Administrative Agent and, unless a Default has occurred and is continuing,
the Borrower (such approval of the Administrative Agent and the Borrower not to
be unreasonably withheld or delayed).

 

“Employee Stock
Incentive Expense” shall mean, with respect to any Person, the expense
incurred for the respective period in respect of the employee stock incentive
programs of such Person, as determined in accordance with GAAP.

 

“Employee Stock
Incentive Income” shall mean, with respect to any Person, income
attributable to such Person for the respective period as a result of the
reversal of any Employee Stock Incentive Expense accrued during a prior period,
as determined in accordance with GAAP.

 

“ERISA” shall mean
the Employee Retirement Income Security Act of 1974, as in effect from time to
time.

 

13

 

“ERISA Affiliate”
shall mean any “affiliate” of the Borrower and its Subsidiaries within the
meaning of Section 414 of the Code.

 

“Eurodollar Advance”
shall mean an Advance (other than a Swing Loan) which the Borrower requests to
be made as a Eurodollar Advance or which is continued as or converted to a
Eurodollar Advance in accordance with the provisions of Section 2.2
hereof.

 

“Eurodollar Advance
Period” shall mean, in connection with any Eurodollar Advance, the term of
such Advance selected by the Borrower, which may be one (1), two (2), three (3)
or six (6) months, and subject to the last proviso of this definition nine (9)
or twelve (12) months, or otherwise determined in accordance with this
Agreement; provided, however, notwithstanding the foregoing, (a)
any applicable Eurodollar Advance Period which would otherwise end on a day
which is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in another calendar month, in which case
such Eurodollar Advance Period shall end on the next preceding Business Day,
(b) any applicable Eurodollar Advance Period which begins on a day for which
there is no numerically corresponding day in the calendar month during which
such Eurodollar Advance Period is to end shall (subject to clause (a) above)
end on the last day of such calendar month, and (c) no Eurodollar Advance
Period shall extend beyond the Final Maturity Date or such earlier date as
would interfere with the repayment obligations of the Borrower under
Section 2.7 hereof; provided  further, however, the
Borrower may not select a Eurodollar Advance Period in excess of six (6) months
unless the Administrative Agent has notified the Borrower that (i) that each of
the Lenders has available to it funds for such Lender’s share of the proposed
Advance which are not required for other purposes, (ii) such funds are
available to each Lender at a rate (exclusive of reserves and other
adjustments) at or below the Eurodollar Rate for such proposed Advance and
Eurodollar Advance Period, and (iii) each Lender has, in its sole discretion,
agreed to fund such Advance.

 

“Eurodollar Basis”
shall mean a simple per annum interest rate (rounded upward, if necessary, to
the nearest one-hundredth of one percent (1/100%)) equal to the quotient of (a)
the Eurodollar Rate divided by (b) one minus the Eurodollar Reserve Percentage,
stated as a decimal, and once determined, shall be subject to Article 11
hereof and shall remain unchanged during the applicable Eurodollar Advance
Period, except for changes to reflect adjustments in the Eurodollar Reserve
Percentage.

 

“Eurodollar Rate”
shall mean, for any Eurodollar Advance Period, the rate per annum determined by
the Administrative Agent to be the arithmetic mean of the interest rates per
annum (rounded upward to the nearest one-sixteenth of one percent (1/16%))
which appear on Telerate Page 3750 as of 11:00 a.m. (London time), or, if
unavailable, the Reuters Screen LIBO Page, two (2) Business Days before the
first day of such Eurodollar Advance Period, in an amount approximately equal
to the principal

 

14

 

amount of, and for a
length of time approximately equal to the Eurodollar Advance Period for, the
Eurodollar Advance sought by the Borrower.

 

“Eurodollar Reserve
Percentage” shall mean the percentage which is in effect from time to time
under Regulation D of the Board of Governors of the Federal Reserve System, as
such regulation may be amended from time to time, as the actual reserve
requirement applicable with respect to Eurocurrency liabilities (as that term
is defined in Regulation D), to the extent any Lender has any Eurocurrency
liabilities subject to such reserve requirement at that time.  The Eurodollar Basis for any Eurodollar
Advance shall be adjusted as of the effective date of any change in the
Eurodollar Reserve Percentage.

 

“Event of Default”
shall mean any of the events specified in Section 9.1 hereof, provided
that any requirement for notice or lapse of time, or both, has been satisfied.

 

“Excess Film Rights
Payments” shall mean, for any period, the excess, if any, of (a) cash
payments in respect of film rights over (b) Film Rights Amortization; provided,
however, that, at the Borrower’s option, such excess may be reduced to not less
than zero (0) by all or any portion of the Available Film Rights Add-Back.

 

“Excess Funding
Guarantor” shall have the meaning ascribed thereto in Article 3
hereof.

 

“Excess Payment”
shall have the meaning ascribed thereto in Article 3 hereof.

 

“Exemption Certificate”
shall have the meaning set forth in Section 2.10(c)(iii) hereof.

 

“Existing Investment
Guaranties” shall mean, collectively, the Cubs Guaranty, the Sportsvision
Guaranty and the Janus Guaranty.

 

“FCC” shall mean
the Federal Communications Commission, or any successor thereto.

 

“Federal Funds Rate”
shall mean, as of any date, the weighted average of the rates on overnight
federal funds transactions with the members of the Federal Reserve System
arranged by federal funds brokers, as published for such day (or, if such day
is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three (3) federal funds
brokers of recognized standing selected by the Administrative Agent.

 

15

 

“Film Rights
Agreements” shall mean, collectively, each agreement between any of the
Borrower Parties and any other Person for the agreement to use, produce,
exhibit or distribute programming.

 

“Film Rights
Amortization” shall mean the amortization of expenditures of the MGM
Operating Companies for the acquisition of film rights and broadcast
programming, which expenditures shall, at all times, be amortized in accordance
with GAAP.

 

“Final Maturity Date”
shall mean March 31, 2009, or such earlier date on which the payment of
all outstanding Obligations shall be due (whether by acceleration or
otherwise).

 

“Financial Covenants”
shall mean the financial covenants applicable to the Borrower from time to time
as set forth in Sections 8.8, 8.9, 8.10 and 8.11 hereof.

 

“Financial Statements
Delivery Date” shall mean (a) with respect to the delivery of quarterly
financial statements and information pursuant to Section 7.1 hereof for
each fiscal quarter of the Borrower ended during the term of this Agreement,
the date which is sixty-five (65) days after the last day of each such fiscal
quarter, and (b) with respect to the delivery of annual financial statements
and information pursuant to Section 7.2 hereof for each fiscal year of the
Borrower ended during the term of this Agreement, the date which is one hundred
twenty (120) days after the end of each such fiscal year; provided, however,
in the event the SEC shall reduce the time period during which the Borrower may
file its quarterly or annual financial statements with the SEC, the  foregoing time periods shall be reduced by
a like number of days.

 

“Foreign Lender”
shall have the meaning set forth in Section 2.10(c)(iii) hereof.

 

“Fund” shall mean
any Person (other than the Borrower or any of its Affiliates) that is (or will
be) primarily engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business.

 

“FUSE Companies”
shall mean, collectively, FUSE Holdings LLC (formerly known as MuchMusic
Holdings LLC), a Delaware limited liability company, FUSE Networks LLC (as
successor in interest to MuchMusic U.S.A. Venture), a New York limited
liability company, and FUSE Programming Inc. (formerly known as MuchMusic
Programming Inc.), a Delaware corporation, and “FUSE Company” shall mean
any one of the foregoing FUSE Companies.

 

“GAAP” shall mean
generally accepted accounting principles in the United States, as in effect
from time to time, consistently applied.

 

16

 

“GE Stock” shall
mean the stock of General Electric Company received by the Borrower in
connection with the sale of the equity interests owned by the Borrower in Bravo
Company.

 

“GE Stock Monetization
Transaction” shall mean the monetization of the value of the GE Stock
pursuant to variable share pre-paid forward contracts.

 

“GE Subsidiaries”
shall mean, collectively, RMH GE Holdings I, Inc., a Delaware corporation, RMH
GE Holdings II, Inc., a Delaware corporation, and RMH GE Holdings III, Inc., a
Delaware corporation, each of which has been formed by the Borrower for the
sole purpose of consummating the GE Stock Monetization Transaction and has no
assets other than the GE Stock.

 

“Guarantee Supplement”
shall have the meaning set forth in Section 6.14 hereof.

 

“Guarantors” shall
mean all of the now or hereafter existing direct and indirect Subsidiaries of
the Borrower; provided that, in the event that the Guaranty of the Obligations
from any FUSE Company and the Administrative Agent’s Lien on the properties and
assets of such FUSE Company shall be released, such FUSE Company (and each of
its Subsidiaries) shall cease to be a Guarantor for purposes of this Agreement.

 

“Guaranty” or “Guaranteed”
as applied to an obligation (each a “primary obligation”), shall mean and
include (a) any guaranty, direct or indirect, in any manner, of any part or all
of such primary obligation, and (b) any agreement, direct or indirect,
contingent or otherwise, the practical effect of which is to assure in any way
the payment or performance (or payment of damages in the event of non-performance)
of any part or all of such primary obligation, including, without limiting the
foregoing, any reimbursement obligations as to amounts drawn down by
beneficiaries of outstanding letters of credit and any obligation of a Person
(the “primary obligor”), whether or not contingent, (i) to purchase any such
primary obligation or any property or asset constituting direct or indirect
security therefor, (ii) to advance or supply funds (A) for the purchase or
payment of such primary obligation or (B) to maintain working capital, equity
capital or the net worth, cash flow, solvency or other balance sheet or income
statement condition of any other Person, (iii) to purchase property, assets,
securities or services primarily for the purpose of assuring the owner or holder
of any primary obligation of the ability of the primary obligor with respect to
such primary obligation to make payment thereof, or (iv) otherwise to assure or
hold harmless the owner or holder of such primary obligation against loss in
respect thereof.

 

“IFC” shall mean
The Independent Film Channel LLC, a Delaware limited liability company.

 

17

 

“IFC Partners”
shall mean, collectively, IFC Holding Corporation, a Delaware corporation, IFC
II Holding Corporation, a Delaware corporation, and IFC III Holding
Corporation, a Delaware corporation, and “IFC Partner” shall mean any
one of the foregoing IFC Partners.

 

“Incremental Facility
Commitments” shall mean, collectively, the aggregate commitments of the Incremental
Facility Lenders to make Advances of the Incremental Facility Loans to the
Borrower in accordance with Section 2.14 hereof, including, without
limitation, the Incremental Term C Loan Commitment.  The Borrower may obtain Incremental Facility Commitments from
more than one Incremental Facility Lender, which commitments shall be several
obligations of each such Incremental Facility Lender.

 

“Incremental Facility
Indebtedness” shall mean all principal, interest, fees, and other amounts
from time to time due or accrued in connection with the Incremental Facility
Loans.

 

“Incremental Facility
Lenders” shall mean any lenders having an Incremental Facility Commitment
or making Incremental Facility Loans pursuant thereto.

 

“Incremental Facility
Loans” shall mean the amounts advanced by the Incremental Facility Lenders
to the Borrower as Incremental Facility Loans under the Incremental Facility
Commitment, not to exceed the amount of the Incremental Facility Commitment.

 

“Incremental Facility
Maturity Date” shall mean the maturity date for the Incremental Facility
Loans as set forth in the Notice of Incremental Facility Commitment applicable
thereto.

 

“Incremental Facility
Notes” shall mean those certain Incremental Facility Notes described in
Section 2.14 hereof.

 

“Incremental Term C
Commitment Percentage” shall mean, with respect to any Lender, the ratio,
expressed as a percentage, of (a) the Incremental Term C Loan Commitment of
such Lender, divided by (b) the aggregate Incremental Term C Loan Commitments of
all of the Lenders.  As of the Agreement
Date, the Incremental Term C Commitment Percentage of each Lender is set forth
on Schedule 1 to the Lender Addendum delivered by such Lender under the
caption “Incremental Term C Commitment Percentage”.

 

“Incremental Term C
Loan Commitment” shall mean the several obligations of certain of the
Lenders to advance the sum of up to $624,562,500 to the Borrower on the
Agreement Date, in accordance with their respective Incremental Term C
Commitment Percentages, all pursuant to the terms hereof.

 

18

 

“Incremental Term C
Loans” shall mean, collectively, the amount advanced by certain of the
Lenders to the Borrower under the Incremental Term C Loan Commitment, not to
exceed the amount of the Incremental Term C Loan Commitment.

 

“Incremental Term C
Notes” shall mean those certain term notes issued by the Borrower to each
of the Lenders issuing an Incremental Term C Loan Commitment that requests a
promissory note in accordance with each such Lender’s Incremental Term C
Commitment Percentage, each one substantially in the form of Exhibit E
attached hereto, and any extensions, modifications, renewals or replacements of
or amendments to any of the foregoing.

 

“Indebtedness”
shall mean, with respect to any Person, (a) all items (except items of
shareholders’ and partners’ equity or capital stock or surplus or general
contingency or deferred tax reserves) which in accordance with GAAP would be
included in determining total liabilities as shown on the liability side of a
balance sheet of such Person, (b) all direct or indirect obligations secured by
any Lien to which any property or asset owned by such Person is subject,
whether or not the obligation secured thereby shall have been assumed, (c) to
the extent not otherwise included, all Capitalized Lease Obligations of such
Person, (d) all reimbursement obligations with respect to outstanding letters
of credit, and (e) all net obligations in respect of Interest Hedge Agreements.

 

“Indebtedness For
Money Borrowed” shall mean, with respect to any Person, all money borrowed
by such Person and all Indebtedness represented by notes payable by such Person
and drafts accepted representing extensions of credit to such Person, all
obligations of such Person evidenced by bonds, debentures, notes, or other
similar instruments, all net obligations in respect of Interest Hedge
Agreements, all reimbursement obligations with respect to letters of credit,
all Indebtedness of such Person upon which interest charges, commitment fees or
letter of credit fees are customarily paid, and all Indebtedness of such Person
issued or assumed as full or partial payment for property or services, whether
or not any such notes, drafts, obligations, or Indebtedness represent
Indebtedness for money borrowed (excluding accounts payable and other accruals
incurred in the ordinary cause of business). 
For purposes of this definition, interest which is accrued but not paid
on the original due date or within any applicable cure or grace period as
provided by the underlying contract for such interest shall be deemed
Indebtedness For Money Borrowed.

 

“Indemnified Parties”
shall have the meaning given thereto in Section 6.13 hereof.

 

“Initial Maturity Date”
shall mean March 31, 2008, or such earlier date on which the payment of
all outstanding Obligations in respect of the Revolving Loan Commitment shall
be due (whether by acceleration or otherwise), as such date may be accelerated
as set forth in the definition of “Maturity Date”.

 

19

 

“Insolvency Proceeding”
shall mean, with respect to any Person, any insolvency, receivership,
bankruptcy, dissolution, liquidation or reorganization proceeding, or any other
proceeding, whether voluntary or involuntary, by or against such Person, under
the Bankruptcy Code or any other bankruptcy or insolvency law or laws, federal
or state, relating to the relief of debtors of any jurisdiction, whether now or
hereafter in effect, and any out-of-court composition, assignment for the
benefit of creditors, readjustment of Indebtedness, reorganization, extension
or other debt arrangement of any kind.

 

“Interest Coverage
Ratio” shall mean, on any calculation date, the ratio of (a) Six Month Cash
Flow to (b) Trailing Six Month Interest Expense.

 

“Interest Expense”
shall mean, for any period with respect to any Person, an amount equal to the
sum of (a) the interest and commitment fees accrued during such period with
respect to the aggregate amount of Indebtedness For Money Borrowed and (b) the
interest component of Capitalized Lease Obligations.

 

“Interest Hedge
Agreement” shall mean any interest rate swap, cap, collar, floor, caption
or swap agreement, or any similar arrangement designed to hedge the risk of
variable interest rate volatility or to reduce interest costs, arising at any
time between the Borrower, on the one hand, and any other Person, on the other
hand, as such agreement or arrangement may be modified, supplemented, amended,
and in effect from time to time.

 

“Investment” shall
mean (a) any capital contributions to, loans to, repurchase agreements with or
investments in securities of, or Guaranties (other than the Existing Investment
Guaranties) issued for the benefit of, a Person (including, without limitation,
any of the Unrestricted Subsidiaries), but in any case shall not include any
Acquisition, and (b) payments made under each of the Existing Investment
Guaranties.

 

“Issuing Bank”
shall mean the Administrative Agent and, upon any such Person’s agreement to
act as an Issuing Bank hereunder, any Lender or any Lender Affiliate, in each
case as issuer of any Letter of Credit hereunder.

 

“Janus Guaranty”
shall mean the guaranty provided by the Borrower in respect of certain payments
to be made by Rainbow Films Holdings, LLC under a Television Rights Purchase
Agreement, dated as of March 14, 1995, among City Entertainment
Corporation, Janus Films Company and Bravo Company, as assigned to Rainbow
Films Holdings, LLC.

 

“L/C Obligations”
shall mean, at any date, the sum of (a) the aggregate amount then available to
be drawn under all outstanding Letters of Credit and (b) the aggregate amount
of drawings under Letters of Credit which have not then been reimbursed by the
Borrower pursuant to Section 2.15 hereof.

 

20

 

“Lender Addendum”
shall mean, with respect to any Lender, a Lender Addendum, substantially in the
form of Exhibit F attached hereto, to be executed and delivered by such
Lender on the Agreement Date as provided in Section 12.17 hereof.

 

“Lender Affiliate”
shall mean with respect to any Lender, (a) any Person directly or indirectly
controlling, controlled by or under common control with such Lender or (b) any
entity (whether a corporation, partnership, trust or otherwise) that is engaged
in making, purchasing, holding or otherwise investing in bank loans and similar
extensions of credit in the ordinary course of its business and is wholly-owned
by a Lender or a Lender Affiliate of such Lender.

 

“Lenders” shall
mean the financial institutions or other entities that from time to time become
parties to this Agreement as Lenders (including the Swing Loan Lender), and “Lender”
shall mean any one of the foregoing Lenders.

 

“Letter of Credit”
shall mean any Letter of Credit issued by any Issuing Bank pursuant to
Section 2.15 hereof.

 

“Letter of Credit
Committed Amount” shall mean $20,000,000.

 

“Lien” shall mean,
with respect to any property, any mortgage, lien, pledge, assignment, charge,
security interest, title retention agreement, levy, execution, seizure,
attachment, garnishment, or other encumbrance of any kind in respect of such
property, whether or not choate, vested, or perfected.

 

“Loan Documents”
shall mean this Agreement, the Notes, the Security Documents, the Subordination
of Intercompany Obligations Agreement, all documents executed in connection
with any Incremental Facility Loans, all Letters of Credit, all Requests for
Advance, all Requests for Issuance of Letters of Credit, all documents executed
by any of the Borrower Parties pursuant to Section 6.14 hereof and all
Interest Hedge Agreements between the Borrower, on the one hand, and any Credit
Party (or any Lender Affiliate thereof or any Person that was a Credit Party
(or a Lender Affiliate thereof) on the date of entering into such Interest
Hedge Agreement), on the other hand, and all other fee letters, documents,
instruments, certificates and agreements executed or delivered in connection
with or contemplated by this Agreement.

 

“Loans” shall
mean, collectively, the Revolving Loans, the Term B Loans, the Swing Loans, the
Incremental Term C Loans, and, if any other Incremental Facility Commitments
have been issued hereunder, the Incremental Facility Loans made under such
Incremental Facility Commitments, and “Loan” shall mean any of the
foregoing.

 

“Mag Rack Group”
shall mean, collectively, Mag Rack Holdings LLC (formerly known as Sterling
Digital Holdings LLC), a Delaware limited liability company, Mag Rack
Entertainment LLC, a Delaware limited liability company, Mag 

 

21

 

Rack LLC (formerly known
as Sterling Digital LLC), a Delaware limited liability company, and their
respective Subsidiaries.

 

“Majority Lenders”
shall mean, at any time, (a) prior to the occurrence of an Event of Default and
termination of the Commitments, Lenders the sum of whose Undrawn Commitments
plus Loans then outstanding equals or exceeds fifty and one-tenth percent
(50.1%) of the sum of the Undrawn Commitments plus the Loans then outstanding
for all Lenders, or (b) at any time that there exists an Event of Default
hereunder and the Commitments have been terminated, Lenders the total of whose
Loans outstanding equals or exceeds fifty and one-tenth percent (50.1%) of the
total principal amount of the Loans then outstanding hereunder.

 

“Mandatory Borrowing”
shall have the meaning given thereto in Section 2.8(b) hereof.

 

“Mandatory Commitment
Reductions” shall mean, as of any calculation date, the excess, if any, of
(a) the aggregate principal amount of the Revolving Loans, the Swing Loans and
the L/C Obligations outstanding at the beginning of the period being measured,
over (b) the lowest amount of the Revolving Loan Commitment during the period
being measured.

 

“Material Affiliate
Contracts” shall mean, collectively, (a) the AMC Consulting Agreement, (b)
the Services Agreement, (c) the Tax Sharing Policy and (d) each agreement
between any of the Borrower Parties with any of its Affiliates identified on Schedule 1
attached hereto.

 

“Material Film Rights
Agreement” shall mean any Film Rights Agreement of any Borrower Party
pursuant to which such Borrower Party is obligated to make payments of
$10,000,000 or more in the aggregate.

 

“Material MSO
Agreement” shall mean any MSO Agreement covering 1,000,000 or more
subscribers.

 

“Material Subsidiaries”
shall mean, collectively, (a) the Guarantors, (b) the FUSE Companies, and (c)
any other Subsidiaries of the Borrower having (either individually or
collectively, in the case of any holding company Subsidiaries, with their
respective operating Subsidiaries) a “fair market value” of $5,000,000 or more,
as determined by the Arrangers in their reasonable discretion.

 

“Materially Adverse
Effect” shall mean any materially adverse effect upon the business, assets,
financial condition or results of operations of the Borrower Parties, taken as
a whole on a consolidated basis in accordance with GAAP, or upon the ability of
the Borrower Parties, taken as a whole, to perform their respective Obligations
under this Agreement or any other Loan Document.

 

22

 

“Maturity Date”
shall mean, with respect to all amounts owing or Advances made, under (a) the
Revolving Loan Commitment, the Initial Maturity Date, (b) the Term B Loan
Commitment or the Incremental Term C Loan Commitment, the Final Maturity Date,
and (c) any other Incremental Facility Commitment, the Incremental Facility
Maturity Date applicable thereto.

 

“Maximum Guaranteed
Amount” shall have the meaning ascribed thereto in Article 3 hereof.

 

“MGM Companies”
shall mean, collectively, AMC, IFC and WE and their respective Subsidiaries;
and “MGM Company” shall mean any one of the foregoing MGM Companies.

 

“MGM Operating
Companies” shall mean all MGM Companies which are designated as of the
Agreement Date as MGM Operating Companies on Schedule 5.1(c)-2
hereto and which have been likewise designated as “MGM Operating Companies”
under the AMC Loan Agreement, and “MGM Operating Company” shall mean any
one of the foregoing MGM Operating Companies; provided, however,
that so long as no Default or Event of Default then exists or would be caused
thereby, the Borrower may designate additional MGM Companies as MGM Operating
Companies after the Agreement Date, upon five (5) Business Days’ prior written
notice to the Administrative Agent and subject to such MGM Companies being
concurrently designated as “MGM Operating Companies” under the AMC Loan
Agreement; provided  further, however, that notwithstanding
the foregoing, (x) AMC, IFC and WE shall not cease to be MGM Operating
Companies without the consent of all of the Lenders, and (y) no Company which
is or becomes a MGM Operating Company shall cease to be a MGM Operating Company
for purposes of this Agreement without the consent of the Majority
Lenders.  To the extent that additional
MGM Companies shall be designated as “MGM Operating Companies” under the AMC
Loan Agreement, such MGM Companies shall likewise be designated as MGM
Operating Companies under this Agreement, and to the extent that any Company
shall cease to be a MGM Operating Company for purposes of the AMC Loan
Agreement, such Company shall likewise cease to be a MGM Operating Company for
purposes of this Agreement.

 

“Moody’s” shall
mean Moody’s Investor Service, Inc.

 

“MSG Companies”
shall mean, collectively, Rainbow Garden Corp., a Delaware corporation, MSG
Eden Corporation, a Delaware corporation, Regional MSG Holdings LLC, a Delaware
limited liability company, and Madison Square Garden, L.P., a Delaware limited
partnership, and “MSG Company” shall mean any one of the foregoing MSG
Companies.

 

“MSO Agreement”
shall mean any agreement between any Borrower Party and a cable television
operator or a direct broadcast satellite system operator 

 

23

 

pursuant to which such
operator agrees, among other things, to distribute and exhibit to its
subscribers programming of such Borrower Party.

 

“MuchMusic Companies”
shall mean, collectively, the FUSE Companies; and “MuchMusic Company”
shall mean any one of the FUSE Companies.

 

“Multiemployer Plan”
shall have the meaning set forth in Section 4001(a)(3) of ERISA.

 

“Necessary
Authorizations” shall mean all authorizations, consents, permits,
approvals, licenses and exemptions from, and all filings and registrations
with, and all reports to, any governmental or other regulatory authority
whether federal, state or local, and all agencies thereof necessary for the
conduct of the businesses and the ownership (or lease) of the properties and assets
of each of the Borrower Parties.

 

“Net Cash Proceeds”
shall mean, with respect to any issuance or sale by any Person of Indebtedness
or stock or other equity interests, and with respect to any sale, lease,
transfer or other disposition of assets, the amount equal to (a) the gross cash
consideration (including, without limitation, any payments received in respect
of covenants not to compete, consulting or management fees, and any portion of
the amount received in cash upon payment of a buyer promissory note or other
evidence of Indebtedness) in connection with such issuance, sale, lease,
transfer or other disposition, minus (b) the sum of (i) any underwriting or
commitment fees or sales commissions required to be paid on the closing of such
transaction, (ii) any attorneys fees incurred by such Person in connection with
such transaction, (iii) cash taxes related to the transaction to the extent
payable by such Person, and (iv) with respect to any sale of all or a portion
of any Rainbow DBS Company, the aggregate amount of any Investments made
pursuant to Section 8.2(c)(i) by any Borrower Party in such Rainbow DBS
Company during the term of this Agreement.

 

“Net Income” shall
mean, with respect to any Person for any period, the aggregate amount of net
income of such Person, after taxes (unless such Person is a partnership or
limited liability company), for such period as determined in accordance with
GAAP.

 

“New Affiliated Equity”
shall mean any infusion of equity by CVC, any Affiliate of CVC or any other Person
satisfactory to the Majority Lenders into the Borrower after the Agreement Date
(whether the amount of such equity shall have been obtained by any such Person
in connection with the public issuance of stock or other equity interests by
such Person or otherwise) to the extent the Net Cash Proceeds received in
connection with the issuance of any such equity are not required to be used to
repay the Loans under Section 2.6 hereof.

 

24

 

“Notes” shall
mean, collectively, the Revolving Notes, the Term B Notes, the Swing Loan Note,
the Incremental Term C Notes and, if applicable, the Incremental Facility
Notes.

 

“Notice of
Continuation/Conversion” shall mean a notice in substantially the form of Exhibit
G attached hereto.

 

“Notice of Incremental
Facility Commitment” shall have the meaning set forth in
Section 2.14(b)  hereof.

 

“Obligations”
shall mean (a) all payment and performance obligations of the Borrower and all
other obligors to the Lenders, the Swing Loan Lender, the Incremental Facility
Lenders, the Administrative Agent and the other Credit Parties under this
Agreement and the other Loan Documents, as they may be amended from time to
time, or as a result of making the Loans or the Incremental Facility Loans,
including, without limitation, obligations of the Borrower under Interest Hedge
Agreements (only to the extent that such Interest Hedge Agreements are
permitted pursuant to Section 8.1(d) hereof) with any Credit Party or any
Lender Affiliate of a Credit Party (or any Person that was a Credit Party (or a
Lender Affiliate thereof) on the date of entering into such Interest Hedge
Agreement), and (b) the obligation to pay an amount equal to the amount of any
and all damages which the Lenders, the Swing Loan Lender, the Incremental
Facility Lenders, the Administrative Agent or the other Credit Parties, or any
of them, or any of their Lender Affiliates, may suffer by reason of a breach by
the Borrower or any other obligor of any obligation, covenant or undertaking
with respect to this Agreement or any other Loan Document.

 

“Original Closing Date”
shall mean March 14, 2003.

 

“Partnership Pledge
Agreement” shall mean that certain Amended and Restated Partnership Pledge
Agreement among the Borrower, the AMC Partners, the IFC Partners and the
Administrative Agent, for the ratable benefit of the Credit Parties, dated as
of the Agreement Date, in substantially the form of Exhibit H attached
hereto, pursuant to which the Borrower, the AMC Partners and the IFC Partners have
pledged to the Administrative Agent, for the ratable benefit of the Credit
Parties, all of their respective rights in and to the Constituent Documents of
AMC and IFC, including, without limitation, the equity interests owned by each
of the AMC Partners in AMC and the equity interests owned by each of the IFC
Partners in IFC.

 

“Paying Affiliated
Basic Subscribers” shall mean any Person which is a subscriber carried and
paid for pursuant to (a) any MSO Agreement existing on the Agreement Date or
arising after the Agreement Date or (b) any such MSO Agreement which expires or
has expired, provided that negotiations are continuing in good faith to renew
or extend such expired MSO Agreement and following the expiration of such MSO
Agreement, the programming of the applicable Borrower Parties continues to be
exhibited, distributed and paid for by the applicable pay television
distributor under its 

 

25

 

existing terms or under
terms materially no less favorable to the Borrower Parties than such existing
terms.

 

“Payment Date”
shall mean the last day of each Eurodollar Advance Period.

 

“PBGC” shall mean
the Pension Benefit Guaranty Corporation, or any successor thereto.

 

“Permitted Investments”
shall mean Investments described in and permitted to be made under
Section 8.2 hereof.

 

“Permitted Liens”
shall mean, as applied to any Person:

 

(a)                                  Any
Lien in favor of any Credit Party given to secure the Obligations;

 

(b)                                 (i)
Liens on real estate for real estate taxes not yet delinquent and (ii) Liens
for taxes, assessments, judgments, governmental charges or levies, or claims
the non-payment of which is being contested in good faith by appropriate
proceedings and for which adequate reserves have been set aside on such Person’s
books, but only so long as no foreclosure, distraint, sale, or similar
proceedings have been commenced with respect thereto and remain unstayed for a
period of thirty (30) days after their commencement;

 

(c)                                  Liens
of carriers, warehousemen, mechanics, laborers, and materialmen incurred in the
ordinary course of business for sums not yet due or being contested in good
faith, if such reserve or appropriate provision, if any, as shall be required
by GAAP shall have been made therefor;

 

(d)                                 Liens
incurred in the ordinary course of business in connection with worker’s
compensation and unemployment insurance;

 

(e)                                  Restrictions
on the transfer of assets imposed by any agreement (other than any agreement
relating to Indebtedness), or by any federal, state or local statute,
regulation or ordinance applicable to such Person;

 

(f)                                    Easements,
rights-of-way, restrictions, and other similar encumbrances on the use of real
property which do not interfere with the ordinary conduct of the business of
such Person, or Liens on real property 
incidental to the conduct of the business of such Person or to the
ownership of its real properties which were not incurred in connection with
Indebtedness or other extensions of credit and which do not in the aggregate
materially detract from the value of such properties or materially impair their
use in the operation of the business of such Person; and

 

26

 

(g)                                 Liens
in respect of Capitalized Lease Obligations permitted under this Agreement.

 

“Person” shall
mean an individual, Company, unincorporated organization, or a government or
any agency or political subdivision thereof.

 

“Plan” shall mean,
with respect to the Borrower and its Subsidiaries, an employee benefit plan
within the meaning of Section 3(3) of ERISA sponsored or maintained by or
contributed to by the Borrower or any of its Subsidiaries for the benefit of
employees of the Borrower or such Subsidiaries, as the case may be, but
excluding any Multiemployer Plan.

 

“Prime Rate” shall
mean, at any time, the rate of interest adopted by The Toronto-Dominion Bank,
New York Branch, as its reference rate for the determination of interest rates
for loans of varying maturities in Dollars to United States residents of
varying degrees of creditworthiness and being quoted at such time by such bank
as its “prime rate.”  The Prime Rate is
not necessarily the lowest rate of interest charged to borrowers of The
Toronto-Dominion Bank, New York Branch.

 

“Prior AMC Loan
Agreement” shall have the meaning ascribed thereto in the recitals to this
Agreement.

 

“Prior RMH Loan
Agreement” shall have the meaning ascribed thereto in the recitals to this
Agreement.

 

“Pro Rata Share”
shall have the meaning ascribed thereto in Article 3 hereof.

 

“RAH” shall mean Rainbow
Advertising Holdings LLC, a Delaware limited liability company.

 

“Rainbow Companies”
shall mean, collectively, the Borrower Parties; and “Rainbow Company”
shall mean any one of the Borrower Parties.

 

“Rainbow DBS Companies”
shall mean, collectively, (a) Rainbow DBS Holdings, Inc., a Delaware
corporation, (b) Rainbow DBS Company, LLC (formerly known as R/L DBS Company,
LLC), a Delaware limited liability company, and (c) Rainbow HD Holdings LLC, a
Delaware limited liability company, and its Subsidiaries, and “Rainbow DBS
Company” shall mean any one of the foregoing Rainbow DBS Companies.

 

“Rainbow DBS Spin-Off”
shall mean the spin-off of the Borrower’s satellite broadcast operations
(including the Rainbow DBS Companies) to the extent that such spin-off includes
any of the Borrower Parties.

 

27

 

“Rainbow/Fox Entities”
shall mean, collectively, RPP, National Advertising Partners, a New York
general partnership, National Sports Partners, a New York general partnership,
and their respective Subsidiaries, and “Rainbow/Fox Entity” shall mean
any one of the foregoing Rainbow/Fox Entities.

 

“Rainbow Group”
shall mean, collectively, the Borrower, the Guarantors and the Unrestricted
Subsidiaries.

 

“Register” shall
have the meaning set forth in Section 12.5(b) hereof.

 

“Regulatory Change”
shall mean, with respect to any Lender, any change on or after the Agreement
Date in United States federal, state or foreign laws or regulations (including,
without limitation, Regulation D of the Board of Governors of the Federal
Reserve System) or the adoption or making on or after such date of any
interpretations, directives or requests applying to a class of banks including
such Lender of or under any United States federal or state, or any foreign,
laws or regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.

 

“Reportable Event”
shall have the meaning set forth in Section 4043 of ERISA, other than an
event for which the reporting requirement has been waived by regulations
promulgated under such Section.

 

“Request for Advance”
shall mean any certificate signed by an Authorized Signatory of the Borrower
requesting an Advance (other than a Swing Loan) hereunder, which certificate
shall be in substantially the form of Exhibit I attached hereto.

 

“Request for Issuance
of Letter of Credit” shall mean any certificate signed by an Authorized
Signatory of the Borrower requesting a Letter of Credit hereunder, which
certificate shall be in substantially the form of Exhibit J attached
hereto.

 

“Responsible Officer”
shall mean (a) with respect to CVC, Persons holding any of the following
offices at CVC:  the Senior Vice
President-Treasury, the Vice President-Treasury and the Senior Vice President,
Deputy General Counsel and Secretary, and (b) with respect to the Borrower,
Persons holding any of the following offices (or the equivalent):  chief executive officer, president, chief
financial officer or general counsel.

 

“Restatement”
shall mean any restatement or prior
period adjustment with respect to the consolidated financial statements of the
Borrower Parties which would have been required pursuant to the Financial
Accounting Standards Board’s Statement No. 16 or otherwise had the Borrower
Parties been considered a separate reporting group by the SEC, which
restatement or adjustment would result in either (a) the Cash Flow of the MGM
Operating Companies determined for the twelve (12) month period ended on 

 

28

 

the
last day of the latest period of adjustment or restatement being reduced by ten
percent (10%) or more from the Cash Flow of the MGM Operating Companies
originally reported (without giving effect to any prior restatements or
adjustments) or (b) the occurrence of a breach of any Financial Covenants based
upon compliance calculations taking into account such restatement or
adjustment, determined as of the last day of the applicable period for which
such restatement or adjustment applied.

 

“Restricted Payment”
shall mean (a) any direct or indirect distribution, dividend or other payment
to any Person on account of any shares of capital stock or other securities of
any of the Borrower Parties, (b) any payment of consulting or management fees,
or any interest thereon, by any of the Borrower Parties to CVC or to any other
Affiliate of the Borrower Parties (including, without limitation, payments
under the AMC Consulting Agreement or the Services Agreement), (c) any payment
of amounts due in respect of any Accrued Tax Liabilities pursuant to the Tax
Sharing Policy, and (d) any payment of principal or interest on account of any
Indebtedness of any of the Borrower Parties issued in connection with an
Authorized Debt Issuance.

 

“Restricted Purchase”
shall mean any payment on account of the purchase, redemption, or other
acquisition or retirement of any shares of capital stock or other securities of
any of the Borrower Parties, including, without limitation, any warrants or
other rights or options to acquire shares of capital stock or other securities
of any of the Borrower Parties.

 

“Restructuring Charges”
shall mean, as determined for any period for the MGM Operating Companies on a
consolidated basis, restructuring charges incurred by the MGM Operating
Companies in connection with exiting an activity or restructuring an operation
or activity, in accordance with GAAP.

 

“Revolving Commitment
Percentage” shall mean, with respect to any Lender, the ratio, expressed as
a percentage, of (a) the Revolving Loan Commitment of such Lender, divided by
(b) the aggregate Revolving Loan Commitments of all of the Lenders.  As of the Agreement Date, the Revolving
Commitment Percentage of each Lender is set forth on Schedule 1 to the
Lender Addendum delivered by such Lender under the caption “Revolving
Commitment Percentage”.

 

“Revolving Loan
Commitment” shall mean the several obligations of certain of the Lenders to
advance the sum of up to $200,000,000 to the Borrower, on or after the
Agreement Date, in accordance with their respective Revolving Commitment
Percentages and as such amount may be reduced from time to time, all pursuant
to the terms hereof.

 

“Revolving Loans”
shall mean, collectively, the amounts advanced by certain of the Lenders to the
Borrower under the Revolving Loan Commitment, not to exceed the amount of the
Revolving Loan Commitment and not to include Swing Loans.

 

29

 

“Revolving Notes”
shall mean those certain revolving promissory notes issued by the Borrower to
each of the Lenders issuing a Revolving Loan Commitment that requests a
promissory note in accordance with each such Lender’s Revolving Commitment
Percentage, each one substantially in the form of Exhibit K attached
hereto, and any extensions, modifications, renewals or replacements of or
amendments to any of the foregoing.

 

“RMH” shall have
the meaning ascribed thereto in the recitals to this Agreement.

 

“RMH Administrative
Agent” shall have the meaning ascribed thereto in the recitals to this
Agreement.

 

“RMH Arrangers”
shall have the meaning ascribed thereto in the recitals to this Agreement.

 

“RMH Collateral”
shall have the meaning ascribed thereto in Section 12.18 hereof.

 

“RMH Credit Parties”
shall have the meaning ascribed thereto in the recitals to this Agreement.

 

“RMH Guarantors”
shall have the meaning ascribed thereto in the recitals to this Agreement.

 

“RMH Loan Documents”
shall have the meaning ascribed thereto in the recitals to this Agreement.

 

“RMH Obligations”
shall have the meaning ascribed thereto in the recitals to this Agreement.

 

“RMH Revolver”
shall have the meaning ascribed thereto in the recitals to this Agreement.

 

“RMH Syndication Agent”
shall have the meaning ascribed thereto in the recitals to this Agreement.

 

“RMH Term B” shall
have the meaning ascribed thereto in the recitals to this Agreement.

 

“RNSH” shall mean
Rainbow National Sports Holdings LLC, a Delaware limited liability.

 

“RPP” shall mean
Regional Programming Partners, a New York general partnership.

 

30

 

“RPP Regional Sports
Networks” shall mean, collectively, the Subsidiaries of RPP which
constitute the regional sports networks serving markets outside of the New York
metropolitan area.

 

“RRH” shall mean
Rainbow Regional Holdings LLC, a Delaware limited liability company.

 

“RRH I” shall mean
RRH I, LLC, a Delaware limited liability company.

 

“RRH II” shall
mean RRH II, L.L.C., a Delaware limited liability company.

 

“S&P” shall
mean Standard & Poor’s Ratings Group, a division of McGraw-Hill, Inc.

 

“SC-CHI” shall
mean Sports Channel Chicago Associates, a New York general partnership.

 

“SEC” shall mean
the United States Securities and Exchange Commission or any successor agency
thereof.

 

“Security Documents”
shall mean the Borrower Pledge Agreement, the Borrower Security Agreement, the
Partnership Pledge Agreement, the CSC Holdings Pledge Agreement, the Subsidiary
Pledge Agreement, the Subsidiary Security Agreement, the Trademark Security
Agreement, any other agreement or instrument providing Collateral for the
Obligations whether now or hereafter in existence, and any filings,
instruments, agreements and documents related thereto and providing the
Administrative Agent, for the ratable benefit of the Credit Parties, with
Collateral for the Obligations.

 

“Senior Debt”
shall mean, as of any date without duplication, the result of (a) Total Debt,
minus (b) the aggregate principal amount of any Authorized Debt Issuance then outstanding.

 

“Senior Leverage Ratio”
shall mean, on any calculation date, the ratio of (a) Senior Debt to (b)
Annualized Cash Flow.

 

“Services Agreement”
shall mean, collectively, those certain Services Agreements identified on Schedule 8.11
attached hereto.

 

“Six Month Cash Flow”
shall mean the result of (a) Annualized Cash Flow, divided by (b) two (2).

 

“Solvent” shall
mean, with respect to any Person on any date, that on such date (a) the fair
value of the property (tangible or intangible) of such Person is greater 

 

31

 

than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Person, (b) the amount that will be required to pay the probable liabilities of
such Person on its debts as they become absolute and matured will not be
greater than the fair salable value of the assets of such Person at such time,
(c) such Person is able to realize upon its assets and pay its debts and other
liabilities, contingent obligations and other commitments as they mature in the
normal course of business, and (d) such Person is not engaged in a business or
a transaction, and is not about to engage in a business or a transaction, for
which such Person’s property would constitute unreasonably small capital after
giving due consideration to prevailing practices in the industry in which such
Person is engaged.  In computing the
amount of any contingent liability at any time, it is intended that such
liability will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that might
reasonably be expected to become an actual or matured liability.

 

“Sportsvision Guaranty”
shall mean the guaranty provided by the Borrower in respect of those certain
payments to be made under the programming rights agreement, dated as of
March 4, 1999, entered into by SC-CHI, pursuant to which SC-CHI obtained
the right to broadcast certain games of the Chicago White Sox, a Major League
Baseball franchise, the Chicago Blackhawks, a National Hockey League franchise,
and the Chicago Bulls, a National Basketball Association franchise.

 

“Subordination of
Intercompany Obligations Agreement” shall mean that certain Amended and
Restated Subordination of Intercompany Obligations Agreement, dated as of the
Agreement Date, among the Administrative Agent, CSC Holdings, the Borrower,
AMC, WE and any other Affiliate of CSC Holdings that is a party to the AMC
Consulting Agreement, in substantially the form of Exhibit L attached
hereto, pursuant to which the payment of fees under the AMC Consulting
Agreement and the Services Agreement have been subordinated to the Obligations
as provided therein.

 

“Subsidiary” shall
mean, as applied to any Person, (a) any corporation of which fifty percent
(50%) or more of the outstanding stock (other than directors’ qualifying
shares) having ordinary voting power to elect a majority of its board of
directors, regardless of the existence at the time of a right of the holders of
any class or classes of securities of such corporation to exercise such voting
power by reason of the happening of any contingency, or any partnership or
other Company of which fifty percent (50%) or more of the outstanding
partnership or other equity interests, is at the time owned directly or
indirectly by such Person, or by one or more Subsidiaries of such Person, or by
such Person and one or more Subsidiaries of such Person, and (b) any other
entity which is controlled or capable of being controlled by such Person, or by
one or more Subsidiaries of such Person, or by such Person and one or more
Subsidiaries of such Person; provided that, in the case of the Borrower
and its Subsidiaries, the term “Subsidiary” shall exclude the Unrestricted
Subsidiaries, except that, notwithstanding the foregoing, (a) any Companies
formed pursuant to clause (c) of the definition of “Unrestricted Subsidiaries”
shall be considered Subsidiaries for purposes of determining

 

32

 

compliance with such
clause, (b) the Unrestricted Subsidiaries (other than the GE Subsidiaries and
any Rainbow/Fox Entity) shall be considered “Subsidiaries” solely for purposes
of Sections 5.1(h), 5.1(m), 6.6, 6.10, 7.5(d), 8.13 and 9.1(l) of this
Agreement, and (c) with respect to the definition of “Material Subsidiaries,”
the Unrestricted Subsidiaries (other than the GE Subsidiaries and any
Rainbow/Fox Entity) will be considered Material Subsidiaries to the extent such
Companies would have constituted Material Subsidiaries but for application of
the foregoing exclusion.

 

“Subsidiary Pledge
Agreement” shall mean that certain Amended and Restated Subsidiary Pledge
Agreement between each Guarantor having one or more Subsidiaries and the
Administrative Agent, for the ratable benefit of the Credit Parties, dated as
of the Agreement Date, in substantially in the form of Exhibit M
attached hereto, and any similar pledge agreement or any pledge agreement
supplement delivered pursuant to Section 6.14 hereof, pursuant to which
each such Guarantor has pledged to the Administrative Agent, for the ratable
benefit of the Credit Parties, all of the stock and other equity interests
owned by it (other than the stock or other equity interests of any Unrestricted
Subsidiary).

 

“Subsidiary Security
Agreement” shall mean that certain Amended and Restated Subsidiary Security
Agreement between each Guarantor and the Administrative Agent, for the ratable
benefit of the Credit Parties, dated as of the Agreement Date, in substantially
the form of Exhibit N attached hereto, and any similar security
agreement or any security agreement supplement delivered pursuant to
Section 6.14 hereof.

 

“Super-Majority
Lenders” shall mean, at any time, (a) prior to the occurrence of an Event
of Default and termination of the Commitments, Lenders the sum of whose Undrawn
Commitments plus Loans then outstanding equals or exceeds sixty-six and
two-thirds percent (66-2/3%) of the sum of the Undrawn Commitments plus Loans
then outstanding for all Lenders, or (b) at any time there exists an Event of
Default hereunder, and the Commitments have been terminated, Lenders the total
of whose Loans outstanding equals or exceeds sixty-six and two-thirds percent
(66-2/3%) of the total principal amount of the Loans then outstanding
hereunder.

 

“Swing Loan Committed
Amount” shall mean $8,750,000.

 

“Swing Loans”
shall mean revolving loans made to the Borrower by the Swing Loan Lender from
time to time in the Swing Loan Lender’s sole discretion and for the Swing Loan
Lender’s account, which revolving loans shall be made in accordance with
Sections 2.1(b) and 2.8 hereof.

 

“Swing Loan Lender”
shall mean any Lender or the Administrative Agent as agreed to at any time by
the Borrower and such Lender or the Administrative Agent, in either case as
designated in accordance with this Agreement. 
The initial Swing Loan Lender shall be Toronto Dominion (Texas), Inc.

 

33

 

“Swing Loan Note”
shall mean that certain Swing Loan Note dated as of the Agreement Date, in the
principal amount of $8,750,000, issued by the Borrower to the Swing Loan
Lender, substantially in the form of Exhibit O attached hereto, and any
amendments, replacements, extensions or renewals thereof.

 

“Swing Loan Request”
shall have the meaning set forth in Section 2.8(a)(i) hereof.

 

“Tax Sharing Policy”
shall mean the policy applicable to CVC, CSC Holdings and the Borrower, among
others, with respect to the allocation of tax liabilities and other tax-related
items among CVC, CSC Holdings, the Borrower and its Subsidiaries, based
principally upon the financial income, taxable income, credits and other
amounts directly related to the respective parties as set forth in that certain
Tax Sharing Policy, a copy of which as in existence on the Agreement Date is
attached hereto as Schedule 2, as in effect on the Agreement Date
or as permitted to be amended hereunder.

 

“Taxes” shall have
the meaning set forth in Section 2.10(c)(i) hereof.

 

“Term B Commitment
Percentage” shall mean, with respect to any Lender, the ratio, expressed as
a percentage, of (a) the Term B Loan Commitment of such Lender, divided by (b)
the aggregate Term B Loan Commitments of all of the Lenders.  As of the Agreement Date, the Term B
Commitment Percentage of each Lender is set forth on Schedule 1 to the
Lender Addendum delivered by such Lender under the caption “Term B Commitment
Percentage”.

 

“Term B Loan
Commitment” shall mean the several obligations of certain of the Lenders to
advance the sum of up to $175,000,000 to the Borrower on the Original Closing
Date, in accordance with their respective Term B Commitment Percentages, all
pursuant to the terms hereof.

 

“Term B Loans”
shall mean, collectively, the amount advanced by certain of the Lenders to the
Borrower under the Term B Loan Commitment, not to exceed the amount of the Term
B Loan Commitment.

 

“Term B Notes”
shall mean those certain term notes issued by the Borrower to each of the
Lenders issuing a Term B Loan Commitment that requests a promissory note in
accordance with each such Lender’s Term B Commitment Percentage, each one
substantially in the form of Exhibit P attached hereto, and any
extensions, modifications, renewals or replacements of or amendments to any of
the foregoing.

 

“Term Loans” shall
mean, collectively, the Term B Loans and the Incremental Term C Loans.

 

34

 

“Total Debt” shall
mean, as of any date without duplication, with respect to the Borrower Parties
on a consolidated basis, (a) all outstanding Indebtedness For Money Borrowed,
(b) all obligations Guaranteed by the Borrower Parties in respect of
Indebtedness for Money Borrowed, (c) all Capitalized Lease Obligations (other
than obligations under Film Rights Agreements), and (d) all Accrued Tax Liabilities.

 

“Total Leverage Ratio”
shall mean, on any calculation date, the ratio of (a) Total Debt to (b)
Annualized Cash Flow.

 

“Trademark Security
Agreement” shall mean that certain Amended and Restated Trademark Security
Agreement between each Borrower Party owning any trademarks or trademark
applications and the Administrative Agent, for the ratable benefit of the
Credit Parties, dated as of the Agreement Date, substantially in the form of Exhibit
Q attached hereto, and any similar pledge agreement or any pledge agreement
supplement delivered pursuant to Section 6.14 hereof.

 

“Trailing Six Month
Interest Expense” shall mean Interest Expense for the Borrower Parties on a
consolidated basis for the most recently completed six (6) month period.

 

“Transponder Lease
Agreement” shall mean any agreement by and between any of the Borrower
Parties and any other Person for the license, lease or other agreement to use
telecommunications satellites for purposes of broadcasting the programming of
such Borrower Parties and any other agreement related to the transmission,
origination and production of such programming and the related technical
services.

 

“Undrawn Commitments”
shall mean, collectively, the unfunded portions of the Revolving Loan
Commitment and the Term B Loan Commitment, together with the undrawn amount of
the Incremental Term C Loan Commitment and all other Incremental Facility
Commitments issued hereunder.  

 

“Unrestricted
Subsidiaries” shall mean, collectively, each of the Companies designated as
Unrestricted Subsidiaries as of the Agreement Date on Schedule 5.1(c)-2
hereto, and “Unrestricted Subsidiary” shall mean any one of the
foregoing Unrestricted Subsidiaries; provided, however, that
after the Agreement Date, the Borrower may designate as additional Unrestricted
Subsidiaries (a) members of the Mag Rack Group formed after the Agreement Date,
(b) any successor entity to any Rainbow DBS Company, (c) any Subsidiary of the
Borrower formed after the Agreement Date so long as such Subsidiary shall have
(either individually or collectively, in the case of any holding company
Subsidiaries) a “fair market value” of $5,000,000 or less, as determined by the
Arrangers in their reasonable discretion, and (d) other Companies with the
approval of the Majority Lenders; provided  further, however,
that in the event the Guarantee of any FUSE Company and the Administrative
Agent’s Lien of such FUSE 

 

35

 

Company shall be
released, such FUSE Company (and each of its Subsidiaries) shall constitute an
Unrestricted Subsidiary for purposes of this Agreement.

 

“Unused Percentage”
shall mean, on any date, the ratio, expressed as a percentage, of (a) the
Available Revolving Loan Commitment to (b) the Revolving Loan Commitment.

 

“WE” shall mean
WE:  Women’s Entertainment LLC, a
Delaware limited liability company.

 

Each definition of an
agreement in this Article 1 shall include such agreement as amended,
restated, supplemented or otherwise modified (and, to the extent applicable, as
renewed or extended) from time to time provided that, if required pursuant to
the terms of this Agreement, the prior written consent of the Majority Lenders
(or such other composition of Lenders as may be required under
Section 12.12 hereof) shall have been given with respect to such
amendment, restatement, supplement or other modification.  Except where the context otherwise requires,
definitions imparting the singular shall include the plural and vice versa.  Except where otherwise specifically
restricted, reference to a party to a Loan Document includes that party and its
successors and assigns.  An Event of
Default shall “exist”, “continue” or be “continuing” until such Event of
Default has been waived in writing in accordance with Section 12.12
hereof.  All terms used herein which are
defined in Article 9 of the Uniform Commercial Code in effect in the State
of New York on the date hereof and which are not otherwise defined herein shall
have the same meanings herein as set forth therein.

 

All accounting terms used
herein without definition shall be used as defined under GAAP.  In the event that changes in GAAP during the
term of this Agreement would result in the defined terms set forth in this
Article 1 or the Financial Covenants being calculated in a different
manner or with different components or rendering the same not meaningful
criteria for evaluating the MGM Operating Companies’ financial condition, the
Borrower and the Arrangers agree to propose to the Credit Parties, and to vote
affirmatively with respect to, any amendments to this Agreement that the
Borrower and the Arrangers shall determine are reasonably necessary to conform
the defined terms set forth in this Article 1 and the Financial Covenants
so that the criteria for evaluating the matters contemplated by Sections 8.8,
8.9, 8.10 and 8.11 hereof are substantially the same criteria as were effective
prior to such change in GAAP.  Unless
otherwise expressly stated herein, all references to financial information and
results of the Borrower shall be determined on a consolidated basis among the
Borrower Parties, and all references to financial information and results of
the MGM Operating Companies shall be determined on a consolidated basis among
the MGM Operating Companies.

 

36

 

ARTICLE 2 - Loans.

 

Section 2.1 The Loans.  Subject to the terms and conditions of, and
in reliance upon the representations and warranties made in, this Agreement and
the other Loan Documents, the Lenders agree, severally in accordance with their
respective Commitment Percentages and not jointly, to make Loans to the
Borrower in an aggregate principal amount not to exceed, as of the Agreement
Date after giving effect to any funding of the Incremental Term C Loans and any
prepayment of the Term B Loans on such date, Eight Hundred Twenty-Four Million
Five Hundred Sixty-Two Thousand Five Hundred Dollars and 00/100s
($824,562,500.00).

 

(a)                                  The
Revolving Loans.  The Lenders that
have issued a Revolving Loan Commitment agree, severally in accordance with
their respective Revolving Commitment Percentages and not jointly, upon the
terms and subject to the conditions of this Agreement, to lend and re-lend to
the Borrower, on and after the Agreement Date, but prior to the Initial Maturity
Date, amounts which, in the aggregate, together with the principal amount of
any Swing Loans and any L/C Obligations outstanding at any time, do not exceed
the Revolving Loan Commitment.  Subject
to the terms and conditions hereof and prior to the Initial Maturity Date,
Advances under the Revolving Loan Commitment may be repaid and reborrowed from
time to time on a revolving basis or may be continued or converted pursuant to
a Notice of Continuation/Conversion as provided in Section 2.2 hereof.

 

(b)                                 The
Swing Loans.  Subject to the terms
and conditions hereinafter set forth, including, without limitation,
Section 2.8 hereof, the Swing Loan Lender, in its individual capacity, may
in its sole discretion make revolving loans to the Borrower (each a “Swing
Loan” and, collectively, the “Swing Loans”) from time to time on and
after the Agreement Date, but prior to the Initial Maturity Date, for the
purposes hereinafter set forth; provided, however, that (i) the
aggregate amount of Swing Loans outstanding at any time shall not exceed the
Swing Loan Committed Amount, and (ii) the sum of Revolving Loans, plus Swing
Loans, plus L/C Obligations outstanding at any time shall not exceed the
Revolving Loan Commitment.  Swing Loans
hereunder may be repaid and reborrowed in accordance with the provisions
hereof.

 

(c)                                  The
Letters of Credit.  Each Issuing
Bank agrees, upon the terms and subject to the conditions of this Agreement, to
issue from time to time, on and after the Agreement Date, but prior to the
Initial Maturity Date, for the account of the Borrower, Letters of Credit to
such beneficiaries as shall be designated in writing by the Borrower to such
Issuing Bank, up to the limit of the Letter of Credit Committed Amount.

 

(d)                                 The
Term B Loans.  The Lenders that
issued a Term B Loan Commitment on the Original Closing Date have made, during
the period from and after the Original Closing Date to the Agreement Date,
severally and in accordance with their respective Term B Commitment Percentages
existing as of the Original Closing Date and not jointly, upon the terms and
subject to the conditions of this Agreement,

 

37

 

Term B Loans to
the Borrower (or to AMC, IFC and WE under the Prior AMC Loan Agreement, which
Term B Loans have been assumed by the Borrower pursuant to this Agreement) in
an aggregate amount equal to the Term B Loan Commitment.  After the Agreement Date, Advances under the
Term B Loan Commitment may be continued or converted pursuant to a Notice of
Conversion/Continuation as provided in Section 2.2 hereof; provided,
however, there shall be no increase in the aggregate principal amount of
the Term B Loans outstanding at any time after the Agreement Date.  Amounts repaid under the Term B Loan
Commitment may not be reborrowed.

 

(e)                                  The
Incremental Term C Loans.  The
Lenders that have issued an Incremental Term C Loan Commitment, severally and
in accordance with their respective Incremental Term C Commitment Percentages
and not jointly, upon the terms and subject to the conditions of this
Agreement, agree to lend to the Borrower on the Agreement Date an amount equal
to the Incremental Term C Loan Commitment. 
After the Agreement Date, Advances under the Incremental Term C Loan
Commitment may be continued or converted pursuant to a Notice of
Conversion/Continuation as provided in Section 2.2 hereof; provided,
however, there shall be no increase in the aggregate principal amount of
the Incremental Term C Loans outstanding at any time after the Agreement
Date.  Amounts repaid under the
Incremental Term C Loan Commitment may not be reborrowed.

 

(f)                                    Use
of Proceeds.  The proceeds of the
Loans (i) may be used solely (x) to make Acquisitions and Restricted Payments
to the extent permitted under this Agreement and to make Permitted Investments,
and (y) for working capital and other general corporate purposes of the
Borrower Parties, and (ii) with respect to a portion of the proceeds of the
Incremental Term C Loans, shall be used on the Agreement Date, to repay in full
the outstanding principal amount of the Term B Loans.

 

Section 2.2 Manner of
Borrowing and Disbursement.

 

(a)                                  Choice
of Interest Rate, Etc.  Any Advance
(i) under the Revolving Loan Commitment (except with respect to (A) Swing Loans
and (B) Advances in respect of reimbursement of amounts advanced to
beneficiaries under Letters of Credit, which Advances shall in all cases be
Base Rate Advances initially) shall, at the option of the Borrower, be made as
a Base Rate Advance or a Eurodollar Advance, (ii) under the Term B Loan
Commitment shall, at the option of the Borrower, be made as a Base Rate Advance
or a Eurodollar Advance, and (iii) under the Incremental Term C Loan Commitment
(except with respect to any Advance of the Incremental Term C Loans on the
Agreement Date, which Advance shall be made as a Base Rate Advance initially)
shall, at the option of the Borrower, be made as a Base Rate Advance or a
Eurodollar Advance; provided, however, that (A) if the Borrower
fails to give the Administrative Agent telephonic notice specifying whether a
Eurodollar Advance is to be repaid, continued or converted on a Payment Date,
such Eurodollar Advance shall be converted to a Base Rate Advance on such
Payment Date, and (B) the Borrower may not select a 

 

38

 

Eurodollar Advance
if, at the time of such selection, a Default or Event of Default has occurred
and is continuing.  Eurodollar Advances
shall in all cases be subject to Article 11 hereof.  Any notice given to the Administrative Agent
in connection with a requested Advance hereunder shall be given to the
Administrative Agent prior to 11:00 a.m. (New York time) in order for such
Business Day to count toward the minimum number of Business Days required.

 

(b)                                 Base
Rate Advances.

 

(i)                           Initial
and Subsequent Advances.  The
Borrower shall give the Administrative Agent in the case of Base Rate Advances,
irrevocable notice not later than 11:00 a.m. (New York time) on the date of the
requested Advance by telephone followed immediately by a Request for
Advance.  Upon receipt of such notice
from the Borrower, the Administrative Agent shall promptly notify each Lender
by telephone or telecopy of the contents thereof.

 

(ii)                        Repayments
and Conversions.  The Borrower may
(A) repay or prepay a Base Rate Advance upon prior irrevocable telephonic
notice to the Administrative Agent not later than 11:00 a.m. (New York time) on
the date of repayment or prepayment, or (B) convert all or a portion of the
principal amount of a Base Rate Advance to one or more Eurodollar Advances upon
prior irrevocable written notice to the Administrative Agent not later than
11:00 a.m. (New York time) on the date three (3) Business Days prior to such
conversion in the form of a Notice of Conversion/Continuation, or notice by telephone
or telecopy followed immediately by a Notice of Conversion/Continuation.  On the date indicated by the Borrower, such
Base Rate Advance shall be so repaid or, as applicable, converted.

 

(iii)                     Miscellaneous.  Notwithstanding any term or provision of this
Agreement which may be construed to the contrary, each Base Rate Advance shall
be in a principal amount of at least $1,000,000 and in integral multiples of
$500,000 in excess thereof, or in the case of Advances of the Revolving Loans,
the remaining amount of the Revolving Loan Commitment. 

 

(c)                                  Eurodollar
Advances.

 

(i)                           Initial
and Subsequent Advances.  The
Borrower shall give the Administrative Agent, in the case of Eurodollar
Advances, irrevocable telephonic notice followed by a Request for Advance prior
to 11:00 a.m. (New York time) on the date three (3) Business Days prior to the
date of the requested Advance.  The
Administrative Agent, whose determination shall be conclusive, shall determine
the available Eurodollar Basis and shall notify the Borrower of such Eurodollar
Basis.  The Borrower shall promptly
notify the Administrative Agent by telecopy or by telephone, and shall
immediately confirm any such telephonic notice in writing, of its selection of
a Eurodollar Basis and a Eurodollar Advance Period for such Advance.  Upon receipt of 

 

39

 

such notice from
the Borrower, the Administrative Agent shall promptly notify each Lender by
telephone or telecopy of the contents thereof.

 

(ii)                        Repayments,
Continuations and Conversions.  The
Borrower shall give the Administrative Agent irrevocable written notice in the
form of a Notice of Conversion/Continuation, or notice by telephone or telecopy
followed immediately by a Notice of Conversion/Continuation, (A) not later than
11:00 a.m. (New York time) at least three (3) Business Days prior to each
applicable Payment Date, specifying whether all or a portion of any Eurodollar
Advance outstanding on such Payment Date is to be continued in whole or in part
as a Eurodollar Advance, in which case such notice shall also specify the
Eurodollar Advance Period which the Borrower shall have selected for such
continued Eurodollar Advance, (B) not later than 11:00 a.m. (New York time) at
least three (3) Business Days prior to each applicable Payment Date, specifying
whether all or any portion of any Eurodollar Advance outstanding on such
Payment Date, is to be converted in whole or in part to a Base Rate Advance, or
(C) not later than 11:00 a.m. (New York time) on each applicable Payment Date,
specifying whether all or any portion of any Eurodollar Advance outstanding on
such Payment Date, is to be repaid and not continued or converted.  Upon such Payment Date, such Eurodollar
Advance will, subject to the provisions hereof, be so repaid, continued or
converted, as applicable.

 

(iii)                     Miscellaneous.  Notwithstanding any term or provision of
this Agreement which may be construed to the contrary, each Eurodollar Advance
shall be in a principal amount of at least $1,000,000 and in integral multiples
of $500,000 in excess thereof, and at no time shall the aggregate number of all
Eurodollar Advances exceed twelve (12).

 

(d)                                 Telephone
Notice.  The failure by the Borrower
to confirm any notice by telephone or telecopy with a Request for Advance or a
Notice of Conversion/Continuation, as applicable, shall not invalidate any
notice so given.  The Administrative
Agent may rely upon telephonic instructions reasonably believed given by any
Authorized Signatory of the Borrower and shall have no obligation to inquire
into the propriety of any such instructions.

 

(e)                                  Notification
of Lenders.  Upon receipt of a
Request for Advance, or a Notice of Conversion/Continuation under this
Section 2.2 from the Borrower, or a request by an Issuing Bank for reimbursement
under Section 2.15 hereof, or a request or a deemed request by the Swing
Loan Lender for repayment of any outstanding Swing Loans under
Section 2.8(b) hereof, the Administrative Agent shall promptly notify each
Lender by telephone or telecopy of the contents thereof and the amount of such
Lender’s portion of the applicable Advance. 
Each Lender shall, not later than 1:00 p.m. (New York time) on the date
specified in such notice, make available to the Administrative Agent at the
Administrative Agent’s Office, or at such account as the

 

40

 

Administrative
Agent shall designate, the amount of its portion of the applicable Advance in
immediately available funds.

 

(f)                                    Disbursement.  Prior to 3:00 p.m. (New York time) on the
date of an Advance hereunder, the Administrative Agent shall, subject to the
satisfaction of the conditions set forth in this Section 2.2 and in
Article 4 hereof, disburse the amounts made available to the
Administrative Agent by the Lenders in immediately available funds by (i)
transferring the amounts so made available by wire transfer pursuant to the
instructions of the Borrower, or (ii) in the absence of such instructions,
crediting the amounts so made available to the account of the Borrower
maintained with the Administrative Agent or an Affiliate of the Administrative
Agent.  Unless the Administrative Agent
shall have received notice from a Lender prior to 2:00 p.m. (New York time) on
the date of any Advance that such Lender will not make available to the
Administrative Agent such Lender’s ratable portion of such Advance, and so long
as notice has been given as provided in Section 2.2(e) hereof, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Advance and the Administrative
Agent may, in its sole discretion and in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount.  If and to the extent such Lender shall not
have so made such ratable portion available to the Administrative Agent, such
Lender agrees to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent, at a rate equal to the daily average
Federal Funds Rate for such period.  If
such Lender shall repay to the Administrative Agent such corresponding amount,
such amount so repaid shall constitute such Lender’s portion of the applicable
Advance for purposes of this Agreement. 
If such Lender does not repay such corresponding amount immediately upon
the Administrative Agent’s demand therefor, the Administrative Agent shall
notify the Borrower, and the Borrower shall immediately pay such corresponding
amount to the Administrative Agent, together with all interest accrued thereon
at the interest rate that would have applied to such Advance had such Lender
funded its portion thereof.  The failure
of any Lender to fund its portion of any Advance shall not relieve any other
Lender of its obligation, if any, hereunder to fund its respective portion of
the Advance on the date of such borrowing, but no Lender shall be responsible
for any such failure of any other Lender. 
In the event that, at any time when the Borrower is not in Default and
has otherwise satisfied all of the conditions to funding set forth in this
Agreement, a Lender for any reason fails or refuses to fund its portion of an
Advance, then, until such time as such Lender has funded its portion of such
Advance, or all other Lenders have received payment in full (whether by
repayment or prepayment) of the principal and interest due in respect to such
advance, such non-funding Lender shall (i) have no right to vote regarding any
issue on which voting is required or advisable under this Agreement or any
other Loan Document and the calculation of Majority Lenders and Super-Majority
Lenders with respect solely to such votes shall be adjusted as if such
non-funding Lender has no Commitments and no Loans outstanding, and (ii) be
entitled to receive no 

 

41

 

payments of
principal, interest or fees from the Borrower in respect of such Loans which
such Lender failed to make.  Nothing in
this subsection shall be deemed to prejudice any rights that the Borrower
may have against any Lender as a result of any failure by such Lender to fund
its portion of any Advance.

 

Section 2.3 Interest.

 

(a)                                  On
Base Rate Advances.  Interest on
each Base Rate Advance shall be computed on the basis of a year of 365/366 days
when the Base Rate is determined by reference to the Prime Rate and on the
basis of a year of 360 days when the Base Rate is determined by reference to
the Federal Funds Rate, in each case for the actual number of days elapsed and
shall be payable in arrears on the last Business Day of each calendar quarter
during the term of this Agreement. 
Interest on Base Rate Advances then outstanding shall also be due and
payable on the date of any repayment made under Sections 2.5, 2.6 or 2.7 hereof
and on the applicable Maturity Date. 
Interest shall accrue and be payable on each Base Rate Advance at the
simple per annum interest rate equal to the sum of (i) the Base Rate and (ii)
the Applicable Margin in effect from time to time with respect to Base Rate
Advances pursuant to Section 2.3(f) hereof.

 

(b)                                 On
Eurodollar Advances.  Interest on
each Eurodollar Advance shall be computed on the basis of a 360-day year for
the actual number of days elapsed and shall be payable in arrears (i) on the
applicable Payment Date for such Eurodollar Advance, and (ii) if the Eurodollar
Advance Period for such Eurodollar Advance exceeds three (3) months, on each
three (3) month anniversary of the making of such Eurodollar Advance.  Interest on Eurodollar Advances then
outstanding shall also be due and payable on the date of any repayment made
under Sections 2.5, 2.6 or 2.7 hereof and  on the applicable Maturity Date.  Interest shall accrue and be payable on each
Eurodollar Advance at the simple per annum interest rate equal to the sum of
(A) the Eurodollar Basis applicable to such Eurodollar Advance and (B) the
Applicable Margin in effect from time to time with respect to Eurodollar
Advances pursuant to Section 2.3(f) hereof.

 

(c)                                  Interest
if No Notice of Selection of Interest Rate.  If the Borrower fails to give the Administrative Agent timely
notice of its selection of a Eurodollar Basis, or if for any reason a determination
of a Eurodollar Basis for any Eurodollar Advance is not timely concluded, the
Base Rate shall apply to such Advance and if the Borrower fails to elect to
repay, continue or convert any Eurodollar Advance then outstanding prior to the
last Payment Date applicable thereto in accordance with the provisions of
Section 2.2 hereof, as applicable, the Base Rate shall apply to such
Advance commencing on and after such Payment Date.

 

(d)                                 Interest
Upon Default.  Upon the occurrence
and during the continuance of an Event of Default, the Majority Lenders shall
have the option (but shall not be required to give prior notice thereof to the
Borrower, accelerate the maturity of the Loans or exercise any other rights or
remedies hereunder in connection with the exercise

 

42

 

of this right) to
charge interest on the outstanding principal balance of the Loans at the
Default Rate from the date of such Event of Default; provided, however,
notwithstanding the foregoing, interest shall automatically accrue on the
outstanding principal balance of the Loans at the Default Rate, without any
action necessary on the part of the Majority Lenders or any other Person, from
and after the occurrence of an Event of Default under any of Sections 9.1(b),
(i) or (j) hereof.  Such interest shall
be payable on the earlier of demand or the applicable Maturity Date, and shall
accrue until the earlier of (i) waiver or cure (to the satisfaction of the
Majority Lenders) of the applicable Event of Default, (ii) agreement by the
Majority Lenders to rescind the charging of interest at the Default Rate, or
(iii) payment in full of the Obligations.

 

(e)                                  Computation
of Interest.  In computing interest
on any Advance, the date of making the Advance shall be included and the date
of payment shall be excluded; provided, however, that if an
Advance is repaid on the date that it is made, one (1) day’s interest shall be
due with respect to such Advance.

 

(f)                                    Applicable
Margins.

 

(i)                           Advances
Under the Revolving Loan Commitment. 
With respect to any Advance under the Revolving Loan Commitment (except
with respect to Swing Loans), the Applicable Margin shall be the interest rate
margin, based upon the Total Leverage Ratio for the most recent calendar
quarter end, expressed as a per annum rate of interest as follows:

 

	
  If the Total Leverage:

  	
   

  	
  Then the
  Eurodollar

  Applicable Margin shall be:

  	
   

  	
  Then the
  Base Rate

  Applicable Margin shall be:

  	
   

  
	
  Greater than or equal
  to 2.25 to 1.00

  	
   

  	
  3.25

  	
  %

  	
  2.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less than 2.25 to 1.00

  	
   

  	
  3.00

  	
  %

  	
  2.00

  	
  %

  

 

Any increase in the
Applicable Margin shall take effect on the second (2nd) Business Day after the
performance certificate is required to be provided pursuant to Section 7.3
hereof.  Any decrease in the Applicable
Margin shall take effect on the later of (I) the second (2nd) Business Day
after the performance certificate is required to be provided pursuant to
Section 7.3 hereof and (II) the date on which the performance certificate
is actually provided pursuant to Section 7.3 hereof.

 

(ii)                        Advances
of the Term B Loans.  With respect
to any Advance of the Term B Loans, the Applicable Margin shall be (A) 3.50%
per annum with respect to any Eurodollar Advance and (B) 2.50% per annum with
respect to any Base Rate Advance.

 

43

 

(iii)                     Advances
of the Incremental Term C Loans. 
With respect to any Advance of the Incremental Term C Loans, the
Applicable Margin shall be (A) 2.25% per annum with respect to any Eurodollar
Advance and (B) 1.25% per annum with respect to any Base Rate Advance.

 

Section 2.4 Fees.

 

(a)                                  Commitment
Fee.  The Borrower agrees to pay to
the Administrative Agent on behalf of the Lenders, in accordance with their
respective Revolving Commitment Percentages, a commitment fee on the Available
Revolving Loan Commitment for each day from (and including) the Agreement Date
to the Initial Maturity Date, at a rate of (i) in the event that the Unused
Percentage shall be greater than or equal to fifty percent (50%),
three-quarters of one percent (0.750%) per annum and (ii) in the event that the
Unused Percentage shall be less than fifty percent (50%), one-half of one
percent (0.50%) per annum.  Such
commitment fees shall be computed on the basis of a year of 365/366 days for
the actual number of days elapsed, shall be payable quarterly in arrears on the
last Business Day of each quarter, and continuing on the last Business Day of
each successive quarter and on the Initial Maturity Date, and shall be fully
earned when due and nonrefundable when paid.

 

(b)                                 Letter
of Credit Fee.  The Borrower shall
pay to the Administrative Agent, for the account of the Lenders, on the last
Business Day of each calendar quarter for the calendar quarter then ending
(adding any fee applicable to dates during such calendar quarter falling after
the last Business Day of such calendar quarter to the fee payable for the
immediately succeeding calendar quarter), a fee equal to the product of (i) the
Applicable Margin then in effect with respect to Eurodollar Advances of the
Revolving Loans, multiplied by (ii) the face amount of each Letter of Credit
outstanding during such calendar quarter for such Letter of Credit’s duration
for such calendar quarter, computed on the basis of a year of 365/366 days for
the actual number of days elapsed.  The
Administrative Agent shall remit such fee promptly following receipt to each
Lender in accordance with such Lender’s Revolving Commitment Percentage.

 

(c)                                  Issuing
Bank Fee.  The Borrower shall pay to
each Issuing Bank, for its own account, an issuing bank fee equal to 0.125% of
the face amount of each Letter of Credit issued by such Issuing Bank hereunder,
on the last Business Day of each calendar quarter for the calendar quarter then
ending, for each calendar quarter in which such Letter of Credit is
outstanding.  The foregoing fee shall be
fully earned when due and nonrefundable when paid.  In the event of any inconsistency between the terms of this
Agreement and the terms of any letter of credit reimbursement agreements or indemnification
agreements between the Borrower and any Issuing Bank with respect to the
Letters of Credit issued by such Issuing Bank hereunder, the terms of this
Agreement shall control.

 

44

 

Section 2.5 Optional
Prepayments and Reductions.

 

(a)                                  Prepayment
of Advances under the Revolving Loan Commitment.  The principal amount of any Base Rate Advance under the Revolving
Loan Commitment may be prepaid in full or in part at any time, without penalty,
upon prior written notice prior to 11:00 a.m. (New York time) to the
Administrative Agent on the date of such prepayment, and the principal amount
of any Eurodollar Advance under the Revolving Loan Commitment may be prepaid
prior to the applicable Payment Date, upon telephonic notice to the
Administrative Agent (promptly confirmed in writing) prior to 11:00 a.m. (New
York time) on the date three (3) Business Days prior thereto, provided that the
Borrower shall reimburse the Lenders and the other Credit Parties, on the
earlier of demand or the Initial Maturity Date, for any loss or out-of-pocket
expense incurred by the Lenders or the other Credit Parties in connection with
such prepayment as set forth in Section 2.11 hereof.  Each notice of prepayment shall be irrevocable.  Partial prepayments shall be in a principal
amount of not less than $500,000  or an integral multiple of $100,000 in
excess thereof.  Upon receipt of any
notice of prepayment, the Administrative Agent shall promptly notify each
Lender of the contents thereof by telephone or telecopy and of such Lender’s
portion of the prepayment.

 

(b)                                 Permanent
Prepayments and Reductions.

 

(i)                           Terms
of Prepayments or Reductions. 
Optional permanent prepayments of principal of the Term Loans, and
permanent reductions of the Revolving Loan Commitment hereunder, may be made by
the Borrower, at any time and from time to time, following irrevocable written
notice to the Administrative Agent prior to 11:00 a.m. (New York time) on the
date three (3) Business Days prior thereto, without premium or penalty, on a
pro rata basis among the Lenders, provided that the Borrower shall reimburse
the Lenders and the other Credit Parties, on the earlier of demand or the
applicable Maturity Date, for any loss or out-of-pocket expense incurred by the
Lenders or the other Credit Parties in connection with such reduction as set
forth in Section 2.11 hereof; provided, however, that the
irrevocable written notice to the Administrative Agent with respect to any
voluntary prepayments of the Term B Loans made with the proceeds of Advances of
the Incremental Term C Loans on the Agreement Date may be made without regard
to the three (3) Business Days notice period set forth in this sentence.  Each notice of prepayment or reduction shall
be irrevocable.  Partial prepayments and
reductions shall be in a principal amount of not less than $500,000  or
an integral multiple of $100,000  in excess thereof.  Upon receipt of any notice of prepayment or
reduction, the Administrative Agent shall promptly notify each Lender of the
contents thereof by telephone or telecopy and of such Lender’s portion of the
prepayment or reduction, as applicable.

 

(ii)                        Application
of Payments or Reductions.

 

(A)                              In
the event that the Borrower shall make a prepayment of the Term Loans (other
than any prepayment of the Term B Loans made with the proceeds of Advances of
the Incremental Term C Loans on the Agreement 

 

45

 

Date), such prepayment
shall be applied to permanently reduce, on a pro rata basis, the Term B Loans
and the Incremental Term C Loans.  Each
such reduction allocated to the Term B Loans shall be applied to reduce, in the
inverse order of maturity, the remaining scheduled installments of principal
due under the Term B Loans as set forth in Section 2.7(b) hereof.  Each such reduction allocated to the
Incremental Term C Loans shall be applied to reduce, in the inverse order of
maturity, the remaining scheduled installments of principal due under the
Incremental Term C Loans as set forth in Section 2.7(c) hereof.  Any prepayment of the Term B Loans made with
the proceeds of Advances of the Incremental Term C Loans on the Agreement Date
shall be applied to permanently reduce the Term B Loans and shall be applied to
reduce, on a pro rata basis, the remaining scheduled installments of principal
due under the Term B Loans as set forth in Section 2.7(b) hereof.  Each prepayment hereunder shall also be made
together with accrued interest on the amount so prepaid.

 

(B)                                As
of the date of cancellation or reduction set forth in any notice thereof, the
Revolving Loan Commitment shall be permanently reduced to the amounts stated in
the Borrower’s notice for all purposes herein, and the Borrower shall pay to
the Administrative Agent, for the benefit of the Lenders, the amount necessary
to reduce the principal amount of the Revolving Loans then outstanding to not
more than the amount equal to the result of (I) the Available Revolving
Commitment as so reduced, less (II) the aggregate principal amount of Swing
Loans then outstanding, together with the accrued interest the amount so
prepaid and the commitment fee set forth in Section 2.4(a) hereof accrued
through the date of the reduction with respect to the amount reduced.

 

(C)                                In
connection with any such permanent repayment, the Borrower shall reimburse the
Administrative Agent and the Lenders, on demand, for any loss or out-of-pocket
expense actually incurred by any of them in connection with such repayment of
any Eurodollar Advances as set forth in Section 2.11 hereof.  Upon receipt of any notice of prepayment or
reduction, the Administrative Agent shall promptly notify each Lender of the
contents thereof by telephone or telecopy and of such Lender’s portion of the
prepayment or the reduction, as applicable.

 

Section 2.6 Mandatory
Commitment Reductions and Prepayments. 
In addition to the reductions provided for in Section 2.7 hereof,
the Borrower shall, if required pursuant to this Section 2.6, permanently
prepay the Loans as follows:

 

(a)                                  Issuance
of Equity.  If the Borrower shall
issue any stock or other equity interests for cash to any Person other than CVC
or CSC Holdings, the Borrower shall apply, on the date of its receipt thereof,
one hundred percent (100%) of the Net Cash Proceeds received by the Borrower in
connection with such issuance to prepay the Loans as set forth in
Section 2.6(d) hereof.  In the
event that any FUSE Company shall issue additional stock or equity interests,
and the Guaranty of the Obligations from such FUSE Company and the
Administrative Agent’s Lien on the 

 

46

 

property and
assets of such FUSE Company shall be released pursuant to Section 6.14
hereof, the Borrower shall make a prepayment of the Loans, promptly following
such issuance and as set forth in Section 2.6(d) hereof, in an amount
equal to fifty percent (50%) of the aggregate value of all consideration (cash
and non-cash) received by such FUSE Company in connection with such issuance.

 

(b)                                 Issuance
of Public Debt.  If the Borrower
shall conduct any issuance of Indebtedness For Money Borrowed (other than in
connection with any Authorized Debt Issuance, any obligations under Interest
Hedge Agreements or any Incremental Facility Indebtedness), such issuance shall
be only in exchange for cash and the Borrower shall apply, on the date of its
receipt thereof, one hundred percent (100%) of the Net Cash Proceeds received
by the Borrower in connection with such issuance to prepay the Loans as set
forth in Section 2.6(d) hereof.

 

(c)                                  Disposition
of Assets.  If (i) any Borrower
Party shall sell, transfer or otherwise dispose of any assets (including,
without limitation, any assets constituting capital stock, partnership
interests or other equity interests (other than any equity interests in the
FUSE Companies)) or (ii) RRH I or RRH II shall sell, transfer or otherwise
dispose of any assets constituting capital stock, partnership interests or
other equity interests in RRH, in each case for cash and except as any such
sale, transfer or other disposition shall be permitted or approved under
Section 8.5 hereof, the Borrower shall apply, on the date of its receipt
thereof, one hundred percent (100%) of the Net Cash Proceeds received by any
such Company in connection with such sale, transfer or other disposition to
prepay the Loans as set forth in Section 2.6(d) hereof.  If any Borrower Party shall sell, transfer
or otherwise dispose of any stock or other equity interests in any FUSE
Company, and the Guarantee of such FUSE Company and the Administrative Agent’s
Lien on the property and assets of such FUSE Company shall be released pursuant
to Section 6.14 hereof, the Borrower shall make a prepayment of the Loans,
promptly following such sale, transfer or other disposition and as set forth in
Section 2.6(d) hereof, in an amount equal to fifty percent (50%) of the
aggregate value of all consideration (cash and non-cash) received by such
Borrower Party in connection with such sale, transfer or other disposition.

 

(d)                                 Application
of Payments.  The amount of any
prepayment of the Loans required to be made pursuant to this Section 2.6
(other than any such prepayment required in the event of the issuance of
additional equity interests, or the sale, transfer or other disposition of any
equity interests, in any FUSE Company) shall be applied as follows:  (i) first, to permanently reduce, on a pro
rata basis, the outstanding principal amount of the Term B Loans and the
Incremental Term C Loans, in each case with the amount allocated to the Term B
Loans being applied to reduce, in the inverse order of maturity, the remaining
scheduled installments of principal due under the Term B Loans as set forth in
Section 2.7(b) hereof, and the amount allocated to the Incremental Term C
Loans being applied to reduce, in the inverse order of maturity, the remaining
scheduled installments of principal due under the Incremental Term C Loans as
set forth

 

47

 

in
Section 2.7(c) hereof, and (ii) thereafter, to prepay the outstanding
principal amount of the Revolving Loans, with a corresponding permanent
reduction in the amount of the Revolving Loan Commitment in the inverse order
of scheduled reductions.  The amount of
any prepayment of the Loans required to be made pursuant to this
Section 2.6 in the event of the issuance of additional equity interests,
or the sale, transfer or other disposition of any equity interests, in any FUSE
Company shall be applied, on a pro rata basis, to permanently reduce (A) the
outstanding principal amount of the Term B Loans in the inverse order of
maturity, (B) the outstanding principal amount of the Incremental Term C Loans
in the inverse order of maturity, and (C) the amount of the Revolving Loan
Commitment in the inverse order of scheduled reductions, with a corresponding
prepayment of the outstanding principal amount of the Revolving Loans then
outstanding.  Notwithstanding anything
to the contrary contained herein, (x) no prepayments of the Revolving Loans,
and corresponding reductions of the Revolving Loan Commitment, made pursuant to
this Section 2.6 in connection with any sale, transfer or other
disposition, or any issuance of equity interests, in each case related to the
FUSE Companies, shall cause the amount of the Revolving Loan Commitment to be
less than $140,000,000, and (y) if an Event of Default has occurred and is
continuing at the time of any prepayment required to be made pursuant to this
Section 2.6, the amount of such prepayment shall be applied to prepay, on
a pro rata basis, the Term B Loans, the Incremental Term C Loans and the
Revolving Loans, without regard to the maximum reduction amount in the
Revolving Loan Commitment described in the foregoing clause (x).  Accrued interest and fees on the principal
amount of the Loans being prepaid and the Commitments being reduced pursuant to
this Section 2.6 to the date of such prepayment or reduction shall be paid
by the Borrower concurrently with such reduction and prepayment.  In connection with any mandatory repayment
due under this Section 2.6, the Borrower shall reimburse the
Administrative Agent and the Lenders, on demand, for any loss or out-of-pocket
expense actually incurred by any of them in connection with such repayment of
any Eurodollar Advances as set forth in Section 2.11 hereof.  Notwithstanding the foregoing, the holders
of the Term B Loans and the holders of the Incremental Term C Loans each shall
have the right to decline any mandatory partial prepayment of the Term B Loans
or the Incremental Term C Loans, as applicable, in which case the amount of
such prepayment shall be applied to prepay the Revolving Loans, with a
corresponding permanent reduction in the Revolving Loan Commitment, in the
manner set forth above.

 

Section 2.7 Repayment.  The Borrower hereby promises to pay the
Obligations (including principal, interest, fees, costs, and expenses) in
Dollars in full to the Lenders as follows and as and when otherwise due and
payable under the terms of this Agreement and the other Loan Documents:

 

(a)                                  Revolving
Loan Commitment.  Commencing on
June 30, 2005, the Revolving Loan Commitment shall be reduced
automatically and permanently on the last Business Day of each quarter and on
the Initial Maturity Date (which 

 

48

 

reduction shall be
inclusive of any reduction pursuant to Section 2.5 hereof during such
quarter) as set forth below:  

 

	
  Quarters Ended

  	
   

  	
  Amount of
  Quarterly Reduction

  (which shall include any

  reductions made during such

  quarter pursuant

  to Section 2.5)

  	
   

  
	
  June 30,
  2005 through March 31, 2006

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2006 through March 31, 2007

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2007 through Initial Maturity Date

  	
   

  	
  $

  	
  27,500,000

  	
   

  

 

As of the date of each
reduction of the Revolving Loan Commitment as set forth above, the Borrower
shall pay to the Administrative Agent, for the benefit of the Lenders, the
amount necessary to reduce the principal amount of the Revolving Loans, plus
Swing Loans, plus L/C Obligations, then outstanding to not more than the amount
of the Revolving Loan Commitment as so reduced, together with accrued interest
on the amount so prepaid and the commitment fee set forth in
Section 2.4(a) hereof accrued through the date of the reduction with
respect to the amount reduced.  Any
unpaid principal and accrued interest of the Revolving Loans and the Swing
Loans and any other outstanding Obligations in respect of the Revolving Loan
Commitment shall be due and payable in full on the Initial Maturity Date.

 

(b)                                 Term
B Loans.  Commencing on
December 31, 2003, and at the end of each calendar quarter thereafter, the
principal balance of the Term B Loans then outstanding shall be repaid as set
forth below:  

 

	
  Quarters Ended

  	
   

  	
  Amount of
  Quarterly

  Repayment (which shall include

  any repayments made during

  such quarter pursuant

  to Section 2.5)

  	
   

  
	
  December 31,
  2003 through June 30, 2008

  	
   

  	
  $

  	
  437,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2008 through December 31, 2008

  	
   

  	
  $

  	
  55,416,666

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Final
  Maturity Date

  	
   

  	
  $

  	
  55,416,668

  	
   

  

 

49

 

Any unpaid principal and
accrued interest of the Term B Loans and any other outstanding Obligations
(other than any outstanding Obligations under any of the Incremental Facility
Commitments) shall be due and payable in full on the Final Maturity Date.

 

(c)                                  Incremental
Facility Loans.

 

(i)                           Incremental
Term C Loans.  Commencing on
December 31, 2003, and at the end of each calendar quarter thereafter, the
principal balance of the Incremental Term C Loans then outstanding shall be
repaid as set forth below:  

 

	
  Quarters Ended

  	
   

  	
  Amount of
  Quarterly

  Repayment (which shall include

  any repayments made during

  such quarter pursuant

  to Section 2.5)

  	
   

  
	
  December 31,
  2003 through June 30, 2008

  	
   

  	
  $

  	
  1,562,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2008 through December 31, 2008

  	
   

  	
  $

  	
  196,401,666

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Final
  Maturity Date

  	
   

  	
  $

  	
  202,071,668

  	
   

  

 

Any unpaid principal and
accrued interest of the Incremental Term C Loans and any other outstanding
Obligations (other than any outstanding Obligations under any of the other
Incremental Facility Commitments) shall be due and payable in full on the Final
Maturity Date.

 

(ii)                        Other
Incremental Facility Loans.  Any
unpaid principal and interest of the Incremental Facility Loans (other than any
Incremental Term C Loans) and any other outstanding Obligations under any of
the Incremental Facility Commitments (other than the Incremental Term C Loan
Commitment) shall be due and payable in full on the Incremental Facility
Maturity Date applicable thereto.

 

(d)                                 Overadvances.  In addition to the foregoing, if, at any
time, the amount of the Revolving Loans, plus Swing Loans, plus L/C
Obligations, then outstanding shall exceed the Revolving Loan Commitment, the
Borrower shall immediately make a repayment of principal in an amount equal to
such excess, which repayment shall be applied to the Revolving Loans and the
Swing Loans as set forth in Section 2.12 hereof.

 

(e)                                  Letter
of Credit Advances and Swing Loans. 
All Base Rate Advances made pursuant to draws under Letters of Credit
and all Swing Loans shall be 

 

50

 

deemed to be
Advances under the Revolving Loan Commitment and shall be due and payable on
the Initial Maturity Date.

 

Section 2.8 Swing Loans.

 

(a)                                  Swing
Loan Advances.

 

(i)                           Notices;
Disbursement.  Whenever the Borrower
desires an Advance of the Swing Loans hereunder it shall give irrevocable
notice to the Swing Loan Lender not later than 1:00 p.m. (New York time) on the
date of the requested Advance by telephone, followed immediately by a
confirmation of such request in writing in the form of Exhibit R hereto
(a “Swing Loan Request”). 
Subject to satisfaction of the conditions set forth herein, the Swing
Loan Lender shall initiate the transfer of funds representing such Advance to
the Borrower by 3:00 p.m. (New York time) on the Business Day specified by the
Borrower in the applicable Swing Loan Request.

 

(ii)                        Minimum
Amounts.  Each Advance of the Swing
Loans shall be in a minimum principal amount of $500,000 and integral multiples
of $250,000, in excess thereof.

 

(b)                                 Repayment
of Swing Loans.  Each Advance of the
Swing Loans shall be due and payable on the earliest of (i) seven (7) days from
the date of such Advance, (ii) the date of the next Advance of the Revolving
Loans, or (iii) the Initial Maturity Date; provided, however, the
Borrower may prepay any Swing Loan Advance prior to the date it is due upon
notice to the Swing Loan Lender not later than 1:00 p.m. (New York time) on the
date of prepayment of such Advance.  If
such notice is given by the Borrower, the Borrower shall make such prepayment
and the payment amount specified in such notice shall be due and payable on the
date specified therein, together with accrued interest to such date on the
amount prepaid.  If, and to the extent,
any Swing Loans shall be outstanding on the date of any Advance of the
Revolving Loans, such Swing Loans shall be repaid from the proceeds of such
Advance of the Revolving Loans prior to any distribution of such proceeds to
the Borrower.  If, and to the extent, an
Advance of the Revolving Loans is not requested prior to earlier of (A) the
Initial Maturity Date or (B) the last day of any such seven (7) day period from
the date of any Advance of the Swing Loans, the Borrower shall be deemed to
have requested a Base Rate Loan on the Business Day immediately preceding the
Initial Maturity Date or the last day of such seven (7) day period, as
applicable, in the amount of the Swing Loans then outstanding, the proceeds of
which shall be used to repay the Swing Loan Lender for such Swing Loans.  In addition, the Swing Loan Lender may, at
any time, in its sole discretion by written notice to the Borrower and the
Administrative Agent, require repayment of its Swing Loans by way of a
Revolving Loan, in which case the Borrower shall be deemed to have requested a
Base Rate Advance of the Revolving Loans in the amount of such Swing Loans; provided,
however, that any such demand shall be deemed to have been given one (1)
Business Day prior to the Initial Maturity Date and upon the occurrence of any
Event of Default described in Section 9.1(i) or 9.1(j) hereof and also 

 

51

 

upon acceleration
of the Obligations, whether on account of an Event of Default described in
Section 9.1(i) or 9.1(j) hereof or any other Event of Default, in
accordance with the provisions of Section 9.2 hereof following an Event of
Default (each such Revolving Loan made on account of any such deemed request
therefor as provided herein being hereinafter referred to as a “Mandatory
Borrowing”).  Each Lender hereby
irrevocably agrees to make its Revolving Commitment Percentage of such
Revolving Loans promptly upon any such request or deemed request on account of
each Mandatory Borrowing in the amount and in the manner specified in the
preceding sentence and on the same such date, notwithstanding (I) the amount of
Mandatory Borrowing may not comply with the minimum amount for advances of
Revolving Loans otherwise required hereunder, (II) whether any conditions
specified in Article 4 are then satisfied, (III) whether a Default or an
Event of Default then exists, (IV) failure for any such request or deemed
request for Revolving Loans to be made by the time otherwise required in
Section 2.2, (V) the date of such Mandatory Borrowing, or (VI) any reduction
in the Revolving Loan Commitment or termination of the Revolving Loan
Commitment relating thereto immediately prior to such Mandatory Borrowing or
contemporaneously therewith; provided, however, that no Lender
shall be required to make such Revolving Loans if, at the time that the Swing
Loan Lender agreed to fund any Swing Loan Request, the Swing Loan Lender had
knowledge of the existence of an Event of Default or such Mandatory Borrowing
would cause a Lender to exceed its Revolving Loan Commitment.  In the event that any Mandatory Borrowing
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of any Insolvency
Proceeding with respect to the Borrower or any other obligor hereunder), then
each Lender hereby agrees that it shall forthwith purchase (as of the date the
Mandatory Borrowing would otherwise have occurred, but adjusted for any
payments received from the Borrower on or after such date and prior to such
purchase) from the Swing Loan Lender such participations in the outstanding
Swing Loans as shall be necessary to cause each such Lender to share in such
Swing Loans ratably based upon its respective Revolving Commitment Percentage
(determined before giving effect to any termination of the Revolving Loan
Commitment pursuant to Section 9.2), provided that (A) all interest
payable on the Swing Loans shall be for the account of the Swing Loan Lender
until the date as of which the respective participation is purchased, and (B) at
the time any purchase of participations pursuant to this sentence is actually
made, the purchasing Lender shall be required to pay (to the extent not paid by
the Borrower) to the Swing Loan Lender interest on the principal amount of
participation purchased for each day from and including the day upon which the
Mandatory Borrowing would otherwise have occurred but excluding the date of
payment for such participation, at the rate equal to, if paid within two (2)
Business Days of the date of the Mandatory Borrowing, the Federal Funds Rate,
and thereafter at a rate equal to the Base Rate.

 

(c)                                  Interest
on Swing Loans.  Swing Loans shall
bear interest at the simple per annum interest rate equal to the sum of (x) the
Base Rate and (y) the Applicable Margin then in effect with respect to Base
Rate Advances of the Revolving Loans, computed on the basis of a year of
365/366 days when the Base Rate is

 

52

 

determined by
reference to the Prime Rate and on the basis of a year of 360 days when the
Base Rate is determined by reference to the Federal Funds Rate, in each case
for the actual number of days elapsed; provided, however, that
(i) from and after any failure to make any payment of principal or interest in
respect of any of the Loans hereunder when due (after giving effect to any
applicable grace period), whether at scheduled or accelerated maturity or on
account of any mandatory prepayment or (ii) while any Swing Loans in which the
Lenders have acquired participations pursuant to Section 2.8(b) hereof
remain outstanding, the principal of and, to the extent permitted by law,
interest on, Swing Loans shall bear interest, payable on demand, at the Default
Rate.  Interest on each Swing Loan shall
be payable in arrears on the date payment of such Swing Loan is due pursuant to
Section 2.8(b) hereof.

 

(d)                                 Reporting.  Unless the Swing Loan Lender is the
Administrative Agent, the Swing Loan Lender shall provide to the Administrative
Agent, on Friday of each week and on each date the Administrative Agent
notifies the Swing Loan Lender that the Borrower has made a Request for Advance
or the Administrative Agent otherwise requests the same, an accounting for the
outstanding Swing Loans in form reasonably satisfactory to the Administrative
Agent.

 

(e)                                  Termination
of Swing Loans; Designation of Swing Loan Lender.  Unless a Default or an Event of Default then exists, the Swing
Loan Lender shall give the Borrower and the Administrative Agent at least seven
(7) days prior written notice before exercising its discretion herein not to
make Swing Loans.  The Borrower must
give ten (10) days prior written notice to the Administrative Agent of any
change in designation of the Swing Loan Lender.   The replaced Swing Loan Lender shall continue to be a “Swing
Loan Lender” for purposes of repayment of any Swing Loans made prior to such
replacement and outstanding after such replacement.

 

Section 2.9 Notes; Loan
Accounts.

 

(a)                                  The
Loans shall be repayable in accordance with the terms and provisions set forth
herein.  Upon the request of any Lender,
(i) a Revolving Note shall be issued by the Borrower to the order of such
Lender in accordance with such Lender’s Revolving Commitment Percentage, (ii) a
Term B Note shall be issued by the Borrower to the order of such Lender in
accordance with such Lender’s Term B Commitment Percentage, and (iii) an
Incremental Term C Note shall be issued by the Borrower to the order of such
Lender in accordance with such Lender’s Incremental Term C Commitment Percentage.  The Swing Loans shall be evidenced by the
Swing Loan Note, which Swing Loan Note shall be issued by the Borrower and
payable to the order of the Swing Loan Lender in the amount of the Swing Loan
Committed Amount.  If applicable, an
Incremental Facility Loan Note shall be issued by the Borrower to the order of
any Incremental Facility Lender in accordance with its pro rata share of the
Incremental Facility Commitments (other than such Lender’s Incremental Term C
Loan

 

53

 

Commitment).  Any Notes issued by the Borrower shall be
duly executed and delivered by one or more Authorized Signatories of the
Borrower

 

(b)                                 Each
Lender may open and maintain on its books in the name of the Borrower a loan
account with respect to the Loans and interest thereon.  Each Lender which opens such loan account or
accounts shall debit the applicable loan account for the principal amount of
each Advance made by it and accrued interest thereon, and shall credit such
loan account for each payment on account of principal of or interest on the
Loans.  The records of each Lender with
respect to the loan accounts maintained by it shall be prima facie evidence of
the Loans and accrued interest thereon, but the failure to maintain such records
shall not impair the obligation of the Borrower to repay Indebtedness
hereunder.

 

(c)                                  Each
Advance of the Revolving Loans from the Lenders (other than the Swing Loan
Lender) under this Agreement shall be made pro rata by the Lenders on the basis
of their respective Revolving Commitment Percentages.

 

Section 2.10                                Manner
of Payment.

 

(a)                                  Each
payment (including any prepayment) by the Borrower on account of the principal
of or interest on the Loans, commitment fees, and any other amount owed to the
Lenders and the Administrative Agent under this Agreement or the other Loan
Documents shall be made not later than 2:00 p.m. (New York time) on the date
specified for payment under this Agreement or such other Loan Document to the
Administrative Agent to an account designated by the Administrative Agent for
the account of the Lenders or the Administrative Agent, as the case may be, in
lawful money of the United States of America in immediately available
funds.  Any payment received by the
Administrative Agent after 2:00 p.m. (New York time) shall be deemed received
on the next Business Day for purposes of interest and fee accrual.  In the case of a payment for the account of
a Lender, the Administrative Agent will promptly thereafter distribute the
amount so received in like funds to such Lender.  If the Administrative Agent shall not have received any payment
from the Borrower as and when due, the Administrative Agent will promptly
notify the Lenders accordingly.

 

(b)                                 If
any payment under this Agreement or otherwise in respect of the Loans shall be
specified to be made upon a day which is not a Business Day, it shall be made
on the next succeeding day which is a Business Day, and such extension of time
shall in such case be included in computing interest and fees, if any, in
connection with such payment.

 

(c)                                  Except
as otherwise provided below, any and all payments by the Borrower to the
Administrative Agent or any other Credit Party under this Agreement or
otherwise in respect of the Loans shall be made without set-off or counterclaim
or deduction whatsoever.

 

54

 

(i)                           Unless
otherwise required by Applicable Law, any and all payments by the Borrower to
the Administrative Agent and the other Credit Parties, or any of them, under
this Agreement or otherwise in respect of the Loans shall be made without any
deduction or withholding for present or future income, excise, stamp or
franchise taxes and other taxes, fees, duties, withholdings or other charges of
any nature whatsoever imposed by any taxing authority, excluding, however,
franchise, withholding, branch or other similar Taxes, duties, fees or charges
imposed on or measured by any Credit Party’s net income or receipts (such
non-excluded items being called “Taxes”).

 

(ii)                        If
the Borrower shall be required by Applicable Law to deduct any Taxes from or in
respect of any amounts payable hereunder or otherwise in respect of the Loans
to the Administrative Agent or any other Credit Party, (A) except as otherwise
provided in this Section, the sum payable shall be increased (“Additional
Amounts”) as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section 2.10(c)), the Administrative Agent or such other Credit Party, as
the case may be, receives an amount equal to the sum it would have received had
no deductions been made, (B) the Borrower shall make such deductions, and (C)
the Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with Applicable Law.  Moreover, if any Taxes (which for purposes of this sentence shall
include taxes and charges imposed on or measured by net income or receipts of
any Credit Party by any jurisdiction to the extent imposed on Additional
Amounts) are directly asserted against any Credit Party with respect to any
payment received by such Credit Party hereunder, such Credit Party may pay such
Taxes, and, except as otherwise provided in this Section, the Borrower will
promptly pay such additional amount (including any penalties, interest or
expenses) as is necessary in order that the net amount received and retained by
such Credit Party after the payment of such Taxes (including any Taxes on such
additional amount) shall equal the amount such Credit Party would have received
and retained had no such Taxes been asserted; provided, however,
such Credit Party shall give written notice to the Borrower, accompanied by, to
the extent provided by the relevant taxing authority, a calculation in
reasonable detail of the amount demanded and evidence of the Taxes imposed on
such Credit Party, after such Credit Party has actual knowledge of the
imposition of any Taxes.  Where notice
is not given to the Borrower within forty-five (45) days after the Credit Party
receives written notice of the assertion of Taxes and the Borrower does not
otherwise have notice of such assertion, the Borrower shall not be required to
pay penalties, additions to taxes, expenses, and interest accruing on such Taxes
from the date forty-five (45) days after the receipt by the Credit Party of
written notice of the assertion of such Taxes until the date that the Borrower
receives such notice.  The Borrower
shall furnish to such Credit Party within forty-five (45) days (or as soon
thereafter as available) after the date the payment of any Taxes is due
pursuant to Applicable Law true and correct copies of tax receipts evidencing
payment by the Borrower.  Except as
otherwise provided in this Section, if the Borrower fails to pay any Taxes that
it is required to pay pursuant to the terms of this

 

55

 

Agreement when due
to the appropriate taxing authority or fails to remit to any of the Credit
Parties the required receipts or other required documentary evidence, the
Borrower shall indemnify the Credit Parties for any incremental Taxes, interest
or penalties that may become payable by the Credit Parties primarily as a
result of any such failure.

 

(iii)                     Each
Lender that is not a United States person within the meaning of
Section 7701 of the Code (a “Foreign Lender”) shall deliver to the
Borrower and the Administrative Agent, no later than the date hereof (or if
such Foreign Lender becomes a party to this Agreement (whether by assignment or
otherwise) after the date hereof, the date upon which such Foreign Lender
becomes a party hereto), (A) two (2) complete, duly executed original IRS Forms
W-8ECI or IRS Forms W-8BEN, or any successors thereto, establishing that such
Foreign Lender is on the date of delivery thereof entitled to receive any and
all payments from the Borrower under this Agreement or otherwise in respect of
the Loans free from withholding of United States federal income tax or (B) in
the case of such Foreign Lender that is not legally entitled to deliver either
form listed in clause (b)(iii)(A), (I) a certificate of a duly authorized
officer of such Foreign Lender to the effect that such Foreign Lender is not
(x) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (y) a
“10 percent shareholder” of the Borrower within the meaning of
Section 881(c)(3)(B) of the Code or (z) a controlled foreign corporation
receiving interest from a related person within the meaning of
Section 881(c)(3)(C) of the Code (such certificate, an “Exemption
Certificate”) and (II) two (2) duly completed copies of Internal Revenue
Service Form W-8BEN or successor applicable form, certifying that such Foreign
Lender is entitled to an exemption from United States federal withholding tax
on payments of interest.  Each Foreign
Lender shall, from time to time, deliver updated or corrected IRS Forms W-8ECI,
IRS Forms W-8BEN or Exemption Certificates, or any successors thereto, to the
Borrower and the Administrative Agent to the extent and in the manner required
under United States federal tax law. 
The Borrower shall not be required to pay any Additional Amounts under
Section 2.10(c)(ii) hereof to a Foreign Lender if such Foreign Lender (I)
fails to comply with the requirements of this Section 2.10(c)(iii) hereof
or, (II) fails to qualify for a complete reduction or exemption of United
States federal tax withholding for any reason other than a change in the United
States federal tax law, or the official interpretation thereof, in each case,
after the delivery of IRS Forms W-8ECI, IRS Forms W-8BEN or an Exemption
Certificate, or any successors thereto, or (III) is treated as a “conduit
entity” within the meaning of U.S. Treasury Regulations Section 1.881-3 or
any successor provision.  Notwithstanding
the foregoing, if at the date of an assignment pursuant to which a Foreign
Lender becomes a party to this Agreement, the assignor was entitled to payments
under Section 2.10(c)(ii) hereof, then, to such extent, the assignee,
shall not be required to deliver IRS Forms W-8ECI, IRS Forms W-8BEN or an
Exemption Certificate, or any successors thereto, establishing a withholding
rate for such Foreign Lender that is less than the rate the assignor was
subject to, and the assignee shall be entitled to receive Additional Amounts to
such extent the assignor was so entitled.

 

56

 

(iv)                    Each
of the Credit Parties agrees that it will, to the extent reasonable and without
material cost or risk to it, (A) take all actions reasonably requested by the
Borrower to maintain all exemptions, if any, available to it from United States
federal withholding taxes (whether available by treaty, statute, or existing
administrative waiver) and (B) otherwise cooperate with the Borrower to minimize
any amounts payable by the Borrower under this Section 2.10(c), including
the contest of any asserted tax liability.

 

(v)                       Any
Credit Party that becomes aware that it is entitled to receive a refund
(whether by way of a direct payment or by offset) in respect of Additional
Amounts paid by the Borrower, which refund, would reasonably be considered
allocable to or resulting from such payment or indemnification made pursuant to
this Section 2.10, shall promptly notify the Borrower of the availability
of such refund and shall, within thirty (30) days after the receipt of a
request from the Borrower, apply for such refund with the Borrower being
responsible for any incremental costs associated with such refund request; provided,
however, that (A) the Borrower shall not be entitled to any damages as a
result of the failure of such Credit Party to so notify the Borrower of the
availability of such refund and (B) the Borrower shall not have the right to
examine the books or records of any Credit Party.  If any Credit Party receives any such refund (as described in the
preceding sentence), it shall promptly repay the amount of such refund
(together with any interest received thereon) to the Borrower; provided,
however, that the Borrower, upon the request of the applicable Credit
Party, shall repay the amount paid over to the Borrower in the event such
Credit Party is required to repay such refund to the applicable authority.

 

(vi)                    If
the Borrower is or becomes required to pay any Additional Amounts to a Credit Party
pursuant to this Section 2.10, the Borrower shall have the right, upon
notice to the Administrative Agent and such Credit Party to (A) prepay without
penalty, on a non-pro rata basis, all or any portion of a Loan held by such
Credit Party plus all interest and Additional Amounts owing to such Credit
Party as of the date of such prepayment, (B) require such Credit Party to use
reasonable efforts to designate a different lending office for funding or
booking its Loan under this Agreement or to assign its rights and obligations
under this Agreement to another of its offices, branches or affiliates, or (C)
require such Credit Party to effect an assignment of all of its rights and
obligations under this Agreement to another Credit Party designated by the Borrower
if, in the case of clause (B) or (C) such designation or assignment (x) would
eliminate or reduce amounts payable pursuant to this Section 2.10 in the
future and (y) would not cause the imposition on such Credit Party of any
additional costs or legal or regulatory burdens deemed by such Credit Party to
be material or otherwise disadvantageous to such Credit Party.

 

Section 2.11                                Reimbursement.  Whenever any Lender shall actually incur any
losses or out-of-pocket expenses in connection with (a) the failure by the
Borrower to convert, continue or borrow any Eurodollar Advance after having
given notice of its 

 

57

 

intention to convert, continue or borrow such Eurodollar Advance in
accordance with Section 2.2 hereof (whether by reason of the election of
the Borrower not to proceed or the non-fulfillment of any of the conditions set
forth in Article 4 hereof) other than a failure to borrow resulting from
an unavailability which occurs after notice from the Administrative Agent to
the Borrower pursuant to Section 11.1 or 11.2 hereof, (b) the prepayment
of any Eurodollar Advance in whole or in part (including a prepayment pursuant
to Sections 11.2 and 11.3(b) hereof), or (c) the failure by the Borrower to prepay
any Advance after notice of prepayment has been given by the Borrower to the
Administrative Agent in accordance with Section 2.5 hereof, the Borrower
agrees to pay to such Lender, upon the earlier of such Lender’s demand or the
applicable Maturity Date, an amount sufficient to compensate such Lender for
all such losses and out-of-pocket expenses. 
Such Lender’s good faith determination of the amount of such losses and
out-of-pocket expenses, absent manifest error, shall be binding and
conclusive.  Upon request of the
Borrower, any Lender seeking reimbursement under this Section 2.11 shall
provide a certificate setting forth the amount to be paid to it by the Borrower
hereunder and calculations therefor.

 

Section 2.12                                Application
of Payments.

 

(a)                                  Prior
to the Final Maturity Date or the acceleration of the Loans under
Section 9.2 hereof, and other than with respect to payments required to be
made pursuant to Section 2.6 hereof (which shall be applied as set forth
in Section 2.6), if some but less than all amounts due from the Borrower
are received by the Administrative Agent, the Administrative Agent will
distribute such amounts as follows: 
FIRST, pro rata among the Credit Parties based on the total amount of
such fees, costs and expenses, to the payment of any fees, costs and expenses
then due and payable hereunder or under any other Loan Document; SECOND, pro
rata among the Lenders based on the principal amount of the Loans outstanding
immediately prior to such payment, to any unpaid interest then due and payable
on the Loans; THIRD, pro rata among the Lenders based on the principal amount
of the Term Loans outstanding immediately prior to such payment, to the payment
of principal then due and payable on the Term Loans; FOURTH, pro rata among the
Lenders based on their respective Revolving Commitment Percentages outstanding
immediately prior to such payment, to the payment of principal then due and
payable on the Revolving Loans; and FIFTH, pro rata among the Credit Parties
based on the amount of such Obligations outstanding immediately prior to such
payment, to the payment of any other Obligations not otherwise referred to in
this Section 2.12(a) then due and payable.

 

(b)                                 Subsequent
to the Final Maturity Date or the acceleration of the Loans under
Section 9.2 hereof, payments made to any Credit Party, or otherwise
received by any Credit Party (from realization on Collateral or otherwise),
shall be distributed as follows:  FIRST,
to the costs and expenses, if any, incurred by the Credit Parties, or any of
them, to the extent permitted by Section 12.2 hereof, in the collection of
such amounts under this Agreement or any of the other Loan Documents,
including, 

 

58

 

without
limitation, any reasonable costs incurred in connection with the sale or
disposition of any Collateral for the Obligations; SECOND, pro rata among the
Credit Parties based on the total amount of fees then due and payable, to any
fees then due and payable hereunder or under any other Loan Document and to any
other fees then due and payable to the Lenders under this Agreement or any
other Loan Document; THIRD, pro rata among the Lenders based on the outstanding
principal amount of the Loans outstanding immediately prior to such payment, to
any unpaid interest which may have accrued on the Loans; FOURTH, pro rata among
the Lenders based on the principal amount of the Loans outstanding immediately
prior to such payment, to any unpaid principal of the loans; FIFTH, to any
other Obligations not otherwise referred to in this Section 2.12(b) until
all such Obligations are paid in full; SIXTH, pro rata among the Credit Parties
based on the amount of damages outstanding immediately prior to such payment,
to damages incurred by the Credit Parties, or any of them, by reason of any
breach of this Agreement or of any other Loan Documents; and SEVENTH, upon
satisfaction in full of all Obligations, to the Borrower or as otherwise
required by law.

 

(c)                                  If
any Lender shall obtain any payment on any date (whether involuntary or
otherwise) on account of the Loans (excluding any Swing Loans) made by it in
excess of its ratable share of the payments made by the Borrower to the Credit
Parties on such date (in the aggregate), such that, after giving effect
thereto, such Lender’s outstanding Loans (excluding any Swing Loans) are less
than such Lender’s ratable share of all the Loans then outstanding (in the
aggregate) in accordance with such Lender’s Commitment Percentage, such Lender
shall forthwith purchase from the other Lenders such participations in the
Loans made by such other Lenders as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them; provided, however,
that if all or any portion of such excess payment is thereafter recovered from
such purchasing Lender, such purchase from each Lender shall be rescinded and
such Lender shall repay to each purchasing Lender the purchase price to the
extent of such recovery.  The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.12(b) may, to the fullest extent permitted by
law, exercise all its rights of payment with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the amount
of such participation so long as the Obligations are not increased as a result
of such participation.  If the Swing
Loan Lender shall receive any payment on any date on account of its Swing Loans
in excess the amount to which it is entitled in accordance with
Section 2.8(a), the Swing Loan Lender shall remit the amount of such
excess to the other Lenders as the Administrative Agent may direct in
accordance with Section 2.8(a).

 

Section 2.13                                Capital
Adequacy.  In the event that any
Lender shall have determined that a Regulatory Change has the effect of
reducing the rate of return on such Lender’s capital as a consequence of its
obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender’s policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, ten (10) days after 

 

59

 

submission by such Lender to the Borrower (with a copy to the
Administrative Agent) of a written request therefor, together with a
certificate (which shall be conclusive absent manifest error), setting forth
the calculations evidencing such requested additional amount, and the law or regulation
with respect thereto and certifying that such request is consistent with such
Lender’s treatment of other similar customers having similar provisions
generally in their agreements with such Lender and that such request is being
made on the basis of a reasonable allocation of the costs resulting from such
law or regulation, the Borrower shall pay to such Lender such additional amount
or amounts as will compensate such Lender for such reduction.  Allocations shall not be deemed reasonable
unless made ratably, to the extent practicable, to all affected assets,
commitments, activities or other relevant aspects of such Lender’s business,
whether or not the Lender is entitled to compensation with respect
thereto.  Notwithstanding the foregoing,
the Borrower shall only be obligated to compensate such Lender for any amount
under this subsection arising or occurring during (a) in the case of each
such request for compensation, any time or period commencing not more than
ninety (90) days prior to the date on which such Lender submits such request
and (b) any other time or period during which, because of the unannounced
retroactive application of such law, regulation, interpretation, request or
directive, such Lender reasonably could not have known that the resulting
reduction in return might arise.  Each
Lender will notify the Borrower that it is entitled to compensation pursuant to
this subsection as promptly as practicable after it determines to request
such compensation; provided, however, that the failure to provide
such notice shall not restrict the ability of such Lender to be reimbursed
under this Section 2.13.

 

Section 2.14                                Incremental
Facility Loans.

 

(a)                                  Subject
to the terms and conditions of this Agreement, the Borrower may request
Incremental Facility Commitments on any Business Day; provided, however,
that the Borrower may not request Incremental Facility Commitments or an
Incremental Facility Loan during the continuance of a Default or Event of
Default, including, without limitation, any Default or Event of Default that
would result after giving effect to any Incremental Facility Loan; and provided
further, that the Borrower may request up to three (3) Incremental
Facility Commitments (each of which commitments may be from more than one
Lender) which may be no less than $35,000,000 and no more than $155,000,000  in the aggregate, in addition to the
outstanding principal amount of the Incremental Term C Loans.  The Incremental Facility Maturity Date
applicable to any of the Incremental Facility Loans shall be no earlier than
the Final Maturity Date.  In requesting
Incremental Facility Commitments, the Borrower shall offer each of the Lenders
an opportunity to provide an Incremental Facility Commitment; provided
that none of the Lenders shall be required to issue an Incremental Facility
Commitment and the decision of any Lender to issue or not issue an Incremental
Facility Commitment to the Borrower shall be at such Lender’s sole discretion
after being offered such right of first refusal (and the failure to respond to
any such offer by the requested deadline shall be deemed a refusal).  Persons not then Lenders may be included 

 

60

 

as Lenders having
Incremental Facility Commitments with the written approval of the Borrower and
the Administrative Agent.  The
Incremental Facility Commitments (i) may be in the form of a revolving or a
term credit facility and may be structured as an institutional tranche, (ii)
must not (A) have scheduled amortization providing for principal repayments or
commitment reductions earlier than, or in an amount on a percentage basis
larger than, those dates or amounts set forth in the amortization
schedule for the Term B Loans set forth herein, or (B) be secured by more
or different collateral than the Loans hereunder, and (iii) must be governed by
this Agreement and the other Loan Documents and be subject to terms and
conditions not more restrictive than those set forth herein and therein for the
Loans.

 

(b)                                 Prior
to the effectiveness of any Incremental Facility Commitment, the Borrower shall
(i) deliver to the Administrative Agent and the Lenders a notice (each a “Notice
of Incremental Facility Commitment”), in form and substance satisfactory to
the Administrative Agent, setting forth terms and provisions with respect to
interest rates and scheduled amortization with respect to the proposed
Incremental Facility Loan and (ii) provide revised projections to the
Administrative Agent and the Lenders, which shall be in form and substance reasonably
satisfactory to the Administrative Agent and which shall demonstrate the
Borrower’s ability to timely repay such Incremental Facility Commitment and any
Incremental Facility Loans thereunder and to comply with the terms and
conditions of this Agreement and the other Loan Documents.

 

(c)                                  No
Incremental Facility Commitment shall by itself result in any reduction of the
Revolving Loan Commitment or the Term B Loan Commitment or of the Commitment
Percentages with respect thereto of such Lender issuing such Incremental
Facility Commitment; provided, however, that the proceeds of the
Incremental Term C Loans in excess of $400,000,000 shall be used to permanently
prepay the Term B Loans outstanding on the Agreement Date.

 

(d)                                 Advances
of the Incremental Facility Loans (i) shall bear interest at the Base Rate or
the Eurodollar Rate or such other reasonable rate agreed to by the Lenders
making such Incremental Facility Loans; (ii) subject to Section 2.14(a)
hereof, shall be repaid as agreed to by the Borrower and the Lenders making
such Incremental Facility Loans; (iii) shall for all purposes be Obligations
hereunder and under the Loan Documents; (iv) shall be represented by promissory
notes which set forth terms and provisions with respect to interest rates and
scheduled amortization with respect to such Incremental Facility Loans and are
in form and substance acceptable to the Administrative Agent and the Borrower
(each, an “Incremental Facility Note”), and (v) shall rank pari passu
with the Loans for purposes of Sections 2.12 and 9.2 hereof (unless the
applicable Incremental Facility Lender shall otherwise agree in writing to have
its Incremental Facility Loans be junior to the Loans).  Notwithstanding anything to the contrary
contained in the foregoing sentence, the Incremental Term C Loans shall be 

 

61

 

subject to all of
the terms and conditions applicable to the Incremental Term C Loans set forth
in this Agreement and the other Loan Documents.

 

(e)                                  Incremental
Facility Loans shall be requested by the Borrower pursuant to a request (which
shall be substantially in the form of a Request for Advance) delivered in the
same manner as a Request for Advance, but shall be funded pro rata only by
those Lenders that hold the applicable Incremental Facility Commitments.

 

(f)                                    In
the event that the interest rate applicable to any of the Incremental Facility
Loans (including, without limitation, any original issue discount in respect of
such Incremental Facility Loans) shall exceed the interest rate applicable to
the Incremental Term C Loans by more than twenty-five (25) basis points, the
Applicable Margin for the Incremental Term C Loans shall automatically be
increased such that the interest rate applicable to the Incremental Term C
Loans is twenty-five (25) basis points less than the interest rate applicable
to such other Incremental Facility Loans without any action or consent of the
Borrower, any Arranger or any Lender.

 

Section 2.15                                Letters
of Credit

 

(a)                                  Upon
receipt by the Administrative Agent of at least three (3) Business Days written
notice from the Borrower in the form of a Request for Issuance of Letter of
Credit, the Administrative Agent shall promptly forward such notice to the
Arrangers, the Issuing Bank or, if requested by the Borrower, to another Lender
agreeing to act as an Issuing Bank (and if such Lender shall accept and
countersign such Request for Issuance of Letter of Credit, such Lender shall
become the Issuing Bank with respect to such Letter of Credit), and the
applicable Issuing Bank will issue a Letter of Credit in the amount requested
subject to the terms and conditions of this Agreement and further subject to
the following: (i)  after giving effect
to the requested issuance, the aggregate face amount of all Letters of Credit
outstanding hereunder would not exceed the Letter of Credit Committed Amount,
and (ii) after giving effect to the requested issuance, the aggregate amount of
all L/C Obligations then outstanding, plus the aggregate amount of Swing Loans
then outstanding, plus the aggregate amount of all Revolving Loans then
outstanding shall not exceed the Revolving Loan Commitment.  No Letter of Credit shall have a maturity
extending beyond the earlier of (x) a term of one (1) year from the date of
issuance or (y) the Initial Maturity Date. 
Subject to the maturity limitations provided herein and so long as no
Default or Event of Default then exists or would be caused thereby, Letters of
Credit shall be renewable annually upon the request of the Borrower and with
the consent of the applicable Issuing Bank, which consent shall not be
unreasonably withheld but shall be subject to compliance with customary letter
of credit practices at the times of any proposed renewal.  Each Request for Issuance of Letter of
Credit from the Borrower shall specify in reasonable detail the documents which
must be presented to draw under such Letter of Credit, which specification
shall include all documents which the applicable Issuing Bank may reasonably
require.

 

62

 

(b)                                 If
a Letter of Credit provides that it is automatically renewable unless notice is
given by the Issuing Bank with respect thereto that it will not be renewed,
such Issuing Bank and the Borrower shall give notice of nonrenewal to the
Administrative Agent at least ten (10) Business Days prior to the last date on
which a notice of non-renewal may be given to the beneficiary of such Letter of
Credit.  The Administrative Agent shall
promptly notify the Lenders and, unless so directed by the Majority Lenders at
least three (3) Business Days prior to the last date on which a notice of
non-renewal may be given to the beneficiary of such Letter of Credit, the
Issuing Bank with respect to such Letter of Credit shall not be bound to give
notice of non-renewal to the beneficiary of such Letter of Credit.

 

(c)                                  Provided
that no Default or Event of Default then exists or would be caused thereby,
each Lender irrevocably authorizes each Issuing Bank to issue, reconfirm, reissue
and extend each Letter of Credit issued by such Issuing Bank in accordance with
the terms of this Agreement.  Each
Issuing Bank hereby sells, and each other Lender that has issued a Revolving
Loan Commitment hereby purchases, on a continuing basis, a participation and an
undivided interest in (A) the obligations of such Issuing Bank to honor any
draws under the Letters of Credit issued pursuant to this Agreement, and (B)
the Indebtedness of the Borrower to such Issuing Bank under this Agreement in
respect of Letters of Credit issued by it, such participation being in the
amount of such Lender’s pro rata share of such obligations and Indebtedness
based on such Lender’s Revolving Commitment Percentage, in each case without
further action by any party.

 

(d)                                 Upon
receipt of a draw certificate from the beneficiary of a Letter of Credit, the
applicable Issuing Bank shall promptly notify the Administrative Agent, which
shall in turn notify the Borrower, the Arrangers and each Lender that has
issued a Revolving Loan Commitment, by telephone or telecopy, of the amount of
the requested draw and, in the case of each such Lender, such Lender’s portion
of such draw amount as calculated in accordance with its Revolving Commitment
Percentage.

 

(e)                                  The
Borrower hereby irrevocably requests, and the Lenders that have issued
Revolving Loan Commitments hereby severally agree to make, a Base Rate Advance
to the Borrower (notwithstanding the minimum amount requirements otherwise
applicable to Base Rate Advances) on each day on which a draw is made under any
Letter of Credit and in the amount of such draw, and each such Lender shall
fund such Lender’s share of such Base Rate Advance by payment to the
Administrative Agent in accordance with Section 2.2(e) hereof and its Revolving
Commitment Percentage, without reduction for any set-off counterclaim of any
nature whatsoever.  The obligation of
each such Lender to make payments to the Administrative Agent, for the account
of each Issuing Bank, in accordance with this Section 2.15 shall be
absolute and unconditional, and no such Lender shall be relieved of its
obligations to make such payments by reason of non-compliance by any other
Person with the terms of any Letter of Credit or for any other reason other
than the gross negligence or willful misconduct of 

 

63

 

the Administrative
Agent or the applicable Issuing Bank. 
The Administrative Agent shall promptly remit to the applicable Issuing
Bank the amounts so received from the applicable Lenders.

 

(f)                                    The
Borrower agrees that any action taken or omitted to be taken by any Issuing
Bank in connection with any Letter of Credit issued by it, except for such
actions or omissions as shall constitute gross negligence or willful misconduct
on the part of such Issuing Bank or such Issuing Bank’s willful failure to pay
under any such Letter of Credit after presentation to it of documents complying
with the terms of such Letter of Credit, shall be binding on the Borrower as
between the Borrower and such Issuing Bank, and shall not result in any
liability of the Issuing Bank to the Borrower. 
The obligation of the Borrower to reimburse the Lenders for Advances
made to reimburse any Issuing Bank for draws under the Letters of Credit issued
by it shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances
whatsoever, including, without limitation, the following circumstances:

 

(i)                           Any
lack of validity or enforceability of any Loan Document;

 

(ii)                        Any
amendment or waiver of or consent to any departure from any or all of the Loan
Documents;

 

(iii)                     Any
improper use which may be made of any Letter of Credit or any improper acts or
omissions of any beneficiary or transferee of any Letter of Credit in
connection therewith;

 

(iv)                    The
existence of any claim, set-off, defense or any right which the Borrower may
have at any time against any beneficiary or any transferee of any Letter of
Credit (or Persons for whom any such beneficiary or any such transferee may be
acting) or any Lender (other than the defense of payment to such Lender in
accordance with the terms of this Agreement) or any other Person, whether in
connection with any Letter of Credit, any transaction contemplated by any
Letter of Credit, this Agreement, any other Loan Document, or any unrelated
transaction;

 

(v)                       Any
statement or any other documents presented under any Letter of Credit proving
to be insufficient, forged, fraudulent or invalid in any respect or any statement
therein being untrue or inaccurate in any respect whatsoever, provided that
such payment shall not have constituted gross negligence of willful misconduct
of the applicable Issuing Bank;

 

(vi)                    The
insolvency of any Person issuing any documents in connection with any Letter of
Credit;

 

(vii)                 Any
breach of any agreement between the Borrower and any beneficiary or transferee
of any Letter of Credit;

 

64

 

(viii)              Any
irregularity in the transaction with respect to which any Letter of Credit is
issued, including any fraud by the beneficiary or any transferee of such Letter
of Credit;

 

(ix)                      Any
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, wireless or otherwise, whether or not they
are in code;

 

(x)                         Any
act, error, neglect or default, omission, insolvency or failure of business of
any of the correspondents of the applicable Issuing Bank, provided that the
same shall not have constituted the gross negligence or willful misconduct of
such Issuing Bank;

 

(xi)                      Any
other circumstances arising from causes beyond the control of the applicable
Issuing Bank;

 

(xii)                   Payment
by the applicable Issuing Bank under any Letter of Credit against presentation
of a sight draft or a certificate which does not comply with the terms of such
Letter of Credit, provided that such payment shall not have constituted gross
negligence or willful misconduct of the Issuing Bank; and

 

(xiii)                Any
other circumstance or happening whatsoever, whether or not similar to any of
the foregoing, provided that such other circumstances or happenings shall not
have been the result of gross negligence or wilful misconduct of the applicable
Issuing Bank or any Lender.

 

(g)                                 If,
after the Agreement Date, any change in Applicable Law, any change in the
interpretation or administration thereof, or any change in compliance with
Applicable Law by any Issuing Bank or any other Lender as a result of any
request or directive of any governmental authority, central bank or comparable
agency (whether or not having the force of law) shall (i) impose, modify or
deem applicable any reserve (including, without limitation, any imposed by the
Board of Governors of the Federal Reserve System), special deposit, capital
adequacy, assessment or other requirements or conditions against letters of
credit issued by any Issuing Bank or against participations by any other Lender
in the Letters of Credit or (ii) impose on any Issuing Bank or any other
Lender any other condition regarding any Letter of Credit or any participation
therein, and the result of any of the foregoing in the reasonable determination
of such Issuing Bank or such Lender, as the case may be, is to increase the
cost to such Issuing Bank or such Lender of issuing or maintaining any Letter
of Credit or purchasing or maintaining any participation therein, as the case
may be, by an amount (which amount shall be reasonably determined) deemed by
such Issuing Bank or such Lender to be material, and the designation of a
different lending office will not avoid the

 

65

 

need for (or
reduce the amount of) additional compensation, then, on the earlier of ten (10)
days following the date of demand (which demand shall be made not later than
six (6) months following such Issuing Bank’s or such Lender’s determination of
a need for additional compensation) by such Issuing Bank or such Lender or the
Initial Maturity Date, the Borrower shall promptly pay such Issuing Bank or such
Lender, as the case may be, such additional amount or amounts as such Issuing
Bank or such Lender, as the case may be, determines will compensate it for such
increased costs.  Within sixty (60) days
of such written demand by such Issuing Bank or such Lender, the Borrower may,
in its discretion, provide a replacement bank or banks for such Issuing Bank or
such Lender, which replacement bank or banks will be subject to the approval of
the Arrangers and the Majority Lenders (which approval, in each case, will not
be unreasonably withheld), and shall take all necessary actions to transfer the
rights, duties and obligations of such Issuing Bank or such Lender to such
replacement bank or banks within such 60-day period.  A certificate of such Lender setting forth the amount, and in
reasonable detail the basis for such Issuing Bank’s or such Lender’s
determination of such amount, to be paid to such Issuing Bank or such Lender by
the Borrower as a result of any event referred to in this paragraph shall,
absent manifest error, be conclusive. 
Such certificate shall be delivered to the Borrower with each written
demand for payment referenced above. 
Each Issuing Bank and each Lender further agree that they shall use
their best efforts to give the Borrower thirty (30) days prior notice, and in
any event shall give prompt notice, of any event referred to in this paragraph
which may have the effect of materially increasing the cost to such Issuing
Bank or such Lender of issuing or maintaining the Letter of Credit or purchasing
or maintaining any participation therein.

 

(h)                                 Each
Lender shall be responsible for its pro rata share (based on such Lender’s
Revolving Commitment Percentage) of any and all reasonable out-of-pocket costs,
expenses (including reasonable legal fees) and disbursements which may be
incurred or made by any Issuing Bank in connection with the collection of any
amounts due under, the administrative of, or the presentation or enforcement of
any rights conferred by any Letter of Credit issued by such Issuing Bank, the
Borrower’s or any Guarantor’s obligations to reimburse or otherwise.  In the event the Borrower shall fail to pay
such expenses of any Issuing Bank within thirty (30) days of demand for payment
by such Issuing Bank, provided that such Issuing Bank has, during such 30-day
period, made a diligent collection effort with respect to such expenses, and
provided that such costs will not result from the gross negligence or wilful
misconduct of such Issuing Bank, each Lender shall thereupon pay to such Issuing
Bank its pro rata share (based on such Lender’s Revolving Commitment
Percentage) of such expenses within ten (10) days from the date of such Issuing
Bank’s notice to the Lenders of the Borrower’s failure to pay; provided,
however, that if the Borrower or any Guarantor shall thereafter pay such
expense, such Issuing Bank will repay to each Lender the amounts received from
such Lender hereunder.

 

66

 

ARTICLE 3 - Guarantee

 

Section 3.1 Guarantee.  Each of the Guarantors, jointly and
severally, hereby unconditionally guarantees to the Credit Parties and their
respective permitted successors and assigns and the subsequent holders of the
Obligations (including, without limitation, any interest on the Loans accruing
after the filing of a petition initiating any Insolvency Proceeding, whether or
not such interest accrues or is recoverable against the Borrower after the
filing of such petition for purposes of the Bankruptcy Code or is an allowed
claim in such proceeding), irrespective of the validity and enforceability of
this Agreement or the other Loan Documents or the Obligations of any of the
Borrower Parties hereunder or thereunder, the value or sufficiency of any
Collateral or any other circumstance that might otherwise affect the liability
of a guarantor, that:  (a) the principal
of and interest on the Loans and all other Obligations under this Agreement and
the other Loan Documents shall be promptly paid in full when due, whether at
stated maturity, by acceleration or otherwise, in accordance with the terms
hereof and thereof; and (b) in case of any extension of time of payment or
renewal of any of the Loans or any other of such Obligations, the same shall be
promptly paid in full when due in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.  The foregoing guaranty is a guaranty of
payment and not of collection.  Failing
payment when due of any amount so guaranteed for whatever reason, the Guarantors
will be obligated, jointly and severally, to pay the same immediately.

 

Section 3.2 Waivers and
Releases.  Each of the Guarantors
hereby waives notice of, and consents to, any extension of time of payment,
renewals, releases of Collateral, delays in obtaining or realizing upon or
failures to obtain, perfect, or maintain perfection of, or realize upon
Collateral or other indulgence from time to time granted by any of the Credit
Parties in respect of this Agreement or any other Loan Document.  Each of the Guarantors hereby releases the
Borrower from all, and agrees not to assert or enforce (whether by or in a
legal or equitable proceeding or otherwise), any “claims” (as defined in 11
U.S.C. § 101(4)), whether arising under Applicable Law or otherwise, to which
such Guarantors are or would be entitled by virtue of their obligations
hereunder, any payment made pursuant hereto or the exercise by the Credit
Parties of their rights with respect to any Collateral, including any such
claims to which such Guarantors may be entitled as a result of any right of
subrogation, exoneration or reimbursement. 
To the extent not released by such Guarantors under this Article 3,
each of the Guarantors agrees that it shall not be entitled to any right of
subrogation, exoneration, reimbursement or contribution in respect of any
Obligations guaranteed hereby.  With
respect to this Agreement and the other Loan Documents, each of the Guarantors
hereby waives presentment, protest, demand of payment, notice of dishonor and
all other notices and demands whatsoever. 
Each of the Guarantors further agrees that, as between such Guarantor,
on the one hand, and the Credit Parties, on the other hand, (a) the maturity of
the Obligations guaranteed hereby may be accelerated as provided in Section 9.2
hereof for the purposes of this Guarantee, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (b) in the event of any declaration of acceleration of
such Obligations as provided in Section 9.2 hereof, such Obligations
(whether or not due and payable) shall forthwith

 

67

 

become due and payable by each of the Guarantors for purposes of this
guarantee.  The obligations of the
Guarantors under this Article 3 shall be automatically reinstated if and
to the extent that for any reason any payment by or on behalf of the Borrower
is rescinded or must otherwise be restored by any holder of any of the
Obligations guaranteed hereunder, whether as a result of any Insolvency
Proceeding or otherwise, and each Guarantor agrees that it will, jointly and
severally, indemnify the Credit Parties on demand for reasonable costs and
expenses (including, without limitation, reasonable fees and expenses of
counsel) incurred by the Credit Parties in connection with such rescission or
restoration.  Each Guarantor further
agrees with the Borrower for the benefit of each of its creditors (including,
without limitation, the Credit Parties) that any payment referred to in this
Article 3 by a Guarantor shall constitute a contribution of capital by
such Guarantor to the Borrower (or an investment in the equity capital of the
Borrower by such Guarantor).

 

Section 3.3 Miscellaneous.

 

(a)                                  Upon
the bankruptcy or winding up or other distribution of assets of the Borrower or
any Material Subsidiary of the Borrower or of any surety or guarantor of any of
the Obligations of the Borrower to the Credit Parties, the rights of the Credit
Parties against the Guarantors shall not be affected or impaired by the
omission of any Credit Party to prove its claim, or to prove its full claim,
and the Administrative Agent may prove such claims as it sees fit and may
refrain from proving any claim and in its discretion may value as it sees fit
or refrain from valuing any security held by it without in any way releasing,
reducing or otherwise affecting the liability to the Credit Parties of any
Guarantor.

 

(b)                                 Each
of the Guarantors absolutely, unconditionally and irrevocably waives any and
all right to assert any defense, set-off, counterclaim or cross-claim of any
nature whatsoever with respect to this Article 3 or the obligations of the
Guarantors hereunder or the obligations of any other Person or party
(including, without limitation, the Borrower) relating to this Article 3
or the obligations of any other guarantor with respect to the Obligations in
any action or proceeding brought by any Credit Party to collect the Obligations
or any portion thereof, or to enforce the obligations of the Guarantors under
this Article 3.

 

(c)                                  If
a claim is ever made upon any of the Credit Parties for the repayment or
recovery of any amount or amounts received by such Person in payment of any of
the Obligations and such Person repays all or part of such amount by reason of
(i) any judgment, decree or order of any court or administrative body having
jurisdiction over such Person or any of its property, or (ii) any settlement or
compromise of any such claim effected by such Person with any such claimant,
including the Borrower, then in such event the Guarantors agree that any such
judgment, decree, order, settlement or compromise shall be binding upon the
Guarantors, notwithstanding any revocation hereof or the cancellation of any
promissory note or other instrument evidencing any of the

 

68

 

Obligations, and
the Guarantors shall be and remain obligated to such Person hereunder for the
amount so repaid or recovered to the same extent as if such amount had never
originally been received by such Person.

 

(d)                                 The
Guarantors expressly represent and acknowledge that any financial
accommodations by the Credit Parties, or any of them, to the Borrower,
including, without limitation, the extension of the Loans, are and will be of
direct interest, benefit and advantage to the Guarantors.

 

(e)                                  The
Guarantors hereby agree among themselves that if any Guarantor shall become an
Excess Funding Guarantor by reason of the payment by such Guarantor of any
Obligations, each other Guarantor shall, on demand of such Excess Funding
Guarantor (but subject to the next sentence), pay to such Excess Funding
Guarantor an amount equal to such Guarantor’s Pro Rata Share (as determined,
for this purpose, without reference to the properties, debts and liabilities of
such Excess Funding Guarantor) of the Excess Payment in respect of such
Obligations.  The payment obligation of
a Guarantor to any Excess Funding Guarantor under this Section 3.3(e)
shall be subordinate and subject in right of payment to the prior payment in
full of the obligations of such Guarantor under the other provisions of this
Article 3, and such Excess Funding Guarantor shall not exercise any right
or remedy with respect to such excess until payment and satisfaction in full of
all Obligations.  For purposes of this
Section 3.3(e), (i) “Excess Funding Guarantor” shall mean, in
respect of any Obligations, a Guarantor that has paid an amount in excess of
its Pro Rata Share of such Obligations, (ii) “Excess Payment” shall
mean, in respect of any Obligations, the amount paid by an Excess Funding
Guarantor in excess of its Pro Rata Share of such Obligations, and (iii) “Pro
Rata Share” shall mean, for any Guarantor, the ratio (expressed as a
percentage) of (A) the amount by which the aggregate present fair saleable
value of all properties of such Guarantor (excluding any shares of stock of any
other Guarantor) exceeds the amount of all the debts and liabilities of such
Guarantor (including contingent, subordinated, unmatured and unliquidated
liabilities, but excluding the obligations of such Guarantor hereunder and any
obligations of any other Guarantor that have been guaranteed by such Guarantor)
to (B) the amount by which the aggregate fair saleable value of all properties
of all of the Borrower Parties exceeds the amount of all the debts and
liabilities (including contingent, subordinated, unmatured and unliquidated
liabilities, but excluding the obligations of the Borrower Parties hereunder)
of all of the Borrower Parties, all as of the Agreement Date.  If any Subsidiary becomes a Guarantor
hereunder subsequent to the Agreement Date, then for purposes of this
Section 3.3(e) such subsequent Guarantor shall be deemed to have been a
Guarantor as of the Agreement Date and the aggregate present fair saleable
value of the properties, and the amount of the debts and liabilities, of such
subsequent Guarantor as of the Agreement Date shall be deemed to be equal to
such value and amount on the date such subsequent Guarantor becomes a Guarantor
hereunder.

 

69

 

(f)                                    It
is the intention of each Guarantor and the Credit Parties that each Guarantor’s
obligations under this Article 3 shall be, but not in excess of, the
Maximum Guaranteed Amount (as herein defined). 
The “Maximum Guaranteed Amount” with respect to any Guarantor, shall
mean the maximum amount which could be paid by such Guarantor without rendering
the Guaranty contained in this Article 3 void or voidable as would
otherwise be held or determined by a court of competent jurisdiction in any
insolvency proceeding involving any state or any federal bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other similar
laws relating to the insolvency of debtors.

 

(g)                                 Pursuant
to Section 6.14 hereof, any new Subsidiary of the Borrower is required to
enter into this Agreement for purposes of joining in this Guarantee by
executing and delivering in favor of the Credit Parties a Guarantee Supplement.  Upon the execution and delivery of a
Guarantee Supplement by such new Subsidiary, such Subsidiary shall become a
Guarantor hereunder with the same force and effect as if originally named as a
Guarantor herein.  The execution and
delivery of any instrument adding an additional Guarantor hereunder shall not
require the consent of any party of this Agreement.  The rights and obligations of each Guarantor hereunder shall
remain in full force and effect notwithstanding the addition of any new
Guarantor hereunder.

 

ARTICLE 4 - Conditions Precedent

 

Section 4.1 Conditions
Precedent to Closing.  The
obligation of each of the Lenders to undertake its respective Commitments and
to make the initial Advance of the Loans hereunder is subject to the prior
fulfillment of each of the following conditions:

 

(a)                                  The
Administrative Agent shall have received each of the following, in form and
substance reasonably satisfactory to the Arrangers and their counsel and to the
Majority Lenders:

 

(i)                           this
duly executed Agreement;

 

(ii)                        the
duly executed Borrower Security Agreement, together with evidence of the filing
of appropriate UCC-1 financing statements forms;

 

(iii)                     the
duly executed Borrower’s Pledge Agreement, together with appropriate original
securities certificates and undated securities powers with respect thereto
executed in blank and evidence of the filing of appropriate UCC-1 financing
statement forms;

 

(iv)                    the
duly executed Partnership Pledge Agreement, together with evidence of the
filing of appropriate UCC-1 financing statement forms;

 

70

 

(v)                       a
loan certificate of the Borrower, including a certificate of incumbency with
respect to the signature of each Authorized Signatory of the Borrower, which
loan certificate shall be in substantially the form of Exhibit S
attached hereto, together with appropriate attachments which shall include,
without limitation, the following items (or a certification that true, complete
and correct copies of such items were previously delivered to the Administrative
Agent in connection with the Original Closing Date and that such items have not
been modified or amended since the Original Closing Date):  (A) a true, complete and correct copy of the
articles of organization of the Borrower, certified by the Secretary of State
of Delaware, (B) a true, complete and correct copy of the limited liability
company agreement, if any, of the Borrower, (C) a copy of the resolutions of
the board of directors, or other appropriate entity, of the Borrower,
authorizing the Borrower with respect to the borrowing under the Incremental
Term C Loan Commitment hereunder and the execution, delivery and performance by
the Borrower of this Agreement and the other Loan Documents to which it is a
party, (D) certificates of existence for the Borrower issued by the Secretary
of State or similar state official for the State of Delaware and for each state
in which the Borrower is, or is required to be, qualified to do business, and
(E) a true, complete and correct copy of any agreement in effect with respect
to the voting rights, ownership interests or management of the Borrower;

 

(vi)                    the
duly executed CSC Holdings Pledge Agreement, together with evidence of the
filing of appropriate UCC-1 financing statement forms;

 

(vii)                 a
loan certificate of CSC Holdings, including a certificate of incumbency with
respect to the signature of each Authorized Signatory of CSC Holdings, which
loan certificate shall be in substantially the form of Exhibit T
attached hereto, together with appropriate attachments which shall include,
without limitation, the following items (or a certification that true, complete
and correct copies of such items were previously delivered to the
Administrative Agent in connection with the Original Closing Date and that such
items have not been modified or amended since the Original Closing Date):  (A) a true, complete and correct copy of the
articles of incorporation of CSC Holdings, certified by the Secretary of State
of Delaware, (B) a true, complete and correct copy of the bylaws of CSC
Holdings, (C) a copy of the resolutions of the board of directors of CSC
Holdings, authorizing CSC Holdings with respect to the execution, delivery and
performance by CSC Holdings of the Loan Documents to which it is a party, and
(D) certificates of existence for CSC Holdings issued by the Secretary of State
or similar state official for the State of Delaware and for each state in which
CSC Holdings is, or is required to be, qualified to do business;

 

(viii)              the
duly executed Subsidiary Pledge Agreement from each Guarantor which has one or
more Subsidiaries, together with appropriate original securities certificates
and undated securities powers with respect thereto executed in blank and
evidence of the filing of appropriate UCC-1 financing statement forms;

 

71

 

(ix)                      the
duly executed Subsidiary Security Agreement from each Guarantor, together with
evidence of the filing of appropriate UCC-1 financing statement forms;

 

(x)                         a
loan certificate of each Guarantor, including a certificate of incumbency with
respect to the signature of each Authorized Signatory of such Guarantor, which
loan certificate shall be in substantially the form of Exhibit U
attached hereto, together with appropriate attachments which shall include,
without limitation, the following items (or a certification that true, complete
and correct copies of such items were previously delivered to the
Administrative Agent in connection with the Original Closing Date and that such
items have not been modified or amended since the Original Closing Date):  (A) a true, complete and correct copy of the
articles of incorporation, certificate of limited partnership or certificate of
organization of such Guarantor, certified by the Secretary of State of such Guarantor’s
organization, (B) a true, complete and correct copy of by-laws, partnership
agreement or limited liability company or operating agreement of such
Guarantor, (C) a copy of the resolutions of the board of directors, or other
appropriate entity, of such Guarantor, authorizing such Guarantor with respect
to the execution, delivery and performance by such Guarantor of this Agreement
and the other Loan Documents to which it is a party, (D) certificates of
existence for such Guarantor issued by the Secretary of State or similar state
official for the state of such Guarantor’s organization and for each state in
which such Guarantor is, or is required to be, qualified to do business, and
(E) a true, complete and correct copy of any agreement in effect with respect
to the voting rights, ownership interests or management of such Guarantor;

 

(xi)                      the
duly executed Subordination of Intercompany Obligations Agreement;

 

(xii)                   the
duly executed Trademark Security Agreement, together with an appropriate filing
coversheet and evidence of the filing of appropriate UCC-1 financing statement
forms;

 

(xiii)                opinions
of counsel to the Borrower, CSC Holdings and the Guarantors addressed to each
Credit Party and in form and substance satisfactory to the Arrangers and their counsel;

 

(xiv)               a
copy of the corporate organizational chart of the Borrower Parties and the
Unrestricted Subsidiaries;

 

(xv)                  a
copy of (A) the unaudited consolidated balance sheets, income statements and
cash flow statements for the Rainbow Group, and (B) the unaudited combined
balance sheets, income statements and cash flow statements for the MGM
Companies, in each case for the quarter ended September 30, 2003;

 

72

 

(xvi)               copies
of insurance binders or certificates covering the assets of the Borrower
Parties, and otherwise meeting the requirements of, and to the extent required
by, Section 6.5 hereof;

 

(xvii)            an
irrevocable written notice from the Borrower of the prepayment in full of the
Term B Loans pursuant to Section 2.5(b)(i), an irrevocable notice from the
Borrower of a prepayment of Advances outstanding under the Revolving Loan
Commitment pursuant to Section 2.5(a) in the aggregate principal amount of
$50,000,000 (net of any fees and expenses payable on the Agreement Date with
respect to the Loans), and a duly executed Request for Advance for the Advance
of the Incremental Term C Loans to be made on the Agreement Date;

 

(xviii)         evidence
that the Borrower shall have obtained updated debt ratings from both Moody’s
and S&P with respect to the Loans; and

 

(xix)                 evidence
that the twenty percent (20%) equity stake in the MGM Operating Companies
indirectly owned by CSC Holdings prior to the Agreement Date shall have been
contributed to the Borrower, such that after giving effect to such contribution
the Borrower shall own (directly or indirectly) 100% of all of the MGM
Operating Companies.

 

(b)                                 All
of the representations and warranties of the Borrower Parties under this
Agreement shall be true and correct in all material respects, and the
Administrative Agent shall have received a certificate of an Authorized
Signatory of the Borrower so stating.

 

(c)                                  No
Default or Event of Default shall exist, both before and after giving effect to
the initial Advance of the Incremental Term C Loans made on the Agreement Date,
and the Administrative Agent shall have received a certificate of an Authorized
Signatory of the Borrower so stating.

 

(d)                                 No
litigation shall have been commenced against any of the Borrower Parties since  December 31,
2002, which, if such litigation could reasonably be expected to be determined
adversely to any such Company, could reasonably be expected to have a
Materially Adverse Effect (other than any such litigation identified on Schedule 5.1(l)).

 

(e)                                  There
shall not have been any Restatement, and no Responsible Officer of CVC or the
Borrower, as applicable, shall be aware of any information reasonably likely to
result in any Restatement, of the consolidated financial statements of the
Borrower Parties with respect to the fiscal year ended December 31, 2002,
and with respect to any fiscal quarter ended after the Original Closing Date,
and the Administrative Agent shall have received a certificate of an Authorized
Signatory of the Borrower so stating.

 

73

 

(f)                                    There
shall have been no material adverse change in the business, assets or financial
condition of the Rainbow Group from that reflected in the financial statements
provided pursuant to Section 4.1(a)(xvi) hereof.

 

(g)                                 The
Credit Parties shall have received payment of all fees and expenses due and
payable on the Agreement Date in respect of the transactions contemplated
hereby.

 

Section 4.2 Conditions
Precedent to Each Advance.  The
obligations of the Lenders to make each Advance (including the initial Advance
hereunder and any Advance of the Swing Loans, but excluding any Advance the
proceeds of which are to reimburse (x) the Swing Loan Lender for Swing Loans or
(y) any Issuing Bank for amounts drawn under a Letter of Credit)) of the Loans
is subject to the fulfillment of each of the following conditions immediately
prior to or contemporaneously with such Advance:

 

(a)                                  The
Administrative Agent, or in the case of a Swing Loan, the Swing Loan Lender,
shall have received a duly executed and completed Request for Advance or Swing
Loan Request, as applicable, signed by an Authorized Signatory of the Borrower,
which Request for Advance or Swing Loan Request, as applicable, shall (i)
certify that, after giving effect to the requested Advance, no Default or Event
of Default shall then exist, (ii) certify that, as of the date of the requested
Advance and after giving effect to the application of proceeds thereof, the
representations and warranties in Section 5.1 hereof shall be true and
correct in all material respects, except to the extent any representation or
warranty is made solely as of the Agreement Date, (iii) certify that, as of the
date of the requested Advance, there shall exist no litigation commenced against
any of the Borrower Parties since the Agreement Date, which, if such litigation
could reasonably be expected to be determined adversely to any such Company,
could reasonably be expected to have a Materially Adverse Effect, and (iv)
provide calculations demonstrating compliance with Sections 8.8 and 8.9 hereof
before and after giving effect to the requested Advance.

 

(b)                                 There
shall have occurred no event which has had or could reasonably be expected to
have a Materially Adverse Effect since the date of the most recent audited
financial statements provided to the Credit Parties.

 

(c)                                  Each
Request for Advance and each Swing Loan Request shall constitute a
representation and warranty by the Borrower made as of the time of requesting
such Advance that the conditions specified in this Section 4.2 have been
fulfilled as of the time of such Advance.

 

Section 4.3                                      Conditions
Precedent to Issuance of Letters of Credit.  The obligation of any Issuing Bank to issue any Letter of Credit
hereunder is subject to the fulfillment of each of the following conditions
immediately prior to or contemporaneously with the issuance of such Letter of
Credit:

 

74

 

(a)                                  The
Administrative Agent shall have received a duly executed and completed Request
for Issuance of Letter of Credit signed by an Authorized Signatory of the
Borrower, which Request for Issuance of Letter of Credit shall (i) certify
that, after giving effect to the requested Advance, no Default or Event of
Default shall then exist, (ii) certify that as of the date of the issuance of
the requested Letter of Credit and after giving effect thereto, the
representations and warranties in Section 5.1 hereof shall be true and
correct in all material respects, except to the extent and representation or
warranty is made solely as of the Agreement Date, (iii) certify that, as of the
date of the issuance of the requested Letter of Credit, there shall exist no
litigation commenced against any of the Borrower Parties since the Agreement Date,
which, if such litigation could reasonably be expected to be determined
adversely to any such Company, could reasonably be expected to have a
Materially Adverse Effect, and (iv) provide calculations demonstrating
compliance with Sections 8.8 and 8.9 hereof before and after giving effect to
the issuance of the requested Letter of Credit.

 

(b)                                 There
shall have occurred no event which has had or could reasonably be expected to
have a Materially Adverse Effect since the date of the most recent audited financial
statements provided to the Credit Parties.

 

(c)                                  Each
Request for Issuance of Letter of Credit shall constitute a representation and
warranty by the Borrower made as of the time of requesting such Letter of
Credit that the conditions specified in Section 4.3 have been fulfilled as
of the time of issuance of such Letter of Credit.

 

ARTICLE 5 - Representations and Warranties

 

Section 5.1 Representations
and Warranties.  The Borrower, for
itself and on behalf of its Subsidiaries, as applicable, hereby agrees,
represents, and warrants that:

 

(a)                                  Organization;
Power; Qualification.  The Borrower
is a limited liability company duly organized and validly existing under the
laws of the State of Delaware, having CSC Holdings as its only equity
holder.  Each of the Guarantors is duly
organized and validly existing under the laws of the jurisdiction of its
organization.  Each of the Borrower
Parties has the power and authority to own or lease and operate its properties
and to carry on its business as now being and hereafter proposed to be
conducted, and is duly qualified and authorized to do business in each
jurisdiction in which such qualification is necessary in view of the character
of its properties or the nature of its business requires such qualification or
authorization, except for qualifications and authorizations, the lack of which,
singly or in the aggregate, has not had and is not likely to have a Materially
Adverse Effect.

 

(b)                                 Authorization;
Enforceability.  Each of the
Borrower Parties has all power, corporate or otherwise, and has taken all
necessary action to authorize it to execute, deliver, and perform this
Agreement and each of the other Loan Documents to which it is a party in
accordance with the terms thereof and to consummate

 

75

 

the transactions
contemplated hereby and thereby.  This
Agreement and each of the other Loan Documents have been duly executed and
delivered by each of the Borrower Parties party thereto, and each of this
Agreement and the other Loan Documents to which any Borrower Party is a party
is a legal, valid and binding obligation of each Borrower Party party thereto,
enforceable in accordance with its terms, subject to limitations on
enforceability under bankruptcy, reorganization, insolvency and similar laws
affecting creditors’ rights generally and limitations on the availability of
the remedy of specific performance imposed by the application of general equity
principles.

 

(c)                                  Subsidiaries
and Unrestricted Subsidiaries. 
Except as listed on Schedule 5.1(c)-1 attached hereto (as
amended by the Borrower after the Agreement Date upon written notice to the
Lenders from time to time to the extent permitted hereunder), the Borrower does
not have any Subsidiaries.  With respect
to each of the Borrower Parties, Schedule 5.1(c)-1 also sets forth,
as of the Agreement Date, the following: 
(i) the direct owners of such Company and the extent of such ownership;
(ii) the state of such Company’s incorporation or organization; (iii) all
jurisdictions in which such Company is qualified to do business as a foreign
corporation, limited liability company or partnership, as the case may be; (iv)
the federal tax identification number, the state organizational identification
number (if issued by the state of such Company’s incorporation or
organization), the address of the chief executive office and principal place of
business of such Company, and the name and registered office of the registered
agent appointed by such Company; and (v) whether such Borrower Party is a MGM
Operating Company.  Except as set forth
on Schedule 5.1(c)-2 attached hereto, there are no Unrestricted
Subsidiaries.  With respect to each
Unrestricted Subsidiary, Schedule 5.1(c)-2 also sets forth, as of
the Agreement Date, the following:  (i)
the direct owners of such Unrestricted Subsidiary and the extent of such
ownership; (ii) the state of such Unrestricted Subsidiary’s incorporation or
organization; and (iii) all jurisdictions in which such Unrestricted Subsidiary
is qualified to do business as a foreign corporation, limited liability company
or partnership, as the case may be.

 

(d)                                 Compliance
with Laws, Other Loan Documents, and Contemplated Transactions.  The execution, delivery and performance of
this Agreement and each of the other Loan Documents in accordance with the
terms and the consummation of the transactions contemplated hereby and thereby
do not and will not (i) violate any Applicable Law, (ii) result in a breach of,
or constitute a default under the certificate or articles of incorporation,
by-laws or other governing documents, as the case may be and as amended, of any
of the Borrower Parties, or under any Material MSO Agreement, or under any
indenture, agreement, or other instrument to which any of the Borrower Parties
is a party or by which it or any of its properties may be bound, or (iii)
result in or require the creation or imposition of any Lien upon or with
respect to any property now owned or hereafter acquired by any Borrower Party
except Permitted Liens; except, with respect to items (i) and (ii) above, where
such violations, breaches or defaults, if any, singly or in the aggregate, has
not had and is not likely to have a Materially Adverse Effect.

 

76

 

(e)                                  Necessary
Authorizations.  No approval or
consent of, or filing or registration with, any federal, state or local
commission or other regulatory authority is required in connection with (i) the
execution, delivery and performance by the Borrower of this Agreement and the
other Loan Documents to which it is a party, or (ii) the execution, delivery
and performance by each of the Guarantors of this Agreement and the other Loan
Documents to which such Guarantor is a party. 
All such described action required to be taken as a condition to the
execution and delivery of each of this Agreement and other Loan Documents to
which any of the Borrower Parties is a party has been duly taken by all such
commissions and authorities or other Persons, as the case may be, and all such
action required to be taken as a condition to the Advance of the Incremental
Term C Loans made on the Agreement Date has been or will be duly taken prior to
such Advance.

 

(f)                                    Title
to Properties.  Each of the Borrower
Parties has good and legal title to, or a valid leasehold interest in, all of
its respective material properties and assets free and clear of all Liens,
except Permitted Liens.

 

(g)                                 Collective
Bargaining.  None of the Borrower
Parties has entered into any collective bargaining agreement with any trade or
labor union or other employee collective bargaining agent.

 

(h)                                 Taxes.  All federal, state, and other tax returns of
the Borrower and each of its Subsidiaries required by law to be filed have been
duly filed, and all federal, state, and other taxes, assessments, and other
governmental charges or levies upon the Borrower, each of its Subsidiaries, and
any of their respective properties, income, profits, and assets, which are due
and payable, have been paid, except any such tax payment of which the Borrower
or such Subsidiary, as the case may be, is contesting in good faith by
appropriate proceedings, and as to which neither any Lien other than a
Permitted Lien has attached nor any foreclosure, distraint, sale, or similar
proceedings have been commenced, and except any such tax payments which the
failure to pay, singly or in the aggregate, has not had and is not likely to
have a Materially Adverse Effect.  The
charges, accruals, and reserves on the books of the Borrower and each of its
Subsidiaries in respect of taxes are, in the reasonable judgment of the
Borrower, adequate.

 

(i)                                     Financial
Statements.  The Borrower has
furnished, or caused to be furnished, to the Credit Parties the financial
statements required pursuant to Section 4.1(a)(xv) hereof, all of which
are complete and correct in all material respects and present fairly in
accordance with GAAP the financial position of the Borrower Parties as at the
dates thereof, and the results of operations for the periods ended as of such
dates, subject to normal year-end adjustments with respect to any unaudited
statements.  Except as disclosed in such
financial statements or in Schedule 5.1(i) attached hereto, none of
the Borrower Parties had any material liabilities, contingent or

 

77

 

otherwise, and
there are no material unrealized or anticipated losses of any such Companies
which have not heretofore been disclosed in writing to the Credit Parties.

 

(j)                                     No
Adverse Change.  Since
December 31, 2002, there has occurred no event which has had or could
reasonably be expected to have a Materially Adverse Effect.

 

(k)                                  Investments
and Guaranties.  None of the
Borrower Parties has made Investments in, advances to or guaranties of the
obligations of any Person, except as reflected in the financial statements
referred to in Section 5.1(i) above or disclosed in Schedule 5.1(k)
attached hereto.

 

(l)                                     Liabilities,
Litigation, etc.  Except (i) for
liabilities incurred in the normal course of business, (ii) as disclosed or
referred to in the financial statements described in Section 5.1(i) above,
or (iii) as disclosed on Schedule 5.1(l) attached hereto, none of
the Borrower Parties has any material (individually or in the aggregate) direct
or contingent liabilities.  Except as
disclosed on Schedule 5.1(l) attached hereto, there is no
litigation, legal or administrative proceeding, investigation, or other action
of any nature pending or, to the knowledge of the Borrower, threatened against
or affecting the any of the Borrower Parties or any of their respective
properties which involves the possibility of any judgment or liability not
fully covered by insurance that, singly or in the aggregate, could reasonably
be expected to have a Materially Adverse Effect.

 

(m)                               ERISA.  Each Plan maintained, or contributed to, by
the Borrower or any of its Subsidiaries, or any of their ERISA Affiliates is
listed on Schedule 5.1(m) attached hereto.  Each of such Plans is in compliance in all
material respects with their terms, ERISA and the Code.  None of such Plans has a material
“accumulated funding deficiency” within the meaning of ERISA or the Code.  Neither the Borrower nor any of its
Subsidiaries nor any of their respective ERISA Affiliates has incurred any
material liability to the PBGC in connection with any such Plan.  The assets of each such Plan which is
subject to Title IV of ERISA are sufficient to provide the benefits under such
Plan if such Plan were determined on an ongoing basis.  No Reportable Event, for which the thirty
(30) day notice provision has not been waived in accordance with ERISA
Section 4043(a), has occurred with respect to any such
Plan.  No party in interest, fiduciary,
trustee or administrator of any such Plan or trust created thereunder has
engaged in a “prohibited transaction” (as such term is defined in
Section 406 of ERISA or Section 4975 of the Code which is not
statutorily or administratively exempt under Sections 407 or 408 of ERISA or
Section 4975 of the Code, each of which exemptions are disclosed on Schedule 5.1(m))
which would subject the Borrower, any of its Subsidiaries or any of their
respective ERISA Affiliates to a material tax on “prohibited transactions”
imposed by Section 4975 of the Code; provided that this representation and
warranty is based upon the Borrower’s understanding provided by Lenders that
the source of the Loans will not at any time constitute assets of any such
Plan.  No party in interest, fiduciary,
trustee or administrator of any such Plan or trust created thereunder

 

78

 

has committed a
material breach of its fiduciary duty or knowingly participated in any
violation of ERISA which would subject the Borrower, any of its Subsidiaries or
any of their respective ERISA Affiliates to a material penalty under
Section 502 of ERISA.  Except as
set forth on Schedule 5.1(m), none of the Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates is a participant in or
obliged to make any payment to a Multiemployer Plan.  Except as required by Sections 601 through 609 of ERISA or as
disclosed on Schedule 5.1(m), Section 4980(B) of the Code and
applicable state law, neither the Borrower nor any of its Subsidiaries has made
any oral or written commitments to provide post-employment health or life
insurance coverage with respect to any former or current employee.  The Borrower, its Subsidiaries and their
respective ERISA Affiliates have properly classified individuals providing
services to the Borrower or any of its Subsidiaries or any of their respective
ERISA Affiliates as employees and non-employees, except to the extent that a
misclassification would not result in a Materially Adverse Effect.

 

(n)                                 Patents,
Trademarks, etc.  Schedule 5.1(n)
attached hereto sets forth all registered trademarks and pending applications
for trademarks of each of the Borrower Parties. 
Except as disclosed on Schedule 5.1(n) attached
hereto (as amended by the Borrower upon written notice to the Lenders from time
to time, together with, if necessary, an amendment to the Trademark Security
Agreement reflecting the addition of any new trademarks or trademark
applications), each of the Borrower Parties owns, possesses or has the right to
use all licenses and rights to all patents, trademarks, trademark rights, trade
names, trade name rights, service marks, and copyrights, and rights with
respect thereto, necessary to conduct its business in all material respects as
now conducted, without known conflict with any patent, trademark, trade name,
service mark, license or copyright of any other Person, and in each case, with
respect to patents, trademarks, trademark rights, trade names, trade name and
copyrights and licenses with respect thereto owned by the Borrower Parties,
subject to no mortgage, pledge, lien, lease, encumbrance, charge, security
interest, title retention agreement or option other than as otherwise permitted
hereunder.  Except to the extent that
there is not likely to be a Materially Adverse Effect resulting from such
ineffectiveness or non-compliance, all such licenses and rights with respect to
patents, trademarks, trademark rights, trade names, trade name rights, service
marks and copyrights are in full force and effect, and to the extent
applicable, each of the Borrower Parties is in full compliance in all material
respects with all of the provisions thereof. 
Except as set forth on Schedule 5.1(n) attached hereto (as
amended by the Borrower upon written notice to the Lenders from time to time),
no such patent, trademark, trademark rights, trade names, trade name rights,
service marks, copyrights or licenses is subject to any pending or, to the best
of the Borrower’s knowledge, threatened attack or revocation.  Except as set forth on Schedule 5.1(n)
attached hereto, (i) none of the Borrower Parties owns any patents or material
registered copyrights and (ii) the business of the Borrower Parties is not
subject to any license issued by the FCC.

 

79

 

(o)                                 Compliance
with Law; Absence of Default.  Each
of the Borrower Parties is in compliance with all Applicable Laws the
non-compliance with which is likely to have a Materially Adverse Effect and
with all of the provisions of its articles or certificate of incorporation and
by-laws, or other governing documents, as applicable, which would adversely
affect any Borrower Party’s ability to perform the Obligations, and no event
has occurred or has failed to occur which has not been remedied or waived, the
occurrence or non-occurrence of which constitutes (i) a Default or (ii) a
default by any of the Borrower Parties under any other indenture, agreement, or
other instrument, or under any Material MSO Agreement or Material Film Rights
Agreement, or any judgment, decree, or order to which any of the Borrower Parties
is a party or by which any of the Borrower Parties, or any of their respective
properties, may be bound, which default, judgment, decree or order could
reasonably be considered to have a Materially Adverse Effect.

 

(p)                                 Casualties;
Taking of Properties, etc.  Since
the date of the most recent audited financial statements provided to the Credit
Parties by the Borrower, neither the business nor the properties of any of the
Borrower Parties has been materially and adversely affected as a result of any
fire, explosion, earthquake, flood, drought, windstorm, accident, strike or
other labor disturbance, embargo, requisition or taking of property or
cancellation of contracts, permits or concessions by any domestic or foreign
government or any agency thereof, riot, activities of armed forces, or acts of
God or of any public enemy.

 

(q)                                 Accuracy
and Completeness of Information. 
None of the financial statements or any written statements delivered to
any of the Credit Parties pursuant to this Agreement contains, as at the date
of delivery thereof, any untrue statement of material fact nor do such
financial statements, and such written statements, taken as a whole, omit to
state a material fact or any fact necessary to make the statements contained
therein not misleading.  As of the
Agreement Date and as supplemented by the Borrower from time to time pursuant
to Section 7.4(f), Schedule 5.1(q) attached hereto sets forth
certain summary information with respect to each Material MSO Agreement and
each Material Film Rights Agreement to which any of the Borrower Parties is a
party.

 

(r)                                    Compliance
with Regulations U and X.  None of
the Borrower Parties is engaged principally or as one of its important
activities in the business of extending credit for the purpose of purchasing or
carrying, and the Borrower does not own or presently intend to acquire, any
“margin security” or “margin stock” as defined in Regulations U and X (12
C.F.R. Parts 221 and 224) of the Board of Governors of the Federal Reserve
System (herein called “margin stock”). 
None of the proceeds of the Loans will be used, directly or indirectly,
for the purpose of purchasing or carrying any margin stock or for the purpose
of reducing or retiring any Indebtedness which was originally incurred to
purchase or carry margin stock or for any other purpose which would constitute
this transaction a “purpose credit” within the meaning of said 

 

80

 

Regulations U and
X.  Neither the Borrower nor any bank
acting on its behalf has taken or will take any action which would cause this
Agreement or the Notes to violate Regulation U or X or any other regulation of
the Board of Governors of the Federal Reserve System or to violate the
Securities Exchange Act of 1934.  If so
requested by the Administrative Agent, the Borrower will furnish the
Administrative Agent with (i) a statement or statements in conformity with the
requirements of Federal Reserve Form U-1 referred to in Regulation U of said
Board of Governors and (ii) other documents evidencing its compliance with the
margin regulations, including, without limitation, an opinion of counsel in
form and substance reasonably satisfactory to the Lenders.

 

(s)                                  Solvency.  The Borrower is, and each of the AMC
Partners and each of the IFC Partners is, Solvent, and after giving effect to
the transactions contemplated hereby and by the Loan Documents the Borrower
will be, and each of the AMC Partners and each of the IFC Partners will be,
Solvent.

 

(t)                                    Broker’s
or Finder’s Commissions.  No broker’s
or finder’s fee or commission will be payable with respect to the consummation
of the transactions contemplated by this Agreement and the other Loan
Documents, and no other similar fees or commissions will be payable by the
Borrower for any other services rendered to the Borrower ancillary to the
transactions contemplated herein.

 

(u)                                 Business.  The Borrower is a holding company whose
assets consist of the equity interests of the Guarantors and the Unrestricted
Subsidiaries.  The business of each of the
Guarantors includes either acting as a holding company whose assets consist of
the equity interests of its Subsidiaries or producing and acquiring various
types of programming and distributing such programming to cable and other
non-broadcast delivery systems and activities directly related thereto.

 

(v)                                 Name
of Borrower.  Except as set forth on
Schedule 5.1(v) attached hereto, none of the Borrower Parties has
(i) changed its name within the five (5) year period immediately preceding the
Agreement Date or (ii) transacted business under any other name or trade name
or acquired any assets except for valid consideration.

 

(w)                               Investment
Company Act.  None of the Borrower
Parties is required to register under the provisions of the Investment Company
Act of 1940, as amended, and neither the entering into or performance by the
Borrower of this Agreement nor the making of the Loans violates any provision
of such Act or requires any consent, approval, or authorization of, or
registration with, any governmental or public body or authority pursuant to any
of the provisions of such Act.

 

Section 5.2  Survival of
Representations and Warranties, etc. 
All representations and warranties made under this Agreement shall be
deemed to be made, and shall be true and correct in all material respects, at
and as of the Agreement Date and on the date of each Advance, except to the
extent any representation or warranty is made solely as of the Agreement Date
in accordance with the terms hereof. 
All representations 

 

81

 

and warranties made under this Agreement shall survive, and not be
waived by, the execution hereof by the Credit Parties, any investigation or
inquiry by any of the Credit Parties or the making of any Advance under this
Agreement.

 

ARTICLE 6 - General Covenants

 

So long as any of the
Obligations is outstanding and unpaid or the Borrower shall have the right to
borrow hereunder (whether or not the conditions to borrowing have been or can
be fulfilled), and unless the Majority Lenders shall otherwise consent in
writing:

 

Section 6.1 Preservation of
Existence and Similar Matters.  The
Borrower will, and will cause each of the Guarantors to, (a) preserve and
maintain their respective existence, rights, licenses and privileges in their
respective jurisdictions of organization and (b) qualify and remain qualified
and authorized to do business in each jurisdiction in which such qualification
is necessary in view of the character of their respective properties or in
which the nature of their respective businesses requires such qualification or
authorization, except for qualifications and authorizations, the lack of which,
singly or in the aggregate, has not had and is not likely to have a Materially
Adverse Effect; provided, however, any of the Borrower Parties
may liquidate or dissolve, or cause the liquidation or dissolution of, any
Subsidiary of the Borrower that holds no assets and conducts no business
activities.

 

Section 6.2 Compliance with
Applicable Law.  The Borrower will comply,
and will cause each of the Guarantors to comply, with the requirements of all
Applicable Law, except where failure to comply has not had and is not likely to
have a Materially Adverse Effect.

 

Section 6.3 Maintenance of
Properties.  The Borrower will
maintain, and will cause each of the Guarantors to maintain, or cause to be
maintained in the ordinary course of business in good repair, working order,
and condition all properties necessary in their respective businesses (whether
owned or held under lease).

 

Section 6.4 Accounting
Methods and Financial Records.  The
Borrower (or CVC on the Borrower’s behalf) will maintain, and will cause each
of the Guarantors to maintain, or will maintain on their behalf, a system of
accounting established and administered in accordance with GAAP, and will (or
CVC on behalf of the Borrower and the Guarantors will), keep and cause each of
the Guarantors to keep adequate records and books of account in which complete
entries will be made in accordance with such accounting principles consistently
applied and reflecting all transactions required to be reflected by such
accounting principles.

 

Section 6.5 Insurance.  The Borrower (or CVC on the Borrower’s
behalf) will, and will cause each of the Guarantors to:

 

82

 

(a)                                  maintain
or cause to be maintained (i) insurance on the assets and properties and on its
operations including, but not limited to, public liability, business
interruption and fidelity coverage insurance, from responsible insurance
companies in such amounts and against such risks as shall be reasonably
acceptable to the Majority Lenders and (ii) maintain insurance coverage
comparable to that in place on the Agreement Date, taking into account the
growth of their respective businesses and operations after the Agreement Date;
and

 

(b)                                 maintain
insurance coverage with respect to the Collateral, comparable to that in place
on the Agreement Date (taking into account any increase in value with respect
to the Collateral) insuring against loss or damage by fire, theft, burglary,
pilferage, loss in transit, explosions and hazards insured against by extended
coverage, all premiums thereon to be paid by the Borrower; and

 

(c)                                  require
that each insurance policy on its assets and properties name the Administrative
Agent, as administrative agent for the Credit Parties, as additional insured
and loss payee to the extent of the Obligations, and provide for at least
thirty (30) days’ prior written notice to the Administrative Agent of any
default under, termination of or proposed cancellation or nonrenewal of, such
policy.

 

Section 6.6 Payment of Taxes
and Claims.  The Borrower will pay
and discharge, and will cause each of its Subsidiaries to pay and discharge,
all taxes, assessments, and governmental charges or levies imposed upon them or
upon their respective incomes or profits or upon any properties belonging to
them prior to the date on which penalties attach thereto, and all lawful claims
for labor, materials, and supplies which, if unpaid, would become a Lien other
than a Permitted Lien upon any of their respective properties; except that no
such tax, assessment, charge, levy, or claim need be paid which is being
contested in good faith by appropriate proceedings and for which adequate
reserves shall have been set aside on the appropriate books, but only so long
as such tax, assessment, charge, levy, or claim does not become a Lien or
charge other than a Permitted Lien and no foreclosure, distraint, sale, or
similar proceedings shall have been commenced and remain unstayed for a period
of thirty (30) days after such commencement.

 

Section 6.7 Visits and
Inspections.  The Borrower will
permit, and will cause each of the Guarantors to permit, representatives of (a)
prior to a Default, the Arrangers upon three (3) Business Days written notice
to the Borrower, and (b) subsequent to a Default, each Credit Party, upon
notice prior to 10:00 a.m. (New York time) on such date, to (a) visit and
inspect the properties of each of the Borrower Parties during normal business
hours, (b) inspect and make extracts from and copies of their respective books
and records, and (c) discuss with their respective principal officers its
businesses, assets, liabilities, financial positions, results of operations,
and business prospects relating to each of the Borrower Parties.

 

83

 

Section 6.8 Payment of
Indebtedness.  The Borrower will
pay, and will cause each of the Guarantors to pay, subject to any provisions therein
regarding subordination, any and all of their respective Indebtedness For Money
Borrowed when and as the same becomes due, other than amounts duly disputed in
good faith, the non-payment of which is not likely to have a Materially Adverse
Effect.

 

Section 6.9 Use of Proceeds.  The Borrower will use the proceeds of the
Loans solely as provided in Section 2.1(f).

 

Section 6.10 ERISA.  The Borrower shall, and shall cause each of
its Subsidiaries to, at all times make, or cause to be made, prompt payment of
all material contributions required under the terms of their Plans and to meet
the minimum funding standards set forth in ERISA with respect to such
Plans.  The Borrower shall maintain, and
shall cause each of its Subsidiaries to maintain, each of their respective
Plans in material compliance with the terms of such Plans and the applicable
provisions of ERISA and the Code.

 

Section 6.11 Further
Assurances.  The Borrower will
promptly cure, or cause to be cured, defects in the creation and issuance of any
Notes and the execution and delivery of the Loan Documents (including, without
limitation, this Agreement), resulting from any act or failure to act by any of
the Borrower Parties or any employee or officer thereof.  The Borrower at its expense will promptly
execute and deliver to the Credit Parties, or cause to be executed and
delivered to the Credit Parties, all such other and further documents,
agreements, and instruments in compliance with or for the accomplishment of the
covenants and agreements of the Borrower in the Loan Documents (including,
without limitation, this Agreement), or to correct any omissions in the Loan
Documents, or more fully to state the obligations set out herein or in any of
the Loan Documents, or to obtain any consents, all as may be necessary or
appropriate in connection therewith and as may be reasonably requested.

 

Section 6.12 Broker’s Claims.  The Borrower hereby indemnifies and agrees
to hold each of the Credit Parties harmless from and against any and all
losses, liabilities, damages, costs and expenses which may be suffered or
incurred by the Credit Parties, or any of them, in respect of any claim, suit,
action or cause of action now or hereafter asserted by a broker or any Person
acting in a similar capacity arising from or in connection with the execution
and delivery of this Agreement or any other Loan Document or the consummation
of the transactions contemplated herein or therein.

 

Section 6.13 Indemnity.  Each of the Borrower Parties, jointly and
severally, will indemnify and hold harmless each of the Credit Parties and each
of their respective Lender Affiliates, employees, representatives, officers and
directors (collectively, the “Indemnified Parties”) from and against any
and all claims, liabilities, losses, damages, actions, and demands by any party
(other than with respect to any claims, actions or demands made by other such
indemnified parties or any liabilities, losses or damages caused thereby)
against such Credit Party, resulting from any breach or 

 

84

 

alleged breach by any of the Borrower Parties of any representation or
warranty made hereunder, relating to or arising of the issuance of any Letter
of Credit, or otherwise arising out of the Commitments or the making,
administration or enforcement of the Loan Documents and the Loans, unless, with
respect to any of the above, such Credit Party is finally judicially determined
to have acted or failed to act with gross negligence or willful misconduct.

 

Section 6.14                                Covenants
Regarding Formation of Subsidiaries, Investments and Acquisitions.  In connection with the consummation of any
Acquisition or any Investment made by any of the Borrower Parties, or the
formation of any new Subsidiary (which, consistent with the limitations set
forth in the definition of “Subsidiary,” shall not include an Unrestricted
Subsidiary for purposes of this Section) of any of the Borrower Parties, as
soon as available and in any event on or before the effective date thereof, the
Borrower will, and will cause each of the Guarantors to, provide to the
Administrative Agent the following (all of which shall be in such form and
substance as shall be acceptable to the Arrangers):  

 

(a)                                  a
duly executed joinder and supplement to this Agreement, substantially in the
form of Exhibit V attached hereto (each a “Guarantee Supplement”),
pursuant to which each new Subsidiary shall agree to join as a Guarantor of the
Obligations under Article 3 hereof; 

 

(b)                                 a
duly executed supplement to the Subsidiary Security Agreement for each new
Guarantor, together with appropriate UCC-1 financing statement forms; 

 

(c)                                  a
loan certificate for each new Guarantor, substantially in the form of Exhibit
U attached hereto, together with appropriate attachments thereto; 

 

(d)                                 in
the case of any new Guarantor holding any issued and outstanding shares of
capital stock (or other instruments or securities evidencing ownership) of any
other Borrower Party, a duly executed supplement to the Subsidiary Pledge
Agreement, pursuant to which such new Guarantor shall pledge to the
Administrative Agent all of such capital stock (or other instruments or
securities evidencing ownership) held by it, whether now owned or hereafter
acquired; 

 

(e)                                  a
duly executed amendment to the Borrower Pledge Agreement or the Subsidiary
Pledge Agreement, as applicable, pursuant to which (i) all of the issued and
outstanding capital stock (or other instruments or securities evidencing
ownership) of each new Guarantor shall be pledged to the Administrative Agent as
additional Collateral for the Obligations, and (ii) all shares of capital stock
(or other instruments or securities evidencing ownership) with respect to any
Investment (including, without limitation, any Investment made pursuant to
Section 8.2(c)(i) hereof, but excluding any equity interests in any of the
Unrestricted Subsidiaries) beneficially owned or held by any of the Borrower
Parties shall be pledged to the Administrative 

 

85

 

Agent as
additional Collateral for the Obligations, but only to the extent (except with
respect to any Investment made pursuant to Section 8.2(c)(i) hereof) that
the pledge of any such shares or other interests in or with respect to any
Company that is not wholly-owned directly or indirectly by the Borrower will
not (A) violate the Constituent Documents applicable to such Company (and, if
the pledge of any such shares or other interests will violate any of such
Constituent Documents, such shares or other interests shall be held by the
Borrower Parties subject to the terms and conditions of this Agreement and the
other Loan Documents) and (B) require the consent of any unaffiliated third
party (which consent the Borrower is unable to obtain after taking reasonable
steps to do so), and in the case of the foregoing clauses (i) and (ii),
together with all original securities certificates, duly executed securities
powers and appropriate UCC-1 financing statement forms; and 

 

(f)                                    all
other documentation, including, without limitation, (i) an amendment to the
Trademark Security Agreement covering any additional registered trademarks or
trademark applications owned by any of the Borrower Parties, (ii) to the extent
reasonably available, financial information with respect to the designation of
any new MGM Operating Company for the most recent period ending immediately
prior to the date of such designation, and other financial information, to the
extent available, which in the reasonable opinion of the Arrangers and the
Majority Lenders is appropriate with respect to such designation of a new MGM
Operating Company to confirm compliance with the terms and conditions of this
Agreement, and (iii) to the extent reasonably requested by the Administrative
Agent one or more opinions of counsel satisfactory to the Administrative Agent
which in the reasonable opinion of the Administrative Agent is appropriate with
respect to the Acquisition or formation of any new Guarantor or the addition of
any new Collateral as security for the Obligations.  

 

To the extent that any
stock or other equity interests in any FUSE Company shall be sold, transferred
or otherwise disposed of pursuant to Section 8.5(b) hereof, or any
additional stock or other equity interests in any FUSE Company shall be issued
pursuant to Section 8.5(c) hereof, the Administrative Agent shall, upon
the request of the Borrower, release the Guaranty of the Obligations from such
FUSE Company and the Lien of the Administrative Agent in the properties and
assets of such FUSE Company, provided that (x) notwithstanding any provision to
the contrary contained in this Agreement and the other Loan Documents, all of
the stock or other equity interests in such FUSE Company which are owned by any
Borrower Party shall continue to be pledged as collateral security for the
Obligations pursuant to the Borrower Pledge Agreement or the Subsidiary Pledge
Agreement, as applicable, (y) neither the Constituent Documents of such FUSE
Company nor any agreement between any Borrower Party and the purchaser or
investor, as applicable, in such FUSE Company shall contain any unreasonable
restrictions, in the reasonable determination of the Arrangers, on the
Administrative Agent’s ability to realize upon such Collateral, and (z) upon
the release of the Guaranty of the Obligations from such FUSE Company and the
Lien of the Administrative Agent in the properties and assets of such FUSE
Company, such FUSE 

 

86

 

Company shall constitute
an Unrestricted Subsidiary and shall cease to be a Borrower Party for all
purposes under this Agreement and the other Loan Documents.  Any document, agreement or instrument
executed or issued pursuant to this Section 6.14 shall be and constitute a
“Loan Document” for purposes of this Agreement.

 

Section 6.15                                Interest
Rate Hedging.

 

(a)                                  So
long as the Total Leverage Ratio is greater than 3.25 to 1.00, the Borrower
shall maintain one or more Interest Hedge Agreements which fix or place a limit
on the Borrower’s interest obligations at interest rates reasonably acceptable
to the Arrangers such that, at all times, not less than forty percent (40%) of
Indebtedness For Money Borrowed of the Borrower Parties (excluding any net
obligations in respect of Interest Hedge Agreements) shall be hedged or at a
fixed rate basis.  The Borrower shall
enter into such Interest Hedge Agreements as required by this Section 6.15
within ninety (90) days after the delivery of the initial performance
certificate pursuant to Section 7.3 hereof indicating the Total Leverage
Ratio exceeds 3.25 to 1.00.

 

(b)                                 All
obligations of the Borrower to the Credit Parties, or any of them, or any of
their respective Lender Affiliates, pursuant to any Interest Hedge Agreement
involving notional amounts which in the aggregate do not exceed the Commitments
shall rank pari  passu with all other Obligations and shall be
entitled to all benefits of the Guaranties provided in Article 3 and be
secured by the Security Documents.

 

ARTICLE 7 - Information Covenants

 

So long as any of the
Obligations is outstanding and unpaid or the Borrower has a right to borrow
hereunder (whether or not the conditions to borrowing have been or can be
fulfilled) and unless the Majority Lenders shall otherwise consent in writing,
the Borrower will furnish or cause to be furnished to each of the Credit
Parties at their respective offices:

 

Section 7.1                                      Quarterly
Financial Statements and Information. 
On or before each applicable Financial Statements Delivery Date, with
respect to each fiscal quarter of the Borrower, the following:

 

(a)                                  a
copy of the unaudited consolidated balance sheets, of the Rainbow Group as at
the end of the quarter then ended, and the related unaudited consolidated
statements of income, retained earnings and cash flows for the Rainbow Group
for such quarter and for the elapsed portion of the year ended with the last
day of such quarter; and

 

(b)                                 a
copy of the unaudited consolidated balance sheets, of the Borrower Parties as
at the end of the quarter then ended, and the related unaudited consolidated
statements of income, retained earnings and cash flows for the Borrower 

 

87

 

Parties for such
quarter and for the elapsed portion of the year ended with the last day of such
quarter, setting forth in the case of the statements of income and retained
earnings the financial performance of the MGM Operating Companies (by
programming segment) by footnote, for such quarter and for the elapsed portion
of the year ended with the last day of such quarter.

 

All of the foregoing financial
statements shall set forth in comparative form such figures for the same period
for the prior fiscal year and shall be certified by an Authorized Signatory of
the Borrower to, in his or her opinion, present fairly, in accordance with
GAAP, the consolidated financial position of the Rainbow Group and the Borrower
Parties, as applicable, in each case as at the end of such period, and the
results of operations for such period, and for the elapsed portion of the year
ended with the last day of such period, subject only to normal year-end
adjustments and except for the effect of not consolidating certain Unrestricted
Subsidiaries in the financial statements of the Borrower Parties.

 

Section 7.2 Annual Financial
Statements and Information; Certificate of No Default.  On or before each applicable Financial
Statements Delivery Date, with respect to each fiscal year of the Borrower, the
following:

 

(a)                                  a
copy of the audited consolidated balance sheets, and the related audited
consolidated statements of income, retained earnings and cash flows, of the
Rainbow Group, setting forth the financial information of the Rainbow Group as
at the end of the fiscal year then ended; and

 

(b)                                 a
copy of the audited consolidated balance sheets, and the related audited
consolidated statements of income, retained earnings and cash flows, of the
Borrower Parties, setting forth the financial information of the Borrower
Parties as at the end of the fiscal year then ended, setting forth in the case
of the statements of income and retained earnings the financial performance of
the MGM Operating Companies (by programming segment) by footnote, as at the end
of the fiscal year then ended.

 

All of the foregoing
financial statements shall set forth in comparative form such figures for the same
period for the prior fiscal year and, with respect to the audited financial
statements, shall be accompanied by an opinion of KPMG Peat Marwick or a firm
of independent certified public accountants of recognized standing selected by
the Borrower and satisfactory to the Majority Lenders, together with a
statement of such accountants certifying that no Default or Event of Default,
including, without limitation, any Default under Sections 8.8, 8.9, 8.10 and
8.11 hereof, was detected during the examination of the Rainbow Group or the
Borrower Parties and that such accountants have authorized the Borrower to
deliver such financial statements and opinion thereon to the Credit Parties
pursuant to this Agreement.

 

88

 

Section 7.3 Performance
Certificates.  Together with the
delivery of the financial statements pursuant to Section 7.1 hereof, a
certificate of an Authorized Signatory of the Borrower, in substantially the
form of Exhibit W attached hereto:

 

(a)                                  setting
forth as at the end of such quarter or year, as the case may be, the
arithmetical calculations required to establish (i) the Applicable Margin and
(ii) whether or not the Borrower was in compliance with the requirements of the
Financial Covenants;

 

(b)                                 stating
that, to the best of his or her knowledge, no Default or Event of Default has
occurred as at the end of such quarter or year, as the case may be, or, if a
Default or an Event of Default has occurred, disclosing each such Default or
Event of Default and its nature, when it occurred, whether it is continuing,
and the steps being taken by the Borrower with respect to such Default or Event
of Default;

 

(c)                                  setting
forth a list updating the information set forth on Schedule 5.1(c)-1
with respect to the Borrower Parties and on Schedule 5.1(c)-2 with
respect to the Unrestricted Subsidiaries, in each case to the extent that the
Borrower shall have formed or acquired any new Subsidiaries or designated any
additional Unrestricted Subsidiaries during such quarter;

 

(d)                                 setting
forth a list and description of all Investments, Restricted Payments and
Restricted Purchases made by the Borrower Parties during such quarter; and

 

(e)                                  setting
forth a list and description of, together with applicable financial statements,
if available, for any Acquisition, formation or designation of any new MGM
Operating Company during the period for which such performance certificate is
being given.

 

Section 7.4 Copies of Other
Reports.

 

(a)                                  Promptly
upon receipt thereof, copies of all reports, if any, submitted to the Borrower
by its independent public accountants regarding any of the Borrower Parties,
including, without limitation, any management report prepared in connection
with the annual audit referred to in Section 7.2 hereof.

 

(b)                                 Within
sixty (60) days after the end of each fiscal year of the Borrower, the annual
budget for the Borrower Parties and an updated schedule of Investments and
a statement of anticipated sources and uses of funds for the Rainbow Group, in
each case for the current fiscal year.

 

(c)                                  Promptly
after the sending thereof, copies of all material statements, reports and other
financial information relating to the Borrower Parties that is sent to any of
the shareholders of the Borrower or CVC.

 

89

 

(d)                                 Promptly
after the preparation of the same, copies of all material reports or financial
information filed with any governmental agency, department, bureau, division or
other governmental authority or regulatory body, or evidencing facts or
containing information which could have a Materially Adverse Effect.

 

(e)                                  From
time to time and promptly upon each request, such data, certificates, reports,
statements, documents, or further information regarding the business, assets,
liabilities, financial position, projections or results of operations of any of
the Borrower Parties as the Arrangers or the Majority Lenders may reasonably
request.

 

(f)                                    At
the time audited financial statements are required to be provided under Section 7.2
hereof, summary information of the type set forth in Schedule 5.1(q)
with respect to each Material MSO Agreement and each Material Film Rights
Agreement then in effect to which any of Borrower Parties is a party (noting
any Material MSO Agreements or Material Film Rights Agreements that have been
either added or deleted with respect to the prior year).

 

Section 7.5 Notice of
Litigation and Other Matters. 
Prompt notice of the following events as to which the Borrower has
received notice or otherwise become aware thereof:

 

(a)                                  The
commencement of all material proceedings and investigations by or before any
governmental body and all actions and proceedings in any court or before any
arbitrator (i) against or, (ii) to the extent known to the Borrower, in any
other way relating adversely and directly to any of the Borrower Parties, or
any of their respective properties, assets or businesses, or which calls into
question the validity of this Agreement or any other Loan Document, except
where the adverse outcome of such proceeding or investigation is not likely to
have a Materially Adverse Effect;

 

(b)                                 The
commencement of any proceeding by or before any governmental body and all
actions and proceedings in any court or before any arbitrator with respect to
the ownership or use of “American Movie Classics”;

 

(c)                                  Any
notice of termination, partial termination or expiration of any MSO Agreement
which results in a reduction of fifteen percent (15%) or more of the number of
Paying Affiliated Basic Subscribers of the Borrower Parties in the aggregate
during any calendar quarter when added to all other terminations or expirations
during such quarter;

 

(d)                                 Any
material adverse change with respect to the business, assets, liabilities,
financial position, or results of operations of any of the Borrower Parties,
other than changes in the ordinary course of business which have not had and
are not likely to have a Materially Adverse Effect;

 

90

 

(e)                                  Any
Default or Event of Default, or any default by any of the Borrower Parties
under any agreement (other than this Agreement) to which any of the Borrower
Parties is party or by which any of their respective properties is bound, or
the occurrence of any other event which could have a Materially Adverse Effect,
giving in each case the details thereof and specifying the action proposed to
be taken with respect thereto; and

 

(f)                                    The
occurrence of any Reportable Event or “prohibited transaction” (as such term is
defined in Section 406 of ERISA or Section 4975 of the Code) which is
not statutorily or administratively exempt under Sections 407 or 408 of ERISA
or Section 4975 of the Code with respect to any Plan of the Borrower or
any of its Subsidiaries or any of their respective ERISA Affiliates or the
institution or threatened institution by the PBGC of proceedings under
Section 4042 of ERISA to terminate or to partially terminate any such Plan
or the commencement or, to the Borrower’s knowledge, threatened commencement of
any litigation regarding any such Plan or naming it or the trustee of any such
Plan with respect to such Plan.

 

ARTICLE 8 - Negative Covenants

 

So long as any of the
Obligations is outstanding and unpaid or the Borrower has a right to borrow
hereunder (whether or not the conditions to borrowing have been or can be
fulfilled) and unless the Majority Lenders shall otherwise give their prior
consent in writing:

 

Section 8.1 Indebtedness.  The Borrower shall not, and shall not permit
any of the Guarantors to, create, assume, incur or otherwise become or remain
obligated in respect of, or permit to be outstanding any Indebtedness except:

 

(a)                                  Indebtedness
under this Agreement and the other Loan Documents (including, without
limitation, any Incremental Facility Indebtedness);

 

(b)                                 accounts
payable, accrued expenses, customer advance payments and other current
liabilities (other than Indebtedness For Money Borrowed) incurred in the
ordinary course of business;

 

(c)                                  Capitalized
Lease Obligations of the Borrower Parties in an aggregate amount over the
remainder of the term of such obligations not to exceed $60,000,000  at
any one time outstanding;

 

(d)                                 Indebtedness
with respect to Interest Hedge Agreements having aggregate notional amounts not
to exceed the Commitments, provided that the term of any such Interest Hedge
Agreement does not extend beyond the Final Maturity Date;

 

91

 

(e)                                  intercompany
Indebtedness among any of the Borrower Parties;

 

(f)                                    any
Indebtedness issued in connection with an Authorized Debt Issuance;

 

(g)                                 any
unsecured intercompany Indebtedness between the Borrower and any FUSE Company
issued to fund any prepayment of the Loans required pursuant to
Section 2.6(a) or Section 2.6(c) hereof with respect to such FUSE
Company, provided that such Indebtedness shall be subordinated to the
Obligations on terms and conditions the same in all material respects to the
subordination provisions set forth in the Subordination of Intercompany
Obligations Agreement; and

 

(h)                                 any
Accrued Tax Liabilities.

 

Section 8.2 Investments.  The Borrower shall not and, shall not permit
any of the Guarantors to, make any Investment, except that:

 

(a)                                  the
Borrower Parties may purchase or otherwise acquire and own Cash Equivalents;

 

(b)                                 any
of the Borrower Parties may make Investments in any of the other Borrower
Parties;

 

(c)                                  so
long as no Default or Event of Default then exists or would be caused thereby
and in each case subject to compliance with Section 6.14 hereof, the
Borrower Parties may do the following:

 

(i)                           make
cash Investments (other than Investments in any of the GE Subsidiaries) in an
aggregate amount not to exceed during any year, together with the amount of any
Acquisitions made during such year under Section 8.5(d)(v)(B) hereof, the
Available Basket Amount applicable to such period; provided, however,
(A) the aggregate amount of Investments made pursuant to this
Section 8.2(c)(i) in the MSG Companies, the Rainbow DBS Companies and any
other Company engaged primarily in the direct broadcast distribution business
shall not exceed $100,000,000 during the term of this Agreement, and (B) the
aggregate amount of Investments made pursuant to this Section 8.2(c)(i),
directly or indirectly, in CVC and CSC Holdings, together with (I) the amount
of any Investments in CVC and CSC Holdings made pursuant to
Section 8.2(c)(ii) below, (II) the amount of any Restricted Payments to
CSC Holdings made pursuant to Section 8.7(c)(vi) hereof, and (III) in the
event the stock or other equity interests in any Rainbow DBS Company shall be
distributed to CSC Holdings pursuant to Section 8.7(c)(iv) hereof, the
aggregate amount of Investments made pursuant to this Section 8.2(c)(i) in
such Rainbow DBS Company on or before the date of such distribution, shall not
at any time exceed $100,000,000 during the term of this Agreement;

 

92

 

(ii)                        subject
only to the limitation on Investments in CVC and CSC Holdings set forth in the
foregoing clause (c)(i)(B), make cash Investments (other than Investments in
any of the GE Subsidiaries) funded by Net Cash Proceeds received in connection
with (A) the issuance of any New Affiliated Equity or (B) any Authorized Debt
Issuance, in each case to the extent such Net Cash Proceeds are not used by the
Borrower Parties for any other purpose;

 

(iii)                     make
Investments (other than Investments in any of the GE Subsidiaries) made solely
using capital stock or other securities of CVC;

 

(iv)                    make
Investments in any of the GE Subsidiaries funded by Net Cash Proceeds received
in connection with the issuance of any New Affiliated Equity for the sole
purpose of making, and in amounts not to exceed the amounts of, any payments
due with respect to the GE Stock Monetization Transaction; and

 

(v)                       after
the sale, transfer or other disposition of any stock or other equity interests
in any FUSE Company and the release of the Guaranty of the Obligations from
such FUSE Company and the Administrative Agent’s Lien in the properties and
assets of such FUSE Company, but only so long as the Borrower shall continue to
own, directly or indirectly, a portion of the stock or other equity interests
of such FUSE Company, make (A) cash Investments in such FUSE Company in an
aggregate amount not to exceed one hundred percent (100%) of the Net Cash
Proceeds received in connection with such sale, transfer or other disposition,
and (B) non-cash Investments in such FUSE Company consisting of any non-cash
consideration received by any Borrower Party in connection with the sale,
transfer or other disposition of any stock or other equity interests of such
FUSE Company, in each case promptly following the consummation of such sale,
transfer or other disposition.

 

Section 8.3 Limitation on
Liens.  The Borrower shall not, and
shall not permit any of the Guarantors to, create, assume, incur or permit to
exist or to be created, assumed, incurred or permitted to exist, directly or
indirectly, any Lien on any of its properties or assets, whether now owned or
hereafter acquired, except for Permitted Liens.  Except for the agreement set forth in the foregoing sentence,
none of the Borrower Parties shall agree with any other Person not to grant a
Lien on any material portion of their respective assets to secure Indebtedness.

 

Section 8.4 Amendment and
Waiver.  The Borrower shall not, and
shall not permit any of the Guarantors to, enter into any amendment, or agree
to or accept any waiver, (a) which would materially adversely affect the rights
of the Borrower, the MGM Operating Companies and the Credit Parties, or any of
them, of any of the provisions of (i) the Constituent Documents of any of the
Borrower Parties and (ii) any Material Affiliate Contracts, (b) which would
have a Materially Adverse Effect, of any of the provisions of any agreement
between any of the Borrower Parties, on the one hand, and any of its
Affiliates, on the other hand, and (c) of any of the provisions of any of the 

 

93

 

Material Affiliate Contracts which would (i) accelerate the payment of
amounts due thereunder by more than one (1) year and (ii) cause the aggregate
amount of all accelerated payments thereunder (together with any prior
accelerated payments) to exceed $15,000,000.

 

Section 8.5 Liquidation;
Disposition or Acquisition of Assets.

 

(a)                                  The
Borrower shall not, and shall not permit any of the Guarantors to, at any time,
(i) liquidate or dissolve itself (or suffer any liquidation or dissolution) or
otherwise wind up, or (ii) sell, lease, abandon, transfer, exchange or
otherwise dispose of any assets (not constituting capital stock, partnership
interests or other equity interests) or business in excess of $10,000,000 in
the aggregate during the term of this Agreement, or (iii) enter into any merger
or consolidation, except, in each case, for (x) sales, dispositions, mergers,
consolidations or exchanges by any Guarantor of its businesses, assets or
rights to or with another Borrower Party, and (y) sales or dispositions in the
ordinary course of business by any of the Borrower Parties of obsolete or
worn-out property or other property reasonably determined by the management of
the disposing Company to be not used or useful in its business.

 

(b)                                 The
Borrower shall not, and shall not permit any of the Guarantors, RRH I or RRH II
to, sell, lease, abandon, transfer, exchange or otherwise dispose of any assets
constituting capital stock, partnership interests or other equity interests of
any of RRH I, RRH II, RRH, RAH, RNSH, any member of the Mag Rack Group or any
other Company constituting a Material Subsidiary, unless in any such case the
Arrangers shall have provided their prior written consent to such transaction,
except that (i) the Borrower may dispose of its interest in any Rainbow DBS
Company, and (ii) the Borrower Parties may dispose of all or a portion of their
equity interests in each of the FUSE Companies to a non-Affiliate, subject to
compliance with Section 2.6(c) and Section 6.14 hereof, but only to
the extent that upon consummation of any such transaction the applicable FUSE Companies
shall cease to be Borrower Parties for purposes of this Agreement, in each case
without the consent of the Arrangers.

 

(c)                                  The
Borrower shall not, and shall not permit any of the Guarantors to, at any time,
issue any capital stock, partnership interests or other equity interests in any
of the Borrower Parties, except for (i) the issuance of capital stock,
partnership interests or other equity interests in the Borrower in connection
with the issuance of any New Affiliated Equity, (ii) with the consent of the
Arrangers and subject to compliance with Section 6.14 hereof, any FUSE
Company may issue additional equity interests in itself to a non-Affiliate, and
(iii) notwithstanding the foregoing clause (ii), to the extent that upon
consummation of any such issuance the applicable FUSE Company shall cease to be
a Borrower Party for purposes of this Agreement, such FUSE Company may issue
additional equity interest in itself to a non-Affiliate subject to compliance
with Section 2.6(a) and Section 6.14 hereof.

 

94

 

(d)                                 The
Borrower shall not, and shall not permit any of the Guarantors to, at any time,
acquire assets, property, stock or the business of any other Person except for
(i) Capital Expenditures in the ordinary course of business of the applicable
Borrower Parties, (ii) purchases of assets in the ordinary course of business
of the applicable Borrower Parties, (iii) Film Rights Agreements, (iv)
Permitted Investments, and (v) so long as no Default or Event of Default then
exists or would be caused thereby and subject to compliance with
Section 6.14 hereof, (A) Acquisitions consummated solely in exchange for
capital stock of CVC, (B) Acquisitions in an aggregate amount not to exceed
during any year, together with the amount of any Investments made under
Section 8.2(c)(i) hereof during such year, the Available Basket Amount
applicable to such period, and (C) Acquisitions funded by Net Cash Proceeds
received in connection with (I) the issuance of any New Affiliated Equity or
(II) any Authorized Debt Issuance, in each case to the extent such Net Cash
Proceeds are not used by the Borrower Parties for any other purpose.

 

Section 8.6 Limitation on
Guaranties.  The Borrower shall not,
and shall not permit any of the Guarantors to, at any time guarantee, or
assume, be obligated with respect to, or permit to be outstanding any Guaranty
of, any obligation of any other Person other than (a) under any Loan Document,
(b) obligations under agreements to indemnify Persons who have issued bid or
performance bonds or letters of credit issued in lieu of such bonds in the
ordinary course of business of such Borrower Party securing performance by any
Borrower Party of activities otherwise permissible hereunder, (c) a guaranty by
endorsement of negotiable instruments for collection in the ordinary course of
business, (d) the guaranty obligations of the Borrower arising in respect of
the Cubs Guaranty and the Sportsvision Guaranty, so long as (i) such
obligations do not exceed (x) in the case of the Cubs Guaranty, $119,250,000,
and (y) in the case of the Sportsvision Guaranty, $330,750,000, in each case at
any time during the term of this Agreement without the prior written consent of
the Arrangers, (ii) such obligations are unsecured, (iii) the terms of the Cubs
Guaranty and the Sportsvision Guaranty, and the programming rights agreements
underlying such Guaranties, do not provide for acceleration of the obligations
thereunder, and (iv) none of the terms of the Cubs Guaranty and the Sportsvision
Guaranty, and the programming rights agreements underlying such Guaranties,
shall be amended or modified during the term of this Agreement, without the
prior written consent of the Arrangers, if the effect of such amendment or
modification would be to increase the amount of the Borrower’s obligations
under either the Cubs Guaranty or the Sportsvision Guaranty, (e) Guaranties
constituting Investments permitted to be made pursuant to Section 8.2(c),
(f) unsecured Guaranties of the Borrower’s obligations in respect of any
Authorized Debt Issuance, and (g) those Guaranties described on Schedule 8.6
attached hereto (as such schedule may be amended by the Borrower from time
to time), undertaken in the ordinary course of business of the Borrower
Parties, including, without limitation, Guaranties issued for purposes of
securing (i) programming or transponder rights, (ii) production, sports team
and product related arrangements, (iii) affiliation agreements, (iv)
advertising representation agreements, marketing and service arrangements, or
(v) real estate leases, and extensions, 

 

95

 

replacements and modifications of the foregoing, provided that
the aggregate amount of all such Guaranties under this Section 8.6(g) at
any time outstanding does not exceed $45,000,000.

 

Section 8.7 Restricted
Payments and Purchases.  The
Borrower shall not, and shall not permit any of the Guarantors to, directly or
indirectly, declare or make any Restricted Payment or Restricted Purchase,
except that (a) the Guarantors may make Restricted Payments to the Borrower,
(b) the Borrower may make payments in respect of Employee Stock Incentive
Expense, and (c) so long as no Default or Event of Default then exists or would
be caused thereby, the Borrower may (i) pay to CVC and CSC Holdings amounts due
in respect of the Accrued Tax Liabilities under, and in accordance with, the
Tax Sharing Policy; (ii) make regularly scheduled payments of interest in
respect of Indebtedness outstanding in connection with an Authorized Debt
Issuance; (iii) make Restricted Payments, subject to the Subordination of
Intercompany Obligations Agreement, for payment of fees under the Consulting
Agreement and for reimbursement of services to the extent set forth the
Services Agreement; (iv) distribute the stock or other equity interests owned
by the Borrower in any Rainbow DBS Company, or any Net Cash Proceeds received
by the Borrower in connection with any sale of any Rainbow DBS Company, to CSC
Holdings; (v) distribute the stock or other equity interests owned by the
Borrower in any MSG Company to CSC Holdings; (vi) make cash distributions to
CSC Holdings funded by the Net Cash Proceeds received in connection with any
Authorized Debt Issuance concurrently with the closing of such Authorized Debt
Issuance to the extent such Net Cash Proceeds are not used by the Borrower
Parties for any other purpose, provided, however, the aggregate
amount of cash distributions made to CSC Holdings pursuant to this clause (vi),
together with (A) the aggregate amount of Investments made in CVC and CSC
Holdings pursuant to Section 8.2(c) hereof and (B) in the event the stock
or other equity interests in any Rainbow DBS Company shall be distributed to
CSC Holdings pursuant to the foregoing clause (iv), the aggregate amount of
Investments made pursuant to Section 8.2(c)(i) hereof in such Rainbow DBS
Company on or before the date of such distribution, shall not at any time
exceed $100,000,000 during the term of this Agreement; (vii) make cash
distributions to CSC Holdings funded by cash on the balance sheets of AMC, IFC
and the RPP Regional Sports Networks as of December 31, 2003, in an
aggregate amount not to exceed $100,000,000 substantially contemporaneously
with year-end to the extent such cash is not used by the Borrower Parties for
any other purpose; and (viii) make cash distributions to CSC Holdings
substantially contemporaneously with the Agreement Date from the proceeds of
the Incremental Term C Loans in an aggregate amount not to exceed $400,000,000
to the extent not used by the Borrower Parties for any other purpose.

 

Section 8.8 Total Leverage
Ratio.  The Borrower shall not
permit, (a) as of the end of any fiscal quarter or (b) as of the date of any
Advance increasing the Obligations hereunder, the Total Leverage Ratio (after
giving effect to such Advance, if applicable) to exceed the applicable ratio
for calculation dates during the periods set forth below:

 

96

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
  Agreement
  Date through September 30, 2004

  	
   

  	
  5.50 to 1.00

  	
   

  
	
  October 1,
  2004 through March 31, 2005

  	
   

  	
  5.25 to 1.00

  	
   

  
	
  April 1,
  2005 through September 30, 2005

  	
   

  	
  4.75 to 1.00

  	
   

  
	
  October 1,
  2005 through March 31, 2006

  	
   

  	
  4.50 to 1.00

  	
   

  
	
  April 1,
  2006 and thereafter

  	
   

  	
  4.25 to 1.00

  	
   

  

 

Section 8.9 Senior Leverage
Ratio.  The Borrower shall not
permit, (a) as of the end of any fiscal quarter, or (b) as of the date of any
Advance increasing the Obligations hereunder, the Senior Leverage Ratio (after
giving effect to such Advance, if applicable) to exceed the applicable ratio
for calculation dates during the periods set forth below:

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
  Agreement
  Date through June 30, 2004

  	
   

  	
  4.50 to 1.00

  	
   

  
	
  July 1,
  2004 through September 30, 2004

  	
   

  	
  4.25 to 1.00

  	
   

  
	
  October 1,
  2004 through March 31, 2005

  	
   

  	
  4.00 to 1.00

  	
   

  
	
  April 1,
  2005 through September 30, 2005

  	
   

  	
  3.75 to 1.00

  	
   

  
	
  October 1,
  2005 through June 30, 2006

  	
   

  	
  3.25 to 1.00

  	
   

  
	
  July 1,
  2006 through September 30, 2007

  	
   

  	
  3.00 to 1.00

  	
   

  
	
  October 1,
  2007 through June 30, 2008

  	
   

  	
  2.50 to 1.00

  	
   

  
	
  July 1,
  2008 and thereafter

  	
   

  	
  2.00 to 1.00

  	
   

  

 

Section 8.10                                Interest
Coverage Ratio.  The Borrower shall
not permit, as of the end of any fiscal quarter ending during the term of this
Agreement, the Interest Coverage Ratio to be less than 3.50 to 1.00.

 

Section 8.11                                Debt
Service Ratio. The Borrower shall not permit, as of the end of any fiscal
quarter ending during the term of this Agreement, the Debt Service Ratio to be
less than the applicable ratio for the fiscal quarters ending during the
periods set forth below:

 

97

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
  Agreement
  Date through December 31, 2006

  	
   

  	
  2.00 to 1.00

  	
   

  
	
  January 1,
  2007 and thereafter

  	
   

  	
  1.10 to 1.00

  	
   

  

 

Section 8.12                                Affiliate
Transactions. The Borrower shall not, and shall not permit any of the
Guarantors to, at any time engage in or amend any transaction with any
Affiliate, or make an assignment or other transfer of any of its assets to any
Affiliate, on terms less advantageous to such Borrower Party than would be the
case if such transaction had been effected with a non-Affiliate, in each case
other than as set forth on Schedule 8.11 attached hereto or as
otherwise permitted under this Agreement.

 

Section 8.13                                Real
Estate.  None of the Borrower
Parties shall purchase, or become obligated to purchase, real estate in an
amount in excess of $20,000,000  in the aggregate during the term of this
Agreement.

 

Section 8.14                                ERISA
Liabilities.  The Borrower shall not
fail, and shall cause each of its Subsidiaries not to fail, to make all
material contributions in accordance with the terms of their respective Plans
and to meet all of the applicable minimum funding requirements of ERISA and the
Code, and, to the extent that the assets of such Plans would be less than an
amount sufficient to provide all accrued benefits payable under such Plans
determined on an ongoing basis, shall make the maximum deductible contributions
allowable under the Code.  Neither the
Borrower nor any of its Subsidiaries shall incur any material withdrawal
liability with respect to any Multiemployer Plan.  Neither the Borrower nor any of its Subsidiaries shall make any
commitment to provide post-employment health or life insurance benefits, except
as required by Section 601 through 609 of ERISA, Section 4980(B) of
the Code and applicable state law, nor terminate any Plan if its termination
would reasonably be expected to have a Materially Adverse Effect.

 

Section 8.15                                Sales
and Leasebacks.  None of the
Borrower Parties will enter into any arrangement, directly or indirectly, with
any Person whereby any such Borrower Party shall sell or transfer any property,
real or personal, whether now owned or hereafter acquired, and whereby any such
Borrower Party shall then or thereafter rent or lease as lessee such property
or any part thereof or other property which any such Borrower Party intends to
use for substantially the same purpose or purposes as the property sold or
transferred, unless in each case, the sale or transfer of such property is
permitted by Section 8.5 hereof.

 

Section 8.16                                Negative
Pledge.  The Borrower shall not, and
shall not permit any of the Guarantors to, directly or indirectly, enter into
any agreement (other than the Loan Documents) with any Person that prohibits or
restricts or limits the ability of any such Borrower Party to create, incur,
pledge or suffer to exist any Lien upon any 

 

98

 

of its respective assets, or restricts the ability of any Guarantor to
make Restricted Payments to the Borrower.

 

ARTICLE 9 - Default

 

Section 9.1 Events of
Default.  Each of the following
shall constitute an Event of Default, whatever the reason for such event and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment or order of any court or any order, rule, or
regulation of any governmental or non-governmental body:

 

(a)                                  Any
representation or warranty made under this Agreement shall prove incorrect or
misleading in any material respect when made or deemed to have been made;

 

(b)                                 The
Borrower shall default (i) in the payment of any interest and fees payable
hereunder or under the other Loan Documents and such Default shall not have
been cured by payment of such overdue amounts in full within five (5) days from
the date such payment became due, or (ii) in the payment of any principal of
the Loans when due hereunder or under the other Loan Documents;

 

(c)                                  The
Borrower shall default in the performance or observance of any agreement or
covenant contained in Article 8;

 

(d)                                 There
shall occur any Default in the performance or observance of any agreement or
covenant or breach of any representation or warranty contained in any of the
Loan Documents (other than this Agreement or as otherwise provided in
Section 9.1 of this Agreement), which shall not be cured to the Majority
Lenders’ satisfaction within the applicable cure period, if any, provided for
in such Loan Document;

 

(e)                                  The
Borrower shall default in the performance or observance of any other agreement
or covenant contained in this Agreement not specifically referred to elsewhere
in this Section 9.1, and such Default shall not be cured to the Majority
Lenders’ satisfaction within a period of thirty (30) days from the occurrence
of such default;

 

(f)                                    There
shall have occurred a Change of Control (notwithstanding anything to the
contrary contained in this Agreement, any direct or indirect amendment to, or
waiver of, this Section 9.1(f) or the definition of “Change of Control”
shall require the written consent of all of the Lenders to the extent such
amendment or waiver shall occur in connection with, or as a result of, the
Rainbow DBS Spin-Off);

 

99

 

(g)                                 Subject
to subsection (h) below, the aggregate number of Paying Affiliated Basic
Subscribers of the Borrower Parties shall at any time be less than seventy-five
percent (75%) of the aggregate number of such Paying Affiliated Basic
Subscribers as of December 31, 2002, if such loss of Paying Basic
Affiliated Subscribers would have a Materially Adverse Effect and if such loss
of Paying Affiliated Basic Subsidiaries is not cured by the creation of new
Paying Affiliated Basic Subscribers of the Borrower Parties within sixty (60)
days after the occurrence thereof;

 

(h)                                 The
aggregate number of Paying Affiliated Basic Subscribers of the Borrower Parties
shall at any time be less than seventy percent (70%) of the aggregate number of
such Paying Affiliated Basic Subscribers as of December 31, 2002, if such
loss of Paying Affiliated Basic Subscribers would have a Materially Adverse
Effect;

 

(i)                                     There
shall be entered a decree or order for relief in respect of the Borrower, any
of its Material Subsidiaries, CSC Holdings or CVC under the Bankruptcy Code, or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator,
or similar official of the Borrower, any of its Material Subsidiaries, CSC
Holdings or CVC, or of any substantial part of their respective properties, or
ordering the winding-up or liquidation of the affairs of any of the Borrower,
any of its Material Subsidiaries, CSC Holdings or CVC, or an involuntary
petition shall be filed against any of the Borrower, any of its Material
Subsidiaries, CSC Holdings or CVC and a temporary stay entered, and (i) such
petition and stay shall not be diligently contested, or (ii) any such petition
and stay shall continue undismissed for a period of thirty (30) consecutive
days;

 

(j)                                     The
Borrower, any of its Material Subsidiaries, CSC Holdings or CVC shall file a
petition, answer, or consent seeking relief under the Bankruptcy Code, or the
Borrower, any of its Material Subsidiaries, CSC Holdings or CVC shall consent
to the institution of proceedings thereunder or to the filing of any such
petition or to the appointment or taking of possession of a receiver,
liquidator, assignee, trustee, custodian, sequestrator, or other similar
official of the Borrower, any of its Material Subsidiaries, CSC Holdings or
CVC, or of any substantial part of their respective properties, or the Borrower,
any of its Material Subsidiaries, CSC Holdings or CVC shall fail generally to
pay their respective debts as they become due, or the Borrower, any of its
Material Subsidiaries, CSC Holdings or CVC shall take any action in furtherance
of any such action;

 

(k)                                  A
final judgment shall be entered by any court against any of the Borrower
Parties for the payment of money which exceeds $5,000,000, or a warrant of
attachment or execution or similar process shall be issued or levied against
property of any of the Borrower Parties which, together with all other property
of any of the Borrower Parties subject to other such process, exceeds in value
$5,000,000 in the aggregate, and if, within thirty (30) days after the entry,
issue, or levy thereof, such 

 

100

 

judgment, warrant,
or process shall not have been paid or discharged or stayed pending appeal, or
if, after the expiration of any such stay, such judgment, warrant, or process
shall not have been paid or discharged;

 

(l)                                     There
shall be at any time (i) any “accumulated funding deficiency” (as defined in
Section 302 of ERISA or in Section 412 of the Code) with respect to
any Plan maintained by the Borrower or any of its Subsidiaries, or to which the
Borrower or any of its Subsidiaries, has any material liabilities, or any trust
created thereunder, or (ii) a trustee appointed by a United States District
Court to administer any such Plan under Section 4042 of ERISA, or (iii)
proceedings instituted by the PBGC to terminate any such Plan under
Section 4042 of ERISA, or (iv) incurred by the Borrower or any of its
Subsidiaries any liability to the PBGC in connection with the distress
termination of any such Plan under Section 4041(c) of ERISA; or any
fiduciary of, or party in interest to, any Plan or trust created under any Plan
of the Borrower or any of its Subsidiaries shall engage in a “prohibited
transaction” (as such term is defined in Section 406 of ERISA or
Section 4975 of the Code) which would subject the Borrower or any of its
Subsidiaries to a tax on “prohibited transactions” imposed by Section 4975
of the Code, or (v) any fiduciary of, or party in interest to, any Plan or
trust created under any Plan of the Borrower or any of its Subsidiaries shall
engage in a breach of fiduciary responsibility or knowingly participate in any
violation of ERISA; or any Plan of the Borrower or any of its Subsidiaries
which is intended to qualify under Section 401(a) of the Code shall have
its application for or a favorable IRS determination with respect to the
qualification requirements under such section of the Code denied by the
IRS, or have the IRS revoke its previously issued determination; and in each
case, such event or condition, together with other such events or conditions,
if any, would subject the Borrower and its Subsidiaries to any tax, liability
or penalty in excess of $5,000,000 in the aggregate;

 

(m)                               There
shall occur any default under any material indenture, agreement, or instrument
evidencing Indebtedness For Money Borrowed of any of the Borrower Parties
(including, without limitation, any Authorized Debt Issuance);

 

(n)                                 All
or any portion of any Loan Document shall at any time and for any reason be
declared to be null and void or otherwise unenforceable by a court of competent
jurisdiction in a suit with respect to such Loan Document, or a proceeding
shall be commenced by any governmental authority having jurisdiction over any
of the Borrower Parties involving a legitimate dispute or a proceeding shall be
commenced by any of the Borrower Parties, in either case seeking to establish
the invalidity or unenforceability of any Loan Document (exclusive of questions
of interpretation of any provision thereof), or any of the Borrower Parties
shall deny that it has any liability or obligation for the payment of principal
or interest purported to be created under any Loan Document;

 

101

 

(o)                                 There
shall occur a default by any of the Borrower Parties (if such default is not
cured or waived within any applicable grace period) under any Material MSO
Agreement, which default would have a Materially Adverse Effect; or

 

(p)                                 There
shall exist any default under, or any cancellation of (without a
contemporaneous replacement, or if interim substitute arrangements have been
made with respect thereto, replacement within forty-five (45) days, of), any
Transponder Lease Agreement if such default is not cured within any applicable
cure period and if such default or cancellation, as applicable, would have a
Materially Adverse Effect;

 

Notwithstanding anything
to the contrary contained in the foregoing, no Event of Default shall be deemed
to have occurred as a result of any restatement or prior period adjustment made
in connection with, or as a result of, the investigation of improper expense
accruals at the Borrower and its Subsidiaries, which accruals were disclosed by
CVC or the Borrower in public filings made with the SEC prior to the Agreement
Date, which restatement or adjustment would not constitute a Restatement.

 

Section 9.2 Remedies.  If an Event of Default shall have occurred
and shall be continuing:

 

(a)                                  With
the exception of an Event of Default specified in Sections 9.1(i) or 9.1(j)
hereof, the Administrative Agent, at the direction of the Majority Lenders,
shall (i) terminate the Commitments and any obligations of the Swing Loan
Lender to advance the Swing Loan Committed Amount hereunder and (ii) declare
the principal of and interest on the Loans and all other Obligations to be
forthwith due and payable without presentment, demand, protest, or notice of
any kind, all of which are hereby expressly waived, anything in this Agreement
or in the other Loan Documents to the contrary notwithstanding, or both.

 

(b)                                 Upon
the occurrence and continuance of an Event of Default specified in Sections
9.1(i) or 9.1(j) hereof, such principal, interest, and other obligations shall
thereupon and concurrently therewith become due and payable, and the
Commitments shall forthwith terminate and any obligations of the Swing Loan
Lender to advance the Swing Loan Committed Amount shall forthwith terminate,
all without any action by the Credit Parties or the Majority Lenders and
without presentment, demand, protest, or other notice of any kind, all of which
are expressly waived, anything in this Agreement or in the other Loan Documents
to the contrary notwithstanding.

 

(c)                                  With
respect to any outstanding Letters of Credit with respect to which presentment
for honor shall not have occurred at the time of any acceleration of the
Obligations (other than obligations with respect to Interest Hedge Agreements)
pursuant to this Section 9.2, the Borrower shall promptly upon demand by
any Issuing Bank deposit in an account of such Issuing Bank for the benefit of
such Issuing Bank an amount equal to the aggregate undrawn and unexpired amount
of each outstanding Letter of Credit issued by such Issuing Bank, which cash
will be held by such 

 

102

 

Issuing Bank and
applied to the payment of drafts drawn under such Letters of Credit and the
unused portion thereof after such Letters of Credit shall have expired or been
fully drawn upon, if any, shall be applied to repay other Obligations hereunder
in the manner set forth in Section 2.12(b) hereof.

 

(d)                                 The
Arrangers and the Administrative Agent, with the concurrence of the Majority
Lenders, shall exercise all of the post-default rights granted to it and to
them under the Loan Documents or under Applicable Law.

 

(e)                                  The
rights and remedies of the Arrangers and the Administrative Agent and the
Lenders hereunder shall be cumulative, and not exclusive.

 

ARTICLE 10 - The
Agents

 

Section 10.1                                Appointment
and Authorization.  Each Lender
hereby irrevocably appoints and authorizes, and hereby agrees that it will
require any transferee of any of its interest in its Commitments and Loans
irrevocably to appoint and authorize, each of the Agents to take such actions
as its agent on its behalf and to exercise such powers hereunder and under the
Security Documents as are delegated by the terms hereof and thereof, together
with such powers as are reasonably incidental thereto and as may be provided by
any Loan Document.  Any action taken by
any of the Agents under this Agreement or any Loan Document shall be taken for
itself and for the ratable benefit of each of the other Credit Parties, except
as may be otherwise expressly provided in this Agreement or in any other Loan
Document.  None of the Agents nor any of
their respective Lender Affiliates, directors, officers, employees, or agents
shall be liable for any action taken or omitted to be taken by any of them
hereunder or in connection herewith, except for its or their own gross
negligence or willful misconduct. 
Neither of the Co-Syndication Agents and neither of the Co-Documentation
Agents shall have any obligations under this Agreement in such capacity.

 

Section 10.2                                Delegation
of Duties.  The Agents may execute
any of their respective duties under the Loan Documents by or through agents or
attorneys selected by them, respectively, using reasonable care and shall be
entitled to advice of counsel concerning all matters pertaining to such
duties.  None of the Agents shall be
responsible to any of the Lenders for the negligence or misconduct of any
agents or attorneys selected by any of them, respectively, with reasonable
care.

 

Section 10.3                                Interest
Holders.  The Agents may treat each
Lender, or the Person designated in the last notice filed with the
Administrative Agent under this Section 10.3, as the holder of all of the
interests of such Lender in its Commitments and its Loans until written notice
of transfer, signed by such Lender (or the Person designated in the last notice
filed with the Administrative Agent) and by the Person designated in such
written notice of transfer, in form and substance satisfactory to the
Administrative Agent, shall have been filed with the Administrative Agent.

 

103

 

Section 10.4                                Consultation
with Counsel.  Each of the Agents
may consult with legal counsel selected by it and shall not be liable for any
action taken or suffered by it in good faith in reliance thereon.

 

Section 10.5                                Documents.  None of the Agents shall be under any duty
to examine, inquire into, or pass upon the validity, effectiveness, or
genuineness of this Agreement or any instrument, document, or communication
furnished pursuant hereto or in connection herewith, and each of the Agents
shall be entitled to assume that they are valid, effective, and genuine, have
been signed or sent by the proper parties, and are what they purport to be.

 

Section 10.6                                Security
Documents.  The Administrative
Agent, as administrative agent hereunder and under the Security Documents, is
hereby authorized to act on behalf of the Credit Parties, in its own capacity
and through other agents and sub-agents appointed by it with due care, under
the Security Documents and to file UCC-1 financing statement forms in
connection therewith, provided that, unless otherwise expressly provided in
this Agreement, the Administrative Agent shall not agree to the release of any
Collateral except in compliance with Section 12.12 hereof.  In connection with its role as secured party
with respect to the Collateral hereunder, the Administrative Agent shall act as
administrative agent, for itself and for the benefit of the Credit Parties, and
such role as administrative agent shall be disclosed on all appropriate
accounts, certificates, filings, mortgages, and other collateral documentation.

 

Section 10.7                                Arrangers
and Affiliates.  With respect to the
Commitments and the Loans, any Lender which is a Lender Affiliate of any Agent
shall have the same rights and powers hereunder as any other Lender, and each
Agent and its respective Lender Affiliates may accept deposits from, lend money
to, and generally engage in any kind of business with the Borrower or any
Lender Affiliates of, or Persons doing business with, the Borrower, as if it
were not affiliated with such Agent and without any obligation to account
therefor.

 

Section 10.8                                Responsibility
of the Agents.  The duties and
obligations of the Agents under this Agreement are only those expressly set
forth in this Agreement.  Each of the
Agents shall be entitled to assume that no Default or Event of Default has
occurred and is continuing unless it has actual knowledge, or has been notified
by the Borrower, of such fact, or has been notified by a Lender that such
Lender considers that a Default or an Event of Default has occurred and is
continuing, and such Lender shall specify in detail the nature thereof in
writing.  None of the Agents shall be
liable to any of the Lenders hereunder for any action taken or omitted to be
taken except for its own gross negligence or willful misconduct.  The Administrative Agent shall provide each
Lender with copies of such documents received from the Borrower as such Lender
may reasonably request.

 

104

 

Section 10.9                                Action
by Agents.

 

(a)                                  Except
for action requiring the approval of the Majority Lenders, the Super-Majority
Lenders or all of the Lenders, as the case may be, each Agent shall be entitled
to use its discretion with respect to exercising or refraining from exercising
any rights which may be vested in it by, and with respect to taking or
refraining from taking any action or actions which it may be able to take under
or in respect of, this Agreement, unless such Agent shall have been instructed
by the Majority Lenders, the Super-Majority Lenders or all the Lenders, as the
case may be, to exercise or refrain from exercising such rights or to take or
refrain from taking such action, provided that such Agent shall not exercise
any rights under Section 9.2(a) of this Agreement without the request of
the Majority Lenders.  None of the
Agents shall incur any liability under or in respect of this Agreement with
respect to anything which it may do or refrain from doing in the reasonable
exercise of its judgment or which may seem to it to be necessary or desirable
in the circumstances, except for its own gross negligence or willful
misconduct.

 

(b)                                 None
of the Agents shall be liable to the Lenders, or any of them, in acting or
refraining from acting under this Agreement in accordance with the instructions
of the Majority Lenders, the Super-Majority Lenders or all the Lenders, as the
case may be, and any action taken or failure to act pursuant to such
instructions shall be binding on all Lenders.

 

Section 10.10                          Notice
of Default or Event of Default.  In
the event that any of the Credit Parties shall acquire actual knowledge, or
shall have been notified in writing, of any Default or Event of Default, such
Credit Party shall promptly notify the other Credit Parties, and each Agent
shall take such action and assert such rights under this Agreement as the Majority
Lenders shall request in writing, and none of the Agents shall be subject to
any liability by reason of its acting pursuant to any such request.  If the Majority Lenders shall fail to
request an Agent to take action or to assert rights under this Agreement in
respect of any Default or Event of Default within ten (10) days after their
receipt of the notice of any Default or Event of Default from any Credit Party,
or shall request inconsistent action with respect to such Default or Event of
Default, such Agent may, but shall not be required to, take such action and
assert such rights (other than rights under Article 9 hereof) as it deems
in its discretion to be advisable for the protection of the Lenders, except
that, if the Majority Lenders have instructed such Agent not to take such
action or assert such right, in no event shall such Agent act contrary to such
instructions.

 

Section 10.11                          Responsibility
Disclaimed.  None of the Agents
shall be under any liability or responsibility whatsoever as such:

 

(a)                                  To
the Borrower or any other Person or entity as a consequence of any failure or
delay in performance by or any breach by, any Lender or Lenders of any of its
or their obligations under this Agreement;

 

105

 

(b)                                 To
any Lender or Lenders, as a consequence of any failure or delay in performance
by, or any breach by, the Borrower or any other obligor of any of its
obligations under this Agreement or any of the other Loan Documents; or

 

(c)                                  To
any Lender or Lenders for any statements, representations, or warranties in
this Agreement, or any other document contemplated by this Agreement or any
information provided pursuant to this Agreement, any of the other Loan
Documents, or any other document contemplated by this Agreement, or for the
validity, effectiveness, enforceability, or sufficiency of this Agreement, any
of the other Loan Documents, or any other document contemplated by this
Agreement.

 

Section 10.12                          Indemnification.  Each of the Lenders agrees to indemnify each
of the Agents in their respective capacities as such (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so) pro rata according to their respective Commitment Percentages, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including fees and expenses of
experts, agents, consultants and counsel), or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against
such Agent in any way relating to or arising out of this Agreement, any of the
other Loan Documents, or any other document contemplated by this Agreement or
any action taken or omitted by such Agent under this Agreement, any of the
other Loan Documents, or any other document contemplated by this Agreement,
except that no Lender shall be liable to such Agent for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, or disbursements resulting from the gross negligence or
willful misconduct of such Agent.

 

Section 10.13                          Credit
Decision.  Each Lender represents
and warrants to each other and to each Agent that:

 

(a)                                  In
making its decision to enter into this Agreement and to make Advances, it has
independently taken whatever steps it considers necessary to evaluate the
financial condition and affairs of the Borrower Parties and that it has made an
independent credit judgment, and that it has not relied upon information
provided by any Agent; and

 

(b)                                 So
long as any portion of the Loans remains outstanding, it will continue to make
its own independent evaluation of the financial condition and affairs of the
Borrower Parties.

 

Section 10.14                          Successor
Agents.  Subject to the appointment
and acceptance of a successor Agent (which shall be any Lender or a Lender
Affiliate or a commercial lender organized under the laws of the United States
of America or any political subdivision thereof which has a combined capital
and reserves in excess of $250,000,000) as provided below, any Agent may resign
at any time by giving written notice thereof to the Lenders and the Borrower
and may be removed at any time for cause

 

106

 

by the Majority Lenders.  Upon
any such resignation or removal, the Majority Lenders shall have the right to
appoint, subject to such Lender’s consent in its sole discretion, a successor
Agent from among the Lenders or the Lender Affiliates.  If no successor Agent shall have been so
appointed by the Majority Lenders, and shall have accepted such appointment
within thirty (30) days after the retiring Agent’s giving of notice of
resignation or the Majority Lenders’ removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent which
shall be any Lender or a Lender Affiliate or a commercial bank organized under
the laws of the United States of America or any political subdivision thereof
which has combined capital and reserves in excess of $250,000,000.  Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges, duties,
and obligations of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder.  After any retiring Agent’s resignation or removal hereunder as
Agent, the provisions of this Section 10.14 shall continue in effect for
its benefit in respect of any actions taken or omitted to be taken by it while
it was acting as an Agent.

 

ARTICLE 11 - Change in Circumstances

Affecting Eurodollar Advances

 

Section 11.1                                Eurodollar
Basis Determination Inadequate or Unfair. 
Notwithstanding anything contained herein which may be construed to the
contrary, if with respect to any proposed Eurodollar Advance for any Eurodollar
Advance Period, the Administrative Agent determines after consultation with the
Lenders that deposits in Dollars (in the applicable amount) are not being
offered to each of the Lenders in the relevant market for such Eurodollar
Advance Period, the Administrative Agent shall forthwith give notice thereof to
the Borrower and the Lenders, whereupon until the Administrative Agent notifies
the Borrower that the circumstances giving rise to such situation no longer
exist, the obligations of the Lenders to make Eurodollar Advances shall be
suspended.

 

Section 11.2                                Illegality.  If any Applicable Law, or any change
therein, or any interpretation or change in 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 with any request or directive (whether or not having the force of law)
of any such governmental authority, central bank or comparable agency, shall
make it unlawful or impossible for any Lender to make, maintain or fund its
Eurodollar Advances, such Lender shall so notify the Administrative Agent, and
the Administrative Agent shall forthwith give notice thereof to the other
Lenders and the Borrower.  Before giving
any notice to the Administrative Agent pursuant to this Section 11.2, such
Lender shall designate a different lending office if such designation will avoid
the need for giving such notice and will not, in the judgment of such Lender,
be otherwise disadvantageous to such Lender. 
Upon receipt of such notice, notwithstanding anything contained in
Article 2 hereof, the Borrower shall

 

107

 

repay in full the then outstanding principal amount of each Eurodollar
Advance of such Lender so affected, together with accrued interest thereon,
either (a) on the last day of the then current Eurodollar Advance Period
applicable to such Advance if such Lender may lawfully continue to maintain and
fund such Eurodollar Advance to such day or (b) immediately if such Lender may
not lawfully continue to fund and maintain such Eurodollar Advance to such day.  Concurrently with repaying each Eurodollar
Advance of such Lender, notwithstanding anything contained in Article 2 or
Article 4 hereof, the Borrower shall borrow a Base Rate Advance from such
Lender, and such Lender shall make such Base Rate Advance in an amount such
that the outstanding principal amount of the Loans held by such Lender shall
equal the outstanding principal amount of such Loans immediately prior to such
repayment.

 

Section 11.3                                Increased
Costs and Taxes.

 

(a)                                  If
any Regulatory Change:

 

(i)                           Shall
subject any Lender to any tax, duty or other charge with respect to its
obligation to make Eurodollar Advances, or its Eurodollar Advances, or shall
change the basis of taxation of payments to any Lender of the principal of or
interest on its Eurodollar Advances or in respect of any other amounts due
under this Agreement in respect of its Eurodollar Advances or its obligation to
make Eurodollar Advances (except for changes in the rate of tax on the overall
net income of such Lender imposed by the jurisdiction in which such Lender’s
principal executive office is located); or

 

(ii)                        Shall
impose, modify, or deem applicable any reserve (including, without limitation,
any imposed by the Board of Governors of the Federal Reserve System, but
excluding any included in an applicable Eurodollar Reserve Percentage), special
deposit, assessment or other requirement or condition against assets of,
deposits with or for the account of, or commitments or credit extended by any
Lender, or shall impose on any Lender or the eurodollar interbank borrowing
market any other condition affecting such Lender’s obligation to make such
Eurodollar Advances or its Eurodollar Advances;

 

and the result of any of
the foregoing is to increase the cost to such Lender of making, converting
into, continuing or maintaining any such Eurodollar Advances, or to reduce the
amount of any sum received or receivable by such Lender under this Agreement or
otherwise in respect of its Loans, then, in any such case, on the earlier of
demand by such Lender or the applicable Maturity Date, the Borrower agrees to
pay to such Lender such additional amount or amounts as will compensate such
Lender for such increased costs.  Each
Lender requesting compensation will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after
the date hereof, which will entitle such Lender to compensation pursuant to
this Section 11.3 and will designate a different lending office if such
designation will avoid the need for, or 

 

108

 

reduce the amount of,
such compensation and will not, in the sole judgment of such Lender, be
otherwise disadvantageous to such Lender.

 

(b)                                 A
certificate of any Lender claiming compensation under this Section 11.3
and setting forth the additional amount or amounts to be paid to it hereunder
and calculations therefor shall be conclusive in the absence of manifest
error.  In determining such amount, such
Lender may use any reasonable averaging and attribution methods.  If any Lender demands compensation under
this Section 11.3, the Borrower may at any time, upon at least five (5)
Business Days prior notice to such Lender, prepay in full the then outstanding
Eurodollar Advances of such Lender, together with accrued interest thereon to
the date of prepayment, along with any reimbursement required under
Section 2.11 hereof.  Concurrently
with prepaying such Eurodollar Advances, the Borrower shall borrow a Base Rate
Advance from such Lender, and such Lender shall make such Base Rate Advance in
an amount such that the outstanding principal amount of the Loans held by such
Lender shall equal the outstanding principal amount of such Loans immediately
prior to such prepayment.

 

Section 11.4                                Effect
On Other Advances.  If notice has
been given pursuant to Section 11.1, 11.2 or 11.3 hereof suspending the
obligation of any Lender to make Eurodollar Advances, or requiring Eurodollar
Advances of any Lender to be repaid or prepaid, then, unless and until such
Lender notifies the Borrower that the circumstances giving rise to such
repayment no longer apply, all Advances which would otherwise be made by such
Lender as Eurodollar Rate Advances shall be made instead as Base Rate Advances.

 

ARTICLE 12 - Miscellaneous

 

Section 12.1                                Notices.

 

(a)                                  Unless
otherwise specifically provided herein, all notices and other communications
under this Agreement shall be in writing and shall be deemed to have been given
three (3) days after deposit in the mail, designated as certified mail, return
receipt requested, postage-prepaid, or one (1) day after being entrusted to a
reputable commercial overnight delivery service, or when sent by telecopy
addressed to the party to which such notice is directed at its address
determined as provided in this Section 12.1  All notices and other communications under this Agreement shall
be given to the parties hereto at the following addresses:

 

(i)                           If
to the Borrower, to it at:

 

Rainbow
Media Holdings LLC

200 Jericho Quadrangle

Jericho, New York 11753-2701

Attn:  President

Telecopy No.:  (516) 803-4824

 

109

 

with
copies to:

 

Rainbow
Media Holdings LLC

200 Jericho Quadrangle

Jericho, New York 11753-2701

Attn:  General Counsel

Telecopy No.:  (516) 803-4824

 

and

 

Rainbow
Media Holdings LLC

200 Jericho Quadrangle

Jericho, New York 11753-2701

Attn:  Senior Vice President - Finance

Telecopy No.:  (516) 803-4824

 

and

 

Cablevision
Systems Corporation

1111 Stewart Avenue

Bethpage, New York 11714

Attn:  General Counsel

Telecopy No.:  (516) 803-2577

 

(ii)                        If
to the Administrative Agent, to it at:

 

Toronto
Dominion (Texas), Inc.

909 Fannin Street, Suite 1700

Houston, Texas  77010

Attn:  Manager, Syndications and Credit

Administration

Telecopy
No.:  (713) 951-9921

 

with a
copy to:

 

TD
Securities (USA) Inc.

31 West 52nd Street

New York, New York 10019-6101

Attn:  David Perlman, Director

Telecopy No.:  (212) 827-7232

 

and

 

110

 

Paul,
Hastings, Janofsky & Walker LLP

600 Peachtree Street, N.E., Suite 2400

Atlanta, Georgia  30308

Attn:  Chris D. Molen, Esq.

Telecopy No.: (404) 815-2424

 

(iii)                     If
to any Arranger, to each of them at:

 

Banc
of America Securities LLC

c/o Bank of America, N.A.

901 Main Street, 64th Floor

Dallas, Texas 75202

Attn:  Todd Shipley, Managing Director

Telecopy No.:  (214) 209-9390

 

and

 

TD
Securities (USA) Inc.

31 West 52nd Street

New York, New York 10019-6101

Attn:  David Perlman, Director

Telecopy No.:  (212) 827-7232

 

and

 

The
Bank of Nova Scotia

1 Liberty Plaza

New York, New York 10006

Attn:  Paul Weissenberger

Telecopy No.:  (212) 225-5355

 

with a
copy to:

 

Paul,
Hastings, Janofsky & Walker LLP

600 Peachtree Street, N.E., Suite 2400

Atlanta, Georgia  30308

Attn:  Chris D. Molen, Esq.

Telecopy No.: (404) 815-2424

 

(iv)                    If
to the Lenders, to them at the addresses set forth beside their names on the
Lender Addendum with respect thereto or in an Assignment and Assumption
Agreement.

 

111

 

(b)                                 Copies
shall be provided to Persons other than parties hereto only in the case of
notices under Article 7 hereof.

 

(c)                                  Any
party hereto may change the address to which notices shall be directed under
this Section 12.1 by giving ten (10) days’ written notice of such change
to the other parties.

 

Section 12.2                                Expenses.  The Borrower agrees to promptly pay:

 

(a)                                  All
reasonable out-of-pocket expenses of the Arrangers and the Administrative Agent
on the Agreement Date in connection with the preparation, negotiation,
execution, and delivery of this Agreement and the other Loan Documents executed
on the Agreement Date, the transactions contemplated hereunder and thereunder,
and the making of the initial Advance hereunder, including, but not limited to,
the reasonable fees and disbursements of counsel for the Administrative Agent;

 

(b)                                 All
reasonable out-of-pocket expenses of the Arrangers and the Administrative Agent
in connection with the preparation and negotiation of any waiver, modification,
amendment, or consent by the Lenders relating to this Agreement or the other
Loan Documents whether or not executed, including, but not limited to, the
reasonable fees and disbursements of counsel for the Administrative Agent;

 

(c)                                  All
reasonable out-of-pocket expenses of the Arrangers and the Administrative Agent
in connection with the syndication of the Loans; and

 

(d)                                 From
and after the occurrence of an Event of Default, all reasonable out-of-pocket
costs and expenses of the Agents and the Lenders in respect of such Event of
Default, irrespective of whether suit or other proceeding has commenced in
respect thereto, which shall include reasonable fees and out-of-pocket expenses
of counsel for the Agents and the Lenders, and the reasonable fees and
out-of-pocket expenses of any experts, agents, or consultants engaged by the
Agents and the Lenders.

 

Section 12.3                                Waivers.  The rights, remedies, powers and privileges
of the Credit Parties under this Agreement and the other Loan Documents shall
be cumulative and not exclusive of any rights, remedies, powers or privileges
which they would otherwise have.  No
failure or delay by the Credit Parties or the Majority Lenders, or any of them,
in exercising any right, remedy, power or privilege shall operate as a waiver
thereof.  The Credit Parties expressly
reserve the right to require strict compliance with the terms of this Agreement
in connection with any funding of a request for an Advance.  In the event the Lenders decide to fund a
request for an Advance at a time when the Borrower is not in strict compliance
with the terms of this Agreement, such decision by the Lenders shall not be
deemed to constitute an undertaking by the Lenders to fund any further requests
for Advances or preclude the Lenders from exercising any rights available to
the Lenders under the Loan Documents or at law or equity.  Any waiver or indulgence granted by the
Credit Parties or the Majority Lenders, or any of

 

112

 

them, shall not constitute a modification of this Agreement, except to
the extent expressly provided in such waiver or indulgence, or constitute a
course of dealing by the Credit Parties or the Majority Lenders, or any of
them, at variance with the terms of the Agreement such as to require further
notice of their intent to require strict adherence to the terms of the
Agreement in the future.

 

Section 12.4                                Set-Off.  In addition to any rights and remedies now
or hereafter granted under Applicable Law and not by way of limitation of any
such rights, after the applicable Maturity Date (whether by acceleration or
otherwise), the Lenders and any Lender Affiliates are hereby authorized by the
Borrower at any time or from time to time, without notice to the Borrower or to
any other Person, any such notice being hereby expressly waived, to set-off and
to appropriate and apply any and all deposits (general or special, time or
demand, provisional or final, including, but not limited to, Indebtedness
evidenced by certificates of deposit, in each case whether matured or
unmatured) and any other Indebtedness at any time held or owing by the Lenders
or such Lender Affiliate to or for the credit or the account of any of the
Borrower Parties, against and on account of the obligations and liabilities of
any of the Borrower Parties to the Lenders under this Agreement and any other
Loan Document, including, but not limited to, all claims of any nature or
description arising out of or connected with this Agreement or any other Loan
Document, irrespective of whether or not (a) the Lenders shall have made any
demand hereunder or (b) the Lenders shall have declared the principal of and
interest on the Loans and other amounts due hereunder to be due and payable as
permitted by Section 9.2 hereof and although said obligations and
liabilities, or any of them, shall be contingent or unmatured.  Any sums obtained by any Lender or any
Lender Affiliate shall be subject to the application of payments provisions of
Article 2 hereof.  Upon direction
by the Administrative Agent, with the consent of the Majority Lenders, after
the applicable Maturity Date (whether by acceleration or otherwise), each
Lender and each Lender Affiliate holding deposits of any of the Borrower
Parties shall exercise its set-off rights as so directed.

 

Section 12.5                                Assignment.

 

(a)                                  The
Borrower may not assign or transfer any of its rights or obligations hereunder
or under the other Loan Documents without the prior written consent of each of
the Lenders.

 

(b)                                 Each
of the Lenders (other than the Swing Loan Lender with respect to the Swing
Loans) may at any time enter into assignment agreements or participations with
respect to its interest hereunder and under the other Loan Documents with one
or more Eligible Assignees, provided that (x) any such assignment shall be in
an aggregate amount, with respect to each assignment or series of related
assignments, of (A) in the case of any assignment of the Term B Loans or the
Incremental Term C Loans, not less than $500,000, and (B) in the case of any
assignment of the Revolving Loans and Revolving Loan Commitments, not less than
$5,000,000 (in the case of each of the 

 

113

 

foregoing clauses
(A) and (B), unless such assignment is to another Lender or an assignment of
all of the assigning Lender’s rights and obligations hereunder), and (y) after
giving effect to any assignment or series of related assignments, the aggregate
amount of the assigning Lender’s Loans and Commitments under this Agreement
shall (A) in the case of any assignment of the Term B Loans or the Incremental
Term C Loans, not be less than $500,000 (which amount shall be in the aggregate
in the event of contemporaneous assignments by a Lender to one or more funds
that invest in commercial loans that are managed or advised by the same
investment advisor), and (B) in the case of any assignment of the Revolving
Loans and Revolving Loan Commitments, not be less than $5,000,000 (in the case
of each of the foregoing clauses (A) and (B), unless such assignment is an
assignment of all of the assigning Lender’s rights and obligations
hereunder).  All of the foregoing
assignments and participations shall be subject to the following:

 

(i)                           Except
for (A) assignments made to any Federal Reserve Bank or which are otherwise
permitted under Section 12.5(d) below and (B) assignments made between any
Lender and any Lender Affiliate of such Lender or to another Lender or a Lender
Affiliate of another Lender or to an Approved Fund, no assignment shall be made
or sold without the consent of the Administrative Agent, which consent shall
not be unreasonably withheld or delayed and, if no Default or Event of Default
then exists, the consent of the Borrower, which consent shall not be
unreasonably withheld or delayed.

 

(ii)                        Any
Person purchasing a participation or an assignment of the Loans from any Lender
shall be required to represent and warrant that its purchase shall not
constitute a “prohibited transaction” (as defined in Section 5.1(m)
hereof).

 

(iii)                     The
Borrower and the Credit Parties agree that assignments permitted hereunder
(including the assignment of any Advance or portion thereof) may be made with
all voting rights, and shall be made pursuant to an Assignment and Assumption
Agreement which shall be delivered to the Administrative Agent.  An administrative fee of $3,500 with respect
to each Assignment and Assumption Agreement delivered hereunder shall be
payable to the Administrative Agent by the assigning Lender at the time of any
assignment hereunder (except that in the case of assignments on the same day by
a Lender to more than one fund managed or advised by the same investment
advisor, only a single $3,500 fee shall be payable for all such assignments by
such Lender to such funds).  The
Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain a copy of each Assignment and Assumption Agreement
delivered to it and a register for the recordation of the names and addresses
of the Lenders, and the Commitments of, and principal amounts of and interest
on the Loans owing to, each Lender pursuant to the terms of this Agreement from
time to time (the “Register”). 
Upon receipt of any Assignment and Assumption Agreement delivered in
accordance with the terms hereof (and payment of the $3,500 administrative fee
related 

 

114

 

thereto), the
Administrative Agent shall record the information contemplated by the foregoing
sentence in the Register.  No
assignments shall be effective hereunder until the Loans and Commitments set
forth in the Assignment and Assumption Agreement are recorded in the Register
by the Administrative Agent.  The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent and the Lender shall treat each Person whose name is
recorded in the Register pursuant to the terms of this Agreement as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.

 

(iv)                    No
participation agreement shall confer any rights under this Agreement or any
other Loan Document to any purchaser thereof, or relieve any issuing Lender
from any of its obligations under this Agreement, and all actions hereunder
shall be conducted as if no such participation had been granted; provided,
however, that any participation agreement may confer on the participant
the right to approve or disapprove changes in the interest rate and principal
amount, fees and the applicable Maturity Date.

 

(v)                       Each
Lender agrees to provide the Administrative Agent and the Borrower with prompt
written notice of any assignments of its interests hereunder.

 

(vi)                    No
assignment, participation or other transfer of any rights hereunder shall be
effected that would result in any interest requiring registration under the
Securities Act of 1933, as amended, or qualification under any state securities
law.

 

(vii)                 No
such assignment, participation or transfer of any rights hereunder may be made
to any bank or other financial institution (A) with respect to which a receiver
or conservator (including, without limitation, the Federal Deposit Insurance Corporation
or the Office of Thrift Supervision) has been appointed or (B) that has failed
to meet any of the capital requirements of its primary regulator or insurer.

 

(viii)              If
applicable, each Foreign Lender shall, and shall cause each of its assignees that
becomes a Foreign Lender to provide to the Administrative Agent on or prior to
the Agreement Date or the effective date of any assignment, as the case may be,
all appropriate Internal Revenue Service forms required to be delivered by such
Foreign Lender pursuant to Section 2.10(c)(iii) hereof.

 

(c)                                  Except
as specifically set forth in Section 12.5(b) hereof, nothing in this
Agreement, expressed or implied, is intended to or shall confer on any Person
other than the respective parties hereto and thereto and their successors and
assignees permitted hereunder and thereunder any benefit or any legal or
equitable right, remedy or other claim under this Agreement.

 

115

 

(d)                                 Notwithstanding
anything contained herein to the contrary, any Lender may, without the consent
of the Administrative Agent or the Borrower, at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement and
the Notes, if any, issued to such Lender to secure obligations of such Lender,
including, without limitation, any pledge or assignment to secure obligations
to a Federal Reserve Bank or its trustee in support of its obligations thereto;
provided, however, that no such pledge or assignment shall release
such Lender from any of its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party hereto.

 

(e)                                  An
assigning Lender shall retain such indemnification and expense reimbursement
rights to which such Lender was entitled pursuant to this Agreement to the
effective date of the assignment of its rights hereunder.

 

Section 12.6                                Counterparts.  This Agreement and each of the other Loan
Documents may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all such separate counterparts shall together
constitute but one and the same instrument. 
In proving this Agreement or any other Loan Document in any judicial
proceedings, it shall not be necessary to produce or account for more than one such
counterpart signed by the party against whom such enforcement is sought.  Any signatures delivered by a party by
facsimile transmission shall be deemed an original signature hereto.

 

Section 12.7                                Governing
Law.  THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND
5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND SECTION 327(b) OF THE
NEW YORK CIVIL PRACTICE LAWS AND RULES AND WITHOUT REFERENCE TO THE CONFLICT OR
CHOICE OF LAW PRINCIPLES THEREOF EXCEPT TO THE EXTENT THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST UNDER THE LOAN DOCUMENTS, OR REMEDIES UNDER
THE LOAN DOCUMENTS, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

 

Section 12.8                                Severability.  Any provision of this Agreement which is
prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof in that jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.

 

Section 12.9                                Headings.  Headings and footnotes used in this
Agreement are for convenience only and shall not be used in connection with the
interpretation of any provision hereof.

 

116

 

Section 12.10                          Interest.

 

(a)                                  In
no event shall the amount of interest due or payable hereunder or otherwise in
respect of the Loans exceed the maximum rate of interest allowed by Applicable
Law, and in the event any such payment is inadvertently made by any Borrower
Party or is inadvertently received by any Lender, then such excess sum shall be
credited as a payment of principal, unless such Borrower Party shall notify
such Lender in writing that it elects to have such excess sum returned
forthwith.  It is the express intent
hereof that the Borrower Parties not pay and the Lenders not receive, directly
or indirectly in any manner whatsoever, interest in excess of that which may
legally be paid by the Borrower Parties under Applicable Law.

 

(b)                                 Notwithstanding
the use by the Lenders of the Prime Rate, the Eurodollar Rate and the Federal
Funds Rate as reference rates for the determination of interest on the Loans,
the Lenders shall be under no obligation to obtain funds from any particular
source in order to charge interest to the Borrower at interest rates tied to
such reference rates.

 

Section 12.11                          Entire
Agreement.  Except as otherwise
expressly provided herein, this Agreement and the other Loan Documents embody
the entire agreement and understanding among the parties hereto and thereto and
supersede all prior agreements, understandings, and conversations relating to
the subject matter hereof and thereof.

 

Section 12.12                          Amendment
and Waiver.  Neither this Agreement
nor any Loan Document (other than any Interest Hedge Agreement), nor any term
or provision hereof or thereof, may be amended or waived orally, but only by an
instrument in writing signed by the Majority Lenders (or, in the case of
Security Documents executed by the Administrative Agent, signed by the
Administrative Agent and approved by the Majority Lenders) and, in the case of
an amendment, also by the Borrower, except that (a) any decrease (other than
pro rata) or increase in the amount of the Commitments of any Lender shall
require the consent of such Lender, (b) any issuance of an Incremental Facility
Commitment shall require only the consent of the Incremental Facility Lenders,
the Borrower and the Administrative Agent, (c) any amendment of
Section 12.5(b) hereof shall require the consent of the Super-Majority
Lenders, and (d) in the event of (i) any postponement in the scheduled time as
set forth in Section 2.7 hereof  for the payment of, or any reduction of,
any scheduled payments of principal or the rate of interest or fees due
hereunder or any extension of the Initial Maturity Date or the Final Maturity
Date, (ii) any change in the Applicable Margin as set forth in
Section 2.3(f) hereof, (iii) any release or impairment of any Collateral
or Guaranties relating, directly or indirectly, to any MGM Operating Company,
(iv) any release of the Borrower from the Obligations or any release or
impairment of substantially all of the other Collateral or Guaranties issued in
favor of the Administrative Agent (other than in connection with a disposition
permitted under Section 8.5(a) or (b) hereof, or in connection with the
issuance of additional equity interests in any MuchMusic Company permitted
under Section 8.5(c)

 

117

 

hereof, or in connection with Investments in the MGM Companies
permitted under Section 8.2(d) hereof, in each case which may be released
(except for the pledge of any equity interests in such MuchMusic Company owned
by any Rainbow Company) by the Administrative Agent without additional
consent), (v) any waiver of any Event of Default due to the failure by the
Borrower to pay any sum due hereunder, (vi) except in connection with the
implementation of the Incremental Facility Indebtedness to the extent necessary
to accord the various types of Incremental Facility Loans treatment similar to
the treatment accorded Loans of a similar type thereunder, any change to the
application of payments made to the Administrative Agent and the other Credit
Parties described in Sections 2.6(d), 2.12(a) and 2.12(b) hereof, or any change
in the sharing of payment procedures described in Section 2.12(c) hereof,
(vii) any amendment of the definition of “MGM Operating Companies” or (viii)
any amendment of this Section 12.12 or of the definition of “Majority
Lenders” or “Super-Majority Lenders” or of any provision of this Agreement
which refers to “Majority Lenders” or “Super-Majority Lenders” if the effect
thereof would be to amend the definition of “Majority Lenders” or
“Super-Majority Lenders,” as the case may be, as used in such provision, any
amendment or waiver may be made only by an instrument in writing signed by each
of the Lenders and, in the case of an amendment, also by the Borrower; provided,
however, notwithstanding anything to the contrary contained herein, any
amendment of Section 2.14 or any other term or provision of this Agreement
or any other Loan Document (other than any Interest Hedge Agreement) required
in connection with the implementation of the Incremental Facility Indebtedness
shall require only the consent of the Majority Lenders and the Borrower.

 

Section 12.13                          Other
Relationships.  No relationship
created hereunder or under any other Loan Document shall in any way affect the
ability of any of the Credit Parties to enter into or maintain business
relationships with the Borrower or any of its Lender Affiliates beyond the
relationships specifically contemplated by this Agreement and the other Loan
Documents.

 

Section 12.14                          Confidentiality.  The parties hereto shall preserve in a
confidential manner all information received from any other party pursuant to
the Loan Documents and the transactions contemplated thereunder, and shall not
disclose such information except to (i) any Agent, any Lender or any Persons
with which a confidential relationship is maintained (including designated
agents, legal counsel, accountants and regulators), (ii) where required by law,
(iii) any direct or indirect contractual counterparty in an asset swap
agreement or such contractual counterparty’s professional advisor (so long as
such contractual counterparty or professional advisor, as the case may be, has
agreed in a writing in favor of the Borrower to be bound by the provisions of
this Section 12.14), (iv) prospective transferees (so long as such any
such prospective transferee has agreed in a writing in favor of the Borrower to
be bound by the provisions of this Section 12.14), and (v) the National
Association of Insurance Commissioners and other insurance regulatory agencies
to the extent required by law or (so long as such Person has agreed in a
writing in favor of the Borrower to be bound by the provisions of this
Section 12.14) to maintain any industry ratings applicable to such
parties.  Notwithstanding anything
herein 

 

118

 

to the contrary, “information” shall not include, and the Borrower, the
other Borrower Parties, the Administrative Agent, each Lender and the
respective Affiliates of each of the foregoing (and the respective partners,
directors, officers, employees, agents, advisors and other representatives of
each of the foregoing and their Affiliates) may disclose to any and all
Persons, without limitation of any kind, (a) any information with respect to
the United States federal and state income tax treatment of the transactions
contemplated hereby and any facts that may be relevant to understanding such
tax treatment, which facts shall not include for this purpose the names of the
parties or any other Person named herein, or information that would permit
identification of the parties or such other Persons, or any pricing terms or
other nonpublic business or financial information that is unrelated to such tax
treatment or facts, and (b) all materials of any kind (including opinions or
other tax analyses) relating to such tax treatment or facts that are provided
to any of the Persons referred to above.

 

Section 12.15                          Liability
of Partners, Members and Other Persons. Notwithstanding anything else in
this Agreement to the contrary, the parties hereto expressly agree that no
partner, member, officer, director or other holder of an ownership interest of
or in the Borrower, any Subsidiary of the Borrower, CSC Holdings or CVC, or any
partnership, limited liability company, corporation or other entity which is a
partner, member, stockholder or holder of an ownership interest of or in the
Borrower, any Subsidiary of the Borrower, CSC Holdings or CVC shall have any
personal or individual liability or responsibility in respect of Obligations of
the Borrower, any Subsidiary of the Borrower, CSC Holdings or CVC pursuant to
this Agreement or any other Loan Document solely by reason of his or her status
as such partner, member, officer, director, stockholder or holder.

 

Section 12.16                          Survival.  The provisions of this Agreement set forth
in (a) Sections 2.10(c)(ii), 2.11, 6.12, 6.13, 10.11 and 11.3 hereof and (b) to
the extent that any Obligations shall remain outstanding, Article 3
hereof, in each case, shall survive any termination or expiration of this
Agreement.

 

Section 12.17                          Delivery
of Lender Addenda.  Each initial
Lender shall become a party to this Agreement by delivering to the
Administrative Agent a Lender Addendum duly executed by such Lender, the
Borrower and the Administrative Agent.

 

ARTICLE 13 - Waiver of Jury Trial

 

Section 13.1                                Waiver
of Jury Trial.  EACH OF THE BORROWER
PARTIES AND EACH OF THE CREDIT PARTIES HEREBY AGREES TO WAIVE THE RIGHT TO A
TRIAL BY JURY IN ANY COURT AND IN ANY ACTION OR PROCEEDING OF ANY TYPE IN WHICH
ANY OF THE BORROWER PARTIES, ANY OF THE CREDIT PARTIES, OR ANY OF THEIR
RESPECTIVE SUCCESSORS OR ASSIGNS IS A PARTY, AS TO ALL MATTERS AND THINGS
ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT OR ANY OF THE 

 

119

 

OTHER LOAN DOCUMENTS AND THE RELATIONS AMONG THE PARTIES LISTED IN THIS
SECTION 13.1.

 

Section 13.2                                Consent
to Jurisdiction.  EACH OF THE
BORROWER PARTIES AND EACH OF THE CREDIT PARTIES HEREBY AGREE THAT ANY SUIT FOR
THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING
THEREIN AND EACH CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND
THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT
THE ADDRESS SPECIFIED IN SECTION 12.1. 
EACH OF THE BORROWER PARTIES HEREBY WAIVES ANY OBJECTIONS THAT IT MAY
NOW OR HEREAFTER HAVE TO THE VENUE OF SUCH SUIT OR ANY SUCH COURT OR THAT SUCH
SUIT IS BROUGHT IN AN INCONVENIENT COURT.

 

[REMAINDER OF THIS
PAGE INTENTIONALLY LEFT BLANK]

 

120

 

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

 

	
  BORROWER:

  	
  RAINBOW MEDIA HOLDINGS
  LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  GUARANTORS:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
										

 

 

TABLE OF CONTENTS

 

	
  ARTICLE 1 -

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2 -

  	
  LOANS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  The Loans

  	
   

  
	
  Section 2.2

  	
  Manner of Borrowing and Disbursement

  	
   

  
	
  Section 2.3

  	
  Interest

  	
   

  
	
  Section 2.4

  	
  Fees

  	
   

  
	
  Section 2.5

  	
  Optional Prepayments and Reductions

  	
   

  
	
  Section 2.6

  	
  Mandatory Commitment Reductions and
  Prepayments

  	
   

  
	
  Section 2.7

  	
  Repayment

  	
   

  
	
  Section 2.8

  	
  Swing Loans

  	
   

  
	
  Section 2.9

  	
  Notes; Loan Accounts

  	
   

  
	
  Section 2.10

  	
  Manner of Payment

  	
   

  
	
  Section 2.11

  	
  Reimbursement

  	
   

  
	
  Section 2.12

  	
  Application of Payments.

  	
   

  
	
  Section 2.13

  	
  Capital Adequacy

  	
   

  
	
  Section 2.14

  	
  Incremental Facility Loans

  	
   

  
	
  Section 2.15

  	
  Letters of Credit

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3 -

  	
  GUARANTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Guarantee

  	
   

  
	
  Section 3.2

  	
  Waivers and Releases

  	
   

  
	
  Section 3.3

  	
  Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 -

  	
  CONDITIONS PRECEDENT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Conditions Precedent to Closing

  	
   

  
	
  Section 4.2

  	
  Conditions Precedent to Each Advance

  	
   

  
	
  Section 4.3

  	
  Conditions Precedent to Issuance of Letters
  of Credit

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5
  -

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Representations and Warranties

  	
   

  
	
  Section 5.2

  	
  Survival of Representations and Warranties,
  etc

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6 -

  	
  GENERAL COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Preservation of Existence and Similar
  Matters

  	
   

  
	
  Section 6.2

  	
  Compliance with Applicable Law

  	
   

  
	
  Section 6.3

  	
  Maintenance of Properties

  	
   

  
	
  Section 6.4

  	
  Accounting Methods and Financial Records

  	
   

  
	
  Section 6.5

  	
  Insurance

  	
   

  

 

i

 

	
  Section 6.6

  	
  Payment of Taxes and Claims

  	
   

  
	
  Section 6.7

  	
  Visits and Inspections

  	
   

  
	
  Section 6.8

  	
  Payment of Indebtedness

  	
   

  
	
  Section 6.9

  	
  Use of Proceeds

  	
   

  
	
  Section 6.10

  	
  ERISA

  	
   

  
	
  Section 6.11

  	
  Further Assurances

  	
   

  
	
  Section 6.12

  	
  Broker’s Claims

  	
   

  
	
  Section 6.13

  	
  Indemnity

  	
   

  
	
  Section 6.14

  	
  Covenants Regarding Formation of
  Subsidiaries, Investments and Acquisitions

  	
   

  
	
  Section 6.15

  	
  Interest Rate Hedging

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7 -

  	
  INFORMATION COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  Quarterly Financial Statements and
  Information

  	
   

  
	
  Section 7.2

  	
  Annual Financial Statements and
  Information; Certificate of No Default

  	
   

  
	
  Section 7.3

  	
  Performance Certificates

  	
   

  
	
  Section 7.4

  	
  Copies of Other Reports

  	
   

  
	
  Section 7.5

  	
  Notice of Litigation and Other Matters

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 -

  	
  NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  Indebtedness

  	
   

  
	
  Section 8.2

  	
  Investments

  	
   

  
	
  Section 8.3

  	
  Limitation on Liens

  	
   

  
	
  Section 8.4

  	
  Amendment and Waiver

  	
   

  
	
  Section 8.5

  	
  Liquidation; Disposition or Acquisition of
  Assets

  	
   

  
	
  Section 8.6

  	
  Limitation on Guaranties

  	
   

  
	
  Section 8.7

  	
  Restricted Payments and Purchases

  	
   

  
	
  Section 8.8

  	
  Total Leverage Ratio

  	
   

  
	
  Section 8.9

  	
  Senior Leverage Ratio

  	
   

  
	
  Section 8.10

  	
  Interest Coverage Ratio

  	
   

  
	
  Section 8.11

  	
  Debt Service Ratio

  	
   

  
	
  Section 8.12

  	
  Affiliate Transactions

  	
   

  
	
  Section 8.13

  	
  Real Estate

  	
   

  
	
  Section 8.14

  	
  ERISA Liabilities

  	
   

  
	
  Section 8.15

  	
  Sales and Leasebacks

  	
   

  
	
  Section 8.16

  	
  Negative Pledge

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9 -

  	
  DEFAULT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  Events of Default

  	
   

  

 

ii

 

	
  Section 9.2

  	
  Remedies

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10 -

  	
  THE AGENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.1

  	
  Appointment and Authorization

  	
   

  
	
  Section 10.2

  	
  Delegation of Duties

  	
   

  
	
  Section 10.3

  	
  Interest Holders

  	
   

  
	
  Section 10.4

  	
  Consultation with Counsel

  	
   

  
	
  Section 10.5

  	
  Documents

  	
   

  
	
  Section 10.6

  	
  Security Documents

  	
   

  
	
  Section 10.7

  	
  Arrangers and Affiliates

  	
   

  
	
  Section 10.8

  	
  Responsibility of the Agents

  	
   

  
	
  Section 10.9

  	
  Action by Agents

  	
   

  
	
  Section 10.10

  	
  Notice of Default or Event of Default

  	
   

  
	
  Section 10.11

  	
  Responsibility Disclaimed

  	
   

  
	
  Section 10.12

  	
  Indemnification

  	
   

  
	
  Section 10.13

  	
  Credit Decision

  	
   

  
	
  Section 10.14

  	
  Successor Agents

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11
  -

  	
  CHANGE
  IN CIRCUMSTANCES AFFECTING EURODOLLAR ADVANCES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.1

  	
  Eurodollar Basis Determination Inadequate
  or Unfair

  	
   

  
	
  Section 11.2

  	
  Illegality

  	
   

  
	
  Section 11.3

  	
  Increased Costs and Taxes

  	
   

  
	
  Section 11.4

  	
  Effect On Other Advances

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12 -

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 12.1

  	
  Notices

  	
   

  
	
  Section 12.2

  	
  Expenses

  	
   

  
	
  Section 12.3

  	
  Waivers

  	
   

  
	
  Section 12.4

  	
  Set-Off

  	
   

  
	
  Section 12.5

  	
  Assignment

  	
   

  
	
  Section 12.6

  	
  Counterparts

  	
   

  
	
  Section 12.7

  	
  Governing Law

  	
   

  
	
  Section 12.8

  	
  Severability

  	
   

  
	
  Section 12.9

  	
  Headings

  	
   

  
	
  Section 12.10

  	
  Interest

  	
   

  
	
  Section 12.11

  	
  Entire Agreement

  	
   

  
	
  Section 12.12

  	
  Amendment and Waiver

  	
   

  
	
  Section 12.13

  	
  Other Relationships

  	
   

  
	
  Section 12.14

  	
  Confidentiality

  	
   

  

 

iii

 

	
  Section 12.15

  	
  Liability of Partners, Members and Other
  Persons

  	
   

  
	
  Section 12.16

  	
  Survival

  	
   

  
	
  Section 12.17

  	
  Delivery of Lender Addenda

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13 -

  	
  WAIVER OF JURY TRIAL

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.1

  	
  Waiver of Jury Trial

  	
   

  
	
  Section 13.2

  	
  Consent to Jurisdiction

  	
   

  

 

iv

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