Document:

Exhibit
4.4

 

 

SUPPLEMENTAL
INDENTURE

 

SUPPLEMENTAL INDENTURE dated as of January 20,
2005, between FAIRPOINT COMMUNICATIONS, INC., a Delaware corporation (the “Company”),
and THE BANK OF NEW YORK, a New York banking corporation, as Trustee (the “Trustee”),
to the Indenture, dated as of March 6, 2003 (the “Indenture”), between the
Company and the Trustee, as amended as of the date hereof.  Capitalized terms used in this Supplemental
Indenture and not otherwise defined herein shall have the meanings assigned to
such terms in the Indenture.

 

WITNESSETH:

 

WHEREAS, the Company and the Trustee have heretofore
executed and delivered the Indenture providing for the issuance of 11-7/8%
Senior Notes due 2010 (the “Securities”) of the Company;

 

WHEREAS, the Company intends to offer its common stock
to the public pursuant to a Registration Statement on Form S-1 (the “IPO”) and
enter into a series of transactions (the “Restructuring”) which require the
amendment and/or waiver of various provisions of the Indenture;

 

WHEREAS, Section 9.02 of the Indenture provides
that the Company and the Trustee may, with the written consent of the Holders
of at least a majority in aggregate principal amount of the Securities
outstanding, amend the Indenture and/or the Securities;

 

WHEREAS, the Company has offered to purchase for cash
all of the outstanding Securities upon the terms and subject to the conditions
set forth in the Offer to Purchase and Consent Solicitation Statement, dated January 5,
2005, as the same may be amended, supplemented or modified (the “Offer”);

 

WHEREAS, the Offer is conditioned upon, among other
things, the proposed amendments (the “Proposed Amendments”) to the Indenture
set forth herein having been approved by at least a majority in aggregate
principal amount of the Securities outstanding, with the effectiveness of such
Proposed Amendments with respect to the Indenture and the Securities being
subject to the acceptance for payment by the Company of Securities representing
a majority in aggregate principal amount of the outstanding Securities pursuant
to the Offer (the “Acceptance”);

 

WHEREAS, the Company has received and delivered to the
Trustee the requisite consents to effect the Proposed Amendments under the
Indenture and the Securities;

 

WHEREAS, the Company has been authorized by a
resolution of its Board of Directors to enter into this Supplemental Indenture;
and

 

 

WHEREAS, all other acts and proceedings required by
law, by the Indenture and the certificate of incorporation and by-laws of the
Company to make this Supplemental Indenture a valid and binding agreement of
the Company for the purposes expressed herein, in accordance with its terms,
have been duly done and performed;

 

NOW THEREFORE, in consideration of the premises and
the covenants and agreements contained herein, and for other good and valuable
consideration the receipt of which is hereby acknowledged, and for the equal
and proportionate benefit of the Holders of the Securities, the Company and the
Trustee hereby agree as follows:

 

Article I.

 

Waiver of Compliance with Indenture

 

1.1                                 The
Trustee, with the consent of a majority in aggregate principal amount of the
outstanding Securities, waives compliance with the provisions of Sections 4.02
through 4.16 of the Indenture, inclusive, Article V of the Indenture and
with any events of default set forth in Section 6.01 of the Indenture with
respect thereto arising in connection with the consummation of the IPO and the
transactions contemplated by the Restructuring, including, without limitation:

 

(a)                                  the
entry into a new senior secured credit facility in an amount up to $690.0
million;

 

(b)                                 the
repayment of all of the Company’s outstanding indebtedness; and

 

(c)                                  any
and all actions that are taken by the Company or any of its subsidiaries in
connection with the consummation of the IPO and the transactions contemplated
by the Restructuring.

 

Article II.

 

Amendments to the Indenture

 

2.1                                 Amendment
of Sections 4.02 through 4.06. 
Sections 4.02 through 4.06 of the Indenture, inclusive, are hereby
deleted in their entirety and each Section is replaced with the following:
“[intentionally omitted]”.

 

2.2                                 Amendment
of Section 4.07.  The words “270
days” which appear in two places in the first sentence of clause (c) in Section 4.07
of the Indenture are hereby deleted in their entirety in both such places and
replaced in both such places with the following: “360 days”.

 

2

 

2.3                                 Amendment
of Sections 4.08 through 4.13. 
Sections 4.08 through 4.13 of the Indenture, inclusive, are hereby
deleted in their entirety and each Section is replaced with the following:
“[intentionally omitted]”.

 

2.4                                 Amendment
of Sections 4.15 through 4.16. 
Sections 4.15 through 4.16 of the Indenture, inclusive, are hereby
deleted in their entirety and each Section is replaced with the following:
“[intentionally omitted]”.

 

2.5                                 Amendment
of Article V.  Article V of
the Indenture is hereby deleted in its entirety and is replaced with the
following: “[intentionally omitted]”.

 

2.6                                 Amendment
of Section 6.01.

 

(a)                                  Clauses
(3), (4), (5) and (8) of the first paragraph of Section 6.01 of the
Indenture are hereby deleted in their entirety and replaced with the following:
“[intentionally omitted]”.

 

(b)                                 The
fourth paragraph reading “A Default under clause (4) is not an Event of Default
until the Trustee or the Holders of at least 25.0% in aggregate principal
amount of the Securities then outstanding notify the Company (and in the case
of such notice by Holders, the Trustee) of the Default and the Company does not
cure such Default within the time specified after receipt of such notice.  Such notice must specify the Default, demand
that it be remedied and state that such notice is a “Notice of Default”“ in Section 6.01
of the Indenture is hereby deleted in its entirety.

 

2.7                                 Amendment
of Section 8.02.  Clause (7) of
the first paragraph of Section 8.02 of the Indenture is hereby deleted in
its entirety and replaced with the following: “[intentionally omitted]”.

 

2.8                                 Amendment
of the Indenture and the Global Securities. 
Section 4 of the Global Securities is hereby amended to add the
words, “, as amended or supplemented from time to time” at the end of the first
sentence after the words “, between the Company and the Trustee”.

 

2.9                                 Amendment
of Defined Terms.

 

(a)                                  The
defined term “Asset Sale” in Section 1.01 of the Indenture is hereby
deleted in its entirety and replaced with the following:

 

““Asset Sale” means any sale, lease,
transfer, conveyance, issuance or other disposition (or series of related
sales, leases, transfers, conveyances, issuances or dispositions) by the
Company or any Restricted Subsidiary, including any disposition by means of a
merger, consolidation or similar transaction (each referred to for the purposes
of this definition as a

 

3

 

“disposition”), of (a) any shares of Capital Stock of a Restricted
Subsidiary (other than directors’ qualifying shares) or (b) any other Property
of the Company or any Restricted Subsidiary outside of the ordinary course of
business of the Company or such Restricted Subsidiary, other than, in the case
of clauses (a) and (b) above:

 

(i)                                     any
disposition by a Restricted Subsidiary to the Company or by the Company or a
Restricted Subsidiary to a Restricted Subsidiary;

 

(ii)                                  any
merger, consolidation or amalgamation of the Company with or into any other
Person (other than a merger with a Wholly Owned Subsidiary into the Company) or
a sale, transfer, assignment, lease, conveyance or other disposition of all or
substantially all of the Company’s Property in any one transaction or series of
transactions unless:

 

(A)  the Company shall be the surviving Person (the
“Surviving Person”) or the Surviving Person (if other than the Company) formed
by such merger, consolidation or amalgamation or to which such sale, transfer,
assignment, lease, conveyance or disposition is made shall be a corporation
organized and existing under the laws of the United States of America, any
State thereof or the District of Columbia;

 

(B)  the Surviving Person (if other than the
Company) expressly assumes, by supplemental indenture in form satisfactory to
the Trustee, executed and delivered to the Trustee by such Surviving Person,
the due and punctual payment of the principal of, and premium, if any, and interest
on, all the Notes, according to their tenor, and the due and punctual
performance and observance of all the covenants and conditions of the Indenture
to be performed by the Company; and

 

(C)  in the case of a sale, transfer, assignment,
lease, conveyance or other disposition of all or substantially all the Property
of the Company, such Property shall have been transferred as an entirety or
virtually as an entirety to one Person;

 

(iii)                               any
disposition or series of related dispositions for an aggregate consideration
not in excess of $1.0 million;

 

(iv)                              contemporaneous
exchanges by the Company or any Restricted Subsidiary of Telecommunications
Assets for other Telecommunications Assets in the ordinary course of business
as long as the applicable Telecommunications Assets received by the Company or
such Restricted

 

4

 

Subsidiary
have at least substantially equal Fair Market Value to the Company or such
Restricted Subsidiary (as evidenced by a resolution of the Board of Directors
of the Company);

 

(v)                                 the
grant of Liens not prohibited by the Indenture;

 

(vi)                              any
disposition of obsolete, worn-out, uneconomical or surplus property or
equipment in the ordinary course of business;

 

(vii)                           the
sale or other disposition of cash or cash equivalents (including the payment of
dividends);

 

(viii)                        the sale
or discount, in each case without recourse, of accounts receivable arising in
the ordinary course of business, but only in connection with the compromise or
collection thereof; and

 

(ix)                                any
release of intangible claims or rights in connection with the loss or
settlement of a bona fide lawsuit, dispute or controversy.”

 

(b)                                 The
defined term “Change of Control” in Section 1.01 of the Indenture is
hereby deleted in its entirety and replaced with the following:

 

““Change of Control” means the occurrence
of any of the following events:

 

(a)                                  any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act), other than one or more of the Equity Investors, becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly
or indirectly, of more than 50% of the total voting power of the Voting Stock
of the Company;

 

(b)                                 the
Company merges or consolidates with or into, or sells or transfers (in one or a
series of related transactions) all or substantially all of the assets of the
Company and its Restricted Subsidiaries to, another Person, other than one or
more of the Equity Investors, and any “person” (as defined in clause (a) above),
other than one or more of the Equity Investors, is or becomes the “beneficial
owner” (as so defined), directly or indirectly, of more than 50% of the total
voting power of the Voting Stock of the surviving Person in such merger or
consolidation, or the transferee Person in such sale or transfer of assets, as
the case may be;

 

(c)                                  during
any period of two consecutive years, individuals who at the beginning of such
period were members of the Board of Directors of the Company (together with any
new members thereof whose election by the

 

5

 

Board
of Directors or whose nomination for election by holders of Capital Stock of
the Company was approved by a vote of a majority of the members of the Board of
Directors then still in office who were either members thereof at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the members of the
Board of Directors then in office; or

 

(d)                                 the
shareholders of the Company shall have approved any plan of liquidation or
dissolution of the Company.”

 

(c)                                  All
terms defined in Sections 1.01 and 1.02 of the Indenture and contained in the
Article, Sections and Clauses of the Indenture and the Securities deleted
pursuant to Sections 2.1 through 2.8, inclusive, of this Supplemental
Indenture, but not otherwise used elsewhere in the Indenture or the Securities,
are hereby deleted in their entirety.

 

2.10                           Amendment
of Section References.  All
references in the Indenture and the Securities to the Article, Sections and
Clauses of the Indenture and the Securities deleted pursuant to this Article II
of this Supplemental Indenture are hereby deleted, other than any references to
such Sections contained in clause (5)(i) of the first paragraph of Section 9.02
of the Indenture.

 

Article III.

 

Effectiveness

 

3.1                                 Effectiveness
of this Supplemental Indenture.  This
Supplemental Indenture is entered into pursuant to and consistent with Section 9.02
of the Indenture, and nothing herein shall constitute a waiver, amendment,
modification or deletion of the Indenture requiring the approval of each
Securityholder affected thereby pursuant to clauses (1) through (9) of the
first paragraph of Section 9.02 of the Indenture.  Upon the execution of this Supplemental
Indenture by the Company and the Trustee, the Indenture shall be amended and
supplemented in accordance herewith, and this Supplemental Indenture shall form
a part of the Indenture for all purposes and each Holder shall be bound
thereby; provided, however, that the provisions of the Indenture
and the Securities referred to in Articles I and II above (such provisions
being referred to as the “Amended Provisions”) will remain in effect in the
form they existed prior to the execution of this Supplemental Indenture, and
the waivers, amendments, modifications and deletions to the Amended Provisions
will not become operative, and the terms of the Indenture will not be waived,
amended, modified or deleted, in each case, until the Acceptance.

 

6

 

Article IV.

 

Miscellaneous

 

4.1                                 Continuing
Effect of the Indenture.  Except as
expressly provided herein, all of the terms, provisions and conditions of the
Indenture and the Securities outstanding thereunder shall remain in full force
and effect.

 

4.2                                 Reference
and Effect on the Indenture.  On and
after the Acceptance, each reference in the Indenture to “the Indenture,” “this
Indenture,” “hereunder,” “hereof” or “herein” shall mean and be a reference to
the Indenture as supplemented by this Supplemental Indenture, unless the
context otherwise requires.

 

4.3                                 Trust
Indenture Act Controls.  If any
provision of this Supplemental Indenture limits, qualifies or conflicts with
another provision of this Supplemental Indenture or the Indenture that is
required to be included by the Trust Indenture Act of 1939, as amended, as in
force at the date this Supplemental Indenture is executed, the provision
required by said Act shall control.

 

4.4                                 Governing
Law.  This Supplemental Indenture
shall be governed by, and construed in accordance with, the laws of the State
of New York but without giving effect to applicable principles of conflicts of
law to the extent that the application of the laws of another jurisdiction
would be required thereby.

 

4.5                                 Separability.                              In
case any provision of this Supplemental Indenture shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

 

4.6                                 Counterparts.  This Supplemental Indenture may be executed
in any number of counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together constitute but one and the
same instrument.

 

4.7                                 Trustee.  The Trustee makes no representations as to
the validity or sufficiency of this Supplemental Indenture.  The
recitals and statements herein are deemed to be those of the Company and not of
the Trustee.

 

7

 

IN WITNESS WHEREOF, the parties have caused this
Supplemental Indenture to be duly executed as of the date first written above.

 

	
   

  	
  FAIRPOINT COMMUNICATIONS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Walter E. Leach, Jr.

  	
   

  
	
   

  	
       Name: Walter E. Leach,
  Jr.

  
	
   

  	
       Title:
  Executive Vice President and Chief

  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Derek Kettel

  	
   

  
	
   

  	
       Name: Derek Kettel

  
	
   

  	
       Title: AgentExhibit 10.1

 

 

CREDIT AGREEMENT

 

 

among

 

 

FAIRPOINT COMMUNICATIONS, INC.,

 

 

VARIOUS LENDING INSTITUTIONS,

 

 

BANK OF AMERICA, N.A.,

as SYNDICATION AGENT,

 

 

COBANK, ACB

and

GENERAL ELECTRIC CAPITAL CORPORATION,

as CO-DOCUMENTATION AGENTS,

and

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as ADMINISTRATIVE AGENT

 

Dated as of February 8, 2005

 

 

 

DEUTSCHE BANK SECURITIES, INC.

and

BANC OF AMERICA SECURITIES LLC,

as JOINT LEAD ARRANGERS,

and

 

DEUTSCHE BANK SECURITIES, INC.,

 

BANC OF AMERICA SECURITIES LLC,

 

GOLDMAN SACHS CREDIT PARTNERS, L.P.,

 

and

 

MORGAN STANLEY SENIOR FUNDING, INC.,

as JOINT BOOK RUNNING MANAGERS

 

 

TABLE OF CONTENTS

 

	
  SECTION 1. Amount and Terms of Credit

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1.01 Commitment

  	
   

  
	
   

  	
  1.02 Minimum Borrowing Amounts, etc.

  	
   

  
	
   

  	
  1.03 Notice of Borrowing

  	
   

  
	
   

  	
  1.04 Disbursement of Funds

  	
   

  
	
   

  	
  1.05 Notes

  	
   

  
	
   

  	
  1.06 Conversions

  	
   

  
	
   

  	
  1.07 Pro Rata Borrowings

  	
   

  
	
   

  	
  1.08 Interest

  	
   

  
	
   

  	
  1.09 Interest Periods

  	
   

  
	
   

  	
  1.10 Increased Costs, Illegality, etc.

  	
   

  
	
   

  	
  1.11 Compensation

  	
   

  
	
   

  	
  1.12 Change of Lending Office

  	
   

  
	
   

  	
  1.13 Replacement of Lenders

  	
   

  
	
   

  	
  1.14 Incremental B Term Loan Commitments

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1A.  Letters of Credit.

  	
   

  
	
   

  	
   

  	
   

  
	
  1A.01  Letters of Credit

  	
   

  
	
   

  	
  1A.02  Minimum Stated Amount

  	
   

  
	
   

  	
  1A.03  Letter of Credit Requests;
  Notices of Issuance

  	
   

  
	
   

  	
  1A.04  Agreement to Repay Letter
  of Credit Drawings

  	
   

  
	
   

  	
  1A.05  Letter of Credit
  Participations

  	
   

  
	
   

  	
  1A.06  Increased Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  2. Fees

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  2.01 Fees

  	
   

  
	
   

  	
  2.02 Voluntary Reduction of Commitments

  	
   

  
	
   

  	
  2.03 Mandatory Adjustments of Commitments,
  etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3. Payments

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  3.01 Voluntary Prepayments

  	
   

  
	
   

  	
  3.02 Mandatory Prepayments

  	
   

  
	
   

  	
  3.03 Method and Place of Payment

  	
   

  
	
   

  	
  3.04 Net Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4. Conditions Precedent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  4.01
  Conditions Precedent to Initial Borrowing Date and the Initial Incurrence of
  Loans

  	
   

  
	
   

  	
  4.02
  Conditions Precedent to All Loans (other than RF Loans and Delayed-Draw B
  Term Loans Incurred to Finance an Optional Non-2008 Tender Offer Notes 

  	
   

  

 

i

 

	
   

  	
  Redemption
  and RF Loans Incurred on the Redemption Date to Finance the Existing 2008
  Senior Subordinated Notes Redemption)

  	
   

  
	
   

  	
  4.03 Special Condition Precedent to Incurrence of RF Loans and
  Delayed-Draw B Term Loans Incurred to Finance an Optional Non-2008 Tender
  Offer Notes Redemption and of RF Loans Incurred on the Redemption Date to
  Finance the Existing 2008 Senior Subordinated Notes Redemption

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5. Representations, Warranties and
  Agreements

  	
   

  
	
   

  	
   

  
	
   

  	
  5.01 Company Status

  	
   

  
	
   

  	
  5.02
  Company Power and Authority

  	
   

  
	
   

  	
  5.03 No Violation

  	
   

  
	
   

  	
  5.04
  Litigation

  	
   

  
	
   

  	
  5.05 Use of Proceeds; Margin Regulations

  	
   

  
	
   

  	
  5.06
  Governmental Approvals

  	
   

  
	
   

  	
  5.07 Investment Company Act

  	
   

  
	
   

  	
  5.08 Public Utility Holding Company Act

  	
   

  
	
   

  	
  5.09 True and Complete Disclosure

  	
   

  
	
   

  	
  5.10 Financial Condition; Financial Statements

  	
   

  
	
   

  	
  5.11 Security Interests

  	
   

  
	
   

  	
  5.12 Compliance With Statutes

  	
   

  
	
   

  	
  5.13 Tax Returns and Payments

  	
   

  
	
   

  	
  5.14 Compliance with ERISA

  	
   

  
	
   

  	
  5.15 Subsidiaries

  	
   

  
	
   

  	
  5.16 Intellectual Property

  	
   

  
	
   

  	
  5.17 Environmental Matters

  	
   

  
	
   

  	
  5.18 Labor Relations

  	
   

  
	
   

  	
  5.19 Subordination

  	
   

  
	
   

  	
  5.20 Capitalization

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6. Affirmative Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  6.01 Information Covenants

  	
   

  
	
   

  	
  6.02 Books, Records and Inspections

  	
   

  
	
   

  	
  6.03
  Insurance

  	
   

  
	
   

  	
  6.04 Payment of Taxes

  	
   

  
	
   

  	
  6.05 Company Franchises

  	
   

  
	
   

  	
  6.06 Compliance with Statutes, etc.

  	
   

  
	
   

  	
  6.07 ERISA

  	
   

  
	
   

  	
  6.08
  Good Repair

  	
   

  
	
   

  	
  6.09 End of Fiscal Years; Fiscal Quarters;
  Etc.

  	
   

  
	
   

  	
  6.10 Permitted Acquisitions

  	
   

  
	
   

  	
  6.11 CoBank Capital

  	
   

  
	
   

  	
  6.12 Margin Stock

  	
   

  
	
   

  	
  6.13 Post-Closing Refinancing

  	
   

  
	
   

  	
  6.14 Special Covenant Regarding Cash
  Management Policy

  	
   

  
	
   

  	
  6.15 PIK Requirements

  	
   

  
	
   

  	
  6.16 Interest Rate Protection

  	
   

  

 

ii

 

	
   

  	
  6.17 Maintenance of Company Separateness

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7. Negative Covenants

  	
   

  
	
   

  	
   

  
	
   

  	
  7.01 Changes in Business

  	
   

  
	
   

  	
  7.02 Consolidation, Merger, Sale or
  Purchase of Assets, etc.

  	
   

  
	
   

  	
  7.03 Liens

  	
   

  
	
   

  	
  7.04 Indebtedness

  	
   

  
	
   

  	
  7.05 Capital Expenditures.

  	
   

  
	
   

  	
  7.06 Advances, Investments and Loans

  	
   

  
	
   

  	
  7.07 Limitation on Creation of Subsidiaries

  	
   

  
	
   

  	
  7.08 Modifications

  	
   

  
	
   

  	
  7.09 Restricted Payments, Etc.

  	
   

  
	
   

  	
  7.10
  Transactions with Affiliates

  	
   

  
	
   

  	
  7.11 Interest Coverage Ratio

  	
   

  
	
   

  	
  7.12 Leverage Ratio

  	
   

  
	
   

  	
  7.13
  Limitation On Issuance of Equity Interests

  	
   

  
	
   

  	
  7.14 Designated Senior Debt

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8. Events of Default

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  8.01
  Payments

  	
   

  
	
   

  	
  8.02 Representations, etc.

  	
   

  
	
   

  	
  8.03 Covenants

  	
   

  
	
   

  	
  8.04
  Default Under Other Agreements

  	
   

  
	
   

  	
  8.05 Bankruptcy, etc.

  	
   

  
	
   

  	
  8.06 ERISA

  	
   

  
	
   

  	
  8.07 Pledge Agreement

  	
   

  
	
   

  	
  8.08 Subsidiary Guaranty

  	
   

  
	
   

  	
  8.09 Judgments

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9. Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10. The Agents

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  10.01 Appointment

  	
   

  
	
   

  	
  10.02 Nature of Duties

  	
   

  
	
   

  	
  10.03 Certain Rights of the Agents

  	
   

  
	
   

  	
  10.04 Reliance by Agents

  	
   

  
	
   

  	
  10.05 Notice of Default, etc.

  	
   

  
	
   

  	
  10.06 Nonreliance on Agents and Other Lenders

  	
   

  
	
   

  	
  10.07
  Indemnification

  	
   

  
	
   

  	
  10.08
  Agents in their Individual Capacities

  	
   

  
	
   

  	
  10.09
  Holders

  	
   

  
	
   

  	
  10.10
  Resignation of the Agents

  	
   

  
	
   

  	
  10.11
  Collateral Matters

  	
   

  
	
   

  	
  10.12
  Delivery of Information

  	
   

  

 

iii

 

	
  SECTION
  11. Miscellaneous

  	
   

  
	
   

  	
   

  
	
   

  	
  11.01
  Payment of Expenses, etc.

  	
   

  
	
   

  	
  11.02 Right of Setoff

  	
   

  
	
   

  	
  11.03
  Notices

  	
   

  
	
   

  	
  11.04 Benefit of Agreement

  	
   

  
	
   

  	
  11.05 No Waiver; Remedies Cumulative

  	
   

  
	
   

  	
  11.06 Payments Pro Rata

  	
   

  
	
   

  	
  11.07 Calculations; Computations

  	
   

  
	
   

  	
  11.08 Governing Law; Submission to
  Jurisdiction; Venue; Waiver of Jury Trial

  	
   

  
	
   

  	
  11.09 Counterparts

  	
   

  
	
   

  	
  11.10 Effectiveness

  	
   

  
	
   

  	
  11.11 Headings Descriptive

  	
   

  
	
   

  	
  11.12 Amendment or Waiver

  	
   

  
	
   

  	
  11.13
  Survival

  	
   

  
	
   

  	
  11.14 Domicile of Loans

  	
   

  
	
   

  	
  11.15 Confidentiality

  	
   

  
	
   

  	
  11.16 Lender Register

  	
   

  
	
   

  	
  11.17 Patriot Act Notice

  	
   

  
	
   

  	
  11.18 Post-Closing Actions

  	
   

  
	
   

  	
   

  	
   

  

 

	
  ANNEX I

  	
  —

  	
  Lender Commitments

  	
   

  
	
  ANNEX II

  	
  —

  	
  Lender Addresses

  	
   

  
	
  ANNEX III

  	
  —

  	
  Subsidiaries

  	
   

  
	
  ANNEX IV

  	
  —

  	
  ERISA §3(2) Pension Plans Subject to Title
  IV

  	
   

  
	
  ANNEX V

  	
  —

  	
  Existing Liens

  	
   

  
	
  ANNEX VI

  	
  —

  	
  Scheduled Existing Indebtedness

  	
   

  
	
  ANNEX VII

  	
  —

  	
  Existing Investments

  	
   

  
	
  ANNEX VIII

  	
  —

  	
  Affiliate Transactions

  	
   

  
	
  ANNEX IX

  	
  —

  	
  Existing Letters of Credit

  	
   

  
	
  ANNEX X

  	
  —

  	
  Post-Closing Matters

  	
   

  

 

	
  EXHIBIT A-1

  	
  —

  	
  Form of Notice of Borrowing

  	
   

  
	
  EXHIBIT A-2

  	
  —

  	
  Form of Letter of Credit Request

  	
   

  
	
  EXHIBIT A-3

  	
  —

  	
  Form of Notice of Conversion/Continuation

  	
   

  
	
  EXHIBIT B-1

  	
  —

  	
  Form of B Term Note

  	
   

  
	
  EXHIBIT B-2

  	
  —

  	
  Form of RF Note

  	
   

  
	
  EXHIBIT B-3

  	
  —

  	
  Form of Swingline Note

  	
   

  
	
  EXHIBIT C

  	
  —

  	
  Form of Section 3.04 Certificate

  	
   

  
	
  EXHIBIT D

  	
  —

  	
  Form of Opinion of Paul, Hastings, Janofsky
  & Walker LLP

  	
   

  
	
  EXHIBIT E

  	
  —

  	
  Form of Officer’s Certificate

  	
   

  
	
  EXHIBIT F

  	
  —

  	
  Form of Subsidiary Guaranty

  	
   

  
	
  EXHIBIT G

  	
  —

  	
  Form of Pledge Agreement

  	
   

  
	
  EXHIBIT H

  	
  —

  	
  Form of Solvency Certificate

  	
   

  
	
  EXHIBIT I

  	
  —

  	
  Form of Assignment Agreement

  	
   

  
	
  EXHIBIT J

  	
  —

  	
  Form of Intercompany Subordination
  Agreement

  	
   

  

 

iv

 

	
  EXHIBIT K

  	
  —

  	
  Form of Intercompany Note

  	
   

  
	
  EXHIBIT L

  	
  —

  	
  Form of Incremental B Term Commitment
  Agreement

  	
   

  

 

v

 

CREDIT AGREEMENT, dated as
of February 8, 2005, among FAIRPOINT COMMUNICATIONS, INC., a Delaware
corporation (the “Borrower”), the Lenders from time to time party
hereto, BANK OF AMERICA, N.A., as Syndication Agent (in such capacity, the “Syndication
Agent”), COBANK, ACB and GENERAL ELECTRIC CAPITAL CORPORATION, as
Co-Documentation Agents (in such capacity, each, a “Co-Documentation Agent”
and, collectively, the “Co-Documentation Agents”), and DEUTSCHE BANK
TRUST COMPANY AMERICAS, as Administrative Agent (in such capacity, the “Administrative
Agent” and, together with the Syndication Agent and the Co-Documentation
Agents, collectively, the “Agents”).  Unless otherwise defined
herein, all capitalized terms used herein and defined in Section 9 are
used herein as so defined.

 

W I T N E S S E T H :

 

WHEREAS, subject to and upon
the terms and conditions set forth herein, the Lenders are willing to make
available to the Borrower the respective credit facilities provided for herein;

 

NOW, THEREFORE, IT IS
AGREED:

 

SECTION
1.  Amount and Terms of Credit.

 

1.01  Commitment.  Subject
to and upon the terms and conditions herein set forth (including, in the case
of Incremental B Term Loans, the terms and conditions of Section 1.14), each
Lender severally agrees to make and/or continue a loan or loans (each, a “Loan”
and, collectively, the “Loans”) to the Borrower, as set forth below:

 

(a)           Loans under the Initial B Term
Facility (each, an “Initial B Term Loan” and, collectively, the “Initial
B Term Loans”) (i) shall be made to the Borrower by each Lender with an
Initial B Term Commitment pursuant to a single drawing on the Initial Borrowing
Date, (ii) except as hereinafter provided, may, at the option of the Borrower,
be incurred and maintained as, and/or converted into, Base Rate Loans or
Eurodollar Loans, provided that (x) all Initial B Term Loans made as
part of the same Borrowing shall, unless specifically provided herein, consist
of Initial B Term Loans of the same Type and (y) unless the Administrative
Agent has determined that the Syndication Date has occurred (at which time this
clause (y) shall no longer be applicable), no more than three Borrowings of
Initial B Term Loans to be maintained as Eurodollar Loans may be incurred prior
to the 90th day after the Initial Borrowing Date (or, if later, the last day of
the Interest Period applicable to the third Borrowing of Eurodollar Loans
referred to below), each of which Borrowings of Eurodollar Loans may only have
an Interest Period of one month, and the first of which Borrowings may be made
no earlier than the fourth Business Day, and no later than the fifth Business
Day, after the Initial Borrowing Date, the second of which Borrowings may only
be made on the last day of the Interest Period of the first such Borrowing and
the third of which Borrowings may only be made on the last day of the Interest
Period of the second such Borrowing, and (iii) shall not exceed in aggregate
principal amount for any Lender in respect of any incurrence of Initial B Term
Loans the Initial B Term Commitment, if any, of such Lender as in effect
immediately 

 

 

prior to such incurrence.  Once
prepaid or repaid, Initial B Term Loans may not be reborrowed.

 

(b)           Loans under the Delayed-Draw B Term
Facility (each, a “Delayed-Draw B Term Loan” and, collectively, the “Delayed-Draw
B Term Loans”) (i) shall be made to the Borrower by each Lender with a
Delayed-Draw B Term Commitment pursuant to one or more drawings after the
Initial Borrowing Date for the purposes described in Section 5.05(b), (ii)
except as hereinafter provided, shall, at the option of the Borrower, be
initially incurred as Eurodollar Loans or Base Rate Loans and, immediately
after such incurrence, be converted into Initial B Term Loans in accordance
with the requirements of Section 1.06(b) and (iii) shall not exceed in
aggregate principal amount for any Lender in respect of any incurrence of
Delayed-Draw B Term Loans the Delayed-Draw B Term Commitment, if any, of such
Lender as in effect immediately prior to such incurrence.  Once
prepaid or repaid, Delayed-Draw B Term Loans may not be reborrowed.

 

(c)           Loans under the Revolving Facility
(each, an “RF Loan” and, collectively, the “RF Loans”) (i) shall
be made to the Borrower at any time and from time to time on and after the
Initial Borrowing Date and prior to the RF
Maturity Date, (ii) except as hereinafter provided, may, at the option
of the Borrower, be incurred and maintained as, and/or converted into, Base
Rate Loans or Eurodollar Loans, provided that (x) all RF Loans made
as part of the same Borrowing shall, unless otherwise specifically provided
herein, consist of RF Loans of the same Type and (y) unless the Administrative
Agent has determined that the Syndication Date has occurred (at which time this
clause (y) shall no longer be applicable), no more than three Borrowings of RF
Loans to be maintained as Eurodollar Loans may be incurred prior to the 90th
day after the Initial Borrowing Date (or, if later, the last day of the
Interest Period applicable to the third Borrowing of Eurodollar Loans referred
to below), each of which Borrowings of Eurodollar Loans may only have an
Interest Period of one month, and the first of which Borrowings may only be
made on the same date as the initial Borrowing of Initial B Term Loans that are
maintained as Eurodollar Loans, the second of which Borrowings may only be made
on the last day of the Interest Period of the first such Borrowing and the
third of which Borrowings may only be made on the last day of the Interest
Period of the second such Borrowing, (iii) may be repaid and reborrowed in
accordance with the provisions hereof, and (iv) shall not exceed (giving
effect to any incurrence thereof and the use of the proceeds of such
incurrence) for any Lender in aggregate principal amount at any time
outstanding that amount which, when added to
such Lender’s Percentage of the sum of (x) the Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of RF Loans)
at such time and (y) the outstanding principal amount of Swingline Loans
(exclusive of Swingline Loans which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of RF Loans)
at such time, equals the Available
Revolving Commitment, if any, of such Lender at such time.

 

(d)           Subject to and upon the terms and
conditions herein set forth, the Swingline Lender agrees to make at any time
and from time to time after the Initial Borrowing Date and prior to the
Swingline Expiry Date, a loan or loans to the Borrower 

 

2

 

(each, a “Swingline Loan,” and,
collectively the “Swingline Loans”), which Swingline Loans (i) shall be
made and maintained as Base Rate Loans, (ii) may be repaid and reborrowed in
accordance with the provisions hereof, (iii) shall not exceed in aggregate
principal amount at any time outstanding, when combined with the aggregate
principal amount of all RF Loans then outstanding (exclusive of RF Loans which
are repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Swingline Loans) and the Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Swingline
Loans) at such time, an amount equal to the Total Available Revolving
Commitment then in effect and (iv) shall not exceed in aggregate principal
amount at any time outstanding the Maximum Swingline
Amount.  Notwithstanding anything to the contrary contained in this
Section 1.01(d), (i) the Swingline Lender shall not be obligated to make any
Swingline Loans at a time when a Lender Default exists with respect to an RF
Lender unless the Swingline Lender has entered into arrangements satisfactory
to it and the Borrower to eliminate the Swingline Lender’s risk with respect to
the Defaulting Lender’s or Defaulting Lenders’ participation in such Swingline
Loans, including by cash collateralizing such Defaulting Lender’s or Defaulting
Lenders’ Percentage of the outstanding Swingline Loans, and (ii) the Swingline
Lender shall not make any Swingline Loan after it has received written notice
from the Borrower, any other Credit Party or the Required Lenders stating that
a Default or an Event of Default exists and is continuing until such time as
the Swingline Lender shall have received written notice (A) of rescission of all
such notices from the party or parties originally delivering such notice or
notices or (B) of the waiver of such Default or Event of Default by the
Required Lenders.

 

(e)           On any Business Day, the Swingline
Lender may, in its sole discretion, give notice to the RF Lenders that its
outstanding Swingline Loans shall be funded with a Borrowing of RF Loans (provided
that each such notice shall be deemed to have been automatically given upon the
occurrence of an Event of Default under Section 8.05 or upon the exercise of
any of the remedies provided in the last paragraph of Section 8), in which case
a Borrowing of RF Loans constituting Base Rate Loans (each such Borrowing, a “Mandatory
Borrowing”) shall be made on the immediately succeeding Business Day by all
RF Lenders pro  rata based on each RF Lender’s Percentage, and the
proceeds thereof shall be applied directly to repay the Swingline Lender for
such outstanding Swingline Loans.  Each RF Lender hereby irrevocably
agrees to make Base Rate Loans upon one Business Day’s notice pursuant to each
Mandatory Borrowing in the amount and in the manner specified in the preceding
sentence and on the date specified in writing by the Swingline Lender
notwithstanding:  (i) that the amount of the
Mandatory Borrowing may not comply with the Minimum Borrowing Amount otherwise
required hereunder, (ii) whether any conditions specified in Section 4.02 or
4.03 are then satisfied, (iii) whether a Default or an Event of Default has
occurred and is continuing, (iv) the date of such Mandatory Borrowing and (v)
the amount of the Total Available Revolving Commitment and the Total Revolving
Commitment at such time.  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 a proceeding under the
Bankruptcy Code in respect of the Borrower), each RF Lender (other than the
Swingline Lender) hereby agrees that it shall forthwith purchase from the 

 

3

 

Swingline Lender (without recourse or
warranty) such assignment of the outstanding Swingline Loans as shall be
necessary to cause the RF Lenders to share in such Swingline Loans ratably
based upon their respective Percentages, provided that (x) all
interest payable on the Swingline Loans shall be for the account of the
Swingline Lender until the date as of which the respective participation is
required to be purchased and, to the extent attributable to the purchased
participation, shall be payable to the RF Lender purchasing same from and after
such date and (y) at the time any purchase of participations pursuant to this
sentence is actually made, the purchasing RF Lender shall be required to pay
the Swingline 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 to but excluding the date of payment
for such participation, at the overnight Federal Funds Effective Rate for the
first three days and at the interest rate otherwise applicable to RF Loans
maintained as Base Rate Loans hereunder for each day thereafter.

 

(f)            Loans under the Incremental B Term Facility (each, an “Incremental
B Term Loan” and, collectively, the “Incremental B Term Loans”) (i)
shall be made to the Borrower by each Lender with an Incremental B Term Commitment pursuant to a single drawing on the
respective Incremental B Term Loan Borrowing Date, (ii) except as hereinafter
provided, may, at the option of the Borrower, be incurred and maintained as,
and/or converted into, Base Rate Loans or Eurodollar Loans, provided
that all Incremental B Term Loans incurred on such Incremental B Term Loan
Borrowing Date shall be added to the then outstanding Borrowings of Initial B
Term Loans as provided in Section 1.14(c) and (iii) shall not exceed in an
aggregate principal amount for any Lender in respect of any incurrence of
Incremental B Term Loans the Incremental B Term
Commitment, if any, of such Lender as in effect immediately prior to such
incurrence.  Once prepaid or repaid, Incremental B Term Loans may not
be reborrowed.

 

1.02  Minimum
Borrowing Amounts, etc.  The
aggregate principal amount of each Borrowing shall not be less than the Minimum
Borrowing Amount.  More than one Borrowing may be incurred on any
day, provided that at no time shall there be outstanding more than
twelve Borrowings of Eurodollar Loans.

 

1.03  Notice of
Borrowing.  (a)  Whenever
the Borrower desires to incur Loans under any Facility (excluding Swingline
Loans and RF Loans made pursuant to a Mandatory Borrowing), it shall give the
Administrative Agent at its Notice Office, (x) prior to 12:00 Noon
(New York time), at least three Business Days’ prior written notice (or
telephonic notice promptly confirmed in writing) of each proposed incurrence of
Eurodollar Loans and (y) prior to 12:00 Noon (New York time) on the
proposed date thereof, written notice (or telephonic notice promptly confirmed
in writing) of each proposed incurrence of Base Rate Loans.  Each
such notice (each, a “Notice of Borrowing”) shall be in the form of
Exhibit A-1 and shall be irrevocable and shall specify (i) the Facility
pursuant to which such incurrence is being made, (ii) the aggregate principal
amount of the Loans to be made pursuant to such incurrence, (iii) the date of
incurrence (which shall be a Business Day) and (iv) whether the respective
Borrowing shall consist of Base Rate Loans or Eurodollar Loans and, if
Eurodollar Loans, the Interest Period to be initially applicable
thereto.  The Administrative Agent shall promptly give each Lender
written notice (or telephonic notice promptly confirmed in writing) of each
proposed incurrence 

 

4

 

of
Loans of such Lender’s proportionate share thereof and of the other matters
covered by the Notice of Borrowing.

 

(b)           (i)  Whenever
the Borrower desires to make a Borrowing of Swingline Loans hereunder, it shall
give the Swingline Lender, prior to 12:00 Noon  (New York time) on
the day such Swingline Loan is to be made, written notice (or telephonic notice
promptly confirmed in writing) of each Swingline Loan to be made
hereunder.  Each such notice shall be irrevocable and shall specify
in each case (x) the date of such Borrowing (which shall be a Business Day) and
(y) the aggregate principal amount of the Swingline Loan to be made pursuant to
such Borrowing.

 

(ii)           Mandatory Borrowings shall be made upon the notice
specified in Section 1.01(e), with the Borrower irrevocably agreeing, by its
incurrence of any Swingline Loan, to the making of Mandatory Borrowings as set
forth in such Section 1.01(e).

 

(c)           Without in any way
limiting the obligation of the Borrower to confirm in writing any telephonic
notice permitted to be given hereunder, the Administrative Agent, the Swingline
Lender and any Letter of Credit Issuer, prior to receipt of written
confirmation may act without liability upon the basis of and consistent with
such telephonic notice, believed by the Administrative Agent, the Swingline
Lender or such Letter of Credit Issuer, as the case may be, in good faith to be
from an Authorized Officer.  In each such case, the Borrower hereby
waives the right to dispute the Administrative Agent’s, the Swingline Lender’s
or such Letter of Credit Issuer’s record of the terms of such telephonic
notice, unless such record reflects gross negligence or willful misconduct on
the part of the Administrative Agent, the Swingline Lender or such Letter of
Credit Issuer, as the case may be (as determined by a court of competent
jurisdiction in a final and nonappealable decision).

 

1.04  Disbursement
of Funds.  (a)  No later
than 1:00 P.M. (New York time) (3:00 P.M. (New York time) in the case of Base
Rate Loans made pursuant to same day notice) on the date specified in each
Notice of Borrowing (or, where applicable, each notice described in Section
1.03(b)(i) or (ii)), each Lender with a Commitment under the respective
Facility will make available its pro  rata share of each Borrowing
requested to be made on such date (or (x) in the case of Swingline Loans, the
Swingline Lender will make available the full amount thereof or (y) in the case
of a funding of Incremental B Term Loans on an Incremental B Term Loan
Borrowing Date, in an amount equal to such Lender’s Incremental B Term Commitment on such date).  All such
amounts shall be made available to the Administrative Agent in Dollars and
immediately available funds at the Payment Office and, except in the case of RF
Loans made pursuant to a Mandatory Borrowing, the Administrative Agent promptly
will make available to the Borrower by depositing to its account at the Payment
Office or as otherwise directed in the applicable Notice of Borrowing the
aggregate of the amounts so made available in the type of funds received.  Unless
the Administrative Agent shall have been notified by any Lender prior to the
date of the proposed incurrence that such Lender does not intend to make
available to the Administrative Agent its portion of the Borrowing or
Borrowings to be made on such date, the Administrative Agent may assume that
such Lender has made such amount available to the Administrative Agent on such
date, and the Administrative Agent, in reliance upon such assumption, may (in
its sole discretion and without any obligation to do so) make available to the
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to

 

5

 

the
Administrative Agent by such Lender and the Administrative Agent has made
available same to the Borrower, the Administrative Agent shall be entitled to
recover such corresponding amount from such Lender.  If such Lender
does not pay such corresponding amount forthwith upon the Administrative Agent’s
demand therefor, the Administrative Agent may notify the Borrower, and, upon
receipt of such notice, the Borrower shall promptly pay such corresponding
amount to the Administrative Agent.  The Administrative Agent shall
also be entitled to recover on demand from such Lender or the Borrower, as the
case may be, interest on such corresponding amount in respect of each day from
the date such corresponding amount was made available by the Administrative
Agent to the Borrower to the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (x) if paid by such Lender,
the overnight Federal Funds Effective Rate or (y) if paid by the Borrower, the
then applicable rate of interest, calculated in accordance with Section 1.08,
for the respective Loans.

 

(b)           Nothing herein shall
be deemed to relieve any Lender from its obligation to fulfill its commitments
hereunder or to prejudice any rights which the Borrower may have against any
Lender as a result of any default by such Lender hereunder.

 

1.05  Notes.  (a)  The Borrower’s obligation to pay the
principal of, and interest on, the Loans made by each Lender shall be set forth
in the Lender Register maintained by the Administrative Agent pursuant to
Section 11.16 and, subject to the provisions of Section 1.05(f), shall be
evidenced (i) if B Term Loans, by a promissory note substantially in the form
of Exhibit B-1 with blanks appropriately completed in conformity herewith
(each, a “B Term Note” and, collectively, the “B Term Notes”),
(ii) if RF Loans, by a promissory note substantially in the form of Exhibit B-2
with blanks appropriately completed in conformity herewith (each, an “RF
Note” and, collectively, the “RF Notes”) and (iii) if Swingline
Loans, by a promissory note substantially in the form of Exhibit B-3 with
blanks appropriately completed in conformity herewith (the “Swingline Note”).

 

(b)           The B Term Note
issued to each Lender that makes any B Term Loan shall (i) be executed by
the Borrower, (ii) be payable to the order of such Lender and be dated the
Initial Borrowing Date (or, if issued after the Initial Borrowing Date, be
dated the date of the issuance thereof), (iii) be in a stated principal amount
equal to the Initial B Term Commitment of such Lender on the Initial Borrowing
Date (or, if issued after the Initial Borrowing Date, be in a stated principal
amount equal to the outstanding principal amount of B Term Loans of such Lender
at such time) and be payable in the principal amount of B Term Loans evidenced
thereby, (iv) mature on the Term Loan Maturity Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the Base Rate
Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be
subject to mandatory repayment as provided in Section 3.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.

 

(c)           The RF Note issued
to each RF Lender shall (i) be executed by the Borrower, (ii) be payable to the
order of such RF Lender and be dated the Initial Borrowing Date (or, in the
case of any RF Note issued after the Initial Borrowing Date, the date of
issuance thereof), (iii) be in a stated principal amount equal to the Revolving
Commitment of such RF Lender and be payable in the principal amount of the RF
Loans evidenced thereby, (iv) mature on the RF Maturity Date, (v) bear interest
as provided in the appropriate clause of Section 1.08 in respect of the Base
Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) 

 

6

 

be subject to
mandatory repayment as provided in Section 3.02 and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents.

 

(d)           The Swingline Note
issued to the Swingline Lender shall (i) be executed by the Borrower, (ii) be
payable to the order of the Swingline Lender and be dated the Initial Borrowing
Date (or, in the case of any Swingline Note issued after the Initial Borrowing
Date, the date of issuance thereof), (iii) be in a stated principal amount
equal to the Maximum Swingline Amount and be payable in the principal amount of
Swingline Loans evidenced thereby, (iv) mature on the Swingline Expiry Date,
(v) bear interest as provided in Section 1.08 in respect of the Base Rate Loans
evidenced thereby, (vi) be subject to mandatory prepayment as provided in
Section 3.02 and (vii) be entitled to the benefits of this Agreement and the
other Credit Documents.

 

(e)           Each Lender will
note on its internal records the amount of each Loan made by it and each
payment in respect thereof and will, prior to any transfer of any of its Notes,
endorse on the reverse side thereof the outstanding principal amount of Loans
evidenced thereby.  Failure to make (or any error in making) any such
notation shall not affect the Borrower’s obligations in respect of such Loans.

 

(f)            Notwithstanding
anything to the contrary contained above or elsewhere in this Agreement, Notes
shall only be delivered to Lenders that at any time specifically request the
delivery of such Notes.  No failure of any Lender to request or
obtain a Note evidencing its Loans to the Borrower shall affect or in any
manner impair the obligations of the Borrower to pay the Loans (and all related
Obligations) which would otherwise be evidenced thereby in accordance with the
requirements of this Agreement, and shall not in any way affect the security or
guaranties therefor provided pursuant to the various Credit
Documents.  Any Lender that does not have a Note evidencing its
outstanding Loans shall in no event be required to make the notations otherwise
described in preceding clause (e).  At any time when any Lender
requests the delivery of a Note to evidence any of its Loans, the Borrower
shall promptly execute and deliver to the respective Lender the requested Note
or Notes in the appropriate amount or amounts to evidence such Loans.

 

1.06  Conversions.  (a)         The Borrower shall have the option to
convert on any Business Day all or a portion at least equal to the applicable
Minimum Borrowing Amount of the outstanding principal amount of the Loans
(other than Swingline Loans, which at all times shall be maintained as Base
Rate Loans) owing pursuant to a single Facility into a Borrowing or Borrowings
pursuant to such Facility of another Type of Loan, provided that (i) no
partial conversion of a Borrowing of Eurodollar Loans shall reduce the
outstanding principal amount of the Eurodollar Loans made pursuant to such
Borrowing to less than the Minimum Borrowing Amount applicable thereto,
(ii) Base Rate Loans may not be converted into Eurodollar Loans when a
Default under Section 8.01 or an Event of Default is in existence on the date
of the proposed conversion if the Administrative Agent or the Required Lenders
shall have determined in its or their sole discretion not to permit such conversion,
(iii) unless the Administrative Agent has determined that the Syndication Date
has occurred (at which time this clause (iii) shall no longer be applicable),
prior to the 90th day after the Initial Borrowing Date, conversions of Base
Rate Loans into Eurodollar Loans may only be made if any such conversion is
effective on the first day of the first, second or third Interest Period
referred to in clause (y) of the proviso 

 

7

 

appearing
in each of Sections 1.01(a)(ii) and 1.01(c)(ii) and so long as such conversion
does not result in a greater number of Borrowings of Eurodollar Loans prior to
the 90th day after the Initial Borrowing Date as are permitted under Sections
1.01(a)(ii) and 1.01(c)(ii) and (iv) Borrowings of Eurodollar Loans resulting
from this Section 1.06 shall be limited in number as provided in Section
1.02.  Each such conversion shall be effected by the Borrower giving
the Administrative Agent at its Notice Office, prior to 12:00 Noon (New York
time), at least three Business Days’ (or one Business Day’s, in the case of a
conversion into Base Rate Loans) prior written notice (or telephonic notice
promptly confirmed in writing) (each, a “Notice of Conversion/Continuation”)
in the form of Exhibit A-3, appropriately completed to specify the Loans to be
so converted (including the relevant Facility), the Type of Loans to be
converted into and, if to be converted into a Borrowing of Eurodollar Loans,
the Interest Period to be initially applicable thereto.  The
Administrative Agent shall give each Lender prompt notice of any such proposed
conversion affecting any of its Loans.

 

(b) On the date (each, a “DDTL Conversion Date”) of each
incurrence of Delayed-Draw Term Loans (immediately after giving effect
thereto), all Delayed-Draw Term Loans outstanding on such date shall be
automatically (and without further action) converted into, and thereafter
constitute, Initial B Term Loans for all purposes of this Agreement and the
other Credit Documents (other than for purposes of Sections 1.01(a)(i) and
(iii) and Sections 4.01(l) and 5.05(a)), with such conversion to be effected in
accordance with the following rules (each, a “DDTL Conversion”):

 

(i)            the
Delayed-Draw Term Loans incurred on a given DDTL Conversion Date (immediately
prior to giving effect to the DDTL Conversion on such date) shall, upon the
occurrence of the DDTL Conversion, be proportionately added to (and thereafter
be deemed to constitute a part of) each then existing Borrowing of Initial B
Term Loans, even though as a result thereof such newly-converted Initial B Term
Loans may (x) if initially incurred as Eurodollar Loans, effectively have a
shorter Interest Period than the then existing Borrowings of outstanding
Initial B Term Loans to which they are added and (y) if initially incurred as
Base Rate Loans, bear interest at a different rate than the existing Borrowing
or Borrowings of Initial B Term Loans to which they are added;

 

(ii)           if
requested by any Lender, the Borrower shall pay to such Lender (x) if the
Delayed-Draw Term Loans incurred pursuant to a given DDTL Conversion were
initially incurred as Eurodollar Loans, such amounts necessary, as reasonably
determined by such Lender, to compensate such Lender for “making” (by way of
conversion) such Initial B Term Loans during an existing Interest Period
(rather than at the beginning of the respective Interest Period applicable to
the existing Borrowings of Initial B Term Loans, based upon the rates then
applicable thereto) and (y) if the Delayed-Draw Term Loans incurred pursuant to
a given DDTL Conversion were incurred as Base Rate Loans, such amounts
necessary, as reasonably determined by such Lender, to equalize the interest
rate applicable to the existing Borrowings of Initial B Term Loans of such
Lender and the interest rate applicable to the newly-converted Initial B Term
Loans converted pursuant to such DDTL Conversion; and

 

(iii)          the Administrative Agent shall (and is
hereby authorized to) take all appropriate actions in connection with the DDTL
Conversion to ensure that all Lenders 

 

8

 

with outstanding Initial B Term Loans (after giving effect to the DDTL
Conversion) participate in each Borrowing of Initial B Term Loans on a pro
rata basis.

 

1.07  Pro Rata
Borrowings.  All Initial B Term Loans, Delayed-Draw B Term Loans,
Incremental B Term Loans and RF Loans under this Agreement shall be made by the
Lenders pro  rata on the basis of their Initial B Term
Commitments, Delayed-Draw B Term Commitments, Incremental B Term Commitments or
Revolving Commitments, as the case may be, if any.  It is understood
that no Lender shall be responsible for any default by any other Lender in its
obligation to make Loans hereunder and that each Lender shall be obligated to
make the Loans provided to be made by it hereunder, regardless of the failure
of any other Lender to fulfill its commitments hereunder.

 

1.08  Interest.  (a)  The unpaid principal amount of each Base Rate
Loan shall bear interest from the date of the Borrowing thereof until the
earlier of repayment or conversion thereof and maturity (whether by
acceleration or otherwise) at a rate per annum which shall at all times be the
Applicable Base Rate Margin plus the Base Rate in effect from time to
time.

 

(b)           The unpaid principal
amount of each Eurodollar Loan shall bear interest from the date of the
Borrowing thereof until the earlier of repayment or conversion thereof and
maturity (whether by acceleration or otherwise) at a rate per annum which shall
at all times be the Applicable Eurodollar Margin plus the relevant
Eurodollar Rate.

 

(c)           Interest in respect
of any overdue amount payable hereunder shall accrue at a rate per annum equal
to the Base Rate in effect from time to time plus the sum of (i) 2% and
(ii) the Applicable Base Rate Margin, provided that principal in respect
of Eurodollar Loans shall bear interest from the date the same becomes due
(whether by acceleration or otherwise) until the end of the Interest Period
then applicable to such Eurodollar Loan at a rate per annum no less than one
which is equal to 2% in excess of the rate of interest applicable thereto on
such date.

 

(d)           Interest shall
accrue from and including the date of any Borrowing to but excluding the date
of any repayment thereof and shall be payable (i) in respect of each Base Rate
Loan, quarterly in arrears on the last Business Day of each March, June,
September and December, (ii) in respect of each Eurodollar Loan, on the last
day of each Interest Period applicable thereto and, in the case of an Interest
Period in excess of three months, on each date occurring at three month
intervals after the first day of such Interest Period, and (iii) in respect of
each such Loan, on any prepayment or conversion (on the amount prepaid or converted),
at maturity (whether by acceleration or otherwise) and, after such maturity, on
demand.

 

(e)           All computations of
interest hereunder shall be made in accordance with Section 11.07(b).

 

(f)            The Administrative
Agent, upon determining the interest rate for any Borrowing of Eurodollar Loans
for any Interest Period, shall promptly notify the Borrower and the Lenders
thereof.

 

1.09  Interest
Periods.  (a)  At the time
the Borrower gives a Notice of Borrowing or Notice of Conversion/Continuation
in respect of the making of, or conversion into, a 

 

9

 

Borrowing
of Eurodollar Loans (in the case of the initial Interest Period applicable
thereto) or prior to 12:00 Noon (New York time) on the third Business Day prior
to the expiration of an Interest Period applicable to a Borrowing of Eurodollar
Loans, it shall have the right to elect by giving the Administrative Agent
written notice (or telephonic notice promptly confirmed in writing) of the
Interest Period applicable to such Borrowing, which Interest Period shall, at
the option of the Borrower (but otherwise subject to clause (y) of the provisos
appearing in Sections 1.01(a)(ii) and 1.01(c)(ii) and clause (iii) of the
proviso appearing in Section 1.06), be a one, two, three, six or, to the extent
available to all Lenders with a Commitment and/or outstanding Loans under the
respective Facility, nine or twelve month period (or, in the case of the
initial Interest Period for Delayed-Draw Term Loans or Incremental B Term
Loans, such other period (not to exceed one-month) acceptable to the
Administrative Agent).  Notwithstanding anything to the contrary
contained above:

 

(i)            the initial Interest Period for any
Borrowing of Eurodollar Loans shall commence on the date of such Borrowing
(including the date of any conversion from a Borrowing of Base Rate Loans) and
each Interest Period occurring thereafter in respect of such Borrowing shall
commence on the day on which the next preceding Interest Period expires;

 

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

 

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

 

(iv)          no Interest Period with respect to a
Borrowing of RF Loans, B Term Loans or Delayed-Draw B Term Loans shall extend
beyond the Maturity Date for the respective Facility of Loans; and

 

(v)           no Interest Period may be elected at
any time when a Default under Section 8.01 or an Event of Default is then in
existence if the Administrative Agent or the Required Lenders shall have
determined in its or their sole discretion not to permit such election.

 

(b)           If upon the
expiration of any Interest Period, the Borrower has failed to (or may not)
elect a new Interest Period to be applicable to the respective Borrowing of
Eurodollar Loans as provided above, the Borrower shall be deemed to have
elected to convert such Borrowing into a Borrowing of Base Rate Loans effective
as of such expiration.

 

1.10  Increased
Costs, Illegality, etc.  (a)  In the event that (x) in the case of clause
(i) below, the Administrative Agent or (y) in the case of clauses (ii) and
(iii) below, any Lender shall have determined (which determination shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto):

 

10

 

(i)            on any date for determining the
Eurodollar Rate for any Interest Period that, by reason of any changes arising
after the Effective Date affecting the interbank Eurodollar market, adequate
and fair means do not exist for ascertaining the applicable interest rate on
the basis provided for in the definition of Eurodollar Rate or the making or
continuance of any Eurodollar Loan has become impracticable as a result of a
contingency occurring after the Effective Date which materially and adversely
affects the interbank Eurodollar market;

 

(ii)           at any time, that such Lender shall
incur increased costs or reductions in the amounts received or receivable
hereunder with respect to any Eurodollar Loans because of (x) any change since
the Effective Date in any applicable law, governmental rule, regulation,
guideline or order (or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule, regulation,
guideline or order) (including, but not limited to, a change in the basis of
taxation of payments to a Lender of the principal of or interest on the Loans
or any other amounts payable hereunder (except for changes in the rate of tax
on, or determined by reference to, the net income or net profits of such Lender
imposed by the jurisdiction in which its principal office or applicable lending
office is located) or a change in official reserve requirements, but, in all
events, excluding reserves required under Regulation D to the extent included
in the computation of the Eurodollar Rate) and/or (y) other circumstances
affecting the interbank Eurodollar market or the position of such Lender in
such market; or

 

(iii)          at any time, that the making or
continuance of any Eurodollar Loan has become unlawful by compliance by such
Lender in good faith with any law, governmental rule, regulation, guideline or
order (or would conflict with any such governmental rule, regulation, guideline
or order not having the force of law but with which such Lender customarily complies
even though the failure to comply therewith would not be unlawful);

 

then, and in any such event, such Lender (or the
Administrative Agent in the case of clause (i) above) shall (x) on such date
and (y) within ten Business Days of the date on which such event no longer
exists give notice (by telephone confirmed in writing) to the Borrower and to
the Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Lenders).  Thereafter
(x) in the case of clause (i) above, Eurodollar Loans shall no longer be
available until such time as the Administrative Agent notifies the Borrower and
the Lenders that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion/Continuation given by the Borrower with respect to Eurodollar Loans
which have not yet been incurred shall be deemed rescinded by the Borrower, (y)
in the case of clause (ii) above, the Borrower shall pay to such Lender, within
10 Business Days after the Borrower’s receipt of written demand therefor, such
additional amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as such Lender in its reasonable discretion
shall determine after consultation with the Borrower) as shall be required to
compensate such Lender for such increased costs or reductions in amounts
receivable hereunder (a written notice as to the additional amounts owed to
such Lender, describing the basis for such increased costs and showing the
calculation thereof, submitted to the Borrower by such Lender shall, absent
manifest error, be final and conclusive and binding upon all parties hereto)
and (z) in the 

 

11

 

case of clause (iii) above, the Borrower shall take one of
the actions specified in Section 1.10(b) as promptly as possible and, in any
event, within the time period required by law.

 

(b)           At any time that any
Eurodollar Loan is affected by the circumstances described in Section
1.10(a)(ii), the Borrower may (and in the case of a Eurodollar Loan affected
pursuant to Section 1.10(a)(iii), the Borrower shall within the time period
required by law) either (x) if the affected Eurodollar Loan is then being made
pursuant to a Borrowing, cancel said Borrowing by giving the Administrative
Agent telephonic notice (confirmed promptly in writing) thereof on the same
date that the Borrower was notified by a Lender pursuant to Section 1.10(a)(ii)
or (iii), or (y) if the affected Eurodollar Loan is then outstanding, upon at
least three Business Days’ notice to the Administrative Agent, require the
affected Lender to convert each such Eurodollar Loan into a Base Rate Loan
(which conversion, in the case of the circumstances described in Section
1.10(a)(iii), shall occur no later than the last day of the Interest Period
then applicable to such Eurodollar Loan (or such earlier date as shall be
required by applicable law)); provided, that if more than one Lender is
affected at any time, then all affected Lenders must be treated the same
pursuant to this Section 1.10(b).

 

(c)           If any Lender shall
have determined that the adoption or effectiveness of any applicable law, rule
or regulation regarding capital adequacy, or any change therein, or any change
in the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, in each case after the Effective Date, or compliance by
such Lender or its parent corporation with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency first made after the Effective
Date, has or would have the effect of reducing the rate of return on such
Lender’s or its parent corporation’s capital or assets as a consequence of its
commitments or obligations hereunder to a level below that which such Lender or
its parent corporation could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender’s or
its parent corporation’s policies with respect to capital adequacy), then from
time to time, within 10 Business Days after demand by such Lender (with a copy
to the Administrative Agent), the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or its parent
corporation for such reduction.  Each Lender, upon determining in
good faith that any additional amounts will be payable pursuant to this Section
1.10(c), will give prompt written notice thereof to the Borrower, which notice
shall describe the basis for such claim and set forth in reasonable detail the
calculation of such additional amounts, although the failure to give any such
notice shall not release or diminish any of the Borrower’s obligations to pay
additional amounts pursuant to this Section 1.10(c) upon the subsequent receipt
of such notice.

 

1.11  Compensation.  (a)  The Borrower shall, without duplication,
compensate each Lender, upon its written request (which request shall set forth
the basis for requesting such compensation and reasonably detailed calculations
thereof), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Lender
to fund its Eurodollar Loans but excluding in any event the loss of anticipated
profits) which such Lender may sustain: 
(i) if for any reason (other than a default by any Lender or the
Administrative Agent) a Borrowing of Eurodollar Loans by the Borrower does not
occur on a date specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation (whether or not 

 

12

 

withdrawn
by the Borrower or deemed withdrawn pursuant to Section 1.10(a)); (ii) if any
prepayment, repayment or conversion of any of its Eurodollar Loans occurs on a
date which is not the last day of an Interest Period applicable thereto; (iii)
if any prepayment of any of its Eurodollar Loans is not made on any date
specified in a notice of prepayment given by the Borrower; or (iv) as a
consequence of (w) a DDTL Conversion, (x) any other default by the Borrower to
repay its Eurodollar Loans when required by the terms of this Agreement, (y) an
election made pursuant to Section 1.10(b) or (z) actions required to be taken
by the Borrower pursuant to Section 1.14(c).

 

(b)           Notwithstanding
anything in this Agreement to the contrary, to the extent any notice or request
required by Section 1.10, 1.11, 1A.06 or 3.04 of this Agreement is given by any
Lender more than 120 days after such Lender obtained, or reasonably should have
obtained, knowledge of the occurrence of the event giving rise to the
additional costs, reductions in amounts, losses, taxes or other additional
amounts of the type described in such Section, such Lender shall not be
entitled to compensation under Section 1.10, 1.11, 1A.06 or 3.04 of this
Agreement for any amounts incurred or accruing prior to the giving of such
notice to the Borrower.

 

1.12  Change of
Lending Office.  Each Lender agrees that, upon the occurrence of
any event giving rise to the operation of Section 1.10(a)(ii) or (iii), 1.10(c),
1A.06 or 3.04 with respect to such Lender, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans affected by such
event, provided that such designation is made on such terms that such
Lender and its lending office suffer no material economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to the operation of any such Section.  Nothing in this Section
1.12 shall affect or postpone any of the obligations of the Borrower or the
right of any Lender provided in Section 1.10, 1A.06 or 3.04.

 

1.13  Replacement of Lenders.  (x)
Upon the occurrence of any event giving rise to the operation of Section
1.10(a)(ii) or (iii), Section 1.10(c), Section 1A.06 or Section 3.04 with
respect to any Lender which results in such Lender charging to the Borrower
increased costs in a material amount in excess of those being generally charged
by the other Lenders, (y) if any Lender becomes a Defaulting Lender, or (z) in
the case of a refusal by a Lender to consent to a proposed change, waiver,
discharge or termination with respect to this Agreement which has been approved
by the Required Lenders as provided in Section 11.12(b), the Borrower shall
have the right, in accordance with Section 11.04(b), if no Default under
Section 8.01 or Event of Default then exists or would exist after giving effect
to such replacement, to replace such Lender (the “Replaced Lender”) with
one or more other Eligible Transferee or Eligible Transferees, none of whom
shall constitute a Defaulting Lender at the time of such replacement
(collectively, the “Replacement Lender”) and each of which shall be
reasonably acceptable to the Administrative Agent or, at the option of the
Borrower, to replace only (a) the Revolving Commitment (and outstandings
pursuant thereto) of the Replaced Lender with an identical Revolving Commitment
provided by the Replacement Lender or (b) in the case of a replacement as
provided in Section 11.12(b) where the consent of the respective Lender is
required with respect to less than all Facilities, the Commitments and/or
outstanding Loans of such Lender in respect of each Facility where the consent
of such Lender would otherwise be individually 

 

13

 

required, with identical Commitments and/or Loans of the respective
Facility provided by the Replacement Lender; provided that:

 

(i)            at the time of any replacement pursuant to this Section
1.13, the Replacement Lender shall enter into one or more Assignment Agreements
pursuant to Section 11.04(b) (and with all fees payable pursuant to said
Section 11.04(b) to be paid by the Replacement Lender and/or the Replaced
Lender (as agreed between them)) pursuant to which the Replacement Lender shall
acquire all of the Commitments and outstanding Loans (or, in the case of the
replacement of only (a) the Revolving Commitment, the Revolving Commitment and
outstanding Revolving Loans and participations in Letter of Credit Outstandings
and/or (b) the Commitments and/or outstanding Term Loans under a given Facility
of Term Loans, the Commitment and outstanding Term Loans under the Facility
with respect to which such Lender is being replaced) of, and in each case
(except for the replacement of only the outstanding Commitments and/or Term
Loans of any or all of the Facilities of Term Loans of the respective Lender)
participations in Letters of Credit by, the Replaced Lender and, in connection
therewith, shall pay to (x) the Replaced Lender in respect thereof an amount
equal to the sum of (A) an amount equal to the principal of, and all accrued
interest on, all outstanding Loans (or of the Loans of the respective Facility
being replaced) of the Replaced Lender, (B) an amount equal to all Unpaid
Drawings (unless there are no Unpaid Drawings with respect to the Facility
being replaced) that have been funded by (and not reimbursed to) such Replaced
Lender, together with all then unpaid interest with respect thereto at such
time and (C) an amount equal to all accrued, but theretofore unpaid, Fees owing
to the Replaced Lender (but only with respect to the relevant Facility, in the
case of the replacement of less than all Facilities of Loans then held by the
respective Replaced Lender) pursuant to Section 2.01, (y) except in the
case of the replacement of only the Commitments and/or outstanding Term Loans
of one or more Facilities of Term Loans of a Replaced Lender, each Letter of
Credit Issuer an amount equal to such Replaced Lender’s Percentage of any
Unpaid Drawing relating to Letters of Credit issued by such Letter of Credit
Issuer (which at such time remains an Unpaid Drawing) to the extent such amount
was not theretofore funded by such Replaced Lender and (z) in the case of any
replacement of Revolving Commitments, the Swingline Lender an amount equal to
such Replaced Lender’s Percentage of any Mandatory Borrowing to the extent such
amount was not theretofore funded by such Replaced Lender; and

 

(ii)           all obligations of the Borrower then owing to the Replaced
Lender (other than those (a) specifically described in clause (i) above in
respect of which the assignment purchase price has been, or is concurrently
being, paid, but including all amounts, if any, owing under Section 1.11 or (b)
relating to any Facility of Loans and/or Commitments of the respective Replaced
Lender which will remain outstanding after giving effect to the respective
replacement) shall be paid in full to such Replaced Lender concurrently with
such replacement.

 

Upon the execution of the
respective Assignment Agreements, the payment of amounts referred to in clauses
(i) and (ii) above, recordation of the assignment on the Lender Register by the
Administrative Agent pursuant to Section 11.16 and, if so requested by the
Replacement Lender, delivery to the Replacement Lender of the appropriate Note
or Notes 

 

14

 

executed
by the Borrower, (x) the Replacement Lender shall become a Lender hereunder
and, unless the respective Replaced Lender continues to have outstanding Term
Loans and/or a Commitment hereunder, the Replaced Lender shall cease to
constitute a Lender hereunder, except with respect to indemnification
provisions under this Agreement (including, without limitation, Sections 1.10,
1.11, 1A.06, 3.04, 11.01 and 11.06), which shall survive as to such Replaced
Lender and (y) except in the case of the replacement of only Commitments and/or
outstanding Term Loans under one or more Facilities of Term Loans, the
Percentages of the RF Lenders shall be automatically adjusted at such time to
give effect to such replacement.

 

1.14  Incremental B Term Loan Commitments.  (a)  The Borrower, with the prior consent of the
Administrative Agent, shall have the right to request from time to time (by
written notice to the Lenders) that one or more Lenders (and/or one or more
other Persons which will become Lenders as provided below) provide Incremental
B Term Commitments and, subject to the terms and conditions contained in this
Agreement, make Incremental B Term Loans pursuant thereto, so long as (w) no
Default or Event of Default then exists or would result therefrom, (x) any
Incremental B Term Loans are incurred on the date of the effectiveness of the respective
Incremental B Term Commitment Agreement pursuant to which the related
Incremental B Term Commitments are provided, (y) the Borrower shall have
demonstrated to the Administrative Agent’s reasonable satisfaction that the
full amount of the respective Incremental B Term Facility (assuming the full
utilization of the Incremental B Term Commitments thereunder) may be incurred
without violating the terms of any Permitted Junior Capital, any Permitted
Senior Unsecured Notes, any other material debt of the Borrower or the
documentation governing any such Indebtedness and (z) the Borrower and its
subsidiaries are in compliance on a Pro Forma
Basis with each of the covenants contained in Sections 7.11 and 7.12
(determined after giving effect to the full utilization of the commitments
provided under such Incremental B Term Facility); it being understood and
agreed, however, that (i) no Lender shall be obligated to provide an
Incremental B Term Commitment as a result of any such request by the Borrower,
and until such time, if any, as such Lender has agreed in its sole discretion
to provide an Incremental B Term Commitment and executed and delivered to the
Administrative Agent an Incremental B Term Commitment Agreement as provided in
clause (b) of this Section 1.14, such Lender shall not be obligated to fund any
Incremental B Term Loans, (ii) any Lender (or, in the circumstances
contemplated by clause (v) below, any other Person which will qualify as an
Eligible Transferee) may so provide an Incremental B Term Commitment without
the consent of any other Lender, (iii) each provision of Incremental B Term
Commitments pursuant to this Section 1.14 on a given date shall be in a minimum
aggregate amount (for all Lenders (including in the circumstances contemplated
by clause (v) below, Eligible Transferees who will become Lenders)) of at least
$20,000,000 and in integral multiples of $5,000,000 in excess thereof, (iv) the
aggregate amount of all Incremental B Term Commitments permitted to be provided
pursuant to this Section 1.14 shall not exceed $200,000,000, (v) if the
Borrower has first requested the then existing Lenders (other than Defaulting
Lenders) to provide at least 75% of the aggregate Incremental B Term
Commitments then being requested pursuant to this Section 1.14, then the
Borrower may request Incremental B Term Commitments from Persons reasonably
acceptable to the Administrative Agent which would qualify as Eligible
Transferees hereunder in an aggregate amount equal to the sum of (x) 25% of the
aggregate Incremental B Term Commitments then being requested pursuant to this
Section 1.14 plus (y) if the Borrower has not received Incremental B
Term Commitments in an aggregate amount equal to 75% of that aggregate amount
of the Incremental B Term Commitments which the Borrower desires to 

 

15

 

obtain pursuant to such request (as set forth in the notice provided by
the Borrower in connection with its initial request), the amount of such
deficiency, provided that any such Incremental B Term Commitment
provided by any such Eligible Transferee which is not already a Lender shall be
in a minimum amount (for such Eligible Transferee) of at least $1,000,000 (and
with the fees to be paid to such Eligible Transferee to be no greater than
those fees to be paid to the then existing Lenders (if any) providing
Incremental B Term Commitments) and (vi) all actions taken by the Borrower
pursuant to this Section 1.14 shall be done in coordination with the
Administrative Agent.

 

(b)           In
connection with any provision of Incremental B Term Commitments pursuant to
this Section 1.14, (i) the Borrower, the Administrative Agent and each such
Lender or other Eligible Transferee (each, an “Incremental B Term Lender”)
which agrees to provide an Incremental B Term Commitment shall execute and
deliver to the Administrative Agent an Incremental B Term Commitment Agreement
substantially in the form of Exhibit L hereto (appropriately completed) (each,
an “Incremental B Term Commitment Agreement”), with the effectiveness of
such Incremental B Term Lender’s Incremental B Term Commitment to occur upon
delivery of such Incremental B Term Commitment Agreement to the Administrative
Agent, the payment of any fees required in connection therewith (including,
without limitation, any agreed upon up-front or arrangement fees owing to the
Administrative Agent) and the satisfaction of the other terms and conditions
described in this Section 1.14 (it being understood that no fees shall be
required to be paid to any existing Lender (in its capacity as such) in
connection with the provision of any Incremental B Term Commitment by an
Incremental B Term Lender), and (ii) the Borrower shall deliver to the
Administrative Agent (x) an opinion or opinions, in form and substance reasonably
satisfactory to the Administrative Agent, from counsel to the Borrower
reasonably satisfactory to the Administrative Agent and dated the applicable
Incremental B Term Loan Borrowing Date, covering such matters relating to the
provision of the Incremental B Term Commitments as may be reasonably requested
by the Administrative Agent and (y) a solvency certificate from the Chief
Financial Officer of the Borrower, dated the applicable Incremental B Term Loan
Borrowing Date, in form and substance satisfactory to the Administrative Agent.
The Administrative Agent shall promptly notify each Lender as to the
effectiveness of each Incremental B Term Commitment Agreement, and at such time
(A) Annex I to the Credit Agreement shall be deemed modified to reflect the
Incremental B Term Commitments of such Incremental B Term Lenders and (B) to
the extent requested by any Incremental B Term Lender, a B Term Note will be
issued at the Borrower’s expense to such Incremental B Term Lender, to be in
conformity with the requirements of Section 1.05 (with appropriate
modification) to the extent needed to reflect the new Incremental B Term Loans
made by such Incremental B Term Lender.  Each Incremental B Term
Lender with an outstanding B Term Note which requests a new B Term Note as
contemplated by preceding clause (B) agrees to use good faith efforts to return
the outstanding B Term Note held by it to the Borrower for cancellation.

 

(c)           In connection with each incurrence of Incremental B Term
Loans pursuant to Section 1.01(f), the Lenders and the Borrower hereby agree
that, notwithstanding anything to the contrary contained in this Agreement, the
Borrower and the Administrative Agent may take all such actions as may be
necessary to ensure that all Lenders with outstanding B Term Loans continue to
participate in each Borrowing of outstanding B Term Loans (after giving effect
to the incurrence of Incremental B Term Loans pursuant to Section 1.01(f)) on a
pro  rata basis, 

 

16

 

including
by adding the Incremental B Term Loans to be so incurred to the then
outstanding Borrowings of Initial B Term Loans on a pro  rata
basis even though as a result thereof such new Incremental B Term Loans (to the
extent required to be maintained as Eurodollar Loans) may effectively have a
shorter Interest Period than the then outstanding Borrowings of Initial B Term
Loans.  It is hereby agreed that, to the extent the Incremental B
Term Loans are to be so incurred or added to the then outstanding Borrowings of
Initial B Term Loans which are maintained as Eurodollar Loans, the Lenders that
have made such Incremental B Term Loans shall be entitled to receive from the
Borrower such amounts, as reasonably determined by the respective Lenders, to
compensate them for funding the various Incremental B Term Loans during an
existing Interest Period (rather than at the beginning of the respective
Interest Period, based upon rates then applicable thereto).  All
determinations by any Lender pursuant to the immediately preceding sentence
shall, absent manifest error, be final and conclusive and binding on all
parties hereto.

 

SECTION 1A.  Letters
of Credit.

 

1A.01  Letters
of Credit.  (a)  Subject to and upon the
terms and conditions herein set forth, the Borrower may request that a Letter
of Credit Issuer, at any time and from time to time on or after the Effective
Date and prior to the date which is thirty Business Days prior to the RF
Maturity Date, issue, for the account of the Borrower and in support of such
obligations of the Borrower and/or its Subsidiaries that are incurred in the
ordinary course of business or are acceptable to the Administrative Agent and,
subject to and upon the terms and conditions herein set forth, such Letter of
Credit Issuer agrees to issue from time to time, irrevocable standby letters of
credit (each such letter of credit, a “Letter of Credit” and,
collectively, the “Letters of Credit”) denominated in Dollars and issued
on a sight basis, in such form as may be approved by such Letter of Credit
Issuer and the Administrative Agent.

 

(b)           Notwithstanding the foregoing, (i) no
Letter of Credit shall be issued if after giving effect thereto (x) the Letter
of Credit Outstandings would exceed $10.0 million or (y) the sum of all Letter
of Credit Outstandings (less any portion thereof subject to Section 1A.01(c)
Arrangements) and the aggregate principal amount of all RF Loans and all
Swingline Loans then outstanding would exceed the Total Available Revolving
Commitment at such time, (ii) each Letter of Credit shall by its terms
terminate on or before the earlier of (A) the date which occurs 12 months after
the date of the issuance thereof (although any such standby Letter of Credit
may be automatically extendable for successive periods of up to 12 months, but,
in each case, not beyond the tenth Business Day prior to the RF Maturity Date,
so long as such Letter of Credit provides that the respective Letter of Credit
Issuer retains an option, reasonably satisfactory to such Letter of Credit
Issuer, to terminate such Letter of Credit within a specified period of time
prior to each scheduled extension date) and (B) ten Business Days prior to the
RF Maturity Date, (iii) no Letter of Credit shall be a trade or commercial
letter of credit and (iv) no Letter of Credit Issuer shall be under any
obligation to issue any Letter of Credit of the types described above if at the
time of such issuance:

 

(x)            any order, judgment or decree of any
governmental authority or arbitrator shall purport by its terms to enjoin or restrain
such Letter of Credit Issuer from issuing such Letter of Credit or any
requirement of law applicable to such Letter of Credit Issuer or any request or
directive (whether or not having the force of law) from any 

 

17

 

governmental authority with jurisdiction over
such Letter of Credit Issuer shall prohibit, or request that such Letter of
Credit Issuer refrain from, the issuance of letters of credit generally or such
Letter of Credit in particular or shall impose upon such Issuing Lender with
respect to such Letter of Credit any restriction or reserve or capital
requirement (for which such Letter of Credit Issuer is not otherwise
compensated hereunder) not in effect with respect to such Letter of Credit Issuer
on the Effective Date, or any unreimbursed loss, cost or expense which was not
applicable or in effect with respect to such Letter of Credit Issuer as of the
date hereof and which such Letter of Credit Issuer in good faith deems material
to it; or

 

(y)           such Letter of Credit Issuer shall have received from the
Borrower, any other Credit Party or the Required Lenders prior to the issuance
of such Letter of Credit notice of the type described in the second sentence of
Section 1A.03(c).

 

(c)           Notwithstanding the foregoing, in the event a Lender
Default exists, the respective Letter of Credit Issuer shall not be required to
issue any Letter of Credit unless such Letter of Credit Issuer has entered into
arrangements satisfactory to it and the Borrower (“Section 1A.01(c)
Arrangements”) to eliminate such Letter of Credit Issuer’s risk with
respect to the participation in Letters of Credit of the Defaulting Lender or
Lenders, which may include requiring that the Borrower cash collateralize such
Defaulting Lender’s or Lenders’ Percentage of the Letter of Credit
Outstandings.

 

(d)           Annex IX hereto contains a description of certain letters
of credit issued pursuant to the Existing Credit Agreement and outstanding on
the Initial Borrowing Date.  Each such letter of credit, including
any extension thereof (each, as amended from time to time in accordance with
the terms hereof and thereof, an “Existing Letter of Credit”) shall
constitute a “Letter of Credit” for all purposes of this Agreement, issued, for
purposes of Sections 1A.04(a) and 1A.05, on the Initial Borrowing Date.

 

1A.02  Minimum Stated Amount.  The
initial Stated Amount of each Letter of Credit shall be not less than $100,000
or such lesser amount as is acceptable to the respective Letter of Credit
Issuer.

 

1A.03  Letter of Credit Requests; Notices of
Issuance.  (a)  Whenever it desires that a Letter of
Credit be issued, the Borrower shall give the Administrative Agent and the
respective Letter of Credit Issuer written notice (which may include by way of
facsimile transmission) in the form of Exhibit A-2 hereto prior to 1:00 P.M.
(New York time) at least three Business Days (or such shorter period as may be
acceptable to such Letter of Credit Issuer in any given case) prior to the
proposed date of issuance (which shall be a Business Day) (each, a “Letter
of Credit Request”), which Letter of Credit Request shall include any
documents that such Letter of Credit Issuer customarily requires in connection
therewith.

 

(b)           Each Letter of Credit Issuer shall, promptly after the
issuance of, or amendment to, a Letter of Credit, give the Administrative Agent
and the Borrower written notice of such issuance or amendment, as the case may
be, and such notice shall be accompanied by a copy of such Letter of Credit or
such amendment, as the case may be.  Promptly upon receipt of such
notice, the Administrative Agent shall notify each Participant, in writing, of
such issuance 

 

18

 

or
amendment and if any Participant shall so request, the Administrative Agent
shall furnish said Participant with a copy of such Letter of Credit or such
amendment, as the case may be.

 

(c)           The making of each Letter of Credit Request shall be
deemed to be a representation and warranty by the Borrower to the respective
Letter of Credit Issuer and the Lenders that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of, Section
1A.01(a) or (b).  Unless the respective Letter of Credit Issuer has
received notice from the Borrower, any other Credit Party or the Required
Lenders before it issues a Letter of Credit that one or more of the conditions
specified in Section 4 are not then satisfied, or that the issuance of such
Letter of Credit would violate Section 1A.01(a) or (b), then such Letter of
Credit Issuer shall, subject to the terms and conditions of this Agreement,
issue the requested Letter of Credit for the account of the Borrower in
accordance with such Letter of Credit Issuer’s usual and customary practices.

 

1A.04  Agreement to Repay Letter of Credit
Drawings.  (a)  The Borrower hereby agrees to reimburse
the respective Letter of Credit Issuer, by making payment to the Administrative
Agent at the Payment Office, for any payment or disbursement made by such
Letter of Credit Issuer under any Letter of Credit (each such amount so paid or
disbursed until reimbursed, an “Unpaid Drawing”) immediately after, and
in any event on the date on which the Borrower is notified by such Letter of
Credit Issuer of, such payment or disbursement with interest on the amount so
paid or disbursed by such Letter of Credit Issuer, to the extent not reimbursed
prior to 3:00 P.M. (New York time) on the date of such payment or disbursement,
from and including the date paid or disbursed to but not including the date
such Letter of Credit Issuer is reimbursed therefor at a rate per annum which
shall be the Applicable Base Rate Margin plus the Base Rate as in effect
from time to time (plus an additional 2% per annum if not reimbursed by
the third Business Day after the date of such notice of payment or
disbursement), such interest also to be payable on demand.

 

(b)           The Borrower’s obligation under this Section 1A.04 to
reimburse the respective Letter of Credit Issuer with respect to Unpaid
Drawings (including, in each case, interest thereon) shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Borrower may have or have had
against any Letter of Credit Issuer, the Administrative Agent or any Lender,
including, without limitation, any defense based upon the failure of any
drawing under a Letter of Credit to conform to the terms of the Letter of
Credit or any non-application or misapplication by the beneficiary of the
proceeds of such drawing; provided, however, that the Borrower
shall not be obligated to reimburse such Letter of Credit Issuer for any
wrongful payment made by such Letter of Credit Issuer under a Letter of Credit
as a result of acts or omissions constituting willful misconduct or gross
negligence on the part of such Letter of Credit Issuer as determined by a final
judgment issued by a court of competent jurisdiction.

 

1A.05  Letter of Credit Participations.  (a)  Immediately
upon the issuance by any Letter of Credit Issuer of any Letter of Credit, such
Letter of Credit Issuer shall be deemed to have sold and transferred to each
other RF Lender, and each such RF Lender (each, a “Participant”) shall
be deemed irrevocably and unconditionally to have purchased and received from
such Letter of Credit Issuer, without recourse or warranty, an undivided
interest and participation, to the extent of such Participant’s Percentage, in
such Letter of Credit, each 

 

19

 

 

substitute
letter of credit, each drawing made thereunder and the obligations of the
Borrower under this Agreement with respect thereto (although the Letter of
Credit Fee shall be payable directly to the Administrative Agent for the
account of the RF Lenders as provided in Section 2.01(c) and the Participants
shall have no right to receive any portion of any Facing Fees) and any security
therefor or guaranty pertaining thereto.  Upon any change in the
Revolving Commitments pursuant to Section 1.13 or 11.04(b), it is hereby agreed
that, with respect to all outstanding Letters of Credit and Unpaid Drawings,
there shall be an automatic adjustment to the participations pursuant to this
Section 1A.05 to reflect the new Percentages of the RF Lenders.

 

(b)                                 In determining
whether to pay under any Letter of Credit, the applicable Letter of Credit
Issuer shall not have any obligation relative to the Participants other than to
determine that any documents required to be delivered under such Letter of
Credit have been delivered and that they substantially comply on their face
with the requirements of such Letter of Credit.  Any action taken or
omitted to be taken by any Letter of Credit Issuer under or in connection with
any Letter of Credit if taken or omitted in the absence of gross negligence or
willful misconduct as determined by a final judgment issued by a court of
competent jurisdiction shall not create for such Letter of Credit Issuer any
resulting liability.

 

(c)           In the event that any Letter of Credit Issuer makes any
payment under any Letter of Credit and the Borrower shall not have reimbursed
such amount in full to such Letter of Credit Issuer pursuant to Section
1A.04(a), such Letter of Credit Issuer shall promptly notify the Administrative
Agent, and the Administrative Agent shall promptly notify each Participant of
such failure, and each Participant shall promptly and unconditionally pay to
the Administrative Agent for the account of such Letter of Credit Issuer, the
amount of such Participant’s Percentage of such payment in Dollars and in same
day funds; provided, however, that no Participant shall be
obligated to pay to the Administrative Agent its Percentage of such
unreimbursed amount for any wrongful payment made by such Letter of Credit
Issuer under a Letter of Credit as a result of acts or omissions constituting
willful misconduct or gross negligence on the part of such Letter of Credit
Issuer as determined by a final judgment issued by a court of competent
jurisdiction.  If the Administrative Agent so notifies any
Participant required to fund an Unpaid Drawing under a Letter of Credit prior
to 1:00 P.M. (New York time) on any Business Day, such Participant shall make
available to the Administrative Agent for the account of the respective Letter
of Credit Issuer such Participant’s Percentage of the amount of such payment on
such Business Day in same day funds.  If and to the extent such
Participant shall not have so made its Percentage of the amount of such Unpaid
Drawing available to the Administrative Agent for the account of the respective
Letter of Credit Issuer, such Participant agrees to pay to the Administrative
Agent for the account of such Letter of Credit Issuer, forthwith on demand such
amount, together with interest thereon, for each day from such date until the
date such amount is paid to the Administrative Agent for the account of such
Letter of Credit Issuer at the overnight Federal Funds Effective
Rate.  The failure of any Participant to make available to the
Administrative Agent for the account of the respective Letter of Credit Issuer
its Percentage of any Unpaid Drawing under any Letter of Credit shall not
relieve any other Participant of its obligation hereunder to make available to
the Administrative Agent for the account of such Letter of Credit Issuer its
Percentage of any payment under any Letter of Credit on the date required, as
specified above, but no Participant shall be responsible for the failure of any
other Participant to make available to the Administrative Agent for the account
of such Letter of Credit Issuer such other Participant’s Percentage of any such
payment.

 

20

 

(d)           Whenever any Letter of Credit Issuer receives a payment of
a reimbursement obligation (including interest on Unpaid Drawings) as to which
the Administrative Agent has received for the account of such Letter of Credit
Issuer any payments from any Participant pursuant to clause (c) above, such
Letter of Credit Issuer shall pay to the Administrative Agent and the
Administrative Agent shall promptly pay to each Participant which has paid its
Percentage thereof, in Dollars and in same day funds, an amount equal to such
Participant’s Percentage of the amount of the payment of such reimbursement
obligation, including interest paid thereon to the extent accruing after the
purchase of the respective participations.

 

(e)           The obligations of the Participants to make payments to
the Administrative Agent for the account of the respective Letter of Credit
Issuer with respect to Letters of Credit shall be irrevocable and not subject
to counterclaim, set-off or other defense or any other qualification or
exception whatsoever (provided that no Participant shall be required to
make payments resulting from the Administrative Agent’s gross negligence or
willful misconduct as determined by a final judgment issued by a court of
competent jurisdiction) and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances, including, without
limitation, any of the following circumstances:

 

(i)            any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;

 

(ii)           the existence of any claim, set-off, defense or other
right which the Borrower or any of its Subsidiaries may have at any time
against a beneficiary named in a Letter of Credit, any transferee of any Letter
of Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, any Letter of Credit Issuer, any Lender or other Person,
whether in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions (including any
underlying transaction between the Borrower and the beneficiary named in any
such Letter of Credit);

 

(iii)          any draft, certificate or other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;

 

(iv)          the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit Documents;
or

 

(v)           the occurrence of any Default or Event of Default.

 

(f)            To the extent the respective Letter of Credit Issuer is
not indemnified by the Borrower, the Participants will reimburse and indemnify
such Letter of Credit Issuer, in proportion to their respective Percentages,
for and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, costs, expenses or disbursements of whatsoever
kind or nature which may be imposed on, asserted against or incurred by such
Letter of Credit Issuer in performing its respective duties in any way relating
to or arising out of its issuance of Letters of Credit; provided that no
Participants shall be liable for any portion of such 

 

21

 

liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Letter of Credit Issuer’s gross negligence
or willful misconduct as determined by a final judgment issued by a court of
competent jurisdiction.

 

1A.06  Increased
Costs.  If at any time after the Effective
Date, the adoption or effectiveness of any applicable law, rule or regulation,
or any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central lender or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Letter of Credit Issuer or any Participant with any request or directive
(whether or not having the force of law) by any such authority, central lender
or comparable agency shall either (i) impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement against Letters of
Credit issued by any Letter of Credit Issuer or such Participant’s
participation therein, or (ii) shall impose on any Letter of Credit Issuer or
any Participant any other conditions affecting this Agreement, any Letter of
Credit or such Participant’s participation therein; and the result of any of
the foregoing is to increase the cost to any Letter of Credit Issuer or such
Participant of issuing, maintaining or participating in any Letter of Credit,
or to reduce the amount of any sum received or receivable by any Letter of
Credit Issuer or such Participant hereunder (other than, in the case of a
change in the basis of taxation of payments to a Letter of Credit Issuer or
Participant of the principal of or interest on the Loans or any other amounts
payable hereunder, changes in the rate of tax on, or determined by reference
to, the net income or net profits of such Letter of Credit Issuer or
Participant imposed by the jurisdiction in which its principal office or
applicable lending office is located), then, upon demand to the Borrower by any
Letter of Credit Issuer or such Participant (a copy of which notice shall be
sent by such Letter of Credit Issuer or such Participant to the Administrative
Agent), the Borrower shall pay to such Letter of Credit Issuer or such
Participant such additional amount or amounts as will compensate such Letter of
Credit Issuer or such Participant for such increased cost or
reduction.  A certificate submitted to the Borrower by such Letter of
Credit Issuer or such Participant, as the case may be (a copy of which
certificate shall be sent by such Letter of Credit Issuer or such Participant
to the Administrative Agent), setting forth the basis for the determination of
such additional amount or amounts necessary to compensate such Letter of Credit
Issuer or such Participant as aforesaid shall be conclusive and binding on the
Borrower absent manifest error, although the failure to deliver any such
certificate shall not release or diminish any of the Borrower’s obligations to
pay additional amounts pursuant to this Section 1A.06 upon the subsequent
receipt thereof.

 

SECTION 2.  Fees.

 

2.01  Fees.  (a)  The Borrower agrees to pay to the
Administrative Agent a commitment commission (the “RF Commitment Commission”)
for the account of each RF Lender that is a Non-Defaulting Lender for the
period from and including the Effective Date to but not including the date upon
which the Total Revolving Commitment has been terminated, computed for each day
at the rate per annum equal to 0.50% for such day on the Unutilized Revolving
Commitment of such Lender on such day.  Such Commitment Commission
shall be due and payable in arrears on the last Business Day of each calendar
quarter and on the date upon which the Total Revolving Commitment is
terminated.

 

22

 

(b)           The Borrower agrees
to pay to the Administrative Agent a commitment commission (the “DDTF
Commitment Commission” and, together with the RF Commitment Commission, the
“Commitment Commission”) for the account of each Lender with a
Delayed-Draw B Term Commitment that is a Non-Defaulting Lender for the period
from and including the Effective Date to but not including the date upon which
the Total Delayed-Draw B Term Commitment has been terminated, computed for each
day at the rate per annum equal to 0.50% for such day on the Delayed-Draw B
Term Commitment of such Lender on such day.  Such DDTF Commitment
Commission shall be due and payable in arrears on the last Business Day of each
calendar quarter and on the date upon which the Total Delayed-Draw B Term
Commitment is terminated.

 

(c)           So long as any
Letter of Credit is outstanding and has not been fully collateralized pursuant
to Section 3.02(A)(a) and/or Section 8, the Borrower agrees to pay to the
Administrative Agent, for the account of each Non-Defaulting Lender, pro
rata on the basis of their respective Percentages, a fee in respect of
each Letter of Credit (the “Letter of Credit Fee”) computed for each day
at a per annum rate equal to the Applicable Eurodollar Margin for RF Loans on
such day multiplied by the Stated Amount of all Letters of Credit outstanding
on such day (less any amount thereof as to which Section 1A.01(c)
Arrangements are in place).  Accrued Letter of Credit Fees shall be
due and payable quarterly in arrears on the last Business Day of each calendar
quarter.

 

(d)           So long as any
Letter of Credit is outstanding and has not been fully collateralized pursuant
to Section 3.02(A)(a) and/or Section 8, the Borrower agrees to pay to the
respective Letter of Credit Issuer a fee in respect of each Letter of Credit
issued by it (the “Facing Fee”) computed for each day at the rate of
0.125% per annum on the Stated Amount of all such Letters of Credit outstanding
on such day, provided that there will be a minimum Facing Fee per year
for each Letter of Credit of $500 (which is not an additional
fee).  Accrued Facing Fees shall be due and payable quarterly in
arrears on the last Business Day of each calendar quarter.

 

(e)           The Borrower agrees
to pay directly to the respective Letter of Credit Issuer upon each issuance
of, payment under, and/or amendment of, a Letter of Credit such amount, if any,
as shall at the time of such issuance, payment or amendment be the
administrative charge which such Letter of Credit Issuer is customarily
charging for issuances of, payments under or amendments of, letters of credit
issued by it.

 

(f)            The Borrower shall
pay to (x) each Agent on the Initial Borrowing Date, for its own account and/or
for distribution to the Lenders, such fees as heretofore agreed by the Borrower
and the Agents and (y) the Administrative Agent, for its own account, such
other fees as agreed to between the Borrower and the Administrative Agent, when
and as due.

 

(g)           The Borrower shall
pay to the Administrative Agent for distribution to each Incremental B Term
Lender such fees and other amounts, if any, as are specified in the relevant
Incremental B Term Commitment Agreement, with such fees and other amounts, if
any, to be payable on the respective Incremental B Term Loan Borrowing Date.

 

23

 

(h)           All computations of
Fees shall be made in accordance with Section 11.07(b).

 

2.02  Voluntary
Reduction of Commitments.  (a)  Upon at least
three Business Day’s prior written notice (or telephonic notice confirmed in
writing) to the Administrative Agent at its Notice Office (which notice shall
be deemed to be given on a certain day only if given before 2:00 P.M. (New York
time) on such day and shall be promptly transmitted by the Administrative Agent
to each of the Lenders), the Borrower shall have the right, without premium or
penalty, to reduce, in whole or in part, the Total Unutilized Revolving
Commitment or the Total Delayed-Draw B Term Commitment, provided that
(w) any such partial reduction shall apply to proportionately and permanently
reduce the Revolving Commitments or Delayed-Draw B Term Commitments, as the
case may be, of each Lender with such a Commitment, (x) in the case of any
reduction to the Total Unutilized Revolving Commitment, no such reduction shall
reduce any Lender’s Revolving Commitment by an amount greater than the then
Unutilized Revolving Commitment of such Lender, (y) in the case of any
reduction to the Total Unutilized Revolving Commitment, no such reduction shall
cause the Blocked Revolving Commitment to exceed the Total Unutilized Revolving
Commitment (as determined immediately after giving effect to such reduction)
and (z) any partial reduction pursuant to this Section 2.02(a) shall be in
integral multiples of $1,000,000.

 

(b)           In the event of
certain refusals by a Lender to consent to certain proposed changes, waivers,
discharges or terminations with respect to this Agreement which have been
approved by the Required Lenders as provided in Section 11.12(b), the Borrower
shall have the right, subject to obtaining the consents required by Section
11.12(b), upon two Business Days’ prior written notice to the Administrative
Agent at its Notice Office (which notice the Administrative Agent shall
promptly transmit to each of the Lenders), to terminate the entire Delayed-Draw
B Term Commitment and/or Revolving Commitment of such Lender, so long as all
Loans, together with accrued and unpaid interest, Fees and all other amounts,
owing to such Lender (including all amounts, if any, owing pursuant to Section
1.11 but excluding amounts owing in respect of Loans of any Facility maintained
by such Lender, if such Loans are not being repaid pursuant to Section
11.12(b)) are repaid concurrently with the effectiveness of such termination
(at which time Annex I shall be deemed modified to reflect such changed
amounts) and at such time, unless the respective Lender continues to have
outstanding Commitments and/or Loans hereunder, such Lender shall no longer
constitute a “Lender” for purposes of this Agreement, except with respect to
indemnifications under this Agreement (including, without limitation, Sections
1.10, 1.11, 1A.06, 3.04, 11.01 and 11.06), which shall survive as to such
repaid Lender.

 

2.03  Mandatory
Adjustments of Commitments, etc.  (a) 
Each of the Total Initial B Term Commitment, the Total Delayed-Draw B
Term Commitment and the Total Revolving Commitment (and the Initial B Term
Commitment, Delayed-Draw B Term Commitment and Revolving Commitment of each
Lender with such a Commitment) shall terminate in its entirety on the
Expiration Date unless the Initial Borrowing Date has occurred on or before
such date.

 

(b)           The Total Initial B
Term Commitment (and the Initial B Term Commitment of each Initial B Term
Lender) shall terminate in its entirety on the Initial Borrowing Date (after
giving effect to the making of Initial B Term Loans on such date).

 

24

 

(c)           The Total
Delayed-Draw B Term Commitment (and the Delayed-Draw B Term Commitment of each
Lender with such a Commitment) shall terminate in its entirety (to the extent
not theretofore terminated) on the Delayed-Draw B Term Commitment Termination
Date (after giving effect to any incurrence of Delayed-Draw B Term Loans on
such date).

 

(d)           The Total
Delayed-Draw B Term Commitment shall (i) be reduced on each date on which
Delayed-Draw B Term Loans are incurred (after giving effect to the making of
Delayed-Draw B Term Loans on such date) in an amount equal to the aggregate
principal amount of the Delayed-Draw B Term Loans incurred on such date and
(ii) prior to the termination of the Total Delayed-Draw B Term Commitment as
provided in Section 2.03(c) and preceding clause (i), be reduced on each date
on which both (x) no B Term Loans are outstanding (after giving effect to the
application on or prior to such date of the provisions of
Sections 3.02(A)) and (y) B Term Loans, had there been any still
outstanding, would have been required to be repaid pursuant to Sections
3.02(A)(b), (c), (d) or (e), by the amount, if any, by which the amount
required to be applied pursuant to said Sections as a result of the events
described therein (determined as if an unlimited amount of B Term Loans were
actually outstanding) exceeds the aggregate principal amount of B Term Loans
being repaid as a result of such events.

 

(e)           The Total
Incremental B Term Commitment (and the Incremental B Term Commitment of each
Incremental B Term Lender with such a Commitment) pursuant to an Incremental B
Term Commitment Agreement shall terminate in its entirety on the related
Incremental B Term Loan Borrowing Date therefor (after giving effect to the
making of Incremental B Term Loans on such date).

 

(f)            The Total Revolving
Commitment (to the extent outstanding) shall be reduced on each date on which
both (x) no B Term Loans are outstanding (after giving effect to the
application on or prior to such date of the provisions of
Sections 3.02(A)) and the Total Delayed-Draw B Term Commitment has
terminated (after giving effect to the application on or prior to such date of
the provisions of Sections 2.03(c) and (d)) and (y) B Term Loans, had
there been any still outstanding, would have been required to be repaid
pursuant to Sections 3.02(A)(b), (c), (d) or (e), by the amount, if any, by
which the amount required to be applied pursuant to said Sections as a result
of the events described therein (determined as if an unlimited amount of B Term
Loans were actually outstanding) exceeds the sum of the Delayed-Draw B Term
Commitments being terminated and the aggregate principal amount of B Term Loans
being repaid, in either case as a result of such events; provided, however,
that in no event shall the Total Revolving Commitment be reduced below $50,000,000
as a result of the application of this Section 2.03(f).

 

(g)           The Total Revolving
Commitment shall terminate in its entirety on the earlier of (x) the RF
Maturity Date and (y) the date on which a Change of Control occurs.

 

(h)           Each partial reduction
of the Commitments under a Facility pursuant to this Section 2.03 shall apply
proportionately to reduce the Commitment of each Lender under such Facility.

 

25

 

SECTION 3.  Payments.

 

3.01  Voluntary Prepayments.  The
Borrower shall have the right to prepay Loans, in whole or in part, without
premium or penalty, from time to time on the following terms and
conditions:  (i) the Borrower shall give
the Administrative Agent at the Payment Office written notice (or telephonic
notice promptly confirmed in writing) of its intent to prepay the Loans,
whether such Loans are B Term Loans, RF Loans or Swingline Loans, the amount of
such prepayment and (in the case of Eurodollar Loans) the specific Borrowing(s)
pursuant to which made, which notice shall be given by the Borrower prior to
12:00 Noon (New York time) at least one Business Day prior to the date of such
prepayment with respect to Base Rate Loans (other than Swingline Loans, with
respect to which notice shall be given by the Borrower on the date of
prepayment) and at least three Business Days prior to the date of such
prepayment with respect to Eurodollar Loans, and which notice (except in the
case of a prepayment of Swingline Loans) shall promptly be transmitted by the
Administrative Agent to each of the Lenders; (ii) each partial prepayment of
any Borrowing shall be in an aggregate principal amount of at least $1,000,000
(or $100,000, in the case of a partial prepayment of any Borrowing of Swingline
Loans), provided that no partial prepayment of Eurodollar Loans made
pursuant to a Borrowing shall reduce the aggregate principal amount of the
Loans outstanding pursuant to such Borrowing to an amount less than the Minimum
Borrowing Amount applicable thereto; (iii) except as provided in clause (v)
below, each prepayment in respect of any Loans of a given Facility made
pursuant to a Borrowing shall be applied pro  rata among such
Loans, provided that at the Borrower’s election in connection with any
prepayment of RF Loans pursuant to this Section 3.01, such prepayment shall not
be applied to any RF Loans of a Defaulting Lender; (iv) at the time of any
prepayment of Eurodollar Loans pursuant to this Section 3.01 on any date other
than the last day of the Interest Period applicable thereto, the Borrower shall
pay the amounts required pursuant to Section 1.11; and (v) in the event of
certain refusals by a Lender to consent to certain proposed changes, waivers,
discharges or terminations with respect to this Agreement which have been
approved by the Required Lenders as provided in Section 11.12(b), the Borrower
may, upon two Business Days’ prior written notice to the Administrative Agent
at its Notice Office (which notice the Administrative Agent shall promptly
transmit to each of the Lenders), repay all Loans of such Lender (including all
amounts, if any, owing pursuant to Section 1.11), together with accrued and
unpaid interest, Fees and all other amounts then owing to such Lender (or owing
to such Lender with respect to each Facility which gave rise to the need to
obtain such Lender’s individual consent) in accordance with said
Section 11.12(b), so long as (A) in the case of the repayment of RF Loans
of any Lender pursuant to this clause (v), the Revolving Commitment of such
Lender is terminated concurrently with such repayment (at which time Annex I
shall be deemed modified to reflect the changed Revolving Commitments) and (B)
the consents required by Section 11.12(b) in connection with the repayment
pursuant to this clause (v) shall have been obtained.

 

3.02  Mandatory Prepayments.

 

(A)          Requirements:

 

(a)           (i) If on any date
(and after giving effect to all other repayments on such date) the sum of (I)
the aggregate outstanding principal amount of RF Loans made by Non-Defaulting
Lenders, (II) the aggregate outstanding principal amount of all Swingline Loans
and (III) the Letter of Credit Outstandings
(less any amount thereof as to which Section 1A.01(c) Arrangements are in
place) exceeds the Adjusted Total Available Revolving Commitment as 

 

26

 

then in
effect, the Borrower shall repay on such date the principal of outstanding
Swingline Loans and, after all Swingline Loans have been repaid in full or if
no Swingline Loans are outstanding, the principal of outstanding RF Loans of
Non-Defaulting Lenders in an aggregate amount equal to such
excess.  If, after giving effect to such repayment or repayments, the
Letter of Credit Outstandings (less any amount thereof as to which
Section 1A.01(c) Arrangements are in place) exceeds the Adjusted Total
Available Revolving Commitment then in effect, the Borrower shall pay to the
Collateral Agent an amount in cash and/or Cash Equivalents equal to such excess
and the Collateral Agent shall hold such payment as security for the
obligations of the Borrower in respect of Letters of Credit owing to
Non-Defaulting Lenders pursuant to a cash collateral agreement to be entered
into in form and substance reasonably satisfactory to the Collateral Agent (which
shall permit certain investments in Cash Equivalents reasonably satisfactory to
the Collateral Agent, until all proceeds are applied to such secured
obligations or until all Letters of Credit so secured expire undrawn, at which
time such amount shall be returned to the Borrower).

 

(ii)           On any date on which the aggregate outstanding principal
amount of the RF Loans made by any Defaulting Lender exceeds the Available
Revolving Commitment of such Defaulting Lender, the Borrower shall prepay on
such date principal of outstanding RF Loans of such Defaulting Lender in an
amount equal to such excess.

 

(b)           On the fifth
Business Day following the date of receipt thereof on or after the Effective
Date by the Borrower and/or any of its Subsidiaries of the Net Cash Proceeds
from any Asset Sale, an amount equal to 100% of the Net Cash Proceeds from such
Asset Sale shall be applied as a mandatory repayment of principal of the then
outstanding B Term Loans, provided that up to 100% of the Net Cash
Proceeds from Asset Sales shall not be required to be used to so repay B Term
Loans to the extent (i) the Borrower elects, as hereinafter provided, to cause
such Net Cash Proceeds to be used within 270 days of such Asset Sale to finance
Permitted Acquisitions (a “Reinvestment Election”) or (ii) in the case
of Net Cash Proceeds from an Asset Sale constituting a Non-Core Asset Sale and
so long as RF Loans in an aggregate principal amount equal to at least such
amount of Net Cash Proceeds were incurred to finance Permitted Acquisitions
within 120 days prior to the date of receipt of such Net Cash Proceeds, the
Borrower applies all (and not less than all) of such Net Cash Proceeds to repay
outstanding principal of RF Loans in accordance with Section 3.01 (a “Repayment
Election”).  The Borrower may exercise (x) its Repayment Election
with respect to a Non-Core Asset Sale as provided above if (A) no Default or
Event of Default exists and (B) the Borrower delivers a written notice signed
by an Authorized Officer to the Administrative Agent no later than five
Business Days following the respective Non-Core Asset Sale stating that it has
incurred RF Loans in an aggregate principal amount equal to or greater than the
Net Cash Proceeds received from such Non-Core Asset Sale to finance a Permitted
Acquisition within the time period specified in clause (ii) above and
specifying the relevant Permitted Acquisition(s) consummated during such period
and (y) its Reinvestment Election with respect to an Asset Sale if (A) no
Default or Event of Default exists and (B) the Borrower delivers a Reinvestment
Notice to the Administrative Agent no later than five Business Days following
the date of the consummation of the respective Asset Sale, with such
Reinvestment Election being effective with respect to the Net Cash Proceeds of
such Asset Sale equal to the Anticipated Reinvestment Amount specified in such
Reinvestment Notice.  Notwithstanding the foregoing provisions of
this Section 3.02(A)(b), in no event shall the Borrower or any of its Subsidiaries
use any proceeds from any Asset Sale to make 

 

27

 

any voluntary
or mandatory repayment or prepayment of Permitted Senior Unsecured Notes or
Permitted Junior Capital and, in each case, before any such obligation to use
such proceeds to make such repayment shall arise, the Borrower or the
respective Subsidiary shall reinvest the respective amounts pursuant to a
Reinvestment Election as, and to the extent, permitted above in this Section
3.02(A)(b) or apply such proceeds as a mandatory prepayment and/or commitment
reduction in accordance with the requirements of Section 3.02(B), 2.03(d) or
2.03(f), as applicable.

 

(c)           On the Business Day
following the receipt thereof by the Borrower, an amount equal to 100% of the
Net Cash Proceeds from the issuance of Permitted Senior Unsecured Notes and
Permitted Junior Capital shall be applied as a mandatory repayment of principal
of the then outstanding B Term Loans; provided that, notwithstanding the
foregoing, the Net Cash Proceeds from any issuance of Permitted Senior
Unsecured Notes or Permitted Junior Capital by the Borrower after the Initial
Borrowing Date shall not be required to be applied to repay principal of
outstanding B Term Loans as otherwise required above, so long as (i) no Default
or Event of Default then exists or would result from the respective issuance of
such Permitted Senior Unsecured Notes or Permitted Junior Capital, as the case
may be, (ii) calculations are made by the Borrower demonstrating compliance
with the covenants contained in Sections 7.11 and 7.12 for the Calculation
Period most recently ended prior to the date of such issuance of Permitted
Senior Unsecured Notes or Permitted Junior Capital, as the case may be, on a Pro
Forma Basis (as if the respective Permitted Senior Unsecured Notes or
Permitted Junior Capital, as the case may be, had been issued on the first day
of such Calculation Period), (iii) in the case of any issuance of Permitted
Junior Capital consisting of Permitted Senior Subordinated Notes or
Disqualified Preferred Stock, calculations are made by the Borrower
demonstrating compliance with a Senior Secured Leverage Ratio of less than
3.75:1.00 for the Calculation Period most recently ended prior to the date of
such issuance of Permitted Junior Capital on a Pro  Forma Basis
(as if the respective Permitted Junior Capital had been issued on the first day
of such Calculation Period), (iv) in the case of any issuance of Permitted
Senior Unsecured Notes, calculations are made by the Borrower demonstrating
compliance with a Senior Secured Leverage Ratio of less than 3.00:1.00 for the
Calculation Period most recently ended prior to the date of such issuance of
Permitted Senior Unsecured Notes on a Pro  Forma Basis (determined
as if the respective Permitted Senior Unsecured Notes had been issued on the
first day of such Calculation Period and after giving effect to any concurrent
prepayment of B Term Loans with a portion of the Net Cash Proceeds from the
issuance thereof), (v) all of the Net Cash Proceeds from such issuance of
Permitted Senior Unsecured Notes or Permitted Junior Capital, as the case may
be, shall have been used (except to the extent of any portion thereof applied
to make a concurrent prepayment of B Term Loans pursuant to, and in accordance
with the requirements of, Section 3.01) to effect a Permitted Acquisition in
accordance with the requirements of Section 6.10 and/or concurrently
utilized by the Borrower (x) to make a voluntary prepayment of RF Loans
pursuant to, and in accordance with the requirements of, Section 3.01 in an
aggregate principal amount equal to the aggregate principal amount of RF Loans
actually incurred by the Borrower to finance a Permitted Acquisition and/or (y)
to redeem and/or refinance Permitted Senior Unsecured Notes and/or Permitted
Junior Capital in an amount equal to the principal amount or aggregate
liquidation preference of or the Net Cash Proceeds from, as the case may be,
the Permitted Senior Unsecured Notes or Permitted Junior Capital, as the case
may be, actually issued to finance Permitted Acquisition(s) or Permitted
Acquisitions (and pay related accrued interest and dividends thereon, if any),
in any such case within the 364-day period prior 

 

28

 

to such issuance
of Permitted Senior Unsecured Notes or Permitted Junior Capital, as the case
may be, and (vi) the Borrower shall have furnished to the Administrative Agent
a certificate from an Authorized Officer certifying as to compliance with the
requirements of preceding clauses (i), (ii), (iii), (iv) and (v) and containing
the calculations required by preceding clauses (ii), (iii) and (iv), as
applicable.

 

(d)           On the Reinvestment
Prepayment Date with respect to a Reinvestment Election, an amount equal to the
Reinvestment Prepayment Amount, if any, for such Reinvestment Election shall be
applied as a repayment of the principal amount of the then outstanding B Term
Loans.

 

(e)           On the date of
delivery of each Quarterly Compliance Certificate pursuant to Section 6.01(e)
demonstrating that the Leverage Ratio as at the last day of the fiscal quarter
of the Borrower covered by such Quarterly Compliance Certificate is greater
than 5.00:1.00 (or, if the Borrower shall have failed to deliver a Quarterly
Compliance Certificate as required by Section 6.01(e) with respect to any
fiscal quarter of the Borrower, on the date of the required delivery of a
Quarterly Compliance Certificate for such fiscal quarter pursuant to said
Section), an amount equal to 50% of the increase, if any, in Cumulative
Distributable Cash during such fiscal quarter shall be applied as a mandatory
repayment of principal of the then outstanding B Term Loans; provided
that, so long as (x) no Default or Event of Default exists at the time of the
required mandatory repayment pursuant to this clause (e) and (y) no Dividend
Suspension Period existed during the fiscal quarter of the Borrower ended
immediately prior to such fiscal quarter, the Borrower shall not be so required
to repay B Term Loans as otherwise required by this clause (e); provided
however, that if the Borrower is subsequently prohibited from paying
Dividends on the Borrower Common Stock during the fiscal quarter of the
Borrower immediately succeeding such fiscal quarter as a result of the existence
of a Dividend Suspension Period, a Default or an Event of Default, a mandatory
repayment of B Term Loans shall be required within 60  days after the
last day of such immediately succeeding fiscal quarter in the amount originally
required by this clause (e) for the respective prior fiscal quarter (determined
without regard to this and the immediately preceding proviso).

 

(f)            To the extent not
theretofore repaid pursuant to the provisions of this Agreement, (i) all
outstanding RF Loans and Swingline Loans shall be repaid in full upon the
termination of the Total Revolving Commitment, (ii) all outstanding B Term
Loans and RF Loans shall be repaid in full on the relevant Maturity Date
therefor, (iii) all outstanding Swingline Loans shall be repaid in full on the
Swingline Expiry Date and (iv) all outstanding B Term Loans shall be repaid in
full on the date a Change of Control occurs.

 

(B)           Application:

 

With respect
to each prepayment of Loans required by Section 3.02(A), the Borrower may
designate the Types of Loans which are to be prepaid and the specific
Borrowing(s) under the affected Facility pursuant to which made, provided
that (i) if any prepayment of Eurodollar Loans made pursuant to a single
Borrowing shall reduce the outstanding Loans made pursuant to such Borrowing to
an amount less than the Minimum Borrowing Amount for such Borrowing, such
Borrowing shall be immediately converted into Base Rate Loans; (ii) except for
the differing treatments of Defaulting Lenders and Non-Defaulting Lenders 

 

29

 

as expressly
provided in Section 3.02(A)(a), each prepayment of any Loans under a Facility
made pursuant to a given Borrowing shall be applied pro  rata
among such Loans; (iii) repayments of Eurodollar Loans pursuant to this Section
3.02 may only be made on the last day of an Interest Period applicable thereto
unless (x) all Eurodollar Loans of the respective Facility with Interest
Periods ending on such date of required repayment and all Base Rate Loans of
the respective Facility have been paid in full and/or (y) concurrently with
such repayment, the Borrower pays all breakage costs and other amounts owing to
each Lender pursuant to Section 1.11.  In the absence of a
designation by the Borrower as described in the preceding sentence, the
Administrative Agent shall, subject to the above, make such designation in its
sole discretion with a view, but no obligation, to minimize breakage costs
owing under Section 1.11.  Notwithstanding the foregoing provisions
of this Section 3.02, if at any time the mandatory repayment of Loans pursuant
to this Section 3.02 would result, after giving effect to the procedures set
forth in clause (iii) of the second preceding sentence, in the Borrower
incurring breakage costs under Section 1.11 as a result of Eurodollar Loans
being repaid other than on the last day of an Interest Period applicable
thereto (any such Eurodollar Loans, “Affected Loans”), the Borrower may
(in lieu of making such payment) elect, by written notice to the Administrative
Agent, to have the provisions of the following sentence be
applicable.  At the time any Affected Loans are otherwise required to
be prepaid, the Borrower may elect to deposit 100% (or such lesser percentage
elected by the Borrower as not being repaid) of the principal amounts that
otherwise would have been paid in respect of the Affected Loans with the
Administrative Agent to be held as security for the obligations of the Borrower
hereunder pursuant to a cash collateral agreement to be entered into in form
and substance satisfactory to the Administrative Agent, with such cash
collateral to be released from such cash collateral account (and applied to
repay the principal amount of such Eurodollar Loans) upon each occurrence
thereafter of the last day of an Interest Period applicable to Eurodollar Loans
(or such earlier date or dates as shall be requested by the Borrower), with the
amount to be so released and applied on the last day of each Interest Period to
be the amount of such Eurodollar Loans to which such Interest Period applies
(or, if less, the amount remaining in such cash collateral account).

 

3.03  Method and Place of
Payment.  Except as otherwise specifically provided herein, all
payments under this Agreement shall be made to the Administrative Agent for the
ratable account of the Lenders entitled thereto, not later than 1:00 P.M. (New
York time) on the date when due and shall be made in immediately available
funds and in Dollars at the Payment Office, it being understood that written
notice by the Borrower to the Administrative Agent to make a payment from the
funds in the Borrower’s account at the Payment Office shall constitute the
making of such payment to the extent of such funds held in such
account.  Any payments under this Agreement which are made later than
1:00 P.M. (New York time) shall be deemed to have been made on the next
succeeding Business Day. Whenever any payment to be made hereunder shall be
stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day and, with respect to
payments of principal, interest shall be payable during such extension at the
applicable rate in effect immediately prior to such extension.

 

3.04  Net Payments.  (a)  All
payments made by the Borrower hereunder and/or under any Note will be made
without setoff, counterclaim or other defense.  Except as provided in
Section 3.04(b), all such payments will be made free and clear of, and without
deduction or withholding for, any present or future taxes, levies, imposts,
duties, fees, assessments or other 

 

30

 

charges
of whatever nature now or hereafter imposed by any jurisdiction or by any
political subdivision or taxing authority thereof or therein with respect to
such payments (but excluding, except as provided in the second succeeding
sentence, any tax imposed on or measured by the net income or net profits of a
Lender pursuant to the laws of the jurisdiction in which it is organized or the
jurisdiction in which the principal office or applicable lending office of such
Lender is located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect to such non-excluded taxes,
levies, imposts, duties, fees, assessments or other charges (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as “Taxes”).  If any Taxes are
so levied or imposed, the Borrower agrees to pay the full amount of such Taxes,
and such additional amounts as may be necessary so that every payment of all
amounts due under this Agreement and/or under any Note, after withholding or
deduction for or on account of any Taxes, will not be less than the amount
provided for herein or therein.  If any amounts are payable in
respect of Taxes pursuant to the preceding sentence, the Borrower agrees to
reimburse each Lender, upon the written request of such Lender, for taxes
imposed on or measured by the net income or net profits of such Lender pursuant
to the laws of the jurisdiction in which such Lender is organized or in which
the principal office or applicable lending office of such Lender is located or
under the laws of any political subdivision or taxing authority of any such
jurisdiction in which such Lender is organized or in which the principal office
or applicable lending office of such Lender is located and for any withholding
of taxes as such Lender shall determine are payable by, or withheld from, such
Lender, in respect of such amounts so paid to or on behalf of such Lender
pursuant to the preceding sentence and in respect of any amounts paid to or on
behalf of such Lender pursuant to this sentence.  The Borrower will
furnish to the Administrative Agent within 45 days after the date the payment
of any Taxes is due pursuant to applicable law certified copies of tax receipts
evidencing such payment by the Borrower.  The Borrower agrees to
indemnify and hold harmless each Lender, and reimburse such Lender upon its
written request, for the amount of any Taxes so levied or imposed and paid by
such Lender.

 

(b)           Each Lender that is
not a United States person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. Federal income tax purposes agrees to deliver to the
Borrower and the Administrative Agent on or prior to the Effective Date, or in
the case of a Lender that is an assignee or transferee of an interest under
this Agreement pursuant to Section 1.13 or 11.04 (unless the respective Lender
was already a Lender hereunder immediately prior to such assignment or
transfer), on the date of such assignment or transfer to such Lender, (i) two
accurate and complete original signed copies of Internal Revenue Service Form
W-8ECI or W-8BEN (with respect to a complete exemption under an income tax
treaty) (or successor form)) certifying to such Lender’s entitlement as of such
date to a complete exemption from United States withholding tax with respect to
payments to be made under this Agreement and under any Note, or (ii) if the Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code and
cannot deliver either Internal Revenue Service Form W-8ECI or W-8BEN (with
respect to a complete exemption under an income tax treaty) pursuant to clause
(i) above, (x) a certificate substantially in the form of Exhibit C (any
such certificate, a “Section 3.04 Certificate”) and (y) two
accurate and complete original signed copies of Internal Revenue Service Form
W-8BEN (with respect to the portfolio interest exemption) (or successor form)
certifying to such Lender’s entitlement as of such date to a complete exemption
from United States withholding tax with respect to payments of interest to be
made under this Agreement and under any Note.  In addition, each
Lender agrees that from time to time after the Effective Date, 

 

31

 

when a lapse
of time or change in circumstances renders the previous certification obsolete
or inaccurate in any material respect, it will deliver to the Borrower and the
Administrative Agent two new accurate and complete original signed copies of
Internal Revenue Service Form W-8ECI or W-8BEN (with respect to the benefits of
any income tax treaty), or Form W-8BEN (with respect to the portfolio interest
exemption) and a Section 3.04 Certificate, as the case may be, and such other
forms as may be required in order to confirm or establish the entitlement of
such Lender to a continued exemption from or reduction in United States
withholding tax with respect to payments under this Agreement and any Note, or
it shall immediately notify the Borrower and the Administrative Agent of its
inability to deliver any such Form or Certificate, in which case such Lender
shall not be required to deliver any such Form or Certificate pursuant to this
Section 3.04(b).  Notwithstanding anything to the contrary contained
in Section 3.04(a), but subject to Section 11.04(b) and the immediately
succeeding sentence, (x) the Borrower shall be entitled, to the extent it
is required to do so by law, to deduct or withhold income or similar taxes
imposed by the United States (or any political subdivision or taxing authority
thereof or therein) from interest, Fees or other amounts payable by it
hereunder for the account of any Lender which is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal
income tax purposes to the extent that such Lender has not provided to the
Borrower U.S. Internal Revenue Service Forms that establish a complete
exemption from such deduction or withholding and (y) the Borrower shall
not be obligated pursuant to Section 3.04(a) hereof to gross-up payments to be
made by it to a Lender in respect of income or similar taxes imposed by the
United States (I) if such Lender has not provided to the Borrower the Internal
Revenue Service Forms required to be provided to the Borrower pursuant to this
Section 3.04(b) or (II) in the case of a payment, other than interest, to a
Lender described in clause (ii) above, to the extent that such Forms do not
establish a complete exemption from withholding of such
taxes.  Notwithstanding anything to the contrary contained in the
preceding sentence or elsewhere in this Section 3.04 and except as set forth in
Section 11.04(b), the Borrower agrees to pay any additional amounts and to
indemnify each Lender in the manner set forth in Section 3.04(a) (without
regard to the identity of the jurisdiction requiring the deduction or
withholding) in respect of any amounts deducted or withheld by it as described
in the immediately preceding sentence as a result of any changes after the
Effective Date in any applicable law, treaty, governmental rule, regulation,
guideline or order, or in the interpretation thereof, relating to the deducting
or withholding of such income or similar taxes.

 

(c)           If the Borrower pays
any additional amount under this Section 3.04 to a Lender and such Lender
determines in its sole discretion that it has actually received or realized in
connection therewith any refund or any reduction of, or credit against, its Tax
liabilities in or with respect to the taxable year in which the additional
amount is paid, such Lender shall pay to the Borrower an amount that the Lender
shall, in its sole discretion (but acting in good faith), determine is equal to
the net benefit, after tax, which was obtained by the Lender in such year as a
consequence of such refund, reduction or credit.

 

SECTION 4.  Conditions Precedent.

 

4.01  Conditions Precedent to
Initial Borrowing Date and the Initial Incurrence of Loans.  The
obligation of the Lenders to make Loans hereunder and the obligation of each
Letter of Credit Issuer to issue Letters of Credit hereunder, in each case on
the Initial Borrowing Date, are subject to the satisfaction of each of the
following conditions at such time:

 

32

 

(a)           Effectiveness; Notes.  (i)  The Effective Date shall have occurred as
provided in Section 11.10 and (ii) there shall have been delivered to the
Administrative Agent for the account of each Lender requesting same the
appropriate Note or Notes executed by the Borrower, in each case, in the
amount, maturity and as otherwise provided herein.

 

(b)           Opinions of Counsel.  The
Administrative Agent shall have received (i) from Paul, Hastings, Janofsky
& Walker LLP, special counsel to the Credit Parties, an opinion addressed
to each Agent, the Collateral Agent and each of the Lenders and dated the
Initial Borrowing Date substantially in the form of Exhibit D and (ii) from
local and special FCC counsel to the Pledge Parties reasonably satisfactory to
the Agents, such opinions as the Agents may reasonably request, which opinions
shall (x) be addressed to each Agent, the Collateral Agent and each of the
Lenders and be dated the Initial Borrowing Date, (y) cover such other matters
incident to the transactions contemplated herein as the Agents may reasonably
request and (z) be in form, scope and substance reasonably satisfactory to the
Agents.

 

(c)           Company Proceedings.  (i)  The Administrative Agent shall have received
a certificate, dated the Initial Borrowing Date, signed by an Authorized
Officer in the form of Exhibit E with appropriate insertions and
deletions, together with (x) copies of the certificate of incorporation,
by-laws or other organizational documents of each Pledge Party and (y) the
resolutions of each Pledge Party referred to in such certificate and all of the
foregoing (including each such organizational document) shall be reasonably
satisfactory to the Administrative Agent and (z) a statement that all of the
applicable conditions set forth in Sections 4.01(e), (f), (g), (k), (l) and (n)
and 4.02(b) have been satisfied as of such date.

 

(ii)           On the Initial Borrowing Date, all
Company proceedings, all legal proceedings and all instruments and agreements
in connection with the transactions contemplated by this Agreement and the
other Credit Documents shall be reasonably satisfactory in form and substance
to the Administrative Agent, and the Administrative Agent shall have received
all information and copies of all certificates, documents and papers, including
good standing certificates and any other records of Company proceedings and
governmental approvals, if any, which the Agents may have reasonably requested
in connection therewith, such documents and papers, where appropriate, to be
certified by proper Company or governmental authorities.

 

(d)           Plans; etc.  On or
prior to the Initial Borrowing Date, there shall have been made available to
the Administrative Agent true and correct copies of the following documents, in
each case as same will be in effect on the Initial Borrowing Date after the
consummation of the Transaction:

 

(i)            all Plans (and for each Plan that is
required to file an annual report on Internal Revenue Service Form 5500-series,
a copy of the most recent such report (including, to the extent required, the
related financial and actuarial statements and other supporting statements,
certifications, schedules and information), and for each Plan that is a
“single-employer plan,” as defined in Section 4001(a)(15) of ERISA, the most
recently prepared actuarial valuation therefor) and any other “employee benefit
plans,” as defined in Section 3(3) of ERISA, and any other material agreements,
plans or arrangements, with or for the benefit of current or former employees
of the Borrower or any of its 

 

33

 

Subsidiaries or any ERISA Affiliate (provided
that the foregoing shall apply in the case of any multiemployer plan, as
defined in 4001(a)(3) of ERISA, only to the extent that any document described
herein is in the possession of the Borrower or any Subsidiary of the Borrower
or any ERISA Affiliate or reasonably available thereto from the sponsor or
trustee of any such plan);

 

(ii)           any collective bargaining agreements
or any other similar agreement or arrangements covering the employment
arrangements of the employees of the Borrower or any of its Subsidiaries;

 

(iii)          all agreements entered into by the
Borrower or any Subsidiary governing the terms and relative rights of its
capital stock or other equity interests;

 

(iv)          any material agreement with respect to
the management of the Borrower or any of its Subsidiaries;

 

(v)           any material employment agreements
entered into by the Borrower or any of its Subsidiaries; and

 

(vi)          any tax sharing, tax allocation and
other similar agreements entered into by the Borrower and/or any of its
Subsidiaries with any entity not a Pledge Party;

 

with all of
the foregoing to be reasonably satisfactory to the Administrative Agent.

 

(e)           Adverse Change, etc.  Since
December 31, 2003, nothing shall have occurred, and neither any Agent nor the
Required Lenders shall have first become aware of any facts or conditions not
previously known, in each case which any Agent or the Required Lenders shall
reasonably determine has had, or is reasonably likely to have, a Material
Adverse Effect.

 

(f)            Litigation.  There
shall be no actions, suits or proceedings pending or, to the knowledge of the
Borrower, threatened (a) with respect to this Agreement or any other Document
or (b) which any Agent or the Required Lenders shall reasonably determine has
had, or is reasonably likely to have, a Material Adverse Effect.

 

(g)           Approvals.  All
necessary material governmental and third party approvals in connection with
the Documents (including, without limitation, all necessary material approvals
required by the FCC and the applicable PUCs) shall have been obtained and
remain in effect.

 

(h)           Subsidiary Guaranty.  Each
1st-Tier Subsidiary of the Borrower on the Initial Borrowing Date
shall have duly authorized, executed and delivered a Subsidiary Guaranty in the
form of Exhibit F hereto (as modified, amended, restated and/or supplemented
from time to time in accordance with the terms hereof and thereof, the “Subsidiary
Guaranty”), and the Subsidiary Guaranty shall be in full force and effect.

 

(i)            Pledge Agreement.  The
Borrower, each 1st-Tier Subsidiary of the Borrower on the Initial
Borrowing Date and each Parent Company that is a Subsidiary on the Initial
Borrowing Date shall have each duly authorized, executed and delivered a Pledge

 

34

 

Agreement in
the form of Exhibit G (as modified, amended, restated and/or supplemented from
time to time in accordance with the terms thereof and hereof, the “Pledge
Agreement”) and shall have delivered to the Collateral Agent, as pledgee
thereunder:

 

(i)             all of the
Collateral, if any, referred to therein and then owned by such Persons, (x)
endorsed in blank in the case of promissory notes constituting Collateral and
(y) together with executed and undated transfer powers in the case of
certificated equity interests constituting Collateral;

 

(ii)           proper
Financing Statements (Form UCC-1 or the equivalent) fully executed (where
required) for filing under the UCC or other appropriate filing offices of each
jurisdiction as may be necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect the security interests purported to be
created by the Pledge Agreement;

 

(iii)          certified
copies of Requests for Information or Copies (Form UCC-11), or equivalent
reports, each of a recent date, listing all effective financing statements that
name any Pledge Party or any of its Subsidiaries as debtor and that are filed
in the jurisdictions referred to in clause (ii) above, together with copies of
such other financing statements that name any Pledge Party or any of its
Subsidiaries as debtor (none of which shall cover any of the Collateral, except
to the extent evidencing Permitted Liens or in respect of which the Collateral
Agent shall have received termination statements (Form UCC-3) or such other
termination statements as shall be required by local law fully executed (where
required) for filing); and

 

(iv)          evidence
that all other actions necessary or, in the reasonable opinion of the
Collateral Agent, desirable to create, maintain, effect, perfect, preserve,
maintain and protect the security interests purported to be created by the
Pledge Agreement have been taken;

 

and
the Pledge Agreement shall be in full force and effect.

 

(j)            Solvency.  The
Borrower shall have delivered to the Administrative Agent a solvency
certificate, dated the Initial Borrowing Date and in the form of Exhibit H
hereto.

 

(k)           Initial Public Offering.  On
the Initial Borrowing Date, the Borrower shall have (x) issued shares of
Borrower Common Stock pursuant to an underwritten initial public generating
gross cash proceeds (calculated before underwriting costs) of approximately
$462.5 million (the “IPO”) and (y) utilized the full amount of the cash
proceeds described in preceding clause (x) to make payments owing in connection
with the Transaction prior to the utilization by the Borrower of any proceeds
of Loans for such purpose.  On the Initial Borrowing Date, (i) the
IPO shall have been consummated in accordance with the terms and conditions of
the IPO Documents and all applicable law, (ii) the Administrative Agent shall
have received true and correct copies of all IPO Documents and (iii) all conditions
precedent to the consummation of the IPO as set forth in the IPO Documents
shall have been satisfied, and not waived unless consented to by each Agent and
the Required Lenders, to the reasonable satisfaction of each Agent and the
Required Lenders.

 

35

 

(l)            Refinancing.  (i)  Prior to the Initial Borrowing Date and the
Credit Events then occurring, the Borrower shall have commenced tender offers
and consent solicitations with respect to each issue of outstanding Existing
Tender Offer Notes (the “Tender Offers and Consent Solicitations”)
pursuant to which (I) the Borrower shall offer, subject to the Minimum Tender
Offer Condition for each such Tender Offer and Consent Solicitation and the
other terms and conditions contained therein, to purchase all of the
outstanding Existing Tender Offer Notes at a cash price equal to $1000 per
$1000 principal amount, plus accrued and unpaid interest thereon, (II) consents
shall be solicited to proposed amendments (the “Existing Tender Offer Notes
Indenture Amendments”) to each of the Existing Tender Offer Notes
Indentures, which amendments shall, inter  alia, provide for the
substantial elimination of the covenants contained in each of the Existing
Tender Offer Notes Indentures (including, without limitation, limitations on
restricted payments, dividends, transactions with affiliates, indebtedness and
guarantees by subsidiaries) and (III) the Borrower shall offer to pay to each
holder of Existing Tender Offer Notes which validly consents to the relevant
Existing Tender Offer Notes Indenture Amendment a consent fee in an amount not
to exceed $20 for each $1,000 principal amount of such holder’s Existing Tender
Offer Notes.  All terms and conditions of the Tender Offers and Consent
Solicitations and the Existing Tender Offer Notes Indenture Amendments shall be
reasonably satisfactory to the Agents, and in any event, the Tender Offers and
Consent Solicitations shall provide that the period for tendering Existing
Tender Offer Notes pursuant thereto shall terminate on or prior to the Initial
Borrowing Date.

 

(ii)           On or prior to the Initial Borrowing Date, (x) holders of
at least 75% (or, in the case of the Existing 2008 Senior Subordinated Notes,
51%) of the aggregate outstanding principal amount of each series of
outstanding Existing Tender Offer Notes shall have validly tendered, and not
withdrawn, their Existing Tender Offer Notes and provided their “Consent”
pursuant to, and in accordance with the requirements of, the Tender Offer and
Consent Solicitation therefor, and (y) the Borrower and the trustees under each
of the Existing Tender Offer Notes Indentures shall have duly executed and
delivered the Existing Tender Offer Notes Indenture Supplements and same shall
have become effective in accordance with their terms and the terms of the
relevant Existing Tender Offer Notes Indenture.

 

(iii)          On the Initial Borrowing Date (and concurrently with the
Credit Events occurring on such Date), the Borrower shall have deposited into a
segregated account (the “Segregated Account”) proceeds of Initial B Term
Loans in an aggregate principal amount equal to the sum of (x) the aggregate
principal amount of the Existing 2008 Senior Subordinated Notes not validly
tendered (or validly tendered and subsequently withdrawn) pursuant to the
Tender Offer and Consent Solicitation therefor plus (y) all unpaid
interest accruing and applicable call premiums thereon through the 30th
day following the Initial Borrowing Date (the “Redemption Date”).

 

(iv) On the Initial
Borrowing Date, the Borrower shall have delivered an irrevocable “notice of
redemption” to the trustee under the Existing 2008 Senior Subordinated Notes
Indenture pursuant to, and in accordance with the requirements of, the Existing
2008 Senior Subordinated Notes Indenture.

 

(v)           On or prior to the Initial Borrowing Date, the Borrower
shall have redeemed or repurchased all of its outstanding shares of Series A
Preferred Stock for an 

 

36

 

aggregate
redemption price (including any and all accrued but unpaid dividends with
respect to the Series A Preferred Stock) equal to approximately $131.0 million.

 

(vi)          On the Initial Borrowing Date and concurrently with the
incurrence of Loans on such date, approximately $194.8 million of Indebtedness
of the Borrower and its Subsidiaries, consisting of all Indebtedness under the
Existing Credit Agreement (other than Existing Letters of Credit) and all but
approximately $2.2 million in aggregate principal amount of the Existing
Seller/Opco Notes, shall have been repaid in full, together with all fees,
accrued interest and other amounts owing thereon (collectively, the “Additional
Refinanced Indebtedness”), all commitments under the documents evidencing
Additional Refinanced Indebtedness shall have been terminated, all letters of
credit issued pursuant to the documents evidencing the Additional Refinanced
Indebtedness shall have been terminated or incorporated hereunder as Letters of
Credit as contemplated by Section 1A.01(d) and all guaranties issued in support
of such Additional Refinanced Indebtedness shall have been terminated.

 

(vii)         On the Initial Borrowing Date and
concurrently with the incurrence of Loans on such date, all security interests
in respect of, and Liens securing, the Additional Refinanced Indebtedness shall
have been terminated and released, and the Administrative Agent shall have
received all such releases as may have been reasonably requested by the
Administrative Agent, which releases shall be in form and substance reasonably
satisfactory to the Administrative Agent.  Without limiting the
foregoing, there shall have been delivered to the Administrative Agent proper
termination statements (Form UCC-3 or the appropriate equivalent) for filing
under the UCC of each jurisdiction where a financing statement (Form UCC-1 or
the appropriate equivalent) was filed with respect to the Borrower or any of
its Subsidiaries in connection with the security interests created with respect
to the Additional Refinanced Indebtedness and the documentation related
thereto, all of which shall be in form and substance reasonably satisfactory to
the Administrative Agent.

 

(viii)        On the Initial Borrowing Date and after
giving effect to the consummation of the Transaction (including the Tender
Offer and Consent Solicitation Consummation as if the same had occurred on such
date but excluding the Existing 2008 Senior Subordinated Notes Redemption and
the Optional Non-2008 Tender Offer Notes Refinancing), the Borrower and its
Subsidiaries shall have no outstanding preferred equity or Indebtedness, except
for (i) Indebtedness pursuant to or in respect of the Credit Documents, (ii)
Existing Tender Offer Notes not repurchased pursuant to the Tender Offer and
Consent Solicitation Consummation in an aggregate outstanding principal amount
not to exceed $48.0 million and (iii) such other existing Indebtedness of the
Borrower and its Subsidiaries, if any, as shall be permitted by the Agents and
Required Lenders to remain outstanding (all of which Indebtedness described in
this subclause (iii) shall be required to be specifically listed as Scheduled
Existing Indebtedness).  On and as of the Initial Borrowing Date, all
Indebtedness described in the immediately preceding sentence shall remain outstanding
after giving effect to the Transaction (other than the Existing 2008 Senior
Subordinated Notes Redemption and the Optional Non-2008 Tender Offer Notes
Refinancing) and the other transactions contemplated hereby without any breach,
required repayment, required offer to purchase, default, event of default or
termination rights existing thereunder or arising as a result of the
Transaction and the other transactions contemplated hereby.

 

37

 

(m)          Intercompany Subordination
Agreement.  The Borrower and each of its Subsidiaries shall have
duly authorized, executed and delivered a Subordination Agreement substantially
in the form of Exhibit J hereto (as amended, restated, modified and/or
supplemented from time to time in accordance with the terms hereof and thereof,
the “Intercompany Subordination Agreement”), and the Intercompany
Subordination Agreement shall be in full force and effect.

 

(n)           Fees.  The Borrower
shall have paid to the Agents and the Lenders all Fees and expenses agreed upon
by such parties to be paid on or prior to the Initial Borrowing Date (for
which, in the case of legal fees and expenses, the Borrower shall have received
in advance a written invoice in reasonable detail).

 

(o)           Projections.  On or
prior to the Initial Borrowing Date, each of the Agents and the Lenders shall
have received detailed projected consolidated financial statements of the
Borrower and its Subsidiaries for the period from the Initial Borrowing Date
through the Term Loan Maturity Date (“Projections”), which Projections
shall (x) reflect the forecasted consolidated financial condition of the
Borrower and its Subsidiaries after giving effect to the Transaction and (y) be
reasonably satisfactory in form and substance to the Agents.

 

4.02  Conditions Precedent to
All Loans (other than RF Loans and Delayed-Draw B Term Loans Incurred to
Finance an Optional Non-2008 Tender Offer Notes Redemption and RF Loans
Incurred on the Redemption Date to Finance the Existing 2008 Senior Subordinated
Notes Redemption).  The obligation of each Lender to make
Loans (including Loans made on the Initial Borrowing Date and on each
Incremental B Term Loan Borrowing Date but excluding (x) RF Loans and
Delayed-Draw B Term Loans made to finance an Optional Non-2008 Tender Offer
Notes Redemption, (y) RF Loans incurred on the Redemption Date to finance the
Existing 2008 Senior Subordinated Notes Redemption and (z) Mandatory Borrowings
made after the Initial Borrowing Date, which shall be made as provided in
Section 1.01(e)), and of each Letter of Credit
Issuer to issue Letters of Credit, is subject, at the time of the making
of each such Loan and the issuance of each such
Letter of Credit, to the satisfaction of the following conditions:

 

(a)           Notice of Borrowing.  The
Administrative Agent shall have received a Notice of Borrowing meeting the
requirements of Section 1.03 (or, in the case of a Swingline Loan, the
notice referred to in Section 1.03(b)(i)) or a
Letter of Credit Request meeting the requirements of Section 1A.03.

 

(b)           No Default;
Representations and Warranties.  At the time of each making of
Loans and each issuance of a Letter of Credit and also after giving effect
thereto, (i) there shall exist no Default or Event of Default and (ii) all
representations and warranties made by any Credit Party contained herein or in
the other Credit Documents shall be true and correct in all material respects
with the same effect as though such representations and warranties had been
made on and as of the date of such Loans or issuance of such Letter of Credit,
except to the extent that such representations and warranties expressly relate
to an earlier date, in which case such representations and warranties shall be
true and correct as of such earlier date.

 

38

 

(c)           Regulation U.        If
at any time any Margin Stock is pledged or required to be pledged pursuant to
the Pledge Agreement, all actions required to be taken pursuant to Section 6.12
shall have been taken to the reasonable satisfaction of the Administrative
Agent.

 

4.03  Special Condition Precedent
to Incurrence of RF Loans and Delayed-Draw B Term Loans Incurred to Finance an
Optional Non-2008 Tender Offer Notes Redemption and of RF Loans Incurred on the
Redemption Date to Finance the Existing 2008 Senior Subordinated Notes
Redemption.  The
obligation of each Lender to (x) make RF Loans and Delayed-Draw B Term Loans to
finance any Optional Non-2008 Tender Offer Notes Redemption and (y) make RF
Loans on the Redemption Date to finance the Existing 2008 Senior Subordinated
Notes Redemption, is subject to the absence, at the time of making such Loans
and also after giving effect thereto, of any Default or Event of Default under
Section 8.01 or 8.05.

 

The occurrence of the Initial
Borrowing Date and the acceptance of the benefits or proceeds of each Credit
Event shall constitute a representation and warranty by the Borrower to each
Agent, each Letter of Credit Issuer and each of the Lenders that all the
conditions specified in Section 4 and applicable to such Credit Event have been
satisfied as of that time.  All of the certificates, legal opinions
and other documents and papers referred to in Sections 4.01 and 4.02, unless
otherwise specified, shall be delivered to the Administrative Agent for the
benefit of each of the Lenders and, except for the Notes, in sufficient
counterparts for each of the Lenders and shall be reasonably satisfactory in
form and substance to the Agents.

 

SECTION 5.  Representations, Warranties
and Agreements.  In order to induce the Lenders to enter
into this Agreement, to make the Loans and to issue and/or participate in
Letters of Credit, the Borrower makes the following representations and
warranties to, and agreements with, the Lenders, all of which shall survive the
execution and delivery of this Agreement, the making of the Loans and the
issuance of the Letters of Credit:

 

5.01  Company Status.  Each
of the Borrower and its Subsidiaries (i) is a duly organized and validly
existing Company and is in good standing, in each case under the laws of the
jurisdiction of its organization and has the Company power and authority to own
its property and assets and to transact the business in which it is engaged and
(ii) is duly qualified and is authorized to do business and, to the extent
relevant, is in good standing in all jurisdictions where it is required to be
so qualified except where the failure to be so qualified, authorized or in good
standing would not be reasonably likely to have a Material Adverse Effect.

 

5.02  Company Power and
Authority.  Each Credit Party has the Company power
and authority to execute, deliver and carry out the terms and provisions of the
Documents to which it is a party and has taken all necessary action to
authorize the execution, delivery and performance of the Documents to which it
is a party. Each Credit Party has duly executed and delivered each Document to
which it is a party and each such Document constitutes the legal, valid and
binding obligation of such Person enforceable in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditors’ rights generally and general equitable
principles (regardless of whether enforcement is sought in equity or at law).

 

39

 

5.03  No Violation.  Neither
the execution, delivery or performance by any Credit Party of the Documents to
which it is a party nor compliance with the terms and provisions thereof, (i)
will contravene any applicable provision of any law, statute, rule, regulation,
order, writ, injunction or decree of any court or governmental instrumentality,
(ii) will violate, conflict or be inconsistent with or result in any breach of,
any of the terms, covenants, conditions or provisions of, or constitute a
default under, or (other than pursuant to the Pledge Agreement) result in the
creation or imposition of (or the obligation to create or impose) any Lien upon
any of the property or assets of the Borrower or any of its Subsidiaries
pursuant to the terms of any indenture, mortgage, deed of trust or other
material agreement or instrument to which the Borrower or any of its
Subsidiaries is a party or by which it or any of its property or assets are
bound or to which it may be subject or (iii) will violate any provision of the
organizational documents (including by-laws) of the Borrower or any of its
Subsidiaries.

 

5.04  Litigation.  There
are no actions, suits or proceedings pending or, to the knowledge of the
Borrower, threatened (i) with respect to any Credit Document, (ii) with respect
to the Transaction or any other Document or (iii) with respect to the Borrower
or any of its Subsidiaries that have had, or that are reasonably likely to
have, a Material Adverse Effect.  Additionally, there does not exist
any judgment, order or injunction prohibiting or imposing material adverse
conditions upon the incurrence of any Credit Event.

 

5.05  Use of Proceeds; Margin
Regulations.  (a) 
The proceeds of all Initial B Term Loans shall be utilized solely to
finance, in part, the Refinancing (including to fund the Segregated Account and
to finance the Existing 2008 Senior Subordinated Notes Redemption but excluding
the Optional Non-2008 Tender Offer Notes Refinancing) and to pay certain fees
and expenses relating to the Transaction.

 

(b)           The proceeds of all
Delayed-Draw B Term Loans shall be utilized solely to finance the Optional
Non-2008 Tender Offer Notes Refinancing.

 

(c)           The proceeds of all
Incremental B Term Loans shall be utilized for general corporate and working
capital purposes of the Borrower and its Subsidiaries (including, without
limitation, to finance Permitted Acquisitions).

 

(d)           The proceeds of RF
Loans may be used (x) on the Initial Borrowing Date to finance, in part, the
Refinancing (other than the Existing 2008 Senior Subordinated Notes Redemption
and the Optional Non-2008 Tender Offer Notes Refinancing) and to pay certain
fees and expenses relating to the Transaction and (y) for working capital,
general corporate and capital expenditure requirements of the Borrower and its
Subsidiaries (including to finance Permitted Acquisitions, the Existing 2008
Senior Subordinated Notes Redemption and the Optional Non-2008 Tender Offer
Notes Refinancing, to repay any Existing Seller/Opco Notes not refinanced
pursuant to the Refinancing and, subject to the satisfaction of the Minimum
Liquidity Condition, to pay dividends on Borrower Common Stock permitted to be
paid pursuant to the terms of this Agreement); provided that no more
than $13.0 million of proceeds of RF Loans may be incurred on the Initial
Borrowing Date for the purposes described in preceding clause (x).

 

40

 

(e)           The proceeds of
Swingline Loans may be used for the general corporate and working capital
purposes of the Borrower and its Subsidiaries; provided that no proceeds
from Swingline Loans may be used to finance the Refinancing or to pay fees and
expenses incurred in connection with the Transaction.

 

(f)            Neither the making
of any Loan hereunder, nor the use of the proceeds thereof, nor the occurrence
of any other Credit Event, will violate the provisions of Regulation T, U or X
of the Board of Governors of the Federal Reserve System and no part of any
Credit Event (or the proceeds thereof) will be used to purchase or carry any
Margin Stock or to extend credit for the purpose of purchasing or carrying any
Margin Stock, provided that proceeds of RF Loans may be utilized to
purchase Margin Stock (A) if such purchase (x) is pursuant to a Permitted
Acquisition of the Person issuing such Margin Stock and (y) is effected
pursuant to a friendly transaction (as determined by the Agents) not in violation
of such Regulations T, U or X and (B) to the extent otherwise permitted by
Sections 7.09(a)(ii), (iii) or (xvi).

 

(g)           The fair market
value of all Margin Stock owned by the Borrower and its Subsidiaries (other
than the capital stock of the Borrower held in treasury) does not exceed
$500,000.  At the time of each Credit Event, not more than 25% of the
value of the assets of the Borrower and its Subsidiaries taken as a whole
(including all capital stock of the Borrower held in treasury) will constitute
Margin Stock.

 

5.06  Governmental Approvals.  Except
for such consents, approvals and filings as have been obtained or made on or
prior to the Initial Borrowing Date and remain in full force and effect, no
order, consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any foreign or domestic
governmental or public body or authority (including, without limitation, the
FCC and applicable PUCs), or any subdivision thereof, is required to authorize
or is required in connection with (i) the execution, delivery and performance
of any Document or (ii) the legality, validity, binding effect or
enforceability of any Document.

 

5.07  Investment Company Act.  Neither
the Borrower nor any of its Subsidiaries is an “investment company” or a
company “controlled” by an “investment company,” within the meaning of the
Investment Company Act of 1940, as amended.

 

5.08  Public Utility Holding Company Act.  Neither
the Borrower nor any of its Subsidiaries is a “holding company,” or a
“subsidiary company” of a “holding company,” or an “affiliate” of a “holding
company” or of a “subsidiary company” of a “holding company” within the meaning
of the Public Utility Holding Company Act of 1935, as amended.

 

5.09  True and Complete Disclosure.  All
factual information (taken as a whole) heretofore or contemporaneously
furnished by or on behalf of the Borrower in writing to the Lenders for
purposes of or in connection with this Agreement or any transaction
contemplated herein is, and all other such factual information (taken as a
whole) hereafter furnished by or on behalf of any Credit Party in writing to
the Lenders hereunder will be, true and accurate in all material respects on
the date as of which such information is dated or certified and not incomplete
by omitting to state any material fact necessary to make such information
(taken as a whole) not misleading at such time in light of the circumstances
under which such information 

 

41

 

was
provided.  The projections and pro  forma financial
information contained in such materials are based on good faith estimates and
assumptions believed by the Borrower to be reasonable at the time made (it
being recognized by the Lenders that such projections as to future events are
not to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ from the projected results and that
such assumptions and estimates may prove to be inaccurate).

 

5.10  Financial Condition; Financial
Statements.  (a) 
On and as of the Initial Borrowing Date, on a pro  forma
basis after giving effect to the Transaction and all Indebtedness incurred, and
to be incurred (including, without limitation, the Loans and the application of
the proceeds thereof), and Liens created, and to be created, by each Credit
Party in connection therewith, with respect to the Borrower (on a stand-alone
basis) and the Borrower and its Subsidiaries (on a consolidated basis), (x) the
fair valuation of all of the tangible and intangible assets of the Borrower (on
a stand-alone basis) and the Borrower and its Subsidiaries (on a consolidated
basis) will exceed its or their debts, (y) it has or they have not incurred nor
intended to, nor believes or believe that it or they will, incur debts beyond
its or their ability to pay such debts as such debts mature and (z) it or they
will not have unreasonably small capital with which to conduct its or their
business.  For purposes of this Section 5.10, “debt” means any
liability on a claim, and “claim” means (i) the right to payment whether
or not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured; or (ii) the right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right
to an equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured.

 

(b)           (i)  The audited consolidated statements of
financial condition of the Borrower and its Subsidiaries at December 31, 2001,
December 31, 2002 and December 31, 2003 and the related consolidated statements
of income and cash flows and changes in shareholders’ equity of the Borrower
and its Subsidiaries for the fiscal years of the Borrower ended on such dates,
in each case furnished to the Lenders prior to the Initial Borrowing Date,
present fairly in all material respects the consolidated financial position of
the Borrower and its Subsidiaries at the date of said financial statements and
the results for the respective periods covered thereby and (ii) the unaudited
statement of financial condition of the Borrower and its Subsidiaries at September
30, 2004 and the related consolidated statement of income and cash flows and
change in shareholder’s equity of the Borrower and its Subsidiaries for
nine-month period of the Borrower ended on such date, in each case furnished to
the Lenders prior to the Initial Borrowing Date, present fairly in all material
respects the consolidated financial position of the Borrower and its
Subsidiaries at the date of said financial statements and the results for the
period covered thereby, subject to normal year-end adjustments.  All
such financial statements have been prepared in accordance with GAAP and
practices consistently applied except to the extent provided in the notes to
said financial statements and subject, in the case of unaudited financial statements,
to normal year-end adjustments (all of which are of a recurring nature and none
of which, individually or in the aggregate, would be material) and the absence
of footnotes.  The pro  forma consolidated balance sheet
of the Borrower as at September 30, 2004, a copy of which has been included in
the Rule 424(b) Prospectus filed with the SEC in connection with the IPO,
presents a good faith estimate of the consolidated pro  forma
financial condition of the Borrower (after giving effect to the Transaction and
all Indebtedness incurred or

 

42

 

to be incurred
in connection therewith) as at the date thereof.  Nothing has
occurred since December 31, 2003 that has had, or is reasonably likely to have,
a Material Adverse Effect.

 

(c)           Except as reflected
in the financial statements described in Section 5.10(b) or in the footnotes
thereto, there are as of the Initial Borrowing Date no liabilities or
obligations with respect to the Borrower or any of its Subsidiaries of a nature
(whether absolute, accrued, contingent or otherwise and whether or not due)
which, either individually or in aggregate, are reasonably likely to be
material to the Borrower and its Subsidiaries taken as a whole, except as
incurred in the ordinary course of business consistent with past practices.

 

(d)           On and as of the
Initial Borrowing Date, the Projections have been prepared on a basis
consistent with the financial statements referred to in Section 5.10(b) for the
fiscal year of the Borrower ended December 31, 2003, and are based on good
faith estimates and assumptions made by the management of the
Borrower.  On the Initial Borrowing Date, such management believed
that the Projections were reasonable and attainable (it being recognized by the
Lenders that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may differ from the projected results).

 

5.11  Security Interests.  At
any time on or after the Initial Borrowing Date, the Pledge Agreement creates,
as security for the obligations purported to be secured thereby, a valid and
enforceable Lien on all of the Collateral subject thereto at such time,
superior to and prior to the rights of all third Persons and subject to no
other Liens (except for Liens permitted under Section 7.03(a)), in favor of the
Collateral Agent for the benefit of the Secured Creditors, which Lien has been
perfected under applicable law.  No filings or recordings are
required in order to perfect the Lien on the Collateral created under the
Pledge Agreement, except for filings or recordings required in connection with
the Pledge Agreement which shall have been made on or prior to the Initial
Borrowing Date or as otherwise required in accordance with the terms of the
Pledge Agreement.

 

5.12  Compliance With Statutes.  Each
of the Borrower and its Subsidiaries is in compliance with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed
by, all governmental bodies, domestic or foreign, in respect of the conduct of
its business and the ownership of its property, except such non-compliance as
has not had, and is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect.

 

5.13  Tax Returns and Payments.  Each
of the Borrower and its Subsidiaries has filed all U.S. federal income tax
returns and all other material tax returns, domestic and foreign, required to
be filed by it and has paid all material taxes and assessments payable by it
which have become due, except for those contested in good faith and adequately
disclosed and fully provided for on the financial statements of the Borrower
and its Subsidiaries if and to the extent required by GAAP.  Each of
the Borrower and its Subsidiaries has at all times paid, or has provided
adequate reserves (in the good faith judgment of the management of the
Borrower) for the payment of, all U.S. federal, state and foreign income taxes
applicable for all prior fiscal years which are still open for audit and for
the current fiscal year to date.  There is no action, suit,
proceeding, investigation, audit, or claim now pending or, to the knowledge of
the 

 

43

 

Borrower,
threatened by any authority regarding any taxes relating to the Borrower or any
of its Subsidiaries which is reasonably likely to have a Material Adverse
Effect.

 

5.14  Compliance with ERISA.  (i)  Annex IV sets forth each Plan and
Multiemployer Plan; (ii) except as set forth on Annex IV, each Plan (and each
related trust, insurance contract or fund) is in substantial compliance with
its terms and with all applicable laws, including without limitation ERISA and
the Code; each Plan which is intended to be qualified under Section 401(a) of the
Code has received a determination letter from the Internal Revenue Service to
the effect that it meets the requirements of Section 401(a) of the Code;  except as set forth on Annex IV, no
Reportable Event has occurred with respect to a Plan; to the knowledge of the
Borrower, no Multiemployer Plan is insolvent or in reorganization; except as
set forth on Annex IV, no Plan has an Unfunded Current Liability which, when
added to the aggregate amount of Unfunded Current Liabilities with respect to
all other Plans, exceeds $3,000,000; no Plan which is subject to Section 412 of
the Code or Section 302 of ERISA has an accumulated funding deficiency, within
the meaning of such sections of the Code or ERISA, or has applied for or
received a waiver of an accumulated funding deficiency or an extension of any
amortization period, within the meaning of Section 412 of the Code or Section
303 or 304 of ERISA; all contributions required to be made with respect to a
Plan or a Multiemployer Plan have been timely made; neither the Borrower nor
any Subsidiary nor any ERISA Affiliate has incurred any material liability
(including any indirect, contingent or secondary liability) to or on account of
a Plan or a Multiemployer Plan pursuant to Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971
or 4975 of the Code or reasonably expects to incur any such liability under any
of the foregoing sections with respect to any Plan or any Multiemployer Plan;
no condition exists which presents a material risk to the Borrower or any
Subsidiary or any ERISA Affiliate of incurring a material liability to or on
account of a Plan or, to the knowledge of the Borrower, of any Multiemployer
Plan pursuant to the foregoing provisions of ERISA and the Code; no proceedings
have been instituted to terminate or appoint a trustee to administer any Plan
which is subject to Title IV of ERISA; except as would not result in any
material liability, no action, suit, proceeding, hearing, audit or investigation
with respect to the administration, operation or the investment of assets of
any Plan (other than routine claims for benefits) is pending, or to the best
knowledge of the Borrower expected or threatened; using actuarial assumptions
and computation methods consistent with Part 1 of subtitle E of Title IV of
ERISA, the aggregate liabilities of the Borrower and its Subsidiaries and its
ERISA Affiliates to all Multiemployer Plans in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of each
such Plan ended prior to the date of the most recent Loan incurrence, would not
exceed $50,000; except as would not result in a material liability, each group
health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of
the Code) which covers or has covered employees or former employees of the
Borrower, any Subsidiary or any ERISA Affiliate has at all times been operated
in compliance with the provisions of Part 6 of subtitle B of Title I of ERISA
and Section 4980B of the Code; no Lien imposed under the Code or ERISA on the
assets of the Borrower or any Subsidiary or any ERISA Affiliate exists or is
reasonably likely to arise on account of any Plan; and the Borrower and its
Subsidiaries do not maintain or contribute to any employee welfare benefit plan
(as defined in Section 3(1) of ERISA) which provides benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) or any Plan the obligations with respect to which could reasonably be
expected to have a material adverse effect on the ability of the Borrower to
perform its obligations under this Agreement.

 

44

 

5.15  Subsidiaries.  On and as
of the Initial Borrowing Date and after giving effect to the consummation of
the Transaction, the Borrower has no Subsidiaries other than those Subsidiaries
listed on Annex III, which correctly sets forth, as of the Initial Borrowing
Date, the percentage ownership (direct and indirect) of the Borrower in each
class of capital stock or other equity interests of each of its Subsidiaries
and also identifies the direct owner thereof.  All outstanding shares
of capital stock or other equity interests of each Subsidiary of the Borrower
have been duly and validly issued, are fully paid and non-assessable and are
free of preemptive rights.  No Subsidiary of the Borrower has
outstanding any securities convertible into or exchangeable for its capital
stock or other equity interests or outstanding any right to subscribe for or to
purchase, or any options or warrants for the purchase of, or any agreement
providing for the issuance (contingent or otherwise) of or any calls,
commitments or claims of any character relating to, its capital stock or other
equity interests or any stock appreciation or similar rights.

 

5.16  Intellectual
Property.  Each of the Borrower and its
Subsidiaries owns or holds a valid transferable license to use all the patents,
trademarks, service marks, trade names, domain names, technology, know-how,
copyrights, licenses, franchises and formulas or rights with respect to the
foregoing, that are used in the operation of the business of the Borrower or
such Subsidiary as presently conducted and are material to such business where
the failure to own or hold a valid license is reasonably likely to have a
Material Adverse Effect.

 

5.17  Environmental
Matters.  Each of the Borrower and its
Subsidiaries is in material compliance with all applicable Environmental Laws
governing its business for which failure to comply is reasonably likely to have
a Material Adverse Effect, and neither the Borrower nor any of its Subsidiaries
is liable for any material penalties, fines or forfeitures for failure to
comply with any of the foregoing in the manner set forth above.  All
licenses, permits, registrations or approvals required for the business of the
Borrower and each of its Subsidiaries under any Environmental Law have been secured
and each of the Borrower and its Subsidiaries is in substantial compliance
therewith, except where the failure to secure or comply with such licenses,
permits, registrations or approvals the failure to secure or to comply
therewith is not reasonably likely to have a Material Adverse
Effect.  There are no Environmental Claims pending or, to the
knowledge of the Borrower threatened, against the Borrower or any of its
Subsidiaries with respect to which any decision, ruling or finding is
reasonably likely to have a Material Adverse Effect.

 

5.18  Labor Relations.  No
Credit Party is engaged in any unfair labor practice that is reasonably likely
to have a Material Adverse Effect.  There is (i) no unfair labor
practice complaint pending against the Borrower or any of its Subsidiaries or,
to the Borrower’s knowledge, threatened against any of them, before the
National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against the Borrower or any of its Subsidiaries or, to the Borrower’s
knowledge, threatened against any of them, (ii) no strike, labor dispute,
slowdown or stoppage pending against the Borrower or any of its Subsidiaries
or, to the Borrower’s knowledge, threatened against the Borrower or any of its
Subsidiaries and (iii) no union representation question, to the Borrower’s
knowledge, existing with respect to the employees of the Borrower or any of its
Subsidiaries and no union organizing activities, to the Borrower’s knowledge,
are taking place, except with respect to any matter specified in clause (i),
(ii) or (iii) above, either individually or in the aggregate, such as is not
reasonably likely to have a Material Adverse Effect.

 

45

 

5.19  Subordination.  The
subordination provisions contained in the Existing 2008 Subordinated Notes
Documents and the Existing 2010 Subordinated Notes Documents and, on and after
the execution, delivery and/or incurrence thereof, any Permitted Senior
Subordinated Notes Documents and any agreements or instruments relating to any
Additional Permitted Subordinated Debt, and any Refinancing Indebtedness in
respect of the foregoing, are enforceable against the Borrower, the Subsidiary
Guarantors party thereto and the holders of such Indebtedness, except to the
extent that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws generally affecting
creditors’ rights and by equitable principles (regardless of whether
enforcement is sought in equity or at law), and all Obligations hereunder and
the obligations of the Borrower and each Subsidiary Guarantor under the other
Credit Documents are within the definitions of “Senior Debt” (or relevant
similar term) and “Designated Senior Debt” or “Designated Guarantor Senior Debt”,
as applicable, included in such subordination provisions.

 

5.20  Capitalization.  On
the Initial Borrowing Date, after giving effect to the Transaction, the
authorized capital stock of the Borrower shall consist of (i) 200,000,000
shares of common stock, $.01 par value per share (such authorized shares of
common stock, together with any subsequently authorized shares of such common
stock, the “Borrower Common Stock”), of which 34,925,432 shares are
issued and outstanding on the Initial
Borrowing Date (including 473,716 shares of restricted stock awarded under the
Borrower’s 2005 Stock Incentive Plan on the Initial Borrowing Date, which are
deemed outstanding for purposes of GAAP) and (ii) 100,000,000 shares of
preferred stock, $.01 per share, none of which is issued and outstanding on the
Initial Borrowing Date.  All such
outstanding shares have been duly and validly issued, are fully paid and
nonassessable and are free of preemptive rights.  On the Initial
Borrowing Date, the Borrower does not have outstanding any securities
convertible into or exchangeable for its capital stock or outstanding any
rights to subscribe for or to purchase, or any options for the purchase of, or
any agreement providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock or
any stock appreciation or similar rights.

 

SECTION
6.  Affirmative Covenants.  The
Borrower hereby covenants and agrees that until the Commitments have
terminated, no Notes or Letters of Credit are outstanding and the Loans,
together with interest, Fees and all other Obligations (other than any
indemnities described in Section 11.13 which are not then owing) incurred
hereunder, are paid in full:

 

6.01  Information
Covenants.  The Borrower will furnish to
each Lender:

 

(a)           Annual Financial Statements.  As
soon as available and in any event within 75 days after the close of each
fiscal year of the Borrower, the consolidated and consolidating balance sheet
of the Borrower and the Intermediary Holding Companies, as at the end of such
fiscal year and the related consolidated and consolidating statements of
operations and of cash flows for such fiscal year, and in each case setting
forth comparative consolidated and consolidating figures for the preceding
fiscal year, and (x) in the case of consolidated statements, examined by
independent certified public accountants of recognized national standing whose
opinion shall not be qualified as to the scope of audit and as to the status of
the Borrower as a going concern or (y) in the case of consolidating statements,
certified by the chief financial officer of the Borrower, together with a
certificate of such accounting firm stating that

 

46

 

in the course of its regular audit of the
business of the Borrower and the Intermediary Holding Companies, which audit
was conducted in accordance with generally accepted auditing standards, no
Default or Event of Default which has occurred and is continuing has come to
their attention or, if such a Default or Event of Default has come to their
attention a statement as to the nature thereof. 
If the Borrower has designated any Unrestricted Subsidiaries hereunder,
then the annual financial information required by this Section 6.01(a) shall
include a reasonably detailed presentation, either on the face of the financial
statements or in the footnotes thereto, of the financial condition and results
of operations of the Borrower and its Subsidiaries excluding the financial
condition and results of operations of the Unrestricted Subsidiaries of the
Borrower (although such separate presentation of financial information
excluding the effects of Unrestricted Subsidiaries need not be audited).

 

(b)           Quarterly Financial Statements.  As
soon as available and in any event within 45 days after the close of each of
the first three quarterly accounting periods in each fiscal year of the
Borrower, the consolidated and consolidating balance sheet of the Borrower and
the Intermediary Holding Companies, as at the end of such quarterly period and
the related consolidated and consolidating statements of operations and of cash
flows for such quarterly period and for the elapsed portion of the fiscal year
ended with the last day of such quarterly period, and in each case setting
forth comparative consolidated and consolidating figures for the related
periods in the prior fiscal year, all of which shall be in reasonable detail
and certified by the chief financial officer or controller of the Borrower,
subject to changes resulting from audit and normal year-end audit
adjustments.  If the Borrower has
designated any Unrestricted Subsidiaries hereunder, then the quarterly
financial information required by this Section 6.01(b) shall include a
reasonably detailed presentation, either on the face of the financial
statements or in the footnotes thereto, of the financial condition and results
of operations of the Borrower and its Subsidiaries excluding the financial
condition and results of operations of the Unrestricted Subsidiaries of the
Borrower.

 

(c)           Budgets; etc.  Not
more than 30 days after the commencement of each fiscal year of the Borrower
ending after the Initial Borrowing Date, consolidated and consolidating budgets
of the Borrower and its Subsidiaries in reasonable detail for each of the
twelve months of such fiscal year as customarily prepared by management for its
internal use setting forth, with appropriate discussion, the principal
assumptions upon which such budgets are based.

 

(d)           Officer’s Certificates.  At
the time of the delivery of the financial statements provided for in Sections
6.01(a) and (b), a certificate of the chief financial officer or other
Authorized Officer of the Borrower to the effect that no Default or Event of
Default exists or, if any Default or Event of Default does exist, specifying
the nature and extent thereof, which certificate (i) if delivered with the
financial statements required by Sections 6.01(a) and (b), shall set forth the
calculations required to establish (I) the Interest Coverage Ratio, the
Leverage Ratio and Senior Secured Leverage Ratio as at the last day of the
fiscal year or fiscal quarter, as the case may be, covered by such financial
statements and (II) whether the Borrower and its Subsidiaries were in
compliance with the provisions of Sections 7.11 and 7.12 as at the end of such
fiscal period, and (ii) if delivered with the financial statements required by
Section 6.01(b), shall set forth Available Cash and Cumulative Distributable
Cash, in each case determined as at the last day of the fiscal quarter of the
Borrower covered by such financial statements.

 

47

 

(e)           Quarterly Compliance Certificate.
Within 60 days following the end of each fiscal quarter of the Borrower
(commencing with the first full fiscal quarter of the Borrower ending after the
Initial Borrowing Date), a certificate (each, a “Quarterly Compliance Certificate”)
from an Authorized Officer, which certificate shall set forth (i) the
calculations required to establish (I) the Interest Coverage Ratio and the
Leverage Ratio as of the last day of the Test Period then last ended and (II)
the Available Cash and Cumulative Distributable Cash, in each case determined
as at the last day of the Test Period then last ended, and (ii) the amount of
Dividends, if any, that the Borrower intends to pay on the immediately
succeeding date on which the Borrower’s dividend policy provides for Dividends
to be paid by the Borrower on the Borrower Common Stock.

 

(f)            Notice of Default or Litigation.  Promptly,
and in any event within five Business Days after any officer of the Borrower
obtains knowledge thereof, notice of (x) the occurrence of any event which
constitutes a Default or Event of Default, which notice shall specify the
nature thereof, the period of existence thereof and what action the Borrower
proposes to take with respect thereto, and (y) the commencement of, or any significant
adverse development in, any litigation or governmental proceeding pending
against the Borrower or any of its Subsidiaries or their assets or business (i)
with respect to any Document or (ii) which has had, or is reasonably likely to
have, a Material Adverse Effect and (iii) any other event which has had, or is
reasonably likely to have, a Material Adverse Effect.

 

(g)           Other Information.  Promptly
upon transmission thereof, copies of any filings and registrations with, and
reports to, the Securities and Exchange Commission or any successor thereto
(the “SEC”) or holders (or any trustee, agent or other representative
therefor) of any Permitted Senior Unsecured Notes or Permitted Junior Capital
by the Borrower or any of its Subsidiaries, and with reasonable promptness,
such other information or documents (financial or otherwise) as the
Administrative Agent on its own behalf or on behalf of any Lender may
reasonably request from time to time.

 

6.02  Books,
Records and Inspections.  The Borrower
will, and will cause each of its Subsidiaries to, keep proper books of record
and account in which full, true and correct entries in conformity with, and as
required by, GAAP and all material requirements of law shall be made of all
dealings and transactions in relation to such Person’s business and
activities.  The Borrower will, and will cause its Subsidiaries to,
permit, upon reasonable notice to the chief financial officer, controller or
any other Authorized Officer of the Borrower, officers and designated representatives
of the Administrative Agent or the Required Lenders to visit and inspect any of
the properties or assets of the Borrower and any of its Subsidiaries in their
possession and to examine the books of account of the Borrower and any of its
Subsidiaries and discuss the affairs, finances and accounts of the Borrower and
of any of its Subsidiaries with, and be advised as to the same by, its and
their officers and independent accountants, all at such reasonable times and
intervals during normal business hours (with reasonable notice) and to such
reasonable extent as the Administrative Agent or the Required Lenders may
desire.

 

6.03  Insurance.  The
Borrower will, and will cause each of its Subsidiaries to, at all times
maintain in full force and effect insurance with reputable and solvent insurers
in such amounts, covering such risks and liabilities and with such deductibles
or self-insured retentions as are in accordance with normal industry
practice.  The Borrower will, and will cause each of its

 

48

 

Subsidiaries to, furnish to the
Administrative Agent on the Initial Borrowing Date and thereafter annually,
upon request of the Administrative Agent, a summary of the insurance carried.

 

6.04  Payment of Taxes.  The
Borrower will pay and discharge, and will cause each of its Subsidiaries to pay
and discharge, all material taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits, or upon any properties
belonging to it, prior to the date on which penalties attach thereto, and all
lawful claims which, if unpaid, would become a Lien or charge upon any material
properties of the Borrower or any of its Subsidiaries, provided that
neither the Borrower nor any Subsidiary shall be required to pay any such tax,
assessment, charge, levy or claim which is being contested in good faith and by
proper proceedings if it has maintained adequate reserves (in the good faith
judgment of the management of the Borrower) with respect thereto in accordance
with GAAP.

 

6.05  Company Franchises.  The
Borrower will do, and will cause each Subsidiary to do, or cause to be done,
all things reasonably necessary to preserve and keep in full force and effect
its existence and to preserve its material rights and franchises, other than
those the failure to preserve which could not reasonably be expected to have a
Material Adverse Effect, provided that any transaction permitted by
Section 7.02 will not constitute a breach of this Section 6.05.

 

6.06  Compliance
with Statutes, etc.  The Borrower will, and will
cause each Subsidiary to, comply with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign (including all Environmental Laws), in respect of the
conduct of its business and the ownership of its property other than those the
non-compliance with which is not reasonably likely to have a Material Adverse
Effect.

 

6.07  ERISA.  As
soon as possible and, in any event, within 10 days after the Borrower knows or
has reason to know of the occurrence of any of the following, the Borrower will
deliver to each of the Lenders a certificate of the chief financial officer of
the Borrower setting forth the full details as to such occurrence and the
action, if any, that the Borrower, any Subsidiary or any ERISA Affiliate is
required or proposes to take, together with any notices required or proposed to
be given to or filed with or by the Borrower, any Subsidiary, any ERISA
Affiliate, the PBGC, a Plan or Multiemployer Plan participant or the Plan
administrator with respect thereto:  that
a Reportable Event has occurred (except to the extent that the Borrower has
previously delivered to the Lender a certificate and notices (if any) concerning
such event pursuant to the next clause hereof); that a contributing sponsor (as
defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA
is subject to the advance reporting requirement of PBGC Regulation Section
4043.61 (without regard to subparagraph (b)(1) thereof), and an event described
in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section
4043 is reasonably expected to occur with respect to such Plan within the
following 30 days; that an accumulated funding deficiency, within the meaning
of Section 412 of the Code or Section 302 of ERISA, has been incurred or an
application may reasonably be expected to be or has been made for a waiver or
modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under Section
412 of the Code or Section 303 or 304 of ERISA with respect to a Plan; that any
contribution required to be made with respect to a Plan or Multiemployer Plan
has not been timely made; that a Plan or Multiemployer Plan has been or may
reasonably be expected to be terminated, reorganized,

 

49

 

partitioned or declared insolvent under Title
IV of ERISA; that a Plan has an Unfunded Current Liability which, when added to
the aggregate amount of Unfunded Current Liabilities with respect to all other
Plans, exceeds the aggregate amount of such Unfunded Current Liabilities that
existed on the Initial Borrowing Date by $500,000; that proceedings may
reasonably be expected to be or have been instituted to terminate or appoint a
trustee to administer a Plan which is subject to Title IV of ERISA; that a
proceeding has been instituted pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Multiemployer Plan; that the Borrower, any
Subsidiary or any ERISA Affiliate will or may reasonably be expected to incur
any material liability (including any indirect, contingent, or secondary
liability) to or on account of the termination of or withdrawal from a Plan or
Multiemployer Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980 of
the Code or Section 409 or 502(i) or 502(l) of ERISA or with respect to a group
health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of
the Code) under Section 4980B of the Code; or that the Borrower or any
Subsidiary may incur any material liability pursuant to any employee welfare
benefit plan (as defined in Section 3(1) of ERISA) that provides benefits to
retired employees or other former employees (other than as required by Section
601 of ERISA) or any Plan in addition to the liability that existed on the
Initial Borrowing Date pursuant to any such plan or plans.  Upon
request by any Lender, the Borrower will deliver to such Lender a complete copy
of the annual report (on Internal Revenue Service Form 5500-series) of each
Plan (including, to the extent required, the related financial and actuarial statements
and opinions and other supporting statements, certifications, schedules and
information) required to be filed with the Internal Revenue
Service.  In addition to any certificates or notices delivered to the
Lenders pursuant to the first sentence hereof, copies of any records, documents
or other information required to be furnished to the PBGC (other than any PBGC
Form 1), and any material notices received by the Borrower, any Subsidiary or
any ERISA Affiliate with respect to any Plan or Multiemployer Plan shall be
delivered to the Lender no later than 10 days after the date such records,
documents and/or information has been furnished to the PBGC or such notice has
been received by the Borrower, the Subsidiary or the ERISA Affiliate, as
applicable.

 

6.08  Good Repair.  The
Borrower will, and will cause each of its Subsidiaries to, ensure that its
material properties and equipment used or useful in its business are kept in
good repair, working order and condition, normal wear and tear excepted, and, subject
to Section 7.05, that from time to time there are made in such properties and
equipment all needful and proper repairs, renewals, replacements, extensions,
additions, betterments and improvements thereto, to the extent and in the
manner useful or customary for companies in similar businesses.

 

6.09  End
of Fiscal Years; Fiscal Quarters; Etc.The Borrower
will, for financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries’, fiscal years and fourth fiscal quarters to end on December 31 of
each year and (ii) each of its, and each of its Subsidiaries’, first three
fiscal quarters to end on the last day of March, June and September of each
year.

 

6.10  Permitted
Acquisitions.  (a)  Subject to
the provisions of this Section 6.10 and the requirements contained in the
definition of Permitted Acquisition, the Borrower and any Qualified Subsidiary
may from time to time effect Permitted Acquisitions, so long as (except to the
extent the Required Lenders otherwise specifically agree in writing in the case
of a specific

 

50

 

Permitted Acquisition): (i) no Default
or Event of Default shall be in existence at the time of the consummation of
the proposed Permitted Acquisition or immediately after giving effect thereto;
(ii) the Borrower shall have given the Administrative Agent and the Lenders at
least 5 Business Days’ prior written notice of any Permitted Acquisition; (iii)
the Borrower provides to the Administrative Agent and the Lenders as soon as
available but not later than 5 Business Days after the execution thereof, a
copy of any executed purchase agreement or similar agreement with respect to
such Permitted Acquisition; (iv) calculations are made by the Borrower of
compliance with the covenants contained in Sections 7.11 and 7.12 for the
Calculation Period most recently ended prior to the date of such Permitted
Acquisition, on a Pro  Forma Basis as if the respective Permitted
Acquisition (as well as all other Permitted Acquisitions and Significant Asset
Sales theretofore consummated after the first day of such Calculation Period)
had occurred on the first day of such Calculation Period, and such calculations
shall show that such financial covenants would have been complied with if the
Permitted Acquisition had occurred on the first day of such Calculation Period
(for this purpose, if the first day of the respective Calculation Period occurs
prior to the Initial Borrowing Date, calculated as if the covenants contained
in said Sections 7.11 and 7.12 had been applicable from the first day of the
Calculation Period); (v) based on good faith projections prepared by the
Borrower for the period from the date of the consummation of the Permitted
Acquisition to the date which is one year thereafter, the level of financial
performance measured by the covenants set forth in Sections 7.11 and 7.12 shall
be better than or equal to such level as would be required to provide that no
Default or Event of Default would exist under the financial covenants contained
in Sections 7.11 and 7.12 through the date which is one year from the date of
the consummation of the respective Permitted Acquisition (it being understood
that projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from the projected results); (vi) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on and as of the date of such Permitted Acquisition
(both before and after giving effect thereto), unless stated to relate to a
specific earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date; (vii)
after giving effect to such proposed Permitted Acquisition and the payment of
all amounts (including fees and expenses) owing in connection therewith, the
sum of the Total Unutilized Revolving Commitment then in effect plus the
aggregate amount of all Unrestricted cash and Cash Equivalents of the Borrower
and the Subsidiary Guarantors at such time shall equal or exceed the sum of (I)
$10,000,000 plus (II) an amount equal to the aggregate amount reasonably
likely to be payable in respect of all post-closing purchase price adjustments,
earn-out payments, non-compete payments and/or deferred purchase payments (or
similar payments), in each case required or which will be required in
connection with such Permitted Acquisition (and all other Permitted
Acquisitions for which such purchase price adjustments and other payments may
be required to be made) as determined by the Borrower in good faith plus
(III) all capital expenditures (and the financing thereof) reasonably
anticipated by the Borrower to be made in the business acquired pursuant to
such Permitted Acquisition within the 90-day period (such period for any
Permitted Acquisition, a “Post-Closing Period”) following such Permitted
Acquisition (and in the businesses acquired pursuant to all other Permitted
Acquisitions with Post-Closing Periods ended during the Post-Closing Period of
such Permitted Acquisition); (viii) in the case of (x) a proposed Permitted
Acquisition of an Acquired Person (other than a Telco or Carrier Services
Company) or non-

 

51

 

equity assets to be effected by a Qualified
Subsidiary (directly or through a Subsidiary of such Qualified Subsidiary) in
circumstances where the capital stock or other equity interests of the Acquired
Person acquired pursuant to such Permitted Acquisition are not to be pledged
under the Pledge Agreement or the assets so acquired pursuant to such Permitted
Acquisition are not held by a Person which is (or will concurrently become) a
Pledged Subsidiary or (y) the creation or acquisition of a new Telco or Carrier
Services Company pursuant to a Permitted Acquisition in circumstances where the
capital stock or other equity interests of such Telco or Carrier Services
Company is (or are) not to be pledged under the Pledge Agreement, the Pro
Forma EBITDA Test is satisfied and (ix) the Borrower shall have
delivered to the Administrative Agent an officer’s certificate executed by an
Authorized Officer, certifying to the best of his knowledge, compliance with
the requirements of preceding clauses (i) through (vii), inclusive, and
containing the calculations required by the preceding clauses (iv), (v), (vii)
and (viii).

 

(b)           The Borrower will use reasonable best efforts to obtain as
promptly as practicable after the consummation of any Permitted Acquisition,
any approvals not obtained on or prior to the date of the consummation of such
Permitted Acquisition, provided that (x) it shall not be a default under
this Section 6.10 if the Borrower fails to obtain any such approval, after
having used commercially reasonable efforts to obtain same and (y) the Borrower
may cease to seek to obtain any such approvals if it has been advised by
counsel or the applicable governmental agency that it will not, or is not
reasonably likely to, obtain such approval, provided, further,
that, in the event the Borrower is able to obtain any approval required to be
obtained in accordance with the terms of this Section 6.10, the Borrower shall
use commercially reasonable efforts to obtain as promptly as practicable after
receipt of such approval, an opinion of local counsel reasonably satisfactory
to the Administrative Agent covering the regulatory aspects, if any, of the
respective Permitted Acquisition, which opinion shall be in form and substance
reasonably satisfactory to the Administrative Agent.

 

(c)           At the time of each Permitted
Acquisition involving the creation or acquisition of a Subsidiary, or the
acquisition of capital stock or other equity interests of any Person, the
capital stock or other equity interests thereof created or acquired in
connection with such Permitted Acquisition shall be pledged for the benefit of
the Secured Creditors pursuant to the Pledge Agreement as, and to the extent
required by, Section 7.07.

 

(d)           The Borrower shall cause each
Subsidiary which is formed to effect, or is acquired pursuant to, a Permitted
Acquisition to comply with, and to execute and deliver, all of the
documentation (if any) required by, Section 7.07, to the reasonable
satisfaction of the Administrative Agent.

 

(e)           The consummation of each Permitted Acquisition shall be
deemed to be a representation and warranty by the Borrower that the
certifications by the Borrower (or by one or more of its Authorized Officers)
pursuant to Section 6.10(a) are true and correct and that all conditions
thereto have been satisfied and that same is permitted in accordance with the
terms of this Agreement, which representation and warranty shall be deemed to
be a representation and warranty for all purposes hereunder, including, without
limitation, Sections 4 and 8.

 

6.11  CoBank Capital.  The
Borrower will purchase such participation certificates in CoBank as CoBank may
require from time to time in accordance with its bylaws.  The

 

52

 

Borrower hereby consents and agrees that the
amount of any distributions with respect to its patronage with CoBank that are
made in qualified written notices of allocation (as defined in 26 U.S.C. 1388)
and that are received by the Borrower from CoBank, will be taken into account
by the Borrower at their stated Dollar amounts whether the distribution be
evidenced by a participation certificate or other form of written notice that
such distribution has been made and recorded in the name of the Borrower on the
records of CoBank.

 

6.12  Margin Stock.  The
Borrower will take all actions so that at all times the fair market value of
all Margin Stock owned by the Borrower and its Subsidiaries (other than capital
stock of the Borrower held in treasury) shall not exceed
$500,000.  So long as the covenant contained in the immediately
preceding sentence is complied with, all Margin Stock at any time owned by the
Borrower and its Subsidiaries will not constitute Collateral and no security
interest shall be granted therein pursuant to any Credit
Document.  Without excusing any violation of the first sentence of
this Section 6.12, if at any time the fair market value of all Margin Stock owned
by the Borrower and its Subsidiaries (other than capital stock of the Borrower
held in treasury) exceeds $500,000, then (x) all Margin Stock owned by the
Pledge Parties (other than capital stock of the Borrower held in treasury)
shall be pledged, and delivered for pledge, pursuant to the Pledge Agreement
and (y) the Borrower will execute and deliver to the Lenders appropriate
completed forms (including, without limitation, Forms G-3 and U-1, as
appropriate) establishing compliance with Regulations T, U and X of the Board
of Governors of the Federal Reserve System.  If at any time any
Margin Stock is required to be pledged as a result of the provisions of the
immediately preceding sentence, repayments of outstanding Obligations shall be
required, and subsequent Credit Events shall be permitted, only in compliance
with the applicable provisions of Regulations T, U and X of the Board of
Governors of the Federal Reserve System.

 

6.13  Post-Closing
Refinancing.  (a) No later than the
third Business Day following the Initial Borrowing Date, the Borrower shall
have (i) purchased for cash all Existing Tender Offer Notes validly tendered on
the Initial Borrowing Date pursuant to the Tender Offers and Consent
Solicitations and (ii) paid to each holder of Existing Tender Offer Notes
tendering the same pursuant to the Tender Offers and Consent Solicitations the
consent fee referred to in Section 4.01(l)(i)(III).

 

(b)           On the Redemption Date, the Borrower shall (x) redeem all
of the then outstanding Existing 2008 Senior Subordinated Notes and (y) pay all
related call premiums (not to exceed $4.5 million) and all accrued and
unpaid interest thereon, in each case pursuant to, and in accordance with the
terms of, the Existing 2008 Senior Subordinated Notes Indenture (collectively,
the “Existing 2008 Senior Subordinated Notes Redemption”).

 

6.14  Special
Covenant Regarding Cash Management Policy.  The
Borrower shall, and shall cause its Subsidiaries to, at all times comply with
the cash management policy of the Borrower and its Subsidiaries delivered to
the Administrative Agent on the Initial Borrowing Date, without giving effect
to any changes thereto, except to the extent such changes are not adverse to
the interests of the Lenders or are otherwise required to ensure compliance
with applicable law or regulation.

 

6.15  PIK Requirements.  On and after the date of the initial issuance
of any Additional Permitted Subordinated Debt, the Borrower shall pay interest
owing on any

 

53

 

outstanding Additional Permitted Subordinated
Debt solely through (x) the accretion of the principal amount thereof or (y)
the issuance of additional notes evidencing Additional Permitted Subordinated
Debt, rather than in cash.

 

6.16  Interest
Rate Protection. 
No later than the 90th day after the Initial Borrowing Date, the
Borrower shall enter into, and for a minimum period of two years thereafter
maintain, Interest Rate Agreements establishing a fixed or maximum interest
rate acceptable to the Administrative Agent for an aggregate notional amount
equal to at least 50% of the initial aggregate principal amount of the Initial
B Term Loans incurred on the Initial Borrowing Date.

 

6.17  Maintenance
of Company Separateness.  (a) 
The Borrower will, and will cause each of its Subsidiaries and
Unrestricted Subsidiaries to, satisfy customary Company formalities, including,
as applicable, the holding of regular board of directors’ and shareholders’
meetings or action by directors or shareholders without a meeting and the
maintenance of Company offices and records. Neither the Borrower nor any of its
Subsidiaries shall make any payment to a creditor of any Unrestricted
Subsidiary in respect of any liability of any Unrestricted Subsidiary, and no
bank account of any Unrestricted Subsidiary shall be commingled with any bank
account of the Borrower or any of its Subsidiaries. Any financial statements
distributed to any creditors of any Unrestricted Subsidiary shall clearly
establish or indicate the Company separateness of such Unrestricted Subsidiary
from the Borrower and its Subsidiaries.

 

(b)           The Borrower shall not permit any cash of any Non-Pledge
Party Subsidiary, on the one hand, and any Pledge Party, on the other hand, to
be commingled in any bank account.

 

SECTION 7.  Negative Covenants.  The
Borrower hereby covenants and agrees that until the Commitments have
terminated, no Notes or Letters of Credit are outstanding and the Loans,
together with interest, Fees and all other Obligations (other than any
indemnities described in Section 11.13 which are not then owing) incurred
hereunder, are paid in full:

 

7.01  Changes in Business.  (a)  The
Borrower will not permit at any time the business activities taken as a whole
conducted by the Borrower, its Subsidiaries and its Unrestricted Subsidiaries
to be materially different from the business activities taken as a whole
(including incidental activities) conducted by the Borrower and its
Subsidiaries on the Initial Borrowing Date and businesses reasonably related
thereto (the “Business”).

 

(b)           Notwithstanding the foregoing, no 2d-Tier Holdco will
engage in any business or own any significant assets (other than its ownership
of (x) equity interests of Subsidiaries existing on the date hereof or
permitted to be created, established or acquired pursuant to the terms of this
Agreement and (y) intercompany obligations owed to it and permitted to be
extended by it pursuant to Section 7.06(c)) or have any liabilities (other than
(x) those liabilities for which it is responsible under this Agreement and the
other Credit Documents to which it is a party and (y) intercompany debt
permitted to be incurred by it pursuant to Section 7.06(c)); provided
that any 2d-Tier Holdco may engage in those activities and incur related
liabilities that are incidental to (x) the maintenance of its corporate
existence in compliance with applicable law, (y) legal, tax and accounting
matters in connection with any of the foregoing activities and

 

54

 

(z) the entering into,
and performing its obligations under, this Agreement and the other Credit
Documents to which it is a party.

 

7.02  Consolidation,
Merger, Sale or Purchase of Assets, etc.  The Borrower will not, and will not permit
any Subsidiary to, wind up, liquidate or dissolve its affairs, or enter into
any transaction of merger or consolidation, or convey, sell, lease or otherwise
dispose of all or any part of its property or assets (other than inventory or
obsolete equipment or excess equipment no longer needed in the conduct of its
business in the ordinary course of business) or purchase, lease or otherwise
acquire all or any part of the property or assets of any Person (other than
purchases or other acquisitions of inventory, leases, materials and equipment
in the ordinary course of business) or agree to do any of the foregoing at any
future time without a contingency relating to obtaining any required approval
hereunder, except that the following shall be permitted:

 

(a)           (i) 
any Subsidiary may be merged or consolidated with or into, or be
liquidated into, the Borrower or a Subsidiary Guarantor (so long as the
Borrower or such Subsidiary Guarantor is the surviving corporation), or all or
any part of its business, properties and assets may be conveyed, sold or
transferred to the Borrower or any Subsidiary Guarantor, and (ii) any
Subsidiary that is not a Subsidiary Guarantor may be merged or consolidated
with or into, or convey, sell or transfer its assets to, another Subsidiary
that is not a Subsidiary Guarantor, provided that if the stock or other
equity interests of either such Person were pledged pursuant to the Pledge
Agreement the stock or other equity interests of the surviving entity or the
transferee entity, as the case may be, shall also be pledged pursuant to the
Pledge Agreement; provided, further, that no such merger or
consolidation otherwise permitted by this clause (a) between a Pledged
Subsidiary and Non-Pledged Subsidiary, and no such conveyance, sale or transfer
by a Pledged Subsidiary to a Non-Pledged Subsidiary, shall be permitted unless,
after giving effect thereto, the Pro  Forma EBITDA Test is
satisfied;

 

(b)           capital expenditures to the extent
within the limitations set forth in Section 7.05;

 

(c)           the investments, acquisitions and
transfers or dispositions of properties, shares and assets permitted pursuant
to Section 7.06;

 

(d)           each of the Borrower and any
Subsidiary may lease (as lessee) real or personal property in the ordinary
course of business (so long as such lease does not create a Capitalized Lease
Obligation not otherwise permitted by Section 7.04(c));

 

(e)           licenses or sublicenses by the
Borrower and its Subsidiaries of intellectual property in the ordinary course
of business, provided, that such licenses or sublicenses shall not interfere
with the business of the Borrower or any Subsidiary;

 

(f)            (i)            Excluded
Asset Sales and (ii) additional sales or dispositions of assets to the extent
that the aggregate Net Cash Proceeds received from all such sales and
dispositions permitted by this clause (f)(ii) after the Initial Borrowing Date
shall not exceed $4,000,000 in any fiscal year of the Borrower, provided
that (x) each such sale or

 

55

 

disposition pursuant to this clause (f) shall be in an amount at least
equal to the fair market value thereof and for proceeds consisting of at least
85% cash and (y) the Net Cash Proceeds of any such sale are reinvested and/or
applied as a mandatory repayment or commitment reduction to the extent required
by Section 3.02(A)(b) or Section 2.03(d) or (f), as the case may be, provided,
further, that the sale or disposition of the capital stock or other
equity interests of any Subsidiary of the Borrower pursuant to this clause (f)
shall be prohibited unless it is for all of the outstanding capital stock or
other equity interests of such Subsidiary owned by the Borrower and its
Subsidiaries;

 

(g)           Permitted Acquisitions may be
consummated in accordance with the requirements of Section 6.10;

 

(h)           leases and subleases permitted under
Section 7.03(d) and (g); and

 

(i)            Permitted Swap Transactions.

 

7.03  Liens.  The
Borrower will not, and will not permit any of its Subsidiaries to, create,
incur, assume or suffer to exist any Lien upon or with respect to any property
or assets of any kind (real or personal, tangible or intangible) of the
Borrower or any such Subsidiary whether now owned or hereafter acquired, or
sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including sales
of accounts receivable or notes with recourse to the Borrower or any of its
Subsidiaries) or assign any right to receive income, except:

 

(a)           Liens for taxes not yet delinquent or
Liens for taxes being contested in good faith and by appropriate proceedings
for which adequate reserves (in the good faith judgment of the management of
the Borrower) have been established in accordance with GAAP;

 

(b)           Liens in respect of property or
assets of the Borrower or any of its Subsidiaries imposed by law which were
incurred in the ordinary course of business, such as carriers’, warehousemen’s
and mechanics’ Liens, statutory landlord’s Liens, and other similar Liens
arising in the ordinary course of business, and (x) which do not in the
aggregate materially detract from the value of such property or assets or
materially impair the use thereof in the operation of the business of the
Borrower or any of its Subsidiaries or (y) which are being contested in good
faith by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or asset subject to such
Lien;

 

(c)           Liens created by or pursuant to this
Agreement or the other Credit Documents;

 

(d)           Liens created pursuant to (x) Capital
Leases in respect of Capitalized Lease Obligations permitted by Section 7.04(c)
and (y) Capital Leases securing Permitted MJD Capital Debt;

 

56

 

(e)           Liens arising from judgments, decrees
or attachments and Liens securing appeal bonds arising from judgments, in each
case in circumstances not constituting an Event of Default under Section 8.09;

 

(f)            Liens (other than any Lien imposed
by ERISA) incurred or deposits made in the ordinary course of business in connection
with workers’ compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations incurred in the ordinary
course of business (exclusive of obligations in respect of the payment for
borrowed money);

 

(g)           leases or subleases granted to others
not interfering in any material respect with the business of the Borrower or
any of its Subsidiaries;

 

(h)           easements, rights-of-way,
restrictions, minor defects or irregularities in title and other similar
charges or encumbrances not interfering in any material respect with the
ordinary conduct of the business of the Borrower or any of its Subsidiaries;

 

(i)            Liens arising from precautionary UCC
financing statement filings regarding operating leases entered into by the
Borrower or any of its Subsidiaries in the ordinary course of business and
statutory and common law landlords’ liens under leases to which the Borrower or
any of its Subsidiaries is a party;

 

(j)            purchase money Liens securing
payables arising from the purchase by the Borrower or any Subsidiary Guarantor
of any equipment or goods in the normal course of business, provided
that such payables shall not constitute Indebtedness;

 

(k)           any interest or title of a lessor
under any lease permitted by this Agreement;

 

(l)            Liens in existence on, and which are
to continue in effect after, the Effective Date which are listed, and the
property subject thereto described in, Annex V, plus extensions and
renewals of such Liens, provided that (x) the aggregate principal amount
of the Indebtedness, if any, secured by such Liens does not increase from that
amount outstanding at the time of any such extension or renewal and (y) any
such extension or renewal does not encumber any additional assets or properties
of the Borrower or any of its Subsidiaries;

 

(m)          Liens arising pursuant to purchase
money mortgages or security interests securing Indebtedness representing the
purchase price (or financing of the purchase price within 90 days after the
respective purchase) of assets acquired by the Borrower or any Subsidiary after
the Initial Borrowing Date, provided that (i) any such Liens attach only
to the assets so acquired, (ii) the Indebtedness secured by any such Lien does
not exceed 100%, nor is less than 70%, of the lesser of the fair market value
or purchase price of the property being purchased at the time of the incurrence
of such Indebtedness and (iii) the Indebtedness secured by such Liens is
permitted by Section 7.04(e);

 

57

 

(n)           Liens on property or assets acquired
pursuant to a Permitted Acquisition, or on property or assets of a Person in
existence at the time such Person is acquired pursuant to a Permitted
Acquisition, in each case securing Permitted Acquired Debt, provided
that (i) such Liens do not attach to the capital stock or other equity
interests of any Subsidiary of the Borrower and (ii) such Liens existed prior
to, and were not incurred in contemplation of, such Permitted Acquisition and
do not attach to any other asset of the Borrower or any of its Subsidiaries;
and

 

(o)           Liens on property or assets of a
Person in existence at the time such Person is acquired pursuant to an
Investment permitted under Section 7.06(l), in each case securing Indebtedness
permitted under Section 7.04, provided that (i) such Liens do not attach
to the capital stock or other equity interests of any Subsidiary of the
Borrower (other than any capital stock or other equity interests not held by
the Borrower or any of its Subsidiaries) and (ii) such Liens existed prior to,
and were not incurred in contemplation of, such Investment and do not attach to
any other asset of the Borrower or any of its Subsidiaries.

 

7.04  Indebtedness.  The
Borrower will not, and will not permit any of its Subsidiaries to, contract,
create, incur, assume or suffer to exist any Indebtedness, except:

 

(a)           Indebtedness incurred pursuant to
this Agreement and the other Credit Documents;

 

(b)           intercompany Indebtedness permitted
by Section 7.06(c);

 

(c)           Capitalized Lease Obligations
initially incurred after the Initial Borrowing Date, provided that the
aggregate Capitalized Lease Obligations (exclusive of Permitted MJD Capital
Debt) outstanding at any time under all Capital Leases incurred in reliance on
this clause (c) after Initial Borrowing Date, when added to the aggregate
outstanding amount of Indebtedness incurred in reliance on Section 7.04(e),
shall not exceed $30,000,000 at any time;

 

(d)           Indebtedness of the Borrower under
Interest Rate Agreements entered into to protect it against fluctuations in
interest rates in respect of Indebtedness otherwise permitted under this Agreement,
so long as the entering into of such Interest Rate Agreements are bona  fide
hedging activities and are not for speculative purposes;

 

(e)           Indebtedness incurred pursuant to
purchase money mortgages permitted by Section 7.03(m); provided that the
aggregate outstanding amount of Indebtedness incurred in reliance on this
clause (e), when added to the aggregate outstanding amount of all Capitalized
Lease Obligations incurred in reliance on Section 7.04(c), shall not exceed
$30,000,000 at any time;

 

(f)            (i) unsecured Indebtedness of the
Borrower incurred under the Existing 2010 Senior Subordinated Notes and the
Existing 2010 Senior Subordinated Notes Indenture, and of the Subsidiary
Guarantors under subordinated guarantees of the obligations of the Borrower
under the Existing 2010 Senior Subordinated Notes Documents, in an aggregate
principal amount not to exceed $20,000,000 (less the amount of any

 

58

 

repayments of principal thereof after the Initial Borrowing Date), (ii)
unsecured Indebtedness of the Borrower incurred under the Existing 2010 Senior
Notes and the Existing 2010 Senior Notes Indenture, and of the Subsidiary
Guarantors under guarantees of the obligations of the Borrower under the
Existing 2010 Senior Notes Documents, in an aggregate principal amount not to
exceed $2,100,000 (less the amount of any repayments of principal
thereof after the Initial Borrowing Date) and (iii) at any time prior to the
Redemption Date, unsecured Indebtedness of the Borrower incurred under the
Existing 2008 Senior Subordinated Notes and the Existing 2008 Senior
Subordinated Notes Indenture, in an aggregate principal amount not to exceed
$22,500,000 (less the amount of any repayments of principal thereof
after the Initial Borrowing Date);

 

(g)           Indebtedness (the “Scheduled
Existing Indebtedness”) in existence on, and which is to continue in effect
after, the Effective Date (excluding Intercompany Debt) and which is listed on
Annex VI hereto, without giving effect to any subsequent extension, renewal or
refinancing thereof, except as permitted pursuant to Section 7.04(l);

 

(h)           Indebtedness of the Borrower or any
of its Subsidiaries which may be deemed to exist in connection with agreements
providing for indemnification, purchase price adjustments and similar
obligations in connection with Permitted Acquisitions or sales of assets
permitted by this Agreement (so long as any such obligations are those of the
Person making the respective acquisition or sale, and are not guaranteed by any
other Person);

 

(i)            Permitted Acquired Debt;

 

(j)            unsecured subordinated Indebtedness
of the Borrower, and subordinated guarantees thereof by the Subsidiary
Guarantors (so long as same remain Subsidiary Guarantors), under the Permitted
Senior Subordinated Notes and the other Permitted Senior Subordinated Notes
Documents, so long as (i) all such Indebtedness is incurred in accordance with
the requirements of the definition of Permitted Senior Subordinated Notes, (ii)
no Default or Event of Default then exists or would result therefrom, (iii)
100% of the Net Cash Proceeds therefrom are (x) applied as a mandatory
repayment and/or commitment reduction in accordance with the requirements of
Section 3.02(A)(c), 2.03(d) or 2.03(f), as the case may be, (y) used to effect
a Permitted Acquisition in accordance with the requirements of Section 6.10
and/or (z) concurrently used by the Borrower (I) to make a voluntary prepayment
of RF Loans pursuant to, and in accordance with the requirements of, Section
3.01 and/or (II) to redeem and/or refinance Permitted Senior Unsecured Notes
and/or Permitted Junior Capital, in each case in an aggregate principal amount
or with an aggregate liquidation preference, as applicable, equal to the
aggregate principal amount or liquidation preference, as applicable, of RF
Loans, Permitted Senior Unsecured Notes and/or Permitted Junior Capital, as the
case may be, actually incurred or issued by the Borrower to finance a Permitted
Acquisition or Permitted Acquisitions (and pay related accrued interest and
dividends thereon, if any) in the 364-day period prior to such issuance of
Permitted Senior Subordinated Notes, (iv) calculations are made by the Borrower
demonstrating compliance, on a Pro Forma Basis, with the covenants
contained in Sections 7.11 and 7.12 for the Calculation Period most recently
ended prior to the date of the respective issuance of Permitted Senior

 

59

 

Subordinated Notes, and (v) the Borrower
shall have furnished to the Administrative Agent a certificate from an
Authorized Officer certifying as to compliance with the requirements of
preceding clauses (i), (ii), (iii) and (iv) and containing the calculations
required by preceding clause (iv);

 

(k)           Permitted MJD Capital Debt;

 

(l)            Permitted Refinancing Indebtedness,
so long as no Default or Event of Default is in existence at the time of the
incurrence thereof and immediately after giving effect thereto;

 

(m)          Indebtedness of the Borrower
consisting of Permitted Letters of Credit and reimbursement obligations with
respect thereto, so long as the aggregate outstanding stated amounts of all
such letters of credit and reimbursement obligations do not exceed $7,500,000
at any time;

 

(n)           unsecured Indebtedness of the
Borrower incurred under the Permitted Senior Unsecured Notes and the other
Permitted Senior Unsecured Notes Documents, and of the Subsidiary Guarantors
under guarantees of the obligations of the Borrower under the Permitted Senior
Unsecured Notes Documents, so long as (i) all such Indebtedness is incurred in
accordance with the requirements of the definition of Permitted Senior
Unsecured Notes, (ii) no Default or Event of Default then exists or would
result therefrom, (iii) 100% of the Net Cash Proceeds therefrom (except to the
extent of any portion thereof applied to make a concurrent prepayment of B Term
Loans pursuant to, and in accordance with the requirements of, Section 3.01)
are (x) applied as a mandatory repayment and/or commitment reduction in
accordance with the requirements of Section 3.02(A)(c), 2.03(d) or 2.03(f), as
the case may be, (y) used to effect a Permitted Acquisition in accordance with
the requirements of Section 6.10 and/or (z) concurrently used by the Borrower
(I) to make a voluntary prepayment of RF Loans pursuant to, and in accordance
with the requirements of, Section 3.01 and/or (II) to redeem and/or refinance
Permitted Senior Unsecured Notes and/or Permitted Junior Capital, in each case
in an aggregate principal amount or with an aggregate liquidation preference,
as applicable, equal to the aggregate principal amount or liquidation
preference, as applicable, of RF Loans, Permitted Senior Unsecured Notes and/or
Permitted Junior Capital, as the case may be, actually incurred or issued by
the Borrower to finance a Permitted Acquisition or Permitted Acquisitions (and
pay related accrued interest and dividends thereon, if any) in the 364-day
period prior to such issuance of Permitted Senior Unsecured Notes, (iv)
calculations are made by the Borrower demonstrating compliance, on a Pro
Forma Basis, with the covenants contained in Sections 7.11 and 7.12 for the
Calculation Period most recently ended prior to the date of the respective
issuance of Permitted Senior Unsecured Notes, and (v) the Borrower shall have
furnished to the Administrative Agent a certificate from an Authorized Officer
certifying as to compliance with the requirements of preceding clauses (i),
(ii), (iii) and (iv) and containing the calculations required by preceding
clause (iv);

 

(o)           Additional Permitted Subordinated
Debt, so long as (i) no Default or Event of Default then exists or would result
from the incurrence or issuance thereof, (ii)

 

60

 

100% of the Net Cash Proceeds therefrom are
(x) applied as a mandatory repayment and/or commitment reduction in accordance
with the requirements of Section 3.02(A)(c), 2.03(d) or 2.03(f), as the case
may be, (y) used to effect a Permitted Acquisition in accordance with the
requirements of Section 6.10 and/or (z) concurrently used by the Borrower (I)
to make a voluntary prepayment of RF Loans pursuant to, and in accordance with
the requirements of, Section 3.01 and/or (II) to redeem and/or refinance
Permitted Senior Unsecured Notes and/or Permitted Junior Capital, in each case
in an aggregate principal amount or with an aggregate liquidation preference,
as applicable, equal to the aggregate principal amount or liquidation
preference, as applicable, of RF Loans, Permitted Senior Unsecured Notes and/or
Permitted Junior Capital, as the case may be, actually incurred or issued by
the Borrower to finance a Permitted Acquisition or Permitted Acquisitions (and
pay related accrued interest and dividends thereon, if any) in the 364-day
period prior to such issuance of Additional Permitted Subordinated Debt, (iii)
calculations are made by the Borrower demonstrating compliance, on a Pro
Forma Basis, with the covenants contained in Sections 7.11 and 7.12 for
the Calculation Period most recently ended prior to the date of such incurrence
or issuance of Additional Permitted Subordinated Debt, and (iv) the Borrower
shall have furnished to the Administrative Agent a certificate from an
Authorized Officer certifying as to compliance with the requirements of
preceding clauses (i), (ii) and (iii) and containing the calculations required
by preceding clause (iii); provided  however, that Additional
Permitted Subordinated Debt issued as in kind regularly scheduled interest
payments on theretofore outstanding Additional Permitted Subordinated Debt
shall not be subject to the requirements specified in preceding clauses (i)
through (iv); and

 

(p)           additional unsecured Indebtedness of
the Borrower and the Subsidiary Guarantors not to exceed an aggregate
outstanding principal amount of $10.0 million at any time.

 

7.05  Capital Expenditures.  (a)  The Borrower will not, and will
not permit any of its Subsidiaries to, incur Consolidated Capital Expenditures,
provided that the Borrower and its Subsidiaries may make Consolidated
Capital Expenditures not to exceed in the aggregate in any fiscal year of the
Borrower an amount equal to 37.5% of Adjusted Consolidated EBITDA for such
fiscal year.

 

(b)           In the event that the maximum amount
which is permitted to be expended in respect of Consolidated Capital
Expenditures during any fiscal year of the Borrower pursuant to Section 7.05(a)
is not fully expended during such fiscal year, the maximum amount which may be
expended during the immediately succeeding fiscal year of the Borrower pursuant
to Section 7.05(a) shall be increased by such unutilized amount.

 

7.06  Advances, Investments and Loans.  The
Borrower will not, and will not permit any of its Subsidiaries to, lend money
or credit or make advances to any Person (other than Excluded Intercompany Payables),
or purchase or acquire any stock, obligations or securities of, or any other
interest in, or make any capital contribution to any Person, or purchase or own
a futures contract or otherwise become liable for the purchase or sale of
currency or other commodities at a future date in the nature of a futures
contract (each of the foregoing an “Investment” and, collectively, “Investments”),
except:

 

61

 

(a)           the Borrower or any Subsidiary may
invest in cash and Cash Equivalents;

 

(b)           the Borrower and any Subsidiary may
acquire and hold receivables owing to them, if created or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms and/or reasonable extensions thereof;

 

(c)           the Borrower and its Qualified
Subsidiaries may make intercompany loans and advances between and among one
another (collectively, “Intercompany Loans”), provided that (i)
each such Intercompany Loan shall be evidenced by an Intercompany Note which,
if held by a Pledge Party, shall be pledged to the Collateral Agent as, and to
the extent required by, the Pledge Agreement, (ii) each Intercompany Loan made
pursuant to this clause (c) shall be subject to subordination as, and to the
extent required by, the Intercompany Subordination Agreement (giving effect to
exceptions required by applicable law or regulation as contemplated thereby)
and (iii) any Intercompany Loan made pursuant to this clause (c) shall cease to
be permitted hereunder if the obligor or obligee thereunder ceases to be the
Borrower or a Qualified Subsidiary as contemplated above;

 

(d)           loans and advances to officers,
directors and employees in the ordinary course of business (x) for relocation
purposes and/or the purchase from the Borrower of the capital stock (or options
or warrants relating thereto) of the Borrower and (y) otherwise in an
aggregate principal amount not to exceed $1.0 million at any time outstanding
shall be permitted;

 

(e)           the Borrower and each Subsidiary may
acquire and own investments (including debt obligations) received in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;

 

(f)            Interest Rate Agreements entered in
compliance with Section 7.04(d) shall be permitted;

 

(g)           Investments in existence on the
Effective Date and listed on Annex VII (excluding Intercompany Debt), without
giving effect to any additions thereto or replacements thereof, shall be
permitted;

 

(h)           the Borrower and each Qualified
Subsidiary may make capital contributions (including by way of the
capitalization of an Intercompany Loan) (i) to any of their respective
Subsidiaries, to the extent a Subsidiary Guarantor and (ii) to any Qualified
Subsidiary that is not a Subsidiary Guarantor, so long as, in the case of this
subclause (ii), (x) no Default or Event of Default has occurred and is
continuing at the time of the respective contribution and (y) in the case of
any contribution to a Qualified Subsidiary of the type referred to in clause
(iii) of the definition thereof, the Pro  Forma EBITDA Test is
satisfied;

 

62

 

(i)            the Borrower and its Subsidiaries
may (x) establish and/or create Subsidiaries in accordance with the provisions
of Section 7.07 and (y) make Investments therein as otherwise provided in this
Section 7.06;

 

(j)            Permitted Acquisitions may be
consummated in accordance with the requirements of Section 6.10;

 

(k)           the Borrower and its Subsidiaries may
acquire and hold investments consisting of non-cash consideration received from
sales of assets effected in accordance with the requirements of Section
7.02(f);

 

(l)            so long as no Default or Event of
Default exists or would exist immediately after giving effect to the respective
Investment, the Borrower and its Qualified Subsidiaries shall be permitted to
make Investments in (x) any Restricted Investment Entity on any date in an
amount (in the case of a non-cash Investment, taking the fair market value of
the asset so invested (as determined in good faith by senior management of the
Borrower)) not to exceed the Available Basket Amount on such date (after giving
effect to all prior and contemporaneous adjustments thereto, except as a result
of such Investment) and (y) any Unrestricted Subsidiary on any date in an
amount (in the case of a non-cash Investment, taking the fair market value of
the asset so invested (as determined in good faith by senior management of the
Borrower)) not to exceed the Available Basket Sub-Limit on such date (after
giving effect to all prior and contemporaneous adjustments thereto, except as a
result of such Investment), provided that in no event shall the
aggregate amount of Investments made in Restricted Investment Entities and
Unrestricted Subsidiaries in reliance on this Section 7.06(l) the equity
interests of which are not pledged pursuant to the Pledge Agreement (for such
purpose, determined without giving effect to any write-downs or write-offs
thereof and, in the case of a non-cash Investment, taking the fair market value
of the asset so invested (as determined in good faith by senior management of
the Borrower)) exceed $45,000,000.

 

(m)          the Borrower and its Subsidiaries may
from time to time make additional Investments in an amount (in the case of a
non-cash Investment, taking the fair market value of the asset so invested (as
determined in good faith by the Board of Directors of the Borrower)) not to
exceed the amount of Cumulative Distributable Cash at such time (determined as
of the date of the making of such Investment, after giving effect to all prior
and contemporaneous adjustments thereto, except as a result of such
Investment), so long as (i) no Default or Event of Default is then in existence
or would exist immediately after giving effect thereto, (ii) no Dividend
Suspension Period is then in effect, (iii) the Minimum Liquidity Condition is
satisfied at such time (before and after giving effect to the respective
Investment) and (iv) the Borrower shall have delivered an officer’s certificate
on the date of the proposed Investment certifying that the Cumulative
Distributable Cash on such date (after giving effect to all prior and
contemporaneous adjustments thereto, except as a result of such Investment)
exceeds the aggregate amount of the proposed Investment; and

 

(n)           so long as no Default or Event of
Default then exists or would exist immediately after giving effect to the
respective Investment, the Borrower and its

 

63

 

Subsidiaries may make Investments not otherwise permitted by clauses
(a) through (m) of this Section 7.06 in an aggregate amount not to exceed
$15,000,000 (determined without regard to any write-downs or write-offs
thereof), net of cash payments of principal in the case of loans and cash
equity returns (whether as a distribution, dividend or redemption) or a return
in the form of an asset distribution (based on the fair market value of the
distributed asset as determined in good faith by senior management of the
Borrower) in the case of equity investments.

 

7.07  Limitation
on Creation of Subsidiaries.  (a)  Except as otherwise specifically provided in
immediately succeeding clause (b), the Borrower will not, and will not permit
any Subsidiary to, establish, create or acquire any Subsidiary; provided
that the Borrower and its Subsidiaries shall be permitted to establish, create
or acquire Wholly-Owned Subsidiaries (or 90%-Owned Subsidiaries in the case of
Telcos or Carrier Services Companies), so long as (i) 100% of the capital stock
or other equity interests of such new Subsidiary (if a Parent Company) or at
least 90% of the capital stock or other equity interests of such new Subsidiary
(if a Telco or a Carrier Services Company) is pledged pursuant to the Pledge
Agreement (provided that the stock or other equity interests of any new
Telco or Carrier Services Company acquired or created pursuant to a Permitted
Acquisition shall not have to be pledged if, after giving effect to the
acquisition or creation thereof, the Pro  Forma EBITDA Test is
satisfied) and the certificates representing such stock or other equity
interests, together with transfer powers duly executed in blank, are delivered
to the Collateral Agent, (ii) such new Subsidiary executes a counterpart of the
Intercompany Subordination Agreement, the Subsidiary Guaranty (in the case of a
new 1st-Tier Subsidiary) and the Pledge Agreement (in the case of a
new Parent Company), in each case on the same basis (and to the same extent) as
such Subsidiary would have executed such Credit Documents if it were a Credit
Party on the Initial Borrowing Date, and (iii) such new Subsidiary takes all
action in connection therewith as would otherwise have been required to be
taken pursuant to Section 4 if such new Subsidiary had been a Credit Party on
the Initial Borrowing Date.

 

(b)           In
addition to Subsidiaries of the Borrower created pursuant to preceding clause
(a), the Borrower and its Subsidiaries may establish, acquire or create, and
make Investments in, Non-Wholly Owned Subsidiaries after the Initial Borrowing
Date as a result of Permitted Acquisitions (subject to the limitations
contained in the definition thereof) and Investments expressly permitted to be
made pursuant to Section 7.06, provided that (i) all of the capital
stock or other equity interests of each such Non-Wholly Owned Subsidiary shall
be pledged by any Pledge Party which owns same as, and to the extent, required
by the Pledge Agreement, (ii) such new Subsidiary executes a counterpart of the
Intercompany Subordination Agreement and (iii) in the case of (x) a proposed
Permitted Acquisition of an Acquired Person (other than a Telco or Carrier
Services Company) or non-equity assets to be effected by a Qualified Subsidiary
(directly or through a Subsidiary of such Qualified Subsidiary) in
circumstances where the capital stock or other equity interests of the Acquired
Person acquired pursuant to such Permitted Acquisition are not to be pledged
under the Pledge Agreement or the assets so acquired pursuant to such Permitted
Acquisition are not held by a Person which is (or will concurrently become) a
Pledged Subsidiary or (y) the creation or acquisition of a new Telco or Carrier
Services Company pursuant to a Permitted Acquisition in circumstances where the
capital stock or other equity interests of such Telco or Carrier Services
Company is (or are) not to be pledged under the Pledge Agreement, the Pro
Forma EBITDA Test is satisfied.

 

64

 

7.08  Modifications.  The
Borrower will not, and will not permit any of its Subsidiaries to:

 

(a)           amend or modify (or permit the
amendment or modification of) any provisions of any Permitted Acquired Debt,
any Scheduled Existing Indebtedness, any Existing 2008 Senior Subordinated
Notes Document, any Existing 2010 Senior Subordinated Notes Document, any
Existing 2010 Senior Notes Document and, on and after the execution, delivery
and/or incurrence thereof, any Permitted Senior Unsecured Notes Document, any
Permitted Senior Subordinated Notes Document and any agreements or instruments
relating to any other Permitted Junior Capital or any other Permitted
Refinancing Indebtedness, in any such case other than amendments or
modifications that are not in any way adverse to the interests of the Lenders; provided
that in no event shall any amendment to the foregoing (i) increase the
applicable interest rate, (ii) shorten the maturity date from that theretofore
in effect, (iii) modify or change any subordination provisions contained
therein or (iv) make any covenant more restrictive than previously existed
thereunder; and/or

 

(b)           amend, modify or change in any manner
adverse to the interests of the Lenders the organizational documents (including
by-laws) of any Pledge Party (including, without limitation, by the filing or
modification of any certificate or articles of designation, other than any
certificate of designation relating to Disqualified Preferred Stock or Qualified
Preferred Stock issued as permitted herein), any agreement entered into by the
Borrower with respect to its capital stock, or enter into any new agreement in
any manner adverse to the interests of the Lenders with respect to the capital
stock of the Borrower (in each case other than an agreement governing
Disqualified Preferred Stock or Qualified Preferred Stock issued as permitted
herein).

 

7.09  Restricted
Payments, Etc. 
(a)  The Borrower will not, and
will not permit any of its Subsidiaries to, make any Restricted Payment, except
that:

 

(i)            (x) any Subsidiary of the
Borrower may pay Dividends to the Borrower or any Wholly-Owned Subsidiary of
the Borrower (including by way of conversion of intercompany payables) and (y)
any Non-Wholly-Owned Subsidiary of the Borrower may pay cash Dividends to its
shareholders generally, so long as the Borrower or its respective Subsidiary
which owns the equity interest in the Subsidiary paying such Dividends receives
at least its proportionate share thereof (based upon its relative holding of
the equity interests in the Subsidiary paying such Dividends and taking into
account the relative preferences, if any, of the various classes of equity
interests of such Subsidiary);

 

(ii)           the Borrower may redeem or repurchase
shares of Borrower Common Stock (or options, warrants and/or appreciation
rights in respect thereof) from shareholders, officers, employees, consultants
and directors (or their estates) upon the death, permanent disability,
retirement or termination of employment of any such Person or otherwise in
accordance with any shareholder agreement, stock option plan or any employee
stock ownership plan, provided that (x) no Default or Event of Default
is then in existence or would arise therefrom and (y) the aggregate amount of
all cash paid in

 

65

 

respect of all such shares, options, warrants
and rights so redeemed or repurchased in any calendar year, does not exceed
$2,000,000;

 

(iii)          the Borrower may declare and pay
Dividends to the holders of Borrower Common Stock (including by way of the
repurchase of outstanding shares of Borrower Common Stock) in an amount not to
exceed the amount of Cumulative Distributable Cash at such time (determined as
of the date of the payment of such Dividends); provided that no such
Dividend shall be made (w) if a Default or Event of Default is then in
existence or would exist immediately after giving effect thereto, (x) if a
Dividend Suspension Period is then in effect, (y) if the Minimum Liquidity
Condition is not satisfied at such time (before and after giving effect to the
respective Dividend) and (z) the Borrower shall have delivered an officer’s
certificate on the date of the proposed Dividend certifying that the Cumulative
Distributable Cash on such date (after giving effect to all prior and
contemporaneous adjustments thereto, except as a result of such Dividend)
exceeds the aggregate amount of the proposed Dividend;

 

(iv)          subject to the subordination
provisions of the respective indenture governing the respective issuance of
Permitted Senior Subordinated Notes and so long as no Default or Event of
Default then exists or would result therefrom, the Borrower may pay regularly
scheduled interest on each issuance of Permitted Senior Subordinated Notes as
and when due in accordance with the terms of the Permitted Senior Subordinated
Notes Documents;

 

(v)           subject to the subordination
provisions of the respective agreements governing the respective issuance of
Additional Permitted Subordinated Debt and so long as no Default or Event of
Default then exists or would result therefrom, the Borrower may pay regularly
scheduled interest on each issuance of Additional Permitted Subordinated Debt
through the issuance of Additional Permitted Subordinated Debt (but not in
cash) as and when due in accordance with the terms of the instruments and
agreements governing the respective Additional Permitted Subordinated Debt;

 

(vi)          the Existing 2008 Senior Subordinated
Notes Redemption may be consummated as contemplated by Section 6.13(b);

 

(vii)         Existing 2010 Senior Notes and Existing
2010 Senior Subordinated Notes not repurchased in connection with the Tender
Offer and Consent Solicitation therefor may from time to time be redeemed in
accordance with the terms of the respective indenture therefor and/or
repurchased on the open-market, so long as (I) the aggregate amount of cash
expended by the Borrower to effect such repurchases or redemptions shall not
exceed the sum of (A) the principal amount of the Indebtedness so repurchased
or redeemed plus (B) the amount of accrued but unpaid interest on the
Indebtedness so repurchased or redeemed through the respective date of
repurchase or redemption plus (C) any required premium payable in
connection with such repurchase or redemption, (II) no Default or Event of
Default then exists or would result therefrom (or, in the case of any
redemption of Existing 2010 Senior Notes and/or Existing 2010 Senior
Subordinated Notes pursuant to the respective indenture therefor, no Default or
Event of Default under Section 8.01 or 8.05 then exists or would result
therefrom), (III) all such Existing 2010

 

66

 

Senior Notes and/or any Existing 2010 Senior
Subordinated Notes, as the case may be, so repurchased or redeemed are promptly
cancelled by the purchaser thereof and (IV) at the time of any delivery of an
irrevocable notice of redemption pursuant to the indenture governing the
Existing 2010 Senior Notes or the Existing 2010 Senior Subordinated Notes, no
Default or Event of Default then exists;

 

(viii)        Indebtedness may be refinanced with the
proceeds of Permitted Refinancing Indebtedness in accordance with the
requirements of the definition thereof, so long as no Default or Event of
Default is in existence at the time of the incurrence of such Permitted
Refinancing Indebtedness and immediately after giving effect thereto;

 

(ix)           the Permitted Senior Subordinated
Notes may be exchanged for Permitted Exchange Senior Subordinated Notes in
accordance with the requirements of the respective definitions thereof and the
relevant provisions of this Agreement;

 

(x)            the Permitted Senior Unsecured Notes
may be exchanged for Permitted Exchange Senior Unsecured Notes in accordance
with the requirements of the respective definitions thereof and the relevant
provisions of this Agreement;

 

(xi)           the Transaction shall be permitted to
be consummated in accordance with the relevant requirements of this Agreement;

 

(xii)          the Borrower and its Subsidiaries may
make payments with respect to Intercompany Debt, so long as the respective
payment is permitted to be made in accordance with the terms of the
Intercompany Subordination Agreement (giving effect to the exceptions required
by applicable regulatory law as contemplated thereby);

 

(xiii)         so long as no Default or Event of
Default exists or would result therefrom, the Borrower may pay regularly
accruing Dividends on its Disqualified Preferred Stock issued pursuant to
Section 7.13(d) in cash and/or through the issuance of additional shares of
Disqualified Preferred Stock in accordance with the terms of the documentation
governing the same;

 

(xiv)        the Borrower may pay regularly accruing
Dividends with respect to Qualified Preferred Stock through the issuance of
additional shares of Qualified Preferred Stock (but not in cash) in accordance
with the terms of the documentation governing the same;

 

(xv)         the Borrower may redeem shares of
Qualified Preferred Stock or Disqualified Preferred Stock or repurchase or
refinance any Permitted Senior Unsecured Notes, Permitted Senior Subordinated
Notes or Additional Permitted Subordinated Debt with the proceeds of any
issuance of Permitted Senior Unsecured Noted or Permitted Junior Capital not
required to be applied to repay B Term Loans as a result of the application of
clause (v) of the proviso in Section 3.02(A)(c);

 

(xvi)        so long as (x) no Default or Event of
Default then exists or would exist immediately after giving effect thereto and
(y) the Minimum Liquidity Condition is satisfied at such time, the Borrower
may, within 70 days following the last day of the first

 

67

 

fiscal quarter of the Borrower ended after
the Initial Borrowing Date, make a one-time payment of cash Dividends on then
outstanding shares of Borrower Common Stock of $0.22543 per share of Borrower
Common Stock (which based on the number of outstanding shares of Borrower
Common Stock as of the Initial Borrowing Date equates to approximately
$777,000);

 

(xvii)       the Borrower may redeem or repurchase
shares of Sunflower Telephone Company, Inc. held by third-party investors, so
long as (x) no Default or Event of Default then exists or would exist
immediately after giving effect thereto and (y) the aggregate amount of all
cash paid in respect of all redemptions and/or repurchases pursuant to this
clause (xvii) does not exceed $250,000; and

 

(xviii)      the Borrower may redeem or repurchase
warrants to purchase shares of STE held by third-party investors, so long as
(x) no Default or Event of Default then exists or would exist immediately after
giving effect thereto and (y) the aggregate amount of all cash paid in respect
of all such redemptions and/or repurchases pursuant to this clause (xviii) does
not exceed $250,000.

 

(b)           The Borrower will not, and will not
permit any of its Subsidiaries to, create or otherwise cause or suffer to exist
(other than as a result of a requirement of law) any encumbrance or restriction
which prohibits or otherwise restricts (A) the ability of any Subsidiary to (a)
pay dividends or make other distributions or pay any Indebtedness owed to the
Borrower or any Subsidiary, (b) make loans or advances to the Borrower or any
Subsidiary, (c) transfer any of its properties or assets to the Borrower or any
Subsidiary or (B) the ability of any Subsidiary to create, incur, assume or
suffer to exist any Lien upon its property or assets to secure the Obligations,
other than (for purposes of clauses (A) and (B)) prohibitions or restrictions
existing under or by reason of:  (i) this
Agreement and the other Credit Documents; (ii) applicable law; (iii) customary
non-assignment provisions entered into in the ordinary course of business and
consistent with past practices; (iv) any restriction or encumbrance with
respect to a Subsidiary imposed pursuant to an agreement which has been entered
into for the sale or disposition of all or substantially all of the capital
stock or assets of such Subsidiary, so long as such sale or disposition is
permitted under this Agreement; (v) Liens permitted under Sections 7.03(d), (m)
and/or (n) and any documents or instruments governing the terms of any
Indebtedness or other obligations secured by any such Liens, provided
that such prohibitions or restrictions apply only to the assets subject to such
Liens; (vi) any agreement or instrument governing Permitted Acquired Debt, to
the extent such restriction or encumbrance (x) is not applicable to any Person
or the properties or assets of any Person (other than the Person or the
properties or assets of the Person acquired pursuant to the respective
Permitted Acquisition) and (y) was not created (or made more restrictive) in
connection with or in anticipation of the respective Permitted Acquisition;
(vii) restrictions applicable to any Non-Wholly Owned Subsidiary existing at
the time of the acquisition thereof as a result of an Investment pursuant to
Section 7.06 or a Permitted Acquisition effected in accordance with Section
6.10; provided that the restrictions applicable to such joint venture
are not made more burdensome, from the perspective of the Borrower and its
Subsidiaries, than those as in effect immediately before giving effect to the
consummation of the respective Investment or Permitted Acquisition; (viii) on
and after the execution and delivery thereof, the Permitted Senior Unsecured
Notes Documents; (ix) on and after the execution and delivery thereof, the
Permitted Senior

 

68

 

Subordinated Notes Documents; and (x) on and
after the execution and delivery thereof, any agreements or instruments
relating to any Additional Permitted Subordinated Debt.

 

7.10  Transactions
with Affiliates.  The Borrower will not,
and will not permit any Subsidiary to, enter into any transaction or series of
transactions after the Effective Date whether or not in the ordinary course of
business, with any of its Affiliates or Unrestricted Subsidiaries other than on
terms and conditions substantially as favorable to the Borrower or such
Subsidiary as would be obtainable by the Borrower or such Subsidiary at the
time in a comparable arm’s-length transaction with a Person other than an
Affiliate, provided that the foregoing restrictions shall not apply to
(i) transactions solely among Pledge Parties and their 90%-Owned Subsidiaries,
(ii) employment arrangements entered into in the ordinary course of business
with officers of the Borrower and its Subsidiaries, (iii) customary fees paid
to members of the Board of Directors of the Borrower and of its Subsidiaries,
(iv) arrangements with directors, officers and employees not otherwise
prohibited by this Agreement, (v) payment of customary legal fees and expenses
to Paul, Hastings, Janofsky & Walker LLP, (vi) Restricted Payments made by
the Borrower to the extent permitted by Section 7.09(a), (vii) the Transaction
and (viii) the transactions set forth on Annex VIII hereto.

 

7.11  Interest
Coverage Ratio.  The Borrower will not
permit the Interest Coverage Ratio for any Test Period ending on the last day
of any fiscal quarter of the Borrower to be less than 3.00:1.00 (or, at any
time on and after the issuance of any Permitted Senior Subordinated Notes
pursuant to Section 7.04(j), 2.50:1.00).

 

7.12  Leverage Ratio.  The
Borrower will not permit the Leverage Ratio determined as at the end of any
fiscal quarter of the Borrower to exceed 5.25:1.00.

 

7.13  Limitation
On Issuance of Equity Interests.  (a)  The Borrower will not, and will not permit
any of its Subsidiaries to, issue (i) any Preferred Stock or any options,
warrants or rights to purchase Preferred Stock (other than Preferred Stock
issued in accordance with Section 7.13(c) or (d) below) or (ii) any
redeemable common equity interests unless, in either case, the issuance thereof
is, and all terms thereof are, satisfactory to the Required Lenders in their
sole discretion.

 

(b)           The Borrower will not permit any of its Subsidiaries,
directly or indirectly, to issue any shares of such Subsidiary’s capital stock,
securities or other equity interests (or warrants, rights or options to acquire
shares or other equity interests), except (i) for replacements of then
outstanding shares of capital stock or other equity interests, (ii) for stock
splits, stock dividends and similar issuances which do not decrease the
percentage ownership of the Borrower and its Subsidiaries taken as a whole in
any class of the capital stock or other equity interests of such Subsidiary,
(iii) Subsidiaries formed after the Effective Date pursuant to Section 7.07 may
issue capital stock or other equity interests in accordance with the
requirements of Section 7.07 and (iv) to qualify directors to the extent
required by applicable law.

 

(c)           The Borrower may issue Qualified Preferred Stock (x) in
payment of regularly accruing dividends on theretofore outstanding shares of
Qualified Preferred Stock as contemplated by Section 7.09(a)(xiv) and (y) with
respect to each other issue of Qualified

 

69

 

Preferred
Stock, so long as the Borrower receives reasonably equivalent consideration
therefor (as determined in good faith by the Borrower).

 

(d)           The Borrower may issue Disqualified Preferred Stock, so
long as (i) no Default or Event of Default then exists or would result from the
issuance thereof, (ii) 100% of the Net Cash Proceeds therefrom are (x) applied
as a mandatory repayment and/or commitment reduction in accordance with the
requirements of Section 3.02(A)(c), 2.03(d) or 2.03(f), as the case may be, (y)
used to effect a Permitted Acquisition in accordance with the requirements of
Section 6.10 and/or (z) concurrently used by the Borrower (I) to make a
voluntary prepayment of RF Loans pursuant to, and in accordance with the
requirements of, Section 3.01 and/or (II) to redeem and/or refinance Permitted
Senior Unsecured Notes and/or Permitted Junior Capital, in each case in an
aggregate principal amount or liquidation preference, as applicable, equal to
the aggregate principal amount or liquidation preference, as applicable, of RF
Loans, Permitted Senior Unsecured Notes and/or Permitted Junior Capital, as the
case may be, actually incurred or issued by the Borrower to finance a Permitted
Acquisition or Permitted Acquisitions (and pay related accrued interest and
dividends thereon, if any) in the 364-day period prior to such issuance of
Disqualified Preferred Stock, (iii) calculations are made by the Borrower
demonstrating compliance, on a Pro  Forma Basis, with the
covenants contained in Sections 7.11 and 7.12 for the Calculation Period most
recently ended prior to the date of such issuance of Disqualified Preferred
Stock and (iv) the Borrower shall have furnished to the Administrative Agent a
certificate from an Authorized Officer certifying as to compliance with the
requirements of preceding clauses (i), (ii) and (iii) and containing the
calculations required by preceding clause (iii).

 

7.14  Designated
Senior Debt.  The Borrower shall not
designate any Indebtedness (other than the Obligations) as “Designated Senior
Debt” or “Designated Guarantor Senior Debt” for purposes of any Existing 2008
Subordinated Notes Document, any Existing 2010 Subordinated Notes Document and,
on and after the execution, delivery and/or incurrence thereof, any Permitted
Senior Subordinated Notes Document and any agreements or instruments relating
to any Additional Permitted Subordinated Debt or any Permitted Refinancing
Indebtedness in respect thereof.

 

SECTION
8.  Events of Default.  Upon
the occurrence of any of the following specified events (each, an “Event of
Default”):

 

8.01  Payments.  The
Borrower shall (i) default in the payment when due of any principal of the
Loans or (ii) default, and such default shall continue for five or more
Business Days, in the payment when due of any interest on the Loans or any Fees
or any other amounts owing hereunder or under any other Credit Document; or

 

8.02  Representations, etc.  Any representation, warranty or statement
made by any Credit Party herein or in any other Credit Document or in any
statement or certificate delivered or required to be delivered pursuant hereto
or thereto shall prove to be untrue in any material respect on the date as of
which made or deemed made; or

 

8.03  Covenants.  Any
Credit Party shall (a) default in the due performance or observance by it of
any term, covenant or agreement contained in Section 6.05, 6.09, 6.10, 6.13,

 

70

 

6.14 or 7, or (b) default in
the due performance or observance by it of any term, covenant or agreement
(other than those referred to in Section 8.01, 8.02 or clause (a) of this
Section 8.03) contained in this Agreement and such default shall continue
unremedied for a period of at least 30 days after written notice to the
Borrower by the Administrative Agent or the Required Lenders; or

 

8.04  Default
Under Other Agreements.  (a)  The Borrower or any of its Subsidiaries shall
(i) default in any payment with respect to any Indebtedness (other than the
Obligations) beyond the period of grace, if any, applicable thereto or (ii)
default in the observance or performance of any agreement or condition relating
to any such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause, any such Indebtedness to
become due prior to its stated maturity; or (b) any such Indebtedness of the
Borrower or any of its Subsidiaries shall be declared to be due and payable (or
shall be required to be prepaid as a result of a default thereunder or of an
event of the type that constitutes an Event of Default) prior to the stated
maturity thereof, provided that it shall not constitute an Event of
Default pursuant to this Section 8.04 unless the aggregate principal amount of
all Indebtedness referred to in clauses (a) and (b) above (without duplication)
exceeds $7,500,000 in the aggregate at any one time; or

 

8.05  Bankruptcy, etc.  The Borrower or any Material Subsidiary shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled “Bankruptcy,” as now or hereafter in effect, or any successor
thereto (the “Bankruptcy Code”); or an involuntary case is commenced
against the Borrower or any of its Material Subsidiaries and the petition is
not controverted within 20 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
the Borrower or any of its Material Subsidiaries; or the Borrower or any of its
Material Subsidiaries commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to the Borrower or any of its Material Subsidiaries; or there
is commenced against the Borrower or any of its Material Subsidiaries any such
proceeding which remains undismissed for a period of 60 days; or the Borrower
or any of its Material Subsidiaries is adjudicated insolvent or bankrupt; or
any order of relief or other order approving any such case or proceeding is
entered; or the Borrower or any of its Material Subsidiaries suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or the
Borrower or any of its Material Subsidiaries makes a general assignment for the
benefit of creditors; or any Company action is taken by the Borrower or any of
its Material Subsidiaries for the purpose of effecting any of the foregoing; or

 

8.06  ERISA.  (a)  Any Plan or Multiemployer Plan shall fail to
satisfy the minimum funding standard required for any plan year or part thereof
under Section 412 of the Code or Section 302 of ERISA or a waiver of such
standard or extension of any amortization period is sought or granted under
Section 412 of the Code or Section 303 or 304 of ERISA, a Reportable Event
shall have occurred, a contributing sponsor (as defined in Section 4001(a)(13)

 

71

 

of ERISA) of a Plan subject to Title IV of
ERISA shall be subject to the advance reporting requirement of PBGC Regulation
Section 4043.61 (without regard to subparagraph (b)(1) thereof) and an event
described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation
Section 4043 shall be reasonably expected to occur with respect to such Plan
within the following 30 days, any Plan which is subject to Title IV of ERISA
shall have had or is likely to have a trustee appointed to administer such
Plan, any Plan or Multiemployer Plan which is subject to Title IV of ERISA is,
shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made with respect to a Plan or
Multiemployer Plan has not been timely made, the Borrower or any Subsidiary or
any ERISA Affiliate has incurred or is likely to incur any liability to or on
account of a Plan or Multiemployer Plan under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971
or 4975 of the Code or on account of a group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the
Code, or the Borrower or any Subsidiary has incurred or is likely to incur
liabilities pursuant to one or more employee welfare benefit plans (as defined
in Section 3(1) of ERISA) that provide benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or Plans; (b)
there shall result from any such event or events the imposition of a lien, the
granting of a security interest, or a liability or a material risk of incurring
a liability; and (c) such lien, security interest or liability, individually,
or in the aggregate, in the opinion of the Required Lenders, has had, or is
reasonably likely to have, a Material Adverse Effect; or

 

8.07  Pledge Agreement.  (a)  Except in each case to the extent resulting
from the negligent or willful failure of the Collateral Agent to continue to
hold certificated Collateral under the Pledge Agreement, the Pledge Agreement
shall cease to be, in any material respect, in full force and effect, or shall
cease, in any material respect, to give the Collateral Agent the Liens, powers
and privileges purported to be created thereby in favor of the Collateral
Agent, or (b) any Pledge Party shall default in the due performance or
observance of any material term, covenant or agreement on its part to be
performed or observed pursuant to the Pledge Agreement and such default shall
continue for 15 or more days after written notice to the respective Pledge
Party by the Administrative Agent; or

 

8.08  Subsidiary Guaranty.  The
Subsidiary Guaranty of any Subsidiary Guarantor or any material provision
thereof shall cease to be in full force and effect, or any Subsidiary Guarantor
or any Person acting by or on behalf of such Subsidiary Guarantor shall deny or
disaffirm such Subsidiary Guarantor’s obligations under the Subsidiary
Guaranty; or

 

8.09  Judgments.  One
or more judgments or decrees shall be entered against the Borrower or any of
its Subsidiaries involving a liability (to the extent not paid or covered by insurance)
in excess of $7,500,000 in the aggregate for all such judgments and decrees for
the Borrower and its Subsidiaries and all such judgments and decrees in excess
of such amount shall not have been vacated, discharged or stayed or bonded
pending appeal within 60 days from the entry thereof;

 

then, and in any such event, and at any time thereafter, if
any Event of Default shall then be continuing, the Administrative Agent shall,
upon the written request of the Required Lenders, by written notice to the
Borrower, take any or all of the following actions, without prejudice to the

 

72

 

rights of the Administrative Agent, any Letter of Credit
Issuer, the Swingline Lender or any Lender to enforce its claims against any
Credit Party, except as otherwise specifically provided for in this Agreement (provided
that, if an Event of Default specified in Section 8.05 shall occur with respect
to the Borrower, the result which would occur upon the giving of written notice
by the Administrative Agent as specified in clauses (i) and (ii) below shall
occur automatically without the giving of any such notice):  (i) declare the Total Commitment terminated,
whereupon the Commitment of each Lender shall forthwith terminate immediately
and any Fees shall forthwith become due and payable without any other notice of
any kind; (ii) declare the principal of and any accrued interest in respect of
all Loans and all Obligations owing hereunder (including Unpaid Drawings) to
be, whereupon the same shall become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; (iii) enforce, as Collateral Agent (or direct
the Collateral Agent to enforce), any and all of the Liens and rights created
pursuant the Pledge Agreement; (iv) terminate any Letter of Credit which may be
terminated in accordance with its terms; (v) direct the Borrower to pay (and
the Borrower hereby agrees upon receipt of such notice, or upon the occurrence
of any Event of Default specified in Section 8.05 in respect of the Borrower,
it will pay) to the Collateral Agent at the Payment Office such additional
amounts of cash and/or Cash Equivalents, to be held in a cash collateral
account as security for the Borrower’s reimbursement obligations in respect of
Letters of Credit then outstanding equal to the aggregate Stated Amount of all
Letters of Credit then outstanding (less any amount thereof as to which
Section 1A.01(c) Arrangements are in place); and (vi) apply any cash collateral
held by the Administrative Agent as provided in Section 3.02(A)(a) to the
repayment of the Obligations.

 

SECTION
9.  Definitions.  As
used herein, the following terms shall have the meanings herein specified
unless the context otherwise requires.  Defined terms in this
Agreement shall include in the singular number the plural and in the plural the
singular:

 

“Acquired Person”
shall have the meaning provided in the definition of “Permitted Acquisition.”

 

“Additional Permitted Subordinated Debt” shall mean any
pay-in-kind subordinated Indebtedness of the Borrower, so long as (i) such
Indebtedness has a final maturity no earlier than the date that falls one year
and one day after the date on which all Obligations are repaid in full and all
Commitments hereunder have terminated or expired, and no required amortizations
prior to such date, (ii) such Indebtedness does not provide for guarantors or
security, (iii) such Indebtedness provides for a complete suspension of
remedies prior to the earliest to occur of (x) the repayment in full in cash of
all Obligations then owing and related senior obligations, (y) the acceleration
of any Indebtedness incurred pursuant to this Agreement and the other Credit
Documents or of Indebtedness under any Permitted Senior Subordinated Notes
Document or any Permitted Senior Unsecured Notes Document and (z) the
occurrence of any event with respect to the Borrower described in Section 8.05)
and (iv) the terms and conditions of, and documentation governing, such
Indebtedness is otherwise reasonably satisfactory to the Agents.

 

“Additional Refinanced Indebtedness” shall have the meaning
provided in Section 4.01(l).

 

73

 

“Adjusted Consolidated
EBITDA” shall mean, for any period, Consolidated Net Income for such period
adjusted by (A) adding thereto (in each case (other than for purposes of
clauses (v) and (vi) below), to the extent deducted in determining Consolidated
Net Income for such period), without duplication, the sum of the amounts for
such period of (i) provisions for taxes based on income, (ii) Consolidated
Interest Expense, (iii) amortization and depreciation expense (including any
amortization or write-off related to the write-up of any assets as a result of
purchase accounting and the write-off of deferred financing costs), (iv) losses
on sales of assets (excluding sales in the ordinary course of business) and
other extraordinary losses, (v) non-core income relating to Non-Core Assets, to
the extent not included in any determination of Consolidated Net Income for
such period, (vi) dividends paid by CoBank to the Borrower on common stock of
CoBank held by the Borrower, to the extent not included in any determination of
Consolidated Net Income, (vii) the non-cash portion of any retirement or
pension plan expense incurred by the Borrower or any of its Subsidiaries,
(viii) all one-time costs and expenses paid during such period in respect of
the Transaction, (ix) one-time costs and expenses actually paid during such
period in respect of the Borrower’s proposed “IDS” transaction, so long as the
aggregate amount of costs and expenses added back pursuant to this clause (ix)
does not exceed $6.0 million and (x) any other non-cash charges (including
non-cash costs arising from implementation of SFAS 106 and SFAS 109) accrued by
the Borrower and its Subsidiaries during such period (except to the extent any
such charge will require a cash payment in a future period) and (B) subtracting
therefrom (to the extent included in arriving at Consolidated Net Income for
such period), without duplication, the sum of the amounts for such period of
(i) gains on sales of assets (excluding sales in the ordinary course of
business) and other extraordinary gains and (ii) all non-cash gains and
non-cash income, all as determined for the Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP. 
Notwithstanding the foregoing, for purposes of determining the Leverage
Ratio, Adjusted Consolidated EBITDA shall be determined on a Pro  Forma
Basis. For the avoidance of doubt, it is understood and agreed that, to the
extent any net income (or loss) of any Subsidiary is excluded from the
calculation of Consolidated Net Income in accordance with the definition
thereof contained herein, any add-backs to, or deductions from, Consolidated
Net Income in determining Adjusted Consolidated EBITDA as provided above shall
be calculated in a fashion consistent with the limitations and/or exclusions
provided in the definition of Consolidated Net Income contained herein.

 

“Adjusted Total Available
Revolving Commitment” shall mean, at any time, the Total Revolving
Commitment at such time less the aggregate Available Revolving
Commitments of all Defaulting Lenders at such time.

 

“Administrative Agent”
shall have the meaning provided in the first paragraph of this Agreement and
shall include any successor to the Administrative Agent appointed pursuant to
Section 10.10.

 

“Affected Loans” shall have the meaning provided in
Section 3.02(B).

 

“Affiliate” shall
mean, with respect to any Person, any other Person directly or indirectly
controlling (including but not limited to all directors and officers of such
Person), controlled by, or under direct or indirect common control with such
Person.  A Person shall be deemed to control another Person if such
Person possesses, directly or indirectly, the power (i) to vote 10% or more of
the securities having ordinary voting power for the election of directors (or

 

74

 

equivalent governing body)
of such Person or (ii) to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of voting
securities, by contract or otherwise.

 

“Agents” shall have
the meaning provided in the first paragraph of this Agreement.

 

“Agreement” shall
mean this Credit Agreement, as modified, amended, restated and/or supplemented.

 

“Anticipated Reinvestment
Amount” shall mean, with respect to any Reinvestment Election, the amount
specified in the Reinvestment Notice delivered by the Borrower in connection
therewith as the amount of the Net Cash Proceeds from the related Asset Sale
that the Borrower intends to use to finance one or more Permitted Acquisitions
within 270 days.

 

“Applicable Base Rate
Margin” shall mean (i) in the case of B Term Loans, 1.00%, (ii) in the case
of RF Loans, 1.00% and (iii) in the case of Swingline Loans, 1.00%.

 

“Applicable Eurodollar
Margin” shall mean (i) in the case of B Term Loans, 2.00%, and (ii) in the
case of RF Loans, 2.00%.

 

“Asset Sale” shall
mean and include (x) the sale, transfer or other disposition by the Borrower or
any Subsidiary to any Person (other than the Borrower or any Wholly-Owned
Domestic Subsidiary of the Borrower) of any asset of the Borrower or such
Subsidiary (other than sales, transfers or other dispositions in the ordinary
course of business of inventory and/or obsolete or excess equipment) and/or (y)
the receipt by the Borrower or any Subsidiary of any insurance, condemnation or
similar proceeds in connection with a casualty or taking of any of its assets
in excess of the costs incurred by the Borrower and its Subsidiaries in respect
of such event and of repairing or replacing the assets so damaged, destroyed or
taken but in all cases only to the extent that the aggregate Net Cash Proceeds
of all such sales, transfers, dispositions and receipts in any fiscal year of
the Borrower are in excess of $2,000,000; provided that so long as no
Default or Event of Default exists at the time of a proposed Excluded Asset
Sale, such Excluded Asset Sale shall not constitute an “Asset Sale”.

 

“Assignment Agreement”
shall mean the Assignment Agreement in the form of Exhibit I (appropriately
completed).

 

“Authorized Officer”
shall mean, with respect to (i) delivering Notices of Borrowing, Notices of
Conversion/Continuation, Letter of Credit Requests and similar notices, any
officer or officers of the Borrower that has or have been authorized by the
board of directors of the Borrower to deliver such notices pursuant to this
Agreement and that has or have appropriate signature cards on file with the
Administrative Agent; (ii) delivering financial information and officer’s
certificates pursuant to this Agreement, the chief executive officer, the
president, any vice president, the chief financial officer, any treasurer or
any controller of the Borrower; and (iii) any other matter in connection with
this Agreement or any other Credit Document, any officer (or a person or
persons so designated by any two officers) of the Borrower.

 

75

 

“Available Basket Amount”
shall mean, on any date of determination, an amount equal to the sum of (i)
$50,000,000 minus (ii) the aggregate amount of Investments made
(including for such purpose the fair market value of any assets contributed (at
the time contributed) to any Restricted Investment Entity or Unrestricted
Subsidiary (as determined in good faith by senior management of the Borrower),
net of Indebtedness outstanding at the time of determination assigned to, and
assumed by, the respective Restricted Investment Entity or Unrestricted
Subsidiary in connection therewith) pursuant to Section 7.06(1) after the
Effective Date (determined without giving effect to any write-downs or
write-offs thereof) minus (iii) the aggregate amount of then outstanding
Indebtedness or other obligations (whether absolute, accrued, contingent or
otherwise and whether or not due) of any Restricted Investment Entity or
Unrestricted Subsidiary for which the Borrower or any of its Subsidiaries
(other than the respective Restricted Investment Entity or Unrestricted
Subsidiary) is liable, minus (iv) all payments made by the Borrower or
any of its Subsidiaries (other than the respective Restricted Investment Entity
or Unrestricted Subsidiary) in respect of Indebtedness or other obligations of
the respective Restricted Investment Entity or Unrestricted Subsidiary
(including, without limitation, payments in respect of obligations described in
preceding clause (iii)) after the Effective Date, plus (v) the aggregate
amount of all cash returns received by the Borrower or any Qualified Subsidiary
from the respective Restricted Investment Entity or Unrestricted Subsidiary in
respect of Investments previously made pursuant to Section 7.06(l) (which cash
return may be made by way of repayment of principal in the case of loans and
cash equity returns (whether as a distribution, dividend or redemption) in the
case of equity investments) and all non-cash returns in the form of an asset
distribution from the respective Restricted Investment Entity or Unrestricted
Subsidiary of any asset previously contributed pursuant to Section 7.06(l)
(taking the fair market value of such distributed asset (as determined in good
faith by senior management of the Borrower)), in any such case as such
aggregate amount has been then last certified by an Authorized Officer by
delivery of an officers’ certificate to the Administrative Agent, provided
that the aggregate amount of increases to the “Available Basket Amount”
resulting from the application of this clause (v) shall not exceed the value of
the returned investments (in the case of a non-cash return on investment,
taking the fair market value of the distributed asset (as determined in good
faith by senior management of the Borrower)) and, in no event, shall the amount
of the increases made to “Available Basket Amount” in respect of any Investment
exceed the amount of the respective Investment previously made pursuant to
Section 7.06(l) (in the case of a non-cash Investment, taking the fair market
value of the Investment at the time of the initial investment (as determined in
good faith by senior management of the Borrower)).

 

“Available Basket
Sub-Limit” shall mean, on any date of determination, an amount equal to the
sum of (i) $35,000,000 minus (ii) the aggregate amount of Investments
made (including for such purpose the fair market value of any asset contributed
(at the time contributed) to any Unrestricted Subsidiary (as determined in good
faith by senior management of the Borrower), net of Indebtedness outstanding at
the time of determination assigned to, and assumed by, the respective
Unrestricted Subsidiary in connection therewith) in Unrestricted Subsidiaries
pursuant to Section 7.06(l) after the Effective Date (determined without giving
effect to any write-downs or write-offs thereof), minus (iii) the
aggregate amount of all then outstanding Indebtedness or other obligations
(whether absolute, accrued, contingent or otherwise and whether or not due) of
any Unrestricted Subsidiary for which the Borrower or any of its Subsidiaries
is liable, minus (iv) all payments made by the Borrower or any of its

 

76

 

Subsidiaries in respect of
Indebtedness or other obligations of the respective Unrestricted Subsidiary
(including, without limitation, payments in respect of obligations described in
preceding clause (iii)) after the Effective Date, plus (v) the aggregate
amount of all cash returns received by the Borrower or any Qualified Subsidiary
from the respective Unrestricted Subsidiary in respect of Investments
previously made pursuant to Section 7.06(l) (which cash return may be made by
way of repayment of principal in the case of loans and cash equity returns
(whether as a distribution, dividend or redemption) in the case of equity
investments) and all returns in the form of an asset distribution from the
respective Unrestricted Subsidiary of any asset previously contributed pursuant
to Section 7.06(l) (taking the fair market value of such distributed asset (as
determined in good faith by senior management of the Borrower), in any such
case as such aggregate amount has been then last certified by an Authorized
Officer by delivery of an officers’ certificate to the Administrative Agent, provided
that the aggregate amount of increases to the “Available Basket Sub-Limit”
resulting from the application of this clause (v) shall not exceed the value of
the returned investments (in the case of a non-cash return on investment,
taking the fair market value of the distributed asset (as determined in good
faith by senior management of the Borrower)) and, in no event, shall the amount
of the increases made to “Available Basket Sub-Limit” in respect of any Investment
in an Unrestricted Subsidiary exceed the amount of the respective Investment
previously made in such Unrestricted Subsidiary pursuant to Section 7.06(l) (in
the case of a non-cash Investment, taking the fair market value of the
Investment at the time of the initial investment (as determined in good faith
by senior management of the Borrower)); provided further that the
Available Basket Sub-Limit shall not exceed at any time the Available Basket
Amount as then in effect.

 

“Available Cash”
shall mean, for any Reference Period, for the Borrower and its Subsidiaries
determined on a consolidated basis for such Reference Period, an amount of cash
equal to the sum (which may be negative) of (without duplication) (I) Adjusted
Consolidated EBITDA for such Reference Period minus (II) the sum of (i)
Consolidated Interest Expense during such Reference Period, to the extent
included in determining such Adjusted Consolidated EBITDA, (ii) all scheduled,
mandatory and voluntary principal repayments in respect of Indebtedness of the
Borrower and its Subsidiaries made during such Reference Period (other than (x)
repayments made during such Reference Period with the proceeds of Indebtedness,
equity issuances, asset sales or insurance recovery events, (y) repayments of
RF Loans or Swingline Loans during such Reference Period, except to the extent
resulting in a corresponding reduction of the Total Revolving Commitment in an
amount equal to such repayment) and (z) prepayments of B Term Loans during such
Reference Period pursuant to Section 3.02(A)(e)), (iii) Consolidated Capital
Expenditures made in cash during such Reference Period (other than Consolidated
Capital Expenditures financed with the proceeds of Indebtedness (other than RF
Loans or Swingline Loans), equity issuances, assets sales and insurance
recovery events), (iv) Consolidated Tax Payments paid in cash during such
Reference Period, (v) cash consideration paid during such Reference Period for
acquisitions of equity interests and/or assets comprising a business or product
line (whether pursuant to a Permitted Acquisition or otherwise), except to the
extent financed with the proceeds of Indebtedness or issuances of equity, (vi)
Investments (other than Excluded Investments) made during such Reference
Period, (vii) the cash cost of any extraordinary losses and of any losses on
sales of assets (other than in the ordinary course of business) during such
Reference Period, in any such case to the extent included in determining
Adjusted Consolidated EBITDA for such Reference Period and (viii) cash payments
made during such Reference Period on account of non-cash losses or non-cash
charges accrued or

 

77

 

expensed during or prior to
such Reference Period, plus (III) the sum of (i) the cash amount of any
extraordinary gains, and the cash amount realized on gains on asset sales other
than in the ordinary course of business, during such Reference Period, in any
such case to the extent deducted in determining Adjusted Consolidated EBITDA
for such Reference Period, and (ii) cash received during such Reference Period
on account of non-cash gains or non-cash income excluded from Adjusted
Consolidated EBITDA during or prior to such Reference Period.

 

“Available Revolving
Commitment” of any RF Lender at any time shall mean its Percentage of the
Total Available Revolving Commitment at such time.

 

“B Term Loan” shall
mean, collectively, each Initial B Term Loan (including, after any DDTL
Conversion, each Delayed-Draw Term Loan converted into an Initial B Term Loan
pursuant to such DDTL Conversion as contemplated by Section 1.06(b)) and each
Incremental B Term Loan.

 

“B Term Note” shall
have the meaning provided in Section 1.05(a).

 

“Bankruptcy Code”
shall have the meaning provided in Section 8.05.

 

“BAS” shall mean Banc
of America Securities LLC in its individual capacity and any successor thereto
by merger, consolidation or otherwise.

 

“Base Rate” at any
time shall mean the higher of (i) the rate which is 1/2 of 1% in excess of the
Federal Funds Effective Rate and (ii) the Prime Lending Rate.

 

“Base Rate Loan”
shall mean each Loan bearing interest at the rates provided in Section 1.08(a).

 

“Blocked Revolving
Commitment” shall mean, at any time, $7.0 million (i.e., the amount
representing the remainder of (x) the aggregate amount of cash required to
finance the Existing 2008 Senior Subordinated Notes Redemption less the
aggregate amount of cash deposited in the Segregated Account on the Initial
Borrowing Date for purposes of financing the Existing 2008 Senior Subordinated
Notes Redemption); provided that the Blocked Revolving Commitment shall
be reduced to zero on the date of (and concurrently with) the consummation of
the Existing 2008 Senior Subordinated Notes Redemption.

 

“Borrower” shall have
the meaning provided in the first paragraph of this Agreement.

 

“Borrower Common Stock”
shall have the meaning provided in Section 5.20.

 

“Borrowing” shall
mean the incurrence of (i) Swingline Loans by the Borrower from the Swingline
Lender on a given date or (ii) Base Rate Loans or Eurodollar Loans pursuant to
a single Facility by the Borrower from the Lenders having Commitments (and/or
outstanding Loans) with respect to such Facility on a pro  rata
basis on a given date (or resulting from conversions on a given date), having
in the case of Eurodollar Loans the same Interest Period; provided that
(x) Base Rate Loans incurred pursuant to Section 1.10(b) shall be considered
part of any related Borrowing of Eurodollar Loans, (y) any Delayed-Draw Term
Loans converted into Initial

 

78

 

B Term Loans pursuant to a
DDTL Conversion shall be considered part of the related Borrowing of the then
outstanding Initial B Term Loans to which such newly-deemed Initial B Term
Loans are added as contemplated by Section 1.06(b) and (z) any Incremental B
Term Loans incurred pursuant to Section 1.01(f) shall be considered part of the
related Borrowing of the then outstanding Initial B Term Loans to which such
Incremental B Term Loans are added pursuant to Section 1.14; it being
understood and agreed, however, that for purposes of Section 1.08, (i) the
incurrence of Incremental B Term Loans on a given Incremental B Term Loan
Borrowing Date shall be deemed to be a “Borrowing” of such Loans and (ii) the
incurrence of Delayed-Draw Term Loans on a given date shall be deemed to be a “Borrowing”
of such Loans.

 

“Business” shall have
the meaning provided in Section 7.01.

 

“Business Day” shall
mean (i) for all purposes other than as covered by clause (ii) below, any day
excluding Saturday, Sunday and any day which shall be in the City of New York a
legal holiday or a day on which banking institutions are authorized by law or
other governmental actions to close and (ii) with respect to all notices and determinations
in connection with, and payments of principal and interest on, Eurodollar
Loans, any day which is a Business Day described in clause (i) and which is
also a day for trading by and between banks in Dollar deposits in the interbank
Eurodollar market.

 

“Calculation Period” shall mean, with respect to any Permitted
Acquisition, any Significant Asset Sale or any other event expressly required
to be calculated on a Pro  Forma Basis pursuant to the terms of
this Agreement, the Test Period most recently ended prior to the date of such
Permitted Acquisition, Significant Asset Sale or other event.

 

“Capital Lease” as
applied to any Person shall mean any lease of any property (whether real,
personal or mixed) by that Person as lessee which, in conformity with GAAP, is
accounted for as a capital lease on the balance sheet of that Person.

 

“Capitalized Lease
Obligations” shall mean all obligations under Capital Leases of the
Borrower or any of its Subsidiaries in each case taken at the amount thereof
accounted for as liabilities in accordance with GAAP.

 

“Carrier Services”
shall mean the resale of long distance services.

 

“Carrier Services Company”
shall mean any Subsidiary of the Borrower that is an operating company engaged
in the Carrier Services business.

 

“Cash Equivalents”
shall mean (a) marketable direct
obligations issued by, or unconditionally guaranteed by, the United States
government or issued by any agency thereof and backed by the full faith and
credit of the United States, in each case maturing within one year from the
date of acquisition; (b) Dollar
denominated certificates of deposit, time deposits, bankers acceptances,
eurodollar time deposits or overnight bank deposits having maturities of six
months or less from the date of acquisition issued by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof having combined capital and surplus of not less than
$350,000,000; (c) commercial paper of an
issuer rated at least A-2 by Standard & Poor’s Ratings Services, a division
of McGraw-Hill, Inc. (“S&P”) or P-2 by Moody’s Investors Service,
Inc. (“Moody’s”), or carrying an equivalent rating by a nationally

 

79

 

recognized rating agency, if
both of the two named rating agencies cease publishing ratings of commercial
paper issuers generally, and maturing within 270 days from the date of
acquisition; (d) repurchase obligations
of any Lender or of any commercial bank satisfying the requirements of clause
(b) of this definition, having a term of not more than 30 days with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities (including
tax-exempt debt obligations) with maturities of one year or less from the date
of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States, by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A2 by Moody’s (or publicly traded or open-ended
bond funds that invest exclusively in such securities); (f) securities with maturities of six months or
less from the date of acquisition backed by standby letters of credit issued by
any Lender or any commercial bank satisfying the requirements of clause (b) of
this definition; (g) Dollar denominated debt obligations of corporations
maturing within 12 months from the date of the acquisition rated at least A by
S&P or A2 by Moody’s; (h) shares of bond funds rated at least A by S&P
or A2 by Moody’s having weighted average maturities of 12 months or less; and (i)
shares of money market mutual or similar funds which invest exclusively in
assets satisfying the requirements of clauses (a) through (h) of this
definition.

 

“Cash Proceeds” shall
mean, with respect to any Asset Sale, the aggregate cash payments (including
any cash received by way of deferred payment pursuant to a note receivable
issued in connection with such Asset Sale, other than the portion of such
deferred payment constituting interest, but only as and when so received)
received by the Borrower and/or any Subsidiary from such Asset Sale.

 

“CERCLA” shall mean
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended, 42 U.S.C. § 9601 et  seq.

 

“Change of Control”
shall mean at any time and for any reason (a) any “person” or “group” (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one
or more Permitted Holders, is or becomes the “beneficial owner” (as defined in
Sections 13(d) and 14(d) of the Exchange Act) on a fully diluted basis of more
than 25% of the total voting interest in the capital stock of the Borrower or
(ii) during any period of two consecutive years individuals who at the
beginning of such period constituted the Board of Directors of the Borrower
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the stockholders of the Borrower was approved
by a vote of a majority of the directors of the Borrower then still in office
who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of the Borrower then in office
or (b) a “change of control” or similar event shall occur as provided in the
Existing 2008 Subordinated Notes Indenture, the Existing 2010 Subordinated
Notes Indenture, the Existing 2010 Senior Notes Indenture and, on and after the
execution, delivery and/or incurrence thereof, any Permitted Senior
Subordinated Notes Document, any Permitted Senior Unsecured Notes Document, any
agreements or instruments relating to any other Permitted Junior Capital or any
Permitted Refinancing Indebtedness in respect of the foregoing or any other
agreement governing or evidencing any other material Indebtedness of the
Borrower.

 

80

 

“CoBank” shall mean
CoBank, ACB and any successor thereto by merger, consolidation or otherwise.

 

“Co-Documentation Agent”
shall have the meaning provided in the first paragraph of this Agreement.

 

“Code” shall mean the
Internal Revenue Code of 1986, as amended from time to time, and the
regulations promulgated and rulings issued thereunder.  Section
references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.

 

“Collateral” shall
mean all of the “Collateral” as defined in the Pledge Agreement.

 

“Collateral Agent”
shall mean the Administrative Agent acting as collateral agent for the Lenders.

 

“Commitment” shall
mean, with respect to each Lender, such Lender’s Initial B Term Commitment,
Delayed-Draw B Term Commitment, Incremental B Term Commitment and/or Revolving
Commitment.

 

“Commitment Commission”
shall have the meaning provided in Section 2.01(b).

 

“Company” shall mean
any corporation, limited liability company, partnership or other business
entity (or the adjectival form thereof, where appropriate).

 

“Consolidated Capital
Expenditures” shall mean, for any period, the aggregate of all cash
expenditures (including in all events all amounts expended under Capital Leases
(other than Capital Leases evidencing Permitted MJD Capital Debt) but excluding
any amount representing capitalized interest) by the Borrower and its
Subsidiaries during that period that, in conformity with GAAP, are or are
required to be included in the property, plant or equipment reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries, provided
that Consolidated Capital Expenditures shall in any event (x) exclude the
purchase price paid in cash in connection with the acquisition of any Person
(including through the purchase of all of the capital stock or other ownership
interests of such Person or through merger or consolidation) pursuant to a
Permitted Acquisition, whether or not allocable to property, plant and
equipment and (y) exclude amounts expended with insurance proceeds.

 

“Consolidated Debt”
shall mean, as of any date of determination, without duplication, the sum of
(i) the aggregate stated balance sheet amount of all Indebtedness of the
Borrower and its Subsidiaries on a consolidated basis as determined in
accordance with GAAP plus (ii) any Indebtedness for borrowed money of
any other Person as to which the Borrower and/or any of its Subsidiaries has
created a guarantee or other Contingent Obligation (but only to the extent of
such guarantee or other Contingent Obligation) less (iii) the remainder
(if positive) of (A) the aggregate amount of Unrestricted cash and Cash
Equivalents held by the Borrower and its Subsidiaries on such date minus
(B) all overdue accounts payable of the Borrower and its Subsidiaries on such
date not paid in accordance with past practices as in effect on the Effective
Date; provided that, for purposes of this definition (and notwithstanding
any contrary treatment

 

81

 

by GAAP), any Disqualified
Preferred Stock that is issued and outstanding shall be treated as “Indebtedness”,
with an amount equal to the greater of the liquidation preference or the
maximum mandatory fixed repurchase price of any such Disqualified Preferred
Stock deemed to be a component of “Consolidated Debt”.

 

“Consolidated Interest
Expense” shall mean, for any period, the sum of (i) total interest expense
(including the portion that is attributable to Capital Leases in accordance
with GAAP) of the Borrower and its Subsidiaries on a consolidated basis with
respect to all outstanding Indebtedness of the Borrower and its Subsidiaries
(including, without limitation, all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers’ acceptance
financing and without duplication net costs and/or net benefits under Interest
Rate Agreements, but excluding, however, all non-cash interest expense to the
extent included in total interest expense and the amortization of deferred
financing costs) plus (ii) the product of (x) the amount of all cash
Dividend requirements (whether or not declared or paid) on Disqualified
Preferred Stock paid, accrued or scheduled to be paid or accrued during such
period multiplied by (y) a fraction, the numerator of which is one and
the denominator of which is one minus the then current effective consolidated
Federal, state, local and foreign tax rate of the Borrower as reflected in the
audited consolidated financial statements of the Borrower for its most recently
completed fiscal year, which amounts described in this clause (ii) shall be
treated as interest expense of the Borrower and its Subsidiaries for purposes
of this definition regardless of the treatment of such amounts under GAAP; provided
that, for purposes of any determination of Consolidated Interest Expense for
any Test Period ending on or prior to December 31, 2005 (other than for
purposes of the definition of “Available Cash”), Consolidated Interest Expense
for such Test Period shall be Consolidated Interest Expense for that portion of
such Test Period occurring on and after the Initial Borrowing Date multiplied
by a fraction the numerator of which is 365 and the denominator of which is the
number of days elapsed from the Initial Borrowing Date to the last day of such
Test Period (in each case taken as one accounting period).

 

“Consolidated Net Income”
shall mean, for any period, the net income (or loss) of the Borrower and its
Subsidiaries on a consolidated basis for such period (taken as a single
accounting period) determined in conformity with GAAP (after any deduction for
minority interests), provided that there shall be excluded from the
calculation thereof (without duplication) (i) the income (or loss) of any
Person (other than Subsidiaries of the Borrower) in which any other Person
(other than the Borrower or any of its Subsidiaries) has a joint interest,
except to the extent of the amount of dividends or other distributions actually
paid to the Borrower or any of its Subsidiaries by such Person during such
period, (ii) except for determinations expressly required to be made on a Pro
Forma Basis, the income (or loss) of any Person accrued prior to the
date it becomes a Subsidiary of the Borrower or is merged into or consolidated
with the Borrower or any of its Subsidiaries or that Person’s assets are
acquired by the Borrower or any of its Subsidiaries and (iii) the income of any
Subsidiary of the Borrower to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary.

 

“Consolidated Tangible
Assets” shall mean, at any time, the total consolidated assets of the
Borrower and its Subsidiaries as same would be shown on a consolidated balance

 

82

 

sheet of the Borrower
prepared in accordance with GAAP, provided that all intangible assets
(including goodwill) shall be excluded in making such determination.

 

“Consolidated Tax
Payments” shall mean, for any period, the sum of (a) the provision for
taxes based on income or profits which was deducted from gross income in the
computation of “Consolidated Net Income”, plus (b) without duplication,
the cash amount of any taxes actually paid in excess of the corresponding
provisions, minus (c) cash tax refunds actually received by the Borrower
and its Subsidiaries during such period.

 

“Contingent Obligations”
shall mean as to any Person any obligation of such Person guaranteeing or
intending to guarantee any Indebtedness, leases, dividends or other obligations
(“primary obligations”) of any other Person (the “primary obligor”)
in any manner, whether directly or indirectly, including, without limitation,
any obligation of such Person, whether or not contingent, (a) to purchase any
such primary obligation or any property constituting direct or indirect
security therefor, (b) to advance or supply funds (i) for the purchase or
payment of any such primary obligation or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (d) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof, provided, however,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of
business.  The amount of any Contingent Obligation shall be deemed to
be an amount equal to the stated maximum of the Contingent Obligation or, if none,
the stated or determinable amount of the primary obligation in respect of which
such Contingent Obligation is made or, if there is no stated or determinable
amount of the primary obligation, the maximum reasonably anticipated liability
in respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith.

 

“Credit Documents”
shall mean this Agreement, the Notes, the Intercompany Subordination Agreement,
the Pledge Agreement, the Subsidiary Guaranty and each Incremental B Term
Commitment Agreement.

 

“Credit Event” shall
mean the making of a Loan or the issuance of a Letter of Credit.

 

“Credit Party” shall
mean the Borrower and each Subsidiary of the Borrower party to a Credit
Document.

 

“Cumulative Distributable
Cash” shall mean, as at any date of determination, an amount equal to the
remainder of (i) Available Cash for the Reference Period most recently ended
prior to such date less (ii) the aggregate amount of Dividends paid by
the Borrower on the Borrower Common Stock during such Reference Period (other
than Dividends paid pursuant to Section 7.09(a)(xvi)) less (iii) the
aggregate amount of Investments made by the Borrower and its Subsidiaries
during such Reference Period in reliance on Section 7.06(m) (determined at the
time of the making of the Investment and without regard to any write-downs or
write-offs thereof and, in the case of any Investment in the form of a
contribution of a non-cash asset, taking the

 

83

 

fair market value of the
asset so contributed (as determined in good faith by the Board of Directors of
the Borrower) plus (iv) the aggregate amount of all cash returns on
Investments previously made pursuant to Section 7.06(m) (which cash return may
be made by way of repayment of principal in the case of loans and cash equity
returns (whether as a distribution, dividend or redemption) in the case of
equity investments) and all non-cash returns in the form of an asset
distribution on Investments previously made pursuant to Section 7.06(m) (taking
the fair market value of such distributed asset (as determined in good faith by
the Board of Directors of the Borrower)), in any such case as such aggregate
amount has been then last certified by an Authorized Officer by delivery of an
officers’ certificate to the Administrative Agent, provided that the
aggregate amount of increases to “Cumulative Distributable Cash” resulting from
the application of this clause (iv) shall not exceed the value of the returned
investments (in the case of a non-cash return on investment, taking the fair
market value of the distributed asset (as determined in good faith by the Board
of Directors of the Borrower)) and, in no event, shall the amount of the
increases made to “Cumulative Distributable Cash” in respect of any Investment
exceed the amount of the respective Investment previously made pursuant to
Section 7.06(m) at the time of the making thereof (in the case of a non-cash
Investment, taking the fair market value of the Investment (as determined in
good faith by the Board of Directors of the Borrower)).

 

“DBSI” shall mean
Deutsche Bank Securities, Inc. in its individual capacity and any successor
thereto by merger, consolidation or otherwise.

 

“DBTCA” shall mean
Deutsche Bank Trust Company Americas in its individual capacity, and any
successor thereto by merger, consolidation or otherwise.

 

“DDTF Commitment
Commission” shall have the meaning provided in Section 2.01(b).

 

“DDTL Conversion”
shall have the meaning provided in Section 1.06(b).

 

“DDTL Conversion Date”
shall have the meaning provided in Section 1.06(b).

 

“Default” shall mean
any event, act or condition which with notice or lapse of time, or both, would
constitute an Event of Default.

 

“Defaulting Lender”
shall mean any Lender with respect to which a Lender Default is in effect.

 

“Delayed-Draw B Term
Commitment” shall mean, with respect to each Delayed-Draw B Term Lender,
the amount set forth opposite such Lender’s name on Annex I hereto directly
below the column entitled “Delayed-Draw B Term Commitment”, as the same may be
(x) reduced or terminated pursuant to Sections 2.02, 2.03 and/or 8 or (y)
adjusted from time to time as a result of assignments to or from such Lender
pursuant to Sections 1.13 and/or 11.04(b).

 

“Delayed-Draw B Term
Commitment Termination Date” shall mean the earlier to occur of (x) the
date occurring one year after the Initial Borrowing Date and (y) the date on
which a Change of Control occurs.

 

84

 

“Delayed-Draw B Term
Facility” shall mean the Facility evidenced by the Total Delayed-Draw B
Term Commitment and/or Delayed-Draw B Term Loans.

 

“Delayed-Draw B Term
Lender” shall mean at any time each Lender with a Delayed-Draw B Term
Commitment and/or with outstanding Delayed-Draw B Term Loans.

 

“Delayed-Draw B Term Loan” shall have the
meaning provided in Section 1.01(b).

 

“Disqualified Preferred Stock” shall mean any Preferred Stock of
the Borrower (other than Qualified Preferred Stock), all terms and conditions
of which (including covenants, defaults, remedies, redemption provisions,
maturity, voting provisions, dividend rate and cash-pay limitations), and the
documentation therefor, are on market terms for a placement of preferred equity
securities and are otherwise reasonably satisfactory to the Agents; provided,
that in any event, unless the Required Lenders otherwise expressly consent in
writing prior to the issuance thereof, the terms of any such Preferred Stock
shall not contain any mandatory redemption, repayment, sinking fund or similar
provision prior to the date occurring one year following the Term Loan Maturity
Date (except upon the occurrence of a “change of control” or similar event
(including Asset Sales), in each case so long as the provisions relating to a “change
of control” or similar event included in the documentation and agreements
governing the Disqualified Preferred Stock provide that either (I) the consent
of the Required Lenders shall have been obtained or (II) the Obligations shall
have been paid in full in cash, in either case prior to the satisfaction of
such provisions).

 

“Dividend” shall mean, as to any Person, the declaration or
payment of any dividends (other than dividends payable solely in capital stock
or other equity interests of such Person) or return of any capital to, its
stockholders, members and/or other owners or the authorization or the making of
any other distribution, payment or delivery of property or cash to its
stockholders, members and/or other owners as such, or the redemption,
retirement, purchase or other acquisition, directly or indirectly, for a
consideration, of any shares of any class of its capital stock or other
ownership interests now or hereafter outstanding (or any warrants for or
options or stock appreciation rights in respect of any of such shares), or the
setting aside of any funds for any of the foregoing purposes, or the purchase
or other acquisition by any Subsidiary of such Person for consideration of any
shares of any class of the capital stock or other ownership interests of the
Borrower or any other Subsidiary, as the case may be, now or hereafter
outstanding (or any options or warrants or stock appreciation rights issued by
such Person with respect to its capital stock or other ownership interests).

 

“Dividend Suspension
Period” means any period (i) commencing on the date of delivery of a
Quarterly Compliance Certificate showing that the Leverage Ratio determined as
of the last day of the then most recently ended Test Period is greater than 5.00
to 1.00 (or, on the date upon which the Borrower shall have failed to deliver a
Quarterly Compliance Certificate within the time period required by Section
6.01(e)) and (ii) ending on the date of delivery of a Quarterly Compliance
Certificate showing that the Leverage Ratio determined as of the last day of
the then most recently Test Period is equal to or less than 5.00 to 1.00.

 

85

 

“Documents” shall
mean and include (i) the Credit Documents, (ii) the IPO Documents, (iii) the
Refinancing Documents, (iv) on and after the execution and delivery thereof,
the Permitted Senior Unsecured Notes Documents, (v) on and after the execution
and delivery thereof, the Permitted Senior Subordinated Notes Documents and (vi)
on and after the execution and delivery thereof, all documentation, agreements
and instruments governing or relating to any other Permitted Junior Capital; provided
that the term “Documents” shall not include the IPO Documents for purposes of
Sections 5.02 and 5.03.

 

“Dollars” and the
sign “$” shall each mean freely transferable lawful money of the United
States.

 

“Domestic Subsidiary” of any Person shall mean any Subsidiary of
such Person incorporated or organized in the U.S.

 

“Effective Date”
shall have the meaning provided in Section 11.10.

 

“Eligible Transferee”
shall mean and include a commercial bank, a financial institution, a fund that
regularly invests in bank loans or any other institutional “accredited investor”
as defined in SEC Regulation D.

 

“Environmental Claims”
means any and all administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or violation,
investigations (other than internal reports prepared by the Borrower or any of its
Subsidiaries solely in the ordinary course of such Person’s business and not in
response to any third party action or request of any kind) or proceedings
relating to any Environmental Law or any permit issued, or any approval given,
under any such Environmental Law (hereafter, “Claims”), including,
without limitation, (a) any and all Claims by governmental or regulatory
authorities for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law, and (b) any
and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting
from Hazardous Materials arising from alleged injury or threat of injury to
health, safety or the environment.

 

“Environmental Law”
means any applicable federal, state, foreign or local statute, law, rule,
regulation, ordinance, code and rule of common law now or hereafter in effect
and in each case as amended, and any binding judicial or administrative
interpretation thereof, including any binding judicial or administrative order,
consent decree or judgment, relating to the environment or Hazardous Materials,
including, without limitation, CERCLA; RCRA; the Federal Water Pollution
Control Act, as amended, 33 U.S.C. § 1251 et  seq.; the Toxic
Substances Control Act, 15 U.S.C. § 7401 et  seq.; the Clean
Air Act, 42 U.S.C. § 2601 et  seq.; the Safe Drinking Water
Act, 42 U.S.C. § 300F et  seq.; the Oil Pollution Act of
1990, 33 U.S.C. § 2701 et  seq.; and any applicable state and
local or foreign counterparts or equivalents.

 

“ERISA” shall mean
the Employee Retirement Income Security Act of 1974, as amended from time to
time, and the regulations promulgated and rulings issued
thereunder.  Section references to ERISA are to ERISA, as in effect
at the date of this Agreement

 

86

 

and any subsequent
provisions of ERISA, amendatory thereof, supplemental thereto or substituted
therefor.

 

“ERISA Affiliate”
shall mean each person (as defined in Section 3(9) of ERISA) which together
with the Borrower or a Subsidiary would be deemed to be a “single employer”
within the meaning of Section 414(b) or (c) of the Code and with respect to
Sections 412 and 4971 of the Code and Section 302 of ERISA, Section 414(b),
(c), (m) or (o) of the Code.

 

“Eurodollar Loans”
shall mean each Loan bearing interest at the rates provided in Section 1.08(b).

 

“Eurodollar Rate”
shall mean with respect to each Interest Period for a Eurodollar Loan, (i) the
offered quotation to first-class banks in the interbank Eurodollar market by
the Administrative Agent for dollar deposits of amounts in same day funds
comparable to the outstanding principal amount of the Eurodollar Loans for
which an interest rate is then being determined with maturities comparable to
the Interest Period to be applicable to such Eurodollar Loans, determined as of
10:00 A.M. (New York time) on the date which is two Business Days prior to the
commencement of such Interest Period divided (and rounded upward to the next
whole multiple of 1/16 of 1%) by (ii) a percentage equal to 100% minus the then
stated maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves) applicable to
any member bank of the Federal Reserve System in respect of Eurocurrency
liabilities as defined in Regulation D (or any successor category of
liabilities under Regulation D).

 

“Event of Default”
shall have the meaning provided in Section 8.

 

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

 

“Excluded Asset Sale” shall mean any sale or other disposition of
Non-Core Assets made after the Initial Borrowing Date and identified as an “Excluded
Asset Sale” by written notice to the Administrative Agent, so long as the Net
Cash Proceeds of such sale or disposition, when combined with the aggregate Net
Cash Proceeds of all other sales and dispositions identified as “Excluded Asset
Sales” after the Initial Borrowing Date, does not exceed $40,000,000.

 

“Excluded Intercompany Payables” shall mean (i) any intercompany
payable incurred in the ordinary course of business by the Borrower or any of
its Wholly-Owned Subsidiaries and owing to the Borrower or a Wholly-Owned
Subsidiary of the Borrower, as applicable, so long as such payable has not
remained outstanding for more than 90 days and (ii) any payable owing by a Subsidiary
of the Borrower to its parent company (if the Borrower or another Subsidiary of
the Borrower) arising in connection with the tax sharing arrangements entered
into among the Borrower and its Subsidiaries, so long as the amount of such
payable relates to the taxes attributable to the operations of such Subsidiary.

 

“Excluded Investments”
shall mean any Investment made pursuant to clause (a), (b), (c), (e), (f), (g),
(h), (i)(x), (j), (k) or (m) of Section 7.06.

 

87

 

“Existing Credit Agreement” shall mean the Credit
Agreement, dated as of March 30, 1998, and amended and restated as of March 6,
2003, among the Borrower, the lenders from time to time party thereto, Bank of
America, N.A., as syndication agent, Wachovia Bank, N.A., as documentation
agent, and Deutsche Bank Trust Company Americas, as administrative agent, as in
effect on the Initial Borrowing Date (immediately prior to giving effect
thereto).

 

“Existing Letter of
Credit” shall have the meaning provided in Section 1A.01(d).

 

“Existing Seller/Opco
Notes” shall mean notes
payable by Taconic Telephone Corp., Comerco, Inc., Maine Telephone Company and
the Borrower previously identified to the Administrative Agent in an aggregate
principal amount equal to approximately $21.0 million.

 

“Existing Tender Offer Notes” shall mean and include the Existing
2008 Senior Subordinated Notes, the Existing 2010 Senior Notes and the Existing
2010 Senior Subordinated Notes.

 

“Existing Tender Offer Notes Indenture Amendments” shall have the
meaning provided in Section 4.01(l).

 

“Existing Tender Offer Notes Indenture Supplements” shall mean
the Supplemental Indentures to the Existing Tender Offer Notes Indentures in
form and substance satisfactory to the Agents and entered into by the Borrower
and the respective trustees under the Existing Tender Offer Notes Indentures in
connection with the Tender Offers and Consent Solicitations to effect the
Existing Tender Offer Notes Indenture Amendments.

 

“Existing Tender Offer Notes Indentures” shall mean and include
the Existing 2008 Senior Subordinated Notes Indenture, the Existing 2010 Senior
Notes Indenture and the Existing 2010 Senior Subordinated Notes Indenture.

 

“Existing 2008 Senior
Subordinated Notes” shall mean, collectively, the Borrower’s 9-1⁄2% Senior
Subordinated Notes due 2008 and the Borrower’s Senior Subordinated Floating
Rate Notes due 2008, in each case issued pursuant to the Existing 2008 Senior
Subordinated Notes Indenture, as in effect on the Effective Date and as the
same may be amended, modified or supplemented from time to time in accordance
with the terms hereof and thereof.

 

“Existing 2008 Senior
Subordinated Notes Documents” shall mean the Existing 2008 Senior
Subordinated Notes, the Existing 2008 Senior Subordinated Notes Indenture and
all other documents executed and delivered with respect to the Existing 2008
Senior Subordinated Notes or Existing 2008 Senior Subordinated Notes Indenture,
as in effect on the Effective Date and as the same may be amended, modified or
supplemented from time to time in accordance with the terms hereof and thereof.

 

“Existing 2008 Senior
Subordinated Notes Indenture” shall mean the Indenture, dated as of May 5,
1998, among the Borrower, as issuer, certain of its Subsidiaries, as
guarantors, and the trustee therefor, as in effect on the Effective Date and as
the same may be amended, modified or supplemented from time to time in
accordance with the terms hereof and thereof.

 

88

 

“Existing 2008 Senior Subordinated Notes Redemption”
shall have the meaning provided in Section 6.13(b).

 

“Existing 2010 Senior Notes” shall mean the Borrower’s 11-7/8%
Senior Notes due 2010, issued pursuant to the Existing 2010 Senior Notes
Indenture, as in effect on the Effective Date and as the same may be amended,
modified or supplemented from time to time in accordance with the terms hereof
and thereof.

 

“Existing 2010 Senior Notes Documents” shall mean the Existing
2010 Senior Notes, the Existing 2010 Senior Notes Indenture and all other
documents executed and delivered with respect to the Existing 2010 Senior Notes
or Existing 2010 Senior Notes Indenture, as in effect on the Effective Date and
as the same may be amended, modified or supplemented from time to time in
accordance with the terms hereof and thereof.

 

“Existing 2010 Senior Notes Indenture” shall mean the
Indenture, dated as of March 6, 2003, among the Borrower, as issuer, certain of
its Subsidiaries, as guarantors, and the trustee therefor, as in effect on the
Effective Date and as thereafter amended, modified or supplemented from time to
time in accordance with the requirements hereof and thereof.

 

“Existing 2010 Senior Subordinated Notes” shall mean the
Borrower’s 12-1/2% Senior Subordinated Notes due 2010, issued pursuant to the
Existing 2010 Senior Subordinated Notes Indenture, as in effect on the
Effective Date and as the same may be amended, modified or supplemented from
time to time in accordance with the terms hereof and thereof.

 

“Existing 2010 Senior Subordinated Notes Documents” shall mean
the Existing 2010 Senior Subordinated Notes, the Existing 2010 Senior
Subordinated Notes Indenture and all other documents executed and delivered
with respect to the Existing 2010 Senior Subordinated Notes or Existing 2010
Senior Subordinated Notes Indenture, as in effect on the Effective Date and as
the same may be amended, modified or supplemented from time to time in
accordance with the terms hereof and thereof.

 

“Existing 2010 Senior
Subordinated Notes Indenture” shall mean the Indenture, dated as of May 24,
2000, among the Borrower, as issuer, certain of its Subsidiaries, as
guarantors, and the trustee therefor, as in effect on the Effective Date and as
thereafter amended, modified or supplemented from time to time in accordance
with the requirements hereof and thereof.

 

“Expiration Date”
shall mean April 8, 2005.

 

“Facility” shall mean
any of the credit facilities established under this Agreement, i.e., the
Initial B Term Facility, the Delayed-Draw B Term Facility, the Incremental B
Term Facility or the Revolving Facility; provided that (x) for purposes
of Sections 1.06(a), 1.09 (other than for purposes of the initial Interest
Period for Incremental B Term Loans), 1.13, 3.01, 3.02(B), 11.04(b) and
11.12(a) and (b) and the definitions of “Borrowing” and “Majority Lenders”, the
Initial B Term Facility and the Incremental B Term Facility shall be deemed to
be a single “Facility” and (ii) after the conversion of Delayed-Draw B Term
Loans into Initial B Term Loans pursuant to a DDTL Conversion, such newly
converted Loans shall be deemed to be a part of the Initial B Term Facility.

 

89

 

“Facing Fee” shall
have the meaning provided in Section 2.01(d).

 

“FairPoint Carrier
Services” shall mean FairPoint Carrier Services, Inc. (formerly known as
FairPoint Communications Solutions, Inc.), a Wholly-Owned Subsidiary of the
Borrower.

 

“FCC” shall mean the
Federal Communications Commission and any successor regulatory body.

 

“Federal Funds Effective
Rate” shall mean for any period, a fluctuating interest rate equal for each
day during such period to the weighted average of the rates on overnight
Federal Funds transactions with members of the Federal Reserve System arranged
by Federal Funds brokers, as published 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 Federal Funds brokers of
recognized standing selected by the Administrative Agent.

 

“Fees” shall mean all
amounts payable pursuant to, or referred to in, Section 2.01.

 

“1st-Tier Subsidiary” shall mean FairPoint Broadband,
Inc., MJD Ventures, Inc., MJD Services Corp., STE, FairPoint Carrier Services
and any other Subsidiary first acquired or created after the Initial Borrowing
Date that is a direct Subsidiary of the Borrower.

 

“Form S-1” shall mean
the Form S-1 registration statement of the Borrower filed with the SEC on February
3, 2005 (together with the Exhibits thereto), as in effect on the Effective
Date.

 

“GAAP” shall mean
generally accepted accounting principles in the United States of America as in
effect on the date of this Agreement; it being understood and agreed that
determinations in accordance with GAAP for purposes of Section 7, including
defined terms as used therein, are subject (to the extent provided therein) to
Section 11.07(a).

 

“GECC” shall mean
General Electric Capital Corporation and any successor thereto by merger,
consolidation or otherwise.

 

“Hazardous Materials”
shall mean (a) petroleum or petroleum products, radioactive materials, asbestos
in any form that is friable, urea formaldehyde foam insulation, and radon gas;
(b) any chemicals, materials or substance defined as or included in the
definition of “hazardous substances,” “hazardous waste,” “hazardous materials,”
“extremely hazardous substances,” restricted hazardous waste,” “toxic
substances,” “toxic pollutants,” “contaminants,” or “pollutants,” or words of
similar import, under any applicable Environmental Law; and (c) any other
chemical, material or substance, the release of which is prohibited, limited or
regulated by any governmental authority.

 

“Incremental B Term Commitment” shall mean, with
respect to each Incremental B Term Lender, the commitment of such Lender to
make Incremental B Term Loans pursuant to Section 1.01(f) on a given
Incremental B Term Loan Borrowing Date, as such commitment is set

 

90

 

forth in the
respective Incremental B Term Commitment Agreement delivered pursuant to
Section 1.14(b) and as same may be terminated pursuant to Sections 2.02, 2.03
and/or 8.

 

“Incremental B Term Commitment Agreement” shall
have the meaning provided in Section 1.14(b).

 

“Incremental B Term
Facility” shall mean the Facility evidenced by the Total Incremental B Term
Commitment.

 

“Incremental B Term
Lender” shall have the meaning provided in Section 1.14(b).

 

“Incremental B Term Loan” shall have the meaning
provided in Section 1.01(f).

 

“Incremental B Term Loan Borrowing Date” shall
mean each date on which the Borrower incurs Incremental B Term Loans pursuant
to Section 1.01(f), which date shall be the date of the effectiveness of the
Incremental B Term Commitment Agreement pursuant to which such Incremental B
Term Loans are to be made.

 

“Indebtedness” of any
Person shall mean, without duplication, (i) all indebtedness of such Person for
borrowed money, (ii) the deferred purchase price of assets or services which in
accordance with GAAP would be shown on the liability side of the balance sheet
of such Person, (iii) the face amount of all letters of credit issued for the
account of such Person and, without duplication, all drafts drawn thereunder,
(iv) all indebtedness of a second Person secured by any Lien on any property
owned by such first Person, whether or not such indebtedness has been assumed
(to the extent of the fair market value of such property), (v) all Capitalized
Lease Obligations of such Person, (vi) all obligations of such Person to pay a
specified purchase price for goods or services whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (vii) all net
obligations of such Person under Interest Rate Agreements and (viii) all
Contingent Obligations of such Person (other than Contingent Obligations
arising from the guaranty by such Person of the obligations of the Borrower
and/or its Subsidiaries to the extent such guaranteed obligations do not
constitute Indebtedness and are otherwise permitted hereunder), provided
that Indebtedness shall not include trade payables, accrued expenses and
receipt of progress and advance payments, in each case arising in the ordinary
course of business.

 

“Indemnified Person”
shall have the meaning provided in Section 11.01(a).

 

“Initial B Term
Commitment” shall mean, with respect to each Initial B Term Lender, the
amount set forth opposite such Lender’s name on Annex I hereto directly below
the column entitled “Initial B Term Commitment”, as the same may be (x) reduced
or terminated pursuant to Sections 2.02, 2.03, 3.02(A) and/or 8 or (y) adjusted
from time to time as a result of assignments to or from such Lender pursuant to
Sections 1.13 and/or 11.04(b).

 

“Initial B Term Facility”
shall mean the Facility evidenced by the Total Initial B Term Commitment and/or
Initial B Term Loans.

 

91

 

“Initial B Term Lender”
shall mean at any time each Lender with an Initial B Term Commitment and/or
with outstanding Initial B Term Loans.

 

“Initial B Term Loan” shall have the meaning
provided in Section 1.01(a); provided that after the conversion of
Delayed-Draw B Term Loans into Initial B Term Loans pursuant to a DDTL
Conversion as contemplated by Section 1.06(b), such converted Loans shall be
deemed to be Initial B Term Loans for all purposes of this Agreement and the
other Credit Documents (other than for purposes of Sections 1.01(a)(i) and
(iii) and Section 4.01(l) and 5.05(a) hereof).

 

“Initial Borrowing Date”
shall mean the date of the Refinancing and the incurrence of the Initial B Term
Loans hereunder.

 

“Intercompany Debt”
shall mean any Indebtedness, payables or other obligations (other than Excluded
Intercompany Payables), whether now existing or hereafter incurred, owed by the
Borrower or any Subsidiary of the Borrower to the Borrower or any other
Subsidiary of the Borrower.

 

“Intercompany Loans”
shall have the meaning provided in Section 7.06(c).

 

“Intercompany Note” shall mean a promissory note evidencing
Intercompany Loans (other than Excluded Intercompany Payables), in each case
duly executed and delivered substantially in the form of Exhibit K, with blanks
completed in conformity therewith (or such other form as may be approved by the
Administrative Agent or the Required Lenders).

 

“Intercompany
Subordination Agreement” shall have the meaning provided in Section
4.01(m).

 

“Interest Coverage Ratio”
for any period shall mean the ratio of (x) Adjusted Consolidated EBITDA for
such period to (y) Consolidated Interest Expense for such period.

 

“Interest Period”
with respect to any Loan shall mean the interest period applicable thereto, as
determined pursuant to Section 1.09.

 

“Interest Rate Agreement”
shall mean any interest rate swap agreement, any interest rate cap agreement,
any interest rate collar agreement or other similar agreement or arrangement
designed to protect the Borrower or any Subsidiary against fluctuations in
interest rates.

 

“Intermediary Holding
Company” shall mean each 1st-Tier Subsidiary and any other
Subsidiary first acquired or created after the Initial Borrowing Date that is
(i) not an operating company (but that owns directly or indirectly one or more
operating companies) and (ii) not subject to regulatory restrictions on
borrowings or issuances of guaranties of indebtedness for borrowed money.

 

“Investment” shall
have the meaning provided in the preamble to Section 7.06.

 

“IPO” shall have the
meaning provided in Section 4.01(k).

 

92

 

“IPO Documents” shall
mean the Form S-1, the Rule 424(b) Prospectus, the Underwriting Agreement,
dated as of February 8, 2005, between the Borrower, the underwriters named
therein and the selling shareholders named therein, and the “Declaration of
Effectiveness” from the SEC, in each case as in effect on the Initial Borrowing
Date and as the same may be amended, modified or supplemented from time to time
in accordance with the terms thereof.

 

 “Joint Book Running Managers” shall
mean DBSI, BAS, Morgan Stanley Senior Funding, Inc. and Goldman Sachs Credit
Partners L.P., each in its capacity as a “Joint Book Running Manager.”

 

“Joint Lead Arrangers”
shall mean DBSI and BAS, each in its capacity as “Joint Lead Arranger.”

 

“Kelso” shall mean
Kelso Investment Associates V, L.P., a Delaware limited partnership, Kelso
Equity Partners V, L.P., a Delaware limited partnership, and their respective
Affiliates.

 

“Lender” shall mean
each financial institution listed on Annex I, as well as any Person that
becomes a “Lender” hereunder pursuant to Section 1.13, 1.14 or 11.04(b).

 

“Lender Default”
shall mean (i) the wrongful refusal (which has not been retracted) or failure
of a Lender to make available its portion of any incurrence of Loans or a
reimbursement of an Unpaid Drawing or (ii) a Lender having notified the
Administrative Agent and/or the Borrower that it does not intend to comply with
the obligations under Section 1.01 or 1A.05, in circumstances where such
non-compliance will constitute a breach of such Lender’s obligations under the
respective Section.

 

“Lender Register”
shall have the meaning provided in Section 11.16.

 

“Letter of Credit”
shall have the meaning provided in Section 1A.01(a).

 

“Letter of Credit Fee”
shall have the meaning provided in Section 2.01(c).

 

“Letter of Credit Issuer”
shall mean (i) DBTCA, any affiliate of DBTCA and any RF Lender (or affiliate of
any RF Lender) which at the request of the Borrower and with the consent of the
Administrative Agent agrees, in such RF Lender’s (or RF Lender affiliate’s)
sole discretion, to become a Letter of Credit Issuer for the purpose of issuing
Letters of Credit pursuant to Section 1A, and (ii) with respect to the Existing
Letters of Credit, the Lender designated as the issuer thereof on Annex IX
shall be the Letter of Credit Issuer thereof.

 

“Letter of Credit
Outstandings” shall mean, at any time, the sum of, without duplication, (i)
the aggregate Stated Amount of all outstanding Letters of Credit and (ii) the
aggregate amount of all Unpaid Drawings in respect of all Letters of Credit.

 

“Letter of Credit Request”
shall have the meaning provided in Section 1A.03(a).

 

93

 

“Leverage Ratio”
shall mean, at any date of determination, the ratio of (x) Consolidated Debt on
such date to (y) Adjusted Consolidated EBITDA for the Test Period then or last
ended.  All calculations of the Leverage Ratio shall be made on a Pro
Forma Basis.

 

“Lien” shall mean any
mortgage, pledge, security interest, encumbrance, lien or charge of any kind
(including any agreement to give any of the foregoing, any conditional sale or
other title retention agreement or any lease in the nature thereof).

 

“Loan” shall have the
meaning provided in Section 1.01.

 

“Majority Lenders” of
any Facility shall mean those Non-Defaulting Lenders which would constitute the
Required Lenders under, and as defined in, this Agreement if all outstanding
Obligations of the other Facilities under this Agreement were repaid in full
and all Commitments with respect thereto were terminated.

 

“Management Affiliate”
shall mean Messrs. Duda, Leach, Johnson and Bergstein.

 

“Mandatory Borrowing”
shall have the meaning provided in Section 1.01(e).

 

“Margin Stock” shall
have the meaning provided in Regulation U.

 

“Material Adverse Effect”
shall mean a material adverse effect on (x) the business, property, assets,
liabilities or condition (financial or otherwise) of the Borrower and its
Subsidiaries taken as a whole after giving effect to the Transaction, (y) the
rights or remedies of the Agents or the Lenders under any Credit Document or
(z) the ability of the Pledge Parties taken as a whole to perform their
obligations under the Credit Documents.

 

“Material Subsidiary”
shall mean, at any time, any Subsidiary having gross assets at such time with a
value of at least 5% of consolidated gross assets of the Borrower and its
Subsidiaries at such time and/or gross revenues for the Test Period then last
ended of at least 5% of the consolidated gross revenues of the Borrower and its
Subsidiaries for such Test Period.

 

“Maturity Date” shall
mean (i) with respect to Term Loans, the Term Loan Maturity Date, (ii) with
respect to RF Loans, the RF Maturity Date and (iii) with respect to Swingline
Loans, the Swingline Expiry Date.

 

“Maximum Swingline Amount”
shall mean $5,000,000.

 

“Minimum Borrowing Amount”
shall mean (i) in the case of Term Loans, $1,000,000, (ii) in the case of RF
Loans (x) maintained as Base Rate Loans, $500,000 and (y) maintained as
Eurodollar Loans, $1,000,000 and (iii) in the case of Swingline Loans,
$100,000.

 

“Minimum Liquidity
Condition” shall mean, as of any date on which a Dividend is to be paid on
the Borrower Common Stock, the condition existing on such date if (but only if)
the sum of (i) Total Unutilized Revolving Commitment on such date (determined
on a pro  forma basis after giving effect to any incurrence of RF
Loans and Swingline Loans on such date to

 

94

 

make
such Dividend) plus (ii) the amount of Unrestricted cash and Cash
Equivalents of the Borrower and its Subsidiaries, is equal to or greater than
$10,000,000.

 

“Minimum Tender Offer
Condition” shall mean, with respect to any issue of Existing Tender Offer
Notes, that at least 75% (or, in the case of the 2008 Senior Subordinated Notes
only, that at least 51%) of the aggregate principal amount of such issue of
Existing Tender Offer Notes shall have been validly tendered, and not
withdrawn, pursuant to the Tender Offer and Consent Solicitation therefor.

 

“MJD Capital” shall
mean MJD Capital Corp., a South Dakota corporation.

 

“Moody’s” shall have
the meaning provided in the definition of “Cash Equivalents”.

 

“Multiemployer Plan”
shall mean any multiemployer plan as defined in section 4001(a)(3) of ERISA
which is contributed to by (or to which there is an obligation to contribute
of) the Borrower or any of its Subsidiaries or an ERISA Affiliate and each such
plan for the five year period immediately following the latest date on which
the Borrower, any such Subsidiary or ERISA Affiliate contributed to or had an
obligation to contribute to such plan.

 

“Net Cash Proceeds”
shall mean (i) with respect to any Asset Sale, the Cash Proceeds resulting
therefrom net (without duplication) of expenses of sale (including payment of
principal, premium and interest of Indebtedness secured by the assets the
subject of the Asset Sale and required to be, and which is, repaid under the
terms thereof as a result of such Asset Sale), and incremental taxes paid or
payable as a result thereof and (ii) with respect to any issuance of Preferred
Stock or Indebtedness, the cash proceeds received by the Borrower from such
issuance net (without duplication) of underwriting discounts and commissions,
private placement and/or initial purchaser fees and other reasonable fees and
expenses associated therewith.

 

“90%-Owned Subsidiary”
shall mean (i) any Subsidiary to the extent at least 90% of the capital stock
or other ownership interests in such Subsidiary is owned directly or indirectly
by the Borrower and (ii) STE, to the extent at least 87.5% of the capital stock
of STE is owned directly or indirectly by the Borrower.

 

“Non-Core Asset Sale”
shall mean an Asset Sale constituting a sale of Non-Core Assets.

 

“Non-Core Assets”
shall mean (i) assets of the Borrower and its Subsidiaries not used in their
core business of providing local exchange carrier voice telephony services (e.g.,
assets used in the operation of the cable television business, cellular
telephone business and radio stations) and (ii) the stock and/or other equity
interests in any Subsidiary not primarily engaged in the core business of
providing local exchange carrier services, in the case of either clause (i) or
(ii) to the extent such assets are certified as non-core assets by an
Authorized Officer in an officer’s certificate delivered to the Administrative
Agent.

 

“Non-Defaulting Lender”
shall mean a Lender that is not a Defaulting Lender.

 

95

 

“Non-Pledge Party
Subsidiary” shall mean each Subsidiary of the Borrower which is not a
Pledge Party.

 

“Non-Pledged Subsidiary”
shall mean any Subsidiary that is not a Pledged Subsidiary.

 

“Non-Wholly Owned Entity”
shall have the meaning provided in the definition of “Permitted Acquisition”.

 

“Non-Wholly Owned Subsidiary” shall mean, as to any Person, each
Subsidiary of such Person which is not a Wholly-Owned Subsidiary of such
Person.

 

“Note” shall mean and
include each B Term Note, each RF Note and the Swingline Note.

 

“Notice of Borrowing”
shall have the meaning provided in Section 1.03.

 

“Notice of
Conversion/Continuation” shall have the meaning provided in Section 1.06.

 

“Notice Office” shall
mean the office of the Administrative Agent at 60 Wall Street, New York, New
York 10005 or such other office as the Administrative Agent may designate to
the Borrower in writing from time to time.

 

“Obligations” shall
mean all amounts, direct or indirect, contingent or absolute, of every type or
description, and at any time existing, owing to any Agent, any Letter of Credit
Issuer, the Collateral Agent, the Swingline Lender or any Lender pursuant to
the terms of this Agreement or any other Credit Document.

 

“Optional Non-2008 Tender
Offer Notes Redemption” shall mean, collectively, any redemption of
Existing 2010 Senior Notes and/or Existing 2010 Senior Subordinated Notes
pursuant to, and in accordance with the terms of, the respective indenture
therefor, all as contemplated by Section 7.09(a)(vii).

 

“Optional Non-2008 Tender
Offer Notes Refinancing” shall mean, collectively, any repurchase and/or
redemption of Existing 2010 Senior Notes and/or Existing 2010 Senior
Subordinated Notes as contemplated by Section 7.09(a)(vii).

 

“Parent Company”
shall mean at any time each Intermediary Holding Company and each other
Subsidiary of the Borrower that, in either such case, owns, directly or
indirectly, the capital stock or other equity interests of any Subsidiary that
is a Telco or a Carrier Services Company.

 

“Participant” shall
have the meaning provided in Section 1A.05(a).

 

“Patriot Act” shall
mean the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October
26, 2001)).

 

96

 

“Payment Office”
shall mean the office of the Administrative Agent at 60 Wall Street, New York,
New York 10005 or such other office as the Administrative Agent may designate
to the Borrower and the Lenders in writing from time to time.

 

“PBGC” shall mean the
Pension Benefit Guaranty Corporation established pursuant to Section 4002 of
ERISA, or any successor thereto.

 

“Percentage” shall
mean at any time for each RF Lender, the percentage obtained by dividing such
Lender’s Revolving Commitment by the Total Revolving Commitment, provided
that if the Total Revolving Commitment has been terminated, the Percentage of
each RF Lender shall be determined by dividing such RF Lender’s Revolving
Commitment immediately prior to such termination by the Total Revolving
Commitment immediately prior to such termination.

 

“Permitted Acquired Debt”
shall mean Indebtedness of a Subsidiary acquired after the Effective Date
pursuant to a Permitted Acquisition, to the extent such Indebtedness was
outstanding prior to the consummation of the Permitted Acquisition and remains
outstanding as Indebtedness of the respective Subsidiary after giving effect
thereto, provided that (i) such Indebtedness was not incurred in
connection with or in anticipation of such Permitted Acquisition or the
respective Person becoming Subsidiary of the Borrower, (ii) such Indebtedness
does not constitute Indebtedness of the Borrower or any of its Subsidiaries
other than the respective Subsidiary acquired pursuant to the respective
Permitted Acquisition and shall not be secured by any assets of any Person
other than assets of the Subsidiary so acquired serving as security therefor at
the time of the respective Permitted Acquisition, (iii) no Person (other than
the respective Subsidiary or a direct parent or a Subsidiary of the respective
Subsidiary to the extent such parent or Subsidiary is acquired in connection
with such Permitted Acquisition) shall have any liability (contingent or
otherwise) with respect to any Permitted Acquired Debt and (iv) the aggregate
principal amount of all such Indebtedness shall not exceed at any time
outstanding more than 10% of the Senior Consolidated Debt at such time.

 

“Permitted Acquisition”
shall mean the acquisition by the Borrower or any of its Qualified Subsidiaries
of assets constituting a business, division or product line of any Person not
already a Subsidiary of the Borrower or any of its Qualified Subsidiaries or of
100% of the capital stock or other equity interests of any such Person, provided
that (A) the consideration paid by the Borrower or such Qualified Subsidiary
consists solely of cash (including proceeds of RF Loans), the issuance of
Borrower Common Stock, the issuance of Indebtedness otherwise permitted in
Section 7.04 and the assumption/acquisition of any Permitted Acquired Debt relating
to such business, division, product line or Person which is permitted to remain
outstanding in accordance with the requirements of Section 7.04, (B) those
acquisitions that are structured as equity acquisitions shall be effected
through a purchase of 100% of the capital stock or other equity interests of
such Person by the Borrower or such Qualified Subsidiary or through a merger
between such Person and Qualified Subsidiary of the Borrower, so that after
giving effect to such merger, the surviving entity of such merger constitutes
or continues to constitute a Qualified Subsidiary of the Borrower, (C) in the
case of the acquisition of 100% of the capital stock or other equity interests
of any Person, such Person (the “Acquired Person”) shall own no capital
stock or other equity interests of any other Person unless either (x) the
Acquired Person owns 100% of the capital stock or other equity interests of
such other Person or

 

97

 

(y)
if the Acquired Person owns capital stock or equity interests in any other
Person which is not a Wholly-Owned Subsidiary of the Acquired Person (a “Non-Wholly
Owned Entity” ), (1) the Acquired Person shall not have been created or
established in contemplation of, or for purposes of, the respective Permitted
Acquisition, (2) any Non-Wholly Owned Entity of the Acquired Person shall
have been non-wholly-owned prior to the date of the respective Permitted
Acquisition and not created or established in contemplation thereof and (3)
such Acquired Person and/or its Wholly-Owned Subsidiaries own at least 80% of
the consolidated assets of such Acquired Person and its Subsidiaries taken as a
whole, (D) substantially all of the business, division or product line acquired
pursuant to the respective Permitted Acquisition, or the business of the
Acquired Person and its Subsidiaries taken as a whole, is in the U.S., (E) the
assets acquired, or the business of the Acquired Person and its Subsidiaries,
shall be in the Business, and (F) all requirements of Section 7.02
applicable to Permitted Acquisitions are satisfied.  Notwithstanding
anything to the contrary contained in the immediately preceding sentence, an
acquisition which does not otherwise meet the requirements set forth above in the
definition of “Permitted Acquisition” shall constitute a Permitted Acquisition
if, and to the extent, the Required Lenders agree in writing that such
acquisition shall constitute a Permitted Acquisition for purposes of this
Agreement.

 

“Permitted Exchange
Senior Subordinated Notes” shall mean senior subordinated notes issued in
exchange for Permitted Senior Subordinated Notes pursuant to the relevant
Permitted Senior Subordinated Notes Indenture therefor, which Permitted
Exchange Senior Subordinated Notes are substantially identical securities to
the originally issued Permitted Senior Subordinated Notes and shall be issued
pursuant to a registered exchange offer or private exchange offer for such
Permitted Senior Subordinated Notes on market terms reasonably satisfactory to
the Administrative Agent; provided that in no event will the issuance of
any Permitted Exchange Senior Subordinated Notes increase the aggregate
principal amount of the Permitted Senior Subordinated Notes theretofore
outstanding and subject to such exchange or otherwise result in an increase in
the interest rate applicable to the Permitted Senior Subordinated Notes
theretofore outstanding and subject to such exchange.

 

“Permitted Exchange
Senior Unsecured Notes” shall mean senior unsecured notes issued in
exchange for Permitted Senior Unsecured Notes pursuant to the relevant
Permitted Senior Unsecured Notes Indenture therefor, which Permitted Exchange
Senior Unsecured Notes are substantially identical securities to the originally
issued Permitted Senior Unsecured Notes and shall be issued pursuant to a
registered exchange offer or private exchange offer for such Permitted Senior
Unsecured Notes on market terms satisfactory to the Administrative Agent; provided
that in no event will the issuance of any Permitted Exchange Senior Unsecured
Notes increase the aggregate principal amount of Permitted Senior Unsecured
Notes theretofore outstanding and subject to such exchange or otherwise result
in an increase in the interest rate applicable to the Permitted Senior
Unsecured Notes theretofore outstanding and subject to such exchange.

 

“Permitted Holders”
shall mean Kelso, THL and each Management Affiliate.

 

“Permitted Junior Capital”
shall mean and include (i) any Additional Permitted Subordinated Debt, (ii) any
Permitted Senior Subordinated Notes, (iii) any Qualified Preferred Stock and
(iv) any Disqualified Preferred Stock.

 

98

 

“Permitted Letters of
Credit” shall mean (i) each standby letter of credit issued by a financial
institution acceptable to the Administrative Agent for the account of the
Borrower or any of its Subsidiaries in support of obligations arising in the
ordinary course of business of the Borrower or such Subsidiary and (ii) each
trade letter of credit issued by a financial institution acceptable to the
Administrative Agent for the account of the Borrower or any of its Subsidiaries
and for the benefit of sellers of goods to the Borrower or such Subsidiary in
support of commercial transactions of the Borrower or such Subsidiary in the
ordinary course of business.

 

“Permitted Liens”
shall mean Liens described in clauses (a) through (o), inclusive, of Section
7.03.

 

“Permitted MJD Capital
Debt” shall mean Indebtedness of MJD Capital under Capital Leases and
purchase money mortgages in respect of equipment acquired by MJD Capital to
lease or sublease to subsidiaries of the Borrower, provided that the
maximum amount of such Indebtedness incurred in any fiscal year shall not
exceed $2.5 million.

 

“Permitted Refinancing
Indebtedness” shall mean any Indebtedness of the Borrower and/or any
Subsidiary of the Borrower issued or given in exchange for, or the proceeds of
which are used to, extend, refinance, renew, replace, substitute or refund any
Indebtedness of such Person permitted pursuant to Sections 7.04(g), (i), (j) or
(n) (other than the Existing Seller/Opco Notes not refinanced on the Initial
Borrowing Date) or any Indebtedness of such Person issued to so extend,
refinance, renew, replace, substitute or refund any such Indebtedness, so long
as (a) such Indebtedness has a weighted average life to maturity greater than
or equal to the weighted average life to maturity of the Indebtedness being
refinanced, (b) such refinancing or renewal does not (i) increase the amount of
such Indebtedness outstanding immediately prior to such refinancing or renewal
or (ii) add guarantors, obligors or security from that which applied to such
Indebtedness being refinanced or renewed, (c) such refinancing or renewal
Indebtedness has substantially the same (or, from the perspective of the
Lenders, more favorable) subordination provisions, if any, as applied to the
Indebtedness being renewed or refinanced, and (d) all other terms of such
refinancing or renewal (including, without limitation, with respect to the
amortization schedules, redemption provisions, maturities, covenants, defaults
and remedies), taken as a whole, are not less favorable to the respective
borrower than those previously existing with respect to the Indebtedness being
refinancing or renewed.

 

“Permitted Senior
Subordinated Notes” shall mean any Indebtedness of the Borrower evidenced
by subordinated notes and incurred pursuant to one or more issuances of such
subordinated notes, all of terms and conditions (including, without limitation,
with respect to interest rate, amortization, redemption provisions, maturities,
covenants, defaults, remedies, guaranties and subordination provisions) which
are on market terms for a public offering of subordinated notes or for a
private placement of subordinated notes under Rule 144A of the Securities Act
and are otherwise reasonably satisfactory to the Agents, as such Indebtedness
may be amended, modified and/or supplemented from time to time in accordance
with the terms hereof and thereof; provided, that in any event, unless
the Required Lenders otherwise expressly consent in writing prior to the
issuance thereof, (i) no such Indebtedness shall be secured by any asset of the
Borrower or any of its Subsidiaries, (ii) no such Indebtedness shall be
guaranteed by any Person other than a Subsidiary Guarantor, (iii) no such
Indebtedness shall be subject to scheduled amortization or have a final
maturity, in either case prior to the date occurring one

 

99

 

year
following the Term Loan Maturity Date, (iv) any “change of control” covenant
included in the indenture governing such Indebtedness shall provide that,
before the mailing of any required “notice of redemption” in connection
therewith, the Borrower shall covenant to (I) obtain the consent of the
Required Lenders or (II) pay the Obligations in full in cash, (v) any “asset
sale” offer to purchase covenant included in the indenture governing such
Indebtedness shall provide that the Borrower or the respective Subsidiary shall
be permitted to repay obligations, and terminate commitments, under “senior
debt” (including this Agreement) before offering to purchase such Indebtedness,
(vi) the indenture governing such Indebtedness shall not include any financial
maintenance covenants, (vii) the “default to other indebtedness” event of
default contained in the indenture governing such Indebtedness shall provide
for a “cross-acceleration” rather than a “cross-default” and (viii) the
subordination provisions contained therein shall provide for a permanent block
on payments with respect to such Indebtedness upon a payment default with
respect to “senior debt” and cover all obligations under Interest Rate
Agreements.  As used in this Agreement
(other than this definition), the term “Permitted Senior Subordinated Notes”
shall include any Permitted Exchange Senior Subordinated Notes issued pursuant
to the respective Permitted Senior Subordinated Notes Indenture in exchange for
outstanding Permitted Senior Subordinated Notes, as contemplated by the
definition of “Permitted Exchange Senior Subordinated Notes”.  The issuance of Permitted Senior Subordinated
Notes shall be deemed to be a representation and warranty by the Borrower that
all conditions thereto have been satisfied in all material respects and that
same is permitted in accordance with the terms of this Agreement, which
representation and warranty shall be deemed to be a representation and warranty
for all purposes hereunder, including, without limitation, Sections 4.02 and 8.

 

“Permitted Senior
Subordinated Notes Documents” shall mean, on and after the execution and
delivery thereof, each Permitted Senior Subordinated Notes Indenture, the
Permitted Senior Subordinated Notes and all other documents relating to each
issuance of the Permitted Senior Subordinated Notes, as the same may be
amended, modified or supplemented from time to time in accordance with the
terms hereof and thereof.

 

“Permitted Senior
Subordinated Notes Indenture” shall mean any indenture or similar agreement
entered into in connection with an issuance of Permitted Senior Subordinated
Notes, as the same may be amended, modified or supplemented from time to time
in accordance with the terms hereof and thereof.

 

“Permitted Senior Unsecured
Notes” shall mean any Indebtedness of the Borrower evidenced by senior
notes and incurred pursuant to one or more issuances of such senior notes, all
of terms and conditions of which (including, without limitation, with respect
to interest rate, amortization, redemption provisions, maturities, covenants,
defaults, remedies and guaranties) are on market terms for a public offering of
senior notes or for a private placement of senior notes under Rule 144A of the
Securities Act and are otherwise reasonably satisfactory to the Agents, as such
Indebtedness may be amended, modified and/or supplemented from time to time in
accordance with the terms hereof and thereof; provided, that in any
event, unless the Required Lenders otherwise expressly consent in writing prior
to the issuance thereof, (i) no such Indebtedness shall be secured by any asset
of the Borrower or any of its Subsidiaries, (ii) no such Indebtedness shall be
guaranteed by any Person other than a Subsidiary Guarantor, (iii) no such
Indebtedness shall be subject to scheduled amortization or have a final
maturity, in either case prior to the date occurring one year following the
Term Loan Maturity Date, (iv) any “change of

 

100

 

control”
covenant included in the indenture governing such Indebtedness shall provide
that, before the mailing of any required “notice of redemption” in connection
therewith, the Borrower shall covenant to (I) obtain the consent of the
Required Lenders or (II) pay the Obligations in full in cash, (v) any “asset
sale” offer to purchase covenant included in the indenture governing such
Indebtedness shall provide that the Borrower or the respective Subsidiary shall
be permitted to repay obligations, and terminate commitments, under this
Agreement before offering to purchase such Indebtedness, (vi) the indenture
governing such Indebtedness shall not include any financial maintenance
covenants, and (vii) the “default to other indebtedness” event of default
contained in the indenture governing such Indebtedness shall provide for a “cross-acceleration”
rather than a “cross-default”.  As used
in this Agreement (other than this definition), the term “Permitted Senior
Unsecured Notes” shall include any Permitted Exchange Senior Unsecured Notes
issued pursuant to the relevant Permitted Senior Unsecured Notes Indenture in
exchange for outstanding Permitted Senior Unsecured Notes, as contemplated by
the definition of “Permitted Exchange Senior Unsecured Notes”.   The
issuance of Permitted Senior Unsecured Notes shall be deemed to be a
representation and warranty by the Borrower that all conditions thereto have
been satisfied in all material respects and that same is permitted in
accordance with the terms of this Agreement, which representation and warranty
shall be deemed to be a representation and warranty for all purposes hereunder,
including, without limitation, Sections 4.02 and 8.

 

“Permitted Senior
Unsecured Notes Documents” shall mean, on or after the execution and
delivery thereof, each Permitted Senior Unsecured Notes Indenture, the
Permitted Senior Unsecured Notes and each other agreement, document or
instrument relating to the issuance of the Permitted Senior Unsecured Notes, in
each case as the same may be amended, modified or supplemented from time to
time in accordance with the terms hereof and thereof.

 

“Permitted Senior
Unsecured Notes Indenture” shall mean any indenture or similar agreement
entered into in connection with the issuance of Permitted Senior Unsecured
Notes, as the same may be amended, modified or supplemented from time to time
in accordance with the terms hereof and thereof.

 

“Permitted Swap
Transaction” shall mean a transfer of assets by the Borrower or any of its
Subsidiaries in which at least 85% of the consideration received therefrom
consists of assets (other than cash) that will be used in the Business; provided
that (x) the fair market value (as determined in good faith by the board of
directors of the Borrower) of the assets so transferred shall not exceed the fair
market value (determined as provided in the preceding parenthetical) of the
assets so received and (y) the fair market value (as determined in good faith
by the board of directors of the Borrower) of the assets transferred pursuant
to any such transaction shall not exceed 12.5% of Consolidated Tangible Assets
(as shown on the consolidated balance sheet of the Borrower most recently
delivered (or required to be delivered) to the Administrative Agent pursuant to
Section 6.01(a) or (b), as the case may be); provided  further
that the fair market value of such assets shall be determined by an independent
appraiser satisfactory to the Administrative Agent if in excess of $20,000,000.

 

“Person” shall mean
any individual, partnership, joint venture, firm, corporation, limited
liability company, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.

 

101

 

“Plan” shall mean any
pension plan as defined in Section 3(2) of ERISA (other than a multiemployer
plan as defined in Section 3(37) of ERISA), which is maintained or contributed
to by (or to which there is an obligation to contribute of) the Borrower or any
of its Subsidiaries or an ERISA Affiliate and that is subject to Title IV of
ERISA, and each such plan for the five year period immediately following the
latest date on which the Borrower, any such Subsidiary of the Borrower or an
ERISA Affiliate maintained, contributed to or had an obligation to contribute
to such plan.

 

“Pledge Agreement”
shall have the meaning provided in Section 4.01(i).

 

“Pledge Party” shall
mean the Borrower, each Subsidiary Guarantor and each other Subsidiary of the
Borrower party to the Pledge Agreement.

 

“Pledged Subsidiary”
shall mean each Subsidiary the capital stock or other equity interests of which
is or are pledged pursuant to the Pledge Agreement.

 

“Post-Closing Period”
shall have the meaning provided in Section 6.10(a).

 

“Preferred Stock,” as
applied to the capital stock of any Person, means capital stock of such Person
(other than common stock of such Person) of any class or classes (however
designed) that ranks prior, as to the payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, to shares of capital stock of any
other class of such Person, and shall include any Disqualified Preferred Stock
and any Qualified Preferred Stock.

 

“Prime Lending Rate”
shall mean the rate which DBTCA announces from time to time as its prime
lending rate, the Prime Lending Rate to change when and as such prime lending
rate changes.  The Prime Lending Rate is a reference rate and does
not necessarily represent the lowest or best rate actually charged to any
customer.  DBTCA may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.

 

“Pro Forma Basis”
shall mean, in connection with any calculation of compliance with any financial
covenant or financial term, the calculation thereof after giving effect on a
pro forma basis to (x) the incurrence of any Indebtedness (other than revolving
Indebtedness, except to the extent same is incurred to refinance other
outstanding Indebtedness or to finance a Permitted Acquisition) after the first
day of the relevant Test Period or Calculation Period as if such Indebtedness
had been incurred (and the proceeds thereof applied) on the first day of the
relevant Calculation Period, (y) the permanent repayment of any Indebtedness
(other than revolving Indebtedness) after the first day of the relevant Test
Period or Calculation Period as if such Indebtedness had been retired or repaid
on the first day of the relevant Test Period or Calculation Period and (z) any
Permitted Acquisition or Significant Asset Sale then being consummated as well
as any other Permitted Acquisition or Significant Asset Sale consummated after
the first day of the relevant Test Period or Calculation Period, as the case
may be, and on or prior to the date of the respective Permitted Acquisition or
Significant Asset Sale, as the case may be, then being effected, with the
following rules to apply in connection therewith:

 

(i)            all
Indebtedness (x) (other than revolving Indebtedness, except to the extent same
is incurred to refinance other outstanding Indebtedness or to finance

 

102

 

Permitted Acquisitions)
incurred or issued after the first day of the relevant Test Period or
Calculation Period (whether incurred to finance a Permitted Acquisition, to
refinance Indebtedness or otherwise) shall be deemed to have been incurred or
issued (and the proceeds thereof applied) on the first day of the respective
Test Period or Calculation Period and remain outstanding through the date of
determination (and thereafter in the case of projections pursuant to Section
6.10(a)) and (y) (other than revolving Indebtedness) permanently retired or
redeemed after the first day of the relevant Test Period or Calculation Period
shall be deemed to have been retired or redeemed on the first day of the
respective Calculation Period and remain retired through the date of
determination (and thereafter in the case of projections pursuant to Section
6.10(a));

 

(ii)           all
Indebtedness assumed to be outstanding pursuant to preceding clause (i) shall
be deemed to have borne interest at (x) the rate applicable thereto, in the
case of fixed rate indebtedness or (y) the rates which would have been
applicable thereto during the respective period when same was deemed
outstanding, in the case of floating rate Indebtedness (although interest
expense with respect to any Indebtedness for periods while same was actually
outstanding during the respective period shall be calculated using the actual
rates applicable thereto while same was actually outstanding); and

 

(iii)          in making any
determination of Adjusted Consolidated EBITDA on a Pro  Forma
Basis, pro forma effect shall be given to any Permitted Acquisition or
Significant Asset Sale effected during the respective Calculation Period or
Test Period (or thereafter, as provided in Section 6.10, for determinations
pursuant to Section 6.10 only) as if same had occurred on the first day of the
respective Calculation Period or Test Period, as the case may be, taking into
account, in the case of any Permitted Acquisition, factually supportable and
identifiable cost savings and expenses which would otherwise be accounted for
as an adjustment pursuant to Article 11 of Regulation S-X under the Securities
Act, as if such cost savings or expenses were realized on the first day of the
respective Test Period or Calculation Period.

 

“Pro Forma EBITDA Test”
shall be satisfied (i) if, after giving effect to (x) any merger,
consolidation, conveyance, sale or transfer referred to in Section 7.02(a), (y)
the creation or acquisition of a new Telco or Carrier Services Company pursuant
to a Permitted Acquisition the capital stock or other equity interests of which
is or are not to be pledged under the Pledge Agreement or (z) an Investment in
a Qualified Subsidiary of the type referred to in clause (iii) of the
definition thereof pursuant to Section 7.06(h), the percentage of Adjusted
Consolidated EBITDA for the 12 months last ended at such time (determined, in
the case of the acquisition or creation of a new Telco or Carrier Services
Company pursuant to a Permitted Acquisition, on a Pro  Forma
Basis, as if such Permitted Acquisition was consummated on the first day of
such 12 month period and taking account of the adjustments described in clause
(iii) of the definition of “Pro  Forma Basis” for such period)
attributable to all Non-Pledged Subsidiaries does not exceed 10% and (ii) for
purposes of Section 6.10(a)(viii) and 7.07(b) only, if, after giving effect to
the creation or acquisition of any Acquired Person (other than a Telco or a
Carrier Services Company) or business pursuant to a Permitted Acquisition by a
Qualified Subsidiary in circumstances where the capital stock or other equity
interests of such Acquired Person are not to be pledged under the Pledge
Agreement or the business or assets so acquired pursuant to such Permitted
Acquisition are not held by a Person which is (or will concurrently become) a
Pledged

 

103

 

Subsidiary,
the percentage of Adjusted Consolidated EBITDA for the 12 months last ended at
such time (determined on a Pro  Forma Basis, as if such Permitted
Acquisition was consummated on the first day of such 12 month period and taking
account of the adjustments described in clause (iii) of the definition of “Pro
Forma Basis” for such period) attributable to all Non-Pledged
Subsidiaries acquired after the Initial Borrowing Date pursuant to Permitted
Acquisitions effected by Qualified Subsidiaries in the circumstances described
above in this clause (ii), does not exceed 40%.

 

“Projections” shall
have the meaning provided in Section 4.01(o).

 

“PUC” shall mean a
public utility commission, public service commission or any similar agency or
commission.

 

“Qualified Subsidiary”
shall mean and include (i) each Wholly-Owned Domestic Subsidiary of the
Borrower that is a Pledged Subsidiary, (ii) each other Pledged Subsidiary (x)
that is a Domestic Subsidiary and (y) in which the Investments of cash,
property, services and/or other assets are made in each class of equity
interests of such Subsidiary by the Pledged Parties, on the one hand, and the
other holders of such class of equity interests, on the other hand, in amounts
which are proportional to the respective equity percentages of the Pledged
Parties, on the one hand, and such other holders, on the other hand, for each
class of equity interests of such Subsidiary (as reasonably determined by
senior management of the Borrower) and (iii) each Wholly-Owned Domestic
Subsidiary of the Borrower that is a Telco or Carrier Services Company, the
capital stock or other equity interests of which are not permitted to be
pledged pursuant to the Pledge Agreement as a result of applicable regulatory
law.

 

“Qualified Preferred
Stock” shall mean any Preferred Stock of the Borrower, the express terms of
which shall provide for no voting rights (except for (x) voting rights required
by applicable law and (y) limited customary voting rights on fundamental
matters such as mergers, consolidations, sales of all or substantially all of
the assets of the Borrower, or liquidations involving the Borrower) or
covenants (other than customary information covenants and inspection rights)
and shall provide that dividends thereon shall not be required to be paid at
any time (and to the extent) that such payment would be prohibited by the terms
of this Agreement or any other agreement of the Borrower relating to
outstanding indebtedness and which, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable), or upon
the happening of any event (including any Change of Control), cannot mature and
is not mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, and is not redeemable, or required to be repurchased, at the sole
option of the holder thereof (including, without limitation, upon the
occurrence of a Change of Control), in whole or in part, on or prior to the
date that falls one year and one day after the date on which all Obligations
are repaid in full and all Commitments have terminated or expired.

 

“Quarterly Compliance
Certificate” shall have the meaning provided in Section 6.01(e).

 

“RCRA” shall mean the
Resource Conservation and Recovery Act, as amended, 42 U.S.C. § 6901 et  seq.

 

104

 

“Redemption Date”
shall have the meaning provided in Section 4.01(l).

 

“Reference Period”
shall mean, at any date, the period commencing on the first day of the first
full fiscal quarter of the Borrower ending after the Initial Borrowing Date and
ending on the last day of the last fiscal quarter for which a Quarterly
Compliance Certificate has been delivered by the Borrower prior to such date.

 

“Refinancing” shall
mean the Tender Offers and Consent Solicitations, the Optional Non-2008 Tender
Offer Notes Refinancing and the other refinancing transactions contemplated by
Sections 4.01(l) and 6.13 (including the execution and delivery of the Existing
Tender Offer Notes Indenture Supplement as contemplated by Section 4.01(l)).

 

“Refinancing Documents”
shall mean the documents, instruments and agreements entered into connection
with the Refinancing.

 

“Regulation D” shall
mean Regulation D of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor to all or a portion thereof
establishing reserve requirements.

 

“Regulation T” shall
mean Regulation T of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor to all or a portion thereof
establishing margin requirements.

 

“Regulation U” shall
mean Regulation U of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor to all or a portion thereof
establishing margin requirements.

 

“Regulation X” shall
mean Regulation X of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor to all or a portion thereof
establishing margin requirements.

 

“Reinvestment Election”
shall have the meaning provided in Section 3.02(A)(b).

 

“Reinvestment Notice”
shall mean a written notice signed by an Authorized Officer stating that the
Borrower, in good faith, intends and expects that the Borrower and its
Subsidiaries will use all or a specified portion of the Net Cash Proceeds of an
Asset Sale to finance a Permitted Acquisition within 270 days following the
consummation of such Asset Sale.

 

“Reinvestment Prepayment
Amount” shall mean, with respect to any Reinvestment Election, the amount,
if any, on the Reinvestment Prepayment Date relating thereto by which (a) the
Anticipated Reinvestment Amount in respect of such Reinvestment Election
exceeds (b) the aggregate amount thereof expended by the Borrower and its
Subsidiaries to finance Permitted Acquisitions.

 

“Reinvestment Prepayment Date”
shall mean, with respect to any Reinvestment Election, the earliest of (i) the
date, if any, upon which the Administrative Agent, on behalf of the Required
Lenders, shall have delivered a written termination notice to the Borrower,

 

105

 

provided that such
notice may only be given while an Event of Default under Section 8.01 exists
and (ii) the date occurring 270 days after the date of the related Reinvestment
Notice.

 

“Repayment Election”
shall have the meaning provided in Section 3.02(A)(b).

 

“Replaced Lender”
shall have the meaning provided in Section 1.13.

 

“Replacement Lender”
shall have the meaning provided in Section 1.13.

 

“Reportable Event”
shall mean an event described in Section 4043(c) of ERISA with respect to a
Plan that is subject to Title IV of ERISA other than those events as to which
the 30-day notice period is waived under subsection .22, .23, .25, .27 or .28
of PBGC Regulation Section 4043.

 

“Required Lenders”
shall mean Non-Defaulting Lenders the sum of whose outstanding B Term Loans
(and, if prior to the termination thereof, Delayed-Draw B Term Commitments) and
Revolving Commitments (or, after the termination thereof, outstanding RF Loans
and Percentages of (x) outstanding Swingline Loans and (y) Letter of Credit
Outstandings) constitute greater than 50% of the sum of (i) all outstanding B
Term Loans (and, if prior to the termination thereof, Delayed-Draw B Term
Commitments) of Non-Defaulting Lenders and (ii) the Total Revolving Commitment
less the Revolving Commitments of all Defaulting Lenders (or after the
termination thereof, the sum of then total outstanding RF Loans of
Non-Defaulting Lenders and the aggregate Percentages of all Non-Defaulting
Lenders of the total outstanding Swingline Loans and Letter of Credit
Outstandings at such time).

 

“Required RF Lenders”
shall mean those RF Lenders which are Non-Defaulting Lenders and which would
constitute the Required Lenders under, and as defined in, this Agreement if all
outstanding B Term Loans were repaid in full and the Total Delayed-Draw B Term
Commitment had terminated in its entirety.

 

“Restricted” shall
mean, when referring to cash or Cash Equivalents of the Borrower or any of its
Subsidiaries, that such cash or Cash Equivalents (i) appear (or would be
required to appear) as “restricted” on a consolidated balance sheet of the
Borrower or of any such Subsidiary, (ii) are subject to any Lien in favor of
any Person other than the Collateral Agent for the benefit of the Secured
Creditors or (iii) are not otherwise generally available for use by the
Borrower or any of its Subsidiaries.

 

“Restricted Investment
Entity” shall mean, as to any Person, (i) any other Person, other than an
individual or a Wholly-Owned Subsidiary of such Person, (x) in which such
Person or a Subsidiary of such Person holds or acquires an ownership interest
(whether by way of capital stock, partnership or limited liability company
interest, or other evidence of ownership) and (y) which is engaged in the
Business and/or (ii) any Wholly-Owned Domestic Subsidiary of such Person the
capital stock or other equity interests of which then owned by such Person are
not pledged pursuant to the Pledge Agreement (other than as a result of
applicable regulatory laws restricting such pledge).

 

“Restricted Payment”
shall mean, with respect to the Borrower or any of its Subsidiaries, (i) any
Dividend by such Person, (ii) any payment of cash interest by such Person

 

106

 

on
account of any Indebtedness that is subordinated in right of payment to the
Obligations (including, without limitation, any Permitted Senior Subordinated
Notes, any Additional Permitted Subordinated Debt and guaranties thereof),
(iii) any payment by the Borrower or any of its Subsidiaries with respect to
any Intercompany Debt and (iv) the making of (or giving any notice in respect
of) any voluntary or optional payment or prepayment on or redemption,
repurchase or acquisition for value of (including, without limitation, by way
of depositing with the trustee with respect thereto or any other Person money
or securities before due for the purpose of paying when due), or any
prepayment, repurchase, redemption or acquisition for value as a result of any
asset sale, change of control or similar event of any Permitted Acquired Debt,
any Scheduled Existing Indebtedness (other than the Existing Seller/Opco Notes
not refinanced pursuant to the Refinancing, so long as no Default or Event of
Default then exists or would result from the prepayment, repurchase or
redemption thereof), any Existing 2008 Subordinated Notes Document, any
Existing 2010 Subordinated Notes Document, any Existing 2010 Senior Notes
Document and, on and after the execution, delivery and/or incurrence thereof,
any Permitted Senior Unsecured Notes Document, any Permitted Senior
Subordinated Notes Document, any other Permitted Junior Capital and any
Permitted Refinancing Indebtedness.

 

“Revolving Commitment”
shall mean, with respect to each Lender, the amount set forth opposite such
Lender’s name in Annex I hereto directly below the column entitled “Revolving
Commitment,” as the same may be (x) reduced or terminated from time to time
pursuant to Section 2.02, 2.03 and/or 8 or (y) adjusted from time to time as a
result of assignments to or from such Lender pursuant to Section 1.13 and/or
11.04.

 

“Revolving Facility”
shall mean the Facility evidenced by the Total Revolving Commitment.

 

“RF Commitment Commission”
shall have the meaning provided in Section 2.01(a).

 

“RF Lender” shall
mean at any time each Lender with a Revolving Commitment or with outstanding RF
Loans.

 

“RF Loan” shall have
the meaning provided in Section 1.01(c).

 

“RF Maturity Date”
shall mean February 8, 2011.

 

“RF Note” shall have
the meaning provided in Section 1.05(a).

 

“Scheduled Existing
Indebtedness” shall have the meaning provided in Section 7.04(g).

 

“SEC” shall have the
meaning provided in Section 6.01(g).

 

“SEC Regulation D”
shall mean Regulation D as promulgated under the Securities Act.

 

107

 

“2d-Tier Holdco”
shall mean any indirect Subsidiary of the Borrower that is a holding company
formed to hold the capital stock or other equity interests of one or more
Subsidiaries (i.e., is not an operating company).

 

“Section 1A.01(c) Arrangements” shall have the meaning provided
in Section 1A.01(c).

 

“Section 3.04 Certificate”
shall have the meaning provided in Section 3.04(b)(ii).

 

“Secured Creditor”
shall mean and include any “Secured Creditor” as defined in the Pledge
Agreement.

 

“Securities Act”
shall mean the Securities Act of 1933, as amended, as the same may be in effect
from time to time.

 

“Segregated Account”
shall have the meaning specified in Section 4.01(l)(iii).

 

“Senior Consolidated Debt”
shall mean, at any time, (i) Consolidated Debt at such time less (ii)
any such Consolidated Debt that constitutes Indebtedness under any Existing
2010 Senior Subordinated Notes Documents, any Permitted Senior Subordinated
Notes Documents, any Additional Permitted Subordinated Debt and/or Permitted
Refinancing Indebtedness incurred to refinance Permitted Senior Subordinated
Notes less (iii) the amount of any Disqualified Preferred Stock deemed
to be Consolidated Debt at such time pursuant to the definition thereof.

 

“Senior Secured
Consolidated Debt” shall mean, at any time, (i) Senior Consolidated Debt at
such time less (ii) any such Senior Consolidated Debt that constitutes
Indebtedness under the Existing 2010 Senior Notes Documents, any Permitted
Senior Unsecured Notes Documents and/or Permitted Refinancing Indebtedness
incurred to refinance the foregoing.

 

“Senior Secured Leverage
Ratio” shall mean, at any date of determination, the ratio of (x) Senior
Secured Consolidated Debt on such date to (y) Adjusted Consolidated EBITDA for
the Test Period then or last ended.  All calculations of the Senior
Secured Leverage Ratio shall be made on a Pro  Forma Basis.

 

“Series A Preferred Stock”
shall mean Series A preferred stock of the Borrower, par value $.01 per share,
authorized by Article IV.B.1. of the Borrower’s certificate of incorporation
consisting of 1,000,000 authorized shares.

 

“Significant Asset Sale”
shall mean each Asset Sale which generates Net Sale Proceeds of at least
$5,000,000.

 

“Stated Amount” shall
mean, with respect to any Letter of Credit at any time, the maximum available
to be drawn thereunder at such time (regardless of whether any conditions for
drawing could then be met).

 

“STE” shall mean ST
Enterprises, Ltd., a Kansas corporation.

 

108

 

“Subsidiary” of any
Person shall mean and include (i) any corporation more than 50% of whose stock
of any class or classes having by the terms thereof ordinary voting power to
elect a majority of the directors of such corporation (irrespective of whether
or not at the time stock of any class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency) is at
the time owned by such Person directly or indirectly through Subsidiaries and
(ii) any partnership, association, joint venture or other entity in which such
Person directly or indirectly through Subsidiaries, has more than a 50% equity
interest at the time.  Unless otherwise expressly provided, all references
herein to “Subsidiary” shall mean a Subsidiary of the Borrower.  Notwithstanding the foregoing (and except for
purposes of (x) Sections 5.01, 5.04, 5.12, 5.13, 5.14, 5.17, 6.01(f), 6.04,
6.06, 6.07, 8.05, 8.06 and 8.09 and the defined terms used therein and (y) the
definition of Unrestricted Subsidiary contained herein), an Unrestricted
Subsidiary shall be deemed not to be a Subsidiary of the Borrower or any of its
other Subsidiaries for purposes of this Agreement.

 

“Subsidiary Guarantors”
shall mean each Subsidiary party to the Subsidiary Guaranty.

 

“Subsidiary Guaranty”
shall have the meaning provided in Section 4.01(h).

 

“Swingline Expiry Date”
shall mean that date which is five Business Days prior to the RF Maturity Date.

 

“Swingline Lender”
shall mean DBTCA in its individual capacity for so long as DBTCA is the
Administrative Agent hereunder, and thereafter shall mean the successor
Administrative Agent in its individual capacity.

 

“Swingline Loan”
shall have the meaning provided in Section 1.01(d).

 

“Swingline Note”
shall have the meaning provided in Section 1.05(a).

 

“Syndication Agent”
shall have the meaning provided in the first paragraph of this Agreement.

 

“Syndication Date”
shall mean the earlier of (i) the 90th day following the Initial Borrowing Date
and (ii) the date upon which the Administrative Agent determines (and notifies
the Borrower and the Lenders) that the primary syndication (and resultant
addition of Persons as Lenders pursuant to Section 11.04(b)) has been
completed.

 

“S&P” shall have
the meaning provided in the definition of “Cash Equivalents”.

 

“Taxes” shall have
the meaning provided in Section 3.04(a).

 

“TelCo” shall mean
any Subsidiary of the Borrower that is an operating company (except to the
extent same is a Non-Core Asset).

 

“Tender Offer and Consent
Solicitation Consummation” shall mean the taking of the actions specified
in clause (y) of Section 4.01(l)(ii) and 6.13(a).

 

109

 

“Tender Offers and
Consent Solicitations” shall have the meaning provided in Section 4.01(l).

 

“Term Loan Maturity Date”
shall mean February 8, 2012.

 

“Term Loans” shall
mean, collectively, each B Term Loan and each Delayed-Draw B Term Loan.

 

“Test Period” shall
mean each period of four consecutive fiscal quarters then last ended, in each
case taken as one accounting period.

 

“THL” shall mean THL
Equity Advisors IV, LLC and its Affiliates.

 

“Total Available
Revolving Commitment” shall mean, at any time, an amount equal to the
remainder of (x) the Total Revolving Commitment at such time less (y)
the Blocked Revolving Commitment as in effect at such time.

 

“Total Commitment”
shall mean, at any time, the sum of the Total Initial B Term Commitment, the
Total Delayed-Draw B Term Commitment, the Total Incremental B Term Commitment
and the Total Revolving Commitment at such time.

 

“Total Delayed-Draw B
Term Commitment” shall mean the sum of the Delayed-Draw B Term Commitments
of each of the Lenders.

 

“Total Incremental B Term
Commitment” shall mean the sum of the Incremental B Term Commitments of
each of the Lenders.

 

“Total Initial B Term
Commitment” shall mean the sum of the Initial B Term Commitments of each of
the Lenders.

 

“Total Revolving
Commitment” shall mean, at any time, the sum of the Revolving Commitments
of each of the Lenders at such time.

 

“Total Unutilized
Revolving Commitment” shall mean, at any time, (i) the Total Revolving
Commitment at such time less (ii) the sum of (x) the aggregate principal
amount of all RF Loans and Swingline Loans at such time plus (y) the Letter of
Credit Outstandings at such time.

 

“Transaction” shall
mean (i) the Refinancing, (ii) the issuance of Borrower Common Stock pursuant
to the IPO, (iii) the entering into of the Credit Documents and the incurrence
of all Loans and the issuance of all Letters of Credit on the Initial Borrowing
Date, and (iv) the payment of fees and expenses in connection with the
foregoing.

 

“Type” shall mean any
type of Loan determined with respect to the interest option applicable thereto,
i.e., a Base Rate Loan or Eurodollar Loan.

 

“UCC” shall mean the
Uniform Commercial Code as in effect from time to time in New York.

 

110

 

“Unfunded Current
Liability” of any Plan shall mean the amount, if any, by which the actuarial
present value of the accumulated plan benefits under the Plan as of the close
of its most recent plan year, determined in accordance with actuarial
assumptions at such time consistent with Statement of Financial Accounting
Standards No. 87, exceeds the market value of the assets allocable thereto.

 

“Unpaid Drawing”
shall have the meaning provided in Section 1A.04.

 

“Unrestricted” shall
mean, when referring to cash or Cash Equivalents of the Borrower or any of its
Subsidiaries, that such cash or Cash Equivalents are not Restricted.

 

“Unrestricted Subsidiary”
shall mean any Subsidiary of the Borrower that is acquired or created after the
Effective Date and designated by the Borrower as an “Unrestricted Subsidiary”
hereunder by written notice to the Administrative Agent, provided that
the Borrower shall only be permitted to so designate a new Unrestricted
Subsidiary after the Initial Borrowing Date and so long as (i) no Default or
Event of Default exists or would result therefrom, (ii) such Subsidiary is not
a Telco or a Carrier Services Company, and (iii) such Unrestricted Subsidiary shall be capitalized (to the extent
capitalized by the Borrower or any of its Subsidiaries) through Investments as
permitted by, and in compliance with, Section 7.06(l), with the Pledge Party’s
or respective Qualified Subsidiary’s ownership percentage in the value of the
assets owned by such Unrestricted Subsidiary at the time of the initial
designation thereof to be treated as an Investment pursuant to Section 7.06(l);
provided that at the time of the initial Investment in any Subsidiary
designated as an “Unrestricted Subsidiary”, such Subsidiary and the Borrower
shall have entered into tax sharing agreement on a basis which is satisfactory
to the Administrative Agent.

 

“Unutilized Revolving
Commitment” for any Lender with a Revolving Commitment at any time shall
mean the excess of (i) the Revolving Commitment of such Lender at such time
over (ii) the sum of (x) the aggregate outstanding principal amount of RF Loans
made by such Lender at such time plus (y) an amount equal to such Lender’s
Percentage of the Letter of Credit Outstandings at such time.

 

“U.S.” shall mean the
United States of America and any state or territory thereof or the District of
Columbia.

 

“Wholly-Owned Domestic
Subsidiary” shall mean, as to any Person, any Wholly-Owned Subsidiary of
such Person which is a Domestic Subsidiary.

 

“Wholly-Owned Subsidiary”
of any Person shall mean any Subsidiary of such Person to the extent all of the
capital stock or other ownership interests in such Subsidiary, other than
directors’ qualifying shares, is owned directly or indirectly by such Person; provided,
however, that (x) for purposes of the definitions of “Asset Sale”, “Available
Basket Amount”, “Available Basket Sub-Limit”, “Consolidated Net Income” and “Wholly-Owned
Domestic Subsidiary” and Sections 6.10, 7.06(c), (h) and (l), 90%-Owned
Subsidiaries that are Telcos or Carrier Services Companies shall be deemed to
be “Wholly-Owned Subsidiaries” and (y) no Unrestricted Subsidiary shall be
considered a Wholly-Owned Subsidiary.

 

111

 

“Written” or “in
writing” shall mean any form of written communication or a communication by
means of telex, facsimile transmission, telegraph or cable.

 

SECTION
10.  The Agents

 

10.01  Appointment.  (a)  Each
Lender hereby irrevocably designates and appoints (x) DBTCA as Administrative
Agent for such Lender (for purposes of this Section 10, the term “Administrative
Agent” shall mean DBTCA in its capacities as Administrative Agent and as
Collateral Agent hereunder and pursuant to the Pledge Agreement), (y) BAS as
Syndication Agent for such Lender, and (z) CoBank and GECC as Co-Documentation
Agents for such Lender, each to act as specified herein and in the other Credit
Documents, and each such Lender hereby irrevocably authorizes the
Administrative Agent, the Syndication Agent and each Co-Documentation Agent to
take such action on its behalf under the provisions of this Agreement and the
other Credit Documents and to exercise such powers and perform such duties as
are expressly delegated to or required of the Administrative Agent, the
Syndication Agent or such Co-Documentation Agent, as the case may be, by the
terms of this Agreement and the other Credit Documents, together with such
other powers as are reasonably incidental thereto.  Each of the
Agents may perform any of their respective duties under this Agreement, the
other Credit Documents and any other instruments and agreements referred to
herein or therein by or through its respective officers, directors, agents,
employees or affiliates (it being understood and agreed, for avoidance of doubt
and without limiting the generality of the foregoing, that the Administrative
Agent and/or Collateral Agent may perform any of its duties under the Pledge
Agreement by or through one or more of its affiliates).

 

(b)           The
provisions of this Section 10 are solely for the benefit of the Administrative
Agent, the Syndication Agent, the Co-Documentation Agents and the Lenders, and
neither the Borrower nor any of its Subsidiaries shall have any rights as a
third party beneficiary of any of the provisions hereof.  In
performing its functions and duties under this Agreement, each of the
Administrative Agent, the Syndication Agent and each Co-Documentation Agent
shall act solely as agent for the Lenders, and none of the Administrative
Agent, the Syndication Agent or the Co-Documentation Agents assumes (and shall
not be deemed to have assumed) any obligation or relationship of agency or
trust with or for Borrower or any of its Subsidiaries.

 

10.02  Nature of Duties.  (a)  No
Agent shall have any duties or responsibilities except those expressly set
forth in this Agreement and in the other Credit Documents.  Neither
any Agent nor any of its officers, directors, agents, employees or affiliates
shall be liable for any action taken or omitted by it hereunder or under any
other Credit Document or in connection herewith or therewith, unless caused by
its or their gross negligence or willful misconduct (as determined by a court
of competent jurisdiction in a final and non-appealable
decision).  The duties of the Agents shall be mechanical and
administrative in nature; no Agent shall have by reason of this Agreement or
any other Credit Document a fiduciary relationship in respect of any Lender or
the holder of any Note and nothing in this Agreement or in any other Credit
Document, expressed or implied, is intended to or shall be so construed as to
impose upon any Agent any obligations in respect of this Agreement or any other
Credit Document except as expressly set forth herein or therein.

 

112

 

(b)           Notwithstanding
any other provision of this Agreement or any provision of any other Credit Document,
each of the Joint Lead Arrangers and the Joint Book Running Managers is named
as such for recognition purposes only, and in their respective capacities as
such shall have no powers, duties, responsibilities or liabilities with respect
to this Agreement or the other Credit Documents or the transactions
contemplated hereby and thereby; it being understood and agreed that each Joint
Lead Arranger and each Joint Book Running Manager shall be entitled to all
indemnification and reimbursement rights in favor of “Agents” as, and to the
extent, provided for under Sections 10.07 and 11.01.  Without
limitation of the foregoing, none of the Joint Lead Arrangers or the Joint Book
Running Managers shall, solely by reason of this Agreement or any other Credit
Documents, have any fiduciary relationship in respect of any Lender or any
other Person.

 

10.03  Certain Rights of the Agents.  The
Agents shall have the right to request instructions from the Required Lenders
at any time.  If any Agent shall request instructions from the
Required Lenders with respect to any act or action (including failure to act)
in connection with this Agreement or any other Credit Document, such Agent
shall be entitled to refrain from such act or taking such action unless and
until such Agent shall have received instructions from the Required Lenders;
and such Agent shall not incur liability to any Lender by reason of so
refraining.  Without limiting the foregoing, neither any Lender nor
the holder of any Note shall have any right of action whatsoever against any
Agent or any of its employees, directors, officers, agents or affiliates as a
result of such Agent or such other person acting or refraining from acting
hereunder or under any other Credit Document in accordance with the instructions
of the Required Lenders.

 

10.04  Reliance by Agents.  Each
Agent shall be entitled to rely, and shall be fully protected (and shall have
no liability to any Person) in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order, telephone message or other document or
conversation that such Agent believed, in the absence of gross negligence or
willful misconduct (as determined by a court of competent jurisdiction in a
final and non-appealable decision), to be the proper Person, and, with respect
to all legal matters pertaining to this Agreement and any other Credit Document
and its duties hereunder and thereunder, upon advice of counsel selected by
such Agent (which may be counsel for the Credit Parties) and, with respect to
other matters, upon advice of independent public accountants or other experts
selected by it.

 

10.05  Notice of Default, etc.  The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default unless the Administrative Agent has actually received written notice
from a Lender or the Borrower referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a “notice of
default.”  In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall
give prompt notice thereof to the Lenders.  The Administrative Agent
shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders (or all Lenders, to the
extent required by Section 11.12(a)); provided that, unless and until
the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem

 

113

 

advisable in
the best interests of the Lenders (as determined by the Administrative Agent in
its sole discretion).

 

10.06  Nonreliance on Agents and Other Lenders.  Independently
and without reliance upon any Agent, each Lender and the holder of each Note,
to the extent it deems appropriate, has made and shall continue to make (i) its
own independent investigation of the financial condition and affairs of the
Borrower and its Subsidiaries in connection with the making and the continuance
of the Loans and the taking or not taking of any action in connection herewith
and (ii) its own appraisal of the creditworthiness of the Borrower and its
Subsidiaries and, except as expressly provided in this Agreement, no Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to provide any Lender or the holder of any Note with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter.  No Agent or
their respective affiliates nor any of their respective officers, directors,
agents or employees shall be responsible to any Lender or the holder of any
Note for, or be required or have any duty to ascertain, inquire or verify the
accuracy of, (i) any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith, (ii) the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of this
Agreement or any other Credit Document, (iii) the financial condition of the
Borrower and any of its Subsidiaries, (iv) the performance or observance of any
of the terms, provisions or conditions of this Agreement or any other Credit
Document, (v) the satisfaction of any of the conditions precedent set forth in
Section 4, or (vi) the existence or possible existence of any Default or Event
of Default.

 

10.07  Indemnification.  (a)  To
the extent any Agent (or any affiliate thereof) is not reimbursed and
indemnified by the Borrower, the Lenders will reimburse and indemnify such
Agent (and any affiliate thereof) in proportion to their respective “percentages”
as used in determining the Required Lenders (determined as if there were no
Defaulting Lenders), for and against any and all liabilities, obligations,
losses, damages, penalties, claims, actions, judgments, costs, expenses or
disbursements of whatsoever kind or nature which may be imposed on, asserted
against or incurred by such Agent (or any affiliate thereof) in performing its
respective duties hereunder or under any other Credit Document or in any way
relating to or arising out of this Agreement or any other Credit Document, provided
that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent’s gross negligence or
willful misconduct (as determined by a court of competent jurisdiction in a
final and non-appealable decision).

 

(b)           Any Agent shall
be fully justified in failing or refusing to take any action hereunder and
under any other Credit Document (except actions expressly required to be taken
by it hereunder or under the Credit Documents) unless it shall first be
indemnified to its satisfaction by the Lenders pro  rata against
any and all liability, cost and expense that it may incur by reason of taking
or continuing to take any such action.

 

(c)           The agreements
in this Section 10.07 shall survive the payment of all Obligations.

 

114

 

10.08  Agents in their Individual Capacities.  With
respect to its obligation to make Loans, or issue or participate in Letters of
Credit, under this Agreement, each Agent shall have the rights and powers
specified herein for a “Lender” and may exercise the same rights and powers as
though it were not performing the duties specified herein; and the term “Lender”,
“Majority Lenders”, “Required Lenders”, “Required RF Lender”, “holders of Notes”
or any similar terms shall, unless the context clearly otherwise indicates,
include each Agent in its individual capacity.  Each Agent and its
affiliates may accept deposits from, lend money to, and generally engage in any
kind of banking, investment banking, trust or other business with, or provide
debt financing, equity capital or other services (including financial advisory
services) to, any Credit Party or any Affiliate of any Credit Party (or any
Person engaged in a similar business with any Credit Party or any Affiliate
thereof) as if they were not performing the duties specified herein, and may
accept fees and other consideration from any Credit Party or any Affiliate of
any Credit Party for services in connection with this Agreement and otherwise
without having to account for the same to the Lenders.

 

10.09  Holders.  The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes hereof unless and until a written notice of the
assignment, transfer or endorsement thereof, as the case may be, shall have
been filed with the Administrative Agent.  Any request, authority or
consent of any Person or entity who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or endorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.

 

10.10  Resignation of the Agents.  (a)  The
Administrative Agent may resign from the performance of all its functions and
duties hereunder and/or under the other Credit Documents (including, without
limitation, its functions and duties as Collateral Agent) at any time by giving
15 Business Days’ prior written notice to the Lenders and, unless a Default or
an Event of Default under Section 8.05 then exists, the
Borrower.  Any such resignation by an Agent hereunder shall also
constitute its resignation (if applicable) as a Letter of Credit Issuer and
Swingline Lender, in which case the resigning Agent (x) shall not be required
to issue any further Letters of Credit or make any additional Swingline Loans
hereunder and (y) shall maintain all of its rights as Letter of Credit Issuer
or Swingline Lender, as the case may be, with respect to any Letter of Credit
issued by it, or Swingline Loans made by it, prior to the date of such
resignation. Such resignation shall take effect upon the appointment of a
successor Administrative Agent pursuant to clauses (b) and (c) below or as
otherwise provided below.

 

(b)           Upon
any such notice of resignation by the Administrative Agent, the Required
Lenders shall appoint a successor Administrative Agent hereunder and/or under
the other Credit Documents who shall be a commercial bank or trust company
acceptable to the Borrower, which acceptance shall not be unreasonably withheld
or delayed (provided that the Borrower’s approval shall not be required
if an Event of Default then exists).

 

(c)           If
a successor Administrative Agent shall not have been so appointed within such
15 Business Day period, the Administrative Agent, with the consent of the
Borrower (which consent shall not be unreasonably withheld or delayed, provided
that the Borrower’s consent shall not be required if an Event of Default then
exists), shall then appoint a successor Administrative Agent who shall serve as
Administrative Agent hereunder and/or under the other

 

115

 

Credit Documents until such
time, if any, as the Required Lenders appoint a successor Administrative Agent
as provided above.

 

(d)           If
no successor Administrative Agent has been appointed pursuant to clause (b) or
(c) above by the 15th Business Day after the date such notice of resignation
was given by the Administrative Agent, the Administrative Agent’s resignation
shall become effective and the Required Lenders shall thereafter perform all
the duties of the Administrative Agent hereunder and/or under any other Credit
Document until such time, if any, as the Required Lenders appoint a successor
Administrative Agent as provided above.

 

(e)           The
Syndication Agent may resign from the performance of all its functions and
duties hereunder and/or under the other Credit Documents at any time by giving
five Business Days’ prior written notice to the Borrower and the Administrative
Agent.  Such resignation shall take effect at the end of such five
Business Day period.

 

(f)            Either
Co-Documentation Agent may resign from the performance of all its functions and
duties hereunder and/or under the other Credit Documents at any time by giving
five Business Days’ prior written notice to the Borrower and the Administrative
Agent.  Such resignation shall take effect at the end of such five
Business Day period.

 

(g)           Upon
a resignation of any Agent pursuant to this Section 10.10, such Agent shall
remain indemnified to the extent provided in this Agreement and the other
Credit Documents and the provisions of this Section 10 shall continue in effect
for the benefit of such Agent for all of its actions and inactions while
serving as such Agent.

 

10.11  Collateral Matters.  (a)  Each
Lender authorizes and directs the Collateral Agent to enter into the Pledge
Agreement for the benefit of the Lenders and the other Secured
Creditors.  Each Lender hereby agrees, and each holder of any Note or
participant in Letters of Credit by the acceptance thereof will be deemed to
agree, that, except as otherwise set forth herein, any action taken by the
Required Lenders in accordance with the provisions of this Agreement or the
Pledge Agreement, and the exercise by the Required Lenders of the powers set
forth herein or therein, together with such other powers as are reasonably
incidental thereto, shall be authorized and binding upon all of the
Lenders.  The Collateral Agent is hereby authorized on behalf of all
of the Lenders, without the necessity of any notice to or further consent from
any Lender, from time to time prior to an Event of Default, to take any action
with respect to any Collateral or the Pledge Agreement which may be necessary
to perfect and maintain perfected the security interest in and liens upon the
Collateral granted pursuant to the Pledge Agreement.

 

(b)           The
Lenders hereby authorize the Collateral Agent, at its option and in its
discretion, to release any Lien granted to or held by the Collateral Agent upon
any Collateral (i) upon termination of the Commitments and payment and
satisfaction of all of the Obligations at any time arising under or in respect
of this Agreement or the Credit Documents or the transactions contemplated
hereby or thereby, (ii) constituting property being sold or otherwise disposed
of (to Persons other than the Borrower and its Subsidiaries) upon the sale or
other disposition thereof in compliance with Sections 7.02 and 11.12(a), (iii)
if approved, authorized or ratified in writing by the Required Lenders (or all
of the Lenders hereunder, to the extent required by Section 11.12) or (iv) as
otherwise may be expressly provided in the Pledge

 

116

 

Agreement.  Upon
request by the Administrative Agent at any time, the Lenders will confirm in
writing the Collateral Agent’s authority to release particular types or items
of Collateral pursuant to this Section 10.11.

 

(c)           The
Collateral Agent shall have no obligation whatsoever to the Lenders or to any other
Person to assure that the Collateral exists or is owned by the Borrower or any
of its Subsidiaries or is cared for, protected or insured or that the Liens
granted to the Collateral Agent herein or pursuant hereto have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise or to continue exercising
at all or in any manner or under any duty of care, disclosure or fidelity any
of the rights, authorities and powers granted or available to the Collateral
Agent in this Section 10.11 or in the Pledge Agreement, it being understood and
agreed that in respect of the Collateral, or any act, omission or event related
thereto, the Collateral Agent may act in any manner it may deem appropriate, in
its sole discretion, given the Collateral Agent’s own interest in the
Collateral as one of the Lenders and that the Collateral Agent shall have no
duty or liability whatsoever to the Lenders, except for its gross negligence or
willful misconduct (as determined by a court of competent jurisdiction in a
final and non-appealable decision).

 

10.12  Delivery of Information.  The
Administrative Agent shall not be required to deliver to any Lender originals
or copies of any documents, instruments, notices, communications or other
information received by the Administrative Agent from the Borrower, any
Subsidiary, the Required Lenders, any Lender or any other Person under or in
connection with this Agreement or any other Credit Document except (i) as
specifically provided in this Agreement or any other Credit Document and (ii)
as specifically requested from time to time in writing by any Lender with
respect to a specific document, instrument, notice or other written
communication received by and in the possession of the Administrative Agent at
the time of receipt of such request and then only in accordance with such
specific request.

 

SECTION 11.  Miscellaneous.

 

11.01  Payment of Expenses, etc. (a)  The Borrower agrees to:  (i) whether or not the transactions herein
contemplated are consummated, pay all reasonable out-of-pocket costs and
expenses of the Administrative Agent in connection with the negotiation,
preparation, execution and delivery of the Credit Documents and the documents
and instruments referred to therein and any amendment, waiver or consent
relating thereto (including, without limitation, the reasonable fees and
disbursements of White & Case LLP) and of each Agent, the Collateral Agent,
each Letter of Credit Issuer, the Swingline Lender and each of the Lenders in
connection with the enforcement of the Credit Documents and the documents and
instruments referred to therein (including, without limitation, the reasonable
fees and disbursements of counsel for the Agents, the Collateral Agent, each
Letter of Credit Issuer, the Swingline Lender and each of the Lenders); (ii)
pay and hold each of the Lenders (including in its capacity as Agent,
Collateral Agent, Swingline Lender and/or Letter of Credit Issuer) harmless
from and against any and all present and future stamp and other similar taxes
with respect to the foregoing matters and save each of the Lenders harmless
from and against any and all liabilities with respect to or resulting from any
delay or omission (other than to the extent attributable to such Lender) to pay
such taxes; and (iii) indemnify each Lender (including in its capacity as
Agent, Collateral Agent, Swingline Lender and/or Letter of Credit Issuer) and
its affiliates, and each officer, director,

 

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trustee,
employee, representative, advisor and agent thereof (each, an “Indemnified
Person”) from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them as a result
of, or arising out of, or in any way related to, or by reason of, (a) any
investigation, litigation or other proceeding (whether or not any Agent or any
Lender is a party thereto and whether or not any such investigation, litigation
or other proceeding is between or among any Agent, any Lender, any Credit Party
or any third Person or otherwise (except to the extent between or among any
Lenders in their capacity as such)) related to the entering into and/or
performance of any Credit Document or the use of the proceeds of any Loans
hereunder or the Transaction or the consummation of any transactions
contemplated in any Credit Document, or (b) the actual or alleged presence of
Hazardous Materials in the air, surface water or ground water or on the surface
or subsurface of any property owned or operated at any time by Borrower or any
of its Subsidiaries or the generation, storage, transportation, handling or
disposal of Hazardous Materials by the Borrower or any of its Subsidiaries at
any location, or the noncompliance by the Borrower or any of its Subsidiaries
with any Environmental Law or any Environmental Claim in connection with the
Borrower or any of its Subsidiaries or business or operations or any property
owned or operated at any time by the Borrower or any of its Subsidiaries,
including, in each case, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding (but excluding any such losses, liabilities,
claims, damages or expenses (x) of an Indemnified Person, to the extent
incurred by reason of the gross negligence or willful misconduct of such
Indemnified Person as determined by a court of competent jurisdiction in a
final and non-appealable decision and (y) for purposes of clause (b) only and
without limiting the indemnity in favor of such Indemnified Persons for
purposes of clause (a), to the extent incurred by any affiliate of an Agent,
Collateral Agent, Swingline Lender and/or Letter of Credit Issuer and any
officer, director, trustee, employee, representative, advisor and agent of any
such affiliate, if such Indemnified Person is not involved, directly or
indirectly, in any of the transactions contemplated by the Credit Documents).

 

(b)           To the full
extent permitted by applicable law, the Borrower shall not assert, and hereby
waives, any claim against any Indemnified Person, on any theory of liability,
for special, indirect, consequential or incidental damages (as opposed to
direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or
the use of the proceeds thereof.  No
Indemnified Person shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed by it
through telecommunications, electronic or other information transmission
systems in connection with this Agreement or the other Credit Documents or the
transactions contemplated hereby or thereby, except to the extent the liability
of such Indemnified Person results from such Indemnified Person’s gross
negligence or willful misconduct (as determined by a court of competent jurisdiction
in a final and non-appealable decision) .

 

11.02  Right of Setoff.  In
addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, if an Event of
Default then exists, each Lender is hereby authorized at any time or from time
to time, without presentment, demand, protest or other notice of any kind to
any Credit Party 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 but not trust accounts) and any other Indebtedness at any

 

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time held or
owing by such Lender (including, without limitation, by branches and agencies
of such Lender wherever located) to or for the credit or the account of any
Pledge Party against and on account of the Obligations and liabilities of such
Pledge Party to such Lender under this Agreement or under any of the other
Credit Documents, including, without limitation, all interests in Obligations
of such Pledge Party purchased by such Lender pursuant to Section 11.06(b), and
all other claims of any nature or description arising out of or connected with
this Agreement or any other Credit Document, irrespective of whether or not
such Lender shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.

 

11.03  Notices.  Except
as otherwise expressly provided herein, all notices and other communications
provided for hereunder shall be in writing (including telegraphic, telex,
telecopier, facsimile or cable communication) and mailed, telegraphed, telexed,
telecopied, faxed, cabled or delivered, if to the Borrower at the address
specified opposite its signature below, if to any Lender, at its address
specified for such Lender on Annex II hereto; or, at such other address as
shall be designated by any party in a written notice to the other parties
hereto.  All such notices and communications shall be mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier, and
shall be effective when received.

 

11.04  Benefit of Agreement.  (a)  This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, provided that the Borrower may not assign
or transfer any of its rights or obligations hereunder without the prior
written consent of each of the Lenders.  Each Lender may at any time
grant participations in any of its rights hereunder or under any of the Notes
to another financial institution, provided that in the case of any such
participation, the participant shall not have any rights under this Agreement
or any of the other Credit Documents (the participant’s rights against such
Lender in respect of such participation to be those set forth in the agreement
executed by such Lender in favor of the participant relating thereto) and all
amounts payable by the Borrower hereunder shall be determined as if such Lender
had not sold such participation, except that the participant shall be entitled
to the benefits of Sections 1.10, 1A.06 and 3.04 of this Agreement to the
extent that such Lender would be entitled to such benefits if the participation
had not been entered into or sold, and, provided, further, that
no Lender shall transfer, grant or assign any participation under which the
participant shall have rights to approve any amendment to or waiver of this
Agreement or any other Credit Document except to the extent such amendment or
waiver would (i) extend the final scheduled maturity of any Loan or Note in
which such participant is participating (it being understood that any waiver of
any prepayment of, or the method of any application of any prepayment to, the
Loans shall not constitute an extension of the Maturity Date therefor), or
reduce the rate or extend the time of payment of interest or Fees (except in
connection with a waiver of the applicability of any post-default increase in
interest rates), or reduce the principal amount thereof, or increase such
participant’s participating interest in any Commitment over the amount thereof
then in effect (it being understood that a waiver of any Default or Event of
Default or of a mandatory reduction in the Total Commitment or a mandatory
prepayment shall not constitute a change in the terms of any Commitment), (ii)
release all or substantially all of the Collateral, (iii) release all or
substantially all of the Subsidiaries from the Subsidiary Guaranty (except as
provided therein) or (iv) consent to the assignment or transfer by the Borrower
of any of its rights and obligations under this Agreement or any other Credit
Document.

 

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(b)           Notwithstanding
the foregoing, (x) any Lender may assign all or a portion of its outstanding B
Term Loans, Delayed-Draw Term Commitments and/or Revolving Commitment and its
rights and obligations hereunder (which assignment does not have to be pro
rata among the Facilities) to (i)(A) its parent company and/or any
affiliate of such Lender which is at least 50% owned by such Lender or its
parent company or (B) to one or more other Lenders or any affiliate of any such
other Lender which is at least 50% owned by such other Lender or its parent
company (provided that any fund that invests in loans and is managed or
advised by the same investment advisor of another fund which is a Lender (or by
an affiliate of such investment advisor) shall be treated as an affiliate of
such other Lender for the purposes of this sub-clause (x)(i)(B)), or (ii) in
the case of any Lender that is a fund that invests in loans, any other fund
that invests in loans and is managed and/or advised by the same investment
advisor of such Lender or by an Affiliate of such investment advisor and (y)
with the consent of the Administrative Agent and, if no Default under Section
8.01 or 8.05 or Event of Default exists, the Borrower (which consents shall not
be unreasonably withheld or delayed), any Lender (or any Lender together with
one or more other related Lenders) may assign all, or if less than all, a
portion equal to at least (I) in the case of Revolving Commitments, $2,500,000
in the aggregate for the assigning Lender or Lenders of such outstanding Loans
and Commitments and its or their related rights and obligations hereunder and
(II) in the case of B Term Loans and Delayed-Draw B Term Commitments,
$1,000,000 in the aggregate for the assigning Lender or Lenders of such
outstanding Loans and/or Commitments and its or their related rights and
obligations hereunder, to one or more Eligible Transferees (treating any fund
that invests in loans and any other fund that invests in loans and is managed
and/or advised by the same investment advisor of such fund or by an Affiliate
of such investment advisor of such fund or by an Affiliate of such investment
advisor as a single Eligible Transferee).  If any Lender so sells or
assigns all or a part of its rights hereunder or under the Notes, any reference
in this Agreement or the Notes to such assigning Lender shall thereafter refer
to such Lender and to the respective assignee to the extent of their respective
interests and the respective assignee shall have, to the extent of such
assignment (unless otherwise provided therein), the same rights and benefits as
it would if it were such assigning Lender.  Each assignment pursuant
to this Section 11.04(b) shall be effected by the assigning Lender and the
assignee Lender executing an Assignment Agreement and giving the Administrative
Agent written notice thereof.  At the time of any such assignment,
(i) either the assigning or the assignee Lender shall pay to the Administrative
Agent a nonrefundable assignment fee of $3,500 (provided that only one
assignment fee shall be payable in respect of any reasonably contemporaneous
assignment by a Lender to any one or more funds that invest in loans and are
managed and/or advised by the same investment advisor of such Lender or by an
Affiliate of such investment advisor), (ii) Annex I shall be deemed to be
amended to reflect the Commitments and Loans of the respective assignee (which
shall result in a direct reduction to the Commitment of the assigning Lender)
and of the other Lenders, and (iii) upon surrender of the old Notes the
Borrower will, at its own expense, issue new Notes to the respective assignee
and to the assigning Lender in conformity with the requirements of Section
1.05, provided, further, that such transfer or assignment will
not become effective until recorded by the Administrative Agent on the Lender
Register pursuant to Section 11.16.  To the extent of any assignment
pursuant to this Section 11.04(b) to a Person which is not already a Lender
hereunder and which is not a United States Person (as such term is defined in
Section 7701(a)(30) of the Code) for Federal income tax purposes, the
respective assignee Lender shall provide to the Borrower and the Administrative
Agent the appropriate Internal Revenue Service Forms (and, if applicable, a

 

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Section 3.04
Certificate) described in Section 3.04(b).  To the extent that an
assignment pursuant to this Section 11.04(b) would, at the time of such
assignment, result in increased costs under Section 1.10 or 3.04 from those
being charged by the respective assigning Lender prior to such assignment, then
the Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
assignment).  Nothing in this clause (b) shall prevent or prohibit
any Lender from pledging its Notes or Loans to a Federal Reserve Bank in
support of borrowings made by such Lender from such Federal Reserve Bank and,
with prior written notice to the Administrative Agent, any Lender which is a
fund may pledge all or any portion of its Notes or Loans to its trustee or to a
collateral agent or to another creditor providing credit or credit support to
such Lender in support of its obligations to such trustee, such collateral
agent or a holder of, or any other representative of a holder of, such
obligations, or such other creditor, as the case may be; provided that
no such pledge shall release the transferor Lender from any of its obligations
hereunder or substitute any such trustee, collateral agent or other assignee
for such Lender as a party hereto.

 

(c)           Notwithstanding
any other provisions of this Section 11.04, no transfer or assignment of the interests
or obligations of any Lender hereunder or any grant of participation therein
shall be permitted if such transfer, assignment or grant would require the
Borrower or any of its Subsidiaries to (i) file a registration statement with
the SEC, (ii) qualify the Loans under the “Blue Sky” laws of any State or (iii)
integrate such transfer or assignment with a separate securities offering of
securities of the Borrower or any of its Subsidiaries.

 

(d)           Each
Lender initially party to this Agreement hereby represents, and each Person
that became a Lender pursuant to an assignment permitted by this Section 11
will, upon its becoming party to this Agreement, represent that it is an
Eligible Transferee which makes or invests in loans in the ordinary course and
that it will make or acquire Loans for its own account in the ordinary course, provided
that subject to the preceding clauses (a) and (b), the disposition of any
promissory notes or other evidences of or interests in Indebtedness held by
such Lender shall at all times be within its exclusive control.

 

(e)           Any
Lender which assigns all of its Commitments and/or Obligations hereunder in
accordance with Section 11.04(b) shall cease to constitute a “Lender”
hereunder, except with respect to indemnification provisions under this
Agreement (including, without limitation, Sections 1.10, 1.11, 1A.06, 3.04,
11.01 and 11.06), which shall survive as to such assigning Lender.

 

11.05  No
Waiver; Remedies Cumulative.  No failure
or delay on the part of the Administrative Agent or any Lender in exercising
any right, power or privilege hereunder or under any other Credit Document and
no course of dealing between any Credit Party and the Administrative Agent or
any Lender shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder.  The rights
and remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which the Administrative Agent or any Lender would otherwise
have.  No notice to or demand on any Credit Party in any case shall
entitle any Credit Party to any other or further notice or demand in similar or
other circumstances

 

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or constitute
a waiver of the rights of the Administrative Agent or the Lenders to any other
or further action in any circumstances without notice or demand.

 

11.06  Payments Pro Rata.  (a)  The Administrative Agent agrees that promptly
after its receipt of each payment from or on behalf of any Pledge Party in
respect of any Obligations of such Pledge Party hereunder, it shall distribute
such payment to the Lenders (other than any Lender that has expressly waived
its right to receive its pro rata share thereof) pro  rata based
upon their respective shares, if any, of the Obligations with respect to which
such payment was received.

 

(b)           Each
of the Lenders agrees that, if it should receive any amount hereunder (whether
by voluntary payment, by realization upon security, by the exercise of the
right of setoff or banker’s lien, by counterclaim or cross action, by the
enforcement of any right under the Credit Documents, or otherwise) which is
applicable to the payment of the principal of, or interest on, the Loans or
Fees, of a sum which with respect to the related sum or sums received by other
Lenders is in a greater proportion than the total of such Obligation then owed
and due to such Lender bears to the total of such Obligation then owed and due
to all of the Lenders immediately prior to such receipt, then such Lender
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Lenders an interest in the Obligations of the
respective Pledge Party to such Lenders in such amount as shall result in a
proportional participation by all of the Lenders in such amount, provided
that if all or any portion of such excess amount is thereafter recovered from
such Lender, such purchase shall be rescinded and the purchase price restored
to the extent of such recovery, but without interest.

 

(c)           Notwithstanding
anything to the contrary contained herein, the provisions of the preceding
Sections 11.06(a) and (b) shall be subject to the express provisions of this
Agreement which require, or permit, differing payments to be made to
Non-Defaulting Lenders as opposed to Defaulting Lenders.

 

11.07  Calculations;
Computations.  (a)  The financial statements to be furnished to
the Lenders pursuant hereto shall be made and prepared in accordance with GAAP
consistently applied throughout the periods involved (except as set forth in
the notes thereto or as otherwise disclosed in writing by the Borrower to the
Lenders), provided that (x) except as otherwise specifically provided
herein, all computations determining compliance with Sections 7.11 and 7.12,
including definitions used therein, shall utilize accounting principles and
policies in effect at the time of the preparation of, and in conformity with
those used to prepare, the December 31, 2003 historical financial statements of
the Borrower delivered to the Lenders pursuant to Section 5.10(b),
(y) that if at any time such computations utilize accounting principles
different from those utilized in the financial statements furnished to the
Lenders, such financial statements shall be accompanied by reconciliation
work-sheets and (z) for purposes of calculating financial terms, all covenants
and related definitions, all such calculations based on the operations of the
Borrower and its Subsidiaries on a consolidated basis shall be made without
giving effect to the operations of any Unrestricted Subsidiaries.

 

(b)           All
computations of interest and Fees hereunder shall be made on the actual number
of days elapsed over a year of 360 days (365-366 days in the case of interest
on Base Rate Loans).

 

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11.08  Governing
Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial.  (a)  This Agreement and the other Credit Documents
and the rights and obligations of the parties hereunder and thereunder shall be
construed in accordance with and be governed by the law of the State of New
York.  Any legal action or proceeding with respect to this Agreement
or any other Credit Document may be brought in the courts of the State of
New York sitting in the Borough of Manhattan or of the United States for
the Southern District of New York, and, by execution and delivery of this
Agreement, each Credit Party hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts.  Each Credit Party further
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to each Credit Party located
outside New York City and by hand delivery to each Credit Party located
within New York City, at its address for notices pursuant to Section
11.03, such service to become effective 30 days after such
mailing.  Nothing herein shall affect the right of the Administrative
Agent, any Lender to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against any Credit Party in any
other jurisdiction.

 

(b)           Each
Credit Party hereby irrevocably waives any objection which it may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in clause (a) above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.

 

(c)           Each
of the parties to this Agreement hereby irrevocably waives all right to a trial
by jury in any action, proceeding or counterclaim arising out of or relating to
this Agreement, the other Credit Documents or the transactions contemplated
hereby or thereby.

 

11.09  Counterparts.  This
Agreement may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one
and the same instrument.  A set of counterparts executed by all the
parties hereto shall be lodged with the Borrower and the Administrative Agent.

 

11.10  Effectiveness.  This
Agreement shall become effective on the date (the “Effective Date”) on
which each of the Borrower, the Administrative Agent, the Syndication Agent,
each Co-Documentation Agent and each Lender shall have signed a counterpart
hereof (whether the same or different counterparts) and shall have delivered
the same (including by way of facsimile transmission) to the Administrative
Agent.  The Administrative Agent will give the Borrower and each
Lender prompt written notice of the occurrence of the Effective Date.

 

11.11  Headings
Descriptive.  The headings of the
several sections and subsections of this Agreement are inserted for convenience
only and shall not in any way affect the meaning or construction of any
provision of this Agreement.

 

11.12  Amendment or Waiver.  (a) 
Neither this Agreement nor any other Credit Document nor any terms
hereof or thereof may be changed, waived, discharged or terminated

 

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unless such
change, waiver, discharge or termination is in writing signed by the Borrower
and the Required Lenders, provided that no such change, waiver,
discharge or termination shall, without the consent of each Lender (other than
a Defaulting Lender) (with Obligations being directly affected thereby in the
case of the following clauses (i) and (vii)), (i) extend the final scheduled
maturity of any Loan or Note (it being understood that any waiver of any
prepayment of, or the method of application of any prepayment to, the Loans
shall not constitute any such extension), or reduce the rate or extend the time
of payment of interest (other than as a result of waiving the applicability of
any post-default increase in interest rates) or Fees, or reduce (or forgive)
the principal amount thereof, or increase the Commitment of any Lender over the
amount thereof then in effect (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default
or of a mandatory reduction in the Total Commitment shall not constitute an
increase of the Commitment of any Lender, and that an increase in the available
portion of any Commitment of any Lender shall not constitute an increase in the
Commitment of such Lender), (ii) amend, modify or waive any provision of this
Section 11.12 (except for technical amendments with respect to additional
extensions of credit pursuant to this Agreement which afford the protections to
such additional extensions of credit of the type provided to the Initial B Term
Loans and the Revolving Commitments on the Initial Borrowing Date), (iii)
reduce the percentage specified in, or (except to give effect to any additional
facilities hereunder) otherwise modify, the definition of Required Lenders,
(iv) consent to the assignment or transfer by the Borrower of any of its rights
and obligations under this Agreement, (v) release all or substantially all of
the Collateral, (vi) release all or substantially all of the Subsidiaries from
the Subsidiary Guaranty (except as provided therein), or (vii) alter the
requirements set forth in Sections 3.02(B) and 11.06 that certain payments with
respect to Loans under a given Facility be applied or distributed on a pro rata basis to the holders of such Loans; provided,
further, that no such change, waiver, discharge or termination shall,
(t) except in cases where additional extensions of term loans and/or revolving
loans are being afforded substantially the same treatment afforded to the Term
Loans and RF Loans pursuant to this Agreement as originally in effect, without
the consent of the Majority Lenders of each Facility which is being allocated a
lesser prepayment, repayment or commitment reduction as a result of the actions
described below, alter the required application of any prepayments or repayments
(or commitment reduction), as between the various Facilities, pursuant to
Sections 3.02(A)(b) through (g) and Section 2.03(c) or (e), as applicable (it
being understood, however, that the Required Lenders may waive, in whole or in
part, any such prepayment, repayment or commitment reduction, so long as the
application, as amongst the various Facilities, of any such prepayment,
repayment or commitment reduction which is still required to be made is not
altered), (u) without the consent of the Majority Lenders of the respective
Facility affected thereby, amend the definition of Majority Lenders (it being
understood that, with the consent of the Required Lenders, additional
extensions of credit pursuant to this Agreement may be included in the determination
of the Majority Lenders on substantially the same basis as the extensions of
Loans and Commitments are included on the Effective Date), (v) without the
written consent of the Required RF Lenders, amend, modify or waive any
condition precedent set forth in Section 4.02 or 4.03 with respect to the
making of RF Loans, Swingline Loans or the issuance of Letters of Credit, (w)
without the consent of each Letter of Credit Issuer, amend, modify or waive any
provision of Section 1A or alter its rights or obligations with respect to
Letters of Credit, (x) without the consent of the Swingline Lender, alter its
rights or obligations with respect to Swingline Loans, (y) without the consent
of the respective Agent, amend, modify

 

124

 

or waive any
provision of Section 11 as same applies to such Agent or any other provision as
same relates to the rights or obligations of such Agent and (z) without the
consent of the Collateral Agent, amend, modify or waive any provision relating
to the rights or obligations of the Collateral Agent.

 

(b)           If,
in connection with any proposed change, waiver, discharge or termination of or
to any of the provisions of this Agreement as contemplated by clauses (i)
through (vi), inclusive, of the first proviso to Section 11.12(a), the consent
of the Required Lenders is obtained but the consent of one or more of such
other Lenders whose consent is required is not obtained, then the Borrower
shall have the right, so long as all non-consenting Lenders whose individual
consent is required are treated as described in either clause (A) or (B) below,
to either (A) replace each such non-consenting Lender or Lenders (or, at the
option of the Borrower if the respective Lender’s consent is required with respect
to less than all Facilities of Loans (or related Commitments), to replace only
the Revolving Commitments and/or Loans of the respective non-consenting Lender
which gave rise to the need to obtain such Lender’s individual consent) with
one or more Replacement Lenders pursuant to Section 1.13 so long as at the time
of such replacement, each such Replacement Lender consents to the proposed
change, waiver, discharge or termination or (B) terminate such non-consenting
Lender’s Revolving Commitment (if such Lender’s consent is required as a result
of its Revolving Commitment) and/or repay each Facility of outstanding Loans of
such Lender which gave rise to the need to obtain such Lender’s consent and/or
cash collateralize its applicable Percentage of the Letter of Credit of
Outstandings, in accordance with Sections 2.02(b) and/or 3.02(A)(a), provided
that, unless the Commitments which are terminated and Loans which are repaid
pursuant to preceding clause (B) are immediately replaced in full at such
time through the addition of new Lenders or the increase of the Commitments
and/or outstanding Loans of existing Lenders (who in each case must
specifically consent thereto), then in the case of any action pursuant to
preceding clause (B), the Required Lenders (determined after giving effect
to the proposed action) shall specifically consent thereto, provided, further,
that the Borrower shall not have the right to replace a Lender, terminate its
Commitment or repay its Loans solely as a result of the exercise of such Lender’s
rights (and the withholding of any required consent by such Lender) pursuant to
the second proviso to Section 11.12(a).

 

(c)           Notwithstanding
anything to the contrary contained in clause (a) above of this Section 11.12,
the Borrower, the Administrative Agent and each Incremental B Term Lender may,
in accordance with the provisions of Section 1.14, enter into an Incremental B
Term Commitment Agreement, provided that after the execution and
delivery by the Borrower, the Administrative Agent and each such Incremental B
Term Lender of such Incremental B Term Commitment Agreement, such Incremental B
Term Commitment Agreement may thereafter only be modified in accordance with
the requirements of clause (a) above of this Section 11.12.

 

11.13  Survival.  All
indemnities set forth herein including, without limitation, in Section 1.10,
1.11, 3.04, 10.06 or 11.01 shall survive the execution and delivery of this
Agreement and the making and repayment of the Loans.

 

11.14  Domicile of Loans.  Each
Lender may transfer and carry its Loans at, to or for the account of any branch
office, subsidiary or affiliate of such Lender, provided that the Borrower
shall not be responsible for costs arising under Section 1.10 or 3.04 resulting
from any

 

125

 

such transfer
(other than a transfer pursuant to Section 1.12) to the extent not otherwise
applicable to such Lender prior to such transfer.

 

11.15  Confidentiality.  (a) 
Each of the Lenders agrees that it will use its best efforts not to
disclose without the prior consent of the Borrower (other than to its
employees, trustees, auditors, counsel or other professional advisors, to
affiliates or to another Lender if the Lender or such Lender’s holding or
parent company in its sole discretion determines that any such party should
have access to such information) any information with respect to the Borrower
or any of its Subsidiaries which is furnished pursuant to any Credit Document
and which is designated by the Borrower or the Borrower to the Lenders in
writing as confidential; provided, that any Lender may disclose any such
information (a) as has become generally available to the public, (b) as may be
required or appropriate in any report, statement or testimony submitted to any
municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Lender or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or similar organizations (whether in the United
States or elsewhere) or their successors or to the National Association of
Insurance Commissioners, (c) as may be required or appropriate in response to
any summons or subpoena or in connection with any litigation (notice of which
will be promptly sent to the Borrower to the extent permitted by law), (d) in
order to comply with any law, order, regulation or ruling applicable to such
Lender, and (e) to any pledgee referred to in Section 11.04(b) or any
prospective transferee that is an Eligible Transferee that is acceptable to the
Borrower in connection with any contemplated transfer of any of the Notes or
any interest therein by such Lender to the extent that such prospective
transferee is notified of the confidentiality requirements relating
thereto.  No Lender shall be obligated or required to return any
materials furnished by the Borrower or any Subsidiary.  The Borrower
hereby agrees that the failure of a Lender to comply with the provisions of
this Section 11.15 shall not relieve the Credit Parties of any of their
obligations to such Lender under this Agreement and the other Credit Documents.

 

(b)           The Borrower
hereby represents and acknowledges that, to the best of its knowledge, neither
any Lender, nor any employees or agents of, or other persons affiliated with,
any Lender, have directly or indirectly made or provided any statement (oral or
written) to the Borrower or to any of its employees or agents, or other persons
affiliated with or related to the Borrower (or, so far as the Borrower is
aware, to any other person), as to the potential tax consequences of the
Transaction.

 

11.16  Lender Register.  The
Borrower hereby designates the Administrative Agent to serve as the Borrower’s
agent, solely for purposes of this Section 11.16, to maintain a register (the “Lender
Register”) on which it will record the Commitments from time to time of
each of the Lenders, the Loans made by each of the Lenders and each repayment
in respect of the principal amount of the Loans of each of the
Lenders.  Failure to make any such recordation, or any error in such
recordation shall not affect the Borrower’s obligations in respect of such
Loans.  With respect to any Lender, the transfer of the Commitments
or Loans of such Lender and the rights to the principal of, and interest on,
such Loans or any Loan made pursuant to such Commitments shall not be effective
until such transfer is recorded on the Lender Register maintained by the
Administrative Agent with respect to ownership of such Commitments and Loans
and prior to such recordation all amounts owing to the transferor with respect
to such Commitments and Loans shall remain owing to the
transferor.  The registration of assignment or

 

126

 

transfer of
all or part of any Commitments and Loans shall be recorded by the
Administrative Agent on the Lender Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment Agreement
pursuant to Section 11.04(b).  Any provision of Incremental B Term
Commitments pursuant to Section 1.14 shall be recorded by the Administrative
Agent on the Lender Register only upon the acceptance of the Administrative
Agent of a properly executed and delivered Incremental B Term Commitment
Agreement.  The Borrower agrees to indemnify the Administrative Agent
from and against any and all losses, claims, damages and liabilities of
whatsoever nature which may be imposed on, asserted against or incurred by the
Administrative Agent in performing its duties under this Section 11.16 (but
excluding such losses, claims, liabilities or liabilities incurred by reason of
the Administrative Agent’s gross negligence or willful misconduct).

 

11.17  Patriot Act Notice.  Each
Lender that is subject to the Patriot Act, the Letter of Credit Issuer and the
Administrative Agent (for itself and not on behalf of any Lender) hereby notify
the Borrower that, pursuant to the requirements of the Patriot Act, each of
them is required to obtain, verify and record information that identifies each
Credit Party, which information includes the name and address of such Credit
Party and other information that will allow such Lender, the Letter of Credit
Issuer or the Administrative Agent, as applicable, to identify such Credit
Party in accordance with the Patriot Act.

 

11.18  Post-Closing Actions.  Notwithstanding anything to the contrary
contained in this Agreement or the other Credit Documents, the parties hereto
acknowledge and agree that:

 

(a)           (i)  The security interests in respect of, and
Liens securing, the Existing Seller/Opco Notes (other than the Existing
Seller/Opco Note owed by the Borrower) are not required to have been terminated
and released, and the Borrower and the other Credit Parties are not required to
have delivered to the Administrative Agent all such releases as may have been
reasonably requested by the Administrative Agent, in form and substance
reasonably satisfactory to the Administrative Agent (including without
limitation proper termination statements (Form UCC-3 or the appropriate
equivalent)), in each case on the Initial Borrowing Date pursuant to Section
4.01(l)(vii), and (ii) within 90 days after the Initial Borrowing Date, all
security interests in respect of, and Liens securing, such Existing Seller/Opco
Notes shall have been terminated and released, and the Administrative Agent
shall have received all such releases as may have been reasonably requested by
the Administrative Agent, in form and substance reasonably satisfactory to the
Administrative Agent (including without limitation proper termination statements
(Form UCC-3 or the appropriate equivalent)).

 

(b)           (i)
A physical copy of the “Declaration of Effectiveness” constituting an IPO
Document hereunder was not required to be delivered on the Initial Borrowing
Date pursuant to Section 4.01(k) and (ii) promptly following the Borrower’s
receipt thereof from the SEC, a physical copy of such “Declaration of
Effectiveness” shall be delivered to the Administrative Agent.

 

(c)           (i)
Certified copies of Requests for Information or Copies (Form UCC-11), or
equivalent reports, each of a recent date, listing all effective financing
statements that name any of the Credit Parties listed in Annex X as debtor and
that are filed in the

 

127

 

jurisdictions set forth opposite such Credit
Party’s name in said Annex, together with copies of such other financing
statements that name such Person as debtor were not required to be delivered on
the Initial Borrowing Date, (ii) within 15 days following the Initial Borrowing
Date, such certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, and related copies of financing statements
shall have been delivered to the Collateral Agent and (iii) within 180 days
following the Initial Borrowing Date, unless otherwise agreed by the Collateral
Agent in its sole discretion, the Collateral Agent shall have received
termination statements (Form UCC-3) or such other termination statements as
shall be required by local law, fully executed (where required) for filing, for
all financing statements that name any of the Credit Parties listed in Annex X
as debtor and which cover any of the Collateral (except to the extent
evidencing Permitted Liens).

 

All
conditions precedent and representations contained in this Agreement and the
other Credit Documents shall be deemed modified to the extent necessary to
effect the foregoing (and to permit the taking of the actions described above
within the time periods required above, rather than as elsewhere provided in
the Credit Documents), provided that (x) to the extent any
representation and warranty would not be true because the foregoing actions
were not taken on the Initial Borrowing Date, the respective representation and
warranty shall be required to be true and correct in all material respects at
the time the respective action is taken (or was required to be taken) in
accordance with the foregoing provisions of this Section 11.18 and (y) all
representations and warranties relating to the Pledge Agreement shall be
required to be true in all material respects immediately after the actions
required to be taken by Section 11.18 have been taken (or were required to be
taken).  The incurrence of Loans on the
Initial Borrowing Date shall constitute a representation, warranty and covenant
by the Borrower to each of the Lenders that the actions required pursuant to
this Section 11.18 will be, or have been, taken within the relevant time
periods referred to in this Section 11.18 and that, at such time, all
representations and warranties contained in this Agreement and the other Credit
Documents shall then be true and correct in all material respects without any
modification pursuant to this Section 11.18, and the parties hereto acknowledge
and agree that the failure to take any of the actions required above, within
the relevant time periods required above, shall give rise to an immediate Event
of Default pursuant to this Agreement.

 

128

 

IN WITNESS WHEREOF, each of
the parties hereto has caused a counterpart of this Agreement to be duly
executed and delivered as of the date first above written.

 

	
  Address:
  

  	
  FAIRPOINT
  COMMUNICATIONS, INC. 

  
	
  521
  East Morehead Street, Suite 250 

  	
   

  
	
  Charlotte,
  NC 28202

  	
  By:
  

  	
   /s/
  Timothy W. Henry 

  	
   

  
	
   

  	
   

  	
   Title:
  Vice President of Finance & Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DEUTSCHE
  BANK TRUST COMPANY

  AMERICAS, Individually and as Administrative

  Agent 

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
   /s/
  Anca Trifan

  	
   

  
	
   

  	
   

  	
   Title:   Director

  
	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N.A., Individually and

  as Syndication Agent

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/
  Robert Klawinski 

  	
   

  
	
   

  	
   

  	
   Title:
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
  COBANK,
  ACB, Individually and as Co-

  Documentation Agent 

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Rick Freeman 

  	
   

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  
	
   

  	
  GENERAL
  ELECTRIC CAPITAL

  CORPORATION, Individually and as Co-

  Documentation Agent 

  
	
   

  	
   

  
	
   

  	
  By
  

  	
  /s/
  Matthew A. Toth III 

  	
   

  
	
   

  	
   

  	
  Title:
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
  GOLDMAN
  SACHS CREDIT PARTNERS L.P.

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  William Archer 

  	
   

  
	
   

  	
   

  	
  Title:
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
  MORGAN
  STANLEY SENIOR FUNDING,

  INC. 

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Eugene F. Martin 

  	
   

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

FairPoint Credit Agreement

 

 

	
   

  	
  CIT
  LENDING SERVICES CORPORATION 

  
	
   

  	
   

  
	
   

  	
  By
  

  	
  /s/
  Michael V. Monahan 

  	
   

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  
	
   

  	
  WACHOVIA
  BANK, NATIONAL

  ASSOCIATION 

  
	
   

  	
   

  
	
   

  	
  By
  

  	
  /s/
  Franklin M. Wessigner 

  	
   

  
	
   

  	
   

  	
  Title:
  Managing Director

  

 

 

ANNEX 1

 

LENDER COMMITMENTS

 

	
   

  	
   

  	
  Revolving

  Commitments

  	
   

  	
  Initial

  B Term

  Commitments

  	
   

  	
  Delayed-Draw

  B Term

  Commitments

  	
   

  
	
  Deutsche Bank Trust Company Americas

  	
   

  	
  $

  	
  25,925,000

  	
   

  	
  $

  	
  518,500,000

  	
   

  	
  $

  	
  9,250,000

  	
   

  
	
  Bank of America, N.A.

  	
   

  	
  $

  	
  20,925,000

  	
   

  	
   

  	
   

  	
  $

  	
  9,250,000

  	
   

  
	
  Goldman Sachs Credit Partners L.P.

  	
   

  	
  $

  	
  12,825,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Morgan Stanley Senior Funding, Inc.

  	
   

  	
  $

  	
  12,825,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CoBank, ACB

  	
   

  	
  $

  	
  10,000,000

  	
   

  	
  $

  	
  47,500,000

  	
   

  	
  $

  	
  2,000,000

  	
   

  
	
  General Electric Capital Corporation

  	
   

  	
  $

  	
  10,000,000

  	
   

  	
   

  	
   

  	
  $

  	
  2,000,000

  	
   

  
	
  CIT Lending Services Corporation

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wachovia Bank, National Association

  	
   

  	
  $

  	
  2,500,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
  100,000,000

  	
   

  	
  $

  	
  566,000,000

  	
   

  	
  $

  	
  22,500,000

  	
   

  

 

 

ANNEX II

 

LENDER ADDRESSES

 

	
  DEUTSCHE BANK TRUST COMPANY AMERICAS

  	
   

  	
  60 Wall
  Street

  New York, NY 10006

  Attention: Anca Trifan

  Telephone: 646-324-2184

  Facsimile: 646-324-7456

  	
   

  
	
  BANK OF AMERICA, N.A.

  	
   

  	
  901 Main
  Street, 14th Floor

  Dallas, TX 75202

  Attention: Shelley Bloom

  Telephone: 214-209-4103

  Facsimile: 214-290-9462

  	
   

  
	
  GOLDMAN SACHS CREDIT PARTNERS L.P.

  	
   

  	
  30 Hudson
  Street, 17th Floor

  Jersey City, NJ 07302

  Attention: Philip Green/Rosalee Gordon

  Telephone: 212-357-7570/4256

  Facsimile: 212-357-4597

  	
   

  
	
  MORGAN STANLEY SENIOR FUNDING, INC.

  	
   

  	
  1633
  Broadway, 25th Floor

  New York, NY 10019

  Attention: Larry Benison

  Telephone: 212-537-1439

  Facsimile: 212-537-1866

  	
   

  
	
  COBANK, ACB

  	
   

  	
  5500 South Quebec St.

  Greenwood Village, CO 80111

  Attention: Deann Sullivan

  Telephone: 303-740-4315

  Facsimile: 303-740-4021

  	
   

  
	
  GENERAL ELECTRIC CAPITAL CORPORATION

  	
   

  	
  Corporate
  Financial Services

  201 Merritt 7, P.O. Box 5201

  Norwalk, CT 06856-5201

  Attention: Mary Lou Parks

  Telephone: 203-229-5740

  Facsimile: 203-229-5791

  	
   

  
	
  CIT LENDING SERVICES CORPORATION

  	
   

  	
  1211 Avenue of the
  Americas, 21st Floor

  New York, NY 10036

  Attention: Delilah DeMetro

  Telephone: 212-536-1299

  Facsimile: 212-536-1329

  	
   

  
	
  WACHOVIA BANK, NATIONAL ASSOCIATION

  	
   

  	
  301 South
  College Street

  Charlotte, NC 28288

  Attention: Sharon Gibson

  Telephone: 704-715-0094

  Facsimile: 704-715-7608

  	
   

  

 

 

ANNEX III

 

SUBSIDIARIES

 

 

A.                                    FairPoint
Broadband, Inc. (f/k/a MJD Holdings Corp.) - 3,000 shares of Common
Stock, par value $.01 per share, authorized; 100 shares issued and outstanding.

 

FairPoint Communications,
Inc. - 100 shares

Morehead Place, 521 E. Morehead Street,

Suite 250, Charlotte, North Carolina 28202

 

B.                                    ST
Enterprises, Ltd. - 200,000 shares of Common Stock, par value $.01 per
share, authorized; 90,000 shares issued and outstanding.

 

FairPoint Communications,
Inc. - 90,000 shares

Morehead Place, 521 E. Morehead Street,

Suite 250, Charlotte, North Carolina 28202

Common Stock Purchase Warrants - 222.98 warrants issued and outstanding

Steve McGeeney - Warrants to purchase 111.49 shares

c/o Paul, Hastings, Janofsky & Walker LLP

Ninth Floor

1055 Washington Boulevard

Stamford, Connecticut  06901-2217

Sylvana Zoberg - Warrants to purchase 111.49 shares

418 East 59th Street

New York, New York  10022

 

C.                                    All
the issued and outstanding stock of the following entities is held by ST
Enterprises, Ltd., P.O. Box 199, Dodge City, Kansas 67801:

 

Northland
Telephone Company of Maine, Inc. - 200 shares of Common
stock, par value $.01 per share, authorized; 100 shares issued and outstanding

 

STE/NE
Acquisition Corp. (d/b/a Northland Telephone Company of Vermont)
- 1,000 shares of Common Stock, par value $.01 per share, authorized; 1,000 shares
issued and outstanding

 

ST
Computer Resources, Inc. - 10,000 shares of Common Stock,
no par value, authorized; 500 shares issued and outstanding

 

ST Long
Distance, Inc. - 1,000 shares of Common Stock, par value
$.01 per share, authorized; 100 shares issued and outstanding

 

 

D.            Sunflower
Telephone Company, Inc. - 1,500 shares of Common Stock, par value $100
per share, authorized; 968 shares issued and outstanding.  1,500 shares of Preferred Stock, par value
$100 per share, authorized; 234 preferred shares issued and outstanding (234
preferred shares and 282 common shares held in treasury).

 

ST Enterprises, Ltd. -
684 common shares

P.O. Box 199

Dodge City, Kansas 67081

Frank and Mathilda Schreck - 2 common shares

Marienthal, Kansas  67863

 

E.                                      MJD
Ventures, Inc. - 100 shares of Common Stock, par value $.01 per share,
authorized; 100 shares issued and outstanding.

 

FairPoint Communications,
Inc. - 100 common shares

Morehead Place, 521 E. Morehead Street,

Suite 250, Charlotte, North Carolina 28202

 

F.             All
of the issued and outstanding stock of the following entities is held by MJD
Ventures, Inc., Morehead Place, 521 E. Morehead Street, Suite 250, Charlotte,
North Carolina 28202:

 

Sidney
Telephone Company - 100,000 shares of Common Stock, par
value $.01 per share, authorized; 100 common shares issued and outstanding.

 

Ellensburg
Telephone Company - 50,000 shares of Common Stock, par
value $10.00 per share, authorized; 100 shares issued and outstanding.

 

Taconic
Telephone Corp. - 100 shares of Common Stock, par value
$100 per share, authorized; 100 shares issued and outstanding.

 

Chouteau
Telephone Company - 100 shares of Common Stock, par value
$.01 per share, authorized; 100 shares issued and outstanding.

 

C-R
Communications, Inc. - 750 shares of Common Stock,
without par value, authorized; 750 shares issued and outstanding.

 

Telephone
Service Company - 8,000 shares of Common Stock, no par
value, authorized; 100 shares issued and outstanding.

 

Chautauqua
and Erie Telephone Corporation - 100,000 shares of Common
Stock, par value $.01 per share, authorized; 100 shares

 

2

 

issued and
outstanding.  35,000 shares of Preferred
Stock, par value $50 per share, authorized; 0 shares issued and outstanding.

 

The
Columbus Grove Telephone Company - 500 shares of Common
Stock, $100 par value, authorized; 318 shares issued and outstanding.

 

Utilities,
Inc. - 50,000 shares of Common Stock, par value $.01 per
share, authorized; 100 shares issued and outstanding; 20,000 shares of Preferred
Stock authorized; 0 shares outstanding.

 

The
Orwell Telephone Company - 10,000  shares of Common Stock, no par value,
authorized; 4,795.7461 shares issued and outstanding.

 

GTC
Communications, Inc. – 1,500,000 shares of Common Stock,
par value $0.01 per share, authorized; 1,000,000 shares issued and outstanding.

 

Peoples
Mutual Telephone Company – 12,000 shares of Common Stock,
par value $25.00 per share, authorized; 9,832 shares issued and outstanding.

 

Fremont
Telcom Co. - 100,000 shares of Common Stock, no par
value, authorized; 5,155.5 issued and outstanding.

 

Fretel
Communications, LLC - 100% membership interest

 

Comerco,
Inc. - 50,000 shares of Common Stock, $10 par value,
authorized; 31,250 shares issued and outstanding.

 

Marianna
and Scenery Hill Telephone Company - 2400 shares of
Common Stock, par value $25 per share, authorized; 306 shares issued and
outstanding and 400 shares of Preferred Stock, par value $100 per share; 0
shares issued and outstanding (194 shares of Common Stock are held in
treasury).

 

Commtel
Communications Inc. – 100,000 shares of Common Stock, par
value $1.00 per share, authorized, 1 share issued and outstanding.

 

Community
Service Telephone Co. (d/b/a FairPoint New England –
Community Service Telephone Co.) – 250,000 shares of Common Stock, par value
$10.00 per share, authorized; 100 shares issued and outstanding.

 

FairPoint
Berkshire Corporation – 200 shares of Common Stock, no
par value, authorized; 100 shares issued and outstanding.

 

3

 

G.                                    YCOM
Networks, Inc. - 450 shares of Common Stock, $100 par value,
authorized; 294 shares issued and outstanding.

 

Comerco, Inc. - 294
shares

 

H.                                    Peoples
Mutual Services Company – 500 shares of Common Stock, no par value,
authorized; 1 share issued and outstanding.

 

Peoples Mutual Telephone
Company – 1 share

 

I.                                         Peoples Mutual Long Distance Company
– 10,000 shares of Common Stock, no par value authorized; 10,000 shares issued
and outstanding.

 

Peoples Mutual Telephone
Company – 10,000 shares

 

J.                                      St.
Joe Communications, Inc. – 1,000 shares of Common Stock, par value
$1.00 per share, authorized; 1,000 shares issued and outstanding.

 

GTC Communications, Inc.
– 1,000 shares

 

K.                                    GTC,
Inc. – 25,000 shares of Common Stock, par value $100 per share,
authorized; 14,890 shares issued and outstanding.

 

St. Joe Communications,
Inc. – 14,890 shares

 

L.                                     GTC
Finance Corporation (f/k/a TPGC Finance Corporation)  – 300 shares of Common Stock, par value $0.01
per share, authorized; 300 shares issued and outstanding.

 

GTC, Inc. – 300 shares

 

M.                                  MJD
Services Corp. - 100 shares of Common Stock, par value $.01 per share,
authorized; 100 shares issued and outstanding.

 

FairPoint Communications,
Inc. - 100 shares

Morehead Place, 521 E. Morehead Street,

Suite 250, Charlotte, North Carolina 28202

 

N.                                    Marianna
Tel, Inc. - 100 shares of Common Stock, par value $10 per share
authorized; 100 shares issued and outstanding.

 

Marianna and Scenery Hill
Telephone Company - 100 shares

 

O.            All
of the issued and outstanding stock of the following entities is held by MJD
Services Corp., Morehead Place, 521 E. Morehead Street, Suite 250, Charlotte,
North Carolina 28202:

 

Bluestem
Telephone Company - 100 shares of Common Stock, par value
$.01 per share, authorized; 100 shares issued and outstanding.

 

4

 

Big Sandy
Telecom, Inc. - 100 shares of Common Stock, par value
$.01 per share, authorized; 100 shares issued and outstanding.

 

Columbine
Telecom Company (f/k/a Columbine Acquisition Corp.) - 100
shares of Common Stock, par value $.01 per share, authorized; 100 shares issued
and outstanding.

 

Ravenswood
Communications, Inc. - 1,000 shares of Common Stock, no
par value, authorized; 405 shares issued and outstanding.

 

Yates
City Telephone Company - 500 shares of Common Stock,
$20.00 par value, authorized; 252 issued and outstanding.

 

P.                                     Odin
Telephone Exchange, Inc. - 150 shares of Common Stock, no par value per
share, authorized; 101 shares issued and outstanding (5.7143 shares held in treasury).

 

MJD Services Corp. -
95.2857 common shares

521 E. Morehead Street, Suite 250

Charlotte, North Carolina  28202

 

Q.                                   Orwell
Communications, Inc. - 500 shares of Common Stock, no par value,
authorized; 500 issued and outstanding.

 

The Orwell Telephone Company – 500 shares

70 South Maple Street

P.O. Box 337

Orwell, Ohio 44076-0337

 

R.                                    MJD
Capital Corp. - 100 shares of Common Stock, par value $.01 per share,
authorized; 100 shares issued and outstanding.

 

FairPoint Communications,
Inc. - 100 shares

Morehead Place, 521 E. Morehead Street,

Suite 250, Charlotte, North Carolina 28202

 

S.                                     All of the issued and outstanding stock of
the following entities is held by C-R Communications, Inc., 106 N. 6th Street,
Cornell, Illinois 61319:

 

C-R Telephone Company - 750 shares of Common
Stock, par value $10.00 per share, authorized; 100 shares issued and
outstanding.

 

C-R Long
Distance, Inc. - 
10,000 shares of Common Stock, no par value, authorized; 100 shares
issued and outstanding.

 

T.                                     Elltel
Long Distance Corp. – 100 shares of Common Stock, $0.01 par value,  authorized; 100 shares issued and
outstanding.

 

5

 

Ellensburg Telephone Company – 100 shares

305 N. Ruby St.

P.O. Box 308

Ellensburg, WA 98926

 

U.            All
of the issued and outstanding stock of the following entities is held by
Taconic Telephone Corp., One Taconic Place, Chatham, NY 12037:

 

Taconic
Cellular Corp. - 1 share of Common Stock, no par value,
authorized; 1 share issued and outstanding.

 

Taconic
Technology Corp. - 200 shares of Common Stock, no par
value, authorized; 200 shares issued and outstanding.

 

Taconic
TelCom Corp. - 1 share of Common Stock, no par value,
authorized; 1 share issued and outstanding.

 

Taconet
Wireless Corp. - 1 share of Common Stock, no par value,
authorized; 1 share issued and outstanding.

 

Taconet
Corp. - 1 share of Common Stock, no par value,
authorized; 1 share issued and outstanding.

 

V.                                    Chouteau
Telecommunications & Electronics, Inc. - 200,000 shares of Common
Stock, par value $.01 per share, authorized; 100,000 shares issued and
outstanding.

 

Chouteau Telephone Company – 100,000 shares.

102 S. McCracken

P.O. Box 909

Chouteau, OK 74337

 

W.                                All
of the issued and outstanding stock of the following entities is held by
Utilities, Inc., One Ossippee Trail East, P.O. Box 1480, Standish, ME 04084:

 

Standish
Telephone Company - 26,000 shares of Common Stock, par
value $25.00 per share, authorized, 23,560 shares issued and outstanding.  12,000 shares of Preferred Stock authorized,
0 shares issued and outstanding.

 

China
Telephone Company - 20,000 shares of Common Stock, par
value $10.00 per share, authorized; 20,000 shares issued and outstanding.

 

Maine
Telephone Company - 100,000 shares of Common Stock, par
value $.01 per share, authorized; 100 shares issued and outstanding.

 

6

 

UI Long
Distance, Inc. - 100,000 shares of Common Stock, par
value $.01 per share, authorized; 100 shares issued and outstanding.

 

UI
Communications, Inc. - 100,000 shares of Common Stock,
par value $.01 per share, authorized; 100 shares issued and outstanding.

 

UI
Telecom, Inc. - 100,000 shares of Common Stock, par value
$.01 per share, authorized; 100 shares issued and outstanding.

 

X.            All
of the issued and outstanding stock of the following entities is held by
Ravenswood Communications, Inc., 48 West 1st Street, P.O. Box 257, El Paso,
Illinois 61738:

 

The El
Paso Telephone Company - 800 shares of Common Stock, par
value $25 per share, authorized; 405 shares issued and outstanding.

 

El Paso
Long Distance Company - 1,000 shares of Common Stock, no
par value per share, authorized; 1,000 shares issued and outstanding.

 

Y.            Quality
One Technologies, Inc. - 850 shares of Common Stock, no par value,
authorized; 850 shares issued and outstanding.

 

The Columbus Grove Telephone Company – 850 shares.

 

Z.            All
of the issued and outstanding stock of the following entities is held by
Chautauqua and Erie Telephone Corporation, 30 Main Street, Westfield, New York
14787:

 

Chautauqua & Erie Communications, Inc. (f/k/a
Chautauqua & Erie Technologies, Inc.) – 200 shares of Common
Stock, no par value, authorized; 110 shares issued and outstanding.

 

Chautauqua & Erie Network, Inc. – 200 shares of
Common Stock, no par value, authorized; 101 shares issued and outstanding.

 

C&E Communications, Ltd. – 200 shares of
Common Stock, no par value, authorized; 101 shares issued and outstanding.

 

Western New York Cellular, Inc. – 200 shares of
Common Stock, no par value, authorized; 101 shares issued and outstanding.

 

AA.         Chautauqua Cable, Inc. – 200
shares of Common Stock, no par value, authorized; 100 shares issued and
outstanding.

 

Western New York
Cellular, Inc. – 100 shares.

 

7

 

BB.         FairPoint
Carrier Services, Inc. (f/k/a FairPoint Communications Solutions Corp., f/k/a
FairPoint Communications Corp.) .
– 3000 shares of Common Stock, $.01 par value, authorized, 100 issued and
outstanding.

 

FairPoint Communications,
Inc. - 100 shares

Morehead Place, 521 E. Morehead Street,

Suite 250, Charlotte, North Carolina 28202

 

CC.         All
of the issued and outstanding stock of the following entities is held by
FairPoint Carrier Services, Inc., Morehead Place, 521 E. Morehead Street, Suite
250, Charlotte, North Carolina 28202:

 

FairPoint
Communications Solutions Corp. – New York – 100 shares of
Common Stock, par value $0.01 per share authorized; 100 shares issued and
outstanding.

 

FairPoint
Communications Solutions Corp. –
Virginia – 25,000 shares of Common Stock, par value $1.00
per share authorized; 100 shares issued and outstanding.

 

DD.         The
sole member of Fremont Broadband, LLC is Fremont Telcom Co.

 

8

 

ANNEX IV

 

ERISA §3(2) PENSION PLANS SUBJECT TO TITLE IV

 

ACTIVE PLANS

 

1.                                       None

 

MULTIEMPLOYER PLANS PREVIOUSLY CONTRIBUTED TO

 

1.                                       Marianna
and Scenery Hill Telephone Company previously contributed to the National
Telephone Cooperative Association Defined Benefit Plan during the period
between September 2001 (when Borrower acquired the stock of this Subsidiary) to
December 31, 2002.  During this period,
these contributions were for amounts which were a very small percentage of this
plan’s total participants and total assets and contributions. Since 2002,
Borrower has not received and does not anticipate any request or demand that it
contribute additional amounts following its withdrawal in 2002.

 

TERMINATED OR MERGED PLANS

NO ASSETS REMAIN

 

1.                                       Retirement
Plan of Utilities, Inc and Associated Employers for Standish Telephone Company
and China Telephone Company

 

2.                                       Retirement
Plan of Utilities, Inc. and Associated Employers for Telephone Service Co.

 

3.                                       STE/NE
Acquisition Corp. Pension Plan for Vermont Employees of Transferred GTE
Operations

 

4.                                       Retirement
Plan for Employees of the Ellensburg Telephone Company

 

5.                                       Chautauqua
and Erie Telephone Corporation Management Pension Plan

 

6.                                       Chautauqua
and Erie Telephone Corporation Union Pension Plan

 

7.                                       Taconic
Telephone Corp Union Employee Defined Benefit Plan

 

8.                                       Retirement
Plan of Utilities, Inc and Associated Employers for Utilities, Inc.

 

9.                                       Taconic
Telephone Corp. Management Employee Defined Benefit Plan

 

10.                                 St.
Joe Communications, Inc. Salaried Employees Pension Plan

 

11.                                 St.
Joe Communications, Inc. Hourly Employees Pension Plan

 

 

ANNEX V

 

EXISTING LIENS

 

A.                                    Liens on Capital
Stock and Other Equity Interests of FairPoint Communications, Inc. and the
Subsidiaries

 

1.                                       Under
Kansas law, the minority stockholders of Sunflower Telephone Company, Inc. have
the right to participate in any issuance of stock by Sunflower Telephone
Company, Inc. on a pro  rata basis.

 

Mortgages

 

2.                                       Supplemental
Mortgage and Security Agreement dated as of May 6, 1975 by Taconic Telephone
Corp. in favor of the United States of America (as filed in Columbia, Dutchess
and Rensselaer Counties, New York).*

 

3.                                       Mortgage
and Security Agreement dated as of June 7, 1960 by Yelm Telephone Company in
favor of the Rural Electrification Administration.*

 

4.                                       Supplemental
Mortgage and Security Agreement dated as of October 8, 1977 by Yelm Telephone
Company in favor of the Rural Electrification Administration and Rural
Telephone Bank.*

 

5.                                       Restated
Mortgage, Security Agreement, and Financing Statement dated as of December 12,
1994 in favor of the Rural Electrification Administration. *

 

6.                                       Supplemental
Mortgage and Security Agreement dated as of July 20, 1994 by Maine Telephone
Company in favor of the Rural Telephone Finance Cooperative.

 

Liens on Tangible Personal Property of the Company
and its Subsidiaries

 

7.                                       Liens
on the capital stock of the Subsidiaries as described in Annex V(A).

 

8.                                       Liens
on all tangible personal property of Taconic Telephone Corp. in favor of the
United States of America.*

 

9.                                       Liens
on all tangible personal property of Yelm Telephone Company in favor of Rural
Electrification Administration.*

 

10.                                 Liens
on all tangible personal property of Yelm Telephone Company in favor of Rural
Electrification Administration and Rural Telephone Bank.*

 

11.                                 Liens
on all tangible personal property of Maine Telephone Company in favor of Rural
Telephone Finance Cooperative.

 

* To be released post-closing
in accordance with Section 11.18 of the Credit Agreement.

 

 

ANNEX VI

 

SCHEDULED EXISTING INDEBTEDNESS

 

1.                                       Indemnification
Agreement dated July 31, 1994 among WFT Acquisition Co., STE/NE Acquisition
Corp. and Vermont Telephone Company, Inc.

 

2.                                       Unsecured Demand
Notes to Chautauqua and Erie Telephone Corporation from various holders in the
approximate aggregate principal amount of $387,000.

 

3.                                       Secured Note of
Maine Telephone Company payable to Rural Telephone Finance Cooperative in an
approximate outstanding principal amount of $2,156,200.

 

 

ANNEX VII

 

EXISTING INVESTMENTS

 

A.            Investments

 

1.     Odin
Telephone Exchange, Inc. owns 2,006 shares (representing 14.29%) of the common
stock, $.01 par value of Southern Illinois Cellular Corp. (“SICC”), which
provides cellular telephone services within certain restricted areas of central
and southern Illinois.

 

2.     The
following entities own shares of Rural Telephone Bank:

 

•   Sunflower Telephone Company,
Inc. – 571 Class C shares

•   Sidney Telephone Company – 131
Class C shares

•   Northland Telephone Company of
Maine, Inc. – 2,176 Class C shares

•   Big Sandy Telecom, Inc. – 5
Class C shares

•   Odin Telephone Exchange, Inc. –
33 Class C

•   C-R Telephone Company – 18
Class C shares

 

3.     FairPoint
Communications, Inc. has ownership in CoBank in the form of a Class B
Participation Certificate in the approximate amount of $5,220,000.

 

4.     MJD
Ventures, Inc. holds Patronage Capital Certificates in Rural Telephone Finance
Corporation in the approximate amount of $418,989.

 

5.     MJD
Ventures, Inc. owns 700 shares (12.5%) of Illinois Valley Cellular RSA 2, Inc.,
an Illinois corporation, which provides switching services to the Illinois
Valley Cellular RSA 2-I, 2-II and 2-III Partnerships.

 

6.     MJD
Services Corp. owns 700 shares (12.5%) of Illinois Valley Cellular RSA 2, Inc.

 

7.     Taconic
Telephone Corp. owns a 7.5% limited partnership interest in the Orange County -
Poughkeepsie Limited Partnership.

 

8.     Fremont
Telecom Co. owns a 13.9% membership interest in Syringa Networks, LLC, an Idaho
limited liability company, engaged in providing broadband telecommunications
services.

 

9.     FairPoint
Communications, Inc. owns 60,000 shares of Community Service Communications,
Inc.

 

10.   The
attached addendum will serve to document other non-material investments held by
FairPoint Communications, Inc. or its Subsidiaries.

 

 

FairPoint Communications, Inc.

Addendum – Non-Material Investments

 

	
   

  	
   

  	
  Book Value

  December 31, 2004

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Chouteau
  Cellular

  	
   

  	
  72,409

  	
   

  
	
  ICTC, Inc.

  	
   

  	
  7,605

  	
   

  
	
  Illinet

  	
   

  	
  11,073

  	
   

  
	
  NYS Independent Ptnship

  	
   

  	
  0

  	
   

  
	
  New York Access Billing LLC

  	
   

  	
  32,868

  	
   

  
	
  Country Club

  	
   

  	
  500

  	
   

  
	
  Krupp Investments

  	
   

  	
  1,527

  	
   

  
	
  ANPI

  	
   

  	
  0

  	
   

  
	
  Tangible Data Options, LLC

  	
   

  	
  1,529

  	
   

  
	
  Benton Ridge Telephone

  	
   

  	
  10,000

  	
   

  
	
  Vital LC

  	
   

  	
  0

  	
   

  
	
  Fall River

  	
   

  	
  3,239

  	
   

  
	
  Linktel

  	
   

  	
  0

  	
   

  
	
  Accelernet

  	
   

  	
  95,478

  	
   

  
	
  NRTC

  	
   

  	
  5,981

  	
   

  
	
  REC

  	
   

  	
  1,864

  	
   

  
	
  Hancock

  	
   

  	
  1,357

  	
   

  
	
  Peoples Mutual Services

  	
   

  	
  10,000

  	
   

  
	
  Choice One

  	
   

  	
  0

  	
   

  
	
  Other

  	
   

  	
  27

  	
   

  
	
  Total Other

  	
   

  	
  255,456

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  NQDC Plan*

  	
   

  	
  568,029

  	
   

  

 

 

* An asset, but also an
offsetting liability carried on the balance sheet.

 

2

 

ANNEX VIII

 

AFFILIATE
TRANSACTIONS

 

A.    FairPoint
Communications, Inc. has Management Services Agreements with each of its
mid-tier subsidiaries, ST Enterprises, Ltd., MJD Ventures, Inc., MJD Services
Corp. and FairPoint Broadband, Inc. (the “Mid-Tier Subsidiaries”).

 

B.    ST
Enterprises, Ltd. has Management Services Agreements with MJD Ventures, Inc.,
MJD Services Corp. and FairPoint Broadband, Inc.

 

C.    Each
Mid-Tier Subsidiary has entered into Management Services Agreements with each
of its respective operating subsidiaries.

 

D.    Warrants
as described on Annex III.

 

E.     Travel
advances in the ordinary course of business.

 

F.     Affiliate
Registration Rights Agreement, dated as of February 8, 2005 between FairPoint
Communications, Inc. and certain of its stockholders.

 

G.    Nominating
Agreement, by and among FairPoint Communications, Inc., Kelso Investment
Associates V, L.P., Kelso Equity Partners V, L.P. and Thomas H. Lee Equity Fund
IV, L.P. dated as of February 8, 2005.

 

H.    Amended
and Restated Tax Sharing Agreement, dated November 9, 2000 by and among
FairPoint Communications, Inc. and its Subsidiaries.

 

 

ANNEX IX

 

EXISTING LETTERS OF CREDIT

 

	
  Beneficiary

  	
   

  	
  Maturities

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Travelers Indemnity
  Company

  	
   

  	
  June 30, 2005

  	
   

  	
  $

  	
  1,020,510

  	
   

  

 

 

ANNEX X

 

POST-CLOSING MATTERS

 

	
  ENTITY

  	
   

  	
  JURISDICTION

  
	
   

  	
   

  	
   

  
	
  BLUESTEM
  TELEPHONE COMPANY

  	
   

  	
  Kansas-U.S.
  District Court

  
	
   

  	
   

  	
   

  
	
  CHOTEAU
  TELEPHONE COMPANY

  	
   

  	
  Oklahoma-Mayes
  County, Mayes District Court

  
	
   

  	
   

  	
   

  
	
  COLUMBINE
  TELECOM COMPANY

  	
   

  	
  Colorado-Alamosa
  District Court

  
	
   

  	
   

  	
   

  
	
  FREMONT
  TELECOM CO.

  	
   

  	
  Idaho-Fremont
  County, Fremont District Court, U.S. District Court

  
	
   

  	
   

  	
   

  
	
  GT
  COM

  	
   

  	
  Florida-Gulf
  County Circuit Court

  
	
   

  	
   

  	
   

  
	
  GTC
  COMMUNICATIONS, INC.

  	
   

  	
  Florida-Gulf
  County Circuit Court

  
	
   

  	
   

  	
   

  
	
  ODIN
  TELEPHONE EXCHANGE, INC.

  	
   

  	
  Illinois-Marion
  Circuit Court

  
	
   

  	
   

  	
   

  
	
  SUNFLOWER
  TELEPHONE COMPANY INC.

  	
   

  	
  Kansas-Hodgeman
  County, Hodgeman District Court, U.S. District Court

  
	
   

  	
   

  	
   

  
	
  YCOM
  NETWORKS, INC.

  	
   

  	
  Washington-Thurston
  County, Thurston Superior Court, U.S. Western District Court

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